Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Nationstar Mortgage Holdings Inc. | |
Entity Central Index Key | 1,520,566 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 97,726,450 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 224 | $ 489 |
Restricted cash | 356 | 388 |
Mortgage servicing rights, $2,956 and $3,160 at fair value, respectively | 2,961 | 3,166 |
Advances and other receivables, net of reserves of $253 and $184, respectively | 1,625 | 1,749 |
Reverse mortgage interests, net of reserves of $88 and $131, respectively | 10,299 | 11,033 |
Mortgage loans held for sale at fair value | 1,646 | 1,788 |
Mortgage loans held for investment, net | 143 | 151 |
Property and equipment, net of accumulated depreciation of $156 and $118, respectively | 127 | 136 |
Derivative financial instruments at fair value | 76 | 133 |
Other assets | 547 | 560 |
Total assets | 18,004 | 19,593 |
Liabilities and Stockholders' Equity | ||
Unsecured senior notes, net | 1,873 | 1,990 |
Advance facilities, net | 797 | 1,096 |
Warehouse facilities, net | 2,774 | 2,421 |
Payables and accrued liabilities | 1,188 | 1,470 |
MSR related liabilities - nonrecourse at fair value | 1,066 | 1,241 |
Mortgage servicing liabilities | 53 | 48 |
Derivative financial instruments at fair value | 7 | 13 |
Other nonrecourse debt, net | 8,569 | 9,631 |
Total liabilities | 16,327 | 17,910 |
Commitments and contingencies (Note 15) | ||
Preferred stock at $0.01 par value - 300,000 thousand shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock at $0.01 par value - 1,000,000 thousand shares authorized, 109,915 thousand and 109,915 thousand shares issued, respectively | 1 | 1 |
Additional paid-in-capital | 1,127 | 1,122 |
Retained earnings | 690 | 701 |
Treasury shares at cost -12,192 thousand and 12,418 thousand shares, respectively | (148) | (147) |
Total Nationstar stockholders' equity | 1,670 | 1,677 |
Noncontrolling interest | 7 | 6 |
Total stockholders' equity | 1,677 | 1,683 |
Total liabilities and stockholders' equity | $ 18,004 | $ 19,593 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Mortgage servicing rights at fair value | $ 2,956 | $ 3,160 |
Advances and other receivables, Reserves | 253 | 184 |
Reverse mortgage interests, Reserves | 88 | 131 |
Accumulated depreciation | $ 156 | $ 118 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 300,000,000 | 300,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 109,915,000 | 109,915,000 |
Treasury Shares | 12,192,000 | 12,418,000 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Service related, net | $ 252 | $ 310 | $ 748 | $ 507 |
Net gain on mortgage loans held for sale | 154 | 232 | 465 | 619 |
Total revenues | 406 | 542 | 1,213 | 1,126 |
Expenses: | ||||
Salaries, wages and benefits | 183 | 211 | 557 | 613 |
General and administrative | 185 | 196 | 552 | 619 |
Total expenses | 368 | 407 | 1,109 | 1,232 |
Other income (expenses): | ||||
Interest income | 157 | 103 | 435 | 313 |
Interest expense | (181) | (165) | (557) | (493) |
Other income (expenses) | (2) | (2) | 4 | (2) |
Total other income (expenses), net | (26) | (64) | (118) | (182) |
Income (loss) before income tax expense (benefit) | 12 | 71 | (14) | (288) |
Less: Income tax expense (benefit) | 5 | 29 | (4) | (106) |
Net income (loss) | 7 | 42 | (10) | (182) |
Less: Net income (loss) attributable to non-controlling interests | 0 | (3) | 1 | (3) |
Net income (loss) attributable to Nationstar | $ 7 | $ 45 | $ (11) | $ (179) |
Net income (loss) per common share attributable to Nationstar: | ||||
Basic (in dollars per share) | $ 0.07 | $ 0.46 | $ (0.11) | $ (1.78) |
Diluted (in dollars per share) | $ 0.07 | $ 0.46 | $ (0.11) | $ (1.78) |
Weighted average shares of common stock outstanding (in thousands): | ||||
Basic (in shares) | 97,706 | 97,461 | 97,685 | 100,524 |
Dilutive effect of stock awards (in shares) | 988 | 893 | 0 | 0 |
Diluted (in shares) | 98,694 | 98,354 | 97,685 | 100,524 |
Unaudited Consolidated Stateme5
Unaudited Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Share Amount | Total Nationstar Stockholders' Equity | Non-controlling Interests |
Beginning of Period, shares at Dec. 31, 2015 | 108,000 | ||||||
Beginning of Period at Dec. 31, 2015 | $ 1,767 | $ 1 | $ 1,105 | $ 682 | $ (30) | $ 1,758 | $ 9 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued (surrendered) under incentive plan, net, shares | 87 | ||||||
Shares issued (surrendered) under incentive plan, net | (3) | (3) | (3) | ||||
Share-based compensation | 18 | 18 | 18 | ||||
Excess tax deficiency from share based compensation | (4) | (4) | (4) | ||||
Repurchase of common stock, shares | (10,589) | ||||||
Repurchase of common stock | (114) | (114) | (114) | ||||
Net (loss) income | (182) | (179) | (179) | (3) | |||
Ending of Period at Sep. 30, 2016 | 1,482 | $ 1 | 1,119 | 503 | (147) | 1,476 | 6 |
Ending of Period, shares at Sep. 30, 2016 | 97,498 | ||||||
Beginning of Period, shares at Dec. 31, 2016 | 97,497 | ||||||
Beginning of Period at Dec. 31, 2016 | 1,683 | $ 1 | 1,122 | 701 | (147) | 1,677 | 6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued (surrendered) under incentive plan, net, shares | 226 | ||||||
Shares issued (surrendered) under incentive plan, net | (4) | (3) | (1) | (4) | |||
Share-based compensation | 13 | 13 | 13 | ||||
Repurchase of common stock, shares | 0 | ||||||
Dividends to noncontrolling interests | (5) | (5) | (5) | ||||
Net (loss) income | (10) | (11) | (11) | 1 | |||
Ending of Period at Sep. 30, 2017 | $ 1,677 | $ 1 | $ 1,127 | $ 690 | $ (148) | $ 1,670 | $ 7 |
Ending of Period, shares at Sep. 30, 2017 | 97,723 |
Unaudited Consolidated Stateme6
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities | ||
Net loss attributable to Nationstar | $ (11) | $ (179) |
Adjustments to reconcile net loss to net cash attributable to operating activities: | ||
Net income (loss) attributable to non-controlling interest | 1 | (3) |
Net gain on mortgage loans held for sale | (465) | (619) |
Reverse mortgage loan interest income | (368) | (251) |
(Gain) loss on sale of assets | (8) | 2 |
Provision for servicing reserves | 113 | 101 |
Fair value changes and amortization of mortgage servicing rights | 361 | 778 |
Fair value changes in excess spread financing | 0 | (74) |
Fair value changes in mortgage servicing rights financing liability | (7) | (2) |
Amortization of premiums and accretion of discounts | 63 | 48 |
Depreciation and amortization | 44 | 48 |
Share-based compensation | 13 | 18 |
Other losses | 5 | 0 |
Repurchases of forward loan assets out of Ginnie Mae securitizations | (943) | (1,138) |
Repurchases of reverse loan assets out of Ginnie Mae securitizations, net of assignments to prior servicers | (2,468) | (1,609) |
Mortgage loans originated and purchased, net of fees, and other purchase-related activities | (14,002) | (15,063) |
Sales proceeds and loan payment proceeds for mortgage loans held for sale and held for investment | 15,472 | 16,268 |
Excess tax (deficiency) benefit from share-based compensation | (1) | 4 |
Changes in assets and liabilities: | ||
Advances and other receivables, net | 55 | 504 |
Reverse mortgage interests, net | 3,494 | 2,022 |
Other assets | (17) | (136) |
Payables and accrued liabilities | (284) | (139) |
Net cash attributable to operating activities | 1,047 | 580 |
Investing Activities | ||
Property and equipment additions, net of disposals | (34) | (49) |
Purchase of forward mortgage servicing rights, net of liabilities incurred | (28) | (36) |
Net proceeds from acquisition of reverse mortgage servicing portfolio and HECM related receivables | 16 | 0 |
Proceeds on sale of forward and reverse mortgage servicing rights | 25 | 25 |
Proceeds on sale of assets | 16 | 0 |
Net cash attributable to investing activities | (5) | (60) |
Financing Activities | ||
Increase in warehouse facilities | 351 | 718 |
Decrease in advance facilities | (298) | (458) |
Proceeds from issuance of HECM securitizations | 701 | 724 |
Repayment of HECM securitizations | (484) | (624) |
Proceeds from issuance of participating interest financing in reverse mortgage interests | 437 | 337 |
Repayment of participating interest financing in reverse mortgage interests | (1,730) | (817) |
Repayment of excess spread financing | (168) | (146) |
Repayment of nonrecourse debt – legacy assets | (12) | (12) |
Repurchase of unsecured senior notes | (122) | (29) |
Repurchase of common stock | 0 | (114) |
Transfers from restricted cash, net | 38 | 0 |
Excess tax deficiency from share based compensation | 0 | (4) |
Surrender of shares relating to stock vesting | (4) | (3) |
Debt financing costs | (11) | (10) |
Dividends to noncontrolling interests | (5) | 0 |
Net cash attributable to financing activities | (1,307) | (438) |
Net (decrease) increase in cash and cash equivalents | (265) | 82 |
Cash and cash equivalents - beginning of period | 489 | 613 |
Cash and cash equivalents - end of period | 224 | 695 |
Supplemental Disclosures of Cash Activities | ||
Cash paid for interest expense | 577 | 510 |
Net cash paid for income taxes | $ 92 | $ 29 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | 1. Nature of Business and Basis of Presentation Nature of Business Nationstar Mortgage Holdings Inc., a Delaware corporation, including its consolidated subsidiaries (collectively, "Nationstar" or the "Company"), earns fees through the delivery of servicing, origination and transaction based services related primarily to single-family residences throughout the United States. Basis of Presentation The consolidated interim financial statements of Nationstar have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Nationstar's Annual Report on Form 10-K for the year ended December 31, 2016 . The interim consolidated financial statements are unaudited; however, in the opinion of management, all adjustments considered necessary for a fair presentation of the results of the interim periods have been included. Certain prior period amounts have been reclassified to conform to the current period presentation. Dollar amounts are reported in millions, except per share data and other key metrics, unless otherwise noted. Nationstar evaluated subsequent events through the date these interim consolidated financial statements were issued. The Company describes its significant accounting policies in Note 2 of the notes to the consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2016 . During the nine months ended September 30, 2017 , no significant changes were made to those accounting policies except that the Company updated its policy on advances and other receivables to include more detailed description of its position on write-offs of advance balances. Nationstar records reserves for advances and other receivables and evaluates the sufficiency of such reserves through consideration of both historical and expected recovery rates on claims filed with government agencies, government sponsored enterprises, vendors, prior servicers and other counterparties. Recovery of advances and other receivables is subject to significant judgment and estimates based on the Company’s assessment of its compliance with servicing guidelines, its ability to produce the necessary documentation to support claims, its ability to support amounts from prior servicers and to effectively negotiate settlements, as needed. Each period, management reviews recorded advances and other receivables and upon determination that no further recourse for recovery is available from all means known to management, the recorded balances associated with these receivables are written-off against the reserve. The Company periodically evaluates corporate allocation methods in order to appropriately align corporate costs with its business. Certain 2016 costs within salaries, wages and benefits and operational expenses were reclassified between segments to conform to current year allocation methods. Such reclassifications had no impact on previously reported net income or shareholders' equity. See Note 17, Business Segment Reporting for information on the changes in the Company's reportable segments. Basis of Consolidation The consolidated financial statements include the accounts of Nationstar, its wholly-owned subsidiaries, and other entities in which the Company has a controlling financial interest, and those variable interest entities ("VIE") where Nationstar is the primary beneficiary. Nationstar applies the equity method of accounting to investments where it is able to exercise significant influence, but not control, over the policies and procedures of the entity and owns less than 50% of the voting interests. Intercompany balances and transactions on consolidated entities have been eliminated. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that Nationstar became the primary beneficiary through the date Nationstar ceases to be the primary beneficiary. Recent Accounting Guidance Adopted Effective January 1, 2017, the Company prospectively adopted Accounting Standards Update No. 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, calculation of earnings per share, classification of awards as either equity or liabilities, and classification of cash flows. Amendments related to accounting for excess tax benefits or deficiencies have been adopted prospectively, resulting in the recognition of $1 of excess tax deficiencies within income tax expense rather than additional paid in capital for the nine months ended September 30, 2017 . The impact on diluted earnings per share is $0.01 per share for the period. Excess tax benefits or deficiencies related to share-based payments are now included in operating cash flows rather than financing cash flows. This change has been applied prospectively in accordance with ASU 2016-09 and prior periods have not been adjusted. The amendments allow for a one-time accounting policy election to either account for forfeitures as they occur or continue to estimate forfeitures as required by current guidance. The Company has elected to continue estimating forfeitures under the current guidance. Recent Accounting Guidance Not Yet Adopted Accounting Standards Update No. 2014-09, 2016-08, 2016-10, 2016-12 and 2016-20, collectively implemented as FASB Accounting Standards Codification Topic 606 ("ASC 606") Revenue from Contracts with Customers, provides guidance for revenue recognition. This ASC’s core principle requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects consideration to which the company expects to be entitled in exchange for those goods or services. The standard also clarifies the principal versus agent considerations, providing the evaluation must focus on whether the entity has control of the goods or services before they are transferred to the customer. The new standard permits the use of either the modified retrospective or full retrospective transition method. The Company's revenue is generated from loan servicing, loan originations, and services provided by Xome. Servicing revenue is comprised of servicing fees and other ancillary fees in connection with our servicing activities as well as fees earned under subservicing arrangements. Origination revenue is comprised of fee income earned at origination of a loan, interest income earned for the period the loans are held, and gain on sale on loans upon disposition of the loan. Xome's revenue is comprised of income earned from real estate exchange, real estate services and real estate technology and support. We have performed a preliminary review of the new guidance as compared to our current accounting policies and are currently evaluating all services rendered to our customers as well as underlying contracts to determine the impact of this standard to our revenue recognition process. The majority of services rendered by the Company in connection with originations and servicing are not within the scope of ASC 606. However, through our review, we have identified one service offering (Services and Software as a Service) under the Xome operating segment that is within the scope of ASC 606. Although revenue recognition may be impacted to some degree for this service offering, we do not anticipate the impact to be materially different from the current revenue recognition processes. Our implementation efforts to date include identification of revenue streams within the scope of the guidance, and we are in the process of reviewing revenue contracts to assess the impact at a customer level. The Company expects to adopt the standard in the first quarter of 2018 with a cumulative effect adjustment to opening retained earnings, as necessary. Accounting Standards Update No. 2016-02, Leases (ASU 2016-02), primarily impacts lessee accounting by requiring the recognition of a right-of-use asset and a corresponding lease liability on the balance sheet for long-term lease agreements. The lease liability will be equal to the present value of all reasonably certain lease payments. The right-of-use asset will be based on the liability, subject to adjustment for initial direct costs. Lease agreements with terms 12 months or less are permitted to be excluded from the balance sheet. In general, leases will be amortized on a straight-line basis with the exception of finance lease agreements. ASU 2016-02 is effective for interim periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of this ASU on the consolidated financial statements and to its debt covenants and capitalization requirements. Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (ASU 2016-13), requires expected credit losses for financial instruments held at the reporting date to be measured based on historical experience, current conditions and reasonable and supportable forecasts. The update eliminates the probable initial recognition threshold in current GAAP and instead reflects an entity’s current estimate of all expected credit losses. Previously, when credit losses were measured under GAAP, an entity generally only considered past events and current conditions in measuring the incurred loss. ASU 2016-13 is effective for interim periods beginning after December 15, 2019. The Company is currently evaluating the potential impact of ASU 2016-13 on its consolidated financial statements. Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15) and Accounting Standards Update No 2016-18 Statement of Cash Flows (Topic 230) Restricted Cash (ASU 2016-18) both relate to the Statement of Cash Flows (Topic 230) and are intended to provide specific guidance to reduce diversity in practice. ASU 2016-15 addresses the following eight cash flow classification issues: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of life insurance claims, (5) proceeds from the settlement of corporate owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transactions and (8) separately identifiable cash flows and application of the predominance principle. This ASU is effective for fiscal years beginning after December 15, 2017, and will require adoption on a retrospective basis. The Company is currently evaluating the impact of the application of ASU 2016-15 will have on the Company’s classification of cash flows. ASU 2016-18 addresses the classification and presentation of changes in restricted cash on the statement of cash flows. This new standard requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. ASU 2016-18 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the potential impact of ASU 2016-18 on its consolidated financial statements. Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment , simplifies the accounting for goodwill impairment for all entities by requiring impairment charges to be based on the first step in today’s two-step impairment test under Accounting Standards Codification (ASC) 350. The standard has tiered effective dates, starting in 2020 for calendar-year public business entities that meet the definition of an SEC filer. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company is currently evaluating the potential impact of ASU 2017-04 on our consolidated financial statements. ASU 2017-04 is effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. ASU 2017-04 will be adopted prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. |
Mortgage Servicing Rights ("MSR
Mortgage Servicing Rights ("MSRs") and Related Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing Rights (MSRs) and Related Liabilities | 2. Mortgage Servicing Rights ("MSRs") and Related Liabilities The following table sets forth the carrying value of Nationstar's MSRs and the related liabilities. MSRs and Related Liabilities September 30, 2017 December 31, 2016 Forward MSRs - fair value $ 2,956 $ 3,160 Reverse MSRs - amortized cost 5 6 Mortgage servicing rights $ 2,961 $ 3,166 Mortgage servicing liabilities - amortized cost $ 53 $ 48 Excess spread financing - fair value $ 1,046 $ 1,214 Mortgage servicing rights financing liability - fair value 20 27 MSR related liabilities (nonrecourse) $ 1,066 $ 1,241 Forward Mortgage Servicing Rights - Fair Value The Company owns and records at fair value the rights to service traditional residential mortgage loans ("forward" loans) for others either as a result of purchase transactions or from the retained servicing associated with the sales and securitizations of loans originated. Forward MSRs are comprised of servicing rights related to both agency and non-agency loans. The following table sets forth the activities of forward MSRs during the nine months ended September 30, 2017 and 2016. Nine months ended September 30, Forward MSRs - Fair Value 2017 2016 Fair value - beginning of period $ 3,160 $ 3,358 Additions: Servicing retained from mortgage loans sold 151 142 Purchases of servicing rights 30 39 Dispositions: Sales of servicing assets (24 ) (24 ) Changes in fair value: Changes in valuation inputs or assumptions used in the valuation model (113 ) (494 ) Other changes in fair value (248 ) (296 ) Fair value - end of period $ 2,956 $ 2,725 From time to time, the Company sells its ownership interest in certain MSRs and is retained as the subservicer for the sold assets. The Company has evaluated the sale accounting requirements related to these transactions given the continued involvement as the subservicer and concluded that these transactions qualify for sale accounting treatment. During the nine months ended September 30, 2017 the Company sold $2,920 in unpaid principal balance ("UPB") of forward MSRs, of which none was retained by the Company as subservicer. In August 2017, the Company entered into a special arrangement where the Company sold $26 MSRs and subsequently purchased back $8 MSRs. In connection with the transaction, the Company used the proceeds to pay down $9 excess spread financing liabilities. In addition, during the second quarter of 2017, the Company sold forward MSR with a negative balance of $2 associated with the cost to dispose of nonperforming loan portfolio. During the nine months ended September 30, 2016 , $4,560 in UPB of forward MSRs was sold and the Company was retained as the subservicer for $3,507 UPB of the sold MSRs collateralized by assets. MSRs measured at fair value are segregated between credit sensitive and interest sensitive pools. Interest sensitive pools are primarily impacted by changes in forecasted interest rates, which in turn impact voluntary prepayment speeds. Credit sensitive pools are primarily impacted by borrower performance under specified repayment terms, which most directly impacts involuntary prepayments and delinquency rates. The Company assesses whether acquired portfolios are more credit sensitive or interest sensitive in nature on the date of acquisition. Numerous factors are considered in making this assessment, including loan-to-value ratios, FICO scores, percentage of portfolio previously modified, portfolio seasoning and similar criteria. Once the determination for a pool is made on the date of acquisition, subsequent changes are not made. Interest sensitive portfolios generally consist of lower delinquency, single-family conforming residential forward mortgage loans for agency investors. Credit sensitive portfolios generally consist of higher delinquency, single-family non-conforming residential forward mortgage loans serviced for agency and non-agency investors. The following table provides a breakdown of credit and interest sensitive UPBs for Nationstar's forward owned MSRs. Forward MSRs - Sensitivity Pools September 30, 2017 December 31, 2016 UPB Fair Value UPB Fair Value Credit sensitive $ 174,318 $ 1,640 $ 198,935 $ 1,818 Interest sensitive 114,132 1,316 113,141 1,342 Total $ 288,450 $ 2,956 $ 312,076 $ 3,160 Nationstar used the following key weighted-average inputs and assumptions in estimating the fair value of MSRs. Credit Sensitive September 30, 2017 December 31, 2016 Discount rate 11.4 % 11.6 % Total prepayment speeds 15.4 % 15.4 % Expected weighted-average life 5.6 years 6.0 years Interest Sensitive Discount rate 9.2 % 9.3 % Total prepayment speeds 11.3 % 10.7 % Expected weighted-average life 6.5 years 6.8 years The following table shows the hypothetical effect on the fair value of the forward MSRs fair value when applying certain unfavorable variations of key assumptions to these assets at September 30, 2017 and December 31, 2016 . Discount Rate Total Prepayment Speeds Forward MSRs - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change September 30, 2017 Mortgage servicing rights $ (106 ) $ (205 ) $ (122 ) $ (235 ) December 31, 2016 Mortgage servicing rights $ (114 ) $ (221 ) $ (117 ) $ (224 ) These hypothetical sensitivities should be evaluated with care. The effect on fair value of a 10% variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Reverse Mortgage Servicing Rights and Liabilities - Amortized Cost Nationstar owns the right to service certain Home Equity Conversion Mortgage ("HECM") reverse mortgage loans with an unpaid principal balance of $36,412 and $38,940 as of September 30, 2017 and December 31, 2016 , respectively. The following table sets forth the activities of reverse MSRs and mortgage servicing liabilities ("MSLs") for the nine months ended September 30, 2017 and 2016 . Management evaluates reverse MSRs and MSLs each reporting period for impairment. Based on management's assessment at September 30, 2017 , no impairment was required to be recorded for reverse MSRs. Nine months ended September 30, 2017 2016 Assets Liabilities Assets Liabilities Reverse MSRs and Liabilities - Amortized Cost Balance - beginning of period $ 6 $ 48 $ 9 $ 25 Increase in MSL (1) — 6 — — Amortization/accretion (1 ) (1 ) (2 ) (14 ) Balance - end of the period $ 5 $ 53 $ 7 $ 11 Fair value - end of period $ 5 $ 9 $ 25 $ 2 (1) The Company executed an asset purchase agreement in December 2016 with a large financial institution, acquiring the servicing rights related to a $9,305 UPB reverse loan portfolio of HECM loans owned by a GSE. In connection with the acquisition, the Company recorded a $17 MSL reflecting the fair value associated with this reverse servicing portfolio on the date of acquisition. In September 2017, the Company executed another mortgage servicing rights purchase agreement to acquire servicing rights on a reverse mortgage portfolio of $747 UPB. Excess Spread Financing - Fair Value To finance the acquisition of certain forward MSRs on various forward loan pools ("Portfolios"), Nationstar has entered into sale and assignment agreements with a third-party associated with funds and accounts under management of BlackRock Financial Management Inc. ("BlackRock"), and with certain affiliated entities formed and managed by New Residential Investment Corp. ("New Residential"), which is managed by an affiliate of Fortress Investment Group LLC ("Fortress"). Nationstar sold to such entities the right to receive a specified percentage of the excess cash flow generated from the Portfolios after receipt of a fixed base servicing fee per loan. Servicing fees associated with traditional MSRs can be segregated into a contractually specified base fee component and an excess servicing fee. The base servicing fee, along with ancillary income, is designed to cover costs incurred to service the specified pool plus a reasonable profit margin. The remaining servicing fee is considered excess. Nationstar retains all the base servicing fee and ancillary revenues associated with servicing the Portfolios and retains a portion of the excess servicing fee. Nationstar continues to be the servicer of the Portfolios and provides all servicing and advancing functions. Contemporaneous with the above, Nationstar has entered into refinanced loan obligations with New Residential and BlackRock. Should Nationstar refinance any loan in the Portfolios, subject to certain limitations, it will be required to transfer the new loan or a replacement loan of similar economic characteristics into the Portfolios. The new or replacement loan will be governed by the same terms set forth in the sale and assignment agreement described above, which is the primary driver of the recapture rate assumption. The range of key assumptions used in Nationstar's valuation of excess spread financing are as follows. Excess Spread Financing Prepayment Speeds Average Discount Recapture Rate September 30, 2017 Low 6.7% 4.3 8.5% 7.1% High 21.1% 6.8 14.1% 30.0% Weighted-average 13.9% 5.9 10.8% 18.8% December 31, 2016 Low 6.1% 4.1 8.5% 6.7% High 21.2% 8.5 14.1% 29.8% Weighted-average 13.9% 6.3 10.8% 19.0% The following table shows the hypothetical effect on the excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities at September 30, 2017 and December 31, 2016 . Discount Rate Prepayment Speeds Excess Spread Financing - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change September 30, 2017 Excess spread financing $ 39 $ 81 $ 36 $ 75 December 31, 2016 Excess spread financing $ 49 $ 101 $ 41 $ 85 As the cash flow assumptions utilized in determining the fair value amounts in the excess spread financing are based on the related cash flow assumptions utilized in the financed MSRs, any fair value changes recognized in the MSRs would inherently have an inverse impact on the carrying amount of the related excess spread financing. For example, while an increase in discount rates would negatively impact the value of the Company's MSRs, it would reduce the carrying value of the associated excess spread financing liability. These hypothetical sensitivities should be evaluated with care. The effect on fair value of a 10% variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Also, a positive change in the above assumptions would not necessarily correlate with the corresponding decrease in the net carrying amount of the excess spread financing. Forward Mortgage Servicing Rights Financing From December 2013 through June 2014, Nationstar entered into agreements to sell a contractually specified base fee component of certain forward MSRs and servicing advances under specified terms to a joint venture capitalized by New Residential and certain unaffiliated third-party investors. Nationstar continues to be the named servicer and, for accounting purposes, ownership of the mortgage servicing rights continues to reside with Nationstar. Accordingly, Nationstar records the MSRs and a MSR financing liability associated with this transaction in its consolidated balance sheets. See Note 19, Transactions with Affiliates for additional information. The following table sets forth the weighted average assumptions used in the valuation of the mortgage servicing rights financing liability. Mortgage Servicing Rights Financing Assumptions September 30, 2017 December 31, 2016 Advance financing rates 3.5 % 3.2 % Annual advance recovery rates 23.3 % 23.9 % The following table sets forth the items comprising of revenue associated with servicing loan portfolios. Three months ended September 30, Nine months ended September 30, Servicing Revenue 2017 2016 2017 2016 Contractually specified servicing fees (1) $ 251 $ 254 $ 759 $ 786 Other service-related income (1) 44 67 142 214 Incentive and modification income (1) 19 35 63 82 Late fees (1) 22 20 67 57 Reverse servicing fees 16 11 43 46 Mark-to-market (2) (48 ) (9 ) (176 ) (502 ) Counterparty revenue share (3) (53 ) (75 ) (174 ) (223 ) Amortization, net of accretion (4) (60 ) (92 ) (187 ) (235 ) Total servicing revenue $ 191 $ 211 $ 537 $ 225 (1) Amounts include subservicing related revenues. (2) Mark-to-market includes fair value adjustments on MSR, excess spread financing and MSR financing liabilities. The amount of MSR MTM reflected is net of cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio and these incurred losses have been transferred to reserves on advances and other receivables. These cumulative incurred losses totaled $20 and $27 for the three months ended September 30, 2017 and 2016 , respectively, and $69 and $85 for the nine months ended September 30, 2017 and 2016 , respectively. (3) Counterparty revenue share represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements and the payments made associated with MSRs financing arrangements. (4) Accretion was $41 and $46 for the three months ended September 30, 2017 and 2016 , respectively, and $123 and $149 for the nine months ended September 30, 2017 and 2016 , respectively. |
Advances and Other Receivables,
Advances and Other Receivables, Net | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Advances and Other Receivables, Net | 3. Advances and Other Receivables, Net Advances and other receivables, net consists of the following. September 30, 2017 December 31, 2016 Servicing advances $ 1,489 $ 1,614 Receivables from agencies, investors and prior servicers 389 319 Reserves (253 ) (184 ) Total advances and other receivables, net $ 1,625 $ 1,749 Nationstar as loan servicer is contractually responsible to advance funds on behalf of the borrower and investor primarily for loan principal and interest, property taxes and hazard insurance, and foreclosure costs. Advances are primarily recovered through reimbursement from the investor, proceeds from sale of loan collateral, or mortgage insurance claims. Reserves for advances and other receivables on loans transferred out of the MSR portfolio are established within advances and other receivables. The Company estimates and records an asset for estimated recoveries from prior servicers for their respective portion of the losses associated with the underlying loans that were not serviced in accordance with established guidelines. Receivables from prior servicers totaled $139 and $94 for the Company's forward loan portfolio at September 30, 2017 and December 31, 2016 , respectively. The activity of the reserves for advances and other receivables is set forth below. Three months ended September 30, Nine months ended September 30, Advances and Other Receivables Reserves 2017 2016 2017 2016 Balance - beginning of period (1) $ 236 $ 238 $ 184 $ 163 Provision and other additions (2) 30 37 106 126 Write-offs (13 ) (95 ) (37 ) (109 ) Balance - end of period $ 253 $ 180 $ 253 $ 180 (1) Beginning reserve balance as of January 1, 2016 was updated to reflect the reclassification of reserves for advances and other receivables from the MSR. (2) A provision of $20 and $27 was recorded through the MTM adjustment in service related revenues for the three months ended September 30, 2017 and 2016 , respectively, and $69 and $85 for the nine months ended September 30, 2017 and 2016 , respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves from other balance sheet accounts. |
Reverse Mortgage Interests, Net
Reverse Mortgage Interests, Net | 9 Months Ended |
Sep. 30, 2017 | |
Reverse Mortgage Interests [Abstract] | |
