The following table includes a summary of residential mortgage loans managed or securitized and related delinquencies and net charge-offs:

			March 31,		December 31,
			2012		2011

			(Dollars in millions)
	Mortgage loans managed or securitized (1)		$	26,166	$	26,559
	Less: Loans securitized and transferred to securities available for sale			4		4
		Loans held for sale		2,209		3,394
		Covered mortgage loans		1,212		1,264
		Mortgage loans sold with recourse		1,228		1,316
	Mortgage loans held for investment		$	21,513	$	20,581
	Mortgage loans on nonaccrual status		$	320	$	308
	Mortgage loans 90 days or more past due and still accruing interest (2)			72		104
	Mortgage loans net charge-offs (3)			41		264


(1)	Balances exclude loans serviced for others with no other continuing involvement.
(2)	Includes amounts related to residential mortgage loans held for sale and excludes amounts related to government guaranteed loans and covered mortgage loans. Refer to Loans and Leases Note for additional disclosures related to past due government guaranteed loans.
(3)	Net charge-offs for March 31, 2012 reflect three months.

The unpaid principal balances of BB&T's total residential mortgage servicing portfolio were $94.6 billion and $91.6 billion at March 31, 2012 and December 31, 2011, respectively. The unpaid principal balances of residential mortgage loans serviced for others consist primarily of agency conforming fixed-rate mortgage loans and totaled $70.3 billion and $67.1 billion at March 31, 2012 and December 31, 2011, respectively. Mortgage loans serviced for others are not included in loans and leases on the accompanying Consolidated Balance Sheets.

During the three months ended March 31, 2012 and 2011, BB&T sold residential mortgage loans from the held for sale portfolio with unpaid principal balances of $7.6 billion and $5.5 billion, respectively, and recognized pre-tax gains of $127 million and $35 million, respectively, including the impact of interest rate lock commitments. These gains are recorded in noninterest income as a component of mortgage banking income. BB&T retained the related mortgage servicing rights and receives servicing fees.

At March 31, 2012 and 2011, the approximate weighted average servicing fee was 0.33% and 0.35%, respectively, of the outstanding balance of the residential mortgage loans serviced for others. The weighted average coupon interest rate on the portfolio of mortgage loans serviced for others was 4.89% and 5.17% at March 31, 2012 and 2011, respectively. BB&T recognized servicing fees of $60 million and $58 million during the first three months of 2012 and 2011, respectively, as a component of mortgage banking income.

At March 31, 2012 and December 31, 2011, BB&T had $1.2 billion and $1.3 billion, respectively, of residential mortgage loans sold with recourse liability. In the event of nonperformance by the borrower, BB&T has maximum recourse exposure of approximately $502 million and $522 million as of March 31, 2012 and December 31, 2011, respectively. At both March 31, 2012 and December 31, 2011, BB&T has recorded $6 million of reserves related to these recourse exposures. Payments made to date have been immaterial.

BB&T also issues standard representations and warranties related to mortgage loan sales to government-sponsored entities. Although these agreements often do not specify limitations, BB&T does not believe that any payments related to these warranties would materially change the financial condition or results of operations of BB&T. BB&T has recorded $39 million and $29 million of reserves related to potential losses resulting from repurchases of loans sold at March 31, 2012 and December 31, 2011, respectively.

Residential mortgage servicing rights are recorded on the Consolidated Balance Sheets at fair value with changes in fair value recorded as a component of mortgage banking income in the Consolidated Statements of Income for each period. BB&T uses various derivative instruments to mitigate the income statement effect of changes in fair value due to changes in valuation inputs and assumptions of its residential mortgage servicing rights. The following is an analysis of the activity in BB&T's residential mortgage servicing rights:

				Residential Mortgage Servicing Rights
				Three Months Ended March 31,
					2012		2011

				(Dollars in millions)
	Carrying value, January 1,			$	563	$	830
		Additions			84		86
		Increase (decrease) in fair value:
			Due to changes in valuation inputs or assumptions		92		40
		Other changes (1)			(43)		(28)
	Carrying value, March 31,			$	696	$	928


(1)	Represents the realization of expected net servicing cash flows, expected borrower payments and the passage of time.

The increase in the fair value of mortgage servicing rights due to changes in valuation inputs during the first three months of 2012, was primarily a result of updated prepayment speed forecast assumptions.

Refer to Note 14 for additional disclosures related to the assumptions and estimates used in determining the fair value of residential mortgage servicing rights. The sensitivity of the current fair value of the residential mortgage servicing rights to immediate 10% and 20% adverse changes in key economic assumptions is included in the accompanying table:

			Residential
			Mortgage Servicing Rights
			March 31, 2012

			(Dollars in millions)
Fair value of residential mortgage servicing rights				$	696
Composition of residential loans serviced for others:
	Fixed-rate mortgage loans				99	%
	Adjustable-rate mortgage loans				1
		Total			100	%
Weighted average life					4.5	yrs

Prepayment speed					16.5	%
	Effect on fair value of a 10% increase			$	(39)
	Effect on fair value of a 20% increase				(73)

Weighted average discount rate					9.8	%
	Effect on fair value of a 10% increase			$	(25)
	Effect on fair value of a 20% increase				(48)

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. As indicated, changes in fair value based on adverse changes 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, in this table, the effect of an adverse variation in a particular assumption on the fair value of the mortgage servicing rights is calculated without changing any other assumption; while in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments), which may magnify or counteract the effect of the change.

BB&T also arranges and services commercial real estate mortgages through Grandbridge Real Estate Capital, LLC (“Grandbridge”) the commercial mortgage banking subsidiary of Branch Bank. During the three months ended March 31, 2012 and 2011, Grandbridge originated $1.3 billion and $930 million, respectively, of commercial real estate mortgages, the majority of which were arranged for third party investors. As of March 31, 2012 and December 31, 2011, Grandbridge's portfolio of commercial real estate mortgages serviced for others totaled $25.8 billion and $25.4 billion, respectively. Commercial real estate mortgage loans serviced for others are not included in loans and leases on the accompanying Consolidated Balance Sheets. Grandbridge had $4.8 billion and $4.5 billion in loans serviced for others that were covered by recourse provisions at March 31, 2012 and December 31, 2011, respectively. As of March 31, 2012 and December 31, 2011, Grandbridge's maximum exposure to loss for these loans was approximately $1.3 billion and $1.2 billion, respectively. BB&T has recorded $16 million and $15 million of reserves related to these recourse exposures at March 31, 2012 and December 31, 2011, respectively.