Morgan Stanley 2010 Annual Report Download - page 187

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
approximately $157 million and $137 million at December 31, 2010 and December 31, 2009, respectively, and
are included within Intangible assets and carried at fair value in the consolidated statements of financial
condition.
SPE Mortgage Servicing Activities. The Company services residential mortgage loans in the U.S. and Europe
and commercial mortgage loans in Europe owned by SPEs, including SPEs sponsored by the Company and SPEs
not sponsored by the Company. The Company generally holds retained interests in Company-sponsored SPEs. In
some cases, as part of its market-making activities, the Company may own some beneficial interests issued by
both Company-sponsored and non-Company sponsored SPEs.
The Company provides no credit support as part of its servicing activities. The Company is required to make
servicing advances to the extent that it believes that such advances will be reimbursed. Reimbursement of
servicing advances is a senior obligation of the SPE, senior to the most senior beneficial interests outstanding.
Outstanding advances are included in Other assets and are recorded at cost. Advances at December 31, 2010 and
December 31, 2009 totaled approximately $1.5 billion and $2.2 billion, respectively, net of allowance of
$10 million and $23 million at December 31, 2010 and December 31, 2009, respectively.
The following tables present information about the Company’s mortgage servicing activities for SPEs to which
the Company transferred loans at December 31, 2010 and December 31, 2009:
At December 31, 2010
Residential
Mortgage
Unconsolidated
SPEs
Residential
Mortgage
Consolidated
SPEs
Commercial
Mortgage
Unconsolidated
SPEs
Commercial
Mortgage
Consolidated
SPEs
(dollars in millions)
Assets serviced (unpaid principal balance) .......... $10,616 $2,357 $7,108 $2,097
Amounts past due 90 days or greater (unpaid principal
balance)(1) ................................ $ 3,861 $ 446 $ — $ —
Percentage of amounts past due 90 days or
greater(1) .................................. 36.4% 18.9% — —
Credit losses ................................. $ 1,098 $ 35 $ — $ —
(1) Amount includes loans that are at least 90 days contractually delinquent, loans for which the borrower has filed for bankruptcy, loans in
foreclosure and real estate owned.
At December 31, 2009
Residential
Mortgage
QSPEs
Residential
Mortgage
Failed Sales
Commercial
Mortgage
QSPEs
(dollars in millions)
Assets serviced (unpaid principal balance) ........................... $18,902 $1,110 $10,901
Amounts past due 90 days or greater (unpaid principal balance)(1) ....... $ 7,297 $ 408 $ 5
Percentage of amounts past due 90 days or greater(1) .................. 38.6% 36.8% —
(1) Amount includes loans that are at least 90 days contractually delinquent, loans for which the borrower has filed for bankruptcy, loans in
foreclosure and real estate owned.
The Company also serviced residential and commercial mortgage loans for SPEs sponsored by unrelated parties
with unpaid principal balances totaling $13 billion and $20 billion at December 31, 2010 and December 31,
2009, respectively.
181