Reverse Mortgage Interests, Net | 4. Reverse Mortgage Interests, Net Reverse mortgage interests, net consist of the following. September 30, 2017 December 31, 2016 Participating interests in HMBS $ 7,573 $ 8,839 Other interests securitized 985 753 Unsecuritized interests 1,829 1,572 Reserves (88 ) (131 ) Total reverse mortgage interests, net $ 10,299 $ 11,033 Participating interests in HMBS Participating interests in HMBS consist of the Company's reverse mortgage interests in HECM loans which have been transferred to Ginnie Mae and subsequently securitized through the issuance of HMBS. During the nine months ended September 30, 2017 , a total of $416 in UPB was transferred to Ginnie Mae and securitized. Also, during the nine months ended September 30, 2017 , the Company repurchased $3,270 of HECM loans that reached 98% maximum claim amount which will be assigned to HUD or a third party. Other interests securitized Other interests securitized consist of reverse mortgage interests that no longer meet HMBS program eligibility criteria and have been repurchased out of HMBS; these reverse mortgage interests have subsequently been transferred to private securitization trusts and are accounted for as a secured borrowing. During the nine months ended September 30, 2017 , a total of $747 UPB was securitized through Trust 2017-1 and Trust 2017-2 and $307 UPB was collapsed through Trust 2015-2 and Trust 2016-1. Refer to Other Nonrecourse Debt in Note 8, Indebtedness for additional information. Unsecuritized interests Unsecuritized interests in reverse mortgages consist of the following. September 30, 2017 December 31, 2016 Repurchased HECM loans $ 1,407 $ 1,000 HECM related receivables 291 301 Funded borrower draws not yet securitized 113 236 Foreclosed assets 18 35 Total unsecuritized interests $ 1,829 $ 1,572 Unsecuritized interests include repurchased HECM loans for which the Company is required to repurchase from the HMBS pool when the outstanding principal balance of the HECM loan is equal to or greater than 98% of the maximum claim amount established at origination in accordance with HMBS program guidelines. The Company repurchased a total of $3,270 and $2,270 HECM loans out of Ginnie Mae HMBS securitizations during the nine months ended September 30, 2017 and 2016 , respectively, of which $802 and $661 were subsequently assigned to a prior servicer in accordance with applicable servicing agreements, respectively. The Company also estimates and records an asset for probable recoveries from prior servicers for their respective portion of the losses associated with the underlying loans that were not serviced in accordance with established guidelines. Receivables from prior servicers totaled $19 and $38 for the Company's reverse loan portfolio at September 30, 2017 and December 31, 2016 , respectively. Purchase of Reverse Mortgage Servicing Rights and Interests On December 1, 2016 , the Company executed an asset purchase agreement with a large financial institution, acquiring the servicing rights and participating interests in securitized HECM loans and related HMBS obligations. Refer to Note 2, Mortgage Servicing Rights and Related Liabilities for discussion of the servicing portfolio acquired. In addition to the servicing portfolio, the purchase agreement also included $3,840 UPB of Ginnie Mae participating interest in HECM loans and related HMBS obligations. During the three months ended September 30, 2017 , the Company updated its initial relative fair value allocation resulting in the Company recording $3,749 reverse mortgage interests and the corresponding liabilities as nonrecourse debt of $3,691 . Additionally, the Company recorded a purchase discount of $118 within unsecuritized interests as part of the relative fair value allocation, of which $22 has been accreted to interest income during the nine months ended September 30, 2017 . The Company received cash of $96 for the acquisition of these assets and assumption of related liabilities. As part of the December 2016 asset purchase agreement, the Company agreed to acquire remaining components of the reverse portfolio, primarily including servicing of whole HECM loans and REO advances upon receiving regulatory approval. In September 2017, the Company executed a mortgage servicing rights purchase agreement and a subservicing agreement to acquire servicing rights and subservicing on the remaining reverse portfolio in the amounts of $747 UPB and $505 UPB, respectively. Upon this acquisition the Company performed a relative fair value allocation, resulting in the Company recording $10 of REO advances related to the servicing portfolio acquired in HECM related receivables within reverse mortgage interests. The Company received net proceeds of $16 for the acquisition of these assets and assumption of related liabilities. Refer to Note 2, Mortgage Servicing Rights and Related Liabilities for discussion of the servicing portfolio acquired. Reserves for Reverse Mortgage Interests Nationstar records reserves related to reverse mortgage interests based on potential unrecoverable costs and loss exposures expected to be realized. Recoverability is determined based on the Company’s ability to meet HUD servicing guidelines and is viewed as two different categories of expenses: financial and operational. Financial exposures are defined as the cost of doing business related to servicing the HECM product and include potential unrecoverable costs primarily based on HUD claim guidelines related to recoverable expenses and unfavorable changes in the appraised value of the loan collateral. Operational exposures are defined as unrecoverable debenture interest curtailments imposed for missed FHA-specified servicing timelines. The activity of the reserves for reverse mortgage interests is set forth below. Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Reserves for reverse mortgage interests - beginning of period $ 149 $ 71 $ 131 $ 53 Provision (1) 22 28 44 43 Write-offs (2) (29 ) (7 ) (33 ) (7 ) Other (3) (54 ) 1 (54 ) 4 Reserves for reverse mortgage interests - end of period $ 88 $ 93 $ 88 $ 93 (1) During the three months ended September 30, 2017 , reserves increased attributable to the Company refining its method to estimate losses from a pool-level view to a loan-level view based on characteristics of individual loans. (2) The write-offs in the three months ended September 30, 2017 were primarily attributable to transactions that were fully reserved and processed after conversion to the Company's new internally developed reverse servicing platform. (3) During the three months ended September 30, 2017 , the Company reclassified certain amounts within reverse mortgage interests to be comparable to prior periods and also updated its initial estimate of the relative fair value allocation related to the servicing portfolio acquired in December 2016 and reclassified $61 from reserves to a purchase price discount. This amount is now included in the net basis of unsecuritized interest of reverse mortgage interests. Reverse Interest Income The Company accrues interest income for its participating interest in reverse mortgages based on the stated rates underlying HECM loans and FHA guidelines. Total interest earned on the Company's reverse mortgage interests was $135 and $81 for the three months ended September 30, 2017 and 2016 , respectively, and $ 368 and $ 251 for the nine months ended September 30, 2017 and 2016 , respectively. |
Mortgage Loans Held for Sale an
Mortgage Loans Held for Sale and Investment | 9 Months Ended |
Sep. 30, 2017 | |
Mortgage Loans Held for Sale and Investment [Abstract] | |
Mortgage Loans Held for Sale and Investment | 5. Mortgage Loans Held for Sale and Investment Mortgage Loans Held for Sale Nationstar maintains a strategy of originating mortgage loan products primarily for the purpose of selling to government-sponsored enterprises ("GSEs") or other third-party investors in the secondary market on a servicing-retained basis. Nationstar focuses on assisting customers currently in the Company's servicing portfolio with refinancing of loans or new home purchases. Generally, all newly originated mortgage loans held for sale are securitized and transferred to GSEs or delivered to third-party purchasers shortly after origination on a servicing-retained basis. Mortgage loans held for sale are recorded at fair value as set forth below. September 30, 2017 December 31, 2016 Mortgage loans held for sale – unpaid principal balance $ 1,592 $ 1,759 Mark-to-market adjustment (1) 54 29 Total mortgage loans held for sale $ 1,646 $ 1,788 (1) The mark-to-market adjustment is recorded in net gain on mortgage loans held for sale in the consolidated statements of operations. Nationstar accrues interest income as earned and places loans on non-accrual status after any portion of principal or interest has been delinquent for more than 90 days. Accrued interest is recorded as interest income in the consolidated statements of operations. The total UPB of mortgage loans held for sale on nonaccrual status was as follows for the dates indicated. September 30, 2017 December 31, 2016 Mortgage Loans Held for Sale - Unpaid Principal Balance UPB Fair Value UPB Fair Value Non-accrual $ 81 $ 78 $ 106 $ 103 From time to time, Nationstar exercises its right to repurchase individual delinquent loans in Ginnie Mae securitization pools to minimize interest spread losses, to re-pool into new Ginnie Mae securitizations, or to otherwise sell to third-party investors. During the nine months ended September 30, 2017 and 2016, Nationstar repurchased $236 and $201 of delinquent Ginnie Mae loans, respectively, and securitized or sold to third-party investors $253 and $88 of previously repurchased loans, respectively. As of September 30, 2017 and 2016, $59 and $18 of the repurchased loans have reperformed and were held in accrual status, respectively, and remaining balances continue to be held under a nonaccrual status. The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $63 and $84 as of September 30, 2017 and December 31, 2016 , respectively. The following table details a roll forward of the change in the account balance of mortgage loans held for sale. Nine months ended September 30, Mortgage loans held for sale 2017 2016 Balance - beginning of period $ 1,788 $ 1,430 Mortgage loans originated and purchased, net of fees 13,988 14,977 Loans sold (15,107 ) (15,743 ) Repurchase of loans out of Ginnie Mae securitizations 943 1,138 Transfer of mortgage loans held for sale to advances/accounts receivable related to claims (1) (16 ) (16 ) Net transfer of mortgage loans held for sale from REO in other assets (2) 20 9 Changes in fair value 16 14 Other purchase-related activities (3) 14 30 Balance - end of period $ 1,646 $ 1,839 (1) Amounts are comprised of claims made on certain government insured mortgage loans upon completion of the REO sale. (2) Net amounts are comprised of REO in the sales process which are transferred to other assets and certain government insured mortgage REO which are transferred from other assets upon completion of the sale so that the claims process can begin. (3) Amounts are comprised primarily of non-Ginnie Mae loan purchases and buyouts. For the nine months ended September 30, 2017 and 2016 , the Company received proceeds of $ 15,470 and $ 16,183 , respectively, on the sale of mortgage loans held for sale, resulting in gains of $ 363 and $ 440 , respectively. Nationstar has the right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased solely with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. The amounts repurchased out of Ginnie Mae pools, as presented above, are primarily in connection with loan modifications and loan resolution activity as part of Nationstar's contractual obligations as the servicer of the loans. Mortgage Loans Held for Investment, Net The following sets forth the composition of mortgage loans held for investment, net. September 30, 2017 December 31, 2016 Mortgage loans held for investment, net – UPB $ 198 $ 216 Transfer discount: Non-accretable (43 ) (52 ) Accretable (12 ) (13 ) Total mortgage loans held for investment, net $ 143 $ 151 The changes in accretable yield discount on loans transferred to mortgage loans held for investment are set forth below. Nine months ended September 30, Accretable Yield Discount 2017 2016 Balance - beginning of the period $ (13 ) $ (15 ) Accretion 2 2 Reclassifications from non-accretable discount (1 ) (1 ) Balance - end of the period $ (12 ) $ (14 ) Nationstar may periodically modify the terms of any outstanding mortgage loans held for investment for loans that are either in default or in imminent default. Modifications often involve reduced payments by borrowers, modification of the original terms of the mortgage loans, forgiveness of debt and/or modified servicing advances. As a result of the volume of modification agreements entered into, the estimated average outstanding life in this pool of mortgage loans has been extended. Nationstar records interest income on the transferred loans on a level-yield method. To maintain a level-yield on these transferred loans over the estimated extended life, Nationstar reclassified to accretable yield discount approximately $1 of transfer discount designated as reserves for future loss, for the nine months ended September 30, 2017 . No provision for reserves was required for the nine months ended September 30, 2017 and 2016, respectively, as the fair value of the underlying collateral exceeded the carrying value of the loans, net of the non-accretable discount. The total UPB of mortgage loans held for investment for which the Company has begun formal foreclosure proceedings was $22 and $29 as of September 30, 2017 and December 31, 2016 , respectively. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | 6. Other Assets Other assets consist of the following. September 30, 2017 December 31, 2016 Accrued revenues $ 152 $ 165 Loans subject to repurchase right from Ginnie Mae 143 152 Goodwill 72 74 Prepaid expenses 28 16 Deposits 22 25 Real estate owned (REO), net 21 30 Intangible assets 20 28 Receivables from affiliates, net 6 6 Other 83 64 Total other assets $ 547 $ 560 Accrued revenues Accrued revenue is primarily comprised of service fees earned but not received based upon the terms of the Company's servicing and subservicing agreements. Goodwill and intangible assets In connection with the sale of Xome's retail title division, the Company wrote off $2 goodwill and $4 intangible assets in June 2017. See further discussion in Note 16, Dispositions and Exit Costs . Loans subject to repurchase right from Ginnie Mae Forward loans are sold to Ginnie Mae in conjunction with the issuance of mortgage backed securities. Nationstar, as the issuer of the mortgage backed securities, has the unilateral right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. Once Nationstar has the unilateral right to repurchase a delinquent loan, it has effectively regained control over the loan and recognizes these rights to the loan on its consolidated balance sheets and establishes a corresponding repurchase liability regardless of Nationstar’s intention to repurchase the loan. Real estate owned Real estate owned ("REO") includes $14 and $21 of REO loans with government insurance at September 30, 2017 and December 31, 2016 , respectively. Other Other primarily includes non-advance related accounts receivable due from investors. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 7. Derivative Financial Instruments Derivative instruments utilized by Nationstar primarily include interest rate lock commitments ("IRLCs"), Loan Purchase Commitments ("LPCs"), forward Mortgage Backed Securities ("MBS") trades, Eurodollar and Treasury futures, interest rate swap agreements and interest rate caps. Associated with the Company's derivatives are $4 and $ 29 in collateral deposits on derivative instruments recorded in other assets and payables and accrued liabilities on the Company's balance sheets as of September 30, 2017 and December 31, 2016 , respectively. The Company does not offset fair value amounts recognized for derivative instruments with amounts collected and/or deposited on derivative instruments in its consolidated balance sheets. The following table provides the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses). Expiration Dates Outstanding Notional Fair Value Recorded Gains / (Losses) Nine months ended September 30, 2017 Assets Mortgage loans held for sale, net Loan sale commitments (1) 2017 $ 1 $ 0.1 $ — Derivative financial instruments IRLCs 2017 2,531 68.7 (23.5 ) Forward sales of MBS 2017 2,524 4.7 (34.5 ) LPCs 2017 132 1.0 (0.9 ) Treasury futures 2017 255 2.0 2.0 Eurodollar futures (1) 2017-2021 11 — — Interest rate swaps (1) 2017 — — (0.1 ) Liabilities Derivative financial instruments IRLCs (1) 2017 7 — 1.1 Forward sales of MBS 2017 1,137 3.2 6.8 LPCs 2017 335 1.2 0.3 Treasury futures 2017 479 2.0 (2.0 ) Eurodollar futures (1) 2017-2021 45 — — Interest rate swaps (1) 2017 — — 0.1 Year ended December 31, 2016 Assets Mortgage loans held for sale Loan sale commitments 2017 $ 1 $ 0.1 $ (0.2 ) Derivative financial instruments IRLCs 2017 3,675 92.2 3.1 Forward sales of MBS 2017 2,580 39.2 33.1 LPCs 2017 203 1.9 (2.0 ) Eurodollar futures (1) 2017-2021 35 — (0.1 ) Interest rate swaps 2017 9 0.1 (0.4 ) Liabilities Derivative financial instruments IRLCs 2017 176 1.1 (1.1 ) Forward sales of MBS 2017 1,689 10.0 (6.3 ) LPCs (1) 2017 111 1.5 — Eurodollar futures (1) 2017-2021 27 — 0.1 Interest rate swaps 2017 9 0.1 0.4 (1) Fair values or recorded gains/(losses) of derivative instruments are less than $0.1 for the specified dates. |
Indebtedness
Indebtedness | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Indebtedness | 8. Indebtedness Notes Payable September 30, 2017 December 31, 2016 Advance Facilities Interest Rate Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral pledged Nationstar agency advance receivables trust LIBOR+2.0% to 2.6% November 2017 (1) Servicing advance receivables $ 650 $ 440 $ 503 $ 485 $ 578 Nationstar mortgage advance receivable trust LIBOR+1.4% to 6.5% November 2018 Servicing advance receivables 500 163 286 260 301 Nationstar agency advance financing facility LIBOR+1.0% to 7.4% January 2018 Servicing advance receivables 200 101 145 164 186 MBS servicer advance facility (2014) LIBOR+3.5% October 2018 Servicing advance receivables 125 38 131 88 142 MBS advance financing facility LIBOR+2.5% March 2018 Servicing advance receivables 80 56 56 55 60 MBS advance financing facility (2012) (2) LIBOR+5.0% January 2017 Servicing advance receivables — — — 44 52 Advance facilities principal amount 798 1,121 1,096 1,319 Unamortized debt issuance costs (1 ) — — — Advance facilities, net $ 797 $ 1,121 $ 1,096 $ 1,319 September 30, 2017 December 31, 2016 Warehouse Facilities Interest Rate Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral pledged $1,200 warehouse facility LIBOR+2.0% to 2.9% October 2018 Mortgage loans or MBS $ 1,200 $ 719 $ 762 $ 682 $ 747 $1,000 warehouse facility LIBOR+2.1% to 2.4% September 2018 Mortgage loans or MBS 1,000 317 325 250 256 $750 warehouse facility LIBOR+2.0% to 2.8% November 2017 (1) Mortgage loans or MBS 750 514 555 410 415 $500 warehouse facility LIBOR+1.8% to 2.8% September 2018 Mortgage loans or MBS 500 221 226 229 237 $500 warehouse facility LIBOR+1.8% to 3.3% June 2018 Mortgage loans or MBS 500 384 417 496 539 $350 warehouse facility LIBOR+2.5% to 2.8% April 2018 Mortgage loans or MBS 350 186 202 12 13 $450 warehouse facility LIBOR+2.5% to 2.6% November 2017 (1) Mortgage loans or MBS 450 281 292 173 189 $300 warehouse facility LIBOR+2.3% January 2018 Mortgage loans or MBS 300 127 152 153 180 $200 warehouse facility LIBOR+1.5% April 2019 Mortgage loans or MBS 200 22 23 7 8 $40 warehouse facility LIBOR+3.0% December 2017 Mortgage loans or MBS 40 4 6 11 18 Warehouse facilities principal amount 2,775 2,960 2,423 2,602 Unamortized debt issuance costs (1 ) — (2 ) — Warehouse facilities, net $ 2,774 $ 2,960 $ 2,421 $ 2,602 Pledged Collateral: Mortgage loans, net $ 1,602 $ 1,692 $ 1,693 $ 1,427 Reverse mortgage interests, net 1,173 1,268 730 834 MSR and other collateral — — — 341 (1) This facility has not matured as of the date this report is filed. (2) This MBS Advance Financing facility was paid off in full in February 2017. The Company entered into two new warehouse facility agreements in the third quarter of 2017 with a total capacity amount of $200 . As of September 30, 2017 , the Company has not borrowed or pledged any collateral against these facilities. Unsecured Senior Notes A summary of the balances of unsecured senior notes is presented below. September 30, 2017 December 31, 2016 $600 face value, 6.500% interest rate payable semi-annually, due July 2021 $ 594 $ 595 $400 face value, 7.875% interest rate payable semi-annually, due October 2020 397 400 $475 face value, 6.500% interest rate payable semi-annually, due August 2018 364 461 $375 face value, 9.625% interest rate payable semi-annually, due May 2019 324 345 $300 face value, 6.500% interest rate payable semi-annually, due June 2022 206 206 Unsecured senior notes principal amount 1,885 2,007 Unamortized debt issuance costs (12 ) (17 ) Unsecured senior notes, net $ 1,873 $ 1,990 Nationstar repurchased $26 and $120 in principal amount of outstanding notes during the three and nine months ended September 30, 2017 resulting in a loss of $1 and $3 , respectively. Nationstar also repurchased $4 and $29 in principal amount of outstanding notes during the three and nine months ended September 30, 2016 . The indentures for the unsecured senior notes contain various covenants and restrictions that limit the ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all of their assets or enter into certain transactions with affiliates. The indentures contain certain events of default, including (subject, in some cases, to customary cure periods and materiality thresholds) defaults based on (i) the failure to make payments under the indenture when due, (ii) breach of covenants, (iii) cross-defaults to certain other indebtedness, (iv) certain bankruptcy or insolvency events, (v) material judgments and (vi) invalidity of material guarantees. The indentures for the unsecured senior notes provide that Nationstar may redeem all or a portion of the notes prior to certain fixed dates by paying a make-whole premium plus accrued and unpaid interest and additional interest, if any, to the redemption dates. In addition, Nationstar may redeem all or a portion of the unsecured senior notes at any time on or after certain fixed dates at the applicable redemption prices set forth in the indentures plus accrued and unpaid interest and additional interest, if any, to the redemption dates. Additionally, the indentures provide that on or before certain fixed dates, Nationstar may redeem up to 35% of the aggregate principal amount of the unsecured senior notes with the net proceeds of certain equity offerings at fixed redemption prices, plus accrued and unpaid interest and additional interest, if any, to the redemption dates, subject to compliance with certain conditions. The ratios included in the indentures for the unsecured senior notes are incurrence-based compared to the customary ratio covenants that are often found in credit agreements that require a company to maintain a certain ratio. As of September 30, 2017 , the expected maturities of Nationstar's unsecured senior notes based on contractual maturities are as follows. Year ending December 31, Amount 2017 $ — 2018 364 2019 324 2020 397 2021 594 Thereafter 206 Unsecured senior notes principal amount 1,885 Unamortized debt issuance costs (12 ) Unsecured senior notes, net $ 1,873 Other Nonrecourse Debt A summary of the balances of other nonrecourse debt is presented below. September 30, 2017 December 31, 2016 Issue Date Maturity Date Class of Note Securitized Amount Outstanding Outstanding Participating Interest Financing (1) — — — $ — $ 7,640 $ 8,914 Securitization of nonperforming HECM loans Trust 2015-2 November 2015 November 2025 A, M1, M2 — — 114 Trust 2016-1 March 2016 February 2026 A, M1, M2 — — 194 Trust 2016-2 June 2016 June 2026 A, M1, M2 132 105 158 Trust 2016-3 August 2016 August 2026 A, M1, M2 183 153 208 Trust 2017-1 May 2017 May 2027 A, M1, M2 268 240 — Trust 2017-2 September 2017 September 2027 A, M1, M2 399 399 — Nonrecourse debt - legacy assets November 2009 October 2039 A 133 39 50 Other nonrecourse debt principal amount 8,576 9,638 Unamortized debt issuance costs (7 ) (7 ) Other nonrecourse debt, net $ 8,569 $ 9,631 (1) Amounts represent the Company's participating interest in GNMA HMBS securitized portfolios. Participating Interest Financing Participating interest financing represents the obligation of HMBS pools to third-party security holders. The Company issues HMBS in connection with the securitization of advances and accrued interest on HECM loans. Proceeds are received in exchange for securitized advances on the HECM loan amounts transferred to GNMA, and the Company retains a beneficial interest (referred to as a "participating interest") in the securitization trust in which the HECM loans and HMBS obligations are held and assume both issuer and servicer responsibilities in accordance with GNMA HMBS program guidelines. Monthly cash flows generated from the HECM loans are used to service the HMBS obligations. The interest rate is based on the underlying HMBS rate with a range of 1.5% to 7.0% . Securitizations of Nonperforming HECM Loans From time to time, Nationstar securitizes its interests in non-performing reverse mortgages. The transactions provide investors with the ability to invest in a pool of non-performing HECM loans that are covered by FHA insurance and secured by one-to-four-family residential properties and a pool of REO properties acquired through foreclosure or grant of a deed in lieu of foreclosure in connection with reverse mortgage loans that are covered by FHA insurance. The transactions provide Nationstar with access to liquidity for the non-performing HECM loan portfolio, ongoing servicing fees, and potential residual returns. The transactions are structured as secured borrowings with the reverse mortgage loans included in the consolidated financial statements as reverse mortgage interests and the related financing included in other nonrecourse debt. Interest is accrued at a rate of 2.0% to 6.5% on the outstanding securitized notes and recorded as interest expense in consolidated statements of operations. The HECM securitizations are callable with expected weighted average lives of one to three years. The Company may re-securitize the previously called loans from earlier HECM securitizations to achieve a lower cost of funds. Nonrecourse Debt–Legacy Assets During November 2009, Nationstar completed the securitization of approximately $222 of Asset-Backed Securities ("ABS"), which was accounted for as a secured borrowing. This structure resulted in Nationstar carrying the securitized mortgage loans in its consolidated bal ance sheets and recognizing the asset-backed certificates acquired by third parties. The principal and interest on these notes are paid using the cash flows from the underlying mortgage loans, which serve as collateral for the debt. The interest rate paid on the outstanding securities is 7.5% , which is subject to an available funds cap. The total outstanding principal balance on the underlying mortgage loans serving as collateral for the debt was approximately $186 and $208 at September 30, 2017 and December 31, 2016 , respectively. The carrying values on the outstanding loans was $45 and $58 at September 30, 2017 and December 31, 2016 , respectively, and the carrying value of the nonrecourse debt was $39 and $50 , respectively. Financial Covenants The Company's borrowing arrangements and credit facilities contain various financial covenants which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements. As of September 30, 2017 , the Company is in compliance with its financial covenants. Nationstar is required to maintain a minimum tangible net worth of at least $682 as of each quarter-end related to its outstanding Master Repurchase Agreements on its outstanding repurchase facilities. As of September 30, 2017 , the Company is in compliance with these minimum tangible net worth requirements. |
Payables and Accrued Liabilitie
Payables and Accrued Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Payables and Accrued Liabilities | 9. Payables and Accrued Liabilities Payables and accrued liabilities consist of the following. September 30, 2017 December 31, 2016 Payables to servicing and subservicing investors $ 572 $ 655 Loans subject to repurchase from Ginnie Mae 143 152 Accounts payable and other accrued liabilities 89 178 Accrued bonus and payroll 78 95 Accrued interest 64 65 Payable to insurance carriers and insurance cancellation reserves 60 73 Professional and legal 54 47 Payable to GSEs and securitized trusts 53 58 Lease obligations 28 24 Taxes 21 84 Repurchase reserves 15 18 MSR purchases payable including advances 11 21 Total payables and accrued liabilities $ 1,188 $ 1,470 Payables to servicing and subservicing investors and Payables to GSEs and securitized trusts Payables to servicing and subservicing investors represent amounts due to investors in connection with loans serviced that are paid from collections of the underlying loans, insurance proceeds or proceeds from property disposal. Loans subject to repurchase from Ginnie Mae See Note 6, Other Asset s for a description of assets and liabilities related to loans subject to repurchase from Ginnie Mae. Accounts payables and other accrued liabilities Other payables are primarily comprised of liabilities related to various vendor and servicing activities. Payables to insurance carriers and insurance cancellation reserves Payable to insurance carriers and insurance cancellation reserves consist of insurance premiums received from borrower payments awaiting disbursement to the insurance carrier and/or amounts due to third-party investors on liquidated loans. Repurchase reserves The activity of the outstanding repurchase reserves is set forth below. Three months ended September 30, Nine months ended September 30, Repurchase Reserves 2017 2016 2017 2016 Balance - beginning of period $ 14 $ 26 $ 18 $ 26 Provision, net of release 2 — (1 ) 1 Charge-offs (1 ) (1 ) (2 ) (2 ) Balance - end of period $ 15 $ 25 $ 15 $ 25 The provision for repurchases represents an estimate of losses to be incurred on the repurchase of loans or indemnification of purchaser's losses related to forward loans. Certain sale contracts and GSE standards require Nationstar to repurchase a loan or indemnify the purchaser or insurer for losses if a borrower fails to make initial loan payments or if the accompanying mortgage loan fails to meet certain customary representations and warranties, such as the manner of origination, the nature and extent of underwriting standards. In the event of a breach of the representations and warranties, Nationstar may be required to either repurchase the loan or indemnify the purchaser for losses it sustains on the loan. In addition, an investor may request that we refund a portion of the premium paid on the sale of mortgage loans if a loan is prepaid within a certain amount of time from the date of sale. Nationstar records a reserve for estimated losses associated with loan repurchases, purchaser indemnification and premium refunds. The provision for repurchase losses is charged against net gain on mortgage loans held for sale. A release of repurchase reserves is recorded when Company's assessment reveals that previously recorded reserves are no longer needed. A selling representation and warranty framework was introduced by the GSEs in 2013 and enhanced in 2014 that helps address concerns of loan sellers with respect to loan repurchase risk. Under the framework, a GSE will not exercise its remedies, including the issuance of repurchase requests, for breaches of certain selling representations and warranties if a mortgage meets certain eligibility requirements. For loans sold to GSEs on or after January 1, 2013, repurchase risk for Home Affordable Refinance Program ("HARP") loans is lowered if the borrower stays current on the loan for 12 months and representation and warranty risks are limited for non-HARP loans that stay current for 36 months. The Company regularly evaluates the adequacy of repurchase reserves based on trends in repurchase and indemnification requests, actual loss experience, settlement negotiation, estimated future loss exposure and other relevant factors including economic conditions. Current loss rates have significantly declined attributable to stronger underwriting standards and due to the falloff of loans underwritten prior to mortgage loan crisis period prior to 2008. The Company believes its reserve balances as of September 30, 2017 are sufficient to cover future loss exposure associated with repurchase contingencies. |
Securitizations and Financings
Securitizations and Financings | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entities and Securitizations [Abstract] | |
