Company: WFC-PC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000072971-25-000253
Chunk: 35

Company: WELLS FARGO & COMPANY/MN
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 1
Chunk 35
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)Changes in fair value:Due to valuation inputs or assumptions:Market interest rates (1)1 (296)(124)71 Servicing and foreclosure costs2 (22)— (51)Discount rates(8)— (9)(53)Prepayment estimates and other (2)103 24 251 50 Net changes in valuation inputs or assumptions98 (294)118 17  Changes due to collection/realization of expected cash flows (3)(192)(235)(577)(695)Total changes in fair value(94)(529)(459)(678)Residential MSRs at fair value, end of period6,167 6,544 6,167 6,544 Commercial MSRs at amortized cost, end of period (4)618 949 618 949 Total MSRs$6,785 7,493 $6,785 7,493 (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 $728 million and $1.4 billion at September 30, 2025 and 2024, respectively. In first quarter 2025, we sold the non-agency portion of our commercial mortgage third-party servicing business.Table 6.2 provides key weighted-average assumptions used in the valuation of residential MSRs and sensitivity of the current fair value of residential MSRs to immediate adverse changes inthose assumptions. See Note 12 (Fair Value Measurements) for additional information on key assumptions for residential MSRs.Table 6.2:  Assumptions and Sensitivity of Residential MSRs($ in millions, except cost to service amounts)Sep 30, 2025Dec 31, 2024Fair value of interests held$6,167 6,844 Expected weighted-average life (in years)6.46.4Key assumptions:Prepayment rate assumption (1)8.0%8.1 Impact on fair value from 10% adverse change$(175)(191)Impact on fair value from