Separate Financial Information of Subsidiary Guarantors of Indebtedness

In accordance with the Senior Notes Indenture, certain existing and future 100% owned domestic subsidiaries of the Parent Company have fully and unconditionally guaranteed the Senior Notes on a joint and several basis. These guarantor subsidiaries also guarantee the Parent Company's obligations under the 2013 Secured Credit Facilities. The indenture governing the Senior Notes contains customary exceptions under which a guarantor subsidiary may be released from its guarantee without the consent of the holders of the Senior Notes, including (i) the permitted sale, transfer or other disposition of all or substantially all of a guarantor subsidiary's assets or common stock; (ii) the designation of a restricted guarantor subsidiary as an unrestricted subsidiary; (iii) the release of a guarantor subsidiary from its obligation under the 2013 Secured Credit Facilities and its guarantee of all other indebtedness of the Parent Company and other guarantor subsidiaries; and (iv) the defeasance of the obligations of the guarantor subsidiary by payment of the Senior Notes.

Presented below are the condensed consolidating financial information of the Parent Company, the guarantor subsidiaries on a combined basis, and the non-guarantor subsidiaries on a combined basis.



Condensed Consolidating Balance Sheet
December 31, 2016
(in thousands)

	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries and VIEs		Eliminations and Reclassifications			Consolidated
ASSETS
Cash and cash equivalents	$	773	$	221,825	$	2,000	$	—		$	224,598
Restricted cash and cash equivalents	1,502		158,204		44,757		—			204,463
Residential loans at amortized cost, net	12,891		189,441		462,877		—			665,209
Residential loans at fair value	—		11,924,043		492,499		—			12,416,542
Receivables, net	97,424		154,852		15,686		—			267,962
Servicer and protective advances, net	—		481,099		688,961		25,320			1,195,380
Servicing rights, net	—		1,029,719		—		—			1,029,719
Goodwill	—		47,747		—		—			47,747
Intangible assets, net	—		11,347		—		—			11,347
Premises and equipment, net	1,181		81,447		—		—			82,628
Deferred tax assets, net	27,310		270,079		212		2,325			299,926
Assets held for sale	—		65,045		6,040		—			71,085
Other assets	30,789		191,671		19,830		—			242,290
Due from affiliates, net	392,998		—		—		(392,998		)	—
Investments in consolidated subsidiaries and VIEs	1,897,729		136,387		—		(2,034,116		)	—
Total assets	$	2,462,597	$	14,962,906	$	1,732,862	$	(2,399,469	)	$	16,758,896

LIABILITIES AND STOCKHOLDERS' EQUITY
Payables and accrued liabilities	$	53,337	$	708,070	$	5,474	$	(7,870	)	$	759,011
Servicer payables	—		146,332		—		—			146,332
Servicing advance liabilities	—		132,664		650,565		—			783,229
Warehouse borrowings	—		1,203,355		—		—			1,203,355
Servicing rights related liabilities at fair value	—		1,902		—		—			1,902
Corporate debt	2,129,000		—		—		—			2,129,000
Mortgage-backed debt	—		—		943,956		—			943,956
HMBS related obligations at fair value	—		10,509,449		—		—			10,509,449
Liabilities held for sale	—		1,179		1,223		—			2,402
Obligation to fund Non-Guarantor VIEs	—		46,417		—		(46,417		)	—
Due to affiliates, net	—		392,812		185		(392,997		)	—
Total liabilities	2,182,337		13,142,180		1,601,403		(447,284		)	16,478,636

Stockholders' equity:
Total stockholders' equity	280,260		1,820,726		131,459		(1,952,185		)	280,260
Total liabilities and stockholders' equity	$	2,462,597	$	14,962,906	$	1,732,862	$	(2,399,469	)	$	16,758,896



Condensed Consolidating Balance Sheet
December 31, 2015
(in thousands)

