Segment Reporting

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Management has organized the Company into three reportable segments based primarily on its services as follows:

• Servicing — consists of operations that perform servicing for third-party credit owners of mortgage loans for a fee and the Company’s own mortgage loan portfolio. The Servicing segment also operates complementary businesses consisting of an insurance agency serving residential loan borrowers and credit owners and a collections agency which performs collections of post charge-off deficiency balances for third parties and the Company. In addition, the Servicing segment holds the assets and mortgage-backed debt of the Residual Trusts.

• Originations — consists of operations that purchase and originate mortgage loans that are intended for sale to third parties.

• Reverse Mortgage — consists of operations that purchase and originate HECMs that are securitized, but remain on the consolidated balance sheet as collateral for secured borrowings. This segment performs servicing for third-party credit owners and the Company and provides other complementary services for the reverse mortgage market, such as real estate owned property management and disposition.

During the first quarter of 2015, the Company took actions to simplify its business including the reorganization of its reportable segments to align with changes in the management reporting structure. These changes affect how management monitors operating performance and allocates resources in the current business environment. As a result of this reorganization, the Company modified the Servicing segment by combining the Asset Receivables Management, Insurance, and Loans and Residuals businesses into the Servicing segment. The Company also made a change to the composition of indirect costs and depreciation and amortization allocated to the business segments and established an intersegment charge between the Servicing and Originations segments for certain loan originations associated with the Company's mortgage loan servicing portfolio. The changes to cost structure align with the business segments supported and segment performance metrics utilized by management. Indirect costs continue to be allocated based on headcount. The Company has recast segment operating results and total assets of prior periods to reflect these changes. As a result of the changes, income before taxes for the Originations segment decreased by $5.9 million while loss before taxes for the Servicing and Reverse Mortgage segments and Other non-reportable segment decreased by $4.9 million, $0.9 million and $0.1 million, respectively, for the three months ended June 30, 2014. Income before taxes for the Servicing and Originations segments increased (decreased) by $10.1 million and $(11.9) million, respectively, while loss before taxes for the Reverse Mortgage segment and Other non-reportable segment decreased by $1.7 million and $0.1 million, respectively, for the six months ended June 30, 2014. Total assets for the Servicing segment and Other non-reportable segment decreased by $3.0 million and $40.1 million, respectively, and total assets eliminated decreased by $43.1 million at December 31, 2014.

In order to reconcile the financial results for the Company’s reportable segments to the consolidated results, the Company has presented the revenue and expenses of the Non-Residual Trusts and other non-reportable operating segments, as well as certain corporate expenses that have not been allocated to the business segments, in Other. Intersegment servicing revenues and expenses have been eliminated. Intersegment revenues are recognized on the same basis of accounting as such revenue is recognized on the consolidated statements of comprehensive income (loss).

The following tables present select financial information of reportable segments (in thousands). The changes addressed above have been reflected in the segment information presented below for all periods.

	For the Three Months Ended June 30, 2015
	Servicing		Originations		Reverse Mortgage			Other			Eliminations			Total Consolidated
Total revenues (1) (2) (3)	$	274,196	$	128,702	$	20,172		$	854		$	(11,491	)	$	412,433
Income (loss) before income taxes	82,296		32,965		(90,960		)	(39,300		)	—			(14,999		)

	For the Three Months Ended June 30, 2014
	Servicing			Originations		Reverse Mortgage			Other			Eliminations			Total Consolidated
Total revenues (1) (2) (3)	$	202,862		$	150,299	$	38,718		$	35,612		$	(13,778	)	$	413,713
Income (loss) before income taxes	(23,349		)	58,401		(85,716		)	(1,262		)	—			(51,926		)

__________

(1) The Company’s Servicing segment includes net servicing revenue and fees with external customers of $212.0 million and $132.2 million for the three months ended June 30, 2015 and 2014. All net servicing revenue and fees of the Company's Reverse Mortgage segment were derived from external customers for the three months ended June 30, 2015 and 2014.

(2) The Company’s Servicing segment includes net servicing revenue and fees of $2.4 million and $2.6 million for the three months ended June 30, 2015 and 2014, respectively, associated with intercompany activity with the Other non-reportable segment.

(3) The Company's Servicing segment includes other revenues of $8.5 million and $11.2 million for the three months ended June 30, 2015 and 2014, respectively, associated with fees earned for certain loan originations completed by the Originations segment from leads generated through the Servicing segment's servicing portfolio.

	For the Six Months Ended June 30, 2015
	Servicing		Originations		Reverse Mortgage			Other			Eliminations			Total Consolidated
Total revenues (1) (2) (3)	$	417,959	$	259,002	$	64,099		$	4,147		$	(21,917	)	$	723,290
Income (loss) before income taxes	31,624		74,763		(104,417		)	(66,647		)	—			(64,677		)

	For the Six Months Ended June 30, 2014
	Servicing		Originations		Reverse Mortgage			Other			Eliminations			Total Consolidated
Total revenues (1) (2) (3)	$	448,446	$	259,513	$	66,586		$	36,926		$	(27,810	)	$	783,661
Income (loss) before income taxes	43,027		72,628		(94,779		)	(43,837		)	—			(22,961		)

__________

(1) The Company’s Servicing segment includes net servicing revenue and fees with external customers of $291.5 million and $297.4 million for the six months ended June 30, 2015 and 2014. All net servicing revenue and fees of the Company's Reverse Mortgage segment were derived from external customers for the six months ended June 30, 2015 and 2014.

(2) The Company’s Servicing segment includes net servicing revenue and fees of $4.8 million and $4.6 million for the six months ended June 30, 2015 and 2014, respectively, associated with intercompany activity with the Other non-reportable segment.

(3) The Company's Servicing segment includes other revenues of $16.5 million and $23.2 million for the six months ended June 30, 2015 and 2014, respectively, associated with fees earned for certain loan originations completed by the Originations segment from leads generated through the Servicing segment's servicing portfolio.

	Total Assets Per Segment
	Servicing		Originations		Reverse Mortgage		Other		Eliminations			Total Consolidated
June 30, 2015	$	5,664,167	$	2,008,164	$	11,085,456	$	1,390,036	$	(803,291	)	$	19,344,532
December 31, 2014	6,405,781		1,493,851		10,476,947		1,256,971		(641,573		)	18,991,977