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Receivables Held for Sale (Tables)
 3 Months Ended
Mar. 31, 2016
Receivables [Abstract]  
Summary of Real Estate Secured Receivables Held for Sale
Real estate secured receivables held for sale which are carried at the lower of amortized cost or fair value are comprised of the following:
 
March 31, 2016
 
December 31, 2015
 
(in millions)
Real estate secured receivables held for sale:
 
 
 
First lien
$
8,026

 
$
8,110

Second lien
159

 
155

Total real estate secured receivables held for sale
$
8,185

 
$
8,265
Summary of Activity in Receivables Held for Sale
The following table summarizes the activity in receivables held for sale during the three months ended March 31, 2016 and 2015:
 
Receivables Held for Sale
 
(in millions)
Three Months Ended March 31, 2016:
 
Real estate secured receivables held for sale at beginning of period
$
8,265

Transfer of real estate secured receivables into held for sale at the lower of amortized cost or fair value(1)(2)
230

Lower of amortized cost or fair value adjustment on real estate secured receivables held for sale
(51
)
Carrying value of real estate secured receivables held for sale transferred to REO
(14
)
Carrying value of real estate secured receivables held for sale settled through short sale
(8
)
Change in real estate secured receivable balance, including collections
(237
)
Real estate secured receivables held for sale at end of period(3)
$
8,185

 
 
Three Months Ended March 31, 2015:
 
Real estate secured receivables held for sale at beginning of period
$
860

Transfer of real estate secured receivables into held for sale at the lower of amortized cost or fair value(1)(2)
296

Lower of amortized cost or fair value adjustment on real estate secured receivables held for sale
(17
)
Carrying value of real estate secured receivables held for sale transferred to REO
(24
)
Carrying value of real estate secured receivables held for sale settled through short sale
(11
)
Change in real estate secured receivable balance, including collections
(7
)
Real estate secured receivables held for sale at end of period(3)
$
1,097

 
(1) 
The initial lower of amortized cost or fair value adjustment on receivables transferred into held for sale during the three months ended March 31, 2016 totaled $17 million. During the three months ended March 31, 2015, there was no initial lower of amortized cost or fair value adjustment on receivables transferred to held for sale.
(2) 
Amount includes any accrued interest associated with the receivable.
(3) 
Real estate secured receivables held for sale in the table above are presented net of the valuation allowance.
Allowance for Credit Losses on Financing Receivables
The following table provides a rollforward of our valuation allowance for the three months ended March 31, 2016 and 2015. See Note 13, "Fair Value Measurements," for a discussion of the factors impacting the fair value of these receivables.
Three Months Ended March 31,
2016
 
2015
 
(in millions)
Balance at beginning of period
$
13

 
$
—

Initial valuation allowance for real estate secured receivables transferred to held for sale during the period
4

 
—

Increase in valuation allowance resulting from changes in fair value
68

 
—

Change in valuation allowance for collections, charged-off, transferred to REO or short sale
1

 
—

Balance at end of period
$
86

 
$
—
Summary of Components of Cumulative Lower of Amortized Cost or Fair Value Adjustment
The following table summarizes the components of the lower of amortized cost or fair value adjustment during the three months ended March 31, 2016 and 2015:
 
Lower of Amortized Cost or Fair Value Adjustments Associated With
 
 
 
Fair
Value
 
Settlements (Including
Short Sales)
 
Total
 
(in millions)
(Income)/Expense:
 
 
 
 
 
Three Months Ended March 31, 2016:
 
 
 
 
 
Lower of amortized cost or fair value adjustments recorded as a component of:
 
 
 
 
 
Provision for credit losses(1)
$
13

 
$
—

 
$
13

Other revenues:
 
 
 
 
 
Initial lower of amortized cost or fair value adjustment(2)
4

 
—

 
4

Subsequent to initial transfer to held for sale
68

 
(17
)
 
51

Lower of amortized cost or fair value adjustment recorded through other revenues
72

 
(17
)
 
55

Lower of amortized cost or fair value adjustment
$
85

 
$
(17
)
 
$
68

 
 
 
 
 
 
Three Months Ended March 31, 2015:
 
 
 
 
 
Lower of amortized cost or fair value adjustments recorded as a component of other revenues:
 
 
 
 
 
Subsequent to initial transfer to held for sale
$
—

 
$
17

 
$
17

Lower of amortized cost or fair value adjustment recorded through other revenues(3)
$
—

 
$
17

 
$
17

 

(1) 
Represents the portion of the initial lower of amortized cost or fair value adjustment attributable to credit factors which was recorded as provision for credit losses in the consolidated statement of income (loss) as there was no objective, verifiable evidence to indicate non-credit factors were associated with the decline in fair value.
(2) 
Represents the portion of the initial lower of amortized cost or fair value adjustment attributable to non-credit factors which was recorded as a component of total other revenues in the consolidated statement income (loss) as it reflects the impact on value caused by current marketplace conditions including changes in interest rates.
(3) 
During the three months ended March 31, 2015, no lower of amortized cost or fair value adjustment was recorded as a provision for credit losses.