Citibank 2011 Annual Report Download - page 112

90
In sum, the increase in estimated future loan documentation requests and
repurchase claims as a percentage of loan documentation requests were the
primary drivers of the $948 million increase in estimate for the repurchase
reserve during 2011. These factors were also the primary drivers of the
$305 million increase in estimate during the fourth quarter of 2011.
The table below sets forth the activity in the repurchase reserve for the years
ended December 31, 2011 and 2010:
In millions of dollars Dec. 31, 2011 $ECææ
"ALANCEæBEGINNINGæOFæPERIOD $ 969  
!DDITIONSæFORæNEWæSALES 20 
#HANGEæINæESTIMATE 948 
5TILIZATIONS (749) 
Balance, end of period $ 1,188  
The activity in the repurchase reserve for the three months ended
December 31, 2011 was as follows:
In millions of dollars Dec. 31, 2011
"ALANCEæBEGINNINGæOFæPERIOD $ 1,076
!DDITIONSæFORæNEWæSALES 7
#HANGEæINæESTIMATE 305
5TILIZATIONS (200)
Balance, end of period $ 1,188
Sensitivity of Repurchase Reserve
As discussed above, the repurchase reserve estimation process is subject to
numerous estimates and judgments. The assumptions used to calculate the
repurchase reserve contain a level of uncertainty and risk that, if different
from actual results, could have a material impact on the reserve amounts.
For example, Citi estimates that if there were a simultaneous 10% adverse
change in each of the significant assumptions noted above, the repurchase
reserve would increase by approximately $620 million as of December 31,
2011. This potential change is hypothetical and intended to indicate the
sensitivity of the repurchase reserve to changes in the key assumptions. Actual
changes in the key assumptions may not occur at the same time or to the
same degree (i.e., an adverse change in one assumption may be offset by an
improvement in another). Citi does not believe it has sufficient information
to estimate a range of reasonably possible loss (as defined under ASC 450)
relating to its Consumer representations and warranties.
Representation and Warranty Claims—By Claimant
For the GSEs, Citi’s response (i.e., agree or disagree to repurchase or
make-whole) to any repurchase claim is required within 90 days of receipt
of the claim. If Citi does not respond within 90 days, the claim is subject
to discussions between Citi and the particular GSE. For private investors,
the time period for responding to any repurchase claim is governed by the
individual sale agreement; however, if the specified timeframe is exceeded,
the investor may choose to initiate legal action. As of December 31, 2011, no
such legal action has been initiated by private investors.
The representation and warranty claims by claimant, as well as the
number of unresolved claims by claimant, for the years ended December 31,
2011 and 2010, respectively, were as follows:
#LAIMSæDURINGæ 5NRESOLVEDæCLAIMSæASæOF
2011  December 31, 2011 $ECEMBERææ
In millions of dollars
Number
of claims
Original
principal
balance
.UMBERæ
OFæCLAIMS
/RIGINALææ
PRINCIPALææ
BALANCE
Number
of claims
Original
principal
balance
.UMBERæ
OFæCLAIMS
/RIGINALææ
PRINCIPALææ
BALANCE
'3%S 13,584 $ 2,930    5,344 $ 1,148   
0RIVATEæINVESTORS 1,649 331   651 122  
-ORTGAGEæINSURERSæ 729 164   62 15  
Total (2) 15,962 $ 3,425    6,057 $ 1,285   
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