Loans Receivable, Net (Tables)

3 Months Ended

Mar. 31, 2016

Loans and Leases Receivable Disclosure [Abstract]

Total Loans Receivable, Net [Table Text Block]

Loans receivable, net at March 31, 2016 and December 31, 2015 are summarized as follows (dollars in millions):



	March 31, 2016			December 31, 2015
One- to four-family	$	2,370		$	2,488
Home equity	1,974			2,114
Consumer and other	317			341
Total loans receivable	4,661			4,943
Unamortized premiums, net	21			23
Allowance for loan losses	(322		)	(353		)
Total loans receivable, net	$	4,360		$	4,613

Loans Receivable, Allowance for Loan Losses

The following table presents the total recorded investment in loans receivable and allowance for loan losses by loans that have been collectively evaluated for impairment and those that have been individually evaluated for impairment by loan class at March 31, 2016 and December 31, 2015 (dollars in millions):



	Recorded Investment				Allowance for Loan Losses
	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015
Collectively evaluated for impairment:
One- to four-family	$	2,109	$	2,219	$	41	$	31
Home equity	1,767		1,915		217		255
Consumer and other	320		344		6		6
Total collectively evaluated for impairment	4,196		4,478		264		292
Individually evaluated for impairment:
One- to four-family	277		286		8		9
Home equity	209		202		50		52
Total individually evaluated for impairment	486		488		58		61
Total	$	4,682	$	4,966	$	322	$	353

The following table provides a roll forward by loan portfolio of the allowance for loan losses for the three months ended March 31, 2016 and 2015 (dollars in millions):



	Three Months Ended March 31, 2016
	One- to Four-Family			Home Equity			Consumer and Other			Total
Allowance for loan losses, beginning of period	$	40		$	307		$	6		$	353
Provision (benefit) for loan losses	8			(42		)	—			(34		)
Charge-offs	(1		)	(5		)	(2		)	(8		)
Recoveries⁽¹⁾	2			7			2			11
Charge-offs, net	1			2			—			3
Allowance for loan losses, end of period	$	49		$	267		$	6		$	322



	Three Months Ended March 31, 2015
	One- to Four-Family			Home Equity			Consumer and Other			Total
Allowance for loan losses, beginning of period	$	27		$	367		$	10		$	404
Provision (benefit) for loan losses	5			(2		)	2			5
Charge-offs	(1		)	(10		)	(3		)	(14		)
Recoveries	—			5			2			7
Charge-offs, net	(1		)	(5		)	(1		)	(7		)
Allowance for loan losses, end of period	$	31		$	360		$	11		$	402


(1)	Includes a one-time payment from a third party mortgage originator of $3 million to satisfy in full all pending and future repurchase requests with them for the three months ended March 31, 2016.

Credit Quality Indicators for Loan Portfolio

The following tables show the distribution of the Company’s mortgage loan portfolios by credit quality indicator at March 31, 2016 and December 31, 2015 (dollars in millions):



	One- to Four-Family						Home Equity
Current LTV/CLTV ⁽¹⁾	March 31, 2016			December 31, 2015			March 31, 2016			December 31, 2015
<=80%	$	1,482		$	1,519		$	802		$	843
80%-100%	560			609			507			549
100%-120%	206			227			387			420
>120%	122			133			278			302
Total mortgage loans receivable	$	2,370		$	2,488		$	1,974		$	2,114
Average estimated current LTV/CLTV ⁽²⁾	76		%	77		%	90		%	90		%
Average LTV/CLTV at loan origination ⁽³⁾	71		%	71		%	81		%	81		%

(1)

Current CLTV calculations for home equity loans are based on the maximum available line for home equity lines of credit and outstanding principal balance for home equity installment loans. For home equity loans in the second lien position, the original balance of the first lien loan at origination date and updated valuations on the property underlying the loan are used to calculate CLTV. Current property values are updated on a quarterly basis using the most recent property value data available to the Company. For properties in which the Company did not have an updated valuation, home price indices were utilized to estimate the current property value.


(2)	The average estimated current LTV/CLTV ratio reflects the outstanding balance at the balance sheet date and the maximum available line for home equity lines of credit, divided by the estimated current value of the underlying property.


(3)	Average LTV/CLTV at loan origination calculations are based on LTV/CLTV at time of purchase for one- to four-family purchased loans and home equity installment loans and maximum available line for home equity lines of credit.



