Outstanding Loans and Leases

v2.4.1.9

Outstanding Loans and Leases	12 Months Ended
	Dec. 31, 2014
Loans and Leases Receivable Disclosure [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, 2014 and 2013.                                   December 31, 2014 (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 $ 1,847   $ 700   $ 5,561   $ 8,108   $ 154,112           $ 162,220 Home equity 218   105   744   1,067   50,820           51,887 Legacy Assets & Servicing portfolio                               Residential mortgage (5) 2,008   1,060   10,513   13,581   25,244   $ 15,152       53,977 Home equity 374   174   1,166   1,714   26,507   5,617       33,838 Credit card and other consumer                               U.S. credit card 494   341   866   1,701   90,178           91,879 Non-U.S. credit card 49   39   95   183   10,282           10,465 Direct/Indirect consumer (6) 245   71   65   381   80,000           80,381 Other consumer (7) 11   2   2   15   1,831           1,846 Total consumer 5,246   2,492   19,012   26,750   438,974   20,769       486,493 Consumer loans accounted for under the fair value option (8)                         $ 2,077   2,077 Total consumer loans and leases 5,246   2,492   19,012   26,750   438,974   20,769   2,077   488,570 Commercial                               U.S. commercial 320   151   318   789   219,504           220,293 Commercial real estate (9) 138   16   288   442   47,240           47,682 Commercial lease financing 121   41   42   204   24,662           24,866 Non-U.S. commercial 5   4   —   9   80,074           80,083 U.S. small business commercial 88   45   94   227   13,066           13,293 Total commercial 672   257   742   1,671   384,546           386,217 Commercial loans accounted for under the fair value option (8)                         6,604   6,604 Total commercial loans and leases 672   257   742   1,671   384,546       6,604   392,821 Total loans and leases $ 5,918   $ 2,749   $ 19,754   $ 28,421   $ 823,520   $ 20,769   $ 8,681   $ 881,391 Percentage of outstandings 0.67 %   0.31 %   2.24 %   3.22 %   93.44 %   2.36 %   0.98 %   100.00 % (1)  Home loans 30-59 days past due includes fully-insured loans of $2.1 billion and nonperforming loans of $392 million. Home loans 60-89 days past due includes fully-insured loans of $1.1 billion and nonperforming loans of $332 million. (2)  Home loans includes fully-insured loans of $11.4 billion. (3)  Home loans includes $3.6 billion and direct/indirect consumer includes $27 million of nonperforming loans. (4)  PCI loan amounts are shown gross of the valuation allowance. (5)  Total outstandings includes pay option loans of $3.2 billion. The Corporation no longer originates this product. (6)  Total outstandings includes dealer financial services loans of $37.7 billion, unsecured consumer lending loans of $1.5 billion, U.S. securities-based lending loans of $35.8 billion, non-U.S. consumer loans of $4.0 billion, student loans of $632 million and other consumer loans of $761 million. (7)  Total outstandings includes consumer finance loans of $676 million, consumer leases of $1.0 billion, consumer overdrafts of $162 million and other non-U.S. consumer loans of $3 million. (8)  Consumer loans accounted for under the fair value option were residential mortgage loans of $1.9 billion and home equity loans of $196 million. Commercial loans accounted for under the fair value option were U.S. commercial loans of $1.9 billion and non-U.S. commercial loans of $4.7 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 $45.2 billion and non-U.S. commercial real estate loans of $2.5 billion.                                   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 %   100.00 % (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, unsecured 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. The Corporation has entered into long-term credit protection agreements with FNMA and FHLMC on loans totaling $17.2 billion and $28.2 billion at December 31, 2014 and 2013, providing full credit 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. 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, 2014 and 2013, $800 million and $1.2 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, 2014, nonperforming loans discharged in Chapter 7 bankruptcy with no change in repayment terms were $1.4 billion of which $901 million were current on their contractual payments, while $395 million were 90 days or more past due. Of the contractually current nonperforming loans, more than 80 percent were discharged in Chapter 7 bankruptcy more than 12 months ago, and more than 60 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. Excluding purchased credit-impaired (PCI) loans, the Corporation sold nonperforming and other delinquent consumer loans with a carrying value, excluding the related allowance, of $4.8 billion and $2.0 billion, and recognized gains of $247 million and $58 million recorded in noninterest income, during 2014 and 2013. 