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Fair Value (Tables) | 9 Months Ended
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Sep. 30, 2014
Fair Value Disclosures [Abstract] |
Schedule of Fair Value Assets and Liabilities | The carrying amounts and the estimated fair values of our financial instruments and our nonfinancial assets measured at fair value on a recurring or non-recurring basis are as follows at the dates indicated:
|  |  | September 30, 2014 |  | December 31, 2013
| Level |  | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |
Loans held for sale: |  |  |  |  |  |  |  |  |
Loans held for sale, at fair value (a) | 2 |  | $ | 335,950 |  |  | $ | 335,950 |  |  | $ | 503,753 |  |  | $ | 503,753 |
Loans held for sale, at lower of cost or fair value (b) | 3 |  | 71,937 |  |  | 71,937 |  |  | 62,907 |  |  | 62,907 |
Total Loans held for sale |  |  | $ | 407,887 |  |  | $ | 407,887 |  |  | $ | 566,660 |  |  | $ | 566,660 |
Loans held for investment - Reverse mortgages, at fair value (a) | 3 |  | $ | 1,315,324 |  |  | $ | 1,315,324 |  |  | $ | 618,018 |  |  | $ | 618,018 |
Advances and match funded advances (c) | 3 |  | 3,346,865 |  |  | 3,346,865 |  |  | 3,443,215 |  |  | 3,443,215 |
Receivables, net (c) | 3 |  | 245,817 |  |  | 245,817 |  |  | 152,516 |  |  | 152,516 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Match funded liabilities (c) | 3 |  | $ | 2,035,639 |  |  | $ | 2,035,639 |  |  | $ | 2,364,814 |  |  | $ | 2,364,814 |
Financing liabilities: |  |  |  |  |  |  |  |  |
HMBS-related borrowings, at fair value (a) | 3 |  | $ | 1,236,094 |  |  | $ | 1,236,094 |  |  | $ | 615,576 |  |  | $ | 615,576 |
Financing liability - MSRs pledged (a) | 3 |  | 618,855 |  |  | 618,855 |  |  | 633,804 |  |  | 633,804 |
Other (c) | 3 |  | 202,541 |  |  | 206,261 |  |  | 17,593 |  |  | 17,593 |
Total Financing liabilities |  |  | $ | 2,057,490 |  |  | $ | 2,061,210 |  |  | $ | 1,266,973 |  |  | $ | 1,266,973 |
Other secured borrowings: |  |  |  |  |  |  |  |  |
Senior secured term loan (c) | 3 |  | $ | 1,276,142 |  |  | $ | 1,259,601 |  |  | $ | 1,284,901 |  |  | $ | 1,270,108 |
Other (c) | 3 |  | 390,285 |  |  | 390,285 |  |  | 492,768 |  |  | 492,768 |
Total Other secured borrowings |  |  | $ | 1,666,427 |  |  | $ | 1,649,886 |  |  | $ | 1,777,669 |  |  | $ | 1,762,876 |
Senior unsecured notes | 2 |  | $ | 350,000 |  |  | $ | 338,625 |  |  | $ | — |  |  | $ | — |
Derivative financial instruments (a): |  |  |  |  |  |  |  |  |  |  |  |  |
IRLCs | 2 |  | $ | 6,117 |  |  | $ | 6,117 |  |  | $ | 8,433 |  |  | $ | 8,433 |
Forward MBS trades | 1 |  | (1,089 | ) |  | (1,089 | ) |  | 6,905 |  |  | 6,905 |
Interest rate caps | 3 |  | 91 |  |  | 91 |  |  | 442 |  |  | 442 |
MSRs: |  |  |  |  |  |  |  |  |
MSRs, at fair value (a) | 3 |  | $ | 101,948 |  |  | $ | 101,948 |  |  | $ | 116,029 |  |  | $ | 116,029 |
MSRs, at amortized cost (c) | 3 |  | 1,856,818 |  |  | 2,364,393 |  |  | 1,953,352 |  |  | 2,441,719 |
Total MSRs |  |  | $ | 1,958,766 |  |  | $ | 2,466,341 |  |  | $ | 2,069,381 |  |  | $ | 2,557,748 |
(a) | Measured at fair value on a recurring basis.
