Note 4 — Loans Held for Sale



	Years Ended December 31,
Loans Held for Sale - Fair Value	2017			2016			2015
Beginning balance	$	284,632		$	309,054		$	401,120
Originations and purchases	2,678,372			4,211,871			3,944,509
Proceeds from sales	(2,785,422		)	(4,236,158		)	(4,061,217		)
Principal collections	(4,867		)	(11,620		)	(8,647		)
Transfers from Loans held for investment	3,803			—			—
Transfers from Loans held for sale - Lower of cost or fair value	—			3,266			1,200
Gain on sale of loans	35,429			13,421			42,053
Increase (decrease) in fair value of loans	151			(7,030		)	(9,066		)
Other	2,164			1,828			(898		)
Ending balance (1)	$	214,262		$	284,632		$	309,054


(1)	At December 31, 2017, 2016 and 2015, the balances include $5.0 million, $4.9 million and $11.9 million, respectively, of fair value adjustments.

At December 31, 2017, loans held for sale, at fair value with a UPB of $195.2 million were pledged as collateral to warehouse lines of credit in our Lending segment.



	Years Ended December 31,
Loans Held for Sale - Lower of Cost or Fair Value	2017			2016			2015
Beginning balance	$	29,374		$	104,992		$	87,492
Purchases	1,016,791			1,878,561			1,056,172
Proceeds from sales	(861,569		)	(1,699,427		)	(1,001,939		)
Principal collections	(10,207		)	(22,607		)	(53,400		)
Transfers to Receivables, net	(171,797		)	(256,336		)	(53,468		)
Transfers to Other assets	(875		)	(7,675		)	(18,594		)
Transfers to Loans held for sale - Fair value	—			(3,266		)	(1,200		)
Gain on sale of loans	11,683			24,565			43,449
Decrease in valuation allowance	2,746			4,594			35,018
Other	7,950			5,973			11,462
Ending balance (1)	$	24,096		$	29,374		$	104,992


(1)	At December 31, 2017, 2016 and 2015, the balances include $19.6 million, $24.8 million and $85.9 million, respectively, of loans that we were required to repurchase from Ginnie Mae guaranteed securitizations as part of our servicing obligations. Repurchased loans are modified or otherwise remediated through loss mitigation activities or are reclassified to receivables.

The changes in the valuation allowance are as follows:



	Years Ended December 31,
	2017			2016			2015
Beginning balance	$	10,064		$	14,658		$	49,676
Provision	3,109			3,599			(400		)
Transfer from Liability for indemnification obligations (Other liabilities)	3,246			2,368			1,180
Sales of loans	(9,415		)	(10,208		)	(37,776		)
Other	314			(353		)	1,978
Ending balance	$	7,318		$	10,064		$	14,658

At December 31, 2017, loans held for sale, at lower of cost or fair value with a UPB of $8.4 million were pledged as collateral to a warehouse line of credit in our Servicing segment.

In 2015, we recognized gains of $20.1 million on sales to third parties of loans with a total UPB of $75.7 million we had repurchased under representation and warranty provisions of our contractual obligations to the GSEs as primary servicer of the loans.



	Years Ended December 31,
Gains on Loans Held for Sale, Net	2017			2016			2015
Gain on sales of loans, net
MSRs retained on transfers of forward loans	$	20,900		$	36,049		$	35,968
Fair value gains related to transfers of reverse mortgage loans, net	50,194			24,742			31,857
Gain on sale of repurchased Ginnie Mae loans	11,683			24,565			22,960
Other, net	31,470			7,952			62,185
	114,247			93,308			152,970
Change in fair value of IRLCs	(3,089		)	(55		)	14
Change in fair value of loans held for sale	1,475			4,595			(8,525		)
Loss on economic hedge instruments	(8,529		)	(6,592		)	(8,675		)
Other	(702		)	(865		)	(815		)
	$	103,402		$	90,391		$	134,969