Discontinued Operations and Disposal Groups

6 Months Ended

Jun. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

2. Discontinued Operations

On July 1, 2021, the Company entered into a definitive agreement for the sale of its reverse servicing portfolio, operating under Champion, to MAM. Upon close of the transaction, which is subject to regulatory approvals and other closing conditions, MAM will assume Champion’s reverse portfolio and related operations. The sale is expected to close prior to the end of 2021. The carrying amounts of assets and liabilities associated with the reverse servicing operation are reported under the Servicing segment. The Company determined reverse servicing operations met the criteria for classification as held for sale as of June 30, 2021 and represents a strategic shift in the Company’s operations. Therefore, the sale of the reverse servicing portfolio qualifies for reporting as discontinued operations, and the assets and liabilities of the reverse servicing portfolio are reported as discontinued operations in the condensed consolidated balance sheets and related results of operations are reported as discontinued operations in the condensed consolidated statements of operations for all periods presented.

As part of the transaction, the Company entered into a servicing agreement with MAM, under which the Company will be compensated for continuing to service these reverse loans through the date that the loans are transferred out of Company’s servicing system, which will be the date of close. In addition, the Company will retain certain loans related to the reverse servicing portfolio, primarily related to previously liquidated loans, with total assets of $112 and total liabilities of $88 as of June 30, 2021.

The following table sets forth the assets and liabilities included in discontinued operations:

	June 30, 2021		December 31, 2020
Carrying amounts of assets of discontinued operations
Restricted cash	$	77	$	83
Reverse mortgage interests, net	4,910		5,253
Other	9		11
Loss recognized on classification as discontinued operations	(61)		—
Total assets of discontinues operations	$	4,935	$	5,347
Carrying amounts of liabilities of discontinued operations
Advances and warehouse facilities, net	$	525	$	505
Payables and other liabilities	224		233
Mortgage servicing liabilities	42		41
Other nonrecourse debt, net	3,999		4,424
Total liabilities of discontinued operations	$	4,790	$	5,203

The following table sets forth the condensed consolidated statements of operations data for discontinued operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue - service related, net	$	1	$	12	$	9	$	26
Salaries, wages and benefits expense	(8)		(10)		(16)		(22)
General and administrative expense	71		(10)		64		(18)
Interest income	43		53		87		96
Interest expense	(30)		(50)		(64)		(103)
Loss on classification as discontinued operations	(61)		—		(61)		—
Income (loss) from discontinued operations before income tax expense (benefit)	16		(5)		19		(21)
Less: Income tax expense (benefit)	4		(1)		5		(5)
Net income (loss) from discontinued operations	$	12	$	(4)	$	14	$	(16)