Huntington National Bank 2014 Annual Report Download - page 72

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The tables below reflect activity in the representations and warranties reserve:
Table 29 - Summary of Reserve for Representations and Warranties on Mortgage Loans Serviced for Others
Year Ended December 31,
(dollar amounts in thousands) 2014 2013 2012 2011 2010
Reserve for representations and warranties, beginning of year $ 22,027 $ 28,588 $ 23,218 $ 20,171 $ 5,916
Assumed reserve for representations and warranties --- --- --- --- 7,000
Reserve charges (8,196) (12,513) (10,628) (8,711) (9,012)
Provision for representations and warranties (1,154) 5,952 15,998 11,758 16,267
Reserve for representations and warranties, end of year $ 12,677 $ 22,027 $ 28,588 $ 23,218 $ 20,171
Table 30 - Mortgage Loan Repurchase Statistics
Year Ended December 31,
(dollar amounts in thousands) 2014 2013 2012 2011
N
umber of loans sol
d
17,905 22,240 26,345 22,146
Amount of loans sold (UPB) $ 2,354,653 $ 3,255,732 $ 4,105,243 $ 3,170,903
N
umber of loans repurchased (1) 159 159 219 128
Amount of loans repurchased (UPB) (1) $ 18,482 $ 18,102 $ 29,123 $ 19,442
N
umber of claims receive
d
149 780 666 445
Successful dispute rate (2) 34 % 46 % 46 % 50 %
N
umber of make whole payments (3) 122 167 167 72
Amount of make whole payments (3) $ 6,853 $ 11,445 $ 9,432 $ 5,553
(1)Loans repurchased are loans that fail to meet the purchaser's terms.
(2)Successful disputes are a percent of close out requests.
(3)Make whole payments are payments to reimburse for losses on foreclosed properties.
Compliance Risk
Financial institutions are subject to many laws, rules, and regulations at both the federal and state levels. In September, for
example, the Office of the Comptroller of the Currency issued its final rule formalizing its “heightened expectations” supervisory
regime for the largest federally chartered depository institutions, including Huntington, to improve risk management and ensure
boards can challenge decisions made by management. These broad-based laws, rules and regulations include, but are not limited to,
expectations relating to anti-money laundering, lending limits, client privacy, fair lending, prohibitions against unfair, deceptive or
abusive acts or practices, protections for military members as they enter active duty, and community reinvestment. Additionally, the
volume and complexity of recent regulatory changes have increased our overall compliance risk. As such, we utilize various
resources to help ensure expectations are met, including a team of compliance experts dedicated to ensuring our conformance with all
applicable laws, rules, and regulations. Our colleagues receive training for several broad-based laws and regulations including, but not
limited to, anti-money laundering and customer privacy. Additionally, colleagues engaged in lending activities receive training for
laws and regulations related to flood disaster protection, equal credit opportunity, fair lending, and / or other courses related to the
extension of credit. We set a high standard of expectation for adherence to compliance management and seek to continuously enhance
our performance.
Capital
(This section should be read in conjunction with the Regulatory Matters section included in Part 1, Item 1 and Note 12 of the Notes to
Consolidated Financial Statements.)
Both regulatory capital and shareholders’ equity are managed at the Bank and on a consolidated basis. We have an active
program for managing capital and maintain a comprehensive process for assessing the Company’s overall capital adequacy. We
believe our current levels of both regulatory capital and shareholders’ equity are adequate.