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Table of Contents
Notes to Consolidated Financial Statements
Ally Financial Inc. • Form 10-K
119
Delinquencies and Net Credit Losses
The following tables represent 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.
Total Amount
Amount 60 days or more
past due Net credit losses
December 31, ($ in millions) 2014 2013 2014 2013 2014 2013
On-balance sheet loans
Consumer automotive $ 58,085 $ 56,417 $ 457 $ 412 $ 501 $ 402
Consumer mortgage 7,926 8,460 151 164 43 75
Commercial automotive 34,022 33,803 942 12
Commercial other 1,918 1,683 ——(8) (7)
Total on-balance sheet loans 101,951 100,363 617 618 537 472
Off-balance sheet securitization entities
Consumer automotive 2,801 899 5313
Total off-balance sheet securitization entities 2,801 899 5313
Whole-loan transactions (a) 929 2,848 33 69 66
Total $ 105,681 $ 104,110 $ 655 $ 690 $ 544 $ 481
(a) Whole-loan transactions are not part of a securitization transaction, but represent consumer automotive pools of loans sold to third-party investors.
11. Servicing Activities
Mortgage Servicing Rights
The following table summarizes past activity related to MSRs, which were carried at fair value. Management estimated fair value using
our transaction data and other market data or, in periods when there were limited MSRs market transactions that were directly observable,
internally-developed discounted cash flow models (an income approach) were used to estimate the fair value. These internal valuation models
estimated net cash flows based on internal operating assumptions that we believed would be used by market participants in orderly
transactions combined with market-based assumptions for loan prepayment rates, interest rates, and discount rates that we believed
approximate yields required by investors in this asset.
Year ended December 31, ($ in millions) 2014 2013
Estimated fair value at January 1, $—
$ 952
Additions —60
Changes in fair value
Due to changes in valuation inputs or assumptions used in the valuation model —(32)
Other changes in fair value —(69)
Sales (a) —(911)
Estimated fair value at December 31, $—
$—
(a) Includes the sales of agency MSRs during April 2013.
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model included all changes due to a
revaluation by a model or by a benchmarking exercise. Other changes in fair value primarily included the accretion of the present value of the
discount related to forecasted cash flows and the economic runoff of the portfolio.
Risk Mitigation Activities
The primary risk of servicing rights is interest rate risk and the resulting impact on prepayments. A significant decline in interest rates
could lead to higher-than-expected prepayments that could reduce the value of the MSRs. We previously economically hedged the impact of
these risks with both derivative and nonderivative financial instruments. Refer to Note 22 for additional information regarding the derivative
financial instruments used to economically hedge MSRs.