2.2.0.7 false Mortgage Loan Sales 0206 - Disclosure - Mortgage Loan Sales true false false false 1 USD false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 Mortgage Loan Sales [Abstract] 0 us-gaap_DisclosureOfTransferOfSecuritizedFinancialAssetsAccountedForAsSaleAbstract us-gaap true na duration No definition available. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string No definition available. false 3 Mortgage Loan Sales 1 phh_MortgageLoanSalesTextBlock phh false na duration Disclosure of Transfer of Securitizations or Asset-backed Financing Financial Assets Accounted for as Sale. Contains of... false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>6. Mortgage Loan Sales</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Company sells its residential mortgage loans through one of the following methods: (i) sales to Fannie Mae and Freddie Mac and loan sales to other investors guaranteed by the Government National Mortgage Association (collectively, Government-Sponsored entities or “GSEs”), or (ii) sales to private investors, or sponsored securitizations through the Company’s wholly owned subsidiary, PHH Mortgage Capital, LLC (“PHHMC”), which maintains securities issuing capacity through a public registration statement. During the six months ended June 30, 2010, 97% of the Company’s mortgage loan sales were to the GSEs and the remaining 3% were sold to private investors. The Company did not execute any sales or securitizations through PHHMC during the six months ended June 30, 2010. During the six months ended June 30, 2010, the Company retained MSRs on approximately 98% of mortgage loans sold. The Company did not retain any interests from sales or securitizations other than MSRs during the six months ended June 30, 2010. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Key economic assumptions used in measuring the fair value of the Company’s MSRs at June 30, 2010 and the effect on fair value from adverse changes in those assumptions were as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="88%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>MSRs</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>(In millions)</b></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Fair value of retained interests </div></td> <td> </td> <td align="right">$</td> <td align="right">1,236</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted-average life (in years) </div></td> <td> </td> <td> </td> <td align="right">4.7</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted-average servicing fee (in bps) </div></td> <td> </td> <td> </td> <td align="right">30</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted-average prepayment speed (annual rate) </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">15</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Impact on fair value of 10% adverse change </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(79</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Impact on fair value of 20% adverse change </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(151</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Option adjusted spread (in bps) </div></td> <td> </td> <td> </td> <td align="right">719</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Impact on fair value of 10% adverse change </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(46</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Impact on fair value of 20% adverse change </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(90</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Volatility (annual rate) </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">29</td> <td nowrap="nowrap">%</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Impact on fair value of 10% adverse change </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(12</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Impact on fair value of 20% adverse change </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(24</td> <td nowrap="nowrap">)</td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     These sensitivities are hypothetical and presented for illustrative purposes only. Changes in fair value based on a 10% variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption is calculated without changing any other assumption; in reality, changes in one assumption may result in changes in another, which may magnify or counteract the sensitivities. Further, this analysis does not assume any impact resulting from management’s intervention to mitigate these variations. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table sets forth information regarding cash flows relating to the Company’s loan sales in which it has continuing involvement. </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Six Months Ended</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>June 30,</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2009</b></td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>(In millions)</b></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Proceeds from new loan sales or securitizations </div></td> <td> </td> <td align="right">$</td> <td align="right">12,599</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">14,139</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Servicing fees received <sup style="font-size: 85%; vertical-align: text-top">(1)</sup> </div></td> <td> </td> <td> </td> <td align="right">196</td> <td> </td> <td> </td> <td> </td> <td align="right">212</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Other cash flows received on retained interests <sup style="font-size: 85%; vertical-align: text-top">(2)</sup> </div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Purchases of delinquent or foreclosed loans </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(50</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(52</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Servicing advances </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(846</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(483</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Repayment of servicing advances </div></td> <td> </td> <td> </td> <td align="right">829</td> <td> </td> <td> </td> <td> </td> <td align="right">489</td> <td> </td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(1)</sup></td> <td> </td> <td>Excludes late fees and other ancillary servicing revenue.</td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left"><sup style="font-size: 85%; vertical-align: text-top">(2)</sup></td> <td> </td> <td>Represents cash flows received on retained interests other than servicing fees.</td> </tr> </table> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During the three and six months ended June 30, 2010, the Company recognized pre-tax gains of $84 million and $198 million, respectively, related to the sale or securitization of residential mortgage loans which are recorded in Gain on mortgage loans, net in the Condensed Consolidated Statement of Operations. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     During the three and six months ended June 30, 2009, the Company recognized pre-tax gains of $235 million and $353 million, respectively, related to the sale or securitization of residential mortgage loans which are recorded in Gain on mortgage loans, net in the Condensed Consolidated Statements of Operations. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="center" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left"> </div> </div>  <!-- Begin Block Tagged Note false false false us-types:textBlockItemType textblock Disclosure of Transfer of Securitizations or Asset-backed Financing Financial Assets Accounted for as Sale. Contains of quantitative and qualitative disclosure including the characteristics of transfers in securitization or asset-backed financing arrangements recognized as sales, a description of the transferor's continued involvement with the transferred assets (including servicing, recourse, and restriction on interests if any) that continue to be held by the transferor, sensitivity analysis and cash flow information. No authoritative reference available. false 1 2 false UnKnown UnKnown UnKnown false true