Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 02, 2018 | |
Document and Entity Information [Abstract] | ||
Entity registrant name | Front Yard Residential Corporation | |
Entity central index key | 1,555,039 | |
Current fiscal year end date | --12-31 | |
Entity filer category | Accelerated Filer | |
Document type | 10-Q | |
Document period end date | Mar. 31, 2018 | |
Document fiscal year focus | 2,018 | |
Document fiscal period focus | Q1 | |
Amendment flag | false | |
Entity common stock, shares outstanding | 53,492,137 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Real estate held for use: | ||
Land | $ 321,656 | $ 322,062 |
Rental residential properties | 1,394,118 | 1,381,110 |
Real estate owned | 50,782 | 64,036 |
Total real estate held for use | 1,766,556 | 1,767,208 |
Less: accumulated depreciation | (90,251) | (73,655) |
Total real estate held for use, net | 1,676,305 | 1,693,553 |
Real estate assets held for sale | 45,344 | 75,718 |
Mortgage loans at fair value | 10,274 | 11,477 |
Cash and cash equivalents | 115,068 | 113,666 |
Restricted cash | 40,983 | 47,822 |
Accounts receivable, net | 21,894 | 19,555 |
Prepaid expenses and other assets | 11,249 | 12,758 |
Total assets | 1,921,117 | 1,974,549 |
Liabilities: | ||
Repurchase and loan agreements | 1,253,720 | 1,270,157 |
Accounts payable and accrued liabilities | 54,496 | 55,639 |
Related party payables | 4,027 | 4,151 |
Total liabilities | 1,312,243 | 1,329,947 |
Commitments and contingencies (Note 7) | 0 | 0 |
Equity: | ||
Common stock, $0.01 par value, 200,000,000 authorized shares; 53,492,137 shares issued and outstanding as of March 31, 2018 and 53,447,950 shares issued and outstanding as of December 31, 2017 | 535 | 534 |
Additional paid-in capital | 1,181,019 | 1,181,327 |
Accumulated deficit | (572,680) | (537,259) |
Total equity | 608,874 | 644,602 |
Total liabilities and equity | $ 1,921,117 | $ 1,974,549 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Equity: | ||
Common stock, par value per share, in USD per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 53,492,137 | 53,447,950 |
Common stock, shares outstanding | 53,492,137 | 53,447,950 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Rental revenues | $ 39,765 | $ 25,618 |
Change in unrealized gain on mortgage loans | (15,508) | (51,865) |
Net realized gain on mortgage loans | (470) | 35,550 |
Net realized gain on sales of real estate | 14,344 | 19,956 |
Interest income | 0 | 79 |
Total revenues | 39,765 | 29,338 |
Expenses: | ||
Residential property operating expenses | 16,792 | 18,259 |
Real estate depreciation and amortization | 19,190 | 15,174 |
Acquisition fees and costs | 33 | 167 |
Selling costs and impairment | 7,575 | 14,220 |
Mortgage loan servicing costs | 355 | 6,245 |
Interest expense | 16,063 | 15,572 |
Share-based compensation | (414) | 1,914 |
General and administrative | 2,673 | 2,322 |
Management fees to AAMC | 3,790 | 4,815 |
Total expenses | 66,057 | 78,688 |
Operating loss | (26,292) | (49,350) |
Net loss on real estate and mortgage loans | (1,634) | 3,641 |
Other income | 576 | 0 |
Loss before income taxes | (27,350) | (49,350) |
Income tax expense | 0 | 7 |
Net loss | $ (27,350) | $ (49,357) |
Loss per share of common stock - basic: | ||
Loss per basic share (usd per share) | $ (0.51) | $ (0.92) |
Weighted average common stock outstanding – basic (in shares) | 53,454,063 | 53,646,291 |
Loss per share of common stock - diluted: | ||
Loss per diluted share (usd per share) | $ (0.51) | $ (0.92) |
Weighted average common stock outstanding – diluted (in shares) | 53,454,063 | 53,646,291 |
Dividends declared per common share (usd per share) | $ 0.15 | $ 0.15 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2016 | 53,667,631 | |||
Beginning balance at Dec. 31, 2016 | $ 863,068 | $ 537 | $ 1,182,245 | $ (319,714) |
Increase (Decrease) in Stockholders' Equity | ||||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares) | 26,703 | |||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes | 48 | 48 | ||
Repurchased of common stock (in shares) | (166,579) | |||
Repurchases of common stock | (2,332) | $ (2) | (2,330) | |
Dividends on common stock | (8,173) | (8,173) | ||
Share-based compensation | 1,914 | 1,914 | ||
Net loss | (49,357) | (49,357) | ||
Ending balance (in shares) at Mar. 31, 2017 | 53,527,755 | |||
Ending balance at Mar. 31, 2017 | $ 805,168 | $ 535 | 1,181,877 | (377,244) |
Beginning balance (in shares) at Dec. 31, 2017 | 53,447,950 | 53,447,950 | ||
Beginning balance at Dec. 31, 2017 | $ 644,602 | $ 534 | 1,181,327 | (537,259) |
Increase (Decrease) in Stockholders' Equity | ||||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes (in shares) | 44,187 | |||
Common shares issued under share-based compensation plans, net of shares withheld for employee taxes | 107 | $ 1 | 106 | |
Dividends on common stock | (8,071) | (8,071) | ||
Share-based compensation | (414) | (414) | ||
Net loss | $ (27,350) | (27,350) | ||
Ending balance (in shares) at Mar. 31, 2018 | 53,492,137 | 53,492,137 | ||
Ending balance at Mar. 31, 2018 | $ 608,874 | $ 535 | $ 1,181,019 | $ (572,680) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per common share (usd per share) | $ 0.15 | $ 0.15 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities: | ||
Net loss | $ (27,350) | $ (49,357) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Net loss (gain) on real estate and mortgage loans | 1,634 | (3,641) |
Real estate depreciation and amortization | 19,190 | 15,174 |
Selling costs and impairment | 7,575 | 14,220 |
Share-based compensation | (414) | 1,914 |
Amortization of deferred financing costs | 1,357 | 2,331 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (3,510) | (1,208) |
Prepaid expenses and other assets | (1,264) | (903) |
Accounts payable and accrued liabilities | (1,565) | 1,030 |
Related party payables | (124) | (175) |
Net cash used in operating activities | (4,471) | (20,615) |
Investing activities: | ||
Investment in real estate | (4,293) | (28,225) |
Investment in renovations | (7,493) | (13,453) |
Real estate tax advances | (91) | (752) |
Mortgage loan resolutions and dispositions | 1,671 | 117,690 |
Mortgage loan payments | 85 | 3,694 |
Disposition of real estate | 35,799 | 75,888 |
Acquisition related deposits | 0 | (315) |
Investment in derivative financial instrument | (936) | 0 |
Net cash provided by investing activities | 24,742 | 154,527 |
Financing activities: | ||
Proceeds from exercise of stock options | 107 | 181 |
Payment of tax withholdings on share-based compensation plan awards | 0 | (133) |
Repurchase of common stock | 0 | (2,332) |
Dividends on common stock | (8,021) | (8,050) |
Repayments of other secured debt | 0 | (61,882) |
Proceeds from repurchase and loan agreements | 0 | 6,099 |
Repayments of repurchase and loan agreements | (17,575) | (93,786) |
Payment of deferred financing costs | (219) | (1,743) |
Net cash used in financing activities | (25,708) | (161,646) |
Net change in cash, cash equivalents and restricted cash | (5,437) | (27,734) |
Cash, cash equivalents and restricted cash as of beginning of the period | 161,488 | 129,223 |
Cash, cash equivalents and restricted cash as of end of the period | 156,051 | 101,489 |
Cash paid for: | ||
Interest | 14,727 | 13,362 |
Income taxes | 0 | 1 |
Non-cash investing and financing transactions: | ||
Seller financing of assets acquired | 0 | 79,879 |
Transfer of mortgage loans (from) to real estate owned, net | (137) | 30,553 |
Transfer of mortgage loans at fair value to mortgage loans held for sale | 0 | 352,677 |
Changes in accrued capital expenditures | (748) | 1,582 |
Changes in receivables from mortgage loan resolutions and dispositions, payments and real estate tax advances to borrowers, net | (523) | 4,519 |
Changes in receivables from real estate owned dispositions | (648) | (8,950) |
Dividends declared but not paid | $ 8,069 | $ 8,463 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Front Yard Residential Corporation (“we,” “our,” “us,” or the “Company”) is a Maryland real estate investment trust (“REIT”) focused on acquiring, owning and managing single-family rental (“SFR”) properties throughout the United States. We conduct substantially all of our activities through our wholly owned subsidiary, Front Yard Residential, L.P., and its subsidiaries. We employ a diversified SFR property acquisition strategy that includes acquiring large portfolios and smaller pools of SFR properties from a variety of market participants. As of March 31, 2018 , we had a rental portfolio of approximately 12,000 homes. In addition, we had a small portfolio of mortgage loans and non-rental real estate owned (“REO”) properties remaining from our previous mortgage loan portfolio acquisitions. We are currently in the process of liquidating these assets in order to create additional liquidity and purchasing power to continue building our rental portfolio. We are managed by Altisource Asset Management Corporation (“AAMC” or our “Manager”). As we do not have any employees, AAMC provides us with dedicated personnel to administer our business and perform certain of our corporate governance functions. AAMC also provides portfolio management services in connection with our acquisition and management of SFR properties and the ongoing management of our remaining residential mortgage loans and REO properties. See Note 8 for a description of this related-party relationship. We have property management contracts with two separate third-party service providers for, among other things, leasing and lease management, operations, maintenance, repair, property management and property disposition services in respect of our SFR and REO portfolios. We also have servicing agreements with two separate mortgage loan servicers with respect to the servicing of the remaining mortgage loans in our portfolio. Basis of presentation and use of estimates The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All wholly owned subsidiaries are included, and all intercompany accounts and transactions have been eliminated. The unaudited interim condensed consolidated financial statements and accompanying unaudited condensed consolidated financial information, in our opinion, contain all adjustments that are of a normal recurring nature and are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. The interim results are not necessarily indicative of results for a full year. We have omitted certain notes and other information from the interim condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q as permitted by Securities and Exchange Commission (“SEC”) rules and regulations. These condensed consolidated financial statements should be read in conjunction with our annual consolidated financial statements included within our 2017 Annual Report on Form 10-K, which was filed with the SEC on March 1, 2018. Use of estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. Recently issued accounting standards Adoption of recent accounting standards In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation - Stock Compensation (Topic 718). The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. Our adoption of this amendment on January 1, 2018 did not have a significant effect on our condensed consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). ASU 2017-05 clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset,” in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets. If substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets within the scope of Subtopic 610-20. This amendment also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent company may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. ASU 2017-05 is effective for periods beginning after December 15, 2017. Our adoption of this amendment on January 1, 2018 did not have a significant effect on our condensed consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The amendments in ASU 2016-16 eliminate the exception of recognizing, at the time of transfer, current and deferred income taxes for intra-entity asset transfers other than inventory. This ASU is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those annual periods. Our adoption of this amendment on January 1, 2018 did not have a significant effect on our condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under Topic 230. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Our adoption of this amendment on January 1, 2018 did not have a significant effect on our condensed consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10). ASU 2016-01 requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Our adoption of this amendment on January 1, 2018 did not have a significant effect on our condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which effectively delayed the adoption date of ASU 2014-09 by one year. In 2016 and 2017, the FASB issued accounting standards updates that amended several aspects of ASU 2014-09. ASU 2014-09, as amended, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Management performed an analysis of our gains and losses arising from real estate sales (the sole component of our revenue within the scope of ASU 2014-09). We determined that our policy for recognition of gains and losses on real estate sales prior to our adoption is consistent with the updated revenue recognition requirements of ASU 2014-09, as amended. Therefore, our adoption of ASU 2014-09 effective January 1, 2018 had no significant impact on our previous revenue recognition practices, and our application of the modified retrospective method of adoption resulted in no adjustments to comparative information or cumulative adjustments to any beginning balances in the current period. As our mortgage loan and related REO activities are no longer a core part of our operations, we determined to prospectively classify net gains and losses from sales of real estate and resolutions and dispositions of mortgage loans as a component of other income, outside of operating income or loss, which is consistent with the guidance of ASU 2014-09. Recently issued accounting standards not yet adopted In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The ASU expands the activities that qualify for hedge accounting and simplifies the rules for reporting hedging transactions. This ASU is effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We expect to adopt this standard on January 1, 2019, and we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, which amends the guidance on measuring credit losses on financial assets held at amortized cost. The amendment is intended to address the issue that the previous “incurred loss” methodology was restrictive for an entity's ability to record credit losses based on not yet meeting the “probable” threshold. The new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected with a valuation provision. This ASU is effective for fiscal years beginning after December 15, 2019. The amendments in ASU 2016-13 should be applied on a modified retrospective transition basis. We expect to adopt this standard on January 1, 2020. While we are still evaluating the overall impact of this ASU, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position and also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. Accounting by lessors is substantially unchanged from prior practice as lessors will continue to recognize lease revenue on a straight-line basis. In September 2017, FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provides additional implementation guidance on the previously issued ASU 2016-02. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2016-02 should be applied on a modified retrospective transition basis, and a number of practical expedients may apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. We expect to adopt this standard on January 1, 2019. While we are still evaluating the overall impact of this ASU, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. |
