Outstanding Loans and Leases

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Outstanding Loans and Leases	12 Months Ended
	Dec. 31, 2013
Outstanding Loans and Leases [Abstract]
Outstanding Loans and Leases	Outstanding Loans and Leases The following tables present total outstanding loans and leases and an aging analysis for the Corporation’s Home Loans, Credit Card and Other Consumer, and Commercial portfolio segments, by class of financing receivables, at December 31, 2013 and 2012.                                   December 31, 2013 (Dollars in millions) 30-59 Days Past Due (1)   60-89 Days Past Due (1)   90 Days or More Past Due (2)   Total Past Due 30 Days or More   Total Current or Less Than 30 Days Past Due (3)   Purchased Credit-impaired (4)   Loans Accounted for Under the Fair Value Option   Total Outstandings Home loans                               Core portfolio                               Residential mortgage $ 2,151   $ 754   $ 7,188   $ 10,093   $ 167,243           $ 177,336 Home equity 243   113   693   1,049   53,450           54,499 Legacy Assets & Servicing portfolio                               Residential mortgage (5) 2,758   1,412   16,746   20,916   31,142   $ 18,672       70,730 Home equity 444   221   1,292   1,957   30,623   6,593       39,173 Credit card and other consumer                               U.S. credit card 598   422   1,053   2,073   90,265           92,338 Non-U.S. credit card 63   54   131   248   11,293           11,541 Direct/Indirect consumer (6) 431   175   410   1,016   81,176           82,192 Other consumer (7) 24   8   20   52   1,925           1,977 Total consumer 6,712   3,159   27,533   37,404   467,117   25,265       529,786 Consumer loans accounted for under the fair value option (8)                         $ 2,164   2,164 Total consumer loans and leases 6,712   3,159   27,533   37,404   467,117   25,265   2,164   531,950 Commercial                               U.S. commercial 363   151   309   823   211,734           212,557 Commercial real estate (9) 30   29   243   302   47,591           47,893 Commercial lease financing 110   37   48   195   25,004           25,199 Non-U.S. commercial 103   8   17   128   89,334           89,462 U.S. small business commercial 87   55   113   255   13,039           13,294 Total commercial 693   280   730   1,703   386,702           388,405 Commercial loans accounted for under the fair value option (8)                         7,878   7,878 Total commercial loans and leases 693   280   730   1,703   386,702       7,878   396,283 Total loans and leases $ 7,405   $ 3,439   $ 28,263   $ 39,107   $ 853,819   $ 25,265   $ 10,042   $ 928,233 Percentage of outstandings 0.80 %   0.37 %   3.04 %   4.21 %   91.99 %   2.72 %   1.08 %     (1)  Home loans 30-59 days past due includes fully-insured loans of $2.5 billion and nonperforming loans of $623 million. Home loans 60-89 days past due includes fully-insured loans of $1.2 billion and nonperforming loans of $410 million. (2)  Home loans includes fully-insured loans of $17.0 billion. (3)  Home loans includes $5.9 billion and direct/indirect consumer includes $33 million of nonperforming loans. (4)  PCI loan amounts are shown gross of the valuation allowance. (5)  Total outstandings includes pay option loans of $4.4 billion. The Corporation no longer originates this product. (6)  Total outstandings includes dealer financial services loans of $38.5 billion, consumer lending loans of $2.7 billion, U.S. securities-based lending loans of $31.2 billion, non-U.S. consumer loans of $4.7 billion, student loans of $4.1 billion and other consumer loans of $1.0 billion. (7)  Total outstandings includes consumer finance loans of $1.2 billion, consumer leases of $606 million, consumer overdrafts of $176 million and other non-U.S. consumer loans of $5 million. (8)  Consumer loans accounted for under the fair value option were residential mortgage loans of $2.0 billion and home equity loans of $147 million. Commercial loans accounted for under the fair value option were U.S. commercial loans of $1.5 billion and non-U.S. commercial loans of $6.4 billion. For additional information, see Note 20 – Fair Value Measurements and Note 21 – Fair Value Option. (9)  Total outstandings includes U.S. commercial real estate loans of $46.3 billion and non-U.S. commercial real estate loans of $1.6 billion.                                   December 31, 2012 (Dollars in millions) 30-59 Days Past Due (1)   60-89 Days Past Due (1)   90 Days or More Past Due (2)   Total Past Due 30 Days or More   Total Current or Less Than 30 Days Past Due (3)   Purchased Credit-impaired (4)   Loans Accounted for Under the Fair Value Option   Total Outstandings Home loans                               Core portfolio                               Residential mortgage (5) $ 2,274   $ 806   $ 6,227   $ 9,307   $ 160,809           $ 170,116 Home equity 273   146   591   1,010   59,841           60,851 Legacy Assets & Servicing portfolio                               Residential mortgage (6) 2,938   1,714   26,728   31,380   33,982   $ 17,451       82,813 Home equity 608   357   1,444   2,409   36,213   8,667       47,289 Credit card and other consumer                               U.S. credit card 729   582   1,437   2,748   92,087           94,835 Non-U.S. credit card 106   85   212   403   11,294           11,697 Direct/Indirect consumer (7) 569   239   573   1,381   81,824           83,205 Other consumer (8) 48   19   4   71   1,557           1,628 Total consumer 7,545   3,948   37,216   48,709   477,607   26,118     552,434 Consumer loans accounted for under the fair value option (9)                         $ 1,005 1,005 Total consumer loans and leases 7,545   3,948   37,216   48,709   477,607   26,118   1,005   553,439 Commercial                               U.S. commercial 323   133   639   1,095   196,031           197,126 Commercial real estate (10) 79   144   983   1,206   37,431           38,637 Commercial lease financing 84   79   30   193   23,650           23,843 Non-U.S. commercial 2   —   —   2   74,182           74,184 U.S. small business commercial 101   75   168   344   12,249           12,593 Total commercial 589   431   1,820   2,840   343,543           346,383 Commercial loans accounted for under the fair value option (9)                         7,997   7,997 Total commercial loans and leases 589   431   1,820   2,840   343,543       7,997   354,380 Total loans and leases $ 8,134   $ 4,379   $ 39,036   $ 51,549   $ 821,150   $ 26,118   $ 9,002   $ 907,819 Percentage of outstandings 0.90 %   0.48 %   4.30 %   5.68 %   90.45 %   2.88 %   0.99 %     (1)  Home loans 30-59 days past due includes fully-insured loans of $2.3 billion and nonperforming loans of $702 million. Home loans 60-89 days past due includes fully-insured loans of $1.3 billion and nonperforming loans of $558 million. (2)  Home loans includes fully-insured loans of $22.2 billion. (3)  Home loans includes $5.5 billion and direct/indirect consumer includes $63 million of nonperforming loans. (4)  PCI loan amounts are shown gross of the valuation allowance. (5)  Total outstandings includes non-U.S. residential mortgage loans of $93 million. (6)  Total outstandings includes pay option loans of $6.7 billion. The Corporation no longer originates this product. (7)  Total outstandings includes dealer financial services loans of $35.9 billion, consumer lending loans of $4.7 billion, U.S. securities-based lending loans of $28.3 billion, non-U.S. consumer loans of $8.3 billion, student loans of $4.8 billion and other consumer loans of $1.2 billion. (8)  Total outstandings includes consumer finance loans of $1.4 