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INVESTMENTS IN SERVICER ADVANCES (Tables)
 12 Months Ended
Dec. 31, 2014
Investments, All Other Investments [Abstract]  
Summary of Investments in Servicer Advances
The following is a summary of the investments in servicer advances, including the right to the basic fee component of the related MSRs, made by New Residential:
 
Amortized Cost Basis
 
Carrying Value(A)
 
Weighted Average Discount Rate
 
Weighted Average Life (Years)(B)
 
Change in Fair Value Recorded in Other Income for Year then Ended
December 31, 2014
 
 
 
 
 
 
 
 
 
Servicer advances
$
3,186,622

 
$
3,270,839

 
5.4
%
 
4.0
 
$
84,217

December 31, 2013
 
 
 
 
 
 
 
 
 
Servicer advances
$
2,665,551

 
$
2,665,551

 
5.6
%
 
2.7
 
$
—


(A)
Carrying value represents the fair value of the investments in servicer advances, including the basic fee component of the related MSRs.
(B)
Weighted Average Life represents the weighted average expected timing of the receipt of expected net cash flows for this investment.
The following is additional information regarding the servicer advances and related financing:
 
 
 
 
 
 
 
 
 
Loan-to-Value
 
Cost of Funds(B)
 
UPB of Underlying Residential Mortgage Loans
 
Outstanding Servicer Advances
 
Servicer Advances to UPB of Underlying Residential Mortgage Loans
 
Carrying Value of Notes Payable
 
Gross
 
Net(A)
 
Gross
 
Net
December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicer advances(C)
$
96,547,773

 
$
3,102,492

 
3.2
%
 
$
2,890,230

 
91.4
%
 
90.4
%
 
3.0
%
 
2.3
%
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicer advances(C)
$
43,444,216

 
$
2,661,130

 
6.1
%
 
$
2,390,778

 
89.8
%
 
88.6
%
 
4.0
%
 
2.3
%

(A)
Ratio of face amount of borrowings to par amount of servicer advance collateral, net of an interest reserve maintained by the Buyer.
(B)
Annualized measure of the cost associated with borrowings. Gross Cost of Funds primarily includes interest expense and facility fees. Net Cost of Funds excludes facility fees.
(C)
The following types of advances comprise the investments in servicer advances:
    
 
December 31, 2014
 
December 31, 2013
Principal and interest advances
$
729,713

 
$
1,516,715

Escrow advances (taxes and insurance advances)
1,600,713

 
934,525

Foreclosure advances
772,066

 
209,890

  Total
$
3,102,492

 
$
2,661,130
Schedule of Interest Income Related to Investments in Servicer Advances
Interest income recognized by New Residential related to its investments in servicer advances was comprised of the following:
 
Year Ended December 31,
 
2014
 
2013
Interest income, gross of amounts attributable to servicer
   compensation
$
290,309

 
$
6,708

  Amounts attributable to base servicer compensation
(26,092
)
 
(2,287
)
  Amounts attributable to incentive servicer compensation
(74,011
)
 
—

Interest income from investments in servicer advances
$
190,206

 
$
4,421

Others' interests in the equity of the Buyer is computed as follows:
 
December 31, 2014
 
December 31, 2013
Total Advance Purchaser LLC equity
$
457,545

 
$
362,807

    Others' ownership interest
55.5
%
 
68.1
%
Others' interest in equity of consolidated subsidiary
$
253,836

 
$
247,225

Others' interests in the Buyer's net income is computed as follows:
 
Year Ended December 31,
 
2014
 
2013
Net Advance Purchaser LLC income (loss)
$
159,374

 
$
(517
)
    Others' ownership interest as a percent of total(A)
56.0
%
 
63.1
%
Others' interest in net income (loss) of consolidated subsidiaries
$
89,222

 
$
(326
)
(A)
As a result, New Residential owned 44.0% and 36.9% of the Buyer, on average during the years ended December 31, 2014 and 2013, respectively.