Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 09, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | New Residential Investment Corp. | ||
Entity Central Index Key | 1,556,593 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 3.1 | ||
Entity Common Stock, Shares Outstanding | 307,334,117 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments in: | |||
Excess mortgage servicing rights, at fair value | $ 1,399,455 | $ 1,581,517 | |
Excess mortgage servicing rights, equity method investees, at fair value | 194,788 | 217,221 | |
Mortgage servicing rights, at fair value | 659,483 | 0 | |
Servicer advances, at fair value | [1] | 5,706,593 | 7,426,794 |
Real estate securities, available-for-sale | 5,073,858 | 2,501,881 | |
Residential mortgage loans, held-for-investment | 190,761 | 330,178 | |
Residential mortgage loans, held-for-sale | 696,665 | 776,681 | |
Real estate owned | 59,591 | 50,574 | |
Consumer loans, held-for-investment | [1] | 1,799,486 | 0 |
Cash and cash equivalents | [1] | 290,602 | 249,936 |
Restricted cash | 163,095 | 94,702 | |
Trades receivable | 1,687,788 | 1,538,481 | |
Deferred tax asset, net | 151,284 | 185,311 | |
Other assets | 291,586 | 239,446 | |
Total assets | 18,365,035 | 15,192,722 | |
Liabilities | |||
Repurchase agreements | 5,190,631 | 4,043,054 | |
Notes and bonds payable | [1] | 7,990,605 | 7,249,568 |
Trades payable | 1,381,968 | 725,672 | |
Due to affiliates | 47,348 | 23,785 | |
Dividends payable | 115,356 | 106,017 | |
Accrued expenses and other liabilities | 170,950 | 58,046 | |
Total liabilities | 14,896,858 | 12,206,142 | |
Commitments and Contingencies | |||
Equity | |||
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 250,773,117 and 230,471,202 issued and outstanding at December 31, 2016 and December 31, 2015, respectively | 2,507 | 2,304 | |
Additional paid-in capital | 2,920,730 | 2,640,893 | |
Retained earnings | 210,500 | 148,800 | |
Accumulated other comprehensive income (loss) | 126,363 | 3,936 | |
Total New Residential stockholders’ equity | 3,260,100 | 2,795,933 | |
Noncontrolling interests in equity of consolidated subsidiaries | 208,077 | 190,647 | |
Total Equity | 3,468,177 | 2,986,580 | |
Total Liabilities And Equity | $ 18,365,035 | $ 15,192,722 | |
[1] | New Residential’s Consolidated Balance Sheets include the assets and liabilities of certain consolidated VIEs, the Buyer (Note 6) and the Consumer Loan SPVs (Note 9), which primarily hold investments in Servicer Advances and consumer loans, respectively, financed with notes and bonds payable. The Buyer’s balance sheet is included in Note 6 and the Consumer Loan SPVs’ balance sheet is included in Note 9. The creditors of the Buyer and the Consumer Loan SPVs do not have recourse to the general credit of New Residential and the assets of the Buyer and the Consumer Loan SPVs are not directly available to satisfy New Residential’s obligations. |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 250,773,117 | 230,471,202 |
Common stock, shares outstanding (in shares) | 250,773,117 | 230,471,202 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Income Statement [Abstract] | |||||
Interest income | $ 1,076,735 | $ 645,072 | $ 346,857 | ||
Interest expense | 373,424 | 274,013 | 140,708 | ||
Net interest income (expense) | 703,311 | 371,059 | 206,149 | ||
Impairment | |||||
Other-than-temporary impairment (OTTI) on securities | 10,264 | 5,788 | 1,391 | ||
Valuation provision (reversal) on loans and real estate owned | 77,716 | 18,596 | 9,891 | ||
Total Impairment Charges | 87,980 | 24,384 | 11,282 | ||
Net interest income after impairment | 615,331 | 346,675 | 194,867 | ||
Servicing revenue, net | 118,169 | 0 | 0 | ||
Other Income | |||||
Change in fair value of investments in excess mortgage servicing rights | (7,297) | 38,643 | 41,615 | ||
Change in fair value of investments in excess mortgage servicing rights, equity method investees | 16,526 | 31,160 | 57,280 | ||
Change in fair value of investments in servicer advances | (7,768) | (57,491) | 84,217 | ||
Earnings from investments in consumer loans, equity method investees | 0 | 0 | 53,840 | ||
Gain on consumer loans investment | 9,943 | 43,954 | 92,020 | ||
Gain on remeasurement of consumer loan investment | 71,250 | 0 | 0 | ||
Gain (loss) on settlement of investments, net | (48,800) | (19,626) | 31,297 | ||
Other income (loss), net | 28,483 | 5,389 | 14,819 | ||
Total Other Income | 62,337 | [1] | 42,029 | [1] | 375,088 |
Operating Expenses | |||||
General and administrative expenses | 38,570 | 61,862 | 27,001 | ||
Management fee to affiliate | 41,610 | 33,475 | 19,651 | ||
Incentive compensation to affiliate | 42,197 | 16,017 | 54,334 | ||
Loan servicing expense | 44,001 | 6,469 | 3,913 | ||
Subservicing expense | 7,832 | 0 | 0 | ||
Total Operating Expenses | 174,210 | 117,823 | 104,899 | ||
Income (Loss) Before Income Taxes | 621,627 | 270,881 | 465,056 | ||
Income tax expense (benefit) | 38,911 | (11,001) | 22,957 | ||
Net Income (Loss) | 582,716 | 281,882 | 442,099 | ||
Noncontrolling Interests in Income (Loss) of Consolidated Subsidiaries | 78,263 | 13,246 | 89,222 | ||
Net income (loss) attributable to common stockholders | $ 504,453 | $ 268,636 | $ 352,877 | ||
Net Income Per Share of Common Stock | |||||
Basic (in dollars per share) | $ 2.12 | $ 1.34 | $ 2.59 | ||
Diluted (in dollars per share) | $ 2.12 | $ 1.32 | $ 2.53 | ||
Weighted Average Number of Shares of Common Stock Outstanding | |||||
Basic (in shares) | 238,122,665 | 200,739,809 | 136,472,865 | ||
Diluted (in shares) | 238,486,772 | 202,907,605 | 139,565,709 | ||
Dividend declared per share of common stock (in dollars per share) | $ 1.84 | $ 1.75 | $ 1.58 | ||
[1] | Earnings from investments in equity method investees is included in other income. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Comprehensive income (loss), net of tax | |||
Net income | $ 582,716 | $ 281,882 | $ 442,099 |
Other comprehensive income (loss) | |||
Net unrealized gain (loss) on securities | 84,703 | (17,075) | 89,415 |
Reclassification of net realized (gain) loss on securities into earnings | 37,724 | (7,308) | (64,310) |
Total other comprehensive income (loss) | 122,427 | (24,383) | 25,105 |
Total comprehensive income | 705,143 | 257,499 | 467,204 |
Comprehensive income attributable to noncontrolling interests | 78,263 | 13,246 | 89,222 |
Comprehensive income attributable to common stockholders | $ 626,880 | $ 244,253 | $ 377,982 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Total New Residential Stockholders’ Equity [Member] | Noncontrolling Interests in Equity of Consolidated Subsidiaries [Member] | |
Balance, beginning at Dec. 31, 2013 | $ 1,513,075 | $ 1,266 | $ 1,158,384 | $ 102,986 | $ 3,214 | $ 1,265,850 | $ 247,225 | |
Balance, beginning (in shares) at Dec. 31, 2013 | 126,598,987 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividends declared | (218,094) | (218,094) | (218,094) | |||||
Capital contributions | 142,082 | 142,082 | ||||||
Capital distributions | (225,609) | (225,609) | ||||||
Issuance of common stock | 169,905 | $ 144 | 169,761 | 169,905 | ||||
Issuance of common stock (in shares) | 14,375,000 | |||||||
Option exercise | 909 | $ 4 | 905 | 909 | ||||
Option exercise (in shares) | 426,102 | |||||||
Dilution impact of distributions from consolidated subsidiaries | 0 | (916) | (916) | 916 | ||||
Director share grants | 453 | 453 | 453 | |||||
Director share grants (in shares) | 34,816 | |||||||
Comprehensive income (loss) | ||||||||
Net income (loss) | 442,099 | 352,877 | 352,877 | 89,222 | ||||
Net unrealized gain (loss) on securities | 89,415 | 89,415 | 89,415 | |||||
Reclassification of net realized (gain) loss on securities into earnings | (64,310) | (64,310) | (64,310) | |||||
Total comprehensive income | 467,204 | 377,982 | 89,222 | |||||
Balance, ending at Dec. 31, 2014 | 1,849,925 | $ 1,414 | 1,328,587 | 237,769 | 28,319 | 1,596,089 | 253,836 | |
Balance, ending (in shares) at Dec. 31, 2014 | 141,434,905 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividends declared | (355,295) | (355,295) | (355,295) | |||||
Capital contributions | 5,161 | 5,161 | ||||||
Capital distributions | (81,596) | (81,596) | ||||||
Issuance of common stock | 1,312,746 | $ 854 | 1,311,892 | 1,312,746 | ||||
Issuance of common stock (in shares) | 85,435,389 | |||||||
Option exercise | $ 0 | $ 36 | (36) | |||||
Option exercise (in shares) | 6,734,525 | [1] | 3,570,984 | |||||
Director share grants | $ 450 | 450 | 450 | |||||
Director share grants (in shares) | 29,924 | |||||||
Modified retrospective adjustment for the adoption of ASU No. 2014-11 | (2,310) | (2,310) | (2,310) | |||||
Comprehensive income (loss) | ||||||||
Net income (loss) | 281,882 | 268,636 | 268,636 | 13,246 | ||||
Net unrealized gain (loss) on securities | (17,075) | (17,075) | (17,075) | |||||
Reclassification of net realized (gain) loss on securities into earnings | (7,308) | (7,308) | (7,308) | |||||
Total comprehensive income | 257,499 | 244,253 | 13,246 | |||||
Balance, ending at Dec. 31, 2015 | 2,986,580 | $ 2,304 | 2,640,893 | 148,800 | 3,936 | 2,795,933 | 190,647 | |
Balance, ending (in shares) at Dec. 31, 2015 | 230,471,202 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Dividends declared | (442,753) | (442,753) | (442,753) | |||||
SpringCastle Transaction (Note 9) | 110,438 | 110,438 | ||||||
Capital contributions | 0 | 0 | ||||||
Capital distributions | (167,026) | (167,026) | ||||||
Issuance of common stock | 278,775 | $ 200 | 278,575 | 278,775 | ||||
Issuance of common stock (in shares) | 20,000,000 | |||||||
Option exercise | $ 0 | $ 3 | (3) | |||||
Option exercise (in shares) | 1,100,497 | [1] | 280,111 | |||||
Purchase of Noncontrolling Interest in the Buyer at a Discount | $ (3,280) | 965 | 965 | (4,245) | ||||
Director share grants | 300 | 300 | 300 | |||||
Director share grants (in shares) | 21,804 | |||||||
Comprehensive income (loss) | ||||||||
Net income (loss) | 582,716 | 504,453 | 504,453 | 78,263 | ||||
Net unrealized gain (loss) on securities | 84,703 | 84,703 | 84,703 | |||||
Reclassification of net realized (gain) loss on securities into earnings | 37,724 | 37,724 | 37,724 | |||||
Total comprehensive income | 705,143 | 626,880 | 78,263 | |||||
Balance, ending at Dec. 31, 2016 | $ 3,468,177 | $ 2,507 | $ 2,920,730 | $ 210,500 | $ 126,363 | $ 3,260,100 | $ 208,077 | |
Balance, ending (in shares) at Dec. 31, 2016 | 250,773,117 | |||||||
[1] | The 1.1 million and 6.7 million options that were exercised in 2016 and 2015 had an intrinsic value of approximately $4.0 million and $59.4 million, respectively, at the date of exercise. |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash Flows From Operating Activities | |||
Net income | $ 582,716 | $ 281,882 | $ 442,099 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Change in fair value of investments in excess mortgage servicing rights | 7,297 | (38,643) | (41,615) |
Change in fair value of investments in excess mortgage servicer rights, equity method investees | (16,526) | (31,160) | (57,280) |
Change in fair value of investments in servicer advances | 7,768 | 57,491 | (84,217) |
Earnings from consumer loan equity method investees | 0 | 0 | (53,840) |
(Gain) / loss on consumer loans investment | 0 | 0 | (92,020) |
(Gain) / loss on remeasurement of consumer loan investment | (71,250) | 0 | 0 |
(Gain) / loss on settlement of investments (net) | 48,800 | 19,626 | (31,297) |
Unrealized (gain) / loss on derivative instruments | (5,774) | 3,538 | 8,847 |
Unrealized (gain) / loss on other ABS | 2,322 | (879) | 0 |
(Gain) / loss on transfer of loans to REO | (18,356) | (2,065) | (17,489) |
(Gain) / loss on transfer of loans to other assets | (2,938) | 690 | 0 |
(Gain) / loss on Excess MSR recapture agreements | (2,802) | (2,999) | (1,157) |
Accretion and other amortization | (747,932) | (525,298) | (278,408) |
Other-than-temporary impairment | 10,264 | 5,788 | 1,391 |
Valuation provision (reversal) on loans and real estate owned | 77,716 | 18,596 | 9,891 |
Non-cash portions of servicing revenue, net | (88,325) | 0 | 0 |
Non-cash directors’ compensation | 300 | 450 | 453 |
Deferred tax provision | 34,846 | (6,633) | 15,114 |
Changes in: | |||
Other assets | 229,916 | 216,778 | (14,582) |
Servicing advance receivables | (2,503) | 0 | 0 |
Due to affiliates | 23,563 | (33,639) | 38,255 |
Accrued expenses and other liabilities | 3,223 | (42,494) | 31,945 |
Other operating cash flows: | |||
Interest received from excess mortgage servicing rights | 152,589 | 127,131 | 49,880 |
Interest received from servicer advance investments | 185,204 | 172,711 | 110,247 |
Interest received from Non-Agency RMBS | 100,883 | 43,824 | 6,660 |
Interest received from residential mortgage loans, held-for-investment | 2,815 | 0 | 7,969 |
Interest received from PCD consumer loans, held-for-investment | 49,582 | 0 | 0 |
Purchases of residential mortgage loans, held-for-sale | (1,196,018) | (1,278,322) | (1,577,933) |
Proceeds from sales of purchased residential mortgage loans, held-for-sale | 1,109,876 | 1,226,442 | 1,245,352 |
Principal repayments from purchased residential mortgage loans, held-for-sale | 61,494 | 55,804 | 2,413 |
Net cash provided by (used in) operating activities | 560,796 | 306,493 | (172,055) |
Cash Flows From Investing Activities | |||
Acquisition of HLSS (Note 1), net of cash acquired | 0 | (881,165) | 0 |
SpringCastle Transaction (Note 9), net of cash acquired | (55,523) | 0 | 0 |
Restricted cash acquired from SpringCastle transaction | 74,604 | 0 | 0 |
Purchase of residential mortgage loans | (191,081) | (290,652) | (884,557) |
Purchase of derivatives | (8,292) | (5,830) | (70,218) |
Purchase of real estate owned and other assets | (14,097) | (26,208) | (10,690) |
Purchase of consumer loans | (176,107) | 0 | 0 |
Draws on revolving consumer loans | (49,289) | 0 | 0 |
Payments for settlement of derivatives | (84,587) | (85,493) | (43,133) |
Return of investments in excess mortgage servicing rights | 175,243 | 154,777 | 42,603 |
Proceeds from sale of residential mortgage loans | 11,176 | 643,788 | 0 |
Proceeds from settlement of derivatives | 55,851 | 37,938 | 87,645 |
Proceeds from sale of real estate owned | 71,570 | 57,699 | 16,502 |
Net cash provided by (used in) investing activities | (182,583) | (233,188) | (1,690,111) |
Cash Flows From Financing Activities | |||
Repayments of repurchase agreements | (29,866,052) | (8,798,578) | (4,869,799) |
Margin deposits under repurchase agreements and derivatives | (487,072) | (387,143) | (385,814) |
Repayments of notes and bonds payable | (10,843,732) | (7,286,860) | (5,416,883) |
Payment of deferred financing fees | (37,908) | (45,654) | (8,444) |
Common stock dividends paid | (433,414) | (303,023) | (227,646) |
Borrowings under repurchase agreements | 31,015,797 | 9,607,475 | 6,412,137 |
Return of margin deposits under repurchase agreements and derivatives | 486,050 | 391,705 | 366,925 |
Borrowings under notes and bonds payable | 9,719,242 | 6,053,950 | 5,841,474 |
Issuance of common stock | 279,600 | 882,166 | 173,507 |
Costs related to issuance of common stock | (825) | (3,512) | (2,693) |
Noncontrolling interest in equity of consolidated subsidiaries - contributions | 0 | 0 | 142,082 |
Noncontrolling interest in equity of consolidated subsidiaries - distributions | (97,560) | (81,596) | (225,609) |
Purchase of Noncontrolling Interest in the Buyer | (3,280) | 0 | 0 |
Net cash provided by (used in) financing activities | (269,154) | 28,930 | 1,799,237 |
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 109,059 | 102,235 | (62,929) |
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period | 344,638 | 242,403 | 305,332 |
Cash, Cash Equivalents, and Restricted Cash, End of Period | 453,697 | 344,638 | 242,403 |
Supplemental Disclosure of Cash Flow Information | |||
Cash paid during the period for interest | 350,028 | 244,188 | 127,998 |
Cash paid during the period for income taxes | 1,109 | 535 | 14,115 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | |||
Dividends declared but not paid | 115,356 | 106,017 | 53,745 |
Transfer from residential mortgage loans to real estate owned and other assets | 249,497 | 90,414 | 21,842 |
Transfer from residential mortgage loans, held-for-investment to residential mortgage loans, held-for-sale | 316,199 | 0 | 846,904 |
Non-cash distributions to noncontrolling interest | 69,466 | 0 | 0 |
Portion of HLSS Acquisition (Note 1) paid in common stock | 0 | 434,092 | 0 |
Deferred purchase price of MSRs | 90,058 | 0 | 0 |
Real estate securities retained from loan securitizations | 165,782 | 36,967 | 54,395 |
Remeasurement of Consumer Loan Companies noncontrolling interest | 110,438 | 0 | 0 |
HLSS [Member] | |||
Supplemental Schedule of Non-Cash Investing and Financing Activities | |||
Capital contributions by HLSS Ltd. | 0 | 5,161 | 0 |
ASU 2014-11 [Member] | |||
Supplemental Schedule of Non-Cash Investing and Financing Activities | |||
Reclassification resulting from the application of ASU No. 2014-11 | 0 | 85,955 | 0 |
Agency RMBS [Member] | |||
Cash Flows From Investing Activities | |||
Payments to acquire held-to-maturity securities | (6,812,258) | (4,610,680) | (1,437,952) |
Principal repayments from securities | 95,030 | 129,112 | 271,673 |
Proceeds from sale of RMBS | 6,594,868 | 4,468,398 | 796,392 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | |||
Sale of investments, primarily Agency RMBS, settled after year end | 1,687,788 | 1,538,481 | 0 |
Non-agency RMBS [Member] | |||
Cash Flows From Investing Activities | |||
Payments to acquire held-to-maturity securities | (2,577,625) | (1,252,516) | (1,690,770) |
Principal repayments from securities | 726,176 | 135,948 | 103,934 |
Proceeds from sale of RMBS | 261,489 | 425,761 | 1,288,980 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | |||
Purchase of Agency and Non-Agency RMBS, settled after year end | 1,381,968 | 725,672 | 0 |
Excess MSRs [Member] | |||
Cash Flows From Investing Activities | |||
Acquisition of investments in excess mortgage servicing rights | (2,146) | (252,127) | (94,113) |
Mortgage Servicing Rights and Servicer Advances [Member] | |||
Cash Flows From Investing Activities | |||
Acquisition of investments in excess mortgage servicing rights | (526,653) | 0 | 0 |
Excess MSRs Investees [Member] | |||
Other operating cash flows: | |||
Distributions of earnings, equity method investees | 22,046 | 37,874 | 53,427 |
Cash Flows From Investing Activities | |||
Return of investments in equity method investments | 16,913 | 8,683 | 25,743 |
Consumer Loan, Equity Method Investees [Member] | |||
Other operating cash flows: | |||
Distributions of earnings, equity method investees | 0 | 0 | 53,840 |
Cash Flows From Investing Activities | |||
Return of investments in equity method investments | 0 | 0 | 306,473 |
Supplemental Schedule of Non-Cash Investing and Financing Activities | |||
Non-cash distributions from Consumer Loan Companies | 25 | 585 | 609 |
Servicer Advance Investments [Member] | |||
Cash Flows From Investing Activities | |||
Payments to acquire held-to-maturity securities | (15,266,816) | (14,945,858) | (6,828,135) |
Principal repayments from securities | 17,158,395 | 16,008,741 | 6,389,154 |
Residential Mortgage Loans [Member] | |||
Cash Flows From Investing Activities | |||
Principal repayments from loans | 38,700 | 46,496 | 40,358 |
Consumer Loan [Member] | |||
Cash Flows From Investing Activities | |||
Principal repayments from loans | $ 301,876 | $ 0 | $ 0 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION New Residential Investment Corp. (together with its subsidiaries, “New Residential”) is a Delaware corporation that was formed as a limited liability company in September 2011 for the purpose of making real estate related investments and commenced operations on December 8, 2011. On December 20, 2012, New Residential was converted to a corporation. Drive Shack Inc. (formerly Newcastle Investment Corp., “Drive Shack”) was the sole stockholder of New Residential until the spin-off (Note 13), which was completed on May 15, 2013. Following the spin-off, New Residential is an independent publicly traded real estate investment trust (“REIT”) primarily focused on investing in residential mortgage related assets. New Residential is listed on the New York Stock Exchange (“NYSE”) under the symbol “NRZ.” New Residential has elected and intends to qualify to be taxed as a REIT for U.S. federal income tax purposes. As such, New Residential will generally not be subject to U.S. federal corporate income tax on that portion of its net income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements. See Note 17 regarding New Residential’s taxable REIT subsidiaries. New Residential has entered into a management agreement (the “Management Agreement”) with FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”), pursuant to which the Manager provides a management team and other professionals who are responsible for implementing New Residential’s business strategy, subject to the supervision of New Residential’s board of directors. For its services, the Manager is entitled to management fees and incentive compensation, both defined in, and in accordance with the terms of, the Management Agreement. The Manager also manages Drive Shack, investment funds that indirectly own a majority of the outstanding interests in Nationstar Mortgage LLC (“Nationstar”), a leading residential mortgage servicer, and investment funds that own a majority of the outstanding common stock of OneMain Holdings, Inc. (formerly Springleaf Holdings, Inc.) (together with its subsidiaries, “OneMain”), former managing member of the Consumer Loan Companies (Note 9). As of December 31, 2016 , New Residential conducted its business through the following segments: (i) investments in excess mortgage servicing rights (“Excess MSRs”), (ii) investments in mortgage servicing rights (“MSRs”), (iii) investments in Servicer Advances (including the basic fee component of the related MSRs), (iv) investments in real estate securities, (v) investments in residential mortgage loans, (vi) investments in consumer loans and (vii) corporate. Approximately 2.4 million shares of New Residential’s common stock were held by Fortress, through its affiliates, and its principals as of December 31, 2016 . In addition, Fortress, through its affiliates, held options relating to approximately 11.2 million shares of New Residential’s common stock as of December 31, 2016 . Acquisition of HLSS Assets and Liabilities On February 22, 2015, New Residential entered into an Agreement and Plan of Merger (the “HLSS Initial Merger Agreement”) with Home Loan Servicing Solutions, Ltd., a Cayman Islands exempted company (“HLSS”) and Hexagon Merger Sub, Ltd., a Cayman Islands exempted company and a wholly owned subsidiary of New Residential (“HLSS Merger Sub”). On April 6, 2015, with the approval of their respective Boards of Directors, New Residential and HLSS, together with certain of their respective subsidiaries, entered into a termination agreement (providing for the termination of the HLSS Initial Merger Agreement) and simultaneously entered into a Share and Asset Purchase Agreement (the “HLSS Acquisition Agreement”). The parties to the HLSS Acquisition Agreement included New Residential, HLSS, HLSS Advances Acquisition Corp., a Delaware corporation and wholly owned subsidiary of New Residential (“HLSS Advances Sub”), and HLSS MSR-EBO Acquisition LLC, a Delaware limited liability company and wholly owned subsidiary of New Residential (together with HLSS Advances Sub, the “HLSS Buyers”). Pursuant to the HLSS Acquisition Agreement, the HLSS Buyers acquired from HLSS substantially all of the assets of HLSS (including all of the issued share capital of HLSS’s first-tier subsidiaries) and assumed (and agreed to indemnify HLSS for) the liabilities of HLSS (together, the “HLSS Acquisition”), other than post-closing liabilities in an amount up to the Retained Balance (as defined below), for aggregate consideration (net of certain transaction expenses being reimbursed by HLSS), consisting of approximately $1.0 billion in cash and 28,286,980 shares of common stock, par value $0.01 per share (“New Residential Acquisition Common Stock”), of New Residential delivered to HLSS in a private placement. The closing of the HLSS Acquisition (the “HLSS Acquisition Closing”) occurred simultaneously with the execution of the HLSS Acquisition Agreement. The HLSS Acquisition Agreement includes certain customary post-closing covenants of New Residential, the HLSS Buyers and HLSS. In addition, the board of directors of HLSS also approved a wind down plan (the “Distribution and Liquidation Plan”), pursuant to which HLSS sold the shares of New Residential Acquisition Common Stock received in the HLSS Acquisition on April 8, 2015 and distributed to HLSS shareholders the cash consideration from the HLSS Acquisition and the cash proceeds from the sale of shares of New Residential Acquisition Common Stock; provided that under the terms of the Distribution and Liquidation Plan, HLSS retained $50.0 million of cash (the “Retained Balance”) for wind down costs, of which $45.1 million was received by New Residential at the HLSS New Merger Effective Time (as defined below). At the HLSS Acquisition Closing, New Residential and HLSS Merger Sub entered into an Agreement and Plan of Merger, dated April 6, 2015, with HLSS (the “HLSS New Merger Agreement”), pursuant to which, upon the terms and subject to the conditions set forth therein (including the approval of HLSS’s shareholders), HLSS (which at the time of the HLSS New Merger (as defined below) had substantially wound-down its operations) merged with and into HLSS Merger Sub, with HLSS Merger Sub continuing as the surviving company and a wholly owned subsidiary of New Residential (the “HLSS New Merger”). Following the HLSS New Merger, references to HLSS refer to HLSS Merger Sub. Pursuant to the HLSS New Merger Agreement, and upon the terms and conditions set forth therein, at the effective time of the HLSS New Merger (the “HLSS New Merger Effective Time”), each ordinary share of HLSS, par value $0.01 per share, issued and outstanding immediately prior to the HLSS New Merger Effective Time (other than those shares of HLSS owned by New Residential or any direct or indirect wholly-owned subsidiary of New Residential and shares of HLSS as to which dissenters’ rights have been properly exercised), was automatically converted into the right to receive $0.704059 per share in cash, without interest. The HLSS New Merger Effective Time occurred on October 23, 2015, at which time New Residential paid $50.0 million to HLSS shareholders and the HLSS New Merger was completed. The purchase price for the HLSS Acquisition included the fair value of the common stock issued of $434.1 million , cash consideration paid of $622.0 million , HLSS seller financing of $385.2 million , and contingent cash consideration of $50.0 million . The total consideration is summarized as follows: Total Consideration Amount Share Issuance Consideration 28,286,980 New Residential's 4/6/2015 share price $ 15.3460 Dollar Value of Share Issuance (A) $ 434,092 Cash Consideration 621,982 HLSS Seller Financing (B) 385,174 HLSS New Merger Payment (71,016,771 $0.704059) (C) 50,000 Total Consideration $ 1,491,248 (A) Share Issuance Consideration The share issuance consideration consists of 28.3 million newly issued shares of New Residential common stock with a par value $0.01 per share. The fair value of the common stock at the date of the acquisition was $15.3460 per share, which was New Residential’s volume weighted average share price on April 6, 2015. (B) HLSS Seller Financing New Residential agreed to deliver $1.0 billion of cash purchase price, including a promise to pay an amount of $385.2 million immediately after closing from the proceeds of financing that was committed in anticipation of the HLSS Acquisition and is collateralized by certain of the HLSS assets acquired. (C) HLSS New Merger Payment The HLSS New Merger Agreement, and the $50.0 million consideration related thereto, is included as a part of the business combination in conjunction with the HLSS Acquisition Agreement. The range of outcomes for this contingent consideration was from $0.0 million to $50.0 million , dependent on whether the HLSS New Merger was approved by HLSS shareholders and other factors. As of the HLSS New Merger Effective Time, the net contingent consideration paid was fixed at $5.1 million . New Residential has performed an allocation of the purchase price to HLSS’s assets and liabilities, as set forth below. Total Consideration ($ in millions) $ 1,491.2 Assets Cash and cash equivalents $ 51.4 Servicer advances, at fair value 5,096.7 Excess mortgage servicing rights, at fair value 917.1 Residential mortgage loans, held-for-sale (A) 416.8 Deferred tax asset (B) 195.1 Investment in HLSS Ltd. 44.9 Other assets (C) 402.4 Total Assets Acquired $ 7,124.4 Liabilities Notes and bonds payable 5,580.3 Accrued expenses and other liabilities (D)(E) 52.9 Total Liabilities Assumed $ 5,633.2 Net Assets $ 1,491.2 (A) Represents $424.3 million unpaid principal balance (“UPB”) of Government National Mortgage Association (“Ginnie Mae”) early buy-out (“EBO”) residential mortgage loans not subject to Accounting Standards Codification (“ASC”) No. 310-30 as the contractual cash flows are guaranteed by the Federal Housing Administration (“FHA”). (B) Due primarily to the difference between carryover historical tax basis and acquisition date fair value of one of HLSS’s first tier subsidiaries. (C) Includes restricted cash and receivables not subject to ASC No. 310-30 which New Residential has deemed fully collectible. (D) Includes liabilities which arose from contingencies regarding HLSS matters. (E) Contingencies for HLSS class action law suits had not been recognized at the acquisition date as the criteria in ASC No. 450 had not been met (Note 14). The acquisition of HLSS resulted in no goodwill as the total consideration transferred was equal to the fair value of the net assets acquired. Separately Recognized Transactions Certain transactions were recognized separately from New Residential’s acquisition of assets and assumption of liabilities in the business combination. These separately recognized transactions include 1) contingent payments to the acquiree’s employees and 2) debt issuance costs. Contingent Payment to the Acquiree’s Employees New Residential identified both retention bonus and severance arrangements for the HLSS employees. Retention bonus payments were triggered by a change in control and continued employment for a specified period post-acquisition. As future service was required, retention bonus payments totaling approximately $3.2 million have been recognized in General and administrative expenses in New Residential’s statement of income for the year ended December 31, 2015. Severance is triggered by a change in control and termination without cause by New Residential within a specified period post-acquisition. As the second trigger represents an action by New Residential as the acquirer, a total amount of approximately $2.8 million has been recognized in General and administrative expenses in New Residential’s statement of income for the year ended December 31, 2015. Debt Issuance Costs New Residential entered into new financing arrangements in connection with the HLSS Acquisition. Such arrangements resulted in New Residential incurring various commitment fees. Commitment fees are treated as a cost of financing and accounted for as debt issuance costs that are not considered a direct cost of the acquisition. Therefore, debt issuance costs totaling approximately $27.0 million have been recorded on the post-acquisition balance sheet of New Residential. Unaudited Supplemental Pro Forma Financial Information - The following table presents unaudited pro forma combined Interest Income and Income Before Income Taxes for the years ended December 31, 2015 and 2014 prepared as if the HLSS Acquisition had been consummated on January 1, 2014. Year Ended December 31, 2015 2014 (unaudited) (unaudited) Pro Forma Interest Income $ 731,660 $ 744,363 Income Before Income Taxes 322,365 647,058 The 2015 unaudited supplemental pro forma financial information has been adjusted to exclude, and the 2014 unaudited supplemental pro forma financial information has been adjusted to include, approximately $26.1 million of acquisition-related costs incurred by New Residential and HLSS in 2015. The unaudited supplemental pro forma financial information has not been adjusted for transactions other than the HLSS Acquisition, or for the conforming of accounting policies. The unaudited supplemental pro forma financial information does not include any anticipated synergies or other anticipated benefits of the HLSS Acquisition and, accordingly, the unaudited supplemental pro forma financial information is not necessarily indicative of either future results of operations or results that might have been achieved had the HLSS Acquisition occurred on January 1, 2014. New Residential’s Consolidated Statements of Income include interest income and income before income taxes of HLSS between April 6, 2015 and December 31, 2015 of $282.3 million and $131.5 million , respectively. Relationship with Ocwen HLSS and HLSS Holdings, LLC (a subsidiary of HLSS acquired by New Residential in the HLSS Acquisition) entered into a mortgage servicing rights purchase agreement (the “Ocwen Purchase Agreement”) with Ocwen Loan Servicing LLC, a subsidiary of Ocwen Financial Corporation (together with its subsidiaries, including Ocwen Loan Servicing LLC, “Ocwen”), which remains in effect following the HLSS Acquisition. Pursuant to the Ocwen Purchase Agreement, HLSS and HLSS Holdings, LLC purchased, among other things, the rights to certain servicing fees under MSRs in respect of private label securitization transactions, associated Servicer Advances and other related assets from Ocwen from time to time. The specific terms of any acquisition of such assets are documented pursuant to separate sale supplements to the Ocwen Purchase Agreement executed by the parties from time to time (each an “Ocwen Sale Supplement” and together, the “Ocwen Sale Supplements”). As of March 31, 2015, the UPB of the residential mortgage loans in respect of the related MSRs equaled $156.4 billion . Ocwen consented to HLSS’s assignment of its rights and interests in connection with the HLSS Acquisition. The Ocwen Sale Supplements have an initial term of up to eight years (commencing on the date of the applicable Ocwen Sale Supplement). If Ocwen and New Residential do not agree to revised fee arrangements at the end of such term, New Residential may direct Ocwen to transfer servicing to a third party, and New Residential may keep any proceeds of such transfer. The Ocwen Purchase Agreement provides that New Residential will purchase from Ocwen Servicer Advances arising under specified servicing agreements as the Servicer Advances arise. The purchase price payable by New Residential for such Servicer Advances is equal to the outstanding balance thereof. As of April 6, 2015, the outstanding balance of Servicer Advances acquired from Ocwen equaled $5.6 billion . In addition, the Ocwen Purchase Agreement contemplates that New Residential may cause Ocwen to use commercially reasonable efforts to transfer servicing of the related residential mortgage loans to a third-party servicer upon the occurrence of various termination events. Certain termination events may have occurred under the Ocwen Purchase Agreement because of downgrades in certain of Ocwen’s servicer ratings but New Residential has agreed, subject to certain limitations, not to cause Ocwen to use commercially reasonable efforts to transfer servicing of the related residential mortgage loans to a third-party servicer with respect to such downgrades before April 6, 2017. The Ocwen Purchase Agreement and Ocwen Sale Supplements include various Ocwen warranties, representations and indemnifications relating to Ocwen’s performance of its duties as servicer. Pursuant to an amendment to the Ocwen Purchase Agreement executed in connection with the consummation of the HLSS Acquisition, such Ocwen Purchase Agreement and the related Ocwen Sale Supplements were amended, among other things, to (i) obtain Ocwen’s consent to the assignment by HLSS of its interest under the Ocwen Purchase Agreement and each Ocwen Sale Supplement thereto, (ii) provide that HLSS Holdings, LLC will not direct the replacement of Ocwen as servicer before April 6, 2017 except under the circumstances described in the amendment, (iii) extend the scheduled term of Ocwen’s servicing appointment under each Sale Supplement until the earlier of eight years from the date of the related Ocwen Sale Supplement and April 30, 2020 (subject to an agreement to commence negotiating in good faith for an extension of the contract term no later than six months prior to the end of the applicable term) unless certain servicer ratings thresholds are not met on the six year anniversary of the related Ocwen Sale Supplement, in which case the related term would expire on such anniversary, and (iv) provide that Ocwen will reimburse HLSS Holdings, LLC, subject to specified limits, for certain increased costs resulting from further Standard & Poor’s Rating Services (“S&P”) servicer rating downgrades of Ocwen. Through December 31, 2015, New Residential has accrued $14.5 million in connection with clause (iv), which is included in Other Income, and which was received in October 2015. In addition, pursuant to such amendment Ocwen agreed to sell to New Residential the economic beneficial rights to any right of optional termination or “clean-up call” of any trust related to any servicing agreement in respect of certain servicing fees New Residential acquired from HLSS and to exercise such rights only at New Residential’s direction. New Residential agreed to pay to Ocwen a fee in an amount equal to 0.50% of the outstanding balance of the performing mortgage loans purchased in connection with any such exercise and to pay costs and expenses of Ocwen in connection with any such exercise. Optional termination or clean up call rights generally may not be exercised until the outstanding principal balance of securitized loans is reduced to a specified balance. HLSS Management, LLC (a subsidiary of HLSS acquired by New Residential in the HLSS Acquisition) has a professional services agreement with Ocwen that enables HLSS to provide certain services to Ocwen and for Ocwen to provide certain services to HLSS Management, LLC which remains in effect following the HLSS Acquisition. Services provided by New Residential under this agreement may include valuation and analysis of MSRs, capital markets activities, advance financing management, treasury management, legal services and other similar services. Services provided by Ocwen under this agreement may include business strategy, legal, tax, licensing and regulatory compliance support services, risk management services and other similar services. The services provided by the parties under this agreement are on an as-needed basis, and the fees represent actual costs incurred plus an additional markup of 15% . |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting — The accompanying consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP’’). The consolidated financial statements include the accounts of New Residential and its consolidated subsidiaries. All significant intercompany transactions and balances have been eliminated. New Residential consolidates those entities in which it has control over significant operating, financial and investing decisions of the entity, as well as those entities deemed to be variable interest entities (“VIEs”) in which New Residential is determined to be the primary beneficiary. For entities over which New Residential exercises significant influence, but which do not meet the requirements for consolidation, New Residential uses the equity method of accounting whereby it records its share of the underlying income of such entities. Distributions from equity method investees are classified in the Statements of Cash Flows based on the cumulative earnings approach, where all distributions up to cumulative earnings are classified as distributions of earnings. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE is required to be consolidated only by its primary beneficiary, which is defined as the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could be potentially significant to the VIE. To assess whether New Residential has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, New Residential considers all the facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes, first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. To assess whether New Residential has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, New Residential considers all of its economic interests and applies judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. New Residential has determined that the Buyer (Note 6) should be evaluated for consolidation under the VIE model rather than the voting interest entity model as the equity holders as a group do not have the right to direct activities that most significantly impact the entity’s economic performance. Under the VIE model, New Residential’s consolidated subsidiary, as the managing member, has both 1) the power to direct the activities of the Buyer and 2) a significant variable interest through its equity investment and, therefore, meets the primary beneficiary criterion and continues to consolidate the Buyer. The Buyer’s summary balance sheet is included in Note 6. New Residential has determined that the Consumer Loan SPVs (Note 9) should be evaluated for consolidation under the VIE model rather than the voting interest entity model as the equity holders, individually and as a group, lack the characteristics of a controlling financial interest. Under the VIE model, New Residential’s consolidated subsidiaries, the Consumer Loan Companies (Note 9), have both 1) the power to direct the most significant activities of the Consumer Loan SPVs and 2) significant variable interests in each of the Consumer Loan SPVs, through their control of the related optional redemption feature and their ownership of certain notes issued by the Consumer Loan SPVs and, therefore, meet the primary beneficiary criterion and consolidate the Consumer Loan SPVs. The Consumer Loan SPVs’ summary balance sheet is included in Note 9. New Residential’s investments in Non-Agency RMBS (Note 7) are variable interests. New Residential monitors these investments and analyzes the potential need to consolidate the related securitization entities pursuant to the VIE consolidation requirements. New Residential has not consolidated the securitization entities that issued its Non-Agency RMBS. This determination is based, in part, on New Residential’s assessment that it does not have the power to direct the activities that most significantly impact the economic performance of these entities, such as through ownership of a majority of the currently controlling class. In addition, New Residential is not obligated to provide, and has not provided, any financial support to these entities. Noncontrolling interests represent the ownership interests in certain consolidated subsidiaries held by entities or persons other than New Residential. These interests are related to noncontrolling interests in consolidated entities that hold New Residential’s investment in Servicer Advances (Note 6) and consumer loans (Note 9), as well as HLSS (Note 1) for the period of April 6, 2015 through October 23, 2015. Certain prior period amounts have been reclassified to conform to the current period’s presentation. In addition, New Residential completed a one-for-two reverse stock split in October 2014 (Note 13). The impact of this reverse stock split has been retroactively applied to all periods presented. Risks and Uncertainties — In the normal course of business, New Residential encounters primarily two significant types of economic risk: credit and market. Credit risk is the risk of default on New Residential’s investments that results from a borrower’s or counterparty’s inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of investments due to changes in prepayment rates, interest rates, spreads or other market factors, including risks that impact the value of the collateral underlying New Residential’s investments. New Residential believes that the carrying values of its investments are reasonable taking into consideration these risks along with estimated prepayments, financings, collateral values, payment histories, and other information. Furthermore, for each of the periods presented, a significant portion of New Residential’s assets are dependent on its servicers’ and subservicers’ ability to perform their obligations servicing the residential mortgage loans underlying New Residential’s investments in Excess MSRs, MSRs, Servicer Advances, Non-Agency RMBS and residential mortgage loans. If a servicer is terminated, New Residential’s right to receive its portion of the cash flows related to interests in MSRs may also be terminated. Additionally, New Residential is subject to significant tax risks. If New Residential were to fail to qualify as a REIT in any taxable year, New Residential would be subject to U.S. federal corporate income tax (including any applicable alternative minimum tax), which could be material. Unless entitled to relief under certain statutory provisions, New Residential would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification is lost. Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Comprehensive Income — Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances, excluding those resulting from investments by and distributions to owners. For New Residential’s purposes, comprehensive income represents net income, as presented in the Consolidated Statements of Income, adjusted for unrealized gains or losses on securities available for sale. INCOME RECOGNITION Investments in Excess Mortgage Servicing Rights — Excess MSRs are aggregated into pools as applicable; each pool of Excess MSRs is accounted for in the aggregate. Interest income for Excess MSRs is accreted into interest income on an effective yield or “interest” method, based upon the expected excess mortgage servicing amount through the expected life of the underlying mortgages. Changes to expected cash flows result in a cumulative retrospective adjustment, which will be recorded in the period in which the change in expected cash flows occurs. Under the retrospective method, the interest income recognized for a reporting period is measured as the difference between the amortized cost basis at the end of the period and the amortized cost basis at the beginning of the period, plus any cash received during the period. The amortized cost basis is calculated as the present value of estimated future cash flows using an effective yield, which is the yield that equates all past actual and current estimated future cash flows to the initial investment. In addition, New Residential’s policy is to recognize interest income only on its Excess MSRs in existing eligible underlying mortgages. The difference between the fair value of Excess MSRs and their amortized cost basis is recorded as “Change in fair value of investments in excess mortgage servicing rights.” Fair value is generally determined by discounting the expected future cash flows using discount rates that incorporate the market risks and liquidity premium specific to the Excess MSRs, and therefore may differ from their effective yields. Investments in MSRs — MSRs are aggregated into pools as applicable; each pool of MSRs is accounted for in the aggregate. Income from MSRs is recorded in “Servicing revenue, net” and is comprised of three components: (i) income receivable from the MSRs, less (ii) amortization of the basis of the MSRs, plus or minus (iii) the mark-to-market on the MSRs. Amortization of the basis of the MSRs is based on the remaining UPB of the residential mortgage loans underlying the MSRs relative to their UPB at acquisition. Fair value is generally determined by discounting the expected future cash flows using discount rates that incorporate the market risks and liquidity premium specific to the MSRs. Investments in Servicer Advances (“Servicer Advances”) — New Residential accounts for its investments in Servicer Advances similarly to its investments in Excess MSRs. Interest income for Servicer Advances is accreted into interest income on an effective yield or “interest” method, based upon the expected aggregate cash flows of the Servicer Advances, including the basic fee component of the related MSR (but excluding any Excess MSR component) through the expected life of the underlying mortgages, net of a portion of the basic fee component of the MSR that New Residential remits to the servicer as compensation for the servicer’s servicing activities. Changes to expected cash flows result in a cumulative retrospective adjustment, which will be recorded in the period in which the change in expected cash flows occurs. Refer to “—Investments in Excess Mortgage Servicing Rights” for a description of the retrospective method. Fair value is generally determined by discounting the expected future cash flows using discount rates that incorporate the market risks and liquidity premium specific to the Servicer Advances, and therefore may differ from their effective yields. Investments in Real Estate Securities — Discounts or premiums are accreted into interest income on an effective yield or “interest” method, based upon a comparison of actual and expected cash flows, through the expected maturity date of the security. For securities acquired at a discount for credit quality (i.e. where it is probable at acquisition that New Residential will not collect all contractually required interest and principal repayments), the difference between contractual cash flows and expected cash flows at acquisition is not accreted (non-accretable difference). For these securities, the excess of expected cash flows over the carrying value (accretable yield) is recognized as interest income on an effective yield basis. Depending on the nature of the investment, changes to expected cash flows may result in a prospective change to yield or a retrospective change which would include a catch up adjustment. Deferred fees and costs, if any, are recognized as a reduction to the interest income over the terms of the securities using the interest method. Upon settlement of securities, the specific identification method is used to determine the excess (or deficiency) of net proceeds over the net carrying value of such security recognized as a realized gain (or loss) in the period of settlement. Investments in Residential Mortgage Loans, REO and Consumer Loans — New Residential evaluates the credit quality of its loans, as of the acquisition date, for evidence of credit quality deterioration. Loans with evidence of credit deterioration since their origination, and where it is probable that New Residential will not collect all contractually required principal and interest payments, are Purchased Credit Deteriorated (“PCD”) loans. At acquisition, New Residential aggregates PCD loans into pools based on common risk characteristics and the aggregated loans are accounted for as if each pool were a single loan with a single composite interest rate and an aggregate expectation of cash flows. The excess of the total cash flows (both principal and interest) expected to be collected over the carrying value of the PCD loans is referred to as the accretable yield. This amount is not reported on New Residential’s Consolidated Balance Sheets but is accreted into interest income at a level rate of return over the remaining estimated life of the pool of loans. Loans where New Residential expects to collect all contractually required principal and interest payments are considered performing loans. Interest income on performing loans is accrued and recognized as interest income at their effective yield, which includes contractual interest and the amortization of purchase price discount or premium and deferred fees or expenses. Loans acquired with the intent to sell and loans not acquired with the intent to sell that New Residential decides to sell are classified as held-for-sale. Loans held-for-sale are measured at the lower of cost or fair value, with valuation changes recorded in impairment. Purchase price discounts or premiums are deferred in a contra loan account until the related loan is sold. The deferred discounts or premiums are an adjustment to the basis of the loan and are included in the quarterly determination of the lower of cost or fair value adjustments and/or the gain or loss recognized at the time of sale. Real estate owned (“REO”) assets are those individual properties acquired by New Residential or where New Residential receives the property in satisfaction of a debt (e.g., by taking legal title or physical possession). New Residential measures REO assets at the lower of cost or fair value, with valuation changes recorded in other income or impairment, as applicable. Impairment of Securities — Securities are considered to be impaired when it is probable that New Residential will be unable to collect all principal or interest when due according to the contractual terms of the original agreements, or for securities purchased at a discount for credit quality or that represent retained beneficial interests in securitizations, when New Residential determines that it is probable that it will be unable to collect as anticipated. The evaluation of a security’s estimated cash flows includes the following, as applicable: (i) review of the credit of the issuer or borrower, (ii) review of the credit rating of the security, (iii) review of the key terms of the security or underlying loans, (iv) review of the performance of the underlying loans, including debt service coverage and loan to value ratios, (v) analysis of the value of the underlying loans, (vi) analysis of the effect of local, industry and broader economic factors, and (vii) analysis of historical and anticipated trends in defaults, loss severities and prepayments for similar securities or underlying loans. New Residential must record a write down if it has the intent to sell a given security in an unrealized loss position, or if it is more likely than not that it will be required to sell such a security. Upon determination of impairment, New Residential records a direct write down for securities based on the estimated fair value of the security or underlying collateral using a discounted cash flow analysis or based on an observable market value. Subsequent to a determination of impairment, and a related write down, income on securities is accrued on an effective yield method from the new carrying value to the related expected cash flows, with cash received treated as a reduction of basis. Impairment of Loans — To the extent that they are classified as held-for-investment, New Residential must periodically evaluate each of these loans or loan pools for possible impairment. Impairment is indicated when it is deemed probable that New Residential will be unable to collect all amounts due according to the contractual terms of the loan, or for PCD loans, when it is deemed probable that New Residential will be unable to collect as anticipated. Upon determination of impairment, New Residential establishes an allowance for loan losses with a corresponding charge to earnings. Performing loans are aggregated into pools for the evaluation of impairment based on like characteristics, such as loan type and acquisition date. Pools of loans are evaluated based on criteria such as an analysis of borrower performance, credit ratings of borrowers, loan to value ratios, the estimated value of the underlying collateral, if any, the key terms of the loans and historical and anticipated trends in defaults and loss severities for the type and seasoning of loans being evaluated. This information is used to estimate provisions for estimated unidentified incurred losses on pools of loans. Significant judgment is required in determining impairment and in estimating the resulting loss allowance. For PCD loans, New Residential estimates the total cash flows expected to be collected over the remaining life of each pool. Probable decreases in expected cash flows trigger the recognition of impairment. Impairments are recognized through the provision for loans and an increase in the allowance for loan losses. Probable and significant increases in expected cash flows would first reverse any previously recorded allowance for loan losses with any remaining increases recognized prospectively as a yield adjustment over the remaining estimated lives of the underlying loans. A loan is determined to be past due when a monthly payment is due and unpaid for 30 days or more. Loans, other than PCD loans, are placed on nonaccrual status and considered non-performing when full payment of principal and interest is in doubt, which generally occurs when principal or interest is 120 days or more past due unless the loan is both well secured and in the process of collection. A loan may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the terms of the restructured loan. New Residential’s ability to recognize interest income on nonaccrual loans as cash interest payments are received rather than as a reduction of the carrying value of the loans is based on the recorded loan balance being deemed fully collectible. Loans held-for-sale are subject to the nonaccrual policy described above, however, as loans held-for-sale are recognized at the lower of cost or fair value, New Residential’s allowance for loan losses and charge-off policies do not apply to these loans. Accretion and Other Amortization — As reflected on the consolidated statements of cash flows, this item is comprised of the following: Year Ended December 31, 2016 2015 2014 Accretion of servicer advance interest income $ 364,350 $ 352,316 $ 190,206 Accretion of excess mortgage servicing rights income 150,141 134,565 49,180 Accretion of net discount on securities and loans (A) 253,243 65,925 47,793 Amortization of deferred financing costs (18,326 ) (26,036 ) (8,771 ) Amortization of discount on notes and bonds payable (1,476 ) (1,472 ) — $ 747,932 $ 525,298 $ 278,408 (A) Includes accretion of the accretable yield on PCD loans. Other Income (Loss), Net — This item is comprised of the following: Year Ended December 31, 2016 2015 2014 Unrealized gain (loss) on derivative instruments $ 5,774 $ (3,538 ) $ (8,847 ) Unrealized gain (loss) on other ABS (2,322 ) 879 — Gain (loss) on transfer of loans to REO 18,356 2,065 17,489 Gain (loss) on transfer of loans to other assets 2,938 (690 ) — Fee earned on deal termination — — 5,000 Gain on Excess MSR recapture agreements 2,802 2,999 1,157 Other income (loss) 935 3,674 20 $ 28,483 $ 5,389 $ 14,819 Gain (Loss) on Settlement of Investments, Net — This item is comprised of the following: Year Ended December 31, 2016 2015 2014 Gain (loss) on sale of real estate securities, net $ (27,460 ) $ 13,096 $ 65,701 Gain (loss) on sale of residential mortgage loans, net 12,142 35,175 2,644 Gain (loss) on settlement of derivatives (27,491 ) (46,982 ) (40,400 ) Gain (loss) on liquidated residential mortgage loans (1,810 ) (2,170 ) 3,285 Gain (loss) on sale of REO 4,690 (10,742 ) (3,686 ) Other gains (losses) (8,871 ) (8,003 ) 3,753 $ (48,800 ) $ (19,626 ) $ 31,297 EXPENSE RECOGNITION Interest Expense — New Residential finances certain investments using floating rate repurchase agreements and loans. Interest is expensed as incurred. General and Administrative Expenses, Loan Servicing Expense and Subservicing Expense — General and administrative expenses, including legal fees, audit fees, insurance premiums, and other costs, as well as loan servicing and subservicing expenses, and are expensed as incurred. Management Fee and Incentive Compensation to Affiliate — These represent amounts due to the Manager pursuant to the Management Agreement. For further information on the Management Agreement, see Note 15. BALANCE SHEET MEASUREMENT Investments in Servicing Related Assets — Servicing related assets consist of New Residential’s investments in Excess MSRs, MSRs and Servicer Advances. Upon acquisition, New Residential has elected to record each of such investments at fair value. New Residential elected to record its investments at fair value in order to provide users of the financial statements with better information regarding the effects of prepayment risk and other market factors on servicing related assets. Under this election, New Residential records a valuation adjustment on its investments in servicing related assets on a quarterly basis to recognize the changes in fair value in net income as described in “Income Recognition — Investments in Excess Mortgage Servicing Rights,” “Income Recognition — Investments in MSRs” and “Income Recognition — Investments in Servicer Advances.” Investments in Real Estate Securities — New Residential has classified its investments in real estate securities as available for sale. Securities available for sale are carried at market value with the net unrealized gains or losses reported as a separate component of accumulated other comprehensive income, to the extent impairment losses are considered temporary. At disposition, the net realized gain or loss is determined on the basis of the amortized cost of the specific investments and is included in earnings. Unrealized losses on securities are charged to earnings if they reflect a decline in value that is other-than-temporary. Investments in Residential Mortgage Loans and Consumer Loans — Loans for which New Residential has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified as held-for-investment. Performing loans held-for-investment are presented at the aggregate unpaid principal balance adjusted for any unamortized premium or discount, deferred fees or expenses, an allowance for loan losses, charge-offs and write-down for impaired loans. PCD loans held-for-investment are initially recorded at their purchase price at acquisition and are subsequently measured net of any allowance for loan losses. To the extent that the loans are classified as held-for-investment, New Residential periodically evaluates such loans for possible impairment as described in “—Impairment of Loans.” Loans which New Residential does not have the intent or the ability to hold into the foreseeable future are considered held-for-sale and are carried at the lower of their amortized cost basis or fair value. New Residential discontinues the accretion of discounts or amortization of premiums on loans if they are reclassified from held-for-investment to held-for-sale. Cash and Cash Equivalents and Restricted Cash — New Residential considers all highly liquid short-term investments with maturities of 90 days or less when purchased to be cash equivalents. Substantially all amounts on deposit with major financial institutions exceed insured limits. As of December 31, 2016 and 2015 , New Residential held $82.1 million and $93.8 million , respectively, of restricted cash related to the financing of the Servicer Advances (Note 6) that has been pledged to the note holders for interest and fees payable. As of December 31, 2016 and 2015 , New Residential also held $22.3 million and $0.9 million , respectively, of restricted cash related to financing requirements of the Secured Corporate Notes (Note 11). Derivatives — New Residential financed certain investments with the same counterparty from which it purchased those investments, and accounted for the contemporaneous purchase of the investments and the associated financings as “linked transactions” prior to January 1, 2015. Accordingly, New Residential recorded a non-hedge derivative instrument on a net basis, with changes in market value recorded as “—Other Income” in the Consolidated Statements of Income. In the Consolidated Statement of Cash Flows, New Residential presented the linked transactions on a gross basis with the related asset purchased reflected as an investment activity and the related financing as a financing activity. New Residential also entered into various economic hedges, as further described in Note 10, that are marked to fair value on a periodic basis through “—Other Income.” Income Taxes — New Residential operates so as to qualify as a REIT under the requirements of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. Requirements for qualification as a REIT include various restrictions on ownership of New Residential’s stock, requirements concerning distribution of taxable income and certain restrictions on the nature of assets and sources of income. A REIT must distribute at least 90% of its taxable income to its stockholders (subject to certain adjustments). Distributions may extend until timely filing of New Residential’s tax return in the subsequent taxable year. Qualifying distributions of taxable income are deductible by a REIT in computing taxable income. Certain activities of New Residential are conducted through taxable REIT subsidiaries (“TRSs”) and therefore are subject to federal and state income taxes. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases upon the change in tax status. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. New Residential recognizes tax benefits for uncertain tax positions only if it is more likely than not that the position is sustainable based on its technical merits. Interest and penalties on uncertain tax positions are included as a component of the provision for income taxes on the consolidated statements of operations. Other Assets and Other Liabilities — Other assets and liabilities are comprised of the following: Other Assets Accrued Expenses and Other Liabilities December 31, December 31, 2016 2015 2016 2015 Margin receivable, net $ 55,481 $ 54,459 Interest payable $ 23,108 $ 18,268 Other receivables (A) 16,350 5,829 Accounts payable 31,299 18,650 Principal paydown receivable 999 795 Derivative liabilities (Note 10) 3,021 13,443 Receivable from government agency (B) 54,706 68,833 Current taxes payable 2,314 1,573 Call rights 337 414 Due to servicers 13,032 — Derivative assets (Note 10) 6,762 2,689 Deferred purchase price of MSRs 90,058 — Interest receivable 51,739 36,963 Other liabilities 8,118 6,112 Ginnie Mae EBO servicer advance receivable, net (C) 14,829 49,725 $ 170,950 $ 58,046 Due from servicers 22,134 5,064 Servicer advances receivable, net (D) 47,088 — Other assets 21,161 14,675 $ 291,586 $ 239,446 (A) Primarily includes a receivable from Ocwen related to their servicer rating downgrade, servicing fee receivables and receivables related to residual securities owned as of December 31, 2016 . (B) Represents claims receivable from the FHA on EBO and reverse mortgage loans for which foreclosure has been completed and for which New Residential has made or intends to make a claim on the FHA guarantee. (C) Represents an HLSS (Note 1) loan to a counterparty collateralized by Servicer Advances on Ginnie Mae EBO loans. (D) Represents Servicer Advances due to New Residential’s licensed servicer subsidiary, NRM (Note 5). These advances are recorded at cost, subject to impairment. Any related purchase discounts are accreted into interest income on a straight-line basis over the estimated weighted average life of the advances. Repurchase Agreements and Notes and Bonds Payable — New Residential’s repurchase agreements are generally short-term debt that expire within one year . Such agreements and notes and bonds payable are carried at their contractual amounts, as specified by each repurchase or financing agreement, and generally treated as collateralized financing transactions. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenues from Contracts with Customers (Topic 606) . The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In effect, companies will be required to exercise further judgment and make more estimates prospectively. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU No. 2014-09 is effective for New Residential in the first quarter of 2018. Early adoption is only permitted after December 31, 2016. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance in ASU No. 2014-09. New Residential has evaluated the new guidance and determined that interest income, gains and losses on financial instruments and income from servicing residential mortgage loans are outside the scope of ASC No. 606. For income from servicing residential mortgage loans, New Residential considered that the FASB Transition Resource Group members generally agreed that an entity should look to ASC No. 860, Transfers and Servicing, to determine the appropriate accounting for these fees and ASC No. 606 contains a scope exception for contracts that fall under ASC No. 860. As a result, New Residential does not expect the adoption of ASU No. 2014-09 to have a material impact on its consolidated financial statements. In June 2014, |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING New Residential conducts its business through the following segments: (i) investments in Excess MSRs, (ii) investments in MSRs, (iii) investments in Servicer Advances, (iv) investments in real estate securities, (v) investments in residential mortgage loans, (vi) investments in consumer loans, and (vii) corporate. The corporate segment consists primarily of (i) general and administrative expenses, (ii) the management fees and incentive compensation related to the Management Agreement and (iii) corporate cash and related interest income. Securities owned by New Residential (Note 7) that are collateralized by Servicer Advances are included in the Servicer Advances segment. Secured corporate loans effectively collateralized by Excess MSRs are included in the Excess MSRs segment. Summary financial data on New Residential’s segments is given below, together with a reconciliation to the same data for New Residential as a whole: Servicing Related Assets Residential Securities and Loans Excess MSRs MSRs Servicer Advances Real Estate Securities Residential Mortgage Loans Consumer Loans Corporate Total Year Ended December 31, 2016 Interest income $ 150,141 $ — $ 369,809 $ 265,862 $ 56,249 $ 232,750 $ 1,924 $ 1,076,735 Interest expense 19,160 — 224,879 49,283 25,675 54,427 — 373,424 Net interest income (expense) 130,981 — 144,930 216,579 30,574 178,323 1,924 703,311 Impairment — — — 10,264 23,870 53,846 — 87,980 Servicing revenue, net — 118,169 — — — — — 118,169 Other income (loss) 11,398 — (4,624 ) (47,747 ) 26,779 76,518 13 62,337 Operating expenses 1,259 10,693 3,724 1,480 14,961 39,466 102,627 174,210 Income (Loss) Before Income Taxes 141,120 107,476 136,582 157,088 18,522 161,529 (100,690 ) 621,627 Income tax expense (benefit) — 15,683 21,036 — 2,117 75 — 38,911 Net Income (Loss) $ 141,120 $ 91,793 $ 115,546 $ 157,088 $ 16,405 $ 161,454 $ (100,690 ) $ 582,716 Noncontrolling interests in income (loss) of consolidated subsidiaries $ — $ — $ 40,136 $ — $ — $ 38,127 $ — $ 78,263 Net income (loss) attributable to common stockholders $ 141,120 $ 91,793 $ 75,410 $ 157,088 $ 16,405 $ 123,327 $ (100,690 ) $ 504,453 Servicing Related Assets Residential Securities and Loans Excess MSRs MSRs Servicer Advances Real Estate Securities Residential Mortgage Loans Consumer Loans Corporate Total December 31, 2016 Investments $ 1,594,243 $ 659,483 $ 5,806,740 $ 4,973,711 $ 947,017 $ 1,799,486 $ — $ 15,780,680 Cash and cash equivalents 2,225 95,840 94,368 8,405 5,366 27,962 56,436 290,602 Restricted cash 24,538 — 82,122 — — 56,435 — 163,095 Other assets 2,404 40,608 180,705 1,753,076 100,951 35,921 16,993 2,130,658 Total assets $ 1,623,410 $ 795,931 $ 6,163,935 $ 6,735,192 $ 1,053,334 $ 1,919,804 $ 73,429 $ 18,365,035 Debt $ 729,145 $ — $ 5,698,160 $ 4,203,249 $ 783,006 $ 1,767,676 $ — $ 13,181,236 Other liabilities 2,189 97,923 24,123 1,394,682 22,689 6,382 167,634 1,715,622 Total liabilities 731,334 97,923 5,722,283 5,597,931 805,695 1,774,058 167,634 14,896,858 Total equity 892,076 698,008 441,652 1,137,261 247,639 145,746 (94,205 ) 3,468,177 Noncontrolling interests in equity of consolidated subsidiaries — — 173,057 — — 35,020 — 208,077 Total New Residential stockholders’ equity $ 892,076 $ 698,008 $ 268,595 $ 1,137,261 $ 247,639 $ 110,726 $ (94,205 ) $ 3,260,100 Investments in equity method investees $ 194,788 $ — $ — $ — $ — $ — $ — $ 194,788 Servicing Related Assets Residential Securities and Loans Excess MSRs Servicer Advances Real Estate Securities Residential Mortgage Loans Consumer Loans Corporate Total Year Ended December 31, 2015 Interest income $ 134,565 $ 354,616 $ 110,123 $ 43,180 $ 1 $ 2,587 $ 645,072 Interest expense 11,625 216,837 18,230 21,510 1,615 4,196 274,013 Net interest income (expense) 122,940 137,779 91,893 21,670 (1,614 ) (1,609 ) 371,059 Impairment — — 5,788 18,596 — — 24,384 Other income (loss) 72,802 (53,426 ) (33,604 ) 15,405 43,954 (3,102 ) 42,029 Operating expenses 1,101 14,316 1,227 13,415 228 87,536 117,823 Income (Loss) Before Income Taxes 194,641 70,037 51,274 5,064 42,112 (92,247 ) 270,881 Income tax expense (benefit) — (8,127 ) — (3,199 ) 325 — (11,001 ) Net Income (Loss) $ 194,641 $ 78,164 $ 51,274 $ 8,263 $ 41,787 $ (92,247 ) $ 281,882 Noncontrolling interests in income (loss) of consolidated subsidiaries $ — $ 18,407 $ — $ — $ — $ (5,161 ) $ 13,246 Net income (loss) attributable to common stockholders $ 194,641 $ 59,757 $ 51,274 $ 8,263 $ 41,787 $ (87,086 ) $ 268,636 Servicing Related Assets Residential Securities and Loans Excess MSRs Servicer Advances Real Estate Securities Residential Mortgage Loans Consumer Loans Corporate Total December 31, 2015 Investments $ 1,798,738 $ 7,857,841 $ 2,070,834 $ 1,157,433 $ — $ — $ 12,884,846 Cash and cash equivalents 18,507 95,686 42,984 13,262 6,359 73,138 249,936 Restricted cash 878 93,824 — — — — 94,702 Derivative assets — 2,689 — — — — 2,689 Other assets 34 198,962 1,600,091 106,330 1,767 53,365 1,960,549 Total assets $ 1,818,157 $ 8,249,002 $ 3,713,909 $ 1,277,025 $ 8,126 $ 126,503 $ 15,192,722 Debt $ 182,978 $ 7,550,680 $ 2,513,538 $ 1,004,980 $ 40,446 $ — $ 11,292,622 Other liabilities 2,277 18,153 740,392 14,382 459 137,857 913,520 Total liabilities 185,255 7,568,833 3,253,930 1,019,362 40,905 137,857 12,206,142 Total equity 1,632,902 680,169 459,979 257,663 (32,779 ) (11,354 ) 2,986,580 Noncontrolling interests in equity of consolidated subsidiaries — 190,647 — — — — 190,647 Total New Residential stockholders’ equity $ 1,632,902 $ 489,522 $ 459,979 $ 257,663 $ (32,779 ) $ (11,354 ) $ 2,795,933 Investments in equity method investees $ 217,221 $ — $ — $ — $ — $ — $ 217,221 Servicing Related Assets Residential Securities and Loans Excess MSRs Servicer Advances Real Estate Securities Residential Mortgage Loans Consumer Loans Corporate Total Year Ended December 31, 2014 Interest income $ 49,180 $ 190,206 $ 60,208 $ 47,262 $ — $ 1 $ 346,857 Interest expense 1,294 110,968 12,689 11,073 4,184 500 140,708 Net interest income (expense) 47,886 79,238 47,519 36,189 (4,184 ) (499 ) 206,149 Impairment — — 1,391 9,891 — — 11,282 Other income 100,052 83,828 14,589 30,759 145,860 — 375,088 Operating expenses 713 2,183 10,012 12,688 917 78,386 104,899 Income (Loss) Before Income Taxes 147,225 160,883 50,705 44,369 140,759 (78,885 ) 465,056 Income tax expenses — 20,806 — 2,059 92 — 22,957 Net Income (Loss) $ 147,225 $ 140,077 $ 50,705 $ 42,310 $ 140,667 $ (78,885 ) $ 442,099 Noncontrolling interests in income of consolidated subsidiaries $ — $ 89,222 $ — $ — $ — $ — $ 89,222 Net income (loss) attributable to common stockholders $ 147,225 $ 50,855 $ 50,705 $ 42,310 $ 140,667 $ (78,885 ) $ 352,877 |
INVESTMENTS IN EXCESS MORTGAGE
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing [Abstract] | |