Asset Acquisitions and Disposit
Asset Acquisitions and Dispositions | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate And Mortgage Loans On Real Estate Acquisitions And Disposals [Abstract] | |
Asset Acquisitions and Dispositions | Asset Acquisitions and Dispositions Real estate assets Real estate acquisitions HOME Flow Transaction On March 30, 2017, we entered into an agreement to acquire up to 3,500 SFR properties (the “HOME Flow Transaction”) from entities (the “Sellers”) sponsored by Amherst Holdings, LLC (“Amherst”), pursuant to which we acquired 3,465 SFR properties in three separate closings during 2017. • In the first closing on March 30, 2017, our indirect wholly owned subsidiary, HOME SFR Borrower II, LLC (“HOME Borrower II”), acquired 757 SFR properties for an aggregate purchase price of $106.5 million . The purchase price was funded with approximately $79.9 million in a seller financing arrangement (the “HOME II Loan Agreement,” see Note 6 ), representing 75% of the aggregate purchase price, as well as $26.6 million of cash on hand. We capitalized $1.5 million of acquisition fees and costs related to this portfolio acquisition. The value of in-place leases was estimated at $2.4 million based upon the costs we would have incurred to lease the properties and was amortized over the weighted average remaining life of the leases of approximately seven months as of the acquisition date. • In the second closing on June 29, 2017, our indirect wholly owned subsidiary, HOME SFR Borrower III, LLC (“HOME Borrower III”), acquired 751 SFR properties for an aggregate purchase price of $117.1 million . The purchase price was funded with approximately $87.8 million in a seller financing arrangement (the “HOME III Loan Agreement,” see Note 6 ), representing 75% of the aggregate purchase price, as well as $29.3 million of cash on hand. We capitalized $1.3 million of acquisition fees and costs related to this portfolio acquisition. The value of in-place leases was estimated at $2.0 million based upon the costs we would have incurred to lease the properties and is being amortized over the weighted average remaining life of the leases of approximately nine months as of the acquisition date. • In the third and final closing on November 29, 2017, our wholly owned subsidiary, HOME SFR Borrower IV, LLC (“HOME Borrower IV”) acquired 1,957 SFR properties for an aggregate purchase price of $305.1 million . The purchase price was funded with approximately $228.8 million in two separate seller financing arrangements (the “HOME IV Loan Agreements,” see Note 6 ), representing 75% of the aggregate purchase price, as well as $76.3 million of cash on hand. We capitalized $1.9 million of acquisition fees and costs related to this portfolio acquisition. The value of in-place leases was estimated at $5.9 million based on the costs we would have incurred to lease the properties and is being amortized over the weighted average remaining life of the leases of approximately seven months as of the acquisition date. In accordance with the related purchase and sale agreement, certain of the properties are subject to potential purchase price adjustments, which will be based on the rental rates achieved for the properties within 24 months after the closing date. Because such future rental rates are unknown, we are unable to predict the ultimate adjustments, if any, that will be made to the initial aggregate purchase price at this time (see Note 7 ). For each closing under the HOME Flow Transaction, we allocated the purchase price, including capitalized acquisition fees and costs, based on the relative fair value of the properties acquired. During the three months ended March 31, 2018 , we acquired 35 SFR properties under our other acquisition programs for an aggregate purchase price of $4.3 million . Real estate dispositions During the three months ended March 31, 2018 and 2017 , we sold 193 and 413 properties, respectively. Net proceeds of these sales were $35.2 million and $66.9 million , respectively, and we recorded $14.3 million and $20.0 million , respectively, of net realized gain on sales of real estate. The 2018 net realized gain amount is recorded as a component of net realized loss on real estate and mortgage loans in our condensed consolidated statement of operations. Mortgage loans Mortgage loan dispositions and resolutions During the three months ended March 31, 2018 and 2017 , we resolved 12 and 78 mortgage loans, respectively, primarily through short sales, refinancing and foreclosure sales. In addition, during the three months ended March 31, 2017, we sold 556 mortgage loans to third party purchasers. Net proceeds of these sales and resolutions were $1.1 million and $124.7 million , respectively, and we recorded $(0.5) million and $35.6 million of net realized (loss) gain on mortgage loans, respectively. The 2018 net realized loss amount is recorded as a component of net loss on real estate and mortgage loans in our condensed consolidated statement of operations. Transfers of mortgage loans to real estate owned During the three months ended March 31, 2018 , we transferred two mortgage loans to REO, which were offset by two reversions of REO properties to mortgage loans, at an aggregate fair value based on broker price opinions (“BPOs”) of $(0.1) million . During the three months ended March 31, 2017 , we transferred an aggregate of 195 mortgage loans to REO at an aggregate fair value based on BPOs of $28.7 million . Such transfers occur when the foreclosure sale is complete; however, subsequent to a foreclosure sale, we may be notified that the foreclosure sale was invalidated for certain reasons. In connection with these transfers to REO, we recorded $0.1 million and $9.5 million in change in unrealized gain on mortgage loans, respectively, that resulted from marking the properties to their most current market value. The 2018 change in unrealized gain amount is recorded as a component of net loss on real estate and mortgage loans in our condensed consolidated statement of operations. The following table presents the components of net gain (loss) on real estate and mortgage loans during the three months ended March 31, 2018 and 2017 ($ in thousands): Three months ended March 31, 2018 2017 Change in unrealized gain on mortgage loans due to: Conversion of mortgage loans to REO, net $ 137 $ 9,486 Change in fair value, net 63 560 Reclassification to realized gain or loss (15,708 ) (61,911 ) Total change in unrealized gain on mortgage loans (15,508 ) (51,865 ) Net realized (loss) gain on mortgage loans (470 ) 35,550 Net realized gain on sales of real estate 14,344 19,956 Net (loss) gain on real estate and mortgage loans $ (1,634 ) $ 3,641 |
Real Estate Assets, Net
Real Estate Assets, Net | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate [Abstract] | |
Real Estate Assets, Net | Real Estate Assets, Net Real estate held for use As of March 31, 2018 , we had 12,213 single-family residential properties held for use. Of these properties, 11,090 had been leased, 493 were listed and ready for rent, 230 were in unit turn status and 141 were in varying stages of renovation. With respect to the remaining 259 REO properties, we will make a final determination whether each property meets our rental profile. As of December 31, 2017 , we had 12,241 single-family residential properties held for use. Of these properties, 10,850 had been leased, 591 were listed and ready for rent, 340 were in unit turn status and 194 were in varying stages of renovation. With respect to the remaining 266 REO properties, we were in the process of determining whether these properties would meet our rental profile. During the three months ended March 31, 2018 , we recognized no impairment on real estate held for use. During the three months ended March 31, 2017 , we recognized $2.3 million of impairment on real estate held for use, all of which related to our properties under evaluation for rental strategy. Real estate held for sale As of March 31, 2018 and December 31, 2017 , our real estate held for sale included 203 and 333 REO properties, respectively, with an aggregate carrying value of $45.3 million and $75.7 million , respectively. Management determined to divest these properties because they do not meet our residential rental property investment criteria. During the three months ended March 31, 2018 and 2017 , we recognized $5.9 million and $2.1 million , respectively, of net impairment on our real estate held for sale. |
Mortgage Loans
Mortgage Loans | 3 Months Ended |
Mar. 31, 2018 | |
Mortgage Loans on Real Estate [Abstract] | |
Mortgage Loans | Mortgage Loans The following table sets forth information related to our mortgage loans at fair value, the related unpaid principal balance and market value of underlying properties by delinquency status as of March 31, 2018 and December 31, 2017 ($ in thousands): Number of Loans Fair Value and Carrying Value Unpaid Principal Balance Market Value of Underlying Properties March 31, 2018 Current 16 $ 1,437 $ 2,139 $ 3,102 30 days past due 2 307 400 575 60 days past due 1 51 138 79 90 days past due 18 265 5,793 4,790 Foreclosure 62 8,214 17,950 19,683 Mortgage loans at fair value 99 $ 10,274 $ 26,420 $ 28,229 December 31, 2017 Current 17 $ 1,528 $ 2,380 $ 3,156 30 days past due 1 51 139 70 60 days past due 3 304 344 630 90 days past due 23 720 7,674 6,498 Foreclosure 67 8,874 18,813 20,820 Mortgage loans at fair value 111 $ 11,477 $ 29,350 $ 31,174 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following table sets forth the carrying value and fair value of our financial assets and liabilities by level within the fair value hierarchy as of March 31, 2018 and December 31, 2017 ($ in thousands): Level 1 Level 2 Level 3 Carrying Value Quoted Prices in Active Markets Observable Inputs Other Than Level 1 Prices Unobservable Inputs March 31, 2018 Recurring basis (assets) Mortgage loans at fair value $ 10,274 $ — $ — $ 10,274 Interest rate cap derivative (1) 768 — 768 — Not recognized on condensed consolidated balance sheets at fair value (liabilities) Repurchase and loan agreements 1,253,720 — 1,259,010 — December 31, 2017 Recurring basis (assets) Mortgage loans at fair value $ 11,477 $ — $ — $ 11,477 Not recognized on consolidated balance sheets at fair value (liabilities) Repurchase and loan agreements 1,270,157 — 1,276,315 — _____________ (1) Included within prepaid expenses and other assets in the condensed consolidated balance sheets. We have not transferred any assets from one level to another level during the three months ended March 31, 2018 or during the year ended December 31, 2017 . The fair values of our mortgage loans are estimated based on (i) market information, to the extent available and as adjusted for factors specific to individual mortgage loans, or (ii) as determined by AAMC's proprietary discounted cash flow model. The fair value of our interest rate cap derivative is estimated using a discounted cash flow analysis based on the contractual terms of the derivative. The following table sets forth the changes in our mortgage loans as of three months ended March 31, 2018 and 2017 ($ in thousands): Three months ended March 31, 2018 2017 Mortgage loans at fair value, beginning balance $ 11,477 $ 460,444 Net (loss) gain on mortgage loans (115 ) 14,035 Transfers of mortgage loans at fair value to mortgage loans held for sale, net — (352,677 ) Mortgage loan dispositions, resolutions and payments (1,223 ) (22,866 ) Real estate tax advances to borrowers 81 2,327 Selling costs on loans held for sale (83 ) — Transfer of mortgage loans at fair value to real estate owned, net 137 (30,469 ) Mortgage loans, ending balance $ 10,274 $ 70,794 Change in unrealized gain on mortgage loans held at the end of the period $ (137 ) $ 1,025 The significant unobservable inputs used in the fair value measurement of certain of our mortgage loans are discount rates, forecasts of future home prices, alternate loan resolution probabilities, resolution timelines and the value of underlying properties. Significant changes in any of these inputs in isolation could result in a significant change to the fair value measurement. A decline in the discount rate in isolation would increase the fair value. A decrease in the housing pricing index in isolation would decrease the fair value. Individual loan characteristics such as location and value of underlying collateral affect the loan resolution probabilities and timelines. An increase in the loan resolution timeline in isolation would decrease the fair value. A decrease in the value of underlying properties in isolation would decrease the fair value. The following table sets forth quantitative information about the significant unobservable inputs used to measure the fair value of certain of our mortgage loans: Input March 31, 2018 December 31, 2017 Equity discount rate 17.0% 17.0% Debt to asset ratio 65.0% 65.0% Cost of funds 3.5% over 1 month LIBOR 3.5% over 1 month LIBOR Annual change in home pricing index -1.76% to 7.61% -1.71% to 9.07% Loan resolution probabilities — modification 0% to 5.9% 0% to 5.9% Loan resolution probabilities — liquidation 49.5% to 100% 49.5% to 100% Loan resolution probabilities — paid in full 0% to 47.4% 0% to 47.4% Loan resolution timelines (in years) 0.1 to 5.3 0.1 to 5.3 Value of underlying properties $45,000 to $2,200,000 $45,000 to $2,250,000 |
