Advances and Other Receivables, Net

12 Months Ended

Dec. 31, 2018

Receivables [Abstract]

Advances and Other Receivables, Net

5. Advances and Other Receivables, Net

Advances and other receivables, net consists of the following:

	Successor			Predecessor
	December 31, 2018			December 31, 2017
Servicing advances, net of $205 and $0 discount, respectively	$	952		$	1,599
Receivables from agencies, investors and prior servicers, net of $48 and $0 discount, respectively	289			391
Reserves	(47		)	(284		)
Total advances and other receivables, net	$	1,194		$	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 $94 and $134 for the Company and Predecessor’s forward loan portfolio at December 31, 2018 and 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 - December 31, 2018		For the Period January 1 - July 31, 2018			Year ended December 31, 2017
Balance - beginning of period	$	—	$	284		$	184
Provision and other additions(1)	47		69			142
Write-offs	—		(56		)	(42		)
Balance - end of period	$	47	$	297		$	284

⁽¹⁾  The Company recorded a provision of $25 through the MTM adjustments in service related revenues for the five months ended December 31, 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 $38 and $72 for the seven months ended July 31, 2018 and year ended December 31, 2017, respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate.

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 - December 31, 2018
Purchase Discounts	Servicing Advances			Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	246		$	56
Utilization of purchase discounts	(41		)	(8		)
Balance - end of period	$	205		$	48