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS | INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS The following table presents activity related to the carrying value of New Residential’s direct investments in Excess MSRs: Servicer Nationstar SLS (A) Ocwen (B) Total Balance as of December 31, 2014 $ 409,076 $ 8,657 $ — $ 417,733 Transfers from indirect ownership 98,258 — — 98,258 Purchases 254,149 — 917,078 1,171,227 Interest income 66,039 180 68,346 134,565 Other income 2,999 — — 2,999 Proceeds from repayments (131,621 ) (1,291 ) (148,996 ) (281,908 ) Change in fair value (596 ) (2,239 ) 41,478 38,643 Balance as of December 31, 2015 698,304 5,307 877,906 1,581,517 Purchases — 124 — 124 Interest income 63,772 (244 ) 86,613 150,141 Other income 2,802 — — 2,802 Proceeds from repayments (145,186 ) (1,015 ) (181,631 ) (327,832 ) Change in fair value (8,399 ) (237 ) 1,339 (7,297 ) Balance as of December 31, 2016 $ 611,293 $ 3,935 $ 784,227 $ 1,399,455 (A) Specialized Loan Servicing LLC (“SLS”). See Note 6 for a description of the SLS Transaction. (B) Ocwen services the loans underlying the Excess MSRs and Servicer Advances acquired from HLSS (Note 1). Nationstar, SLS, or Ocwen, as applicable, as servicer, performs all servicing and advancing functions, and retains the ancillary income, servicing obligations and liabilities as the servicer of the underlying loans in the portfolio. New Residential has entered into a “recapture agreement” with respect to each of the Excess MSR investments serviced by Nationstar and SLS. Under such arrangements, New Residential is generally entitled to a pro rata interest in the Excess MSRs on any initial or subsequent refinancing by Nationstar of a loan in the original portfolio. New Residential has a similar recapture agreement with Ocwen; however, this agreement allows for Ocwen to retain the Excess MSR on recaptured loans up to a threshold and no payments have been made to New Residential under such arrangement to date. These recapture agreements do not apply to New Residential’s investments in Servicer Advances (Note 6). New Residential elected to record its investments in Excess MSRs at fair value pursuant to the fair value option for financial instruments in order to provide users of the financial statements with better information regarding the effects of prepayment risk and other market factors on the Excess MSRs. The following is a summary of New Residential’s direct investments in Excess MSRs: December 31, 2016 UPB of Underlying Mortgages Interest in Excess MSR Weighted Average Life Years (A) Amortized Cost Basis (B) Carrying Value (C) New Residential (D) Fortress-managed funds Nationstar Agency Original and Recaptured Pools $ 78,295,454 32.5% - 66.7% (53.3%) 0.0% - 40.0% 20.0% - 35.0% 5.9 $ 296,508 $ 330,323 Recapture Agreements — 32.5% - 66.7% (53.3%) 0.0% - 40.0% 20.0% - 35.0% 12.3 25,524 51,434 78,295,454 6.4 322,032 381,757 Non-Agency (E) Nationstar and SLS Serviced: Original and Recaptured Pools $ 78,209,375 33.3% - 100.0% (59.4%) 0.0% - 50.0% 0.0% - 33.3% 5.2 $ 183,775 $ 219,980 Recapture Agreements — 33.3% - 100.0% (59.4%) 0.0% - 50.0% 0.0% - 33.3% 12.2 11,370 13,491 Ocwen Serviced Pools 121,471,168 100.0% —% —% 6.6 741,411 784,227 199,680,543 6.4 936,556 1,017,698 Total $ 277,975,997 6.4 $ 1,258,588 $ 1,399,455 December 31, 2015 UPB of Underlying Mortgages Interest in Excess MSR Weighted Average Life Years (A) Amortized Cost Basis (B) Carrying Value (C) New Residential (D) Fortress-managed funds Nationstar Agency Original and Recaptured Pools $ 93,441,696 32.5% - 66.7% (53.2%) 0.0% - 40.0% 20.0% - 35.0% 5.8 $ 335,478 $ 378,083 Recapture Agreements — 32.5% - 66.7% (53.2%) 0.0% - 40.0% 20.0% - 35.0% 12.0 36,627 59,118 93,441,696 6.4 372,105 437,201 Non-Agency (E) Nationstar and SLS Serviced: Original and Recaptured Pools $ 94,923,975 33.3% - 80.0% (58.9%) 0.0% - 50.0% 0.0% - 33.3% 5.2 $ 210,691 $ 250,662 Recapture Agreements — 33.3% - 80.0% (58.9%) 0.0% - 50.0% 0.0% - 33.3% 12.3 14,130 15,748 Ocwen Serviced Pools 141,002,300 100.0% —% —% 6.2 836,428 877,906 235,926,275 6.1 1,061,249 1,144,316 Total $ 329,367,971 6.2 $ 1,433,354 $ 1,581,517 (A) Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment. (B) The amortized cost basis of the recapture agreements is determined based on the relative fair values of the recapture agreements and related Excess MSRs at the time they were acquired. (C) Carrying Value represents the fair value of the pools or recapture agreements, as applicable. (D) Amounts in parentheses represent weighted averages. (E) New Residential also invested in related Servicer Advances, including the basic fee component of the related MSR as of December 31, 2016 and 2015 (Note 6) on $186.4 billion and $220.3 billion UPB, respectively, underlying these Excess MSRs. Changes in fair value recorded in other income is comprised of the following: Year Ended December 31, 2016 2015 2014 Original and Recaptured Pools $ (11,221 ) $ 34,936 $ 35,000 Recapture Agreements 3,924 3,707 6,615 $ (7,297 ) $ 38,643 $ 41,615 As of December 31, 2016 and 2015 , weighted average discount rates of 9.8% and 9.8% , respectively, were used to value New Residential’s investments in Excess MSRs (directly and through equity method investees). New Residential entered into investments in joint ventures (“Excess MSR joint ventures”) jointly controlled by New Residential and Fortress-managed funds investing in Excess MSRs. New Residential elected to record these investments at fair value pursuant to the fair value option for financial instruments to provide users of the financial statements with better information regarding the effects of prepayment risk and other market factors. The following tables summarize the financial results of the Excess MSR joint ventures, accounted for as equity method investees, held by New Residential: December 31, 2016 2015 Excess MSR assets $ 372,391 $ 421,999 Other assets 17,184 12,442 Other liabilities — — Equity $ 389,575 $ 434,441 New Residential’s investment $ 194,788 $ 217,221 New Residential’s ownership 50.0 % 50.0 % Year Ended December 31, 2016 2015 2014 Interest income $ 36,502 $ 51,811 $ 67,698 Other income (loss) (3,359 ) 10,615 46,961 Expenses (91 ) (107 ) (99 ) Net income $ 33,052 $ 62,319 $ 114,560 New Residential’s investments in equity method investees changed during the years ended December 31, 2016 and 2015 as follows: 2016 2015 Balance at beginning of period $ 217,221 $ 330,876 Contributions to equity method investees — — Transfers to direct ownership — (98,258 ) Distributions of earnings from equity method investees (22,046 ) (37,874 ) Distributions of capital from equity method investees (16,913 ) (8,683 ) Change in fair value of investments in equity method investees 16,526 31,160 Balance at end of period $ 194,788 $ 217,221 The following is a summary of New Residential’s Excess MSR investments made through equity method investees: December 31, 2016 Unpaid Principal Balance Investee Interest in Excess MSR (A) New Residential Interest in Investees Amortized Cost Basis (B) Carrying Value (C) Weighted Average Life (Years) (D) Agency Original and Recaptured Pools $ 60,677,300 66.7% 50.0% $ 247,105 $ 314,401 5.8 Recapture Agreements — 66.7% 50.0% 29,974 57,990 12.2 Total $ 60,677,300 $ 277,079 $ 372,391 6.5 December 31, 2015 Unpaid Principal Balance Investee Interest in Excess MSR (A) New Residential Interest in Investees Amortized Cost Basis (B) Carrying Value (C) Weighted Average Life (Years) (D) Agency Original and Recaptured Pools $ 73,058,050 66.7% 50.0% $ 275,338 $ 351,275 5.7 Recapture Agreements — 66.7% 50.0% 45,421 70,724 11.9 $ 73,058,050 $ 320,759 $ 421,999 6.6 (A) The remaining interests are held by Nationstar. (B) Represents the amortized cost basis of the equity method investees in which New Residential holds a 50% interest. The amortized cost basis of the recapture agreements is determined based on the relative fair values of the recapture agreements and related Excess MSRs at the time they were acquired. (C) Represents the carrying value of the Excess MSRs held in equity method investees, in which New Residential holds a 50% interest. Carrying value represents the fair value of the pools or recapture agreements, as applicable. (D) The weighted average life represents the weighted average expected timing of the receipt of cash flows of each investment. The table below summarizes the geographic distribution of the underlying residential mortgage loans of the Excess MSR investments: Aggregate Direct and Equity Method Investees Percentage of Total Outstanding Unpaid Principal Amount December 31, State Concentration 2016 2015 California 24.1 % 24.2 % Florida 8.6 % 8.6 % New York 7.9 % 7.4 % Texas 4.6 % 4.6 % New Jersey 4.2 % 4.1 % Maryland 3.7 % 3.7 % Illinois 3.5 % 3.5 % Virginia 3.1 % 3.1 % Georgia 3.1 % 3.1 % Massachusetts 2.7 % 2.7 % Washington 2.6 % 2.7 % Arizona 2.5 % 2.5 % Other U.S. 29.4 % 29.8 % 100.0 % 100.0 % Geographic concentrations of investments expose New Residential to the risk of economic downturns within the relevant states. Any such downturn in a state where New Residential holds significant investments could affect the underlying borrower’s ability to make mortgage payments and therefore could have a meaningful, negative impact on the Excess MSRs. See Note 11 regarding the financing of Excess MSRs. INVESTMENTS IN MORTGAGE SERVICING RIGHTS In 2016, a subsidiary of New Residential, New Residential Mortgage LLC (“NRM”), became a licensed mortgage servicer. NRM is presently licensed or otherwise eligible to hold MSRs in all states within the United States and the District of Columbia. Additionally, NRM has received approval from the FHA to hold MSRs associated with FHA-insured mortgage loans, from the Federal National Mortgage Association (“Fannie Mae”) to hold MSRs associated with loans owned by Fannie Mae, and from the Federal Home Loan Mortgage Corporation (“Freddie Mac”) to hold MSRs associated with loans owned by Freddie Mac. As an approved Fannie Mae Servicer, Freddie Mac Servicer and FHA-approved mortgagee, NRM is required to conduct aspects of its operations in accordance with applicable policies and guidelines published by FHA, Fannie Mae and Freddie Mac in order to maintain those approvals. As of December 31, 2016, NRM is in compliance with such policies and guidelines, as well as with other ongoing requirements applicable to mortgage loan servicers under applicable state and federal laws. NRM engages third party licensed mortgage servicers as subservicers to perform the operational servicing duties in connection with the MSRs it acquires, in exchange for a subservicing fee which is recorded as “Subservicing expense” on New Residential’s Consolidated Statements of Income. New Residential has entered into a “recapture agreement” with respect to each of its MSR investments subserviced by Ditech (defined below). Under the recapture agreements, New Residential is generally entitled to the MSRs on any initial or subsequent refinancing by Ditech of a loan in the original portfolio. Walter Transaction On August 8, 2016, NRM entered into a flow and bulk agreement for the purchase and sale of mortgage servicing rights (the “Walter Purchase Agreement”) with Ditech Financial LLC (“Ditech”), a subsidiary of Walter Investment Management Corp. Pursuant to the Walter Purchase Agreement, NRM agreed to (i) purchase the MSRs and related Servicer Advances with respect to a pool of existing Fannie Mae residential mortgage loans with a total UPB of approximately $32.3 billion (the “Walter Existing MSRs”) for a purchase price of approximately $211.4 million and $27.4 million , respectively, subject to certain adjustments set forth in the Walter Purchase Agreement, and (ii) provide ongoing daily pricing to Ditech for the purchase of MSRs from Ditech relating to new residential mortgage loans originated or purchased by Ditech on a flow basis and pooled into Fannie Mae, Freddie Mac or, if applicable, Ginnie Mae securities (the “Walter Flow MSRs”). The purchase of the Walter Existing MSRs closed on October 3, 2016. The initial term of the Walter Purchase Agreement is three years, with annual, one -year renewals thereafter, subject to certain termination rights; provided, that, NRM may decline to provide pricing for Walter Flow MSRs on any day and may terminate the Walter Purchase Agreement with respect to Walter Flow MSRs on 30 days’ notice. The purchase of the Walter Existing MSRs and any Walter Flow MSRs is subject to, among other customary conditions, the approval of the applicable Agencies, all of which were obtained for the Walter Existing MSRs purchased. Ditech will initially service the residential mortgage loans related to the Walter Existing MSRs and the Walter Flow MSRs pursuant to the Walter Subservicing Agreement referred to below. On August 8, 2016, in connection with the Walter Purchase Agreement, Walter Investment Management Corp. (together with its applicable subsidiaries, including Ditech, “Walter”), a Maryland corporation and the parent of Ditech, provided NRM with a payment and performance guaranty of Ditech’s obligations, including repurchase and indemnification obligations, under the Walter Purchase Agreement. On August 8, 2016, in connection with the Walter Purchase Agreement, NRM and Ditech entered into a subservicing agreement (the “Walter Subservicing Agreement”), pursuant to which Ditech agreed to act as subservicer for NRM and perform all of the actual servicing activities (“subservicing”) required under the servicing agreements relating to the Walter Existing MSRs, any Walter Flow MSRs purchased by NRM under the Walter Purchase Agreement and certain other MSRs that may be acquired in the future by NRM. Under the Walter Subservicing Agreement and related documents, Ditech will perform all daily servicing obligations on behalf of NRM, including collecting payments from borrowers and offering refinancing options to borrowers for purposes of minimizing portfolio runoff. Ditech agreed to perform subservicing on behalf of NRM at fixed prices set forth in the Walter Subservicing Agreement for an initial term of one year, with annual, one -year renewals thereafter, subject to certain termination rights set forth in the Walter Subservicing Agreement. With respect to NRM, the initial term of the Walter Subservicing Agreement will expire on the first anniversary of the effective date and shall automatically terminate unless renewed on a month-by-month basis, subject to certain termination rights set forth in the Walter Subservicing Agreement. NRM is responsible for all advance obligations related to the Walter Existing MSRs and Walter Flow MSRs. Based on the terms of the Walter Subservicing Agreement, the estimated weighted average subservicing rate for the life of the Walter Existing MSRs is 7.7 basis points (bps). In addition, on August 8, 2016, New Residential entered into a “recapture agreement” with respect to the MSRs subserviced by Ditech. Under the recapture agreement, New Residential is entitled to the MSRs on any initial or subsequent refinancing by Ditech of a loan underlying the Walter Existing MSRs or Walter Flow MSRs. On December 1, 2016, pursuant to the Walter Purchase Agreement, NRM purchased Walter Flow MSRs and Servicer Advances with respect to a pool of Fannie Mae and Freddie Mac residential mortgage loans with a total UPB of approximately $4.8 billion for a purchase price of approximately $26.4 million and $3.9 million , respectively. Ditech will subservice the related residential mortgage loans under the Walter Subservicing Agreement described above. WCO Transaction On November 10, 2016, NRM and Walter Capital Opportunity, LP and its subsidiaries (“WCO”) entered into an agreement to purchase the MSRs and related Servicer Advances with respect to a pool of existing Fannie Mae and Freddie Mac residential mortgage loans with a total UPB of approximately $32.5 billion for a purchase price of approximately $244.3 million and $34.8 million , respectively. The purchase included multiple settlement dates in December 2016. Ditech will subservice the related residential mortgage loans under the Walter Subservicing Agreement described above. FirstKey Transaction On December 1, 2016, NRM and FirstKey Mortgage, LLC (“FirstKey”) entered into an agreement to purchase the MSRs and related Servicer Advances (the “FirstKey Purchase Agreement”) with respect to a pool of existing Fannie Mae and Freddie Mac residential mortgage loans with an aggregate total UPB of approximately $12.5 billion for a purchase price of approximately $89.1 million and $2.1 million , respectively. The purchase settled in December 2016. Pursuant to the FirstKey Purchase Agreement, FirstKey will continue to perform the servicing duties for the related residential mortgage loans until those duties are transferred to a subservicer appointed by NRM. PHH Transaction On December 28, 2016, NRM entered into an agreement with PHH Mortgage Corporation and its subsidiaries (“PHH”) to purchase the MSRs and related Servicer Advances with respect to approximately $72.0 billion in total UPB of seasoned Agency and private-label residential mortgage loans, which is expected to close beginning in the second quarter of 2017, subject to GSE and other regulatory approvals and other customary closing conditions. Concurrently with the purchase agreement, NRM entered into a subservicing agreement with PHH, pursuant to which PHH Mortgage, a wholly owned subsidiary of PHH, will subservice the residential mortgage loans underlying the MSRs acquired by NRM. New Residential records its investments in MSRs at fair value at acquisition and has elected to subsequently measure at fair value pursuant to the fair value measurement method. Servicing revenue, net recognized by New Residential related to its investments in MSRs was comprised of the following: Year Ended December 31, 2016 Servicing fee revenue $ 29,168 Ancillary and other fees 676 Servicing fee revenue and fees 29,844 Amortization of servicing rights (15,354 ) Change in valuation inputs and assumptions 103,679 Servicing revenue, net $ 118,169 The following table presents activity related to the carrying value of New Residential’s investments in MSRs: Subservicer Ditech FirstKey Total Balance as of December 31, 2015 $ — $ — $ — Purchases 482,102 89,056 571,158 Amortization of servicing rights (A) (13,895 ) (1,459 ) (15,354 ) Change in valuation inputs and assumptions 77,804 25,875 103,679 Balance as of December 31, 2016 $ 546,011 $ 113,472 $ 659,483 (A) Based on the ratio of the current UPB of the underlying residential mortgage loans relative to the original UPB of the underlying residential mortgage loans. The following is a summary of New Residential’s investments in MSRs as of December 31, 2016 : UPB of Underlying Mortgages Weighted Average Life (Years) (A) Amortized Cost Basis Carrying Value (B) Agency Ditech subserviced pools $ 67,560,362 7.1 $ 468,207 $ 546,011 FirstKey subserviced pools 12,374,940 6.8 87,597 113,472 Total $ 79,935,302 7.0 $ 555,804 $ 659,483 (A) Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment. (B) Carrying Value represents fair value. As of December 31, 2016 , a weighted average discount rate of 12.0% was used to value New Residential’s investments in MSRs. The table below summarizes the geographic distribution of the underlying residential mortgage loans of the investments in MSRs: Percentage of Total Outstanding Unpaid Principal Amount State Concentration December 31, 2016 California 20.5 % Florida 7.3 % Texas 6.3 % New Jersey 4.5 % Illinois 4.1 % Massachusetts 4.1 % Arizona 3.3 % Washington 3.2 % Michigan 3.1 % Maryland 3.0 % Other U.S. 40.6 % 100.0 % Geographic concentrations of investments expose New Residential to the risk of economic downturns within the relevant states. Any such downturn in a state where New Residential holds significant investments could affect the underlying borrower’s ability to make mortgage payments and therefore could have a meaningful, negative impact on the MSRs. In addition to receiving cash flows from the MSRs, NRM as servicer has the obligation to fund future Servicer Advances on the underlying pool of mortgages (Note 14). These Servicer Advances are recorded when advanced and are included in Other Assets. |
INVESTMENTS IN MORTGAGE SERVICI
INVESTMENTS IN MORTGAGE SERVICING RIGHTS | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing [Abstract] | |
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS, EQUITY METHOD INVESTEES | INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS The following table presents activity related to the carrying value of New Residential’s direct investments in Excess MSRs: Servicer Nationstar SLS (A) Ocwen (B) Total Balance as of December 31, 2014 $ 409,076 $ 8,657 $ — $ 417,733 Transfers from indirect ownership 98,258 — — 98,258 Purchases 254,149 — 917,078 1,171,227 Interest income 66,039 180 68,346 134,565 Other income 2,999 — — 2,999 Proceeds from repayments (131,621 ) (1,291 ) (148,996 ) (281,908 ) Change in fair value (596 ) (2,239 ) 41,478 38,643 Balance as of December 31, 2015 698,304 5,307 877,906 1,581,517 Purchases — 124 — 124 Interest income 63,772 (244 ) 86,613 150,141 Other income 2,802 — — 2,802 Proceeds from repayments (145,186 ) (1,015 ) (181,631 ) (327,832 ) Change in fair value (8,399 ) (237 ) 1,339 (7,297 ) Balance as of December 31, 2016 $ 611,293 $ 3,935 $ 784,227 $ 1,399,455 (A) Specialized Loan Servicing LLC (“SLS”). See Note 6 for a description of the SLS Transaction. (B) Ocwen services the loans underlying the Excess MSRs and Servicer Advances acquired from HLSS (Note 1). Nationstar, SLS, or Ocwen, as applicable, as servicer, performs all servicing and advancing functions, and retains the ancillary income, servicing obligations and liabilities as the servicer of the underlying loans in the portfolio. New Residential has entered into a “recapture agreement” with respect to each of the Excess MSR investments serviced by Nationstar and SLS. Under such arrangements, New Residential is generally entitled to a pro rata interest in the Excess MSRs on any initial or subsequent refinancing by Nationstar of a loan in the original portfolio. New Residential has a similar recapture agreement with Ocwen; however, this agreement allows for Ocwen to retain the Excess MSR on recaptured loans up to a threshold and no payments have been made to New Residential under such arrangement to date. These recapture agreements do not apply to New Residential’s investments in Servicer Advances (Note 6). New Residential elected to record its investments in Excess MSRs at fair value pursuant to the fair value option for financial instruments in order to provide users of the financial statements with better information regarding the effects of prepayment risk and other market factors on the Excess MSRs. The following is a summary of New Residential’s direct investments in Excess MSRs: December 31, 2016 UPB of Underlying Mortgages Interest in Excess MSR Weighted Average Life Years (A) Amortized Cost Basis (B) Carrying Value (C) New Residential (D) Fortress-managed funds Nationstar Agency Original and Recaptured Pools $ 78,295,454 32.5% - 66.7% (53.3%) 0.0% - 40.0% 20.0% - 35.0% 5.9 $ 296,508 $ 330,323 Recapture Agreements — 32.5% - 66.7% (53.3%) 0.0% - 40.0% 20.0% - 35.0% 12.3 25,524 51,434 78,295,454 6.4 322,032 381,757 Non-Agency (E) Nationstar and SLS Serviced: Original and Recaptured Pools $ 78,209,375 33.3% - 100.0% (59.4%) 0.0% - 50.0% 0.0% - 33.3% 5.2 $ 183,775 $ 219,980 Recapture Agreements — 33.3% - 100.0% (59.4%) 0.0% - 50.0% 0.0% - 33.3% 12.2 11,370 13,491 Ocwen Serviced Pools 121,471,168 100.0% —% —% 6.6 741,411 784,227 199,680,543 6.4 936,556 1,017,698 Total $ 277,975,997 6.4 $ 1,258,588 $ 1,399,455 December 31, 2015 UPB of Underlying Mortgages Interest in Excess MSR Weighted Average Life Years (A) Amortized Cost Basis (B) Carrying Value (C) New Residential (D) Fortress-managed funds Nationstar Agency Original and Recaptured Pools $ 93,441,696 32.5% - 66.7% (53.2%) 0.0% - 40.0% 20.0% - 35.0% 5.8 $ 335,478 $ 378,083 Recapture Agreements — 32.5% - 66.7% (53.2%) 0.0% - 40.0% 20.0% - 35.0% 12.0 36,627 59,118 93,441,696 6.4 372,105 437,201 Non-Agency (E) Nationstar and SLS Serviced: Original and Recaptured Pools $ 94,923,975 33.3% - 80.0% (58.9%) 0.0% - 50.0% 0.0% - 33.3% 5.2 $ 210,691 $ 250,662 Recapture Agreements — 33.3% - 80.0% (58.9%) 0.0% - 50.0% 0.0% - 33.3% 12.3 14,130 15,748 Ocwen Serviced Pools 141,002,300 100.0% —% —% 6.2 836,428 877,906 235,926,275 6.1 1,061,249 1,144,316 Total $ 329,367,971 6.2 $ 1,433,354 $ 1,581,517 (A) Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment. (B) The amortized cost basis of the recapture agreements is determined based on the relative fair values of the recapture agreements and related Excess MSRs at the time they were acquired. (C) Carrying Value represents the fair value of the pools or recapture agreements, as applicable. (D) Amounts in parentheses represent weighted averages. (E) New Residential also invested in related Servicer Advances, including the basic fee component of the related MSR as of December 31, 2016 and 2015 (Note 6) on $186.4 billion and $220.3 billion UPB, respectively, underlying these Excess MSRs. Changes in fair value recorded in other income is comprised of the following: Year Ended December 31, 2016 2015 2014 Original and Recaptured Pools $ (11,221 ) $ 34,936 $ 35,000 Recapture Agreements 3,924 3,707 6,615 $ (7,297 ) $ 38,643 $ 41,615 As of December 31, 2016 and 2015 , weighted average discount rates of 9.8% and 9.8% , respectively, were used to value New Residential’s investments in Excess MSRs (directly and through equity method investees). New Residential entered into investments in joint ventures (“Excess MSR joint ventures”) jointly controlled by New Residential and Fortress-managed funds investing in Excess MSRs. New Residential elected to record these investments at fair value pursuant to the fair value option for financial instruments to provide users of the financial statements with better information regarding the effects of prepayment risk and other market factors. The following tables summarize the financial results of the Excess MSR joint ventures, accounted for as equity method investees, held by New Residential: December 31, 2016 2015 Excess MSR assets $ 372,391 $ 421,999 Other assets 17,184 12,442 Other liabilities — — Equity $ 389,575 $ 434,441 New Residential’s investment $ 194,788 $ 217,221 New Residential’s ownership 50.0 % 50.0 % Year Ended December 31, 2016 2015 2014 Interest income $ 36,502 $ 51,811 $ 67,698 Other income (loss) (3,359 ) 10,615 46,961 Expenses (91 ) (107 ) (99 ) Net income $ 33,052 $ 62,319 $ 114,560 New Residential’s investments in equity method investees changed during the years ended December 31, 2016 and 2015 as follows: 2016 2015 Balance at beginning of period $ 217,221 $ 330,876 Contributions to equity method investees — — Transfers to direct ownership — (98,258 ) Distributions of earnings from equity method investees (22,046 ) (37,874 ) Distributions of capital from equity method investees (16,913 ) (8,683 ) Change in fair value of investments in equity method investees 16,526 31,160 Balance at end of period $ 194,788 $ 217,221 The following is a summary of New Residential’s Excess MSR investments made through equity method investees: December 31, 2016 Unpaid Principal Balance Investee Interest in Excess MSR (A) New Residential Interest in Investees Amortized Cost Basis (B) Carrying Value (C) Weighted Average Life (Years) (D) Agency Original and Recaptured Pools $ 60,677,300 66.7% 50.0% $ 247,105 $ 314,401 5.8 Recapture Agreements — 66.7% 50.0% 29,974 57,990 12.2 Total $ 60,677,300 $ 277,079 $ 372,391 6.5 December 31, 2015 Unpaid Principal Balance Investee Interest in Excess MSR (A) New Residential Interest in Investees Amortized Cost Basis (B) Carrying Value (C) Weighted Average Life (Years) (D) Agency Original and Recaptured Pools $ 73,058,050 66.7% 50.0% $ 275,338 $ 351,275 5.7 Recapture Agreements — 66.7% 50.0% 45,421 70,724 11.9 $ 73,058,050 $ 320,759 $ 421,999 6.6 (A) The remaining interests are held by Nationstar. (B) Represents the amortized cost basis of the equity method investees in which New Residential holds a 50% interest. The amortized cost basis of the recapture agreements is determined based on the relative fair values of the recapture agreements and related Excess MSRs at the time they were acquired. (C) Represents the carrying value of the Excess MSRs held in equity method investees, in which New Residential holds a 50% interest. Carrying value represents the fair value of the pools or recapture agreements, as applicable. (D) The weighted average life represents the weighted average expected timing of the receipt of cash flows of each investment. The table below summarizes the geographic distribution of the underlying residential mortgage loans of the Excess MSR investments: Aggregate Direct and Equity Method Investees Percentage of Total Outstanding Unpaid Principal Amount December 31, State Concentration 2016 2015 California 24.1 % 24.2 % Florida 8.6 % 8.6 % New York 7.9 % 7.4 % Texas 4.6 % 4.6 % New Jersey 4.2 % 4.1 % Maryland 3.7 % 3.7 % Illinois 3.5 % 3.5 % Virginia 3.1 % 3.1 % Georgia 3.1 % 3.1 % Massachusetts 2.7 % 2.7 % Washington 2.6 % 2.7 % Arizona 2.5 % 2.5 % Other U.S. 29.4 % 29.8 % 100.0 % 100.0 % Geographic concentrations of investments expose New Residential to the risk of economic downturns within the relevant states. Any such downturn in a state where New Residential holds significant investments could affect the underlying borrower’s ability to make mortgage payments and therefore could have a meaningful, negative impact on the Excess MSRs. See Note 11 regarding the financing of Excess MSRs. INVESTMENTS IN MORTGAGE SERVICING RIGHTS In 2016, a subsidiary of New Residential, New Residential Mortgage LLC (“NRM”), became a licensed mortgage servicer. NRM is presently licensed or otherwise eligible to hold MSRs in all states within the United States and the District of Columbia. Additionally, NRM has received approval from the FHA to hold MSRs associated with FHA-insured mortgage loans, from the Federal National Mortgage Association (“Fannie Mae”) to hold MSRs associated with loans owned by Fannie Mae, and from the Federal Home Loan Mortgage Corporation (“Freddie Mac”) to hold MSRs associated with loans owned by Freddie Mac. As an approved Fannie Mae Servicer, Freddie Mac Servicer and FHA-approved mortgagee, NRM is required to conduct aspects of its operations in accordance with applicable policies and guidelines published by FHA, Fannie Mae and Freddie Mac in order to maintain those approvals. As of December 31, 2016, NRM is in compliance with such policies and guidelines, as well as with other ongoing requirements applicable to mortgage loan servicers under applicable state and federal laws. NRM engages third party licensed mortgage servicers as subservicers to perform the operational servicing duties in connection with the MSRs it acquires, in exchange for a subservicing fee which is recorded as “Subservicing expense” on New Residential’s Consolidated Statements of Income. New Residential has entered into a “recapture agreement” with respect to each of its MSR investments subserviced by Ditech (defined below). Under the recapture agreements, New Residential is generally entitled to the MSRs on any initial or subsequent refinancing by Ditech of a loan in the original portfolio. Walter Transaction On August 8, 2016, NRM entered into a flow and bulk agreement for the purchase and sale of mortgage servicing rights (the “Walter Purchase Agreement”) with Ditech Financial LLC (“Ditech”), a subsidiary of Walter Investment Management Corp. Pursuant to the Walter Purchase Agreement, NRM agreed to (i) purchase the MSRs and related Servicer Advances with respect to a pool of existing Fannie Mae residential mortgage loans with a total UPB of approximately $32.3 billion (the “Walter Existing MSRs”) for a purchase price of approximately $211.4 million and $27.4 million , respectively, subject to certain adjustments set forth in the Walter Purchase Agreement, and (ii) provide ongoing daily pricing to Ditech for the purchase of MSRs from Ditech relating to new residential mortgage loans originated or purchased by Ditech on a flow basis and pooled into Fannie Mae, Freddie Mac or, if applicable, Ginnie Mae securities (the “Walter Flow MSRs”). The purchase of the Walter Existing MSRs closed on October 3, 2016. The initial term of the Walter Purchase Agreement is three years, with annual, one -year renewals thereafter, subject to certain termination rights; provided, that, NRM may decline to provide pricing for Walter Flow MSRs on any day and may terminate the Walter Purchase Agreement with respect to Walter Flow MSRs on 30 days’ notice. The purchase of the Walter Existing MSRs and any Walter Flow MSRs is subject to, among other customary conditions, the approval of the applicable Agencies, all of which were obtained for the Walter Existing MSRs purchased. Ditech will initially service the residential mortgage loans related to the Walter Existing MSRs and the Walter Flow MSRs pursuant to the Walter Subservicing Agreement referred to below. On August 8, 2016, in connection with the Walter Purchase Agreement, Walter Investment Management Corp. (together with its applicable subsidiaries, including Ditech, “Walter”), a Maryland corporation and the parent of Ditech, provided NRM with a payment and performance guaranty of Ditech’s obligations, including repurchase and indemnification obligations, under the Walter Purchase Agreement. On August 8, 2016, in connection with the Walter Purchase Agreement, NRM and Ditech entered into a subservicing agreement (the “Walter Subservicing Agreement”), pursuant to which Ditech agreed to act as subservicer for NRM and perform all of the actual servicing activities (“subservicing”) required under the servicing agreements relating to the Walter Existing MSRs, any Walter Flow MSRs purchased by NRM under the Walter Purchase Agreement and certain other MSRs that may be acquired in the future by NRM. Under the Walter Subservicing Agreement and related documents, Ditech will perform all daily servicing obligations on behalf of NRM, including collecting payments from borrowers and offering refinancing options to borrowers for purposes of minimizing portfolio runoff. Ditech agreed to perform subservicing on behalf of NRM at fixed prices set forth in the Walter Subservicing Agreement for an initial term of one year, with annual, one -year renewals thereafter, subject to certain termination rights set forth in the Walter Subservicing Agreement. With respect to NRM, the initial term of the Walter Subservicing Agreement will expire on the first anniversary of the effective date and shall automatically terminate unless renewed on a month-by-month basis, subject to certain termination rights set forth in the Walter Subservicing Agreement. NRM is responsible for all advance obligations related to the Walter Existing MSRs and Walter Flow MSRs. Based on the terms of the Walter Subservicing Agreement, the estimated weighted average subservicing rate for the life of the Walter Existing MSRs is 7.7 basis points (bps). In addition, on August 8, 2016, New Residential entered into a “recapture agreement” with respect to the MSRs subserviced by Ditech. Under the recapture agreement, New Residential is entitled to the MSRs on any initial or subsequent refinancing by Ditech of a loan underlying the Walter Existing MSRs or Walter Flow MSRs. On December 1, 2016, pursuant to the Walter Purchase Agreement, NRM purchased Walter Flow MSRs and Servicer Advances with respect to a pool of Fannie Mae and Freddie Mac residential mortgage loans with a total UPB of approximately $4.8 billion for a purchase price of approximately $26.4 million and $3.9 million , respectively. Ditech will subservice the related residential mortgage loans under the Walter Subservicing Agreement described above. WCO Transaction On November 10, 2016, NRM and Walter Capital Opportunity, LP and its subsidiaries (“WCO”) entered into an agreement to purchase the MSRs and related Servicer Advances with respect to a pool of existing Fannie Mae and Freddie Mac residential mortgage loans with a total UPB of approximately $32.5 billion for a purchase price of approximately $244.3 million and $34.8 million , respectively. The purchase included multiple settlement dates in December 2016. Ditech will subservice the related residential mortgage loans under the Walter Subservicing Agreement described above. FirstKey Transaction On December 1, 2016, NRM and FirstKey Mortgage, LLC (“FirstKey”) entered into an agreement to purchase the MSRs and related Servicer Advances (the “FirstKey Purchase Agreement”) with respect to a pool of existing Fannie Mae and Freddie Mac residential mortgage loans with an aggregate total UPB of approximately $12.5 billion for a purchase price of approximately $89.1 million and $2.1 million , respectively. The purchase settled in December 2016. Pursuant to the FirstKey Purchase Agreement, FirstKey will continue to perform the servicing duties for the related residential mortgage loans until those duties are transferred to a subservicer appointed by NRM. PHH Transaction On December 28, 2016, NRM entered into an agreement with PHH Mortgage Corporation and its subsidiaries (“PHH”) to purchase the MSRs and related Servicer Advances with respect to approximately $72.0 billion in total UPB of seasoned Agency and private-label residential mortgage loans, which is expected to close beginning in the second quarter of 2017, subject to GSE and other regulatory approvals and other customary closing conditions. Concurrently with the purchase agreement, NRM entered into a subservicing agreement with PHH, pursuant to which PHH Mortgage, a wholly owned subsidiary of PHH, will subservice the residential mortgage loans underlying the MSRs acquired by NRM. New Residential records its investments in MSRs at fair value at acquisition and has elected to subsequently measure at fair value pursuant to the fair value measurement method. Servicing revenue, net recognized by New Residential related to its investments in MSRs was comprised of the following: Year Ended December 31, 2016 Servicing fee revenue $ 29,168 Ancillary and other fees 676 Servicing fee revenue and fees 29,844 Amortization of servicing rights (15,354 ) Change in valuation inputs and assumptions 103,679 Servicing revenue, net $ 118,169 The following table presents activity related to the carrying value of New Residential’s investments in MSRs: Subservicer Ditech FirstKey Total Balance as of December 31, 2015 $ — $ — $ — Purchases 482,102 89,056 571,158 Amortization of servicing rights (A) (13,895 ) (1,459 ) (15,354 ) Change in valuation inputs and assumptions 77,804 25,875 103,679 Balance as of December 31, 2016 $ 546,011 $ 113,472 $ 659,483 (A) Based on the ratio of the current UPB of the underlying residential mortgage loans relative to the original UPB of the underlying residential mortgage loans. The following is a summary of New Residential’s investments in MSRs as of December 31, 2016 : UPB of Underlying Mortgages Weighted Average Life (Years) (A) Amortized Cost Basis Carrying Value (B) Agency Ditech subserviced pools $ 67,560,362 7.1 $ 468,207 $ 546,011 FirstKey subserviced pools 12,374,940 6.8 87,597 113,472 Total $ 79,935,302 7.0 $ 555,804 $ 659,483 (A) Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment. (B) Carrying Value represents fair value. As of December 31, 2016 , a weighted average discount rate of 12.0% was used to value New Residential’s investments in MSRs. The table below summarizes the geographic distribution of the underlying residential mortgage loans of the investments in MSRs: Percentage of Total Outstanding Unpaid Principal Amount State Concentration December 31, 2016 California 20.5 % Florida 7.3 % Texas 6.3 % New Jersey 4.5 % Illinois 4.1 % Massachusetts 4.1 % Arizona 3.3 % Washington 3.2 % Michigan 3.1 % Maryland 3.0 % Other U.S. 40.6 % 100.0 % Geographic concentrations of investments expose New Residential to the risk of economic downturns within the relevant states. Any such downturn in a state where New Residential holds significant investments could affect the underlying borrower’s ability to make mortgage payments and therefore could have a meaningful, negative impact on the MSRs. In addition to receiving cash flows from the MSRs, NRM as servicer has the obligation to fund future Servicer Advances on the underlying pool of mortgages (Note 14). These Servicer Advances are recorded when advanced and are included in Other Assets. |
INVESTMENTS IN SERVICER ADVANCE
INVESTMENTS IN SERVICER ADVANCES | 12 Months Ended |
Dec. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
INVESTMENTS IN SERVICER ADVANCES | INVESTMENTS IN SERVICER ADVANCES In December 2013, New Residential and third-party co-investors, through a joint venture entity (Advance Purchaser LLC, the “Buyer”) consolidated by New Residential, purchased the outstanding Servicer Advances related to a portfolio of residential mortgage loans that is serviced by Nationstar and is a subset of the same portfolio of loans in which New Residential has invested in a portion of the Excess MSRs (Note 4), including the basic fee component of the related MSRs. In November 2016, New Residential purchased an additional 1.27% interest in the Buyer from a third-party co-investor at a purchase price of $3.3 million . A taxable wholly-owned subsidiary of New Residential is the managing member of the Buyer and owned an approximately 45.8% interest in the Buyer as of December 31, 2016 . As of December 31, 2016 , noncontrolling third-party co-investors, owning the remaining interest in the Buyer, have funded capital commitments to the Buyer of $389.6 million and New Residential has funded capital commitments to the Buyer of $312.7 million . The Buyer may call capital up to the commitment amount on unfunded commitments and recall capital to the extent the Buyer makes a distribution to the co-investors, including New Residential. As of December 31, 2016 , the third-party co-investors and New Residential had previously funded their commitments, however the Buyer may recall $286.0 million and $229.6 million of capital distributed to the third-party co-investors and New Residential, respectively. Neither the third-party co-investors nor New Residential is obligated to fund amounts in excess of their respective capital commitments, regardless of the capital requirements of the Buyer. The Buyer has purchased Servicer Advances from Nationstar, is required to purchase all future Servicer Advances made with respect to this portfolio of loans from Nationstar, and receives cash flows from advance recoveries and the basic fee component of the related MSRs, net of compensation paid back to Nationstar in consideration of Nationstar’s servicing activities. The compensation paid to Nationstar as of December 31, 2016 was approximately 9.3% of the basic fee component of the related MSRs plus a performance fee that represents a portion (up to 100% ) of the cash flows in excess of those required for the Buyer to obtain a specified return on its equity. New Residential also acquired a portion of the call rights related to this portfolio of loans. In December 2014, New Residential agreed to acquire (the “SLS Transaction”) 50% of the Excess MSRs and all of the Servicer Advances and related basic fee portion of the MSR, and a portion of the call rights related to a portfolio of residential mortgage loans which is serviced by SLS. Fortress-managed funds acquired the other 50% of the Excess MSRs. SLS services the loans in exchange for a servicing fee of 10.75 bps and an incentive fee (the “SLS Incentive Fee”) which is based on the ratio of the outstanding Servicer Advances to the UPB of the underlying loans. In April 2015, New Residential acquired Servicer Advances and Excess MSRs in connection with the HLSS Acquisition (Note 1). Ocwen services the underlying loans in exchange for a servicing fee of 12% times the servicing fee collections of the underlying loans, which as of December 31, 2016 is equal to 5.9 basis points times the UPB of the underlying loans, and an incentive fee which is reduced by LIBOR plus 2.75% per annum of the amount, if any, of Servicer Advances outstanding in excess of a defined target. In connection with the HLSS Acquisition, New Residential acquired from Ocwen the call rights related to the residential mortgage loans underlying the Excess MSRs and Servicer Advances acquired from HLSS. New Residential continues to evaluate the call rights it acquired from Nationstar, SLS and Ocwen, and its ability to exercise such rights and realize the benefits therefrom are subject to a number of risks. The actual UPB of the residential mortgage loans on which New Residential can successfully exercise call rights and realize the benefits therefrom may differ materially from its initial assumptions. New Residential elected to record its investments in Servicer Advances, including the right to the basic fee component of the related MSRs, at fair value pursuant to the fair value option for financial instruments to provide users of the financial statements with better information regarding the effects of market factors. The following is a summary of the investments in Servicer Advances, including the right to the basic fee component of the related MSRs, made by New Residential: Amortized Cost Basis Carrying Value (A) Weighted Average Discount Rate Weighted Average Yield Weighted Average Life (Years) (B) Change in Fair Value Recorded in Other Income for Year then Ended December 31, 2016 Servicer Advances (C) $ 5,687,635 $ 5,706,593 5.6 % 5.5 % 4.6 $ (7,768 ) December 31, 2015 Servicer Advances (C) $ 7,400,068 $ 7,426,794 5.6 % 5.5 % 4.4 $ (57,491 ) (A) Carrying value represents the fair value of the investments in Servicer Advances, including the basic fee component of the related MSRs. (B) Weighted Average Life represents the weighted average expected timing of the receipt of expected net cash flows for this investment. (C) Excludes asset-backed securities collateralized by Servicer Advances, which have aggregate face amounts of $100.0 million and $431.0 million and aggregate carrying values of $100.1 million and $430.3 million as of December 31, 2016 and 2015 , respectively. See Note 7 for details related to these securities. The following is additional information regarding the Servicer Advances and related financing: Loan-to-Value (“LTV”) (A) Cost of Funds (C) UPB of Underlying Residential Mortgage Loans Outstanding Servicer Advances Servicer Advances to UPB of Underlying Residential Mortgage Loans Face Amount of Notes and Bonds Payable Gross Net (B) Gross Net December 31, 2016 Servicer Advances (D) $ 186,362,657 $ 5,617,759 3.0 % $ 5,560,412 94.5 % 93.4 % 3.2 % 2.8 % December 31, 2015 Servicer Advances (D) $ 220,256,804 $ 7,578,110 3.4 % $ 7,058,094 91.2 % 90.2 % 3.4 % 2.6 % (A) Based on outstanding Servicer Advances, excluding purchased but unsettled Servicer Advances and certain deferred servicing fees (“DSF”) which New Residential receives financing on. If New Residential were to include these DSF in the servicer advance balance, gross and net LTV as of December 31, 2016 would be 89.7% and 88.6% , respectively. Also excludes retained Non-Agency bonds with a current face amount of $94.4 million from the outstanding Servicer Advances debt. If New Residential were to sell these bonds, gross and net LTV as of December 31, 2016 would be 96.1% and 95.0% , respectively. (B) Ratio of face amount of borrowings to par amount of Servicer Advance collateral, net of any general reserve. (C) Annualized measure of the cost associated with borrowings. Gross Cost of Funds primarily includes interest expense and facility fees. Net Cost of Funds excludes facility fees. (D) The following types of advances comprise the investments in Servicer Advances: December 31, 2016 2015 Principal and interest advances $ 1,489,929 $ 2,229,468 Escrow advances (taxes and insurance advances) 2,613,050 3,687,559 Foreclosure advances 1,514,780 1,661,083 Total $ 5,617,759 $ 7,578,110 Interest income recognized by New Residential related to its investments in Servicer Advances was comprised of the following: Year Ended December 31, 2016 2015 2014 Interest income, gross of amounts attributable to servicer compensation $ 723,193 $ 754,717 $ 290,309 Amounts attributable to base servicer compensation (79,868 ) (97,351 ) (26,092 ) Amounts attributable to incentive servicer compensation (278,975 ) (305,050 ) (74,011 ) Interest income from investments in Servicer Advances $ 364,350 $ 352,316 $ 190,206 New Residential has determined that the Buyer is a VIE. The following table presents information on the assets and liabilities related to this consolidated VIE. As of December 31, 2016 2015 Assets Servicer advance investments, at fair value $ 1,731,633 $ 2,344,245 Cash and cash equivalents 37,854 40,761 All other assets 19,799 25,092 Total assets (A) $ 1,789,286 $ 2,410,098 Liabilities Notes and bonds payable $ 1,464,851 $ 2,060,347 All other liabilities 5,187 6,111 Total liabilities (A) $ 1,470,038 $ 2,066,458 (A) The creditors of the Buyer do not have recourse to the general credit of New Residential and the assets of the Buyer are not directly available to satisfy New Residential’s obligations. Others’ interests in the equity of the Buyer is computed as follows: December 31, 2016 2015 Total Advance Purchaser LLC equity $ 319,248 $ 343,640 Others’ ownership interest 54.2 % 55.5 % Others’ interest in equity of consolidated subsidiary $ 173,057 $ 190,647 Others’ interests in the Buyer’s net income (loss) is computed as follows: Year Ended December 31, 2016 2015 2014 Net Advance Purchaser LLC income (loss) $ 72,159 $ 33,180 $ 159,374 Others’ ownership interest as a percent of total (A) 55.6 % 55.5 % 56.0 % Others’ interest in net income (loss) of consolidated subsidiaries $ 40,136 $ 18,407 $ 89,222 (A) As a result, New Residential owned 44.4% , 44.5% and 44.0% of the Buyer, on average during the years ended December 31, 2016 , 2015 and 2014 , respectively. See Note 11 regarding the financing of Servicer Advances. |
INVESTMENTS IN REAL ESTATE SECU
INVESTMENTS IN REAL ESTATE SECURITIES | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS IN REAL ESTATE SECURITIES | INVESTMENTS IN REAL ESTATE SECURITIES Agency residential mortgage backed securities (“RMBS”) are RMBS issued by a government sponsored enterprise, such as Fannie Mae or Freddie Mac. Non-Agency RMBS are issued by either public trusts or private label securitization entities. Activities related to New Residential’s investments in real estate securities were as follows: Year Ended December 31, 2016 Year Ended December 31, 2015 (in millions) (in millions) Agency Non-Agency Agency Non-Agency Purchases Face $ 7,163.3 $ 5,431.6 $ 5,140.1 $ 2,397.9 Purchase Price 7,467.6 2,746.3 5,333.7 1,288.9 Sales Face $ 6,466.1 $ 332.5 $ 5,772.5 $ 476.4 Amortized Cost 6,749.4 284.7 5,997.5 422.7 Sale Price 6,740.0 266.6 6,007.6 425.7 Gain (Loss) on Sale (9.4 ) (18.1 ) 10.1 3.0 On December 31, 2016 , New Residential sold and purchased $1.6 billion and $1.3 billion face amount of Agency RMBS for $1.7 billion and $1.4 billion , respectively, and purchased $4.3 million face amount of Non-Agency RMBS for $2.8 million , which had not yet been settled. These unsettled sales and purchases were recorded on the balance sheet on trade date as Trades Receivable and Trades Payable. New Residential has exercised its call rights with respect to Non-Agency RMBS trusts and purchased performing and non-performing residential mortgage loans and REO contained in such trusts prior to their termination. In certain cases, New Residential sold portions of the purchased loans through securitizations, and retained bonds issued by such securitizations. In addition, New Residential received par on the securities issued by the called trusts which it owned prior to such trusts’ termination. Refer to Note 8 for further details on these transactions. The following is a summary of New Residential’s real estate securities, all of which are classified as available-for-sale and are, therefore, reported at fair value with changes in fair value recorded in other comprehensive income, except for securities that are other-than-temporarily impaired and except for securities which New Residential elected to carry at fair value and record changes to valuation through the income statement. Gross Unrealized Weighted Average Asset Type Outstanding Face Amount Amortized Cost Basis Gains Losses Carrying Value (A) Number of Securities Rating (B) Coupon (C) Yield Life (Years) (D) Principal Subordination (E) December 31, 2016 Agency RMBS (F)(G) $ 1,486,739 $ 1,532,421 $ 1,803 $ (3,926 ) $ 1,530,298 57 AAA 3.45 % 2.94 % 9.1 N/A Non-Agency RMBS (H) (I) 7,302,218 3,415,906 147,206 (19,552 ) 3,543,560 536 CCC- 1.59 % 5.88 % 7.9 8.8 % Total/Weighted Average $ 8,788,957 $ 4,948,327 $ 149,009 $ (23,478 ) $ 5,073,858 593 BB- 2.16 % 4.97 % 8.3 December 31, 2015 Agency RMBS (F)(G) $ 884,578 $ 918,633 $ 183 $ (1,218 ) $ 917,598 28 AAA 3.28 % 2.75 % 6.6 N/A Non-Agency RMBS (H) (I) 3,533,974 1,579,445 22,964 (18,126 ) 1,584,283 240 BB+ 1.63 % 5.03 % 6.8 12.1 % Total/Weighted Average $ 4,418,552 $ 2,498,078 $ 23,147 $ (19,344 ) $ 2,501,881 268 A- 2.69 % 4.19 % 6.7 (A) Fair value, which is equal to carrying value for all securities. See Note 12 regarding the estimation of fair value. (B) Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. This excludes the ratings of the collateral underlying 193 bonds with a carrying value of $341.9 million which either have never been rated or for which rating information is no longer provided. For each security rated by multiple rating agencies, the lowest rating is used. New Residential used an implied AAA rating for the Agency RMBS. Ratings provided were determined by third party rating agencies, and represent the most recent credit ratings available as of the reporting date and may not be current. (C) Excludes residual bonds, and certain other Non-Agency bonds, with a carrying value of $246.8 million and $0.0 million , respectively, for which no coupon payment is expected. (D) The weighted average life is based on the timing of expected principal reduction on the assets. (E) Percentage of the amortized cost basis of securities that is subordinate to New Residential’s investments, excluding fair value option securities and servicer advance bonds. (F) Includes securities issued or guaranteed by U.S. Government agencies such as Fannie Mae or Freddie Mac. (G) The total outstanding face amount was $1.3 billion and $0.7 billion for fixed rate securities and $0.2 billion and $0.2 billion for floating rate securities as of December 31, 2016 and 2015 , respectively. (H) The total outstanding face amount was $1.2 billion (including $0.8 billion of residual and fair value option notional amount) and $2.3 billion (including $1.7 billion of residual and fair value option notional amount) for fixed rate securities and $6.1 billion (including $2.1 billion of residual and fair value option notional amount) and $1.3 billion (including $164.4 million of residual and fair value option notional amount) for floating rate securities as of December 31, 2016 and 2015 , respectively. (I) Includes other ABS consisting primarily of (i) interest-only securities and servicing strips (fair value option securities) which New Residential elected to carry at fair value and record changes to valuation through the income statement and (ii) bonds backed by Servicer Advances. Gross Unrealized Weighted Average Asset Type Outstanding Face Amount Amortized Cost Basis Gains Losses Carrying Value Number of Securities Rating Coupon Yield Life (Years) Principal Subordination December 31, 2016 Servicer Advance Bonds $ 100,000 $ 99,838 $ 310 $ — $ 100,148 1 AAA 3.21 % 3.10 % 0.7 N/A Fair Value Option Securities Interest-only Securities 2,062,647 113,342 5,270 (6,555 ) 112,057 28 AA+ 1.85 % 5.30 % 2.9 N/A Servicing Strips 456,629 5,613 311 (1 ) 5,923 11 NA 0.27 % 21.74 % 6.2 N/A December 31, 2015 Servicer Advance Bonds $ 431,000 $ 430,951 $ — $ (661 ) $ 430,290 5 AA+ 2.69 % 2.70 % 1.1 N/A Fair Value Option Securities Interest-only Securities 1,522,256 82,101 5,227 (4,348 ) 82,980 12 AA+ 1.84 % 7.11 % 4.0 N/A Unrealized losses that are considered other than temporary are recognized currently in earnings. During the year ended December 31, 2016 , New Residential recorded OTTI charges of $10.3 million with respect to real estate securities. During the year ended December 31, 2015 , New Residential recorded OTTI of $5.8 million . During the year ended December 31, 2014 , New Residential recorded OTTI of $1.4 million . Any remaining unrealized losses on New Residential’s securities were primarily the result of changes in market factors, rather than issue-specific credit impairment. New Residential performed analyses in relation to such securities, using its best estimate of their cash flows, which support its belief that the carrying values of such securities were fully recoverable over their expected holding period. New Residential has no intent to sell, and is not more likely than not to be required to sell, these securities. The following table summarizes New Residential’s securities in an unrealized loss position as of December 31, 2016 . Amortized Cost Basis Weighted Average Securities in an Unrealized Loss Position Outstanding Face Amount Before Impairment Other-Than- Temporary Impairment (A) After Impairment Gross Unrealized Losses Carrying Value Number of Securities Rating (B) Coupon Yield Life (Years) Less than 12 Months $ 1,300,530 $ 620,309 $ (939 ) $ 619,370 $ (9,896 ) $ 609,474 195 CCC+ 1.44 % 5.16 % 7.4 12 or More Months 969,356 314,720 (1,487 ) 313,233 (13,582 ) 299,651 47 BB+ 1.89 % 4.51 % 6.2 Total/Weighted Average $ 2,269,886 $ 935,029 $ (2,426 ) $ 932,603 $ (23,478 ) $ 909,125 242 B 1.59 % 4.94 % 7.0 (A) This amount represents OTTI recorded on securities that are in an unrealized loss position as of December 31, 2016 . (B) The weighted average rating of securities in an unrealized loss position for less than 12 months excludes the rating of 111 bonds which either have never been rated or for which rating information is no longer provided. The weighted average rating of securities in an unrealized loss position for 12 or more months excludes the rating of 10 bonds which either have never been rated or for which rating information is no longer provided. New Residential performed an assessment of all of its debt securities that are in an unrealized loss position (an unrealized loss position exists when a security’s amortized cost basis, excluding the effect of OTTI, exceeds its fair value) and determined the following: December 31, 2016 Unrealized Losses Fair Value Amortized Cost Basis After Impairment Credit (A) Non-Credit (B) Securities New Residential intends to sell (C) $ — $ — $ — $ — Securities New Residential is more likely than not to be required to sell (D) — — — N/A Securities New Residential has no intent to sell and is not more likely than not to be required to sell: Credit impaired securities 238,660 244,526 (2,426 ) (5,866 ) Non-credit impaired securities 670,465 688,077 — (17,612 ) Total debt securities in an unrealized loss position $ 909,125 $ 932,603 $ (2,426 ) $ (23,478 ) (A) This amount is required to be recorded as OTTI through earnings. In measuring the portion of credit losses, New Residential estimates the expected cash flow for each of the securities. This evaluation includes a review of the credit status and the performance of the collateral supporting those securities, including the credit of the issuer, key terms of the securities and the effect of local, industry and broader economic trends. Significant inputs in estimating the cash flows include New Residential’s expectations of prepayment rates, default rates and loss severities. Credit losses are measured as the decline in the present value of the expected future cash flows discounted at the investment’s effective interest rate. (B) This amount represents unrealized losses on securities that are due to non-credit factors and recorded through other comprehensive income. (C) A portion of securities New Residential intends to sell have a fair value equal to their amortized cost basis after impairment, and, therefore do no t have unrealized losses reflected in other comprehensive income as of December 31, 2016 . (D) New Residential may, at times, be more likely than not to be required to sell certain securities for liquidity purposes. While the amount of the securities to be sold may be an estimate, and the securities to be sold have not yet been identified, New Residential must make its best estimate, which is subject to significant judgment regarding future events, and may differ materially from actual future sales. The following table summarizes the activity related to credit losses on debt securities: Year Ended December 31, 2016 2015 Beginning balance of credit losses on debt securities for which a portion of an OTTI was recognized in other comprehensive income $ 6,239 $ 1,127 Increases to credit losses on securities for which an OTTI was previously recognized and a portion of an OTTI was recognized in other comprehensive income 3,008 5 Additions for credit losses on securities for which an OTTI was not previously recognized 7,256 5,782 Reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis — — Reduction for credit losses on securities for which no OTTI was recognized in other comprehensive income at the current measurement date — — Reduction for securities sold during the period (1,008 ) (675 ) Ending balance of credit losses on debt securities for which a portion of an OTTI was recognized in other comprehensive income $ 15,495 $ 6,239 The table below summarizes the geographic distribution of the collateral securing New Residential’s Non-Agency RMBS: December 31, 2016 2015 Geographic Location (A) Outstanding Face Amount Percentage of Total Outstanding Outstanding Face Amount Percentage of Total Outstanding Western U.S. $ 2,757,424 38.3 % $ 1,097,609 35.3 % Southeastern U.S. 1,635,596 22.7 % 758,167 24.4 % Northeastern U.S. 1,426,519 19.8 % 583,366 18.8 % Midwestern U.S. 778,372 10.8 % 335,406 10.8 % Southwestern U.S. 557,033 7.7 % 309,236 10.0 % Other (B) 47,274 0.7 % 19,189 0.7 % $ 7,202,218 100.0 % $ 3,102,973 100.0 % (A) Excludes $100.0 million and $431.0 million face amount of bonds backed by Servicer Advances at December 31, 2016 and 2015 , respectively. (B) Represents collateral for which New Residential was unable to obtain geographic information. New Residential evaluates the credit quality of its real estate securities, as of the acquisition date, for evidence of credit quality deterioration. As a result, New Residential identified a population of real estate securities for which it was determined that it was probable that New Residential would be unable to collect all contractually required payments. For securities acquired during the year ended December 31, 2016 , excluding residual and fair value option securities, the face amount of these real estate securities was $2,510.3 million , with total expected cash flows of $2,490.7 million and a fair value of $1,538.5 million on the dates that New Residential purchased the respective securities. For those securities acquired during the year ended December 31, 2015 , the face amount was $583.6 million , the total expected cash flows were $502.3 million and the fair value was $329.5 million on the dates that New Residential purchased the respective securities. The following is the outstanding face amount and carrying value for securities, for which, as of the acquisition date, it was probable that New Residential would be unable to collect all contractually required payments, excluding residual and fair value option securities: Outstanding Face Amount Carrying Value December 31, 2016 $ 2,951,498 $ 1,871,466 December 31, 2015 873,763 504,659 The following is a summary of the changes in accretable yield for these securities: Year Ended December 31, 2016 2015 Beginning Balance $ 316,521 $ 181,671 Adoption of ASU No. 2014-11 (Note 2) — 146,741 Additions 952,271 172,828 Accretion (130,745 ) (42,800 ) Reclassifications from (to) non-accretable difference 63,239 (36,326 ) Disposals (1,161 ) (105,593 ) Ending Balance $ 1,200,125 $ 316,521 See Note 11 regarding the financing of real estate securities. |
INVESTMENTS IN RESIDENTIAL MORT
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS | INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS Loans are accounted for based on New Residential’s strategy for the loan, and on whether the loan was credit-impaired at the date of acquisition. New Residential accounts for loans based on the following categories: • Loans Held-for-Investment (which may include PCD Loans) • Loans Held-for-Sale • Real Estate Owned (“REO”) The following table presents certain information regarding New Residential’s residential mortgage loans outstanding by loan type, excluding REO: December 31, 2016 Outstanding Face Amount Carrying (A) Loan Weighted Average Yield Weighted Average Life (Years) (B) Floating Rate Loans as a % of Face Amount LTV Ratio (C) Weighted Avg. Delinquency (D) Weighted Average FICO (E) Loan Type Reverse Mortgage Loans (F)(G) $ — $ — — — % — — % — % — % N/A Performing Loans (H) — — — — % — — % — % — % — Purchased Credit Deteriorated Loans (I) 203,673 190,761 1,183 5.5 % 2.7 8.7 % 71.5 % 94.9 % 590 Total Residential Mortgage Loans, held-for-investment $ 203,673 $ 190,761 1,183 5.5 % 2.7 8.7 % 71.5 % 94.9 % 590 Reverse Mortgage Loans (F) (G) $ 22,645 $ 11,468 69 7.2 % 4.5 15.4 % 135.6 % 70.7 % N/A Performing Loans (H) (J) 179,983 175,194 1,957 4.3 % 5.9 22.4 % 102.9 % 6.4 % 625 Non-Performing Loans (I) (J) 706,302 510,003 3,759 7.1 % 2.9 20.6 % 105.0 % 75.9 % 575 Total Residential Mortgage Loans, held-for-sale $ 908,930 $ 696,665 5,785 6.5 % 3.5 20.8 % 105.4 % 62.0 % 585 December 31, 2015 Loan Type Reverse Mortgage Loans (F) (G) $ 34,423 $ 19,560 136 10.0 % 4.2 21.8 % 112.9 % 71.3 % N/A Performing Loans (H) 21,483 19,964 671 9.1 % 6.7 17.1 % 77.4 % 7.5 % 626 Purchased Credit Deteriorated Loans (I) 450,229 290,654 2,118 5.5 % 2.5 18.7 % 115.4 % 97.6 % 578 Total Residential Mortgage Loans, held-for-investment $ 506,135 $ 330,178 2,925 6.0 % 2.8 18.8 % 113.6 % 92.0 % 580 Performing Loans (H) $ 270,585 $ 277,084 1,838 4.6 % 4.9 4.6 % 57.0 % — % 702 Non-Performing Loans (I) 589,129 499,597 3,428 5.9 % 2.9 14.5 % 104.5 % 81.1 % 580 Total Residential Mortgage Loans, held-for-sale $ 859,714 $ 776,681 5,266 5.5 % 3.5 11.4 % 89.6 % 55.6 % 619 (A) Includes residential mortgage loans with a United States federal income tax basis of $905.7 million and $1,204.2 million as of December 31, 2016 and 2015 , respectively. (B) The weighted average life is based on the expected timing of the receipt of cash flows. (C) LTV refers to the ratio comparing the loan’s unpaid principal balance to the value of the collateral property. (D) Represents the percentage of the total principal balance that is 60+ days delinquent. (E) The weighted average FICO score is based on the weighted average of information updated and provided by the loan servicer on a monthly basis. (F) Represents a 70% participation interest that New Residential holds in a portfolio of reverse mortgage loans. The average loan balance outstanding based on total UPB was $0.5 million and $0.4 million at December 31, 2016 and 2015 , respectively. Approximately 60.9% and 71.0% of these loans have reached a termination event at December 31, 2016 and 2015 , respectively. As a result of the termination event, each such loan has matured and the borrower can no longer make draws on these loans. (G) FICO scores are not used in determining how much a borrower can access via a reverse mortgage loan. (H) Performing loans are generally placed on nonaccrual status when principal or interest is 120 days or more past due. (I) Includes loans with evidence of credit deterioration since origination where it is probable that New Residential will not collect all contractually required principal and interest payments. As of December 31, 2016 , New Residential has placed all Non-Performing Loans, held-for-sale on nonaccrual status, except as described in (J) below. (J) Includes $45.2 million and $87.5 million UPB of Ginnie Mae EBO performing and non-performing loans, respectively, on accrual status as contractual cash flows are guaranteed by the FHA. New Residential generally considers the delinquency status, loan-to-value ratios, and geographic area of residential mortgage loans as its credit quality indicators. Delinquency status is a primary credit quality indicator as loans that are more than 60 days past due provide an early warning of borrowers who may be experiencing financial difficulties. Current LTV ratio is an indicator of the potential loss severity in the event of default. Finally, the geographic distribution of the loan collateral also provides insight as to the credit quality of the portfolio, as factors such as the regional economy, home price changes and specific events will affect credit quality. The table below summarizes the geographic distribution of the underlying residential mortgage loans: Percentage of Total Outstanding Unpaid Principal Amount December 31, State Concentration 2016 2015 New York 16.7 % 14.5 % Florida 11.4 % 10.7 % California 10.3 % 12.3 % New Jersey 9.6 % 13.1 % Maryland 4.7 % 3.5 % Illinois 4.0 % 4.3 % Texas 3.9 % 3.3 % Massachusetts 3.5 % 3.3 % Pennsylvania 2.9 % 2.8 % Washington 2.8 % 3.2 % Other U.S. 30.2 % 29.0 % 100.0 % 100.0 % See Note 11 regarding the financing of residential mortgage loans. Call Rights New Residential has exercised its call rights with respect to the following Non-Agency RMBS trusts and purchased performing and non-performing residential mortgage loans and REO assets contained in such trusts prior to their termination. In certain cases, New Residential sold portions of the purchased loans through securitizations, and retained bonds issued by such securitizations. In addition, New Residential received par on the securities issued by the called trusts which it owned prior to such trusts’ termination. The following table summarizes these transactions (dollars in millions). Securities Owned Prior Assets Acquired Loans Sold (C) Retained Bonds Retained Assets (C) Date of Call (A) Number of Trusts Called Face Amount Amortized Cost Basis Loan UPB Loan Price (B) REO & Other Price (B) Date of Securitization UPB Gain (Loss) Basis Type Loan UPB Loan Price REO & Other Price May 2014 16 $ 17.4 $ 12.0 $ 282.2 $ 289.4 $ — May 2014 $ 233.8 $ 3.5 N/A N/A $ 48.4 $ 40.1 $ 1.3 August 2014 19 15.4 13.1 530.1 536.3 3.0 October 2014 463.0 7.0 $ 25.8 Interest-Only 66.4 46.3 3.0 December 2014 25 27.9 24.0 597.1 623.7 — December 2014 516.1 0.7 28.9 Interest-Only 81.0 71.7 4.3 June 2015 18 13.7 9.1 369.0 388.8 — June 2015 334.5 (2.8 ) 15.0 Interest-Only 34.5 31.7 1.3 September 2015 7 7.4 4.5 216.3 223.1 1.5 N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) 19.4 17.2 1.5 November 2015 14 3.9 3.0 345.4 351.7 1.2 November 2015 511.8 2.4 22.0 Interest-Only 29.8 23.4 1.2 December 2015 14 61.4 48.0 309.1 315.1 3.1 March 2016 261.3 2.1 36.6 Various 35.8 26.6 2.9 March 2016 13 58.0 41.0 167.2 173.3 3.1 N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) 65.0 61.8 3.4 May 2016 12 60.0 44.0 290.6 298.7 0.6 May 2016 306.9 (2.2 ) 40.0 Various 85.9 78.2 1.1 August 2016 11 6.2 1.4 312.3 319.2 1.7 September 2016 308.0 8.1 45.7 Various 45.6 41.1 2.3 November 2016 13 41.7 24.2 289.1 286.8 3.7 December 2016 273.6 (5.2 ) 43.2 Various 46.2 21.6 4.4 December 2016 1 116.6 102.0 124.4 119.1 0.4 N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) (A) Any related securitization may occur on the same or a subsequent date, depending on market conditions and other factors. Except as otherwise noted in (C) below, there was one securitization associated with each call. (B) Price includes par amount paid for all underlying residential mortgage loans of the trusts, plus the basis of the exercised call rights, plus advances and costs incurred (including MSR Fund Payments, as defined in Note 15) in exercising such call rights. (C) Loans were sold through a securitization which was treated as a sale for accounting purposes. Retained assets are reflected as of the date of the relevant securitization. The securitization that occurred in November 2015 primarily included loans from the September 2015 and November 2015 calls, but also included previously acquired loans. The securitization that occurred in March 2016 primarily included loans from the December 2015 call, but also included previously acquired loans. The securitization that occurred in May 2016 primarily included loans from the March 2016 and May 2016 calls. The securitization that occurred in September 2016 primarily included loans from the August 2016 call, but also included $42.2 million of previously acquired loans. The securitization that occurred in December 2016 primarily included loans from the November 2016 call, but also included $31.2 million of previously acquired loans. No loans from the December 2016 call had been securitized by December 31, 2016 . Loans Held-for-Investment (Non-PCD) In February 2013, New Residential, through a subsidiary, entered into an agreement to co-invest in reverse mortgage loans. New Residential acquired a 70% interest in the reverse mortgage loans. Nationstar has co-invested on a pari passu basis with New Residential in 30% of the reverse mortgage loans and is the servicer of the loans performing all servicing and advancing functions and retaining the ancillary income, servicing obligations and liabilities as the servicer. Activities related to the carrying value of residential mortgage loans held-for-investment were as follows: Reverse Mortgage Loans Performing Loans Balance at December 31, 2014 $ 24,965 $ 22,873 Purchases/additional fundings 988 — Proceeds from repayments (687 ) (2,918 ) Accretion of loan discount and other amortization (A) 5,904 52 Provision for loan losses (35 ) (43 ) Transfer of loans to other assets (B) (11,574 ) — Transfer of loans to real estate owned (1 ) — Balance at December 31, 2015 $ 19,560 $ 19,964 Purchases/additional fundings 319 — Proceeds from repayments (1,352 ) (811 ) Accretion of loan discount (premium) and other amortization (A) 2,002 123 Provision for loan losses (73 ) (4 ) Transfer of loans to other assets (B) (4,203 ) — Sales (1,795 ) — Transfer of loans to held-for-sale (C) (14,458 ) (19,272 ) Balance at December 31, 2016 $ — $ — (A) Includes accelerated accretion of discount on loans paid in full and on loans transferred to other assets. (B) Represents loans for which foreclosure has been completed and for which New Residential has made, or intends to make, a claim with the governmental agency that has guaranteed the loans that are now recognized as claims receivable in Other Assets. (C) Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. Activities related to the valuation provision on reverse mortgage loans and allowance for loan losses on performing loans held-for-investment were as follows: Reverse Mortgage Loans Performing Loans Balance at December 31, 2014 $ 1,518 $ 1,447 Provision for loan losses (A) 35 43 Charge-offs (B) — (1,371 ) Balance at December 31, 2015 $ 1,553 $ 119 Provision for loan losses (A) 73 4 Charge-offs (B) — — Sales (171 ) — Transfer of loans to held-for-sale (C) (1,455 ) (123 ) Balance at December 31, 2016 $ — $ — (A) Based on an analysis of collective borrower performance, credit ratings of borrowers, loan-to-value ratios, estimated value of the underlying collateral, key terms of the loans and historical and anticipated trends in defaults and loss severities at a pool level. (B) Loans, other than PCD loans, are generally charged off or charged down to the net realizable value of the collateral (i.e., fair value less costs to sell), with an offset to the allowance for loan losses, when available information confirms that loans are uncollectible. (C) Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. Purchased Credit Deteriorated Loans New Residential determined at acquisition that the PCD loans acquired would be aggregated into pools based on common risk characteristics (FICO score, delinquency status, collateral type, loan-to-value ratio). Loans aggregated into pools are accounted for as if each pool were a single loan with a single composite interest rate and an aggregate expectation of cash flows, including consideration of involuntary prepayments. Activities related to the carrying value of PCD loans held-for-investment were as follows: Balance at December 31, 2014 $ — Purchases/additional fundings 289,664 Accretion of loan discount and other amortization 990 Balance at December 31, 2015 $ 290,654 Purchases/additional fundings 190,761 Sales — Proceeds from repayments (8,897 ) Accretion of loan discount and other amortization 8,295 Transfer of loans to real estate owned (7,583 ) Transfer of loans to held-for-sale (282,469 ) Balance at December 31, 2016 $ 190,761 The following is the contractually required payments receivable, cash flows expected to be collected, and fair value at acquisition date for PCD loans acquired during the year ended December 31, 2016 : Contractually Required Payments Receivable Cash Flows Expected to be Collected Fair Value As of Acquisition Date 337,374 214,449 190,343 The following is the unpaid principal balance and carrying value for loans, for which, as of the acquisition date, it was probable that New Residential would be unable to collect all contractually required payments: Unpaid Principal Balance Carrying Value December 31, 2016 $ 203,673 $ 190,761 December 31, 2015 450,229 290,654 The following is a summary of the changes in accretable yield for these loans: Balance at December 31, 2014 $ — Additions 72,053 Accretion (990 ) Balance at December 31, 2015 $ 71,063 Additions 23,688 Accretion (8,876 ) Reclassifications from non-accretable difference (A) 29,569 Disposals (B) (2,680 ) Transfer of loans to held-for-sale (C) (89,076 ) Balance at December 31, 2016 $ 23,688 (A) Represents a probable and significant increase in cash flows previously expected to be uncollectible. (B) Includes sales of loans or foreclosures, which result in removal of the loan from the PCD loan pool at its carrying amount. (C) Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. Loans Held-for-Sale Activities related to the carrying value of loans held-for-sale were as follows: Balance at December 31, 2014 $ 1,126,439 Purchases (A) 1,695,124 Sales (1,871,054 ) Transfer of loans to other assets (B) (41,752 ) Transfer of loans to real estate owned (34,139 ) Adoption of ASU No. 2014-11 (C) 1,831 Proceeds from repayments (85,698 ) Valuation (provision) reversal on loans (D) (14,070 ) Balance at December 31, 2015 $ 776,681 Purchases (A) 1,196,018 Transfer of loans from held-for-investment (E) 316,199 Sales (1,274,707 ) Transfer of loans to other assets (B) (158,807 ) Transfer of loans to real estate owned (56,001 ) Proceeds from repayments (91,339 ) Valuation (provision) reversal on loans (D) (11,379 ) Balance at December 31, 2016 $ 696,665 (A) Represents loans acquired with the intent to sell, including loans acquired in the HLSS Acquisition (Note 1). (B) Represents loans for which foreclosure has been completed and for which New Residential has made, or intends to make, a claim with the governmental agency that has guaranteed the loans that are now recognized as claims receivable in Other Assets (Note 2). (C) Represents loans financed with the selling counterparty that were previously accounted for as linked transactions (Note 10). (D) Represents the fair value adjustments to loans upon transfer to held-for-sale and provision recorded on certain purchased held-for-sale loans, including $10.5 million , $2.6 million , $3.6 million , $13.8 million and $10.2 million of provision related to the call transactions executed in December 2015, March 2016, May 2016, November 2016 and December 2016, respectively. (E) Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. Real estate owned (REO) New Residential recognizes REO assets at the completion of the foreclosure process or upon execution of a deed in lieu of foreclosure with the borrower. REO assets are managed for prompt sale and disposition at the best possible economic value. Real Estate Owned Balance at December 31, 2014 $ 61,933 Purchases 26,208 Transfer of loans to real estate owned 35,322 Sales (68,441 ) Valuation provision on REO (4,448 ) Balance at December 31, 2015 $ 50,574 Purchases 11,283 Transfer of loans to real estate owned 81,940 Sales (66,880 ) Valuation provision on REO (17,326 ) Balance at December 31, 2016 $ 59,591 As of December 31, 2016 , New Residential had non-performing residential mortgage loans that were in the process of foreclosure with an unpaid principal balance of $447.0 million . In addition, New Residential has recognized $55.3 million in unpaid claims receivable from FHA on Ginnie Mae EBO loans and reverse mortgage loans for which foreclosure has been completed and for which New Residential has made, or intends to make, a claim. |
