4. Derivatives

Derivative instruments and the risks they manage are as follows:


▪	Forward delivery commitments—Related to interest rate and price risk for mortgage loans held for sale and interest rate lock commitments


▪	Option contracts—Related to interest rate and price risk for mortgage loans held for sale and interest rate lock commitments


▪	MSR-related agreements—Related to interest rate risk for mortgage servicing rights

Derivative instruments are recorded in Other assets and Other liabilities in the Condensed Consolidated Balance Sheets. The Company does not have any derivative instruments designated as hedging instruments.

The following table summarizes the gross notional amount of derivatives:



	June 30, 2016		December 31, 2015
	(In millions)
Interest rate lock commitments	$	1,437	$	1,048
Forward delivery commitments	4,049		2,468
Option contracts	—		125
MSR-related agreements	4,215		3,945

The following tables present the balances of outstanding derivative instruments on a gross basis and the application of counterparty and collateral netting:



	June 30, 2016
	Gross Assets		Offsetting Payables			Cash Collateral Received			Net Amount
	(In millions)
ASSETS
Subject to master netting arrangements:
Forward delivery commitments	$	5	$	(5	)	$	—		$	—
MSR-related agreements	112		(104		)	(1		)	7
Derivative assets subject to netting	117		(109		)	(1		)	7
Not subject to master netting arrangements:
Interest rate lock commitments	39		—			—			39
Forward delivery commitments	3		—			—			3
Derivative assets not subject to netting	42		—			—			42
Total derivative assets	$	159	$	(109	)	$	(1	)	$	49



	Gross Liabilities		Offsetting Receivables			Cash Collateral Received (Paid)			Net Amount
LIABILITIES
Subject to master netting arrangements:
Forward delivery commitments	$	15	$	(7	)	$	(6	)	$	2
MSR-related agreements	—		(102		)	110			8
Derivative liabilities subject to netting	15		(109		)	104			10
Not subject to master netting arrangements:
Forward delivery commitments	3		—			—			3
Total derivative liabilities	$	18	$	(109	)	$	104		$	13



	December 31, 2015
	Gross Assets		Offsetting Payables			Cash Collateral Received			Net Amount
	(In millions)
ASSETS
Subject to master netting arrangements:
Forward delivery commitments	$	2	$	(2	)	$	—		$	—
MSR-related agreements	27		—			(23		)	4
Derivative assets subject to netting	29		(2		)	(23		)	4
Not subject to master netting arrangements:
Interest rate lock commitments	21		—			—			21
Forward delivery commitments	1		—			—			1
Derivative assets not subject to netting	22		—			—			22
Total derivative assets	$	51	$	(2	)	$	(23	)	$	26



	Gross Liabilities		Offsetting Receivables			Cash Collateral Received		Net Amount
LIABILITIES
Subject to master netting arrangements:
Forward delivery commitments	$	2	$	(2	)	$	2	$	2
Total derivative liabilities	$	2	$	(2	)	$	2	$	2

The following table summarizes the gains (losses) recorded in the Condensed Consolidated Statements of Operations for derivative instruments:



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(In millions)
Gain on loans held for sale, net:
Interest rate lock commitments	$	101		$	54		$	178		$	135
Forward delivery commitments	(14		)	28			(35		)	11
Option contracts	(1		)	(1		)	(1		)	(1		)
Net derivative gain (loss) related to mortgage servicing rights:
MSR-related agreements	58			(49		)	143			4