Compensatory fees are fees that we expect to be assessed by the government-sponsored enterprises, Fannie Mae (FNMA) and Freddie Mac (FHLMC) (collectively, the GSEs), as a result of foreclosure delays pursuant to first mortgage seller/servicer guides with the GSEs which provide timelines to complete the liquidation of delinquent loans.
In instances where we fail to meet these timelines, our agreements provide the GSEs with the option to assess compensatory fees.
The remainder of the mortgagerelated assessments and waivers costs are out-of-pocket costs that we do not expect to recover.
We expect these costs will remain elevated as additional loans are delayed in the foreclosure process.
We also expect that continued elevated costs, including costs related to resources necessary to perform the foreclosure process assessments and to implement other operational changes, will continue.
Average economic capital decreased 30 percent due to a reduction in credit risk driven by lower loan balances, and the sale of Balboa.
Average allocated equity decreased for the same reasons as economic capital as well as the goodwill impairment charges in 2011 and 2010.
For more information regarding economic capital and allocated equity, see Supplemental Financial Data on page 32.
Mortgage Banking Income CRES mortgage banking income is categorized into production and servicing income.
Core production income is comprised of revenue from the fair value gains and losses recognized on our interest rate lock commitments (IRLCs) and LHFS, the related secondary market execution, and costs related to representations and warranties in the sales transactions along with other obligations incurred in the sales of mortgage loans.
In addition, production income includes revenue, which is offset in All Other, for transfers of mortgage loans from CRES to the ALM portfolio related to the Corporation’s mortgage production retention decisions.
Ongoing costs related to representations and warranties and other obligations that were incurred in the sales of mortgage loans in prior periods are also included in production income.
Servicing income includes income earned in connection with servicing activities and MSR valuation adjustments, net of economic hedge activities.
The costs associated with our servicing activities are included in noninterest expense.
The table below summarizes the components of mortgage banking income.
## Table 0 ##
(1) Represents the change in the market value of the MSR asset due to the impact of customer payments received during the year.
(2) Includes sale of MSRs.
(3) Includes the effect of transfers of mortgage loans from CRES to the ALM portfolio in All Other.
Core production revenue of $2.8 billion in 2011 decreased $3.4 billion from 2010 due primarily to lower new loan origination volumes.
The 52 percent decline in new loan originations was caused primarily by a drop in market share, as previously discussed, combined with the decline in the overall market demand for mortgages from 2010 to 2011.
The representations and warranties provision increased $8.8 billion to $15.6 billion in 2011 due to the BNY Mellon Settlement and other exposures.
Net servicing income increased $834 million in 2011 due to a lower impact of customer payments partially offset by lower servicing fees driven by a decline in the servicing portfolio.
Improved MSR results, net of hedges also contributed to the increase in net servicing income.
Table 22 presents net charge-offs and related ratios for consumer loans and leases for 2011 and 2010.
Table 22 Consumer Net Charge-offs and Related Ratios
## Table 1 ##
(1) Net charge-off ratios are calculated as net charge-offs divided by average outstanding loans excluding loans accounted for under the fair value option.
Net charge-off ratios excluding the Countrywide PCI and fullyinsured loan portfolios were 2.27 percent and 1.86 percent for residential mortgage, 3.77 percent and 5.10 percent for home equity, 7.14 percent and 4.20 percent for discontinued real estate and 3.62 percent and 5.08 percent for the total consumer portfolio for 2011 and 2010.
These are the only product classifications materially impacted by the Countrywide PCI and fully-insured loan portfolios for 2011 and 2010.
Legacy Asset Servicing within CRES manages our exposures to certain residential mortgage, home equity and discontinued real estate products.
Legacy Asset Servicing manages both our owned loans, as well as loans serviced for others, that meet certain criteria.
The criteria generally represent home lending standards which we do not consider as part of our continuing core business.
The Legacy Asset Servicing portfolio includes the following: Discontinued real estate loans including subprime and pay option Residential mortgage loans and home equity loans for products we no longer originate including reduced document loans and interest-only loans not underwritten to fully amortizing payment Loans that would not have been originated under our underwriting standards at December 31, 2010 including conventional loans with an original loan-to-value (LTV) greater than 95 percent and government-insured loans for which the borrower has a FICO score less than 620 Countrywide PCI loan portfolios Certain loans that met a pre-defined delinquency and probability of default threshold as of January 1, 2011 For more information on Legacy Asset Servicing within CRES, see page 37.