(b) | Measured at fair value on a non-recurring basis.
(c) | Disclosed, but not carried, at fair value.
Reconciliation of Level 3 Assets | The following tables present a reconciliation of the changes in fair value of Level 3 assets and liabilities that we measure at fair value on a recurring basis for the three and nine months ended September 30. The information presented for 2013 has been revised to include Financing liability - MSRs pledged in conformity with the 2014 presentation of Level 3 assets and liabilities.
| Loans Held for Investment - Reverse Mortgages |  | Financing Liability - MSRs Pledged |  | HMBS-Related Borrowings |  | Derivative Financial Instruments, net |  | MSRs |  | Total
Three months ended September 30, 2014 |  |  |  |  |  |  |  |  |  |  |
Fair value at July 1, 2014 | $ | 1,107,626 |  |  | $ | (629,579 | ) |  | $ | (1,033,712 | ) |  | $ | 97 |  |  | $ | 104,220 |  |  | $ | (451,348 | )
Purchases, issuances, sales and settlements: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchases | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Issuances | 208,566 |  |  | — |  |  | (190,452 | ) |  | — |  |  | — |  |  | 18,114 |
Sales | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Settlements (1) | (27,592 | ) |  | 10,724 |  |  | 12,690 |  |  | — |  |  | (934 | ) |  | (5,112 | )
| 180,974 |  |  | 10,724 |  |  | (177,762 | ) |  | — |  |  | (934 | ) |  | 13,002 |
Total realized and unrealized gains and (losses): |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings | 26,724 |  |  | — |  |  | (24,620 | ) |  | (6 | ) |  | (1,338 | ) |  | 760 |
Included in Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
| 26,724 |  |  | — |  |  | (24,620 | ) |  | (6 | ) |  | (1,338 | ) |  | 760 |
Transfers in and / or out of Level 3 | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Fair value at September 30, 2014 | $ | 1,315,324 |  |  | $ | (618,855 | ) |  | $ | (1,236,094 | ) |  | $ | 91 |  |  | $ | 101,948 |  |  | $ | (437,586 | )
| Loans Held for Investment - Reverse Mortgages |  | Financing Liability - MSRs Pledged |  | HMBS-Related Borrowings |  | Derivative Financial Instruments, net |  | MSRs |  | Total
Three months ended September 30, 2013 |  |  |  |  |  |  |  |  |  |  |
Fair value at July 1, 2013 | $ | 76,649 |  |  | $ | (437,734 | ) |  | $ | (73,641 | ) |  | $ | 176 |  |  | $ | 97,163 |  |  | $ | (337,387 | )
Purchases, issuances, sales and settlements: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchases | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Issuances | 211,052 |  |  | (239,851 | ) |  | (206,714 | ) |  | — |  |  | — |  |  | (235,513 | )
Sales | — |  |  | — |  |  | — |  |  |  |  |  | — |  |  | — |
Settlements | (1,293 | ) |  | 17,764 |  |  | 1,021 |  |  | (176 | ) |  | — |  |  | 17,316 |
| 209,759 |  |  | (222,087 | ) |  | (205,693 | ) |  | (176 | ) |  | — |  |  | (218,197 | )
Total realized and unrealized gains and (losses): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings | 4,445 |  |  | — |  |  | (4,942 | ) |  | — |  |  | (225 | ) |  | (722 | )
Included in Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
| 4,445 |  |  | — |  |  | (4,942 | ) |  | — |  |  | (225 | ) |  | (722 | )
Transfers in and / or out of Level 3 | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Fair value at September 30, 2013 | $ | 290,853 |  |  | $ | (659,821 | ) |  | $ | (284,276 | ) |  | $ | — |  |  | $ | 96,938 |  |  | $ | (556,306 | )
| Loans Held for Investment - Reverse Mortgages |  | Financing Liability - MSRs Pledged |  | HMBS-Related Borrowings |  | Derivative Financial Instruments, net |  | MSRs |  | Total
Nine months ended September 30, 2014 |  |  |  |  |  |  |  |  |  |  |
