remaining nearly 2.6% lower at the end of the eight-quarter forecast, with a peak difference of nearly 4.1% in the third quarter of 2021; and a 10.1% further deterioration in the national HPI with a trough in the first quarter of 2022. This analysis is not intended to estimate expected future changes in the allowance for credit losses, for a number of reasons, including: Without considering the additional weight the Firm has placed on its adverse scenarios or any other offsetting or correlated effects in other qualitative components of the Firm’s allowance for credit losses for the lending exposures noted below, the difference between the modeled estimates under the Firm’s relative adverse and central scenarios at December 31, 2020 would result in the following: This analysis relates only to the modeled credit loss estimates and is not intended to estimate changes in the overall allowance for credit losses as it does not reflect any potential changes in other adjustments to the quantitative calculation, which would also be influenced by the judgment management applies to the modeled lifetime loss estimates to reflect the uncertainty and imprecision of these modeled lifetime loss estimates based on then-current circumstances and conditions. Recognizing that forecasts of macroeconomic conditions are inherently uncertain, particularly in light of the recent economic conditions, the Firm believes that its process to consider the available information and associated risks and Details of the Firm’s processes for determining fair value are set out in Note 2. Estimating fair value requires the application of judgment. The type and level of judgment required is largely dependent on the amount of observable market information available to the Firm. For instruments valued using internally developed valuation models and other valuation techniques that use significant unobservable inputs and are therefore classified within level 3 of the valuation hierarchy, judgments used to estimate fair value are more significant than those required when estimating the fair value of instruments classified within levels 1 and 2.$^{(a)}$ (a) For purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the $7.7 billion of derivative receivables classified as level 3 does not reflect the netting adjustment as such netting is not relevant to a presentation based on the transparency of inputs to the valuation of an asset. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral. The following table includes the Firm’s assets measured at fair value and the portion of such assets that are classified within level 3 of the valuation hierarchy. Refer to Note 2 for further information. JPMorgan Chase carries a portion of its assets and liabilities at fair value. The majority of such assets and liabilities are measured at fair value on a recurring basis, including, derivatives and structured note products. Certain assets and liabilities are measured at fair value on a nonrecurring basis, including certain mortgage, home equity and other loans, where the carrying value is based on the fair value of the underlying collateral. uncertainties is appropriately governed and that its estimates of expected credit losses were reasonable and appropriate for the period ended  December 31, 2020. Fair value Assets measured at fair value Valuation • the Firm has placed significant weight on its adverse scenarios in estimating its allowance for credit losses as of D ecember 31, 2020, and accordingly, the existing allowance already reflects credit losses beyond those estimated under the central scenario • the impacts of changes in many MEVs are both interrelated and nonlinear, so the results of this analysis cannot be simply extrapolated for more severe changes in macroeconomic variables • the COVID-19 pandemic has stressed many MEVs at a speed and to degrees not seen in recent history, adding significantly higher degrees of uncertainty around modeled credit loss estimations • significant changes in the expected severity and duration of the economic downturn caused by the COVID-19 pandemic, the effects of government support and customer assistance, and the speed of the subsequent recovery could significantly affect the Firm’s estimate of expected credit losses irrespective of the estimated sensitivities described below. • An increase of approximately $700 million for residential real estate loans and lending-related commitments • An increase of approximately $5.1 billion for credit card loans • An increase of approximately $2.8 billion for wholesale loans and lending-related commitments JPMorgan Chase & Co./2020 Form 10-K December 31, 2020 (in billions, except ratios) Total assets at fair value Total level 3 assets Federal Funds sold and securities purchased under resale agreements $ 238.0  $ —  Securities borrowed 53.0  —  Trading assets: Trading debt and equity instruments $ 423.5  $ 2.6  Derivative receivables 79.6  7.7  Total trading assets 503.1  10.3  AFS securities 388.2  —  Loans 44.5  2.3  MSRs 3.3  3.3  Other 304.1  0.5  Total assets measured at fair value on a recurring basis 1,243.2  16.4  Total assets measured at fair value on a nonrecurring basis 3.6  2.0  Total assets measured at fair value $ 1,246.8  $ 18.4  Total Firm assets $ 3,386.1  Level 3 assets at fair value as a percentage of total Firm assets 0.5 % Level 3 assets at fair value as a percentage of total Firm assets at fair value 1.5 % (a) (a) 153