billion, consumer leases of $34 million, consumer overdrafts of $177 million and other non-U.S. consumer loans of $5 million. (9)  Consumer loans accounted for under the fair value option were residential mortgage loans of $1.0 billion. Commercial loans accounted for under the fair value option were U.S. commercial loans of $2.3 billion and non-U.S. commercial loans of $5.7 billion. For additional information, see Note 20 – Fair Value Measurements and Note 21 – Fair Value Option. (10)  Total outstandings includes U.S. commercial real estate loans of $37.2 billion and non-U.S. commercial real estate loans of $1.5 billion. The Corporation mitigates a portion of its credit risk on the residential mortgage portfolio through the use of synthetic securitization vehicles. These vehicles issue long-term notes to investors, the proceeds of which are held as cash collateral. The Corporation pays a premium to the vehicles to purchase mezzanine loss protection on a portfolio of residential mortgage loans owned by the Corporation. Cash held in the vehicles is used to reimburse the Corporation in the event that losses on the mortgage portfolio exceed 10 basis points (bps) of the original pool balance, up to the remaining amount of purchased loss protection of $339 million and $500 million at December 31, 2013 and 2012. The vehicles from which the Corporation purchases credit protection are VIEs. The Corporation does not have a variable interest in these vehicles and, accordingly, these vehicles are not consolidated by the Corporation. Amounts due from the vehicles are recorded in other income (loss) in the Consolidated Statement of Income when the Corporation recognizes a reimbursable loss, as described above. Amounts are collected when reimbursable losses are realized through the sale of the underlying collateral. At December 31, 2013 and 2012, the Corporation had a receivable of $198 million and $305 million from these vehicles for reimbursement of losses, and principal of $12.5 billion and $17.6 billion of residential mortgage loans was referenced under these agreements. The Corporation records an allowance for credit losses on these loans without regard to the existence of the purchased loss protection as the protection does not represent a guarantee of individual loans. In addition, the Corporation has entered into long-term credit protection agreements with FNMA and FHLMC on loans totaling $28.2 billion and $24.3 billion at December 31, 2013 and 2012, providing full protection on residential mortgage loans that become severely delinquent. All of these loans are individually insured and therefore the Corporation does not record an allowance for credit losses related to these loans. For additional information, see Note 7 – Representations and Warranties Obligations and Corporate Guarantees. Nonperforming Loans and Leases The Corporation classifies junior-lien home equity loans as nonperforming when the first-lien loan becomes 90 days past due even if the junior-lien loan is performing. At December 31, 2013 and 2012, $1.2 billion and $1.5 billion of such junior-lien home equity loans were included in nonperforming loans. The Corporation classifies consumer real estate loans that have been discharged in Chapter 7 bankruptcy and not reaffirmed by the borrower as troubled debt restructurings (TDRs), irrespective of payment history or delinquency status, even if the repayment terms for the loan have not been otherwise modified. The Corporation continues to have a lien on the underlying collateral. At December 31, 2013, nonperforming loans discharged in Chapter 7 bankruptcy with no change in repayment terms at the time of discharge were $1.8 billion of which $1.1 billion were current on their contractual payments while $642 million were 90 days or more past due. Of the contractually current nonperforming loans, nearly 80 percent were discharged in Chapter 7 bankruptcy more than 12 months ago, and nearly 50 percent were discharged 24 months or more ago. As subsequent cash payments are received on the loans that are contractually current, the interest component of the payments is generally recorded as interest income on a cash basis and the principal component is recorded as a reduction in the carrying value of the loan. The table below presents the Corporation’s nonperforming loans and leases including nonperforming TDRs, and loans accruing past due 90 days or more at December 31, 2013 and 2012. Nonperforming loans held-for-sale (LHFS) are excluded from nonperforming loans and leases as they are recorded at either fair value or the lower of cost or fair value. For more information on the criteria for classification as nonperforming, see Note 1 – Summary of Significant Accounting Principles.                 Credit Quality                       December 31   Nonperforming Loans and Leases (1)   Accruing Past Due 90 Days or More (Dollars in millions) 2013   2012   2013   2012 Home loans               Core portfolio               Residential mortgage (2) $ 3,316   $ 3,193   $ 5,137   $ 3,984 Home equity 1,431   1,265   —   — Legacy Assets & Servicing portfolio               Residential mortgage (2) 8,396   11,862   11,824   18,173 Home equity 2,644   3,017   —   — Credit card and other consumer               U.S. credit card n/a   n/a   1,053   1,437 Non-U.S. credit card n/a   n/a   131   212 Direct/Indirect consumer 35   92   408   545 Other consumer 18   2   2   2 Total consumer 15,840   19,431   18,555   24,353 Commercial               U.S. commercial 819   1,484   47   65 Commercial real estate 322   1,513   21   29 Commercial lease financing 16   44   41   15 Non-U.S. commercial 64   68   17   — U.S. small business commercial 88   115   78   120 Total commercial 1,309   3,224   204   229 Total loans and leases $ 17,149   $ 22,655   $ 18,759   $ 24,582 (1)  Nonperforming loan balances do not include nonaccruing TDRs removed from the PCI loan portfolio prior to January 1, 2010 of $260 million and $521 million at December 31, 2013 and 2012. (2)  Residential mortgage loans in the Core and Legacy Assets & Servicing portfolios accruing past due 90 days or more are fully-insured loans. At December 31, 2013 and 2012, residential mortgage includes $13.0 billion and $17.8 billion of loans on which interest has been curtailed by the FHA, and therefore are no longer accruing interest, although principal is still insured, and $4.0 billion and $4.4 billion of loans on which interest is still accruing. n/a = not applicable Credit Quality Indicators The Corporation monitors credit quality within its Home Loans, Credit Card and Other Consumer, and Commercial portfolio segments based on primary credit quality indicators. For more information on the portfolio segments, see Note 1 – Summary of Significant Accounting Principles. Within the Home Loans portfolio segment, the primary credit quality indicators are refreshed LTV and refreshed FICO score. Refreshed LTV measures the carrying value of the loan as a percentage of the value of property securing the loan, refreshed quarterly. Home equity loans are evaluated using combined loan-to-value (CLTV) which measures the carrying value of the combined loans that have liens against the property and the available line of credit as a percentage of the value of the property securing the loan, refreshed quarterly. FICO score measures the creditworthiness of the borrower based on the financial obligations of the borrower and the borrower’s credit history. At a minimum, FICO scores are refreshed quarterly, and in many cases, more frequently. FICO scores are also a primary credit quality indicator for the Credit Card and Other Consumer portfolio segment and the business card portfolio within U.S. small business commercial. Within the Commercial portfolio segment, loans are evaluated using the internal classifications of pass rated or reservable criticized as the primary credit quality indicators. The term reservable criticized refers to those commercial loans that are internally classified or listed by the Corporation as Special Mention, Substandard or Doubtful, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not considered reservable criticized. In addition to these primary credit quality indicators, the Corporation uses other credit quality indicators for certain types of loans. The following tables present certain credit quality indicators for the Corporation’s Home Loans, Credit Card and Other Consumer, and Commercial portfolio segments, by class of financing receivables, at December 31, 2013 and 2012.                         