Wells Fargo 2012 Annual Report Download - page 69

Table 31: Foreclosed Assets
Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31,
(in millions) 2012 2012 2012 2012 2011
Government insured/guaranteed (1) $ 1,509 1,479 1,465 1,352 1,319
PCI loans:
Commercial 667 707 777 875 840
Consumer 219 263 321 431 465
Total PCI loans 886 970 1,098 1,306 1,305
All other loans:
Commercial 1,073 1,175 1,147 1,289 1,379
Consumer 555 585 597 670 658
Total all other loans 1,628 1,760 1,744 1,959 2,037
Total foreclosed assets $ 4,023 4,209 4,307 4,617 4,661
Analysis of changes in foreclosed assets
Balance, beginning of quarter $ 4,209 4,307 4,617 4,661 4,944
Net change in government insured/guaranteed (2) 30 14 113 33 (17)
Additions to foreclosed assets (3) 537 692 664 926 934
Reductions:
Sales (710) (750) (1,003) (896) (1,123)
Write-downs and loss on sales (43) (54) (84) (107) (77)
Total reductions (753) (804) (1,087) (1,003) (1,200)
Balance, end of quarter $ 4,023 4,209 4,307 4,617 4,661
(1) Consistent with regulatory reporting requirements, foreclosed real estate securing government insured/guaranteed loans are classified as nonperforming. Both principal and
interest for government insured/guaranteed loans secured by the foreclosed real estate are collectible because the loans are predominantly insured by the FHA or
guaranteed by the VA.
(2) Foreclosed government insured/guaranteed loans are temporarily transferred to and held by us as servicer, until reimbursement is received from FHA or VA. The net change
in government insured/guaranteed foreclosed assets is made up of inflows from mortgages held for investment and MHFS, and outflows when we are reimbursed by FHA/VA.
(3) Predominantly include loans moved into foreclosure from nonaccrual status, PCI loans transitioned directly to foreclosed assets and repossessed automobiles.
Foreclosed assets at December 31, 2012, included
$1.5 billion of foreclosed real estate that is FHA insured or VA
guaranteed and expected to have little to no loss content. The
remaining balance of $2.5 billion of foreclosed assets has been
written down to estimated net realizable value. Foreclosed
assets were down $638 million, or 14%, at December 31, 2012,
compared with December 31, 2011. At December 31, 2012, 68%
of our foreclosed assets of $4.0 billion have been in the
foreclosed assets portfolio one year or less.
Given our real estate-secured loan concentrations and
current economic conditions, we anticipate we will continue to
hold an elevated level of NPAs on our balance sheet.
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