Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income tax benefit consists of the following components (in thousands):



	For the Years Ended December 31,
	2016			2015			2014
Current
Federal	$	(69,204	)	$	46,331		$	25,417
State and local	1,870			8,759			979
Current income tax expense (benefit)	(67,334		)	55,090			26,396
Deferred
Federal	(153,598		)	(159,171		)	(33,788		)
State and local	(39,728		)	(37,155		)	(1,620		)
Deferred income tax benefit	(193,326		)	(196,326		)	(35,408		)
Total income tax benefit	$	(260,660	)	$	(141,236	)	$	(9,012	)

Schedule of Income Tax Benefit at Company's Effective Tax Rate Reconciliation

Income tax benefit at the Company’s effective tax rate differed from the statutory tax rate as follows (in thousands):



	For the Years Ended December 31,
	2016			2015			2014
Loss before income taxes	$	(789,818	)	$	(404,426	)	$	(119,340	)

Tax provision at statutory tax rate of 35%	(276,436		)	(141,549		)	(41,769		)
Effect of:
Valuation allowance	34,000			—			—
State and local income tax	(24,058		)	(16,979		)	(1,649		)
Goodwill impairment	—			19,789			28,794
Penalties	—			—			5,140
Other	5,834			(2,497		)	472
Total income tax benefit	$	(260,660	)	$	(141,236	)	$	(9,012	)

Schedule of Deferred Tax Assets and Liabilities

The following table summarizes the components of deferred tax assets and liabilities (in thousands):



	December 31,
	2016			2015
Deferred tax assets
Net operating losses	$	112,553		$	36,014
Goodwill	111,865			—
Reverse loans	64,899			46,906
Servicer and protective advances	49,301			37,751
Curtailment liability	44,461			36,086
Intangible assets	32,750			37,013
Accrued expenses	25,022			23,824
Mandatory call obligation	19,695			19,768
Accrued legal contingencies and settlements	13,184			10,284
Servicing rights related liabilities	—			45,063
Other	65,175			48,668
Total deferred tax assets	538,905			341,377
Valuation allowance	(41,499		)	(2,999		)
Total deferred tax assets, net of valuation allowance	497,406			338,378
Deferred tax liabilities
Servicing rights	(135,125		)	(151,163		)
Net investment in residential loans	(33,126		)	(34,967		)
Discount on Convertible Notes	(12,515		)	(19,743		)
Intangible assets	(3,797		)	(9,723		)
Goodwill	—			(1,498		)
Other	(12,917		)	(13,234		)
Total deferred tax liabilities	(197,480		)	(230,328		)
Deferred tax assets, net	$	299,926		$	108,050

Schedule of Activity in Valuation Allowance on Deferred Tax Assets

The following table summarizes the activity in the valuation allowance on deferred tax assets (in thousands):



	For the Years Ended December 31,
	2016		2015
Balance at beginning of year	$	2,999	$	3,096
Charges to income tax expense	38,500		—
Deductions	—		(97		)
Balance at end of year	$	41,499	$	2,999

Reconciliation of Liability for Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances of the total liability for unrecognized tax benefits is as follows (in thousands):



	For the Years Ended December 31,
	2016			2015			2014
Balance at the beginning of the year	$	58,148		$	8,705		$	12,523
Increases (reductions) related to prior year tax positions ⁽¹⁾	(52,230		)	33,858			(1,571		)
Increases related to current year tax positions	910			17,650			1,377
Reductions as a result of a lapse of the statute of limitations	(1,414		)	(2,065		)	(3,624		)
Balance at the end of the year	$	5,414		$	58,148		$	8,705

__________

(1)

During the year ended December 31, 2015, the Company determined that a tax accounting method as employed was not more likely than not to be realized, and therefore derecognized the tax position and recorded an offsetting deferred tax asset related to servicing rights. The Company filed for an accounting method change with the IRS during the first quarter of 2016 and, as a result, this uncertain tax position was reversed.