Home Loans – Credit Quality Indicators (1)       December 31, 2013 (Dollars in millions) Core Portfolio Residential Mortgage (2)   Legacy Assets & Servicing Residential Mortgage (2)   Residential Mortgage PCI (3)   Core Portfolio Home Equity (2)   Legacy Assets & Servicing Home Equity (2)   Home Equity PCI Refreshed LTV (4)                       Less than or equal to 90 percent $ 95,833   $ 22,391   $ 11,400   $ 45,898   $ 16,714   $ 2,036 Greater than 90 percent but less than or equal to 100 percent 5,541   4,134   2,653   3,659   4,233   698 Greater than 100 percent 6,250   7,998   4,619   4,942   11,633   3,859 Fully-insured loans (5) 69,712   17,535   —   —   —   — Total home loans $ 177,336   $ 52,058   $ 18,672   $ 54,499   $ 32,580   $ 6,593 Refreshed FICO score                       Less than 620 $ 5,924   $ 10,391   $ 9,792   $ 2,343   $ 4,229   $ 1,072 Greater than or equal to 620 and less than 680 7,863   5,452   3,135   4,057   5,050   1,165 Greater than or equal to 680 and less than 740 24,034   7,791   3,034   11,276   9,032   1,935 Greater than or equal to 740 69,803   10,889   2,711   36,823   14,269   2,421 Fully-insured loans (5) 69,712   17,535   —   —   —   — Total home loans $ 177,336   $ 52,058   $ 18,672   $ 54,499   $ 32,580   $ 6,593 (1)  Excludes $2.2 billion of loans accounted for under the fair value option. (2)  Excludes PCI loans. (3)  Includes $4.0 billion of pay option loans. The Corporation no longer originates this product. (4)  Refreshed LTV percentages for PCI loans are calculated using the carrying value net of the related valuation allowance. (5)  Credit quality indicators are not reported for fully-insured loans as principal repayment is insured.                 Credit Card and Other Consumer – Credit Quality Indicators       December 31, 2013 (Dollars in millions) U.S. Credit Card   Non-U.S. Credit Card   Direct/Indirect Consumer   Other Consumer (1) Refreshed FICO score               Less than 620 $ 4,989   $ —   $ 1,220   $ 539 Greater than or equal to 620 and less than 680 12,753   —   3,345   264 Greater than or equal to 680 and less than 740 35,413   —   9,887   199 Greater than or equal to 740 39,183   —   26,220   188 Other internal credit metrics (2, 3, 4) —   11,541   41,520   787 Total credit card and other consumer $ 92,338   $ 11,541   $ 82,192   $ 1,977 (1)  60 percent of the other consumer portfolio is associated with portfolios from certain consumer finance businesses that the Corporation previously exited. (2)  Other internal credit metrics may include delinquency status, geography or other factors. (3)  Direct/indirect consumer includes $35.8 billion of securities-based lending which is overcollateralized and therefore has minimal credit risk and $4.1 billion of loans the Corporation no longer originates. (4)  Non-U.S. credit card represents the U.K. credit card portfolio which is evaluated using internal credit metrics, including delinquency status. At December 31, 2013, 98 percent of this portfolio was current or less than 30 days past due, one percent was 30-89 days past due and one percent was 90 days or more past due.                     Commercial – Credit Quality Indicators (1)       December 31, 2013 (Dollars in millions) U.S. Commercial   Commercial Real Estate   Commercial Lease Financing   Non-U.S. Commercial   U.S. Small Business Commercial (2) Risk ratings                   Pass rated $ 205,416   $ 46,507   $ 24,211   $ 88,138   $ 1,191 Reservable criticized 7,141   1,386   988   1,324   346 Refreshed FICO score (3)                   Less than 620                 224 Greater than or equal to 620 and less than 680                 534 Greater than or equal to 680 and less than 740                 1,567 Greater than or equal to 740                 2,779 Other internal credit metrics (3, 4)                 6,653 Total commercial $ 212,557   $ 47,893   $ 25,199   $ 89,462   $ 13,294 (1)  Excludes $7.9 billion of loans accounted for under the fair value option. (2)  U.S. small business commercial includes $289 million of criticized business card and small business loans which are evaluated using refreshed FICO scores or internal credit metrics, including delinquency status, rather than risk ratings. At December 31, 2013, 99 percent of the balances where internal credit metrics are used was current or less than 30 days past due. (3)  Refreshed FICO score and other internal credit metrics are applicable only to the U.S. small business commercial portfolio. (4)  Other internal credit metrics may include delinquency status, application scores, geography or other factors.                         Home Loans – Credit Quality Indicators (1)       December 31, 2012 (Dollars in millions) Core Portfolio Residential Mortgage (2)   Legacy Assets & Servicing Residential Mortgage (2)   Residential Mortgage PCI (3)   Core Portfolio Home Equity (2)   Legacy Assets & Servicing Home Equity (2)   Home Equity PCI Refreshed LTV (4)                       Less than or equal to 90 percent $ 80,585   $ 20,613   $ 8,581   $ 44,971   $ 15,922   $ 2,074 Greater than 90 percent but less than or equal to 100 percent 8,891   5,097   2,368   5,825   4,507   805 Greater than 100 percent 12,984   16,454   6,502   10,055   18,193   5,788 Fully-insured loans (5) 67,656   23,198   —   —   —   — Total home loans $ 170,116   $ 65,362   $ 17,451   $ 60,851   $ 38,622   $ 8,667 Refreshed FICO score                       Less than 620 $ 6,366   $ 14,320   $ 8,647   $ 2,586   $ 5,411   $ 1,989 Greater than or equal to 620 and less than 680 8,561   6,157   2,712   4,500   5,921   1,529 Greater than or equal to 680 and less than 740 25,141   8,611   2,976   12,625   10,395   2,299 Greater than or equal to 740 62,392   13,076   3,116   41,140   16,895   2,850 Fully-insured loans (5) 67,656   23,198   —   —   —   — Total home loans $ 170,116   $ 65,362   $ 17,451   $ 60,851   $ 38,622   $ 8,667 (1)  Excludes $1.0 billion of loans accounted for under the fair value option. (2)  Excludes PCI loans. (3)  Includes $6.1 billion of pay option loans. The Corporation no longer originates this product. (4)  Refreshed LTV percentages for PCI loans are calculated using the carrying value net of the related valuation allowance. (5)  Credit quality indicators are not reported for fully-insured loans as principal repayment is insured.                 