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, 2014 and 2013. 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) 2014   2013   2014   2013 Home loans               Core portfolio               Residential mortgage (2) $ 2,398   $ 3,316   $ 3,942   $ 5,137 Home equity 1,496   1,431   —   — Legacy Assets & Servicing portfolio               Residential mortgage (2) 4,491   8,396   7,465   11,824 Home equity 2,405   2,644   —   — Credit card and other consumer               U.S. credit card n/a   n/a   866   1,053 Non-U.S. credit card n/a   n/a   95   131 Direct/Indirect consumer 28   35   64   408 Other consumer 1   18   1   2 Total consumer 10,819   15,840   12,433   18,555 Commercial               U.S. commercial 701   819   110   47 Commercial real estate 321   322   3   21 Commercial lease financing 3   16   41   41 Non-U.S. commercial 1   64   —   17 U.S. small business commercial 87   88   67   78 Total commercial 1,113   1,309   221   204 Total loans and leases $ 11,932   $ 17,149   $ 12,654   $ 18,759 (1)  Nonperforming loan balances do not include nonaccruing TDRs removed from the PCI loan portfolio prior to January 1, 2010 of $102 million and $260 million at December 31, 2014 and 2013. (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, 2014 and 2013, residential mortgage includes $7.3 billion and $13.0 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 $4.1 billion and $4.0 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 the 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, 2014 and 2013.                         Home Loans – Credit Quality Indicators (1)       December 31, 2014 (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, 5)                       Less than or equal to 90 percent $ 100,255   $ 18,499   $ 9,972   $ 45,414   $ 17,453   $ 2,046 Greater than 90 percent but less than or equal to 100 percent 4,958   3,081   2,005   2,442   3,272   1,048 Greater than 100 percent 4,017   5,265   3,175   4,031   7,496   2,523 Fully-insured loans (6) 52,990   11,980   —   —   —   — Total home loans $ 162,220   $ 38,825   $ 15,152   $ 51,887   $ 28,221   $ 5,617 Refreshed FICO score                       Less than 620 $ 4,184   $ 6,313   $ 6,109   $ 2,169   $ 3,470   $ 864 Greater than or equal to 620 and less than 680 6,272   4,032   3,014   3,683   4,529   995 Greater than or equal to 680 and less than 740 21,946   6,463   3,310   10,231   7,905   1,651 Greater than or equal to 740 76,828   10,037   2,719   35,804   12,317   2,107 Fully-insured loans (6) 52,990   11,980   —   —   —   — Total home loans $ 162,220   $ 38,825   $ 15,152   $ 51,887   $ 28,221   $ 5,617 (1)  Excludes $2.1 billion of loans accounted for under the fair value option. (2)  Excludes PCI loans. (3)  Includes $2.8 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)  Effective December 31, 2014, with the exception of high-value properties, underlying values for LTV ratios are primarily determined using automated valuation models. For high-value properties, generally with an original value of $1 million or more, estimated property values are determined using the CoreLogic Case-Shiller Index. Prior-period values have been updated to reflect this change. Previously reported values were primarily determined through an index-based approach. (6)  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, 2014 (Dollars in millions) U.S. Credit Card   Non-U.S. Credit Card   Direct/Indirect Consumer   Other Consumer (1) Refreshed FICO score               Less than 620 $ 4,467   $ —   $ 1,296   $ 266 Greater than or equal to 620 and less than 680 12,177   —   1,892   227 Greater than or equal to 680 and less than 740 34,986   —   10,749   307 Greater than or equal to 740 40,249   —   25,279   881 Other internal credit metrics (2, 3, 4) —   10,465   41,165   165 Total credit card and other consumer $ 91,879   $ 10,465   $ 80,381   $ 1,846 (1)  Thirty-seven 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 $39.7 billion of securities-based lending which is overcollateralized and therefore has minimal credit risk and $632 million 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, 2014, 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, 2014 (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 $ 213,839   $ 46,632   $ 23,832   $ 79,367   $ 751 Reservable criticized 6,454   1,050   1,034   716   182 Refreshed FICO score (3)                   Less than 620                 184 Greater than or equal to 620 and less than 680                 529 Greater than or equal to 680 and less than 740                 1,591 Greater than or equal to 740                 2,910 Other internal credit metrics (3, 4)                 7,146 Total commercial $ 220,293   $ 47,682   $ 24,866   $ 80,083   $ 13,293 (1)  Excludes $6.6 billion of loans accounted for under the fair value option. (2)  U.S. small business commercial includes $762 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, 2014, 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.                         