Borrowings
Borrowings | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Repurchase and loan agreements Our operating partnership and certain of its Delaware statutory trust and/or limited liability company subsidiaries, as applicable, have entered into master repurchase agreements and loan agreements to finance the acquisition and ownership of the SFR properties, other REO properties and the remaining mortgage loans in our portfolio. We have effective control of the assets associated with these agreements and therefore have concluded these are financing arrangements. As of March 31, 2018 , the average annualized interest rate on borrowings under our repurchase and loan agreements was 4.72% , excluding amortization of deferred debt issuance costs and loan discounts. At March 31, 2018 , we were party to one repurchase agreement and seven loan agreements. Below is a description of each agreement outstanding during the three months ended March 31, 2018 : Repurchase Agreement • Credit Suisse (“CS”) is the lender on the repurchase agreement entered into on March 22, 2013, (the “CS Repurchase Agreement”) with an initial aggregate maximum borrowing capacity of $100.0 million . The CS Repurchase Agreement has been amended on several occasions, ultimately increasing the maximum borrowing capacity to $350.0 million as of March 31, 2018 . We pay interest on the outstanding principal balance monthly based on CS's cost of funds plus a fixed component spread of 2.75% . The maturity date of the CS Repurchase Agreement is November 16, 2018. At March 31, 2018 , an aggregate of $172.7 million was outstanding under the CS Repurchase Agreement. Loan Agreements • Nomura Corporate Funding Americas, LLC (“Nomura”) is the lender under a loan agreement dated April 10, 2015 (the “Nomura Loan Agreement”) with an initial aggregate maximum funding capacity of $100.0 million . The Nomura Loan Agreement has been amended on several occasions, ultimately increasing the maximum funding capacity to $250.0 million ( $100.0 million of which was uncommitted but available to us subject to our meeting certain eligibility requirements) as of March 31, 2018 . We pay interest on the outstanding principal balance monthly based on one-month LIBOR plus a fixed component spread of 3.25% . The maturity date of the Nomura Loan Agreement was April 5, 2018. As of March 31, 2018 , we had an aggregate of $101.7 million outstanding under the Nomura Loan Agreement. On April 5, 2018, we amended the Nomura Loan Agreement and extended the termination date by two years to April 5, 2020, with a potential additional one -year extension to April 5, 2021. In addition, the uncommitted borrowing amount was increased to $150.0 million (which is available to us subject to our meeting certain eligibility requirements), the interest rate spread over one-month LIBOR has been reduced to 3.00% , the advance funding rates for both non-stabilized properties and stabilized rental properties were increased and the facility fee payable by us was reduced. • In connection with the seller financing related to our acquisition of 4,262 properties on September 30, 2016 (the “HOME SFR Transaction”), we entered into a loan agreement (the “MSR Loan Agreement”) between HOME Borrower, the sellers and MSR Lender, LLC (“MSR Lender”), as agent. Pursuant to the MSR Loan Agreement, HOME Borrower borrowed approximately $489.3 million from the Lenders (the “MSR Loan”). Effective October 14, 2016, the MSR Loan Agreement was assigned to MSR Lender and, in connection with MSR Lender’s securitization of the MSR Loan, we and MSR Lender amended and restated the MSR Loan Agreement to match the terms of the bonds in MSR Lender's securitization of the MSR Loan. The aggregate amount and the aggregate interest rate of the MSR Loan remained unchanged from the original loan agreement. The MSR Loan is a floating rate loan with eight floating rate components. Interest is computed and settled monthly based on one-month LIBOR plus a weighted average fixed spread of 3.285% . The initial maturity date of the MSR Loan is November 9, 2018. HOME Borrower has the option to extend the MSR Loan beyond the initial maturity date for three successive one -year terms to an ultimate maturity date of November 9, 2021, provided, among other things, that there is no event of default under the MSR Loan Agreement on each maturity date. The MSR Loan is secured by the membership interests of HOME Borrower and the properties and other assets of HOME Borrower. • In connection with the seller financing related to the first closing under the HOME Flow Transaction on March 30, 2017, HOME Borrower II entered into the HOME II Loan Agreement with entities sponsored by Amherst, pursuant to which we initially borrowed approximately $79.9 million . On November 13, 2017, HOME Borrower II entered into an amended and restated loan agreement. Pursuant to the amended and restated HOME II Loan Agreement, our borrowings thereunder have increased to $83.3 million , the weighted average fixed-rate spread over one-month LIBOR decreased from 2.75% to 2.10% and the initial maturity date was changed from October 9, 2019 to November 9, 2019. HOME Borrower II pays interest on the outstanding principal balance monthly. HOME Borrower II has the option to extend the HOME II Loan Agreement beyond the initial maturity date for three successive one -year extensions, provided, among other things, that there is no event of default under the HOME II Loan Agreement on each maturity date. The HOME II Loan Agreement is secured by the membership interests of HOME Borrower II and the properties and other assets of HOME Borrower II. The HOME II Loan Agreement is also cross-defaulted and cross-collateralized with the HOME III Loan Agreement. • In connection with the seller financing related to the second closing under the HOME Flow Transaction on June 29, 2017, HOME Borrower III entered into the HOME III Loan Agreement with entities sponsored by Amherst, pursuant to which we initially borrowed approximately $87.8 million . On November 13, 2017, HOME Borrower III entered into an amended and restated loan agreement. Pursuant to the amended and restated HOME III Loan Agreement, our borrowings thereunder have increased to $89.1 million , the weighted average fixed-rate spread over one-month LIBOR decreased from 2.30% to 2.10% and the initial maturity date was changed from October 9, 2019 to November 9, 2019. HOME Borrower III pays interest on the outstanding principal balance monthly. HOME Borrower III has the option to extend the HOME III Loan Agreement beyond the initial maturity date for three successive one -year extensions, provided, among other things, that there is no event of default under the HOME III Loan Agreement on each maturity date. The HOME III Loan Agreement is secured by the membership interests of HOME Borrower III and the properties and other assets of HOME Borrower III. The HOME III Loan Agreement is also cross-defaulted and cross-collateralized with the HOME II Loan Agreement. • In connection with the seller financing related to the third and final closing under the HOME Flow Transaction on November 29, 2017, HOME Borrower IV entered into two separate loan agreements with entities sponsored by Amherst, pursuant to which we borrowed $114.2 million pursuant to the first loan agreement and $114.6 million pursuant to the second loan agreement. The HOME IV Loan Agreements have a fixed interest rate of 4.00% and a maturity date of December 9, 2022. HOME Borrower IV pays interest on the outstanding principal balance monthly. The HOME IV Loan Agreements are secured by first priority mortgages on a portion of the properties acquired in the third and final closing under the HOME Flow Transaction. • On April 6, 2017, RESI TL1 Borrower, LLC (“TL1 Borrower”), our indirect wholly owned subsidiary, entered into a credit and security agreement (the “Term Loan Agreement”) with American Money Management Corporation, as agent, on behalf of Great American Life Insurance Company and Great American Insurance Company as initial lenders, with the potential to add other lenders from time to time as a party to the Term Loan Agreement. Pursuant to the Term Loan Agreement, TL1 Borrower borrowed $100.0 million to finance the ownership and operation of SFR properties. The Term Loan Agreement has a maturity date of April 6, 2022 and a fixed interest rate of 5.00% . TL1 Borrower pays interest on the outstanding principal balance monthly. As of March 31, 2018 , the maximum aggregate funding available to us under the repurchase and loan agreements described above was $1.6 billion , subject to certain sublimits, eligibility requirements and conditions precedent to each funding. As of March 31, 2018 , an aggregate of $1.3 billion was outstanding under these repurchase and loan agreements. The following table sets forth data with respect to our repurchase and loan agreements as of March 31, 2018 and December 31, 2017 ($ in thousands): Maximum Borrowing Capacity Book Value of Collateral Amount Outstanding Amount of Available Funding March 31, 2018 CS Repurchase Agreement due November 16, 2018 $ 350,000 $ 258,495 $ 172,727 $ 177,273 Nomura Loan Agreement due April 5, 2018 (1) 250,000 167,291 101,656 148,344 MSR Loan Agreement due November 9, 2018 (2) 489,259 619,061 489,259 — HOME II Loan Agreement due November 9, 2019 (2) 83,270 102,614 83,270 — HOME III Loan Agreement due November 9, 2019 (2) 89,150 113,887 89,150 — HOME IV Loan Agreement (A) due December 9, 2022 114,201 148,626 114,201 — HOME IV Loan Agreement (B) due December 9, 2022 114,590 149,648 114,590 — Term Loan Agreement due April 6, 2022 100,000 115,966 100,000 — Less: unamortized loan discount — — (5,843 ) — Less: deferred debt issuance costs — — (5,290 ) — $ 1,590,470 $ 1,675,588 $ 1,253,720 $ 325,617 December 31, 2017 CS Repurchase Agreement due November 16, 2018 $ 350,000 $ 281,722 $ 189,173 $ 160,827 Nomura Loan Agreement due April 5, 2018 (1) 250,000 169,521 102,785 147,215 MSR Loan Agreement due November 9, 2018 (2) 489,259 622,065 489,259 — HOME II Loan Agreement due November 9, 2019 (2) 83,270 103,324 83,270 — HOME III Loan Agreement due November 9, 2019 (2) 89,150 114,698 89,150 — HOME IV Loan Agreement (A) due December 9, 2022 114,201 149,698 114,201 — HOME IV Loan Agreement (B) due December 9, 2022 114,590 150,718 114,590 — Term Loan Agreement due April 6, 2022 100,000 116,250 100,000 — Less: unamortized loan discount — — (6,158 ) — Less: deferred debt issuance costs — — (6,113 ) — $ 1,590,470 $ 1,707,996 $ 1,270,157 $ 308,042 _____________ (1) On April 5, 2018, we extended the maturity date to April 5, 2020, with a potential additional one -year extension to April 5, 2021. (2) Represents initial maturity date. We have the option to extend the maturity date for up to three successive one -year extensions. Our business model relies to a significant degree on both short-term financing and longer duration asset-backed financing arrangements, and we generally do not carry sufficient liquid funds to retire any of our short-term obligations upon their maturity. Prior to or upon such short-term maturities, management generally expects to (1) refinance the remaining outstanding short-term facilities, obtain additional financing or replace the short-term facilities with longer-term facilities and (2) continue to liquidate non-rental REO properties and certain mortgage loans, which will generate cash to reduce the related financing. We are in continuous dialogue with our lenders, and we are currently not aware of any circumstances that would adversely affect our ability to complete such refinancings. We believe we will be successful in our efforts to refinance or obtain additional financing based on our recent success in renewing our outstanding facilities and obtaining additional financing with new counterparties and our ongoing relationships with lenders. Terms and covenants related to the CS Repurchase Agreement Under the terms of the CS Repurchase Agreement, as collateral for the funds drawn thereunder, subject to certain conditions, our operating partnership and/or one or more of our limited liability company subsidiaries will sell to the lender equity interests in the Delaware statutory trust subsidiary that owns the applicable underlying mortgage or REO assets on our behalf, or the trust will directly sell such underlying mortgage assets. In the event the lender determines the value of the collateral has decreased, the lender has the right to initiate a margin call and require us, or the applicable trust subsidiary, to post additional collateral or to repay a portion of the outstanding borrowings. The price paid by the lender for each mortgage or REO asset we finance under the CS Repurchase Agreement is based on a percentage of the market value of the mortgage or REO asset and, in the case of mortgage assets, may depend on its delinquency status. With respect to funds drawn under the CS Repurchase Agreement, our applicable subsidiary is required to pay the lender interest based on the lender’s cost of funds plus a spread calculated based on the type of applicable assets collateralizing the funding, as well as certain other customary fees, administrative costs and expenses to maintain and administer the CS Repurchase Agreement. We do not collateralize any of our repurchase facilities with cash. The CS Repurchase Agreement is fully guaranteed by us. The CS Repurchase Agreement requires us to maintain various financial and other covenants, including maintaining a minimum adjusted tangible net worth, a maximum ratio of indebtedness to adjusted tangible net worth and a minimum fixed charge coverage ratio. In addition, the CS Repurchase Agreement contains customary events of default. Terms and covenants related to the Nomura Loan Agreement Under the terms of the Nomura Loan Agreement, subject to certain conditions, Nomura may advance funds to us from time to time, with such advances collateralized by SFR properties and other REO properties. The advances paid under the Nomura Loan Agreement with