Credit Card and Other Consumer – Credit Quality Indicators       December 31, 2012 (Dollars in millions) U.S. Credit Card   Non-U.S. Credit Card   Direct/Indirect Consumer   Other Consumer (1) Refreshed FICO score               Less than 620 $ 6,188   $ —   $ 1,896   $ 668 Greater than or equal to 620 and less than 680 13,947   —   3,367   301 Greater than or equal to 680 and less than 740 37,167   —   9,592   232 Greater than or equal to 740 37,533   —   25,164   212 Other internal credit metrics (2, 3, 4) —   11,697   43,186   215 Total credit card and other consumer $ 94,835   $ 11,697   $ 83,205   $ 1,628 (1)  87 percent of the other consumer portfolio is associated with portfolios from certain consumer finance businesses that the Corporation previously exited. (2)  Other internal credit metrics may include delinquency status, geography or other factors. (3)  Direct/indirect consumer includes $36.5 billion of securities-based lending which is overcollateralized and therefore has minimal credit risk and $4.8 billion of loans the Corporation no longer originates. (4)  Non-U.S. credit card represents the U.K. credit card portfolio which is evaluated using internal credit metrics, including delinquency status. At December 31, 2012, 97 percent of this portfolio was current or less than 30 days past due, one percent was 30-89 days past due and two percent was 90 days or more past due.                     Commercial – Credit Quality Indicators (1)       December 31, 2012 (Dollars in millions) U.S. Commercial   Commercial Real Estate   Commercial Lease Financing   Non-U.S. Commercial   U.S. Small Business Commercial (2) Risk ratings                   Pass rated $ 189,602   $ 34,968   $ 22,874   $ 72,688   $ 1,690 Reservable criticized 7,524   3,669   969   1,496   573 Refreshed FICO score (3)                   Less than 620                 400 Greater than or equal to 620 and less than 680                 580 Greater than or equal to 680 and less than 740                 1,553 Greater than or equal to 740                 2,496 Other internal credit metrics (3, 4)                 5,301 Total commercial $ 197,126   $ 38,637   $ 23,843   $ 74,184   $ 12,593 (1)  Excludes $8.0 billion of loans accounted for under the fair value option. (2)  U.S. small business commercial includes $366 million of criticized business card and small business loans which are evaluated using refreshed FICO scores or internal credit metrics, including delinquency status, rather than risk ratings. At December 31, 2012, 98 percent of the balances where internal credit metrics are used was current or less than 30 days past due. (3)  Refreshed FICO score and other internal credit metrics are applicable only to the U.S. small business commercial portfolio. (4)  Other internal credit metrics may include delinquency status, application scores, geography or other factors. Impaired Loans and Troubled Debt Restructurings A loan is considered impaired when, based on current information, it is probable that the Corporation will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans and all consumer and commercial TDRs. For additional information, see Note 1 – Summary of Significant Accounting Principles. Impaired loans exclude nonperforming consumer loans and nonperforming commercial leases unless they are classified as TDRs. Loans accounted for under the fair value option are also excluded. Purchased credit-impaired (PCI) loans are excluded and reported separately on page 198. Home Loans Impaired home loans within the Home Loans portfolio segment consist entirely of TDRs. Excluding PCI loans, most modifications of home loans meet the definition of TDRs when a binding offer is extended to a borrower. Modifications of home loans are done in accordance with the government’s Making Home Affordable Program (modifications under government programs) or the Corporation’s proprietary programs (modifications under proprietary programs). These modifications are considered to be TDRs if concessions have been granted to borrowers experiencing financial difficulties. Concessions may include reductions in interest rates, capitalization of past due amounts, principal and/or interest forbearance, payment extensions, principal and/or interest forgiveness, or combinations thereof. During 2012, the Corporation implemented a borrower assistance program that provides forgiveness of principal balances in connection with the settlement agreement among the Corporation and certain of its affiliates and subsidiaries, together with the U.S. Department of Justice (DOJ), the U.S. Department of Housing and Urban Development (HUD) and other federal agencies, and 49 state Attorneys General concerning the terms of a global settlement resolving investigations into certain origination, servicing and foreclosure practices (National Mortgage Settlement). In addition, the Corporation also provides interest rate modifications to qualified borrowers pursuant to the National Mortgage Settlement and these interest rate modifications are not considered to be TDRs. Prior to permanently modifying a loan, the Corporation may enter into trial modifications with certain borrowers under both government and proprietary programs, including the borrower assistance program pursuant to the National Mortgage Settlement. Trial modifications generally represent a three- to four-month period during which the borrower makes monthly payments under the anticipated modified payment terms. Upon successful completion of the trial period, the Corporation and the borrower enter into a permanent modification. Binding trial modifications are classified as TDRs when the trial offer is made and continue to be classified as TDRs regardless of whether the borrower enters into a permanent modification. Home loans that have been discharged in Chapter 7 bankruptcy with no change in repayment terms at the time of discharge of $3.6 billion were included in TDRs at December 31, 2013, of which $1.8 billion were classified as nonperforming and $1.8 billion were loans fully-insured by the Federal Housing Administration (FHA). Of the $3.6 billion of home loan TDRs, approximately 27 percent, 30 percent and 43 percent were discharged in Chapter 7 bankruptcy in 2013, 2012 and in years prior to 2012, respectively. For more information on loans discharged in Chapter 7 bankruptcy, see Nonperforming Loans and Leases in this Note. A home loan, excluding PCI loans which are reported separately, is not classified as impaired unless it is a TDR. Once such a loan has been designated as a TDR, it is then individually assessed for impairment. Home loan TDRs are measured primarily based on the net present value of the estimated cash flows discounted at the loan’s original effective interest rate, as discussed in the following paragraph. If the carrying value of a TDR exceeds this amount, a specific allowance is recorded as a component of the allowance for loan and lease losses. Alternatively, home loan TDRs that are considered to be dependent solely on the collateral for repayment (e.g., due to the lack of income verification or as a result of being discharged in Chapter 7 bankruptcy) are measured based on the estimated fair value of the collateral and a charge-off is recorded if the carrying value exceeds the fair value of the collateral. Home loans that reached 180 days past due prior to modification had been charged off to their net realizable value before they were modified as TDRs in accordance with established policy. Therefore, modifications of home loans that are 180 or more days past due as TDRs do not have an impact on the allowance for loan and lease losses nor are additional charge-offs required at the time of modification. Subsequent declines in the fair value of the collateral after a loan has reached 180 days past due are recorded as charge-offs. Fully-insured loans are protected against principal loss, and therefore, the Corporation does not record an allowance for loan and lease losses on the outstanding principal balance, even after they have been modified in a TDR. The net present value of the estimated cash flows used to measure impairment