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Mortgage Loans Held for Sale and Investment | 9 Months Ended
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Sep. 30, 2019
Mortgage Loans Held for Sale and Investment [Abstract] |
Mortgage Loans Held for Sale and Investment | 6. Mortgage Loans Held for Sale and Investment Mortgage Loans Held for Sale The Company maintains a strategy of originating and purchasing residential mortgage loan products primarily for the purpose of selling to GSEs or other third-party investors in the secondary market on a servicing-retained basis. The Company purchases closed loans through its correspondent channel and assists customers currently in the Company’s servicing portfolio with refinancing of loans or new home purchases through its Direct to Consumer channel. Generally, all newly originated mortgage loans held for sale are securitized and transferred to GSEs or delivered to third-party purchasers shortly after origination on a servicing-retained basis. Mortgage loans held for sale are recorded at fair value as set forth below.
| Successor
| September 30, 2019 |  | December 31, 2018
Mortgage loans held for sale – UPB | $ | 4,110 |  |  | $ | 1,568 |
Mark-to-market adjustment(1) | 157 |  |  | 63 |
Total mortgage loans held for sale | $ | 4,267 |  |  | $ | 1,631 |
(1) | The mark-to-market adjustment is recorded in net gain on mortgage loans held for sale in the consolidated statements of operations.
The Company accrues interest income as earned and places loans on non-accrual status after any portion of principal or interest has been delinquent for more than 90 days. Accrued interest is recorded as interest income in the consolidated statements of operations. The total UPB of mortgage loans held for sale on non-accrual status was as follows:
| Successor
| September 30, 2019 |  | December 31, 2018
Mortgage Loans Held for Sale - UPB | UPB |  | Fair Value |  | UPB |  | Fair Value
Non-accrual(1) | $ | 31 |  |  | $ | 26 |  |  | $ | 45 |  |  | $ | 42 |
(1) | Non-accrual includes $26 and $40 of UPB related to Ginnie Mae repurchased loans as of September 30, 2019 and December 31, 2018, respectively.
The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $21 and $33 as of September 30, 2019 and December 31, 2018, respectively. The following table sets forth the activities of mortgage loans held for sale.
| Successor |  |  | Predecessor
Mortgage loans held for sale | Nine Months Ended September 30, 2019 |  | Two Months Ended September 30, 2018 |  |  | Seven Months Ended July 31, 2018
Balance - beginning of period | $ | 1,631 |  |  | $ | 1,514 |  |  |  | $ | 1,891 |
Mortgage loans originated and purchased, net of fees(1) | 28,199 |  |  | 3,459 |  |  |  | 12,319 |
Loans sold | (27,430 | ) |  | (3,508 | ) |  |  | (13,255 | )
Repurchase of loans out of Ginnie Mae securitizations | 1,823 |  |  | 223 |  |  |  | 544 |
Net transfers of mortgage loans held for sale to/from REO in other assets and transfer from mortgage loans held for investment(2)(3) | 15 |  |  | 4 |  |  |  | 14 |
Changes in fair value | 19 |  |  | (8 | ) |  |  | (1 | )
Other purchase-related activities(4) | 10 |  |  | (1 | ) |  |  | 9 |
Transfer of mortgage loans held for sale to advances and other receivables, net related to claims(5) | — |  |  | (2 | ) |  |  | (7 | )
Balance - end of period | $ | 4,267 |  |  | $ | 1,681 |  |  |  | $ | 1,514 |
(1) | Mortgage loans originated and purchased during the nine months ended September 30, 2019 includes $536 of loans held for sale that were acquired from Pacific Union. See Note 2, Acquisitions for further discussion.
(2) | Net amounts are comprised of REO in the sales process, which are transferred to other assets, and certain government insured mortgage REO, which are transferred from other assets upon completion of the sale so that the claims process can begin.
(3) | Amount for the nine months ended September 30, 2019 includes $12 transfer from mortgage loans held for investment upon collapse of Trust 2009-A, the Company’s legacy portfolio, and sale of the loans held in the trust. See mortgage loans held for investment discussed in section below for additional information.
(4) | Amounts are comprised primarily of non-Ginnie Mae loan purchases and buyouts.
(5) | Amounts are comprised of claims made on certain government insured mortgage loans upon completion of the REO sale.
For the nine months ended September 30, 2019 and two months ended September 30, 2018, the Company received proceeds of $27,778 and $3,543 respectively, on the sale of mortgage loans held for sale, resulting in gains of $367 and $35, respectively. For the seven months ended July 31, 2018, the Predecessor received proceeds of $13,382 on the sale of mortgage loans held for sale, resulting in gains of $127. The Company has the right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased in connection with loan modifications and loan resolution activity, with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. Therefore, these loans are classified as held for sale. Mortgage Loans Held for Investment In September 2019, the Company collapsed Trust 2009-A, its legacy portfolio, and executed the sale of the loans held in the trust for a total purchase price of $130. The Company recognized a gain of $32, which was recorded in the net gain on mortgage loans held for sale in the consolidated statements of operations. $21 and $11 of the gain were recorded in the Servicing and Corporate/Other segments, respectively. In connection with this transaction, $94 UPB of the mortgage loans held for investment was called and the related debt was extinguished. The Company transferred the remaining $12 UPB to mortgage loans held for sale and $5 UPB to real estate owned. The following table sets forth the activities of mortgage loans held for investment.
| Successor
Mortgage loans held for investment at fair value | Nine Months Ended September 30, 2019 |  | Two Months Ended September 30, 2018
Balance - beginning of period | $ | 119 |  |  | $ | 125 |
Sale of mortgage loans | (94 | ) |  | — |
Transfers to mortgage loans held for sale | (12 | ) |  | — |
Payments received from borrowers | (11 | ) |  | (2 | )
Transfers to real estate owned | (5 | ) |  | — |
Changes in fair value(1) | 3 |  |  | — |
Losses incurred | — |  |  | (1 | )
Balance - end of period | $ | — |  |  | $ | 122 |
(1) | The changes in fair value during the two months ended September 30, 2018, is less than $1.
The following sets forth the composition of mortgage loans held for investment as of December 31, 2018.
| Successor
| December 31, 2018
Mortgage loans held for investment – UPB | $ | 156 |
Fair value adjustments | (37 | )
Total mortgage loans held for investment at fair value | $ | 119 |
The total UPB of mortgage loans held for investment on non-accrual status was as follows.
| Successor
| December 31, 2018
Mortgage Loans Held for Investment - UPB | UPB |  | Fair Value
Non-accrual | $ | 27 |  |  | $ | 13 |
The total UPB of mortgage loans held for investment for which the Company has begun formal foreclosure proceedings was $15 as of December 31, 2018.

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