Securitizations and Financings | 10. Securitizations and Financings Variable Interest Entities (VIE) In the normal course of business, Nationstar enters into various types of on- and off-balance sheet transactions with special purpose entities ("SPE") determined to be VIEs, which primarily consist of securitization trusts established for a limited purpose. Generally, these SPEs are formed for the purpose of securitization transactions in which Nationstar transfers assets to an SPE, which then issues to investors various forms of debt obligations supported by those assets. Nationstar has determined that the SPEs created in connection with the (i) Nationstar Home Equity Loan Trust 2009-A, (ii) Nationstar Mortgage Advance Receivables Trust (NMART), (iii) Nationstar Agency Advance Financing Trust (NAAFT) and (iv) Nationstar Advance Agency Receivables Trust (NAART) should be consolidated as Nationstar is the primary beneficiary of each of these entities. Also, Nationstar consolidated four reverse mortgage SPEs as it is the primary beneficiary of each of these entities. These SPEs include the Nationstar HECM Loan Trusts. A summary of the assets and liabilities of Nationstar’s transactions with VIEs included in the Company’s consolidated financial statements is presented below for the dates indicated. September 30, 2017 December 31, 2016 Transfers Reverse Secured Borrowings Transfers Reverse Secured Borrowings Assets Restricted cash $ 121 $ 25 $ 190 $ 37 Reverse mortgage interests, net — 8,515 — 9,557 Advances and other receivables, net 934 — 1,065 — Mortgage loans held for investment, net 142 — 150 — Other assets 2 — 4 — Total assets $ 1,199 $ 8,540 $ 1,409 $ 9,594 Liabilities Advance facilities (1) $ 704 $ — $ 909 $ — Payables and accrued liabilities 1 — 1 — Participating interest financing (2) — 7,573 — 8,840 HECM Securitizations (HMBS) Trust 2015-2 — — — 114 Trust 2016-1 — — — 194 Trust 2016-2 — 105 — 158 Trust 2016-3 — 153 — 208 Trust 2017-1 — 240 — — Trust 2017-2 — 399 — — Nonrecourse debt–legacy assets 39 — 50 — Total liabilities $ 744 $ 8,470 $ 960 $ 9,514 (1) Advance facilities include the Nationstar agency advance financing facility and notes payable recorded by the Nationstar Mortgage Advance Receivable Trust, and the Nationstar Agency Advance Receivables Trust. Refer to Notes Payable in Note 8, Indebtedness for additional information. (2) Participating interest financing excludes premiums. A summary of the outstanding collateral and certificate balances for securitization trusts for which Nationstar was the transferor, including any retained beneficial interests and MSRs, that were not consolidated by Nationstar for the dates indicated as follows. September 30, 2017 December 31, 2016 Total collateral balances $ 2,373 $ 2,704 Total certificate balances $ 2,214 $ 2,455 Nationstar has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of September 30, 2017 , and December 31, 2016 , and therefore does not have a significant maximum exposure to loss related to these unconsolidated VIEs. A summary of mortgage loans transferred by Nationstar to unconsolidated securitization trusts that are 60 days or more past due and the credit losses incurred in the unconsolidated securitization trusts are presented below: Principal Amount of Loans 60 Days or More Past Due September 30, 2017 December 31, 2016 Unconsolidated securitization trusts $ 430 $ 548 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | 11. Stockholders' Equity Nationstar's Board of Directors approved the repurchase of up to $100 of the Company's common stock from January 1, 2017 through December 31, 2017. No shares were repurchased during the nine months ended September 30, 2017 . During the three and nine months ended September 30, 2017 , certain employees of Nationstar were granted 3 thousand and 1,062 thousand restricted stock units ("RSUs"), respectively. The RSUs generally vest in installments of 33.3% , 33.3% and 33.4% respectively on each of the first three anniversaries of the awards, provided that (i) the participant remains continuously employed with us during that time or (ii) the participant's employment has terminated by reason of retirement. In addition, upon death, disability or a change in control of the Company, the unvested shares of an award will vest. The ultimate value of the award, however, depends on the market value of Nationstar common stock on the vesting date. The Company recognized $4 and $6 of expense related to the share-based awards during the three months ended September 30, 2017 and 2016 , respectively, and $13 and $18 for the nine months ended September 30, 2017 and 2016 , respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The components of income tax expense (benefit) on continuing operations were as follows. Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Income tax expense (benefit) $ 5 $ 29 $ (4 ) $ (106 ) Effective tax rate 37.1 % 40.6 % 29.1 % 36.8 % For the three and nine months ended September 30, 2017 , the effective tax rate differed from the statutory federal rate of 35% due to recurring items, such as state tax benefit offset by excess tax deficiency related to restricted share-based compensation recognized within income rather than shareholder’s equity under ASU 2016-09. In the second quarter of 2017, we recognized approximately $4 of tax expense as a discrete item in connection with the sale of Xome's retail title division. For the three and nine months ended September 30, 2016 , the effective tax rate differed from the statutory federal rate of 35% primarily due to the elimination of the book loss of a less-than-wholly-owned subsidiary, state taxes and certain other permanent differences. The relative impact of these permanent differences on the effective tax rate was based upon forecasted income or loss before tax for the year. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 13. Fair Value Measurements Fair value is a market-based measurement, not an entity-specific measurement and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a three-tiered fair value hierarchy has been established based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs). The following describes the methods and assumptions used by Nationstar in estimating fair values. Cash and Cash Equivalents, Restricted Cash (Level 1) – The carrying amount reported in the consolidated balance sheets approximates fair value. Mortgage Loans Held for Sale (Level 2) – Nationstar originates mortgage loans in the U.S. that it intends to sell into Fannie Mae, Freddie Mac, and Ginnie Mae MBS (collectively, the "Agencies"). Additionally, Nationstar holds mortgage loans that it intends to sell into the secondary markets via whole loan sales or securitizations. Nationstar measures newly originated prime residential mortgage loans held for sale at fair value. Mortgage loans held for sale are typically pooled together and sold into certain exit markets, depending upon underlying attributes of the loan, such as agency eligibility, product type, interest rate, and credit quality. Mortgage loans held for sale are valued on a recurring basis using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. As these prices are derived from market observable inputs, Nationstar classifies these valuations as Level 2 in the fair value disclosures. The Company may acquire mortgage loans held for sale from various securitization trusts for which it acts as servicer through the exercise of various clean-up call options as permitted through the respective pooling and servicing agreements. The Company has elected to account for these loans at the lower of cost or market. Nationstar classifies these valuations as Level 2 in the fair value disclosures. Nationstar may also purchase loans out of a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. Nationstar has elected to carry these loans at fair value. See Note 5, Mortgage Loan Held for Sale and Investment for more information. Mortgage Loans Held for Investment, Net (Level 3) – Nationstar determines the fair value of loans held for investment based on the expected future cash flows discounted over the expected life of the loans at a rate commensurate with the risk of the estimated cash flows. Significant assumptions include expected prepayment speeds and discount rates. These internal inputs require the use of judgment by Nationstar and can have a significant impact on the determination of the loan’s fair value. As these fair values are derived from internally developed valuation models, Nationstar classifies these valuations as Level 3 in the fair value disclosures. See Note 5, Mortgage Loan Held for Sale and Investment for more information. Mortgage Servicing Rights – Fair Value (Level 3) – Nationstar estimates the fair value of its forward MSRs on a recurring basis using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, discount rates, ancillary revenues and costs to service. These assumptions are generated and applied based on collateral stratifications including product type, remittance type, geography, delinquency and coupon dispersion. These assumptions require the use of judgment by Nationstar and can have a significant impact on the fair value of the MSRs. Quarterly, management obtains third-party valuations to assess the reasonableness of the fair value calculations provided by the internal cash flow model. Because of the nature of the valuation inputs, Nationstar classifies these valuations as Level 3 in the fair value disclosures. See Note 2, Mortgage Servicing Rights and Related Liabilities for more information. Advances and Other Receivables, Net (Level 3) - Advances and other receivables are valued at their net realizable value after taking into consideration the reserves. Advances have no stated maturity. Their net realizable value approximates fair value as the net present value based on discounted cash flow is not materially different from the net realizable value. Reverse Mortgage Interests, Net (Level 3) – The Company’s reverse mortgage interests are primarily comprised of HECM loans that are insured by FHA and guaranteed by Ginnie Mae upon securitization. Fair value for active reverse mortgage loans is estimated based on pricing of recent securitizations with similar attributes and characteristics, such as collateral values and prepayment speeds and adjusted as necessary for differences. The recent timing of these transactions allows the pricing to consider the current interest rate risk exposures. The fair value of inactive reverse mortgage loans is established based upon a discounted par value of the loan derived from the Company’s historical loss factors experienced on foreclosed loans. Derivative Financial Instruments (Level 2) – Nationstar enters into a variety of derivative financial instruments as part of its hedging strategy and measures these instruments at fair value on a recurring basis in the balance sheet. The majority of these derivatives are exchange-traded or traded within highly active dealer markets. In order to determine the fair value of these instruments, Nationstar utilizes the exchange price or dealer market price for the particular derivative contract; therefore, these contracts are classified as Level 2. In addition, Nationstar enters into IRLCs and LPCs with prospective borrowers and other loan originators. These commitments are carried at fair value based on the fair value of underlying mortgage loans which are based on observable market data. Nationstar adjusts the outstanding IRLCs with prospective borrowers based on an expectation that it will be exercised and the loan will be funded. IRLCs and LPCs are recorded in derivative financial instruments in the consolidated balance sheets. These commitments are classified as Level 2 in the fair value disclosures, as the valuations are based on market observable inputs. Nationstar has entered into Eurodollar futures contracts as part of its hedging strategy. The futures contracts are measured at fair value on a recurring basis and classified as Level 2 in the fair value disclosures as the valuation is based on market observable data. See Note 7, Derivative Financial Instruments for more information. Advance Facilities and Warehouse Facilities (Level 2) – As the underlying warehouse and advance finance facilities bear interest at a rate that is periodically adjusted based on a market index, the carrying amount reported on the consolidated balance sheets approximates fair value. See Note 8, Indebtedness for more information. Unsecured Senior Notes (Level 1) – The fair value of unsecured senior notes, which are carried at amortized cost, is based on quoted market prices and is considered Level 1 from the market observable inputs used to determine fair value. See Note 8, Indebtedness for more information. Nonrecourse Debt – Legacy Assets (Level 3) – Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. These prices are derived from a combination of internally developed valuation models and quoted market prices, and are classified as Level 3. See Note 8, Indebtedness for more information. Excess Spread Financing (Level 3) – Nationstar estimates fair value on a recurring basis based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, average life, recapture rates and discount rate. As these prices are derived from a combination of internally developed valuation models and quoted market prices based on the value of the underlying MSRs, Nationstar classifies these valuations as Level 3 in the fair value disclosures. See Note 2, Mortgage Servicing Rights and Related Liabilities for more information. Mortgage Servicing Rights Financing Liability (Level 3) - Nationstar estimates fair value on a recurring basis based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being advance financing rates, annual advance recovery rates and working capital. As these assumptions are derived from internally developed valuation models based on the value of the underlying MSRs, Nationstar classifies these valuations as Level 3 in the fair value disclosures. See Note 2, Mortgage Servicing Rights and Related Liabilities for more information. Participating Interest Financing (Level 2) – Nationstar estimates the fair value using a market approach by utilizing the fair value of securities backed by similar participating interests in reverse mortgage loans. Nationstar classifies these valuations as Level 2 in the fair value disclosures. See Note 2, Mortgage Servicing Rights and Related Liabilities , and Note 8, Indebtedness for more information. HECM Securitizations (Level 3) – Nationstar estimates fair value of the nonrecourse debt related to HECM securitization based on the present value of future expected discounted cash flows with the discount rate approximating that of similar financial instruments. As the prices are derived from both internal models and other observable inputs, Nationstar classifies this as Level 3 in the fair value disclosures. See Note 8, Indebtedness for more information. The following table presents the estimated carrying amount and fair value of Nationstar’s financial instruments and other assets and liabilities measured at fair value on a recurring basis. September 30, 2017 Recurring Fair Value Measurements Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale (1) $ 1,645.7 $ — $ 1,645.7 $ — Mortgage servicing rights (1) 2,956.1 — — 2,956.1 Derivative financial instruments IRLCs 68.7 — 68.7 — Forward MBS trades 4.7 — 4.7 — LPCs 1.0 — 1.0 — Treasury futures 2.0 — 2.0 — Total assets $ 4,678.2 $ — $ 1,722.1 $ 2,956.1 Liabilities Derivative financial instruments Forward MBS trades $ 3.2 $ — $ 3.2 $ — LPCs 1.2 — 1.2 — Treasury futures 2.0 — 2.0 — Mortgage servicing rights financing 20.5 — — 20.5 Excess spread financing 1,045.6 — — 1,045.6 Total liabilities $ 1,072.5 $ — $ 6.4 $ 1,066.1 December 31, 2016 Recurring Fair Value Measurements Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale (1) $ 1,788.0 $ — $ 1,788.0 $ — Mortgage servicing rights (1) 3,160.0 — — 3,160.0 Derivative financial instruments IRLCs 92.2 — 92.2 — Forward MBS trades 39.2 — 39.2 — LPCs 1.9 — 1.9 — Interest rate swaps and caps 0.1 — 0.1 — Total assets $ 5,081.4 $ — $ 1,921.4 $ 3,160.0 Liabilities Derivative financial instruments IRLCs $ 1.1 $ — $ 1.1 $ — Forward MBS trades 10.0 — 10.0 — LPCs 1.5 — 1.5 — Interest rate swaps and caps 0.1 — 0.1 — Mortgage servicing rights financing 27.0 — — 27.0 Excess spread financing 1,214.0 — — 1,214.0 Total liabilities $ 1,253.7 $ — $ 12.7 $ 1,241.0 (1) Based on the nature and risks of the underlying assets and liabilities, the fair value is presented for the aggregate account. The table below presents a reconciliation for all of Nationstar’s Level 3 assets and liabilities measured at fair value on a recurring basis. Assets Liabilities Mortgage servicing rights Excess spread financing Mortgage servicing rights financing Nine months ended September 30, 2017 Balance - beginning of period $ 3,160 $ 1,214 $ 27 Total gains or losses included in earnings (361 ) — (7 ) Purchases, issuances, sales and settlements: Purchases 30 — — Issuances 151 — — Sales (24 ) — — Settlements — (168 ) — Balance - end of period $ 2,956 $ 1,046 $ 20 Assets Liabilities Mortgage servicing rights Excess spread financing Mortgage servicing rights financing Year ended December 31, 2016 Balance - beginning of period $ 3,358 $ 1,232 $ 69 Total gains or losses included in earnings (496 ) 25 (42 ) Purchases, issuances, sales and settlements: Purchases 157 — — Issuances 208 155 — Sales (67 ) — — Settlements — (198 ) — Balance - end of period $ 3,160 $ 1,214 $ 27 No transfers were made into or out of Level 3 fair value assets and liabilities for the nine months ended September 30, 2017 or the year ended December 31, 2016 , respectively. The table below presents a summary of the estimated carrying amount and fair value of Nationstar’s financial instruments. September 30, 2017 Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 224 $ 224 $ — $ — Restricted cash 356 356 — — Advances and other receivables, net 1,625 — — 1,625 Reverse mortgage interests, net 10,299 — — 10,539 Mortgage loans held for sale 1,646 — 1,646 — Mortgage loans held for investment, net 143 — — 143 Derivative financial instruments 76 — 76 — Financial liabilities Unsecured senior notes 1,885 1,920 — — Advance facilities 798 — 798 — Warehouse facilities 2,775 — 2,775 — Mortgage servicing rights financing liability 20 — — 20 Derivative financial instruments 7 — 7 — Excess spread financing 1,046 — — 1,046 Participating interest financing 7,640 — 7,840 — HECM Securitization (HMBS) Trust 2016-2 105 — — 121 Trust 2016-3 153 — — 170 Trust 2017-1 240 — — 252 Trust 2017-2 399 — — 400 Nonrecourse debt - legacy assets 39 — — 38 December 31, 2016 Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 489 $ 489 $ — $ — Restricted cash 388 388 — — Advances and other receivables, net 1,749 — — 1,749 Reverse mortgage interests, net 11,033 — — 11,232 Mortgage loans held for sale 1,788 — 1,788 — Mortgage loans held for investment, net 151 — — 153 Derivative financial instruments 133 — 133 — Financial liabilities Unsecured senior notes 2,007 2,047 — — Advance facilities 1,096 — 1,096 — Warehouse facilities 2,423 — 2,423 — Mortgage servicing rights financing liability 27 — — 27 Excess spread financing 1,214 — — 1,214 Derivative financial instruments 13 — 13 — Participating interest financing 8,914 — 9,151 — HECM Securitization (HMBS) Trust 2015-2 114 — — 125 Trust 2016-1 194 — — 203 Trust 2016-2 158 — — 156 Trust 2016-3 208 — — 205 Nonrecourse debt - legacy assets 50 — — 50 |
Capital Requirements
Capital Requirements | 9 Months Ended |
Sep. 30, 2017 | |
Mortgage Banking [Abstract] | |
Capital Requirements | 14. Capital Requirements Certain Nationstar secondary market investors require minimum net worth ("capital") requirements, as specified in the respective selling and servicing agreements. In addition, these investors may require capital ratios in excess of the stated requirements to approve large servicing transfers. To the extent that these requirements are not met, Nationstar's secondary market investors may utilize a range of remedies ranging from sanctions, suspension or ultimately termination of Nationstar's selling and servicing agreements, which would prohibit Nationstar from further originating or securitizing these specific types of mortgage loans or being an approved servicer. Among Nationstar's various capital requirements related to its outstanding selling and servicing agreements, the most restrictive of these requires Nationstar to maintain a minimum adjusted net worth balance of $1,000 . As of September 30, 2017 , Nationstar was in compliance with its selling and servicing capital requirements. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies Litigation and Regulatory Matters Nationstar and its subsidiaries are routinely and currently involved in a significant number of legal proceedings concerning matters that arise in the ordinary course of business. The legal proceedings are at varying stages of adjudication, arbitration or investigation. These actions and proceedings are generally based on alleged violations of consumer protection, securities, employment, contract, tort, common law fraud and other numerous laws, including, without limitation, the Equal Credit Opportunity Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act, Real Estate Settlement Procedures Act, Service Member’s Civil Relief Act, Telephone Consumer Protection Act, Truth in Lending Act, Financial Institutions Reform, Recovery, and Enforcement Act of 1989, unfair, deceptive or abusive acts or practices in violation of the Dodd-Frank Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Home Mortgage Disclosure Act, Title 11 of the United States Code (aka the "Bankruptcy Code"), False Claims Act and Making Home Affordable loan modification programs. In addition, along with others in our industry, the Company is subject to repurchase and indemnification claims and may continue to receive claims in the future, regarding alleged breaches of representations and warranties relating to the sale of mortgage loans, the placement of mortgage loans into securitization trusts or the servicing of mortgage loans securitizations. The Company is also subject to legal actions or proceedings related to loss sharing and indemnification provisions of our various acquisitions. Certain of the pending or threatened legal proceedings include claims for substantial compensatory, punitive and/or, statutory damages or claims for an indeterminate amount of damages. Nationstar’s business is also subject to extensive examinations, investigations and reviews by various federal, state and local regulatory and enforcement agencies. Nationstar has historically had a number of open investigations with various regulators or enforcement agencies. We have experienced an increase in regulatory and governmental investigations, subpoenas, examinations and other inquiries. Nationstar is currently the subject of various regulatory or governmental investigations, subpoenas, examinations and inquiries related to its residential loan servicing and origination practices, bankruptcy and collections practices, its financial reporting and other aspects of its businesses. These matters include investigations by the Consumer Financial Protection Bureau (the "CFPB"), the Securities and Exchange Commission, the Executive Office of the United States Trustees, the Department of Justice, the U.S. Department of Housing and Urban Development, the multistate coalition of mortgage banking regulators, various State Attorneys General, the New York Department of Financial Services, and the California Department of Business Oversight. These specific matters and other pending or potential future investigations, subpoenas, examinations or inquiries may lead to administrative, civil or criminal proceedings or settlements, and possibly result in remedies including fines, penalties, restitution, or alterations in our business practices, and in additional expenses and collateral costs. Responding to these matters requires Nationstar to devote substantial legal and regulatory resources, resulting in higher costs and lower net cash flows. For example, Nationstar continues to progress towards resolution of certain legacy regulatory matters involving regulatory examination findings for alleged violations of certain laws related to our business practices. In March 2017, Nationstar entered into a consent order with the CFPB for failure to comply with certain data reporting requirements of the Home Mortgage Disclosure Act. Additionally, Nationstar is currently in negotiations with the California Department of Business Oversight to resolve two examinations, one of which dates to 2012. The Company is also in negotiations with the New York Department of Financial Services regarding two examinations. In both instances, the resolution will involve the payment of civil monetary penalties and other remedial measures. However, management does not believe that resolution of either of these matters would have a material effect on the Company’s results of operations or financial position. In addition, Nationstar is a defendant in a class action proceeding originally filed in state court in March 2012, and then removed to the United States District Court for the Eastern District of Washington under the caption Laura Zamora Jordan v. Nationstar Mortgage LLC. The suit was filed on behalf of a class of Washington borrowers and challenges property preservation measures we took, as loan servicer, after the borrowers defaulted and our vendors determined that the borrowers had vacated or abandoned their properties. The case raises claims for (i) common law trespass, (ii) statutory trespass, and (iii) violation of Washington’s Consumer Protection Act, and seeks recovery of actual, statutory, and treble damages, as well as attorneys’ fees and litigation costs. The Company believes that is has meritorious defenses and will continue to vigorously defend itself in this matter. An adverse judgment in this matter could have a material adverse effect on the Company’s results of operations or financial position. However, if Nationstar receives a final adverse judgment, it intends to seek reimbursement from the owners of the loans it serviced, but there can be no assurance that the Company would prevail with any claims for reimbursement. The Company seeks to resolve all claims, demands, litigation and regulatory and governmental matters in the manner management believes is in the best interest of the Company and contests liability, allegations of wrongdoing and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter. The Company has entered into agreements with a number of entities and regulatory agencies that toll applicable limitations periods with respect to their claims. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with outstanding legal and regulatory and governmental proceedings utilizing the latest information available. Where available information indicates that it is probable, a liability has been incurred, and the Company can reasonably estimate the amount of the loss, an accrued liability is established. The actual costs of resolving these proceedings may be substantially higher or lower than the amounts accrued. As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is both probable and estimable. If, at the time of evaluation, the loss contingency is not both probable and reasonably estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and reasonably estimable. Once the matter is deemed to be both probable and reasonably estimable, the Company will establish an accrued liability and record a corresponding amount to litigation related expense. The Company will continue to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Litigation related expense, which includes legal settlements and the fees paid to external legal service providers, of $10 and $29 for the three and nine months ended September 30, 2017 , respectively, and $16 and $49 for the three and nine months ended September 30, 2016 , respectively, was included in general and administrative expenses on the consolidated statements of operations. For a number of matters for which a loss is probable or reasonably possible in future periods, whether in excess of a related accrued liability or where there is no accrued liability, the Company may be able to estimate a range of possible loss. In determining whether it is possible to provide an estimate of loss or range of possible loss, the Company reviews and evaluates its material litigation and regulatory matters on an ongoing basis, in conjunction with any outside counsel handling the matter. For those matters for which an estimate is possible, management currently believes the aggregate range of reasonably possible loss is $23 to $62 in excess of the accrued liability (if any) related to those matters as of September 30, 2017 . This estimated range of possible loss is based upon currently available information and is subject to significant judgment, numerous assumptions and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary substantially from the current estimate. Those matters for which an estimate is not possible are not included within the estimated range. Therefore, this estimated range of possible loss represents what management believes to be an estimate of possible loss only for certain matters meeting these criteria. It does not represent the Company's maximum loss exposure and the Company cannot provide assurance that its litigations reserves will not need to be adjusted in the future. Thus, our exposure and ultimate losses may be higher, possibly significantly so, than the amounts accrued or this aggregate amount. In our experience, legal proceedings are inherently unpredictable. One or more of the following factors frequently contribute to this inherent unpredictability: the proceeding is in its early stages; the damages sought are unspecified, unsupported or uncertain; it is unclear whether a case brought as a class action will be allowed to proceed on that basis or, if permitted to proceed as a class action, how the class will be defined; the other party is seeking relief other than or in addition to compensatory damages (including, in the case of regulatory and governmental investigations and inquiries, the possibility of fines and penalties); the matter presents meaningful legal uncertainties, including novel issues of law; we have not engaged in meaningful settlement discussions; discovery has not started or is not complete; there are significant facts in dispute; predicting possible outcomes depends on making assumptions about future decisions of courts or regulatory bodies or the behavior of other parties; and there are a large number of parties named as defendants (including where it is uncertain how damages or liability, if any, will be shared among multiple defendants). Generally, the less progress that has been made in the proceedings or the broader the range of potential results, the harder it is for us to estimate losses or ranges of losses that it is reasonably possible we could incur. Based on current knowledge, and after consultation with counsel, management believes that the current legal accrued liability, within payables and accrued liabilities, is appropriate, and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the consolidated financial condition of the Company, although the outcome of such proceedings could be material to the Company’s operating results and cash flows for a particular period depending, on among other things, the level of the Company’s revenues or income for such period. However, in the event of significant developments on existing cases, it is possible that the ultimate resolution, if unfavorable, may be material to the Company’s consolidated financial statements. Other Loss Contingencies As part of the Company's ongoing operations, it acquires servicing rights of forward and reverse mortgage loan portfolios that are subject to indemnification based on the representations and warranties of the seller. From time to time, the Company will seek recovery under these representations and warranties for incurred costs. The Company believes all recorded balances sought from sellers represent valid claims. However, the Company acknowledges that the claims process can be a prolonged due to the required time to perfect claims at the loan level. Because of the required time to perfect or remediate these claims, management relies on the sufficiency of documentation supporting the claim, current negotiations with the counterparty and other evidence to evaluate whether a reserve is required for non-recoverable balances. In the absence of successful negotiations with the seller, all amounts claimed may not be recovered. Balances may be written-off and charged against earnings when management identifies amounts where recoverability from the seller is not likely. As of September 30, 2017 , the Company believes all recorded balances for which recovery is sought from the seller are valid claims and no evidence suggests additional reserves are warranted at this time. Loan and Other Commitments Nationstar enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. Nationstar also enters into LPCs with prospective sellers. These loan commitments are treated as derivatives and are carried at fair value. See Note 7, Derivative Financial Instruments for more information. Nationstar has certain reverse MSRs and reverse mortgage loans related to approximately $35,906 and $38,940 of UPB in reverse mortgage loans as of September 30, 2017 and December 31, 2016 , respectively. As servicer for these reverse mortgage loans, among other things, the Company is obligated to fund borrowers' draws to the loan customers as required in accordance with the loan agreement. As of September 30, 2017 and December 31, 2016 , the Company’s maximum unfunded advance obligation to fund borrower draws related to these MSRs and loans was approximately $3,921 and $4,396 , respectively. Upon funding any portion of these draws, the Company expects to securitize and sell the advances in transactions that will be accounted for as secured borrowings. |
Disposition and Exit Costs
Disposition and Exit Costs | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposition and Exit Costs | 16. Disposition and Exit Costs Nationstar periodically initiates programs to reduce costs and improve operating effectiveness in order to improve current operating performance and to respond to changes in the Company's business model. These cost reduction initiatives include the restructuring of our facilities lease portfolio, closing of offices and the termination of portions of Nationstar’s workforce. As part of these restructuring plans, Nationstar has incurred severance and other exit costs totaling $0.3 and $7 for the three and nine months ended September 30, 2017 , respectively. Included in the severance and other exit costs for the nine months ended September 30, 2017 is a total cost of $3 associated with the closure of the Company's facility in Buffalo, New York and its facilities lease. In June 2017, the Company sold Xome's retail title division and recognized $8 gain, which was recorded in other income (expense) in the consolidated statements of operations. The disposal of the retail title division allows Xome to better align the title business with its operations. In connection with the sale, the Company wrote off net assets of $7 , including customer relationships of $4 in intangible assets and $2 goodwill. |
Business Segment Reporting
Business Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Business Segment Reporting | 17. Business Segment Reporting Nationstar’s segments are based upon Nationstar’s organizational structure, which focuses primarily on the services offered. The accounting policies of each reportable segment are consistent with those of Nationstar except for 1) expenses for consolidated back-office operations and general overhead-type expenses such as executive administration and accounting, and 2) revenues generated on inter-segment services performed. Expenses are allocated to individual segments based on the estimated value of services performed, including estimated utilization of square footage and corporate personnel as well as the equity invested in each segment. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties. The following tables present financial information by segment. Three months ended September 30, 2017 Servicing Originations Xome Eliminations Total Operating Segments Corporate and Other Consolidated Revenues: Service related, net $ 191 $ 16 $ 65 $ (20 ) $ 252 $ — $ 252 Net gain on mortgage loans held for sale — 134 — 20 154 — 154 Total revenues 191 150 65 — 406 — 406 Total Expenses 185 106 54 — 345 23 368 Other income (expenses): Interest income 141 14 — — 155 2 157 Interest expense (130 ) (13 ) — — (143 ) (38 ) (181 ) Other (2 ) — — — (2 ) — (2 ) Total Other Income (expenses), net 9 1 — — 10 (36 ) (26 ) Income (loss) before income tax expense (benefit) $ 15 $ 45 $ 11 $ — $ 71 $ (59 ) $ 12 Depreciation and amortization $ 6 $ 3 $ 3 $ — $ 12 $ 3 $ 15 Total assets 15,147 4,644 382 (2,948 ) 17,225 779 18,004 Three months ended September 30, 2016 (1) Servicing Originations Xome Eliminations Total Operating Segments Corporate and Other Consolidated Revenues Service related, net $ 211 $ 16 $ 107 $ (23 ) $ 311 $ (1 ) $ 310 Net gain on mortgage loans held for sale — 208 — 23 231 1 232 Total revenues 211 224 107 — 542 — 542 Total Expenses 150 141 87 — 378 29 407 Other income (expenses) Interest income 82 17 — — 99 4 103 Interest expense (108 ) (16 ) — — (124 ) (41 ) (165 ) Other — (1 ) — — (1 ) (1 ) (2 ) Total Other Income (expenses), net (26 ) — — — (26 ) (38 ) (64 ) Income (loss) before income tax expense (benefit) $ 35 $ 83 $ 20 $ — $ 138 $ (67 ) $ 71 Depreciation and amortization $ 6 $ 3 $ 4 $ — $ 13 $ 4 $ 17 Total assets 12,250 4,523 345 (2,432 ) 14,686 1,160 15,846 (1) The Company periodically evaluates corporate allocation methods in order to appropriately align corporate costs with its business. Certain 2016 costs within salaries, wages and benefits and operational expenses were reclassified between segments to conform to current year allocation methods. Nine months ended September 30, 2017 Servicing Originations Xome Eliminations Total Operating Segments Corporate and Other Consolidated Revenues Service related, net $ 537 $ 47 $ 226 $ (63 ) $ 747 $ 1 $ 748 Net gain on mortgage loans held for sale — 402 — 63 465 — 465 Total revenues 537 449 226 — 1,212 1 1,213 Total Expenses 518 326 193 — 1,037 72 1,109 Other income (expenses) Interest income 384 39 — — 423 12 435 Interest expense (402 ) (39 ) — — (441 ) (116 ) (557 ) Other (2 ) — 8 — 6 (2 ) 4 Total Other Income (expenses), net (20 ) — 8 — (12 ) (106 ) (118 ) Income (loss) before income tax expense (benefit) $ (1 ) $ 123 $ 41 $ — $ 163 $ (177 ) $ (14 ) Depreciation and amortization $ 16 $ 8 $ 10 $ — $ 34 $ 10 $ 44 Total assets 15,147 4,644 382 (2,948 ) 17,225 779 18,004 Nine months ended September 30, 2016 (1) Servicing Originations Xome Eliminations Total Operating Segments Corporate and Other Consolidated Revenues Service related, net $ 225 $ 47 $ 327 $ (93 ) $ 506 $ 1 $ 507 Net gain on mortgage loans held for sale — 526 — 93 619 — 619 Total revenues 225 573 327 — 1,125 1 1,126 Total Expenses 477 394 274 — 1,145 87 1,232 Other income (expenses) Interest income 254 48 — — 302 11 313 Interest expense (325 ) (44 ) — — (369 ) (124 ) (493 ) Other — (1 ) — — (1 ) (1 ) (2 ) Total Other Income (expenses), net (71 ) 3 — — (68 ) (114 ) (182 ) Income (loss) before income tax expense (benefit) $ (323 ) $ 182 $ 53 $ — $ (88 ) $ (200 ) $ (288 ) Depreciation and amortization $ 17 $ 9 $ 16 $ — $ 42 $ 6 $ 48 Total assets 12,250 4,523 345 (2,432 ) 14,686 1,160 15,846 (1) The Company periodically evaluates corporate allocation methods in order to appropriately align corporate costs with its business. Certain 2016 costs within salaries, wages and benefits and operational expenses were reclassified between segments to conform to current year allocation methods. |
Guarantor Financial Statement I
Guarantor Financial Statement Information | 9 Months Ended |
