Bank of America 2014 Annual Report Download - page 193

Bank of America 2014 191
The table below summarizes select information related to home equity loan securitization trusts in which the Corporation held a
variable interest at December 31, 2014 and 2013.
Home Equity Loan VIEs
December 31
2014 2013
(Dollars in millions)
Consolidated
VIEs
Unconsolidated
VIEs Total
Consolidated
VIEs
Unconsolidated
VIEs Total
Maximum loss exposure (1) $ 991 $ 5,224 $ 6,215 $ 1,269 $ 6,217 $ 7,486
On-balance sheet assets
Trading account assets $—$14$14 $—$12$12
Debt securities carried at fair value —3939 —2525
Loans and leases 1,014 — 1,014 1,329 — 1,329
Allowance for loan and lease losses (56) — (56) (80) — (80)
All other assets 33 — 33 20 — 20
Total $ 991 $ 53 $ 1,044 $ 1,269 $ 37 $ 1,306
On-balance sheet liabilities
Long-term debt $ 1,076 $ — $ 1,076 $ 1,450 $ — $ 1,450
All other liabilities ——— 90 — 90
Total $ 1,076 $ — $ 1,076 $ 1,540 $ — $ 1,540
Principal balance outstanding $ 1,014 $ 6,362 $ 7,376 $ 1,329 $ 7,542 $ 8,871
(1) For unconsolidated VIEs, the maximum loss exposure includes outstanding trust certificates issued by trusts in rapid amortization, net of recorded reserves, and excludes the liability for representations
and warranties obligations and corporate guarantees.
The maximum loss exposure in the table above includes the
Corporation’s obligation to provide subordinated funding to the
consolidated and unconsolidated home equity loan securitizations
that have entered a rapid amortization period. During this period,
cash payments from borrowers are accumulated to repay
outstanding debt securities and the Corporation continues to make
advances to borrowers when they draw on their lines of credit. At
December 31, 2014 and 2013, home equity loan securitizations
in rapid amortization for which the Corporation has a subordinated
funding obligation, including both consolidated and
unconsolidated trusts, had $6.3 billion and $7.6 billion of trust
certificates outstanding. This amount is significantly greater than
the amount the Corporation expects to fund. The charges that will
ultimately be recorded as a result of the rapid amortization events
depend on the undrawn available credit on the home equity lines,
which totaled $39 million and $82 million at December 31, 2014
and 2013, as well as performance of the loans, the amount of
subsequent draws and the timing of related cash flows.
During 2013, the Corporation transferred servicing for
consolidated home equity securitization trusts with total assets
of $475 million and total liabilities of $616 million to a third party.
As the Corporation no longer services the underlying loans, these
trusts were deconsolidated, resulting in a gain of $141 million that
was recorded in other income (loss) in the Consolidated Statement
of Income.