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Table of Contents

Residential Mortgage Banking Activities
The following tables summarize residential mortgage banking activities. Mortgage and home equity loans managed or securitized exclude loans serviced for
others with no other continuing involvement.

 

Mortgage loans managed or securitized $ 27,001 $ 27,349
Home equity loans managed (excludes home equity lines) 6,741 8,329
Total mortgage and home equity loans managed or securitized 33,742 35,678
Less:
LHFS 1,317 1,116
Mortgage loans acquired from FDIC 668 802
Mortgage loans sold with recourse 667 783
Mortgage loans held for investment $ 31,090 $ 32,977
UPB of mortgage loan servicing portfolio $ 115,476 $ 112,835
UPB of home equity loan servicing portfolio 6,781 8,386
UPB of residential mortgage and home equity loan servicing portfolio $ 122,257 $ 121,221
UPB of residential mortgage loans serviced for others (primarily agency
conforming fixed rate) $ 90,230 $ 87,434
Maximum recourse exposure from mortgage loans sold with recourse liability 344 372
Indemnification, recourse and repurchase reserves 94 72
FHA-insured mortgage loan reserve 85 ―
In June 2014, BB&T received a letter from the HUD-OIG stating that BB&T has been selected for an audit survey to assess BB&T’s compliance with FHA
requirements related to the origination of loans insured by the FHA. In addition, HUD-OIG will evaluate BB&T’s compliance with FHA requirements related
to the implementation of a quality control program associated with the origination of FHA-insured loans. In November and December of 2014, BB&T
received HUD-OIG subpoenas from the Department of Justice seeking additional information related to the HUD-OIG review. BB&T is cooperating and is in
the process of responding to these subpoenas. While the outcome of the review process is unknown and the HUD-OIG has not asserted any claims, similar
reviews and related matters with other financial institutions have resulted in cash settlements and other remedial actions. BB&T identified a potential
exposure related to losses incurred by the FHA on defaulted loans that ranges from $25 million to $105 million and recognized an $85 million charge. The
income statement impact of this adjustment is included in other expense on the Consolidated Statements of Income. The ultimate resolution of this matter is
uncertain and the estimates of this exposure are subject to the application of significant judgment and therefore cannot be predicted with certainty at this
time.
During the year ended December 31, 2014, BB&T also recognized a $33 million adjustment related to the indemnification reserves for mortgage loans sold,
which represents an increase in estimated losses that may be incurred on FHA-insured mortgage loans that have not yet defaulted. The income statement
impact of this adjustment is included in loan-related expense on the Consolidated Statements of Income.
Payments made to date for recourse exposure on residential mortgage loans sold with recourse liability have been immaterial.


  

UPB of residential mortgage loans sold from the LHFS portfolio $ 13,400 $ 28,900 $ 25,640
Pre-tax gains recognized on mortgage loans sold and held for sale 110 292 539
Servicing fees recognized from mortgage loans serviced for others 275 259 247
Approximate weighted average servicing fee on the outstanding balance
of residential mortgage loans serviced for others 0.29 % 0.30 % 0.32 %
Weighted average interest rate on mortgage loans serviced for others 4.20 4.24 4.59
115
Source: BB&T CORP, 10-K, February 25, 2015 Powered by Morningstar® Document Research℠
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