Loans Held-for-Investment (Tables)

12 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Summary of Loans Held-for-Investment and UPB of Loan Sales and Purchases in the Loans Held-for-Investment Portfolio

The following table presents our loans-held-for-investment:

	December 31, 2019		December 31, 2018
	(Dollars in millions)
Consumer loans
Residential first mortgage	$	3,154	$	2,999
Home Equity	1,024		731
Other	729		314
Total consumer loans	4,907		4,044
Commercial loans
Commercial real estate	2,828		2,152
Commercial and industrial	1,634		1,433
Warehouse lending	2,760		1,459
Total commercial loans	7,222		5,044
Total loans held-for-investment	$	12,129	$	9,088

The following table presents the UPB of our loan sales and purchases in the loans held-for-investment portfolio:

	For the Year Ended
	2019		2018		2017
	(Dollars in millions)
Loans Sold (1)
Performing loans	$	217	$	158	$	102
Nonperforming loans	—		—		25
Total performing and nonperforming loans sold	$	217	$	158	$	127
Net gain associated with loan sales (2)	$	2	$	2	$	2
Loans Purchased
Residential first mortgage loans	—		3		8
HELOC	249		—		250
Other consumer	51		34		—
Total loans purchased	$	300	$	37	$	258
Premium associated with loans purchased	$	11	$	—	$	9

(1) Upon a change in our intent, the loans were transferred to LHFS and subsequently sold.

(2)

Recorded in net gain on loan sales on Consolidated Statement of Operations.

Schedule of Changes in ALLL and Method of Evaluation by Class of Loan

The following table presents changes in ALLL, by class of loan:

	Residential First Mortgage (1)			Home Equity			Other Consumer			Commercial Real Estate			Commercial and Industrial			Warehouse Lending			Total
	(Dollars in millions)
Year Ended December 31, 2019
Beginning balance ALLL	$	38		$	15		$	3		$	48		$	18		$	6		$	128
Charge-offs (2)	(3		)	(2		)	(7		)	—			(31		)	—			(43		)
Recoveries	1			2			—			—			1			—			4
Provision (benefit)	(14		)	(1		)	10			(10		)	34			(1		)	18
Ending balance ALLL	$	22		$	14		$	6		$	38		$	22		$	5		$	107
Year Ended December 31, 2018
Beginning balance ALLL	$	47		$	22		$	1		$	45		$	19		$	6		$	140
Charge-offs (2)	(4		)	(2		)	(2		)	—			—			—			(8		)
Recoveries	2			1			1			—			—			—			4
Provision (benefit)	(7		)	(6		)	3			3			(1		)	—			(8		)
Ending balance ALLL	$	38		$	15		$	3		$	48		$	18		$	6		$	128
Year Ended December 31, 2017
Beginning balance ALLL	$	65		$	24		$	1		$	28		$	17		$	7		$	142
Charge-offs (2)	(8		)	(3		)	(2		)	(1		)	—			—			(14		)
Recoveries	1			2			1			1			1			—			6
Provision (benefit)	(11		)	(1		)	1			17			1			(1		)	6
Ending balance ALLL	$	47		$	22		$	1		$	45		$	19		$	6		$	140

(1) Includes allowance and charge-offs related to loans with government guarantees.

(2) Includes charge-offs of zero, zero and $1 million related to the transfer and subsequent sale of loans during the years ended December 31, 2019, 2018 and 2017, respectively. Also includes charge-offs related to loans with government guarantees of $2 million, $2 million, and $4 million during the years ended December 31, 2019, 2018 and 2017, respectively.