respect to the applicable properties from time to time will be based on a percentage of the market value of the properties. We may be required to repay a portion of the amounts outstanding under the Nomura Loan Agreement should the loan-to-value ratio of the funded collateral decline. Under the terms of the Nomura Loan Agreement, we are required to pay interest based on the one-month LIBOR plus a spread and certain other customary fees, administrative costs and expenses in connection with Nomura's structuring, management and ongoing administration of the facility. The Nomura Loan Agreement is fully guaranteed by us. The Nomura Loan Agreement requires us to maintain various financial and other covenants, including a minimum adjusted tangible net worth, a maximum ratio of indebtedness to adjusted tangible net worth and specified levels of unrestricted cash. In addition, the Nomura Loan Agreement contains events of default (subject to certain materiality thresholds and grace periods), including payment defaults, breaches of covenants and/or certain representations and warranties, cross-defaults, certain material adverse changes, bankruptcy or insolvency proceedings and other events of default customary for this type of transaction. The remedies for such events of default are also customary for this type of transaction and include the acceleration of the principal amount outstanding under the Nomura Loan Agreement and the liquidation by Nomura of the SFR and REO properties then subject thereto. Terms and covenants related to the MSR Loan Agreement, the HOME II Loan Agreement, the HOME III Loan Agreement and the HOME IV Loan Agreements Under the terms of the MSR Loan Agreement, the HOME II Loan Agreement, the HOME III Loan Agreement and the HOME IV Loan Agreements, each of the facilities are non-recourse to us and are secured by a lien on the membership interests of HOME Borrower, HOME Borrower II, HOME Borrower III, HOME Borrower IV and the acquired properties and other assets of each entity, respectively. The assets of each entity are the primary source of repayment and interest on their respective loan agreements, thereby making the cash proceeds of rent payments and any sales of the acquired properties the primary sources of the payment of interest and principal by each entity to the respective lenders. Each of the loan agreements require that the applicable borrower comply with various affirmative and negative covenants that are customary for loans of this type, including limitations on the indebtedness each entity can incur, limitations on sales and dispositions of the properties collateralizing the respective loan agreements, minimum net asset requirements and various restrictions on the use of cash generated by the operations of such properties while the respective loan agreements are outstanding. Each loan agreement also includes customary events of default, the occurrence of which would allow the respective lenders to accelerate payment of all amounts outstanding thereunder. We have limited indemnification obligations for wrongful acts taken by HOME Borrower, HOME Borrower II, HOME Borrower III or HOME Borrower IV under their respective loan agreements in connection with the secured collateral. Even though the MSR Loan Agreement, the HOME II Loan Agreement, the HOME III Loan Agreement and the HOME IV Loan Agreements are non-recourse to us and all of our subsidiaries other than the entities party to the respective loan agreements, we have agreed to limited bad act indemnification obligations to the respective lenders for the payment of (i) certain losses arising out of certain bad or wrongful acts of our subsidiaries that are party to the respective loan agreements and (ii) the principal amount of each of the facilities and all other obligations thereunder in the event we cause certain voluntary bankruptcy events of the respective subsidiaries party to the loan agreements. Any of such liabilities could have a material adverse effect on our results of operations and/or our financial condition. Terms and covenants related to the Term Loan Agreement The Term Loan Agreement requires that the TL1 Borrower comply with various affirmative and negative covenants that are customary for loans of this type, including, without limitation, reporting requirements to the agent; maintenance of minimum levels of liquidity, indebtedness and tangible net worth; limitations on sales and dispositions of the properties collateralizing the Term Loan Agreement and various restrictions on the use of cash generated by the operations of the properties while the Term Loan Agreement is outstanding. We may be required to make prepayments of a portion of the amounts outstanding under the Term Loan Agreement under certain circumstances, including certain levels of declines in collateral value. The Term Loan Agreement also includes customary events of default, the occurrence of which would allow the lenders to accelerate payment of all amounts outstanding thereunder. The Term Loan Agreement is non-recourse to us and is secured by a lien on the membership interests of TL1 Borrower and the properties and other assets of TL1 Borrower. The assets of TL1 Borrower are the primary source of repayment and interest on the Term Loan Agreement, thereby making the cash proceeds received by TL1 Borrower from rent payments and any sales of the underlying properties the primary sources of the payment of interest and principal by TL1 Borrower to the lenders. We have limited indemnification obligations for wrongful acts taken by TL1 Borrower and RESI TL1 Pledgor, LLC, the sole member of TL1 Borrower, in connection with the secured collateral for the Term Loan Agreement. We are currently in compliance with the covenants and other requirements with respect to the repurchase and loan agreements. We monitor our lending partners’ ability to perform under the repurchase and loan agreements and have concluded there is currently no reason to doubt that they will continue to perform under the repurchase and loan agreements as contractually obligated. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation, claims and assessments From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. Set forth below is a summary of legal proceedings to which we are a party during 2018 : Martin v. Altisource Residential Corporation et al. On March 27, 2015, a putative shareholder class action complaint was filed in the United States District Court of the Virgin Islands by a purported shareholder of the Company under the caption Martin v. Altisource Residential Corporation, et al. , 15-cv-00024. The action names as defendants the Company, our former Chairman, William C. Erbey, and certain officers and a former officer of the Company and alleges that the defendants violated federal securities laws by, among other things, making materially false statements and/or failing to disclose material information to the Company's shareholders regarding the Company's relationship and transactions with AAMC, Ocwen Financial Corporation (“Ocwen”) and Home Loan Servicing Solutions, Ltd. These alleged misstatements and omissions include allegations that the defendants failed to adequately disclose the Company's reliance on Ocwen and the risks relating to its relationship with Ocwen, including that Ocwen was not properly servicing and selling loans, that Ocwen was under investigation by regulators for violating state and federal laws regarding servicing of loans and Ocwen’s lack of proper internal controls. The complaint also contains allegations that certain of the Company's disclosure documents were false and misleading because they failed to disclose fully the entire details of a certain asset management agreement between the Company and AAMC that allegedly benefited AAMC to the detriment of the Company's shareholders. The action seeks, among other things, an award of monetary damages to the putative class in an unspecified amount and an award of attorney’s and other fees and expenses. In May 2015, two of our purported shareholders filed competing motions with the court to be appointed lead plaintiff and for selection of lead counsel in the action. Subsequently, opposition and reply briefs were filed by the purported shareholders with respect to these motions. On October 7, 2015, the court entered an order granting the motion of Lei Shi to be lead plaintiff and denying the other motion to be lead plaintiff. On January 23, 2016, the lead plaintiff filed an amended complaint. On March 22, 2016, defendants filed a motion to dismiss all claims in the action. The plaintiffs filed opposition papers on May 20, 2016, and the defendants filed a reply brief in support of the motion to dismiss the amended complaint on July 11, 2016. On November 14, 2016, the Martin case was reassigned to Judge Anne E. Thompson of the United States District Court of New Jersey. In a hearing on December 19, 2016, the parties made oral arguments on the motion to dismiss, and on March 16, 2017 the Court issued an order that the motion to dismiss had been denied. On April 17, 2017, the defendants filed a motion for reconsideration of the Court’s decision to deny the motion to dismiss. On April 21, 2017, the defendants filed their answer and affirmative defenses. Plaintiff filed an opposition to defendants’ motion for reconsideration on May 8, 2017. On May 30, 2017, the Court issued an order that the motion for reconsideration had been denied. Discovery has commenced and is ongoing. We believe this complaint is without merit. At this time, we are not able to predict the ultimate outcome of this matter, nor can we estimate the range of possible loss, if any. Amendment and Waiver Agreement with Altisource Solutions In connection with the HOME SFR Transaction and to enable Main Street Renewal, LLC (“MSR”) to be property manager for the acquired properties, we and Altisource Solutions S.à r.l. (“Altisource Solutions”), a wholly owned subsidiary of Altisource Portfolio Solutions S.A. (“ASPS”), entered into an Amendment and Waiver Agreement (the “Amendment and Waiver Agreement”) to amend the Master Services Agreement (the “MSA”) between Altisource Solutions and us, dated December 21, 2012, under which Altisource Solutions was the exclusive provider of leasing and property management services to us. Pursuant to the Amendment and Waiver Agreement, we obtained a waiver of the exclusivity requirements under the MSA for the acquired properties. Additionally, the Amendment and Waiver Agreement permitted us to utilize the property management services of MSR in connection with the additional properties we acquired as part of the HOME Flow Transaction. The Amendment and Waiver Agreement also amended the MSA to require us or any surviving entity to pay a $60 million liquidation fee to Altisource Solutions if (i) we sell, liquidate or dispose of 50% or more of our SFR portfolio managed by Altisource Solutions over a rolling eighteen ( 18 ) month period without using the proceeds of such sales, liquidations or disposals to purchase additional SFR assets or if (ii) the surviving entity in a change of control does not assume the MSA with Altisource Solutions as property manager. The liquidation fee will not be required to be paid if we or any surviving entity terminate the MSA as a result of a material breach of the MSA by Altisource Solutions, for Altisource Solutions’ failure to meet certain specified performance standards or for certain other customary reasons. Potential purchase price adjustments under the HOME Flow Transaction Certain of the properties acquired on November 29, 2017 in the third and final closing under the HOME Flow Transaction are subject to potential purchase price adjustments in accordance with the related purchase and sale agreement, which may result in an upward or downward adjustment of up to 10% of the purchase price, or an aggregate of up to $18.3 million , related to the affected properties. The purchase price adjustment will be determined based on the rental rates achieved for the properties within 24 months after the closing date. Because such future rental rates of the properties are unknown, we are unable to predict the ultimate adjustments, if any, that will be made to the initial purchase price related to such properties at this time. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Asset management agreement with AAMC On March 31, 2015, we entered into our current asset management agreement (the “AMA”) with AAMC. The AMA, which became effective on April 1, 2015, provides for a management fee structure as follows: • Base Management Fee . AAMC is entitled to a quarterly base management fee equal to 1.5% of the product of (i) our average invested capital (as defined in the AMA) for the quarter multiplied by (ii) 0.25 , while we have fewer than 2,500 SFR properties actually rented (“Rental Properties”). The base management fee percentage increases to 1.75% of invested capital while we have between 2,500 and 4,499 Rental Properties and increases to 2.0% of invested capital while we have 4,500 or more Rental Properties; • Incentive Management Fee . AAMC is entitled to a quarterly incentive management fee equal to 20% of the amount by which our return on invested capital (based on AFFO defined as our net income attributable to holders of common stock calculated in accordance with GAAP plus real estate depreciation expense minus recurring capital expenditures on all of our real estate assets owned) exceeds an annual hurdle return rate of between 7.0% and 8.25% (or 1.75% and 2.06% per quarter), depending on the 10 -year treasury rate. To the extent that we have an aggregate shortfall in its return rate over the previous seven quarters, that aggregate return rate shortfall gets added to the normal quarterly return hurdle for the next quarter before AAMC is entitled to an incentive management fee. The incentive management fee increases to 22.5% while we have between 2,500 and 4,499 Rental Properties and increases to 25% while we have 4,500 or more Rental Properties; and • Conversion Fee . AAMC is entitled to a quarterly conversion fee equal to 1.5% of the market value of the SFR homes leased by us for the first time during the applicable quarter. Because we have more than 4,500 Rental Properties, AAMC is entitled to receive a base management fee of 2.0% of our invested capital and a potential incentive management fee percentage of 25% of the amount by which we exceed our then-required