SEC Company Response from CITIGROUP INC (C, C-PN) (CIK 0000831001) (C) — Jun 29, 2011
CITIGROUP INC (C, C-PN) (CIK 0000831001)
Date: June 29, 2011 · CIK: 0000831001 · Accession: 0001104659-11-037141
AI Filing Summary & Sentiment
File numbers found in text: 001-09924
Referenced dates: May 27, 2011
Letter
VIA EDGAR CORRESPONDENCE Securities and Exchange Commission Filed February 25, 2011 Form 10-Q for the Quarterly Period Ended March 31, 2011 Filed May 5, 2011 File No. 001-09924
Dear Ms. Hunsaker:
Enhancement of Citigroup Inc.’s (“Citigroup” or “Citi”) disclosures is an objective that we share with the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC” or “Commission”) and one that we consider in all our filings. This letter sets forth the responses of Citigroup to the comments of the Staff contained in the Staff’s letter dated May 27, 2011.
CITI B-1
FOIA Confidential Treatment Requested by Citigroup Inc.
For your convenience, the text of the Staff’s comments is set forth in bold below, followed in each case by our response.
Form 10-K for the Fiscal Year Ended December 31, 2010
Item 1. Business
Citigroup Segments and Regions, page 5
1. We note that certain of your prior period line items (e.g., fiscal year ended 2009 and 2008 net interest revenue, total revenues, net of interest expense, pretax segment income (loss), etc.) included in your segment disclosures on pages 14 through 33 differ from the amounts previously reported in your prior Form 10-K filings. However, we were unable to locate disclosure addressing the reason(s) for these differences. Please tell us and revise future filings to disclose why certain prior period amounts have changed from the amounts previously reported (e.g., transfer of assets or services between segments, discontinued operations, etc.).
We advise the Staff that the changes in the amounts noted by the Staff reflect the asset transfers from Citi Holdings to Citicorp during the first quarter of 2010. Citi included the disclosure below on page 30 of its Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (the “2009 Form 10-K”) and, on April 13, 2010, we furnished to the SEC a revised historical quarterly financial data supplement on Form 8-K to reflect such transfer.
“With Citi’s exit from the loss-sharing agreement with the U.S. government in December 2009, the Company conducted a broad review of the Citi Holdings asset base to determine which assets are strategically important to Citicorp. As a result of this analysis, approximately $61 billion of assets will be moved from Citi Holdings into Citicorp in the first quarter of 2010. The assets consist primarily of approximately $34 billion of U.S. mortgages that will be transferred to NA RCB, approximately $19 billion of commercial and corporate loans and securities related to core Citicorp clients, of which approximately $17 billion will be moved to S&B and the remainder to NA RCB, and approximately $5.0 billion of assets related to Citi’s Mexico asset management business that will be moved to LATAM RCB.”
CITI B-2
FOIA Confidential Treatment Requested by Citigroup Inc.
To the extent applicable, we will include disclosure on segment/business reclassifications in future filings in order to avoid reader confusion regarding changes to prior period amounts.
Item 1A. Risk Factors
The restrictions imposed on proprietary trading and..., page 54
2. Please provide us with draft disclosure to be included in future filings that quantifies revenue generated from your proprietary trading business.
Please see Citi’s response to the Staff’s comment #42 below.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Funding and Liquidity, page 44
Liquidity Between Entities, page 47
3. We note your disclosure that liquidity is generally transferable within the non-bank, subject to regulatory restrictions, if any, as well as the fact that the non-bank can generally transfer excess liquidity into the bank subsidiaries. We also note your disclosure on page 44 that your non-bank “cashbox” totaled $94.5 billion which includes the liquidity portfolio and “cashbox” held in the United States as well as government bonds held by your broker-dealer entities in the United Kingdom and Japan, as well as the fact that you have cash deposited at various major central banks totaling $82.1 billion as of December 31, 2010. We also note your disclosure on page 181 that you have indefinitely reinvested $32.1 billion of foreign earnings and would be subject to additional tax of $8.6 billion if the amounts were effectively repatriated. Please tell us, and expand disclosure in future filings, if material, to address the effects on your liquidity of additional tax obligations that could become due if you choose to transfer cash and government bonds held by your foreign subsidiaries to the U.S. entities.