	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries and VIEs		Eliminations and Reclassifications			Consolidated
ASSETS
Cash and cash equivalents	$	4,016	$	196,812	$	2,000	$	—		$	202,828
Restricted cash and cash equivalents	10,512		639,151		58,436		—			708,099
Residential loans at amortized cost, net	14,130		26,713		500,563		—			541,406
Residential loans at fair value	—		12,147,423		526,016		—			12,673,439
Receivables, net	11,465		108,227		17,498		—			137,190
Servicer and protective advances, net	—		514,213		1,082,405		34,447			1,631,065
Servicing rights, net	—		1,788,576		—		—			1,788,576
Goodwill	—		367,911		—		—			367,911
Intangible assets, net	—		78,523		5,515		—			84,038
Premises and equipment, net	1,559		104,922		—		—			106,481
Deferred tax assets, net	—		132,687		—		(24,637		)	108,050
Other assets	37,724		150,470		12,170		—			200,364
Due from affiliates, net	674,139		—		—		(674,139		)	—
Investments in consolidated subsidiaries and VIEs	2,278,009		54,810		—		(2,332,819		)	—
Total assets	$	3,031,554	$	16,310,438	$	2,204,603	$	(2,997,148	)	$	18,549,447

LIABILITIES AND STOCKHOLDERS' EQUITY
Payables and accrued liabilities	$	43,778	$	554,710	$	5,206	$	(5,768	)	$	597,926
Servicer payables	—		603,692		—		—			603,692
Servicing advance liabilities	—		236,511		992,769		—			1,229,280
Warehouse borrowings	—		1,340,388		—		—			1,340,388
Servicing rights related liabilities at fair value	—		117,000		—		—			117,000
Corporate debt	2,156,944		480		—		—			2,157,424
Mortgage-backed debt	—		—		1,051,679		—			1,051,679
HMBS related obligations at fair value	—		10,647,382		—		—			10,647,382
Deferred tax liability, net	26,156		—		1,746		(27,902		)	—
Obligation to fund Non-Guarantor VIEs	—		36,048		—		(36,048		)	—
Due to affiliates, net	—		579,715		94,423		(674,138		)	—
Total liabilities	2,226,878		14,115,926		2,145,823		(743,856		)	17,744,771

Stockholders' equity:
Total stockholders' equity	804,676		2,194,512		58,780		(2,253,292		)	804,676
Total liabilities and stockholders' equity	$	3,031,554	$	16,310,438	$	2,204,603	$	(2,997,148	)	$	18,549,447



Condensed Consolidating Statement of Comprehensive Income (Loss)
For the Year Ended December 31, 2016
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs			Eliminations and Reclassifications			Consolidated
REVENUES
Net servicing revenue and fees	$	—		$	349,822		$	—		$	(8,831	)	$	340,991
Net gains on sales of loans	—			409,448			—			—			409,448
Net fair value gains (losses) on reverse loans and related HMBS obligations	—			59,422			(400		)	—			59,022
Interest income on loans	1,082			504			44,114			—			45,700
Insurance revenue	—			38,588			4,141			(761		)	41,968
Other revenues	(1,914		)	102,453			68,117			(70,068		)	98,588
Total revenues	(832		)	960,237			115,972			(79,660		)	995,717

EXPENSES
General and administrative	67,583			608,067			14,670			(70,548		)	619,772
Salaries and benefits	60,119			460,238			—			—			520,357
Goodwill and intangible assets impairment	—			326,286			—			—			326,286
Interest expense	144,170			49,769			63,929			(2,087		)	255,781
Depreciation and amortization	783			57,946			697			—			59,426
Corporate allocations	(119,953		)	119,953			—			—			—
Other expenses, net	621			4,434			5,475			—			10,530
Total expenses	153,323			1,626,693			84,771			(72,635		)	1,792,152

OTHER GAINS (LOSSES)
Net gains on extinguishment	14,662			—			—			—			14,662
Other net fair value losses	—			(805		)	(3,429		)	—			(4,234		)
Other	(979		)	(2,832		)	—			—			(3,811		)
Total other gains (losses)	13,683			(3,637		)	(3,429		)	—			6,617