return on invested capital threshold. We have the flexibility to pay up to 25% of the incentive management fee to AAMC in shares of our common stock. Under the AMA, we reimburse AAMC for the compensation and benefits of the General Counsel dedicated to us and certain other out-of-pocket expenses incurred by AAMC on our behalf. The AMA requires that AAMC continue to serve as our exclusive asset manager for an initial term of 15 years from April 1, 2015, with two potential five -year extensions, subject to our achieving an average annual return on invested capital of at least 7.0% . Neither party is entitled to terminate the AMA prior to the end of the initial term, or each renewal term, other than termination by (a) us and/or AAMC “for cause” for certain events such as a material breach of the AMA and failure to cure such breach, (b) us for certain other reasons such as our failure to achieve a return on invested capital of at least 7.0% for two consecutive fiscal years after the third anniversary of the AMA and (c) us in connection with certain change of control events. If the AMA were terminated by AAMC, our financial position and future prospects for revenues and growth could be materially adversely affected. Summary of related-party transactions The following table presents our significant transactions with AAMC, which is a related party, for the periods indicated ($ in thousands): Three months ended March 31, 2018 2017 Base management fees (1) $ 3,727 $ 4,211 Conversion fees (1) 63 604 Expense reimbursements (2) 262 196 ______________ (1) Included in management fees in the condensed consolidated statements of operations. (2) Included in general and administrative expenses in the condensed consolidated statements of operations. No incentive management fee under the AMA has been payable to AAMC to date because our return on invested capital (as defined in the AMA) was below the cumulative required hurdle rate. Under the AMA, to the extent we have an aggregate shortfall in our return rate over the previous seven quarters, that aggregate return rate shortfall gets added to the normal quarterly 1.75% return hurdle for the next quarter before AAMC is entitled to an incentive management fee. As of March 31, 2018 , the aggregate return shortfall from the prior seven quarters under the AMA was approximately 50.01% of invested capital. In future quarters, return on invested capital must exceed the required hurdle for the current quarter plus any carried-forward cumulative additional hurdle shortfall from the prior seven quarters before any incentive management fee will be payable to AAMC. |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Payments | Share-Based Payments 2016 Equity Incentive Plan Our non-management directors each received annual grants of restricted stock units issued under the Company's 2016 Equity Incentive Plan (the “2016 Equity Incentive Plan”). These restricted stock units are eligible for settlement in the number of shares of our common stock having a fair market value of $60 thousand on the date of grant. Subject to accelerated vesting in limited circumstances, the restricted stock units vest on the earlier of the first anniversary of the date of grant or the next annual meeting of stockholders, with distribution mandatorily deferred for an additional two years thereafter until the third anniversary of grant (subject to earlier distribution or forfeiture upon the respective director’s separation from the Board of Directors). The awards were issued together with dividend equivalent rights. In respect of dividends paid to our stockholders prior to the vesting date, dividend equivalent rights accumulate and are expected to be paid in a lump sum in cash following the vesting date, contingent on the vesting of the underlying award. During any period thereafter when the award is vested but remains subject to settlement, dividend equivalent rights are expected to be paid in cash on the same timeline as underlying dividends are paid to our stockholders. Upon the departure of one of the members of our Board of Directors on March 26, 2018, 3,495 of his previously issued restricted stock units vested and 701 restricted stock units were forfeited, in each case with a grant date fair value of $14.30 . We have also made grants of restricted stock units and stock options to certain employees of AAMC. The restricted stock units granted to AAMC employees will vest in equal annual installments on each of the first three anniversaries of the grant date, subject to acceleration or forfeiture. The stock options granted to AAMC employees will vest in three equal annual installments on the first, second and third anniversary of the later of (i) the date of the option award and (ii) the date of the satisfaction of certain performance criteria, subject to acceleration or forfeiture. The performance criteria is satisfied on the date on which the sum of (a) the average price per share for the consecutive 20 -trading-day period ending on such date plus (b) the amount of all reinvested dividends, calculated on a per-share basis from the date of grant through such date, shall equal or exceed 125% of the price per share on the date of grant (the “Performance Goal”); provided however that the Performance Goal must be attained no later than the fourth anniversary of the grant date. In the event that the Performance Goal is not attained prior to the fourth anniversary of the grant date, the stock options shall expire. We recorded $(0.4) million and $1.9 million of share-based compensation expense for the three months ended March 31, 2018 and 2017 , respectively. As of March 31, 2018 and 2017 , we had $2.1 million and $4.6 million , respectively, of unrecognized share-based compensation cost remaining with respect to awards granted under the 2016 Equity Incentive Plan to be recognized over a weighted average remaining estimated term of 1.0 year and 1.3 years , respectively. 2012 Conversion Option Plan and 2012 Special Conversion Option Plan On December 21, 2012, as part of our separation transaction from ASPS, we issued stock options under the 2012 Conversion Option Plan and 2012 Special Conversion Option Plan to holders of ASPS stock options to purchase shares of our common stock in a ratio of one share of our common stock to every three shares of ASPS common stock. The options were granted as part of our separation to employees of ASPS and/or Ocwen solely to give effect to the exchange ratio in the separation, and we do not include share-based compensation expense related to these options in our consolidated statements of operations because they are not related to our incentive compensation. As of March 31, 2018 , options to purchase an aggregate of 77,942 shares of our common stock were remaining under the Conversion Option Plan and Special Conversion Option Plan. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives We may enter into derivative contracts from time to time in order to mitigate the risk associated with our variable rate debt. We do not enter into derivatives for investment purposes. Derivatives are carried at fair value within prepaid expenses and other assets in our condensed consolidated balance sheet. Upon execution, we may or may not designate such derivatives as accounting hedges. On September 29, 2016, we entered into an interest rate cap to manage the economic risk of increases in the floating rate portion of the MSR Loan Agreement. The interest rate cap has a strike rate on the one-month LIBOR of 2.938% , a notional amount of $489.3 million and a termination date of November 15, 2018. On March 16, 2018, we paid a premium of $0.9 million to amend the strike rate to 1.80% . At March 31, 2018 , the interest rate cap had a fair value of $0.8 million . At December 31, 2017, the interest rate cap had a nominal fair value. We did not designate the interest rate cap as an accounting hedge; therefore, changes in the fair value of the interest rate cap are recorded as a component of interest expense in our condensed consolidated statements of operations. For the three months ended March 31, 2018 and 2017 , we recognized $0.2 million and a nominal amount, respectively, related to changes in the fair value of the interest rate cap. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes As a REIT, we must meet certain organizational and operational requirements, including the requirement to distribute at least 90% of our annual REIT taxable income (excluding capital gains) to our stockholders. As a REIT, we generally will not be subject to federal income tax to the extent we distribute our REIT taxable income to our stockholders and provided we satisfy the REIT requirements, including certain asset, income, distribution and stock ownership tests. If we fail to qualify as a REIT, and do not qualify for certain statutory relief provisions, we will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which our REIT qualification was lost. As a REIT, we may also be subject to federal taxes if we engage in certain types of transactions. Our condensed consolidated financial statements include the operations of our taxable REIT subsidiary (“TRS”), which is subject to federal, state and local income taxes on its taxable income. From inception through March 31, 2018 , the TRS operated at a cumulative taxable loss, which resulted in our recording a deferred tax asset with a corresponding valuation allowance. As of March 31, 2018 and 2017 , we did not accrue interest or penalties associated with any unrecognized tax benefits. We recorded nominal state and local tax expense along with nominal penalties and interest on income and property for each of the three months ended March 31, 2018 and 2017 . On February 16, 2017, the IRS opened an examination of the 2014 tax year of the TRS. On May 30, 2017, we received confirmation from the IRS that the examination of the TRS’s 2014 tax year was closed without any changes. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the components of diluted loss per share (in thousands, except share and per share amounts): Three months ended March 31, 2018 2017 Numerator Net loss $ (27,350 ) $ (49,357 ) Denominator Weighted average common stock outstanding – basic 53,454,063 53,646,291 Weighted average common stock outstanding – diluted 53,454,063 53,646,291 Loss per basic common share $ (0.51 ) $ (0.92 ) Loss per diluted common share $ (0.51 ) $ (0.92 ) We excluded the items presented below from the calculation of diluted earnings per share as they were antidilutive for the periods indicated: Three months ended March 31, 2018 2017 Denominator (in weighted-average shares) Stock options 99,974 160,478 Restricted stock 208,754 95,511 Pursuant to the AMA, we have the flexibility to pay up to 25% of the incentive management fee to AAMC in shares of our common stock. Should we choose to do so, our earnings available to common stockholders would be diluted to the extent of such issuance. Because AAMC did not earn any incentive management fees, no dilutive effect occurred during the three months ended March 31, 2018 or 2017 . |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our primary business is the acquisition and ownership of SFR assets. Our primary sourcing strategy is to acquire these assets by purchasing SFR properties, either on an individual basis or in pools. As a result, we operate in a single segment focused on the acquisition and ownership of rental residential properties. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Management has evaluated the impact of all events subsequent to March 31, 2018 and through the issuance of these interim condensed consolidated financial statements. We have determined that there were no subsequent events other than those already disclosed that require adjustment or disclosure in the financial statements. |
Organization and Basis of Pre22
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). All wholly owned subsidiaries are included, and all intercompany accounts and transactions have been eliminated. |
Consolidation policy | The unaudited interim condensed consolidated financial statements and accompanying unaudited condensed consolidated financial information, in our opinion, contain all adjustments that are of a normal recurring nature and are necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. The interim results are not necessarily indicative of results for a full year. We have omitted certain notes and other information from the interim condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q as permitted by Securities and Exchange Commission (“SEC”) rules and regulations. These condensed consolidated financial statements should be read in conjunction with our annual consolidated financial statements included within our 2017 Annual Report on Form 10-K, which was filed with the SEC on March 1, 2018. |
Use of estimates | The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. |
