Payables and Accrued Liabilities

Payables and accrued liabilities consist of the following (in thousands):



	March 31, 2017		December 31, 2016
Loans subject to repurchase from Ginnie Mae ⁽¹⁾	$	206,393	$	184,289
Accounts payable and accrued liabilities	154,712		155,556
Curtailment liability	119,413		121,305
Originations liability	48,843		62,969
Employee-related liabilities	38,444		91,063
Accrued interest payable	22,291		9,414
Servicing rights and related advance purchases payable	16,588		18,187
Derivative instruments	14,271		11,804
Uncertain tax positions ⁽²⁾	6,960		9,414
Payables to insurance carriers	4,938		5,452
Margin payable on derivative instruments	2,239		30,941
Other	64,649		58,617
Total payables and accrued liabilities	$	699,741	$	759,011

__________

(1)

For certain mortgage loans that the Company has pooled and securitized with Ginnie Mae, the Company as the issuer has the unilateral right to repurchase, without Ginnie Mae’s prior authorization, any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. As a result of this unilateral right, the Company must recognize the delinquent loan on its consolidated balance sheets when the loan becomes 90 days delinquent and establish a corresponding liability regardless of the Company’s intention to repurchase the loan.


(2)	Included in the uncertain tax position at December 31, 2016 is $2.5 million related to the sale of insurance business as described in Note 1. In connection with the closing of the sale on February 1, 2017, the uncertain tax position related to the insurance business was reversed.

Costs Associated with Exit Activities

During 2015, the Company took distinct actions to improve efficiencies within the organization, which included re-branding its mortgage business by consolidating Ditech Mortgage Corp and Green Tree Servicing into one legal entity with one brand. Additionally, the Company took measures to restructure its mortgage loan servicing operations and improve the profitability of the reverse mortgage business by streamlining its geographic footprint and strengthening its retail originations channel. These actions resulted in costs relating to the closing of offices and the termination of certain employees, as well as other expenses to institute efficiencies. The Company completed these activities in the fourth quarter of 2015. Furthermore, the Company made the decision during the fourth quarter of 2015 to exit the consumer retail channel of the Originations segment. The actions to improve efficiencies, re-brand the mortgage business, restructure the servicing operations and exit from the consumer retail channel are collectively referred to as the 2015 Actions herein.

In addition, during 2016, the Company initiated actions in connection with its continued efforts to enhance efficiencies and streamline processes, which included various organizational changes to the scale and proficiency of the Company's leadership team and support functions to further align with the Company's business needs. Further, effective January 2017, the Company exited the reverse mortgage originations business, while maintaining its reverse mortgage servicing operations. These actions resulted in costs relating to the termination of certain employees and closing of offices. These actions are collectively referred to as the 2016 Actions herein.

The Company continues with the transformation of the business during 2017 in an effort to optimize the workforce, processes and functional locations of its businesses as it seeks to achieve sustainable growth. Accordingly, the Company has incurred and will continue to incur costs, including severance and related costs, office closures, and other costs in connection with its transformation efforts during 2017. The actions that have been and will be taken in connection with these efforts are collectively referred to as the 2017 Actions herein.

The costs resulting from the 2015 Actions, 2016 Actions and 2017 Actions are recorded in salaries and benefits and general and administrative expenses on the Company's consolidated statements of comprehensive income (loss).

The following table presents the current period activity in the accrued exit liability resulting from each of the 2015 Actions, 2016 Actions and 2017 Actions described above, which is included in payables and accrued liabilities on the consolidated balance sheets, and the related charges and cash payments and other settlements associated with these actions (in thousands):



	For the Three Months Ended March 31, 2017
	2015 Actions			2016 Actions			2017 Actions			Total
Balance at January 1, 2017	$	988		$	11,878		$	—		$	12,866
Charges
Severance and related costs ⁽¹⁾	(57		)	(344		)	1,457			1,056
Office closures and other costs	10			5			800			815
Total charges	(47		)	(339		)	2,257			1,871
Cash payments or other settlements
Severance and related costs	(54		)	(9,191		)	(601		)	(9,846		)
Office closures and other costs	(163		)	(177		)	(5		)	(345		)
Total cash payments or other settlements	(217		)	(9,368		)	(606		)	(10,191		)
Balance at March 31, 2017	$	724		$	2,171		$	1,651		$	4,546

Cumulative charges incurred
Severance and related costs	7,181			19,424			1,457			28,062
Office closures and other costs	6,545			3,783			800			11,128
Total cumulative charges incurred	$	13,726		$	23,207		$	2,257		$	39,190

Total expected costs to be incurred ⁽²⁾	$	13,726		$	23,207		$	7,378		$	44,311

__________


(1)	Includes adjustments to prior year accruals resulting from changes to previous estimates.


(2)	Total expected costs for the 2017 Actions are based on actions as set forth in the 2017 operating plan. These expected costs could change based on additional actions as determined by management throughout the year.

The following table presents the current period activity for each of the 2015 Actions, 2016 Actions, and 2017 Actions described above by reportable segment (in thousands):



	For the Three Months Ended March 31, 2017
	Servicing			Originations			Reverse Mortgage			Other			Total Consolidated
Balance at January 1, 2017
2015 Actions	$	453		$	260		$	275		$	—		$	988
2016 Actions	4,323			1,023			2,222			4,310			11,878
2017 Actions	—			—			—			—			—
Total balance at January 1, 2017	4,776			1,283			2,497			4,310			12,866
Charges
2015 Actions⁽¹⁾	(57		)	7			3			—			(47		)
2016 Actions⁽¹⁾	(56		)	(80		)	(140		)	(63		)	(339		)
2017 Actions	936			506			815			—			2,257
Total charges	823			433			678			(63		)	1,871
Cash payments or other settlements
2015 Actions	(66		)	(47		)	(104		)	—			(217		)
2016 Actions	(3,046		)	(872		)	(1,796		)	(3,654		)	(9,368		)
2017 Actions	(439		)	(162		)	(5		)	—			(606		)
Total cash payments or other settlements	(3,551		)	(1,081		)	(1,905		)	(3,654		)	(10,191		)
Balance at March 31, 2017
2015 Actions	330			220			174			—			724
2016 Actions	1,221			71			286			593			2,171
2017 Actions	497			344			810			—			1,651
Total balance at March 31, 2017	$	2,048		$	635		$	1,270		$	593		$	4,546

Total cumulative charges incurred
2015 Actions	$	6,424		$	4,597		$	1,854		$	851		$	13,726
2016 Actions	11,546			1,056			5,086			5,519			23,207
2017 Actions	936			506			815			—			2,257
Total cumulative charges incurred	$	18,906		$	6,159		$	7,755		$	6,370		$	39,190

Total expected costs to be incurred
2015 Actions	$	6,424		$	4,597		$	1,854		$	851		$	13,726
2016 Actions	11,546			1,056			5,086			5,519			23,207
2017 Actions ⁽²⁾	4,168			536			1,798			876			7,378
Total expected costs to be incurred	$	22,138		$	6,189		$	8,738		$	7,246		$	44,311

__________


(1)	Includes adjustments to prior year accruals resulting from changes to previous estimates.


(2)	Total expected costs for the 2017 Actions are based on actions as set forth in the 2017 operating plan. These expected costs could change based on additional actions as determined by management throughout the year.