is based on model-driven estimates of projected payments, prepayments, defaults and loss-given-default (LGD). Using statistical modeling methodologies, the Corporation estimates the probability that a loan will default prior to maturity based on the attributes of each loan. The factors that are most relevant to the probability of default are the refreshed LTV, or in the case of a subordinated lien, refreshed CLTV, borrower credit score, months since origination (i.e., vintage) and geography. Each of these factors is further broken down by present collection status (whether the loan is current, delinquent, in default or in bankruptcy). Severity (or LGD) is estimated based on the refreshed LTV for first mortgages or CLTV for subordinated liens. The estimates are based on the Corporation’s historical experience as adjusted to reflect an assessment of environmental factors that may not be reflected in the historical data, such as changes in real estate values, local and national economies, underwriting standards and the regulatory environment. The probability of default models also incorporate recent experience with modification programs including redefaults subsequent to modification, a loan’s default history prior to modification and the change in borrower payments post-modification. At December 31, 2013 and 2012, remaining commitments to lend additional funds to debtors whose terms have been modified in a home loan TDR were immaterial. Home loan foreclosed properties totaled $533 million and $650 million at December 31, 2013 and 2012. The table below provides information for impaired loans in the Corporation’s Home Loans portfolio segment at December 31, 2013 and 2012, and for 2013, 2012 and 2011, and includes primarily loans managed by Legacy Assets & Servicing. Certain impaired home loans do not have a related allowance as the current valuation of these impaired loans exceeded the carrying value, which is net of previously recorded charge-offs.                         Impaired Loans – Home Loans                   December 31, 2013   December 31, 2012 (Dollars in millions) Unpaid Principal Balance   Carrying Value   Related Allowance   Unpaid Principal Balance   Carrying Value   Related Allowance With no recorded allowance                       Residential mortgage $ 21,567   $ 16,450   $ —   $ 20,226   $ 14,967   $ — Home equity 3,249   1,385   —   2,624   1,103   — With an allowance recorded                       Residential mortgage 13,341   12,862   991   14,223   13,158   1,252 Home equity 893   761   240   1,256   1,022   448 Total                       Residential mortgage $ 34,908   $ 29,312   $ 991   $ 34,449   $ 28,125   $ 1,252 Home equity 4,142   2,146   240   3,880   2,125   448                           2013   2012   2011   Average Carrying Value   Interest Income Recognized (1)   Average Carrying Value   Interest Income Recognized (1)   Average Carrying Value   Interest Income Recognized (1) With no recorded allowance                       Residential mortgage $ 16,625   $ 621   $ 10,937   $ 366   $ 6,507   $ 241 Home equity 1,245   76   734   49   442   23 With an allowance recorded                       Residential mortgage 13,926   616   11,575   423   9,552   325 Home equity 912   41   1,145   44   1,357   34 Total                       Residential mortgage $ 30,551   $ 1,237   $ 22,512   $ 789   $ 16,059   $ 566 Home equity 2,157   117   1,879   93   1,799   57 (1)  Interest income recognized includes interest accrued and collected on the outstanding balances of accruing impaired loans as well as interest cash collections on nonaccruing impaired loans for which the principal is considered collectible. The table below presents the December 31, 2013, 2012 and 2011 unpaid principal balance, carrying value, and average pre- and post-modification interest rates of home loans that were modified in TDRs during 2013, 2012 and 2011, and net charge-offs that were recorded during the period in which the modification occurred. The following Home Loans portfolio segment tables include loans that were initially classified as TDRs during the period and also loans that had previously been classified as TDRs and were modified again during the period. These TDRs are managed by Legacy Assets & Servicing.                     Home Loans – TDRs Entered into During 2013, 2012 and 2011 (1)       December 31, 2013   2013 (Dollars in millions) Unpaid Principal Balance   Carrying Value   Pre-Modification Interest Rate   Post-Modification Interest Rate   Net Charge-offs (2) Residential mortgage $ 11,233   $ 10,016   5.30 %   4.27 %   $ 235 Home equity 878   521   5.29   3.92   192 Total $ 12,111   $ 10,537   5.30   4.24   $ 427                       December 31, 2012   2012 Residential mortgage $ 15,088   $ 12,228   5.52 %   4.70 %   $ 523 Home equity 1,721   858   5.22   4.39   716 Total $ 16,809   $ 13,086   5.49   4.66   $ 1,239                       December 31, 2011   2011 Residential mortgage $ 11,764   $ 9,991   5.94 %   5.16 %   $ 308 Home equity 1,112   556   6.58   5.25   239 Total $ 12,876   $ 10,547   6.01   5.17   $ 547 (1)  TDRs entered into during 2013 include residential mortgage modifications with principal forgiveness of $467 million. TDRs entered into during 2012 include residential mortgage modifications with principal forgiveness of $778 million and home equity modifications of $9 million. Prior to 2012, the principal forgiveness amount was not significant. (2)  Net charge-offs include amounts recorded on loans modified during the period that are no longer held by the Corporation at December 31, 2013, 2012 and 2011 due to sales and other dispositions. The table below presents the December 31, 2013, 2012 and 2011 carrying value for home loans that were modified in a TDR during 2013, 2012 and 2011 by type of modification.             Home Loans – Modification Programs       TDRs Entered into During 2013 (Dollars in millions) Residential Mortgage   Home Equity   Total Carrying Value Modifications under government programs           Contractual interest rate reduction $ 1,815   $ 48   $ 1,863 Principal and/or interest forbearance 35   24   59 Other modifications (1) 100   —   100 Total modifications under government programs 1,950   72   2,022 Modifications under proprietary programs           Contractual interest rate reduction 2,799   40   2,839 Capitalization of past due amounts 132   2   134 Principal and/or interest forbearance 469   17   486 Other modifications (1) 105   25   130 Total modifications under proprietary programs 3,505   84   3,589 Trial modifications 3,410   87   3,497 Loans discharged in Chapter 7 bankruptcy (2) 1,151   278   1,429 Total modifications $ 10,016   $ 521   $ 10,537               TDRs Entered into During 2012 Modifications under government programs           Contractual interest rate reduction $ 642   $ 78   $ 720 Principal and/or interest forbearance 51   31   82 Other modifications (1) 37   1   38 Total modifications under government programs 730   110   840 Modifications under proprietary programs           Contractual interest rate reduction 3,350   44   3,394 Capitalization of past due amounts 144   —   144 Principal and/or interest forbearance 424   16   440 Other modifications (1) 97   21   118 Total modifications under proprietary programs 4,015   81   4,096 Trial modifications 4,547   69   4,616 Loans discharged in Chapter 7 bankruptcy (2) 2,936   598   3,534 Total modifications $ 12,228   $ 858   $ 13,086               TDRs Entered into During 2011 Modifications under government programs           Contractual interest rate reduction $ 994   $ 189   $ 1,183 Principal and/or interest forbearance 189   36   225 