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Credit Enhancement Receivable, Contingent Liability and Credit Enhancement Deposit | 3 Months Ended
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Mar. 31, 2018
Credit Enhancement Receivable Contingent Liability And Credit Enhancement Deposit [Abstract] |
Credit Enhancement Receivable, Contingent Liability and Credit Enhancement Deposit |
(11) | Credit Enhancement Receivable, Contingent Liability and Credit Enhancement Deposit
Newmark is a party to a Credit Enhancement Agreement (“CEA”), dated March 9, 2012, with German American Capital Corporation and Deutsche Bank Americas Holding Corporation (together, the “DB Entities”). On October 20, 2016, the DB Entities assigned the CEA to Deutsche Bank AG Cayman Island Branch, a Cayman Island Branch of Deutsche Bank AG (“DB Cayman”). Under the terms of these agreements, DB Cayman provides Newmark with varying levels of ongoing credit protection, subject to certain limits, for Fannie Mae and Freddie Mac loans subject to loss sharing (see Note 21—Financial Guarantee Liability) in Newmark’s servicing portfolio as of March 9, 2012. DB Cayman will also reimburse Newmark for any losses incurred due to violation of underwriting and serving agreements that occurred prior to March 9, 2012. For the three months ended March 31, 2018 and 2017 there were no reimbursements under this agreement. Credit enhancement receivable At March 31, 2018, Newmark had $18.9 billion of credit risk loans in its servicing portfolio with a maximum pre-credit enhancement loss exposure of $5.4 billion. Newmark had a form of credit protection from DB Cayman on $0.4 billion of credit risk loans with a maximum loss exposure coverage of $0.1 billion. The amount of the maximum loss exposure without any form of credit protection from DB Cayman was $5.3 billion. At December 31, 2017, Newmark had $18.8 billion of credit risk loans in its servicing portfolio with a maximum pre-credit enhancement loss exposure of $5.3 billion. Newmark had a form of credit protection from DB Cayman on $4.2 billion of credit risk loans with a maximum loss exposure coverage of $1.2 billion. The amount of the maximum loss exposure without any form of credit protection from DB Cayman was $4.1 billion. As of March 31, 2018, there was no credit enhancement receivable. Credit enhancement receivables as December 31, 2017 were $10 thousand are included in “Other assets” in Newmark’s unaudited condensed consolidated balance sheets. Credit enhancement deposit The CEA required the DB Entities to deposit $25 million into Newmark’s Fannie Mae restricted liquidity account (see Note 8—Capital and Liquidity Requirements), which Newmark is required to return to DB Cayman, less any outstanding claims, on March 9, 2021. The $25 million deposit is included in “Restricted cash” and the offsetting liability in “Other long-term liabilities” in Newmark’s unaudited condensed consolidated balance sheets. Contingent liability Under the CEA, Newmark is required to pay DB Cayman, on March 9, 2021, an amount equal to 50% of the positive difference, if any, between (a) $25 million, and (b) Newmark’s unreimbursed loss-sharing payments from March 9, 2012 through March 9, 2021 on Newmark’s servicing portfolio as of March 9, 2012. Contingent liabilities as of March 31, 2018 and December 31, 2017 were $10.7 million and $10.7 million, respectively and are included in “Other liabilities” in Newmark’s unaudited condensed consolidated balance sheets.

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- Definition Credit enhancement receivable contingent liability and credit enhancement deposit. + References No definition available. + Details
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- Definition Credit enhancement receivable contingent liability and credit enhancement deposit. + References No definition available. + Details
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