Sep. 30, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Guarantor Financial Statement Information | 18. Guarantor Financial Statement Information As of September 30, 2017 , Nationstar Mortgage LLC and Nationstar Capital Corporation (1) (collectively, the "Issuer"), both wholly-owned subsidiaries of Nationstar, have issued $1,873 aggregate principal amount of unsecured senior notes, net of repayments, which mature on various dates through June 2022. The unsecured senior notes are unconditionally guaranteed, jointly and severally, by all of Nationstar Mortgage LLC’s existing and future domestic subsidiaries other than its securitization and certain finance subsidiaries, certain other restricted subsidiaries, excluded restricted subsidiaries and subsidiaries that in the future Nationstar Mortgage LLC designates as unrestricted subsidiaries. All guarantor subsidiaries are 100% owned by Nationstar Mortgage LLC. Nationstar and its two direct wholly-owned subsidiaries are guarantors of the unsecured senior notes as well. Presented below are the condensed consolidating financial statements of Nationstar, Nationstar Mortgage LLC and the guarantor subsidiaries for the periods indicated. In the condensed consolidating financial statements presented below, Nationstar allocates income tax expense to Nationstar Mortgage LLC as if it were a separate tax payer entity pursuant to ASC 740, Income Taxes. (1) Nationstar Capital Corporation has no assets, operations or liabilities other than being a co-obligor of the unsecured senior notes. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2017 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Assets Cash and cash equivalents $ — $ 201 $ 1 $ 22 $ — $ 224 Restricted cash — 211 — 145 — 356 Mortgage servicing rights — 2,931 — 30 — 2,961 Advances and other receivables, net — 1,625 — — — 1,625 Reverse mortgage interests, net — 9,357 — 942 — 10,299 Mortgage loans held for sale at fair value — 1,646 — — — 1,646 Mortgage loans held for investment, net — 1 — 142 — 143 Property and equipment, net — 108 — 19 — 127 Derivative financial instruments at fair value — 76 — — — 76 Other assets — 445 177 731 (806 ) 547 Investment in subsidiaries 1,801 507 — — (2,308 ) — Total assets $ 1,801 $ 17,108 $ 178 $ 2,031 $ (3,114 ) $ 18,004 Liabilities and Stockholders' Equity Unsecured senior notes $ — $ 1,873 $ — $ — $ — $ 1,873 Advance facilities, net — 93 — 704 — 797 Warehouse facilities, net — 2,774 — — — 2,774 Payables and accrued liabilities — 1,149 2 37 — 1,188 MSR related liabilities - nonrecourse at fair value — 1,046 — 20 — 1,066 Mortgage servicing liabilities — 53 — — — 53 Derivative financial instruments, at fair value — 7 — — — 7 Other nonrecourse debt, net — 7,632 — 937 — 8,569 Payables to affiliates 124 680 — 2 (806 ) — Total liabilities 124 15,307 2 1,700 (806 ) 16,327 Total stockholders' equity 1,677 1,801 176 331 (2,308 ) 1,677 Total liabilities and stockholders' equity $ 1,801 $ 17,108 $ 178 $ 2,031 $ (3,114 ) $ 18,004 (1) Issuer balances exclude the balances of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2017 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Revenues: Service related, net $ — $ 181 $ 7 $ 64 $ — $ 252 Net gain on mortgage loans held for sale — 153 — 1 — 154 Total revenues — 334 7 65 — 406 Expenses: Salaries, wages benefits — 153 1 29 — 183 General and administrative — 154 4 27 — 185 Total expenses — 307 5 56 — 368 Other income (expenses): Interest income — 145 — 12 — 157 Interest expense — (168 ) — (13 ) — (181 ) Other income (expense) — (3 ) — 1 — (2 ) Gain (loss) from subsidiaries 7 11 — — (18 ) — Total other income (expenses), net 7 (15 ) — — (18 ) (26 ) Income (loss) before income tax expense (benefit) 7 12 2 9 (18 ) 12 Less: Income tax expense — 5 — — — 5 Net income (loss) 7 7 2 9 (18 ) 7 Less: Net income attributable to noncontrolling interests — — — — — — Net income (loss) attributable to Nationstar $ 7 $ 7 $ 2 $ 9 $ (18 ) $ 7 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED SPETEMBER 30, 2017 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Revenues: Service related, net $ — $ 497 $ 21 $ 230 $ — $ 748 Net gain on mortgage loans held for sale — 464 — 1 — 465 Total revenues — 961 21 231 — 1,213 Expenses: Salaries, wages benefits — 451 3 103 — 557 General and administrative — 440 10 102 — 552 Total expenses — 891 13 205 — 1,109 Other income (expenses): Interest income — 396 — 39 — 435 Interest expense — (515 ) — (42 ) — (557 ) Other income (expense) — (5 ) — 9 — 4 Gain (loss) from subsidiaries (11 ) 40 — — (29 ) — Total other income (expenses), net (11 ) (84 ) — 6 (29 ) (118 ) Income (loss) before income tax expense (benefit) (11 ) (14 ) 8 32 (29 ) (14 ) Less: Income tax expense — (4 ) — — — (4 ) Net income (loss) (11 ) (10 ) 8 32 (29 ) (10 ) Less: Net income attributable to noncontrolling interests — 1 — — — 1 Net income (loss) attributable to Nationstar $ (11 ) $ (11 ) $ 8 $ 32 $ (29 ) $ (11 ) (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2017 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Operating Activities Net income (loss) attributable to Nationstar $ (11 ) $ (11 ) $ 8 $ 32 $ (29 ) $ (11 ) Reconciliation of net income (loss) to net cash attributable to operating activities: (Gain) loss from subsidiaries 11 (40 ) — — 29 — Net income attributable to non-controlling interest — 1 — — — 1 Net gain on mortgage loans held for sale — (464 ) — (1 ) — (465 ) Reverse mortgage loan interest income — (368 ) — — — (368 ) (Gain) loss on sale of assets — 1 — (9 ) — (8 ) Provision for servicing reserves — 113 — — — 113 Fair value changes and amortization of mortgage servicing rights — 361 — — — 361 Fair value changes in excess spread financing — 2 — (2 ) — — Fair value change in mortgage servicing rights financing liability — (7 ) — — — (7 ) Amortization of premiums and accretion of discount — 55 — 8 — 63 Depreciation and amortization — 33 — 11 — 44 Share-based compensation — 9 — 4 — 13 Other losses — 5 — — — 5 Repurchases of forward loans assets out of Ginnie Mae securitizations — (943 ) — — — (943 ) Repurchases of reverse loan assets out of Ginnie Mae securitizations, net of assignments to prior servicers — (2,468 ) — — — (2,468 ) Mortgage loans originated and purchased, net of fees, and other purchase-related activities — (14,002 ) — — — (14,002 ) Sales proceeds and loan payment proceeds for mortgage loans held for sale and held for investment — 15,459 — 13 — 15,472 Excess tax benefit (deficiency) from share based compensation — (1 ) — — — (1 ) Changes in assets and liabilities: Advances and other receivables, net — 55 — — — 55 Reverse mortgage interests, net — 3,719 — (225 ) — 3,494 Other assets 4 (99 ) (9 ) 87 — (17 ) Payables and accrued liabilities — (273 ) — (11 ) — (284 ) Net cash attributable to operating activities 4 1,137 (1 ) (93 ) — 1,047 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2017 (Continued) Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Investing activities Property and equipment additions, net of disposals — (31 ) — (3 ) — (34 ) Purchase of forward mortgage servicing rights, net of liabilities incurred — (22 ) — (6 ) — (28 ) Net proceeds from acquisition of reverse mortgage servicing portfolio and HECM related receivables — 16 — — — 16 Proceeds on sale of forward and reverse mortgage servicing rights — 25 — — — 25 Proceeds on sale of assets — 16 — — — 16 Net cash attributable to investing activities — 4 — (9 ) — (5 ) Financing activities Increase in warehouse facilities — 351 — — — 351 Decrease in advance facilities — (93 ) — (205 ) — (298 ) Proceeds from HECM securitizations — (6 ) — 707 — 701 Repayment of HECM securitizations — — — (484 ) — (484 ) Proceeds from issuance of participating interest financing in reverse mortgage interests, net — 437 — — — 437 Repayment of participating interest financing in reverse mortgage interests, net — (1,730 ) — — — (1,730 ) Repayment of excess spread financing — (168 ) — — — (168 ) Repayment of nonrecourse debt–legacy assets — — — (12 ) — (12 ) Repurchase of unsecured senior notes — (122 ) — — — (122 ) Transfers (to) from restricted cash, net — (46 ) — 84 — 38 Surrender of shares relating to stock vesting (4 ) — — — — (4 ) Debt financing costs — (11 ) — — — (11 ) Dividends to noncontrolling interests — (5 ) — — — (5 ) Net cash attributable to financing activities (4 ) (1,393 ) — 90 — (1,307 ) Net decrease in cash and cash equivalents — (252 ) (1 ) (12 ) — (265 ) Cash and cash equivalents - beginning of period — 453 2 34 — 489 Cash and cash equivalents - end of period $ — $ 201 $ 1 $ 22 $ — $ 224 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 2016 Nationstar Issuer (1) Guarantor (Subsidiaries of Issuer) Non-Guarantor (Subsidiaries of Issuer) Eliminations Consolidated Assets Cash and cash equivalents $ — $ 453 $ 2 $ 34 $ — $ 489 Restricted cash — 159 — 229 — 388 Mortgage servicing rights — 3,142 — 24 — 3,166 Advances and other receivables, net — 1,749 — — — 1,749 Reverse mortgage interests, net — 10,316 — 717 — 11,033 Mortgage loans held for sale at fair value — 1,787 — 1 — 1,788 Mortgage loans held for investment, net — 1 — 150 — 151 Property and equipment, net — 113 — 23 — 136 Derivative financial instruments at fair value — 133 — — — 133 Other assets — 444 323 838 (1,045 ) 560 Investment in subsidiaries 1,801 634 — — (2,435 ) — Total assets $ 1,801 $ 18,931 $ 325 $ 2,016 $ (3,480 ) $ 19,593 Liabilities and stockholders' equity Unsecured senior notes $ — $ 1,990 $ — $ — $ — $ 1,990 Advance facilities, net — 187 — 909 — 1,096 Warehouse facilities, net — 2,421 — — — 2,421 Payables and accrued liabilities — 1,420 2 48 — 1,470 MSR related liabilities - nonrecourse at fair value — 1,219 — 22 — 1,241 Mortgage servicing liabilities — 48 — — — 48 Derivative financial instruments, at fair value — 13 — — — 13 Other nonrecourse debt, net — 8,907 — 724 — 9,631 Payables to affiliates 118 925 — 2 (1,045 ) — Total liabilities 118 17,130 2 1,705 (1,045 ) 17,910 Total stockholders' equity 1,683 1,801 323 311 (2,435 ) 1,683 Total liabilities and stockholders' equity $ 1,801 $ 18,931 $ 325 $ 2,016 $ (3,480 ) $ 19,593 (1) Issuer balances exclude the balances of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2016 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Revenues: Service related, net $ — $ 196 $ 5 $ 109 $ — $ 310 Net gain on mortgage loans held for sale — 222 — 10 — 232 Total revenues — 418 5 119 — 542 Expenses: Salaries, wages and benefits — 156 1 54 — 211 General and administrative — 143 2 51 — 196 Total expenses — 299 3 105 — 407 Other income (expenses): Interest income — 91 — 12 — 103 Interest expense — (146 ) — (19 ) — (165 ) Other expense — (2 ) — — — (2 ) Gain (loss) from subsidiaries 45 9 — — (54 ) — Total other income (expenses), net 45 (48 ) — (7 ) (54 ) (64 ) Income (loss) before income tax expense (benefit) 45 71 2 7 (54 ) 71 Less: Income tax (benefit) — 29 — — — 29 Net income (loss) 45 42 2 7 (54 ) 42 Less: Net loss attributable to noncontrolling interests — (3 ) — — — (3 ) Net income (loss) attributable to Nationstar $ 45 $ 45 $ 2 $ 7 $ (54 ) $ 45 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2016 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Revenues: Service related, net $ — $ 156 $ 19 $ 332 $ — $ 507 Net gain on mortgage loans held for sale — 590 — 29 — 619 Total revenues — 746 19 361 — 1,126 Expenses: Salaries, wages benefits — 448 3 162 — 613 General and administrative — 453 6 160 — 619 Total expenses — 901 9 322 — 1,232 Other income (expenses): Interest income — 276 — 37 — 313 Interest expense — (437 ) — (56 ) — (493 ) Other expense — (2 ) — — — (2 ) Gain (loss) from subsidiaries (179 ) 30 — — 149 — Total other income (expenses), net (179 ) (133 ) — (19 ) 149 (182 ) Income (loss) before income tax expense (benefit) (179 ) (288 ) 10 20 149 (288 ) Less: Income tax expense — (106 ) — — — (106 ) Net income (loss) (179 ) (182 ) 10 20 149 (182 ) Less: Net loss attributable to noncontrolling interests — (3 ) — — — (3 ) Net income (loss) attributable to Nationstar $ (179 ) $ (179 ) $ 10 $ 20 $ 149 $ (179 ) (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2016 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Operating Activities Net income (loss) attributable to Nationstar $ (179 ) $ (179 ) $ 10 $ 20 $ 149 $ (179 ) Reconciliation of net income (loss) to net cash attributable to operating activities: (Gain)/loss from subsidiaries 179 (30 ) — — (149 ) — Net loss attributable to non-controlling interest — (3 ) — — — (3 ) Net gain on mortgage loans held for sale — (590 ) — (29 ) — (619 ) Reverse mortgage loan interest income — (251 ) — — — (251 ) Loss on sale of assets — 2 — — — 2 Provision for servicing reserves — 101 — — — 101 Fair value changes and amortization of mortgage servicing rights — 778 — — — 778 Fair value changes in excess spread financing — (74 ) — — — (74 ) Fair value changes in mortgage servicing rights financing liability — (2 ) — — — (2 ) Amortization of premiums and accretion of discount — (7,254 ) — 7,302 — 48 Depreciation and amortization — 32 — 16 — 48 Share-based compensation — 13 — 5 — 18 Repurchases of forward loans assets out of Ginnie Mae securitizations — (1,138 ) — — — (1,138 ) Repurchases of reverse loans assets out of Ginnie Mae securitizations, net of assignments to prior servicers — (1,609 ) — — — (1,609 ) Mortgage loans originated and purchased, net of fees, and other purchase-related activities — (14,296 ) — (767 ) — (15,063 ) Sale proceeds and loan payment proceeds for mortgage loans held for sale and held for investment — 22,684 — (6,416 ) — 16,268 Excess tax benefit from share based compensation — 4 — — — 4 Changes in assets and liabilities: Advances and other receivables, net — 504 — — — 504 Reverse mortgage interests, net — 2,137 — (115 ) — 2,022 Other assets 117 (682 ) (10 ) 439 — (136 ) Payables and accrued liabilities — (135 ) — (4 ) — (139 ) Net cash attributable to operating activities 117 12 — 451 — 580 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2016 (Continued) Nationstar Issuer(1) Guarantor Non-Guarantor Eliminations Consolidated Investing Activities Property and equipment additions, net of disposals — (40 ) — (9 ) — (49 ) Purchase of forward mortgage servicing rights, net of liabilities incurred — (36 ) — — — (36 ) Proceeds on sale of forward and reverse mortgage servicing rights — 25 — — — 25 Net cash attributable to investing activities — (51 ) — (9 ) — (60 ) Financing Activities Increase in warehouse facilities — 774 — (56 ) — 718 Decrease in advance facilities — (29 ) — (429 ) — (458 ) Proceeds from issuance of HECM securitizations — (4 ) — 728 — 724 Repayment of HECM securitizations — — — (624 ) — (624 ) Proceeds from issuance of participating interest financing in reverse mortgage interests, net — 337 — — — 337 Repayment of participating interest financing in reverse mortgage interests, net — (817 ) — — — (817 ) Repayment of excess spread financing — (146 ) — — — (146 ) Repayment of nonrecourse debt - legacy assets — 1 — (13 ) — (12 ) Repurchase of unsecured senior notes — (29 ) — — — (29 ) Repurchase of common stock (114 ) — — — — (114 ) Transfers to restricted cash, net — 33 — (33 ) — — Excess tax deficiency from share based compensation — (4 ) — — — (4 ) Surrender of shares relating to stock vesting (3 ) — — — — (3 ) Debt financing costs — (10 ) — — — (10 ) Net cash attributable to financing activities (117 ) 106 — (427 ) — (438 ) Net increase in cash and cash equivalents — 67 — 15 — 82 Cash and cash equivalents - beginning of period — 597 1 15 — 613 Cash and cash equivalents - end of period $ — $ 664 $ 1 $ 30 $ — $ 695 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. |
Transactions with Affiliates
Transactions with Affiliates | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Transactions with Affiliates | 19. Transactions with Affiliates Nationstar enters into arrangements with Fortress, its subsidiaries managed funds, or affiliates for purposes of financing the Company's MSR acquisitions and performing services as a subservicer. An affiliate of Fortress holds a majority of the outstanding common shares of the Company. The following summarizes the transactions with affiliates of Fortress. Newcastle Investment Corp. ("Newcastle") Nationstar is the loan servicer for several securitized loan portfolios managed by Newcastle, which is managed by an affiliate of Fortress. Nationstar receives a monthly net servicing fee equal to 0.5% per annum on the unpaid principal balance of the Portfolios, which was $511 and $576 , at September 30, 2017 and December 31, 2016 respectively. For the three months ended September 30, 2017 and 2016 , Nationstar received servicing fees and other performance incentive fees of $0.6 and $0.7 , respectively. For the nine months ended September 30, 2017 and 2016 , Nationstar recognized revenue of $2 and $2 related to these servicing arrangements, respectively. New Residential Investment Corp. ("New Residential") Excess Spread Financing Nationstar has entered into several agreements with certain entities managed by New Residential, in which New Residential and/or certain funds managed by Fortress own an interest (each a "New Residential Entity"). Nationstar sold to the related New Residential Entity the right to receive a portion of the excess cash flow generated from certain acquired MSRs after a receipt of a fixed base servicing fee per loan. Nationstar, as the servicer of the loans, retains all ancillary revenues and the remaining portion of the excess cash flow after payment of the fixed base servicing fee and also provides all advancing functions for the portfolio. The related New Residential Entity does not have prior or ongoing obligations associated with these MSR portfolios. Should Nationstar refinance any loan in such portfolios, subject to certain limitations, Nationstar will be required to transfer the new loan or a replacement loan of similar economic characteristics into the portfolios. The new or replacement loan will be governed by the same terms set forth in the agreements described above. The fair value of the outstanding liability related to these agreements was $899 and $1,064 at September 30, 2017 and December 31, 2016 , respectively. For the three months ended September 30, 2017 and 2016 , Nationstar fees paid to New Residential Entity totaled $59 and $71 , respectively. Fees paid to New Residential Entity totaled $186 and $222 for the nine months ended September 30, 2017 and 2016 , respectively, which are recorded as a reduction to servicing fee revenue, net. Mortgage Servicing Rights Financing From December 2013 through June 2014, Nationstar entered into agreements to sell a contractually specified base fee component of certain MSRs and servicing advances under specified terms to a joint venture capitalized by New Residential and certain unaffiliated third-parties. Nationstar continues to be the named servicer and, for accounting purposes, ownership of the mortgage servicing rights continues to reside with Nationstar. Accordingly, Nationstar accounts for the MSRs and the related MSRs financing liability on its consolidated balance sheets. Nationstar will continue to sell future servicing advances to New Residential. The fair value of the outstanding liability related to the sale agreement was $20 and $27 at September 30, 2017 and December 31, 2016 , respectively. Nationstar did not enter into any additional supplemental agreements with these affiliates in 2017 and 2016. Subservicing and Servicing In January 2017, the Company entered into a subservicing agreement with a subsidiary of New Residential. Under the agreement, the Company initially estimated that it will subservice approximately $111 billion of UPB of MSRs that New Residential has agreed to purchase, including approximately $97 billion UPB of MSRs from CitiMortgage, Inc. Based on the updated estimates, the Company expects to subservice a total of $107 billion UPB. The Company has boarded a total $72 billion UPB loans associated with this subservicing agreement, including $29 billion UPB loans boarded in the third quarter of 2017. The Company anticipates that the remaining $35 billion UPB will be boarded in the fourth quarter of 2017. In May 2014, Nationstar entered into a servicing arrangement with New Residential whereby Nationstar will service residential mortgage loans acquired by New Residential and/or its various affiliates and trust entities. For the three months ended September 30, 2017 and 2016 , Nationstar recognized revenue of $11 and $1 related to these servicing arrangements, respectively. For the nine months ended September 30, 2017 and 2016 , Nationstar recognized revenue of $20 and $4 related to these servicing arrangements, respectively. Nationstar acted as servicer or master servicer for New Residential related to the collapse of certain securitization trusts pursuant to the exercise by New Residential of its clean up call rights. The Company earned revenue of $0.4 and $0.5 for these administration services during the three months ended September 30, 2017 and 2016 . The Company earned revenue of $1 and $0.7 for these administration services during the nine months ended September 30, 2017 and 2016 , respectively. OneMain Financial Holdings, LLC Nationstar receives a monthly per loan subservicing fee and other performance incentive fees subject to agreements with OneMain Financial Holdings, LLC. For the three months ended September 30, 2017 and 2016 , Nationstar recognized revenue of $0.2 and $0.5 , respectively, in additional servicing and other performance incentive fees related to these portfolios. For the nine months ended September 30, 2017 and 2016 , Nationstar recognized revenue of $1 and $1 related to these servicing arrangements, respectively. |
Nature of Business and Basis 26
Nature of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated interim financial statements of Nationstar have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Nationstar's Annual Report on Form 10-K for the year ended December 31, 2016 . The interim consolidated financial statements are unaudited; however, in the opinion of management, all adjustments considered necessary for a fair presentation of the results of the interim periods have been included. Certain prior period amounts have been reclassified to conform to the current period presentation. Dollar amounts are reported in millions, except per share data and other key metrics, unless otherwise noted. Nationstar evaluated subsequent events through the date these interim consolidated financial statements were issued. The Company describes its significant accounting policies in Note 2 of the notes to the consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2016 . During the nine months ended September 30, 2017 , no significant changes were made to those accounting policies except that the Company updated its policy on advances and other receivables to include more detailed description of its position on write-offs of advance balances. Nationstar records reserves for advances and other receivables and evaluates the sufficiency of such reserves through consideration of both historical and expected recovery rates on claims filed with government agencies, government sponsored enterprises, vendors, prior servicers and other counterparties. Recovery of advances and other receivables is subject to significant judgment and estimates based on the Company’s assessment of its compliance with servicing guidelines, its ability to produce the necessary documentation to support claims, its ability to support amounts from prior servicers and to effectively negotiate settlements, as needed. Each period, management reviews recorded advances and other receivables and upon determination that no further recourse for recovery is available from all means known to management, the recorded balances associated with these receivables are written-off against the reserve. The Company periodically evaluates corporate allocation methods in order to appropriately align corporate costs with its business. Certain 2016 costs within salaries, wages and benefits and operational expenses were reclassified between segments to conform to current year allocation methods. Such reclassifications had no impact on previously reported net income or shareholders' equity. See Note 17, Business Segment Reporting for information on the changes in the Company's reportable segments. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of Nationstar, its wholly-owned subsidiaries, and other entities in which the Company has a controlling financial interest, and those variable interest entities ("VIE") where Nationstar is the primary beneficiary. Nationstar applies the equity method of accounting to investments where it is able to exercise significant influence, but not control, over the policies and procedures of the entity and owns less than 50% of the voting interests. Intercompany balances and transactions on consolidated entities have been eliminated. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that Nationstar became the primary beneficiary through the date Nationstar ceases to be the primary beneficiary. |
Recent Accounting Guidance Adopted and Not Yet Adopted | Recent Accounting Guidance Adopted Effective January 1, 2017, the Company prospectively adopted Accounting Standards Update No. 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting (ASU 2016-09), which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, calculation of earnings per share, classification of awards as either equity or liabilities, and classification of cash flows. Amendments related to accounting for excess tax benefits or deficiencies have been adopted prospectively, resulting in the recognition of $1 of excess tax deficiencies within income tax expense rather than additional paid in capital for the nine months ended September 30, 2017 . The impact on diluted earnings per share is $0.01 per share for the period. Excess tax benefits or deficiencies related to share-based payments are now included in operating cash flows rather than financing cash flows. This change has been applied prospectively in accordance with ASU 2016-09 and prior periods have not been adjusted. The amendments allow for a one-time accounting policy election to either account for forfeitures as they occur or continue to estimate forfeitures as required by current guidance. The Company has elected to continue estimating forfeitures under the current guidance. Recent Accounting Guidance Not Yet Adopted Accounting Standards Update No. 2014-09, 2016-08, 2016-10, 2016-12 and 2016-20, collectively implemented as FASB Accounting Standards Codification Topic 606 ("ASC 606") Revenue from Contracts with Customers, provides guidance for revenue recognition. This ASC’s core principle requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects consideration to which the company expects to be entitled in exchange for those goods or services. The standard also clarifies the principal versus agent considerations, providing the evaluation must focus on whether the entity has control of the goods or services before they are transferred to the customer. The new standard permits the use of either the modified retrospective or full retrospective transition method. The Company's revenue is generated from loan servicing, loan originations, and services provided by Xome. Servicing revenue is comprised of servicing fees and other ancillary fees in connection with our servicing activities as well as fees earned under subservicing arrangements. Origination revenue is comprised of fee income earned at origination of a loan, interest income earned for the period the loans are held, and gain on sale on loans upon disposition of the loan. Xome's revenue is comprised of income earned from real estate exchange, real estate services and real estate technology and support. We have performed a preliminary review of the new guidance as compared to our current accounting policies and are currently evaluating all services rendered to our customers as well as underlying contracts to determine the impact of this standard to our revenue recognition process. The majority of services rendered by the Company in connection with originations and servicing are not within the scope of ASC 606. However, through our review, we have identified one service offering (Services and Software as a Service) under the Xome operating segment that is within the scope of ASC 606. Although revenue recognition may be impacted to some degree for this service offering, we do not anticipate the impact to be materially different from the current revenue recognition processes. Our implementation efforts to date include identification of revenue streams within the scope of the guidance, and we are in the process of reviewing revenue contracts to assess the impact at a customer level. The Company expects to adopt the standard in the first quarter of 2018 with a cumulative effect adjustment to opening retained earnings, as necessary. Accounting Standards Update No. 2016-02, Leases (ASU 2016-02), primarily impacts lessee accounting by requiring the recognition of a right-of-use asset and a corresponding lease liability on the balance sheet for long-term lease agreements. The lease liability will be equal to the present value of all reasonably certain lease payments. The right-of-use asset will be based on the liability, subject to adjustment for initial direct costs. Lease agreements with terms 12 months or less are permitted to be excluded from the balance sheet. In general, leases will be amortized on a straight-line basis with the exception of finance lease agreements. ASU 2016-02 is effective for interim periods beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of this ASU on the consolidated financial statements and to its debt covenants and capitalization requirements. Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (ASU 2016-13), requires expected credit losses for financial instruments held at the reporting date to be measured based on historical experience, current conditions and reasonable and supportable forecasts. The update eliminates the probable initial recognition threshold in current GAAP and instead reflects an entity’s current estimate of all expected credit losses. Previously, when credit losses were measured under GAAP, an entity generally only considered past events and current conditions in measuring the incurred loss. ASU 2016-13 is effective for interim periods beginning after December 15, 2019. The Company is currently evaluating the potential impact of ASU 2016-13 on its consolidated financial statements. Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15) and Accounting Standards Update No 2016-18 Statement of Cash Flows (Topic 230) Restricted Cash (ASU 2016-18) both relate to the Statement of Cash Flows (Topic 230) and are intended to provide specific guidance to reduce diversity in practice. ASU 2016-15 addresses the following eight cash flow classification issues: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of life insurance claims, (5) proceeds from the settlement of corporate owned life insurance policies, including bank-owned life insurance policies, (6) distributions received from equity method investees, (7) beneficial interests in securitization transactions and (8) separately identifiable cash flows and application of the predominance principle. This ASU is effective for fiscal years beginning after December 15, 2017, and will require adoption on a retrospective basis. The Company is currently evaluating the impact of the application of ASU 2016-15 will have on the Company’s classification of cash flows. ASU 2016-18 addresses the classification and presentation of changes in restricted cash on the statement of cash flows. This new standard requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. ASU 2016-18 will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the potential impact of ASU 2016-18 on its consolidated financial statements. Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment , simplifies the accounting for goodwill impairment for all entities by requiring impairment charges to be based on the first step in today’s two-step impairment test under Accounting Standards Codification (ASC) 350. The standard has tiered effective dates, starting in 2020 for calendar-year public business entities that meet the definition of an SEC filer. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company is currently evaluating the potential impact of ASU 2017-04 on our consolidated financial statements. ASU 2017-04 is effective for the Company for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. ASU 2017-04 will be adopted prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. |