	One- to Four-Family				Home Equity
Current FICO ⁽¹⁾	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015
>=720	$	1,357	$	1,423	$	994	$	1,069
719 - 700	219		246		201		222
699 - 680	195		198		177		183
679 - 660	163		150		144		152
659 - 620	167		198		196		203
<620	269		273		262		285
Total mortgage loans receivable	$	2,370	$	2,488	$	1,974	$	2,114

(1)

FICO scores are updated on a quarterly basis; however, there were approximately $37 million and $39 million of one- to four-family loans at March 31, 2016 and December 31, 2015, respectively, and $3 million of home equity loans at both March 31, 2016 and December 31, 2015 for which the updated FICO scores were not available. For these loans, the current FICO distribution included the most recent FICO scores where available, otherwise the original FICO score was used.

Concentration of Credit Risk

The following table outlines when one- to four-family and home equity lines of credit convert to amortizing by percentage of the one- to four-family portfolio and home equity line of credit portfolios, respectively, at March 31, 2016:



Period of Conversion to Amortizing Loan	% of One- to Four-Family Portfolio	% of Home Equity Line of Credit Portfolio
Already amortizing	62%	53%
Through December 31, 2016	15%	32%
Year ending December 31, 2017	23%	14%
Year ending December 31, 2018 or later	—%	1%

Loans by Delinquency Category and Non-Performing Loans

The following table shows the comparative data for nonperforming loans at March 31, 2016 and December 31, 2015 (dollars in millions):



	March 31, 2016		December 31, 2015
One- to four-family	$	259	$	263
Home equity	165		154
Consumer and other	1		1
Total nonperforming loans receivable	$	425	$	418

The following table shows total loans receivable by delinquency category at March 31, 2016 and December 31, 2015 (dollars in millions):



	Current		30-89 Days Delinquent		90-179 Days Delinquent		180+ Days Delinquent		Total
March 31, 2016
One- to four-family	$	2,160	$	74	$	28	$	108	$	2,370
Home equity	1,839		52		28		55		1,974
Consumer and other	311		5		1		—		317
Total loans receivable	$	4,310	$	131	$	57	$	163	$	4,661
December 31, 2015
One- to four-family	$	2,279	$	72	$	26	$	111	$	2,488
Home equity	1,978		52		31		53		2,114
Consumer and other	334		6		1		—		341
Total loans receivable	$	4,591	$	130	$	58	$	164	$	4,943

Impaired Financing Receivables

The following table shows detailed information related to the Company’s TDRs at March 31, 2016 and December 31, 2015 (dollars in millions):



	March 31, 2016						December 31, 2015
	Recorded Investment in TDRs		Specific Valuation Allowance		Net Investment in TDRs		Recorded Investment in TDRs		Specific Valuation Allowance		Net Investment in TDRs
With a recorded allowance:
One- to four-family	$	69	$	8	$	61	$	72	$	9	$	63
Home equity	$	115	$	50	$	65	$	111	$	52	$	59
Without a recorded allowance:⁽¹⁾
One- to four-family	$	208	$	—	$	208	$	214	$	—	$	214
Home equity	$	94	$	—	$	94	$	91	$	—	$	91
Total:
One- to four-family	$	277	$	8	$	269	$	286	$	9	$	277
Home equity	$	209	$	50	$	159	$	202	$	52	$	150


(1)	Represents loans where the discounted cash flow analysis or collateral value is equal to or exceeds the recorded investment in the loan.

The following table shows the average recorded investment and interest income recognized both on a cash and accrual basis for the Company’s TDRs during the three months ended March 31, 2016 and 2015 (dollars in millions):



	Average Recorded Investment				Interest Income Recognized
	Three Months Ended March 31,				Three Months Ended March 31,
	2016		2015		2016		2015
One- to four-family	$	282	$	313	$	2	$	2
Home equity	205		218		4		5
Total	$	487	$	531	$	6	$	7

The following table shows a summary of the Company’s recorded investment in TDRs that were on accrual and nonaccrual status, further disaggregated by delinquency status, in addition to the recorded investment in TDRs at March 31, 2016 and December 31, 2015 (dollars in millions):



			Nonaccrual TDRs
	Accrual TDRs⁽¹⁾		Current⁽²⁾		30-89 Days Delinquent		90-179 Days Delinquent		180+ Days Delinquent		Total Recorded Investment in TDRs⁽³⁾⁽⁴⁾
March 31, 2016
One- to four-family	$	105	$	104	$	19	$	6	$	43	$	277
Home equity	114		53		12		7		23		209
Total	$	219	$	157	$	31	$	13	$	66	$	486
December 31, 2015
One- to four-family	$	106	$	106	$	19	$	8	$	47	$	286
Home equity	120		42		11		8		21		202
Total	$	226	$	148	$	30	$	16	$	68	$	488


(1)	Represents loans modified as TDRs that are current and have made six or more consecutive payments.