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, 5)                       Less than or equal to 90 percent $ 94,255   $ 21,587   $ 10,605   $ 44,892   $ 17,006   $ 1,598 Greater than 90 percent but less than or equal to 100 percent 7,013   4,216   2,638   3,178   3,948   1,121 Greater than 100 percent 6,356   8,720   5,429   6,429   11,626   3,874 Fully-insured loans (6) 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 $ 5,334   $ 9,955   $ 9,129   $ 2,415   $ 4,259   $ 1,045 Greater than or equal to 620 and less than 680 7,164   5,276   3,349   4,211   5,133   1,172 Greater than or equal to 680 and less than 740 22,617   7,639   3,211   11,726   9,143   1,936 Greater than or equal to 740 72,509   11,653   2,983   36,147   14,045   2,440 Fully-insured loans (6) 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)  Effective December 31, 2014, with the exception of high-value properties, underlying values for LTV ratios are primarily determined using automated valuation models. For high-value properties, generally with an original value of $1 million or more, estimated property values are determined using the CoreLogic Case-Shiller Index. Prior-period values have been updated to reflect this change. Previously reported values were primarily determined through an index-based approach. (6)  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)  Sixty 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. 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. 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. PCI loans are excluded and reported separately on page 189. For additional information, see Note 1 – Summary of Significant Accounting Principles. 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 2013 and 2012, the Corporation provided interest rate modifications to qualified borrowers pursuant to the 2012 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. 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 of $2.4 billion were included in TDRs at December 31, 2014, of which $1.4 billion were classified as nonperforming and $1.0 billion were loans fully-insured by the Federal Housing Administration (FHA). 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, less costs to sell, 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, 2014 and 2013, 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 $630 million and $533 million at December 31, 2014 and 2013. The table below provides the unpaid principal balance, carrying value and related allowance at December 31, 2014 and 2013, and the average carrying value and interest income recognized for 2014, 2013 and 2012 for impaired loans in the Corporation’s Home Loans portfolio segment 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, 2014   December 31, 2013 (Dollars in millions) Unpaid Principal Balance   Carrying Value   Related Allowance   Unpaid Principal Balance   Carrying Value   Related Allowance With no recorded allowance                       Residential mortgage $ 19,710   $ 15,605   $ —   $ 21,567   $ 16,450   $ — Home equity 3,540   1,630   —   3,249   1,385   — With an allowance recorded                       Residential mortgage $ 7,861   $ 7,665   $ 531   $ 13,341   $ 12,862   $ 991 Home equity 852   728   196   893   761   240 Total                       Residential mortgage $ 27,571   $ 23,270   $ 531   $ 34,908   $ 29,312   $ 991 Home equity 4,392   2,358   196   4,142   2,146   240                           2014   2013   2012   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 $ 15,065   $ 490   $ 16,625   $ 621   $ 10,937   $ 366 Home equity 1,486   87   1,245   76   734   49 With an allowance recorded                       Residential mortgage $ 10,826   $ 411   $ 13,926   $ 616   $ 11,575   $ 423 Home equity 743   25   912   41   1,145   44 Total                       Residential mortgage $ 25,891   $ 901   $ 30,551   $ 1,237   $ 22,512   $ 789 Home equity 2,229   112   2,157   117   1,879   93 (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 following table presents the December 31, 2014, 2013 and 2012 unpaid principal balance, carrying value, and average pre- and post-modification interest rates on home loans that were modified in TDRs during 2014, 2013 and 2012, and net charge-offs 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 primarily managed by Legacy Assets & Servicing.                     