Recently issued accounting standards | Adoption of recent accounting standards In May 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-09, Compensation - Stock Compensation (Topic 718). The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. Our adoption of this amendment on January 1, 2018 did not have a significant effect on our condensed consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). ASU 2017-05 clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset,” in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets. If substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets within the scope of Subtopic 610-20. This amendment also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent company may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. ASU 2017-05 is effective for periods beginning after December 15, 2017. Our adoption of this amendment on January 1, 2018 did not have a significant effect on our condensed consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The amendments in ASU 2016-16 eliminate the exception of recognizing, at the time of transfer, current and deferred income taxes for intra-entity asset transfers other than inventory. This ASU is effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those annual periods. Our adoption of this amendment on January 1, 2018 did not have a significant effect on our condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under Topic 230. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Our adoption of this amendment on January 1, 2018 did not have a significant effect on our condensed consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10). ASU 2016-01 requires all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments eliminate the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities and the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Our adoption of this amendment on January 1, 2018 did not have a significant effect on our condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In August 2015, FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which effectively delayed the adoption date of ASU 2014-09 by one year. In 2016 and 2017, the FASB issued accounting standards updates that amended several aspects of ASU 2014-09. ASU 2014-09, as amended, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Management performed an analysis of our gains and losses arising from real estate sales (the sole component of our revenue within the scope of ASU 2014-09). We determined that our policy for recognition of gains and losses on real estate sales prior to our adoption is consistent with the updated revenue recognition requirements of ASU 2014-09, as amended. Therefore, our adoption of ASU 2014-09 effective January 1, 2018 had no significant impact on our previous revenue recognition practices, and our application of the modified retrospective method of adoption resulted in no adjustments to comparative information or cumulative adjustments to any beginning balances in the current period. As our mortgage loan and related REO activities are no longer a core part of our operations, we determined to prospectively classify net gains and losses from sales of real estate and resolutions and dispositions of mortgage loans as a component of other income, outside of operating income or loss, which is consistent with the guidance of ASU 2014-09. Recently issued accounting standards not yet adopted In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The ASU expands the activities that qualify for hedge accounting and simplifies the rules for reporting hedging transactions. This ASU is effective for public business entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We expect to adopt this standard on January 1, 2019, and we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, which amends the guidance on measuring credit losses on financial assets held at amortized cost. The amendment is intended to address the issue that the previous “incurred loss” methodology was restrictive for an entity's ability to record credit losses based on not yet meeting the “probable” threshold. The new language will require these assets to be valued at amortized cost presented at the net amount expected to be collected with a valuation provision. This ASU is effective for fiscal years beginning after December 15, 2019. The amendments in ASU 2016-13 should be applied on a modified retrospective transition basis. We expect to adopt this standard on January 1, 2020. While we are still evaluating the overall impact of this ASU, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position and also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. Accounting by lessors is substantially unchanged from prior practice as lessors will continue to recognize lease revenue on a straight-line basis. In September 2017, FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), which provides additional implementation guidance on the previously issued ASU 2016-02. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2016-02 should be applied on a modified retrospective transition basis, and a number of practical expedients may apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. We expect to adopt this standard on January 1, 2019. While we are still evaluating the overall impact of this ASU, we do not expect the adoption of this standard to have a material impact on our consolidated financial statements. |
Asset Acquisitions and Dispos23
Asset Acquisitions and Dispositions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Real Estate And Mortgage Loans On Real Estate Acquisitions And Disposals [Abstract] | |
Schedule of Components of Change in Unrealized Gain on Mortgage Loans | The following table presents the components of net gain (loss) on real estate and mortgage loans during the three months ended March 31, 2018 and 2017 ($ in thousands): Three months ended March 31, 2018 2017 Change in unrealized gain on mortgage loans due to: Conversion of mortgage loans to REO, net $ 137 $ 9,486 Change in fair value, net 63 560 Reclassification to realized gain or loss (15,708 ) (61,911 ) Total change in unrealized gain on mortgage loans (15,508 ) (51,865 ) Net realized (loss) gain on mortgage loans (470 ) 35,550 Net realized gain on sales of real estate 14,344 19,956 Net (loss) gain on real estate and mortgage loans $ (1,634 ) $ 3,641 |
Mortgage Loans (Tables)
Mortgage Loans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Mortgage Loans on Real Estate [Abstract] | |
Schedule of mortgage loans | The following table sets forth information related to our mortgage loans at fair value, the related unpaid principal balance and market value of underlying properties by delinquency status as of March 31, 2018 and December 31, 2017 ($ in thousands): Number of Loans Fair Value and Carrying Value Unpaid Principal Balance Market Value of Underlying Properties March 31, 2018 Current 16 $ 1,437 $ 2,139 $ 3,102 30 days past due 2 307 400 575 60 days past due 1 51 138 79 90 days past due 18 265 5,793 4,790 Foreclosure 62 8,214 17,950 19,683 Mortgage loans at fair value 99 $ 10,274 $ 26,420 $ 28,229 December 31, 2017 Current 17 $ 1,528 $ 2,380 $ 3,156 30 days past due 1 51 139 70 60 days past due 3 304 344 630 90 days past due 23 720 7,674 6,498 Foreclosure 67 8,874 18,813 20,820 Mortgage loans at fair value 111 $ 11,477 $ 29,350 $ 31,174 |
Fair Value of Financial Instr25
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements, recurring assets and liabilities | The following table sets forth the carrying value and fair value of our financial assets and liabilities by level within the fair value hierarchy as of March 31, 2018 and December 31, 2017 ($ in thousands): Level 1 Level 2 Level 3 Carrying Value Quoted Prices in Active Markets Observable Inputs Other Than Level 1 Prices Unobservable Inputs March 31, 2018 Recurring basis (assets) Mortgage loans at fair value $ 10,274 $ — $ — $ 10,274 Interest rate cap derivative (1) 768 — 768 — Not recognized on condensed consolidated balance sheets at fair value (liabilities) Repurchase and loan agreements 1,253,720 — 1,259,010 — December 31, 2017 Recurring basis (assets) Mortgage loans at fair value $ 11,477 $ — $ — $ 11,477 Not recognized on consolidated balance sheets at fair value (liabilities) Repurchase and loan agreements 1,270,157 — 1,276,315 — _____________ (1) Included within prepaid expenses and other assets in the condensed consolidated balance sheets. |
Fair value, assets measured on recurring basis, reconciliation | The following table sets forth the changes in our mortgage loans as of three months ended March 31, 2018 and 2017 ($ in thousands): Three months ended March 31, 2018 2017 Mortgage loans at fair value, beginning balance $ 11,477 $ 460,444 Net (loss) gain on mortgage loans (115 ) 14,035 Transfers of mortgage loans at fair value to mortgage loans held for sale, net — (352,677 ) Mortgage loan dispositions, resolutions and payments (1,223 ) (22,866 ) Real estate tax advances to borrowers 81 2,327 Selling costs on loans held for sale (83 ) — Transfer of mortgage loans at fair value to real estate owned, net 137 (30,469 ) Mortgage loans, ending balance $ 10,274 $ 70,794 Change in unrealized gain on mortgage loans held at the end of the period $ (137 ) $ 1,025 |
Fair value measurements, recurring and nonrecurring, unobservable inputs | The following table sets forth quantitative information about the significant unobservable inputs used to measure the fair value of certain of our mortgage loans: Input March 31, 2018 December 31, 2017 Equity discount rate 17.0% 17.0% Debt to asset ratio 65.0% 65.0% Cost of funds 3.5% over 1 month LIBOR 3.5% over 1 month LIBOR Annual change in home pricing index -1.76% to 7.61% -1.71% to 9.07% Loan resolution probabilities — modification 0% to 5.9% 0% to 5.9% Loan resolution probabilities — liquidation 49.5% to 100% 49.5% to 100% Loan resolution probabilities — paid in full 0% to 47.4% 0% to 47.4% Loan resolution timelines (in years) 0.1 to 5.3 0.1 to 5.3 Value of underlying properties $45,000 to $2,200,000 $45,000 to $2,250,000 |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The following table sets forth data with respect to our repurchase and loan agreements as of March 31, 2018 and December 31, 2017 ($ in thousands): Maximum Borrowing Capacity Book Value of Collateral Amount Outstanding Amount of Available Funding March 31, 2018 CS Repurchase Agreement due November 16, 2018 $ 350,000 $ 258,495 $ 172,727 $ 177,273 Nomura Loan Agreement due April 5, 2018 (1) 250,000 167,291 101,656 148,344 MSR Loan Agreement due November 9, 2018 (2) 489,259 619,061 489,259 — HOME II Loan Agreement due November 9, 2019 (2) 83,270 102,614 83,270 — HOME III Loan Agreement due November 9, 2019 (2) 89,150 113,887 89,150 — HOME IV Loan Agreement (A) due December 9, 2022 114,201 148,626 114,201 — HOME IV Loan Agreement (B) due December 9, 2022 114,590 149,648 114,590 — Term Loan Agreement due April 6, 2022 100,000 115,966 100,000 — Less: unamortized loan discount — — (5,843 ) — Less: deferred debt issuance costs — — (5,290 ) — $ 1,590,470 $ 1,675,588 $ 1,253,720 $ 325,617 December 31, 2017 CS Repurchase Agreement due November 16, 2018 $ 350,000 $ 281,722 $ 189,173 $ 160,827 Nomura Loan Agreement due April 5, 2018 (1) 250,000 169,521 102,785 147,215 MSR Loan Agreement due November 9, 2018 (2) 489,259 622,065 489,259 — HOME II Loan Agreement due November 9, 2019 (2) 83,270 103,324 83,270 — HOME III Loan Agreement due November 9, 2019 (2) 89,150 114,698 89,150 — HOME IV Loan Agreement (A) due December 9, 2022 114,201 149,698 114,201 — HOME IV Loan Agreement (B) due December 9, 2022 114,590 150,718 114,590 — Term Loan Agreement due April 6, 2022 100,000 116,250 100,000 — Less: unamortized loan discount — — (6,158 ) — Less: deferred debt issuance costs — — (6,113 ) — $ 1,590,470 $ 1,707,996 $ 1,270,157 $ 308,042 _____________ (1) On April 5, 2018, we extended the maturity date to April 5, 2020, with a potential additional one -year extension to April 5, 2021. (2) Represents initial maturity date. We have the option to extend the maturity date for up to three successive one -year extensions. |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | The following table presents our significant transactions with AAMC, which is a related party, for the periods indicated ($ in thousands): Three months ended March 31, 2018 2017 Base management fees (1) $ 3,727 $ 4,211 Conversion fees (1) 63 604 Expense reimbursements (2) 262 196 ______________ (1) Included in management fees in the condensed consolidated statements of operations. (2) Included in general and administrative expenses in the condensed consolidated statements of operations. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of components of diluted (loss) earnings per share | The following table sets forth the components of diluted loss per share (in thousands, except share and per share amounts): Three months ended March 31, 2018 2017 Numerator Net loss $ (27,350 ) $ (49,357 ) Denominator Weighted average common stock outstanding – basic 53,454,063 53,646,291 Weighted average common stock outstanding – diluted 53,454,063 53,646,291 Loss per basic common share $ (0.51 ) $ (0.92 ) Loss per diluted common share $ (0.51 ) $ (0.92 ) |
Schedule of antidilutive securities excluded from computation of earnings per share | We excluded the items presented below from the calculation of diluted earnings per share as they were antidilutive for the periods indicated: Three months ended March 31, 2018 2017 Denominator (in weighted-average shares) Stock options 99,974 160,478 Restricted stock 208,754 95,511 |
Organization and Basis of Pre29
Organization and Basis of Presentation - Description of business (Details) property in Thousands | Mar. 31, 2018servicerservice_providerproperty |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of rental properties | property | 12 |
Number of third-party service providers | service_provider | 2 |
Number of separate servicers | servicer | 2 |
Organization and Basis of Pre30
Organization and Basis of Presentation - Effect of new accounting pronouncement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Amount reclassified to cash, cash equivalents and restricted cash | $ (5,437) | $ (27,734) |
Amount reclassified from investing activities | $ 24,742 | 154,527 |
Accounting Standards Update 2016-18 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Amount reclassified to cash, cash equivalents and restricted cash | $ 2,800 |
Asset Acquisitions and Dispos31
Asset Acquisitions and Dispositions - Real estate assets (Details) $ in Thousands | Nov. 29, 2017USD ($)property | Jun. 29, 2017USD ($)property | Mar. 30, 2017USD ($)property | Mar. 31, 2018USD ($)loanproperty | Mar. 31, 2017USD ($)property | Dec. 31, 2017USD ($)property | Nov. 13, 2017USD ($) |
Real Estate [Line Items] | |||||||
Purchase price of rental properties | $ 1,394,118 | $ 1,381,110 | |||||
Cash paid in acquisition of real estate | 4,293 | $ 28,225 | |||||
Acquisition fees and costs | $ 33 | $ 167 | |||||
Number of real estate properties sold | property | 193 | 413 | |||||
Disposition of real estate | $ 35,799 | $ 75,888 | |||||
Net realized gain on sales of real estate | 14,344 | 19,956 | |||||
Net realized gain on sales of real estate | 20,000 | ||||||
Revenues | 39,765 | 29,338 | |||||
Operating loss | (26,292) | (49,350) | |||||
Transfer of mortgage loans (from) to real estate owned, net | $ (137) | 30,553 | |||||
HOME SFR Borrower II, LLC | Secured debt | HOME II Loan Agreement due November 9, 2019 | |||||||
Real Estate [Line Items] | |||||||
Amount of proceeds from borrowings | $ 79,900 | $ 83,300 | |||||
HOME Flow Transaction | |||||||
Real Estate [Line Items] | |||||||
Number of properties agreed to acquire from seller | property | 3,500 | ||||||
Number of real estate properties directly acquired | property | 3,465 | ||||||
Acquisition costs and fees capitalized | $ 1,300 | $ 1,500 | |||||
HOME Flow Transaction | Leases In-Place | |||||||