Fair Value | Fair value is a market-based measurement, not an entity-specific measurement and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a three-tiered fair value hierarchy has been established based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs). The following describes the methods and assumptions used by Nationstar in estimating fair values. Cash and Cash Equivalents, Restricted Cash (Level 1) – The carrying amount reported in the consolidated balance sheets approximates fair value. Mortgage Loans Held for Sale (Level 2) – Nationstar originates mortgage loans in the U.S. that it intends to sell into Fannie Mae, Freddie Mac, and Ginnie Mae MBS (collectively, the "Agencies"). Additionally, Nationstar holds mortgage loans that it intends to sell into the secondary markets via whole loan sales or securitizations. Nationstar measures newly originated prime residential mortgage loans held for sale at fair value. Mortgage loans held for sale are typically pooled together and sold into certain exit markets, depending upon underlying attributes of the loan, such as agency eligibility, product type, interest rate, and credit quality. Mortgage loans held for sale are valued on a recurring basis using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. As these prices are derived from market observable inputs, Nationstar classifies these valuations as Level 2 in the fair value disclosures. The Company may acquire mortgage loans held for sale from various securitization trusts for which it acts as servicer through the exercise of various clean-up call options as permitted through the respective pooling and servicing agreements. The Company has elected to account for these loans at the lower of cost or market. Nationstar classifies these valuations as Level 2 in the fair value disclosures. Nationstar may also purchase loans out of a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. Nationstar has elected to carry these loans at fair value. See Note 5, Mortgage Loan Held for Sale and Investment for more information. Mortgage Loans Held for Investment, Net (Level 3) – Nationstar determines the fair value of loans held for investment based on the expected future cash flows discounted over the expected life of the loans at a rate commensurate with the risk of the estimated cash flows. Significant assumptions include expected prepayment speeds and discount rates. These internal inputs require the use of judgment by Nationstar and can have a significant impact on the determination of the loan’s fair value. As these fair values are derived from internally developed valuation models, Nationstar classifies these valuations as Level 3 in the fair value disclosures. See Note 5, Mortgage Loan Held for Sale and Investment for more information. Mortgage Servicing Rights – Fair Value (Level 3) – Nationstar estimates the fair value of its forward MSRs on a recurring basis using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, discount rates, ancillary revenues and costs to service. These assumptions are generated and applied based on collateral stratifications including product type, remittance type, geography, delinquency and coupon dispersion. These assumptions require the use of judgment by Nationstar and can have a significant impact on the fair value of the MSRs. Quarterly, management obtains third-party valuations to assess the reasonableness of the fair value calculations provided by the internal cash flow model. Because of the nature of the valuation inputs, Nationstar classifies these valuations as Level 3 in the fair value disclosures. See Note 2, Mortgage Servicing Rights and Related Liabilities for more information. Advances and Other Receivables, Net (Level 3) - Advances and other receivables are valued at their net realizable value after taking into consideration the reserves. Advances have no stated maturity. Their net realizable value approximates fair value as the net present value based on discounted cash flow is not materially different from the net realizable value. Reverse Mortgage Interests, Net (Level 3) – The Company’s reverse mortgage interests are primarily comprised of HECM loans that are insured by FHA and guaranteed by Ginnie Mae upon securitization. Fair value for active reverse mortgage loans is estimated based on pricing of recent securitizations with similar attributes and characteristics, such as collateral values and prepayment speeds and adjusted as necessary for differences. The recent timing of these transactions allows the pricing to consider the current interest rate risk exposures. The fair value of inactive reverse mortgage loans is established based upon a discounted par value of the loan derived from the Company’s historical loss factors experienced on foreclosed loans. Derivative Financial Instruments (Level 2) – Nationstar enters into a variety of derivative financial instruments as part of its hedging strategy and measures these instruments at fair value on a recurring basis in the balance sheet. The majority of these derivatives are exchange-traded or traded within highly active dealer markets. In order to determine the fair value of these instruments, Nationstar utilizes the exchange price or dealer market price for the particular derivative contract; therefore, these contracts are classified as Level 2. In addition, Nationstar enters into IRLCs and LPCs with prospective borrowers and other loan originators. These commitments are carried at fair value based on the fair value of underlying mortgage loans which are based on observable market data. Nationstar adjusts the outstanding IRLCs with prospective borrowers based on an expectation that it will be exercised and the loan will be funded. IRLCs and LPCs are recorded in derivative financial instruments in the consolidated balance sheets. These commitments are classified as Level 2 in the fair value disclosures, as the valuations are based on market observable inputs. Nationstar has entered into Eurodollar futures contracts as part of its hedging strategy. The futures contracts are measured at fair value on a recurring basis and classified as Level 2 in the fair value disclosures as the valuation is based on market observable data. See Note 7, Derivative Financial Instruments for more information. Advance Facilities and Warehouse Facilities (Level 2) – As the underlying warehouse and advance finance facilities bear interest at a rate that is periodically adjusted based on a market index, the carrying amount reported on the consolidated balance sheets approximates fair value. See Note 8, Indebtedness for more information. Unsecured Senior Notes (Level 1) – The fair value of unsecured senior notes, which are carried at amortized cost, is based on quoted market prices and is considered Level 1 from the market observable inputs used to determine fair value. See Note 8, Indebtedness for more information. Nonrecourse Debt – Legacy Assets (Level 3) – Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. These prices are derived from a combination of internally developed valuation models and quoted market prices, and are classified as Level 3. See Note 8, Indebtedness for more information. Excess Spread Financing (Level 3) – Nationstar estimates fair value on a recurring basis based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, average life, recapture rates and discount rate. As these prices are derived from a combination of internally developed valuation models and quoted market prices based on the value of the underlying MSRs, Nationstar classifies these valuations as Level 3 in the fair value disclosures. See Note 2, Mortgage Servicing Rights and Related Liabilities for more information. Mortgage Servicing Rights Financing Liability (Level 3) - Nationstar estimates fair value on a recurring basis based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being advance financing rates, annual advance recovery rates and working capital. As these assumptions are derived from internally developed valuation models based on the value of the underlying MSRs, Nationstar classifies these valuations as Level 3 in the fair value disclosures. See Note 2, Mortgage Servicing Rights and Related Liabilities for more information. Participating Interest Financing (Level 2) – Nationstar estimates the fair value using a market approach by utilizing the fair value of securities backed by similar participating interests in reverse mortgage loans. Nationstar classifies these valuations as Level 2 in the fair value disclosures. See Note 2, Mortgage Servicing Rights and Related Liabilities , and Note 8, Indebtedness for more information. HECM Securitizations (Level 3) – Nationstar estimates fair value of the nonrecourse debt related to HECM securitization based on the present value of future expected discounted cash flows with the discount rate approximating that of similar financial instruments. As the prices are derived from both internal models and other observable inputs, Nationstar classifies this as Level 3 in the fair value disclosures. See Note 8, Indebtedness for more information. |
Mortgage Servicing Rights ("M27
Mortgage Servicing Rights ("MSRs") and Related Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Transfers and Servicing [Abstract] | |
Schedule of Servicing Assets at Fair Value | The following table provides a breakdown of credit and interest sensitive UPBs for Nationstar's forward owned MSRs. Forward MSRs - Sensitivity Pools September 30, 2017 December 31, 2016 UPB Fair Value UPB Fair Value Credit sensitive $ 174,318 $ 1,640 $ 198,935 $ 1,818 Interest sensitive 114,132 1,316 113,141 1,342 Total $ 288,450 $ 2,956 $ 312,076 $ 3,160 The following table sets forth the carrying value of Nationstar's MSRs and the related liabilities. MSRs and Related Liabilities September 30, 2017 December 31, 2016 Forward MSRs - fair value $ 2,956 $ 3,160 Reverse MSRs - amortized cost 5 6 Mortgage servicing rights $ 2,961 $ 3,166 Mortgage servicing liabilities - amortized cost $ 53 $ 48 Excess spread financing - fair value $ 1,046 $ 1,214 Mortgage servicing rights financing liability - fair value 20 27 MSR related liabilities (nonrecourse) $ 1,066 $ 1,241 The following table sets forth the activities of forward MSRs during the nine months ended September 30, 2017 and 2016. Nine months ended September 30, Forward MSRs - Fair Value 2017 2016 Fair value - beginning of period $ 3,160 $ 3,358 Additions: Servicing retained from mortgage loans sold 151 142 Purchases of servicing rights 30 39 Dispositions: Sales of servicing assets (24 ) (24 ) Changes in fair value: Changes in valuation inputs or assumptions used in the valuation model (113 ) (494 ) Other changes in fair value (248 ) (296 ) Fair value - end of period $ 2,956 $ 2,725 |
Schedule of Assumptions for Fair Value of Mortgage Service Rights | Nationstar used the following key weighted-average inputs and assumptions in estimating the fair value of MSRs. Credit Sensitive September 30, 2017 December 31, 2016 Discount rate 11.4 % 11.6 % Total prepayment speeds 15.4 % 15.4 % Expected weighted-average life 5.6 years 6.0 years Interest Sensitive Discount rate 9.2 % 9.3 % Total prepayment speeds 11.3 % 10.7 % Expected weighted-average life 6.5 years 6.8 years The following table sets forth the weighted average assumptions used in the valuation of the mortgage servicing rights financing liability. Mortgage Servicing Rights Financing Assumptions September 30, 2017 December 31, 2016 Advance financing rates 3.5 % 3.2 % Annual advance recovery rates 23.3 % 23.9 % The range of key assumptions used in Nationstar's valuation of excess spread financing are as follows. Excess Spread Financing Prepayment Speeds Average Discount Recapture Rate September 30, 2017 Low 6.7% 4.3 8.5% 7.1% High 21.1% 6.8 14.1% 30.0% Weighted-average 13.9% 5.9 10.8% 18.8% December 31, 2016 Low 6.1% 4.1 8.5% 6.7% High 21.2% 8.5 14.1% 29.8% Weighted-average 13.9% 6.3 10.8% 19.0% |
Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets | The following table shows the hypothetical effect on the fair value of the forward MSRs fair value when applying certain unfavorable variations of key assumptions to these assets at September 30, 2017 and December 31, 2016 . Discount Rate Total Prepayment Speeds Forward MSRs - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change September 30, 2017 Mortgage servicing rights $ (106 ) $ (205 ) $ (122 ) $ (235 ) December 31, 2016 Mortgage servicing rights $ (114 ) $ (221 ) $ (117 ) $ (224 ) The following table shows the hypothetical effect on the excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities at September 30, 2017 and December 31, 2016 . Discount Rate Prepayment Speeds Excess Spread Financing - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change September 30, 2017 Excess spread financing $ 39 $ 81 $ 36 $ 75 December 31, 2016 Excess spread financing $ 49 $ 101 $ 41 $ 85 |
Activity of MSRs at Amortized Cost | The following table sets forth the activities of reverse MSRs and mortgage servicing liabilities ("MSLs") for the nine months ended September 30, 2017 and 2016 . Management evaluates reverse MSRs and MSLs each reporting period for impairment. Based on management's assessment at September 30, 2017 , no impairment was required to be recorded for reverse MSRs. Nine months ended September 30, 2017 2016 Assets Liabilities Assets Liabilities Reverse MSRs and Liabilities - Amortized Cost Balance - beginning of period $ 6 $ 48 $ 9 $ 25 Increase in MSL (1) — 6 — — Amortization/accretion (1 ) (1 ) (2 ) (14 ) Balance - end of the period $ 5 $ 53 $ 7 $ 11 Fair value - end of period $ 5 $ 9 $ 25 $ 2 (1) The Company executed an asset purchase agreement in December 2016 with a large financial institution, acquiring the servicing rights related to a $9,305 UPB reverse loan portfolio of HECM loans owned by a GSE. In connection with the acquisition, the Company recorded a $17 MSL reflecting the fair value associated with this reverse servicing portfolio on the date of acquisition. In September 2017, the Company executed another mortgage servicing rights purchase agreement to acquire servicing rights on a reverse mortgage portfolio of $747 UPB. |
Schedule of Fees Earned in Exchange for Servicing Financial Assets | The following table sets forth the items comprising of revenue associated with servicing loan portfolios. Three months ended September 30, Nine months ended September 30, Servicing Revenue 2017 2016 2017 2016 Contractually specified servicing fees (1) $ 251 $ 254 $ 759 $ 786 Other service-related income (1) 44 67 142 214 Incentive and modification income (1) 19 35 63 82 Late fees (1) 22 20 67 57 Reverse servicing fees 16 11 43 46 Mark-to-market (2) (48 ) (9 ) (176 ) (502 ) Counterparty revenue share (3) (53 ) (75 ) (174 ) (223 ) Amortization, net of accretion (4) (60 ) (92 ) (187 ) (235 ) Total servicing revenue $ 191 $ 211 $ 537 $ 225 (1) Amounts include subservicing related revenues. (2) Mark-to-market includes fair value adjustments on MSR, excess spread financing and MSR financing liabilities. The amount of MSR MTM reflected is net of cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio and these incurred losses have been transferred to reserves on advances and other receivables. These cumulative incurred losses totaled $20 and $27 for the three months ended September 30, 2017 and 2016 , respectively, and $69 and $85 for the nine months ended September 30, 2017 and 2016 , respectively. (3) Counterparty revenue share represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements and the payments made associated with MSRs financing arrangements. (4) Accretion was $41 and $46 for the three months ended September 30, 2017 and 2016 , respectively, and $123 and $149 for the nine months ended September 30, 2017 and 2016 , respectively. |
Advances and Other Receivable28
Advances and Other Receivables, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | The activity of the reserves for advances and other receivables is set forth below. Three months ended September 30, Nine months ended September 30, Advances and Other Receivables Reserves 2017 2016 2017 2016 Balance - beginning of period (1) $ 236 $ 238 $ 184 $ 163 Provision and other additions (2) 30 37 106 126 Write-offs (13 ) (95 ) (37 ) (109 ) Balance - end of period $ 253 $ 180 $ 253 $ 180 (1) Beginning reserve balance as of January 1, 2016 was updated to reflect the reclassification of reserves for advances and other receivables from the MSR. (2) A provision of $20 and $27 was recorded through the MTM adjustment in service related revenues for the three months ended September 30, 2017 and 2016 , respectively, and $69 and $85 for the nine months ended September 30, 2017 and 2016 , respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves from other balance sheet accounts. Advances and other receivables, net consists of the following. September 30, 2017 December 31, 2016 Servicing advances $ 1,489 $ 1,614 Receivables from agencies, investors and prior servicers 389 319 Reserves (253 ) (184 ) Total advances and other receivables, net $ 1,625 $ 1,749 |
Reverse Mortgage Interests, N29
Reverse Mortgage Interests, Net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Reverse Mortgage Interests [Abstract] | |
Reverse Mortgage Interest | The activity of the reserves for reverse mortgage interests is set forth below. Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Reserves for reverse mortgage interests - beginning of period $ 149 $ 71 $ 131 $ 53 Provision (1) 22 28 44 43 Write-offs (2) (29 ) (7 ) (33 ) (7 ) Other (3) (54 ) 1 (54 ) 4 Reserves for reverse mortgage interests - end of period $ 88 $ 93 $ 88 $ 93 (1) During the three months ended September 30, 2017 , reserves increased attributable to the Company refining its method to estimate losses from a pool-level view to a loan-level view based on characteristics of individual loans. (2) The write-offs in the three months ended September 30, 2017 were primarily attributable to transactions that were fully reserved and processed after conversion to the Company's new internally developed reverse servicing platform. (3) During the three months ended September 30, 2017 , the Company reclassified certain amounts within reverse mortgage interests to be comparable to prior periods and also updated its initial estimate of the relative fair value allocation related to the servicing portfolio acquired in December 2016 and reclassified $61 from reserves to a purchase price discount. This amount is now included in the net basis of unsecuritized interest of reverse mortgage interests. Reverse mortgage interests, net consist of the following. September 30, 2017 December 31, 2016 Participating interests in HMBS $ 7,573 $ 8,839 Other interests securitized 985 753 Unsecuritized interests 1,829 1,572 Reserves (88 ) (131 ) Total reverse mortgage interests, net $ 10,299 $ 11,033 Participating interests in HMBS Participating interests in HMBS consist of the Company's reverse mortgage interests in HECM loans which have been tra Unsecuritized interests in reverse mortgages consist of the following. September 30, 2017 December 31, 2016 Repurchased HECM loans $ 1,407 $ 1,000 HECM related receivables 291 301 Funded borrower draws not yet securitized 113 236 Foreclosed assets 18 35 Total unsecuritized interests $ 1,829 $ 1,572 |
Mortgage Loans Held for Sale 30
Mortgage Loans Held for Sale and Investment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Mortgage Loans Held for Sale and Investment [Abstract] | |
Schedule of Mortgage Loans Held-for-Sale | The total UPB of mortgage loans held for sale on nonaccrual status was as follows for the dates indicated. September 30, 2017 December 31, 2016 Mortgage Loans Held for Sale - Unpaid Principal Balance UPB Fair Value UPB Fair Value Non-accrual $ 81 $ 78 $ 106 $ 103 Mortgage loans held for sale are recorded at fair value as set forth below. September 30, 2017 December 31, 2016 Mortgage loans held for sale – unpaid principal balance $ 1,592 $ 1,759 Mark-to-market adjustment (1) 54 29 Total mortgage loans held for sale $ 1,646 $ 1,788 (1) The mark-to-market adjustment is recorded in net gain on mortgage loans held for sale in the consolidated statements of operations. |
Reconciliation of Mortgage Loans Held-for-Sale to Cash Flow | The following table details a roll forward of the change in the account balance of mortgage loans held for sale. Nine months ended September 30, Mortgage loans held for sale 2017 2016 Balance - beginning of period $ 1,788 $ 1,430 Mortgage loans originated and purchased, net of fees 13,988 14,977 Loans sold (15,107 ) (15,743 ) Repurchase of loans out of Ginnie Mae securitizations 943 1,138 Transfer of mortgage loans held for sale to advances/accounts receivable related to claims (1) (16 ) (16 ) Net transfer of mortgage loans held for sale from REO in other assets (2) 20 9 Changes in fair value 16 14 Other purchase-related activities (3) 14 30 Balance - end of period $ 1,646 $ 1,839 (1) Amounts are comprised of claims made on certain government insured mortgage loans upon completion of the REO sale. (2) Net amounts are comprised of REO in the sales process which are transferred to other assets and certain government insured mortgage REO which are transferred from other assets upon completion of the sale so that the claims process can begin. (3) Amounts are comprised primarily of non-Ginnie Mae loan purchases and buyouts. |
Schedule of Loans Held for Investment | The following sets forth the composition of mortgage loans held for investment, net. September 30, 2017 December 31, 2016 Mortgage loans held for investment, net – UPB $ 198 $ 216 Transfer discount: Non-accretable (43 ) (52 ) Accretable (12 ) (13 ) Total mortgage loans held for investment, net $ 143 $ 151 |
Changes in Accretable Yield on Mortgage Loans Held for Investment | The changes in accretable yield discount on loans transferred to mortgage loans held for investment are set forth below. Nine months ended September 30, Accretable Yield Discount 2017 2016 Balance - beginning of the period $ (13 ) $ (15 ) Accretion 2 2 Reclassifications from non-accretable discount (1 ) (1 ) Balance - end of the period $ (12 ) $ (14 ) |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following. September 30, 2017 December 31, 2016 Accrued revenues $ 152 $ 165 Loans subject to repurchase right from Ginnie Mae 143 152 Goodwill 72 74 Prepaid expenses 28 16 Deposits 22 25 Real estate owned (REO), net 21 30 Intangible assets 20 28 Receivables from affiliates, net 6 6 Other 83 64 Total other assets $ 547 $ 560 |
Derivative Financial Instrume32
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table provides the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses). Expiration Dates Outstanding Notional Fair Value Recorded Gains / (Losses) Nine months ended September 30, 2017 Assets Mortgage loans held for sale, net Loan sale commitments (1) 2017 $ 1 $ 0.1 $ — Derivative financial instruments IRLCs 2017 2,531 68.7 (23.5 ) Forward sales of MBS 2017 2,524 4.7 (34.5 ) LPCs 2017 132 1.0 (0.9 ) Treasury futures 2017 255 2.0 2.0 Eurodollar futures (1) 2017-2021 11 — — Interest rate swaps (1) 2017 — — (0.1 ) Liabilities Derivative financial instruments IRLCs (1) 2017 7 — 1.1 Forward sales of MBS 2017 1,137 3.2 6.8 LPCs 2017 335 1.2 0.3 Treasury futures 2017 479 2.0 (2.0 ) Eurodollar futures (1) 2017-2021 45 — — Interest rate swaps (1) 2017 — — 0.1 Year ended December 31, 2016 Assets Mortgage loans held for sale Loan sale commitments 2017 $ 1 $ 0.1 $ (0.2 ) Derivative financial instruments IRLCs 2017 3,675 92.2 3.1 Forward sales of MBS 2017 2,580 39.2 33.1 LPCs 2017 203 1.9 (2.0 ) Eurodollar futures (1) 2017-2021 35 — (0.1 ) Interest rate swaps 2017 9 0.1 (0.4 ) Liabilities Derivative financial instruments IRLCs 2017 176 1.1 (1.1 ) Forward sales of MBS 2017 1,689 10.0 (6.3 ) LPCs (1) 2017 111 1.5 — Eurodollar futures (1) 2017-2021 27 — 0.1 Interest rate swaps 2017 9 0.1 0.4 (1) Fair values or recorded gains/(losses) of derivative instruments are less than $0.1 for the specified dates. |
Indebtedness (Tables)
Indebtedness (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes Payable September 30, 2017 December 31, 2016 Advance Facilities Interest Rate Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral pledged Nationstar agency advance receivables trust LIBOR+2.0% to 2.6% November 2017 (1) Servicing advance receivables $ 650 $ 440 $ 503 $ 485 $ 578 Nationstar mortgage advance receivable trust LIBOR+1.4% to 6.5% November 2018 Servicing advance receivables 500 163 286 260 301 Nationstar agency advance financing facility LIBOR+1.0% to 7.4% January 2018 Servicing advance receivables 200 101 145 164 186 MBS servicer advance facility (2014) LIBOR+3.5% October 2018 Servicing advance receivables 125 38 131 88 142 MBS advance financing facility LIBOR+2.5% March 2018 Servicing advance receivables 80 56 56 55 60 MBS advance financing facility (2012) (2) LIBOR+5.0% January 2017 Servicing advance receivables — — — 44 52 Advance facilities principal amount 798 1,121 1,096 1,319 Unamortized debt issuance costs (1 ) — — — Advance facilities, net $ 797 $ 1,121 $ 1,096 $ 1,319 September 30, 2017 December 31, 2016 Warehouse Facilities Interest Rate Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral pledged $1,200 warehouse facility LIBOR+2.0% to 2.9% October 2018 Mortgage loans or MBS $ 1,200 $ 719 $ 762 $ 682 $ 747 $1,000 warehouse facility LIBOR+2.1% to 2.4% September 2018 Mortgage loans or MBS 1,000 317 325 250 256 $750 warehouse facility LIBOR+2.0% to 2.8% November 2017 (1) Mortgage loans or MBS 750 514 555 410 415 $500 warehouse facility LIBOR+1.8% to 2.8% September 2018 Mortgage loans or MBS 500 221 226 229 237 $500 warehouse facility LIBOR+1.8% to 3.3% June 2018 Mortgage loans or MBS 500 384 417 496 539 $350 warehouse facility LIBOR+2.5% to 2.8% April 2018 Mortgage loans or MBS 350 186 202 12 13 $450 warehouse facility LIBOR+2.5% to 2.6% November 2017 (1) Mortgage loans or MBS 450 281 292 173 189 $300 warehouse facility LIBOR+2.3% January 2018 Mortgage loans or MBS 300 127 152 153 180 $200 warehouse facility LIBOR+1.5% April 2019 Mortgage loans or MBS 200 22 23 7 8 $40 warehouse facility LIBOR+3.0% December 2017 Mortgage loans or MBS 40 4 6 11 18 Warehouse facilities principal amount 2,775 2,960 2,423 2,602 Unamortized debt issuance costs (1 ) — (2 ) — Warehouse facilities, net $ 2,774 $ 2,960 $ 2,421 $ 2,602 Pledged Collateral: Mortgage loans, net $ 1,602 $ 1,692 $ 1,693 $ 1,427 Reverse mortgage interests, net 1,173 1,268 730 834 MSR and other collateral — — — 341 (1) This facility has not matured as of the date this report is filed. (2) This MBS Advance Financing facility was paid off in full in February 2017. The Company entered into two new warehouse facility agreements in the third quarter of 2017 with a total capacity amount of $200 . As of September 30, 2017 , the Company has not borrowed or pledged any collateral against these facilities. |
Schedule of Unsecured Senior Notes | A summary of the balances of unsecured senior notes is presented below. September 30, 2017 December 31, 2016 $600 face value, 6.500% interest rate payable semi-annually, due July 2021 $ 594 $ 595 $400 face value, 7.875% interest rate payable semi-annually, due October 2020 397 400 $475 face value, 6.500% interest rate payable semi-annually, due August 2018 364 461 $375 face value, 9.625% interest rate payable semi-annually, due May 2019 324 345 $300 face value, 6.500% interest rate payable semi-annually, due June 2022 206 206 Unsecured senior notes principal amount 1,885 2,007 Unamortized debt issuance costs (12 ) (17 ) Unsecured senior notes, net $ 1,873 $ 1,990 |
Schedule of Maturities of Long-term Debt | As of September 30, 2017 , the expected maturities of Nationstar's unsecured senior notes based on contractual maturities are as follows. Year ending December 31, Amount 2017 $ — 2018 364 2019 324 2020 397 2021 594 Thereafter 206 Unsecured senior notes principal amount 1,885 Unamortized debt issuance costs (12 ) Unsecured senior notes, net $ 1,873 |
Schedule of Other Nonrecourse Debt | A summary of the balances of other nonrecourse debt is presented below. September 30, 2017 December 31, 2016 Issue Date Maturity Date Class of Note Securitized Amount Outstanding Outstanding Participating Interest Financing (1) — — — $ — $ 7,640 $ 8,914 Securitization of nonperforming HECM loans Trust 2015-2 November 2015 November 2025 A, M1, M2 — — 114 Trust 2016-1 March 2016 February 2026 A, M1, M2 — — 194 Trust 2016-2 June 2016 June 2026 A, M1, M2 132 105 158 Trust 2016-3 August 2016 August 2026 A, M1, M2 183 153 208 Trust 2017-1 May 2017 May 2027 A, M1, M2 268 240 — Trust 2017-2 September 2017 September 2027 A, M1, M2 399 399 — Nonrecourse debt - legacy assets November 2009 October 2039 A 133 39 50 Other nonrecourse debt principal amount 8,576 9,638 Unamortized debt issuance costs (7 ) (7 ) Other nonrecourse debt, net $ 8,569 $ 9,631 (1) Amounts represent the Company's participating interest in GNMA HMBS securitized portfolios. |
Payables and Accrued Liabilit34
Payables and Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Payables and Accrued Liabilities | Payables and accrued liabilities consist of the following. September 30, 2017 December 31, 2016 Payables to servicing and subservicing investors $ 572 $ 655 Loans subject to repurchase from Ginnie Mae 143 152 Accounts payable and other accrued liabilities 89 178 Accrued bonus and payroll 78 95 Accrued interest 64 65 Payable to insurance carriers and insurance cancellation reserves 60 73 Professional and legal 54 47 Payable to GSEs and securitized trusts 53 58 Lease obligations 28 24 Taxes 21 84 Repurchase reserves 15 18 MSR purchases payable including advances 11 21 Total payables and accrued liabilities $ 1,188 $ 1,470 |
Schedule of Loans Subject to Repurchase Reserve | The activity of the outstanding repurchase reserves is set forth below. Three months ended September 30, Nine months ended September 30, Repurchase Reserves 2017 2016 2017 2016 Balance - beginning of period $ 14 $ 26 $ 18 $ 26 Provision, net of release 2 — (1 ) 1 Charge-offs (1 ) (1 ) (2 ) (2 ) Balance - end of period $ 15 $ 25 $ 15 $ 25 |
Securitizations and Financings
Securitizations and Financings (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entities and Securitizations [Abstract] | |
Schedule of Assets and Liabilities of VIEs Included in Financial Statements | A summary of the outstanding collateral and certificate balances for securitization trusts for which Nationstar was the transferor, including any retained beneficial interests and MSRs, that were not consolidated by Nationstar for the dates indicated as follows. September 30, 2017 December 31, 2016 Total collateral balances $ 2,373 $ 2,704 Total certificate balances $ 2,214 $ 2,455 A summary of mortgage loans transferred by Nationstar to unconsolidated securitization trusts that are 60 days or more past due and the credit losses incurred in the unconsolidated securitization trusts are presented below: Principal Amount of Loans 60 Days or More Past Due September 30, 2017 December 31, 2016 Unconsolidated securitization trusts $ 430 $ 548 A summary of the assets and liabilities of Nationstar’s transactions with VIEs included in the Company’s consolidated financial statements is presented below for the dates indicated. September 30, 2017 December 31, 2016 Transfers Reverse Secured Borrowings Transfers Reverse Secured Borrowings Assets Restricted cash $ 121 $ 25 $ 190 $ 37 Reverse mortgage interests, net — 8,515 — 9,557 Advances and other receivables, net 934 — 1,065 — Mortgage loans held for investment, net 142 — 150 — Other assets 2 — 4 — Total assets $ 1,199 $ 8,540 $ 1,409 $ 9,594 Liabilities Advance facilities (1) $ 704 $ — $ 909 $ — Payables and accrued liabilities 1 — 1 — Participating interest financing (2) — 7,573 — 8,840 HECM Securitizations (HMBS) Trust 2015-2 — — — 114 Trust 2016-1 — — — 194 Trust 2016-2 — 105 — 158 Trust 2016-3 — 153 — 208 Trust 2017-1 — 240 — — Trust 2017-2 — 399 — — Nonrecourse debt–legacy assets 39 — 50 — Total liabilities $ 744 $ 8,470 $ 960 $ 9,514 (1) Advance facilities include the Nationstar agency advance financing facility and notes payable recorded by the Nationstar Mortgage Advance Receivable Trust, and the Nationstar Agency Advance Receivables Trust. Refer to Notes Payable in Note 8, Indebtedness for additional information. (2) Participating interest financing excludes premiums. |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) on continuing operations were as follows. Three months ended September 30, Nine months ended September 30, 2017 2016 2017 2016 Income tax expense (benefit) $ 5 $ 29 $ (4 ) $ (106 ) Effective tax rate 37.1 % 40.6 % 29.1 % 36.8 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the estimated carrying amount and fair value of Nationstar’s financial instruments and other assets and liabilities measured at fair value on a recurring basis. September 30, 2017 Recurring Fair Value Measurements Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale (1) $ 1,645.7 $ — $ 1,645.7 $ — Mortgage servicing rights (1) 2,956.1 — — 2,956.1 Derivative financial instruments IRLCs 68.7 — 68.7 — Forward MBS trades 4.7 — 4.7 — LPCs 1.0 — 1.0 — Treasury futures 2.0 — 2.0 — Total assets $ 4,678.2 $ — $ 1,722.1 $ 2,956.1 Liabilities Derivative financial instruments Forward MBS trades $ 3.2 $ — $ 3.2 $ — LPCs 1.2 — 1.2 — Treasury futures 2.0 — 2.0 — Mortgage servicing rights financing 20.5 — — 20.5 Excess spread financing 1,045.6 — — 1,045.6 Total liabilities $ 1,072.5 $ — $ 6.4 $ 1,066.1 December 31, 2016 Recurring Fair Value Measurements Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale (1) $ 1,788.0 $ — $ 1,788.0 $ — Mortgage servicing rights (1) 3,160.0 — — 3,160.0 Derivative financial instruments IRLCs 92.2 — 92.2 — Forward MBS trades 39.2 — 39.2 — LPCs 1.9 — 1.9 — Interest rate swaps and caps 0.1 — 0.1 — Total assets $ 5,081.4 $ — $ 1,921.4 $ 3,160.0 Liabilities Derivative financial instruments IRLCs $ 1.1 $ — $ 1.1 $ — Forward MBS trades 10.0 — 10.0 — LPCs 1.5 — 1.5 — Interest rate swaps and caps 0.1 — 0.1 — Mortgage servicing rights financing 27.0 — — 27.0 Excess spread financing 1,214.0 — — 1,214.0 Total liabilities $ 1,253.7 $ — $ 12.7 $ 1,241.0 (1) Based on the nature and risks of the underlying assets and liabilities, the fair value is presented for the aggregate account. |
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The table below presents a reconciliation for all of Nationstar’s Level 3 assets and liabilities measured at fair value on a recurring basis. Assets Liabilities Mortgage servicing rights Excess spread financing Mortgage servicing rights financing Nine months ended September 30, 2017 Balance - beginning of period $ 3,160 $ 1,214 $ 27 Total gains or losses included in earnings (361 ) — (7 ) Purchases, issuances, sales and settlements: Purchases 30 — — Issuances 151 — — Sales (24 ) — — Settlements — (168 ) — Balance - end of period $ 2,956 $ 1,046 $ 20 Assets Liabilities Mortgage servicing rights Excess spread financing Mortgage servicing rights financing Year ended December 31, 2016 Balance - beginning of period $ 3,358 $ 1,232 $ 69 Total gains or losses included in earnings (496 ) 25 (42 ) Purchases, issuances, sales and settlements: Purchases 157 — — Issuances 208 155 — Sales (67 ) — — Settlements — (198 ) — Balance - end of period $ 3,160 $ 1,214 $ 27 |
Fair Value, by Balance Sheet Grouping | The table below presents a summary of the estimated carrying amount and fair value of Nationstar’s financial instruments. September 30, 2017 Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 224 $ 224 $ — $ — Restricted cash 356 356 — — Advances and other receivables, net 1,625 — — 1,625 Reverse mortgage interests, net 10,299 — — 10,539 Mortgage loans held for sale 1,646 — 1,646 — Mortgage loans held for investment, net 143 — — 143 Derivative financial instruments 76 — 76 — Financial liabilities Unsecured senior notes 1,885 1,920 — — Advance facilities 798 — 798 — Warehouse facilities 2,775 — 2,775 — Mortgage servicing rights financing liability 20 — — 20 Derivative financial instruments 7 — 7 — Excess spread financing 1,046 — — 1,046 Participating interest financing 7,640 — 7,840 — HECM Securitization (HMBS) Trust 2016-2 105 — — 121 Trust 2016-3 153 — — 170 Trust 2017-1 240 — — 252 Trust 2017-2 399 — — 400 Nonrecourse debt - legacy assets 39 — — 38 December 31, 2016 Carrying Amount Fair Value Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 489 $ 489 $ — $ — Restricted cash 388 388 — — Advances and other receivables, net 1,749 — — 1,749 Reverse mortgage interests, net 11,033 — — 11,232 Mortgage loans held for sale 1,788 — 1,788 — Mortgage loans held for investment, net 151 — — 153 Derivative financial instruments 133 — 133 — Financial liabilities Unsecured senior notes 2,007 2,047 — — Advance facilities 1,096 — 1,096 — Warehouse facilities 2,423 — 2,423 — Mortgage servicing rights financing liability 27 — — 27 Excess spread financing 1,214 — — 1,214 Derivative financial instruments 13 — 13 — Participating interest financing 8,914 — 9,151 — HECM Securitization (HMBS) Trust 2015-2 114 — — 125 Trust 2016-1 194 — — 203 Trust 2016-2 158 — — 156 Trust 2016-3 208 — — 205 Nonrecourse debt - legacy assets 50 — — 50 |
Business Segment Reporting (Tab
Business Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | The following tables present financial information by segment. Three months ended September 30, 2017 Servicing Originations Xome Eliminations Total Operating Segments Corporate and Other Consolidated Revenues: Service related, net $ 191 $ 16 $ 65 $ (20 ) $ 252 $ — $ 252 Net gain on mortgage loans held for sale — 134 — 20 154 — 154 Total revenues 191 150 65 — 406 — 406 Total Expenses 185 106 54 — 345 23 368 Other income (expenses): Interest income 141 14 — — 155 2 157 Interest expense (130 ) (13 ) — — (143 ) (38 ) (181 ) Other (2 ) — — — (2 ) — (2 ) Total Other Income (expenses), net 9 1 — — 10 (36 ) (26 ) Income (loss) before income tax expense (benefit) $ 15 $ 45 $ 11 $ — $ 71 $ (59 ) $ 12 Depreciation and amortization $ 6 $ 3 $ 3 $ — $ 12 $ 3 $ 15 Total assets 15,147 4,644 382 (2,948 ) 17,225 779 18,004 Three months ended September 30, 2016 (1) Servicing Originations Xome Eliminations Total Operating Segments Corporate and Other Consolidated Revenues Service related, net $ 211 $ 16 $ 107 $ (23 ) $ 311 $ (1 ) $ 310 Net gain on mortgage loans held for sale — 208 — 23 231 1 232 Total revenues 211 224 107 — 542 — 542 Total Expenses 150 141 87 — 378 29 407 Other income (expenses) Interest income 82 17 — — 99 4 103 Interest expense (108 ) (16 ) — — (124 ) (41 ) (165 ) Other — (1 ) — — (1 ) (1 ) (2 ) Total Other Income (expenses), net (26 ) — — — (26 ) (38 ) (64 ) Income (loss) before income tax expense (benefit) $ 35 $ 83 $ 20 $ — $ 138 $ (67 ) $ 71 Depreciation and amortization $ 6 $ 3 $ 4 $ — $ 13 $ 4 $ 17 Total assets 12,250 4,523 345 (2,432 ) 14,686 1,160 15,846 (1) The Company periodically evaluates corporate allocation methods in order to appropriately align corporate costs with its business. Certain 2016 costs within salaries, wages and benefits and operational expenses were reclassified between segments to conform to current year allocation methods. Nine months ended September 30, 2017 Servicing Originations Xome Eliminations Total Operating Segments Corporate and Other Consolidated Revenues Service related, net $ 537 $ 47 $ 226 $ (63 ) $ 747 $ 1 $ 748 Net gain on mortgage loans held for sale — 402 — 63 465 — 465 Total revenues 537 449 226 — 1,212 1 1,213 Total Expenses 518 326 193 — 1,037 72 1,109 Other income (expenses) Interest income 384 39 — — 423 12 435 Interest expense (402 ) (39 ) — — (441 ) (116 ) (557 ) Other (2 ) — 8 — 6 (2 ) 4 Total Other Income (expenses), net (20 ) — 8 — (12 ) (106 ) (118 ) Income (loss) before income tax expense (benefit) $ (1 ) $ 123 $ 41 $ — $ 163 $ (177 ) $ (14 ) Depreciation and amortization $ 16 $ 8 $ 10 $ — $ 34 $ 10 $ 44 Total assets 15,147 4,644 382 (2,948 ) 17,225 779 18,004 Nine months ended September 30, 2016 (1) Servicing Originations Xome Eliminations Total Operating Segments Corporate and Other Consolidated Revenues Service related, net $ 225 $ 47 $ 327 $ (93 ) $ 506 $ 1 $ 507 Net gain on mortgage loans held for sale — 526 — 93 619 — 619 Total revenues 225 573 327 — 1,125 1 1,126 Total Expenses 477 394 274 — 1,145 87 1,232 Other income (expenses) Interest income 254 48 — — 302 11 313 Interest expense (325 ) (44 ) — — (369 ) (124 ) (493 ) Other — (1 ) — — (1 ) (1 ) (2 ) Total Other Income (expenses), net (71 ) 3 — — (68 ) (114 ) (182 ) Income (loss) before income tax expense (benefit) $ (323 ) $ 182 $ 53 $ — $ (88 ) $ (200 ) $ (288 ) Depreciation and amortization $ 17 $ 9 $ 16 $ — $ 42 $ 6 $ 48 Total assets 12,250 4,523 345 (2,432 ) 14,686 1,160 15,846 (1) The Company periodically evaluates corporate allocation methods in order to appropriately align corporate costs with its business. Certain 2016 costs within salaries, wages and benefits and operational expenses were reclassified between segments to conform to current year allocation methods. |
