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Mortgage Servicing (Tables) | 9 Months Ended
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Sep. 30, 2015
Transfers and Servicing [Abstract] |
Schedule of Activity Related to MSRs - Amortization Method | The following table summarizes the activity in the carrying value of amortization method servicing assets for the nine months ended September 30. 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.
|  | 2015 |  | 2014
Beginning balance |  | $ | 1,820,091 |  |  | $ | 1,953,352 |
Fair value election - transfer to MSRs carried at fair value (1) |  | (787,142 | ) |  | — |
Additions recognized in connection with business acquisitions |  | — |  |  | 20,378 |
Additions recognized in connection with asset acquisitions |  | 10,055 |  |  | 19,338 |
Additions recognized on the sale of mortgage loans |  | 27,791 |  |  | 50,480 |
Sales |  | (591,605 | ) |  | (137 | )
Servicing transfers and adjustments |  | — |  |  | (518 | )
|  | 479,190 |  |  | 2,042,893 |
Amortization |  | (88,188 | ) |  | (186,075 | )
Impairment |  | (25,051 | ) |  | — |
Ending balance |  | $ | 365,951 |  |  | $ | 1,856,818 |
Estimated fair value at end of period |  | $ | 404,533 |  |  | $ | 2,364,393 |
(1) | Effective January 1, 2015, we elected fair value accounting for a newly-created class of non-Agency MSRs, which were previously accounted for using the amortization method. This irrevocable election applies to all subsequently acquired or originated servicing assets and liabilities that have characteristics consistent with this class. We recorded a cumulative-effect adjustment of $52.0 million (before deferred income taxes of $9.2 million) to retained earnings as of January 1, 2015 to reflect the excess of the fair value of these MSRs over their carrying amount. At December 31, 2014, the UPB of the loans related to the non-Agency MSRs for which the fair value election was made was $195.3 billion.
Schedule of Activity Related to MSRs - Fair Value Measurement Method | The following table summarizes the activity related to fair value servicing assets for the nine months ended September 30:
| 2015 |  | 2014
| Agency | Non-Agency | Total |  | Agency
Beginning balance | $ | 93,901 |  | $ | — |  | $ | 93,901 |  |  | $ | 116,029 |
Fair value election - transfer from MSRs carried at amortized cost | — |  | 787,142 |  | 787,142 |  |  | — |
Cumulative effect of fair value election | — |  | 52,015 |  | 52,015 |  |  | — |
Sales | (70,084 | ) | (1,234 | ) | (71,318 | ) |  | — |
Servicing transfers and adjustments | — |  | (1,139 | ) | (1,139 | ) |  | (934 | )
Changes in fair value (1): |  |  |  |  |
Changes in valuation inputs or other assumptions | (2,592 | ) | 12,031 |  | 9,439 |  |  | (12,217 | )
Realization of expected future cash flows and other changes | (6,808 | ) | (75,888 | ) | (82,696 | ) |  | (930 | )
Ending balance | $ | 14,417 |  | $ | 772,927 |  | $ | 787,344 |  |  | $ | 101,948 |
(1) | Changes in fair value are recognized in Servicing and origination expense in the Unaudited Consolidated Statements of Operations.
Schedule of Estimated Change in Fair Value of MSRs | The following table summarizes the estimated change in the value of the MSRs that we carry at fair value as of September 30, 2015 given hypothetical shifts in lifetime prepayments and yield assumptions:
| Adverse change in fair value
| 10% |  | 20%
Weighted average prepayment speeds | $ | (68,927 | ) |  | $ | (145,410 | )
Discount rate (option-adjusted spread) | $ | (21,359 | ) |  | $ | (39,902 | )
Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced | 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 Unaudited Consolidated Balance Sheets.
| Residential |  | Commercial |  | Total
UPB at September 30, 2015 |  |  |  |  |  |  |  |
Servicing (1) | $ | 238,108,447 |  |  | $ | — |  |  | $ | 238,108,447 |
Subservicing | 49,960,702 |  |  | 180,877 |  |  | 50,141,579 |
| $ | 288,069,149 |  |  | $ | 180,877 |  |  | $ | 288,250,026 |
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 |
UPB at September 30, 2014 |  |  |  |  |  |  |  |
Servicing (1) | $ | 360,919,248 |  |  | $ | — |  |  | $ | 360,919,248 |
Subservicing | 50,360,366 |  |  | 216,111 |  |  | 50,576,477 |
| $ | 411,279,614 |  |  | $ | 216,111 |  |  | $ | 411,495,725 |
(1) | Includes primary servicing UPB of $146.0 billion, $160.8 billion and $160.8 billion at September 30, 2015, December 31, 2014 and September 30, 2014, respectively, for which the Rights to MSRs have been sold to NRZ.
Schedule of Components of Servicing and Subservicing Fees | The following table presents the components of servicing and subservicing fees for the three and nine months ended September 30:
| Three Months |  | Nine Months
| 2015 |  | 2014 |  | 2015 |  | 2014
Loan servicing and subservicing fees: |  |  |  |  |  |  |
Servicing | $ | 274,089 |  |  | $ | 331,794 |  |  | $ | 879,098 |  |  | $ | 1,039,033 |
Subservicing | 14,354 |  |  | 30,926 |  |  | 72,968 |  |  | 95,509 |
| 288,443 |  |  | 362,720 |  |  | 952,066 |  |  | 1,134,542 |
Home Affordable Modification Program (HAMP) fees | 32,318 |  |  | 37,644 |  |  | 108,698 |  |  | 111,000 |
Late charges | 19,162 |  |  | 27,634 |  |  | 63,557 |  |  | 97,002 |
Loan collection fees | 6,682 |  |  | 8,655 |  |  | 25,176 |  |  | 25,573 |
Custodial accounts (float earnings) | 836 |  |  | 1,831 |  |  | 4,633 |  |  | 5,235 |
Other | 12,576 |  |  | 27,480 |  |  | 49,411 |  |  | 74,744 |
| $ | 360,017 |  |  | $ | 465,964 |  |  | $ | 1,203,541 |  |  | $ | 1,448,096 |

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