Real Estate [Line Items] | |||||||
Acquired-in-place leases | $ 5,900 | $ 2,000 | $ 2,400 | ||||
Weighted average useful life of in-place leases | 7 months | 9 months | 7 months | ||||
HOME Flow Transaction | HOME SFR Borrower II, LLC | |||||||
Real Estate [Line Items] | |||||||
Number of real estate properties directly acquired | property | 757 | ||||||
Purchase price of rental properties | $ 106,500 | ||||||
Percentage of purchase price funded by seller financing arrangement | 75.00% | ||||||
Cash paid in acquisition of real estate | $ 26,600 | ||||||
HOME Flow Transaction | HOME SFR Borrower II, LLC | Secured debt | HOME II Loan Agreement due November 9, 2019 | |||||||
Real Estate [Line Items] | |||||||
Amount of proceeds from borrowings | $ 79,900 | ||||||
HOME Flow Transaction | HOME SFR Borrower III, LLC | |||||||
Real Estate [Line Items] | |||||||
Number of real estate properties directly acquired | property | 751 | ||||||
Purchase price of rental properties | $ 117,100 | ||||||
Percentage of purchase price funded by seller financing arrangement | 75.00% | ||||||
Cash paid in acquisition of real estate | $ 29,300 | ||||||
HOME Flow Transaction | HOME SFR Borrower III, LLC | Secured debt | HOME III Loan Agreement due November 9, 2019 | |||||||
Real Estate [Line Items] | |||||||
Amount of proceeds from borrowings | $ 87,800 | $ 89,100 | |||||
HOME Flow Transaction | HOME SFR Borrower IV, LLC | |||||||
Real Estate [Line Items] | |||||||
Number of real estate properties directly acquired | property | 1,957 | ||||||
Purchase price of rental properties | $ 305,100 | ||||||
Percentage of purchase price funded by seller financing arrangement | 75.00% | ||||||
Cash paid in acquisition of real estate | $ 76,300 | ||||||
Acquisition costs, period cost | 1,900 | ||||||
HOME Flow Transaction | HOME SFR Borrower IV, LLC | Secured debt | HOME III Loan Agreement due November 9, 2019 | |||||||
Real Estate [Line Items] | |||||||
Amount of proceeds from borrowings | $ 228,800 | ||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Real Estate [Line Items] | |||||||
Disposition of real estate | $ 35,200 | 66,900 | |||||
One-By-One Acquisition Program [Member] | |||||||
Real Estate [Line Items] | |||||||
Number of real estate properties directly acquired | loan | 35 | ||||||
Cash paid in acquisition of real estate | $ 4,300 | ||||||
Loans receivable | Residential mortgage | |||||||
Real Estate [Line Items] | |||||||
Real estate owned, number of reversions of real estate properties to mortgage loans | loan | 2 | ||||||
Transfer of mortgage loans (from) to real estate owned, net | $ (100) | $ 28,700 |
Asset Acquisitions and Dispos32
Asset Acquisitions and Dispositions - Mortgage loan assets and transfers to REO (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)loan | Mar. 31, 2017USD ($)loan | |
Mortgage Loans on Real Estate [Line Items] | ||
Proceeds from sale and resolution of mortgage loans | $ 1,100 | $ 124,700 |
Net realized (loss) gain on mortgage loans | (470) | 35,550 |
Transfer of mortgage loans (from) to real estate owned, net | (137) | 30,553 |
Conversion of mortgage loans to REO, net | $ 137 | $ 9,486 |
Loans receivable | Residential mortgage | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of mortgage loans transferred to REO | loan | 2 | 195 |
Transfer of mortgage loans (from) to real estate owned, net | $ (100) | $ 28,700 |
Conversion of mortgage loans to REO, net | $ 100 | $ 9,500 |
Loans receivable | Residential mortgage | Nonperforming financing receivable | ||
Mortgage Loans on Real Estate [Line Items] | ||
Number of mortgage loans resolved | loan | 12 | 78 |
Number of mortgage loans liquidated | loan | 556 |
Asset Acquisitions and Dispos33
Asset Acquisitions and Dispositions - Change in realized and unrealized gains (losses) on real estate and mortgage loans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Real Estate And Mortgage Loans On Real Estate Acquisitions And Disposals [Abstract] | ||
Conversion of mortgage loans to REO, net | $ 137 | $ 9,486 |
Change in fair value, net | 63 | 560 |
Reclassification to realized gain or loss | (15,708) | (61,911) |
Total change in unrealized gain on mortgage loans | (15,508) | (51,865) |
Net realized (loss) gain on mortgage loans | (470) | 35,550 |
Net realized gain on sales of real estate | 14,344 | 19,956 |
Net (loss) gain on real estate and mortgage loans | $ (1,634) | $ 3,641 |
Real Estate Assets, Net (Detail
Real Estate Assets, Net (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)property | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)property | |
Real Estate [Abstract] | |||
Number of real estate properties held for use | 12,213 | 12,241 | |
Number of real estate properties rented | 11,090 | 10,850 | |
Number of real estate properties listed for rent | 493 | 591 | |
Number of properties in unit turn status | 230 | 340 | |
Number of real estate properties in various stages of renovation | 141 | 194 | |
Number of real estate properties under evaluation for rental portfolio | 259 | 266 | |
Impairment on real estate held for use | $ | $ 0 | $ 2,300 | |
Number of real estate properties held for sale | 203 | 333 | |
Real estate assets held for sale | $ | $ 45,344 | $ 75,718 | |
Impairment of on real estate held for sale | $ | $ 5,900 | $ 2,100 |
Mortgage Loans (Details)
Mortgage Loans (Details) - Loans receivable - Residential mortgage - Residential portfolio segment $ in Thousands | Mar. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan |
Number of Loans | ||
Current | loan | 16 | 17 |
Foreclosure | loan | 62 | 67 |
Mortgage loans at fair value | loan | 99 | 111 |
Fair Value and Carrying Value | ||
Current | $ 1,437 | $ 1,528 |
Foreclosure | 8,214 | 8,874 |
Mortgage loans at fair value | 10,274 | 11,477 |
Unpaid Principal Balance | ||
Current | 2,139 | 2,380 |
Foreclosure | 17,950 | 18,813 |
Mortgage loans at fair value | 26,420 | 29,350 |
Market Value of Underlying Properties | ||
Current | 3,102 | 3,156 |
Foreclosure | 19,683 | 20,820 |
Mortgage loans at fair value | $ 28,229 | $ 31,174 |
30 | ||
Number of Loans | ||
Past Due | loan | 2 | 1 |
Fair Value and Carrying Value | ||
Past Due | $ 307 | $ 51 |
Unpaid Principal Balance | ||
Past Due | 400 | 139 |
Market Value of Underlying Properties | ||
Past Due | $ 575 | $ 70 |
60 | ||
Number of Loans | ||
Past Due | loan | 1 | 3 |
Fair Value and Carrying Value | ||
Past Due | $ 51 | $ 304 |
Unpaid Principal Balance | ||
Past Due | 138 | 344 |
Market Value of Underlying Properties | ||
Past Due | $ 79 | $ 630 |
90 | ||
Number of Loans | ||
Past Due | loan | 18 | 23 |
Fair Value and Carrying Value | ||
Past Due | $ 265 | $ 720 |
Unpaid Principal Balance | ||
Past Due | 5,793 | 7,674 |
Market Value of Underlying Properties | ||
Past Due | $ 4,790 | $ 6,498 |
Fair Value of Financial Instr36
Fair Value of Financial Instruments - Fair value, assets and liabilities measured on recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||
Interest rate cap derivative | $ 800 | |
Repurchase and loan agreements | 1,253,720 | $ 1,270,157 |
Level 1, Quoted Prices in Active Markets | ||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||
Repurchase and loan agreements | 0 | 0 |
Level 2, Observable Inputs Other Than Level 1 Prices | ||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||
Repurchase and loan agreements | 1,259,010 | 1,276,315 |
Level 3, Unobservable Inputs | ||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||
Repurchase and loan agreements | 0 | 0 |
Fair value measurements, recurring | ||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||
Mortgage loans | 10,274 | 11,477 |
Interest rate cap derivative | 768 | |
Fair value measurements, recurring | Level 1, Quoted Prices in Active Markets | ||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||
Mortgage loans | 0 | 0 |
Interest rate cap derivative | 0 | |
Fair value measurements, recurring | Level 2, Observable Inputs Other Than Level 1 Prices | ||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||
Mortgage loans | 0 | 0 |
Interest rate cap derivative | 768 | |
Fair value measurements, recurring | Level 3, Unobservable Inputs | ||
Fair value, assets and liabilities measured on recurring and nonrecurring basis [Line Items] | ||
Mortgage loans | 10,274 | $ 11,477 |
Interest rate cap derivative | $ 0 |
Fair Value of Financial Instr37
Fair Value of Financial Instruments - Fair value, assets measure on recurring basis, unobservable inputs (Details) - Mortgage loans at fair value and loans held-for-sale - Level 3, Unobservable Inputs - Loans receivable - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance | $ 11,477 | $ 460,444 | $ 460,444 |
Net (loss) gain on mortgage loans | (115) | 14,035 | |
Transfers of mortgage loans at fair value to mortgage loans held for sale, net | 0 | (352,677) | |
Mortgage loan dispositions, resolutions and payments | (1,223) | (22,866) | |
Real estate tax advances to borrowers | 81 | 2,327 | |
Selling costs on loans held for sale | (83) | 0 | |
Transfer of mortgage loans at fair value to real estate owned, net | 137 | (30,469) | |
Ending balance | 10,274 | 70,794 | $ 11,477 |
Change in unrealized gain on mortgage loans held at the end of the period | $ (137) | $ 1,025 |
Fair Value of Financial Instr38
Fair Value of Financial Instruments - Fair value inputs, quantitative information (Details) - Loans receivable - Residential mortgage - Level 3, Unobservable Inputs - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair value inputs, assets, quantitative information [Line Items] | ||
Equity discount rate | 17.00% | 17.00% |
Debt to asset ratio | 65.00% | 65.00% |
Cost of funds | 3.50% | 3.50% |
LIBOR reference rate | 1 month LIBOR | 1 month LIBOR |
Minimum | ||
Fair value inputs, assets, quantitative information [Line Items] | ||
Annual change in home pricing index | (1.76%) | (1.71%) |
Loan resolution probabilities — modification | 0.00% | 0.00% |
Loan resolution probabilities — liquidation | 49.50% | 49.50% |
Loan resolution probabilities — paid in full | 0.00% | 0.00% |
Loan resolution timelines (in years) | 1 month 6 days | 1 month 6 days |
Value of underlying properties | $ 45 | $ 45 |
Maximum | ||
Fair value inputs, assets, quantitative information [Line Items] | ||
Annual change in home pricing index | 7.61% | 9.07% |
Loan resolution probabilities — modification | 5.90% | 5.90% |
Loan resolution probabilities — liquidation | 100.00% | 100.00% |
Loan resolution probabilities — paid in full | 47.40% | 47.40% |
Loan resolution timelines (in years) | 5 years 3 months 18 days | 5 years 3 months 18 days |
Value of underlying properties | $ 2,200 | $ 2,250 |
Borrowings - Repurchase and loa
Borrowings - Repurchase and loan Agreements narrative (Details) | Mar. 31, 2018USD ($)agreement | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||
Number of repurchase agreements at period end | agreement | 1 | |
Number of loan agreements at period end | agreement | 7 | |
Aggregate outstanding debt under repurchase and loan agreements | $ 1,253,720,000 | $ 1,270,157,000 |
Repurchase and loan agreements | ||
Debt Instrument [Line Items] | ||
Interest rate on debt | 4.72% | |
Maximum aggregate funding available under repurchase and loan agreements | $ 1,590,470,000 | 1,590,470,000 |
Aggregate outstanding debt under repurchase and loan agreements | $ 1,253,720,000 | $ 1,270,157,000 |
Borrowings - Repurchase agreeme
Borrowings - Repurchase agreements narrative (Details) - Repurchase agreements - CS Repurchase Agreement - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 22, 2013 | |
Short-term Debt [Line Items] | ||
Maximum borrowing capacity | $ 350,000,000 | $ 100,000,000 |
Amount outstanding, before debt issuance costs | $ 172,727,000 | |
LIBOR | ||
Short-term Debt [Line Items] | ||
Basis spread on variable rate | 2.75% |
Borrowings - Loan agreements na
Borrowings - Loan agreements narrative (Details) | Apr. 05, 2018USD ($) | Nov. 13, 2017USD ($) | Jun. 29, 2017USD ($)property | Mar. 30, 2017USD ($)property | Sep. 30, 2016USD ($)property | Mar. 31, 2018USD ($)loan_term | Dec. 31, 2017USD ($)loan_termproperty | Nov. 29, 2017USD ($) | Apr. 06, 2017USD ($) | Apr. 10, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||||
Length of loan term extension option, years | 1 year | |||||||||
HOME SFR Transaction | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of real estate properties directly acquired | property | 4,262 | |||||||||
HOME Flow Transaction | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of real estate properties directly acquired | property | 3,465 | |||||||||
HOME SFR Borrower II, LLC | HOME Flow Transaction | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of real estate properties directly acquired | property | 757 | |||||||||
HOME SFR Borrower III, LLC | HOME Flow Transaction | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of real estate properties directly acquired | property | 751 | |||||||||
Secured debt | Nomura Loan Agreement due April 5, 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 250,000,000 | $ 100,000,000 | ||||||||
Uncommitted maximum borrowing amount | $ 100,000,000 | |||||||||
Secured debt | Nomura Loan Agreement due April 5, 2018 | Subsequent event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Uncommitted maximum borrowing amount | $ 150,000,000 | |||||||||
Secured debt | MSR Loan Agreement due November 9, 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Length of loan term extension option, years | 1 year | |||||||||
Amount borrowed pursuant to loan agreement | $ 489,300,000 | |||||||||
Number of terms for loan agreement | loan_term | 3 | |||||||||
Secured debt | HOME II Loan Agreement due November 9, 2019 | HOME SFR Borrower II, LLC | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Length of loan term extension option, years | 1 year | 1 year | ||||||||
Amount borrowed pursuant to loan agreement | $ 83,300,000 | $ 79,900,000 | ||||||||
Number of terms for loan agreement | loan_term | 3 | 3 | ||||||||
Secured debt | HOME II Loan Agreement due November 9, 2019 | HOME SFR Borrower II, LLC | HOME Flow Transaction | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amount borrowed pursuant to loan agreement | $ 79,900,000 | |||||||||
Secured debt | HOME III Loan Agreement due November 9, 2019 | HOME SFR Borrower III, LLC | HOME Flow Transaction | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amount borrowed pursuant to loan agreement | $ 89,100,000 | $ 87,800,000 | ||||||||