CITI B-3
FOIA Confidential Treatment Requested by Citigroup Inc.
We advise the Staff that, in its comment, the Staff is comparing two different disclosures which are not related. With respect to the disclosures on page 181 of Citigroup’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (the “2010 Form 10-K”), as we disclose, Citi would be subject to tax upon the repatriation of the currently indefinitely invested earnings of Citi’s non-U.S. subsidiaries (approximately $32.1 billion as of December 31, 2010). These undistributed earnings represent capital currently held by Citi, and are not part of Citi’s overall aggregate liquidity resources.
Citi’s disclosures cited by the Staff on pages 44 and 47 of the 2010 Form 10-K, however, pertain to Citi’s aggregate liquidity resources as of December 31, 2010, which included highly liquid government and government-backed securities, such as government bonds held by Citi’s broker-dealer entities in the United Kingdom and Japan, as well as cash held at the various central banks overseas, and the intercompany transferability of these resources. These resources, which do not include the amounts described on page 181, are generally freely transferable in that they can be placed as deposits with banking subsidiaries or loaned to non-U.S. subsidiaries without giving rise to incremental taxes. As such, we do not believe any additional disclosure is material or necessary regarding the impact on Citi’s liquidity or additional taxes that could become due upon the placement of liquidity between Citi entities.
Liquidity Risk Management, page 48
Liquidity Measures and Stress Testing, page 48
4. We note your disclosure that you use a measure referred to as “cash capital” that measures your ability to fund the structurally illiquid portion of Citigroup’s balance sheet. Your disclosure also states that as of December 31, 2010, both the non-bank and the aggregate bank subsidiaries had a significant excess of cash capital. In order to increase the transparency of this metric, please enhance your disclosure in future filings to discuss how much “cash capital” you believe is required or targeted to be achieved at these different levels and whether the level of cash capital is growing or decreasing over time at the different bank and non-bank subsidiary levels.
CITI B-4
FOIA Confidential Treatment Requested by Citigroup Inc.
Citi advises the Staff that cash capital is an internal metric that Citi uses to measure and monitor its ability to fund the structurally illiquid portion of the balance sheet, as we disclosed on page 48 of the 2010 Form 10-K, on a specific product-by-product basis. While cash capital is a methodology generally used by global financial institutions to provide a maturity structure matching assets and liabilities, there is a lack of standardization in this area and specific product-by-product assumptions vary by firm, which would make potential disclosure inconsistent and, we believe, difficult for investors to understand and compare across the industry. It is for this reason, among others, that we are not aware of any of our peers disclosing a specific, targeted level of cash capital.
In addition, as the Staff is likely aware, Citi, like other financial institutions, is awaiting further guidance from the Basel Committee on Banking Supervision and the applicable U.S. regulators regarding the Basel III liquidity standards, including without limitation the long-term, structural Net Stable Funding Ratio (“NSFR”), which we believe will provide a consistent definition regarding the calculation of the proportion of long-term assets funded by long-term, stable funding. (See our disclosure on pages 56 and 57 of the 2010 Form 10-K regarding the new Basel III liquidity standards.)
Moreover, Citi believes that it provides ample disclosure in its periodic filings regarding the current status of its aggregate liquidity resources, and we believe that investors have a clear understanding of Citi’s current strong liquidity position at both the bank and non-bank subsidiary levels. For example, we disclose Citi’s structural liquidity ratio (page 48 of the 2010 Form 10-K), which is defined as the sum of deposits, long-term debt and stockholders’ equity as a percentage of total assets and which measures whether the asset base is funded by sufficiently long-dated liabilities. As disclosed, Citi’s structural liquidity ratio was 73% at December 31, 2010, 71% at September 30, 2010, and 73% at December 31, 2009. In addition, as the Staff notes pursuant to comment #3 above, we have provided disclosure regarding our aggregate liquidity resources and the transferability of those liquidity resources on an intercompany basis.
Accordingly, for all the reasons set forth above, Citi does not intend to disclose specific “cash capital” targets in its future filings. Of course, as further guidance becomes available regarding the new Basel III liquidity standards, including the NSFR, to the extent such metrics are reasonably likely to have a material impact on Citi’s liquidity and liquidity resources, Citi
CITI B-5
FOIA Confidential Treatment Requested by Citigroup Inc.
will provide disclosure in its future filings to increase the transparency of these metrics, and their impact on Citi.
