Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Tax Characterization of Distributions

The approximate tax characterization of the Company’s distributions is as follows:

Year ended December 31,	Ordinary income			Long term capital gain			Return of capital
2016		60	%		40	%		0	%
2015		41	%		25	%		34	%
2014		86	%		14	%		0	%

Summary of Company's Income Tax Benefit

The following table details the Company’s income tax benefit which relates primarily to the TRSs for the years presented:

		Year ended December 31,
		2016			2015			2014
	(in thousands)
Current expense:
Federal		$	361		$	671		$	352
State			81			204			104
Total current expense			442			875			456
Deferred benefit:
Federal			(8,790	)		(13,124	)		(10,232	)
State			(5,699	)		(4,547	)		(5,304	)
Total deferred benefit			(14,489	)		(17,671	)		(15,536	)
Total benefit from income taxes		$	(14,047	)	$	(16,796	)	$	(15,080	)

Reconciliation of Company's Provision for Income Taxes

The following table is a reconciliation of the Company’s provision for income taxes at statutory rates to the provision for income taxes at the Company’s effective rate for the years presented:

		Year ended December 31,
		2016						2015						2014
		Amount			Rate			Amount			Rate			Amount			Rate
	(in thousands)
Federal income tax expense at statutory tax rate		$	21,617			35.0	%	$	25,656			35.0	%	$	62,812			35.0	%
Effect of non-taxable REIT income			(32,501	)		(52.6	)%		(40,366	)		(55.1	)%		(74,480	)		(41.5	)%
State income taxes, net of federal benefit			(3,652	)		(5.9	)%		(2,823	)		(3.9	)%		(3,380	)		(1.9	)%
Other			489			0.8	%		737			1.1	%		(32	)		0	%
Valuation allowance			—			0	%		—			0	%		—			0	%
Benefit from income taxes		$	(14,047	)		(22.7	)%	$	(16,796	)		(22.9	)%	$	(15,080	)		(8.4	)%

Components of Provision for Deferred Income Taxes

The Company’s components of the provision for deferred income taxes are as follows:

		Year ended December 31,
		2016			2015			2014
	(in thousands)
Real estate valuation loss		$	2,732		$	(1,577	)	$	(5,079	)
Mortgage servicing rights			10,597			(31,324	)		27,996
Net operating loss carryforward			(19,863	)		33,297			(35,963	)
Liability for losses under representations and warranties			2,222			(2,467	)		(5,944	)
Excess interest expense disallowance			(8,721	)		(15,384	)		—
Other			(1,456	)		(216	)		3,454
Valuation allowance			—			—			—
Total (benefit) provision for deferred income taxes		$	(14,489	)	$	(17,671	)	$	(15,536	)

Components of Income Taxes Payable

The components of income taxes payable are as follows:

	December 31, 2016			December 31, 2015
	(in thousands)
Taxes currently receivable		2,519			1,669
Deferred income taxes payable	$	(20,685	)	$	(35,174	)
Income taxes payable	$	(18,166	)	$	(33,505	)

Summary of Deferred Income Tax Assets and Liabilities

The tax effects of temporary differences that gave rise to deferred income tax assets and liabilities are presented below:

	December 31, 2016			December 31, 2015
	(in thousands)
Deferred income tax assets:
REO valuation loss	$	9,542		$	12,274
Net operating loss carryforward		60,435			40,572
Liability for losses under representations and warranties		6,189			8,411
Excess interest expense disallowance		24,105			15,384
Other		1,882			426
Gross deferred tax assets		102,153			77,067
Deferred income tax liabilities:
Mortgage servicing rights		(122,838	)		(112,241	)
Other		—			—
Gross deferred tax liabilities		(122,838	)		(112,241	)
Net deferred income tax liability	$	(20,685	)	$	(35,174	)