3. Revenues

The following tables summarizes total net revenues disaggregated by source:



	Three Months Ended June 30, 2018
	Mortgage Servicing Segment					Mortgage Production Segment
	Subservicing		Owned Servicing			Portfolio Retention		Total Continuing Operations			Discontinued Operations
	(In millions)
Loan servicing income	$	26	$	18		$	—	$	44		$	—
Changes in fair value of MSRs and secured liability	—		(4		)	—		(4		)	—
Origination and other loan fees	—		—			1		1			—
Gain on loans held for sale, net	—		—			5		5			1
Net interest expense	—		(11		)	—		(11		)	—
Other income	—		—			—		—			1
Total net revenues ⁽¹⁾	$	26	$	3		$	6	$	35		$	2



	Six Months Ended June 30, 2018
	Mortgage Servicing Segment					Mortgage Production Segment
	Subservicing		Owned Servicing			Portfolio Retention		Total Continuing Operations			Discontinued Operations
	(In millions)
Loan servicing income	$	50	$	38		$	—	$	88		$	—
Changes in fair value of MSRs and secured liability	—		(5		)	—		(5		)	—
Origination and other loan fees	—		—			2		2			3
Gain on loans held for sale, net	—		—			10		10			2
Net interest expense	—		(25		)	—		(25		)	—
Other income ⁽²⁾	—		15			—		15			4
Total net revenues ⁽¹⁾	$	50	$	23		$	12	$	85		$	9

———————

⁽¹⁾

During the three and six months ended June 30, 2018 discontinued operations includes $1 million and $5 million, respectively, of revenue that was accounted for under ASC 606 as discussed below. During both the three and six months ended June 30, 2018, Subservicing includes $2 million of revenue that was accounted for under ASC 606, which primarily related to certain ancillary fees associated with subservicing contracts that are recognized over the term of the contract.


⁽²⁾	During the six months ended June 30, 2018, Other income within the Mortgage Servicing segment includes a $15 million gain related to a settlement with an insurance carrier for certain claims related to the Company's previously disclosed legal and regulatory settlements. Refer to Note 11, 'Commitments and Contingencies' for additional information.

Refer to the Company’s 2017 Form 10-K for a description of the accounting policies for significant revenue streams that are not subject to the new revenue standard, including those associated with origination and servicing activities that have been accounted for under ASC 860, "Transfers and Servicing of Financial Assets" and ASC 825, "Financial Instruments."

Revenue from Contracts with Customers Subject to ASC 606

Revenues are recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less and contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. There were no significant differences between the amounts of revenue recognized under ASC 606 compared to the amount that would have resulted from the application of previous standards.

The following descriptions represent the Company's accounting policies for significant revenue streams subject to the new revenue standard, all of which relate to discontinued operations:

•

Origination and other loan fees. The Company provided origination and fulfillment services to PLS clients under Origination Assistance Agreements ("OAA") through March 31, 2018, and the origination assistance fees associated with fee-based closings under these agreements are subject to the new revenue standard. The services performed under the OAA represent a stand-ready obligation, and the Company has applied the practical expedient to recognize revenue in the amount it has the right to invoice, which occurs at the time the loan is originated and funded. The right to invoice practical expedient is consistent with the historical accounting treatment of origination assistance fees in prior periods. During the six months ended June 30, 2018, within revenues from discontinued operations, Origination and other loans fees includes $2 million of origination assistance fees that were accounted for under ASC 606.

•

Other income. In connection with the exit of the PLS business, the Company is contractually required to provide certain transition support services to its clients, which includes the return of records and loan document images. The Company is entitled to certain transition support fees associated with these services, and the fees are recognized upon the transfer of control of the records and loan document images to the customer. During the three and six months ended June 30, 2018, within revenues from discontinued operations, Other income includes $1 million and $3 million, respectively, of transition support fees that were accounted for under ASC 606.