5. We were unable to locate a discussion of your off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on your financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources in your Management’s Discussion and Analysis. However, we note disclosure of certain information related to guarantees in Note 28 and information about off-balance sheet securitization trusts in Note 22, but it is unclear if this reflects all of your off-balance sheet exposure and we note that it could be more transparently summarized in one place with cross-references that refer the reader to the appropriate sections of the document for further discussion. Refer to Item 303(a)(4) of Regulation S-K for guidance.
In future filings, as we previously have done in our periodic filings, we will include a caption within our Management’s Discussion and Analysis for Off-Balance Sheet Arrangements. In this section, we will cross reference to our “Securitizations and VIEs” and “Guarantees” notes, where applicable, as well as our “Significant Accounting Policies and Estimates - Securitizations” discussion in the Form 10-K.
Credit Risk, page 63
U.S. Consumer Mortgage Lending, page 72
6. We note your disclosure that FHA and VA loans have high delinquency rates, but given the guarantees provided by the U.S. Government, you have experienced negligible credit losses on those loans. Please tell us whether you have experienced any increases in denials of claim from the U.S. Government on these types of loans or on FHA/VA loans in GNMA-guaranteed securitizations.
Citi has not experienced [***] in claim denials from the U.S. Government on either owned FHA/VA loans or FHA/VA loans in GNMA-guaranteed securitizations in 2010 or 2011. During this time, the collection experience on FHA/VA loans has been [***].
[***] The following information has been redacted in accordance with Citigroup’s request for confidential treatment.
CITI B-6
FOIA Confidential Treatment Requested by Citigroup Inc.
7. We note your disclosure on page 72 that you have $50.0 billion of second mortgages, as well as your disclosure on page 75 that your mortgage portfolio includes $27.0 billion of first- and second-mortgage home equity lines of credit that are still within their revolving period and have not yet commenced amortization. Please respond to the following regarding your second mortgages:
Citi’s North America Consumer portfolio consists of both residential first mortgages and home equity loans. Home equity loans include both fixed rate home equity loans and loans extended under home equity lines of credit, both of which are typically in a junior lien position. It should be noted that it is possible for a home equity loan to be in a first lien position.
· Tell us whether you are able to track whether the first lien position is in default, regardless of whether you hold the first lien loan. If so, please tell us the results of that data and consider providing disclosure of this information in future filings.
When Citi is the owner or servicer of the first lien, we are able to track whether the first lien position is in default. For all borrowers, Citi obtains refreshed credit bureau scores and other information that is used to manage account strategy. [***].
· Tell us and disclose the percentage of the second home equity loan portfolio where you also hold the first lien.
Because the Staff’s comment and the one immediately below relate to information that Citi has access to regarding first liens, we believe it is more meaningful to include first liens that we either own or service in this and the next response. As of March 31, 2011, the percentage of mortgage loans in a second lien position where we also own or service the first lien was [***]. Because we do not manage the risk of mortgage loans in a junior
[***] The following information has been redacted in accordance with Citigroup’s request for confidential treatment.
CITI B-7
FOIA Confidential Treatment Requested by Citigroup Inc.
lien position differently based on the information gained from owning or servicing the first mortgage loan, we do not plan to disclose this percentage in future filings.
· Tell us whether the default and delinquency statistics for the second mortgages where you also hold the first lien show a different trend than situations where you do not also hold the first lien loan.
The default and delinquency statistics for second liens where we also own or service the first lien have historically been better than those where we do not own or service the first lien. As of March 31, 2011, the default percentages of these two categories were as follows:
30+ DPD%
90+ DPD%
Stand-alone second liens
[***]
[***]
Second liens where we own or service the first lien
[***]
[***]
Total
[***]
[***]
· Tell us and enhance disclosures in future filings to provide a discussion of how many borrowers are only paying the minimum amount due on the first- and second-mortgage home equity loans.