Income (loss) before income taxes	(140,472		)	(670,093		)	27,772			(7,025		)	(789,818		)
Income tax expense (benefit)	(32,534		)	(231,170		)	5,746			(2,702		)	(260,660		)
Income (loss) before equity in earnings (losses) of consolidated subsidiaries and VIEs	(107,938		)	(438,923		)	22,026			(4,323		)	(529,158		)
Equity in earnings (losses) of consolidated subsidiaries and VIEs	(421,220		)	15,130			—			406,090			—
Net income (loss)	$	(529,158	)	$	(423,793	)	$	22,026		$	401,767		$	(529,158	)

Comprehensive income (loss)	$	(529,038	)	$	(423,793	)	$	22,026		$	401,767		$	(529,038	)



Condensed Consolidating Statement of Comprehensive Income (Loss)
For the Year Ended December 31, 2015
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs		Eliminations and Reclassifications			Consolidated
REVENUES
Net servicing revenue and fees	$	—		$	506,154		$	66	$	(11,953	)	$	494,267
Net gains on sales of loans	—			453,840			—		—			453,840
Net fair value gains on reverse loans and related HMBS obligations	—			98,265			—		—			98,265
Interest income on loans	1,165			280			72,920		—			74,365
Insurance revenue	—			43,232			4,794		(825		)	47,201
Other revenues	3,563			105,399			55,130		(57,771		)	106,321
Total revenues	4,728			1,207,170			132,910		(70,549		)	1,274,259

EXPENSES
General and administrative	35,654			573,457			23,085		(58,105		)	574,091
Salaries and benefits	28,510			548,229			78		—			576,817
Goodwill impairment	—			207,557			—		—			207,557
Interest expense	147,752			46,920			81,756		(2,822		)	273,606
Depreciation and amortization	129			68,259			740		—			69,128
Corporate allocations	(54,452		)	54,452			—		—			—
Other expenses, net	(488		)	4,981			6,064		—			10,557
Total expenses	157,105			1,503,855			111,723		(60,927		)	1,711,756

OTHER GAINS
Net gains on extinguishment	4,660			—			—		—			4,660
Other net fair value gains	—			122			7,276		—			7,398
Other	12,076			8,937			—		—			21,013
Total other gains	16,736			9,059			7,276		—			33,071

Income (loss) before income taxes	(135,641		)	(287,626		)	28,463		(9,622		)	(404,426		)
Income tax expense (benefit)	(53,546		)	(87,869		)	3,761		(3,582		)	(141,236		)
Income (loss) before equity in earnings (losses) of consolidated subsidiaries and VIEs	(82,095		)	(199,757		)	24,702		(6,040		)	(263,190		)
Equity in earnings (losses) of consolidated subsidiaries and VIEs	(181,095		)	9,571			—		171,524			—
Net income (loss)	$	(263,190	)	$	(190,186	)	$	24,702	$	165,484		$	(263,190	)

Comprehensive income (loss)	$	(262,772	)	$	(190,071	)	$	24,702	$	165,369		$	(262,772	)



Condensed Consolidating Statement of Comprehensive Income (Loss)
For the Year Ended December 31, 2014
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs		Eliminations and Reclassifications			Consolidated
REVENUES
Net servicing revenue and fees	$	—		$	619,152		$	185	$	(17,827	)	$	601,510
Net gains on sales of loans	—			462,172			—		—			462,172
Net fair value gains on reverse loans and related HMBS obligations	—			109,972			—		—			109,972
Interest income on loans	1,007			587			132,961		—			134,555
Insurance revenue	—			66,051			5,854		(895		)	71,010
Other revenues	1,456			106,041			20,253		(19,816		)	107,934
Total revenues	2,463			1,363,975			159,253		(38,538		)	1,487,153

