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Mortgage Servicing Rights
 12 Months Ended
Dec. 31, 2025
Transfers and Servicing [Abstract]  
Mortgage Servicing Rights Mortgage Servicing Rights
We had investments in mortgage servicing rights that resulted from the sale of loans to the secondary market for which we retained the servicing. We accounted for mortgage servicing rights at their fair value. A primary risk associated with mortgage servicing rights is the potential reduction in fair value as a result of higher than anticipated prepayments due to loan refinancing prompted, in part, by declining interest rates or government intervention. Conversely, these assets generally increase in value in a rising interest rate environment to the extent that prepayments are slower than anticipated. We utilized derivatives as economic hedges to offset changes in the fair value of the mortgage servicing rights resulting from anticipated changes in prepayments stemming from changing interest rate environments. There is also a risk of valuation decline due to higher-than-expected default rates, which we do not believe can be effectively managed using derivatives. For further information regarding the derivative instruments utilized to manage our MSR risks, see Note 15 - Derivative and Hedging Activities.
As of December 31, 2024, we classified all remaining mortgage servicing rights as held for sale and completed the sale in the year ended December 31, 2025.

Changes in the fair value of residential first mortgage servicing rights ("MSRs") were as follows:

Year Ended December 31,
20242023
Balance at beginning of period$1,111 $1,033 
Additions from loans sold with servicing retained184 208 
Reductions from sales(1,194)(51)
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1)
(105)(80)
Changes in estimates of fair value due to interest rate risk (1) (2)
30 1 
Fair value of MSRs at end of period$26 $1,111 
(1)Changes in fair value are included within net return on mortgage servicing rights on the Consolidated Statements of (Loss) Income.
(2)Represents estimated MSR value change resulting primarily from market-driven changes which we managed through the use of derivatives.

Contractual servicing and subservicing fees, including late fees and other ancillary income are presented below. Contractual servicing fees are included within Net return on mortgage servicing rights on the Consolidated Statements of (Loss) Income. Contractual subservicing fees including late fees and other ancillary income are included within Net loan administration (loss) income on the Consolidated Statements of (Loss) Income. Subservicing fee income is recorded for fees earned on subserviced loans, net of third-party subservicing costs.

The following table summarizes income and fees associated with owned mortgage servicing rights:

Year Ended December 31,
20242023
Net return on mortgage servicing rights
Servicing fees, ancillary income and late fees (1)
$202 $227 
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes and other(105)(80)
Changes in fair value due to interest rate risk30 1 
Gain on MSR derivatives (2)
(54)(47)
Net transaction costs— 2 
Total return (loss) included in net return on mortgage servicing rights$73 $103 
(1)Servicing fees are recorded on an accrual basis. Ancillary income and late fees are recorded on a cash basis.
(2)Changes in the derivatives utilized as economic hedges to offset changes in fair value of the mortgage servicing rights.


The following table summarizes income and fees associated with our mortgage loans subserviced for others:
Year Ended December 31,
20242023
Loan administration income on mortgage loans subserviced
Servicing fees, ancillary income and late fees (1)
$117 $154 
Charges on subserviced custodial balances (2)
(141)(168)
Other servicing charges2(3)
Total income (loss) on mortgage loans subserviced, included in loan administration income$(22)$(17)
(1)Servicing fees are recorded on an accrual basis. Ancillary income and late fees are recorded on a cash basis.
(2)Charges on subserviced custodial balances represent interest due to MSR owner.
For the year ended December 31, 2025, we earned no service fee income for loans serviced for the FDIC in connection with the Signature Transaction. For the years ended December 31, 2024 and 2023, we earned approximately $10 million and $95 million, respectively