As further described in our response to the Staff’s comment immediately below, unlike credit cards, draw downs under home equity lines of credit do not have a “minimum amount due.” During the draw period (the revolving period that allows the borrower to draw additional funds before the amortization period commences), the borrower is required to make contractual interest payments. At the end of the draw period, the borrower is required to make principal and interest pa
Show Raw Text
CORRESP 1 filename1.htm FOIA Confidential Treatment Requested by Citigroup Inc. John C. Gerspach Chief Financial Officer Citigroup Inc. 399 Park Avenue New York, NY 10022 June 29, 2011 VIA EDGAR CORRESPONDENCE Stephanie Hunsaker Securities and Exchange Commission 100 F Street, NE Mail Stop 4561 Washington, DC 20549-7553 Re: Citigroup Inc. Form 10-K for the Fiscal Year Ended December 31, 2010 Filed February 25, 2011 Form 10-Q for the Quarterly Period Ended March 31, 2011 Filed May 5, 2011 File No. 001-09924 Dear Ms. Hunsaker: Enhancement of Citigroup Inc.’s (“Citigroup” or “Citi”) disclosures is an objective that we share with the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC” or “Commission”) and one that we consider in all our filings. This letter sets forth the responses of Citigroup to the comments of the Staff contained in the Staff’s letter dated May 27, 2011. CITI B-1 FOIA Confidential Treatment Requested by Citigroup Inc. For your convenience, the text of the Staff’s comments is set forth in bold below, followed in each case by our response. Form 10-K for the Fiscal Year Ended December 31, 2010 Item 1. Business Citigroup Segments and Regions, page 5 1. We note that certain of your prior period line items (e.g., fiscal year ended 2009 and 2008 net interest revenue, total revenues, net of interest expense, pretax segment income (loss), etc.) included in your segment disclosures on pages 14 through 33 differ from the amounts previously reported in your prior Form 10-K filings. However, we were unable to locate disclosure addressing the reason(s) for these differences. Please tell us and revise future filings to disclose why certain prior period amounts have changed from the amounts previously reported (e.g., transfer of assets or services between segments, discontinued operations, etc.). We advise the Staff that the changes in the amounts noted by the Staff reflect the asset transfers from Citi Holdings to Citicorp during the first quarter of 2010. Citi included the disclosure below on page 30 of its Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (the “2009 Form 10-K”) and, on April 13, 2010, we furnished to the SEC a revised historical quarterly financial data supplement on Form 8-K to reflect such transfer. “With Citi’s exit from the loss-sharing agreement with the U.S. government in December 2009, the Company conducted a broad review of the Citi Holdings asset base to determine which assets are strategically important to Citicorp. As a result of this analysis, approximately $61 billion of assets will be moved from Citi Holdings into Citicorp in the first quarter of 2010. The assets consist primarily of approximately $34 billion of U.S. mortgages that will be transferred to NA RCB, approximately $19 billion of commercial and corporate loans and securities related to core Citicorp clients, of which approximately $17 billion will be moved to S&B and the remainder to NA RCB, and approximately $5.0 billion of assets related to Citi’s Mexico asset management business that will be moved to LATAM RCB.” CITI B-2 FOIA Confidential Treatment Requested by Citigroup Inc. To the extent applicable, we will include disclosure on segment/business reclassifications in future filings in order to avoid reader confusion regarding changes to prior period amounts. Item 1A. Risk Factors The restrictions imposed on proprietary trading and..., page 54 2. Please provide us with draft disclosure to be included in future filings that quantifies revenue generated from your proprietary trading business. Please see Citi’s response to the Staff’s comment #42 below. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Funding and Liquidity, page 44 Liquidity Between Entities, page 47 3. We note your disclosure that liquidity is generally transferable within the non-bank, subject to regulatory restrictions, if any, as well as the fact that the non-bank can generally transfer excess liquidity into the bank subsidiaries. We also note your disclosure on page 44 that your non-bank “cashbox” totaled $94.5 billion which includes the liquidity portfolio and “cashbox” held in the United States as well as government bonds held by your broker-dealer entities in the United Kingdom and Japan, as well as the fact that you have cash deposited at various major central banks totaling $82.1 billion as of December 31, 2010. We also note your disclosure on page 181 that you have indefinitely reinvested $32.1 billion of foreign earnings and would be subject to additional tax of $8.6 billion if the amounts were effectively repatriated. Please tell us, and expand disclosure in future filings, if material, to address the effects on your liquidity of additional tax obligations that could become due if you choose to transfer cash and government bonds held by your foreign subsidiaries to the U.S. entities. CITI B-3 FOIA