Other modifications (1) 64   5   69 Total modifications under government programs 1,247   230   1,477 Modifications under proprietary programs           Contractual interest rate reduction 3,531   101   3,632 Capitalization of past due amounts 410   1   411 Principal and/or interest forbearance 946   49   995 Other modifications (1) 441   34   475 Total modifications under proprietary programs 5,328   185   5,513 Trial modifications 3,416   141   3,557 Total modifications $ 9,991   $ 556   $ 10,547 (1)  Includes other modifications such as term or payment extensions and repayment plans. (2)  Includes loans discharged in Chapter 7 bankruptcy with no change in repayment terms that are classified as TDRs. The amount for 2012 represents the cumulative impact upon adoption of the regulatory guidance. During 2013, home loans of $587 million, or 41 percent of loans discharged in Chapter 7 bankruptcy were current or less than 60 days past due. The table below presents the carrying value of loans that entered into payment default during 2013, 2012 and 2011 that were modified in a TDR during the 12 months preceding payment default. Included in the table are loans with a carrying value of $2.4 billion, $667 million and $514 million that entered payment default during 2013, 2012 and 2011 but were no longer held by the Corporation as of December 31, 2013, 2012 and 2011 due to sales and other dispositions. A payment default for home loan TDRs is recognized when a borrower has missed three monthly payments (not necessarily consecutively) since modification. Payment default on a trial modification where the borrower has not yet met the terms of the agreement are included in the table below if the borrower is 90 days or more past due three months after the offer to modify is made.             Home Loans – TDRs Entering Payment Default That Were Modified During the Preceding 12 Months       2013 (Dollars in millions)  Residential Mortgage   Home Equity   Total Carrying Value (1) Modifications under government programs $ 454   $ 2   $ 456 Modifications under proprietary programs 1,117   4   1,121 Loans discharged in Chapter 7 bankruptcy (2) 964   30   994 Trial modifications 4,376   14   4,390 Total modifications $ 6,911   $ 50   $ 6,961               2012 Modifications under government programs $ 202   $ 8   $ 210 Modifications under proprietary programs 942   14   956 Loans discharged in Chapter 7 bankruptcy (2) 1,228   53   1,281 Trial modifications 2,351   20   2,371 Total modifications $ 4,723   $ 95   $ 4,818               2011 Modifications under government programs $ 352   $ 2   $ 354 Modifications under proprietary programs 2,098   42   2,140 Trial modifications 1,101   17   1,118 Total modifications $ 3,551   $ 61   $ 3,612 (1)  Total carrying value includes loans with a carrying value of $2.4 billion, $667 million and $514 million that entered into payment default during 2013, 2012 and 2011 but were no longer held by the Corporation as of December 31, 2013, 2012 and 2011 due to sales and other dispositions. (2)  Includes loans discharged in Chapter 7 bankruptcy with no change in repayment terms that are classified as TDRs. Credit Card and Other Consumer Impaired loans within the Credit Card and Other Consumer portfolio segment consist entirely of loans that have been modified in TDRs (the renegotiated credit card and other consumer TDR portfolio, collectively referred to as the renegotiated TDR portfolio). The Corporation seeks to assist customers that are experiencing financial difficulty by modifying loans while ensuring compliance with federal laws and guidelines. Credit card and other consumer loan modifications generally involve reducing the interest rate on the account and placing the customer on a fixed payment plan not exceeding 60 months, all of which are considered TDRs. In addition, non-U.S. credit card modifications may involve reducing the interest rate on the account without placing the customer on a fixed payment plan, and are also considered TDRs. In all cases, the customer’s available line of credit is canceled. The Corporation makes loan modifications directly with borrowers for debt held only by the Corporation (internal programs). Additionally, the Corporation makes loan modifications for borrowers working with third-party renegotiation agencies that provide solutions to customers’ entire unsecured debt structures (external programs). The Corporation classifies other secured consumer loans that have been discharged in Chapter 7 bankruptcy as TDRs which are written down to collateral value and placed on nonaccrual status no later than the time of discharge. For more information on the regulatory guidance on loans discharged in Chapter 7 bankruptcy, see Nonperforming Loans and Leases in this Note. All credit card and substantially all other consumer loans that have been modified in TDRs remain on accrual status until the loan is either paid in full or charged off, which occurs no later than the end of the month in which the loan becomes 180 days past due or generally at 120 days past due for a loan that was placed on a fixed payment plan after July 1, 2012. The allowance for impaired credit card and substantially all other consumer loans is based on the present value of projected cash flows, which incorporates the Corporation’s historical payment default and loss experience on modified loans, discounted using the portfolio’s average contractual interest rate, excluding promotionally priced loans, in effect prior to restructuring. Credit card and other consumer loans are included in homogeneous pools which are collectively evaluated for impairment. For these portfolios, loss forecast models are utilized that consider a variety of factors including, but not limited to, historical loss experience, delinquency status, economic trends and credit scores. The table below provides information on the Corporation’s renegotiated TDR portfolio in the Credit Card and Other Consumer portfolio segment at December 31, 2013 and 2012, and for 2013, 2012 and 2011.                         Impaired Loans – Credit Card and Other Consumer – Renegotiated TDRs                   December 31, 2013   December 31, 2012 (Dollars in millions) Unpaid Principal Balance   Carrying Value (1)   Related Allowance   Unpaid Principal Balance   Carrying Value (1)   Related Allowance With an allowance recorded                       U.S. credit card $ 1,384   $ 1,465   $ 337   $ 2,856   $ 2,871   $ 719 Non-U.S. credit card 200   240   149   311   316   198 Direct/Indirect consumer 242   282   84   633   636   210 Other consumer 27   26   9   30   30   12 With no recorded allowance                       Direct/Indirect consumer 75   32   —   105   58   — Other consumer 34   34   —   35   35   — Total                       U.S. credit card $ 1,384   $ 1,465   $ 337   $ 2,856   $ 2,871   $ 719 Non-U.S. credit card 200   240   149   311   316   198 Direct/Indirect consumer 317   314   84   738   694   210 Other consumer 61   60   9   65   65   12                           2013   2012   2011   Average Carrying Value   Interest Income Recognized (2)   Average Carrying Value   Interest Income Recognized (2)   Average Carrying Value   Interest Income Recognized (2) With an allowance recorded                       U.S. credit card $ 2,144   $ 134   $ 4,085   $ 253   $ 7,211   $ 433 Non-U.S. credit card 266   7   464   10   759   6 Direct/Indirect consumer 456   24   929   50   1,582   85 Other consumer 28   2   29   2   30   2 With no recorded allowance                       Direct/Indirect consumer 42   —   58   —   —   — Other consumer 34   2   35   2   30   2 Total                       U.S. credit card $ 2,144   $ 134   $ 4,085   $ 253   $ 7,211   $ 433 Non-U.S. credit card 266   7   464   10   759   6 Direct/Indirect consumer 498   24   987   50   1,582   85 Other consumer 62   4   64   4   60   4 (1)  Includes accrued interest and fees. (2)  Interest income recognized includes interest accrued and collected on the outstanding balances of accruing impaired loans as well as interest cash collections on nonaccruing impaired loans for which the principal is considered collectible. The table below provides information on the Corporation’s primary modification programs for the renegotiated TDR portfolio at December 31, 2013 and 2012.                                         