Advances and Other Receivables

9 Months Ended

Sep. 30, 2022

4. Advances and Other Receivables

Advances and other receivables, net, consists of the following:


Advances and Other Receivables, Net	September 30, 2022		December 31, 2021
Servicing advances, net of $12 and $19 purchase discount, respectively	$	854	$	1,263
Receivables from agencies, investors and prior servicers, net of $7 and $12 purchase discount, respectively	120		132
Reserves	(143)		(167)
Total advances and other receivables, net	$	831	$	1,228

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


	Three Months Ended September 30,				Nine Months Ended September 30,
Reserves for Advances and Other Receivables	2022		2021		2022		2021
Balance - beginning of period	$	150	$	191	$	167	$	208
Provision and other additions(1)	19		18		53		59
Write-offs	(26)		(37)		(77)		(95)
Balance - end of period	$	143	$	172	$	143	$	172

(1)The Company recorded a provision of $10 and $8 through the MTM adjustments in “revenues - service related, net”, in the condensed consolidated statements of operations during the three months ended September 30, 2022 and 2021, respectively, and $22 and $28 during the nine months ended September 30, 2022 and 2021, 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

The following tables set forth the activities of the purchase discounts for advances and other receivables:


	Three Months Ended September 30,
	2022				2021
Purchase Discount for Advances and Other Receivables	Servicing Advances		Receivables from Agencies, Investors and Prior Servicers		Servicing Advances		Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	14	$	8	$	31	$	20
Utilization of purchase discounts	(2)		(1)		(1)		(7)

Balance - end of period	$	12	$	7	$	30	$	13


	Nine Months Ended September 30,
	2022				2021
Purchase Discount for Advances and Other Receivables	Servicing Advances		Receivables from Agencies, Investors and Prior Servicers		Servicing Advances		Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	19	$	12	$	72	$	21
Utilization of purchase discounts	(7)		(5)		(42)		(8)

Balance - end of period	$	12	$	7	$	30	$	13

Credit Loss for Advances and Other Receivables

As of September 30, 2022, the total current expected credit loss (“CECL”) reserve was $34, of which $27 and $7 were recorded in reserves and purchase discount for advances and other receivables, respectively. There were no material changes to CECL reserves in 2022. As of September 30, 2021, the total CECL reserve was $29, of which $19 and $10 were recorded in reserves and purchase discount for advances and other receivables, respectively. There were no material changes to CECL reserves in 2021 except for a write-off of $16 in the three and nine months ended September 30, 2021.

The Company determined that the credit-related risk associated with applicable financial instruments typically increase with the passage of time. The CECL reserve methodology considers these financial instruments collectible to a point in time of 39 months. Any projected remaining balance at the end of the collection period is considered a loss and factors into the overall CECL loss rate required.