Guarantor Financial Statement39
Guarantor Financial Statement Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Consolidating Balance Sheet | NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2017 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Assets Cash and cash equivalents $ — $ 201 $ 1 $ 22 $ — $ 224 Restricted cash — 211 — 145 — 356 Mortgage servicing rights — 2,931 — 30 — 2,961 Advances and other receivables, net — 1,625 — — — 1,625 Reverse mortgage interests, net — 9,357 — 942 — 10,299 Mortgage loans held for sale at fair value — 1,646 — — — 1,646 Mortgage loans held for investment, net — 1 — 142 — 143 Property and equipment, net — 108 — 19 — 127 Derivative financial instruments at fair value — 76 — — — 76 Other assets — 445 177 731 (806 ) 547 Investment in subsidiaries 1,801 507 — — (2,308 ) — Total assets $ 1,801 $ 17,108 $ 178 $ 2,031 $ (3,114 ) $ 18,004 Liabilities and Stockholders' Equity Unsecured senior notes $ — $ 1,873 $ — $ — $ — $ 1,873 Advance facilities, net — 93 — 704 — 797 Warehouse facilities, net — 2,774 — — — 2,774 Payables and accrued liabilities — 1,149 2 37 — 1,188 MSR related liabilities - nonrecourse at fair value — 1,046 — 20 — 1,066 Mortgage servicing liabilities — 53 — — — 53 Derivative financial instruments, at fair value — 7 — — — 7 Other nonrecourse debt, net — 7,632 — 937 — 8,569 Payables to affiliates 124 680 — 2 (806 ) — Total liabilities 124 15,307 2 1,700 (806 ) 16,327 Total stockholders' equity 1,677 1,801 176 331 (2,308 ) 1,677 Total liabilities and stockholders' equity $ 1,801 $ 17,108 $ 178 $ 2,031 $ (3,114 ) $ 18,004 (1) Issuer balances exclude the balances of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 2016 Nationstar Issuer (1) Guarantor (Subsidiaries of Issuer) Non-Guarantor (Subsidiaries of Issuer) Eliminations Consolidated Assets Cash and cash equivalents $ — $ 453 $ 2 $ 34 $ — $ 489 Restricted cash — 159 — 229 — 388 Mortgage servicing rights — 3,142 — 24 — 3,166 Advances and other receivables, net — 1,749 — — — 1,749 Reverse mortgage interests, net — 10,316 — 717 — 11,033 Mortgage loans held for sale at fair value — 1,787 — 1 — 1,788 Mortgage loans held for investment, net — 1 — 150 — 151 Property and equipment, net — 113 — 23 — 136 Derivative financial instruments at fair value — 133 — — — 133 Other assets — 444 323 838 (1,045 ) 560 Investment in subsidiaries 1,801 634 — — (2,435 ) — Total assets $ 1,801 $ 18,931 $ 325 $ 2,016 $ (3,480 ) $ 19,593 Liabilities and stockholders' equity Unsecured senior notes $ — $ 1,990 $ — $ — $ — $ 1,990 Advance facilities, net — 187 — 909 — 1,096 Warehouse facilities, net — 2,421 — — — 2,421 Payables and accrued liabilities — 1,420 2 48 — 1,470 MSR related liabilities - nonrecourse at fair value — 1,219 — 22 — 1,241 Mortgage servicing liabilities — 48 — — — 48 Derivative financial instruments, at fair value — 13 — — — 13 Other nonrecourse debt, net — 8,907 — 724 — 9,631 Payables to affiliates 118 925 — 2 (1,045 ) — Total liabilities 118 17,130 2 1,705 (1,045 ) 17,910 Total stockholders' equity 1,683 1,801 323 311 (2,435 ) 1,683 Total liabilities and stockholders' equity $ 1,801 $ 18,931 $ 325 $ 2,016 $ (3,480 ) $ 19,593 (1) Issuer balances exclude the balances of its guarantor and non-guarantor subsidiaries, as previously described. |
Consolidating Statement of Operations | NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2017 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Revenues: Service related, net $ — $ 181 $ 7 $ 64 $ — $ 252 Net gain on mortgage loans held for sale — 153 — 1 — 154 Total revenues — 334 7 65 — 406 Expenses: Salaries, wages benefits — 153 1 29 — 183 General and administrative — 154 4 27 — 185 Total expenses — 307 5 56 — 368 Other income (expenses): Interest income — 145 — 12 — 157 Interest expense — (168 ) — (13 ) — (181 ) Other income (expense) — (3 ) — 1 — (2 ) Gain (loss) from subsidiaries 7 11 — — (18 ) — Total other income (expenses), net 7 (15 ) — — (18 ) (26 ) Income (loss) before income tax expense (benefit) 7 12 2 9 (18 ) 12 Less: Income tax expense — 5 — — — 5 Net income (loss) 7 7 2 9 (18 ) 7 Less: Net income attributable to noncontrolling interests — — — — — — Net income (loss) attributable to Nationstar $ 7 $ 7 $ 2 $ 9 $ (18 ) $ 7 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED SPETEMBER 30, 2017 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Revenues: Service related, net $ — $ 497 $ 21 $ 230 $ — $ 748 Net gain on mortgage loans held for sale — 464 — 1 — 465 Total revenues — 961 21 231 — 1,213 Expenses: Salaries, wages benefits — 451 3 103 — 557 General and administrative — 440 10 102 — 552 Total expenses — 891 13 205 — 1,109 Other income (expenses): Interest income — 396 — 39 — 435 Interest expense — (515 ) — (42 ) — (557 ) Other income (expense) — (5 ) — 9 — 4 Gain (loss) from subsidiaries (11 ) 40 — — (29 ) — Total other income (expenses), net (11 ) (84 ) — 6 (29 ) (118 ) Income (loss) before income tax expense (benefit) (11 ) (14 ) 8 32 (29 ) (14 ) Less: Income tax expense — (4 ) — — — (4 ) Net income (loss) (11 ) (10 ) 8 32 (29 ) (10 ) Less: Net income attributable to noncontrolling interests — 1 — — — 1 Net income (loss) attributable to Nationstar $ (11 ) $ (11 ) $ 8 $ 32 $ (29 ) $ (11 ) (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS THREE MONTHS ENDED SEPTEMBER 30, 2016 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Revenues: Service related, net $ — $ 196 $ 5 $ 109 $ — $ 310 Net gain on mortgage loans held for sale — 222 — 10 — 232 Total revenues — 418 5 119 — 542 Expenses: Salaries, wages and benefits — 156 1 54 — 211 General and administrative — 143 2 51 — 196 Total expenses — 299 3 105 — 407 Other income (expenses): Interest income — 91 — 12 — 103 Interest expense — (146 ) — (19 ) — (165 ) Other expense — (2 ) — — — (2 ) Gain (loss) from subsidiaries 45 9 — — (54 ) — Total other income (expenses), net 45 (48 ) — (7 ) (54 ) (64 ) Income (loss) before income tax expense (benefit) 45 71 2 7 (54 ) 71 Less: Income tax (benefit) — 29 — — — 29 Net income (loss) 45 42 2 7 (54 ) 42 Less: Net loss attributable to noncontrolling interests — (3 ) — — — (3 ) Net income (loss) attributable to Nationstar $ 45 $ 45 $ 2 $ 7 $ (54 ) $ 45 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2016 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Revenues: Service related, net $ — $ 156 $ 19 $ 332 $ — $ 507 Net gain on mortgage loans held for sale — 590 — 29 — 619 Total revenues — 746 19 361 — 1,126 Expenses: Salaries, wages benefits — 448 3 162 — 613 General and administrative — 453 6 160 — 619 Total expenses — 901 9 322 — 1,232 Other income (expenses): Interest income — 276 — 37 — 313 Interest expense — (437 ) — (56 ) — (493 ) Other expense — (2 ) — — — (2 ) Gain (loss) from subsidiaries (179 ) 30 — — 149 — Total other income (expenses), net (179 ) (133 ) — (19 ) 149 (182 ) Income (loss) before income tax expense (benefit) (179 ) (288 ) 10 20 149 (288 ) Less: Income tax expense — (106 ) — — — (106 ) Net income (loss) (179 ) (182 ) 10 20 149 (182 ) Less: Net loss attributable to noncontrolling interests — (3 ) — — — (3 ) Net income (loss) attributable to Nationstar $ (179 ) $ (179 ) $ 10 $ 20 $ 149 $ (179 ) (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. |
Consolidating Statement of Cash Flows | NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2016 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Operating Activities Net income (loss) attributable to Nationstar $ (179 ) $ (179 ) $ 10 $ 20 $ 149 $ (179 ) Reconciliation of net income (loss) to net cash attributable to operating activities: (Gain)/loss from subsidiaries 179 (30 ) — — (149 ) — Net loss attributable to non-controlling interest — (3 ) — — — (3 ) Net gain on mortgage loans held for sale — (590 ) — (29 ) — (619 ) Reverse mortgage loan interest income — (251 ) — — — (251 ) Loss on sale of assets — 2 — — — 2 Provision for servicing reserves — 101 — — — 101 Fair value changes and amortization of mortgage servicing rights — 778 — — — 778 Fair value changes in excess spread financing — (74 ) — — — (74 ) Fair value changes in mortgage servicing rights financing liability — (2 ) — — — (2 ) Amortization of premiums and accretion of discount — (7,254 ) — 7,302 — 48 Depreciation and amortization — 32 — 16 — 48 Share-based compensation — 13 — 5 — 18 Repurchases of forward loans assets out of Ginnie Mae securitizations — (1,138 ) — — — (1,138 ) Repurchases of reverse loans assets out of Ginnie Mae securitizations, net of assignments to prior servicers — (1,609 ) — — — (1,609 ) Mortgage loans originated and purchased, net of fees, and other purchase-related activities — (14,296 ) — (767 ) — (15,063 ) Sale proceeds and loan payment proceeds for mortgage loans held for sale and held for investment — 22,684 — (6,416 ) — 16,268 Excess tax benefit from share based compensation — 4 — — — 4 Changes in assets and liabilities: Advances and other receivables, net — 504 — — — 504 Reverse mortgage interests, net — 2,137 — (115 ) — 2,022 Other assets 117 (682 ) (10 ) 439 — (136 ) Payables and accrued liabilities — (135 ) — (4 ) — (139 ) Net cash attributable to operating activities 117 12 — 451 — 580 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2016 (Continued) Nationstar Issuer(1) Guarantor Non-Guarantor Eliminations Consolidated Investing Activities Property and equipment additions, net of disposals — (40 ) — (9 ) — (49 ) Purchase of forward mortgage servicing rights, net of liabilities incurred — (36 ) — — — (36 ) Proceeds on sale of forward and reverse mortgage servicing rights — 25 — — — 25 Net cash attributable to investing activities — (51 ) — (9 ) — (60 ) Financing Activities Increase in warehouse facilities — 774 — (56 ) — 718 Decrease in advance facilities — (29 ) — (429 ) — (458 ) Proceeds from issuance of HECM securitizations — (4 ) — 728 — 724 Repayment of HECM securitizations — — — (624 ) — (624 ) Proceeds from issuance of participating interest financing in reverse mortgage interests, net — 337 — — — 337 Repayment of participating interest financing in reverse mortgage interests, net — (817 ) — — — (817 ) Repayment of excess spread financing — (146 ) — — — (146 ) Repayment of nonrecourse debt - legacy assets — 1 — (13 ) — (12 ) Repurchase of unsecured senior notes — (29 ) — — — (29 ) Repurchase of common stock (114 ) — — — — (114 ) Transfers to restricted cash, net — 33 — (33 ) — — Excess tax deficiency from share based compensation — (4 ) — — — (4 ) Surrender of shares relating to stock vesting (3 ) — — — — (3 ) Debt financing costs — (10 ) — — — (10 ) Net cash attributable to financing activities (117 ) 106 — (427 ) — (438 ) Net increase in cash and cash equivalents — 67 — 15 — 82 Cash and cash equivalents - beginning of period — 597 1 15 — 613 Cash and cash equivalents - end of period $ — $ 664 $ 1 $ 30 $ — $ 695 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2017 Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Operating Activities Net income (loss) attributable to Nationstar $ (11 ) $ (11 ) $ 8 $ 32 $ (29 ) $ (11 ) Reconciliation of net income (loss) to net cash attributable to operating activities: (Gain) loss from subsidiaries 11 (40 ) — — 29 — Net income attributable to non-controlling interest — 1 — — — 1 Net gain on mortgage loans held for sale — (464 ) — (1 ) — (465 ) Reverse mortgage loan interest income — (368 ) — — — (368 ) (Gain) loss on sale of assets — 1 — (9 ) — (8 ) Provision for servicing reserves — 113 — — — 113 Fair value changes and amortization of mortgage servicing rights — 361 — — — 361 Fair value changes in excess spread financing — 2 — (2 ) — — Fair value change in mortgage servicing rights financing liability — (7 ) — — — (7 ) Amortization of premiums and accretion of discount — 55 — 8 — 63 Depreciation and amortization — 33 — 11 — 44 Share-based compensation — 9 — 4 — 13 Other losses — 5 — — — 5 Repurchases of forward loans assets out of Ginnie Mae securitizations — (943 ) — — — (943 ) Repurchases of reverse loan assets out of Ginnie Mae securitizations, net of assignments to prior servicers — (2,468 ) — — — (2,468 ) Mortgage loans originated and purchased, net of fees, and other purchase-related activities — (14,002 ) — — — (14,002 ) Sales proceeds and loan payment proceeds for mortgage loans held for sale and held for investment — 15,459 — 13 — 15,472 Excess tax benefit (deficiency) from share based compensation — (1 ) — — — (1 ) Changes in assets and liabilities: Advances and other receivables, net — 55 — — — 55 Reverse mortgage interests, net — 3,719 — (225 ) — 3,494 Other assets 4 (99 ) (9 ) 87 — (17 ) Payables and accrued liabilities — (273 ) — (11 ) — (284 ) Net cash attributable to operating activities 4 1,137 (1 ) (93 ) — 1,047 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2017 (Continued) Nationstar Issuer (1) Guarantor Non-Guarantor Eliminations Consolidated Investing activities Property and equipment additions, net of disposals — (31 ) — (3 ) — (34 ) Purchase of forward mortgage servicing rights, net of liabilities incurred — (22 ) — (6 ) — (28 ) Net proceeds from acquisition of reverse mortgage servicing portfolio and HECM related receivables — 16 — — — 16 Proceeds on sale of forward and reverse mortgage servicing rights — 25 — — — 25 Proceeds on sale of assets — 16 — — — 16 Net cash attributable to investing activities — 4 — (9 ) — (5 ) Financing activities Increase in warehouse facilities — 351 — — — 351 Decrease in advance facilities — (93 ) — (205 ) — (298 ) Proceeds from HECM securitizations — (6 ) — 707 — 701 Repayment of HECM securitizations — — — (484 ) — (484 ) Proceeds from issuance of participating interest financing in reverse mortgage interests, net — 437 — — — 437 Repayment of participating interest financing in reverse mortgage interests, net — (1,730 ) — — — (1,730 ) Repayment of excess spread financing — (168 ) — — — (168 ) Repayment of nonrecourse debt–legacy assets — — — (12 ) — (12 ) Repurchase of unsecured senior notes — (122 ) — — — (122 ) Transfers (to) from restricted cash, net — (46 ) — 84 — 38 Surrender of shares relating to stock vesting (4 ) — — — — (4 ) Debt financing costs — (11 ) — — — (11 ) Dividends to noncontrolling interests — (5 ) — — — (5 ) Net cash attributable to financing activities (4 ) (1,393 ) — 90 — (1,307 ) Net decrease in cash and cash equivalents — (252 ) (1 ) (12 ) — (265 ) Cash and cash equivalents - beginning of period — 453 2 34 — 489 Cash and cash equivalents - end of period $ — $ 201 $ 1 $ 22 $ — $ 224 (1) Issuer activities exclude the activities of its guarantor and non-guarantor subsidiaries, as previously described. |
Nature of Business and Basis 40
Nature of Business and Basis of Presentation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Excess tax benefit from share based compensation | $ (1) | $ 4 |
Accounting Standards Update 2016-09, Excess Tax Benefit Component | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect on dilutive earnings per share (in dollars per share) | $ 0.01 |
Mortgage Servicing Rights ("M41
Mortgage Servicing Rights ("MSRs") and Related Liabilities - MSRs and Related Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Mortgage Servicing Rights [Line Items] | ||||
Mortgage servicing rights at fair value | $ 2,956 | $ 3,160 | ||
Mortgage servicing rights | 2,961 | 3,166 | ||
Mortgage servicing liabilities - amortized cost | 53 | 48 | ||
Excess spread financing - fair value | 1,046 | 1,214 | ||
Mortgage servicing rights financing liability - fair value | 20 | 27 | ||
MSR related liabilities (nonrecourse) | 1,066 | 1,241 | ||
Mortgage servicing rights | ||||
Mortgage Servicing Rights [Line Items] | ||||
Mortgage servicing rights at fair value | 2,956 | 3,160 | ||
Reverse MSRs - amortized cost | 5 | 6 | $ 7 | $ 9 |
Mortgage servicing rights | 2,961 | 3,166 | ||
Mortgage servicing liabilities - amortized cost | $ 53 | $ 48 | $ 11 | $ 25 |
Mortgage Servicing Rights ("M42
Mortgage Servicing Rights ("MSRs") and Related Liabilities - MSR's at Fair Value (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Aug. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Fair value - beginning of period | $ 3,160 | |||
Fair value - end of period | 2,956 | |||
Mortgage servicing rights | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Fair value - beginning of period | 3,160 | $ 3,358 | ||
Servicing retained from mortgage loans sold | 151 | 142 | ||
Purchases of servicing rights | $ 8 | 30 | 39 | |
Sales of servicing assets | $ (26) | $ 2 | (24) | (24) |
Changes in valuation inputs or assumptions used in the valuation model | (113) | (494) | ||
Other changes in fair value | (248) | (296) | ||
Fair value - end of period | $ 2,956 | $ 2,725 |
Mortgage Servicing Rights ("M43
Mortgage Servicing Rights ("MSRs") and Related Liabilities - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017 | Aug. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Servicing Asset at Amortized Cost [Line Items] | ||||||||
Repayment of excess spread financing | $ (9,000,000) | $ (168,000,000) | $ (146,000,000) | |||||
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans | $ 20,000,000 | $ 27,000,000 | 69,000,000 | 85,000,000 | ||||
Servicing fee income accretion expense | 41,000,000 | 46,000,000 | 123,000,000 | 149,000,000 | ||||
Forward MSRs Sold | ||||||||
Servicing Asset at Amortized Cost [Line Items] | ||||||||
UPB | $ 2,920,000,000 | 2,920,000,000 | 4,560,000,000 | 2,920,000,000 | 4,560,000,000 | |||
Forward MSRs Sold, Subservicing Retained | ||||||||
Servicing Asset at Amortized Cost [Line Items] | ||||||||
UPB | 0 | 0 | $ 3,507,000,000 | 0 | 3,507,000,000 | |||
Reverse Mortgage Servicing Rights | ||||||||
Servicing Asset at Amortized Cost [Line Items] | ||||||||
UPB | 36,412,000,000 | 36,412,000,000 | 36,412,000,000 | |||||
Mortgage servicing rights | ||||||||
Servicing Asset at Amortized Cost [Line Items] | ||||||||
UPB | 288,450,000,000 | $ 312,076,000,000 | $ 288,450,000,000 | 288,450,000,000 | ||||
Impairment | 0 | |||||||
Purchase of servicing rights | 0 | 0 | ||||||
Increased MSL obligation | 6,000,000 | 0 | ||||||
Reverse portfolio | ||||||||
Servicing Asset at Amortized Cost [Line Items] | ||||||||
Purchase of servicing rights | $ 747,000,000 | 9,305,000,000 | ||||||
Increased MSL obligation | $ 17,000,000 | |||||||
Mortgage servicing rights | ||||||||
Servicing Asset at Amortized Cost [Line Items] | ||||||||
Sales of servicing assets | (26,000,000) | $ 2,000,000 | (24,000,000) | (24,000,000) | ||||
Purchases of servicing rights | $ 8,000,000 | $ 30,000,000 | $ 39,000,000 |
Mortgage Servicing Rights ("M44
Mortgage Servicing Rights ("MSRs") and Related Liabilities - UPB related to owned MSRs (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Owned Service Loans [Line Items] | ||
Fair Value | $ 2,956 | $ 3,160 |
Mortgage servicing rights | ||
Owned Service Loans [Line Items] | ||
UPB | 288,450 | 312,076 |
Fair Value | 2,956 | 3,160 |
Credit sensitive | Mortgage servicing rights | ||
Owned Service Loans [Line Items] | ||
UPB | 174,318 | 198,935 |
Fair Value | 1,640 | 1,818 |
Interest sensitive | Mortgage servicing rights | ||
Owned Service Loans [Line Items] | ||
UPB | 114,132 | 113,141 |
Fair Value | $ 1,316 | $ 1,342 |
Mortgage Servicing Rights ("M45
Mortgage Servicing Rights ("MSRs") and Related Liabilities - Fair Value Assumptions (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Mortgage servicing rights | Credit sensitive | ||
Assumption for Fair Value of Mortgage Servicing Rights | ||
Discount rate | 11.40% | 11.60% |
Total prepayment speeds | 15.40% | 15.40% |
Expected weighted-average life | 5 years 7 months | 6 years |
Mortgage servicing rights | Interest sensitive | ||
Assumption for Fair Value of Mortgage Servicing Rights | ||
Discount rate | 9.20% | 9.30% |
Total prepayment speeds | 11.30% | 10.70% |
Expected weighted-average life | 6 years 6 months | 6 years 9 months 18 days |
Excess spread financing | Low | ||
Assumption for Fair Value of Mortgage Servicing Rights | ||
Prepayment Speeds | 6.70% | 6.10% |
Average Life (Years) | 4 years 3 months | 4 years 1 month 6 days |
Discount Rate | 8.50% | 8.50% |
Recapture Rate | 7.10% | 6.70% |
Excess spread financing | High | ||
Assumption for Fair Value of Mortgage Servicing Rights | ||
Prepayment Speeds | 21.10% | 21.20% |
Average Life (Years) | 6 years 9 months | 8 years 6 months |
Discount Rate | 14.10% | 14.10% |
Recapture Rate | 30.00% | 29.80% |
Excess spread financing | Weighted-average | ||
Assumption for Fair Value of Mortgage Servicing Rights | ||
Prepayment Speeds | 13.90% | 13.90% |
Average Life (Years) | 5 years 11 months | 6 years 3 months 18 days |
Discount Rate | 10.80% | 10.80% |
Recapture Rate | 18.80% | 19.00% |
MSR Financing Liability | Financing rates | ||
Assumption for Fair Value of Mortgage Servicing Rights | ||
Advance financing rates | 3.50% | 3.20% |
MSR Financing Liability | Recovery rates | ||
Assumption for Fair Value of Mortgage Servicing Rights | ||
Annual advance recovery rates | 23.30% | 23.90% |
Mortgage Servicing Rights ("M46
Mortgage Servicing Rights ("MSRs") and Related Liabilities - MSR's at Amortized Cost (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Servicing Liability at Amortized Value [Roll Forward] | ||
Balance - beginning of period | $ 48 | |
Balance - end of the period | 53 | |
Mortgage servicing rights | ||
Servicing Asset at Amortized Value, Balance [Roll Forward] | ||
Balance - beginning of period | 6 | $ 9 |
Increase in MSL | 0 | 0 |
Amortization/accretion | (1) | (2) |
Balance - end of the period | 5 | 7 |
Fair value - end of period | 5 | 25 |
Servicing Liability at Amortized Value [Roll Forward] | ||
Balance - beginning of period | 48 | 25 |
Increase in MSL | 6 | 0 |
Amortization/accretion | (1) | (14) |
Balance - end of the period | 53 | 11 |
Fair value - end of period | $ 9 | $ 2 |
Mortgage Servicing Rights ("M47
Mortgage Servicing Rights ("MSRs") and Related Liabilities - Fair Value Sensitivity Analysis (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Mortgage servicing rights | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Total Prepayment Speeds, 10% Adverse Change | $ (122) | $ (117) |
Total Prepayment Speeds, 20% Adverse Change | (235) | (224) |
Excess spread financing | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Total Prepayment Speeds, 10% Adverse Change | 36 | 41 |
Total Prepayment Speeds, 20% Adverse Change | 75 | 85 |
100 Basis Points | Mortgage servicing rights | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Discount Rate, Adverse Change | (106) | (114) |
100 Basis Points | Excess spread financing | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Discount Rate, Adverse Change | 39 | 49 |
200 Basis Points | Mortgage servicing rights | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Discount Rate, Adverse Change | (205) | (221) |
200 Basis Points | Excess spread financing | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Discount Rate, Adverse Change | $ 81 | $ 101 |
Mortgage Servicing Rights ("M48
Mortgage Servicing Rights ("MSRs") and Related Liabilities - Servicing Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Transfers and Servicing [Abstract] | ||||
Contractually specified servicing fees | $ 251 | $ 254 | $ 759 | $ 786 |
Other service-related income | 44 | 67 | 142 | 214 |
Incentive and modification income | 19 | 35 | 63 | 82 |
Late fees | 22 | 20 | 67 | 57 |
Reverse servicing fees | 16 | 11 | 43 | 46 |
Mark-to-market | (48) | (9) | (176) | (502) |
Counterparty revenue share | (53) | (75) | (174) | (223) |
Amortization, net of accretion | (60) | (92) | (187) | (235) |
Total servicing revenue | $ 191 | $ 211 | $ 537 | $ 225 |
Advances and Other Receivable49
Advances and Other Receivables, Net - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Servicing advances | $ 1,489 | $ 1,614 |
Receivables from agencies, investors and prior servicers | 389 | 319 |
Reserves | (253) | (184) |
Total advances and other receivables, net | $ 1,625 | $ 1,749 |
Advances and Other Receivable50
Advances and Other Receivables, Net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans | $ 20 | $ 27 | $ 69 | $ 85 | |
Receivables From Prior Servicers, Forward Loan Portfolio | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Account receivables | $ 139 | $ 139 | $ 94 |
Advances and Other Receivable51
Advances and Other Receivables, Net - Advances and Other Receivables Roll Forward (Details) - Advances and Other Receivables Reserves - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||
Balance - beginning of period | $ 236 | $ 238 | $ 184 | $ 163 |
Provision and other additions | 30 | 37 | 106 | 126 |
Write-offs | (13) | (95) | (37) | (109) |
Balance - end of period | $ 253 | $ 180 | $ 253 | $ 180 |
Reverse Mortgage Interests, N52
Reverse Mortgage Interests, Net - Schedule of Reverse Mortgage Interest (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Reverse Mortgage Interests [Abstract] | ||||||
Participating interests in HMBS | $ 7,573 | $ 8,839 | ||||
Other interests securitized | 985 | 753 | ||||
Unsecuritized interests | 1,829 | 1,572 | ||||
Reserves | (88) | $ (149) | (131) | $ (93) | $ (71) | $ (53) |
Total reverse mortgage interests, net | $ 10,299 | $ 11,033 |
Reverse Mortgage Interests, N53
Reverse Mortgage Interests, Net - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 01, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
UPB unsecuritized | $ 1,829,000,000 | $ 1,572,000,000 | $ 1,829,000,000 | $ 1,829,000,000 | |||
Non-recourse debt | 8,569,000,000 | 9,631,000,000 | 8,569,000,000 | 8,569,000,000 | |||
Reverse mortgage reserves reclassified | (61,000,000) | ||||||
Unsecuritized HECM | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Interest earned on HECM loans | 135,000,000 | $ 81,000,000 | 368,000,000 | $ 251,000,000 | |||
Participating Interests in HMBS | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
UPB securitized | 416,000,000 | 416,000,000 | 416,000,000 | ||||
Trust 2017-1 and Trust 2017-2 | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
UPB securitized | 747,000,000 | 747,000,000 | 747,000,000 | ||||
2015-2 and Trust 2016-1 | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
UPB unsecuritized | 307 | 307 | 307 | ||||
Reverse Mortgage Interests, Unsecuritized | HECM | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Repurchase of HECM loans | 3,270,000,000 | 2,270,000,000 | |||||
Repurchase of HECM loans funded by prior servicer | 802,000,000 | $ 661,000,000 | |||||
Ginnie Mae Loans | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Purchase of servicing assets | 3,840,000,000 | ||||||
HECM Loan Portfolio | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Reverse mortgage interests | $ 3,749,000,000 | ||||||
Non-recourse debt | $ 3,691,000,000 | ||||||
Purchase discount on acquisitions | 118,000,000 | 118,000,000 | 118,000,000 | ||||
Purchase discount accreted to interest income | 22,000,000 | ||||||
Cash acquired from acquisition | 16,000,000 | 96,000,000 | |||||
REO advances | 10,000,000 | ||||||
Reverse portfolio | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Purchase of servicing assets | 17,000,000 | ||||||
Purchase of servicing rights | 747,000,000 | 9,305,000,000 | |||||
Reverse Loan Portfolio, Servicing And Subservicing Rights | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Purchase of servicing rights | 505,000,000 | ||||||
Receivables From Prior Servicers, Reverse Mortgage Interests | |||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||
Account receivables | $ 19,000,000 | $ 38,000,000 | $ 19,000,000 | $ 19,000,000 |
Reverse Mortgage Interests, N54
Reverse Mortgage Interests, Net - Unsecuritized Interest (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Reverse Mortgage Interest [Abstract] | ||
Repurchased HECM loans | $ 1,407 | $ 1,000 |
HECM related receivables | 291 | 301 |
Funded borrower draws not yet securitized | 113 | 236 |
Foreclosed assets | 18 | 35 |
Total unsecuritized interests | $ 1,829 | $ 1,572 |
Reverse Mortgage Interests, N55
Reverse Mortgage Interests, Net - Reserves Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reverse Mortgage Interests Reserves [Roll Forward] | ||||
Reserves for reverse mortgage interests - beginning of period | $ 149 | $ 71 | $ 131 | $ 53 |
Provision | 22 | 28 | 44 | 43 |
Write-offs | (29) | (7) | (33) | (7) |
Other | (54) | 1 | (54) | 4 |
Reserves for reverse mortgage interests - end of period | $ 88 | $ 93 | $ 88 | $ 93 |
Mortgage Loans Held for Sale 56
Mortgage Loans Held for Sale and Investment - Mortgage Loans Held for Sale (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Mortgage Loans Held for Sale and Investment [Abstract] | ||
Mortgage loans held for sale – unpaid principal balance | $ 1,592 | $ 1,759 |
Mark-to-market adjustment | 54 | 29 |
Total mortgage loans held for sale | 1,646 | 1,788 |
UPB | 81 | 106 |
Fair Value | $ 78 | $ 103 |
Mortgage Loans Held for Sale 57
Mortgage Loans Held for Sale and Investment - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Servicing Assets at Fair Value [Line Items] | |||
Mortgage loans held for sale in foreclosure | $ 63 | $ 84 | |
Sale of mortgage loans held for sale | 15,470 | $ 16,183 | |
Gain on sale of mortgage loans held for sale | 363 | 440 | |
Mortgage loans held for investment in foreclosure | 22 | $ 29 | |
Ginnie Mae Loans | |||
Servicing Assets at Fair Value [Line Items] | |||
Delinquent loans acquired | 236 | 201 | |
Delinquent loans securitized or sold | 253 | 88 | |
Purchased loans that have re-performed | 59 | 18 | |
Mortgage loans held for investment, net | |||
Servicing Assets at Fair Value [Line Items] | |||
Reclassifications from non-accretable discount | 1 | 1 | |
Provision for reserves | $ 0 | $ 0 |
Mortgage Loans Held for Sale 58
Mortgage Loans Held for Sale and Investment - Reconciliation to Cash Flow (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward] | ||
Balance - beginning of period | $ 1,788 | $ 1,430 |
Mortgage loans originated and purchased, net of fees | 13,988 | 14,977 |
Loans sold | (15,107) | (15,743) |
Repurchase of loans out of Ginnie Mae securitizations | 943 | 1,138 |
Transfer of mortgage loans held for sale to advances/accounts receivable related to claims | (16) | (16) |
Net transfer of mortgage loans held for sale from REO in other assets | 20 | 9 |
Changes in fair value | 16 | 14 |
Other purchase-related activities(3) | 14 | 30 |
Balance - end of period | $ 1,646 | $ 1,839 |
Mortgage Loans Held for Sale 59
Mortgage Loans Held for Sale and Investment - Mortgage Loans Held for Investment (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Total mortgage loans held for investment, net | $ 143 | $ 151 | ||
Mortgage loans held for investment, net | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Mortgage loans held for investment, net – UPB | 198 | 216 | ||
Non-accretable | (43) | (52) | ||
Accretable | (12) | (13) | $ (14) | $ (15) |
Total mortgage loans held for investment, net | $ 143 | $ 151 |
Mortgage Loans Held for Sale 60
Mortgage Loans Held for Sale and Investment - Accretable Yield (Details) - Mortgage loans held for investment, net - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Accretable Yield Movement Schedule [Roll Forward] | ||
Balance - beginning of the period | $ (13) | $ (15) |
Accretion | 2 | 2 |
Reclassifications from non-accretable discount | (1) | (1) |
Balance - end of the period | $ (12) | $ (14) |
Other Assets - Schedule of Othe
Other Assets - Schedule of Others Assets (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Accrued revenues | $ 152 | $ 165 |
Loans subject to repurchase right from Ginnie Mae | 143 | 152 |
Goodwill | 72 | 74 |
Prepaid expenses | 28 | 16 |
Deposits | 22 | 25 |
Real estate owned (REO), net | 21 | 30 |
Intangible assets | 20 | 28 |
Receivables from affiliates, net | 6 | 6 |
Other | 83 | 64 |
Total other assets | $ 547 | $ 560 |
Other Assets - Narrative (Detai
Other Assets - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
REO loans with government guarantee | $ 14 | $ 21 | |
Xome | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Goodwill allocated to disposal | $ 2 | ||
Customer relationships | Xome | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Intangible assets allocated to disposal | $ 4 |
Derivative Financial Instrume63
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Collateral deposit assets (liabilities) | $ 4 | $ (29) |
Derivative instruments at fair value, less than | $ 0.1 | $ 0.1 |
Derivative Financial Instrume64
Derivative Financial Instruments - Derivative Instruments (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Derivative Assets | Loan sale commitments | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Asset | $ 1 | $ 1 |
Fair Value - Asset | 0.1 | 0.1 |
Recorded Gains / (Losses) | 0 | (0.2) |
Derivative Assets | IRLCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Asset | 2,531 | 3,675 |
Fair Value - Asset | 68.7 | 92.2 |
Recorded Gains / (Losses) | (23.5) | 3.1 |
Derivative Assets | Forward sales of MBS | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Asset | 2,524 | 2,580 |
Fair Value - Asset | 4.7 | 39.2 |
Recorded Gains / (Losses) | (34.5) | 33.1 |
Derivative Assets | LPCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Asset | 132 | 203 |
Fair Value - Asset | 1 | 1.9 |
Recorded Gains / (Losses) | (0.9) | (2) |
Derivative Assets | Treasury futures | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Asset | 255 | |
Fair Value - Asset | 2 | |
Recorded Gains / (Losses) | 2 | |
Derivative Assets | Eurodollar futures | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Asset | 11 | 35 |
Fair Value - Asset | 0 | 0 |
Recorded Gains / (Losses) | 0 | (0.1) |
Derivative Assets | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Asset | 0 | 9 |
Fair Value - Asset | 0 | 0.1 |
Recorded Gains / (Losses) | (0.1) | (0.4) |
Derivative Liabilities | IRLCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Liability | 7 | 176 |
Fair Value - Liability | 0 | 1.1 |
Recorded Gains / (Losses) | 1.1 | (1.1) |
Derivative Liabilities | Forward sales of MBS | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Liability | 1,137 | 1,689 |
Fair Value - Liability | 3.2 | 10 |
Recorded Gains / (Losses) | 6.8 | (6.3) |
Derivative Liabilities | LPCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Liability | 335 | 111 |
Fair Value - Liability | 1.2 | 1.5 |
Recorded Gains / (Losses) | 0.3 | 0 |
Derivative Liabilities | Treasury futures | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Liability | 479 | |
Fair Value - Liability | 2 | |
Recorded Gains / (Losses) | (2) | |
Derivative Liabilities | Eurodollar futures | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Liability | 45 | 27 |
Fair Value - Liability | 0 | 0 |
Recorded Gains / (Losses) | 0 | 0.1 |
Derivative Liabilities | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional - Liability | 0 | 9 |
Fair Value - Liability | 0 | 0.1 |
Recorded Gains / (Losses) | $ 0.1 | $ 0.4 |
Indebtedness - Notes Payable Su
Indebtedness - Notes Payable Summary (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Debt Outstanding | $ 797 | $ 1,096 |
Advance facilities | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | (1) | 0 |
Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | (1) | (2) |
Servicing Segment | ||
Debt Instrument [Line Items] | ||
Debt Outstanding | 797 | 1,096 |
Collateral Pledged | 1,121 | 1,319 |
Servicing Segment | Notes Payable, Other | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | 798 | 1,096 |
Collateral Pledged | 1,121 | 1,319 |
Servicing Segment | Notes Payable, Other | Nationstar agency advance receivables trust | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 650 | |
Debt outstanding, gross | 440 | 485 |
Collateral Pledged | $ 503 | 578 |
Servicing Segment | Notes Payable, Other | Nationstar agency advance receivables trust | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.00% | |
Servicing Segment | Notes Payable, Other | Nationstar agency advance receivables trust | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.60% | |
Servicing Segment | Notes Payable, Other | Nationstar mortgage advance receivable trust | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 500 | |
Debt outstanding, gross | 163 | 260 |
Collateral Pledged | $ 286 | 301 |