INVESTMENTS IN CONSUMER LOANS
INVESTMENTS IN CONSUMER LOANS | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS IN CONSUMER LOANS | INVESTMENTS IN CONSUMER LOANS In April 2013, New Residential completed, through newly formed limited liability companies (together, the “Consumer Loan Companies”), a co-investment in a portfolio of consumer loans. The portfolio included personal unsecured loans and personal homeowner loans originated through subsidiaries of HSBC Finance Corporation. The Consumer Loan Companies acquired the portfolio from HSBC Finance Corporation and its affiliates. New Residential acquired 30% membership interests in each of the Consumer Loan Companies. Of the remaining 70% of the membership interests, OneMain acquired 47% and funds managed by Blackstone Tactical Opportunities Advisors L.L.C. acquired 23% . OneMain acts as the managing member of the Consumer Loan Companies. The Consumer Loan Companies initially financed approximately 73% of the original purchase price with asset-backed notes. In September 2013, the Consumer Loan Companies issued and sold additional asset-backed notes that were subordinate to the debt issued in April 2013. The Consumer Loan Companies were formed on March 19, 2013, for the purpose of making this investment, and commenced operations upon the completion of the investment. After a servicing transition period, OneMain became the servicer of the loans and provides all servicing and advancing functions for the portfolio. Prior to March 31, 2016, New Residential accounted for its investment in the Consumer Loan Companies pursuant to the equity method of accounting because it could exercise significant influence over the Consumer Loan Companies, but the requirements for consolidation were not met. New Residential’s share of earnings and losses in these equity method investees was included in “Earnings from investments in consumer loans, equity method investees” on the Consolidated Statements of Income. Equity method investments were included in “Investments in consumer loans, equity method investees” on the Consolidated Balance Sheets. On October 3, 2014, the Consumer Loan Companies refinanced the outstanding asset-backed notes with an asset-backed securitization for approximately $2.6 billion . The proceeds in excess of the refinanced debt were distributed to the respective co-investors. New Residential received approximately $337.8 million which reduced New Residential’s basis in the consumer loans investment to $0.0 million and resulted in a gain of approximately $80.1 million . Subsequent to this refinancing, New Residential discontinued recording its share of the underlying earnings of the Consumer Loan Companies. On March 31, 2016, certain of New Residential’s indirect wholly owned subsidiaries (collectively, the “NRZ SpringCastle Buyers”) entered into a Purchase Agreement (the “SpringCastle Purchase Agreement”) primarily with (i) certain direct or indirect wholly owned subsidiaries of OneMain (the “SpringCastle Sellers”), (ii) BTO Willow Holdings II, L.P. and Blackstone Family Tactical Opportunities Investment Partnership - NQ - ESC L.P. (together, the “Blackstone SpringCastle Buyers,” and the Blackstone SpringCastle Buyers together with the NRZ SpringCastle Buyers, collectively, the “SpringCastle Buyers”). Pursuant to the SpringCastle Purchase Agreement, the SpringCastle Sellers sold their collective 47% limited liability company interests in the Consumer Loan Companies (Note 9) to the SpringCastle Buyers for an aggregate purchase price of $111.6 million (the “SpringCastle Transaction”). Pursuant to the SpringCastle Purchase Agreement, the NRZ SpringCastle Buyers collectively acquired an additional 23.5% limited liability company interest in the Consumer Loan Companies (representing 50% of the limited liability company interests being sold by the SpringCastle Sellers in the SpringCastle Transaction) and the Blackstone SpringCastle Buyers acquired the other 50% of the limited liability company interests being sold in the SpringCastle Transaction. The SpringCastle Buyers collectively paid $100.5 million of the aggregate purchase price to the SpringCastle Sellers on March 31, 2016, with the remaining $11.2 million paid into an escrow account within 120 days following March 31, 2016. The NRZ SpringCastle Buyers’ obligation with respect to purchase price was 50% of the total paid by the SpringCastle Buyers. The escrowed funds are expected to be held in escrow for a period of up to five years following March 31, 2016 and, subject to the terms of the SpringCastle Purchase Agreement and depending on the achievement of certain portfolio performance requirements, paid (in whole or in part) to the SpringCastle Sellers at the end of such five year period. Any portion of the escrowed funds that the SpringCastle Sellers are not entitled to receive at the end of such five year period, based on the failure to achieve certain portfolio performance requirements, will be returned to the SpringCastle Buyers. The SpringCastle Buyers are also entitled (but not required) to use the escrowed funds as a source of recovery for any indemnification payments to which they become entitled pursuant to the SpringCastle Purchase Agreement. The SpringCastle Purchase Agreement includes customary representations, warranties, covenants and indemnities. The SpringCastle Transaction was unanimously approved by a special committee composed entirely of independent directors to which New Residential’s board of directors had delegated full authority to consider, negotiate and determine whether to engage in the SpringCastle Transaction. Following the SpringCastle Transaction, New Residential, through the NRZ SpringCastle Buyers, owns 53.5% of the limited liability company interests in the Consumer Loan Companies and the Blackstone SpringCastle Buyers, collectively with their affiliates, own the remaining 46.5% interests in the Consumer Loan Companies. OneMain will remain as servicer of the loans held by the Consumer Loan Companies and their subsidiaries immediately following the SpringCastle Transaction. In connection with the closing of the SpringCastle Transaction, each NRZ SpringCastle Buyer entered into a Second Amended & Restated Limited Liability Company Agreement (each, a “Second A&R LLC Agreement”) for each of the Consumer Loan Companies in which it acquired limited liability company interests. All of the Second A&R LLC Agreements contain substantially identical terms and conditions and designate the respective NRZ SpringCastle Buyer that is a party thereto as managing member of the applicable Consumer Loan Company. Pursuant to each Second A&R LLC Agreement, the managing member has the exclusive power and authority to manage the business and affairs of the applicable Consumer Loan Company, subject to the rights of the members to approve specified significant actions outside of the ordinary course of business and certain affiliate transactions, and subject to the other terms, conditions and limitations set forth in the Second A&R LLC Agreements. Each Second A&R LLC Agreement contains certain customary restrictions on the members’ ability to transfer their interests in the applicable Consumer Loan Companies. As a result of the SpringCastle Transaction, New Residential obtained a controlling financial interest in the Consumer Loan Companies, which triggered the application of the acquisition model in ASC No. 805, including the fair value recognition of all net assets over which control has been obtained and the remeasurement of any previously held noncontrolling interest. Based on the guidance in ASC No. 805, New Residential has consolidated all of the assets and the related liabilities of the Consumer Loan Companies assuming a gross purchase price of $237.5 million . This gross purchase price is representative of the fair value, measured in accordance with ASC No. 820, of 100% of the net assets of the Consumer Loan Companies, which was used to derive the $111.6 million purchase price for an aggregate 47.0% of the equity ownership acquired by the SpringCastle Buyers. New Residential previously held a 30% equity method investment in the Consumer Loan Companies, which had a basis of zero, and a fair value of $71.3 million based on 30% of the gross purchase price of $237.5 million , immediately prior to the SpringCastle Transaction. Therefore, the remeasurement of New Residential’s previously held equity method investment resulted in a gain of $71.3 million , which was recorded to Gain on Remeasurement of Consumer Loans Investment. New Residential has performed an allocation of the purchase price to the Consumer Loan Companies’ assets and liabilities, as set forth below. Total Consideration ($ in millions) $ 237.5 Assets Consumer loans, held-for-investment $ 1,934.7 Cash and cash equivalents 0.3 Restricted cash 74.6 Other assets 35.9 Total Assets Acquired 2,045.5 Liabilities Notes and bonds payable $ 1,803.2 Accrued expenses and other liabilities 4.8 Total Liabilities Assumed 1,808.0 Net Assets $ 237.5 The acquisition of the Consumer Loan Companies resulted in no goodwill because the total consideration transferred was equal to the fair value of the net assets acquired. Unaudited Supplemental Pro Forma Financial Information - The following table presents unaudited pro forma combined Interest Income and Income Before Income Taxes for the years ended December 31, 2016 and 2015 prepared as if the SpringCastle Transaction had been consummated on January 1, 2015. Year Ended December 31, 2016 2015 (unaudited) (unaudited) Pro Forma Interest Income $ 1,163,648 $ 1,030,522 Income Before Income Taxes 581,925 466,915 Noncontrolling Interests in Income of Consolidated Subsidiaries 96,852 92,413 The 2016 unaudited supplemental pro forma financial information has been adjusted to exclude, and the 2015 unaudited supplemental pro forma financial information has been adjusted to include, (i) the gain on remeasurement of New Residential’s Consumer Loans investment of $71.3 million and (ii) approximately $1.5 million of acquisition related costs incurred by New Residential in 2016. The unaudited supplemental pro forma financial information does not include any other anticipated benefits of the SpringCastle Transaction and, accordingly, the unaudited supplemental pro forma financial information is not necessarily indicative of either future results of operations or results that might have been achieved had the SpringCastle Transaction occurred on January 1, 2015. New Residential’s Consolidated Statements of Income include Interest Income and Income Before Income Taxes of the Consumer Loan Companies since the March 31, 2016 acquisition of $226.0 million and $82.0 million , respectively. In August 2016, New Residential agreed to purchase up to $140.0 million UPB of newly originated consumer loans from a third party prior to September 30, 2016. In October 2016, New Residential extended the terms of the agreement through October 2016. In October 2016, New Residential agreed to purchase up to an additional $50.0 million UPB of loans. In the aggregate, as of December 31, 2016 , New Residential had purchased $177.4 million UPB of loans for an aggregate purchase price of $176.2 million from this seller. These loans are not held in the Consumer Loan Companies and have been designated as performing consumer loans, held-for-investment. Upon acquisition, the consumer loans are accounted for based on New Residential’s strategy for the loan, and on whether the loan was credit impaired at the date of acquisition. New Residential determined that it has the intent and ability to hold the consumer loans for the foreseeable future and accounts for consumer loans based on the following categories: • Loans Held-for-Investment: ◦ Performing Loans ◦ PCD Loans The following table summarizes the investment in consumer loans, held-for-investment held by New Residential: Unpaid Principal Balance (A) Interest in Consumer Loans Carrying Value Weighted Average Coupon Weighted Average Expected Life (Years) (B) Weighted Average Delinquency (C) December 31, 2016 Consumer Loan Companies Performing Loans $ 1,275,121 53.5 % $ 1,321,825 18.7 % 4.2 6.3 % Purchased Credit Deteriorated Loans (D) 371,261 53.5 % 316,532 16.6 % 3.6 14.0 % Other - Performing Loans 163,570 100.0 % 161,129 14.2 % 1.5 0.3 % Total Consumer Loans, held-for-investment $ 1,809,952 $ 1,799,486 17.9 % 3.8 7.3 % December 31, 2015 (E) Consumer Loan Companies Total Consumer Loans, held-for-investment $ 2,094,904 30.0 % $ 1,698,130 18.2 % 4.4 7.2 % (A) Represents the balances as of December 31, 2016 and November 30, 2015, respectively. (B) Represents the weighted average expected timing of the receipt of expected cash flows for this investment. (C) Represents the percentage of the total unpaid principal balance that is 30+ days delinquent. Delinquency status is the primary credit quality indicator as it provides early warning of borrowers who may be experiencing financial difficulties. (D) Includes loans with evidence of credit deterioration since origination where it is probable that New Residential will not collect all contractually required principal and interest payments, which are accounted for as PCD loans. (E) Held through an equity method investee, which had a carrying value of zero, at such time. See Note 11 regarding the financing of consumer loans. Performing Loans The following table provides past due information regarding New Residential’s performing consumer loans, held-for-investment, which is an important indicator of credit quality and the establishment of the allowance for loan losses: December 31, 2016 Days Past Due Delinquency Status (A) Current 94.3 % 30-59 2.3 % 60-89 1.2 % 90-119 (B) 0.8 % 120+ (B) (C) 1.4 % 100.0 % (A) Represents the percentage of the total unpaid principal balance that corresponds to loans that are in each delinquency status. (B) Includes loans more than 90 days past due and still accruing interest. (C) Interest is accrued up to the date of charge-off at 180 days past due. Activities related to the carrying value of performing consumer loans, held-for-investment were as follows: Performing Loans Balance at December 31, 2015 $ — SpringCastle Transaction 1,539,569 Purchases 176,107 Additional fundings (A) 49,289 Proceeds from repayments (239,236 ) Accretion of loan discount and premium amortization, net 7,728 Net charge-offs (47,065 ) Allowance for loan losses (3,438 ) Balance at December 31, 2016 $ 1,482,954 (A) Represents draws on consumer loans with revolving privileges. Activities related to the allowance for loan losses on performing consumer loans, held-for-investment were as follows: Collectively Evaluated (A) Individually Impaired (B) Total Balance at March 31, 2016 (date of SpringCastle Transaction) $ — $ — $ — Provision for loan losses 49,506 997 50,503 Net charge-offs (C) (47,065 ) — (47,065 ) Balance at December 31, 2016 $ 2,441 $ 997 $ 3,438 (A) Represents smaller-balance homogeneous loans that are not individually considered impaired and are evaluated based on an analysis of collective borrower performance, key terms of the loans and historical and anticipated trends in defaults and loss severities, and consideration of the unamortized acquisition discount. Includes a provision for loan losses of $2.0 million for newly originated loans acquired during the year ended December 31, 2016 . (B) Represents consumer loan modifications considered to be troubled debt restructurings (“TDRs”) as they provide concessions to borrowers, primarily in the form of interest rate reductions, who are experiencing financial difficulty. As of December 31, 2016 , there are $5.3 million in UPB and $4.3 million in carrying value of consumer loans classified as TDRs. (C) Consumer loans, other than PCD loans, are charged off when available information confirms that loans are uncollectible, which is generally when they become 180 days past due. Charge-offs are presented net of $8.1 million in recoveries of previously charged-off UPB. Purchased Credit Deteriorated Loans A portion of the consumer loans are considered PCD loans. Activities related to the carrying value of PCD consumer loans, held-for-investment were as follows: Balance at December 31, 2015 $ — SpringCastle Transaction 395,129 Allowance for Loan Losses (A) (3,013 ) Proceeds from repayments (112,222 ) Accretion of loan discount and other amortization 36,638 Balance at December 31, 2016 $ 316,532 (A) Represents the present value of cash flows expected at acquisition that are no longer expected to be collected. The following is the unpaid principal balance and carrying value for consumer loans, for which, as of the acquisition date, it was probable that New Residential would be unable to collect all contractually required payments: Unpaid Principal Balance Carrying Value December 31, 2016 $ 371,261 $ 316,532 March 31, 2016 (date of SpringCastle Transaction) 450,611 395,129 The following is a summary of the changes in accretable yield for these loans: Balance at December 31, 2015 $ — SpringCastle Transaction 176,387 Accretion (36,638 ) Reclassifications from non-accretable difference (A) 28,179 Balance at December 31, 2016 $ 167,928 (A) Represents a probable and significant increase in cash flows previously expected to be uncollectible. Noncontrolling Interests Others’ interests in the equity of the Consumer Loan Companies is computed as follows at December 31, 2016 : Total Consumer Loan Companies equity $ 75,311 Others’ ownership interest 46.5 % Others’ interests in equity of consolidated subsidiary $ 35,020 Others’ interests in the Consumer Loan Companies’ net income (loss) is computed as follows for the year ended December 31, 2016 : Net Consumer Loan Companies income (loss) $ 81,992 Others’ ownership interest as a percent of total 46.5 % Others’ interest in net income (loss) of consolidated subsidiaries $ 38,127 Variable Interest Entities The Consumer Loan Companies consolidate certain entities that issued securitized debt collateralized by the consumer loans (the “Consumer Loan SPVs”). The Consumer Loan SPVs are VIEs of which the Consumer Loan Companies are the primary beneficiaries. The following table presents information on the combined assets and liabilities related to these consolidated VIEs. As of December 31, 2016 Assets Consumer loans, held-for-investment $ 1,638,357 Restricted cash 13,393 Accrued interest receivable 24,528 Total assets (A) $ 1,676,278 Liabilities Notes and bonds payable $ 1,648,488 Accounts payable and accrued expenses 951 Total liabilities (A) $ 1,649,439 (A) The creditors of the Consumer Loan SPVs do not have recourse to the general credit of New Residential, and the assets of the Consumer Loan SPVs are not directly available to satisfy New Residential’s obligations. The following tables summarize the equity method investment in the Consumer Loan Companies held by New Residential prior to their consolidation: December 31, 2015 Consumer Loan Assets (amortized cost basis) $ 1,698,130 Other Assets 70,469 Debt (1,912,267 ) Other Liabilities (5,640 ) Equity $ (149,308 ) New Residential’s investment $ — New Residential’s ownership 30.0 % First Quarter Year Ended December 31, 2016 2015 2014 Interest income $ 100,131 $ 455,479 $ 534,990 Interest expense (19,654 ) (87,000 ) (81,706 ) Provision for finance receivable losses (14,043 ) (67,935 ) (104,921 ) Other expenses, net (13,239 ) (60,263 ) (74,781 ) Change in fair value of debt — — (14,810 ) Loss on extinguishment of debt — — (21,151 ) Net income $ 53,195 $ 240,281 $ 237,621 New Residential’s equity in net income through October 3, 2014 $ — $ — $ 53,840 New Residential’s ownership 30.0 % 30.0 % 30.0 % Tax withholding payments on behalf of New Residential, treated as non-cash distributions $ 25 $ 585 $ 609 Distributions in excess of basis, treated as gains, excluding tax withholding payments $ 9,918 $ 43,369 $ 91,411 |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES As of December 31, 2016 , New Residential’s derivative instruments included economic hedges that were not designated as hedges for accounting purposes. New Residential uses economic hedges to hedge a portion of its interest rate risk exposure. Interest rate risk is sensitive to many factors including governmental monetary and tax policies, domestic and international economic and political considerations, as well as other factors. New Residential’s credit risk with respect to economic hedges is the risk of default on New Residential’s investments that results from a borrower’s or counterparty’s inability or unwillingness to make contractually required payments. As of December 31, 2016 , New Residential held to-be-announced forward contract positions (“TBAs”) of $3.5 billion in a short notional amount of Agency RMBS and any amounts or obligations owed by or to New Residential are subject to the right of set-off with the TBA counterparty. New Residential’s net short position in TBAs was entered into as an economic hedge in order to mitigate New Residential’s interest rate risk on certain specified mortgage backed securities. As of December 31, 2016 , New Residential separately held TBAs of $2.1 billion in a long notional amount of Agency RMBS and any amounts or obligations owed by or to New Residential are subject to the right of set-off with the TBA counterparty. $0.5 billion of the long notional amount of Agency RMBS represented TBAs purchased for which the specific securities were not identified as of December 31, 2016 and, as such, the positions were recorded as derivatives within the Other Assets line on the balance sheet. As part of executing these trades, New Residential has entered into agreements with its TBA counterparties that govern the transactions for the TBA purchases or sales made, including margin maintenance, payment and transfer, events of default, settlements, and various other provisions. New Residential has fulfilled all obligations and requirements entered into under these agreements. New Residential’s derivatives are recorded at fair value on the Consolidated Balance Sheets as follows: December 31, Balance Sheet Location 2016 2015 Derivative assets Interest Rate Caps Other assets $ 4,251 $ 2,689 TBAs Other assets 2,511 — $ 6,762 $ 2,689 Derivative liabilities TBAs Accrued expenses and other liabilities $ — $ 2,058 Interest Rate Swaps Accrued expenses and other liabilities 3,021 11,385 $ 3,021 $ 13,443 The following table summarizes notional amounts related to derivatives: December 31, 2016 2015 TBAs, short position (A) $ 3,465,500 $ 1,450,000 TBAs, long position (A) 2,125,552 750,000 Interest Rate Caps (B) 1,185,000 3,400,000 Interest Rate Swaps, short positions (C) 3,640,000 2,444,000 (A) Represents the notional amount of Agency RMBS, classified as derivatives. (B) Caps LIBOR at 0.50% for $550.0 million of notional, at 0.75% for $300.0 million of notional, at 2.00% for $185.0 million of notional, and at 4.00% for $150.0 million of notional. The weighted average maturity of the interest rate caps as of December 31, 2016 was 18 months. (C) Receive LIBOR and pay a fixed rate. The weighted average maturity of the interest rate swaps as of December 31, 2016 was 22 months and the weighted average fixed pay rate was 1.35% . The following table summarizes all income (losses) recorded in relation to derivatives: Year Ended December 31, 2016 2015 2014 Other income (loss), net (A) Non-Performing Loans (B) $ — $ — $ (1,149 ) Real Estate Securities (B) — — 2,336 TBAs (414 ) (2,058 ) (4,985 ) Interest Rate Caps 688 (1,749 ) (4 ) Interest Rate Swaps 5,500 269 (5,045 ) 5,774 (3,538 ) (8,847 ) Gain (loss) on settlement of investments, net Non-Performing Loans (B) — — 5,609 Real Estate Securities (B) — — 43 TBAs (17,927 ) (27,142 ) (33,638 ) Interest Rate Caps (4,754 ) (1,180 ) — Interest Rate Swaps (4,810 ) (18,660 ) (12,590 ) U.S.T. Short Positions — — 176 (27,491 ) (46,982 ) (40,400 ) Total income (losses) $ (21,717 ) $ (50,520 ) $ (49,247 ) (A) Represents unrealized gains (losses). (B) Prior to December 31, 2014, investments purchased from, and financed by, the selling counterparty that New Residential accounted for as linked transactions were reflected as derivatives. Upon the adoption of ASU No. 2014-11 on January 1, 2015, these transactions are accounted for as secured borrowings. |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS | DEBT OBLIGATIONS The following table presents certain information regarding New Residential’s debt obligations: December 31, 2016 December 31, 2015 Collateral Debt Obligations/Collateral Month Issued Outstanding Face Amount Carrying Value (A) Final Stated Maturity (B) Weighted Average Funding Cost Weighted Average Life (Years) Outstanding Face Amortized Cost Basis Carrying Value Weighted Average Life (Years) Carrying Value (A) Repurchase Agreements (C) Agency RMBS (D) Various $ 1,764,760 $ 1,764,760 Jan-17 to Mar-17 1.00 % 0.2 $ 1,786,585 $ 1,874,554 $ 1,833,348 0.4 $ 1,683,305 Non-Agency RMBS (E) Various 2,654,242 2,654,242 Jan-17 to Mar-17 2.42 % 0.1 6,510,127 3,358,438 3,481,478 7.9 1,333,852 Residential Mortgage Loans (F) Various 689,132 686,412 Mar-17 to Sep-18 3.31 % 0.7 1,061,445 869,297 852,790 3.4 907,993 Real Estate Owned (G) (H) Various 85,552 85,217 Mar-17 to Sep-18 3.35 % 0.3 N/A N/A 98,496 N/A 77,458 Consumer Loan Investment Apr-15 — — N/A — % — N/A N/A N/A — 40,446 Total Repurchase Agreements 5,193,686 5,190,631 2.07 % 0.2 4,043,054 Notes and Bonds Payable Secured Corporate Notes (I) Various 734,254 729,145 Apr-18 to Sep-19 5.50 % 2.2 310,072,544 1,271,217 1,437,226 6.2 182,978 Servicer Advances (J) Various 5,560,412 5,549,872 Mar-17 to Dec-21 3.19 % 2.7 5,617,759 5,687,635 5,706,593 4.6 7,047,061 Residential Mortgage Loans (K) Oct-15 8,271 8,271 Oct-17 3.44 % 0.8 13,248 7,514 7,514 4.5 19,529 Consumer Loans (L) (M) Various 1,709,054 1,700,211 Sep-19 to Mar-24 3.48 % 3.9 1,809,952 1,802,809 1,799,372 3.8 — Receivable from government agency (K) Oct-15 3,106 3,106 Oct-17 3.44 % 0.8 N/A N/A 3,378 N/A — Total Notes and Bonds Payable 8,015,097 7,990,605 3.46 % 2.9 7,249,568 Total/Weighted Average $ 13,208,783 $ 13,181,236 2.91 % 1.8 $ 11,292,622 (A) Net of deferred financing costs. (B) All debt obligations with a stated maturity of January or February 2017 were refinanced, extended or repaid. (C) These repurchase agreements had approximately $11.0 million of associated accrued interest payable as of December 31, 2016 . (D) All of the Agency RMBS repurchase agreements have a fixed rate. Collateral amounts include approximately $1.7 billion of related trade and other receivables. (E) All of the Non-Agency RMBS repurchase agreements have LIBOR-based floating interest rates. This includes repurchase agreements of $125.8 million on retained servicer advance and consumer loan bonds. (F) All of these repurchase agreements have LIBOR-based floating interest rates. (G) All of these repurchase agreements have LIBOR-based floating interest rates. (H) Includes financing collateralized by receivables including claims from FHA on Ginnie Mae EBO loans for which foreclosure has been completed and for which New Residential has made or intends to make a claim on the FHA guarantee. (I) Includes $410.0 million of corporate loans which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of 4.75% , and a $324.3 million corporate loan which bears interest equal to 5.68% . The outstanding face amount of the collateral represents the UPB of the residential mortgage loans underlying Excess MSRs that secure these notes, and the $324.3 million corporate loan is also collateralized by the rights to the related basic fee portion of the MSRs. (J) $3.5 billion face amount of the notes have a fixed rate while the remaining notes bear interest equal to the sum of (i) a floating rate index rate equal to one-month LIBOR or a cost of funds rate, as applicable, and (ii) a margin ranging from 1.9% to 2.1% . (K) The note is payable to Nationstar and bears interest equal to one-month LIBOR plus 2.88% . (L) Includes the SpringCastle debt, which is comprised of the following classes of asset-backed notes held by third parties: $1.29 billion UPB of Class A notes with a coupon of 3.05% and a stated maturity date in November 2023; $211.0 million UPB of Class B notes with a coupon of 4.10% and a stated maturity date in March 2024; $39.0 million UPB of Class C-1 notes with a coupon of 5.63% and a stated maturity date in March 2024; $39.0 million UPB of Class C-2 notes with a coupon of 5.63% and a stated maturity date in March 2024; $39.0 million UPB of Class D-1 notes with a coupon of 5.80% and a stated maturity date in March 2024; and $39.0 million UPB of Class D-2 notes with a coupon of 5.80% and a stated maturity date in March 2024. (M) Includes a $132.2 million face amount note collateralized by newly originated consumer loans which bears interest equal to one-month LIBOR plus 3.25% . As of December 31, 2016 , New Residential had no outstanding repurchase agreements where the amount at risk with any individual counterparty or group of related counterparties exceeded 10% of New Residential’s stockholders' equity. The amount at risk under repurchase agreements is defined as the excess of carrying amount (or market value, if higher than the carrying amount) of the securities or other assets sold under agreement to repurchase, including accrued interest plus any cash or other assets on deposit to secure the repurchase obligation, over the amount of the repurchase liability (adjusted for accrued interest). General Certain of the debt obligations included above are obligations of New Residential’s consolidated subsidiaries, which own the related collateral. In some cases, including the Servicer Advances and Consumer Loans Notes and Bonds Payable, such collateral is not available to other creditors of New Residential. New Residential has margin exposure on $5.2 billion of repurchase agreements as of December 31, 2016 . To the extent that the value of the collateral underlying these repurchase agreements declines, New Residential may be required to post margin, which could significantly impact its liquidity. HLSS Servicer Advance Receivables Trust (“HSART”) On October 1, 2015, an event of default (the “Specified Default”) occurred under the indenture related to certain notes issued by HSART, a wholly-owned subsidiary of New Residential. The Specified Default occurred as a result of (and solely as a result of) Ocwen’s master servicer rating downgrade to “Below Average”, announced by S&P on September 29, 2015. After giving effect to such downgrade, Ocwen ceased to be an “Eligible Subservicer” under the indenture causing the “Collateral Test” under the indenture to not be satisfied. The continuing failure of the Collateral Test as of close of business on October 1, 2015 resulted in the occurrence of the Specified Default. The Specified Default caused $2.5 billion of term notes issued by HSART to become immediately due and payable, without premium or penalty, as of the close of business on October 1, 2015, in accordance with the terms of HSART’s indenture. New Residential had previously secured approximately $4.0 billion of surplus Servicer Advance financing commitments from HSART’s lenders. HSART repaid all $2.5 billion of the term notes on October 2, 2015 in full with the proceeds of draws by HSART on variable funding notes previously issued by HSART. The holders of the variable funding notes issued by HSART previously agreed that the Specified Default would not be deemed an “event of default” under HSART’s indenture for purposes of their variable funding notes. After giving effect to the repayment of the term notes issued by HSART, the only outstanding notes issued by HSART are variable funding notes. No other material obligation of HSART arises, increases or accelerates as a result of the transactions described herein. During the first three quarters of 2015, through their investment manager, certain bondholders (the “HSART Bondholders”) alleged that events of default had occurred under HSART and that, as a result, the HSART Bondholders were due additional interest under the related agreements. In February 2015, in response to such allegations, instead of releasing such amounts to New Residential’s subsidiary that sponsors the HSART transaction entitled thereto, the trustee of HSART began to withhold, monthly, such interest (the “Withheld Funds”) so that such amounts were reserved in the event that it was determined that any of the alleged events of default had occurred. On August 28, 2015, the trustee commenced a legal proceeding requesting instruction from the court regarding the alleged defaults and the disposition of the Withheld Funds. On October 2, 2015, as described above, the notes held by the HSART Bondholders were repaid in full. On October 14, 2015, the court ruled that no event of default had occurred under HSART, authorized the trustee to release the Withheld Funds and dismissed the legal proceeding. As a result of this ruling, $92.7 million was released from restricted cash accounts related to HSART and became available for unrestricted use by New Residential. On October 13, 2015, New Residential entered into a settlement agreement in connection with which a subsidiary of New Residential was liable for a $9.1 million payment to certain HSART Bondholders, which was recorded within General and Administrative Expenses; this agreement did not impact other former or existing bondholders of HSART. Consumer Loans In October 2016, the Consumer Loan Companies (Note 9) refinanced their outstanding asset-backed notes with a new asset-backed securitization. The issuance consisted of $1.7 billion face amount of asset-backed notes comprised of six classes with maturity dates in November 2023 and March 2024, of which approximately $157.6 million face amount was retained by the Consumer Loan Companies and subsequently distributed to their members including New Residential. New Residential’s $79.9 million portion of these bonds is not treated as outstanding debt in consolidation. In connection with the refinancing, the Consumer Loan Companies recorded approximately $4.7 million of loss on extinguishment of debt related to an unamortized discount. Activities related to the carrying value of New Residential’s debt obligations were as follows: Excess MSRs Servicer Advances (A) Real Estate Securities Residential Mortgage Loans and REO Consumer Loans Total Balance at December 31, 2014 (B) $ — $ 2,885,784 $ 2,246,651 $ 925,418 $ — $ 6,057,853 Repurchase Agreements: Borrowings — — 7,649,261 1,915,056 43,158 9,607,475 Modified retrospective adjustment for the adoption of ASU No. 2014-11 (Note 2) — — 84,649 1,306 — 85,955 Repayments — — (6,963,404 ) (1,832,462 ) (2,712 ) (8,798,578 ) Adoption of ASU No. 2015-03 (Note 2) — — — (888 ) — (888 ) Notes and Bonds Payable: Borrowings 852,419 10,780,237 — 1,632 — 11,634,288 Repayments (669,406 ) (6,612,372 ) — (5,082 ) — (7,286,860 ) Adoption of ASU No. 2015-03 (Note 2) (35 ) (6,588 ) — — — (6,623 ) Balance at December 31, 2015 $ 182,978 $ 7,047,061 $ 3,017,157 $ 1,004,980 $ 40,446 $ 11,292,622 Repurchase Agreements: Borrowings — — 30,441,880 552,459 21,458 31,015,797 Repayments — — (29,040,035 ) (764,113 ) (61,904 ) (29,866,052 ) Capitalized deferred financing costs, net of amortization — — — (2,169 ) — (2,169 ) Notes and Bonds Payable: Acquired borrowings, net of discount — — — — 1,803,192 1,803,192 Borrowings 1,141,996 6,857,006 — — 1,789,706 9,788,708 Repayments (592,175 ) (8,354,692 ) — (8,151 ) (1,888,714 ) (10,843,732 ) Discount on borrowings, net of amortization 1,420 — — — (3,374 ) (1,954 ) Capitalized deferred financing costs, net of amortization (5,074 ) 497 — — (599 ) (5,176 ) Balance at December 31, 2016 $ 729,145 $ 5,549,872 $ 4,419,002 $ 783,006 $ 1,700,211 $ 13,181,236 (A) New Residential net settles daily borrowings and repayments of the Notes and Bonds Payable on its Servicer Advances. (B) Excludes debt related to linked transactions (Note 10). Maturities New Residential’s debt obligations as of December 31, 2016 had contractual maturities as follows: Year Nonrecourse Recourse Total 2017 $ 697,437 $ 5,145,175 $ 5,842,612 2018 1,160,179 228,520 1,388,699 2019 2,759,841 514,254 3,274,095 2020 376,246 — 376,246 2021 and thereafter 2,327,131 — 2,327,131 $ 7,320,834 $ 5,887,949 $ 13,208,783 Borrowing Capacity The following table represents New Residential’s borrowing capacity as of December 31, 2016 : Debt Obligations/ Collateral Collateral Type Borrowing Capacity Balance Outstanding Available Financing Repurchase Agreements Residential Mortgage Loans Residential Mortgage Loans and REO $ 2,260,000 $ 774,684 $ 1,485,316 Notes and Bonds Payable Secured Corporate Loan Excess MSRs 525,000 410,000 115,000 Servicer Advances (A) Servicer Advances 6,577,393 5,560,412 1,016,981 Consumer Loans Consumer Loans 150,000 132,168 17,832 $ 9,512,393 $ 6,877,264 $ 2,635,129 (A) New Residential’s unused borrowing capacity is available if New Residential has additional eligible collateral to pledge and meets other borrowing conditions as set forth in the applicable agreements, including any applicable advance rate. New Residential pays a 0.1% fee on the unused borrowing capacity. Excludes borrowing capacity and outstanding debt for retained Non-Agency bonds with a current face amount of $94.4 million . Certain of the debt obligations are subject to customary loan covenants and event of default provisions, including event of default provisions triggered by certain specified declines in our equity or failure to maintain a specified tangible net worth, liquidity, or indebtedness to tangible net worth ratio. New Residential was in compliance with all of our debt covenants as of December 31, 2016 . |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT U.S. GAAP requires the categorization of fair value measurement into three broad levels which form a hierarchy based on the transparency of inputs to the valuation. Level 1 - Quoted prices in active markets for identical instruments. Level 2 - Valuations based principally on other observable market parameters, including: • Quoted prices in active markets for similar instruments, • Quoted prices in less active or inactive markets for identical or similar instruments, • Other observable inputs (such as interest rates, yield curves, volatilities, prepayment rates, loss severities, credit risks and default rates), and • Market corroborated inputs (derived principally from or corroborated by observable market data). Level 3 - Valuations based significantly on unobservable inputs. New Residential follows this hierarchy for its fair value measurements. The classifications are based on the lowest level of input that is significant to the fair value measurement. The carrying values and fair values of New Residential’s assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments for which fair value is disclosed, as of December 31, 2016 were as follows: Fair Value Principal Balance or Notional Amount Carrying Value Level 1 Level 2 Level 3 Total Assets: Investments in: Excess mortgage servicing rights, at fair value (A) $ 277,975,997 $ 1,399,455 $ — $ — $ 1,399,455 $ 1,399,455 Excess mortgage servicing rights, equity method investees, at fair value (A) 60,677,300 194,788 — — 194,788 194,788 Mortgage servicing rights, at fair value (A) 79,935,302 659,483 — — 659,483 659,483 Servicer advances, at fair value 5,617,759 5,706,593 — — 5,706,593 5,706,593 Real estate securities, available-for-sale 8,788,957 5,073,858 — 1,530,298 3,543,560 5,073,858 Residential mortgage loans, held-for-investment 203,673 190,761 — — 190,343 190,343 Residential mortgage loans, held-for-sale 908,930 696,665 — — 717,985 717,985 Consumer loans, held-for-investment 1,809,952 1,799,486 — — 1,819,106 1,819,106 Derivative assets 6,776,052 6,762 — 6,762 — 6,762 Cash and cash equivalents 290,602 290,602 290,602 — — 290,602 Restricted cash 163,095 163,095 163,095 — — 163,095 Other assets 888,412 4,856 — — 4,856 4,856 $ 16,186,404 $ 453,697 $ 1,537,060 $ 14,236,169 $ 16,226,926 Liabilities: Repurchase agreements $ 5,193,686 $ 5,190,631 $ — $ 5,193,686 $ — $ 5,193,686 Notes and bonds payable 8,015,097 7,990,605 — — 7,993,326 7,993,326 Derivative liabilities 3,640,000 3,021 — 3,021 — 3,021 $ 13,184,257 $ — $ 5,196,707 $ 7,993,326 $ 13,190,033 (A) The notional amount represents the total unpaid principal balance of the residential mortgage loans underlying the MSRs and Excess MSRs. New Residential does not receive an excess mortgage servicing amount on non-performing loans in Agency portfolios. The carrying values and fair values of New Residential’s assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments for which fair value is disclosed, as of December 31, 2015 were as follows: Fair Value Principal Balance or Notional Amount Carrying Value Level 1 Level 2 Level 3 Total Assets Investments in: Excess mortgage servicing rights, at fair value (A) $ 329,367,971 $ 1,581,517 $ — $ — $ 1,581,517 $ 1,581,517 Excess mortgage servicing rights, equity method investees, at fair value (A) 73,058,050 217,221 — — 217,221 217,221 Servicer advances, at fair value 7,578,110 7,426,794 — — 7,426,794 7,426,794 Real estate securities, available-for-sale 4,418,552 2,501,881 — 917,598 1,584,283 2,501,881 Residential mortgage loans, held-for-investment 506,135 330,178 — — 330,433 330,433 Residential mortgage loans, held-for-sale 859,714 776,681 — — 784,750 784,750 Derivative assets 3,400,000 2,689 — 2,689 — 2,689 Cash and cash equivalents 249,936 249,936 249,936 — — 249,936 Restricted cash 94,702 94,702 94,702 — — 94,702 $ 13,181,599 $ 344,638 $ 920,287 $ 11,924,998 $ 13,189,923 Liabilities Repurchase agreements $ 4,043,942 $ 4,043,054 $ — $ 4,043,942 $ — $ 4,043,942 Notes and bonds payable 7,262,056 7,249,568 — — 7,260,909 7,260,909 Derivative liabilities 4,644,000 13,443 — 13,443 — 13,443 $ 11,306,065 $ — $ 4,057,385 $ 7,260,909 $ 11,318,294 (A) The notional amount represents the total unpaid principal balance of the residential mortgage loans underlying the Excess MSRs. New Residential does not receive an excess mortgage servicing amount on non-performing loans in Agency portfolios. New Residential has various processes and controls in place to ensure that fair value is reasonably estimated. With respect to the broker and pricing service quotations, to ensure these quotes represent a reasonable estimate of fair value, New Residential’s quarterly procedures include a comparison to quotations from different sources, outputs generated from its internal pricing models and transactions New Residential has completed with respect to these or similar assets or liabilities, as well as on its knowledge and experience of these markets. With respect to fair value estimates generated based on New Residential’s internal pricing models, New Residential corroborates the inputs and outputs of the internal pricing models by comparing them to available independent third party market parameters, where available, and models for reasonableness. New Residential believes its valuation methods and the assumptions used are appropriate and consistent with other market participants. Fair value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodology used to determine fair value and such changes could result in a significant increase or decrease in the fair value. New Residential’s assets measured at fair value on a recurring basis using Level 3 inputs changed as follows: Level 3 Excess MSRs (A) Excess MSRs in Equity Method Investees (A)(B) Agency Non-Agency MSRs (A) Servicer Advances Non-Agency RMBS Total Balance at December 31, 2014 $ 217,519 $ 200,214 $ 330,876 $ — $ 3,270,839 $ 723,000 $ 4,742,448 Transfers (C) Transfers from Level 3 — — — — — — — Transfers to Level 3 — — — — — — — Transfers from investments in excess mortgage servicing rights, equity method investees, to investments in excess mortgage servicing rights — 98,258 (98,258 ) — — — — Gains (losses) included in net income Included in other-than-temporary impairment on securities (D) — — — — — (5,788 ) (5,788 ) Included in change in fair value of investments in excess mortgage servicing rights (D) (3,080 ) 41,723 — — — — 38,643 Included in change in fair value of investments in excess mortgage servicing rights, equity method investees (D) — — 31,160 — — — 31,160 Included in change in fair value of investments in servicer advances — — — — (57,491 ) — (57,491 ) Included in gain (loss) on settlement of investments, net — — — — — 3,061 3,061 Included in other income (loss), net (D) 2,852 147 — — — 879 3,878 Gains (losses) included in other comprehensive income (E) — — — — — (6,701 ) (6,701 ) Interest income 30,742 103,823 — — 352,316 69,632 556,513 Purchases, sales, repayments and transfers Purchases 254,149 917,078 — — 20,042,582 1,288,901 22,502,710 Proceeds from sales — — — — — (425,761 ) (425,761 ) Proceeds from repayments (64,981 ) (216,927 ) (46,557 ) — (16,181,452 ) (179,772 ) (16,689,689 ) Other transfers — — — — — 116,832 116,832 Balance at December 31, 2015 $ 437,201 $ 1,144,316 $ 217,221 $ — $ 7,426,794 $ 1,584,283 $ 10,809,815 Transfers (C) Transfers from Level 3 — — — — — — Transfers to Level 3 — — — — — — Gains (losses) included in net income Included in other-than-temporary impairment on securities (D) — — — — — (10,264 ) (10,264 ) Included in change in fair value of investments in excess mortgage servicing rights (D) (5,372 ) (1,925 ) — — — — (7,297 ) Included in change in fair value of investments in excess mortgage servicing rights, equity method investees (D) — — 16,526 — — — 16,526 Included in servicing revenue, net (F) 88,325 88,325 Included in change in fair value of investments in servicer advances — — — — (7,768 ) — (7,768 ) Included in gain (loss) on settlement of investments, net — — — — — (18,117 ) (18,117 ) Included in other income (loss), net (D) 2,452 350 — — — (4,875 ) (2,073 ) Gains (losses) included in other comprehensive income (E) — — — — — 124,669 124,669 Interest income 35,526 114,615 — — 364,350 209,706 724,197 Purchases, sales and repayments Purchases — 124 — 571,158 15,266,816 2,746,409 18,584,507 Proceeds from sales — — — — — (261,192 ) (261,192 ) Proceeds from repayments (88,050 ) (239,782 ) (38,959 ) — (17,343,599 ) (827,059 ) (18,537,449 ) Balance at December 31, 2016 $ 381,757 $ 1,017,698 $ 194,788 $ 659,483 $ 5,706,593 $ 3,543,560 $ 11,503,879 (A) Includes the recapture agreement for each respective pool. (B) Amounts represent New Residential’s portion of the Excess MSRs held by the respective joint ventures in which New Residential has a 50% interest. (C) Transfers are assumed to occur at the beginning of the respective period. (D) The gains (losses) recorded in earnings during the period are attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting dates and realized gains (losses) recorded during the period. (E) These gains (losses) were included in net unrealized gain (loss) on securities in the Consolidated Statements of Comprehensive Income. (F) The components of Servicing revenue, net are disclosed in Note 5. Investments in Excess MSRs, Excess MSRs Equity Method Investees and MSRs Valuation Fair value estimates of New Residential’s MSRs and Excess MSRs were based on internal pricing models. The valuation technique is based on discounted cash flows. Significant inputs used in the valuations included expectations of prepayment rates, delinquency rates, recapture rates, the mortgage servicing amount or excess mortgage servicing amount of the underlying residential mortgage loans, as applicable, and discount rates that market participants would use in determining the fair values of mortgage servicing rights on similar pools of residential mortgage loans. In addition, for MSRs significant inputs included the market-level estimated cost of servicing. In order to evaluate the reasonableness of its fair value determinations, New Residential engages an independent valuation firm to separately measure the fair value of its MSRs and Excess MSRs. The independent valuation firm determines an estimated fair value range of each pool based on its own models and issues a “fairness opinion” with this range. New Residential compares the range included in the opinion to the value generated by its internal models. To date, New Residential has not made any significant valuation adjustments as a result of these fairness opinions. In addition, in valuing the MSRs and Excess MSRs, New Residential considered the likelihood of one of its servicers being removed as the servicer, which likelihood is considered to be remote. Significant increases (decreases) in the discount rates, prepayment or delinquency rates, or costs of servicing, in isolation would result in a significantly lower (higher) fair value measurement, whereas significant increases (decreases) in the recapture rates or mortgage servicing amount or excess mortgage servicing amount, as applicable, in isolation would result in a significantly higher (lower) fair value measurement. Generally, a change in the delinquency rate assumption is accompanied by a directionally similar change in the assumption used for the prepayment rate. The following tables summarize certain information regarding the weighted average inputs used in valuing the Excess MSRs, owned directly and through equity method investees: December 31, 2016 Significant Inputs (A) Prepayment Rate (B) Delinquency (C) Recapture Rate (D) Mortgage Servicing Amount (E) Collateral Weighted Average Maturity Years (F) Excess MSRs Directly Held (Note 4) Agency Original Pools 10.1 % 3.2 % 32.6 % 21 24 Recaptured Pools 7.4 % 4.3 % 23.0 % 21 25 Recapture Agreement 7.4 % 5.0 % 20.0 % 22 — 9.3 % 3.6 % 29.5 % 21 24 Non-Agency (G) Nationstar and SLS Serviced: Original Pools 11.8 % N/A 10.7 % 14 24 Recaptured Pools 7.9 % N/A 20.0 % 21 24 Recapture Agreement 7.5 % N/A 20.0 % 20 — Ocwen Serviced Pools 8.8 % N/A — % 14 26 9.4 % N/A 2.7 % 14 26 Total/Weighted Average--Excess MSRs Directly Held 9.4 % 3.6 % 10.0 % 16 26 Excess MSRs Held through Equity Method Investees (Note 4) Agency Original Pools 11.8 % 5.2 % 35.0 % 19 23 Recaptured Pools 7.3 % 4.5 % 24.7 % 23 25 Recapture Agreement 7.3 % 5.0 % 20.0 % 23 — Total/Weighted Average--Excess MSRs Held through Investees 9.8 % 5.0 % 29.8 % 21 24 Total/Weighted Average--Excess MSRs All Pools 9.5 % 3.9 % 14.2 % 17 26 MSRs Agency Ditech subserviced pools 12.7 % 3.2 % 29.1 % 26 23 FirstKey subserviced pools (H) 11.2 % 0.5 % 19.6 % 26 24 Total/Weighted Average--MSRs 12.4 % 2.8 % 27.5 % 26 23 December 31, 2015 Significant Inputs (A) Prepayment Rate (B) Delinquency (C) Recapture Rate (D) Excess Mortgage Servicing Amount (E) Collateral Weighted Average Maturity Years (F) Excess MSRs Directly Held (Note 4) Agency Original Pools 10.7 % 3.5 % 29.5 % 21 24 Recaptured Pools 7.5 % 4.9 % 20.0 % 20 25 Recapture Agreement 7.6 % 4.9 % 20.0 % 22 — 10.0 % 3.8 % 27.4 % 21 24 Non-Agency (G) Nationstar and SLS Serviced: Original Pools 12.5 % N/A 10.2 % 14 24 Recaptured Pools 7.5 % N/A 20.0 % 20 25 Recapture Agreement 7.5 % N/A 20.0 % 20 — Ocwen Serviced Pools 9.3 % N/A — % 14 26 10.0 % N/A 2.6 % 14 26 Total/Weighted Average--Excess MSRs Directly Held 10.0 % 3.8 % 9.5 % 16 25 Excess MSRs Held through Equity Method Investees (Note 4) Agency Original Pools 12.6 % 5.9 % 34.3 % 19 24 Recaptured Pools 7.7 % 5.0 % 20.0 % 23 25 Recapture Agreement 7.7 % 4.9 % 20.0 % 23 — Total/Weighted Average--Excess MSRs Held through Investees 10.8 % 5.6 % 29.0 % 20 24 Total/Weighted Average--Excess MSRs All Pools 10.2 % 4.2 % 13.6 % 17 25 (A) Weighted by fair value of the portfolio. (B) Projected annualized weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector. (C) Projected percentage of residential mortgage loans in the pool for which the borrower will miss its mortgage payments. (D) Percentage of voluntarily prepaid loans that are expected to be refinanced by the related servicer or subservicer, as applicable. (E) Weighted average total mortgage servicing amount, in excess of the basic fee as applicable, measured in basis points (bps). (F) Weighted average maturity of the underlying residential mortgage loans in the pool. (G) For certain pools, the Excess MSR will be paid on the total UPB of the mortgage portfolio (including both performing and delinquent loans until REO). For these pools, no delinquency assumption is used. (H) Recapture rate represents the expected recapture rate with the successor subservicer appointed by NRM. As of December 31, 2016 and 2015 , weighted average discount rates of 9.8% and 9.8% , respectively, were used to value New Residential’s investments in Excess MSRs (directly and through equity method investees). As of December 31, 2016 , a weighted average discount rate of 12.0% was used to value New Residential’s investments in MSRs. All of the assumptions listed have some degree of market observability, based on New Residential’s knowledge of the market, relationships with market participants, and use of common market data sources. New Residential uses assumptions that generate its best estimate of future cash flows for each investment in MSRs and Excess MSRs. When valuing MSRs and Excess MSRs, New Residential uses the following criteria to determine the significant inputs: • Prepayment Rate: Prepayment rate projections are in the form of a “vector” that varies over the expected life of the pool. The prepayment vector specifies the percentage of the collateral balance that is expected to prepay voluntarily (i.e., pay off) and involuntarily (i.e., default) at each point in the future. The prepayment vector is based on assumptions that reflect macroeconomic conditions and loan level factors such as the borrower’s interest rate, FICO score, loan-to-value ratio, debt-to-income ratio, vintage on a loan level basis, as well as the projected effect on loans eligible for the Home Affordable Refinance Program 2.0 (“HARP 2.0”). New Residential considers historical prepayment experience associated with the collateral when determining this vector and also reviews industry research on the prepayment experience of similar loan pools. This data is obtained from remittance reports, market data services and other market sources. • Delinquency Rates: For existing mortgage pools, delinquency rates are based on the recent pool-specific experience of loans that missed their latest mortgage payments. Delinquency rate projections are in the form of a “vector” that varies over the expected life of the pool. The delinquency vector specifies the percentage of the unpaid principal balance that is expected to be delinquent each month. The delinquency vector is based on assumptions that reflect macroeconomic conditions, the historical delinquency rates for the pools and the underlying borrower characteristics such as the FICO score and loan-to-value ratio. For the recapture agreements and recaptured loans, delinquency rates are based on the experience of similar loan pools originated by New Residential’s servicers and subservicers, and delinquency experience over the past year. New Residential believes this time period provides a reasonable sample for projecting future delinquency rates while taking into account current market conditions. Additional consideration is given to loans that are expected to become 30 or more days delinquent. • Recapture Rates: Recapture rates are based on actual average recapture rates experienced by New Residential’s servicers and subservicers on similar residential mortgage loan pools. Generally, New Residential looks to three to six months’ worth of actual recapture rates, which it believes provides a reasonable sample for projecting future recapture rates while taking into account current market conditions. Recapture rate projections are in the form of a “vector” that varies over the expected life of the pool. The recapture vector specifies the percentage of the refinanced loans that have been recaptured within the pool by the servicer or subservicer. The recapture vector takes into account the nature and timeline of the relationship between the borrowers in the pool and the servicer or subservicer, the customer retention programs offered by the servicer or subservicer and the historical recapture rates. • Mortgage Servicing Amount or Excess Mortgage Servicing Amount: For existing mortgage pools, mortgage servicing amount and excess mortgage servicing amount projections are based on the actual total mortgage servicing amount, in excess of a base fee as applicable. For loans expected to be refinanced by the related servicer or subservicer and subject to a recapture agreement, New Residential considers the mortgage servicing amount or excess mortgage servicing amount on loans recently originated by the related servicer over the past three months and other general market considerations. New Residential believes this time period provides a reasonable sample for projecting future mortgage servicing amounts and excess mortgage servicing amounts while taking into account current market conditions. • Discount Rate: The discount rates used by New Residential are derived from market data on pricing of mortgage servicing rights backed by similar collateral. New Residential uses different prepayment and delinquency assumptions in valuing the MSRs and Excess MSRs relating to the original loan pools, the recapture agreements and the MSRs and Excess MSRs relating to recaptured loans. The prepayment rate and delinquency rate assumptions differ because of differences in the collateral characteristics, eligibility for HARP 2.0 and expected borrower behavior for original loans and loans which have been refinanced. The assumptions for recapture and discount rates when valuing MSRs and Excess MSRs and recapture agreements are based on historical recapture experience and market pricing. Investments in Servicer Advances Valuation New Residential uses internal pricing models to estimate the future cash flows related to the Servicer Advance investments that incorporate significant unobservable inputs and include assumptions that are inherently subjective and imprecise. New Residential’s estimations of future cash flows include the combined cash flows of all of the components that comprise the Servicer Advance investments: existing advances, the requirement to purchase future advances, the recovery of advances and the right to the basic fee component of the related MSR. The factors that most significantly impact the fair value include (i) the rate at which the Servicer Advance balance changes over the term of the investment, (ii) the UPB of the underlying loans with respect to which New Residential has the obligation to make advances and owns the basic fee component of the related MSR which, in turn, is driven by prepayment rates and (iii) the percentage of delinquent loans with respect to which New Residential owns the basic fee component of the related MSR. The valuation technique is based on discounted cash flows. Significant inputs used in the valuations included the assumptions used to establish the aforementioned cash flows and discount rates that market participants would use in determining the fair values of Servicer Advances. In order to evaluate the reasonableness of its fair value determinations, New Residential engages an independent valuation firm to separately measure the fair value of its investment in Servicer Advances. The independent valuation firm determines an estimated fair value range based on its own models and issues a “fairness opinion” with this range. New Residential compares the range included in the opinion to the value generated by its internal models. To date, New Residential has not made any significant valuation adjustments as a result of these fairness opinions. In valuing the Servicer Advances, New Residential considered the likelihood of the related servicer being removed as the servicer, which likelihood is considered to be remote. Significant increases (decreases) in the advance balance-to-UPB ratio, prepayment rate, delinquency rate, or discount rate, in isolation, would result in a significantly lower (higher) fair value measurement. Generally, a change in the delinquency rate assumption is accompanied by a directionally similar change in the assumption used for the advance balance-to-UPB ratio. The following table summarizes certain information regarding the inputs used in valuing the Servicer Advances: Significant Inputs Weighted Average Outstanding Servicer Advances to UPB of Underlying Residential Mortgage Loans Prepayment Rate (A) Delinquency Mortgage Servicing Amount (B) Discount Rate Collateral Weighted Average Maturity (Years) (C) December 31, 2016 2.1 % 9.8 % 14.9 % 8.3 bps 5.6 % 24.8 December 31, 2015 2.3 % 10.4 % 17.5 % 9.2 bps 5.6 % 24.5 (A) Projected annual weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector. (B) Mortgage servicing amount excludes the amounts New Residential pays its servicers as a monthly servicing fee. (C) Weighted average maturity of the underlying residential mortgage loans in the pool. The valuation of the Servicer Advances also takes into account the performance fee paid to the servicer, which in the case of the Buyer is based on its equity returns and therefore is impacted by relevant financing assumptions such as loan-to-value ratio and interest rate, and which in the case of Servicer Advances acquired from HLSS is based partially on future LIBOR estimates. All of the assumptions listed have some degree of market observability, based on New Residential’s knowledge of the market, relationships with market participants, and use of common market data sources. The prepayment rate, the delinquency rate and the advance-to-UPB ratio projections are in the form of “curves” or “vectors” that vary over the expected life of the underlying mortgages and related Servicer Advances. New Residential uses assumptions that generate its best estimate of future cash flows for each investment in Servicer Advances, including the basic fee component of the related MSR. When valuing Servicer Advances, New Residential uses the following criteria to determine the significant inputs: • Servicer advance balance: Servicer advance balance projections are in the form of a “vector” that varies over the expected life of the residential mortgage loan pool. The servicer advance balance projection is based on assumptions that reflect factors such as the borrower’s expected delinquency status, the rate at which delinquent borrowers re-perform or become current again, servicer modification offer and acceptance rates, liquidation timelines and the servicers’ stop advance and clawback policies. • Prepayment Rate: Prepayment rate projections are in the form of a “vector” that varies over the expected life of the pool. The prepayment vector specifies the percentage of the collateral balance that is expected to prepay voluntarily (i.e., pay off) and involuntarily (i.e., default) at each point in the future. The prepayment vector is based on assumptions that reflect macroeconomic conditions and factors such as the borrower’s FICO score, loan-to-value ratio, debt-to-income ratio, and vintage on a loan level basis. New Residential considers collateral-specific prepayment experience when determining this vector. • Delinquency Rates: For existing mortgage pools, delinquency rates are based on the recent pool-specific experience of loans that missed recent mortgage payment(s) as well as loan- and borrower-specific characteristics such as the borrower’s FICO score, the loan-to-value ratio, debt-to-income ratio, occupancy status, loan documentation, payment history and previous loan modifications. New Residential believes the time period utilized provides a reasonable sample for projecting future delinquency rates while taking into account current market conditions. • Mortgage Servicing Amount: Mortgage servicing amounts are contractually determined on a pool-by-pool basis. New Residential projects the weighted average mortgage servicing amount based on its projections for prepayment rates. • LIBOR: The performance-based incentive fees on both Ocwen-serviced and Nationstar-serviced servicer advance portfolios are driven by LIBOR-based factors. The LIBOR curves used are widely used by market participants as reference rates for many financial instruments. • Discount Rate: The discount rates used by New Residential are derived from market data on pricing of mortgage servicing rights backed by similar collateral and the advances made thereon. Real Estate Securities Valuation New Residential’s securities valuation methodology and results are further detailed as follows: Fair Value Asset Type Outstanding Face Amount Amortized Cost Basis Multiple Quotes (A) Single Quote (B) Total Level December 31, 2016 Agency RMBS $ 1,486,739 $ 1,532,421 $ 1,530,298 $ — $ 1,530,298 2 Non-Agency RMBS (C) 7,302,218 3,415,906 3,028,094 515,466 3,543,560 3 Total $ 8,788,957 $ 4,948,327 $ 4,558,392 $ 515,466 $ 5,073,858 December 31, 2015 Agency RMBS $ 884,578 $ 918,633 $ 917,598 $ — $ 917,598 2 Non-Agency RMBS (C) 3,533,974 1,579,445 1,029,981 554,302 1,584,283 3 Total $ 4,418,552 $ 2,498,078 $ 1,947,579 $ 554,302 $ 2,501,881 (A) New Residential generally obtained pricing service quotations or broker quotations from two sources, one of which was generally the seller (the party that sold New Residential the security) for Non-Agency RMBS. New Residential evaluates quotes received and determines one as being most representative of fair value, and does not use an average of the quotes. Even if New Residential receives two or more quotes on a particular security that come from non-selling brokers or pricing services, it does not use an average because it believes using an actual quote more closely represents a transactable price for the security than an average level. Furthermore, in some cases there is a wide disparity between the quotes New Residential receives. New Residential believes using an average of the quotes in these cases would not represent the fair value of the asset. Based on New Residential’s own fair value analysis, it selects one of the quotes which is believed to more accurately reflect fair value. New Residential has not adjusted any of the quotes received in the periods presented. These quotations are generally received via email and contain disclaimers which state that they are “indicative” and not “actionable” — meaning that the party giving the quotation is not bound to actually purchase the security at the quoted price. New Residential’s investments in Agency RMBS are classified within Level 2 of the fair value hierarchy because the market for these securities is very active and market prices are readily observable. The third-party pricing services and brokers engaged by New Residential (collectively, “valuation providers”) use either the income approach or the market approach, or a combination of the two, in arriving at their estimated valuations of RMBS. Valuation providers using the market approach generally look at prices and other relevant information generated by market transactions involving identical or comparable assets. Valuation providers using the income approach create pricing models that generally incorporate such assumptions as discount rates, expected prepayment rates, expected default rates and expected loss severities. New Residential has reviewed the methodologies utilized by its valuation providers and has found them to be consistent with GAAP requirements. In addition to obtaining multiple quotations, when available, and reviewing the valuation methodologies of its valuation providers, New Residential creates its own internal pricing models for Level 3 securities and uses the outputs of these models as part of its process of evaluating the fair value estimates it receives from its valuation providers. These models incorporate the same types of assumptions as the models used by the valuation providers, but the assumptions are developed independently. These assumptions are regularly refined and updated at least quarterly by New Residential, and reviewed by its valuation group, which is separate from its investment acquisition and management group, to reflect market developments and actual performance. For 77.1% of New Residential’s Non-Agency RMBS, the ranges of assumptions used by New Residential’s valuation providers are summarized in the table below. The assumptions used by New Residential’s valuation providers with respect to the remainder of New Residential’s Non-Agency RMBS were not readily available. Fair Value Discount Rate Prepayment Rate (a) CDR (b) Loss Severity (c) Non-Agency RMBS $ 2,731,218 2.06% to 32.75% 0.25% to 20% 0.25% to 10.0% 5.0% to 100% (a) Represents the annualized rate of the prepayments as a percentage of the total principal balance of the pool. (b) Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance of the pool. (c) Represents the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding balance. (B) New Residential was unable to obtain quotations from more than one source on these securities. For approximately $509.6 million in 2016 and $228.5 million in 2015 , the one source was the party that sold New Residential the security. (C) Includes New Residential’s investments in interest-only notes for which the fair value option for financial instruments was elected. For New Residential’s investments in real estate securities categorized within Level 3 of the fair value hierarchy, the significant unobservable inputs include the discount rates, assumptions related to prepayments, default rates and loss severities. Significant increases (decreases) in any of the discount rates, default rates or loss severities in isolation would result in a significantly lower (higher) fair value measurement. The impact of changes in prepayment rates would have differing impacts on fair value, depending on the seniority of the investment. Generally, a change in the default assumption is accompanied by directionally similar change |
EQUITY AND EARNINGS PER SHARE
EQUITY AND EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
EQUITY AND EARNINGS PER SHARE | EQUITY AND EARNINGS PER SHARE Equity and Dividends On April 26, 2013, Drive Shack announced that its board of directors had formally declared the distribution of shares of common stock of New Residential, a then wholly owned subsidiary of Drive Shack. Following the spin-off, New Residential is an independent, publicly-traded REIT primarily focused on investing in residential mortgage related assets. The spin-off was completed on May 15, 2013 and New Residential began trading on the New York Stock Exchange under the symbol “NRZ.” The spin-off transaction was effected as a taxable pro rata distribution by Drive Shack of all the outstanding shares of common stock of New Residential to the stockholders of record of Drive Shack as of May 6, 2013. The stockholders of Drive Shack as of the record date received one share of New Residential common stock for each share of Drive Shack common stock held. New Residential’s certificate of incorporation authorizes 2,000,000,000 shares of common stock, par value $0.01 per share, and 100,000,000 shares of preferred stock, par value $0.01 per share. At the time of the completion of the spin-off, there were 126,512,823 outstanding shares of common stock which was based on the number of Drive Shack’s shares of common stock outstanding on May 6, 2013 and a distribution ratio of one share of New Residential common stock for each share of Drive Shack common stock (adjusted for the reverse split described below). New Residential’s board of directors authorized a one -for-two reverse stock split on August 5, 2014, subject to stockholder approval. In a special meeting on October 15, 2014, New Residential’s stockholders approved the reverse split. On October 17, 2014, New Residential effected the one-for-two reverse stock split of its common stock. As a result of the reverse stock split, every two shares of New Residential’s common stock were converted into one share of common stock, reducing the number of issued and outstanding shares of New Residential’s common stock from approximately 282.8 million to approximately 141.4 million . The impact of this reverse stock split has been retroactively applied to all periods presented. In April 2014, New Residential issued 13,875,000 shares of its common stock in a public offering at a price to the public of $12.20 per share for net proceeds of approximately $163.8 million . One of New Residential’s executive officers participated in this offering and purchased an additional 500,000 shares at the public offering price for net proceeds of approximately $6.1 million . To compensate the Manager for its successful efforts in raising capital for New Residential, in connection with this offering, New Residential granted options to the Manager relating to 1,437,500 shares of New Residential’s common stock at a price of $12.20 , which had a fair value of approximately $1.4 million as of the grant date. The assumptions used in valuing the options were: a 2.87% risk-free rate, a 12.584% dividend yield, 25.66% volatility and a 10 -year term. In April 2015, New Residential issued the New Residential Acquisition Common Stock in connection with the HLSS Acquisition (Note 1). In addition, in April 2015, New Residential issued 29,213,020 shares of its common stock in a public offering at a price to the public of $15.25 per share for net proceeds of approximately $436.1 million . One of New Residential’s executive officers participated in this offering and purchased 250,000 shares at the public offering price. To compensate the Manager for its successful efforts in raising capital for New Residential, in connection with this offering and the New Residential Acquisition Common Stock issued in the HLSS Acquisition, New Residential granted options to the Manager relating to 5,750,000 shares of New Residential’s common stock at a price of $15.25 , which had a fair value of approximately $8.9 million as of the grant date. The assumptions used in valuing the options were: a 2.02% risk-free rate, a 6.71% dividend yield, 24.04% volatility and a 10 -year term. In June 2015, New Residential issued 27.9 million shares of its common stock in a public offering at a price to the public of $15.88 per share for net proceeds of approximately $442.6 million . One of New Residential’s executive officers participated in this offering and purchased 9,100 shares at the public offering price. To compensate the Manager for its successful efforts in raising capital for New Residential, in connection with this offering, New Residential granted options to the Manager relating to 2.8 million shares of New Residential’s common stock at the public offering price, which had a fair value of approximately $3.7 million as of the grant date. The assumptions used in valuing the options were: a 2.61% risk-free rate, a 7.81% dividend yield, 23.73% volatility and a 10 -year term. In addition, the Manager and its employees exercised an aggregate of 6.7 million options and were issued an aggregate of 3.6 million shares of New Residential’s common stock in a cashless exercise, which were sold to third parties in a simultaneous secondary offering. In August 2016, New Residential issued 20.0 million shares of its common stock in a public offering at a price to the public of $14.20 per share for net proceeds of approximately $278.8 million . To compensate the Manager for its successful efforts in raising capital for New Residential, in connection with this offering, New Residential granted options to the Manager relating to 2.0 million shares of New Residential’s common stock at the public offering price, which had a fair value of approximately $2.3 million as of the grant date. The assumptions used in valuing the options were: a 1.45% risk-free rate, a 11.80% dividend yield, 27.57% volatility and a 10 -year term. In May 2014, an employee of the Manager exercised 107,500 options with a weighted average exercise price of $5.61 and received 107,500 shares of common stock of New Residential. In August 2014, employees of the Manager and one of New Residential’s directors exercised an aggregate of 498,500 options with a weighted average exercise price of $5.62 and received 276,037 shares of common stock of New Residential. In December 2014, a former employee of the Manager exercised 42,566 options with a weighted average exercise price of $7.19 and received 42,566 shares of common stock of New Residential. In July 2015, a former employee of the Manager exercised 37,500 options with a weighted average exercise price of $7.19 and received 20,227 shares of common stock of New Residential. In August 2016, employees of the Manager exercised an aggregate of 1,100,497 options with a weighted average exercise price of $10.59 per share and received 280,111 shares of common stock of New Residential. Common dividends have been declared as follows: Per Share Declaration Date Payment Date Quarterly Dividend Special Dividend Total Dividend Total Amounts Distributed (millions) March 19, 2014 April 2014 $ 0.35 $ — $ 0.35 $ 44.3 June 17, 2014 July 2014 0.35 0.15 0.50 70.6 September 18, 2014 October 2014 0.35 — 0.35 49.5 December 18, 2014 January 2015 0.38 — 0.38 53.7 March 16, 2015 April 2015 0.38 — 0.38 53.7 May 14, 2015 July 2015 0.45 — 0.45 89.5 September 18, 2015 October 2015 0.46 — 0.46 106.0 December 10, 2015 January 2016 0.46 — 0.46 106.0 March 22, 2016 April 2016 0.46 — 0.46 106.0 June 27, 2016 July 2016 0.46 — 0.46 106.0 September 23, 2016 October 2016 0.46 — 0.46 115.4 December 16, 2016 January 2017 0.46 — 0.46 115.4 Approximately 2.4 million shares of New Residential’s common stock were held by Fortress, through its affiliates, and its principals at December 31, 2016 . Option Plan New Residential has a Nonqualified Stock Option and Incentive Award Plan, as amended (the “Plan”) which provides for the grant of equity-based awards, including restricted stock, options, stock appreciation rights, performance awards, tandem awards and other equity-based and non-equity based awards, in each case to the Manager, and to the directors, officers, employees, service providers, consultants and advisor of the Manager who perform services for New Residential, and to New Residential’s directors, officers, service providers, consultants and advisors. New Residential initially reserved 15,000,000 shares of its common stock for issuance under the Plan; on the first day of each fiscal year beginning during the 10 -year term of the Plan in and after calendar year 2014, that number will be increased by a number of shares of New Residential’s common stock equal to 10% of the number of shares of common stock newly issued by New Residential during the immediately preceding fiscal year (and, in the case of fiscal year 2013, after the effective date of the Plan). No adjustment was made on January 1, 2014. Increases of 2,000,000 , 8,543,539 and 1,437,500 were made on January 1, 2017 , 2016 and 2015 , respectively. New Residential’s board of directors may also determine to issue options to the Manager that are not subject to the Plan, provided that the number of shares underlying any options granted to the Manager in connection with capital raising efforts would not exceed 10% of the shares sold in such offering and would be subject to NYSE rules. Upon exercise, all options will be settled in an amount of cash equal to the excess of the fair market value of a share of common stock on the date of exercise over the exercise price per share unless advance approval is made to settle options in shares of common stock. Prior to the spin-off, Drive Shack had issued options to the Manager in connection with capital raising activities. In connection with the spin-off, the 10.7 million options that were held by the Manager, or by the directors, officers or employees of the Manager, were converted into an adjusted Drive Shack option and a new New Residential option. The exercise price of each adjusted Drive Shack option and New Residential option was set to collectively maintain the intrinsic value of the Drive Shack option immediately prior to the spin-off and to maintain the ratio of the exercise price of the adjusted Drive Shack option and the New Residential option, respectively, to the fair market value of the underlying shares as of the spin-off date, in each case based on the five day average closing price subsequent to the spin-off date. Upon joining the board, non-employee directors were, in accordance with the Plan, granted options relating to an aggregate of 6,000 shares of common stock. The fair value of such options was not material at the date of grant. New Residential’s outstanding options were summarized as follows: December 31, 2016 December 31, 2015 Issued Prior to 2011 Issued in Total Issued Prior to 2011 Issued in 2011 - 2015 Total Held by the Manager 330,090 10,874,152 11,204,242 345,720 10,582,860 10,928,580 Issued to the Manager and subsequently transferred to certain of the Manager’s employees 18,910 1,967,458 1,986,368 88,280 1,359,247 1,447,527 Issued to the independent directors — 6,000 6,000 — 4,000 4,000 Total 349,000 12,847,610 13,196,610 434,000 11,946,107 12,380,107 The following table summarizes New Residential’s outstanding options as of December 31, 2016 . The last sales price on the New York Stock Exchange for New Residential’s common stock in the year ended December 31, 2016 was $15.72 per share. Recipient Date of Grant/ Exercise (A) Number of Unexercised Options Options Exercisable as of December 31, 2016 Weighted Average Exercise Price (B) Intrinsic Value of Exercisable Options as of December 31, 2016 (millions) Directors Various 6,000 6,000 $ 13.99 $ — Manager (C) 2007 349,000 349,000 31.27 — Manager (C) 2012 25,000 25,000 7.19 0.2 Manager (C) 2013 835,571 835,571 11.48 3.5 Manager (C) 2014 1,437,500 1,437,500 12.20 5.1 Manager (C) 2015 8,543,539 5,509,457 15.44 1.5 Manager (C) 2016 2,000,000 266,667 14.20 0.4 Outstanding 13,196,610 8,429,195 (A) Options expire on the tenth anniversary from date of grant. (B) The exercise prices are subject to adjustment in connection with return of capital dividends. (C) The Manager assigned certain of its options to Fortress’s employees as follows: Date of Grant Range of Exercise Prices Total Unexercised Inception to Date 2007 $29.92 to $33.80 18,910 2014 $12.20 258,750 2015 $15.25 to $15.88 1,708,708 2016 $14.20 — Total 1,986,368 The following table summarizes activity in New Residential’s outstanding options: Amount Weighted Average Exercise Price December 31, 2014 outstanding options 10,737,093 Options granted 8,543,539 $ 15.46 Options exercised (A) (6,734,525 ) $ 7.81 Options expired unexercised (166,000 ) December 31, 2015 outstanding options 12,380,107 Options granted 2,002,000 $ 14.20 Options exercised (A) (1,100,497 ) $ 10.59 Options expired unexercised (85,000 ) December 31, 2016 outstanding options 13,196,610 See table above (A) The 1.1 million and 6.7 million options that were exercised in 2016 and 2015 had an intrinsic value of approximately $4.0 million and $59.4 million , respectively, at the date of exercise. Income and Earnings Per Share New Residential is required to present both basic and diluted earnings per share (“EPS”). Basic EPS is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding plus the additional dilutive effect, if any, of common stock equivalents during each period. New Residential’s common stock equivalents are its outstanding options. During the years ended December 31, 2016 , 2015 and 2014 , based on the treasury stock method, New Residential had 364,107 , 2,167,796 and 3,092,844 dilutive common stock equivalents, respectively. Noncontrolling Interests Noncontrolling interests is comprised of the interests held by third parties in consolidated entities that hold New Residential’s investment in Servicer Advances (Note 6) and Consumer Loans (Note 9), as well as HLSS (Note 1) for the period of April 6, 2015 through October 23, 2015. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation – Following the HLSS Acquisition (see Note 1 for related defined terms), material potential claims, lawsuits, regulatory inquiries or investigations, and other proceedings, of which New Residential is currently aware, are as follows. New Residential has not accrued losses in connection with these legal contingencies because it does not believe there is a probable and reasonably estimable loss. Furthermore, New Residential cannot reasonably estimate the range of potential loss related to these legal contingencies at this time. However, the ultimate outcome of the proceedings described below may have a material adverse effect on New Residential’s business, financial position or results of operations. In addition to the matters described below, from time to time, New Residential is or may be involved in various disputes, litigation and regulatory inquiry and investigation matters that arise in the ordinary course of business. Given the inherent unpredictability of these types of proceedings, it is possible that future adverse outcomes could have a material adverse effect on its financial results. New Residential is not aware of any unasserted claims that it believes are material and probable of assertion where the risk of loss is expected to be reasonably possible. Three putative class action lawsuits have been filed against HLSS and certain of its current and former officers and directors in the United States District Court for the Southern District of New York entitled: (i) Oliveira v. Home Loan Servicing Solutions, Ltd., et al. , No. 15-CV-652 (S.D.N.Y.), filed on January 29, 2015; (ii) Berglan v. Home Loan Servicing Solutions, Ltd., et al. , No. 15-CV-947 (S.D.N.Y.), filed on February 9, 2015; and (iii) W. Palm Beach Police Pension Fund v. Home Loan Servicing Solutions, Ltd., et al. , No. 15-CV-1063 (S.D.N.Y.), filed on February 13, 2015. On April 2, 2015, these lawsuits were consolidated into a single action, which is referred to as the “Securities Action.” On April 28, 2015, lead plaintiffs, lead counsel and liaison counsel were appointed in the Securities Action. On November 9, 2015, lead plaintiffs filed an amended class action complaint. On January 27, 2016, the Securities Action was transferred to the United States District Court for the Southern District of Florida and given the Index No. 16-CV-60165 (S.D. Fla.). The Securities Action names as defendants HLSS, former HLSS Chairman William C. Erbey, HLSS Director, President, and Chief Executive Officer John P. Van Vlack, and HLSS Chief Financial Officer James E. Lauter. The Securities Action asserts causes of action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) based on certain public disclosures made by HLSS relating to its relationship with Ocwen and HLSS’s risk management and internal controls. More specifically, the consolidated class action complaint alleges that a series of statements in HLSS’s disclosures were materially false and misleading, including statements about (i) Ocwen’s servicing capabilities; (ii) HLSS’s contingencies and legal proceedings; (iii) its risk management and internal controls; and (iv) certain related party transactions. The consolidated class action complaint also appears to allege that HLSS’s financial statements for the years ended 2012 and 2013, and the first quarter ended March 30, 2014, were false and misleading based on HLSS’s August 18, 2014 restatement. Lead plaintiffs in the Securities Action also allege that HLSS misled investors by failing to disclose, among other things, information regarding governmental investigations of Ocwen’s business practices. Lead plaintiffs seek money damages under the Exchange Act in an amount to be proven at trial and reasonable costs, expenses, and fees. On February 11, 2015, defendants filed motions to dismiss the Securities Action in its entirety. On June 6, 2016, all allegations except those regarding certain related party transactions were dismissed. New Residential intends to vigorously defend the Securities Action. Three shareholder derivative actions have been filed in the United States District Court for the Southern District of Florida purportedly on behalf of Ocwen: (i) Sokolowski v. Erbey, et al. , No. 14-CV-81601 (S.D. Fla.) (the “Sokolowski Action”); (ii) Hutt v. Erbey, et al., No. 15-CV-81709 (S.D. Fla.) (the “Hutt Action”); and (iii) Lowinger v. Erbey, et al. , No. 15-CV-62628 (S.D. Fla.) (the “Lowinger Action”). On November 9, 2015, HLSS filed a motion to dismiss the Sokolowski Action. While that motion was pending, the Hutt Action, which at the time did not name HLSS as a defendant, was transferred from the Northern District of Georgia to the Southern District of Florida and the Lowinger Action, which at the time also did not name HLSS as a defendant, was filed. On January 8, 2016, the court consolidated the three actions (the “Ocwen Derivative Action”) and denied HLSS’s motion to dismiss the Sokolowski complaint as moot and without prejudice to re-file a new motion to dismiss following the filing of a consolidated complaint. On March 8, 2016, plaintiffs filed their consolidated complaint. The consolidated complaint alleges, among other things, that certain directors and officers of Ocwen, including former HLSS Chairman William C. Erbey, breached their fiduciary duties to Ocwen by, among other things, causing Ocwen to enter into transactions that were harmful to Ocwen. The complaint further alleges that HLSS and others aided and abetted the alleged breaches of fiduciary duty by Mr. Erbey and the other directors and officers of Ocwen who have been named as defendants. The consolidated complaint also asserts causes of action against HLSS and others for unjust enrichment and for contribution. The lawsuit seeks money damages from HLSS in an amount to be proven at trial. On May 13, 2016, HLSS filed a motion to dismiss the consolidated complaint. On January 19, 2017, the court approved a settlement plaintiffs reached with Ocwen providing for a with prejudice dismissal and releases for all defendants, including HLSS and New Residential. Neither HLSS nor New Residential were required to make any settlement payment. A shareholder derivative action asserting some of the same claims made in the Ocwen Derivative Action, including that HLSS and others aided and abetted alleged breaches of fiduciary duties by directors and officers of Ocwen, including Mr. Erbey, has been filed in Florida state court in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida purportedly on behalf of Ocwen: Moncavage v. Faris, et al. , No. 2015CA003244 (Fla. Palm Beach Cty. Ct.). The lawsuit seeks money damages from HLSS in an amount to be proved at trial. HLSS has not been served. On February 9, 2017, plaintiff filed a notice of voluntary dismissal without prejudice. During the first three quarters of 2015, through their investment manager, the HSART Bondholders alleged that events of default had occurred under a debt issuance (HSART, see Note 11) secured by a portion of the Servicer Advances acquired from HLSS and that, as a result, the HSART Bondholders were due additional interest under the related agreements. In February 2015, in response to such allegations, instead of releasing such amounts to the New Residential subsidiary that sponsors the HSART transaction entitled thereto, the trustee of HSART began to withhold, monthly, such Withheld Funds so that such amounts were reserved in the event that it was determined that any of the alleged events of default had occurred. On August 28, 2015, the trustee commenced a legal proceeding requesting instruction from the court regarding the alleged defaults and the disposition of the Withheld Funds. On October 2, 2015, the notes held by the HSART Bondholders were repaid in full. On October 14, 2015, the court ruled that no event of default had occurred under HSART, authorized the trustee to release the Withheld Funds and dismissed the legal proceeding. As a result of this ruling, $92.7 million was released from restricted cash accounts related to HSART and is now available for unrestricted use by New Residential. New Residential is, from time to time, subject to inquiries by government entities. New Residential currently does not believe any of these inquiries would result in a material adverse effect on New Residential’s business. Indemnifications – In the normal course of business, New Residential and its subsidiaries enter into contracts that contain a variety of representations and warranties and that provide general indemnifications. New Residential’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against New Residential that have not yet occurred. However, based on its experience, New Residential expects the risk of material loss to be remote. Capital Commitments — As of December 31, 2016 , New Residential had outstanding capital commitments related to investments in the following investment types (also refer to Note 5 for an MSR investment commitment and to Note 18 for additional capital commitments entered into subsequent to December 31, 2016 , if any): MSRs and Servicer Advances — New Residential and, in some cases, third-party co-investors agreed to purchase future Servicer Advances related to certain Non-Agency mortgage loans. In addition, New Residential’s subsidiary, NRM, is obligated to fund future Servicer Advances related to the loans it is obligated to service. The actual amount of future advances purchased will be based on: (a) the credit and prepayment performance of the underlying loans, (b) the amount of advances recoverable prior to liquidation of the related collateral and (c) the percentage of the loans with respect to which no additional advance obligations are made. The actual amount of future advances is subject to significant uncertainty. See Notes 5 and 6 for information on New Residential’s investments in MSRs and Servicer Advances, respectively. Residential Mortgage Loans — As part of its investment in residential mortgage loans, New Residential may be required to outlay capital. These capital outflows primarily consist of advance escrow and tax payments, residential maintenance and property disposition fees. The actual amount of these outflows is subject to significant uncertainty. See Note 8 for information on New Residential’s investments in residential mortgage loans. Environmental Costs — As a residential real estate owner, through its REO, New Residential is subject to potential environmental costs. At December 31, 2016 , New Residential is not aware of any environmental concerns that would have a material adverse effect on its consolidated financial position or results of operations. Debt Covenants — New Residential’s debt obligations contain various customary loan covenants (Note 11). Certain Tax-Related Covenants — If New Residential is treated as a successor to Drive Shack under applicable U.S. federal income tax rules, and if Drive Shack failed to qualify as a REIT for a taxable year ending on or before December 31, 2014, New Residential could be prohibited from electing to be a REIT. Accordingly, in the separation and distribution agreement executed in connection with New Residential’s spin-off from Drive Shack, Drive Shack (i) represented that it had no knowledge of any fact or circumstance that would cause New Residential to fail to qualify as a REIT, (ii) covenanted to use commercially reasonable efforts to cooperate with New Residential as necessary to enable New Residential to qualify for taxation as a REIT and receive customary legal opinions concerning REIT status, including providing information and representations to New Residential and its tax counsel with respect to the composition of Drive Shack’s income and assets, the composition of its stockholders, and its operation as a REIT; and (iii) covenanted to use its reasonable best efforts to maintain its REIT status for each of Drive Shack’s taxable years ending on or before December 31, 2014 (unless Drive Shack obtains an opinion from a nationally recognized tax counsel or a private letter ruling from the U.S. Internal Revenue Service (“IRS”) to the effect that Drive Shack’s failure to maintain its REIT status will not cause New Residential to fail to qualify as a REIT under the successor REIT rule referred to above). Additionally, New Residential covenanted to use its reasonable best efforts to qualify for taxation as a REIT for its taxable year ended December 31, 2013. |
TRANSACTIONS WITH AFFILIATES AN
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES | TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES New Residential is party to a Management Agreement with its Manager which provides for automatically renewing one -year terms subject to certain termination rights. The Manager’s performance is reviewed annually and the Management Agreement may be terminated by New Residential by payment of a termination fee, as defined in the Management Agreement, equal to the amount of management fees earned by the Manager during the twelve consecutive calendar months immediately preceding the termination, upon the affirmative vote of at least two-thirds of the independent directors, or by a majority vote of the holders of common stock. If the Management Agreement is terminated, the Manager may require New Residential to purchase from the Manager the right of the Manager to receive the Incentive Compensation. In exchange therefor, New Residential will be obligated to pay the Manager a cash purchase price equal to the amount of the Incentive Compensation that would be paid to the Manager if all of New Residential’s assets were sold for cash at their then current fair market value (taking into account, among other things, expected future performance of the underlying investments). Pursuant to the Management Agreement, the Manager, under the supervision of New Residential’s board of directors, formulates investment strategies, arranges for the acquisition of assets and associated financing, monitors the performance of New Residential’s assets and provides certain advisory, administrative and managerial services in connection with the operations of New Residential. Effective May 15, 2013, the Manager is entitled to receive a management fee in an amount equal to 1.5% per annum of New Residential’s gross equity calculated and payable monthly in arrears in cash. Gross equity is generally the equity transferred by Drive Shack on the date of the spin-off (Note 13), plus total net proceeds from stock offerings, plus certain capital contributions to subsidiaries, less capital distributions and repurchases of common stock. In addition, effective May 15, 2013, the Manager is entitled to receive annual incentive compensation in an amount equal to the product of (A) 25% of the dollar amount by which (1) (a) New Residential’s funds from operations before the incentive compensation, excluding funds from operations from investments in the Consumer Loan Companies and any unrealized gains or losses from mark-to-market valuation changes on investments and debt (and any deferred tax impact thereof), per share of common stock, plus (b) earnings (or losses) from the Consumer Loan Companies computed on a level-yield basis (such that the loans are treated as if they qualified as loans acquired with a discount for credit quality as set forth in ASC No. 310-30, as such codification was in effect on June 30, 2013) as if the Consumer Loan Companies had been acquired at their GAAP basis on May 15, 2013, plus earnings (or losses) from equity method investees invested in Excess MSRs as if such equity method investees had not made a fair value election, plus gains (or losses) from debt restructuring and gains (or losses) from sales of property, and plus non-routine items, minus amortization of non-routine items, in each case per share of common stock, exceed (2) an amount equal to (a) the weighted average of the book value per share of the equity transferred by Drive Shack on the date of the spin-off and the prices per share of New Residential’s common stock in any offerings (adjusted for prior capital dividends or capital distributions) multiplied by (b) a simple interest rate of 10% per annum, multiplied by (B) the weighted average number of shares of common stock outstanding. “Funds from operations” means net income (computed in accordance with GAAP), excluding gains (or losses) from debt restructuring and gains (or losses) from sales of property, plus depreciation on real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations will be computed on an unconsolidated basis. The computation of funds from operations may be adjusted at the direction of New Residential’s independent directors based on changes in, or certain applications of, GAAP. Funds from operations is determined from the date of the spin-off and without regard to Drive Shack’s prior performance. In addition to the management fee and incentive compensation, New Residential is responsible for reimbursing the Manager for certain expenses paid by the Manager on behalf of New Residential. Due to affiliates is comprised of the following amounts: December 31, 2016 2015 Management fees $ 3,689 $ 6,671 Incentive compensation 42,197 16,017 Expense reimbursements and other 1,462 1,097 Total $ 47,348 $ 23,785 Affiliate expenses and fees were comprised of: Year Ended December 31, 2016 2015 2014 Management fees $ 41,610 $ 33,475 $ 19,651 Incentive compensation 42,197 16,017 54,334 Expense reimbursements (A) 500 500 500 Total $ 84,307 $ 49,992 $ 74,485 (A) Included in General and Administrative Expenses in the Consolidated Statements of Income. New Residential’s board of directors approved a change in the computation of incentive compensation to exclude unrealized gains (or losses) on investments and debt (and any deferred tax impact thereof) as of June 30, 2014. The impact of this change on the six months ended June 30, 2014 was to reduce incentive compensation by $5.5 million . On May 7, 2015, New Residential entered into the Third Amended and Restated Management and Advisory Agreement with the Manager, which amends and restates the Second Amended and Restated Management and Advisory Agreement, dated as of August 5, 2014, in order to amortize certain non-capitalized transaction-related expenses over time in the computation of incentive compensation. The impact of this change on the six months ended June 30, 2015 was to increase incentive compensation by $3.3 million . See Notes 4, 6, 8, 11 and 14 for a discussion of transactions with Nationstar. As of December 31, 2016 , 63.6% and 33.6% of the UPB of the loans underlying New Residential’s investments in Excess MSRs and Servicer Advances, respectively, was serviced or master serviced by Nationstar. As of December 31, 2016 , a total face amount of $4.3 billion of New Residential’s Non-Agency RMBS portfolio and approximately $32.6 million of New Residential’s Agency RMBS portfolio was serviced or master serviced by Nationstar. The total UPB of the loans underlying these Nationstar serviced Non-Agency RMBS was approximately $14.8 billion as of December 31, 2016 . New Residential holds a limited right to cleanup call options with respect to certain securitization trusts serviced or master serviced by Nationstar whereby, when the outstanding balance of the underlying residential mortgage loans falls below a pre-determined threshold, it can effectively purchase the underlying residential mortgage loans at par, plus unreimbursed Servicer Advances, and repay all of the outstanding securitization financing at par, in exchange for a fee of 0.75% of UPB paid to Nationstar at the time of exercise. In connection with New Residential’s exercise of certain of these call rights, and certain other call rights acquired by New Residential in connection with the SLS Transaction, in 2014 and 2015, New Residential has made, and expects to continue to make, payments to funds managed by an affiliate of Fortress in respect of Excess MSRs held by the funds affected by the exercise of the call rights (“MSR Fund Payments”). During 2016 and 2015 , New Residential accrued for MSR Fund Payments in an aggregate amount of approximately $0.5 million and $4.4 million , respectively, and has also caused an aggregate of $0.1 million of securities to be transferred to such funds in 2016 . New Residential continues to evaluate the call rights it purchased from Nationstar, and its ability to exercise such rights and realize the benefits therefrom are subject to a number of risks. The actual UPB of the residential mortgage loans on which New Residential can successfully exercise call rights and realize the benefits therefrom may differ materially from its initial assumptions. As of December 31, 2016 , $591.1 million UPB of New Residential’s residential mortgage loans and $20.8 million of New Residential’s REO were being serviced or master serviced by Nationstar. Additionally, in the ordinary course of business, New Residential engages Nationstar to administer the termination of securitization trusts that it collapses pursuant to its call rights. As a result of these relationships, New Residential routinely has receivables from, and payables to, Nationstar, which are included in Other Assets and Accrued Expenses and Other Liabilities, respectively. See Note 9 for a discussion of a transaction with OneMain and Note 4 regarding co-investments with Fortress-managed funds. |
RECLASSIFICATION FROM ACCUMULAT
RECLASSIFICATION FROM ACCUMULATED OTHER COMPREHENSIVE INCOME INTO NET INCOME | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
RECLASSIFICATION FROM ACCUMULATED OTHER COMPREHENSIVE INCOME INTO NET INCOME | RECLASSIFICATION FROM ACCUMULATED OTHER COMPREHENSIVE INCOME INTO NET INCOME The following table summarizes the amounts reclassified out of accumulated other comprehensive income into net income: Accumulated Other Comprehensive Income Components Statement of Income Location Year Ended December 31, 2016 2015 2014 Reclassification of net realized (gain) loss on securities into earnings Gain (loss) on settlement of investments, net $ 27,460 $ (13,096 ) $ (65,701 ) Reclassification of net realized (gain) loss on securities into earnings Other-than-temporary impairment on securities 10,264 5,788 1,391 Total reclassifications $ 37,724 $ (7,308 ) $ (64,310 ) New Residential did not allocate any income tax expense or benefit to any component of other comprehensive income for any period presented as no taxable subsidiary generated other comprehensive income. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income tax expense (benefit) consists of the following: Year Ended December 31, 2016 2015 2014 Current: Federal $ 3,813 $ (2,737 ) $ 3,737 State and Local 252 (1,631 ) 2,799 Total Current Income Tax Expense (Benefit) 4,065 (4,368 ) 6,536 Deferred: Federal 33,999 (2,778 ) 12,853 State and Local 847 (3,855 ) 3,568 Total Deferred Income Tax Expense (Benefit) 34,846 (6,633 ) 16,421 Total Income Tax Expense (Benefit) $ 38,911 $ (11,001 ) $ 22,957 New Residential intends to qualify as a REIT for each of its tax years through December 31, 2016 . A REIT is generally not subject to U.S. federal corporate income tax on that portion of its income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements. New Residential distributed 100% of its 2013 through 2015 REIT taxable income by the prescribed dates. New Residential operates various securitization vehicles and has made certain investments, particularly its investments in MSRs (Note 5), Servicer Advances (Note 6) and REO (Note 8), through TRSs that are subject to regular corporate income taxes which have been provided for in the provision for income taxes, as applicable. New Residential and its subsidiaries file income tax returns with the U.S. federal government and various state and local jurisdictions beginning with the tax year ending December 31, 2013. Generally, these income tax returns will be subject to tax examinations by tax authorities for a period of three years after the date of filing. As of December 31, 2014, New Residential recorded an increase to the income tax provision of $2.3 million for unrecognized tax benefits. The reserve for unrecognized tax benefits related to state and local tax positions taken on the income tax returns. As a result of information received from local tax authorities, New Residential determined that the reserve for unrecognized tax benefits was no longer needed and reduced the reserve for unrecognized tax benefits to zero as of March 31, 2015. As a result, New Residential recorded a benefit of $2.3 million to the income tax provision as of March 31, 2015. The increase in the provision for income taxes for the year ended December 31, 2016 is primarily due to an increase in net income attributable to New Residential’s TRSs. The decrease in the provision for income taxes for the year ended December 31, 2015 is primarily due to the benefit of $2.3 million from reducing the reserve for unrecognized benefits to zero and a decrease in taxable profits in entities subject to corporate income tax rates. The difference between New Residential’s reported provision for income taxes and the U.S. federal statutory rate of 35% is as follows: December 31, 2016 2015 2014 Provision at the statutory rate 35.00 % 35.00 % 35.00 % Non-taxable REIT income (28.22 )% (36.51 )% (31.12 )% State and local taxes 0.18 % (1.16 )% 0.69 % Other 0.19 % (1.58 )% 0.37 % Total provision 7.15 % (4.25 )% 4.94 % The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liability are presented below: December 31, 2016 2015 Deferred tax assets: Servicer Advances basis difference (A) $ 113,354 $ 144,842 Net operating losses (B) 44,289 42,944 Deferred deductibility of interest expense 16,543 — Other 5,684 6,934 Total deferred tax assets 179,870 194,720 Less valuation allowance (10,054 ) (9,409 ) Net deferred tax assets $ 169,816 $ 185,311 Deferred tax liabilities: Unrealized mark to market (18,532 ) — Total deferred tax (liability) $ (18,532 ) $ — Net deferred tax assets (liability) $ 151,284 $ 185,311 (A) On April 6, 2015, as a part of the purchase price allocation related to the HLSS Acquisition (Note 1), New Residential recorded an increase to its deferred tax asset of $195.1 million . The deferred tax asset primarily relates to the difference in the book basis and tax basis of New Residential’s investment in Servicer Advances. New Residential believes that such deferred tax asset is more likely than not to be realized and, therefore, no valuation allowance has been recorded against such deferred tax asset as of December 31, 2016 . (B) As of December 31, 2016 , New Residential’s TRSs had approximately $112.0 million of net operating loss carryforwards for federal and state income tax purposes which may be available to offset future taxable income, if and when it arises. These federal and state net operating loss carryforwards will begin to expire in 2034. The utilization of the net operating loss carryforwards to reduce future income taxes will depend on the TRSs ability to generate sufficient taxable income prior to the expiration of the carryforward period. In assessing the realizability of deferred tax assets, New Residential considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. As of December 31, 2016 , New Residential recorded a partial valuation allowance related to certain net operating losses and loan loss reserves as it does not believe that it is more likely than not that the deferred tax assets will be realized. The following table summarizes the change in the deferred tax asset valuation allowance: Valuation allowance at December 31, 2014 $ 3,619 Increase related to net operating losses and loan loss reserves 6,680 Other increase (decrease) (890 ) Valuation allowance at December 31, 2015 9,409 Increase related to net operating losses and loan loss reserves 1,303 Other increase (decrease) (658 ) Valuation allowance at December 31, 2016 $ 10,054 New Residential records penalties and interest related to uncertain tax positions as a component of income tax expense, where applicable. As of December 31, 2016 , New Residential did not accrue interest or penalties related to uncertain tax positions. New Residential does not believe that it is reasonably possible that the total amount of unrecognized tax benefits will significantly change within 12 months of the reporting date. A reconciliation of the unrecognized tax benefits is as follows: Balance at December 31, 2014 $ 2,258 Additions for tax positions of the 2013 tax year — Other additions (reductions) (2,258 ) Balance at December 31, 2015 — Additions for tax positions of current year — Other additions (reductions) — Balance at December 31, 2016 $ — Common stock distributions were taxable as follows: Year Dividends per Share Ordinary Income Long-term Capital Gain Return of Capital 2016 (A) $ 1.38 96.13 % 3.87 % — 2015 1.75 92.92 % 7.08 % — 2014 1.58 84.78 % 15.22 % — (A) The entire $0.46 per share dividend declared in December 2016 and paid in January 2017 is treated as received by stockholders in 2017. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS These financial statements include a discussion of material events that have occurred subsequent to December 31, 2016 (referred to as “subsequent events”) through the issuance of these consolidated financial statements. Events subsequent to that date have not been considered in these financial statements. Corporate Activities On December 16, 2016 , New Residential’s board of directors declared a fourth quarter 2016 dividend of $0.46 per common share or $115.4 million , which was paid on January 31, 2017 to stockholders of record as of December 30, 2016 . On January 26, 2017, New Residential’s board of directors declared a first quarter 2017 dividend of $0.48 per common share, which is payable on April 28, 2017 to stockholders of record as of March 27, 2017. On January 27, 2017, NRM entered into an agreement to purchase MSRs and related Servicer Advances with respect to approximately $97.0 billion UPB of seasoned Fannie Mae and Freddie Mac residential mortgage loans from CitiMortgage, Inc. (“Citi”), subject to change during the period prior to GSE and other regulatory approvals. NRM also entered into an agreement pursuant to which Nationstar will subservice the portfolio on behalf of NRM, subject to GSE and other regulatory approvals. Citi has agreed to continue to subservice the portfolio on an interim basis. NRM will acquire the related Servicer Advances upon the transfer of servicing. New Residential expects to complete this acquisition in the first quarter of 2017, subject to GSE and other regulatory approvals and other customary closing conditions. In February 2017, New Residential issued 56.5 million shares of its common stock in a public offering at a price to the public of $15.00 per share for net proceeds of approximately $834.6 million . One of New Residential’s executive officers participated in this offering and purchased 18,600 shares at the public offering price. To compensate the Manager for its successful efforts in raising capital for New Residential, in connection with this offering, New Residential granted options to the Manager relating to 5.7 million shares of New Residential’s common stock at the public offering price, which had a fair value of approximately $8.1 million as of the grant date. The assumptions used in valuing the options were: a 2.38% risk-free rate, a 10.82% dividend yield, 28.64% volatility and a 10 -year term. On February 17, 2017, NRM entered into an agreement to obtain up to $300.0 million in financing secured by Agency MSRs. The financing facility has not been drawn upon and will bear interest equal to one-month LIBOR plus a spread of 4.25% . Servicer Advances Debt In February 2017, New Residential, through its wholly owned subsidiary, NRZ Advance Receivables Trust 2015-ON1, issued servicer advance backed notes consisting of $400.0 million of series 2017-T1 term notes with a maturity date of February 2021, and repaid a portion of the existing VFN facilities with the proceeds. |
SUMMARY OF QUARTERLY CONSOLIDAT
SUMMARY OF QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
SUMMARY OF QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) | SUMMARY QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) The following is an unaudited summary information on New Residential’s quarterly operations. 2016 Quarter Ended Year Ended December 31 March 31 June 30 September 30 December 31 (B) Interest income $ 190,036 $ 277,477 $ 282,388 $ 326,834 $ 1,076,735 Interest expense 81,228 100,685 96,488 95,023 373,424 Net interest income 108,808 176,792 185,900 231,811 703,311 Impairment Other-than-temporary impairment (OTTI) on securities 3,254 2,819 1,765 2,426 10,264 Valuation provision (reversal) on loans and real estate owned 6,745 16,825 18,275 35,871 77,716 9,999 19,644 20,040 38,297 87,980 Net interest income after impairment 98,809 157,148 165,860 193,514 615,331 Servicing revenue, net — — — 118,169 118,169 Other income (A) 31,922 (19,723 ) 26,701 23,437 62,337 Operating Expenses 25,016 36,280 40,575 72,339 174,210 Income Before Income Taxes 105,715 101,145 151,986 262,781 621,627 Income tax expense (benefit) (10,223 ) 7,518 20,900 20,716 38,911 Net Income $ 115,938 $ 93,627 $ 131,086 $ 242,065 $ 582,716 Noncontrolling Interests in Income (Loss) of Consolidated Subsidiaries $ 4,202 $ 24,975 $ 32,178 $ 16,908 $ 78,263 Net Income Attributable to Common Stockholders $ 111,736 $ 68,652 $ 98,908 $ 225,157 $ 504,453 Net Income Per Share of Common Stock Basic $ 0.48 $ 0.30 $ 0.41 $ 0.90 $ 2.12 Diluted $ 0.48 $ 0.30 $ 0.41 $ 0.90 $ 2.12 Weighted Average Number of Shares of Common Stock Outstanding Basic 230,471,202 230,478,390 240,601,691 250,773,117 238,122,665 Diluted 230,538,712 230,839,753 241,099,381 251,299,730 238,486,772 Dividends Declared per Share of Common Stock $ 0.46 $ 0.46 $ 0.46 $ 0.46 $ 1.84 2015 Quarter Ended Year Ended December 31 March 31 June 30 September 30 December 31 Interest income $ 84,373 $ 178,177 $ 182,341 $ 200,181 $ 645,072 Interest expense 33,979 81,871 77,558 80,605 274,013 Net interest income 50,394 96,306 104,783 119,576 371,059 Impairment Other-than-temporary impairment (OTTI) on securities 1,071 649 1,574 2,494 5,788 Valuation provision (reversal) on loans and real estate owned 977 4,772 (3,341 ) 16,188 18,596 2,048 5,421 (1,767 ) 18,682 24,384 Net interest income after impairment 48,346 90,885 106,550 100,894 346,675 Other income (A) 12,295 37,650 (17,825 ) 9,909 42,029 Operating Expenses 22,270 34,952 32,902 27,699 117,823 Income Before Income Taxes 38,371 93,583 55,823 83,104 270,881 Income tax expense (benefit) (3,427 ) 14,306 (5,932 ) (15,948 ) (11,001 ) Net Income $ 41,798 $ 79,277 $ 61,755 $ 99,052 $ 281,882 Noncontrolling Interests in Income (Loss) of Consolidated Subsidiaries $ 5,823 $ 4,158 $ 7,193 $ (3,928 ) $ 13,246 Net Income Attributable to Common Stockholders $ 35,975 $ 75,119 $ 54,562 $ 102,980 $ 268,636 Net Income Per Share of Common Stock Basic $ 0.25 $ 0.37 $ 0.24 $ 0.45 $ 1.34 Diluted $ 0.25 $ 0.37 $ 0.24 $ 0.45 $ 1.32 Weighted Average Number of Shares of Common Stock Outstanding Basic 141,434,905 200,910,040 230,455,568 230,459,000 200,739,809 Diluted 144,911,309 205,169,099 231,215,235 230,698,961 202,907,605 Dividends Declared per Share of Common Stock $ 0.38 $ 0.45 $ 0.46 $ 0.46 $ 1.75 (A) Earnings from investments in equity method investees is included in other income. (B) New Residential completed significant transactions in the fourth quarter of 2016 , as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Accounting | The accompanying consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP’’). The consolidated financial statements include the accounts of New Residential and its consolidated subsidiaries. All significant intercompany transactions and balances have been eliminated. |
Consolidation, Variable Interest Entities | New Residential consolidates those entities in which it has control over significant operating, financial and investing decisions of the entity, as well as those entities deemed to be variable interest entities (“VIEs”) in which New Residential is determined to be the primary beneficiary. For entities over which New Residential exercises significant influence, but which do not meet the requirements for consolidation, New Residential uses the equity method of accounting whereby it records its share of the underlying income of such entities. Distributions from equity method investees are classified in the Statements of Cash Flows based on the cumulative earnings approach, where all distributions up to cumulative earnings are classified as distributions of earnings. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. A VIE is required to be consolidated only by its primary beneficiary, which is defined as the party who has the power to direct the activities of a VIE that most significantly impact its economic performance and who has the obligation to absorb losses or the right to receive benefits from the VIE that could be potentially significant to the VIE. To assess whether New Residential has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, New Residential considers all the facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. This assessment includes, first, identifying the activities that most significantly impact the VIE’s economic performance; and second, identifying which party, if any, has power over those activities. To assess whether New Residential has the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE, New Residential considers all of its economic interests and applies judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. New Residential has determined that the Buyer (Note 6) should be evaluated for consolidation under the VIE model rather than the voting interest entity model as the equity holders as a group do not have the right to direct activities that most significantly impact the entity’s economic performance. Under the VIE model, New Residential’s consolidated subsidiary, as the managing member, has both 1) the power to direct the activities of the Buyer and 2) a significant variable interest through its equity investment and, therefore, meets the primary beneficiary criterion and continues to consolidate the Buyer. The Buyer’s summary balance sheet is included in Note 6. New Residential has determined that the Consumer Loan SPVs (Note 9) should be evaluated for consolidation under the VIE model rather than the voting interest entity model as the equity holders, individually and as a group, lack the characteristics of a controlling financial interest. Under the VIE model, New Residential’s consolidated subsidiaries, the Consumer Loan Companies (Note 9), have both 1) the power to direct the most significant activities of the Consumer Loan SPVs and 2) significant variable interests in each of the Consumer Loan SPVs, through their control of the related optional redemption feature and their ownership of certain notes issued by the Consumer Loan SPVs and, therefore, meet the primary beneficiary criterion and consolidate the Consumer Loan SPVs. The Consumer Loan SPVs’ summary balance sheet is included in Note 9. New Residential’s investments in Non-Agency RMBS (Note 7) are variable interests. New Residential monitors these investments and analyzes the potential need to consolidate the related securitization entities pursuant to the VIE consolidation requirements. New Residential has not consolidated the securitization entities that issued its Non-Agency RMBS. This determination is based, in part, on New Residential’s assessment that it does not have the power to direct the activities that most significantly impact the economic performance of these entities, such as through ownership of a majority of the currently controlling class. In addition, New Residential is not obligated to provide, and has not provided, any financial support to these entities. Noncontrolling interests represent the ownership interests in certain consolidated subsidiaries held by entities or persons other than New Residential. These interests are related to noncontrolling interests in consolidated entities that hold New Residential’s investment in Servicer Advances (Note 6) and consumer loans (Note 9), as well as HLSS (Note 1) for the period of April 6, 2015 through October 23, 2015. |
Risks and Uncertainties | In the normal course of business, New Residential encounters primarily two significant types of economic risk: credit and market. Credit risk is the risk of default on New Residential’s investments that results from a borrower’s or counterparty’s inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of investments due to changes in prepayment rates, interest rates, spreads or other market factors, including risks that impact the value of the collateral underlying New Residential’s investments. New Residential believes that the carrying values of its investments are reasonable taking into consideration these risks along with estimated prepayments, financings, collateral values, payment histories, and other information. Furthermore, for each of the periods presented, a significant portion of New Residential’s assets are dependent on its servicers’ and subservicers’ ability to perform their obligations servicing the residential mortgage loans underlying New Residential’s investments in Excess MSRs, MSRs, Servicer Advances, Non-Agency RMBS and residential mortgage loans. If a servicer is terminated, New Residential’s right to receive its portion of the cash flows related to interests in MSRs may also be terminated. |
Income Tax Uncertainties | Additionally, New Residential is subject to significant tax risks. If New Residential were to fail to qualify as a REIT in any taxable year, New Residential would be subject to U.S. federal corporate income tax (including any applicable alternative minimum tax), which could be material. Unless entitled to relief under certain statutory provisions, New Residential would also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification is lost. |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Comprehensive Income | Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances, excluding those resulting from investments by and distributions to owners. For New Residential’s purposes, comprehensive income represents net income, as presented in the Consolidated Statements of Income, adjusted for unrealized gains or losses on securities available for sale. |
Income Recognition - Investments in Excess Mortgage Servicing Rights (''Excess MSRs'') | Excess MSRs are aggregated into pools as applicable; each pool of Excess MSRs is accounted for in the aggregate. Interest income for Excess MSRs is accreted into interest income on an effective yield or “interest” method, based upon the expected excess mortgage servicing amount through the expected life of the underlying mortgages. Changes to expected cash flows result in a cumulative retrospective adjustment, which will be recorded in the period in which the change in expected cash flows occurs. Under the retrospective method, the interest income recognized for a reporting period is measured as the difference between the amortized cost basis at the end of the period and the amortized cost basis at the beginning of the period, plus any cash received during the period. The amortized cost basis is calculated as the present value of estimated future cash flows using an effective yield, which is the yield that equates all past actual and current estimated future cash flows to the initial investment. In addition, New Residential’s policy is to recognize interest income only on its Excess MSRs in existing eligible underlying mortgages. The difference between the fair value of Excess MSRs and their amortized cost basis is recorded as “Change in fair value of investments in excess mortgage servicing rights.” Fair value is generally determined by discounting the expected future cash flows using discount rates that incorporate the market risks and liquidity premium specific to the Excess MSRs, and therefore may differ from their effective yields. |
Income Recognition - Investments in MSRs | MSRs are aggregated into pools as applicable; each pool of MSRs is accounted for in the aggregate. Income from MSRs is recorded in “Servicing revenue, net” and is comprised of three components: (i) income receivable from the MSRs, less (ii) amortization of the basis of the MSRs, plus or minus (iii) the mark-to-market on the MSRs. Amortization of the basis of the MSRs is based on the remaining UPB of the residential mortgage loans underlying the MSRs relative to their UPB at acquisition. Fair value is generally determined by discounting the expected future cash flows using discount rates that incorporate the market risks and liquidity premium specific to the MSRs. |
Income Recognition - Investments in Servicer Advances (''Servicer Advances'') | New Residential accounts for its investments in Servicer Advances similarly to its investments in Excess MSRs. Interest income for Servicer Advances is accreted into interest income on an effective yield or “interest” method, based upon the expected aggregate cash flows of the Servicer Advances, including the basic fee component of the related MSR (but excluding any Excess MSR component) through the expected life of the underlying mortgages, net of a portion of the basic fee component of the MSR that New Residential remits to the servicer as compensation for the servicer’s servicing activities. Changes to expected cash flows result in a cumulative retrospective adjustment, which will be recorded in the period in which the change in expected cash flows occurs. Refer to “—Investments in Excess Mortgage Servicing Rights” for a description of the retrospective method. Fair value is generally determined by discounting the expected future cash flows using discount rates that incorporate the market risks and liquidity premium specific to the Servicer Advances, and therefore may differ from their effective yields. |
Income Recognition - Investments in Real Estate Securities | Discounts or premiums are accreted into interest income on an effective yield or “interest” method, based upon a comparison of actual and expected cash flows, through the expected maturity date of the security. For securities acquired at a discount for credit quality (i.e. where it is probable at acquisition that New Residential will not collect all contractually required interest and principal repayments), the difference between contractual cash flows and expected cash flows at acquisition is not accreted (non-accretable difference). For these securities, the excess of expected cash flows over the carrying value (accretable yield) is recognized as interest income on an effective yield basis. Depending on the nature of the investment, changes to expected cash flows may result in a prospective change to yield or a retrospective change which would include a catch up adjustment. Deferred fees and costs, if any, are recognized as a reduction to the interest income over the terms of the securities using the interest method. Upon settlement of securities, the specific identification method is used to determine the excess (or deficiency) of net proceeds over the net carrying value of such security recognized as a realized gain (or loss) in the period of settlement. |
Income Recognition - Investments in Residential Mortgage Loans, REO and Consumer Loans | New Residential evaluates the credit quality of its loans, as of the acquisition date, for evidence of credit quality deterioration. Loans with evidence of credit deterioration since their origination, and where it is probable that New Residential will not collect all contractually required principal and interest payments, are Purchased Credit Deteriorated (“PCD”) loans. At acquisition, New Residential aggregates PCD loans into pools based on common risk characteristics and the aggregated loans are accounted for as if each pool were a single loan with a single composite interest rate and an aggregate expectation of cash flows. The excess of the total cash flows (both principal and interest) expected to be collected over the carrying value of the PCD loans is referred to as the accretable yield. This amount is not reported on New Residential’s Consolidated Balance Sheets but is accreted into interest income at a level rate of return over the remaining estimated life of the pool of loans. Loans where New Residential expects to collect all contractually required principal and interest payments are considered performing loans. Interest income on performing loans is accrued and recognized as interest income at their effective yield, which includes contractual interest and the amortization of purchase price discount or premium and deferred fees or expenses. Loans acquired with the intent to sell and loans not acquired with the intent to sell that New Residential decides to sell are classified as held-for-sale. Loans held-for-sale are measured at the lower of cost or fair value, with valuation changes recorded in impairment. Purchase price discounts or premiums are deferred in a contra loan account until the related loan is sold. The deferred discounts or premiums are an adjustment to the basis of the loan and are included in the quarterly determination of the lower of cost or fair value adjustments and/or the gain or loss recognized at the time of sale. Real estate owned (“REO”) assets are those individual properties acquired by New Residential or where New Residential receives the property in satisfaction of a debt (e.g., by taking legal title or physical possession). New Residential measures REO assets at the lower of cost or fair value, with valuation changes recorded in other income or impairment, as applicable. |
Impairment of Securities and Loans | Impairment of Securities — Securities are considered to be impaired when it is probable that New Residential will be unable to collect all principal or interest when due according to the contractual terms of the original agreements, or for securities purchased at a discount for credit quality or that represent retained beneficial interests in securitizations, when New Residential determines that it is probable that it will be unable to collect as anticipated. The evaluation of a security’s estimated cash flows includes the following, as applicable: (i) review of the credit of the issuer or borrower, (ii) review of the credit rating of the security, (iii) review of the key terms of the security or underlying loans, (iv) review of the performance of the underlying loans, including debt service coverage and loan to value ratios, (v) analysis of the value of the underlying loans, (vi) analysis of the effect of local, industry and broader economic factors, and (vii) analysis of historical and anticipated trends in defaults, loss severities and prepayments for similar securities or underlying loans. New Residential must record a write down if it has the intent to sell a given security in an unrealized loss position, or if it is more likely than not that it will be required to sell such a security. Upon determination of impairment, New Residential records a direct write down for securities based on the estimated fair value of the security or underlying collateral using a discounted cash flow analysis or based on an observable market value. Subsequent to a determination of impairment, and a related write down, income on securities is accrued on an effective yield method from the new carrying value to the related expected cash flows, with cash received treated as a reduction of basis. Impairment of Loans — To the extent that they are classified as held-for-investment, New Residential must periodically evaluate each of these loans or loan pools for possible impairment. Impairment is indicated when it is deemed probable that New Residential will be unable to collect all amounts due according to the contractual terms of the loan, or for PCD loans, when it is deemed probable that New Residential will be unable to collect as anticipated. Upon determination of impairment, New Residential establishes an allowance for loan losses with a corresponding charge to earnings. Performing loans are aggregated into pools for the evaluation of impairment based on like characteristics, such as loan type and acquisition date. Pools of loans are evaluated based on criteria such as an analysis of borrower performance, credit ratings of borrowers, loan to value ratios, the estimated value of the underlying collateral, if any, the key terms of the loans and historical and anticipated trends in defaults and loss severities for the type and seasoning of loans being evaluated. This information is used to estimate provisions for estimated unidentified incurred losses on pools of loans. Significant judgment is required in determining impairment and in estimating the resulting loss allowance. For PCD loans, New Residential estimates the total cash flows expected to be collected over the remaining life of each pool. Probable decreases in expected cash flows trigger the recognition of impairment. Impairments are recognized through the provision for loans and an increase in the allowance for loan losses. Probable and significant increases in expected cash flows would first reverse any previously recorded allowance for loan losses with any remaining increases recognized prospectively as a yield adjustment over the remaining estimated lives of the underlying loans. A loan is determined to be past due when a monthly payment is due and unpaid for 30 days or more. Loans, other than PCD loans, are placed on nonaccrual status and considered non-performing when full payment of principal and interest is in doubt, which generally occurs when principal or interest is 120 days or more past due unless the loan is both well secured and in the process of collection. A loan may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the terms of the restructured loan. New Residential’s ability to recognize interest income on nonaccrual loans as cash interest payments are received rather than as a reduction of the carrying value of the loans is based on the recorded loan balance being deemed fully collectible. Loans held-for-sale are subject to the nonaccrual policy described above, however, as loans held-for-sale are recognized at the lower of cost or fair value, New Residential’s allowance for loan losses and charge-off policies do not apply to these loans. |
Expense Recognition - Interest Expense | New Residential finances certain investments using floating rate repurchase agreements and loans. Interest is expensed as incurred. |
Expense Recognition - General and Administrative Expenses, Loan Servicing Expense and Subservicing Expense | General and administrative expenses, including legal fees, audit fees, insurance premiums, and other costs, as well as loan servicing and subservicing expenses, and are expensed as incurred. |
Expense Recognition - Management and Incentive Compensation to Affiliate | These represent amounts due to the Manager pursuant to the Management Agreement. |
Balance Sheet Measurement - Investments in Servicing Related Assets | Servicing related assets consist of New Residential’s investments in Excess MSRs, MSRs and Servicer Advances. Upon acquisition, New Residential has elected to record each of such investments at fair value. New Residential elected to record its investments at fair value in order to provide users of the financial statements with better information regarding the effects of prepayment risk and other market factors on servicing related assets. Under this election, New Residential records a valuation adjustment on its investments in servicing related assets on a quarterly basis to recognize the changes in fair value in net income as described in “Income Recognition — Investments in Excess Mortgage Servicing Rights,” “Income Recognition — Investments in MSRs” and “Income Recognition — Investments in Servicer Advances.” |
Balance Sheet Measurement - Investments in Real Estate Securities, Residential Mortgage Loans and Consumer Loans | Investments in Real Estate Securities — New Residential has classified its investments in real estate securities as available for sale. Securities available for sale are carried at market value with the net unrealized gains or losses reported as a separate component of accumulated other comprehensive income, to the extent impairment losses are considered temporary. At disposition, the net realized gain or loss is determined on the basis of the amortized cost of the specific investments and is included in earnings. Unrealized losses on securities are charged to earnings if they reflect a decline in value that is other-than-temporary. Investments in Residential Mortgage Loans and Consumer Loans — Loans for which New Residential has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified as held-for-investment. Performing loans held-for-investment are presented at the aggregate unpaid principal balance adjusted for any unamortized premium or discount, deferred fees or expenses, an allowance for loan losses, charge-offs and write-down for impaired loans. PCD loans held-for-investment are initially recorded at their purchase price at acquisition and are subsequently measured net of any allowance for loan losses. To the extent that the loans are classified as held-for-investment, New Residential periodically evaluates such loans for possible impairment as described in “—Impairment of Loans.” Loans which New Residential does not have the intent or the ability to hold into the foreseeable future are considered held-for-sale and are carried at the lower of their amortized cost basis or fair value. New Residential discontinues the accretion of discounts or amortization of premiums on loans if they are reclassified from held-for-investment to held-for-sale. |
Balance Sheet Measurement - Cash and Cash Equivalents and Restricted Cash | New Residential considers all highly liquid short-term investments with maturities of 90 days or less when purchased to be cash equivalents. Substantially all amounts on deposit with major financial institutions exceed insured limits. |
Balance Sheet Measurement - Derivatives | New Residential financed certain investments with the same counterparty from which it purchased those investments, and accounted for the contemporaneous purchase of the investments and the associated financings as “linked transactions” prior to January 1, 2015. Accordingly, New Residential recorded a non-hedge derivative instrument on a net basis, with changes in market value recorded as “—Other Income” in the Consolidated Statements of Income. In the Consolidated Statement of Cash Flows, New Residential presented the linked transactions on a gross basis with the related asset purchased reflected as an investment activity and the related financing as a financing activity. New Residential also entered into various economic hedges, as further described in Note 10, that are marked to fair value on a periodic basis through “—Other Income.” |
Balance Sheet Measurement - Income Taxes | New Residential operates so as to qualify as a REIT under the requirements of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code. Requirements for qualification as a REIT include various restrictions on ownership of New Residential’s stock, requirements concerning distribution of taxable income and certain restrictions on the nature of assets and sources of income. A REIT must distribute at least 90% of its taxable income to its stockholders (subject to certain adjustments). Distributions may extend until timely filing of New Residential’s tax return in the subsequent taxable year. Qualifying distributions of taxable income are deductible by a REIT in computing taxable income. Certain activities of New Residential are conducted through taxable REIT subsidiaries (“TRSs”) and therefore are subject to federal and state income taxes. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases upon the change in tax status. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. New Residential recognizes tax benefits for uncertain tax positions only if it is more likely than not that the position is sustainable based on its technical merits. Interest and penalties on uncertain tax positions are included as a component of the provision for income taxes on the consolidated statements of operations. |
Balance Sheet Measurement - Repurchase Agreements and Notes Payable | New Residential’s repurchase agreements are generally short-term debt that expire within one year . Such agreements and notes and bonds payable are carried at their contractual amounts, as specified by each repurchase or financing agreement, and generally treated as collateralized financing transactions. |
Recent Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenues from Contracts with Customers (Topic 606) . The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In effect, companies will be required to exercise further judgment and make more estimates prospectively. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU No. 2014-09 is effective for New Residential in the first quarter of 2018. Early adoption is only permitted after December 31, 2016. Entities have the option of using either a full retrospective or a modified approach to adopt the guidance in ASU No. 2014-09. New Residential has evaluated the new guidance and determined that interest income, gains and losses on financial instruments and income from servicing residential mortgage loans are outside the scope of ASC No. 606. For income from servicing residential mortgage loans, New Residential considered that the FASB Transition Resource Group members generally agreed that an entity should look to ASC No. 860, Transfers and Servicing, to determine the appropriate accounting for these fees and ASC No. 606 contains a scope exception for contracts that fall under ASC No. 860. As a result, New Residential does not expect the adoption of ASU No. 2014-09 to have a material impact on its consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures . The standard changed the accounting for repurchase-to-maturity transactions and linked repurchase financing transactions to secured borrowing accounting. ASU No. 2014-11 also expanded disclosure requirements related to certain transfers of financial assets that are accounted for as sales and certain transfers accounted for as secured borrowings. ASU No. 2014-11 was effective for New Residential in the first quarter of 2015. Disclosures are not required for comparative periods presented before the effective date. New Residential determined that, as of January 1, 2015, its linked transactions (Note 10) are accounted for as secured borrowings. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern . The standard provides guidance on management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern by requiring management to assess an entity’s ability to continue as a going concern by incorporating and expanding on certain principles that are currently in U.S. auditing standards. ASU No. 2014-15 is effective for New Residential for the annual period ending on December 31, 2016. New Residential has determined that there is not substantial doubt regarding its ability to continue as a going concern as of December 31, 2016. In August 2014, the FASB issued ASU No. 2014-14, Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40): Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure (a consensus of the FASB Emerging Issues Task Force). The standard provided guidance on how to classify and measure certain government-guaranteed mortgage loans upon foreclosure. A mortgage loan is to be derecognized and a separate other receivable is to be recognized upon foreclosure in the amount of the loan balance (principal and interest) expected to be recovered from the guarantor if (1) the loan has a government guarantee that is not separable from the loan before foreclosure, (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, and 3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. The ASU was effective in the first quarter of 2015 and early adoption was permitted. New Residential adopted ASU No. 2014-14 as of September 30, 2014, as it relates to the reverse mortgage portfolio. This portfolio is comprised primarily of U.S. Department of Housing and Urban Development (“HUD”)-guaranteed reverse mortgage loans. Upon foreclosure of a reverse mortgage loan, New Residential receives the real estate property in satisfaction of the loan and intends to dispose of the property for the best possible economic value. To the extent the liquidation proceeds are less than the unpaid principal balance (UPB) of the loan, New Residential submits a claim to HUD for the lesser of the remaining UPB or the pre-determined HUD claim amount. New Residential’s exposure to market risk while the foreclosed property is in its possession is limited to the extent the HUD claim amount is unlikely to cover any shortfall in property disposal proceeds. After the adoption of ASU No. 2014-14, upon foreclosure of a guaranteed reverse mortgage loan, New Residential records a “receivable from government agency” for the expected liquidation proceeds, comprised of both the property disposal proceeds and the maximum HUD claim amount. New Residential used the modified retrospective transition method of adoption, that resulted in no cumulative-effect adjustment as of the beginning of the current fiscal year. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis . The standard amends the consolidation considerations when evaluating certain limited partnerships, variable interest entities and investment funds. ASU No. 2015-02 was effective for New Residential in the first quarter of 2016. Early adoption was permitted. New Residential adopted this new guidance in the fourth quarter of 2015 and it did not have an impact on its consolidated financial statements, other than the addition of certain disclosures. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest . The standard amends the balance sheet presentation requirements for debt issuance costs such that they are no longer recognized as deferred charges but are rather presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. ASU No. 2015-03 is effective for New Residential in the first quarter of 2016. Early adoption is permitted. New Residential adopted ASU No. 2015-03 in June 2015 and has determined that the adoption of ASU No. 2015-03 resulted in an immaterial reclassification of its Deferred Financing Costs, Net to an offset of its Notes and Bonds Payable (Note 11). In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805) - Simplifying the Accounting for Measurement-Period Adjustments . The standard requires that an acquirer in a business combination recognize adjustments to provisional amounts in the purchase price allocation that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU No. 2015-16 was effective for New Residential in the first quarter of 2016. Early adoption was permitted. New Residential adopted this new guidance in the fourth quarter of 2015 and applied it prospectively. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10) - Recognition and Measurement of Financial Assets and Financial Liabilities. The standard: (i) requires that certain equity investments be measured at fair value, and modifies the assessment of impairment for certain other equity investments, (ii) changes certain disclosure requirements related to the fair value of financial instruments measured at amortized cost, (iii) changes certain disclosure requirements related to liabilities measured at fair value, (iv) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and (v) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. ASU No. 2016-01 is effective for New Residential in the first quarter of 2018. Early adoption is generally not permitted. An entity should apply ASU No. 2016-01 by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. New Residential does not expect the adoption of ASU No. 2016-01 to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments . The standard requires that a financial asset measured at amortized cost basis be presented at the net amount expected to be collected, net of an allowance for all expected (rather than incurred) credit losses. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. The standard also changes the accounting for purchased credit deteriorated assets and available-for-sale securities, which will require the recognition of credit losses through a valuation allowance when fair value is less than amortized cost, regardless of whether the impairment is considered to be other-than-temporary. ASU No. 2016-13 is effective for New Residential in the first quarter of 2020. Early adoption is permitted beginning in 2019. An entity should apply ASU No. 2016-13 by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. New Residential is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements, which at the date of adoption is expected to increase the allowance for credit losses with a resulting negative adjustment to retained earnings. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments. The standard provides guidance on the treatment of certain transactions within the statement of cash flows. ASU No. 2016-15 is effective for New Residential in the first quarter of 2018. Early adoption is permitted. New Residential adopted ASU No. 2016-15 in the third quarter of 2016 and it did not have an impact on its consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory . The standard requires recognition of the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU No. 2016-16 is effective for New Residential in the first quarter of 2018. Early adoption is permitted as of the beginning of an annual reporting period for which financial statements have not been issued. New Residential does not expect the adoption of ASU No. 2016-16 to have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) - Restricted Cash . The standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash. ASU No. 2016-18 is effective for New Residential in the first quarter of 2018. Early adoption is permitted. New Residential adopted ASU No. 2016-18 in the fourth quarter of 2016 and has included changes in restricted cash in its statements of cash flows for all periods presented. |
