Servicing Advance Liabilities

Servicing advance liabilities consist of the following (in thousands):



	December 31,
	2014		2013
Servicing advance facilities	$	1,197,148	$	67,905
Early Advance Reimbursement Agreement	168,737		903,381
Total servicing advance liabilities	$	1,365,885	$	971,286

The Company's subsidiaries have servicing advance facilities with several lenders and an Early Advance Reimbursement Agreement with Fannie Mae which, in each case, are used to fund certain servicer and protective advances that are the responsibility of the Company under certain servicing agreements.

The servicing advance facilities and the Early Advance Reimbursement Agreement had an aggregate capacity of $1.5 billion at December 31, 2014. The interest rates on these facilities and the Early Advance Reimbursement Agreement are primarily based on LIBOR plus between 1.80% and 4.00% and have various expiration dates through December 2015. Payments on the amounts due under these agreements are paid from proceeds received by the subsidiaries (i) in connection with the liquidation of mortgaged properties, (ii) from repayments received from mortgagors, or (iii) from reimbursements received from the owners of the mortgage loans, such as Fannie Mae, Freddie Mac and private label securitization trusts. Accordingly, repayment of the facilities and amounts due under the Early Advance Reimbursement Agreement are dependent on the recoveries or repayments by third-party borrowers that are received on the underlying advances associated with the agreements. Two of the servicing advance facilities are non-recourse to the Company. Refer to additional information at Note 4.

In December 2014, one of the Company's subsidiaries entered into an amended servicer advance financing facility, increasing the capacity available under this agreement from $100 million to $1.2 billion. The facility provides funding for servicer and protective advances made by Green Tree Servicing in connection with its servicing of Fannie Mae and Freddie Mac mortgage loans. Approximately $1.1 billion of the facility was drawn and used to repay $765 million of amounts due under the Early Advance Reimbursement Agreement with Fannie Mae, pay certain fees and expenses associated with the facility, fund certain collateral reserve and other accounts required by the facility, and for general corporate purposes.

Servicing Advance Facilities

The servicing advance facilities had $1.4 billion of collateral pledged by the Company's subsidiaries under these agreements at December 31, 2014. The servicing advance facilities contain customary events of default and covenants, including financial covenants. Financial covenants most sensitive to the Company’s operating results and financial position are the requirements that certain of its subsidiaries maintain minimum tangible net worth, indebtedness to tangible net worth and minimum liquidity. During the first quarter of 2014, one of the facilities (the Receivables Loan Agreement) was amended to remove the covenant relating to the Company's requirement to maintain a minimum annual net cash provided by operating activities and to add other customary financial covenants, including indebtedness to tangible net worth ratio requirements, and minimum liquidity. The Company's subsidiaries were in compliance with these financial covenants at December 31, 2014.

Early Advance Reimbursement Agreement

Green Tree Servicing's Early Advance Reimbursement Agreement with Fannie Mae is used exclusively to fund certain principal and interest, servicer and protective advances that are the responsibility of Green Tree Servicing under its Fannie Mae servicing agreements. In December 2014, Green Tree Servicing entered into an amendment to the Early Advance Reimbursement Agreement to remove certain loans and servicing advances from the agreement and decrease the maximum aggregate amount of periodic early reimbursement amounts to be made by Fannie Mae to $200 million from $950 million. This agreement expires on March 31, 2015. If not renewed, there will be no additional funding by Fannie Mae of new advances under the agreement. In addition, collections recovered during the 18 months following the expiration of the agreement are to be remitted to Fannie Mae to settle any remaining outstanding balance due under such agreement. Upon expiration of the 18 month period, any remaining balance would become due and payable.

The Early Advance Reimbursement Agreement with Fannie Mae also includes certain “Stop Events,” such as: (i) the failure of Green Tree Servicing to comply with the terms of the agreement; (ii) the failure of Green Tree Servicing to be an approved Fannie Mae servicer; and (iii) the occurrence of an event of default under Green Tree Servicing’s mortgage selling and servicing contract or any master agreement with Fannie Mae which has not been waived by Fannie Mae or cured as may be allowed under the applicable agreement. Fannie Mae may also declare a “Stop Event” 120 days after providing Green Tree Servicing with written notice of its intent to do so. Were a Stop Event to occur and not be waived by Fannie Mae, they would have the option to terminate the Early Advance Reimbursement Agreement. In the event Fannie Mae elected to terminate the Early Advance Reimbursement Agreement, collections recovered during the 18 months following the occurrence of the Stop Event would be required to be remitted to Fannie Mae to settle any remaining outstanding balance due under such agreement. Upon expiration of the 18 month period, any remaining balance would become due and payable.