| Outstanding Claims By Category And Product |
The table below presents unresolved repurchase claims at September 30, 2015 and December 31, 2014. The unresolved repurchase claims include only claims where the Corporation believes that the counterparty has the contractual right to submit claims. For additional information, see Private-label Securitizations and Whole-loan Sales Experience in this Note.
|
|
|
|
|
|
|
|
|
Unresolved Repurchase Claims by Counterparty and Product Type |
|
|
|
(Dollars in millions) |
September 30
2015 |
|
December 31 2014 (1)
|
By counterparty |
|
|
|
Private-label securitization trustees, whole-loan investors, including third-party securitization sponsors and other (2, 3)
|
$ |
19,277 |
|
|
$ |
24,489 |
|
Monolines (4)
|
1,631 |
|
|
1,546 |
|
GSEs |
36 |
|
|
59 |
|
Total gross claims |
20,944 |
|
|
26,094 |
|
Duplicate claims (5)
|
(2,623 |
) |
|
(3,248 |
) |
Total unresolved repurchase claims by counterparty, net of duplicate claims |
$ |
18,321 |
|
|
$ |
22,846 |
|
By product type |
|
|
|
Prime loans |
$ |
167 |
|
|
$ |
587 |
|
Alt-A |
1,229 |
|
|
2,397 |
|
Home equity |
2,077 |
|
|
2,485 |
|
Pay option |
4,988 |
|
|
6,294 |
|
Subprime |
12,470 |
|
|
14,121 |
|
Other |
13 |
|
|
210 |
|
Total |
20,944 |
|
|
26,094 |
|
Duplicate claims (5)
|
(2,623 |
) |
|
(3,248 |
) |
Total unresolved repurchase claims by product type, net of duplicate claims |
$ |
18,321 |
|
|
$ |
22,846 |
|
|
|
(1) |
The December 31, 2014 amounts have been updated to reflect additional claims submitted from a single monoline, currently pursuing litigation, served in the fourth quarter of 2014, and addressed by the Corporation in 2015 pursuant to an existing litigation schedule. For more information on bond insurance litigation, see Note 12 – Commitments and Contingencies to the Consolidated Financial Statements of the Corporation's 2014 Annual Report on Form 10-K.
|
|
|
(2) |
Includes $12.0 billion and $14.1 billion of claims based on individual file reviews and $7.3 billion and $10.4 billion of claims submitted without individual file reviews at September 30, 2015 and December 31, 2014.
|
|
|
(3) |
The total notional amount of unresolved repurchase claims does not include repurchase claims related to the trusts covered by the BNY Mellon Settlement. |
|
|
(4) |
At September 30, 2015, substantially all of the unresolved monoline claims are currently the subject of litigation with a single monoline insurer and predominately pertain to second-lien loans.
|
|
|
(5) |
Represents more than one claim outstanding related to a particular loan, typically as the result of bulk claims submitted without individual file reviews. The September 30, 2015 and December 31, 2014 amounts include approximately $2.5 billion and $2.9 billion of duplicate claims related to private-label investors submitted without individual loan file reviews.
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|
| Rollforward Of Liability For Representations And Warranties |
The table below presents a rollforward of the liability for representations and warranties and corporate guarantees.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Representations and Warranties and Corporate Guarantees |
|
|
|
|
|
|
|
|
Three Months Ended September 30 |
|
Nine Months Ended September 30 |
(Dollars in millions) |
2015 |
|
2014 |
|
2015 |
|
2014 |
Liability for representations and warranties and corporate guarantees, beginning of period |
$ |
11,556 |
|
|
$ |
12,084 |
|
|
$ |
12,081 |
|
|
$ |
13,282 |
|
Additions for new sales |
2 |
|
|
2 |
|
|
5 |
|
|
7 |
|
Net reductions |
(174 |
) |
|
(305 |
) |
|
(581 |
) |
|
(1,774 |
) |
Provision (benefit) |
75 |
|
|
167 |
|
|
(46 |
) |
|
433 |
|
Liability for representations and warranties and corporate guarantees, September 30 |
$ |
11,459 |
|
|
$ |
11,948 |
|
|
$ |
11,459 |
|
|
$ |
11,948 |
|
|
| Loan Repurchases And Indemnification Payments |
The Loan Repurchases and Indemnification Payments table presents first-lien and home equity loan repurchases and indemnification payments made by the Corporation to reimburse the investor or securitization trust for losses they incurred, and to resolve repurchase claims. Cash paid for loan repurchases includes the unpaid principal balance of the loan plus past due interest. The amount of loss for loan repurchases is reduced by the fair value of the underlying loan collateral. The repurchase of loans and indemnification payments related to first-lien and home equity repurchase claims generally resulted from material breaches of representations and warranties related to the loans' material compliance with the applicable underwriting standards, including borrower misrepresentation, credit exceptions without sufficient compensating factors and non-compliance with underwriting procedures. The actual representations and warranties made in a sales transaction and the resulting repurchase and indemnification activity can vary by transaction or investor. Loan repurchases or indemnification payments related to first-lien residential mortgages primarily involved the GSEs while repurchases or indemnification payments related to home equity loans primarily involved the monoline insurers.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan Repurchases and Indemnification Payments (excluding cash payments for settlements) |
|
Three Months Ended September 30 |
|
2015 |
|
2014 |
(Dollars in millions) |
Unpaid
Principal
Balance
|
|
Cash Paid
for
Repurchases
|
|
Loss |
|
Unpaid
Principal
Balance
|
|
Cash Paid
for
Repurchases
|
|
Loss |
First-lien |
|
|
|
|
|
|
|
|
|
|
|
Repurchases |
$ |
14 |
|
|
$ |
17 |
|
|
$ |
5 |
|
|
$ |
56 |
|
|
$ |
65 |
|
|
$ |
22 |
|
Indemnification payments |
71 |
|
|
19 |
|
|
19 |
|
|
194 |
|
|
44 |
|
|
44 |
|
Total first-lien |
85 |
|
|
36 |
|
|
24 |
|
|
250 |
|
|
109 |
|
|
66 |
|
Home equity, indemnification payments |
7 |
|
|
6 |
|
|
6 |
|
|
3 |
|
|
3 |
|
|
3 |
|
Total first-lien and home equity |
$ |
92 |
|
|
$ |
42 |
|
|
$ |
30 |
|
|
$ |
253 |
|
|
$ |
112 |
|
|
$ |
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30 |
|
2015 |
|
2014 |
First-lien |
|
|
|
|
|
|
|
|
|
|
|
Repurchases |
$ |
87 |
|
|
$ |
97 |
|
|
$ |
27 |
|
|
$ |
160 |
|
|
$ |
179 |
|
|
$ |
54 |
|
Indemnification payments |
430 |
|
|
70 |
|
|
69 |
|
|
437 |
|
|
152 |
|
|
152 |
|
Total first-lien |
517 |
|
|
167 |
|
|
96 |
|
|
597 |
|
|
331 |
|
|
206 |
|
Home equity, indemnification payments |
13 |
|
|
12 |
|
|
12 |
|
|
17 |
|
|
17 |
|
|
17 |
|
Total first-lien and home equity |
$ |
530 |
|
|
$ |
179 |
|
|
$ |
108 |
|
|
$ |
614 |
|
|
$ |
348 |
|
|
$ |
223 |
|
|