ORGANIZATION (Tables)
ORGANIZATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Total Consideration | The total consideration is summarized as follows: Total Consideration Amount Share Issuance Consideration 28,286,980 New Residential's 4/6/2015 share price $ 15.3460 Dollar Value of Share Issuance (A) $ 434,092 Cash Consideration 621,982 HLSS Seller Financing (B) 385,174 HLSS New Merger Payment (71,016,771 $0.704059) (C) 50,000 Total Consideration $ 1,491,248 (A) Share Issuance Consideration The share issuance consideration consists of 28.3 million newly issued shares of New Residential common stock with a par value $0.01 per share. The fair value of the common stock at the date of the acquisition was $15.3460 per share, which was New Residential’s volume weighted average share price on April 6, 2015. (B) HLSS Seller Financing New Residential agreed to deliver $1.0 billion of cash purchase price, including a promise to pay an amount of $385.2 million immediately after closing from the proceeds of financing that was committed in anticipation of the HLSS Acquisition and is collateralized by certain of the HLSS assets acquired. (C) HLSS New Merger Payment The HLSS New Merger Agreement, and the $50.0 million consideration related thereto, is included as a part of the business combination in conjunction with the HLSS Acquisition Agreement. The range of outcomes for this contingent consideration was from $0.0 million to $50.0 million , dependent on whether the HLSS New Merger was approved by HLSS shareholders and other factors. As of the HLSS New Merger Effective Time, the net contingent consideration paid was fixed at $5.1 million . |
Summary of Preliminary Allocation of Total Consideration | New Residential has performed an allocation of the purchase price to HLSS’s assets and liabilities, as set forth below. Total Consideration ($ in millions) $ 1,491.2 Assets Cash and cash equivalents $ 51.4 Servicer advances, at fair value 5,096.7 Excess mortgage servicing rights, at fair value 917.1 Residential mortgage loans, held-for-sale (A) 416.8 Deferred tax asset (B) 195.1 Investment in HLSS Ltd. 44.9 Other assets (C) 402.4 Total Assets Acquired $ 7,124.4 Liabilities Notes and bonds payable 5,580.3 Accrued expenses and other liabilities (D)(E) 52.9 Total Liabilities Assumed $ 5,633.2 Net Assets $ 1,491.2 (A) Represents $424.3 million unpaid principal balance (“UPB”) of Government National Mortgage Association (“Ginnie Mae”) early buy-out (“EBO”) residential mortgage loans not subject to Accounting Standards Codification (“ASC”) No. 310-30 as the contractual cash flows are guaranteed by the Federal Housing Administration (“FHA”). (B) Due primarily to the difference between carryover historical tax basis and acquisition date fair value of one of HLSS’s first tier subsidiaries. (C) Includes restricted cash and receivables not subject to ASC No. 310-30 which New Residential has deemed fully collectible. (D) Includes liabilities which arose from contingencies regarding HLSS matters. (E) Contingencies for HLSS class action law suits had not been recognized at the acquisition date as the criteria in ASC No. 450 had not been met (Note 14). New Residential has performed an allocation of the purchase price to the Consumer Loan Companies’ assets and liabilities, as set forth below. Total Consideration ($ in millions) $ 237.5 Assets Consumer loans, held-for-investment $ 1,934.7 Cash and cash equivalents 0.3 Restricted cash 74.6 Other assets 35.9 Total Assets Acquired 2,045.5 Liabilities Notes and bonds payable $ 1,803.2 Accrued expenses and other liabilities 4.8 Total Liabilities Assumed 1,808.0 Net Assets $ 237.5 |
Summary of Unaudited Pro Forma Combined Interest Income and Income Before Income Taxes | Unaudited Supplemental Pro Forma Financial Information - The following table presents unaudited pro forma combined Interest Income and Income Before Income Taxes for the years ended December 31, 2015 and 2014 prepared as if the HLSS Acquisition had been consummated on January 1, 2014. Year Ended December 31, 2015 2014 (unaudited) (unaudited) Pro Forma Interest Income $ 731,660 $ 744,363 Income Before Income Taxes 322,365 647,058 The following table presents unaudited pro forma combined Interest Income and Income Before Income Taxes for the years ended December 31, 2016 and 2015 prepared as if the SpringCastle Transaction had been consummated on January 1, 2015. Year Ended December 31, 2016 2015 (unaudited) (unaudited) Pro Forma Interest Income $ 1,163,648 $ 1,030,522 Income Before Income Taxes 581,925 466,915 Noncontrolling Interests in Income of Consolidated Subsidiaries 96,852 92,413 |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Accretion and Other Amortization | Accretion and Other Amortization — As reflected on the consolidated statements of cash flows, this item is comprised of the following: Year Ended December 31, 2016 2015 2014 Accretion of servicer advance interest income $ 364,350 $ 352,316 $ 190,206 Accretion of excess mortgage servicing rights income 150,141 134,565 49,180 Accretion of net discount on securities and loans (A) 253,243 65,925 47,793 Amortization of deferred financing costs (18,326 ) (26,036 ) (8,771 ) Amortization of discount on notes and bonds payable (1,476 ) (1,472 ) — $ 747,932 $ 525,298 $ 278,408 (A) Includes accretion of the accretable yield on PCD loans. |
Schedule of Other Income (Loss), Net | Other Income (Loss), Net — This item is comprised of the following: Year Ended December 31, 2016 2015 2014 Unrealized gain (loss) on derivative instruments $ 5,774 $ (3,538 ) $ (8,847 ) Unrealized gain (loss) on other ABS (2,322 ) 879 — Gain (loss) on transfer of loans to REO 18,356 2,065 17,489 Gain (loss) on transfer of loans to other assets 2,938 (690 ) — Fee earned on deal termination — — 5,000 Gain on Excess MSR recapture agreements 2,802 2,999 1,157 Other income (loss) 935 3,674 20 $ 28,483 $ 5,389 $ 14,819 |
Schedule of Gain (Loss) on Settlement of Investments, Net | Gain (Loss) on Settlement of Investments, Net — This item is comprised of the following: Year Ended December 31, 2016 2015 2014 Gain (loss) on sale of real estate securities, net $ (27,460 ) $ 13,096 $ 65,701 Gain (loss) on sale of residential mortgage loans, net 12,142 35,175 2,644 Gain (loss) on settlement of derivatives (27,491 ) (46,982 ) (40,400 ) Gain (loss) on liquidated residential mortgage loans (1,810 ) (2,170 ) 3,285 Gain (loss) on sale of REO 4,690 (10,742 ) (3,686 ) Other gains (losses) (8,871 ) (8,003 ) 3,753 $ (48,800 ) $ (19,626 ) $ 31,297 |
Schedule of Other Assets and Other Liabilities | Other Assets and Other Liabilities — Other assets and liabilities are comprised of the following: Other Assets Accrued Expenses and Other Liabilities December 31, December 31, 2016 2015 2016 2015 Margin receivable, net $ 55,481 $ 54,459 Interest payable $ 23,108 $ 18,268 Other receivables (A) 16,350 5,829 Accounts payable 31,299 18,650 Principal paydown receivable 999 795 Derivative liabilities (Note 10) 3,021 13,443 Receivable from government agency (B) 54,706 68,833 Current taxes payable 2,314 1,573 Call rights 337 414 Due to servicers 13,032 — Derivative assets (Note 10) 6,762 2,689 Deferred purchase price of MSRs 90,058 — Interest receivable 51,739 36,963 Other liabilities 8,118 6,112 Ginnie Mae EBO servicer advance receivable, net (C) 14,829 49,725 $ 170,950 $ 58,046 Due from servicers 22,134 5,064 Servicer advances receivable, net (D) 47,088 — Other assets 21,161 14,675 $ 291,586 $ 239,446 (A) Primarily includes a receivable from Ocwen related to their servicer rating downgrade, servicing fee receivables and receivables related to residual securities owned as of December 31, 2016 . (B) Represents claims receivable from the FHA on EBO and reverse mortgage loans for which foreclosure has been completed and for which New Residential has made or intends to make a claim on the FHA guarantee. (C) Represents an HLSS (Note 1) loan to a counterparty collateralized by Servicer Advances on Ginnie Mae EBO loans. (D) Represents Servicer Advances due to New Residential’s licensed servicer subsidiary, NRM (Note 5). These advances are recorded at cost, subject to impairment. Any related purchase discounts are accreted into interest income on a straight-line basis over the estimated weighted average life of the advances. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Summary of Segment Financial Data | Summary financial data on New Residential’s segments is given below, together with a reconciliation to the same data for New Residential as a whole: Servicing Related Assets Residential Securities and Loans Excess MSRs MSRs Servicer Advances Real Estate Securities Residential Mortgage Loans Consumer Loans Corporate Total Year Ended December 31, 2016 Interest income $ 150,141 $ — $ 369,809 $ 265,862 $ 56,249 $ 232,750 $ 1,924 $ 1,076,735 Interest expense 19,160 — 224,879 49,283 25,675 54,427 — 373,424 Net interest income (expense) 130,981 — 144,930 216,579 30,574 178,323 1,924 703,311 Impairment — — — 10,264 23,870 53,846 — 87,980 Servicing revenue, net — 118,169 — — — — — 118,169 Other income (loss) 11,398 — (4,624 ) (47,747 ) 26,779 76,518 13 62,337 Operating expenses 1,259 10,693 3,724 1,480 14,961 39,466 102,627 174,210 Income (Loss) Before Income Taxes 141,120 107,476 136,582 157,088 18,522 161,529 (100,690 ) 621,627 Income tax expense (benefit) — 15,683 21,036 — 2,117 75 — 38,911 Net Income (Loss) $ 141,120 $ 91,793 $ 115,546 $ 157,088 $ 16,405 $ 161,454 $ (100,690 ) $ 582,716 Noncontrolling interests in income (loss) of consolidated subsidiaries $ — $ — $ 40,136 $ — $ — $ 38,127 $ — $ 78,263 Net income (loss) attributable to common stockholders $ 141,120 $ 91,793 $ 75,410 $ 157,088 $ 16,405 $ 123,327 $ (100,690 ) $ 504,453 Servicing Related Assets Residential Securities and Loans Excess MSRs MSRs Servicer Advances Real Estate Securities Residential Mortgage Loans Consumer Loans Corporate Total December 31, 2016 Investments $ 1,594,243 $ 659,483 $ 5,806,740 $ 4,973,711 $ 947,017 $ 1,799,486 $ — $ 15,780,680 Cash and cash equivalents 2,225 95,840 94,368 8,405 5,366 27,962 56,436 290,602 Restricted cash 24,538 — 82,122 — — 56,435 — 163,095 Other assets 2,404 40,608 180,705 1,753,076 100,951 35,921 16,993 2,130,658 Total assets $ 1,623,410 $ 795,931 $ 6,163,935 $ 6,735,192 $ 1,053,334 $ 1,919,804 $ 73,429 $ 18,365,035 Debt $ 729,145 $ — $ 5,698,160 $ 4,203,249 $ 783,006 $ 1,767,676 $ — $ 13,181,236 Other liabilities 2,189 97,923 24,123 1,394,682 22,689 6,382 167,634 1,715,622 Total liabilities 731,334 97,923 5,722,283 5,597,931 805,695 1,774,058 167,634 14,896,858 Total equity 892,076 698,008 441,652 1,137,261 247,639 145,746 (94,205 ) 3,468,177 Noncontrolling interests in equity of consolidated subsidiaries — — 173,057 — — 35,020 — 208,077 Total New Residential stockholders’ equity $ 892,076 $ 698,008 $ 268,595 $ 1,137,261 $ 247,639 $ 110,726 $ (94,205 ) $ 3,260,100 Investments in equity method investees $ 194,788 $ — $ — $ — $ — $ — $ — $ 194,788 Servicing Related Assets Residential Securities and Loans Excess MSRs Servicer Advances Real Estate Securities Residential Mortgage Loans Consumer Loans Corporate Total Year Ended December 31, 2015 Interest income $ 134,565 $ 354,616 $ 110,123 $ 43,180 $ 1 $ 2,587 $ 645,072 Interest expense 11,625 216,837 18,230 21,510 1,615 4,196 274,013 Net interest income (expense) 122,940 137,779 91,893 21,670 (1,614 ) (1,609 ) 371,059 Impairment — — 5,788 18,596 — — 24,384 Other income (loss) 72,802 (53,426 ) (33,604 ) 15,405 43,954 (3,102 ) 42,029 Operating expenses 1,101 14,316 1,227 13,415 228 87,536 117,823 Income (Loss) Before Income Taxes 194,641 70,037 51,274 5,064 42,112 (92,247 ) 270,881 Income tax expense (benefit) — (8,127 ) — (3,199 ) 325 — (11,001 ) Net Income (Loss) $ 194,641 $ 78,164 $ 51,274 $ 8,263 $ 41,787 $ (92,247 ) $ 281,882 Noncontrolling interests in income (loss) of consolidated subsidiaries $ — $ 18,407 $ — $ — $ — $ (5,161 ) $ 13,246 Net income (loss) attributable to common stockholders $ 194,641 $ 59,757 $ 51,274 $ 8,263 $ 41,787 $ (87,086 ) $ 268,636 Servicing Related Assets Residential Securities and Loans Excess MSRs Servicer Advances Real Estate Securities Residential Mortgage Loans Consumer Loans Corporate Total December 31, 2015 Investments $ 1,798,738 $ 7,857,841 $ 2,070,834 $ 1,157,433 $ — $ — $ 12,884,846 Cash and cash equivalents 18,507 95,686 42,984 13,262 6,359 73,138 249,936 Restricted cash 878 93,824 — — — — 94,702 Derivative assets — 2,689 — — — — 2,689 Other assets 34 198,962 1,600,091 106,330 1,767 53,365 1,960,549 Total assets $ 1,818,157 $ 8,249,002 $ 3,713,909 $ 1,277,025 $ 8,126 $ 126,503 $ 15,192,722 Debt $ 182,978 $ 7,550,680 $ 2,513,538 $ 1,004,980 $ 40,446 $ — $ 11,292,622 Other liabilities 2,277 18,153 740,392 14,382 459 137,857 913,520 Total liabilities 185,255 7,568,833 3,253,930 1,019,362 40,905 137,857 12,206,142 Total equity 1,632,902 680,169 459,979 257,663 (32,779 ) (11,354 ) 2,986,580 Noncontrolling interests in equity of consolidated subsidiaries — 190,647 — — — — 190,647 Total New Residential stockholders’ equity $ 1,632,902 $ 489,522 $ 459,979 $ 257,663 $ (32,779 ) $ (11,354 ) $ 2,795,933 Investments in equity method investees $ 217,221 $ — $ — $ — $ — $ — $ 217,221 Servicing Related Assets Residential Securities and Loans Excess MSRs Servicer Advances Real Estate Securities Residential Mortgage Loans Consumer Loans Corporate Total Year Ended December 31, 2014 Interest income $ 49,180 $ 190,206 $ 60,208 $ 47,262 $ — $ 1 $ 346,857 Interest expense 1,294 110,968 12,689 11,073 4,184 500 140,708 Net interest income (expense) 47,886 79,238 47,519 36,189 (4,184 ) (499 ) 206,149 Impairment — — 1,391 9,891 — — 11,282 Other income 100,052 83,828 14,589 30,759 145,860 — 375,088 Operating expenses 713 2,183 10,012 12,688 917 78,386 104,899 Income (Loss) Before Income Taxes 147,225 160,883 50,705 44,369 140,759 (78,885 ) 465,056 Income tax expenses — 20,806 — 2,059 92 — 22,957 Net Income (Loss) $ 147,225 $ 140,077 $ 50,705 $ 42,310 $ 140,667 $ (78,885 ) $ 442,099 Noncontrolling interests in income of consolidated subsidiaries $ — $ 89,222 $ — $ — $ — $ — $ 89,222 Net income (loss) attributable to common stockholders $ 147,225 $ 50,855 $ 50,705 $ 42,310 $ 140,667 $ (78,885 ) $ 352,877 |
INVESTMENTS IN EXCESS MORTGAG31
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Schedule of Servicing Assets at Fair Value | The following table presents activity related to the carrying value of New Residential’s direct investments in Excess MSRs: Servicer Nationstar SLS (A) Ocwen (B) Total Balance as of December 31, 2014 $ 409,076 $ 8,657 $ — $ 417,733 Transfers from indirect ownership 98,258 — — 98,258 Purchases 254,149 — 917,078 1,171,227 Interest income 66,039 180 68,346 134,565 Other income 2,999 — — 2,999 Proceeds from repayments (131,621 ) (1,291 ) (148,996 ) (281,908 ) Change in fair value (596 ) (2,239 ) 41,478 38,643 Balance as of December 31, 2015 698,304 5,307 877,906 1,581,517 Purchases — 124 — 124 Interest income 63,772 (244 ) 86,613 150,141 Other income 2,802 — — 2,802 Proceeds from repayments (145,186 ) (1,015 ) (181,631 ) (327,832 ) Change in fair value (8,399 ) (237 ) 1,339 (7,297 ) Balance as of December 31, 2016 $ 611,293 $ 3,935 $ 784,227 $ 1,399,455 (A) Specialized Loan Servicing LLC (“SLS”). See Note 6 for a description of the SLS Transaction. (B) Ocwen services the loans underlying the Excess MSRs and Servicer Advances acquired from HLSS (Note 1). The following is a summary of New Residential’s investments in MSRs as of December 31, 2016 : UPB of Underlying Mortgages Weighted Average Life (Years) (A) Amortized Cost Basis Carrying Value (B) Agency Ditech subserviced pools $ 67,560,362 7.1 $ 468,207 $ 546,011 FirstKey subserviced pools 12,374,940 6.8 87,597 113,472 Total $ 79,935,302 7.0 $ 555,804 $ 659,483 (A) Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment. (B) Carrying Value represents fair value. As of December 31, 2016 , a weighted average discount rate of 12.0% was used to value New Residential’s investments in MSRs. The following table presents activity related to the carrying value of New Residential’s investments in MSRs: Subservicer Ditech FirstKey Total Balance as of December 31, 2015 $ — $ — $ — Purchases 482,102 89,056 571,158 Amortization of servicing rights (A) (13,895 ) (1,459 ) (15,354 ) Change in valuation inputs and assumptions 77,804 25,875 103,679 Balance as of December 31, 2016 $ 546,011 $ 113,472 $ 659,483 (A) Based on the ratio of the current UPB of the underlying residential mortgage loans relative to the original UPB of the underlying residential mortgage loans. |
Servicing Asset at Amortized Cost | The following is a summary of New Residential’s direct investments in Excess MSRs: December 31, 2016 UPB of Underlying Mortgages Interest in Excess MSR Weighted Average Life Years (A) Amortized Cost Basis (B) Carrying Value (C) New Residential (D) Fortress-managed funds Nationstar Agency Original and Recaptured Pools $ 78,295,454 32.5% - 66.7% (53.3%) 0.0% - 40.0% 20.0% - 35.0% 5.9 $ 296,508 $ 330,323 Recapture Agreements — 32.5% - 66.7% (53.3%) 0.0% - 40.0% 20.0% - 35.0% 12.3 25,524 51,434 78,295,454 6.4 322,032 381,757 Non-Agency (E) Nationstar and SLS Serviced: Original and Recaptured Pools $ 78,209,375 33.3% - 100.0% (59.4%) 0.0% - 50.0% 0.0% - 33.3% 5.2 $ 183,775 $ 219,980 Recapture Agreements — 33.3% - 100.0% (59.4%) 0.0% - 50.0% 0.0% - 33.3% 12.2 11,370 13,491 Ocwen Serviced Pools 121,471,168 100.0% —% —% 6.6 741,411 784,227 199,680,543 6.4 936,556 1,017,698 Total $ 277,975,997 6.4 $ 1,258,588 $ 1,399,455 December 31, 2015 UPB of Underlying Mortgages Interest in Excess MSR Weighted Average Life Years (A) Amortized Cost Basis (B) Carrying Value (C) New Residential (D) Fortress-managed funds Nationstar Agency Original and Recaptured Pools $ 93,441,696 32.5% - 66.7% (53.2%) 0.0% - 40.0% 20.0% - 35.0% 5.8 $ 335,478 $ 378,083 Recapture Agreements — 32.5% - 66.7% (53.2%) 0.0% - 40.0% 20.0% - 35.0% 12.0 36,627 59,118 93,441,696 6.4 372,105 437,201 Non-Agency (E) Nationstar and SLS Serviced: Original and Recaptured Pools $ 94,923,975 33.3% - 80.0% (58.9%) 0.0% - 50.0% 0.0% - 33.3% 5.2 $ 210,691 $ 250,662 Recapture Agreements — 33.3% - 80.0% (58.9%) 0.0% - 50.0% 0.0% - 33.3% 12.3 14,130 15,748 Ocwen Serviced Pools 141,002,300 100.0% —% —% 6.2 836,428 877,906 235,926,275 6.1 1,061,249 1,144,316 Total $ 329,367,971 6.2 $ 1,433,354 $ 1,581,517 (A) Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment. (B) The amortized cost basis of the recapture agreements is determined based on the relative fair values of the recapture agreements and related Excess MSRs at the time they were acquired. (C) Carrying Value represents the fair value of the pools or recapture agreements, as applicable. (D) Amounts in parentheses represent weighted averages. (E) New Residential also invested in related Servicer Advances, including the basic fee component of the related MSR as of December 31, 2016 and 2015 (Note 6) on $186.4 billion and $220.3 billion UPB, respectively, underlying these Excess MSRs. Changes in fair value recorded in other income is comprised of the following: Year Ended December 31, 2016 2015 2014 Original and Recaptured Pools $ (11,221 ) $ 34,936 $ 35,000 Recapture Agreements 3,924 3,707 6,615 $ (7,297 ) $ 38,643 $ 41,615 |
Summary of the Financial Results of Excess MSR Joint Ventures, Accounted for as Equity Method Investees | The following tables summarize the financial results of the Excess MSR joint ventures, accounted for as equity method investees, held by New Residential: December 31, 2016 2015 Excess MSR assets $ 372,391 $ 421,999 Other assets 17,184 12,442 Other liabilities — — Equity $ 389,575 $ 434,441 New Residential’s investment $ 194,788 $ 217,221 New Residential’s ownership 50.0 % 50.0 % Year Ended December 31, 2016 2015 2014 Interest income $ 36,502 $ 51,811 $ 67,698 Other income (loss) (3,359 ) 10,615 46,961 Expenses (91 ) (107 ) (99 ) Net income $ 33,052 $ 62,319 $ 114,560 New Residential’s investments in equity method investees changed during the years ended December 31, 2016 and 2015 as follows: 2016 2015 Balance at beginning of period $ 217,221 $ 330,876 Contributions to equity method investees — — Transfers to direct ownership — (98,258 ) Distributions of earnings from equity method investees (22,046 ) (37,874 ) Distributions of capital from equity method investees (16,913 ) (8,683 ) Change in fair value of investments in equity method investees 16,526 31,160 Balance at end of period $ 194,788 $ 217,221 |
Summary of Excess MSR Investments made through Equity Method Investees | The following is a summary of New Residential’s Excess MSR investments made through equity method investees: December 31, 2016 Unpaid Principal Balance Investee Interest in Excess MSR (A) New Residential Interest in Investees Amortized Cost Basis (B) Carrying Value (C) Weighted Average Life (Years) (D) Agency Original and Recaptured Pools $ 60,677,300 66.7% 50.0% $ 247,105 $ 314,401 5.8 Recapture Agreements — 66.7% 50.0% 29,974 57,990 12.2 Total $ 60,677,300 $ 277,079 $ 372,391 6.5 December 31, 2015 Unpaid Principal Balance Investee Interest in Excess MSR (A) New Residential Interest in Investees Amortized Cost Basis (B) Carrying Value (C) Weighted Average Life (Years) (D) Agency Original and Recaptured Pools $ 73,058,050 66.7% 50.0% $ 275,338 $ 351,275 5.7 Recapture Agreements — 66.7% 50.0% 45,421 70,724 11.9 $ 73,058,050 $ 320,759 $ 421,999 6.6 (A) The remaining interests are held by Nationstar. (B) Represents the amortized cost basis of the equity method investees in which New Residential holds a 50% interest. The amortized cost basis of the recapture agreements is determined based on the relative fair values of the recapture agreements and related Excess MSRs at the time they were acquired. (C) Represents the carrying value of the Excess MSRs held in equity method investees, in which New Residential holds a 50% interest. Carrying value represents the fair value of the pools or recapture agreements, as applicable. (D) The weighted average life represents the weighted average expected timing of the receipt of cash flows of each investment. |
Summary of the Geographic Distribution of the Underlying Residential Mortgage Loans of the Direct Investments in Excess MSRs | The table below summarizes the geographic distribution of the underlying residential mortgage loans of the Excess MSR investments: Aggregate Direct and Equity Method Investees Percentage of Total Outstanding Unpaid Principal Amount December 31, State Concentration 2016 2015 California 24.1 % 24.2 % Florida 8.6 % 8.6 % New York 7.9 % 7.4 % Texas 4.6 % 4.6 % New Jersey 4.2 % 4.1 % Maryland 3.7 % 3.7 % Illinois 3.5 % 3.5 % Virginia 3.1 % 3.1 % Georgia 3.1 % 3.1 % Massachusetts 2.7 % 2.7 % Washington 2.6 % 2.7 % Arizona 2.5 % 2.5 % Other U.S. 29.4 % 29.8 % 100.0 % 100.0 % |
INVESTMENTS IN MORTGAGE SERVI32
INVESTMENTS IN MORTGAGE SERVICING RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Transfers and Servicing [Abstract] | |
Fees Earned in Exchange for Servicing Financial Assets | Servicing revenue, net recognized by New Residential related to its investments in MSRs was comprised of the following: Year Ended December 31, 2016 Servicing fee revenue $ 29,168 Ancillary and other fees 676 Servicing fee revenue and fees 29,844 Amortization of servicing rights (15,354 ) Change in valuation inputs and assumptions 103,679 Servicing revenue, net $ 118,169 |
Schedule of Servicing Assets at Fair Value | The following table presents activity related to the carrying value of New Residential’s direct investments in Excess MSRs: Servicer Nationstar SLS (A) Ocwen (B) Total Balance as of December 31, 2014 $ 409,076 $ 8,657 $ — $ 417,733 Transfers from indirect ownership 98,258 — — 98,258 Purchases 254,149 — 917,078 1,171,227 Interest income 66,039 180 68,346 134,565 Other income 2,999 — — 2,999 Proceeds from repayments (131,621 ) (1,291 ) (148,996 ) (281,908 ) Change in fair value (596 ) (2,239 ) 41,478 38,643 Balance as of December 31, 2015 698,304 5,307 877,906 1,581,517 Purchases — 124 — 124 Interest income 63,772 (244 ) 86,613 150,141 Other income 2,802 — — 2,802 Proceeds from repayments (145,186 ) (1,015 ) (181,631 ) (327,832 ) Change in fair value (8,399 ) (237 ) 1,339 (7,297 ) Balance as of December 31, 2016 $ 611,293 $ 3,935 $ 784,227 $ 1,399,455 (A) Specialized Loan Servicing LLC (“SLS”). See Note 6 for a description of the SLS Transaction. (B) Ocwen services the loans underlying the Excess MSRs and Servicer Advances acquired from HLSS (Note 1). The following is a summary of New Residential’s investments in MSRs as of December 31, 2016 : UPB of Underlying Mortgages Weighted Average Life (Years) (A) Amortized Cost Basis Carrying Value (B) Agency Ditech subserviced pools $ 67,560,362 7.1 $ 468,207 $ 546,011 FirstKey subserviced pools 12,374,940 6.8 87,597 113,472 Total $ 79,935,302 7.0 $ 555,804 $ 659,483 (A) Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment. (B) Carrying Value represents fair value. As of December 31, 2016 , a weighted average discount rate of 12.0% was used to value New Residential’s investments in MSRs. The following table presents activity related to the carrying value of New Residential’s investments in MSRs: Subservicer Ditech FirstKey Total Balance as of December 31, 2015 $ — $ — $ — Purchases 482,102 89,056 571,158 Amortization of servicing rights (A) (13,895 ) (1,459 ) (15,354 ) Change in valuation inputs and assumptions 77,804 25,875 103,679 Balance as of December 31, 2016 $ 546,011 $ 113,472 $ 659,483 (A) Based on the ratio of the current UPB of the underlying residential mortgage loans relative to the original UPB of the underlying residential mortgage loans. |
Summary of the Geographic Distribution of the Underlying Residential Mortgage Loans of the Direct Investment in MSRs | The table below summarizes the geographic distribution of the underlying residential mortgage loans of the investments in MSRs: Percentage of Total Outstanding Unpaid Principal Amount State Concentration December 31, 2016 California 20.5 % Florida 7.3 % Texas 6.3 % New Jersey 4.5 % Illinois 4.1 % Massachusetts 4.1 % Arizona 3.3 % Washington 3.2 % Michigan 3.1 % Maryland 3.0 % Other U.S. 40.6 % 100.0 % |
INVESTMENTS IN SERVICER ADVAN33
INVESTMENTS IN SERVICER ADVANCES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
Summary of Investments in Servicer Advances | The following is a summary of the investments in Servicer Advances, including the right to the basic fee component of the related MSRs, made by New Residential: Amortized Cost Basis Carrying Value (A) Weighted Average Discount Rate Weighted Average Yield Weighted Average Life (Years) (B) Change in Fair Value Recorded in Other Income for Year then Ended December 31, 2016 Servicer Advances (C) $ 5,687,635 $ 5,706,593 5.6 % 5.5 % 4.6 $ (7,768 ) December 31, 2015 Servicer Advances (C) $ 7,400,068 $ 7,426,794 5.6 % 5.5 % 4.4 $ (57,491 ) (A) Carrying value represents the fair value of the investments in Servicer Advances, including the basic fee component of the related MSRs. (B) Weighted Average Life represents the weighted average expected timing of the receipt of expected net cash flows for this investment. (C) Excludes asset-backed securities collateralized by Servicer Advances, which have aggregate face amounts of $100.0 million and $431.0 million and aggregate carrying values of $100.1 million and $430.3 million as of December 31, 2016 and 2015 , respectively. See Note 7 for details related to these securities. The following is additional information regarding the Servicer Advances and related financing: Loan-to-Value (“LTV”) (A) Cost of Funds (C) UPB of Underlying Residential Mortgage Loans Outstanding Servicer Advances Servicer Advances to UPB of Underlying Residential Mortgage Loans Face Amount of Notes and Bonds Payable Gross Net (B) Gross Net December 31, 2016 Servicer Advances (D) $ 186,362,657 $ 5,617,759 3.0 % $ 5,560,412 94.5 % 93.4 % 3.2 % 2.8 % December 31, 2015 Servicer Advances (D) $ 220,256,804 $ 7,578,110 3.4 % $ 7,058,094 91.2 % 90.2 % 3.4 % 2.6 % (A) Based on outstanding Servicer Advances, excluding purchased but unsettled Servicer Advances and certain deferred servicing fees (“DSF”) which New Residential receives financing on. If New Residential were to include these DSF in the servicer advance balance, gross and net LTV as of December 31, 2016 would be 89.7% and 88.6% , respectively. Also excludes retained Non-Agency bonds with a current face amount of $94.4 million from the outstanding Servicer Advances debt. If New Residential were to sell these bonds, gross and net LTV as of December 31, 2016 would be 96.1% and 95.0% , respectively. (B) Ratio of face amount of borrowings to par amount of Servicer Advance collateral, net of any general reserve. (C) Annualized measure of the cost associated with borrowings. Gross Cost of Funds primarily includes interest expense and facility fees. Net Cost of Funds excludes facility fees. (D) The following types of advances comprise the investments in Servicer Advances: December 31, 2016 2015 Principal and interest advances $ 1,489,929 $ 2,229,468 Escrow advances (taxes and insurance advances) 2,613,050 3,687,559 Foreclosure advances 1,514,780 1,661,083 Total $ 5,617,759 $ 7,578,110 |
Schedule of Interest Income Related to Investments in Servicer Advances | Interest income recognized by New Residential related to its investments in Servicer Advances was comprised of the following: Year Ended December 31, 2016 2015 2014 Interest income, gross of amounts attributable to servicer compensation $ 723,193 $ 754,717 $ 290,309 Amounts attributable to base servicer compensation (79,868 ) (97,351 ) (26,092 ) Amounts attributable to incentive servicer compensation (278,975 ) (305,050 ) (74,011 ) Interest income from investments in Servicer Advances $ 364,350 $ 352,316 $ 190,206 New Residential has determined that the Buyer is a VIE. The following table presents information on the assets and liabilities related to this consolidated VIE. As of December 31, 2016 2015 Assets Servicer advance investments, at fair value $ 1,731,633 $ 2,344,245 Cash and cash equivalents 37,854 40,761 All other assets 19,799 25,092 Total assets (A) $ 1,789,286 $ 2,410,098 Liabilities Notes and bonds payable $ 1,464,851 $ 2,060,347 All other liabilities 5,187 6,111 Total liabilities (A) $ 1,470,038 $ 2,066,458 (A) The creditors of the Buyer do not have recourse to the general credit of New Residential and the assets of the Buyer are not directly available to satisfy New Residential’s obligations. Others’ interests in the equity of the Buyer is computed as follows: December 31, 2016 2015 Total Advance Purchaser LLC equity $ 319,248 $ 343,640 Others’ ownership interest 54.2 % 55.5 % Others’ interest in equity of consolidated subsidiary $ 173,057 $ 190,647 Others’ interests in the Buyer’s net income (loss) is computed as follows: Year Ended December 31, 2016 2015 2014 Net Advance Purchaser LLC income (loss) $ 72,159 $ 33,180 $ 159,374 Others’ ownership interest as a percent of total (A) 55.6 % 55.5 % 56.0 % Others’ interest in net income (loss) of consolidated subsidiaries $ 40,136 $ 18,407 $ 89,222 (A) As a result, New Residential owned 44.4% , 44.5% and 44.0% of the Buyer, on average during the years ended December 31, 2016 , 2015 and 2014 , respectively. |
INVESTMENTS IN REAL ESTATE SE34
INVESTMENTS IN REAL ESTATE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Real Estate Securities | Activities related to New Residential’s investments in real estate securities were as follows: Year Ended December 31, 2016 Year Ended December 31, 2015 (in millions) (in millions) Agency Non-Agency Agency Non-Agency Purchases Face $ 7,163.3 $ 5,431.6 $ 5,140.1 $ 2,397.9 Purchase Price 7,467.6 2,746.3 5,333.7 1,288.9 Sales Face $ 6,466.1 $ 332.5 $ 5,772.5 $ 476.4 Amortized Cost 6,749.4 284.7 5,997.5 422.7 Sale Price 6,740.0 266.6 6,007.6 425.7 Gain (Loss) on Sale (9.4 ) (18.1 ) 10.1 3.0 The following is a summary of New Residential’s real estate securities, all of which are classified as available-for-sale and are, therefore, reported at fair value with changes in fair value recorded in other comprehensive income, except for securities that are other-than-temporarily impaired and except for securities which New Residential elected to carry at fair value and record changes to valuation through the income statement. Gross Unrealized Weighted Average Asset Type Outstanding Face Amount Amortized Cost Basis Gains Losses Carrying Value (A) Number of Securities Rating (B) Coupon (C) Yield Life (Years) (D) Principal Subordination (E) December 31, 2016 Agency RMBS (F)(G) $ 1,486,739 $ 1,532,421 $ 1,803 $ (3,926 ) $ 1,530,298 57 AAA 3.45 % 2.94 % 9.1 N/A Non-Agency RMBS (H) (I) 7,302,218 3,415,906 147,206 (19,552 ) 3,543,560 536 CCC- 1.59 % 5.88 % 7.9 8.8 % Total/Weighted Average $ 8,788,957 $ 4,948,327 $ 149,009 $ (23,478 ) $ 5,073,858 593 BB- 2.16 % 4.97 % 8.3 December 31, 2015 Agency RMBS (F)(G) $ 884,578 $ 918,633 $ 183 $ (1,218 ) $ 917,598 28 AAA 3.28 % 2.75 % 6.6 N/A Non-Agency RMBS (H) (I) 3,533,974 1,579,445 22,964 (18,126 ) 1,584,283 240 BB+ 1.63 % 5.03 % 6.8 12.1 % Total/Weighted Average $ 4,418,552 $ 2,498,078 $ 23,147 $ (19,344 ) $ 2,501,881 268 A- 2.69 % 4.19 % 6.7 (A) Fair value, which is equal to carrying value for all securities. See Note 12 regarding the estimation of fair value. (B) Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. This excludes the ratings of the collateral underlying 193 bonds with a carrying value of $341.9 million which either have never been rated or for which rating information is no longer provided. For each security rated by multiple rating agencies, the lowest rating is used. New Residential used an implied AAA rating for the Agency RMBS. Ratings provided were determined by third party rating agencies, and represent the most recent credit ratings available as of the reporting date and may not be current. (C) Excludes residual bonds, and certain other Non-Agency bonds, with a carrying value of $246.8 million and $0.0 million , respectively, for which no coupon payment is expected. (D) The weighted average life is based on the timing of expected principal reduction on the assets. (E) Percentage of the amortized cost basis of securities that is subordinate to New Residential’s investments, excluding fair value option securities and servicer advance bonds. (F) Includes securities issued or guaranteed by U.S. Government agencies such as Fannie Mae or Freddie Mac. (G) The total outstanding face amount was $1.3 billion and $0.7 billion for fixed rate securities and $0.2 billion and $0.2 billion for floating rate securities as of December 31, 2016 and 2015 , respectively. (H) The total outstanding face amount was $1.2 billion (including $0.8 billion of residual and fair value option notional amount) and $2.3 billion (including $1.7 billion of residual and fair value option notional amount) for fixed rate securities and $6.1 billion (including $2.1 billion of residual and fair value option notional amount) and $1.3 billion (including $164.4 million of residual and fair value option notional amount) for floating rate securities as of December 31, 2016 and 2015 , respectively. (I) Includes other ABS consisting primarily of (i) interest-only securities and servicing strips (fair value option securities) which New Residential elected to carry at fair value and record changes to valuation through the income statement and (ii) bonds backed by Servicer Advances. Gross Unrealized Weighted Average Asset Type Outstanding Face Amount Amortized Cost Basis Gains Losses Carrying Value Number of Securities Rating Coupon Yield Life (Years) Principal Subordination December 31, 2016 Servicer Advance Bonds $ 100,000 $ 99,838 $ 310 $ — $ 100,148 1 AAA 3.21 % 3.10 % 0.7 N/A Fair Value Option Securities Interest-only Securities 2,062,647 113,342 5,270 (6,555 ) 112,057 28 AA+ 1.85 % 5.30 % 2.9 N/A Servicing Strips 456,629 5,613 311 (1 ) 5,923 11 NA 0.27 % 21.74 % 6.2 N/A December 31, 2015 Servicer Advance Bonds $ 431,000 $ 430,951 $ — $ (661 ) $ 430,290 5 AA+ 2.69 % 2.70 % 1.1 N/A Fair Value Option Securities Interest-only Securities 1,522,256 82,101 5,227 (4,348 ) 82,980 12 AA+ 1.84 % 7.11 % 4.0 N/A |
Summary of Real Estate Securities in an Unrealized Loss Position | The following table summarizes New Residential’s securities in an unrealized loss position as of December 31, 2016 . Amortized Cost Basis Weighted Average Securities in an Unrealized Loss Position Outstanding Face Amount Before Impairment Other-Than- Temporary Impairment (A) After Impairment Gross Unrealized Losses Carrying Value Number of Securities Rating (B) Coupon Yield Life (Years) Less than 12 Months $ 1,300,530 $ 620,309 $ (939 ) $ 619,370 $ (9,896 ) $ 609,474 195 CCC+ 1.44 % 5.16 % 7.4 12 or More Months 969,356 314,720 (1,487 ) 313,233 (13,582 ) 299,651 47 BB+ 1.89 % 4.51 % 6.2 Total/Weighted Average $ 2,269,886 $ 935,029 $ (2,426 ) $ 932,603 $ (23,478 ) $ 909,125 242 B 1.59 % 4.94 % 7.0 (A) This amount represents OTTI recorded on securities that are in an unrealized loss position as of December 31, 2016 . (B) The weighted average rating of securities in an unrealized loss position for less than 12 months excludes the rating of 111 bonds which either have never been rated or for which rating information is no longer provided. The weighted average rating of securities in an unrealized loss position for 12 or more months excludes the rating of 10 bonds which either have never been rated or for which rating information is no longer provided. New Residential performed an assessment of all of its debt securities that are in an unrealized loss position (an unrealized loss position exists when a security’s amortized cost basis, excluding the effect of OTTI, exceeds its fair value) and determined the following: December 31, 2016 Unrealized Losses Fair Value Amortized Cost Basis After Impairment Credit (A) Non-Credit (B) Securities New Residential intends to sell (C) $ — $ — $ — $ — Securities New Residential is more likely than not to be required to sell (D) — — — N/A Securities New Residential has no intent to sell and is not more likely than not to be required to sell: Credit impaired securities 238,660 244,526 (2,426 ) (5,866 ) Non-credit impaired securities 670,465 688,077 — (17,612 ) Total debt securities in an unrealized loss position $ 909,125 $ 932,603 $ (2,426 ) $ (23,478 ) (A) This amount is required to be recorded as OTTI through earnings. In measuring the portion of credit losses, New Residential estimates the expected cash flow for each of the securities. This evaluation includes a review of the credit status and the performance of the collateral supporting those securities, including the credit of the issuer, key terms of the securities and the effect of local, industry and broader economic trends. Significant inputs in estimating the cash flows include New Residential’s expectations of prepayment rates, default rates and loss severities. Credit losses are measured as the decline in the present value of the expected future cash flows discounted at the investment’s effective interest rate. (B) This amount represents unrealized losses on securities that are due to non-credit factors and recorded through other comprehensive income. (C) A portion of securities New Residential intends to sell have a fair value equal to their amortized cost basis after impairment, and, therefore do no t have unrealized losses reflected in other comprehensive income as of December 31, 2016 . (D) New Residential may, at times, be more likely than not to be required to sell certain securities for liquidity purposes. While the amount of the securities to be sold may be an estimate, and the securities to be sold have not yet been identified, New Residential must make its best estimate, which is subject to significant judgment regarding future events, and may differ materially from actual future sales. |
Summary of Activity Related to Credit Losses on Debt Securities | The following table summarizes the activity related to credit losses on debt securities: Year Ended December 31, 2016 2015 Beginning balance of credit losses on debt securities for which a portion of an OTTI was recognized in other comprehensive income $ 6,239 $ 1,127 Increases to credit losses on securities for which an OTTI was previously recognized and a portion of an OTTI was recognized in other comprehensive income 3,008 5 Additions for credit losses on securities for which an OTTI was not previously recognized 7,256 5,782 Reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis — — Reduction for credit losses on securities for which no OTTI was recognized in other comprehensive income at the current measurement date — — Reduction for securities sold during the period (1,008 ) (675 ) Ending balance of credit losses on debt securities for which a portion of an OTTI was recognized in other comprehensive income $ 15,495 $ 6,239 |
Summary of the Geographic Distribution of the Collateral Securing Non-Agency RMBS | The table below summarizes the geographic distribution of the collateral securing New Residential’s Non-Agency RMBS: December 31, 2016 2015 Geographic Location (A) Outstanding Face Amount Percentage of Total Outstanding Outstanding Face Amount Percentage of Total Outstanding Western U.S. $ 2,757,424 38.3 % $ 1,097,609 35.3 % Southeastern U.S. 1,635,596 22.7 % 758,167 24.4 % Northeastern U.S. 1,426,519 19.8 % 583,366 18.8 % Midwestern U.S. 778,372 10.8 % 335,406 10.8 % Southwestern U.S. 557,033 7.7 % 309,236 10.0 % Other (B) 47,274 0.7 % 19,189 0.7 % $ 7,202,218 100.0 % $ 3,102,973 100.0 % (A) Excludes $100.0 million and $431.0 million face amount of bonds backed by Servicer Advances at December 31, 2016 and 2015 , respectively. (B) Represents collateral for which New Residential was unable to obtain geographic information. |
Schedule of the Outstanding Face Amount and Carrying Value for Securities Uncollectible | The following is the outstanding face amount and carrying value for securities, for which, as of the acquisition date, it was probable that New Residential would be unable to collect all contractually required payments, excluding residual and fair value option securities: Outstanding Face Amount Carrying Value December 31, 2016 $ 2,951,498 $ 1,871,466 December 31, 2015 873,763 504,659 |
Summary of Changes in Accretable Yield for Securities | The following is a summary of the changes in accretable yield for these securities: Year Ended December 31, 2016 2015 Beginning Balance $ 316,521 $ 181,671 Adoption of ASU No. 2014-11 (Note 2) — 146,741 Additions 952,271 172,828 Accretion (130,745 ) (42,800 ) Reclassifications from (to) non-accretable difference 63,239 (36,326 ) Disposals (1,161 ) (105,593 ) Ending Balance $ 1,200,125 $ 316,521 |
INVESTMENTS IN RESIDENTIAL MO35
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Residential Mortgage Loans Outstanding by Loan Type, Excluding REO | The following table presents certain information regarding New Residential’s residential mortgage loans outstanding by loan type, excluding REO: December 31, 2016 Outstanding Face Amount Carrying (A) Loan Weighted Average Yield Weighted Average Life (Years) (B) Floating Rate Loans as a % of Face Amount LTV Ratio (C) Weighted Avg. Delinquency (D) Weighted Average FICO (E) Loan Type Reverse Mortgage Loans (F)(G) $ — $ — — — % — — % — % — % N/A Performing Loans (H) — — — — % — — % — % — % — Purchased Credit Deteriorated Loans (I) 203,673 190,761 1,183 5.5 % 2.7 8.7 % 71.5 % 94.9 % 590 Total Residential Mortgage Loans, held-for-investment $ 203,673 $ 190,761 1,183 5.5 % 2.7 8.7 % 71.5 % 94.9 % 590 Reverse Mortgage Loans (F) (G) $ 22,645 $ 11,468 69 7.2 % 4.5 15.4 % 135.6 % 70.7 % N/A Performing Loans (H) (J) 179,983 175,194 1,957 4.3 % 5.9 22.4 % 102.9 % 6.4 % 625 Non-Performing Loans (I) (J) 706,302 510,003 3,759 7.1 % 2.9 20.6 % 105.0 % 75.9 % 575 Total Residential Mortgage Loans, held-for-sale $ 908,930 $ 696,665 5,785 6.5 % 3.5 20.8 % 105.4 % 62.0 % 585 December 31, 2015 Loan Type Reverse Mortgage Loans (F) (G) $ 34,423 $ 19,560 136 10.0 % 4.2 21.8 % 112.9 % 71.3 % N/A Performing Loans (H) 21,483 19,964 671 9.1 % 6.7 17.1 % 77.4 % 7.5 % 626 Purchased Credit Deteriorated Loans (I) 450,229 290,654 2,118 5.5 % 2.5 18.7 % 115.4 % 97.6 % 578 Total Residential Mortgage Loans, held-for-investment $ 506,135 $ 330,178 2,925 6.0 % 2.8 18.8 % 113.6 % 92.0 % 580 Performing Loans (H) $ 270,585 $ 277,084 1,838 4.6 % 4.9 4.6 % 57.0 % — % 702 Non-Performing Loans (I) 589,129 499,597 3,428 5.9 % 2.9 14.5 % 104.5 % 81.1 % 580 Total Residential Mortgage Loans, held-for-sale $ 859,714 $ 776,681 5,266 5.5 % 3.5 11.4 % 89.6 % 55.6 % 619 (A) Includes residential mortgage loans with a United States federal income tax basis of $905.7 million and $1,204.2 million as of December 31, 2016 and 2015 , respectively. (B) The weighted average life is based on the expected timing of the receipt of cash flows. (C) LTV refers to the ratio comparing the loan’s unpaid principal balance to the value of the collateral property. (D) Represents the percentage of the total principal balance that is 60+ days delinquent. (E) The weighted average FICO score is based on the weighted average of information updated and provided by the loan servicer on a monthly basis. (F) Represents a 70% participation interest that New Residential holds in a portfolio of reverse mortgage loans. The average loan balance outstanding based on total UPB was $0.5 million and $0.4 million at December 31, 2016 and 2015 , respectively. Approximately 60.9% and 71.0% of these loans have reached a termination event at December 31, 2016 and 2015 , respectively. As a result of the termination event, each such loan has matured and the borrower can no longer make draws on these loans. (G) FICO scores are not used in determining how much a borrower can access via a reverse mortgage loan. (H) Performing loans are generally placed on nonaccrual status when principal or interest is 120 days or more past due. (I) Includes loans with evidence of credit deterioration since origination where it is probable that New Residential will not collect all contractually required principal and interest payments. As of December 31, 2016 , New Residential has placed all Non-Performing Loans, held-for-sale on nonaccrual status, except as described in (J) below. (J) Includes $45.2 million and $87.5 million UPB of Ginnie Mae EBO performing and non-performing loans, respectively, on accrual status as contractual cash flows are guaranteed by the FHA. |
Summary of the Geographic Distribution of the Underlying Residential Mortgage Loans | The table below summarizes the geographic distribution of the underlying residential mortgage loans: Percentage of Total Outstanding Unpaid Principal Amount December 31, State Concentration 2016 2015 New York 16.7 % 14.5 % Florida 11.4 % 10.7 % California 10.3 % 12.3 % New Jersey 9.6 % 13.1 % Maryland 4.7 % 3.5 % Illinois 4.0 % 4.3 % Texas 3.9 % 3.3 % Massachusetts 3.5 % 3.3 % Pennsylvania 2.9 % 2.8 % Washington 2.8 % 3.2 % Other U.S. 30.2 % 29.0 % 100.0 % 100.0 % |
Schedule of Residential Mortgage Loan Transactions | The following table summarizes these transactions (dollars in millions). Securities Owned Prior Assets Acquired Loans Sold (C) Retained Bonds Retained Assets (C) Date of Call (A) Number of Trusts Called Face Amount Amortized Cost Basis Loan UPB Loan Price (B) REO & Other Price (B) Date of Securitization UPB Gain (Loss) Basis Type Loan UPB Loan Price REO & Other Price May 2014 16 $ 17.4 $ 12.0 $ 282.2 $ 289.4 $ — May 2014 $ 233.8 $ 3.5 N/A N/A $ 48.4 $ 40.1 $ 1.3 August 2014 19 15.4 13.1 530.1 536.3 3.0 October 2014 463.0 7.0 $ 25.8 Interest-Only 66.4 46.3 3.0 December 2014 25 27.9 24.0 597.1 623.7 — December 2014 516.1 0.7 28.9 Interest-Only 81.0 71.7 4.3 June 2015 18 13.7 9.1 369.0 388.8 — June 2015 334.5 (2.8 ) 15.0 Interest-Only 34.5 31.7 1.3 September 2015 7 7.4 4.5 216.3 223.1 1.5 N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) 19.4 17.2 1.5 November 2015 14 3.9 3.0 345.4 351.7 1.2 November 2015 511.8 2.4 22.0 Interest-Only 29.8 23.4 1.2 December 2015 14 61.4 48.0 309.1 315.1 3.1 March 2016 261.3 2.1 36.6 Various 35.8 26.6 2.9 March 2016 13 58.0 41.0 167.2 173.3 3.1 N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) 65.0 61.8 3.4 May 2016 12 60.0 44.0 290.6 298.7 0.6 May 2016 306.9 (2.2 ) 40.0 Various 85.9 78.2 1.1 August 2016 11 6.2 1.4 312.3 319.2 1.7 September 2016 308.0 8.1 45.7 Various 45.6 41.1 2.3 November 2016 13 41.7 24.2 289.1 286.8 3.7 December 2016 273.6 (5.2 ) 43.2 Various 46.2 21.6 4.4 December 2016 1 116.6 102.0 124.4 119.1 0.4 N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) N/A (C) (A) Any related securitization may occur on the same or a subsequent date, depending on market conditions and other factors. Except as otherwise noted in (C) below, there was one securitization associated with each call. (B) Price includes par amount paid for all underlying residential mortgage loans of the trusts, plus the basis of the exercised call rights, plus advances and costs incurred (including MSR Fund Payments, as defined in Note 15) in exercising such call rights. (C) Loans were sold through a securitization which was treated as a sale for accounting purposes. Retained assets are reflected as of the date of the relevant securitization. The securitization that occurred in November 2015 primarily included loans from the September 2015 and November 2015 calls, but also included previously acquired loans. The securitization that occurred in March 2016 primarily included loans from the December 2015 call, but also included previously acquired loans. The securitization that occurred in May 2016 primarily included loans from the March 2016 and May 2016 calls. The securitization that occurred in September 2016 primarily included loans from the August 2016 call, but also included $42.2 million of previously acquired loans. The securitization that occurred in December 2016 primarily included loans from the November 2016 call, but also included $31.2 million of previously acquired loans. No loans from the December 2016 call had been securitized by December 31, 2016 . |
Summary of Activities Related to the Valuation Provision on Reverse Mortgage Loans and Allowance for Loan Losses on Performing Loans Held-for-Investment | Activities related to the valuation provision on reverse mortgage loans and allowance for loan losses on performing loans held-for-investment were as follows: Reverse Mortgage Loans Performing Loans Balance at December 31, 2014 $ 1,518 $ 1,447 Provision for loan losses (A) 35 43 Charge-offs (B) — (1,371 ) Balance at December 31, 2015 $ 1,553 $ 119 Provision for loan losses (A) 73 4 Charge-offs (B) — — Sales (171 ) — Transfer of loans to held-for-sale (C) (1,455 ) (123 ) Balance at December 31, 2016 $ — $ — (A) Based on an analysis of collective borrower performance, credit ratings of borrowers, loan-to-value ratios, estimated value of the underlying collateral, key terms of the loans and historical and anticipated trends in defaults and loss severities at a pool level. (B) Loans, other than PCD loans, are generally charged off or charged down to the net realizable value of the collateral (i.e., fair value less costs to sell), with an offset to the allowance for loan losses, when available information confirms that loans are uncollectible. (C) Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. Activities related to the allowance for loan losses on performing consumer loans, held-for-investment were as follows: Collectively Evaluated (A) Individually Impaired (B) Total Balance at March 31, 2016 (date of SpringCastle Transaction) $ — $ — $ — Provision for loan losses 49,506 997 50,503 Net charge-offs (C) (47,065 ) — (47,065 ) Balance at December 31, 2016 $ 2,441 $ 997 $ 3,438 (A) Represents smaller-balance homogeneous loans that are not individually considered impaired and are evaluated based on an analysis of collective borrower performance, key terms of the loans and historical and anticipated trends in defaults and loss severities, and consideration of the unamortized acquisition discount. Includes a provision for loan losses of $2.0 million for newly originated loans acquired during the year ended December 31, 2016 . (B) Represents consumer loan modifications considered to be troubled debt restructurings (“TDRs”) as they provide concessions to borrowers, primarily in the form of interest rate reductions, who are experiencing financial difficulty. As of December 31, 2016 , there are $5.3 million in UPB and $4.3 million in carrying value of consumer loans classified as TDRs. (C) Consumer loans, other than PCD loans, are charged off when available information confirms that loans are uncollectible, which is generally when they become 180 days past due. Charge-offs are presented net of $8.1 million in recoveries of previously charged-off UPB. |
Summary of Activities Related to the Carrying Value of Reverse Mortgage Loans and Performing Loans and PCD Loans Held-for-Investment | Activities related to the carrying value of PCD loans held-for-investment were as follows: Balance at December 31, 2014 $ — Purchases/additional fundings 289,664 Accretion of loan discount and other amortization 990 Balance at December 31, 2015 $ 290,654 Purchases/additional fundings 190,761 Sales — Proceeds from repayments (8,897 ) Accretion of loan discount and other amortization 8,295 Transfer of loans to real estate owned (7,583 ) Transfer of loans to held-for-sale (282,469 ) Balance at December 31, 2016 $ 190,761 Activities related to the carrying value of residential mortgage loans held-for-investment were as follows: Reverse Mortgage Loans Performing Loans Balance at December 31, 2014 $ 24,965 $ 22,873 Purchases/additional fundings 988 — Proceeds from repayments (687 ) (2,918 ) Accretion of loan discount and other amortization (A) 5,904 52 Provision for loan losses (35 ) (43 ) Transfer of loans to other assets (B) (11,574 ) — Transfer of loans to real estate owned (1 ) — Balance at December 31, 2015 $ 19,560 $ 19,964 Purchases/additional fundings 319 — Proceeds from repayments (1,352 ) (811 ) Accretion of loan discount (premium) and other amortization (A) 2,002 123 Provision for loan losses (73 ) (4 ) Transfer of loans to other assets (B) (4,203 ) — Sales (1,795 ) — Transfer of loans to held-for-sale (C) (14,458 ) (19,272 ) Balance at December 31, 2016 $ — $ — (A) Includes accelerated accretion of discount on loans paid in full and on loans transferred to other assets. (B) Represents loans for which foreclosure has been completed and for which New Residential has made, or intends to make, a claim with the governmental agency that has guaranteed the loans that are now recognized as claims receivable in Other Assets. (C) Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. |
Summary of Contractually Required Payments Receivable, Cash Flows Expected to be Collected, and Fair Value at Acquisition date for Loans Acquired During Period | The following is the contractually required payments receivable, cash flows expected to be collected, and fair value at acquisition date for PCD loans acquired during the year ended December 31, 2016 : Contractually Required Payments Receivable Cash Flows Expected to be Collected Fair Value As of Acquisition Date 337,374 214,449 190,343 |
Summary of Unpaid Principal Balance and Carrying Value for Loans Uncollectible | The following is the unpaid principal balance and carrying value for loans, for which, as of the acquisition date, it was probable that New Residential would be unable to collect all contractually required payments: Unpaid Principal Balance Carrying Value December 31, 2016 $ 203,673 $ 190,761 December 31, 2015 450,229 290,654 |
Summary of Changes in Accretable Yield | The following is a summary of the changes in accretable yield for these loans: Balance at December 31, 2014 $ — Additions 72,053 Accretion (990 ) Balance at December 31, 2015 $ 71,063 Additions 23,688 Accretion (8,876 ) Reclassifications from non-accretable difference (A) 29,569 Disposals (B) (2,680 ) Transfer of loans to held-for-sale (C) (89,076 ) Balance at December 31, 2016 $ 23,688 (A) Represents a probable and significant increase in cash flows previously expected to be uncollectible. (B) Includes sales of loans or foreclosures, which result in removal of the loan from the PCD loan pool at its carrying amount. (C) Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. |
Summary of Activities Related to the Carrying Value of Loans Held-for-sale | Activities related to the carrying value of loans held-for-sale were as follows: Balance at December 31, 2014 $ 1,126,439 Purchases (A) 1,695,124 Sales (1,871,054 ) Transfer of loans to other assets (B) (41,752 ) Transfer of loans to real estate owned (34,139 ) Adoption of ASU No. 2014-11 (C) 1,831 Proceeds from repayments (85,698 ) Valuation (provision) reversal on loans (D) (14,070 ) Balance at December 31, 2015 $ 776,681 Purchases (A) 1,196,018 Transfer of loans from held-for-investment (E) 316,199 Sales (1,274,707 ) Transfer of loans to other assets (B) (158,807 ) Transfer of loans to real estate owned (56,001 ) Proceeds from repayments (91,339 ) Valuation (provision) reversal on loans (D) (11,379 ) Balance at December 31, 2016 $ 696,665 (A) Represents loans acquired with the intent to sell, including loans acquired in the HLSS Acquisition (Note 1). (B) Represents loans for which foreclosure has been completed and for which New Residential has made, or intends to make, a claim with the governmental agency that has guaranteed the loans that are now recognized as claims receivable in Other Assets (Note 2). (C) Represents loans financed with the selling counterparty that were previously accounted for as linked transactions (Note 10). (D) Represents the fair value adjustments to loans upon transfer to held-for-sale and provision recorded on certain purchased held-for-sale loans, including $10.5 million , $2.6 million , $3.6 million , $13.8 million and $10.2 million of provision related to the call transactions executed in December 2015, March 2016, May 2016, November 2016 and December 2016, respectively. (E) Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. |
Schedule of Real Estate Owned | New Residential recognizes REO assets at the completion of the foreclosure process or upon execution of a deed in lieu of foreclosure with the borrower. REO assets are managed for prompt sale and disposition at the best possible economic value. Real Estate Owned Balance at December 31, 2014 $ 61,933 Purchases 26,208 Transfer of loans to real estate owned 35,322 Sales (68,441 ) Valuation provision on REO (4,448 ) Balance at December 31, 2015 $ 50,574 Purchases 11,283 Transfer of loans to real estate owned 81,940 Sales (66,880 ) Valuation provision on REO (17,326 ) Balance at December 31, 2016 $ 59,591 |
INVESTMENTS IN CONSUMER LOANS (
INVESTMENTS IN CONSUMER LOANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Preliminary Allocation of Total Consideration | New Residential has performed an allocation of the purchase price to HLSS’s assets and liabilities, as set forth below. Total Consideration ($ in millions) $ 1,491.2 Assets Cash and cash equivalents $ 51.4 Servicer advances, at fair value 5,096.7 Excess mortgage servicing rights, at fair value 917.1 Residential mortgage loans, held-for-sale (A) 416.8 Deferred tax asset (B) 195.1 Investment in HLSS Ltd. 44.9 Other assets (C) 402.4 Total Assets Acquired $ 7,124.4 Liabilities Notes and bonds payable 5,580.3 Accrued expenses and other liabilities (D)(E) 52.9 Total Liabilities Assumed $ 5,633.2 Net Assets $ 1,491.2 (A) Represents $424.3 million unpaid principal balance (“UPB”) of Government National Mortgage Association (“Ginnie Mae”) early buy-out (“EBO”) residential mortgage loans not subject to Accounting Standards Codification (“ASC”) No. 310-30 as the contractual cash flows are guaranteed by the Federal Housing Administration (“FHA”). (B) Due primarily to the difference between carryover historical tax basis and acquisition date fair value of one of HLSS’s first tier subsidiaries. (C) Includes restricted cash and receivables not subject to ASC No. 310-30 which New Residential has deemed fully collectible. (D) Includes liabilities which arose from contingencies regarding HLSS matters. (E) Contingencies for HLSS class action law suits had not been recognized at the acquisition date as the criteria in ASC No. 450 had not been met (Note 14). New Residential has performed an allocation of the purchase price to the Consumer Loan Companies’ assets and liabilities, as set forth below. Total Consideration ($ in millions) $ 237.5 Assets Consumer loans, held-for-investment $ 1,934.7 Cash and cash equivalents 0.3 Restricted cash 74.6 Other assets 35.9 Total Assets Acquired 2,045.5 Liabilities Notes and bonds payable $ 1,803.2 Accrued expenses and other liabilities 4.8 Total Liabilities Assumed 1,808.0 Net Assets $ 237.5 |
Summary of Unaudited Pro Forma Combined Interest Income and Income Before Income Taxes | Unaudited Supplemental Pro Forma Financial Information - The following table presents unaudited pro forma combined Interest Income and Income Before Income Taxes for the years ended December 31, 2015 and 2014 prepared as if the HLSS Acquisition had been consummated on January 1, 2014. Year Ended December 31, 2015 2014 (unaudited) (unaudited) Pro Forma Interest Income $ 731,660 $ 744,363 Income Before Income Taxes 322,365 647,058 The following table presents unaudited pro forma combined Interest Income and Income Before Income Taxes for the years ended December 31, 2016 and 2015 prepared as if the SpringCastle Transaction had been consummated on January 1, 2015. Year Ended December 31, 2016 2015 (unaudited) (unaudited) Pro Forma Interest Income $ 1,163,648 $ 1,030,522 Income Before Income Taxes 581,925 466,915 Noncontrolling Interests in Income of Consolidated Subsidiaries 96,852 92,413 |
Schedule of Investments in Consumer Loan Equity Method Investees | The following table summarizes the investment in consumer loans, held-for-investment held by New Residential: Unpaid Principal Balance (A) Interest in Consumer Loans Carrying Value Weighted Average Coupon Weighted Average Expected Life (Years) (B) Weighted Average Delinquency (C) December 31, 2016 Consumer Loan Companies Performing Loans $ 1,275,121 53.5 % $ 1,321,825 18.7 % 4.2 6.3 % Purchased Credit Deteriorated Loans (D) 371,261 53.5 % 316,532 16.6 % 3.6 14.0 % Other - Performing Loans 163,570 100.0 % 161,129 14.2 % 1.5 0.3 % Total Consumer Loans, held-for-investment $ 1,809,952 $ 1,799,486 17.9 % 3.8 7.3 % December 31, 2015 (E) Consumer Loan Companies Total Consumer Loans, held-for-investment $ 2,094,904 30.0 % $ 1,698,130 18.2 % 4.4 7.2 % (A) Represents the balances as of December 31, 2016 and November 30, 2015, respectively. (B) Represents the weighted average expected timing of the receipt of expected cash flows for this investment. (C) Represents the percentage of the total unpaid principal balance that is 30+ days delinquent. Delinquency status is the primary credit quality indicator as it provides early warning of borrowers who may be experiencing financial difficulties. (D) Includes loans with evidence of credit deterioration since origination where it is probable that New Residential will not collect all contractually required principal and interest payments, which are accounted for as PCD loans. (E) Held through an equity method investee, which had a carrying value of zero, at such time. |
Past Due Financing Receivables | The following table provides past due information regarding New Residential’s performing consumer loans, held-for-investment, which is an important indicator of credit quality and the establishment of the allowance for loan losses: December 31, 2016 Days Past Due Delinquency Status (A) Current 94.3 % 30-59 2.3 % 60-89 1.2 % 90-119 (B) 0.8 % 120+ (B) (C) 1.4 % 100.0 % (A) Represents the percentage of the total unpaid principal balance that corresponds to loans that are in each delinquency status. (B) Includes loans more than 90 days past due and still accruing interest. (C) Interest is accrued up to the date of charge-off at 180 days past due. |
Schedule of Carrying Value of Performing Consumer Loans | Activities related to the carrying value of performing consumer loans, held-for-investment were as follows: Performing Loans Balance at December 31, 2015 $ — SpringCastle Transaction 1,539,569 Purchases 176,107 Additional fundings (A) 49,289 Proceeds from repayments (239,236 ) Accretion of loan discount and premium amortization, net 7,728 Net charge-offs (47,065 ) Allowance for loan losses (3,438 ) Balance at December 31, 2016 $ 1,482,954 (A) Represents draws on consumer loans with revolving privileges. |
Allowance for Credit Losses on Financing Receivables | Activities related to the valuation provision on reverse mortgage loans and allowance for loan losses on performing loans held-for-investment were as follows: Reverse Mortgage Loans Performing Loans Balance at December 31, 2014 $ 1,518 $ 1,447 Provision for loan losses (A) 35 43 Charge-offs (B) — (1,371 ) Balance at December 31, 2015 $ 1,553 $ 119 Provision for loan losses (A) 73 4 Charge-offs (B) — — Sales (171 ) — Transfer of loans to held-for-sale (C) (1,455 ) (123 ) Balance at December 31, 2016 $ — $ — (A) Based on an analysis of collective borrower performance, credit ratings of borrowers, loan-to-value ratios, estimated value of the underlying collateral, key terms of the loans and historical and anticipated trends in defaults and loss severities at a pool level. (B) Loans, other than PCD loans, are generally charged off or charged down to the net realizable value of the collateral (i.e., fair value less costs to sell), with an offset to the allowance for loan losses, when available information confirms that loans are uncollectible. (C) Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. Activities related to the allowance for loan losses on performing consumer loans, held-for-investment were as follows: Collectively Evaluated (A) Individually Impaired (B) Total Balance at March 31, 2016 (date of SpringCastle Transaction) $ — $ — $ — Provision for loan losses 49,506 997 50,503 Net charge-offs (C) (47,065 ) — (47,065 ) Balance at December 31, 2016 $ 2,441 $ 997 $ 3,438 (A) Represents smaller-balance homogeneous loans that are not individually considered impaired and are evaluated based on an analysis of collective borrower performance, key terms of the loans and historical and anticipated trends in defaults and loss severities, and consideration of the unamortized acquisition discount. Includes a provision for loan losses of $2.0 million for newly originated loans acquired during the year ended December 31, 2016 . (B) Represents consumer loan modifications considered to be troubled debt restructurings (“TDRs”) as they provide concessions to borrowers, primarily in the form of interest rate reductions, who are experiencing financial difficulty. As of December 31, 2016 , there are $5.3 million in UPB and $4.3 million in carrying value of consumer loans classified as TDRs. (C) Consumer loans, other than PCD loans, are charged off when available information confirms that loans are uncollectible, which is generally when they become 180 days past due. Charge-offs are presented net of $8.1 million in recoveries of previously charged-off UPB. |
Schedule of Carrying Value of Purchased Credit Deteriorated Loans | A portion of the consumer loans are considered PCD loans. Activities related to the carrying value of PCD consumer loans, held-for-investment were as follows: Balance at December 31, 2015 $ — SpringCastle Transaction 395,129 Allowance for Loan Losses (A) (3,013 ) Proceeds from repayments (112,222 ) Accretion of loan discount and other amortization 36,638 Balance at December 31, 2016 $ 316,532 (A) Represents the present value of cash flows expected at acquisition that are no longer expected to be collected. |
Impaired Financing Receivables | The following is the unpaid principal balance and carrying value for consumer loans, for which, as of the acquisition date, it was probable that New Residential would be unable to collect all contractually required payments: Unpaid Principal Balance Carrying Value December 31, 2016 $ 371,261 $ 316,532 March 31, 2016 (date of SpringCastle Transaction) 450,611 395,129 |
Schedule of Changes in Accretable Yield | The following is a summary of the changes in accretable yield for these loans: Balance at December 31, 2015 $ — SpringCastle Transaction 176,387 Accretion (36,638 ) Reclassifications from non-accretable difference (A) 28,179 Balance at December 31, 2016 $ 167,928 (A) Represents a probable and significant increase in cash flows previously expected to be uncollectible. |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net | Others’ interests in the equity of the Consumer Loan Companies is computed as follows at December 31, 2016 : Total Consumer Loan Companies equity $ 75,311 Others’ ownership interest 46.5 % Others’ interests in equity of consolidated subsidiary $ 35,020 Others’ interests in the Consumer Loan Companies’ net income (loss) is computed as follows for the year ended December 31, 2016 : Net Consumer Loan Companies income (loss) $ 81,992 Others’ ownership interest as a percent of total 46.5 % Others’ interest in net income (loss) of consolidated subsidiaries $ 38,127 |
Schedule of Variable Interest Entities | The following table presents information on the combined assets and liabilities related to these consolidated VIEs. As of December 31, 2016 Assets Consumer loans, held-for-investment $ 1,638,357 Restricted cash 13,393 Accrued interest receivable 24,528 Total assets (A) $ 1,676,278 Liabilities Notes and bonds payable $ 1,648,488 Accounts payable and accrued expenses 951 Total liabilities (A) $ 1,649,439 (A) The creditors of the Consumer Loan SPVs do not have recourse to the general credit of New Residential, and the assets of the Consumer Loan SPVs are not directly available to satisfy New Residential’s obligations. |
