XML 34 R19.htm IDEA: XBRL DOCUMENT
v3.20.2

Other Investments | 6 Months Ended
--- | ---
Jun. 30, 2020
Investments, All Other Investments [Abstract] |
Other Investments | Other Investments Other investments at June 30, 2020 and December 31, 2019 are summarized in the following table. Table 10.1 – Components of Other Investments
(In Thousands) |  | June 30, 2020 |  | December 31, 2019
Servicer advance investments |  | $ | 266,948 |  |  | $ | 169,204 |
Shared home appreciation options |  | 40,851 |  |  | 45,085 |
Excess MSRs |  | 36,197 |  |  | 31,814 |
Mortgage servicing rights |  | 19,661 |  |  | 42,224 |
Investment in multifamily loan fund |  | 30,370 |  |  | 39,802 |
Other |  | 35,813 |  |  | 30,001 |
Total Other Investments |  | $ | 429,840 |  |  | $ | 358,130 |
Servicer advance investments In 2018, we and a third-party co-investor, through two partnerships (“SA Buyers”) consolidated by us, purchased the outstanding servicer advances and excess MSRs related to a portfolio of legacy residential mortgage-backed securitizations serviced by the co-investor (Refer to our Annual Report on Form 10-K for the year ended December 31, 2019 for additional information regarding the transaction). During the six months ended June 30, 2020, we funded additional purchases of outstanding servicer advances and excess MSRs under the same partnership structure. At June 30, 2020, we had funded $94 million of total capital to the SA Buyers (see Note 16 for additional detail). At June 30, 2020, our servicer advance investments had a carrying value of $267 million and were associated with a portfolio of residential mortgage loans with an unpaid principal balance of $10.26 billion. The outstanding servicer advance receivables associated with this investment were $250 million at June 30, 2020, which were financed with short-term non-recourse securitization debt (see Note 13 for additional detail on this debt). The servicer advance receivables were comprised of the following types of advances at June 30, 2020 and December 31, 2019. Table 10.2 – Components of Servicer Advance Receivables
(In Thousands) |  | June 30, 2020 |  | December 31, 2019
Principal and interest advances |  | $ | 82,719 |  |  | $ | 15,081 |
Escrow advances (taxes and insurance advances) |  | 118,260 |  |  | 96,732 |
Corporate advances |  | 48,726 |  |  | 39,769 |
Total Servicer Advance Receivables |  | $ | 249,705 |  |  | $ | 151,582 |
We account for our servicer advance investments at fair value and during the three and six months ended June 30, 2020, we recorded $3 million and $6 million, respectively, of interest income associated with these investments, and recorded net market valuation losses of $0.1 million and $6 million, respectively, through Investment fair value changes, net in our consolidated statements of income (loss). During the three and six months ended June 30, 2019, we recorded $3 million and $5 million, respectively, of interest income associated with these investments for each of these periods, and recorded net market valuation gains of $0.4 million and $1 million, respectively, through Investment fair value changes, net in our consolidated statements of income (loss). Mortgage Servicing Rights We invest in mortgage servicing rights associated with residential mortgage loans and contract with licensed sub-servicers to perform all servicing functions for these loans. The majority of our investments in MSRs were made through the retention of servicing rights associated with the residential jumbo mortgage loans that we acquired and subsequently transferred to third parties. We hold our MSR investments at our taxable REIT subsidiaries. At June 30, 2020 and December 31, 2019, our MSRs had a fair value of $20 million and $42 million, respectively, and were associated with loans with an aggregate principal balance of $3.63 billion and $4.35 billion, respectively. During the three and six months ended June 30, 2020, including net market valuation gains and losses on our MSRs and related risk management derivatives, we recorded net losses of $1 million and $3 million, respectively, through Other income on our consolidated statements of income (loss). During the three and six months ended June 30, 2019, we recognized $2 million of income, net for both periods through Other income on our consolidated statements of income (loss). Excess MSRs In association with our servicer advance investments described above, we (through our consolidated SA Buyers) invested in excess MSRs associated with the same portfolio of legacy residential mortgage-backed securitizations. Additionally, we own excess MSRs associated with specified pools of multifamily loans. We account for our excess MSRs at fair value and during the three and six months ended June 30, 2020, we recognized $3 million and $6 million of interest income, respectively, through Other interest income, and recorded a net market valuation gain of $3 million and a net market valuation loss of $7 million, respectively, through Investment fair value changes, net on our consolidated statements of income (loss). During the three and six months ended June 30, 2019, we recognized $2 million and $4 million of interest income, respectively, through Other interest income, and recorded net market valuation losses of $0.1 million and $0.5 million, respectively, through Investment fair value changes, net on our consolidated statements of income (loss). Investment in Multifamily Loan Fund In January 2019, we invested in a limited partnership created to acquire floating rate, light-renovation multifamily loans from Freddie Mac. We committed to fund an aggregate of $78 million to the partnership, and have funded approximately $70 million at June 30, 2020. During the three months ended March 31, 2020, we acquired $28 million of securities from the partnership's first securitization transaction. At June 30, 2020, the carrying amount of our investment in the partnership was $30 million. During the three and six months ended June 30, 2020, we recorded losses of $1 million and income of $0.3 million, respectively, associated with this investment in Other income on our consolidated statements of income (loss). During both the three and six months ended June 30, 2019, we recorded $0.1 million of losses associated with this investment in Other income on our consolidated statements of income (loss). Shared Home Appreciation Options In the third quarter of 2019, we entered into a flow purchase agreement to acquire shared home appreciation options. At June 30, 2020, we had acquired $47 million of shared home appreciation options under this flow purchase agreement and had an outstanding commitment to fund up to an additional $3 million under this agreement. We account for these investments under the fair value option and during the three and six months ended June 30, 2020, we recorded a net market valuation gain of $1 million and a net market valuation loss of $7 million, respectively, related to these assets through Investment fair value changes, net on our consolidated statements of income (loss).

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsAllOtherInvestmentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for investments and other noncurrent assets. + References No definition available. + Details
Name: | us-gaap_InvestmentsAndOtherNoncurrentAssetsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration