Derivatives

6 Months Ended

Jun. 30, 2011

Derivatives [Abstract]

Derivatives

5.  Derivatives

The Company did not have any derivative instruments designated as hedging instruments as of and during the six months ended June 30, 2011 or as of and during the year ended December 31, 2010. Derivative instruments are recorded in Other assets and Other liabilities in the Condensed Consolidated Balance Sheets, except for certain instruments related to the convertible note transactions which are recorded in equity. 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 interest rate lock commitments

• Interest rate contracts—Related to interest rate risk for variable-rate debt arrangements and fixed-rate leases

• Convertible note-related agreements—Related to the issuance of the 2014 Convertible notes

• Foreign exchange contracts—Related to exposure to currency fluctuations that would impact our investment in, or borrowings related to, our Canadian operations

The following table presents the balances of outstanding derivative amounts on a gross basis prior to the application of counterparty and collateral netting:

	June 30, 2011								December 31, 2010
	Asset			Liability					Asset			Liability
	Derivatives			Derivatives			Notional		Derivatives			Derivatives			Notional
	(In millions)
Interest rate lock commitments	$	52		$	4		$	5,076	$	42		$	46		$	7,328
Forward delivery commitments: (1)
Not subject to master netting arrangements		13			18			4,061		61			14			4,703
Subject to master netting arrangements(2)		30			34			7,716		248			68			16,438
Interest rate contracts		2			—			552		4			—			653
Option contracts		3			—			1,025		—			—			—
Convertible note-related agreements (3)		31			31			—		54			54			—
Foreign exchange contracts		—			1			104		—			—			30
Gross derivative assets and liabilities		131			88					409			182
Netting adjustments:
Offsetting receivables / payables		(32	)		(32	)				(241	)		(241	)
Cash collateral paid / received		9			(1	)				—			190
Net fair value of derivative instruments	$	108		$	55				$	168		$	131

⁽¹⁾ The net notional amount of Forward delivery commitments was $5.7 billion and $10.3 billion as of June 30, 2011 and December 31, 2010, respectively.

⁽²⁾ Represents derivative instruments that are executed with the same counterparties and subject to master netting arrangements. Forward delivery commitments subject to netting shown above were presented in the Balance sheets as follows:

	June 30, 2011				December 31, 2010
	Asset		Liability		Asset		Liability
	Derivatives		Derivatives		Derivatives		Derivatives
	(In millions)
Other Assets	$	15	$	17	$	10	$	3
Other Liabilities		15		17		238		65
Total	$	30	$	34	$	248	$	68

⁽³⁾ The notional amount of derivative instruments related to the issuance of the 2014 Convertible notes is 9.6881 million shares of the Company’s Common stock as of June 30, 2011 and December 31, 2010.

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
	(In millions)
Gain on mortgage loans, net:
IRLCs	$	249		$	379		$	433		$	581
Option contracts		(4	)		(12	)		(7	)		(12	)
Forward delivery commitments		(100	)		(189	)		(90	)		(246	)
Fleet interest expense:
Interest rate contracts		(1	)		(3	)		(1	)		(6	)
Foreign exchange contracts		(3	)		6			(5	)		5
Total	$	141		$	181		$	330		$	322