Home Loans – TDRs Entered into During 2014, 2013 and 2012 (1)       December 31, 2014   2014 (Dollars in millions) Unpaid Principal Balance   Carrying Value   Pre-Modification Interest Rate   Post-Modification Interest Rate (2)   Net Charge-offs (3) Residential mortgage $ 5,940   $ 5,120   5.28 %   4.93 %   $ 72 Home equity 863   592   4.00   3.33   99 Total $ 6,803   $ 5,712   5.12   4.73   $ 171                       December 31, 2013   2013 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 (1)  TDRs entered into during 2014 include modifications with principal forgiveness of $53 million related to residential mortgage and $1 million related to home equity. TDRs entered into during 2013 include residential mortgage modifications with principal forgiveness of $467 million. TDRs entered into during 2012 include modifications with principal forgiveness of $778 million related to residential mortgage and $9 million related to home equity. (2)  The post-modification interest rate reflects the interest rate applicable only to permanently completed modifications, which exclude loans that are in a trial modification period. (3)  Net charge-offs include amounts recorded on loans modified during the period that are no longer held by the Corporation at December 31, 2014, 2013 and 2012 due to sales and other dispositions. The table below presents the December 31, 2014, 2013 and 2012 carrying value for home loans that were modified in a TDR during 2014, 2013 and 2012, by type of modification.             Home Loans – Modification Programs       TDRs Entered into During 2014 (Dollars in millions) Residential Mortgage   Home Equity   Total Carrying Value Modifications under government programs           Contractual interest rate reduction $ 643   $ 56   $ 699 Principal and/or interest forbearance 16   18   34 Other modifications (1) 98   1   99 Total modifications under government programs 757   75   832 Modifications under proprietary programs           Contractual interest rate reduction 244   22   266 Capitalization of past due amounts 71   2   73 Principal and/or interest forbearance 66   75   141 Other modifications (1) 40   47   87 Total modifications under proprietary programs 421   146   567 Trial modifications 3,421   182   3,603 Loans discharged in Chapter 7 bankruptcy (2) 521   189   710 Total modifications $ 5,120   $ 592   $ 5,712               TDRs Entered into During 2013 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 (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 table below presents the carrying value of loans that entered into payment default during 2014, 2013 and 2012 that were modified in a TDR during the 12 months preceding payment default. Total carrying value includes loans with a carrying value of $2.0 billion, $2.4 billion and $667 million that entered into payment default during 2014, 2013 and 2012 but were no longer held by the Corporation as of December 31, 2014, 2013 and 2012 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 defaults 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       2014 (Dollars in millions)  Residential Mortgage   Home Equity   Total Carrying Value (1) Modifications under government programs $ 696   $ 4   $ 700 Modifications under proprietary programs 714   12   726 Loans discharged in Chapter 7 bankruptcy (2) 481   70   551 Trial modifications 2,231   56   2,287 Total modifications $ 4,122   $ 142   $ 4,264               2013 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 (1)  Total carrying value includes loans with a carrying value of $2.0 billion, $2.4 billion and $667 million that entered into payment default during 2014, 2013 and 2012 but were no longer held by the Corporation as of December 31, 2014, 2013 and 2012 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, local and international 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, the accounts of non-U.S. credit card customers who do not qualify for a fixed payment plan may have their interest rates reduced, as required by certain local jurisdictions. These modifications, which are also TDRs, tend to experience higher payment default rates given that the borrowers may lack the ability to repay even with the interest rate reduction. 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 the unpaid principal balance, carrying value and related allowance at December 31, 2014 and 2013, and the average carrying value and interest income recognized for 2014, 2013 and 2012 on the Corporation’s renegotiated TDR portfolio in the Credit Card and Other Consumer portfolio segment.                         