Servicing Segment | Notes Payable, Other | Nationstar mortgage advance receivable trust | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.40% | |
Servicing Segment | Notes Payable, Other | Nationstar mortgage advance receivable trust | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 6.50% | |
Servicing Segment | Notes Payable, Other | Nationstar agency advance financing facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 200 | |
Debt outstanding, gross | 101 | 164 |
Collateral Pledged | $ 145 | 186 |
Servicing Segment | Notes Payable, Other | Nationstar agency advance financing facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.00% | |
Servicing Segment | Notes Payable, Other | Nationstar agency advance financing facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 7.40% | |
Servicing Segment | Notes Payable, Other | MBS servicer advance facility (2014) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 125 | |
Debt outstanding, gross | 38 | 88 |
Collateral Pledged | $ 131 | 142 |
Servicing Segment | Notes Payable, Other | MBS servicer advance facility (2014) | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.50% | |
Servicing Segment | Notes Payable, Other | MBS advance financing facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 80 | |
Debt outstanding, gross | 56 | 55 |
Collateral Pledged | $ 56 | 60 |
Servicing Segment | Notes Payable, Other | MBS advance financing facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.50% | |
Servicing Segment | Notes Payable, Other | MBS advance financing facility (2012) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 0 | |
Debt outstanding, gross | 0 | 44 |
Collateral Pledged | $ 0 | 52 |
Servicing Segment | Notes Payable, Other | MBS advance financing facility (2012) | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 5.00% | |
Originations Segment | ||
Debt Instrument [Line Items] | ||
Debt Outstanding | $ 2,774 | 2,421 |
Collateral Pledged | 2,960 | 2,602 |
Originations Segment | Mortgage loans, net | ||
Debt Instrument [Line Items] | ||
Debt Outstanding | 1,602 | 1,693 |
Collateral Pledged | 1,692 | 1,427 |
Originations Segment | Reverse mortgage interests, net | ||
Debt Instrument [Line Items] | ||
Debt Outstanding | 1,173 | 730 |
Collateral Pledged | 1,268 | 834 |
Originations Segment | MSR and other collateral | ||
Debt Instrument [Line Items] | ||
Debt Outstanding | 0 | 0 |
Collateral Pledged | 0 | 341 |
Originations Segment | Notes Payable to Banks | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | 2,775 | 2,423 |
Collateral Pledged | 2,960 | 2,602 |
Originations Segment | Notes Payable to Banks | $1,200 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,200 | |
Debt outstanding, gross | 719 | 682 |
Collateral Pledged | $ 762 | 747 |
Originations Segment | Notes Payable to Banks | $1,200 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.00% | |
Originations Segment | Notes Payable to Banks | $1,200 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.875% | |
Originations Segment | Notes Payable to Banks | $1,000 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 1,000 | |
Debt outstanding, gross | 317 | 250 |
Collateral Pledged | $ 325 | 256 |
Originations Segment | Notes Payable to Banks | $1,000 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.10% | |
Originations Segment | Notes Payable to Banks | $1,000 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.40% | |
Originations Segment | Notes Payable to Banks | $750 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 750 | |
Debt outstanding, gross | 514 | 410 |
Collateral Pledged | $ 555 | 415 |
Originations Segment | Notes Payable to Banks | $750 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.00% | |
Originations Segment | Notes Payable to Banks | $750 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.75% | |
Originations Segment | Notes Payable to Banks | $500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 500 | |
Debt outstanding, gross | 221 | 229 |
Collateral Pledged | $ 226 | 237 |
Originations Segment | Notes Payable to Banks | $500 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.80% | |
Originations Segment | Notes Payable to Banks | $500 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.80% | |
Originations Segment | Notes Payable to Banks | $500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 500 | |
Debt outstanding, gross | 384 | 496 |
Collateral Pledged | $ 417 | 539 |
Originations Segment | Notes Payable to Banks | $500 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.80% | |
Originations Segment | Notes Payable to Banks | $500 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.30% | |
Originations Segment | Notes Payable to Banks | $350 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 350 | |
Debt outstanding, gross | 186 | 12 |
Collateral Pledged | $ 202 | 13 |
Originations Segment | Notes Payable to Banks | $350 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.50% | |
Originations Segment | Notes Payable to Banks | $350 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.80% | |
Originations Segment | Notes Payable to Banks | $450 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 450 | |
Debt outstanding, gross | 281 | 173 |
Collateral Pledged | $ 292 | 189 |
Originations Segment | Notes Payable to Banks | $450 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.50% | |
Originations Segment | Notes Payable to Banks | $450 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.60% | |
Originations Segment | Notes Payable to Banks | $300 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 300 | |
Debt outstanding, gross | 127 | 153 |
Collateral Pledged | $ 152 | 180 |
Originations Segment | Notes Payable to Banks | $300 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.30% | |
Originations Segment | Notes Payable to Banks | $200 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 200 | |
Debt outstanding, gross | 22 | 7 |
Collateral Pledged | $ 23 | 8 |
Originations Segment | Notes Payable to Banks | $200 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.50% | |
Originations Segment | Notes Payable to Banks | $40 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 40 | |
Debt outstanding, gross | 4 | 11 |
Collateral Pledged | $ 6 | $ 18 |
Originations Segment | Notes Payable to Banks | $40 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.00% |
Indebtedness - Summary of Unsec
Indebtedness - Summary of Unsecured Senior Notes (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Unsecured senior notes, net | $ 1,873 | $ 1,990 |
Unsecured Senior Notes | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | 1,885 | 2,007 |
Unamortized debt issuance costs | (12) | (17) |
Unsecured senior notes, net | 1,873 | 1,990 |
Debt issued | 1,885 | |
Unsecured Senior Notes | $600 face value, 6.500% interest rate payable semi-annually, due July 2021 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | 594 | 595 |
Debt issued | $ 600 | |
Interest Rate | 6.50% | |
Unsecured Senior Notes | $400 face value, 7.875% interest rate payable semi-annually, due October 2020 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 397 | 400 |
Debt issued | $ 400 | |
Interest Rate | 7.875% | |
Unsecured Senior Notes | $475 face value, 6.500% interest rate payable semi-annually, due August 2018 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 364 | 461 |
Debt issued | $ 475 | |
Interest Rate | 6.50% | |
Unsecured Senior Notes | $375 face value, 9.625% interest rate payable semi-annually, due May 2019 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 324 | 345 |
Debt issued | $ 375 | |
Interest Rate | 9.625% | |
Unsecured Senior Notes | $300 face value, 6.500% interest rate payable semi-annually, due June 2022 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 206 | $ 206 |
Debt issued | $ 300 | |
Interest Rate | 6.50% |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017USD ($)debt_instrument | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | Nov. 30, 2009USD ($) | |
Debt Instrument [Line Items] | ||||||
Repurchase of unsecured senior notes | $ 122,000,000 | $ 29,000,000 | ||||
Maximum percentage redeemable on unsecured debt | 35.00% | |||||
Principal amount outstanding on securitized financing | $ 222,000,000 | |||||
Non-recourse debt | $ 8,569,000,000 | $ 8,569,000,000 | $ 9,631,000,000 | |||
Minimum tangible net worth | 682,000,000 | 682,000,000 | ||||
Securities Pledged as Collateral | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount outstanding on securitized financing | 186,000,000 | 186,000,000 | 208,000,000 | |||
Nonrecourse debt–legacy assets | ||||||
Debt Instrument [Line Items] | ||||||
Carrying value on loans outstanding | 45,000,000 | 45,000,000 | 58,000,000 | |||
Legacy Asset | ||||||
Debt Instrument [Line Items] | ||||||
Non-recourse debt | $ 39,000,000 | 39,000,000 | $ 50,000,000 | |||
Notes Payable to Banks | Two New Warehouse Facilities [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of new warehouse agreements | debt_instrument | 2 | |||||
Capacity Amount | $ 200,000,000 | 200,000,000 | ||||
Unsecured Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Repurchase of unsecured senior notes | 26,000,000 | $ 4,000,000 | 120,000,000 | $ 29,000,000 | ||
Loss on repurchase of debt | $ 1,000,000 | $ 3,000,000 | ||||
Secured Debt | Nonrecourse debt–legacy assets | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 7.50% | 7.50% | ||||
Minimum | Nonrecourse debt–legacy assets | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 1.50% | 1.50% | ||||
Minimum | Secured Debt | HECM Securitizations | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 2.00% | 2.00% | ||||
Weighted average useful life | 1 year | |||||
Maximum | Nonrecourse debt–legacy assets | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 7.00% | 7.00% | ||||
Maximum | Secured Debt | HECM Securitizations | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 6.50% | 6.50% | ||||
Weighted average useful life | 3 years |
Indebtedness - Schedule of Note
Indebtedness - Schedule of Notes Maturity (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Unsecured senior notes, net | $ 1,873 | $ 1,990 |
Unsecured Senior Notes | ||
Debt Instrument [Line Items] | ||
2,017 | 0 | |
2,018 | 364 | |
2,019 | 324 | |
2,020 | 397 | |
2,021 | 594 | |
Thereafter | 206 | |
Unsecured senior notes principal amount | 1,885 | |
Unamortized debt issuance costs | (12) | (17) |
Unsecured senior notes, net | $ 1,873 | $ 1,990 |
Indebtedness - Summary of Other
Indebtedness - Summary of Other Non-Recourse Debt (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Non-recourse debt | $ 8,569 | $ 9,631 |
Participating Interest Financing | ||
Debt Instrument [Line Items] | ||
Non-recourse debt | 7,640 | 8,914 |
Trust 2015-2 | ||
Debt Instrument [Line Items] | ||
Non-recourse debt | 0 | 114 |
Trust 2016-1 | ||
Debt Instrument [Line Items] | ||
Non-recourse debt | 0 | 194 |
Trust 2016-2 | ||
Debt Instrument [Line Items] | ||
Non-recourse debt | 105 | 158 |
Trust 2016-3 | ||
Debt Instrument [Line Items] | ||
Non-recourse debt | 153 | 208 |
Trust 2017-1 | ||
Debt Instrument [Line Items] | ||
Non-recourse debt | 240 | 0 |
Trust 2017-2 | ||
Debt Instrument [Line Items] | ||
Non-recourse debt | 399 | 0 |
Legacy Asset | ||
Debt Instrument [Line Items] | ||
Non-recourse debt | 39 | 50 |
Other | ||
Debt Instrument [Line Items] | ||
Non-recourse debt | 8,576 | 9,638 |
Nonrecourse debt–legacy assets | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | (7) | $ (7) |
Nonrecourse debt–legacy assets | Participating Interest Financing | ||
Debt Instrument [Line Items] | ||
Securitized Amount | 0 | |
Nonrecourse debt–legacy assets | Trust 2015-2 | ||
Debt Instrument [Line Items] | ||
Securitized Amount | 0 | |
Nonrecourse debt–legacy assets | Trust 2016-1 | ||
Debt Instrument [Line Items] | ||
Securitized Amount | 0 | |
Nonrecourse debt–legacy assets | Trust 2016-2 | ||
Debt Instrument [Line Items] | ||
Securitized Amount | 132 | |
Nonrecourse debt–legacy assets | Trust 2016-3 | ||
Debt Instrument [Line Items] | ||
Securitized Amount | 183 | |
Nonrecourse debt–legacy assets | Trust 2017-1 | ||
Debt Instrument [Line Items] | ||
Securitized Amount | 268 | |
Nonrecourse debt–legacy assets | Trust 2017-2 | ||
Debt Instrument [Line Items] | ||
Securitized Amount | 399 | |
Nonrecourse debt–legacy assets | Legacy Asset | ||
Debt Instrument [Line Items] | ||
Securitized Amount | $ 133 |
Payables and Accrued Liabilit70
Payables and Accrued Liabilities - Schedule of Accounts Payable (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||||||
Payables to servicing and subservicing investors | $ 572 | $ 655 | ||||
Loans subject to repurchase from Ginnie Mae | 143 | 152 | ||||
Accounts payable and other accrued liabilities | 89 | 178 | ||||
Accrued bonus and payroll | 78 | 95 | ||||
Accrued interest | 64 | 65 | ||||
Payable to insurance carriers and insurance cancellation reserves | 60 | 73 | ||||
Professional and legal | 54 | 47 | ||||
Payable to GSEs and securitized trusts | 53 | 58 | ||||
Lease obligations | 28 | 24 | ||||
Taxes | 21 | 84 | ||||
Repurchase reserves | 15 | $ 14 | 18 | $ 25 | $ 26 | $ 26 |
MSR purchases payable including advances | 11 | 21 | ||||
Total payables and accrued liabilities | $ 1,188 | $ 1,470 |
Payables and Accrued Liabilit71
Payables and Accrued Liabilities - Repurchase Reserves (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Loans Subject to Repurchase Reserve [Roll Forward] | ||||
Balance - beginning of period | $ 14 | $ 26 | $ 18 | $ 26 |
Provision, net of release | 2 | 0 | (1) | 1 |
Charge-offs | (1) | (1) | (2) | (2) |
Balance - end of period | $ 15 | $ 25 | $ 15 | $ 25 |
Securitizations and Financing72
Securitizations and Financings - Assets and Liabilities of Consolidated VIEs (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2017USD ($)special_purpose_entity | Dec. 31, 2016USD ($) | |
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Number of SPEs | special_purpose_entity | 4 | |
Assets | $ 1,199 | $ 1,409 |
Reverse Secured Borrowings, Assets, Carrying Amount | 8,540 | 9,594 |
Liabilities | 744 | 960 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | 8,470 | 9,514 |
Residential Mortgage | Restricted cash | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets | 121 | 190 |
Reverse Secured Borrowings, Assets, Carrying Amount | 25 | 37 |
Residential Mortgage | Reverse mortgage interests, net | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets | 0 | 0 |
Reverse Secured Borrowings, Assets, Carrying Amount | 8,515 | 9,557 |
Residential Mortgage | Advances and other receivables, net | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets | 934 | 1,065 |
Reverse Secured Borrowings, Assets, Carrying Amount | 0 | 0 |
Residential Mortgage | Mortgage loans held for investment, net | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets | 142 | 150 |
Reverse Secured Borrowings, Assets, Carrying Amount | 0 | 0 |
Residential Mortgage | Other assets | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets | 2 | 4 |
Reverse Secured Borrowings, Assets, Carrying Amount | 0 | 0 |
Residential Mortgage | Advance facilities | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities | 704 | 909 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | 0 | 0 |
Residential Mortgage | Payables and accrued liabilities | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities | 1 | 1 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | 0 | 0 |
Residential Mortgage | Participating interest financing | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities | 0 | 0 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | 7,573 | 8,840 |
Residential Mortgage | Trust 2015-2 | Other Non-Recourse Debt | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities | 0 | 0 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | 0 | 114 |
Residential Mortgage | Trust 2016-1 | Other Non-Recourse Debt | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities | 0 | 0 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | 0 | 194 |
Residential Mortgage | Trust 2016-2 | Other Non-Recourse Debt | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities | 0 | 0 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | 105 | 158 |
Residential Mortgage | Trust 2016-3 | Other Non-Recourse Debt | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities | 0 | 0 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | 153 | 208 |
Residential Mortgage | Trust 2017-1 | Other Non-Recourse Debt | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities | 0 | 0 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | 240 | 0 |
Residential Mortgage | Trust 2017-2 | Other Non-Recourse Debt | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities | 0 | 0 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | 399 | 0 |
Residential Mortgage | Other nonrecourse debt | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities | 39 | 50 |
Reverse Secured Borrowings, Liabilities, Carrying Amount | $ 0 | $ 0 |
Securitizations and Financing73
Securitizations and Financings - Securitization Trusts (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Variable Interest Entities and Securitizations [Abstract] | ||
Total collateral balances | $ 2,373 | $ 2,704 |
Total certificate balances | 2,214 | 2,455 |
Unconsolidated securitization trusts | $ 430 | $ 548 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jan. 31, 2017 | |
RSUs | Certain Employees | |||||
Class of Stock [Line Items] | |||||
Shares granted (in shares) | 3 | 1,062 | |||
Compensation expense | $ 4 | $ 6 | $ 13 | $ 18 | |
RSUs | Tranche One | Certain Employees | |||||
Class of Stock [Line Items] | |||||
Vesting percentage | 33.30% | ||||
RSUs | Tranche Two | Certain Employees | |||||
Class of Stock [Line Items] | |||||
Vesting percentage | 33.30% | ||||
RSUs | Tranche Three | Certain Employees | |||||
Class of Stock [Line Items] | |||||
Vesting percentage | 33.40% | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Amount authorized to be repurchased | $ 100 | ||||
Repurchase of common stock (in shares) | 0 | 10,589 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 5 | $ 29 | $ (4) | $ (106) |
Effective tax rate | 37.10% | 40.60% | 29.10% | 36.80% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Statutory federal rate percentage | 35.00% | 35.00% | 35.00% | 35.00% | |
Xome | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Tax expense related to disposal | $ 4 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Mortgage loans held for sale | $ 1,646 | $ 1,788 |
Mortgage servicing rights | 2,956 | 3,160 |
Liabilities | ||
Mortgage servicing rights financing | 20 | 27 |
Recurring Fair Value Measurements | ||
Assets | ||
Mortgage loans held for sale | 1,645.7 | 1,788 |
Mortgage servicing rights | 2,956.1 | 3,160 |
Derivative financial instruments | 76 | 133 |
Total assets | 4,678.2 | 5,081.4 |
Liabilities | ||
Mortgage servicing rights financing | 20.5 | 27 |
Excess spread financing | 1,045.6 | 1,214 |
Total liabilities | 1,072.5 | 1,253.7 |
Recurring Fair Value Measurements | IRLCs | ||
Assets | ||
Derivative financial instruments | 68.7 | 92.2 |
Liabilities | ||
Derivative financial instruments | 1.1 | |
Recurring Fair Value Measurements | Forward sales of MBS | ||
Assets | ||
Derivative financial instruments | 4.7 | 39.2 |
Liabilities | ||
Derivative financial instruments | 3.2 | 10 |
Recurring Fair Value Measurements | LPCs | ||
Assets | ||
Derivative financial instruments | 1 | 1.9 |
Liabilities | ||
Derivative financial instruments | 1.2 | 1.5 |
Recurring Fair Value Measurements | Treasury futures | ||
Assets | ||
Derivative financial instruments | 2 | |
Liabilities | ||
Derivative financial instruments | 2 | |
Recurring Fair Value Measurements | Interest rate swaps and caps | ||
Assets | ||
Derivative financial instruments | 0.1 | |
Liabilities | ||
Derivative financial instruments | 0.1 | |
Recurring Fair Value Measurements | Level 1 | ||
Assets | ||
Mortgage loans held for sale | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
Mortgage servicing rights financing | 0 | 0 |
Excess spread financing | 0 | 0 |
Total liabilities | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | IRLCs | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | |
Recurring Fair Value Measurements | Level 1 | Forward sales of MBS | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | LPCs | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | Treasury futures | ||
Assets | ||
Derivative financial instruments | 0 | |
Liabilities | ||
Derivative financial instruments | 0 | |
Recurring Fair Value Measurements | Level 1 | Interest rate swaps and caps | ||
Assets | ||
Derivative financial instruments | 0 | |
Liabilities | ||
Derivative financial instruments | 0 | |
Recurring Fair Value Measurements | Level 2 | ||
Assets | ||
Mortgage loans held for sale | 1,645.7 | 1,788 |
Mortgage servicing rights | 0 | 0 |
Derivative financial instruments | 76 | 133 |
Total assets | 1,722.1 | 1,921.4 |
Liabilities | ||
Mortgage servicing rights financing | 0 | 0 |
Excess spread financing | 0 | 0 |
Total liabilities | 6.4 | 12.7 |
Recurring Fair Value Measurements | Level 2 | IRLCs | ||
Assets | ||
Derivative financial instruments | 68.7 | 92.2 |
Liabilities | ||
Derivative financial instruments | 1.1 | |
Recurring Fair Value Measurements | Level 2 | Forward sales of MBS | ||
Assets | ||
Derivative financial instruments | 4.7 | 39.2 |
Liabilities | ||
Derivative financial instruments | 3.2 | 10 |
Recurring Fair Value Measurements | Level 2 | LPCs | ||
Assets | ||
Derivative financial instruments | 1 | 1.9 |
Liabilities | ||
Derivative financial instruments | 1.2 | 1.5 |
Recurring Fair Value Measurements | Level 2 | Treasury futures | ||
Assets | ||
Derivative financial instruments | 2 | |
Liabilities | ||
Derivative financial instruments | 2 | |
Recurring Fair Value Measurements | Level 2 | Interest rate swaps and caps | ||
Assets | ||
Derivative financial instruments | 0.1 | |
Liabilities | ||
Derivative financial instruments | 0.1 | |
Recurring Fair Value Measurements | Level 3 | ||
Assets | ||
Mortgage loans held for sale | 0 | 0 |
Mortgage servicing rights | 2,956.1 | 3,160 |
Derivative financial instruments | 0 | 0 |
Total assets | 2,956.1 | 3,160 |
Liabilities | ||
Mortgage servicing rights financing | 20.5 | 27 |
Excess spread financing | 1,045.6 | 1,214 |
Total liabilities | 1,066.1 | 1,241 |
Recurring Fair Value Measurements | Level 3 | IRLCs | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | |
Recurring Fair Value Measurements | Level 3 | Forward sales of MBS | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 3 | LPCs | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 3 | Treasury futures | ||
Assets | ||
Derivative financial instruments | 0 | |
Liabilities | ||
Derivative financial instruments | $ 0 | |
Recurring Fair Value Measurements | Level 3 | Interest rate swaps and caps | ||
Assets | ||
Derivative financial instruments | 0 | |
Liabilities | ||
Derivative financial instruments | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Reconciliation (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Excess spread financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | $ 1,214 | $ 1,232 |
Total gains or losses included in earnings | 0 | 25 |
Purchases | 0 | 0 |
Issuances | 0 | 155 |
Sales | 0 | 0 |
Settlements | (168) | (198) |
Balance - end of period | 1,046 | 1,214 |
Mortgage servicing rights financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 27 | 69 |
Total gains or losses included in earnings | (7) | (42) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements | 0 | 0 |
Balance - end of period | 20 | 27 |
Mortgage servicing rights | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 3,160 | 3,358 |
Total gains or losses included in earnings | (361) | (496) |
Purchases | 30 | 157 |
Issuances | 151 | 208 |
Sales | (24) | (67) |
Settlements | 0 | 0 |
Balance - end of period | $ 2,956 | $ 3,160 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Balance Sheet Line Item (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Financial assets | ||
Restricted cash | $ 356 | $ 388 |
Reverse mortgage interests, net | 10,299 | 11,033 |
Mortgage loans held for sale | 1,646 | 1,788 |
Mortgage loans held for investment, net | 143 | 151 |
Financial liabilities | ||
Unsecured senior notes | 1,873 | 1,990 |
Advance facilities | 797 | 1,096 |
Warehouse facilities | 2,774 | 2,421 |
Mortgage servicing rights financing liability | 20 | 27 |
Derivative financial instruments | 7 | 13 |
Excess spread financing | 1,046 | 1,214 |
Other nonrecourse debt | 8,569 | 9,631 |
Participating Interest Financing | ||
Financial liabilities | ||
Other nonrecourse debt | 7,640 | 8,914 |
Trust 2015-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 114 |
Trust 2016-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 194 |
Trust 2016-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 105 | 158 |
Trust 2016-3 | ||
Financial liabilities | ||
Other nonrecourse debt | 153 | 208 |
Trust 2017-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 240 | 0 |
Trust 2017-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 399 | 0 |
Legacy Asset | ||
Financial liabilities | ||
Other nonrecourse debt | 39 | 50 |
Recurring Fair Value Measurements | ||
Financial assets | ||
Cash and cash equivalents | 224 | 489 |
Restricted cash | 356 | 388 |
Advances and other receivables, net | 1,625 | 1,749 |
Reverse mortgage interests, net | 10,299 | 11,033 |
Mortgage loans held for sale | 1,645.7 | 1,788 |
Mortgage loans held for investment, net | 143 | 151 |
Derivative financial instruments | 76 | 133 |
Financial liabilities | ||
Unsecured senior notes | 1,885 | 2,007 |
Advance facilities | 798 | 1,096 |
Warehouse facilities | 2,775 | 2,423 |
Mortgage servicing rights financing liability | 20.5 | 27 |
Derivative financial instruments | 7 | 13 |
Excess spread financing | 1,046 | 1,214 |
Recurring Fair Value Measurements | Participating Interest Financing | ||
Financial liabilities | ||
Other nonrecourse debt | 7,640 | 8,914 |
Recurring Fair Value Measurements | Trust 2015-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 114 | |
Recurring Fair Value Measurements | Trust 2016-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 194 | |
Recurring Fair Value Measurements | Trust 2016-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 105 | 158 |
Recurring Fair Value Measurements | Trust 2016-3 | ||
Financial liabilities | ||
Other nonrecourse debt | 153 | 208 |
Recurring Fair Value Measurements | Legacy Asset | ||
Financial liabilities | ||
Other nonrecourse debt | 39 | 50 |
Recurring Fair Value Measurements | Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 224 | 489 |
Restricted cash | 356 | 388 |
Advances and other receivables, net | 0 | 0 |
Reverse mortgage interests, net | 0 | 0 |
Mortgage loans held for sale | 0 | 0 |
Mortgage loans held for investment, net | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Financial liabilities | ||
Unsecured senior notes | 1,920 | 2,047 |
Advance facilities | 0 | 0 |
Warehouse facilities | 0 | 0 |
Mortgage servicing rights financing liability | 0 | 0 |
Derivative financial instruments | 0 | 0 |
Excess spread financing | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | Participating Interest Financing | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | Trust 2015-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | |
Recurring Fair Value Measurements | Level 1 | Trust 2016-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | |
Recurring Fair Value Measurements | Level 1 | Trust 2016-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | Trust 2016-3 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | Trust 2017-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | |
Recurring Fair Value Measurements | Level 1 | Trust 2017-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | |
Recurring Fair Value Measurements | Level 1 | Legacy Asset | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Recurring Fair Value Measurements | Level 2 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Advances and other receivables, net | 0 | 0 |
Reverse mortgage interests, net | 0 | 0 |
Mortgage loans held for sale | 1,645.7 | 1,788 |
Mortgage loans held for investment, net | 0 | 0 |
Derivative financial instruments | 76 | 133 |
Financial liabilities | ||
Unsecured senior notes | 0 | 0 |
Advance facilities | 798 | 1,096 |
Warehouse facilities | 2,775 | 2,423 |
Mortgage servicing rights financing liability | 0 | 0 |
Derivative financial instruments | 7 | 13 |
Excess spread financing | 0 | 0 |
Recurring Fair Value Measurements | Level 2 | Participating Interest Financing | ||
Financial liabilities | ||
Other nonrecourse debt | 7,840 | 9,151 |
Recurring Fair Value Measurements | Level 2 | Trust 2015-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | |
Recurring Fair Value Measurements | Level 2 | Trust 2016-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | |
Recurring Fair Value Measurements | Level 2 | Trust 2016-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Recurring Fair Value Measurements | Level 2 | Trust 2016-3 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Recurring Fair Value Measurements | Level 2 | Trust 2017-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | |
Recurring Fair Value Measurements | Level 2 | Trust 2017-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | |
Recurring Fair Value Measurements | Level 2 | Legacy Asset | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Recurring Fair Value Measurements | Level 3 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Advances and other receivables, net | 1,625 | 1,749 |
Reverse mortgage interests, net | 10,539 | 11,232 |
Mortgage loans held for sale | 0 | 0 |
Mortgage loans held for investment, net | 143 | 153 |
Derivative financial instruments | 0 | 0 |
Financial liabilities | ||
Unsecured senior notes | 0 | 0 |
Advance facilities | 0 | 0 |
Warehouse facilities | 0 | 0 |
Mortgage servicing rights financing liability | 20.5 | 27 |
Derivative financial instruments | 0 | 0 |
Excess spread financing | 1,046 | 1,214 |
Recurring Fair Value Measurements | Level 3 | Participating Interest Financing | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Recurring Fair Value Measurements | Level 3 | Trust 2015-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 125 | |
Recurring Fair Value Measurements | Level 3 | Trust 2016-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 203 | |
Recurring Fair Value Measurements | Level 3 | Trust 2016-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 121 | 156 |
Recurring Fair Value Measurements | Level 3 | Trust 2016-3 | ||
Financial liabilities | ||
Other nonrecourse debt | 170 | 205 |
Recurring Fair Value Measurements | Level 3 | Trust 2017-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 252 | |
Recurring Fair Value Measurements | Level 3 | Trust 2017-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 400 | |
Recurring Fair Value Measurements | Level 3 | Legacy Asset | ||
Financial liabilities | ||
Other nonrecourse debt | $ 38 | $ 50 |
Capital Requirements - Narrativ
Capital Requirements - Narrative (Details) $ in Millions | Sep. 30, 2017USD ($) |
Mortgage Banking [Abstract] | |
Minimum net worth required for compliance | $ 1,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | |||||
Legal fees | $ 10 | $ 16 | $ 29 | $ 49 | |
Reverse Mortgage Servicing Rights | |||||
Loss Contingencies [Line Items] | |||||
UPB | 36,412 | 36,412 | |||
Reverse Mortgage Servicing Rights, Excluding Subservicing | |||||
Loss Contingencies [Line Items] | |||||
UPB | 35,906 | 35,906 | $ 38,940 | ||
Warehouse facilities, net of unamortized debt issuance costs | |||||
Loss Contingencies [Line Items] | |||||
Unfunded advance obligations | 3,921 | 3,921 | $ 4,396 | ||
Litigation and Regulatory Matters | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | 23 | 23 | |||
Litigation and Regulatory Matters | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | $ 62 | $ 62 |
Disposition and Exit Costs (Det
Disposition and Exit Costs (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | |
Xome | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Write off of assets | $ 7 | ||
Goodwill allocated to disposal | 2 | ||
Xome | Other Income (Expense) | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on disposal of business | 8 | ||
Customer relationships | Xome | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Intangible assets allocated to disposal | $ 4 | ||
Cost Reduction And Operating Effectiveness | Severance And Other Exit Costs | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Restructuring charges | $ 0.3 | $ 7 | |
Facility Closure | Severance And Other Exit Costs | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Restructuring charges | $ 3 |
Business Segment Reporting - Fi
Business Segment Reporting - Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Revenues: | |||||
Service related, net | $ 252 | $ 310 | $ 748 | $ 507 | |
Net gain on mortgage loans held for sale | 154 | 232 | 465 | 619 | |
Total revenues | 406 | 542 | 1,213 | 1,126 | |
Total Expenses | 368 | 407 | 1,109 | 1,232 | |
Other income (expenses): | |||||
Interest income | 157 | 103 | 435 | 313 | |
Interest expense | (181) | (165) | (557) | (493) | |
Other | (2) | (2) | 4 | (2) | |
Total other income (expenses), net | (26) | (64) | (118) | (182) | |
Income (loss) before income tax expense (benefit) | 12 | 71 | (14) | (288) | |
Depreciation and amortization | 15 | 17 | 44 | 48 | |
Total assets | 18,004 | 15,846 | 18,004 | 15,846 | $ 19,593 |
Operating Segments | |||||
Revenues: | |||||
Service related, net | 252 | 311 | 747 | 506 | |
Net gain on mortgage loans held for sale | 154 | 231 | 465 | 619 | |
Total revenues | 406 | 542 | 1,212 | 1,125 | |
Total Expenses | 345 | 378 | 1,037 | 1,145 | |
Other income (expenses): | |||||
Interest income | 155 | 99 | 423 | 302 | |
Interest expense | (143) | (124) | (441) | (369) | |
Other | (2) | (1) | 6 | (1) | |
Total other income (expenses), net | 10 | (26) | (12) | (68) | |
Income (loss) before income tax expense (benefit) | 71 | 138 | 163 | (88) | |
Depreciation and amortization | 12 | 13 | 34 | 42 | |
Total assets | 17,225 | 14,686 | 17,225 | 14,686 | |
Operating Segments | Servicing Segment | |||||
Revenues: | |||||
Service related, net | 191 | 211 | 537 | 225 | |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 | |
Total revenues | 191 | 211 | 537 | 225 | |
Total Expenses | 185 | 150 | 518 | 477 | |
Other income (expenses): | |||||
Interest income | 141 | 82 | 384 | 254 | |
Interest expense | (130) | (108) | (402) | (325) | |
Other | (2) | 0 | (2) | 0 | |
Total other income (expenses), net | 9 | (26) | (20) | (71) | |
Income (loss) before income tax expense (benefit) | 15 | 35 | (1) | (323) | |
Depreciation and amortization | 6 | 6 | 16 | 17 | |
Total assets | 15,147 | 12,250 | 15,147 | 12,250 | |
Operating Segments | Originations Segment | |||||
Revenues: | |||||
Service related, net | 16 | 16 | 47 | 47 | |
Net gain on mortgage loans held for sale | 134 | 208 | 402 | 526 | |
Total revenues | 150 | 224 | 449 | 573 | |
Total Expenses | 106 | 141 | 326 | 394 | |
Other income (expenses): | |||||
Interest income | 14 | 17 | 39 | 48 | |
Interest expense | (13) | (16) | (39) | (44) | |
Other | 0 | (1) | 0 | (1) | |
Total other income (expenses), net | 1 | 0 | 0 | 3 | |
Income (loss) before income tax expense (benefit) | 45 | 83 | 123 | 182 | |
Depreciation and amortization | 3 | 3 | 8 | 9 | |
Total assets | 4,644 | 4,523 | 4,644 | 4,523 | |
Operating Segments | Xome | |||||
Revenues: | |||||
Service related, net | 65 | 107 | 226 | 327 | |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 | |
Total revenues | 65 | 107 | 226 | 327 | |
Total Expenses | 54 | 87 | 193 | 274 | |
Other income (expenses): | |||||
Interest income | 0 | 0 | 0 | 0 | |
Interest expense | 0 | 0 | 0 | 0 | |
Other | 0 | 0 | 8 | 0 | |
Total other income (expenses), net | 0 | 0 | 8 | 0 | |
Income (loss) before income tax expense (benefit) | 11 | 20 | 41 | 53 | |
Depreciation and amortization | 3 | 4 | 10 | 16 | |
Total assets | 382 | 345 | 382 | 345 | |
Eliminations | |||||
Revenues: | |||||
Service related, net | (20) | (23) | (63) | (93) | |
Net gain on mortgage loans held for sale | 20 | 23 | 63 | 93 | |
Total revenues | 0 | 0 | 0 | 0 | |
Total Expenses | 0 | 0 | 0 | 0 | |
Other income (expenses): | |||||
Interest income | 0 | 0 | 0 | 0 | |
