Variable Interest Entities (Tables)

12 Months Ended

Dec. 31, 2016

Variable Interest Entity, Primary Beneficiary [Member]

Summary of Carrying Amounts of Assets and Liabilities in VIEs

Included in the tables below are summaries of the carrying amounts of the assets and liabilities of consolidated VIEs (in thousands):



	December 31, 2016
	Residual Trusts		Non-Residual Trusts		Servicer and Protective Advance Financing Facilities		Revolving Credit Facilities-Related VIEs		Total
Assets
Restricted cash and cash equivalents	$	13,321	$	10,257	$	22,265	$	—	$	45,843
Residential loans at amortized cost, net	462,877		—		—		—		462,877
Residential loans at fair value	—		450,377		—		42,122		492,499
Receivables, net	—		15,033		—		765		15,798
Servicer and protective advances, net	—		—		734,707		—		734,707
Other assets	10,028		1,028		1,440		7,335		19,831
Total assets	$	486,226	$	476,695	$	758,412	$	50,222	$	1,771,555

Liabilities
Payables and accrued liabilities	$	2,140	$	—	$	845	$	—	$	2,985
Servicing advance liabilities	—		—		650,565		—		650,565
Mortgage-backed debt	429,931		514,025		—		—		943,956
Total liabilities	$	432,071	$	514,025	$	651,410	$	—	$	1,597,506



	December 31, 2015
	Residual Trusts		Non-Residual Trusts		Servicer and Protective Advance Financing Facilities		Total
Assets
Restricted cash and cash equivalents	$	13,369	$	11,388	$	34,948	$	59,705
Residential loans at amortized cost, net	500,563		—		—		500,563
Residential loans at fair value	—		526,016		—		526,016
Receivables, net	—		16,542		—		16,542
Servicer and protective advances, net	—		—		1,136,246		1,136,246
Other assets	9,357		558		2,255		12,170
Total assets	$	523,289	$	554,504	$	1,173,449	$	2,251,242

Liabilities
Payables and accrued liabilities	$	2,084	$	—	$	1,351	$	3,435
Servicing advance liabilities	—		—		992,769		992,769
Mortgage-backed debt	469,339		582,340		—		1,051,679
Total liabilities	$	471,423	$	582,340	$	994,120	$	2,047,883

Variable Interest Entity, Not Primary Beneficiary [Member]

Summary of Carrying Amounts of Assets and Liabilities in VIEs

The following table presents the carrying amounts of the Company’s assets and liabilities that relate to its variable interests in the VIEs that are not consolidated, as well as its maximum exposure to loss and the size of the unconsolidated VIEs (in thousands):



	Carrying Value of Assets Recorded on the Consolidated Balance Sheets										Size of VIEs ⁽²⁾
Type of Involvement	Servicing Rights, Net		Servicer and Protective Advances, Net		Receivables, Net		Net Assets		Maximum Exposure to Loss ⁽¹⁾		Size of VIEs ⁽²⁾
VIEs associated with servicing arrangements
Servicing arrangements with a LOC reimbursement obligation
December 31, 2016	$	900	$	2,910	$	108	$	3,918	$	168,918	$	134,616
December 31, 2015	1,145		2,656		123		3,924		168,924		153,070
Other servicing arrangements
December 31, 2016	—		—		183		183		183		437,595
December 31, 2015	—		—		190		190		190		443,631

__________


(1)	The Company's maximum exposure to loss for VIEs equals the carrying value of assets recognized on the consolidated balance sheets, and in the case of arrangements with a LOC reimbursement obligation, also includes the obligation to reimburse a third party for the final $165.0 million drawn on LOCs discussed above.


(2)	The size of unconsolidated VIEs is represented by the unpaid principal balance of loans serviced for VIEs associated with servicing arrangements.

The following table presents the carrying amounts of the Company’s assets and liabilities that relate to WCO, as well as the size of the unconsolidated VIE (in thousands):



	Carrying Value of Assets and Liabilities Recorded on the Consolidated Balance Sheets
	Servicing Rights, Net ⁽¹⁾		Servicer and Protective Advances, Net		Receivables, Net		Other Assets ⁽²⁾		Payables and Accrued Liabilities			Servicing Rights Related Liabilities			Net Assets (Liabilities) ⁽³⁾			Size of VIE ⁽⁴⁾
December 31, 2016	$	—	$	6,980	$	1,392	$	19,403	$	(1,353	)	$	—		$	26,422		$	194,556
December 31, 2015	16,889		7,015		9,814		23,578		(4,500		)	(117,000		)	(64,204		)	228,361

__________


(1)	During the second quarter of 2016, the Company sold MSR, which did not qualify for sale accounting, to WCO for $27.9 million. Transactions between WCO and NRM during the fourth quarter of 2016 allowed the Company to derecognize the transferred assets on its consolidated balance sheets. Refer to Note 4 for additional information.


(2)	Other assets at December 31, 2016 and 2015 are primarily comprised of the Company's investment in WCO.


(3)	At December 31, 2015, the Company had no net exposure to loss as it relates to transactions with WCO as a result of its net liabilities due to WCO.


(4)	The size of the VIE is deemed to be WCO's net assets.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details