Note 10 – Other Assets

Other assets consisted of the following at the dates indicated:



	June 30, 2016		December 31, 2015
Contingent loan repurchase asset (1)	$	253,793	$	346,984
Debt service accounts (2)	59,155		87,328
Prepaid expenses (3)	56,414		69,805
Derivatives, at fair value	14,776		6,367
Prepaid income taxes	10,071		11,749
Prepaid lender fees and debt issuance costs, net	10,265		19,496
Mortgage backed securities, at fair value	9,063		7,985
Real estate	7,359		20,489
Other	27,841		16,292
	$	448,737	$	586,495

(1)

In connection with the Ginnie Mae early buy-out (EBO) program, our agreements provide either that: (a) we have the right, but not the obligation, to repurchase previously transferred mortgage loans under certain conditions, including the mortgage loans becoming eligible for pooling under a program sponsored by Ginnie Mae; or (b) we have the obligation to repurchase previously transferred mortgage loans that have been subject to a successful trial modification before any permanent modification is made. Once these conditions are met, we have effectively regained control over the mortgage loan(s), and under GAAP, must re-recognize the loans on our consolidated balance sheets and establish a corresponding repurchase liability. With respect to those loans that we have the right, but not the obligation, to repurchase under the applicable agreement, this requirement applies regardless of whether we have any intention to repurchase the loan. We re-recognize mortgage loans in Other assets and a corresponding liability in Other liabilities.

(2)

Under our advance funding financing facilities, we are contractually required to remit collections on pledged advances to the trustee within two days of receipt. The collected funds are not applied to reduce the related match funded debt until the payment dates specified in the indenture. The balances also include amounts that have been set aside from the proceeds of our match funded advance facilities to provide for possible shortfalls in the funds available to pay certain expenses and interest, as well as amounts set aside as required by our warehouse facilities as security for our obligations under the related agreements. The funds are held in interest earning accounts and those amounts related to match funded facilities are held in the name of the SPE created in connection with the facility.


(3)	In connection with the sale of Agency MSRs in 2015, we placed $52.9 million in escrow for the payment of representation, warranty and indemnification claims associated with the underlying loans. Prepaid expenses at June 30, 2016 and December 31, 2015 includes the remaining balance of $37.1 million and $41.3 million, respectively.