Wells Fargo 2014 Annual Report Download - page 194

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Note 9: Mortgage Banking Activities (continued)
We present the components of our managed servicing
portfolio in the following table at unpaid principal balance for
loans serviced and subserviced for others and at book value for
owned loans serviced.
Dec 31, Dec 31,
(in billions) 2014 2013
Residential mortgage servicing:
Serviced for others $ 1,405 1,485
Owned loans serviced 342 338
Subserviced for others 5 6
Total residential servicing 1,752 1,829
Commercial mortgage servicing:
Serviced for others 456 419
Owned loans serviced 112 107
Subserviced for others 7 7
Total commercial servicing 575 533
Total managed servicing portfolio $ 2,327 2,362
Total serviced for others $ 1,861 1,904
Ratio of MSRs to related loans serviced for others 0.75% 0.88
The components of mortgage banking noninterest income
were:
Year ended December 31,
(in millions) 2014 2013 2012
Servicing income, net:
Servicing fees
Contractually specified servicing fees $ 4,285 4,442 4,626
Late charges 203 216 257
Ancillary fees 319 343 342
Unreimbursed direct servicing costs (1) (694) (1,074) (1,234)
Net servicing fees 4,113 3,927 3,991
Changes in fair value of MSRs carried at fair value:
Due to changes in valuation model inputs or assumptions (2) (2,122) 3,398 (2,893)
Other changes in fair value (3) (1,909) (2,242) (3,061)
Total changes in fair value of MSRs carried at fair value (4,031) 1,156 (5,954)
Amortization (254) (254) (233)
Net derivative gains (losses) from economic hedges (4) 3,509 (2,909) 3,574
Total servicing income, net 3,337 1,920 1,378
Net gains on mortgage loan origination/sales activities 3,044 6,854 10,260
Total mortgage banking noninterest income $ 6,381 8,774 11,638
Market-related valuation changes to MSRs, net of hedge results (2) + (4) $ 1,387 489 681
(1) Primarily associated with foreclosure expenses and unreimbursed interest advances to investors.
(2) Refer to the changes in fair value of MSRs table in this Note for more detail.
(3) Represents changes due to collection/realization of expected cash flows over time.
(4) Represents results from economic hedges used to hedge the risk of changes in fair value of MSRs. See Note 16 (Derivatives Not Designated as Hedging Instruments) for
additional discussion and detail.
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