The following table sets forth the method of evaluation, by class of loan:

	Residential First Mortgage (1)		Home Equity		Other Consumer		Commercial Real Estate		Commercial and Industrial		Warehouse Lending		Total
	(Dollars in millions)
December 31, 2019
Loans held-for-investment (2)
Individually evaluated	$	32	$	20	$	1	$	—	$	—	$	—	$	53
Collectively evaluated	3,113		1,001		728		2,828		1,634		2,760		12,064
Total loans	$	3,145	$	1,021	$	729	$	2,828	$	1,634	$	2,760	$	12,117
Allowance for loan losses (2)
Individually evaluated	$	5	$	7	$	1	$	—	$	—	$	—	$	13
Collectively evaluated	17		7		5		38		22		5		94
Total allowance for loan losses	$	22	$	14	$	6	$	38	$	22	$	5	$	107
December 31, 2018
Loans held-for-investment (2)
Individually evaluated	$	32	$	23	$	—	$	—	$	—	$	—	$	55
Collectively evaluated	2,959		706		314		2,152		1,433		1,459		9,023
Total loans	$	2,991	$	729	$	314	$	2,152	$	1,433	$	1,459	$	9,078
Allowance for loan losses (2)
Individually evaluated	$	4	$	7	$	—	$	—	$	—	$	—	$	11
Collectively evaluated	34		8		3		48		18		6		117
Total allowance for loan losses	$	38	$	15	$	3	$	48	$	18	$	6	$	128

(1) Includes allowance related to loans with government guarantees.

(2) Excludes loans carried under the fair value option.

Schedule of Aging Analysis of Past Due and Current Loans

The following table sets forth the LHFI aging analysis of past due and current loans (for further information on our policy for past due and impaired loans, see Note 1 - Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies):

	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due (1)		Total Past Due		Current		Total LHFI
	(Dollars in millions)
December 31, 2019
Consumer loans
Residential first mortgage	$	5	$	4	$	21	$	30	$	3,124	$	3,154
Home equity	1		—		4		5		1,019		1,024
Other	3		1		1		5		724		729
Total consumer loans	9		5		26		40		4,867		4,907
Commercial loans
Commercial real estate	—		—		—		—		2,828		2,828
Commercial and industrial	—		—		—		—		1,634		1,634
Warehouse lending	—		—		—		—		2,760		2,760
Total commercial loans	—		—		—		—		7,222		7,222
Total loans (2)	$	9	$	5	$	26	$	40	$	12,089	$	12,129
December 31, 2018
Consumer loans
Residential first mortgage	$	4	$	2	$	19	$	25	$	2,974	$	2,999
Home equity	1		—		3		4		727		731
Other	—		—		—		—		314		314
Total consumer loans	5		2		22		29		4,015		4,044
Commercial loans
Commercial real estate	—		—		—		—		2,152		2,152
Commercial and industrial	—		—		—		—		1,433		1,433
Warehouse lending	—		—		—		—		1,459		1,459
Total commercial loans	—		—		—		—		5,044		5,044
Total loans (2)	$	5	$	2	$	22	$	29	$	9,059	$	9,088

(1) Includes less than 90 days past due performing loans which are placed on non-accrual. Interest revenue is not being recognized on these loans.

(2) Includes $4 million and $3 million of past due loans accounted for under the fair value option at December 31, 2019 and 2018, respectively.

Summary of TDRs by Type and Performing Status and Newly Modified TDRs

The following table provides a summary of TDRs by type and performing status:

	TDRs
	Performing		Nonperforming		Total
	(Dollars in millions)
December 31, 2019
Consumer loans
Residential first mortgage	$	20	$	8	$	28
Home equity	18		2		20
Total TDRs (1)(2)	$	38	$	10	$	48
December 31, 2018
Consumer loans
Residential first mortgage	$	22	$	8	$	30
Home Equity	22		2		24
Total TDRs (1)(2)	$	44	$	10	$	54

(1) The ALLL on TDR loans totaled $8 million and $10 million at December 31, 2019 and 2018, respectively.

(2) Includes $2 million and $3 million of TDR loans accounted for under the fair value option at December 31, 2019 and 2018, respectively.