Impaired Loans – Credit Card and Other Consumer – Renegotiated TDRs                   December 31, 2014   December 31, 2013 (Dollars in millions) Unpaid Principal Balance   Carrying Value (1)   Related Allowance   Unpaid Principal Balance   Carrying Value (1)   Related Allowance With no recorded allowance                       Direct/Indirect consumer $ 59   $ 25   $ —   $ 75   $ 32   $ — Other consumer —   —   —   34   34   — With an allowance recorded                       U.S. credit card $ 804   $ 856   $ 207   $ 1,384   $ 1,465   $ 337 Non-U.S. credit card 132   168   108   200   240   149 Direct/Indirect consumer 76   92   24   242   282   84 Other consumer —   —   —   27   26   9 Total                       U.S. credit card $ 804   $ 856   $ 207   $ 1,384   $ 1,465   $ 337 Non-U.S. credit card 132   168   108   200   240   149 Direct/Indirect consumer 135   117   24   317   314   84 Other consumer —   —   —   61   60   9                           2014   2013   2012   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                       Direct/Indirect consumer $ 27   $ —   $ 42   $ —   $ 58   $ — Other consumer 33   2   34   2   35   2 With an allowance recorded                       U.S. credit card $ 1,148   $ 71   $ 2,144   $ 134   $ 4,085   $ 253 Non-U.S. credit card 210   6   266   7   464   10 Direct/Indirect consumer 180   9   456   24   929   50 Other consumer 23   1   28   2   29   2 Total                       U.S. credit card $ 1,148   $ 71   $ 2,144   $ 134   $ 4,085   $ 253 Non-U.S. credit card 210   6   266   7   464   10 Direct/Indirect consumer 207   9   498   24   987   50 Other consumer 56   3   62   4   64   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, 2014 and 2013.                                         Credit Card and Other Consumer – Renegotiated TDRs by Program Type                       December 31   Internal Programs   External Programs   Other (1)   Total   Percent of Balances Current or Less Than 30 Days Past Due (Dollars in millions) 2014   2013   2014   2013   2014   2013   2014   2013   2014   2013 U.S. credit card $ 450   $ 842   $ 397   $ 607   $ 9   $ 16   $ 856   $ 1,465   84.99 %   82.77 % Non-U.S. credit card 41   71   16   26   111   143   168   240   47.56   49.01 Direct/Indirect consumer 50   170   34   106   33   38   117   314   85.21   84.29 Other consumer —   60   —   —   —   —   —   60   —   71.08 Total renegotiated TDRs $ 541   $ 1,143   $ 447   $ 739   $ 153   $ 197   $ 1,141   $ 2,079   79.51   78.77 (1)  Other TDRs for non-U.S. credit card include modifications of accounts that are ineligible for a fixed payment plan. The table below provides information on the Corporation’s renegotiated TDR portfolio including the December 31, 2014, 2013 and 2012 unpaid principal balance, carrying value and average pre- and post-modification interest rates of loans that were modified in TDRs during 2014, 2013 and 2012, and net charge-offs recorded during the period in which the modification occurred.                     Credit Card and Other Consumer – Renegotiated TDRs Entered into During 2014, 2013 and 2012       December 31, 2014   2014 (Dollars in millions) Unpaid Principal Balance   Carrying Value (1)   Pre-Modification Interest Rate   Post-Modification Interest Rate   Net Charge-offs U.S. credit card $ 276   $ 301   16.64 %   5.15 %   $ 37 Non-U.S. credit card 91   106   24.90   0.68   91 Direct/Indirect consumer 27   19   8.66   4.90   14 Total $ 394   $ 426   18.32   4.03   $ 142                       December 31, 2013   2013 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 (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 2014, 2013 and 2012.                 Credit Card and Other Consumer – Renegotiated TDRs Entered into During the Period by Program Type       2014 (Dollars in millions) Internal Programs   External Programs   Other (1)   Total U.S. credit card $ 196   $ 105   $ —   $ 301 Non-U.S. credit card 6   6   94   106 Direct/Indirect consumer 4   2   13   19 Total renegotiated TDRs $ 206   $ 113   $ 107   $ 426                   2013 U.S. credit card $ 192   $ 137   $ —   $ 329 Non-U.S. credit card 16   9   122   147 Direct/Indirect consumer 15   8   15   38 Other consumer 8   —   —   8 Total renegotiated TDRs $ 231   $ 154   $ 137   $ 522                   2012 U.S. credit card $ 248   $ 152   $ —   $ 400 Non-U.S. credit card 38   14   154   206 Direct/Indirect consumer 36   19   58   113 Other consumer 9   —   —   9 Total renegotiated TDRs $ 331   $ 185   $ 212   $ 728 (1)  Other TDRs for non-U.S. credit card include modifications of accounts that are ineligible for a fixed payment plan. 