Secured debt | HOME IV - A Loan Agreement due December 9, 2022 | HOME Flow Transaction | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amount borrowed pursuant to loan agreement | $ 114,200,000 | |||||||||
Secured debt | HOME IV - B Loan Agreement due December 9, 2022 | HOME Flow Transaction | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amount borrowed pursuant to loan agreement | $ 114,600,000 | |||||||||
Fixed interest rate on loan agreement | 4.00% | |||||||||
Loan agreement | Nomura Loan Agreement due April 5, 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 250,000,000 | $ 250,000,000 | ||||||||
Amount outstanding, before debt issuance costs | 101,656,000 | 102,785,000 | ||||||||
Loan agreement | Nomura Loan Agreement due April 5, 2018 | Subsequent event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Length of loan term extension option, years | 2 years | |||||||||
Additional extension period | 1 year | |||||||||
Loan agreement | MSR Loan Agreement due November 9, 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 489,259,000 | 489,259,000 | ||||||||
Amount outstanding, before debt issuance costs | 489,259,000 | 489,259,000 | ||||||||
Loan agreement | HOME II Loan Agreement due November 9, 2019 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 83,270,000 | 83,270,000 | ||||||||
Amount outstanding, before debt issuance costs | 83,270,000 | 83,270,000 | ||||||||
Loan agreement | Term Loan Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 100,000,000 | 100,000,000 | ||||||||
Amount outstanding, before debt issuance costs | 100,000,000 | 100,000,000 | ||||||||
Loan agreement | HOME III Loan Agreement due November 9, 2019 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 89,150,000 | 89,150,000 | ||||||||
Amount outstanding, before debt issuance costs | 89,150,000 | 89,150,000 | ||||||||
Loan agreement | HOME IV - A Loan Agreement due December 9, 2022 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 114,201,000 | 114,201,000 | ||||||||
Amount outstanding, before debt issuance costs | 114,201,000 | 114,201,000 | ||||||||
Loan agreement | HOME IV - B Loan Agreement due December 9, 2022 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 114,590,000 | 114,590,000 | ||||||||
Amount outstanding, before debt issuance costs | $ 114,590,000 | $ 114,590,000 | ||||||||
Loans payable | Term Loan Agreement | RESI TLI Borrower, LLC | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Amount borrowed pursuant to loan agreement | $ 100,000,000 | |||||||||
Fixed interest rate on loan agreement | 5.00% | |||||||||
LIBOR | Secured debt | Nomura Loan Agreement due April 5, 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 3.25% | |||||||||
LIBOR | Secured debt | Nomura Loan Agreement due April 5, 2018 | Subsequent event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 3.00% | |||||||||
LIBOR | Secured debt | MSR Loan Agreement due November 9, 2018 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 3.285% | |||||||||
LIBOR | Secured debt | HOME II Loan Agreement due November 9, 2019 | HOME SFR Borrower II, LLC | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 2.10% | 2.75% | ||||||||
LIBOR | Secured debt | HOME III Loan Agreement due November 9, 2019 | HOME SFR Borrower III, LLC | HOME Flow Transaction | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 2.10% | 2.30% |
Borrowings - Schedule of repurc
Borrowings - Schedule of repurchase and loan agreements (Details) | 3 Months Ended | ||
Mar. 31, 2018USD ($)extension | Dec. 31, 2017USD ($) | Mar. 22, 2013USD ($) | |
Debt Instrument [Line Items] | |||
Repurchase and loan agreements | $ 1,253,720,000 | $ 1,270,157,000 | |
Number of potential renewal extensions | extension | 3 | ||
Length of loan term extension option, years | 1 year | ||
Repurchase agreements | CS Repurchase Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 350,000,000 | ||
Book Value of Collateral | $ 258,495,000 | 281,722,000 | |
Amount Outstanding, before debt issuance costs | 189,173,000 | ||
Amount of Available Funding | 177,273,000 | 160,827,000 | |
Loan agreement | Nomura Loan Agreement due April 5, 2018 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 250,000,000 | 250,000,000 | |
Book Value of Collateral | 167,291,000 | 169,521,000 | |
Amount Outstanding, before debt issuance costs | 101,656,000 | 102,785,000 | |
Amount of Available Funding | 148,344,000 | 147,215,000 | |
Loan agreement | MSR Loan Agreement due November 9, 2018 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 489,259,000 | 489,259,000 | |
Book Value of Collateral | 619,061,000 | 622,065,000 | |
Amount Outstanding, before debt issuance costs | 489,259,000 | 489,259,000 | |
Amount of Available Funding | 0 | 0 | |
Loan agreement | HOME II Loan Agreement due November 9, 2019 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 83,270,000 | 83,270,000 | |
Book Value of Collateral | 102,614,000 | 103,324,000 | |
Amount Outstanding, before debt issuance costs | 83,270,000 | 83,270,000 | |
Amount of Available Funding | 0 | 0 | |
Loan agreement | HOME III Loan Agreement due November 9, 2019 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 89,150,000 | 89,150,000 | |
Book Value of Collateral | 113,887,000 | 114,698,000 | |
Amount Outstanding, before debt issuance costs | 89,150,000 | 89,150,000 | |
Amount of Available Funding | 0 | 0 | |
Loan agreement | HOME IV - A Loan Agreement due December 9, 2022 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 114,201,000 | 114,201,000 | |
Book Value of Collateral | 148,626,000 | 149,698,000 | |
Amount Outstanding, before debt issuance costs | 114,201,000 | 114,201,000 | |
Amount of Available Funding | 0 | 0 | |
Loan agreement | HOME IV - B Loan Agreement due December 9, 2022 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 114,590,000 | 114,590,000 | |
Book Value of Collateral | 149,648,000 | 150,718,000 | |
Amount Outstanding, before debt issuance costs | 114,590,000 | 114,590,000 | |
Amount of Available Funding | 0 | 0 | |
Loan agreement | Term Loan Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 100,000,000 | 100,000,000 | |
Book Value of Collateral | 115,966,000 | 116,250,000 | |
Amount Outstanding, before debt issuance costs | 100,000,000 | 100,000,000 | |
Amount of Available Funding | 0 | 0 | |
Repurchase and loan agreements | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 1,590,470,000 | 1,590,470,000 | |
Book Value of Collateral | 1,675,588,000 | 1,707,996,000 | |
Less: unamortized loan discount | (5,843,000) | (6,158,000) | |
Less: deferred debt issuance costs | (5,290,000) | (6,113,000) | |
Repurchase and loan agreements | 1,253,720,000 | 1,270,157,000 | |
Amount of Available Funding | 325,617,000 | $ 308,042,000 | |
Repurchase agreements | CS Repurchase Agreement | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 350,000,000 | $ 100,000,000 | |
Amount Outstanding, before debt issuance costs | $ 172,727,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Nov. 29, 2017USD ($) | May 31, 2015shareholder | Dec. 31, 2017 | Mar. 31, 2018USD ($) |
Amherst Acquisition | Main Street Renewal, LLC (MSR) | ||||
Loss Contingencies [Line Items] | ||||
Liquidation fee, required to be paid by company upon properties liquidated exceeding 50% | $ 60 | |||
Percentage of properties liquidated triggering fee paid per agreement | 50.00% | |||
Period considered for liquidation fee requirements per agreement | 18 months | |||
HOME Flow Transaction | HOME SFR Borrower IV, LLC | ||||
Loss Contingencies [Line Items] | ||||
Potential purchase price adjustments, percentage of upward or downward adjustment | 10.00% | |||
Potential purchase price adjustments, aggregate amount of change (up to) | $ 18.3 | |||
Potential purchase price adjustments, period of assessment | 24 months | |||
Martin v. Altisource Residential Corporation et al. | Pending litigation | ||||
Loss Contingencies [Line Items] | ||||
Number of shareholders requesting to be lead plaintiff | shareholder | 2 |
Related-Party Transactions (Det
Related-Party Transactions (Details) | Apr. 01, 2015extension | Mar. 31, 2015property | Mar. 31, 2018USD ($)extension | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Related party transaction [Line Items] | |||||
Number of potential renewal extensions | extension | 3 | ||||
Related party payables | $ 4,027,000 | $ 4,151,000 | |||
Affiliated entity | AAMC | |||||
Related party transaction [Line Items] | |||||
Base management fee, percent of qualified average invested capital | 1.50% | ||||
Incentive management fee, return on invested capital | 1.75% | ||||
Conversion fee, percent of market value of new rental properties | 1.50% | ||||
Incentive management fee, percent of incentive fee payable in common stock | 25.00% | ||||
Period in fiscal years return on invested equity capital evaluated for termination of agreement | 2 years | ||||
Period of time required return rate evaluated per new agreement | 1 year 9 months | ||||
Deficit of return on invested capital | 50.01% | ||||
Affiliated entity | AAMC | Minimum | |||||
Related party transaction [Line Items] | |||||
Incentive management fee, return on invested capital | 7.00% | ||||
Incentive management fee, return on invested capital, per quarter | 1.75% | ||||
Affiliated entity | AAMC | Maximum | |||||
Related party transaction [Line Items] | |||||
Incentive management fee, return on invested capital | 8.25% | ||||
Incentive management fee, return on invested capital, per quarter | 2.06% | ||||
Affiliated entity | AAMC | Asset management fee, threshold one | |||||
Related party transaction [Line Items] | |||||
Incentive management fee, percent of average invested capital | 25.00% | ||||
Incentive management fee, percent of invested capital in excess of threshold | 20.00% | ||||
Affiliated entity | AAMC | Asset management fee, threshold two | |||||
Related party transaction [Line Items] | |||||
Incentive management fee, percent of average invested capital | 1.75% | ||||
Base management fee, number of rental properties floor | property | 2,500 | ||||
Incentive management fee, number of rental properties cap | property | 4,499 | ||||
Incentive management fee, number of rental properties, floor | property | 2,500 | ||||
Incentive management fee, percent of invested capital in excess of threshold | 22.50% | ||||
Affiliated entity | AAMC | Asset management fee, threshold three | |||||
Related party transaction [Line Items] | |||||
Incentive management fee, percent of average invested capital | 2.00% | ||||
Incentive management fee, number of rental properties, floor | property | 4,500 | ||||
Incentive management fee, percent of invested capital in excess of threshold | 25.00% | ||||
Affiliated entity | AAMC | Asset Management Agreement | |||||
Related party transaction [Line Items] | |||||
Contract term | 15 years | ||||
Number of potential renewal extensions | extension | 2 | ||||
Automatic renewal term | 5 years | ||||
Affiliated entity | AAMC | Base management fee | |||||
Related party transaction [Line Items] | |||||
Related party expenses | $ 3,727,000 | $ 4,211,000 | |||
Affiliated entity | AAMC | Conversion fee | |||||
Related party transaction [Line Items] | |||||
Related party expenses | 63,000 | 604,000 | |||
Affiliated entity | AAMC | Management incentive fee | |||||
Related party transaction [Line Items] | |||||
Related party payables | 0 | 0 | |||
Affiliated entity | AAMC | Expense reimbursements | |||||
Related party transaction [Line Items] | |||||
Related party expenses | $ 262,000 | $ 196,000 |
Share-Based Payments (Details)
Share-Based Payments (Details) $ / shares in Units, $ in Thousands | Jul. 01, 2016USD ($) | Dec. 21, 2012 | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ | $ (414) | $ 1,914 | ||
Unrecognized share-based compensation expense | $ | $ 2,100 | $ 4,600 | ||
Unrecognized share-based compensation expense, remaining estimated term (years) | 1 year | 1 year 3 months | ||
Number of aggregate shares available for purchase from remaining options issued | shares | 77,942 | |||
The 2016 Equity Incentive Plan | Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Value of restricted stock granted to directors annually | $ | $ 60 | |||
Period distribution of vested restricted stock is deferred | 2 years | |||
Number of trading dates average price per share used for vesting requirements | 20 days | |||
Percentage reinvested dividends to price per share, minimum | 125.00% | |||
The 2016 Equity Incentive Plan | Restricted stock | Board of Director member | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of restricted stock units vested (in shares) | shares | 3,495 | |||
Number of restricted stock units forfeited (in shares) | shares | 701 | |||
Restricted stock units vested, grant date fair value (usd per share) | $ / shares | $ 14.30 | |||
Restricted stock units forfeited, grant date fair value (usd per share) | $ / shares | $ 14.30 | |||
2012 Conversion Option Plan and 2012 Special Conversion Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio for stock options from ASPS stock to Residential stock | 0.3333 |
Derivatives (Details)
Derivatives (Details) - USD ($) $ in Millions | Mar. 16, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 29, 2016 |
Derivative [Line Items] | ||||
Premium paid to amend strike rate | $ 0.9 | |||
Interest rate cap derivative | $ 0.8 | |||
Changes in fair value of interest rate cap | $ 0.2 | $ 0.2 | ||
Interest rate cap | ||||
Derivative [Line Items] | ||||
Notional amount of interest rate cap | $ 489.3 | |||
Interest rate cap | LIBOR | ||||
Derivative [Line Items] | ||||
Interest rate cap, strike rate | 1.80% | 2.938% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator | ||
Net loss | $ (27,350) | $ (49,357) |
Denominator | ||
Weighted average common stock outstanding – basic (in shares) | 53,454,063 | 53,646,291 |
Weighted average common stock outstanding – diluted (in shares) | 53,454,063 | 53,646,291 |
Loss per basic common share (usd per share) | $ (0.51) | $ (0.92) |
Loss per diluted common share (usd per share) | $ (0.51) | $ (0.92) |
Affiliated entity | AAMC | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Incentive management fee, percent of incentive fee payable in common stock | 25.00% | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 99,974 | 160,478 |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 208,754 | 95,511 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended |
Mar. 31, 2018segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |