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Mortgage Servicing (Tables) | 12 Months Ended
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Dec. 31, 2014
Transfers and Servicing [Abstract] |
Summary of Activity in Carrying Value of Amortization Method Servicing Assets | Servicing Assets. The following tables summarize the activity in the carrying value of amortization method servicing assets for the years ended December 31. Amortization of mortgage servicing rights is reported net of the amortization of any servicing liabilities and includes the amount of charges we recognized to increase servicing liability obligations, if any.
|  | 2014 |  | 2013 |  | 2012
Beginning balance |  | $ | 1,953,352 |  |  | $ | 678,937 |  |  | $ | 293,152 |
Additions recognized in connection with business acquisitions : |  |  |  |  |  |  |  |
OSI |  | 9,008 |  |  | — |  |  | — |
ResCap Acquisition |  | 11,370 |  |  | 389,944 |  |  | — |
Liberty Acquisition |  | — |  |  | 2,840 |  |  | — |
Homeward Acquisition |  | — |  |  | — |  |  | 278,069 |
Additions recognized in connection with asset acquisitions: |  |  |  |  |  |
Ally MSR Transaction |  | — |  |  | 683,787 |  |  | — |
OneWest MSR Transaction (1) |  | 14,408 |  |  | 398,804 |  |  | — |
Greenpoint MSR Transaction (2) |  | 3,690 |  |  | 33,647 |  |  | — |
Saxon |  | — |  |  | — |  |  | 77,881 |
JPMorgan |  | — |  |  | — |  |  | 23,445 |
Bank of America |  | — |  |  | — |  |  | 64,569 |
Other |  | 17,228 |  |  | 8,764 |  |  | 16,084 |
Additions recognized on the sale of mortgage loans |  | 63,310 |  |  | 74,784 |  |  | — |
Sales (3) |  | (137 | ) |  | (28,403 | ) |  | — |
Servicing transfers and adjustments |  | (1,763 | ) |  | (8,883 | ) |  | (4 | )
Change in valuation allowance |  | — |  |  | 2,375 |  |  | (88 | )
Amortization |  | (250,375 | ) |  | (283,244 | ) |  | (74,171 | )
Ending balance |  | $ | 1,820,091 |  |  | $ | 1,953,352 |  |  | $ | 678,937 |
Estimated fair value at end of year |  | $ | 2,237,703 |  |  | $ | 2,441,719 |  |  | $ | 743,830 |
(1) | The OneWest MSR Transaction closed in stages, and the majority of loans were boarded onto our primary servicing platform as of December 31, 2013. MSRs acquired in the final closing of the OneWest MSR Transaction in 2014 relate to mortgage loans with a UPB of $1.1 billion and related servicing advances of $34.3 million. Total UPB and related servicing advances acquired in the OneWest MSR Transaction were $70.1 billion and $2.1 billion, respectively. No operations or other assets were purchased in the transaction. As part of the OneWest MSR Transaction, both the seller and OLS have agreed to indemnification provisions for the benefit of the other party.
(2) | The MSRs acquired in 2014 relate to mortgage loans with a UPB of $948.9 million and related servicing advances of $47.6 million. Total UPB and related servicing advances acquired were $7.3 billion and $469.7 million, respectively.
(3) | Cash proceeds from the 2013 sale were $34.8 million. These MSRs were sold with subservicing retained. The gain on the sale of $5.1 million has been deferred and will be recognized in earnings over the life of the subservicing contract.
Schedule of Estimated Amortization Expense for MSRs | The estimated amortization expense for MSRs is projected as follows over the next five years:
| Amortization Method MSRs as of December 31, 2014 (1) |  | Less: MSRs to be Measured at Fair Value as of January 1, 2015 (2) |  | Estimated Amortization Expense
2015 | $ | 222,006 |  |  | $ | 86,112 |  |  | $ | 135,894 |
2016 | 186,018 |  |  | 73,297 |  |  | 112,721 |
2017 | 174,097 |  |  | 65,527 |  |  | 108,570 |
2018 | 158,107 |  |  | 58,592 |  |  | 99,515 |
2019 | 138,495 |  |  | 52,402 |  |  | 86,093 |
(1) | Estimated amortization expense for all MSRs accounted for using the amortization method as of December 31, 2014, calculated based on assumptions used at December 31, 2014.
(2) | Estimated amortization expense attributed to non-Agency MSRs accounted for using the amortization method as of December 31, 2014 for which we subsequently elected to account for using the fair value measurement method effective January 1, 2015.