EXPENSES
General and administrative	32,198			597,331			30,221		(82,244		)	577,506
Salaries and benefits	19,311			559,316			—		—			578,627
Goodwill impairment	—			82,269			—		—			82,269
Interest expense	147,633			72,203			83,379		(112		)	303,103
Depreciation and amortization	120			71,815			786		—			72,721
Corporate allocations	(46,764		)	46,764			—		—			—
Other expenses, net	1,598			2,542			6,663		—			10,803
Total expenses	154,096			1,432,240			121,049		(82,356		)	1,625,029

OTHER GAINS (LOSSES)
Other net fair value gains (losses)	(54		)	(792		)	20,126		—			19,280
Other	—			(744		)	—		—			(744		)
Total other gains (losses)	(54		)	(1,536		)	20,126		—			18,536

Income (loss) before income taxes	(151,687		)	(69,801		)	58,330		43,818			(119,340		)
Income tax expense (benefit)	(49,405		)	17,220			5,665		17,508			(9,012		)
Income (loss) before equity in earnings (loss) of consolidated subsidiaries and VIEs	(102,282		)	(87,021		)	52,665		26,310			(110,328		)
Equity in earnings (losses) of consolidated subsidiaries and VIEs	(8,046		)	21,238			—		(13,192		)	—
Net income (loss)	$	(110,328	)	$	(65,783	)	$	52,665	$	13,118		$	(110,328	)

Comprehensive income (loss)	$	(110,431	)	$	(65,702	)	$	52,435	$	13,267		$	(110,431	)



Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2016
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs			Eliminations and Reclassifications			Consolidated
Cash flows provided by (used in) operating activities	$	(204,359	)	$	203,585		$	452,724		$	—		$	451,950

Investing activities
Purchases and originations of reverse loans held for investment	—			(896,879		)	—			—			(896,879		)
Principal payments received on reverse loans held for investment	—			1,122,267			—			—			1,122,267
Principal payments received on mortgage loans held for investment	940			—			91,679			—			92,619
Payments received on charged-off loans held for investment	—			23,060			—			—			23,060
Payments received on receivables related to Non-Residual Trusts	—			—			8,110			—			8,110
Proceeds from sales of real estate owned, net	30			107,347			3,714			—			111,091
Purchases of premises and equipment	(595		)	(32,271		)	—			—			(32,866		)
Decrease in restricted cash and cash equivalents	9,011			(114		)	49			—			8,946
Payments for acquisitions of businesses, net of cash acquired	—			(3,066		)	—			—			(3,066		)
Acquisitions of servicing rights, net	—			(9,794		)	—			—			(9,794		)
Proceeds from sales of servicing rights, net	—			280,970			—			—			280,970
Capital contributions to subsidiaries and VIEs	—			(26,440		)	—			26,440			—
Returns of capital from subsidiaries and VIEs	10,991			33,233			—			(44,224		)	—
Change in due from affiliates	126,883			2,372			(5,899		)	(123,356		)	—
Other	309			(4,958		)	—			—			(4,649		)
Cash flows provided by (used in) investing activities	147,569			595,727			97,653			(141,140		)	699,809

Financing activities
Payments on corporate debt	—			(480		)	—			—			(480		)
Extinguishments and settlement of debt	(31,037		)	—			—			—			(31,037		)
Proceeds from securitizations of reverse loans	—			960,157			—			—			960,157
Payments on HMBS related obligations	—			(1,371,375		)	—			—			(1,371,375		)
Issuances of servicing advance liabilities	—			228,059			1,951,429			—			2,179,488
Payments on servicing advance liabilities	—			(331,376		)	(2,294,100		)	—			(2,625,476		)
Net change in warehouse borrowings related to mortgage loans	—			(151,172		)	—			—			(151,172		)
Net change in warehouse borrowings related to reverse loans	—			14,139			—			—			14,139
Proceeds from sales of excess servicing spreads and servicing rights	—			34,307			—			—			34,307
Payments on servicing rights related liabilities	—			(22,092		)	—			—			(22,092		)
Payments on mortgage-backed debt	—			—			(107,598		)	—			(107,598		)
Other debt issuance costs paid	(528		)	(7,206		)	(3,305		)	—			(11,039		)
Capital contributions	—			—			26,440			(26,440		)	—
Capital distributions	—			(5,430		)	(38,794		)	44,224			—
Change in due to affiliates	85,801			(121,164		)	(87,993		)	123,356			—
Other	(689		)	(666		)	3,544			—			2,189
Cash flows provided by (used in) financing activities	53,547			(774,299		)	(550,377		)	141,140			(1,129,989		)