Table 23 presents outstandings, nonperforming balances and net charge-offs by the Core portfolio and the Legacy Asset Servicing portfolio for the home loans portfolio.
## Table 2 ##
(1) Balances exclude consumer loans accounted for under the fair value option of $906 million for residential mortgage loans and $1.3 billion for discontinued real estate loans at December 31, 2011.
There were no consumer loans accounted for under the fair value option at December 31, 2010.
See Note 23 – Fair Value Option to the Consolidated Financial Statements for additional information on the fair value option.
We believe that the presentation of information adjusted to exclude the impact of the Countrywide PCI loan portfolio, the fullyinsured loan portfolio and loans accounted for under the fair value option is more representative of the ongoing operations and credit quality of the business.
As a result, in the following discussions of the residential mortgage, home equity and discontinued real estate portfolios, we provide information that excludes the impact of the Countrywide PCI loan portfolio, the fully-insured loan portfolio and loans accounted for under the fair value option in certain credit quality statistics.
We separately disclose information on the Countrywide PCI loan portfolios on page 83.
settlements, and the expiration of statutes of limitation, the Company currently estimates that the amount of unrecognized tax benefits could be reduced by up to $365 million during the next twelve months, with no significant impact on earnings or cash tax payments.
While the Company believes that it is adequately accrued for possible audit adjustments, the final resolution of these examinations cannot be determined at this time and could result in final settlements that differ from current estimates.
The Company recorded an income tax provision for 2007 of $415 million, including a $41 million benefit related to the effective settlement of tax audits, and $8 million of other tax benefits.
Excluding the impact of special items, the tax provision was $423 million, or 30% of pre-tax earnings before minority interest.
The Company recorded an income tax provision for 2006 of $1.9 billion, consisting of a $1.6 billion deferred tax provision (principally reflecting deferred taxes on the 2006 Transformation Plan forestland sales) and a $300 million current tax provision.
The provision also includes an $11 million provision related to a special tax adjustment.
Excluding the impact of special items, the tax provision was $272 million, or 29% of pre-tax earnings before minority interest.
The Company recorded an income tax benefit for 2005 of $407 million, including a $454 million net tax benefit related to a special tax adjustment, consisting of a tax benefit of $627 million resulting from an agreement reached with the U. S.  Internal Revenue Service concerning the 1997 through 2000 U. S.  federal income tax audit, a $142 million charge for deferred taxes related to earnings repatriations under the American Jobs Creation Act of 2004, and $31 million of other tax charges.
Excluding the impact of special items, the tax provision was $83 million, or 20% of pre-tax earnings before minority interest.
International Paper has non-U.
S.  net operating loss carryforwards of approximately $352 million that expire as follows: 2008 through 2017 — $14 million and indefinite carryforwards of $338 million.
International Paper has tax benefits from net operating loss carryforwards for state taxing jurisdictions of approximately $258 million that expire as follows: 2008 through 2017—$83 million and 2018 through 2027—$175 million.
International Paper also has federal, non-U.
S.  and state tax credit carryforwards that expire as follows: 2008 through 2017 — $67 million, 2018 through 2027 — $92 million, and indefinite carryforwards — $316 million.
Further, International Paper has state capital loss carryforwards that expire as follows: 2008 through 2017 — $9 million.
Deferred income taxes are not provided for temporary differences of approximately $3.7 billion, $2.7 billion and $2.4 billion as of December 31, 2007, 2006 and 2005, respectively, representing earnings of non-U.
S.  subsidiaries intended to be permanently reinvested.
Computation of the potential deferred tax liability associated with these undistributed earnings and other basis differences is not practicable.
NOTE 10 COMMITMENTS AND CONTINGENT LIABILITIES Certain property, machinery and equipment are leased under cancelable and non-cancelable agreements.
Unconditional purchase obligations have been entered into in the ordinary course of business, principally for capital projects and the purchase of certain pulpwood, wood chips, raw materials, energy and services, including fiber supply agreements to purchase pulpwood that were entered into concurrently with the 2006 Transformation Plan forestland sales (see Note 7).