Interest expense | 0 | 0 | 0 | 0 | |
Other | 0 | 0 | 0 | 0 | |
Total other income (expenses), net | 0 | 0 | 0 | 0 | |
Income (loss) before income tax expense (benefit) | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Total assets | (2,948) | (2,432) | (2,948) | (2,432) | |
Corporate and Other | |||||
Revenues: | |||||
Service related, net | 0 | (1) | 1 | 1 | |
Net gain on mortgage loans held for sale | 0 | 1 | 0 | 0 | |
Total revenues | 0 | 0 | 1 | 1 | |
Total Expenses | 23 | 29 | 72 | 87 | |
Other income (expenses): | |||||
Interest income | 2 | 4 | 12 | 11 | |
Interest expense | (38) | (41) | (116) | (124) | |
Other | 0 | (1) | (2) | (1) | |
Total other income (expenses), net | (36) | (38) | (106) | (114) | |
Income (loss) before income tax expense (benefit) | (59) | (67) | (177) | (200) | |
Depreciation and amortization | 3 | 4 | 10 | 6 | |
Total assets | $ 779 | $ 1,160 | $ 779 | $ 1,160 |
Guarantor Financial Statement84
Guarantor Financial Statement Information - Narrative (Details) $ in Millions | Sep. 30, 2017USD ($)subsidiary | Dec. 31, 2016USD ($) |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||
Unsecured senior notes | $ | $ 1,873 | $ 1,990 |
Ownership percentage | 100.00% | |
Number of subsidiaries as guarantors of unsecured debt | subsidiary | 2 |
Guarantor Financial Statement85
Guarantor Financial Statement Information - Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Assets | ||||
Cash and cash equivalents | $ 224 | $ 489 | $ 695 | $ 613 |
Restricted cash | 356 | 388 | ||
Mortgage servicing rights | 2,961 | 3,166 | ||
Advances and other receivables, net | 1,625 | 1,749 | ||
Reverse mortgage interests, net | 10,299 | 11,033 | ||
Mortgage loans held for sale at fair value | 1,646 | 1,788 | ||
Mortgage loans held for investment, net | 143 | 151 | ||
Property and equipment, net | 127 | 136 | ||
Derivative financial instruments at fair value | 76 | 133 | ||
Other assets | 547 | 560 | ||
Investment in subsidiaries | 0 | 0 | ||
Total assets | 18,004 | 19,593 | 15,846 | |
Liabilities and Stockholders' Equity | ||||
Unsecured senior notes | 1,873 | 1,990 | ||
Advance facilities | 797 | 1,096 | ||
Warehouse facilities | 2,774 | 2,421 | ||
Payables and accrued liabilities | 1,188 | 1,470 | ||
MSR related liabilities - nonrecourse at fair value | 1,066 | 1,241 | ||
Mortgage servicing liabilities | 53 | 48 | ||
Derivative financial instruments at fair value | 7 | 13 | ||
Other nonrecourse debt, net | 8,569 | 9,631 | ||
Payables to affiliates | 0 | 0 | ||
Total liabilities | 16,327 | 17,910 | ||
Total stockholders' equity | 1,677 | 1,683 | 1,482 | 1,767 |
Total liabilities and stockholders' equity | 18,004 | 19,593 | ||
Eliminations | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Restricted cash | 0 | 0 | ||
Mortgage servicing rights | 0 | 0 | ||
Advances and other receivables, net | 0 | 0 | ||
Reverse mortgage interests, net | 0 | 0 | ||
Mortgage loans held for sale at fair value | 0 | 0 | ||
Mortgage loans held for investment, net | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Derivative financial instruments at fair value | 0 | 0 | ||
Other assets | (806) | (1,045) | ||
Investment in subsidiaries | (2,308) | (2,435) | ||
Total assets | (3,114) | (3,480) | ||
Liabilities and Stockholders' Equity | ||||
Unsecured senior notes | 0 | 0 | ||
Advance facilities | 0 | 0 | ||
Warehouse facilities | 0 | 0 | ||
Payables and accrued liabilities | 0 | 0 | ||
MSR related liabilities - nonrecourse at fair value | 0 | 0 | ||
Mortgage servicing liabilities | 0 | 0 | ||
Derivative financial instruments at fair value | 0 | 0 | ||
Other nonrecourse debt, net | 0 | 0 | ||
Payables to affiliates | (806) | (1,045) | ||
Total liabilities | (806) | (1,045) | ||
Total stockholders' equity | (2,308) | (2,435) | ||
Total liabilities and stockholders' equity | (3,114) | (3,480) | ||
Nationstar | Reportable entities | ||||
Assets | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Restricted cash | 0 | 0 | ||
Mortgage servicing rights | 0 | 0 | ||
Advances and other receivables, net | 0 | 0 | ||
Reverse mortgage interests, net | 0 | 0 | ||
Mortgage loans held for sale at fair value | 0 | 0 | ||
Mortgage loans held for investment, net | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Derivative financial instruments at fair value | 0 | 0 | ||
Other assets | 0 | 0 | ||
Investment in subsidiaries | 1,801 | 1,801 | ||
Total assets | 1,801 | 1,801 | ||
Liabilities and Stockholders' Equity | ||||
Unsecured senior notes | 0 | 0 | ||
Advance facilities | 0 | 0 | ||
Warehouse facilities | 0 | 0 | ||
Payables and accrued liabilities | 0 | 0 | ||
MSR related liabilities - nonrecourse at fair value | 0 | 0 | ||
Mortgage servicing liabilities | 0 | 0 | ||
Derivative financial instruments at fair value | 0 | 0 | ||
Other nonrecourse debt, net | 0 | 0 | ||
Payables to affiliates | 124 | 118 | ||
Total liabilities | 124 | 118 | ||
Total stockholders' equity | 1,677 | 1,683 | ||
Total liabilities and stockholders' equity | 1,801 | 1,801 | ||
Issuer | Reportable entities | ||||
Assets | ||||
Cash and cash equivalents | 201 | 453 | 664 | 597 |
Restricted cash | 211 | 159 | ||
Mortgage servicing rights | 2,931 | 3,142 | ||
Advances and other receivables, net | 1,625 | 1,749 | ||
Reverse mortgage interests, net | 9,357 | 10,316 | ||
Mortgage loans held for sale at fair value | 1,646 | 1,787 | ||
Mortgage loans held for investment, net | 1 | 1 | ||
Property and equipment, net | 108 | 113 | ||
Derivative financial instruments at fair value | 76 | 133 | ||
Other assets | 445 | 444 | ||
Investment in subsidiaries | 507 | 634 | ||
Total assets | 17,108 | 18,931 | ||
Liabilities and Stockholders' Equity | ||||
Unsecured senior notes | 1,873 | 1,990 | ||
Advance facilities | 93 | 187 | ||
Warehouse facilities | 2,774 | 2,421 | ||
Payables and accrued liabilities | 1,149 | 1,420 | ||
MSR related liabilities - nonrecourse at fair value | 1,046 | 1,219 | ||
Mortgage servicing liabilities | 53 | 48 | ||
Derivative financial instruments at fair value | 7 | 13 | ||
Other nonrecourse debt, net | 7,632 | 8,907 | ||
Payables to affiliates | 680 | 925 | ||
Total liabilities | 15,307 | 17,130 | ||
Total stockholders' equity | 1,801 | 1,801 | ||
Total liabilities and stockholders' equity | 17,108 | 18,931 | ||
Guarantor (Subsidiaries of Issuer) | Reportable entities | ||||
Assets | ||||
Cash and cash equivalents | 1 | 2 | 1 | 1 |
Restricted cash | 0 | 0 | ||
Mortgage servicing rights | 0 | 0 | ||
Advances and other receivables, net | 0 | 0 | ||
Reverse mortgage interests, net | 0 | 0 | ||
Mortgage loans held for sale at fair value | 0 | 0 | ||
Mortgage loans held for investment, net | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Derivative financial instruments at fair value | 0 | 0 | ||
Other assets | 177 | 323 | ||
Investment in subsidiaries | 0 | 0 | ||
Total assets | 178 | 325 | ||
Liabilities and Stockholders' Equity | ||||
Unsecured senior notes | 0 | 0 | ||
Advance facilities | 0 | 0 | ||
Warehouse facilities | 0 | 0 | ||
Payables and accrued liabilities | 2 | 2 | ||
MSR related liabilities - nonrecourse at fair value | 0 | 0 | ||
Mortgage servicing liabilities | 0 | 0 | ||
Derivative financial instruments at fair value | 0 | 0 | ||
Other nonrecourse debt, net | 0 | 0 | ||
Payables to affiliates | 0 | 0 | ||
Total liabilities | 2 | 2 | ||
Total stockholders' equity | 176 | 323 | ||
Total liabilities and stockholders' equity | 178 | 325 | ||
Non-Guarantor (Subsidiaries of Issuer) | Reportable entities | ||||
Assets | ||||
Cash and cash equivalents | 22 | 34 | $ 30 | $ 15 |
Restricted cash | 145 | 229 | ||
Mortgage servicing rights | 30 | 24 | ||
Advances and other receivables, net | 0 | 0 | ||
Reverse mortgage interests, net | 942 | 717 | ||
Mortgage loans held for sale at fair value | 0 | 1 | ||
Mortgage loans held for investment, net | 142 | 150 | ||
Property and equipment, net | 19 | 23 | ||
Derivative financial instruments at fair value | 0 | 0 | ||
Other assets | 731 | 838 | ||
Investment in subsidiaries | 0 | 0 | ||
Total assets | 2,031 | 2,016 | ||
Liabilities and Stockholders' Equity | ||||
Unsecured senior notes | 0 | 0 | ||
Advance facilities | 704 | 909 | ||
Warehouse facilities | 0 | 0 | ||
Payables and accrued liabilities | 37 | 48 | ||
MSR related liabilities - nonrecourse at fair value | 20 | 22 | ||
Mortgage servicing liabilities | 0 | 0 | ||
Derivative financial instruments at fair value | 0 | 0 | ||
Other nonrecourse debt, net | 937 | 724 | ||
Payables to affiliates | 2 | 2 | ||
Total liabilities | 1,700 | 1,705 | ||
Total stockholders' equity | 331 | 311 | ||
Total liabilities and stockholders' equity | $ 2,031 | $ 2,016 |
Guarantor Financial Statement86
Guarantor Financial Statement Information - Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Service related, net | $ 252 | $ 310 | $ 748 | $ 507 |
Net gain on mortgage loans held for sale | 154 | 232 | 465 | 619 |
Total revenues | 406 | 542 | 1,213 | 1,126 |
Expenses: | ||||
Salaries, wages and benefits | 183 | 211 | 557 | 613 |
General and administrative | 185 | 196 | 552 | 619 |
Total expenses | 368 | 407 | 1,109 | 1,232 |
Other income (expenses): | ||||
Interest income | 157 | 103 | 435 | 313 |
Interest expense | (181) | (165) | (557) | (493) |
Other income (expense) | (2) | (2) | 4 | (2) |
Gain (loss) from subsidiaries | 0 | 0 | 0 | 0 |
Total other income (expenses), net | (26) | (64) | (118) | (182) |
Income (loss) before income tax expense (benefit) | 12 | 71 | (14) | (288) |
Less: Income tax expense | 5 | 29 | (4) | (106) |
Net income (loss) | 7 | 42 | (10) | (182) |
Less: Net income (loss) attributable to noncontrolling interests | 0 | (3) | 1 | (3) |
Net income (loss) attributable to Nationstar | 7 | 45 | (11) | (179) |
Eliminations | ||||
Revenues: | ||||
Service related, net | 0 | 0 | 0 | 0 |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 |
Total revenues | 0 | 0 | 0 | 0 |
Expenses: | ||||
Salaries, wages and benefits | 0 | 0 | 0 | 0 |
General and administrative | 0 | 0 | 0 | 0 |
Total expenses | 0 | 0 | 0 | 0 |
Other income (expenses): | ||||
Interest income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Other income (expense) | 0 | 0 | 0 | 0 |
Gain (loss) from subsidiaries | (18) | (54) | (29) | 149 |
Total other income (expenses), net | (18) | (54) | (29) | 149 |
Income (loss) before income tax expense (benefit) | (18) | (54) | (29) | 149 |
Less: Income tax expense | 0 | 0 | 0 | 0 |
Net income (loss) | (18) | (54) | (29) | 149 |
Less: Net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income (loss) attributable to Nationstar | (18) | (54) | (29) | 149 |
Nationstar | Reportable entities | ||||
Revenues: | ||||
Service related, net | 0 | 0 | 0 | 0 |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 |
Total revenues | 0 | 0 | 0 | 0 |
Expenses: | ||||
Salaries, wages and benefits | 0 | 0 | 0 | 0 |
General and administrative | 0 | 0 | 0 | 0 |
Total expenses | 0 | 0 | 0 | 0 |
Other income (expenses): | ||||
Interest income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Other income (expense) | 0 | 0 | 0 | 0 |
Gain (loss) from subsidiaries | 7 | 45 | (11) | (179) |
Total other income (expenses), net | 7 | 45 | (11) | (179) |
Income (loss) before income tax expense (benefit) | 7 | 45 | (11) | (179) |
Less: Income tax expense | 0 | 0 | 0 | 0 |
Net income (loss) | 7 | 45 | (11) | (179) |
Less: Net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income (loss) attributable to Nationstar | 7 | 45 | (11) | (179) |
Issuer | Reportable entities | ||||
Revenues: | ||||
Service related, net | 181 | 196 | 497 | 156 |
Net gain on mortgage loans held for sale | 153 | 222 | 464 | 590 |
Total revenues | 334 | 418 | 961 | 746 |
Expenses: | ||||
Salaries, wages and benefits | 153 | 156 | 451 | 448 |
General and administrative | 154 | 143 | 440 | 453 |
Total expenses | 307 | 299 | 891 | 901 |
Other income (expenses): | ||||
Interest income | 145 | 91 | 396 | 276 |
Interest expense | (168) | (146) | (515) | (437) |
Other income (expense) | (3) | (2) | (5) | (2) |
Gain (loss) from subsidiaries | 11 | 9 | 40 | 30 |
Total other income (expenses), net | (15) | (48) | (84) | (133) |
Income (loss) before income tax expense (benefit) | 12 | 71 | (14) | (288) |
Less: Income tax expense | 5 | 29 | (4) | (106) |
Net income (loss) | 7 | 42 | (10) | (182) |
Less: Net income (loss) attributable to noncontrolling interests | 0 | (3) | 1 | (3) |
Net income (loss) attributable to Nationstar | 7 | 45 | (11) | (179) |
Guarantor (Subsidiaries of Issuer) | Reportable entities | ||||
Revenues: | ||||
Service related, net | 7 | 5 | 21 | 19 |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 |
Total revenues | 7 | 5 | 21 | 19 |
Expenses: | ||||
Salaries, wages and benefits | 1 | 1 | 3 | 3 |
General and administrative | 4 | 2 | 10 | 6 |
Total expenses | 5 | 3 | 13 | 9 |
Other income (expenses): | ||||
Interest income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Other income (expense) | 0 | 0 | 0 | 0 |
Gain (loss) from subsidiaries | 0 | 0 | 0 | 0 |
Total other income (expenses), net | 0 | 0 | 0 | 0 |
Income (loss) before income tax expense (benefit) | 2 | 2 | 8 | 10 |
Less: Income tax expense | 0 | 0 | 0 | 0 |
Net income (loss) | 2 | 2 | 8 | 10 |
Less: Net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income (loss) attributable to Nationstar | 2 | 2 | 8 | 10 |
Non-Guarantor (Subsidiaries of Issuer) | Reportable entities | ||||
Revenues: | ||||
Service related, net | 64 | 109 | 230 | 332 |
Net gain on mortgage loans held for sale | 1 | 10 | 1 | 29 |
Total revenues | 65 | 119 | 231 | 361 |
Expenses: | ||||
Salaries, wages and benefits | 29 | 54 | 103 | 162 |
General and administrative | 27 | 51 | 102 | 160 |
Total expenses | 56 | 105 | 205 | 322 |
Other income (expenses): | ||||
Interest income | 12 | 12 | 39 | 37 |
Interest expense | (13) | (19) | (42) | (56) |
Other income (expense) | 1 | 0 | 9 | 0 |
Gain (loss) from subsidiaries | 0 | 0 | 0 | 0 |
Total other income (expenses), net | 0 | (7) | 6 | (19) |
Income (loss) before income tax expense (benefit) | 9 | 7 | 32 | 20 |
Less: Income tax expense | 0 | 0 | 0 | 0 |
Net income (loss) | 9 | 7 | 32 | 20 |
Less: Net income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Net income (loss) attributable to Nationstar | $ 9 | $ 7 | $ 32 | $ 20 |
Guarantor Financial Statement87
Guarantor Financial Statement Information - Consolidating Statements of Cash Flow (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities | |||||
Net income (loss) attributable to Nationstar | $ 7 | $ 45 | $ (11) | $ (179) | |
Reconciliation of net income (loss) to net cash attributable to operating activities: | |||||
(Gain) loss from subsidiaries | 0 | 0 | |||
Net income (loss) attributable to non-controlling interest | 0 | (3) | 1 | (3) | |
Net gain on mortgage loans held for sale | (154) | (232) | (465) | (619) | |
Reverse mortgage loan interest income | (368) | (251) | |||
(Gain) loss on sale of assets | (8) | 2 | |||
Provision for servicing reserves | 113 | 101 | |||
Fair value changes and amortization of mortgage servicing rights | 361 | 778 | |||
Fair value changes in excess spread financing | 0 | (74) | |||
Fair value changes in mortgage servicing rights financing liability | (7) | (2) | |||
Amortization of premiums and accretion of discount | 63 | 48 | |||
Depreciation and amortization | 15 | 17 | 44 | 48 | |
Share-based compensation | 13 | 18 | |||
Other losses | 5 | 0 | |||
Repurchases of forward loan assets out of Ginnie Mae securitizations | (943) | (1,138) | |||
Repurchases of reverse loan assets out of Ginnie Mae securitizations, net of assignments to prior servicers | (2,468) | (1,609) | |||
Mortgage loans originated and purchased, net of fees, and other purchase-related activities | (14,002) | (15,063) | |||
Sale proceeds and loan payment proceeds for mortgage loans held for sale and held for investment | 15,472 | 16,268 | |||
Excess tax benefit from share based compensation | (1) | 4 | |||
Changes in assets and liabilities: | |||||
Advances and other receivables, net | 55 | 504 | |||
Reverse mortgage interests, net | 3,494 | 2,022 | |||
Other assets | (17) | (136) | |||
Payables and accrued liabilities | (284) | (139) | |||
Net cash attributable to operating activities | 1,047 | 580 | |||
Investing Activities | |||||
Property and equipment additions, net of disposals | (34) | (49) | |||
Purchase of forward mortgage servicing rights, net of liabilities incurred | (28) | (36) | |||
Net proceeds from acquisition of reverse mortgage servicing portfolio and HECM related receivables | 16 | 0 | |||
Proceeds on sale of forward and reverse mortgage servicing rights | 25 | 25 | |||
Proceeds on sale of assets | 16 | 0 | |||
Net cash attributable to investing activities | (5) | (60) | |||
Financing Activities | |||||
Increase in warehouse facilities | 351 | 718 | |||
Decrease in advance facilities | (298) | (458) | |||
Proceeds from issuance of HECM securitizations | 701 | 724 | |||
Repayment of HECM securitizations | (484) | (624) | |||
Proceeds from issuance of participating interest financing in reverse mortgage interests, net | 437 | 337 | |||
Repayment of participating interest financing in reverse mortgage interests, net | (1,730) | (817) | |||
Repayment of excess spread financing | $ (9) | (168) | (146) | ||
Repayment of nonrecourse debt – legacy assets | (12) | (12) | |||
Repurchase of unsecured senior notes | (122) | (29) | |||
Repurchase of common stock | 0 | (114) | |||
Transfers (to) from restricted cash, net | 38 | 0 | |||
Excess tax deficiency from share based compensation | 0 | (4) | |||
Surrender of shares relating to stock vesting | (4) | (3) | |||
Debt financing costs | (11) | (10) | |||
Dividends to noncontrolling interests | (5) | 0 | |||
Net cash attributable to financing activities | (1,307) | (438) | |||
Net (decrease) increase in cash and cash equivalents | (265) | 82 | |||
Cash and cash equivalents - beginning of period | 489 | 613 | |||
Cash and cash equivalents - end of period | 224 | 695 | 224 | 695 | |
Eliminations | |||||
Operating Activities | |||||
Net income (loss) attributable to Nationstar | (18) | (54) | (29) | 149 | |
Reconciliation of net income (loss) to net cash attributable to operating activities: | |||||
(Gain) loss from subsidiaries | 29 | (149) | |||
Net income (loss) attributable to non-controlling interest | 0 | 0 | 0 | 0 | |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 | |
Reverse mortgage loan interest income | 0 | 0 | |||
(Gain) loss on sale of assets | 0 | 0 | |||
Provision for servicing reserves | 0 | 0 | |||
Fair value changes and amortization of mortgage servicing rights | 0 | 0 | |||
Fair value changes in excess spread financing | 0 | 0 | |||
Fair value changes in mortgage servicing rights financing liability | 0 | 0 | |||
Amortization of premiums and accretion of discount | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | |||
Share-based compensation | 0 | 0 | |||
Other losses | 0 | ||||
Repurchases of forward loan assets out of Ginnie Mae securitizations | 0 | 0 | |||
Repurchases of reverse loan assets out of Ginnie Mae securitizations, net of assignments to prior servicers | 0 | 0 | |||
Mortgage loans originated and purchased, net of fees, and other purchase-related activities | 0 | 0 | |||
Sale proceeds and loan payment proceeds for mortgage loans held for sale and held for investment | 0 | 0 | |||
Excess tax benefit from share based compensation | 0 | 0 | |||
Changes in assets and liabilities: | |||||
Advances and other receivables, net | 0 | 0 | |||
Reverse mortgage interests, net | 0 | 0 | |||
Other assets | 0 | 0 | |||
Payables and accrued liabilities | 0 | 0 | |||
Net cash attributable to operating activities | 0 | 0 | |||
Investing Activities | |||||
Property and equipment additions, net of disposals | 0 | 0 | |||
Purchase of forward mortgage servicing rights, net of liabilities incurred | 0 | 0 | |||
Net proceeds from acquisition of reverse mortgage servicing portfolio and HECM related receivables | 0 | ||||
Proceeds on sale of forward and reverse mortgage servicing rights | 0 | 0 | |||
Proceeds on sale of assets | 0 | ||||
Net cash attributable to investing activities | 0 | 0 | |||
Financing Activities | |||||
Increase in warehouse facilities | 0 | 0 | |||
Decrease in advance facilities | 0 | 0 | |||
Proceeds from issuance of HECM securitizations | 0 | 0 | |||
Repayment of HECM securitizations | 0 | 0 | |||
Proceeds from issuance of participating interest financing in reverse mortgage interests, net | 0 | 0 | |||
Repayment of participating interest financing in reverse mortgage interests, net | 0 | 0 | |||
Repayment of excess spread financing | 0 | 0 | |||
Repayment of nonrecourse debt – legacy assets | 0 | 0 | |||
Repurchase of unsecured senior notes | 0 | 0 | |||
Repurchase of common stock | 0 | ||||
Transfers (to) from restricted cash, net | 0 | 0 | |||
Excess tax deficiency from share based compensation | 0 | ||||
Surrender of shares relating to stock vesting | 0 | 0 | |||
Debt financing costs | 0 | 0 | |||
Dividends to noncontrolling interests | 0 | ||||
Net cash attributable to financing activities | 0 | 0 | |||
Net (decrease) increase in cash and cash equivalents | 0 | 0 | |||
Cash and cash equivalents - beginning of period | 0 | 0 | |||
Cash and cash equivalents - end of period | 0 | 0 | 0 | 0 | |
Nationstar | Reportable entities | |||||
Operating Activities | |||||
Net income (loss) attributable to Nationstar | 7 | 45 | (11) | (179) | |
Reconciliation of net income (loss) to net cash attributable to operating activities: | |||||
(Gain) loss from subsidiaries | 11 | 179 | |||
Net income (loss) attributable to non-controlling interest | 0 | 0 | 0 | 0 | |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 | |
Reverse mortgage loan interest income | 0 | 0 | |||
(Gain) loss on sale of assets | 0 | 0 | |||
Provision for servicing reserves | 0 | 0 | |||
Fair value changes and amortization of mortgage servicing rights | 0 | 0 | |||
Fair value changes in excess spread financing | 0 | 0 | |||
Fair value changes in mortgage servicing rights financing liability | 0 | 0 | |||
Amortization of premiums and accretion of discount | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | |||
Share-based compensation | 0 | 0 | |||
Other losses | 0 | ||||
Repurchases of forward loan assets out of Ginnie Mae securitizations | 0 | 0 | |||
Repurchases of reverse loan assets out of Ginnie Mae securitizations, net of assignments to prior servicers | 0 | 0 | |||
Mortgage loans originated and purchased, net of fees, and other purchase-related activities | 0 | 0 | |||
Sale proceeds and loan payment proceeds for mortgage loans held for sale and held for investment | 0 | 0 | |||
Excess tax benefit from share based compensation | 0 | 0 | |||
Changes in assets and liabilities: | |||||
Advances and other receivables, net | 0 | 0 | |||
Reverse mortgage interests, net | 0 | 0 | |||
Other assets | 4 | 117 | |||
Payables and accrued liabilities | 0 | 0 | |||
Net cash attributable to operating activities | 4 | 117 | |||
Investing Activities | |||||
Property and equipment additions, net of disposals | 0 | 0 | |||
Purchase of forward mortgage servicing rights, net of liabilities incurred | 0 | 0 | |||
Net proceeds from acquisition of reverse mortgage servicing portfolio and HECM related receivables | 0 | ||||
Proceeds on sale of forward and reverse mortgage servicing rights | 0 | 0 | |||
Proceeds on sale of assets | 0 | ||||
Net cash attributable to investing activities | 0 | 0 | |||
Financing Activities | |||||
Increase in warehouse facilities | 0 | 0 | |||
Decrease in advance facilities | 0 | 0 | |||
Proceeds from issuance of HECM securitizations | 0 | 0 | |||
Repayment of HECM securitizations | 0 | 0 | |||
Proceeds from issuance of participating interest financing in reverse mortgage interests, net | 0 | 0 | |||
Repayment of participating interest financing in reverse mortgage interests, net | 0 | 0 | |||
Repayment of excess spread financing | 0 | 0 | |||
Repayment of nonrecourse debt – legacy assets | 0 | 0 | |||
Repurchase of unsecured senior notes | 0 | 0 | |||
Repurchase of common stock | (114) | ||||
Transfers (to) from restricted cash, net | 0 | 0 | |||
Excess tax deficiency from share based compensation | 0 | ||||
Surrender of shares relating to stock vesting | (4) | (3) | |||
Debt financing costs | 0 | 0 | |||
Dividends to noncontrolling interests | 0 | ||||
Net cash attributable to financing activities | (4) | (117) | |||
Net (decrease) increase in cash and cash equivalents | 0 | 0 | |||
Cash and cash equivalents - beginning of period | 0 | 0 | |||
Cash and cash equivalents - end of period | 0 | 0 | 0 | 0 | |
Issuer | Reportable entities | |||||
Operating Activities | |||||
Net income (loss) attributable to Nationstar | 7 | 45 | (11) | (179) | |
Reconciliation of net income (loss) to net cash attributable to operating activities: | |||||
(Gain) loss from subsidiaries | (40) | (30) | |||
Net income (loss) attributable to non-controlling interest | 0 | (3) | 1 | (3) | |
Net gain on mortgage loans held for sale | (153) | (222) | (464) | (590) | |
Reverse mortgage loan interest income | (368) | (251) | |||
(Gain) loss on sale of assets | 1 | 2 | |||
Provision for servicing reserves | 113 | 101 | |||
Fair value changes and amortization of mortgage servicing rights | 361 | 778 | |||
Fair value changes in excess spread financing | 2 | (74) | |||
Fair value changes in mortgage servicing rights financing liability | (7) | (2) | |||
Amortization of premiums and accretion of discount | 55 | (7,254) | |||
Depreciation and amortization | 33 | 32 | |||
Share-based compensation | 9 | 13 | |||
Other losses | 5 | ||||
Repurchases of forward loan assets out of Ginnie Mae securitizations | (943) | (1,138) | |||
Repurchases of reverse loan assets out of Ginnie Mae securitizations, net of assignments to prior servicers | (2,468) | (1,609) | |||
Mortgage loans originated and purchased, net of fees, and other purchase-related activities | (14,002) | (14,296) | |||
Sale proceeds and loan payment proceeds for mortgage loans held for sale and held for investment | 15,459 | 22,684 | |||
Excess tax benefit from share based compensation | (1) | 4 | |||
Changes in assets and liabilities: | |||||
Advances and other receivables, net | 55 | 504 | |||
Reverse mortgage interests, net | 3,719 | 2,137 | |||
Other assets | (99) | (682) | |||
Payables and accrued liabilities | (273) | (135) | |||
Net cash attributable to operating activities | 1,137 | 12 | |||
Investing Activities | |||||
Property and equipment additions, net of disposals | (31) | (40) | |||
Purchase of forward mortgage servicing rights, net of liabilities incurred | (22) | (36) | |||
Net proceeds from acquisition of reverse mortgage servicing portfolio and HECM related receivables | 16 | ||||
Proceeds on sale of forward and reverse mortgage servicing rights | 25 | 25 | |||
Proceeds on sale of assets | 16 | ||||
Net cash attributable to investing activities | 4 | (51) | |||
Financing Activities | |||||
Increase in warehouse facilities | 351 | 774 | |||
Decrease in advance facilities | (93) | (29) | |||
Proceeds from issuance of HECM securitizations | (6) | (4) | |||
Repayment of HECM securitizations | 0 | 0 | |||
Proceeds from issuance of participating interest financing in reverse mortgage interests, net | 437 | 337 | |||
Repayment of participating interest financing in reverse mortgage interests, net | (1,730) | (817) | |||
Repayment of excess spread financing | (168) | (146) | |||
Repayment of nonrecourse debt – legacy assets | 0 | 1 | |||
Repurchase of unsecured senior notes | (122) | (29) | |||
Repurchase of common stock | 0 | ||||
Transfers (to) from restricted cash, net | (46) | 33 | |||
Excess tax deficiency from share based compensation | (4) | ||||
Surrender of shares relating to stock vesting | 0 | 0 | |||
Debt financing costs | (11) | (10) | |||
Dividends to noncontrolling interests | (5) | ||||
Net cash attributable to financing activities | (1,393) | 106 | |||
Net (decrease) increase in cash and cash equivalents | (252) | 67 | |||
Cash and cash equivalents - beginning of period | 453 | 597 | |||
Cash and cash equivalents - end of period | 201 | 664 | 201 | 664 | |
Guarantor (Subsidiaries of Issuer) | Reportable entities | |||||
Operating Activities | |||||
Net income (loss) attributable to Nationstar | 2 | 2 | 8 | 10 | |
Reconciliation of net income (loss) to net cash attributable to operating activities: | |||||
(Gain) loss from subsidiaries | 0 | 0 | |||
Net income (loss) attributable to non-controlling interest | 0 | 0 | 0 | 0 | |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 | |
Reverse mortgage loan interest income | 0 | 0 | |||
(Gain) loss on sale of assets | 0 | 0 | |||
Provision for servicing reserves | 0 | 0 | |||
Fair value changes and amortization of mortgage servicing rights | 0 | 0 | |||
Fair value changes in excess spread financing | 0 | 0 | |||
Fair value changes in mortgage servicing rights financing liability | 0 | 0 | |||
Amortization of premiums and accretion of discount | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | |||
Share-based compensation | 0 | 0 | |||
Other losses | 0 | ||||
Repurchases of forward loan assets out of Ginnie Mae securitizations | 0 | 0 | |||
Repurchases of reverse loan assets out of Ginnie Mae securitizations, net of assignments to prior servicers | 0 | 0 | |||
Mortgage loans originated and purchased, net of fees, and other purchase-related activities | 0 | 0 | |||
Sale proceeds and loan payment proceeds for mortgage loans held for sale and held for investment | 0 | 0 | |||
Excess tax benefit from share based compensation | 0 | 0 | |||
Changes in assets and liabilities: | |||||
Advances and other receivables, net | 0 | 0 | |||
Reverse mortgage interests, net | 0 | 0 | |||
Other assets | (9) | (10) | |||
Payables and accrued liabilities | 0 | 0 | |||
Net cash attributable to operating activities | (1) | 0 | |||
Investing Activities | |||||
Property and equipment additions, net of disposals | 0 | 0 | |||
Purchase of forward mortgage servicing rights, net of liabilities incurred | 0 | 0 | |||
Net proceeds from acquisition of reverse mortgage servicing portfolio and HECM related receivables | 0 | ||||
Proceeds on sale of forward and reverse mortgage servicing rights | 0 | 0 | |||
Proceeds on sale of assets | 0 | ||||
Net cash attributable to investing activities | 0 | 0 | |||
Financing Activities | |||||
Increase in warehouse facilities | 0 | 0 | |||
Decrease in advance facilities | 0 | 0 | |||
Proceeds from issuance of HECM securitizations | 0 | 0 | |||
Repayment of HECM securitizations | 0 | 0 | |||
Proceeds from issuance of participating interest financing in reverse mortgage interests, net | 0 | 0 | |||
Repayment of participating interest financing in reverse mortgage interests, net | 0 | 0 | |||
Repayment of excess spread financing | 0 | 0 | |||
Repayment of nonrecourse debt – legacy assets | 0 | 0 | |||
Repurchase of unsecured senior notes | 0 | 0 | |||
Repurchase of common stock | 0 | ||||
Transfers (to) from restricted cash, net | 0 | 0 | |||
Excess tax deficiency from share based compensation | 0 | ||||
Surrender of shares relating to stock vesting | 0 | 0 | |||
Debt financing costs | 0 | 0 | |||
Dividends to noncontrolling interests | 0 | ||||
Net cash attributable to financing activities | 0 | 0 | |||
Net (decrease) increase in cash and cash equivalents | (1) | 0 | |||
Cash and cash equivalents - beginning of period | 2 | 1 | |||
Cash and cash equivalents - end of period | 1 | 1 | 1 | 1 | |
Non-Guarantor (Subsidiaries of Issuer) | Reportable entities | |||||
Operating Activities | |||||
Net income (loss) attributable to Nationstar | 9 | 7 | 32 | 20 | |
Reconciliation of net income (loss) to net cash attributable to operating activities: | |||||
(Gain) loss from subsidiaries | 0 | 0 | |||
Net income (loss) attributable to non-controlling interest | 0 | 0 | 0 | 0 | |
Net gain on mortgage loans held for sale | (1) | (10) | (1) | (29) | |
Reverse mortgage loan interest income | 0 | 0 | |||
(Gain) loss on sale of assets | (9) | 0 | |||
Provision for servicing reserves | 0 | 0 | |||
Fair value changes and amortization of mortgage servicing rights | 0 | 0 | |||
Fair value changes in excess spread financing | (2) | 0 | |||
Fair value changes in mortgage servicing rights financing liability | 0 | 0 | |||
Amortization of premiums and accretion of discount | 8 | 7,302 | |||
Depreciation and amortization | 11 | 16 | |||
Share-based compensation | 4 | 5 | |||
Other losses | 0 | ||||
Repurchases of forward loan assets out of Ginnie Mae securitizations | 0 | 0 | |||
Repurchases of reverse loan assets out of Ginnie Mae securitizations, net of assignments to prior servicers | 0 | 0 | |||
Mortgage loans originated and purchased, net of fees, and other purchase-related activities | 0 | (767) | |||
Sale proceeds and loan payment proceeds for mortgage loans held for sale and held for investment | 13 | (6,416) | |||
Excess tax benefit from share based compensation | 0 | 0 | |||
Changes in assets and liabilities: | |||||
Advances and other receivables, net | 0 | 0 | |||
Reverse mortgage interests, net | (225) | (115) | |||
Other assets | 87 | 439 | |||
Payables and accrued liabilities | (11) | (4) | |||
Net cash attributable to operating activities | (93) | 451 | |||
Investing Activities | |||||
Property and equipment additions, net of disposals | (3) | (9) | |||
Purchase of forward mortgage servicing rights, net of liabilities incurred | (6) | 0 | |||
Net proceeds from acquisition of reverse mortgage servicing portfolio and HECM related receivables | 0 | ||||
Proceeds on sale of forward and reverse mortgage servicing rights | 0 | 0 | |||
Proceeds on sale of assets | 0 | ||||
Net cash attributable to investing activities | (9) | (9) | |||
Financing Activities | |||||
Increase in warehouse facilities | 0 | (56) | |||
Decrease in advance facilities | (205) | (429) | |||
Proceeds from issuance of HECM securitizations | 707 | 728 | |||
Repayment of HECM securitizations | (484) | (624) | |||
Proceeds from issuance of participating interest financing in reverse mortgage interests, net | 0 | 0 | |||
Repayment of participating interest financing in reverse mortgage interests, net | 0 | 0 | |||
Repayment of excess spread financing | 0 | 0 | |||
Repayment of nonrecourse debt – legacy assets | (12) | (13) | |||
Repurchase of unsecured senior notes | 0 | 0 | |||
Repurchase of common stock | 0 | ||||
Transfers (to) from restricted cash, net | 84 | (33) | |||
Excess tax deficiency from share based compensation | 0 | ||||
Surrender of shares relating to stock vesting | 0 | 0 | |||
Debt financing costs | 0 | 0 | |||
Dividends to noncontrolling interests | 0 | ||||
Net cash attributable to financing activities | 90 | (427) | |||
Net (decrease) increase in cash and cash equivalents | (12) | 15 | |||
Cash and cash equivalents - beginning of period | 34 | 15 | |||
Cash and cash equivalents - end of period | $ 22 | $ 30 | $ 22 | $ 30 |
Transactions with Affiliates -
Transactions with Affiliates - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jan. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||||
Mortgage servicing rights financing liability - fair value | $ 20 | $ 20 | $ 27 | ||||
Newcastle | |||||||
Related Party Transaction [Line Items] | |||||||
Servicing fee, percentage of unpaid principal balance | 0.50% | ||||||
UPB | 511 | $ 511 | 576 | ||||
Servicing fees and other performance incentive fees received | 0.6 | $ 0.7 | 2 | $ 2 | |||
New Residential | |||||||
Related Party Transaction [Line Items] | |||||||
Servicing fees and other performance incentive fees received | 0.4 | 0.5 | 1 | 0.7 | |||
Excess spread financing | 899 | 899 | $ 1,064 | ||||
Fees paid | 59 | 71 | 186 | 222 | |||
Revenue recognized from servicing agreements | 11 | 1 | 20 | 4 | |||
Loan Subservicing Agreement | OneMain Financial Holdings, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Recognized revenue from related party | 0.2 | $ 0.5 | 1 | $ 1 | |||
Subsidiary of New Residential | Loan Subservicing Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
UPB subserviced | 107,000 | 107,000 | $ 111,000 | ||||
Subsidiary of New Residential | Loan Subservicing Agreement | Agency MSRs | |||||||
Related Party Transaction [Line Items] | |||||||
UPB subserviced | $ 97,000 | ||||||
UPB subserviced boarded through 4th quarter | $ 29,000 | $ 72,000 | |||||
Forecast | Subsidiary of New Residential | Loan Subservicing Agreement | Agency MSRs | |||||||
Related Party Transaction [Line Items] | |||||||
UPB subserviced boarded through 4th quarter | $ 35,000 |