Discontinued Operations

9 Months Ended

Sep. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

In July 2013, the Company entered into an agreement to sell Urban, its reverse mortgage origination and securitization business that it acquired as a result of the Mergers, to an investor group. The transaction is expected to be completed in the fourth quarter of 2013. Completion of the sale is subject to certain customary conditions, including receipt of required regulatory approvals by GNMA, HUD, FNMA, and states and territories in which Urban operates and the absence of any law or order prohibiting the consummation of the sale of Urban. As a result, assets and liabilities related to Urban are classified as Assets within discontinued operations and Liabilities within discontinued operations on the Consolidated Statements of Financial Condition as of September 30, 2013 and the results of operations have been included in Loss from discontinued operations, net of tax within the Consolidated Statements of Operations for the three and nine months ended September 30, 2013.

The revenues and results of operations of discontinued operations are summarized as follows (in thousands):

	For the three and nine months   ended September 30,
	2013
Revenues	$	22,114
Expenses:
Compensation	$	8,379
Execution and clearance fees	2,840
Payments for order flow	5,286
Other expenses	6,873
Total Expenses	23,378
Pre-tax loss from discontinued operations	(1,264		)
Income tax benefit	480
Loss from discontinued operations, net of tax	$	(784	)

Assets and liabilities within discontinued operations are presented in the following table (in thousands):

	September 30, 2013
Assets within discontinued operations:
Cash and cash equivalents	$	15,702
Securitized HECM loan inventory	5,841,664
Loan inventory	177,674
Receivable from brokers, dealers and clearing organizations	37,411
Other assets	25,848
Total assets	$	6,098,299
Liabilities within discontinued operations:
Liability to GNMA trusts	5,803,859
Other secured financings	129,552
Payable to brokers, dealers and clearing organizations	8,538
Accrued compensation expense	4,717
Accrued expenses and other liabilities	59,358
Total liabilities	$	6,006,024

The operations and cash flows of Urban will be eliminated from the ongoing operations of the Company as a result of the pending sale. The Company will not have significant continuing involvement in the operations of Urban after the sale is completed.