XML 54 R39.htm IDEA: XBRL DOCUMENT v3.19.1
Mortgage Servicing (Tables)
 3 Months Ended
Mar. 31, 2019
Transfers and Servicing [Abstract]  
Schedule of Activity Related to MSRs - Amortization Method
Mortgage Servicing Rights – Amortization Method
Three Months Ended March 31,
2019
 
2018
Beginning balance
$
—

 
$
336,882

Fair value election - transfer of MSRs carried at fair value (1)
—

 
(361,670
)
Decrease in impairment valuation allowance (1) (2)
—

 
24,788

Ending balance
$
—

 
$
—


(1)
Effective January 1, 2018, we elected fair value accounting for our MSRs previously accounted for using the amortization method, which included Agency MSRs and government-insured MSRs. This irrevocable election applies to all subsequently acquired or originated servicing assets and liabilities that have characteristics consistent with each of these classes. We recorded a cumulative-effect adjustment of $82.0 million to retained earnings as of January 1, 2018 to reflect the excess of the fair value of the Agency MSRs over their carrying amount. We also recognized the tax effect of this adjustment through an increase in retained earnings of $6.8 million and a deferred tax asset for the same amount. However, we established a full valuation allowance on the resulting deferred tax asset through a reduction in retained earnings. The government-insured MSRs were impaired by $24.8 million at December 31, 2017; therefore, these MSRs were already effectively carried at fair value.
(2)
Impairment valuation allowance balance of $24.8 million was reclassified to reduce the carrying value of the related MSRs on January 1, 2018 in connection with our fair value election.
Schedule of Activity Related to MSRs - Fair Value Measurement Method
Mortgage Servicing Rights – Fair Value Measurement Method
Three Months Ended March 31,
2019
 
2018
 
Agency
 
Non-Agency
 
Total
 
Agency
 
Non-Agency
 
Total
Beginning balance
$
865,587

 
$
591,562

 
$
1,457,149

 
$
11,960

 
$
660,002

 
$
671,962

Fair value election - transfer from MSRs carried at amortized cost
—

 
—

 
—

 
336,882

 
—

 
336,882

Cumulative effect of fair value election
—

 
—

 
—

 
82,043

 
—

 
82,043

Sales and other transfers
(435
)
 
(132
)
 
(567
)
 
—

 
(131
)
 
(131
)
Additions:
 
 
 
 

 
 
 
 
 

Recognized on the sale of residential mortgage loans
1,510

 
—

 
1,510

 
2,378

 
—

 
2,378

Purchase of MSRs
54,410

 
—

 
54,410

 
—

 
—

 
—

Servicing transfers and adjustments
—

 
(3,313
)
 
(3,313
)
 
(1
)
 
(1,757
)
 
(1,758
)
Changes in fair value (1):
 
 
 
 

 
 
 
 
 

Changes in valuation inputs or other assumptions
(64,117
)
 
(156
)
 
(64,273
)
 
20,460

 
—

 
20,460

Realization of expected future cash flows and other changes
(31,263
)
 
(13,462
)
 
(44,725
)
 
(15,501
)
 
(22,088
)
 
(37,589
)
Ending balance
$
825,692

 
$
574,499

 
$
1,400,191

 
$
438,221

 
$
636,026

 
$
1,074,247

(1)
Changes in fair value are recognized in MSR valuation adjustments, net in the unaudited consolidated statements of operations.
Schedule of Composition of Servicing and Subservicing Portfolios by Type of Property Serviced
The following table presents the composition of our residential primary servicing and subservicing portfolios as measured by UPB, including foreclosed real estate and small-balance commercial loans. The UPB amounts in the table below are not included on our unaudited consolidated balance sheets.
UPB at March 31, 2019
 

Servicing
$
75,288,090

Subservicing
49,805,407

NRZ
125,987,243

 
$
251,080,740

UPB at December 31, 2018
 

Servicing
$
72,378,693

Subservicing
53,104,560

NRZ
130,517,237

 
$
256,000,490

UPB at March 31, 2018
 

Servicing
$
73,264,640

Subservicing
1,792,880

NRZ
98,331,356

 
$
173,388,876
Schedule of Components of Servicing and Subservicing Fees
Servicing Revenue
Three Months Ended March 31,
2019
 
2018
Loan servicing and subservicing fees
 
 
 
Servicing
$
52,429

 
$
58,995

Subservicing
6,207

 
914

NRZ
155,847

 
127,017

 
214,483

 
186,926

Late charges
15,439

 
14,589

Custodial accounts (float earnings)
11,934

 
7,263

Loan collection fees
4,349

 
5,018

Home Affordable Modification Program (HAMP) fees (1)
1,777

 
4,104

Other, net
7,881

 
4,238

 
$
255,863

 
$
222,138


(1)
The HAMP expired on December 31, 2016. Borrowers who had requested assistance or to whom an offer of assistance had been extended as of that date had until September 30, 2017 to finalize their modification. We continue to earn HAMP success fees for HAMP modifications that remain less than 90 days delinquent at the first-, second- and third-year anniversary of the start of the trial modification.