At December 31, 2007, total future minimum commitments under existing non-cancelable operating leases and purchase obligations were as follows:

<table><tr><td>(Dollars in millions)</td><td>2011</td><td>2010</td></tr><tr><td>Production loss:</td><td></td><td></td></tr><tr><td>Core production revenue</td><td>$2,797</td><td>$6,182</td></tr><tr><td>Representations and warranties provision</td><td>-15,591</td><td>-6,785</td></tr><tr><td>Total production loss</td><td>-12,794</td><td>-603</td></tr><tr><td>Servicing income:</td><td></td><td></td></tr><tr><td>Servicing fees</td><td>5,959</td><td>6,475</td></tr><tr><td>Impact of customer payments<sup>-1</sup></td><td>-2,621</td><td>-3,759</td></tr><tr><td>Fair value changes of MSRs, net of economic hedge results<sup>-2</sup></td><td>656</td><td>376</td></tr><tr><td>Other servicing-related revenue</td><td>607</td><td>675</td></tr><tr><td>Total net servicing income</td><td>4,601</td><td>3,767</td></tr><tr><td>TotalCRESmortgage banking income (loss)</td><td>-8,193</td><td>3,164</td></tr><tr><td>Eliminations<sup>-3</sup></td><td>-637</td><td>-430</td></tr><tr><td>Total consolidated mortgage banking income (loss)</td><td>$-8,830</td><td>$2,734</td></tr></table>
<table><tr><td>Table 22</td><td>Consumer Net Charge-offs and Related Ratios</td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td colspan="2">Net Charge-offs</td><td colspan="2">Net Charge-off Ratios<sup>-1</sup></td></tr><tr><td colspan="2">(Dollars in millions)</td><td>2011</td><td>2010</td><td>2011</td><td>2010</td></tr><tr><td colspan="2">Residential mortgage</td><td>$3,832</td><td>$3,670</td><td>1.45%</td><td>1.49%</td></tr><tr><td colspan="2">Home equity</td><td>4,473</td><td>6,781</td><td>3.42</td><td>4.65</td></tr><tr><td colspan="2">Discontinued real estate</td><td>92</td><td>68</td><td>0.75</td><td>0.49</td></tr><tr><td colspan="2">U.S. credit card</td><td>7,276</td><td>13,027</td><td>6.90</td><td>11.04</td></tr><tr><td colspan="2">Non-U.S. credit card</td><td>1,169</td><td>2,207</td><td>4.86</td><td>7.88</td></tr><tr><td colspan="2">Direct/Indirect consumer</td><td>1,476</td><td>3,336</td><td>1.64</td><td>3.45</td></tr><tr><td colspan="2">Other consumer</td><td>202</td><td>261</td><td>7.32</td><td>8.89</td></tr><tr><td colspan="2">Total</td><td>$18,520</td><td>$29,350</td><td>2.94</td><td>4.51</td></tr></table>
<table><tr><td>Table 23</td><td colspan="4">Home Loans Portfolio December 31</td><td></td></tr><tr><td></td><td colspan="2">Outstandings</td><td colspan="2">Nonperforming</td><td>NetCharge-offs</td></tr><tr><td>(Dollars in millions)</td><td>2011</td><td>2010</td><td>2011</td><td>2010</td><td>2011</td></tr><tr><td>Core portfolio</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage</td><td>$178,337</td><td>$166,927</td><td>$2,414</td><td>$1,510</td><td>$348</td></tr><tr><td>Home equity</td><td>67,055</td><td>71,519</td><td>439</td><td>107</td><td>501</td></tr><tr><td>Legacy Asset Servicing portfolio</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage<sup>-1</sup></td><td>83,953</td><td>91,046</td><td>13,556</td><td>16,181</td><td>3,484</td></tr><tr><td>Home equity</td><td>57,644</td><td>66,462</td><td>2,014</td><td>2,587</td><td>3,972</td></tr><tr><td>Discontinued real estate<sup>-1</sup></td><td>11,095</td><td>13,108</td><td>290</td><td>331</td><td>92</td></tr><tr><td>Home loans portfolio</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Residential mortgage</td><td>262,290</td><td>257,973</td><td>15,970</td><td>17,691</td><td>3,832</td></tr><tr><td>Home equity</td><td>124,699</td><td>137,981</td><td>2,453</td><td>2,694</td><td>4,473</td></tr><tr><td>Discontinued real estate</td><td>11,095</td><td>13,108</td><td>290</td><td>331</td><td>92</td></tr><tr><td>Total home loans portfolio</td><td>$398,084</td><td>$409,062</td><td>$18,713</td><td>$20,716</td><td>$8,397</td></tr></table>

Question: When is Residential mortgage the largest for Net Charge-offs?
Answer: 2011