Net increase (decrease) in cash and cash equivalents	(3,243		)	25,013			—			—			21,770
Cash and cash equivalents at the beginning of the year	4,016			196,812			2,000			—			202,828
Cash and cash equivalents at the end of the year	$	773		$	221,825		$	2,000		$	—		$	224,598



Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2015
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs			Eliminations and Reclassifications			Consolidated
Cash flows provided by (used in) operating activities	$	(107,969	)	$	(129,281	)	$	189,157		$	—		$	(48,093	)

Investing activities
Purchases and originations of reverse loans held for investment	—			(1,471,275		)	—			—			(1,471,275		)
Principal payments received on reverse loans held for investment	—			871,832			—			—			871,832
Principal payments received on mortgage loans held for investment	828			—			114,078			—			114,906
Payments received on charged-off loans held for investment	—			26,385			—			—			26,385
Payments received on receivables related to Non-Residual Trusts	—			—			7,481			—			7,481
Proceeds from sales of real estate owned, net	118			69,307			7,278			—			76,703
Purchases of premises and equipment	(175		)	(27,586		)	—			—			(27,761		)
Decrease (increase) in restricted cash and cash equivalents	(6		)	824			8,401			—			9,219
Payments for acquisitions of businesses, net of cash acquired	—			(5,095		)	—			—			(5,095		)
Acquisitions of servicing rights, net	—			(264,743		)	—			—			(264,743		)
Proceeds from sale of residual interests in Residual Trusts	189,513			—			—			—			189,513
Proceeds from sale of investment	14,376			—			—			—			14,376
Capital contributions to subsidiaries and VIEs	(9,072		)	(37,285		)	—			46,357			—
Returns of capital from subsidiaries and VIEs	27,309			24,107			—			(51,416		)	—
Change in due from affiliates	(8,331		)	11,809			1,388			(4,866		)	—
Other	2,656			855			—			—			3,511
Cash flows provided by (used in) investing activities	217,216			(800,865		)	138,626			(9,925		)	(454,948		)

Financing activities
Payments on corporate debt	(11,250		)	(1,651		)	—			—			(12,901		)
Extinguishments and settlement of debt	(79,877		)	—			—			—			(79,877		)
Proceeds from securitizations of reverse loans	—			1,622,481			—			—			1,622,481
Payments on HMBS related obligations	—			(1,025,458		)	—			—			(1,025,458		)
Issuances of servicing advance liabilities	—			283,953			1,789,274			—			2,073,227
Payments on servicing advance liabilities	—			(253,070		)	(1,953,895		)	—			(2,206,965		)
Net change in warehouse borrowings related to mortgage loans	—			207,305			—			—			207,305
Net change in warehouse borrowings related to reverse loans	—			(43,873		)	—			—			(43,873		)
Proceeds from sales of excess servicing spreads and servicing rights	—			55,698			—			—			55,698
Payments on servicing rights related liabilities	—			(12,317		)	—			—			(12,317		)
Payments on mortgage-backed debt	—			—			(136,493		)	—			(136,493		)
Other debt issuance costs paid	—			(8,320		)	(5,629		)	—			(13,949		)
Repurchase of shares under stock repurchase plan	(28,065		)	—			—			—			(28,065		)
Capital contributions	—			9,072			37,285			(46,357		)	—
Capital distributions	—			(13,006		)	(38,410		)	51,416			—
Change in due to affiliates	11,553			5,893			(22,312		)	4,866			—
Other	(754		)	(11,559		)	(806		)	—			(13,119		)
Cash flows provided by (used in) financing activities	(108,393		)	815,148			(330,986		)	9,925			385,694

