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Mortgage Servicing (Tables)

12 Months Ended

Dec. 31, 2015

Transfers and Servicing [Abstract]

Summary of Activity in Carrying Value of Amortization Method Servicing Assets

Servicing Assets. The following table summarizes 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.

	2015				2014				2013
Beginning balance	$	1,820,091			$	1,953,352			$	678,937
Fair value election - transfer of MSRs carried at fair value (1)	(787,142		)		—				—
Additions recognized in connection with business acquisitions :
OSI	—				9,008				—
ResCap acquisition	—				11,370				389,944
Liberty acquisition	—				—				2,840
Additions recognized in connection with asset acquisitions:
Ally MSR transaction	—				—				683,787
OneWest MSR transaction	—				14,408				398,804
Greenpoint MSR transaction	—				3,690				33,647
Other	12,356				17,228				8,764
Additions recognized on the sale of mortgage loans	34,961				63,310				74,784
Sales (2)	(586,352		)		(137		)		(28,403		)
Servicing transfers and adjustments	—				(1,763		)		(8,883		)
	493,914				2,070,466				2,234,221
(Increase) decrease in impairment valuation allowance (3)	(17,341		)		—				2,375
Amortization	(99,194		)		(250,375		)		(283,244		)
Ending balance	$	377,379			$	1,820,091			$	1,953,352
Estimated fair value at end of year	$	461,555			$	2,237,703			$	2,441,719

(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, based on a different strategy for managing the risks of the underlying portfolio compared to our other MSR classes. 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 $9.4 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.

(2) We retained the subservicing on MSRs that we sold in 2013. The gain on the sale of $5.1 million was deferred and is recognized in earnings over the life of the subservicing contract.

(3) Impairment of MSRs is recognized in Servicing and origination expense in the Consolidated Statements of Operations.

Schedule of Estimated Amortization Expense for MSRs

The estimated amortization expense for MSRs, calculated based on assumptions used at December 31, 2015, is projected as follows over the next five years:

2016	$	46,723
2017	36,427
2018	38,564
2019	38,773
2020	34,425

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:

	2015												2014				2013
	Agency				Non-Agency				Total				Agency				Agency
Beginning balance	$	93,901			$	—			$	93,901			$	116,029			$	85,213
Fair value election - transfer of MSRs carried at amortized cost	—				787,142				787,142				—				—
Cumulative effect of fair value election	—				52,015				52,015				—				—
Sales	(70,930		)		(1,344		)		(72,274		)		—				—
Additions recognized on the sale of residential mortgage loans	—				1,007				1,007				—				—
Servicing transfers and adjustments	—				(2,428		)		(2,428		)		—				—
Changes in fair value (1):
Changes in valuation inputs or other assumptions	(639		)		10,684				10,045				(15,028		)		44,199
Realization of expected future cash flows and other changes	(7,261		)		(100,957		)		(108,218		)		(7,100		)		(13,383		)
Ending balance	$	15,071			$	746,119			$	761,190			$	93,901			$	116,029

(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, 2015 given hypothetical shifts in lifetime prepayments and yield assumptions:

	Adverse change in fair value
	10%				20%
Weighted average prepayment speeds	$	(65,518	)		$	(140,457	)
Discount rate (option-adjusted spread)	$	(17,407	)		$	(34,492	)

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 servicing rights 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, 2015
Servicing	$	230,132,729			$	—			$	230,132,729
Subservicing	20,833,383				105,268				20,938,651
	$	250,966,112			$	105,268			$	251,071,380
UPB at December 31, 2014
Servicing	$	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 December 31, 2013
Servicing	$	397,546,635			$	—			$	397,546,635
Subservicing	67,104,697				400,502				67,505,199
	$	464,651,332			$	400,502			$	465,051,834

Summary of Geographic Distributions of UPB and Count of Residential Loans and Real Estate Serviced

At December 31, 2015, the geographic distribution of the UPB and count of residential loans and real estate we serviced was as follows:

	Amount				Count
California	$	60,567,867			234,371
Florida	21,004,999				147,454
New York	20,735,251				86,951
New Jersey	11,495,328				55,175
Texas	11,393,316				127,397
Other	125,769,351				973,414
	$	250,966,112			1,624,762

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:

	2015				2014				2013
Loan servicing and subservicing fees:
Servicing	$	1,148,278			$	1,363,800			$	1,246,882
Subservicing	58,384				128,797				146,605
	1,206,662				1,492,597				1,393,487
Home Affordable Modification Program (HAMP) fees	135,036				141,121				152,812
Late charges	82,690				121,618				115,826
Loan collection fees	31,763				33,983				31,022
Custodial accounts (float earnings)	15,870				6,693				5,332
Other	59,776				98,163				125,080
	$	1,531,797			$	1,894,175			$	1,823,559

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