The following table provides a summary of newly modified TDRs:

	New TDRs
	Number of Accounts	Pre-Modification Unpaid Principal Balance		Post-Modification Unpaid Principal Balance (1)		Increase (Decrease) in Allowance at Modification
	(Dollars in millions)
Year Ended December 31, 2019
Residential first mortgages	8	$	1	$	1	$	—
Home equity (2)(3)	6	—		—		—
Total TDR loans	14	$	1	$	1	$	—
Year Ended December 31, 2018
Residential first mortgages	14	$	3	$	3	$	—
Home equity (2)(3)	17	1		1		—
Total TDR loans	31	$	4	$	4	$	—
Year Ended December 31, 2017
Residential first mortgages	16	$	4	$	4	$	—
Home equity (2)(3)	82	6		5		(1		)
Total TDR loans	98	$	10	$	9	$	(1	)

(1) Post-modification balances include past due amounts that are capitalized at modification date.

(2) Home equity post-modification UPB reflects write downs.

(3)

Includes loans carried at fair value option.

Schedule of Impaired Loans

The following table presents individually evaluated impaired loans and the associated allowance:  

	December 31, 2019						December 31, 2018
	Recorded Investment		Net Unpaid Principal Balance		Related Allowance		Recorded Investment		Net Unpaid Principal Balance		Related Allowance
	(Dollars in millions)
With no related allowance recorded
Consumer loans
Residential first mortgage	$	16	$	20	$	—	$	13	$	16	$	—
Home equity	1		4		—		1		4		—
Other consumer	—		1		—		—		—		—
Total loans with no related allowance recorded	$	17	$	25	$	—	$	14	$	20	$	—
With an allowance recorded
Consumer loans
Residential first mortgage	$	16	$	16	$	3	$	19	$	20	$	4
Home equity	19		19		7		22		23		7
Other consumer	1		1		1		—		—		—
Total loans with an allowance recorded	$	36	$	36	$	11	$	41	$	43	$	11
Total impaired loans
Consumer loans
Residential first mortgage	$	32	$	36	$	3	$	32	$	36	$	4
Home equity	20		23		7		23		27		7
Other consumer	1		2		1		—		—		—
Total impaired loans	$	53	$	61	$	11	$	55	$	63	$	11

The following table presents average impaired loans and the interest income recognized:

	For the Years Ended December 31,
	2019				2018				2017
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(Dollars in millions)
Consumer loans
Residential first mortgage	$	36	$	—	$	33	$	1	$	38	$	1
Home equity	17		—		25		2		28		1
Other consumer	2		—		—		—		—		—
Commercial loans
Commercial and industrial	15		—		2		—		—		—
Total impaired loans	$	70	$	—	$	60	$	3	$	66	$	2

Schedule of Loan Credit Quality Indicators

The combination of the borrower and collateral risk ratings results in the final rating for the borrowing relationship.

	December 31, 2019
	Pass		Watch		Special Mention		Substandard		Total Loans
	(Dollars in millions)
Consumer Loans
Residential First Mortgage	$	3,107	$	27	$	—	$	20	$	3,154
Home equity	1,002		18		—		4		1,024
Other Consumer	727		1		—		1		729
Total Consumer Loans	$	4,836	$	46	$	—	$	25	$	4,907
Commercial Loans
Commercial Real Estate	$	2,794	$	24	$	5	$	5	$	2,828
Commercial and Industrial	1,533		72		24		5		1,634
Warehouse	2,556		189		15		—		2,760
Total Commercial Loans	$	6,883	$	285	$	44	$	10	$	7,222

	December 31, 2018
	Pass		Watch		Special Mention		Substandard		Total Loans
	(Dollars in millions)
Consumer Loans
Residential First Mortgage	$	2,952	$	28	$	—	$	19	$	2,999
Home equity	705		23		—		3		731
Other Consumer	314		—		—		—		314
Total Consumer Loans	$	3,971	$	51	$	—	$	22	$	4,044
Commercial Loans
Commercial Real Estate	$	2,132	$	14	$	5	$	1	$	2,152
Commercial and Industrial	1,351		53		29		—		1,433
Warehouse	1,324		120		15		—		1,459
Total Commercial Loans	$	4,807	$	187	$	49	$	1	$	5,044