Confidential Treatment Requested by Citigroup Inc. We advise the Staff that, in its comment, the Staff is comparing two different disclosures which are not related. With respect to the disclosures on page 181 of Citigroup’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (the “2010 Form 10-K”), as we disclose, Citi would be subject to tax upon the repatriation of the currently indefinitely invested earnings of Citi’s non-U.S. subsidiaries (approximately $32.1 billion as of December 31, 2010). These undistributed earnings represent capital currently held by Citi, and are not part of Citi’s overall aggregate liquidity resources. Citi’s disclosures cited by the Staff on pages 44 and 47 of the 2010 Form 10-K, however, pertain to Citi’s aggregate liquidity resources as of December 31, 2010, which included highly liquid government and government-backed securities, such as government bonds held by Citi’s broker-dealer entities in the United Kingdom and Japan, as well as cash held at the various central banks overseas, and the intercompany transferability of these resources. These resources, which do not include the amounts described on page 181, are generally freely transferable in that they can be placed as deposits with banking subsidiaries or loaned to non-U.S. subsidiaries without giving rise to incremental taxes. As such, we do not believe any additional disclosure is material or necessary regarding the impact on Citi’s liquidity or additional taxes that could become due upon the placement of liquidity between Citi entities. Liquidity Risk Management, page 48 Liquidity Measures and Stress Testing, page 48 4. We note your disclosure that you use a measure referred to as “cash capital” that measures your ability to fund the structurally illiquid portion of Citigroup’s balance sheet. Your disclosure also states that as of December 31, 2010, both the non-bank and the aggregate bank subsidiaries had a significant excess of cash capital. In order to increase the transparency of this metric, please enhance your disclosure in future filings to discuss how much “cash capital” you believe is required or targeted to be achieved at these different levels and whether the level of cash capital is growing or decreasing over time at the different bank and non-bank subsidiary levels. CITI B-4 FOIA Confidential Treatment Requested by Citigroup Inc. Citi advises the Staff that cash capital is an internal metric that Citi uses to measure and monitor its ability to fund the structurally illiquid portion of the balance sheet, as we disclosed on page 48 of the 2010 Form 10-K, on a specific product-by-product basis. While cash capital is a methodology generally used by global financial institutions to provide a maturity structure matching assets and liabilities, there is a lack of standardization in this area and specific product-by-product assumptions vary by firm, which would make potential disclosure inconsistent and, we believe, difficult for investors to understand and compare across the industry. It is for this reason, among others, that we are not aware of any of our peers disclosing a specific, targeted level of cash capital. In addition, as the Staff is likely aware, Citi, like other financial institutions, is awaiting further guidance from the Basel Committee on Banking Supervision and the applicable U.S. regulators regarding the Basel III liquidity standards, including without limitation the long-term, structural Net Stable Funding Ratio (“NSFR”), which we believe will provide a consistent definition regarding the calculation of the proportion of long-term assets funded by long-term, stable funding. (See our disclosure on pages 56 and 57 of the 2010 Form 10-K regarding the new Basel III liquidity standards.) Moreover, Citi believes that it provides ample disclosure in its periodic filings regarding the current status of its aggregate liquidity resources, and we believe that investors have a clear understanding of Citi’s current strong liquidity position at both the bank and non-bank subsidiary levels. For example, we disclose Citi’s structural liquidity ratio (page 48 of the 2010 Form 10-K), which is defined as the sum of deposits, long-term debt and stockholders’ equity as a percentage of total assets and which measures whether the asset base is funded by sufficiently long-dated liabilities. As disclosed, Citi’s structural liquidity ratio was 73% at December 31, 2010, 71% at September 30, 2010, and 73% at December 31, 2009. In addition, as the Staff notes pursuant to comment #3 above, we have provided disclosure regarding our aggregate liquidity resources and the transferability of those liquidity resources on an intercompany basis. Accordingly, for all the reasons set forth above, Citi does not intend to disclose specific “cash capital” targets in its future filings. Of course, as further guidance becomes available regarding the new Basel III liquidity standards, including the NSFR, to the extent such metrics are reasonably likely to have a material impact on Citi’s liquidity and liquidity resources, Citi CITI B-5 FOIA Confidential Treatment Requested by Citigroup Inc. will provide disclosure in its future filings to increase the transparency of these metrics, and their impact on Citi. 5. We were unable to locate a discussion of your off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on your financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources in your Management’s Discussion and Analysis. However, we note disclosure of certain information related to guarantees in Note 28 and information about off-balance sheet securitization trusts in Note 22, but it is unclear if this reflects all of your off-balance sheet exposure and we note that it could be more transparently summarized in one place with cross-references that refer the reader to the appropriate sections of the document for further discussion. Refer to Item 303(a)(4) of Regulation S-K for guidance. In future filings, as we previously have done in our periodic filings, we will include a caption within our Management’s Discussion and Analysis for Off-Balance Sheet Arrangements. In this section, we will cross reference to our “Securitizations and VIEs” and “Guarantees” notes, where applicable, as well as our “Significant Accounting Policies and Estimates - Securitizations” discussion in the Form 10-K. Credit Risk, page 63 U.S. Consumer Mortgage Lending, page 72 6. We note your disclosure that FHA and VA loans have high delinquency rates, but given the guarantees provided by the U.S. Government, you have experienced negligible credit losses on those loans. Please tell us whether you have experienced any increases in denials of claim from the U.S. Government on these types of loans or on FHA/VA loans in GNMA-guaranteed securitizations. Citi has not experienced [***] in claim denials from the U.S. Government on either owned FHA/VA loans or FHA/VA loans in GNMA-guaranteed securitizations in 2010 or 2011. During this time, the collection experience on FHA/VA loans has been [***]. [***] The following information has been redacted in accordance with Citigroup’s request for confidential treatment. CITI B-6 FOIA Confidential Treatment Requested by Citigroup Inc. 7. We note your disclosure on page 72 that you have $50.0 billion of second mortgages, as well as your disclosure on page 75 that your mortgage portfolio includes $27.0 billion of first- and second-mortgage home equity lines of credit that are still within their revolving period and have not yet commenced amortization. Please respond to the following regarding your second mortgages: Citi’s North America Consumer portfolio consists of both residential first mortgages and home equity loans. Home equity loans include both fixed rate home equity loans and loans extended under home equity lines of credit, both of which are typically in a junior lien position. It should be noted that it is possible for a home equity loan to be in a first lien position. · Tell us whether you are able to track whether the first lien position is in default, regardless of whether you hold the first lien loan. If so, please tell us the results of that data and consider providing disclosure of this information in future filings. When Citi is the owner or servicer of the first lien, we are able to track whether the first lien position is in default. For all borrowers, Citi obtains refreshed credit bureau scores and other information that is used to manage account strategy. [***]. · Tell us and disclose the percentage of the second home equity loan portfolio where you also hold the first lien. Because the Staff’s comment and the one immediately below relate to information that Citi has access to regarding first liens, we believe it is more meaningful to include first liens that we either own or service in this and the next response. As of March 31, 2011, the percentage of mortgage loans in a second lien position where we also own or service the first lien was [***]. Because we do not manage the risk of mortgage loans in a junior [***] The following information has been redacted in accordance with Citigroup’s request for confidential treatment. CITI B-7 FOIA Confidential Treatment Requested by Citigroup Inc. lien position differently based on the information gained from owning or servicing the first mortgage loan, we do not plan to disclose this percentage in future filings. · Tell us whether the default and delinquency statistics for the second mortgages where you also hold the first lien show a different trend than situations where you do not also hold the first lien loan. The default and delinquency statistics for second liens where we also own or service the first lien have historically been better than those where we do not own or service the first lien. As of March 31, 2011, the default percentages of these two categories were as follows: 30+ DPD% 90+ DPD% Stand-alone second liens [***] [***] Second liens where we own or service the first lien [***] [***] Total [***] [***] · Tell us and enhance disclosures in future filings to provide a discussion of how many borrowers are only paying the minimum amount due on the first- and second-mortgage home equity loans. As further described in our response to the Staff’s comment immediately below, unlike credit cards, draw downs under home equity lines of credit do not have a “minimum amount due.” During the draw period (the revolving period that allows the borrower to draw additional funds before the amortization period commences), the borrower is required to make contractual interest payments. At the end of the draw period, the borrower is required to make principal and interest pa