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Loan Servicing (Tables)
 9 Months Ended
Sep. 30, 2018
Transfers and Servicing [Abstract]  
Summary of Residential Mortgage Banking Activities
The following tables summarize residential mortgage banking activities:
(Dollars in millions)
 
Sep 30, 2018
 
Dec 31, 2017
UPB of residential mortgage and home equity loan servicing portfolio
 
$
119,460

 
$
118,424

UPB of residential mortgage loans serviced for others, primarily agency conforming fixed rate
 
88,323

 
89,124

Mortgage loans sold with recourse
 
436

 
490

Maximum recourse exposure from mortgage loans sold with recourse liability
 
231

 
251

Indemnification, recourse and repurchase reserves
 
30

 
37

 
 


 


As of / For the Nine Months Ended September 30,
(Dollars in millions)
 
2018
 
2017
UPB of residential mortgage loans sold from LHFS
 
$
8,436

 
$
9,478

Pre-tax gains recognized on mortgage loans sold and held for sale
 
98

 
114

Servicing fees recognized from mortgage loans serviced for others
 
191

 
197

Approximate weighted average servicing fee on the outstanding balance of residential mortgage loans serviced for others
 
0.28
%
 
0.28
%
Weighted average interest rate on mortgage loans serviced for others
 
4.03

 
4.00
Analysis of Activity in Residential MSRs
The following table presents a roll forward of the carrying value of residential MSRs recorded at fair value:
Nine Months Ended September 30,
(Dollars in millions)
 
2018
 
2017
Residential MSRs, carrying value, January 1
 
$
914

 
$
915

Additions
 
96

 
93

Change in fair value due to changes in valuation inputs or assumptions:
 
 
 
 
Prepayment speeds
 
47

 
(56
)
OAS
 
70

 
47

Servicing costs
 
—

 
9

Realization of expected net servicing cash flows, passage of time and other
 
(104
)
 
(104
)
Residential MSRs, carrying value, September 30
 
$
1,023

 
$
904

Gains (losses) on derivative financial instruments used to mitigate the income statement effect of changes in residential MSR fair value
 
$
(119
)
 
$
12
Residential MSRs Sensitivity
The sensitivity of the fair value of the residential MSRs to changes in key assumptions is presented in the following table:
 
 
September 30, 2018
 
December 31, 2017
 
 
Range
 
Weighted Average
 
Range
 
Weighted Average
(Dollars in millions)
 
Min
 
Max
 
 
Min
 
Max
 
Prepayment speed
 
8.5
%
 
9.5
%
 
8.8
%
 
7.1
%
 
10.1
%
 
9.1
%
Effect on fair value of a 10% increase
 
 
 
 
 
$
(33
)
 
 
 
 
 
$
(31
)
Effect on fair value of a 20% increase
 
 
 
 
 
(64
)
 
 
 
 
 
(60
)
OAS
 
6.5
%
 
7.0
%
 
6.6
%
 
8.4
%
 
8.9
%
 
8.5
%
Effect on fair value of a 10% increase
 
 
 
 
 
$
(25
)
 
 
 
 
 
$
(28
)
Effect on fair value of a 20% increase
 
 
 
 
 
(49
)
 
 
 
 
 
(54
)
Composition of loans serviced for others:
 
 
 
 
 
 
 
 
 
 
Fixed-rate residential mortgage loans
 
 
 
 
 
99.2
%
 
 
 
 
 
99.1
%
Adjustable-rate residential mortgage loans
 
 
 
 
 
0.8

 
 
 
 
 
0.9

Total
 
 

 
 

 
100.0
%
 
 
 
 
 
100.0
%
Weighted average life
 
 

 
 

 
6.6 years

 
 
 
 
 
6.4 years
Summary of Commercial Mortgage Banking Activities
The following table summarizes commercial mortgage banking activities for the periods presented:
(Dollars in millions)
Sep 30, 2018
 
Dec 31, 2017
UPB of CRE mortgages serviced for others
$
27,323

 
$
28,441

CRE mortgages serviced for others covered by recourse provisions
4,635

 
4,153

Maximum recourse exposure from CRE mortgages sold with recourse liability
1,295

 
1,218

Recorded reserves related to recourse exposure
6

 
5

CRE mortgages originated during the year-to-date period
4,880

 
6,753

Commercial MSRs at fair value
156

 
142