Credit Card and Other Consumer – Renegotiated TDRs by Program Type                       December 31   Internal Programs   External Programs   Other   Total   Percent of Balances Current or Less Than 30 Days Past Due (Dollars in millions) 2013   2012   2013   2012   2013   2012   2013   2012   2013   2012 U.S. credit card $ 842   $ 1,887   $ 607   $ 953   $ 16   $ 31   $ 1,465   $ 2,871   82.77 %   81.48 % Non-U.S. credit card 71   99   26   38   143   179   240   316   49.01   43.71 Direct/Indirect consumer 170   405   106   225   38   64   314   694   84.29   83.11 Other consumer 60   65   —   —   —   —   60   65   71.08   72.73 Total renegotiated TDRs $ 1,143   $ 2,456   $ 739   $ 1,216   $ 197   $ 274   $ 2,079   $ 3,946   78.77   78.58 The table below provides information on the Corporation’s renegotiated TDR portfolio including the December 31, 2013, 2012 and 2011 unpaid principal balance, carrying value and average pre- and post-modification interest rates of loans that were modified in TDRs during 2013, 2012 and 2011, and net charge-offs that were recorded during the period in which the modification occurred.                     Credit Card and Other Consumer – Renegotiated TDRs Entered into During 2013, 2012 and 2011       December 31, 2013   2013 (Dollars in millions) Unpaid Principal Balance   Carrying Value (1)   Pre-Modification Interest Rate   Post-Modification Interest Rate   Net Charge-offs U.S. credit card $ 299   $ 329   16.84 %   5.84 %   $ 30 Non-U.S. credit card 134   147   25.90   0.95   138 Direct/Indirect consumer 47   38   11.53   4.74   15 Other consumer 8   8   9.28   5.25   — Total $ 488   $ 522   18.89   4.37   $ 183                       December 31, 2012   2012 U.S. credit card $ 396   $ 400   17.59 %   6.36 %   $ 45 Non-U.S. credit card 196   206   26.19   1.15   190 Direct/Indirect consumer 160   113   9.59   5.72   52 Other consumer 9   9   9.97   6.44   — Total $ 761   $ 728   18.68   4.79   $ 287                       December 31, 2011   2011 U.S. credit card $ 890   $ 902   19.04 %   6.16 %   $ 106 Non-U.S. credit card 305   322   26.32   1.04   291 Direct/Indirect consumer 198   199   15.63   5.22   23 Other consumer 17   17   10.01   6.53   — Total $ 1,410   $ 1,440   20.09   4.89   $ 420 (1)  Includes accrued interest and fees. The table below provides information on the Corporation’s primary modification programs for the renegotiated TDR portfolio for loans that were modified in TDRs during 2013, 2012 and 2011.                 Credit Card and Other Consumer – Renegotiated TDRs Entered into During the Period by Program Type       2013 (Dollars in millions) Internal Programs   External Programs   Other   Total U.S. credit card $ 192   $ 137   $ —   $ 329 Non-U.S. credit card 73   74   —   147 Direct/Indirect consumer 15   8   15   38 Other consumer 8   —   —   8 Total renegotiated TDRs $ 288   $ 219   $ 15   $ 522                   2012 U.S. credit card $ 248   $ 152   $ —   $ 400 Non-U.S. credit card 112   94   —   206 Direct/Indirect consumer 36   19   58   113 Other consumer 9   —   —   9 Total renegotiated TDRs $ 405   $ 265   $ 58   $ 728                   2011 U.S. credit card $ 492   $ 407   $ 3   $ 902 Non-U.S. credit card 163   158   1   322 Direct/Indirect consumer 112   87   —   199 Other consumer 17   —   —   17 Total renegotiated TDRs $ 784   $ 652   $ 4   $ 1,440 Credit card and other consumer loans are deemed to be in payment default during the quarter in which a borrower misses the second of two consecutive payments. Payment defaults are one of the factors considered when projecting future cash flows in the calculation of the allowance for loan and lease losses for impaired credit card and other consumer loans. Based on historical experience, the Corporation estimates that 21 percent of new U.S. credit card TDRs, 70 percent of new non-U.S. credit card TDRs and 13 percent of new direct/indirect consumer TDRs may be in payment default within 12 months after modification. Loans that entered into payment default during 2013, 2012 and 2011 that had been modified in a TDR during the preceding 12 months were $61 million, $203 million and $863 million for U.S. credit card, $236 million, $298 million and $409 million for non-U.S. credit card, and $12 million, $35 million and $180 million for direct/indirect consumer, respectively. Commercial Loans Impaired commercial loans, which include nonperforming loans and TDRs (both performing and nonperforming), are primarily measured based on the present value of payments expected to be received, discounted at the loan’s original effective interest rate. Commercial impaired loans may also be measured based on observable market prices or, for loans that are solely dependent on the collateral for repayment, the estimated fair value of collateral less costs to sell. If the carrying value of a loan exceeds this amount, a specific allowance is recorded as a component of the allowance for loan and lease losses. Modifications of loans to commercial borrowers that are experiencing financial difficulty are designed to reduce the Corporation’s loss exposure while providing the borrower with an opportunity to work through financial difficulties, often to avoid foreclosure or bankruptcy. Each modification is unique and reflects the individual circumstances of the borrower. Modifications that result in a TDR may include extensions of maturity at a concessionary (below market) rate of interest, payment forbearances or other actions designed to benefit the customer while mitigating the Corporation’s risk exposure. Reductions in interest rates are rare. Instead, the interest rates are typically increased, although the increased rate may not represent a market rate of interest. Infrequently, concessions may also include principal forgiveness in connection with foreclosure, short sale or other settlement agreements leading to termination or sale of the loan. At the time of restructuring, the loans are remeasured to reflect the impact, if any, on projected cash flows resulting from the modified terms. If there was no forgiveness of principal and the interest rate was not decreased, the modification may have little or no impact on the allowance established for the loan. If a portion of the loan is deemed to be uncollectible, a charge-off may be recorded at the time of restructuring. Alternatively, a charge-off may have already been recorded in a previous period such that no charge-off is required at the time of modification. For more information on modifications for the U.S. small business commercial portfolio, see Credit Card and Other Consumer in this Note. At December 31, 2013 and 2012, remaining commitments to lend additional funds to debtors whose terms have been modified in a commercial loan TDR were immaterial. Commercial foreclosed properties totaled $90 million and $250 million at December 31, 2013 and 2012. The table below provides information for impaired loans in the Corporation’s Commercial loan portfolio segment at December 31, 2013 and 2012, and for 2013, 2012 and 2011. Certain impaired commercial loans do not have a related allowance as the valuation of these impaired loans exceeded the carrying value, which is net of previously recorded charge-offs.                         