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 14 percent of new U.S. credit card TDRs, 81 percent of new non-U.S. credit card TDRs and 12 percent of new direct/indirect consumer TDRs may be in payment default within 12 months after modification. Loans that entered into payment default during 2014, 2013 and 2012 that had been modified in a TDR during the preceding 12 months were $56 million, $61 million and $203 million for U.S. credit card, $200 million, $236 million and $298 million for non-U.S. credit card, and $5 million, $12 million and $35 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, 2014 and 2013, remaining commitments to lend additional funds to debtors whose terms have been modified in a commercial loan TDR were immaterial. Commercial foreclosed properties totaled $67 million and $90 million at December 31, 2014 and 2013. The table below provides the unpaid principal balance, carrying value and related allowance at December 31, 2014 and 2013, and the average carrying value and interest income recognized for 2014, 2013 and 2012 for impaired loans in the Corporation’s Commercial loan portfolio segment. 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, 2014   December 31, 2013 (Dollars in millions) Unpaid Principal Balance   Carrying Value   Related Allowance   Unpaid Principal Balance   Carrying Value   Related Allowance With no recorded allowance                       U.S. commercial $ 668   $ 650   $ —   $ 609   $ 577   $ — Commercial real estate 60   48   —   254   228   — Non-U.S. commercial —   —   —   10   10   — With an allowance recorded                       U.S. commercial $ 1,139   $ 839   $ 75   $ 1,581   $ 1,262   $ 164 Commercial real estate 678   495   48   1,066   731   61 Non-U.S. commercial 47   44   1   254   64   16 U.S. small business commercial (1) 133   122   35   186   176   36 Total                       U.S. commercial $ 1,807   $ 1,489   $ 75   $ 2,190   $ 1,839   $ 164 Commercial real estate 738   543   48   1,320   959   61 Non-U.S. commercial 47   44   1   264   74   16 U.S. small business commercial (1) 133   122   35   186   176   36                           2014   2013   2012   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 $ 546   $ 12   $ 442   $ 6   $ 588   $ 9 Commercial real estate 166   3   269   3   1,119   3 Non-U.S. commercial 15   —   28   —   104   — With an allowance recorded                       U.S. commercial $ 1,198   $ 51   $ 1,553   $ 47   $ 2,104   $ 55 Commercial real estate 632   16   1,148   28   2,126   29 Non-U.S. commercial 52   3   109   5   77   4 U.S. small business commercial (1) 151   3   236   6   409   13 Total                       U.S. commercial $ 1,744   $ 63   $ 1,995   $ 53   $ 2,692   $ 64 Commercial real estate 798   19   1,417   31   3,245   32 Non-U.S. commercial 67   3   137   5   181   4 U.S. small business commercial (1) 151   3   236   6   409   13 (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, 2014, 2013 and 2012 unpaid principal balance and carrying value of commercial loans that were modified as TDRs during 2014, 2013 and 2012, and net charge-offs recorded during the period in which the modification occurred. The table below includes 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.             Commercial – TDRs Entered into During 2014, 2013 and 2012       December 31, 2014   2014 (Dollars in millions) Unpaid Principal Balance   Carrying Value   Net Charge-offs U.S. commercial $ 818   $ 785   $ 49 Commercial real estate 346   346   8 Non-U.S. commercial 44   43   — U.S. small business commercial (1) 3   3   — Total $ 1,211   $ 1,177   $ 57               December 31, 2013   2013 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 (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 and lease losses. TDRs that were in payment default had a carrying value of $103 million, $55 million and $130 million for U.S. commercial and $211 million, $128 million and $455 million for commercial real estate at December 31, 2014, 2013 and 2012, 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 presents PCI loans acquired in connection with the 2013 settlement with FNMA.     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 settlement with FNMA. For more information on the settlement with FNMA, 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, prepayment 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 2014 and 2013 were due to lower expected loss rates and a decrease in forecasted prepayment speeds. 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, 2013 $ 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 Accretion (1,061 ) Disposals/transfers (506 ) Reclassifications from nonaccretable difference 481 Accretable yield, December 31, 2014 $ 5,608 During 2014, the Corporation sold PCI loans with a carrying value of $1.9 billion, which excludes the related allowance of $317 million. 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 $12.8 billion and $11.4 billion at December 31, 2014 and 2013. Cash and non-cash proceeds from sales and paydowns of loans originally classified as LHFS were $40.1 billion, $81.0 billion and $58.0 billion for 2014, 2013 and 2012, respectively. Cash used for originations and purchases of LHFS totaled $40.1 billion, $65.7 billion and $59.5 billion for 2014, 2013 and 2012, respectively.