Summary of Activity Related to Fair Value Servicing Assets | The following table summarizes the activity related to fair value servicing assets for the years ended December 31:
| 2014 |  | 2013 |  | 2012
Beginning balance | $ | 116,029 |  |  | $ | 85,213 |  |  | $ | — |
Amount recognized in connection with the Homeward Acquisition | — |  |  | — |  |  | 82,275 |
Additions recognized on the sale of residential mortgage loans | — |  |  | — |  |  | 2,908 |
Changes in fair value (1): |  |  |  |  |
Changes in assumptions | (15,028 | ) |  | 44,199 |  |  | 30 |
Realization of cash flows and other changes | (7,100 | ) |  | (13,383 | ) |  | — |
Ending balance | $ | 93,901 |  |  | $ | 116,029 |  |  | $ | 85,213 |
(1) | Changes in fair value are recognized in Servicing and origination expense in the Consolidated Statements of Operations.
Summary of Estimated Change in the Value of MSRs Carried at Fair Value | The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of December 31, 2014 given hypothetical instantaneous parallel shifts in the yield curve:
| Adverse change in fair value
| 10% |  | 20%
Weighted average prepayment speeds | $ | (8,101 | ) |  | $ | (15,760 | )
Discount rate (Option-adjusted spread) | $ | (3,553 | ) |  | $ | (6,860 | )
Schedule of Composition of Primary Servicing and Subservicing Portfolios by Type of Property Serviced as Measured by UPB | The following table presents the composition of our primary servicing and subservicing portfolios by type of property serviced as measured by UPB. The servicing portfolio represents loans for which we own the MSRs while subservicing represents all other loans. The UPB of assets serviced for others are not included on our Consolidated Balance Sheets.
| Residential |  | Commercial |  | Total
UPB at December 31, 2012 |  |  |  |  |  |  |  |
Servicing (1) | $ | 175,762,161 |  |  | $ | — |  |  | $ | 175,762,161 |
Subservicing | 27,903,555 |  |  | 401,031 |  |  | 28,304,586 |
| $ | 203,665,716 |  |  | $ | 401,031 |  |  | $ | 204,066,747 |
UPB at December 31, 2013 |  |  |  |  |  |  |  |
Servicing (1) | $ | 397,546,635 |  |  | $ | — |  |  | $ | 397,546,635 |
Subservicing | 67,104,697 |  |  | 400,502 |  |  | 67,505,199 |
| $ | 464,651,332 |  |  | $ | 400,502 |  |  | $ | 465,051,834 |
UPB at December 31, 2014 |  |  |  |  |  |  |  |
Servicing (1) | $ | 361,288,281 |  |  | $ | — |  |  | $ | 361,288,281 |
Subservicing | 37,439,446 |  |  | 149,737 |  |  | 37,589,183 |
| $ | 398,727,727 |  |  | $ | 149,737 |  |  | $ | 398,877,464 |
(1) | Includes primary servicing UPB of $160.8 billion, $175.1 billion and $79.4 billion at December 31, 2014, 2013 and 2012, respectively, for which the Rights to MSRs have been sold.
Summary of Geographic Distributions of UPB and Count of Residential Loans and Real Estate Serviced | At December 31, 2014, the geographic distribution of the UPB and count of residential loans and real estate we serviced was as follows:
| Amount |  | Count
California | $ | 96,727,239 |  |  | 382,859 |
Florida | 31,922,669 |  |  | 212,623 |
New York | 28,113,154 |  |  | 118,661 |
New Jersey | 18,599,585 |  |  | 89,507 |
Texas | 17,149,095 |  |  | 175,210 |
Other | 206,215,985 |  |  | 1,507,178 |
| $ | 398,727,727 |  |  | 2,486,038 |
Schedule of Components of Servicing and Subservicing Fees | The following table presents the components of servicing and subservicing fees for the years ended December 31:
| 2014 |  | 2013 |  | 2012
Loan servicing and subservicing fees: |  |  |  |  |
Servicing | $ | 1,363,800 |  |  | $ | 1,246,882 |  |  | $ | 535,415 |
Subservicing | 128,797 |  |  | 146,605 |  |  | 45,713 |
| 1,492,597 |  |  | 1,393,487 |  |  | 581,128 |
Home Affordable Modification Program (HAMP) fees | 141,121 |  |  | 152,812 |  |  | 76,764 |
Late charges | 121,618 |  |  | 115,826 |  |  | 69,281 |
Loan collection fees | 33,983 |  |  | 31,022 |  |  | 15,960 |
Custodial accounts (float earnings) | 6,693 |  |  | 5,332 |  |  | 3,749 |
Other | 98,163 |  |  | 125,080 |  |  | 57,525 |
| $ | 1,894,175 |  |  | $ | 1,823,559 |  |  | $ | 804,407 |

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