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Mortgage Servicing (Tables) | 3 Months Ended
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Mar. 31, 2016
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 three months ended March 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.
| 2016 |  | 2015
Beginning balance | $ | 377,379 |  |  | $ | 1,820,091 |
Fair value election - transfer of MSRs carried at fair value (1) | — |  |  | (787,142 | )
Additions recognized in connection with asset acquisitions | 4,263 |  |  | 3,267 |
Additions recognized on the sale of mortgage loans | 7,156 |  |  | 8,528 |
Sales | — |  |  | (65,627 | )
| 388,798 |  |  | 979,117 |
Amortization | (12,806 | ) |  | (38,494 | )
Increase in impairment valuation allowance (2) | (29,953 | ) |  | (17,769 | )
Ending balance | $ | 346,039 |  |  | $ | 922,854 |
Estimated fair value at end of period | $ | 390,970 |  |  | $ | 1,064,134 |
(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 $9.2 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.
(2) | Impairment of MSRs is recognized in Servicing and origination expense in the Unaudited Consolidated Statements of Operations.
Schedule of Activity Related to MSRs - Fair Value Measurement Method | The following table summarizes the activity related to fair value servicing assets for the three months ended March 31:
| 2016 |  | 2015
| Agency |  | Non-Agency |  | Total |  | Agency |  | Non-Agency |  | Total
Beginning balance | $ | 15,071 |  |  | $ | 746,119 |  |  | $ | 761,190 |  |  | $ | 93,901 |  |  | $ | — |  |  | $ | 93,901 |
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 | — |  |  | (142 | ) |  | (142 | ) |  | — |  |  | (947 | ) |  | (947 | )
Servicing transfers and adjustments | — |  |  | 419 |  |  | 419 |  |  | — |  |  | (1,139 | ) |  | (1,139 | )
Changes in fair value (1): |  |  |  |  |  |  |  |  |  |  |
Changes in valuation inputs or other assumptions | (2,709 | ) |  | (3,671 | ) |  | (6,380 | ) |  | (6,110 | ) |  | — |  |  | (6,110 | )
Realization of expected future cash flows and other changes | (351 | ) |  | (22,562 | ) |  | (22,913 | ) |  | (3,276 | ) |  | (23,789 | ) |  | (27,065 | )
Ending balance | $ | 12,011 |  |  | $ | 720,163 |  |  | $ | 732,174 |  |  | $ | 84,515 |  |  | $ | 813,282 |  |  | $ | 897,797 |
(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 March 31, 2016 given hypothetical shifts in lifetime prepayments and yield assumptions:
| Adverse change in fair value
| 10% |  | 20%
Weighted average prepayment speeds | $ | (77,665 | ) |  | $ | (150,075 | )
Discount rate (option-adjusted spread) | $ | (17,894 | ) |  | $ | (34,728 | )
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 servicing rights 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 March 31, 2016 |  |  |  |  |  |  |  |
Servicing | $ | 223,731,371 |  |  | $ | — |  |  | $ | 223,731,371 |
Subservicing | 13,349,665 |  |  | 136,473 |  |  | 13,486,138 |
| $ | 237,081,036 |  |  | $ | 136,473 |  |  | $ | 237,217,509 |
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 March 31, 2015 |  |  |  |  |  |  |  |
Servicing | $ | 337,125,187 |  |  | $ | — |  |  | $ | 337,125,187 |
Subservicing | 45,088,815 |  |  | 161,887 |  |  | 45,250,702 |
| $ | 382,214,002 |  |  | $ | 161,887 |  |  | $ | 382,375,889 |
Schedule of Components of Servicing and Subservicing Fees | The following table presents the components of servicing and subservicing fees for the three months ended March 31:
| 2016 |  | 2015
Loan servicing and subservicing fees: |  |  |
Servicing | $ | 238,638 |  |  | $ | 332,201 |
Subservicing | 7,239 |  |  | 18,341 |
| 245,877 |  |  | 350,542 |
Home Affordable Modification Program (HAMP) fees | 22,618 |  |  | 35,176 |
Late charges | 18,603 |  |  | 24,122 |
Loan collection fees | 7,129 |  |  | 9,563 |
Other | 3,269 |  |  | 27,138 |
| $ | 297,496 |  |  | $ | 446,541 |

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- Definition Tabular disclosure of the activity in the balance of servicing assets (including a description of where changes in fair value are reported in the statement of income for each period for which results of operations are presented), including but not limited to, the following: beginning and ending balances, additions (for instance, through purchases of servicing assets), disposals, changes in fair value during the period resulting from changes in inputs or assumptions used in the valuation model, other changes in fair value along with a description of those changes, and other changes that affect the balance along with a description of those changes. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 860 -SubTopic 50 -Section 50 -Paragraph 3 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=68078379&loc=d3e122625-111746 + Details
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