Summary of the Investment in the Consumer Loan Companies | The following tables summarize the equity method investment in the Consumer Loan Companies held by New Residential prior to their consolidation: December 31, 2015 Consumer Loan Assets (amortized cost basis) $ 1,698,130 Other Assets 70,469 Debt (1,912,267 ) Other Liabilities (5,640 ) Equity $ (149,308 ) New Residential’s investment $ — New Residential’s ownership 30.0 % First Quarter Year Ended December 31, 2016 2015 2014 Interest income $ 100,131 $ 455,479 $ 534,990 Interest expense (19,654 ) (87,000 ) (81,706 ) Provision for finance receivable losses (14,043 ) (67,935 ) (104,921 ) Other expenses, net (13,239 ) (60,263 ) (74,781 ) Change in fair value of debt — — (14,810 ) Loss on extinguishment of debt — — (21,151 ) Net income $ 53,195 $ 240,281 $ 237,621 New Residential’s equity in net income through October 3, 2014 $ — $ — $ 53,840 New Residential’s ownership 30.0 % 30.0 % 30.0 % Tax withholding payments on behalf of New Residential, treated as non-cash distributions $ 25 $ 585 $ 609 Distributions in excess of basis, treated as gains, excluding tax withholding payments $ 9,918 $ 43,369 $ 91,411 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives | New Residential’s derivatives are recorded at fair value on the Consolidated Balance Sheets as follows: December 31, Balance Sheet Location 2016 2015 Derivative assets Interest Rate Caps Other assets $ 4,251 $ 2,689 TBAs Other assets 2,511 — $ 6,762 $ 2,689 Derivative liabilities TBAs Accrued expenses and other liabilities $ — $ 2,058 Interest Rate Swaps Accrued expenses and other liabilities 3,021 11,385 $ 3,021 $ 13,443 The following table summarizes notional amounts related to derivatives: December 31, 2016 2015 TBAs, short position (A) $ 3,465,500 $ 1,450,000 TBAs, long position (A) 2,125,552 750,000 Interest Rate Caps (B) 1,185,000 3,400,000 Interest Rate Swaps, short positions (C) 3,640,000 2,444,000 (A) Represents the notional amount of Agency RMBS, classified as derivatives. (B) Caps LIBOR at 0.50% for $550.0 million of notional, at 0.75% for $300.0 million of notional, at 2.00% for $185.0 million of notional, and at 4.00% for $150.0 million of notional. The weighted average maturity of the interest rate caps as of December 31, 2016 was 18 months. (C) Receive LIBOR and pay a fixed rate. The weighted average maturity of the interest rate swaps as of December 31, 2016 was 22 months and the weighted average fixed pay rate was 1.35% . The following table summarizes all income (losses) recorded in relation to derivatives: Year Ended December 31, 2016 2015 2014 Other income (loss), net (A) Non-Performing Loans (B) $ — $ — $ (1,149 ) Real Estate Securities (B) — — 2,336 TBAs (414 ) (2,058 ) (4,985 ) Interest Rate Caps 688 (1,749 ) (4 ) Interest Rate Swaps 5,500 269 (5,045 ) 5,774 (3,538 ) (8,847 ) Gain (loss) on settlement of investments, net Non-Performing Loans (B) — — 5,609 Real Estate Securities (B) — — 43 TBAs (17,927 ) (27,142 ) (33,638 ) Interest Rate Caps (4,754 ) (1,180 ) — Interest Rate Swaps (4,810 ) (18,660 ) (12,590 ) U.S.T. Short Positions — — 176 (27,491 ) (46,982 ) (40,400 ) Total income (losses) $ (21,717 ) $ (50,520 ) $ (49,247 ) (A) Represents unrealized gains (losses). (B) Prior to December 31, 2014, investments purchased from, and financed by, the selling counterparty that New Residential accounted for as linked transactions were reflected as derivatives. Upon the adoption of ASU No. 2014-11 on January 1, 2015, these transactions are accounted for as secured borrowings. |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | Activities related to the carrying value of New Residential’s debt obligations were as follows: Excess MSRs Servicer Advances (A) Real Estate Securities Residential Mortgage Loans and REO Consumer Loans Total Balance at December 31, 2014 (B) $ — $ 2,885,784 $ 2,246,651 $ 925,418 $ — $ 6,057,853 Repurchase Agreements: Borrowings — — 7,649,261 1,915,056 43,158 9,607,475 Modified retrospective adjustment for the adoption of ASU No. 2014-11 (Note 2) — — 84,649 1,306 — 85,955 Repayments — — (6,963,404 ) (1,832,462 ) (2,712 ) (8,798,578 ) Adoption of ASU No. 2015-03 (Note 2) — — — (888 ) — (888 ) Notes and Bonds Payable: Borrowings 852,419 10,780,237 — 1,632 — 11,634,288 Repayments (669,406 ) (6,612,372 ) — (5,082 ) — (7,286,860 ) Adoption of ASU No. 2015-03 (Note 2) (35 ) (6,588 ) — — — (6,623 ) Balance at December 31, 2015 $ 182,978 $ 7,047,061 $ 3,017,157 $ 1,004,980 $ 40,446 $ 11,292,622 Repurchase Agreements: Borrowings — — 30,441,880 552,459 21,458 31,015,797 Repayments — — (29,040,035 ) (764,113 ) (61,904 ) (29,866,052 ) Capitalized deferred financing costs, net of amortization — — — (2,169 ) — (2,169 ) Notes and Bonds Payable: Acquired borrowings, net of discount — — — — 1,803,192 1,803,192 Borrowings 1,141,996 6,857,006 — — 1,789,706 9,788,708 Repayments (592,175 ) (8,354,692 ) — (8,151 ) (1,888,714 ) (10,843,732 ) Discount on borrowings, net of amortization 1,420 — — — (3,374 ) (1,954 ) Capitalized deferred financing costs, net of amortization (5,074 ) 497 — — (599 ) (5,176 ) Balance at December 31, 2016 $ 729,145 $ 5,549,872 $ 4,419,002 $ 783,006 $ 1,700,211 $ 13,181,236 (A) New Residential net settles daily borrowings and repayments of the Notes and Bonds Payable on its Servicer Advances. (B) Excludes debt related to linked transactions (Note 10). The following table presents certain information regarding New Residential’s debt obligations: December 31, 2016 December 31, 2015 Collateral Debt Obligations/Collateral Month Issued Outstanding Face Amount Carrying Value (A) Final Stated Maturity (B) Weighted Average Funding Cost Weighted Average Life (Years) Outstanding Face Amortized Cost Basis Carrying Value Weighted Average Life (Years) Carrying Value (A) Repurchase Agreements (C) Agency RMBS (D) Various $ 1,764,760 $ 1,764,760 Jan-17 to Mar-17 1.00 % 0.2 $ 1,786,585 $ 1,874,554 $ 1,833,348 0.4 $ 1,683,305 Non-Agency RMBS (E) Various 2,654,242 2,654,242 Jan-17 to Mar-17 2.42 % 0.1 6,510,127 3,358,438 3,481,478 7.9 1,333,852 Residential Mortgage Loans (F) Various 689,132 686,412 Mar-17 to Sep-18 3.31 % 0.7 1,061,445 869,297 852,790 3.4 907,993 Real Estate Owned (G) (H) Various 85,552 85,217 Mar-17 to Sep-18 3.35 % 0.3 N/A N/A 98,496 N/A 77,458 Consumer Loan Investment Apr-15 — — N/A — % — N/A N/A N/A — 40,446 Total Repurchase Agreements 5,193,686 5,190,631 2.07 % 0.2 4,043,054 Notes and Bonds Payable Secured Corporate Notes (I) Various 734,254 729,145 Apr-18 to Sep-19 5.50 % 2.2 310,072,544 1,271,217 1,437,226 6.2 182,978 Servicer Advances (J) Various 5,560,412 5,549,872 Mar-17 to Dec-21 3.19 % 2.7 5,617,759 5,687,635 5,706,593 4.6 7,047,061 Residential Mortgage Loans (K) Oct-15 8,271 8,271 Oct-17 3.44 % 0.8 13,248 7,514 7,514 4.5 19,529 Consumer Loans (L) (M) Various 1,709,054 1,700,211 Sep-19 to Mar-24 3.48 % 3.9 1,809,952 1,802,809 1,799,372 3.8 — Receivable from government agency (K) Oct-15 3,106 3,106 Oct-17 3.44 % 0.8 N/A N/A 3,378 N/A — Total Notes and Bonds Payable 8,015,097 7,990,605 3.46 % 2.9 7,249,568 Total/Weighted Average $ 13,208,783 $ 13,181,236 2.91 % 1.8 $ 11,292,622 (A) Net of deferred financing costs. (B) All debt obligations with a stated maturity of January or February 2017 were refinanced, extended or repaid. (C) These repurchase agreements had approximately $11.0 million of associated accrued interest payable as of December 31, 2016 . (D) All of the Agency RMBS repurchase agreements have a fixed rate. Collateral amounts include approximately $1.7 billion of related trade and other receivables. (E) All of the Non-Agency RMBS repurchase agreements have LIBOR-based floating interest rates. This includes repurchase agreements of $125.8 million on retained servicer advance and consumer loan bonds. (F) All of these repurchase agreements have LIBOR-based floating interest rates. (G) All of these repurchase agreements have LIBOR-based floating interest rates. (H) Includes financing collateralized by receivables including claims from FHA on Ginnie Mae EBO loans for which foreclosure has been completed and for which New Residential has made or intends to make a claim on the FHA guarantee. (I) Includes $410.0 million of corporate loans which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of 4.75% , and a $324.3 million corporate loan which bears interest equal to 5.68% . The outstanding face amount of the collateral represents the UPB of the residential mortgage loans underlying Excess MSRs that secure these notes, and the $324.3 million corporate loan is also collateralized by the rights to the related basic fee portion of the MSRs. (J) $3.5 billion face amount of the notes have a fixed rate while the remaining notes bear interest equal to the sum of (i) a floating rate index rate equal to one-month LIBOR or a cost of funds rate, as applicable, and (ii) a margin ranging from 1.9% to 2.1% . (K) The note is payable to Nationstar and bears interest equal to one-month LIBOR plus 2.88% . (L) Includes the SpringCastle debt, which is comprised of the following classes of asset-backed notes held by third parties: $1.29 billion UPB of Class A notes with a coupon of 3.05% and a stated maturity date in November 2023; $211.0 million UPB of Class B notes with a coupon of 4.10% and a stated maturity date in March 2024; $39.0 million UPB of Class C-1 notes with a coupon of 5.63% and a stated maturity date in March 2024; $39.0 million UPB of Class C-2 notes with a coupon of 5.63% and a stated maturity date in March 2024; $39.0 million UPB of Class D-1 notes with a coupon of 5.80% and a stated maturity date in March 2024; and $39.0 million UPB of Class D-2 notes with a coupon of 5.80% and a stated maturity date in March 2024. (M) Includes a $132.2 million face amount note collateralized by newly originated consumer loans which bears interest equal to one-month LIBOR plus 3.25% . |
Schedule of Contractual Maturities of Debt Obligations | New Residential’s debt obligations as of December 31, 2016 had contractual maturities as follows: Year Nonrecourse Recourse Total 2017 $ 697,437 $ 5,145,175 $ 5,842,612 2018 1,160,179 228,520 1,388,699 2019 2,759,841 514,254 3,274,095 2020 376,246 — 376,246 2021 and thereafter 2,327,131 — 2,327,131 $ 7,320,834 $ 5,887,949 $ 13,208,783 |
Schedule of Borrowing Capacity | The following table represents New Residential’s borrowing capacity as of December 31, 2016 : Debt Obligations/ Collateral Collateral Type Borrowing Capacity Balance Outstanding Available Financing Repurchase Agreements Residential Mortgage Loans Residential Mortgage Loans and REO $ 2,260,000 $ 774,684 $ 1,485,316 Notes and Bonds Payable Secured Corporate Loan Excess MSRs 525,000 410,000 115,000 Servicer Advances (A) Servicer Advances 6,577,393 5,560,412 1,016,981 Consumer Loans Consumer Loans 150,000 132,168 17,832 $ 9,512,393 $ 6,877,264 $ 2,635,129 (A) New Residential’s unused borrowing capacity is available if New Residential has additional eligible collateral to pledge and meets other borrowing conditions as set forth in the applicable agreements, including any applicable advance rate. New Residential pays a 0.1% fee on the unused borrowing capacity. Excludes borrowing capacity and outstanding debt for retained Non-Agency bonds with a current face amount of $94.4 million . |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Fair Values of Financial Assets and Liabilities Recorded at Fair Value on a Recurring Basis | The carrying values and fair values of New Residential’s assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments for which fair value is disclosed, as of December 31, 2016 were as follows: Fair Value Principal Balance or Notional Amount Carrying Value Level 1 Level 2 Level 3 Total Assets: Investments in: Excess mortgage servicing rights, at fair value (A) $ 277,975,997 $ 1,399,455 $ — $ — $ 1,399,455 $ 1,399,455 Excess mortgage servicing rights, equity method investees, at fair value (A) 60,677,300 194,788 — — 194,788 194,788 Mortgage servicing rights, at fair value (A) 79,935,302 659,483 — — 659,483 659,483 Servicer advances, at fair value 5,617,759 5,706,593 — — 5,706,593 5,706,593 Real estate securities, available-for-sale 8,788,957 5,073,858 — 1,530,298 3,543,560 5,073,858 Residential mortgage loans, held-for-investment 203,673 190,761 — — 190,343 190,343 Residential mortgage loans, held-for-sale 908,930 696,665 — — 717,985 717,985 Consumer loans, held-for-investment 1,809,952 1,799,486 — — 1,819,106 1,819,106 Derivative assets 6,776,052 6,762 — 6,762 — 6,762 Cash and cash equivalents 290,602 290,602 290,602 — — 290,602 Restricted cash 163,095 163,095 163,095 — — 163,095 Other assets 888,412 4,856 — — 4,856 4,856 $ 16,186,404 $ 453,697 $ 1,537,060 $ 14,236,169 $ 16,226,926 Liabilities: Repurchase agreements $ 5,193,686 $ 5,190,631 $ — $ 5,193,686 $ — $ 5,193,686 Notes and bonds payable 8,015,097 7,990,605 — — 7,993,326 7,993,326 Derivative liabilities 3,640,000 3,021 — 3,021 — 3,021 $ 13,184,257 $ — $ 5,196,707 $ 7,993,326 $ 13,190,033 (A) The notional amount represents the total unpaid principal balance of the residential mortgage loans underlying the MSRs and Excess MSRs. New Residential does not receive an excess mortgage servicing amount on non-performing loans in Agency portfolios. The carrying values and fair values of New Residential’s assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments for which fair value is disclosed, as of December 31, 2015 were as follows: Fair Value Principal Balance or Notional Amount Carrying Value Level 1 Level 2 Level 3 Total Assets Investments in: Excess mortgage servicing rights, at fair value (A) $ 329,367,971 $ 1,581,517 $ — $ — $ 1,581,517 $ 1,581,517 Excess mortgage servicing rights, equity method investees, at fair value (A) 73,058,050 217,221 — — 217,221 217,221 Servicer advances, at fair value 7,578,110 7,426,794 — — 7,426,794 7,426,794 Real estate securities, available-for-sale 4,418,552 2,501,881 — 917,598 1,584,283 2,501,881 Residential mortgage loans, held-for-investment 506,135 330,178 — — 330,433 330,433 Residential mortgage loans, held-for-sale 859,714 776,681 — — 784,750 784,750 Derivative assets 3,400,000 2,689 — 2,689 — 2,689 Cash and cash equivalents 249,936 249,936 249,936 — — 249,936 Restricted cash 94,702 94,702 94,702 — — 94,702 $ 13,181,599 $ 344,638 $ 920,287 $ 11,924,998 $ 13,189,923 Liabilities Repurchase agreements $ 4,043,942 $ 4,043,054 $ — $ 4,043,942 $ — $ 4,043,942 Notes and bonds payable 7,262,056 7,249,568 — — 7,260,909 7,260,909 Derivative liabilities 4,644,000 13,443 — 13,443 — 13,443 $ 11,306,065 $ — $ 4,057,385 $ 7,260,909 $ 11,318,294 (A) The notional amount represents the total unpaid principal balance of the residential mortgage loans underlying the Excess MSRs. New Residential does not receive an excess mortgage servicing amount on non-performing loans in Agency portfolios. |
Schedule of Financial Assets Measured at Fair Value on a Recurring Basis using Level 3 Inputs | New Residential’s assets measured at fair value on a recurring basis using Level 3 inputs changed as follows: Level 3 Excess MSRs (A) Excess MSRs in Equity Method Investees (A)(B) Agency Non-Agency MSRs (A) Servicer Advances Non-Agency RMBS Total Balance at December 31, 2014 $ 217,519 $ 200,214 $ 330,876 $ — $ 3,270,839 $ 723,000 $ 4,742,448 Transfers (C) Transfers from Level 3 — — — — — — — Transfers to Level 3 — — — — — — — Transfers from investments in excess mortgage servicing rights, equity method investees, to investments in excess mortgage servicing rights — 98,258 (98,258 ) — — — — Gains (losses) included in net income Included in other-than-temporary impairment on securities (D) — — — — — (5,788 ) (5,788 ) Included in change in fair value of investments in excess mortgage servicing rights (D) (3,080 ) 41,723 — — — — 38,643 Included in change in fair value of investments in excess mortgage servicing rights, equity method investees (D) — — 31,160 — — — 31,160 Included in change in fair value of investments in servicer advances — — — — (57,491 ) — (57,491 ) Included in gain (loss) on settlement of investments, net — — — — — 3,061 3,061 Included in other income (loss), net (D) 2,852 147 — — — 879 3,878 Gains (losses) included in other comprehensive income (E) — — — — — (6,701 ) (6,701 ) Interest income 30,742 103,823 — — 352,316 69,632 556,513 Purchases, sales, repayments and transfers Purchases 254,149 917,078 — — 20,042,582 1,288,901 22,502,710 Proceeds from sales — — — — — (425,761 ) (425,761 ) Proceeds from repayments (64,981 ) (216,927 ) (46,557 ) — (16,181,452 ) (179,772 ) (16,689,689 ) Other transfers — — — — — 116,832 116,832 Balance at December 31, 2015 $ 437,201 $ 1,144,316 $ 217,221 $ — $ 7,426,794 $ 1,584,283 $ 10,809,815 Transfers (C) Transfers from Level 3 — — — — — — Transfers to Level 3 — — — — — — Gains (losses) included in net income Included in other-than-temporary impairment on securities (D) — — — — — (10,264 ) (10,264 ) Included in change in fair value of investments in excess mortgage servicing rights (D) (5,372 ) (1,925 ) — — — — (7,297 ) Included in change in fair value of investments in excess mortgage servicing rights, equity method investees (D) — — 16,526 — — — 16,526 Included in servicing revenue, net (F) 88,325 88,325 Included in change in fair value of investments in servicer advances — — — — (7,768 ) — (7,768 ) Included in gain (loss) on settlement of investments, net — — — — — (18,117 ) (18,117 ) Included in other income (loss), net (D) 2,452 350 — — — (4,875 ) (2,073 ) Gains (losses) included in other comprehensive income (E) — — — — — 124,669 124,669 Interest income 35,526 114,615 — — 364,350 209,706 724,197 Purchases, sales and repayments Purchases — 124 — 571,158 15,266,816 2,746,409 18,584,507 Proceeds from sales — — — — — (261,192 ) (261,192 ) Proceeds from repayments (88,050 ) (239,782 ) (38,959 ) — (17,343,599 ) (827,059 ) (18,537,449 ) Balance at December 31, 2016 $ 381,757 $ 1,017,698 $ 194,788 $ 659,483 $ 5,706,593 $ 3,543,560 $ 11,503,879 (A) Includes the recapture agreement for each respective pool. (B) Amounts represent New Residential’s portion of the Excess MSRs held by the respective joint ventures in which New Residential has a 50% interest. (C) Transfers are assumed to occur at the beginning of the respective period. (D) The gains (losses) recorded in earnings during the period are attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting dates and realized gains (losses) recorded during the period. (E) These gains (losses) were included in net unrealized gain (loss) on securities in the Consolidated Statements of Comprehensive Income. (F) The components of Servicing revenue, net are disclosed in Note 5. |
Summary of Certain Information Regarding Weighted Average Inputs used in Valuing Excess MSRs Owned Directly and through Equity Method Investees | The following tables summarize certain information regarding the weighted average inputs used in valuing the Excess MSRs, owned directly and through equity method investees: December 31, 2016 Significant Inputs (A) Prepayment Rate (B) Delinquency (C) Recapture Rate (D) Mortgage Servicing Amount (E) Collateral Weighted Average Maturity Years (F) Excess MSRs Directly Held (Note 4) Agency Original Pools 10.1 % 3.2 % 32.6 % 21 24 Recaptured Pools 7.4 % 4.3 % 23.0 % 21 25 Recapture Agreement 7.4 % 5.0 % 20.0 % 22 — 9.3 % 3.6 % 29.5 % 21 24 Non-Agency (G) Nationstar and SLS Serviced: Original Pools 11.8 % N/A 10.7 % 14 24 Recaptured Pools 7.9 % N/A 20.0 % 21 24 Recapture Agreement 7.5 % N/A 20.0 % 20 — Ocwen Serviced Pools 8.8 % N/A — % 14 26 9.4 % N/A 2.7 % 14 26 Total/Weighted Average--Excess MSRs Directly Held 9.4 % 3.6 % 10.0 % 16 26 Excess MSRs Held through Equity Method Investees (Note 4) Agency Original Pools 11.8 % 5.2 % 35.0 % 19 23 Recaptured Pools 7.3 % 4.5 % 24.7 % 23 25 Recapture Agreement 7.3 % 5.0 % 20.0 % 23 — Total/Weighted Average--Excess MSRs Held through Investees 9.8 % 5.0 % 29.8 % 21 24 Total/Weighted Average--Excess MSRs All Pools 9.5 % 3.9 % 14.2 % 17 26 MSRs Agency Ditech subserviced pools 12.7 % 3.2 % 29.1 % 26 23 FirstKey subserviced pools (H) 11.2 % 0.5 % 19.6 % 26 24 Total/Weighted Average--MSRs 12.4 % 2.8 % 27.5 % 26 23 December 31, 2015 Significant Inputs (A) Prepayment Rate (B) Delinquency (C) Recapture Rate (D) Excess Mortgage Servicing Amount (E) Collateral Weighted Average Maturity Years (F) Excess MSRs Directly Held (Note 4) Agency Original Pools 10.7 % 3.5 % 29.5 % 21 24 Recaptured Pools 7.5 % 4.9 % 20.0 % 20 25 Recapture Agreement 7.6 % 4.9 % 20.0 % 22 — 10.0 % 3.8 % 27.4 % 21 24 Non-Agency (G) Nationstar and SLS Serviced: Original Pools 12.5 % N/A 10.2 % 14 24 Recaptured Pools 7.5 % N/A 20.0 % 20 25 Recapture Agreement 7.5 % N/A 20.0 % 20 — Ocwen Serviced Pools 9.3 % N/A — % 14 26 10.0 % N/A 2.6 % 14 26 Total/Weighted Average--Excess MSRs Directly Held 10.0 % 3.8 % 9.5 % 16 25 Excess MSRs Held through Equity Method Investees (Note 4) Agency Original Pools 12.6 % 5.9 % 34.3 % 19 24 Recaptured Pools 7.7 % 5.0 % 20.0 % 23 25 Recapture Agreement 7.7 % 4.9 % 20.0 % 23 — Total/Weighted Average--Excess MSRs Held through Investees 10.8 % 5.6 % 29.0 % 20 24 Total/Weighted Average--Excess MSRs All Pools 10.2 % 4.2 % 13.6 % 17 25 (A) Weighted by fair value of the portfolio. (B) Projected annualized weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector. (C) Projected percentage of residential mortgage loans in the pool for which the borrower will miss its mortgage payments. (D) Percentage of voluntarily prepaid loans that are expected to be refinanced by the related servicer or subservicer, as applicable. (E) Weighted average total mortgage servicing amount, in excess of the basic fee as applicable, measured in basis points (bps). (F) Weighted average maturity of the underlying residential mortgage loans in the pool. (G) For certain pools, the Excess MSR will be paid on the total UPB of the mortgage portfolio (including both performing and delinquent loans until REO). For these pools, no delinquency assumption is used. (H) Recapture rate represents the expected recapture rate with the successor subservicer appointed by NRM. |
Summary of Certain Information Regarding the Inputs used in Valuing the Servicer Advances | The following table summarizes certain information regarding the inputs used in valuing the Servicer Advances: Significant Inputs Weighted Average Outstanding Servicer Advances to UPB of Underlying Residential Mortgage Loans Prepayment Rate (A) Delinquency Mortgage Servicing Amount (B) Discount Rate Collateral Weighted Average Maturity (Years) (C) December 31, 2016 2.1 % 9.8 % 14.9 % 8.3 bps 5.6 % 24.8 December 31, 2015 2.3 % 10.4 % 17.5 % 9.2 bps 5.6 % 24.5 (A) Projected annual weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector. (B) Mortgage servicing amount excludes the amounts New Residential pays its servicers as a monthly servicing fee. (C) Weighted average maturity of the underlying residential mortgage loans in the pool. |
Schedule of Securities Valuation Methodology and Results | New Residential’s securities valuation methodology and results are further detailed as follows: Fair Value Asset Type Outstanding Face Amount Amortized Cost Basis Multiple Quotes (A) Single Quote (B) Total Level December 31, 2016 Agency RMBS $ 1,486,739 $ 1,532,421 $ 1,530,298 $ — $ 1,530,298 2 Non-Agency RMBS (C) 7,302,218 3,415,906 3,028,094 515,466 3,543,560 3 Total $ 8,788,957 $ 4,948,327 $ 4,558,392 $ 515,466 $ 5,073,858 December 31, 2015 Agency RMBS $ 884,578 $ 918,633 $ 917,598 $ — $ 917,598 2 Non-Agency RMBS (C) 3,533,974 1,579,445 1,029,981 554,302 1,584,283 3 Total $ 4,418,552 $ 2,498,078 $ 1,947,579 $ 554,302 $ 2,501,881 (A) New Residential generally obtained pricing service quotations or broker quotations from two sources, one of which was generally the seller (the party that sold New Residential the security) for Non-Agency RMBS. New Residential evaluates quotes received and determines one as being most representative of fair value, and does not use an average of the quotes. Even if New Residential receives two or more quotes on a particular security that come from non-selling brokers or pricing services, it does not use an average because it believes using an actual quote more closely represents a transactable price for the security than an average level. Furthermore, in some cases there is a wide disparity between the quotes New Residential receives. New Residential believes using an average of the quotes in these cases would not represent the fair value of the asset. Based on New Residential’s own fair value analysis, it selects one of the quotes which is believed to more accurately reflect fair value. New Residential has not adjusted any of the quotes received in the periods presented. These quotations are generally received via email and contain disclaimers which state that they are “indicative” and not “actionable” — meaning that the party giving the quotation is not bound to actually purchase the security at the quoted price. New Residential’s investments in Agency RMBS are classified within Level 2 of the fair value hierarchy because the market for these securities is very active and market prices are readily observable. The third-party pricing services and brokers engaged by New Residential (collectively, “valuation providers”) use either the income approach or the market approach, or a combination of the two, in arriving at their estimated valuations of RMBS. Valuation providers using the market approach generally look at prices and other relevant information generated by market transactions involving identical or comparable assets. Valuation providers using the income approach create pricing models that generally incorporate such assumptions as discount rates, expected prepayment rates, expected default rates and expected loss severities. New Residential has reviewed the methodologies utilized by its valuation providers and has found them to be consistent with GAAP requirements. In addition to obtaining multiple quotations, when available, and reviewing the valuation methodologies of its valuation providers, New Residential creates its own internal pricing models for Level 3 securities and uses the outputs of these models as part of its process of evaluating the fair value estimates it receives from its valuation providers. These models incorporate the same types of assumptions as the models used by the valuation providers, but the assumptions are developed independently. These assumptions are regularly refined and updated at least quarterly by New Residential, and reviewed by its valuation group, which is separate from its investment acquisition and management group, to reflect market developments and actual performance. For 77.1% of New Residential’s Non-Agency RMBS, the ranges of assumptions used by New Residential’s valuation providers are summarized in the table below. The assumptions used by New Residential’s valuation providers with respect to the remainder of New Residential’s Non-Agency RMBS were not readily available. Fair Value Discount Rate Prepayment Rate (a) CDR (b) Loss Severity (c) Non-Agency RMBS $ 2,731,218 2.06% to 32.75% 0.25% to 20% 0.25% to 10.0% 5.0% to 100% (a) Represents the annualized rate of the prepayments as a percentage of the total principal balance of the pool. (b) Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance of the pool. (c) Represents the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding balance. (B) New Residential was unable to obtain quotations from more than one source on these securities. For approximately $509.6 million in 2016 and $228.5 million in 2015 , the one source was the party that sold New Residential the security. (C) Includes New Residential’s investments in interest-only notes for which the fair value option for financial instruments was elected. |
Schedule of Inputs Used in Valuing Residential Mortgage Loans | The following table summarizes the inputs used in valuing these residential mortgage loans: Fair Value Discount Rate Weighted Average Life (Years) (A) Prepayment Rate CDR (B) Loss Severity (C) December 31, 2016 Performing Loans $ 151,436 3.8 % 6.0 11.7 % 1.2 % 24.4 % Non-Performing Loans 254,848 5.6 % 3.0 2.8 % N/A 30.0 % Total/Weighted Average $ 406,284 4.9 % 4.1 6.1 % 27.9 % December 31, 2015 Performing Loans $ 50,858 5.0 % 4.2 9.2 % 2.8 % 35.2 % Non-Performing Loans 202,155 5.7 % 3.4 2.9 % N/A 19.6 % Total/Weighted Average $ 253,013 5.6 % 3.6 4.2 % 22.7 % (A) The weighted average life is based on the expected timing of the receipt of cash flows. (B) Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance. (C) Loss severity is the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding loan balance. The following table summarizes the inputs used in valuing certain loans: Carrying Value Fair Value Valuation and Loss Provision/ (Reversal) In Current Year Discount Rate Weighted Average Life (Years) (A) Prepayment Rate CDR (B) Loss Severity (C) December 31, 2016 Reverse Mortgage Loans (D) $ 11,468 $ 12,952 $ 73 7.0 % 4.5 N/A N/A 9.5 % Performing Loans 23,758 24,420 4 7.4 % 5.6 6.2 % 2.1 % 50.3 % Non-Performing Loans 445,916 464,674 N/A 7.6 % 2.7 2.0 % N/A 30.0 % Total/Weighted Average $ 481,142 $ 502,046 $ 77 7.6 % 2.9 30.5 % Consumer Loans $ 1,799,486 $ 1,819,106 $ 6,451 9.3 % 3.8 15.4 % 5.7 % 87.6 % December 31, 2015 Reverse Mortgage Loans (D) $ 19,560 $ 19,560 $ 35 10.0 % 4.2 N/A N/A 8.1 % Performing Loans 246,190 248,858 43 4.8 % 5.2 6.6 % 1.2 % 14.3 % Non-Performing Loans 588,096 593,754 N/A 5.4 % 2.5 1.4 % N/A 13.1 % Total/Weighted Average $ 853,846 $ 862,172 $ 78 5.3 % 3.3 13.3 % (A) The weighted average life is based on the expected timing of the receipt of cash flows. (B) Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance. (C) Loss severity is the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding loan balance. (D) Carrying value and fair value represent a 70% participation interest New Residential holds in the portfolio of reverse mortgage loans. |
EQUITY AND EARNINGS PER SHARE (
EQUITY AND EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Summary of Common Dividends Declared | Common dividends have been declared as follows: Per Share Declaration Date Payment Date Quarterly Dividend Special Dividend Total Dividend Total Amounts Distributed (millions) March 19, 2014 April 2014 $ 0.35 $ — $ 0.35 $ 44.3 June 17, 2014 July 2014 0.35 0.15 0.50 70.6 September 18, 2014 October 2014 0.35 — 0.35 49.5 December 18, 2014 January 2015 0.38 — 0.38 53.7 March 16, 2015 April 2015 0.38 — 0.38 53.7 May 14, 2015 July 2015 0.45 — 0.45 89.5 September 18, 2015 October 2015 0.46 — 0.46 106.0 December 10, 2015 January 2016 0.46 — 0.46 106.0 March 22, 2016 April 2016 0.46 — 0.46 106.0 June 27, 2016 July 2016 0.46 — 0.46 106.0 September 23, 2016 October 2016 0.46 — 0.46 115.4 December 16, 2016 January 2017 0.46 — 0.46 115.4 |
Summary of Outstanding Options | The following table summarizes activity in New Residential’s outstanding options: Amount Weighted Average Exercise Price December 31, 2014 outstanding options 10,737,093 Options granted 8,543,539 $ 15.46 Options exercised (A) (6,734,525 ) $ 7.81 Options expired unexercised (166,000 ) December 31, 2015 outstanding options 12,380,107 Options granted 2,002,000 $ 14.20 Options exercised (A) (1,100,497 ) $ 10.59 Options expired unexercised (85,000 ) December 31, 2016 outstanding options 13,196,610 See table above (A) The 1.1 million and 6.7 million options that were exercised in 2016 and 2015 had an intrinsic value of approximately $4.0 million and $59.4 million , respectively, at the date of exercise. New Residential’s outstanding options were summarized as follows: December 31, 2016 December 31, 2015 Issued Prior to 2011 Issued in Total Issued Prior to 2011 Issued in 2011 - 2015 Total Held by the Manager 330,090 10,874,152 11,204,242 345,720 10,582,860 10,928,580 Issued to the Manager and subsequently transferred to certain of the Manager’s employees 18,910 1,967,458 1,986,368 88,280 1,359,247 1,447,527 Issued to the independent directors — 6,000 6,000 — 4,000 4,000 Total 349,000 12,847,610 13,196,610 434,000 11,946,107 12,380,107 The following table summarizes New Residential’s outstanding options as of December 31, 2016 . The last sales price on the New York Stock Exchange for New Residential’s common stock in the year ended December 31, 2016 was $15.72 per share. Recipient Date of Grant/ Exercise (A) Number of Unexercised Options Options Exercisable as of December 31, 2016 Weighted Average Exercise Price (B) Intrinsic Value of Exercisable Options as of December 31, 2016 (millions) Directors Various 6,000 6,000 $ 13.99 $ — Manager (C) 2007 349,000 349,000 31.27 — Manager (C) 2012 25,000 25,000 7.19 0.2 Manager (C) 2013 835,571 835,571 11.48 3.5 Manager (C) 2014 1,437,500 1,437,500 12.20 5.1 Manager (C) 2015 8,543,539 5,509,457 15.44 1.5 Manager (C) 2016 2,000,000 266,667 14.20 0.4 Outstanding 13,196,610 8,429,195 (A) Options expire on the tenth anniversary from date of grant. (B) The exercise prices are subject to adjustment in connection with return of capital dividends. (C) The Manager assigned certain of its options to Fortress’s employees as follows: Date of Grant Range of Exercise Prices Total Unexercised Inception to Date 2007 $29.92 to $33.80 18,910 2014 $12.20 258,750 2015 $15.25 to $15.88 1,708,708 2016 $14.20 — Total 1,986,368 |
TRANSACTIONS WITH AFFILIATES 41
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Affiliate Transactions | Due to affiliates is comprised of the following amounts: December 31, 2016 2015 Management fees $ 3,689 $ 6,671 Incentive compensation 42,197 16,017 Expense reimbursements and other 1,462 1,097 Total $ 47,348 $ 23,785 Affiliate expenses and fees were comprised of: Year Ended December 31, 2016 2015 2014 Management fees $ 41,610 $ 33,475 $ 19,651 Incentive compensation 42,197 16,017 54,334 Expense reimbursements (A) 500 500 500 Total $ 84,307 $ 49,992 $ 74,485 (A) Included in General and Administrative Expenses in the Consolidated Statements of Income. |
RECLASSIFICATION FROM ACCUMUL42
RECLASSIFICATION FROM ACCUMULATED OTHER COMPREHENSIVE INCOME INTO NET INCOME (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Summary of Amounts Reclassified out of Accumulated Other Comprehensive Income into Net Income | The following table summarizes the amounts reclassified out of accumulated other comprehensive income into net income: Accumulated Other Comprehensive Income Components Statement of Income Location Year Ended December 31, 2016 2015 2014 Reclassification of net realized (gain) loss on securities into earnings Gain (loss) on settlement of investments, net $ 27,460 $ (13,096 ) $ (65,701 ) Reclassification of net realized (gain) loss on securities into earnings Other-than-temporary impairment on securities 10,264 5,788 1,391 Total reclassifications $ 37,724 $ (7,308 ) $ (64,310 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Expense (Benefit) | Income tax expense (benefit) consists of the following: Year Ended December 31, 2016 2015 2014 Current: Federal $ 3,813 $ (2,737 ) $ 3,737 State and Local 252 (1,631 ) 2,799 Total Current Income Tax Expense (Benefit) 4,065 (4,368 ) 6,536 Deferred: Federal 33,999 (2,778 ) 12,853 State and Local 847 (3,855 ) 3,568 Total Deferred Income Tax Expense (Benefit) 34,846 (6,633 ) 16,421 Total Income Tax Expense (Benefit) $ 38,911 $ (11,001 ) $ 22,957 |
Schedule of Reported Provision for Income Taxes and the U.S. Federal Statutory Rate | The difference between New Residential’s reported provision for income taxes and the U.S. federal statutory rate of 35% is as follows: December 31, 2016 2015 2014 Provision at the statutory rate 35.00 % 35.00 % 35.00 % Non-taxable REIT income (28.22 )% (36.51 )% (31.12 )% State and local taxes 0.18 % (1.16 )% 0.69 % Other 0.19 % (1.58 )% 0.37 % Total provision 7.15 % (4.25 )% 4.94 % |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liability are presented below: December 31, 2016 2015 Deferred tax assets: Servicer Advances basis difference (A) $ 113,354 $ 144,842 Net operating losses (B) 44,289 42,944 Deferred deductibility of interest expense 16,543 — Other 5,684 6,934 Total deferred tax assets 179,870 194,720 Less valuation allowance (10,054 ) (9,409 ) Net deferred tax assets $ 169,816 $ 185,311 Deferred tax liabilities: Unrealized mark to market (18,532 ) — Total deferred tax (liability) $ (18,532 ) $ — Net deferred tax assets (liability) $ 151,284 $ 185,311 (A) On April 6, 2015, as a part of the purchase price allocation related to the HLSS Acquisition (Note 1), New Residential recorded an increase to its deferred tax asset of $195.1 million . The deferred tax asset primarily relates to the difference in the book basis and tax basis of New Residential’s investment in Servicer Advances. New Residential believes that such deferred tax asset is more likely than not to be realized and, therefore, no valuation allowance has been recorded against such deferred tax asset as of December 31, 2016 . (B) As of December 31, 2016 , New Residential’s TRSs had approximately $112.0 million of net operating loss carryforwards for federal and state income tax purposes which may be available to offset future taxable income, if and when it arises. These federal and state net operating loss carryforwards will begin to expire in 2034. The utilization of the net operating loss carryforwards to reduce future income taxes will depend on the TRSs ability to generate sufficient taxable income prior to the expiration of the carryforward period. |
Summary of Changes in Deferred Tax Asset Valuation Allowance | The following table summarizes the change in the deferred tax asset valuation allowance: Valuation allowance at December 31, 2014 $ 3,619 Increase related to net operating losses and loan loss reserves 6,680 Other increase (decrease) (890 ) Valuation allowance at December 31, 2015 9,409 Increase related to net operating losses and loan loss reserves 1,303 Other increase (decrease) (658 ) Valuation allowance at December 31, 2016 $ 10,054 |
Schedule of the Reconciliation of Unrecognized Tax Benefits | A reconciliation of the unrecognized tax benefits is as follows: Balance at December 31, 2014 $ 2,258 Additions for tax positions of the 2013 tax year — Other additions (reductions) (2,258 ) Balance at December 31, 2015 — Additions for tax positions of current year — Other additions (reductions) — Balance at December 31, 2016 $ — |
Schedule of Taxable Common Stock Distributions | Common stock distributions were taxable as follows: Year Dividends per Share Ordinary Income Long-term Capital Gain Return of Capital 2016 (A) $ 1.38 96.13 % 3.87 % — 2015 1.75 92.92 % 7.08 % — 2014 1.58 84.78 % 15.22 % — (A) The entire $0.46 per share dividend declared in December 2016 and paid in January 2017 is treated as received by stockholders in 2017. |
SUMMARY OF QUARTERLY CONSOLID44
SUMMARY OF QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Unaudited Summary Information | The following is an unaudited summary information on New Residential’s quarterly operations. 2016 Quarter Ended Year Ended December 31 March 31 June 30 September 30 December 31 (B) Interest income $ 190,036 $ 277,477 $ 282,388 $ 326,834 $ 1,076,735 Interest expense 81,228 100,685 96,488 95,023 373,424 Net interest income 108,808 176,792 185,900 231,811 703,311 Impairment Other-than-temporary impairment (OTTI) on securities 3,254 2,819 1,765 2,426 10,264 Valuation provision (reversal) on loans and real estate owned 6,745 16,825 18,275 35,871 77,716 9,999 19,644 20,040 38,297 87,980 Net interest income after impairment 98,809 157,148 165,860 193,514 615,331 Servicing revenue, net — — — 118,169 118,169 Other income (A) 31,922 (19,723 ) 26,701 23,437 62,337 Operating Expenses 25,016 36,280 40,575 72,339 174,210 Income Before Income Taxes 105,715 101,145 151,986 262,781 621,627 Income tax expense (benefit) (10,223 ) 7,518 20,900 20,716 38,911 Net Income $ 115,938 $ 93,627 $ 131,086 $ 242,065 $ 582,716 Noncontrolling Interests in Income (Loss) of Consolidated Subsidiaries $ 4,202 $ 24,975 $ 32,178 $ 16,908 $ 78,263 Net Income Attributable to Common Stockholders $ 111,736 $ 68,652 $ 98,908 $ 225,157 $ 504,453 Net Income Per Share of Common Stock Basic $ 0.48 $ 0.30 $ 0.41 $ 0.90 $ 2.12 Diluted $ 0.48 $ 0.30 $ 0.41 $ 0.90 $ 2.12 Weighted Average Number of Shares of Common Stock Outstanding Basic 230,471,202 230,478,390 240,601,691 250,773,117 238,122,665 Diluted 230,538,712 230,839,753 241,099,381 251,299,730 238,486,772 Dividends Declared per Share of Common Stock $ 0.46 $ 0.46 $ 0.46 $ 0.46 $ 1.84 2015 Quarter Ended Year Ended December 31 March 31 June 30 September 30 December 31 Interest income $ 84,373 $ 178,177 $ 182,341 $ 200,181 $ 645,072 Interest expense 33,979 81,871 77,558 80,605 274,013 Net interest income 50,394 96,306 104,783 119,576 371,059 Impairment Other-than-temporary impairment (OTTI) on securities 1,071 649 1,574 2,494 5,788 Valuation provision (reversal) on loans and real estate owned 977 4,772 (3,341 ) 16,188 18,596 2,048 5,421 (1,767 ) 18,682 24,384 Net interest income after impairment 48,346 90,885 106,550 100,894 346,675 Other income (A) 12,295 37,650 (17,825 ) 9,909 42,029 Operating Expenses 22,270 34,952 32,902 27,699 117,823 Income Before Income Taxes 38,371 93,583 55,823 83,104 270,881 Income tax expense (benefit) (3,427 ) 14,306 (5,932 ) (15,948 ) (11,001 ) Net Income $ 41,798 $ 79,277 $ 61,755 $ 99,052 $ 281,882 Noncontrolling Interests in Income (Loss) of Consolidated Subsidiaries $ 5,823 $ 4,158 $ 7,193 $ (3,928 ) $ 13,246 Net Income Attributable to Common Stockholders $ 35,975 $ 75,119 $ 54,562 $ 102,980 $ 268,636 Net Income Per Share of Common Stock Basic $ 0.25 $ 0.37 $ 0.24 $ 0.45 $ 1.34 Diluted $ 0.25 $ 0.37 $ 0.24 $ 0.45 $ 1.32 Weighted Average Number of Shares of Common Stock Outstanding Basic 141,434,905 200,910,040 230,455,568 230,459,000 200,739,809 Diluted 144,911,309 205,169,099 231,215,235 230,698,961 202,907,605 Dividends Declared per Share of Common Stock $ 0.38 $ 0.45 $ 0.46 $ 0.46 $ 1.75 (A) Earnings from investments in equity method investees is included in other income. (B) New Residential completed significant transactions in the fourth quarter of 2016 , as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. |
ORGANIZATION - Narrative (Detai
ORGANIZATION - Narrative (Details) $ / shares in Units, $ in Thousands | Oct. 23, 2015USD ($) | Apr. 29, 2015USD ($)$ / sharesshares | Apr. 06, 2015USD ($)$ / shares$ / rightshares | Oct. 17, 2014shares | Dec. 31, 2016USD ($)$ / sharesshares | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($)$ / sharesshares | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)shares | Apr. 08, 2015USD ($) | May 06, 2013shares | ||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Common stock, shares outstanding (in shares) | shares | 141,400,000 | 250,773,117 | 230,471,202 | 230,471,202 | 250,773,117 | 230,471,202 | 126,512,823 | |||||||||||||
Stock options outstanding (in shares) | shares | 13,196,610 | 12,380,107 | 12,380,107 | 13,196,610 | 12,380,107 | 10,737,093 | ||||||||||||||
Reverse stock split | 0.5 | |||||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||||||
Restricted cash | $ 163,095 | $ 94,702 | $ 94,702 | $ 163,095 | $ 94,702 | |||||||||||||||
Compensation expense | 300 | 450 | $ 453 | |||||||||||||||||
Interest income | 231,811 | [1] | $ 185,900 | $ 176,792 | $ 108,808 | 119,576 | $ 104,783 | $ 96,306 | $ 50,394 | 703,311 | 371,059 | 206,149 | ||||||||
Income before income taxes | 262,781 | [1] | $ 151,986 | $ 101,145 | $ 105,715 | 83,104 | $ 55,823 | $ 93,583 | 38,371 | 621,627 | 270,881 | $ 465,056 | ||||||||
Servicer advances, at fair value | [2] | $ 5,706,593 | 7,426,794 | 7,426,794 | $ 5,706,593 | 7,426,794 | ||||||||||||||
HLSS [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Interest income | 282,300 | |||||||||||||||||||
Income before income taxes | 131,500 | |||||||||||||||||||
HLSS [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Purchase price | $ 1,000,000 | $ 1,000,000 | ||||||||||||||||||
Shares issued (in shares) | shares | 28,286,980 | 28,286,980 | ||||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||||||
Exercisable rights, per right amount in cash (in dollars per share) | $ / right | 0.704059 | |||||||||||||||||||
Non-cash contingent consideration | $ 50,000 | $ 50,000 | ||||||||||||||||||
Fair value of stock issued | 434,092 | |||||||||||||||||||
Cash consideration | 621,982 | |||||||||||||||||||
HLSS Seller Financing | 385,174 | |||||||||||||||||||
Debt issuance costs | 27,000 | |||||||||||||||||||
Acquisition related costs incurred | 26,100 | |||||||||||||||||||
HLSS [Member] | Minimum [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Non-cash contingent consideration | 0 | |||||||||||||||||||
HLSS [Member] | Ocwen [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Unpaid Principal Balance | $ 156,400,000 | |||||||||||||||||||
Fee arrangement, term (in years) | 8 years | |||||||||||||||||||
Servicer advances, at fair value | $ 5,600,000 | |||||||||||||||||||
Contractual term | 8 years | |||||||||||||||||||
Contract extension notification period, prior to end of term | 6 months | |||||||||||||||||||
Outstanding loan balance fee, percent | 0.50% | |||||||||||||||||||
Professional and contract services fee, additional markup percent | 15.00% | |||||||||||||||||||
HLSS [Member] | Ocwen [Member] | Other Income [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Purchase agreement contract clause accrual | $ 14,500 | $ 14,500 | 14,500 | |||||||||||||||||
HLSS [Member] | Ocwen [Member] | Minimum [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Contractual term | 6 years | |||||||||||||||||||
HLSS [Member] | Retention Bonus Payments [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Compensation expense | 3,200 | |||||||||||||||||||
HLSS [Member] | Employee Severance Payments [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Compensation expense | $ 2,800 | |||||||||||||||||||
HLSS [Member] | HLSS [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||||||
Restricted cash | $ 45,100 | $ 50,000 | ||||||||||||||||||
Exercisable rights, per right amount in cash (in dollars per share) | $ / right | 0.704059 | |||||||||||||||||||
Fortress [Member] | ||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||
Common stock, shares outstanding (in shares) | shares | 2,400,000 | 2,400,000 | ||||||||||||||||||
Stock options outstanding (in shares) | shares | 11,200,000 | 11,200,000 | ||||||||||||||||||
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. | |||||||||||||||||||
[2] | New Residential’s Consolidated Balance Sheets include the assets and liabilities of certain consolidated VIEs, the Buyer (Note 6) and the Consumer Loan SPVs (Note 9), which primarily hold investments in Servicer Advances and consumer loans, respectively, financed with notes and bonds payable. The Buyer’s balance sheet is included in Note 6 and the Consumer Loan SPVs’ balance sheet is included in Note 9. The creditors of the Buyer and the Consumer Loan SPVs do not have recourse to the general credit of New Residential and the assets of the Buyer and the Consumer Loan SPVs are not directly available to satisfy New Residential’s obligations. |
ORGANIZATION - Summary of Total
ORGANIZATION - Summary of Total Consideration (Details) $ / shares in Units, $ in Thousands | Oct. 23, 2015USD ($) | Apr. 29, 2015USD ($)$ / sharesshares | Apr. 06, 2015USD ($)right$ / shares$ / rightshares | Dec. 31, 2016$ / shares | Dec. 31, 2015$ / shares |
Business Combination, Separately Recognized Transactions [Line Items] | |||||
New Residential's 4/6/2015 share price (in dollars per share) | $ / shares | $ 15.72 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
HLSS [Member] | |||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||
Share Issuance Consideration (in shares) | shares | 28,286,980 | 28,286,980 | |||
New Residential's 4/6/2015 share price (in dollars per share) | $ / shares | $ 15.3460 | ||||
Dollar Value of Share Issuance | $ 434,092 | ||||
Cash Consideration | 621,982 | ||||
HLSS Seller Financing | 385,174 | ||||
HLSS New Merger Payment (71,016,771 @ $0.704059) | $ 50,000 | $ 50,000 | |||
Number of rights exercisable (in shares) | right | 71,016,771 | ||||
Exercisable rights, per right amount in cash (in dollars per share) | $ / right | 0.704059 | ||||
Total Consideration | $ 1,491,248 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||||
Purchase price | $ 1,000,000 | 1,000,000 | |||
Contingent consideration paid | $ 5,100 | ||||
Lower Range [Member] | HLSS [Member] | |||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||
HLSS New Merger Payment (71,016,771 @ $0.704059) | 0 | ||||
Upper Range [Member] | HLSS [Member] | |||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||
HLSS New Merger Payment (71,016,771 @ $0.704059) | $ 50,000 |
ORGANIZATION - Summary of Preli
ORGANIZATION - Summary of Preliminary Allocation of Total Consideration (Details) $ in Thousands | Apr. 06, 2015USD ($) | |
HLSS [Member] | ||
Business Acquisition [Line Items] | ||
Total Consideration | $ 1,491,248 | |
Assets | ||
Cash and cash equivalents | 51,400 | |
Servicer advances, at fair value | 5,096,700 | |
Excess mortgage servicing rights, at fair value | 917,100 | |
Residential mortgage loans, held-for-sale | 416,800 | [1] |
Deferred tax asset | 195,100 | [2] |
Investment in HLSS Ltd. | 44,900 | |
Other assets | 402,400 | [3] |
Total Assets Acquired | 7,124,400 | |
Liabilities | ||
Notes payable | 5,580,300 | |
Accrued expenses and other liabilities | 52,900 | [4],[5] |
Total Liabilities Assumed | 5,633,200 | |
Net Assets | 1,491,200 | |
Residential Mortgage [Member] | Non-Performing Loans [Member] | Government National Mortgage Association (GNMA) Insured Loans [Member] | ||
Liabilities | ||
Unpaid Principal Balance | $ 424,300 | |
[1] | Represents $424.3 million unpaid principal balance (“UPB”) of Government National Mortgage Association (“Ginnie Mae”) early buy-out (“EBO”) residential mortgage loans not subject to Accounting Standards Codification (“ASC”) No. 310-30 as the contractual cash flows are guaranteed by the Federal Housing Administration (“FHA”). | |
[2] | Due primarily to the difference between carryover historical tax basis and acquisition date fair value of one of HLSS’s first tier subsidiaries. | |
[3] | Includes restricted cash and receivables not subject to ASC No. 310-30 which New Residential has deemed fully collectible. | |
[4] | Contingencies for HLSS class action law suits had not been recognized at the acquisition date as the criteria in ASC No. 450 had not been met (Note 14). | |
[5] | Includes liabilities which arose from contingencies regarding HLSS matters. |
ORGANIZATION - Summary of Unaud
ORGANIZATION - Summary of Unaudited Pro Forma Combined Interest Income and Income Before Income Taxes (Details) - HLSS [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Interest income | $ 731,660 | $ 744,363 |
Income Before Income Taxes | $ 322,365 | $ 647,058 |
SUMMARY OF SIGNIFICANT ACCOUN49
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | Oct. 17, 2014 | Dec. 31, 2016USD ($)risk | Dec. 31, 2015USD ($) |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reverse stock split | 0.5 | ||
Number of significant types of economic risk | risk | 2 | ||
Monthly payment threshold period to determine whether loan is past due (in days) | 30 days | ||
Principal or interest past due threshold period (in days) | 120 days | ||
Restricted cash | $ 163,095 | $ 94,702 | |
General maturity term of repurchase agreements and notes payable (in years) | 1 year | ||
Secured Corporate Note [Member] | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Restricted cash | $ 22,300 | 900 | |
Servicer Advances [Member] | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Restricted cash | $ 82,100 | $ 93,800 |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Accretion and Other Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Accretion of discount and other amortization: | ||||
Accretion of servicer advance interest income | $ 364,350 | $ 352,316 | $ 190,206 | |
Accretion of excess mortgage servicing rights income | 150,141 | 134,565 | 49,180 | |
Accretion of net discount on securities and loans | [1] | 253,243 | 65,925 | 47,793 |
Amortization of deferred financing costs | (18,326) | (26,036) | (8,771) | |
Amortization of discount on notes and bonds payable | (1,476) | (1,472) | 0 | |
Accretion and other amortization | $ 747,932 | $ 525,298 | $ 278,408 | |
[1] | Includes accretion of the accretable yield on PCD loans. |
SUMMARY OF SIGNIFICANT ACCOUN51
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Other Income (Loss), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other income (loss), net | |||
Unrealized gain (loss) on derivative instruments | $ 5,774 | $ (3,538) | $ (8,847) |
Unrealized gain (loss) on other ABS | (2,322) | 879 | 0 |
Gain (loss) on transfer of loans to REO | 18,356 | 2,065 | 17,489 |
Gain (loss) on transfer of loans to other assets | 2,938 | (690) | 0 |
Fee earned on deal termination | 0 | 0 | 5,000 |
Gain on Excess MSR recapture agreements | 2,802 | 2,999 | 1,157 |
Other income (loss) | 935 | 3,674 | 20 |
Total Other income (loss), net | $ 28,483 | $ 5,389 | $ 14,819 |
SUMMARY OF SIGNIFICANT ACCOUN52
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Gain (Loss) on Settlement of Investments, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Gain (loss) on sale of real estate securities, net | $ (27,460) | $ 13,096 | $ 65,701 |
Gain (loss) on sale of residential mortgage loans, net | 12,142 | 35,175 | 2,644 |
Gain (loss) on settlement of derivatives | (27,491) | (46,982) | (40,400) |
Gain (loss) on liquidated residential mortgage loans | (1,810) | (2,170) | 3,285 |
Gain (loss) on sale of REO | 4,690 | (10,742) | (3,686) |
Other gains (losses) | (8,871) | (8,003) | 3,753 |
Gain on settlement of investments | $ (48,800) | $ (19,626) | $ 31,297 |
SUMMARY OF SIGNIFICANT ACCOUN53
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Other Assets and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Assets | |||
Margin receivable, net | $ 55,481 | $ 54,459 | |
Other receivables | [1] | 16,350 | 5,829 |
Principal paydown receivable | 999 | 795 | |
Receivable from government agency | [2] | 54,706 | 68,833 |
Call rights | 337 | 414 | |
Derivative assets | 6,762 | 2,689 | |
Interest receivable | 51,739 | 36,963 | |
Due from servicers | 22,134 | 5,064 | |
Other assets, other | 21,161 | 14,675 | |
Other Assets | 291,586 | 239,446 | |
Accrued Expenses and Other Liabilities | |||
Interest payable | 23,108 | 18,268 | |
Accounts payable | 31,299 | 18,650 | |
Derivative liabilities | 3,021 | 13,443 | |
Current taxes payable | 2,314 | 1,573 | |
Due to servicers | 13,032 | 0 | |
Deferred purchase price of MSRs | 90,058 | 0 | |
Other liabilities | 8,118 | 6,112 | |
Accrued Expenses and Other Liabilities | 170,950 | 58,046 | |
Ginnie Mae EBO [Member] | |||
Other Assets | |||
Servicer advances receivable, net | [3] | 14,829 | 49,725 |
New Residential Mortgage LLC [Member] | |||
Other Assets | |||
Servicer advances receivable, net | [4] | $ 47,088 | $ 0 |
[1] | Primarily includes a receivable from Ocwen related to their servicer rating downgrade, servicing fee receivables and receivables related to residual securities owned as of December 31, 2016. | ||
[2] | Represents claims receivable from the FHA on EBO and reverse mortgage loans for which foreclosure has been completed and for which New Residential has made or intends to make a claim on the FHA guarantee. | ||
[3] | Represents an HLSS (Note 1) loan to a counterparty collateralized by Servicer Advances on Ginnie Mae EBO loans. | ||
[4] | Represents Servicer Advances due to New Residential’s licensed servicer subsidiary, NRM (Note 5). These advances are recorded at cost, subject to impairment. Any related purchase discounts are accreted into interest income on a straight-line basis over the estimated weighted average life of the advances. |
SEGMENT REPORTING - Summary of
SEGMENT REPORTING - Summary of Segment Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||
Interest income | $ 326,834 | [1] | $ 282,388 | $ 277,477 | $ 190,036 | $ 200,181 | $ 182,341 | $ 178,177 | $ 84,373 | $ 1,076,735 | $ 645,072 | $ 346,857 | |||||||||||||
Interest expense | 95,023 | [1] | 96,488 | 100,685 | 81,228 | 80,605 | 77,558 | 81,871 | 33,979 | 373,424 | 274,013 | 140,708 | |||||||||||||
Net interest income (expense) | 231,811 | [1] | 185,900 | 176,792 | 108,808 | 119,576 | 104,783 | 96,306 | 50,394 | 703,311 | 371,059 | 206,149 | |||||||||||||
Impairment | 38,297 | [1] | 20,040 | 19,644 | 9,999 | 18,682 | (1,767) | 5,421 | 2,048 | 87,980 | 24,384 | 11,282 | |||||||||||||
Servicing revenue, net | 118,169 | [1] | 0 | 0 | 0 | 118,169 | 0 | 0 | |||||||||||||||||
Other income (loss) | 23,437 | [1],[2] | 26,701 | [2] | (19,723) | [2] | 31,922 | [2] | 9,909 | [2] | (17,825) | [2] | 37,650 | [2] | 12,295 | [2] | 62,337 | [2] | 42,029 | [2] | 375,088 | ||||
Operating expenses | 72,339 | [1] | 40,575 | 36,280 | 25,016 | 27,699 | 32,902 | 34,952 | 22,270 | 174,210 | 117,823 | 104,899 | |||||||||||||
Income (Loss) Before Income Taxes | 262,781 | [1] | 151,986 | 101,145 | 105,715 | 83,104 | 55,823 | 93,583 | 38,371 | 621,627 | 270,881 | 465,056 | |||||||||||||
Income tax expense (benefit) | 20,716 | [1] | 20,900 | 7,518 | (10,223) | (15,948) | (5,932) | 14,306 | (3,427) | 38,911 | (11,001) | 22,957 | |||||||||||||
Net Income (Loss) | 242,065 | [1] | 131,086 | 93,627 | 115,938 | 99,052 | 61,755 | 79,277 | 41,798 | 582,716 | 281,882 | 442,099 | |||||||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries | 16,908 | [1] | 32,178 | 24,975 | 4,202 | (3,928) | 7,193 | 4,158 | 5,823 | 78,263 | 13,246 | 89,222 | |||||||||||||
Net income (loss) attributable to common stockholders | 225,157 | [1] | $ 98,908 | $ 68,652 | $ 111,736 | 102,980 | $ 54,562 | $ 75,119 | $ 35,975 | 504,453 | 268,636 | 352,877 | |||||||||||||
Investments | 15,780,680 | 12,884,846 | $ 15,780,680 | 15,780,680 | 12,884,846 | ||||||||||||||||||||
Cash and cash equivalents | 290,602 | 249,936 | 290,602 | 290,602 | 249,936 | ||||||||||||||||||||
Restricted cash | 163,095 | 94,702 | 163,095 | 163,095 | 94,702 | ||||||||||||||||||||
Derivative assets | 6,762 | 2,689 | 6,762 | 6,762 | 2,689 | ||||||||||||||||||||
Other assets | 2,130,658 | 1,960,549 | 2,130,658 | 2,130,658 | 1,960,549 | ||||||||||||||||||||
Total assets | 18,365,035 | 15,192,722 | 18,365,035 | 18,365,035 | 15,192,722 | ||||||||||||||||||||
Debt | 13,181,236 | [3] | 11,292,622 | [3] | 13,181,236 | [3] | 13,181,236 | [3] | 11,292,622 | [3] | 6,057,853 | [4] | |||||||||||||
Other liabilities | 1,715,622 | 913,520 | 1,715,622 | 1,715,622 | 913,520 | ||||||||||||||||||||
Total liabilities | 14,896,858 | 12,206,142 | 14,896,858 | 14,896,858 | 12,206,142 | ||||||||||||||||||||
Total Equity | 3,468,177 | 2,986,580 | 3,468,177 | 3,468,177 | 2,986,580 | 1,849,925 | $ 1,513,075 | ||||||||||||||||||
Noncontrolling interests in equity of consolidated subsidiaries | 208,077 | 190,647 | 208,077 | 208,077 | 190,647 | ||||||||||||||||||||
Total New Residential stockholders’ equity | 3,260,100 | 2,795,933 | 3,260,100 | 3,260,100 | 2,795,933 | ||||||||||||||||||||
Investments in equity method investees | 194,788 | 217,221 | 194,788 | 194,788 | 217,221 | ||||||||||||||||||||
Operating Segments [Member] | Excess MSRs [Member] | |||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||
Interest income | 150,141 | 134,565 | 49,180 | ||||||||||||||||||||||
Interest expense | 19,160 | 11,625 | 1,294 | ||||||||||||||||||||||
Net interest income (expense) | 130,981 | 122,940 | 47,886 | ||||||||||||||||||||||
Impairment | 0 | 0 | 0 | ||||||||||||||||||||||
Servicing revenue, net | 0 | ||||||||||||||||||||||||
Other income (loss) | 11,398 | 72,802 | 100,052 | ||||||||||||||||||||||
Operating expenses | 1,259 | 1,101 | 713 | ||||||||||||||||||||||
Income (Loss) Before Income Taxes | 141,120 | 194,641 | 147,225 | ||||||||||||||||||||||
Income tax expense (benefit) | 0 | 0 | 0 | ||||||||||||||||||||||
Net Income (Loss) | 141,120 | 194,641 | 147,225 | ||||||||||||||||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries | 0 | 0 | 0 | ||||||||||||||||||||||
Net income (loss) attributable to common stockholders | 141,120 | 194,641 | 147,225 | ||||||||||||||||||||||
Investments | 1,594,243 | 1,798,738 | 1,594,243 | 1,594,243 | 1,798,738 | ||||||||||||||||||||
Cash and cash equivalents | 2,225 | 18,507 | 2,225 | 2,225 | 18,507 | ||||||||||||||||||||
Restricted cash | 24,538 | 878 | 24,538 | 24,538 | 878 | ||||||||||||||||||||
Derivative assets | 0 | 0 | |||||||||||||||||||||||
Other assets | 2,404 | 34 | 2,404 | 2,404 | 34 | ||||||||||||||||||||
Total assets | 1,623,410 | 1,818,157 | 1,623,410 | 1,623,410 | 1,818,157 | ||||||||||||||||||||
Debt | 729,145 | 182,978 | 729,145 | 729,145 | 182,978 | ||||||||||||||||||||
Other liabilities | 2,189 | 2,277 | 2,189 | 2,189 | 2,277 | ||||||||||||||||||||
Total liabilities | 731,334 | 185,255 | 731,334 | 731,334 | 185,255 | ||||||||||||||||||||
Total Equity | 892,076 | 1,632,902 | 892,076 | 892,076 | 1,632,902 | ||||||||||||||||||||
Noncontrolling interests in equity of consolidated subsidiaries | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Total New Residential stockholders’ equity | 892,076 | 1,632,902 | 892,076 | 892,076 | 1,632,902 | ||||||||||||||||||||
Investments in equity method investees | 194,788 | 217,221 | 194,788 | 194,788 | 217,221 | ||||||||||||||||||||
Operating Segments [Member] | Mortgage Servicing Rights [Member] | |||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||
Interest income | 0 | ||||||||||||||||||||||||
Interest expense | 0 | ||||||||||||||||||||||||
Net interest income (expense) | 0 | ||||||||||||||||||||||||
Impairment | 0 | ||||||||||||||||||||||||
Servicing revenue, net | 118,169 | ||||||||||||||||||||||||
Other income (loss) | 0 | ||||||||||||||||||||||||
Operating expenses | 10,693 | ||||||||||||||||||||||||
Income (Loss) Before Income Taxes | 107,476 | ||||||||||||||||||||||||
Income tax expense (benefit) | 15,683 | ||||||||||||||||||||||||
Net Income (Loss) | 91,793 | ||||||||||||||||||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries | 0 | ||||||||||||||||||||||||
Net income (loss) attributable to common stockholders | 91,793 | ||||||||||||||||||||||||
Investments | 659,483 | 659,483 | 659,483 | ||||||||||||||||||||||
Cash and cash equivalents | 95,840 | 95,840 | 95,840 | ||||||||||||||||||||||
Restricted cash | 0 | 0 | 0 | ||||||||||||||||||||||
Other assets | 40,608 | 40,608 | 40,608 | ||||||||||||||||||||||
Total assets | 795,931 | 795,931 | 795,931 | ||||||||||||||||||||||
Debt | 0 | 0 | 0 | ||||||||||||||||||||||
Other liabilities | 97,923 | 97,923 | 97,923 | ||||||||||||||||||||||
Total liabilities | 97,923 | 97,923 | 97,923 | ||||||||||||||||||||||
Total Equity | 698,008 | 698,008 | 698,008 | ||||||||||||||||||||||
Noncontrolling interests in equity of consolidated subsidiaries | 0 | 0 | 0 | ||||||||||||||||||||||
Total New Residential stockholders’ equity | 698,008 | 698,008 | 698,008 | ||||||||||||||||||||||
Investments in equity method investees | 0 | 0 | 0 | ||||||||||||||||||||||
Operating Segments [Member] | Servicer Advances [Member] | |||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||
Interest income | 369,809 | 354,616 | 190,206 | ||||||||||||||||||||||
Interest expense | 224,879 | 216,837 | 110,968 | ||||||||||||||||||||||
Net interest income (expense) | 144,930 | 137,779 | 79,238 | ||||||||||||||||||||||
Impairment | 0 | 0 | 0 | ||||||||||||||||||||||
Servicing revenue, net | 0 | ||||||||||||||||||||||||
Other income (loss) | (4,624) | (53,426) | 83,828 | ||||||||||||||||||||||
Operating expenses | 3,724 | 14,316 | 2,183 | ||||||||||||||||||||||
Income (Loss) Before Income Taxes | 136,582 | 70,037 | 160,883 | ||||||||||||||||||||||
Income tax expense (benefit) | 21,036 | (8,127) | 20,806 | ||||||||||||||||||||||
Net Income (Loss) | 115,546 | 78,164 | 140,077 | ||||||||||||||||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries | 40,136 | 18,407 | 89,222 | ||||||||||||||||||||||
Net income (loss) attributable to common stockholders | 75,410 | 59,757 | 50,855 | ||||||||||||||||||||||
Investments | 5,806,740 | 7,857,841 | 5,806,740 | 5,806,740 | 7,857,841 | ||||||||||||||||||||
Cash and cash equivalents | 94,368 | 95,686 | 94,368 | 94,368 | 95,686 | ||||||||||||||||||||
Restricted cash | 82,122 | 93,824 | 82,122 | 82,122 | 93,824 | ||||||||||||||||||||
Derivative assets | 2,689 | 2,689 | |||||||||||||||||||||||
Other assets | 180,705 | 198,962 | 180,705 | 180,705 | 198,962 | ||||||||||||||||||||
Total assets | 6,163,935 | 8,249,002 | 6,163,935 | 6,163,935 | 8,249,002 | ||||||||||||||||||||
Debt | 5,698,160 | 7,550,680 | 5,698,160 | 5,698,160 | 7,550,680 | ||||||||||||||||||||
Other liabilities | 24,123 | 18,153 | 24,123 | 24,123 | 18,153 | ||||||||||||||||||||
Total liabilities | 5,722,283 | 7,568,833 | 5,722,283 | 5,722,283 | 7,568,833 | ||||||||||||||||||||
Total Equity | 441,652 | 680,169 | 441,652 | 441,652 | 680,169 | ||||||||||||||||||||
Noncontrolling interests in equity of consolidated subsidiaries | 173,057 | 190,647 | 173,057 | 173,057 | 190,647 | ||||||||||||||||||||
Total New Residential stockholders’ equity | 268,595 | 489,522 | 268,595 | 268,595 | 489,522 | ||||||||||||||||||||
Investments in equity method investees | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Operating Segments [Member] | Real Estate Securities [Member] | |||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||
Interest income | 265,862 | 110,123 | 60,208 | ||||||||||||||||||||||
Interest expense | 49,283 | 18,230 | 12,689 | ||||||||||||||||||||||
Net interest income (expense) | 216,579 | 91,893 | 47,519 | ||||||||||||||||||||||
Impairment | 10,264 | 5,788 | 1,391 | ||||||||||||||||||||||
Servicing revenue, net | 0 | ||||||||||||||||||||||||
Other income (loss) | (47,747) | (33,604) | 14,589 | ||||||||||||||||||||||
Operating expenses | 1,480 | 1,227 | 10,012 | ||||||||||||||||||||||
Income (Loss) Before Income Taxes | 157,088 | 51,274 | 50,705 | ||||||||||||||||||||||
Income tax expense (benefit) | 0 | 0 | 0 | ||||||||||||||||||||||
Net Income (Loss) | 157,088 | 51,274 | 50,705 | ||||||||||||||||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries | 0 | 0 | 0 | ||||||||||||||||||||||
Net income (loss) attributable to common stockholders | 157,088 | 51,274 | 50,705 | ||||||||||||||||||||||
Investments | 4,973,711 | 2,070,834 | 4,973,711 | 4,973,711 | 2,070,834 | ||||||||||||||||||||
Cash and cash equivalents | 8,405 | 42,984 | 8,405 | 8,405 | 42,984 | ||||||||||||||||||||
Restricted cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Derivative assets | 0 | 0 | |||||||||||||||||||||||
Other assets | 1,753,076 | 1,600,091 | 1,753,076 | 1,753,076 | 1,600,091 | ||||||||||||||||||||
Total assets | 6,735,192 | 3,713,909 | 6,735,192 | 6,735,192 | 3,713,909 | ||||||||||||||||||||
Debt | 4,203,249 | 2,513,538 | 4,203,249 | 4,203,249 | 2,513,538 | ||||||||||||||||||||
Other liabilities | 1,394,682 | 740,392 | 1,394,682 | 1,394,682 | 740,392 | ||||||||||||||||||||
Total liabilities | 5,597,931 | 3,253,930 | 5,597,931 | 5,597,931 | 3,253,930 | ||||||||||||||||||||
Total Equity | 1,137,261 | 459,979 | 1,137,261 | 1,137,261 | 459,979 | ||||||||||||||||||||
Noncontrolling interests in equity of consolidated subsidiaries | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Total New Residential stockholders’ equity | 1,137,261 | 459,979 | 1,137,261 | 1,137,261 | 459,979 | ||||||||||||||||||||
Investments in equity method investees | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Operating Segments [Member] | Residential Mortgage Loans [Member] | |||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||
Interest income | 56,249 | 43,180 | 47,262 | ||||||||||||||||||||||
Interest expense | 25,675 | 21,510 | 11,073 | ||||||||||||||||||||||
Net interest income (expense) | 30,574 | 21,670 | 36,189 | ||||||||||||||||||||||
Impairment | 23,870 | 18,596 | 9,891 | ||||||||||||||||||||||
Servicing revenue, net | 0 | ||||||||||||||||||||||||
Other income (loss) | 26,779 | 15,405 | 30,759 | ||||||||||||||||||||||
Operating expenses | 14,961 | 13,415 | 12,688 | ||||||||||||||||||||||
Income (Loss) Before Income Taxes | 18,522 | 5,064 | 44,369 | ||||||||||||||||||||||
Income tax expense (benefit) | 2,117 | (3,199) | 2,059 | ||||||||||||||||||||||
Net Income (Loss) | 16,405 | 8,263 | 42,310 | ||||||||||||||||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries | 0 | 0 | 0 | ||||||||||||||||||||||
Net income (loss) attributable to common stockholders | 16,405 | 8,263 | 42,310 | ||||||||||||||||||||||
Investments | 947,017 | 1,157,433 | 947,017 | 947,017 | 1,157,433 | ||||||||||||||||||||
Cash and cash equivalents | 5,366 | 13,262 | 5,366 | 5,366 | 13,262 | ||||||||||||||||||||
Restricted cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Derivative assets | 0 | 0 | |||||||||||||||||||||||
Other assets | 100,951 | 106,330 | 100,951 | 100,951 | 106,330 | ||||||||||||||||||||
Total assets | 1,053,334 | 1,277,025 | 1,053,334 | 1,053,334 | 1,277,025 | ||||||||||||||||||||
Debt | 783,006 | 1,004,980 | 783,006 | 783,006 | 1,004,980 | ||||||||||||||||||||
Other liabilities | 22,689 | 14,382 | 22,689 | 22,689 | 14,382 | ||||||||||||||||||||
Total liabilities | 805,695 | 1,019,362 | 805,695 | 805,695 | 1,019,362 | ||||||||||||||||||||
Total Equity | 247,639 | 257,663 | 247,639 | 247,639 | 257,663 | ||||||||||||||||||||
Noncontrolling interests in equity of consolidated subsidiaries | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Total New Residential stockholders’ equity | 247,639 | 257,663 | 247,639 | 247,639 | 257,663 | ||||||||||||||||||||
Investments in equity method investees | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Operating Segments [Member] | Consumer Loans [Member] | |||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||
Interest income | 226,000 | 232,750 | 1 | 0 | |||||||||||||||||||||
Interest expense | 54,427 | 1,615 | 4,184 | ||||||||||||||||||||||
Net interest income (expense) | 178,323 | (1,614) | (4,184) | ||||||||||||||||||||||
Impairment | 53,846 | 0 | 0 | ||||||||||||||||||||||
Servicing revenue, net | 0 | ||||||||||||||||||||||||
Other income (loss) | 76,518 | 43,954 | 145,860 | ||||||||||||||||||||||
Operating expenses | 39,466 | 228 | 917 | ||||||||||||||||||||||
Income (Loss) Before Income Taxes | 82,000 | 161,529 | 42,112 | 140,759 | |||||||||||||||||||||
Income tax expense (benefit) | 75 | 325 | 92 | ||||||||||||||||||||||
Net Income (Loss) | 161,454 | 41,787 | 140,667 | ||||||||||||||||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries | 38,127 | 0 | 0 | ||||||||||||||||||||||
Net income (loss) attributable to common stockholders | 123,327 | 41,787 | 140,667 | ||||||||||||||||||||||
Investments | 1,799,486 | 0 | 1,799,486 | 1,799,486 | 0 | ||||||||||||||||||||
Cash and cash equivalents | 27,962 | 6,359 | 27,962 | 27,962 | 6,359 | ||||||||||||||||||||
Restricted cash | 56,435 | 0 | 56,435 | 56,435 | 0 | ||||||||||||||||||||
Derivative assets | 0 | 0 | |||||||||||||||||||||||
Other assets | 35,921 | 1,767 | 35,921 | 35,921 | 1,767 | ||||||||||||||||||||
Total assets | 1,919,804 | 8,126 | 1,919,804 | 1,919,804 | 8,126 | ||||||||||||||||||||
Debt | 1,767,676 | 40,446 | 1,767,676 | 1,767,676 | 40,446 | ||||||||||||||||||||
Other liabilities | 6,382 | 459 | 6,382 | 6,382 | 459 | ||||||||||||||||||||
Total liabilities | 1,774,058 | 40,905 | 1,774,058 | 1,774,058 | 40,905 | ||||||||||||||||||||
Total Equity | 145,746 | (32,779) | 145,746 | 145,746 | (32,779) | ||||||||||||||||||||
Noncontrolling interests in equity of consolidated subsidiaries | 35,020 | 0 | 35,020 | 35,020 | 0 | ||||||||||||||||||||
Total New Residential stockholders’ equity | 110,726 | (32,779) | 110,726 | 110,726 | (32,779) | ||||||||||||||||||||
Investments in equity method investees | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Corporate, Non-Segment [Member] | |||||||||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||||||||
Interest income | 1,924 | 2,587 | 1 | ||||||||||||||||||||||
Interest expense | 0 | 4,196 | 500 | ||||||||||||||||||||||
Net interest income (expense) | 1,924 | (1,609) | (499) | ||||||||||||||||||||||
Impairment | 0 | 0 | 0 | ||||||||||||||||||||||
Servicing revenue, net | 0 | ||||||||||||||||||||||||
Other income (loss) | 13 | (3,102) | 0 | ||||||||||||||||||||||
Operating expenses | 102,627 | 87,536 | 78,386 | ||||||||||||||||||||||
Income (Loss) Before Income Taxes | (100,690) | (92,247) | (78,885) | ||||||||||||||||||||||
Income tax expense (benefit) | 0 | 0 | 0 | ||||||||||||||||||||||
Net Income (Loss) | (100,690) | (92,247) | (78,885) | ||||||||||||||||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries | 0 | (5,161) | 0 | ||||||||||||||||||||||
Net income (loss) attributable to common stockholders | (100,690) | (87,086) | $ (78,885) | ||||||||||||||||||||||
Investments | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Cash and cash equivalents | 56,436 | 73,138 | 56,436 | 56,436 | 73,138 | ||||||||||||||||||||
Restricted cash | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Derivative assets | 0 | 0 | |||||||||||||||||||||||
Other assets | 16,993 | 53,365 | 16,993 | 16,993 | 53,365 | ||||||||||||||||||||
Total assets | 73,429 | 126,503 | 73,429 | 73,429 | 126,503 | ||||||||||||||||||||
Debt | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Other liabilities | 167,634 | 137,857 | 167,634 | 167,634 | 137,857 | ||||||||||||||||||||
Total liabilities | 167,634 | 137,857 | 167,634 | 167,634 | 137,857 | ||||||||||||||||||||
Total Equity | (94,205) | (11,354) | (94,205) | (94,205) | (11,354) | ||||||||||||||||||||
Noncontrolling interests in equity of consolidated subsidiaries | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Total New Residential stockholders’ equity | (94,205) | (11,354) | (94,205) | (94,205) | (11,354) | ||||||||||||||||||||
Investments in equity method investees | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. | ||||||||||||||||||||||||
[2] | Earnings from investments in equity method investees is included in other income. | ||||||||||||||||||||||||
[3] | Net of deferred financing costs. | ||||||||||||||||||||||||
[4] | Excludes debt related to linked transactions (Note 10). |
INVESTMENTS IN EXCESS MORTGAG55
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS - Schedule of Activity Related to the Carrying Value of Investments in Excess MSRs (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Carrying Value of Investments in Excess MSRs | ||||
Beginning balance | $ 0 | |||
Ending balance | 659,483 | $ 0 | ||
Excess MSRs [Member] | ||||
Carrying Value of Investments in Excess MSRs | ||||
Beginning balance | 1,581,517 | [1] | 417,733 | |
Transfers from indirect ownership | 98,258 | |||
Purchases | 124 | 1,171,227 | ||
Interest income | 150,141 | 134,565 | ||
Other income | 2,802 | 2,999 | ||
Proceeds from repayments | (327,832) | (281,908) | ||
Change in fair value | (7,297) | 38,643 | ||
Ending balance | [1] | 1,399,455 | 1,581,517 | |
Excess MSRs [Member] | Nationstar [Member] | ||||
Carrying Value of Investments in Excess MSRs | ||||
Beginning balance | 698,304 | 409,076 | ||
Transfers from indirect ownership | 98,258 | |||
Purchases | 0 | 254,149 | ||
Interest income | 63,772 | 66,039 | ||
Other income | 2,802 | 2,999 | ||
Proceeds from repayments | (145,186) | (131,621) | ||
Change in fair value | (8,399) | (596) | ||
Ending balance | 611,293 | 698,304 | ||
Excess MSRs [Member] | SLS [Member] | ||||
Carrying Value of Investments in Excess MSRs | ||||
Beginning balance | [2] | 5,307 | 8,657 | |
Transfers from indirect ownership | [2] | 0 | ||
Purchases | [2] | 124 | 0 | |
Interest income | [2] | (244) | 180 | |
Other income | [2] | 0 | 0 | |
Proceeds from repayments | [2] | (1,015) | (1,291) | |
Change in fair value | [2] | (237) | (2,239) | |
Ending balance | [2] | 3,935 | 5,307 | |
Excess MSRs [Member] | Ocwen [Member] | ||||
Carrying Value of Investments in Excess MSRs | ||||
Beginning balance | [3] | 877,906 | 0 | |
Transfers from indirect ownership | [3] | 0 | ||
Purchases | [3] | 0 | 917,078 | |
Interest income | [3] | 86,613 | 68,346 | |
Other income | [3] | 0 | 0 | |
Proceeds from repayments | [3] | (181,631) | (148,996) | |
Change in fair value | [3] | 1,339 | 41,478 | |
Ending balance | [3] | $ 784,227 | $ 877,906 | |
[1] | Carrying Value represents the fair value of the pools or recapture agreements, as applicable. | |||
[2] | Specialized Loan Servicing LLC (“SLS”). See Note 6 for a description of the SLS Transaction. | |||
[3] | Ocwen services the loans underlying the Excess MSRs and Servicer Advances acquired from HLSS (Note 1). |
INVESTMENTS IN EXCESS MORTGAG56
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS - Summary of Investments in Excess MSRs (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Investment [Line Items] | ||||||
Weighted Average Life (Years) | 1 year 10 months 3 days | |||||
Carrying Value | $ 659,483 | $ 0 | ||||
Principal investment gain (loss) | (7,297) | 38,643 | $ 41,615 | |||
Original and Recaptured Pools [Member] | ||||||
Investment [Line Items] | ||||||
Principal investment gain (loss) | (11,221) | 34,936 | 35,000 | |||
Recapture Agreements [Member] | ||||||
Investment [Line Items] | ||||||
Principal investment gain (loss) | 3,924 | 3,707 | 6,615 | |||
Excess MSRs [Member] | ||||||
Investment [Line Items] | ||||||
UPB of Underlying Mortgages | $ 277,975,997 | $ 329,367,971 | ||||
Weighted Average Life (Years) | [1] | 6 years 4 months 24 days | 6 years 2 months 12 days | |||
Amortized Cost Basis | [2] | $ 1,258,588 | $ 1,433,354 | |||
Carrying Value | 1,399,455 | [3] | 1,581,517 | [3] | 417,733 | |
Excess MSRs [Member] | Nationstar [Member] | ||||||
Investment [Line Items] | ||||||
Carrying Value | 611,293 | 698,304 | $ 409,076 | |||
Excess MSRs [Member] | Agency [Member] | ||||||
Investment [Line Items] | ||||||
UPB of Underlying Mortgages | $ 78,295,454 | $ 93,441,696 | ||||
Weighted Average Life (Years) | [1] | 6 years 4 months 24 days | 6 years 4 months 24 days | |||
Amortized Cost Basis | [2] | $ 322,032 | $ 372,105 | |||
Carrying Value | [3] | 381,757 | 437,201 | |||
Excess MSRs [Member] | Agency [Member] | Original and Recaptured Pools [Member] | ||||||
Investment [Line Items] | ||||||
UPB of Underlying Mortgages | $ 78,295,454 | $ 93,441,696 | ||||
Weighted Average Life (Years) | [1] | 5 years 10 months 24 days | 5 years 9 months 18 days | |||
Amortized Cost Basis | [2] | $ 296,508 | $ 335,478 | |||
Carrying Value | [3] | $ 330,323 | $ 378,083 | |||
Excess MSRs [Member] | Agency [Member] | Original and Recaptured Pools [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4] | 32.50% | 32.50% | |||
Excess MSRs [Member] | Agency [Member] | Original and Recaptured Pools [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4] | 66.70% | 66.70% | |||
Excess MSRs [Member] | Agency [Member] | Original and Recaptured Pools [Member] | Weighted Average [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4] | 53.30% | 53.20% | |||
Excess MSRs [Member] | Agency [Member] | Original and Recaptured Pools [Member] | Fortress [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | 0.00% | 0.00% | ||||
Excess MSRs [Member] | Agency [Member] | Original and Recaptured Pools [Member] | Fortress [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | 40.00% | 40.00% | ||||
Excess MSRs [Member] | Agency [Member] | Original and Recaptured Pools [Member] | Nationstar [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | 20.00% | 20.00% | ||||
Excess MSRs [Member] | Agency [Member] | Original and Recaptured Pools [Member] | Nationstar [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | 35.00% | 35.00% | ||||
