Accounts Payable and Accrued Expenses

6 Months Ended

Jun. 30, 2013

Accounts Payable and Accrued Expenses

Accounts Payable and Accrued Expenses

8.  Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of:

	June 30,		December 31,
	2013		2012
	(In millions)
Accounts payable	$	330	331
Subservicing advance liabilities(1)	242		24
Repurchase eligible loans	88		99
Accrued payroll and benefits	70		80
Accrued interest	30		32
Other	22		20
Total	$	782	$	586

(1)             Amounts were reclassified from prior presentation in Other liabilities.

The Company is required under most of our mortgage servicing agreements to advance our own funds to meet contractual principal and interest payments for certain investors and to pay taxes, insurance, foreclosure costs and various other items that are required to preserve the assets being serviced. Servicing advance receivables are reduced by the collection of principal and interest or escrow payments from the respective borrowers, or upon foreclosure or liquidation.  Amounts advanced as the servicer and subservicer of mortgage loans are recorded within Accounts receivable in the accompanying Condensed Consolidated Balance Sheets.

Under the terms of certain subservicing arrangements, the Company has required the subservicing counterparty to fund servicing advances for their respective portfolios of subserviced loans.  A subservicing advance liability is recorded for cash received from the counterparty to fund advances, and is repaid to the counterparty upon the collection of the mortgage servicing advance receivables.  Amounts received from counterparties to fund subservicing advances are recorded within Accounts payable and accrued expenses in the accompanying Condensed Consolidated Balance Sheets.

During the three months ended June 30, 2013, the Company assumed the role of subservicer for a mortgage loan portfolio.   As of June 30, 2013, the subservicing portfolio that was assumed had an unpaid principal balance of $46.8 billion and related balances of servicing advance receivables and liabilities of $223 million and $219 million, respectively.