Advances and Other Receivables, Net

9 Months Ended

Sep. 30, 2018

Receivables [Abstract]

Advances and Other Receivables, Net

Advances and other receivables, net consists of the following.

	Successor			Predecessor
	September 30, 2018			December 31, 2017
Servicing advances, net of $227 and $0 discount, respectively	$	889		$	1,599
Receivables from agencies, investors and prior servicers, net of $56 and $0 discount, respectively	305			391
Reserves	(20		)	(284		)
Total advances and other receivables, net	$	1,174		$	1,706

The Company and Predecessor, as loan servicer, are contractually responsible to advance funds on behalf of the borrower and investor primarily for loan principal and interest, property taxes and hazard insurance and foreclosure costs. Advances are primarily recovered through reimbursement from the investor, proceeds from sale of loan collateral or mortgage insurance claims. Reserves for advances and other receivables on loans transferred out of the MSR portfolio are established within advances and other receivables.

The Company and Predecessor estimate and record an asset for estimated recoveries to be collected from prior servicers for their respective portion of the losses associated with the underlying loans that were not serviced in accordance with established guidelines. Receivables from prior servicers totaled $84 and $134 for the Company and Predecessor's forward loan portfolio at September 30, 2018 and December 31, 2017, respectively.

The following table sets forth the activities of the reserves for advances and other receivables.

	Successor		Predecessor
Reserves for Advances and Other Receivables	For the Period August 1 - September 30, 2018		For the Period July 1 - July 31, 2018			Three Months Ended September 30, 2017			For the Period January 1 - July 31, 2018			Nine Months Ended September 30, 2017
Balance - beginning of period	$	—	$	294		$	236		$	284		$	184
Provision and other additions(1)	20		7			30			69			106
Write-offs	—		(4		)	(13		)	(56		)	(37		)
Balance - end of period	$	20	$	297		$	253		$	297		$	253

⁽¹⁾ The Company recorded a provision of $13 through the MTM adjustments in service related revenues for the two months ended September 30, 2018 for inactive and liquidated loans that are no longer part of the MSR portfolio. The Predecessor recorded a provision through the MTM adjustments in service related revenues of $4 and $38 for the one and seven months ended July 31, 2018, respectively, and $15 and $53 for the three and nine months ended September 30, 2017, respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves from other balance sheet accounts.

Purchase Discount for Advances and Other Receivables

In connection with the Merger, the Company recorded the acquired advances and other receivables at estimated fair value as of the acquisition date, which resulted in a preliminary purchase discount of $302. The following table sets forth the activities of the purchase discount for advances and other receivables.

	Successor
	For the Period August 1 - September 30, 2018
Purchase Discounts	Servicing Advances			Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	246		$	56
Accretion	(19		)	—
Balance - end of period	$	227		$	56