Ally Bank 2011 Annual Report Download - page 170

Table of Contents
Notes to Consolidated Financial Statements
Ally Financial Inc. • Form 10−K
The following table represents on−balance sheet loans held−for−sale and finance receivable and loans, off−balance sheet securitizations, and
whole−loan sales where we have continuing involvement. The table presents quantitative information about delinquencies and net credit losses. Refer to
Note 12 for further detail on total serviced assets.
Total amount Amount 60 days or more past due Net credit losses
December 31, ($ in millions) 2011 2010 2011 2010 2011 2010
On−balance sheet loans
Consumer automobile $ 63,884 $ 51,254 $ 341 $ 373 $ 321 $ 613
Consumer mortgage (a) 18,940 23,174 3,242 3,437 181 173 (b)
Commercial automobile 37,302 35,629 162 186 13 84
Commercial mortgage 1,925 1,660 14 110 31 91
Commercial other 1,261 2,107 1 20 (5) 227
Total on−balance sheet loans 123,312 113,824 3,760 4,126 541 1,188
Off−balance sheet securitization entities
Consumer automobile — — — — — 1
Consumer mortgage — GSEs (c) 262,984 253,192 9,456 13,990 n/m n/m
Consumer mortgage — private−label 63,991 73,638 11,301 12,220 3,982 4,605
Total off−balance sheet securitization entities 326,975 326,830 20,757 26,210 3,982 4,606
Whole−loan transactions (d) 33,961 38,212 2,901 2,950 782 1,269 (b)
Total $ 484,248 $ 478,866 $ 27,418 $ 33,286 $ 5,305 $ 7,063
n/m = not meaningful
(a) Includes loans subject to conditional repurchase options of $2.3 billion and $2.3 billion guaranteed by the GSEs, and $132 million and $146 million sold to certain private−label
mortgage securitization entities at December 31, 2011 and 2010, respectively.
(b) We identified an immaterial error in the amounts previously disclosed related to net credit losses for on−balance sheet consumer mortgage, and whole−loan transactions for the
December 31, 2010 period. We corrected the net credit losses for these balances, resulting in a decrease of $162 million for on−balance sheet consumer mortgage, and an increase of
$969 million for whole−loan transactions from the amounts previously presented. The change had no impact on our consolidated financial condition or results of operation.
(c) Anticipated credit losses are not meaningful due to the GSE guarantees.
(d) Whole−loan transactions are not part of a securitization transaction, but represent consumer automobile and consumer mortgage pools of loans sold to third−party investors.
Changes in Accounting for Variable Interest Entities
During 2009, we executed an amendment to a commercial automobile securitization entity that was previously considered as a QSPE and, therefore,
was not consolidated. The amendment contractually required us to deposit additional cash into a collateral account held by the securitization entity.
Management determined the amendment caused the entity to no longer be considered a QSPE, and therefore we consolidated the entity. We continued to
consolidate this entity after adoption of ASU 2009−17.
ASU 2009−17 became effective on January 1, 2010, and upon adoption, we consolidated certain securitization entities that were previously held
off−balance sheet. On January 1, 2010, we recognized a net increase of $17.6 billion to assets and liabilities on our Consolidated Balance Sheet
($10.1 billion of the increase relates to operations classified as held−for−sale that
were ultimately sold). Refer to Note 1 for further discussion of the requirements of ASC 860 and ASC 810, including changes to the accounting
requirements related to transfers of financial assets and consolidation of VIEs.
We previously held on our Consolidated Balance Sheet certain mortgage securitization entities, which were on−balance sheet prior to the adoption of
ASU 2009−17 because we did not meet the sale accounting requirements at the inception of the transactions. Specific provisions inherent in these deals,
included but were not limited to, the ability of the trust to enter into a derivative contract and the inclusion of a loan repurchase right. The existence of the
ability to enter into a derivative precluded the entities from being deemed a QSPE and the existence of the loan repurchase right precluded sale accounting
treatment. These two provisions, when used in combination, were deemed substantive and precluded sale accounting. We also retained servicing and, in
most cases, retained an economic interest in the entities in the form of economic residuals, subordinate bonds, and/or IO strips. During 2010, we completed
the sale of 100% of our retained residuals and subordinate bonds related to certain of these on−balance sheet securitization entities. In addition, any
repurchase rights associated with these structures were removed from these deals through exercise of such right. These collective actions were deemed to be
substantial to warrant a re−characterization of the original transactions and, as such, they were reassessed under ASC 860 and it was concluded that the
securitization entities satisfied sale accounting requirements. Furthermore, the sale of the 100% economic interests resulted in the loss of a controlling
financial interest in the securitization entities and accordingly consolidation was not required. The combination of these actions resulted in the derecognition
of assets previously sold to these securitization entities. Consolidated assets and consolidated liabilities of $1.2 billion and $1.2 billion, respectively,
associated with this transaction were derecognized and a gain of $51 million was recorded.
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