Residential Loans at Fair Value

Residential Loans Held for Investment

Residential loans held for investment and carried at fair value include reverse loans, forward loans in Non-Residual Trusts and charged-off loans. The Company purchased and originated reverse loans in the amount of $393.0 million and $800.2 million during the three months ended June 30, 2014 and 2013, respectively. The Company purchased and originated reverse loans in the amount of $716.2 million and $1.9 billion during the six months ended June 30, 2014 and 2013, respectively. The Company purchased charged-off loans with an unpaid principal balance of $3.3 billion for $57.1 million during the three and six months ended June 30, 2014.

Residential Loans Held for Sale

The Company sells substantially all of its originated or purchased forward loans into the secondary market for securitization or to private investors as whole loans. The Company typically retains the right to service these loans. Refer to Note 5 for additional information regarding these sales of residential loans.

A reconciliation of the changes in residential loans held for sale is presented in the following table (in thousands):



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013
Balance at beginning of period	$	630,456		$	278,474		$	1,015,607		$	45,065
Purchases and originations of loans held for sale	4,453,761			4,848,332			8,037,309			5,281,349
Proceeds from sales of and payments on loans held for sale ⁽¹⁾	(4,045,058		)	(3,522,518		)	(8,104,759		)	(3,749,979		)
Realized gains on sales of loans ⁽²⁾	102,517			67,218			189,350			75,526
Change in unrealized gains (losses) on loans held for sale ⁽²⁾	23,353			(15,897		)	19,177			(2,271		)
Interest income ⁽²⁾	8,721			8,473			17,066			9,261
Transfers from loans held for investment	—			43			—			5,183
Other	(162		)	90			(162		)	81
Balance at end of period	$	1,173,588		$	1,664,215		$	1,173,588		$	1,664,215

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(1)	Excludes realized gains (losses) on freestanding derivatives.


(2)	Amount is a component of net gains on sales of loans on the consolidated statements of comprehensive income (loss). Refer to Note 6 for additional information.