Net increase (decrease) in cash and cash equivalents	854			(114,998		)	(3,203		)	—			(117,347		)
Cash and cash equivalents at the beginning of the year	3,162			311,810			5,203			—			320,175
Cash and cash equivalents at the end of the year	$	4,016		$	196,812		$	2,000		$	—		$	202,828



Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2014
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs			Eliminations and Reclassifications			Consolidated
Cash flows provided by (used in) operating activities	$	(74,452	)	$	1,005,449		$	(1,137,754	)	$	2,487		$	(204,270	)

Investing activities
Purchases and originations of reverse loans held for investment	—			(1,505,215		)	—			—			(1,505,215		)
Principal payments received on reverse loans held for investment	—			548,660			—			—			548,660
Principal payments received on mortgage loans held for investment	535			399			161,323			—			162,257
Payments received on charged-off loans held for investment	—			14,929			—			—			14,929
Payments received on receivables related to Non-Residual Trusts	—			—			9,471			—			9,471
Proceeds from sales of real estate owned, net	227			39,452			15,627			—			55,306
Purchases of premises and equipment	—			(21,573		)	—			—			(21,573		)
Decrease in restricted cash and cash equivalents	4,246			3,723			3,364			—			11,333
Payments for acquisitions of businesses, net of cash acquired	—			(197,061		)	—			—			(197,061		)
Acquisitions of servicing rights, net	—			(268,618		)	—			—			(268,618		)
Acquisitions of charged-off loans held for investment	—			(64,548		)	—			—			(64,548		)
Capital contributions to subsidiaries and VIEs	(83,544		)	(131		)	—			83,675			—
Returns of capital from subsidiaries and VIEs	76,214			28,085			—			(104,299		)	—
Change in due from affiliates	88,360			214,613			250,108			(553,081		)	—
Other	(2,283		)	13,231			—			—			10,948
Cash flows provided by (used in) investing activities	83,755			(1,194,054		)	439,893			(573,705		)	(1,244,111		)

Financing activities
Payments on corporate debt	(15,000		)	(2,220		)	—			—			(17,220		)
Proceeds from securitizations of reverse loans	—			1,617,399			—			—			1,617,399
Payments on HMBS related obligations	—			(637,272		)	—			—			(637,272		)
Issuances of servicing advance liabilities	—			874,729			1,425,201			—			2,299,930
Payments on servicing advance liabilities	—			(1,572,482		)	(332,849		)	—			(1,905,331		)
Net change in warehouse borrowings related to mortgage loans	—			75,726			—			—			75,726
Net change in warehouse borrowings related to reverse loans	—			15,667			—			—			15,667
Proceeds from sales of excess servicing spreads and servicing rights	—			75,426			—			—			75,426
Payments on servicing rights related liabilities	—			(6,822		)	—			—			(6,822		)
Payments on mortgage-backed debt	—			—			(181,155		)	—			(181,155		)
Other debt issuance costs paid	—			(17,264		)	(17		)	—			(17,281		)
Capital contributions	—			83,544			131			(83,675		)	—
Capital distributions	—			(24,874		)	(79,425		)	104,299			—
Change in due to affiliates	(98,071		)	(329,277		)	(123,246		)	550,594			—
Other	6,921			(40,509		)	(8,808		)	—			(42,396		)
Cash flows provided by (used in) financing activities	(106,150		)	111,771			699,832			571,218			1,276,671

Net increase (decrease) in cash and cash equivalents	(96,847		)	(76,834		)	1,971			—			(171,710		)
Cash and cash equivalents at the beginning of the year	100,009			388,644			3,232			—			491,885
Cash and cash equivalents at the end of the year	$	3,162		$	311,810		$	5,203		$	—		$	320,175