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Business Segment Reporting | 6 Months Ended
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Jun. 30, 2018
Segment Reporting [Abstract] |
Business Segment Reporting | Note 17 – Business Segment Reporting Our business segments reflect the internal reporting that we use to evaluate operating performance of services and to assess the allocation of our resources. A brief description of our current business segments is as follows: Servicing. This segment is primarily comprised of our core residential servicing business. We provide residential and commercial mortgage loan servicing, special servicing and asset management services. We earn fees for providing these services to owners of the mortgage loans and foreclosed real estate. In most cases, we provide these services either because we purchased the MSRs from the owner of the mortgage, retained the MSRs on the sale of residential mortgage loans or because we entered into a subservicing or special servicing agreement with the entity that owns the MSR. Our residential servicing portfolio includes conventional, government-insured and non-Agency loans. Non-Agency loans include subprime loans, which represent residential loans that generally did not qualify under GSE guidelines or have subsequently become delinquent. Lending. The Lending segment originates conventional and government-insured residential forward and reverse mortgage loans through correspondent lending arrangements, broker relationships (wholesale) and directly with mortgage customers (retail). The loans are typically sold shortly after origination into a liquid market on a servicing retained (securitization) or servicing released (sale to a third party) basis. In 2017, we closed our forward correspondent lending channel and exited the forward wholesale lending business. We continue to originate loans through our forward retail lending channel as well as through all three channels of reverse mortgage lending. Corporate Items and Other. Corporate Items and Other includes revenues and expenses of CR Limited (CRL), our wholly-owned captive reinsurance subsidiary, and our other business activities that are individually insignificant, revenues and expenses that are not directly related to other reportable segments, interest income on short-term investments of cash, interest expense on corporate debt and certain corporate expenses. Our cash balances are included in Corporate Items and Other. CRL provides re-insurance related to coverage on foreclosed real estate properties owned or serviced by us. In January 2018, we decided to exit the ACS business and have liquidated the majority of our portfolio of inventory-secured loans to independent used car dealers. We allocate a portion of interest income to each business segment, including interest earned on cash balances and short-term investments. We also allocate expenses incurred by corporate support services to each business segment. Financial information for our segments is as follows:
| Three Months Ended June 30, 2018
Results of Operations | Servicing |  | Lending |  | Corporate Items and Other |  | Corporate Eliminations |  | Business Segments Consolidated
Revenue | $ | 230,509 |  |  | $ | 19,002 |  |  | $ | 4,070 |  |  | $ | — |  |  | $ | 253,581 |
Expenses (1) | 166,888 |  |  | 17,785 |  |  | 20,977 |  |  | — |  |  | 205,650 |
Other income (expense): |  |  |  |  |  |  |  |  |
Interest income | 1,466 |  |  | 1,360 |  |  | 529 |  |  | — |  |  | 3,355 |
Interest expense | (62,675 | ) |  | (1,472 | ) |  | (13,356 | ) |  | — |  |  | (77,503 | )
Gain on sale of mortgage servicing rights, net | 77 |  |  | — |  |  | 1 |  |  | — |  |  | 78 |
Other | (403 | ) |  | 294 |  |  | (2,157 | ) |  | — |  |  | (2,266 | )
Other income (expense), net | (61,535 | ) |  | 182 |  |  | (14,983 | ) |  | — |  |  | (76,336 | )
Income (loss) before income taxes | $ | 2,086 |  |  | $ | 1,399 |  |  | $ | (31,890 | ) |  | $ | — |  |  | $ | (28,405 | )
| Three Months Ended June 30, 2017
Results of Operations | Servicing |  | Lending |  | Corporate Items and Other |  | Corporate Eliminations |  | Business Segments Consolidated
Revenue | $ | 271,784 |  |  | $ | 32,776 |  |  | $ | 6,740 |  |  | $ | — |  |  | $ | 311,300 |
Expenses | 201,928 |  |  | 32,886 |  |  | 45,666 |  |  | — |  |  | 280,480 |
Other income (expense): |  |  |  |  |  |  |  |  |
Interest income | 174 |  |  | 3,007 |  |  | 1,058 |  |  | — |  |  | 4,239 |
