Ally Bank 2012 Annual Report Download - page 146

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Our involvement with consolidated and nonconsolidated VIEs in which we hold variable interests is presented below.
December 31, ($ in millions)
Consolidated
involvement
with VIEs (a)
Assets of
nonconsolidated
VIEs (a)
Maximum exposure to
loss in nonconsolidated
VIEs
2012
On-balance sheet variable interest entities
Consumer automobile $ 28,566
Commercial automobile 23,139
Commercial other 728
Off-balance sheet variable interest entities
Consumer automobile — $ 1,495 $ 1,495 (b)
Consumer mortgage — other — — (c) 12 (d)
Commercial other (28) (e) — (f) 85
Total $ 52,405 $ 1,495 $ 1,592
2011
On-balance sheet variable interest entities
Consumer automobile $ 26,504
Consumer mortgage — private-label 1,098
Commercial automobile 19,594
Other 956
Off-balance sheet variable interest entities
Consumer mortgage — Ginnie Mae 2,652 (g) $ 44,127 $ 44,127 (b)
Consumer mortgage — CMHC 66 (g) 3,222 66 (h)
Consumer mortgage — private-label 141 (g) 4,408 4,408 (b)
Consumer mortgage — other — — (c) 17 (d)
Commercial other 83 (e) — (f) 242
Total $ 51,094 $ 51,757 $ 48,860
(a) Asset values represent the current unpaid principal balance of outstanding consumer finance receivables and loans within the VIEs.
(b) Maximum exposure to loss represents the current unpaid principal balance of outstanding loans based on our customary representation and warranty
provisions. This measure is based on the unlikely event that all of the loans have underwriting defects or other defects that trigger a representation and
warranty provision and the collateral supporting the loans are worthless. This required disclosure is not an indication of our expected loss.
(c) Includes a VIE for which we have no management oversight and therefore we are not able to provide the total assets of the VIE. However, in March 2011
we sold excess servicing rights valued at $266 million to the VIE.
(d) Our maximum exposure to loss in this VIE is a component of servicer advances made that are allocated to the trust. The maximum exposure to loss
presented represents the unlikely event that every loan underlying the excess servicing rights sold defaults, and we, as servicer, are required to advance the
entire excess service fee to the trust for the contractually established period. This required disclosure is not an indication of our expected loss.
(e) Includes $0 million and $100 million classified as finance receivables and loans, net, and $0 million and $20 million classified as other assets, offset by
$28 million and $37 million classified as accrued expenses and other liabilities at December 31, 2012, and December 31, 2011, respectively.
(f) Includes VIEs for which we have no management oversight and therefore we are not able to provide the total assets of the VIEs.
(g) Includes $0 billion and $2.4 billion classified as mortgage loans held-for-sale, $0 million and $92 million classified as trading securities or other assets,
and $0 million and $386 million classified as mortgage servicing rights at December 31, 2012, and December 31, 2011, respectively. CMHC is the
Canada Mortgage and Housing Corporation.
(h) Due to combination of the credit loss insurance on the mortgages and the guarantee by CMHC on the issued securities, the maximum exposure to loss
would be limited to the amount of the retained interests. Additionally, the maximum loss would occur only in the event that CMHC dismisses us as
servicer of the loans due to servicer performance or insolvency.
On-balance Sheet Variable Interest Entities
We engage in securitization and other financing transactions that do not qualify for off-balance sheet treatment. In these situations, we
hold beneficial interests or other interests in the VIE, which represent a form of significant continuing economic interest. These retained
interests include, but are not limited to, senior or subordinate asset-backed securities and residuals, and previously included senior or
subordinate mortgage-backed securities, interest-only strips, and principal-only strips. Certain of these retained interests provide credit
enhancement to the securitization entity as they may absorb credit losses or other cash shortfalls. Additionally, the securitization documents
may require cash flows to be directed away from certain of our retained interests due to specific over-collateralization requirements, which
may or may not be performance-driven. Because these securitization entities are consolidated, these retained interests and servicing rights are
not recognized as separate assets on our Consolidated Balance Sheet.
Table of Contents
Notes to Consolidated Financial Statements
Ally Financial Inc. • Form 10-K