Impaired Loans – Commercial                   December 31, 2013   December 31, 2012 (Dollars in millions) Unpaid Principal Balance   Carrying Value   Related Allowance   Unpaid Principal Balance   Carrying Value   Related Allowance With no recorded allowance                       U.S. commercial $ 609   $ 577   $ —   $ 571   $ 476   $ — Commercial real estate 254   228   —   370   316   — Non-U.S. commercial 10   10   —   155   36   — With an allowance recorded                       U.S. commercial 1,581   1,262   164   2,431   1,771   159 Commercial real estate 1,066   731   61   2,920   1,848   201 Non-U.S. commercial 254   64   16   365   117   18 U.S. small business commercial (1) 186   176   36   361   317   97 Total                       U.S. commercial $ 2,190   $ 1,839   $ 164   $ 3,002   $ 2,247   $ 159 Commercial real estate 1,320   959   61   3,290   2,164   201 Non-U.S. commercial 264   74   16   520   153   18 U.S. small business commercial (1) 186   176   36   361   317   97                           2013   2012   2011   Average Carrying Value   Interest Income Recognized (2)   Average Carrying Value   Interest Income Recognized (2)   Average Carrying Value   Interest Income Recognized (2) With no recorded allowance                       U.S. commercial $ 442   $ 6   $ 588   $ 9   $ 774   $ 7 Commercial real estate 269   3   1,119   3   1,994   7 Non-U.S. commercial 28   —   104   —   101   — With an allowance recorded                       U.S. commercial 1,553   47   2,104   55   2,422   13 Commercial real estate 1,148   28   2,126   29   3,309   19 Non-U.S. commercial 109   5   77   4   76   3 U.S. small business commercial (1) 236   6   409   13   666   23 Total                       U.S. commercial $ 1,995   $ 53   $ 2,692   $ 64   $ 3,196   $ 20 Commercial real estate 1,417   31   3,245   32   5,303   26 Non-U.S. commercial 137   5   181   4   177   3 U.S. small business commercial (1) 236   6   409   13   666   23 (1)  Includes U.S. small business commercial renegotiated TDR loans and related allowance. (2)  Interest income recognized includes interest accrued and collected on the outstanding balances of accruing impaired loans as well as interest cash collections on nonaccruing impaired loans for which the principal is considered collectible. The table below presents the December 31, 2013, 2012 and 2011 unpaid principal balance and carrying value of commercial loans that were modified as TDRs during 2013, 2012 and 2011, and net charge-offs that were recorded during the period in which the modification occurred. The table below includes loans that were initially classified as TDRs during the period and, beginning in the first quarter of 2013, also loans that had previously been classified as TDRs and were modified again during the period.             Commercial – TDRs Entered into During 2013, 2012 and 2011       December 31, 2013   2013 (Dollars in millions) Unpaid Principal Balance   Carrying Value   Net Charge-offs U.S. commercial $ 926   $ 910   $ 33 Commercial real estate 483   425   3 Non-U.S. commercial 61   44   7 U.S. small business commercial (1) 8   9   1 Total $ 1,478   $ 1,388   $ 44               December 31, 2012   2012 U.S. commercial $ 590   $ 558   $ 34 Commercial real estate 793   721   20 Non-U.S. commercial 90   89   1 U.S. small business commercial (1) 22   22   5 Total $ 1,495   $ 1,390   $ 60               December 31, 2011   2011 U.S. commercial $ 1,381   $ 1,211   $ 74 Commercial real estate 1,604   1,333   152 Non-U.S. commercial 44   44   — U.S. small business commercial (1) 58   59   10 Total $ 3,087   $ 2,647   $ 236 (1)  U.S. small business commercial TDRs are comprised of renegotiated small business card loans. A commercial TDR is generally deemed to be in payment default when the loan is 90 days or more past due, including delinquencies that were not resolved as part of the modification. U.S. small business commercial TDRs are deemed to be in payment default during the quarter in which a borrower misses the second of two consecutive payments. Payment defaults are one of the factors considered when projecting future cash flows, along with observable market prices or fair value of collateral when measuring the allowance for loan losses. TDRs that were in payment default had a carrying value of $55 million, $130 million and $164 million for U.S. commercial, $128 million, $455 million and $446 million for commercial real estate, and $0, $18 million and $68 million for U.S. small business commercial at December 31, 2013, 2012 and 2011, respectively. Purchased Credit-impaired Loans PCI loans are acquired loans with evidence of credit quality deterioration since origination for which it is probable at purchase date that the Corporation will be unable to collect all contractually required payments. The following table provides details on PCI loans acquired in connection with the January 6, 2013 settlement with FNMA (the FNMA Settlement).     Purchased Loans at Acquisition Date       (Dollars in millions)   Contractually required payments including interest $ 8,274 Less: Nonaccretable difference 2,159 Cash flows expected to be collected (1) 6,115 Less: Accretable yield 1,125 Fair value of loans acquired $ 4,990 (1)  Represents undiscounted expected principal and interest cash flows at acquisition. The table below shows activity for the accretable yield on PCI loans, which includes the Countrywide Financial Corporation (Countrywide) portfolio and loans repurchased in connection with the FNMA Settlement. For more information on the FNMA Settlement, see Note 7 – Representations and Warranties Obligations and Corporate Guarantees. The amount of accretable yield is affected by changes in credit outlooks, including metrics such as default rates and loss severities, prepayments speeds, which can change the amount and period of time over which interest payments are expected to be received, and the interest rates on variable rate loans. The reclassifications from nonaccretable difference during 2013 were due to increases in expected cash flows driven by improved home prices and lower expected defaults, along with a decrease in forecasted prepayment speeds as a result of rising interest rates. Changes in the prepayment assumption affect the expected remaining life of the portfolio which results in a change to the amount of future interest cash flows.     Rollforward of Accretable Yield       (Dollars in millions)   Accretable yield, January 1, 2012 $ 4,990 Accretion (1,034 ) Disposals/transfers (109 ) Reclassifications from nonaccretable difference 797 Accretable yield, December 31, 2012 4,644 Accretion (1,194 ) Loans purchased 1,125 Disposals/transfers (361 ) Reclassifications from nonaccretable difference 2,480 Accretable yield, December 31, 2013 $ 6,694 For more information on PCI loans, see Note 1 – Summary of Significant Accounting Principles, and for the carrying value and valuation allowance for PCI loans, see Note 5 – Allowance for Credit Losses. Loans Held-for-sale The Corporation had LHFS of $11.4 billion and $19.4 billion at December 31, 2013 and 2012. Proceeds, including cash and securities, from sales, securitizations and paydowns of LHFS were $81.0 billion, $58.0 billion and $142.4 billion for 2013, 2012 and 2011, respectively. Amounts used for originations and purchases of LHFS were $65.7 billion, $59.5 billion and $118.2 billion for 2013, 2012 and 2011, respectively.