Ally Bank 2012 Annual Report Download - page 151

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taxes and insurance premiums, default and property maintenance, as well as advances of principal and interest payments before collecting
them from individual borrowers. At December 31, 2011, outstanding servicer advances related to subserviced loans were $125 million and we
had a reserve for uncollected subservicer advances $1 million.
At December 31, 2011, we were the master servicer (i.e., servicer of beneficial interests issued by mortgage securitization entities) for
467,722 loans, having an aggregate unpaid principal balance of $61.4 billion. In many cases, where we acted as master servicer, we also acted
as primary servicer. In connection with our master-servicing activities, we serviced the mortgage-backed and mortgage-related asset-backed
securities and whole-loan packages sold to investors. As the master servicer, we collected mortgage loan payments from primary servicers and
distributed those funds to investors in the mortgage-backed and mortgage-related asset-backed securities and whole-loan packages. As the
master servicer, we were required to advance scheduled payments to the securitization trust or whole-loan investors. To the extent the primary
servicer does not advance the payments, we were responsible for advancing the payment to the trust or whole-loan investors. Master-servicing
advances, including contractual interest, are priority cash flows in the event of a default, thus making their collection reasonably assured. In
most cases, we were required to advance these payments to the point of liquidation of the loan or reimbursement of the trust or whole-loan
investors. At December 31, 2011, outstanding master-servicing advances were $158 million and we had no reserve for uncollected master-
servicing advances.
Mortgage Serviced Assets
Total serviced mortgage assets consist of primary servicing activities. These include loans owned by Ally Bank, where Ally Bank is the
primary servicer, and loans sold to third-party investors, where Ally Bank has retained primary servicing. Loans owned by Ally Bank are
categorized as loans held-for-sale or finance receivables and loans which are discussed in further detail in Note 7 and Note 8, respectively.
The loans sold to third-party investors were sold through off-balance sheet GSE securitization transactions.
The unpaid principal balance of our serviced mortgage assets were as follows.
December 31, ($ in millions) 2012 (a) 2011
On-balance sheet mortgage loans
Held-for-sale and investment $ 10,938 $ 18,871
Operations held-for-sale —541
Off-balance sheet mortgage loans
Loans sold to third-party investors
Private-label —50,886
GSEs 119,384 262,868
Whole-loan 215,105
Purchased servicing rights —3,247
Operations held-for-sale —4,912
Total primary serviced mortgage loans 130,324 356,430
Subserviced mortgage loans —26,358
Subserviced operations held-for-sale —4
Total subserviced mortgage loans —26,362
Master-servicing-only mortgage loans —8,557
Total serviced mortgage loans $ 130,324 $ 391,349
(a) The remaining balances were serviced by Ally Bank, due to the deconsolidation of ResCap. Ally Bank announced that it has begun to explore strategic
alternatives for its agency MSR portfolio.
Ally Bank is subject to certain net worth requirements associated with its servicing agreements with Fannie Mae and Freddie Mac. The
majority of Ally Bank’s serviced mortgage assets are subserviced by GMAC Mortgage, LLC, a subsidiary of ResCap, pursuant to a servicing
agreement. At December 31, 2012, Ally Bank was in compliance with the requirements of the servicing agreements.
Automobile Finance Servicing Activities
We service consumer automobile contracts. Historically, we have sold a portion of our consumer automobile contracts. With respect to
contracts we sell, we retain the right to service and earn a servicing fee for our servicing function. Typically, we conclude that the fee we are
paid for servicing consumer automobile finance receivables represents adequate compensation, and consequently, we do not recognize a
servicing asset or liability. We recognized automobile servicing fee income of $109 million, $160 million, and $227 million during the years
ended December 31, 2012, 2011, and 2010, respectively.
Table of Contents
Notes to Consolidated Financial Statements
Ally Financial Inc. • Form 10-K