Company: WFC-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000072971-25-000129
Chunk: 33

Company: WELLS FARGO & COMPANY/MN
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 1
Chunk 33
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 (MSRs) and apply the amortization method to commercial MSRs. Table 6.1 presents MSRs, including the changes in MSRs measured using the fair value method and the amortization method.Table 6.1:  Mortgage Servicing RightsQuarter ended March 31,(in millions)20252024Residential MSRs at fair value, beginning of period$6,844 7,468 Originations/purchases25 19 Sales and other(76)(263)Net reductions(51)(244)Changes in fair value:Due to valuation inputs or assumptions:Market interest rates (1)(123)277 Servicing and foreclosure costs5 (16)Discount rates— (8)Prepayment estimates and other (2)50 (2)Net changes in valuation inputs or assumptions(68)251  Changes due to collection/realization of expected cash flows (3)(189)(226)Total changes in fair value(257)25 Residential MSRs at fair value, end of period6,536 7,249 Commercial MSRs at amortized cost, end of period (4)644 999 Total MSRs$7,180 8,248 (1)Includes prepayment rate changes due to changes in market interest rates. Residential MSRs are economically hedged with derivative instruments to reduce exposure to changes in market interest rates.(2)Represents other changes in valuation model inputs or assumptions, including prepayment rate estimation changes that are independent of mortgage interest rate changes.(3)Represents the reduction in the residential MSR fair value for the cash flows expected to be collected during the period, net of income accreted due to the passage of time.(4)The estimated fair value of commercial MSRs was $780 million and $1.7 billion at March 31, 2025 and 2024, respectively. In first quarter 2025, we sold the non-agency portion of our commercial mortgage third-party servicing business.Table 6.2 provides key weighted-average assumptions used in the valuation of residential MSRs and sensitivity of the current fair value of residential MSRs to immediate adverse changes inthose assumptions. See Note 12 (Fair Value Measurements) for additional information on key assumptions for residential MSRs.Table 6.2:  Assumptions and Sensitivity of Residential MSRs($ in millions, except cost to service amounts)Mar 31, 2025Dec 31, 2024Fair value of interests held$6,