(2)	Represents loans modified as TDRs that are current but have not yet made six consecutive payments, bankruptcy loans and certain junior lien TDRs that have a delinquent senior lien.


(3)	The unpaid principal balance in one- to four-family TDRs was $275 million and $283 million at March 31, 2016 and December 31, 2015, respectively. For home equity loans, the recorded investment in TDRs represents the unpaid principal balance.


(4)	Total recorded investment in TDRs at March 31, 2016 consisted of $335 million of loans modified as TDRs and $151 million of loans that have been charged off due to bankruptcy notification. Total recorded investment in TDRs at December 31, 2015 consisted of $334 million of loans modified as TDRs and $154 million of loans that have been charged off due to bankruptcy notification.

Troubled Debt Restructurings - Modifications

The following table shows loans modified as TDRs and the specific valuation allowance by loan portfolio as well as the percentage of total expected losses at March 31, 2016 and December 31, 2015 (dollars in millions):



	Recorded Investment in Modifications before Charge-offs		Charge-offs			Recorded Investment in Modifications		Specific Valuation Allowance			Net Investment in Modifications		Specific Valuation Allowance as a % of Modifications		Total Expected Losses
March 31, 2016
One- to four-family	$	208	$	(45	)	$	163	$	(8	)	$	155	5	%	26	%
Home equity	288		(116		)	172		(50		)	122		29	%	58	%
Total	$	496	$	(161	)	$	335	$	(58	)	$	277	17	%	44	%
December 31, 2015
One- to four-family	$	216	$	(46	)	$	170	$	(9	)	$	161	5	%	25	%
Home equity	284		(120		)	164		(52		)	112		32	%	61	%
Total	$	500	$	(166	)	$	334	$	(61	)	$	273	18	%	45	%

The following tables provide the number of loans and post-modification balances immediately after being modified by major class during the three months ended March 31, 2016 and 2015 (dollars in millions):



	Three Months Ended March 31, 2016
		Interest Rate Reduction
	Number of Loans	Re-age/ Extension/ Interest Capitalization		Other with Interest Rate Reduction		Other⁽¹⁾		Total
One- to four-family	14	$	4	$	—	$	1	$	5
Home equity	193	2		1		12		15
Total	207	$	6	$	1	$	13	$	20



	Three Months Ended March 31, 2015
		Interest Rate Reduction
	Number of Loans	Re-age/ Extension/ Interest Capitalization		Other with Interest Rate Reduction		Other⁽¹⁾		Total
One- to four-family	6	$	1	$	—	$	—	$	1
Home equity	243	1		1		16		18
Total	249	$	2	$	1	$	16	$	19

(1)

Includes TDRs that resulted from a loan modification program being offered to a subset of borrowers with home equity lines of credit whose original loan terms provided the borrowers the option to accelerate their date of conversion to amortizing loans. As certain terms of the Company's offer represented economic concessions, such as longer amortization periods than were in the original loan agreements, to certain borrowers experiencing financial difficulty, this program resulted in $9 million and $14 million of TDRs during the first quarter of 2016 and 2015, respectively.

The following table shows the recorded investment in modifications that experienced a payment default within 12 months after the modification for the three months ended March 31, 2016 and 2015 (dollars in millions):



	Three Months Ended March 31,
	2016			2015
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
One- to four-family⁽¹⁾	5	$	2	2	$	1
Home equity⁽²⁾⁽³⁾	13	1		40	2
Total	18	$	3	42	$	3


(1)	For three months ended March 31, 2016 and 2015, less than $1 million and $0, respectively, of the recorded investment in one- to four-family loans that had a payment default in the trailing 12 months was classified as current.


(2)	For both the three months ended March 31, 2016 and 2015, less than $1 million of the recorded investment in home equity loans that had a payment default in the trailing 12 months was classified as current.


(3)	The majority of these home equity modifications during the three months ended March 31, 2015 experienced servicer transfers during this same period.

The following table shows loans modified as TDRs by delinquency category at March 31, 2016 and December 31, 2015 (dollars in millions):



	Modifications Current		Modifications 30-89 Days Delinquent		Modifications 90-179 Days Delinquent		Modifications 180+ Days Delinquent		Total Recorded Investment in Modifications⁽¹⁾
March 31, 2016
One- to four-family	$	137	$	9	$	4	$	13	$	163
Home equity	145		9		5		13		172
Total	$	282	$	18	$	9	$	26	$	335
December 31, 2015
One- to four-family	$	138	$	11	$	5	$	16	$	170
Home equity	139		8		6		11		164
Total	$	277	$	19	$	11	$	27	$	334


(1)	Includes loans modified as TDRs that also had received a bankruptcy notification of $43 million and $42 million at March 31, 2016 and December 31, 2015, respectively.