Fair value at January 1, 2014 | $ | 618,018 |  |  | $ | (633,804 | ) |  | $ | (615,576 | ) |  | $ | 442 |  |  | $ | 116,029 |  |  | $ | (514,891 | )
Purchases, issuances, sales and settlements: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchases | — |  |  | — |  |  | — |  |  | 23 |  |  | — |  |  | 23 |
Issuances | 565,670 |  |  | — |  |  | (572,031 | ) |  | — |  |  | — |  |  | (6,361 | )
Transfer from loans held for sale, at fair value | 110,874 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 110,874 |
Sales | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Settlements (1) | (56,193 | ) |  | 14,949 |  |  | 25,725 |  |  | — |  |  | (934 | ) |  | (16,453 | )
| 620,351 |  |  | 14,949 |  |  | (546,306 | ) |  | 23 |  |  | (934 | ) |  | 88,083 |
Total realized and unrealized gains and (losses): (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings | 76,955 |  |  | — |  |  | (74,212 | ) |  | (374 | ) |  | (13,147 | ) |  | (10,778 | )
Included in Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
| 76,955 |  |  | — |  |  | (74,212 | ) |  | (374 | ) |  | (13,147 | ) |  | (10,778 | )
Transfers in and / or out of Level 3 | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Fair value at September 30, 2014 | $ | 1,315,324 |  |  | $ | (618,855 | ) |  | $ | (1,236,094 | ) |  | $ | 91 |  |  | $ | 101,948 |  |  | $ | (437,586 | )
| Loans Held for Investment - Reverse Mortgages |  | Financing Liability - MSRs Pledged |  | HMBS-Related Borrowings |  | Derivative Financial Instruments, net |  | MSRs |  | Total
Nine months ended September 30, 2013 |  |  |  |  |  |  |  |  |  |  |
Fair value at January 1, 2013 | $ | — |  |  | $ | (303,705 | ) |  | $ | — |  |  | $ | (10,668 | ) |  | $ | 85,213 |  |  | $ | (229,160 | )
Purchases, issuances, sales and settlements: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchases | 10,251 |  |  | — |  |  | (10,179 | ) |  | — |  |  | — |  |  | 72 |
Issuances | 274,081 |  |  | (388,473 | ) |  | (272,652 | ) |  | — |  |  | — |  |  | (387,044 | )
Sales | — |  |  | — |  |  | — |  |  | 24,156 |  |  | — |  |  | 24,156 |
Settlements | (2,164 | ) |  | 32,357 |  |  | 1,888 |  |  | (1,242 | ) |  | — |  |  | 30,839 |
| 282,168 |  |  | (356,116 | ) |  | (280,943 | ) |  | 22,914 |  |  | — |  |  | (331,977 | )
Total realized and unrealized gains and (losses): |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings | 8,685 |  |  | — |  |  | (3,333 | ) |  | 117 |  |  | 11,725 |  |  | 17,194 |
Included in Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | (12,363 | ) |  | — |  |  | (12,363 | )
| 8,685 |  |  | — |  |  | (3,333 | ) |  | (12,246 | ) |  | 11,725 |  |  | 4,831 |
Transfers in and / or out of Level 3 | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Fair value at September 30, 2013 | $ | 290,853 |  |  | $ | (659,821 | ) |  | $ | (284,276 | ) |  | $ | — |  |  | $ | 96,938 |  |  | $ | (556,306 | )
(1) | In the event of a transfer of servicing to another party related to Rights to MSRs sold to HLSS, we are required to reimburse HLSS at predetermined contractual rates for the loss of servicing revenues. Settlements for Financing liability - MSRs pledged for the three and nine months ended September 30, 2014 includes $2.0 million of such reimbursements.
(2) | Total losses attributable to derivative financial instruments still held at September 30, 2014 were $0.4 million for the nine months ended September 30, 2014.
Schedule of Assumptions for Fair Value | Other assumptions typically used in the internal valuation are:
• | Cost of servicing | • | Interest rate used for computing float earnings
• | Discount rate | • | Compensating interest expense
• | Interest rate used for computing the cost of financing servicing advances | • | Collection rate of other ancillary fees

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