Related Party Transactions

6 Months Ended

Jun. 30, 2017

Related-Party Transactions

WCO was established to invest in mortgage-related assets. In November 2016, WCO entered into a series of agreements whereby it agreed to sell substantially all of its assets, including the sale of substantially all of its MSR portfolio to NRM. In connection with the December 2016 closing of the transactions relating thereto, WCO commenced liquidation activities and the Company does not expect to sell further assets to WCO.

The Company's investment in WCO was $8.0 million and $19.4 million at June 30, 2017 and December 31, 2016, respectively. The Company recorded income (losses) relating to its investment in WCO of less than $(0.1) million and $(0.5) million for the three months ended June 30, 2017 and 2016, respectively, and less than $0.1 million and $(1.0) million for the six months ended June 30, 2017 and 2016, respectively. Additionally, the Company received dividends of $11.5 million and $1.0 million from WCO during the six months ended June 30, 2017 and 2016, respectively.

The Company’s subsidiary, GTIM, earned fees for providing investment advisory and management services to WCO and administering its business activities and day-to-day operations of less than $0.1 million and $0.4 million for the three months ended June 30, 2017 and 2016, respectively, and $0.1 million and $0.8 million for the six months ended June 30, 2017 and 2016, respectively, which are recorded in other revenues on the consolidated statements of comprehensive loss. The Company had $0.1 million and $0.9 million included in receivables, net on the consolidated balance sheets at June 30, 2017 and December 31, 2016, respectively, relating to fees earned for the aforementioned investment advisory and management services provided to WCO, as well as pass-throughs to WCO related to general and administrative and payroll-related expenses.

WCO lacks sufficient equity at risk to finance its activities without subordinated financial support, and, as such, is a VIE. WCO’s board of directors have decision making authority as it relates to the activities that most significantly impact the economic performance of WCO, including making decisions related to significant investments, servicing, capital and debt financing. As a result, the Company is not deemed to be the primary beneficiary of WCO as it does not have the power to direct the activities that most significantly impact WCO’s economic performance.

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
	Servicer and Protective Advances, Net		Receivables, Net		Other Assets ⁽¹⁾		Payables and Accrued Liabilities			Net Assets		Size of VIE ⁽²⁾
June 30, 2017	$	5,275	$	107	$	7,953	$	—		$	13,335	$	24,871
December 31, 2016	6,980		1,392		19,403		(1,353		)	26,422		194,556

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(1)	Other assets at June 30, 2017 and December 31, 2016 are primarily comprised of the Company's investment in WCO.


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