Interest expense | (63,903 | ) |  | (3,383 | ) |  | (13,842 | ) |  | — |  |  | (81,128 | )
Gain on sale of mortgage servicing rights, net | 1,033 |  |  | — |  |  | — |  |  | — |  |  | 1,033 |
Other | 2,058 |  |  | (128 | ) |  | 1,498 |  |  | — |  |  | 3,428 |
Other expense, net | (60,638 | ) |  | (504 | ) |  | (11,286 | ) |  | — |  |  | (72,428 | )
Income (loss) before income taxes | $ | 9,218 |  |  | $ | (614 | ) |  | $ | (50,212 | ) |  | $ | — |  |  | $ | (41,608 | )
| Six months ended June 30, 2018
Revenue | $ | 456,605 |  |  | $ | 48,197 |  |  | $ | 9,036 |  |  | $ | — |  |  | $ | 513,838 |
Expenses (1) | 337,984 |  |  | 38,081 |  |  | 36,086 |  |  | — |  |  | 412,151 |
Other income (expense): |  |  |  |  |  |  |  |  |
Interest income | 1,894 |  |  | 2,852 |  |  | 1,309 |  |  | — |  |  | 6,055 |
Interest expense | (97,193 | ) |  | (3,417 | ) |  | (27,703 | ) |  | — |  |  | (128,313 | )
Gain on sale of mortgage servicing rights, net | 1,036 |  |  | — |  |  | — |  |  | — |  |  | 1,036 |
Other | (1,790 | ) |  | 620 |  |  | (2,735 | ) |  | — |  |  | (3,905 | )
Other income (expense), net | (96,053 | ) |  | 55 |  |  | (29,129 | ) |  | — |  |  | (125,127 | )
Income (loss) before income taxes | $ | 22,568 |  |  | $ | 10,171 |  |  | $ | (56,179 | ) |  | $ | — |  |  | $ | (23,440 | )
| Six months ended June 30, 2017
Revenue | $ | 555,802 |  |  | $ | 63,522 |  |  | $ | 13,840 |  |  | $ | — |  |  | $ | 633,164 |
Expenses | 418,842 |  |  | 62,217 |  |  | 75,804 |  |  | — |  |  | 556,863 |
Other income (expense): |  |  |  |  |  |  |  |  |
Interest income | 261 |  |  | 5,754 |  |  | 1,987 |  |  | — |  |  | 8,002 |
Interest expense | (131,254 | ) |  | (6,667 | ) |  | (27,269 | ) |  | — |  |  | (165,190 | )
Gain on sale of mortgage servicing rights, net | 1,320 |  |  | — |  |  | — |  |  | — |  |  | 1,320 |
Other | 5,060 |  |  | 103 |  |  | 2,298 |  |  | — |  |  | 7,461 |
Other expense, net | (124,613 | ) |  | (810 | ) |  | (22,984 | ) |  | — |  |  | (148,407 | )
Income (loss) before income taxes | $ | 12,347 |  |  | $ | 495 |  |  | $ | (84,948 | ) |  | $ | — |  |  | $ | (72,106 | )
Total Assets |  | Servicing |  | Lending |  | Corporate Items and Other |  | Corporate Eliminations |  | Business Segments Consolidated
June 30, 2018 |  | $ | 2,851,910 |  |  | $ | 5,242,716 |  |  | $ | 325,570 |  |  | $ | — |  |  | $ | 8,420,196 |
December 31, 2017 |  | $ | 3,033,243 |  |  | $ | 4,945,456 |  |  | $ | 424,465 |  |  | $ | — |  |  | $ | 8,403,164 |
June 30, 2017 |  | $ | 2,975,458 |  |  | $ | 4,483,652 |  |  | $ | 473,282 |  |  | $ | — |  |  | $ | 7,932,392 |
Depreciation and Amortization Expense |  | Servicing |  | Lending |  | Corporate Items and Other |  | Business Segments Consolidated
Three months ended June 30, 2018
Depreciation expense |  | $ | 1,256 |  |  | $ | 25 |  |  | $ | 4,834 |  |  | $ | 6,115 |
Amortization of debt discount |  | — |  |  | — |  |  | 442 |  |  | 442 |
Amortization of debt issuance costs |  | — |  |  | — |  |  | 1,005 |  |  | 1,005 |
Three months ended June 30, 2017
Depreciation expense |  | $ | 1,466 |  |  | $ | 55 |  |  | $ | 4,835 |  |  | $ | 6,356 |
Amortization of mortgage servicing rights |  | 12,627 |  |  | 70 |  |  | — |  |  | 12,697 |
Amortization of debt discount |  | — |  |  | — |  |  | 268 |  |  | 268 |
Amortization of debt issuance costs |  | — |  |  | — |  |  | 661 |  |  | 661 |
Six months ended June 30, 2018
Depreciation expense |  | $ | 2,613 |  |  | $ | 54 |  |  | $ | 9,973 |  |  | $ | 12,640 |
Amortization of debt discount |  | — |  |  | — |  |  | 706 |  |  | 706 |
Amortization of debt issuance costs |  | — |  |  | — |  |  | 1,662 |  |  | 1,662 |
Six months ended June 30, 2017
Depreciation expense |  | $ | 2,869 |  |  | $ | 105 |  |  | $ | 10,465 |  |  | $ | 13,439 |
Amortization of mortgage servicing rights |  | 25,271 |  |  | 141 |  |  | — |  |  | 25,412 |
Amortization of debt discount |  | — |  |  | — |  |  | 539 |  |  | 539 |
Amortization of debt issuance costs |  | — |  |  | — |  |  | 1,334 |  |  | 1,334 |
(1) | Expenses in the Corporate Items and Other segment for the three and six months ended June 30, 2018 includes $1.6 million and $7.3 million, respectively, of severance expense attributable to headcount reductions in connection with our strategic initiatives to exit the ACS business and the forward lending correspondent and wholesale channels, as well as our overall efforts to reduce costs.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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