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Other Investments | 9 Months Ended
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Sep. 30, 2020
Investments, All Other Investments [Abstract] |
Other Investments | Other Investments Other investments at September 30, 2020 and December 31, 2019 are summarized in the following table. Table 10.1 – Components of Other Investments
(In Thousands) |  | September 30, 2020 |  | December 31, 2019
Servicer advance investments |  | $ | 258,621 |  |  | $ | 169,204 |
Shared home appreciation options |  | 41,758 |  |  | 45,085 |
Excess MSRs |  | 35,070 |  |  | 31,814 |
Mortgage servicing rights |  | 14,878 |  |  | 42,224 |
Investment in multifamily loan fund |  | (323) |  |  | 39,802 |
Other |  | 34,624 |  |  | 30,001 |
Total Other Investments |  | $ | 384,628 |  |  | $ | 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 nine months ended September 30, 2020, we funded additional purchases of outstanding servicer advances and excess MSRs under the same partnership structure. At September 30, 2020, we had funded $94 million of total capital to the SA Buyers (see Note 16 for additional detail). At September 30, 2020, our servicer advance investments had a carrying value of $259 million and were associated with a portfolio of residential mortgage loans with an unpaid principal balance of $9.71 billion. The outstanding servicer advance receivables associated with this investment were $242 million at September 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 September 30, 2020 and December 31, 2019. Table 10.2 – Components of Servicer Advance Receivables
(In Thousands) |  | September 30, 2020 |  | December 31, 2019
Principal and interest advances |  | $ | 88,370 |  |  | $ | 15,081 |
Escrow advances (taxes and insurance advances) |  | 115,352 |  |  | 96,732 |
Corporate advances |  | 38,337 |  |  | 39,769 |
Total Servicer Advance Receivables |  | $ | 242,059 |  |  | $ | 151,582 |
We account for our servicer advance investments at fair value and during the three and nine months ended September 30, 2020, we recorded $3 million and $8 million, respectively, of interest income associated with these investments, and recorded net market valuation gain of less than $0.1 million and a net market valuation loss of $6 million, respectively, through Investment fair value changes, net in our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recorded $3 million and $9 million, respectively, of interest income associated with these investments for each of these periods, and recorded net market valuation gains of $2 million and $3 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 September 30, 2020 and December 31, 2019, our MSRs had a fair value of $15 million and $42 million, respectively, and were associated with loans with an aggregate principal balance of $3.14 billion and $4.35 billion, respectively. During the three and nine months ended September 30, 2020, including net market valuation gains and losses on our MSRs and related risk management derivatives, we recorded net losses of $2 million and $6 million, respectively, through Other income on our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recognized $0.4 million and $2 million of income, net, respectively, 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 nine months ended September 30, 2020, we recognized $3 million and $9 million of interest income, respectively, through Other interest income, and recorded net market valuation losses of $1 million and $8 million, respectively, through Investment fair value changes, net on our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recognized $2 million and $6 million of interest income, respectively, through Other interest income, and recorded net market valuation losses of $2 million for both periods 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. At September 30, 2020, the carrying amount of our investment in the partnership was zero and we had no remaining funding obligations to the partnership. During the three and nine months ended September 30, 2020, we acquired $28 million and $56 million of securities, respectively, from the partnership's securitization transactions. During the three and nine months ended September 30, 2020, we recorded income of $0.3 million and $0.6 million, respectively, associated with this investment in Other income on our consolidated statements of income (loss). During the three and nine months ended September 30, 2019, we recorded $1 million and $0.5 million of income, respectively, 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 September 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 nine months ended September 30, 2020, we recorded a net market valuation gain of $2 million and a net market valuation loss of $4 million, respectively, related to these assets through Investment fair value changes, net on our consolidated statements of income (loss).

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