Excess MSRs [Member] | Agency [Member] | Recapture Agreements [Member] | ||||||
Investment [Line Items] | ||||||
UPB of Underlying Mortgages | $ 0 | $ 0 | ||||
Weighted Average Life (Years) | [1] | 12 years 3 months 18 days | 12 years | |||
Amortized Cost Basis | [2] | $ 25,524 | $ 36,627 | |||
Carrying Value | [3] | $ 51,434 | $ 59,118 | |||
Excess MSRs [Member] | Agency [Member] | Recapture Agreements [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4] | 32.50% | 32.50% | |||
Excess MSRs [Member] | Agency [Member] | Recapture Agreements [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4] | 66.70% | 66.70% | |||
Excess MSRs [Member] | Agency [Member] | Recapture Agreements [Member] | Weighted Average [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4] | 53.30% | 53.20% | |||
Excess MSRs [Member] | Agency [Member] | Recapture Agreements [Member] | Fortress [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | 0.00% | 0.00% | ||||
Excess MSRs [Member] | Agency [Member] | Recapture Agreements [Member] | Fortress [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | 40.00% | 40.00% | ||||
Excess MSRs [Member] | Agency [Member] | Recapture Agreements [Member] | Nationstar [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | 20.00% | 20.00% | ||||
Excess MSRs [Member] | Agency [Member] | Recapture Agreements [Member] | Nationstar [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | 35.00% | 35.00% | ||||
Excess MSRs [Member] | Non-Agency [Member] | ||||||
Investment [Line Items] | ||||||
UPB of Underlying Mortgages | [5] | $ 199,680,543 | $ 235,926,275 | |||
Weighted Average Life (Years) | [1],[5] | 6 years 4 months 24 days | 6 years 1 month 6 days | |||
Amortized Cost Basis | [2],[5] | $ 936,556 | $ 1,061,249 | |||
Carrying Value | [3],[5] | 1,017,698 | 1,144,316 | |||
Excess MSRs [Member] | Non-Agency [Member] | Original and Recaptured Pools [Member] | ||||||
Investment [Line Items] | ||||||
UPB of Underlying Mortgages | [5] | $ 78,209,375 | $ 94,923,975 | |||
Weighted Average Life (Years) | [1],[5] | 5 years 2 months 12 days | 5 years 2 months 12 days | |||
Amortized Cost Basis | [2],[5] | $ 183,775 | $ 210,691 | |||
Carrying Value | [3],[5] | $ 219,980 | $ 250,662 | |||
Excess MSRs [Member] | Non-Agency [Member] | Original and Recaptured Pools [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4],[5] | 33.30% | 33.30% | |||
Excess MSRs [Member] | Non-Agency [Member] | Original and Recaptured Pools [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4],[5] | 100.00% | 80.00% | |||
Excess MSRs [Member] | Non-Agency [Member] | Original and Recaptured Pools [Member] | Weighted Average [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4],[5] | 59.40% | 58.90% | |||
Excess MSRs [Member] | Non-Agency [Member] | Original and Recaptured Pools [Member] | Fortress [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [5] | 0.00% | 0.00% | |||
Excess MSRs [Member] | Non-Agency [Member] | Original and Recaptured Pools [Member] | Fortress [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [5] | 50.00% | 50.00% | |||
Excess MSRs [Member] | Non-Agency [Member] | Original and Recaptured Pools [Member] | Nationstar [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [5] | 0.00% | 0.00% | |||
Excess MSRs [Member] | Non-Agency [Member] | Original and Recaptured Pools [Member] | Nationstar [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [5] | 33.30% | 33.30% | |||
Excess MSRs [Member] | Non-Agency [Member] | Recapture Agreements [Member] | ||||||
Investment [Line Items] | ||||||
UPB of Underlying Mortgages | [5] | $ 0 | $ 0 | |||
Weighted Average Life (Years) | [1],[5] | 12 years 2 months 12 days | 12 years 3 months 18 days | |||
Amortized Cost Basis | [2],[5] | $ 11,370 | $ 14,130 | |||
Carrying Value | [3],[5] | $ 13,491 | $ 15,748 | |||
Excess MSRs [Member] | Non-Agency [Member] | Recapture Agreements [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4],[5] | 33.30% | 33.30% | |||
Excess MSRs [Member] | Non-Agency [Member] | Recapture Agreements [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4],[5] | 100.00% | 80.00% | |||
Excess MSRs [Member] | Non-Agency [Member] | Recapture Agreements [Member] | Weighted Average [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [4],[5] | 59.40% | 58.90% | |||
Excess MSRs [Member] | Non-Agency [Member] | Recapture Agreements [Member] | Fortress [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [5] | 0.00% | 0.00% | |||
Excess MSRs [Member] | Non-Agency [Member] | Recapture Agreements [Member] | Fortress [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [5] | 50.00% | 50.00% | |||
Excess MSRs [Member] | Non-Agency [Member] | Recapture Agreements [Member] | Nationstar [Member] | Lower Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [5] | 0.00% | 0.00% | |||
Excess MSRs [Member] | Non-Agency [Member] | Recapture Agreements [Member] | Nationstar [Member] | Upper Range [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [5] | 33.30% | 33.30% | |||
Excess MSRs [Member] | Non-Agency [Member] | Serviced Pools [Member] | ||||||
Investment [Line Items] | ||||||
UPB of Underlying Mortgages | [5] | $ 121,471,168 | $ 141,002,300 | |||
Interest in Excess MSR | [4],[5] | 100.00% | 100.00% | |||
Weighted Average Life (Years) | [1] | 6 years 7 months 6 days | [5] | 6 years 2 months 12 days | ||
Amortized Cost Basis | [2],[5] | $ 741,411 | $ 836,428 | |||
Carrying Value | [3],[5] | $ 784,227 | $ 877,906 | |||
Excess MSRs [Member] | Non-Agency [Member] | Serviced Pools [Member] | Fortress [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [5] | 0.00% | 0.00% | |||
Excess MSRs [Member] | Non-Agency [Member] | Serviced Pools [Member] | Nationstar [Member] | ||||||
Investment [Line Items] | ||||||
Interest in Excess MSR | [5] | 0.00% | 0.00% | |||
Corporate Joint Venture [Member] | Servicer Advances [Member] | ||||||
Investment [Line Items] | ||||||
UPB of Underlying Mortgages | [6] | $ 186,362,657 | $ 220,256,804 | |||
[1] | Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment. | |||||
[2] | The amortized cost basis of the recapture agreements is determined based on the relative fair values of the recapture agreements and related Excess MSRs at the time they were acquired. | |||||
[3] | Carrying Value represents the fair value of the pools or recapture agreements, as applicable. | |||||
[4] | Amounts in parentheses represent weighted averages. | |||||
[5] | New Residential also invested in related Servicer Advances, including the basic fee component of the related MSR as of December 31, 2016 and 2015 (Note 6) on $186.4 billion and $220.3 billion UPB, respectively, underlying these Excess MSRs. | |||||
[6] | The following types of advances comprise the investments in Servicer Advances: December 31, 2016 2015Principal and interest advances$1,489,929 $2,229,468Escrow advances (taxes and insurance advances)2,613,050 3,687,559Foreclosure advances1,514,780 1,661,083 Total$5,617,759 $7,578,110 |
INVESTMENTS IN EXCESS MORTGAG57
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS - Narrative (Details) - MSRs [Member] - Excess MSRs Investees [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Investment [Line Items] | ||
Weighted average discount rate, used to value investments in excess MSRs | 9.80% | 9.80% |
Ocwen [Member] | ||
Investment [Line Items] | ||
Proceeds from recapture agreement | $ 0 |
INVESTMENTS IN EXCESS MORTGAG58
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS - Summary of Financial Results of Excess MSR Joint Ventures (Details) - Excess MSRs Investees [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of MSRs [Line Items] | |||
Excess MSR assets | $ 372,391 | $ 421,999 | |
Other assets | 17,184 | 12,442 | |
Other liabilities | 0 | 0 | |
Equity | 389,575 | 434,441 | |
New Residential’s investment | $ 194,788 | $ 217,221 | |
New Residential’s ownership | 50.00% | 50.00% | |
Interest income | $ 36,502 | $ 51,811 | $ 67,698 |
Other income (loss) | (3,359) | 10,615 | 46,961 |
Expenses | (91) | (107) | (99) |
Net income | $ 33,052 | $ 62,319 | $ 114,560 |
INVESTMENTS IN EXCESS MORTGAG59
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS - Summary of Excess MSRs Made Through Equity Method Investees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Schedule of MSRs [Line Items] | |||
Mortgage servicing rights, at fair value | $ 659,483 | $ 0 | |
Weighted Average Life (Years) | 1 year 10 months 3 days | ||
Excess MSRs Investees [Member] | |||
Schedule of MSRs [Line Items] | |||
Unpaid Principal Balance | $ 60,677,300 | $ 73,058,050 | |
New Residential’s ownership | 50.00% | 50.00% | |
Amortized Cost Basis | [1] | $ 277,079 | $ 320,759 |
Mortgage servicing rights, at fair value | [2] | $ 372,391 | $ 421,999 |
Weighted Average Life (Years) | [3] | 6 years 5 months 20 days | 6 years 7 months |
Excess MSRs Investees [Member] | Agency [Member] | Original and Recaptured Pools [Member] | |||
Schedule of MSRs [Line Items] | |||
Unpaid Principal Balance | $ 60,677,300 | $ 73,058,050 | |
Investee Interest in Excess MSR | [4] | 66.70% | 66.70% |
New Residential’s ownership | 50.00% | 50.00% | |
Amortized Cost Basis | [1] | $ 247,105 | $ 275,338 |
Mortgage servicing rights, at fair value | [2] | $ 314,401 | $ 351,275 |
Weighted Average Life (Years) | [3] | 5 years 9 months 8 days | 5 years 8 months 15 days |
Excess MSRs Investees [Member] | Agency [Member] | Recapture Agreements [Member] | |||
Schedule of MSRs [Line Items] | |||
Unpaid Principal Balance | $ 0 | $ 0 | |
Investee Interest in Excess MSR | [4] | 66.70% | 66.70% |
New Residential’s ownership | 50.00% | 50.00% | |
Amortized Cost Basis | [1] | $ 29,974 | $ 45,421 |
Mortgage servicing rights, at fair value | [2] | $ 57,990 | $ 70,724 |
Weighted Average Life (Years) | [3] | 12 years 2 months 20 days | 11 years 10 months 25 days |
[1] | Represents the amortized cost basis of the equity method investees in which New Residential holds a 50% interest. The amortized cost basis of the recapture agreements is determined based on the relative fair values of the recapture agreements and related Excess MSRs at the time they were acquired. | ||
[2] | Represents the carrying value of the Excess MSRs held in equity method investees, in which New Residential holds a 50% interest. Carrying value represents the fair value of the pools or recapture agreements, as applicable. | ||
[3] | The weighted average life represents the weighted average expected timing of the receipt of cash flows of each investment. | ||
[4] | The remaining interests are held by Nationstar. |
INVESTMENTS IN EXCESS MORTGAG60
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS - Summary of Financial Results of Excess MSR Joint Ventures - Roll Forward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Recurring Basis [Member] | ||
Increase (Decrease) in Equity Method Investments [Roll Forward] | ||
Beginning balance | $ 217,221 | $ 330,876 |
Contributions to equity method investees | 0 | 0 |
Transfers to direct ownership | 0 | (98,258) |
Distributions of earnings from equity method investees | (22,046) | (37,874) |
Distributions of capital from equity method investees | (16,913) | (8,683) |
Change in fair value of investments in equity method investees | 16,526 | 31,160 |
Ending balance | $ 194,788 | $ 217,221 |
Excess MSRs Investees [Member] | ||
Schedule of MSRs [Line Items] | ||
New Residential’s ownership | 50.00% | 50.00% |
Increase (Decrease) in Equity Method Investments [Roll Forward] | ||
Beginning balance | $ 217,221 | |
Ending balance | $ 194,788 | $ 217,221 |
MSRs [Member] | Excess MSRs Investees [Member] | ||
Schedule of MSRs [Line Items] | ||
New Residential’s ownership | 50.00% |
INVESTMENTS IN EXCESS MORTGAG61
INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS - Summary of the Geographic Distribution of the Underlying Residential Mortgage Loans of the Direct Investments in Excess MSRs (Details) - Mortgage Loans [Member] - Excess MSRs [Member] | Dec. 31, 2016 | Dec. 31, 2015 |
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 100.00% | 100.00% |
California [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 24.10% | 24.20% |
Florida [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 8.60% | 8.60% |
New York [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 7.90% | 7.40% |
Texas [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 4.60% | 4.60% |
New Jersey [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 4.20% | 4.10% |
Maryland [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 3.70% | 3.70% |
Illinois [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 3.50% | 3.50% |
Virginia [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 3.10% | 3.10% |
Georgia [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 3.10% | 3.10% |
Massachusetts [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 2.70% | 2.70% |
Washington [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 2.60% | 2.70% |
Arizona [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 2.50% | 2.50% |
Other U.S. [Member] | ||
Concentration Risk [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 29.40% | 29.80% |
INVESTMENTS IN MORTGAGE SERVI62
INVESTMENTS IN MORTGAGE SERVICING RIGHTS - Narrative (Details) - New Residential Mortgage LLC [Member] - USD ($) $ in Millions | Dec. 01, 2016 | Nov. 10, 2016 | Aug. 08, 2016 | Dec. 28, 2016 |
Ditech Financial LLC [Member] | ||||
Schedule of MSRs [Line Items] | ||||
Payments to acquire mortgage servicing rights (MSR) | $ 26.4 | $ 211.4 | ||
Payments to acquire MSRs, servicer advances | 3.9 | 27.4 | ||
Walter Capital Opportunity [Member] | ||||
Schedule of MSRs [Line Items] | ||||
Payments to acquire mortgage servicing rights (MSR) | $ 244.3 | |||
Payments to acquire MSRs, servicer advances | 34.8 | |||
FirstKey Mortgage, LLC [Member] | ||||
Schedule of MSRs [Line Items] | ||||
Payments to acquire mortgage servicing rights (MSR) | 89.1 | |||
Payments to acquire MSRs, servicer advances | 2.1 | |||
Mortgage Servicing Rights [Member] | Ditech Financial LLC [Member] | ||||
Schedule of MSRs [Line Items] | ||||
Unpaid Principal Balance | 4,800 | $ 32,300 | ||
Long-term purchase commitment, period (in years) | 3 years | |||
Long-term purchase commitment, renewal period (in years) | 1 year | |||
Long-term purchase commitment, termination notice term (in days) | 30 days | |||
Mortgage Servicing Rights [Member] | Walter Capital Opportunity [Member] | ||||
Schedule of MSRs [Line Items] | ||||
Unpaid Principal Balance | $ 32,500 | |||
Mortgage Servicing Rights [Member] | FirstKey Mortgage, LLC [Member] | ||||
Schedule of MSRs [Line Items] | ||||
Unpaid Principal Balance | $ 12,500 | |||
Mortgage Servicing Rights [Member] | PHH Mortgage Corporation [Member] | ||||
Schedule of MSRs [Line Items] | ||||
Unpaid Principal Balance | $ 72,000 | |||
Mortgage Servicing Rights, Subservicing Agreement [Member] | Ditech Financial LLC [Member] | ||||
Schedule of MSRs [Line Items] | ||||
Long-term purchase commitment, period (in years) | 1 year | |||
Long-term purchase commitment, renewal period (in years) | 1 year | |||
Long-term purchase commitment, weighted average subservicing rate | 0.077% |
INVESTMENTS IN MORTGAGE SERVI63
INVESTMENTS IN MORTGAGE SERVICING RIGHTS - Schedule of Servicing Fee Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Transfers and Servicing [Abstract] | ||||||||
Servicing fee revenue | $ 29,168 | |||||||
Ancillary and other fees | 676 | |||||||
Servicing fee revenue and fees | 29,844 | |||||||
Amortization of servicing rights | (15,354) | |||||||
Change in valuation inputs and assumptions | 103,679 | |||||||
Servicing revenue, net | $ 118,169 | $ 0 | $ 0 | $ 0 | $ 118,169 | $ 0 | $ 0 | |
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. |
INVESTMENTS IN MORTGAGE SERVI64
INVESTMENTS IN MORTGAGE SERVICING RIGHTS - Schedule of Activity Related to the Carrying Value of Investments in MSRs (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($) | ||
Schedule of MSRs [Line Items] | ||
Beginning balance | $ 0 | |
Amortization of servicing rights | (15,354) | |
Change in valuation inputs and assumptions | 103,679 | |
Ending balance | 659,483 | |
MSRs [Member] | ||
Schedule of MSRs [Line Items] | ||
Beginning balance | 0 | |
Purchases | 571,158 | |
Amortization of servicing rights | (15,354) | [1] |
Change in valuation inputs and assumptions | 103,679 | |
Ending balance | 659,483 | |
MSRs [Member] | Ditech Financial LLC [Member] | ||
Schedule of MSRs [Line Items] | ||
Beginning balance | 0 | |
Purchases | 482,102 | |
Amortization of servicing rights | (13,895) | [1] |
Change in valuation inputs and assumptions | 77,804 | |
Ending balance | 546,011 | |
MSRs [Member] | FirstKey Mortgage, LLC [Member] | ||
Schedule of MSRs [Line Items] | ||
Beginning balance | 0 | |
Purchases | 89,056 | |
Amortization of servicing rights | (1,459) | [1] |
Change in valuation inputs and assumptions | 25,875 | |
Ending balance | $ 113,472 | |
[1] | Based on the ratio of the current UPB of the underlying residential mortgage loans relative to the original UPB of the underlying residential mortgage loans. |
INVESTMENTS IN MORTGAGE SERVI65
INVESTMENTS IN MORTGAGE SERVICING RIGHTS - Schedule of Investment in MSRs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Servicing Asset at Amortized Cost [Line Items] | |||
Weighted Average Life (Years) | 1 year 10 months 3 days | ||
Carrying Value | $ 659,483 | $ 0 | |
MSRs [Member] | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Discount rate | 12.00% | ||
UPB of Underlying Mortgages | $ 79,935,302 | ||
Weighted Average Life (Years) | [1] | 7 years 10 days | |
Amortized Cost Basis | $ 555,804 | ||
Carrying Value | [2] | 659,483 | |
MSRs [Member] | Ditech Financial LLC [Member] | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB of Underlying Mortgages | $ 67,560,362 | ||
Weighted Average Life (Years) | [1] | 7 years 28 days | |
Amortized Cost Basis | $ 468,207 | ||
Carrying Value | [2] | 546,011 | |
MSRs [Member] | FirstKey Mortgage, LLC [Member] | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB of Underlying Mortgages | $ 12,374,940 | ||
Weighted Average Life (Years) | [1] | 6 years 9 months 15 days | |
Amortized Cost Basis | $ 87,597 | ||
Carrying Value | [2] | $ 113,472 | |
[1] | Weighted Average Life represents the weighted average expected timing of the receipt of expected cash flows for this investment. | ||
[2] | Carrying Value represents fair value. As of December 31, 2016, a weighted average discount rate of 12.0% was used to value New Residential’s investments in MSRs. |
INVESTMENTS IN MORTGAGE SERVI66
INVESTMENTS IN MORTGAGE SERVICING RIGHTS - Summary of the Geographic Distribution of the Underlying Residential Mortgage Loans of the MSRs (Details) - MSRs [Member] - Mortgage Loans [Member] | Dec. 31, 2016 |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 100.00% |
California [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 20.50% |
Florida [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 7.30% |
Texas [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 6.30% |
New Jersey [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 4.50% |
Illinois [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 4.10% |
Massachusetts [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 4.10% |
Arizona [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 3.30% |
Washington [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 3.20% |
Michigan [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 3.10% |
Maryland [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 3.00% |
Other U.S. [Member] | |
Schedule of MSRs [Line Items] | |
Percentage of Total Outstanding Unpaid Principal Amount | 40.60% |
INVESTMENTS IN SERVICER ADVAN67
INVESTMENTS IN SERVICER ADVANCES - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2014 | |
Advance Purchaser LLC [Member] | |||
Investment [Line Items] | |||
Capital distributed to third-party co-investors | $ 286 | ||
Capital distributed to New Residential | $ 229.6 | ||
Nationstar [Member] | |||
Investment [Line Items] | |||
Servicer basic fee, percent | 9.30% | ||
Performance fee, percent (up to) | 100.00% | ||
SLS [Member] | |||
Investment [Line Items] | |||
Servicing fee basis points | 0.1075% | ||
SLS [Member] | Excess MSRs [Member] | |||
Investment [Line Items] | |||
Percentage of Excess MSRs acquired | 50.00% | ||
Fortress [Member] | Excess MSRs [Member] | |||
Investment [Line Items] | |||
Percentage of additional Excess MSRs acquired | 50.00% | ||
Ocwen Loan Servicing LLC [Member] | |||
Investment [Line Items] | |||
Servicing asset fee, percent | 12.00% | ||
Servicing fee basis points | 0.059% | ||
Ocwen Loan Servicing LLC [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Investment [Line Items] | |||
Variable interest rate spread | 2.75% | ||
Corporate Joint Venture [Member] | |||
Investment [Line Items] | |||
New Residential’s ownership | 45.80% | ||
Funded capital commitments | $ 312.7 | ||
Corporate Joint Venture [Member] | Noncontrolling Third-party Investors [Member] | |||
Investment [Line Items] | |||
Percentage acquired | 1.27% | ||
Payments to acquire equity method investments | $ 3.3 | ||
Funded capital commitments | $ 389.6 |
INVESTMENTS IN SERVICER ADVAN68
INVESTMENTS IN SERVICER ADVANCES - Summary of Investments in Servicer Advances (Details) - Corporate Joint Venture [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Investments in and Advances to Affiliates [Line Items] | |||
Amortized Cost Basis | [1] | $ 5,687,635 | $ 7,400,068 |
Carrying Value | [1],[2] | $ 5,706,593 | $ 7,426,794 |
Weighted Average Discount Rate | [1] | 5.60% | 5.60% |
Weighted Average Yield | [1] | 5.50% | 5.50% |
Weighted Average Life (Years) | [1],[3] | 4 years 7 months 1 day | 4 years 5 months 9 days |
Change in Fair Value Recorded in Other Income for Year then Ended | [1] | $ (7,768) | $ (57,491) |
Face amount | 100,000 | 431,000 | |
Aggregate carrying value | $ 100,100 | $ 430,300 | |
[1] | Excludes asset-backed securities collateralized by Servicer Advances, which have aggregate face amounts of $100.0 million and $431.0 million and aggregate carrying values of $100.1 million and $430.3 million as of December 31, 2016 and 2015, respectively. See Note 7 for details related to these securities. | ||
[2] | Carrying value represents the fair value of the investments in Servicer Advances, including the basic fee component of the related MSRs. | ||
[3] | Weighted Average Life represents the weighted average expected timing of the receipt of expected net cash flows for this investment. |
INVESTMENTS IN SERVICER ADVAN69
INVESTMENTS IN SERVICER ADVANCES - Summary of Investments in Servicer Advances - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Investments in and Advances to Affiliates [Line Items] | |||
Outstanding Servicer Advances | [1] | $ 5,706,593 | $ 7,426,794 |
Face Amount of Notes and Bonds Payable | 13,208,783 | ||
Investments | 15,780,680 | 12,884,846 | |
Non-Agency Bonds [Member] | |||
Investments in and Advances to Affiliates [Line Items] | |||
Investments | 0 | ||
Corporate Joint Venture [Member] | Servicer Advances [Member] | |||
Investments in and Advances to Affiliates [Line Items] | |||
UPB of Underlying Mortgages | [2] | 186,362,657 | 220,256,804 |
Outstanding Servicer Advances | [2] | $ 5,617,759 | $ 7,578,110 |
Servicer Advances to UPB of Underlying Residential Mortgage Loans | [2] | 3.00% | 3.40% |
Face Amount of Notes and Bonds Payable | [2] | $ 5,560,412 | $ 7,058,094 |
Gross Loan-to-Value | [2],[3] | 94.50% | 91.20% |
Net Loan-to-Value | [2],[3],[4] | 93.40% | 90.20% |
Gross Cost of Funds | [2],[5] | 3.20% | 3.40% |
Net Cost of Funds | [2],[5] | 2.80% | 2.60% |
Gross LTV, including deferred servicing fees | 89.70% | ||
Net LTV, including deferred servicing fees | 88.60% | ||
Gross LTV, if sold | 96.10% | ||
Net LTV, if sold | 95.00% | ||
Corporate Joint Venture [Member] | Non-Agency Bonds [Member] | |||
Investments in and Advances to Affiliates [Line Items] | |||
Investments | $ 94,400 | ||
[1] | New Residential’s Consolidated Balance Sheets include the assets and liabilities of certain consolidated VIEs, the Buyer (Note 6) and the Consumer Loan SPVs (Note 9), which primarily hold investments in Servicer Advances and consumer loans, respectively, financed with notes and bonds payable. The Buyer’s balance sheet is included in Note 6 and the Consumer Loan SPVs’ balance sheet is included in Note 9. The creditors of the Buyer and the Consumer Loan SPVs do not have recourse to the general credit of New Residential and the assets of the Buyer and the Consumer Loan SPVs are not directly available to satisfy New Residential’s obligations. | ||
[2] | The following types of advances comprise the investments in Servicer Advances: December 31, 2016 2015Principal and interest advances$1,489,929 $2,229,468Escrow advances (taxes and insurance advances)2,613,050 3,687,559Foreclosure advances1,514,780 1,661,083 Total$5,617,759 $7,578,110 | ||
[3] | Based on outstanding Servicer Advances, excluding purchased but unsettled Servicer Advances and certain deferred servicing fees (“DSF”) which New Residential receives financing on. If New Residential were to include these DSF in the servicer advance balance, gross and net LTV as of December 31, 2016 would be 89.7% and 88.6%, respectively. Also excludes retained Non-Agency bonds with a current face amount of $94.4 million from the outstanding Servicer Advances debt. If New Residential were to sell these bonds, gross and net LTV as of December 31, 2016 would be 96.1% and 95.0%, respectively. | ||
[4] | Ratio of face amount of borrowings to par amount of Servicer Advance collateral, net of any general reserve. | ||
[5] | Annualized measure of the cost associated with borrowings. Gross Cost of Funds primarily includes interest expense and facility fees. Net Cost of Funds excludes facility fees. |
INVESTMENTS IN SERVICER ADVAN70
INVESTMENTS IN SERVICER ADVANCES - Summary of Investments in Servicer Advances - Components of Funded Advances (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Investment [Line Items] | |||
Total | [1] | $ 5,706,593 | $ 7,426,794 |
Corporate Joint Venture [Member] | Servicer Advances [Member] | |||
Investment [Line Items] | |||
Principal and interest advances | 1,489,929 | 2,229,468 | |
Escrow advances (taxes and insurance advances) | 2,613,050 | 3,687,559 | |
Foreclosure advances | 1,514,780 | 1,661,083 | |
Total | [2] | $ 5,617,759 | $ 7,578,110 |
[1] | New Residential’s Consolidated Balance Sheets include the assets and liabilities of certain consolidated VIEs, the Buyer (Note 6) and the Consumer Loan SPVs (Note 9), which primarily hold investments in Servicer Advances and consumer loans, respectively, financed with notes and bonds payable. The Buyer’s balance sheet is included in Note 6 and the Consumer Loan SPVs’ balance sheet is included in Note 9. The creditors of the Buyer and the Consumer Loan SPVs do not have recourse to the general credit of New Residential and the assets of the Buyer and the Consumer Loan SPVs are not directly available to satisfy New Residential’s obligations. | ||
[2] | The following types of advances comprise the investments in Servicer Advances: December 31, 2016 2015Principal and interest advances$1,489,929 $2,229,468Escrow advances (taxes and insurance advances)2,613,050 3,687,559Foreclosure advances1,514,780 1,661,083 Total$5,617,759 $7,578,110 |
INVESTMENTS IN SERVICER ADVAN71
INVESTMENTS IN SERVICER ADVANCES - Schedule of Interest Income Related to Investments in Servicer Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Investment [Line Items] | |||
Interest income, gross of amounts attributable to servicer compensation | $ 29,168 | ||
Servicer Advance Investments [Member] | |||
Investment [Line Items] | |||
Interest income, gross of amounts attributable to servicer compensation | 723,193 | $ 754,717 | $ 290,309 |
Amounts attributable to base servicer compensation | (79,868) | (97,351) | (26,092) |
Amounts attributable to incentive servicer compensation | (278,975) | (305,050) | (74,011) |
Interest income from investments in Servicer Advances | $ 364,350 | $ 352,316 | $ 190,206 |
INVESTMENTS IN SERVICER ADVAN72
INVESTMENTS IN SERVICER ADVANCES - Summary of Information on the Assets and Liabilities related to Consolidated VIE (Details) - VIE [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets | |||
Servicer advances, at fair value | $ 1,731,633 | $ 2,344,245 | |
Cash and cash equivalents | 37,854 | 40,761 | |
All other assets | 19,799 | 25,092 | |
Total assets | [1] | 1,789,286 | 2,410,098 |
Liabilities | |||
Notes payable | 1,464,851 | 2,060,347 | |
All other liabilities | 5,187 | 6,111 | |
Total liabilities | [1] | $ 1,470,038 | $ 2,066,458 |
[1] | The creditors of the Buyer do not have recourse to the general credit of New Residential and the assets of the Buyer are not directly available to satisfy New Residential’s obligations. |
INVESTMENTS IN SERVICER ADVAN73
INVESTMENTS IN SERVICER ADVANCES - Schedule of Interest Income Related to Investments in Servicer Advances - Others' Interests (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Corporate Joint Venture [Member] | ||||
Investment [Line Items] | ||||
New Residential’s investment | $ 319,248 | $ 343,640 | ||
Others’ ownership interest | 45.80% | |||
Net income in joint venture | $ 72,159 | $ 33,180 | $ 159,374 | |
Average ownership percentage | 44.40% | 44.50% | 44.00% | |
Others [Member] | ||||
Investment [Line Items] | ||||
New Residential’s investment | $ 173,057 | $ 190,647 | ||
Others’ ownership interest | 54.20% | 55.50% | ||
Net income in joint venture | $ 40,136 | $ 18,407 | $ 89,222 | |
Others' ownership interest as a percent of total | [1] | 55.60% | 55.50% | 56.00% |
[1] | As a result, New Residential owned 44.4%, 44.5% and 44.0% of the Buyer, on average during the years ended December 31, 2016, 2015 and 2014, respectively. |
INVESTMENTS IN REAL ESTATE SE74
INVESTMENTS IN REAL ESTATE SECURITIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Schedule of Available-for-sale Securities [Line Items] | ||||||||||||
Other-than-temporary impairment (OTTI) on securities | $ 2,426 | [1] | $ 1,765 | $ 2,819 | $ 3,254 | $ 2,494 | $ 1,574 | $ 649 | $ 1,071 | $ 10,264 | $ 5,788 | $ 1,391 |
Real estate securities acquired during the period with credit quality deterioration, face amount | 2,510,300 | 583,600 | ||||||||||
Real estate securities acquired during the period with credit quality deterioration, expected cash flows | 2,490,700 | 502,300 | 2,490,700 | 502,300 | ||||||||
Real estate securities acquired during the period with credit quality deterioration, fair value | 1,538,500 | $ 329,500 | 1,538,500 | $ 329,500 | ||||||||
Non-Agency RMBS [Member] | ||||||||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||||||||
Face amount of securities purchased, unsettled | 4,300 | 4,300 | ||||||||||
Purchase of real estate securities, unsettled | 2,800 | 2,800 | ||||||||||
Agency RMBS [Member] | ||||||||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||||||||
Face amount of securities sold | 1,600,000 | 1,600,000 | ||||||||||
Face amount of securities purchased, unsettled | 1,300,000 | 1,300,000 | ||||||||||
Sale price of securities sold | 1,700,000 | 1,700,000 | ||||||||||
Purchase of real estate securities, unsettled | $ 1,400,000 | $ 1,400,000 | ||||||||||
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. |
INVESTMENTS IN REAL ESTATE SE75
INVESTMENTS IN REAL ESTATE SECURITIES - Schedule of Investment in Real Estate Securities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Agency RMBS [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Face amount of securities purchased | $ 7,163.3 | $ 5,140.1 |
Purchase price | 7,467.6 | 5,333.7 |
Face amount of securities sold | 6,466.1 | 5,772.5 |
Amortized cost of securities sold | 6,749.4 | 5,997.5 |
Sale price of securities sold | 6,740 | 6,007.6 |
Gain (loss) on securities sold | (9.4) | 10.1 |
Non-Agency RMBS [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Face amount of securities purchased | 5,431.6 | 2,397.9 |
Purchase price | 2,746.3 | 1,288.9 |
Face amount of securities sold | 332.5 | 476.4 |
Amortized cost of securities sold | 284.7 | 422.7 |
Sale price of securities sold | 266.6 | 425.7 |
Gain (loss) on securities sold | $ (18.1) | $ 3 |
INVESTMENTS IN REAL ESTATE SE76
INVESTMENTS IN REAL ESTATE SECURITIES - Summary of Real Estate Securities (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)securitybond | Dec. 31, 2015USD ($)security | ||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | $ 8,788,957 | $ 4,418,552 | |
Amortized Cost Basis | 4,948,327 | 2,498,078 | |
Carrying Value | $ 5,073,858 | 2,501,881 | |
Weighted Average Life (Years) | 1 year 10 months 3 days | ||
Investments | $ 15,780,680 | 12,884,846 | |
Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Number of bonds which New Residential was unable to obtain rating information | bond | 193 | ||
Investments | $ 341,900 | ||
Residual Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments | 246,800 | ||
Non-Agency Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investments | 0 | ||
Agency RMBS [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | [1],[2] | 1,486,739 | 884,578 |
Amortized Cost Basis | [1],[2] | 1,532,421 | 918,633 |
Gross Unrealized Gains | [1],[2] | 1,803 | 183 |
Gross Unrealized Losses | [1],[2] | (3,926) | (1,218) |
Carrying Value | [1],[2],[3] | $ 1,530,298 | $ 917,598 |
Number of Securities | security | [1],[2] | 57 | 28 |
Weighted Average Rating | [1],[2],[4] | AAA | AAA |
Weighted Average Coupon | [1],[2],[5] | 3.45% | 3.28% |
Weighted Average Yield | [1],[2] | 2.94% | 2.75% |
Weighted Average Life (Years) | [1],[2],[6] | 9 years 1 month 15 days | 6 years 7 months 18 days |
Agency RMBS [Member] | Fixed Rate Residential Mortgage [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | $ 1,300,000 | $ 700,000 | |
Agency RMBS [Member] | Adjustable Rate Residential Mortgage [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | 200,000 | 200,000 | |
Non-Agency RMBS [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | [7],[8],[9] | 7,302,218 | 3,533,974 |
Amortized Cost Basis | [7],[8],[9] | 3,415,906 | 1,579,445 |
Gross Unrealized Gains | [8],[9] | 147,206 | 22,964 |
Gross Unrealized Losses | [8],[9] | (19,552) | (18,126) |
Carrying Value | [3],[8],[9] | $ 3,543,560 | $ 1,584,283 |
Number of Securities | security | [8],[9] | 536 | 240 |
Weighted Average Rating | [4],[8],[9] | CCC- | BB+ |
Weighted Average Coupon | [5],[8],[9] | 1.59% | 1.63% |
Weighted Average Yield | [8],[9] | 5.88% | 5.03% |
Weighted Average Life (Years) | [6],[8],[9] | 7 years 10 months 18 days | 6 years 9 months 7 days |
Weighted Average Principal Subordination | [8],[9],[10] | 8.80% | 12.10% |
Non-Agency RMBS [Member] | Fixed Rate Residential Mortgage [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | $ 1,200,000 | $ 2,300,000 | |
Residual and interest - only notional amount | 800,000 | 1,700,000 | |
Non-Agency RMBS [Member] | Adjustable Rate Residential Mortgage [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | 6,100,000 | 1,300,000 | |
Residual and interest - only notional amount | 2,100,000 | 164,400 | |
Investments in Real Estate Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | 8,788,957 | 4,418,552 | |
Amortized Cost Basis | 4,948,327 | 2,498,078 | |
Gross Unrealized Gains | 149,009 | 23,147 | |
Gross Unrealized Losses | (23,478) | (19,344) | |
Carrying Value | [3] | $ 5,073,858 | $ 2,501,881 |
Number of Securities | security | 593 | 268 | |
Weighted Average Rating | [4] | BB- | A- |
Weighted Average Coupon | [5] | 2.16% | 2.69% |
Weighted Average Yield | 4.97% | 4.19% | |
Weighted Average Life (Years) | [6] | 8 years 3 months 6 days | 6 years 8 months 19 days |
Servicer Advances [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | $ 100,000 | $ 431,000 | |
Amortized Cost Basis | 99,838 | 430,951 | |
Gross Unrealized Gains | 310 | 0 | |
Gross Unrealized Losses | 0 | (661) | |
Carrying Value | $ 100,148 | $ 430,290 | |
Number of Securities | security | 1 | 5 | |
Weighted Average Rating | AAA | AA+ | |
Weighted Average Coupon | 3.21% | 2.69% | |
Weighted Average Yield | 3.10% | 2.70% | |
Weighted Average Life (Years) | 8 months 28 days | 1 year 23 days | |
Interest-Only-Strip [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | $ 2,062,647 | $ 1,522,256 | |
Amortized Cost Basis | 113,342 | 82,101 | |
Gross Unrealized Gains | 5,270 | 5,227 | |
Gross Unrealized Losses | (6,555) | (4,348) | |
Carrying Value | $ 112,057 | $ 82,980 | |
Number of Securities | security | 28 | 12 | |
Weighted Average Rating | AA+ | AA+ | |
Weighted Average Coupon | 1.85% | 1.84% | |
Weighted Average Yield | 5.30% | 7.11% | |
Weighted Average Life (Years) | 2 years 10 months 10 days | 4 years 6 days | |
Servicing Strip [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | $ 456,629 | ||
Amortized Cost Basis | 5,613 | ||
Gross Unrealized Gains | 311 | ||
Gross Unrealized Losses | (1) | ||
Carrying Value | $ 5,923 | ||
Number of Securities | security | 11 | ||
Weighted Average Rating | NA | ||
Weighted Average Coupon | 0.27% | ||
Weighted Average Yield | 21.74% | ||
Weighted Average Life (Years) | 6 years 2 months 3 days | ||
[1] | Includes securities issued or guaranteed by U.S. Government agencies such as Fannie Mae or Freddie Mac. | ||
[2] | The total outstanding face amount was $1.3 billion and $0.7 billion for fixed rate securities and $0.2 billion and $0.2 billion for floating rate securities as of December 31, 2016 and 2015, respectively. | ||
[3] | Fair value, which is equal to carrying value for all securities. See Note 12 regarding the estimation of fair value. | ||
[4] | Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. This excludes the ratings of the collateral underlying 193 bonds with a carrying value of $341.9 million which either have never been rated or for which rating information is no longer provided. For each security rated by multiple rating agencies, the lowest rating is used. New Residential used an implied AAA rating for the Agency RMBS. Ratings provided were determined by third party rating agencies, and represent the most recent credit ratings available as of the reporting date and may not be current. | ||
[5] | Excludes residual bonds, and certain other Non-Agency bonds, with a carrying value of $246.8 million and $0.0 million, respectively, for which no coupon payment is expected. | ||
[6] | The weighted average life is based on the timing of expected principal reduction on the assets. | ||
[7] | Includes New Residential’s investments in interest-only notes for which the fair value option for financial instruments was elected. | ||
[8] | Includes other ABS consisting primarily of (i) interest-only securities and servicing strips (fair value option securities) which New Residential elected to carry at fair value and record changes to valuation through the income statement and (ii) bonds backed by Servicer Advances. Gross Unrealized Weighted AverageAsset Type Outstanding Face Amount Amortized Cost Basis Gains Losses Carrying Value Number of Securities Rating Coupon Yield Life (Years) Principal SubordinationDecember 31, 2016 Servicer Advance Bonds $100,000 $99,838 $310 $— $100,148 1 AAA 3.21% 3.10% 0.7 N/AFair Value Option Securities Interest-only Securities 2,062,647 113,342 5,270 (6,555) 112,057 28 AA+ 1.85% 5.30% 2.9 N/AServicing Strips 456,629 5,613 311 (1) 5,923 11 NA 0.27% 21.74% 6.2 N/ADecember 31, 2015 Servicer Advance Bonds $431,000 $430,951 $— $(661) $430,290 5 AA+ 2.69% 2.70% 1.1 N/AFair Value Option Securities Interest-only Securities 1,522,256 82,101 5,227 (4,348) 82,980 12 AA+ 1.84% 7.11% 4.0 N/A | ||
[9] | The total outstanding face amount was $1.2 billion (including $0.8 billion of residual and fair value option notional amount) and $2.3 billion (including $1.7 billion of residual and fair value option notional amount) for fixed rate securities and $6.1 billion (including $2.1 billion of residual and fair value option notional amount) and $1.3 billion (including $164.4 million of residual and fair value option notional amount) for floating rate securities as of December 31, 2016 and 2015, respectively. | ||
[10] | Percentage of the amortized cost basis of securities that is subordinate to New Residential’s investments, excluding fair value option securities and servicer advance bonds. |
INVESTMENTS IN REAL ESTATE SE77
INVESTMENTS IN REAL ESTATE SECURITIES - Summary of Real Estate Securities in an Unrealized Loss Position (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016USD ($)bondsecurity | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | ||
Schedule of Available-for-sale Securities [Line Items] | ||||
Outstanding Face Amount | $ 8,788,957 | $ 4,418,552 | ||
Other Than Temporary Impairment - Amortized Cost Basis | (15,495) | (6,239) | $ (1,127) | |
After Impairment - Amortized Cost Basis | 4,948,327 | 2,498,078 | ||
Carrying Value - Total/Weighted Average | $ 5,073,858 | $ 2,501,881 | ||
Weighted Average Life (Years) | 1 year 10 months 3 days | |||
Securities in an Unrealized Loss Position Less than Twelve Months [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Outstanding Face Amount | $ 1,300,530 | |||
Before Impairment - Amortized Cost Basis | 620,309 | |||
Other Than Temporary Impairment - Amortized Cost Basis | [1] | (939) | ||
After Impairment - Amortized Cost Basis | 619,370 | |||
Gross Unrealized Losses - Less than Twelve Months | (9,896) | |||
Carrying Value - Less than Twelve Months | $ 609,474 | |||
Number of Securities - Less than Twelve Months | security | 195 | |||
Weighted Average Rating | [2] | CCC+ | ||
Weighted Average Coupon | 1.44% | |||
Weighted Average Yield | 5.16% | |||
Weighted Average Life (Years) | 7 years 5 months 1 day | |||
Number of bonds which New Residential was unable to obtain rating information | bond | 111 | |||
Securities in an Unrealized Loss Position Twelve or More Months [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Outstanding Face Amount | $ 969,356 | |||
Before Impairment - Amortized Cost Basis | 314,720 | |||
Other Than Temporary Impairment - Amortized Cost Basis | [1] | (1,487) | ||
After Impairment - Amortized Cost Basis | 313,233 | |||
Gross Unrealized Losses - Twelve or More Months | (13,582) | |||
Carrying Value - Twelve or More Months | $ 299,651 | |||
Number of Securities - Twelve or More Months | security | 47 | |||
Weighted Average Rating | [2] | BB+ | ||
Weighted Average Coupon | 1.89% | |||
Weighted Average Yield | 4.51% | |||
Weighted Average Life (Years) | 6 years 2 months 1 day | |||
Number of bonds which New Residential was unable to obtain rating information | bond | 10 | |||
Securities in a Loss Position [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Outstanding Face Amount | $ 2,269,886 | |||
Before Impairment - Amortized Cost Basis | 935,029 | |||
Other Than Temporary Impairment - Amortized Cost Basis | [1] | (2,426) | ||
After Impairment - Amortized Cost Basis | 932,603 | |||
Gross Unrealized Losses - Total/Weighted Average | (23,478) | |||
Carrying Value - Total/Weighted Average | $ 909,125 | |||
Number of Securities - Total/Weighted Average | security | 242 | |||
Weighted Average Rating | [2] | B | ||
Weighted Average Coupon | 1.59% | |||
Weighted Average Yield | 4.94% | |||
Weighted Average Life (Years) | 6 years 11 months 30 days | |||
[1] | This amount represents OTTI recorded on securities that are in an unrealized loss position as of December 31, 2016. | |||
[2] | The weighted average rating of securities in an unrealized loss position for less than 12 months excludes the rating of 111 bonds which either have never been rated or for which rating information is no longer provided. The weighted average rating of securities in an unrealized loss position for 12 or more months excludes the rating of 10 bonds which either have never been rated or for which rating information is no longer provided. |
INVESTMENTS IN REAL ESTATE SE78
INVESTMENTS IN REAL ESTATE SECURITIES - Summary of Real Estate Securities in an Unrealized Loss Position - Associated Intent to Sell (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($) | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Unrealized losses reflected in other comprehensive income | $ 0 | |
Securities Intended To Sell [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 0 | [1] |
Amortized Cost Basis After Impairment | 0 | [1] |
Unrealized Credit Losses | 0 | [1],[2] |
Unrealized Non-Credit Losses | 0 | [1],[3] |
Securities More Likely Than Not Required to be Sold [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 0 | [4] |
Amortized Cost Basis After Impairment | 0 | [4] |
Unrealized Credit Losses | 0 | [2],[4] |
Securities No Intent To Sell and Not More Likely Than Not to be Required to Sell- Credit Impaired [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 238,660,000 | |
Amortized Cost Basis After Impairment | 244,526,000 | |
Unrealized Credit Losses | (2,426,000) | [2] |
Unrealized Non-Credit Losses | (5,866,000) | [3] |
Securities No Intent To Sell and Not More Likely Than Not to be Required to Sell - Non-Credit Impaired [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 670,465,000 | |
Amortized Cost Basis After Impairment | 688,077,000 | |
Unrealized Credit Losses | 0 | [2] |
Unrealized Non-Credit Losses | (17,612,000) | [3] |
Securities in an Unrealized Loss Position [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Fair Value | 909,125,000 | |
Amortized Cost Basis After Impairment | 932,603,000 | |
Unrealized Credit Losses | (2,426,000) | [2] |
Unrealized Non-Credit Losses | $ (23,478,000) | [3] |
[1] | A portion of securities New Residential intends to sell have a fair value equal to their amortized cost basis after impairment, and, therefore do not have unrealized losses reflected in other comprehensive income as of December 31, 2016. | |
[2] | This amount is required to be recorded as OTTI through earnings. In measuring the portion of credit losses, New Residential estimates the expected cash flow for each of the securities. This evaluation includes a review of the credit status and the performance of the collateral supporting those securities, including the credit of the issuer, key terms of the securities and the effect of local, industry and broader economic trends. Significant inputs in estimating the cash flows include New Residential’s expectations of prepayment rates, default rates and loss severities. Credit losses are measured as the decline in the present value of the expected future cash flows discounted at the investment’s effective interest rate. | |
[3] | This amount represents unrealized losses on securities that are due to non-credit factors and recorded through other comprehensive income. | |
[4] | New Residential may, at times, be more likely than not to be required to sell certain securities for liquidity purposes. While the amount of the securities to be sold may be an estimate, and the securities to be sold have not yet been identified, New Residential must make its best estimate, which is subject to significant judgment regarding future events, and may differ materially from actual future sales. |
INVESTMENTS IN REAL ESTATE SE79
INVESTMENTS IN REAL ESTATE SECURITIES - Summary of Activity Related to Credit Losses on Debt Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||
Beginning balance of credit losses on debt securities for which a portion of an OTTI was recognized in other comprehensive income | $ 6,239 | $ 1,127 |
Increases to credit losses on securities for which an OTTI was previously recognized and a portion of an OTTI was recognized in other comprehensive income | 3,008 | 5 |
Additions for credit losses on securities for which an OTTI was not previously recognized | 7,256 | 5,782 |
Reductions for securities for which the amount previously recognized in other comprehensive income was recognized in earnings because the entity intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis | 0 | 0 |
Reduction for credit losses on securities for which no OTTI was recognized in other comprehensive income at the current measurement date | 0 | 0 |
Reduction for securities sold during the period | (1,008) | (675) |
Ending balance of credit losses on debt securities for which a portion of an OTTI was recognized in other comprehensive income | $ 15,495 | $ 6,239 |
INVESTMENTS IN REAL ESTATE SE80
INVESTMENTS IN REAL ESTATE SECURITIES - Summary of the Geographic Distribution of the Collateral Securing Non-Agency RMBS (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Non-Agency RMBS [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | [1] | $ 7,202,218 | $ 3,102,973 |
Percentage of Total Outstanding | [1] | 100.00% | 100.00% |
Non-Agency RMBS [Member] | Western U.S. [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | [1] | $ 2,757,424 | $ 1,097,609 |
Percentage of Total Outstanding | [1] | 38.30% | 35.30% |
Non-Agency RMBS [Member] | Southeastern U.S. [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | [1] | $ 1,635,596 | $ 758,167 |
Percentage of Total Outstanding | [1] | 22.70% | 24.40% |
Non-Agency RMBS [Member] | Northeastern U.S. [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | [1] | $ 1,426,519 | $ 583,366 |
Percentage of Total Outstanding | [1] | 19.80% | 18.80% |
Non-Agency RMBS [Member] | Midwestern U.S. [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | [1] | $ 778,372 | $ 335,406 |
Percentage of Total Outstanding | [1] | 10.80% | 10.80% |
Non-Agency RMBS [Member] | Southwestern U.S. [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | [1] | $ 557,033 | $ 309,236 |
Percentage of Total Outstanding | [1] | 7.70% | 10.00% |
Non-Agency RMBS [Member] | Other U.S. [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Outstanding Face Amount | [1],[2] | $ 47,274 | $ 19,189 |
Percentage of Total Outstanding | [1],[2] | 0.70% | 0.70% |
Servicer Advances [Member] | Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Face amount | $ 100,000 | $ 431,000 | |
[1] | Excludes $100.0 million and $431.0 million face amount of bonds backed by Servicer Advances at December 31, 2016 and 2015, respectively. | ||
[2] | Represents collateral for which New Residential was unable to obtain geographic information. |
INVESTMENTS IN REAL ESTATE SE81
INVESTMENTS IN REAL ESTATE SECURITIES - Schedule of the Outstanding Face Amount and Carrying Value for Securities Uncollectible (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investments, Debt and Equity Securities [Abstract] | ||
Outstanding Face Amount | $ 2,951,498 | $ 873,763 |
Carrying Value | $ 1,871,466 | $ 504,659 |
INVESTMENTS IN REAL ESTATE SE82
INVESTMENTS IN REAL ESTATE SECURITIES - Summary of Changes in Accretable Yield for Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Certain Loans Acquired in Transfer Accounted for as Available-for-sale Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Beginning Balance | $ 316,521 | $ 181,671 |
Additions | 952,271 | 172,828 |
Accretion | (130,745) | (42,800) |
Reclassifications from (to) non-accretable difference | 63,239 | (36,326) |
Disposals | (1,161) | (105,593) |
Ending Balance | 1,200,125 | 316,521 |
ASU 2014-11 [Member] | ||
Certain Loans Acquired in Transfer Accounted for as Available-for-sale Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Adoption of ASU No. 2014-11 | $ 0 | $ 146,741 |
INVESTMENTS IN RESIDENTIAL MO83
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | |
Mortgage Loans on Real Estate [Line Items] | |||
Threshold period past due (in days) | 60 days | ||
Government Guaranteed Mortgage Loans upon Foreclosure Receivable [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Claims receivable | $ 55.3 | ||
Nationstar [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Interest in reverse mortgage loans | 30.00% | ||
Reverse Mortgage Loans [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Interest in reverse mortgage loans | 70.00% | 70.00% | |
Unpaid principal balance | $ 0.5 | $ 0.4 | |
Residential Mortgage Loans [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Unpaid principal balance | $ 447 |
INVESTMENTS IN RESIDENTIAL MO84
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Schedule of Residential Mortgage Loans Outstanding by Loan Type, Excluding REO (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2013 | Dec. 31, 2016USD ($)loan | Dec. 31, 2015USD ($)loan | |||
Mortgage Loans on Real Estate [Line Items] | |||||
Weighted Average Life (Years) | 1 year 10 months 3 days | ||||
Real Estate Securities [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Residential mortgage loans, federal income tax basis | $ 905,700 | $ 1,204,200 | |||
Reverse Mortgage Loans [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Outstanding Face Amount | [1],[2] | 0 | 34,423 | ||
Carrying Value | [1],[2],[3] | $ 0 | $ 19,560 | ||
Loan Count | loan | [1],[2] | 0 | 136 | ||
Weighted Average Yield | [1],[2] | 0.00% | 10.00% | ||
Weighted Average Life (Years) | [1],[2],[4] | 4 years 2 months 14 days | |||
Floating Rate Loans as a % of Face Amount | [1],[2] | 0.00% | 21.80% | ||
Loan to Value Ratio (LTV) | [1],[2],[5] | 0.00% | 112.90% | ||
Weighted Average Delinquency | [1],[2],[6] | 0.00% | 71.30% | ||
Interest in reverse mortgage loans | 70.00% | 70.00% | |||
Unpaid principal balance | $ 500 | $ 400 | |||
Percentage of loans that have reached a termination event | 60.90% | 71.00% | |||
Performing Loans [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Outstanding Face Amount | [7] | $ 0 | $ 21,483 | ||
Carrying Value | [3],[7] | $ 0 | $ 19,964 | ||
Loan Count | loan | [7] | 0 | 671 | ||
Weighted Average Yield | [7] | 0.00% | 9.10% | ||
Weighted Average Life (Years) | [4],[7] | 6 years 8 months | |||
Floating Rate Loans as a % of Face Amount | [7] | 0.00% | 17.10% | ||
Loan to Value Ratio (LTV) | [5],[7] | 0.00% | 77.40% | ||
Weighted Average Delinquency | [6],[7] | 0.00% | 7.50% | ||
Weighted Average FICO | [7],[8] | 0 | 626 | ||
Purchased Credit Deteriorated Loans [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Outstanding Face Amount | [9] | $ 203,673 | $ 450,229 | ||
Carrying Value | [3],[9] | $ 190,761 | $ 290,654 | ||
Loan Count | loan | [9] | 1,183 | 2,118 | ||
Weighted Average Yield | [9] | 5.50% | 5.50% | ||
Weighted Average Life (Years) | [4],[9] | 2 years 8 months 29 days | 2 years 6 months 18 days | ||
Floating Rate Loans as a % of Face Amount | [9] | 8.70% | 18.70% | ||
Loan to Value Ratio (LTV) | [5],[9] | 71.50% | 115.40% | ||
Weighted Average Delinquency | [6],[9] | 94.90% | 97.60% | ||
Weighted Average FICO | [8],[9] | 590 | 578 | ||
Residential Mortgage Loans, held-for-investment [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Outstanding Face Amount | $ 203,673 | $ 506,135 | |||
Carrying Value | [3] | $ 190,761 | $ 330,178 | ||
Loan Count | loan | 1,183 | 2,925 | |||
Weighted Average Yield | 5.50% | 6.00% | |||
Weighted Average Life (Years) | [4] | 2 years 8 months 29 days | 2 years 10 months 1 day | ||
Floating Rate Loans as a % of Face Amount | 8.70% | 18.80% | |||
Loan to Value Ratio (LTV) | [5] | 71.50% | 113.60% | ||
Weighted Average Delinquency | [6] | 94.90% | 92.00% | ||
Weighted Average FICO | [8] | 590 | 580 | ||
Reverse Mortgage Loans, Held-For-Sale [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Outstanding Face Amount | [1],[2] | $ 22,645 | |||
Carrying Value | [1],[2],[3] | $ 11,468 | |||
Loan Count | loan | [1],[2] | 69 | |||
Weighted Average Yield | [1],[2] | 7.20% | |||
Weighted Average Life (Years) | [1],[2],[4] | 4 years 6 months 16 days | |||
Floating Rate Loans as a % of Face Amount | [1],[2] | 15.40% | |||
Loan to Value Ratio (LTV) | [1],[2],[5] | 135.60% | |||
Weighted Average Delinquency | [1],[2],[6] | 70.70% | |||
Performing Loans, held-for-sale [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Outstanding Face Amount | [7] | $ 179,983 | [10] | $ 270,585 | |
Carrying Value | [3],[7] | $ 175,194 | [10] | $ 277,084 | |
Loan Count | loan | [7] | 1,957 | [10] | 1,838 | |
Weighted Average Yield | [7] | 4.30% | [10] | 4.60% | |
Weighted Average Life (Years) | [4],[7] | 5 years 10 months 30 days | [10] | 4 years 10 months 14 days | |
Floating Rate Loans as a % of Face Amount | [7] | 22.40% | [10] | 4.60% | |
Loan to Value Ratio (LTV) | [5],[7] | 102.90% | [10] | 57.00% | |
Weighted Average Delinquency | [6],[7] | 6.40% | [10] | 0.00% | |
Weighted Average FICO | [7],[8] | 625 | [10] | 702 | |
Non-Performing Loans, held-for-sale [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Outstanding Face Amount | [9] | $ 706,302 | [10] | $ 589,129 | |
Carrying Value | [3],[9] | $ 510,003 | [10] | $ 499,597 | |
Loan Count | loan | [9] | 3,759 | [10] | 3,428 | |
Weighted Average Yield | [9] | 7.10% | [10] | 5.90% | |
Weighted Average Life (Years) | [4],[9] | 2 years 10 months 8 days | [10] | 2 years 10 months 16 days | |
Floating Rate Loans as a % of Face Amount | [9] | 20.60% | [10] | 14.50% | |
Loan to Value Ratio (LTV) | [5],[9] | 105.00% | [10] | 104.50% | |
Weighted Average Delinquency | [6],[9] | 75.90% | [10] | 81.10% | |
Weighted Average FICO | [8],[9] | 575 | [10] | 580 | |
Residential Mortgage Loans Held-for-Sale [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Outstanding Face Amount | $ 908,930 | $ 859,714 | |||
Carrying Value | [3] | $ 696,665 | $ 776,681 | ||
Loan Count | loan | 5,785 | 5,266 | |||
Weighted Average Yield | 6.50% | 5.50% | |||
Weighted Average Life (Years) | [4] | 3 years 6 months 1 day | 3 years 6 months 2 days | ||
Floating Rate Loans as a % of Face Amount | 20.80% | 11.40% | |||
Loan to Value Ratio (LTV) | [5] | 105.40% | 89.60% | ||
Weighted Average Delinquency | [6] | 62.00% | 55.60% | ||
Weighted Average FICO | [8] | 585 | 619 | ||
Government National Mortgage Association (GNMA) Insured Loans [Member] | Performing Loans [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Unpaid Principal Balance | $ 45,200 | ||||
Government National Mortgage Association (GNMA) Insured Loans [Member] | Non-Performing Loans [Member] | |||||
Mortgage Loans on Real Estate [Line Items] | |||||
Unpaid Principal Balance | $ 87,500 | ||||
[1] | FICO scores are not used in determining how much a borrower can access via a reverse mortgage loan. | ||||
[2] | Represents a 70% participation interest that New Residential holds in a portfolio of reverse mortgage loans. The average loan balance outstanding based on total UPB was $0.5 million and $0.4 million at December 31, 2016 and 2015, respectively. Approximately 60.9% and 71.0% of these loans have reached a termination event at December 31, 2016 and 2015, respectively. As a result of the termination event, each such loan has matured and the borrower can no longer make draws on these loans. | ||||
[3] | Includes residential mortgage loans with a United States federal income tax basis of $905.7 million and $1,204.2 million as of December 31, 2016 and 2015, respectively. | ||||
[4] | The weighted average life is based on the expected timing of the receipt of cash flows. | ||||
[5] | LTV refers to the ratio comparing the loan’s unpaid principal balance to the value of the collateral property. | ||||
[6] | Represents the percentage of the total principal balance that is 60+ days delinquent | ||||
[7] | Performing loans are generally placed on nonaccrual status when principal or interest is 120 days or more past due. | ||||
[8] | The weighted average FICO score is based on the weighted average of information updated and provided by the loan servicer on a monthly basis. | ||||
[9] | Includes loans with evidence of credit deterioration since origination where it is probable that New Residential will not collect all contractually required principal and interest payments. As of December 31, 2016, New Residential has placed all Non-Performing Loans, held-for-sale on nonaccrual status, except as described in (J) below. | ||||
[10] | Includes $45.2 million and $87.5 million UPB of Ginnie Mae EBO performing and non-performing loans, respectively, on accrual status as contractual cash flows are guaranteed by the FHA. |
INVESTMENTS IN RESIDENTIAL MO85
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Summary of the Geographic Distribution of the Underlying Residential Mortgage Loans (Details) - Residential Mortgage Loans [Member] | Dec. 31, 2016 | Dec. 31, 2015 |
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 100.00% | 100.00% |
New York [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 16.70% | 14.50% |
Florida [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 11.40% | 10.70% |
California [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 10.30% | 12.30% |
New Jersey [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 9.60% | 13.10% |
Maryland [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 4.70% | 3.50% |
Illinois [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 4.00% | 4.30% |
Texas [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 3.90% | 3.30% |
Massachusetts [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 3.50% | 3.30% |
Pennsylvania [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 2.90% | 2.80% |
Washington [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 2.80% | 3.20% |
Other U.S. [Member] | ||
Mortgage Loans on Real Estate [Line Items] | ||
Percentage of Total Outstanding Unpaid Principal Amount | 30.20% | 29.00% |
INVESTMENTS IN RESIDENTIAL MO86
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Schedule of Residential Mortgage Loan Transactions (Details) - Residential Mortgage Loans [Member] $ in Millions | 1 Months Ended | |||||||||||||
Nov. 30, 2016USD ($)trust | Aug. 31, 2016USD ($)trust | May 31, 2016USD ($)trust | Dec. 31, 2015USD ($)trust | Nov. 30, 2015USD ($)trust | Jun. 30, 2015USD ($)trust | Dec. 31, 2014USD ($)trust | Aug. 31, 2014USD ($)trust | May 31, 2014USD ($)trust | Dec. 31, 2016USD ($)trust | Sep. 30, 2016USD ($) | Mar. 31, 2016USD ($)trust | Sep. 30, 2015USD ($)trust | ||
Investment [Line Items] | ||||||||||||||
Number of Trusts Called | trust | [1] | 13 | 11 | 12 | 14 | 14 | 18 | 25 | 19 | 16 | 1 | 13 | 7 | |
Securities Owned Prior [Member] | ||||||||||||||
Investment [Line Items] | ||||||||||||||
Face Amount | [1] | $ 41.7 | $ 6.2 | $ 60 | $ 61.4 | $ 3.9 | $ 13.7 | $ 27.9 | $ 15.4 | $ 17.4 | $ 116.6 | $ 58 | $ 7.4 | |
Amortized Cost Basis | [1] | 24.2 | 1.4 | 44 | 48 | 3 | 9.1 | 24 | 13.1 | 12 | 102 | 41 | 4.5 | |
Assets Acquired [Member] | ||||||||||||||
Investment [Line Items] | ||||||||||||||
UPB of Underlying Mortgages | [1] | 289.1 | 312.3 | 290.6 | 309.1 | 345.4 | 369 | 597.1 | 530.1 | 282.2 | 124.4 | 167.2 | 216.3 | |
Loans Held for Sale, Acquired During Period, Purchase Price | [1],[2] | 286.8 | 319.2 | 298.7 | 315.1 | 351.7 | 388.8 | 119.1 | 173.3 | 223.1 | ||||
Loan Price | [1],[2] | 623.7 | 536.3 | 289.4 | ||||||||||
REO & Other Price | [1],[2] | 3.7 | 1.7 | 0.6 | 3.1 | 1.2 | 0 | 0 | 3 | 0 | 0.4 | 3.1 | 1.5 | |
Loans Sold [Member] | ||||||||||||||
Investment [Line Items] | ||||||||||||||
UPB of Underlying Mortgages | [1],[3] | 273.6 | 308 | 306.9 | 261.3 | 511.8 | 334.5 | 516.1 | 463 | 233.8 | ||||
Gain (Loss) | [1],[3] | (5.2) | 8.1 | (2.2) | 2.1 | 2.4 | (2.8) | 0.7 | 7 | 3.5 | ||||
Carrying Value | $ 31.2 | $ 42.2 | ||||||||||||
Bonds Retained [Member] | ||||||||||||||
Investment [Line Items] | ||||||||||||||
Basis | [1] | 43.2 | 45.7 | 40 | 36.6 | 22 | 15 | 28.9 | 25.8 | |||||
Retained Assets [Member] | ||||||||||||||
Investment [Line Items] | ||||||||||||||
UPB of Underlying Mortgages | [1],[3] | 46.2 | 45.6 | 85.9 | 35.8 | 29.8 | 34.5 | 81 | 66.4 | 48.4 | 65 | 19.4 | ||
Loans Held for Sale, Acquired During Period, Purchase Price | [1],[3] | 21.6 | 41.1 | 78.2 | 26.6 | 23.4 | 31.7 | 61.8 | 17.2 | |||||
Loan Price | [1],[3] | 71.7 | 46.3 | 40.1 | ||||||||||
REO & Other Price | [1],[3] | $ 4.4 | $ 2.3 | $ 1.1 | $ 2.9 | $ 1.2 | $ 1.3 | $ 4.3 | $ 3 | $ 1.3 | $ 3.4 | $ 1.5 | ||
[1] | Any related securitization may occur on the same or a subsequent date, depending on market conditions and other factors. Except as otherwise noted in (C) below, there was one securitization associated with each call. | |||||||||||||
[2] | Price includes par amount paid for all underlying residential mortgage loans of the trusts, plus the basis of the exercised call rights, plus advances and costs incurred (including MSR Fund Payments, as defined in Note 15) in exercising such call rights. | |||||||||||||
[3] | Loans were sold through a securitization which was treated as a sale for accounting purposes. Retained assets are reflected as of the date of the relevant securitization. The securitization that occurred in November 2015 primarily included loans from the September 2015 and November 2015 calls, but also included previously acquired loans. The securitization that occurred in March 2016 primarily included loans from the December 2015 call, but also included previously acquired loans. The securitization that occurred in May 2016 primarily included loans from the March 2016 and May 2016 calls. The securitization that occurred in September 2016 primarily included loans from the August 2016 call, but also included $42.2 million of previously acquired loans. The securitization that occurred in December 2016 primarily included loans from the November 2016 call, but also included $31.2 million of previously acquired loans. No loans from the December 2016 call had been securitized by December 31, 2016. |
INVESTMENTS IN RESIDENTIAL MO87
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Summary of Activities Related to the Carrying Value of Reverse Mortgage Loans and Performing Loans and PCD Loans Held-for-Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Movement in Mortgage Loans on Real Estate [Roll Forward] | ||||
Accretion and other amortization | $ (747,932) | $ (525,298) | $ (278,408) | |
Transfer of loans to real estate owned | (81,940) | (35,322) | ||
Reverse Mortgage Loans [Member] | ||||
Movement in Mortgage Loans on Real Estate [Roll Forward] | ||||
Balance, beginning | 19,560 | 24,965 | ||
Purchases/additional fundings | 319 | 988 | ||
Proceeds from repayments | (1,352) | (687) | ||
Accretion and other amortization | [1] | 2,002 | (5,904) | |
Provision for loan losses | (73) | (35) | ||
Transfer of loans to other assets | [2] | (4,203) | (11,574) | |
Transfer of loans to real estate owned | (1) | |||
Sales | (1,795) | |||
Transfer to loans held-for-sale | [3] | (14,458) | ||
Balance, ending | 0 | 19,560 | 24,965 | |
Performing Loans [Member] | ||||
Movement in Mortgage Loans on Real Estate [Roll Forward] | ||||
Balance, beginning | 19,964 | 22,873 | ||
Purchases/additional fundings | 0 | 0 | ||
Proceeds from repayments | (811) | (2,918) | ||
Accretion and other amortization | [1] | 123 | (52) | |
Provision for loan losses | (4) | (43) | ||
Transfer of loans to other assets | [2] | 0 | 0 | |
Transfer of loans to real estate owned | 0 | |||
Sales | 0 | |||
Transfer to loans held-for-sale | [3] | (19,272) | ||
Balance, ending | 0 | 19,964 | 22,873 | |
Purchased Credit Deteriorated Loans [Member] | ||||
Movement in Mortgage Loans on Real Estate [Roll Forward] | ||||
Balance, beginning | 290,654 | 0 | ||
Purchases/additional fundings | 190,761 | 289,664 | ||
Proceeds from repayments | (8,897) | |||
Accretion and other amortization | (8,295) | (990) | ||
Transfer of loans to real estate owned | (7,583) | |||
Sales | 0 | |||
Transfer to loans held-for-sale | (282,469) | |||
Balance, ending | $ 190,761 | $ 290,654 | $ 0 | |
[1] | Includes accelerated accretion of discount on loans paid in full and on loans transferred to other assets. | |||
[2] | Represents loans for which foreclosure has been completed and for which New Residential has made, or intends to make, a claim with the governmental agency that has guaranteed the loans that are now recognized as claims receivable in Other Assets. | |||
[3] | Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. |
INVESTMENTS IN RESIDENTIAL MO88
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Summary of Activities Related to the Valuation Provision on Reverse Mortgage Loans and Allowance for Loan Losses on Performing Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Reverse Mortgage Loans [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning, balance | $ 1,553 | $ 1,518 | |
Provision for loan losses | [1] | 73 | 35 |
Charge-offs | [2] | 0 | 0 |
Sales | (171) | ||
Transfer of loans to held-for-sale | [3] | (1,455) | |
Ending, balance | 0 | 1,553 | |
Performing Loans [Member] | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Beginning, balance | 119 | 1,447 | |
Provision for loan losses | [1] | 4 | 43 |
Charge-offs | [2] | 0 | (1,371) |
Sales | 0 | ||
Transfer of loans to held-for-sale | [3] | (123) | |
Ending, balance | $ 0 | $ 119 | |
[1] | Based on an analysis of collective borrower performance, credit ratings of borrowers, loan-to-value ratios, estimated value of the underlying collateral, key terms of the loans and historical and anticipated trends in defaults and loss severities at a pool level. | ||
[2] | Loans, other than PCD loans, are generally charged off or charged down to the net realizable value of the collateral (i.e., fair value less costs to sell), with an offset to the allowance for loan losses, when available information confirms that loans are uncollectible. | ||
[3] | Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. |
INVESTMENTS IN RESIDENTIAL MO89
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Summary of Contractually Required Payments Receivable, Cash Flows Expected to be Collected, and Fair Value at Acquisition Date for Loans Acquired during the Period (Details) - PCD Loans [Member] $ in Thousands | Dec. 31, 2016USD ($) |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Line Items] | |
Contractually Required Payments Receivable | $ 337,374 |
Cash Flows Expected to be Collected | 214,449 |
Fair Value | $ 190,343 |
INVESTMENTS IN RESIDENTIAL MO90
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Summary of Unpaid Principal Balance and Carrying Value for Loans Uncollectible (Details) - PCD Loans [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Mortgage Loans on Real Estate [Line Items] | ||
Unpaid Principal Balance | $ 203,673 | $ 450,229 |
Carrying Value | $ 190,761 | $ 290,654 |
INVESTMENTS IN RESIDENTIAL MO91
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Summary of Changes in Accretable Yield (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | |||
Beginning balance | $ 71,063 | $ 0 | |
Additions | 23,688 | 72,053 | |
Accretion | (8,876) | (990) | |
Reclassifications from non-accretable difference | [1] | 29,569 | |
Disposals | [2] | (2,680) | |
Transfer to held-for-sale | [3] | (89,076) | |
Ending balance | $ 23,688 | $ 71,063 | |
[1] | Represents a probable and significant increase in cash flows previously expected to be uncollectible. | ||
[2] | Includes sales of loans or foreclosures, which result in removal of the loan from the PCD loan pool at its carrying amount. | ||
[3] | Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. |
INVESTMENTS IN RESIDENTIAL MO92
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Summary of Activities Related to the Carrying Value of Loans Held-for-sale (Details) - USD ($) $ in Thousands | Dec. 27, 2016 | Nov. 25, 2016 | May 25, 2016 | Mar. 25, 2016 | Dec. 23, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Loans Held-for-sale, Reconciliation [Roll Forward] | |||||||||
Transfers of loans from held-for-investment | $ 316,199 | $ 0 | $ 846,904 | ||||||
Transfer of loans to real estate owned | (81,940) | (35,322) | |||||||
ASU 2014-11 [Member] | |||||||||
Loans Held-for-sale, Reconciliation [Roll Forward] | |||||||||
Adoption of ASU No. 2014-11 | 0 | 146,741 | |||||||
Loans Held-for-sale [Member] | |||||||||
Loans Held-for-sale, Reconciliation [Roll Forward] | |||||||||
Beginning balance, loans held-for-sale | 776,681 | 1,126,439 | |||||||
Purchases | [1] | 1,196,018 | 1,695,124 | ||||||
Transfers of loans from held-for-investment | [2] | 316,199 | |||||||
Sales | (1,274,707) | (1,871,054) | |||||||
Transfer of loans to other assets | [3] | (158,807) | (41,752) | ||||||
Transfer of loans to real estate owned | (56,001) | (34,139) | |||||||
Proceeds from repayments | (91,339) | (85,698) | |||||||
Valuation (provision) reversal on loans | [4] | (11,379) | (14,070) | ||||||
Ending balance, loans held-for-sale | $ 696,665 | 776,681 | $ 1,126,439 | ||||||
Provision for loans held-for-sale | $ 10,200 | $ 13,800 | $ 3,600 | $ 2,600 | $ 10,500 | ||||
Loans Held-for-sale [Member] | ASU 2014-11 [Member] | |||||||||
Loans Held-for-sale, Reconciliation [Roll Forward] | |||||||||
Adoption of ASU No. 2014-11 | [5] | $ 1,831 | |||||||
[1] | Represents loans acquired with the intent to sell, including loans acquired in the HLSS Acquisition (Note 1). | ||||||||
[2] | Represents loans not initially acquired with the intent to sell for which New Residential determined that it no longer has the intent to hold for the foreseeable future, or until maturity or payoff. | ||||||||
[3] | Represents loans for which foreclosure has been completed and for which New Residential has made, or intends to make, a claim with the governmental agency that has guaranteed the loans that are now recognized as claims receivable in Other Assets (Note 2). | ||||||||
[4] | Represents the fair value adjustments to loans upon transfer to held-for-sale and provision recorded on certain purchased held-for-sale loans, including $10.5 million, $2.6 million, $3.6 million, $13.8 million and $10.2 million of provision related to the call transactions executed in December 2015, March 2016, May 2016, November 2016 and December 2016, respectively. | ||||||||
[5] | Represents loans financed with the selling counterparty that were previously accounted for as linked transactions (Note 10). |
INVESTMENTS IN RESIDENTIAL MO93
INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS - Schedule of Real Estate Owned (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Real Estate Owned [Roll Forward] | ||
Beginning balance | $ 50,574 | $ 61,933 |
Purchases | 11,283 | 26,208 |
Transfer of loans to real estate owned | 81,940 | 35,322 |
Sales | (66,880) | (68,441) |
Valuation provision on REO | (17,326) | (4,448) |
Ending balance | $ 59,591 | $ 50,574 |
INVESTMENTS IN CONSUMER LOANS -
INVESTMENTS IN CONSUMER LOANS - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Oct. 03, 2014 | Aug. 31, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 31, 2016 | Apr. 01, 2016 | Mar. 30, 2016 | Apr. 30, 2013 | |
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Refinanced outstanding asset-backed notes | $ 2,600,000 | |||||||||||||||||||
Proceeds from refinancing asset backed notes | 337,800 | |||||||||||||||||||
Basis in consumer loans investment | 0 | |||||||||||||||||||
Gain on consumer loans investment | $ 80,100 | $ 9,943 | $ 43,954 | $ 92,020 | ||||||||||||||||
Interest income | $ 326,834 | [1] | $ 282,388 | $ 277,477 | $ 190,036 | $ 200,181 | $ 182,341 | $ 178,177 | $ 84,373 | 1,076,735 | 645,072 | 346,857 | ||||||||
Income before income taxes | 262,781 | [1] | $ 151,986 | $ 101,145 | $ 105,715 | $ 83,104 | $ 55,823 | $ 93,583 | $ 38,371 | 621,627 | 270,881 | 465,056 | ||||||||
Payments to acquire loans held-for-investment | 191,081 | 290,652 | 884,557 | |||||||||||||||||
Performing Loans [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Payments to acquire loans held-for-investment | $ 140,000 | 176,200 | ||||||||||||||||||
UPB of Underlying Mortgages | $ 177,400 | $ 177,400 | 177,400 | $ 50,000 | ||||||||||||||||
Consumer Loans [Member] | Operating Segments [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Interest income | 226,000 | 232,750 | 1 | 0 | ||||||||||||||||
Income before income taxes | $ 82,000 | 161,529 | $ 42,112 | $ 140,759 | ||||||||||||||||
SpringCastle [Member] | Parent Company [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Ownership percentage by parent | 53.50% | |||||||||||||||||||
Consumer Loan Companies [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Total Consideration | $ 237,500 | |||||||||||||||||||
Acquisition related costs incurred | $ 1,500 | |||||||||||||||||||
Consumer Loan Companies [Member] | Parent Company [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Total Consideration | $ 237,500 | |||||||||||||||||||
Consideration transferred, percent of net assets used in gross purchase price | 100.00% | |||||||||||||||||||
Blackstone SpringCastle Buyers [Member] | SpringCastle [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Ownership percentage by noncontrolling owners | 46.50% | |||||||||||||||||||
Voting interests acquired as a percentage of Gross Voting Interests Available for Sale | 50.00% | 50.00% | ||||||||||||||||||
Consumer Loan Companies [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Percentage or portfolio financed by other parties | 73.00% | |||||||||||||||||||
OneMain - SpringCastle Sellers [Member] | SpringCastle [Member] | SpringCastle Buyers [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Ownership percentage by noncontrolling owners | 47.00% | 47.00% | ||||||||||||||||||
Total Consideration | $ 111,600 | |||||||||||||||||||
Cash consideration | 100,500 | |||||||||||||||||||
Other payments to acquire businesses | $ 11,200 | |||||||||||||||||||
Term for payment to escrow account (in days) | 120 days | |||||||||||||||||||
Term for funds held in escrow (in years) | 5 years | |||||||||||||||||||
OneMain - SpringCastle Sellers [Member] | SpringCastle [Member] | NRZ SpringCastle Buyers [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Percentage acquired | 23.50% | 23.50% | ||||||||||||||||||
Voting interests acquired as a percentage of Gross Voting Interests Available for Sale | 50.00% | 50.00% | ||||||||||||||||||
Percentage of total consideration paid | 50.00% | 50.00% | ||||||||||||||||||
Blackstone Tactical Opportunities Advisors LLC [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Percentage of portfolio co-invested by other parties | 23.00% | |||||||||||||||||||
OneMain [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Percentage of portfolio co-invested by other parties | 47.00% | |||||||||||||||||||
Consumer Loan Companies [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
New Residential’s ownership | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | |||||||||||||
Percentage of portfolio co-invested by other parties | 70.00% | |||||||||||||||||||
Ownership percentage by noncontrolling owners | 46.50% | 46.50% | 46.50% | |||||||||||||||||
Consumer Loan Companies [Member] | SpringCastle [Member] | ||||||||||||||||||||
Schedule of Consumer Loans [Line Items] | ||||||||||||||||||||
Ownership percentage by noncontrolling owners | 30.00% | |||||||||||||||||||
Excess mortgage servicing rights, equity method investees, at fair value | $ 71,300 | |||||||||||||||||||
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. |
INVESTMENTS IN CONSUMER LOANS95
INVESTMENTS IN CONSUMER LOANS - Schedule of Allocation of Purchase Price (Details) - Consumer Loan Companies [Member] $ in Millions | Mar. 31, 2016USD ($) |
Business Acquisition [Line Items] | |
Total Consideration | $ 237.5 |
Assets | |
Consumer loans, held-for-investment | 1,934.7 |
Cash and cash equivalents | 0.3 |
Restricted cash | 74.6 |
Other assets | 35.9 |
Total Assets Acquired | 2,045.5 |
Liabilities | |
Notes and bonds payable | 1,803.2 |
Accrued expenses and other liabilities | 4.8 |
Total Liabilities Assumed | 1,808 |
Net Assets | $ 237.5 |
INVESTMENTS IN CONSUMER LOANS96
INVESTMENTS IN CONSUMER LOANS - Schedule of Pro Forma Information (Details) - Consumer Loan Companies [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Interest Income | $ 1,163,648 | $ 1,030,522 |
Income Before Income Taxes | 581,925 | 466,915 |
Noncontrolling Interests in Income of Consolidated Subsidiaries | $ 96,852 | $ 92,413 |
INVESTMENTS IN CONSUMER LOANS97
INVESTMENTS IN CONSUMER LOANS - Summary of Investment in Consumer Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2016 | Apr. 01, 2016 | ||
Schedule of Consumer Loans [Line Items] | |||||
Weighted Average Expected Life (Years) | 1 year 10 months 3 days | ||||
Performing Loans [Member] | |||||
Schedule of Consumer Loans [Line Items] | |||||
UPB of Underlying Mortgages | $ 177,400 | $ 50,000 | |||
Parent Company [Member] | SpringCastle [Member] | |||||
Schedule of Consumer Loans [Line Items] | |||||
Interest in Consumer Loans | 53.50% | ||||
Consumer Portfolio Segment [Member] | |||||
Schedule of Consumer Loans [Line Items] | |||||
UPB of Underlying Mortgages | 5,300 | ||||
Consumer Portfolio Segment [Member] | Consumer Loan Companies [Member] | |||||
Schedule of Consumer Loans [Line Items] | |||||
UPB of Underlying Mortgages | [1],[2] | $ 2,094,904 | |||
Carrying Value | [1] | $ 1,698,130 | |||
Weighted Average Coupon | [1] | 18.20% | |||
Weighted Average Expected Life (Years) | [1],[3] | 4 years 4 months 24 days | |||
Weighted Average Delinquency | [1],[4] | 7.20% | |||
Interest in Consumer Loans | [1] | 30.00% | |||
Consumer Portfolio Segment [Member] | Parent Company [Member] | SpringCastle and Prosper [Member] | |||||
Schedule of Consumer Loans [Line Items] | |||||
UPB of Underlying Mortgages | [2] | 1,809,952 | |||
Carrying Value | $ 1,799,486 | ||||
Weighted Average Coupon | 17.90% | ||||
Weighted Average Expected Life (Years) | [3] | 3 years 10 months 6 days | |||
Weighted Average Delinquency | [4] | 7.30% | |||
Consumer Portfolio Segment [Member] | Parent Company [Member] | Consumer Loan, Other [Member] | Prosper [Member] | |||||
Schedule of Consumer Loans [Line Items] | |||||
UPB of Underlying Mortgages | [2] | $ 163,570 | |||
Interest in Consumer Loans | 100.00% | ||||
Carrying Value | $ 161,129 | ||||
Weighted Average Coupon | 14.20% | ||||
Weighted Average Expected Life (Years) | [3] | 1 year 5 months 22 days | |||
Weighted Average Delinquency | [4] | 0.30% | |||
Consumer Portfolio Segment [Member] | Parent Company [Member] | Performing Loans [Member] | SpringCastle [Member] | |||||
Schedule of Consumer Loans [Line Items] | |||||
UPB of Underlying Mortgages | [2] | $ 1,275,121 | |||
Interest in Consumer Loans | 53.50% | ||||
Carrying Value | $ 1,321,825 | ||||
Weighted Average Coupon | 18.70% | ||||
Weighted Average Expected Life (Years) | [3] | 4 years 2 months 21 days | |||
Weighted Average Delinquency | [4] | 6.30% | |||
Consumer Portfolio Segment [Member] | Parent Company [Member] | Non-Performing Loans [Member] | SpringCastle [Member] | |||||
Schedule of Consumer Loans [Line Items] | |||||
UPB of Underlying Mortgages | [2],[5] | $ 371,261 | |||
Interest in Consumer Loans | [5] | 53.50% | |||
Carrying Value | [5] | $ 316,532 | |||
Weighted Average Coupon | [5] | 16.60% | |||
Weighted Average Expected Life (Years) | [3],[5] | 3 years 7 months 10 days | |||
Weighted Average Delinquency | [4],[5] | 14.00% | |||
[1] | Held through an equity method investee, which had a carrying value of zero, at such time. | ||||
[2] | Represents the balances as of December 31, 2016 and November 30, 2015, respectively. | ||||
[3] | Represents the weighted average expected timing of the receipt of expected cash flows for this investment. | ||||
[4] | Represents the percentage of the total unpaid principal balance that is 30+ days delinquent. Delinquency status is the primary credit quality indicator as it provides early warning of borrowers who may be experiencing financial difficulties. | ||||
[5] | Includes loans with evidence of credit deterioration since origination where it is probable that New Residential will not collect all contractually required principal and interest payments, which are accounted for as PCD loans. |
INVESTMENTS IN CONSUMER LOANS98
INVESTMENTS IN CONSUMER LOANS - Credit Quality Indicator (Details) - Consumer Portfolio Segment [Member] - Performing Loans [Member] | 12 Months Ended | |
Dec. 31, 2016 | [1] | |
Schedule of Available-for-sale Securities [Line Items] | ||
Delinquency Status | 100.00% | |
Financing Receivables, 1 to 29 Days Past Due [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Delinquency Status | 94.30% | |
Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Delinquency Status | 2.30% | |
Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Delinquency Status | 1.20% | |
Financing Receivables, 90 to 119 Days Past Due [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Delinquency Status | 0.80% | [2] |
Financing Receivables, Equal to Greater than 120 Days Past Due [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Delinquency Status | 1.40% | [2],[3] |
[1] | Represents the percentage of the total unpaid principal balance that corresponds to loans that are in each delinquency status. | |
[2] | Includes loans more than 90 days past due and still accruing interest. | |
[3] | Interest is accrued up to the date of charge-off at 180 days past due. |
INVESTMENTS IN CONSUMER LOANS99
INVESTMENTS IN CONSUMER LOANS - Carrying Value of Performing Consumer Loans (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Aug. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Loans Receivable [Roll Forward] | |||||||
Purchases | $ 191,081 | $ 290,652 | $ 884,557 | ||||
Accretion of loan discount and premium amortization, net | 747,932 | 525,298 | $ 278,408 | ||||
Performing Loans [Member] | |||||||
Loans Receivable [Roll Forward] | |||||||
Purchases | $ 140,000 | 176,200 | |||||
Consumer Portfolio Segment [Member] | Performing Loans [Member] | |||||||
Loans Receivable [Roll Forward] | |||||||
Beginning balance | 0 | ||||||
SpringCastle Transaction | 1,539,569 | ||||||
Purchases | 176,107 | ||||||
Additional fundings | [1] | 49,289 | |||||
Proceeds from repayments | (239,236) | ||||||
Accretion of loan discount and premium amortization, net | 7,728 | ||||||
Net charge-offs | $ (47,065) | [2] | (47,065) | ||||
Provision for loan losses | (50,503) | (3,438) | |||||
Ending balance | $ 1,482,954 | $ 1,482,954 | $ 0 | ||||
[1] | Represents draws on consumer loans with revolving privileges. | ||||||
[2] | Consumer loans, other than PCD loans, are charged off when available information confirms that loans are uncollectible, which is generally when they become 180 days past due. Charge-offs are presented net of $8.1 million in recoveries of previously charged-off UPB. |
INVESTMENTS IN CONSUMER LOAN100
INVESTMENTS IN CONSUMER LOANS - Allowance for Loan Losses on Performing Consumer Loans, Held-for-Investment (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2016 | Oct. 31, 2016 | |||
Performing Loans [Member] | |||||
Loans Receivable [Roll Forward] | |||||
UPB of Underlying Mortgages | $ 177,400 | $ 177,400 | $ 50,000 | ||
Consumer Portfolio Segment [Member] | |||||
Loans Receivable [Roll Forward] | |||||
UPB of Underlying Mortgages | 5,300 | 5,300 | |||
Post-modification recorded investment | 4,300 | ||||
Consumer Portfolio Segment [Member] | Performing Loans [Member] | |||||
Loans Receivable [Roll Forward] | |||||
Collectively Evaluated, beginning balance | [1] | 0 | |||
Individually Impaired, beginning balance | [2] | 0 | |||
Total, beginning balance | 0 | ||||
Provision for loan and losses | 50,503 | 3,438 | |||
Net charge-offs | (47,065) | [3] | (47,065) | ||
Collectively Evaluated, ending balance | [1] | 2,441 | 2,441 | ||
Individually Impaired, ending balance | [2] | 997 | 997 | ||
Total, ending balance | 3,438 | 3,438 | |||
Recovery of bad debts | 8,100 | ||||
Allowance for Losses on Finance Receivables, Collectively Evaluated [Member] | Consumer Portfolio Segment [Member] | Performing Loans [Member] | |||||
Loans Receivable [Roll Forward] | |||||
Provision for loan and losses | 49,506 | [1] | $ 2,000 | ||
Net charge-offs | [1],[3] | (47,065) | |||
Allowance for Losses on Finance Receivables, Individually Impaired [Member] | Consumer Portfolio Segment [Member] | Performing Loans [Member] | |||||
Loans Receivable [Roll Forward] | |||||
Provision for loan and losses | [2] | 997 | |||
Net charge-offs | [2],[3] | $ 0 | |||
[1] | Represents smaller-balance homogeneous loans that are not individually considered impaired and are evaluated based on an analysis of collective borrower performance, key terms of the loans and historical and anticipated trends in defaults and loss severities, and consideration of the unamortized acquisition discount. Includes a provision for loan losses of $2.0 million for newly originated loans acquired during the year ended December 31, 2016. | ||||
[2] | Represents consumer loan modifications considered to be troubled debt restructurings (“TDRs”) as they provide concessions to borrowers, primarily in the form of interest rate reductions, who are experiencing financial difficulty. As of December 31, 2016, there are $5.3 million in UPB and $4.3 million in carrying value of consumer loans classified as TDRs. | ||||
[3] | Consumer loans, other than PCD loans, are charged off when available information confirms that loans are uncollectible, which is generally when they become 180 days past due. Charge-offs are presented net of $8.1 million in recoveries of previously charged-off UPB. |
INVESTMENTS IN CONSUMER LOAN101
INVESTMENTS IN CONSUMER LOANS - Carrying Value of Purchased Deteriorated Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Loans Receivable [Roll Forward] | ||||
Accretion and other amortization | $ 747,932 | $ 525,298 | $ 278,408 | |
Receivables Acquired with Deteriorated Credit Quality [Member] | Consumer Portfolio Segment [Member] | ||||
Loans Receivable [Roll Forward] | ||||
Beginning balance | 0 | |||
SpringCastle Transaction | 395,129 | |||
Provision for loan losses | [1] | (3,013) | ||
Proceeds from repayments | (112,222) | |||
Accretion and other amortization | 36,638 | |||
Ending balance | $ 316,532 | $ 0 | ||
[1] | Represents the present value of cash flows expected at acquisition that are no longer expected to be collected. |
INVESTMENTS IN CONSUMER LOAN102
INVESTMENTS IN CONSUMER LOANS - UPB and Carrying Value of Consumer Loans (Details) - Receivables Acquired with Deteriorated Credit Quality [Member] - Consumer Portfolio Segment [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Mar. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Unpaid Principal Balance | $ 371,261 | $ 450,611 |
Carrying Value | $ 316,532 | $ 395,129 |
INVESTMENTS IN CONSUMER LOAN103
INVESTMENTS IN CONSUMER LOANS - Accretable Yield for Consumer Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Loans Receivable [Roll Forward] | |||
Beginning balance | $ 71,063 | $ 0 | |
SpringCastle Transaction | 23,688 | 72,053 | |
Accretion | (8,876) | (990) | |
Ending balance | 23,688 | 71,063 | |
Receivables Acquired with Deteriorated Credit Quality [Member] | Consumer Portfolio Segment [Member] | |||
Loans Receivable [Roll Forward] | |||
Beginning balance | 0 | ||
SpringCastle Transaction | 176,387 | ||
Accretion | (36,638) | ||
Reclassifications from non-accretable difference | [1] | 28,179 | |
Ending balance | $ 167,928 | $ 0 | |
[1] | Represents a probable and significant increase in cash flows previously expected to be uncollectible. |
INVESTMENTS IN CONSUMER LOAN104
INVESTMENTS IN CONSUMER LOANS - Others' Interest in Equity of Consumer Loan Companies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Noncontrolling Interest [Line Items] | ||||||||||||
Total Consumer Loan Companies equity | $ 3,260,100 | $ 2,795,933 | $ 3,260,100 | $ 2,795,933 | ||||||||
Noncontrolling interests in equity of consolidated subsidiaries | 208,077 | 190,647 | 208,077 | 190,647 | ||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries | 16,908 | [1] | $ 32,178 | $ 24,975 | $ 4,202 | $ (3,928) | $ 7,193 | $ 4,158 | $ 5,823 | 78,263 | $ 13,246 | $ 89,222 |
Consumer Loan Companies [Member] | ||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||
Total Consumer Loan Companies equity | $ 75,311 | 75,311 | ||||||||||
Net Consumer Loan Companies income (loss) | $ 81,992 | |||||||||||
Consumer Loan Companies [Member] | ||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||
Others’ ownership interest | 46.50% | 46.50% | ||||||||||
Noncontrolling interests in equity of consolidated subsidiaries | $ 35,020 | $ 35,020 | ||||||||||
Noncontrolling interests in income (loss) of consolidated subsidiaries | $ 38,127 | |||||||||||
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. |
INVESTMENTS IN CONSUMER LOAN105
INVESTMENTS IN CONSUMER LOANS - Assets and Liabilities Related to Variable Interest Entities (Details) - VIE [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets | |||
Total assets | [1] | $ 1,789,286 | $ 2,410,098 |
Liabilities | |||
Notes and bonds payable | 1,464,851 | 2,060,347 | |
Accounts payable and accrued expenses | 5,187 | 6,111 | |
Total liabilities | [1] | 1,470,038 | $ 2,066,458 |
Consumer Loan Companies [Member] | |||
Assets | |||
Consumer loans, held-for-investment | 1,638,357 | ||
Restricted cash | 13,393 | ||
Accrued interest receivable | 24,528 | ||
Total assets | [2] | 1,676,278 | |
Liabilities | |||
Notes and bonds payable | 1,648,488 | ||
Accounts payable and accrued expenses | 951 | ||
Total liabilities | [2] | $ 1,649,439 | |
[1] | The creditors of the Buyer do not have recourse to the general credit of New Residential and the assets of the Buyer are not directly available to satisfy New Residential’s obligations. | ||
[2] | The creditors of the Consumer Loan SPVs do not have recourse to the general credit of New Residential, and the assets of the Consumer Loan SPVs are not directly available to satisfy New Residential’s obligations. |
INVESTMENTS IN CONSUMER LOAN106
INVESTMENTS IN CONSUMER LOANS - Summary of Equity Method Investments Prior to Consolidation, Balance Sheet Components (Details) - Consumer Loan Companies [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2013 |
Schedule of Consumer Loans [Line Items] | ||||
Consumer Loan Assets (amortized cost basis) | $ 1,698,130 | |||
Other Assets | 70,469 | |||
Debt | (1,912,267) | |||
Other liabilities | (5,640) | |||
Equity | (149,308) | |||
New Residential’s investment | $ 0 | |||
New Residential’s ownership | 30.00% | 30.00% | 30.00% | 30.00% |
INVESTMENTS IN CONSUMER LOAN107
INVESTMENTS IN CONSUMER LOANS - Summary of Equity Method Investments Prior to Consolidation (Details) - Consumer Loan Companies [Member] - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Oct. 03, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2013 | |
Schedule of Consumer Loans [Line Items] | |||||
Interest income | $ 100,131 | $ 455,479 | $ 534,990 | ||
Interest expense | (19,654) | (87,000) | (81,706) | ||
Provision for finance receivable losses | (14,043) | (67,935) | (104,921) | ||
Other expenses, net | (13,239) | (60,263) | (74,781) | ||
Change in fair value of debt | 0 | 0 | (14,810) | ||
Loss on extinguishment of debt | 0 | 0 | (21,151) | ||
Net income | $ 53,195 | $ 240,281 | $ 237,621 | ||
New Residential’s equity in net income through October 3, 2014 | $ 53,840 | ||||
New Residential’s ownership | 30.00% | 30.00% | 30.00% | 30.00% | |
Tax withholding payments on behalf of New Residential, treated as non-cash distributions | $ 25 | $ 585 | $ 609 | ||
Distributions in excess of basis, treated as gains, excluding tax withholding payments | $ 9,918 | $ 43,369 | $ 91,411 |
DERIVATIVES - Narrative (Detail
DERIVATIVES - Narrative (Details) - Not Designated as Hedging Instrument [Member] $ in Billions | Dec. 31, 2016USD ($) |
Short [Member] | |
Derivative [Line Items] | |
Derivative liability, notional amount | $ 3.5 |
Long [Member] | |
Derivative [Line Items] | |
Derivative liability, notional amount | 2.1 |
Long [Member] | Accrued Expenses and Other Liabilities [Member] | |
Derivative [Line Items] | |
Derivative liability, notional amount | $ 0.5 |
DERIVATIVES - Schedule of Deriv
DERIVATIVES - Schedule of Derivatives (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Derivative [Line Items] | ||
Derivative assets | $ 6,762 | $ 2,689 |
Derivative liabilities | 3,021 | 13,443 |
Interest Rate Caps [Member] | ||
Derivative [Line Items] | ||
Derivative assets | 4,251 | 2,689 |
TBAs [Member] | ||
Derivative [Line Items] | ||
Derivative assets | 2,511 | 0 |
Derivative liabilities | 0 | 2,058 |
Interest Rate Swaps [Member] | ||
Derivative [Line Items] | ||
Derivative liabilities | $ 3,021 | $ 11,385 |
DERIVATIVES - Schedule of De110
DERIVATIVES - Schedule of Derivatives - Notional Amount (Details) - Not Designated as Hedging Instrument [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Short [Member] | |||
Derivative [Line Items] | |||
Derivative liability, notional amount | $ 3,500,000,000 | ||
Long [Member] | |||
Derivative [Line Items] | |||
Derivative liability, notional amount | 2,100,000,000 | ||
TBAs [Member] | Short [Member] | |||
Derivative [Line Items] | |||
Derivative liability, notional amount | [1] | 3,465,500,000 | $ 1,450,000,000 |
TBAs [Member] | Long [Member] | |||
Derivative [Line Items] | |||
Derivative liability, notional amount | [1] | 2,125,552,000 | 750,000,000 |
Interest Rate Caps [Member] | |||
Derivative [Line Items] | |||
Derivative asset, notional amount | [2] | $ 1,185,000,000 | 3,400,000,000 |
Average remaining maturity (in months) | 18 months | ||
Interest Rate Swaps [Member] | |||
Derivative [Line Items] | |||
Derivative liability, notional amount | [3] | $ 3,640,000,000 | $ 2,444,000,000 |
Average remaining maturity (in months) | 22 months | ||
Average fixed interest rate | 1.35% | ||
Interest Rate Cap, Contract One [Member] | |||
Derivative [Line Items] | |||
Derivative, cap interest rate | 0.50% | ||
Notional amount of derivatives | $ 550,000,000 | ||
Interest Rate Cap, Contract Two [Member] | |||
Derivative [Line Items] | |||
Derivative, cap interest rate | 0.75% | ||
Notional amount of derivatives | $ 300,000,000 | ||
Interest Rate Cap, Contract Three [Member] | |||
Derivative [Line Items] | |||
Derivative, cap interest rate | 2.00% | ||
Notional amount of derivatives | $ 185,000,000 | ||
Interest Rate Cap, Contract Four [Member] | |||
Derivative [Line Items] | |||
Derivative, cap interest rate | 4.00% | ||
Notional amount of derivatives | $ 150,000,000 | ||
[1] | Represents the notional amount of Agency RMBS, classified as derivatives. | ||
[2] | Caps LIBOR at 0.50% for $550.0 million of notional, at 0.75% for $300.0 million of notional, at 2.00% for $185.0 million of notional, and at 4.00% for $150.0 million of notional. The weighted average maturity of the interest rate caps as of December 31, 2016 was 18 months. | ||
[3] | Receive LIBOR and pay a fixed rate. The weighted average maturity of the interest rate swaps as of December 31, 2016 was 22 months and the weighted average fixed pay rate was 1.35%. |
DERIVATIVES - Schedule of De111
DERIVATIVES - Schedule of Derivatives - Gain (Losses) (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Derivative [Line Items] | ||||
Other income (loss), net | [1] | $ 5,774 | $ (3,538) | $ (8,847) |
Gain (loss) on settlement of investments, net | (27,491) | (46,982) | (40,400) | |
Total gains (losses) | (21,717) | (50,520) | (49,247) | |
Non-Performing Loans [Member] | ||||
Derivative [Line Items] | ||||
Other income (loss), net | [1],[2] | 0 | 0 | (1,149) |
Gain (loss) on settlement of investments, net | [2] | 0 | 0 | 5,609 |
Real Estate Securities [Member] | ||||
Derivative [Line Items] | ||||
Other income (loss), net | [1],[2] | 0 | 0 | 2,336 |
Gain (loss) on settlement of investments, net | [2] | 0 | 0 | 43 |
TBAs [Member] | ||||
Derivative [Line Items] | ||||
Other income (loss), net | [1] | (414) | (2,058) | (4,985) |
Gain (loss) on settlement of investments, net | (17,927) | (27,142) | (33,638) | |
Interest Rate Caps [Member] | ||||
Derivative [Line Items] | ||||
Other income (loss), net | [1] | 688 | (1,749) | (4) |
Gain (loss) on settlement of investments, net | (4,754) | (1,180) | 0 | |
Interest Rate Swaps [Member] | ||||
Derivative [Line Items] | ||||
Other income (loss), net | [1] | 5,500 | 269 | (5,045) |
Gain (loss) on settlement of investments, net | (4,810) | (18,660) | (12,590) | |
U.S.T. Short Positions [Member] | ||||
Derivative [Line Items] | ||||
Gain (loss) on settlement of investments, net | $ 0 | $ 0 | $ 176 | |
[1] | Represents unrealized gains (losses). | |||
[2] | Prior to December 31, 2014, investments purchased from, and financed by, the selling counterparty that New Residential accounted for as linked transactions were reflected as derivatives. Upon the adoption of ASU No. 2014-11 on January 1, 2015, these transactions are accounted for as secured borrowings. |
DEBT OBLIGATIONS - Schedule of
DEBT OBLIGATIONS - Schedule of Debt Obligations (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | [2] | ||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | $ 13,208,783,000 | ||||||
Carrying Value | $ 13,181,236,000 | [1] | $ 11,292,622,000 | [1] | $ 6,057,853,000 | ||
Weighted Average Funding Cost | 2.91% | ||||||
Weighted Average Life (Years) | 1 year 10 months 3 days | ||||||
Interest payable | $ 23,108,000 | 18,268,000 | |||||
Servicer Advances [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Value | [3] | 5,549,872,000 | 7,047,061,000 | 2,885,784,000 | |||
Consumer Loans [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Value | 1,700,211,000 | 40,446,000 | $ 0 | ||||
Repurchase Agreements [Member] | Agency RMBS [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [4],[5] | 1,764,760,000 | |||||
Carrying Value | [1],[4],[5] | $ 1,764,760,000 | 1,683,305,000 | ||||
Weighted Average Funding Cost | [4],[5] | 1.00% | |||||
Weighted Average Life (Years) | [4],[5] | 2 months 30 days | |||||
Repurchase Agreements [Member] | Agency RMBS [Member] | Trade And Other Receivables [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Collateral amount | $ 1,700,000,000 | ||||||
Repurchase Agreements [Member] | Agency RMBS [Member] | Collateral [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Weighted Average Life (Years) | [4],[5] | 5 months 5 days | |||||
Outstanding Face Amount of Collateral | [4],[5] | $ 1,786,585,000 | |||||
Amortized Cost Basis of Collateral | [4],[5] | 1,874,554,000 | |||||
Carrying Value of Collateral | [4],[5] | 1,833,348,000 | |||||
Repurchase Agreements [Member] | Non-Agency RMBS [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [5],[6] | 2,654,242,000 | |||||
Carrying Value | [1],[5],[6] | $ 2,654,242,000 | 1,333,852,000 | ||||
Weighted Average Funding Cost | [5],[6] | 2.42% | |||||
Weighted Average Life (Years) | [5],[6] | 30 days | |||||
Repurchase Agreements [Member] | Non-Agency RMBS [Member] | Retained Servicer Advance and Consumer Bonds [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Value | $ 125,800,000 | ||||||
Repurchase Agreements [Member] | Non-Agency RMBS [Member] | Collateral [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Weighted Average Life (Years) | [5],[6] | 7 years 10 months 12 days | |||||
Outstanding Face Amount of Collateral | [5],[6] | $ 6,510,127,000 | |||||
Amortized Cost Basis of Collateral | [5],[6] | 3,358,438,000 | |||||
Carrying Value of Collateral | [5],[6] | 3,481,478,000 | |||||
Repurchase Agreements [Member] | Residential Mortgage Loans [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [5],[7] | 689,132,000 | |||||
Carrying Value | [1],[5],[7] | $ 686,412,000 | 907,993,000 | ||||
Weighted Average Funding Cost | [5],[7] | 3.31% | |||||
Weighted Average Life (Years) | [5],[7] | 8 months 11 days | |||||
Repurchase Agreements [Member] | Residential Mortgage Loans [Member] | Collateral [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Weighted Average Life (Years) | [5],[7] | 3 years 4 months 11 days | |||||
Outstanding Face Amount of Collateral | [5],[7] | $ 1,061,445,000 | |||||
Amortized Cost Basis of Collateral | [5],[7] | 869,297,000 | |||||
Carrying Value of Collateral | [5],[7] | 852,790,000 | |||||
Repurchase Agreements [Member] | Real Estate Owned [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [5],[8],[9] | 85,552,000 | |||||
Carrying Value | [1],[5],[8],[9] | $ 85,217,000 | 77,458,000 | ||||
Weighted Average Funding Cost | [5],[8],[9] | 3.35% | |||||
Weighted Average Life (Years) | [5],[8],[9] | 4 months 6 days | |||||
Repurchase Agreements [Member] | Real Estate Owned [Member] | Collateral [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Value of Collateral | [5],[8],[9] | $ 98,496,000 | |||||
Repurchase Agreements [Member] | Consumer Loan Investment [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [5] | 0 | |||||
Carrying Value | [1],[5] | $ 0 | 40,446,000 | ||||
Weighted Average Funding Cost | [5] | 0.00% | |||||
Weighted Average Life (Years) | [5] | 0 years | |||||
Repurchase Agreements [Member] | Consumer Loan Investment [Member] | Collateral [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Weighted Average Life (Years) | [5] | 0 years | |||||
Repurchase Agreements [Member] | Total Repurchase Agreements [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [5] | $ 5,193,686,000 | |||||
Carrying Value | [1],[5] | $ 5,190,631,000 | 4,043,054,000 | ||||
Weighted Average Funding Cost | [5] | 2.07% | |||||
Weighted Average Life (Years) | [5] | 2 months 21 days | |||||
Interest payable | $ 11,000,000 | ||||||
Notes Payable [Member] | Residential Mortgage Loans [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [10] | 8,271,000 | |||||
Carrying Value | [1],[10] | $ 8,271,000 | 19,529,000 | ||||
Weighted Average Funding Cost | [10] | 3.44% | |||||
Weighted Average Life (Years) | [10] | 9 months 29 days | |||||
Notes Payable [Member] | Residential Mortgage Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate spread | 2.875% | ||||||
Notes Payable [Member] | Residential Mortgage Loans [Member] | Collateral [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Weighted Average Life (Years) | [10] | 4 years 6 months | |||||
Outstanding Face Amount of Collateral | [10] | $ 13,248,000 | |||||
Amortized Cost Basis of Collateral | [10] | 7,514,000 | |||||
Carrying Value of Collateral | [10] | 7,514,000 | |||||
Notes Payable [Member] | Real Estate Owned [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [10] | 3,106,000 | |||||
Carrying Value | [1],[10] | $ 3,106,000 | 0 | ||||
Weighted Average Funding Cost | [10] | 3.44% | |||||
Weighted Average Life (Years) | [10] | 9 months 29 days | |||||
Notes Payable [Member] | Real Estate Owned [Member] | Collateral [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Carrying Value of Collateral | [10] | $ 3,378,000 | |||||
Notes Payable [Member] | Secured Corporate Note [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [11] | 734,254,000 | |||||
Carrying Value | [1],[11] | $ 729,145,000 | 182,978,000 | ||||
Weighted Average Funding Cost | [11] | 5.50% | |||||
Weighted Average Life (Years) | [11] | 2 years 2 months 23 days | |||||
Notes Payable [Member] | Secured Corporate Note [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate spread | 4.75% | ||||||
Notes Payable [Member] | Secured Corporate Note [Member] | Collateral [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Weighted Average Life (Years) | [11] | 6 years 2 months 5 days | |||||
Outstanding Face Amount of Collateral | [11] | $ 310,072,544,000 | |||||
Amortized Cost Basis of Collateral | [11] | 1,271,217,000 | |||||
Carrying Value of Collateral | [11] | 1,437,226,000 | |||||
Notes Payable [Member] | Servicer Advances [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [12] | 5,560,412,000 | |||||
Carrying Value | [1],[12] | $ 5,549,872,000 | 7,047,061,000 | ||||
Weighted Average Funding Cost | [12] | 3.19% | |||||
Weighted Average Life (Years) | [12] | 2 years 8 months 8 days | |||||
Face amount of fixed rate debt | $ 3,500,000,000 | ||||||
Notes Payable [Member] | Servicer Advances [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate spread | 1.90% | ||||||
Notes Payable [Member] | Servicer Advances [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate spread | 2.10% | ||||||
Notes Payable [Member] | Servicer Advances [Member] | Collateral [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Weighted Average Life (Years) | [12] | 4 years 7 months 1 day | |||||
Outstanding Face Amount of Collateral | [12] | $ 5,617,759,000 | |||||
Amortized Cost Basis of Collateral | [12] | 5,687,635,000 | |||||
Carrying Value of Collateral | [12] | 5,706,593,000 | |||||
Notes Payable [Member] | Consumer Loans [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | [13],[14] | 1,709,054,000 | |||||
Carrying Value | [1],[13],[14] | $ 1,700,211,000 | 0 | ||||
Weighted Average Funding Cost | [13],[14] | 3.48% | |||||
Weighted Average Life (Years) | [13],[14] | 3 years 10 months 7 days | |||||
Notes Payable [Member] | Consumer Loans [Member] | Collateral [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Weighted Average Life (Years) | [13],[14] | 3 years 10 months 6 days | |||||
Outstanding Face Amount of Collateral | [13],[14] | $ 1,809,952,000 | |||||
Amortized Cost Basis of Collateral | [13],[14] | 1,802,809,000 | |||||
Carrying Value of Collateral | [13],[14] | 1,799,372,000 | |||||
Notes Payable [Member] | Total Notes Payable [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | 8,015,097,000 | ||||||
Carrying Value | [1] | $ 7,990,605,000 | $ 7,249,568,000 | ||||
Weighted Average Funding Cost | 3.46% | ||||||
Weighted Average Life (Years) | 2 years 10 months 21 days | ||||||
Secured Debt [Member] | UPB Class A [Member] | |||||||
Debt Instrument [Line Items] | |||||||
UPB of Underlying Mortgages | $ 1,290,000,000 | ||||||
Interest rate, stated percentage | 3.05% | ||||||
Secured Debt [Member] | UPB Class B [Member] | |||||||
Debt Instrument [Line Items] | |||||||
UPB of Underlying Mortgages | $ 211,000,000 | ||||||
Interest rate, stated percentage | 4.10% | ||||||
Secured Debt [Member] | UPB Class C-1 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
UPB of Underlying Mortgages | $ 39,000,000 | ||||||
Interest rate, stated percentage | 5.63% | ||||||
Secured Debt [Member] | UPB Class C-2 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
UPB of Underlying Mortgages | $ 39,000,000 | ||||||
Interest rate, stated percentage | 5.63% | ||||||
Secured Debt [Member] | UPB Class D-1 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
UPB of Underlying Mortgages | $ 39,000,000 | ||||||
Interest rate, stated percentage | 5.80% | ||||||
Secured Debt [Member] | UPB Class D-2 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
UPB of Underlying Mortgages | $ 39,000,000 | ||||||
Interest rate, stated percentage | 5.80% | ||||||
Secured Debt [Member] | 4.75% Non-Agency Excess MSR Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | $ 410,000,000 | ||||||
Secured Debt [Member] | 5.68% Non-Agency Excess MSR Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | $ 324,254,195 | ||||||
Interest rate, stated percentage | 5.683% | ||||||
Secured Debt [Member] | 3.25% Consumer Loans [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding Face Amount | $ 132,200,000 | ||||||
Secured Debt [Member] | 3.25% Consumer Loans [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate spread | 3.25% | ||||||
[1] | Net of deferred financing costs. | ||||||
[2] | Excludes debt related to linked transactions (Note 10). | ||||||
[3] | New Residential net settles daily borrowings and repayments of the Notes and Bonds Payable on its Servicer Advances. | ||||||
[4] | All of the Agency RMBS repurchase agreements have a fixed rate. Collateral amounts include approximately $1.7 billion of related trade and other receivables. | ||||||
[5] | These repurchase agreements had approximately $11.0 million of associated accrued interest payable as of December 31, 2016. | ||||||
[6] | All of the Non-Agency RMBS repurchase agreements have LIBOR-based floating interest rates. This includes repurchase agreements of $125.8 million on retained servicer advance and consumer loan bonds. | ||||||
[7] | All of these repurchase agreements have LIBOR-based floating interest rates. | ||||||
[8] | All of these repurchase agreements have LIBOR-based floating interest rates. | ||||||
[9] | Includes financing collateralized by receivables including claims from FHA on Ginnie Mae EBO loans for which foreclosure has been completed and for which New Residential has made or intends to make a claim on the FHA guarantee. | ||||||
[10] | The note is payable to Nationstar and bears interest equal to one-month LIBOR plus 2.88%. | ||||||
[11] | Includes $410.0 million of corporate loans which bear interest equal to the sum of (i) a floating rate index equal to one-month LIBOR and (ii) a margin of 4.75%, and a $324.3 million corporate loan which bears interest equal to 5.68%. The outstanding face amount of the collateral represents the UPB of the residential mortgage loans underlying Excess MSRs that secure these notes, and the $324.3 million corporate loan is also collateralized by the rights to the related basic fee portion of the MSRs. | ||||||
[12] | $3.5 billion face amount of the notes have a fixed rate while the remaining notes bear interest equal to the sum of (i) a floating rate index rate equal to one-month LIBOR or a cost of funds rate, as applicable, and (ii) a margin ranging from 1.9% to 2.1%. | ||||||
[13] | Includes a $132.2 million face amount note collateralized by newly originated consumer loans which bears interest equal to one-month LIBOR plus 3.25%. | ||||||
[14] | Includes the SpringCastle debt, which is comprised of the following classes of asset-backed notes held by third parties: $1.29 billion UPB of Class A notes with a coupon of 3.05% and a stated maturity date in November 2023; $211.0 million UPB of Class B notes with a coupon of 4.10% and a stated maturity date in March 2024; $39.0 million UPB of Class C-1 notes with a coupon of 5.63% and a stated maturity date in March 2024; $39.0 million UPB of Class C-2 notes with a coupon of 5.63% and a stated maturity date in March 2024; $39.0 million UPB of Class D-1 notes with a coupon of 5.80% and a stated maturity date in March 2024; and $39.0 million UPB of Class D-2 notes with a coupon of 5.80% and a stated maturity date in March 2024. |
DEBT OBLIGATIONS - Narrative (D
DEBT OBLIGATIONS - Narrative (Details) | Oct. 02, 2015USD ($) | Oct. 31, 2016USD ($)Class | Sep. 30, 2015USD ($) | Dec. 31, 2016USD ($)agreement | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Oct. 13, 2015USD ($) | Oct. 01, 2015USD ($) | ||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 13,208,783,000 | |||||||||||
Debt | 13,181,236,000 | [1] | $ 11,292,622,000 | [1] | $ 6,057,853,000 | [2] | ||||||
Amount released from restricted cash accounts | $ (74,604,000) | 0 | $ 0 | |||||||||
Percent decline in equity, first period | 50.00% | |||||||||||
Decline in equity, first period (in months) | 12 months | |||||||||||
Percent decline in equity, second period | 35.00% | |||||||||||
Decline in equity, second period (in months) | 3 months | |||||||||||
Ratio of indebtedness to tangible net worth | 4 | |||||||||||
HSART [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Surplus servicer advance commitments | $ 4,000,000,000 | |||||||||||
Amount released from restricted cash accounts | $ 92,700,000 | |||||||||||
HSART [Member] | General and Administrative Expense [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Liability for settlement agreement | $ 9,100,000 | |||||||||||
Term Notes [Member] | HSART [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt | $ 2,500,000,000 | $ 2,500,000,000 | ||||||||||
Repurchase Agreements [Member] | Total Repurchase Agreements [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | [3] | $ 5,193,686,000 | ||||||||||
Debt | [1],[3] | $ 5,190,631,000 | $ 4,043,054,000 | |||||||||
Secured Debt [Member] | Asset-backed Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 79,900,000 | |||||||||||
Secured Debt [Member] | Asset-backed Notes [Member] | Consumer Loan Companies [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | 1,700,000,000 | |||||||||||
Amount voluntarily retained | 157,600,000 | |||||||||||
Loss on extinguishment of debt | $ 4,700,000 | |||||||||||
Number of classes of debt | Class | 6 | |||||||||||
Stockholders' Equity, Total [Member] | Counterpary Concentration Risk Exceeding 10% [Member] | Repurchase Agreements [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Number of outstanding repurchase agreements | agreement | 0 | |||||||||||
[1] | Net of deferred financing costs. | |||||||||||
[2] | Excludes debt related to linked transactions (Note 10). | |||||||||||
[3] | These repurchase agreements had approximately $11.0 million of associated accrued interest payable as of December 31, 2016. |
DEBT OBLIGATIONS - Schedule 114
DEBT OBLIGATIONS - Schedule of Debt Obligations - Carrying Value (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||
Debt Instrument [Roll Forward] | |||||||
Beginning balance | $ 11,292,622 | [1] | $ 6,057,853 | [2] | |||
Borrowings | 31,015,797 | 9,607,475 | $ 6,412,137 | ||||
Retrospective adjustment for adoption of ASU | 2,310 | ||||||
Repayments | (29,866,052) | (8,798,578) | (4,869,799) | ||||
Ending balance | 13,181,236 | [1] | 11,292,622 | [1] | 6,057,853 | [2] | |
Excess MSRs [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Beginning balance | 182,978 | 0 | [2] | ||||
Ending balance | 729,145 | 182,978 | 0 | [2] | |||
Servicer Advances [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Beginning balance | [3] | 7,047,061 | 2,885,784 | [2] | |||
Ending balance | [3] | 5,549,872 | 7,047,061 | 2,885,784 | [2] | ||
Real Estate Securities [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Beginning balance | 3,017,157 | 2,246,651 | [2] | ||||
Ending balance | 4,419,002 | 3,017,157 | 2,246,651 | [2] | |||
Residential Mortgage and Real Estate Owned [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Beginning balance | 1,004,980 | 925,418 | [2] | ||||
Ending balance | 783,006 | 1,004,980 | 925,418 | [2] | |||
Consumer Loans [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Beginning balance | 40,446 | 0 | [2] | ||||
Ending balance | 1,700,211 | 40,446 | $ 0 | [2] | |||
ASU 2014-11 [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | 0 | (146,741) | |||||
Repurchase Agreements [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Borrowings | 31,015,797 | 9,607,475 | |||||
Repayments | (29,866,052) | (8,798,578) | |||||
Capitalized deferred financing costs, net of amortization | (2,169) | ||||||
Repurchase Agreements [Member] | Excess MSRs [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Borrowings | 0 | 0 | |||||
Repayments | 0 | 0 | |||||
Capitalized deferred financing costs, net of amortization | 0 | ||||||
Repurchase Agreements [Member] | Servicer Advances [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Borrowings | [3] | 0 | 0 | ||||
Repayments | [3] | 0 | 0 | ||||
Capitalized deferred financing costs, net of amortization | [3] | 0 | |||||
Repurchase Agreements [Member] | Real Estate Securities [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Borrowings | 30,441,880 | 7,649,261 | |||||
Repayments | (29,040,035) | (6,963,404) | |||||
Capitalized deferred financing costs, net of amortization | 0 | ||||||
Repurchase Agreements [Member] | Residential Mortgage and Real Estate Owned [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Borrowings | 552,459 | 1,915,056 | |||||
Repayments | (764,113) | (1,832,462) | |||||
Capitalized deferred financing costs, net of amortization | (2,169) | ||||||
Repurchase Agreements [Member] | Consumer Loans [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Borrowings | 21,458 | 43,158 | |||||
Repayments | (61,904) | (2,712) | |||||
Capitalized deferred financing costs, net of amortization | 0 | ||||||
Repurchase Agreements [Member] | ASU 2014-11 [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Retrospective adjustment for adoption of ASU | 85,955 | ||||||
Repurchase Agreements [Member] | ASU 2014-11 [Member] | Excess MSRs [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Retrospective adjustment for adoption of ASU | 0 | ||||||
Repurchase Agreements [Member] | ASU 2014-11 [Member] | Servicer Advances [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Retrospective adjustment for adoption of ASU | [3] | 0 | |||||
Repurchase Agreements [Member] | ASU 2014-11 [Member] | Real Estate Securities [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Retrospective adjustment for adoption of ASU | 84,649 | ||||||
Repurchase Agreements [Member] | ASU 2014-11 [Member] | Residential Mortgage and Real Estate Owned [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Retrospective adjustment for adoption of ASU | 1,306 | ||||||
Repurchase Agreements [Member] | ASU 2014-11 [Member] | Consumer Loans [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Retrospective adjustment for adoption of ASU | 0 | ||||||
Repurchase Agreements [Member] | ASU 2015-03 [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | (888) | ||||||
Repurchase Agreements [Member] | ASU 2015-03 [Member] | Excess MSRs [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | 0 | ||||||
Repurchase Agreements [Member] | ASU 2015-03 [Member] | Servicer Advances [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | [3] | 0 | |||||
Repurchase Agreements [Member] | ASU 2015-03 [Member] | Real Estate Securities [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | 0 | ||||||
Repurchase Agreements [Member] | ASU 2015-03 [Member] | Residential Mortgage and Real Estate Owned [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | (888) | ||||||
Repurchase Agreements [Member] | ASU 2015-03 [Member] | Consumer Loans [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | 0 | ||||||
Notes Payable [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Borrowings | 9,788,708 | 11,634,288 | |||||
Repayments | (10,843,732) | (7,286,860) | |||||
Acquired borrowings, net of discount | 1,803,192 | ||||||
Discount on borrowings, net of amortization | (1,954) | ||||||
Capitalized deferred financing costs, net of amortization | (5,176) | ||||||
Notes Payable [Member] | Excess MSRs [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Borrowings | 1,141,996 | 852,419 | |||||
Repayments | (592,175) | (669,406) | |||||
Acquired borrowings, net of discount | 0 | ||||||
Discount on borrowings, net of amortization | 1,420 | ||||||
Capitalized deferred financing costs, net of amortization | (5,074) | ||||||
Notes Payable [Member] | Servicer Advances [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Beginning balance | [1],[4] | 7,047,061 | |||||
Borrowings | [3] | 6,857,006 | 10,780,237 | ||||
Repayments | [3] | (8,354,692) | (6,612,372) | ||||
Acquired borrowings, net of discount | [3] | 0 | |||||
Discount on borrowings, net of amortization | [3] | 0 | |||||
Capitalized deferred financing costs, net of amortization | [3] | 497 | |||||
Ending balance | [1],[4] | 5,549,872 | 7,047,061 | ||||
Notes Payable [Member] | Real Estate Securities [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Borrowings | 0 | 0 | |||||
Repayments | 0 | 0 | |||||
Acquired borrowings, net of discount | 0 | ||||||
Discount on borrowings, net of amortization | 0 | ||||||
Capitalized deferred financing costs, net of amortization | 0 | ||||||
Notes Payable [Member] | Residential Mortgage and Real Estate Owned [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Borrowings | 0 | 1,632 | |||||
Repayments | (8,151) | (5,082) | |||||
Acquired borrowings, net of discount | 0 | ||||||
Discount on borrowings, net of amortization | 0 | ||||||
Capitalized deferred financing costs, net of amortization | 0 | ||||||
Notes Payable [Member] | Consumer Loans [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Beginning balance | [1],[5],[6] | 0 | |||||
Borrowings | 1,789,706 | 0 | |||||
Repayments | (1,888,714) | 0 | |||||
Acquired borrowings, net of discount | 1,803,192 | ||||||
Discount on borrowings, net of amortization | (3,374) | ||||||
Capitalized deferred financing costs, net of amortization | (599) | ||||||
Ending balance | [1],[5],[6] | $ 1,700,211 | 0 | ||||
Notes Payable [Member] | ASU 2015-03 [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | (6,623) | ||||||
Notes Payable [Member] | ASU 2015-03 [Member] | Excess MSRs [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | (35) | ||||||
Notes Payable [Member] | ASU 2015-03 [Member] | Servicer Advances [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | [3] | (6,588) | |||||
Notes Payable [Member] | ASU 2015-03 [Member] | Real Estate Securities [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | 0 | ||||||
Notes Payable [Member] | ASU 2015-03 [Member] | Residential Mortgage and Real Estate Owned [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | 0 | ||||||
Notes Payable [Member] | ASU 2015-03 [Member] | Consumer Loans [Member] | |||||||
Debt Instrument [Roll Forward] | |||||||
Adoption of ASU | $ 0 | ||||||
[1] | Net of deferred financing costs. | ||||||
[2] | Excludes debt related to linked transactions (Note 10). | ||||||
[3] | New Residential net settles daily borrowings and repayments of the Notes and Bonds Payable on its Servicer Advances. | ||||||
[4] | $3.5 billion face amount of the notes have a fixed rate while the remaining notes bear interest equal to the sum of (i) a floating rate index rate equal to one-month LIBOR or a cost of funds rate, as applicable, and (ii) a margin ranging from 1.9% to 2.1%. | ||||||
[5] | Includes a $132.2 million face amount note collateralized by newly originated consumer loans which bears interest equal to one-month LIBOR plus 3.25%. | ||||||
[6] | Includes the SpringCastle debt, which is comprised of the following classes of asset-backed notes held by third parties: $1.29 billion UPB of Class A notes with a coupon of 3.05% and a stated maturity date in November 2023; $211.0 million UPB of Class B notes with a coupon of 4.10% and a stated maturity date in March 2024; $39.0 million UPB of Class C-1 notes with a coupon of 5.63% and a stated maturity date in March 2024; $39.0 million UPB of Class C-2 notes with a coupon of 5.63% and a stated maturity date in March 2024; $39.0 million UPB of Class D-1 notes with a coupon of 5.80% and a stated maturity date in March 2024; and $39.0 million UPB of Class D-2 notes with a coupon of 5.80% and a stated maturity date in March 2024. |
DEBT OBLIGATIONS - Schedule 115
DEBT OBLIGATIONS - Schedule of Contractual Maturities of Debt Obligations (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Debt maturing in: | |
2,017 | $ 5,842,612 |
2,018 | 1,388,699 |
2,019 | 3,274,095 |
2,020 | 376,246 |
2021 and thereafter | 2,327,131 |
Total long-term debt | 13,208,783 |
Nonrecourse [Member] | |
Debt maturing in: | |
2,017 | 697,437 |
2,018 | 1,160,179 |
2,019 | 2,759,841 |
2,020 | 376,246 |
2021 and thereafter | 2,327,131 |
Total long-term debt | 7,320,834 |
Recourse [Member] | |
Debt maturing in: | |
2,017 | 5,145,175 |
2,018 | 228,520 |
2,019 | 514,254 |
2,020 | 0 |
2021 and thereafter | 0 |
Total long-term debt | $ 5,887,949 |
DEBT OBLIGATIONS - Schedule 116
DEBT OBLIGATIONS - Schedule of Borrowing Capacity (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016USD ($) | ||
Debt Instrument [Line Items] | ||
Outstanding Face Amount | $ 13,208,783 | |
Retained Non-Agency Bonds [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding Face Amount | 94,400 | |
Real Estate Loans and REO [Member] | ||
Debt Instrument [Line Items] | ||
Borrowing Capacity | 2,260,000 | |
Balance Outstanding | 774,684 | |
Available Financing | 1,485,316 | |
Excess MSRs [Member] | ||
Debt Instrument [Line Items] | ||
Borrowing Capacity | 525,000 | |
Balance Outstanding | 410,000 | |
Available Financing | 115,000 | |
Servicer Advances [Member] | ||
Debt Instrument [Line Items] | ||
Borrowing Capacity | 6,577,393 | [1] |
Balance Outstanding | 5,560,412 | [1] |
Available Financing | $ 1,016,981 | [1] |
Unused borrowing capacity fee | 0.10% | |
Consumer Loan [Member] | ||
Debt Instrument [Line Items] | ||
Borrowing Capacity | $ 150,000 | |
Balance Outstanding | 132,168 | |
Available Financing | 17,832 | |
Debt Borrowing Capacity [Member] | ||
Debt Instrument [Line Items] | ||
Borrowing Capacity | 9,512,393 | |
Balance Outstanding | 6,877,264 | |
Available Financing | $ 2,635,129 | |
[1] | New Residential’s unused borrowing capacity is available if New Residential has additional eligible collateral to pledge and meets other borrowing conditions as set forth in the applicable agreements, including any applicable advance rate. New Residential pays a 0.1% fee on the unused borrowing capacity. Excludes borrowing capacity and outstanding debt for retained Non-Agency bonds with a current face amount of $94.4 million. |
FAIR VALUE MEASUREMENT - Schedu
FAIR VALUE MEASUREMENT - Schedule of Carrying Values and Fair Values of Financial Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |||
Investments in: | |||||
Excess mortgage servicing rights, at fair value | $ 659,483 | $ 0 | |||
Real estate securities, available-for-sale | 5,073,858 | 2,501,881 | |||
Derivative assets, at fair value | 6,762 | 2,689 | |||
Restricted cash, at fair value | 163,095 | 94,702 | |||
Liabilities: | |||||
Derivative liabilities, at fair value | 3,021 | 13,443 | |||
Recurring Basis [Member] | |||||
Investments in: | |||||
Excess mortgage servicing rights, principal balance | 277,975,997 | [1] | 329,367,971 | [2] | |
Excess mortgage servicing rights, equity method investees, principal balance | 60,677,300 | [1] | 73,058,050 | [2] | |
Mortgage servicing rights, principal balance | [1] | 79,935,302 | |||
Servicer advances, principal balance | 5,617,759 | 7,578,110 | |||
Real estate securities, available-for-sale, principal balance | 8,788,957 | 4,418,552 | |||
Residential mortgage loans, held-for-investment, principal balance | 203,673 | 506,135 | |||
Residential mortgage loans, held-for-sale, principal balance | 908,930 | 859,714 | |||
Consumer loans, principal balance | 1,809,952 | ||||
Derivative assets, principal balance | 6,776,052 | 3,400,000 | |||
Cash and cash equivalents, principal balance | 290,602 | 249,936 | |||
Restricted cash, principal balance | 163,095 | 94,702 | |||
Other assets, principal balance | 888,412 | ||||
Liabilities: | |||||
Repurchase agreements, principal balance | 5,193,686 | 4,043,942 | |||
Notes payable, principal balance | 8,015,097 | 7,262,056 | |||
Derivative liabilities, principal balance | 3,640,000 | 4,644,000 | |||
Recurring Basis [Member] | Level 1 [Member] | |||||
Investments in: | |||||
Excess mortgage servicing rights, at fair value | 0 | [1] | 0 | [2] | |
Excess mortgage servicing rights, equity method investees, at fair value | 0 | [1] | 0 | [2] | |
Mortgage servicing rights, at fair value | [1] | 0 | |||
Servicer advances, at fair value | 0 | 0 | |||
Real estate securities, available-for-sale | 0 | 0 | |||
Residential mortgage loans, held-for-investment, at fair value | 0 | 0 | |||
Residential mortgage loans, held-for-sale, at fair value | 0 | 0 | |||
Consumer loans, at fair value | 0 | ||||
Derivative assets, at fair value | 0 | 0 | |||
Cash and cash equivalents, at fair value | 290,602 | 249,936 | |||
Restricted cash, at fair value | 163,095 | 94,702 | |||
Other assets, at fair value | 0 | ||||
Assets, fair value | 453,697 | 344,638 | |||
Liabilities: | |||||
Repurchase agreements, at fair value | 0 | 0 | |||
Notes and bonds payable, at fair value | 0 | 0 | |||
Derivative liabilities, at fair value | 0 | 0 | |||
Liabilities, fair value | 0 | 0 | |||
Recurring Basis [Member] | Level 2 [Member] | |||||
Investments in: | |||||
Excess mortgage servicing rights, at fair value | 0 | [1] | 0 | [2] | |
Excess mortgage servicing rights, equity method investees, at fair value | 0 | [1] | 0 | [2] | |
Mortgage servicing rights, at fair value | [1] | 0 | |||
Servicer advances, at fair value | 0 | 0 | |||
Real estate securities, available-for-sale | 1,530,298 | 917,598 | |||
Residential mortgage loans, held-for-investment, at fair value | 0 | 0 | |||
Residential mortgage loans, held-for-sale, at fair value | 0 | 0 | |||
Consumer loans, at fair value | 0 | ||||
Derivative assets, at fair value | 6,762 | 2,689 | |||
Cash and cash equivalents, at fair value | 0 | 0 | |||
Restricted cash, at fair value | 0 | 0 | |||
Other assets, at fair value | 0 | ||||
Assets, fair value | 1,537,060 | 920,287 | |||
Liabilities: | |||||
Repurchase agreements, at fair value | 5,193,686 | 4,043,942 | |||
Notes and bonds payable, at fair value | 0 | 0 | |||
Derivative liabilities, at fair value | 3,021 | 13,443 | |||
Liabilities, fair value | 5,196,707 | 4,057,385 | |||
Recurring Basis [Member] | Level 3 [Member] | |||||
Investments in: | |||||
Excess mortgage servicing rights, at fair value | 1,399,455 | [1] | 1,581,517 | [2] | |
Excess mortgage servicing rights, equity method investees, at fair value | 194,788 | [1] | 217,221 | [2] | |
Mortgage servicing rights, at fair value | [1] | 659,483 | |||
Servicer advances, at fair value | 5,706,593 | 7,426,794 | |||
Real estate securities, available-for-sale | 3,543,560 | 1,584,283 | |||
Residential mortgage loans, held-for-investment, at fair value | 190,343 | 330,433 | |||
Residential mortgage loans, held-for-sale, at fair value | 717,985 | 784,750 | |||
Consumer loans, at fair value | 1,819,106 | ||||
Derivative assets, at fair value | 0 | 0 | |||
Cash and cash equivalents, at fair value | 0 | 0 | |||
Restricted cash, at fair value | 0 | 0 | |||
Other assets, at fair value | 4,856 | ||||
Assets, fair value | 14,236,169 | 11,924,998 | |||
Liabilities: | |||||
Repurchase agreements, at fair value | 0 | 0 | |||
Notes and bonds payable, at fair value | 7,993,326 | 7,260,909 | |||
Derivative liabilities, at fair value | 0 | 0 | |||
Liabilities, fair value | 7,993,326 | 7,260,909 | |||
Recurring Basis [Member] | Carrying Value [Member] | |||||
Investments in: | |||||
Excess mortgage servicing rights, at fair value | 1,399,455 | [1] | 1,581,517 | [2] | |
Excess mortgage servicing rights, equity method investees, at fair value | 194,788 | [1] | 217,221 | [2] | |
Mortgage servicing rights, at fair value | [1] | 659,483 | |||
Servicer advances, at fair value | 5,706,593 | 7,426,794 | |||
Real estate securities, available-for-sale | 5,073,858 | 2,501,881 | |||
Residential mortgage loans, held-for-investment, at fair value | 190,761 | 330,178 | |||
Residential mortgage loans, held-for-sale, at fair value | 696,665 | 776,681 | |||
Consumer loans, at fair value | 1,799,486 | ||||
Derivative assets, at fair value | 6,762 | 2,689 | |||
Cash and cash equivalents, at fair value | 290,602 | 249,936 | |||
Restricted cash, at fair value | 163,095 | 94,702 | |||
Other assets, at fair value | 4,856 | ||||
Assets, fair value | 16,186,404 | 13,181,599 | |||
Liabilities: | |||||
Repurchase agreements, at fair value | 5,190,631 | 4,043,054 | |||
Notes and bonds payable, at fair value | 7,990,605 | 7,249,568 | |||
Derivative liabilities, at fair value | 3,021 | 13,443 | |||
Liabilities, fair value | 13,184,257 | 11,306,065 | |||
Recurring Basis [Member] | Fair Value [Member] | |||||
Investments in: | |||||
Excess mortgage servicing rights, at fair value | 1,399,455 | [1] | 1,581,517 | [2] | |
Excess mortgage servicing rights, equity method investees, at fair value | 194,788 | [1] | 217,221 | [2] | |
Mortgage servicing rights, at fair value | [1] | 659,483 | |||
Servicer advances, at fair value | 5,706,593 | 7,426,794 | |||
Real estate securities, available-for-sale | 5,073,858 | 2,501,881 | |||
Residential mortgage loans, held-for-investment, at fair value | 190,343 | 330,433 | |||
Residential mortgage loans, held-for-sale, at fair value | 717,985 | 784,750 | |||
Consumer loans, at fair value | 1,819,106 | ||||
Derivative assets, at fair value | 6,762 | 2,689 | |||
Cash and cash equivalents, at fair value | 290,602 | 249,936 | |||
Restricted cash, at fair value | 163,095 | 94,702 | |||
Other assets, at fair value | 4,856 | ||||
Assets, fair value | 16,226,926 | 13,189,923 | |||
Liabilities: | |||||
Repurchase agreements, at fair value | 5,193,686 | 4,043,942 | |||
Notes and bonds payable, at fair value | 7,993,326 | 7,260,909 | |||
Derivative liabilities, at fair value | 3,021 | 13,443 | |||
Liabilities, fair value | $ 13,190,033 | $ 11,318,294 | |||
[1] | The notional amount represents the total unpaid principal balance of the residential mortgage loans underlying the MSRs and Excess MSRs. New Residential does not receive an excess mortgage servicing amount on non-performing loans in Agency portfolios. | ||||
[2] | The notional amount represents the total unpaid principal balance of the residential mortgage loans underlying the Excess MSRs. New Residential does not receive an excess mortgage servicing amount on non-performing loans in Agency portfolios. |
FAIR VALUE MEASUREMENT - Sch118
FAIR VALUE MEASUREMENT - Schedule of Financial Assets Measured at Fair Value on a Recurring Basis using Level 3 Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
Gains (losses) included in net income | ||||||
Included in gain (loss) on settlement of investments, net | $ (48,800) | $ (19,626) | $ 31,297 | |||
Excess MSRs Investees [Member] | ||||||
Purchases, sales and repayments | ||||||
New Residential’s ownership | 50.00% | 50.00% | ||||
Recurring Basis [Member] | Level 3 [Member] | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Balance, beginning | $ 10,809,815 | $ 4,742,448 | ||||
Transfers | ||||||
Transfers from Level 3 | [1] | 0 | 0 | |||
Transfers to Level 3 | [1] | 0 | 0 | |||
Transfers from investments in excess mortgage servicing rights, equity method investees, to investments in excess mortgage servicing rights | [1] | 0 | ||||
Gains (losses) included in net income | ||||||
Included in other-than-temporary impairment (''OTTI'') on securities | [2] | (10,264) | (5,788) | |||
Included in change in fair value of investments in excess mortgage servicing rights | [2] | (7,297) | 38,643 | |||
Included in change in fair value of investments in excess mortgage servicing rights, equity method investees | [2] | 16,526 | 31,160 | |||
Included in servicing revenue, net | [3] | 88,325 | ||||
Included in change in fair value of investments in servicer advances | (7,768) | (57,491) | ||||
Included in gain (loss) on settlement of investments, net | (18,117) | 3,061 | ||||
Included in other income (loss), net | [2] | (2,073) | 3,878 | |||
Gains (losses) included in other comprehensive income | [4] | 124,669 | (6,701) | |||
Interest income | 724,197 | 556,513 | ||||
Purchases, sales and repayments | ||||||
Purchases | 18,584,507 | 22,502,710 | ||||
Proceeds from sales | (261,192) | (425,761) | ||||
Proceeds from repayments | (18,537,449) | (16,689,689) | ||||
Other transfers | 116,832 | |||||
Balance, ending | 11,503,879 | 10,809,815 | 4,742,448 | |||
Recurring Basis [Member] | Level 3 [Member] | Servicer Advances [Member] | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Balance, beginning | 7,426,794 | 3,270,839 | ||||
Transfers | ||||||
Transfers from Level 3 | [1] | 0 | 0 | |||
Transfers to Level 3 | [1] | 0 | 0 | |||
Transfers from investments in excess mortgage servicing rights, equity method investees, to investments in excess mortgage servicing rights | [1] | 0 | ||||
Gains (losses) included in net income | ||||||
Included in other-than-temporary impairment (''OTTI'') on securities | [2] | 0 | 0 | |||
Included in change in fair value of investments in excess mortgage servicing rights | [2] | 0 | 0 | |||
Included in change in fair value of investments in excess mortgage servicing rights, equity method investees | [2] | 0 | 0 | |||
Included in servicing revenue, net | [3] | |||||
Included in change in fair value of investments in servicer advances | (7,768) | (57,491) | ||||
Included in gain (loss) on settlement of investments, net | 0 | 0 | ||||
Included in other income (loss), net | [2] | 0 | 0 | |||
Gains (losses) included in other comprehensive income | [4] | 0 | 0 | |||
Interest income | 364,350 | 352,316 | ||||
Purchases, sales and repayments | ||||||
Purchases | 15,266,816 | 20,042,582 | ||||
Proceeds from sales | 0 | 0 | ||||
Proceeds from repayments | (17,343,599) | (16,181,452) | ||||
Other transfers | 0 | |||||
Balance, ending | 5,706,593 | 7,426,794 | 3,270,839 | |||
Recurring Basis [Member] | Level 3 [Member] | Mortgage Servicing Rights [Member] | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Balance, beginning | [5] | 0 | 0 | |||
Transfers | ||||||
Transfers from Level 3 | [1],[5] | 0 | ||||
Transfers to Level 3 | [1],[5] | 0 | ||||
Transfers from investments in excess mortgage servicing rights, equity method investees, to investments in excess mortgage servicing rights | [1],[5] | 0 | ||||
Gains (losses) included in net income | ||||||
Included in other-than-temporary impairment (''OTTI'') on securities | [2],[5] | 0 | 0 | |||
Included in change in fair value of investments in excess mortgage servicing rights | [2],[5] | 0 | 0 | |||
Included in change in fair value of investments in excess mortgage servicing rights, equity method investees | [2],[5] | 0 | 0 | |||
Included in servicing revenue, net | [3],[5] | 88,325 | ||||
Included in change in fair value of investments in servicer advances | [5] | 0 | 0 | |||
Included in gain (loss) on settlement of investments, net | [5] | 0 | 0 | |||
Included in other income (loss), net | [2],[5] | 0 | 0 | |||
Gains (losses) included in other comprehensive income | [4],[5] | 0 | 0 | |||
Interest income | [5] | 0 | 0 | |||
Purchases, sales and repayments | ||||||
Purchases | [5] | 571,158 | 0 | |||
Proceeds from sales | [5] | 0 | 0 | |||
Proceeds from repayments | [5] | 0 | 0 | |||
Other transfers | [5] | 0 | ||||
Balance, ending | [5] | 659,483 | 0 | 0 | ||
Recurring Basis [Member] | Level 3 [Member] | Non-Agency RMBS [Member] | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Balance, beginning | 1,584,283 | 723,000 | ||||
Transfers | ||||||
Transfers from Level 3 | [1] | 0 | 0 | |||
Transfers to Level 3 | [1] | 0 | 0 | |||
Transfers from investments in excess mortgage servicing rights, equity method investees, to investments in excess mortgage servicing rights | [1] | 0 | ||||
Gains (losses) included in net income | ||||||
Included in other-than-temporary impairment (''OTTI'') on securities | [2] | (10,264) | (5,788) | |||
Included in change in fair value of investments in excess mortgage servicing rights | [2] | 0 | 0 | |||
Included in change in fair value of investments in excess mortgage servicing rights, equity method investees | [2] | 0 | 0 | |||
Included in servicing revenue, net | [3] | |||||
Included in change in fair value of investments in servicer advances | 0 | 0 | ||||
Included in gain (loss) on settlement of investments, net | (18,117) | 3,061 | ||||
Included in other income (loss), net | [2] | (4,875) | 879 | |||
Gains (losses) included in other comprehensive income | [4] | 124,669 | (6,701) | |||
Interest income | 209,706 | 69,632 | ||||
Purchases, sales and repayments | ||||||
Purchases | 2,746,409 | 1,288,901 | ||||
Proceeds from sales | (261,192) | (425,761) | ||||
Proceeds from repayments | (827,059) | (179,772) | ||||
Other transfers | 116,832 | |||||
Balance, ending | 3,543,560 | 1,584,283 | 723,000 | |||
Recurring Basis [Member] | Level 3 [Member] | MSRs Agency [Member] | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Balance, beginning | [5] | 437,201 | 217,519 | |||
Transfers | ||||||
Transfers from Level 3 | [1],[5] | 0 | 0 | |||
Transfers to Level 3 | [1],[5] | 0 | 0 | |||
Transfers from investments in excess mortgage servicing rights, equity method investees, to investments in excess mortgage servicing rights | [1],[5] | 0 | ||||
Gains (losses) included in net income | ||||||
Included in other-than-temporary impairment (''OTTI'') on securities | [2],[5] | 0 | 0 | |||
Included in change in fair value of investments in excess mortgage servicing rights | [2],[5] | (5,372) | (3,080) | |||
Included in change in fair value of investments in excess mortgage servicing rights, equity method investees | [2],[5] | 0 | 0 | |||
Included in servicing revenue, net | [3],[5] | |||||
Included in change in fair value of investments in servicer advances | [5] | 0 | 0 | |||
Included in gain (loss) on settlement of investments, net | [5] | 0 | 0 | |||
Included in other income (loss), net | [2],[5] | 2,452 | 2,852 | |||
Gains (losses) included in other comprehensive income | [4],[5] | 0 | 0 | |||
Interest income | [5] | 35,526 | 30,742 | |||
Purchases, sales and repayments | ||||||
Purchases | [5] | 0 | 254,149 | |||
Proceeds from sales | [5] | 0 | 0 | |||
Proceeds from repayments | [5] | (88,050) | (64,981) | |||
Other transfers | [5] | 0 | ||||
Balance, ending | [5] | 381,757 | 437,201 | 217,519 | ||
Recurring Basis [Member] | Level 3 [Member] | MSRs Agency [Member] | Excess MSRs Investees [Member] | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Balance, beginning | [5],[6] | 217,221 | [3] | 330,876 | ||
Transfers | ||||||
Transfers from Level 3 | [1],[5],[6] | 0 | 0 | |||
Transfers to Level 3 | [1],[5],[6] | 0 | 0 | |||
Transfers from investments in excess mortgage servicing rights, equity method investees, to investments in excess mortgage servicing rights | [1],[5],[6] | (98,258) | ||||
Gains (losses) included in net income | ||||||
Included in other-than-temporary impairment (''OTTI'') on securities | [2],[5],[6] | 0 | 0 | |||
Included in change in fair value of investments in excess mortgage servicing rights | [2],[5],[6] | 0 | 0 | |||
Included in change in fair value of investments in excess mortgage servicing rights, equity method investees | [2],[5],[6] | 16,526 | 31,160 | |||
Included in servicing revenue, net | [3],[5],[6] | |||||
Included in change in fair value of investments in servicer advances | [5],[6] | 0 | 0 | |||
Included in gain (loss) on settlement of investments, net | [5],[6] | 0 | 0 | |||
Included in other income (loss), net | [2],[5],[6] | 0 | 0 | |||
Gains (losses) included in other comprehensive income | [4],[5],[6] | 0 | 0 | |||
Interest income | [5],[6] | 0 | 0 | |||
Purchases, sales and repayments | ||||||
Purchases | [5],[6] | 0 | 0 | |||
Proceeds from sales | [5],[6] | 0 | 0 | |||
Proceeds from repayments | [5],[6] | (38,959) | (46,557) | |||
Other transfers | [5],[6] | 0 | ||||
Balance, ending | [5],[6] | 194,788 | 217,221 | [3] | 330,876 | |
Recurring Basis [Member] | Level 3 [Member] | MSRs Non-Agency [Member] | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Balance, beginning | [5] | 1,144,316 | 200,214 | |||
Transfers | ||||||
Transfers from Level 3 | [1],[5] | 0 | 0 | |||
Transfers to Level 3 | [1],[5] | 0 | 0 | |||
Transfers from investments in excess mortgage servicing rights, equity method investees, to investments in excess mortgage servicing rights | [1],[5] | 98,258 | ||||
Gains (losses) included in net income | ||||||
Included in other-than-temporary impairment (''OTTI'') on securities | [2],[5] | 0 | 0 | |||
Included in change in fair value of investments in excess mortgage servicing rights | [2],[5] | (1,925) | 41,723 | |||
Included in change in fair value of investments in excess mortgage servicing rights, equity method investees | [2],[5] | 0 | 0 | |||
Included in servicing revenue, net | [3],[5] | |||||
Included in change in fair value of investments in servicer advances | [5] | 0 | 0 | |||
Included in gain (loss) on settlement of investments, net | [5] | 0 | 0 | |||
Included in other income (loss), net | [2],[5] | 350 | 147 | |||
Gains (losses) included in other comprehensive income | [4],[5] | 0 | 0 | |||
Interest income | [5] | 114,615 | 103,823 | |||
Purchases, sales and repayments | ||||||
Purchases | [5] | 124 | 917,078 | |||
Proceeds from sales | [5] | 0 | 0 | |||
Proceeds from repayments | [5] | (239,782) | (216,927) | |||
Other transfers | [5] | 0 | ||||
Balance, ending | [5] | $ 1,017,698 | $ 1,144,316 | $ 200,214 | ||
[1] | Transfers are assumed to occur at the beginning of the respective period. | |||||
[2] | The gains (losses) recorded in earnings during the period are attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting dates and realized gains (losses) recorded during the period. | |||||
[3] | The components of Servicing revenue, net are disclosed in Note 5. | |||||
[4] | These gains (losses) were included in net unrealized gain (loss) on securities in the Consolidated Statements of Comprehensive Income. | |||||
[5] | Includes the recapture agreement for each respective pool. | |||||
[6] | Amounts represent New Residential’s portion of the Excess MSRs held by the respective joint ventures in which New Residential has a 50% interest. |
FAIR VALUE MEASUREMENT - Summar
FAIR VALUE MEASUREMENT - Summary of Certain Information Regarding Weighted Average Inputs used in Valuing Excess MSRs Owned Directly and through Equity Method Investees (Details) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Excess MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 9.50% | 10.20% | |
Delinquency | [2],[3] | 3.90% | 4.20% | |
Recapture Rate | [2],[4] | 14.20% | 13.60% | |
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.0017 | 0.0017 | |
Collateral Weighted Average Maturity (in years) | [2],[6] | 26 years | ||
MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 12.40% | ||
Delinquency | [2],[3] | 2.80% | ||
Recapture Rate | [2],[4] | 27.50% | ||
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.00260 | ||
Weighted Average [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6] | 23 years | ||
Weighted Average [Member] | Excess MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6] | 25 years | ||
Agency [Member] | Subserviced Pools [Member] | Ditech Financial LLC [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 12.70% | ||
Delinquency | [2],[3] | 3.20% | ||
Recapture Rate | [2],[4] | 29.10% | ||
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.00260 | ||
Agency [Member] | Subserviced Pools [Member] | FirstKey Mortgage, LLC [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2],[7] | 11.20% | ||
Delinquency | [2],[3],[7] | 0.50% | ||
Recapture Rate | [2],[4],[7] | 19.60% | ||
Excess Mortgage Servicing Amount (bps) | [2],[5],[7] | 0.00260 | ||
Agency [Member] | Weighted Average [Member] | Subserviced Pools [Member] | Ditech Financial LLC [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6] | 23 years | ||
Agency [Member] | Weighted Average [Member] | Subserviced Pools [Member] | FirstKey Mortgage, LLC [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6],[7] | 24 years | ||
Directly Held [Member] | Excess MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 9.40% | 10.00% | |
Delinquency | [2],[3] | 3.60% | 3.80% | |
Recapture Rate | [2],[4] | 10.00% | 9.50% | |
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.0016 | 0.0016 | |
Directly Held [Member] | Weighted Average [Member] | Excess MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6] | 26 years | 25 years | |
Directly Held [Member] | Agency [Member] | Original Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 10.10% | 10.70% | |
Delinquency | [2],[3] | 3.20% | 3.50% | |
Recapture Rate | [2],[4] | 32.60% | 29.50% | |
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.0021 | 0.0021 | |
Directly Held [Member] | Agency [Member] | Recaptured Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 7.40% | 7.50% | |
Delinquency | [2],[3] | 4.30% | 4.90% | |
Recapture Rate | [2],[4] | 23.00% | 20.00% | |
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.0021 | 0.0020 | |
Directly Held [Member] | Agency [Member] | Recapture Agreement [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 7.40% | 7.60% | |
Delinquency | [2],[3] | 5.00% | 4.90% | |
Recapture Rate | [2],[4] | 20.00% | 20.00% | |
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.0022 | 0.0022 | |
Directly Held [Member] | Agency [Member] | Excess MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 9.30% | 10.00% | |
Delinquency | [2],[3] | 3.60% | 3.80% | |
Recapture Rate | [2],[4] | 29.50% | 27.40% | |
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.0021 | 0.0021 | |
Directly Held [Member] | Agency [Member] | Weighted Average [Member] | Original Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6] | 24 years | 24 years | |
Directly Held [Member] | Agency [Member] | Weighted Average [Member] | Recaptured Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6] | 25 years | 25 years | |
Directly Held [Member] | Agency [Member] | Weighted Average [Member] | Excess MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6] | 24 years | 24 years | |
Directly Held [Member] | Non-Agency [Member] | Original Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2],[8] | 11.80% | [6] | 12.50% |
Recapture Rate | [2],[4],[8] | 10.70% | [6] | 10.20% |
Excess Mortgage Servicing Amount (bps) | [2],[5],[8] | 0.0014 | 0.0014 | |
Directly Held [Member] | Non-Agency [Member] | Recaptured Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2],[8] | 7.90% | [6] | 7.50% |
Recapture Rate | [2],[4],[8] | 20.00% | [6] | 20.00% |
Excess Mortgage Servicing Amount (bps) | [2],[5],[8] | 0.0021 | 0.0020 | |
Directly Held [Member] | Non-Agency [Member] | Recapture Agreement [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2],[8] | 7.50% | [6] | 7.50% |
Recapture Rate | [2],[4],[8] | 20.00% | [6] | 20.00% |
Excess Mortgage Servicing Amount (bps) | [2],[5],[8] | 0.0020 | 0.0020 | |
Directly Held [Member] | Non-Agency [Member] | Serviced Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2],[8] | 8.80% | [6] | 9.30% |
Recapture Rate | [2],[4],[8] | 0.00% | [6] | 0.00% |
Excess Mortgage Servicing Amount (bps) | [2],[5],[8] | 0.0014 | 0.0014 | |
Directly Held [Member] | Non-Agency [Member] | Excess MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2],[8] | 9.40% | [6] | 10.00% |
Recapture Rate | [2],[4],[8] | 2.70% | [6] | 2.60% |
Excess Mortgage Servicing Amount (bps) | [2],[5],[8] | 0.0014 | 0.0014 | |
Directly Held [Member] | Non-Agency [Member] | Weighted Average [Member] | Original Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6],[8] | 24 years | 24 years | |
Directly Held [Member] | Non-Agency [Member] | Weighted Average [Member] | Recaptured Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6],[8] | 24 years | 25 years | |
Directly Held [Member] | Non-Agency [Member] | Weighted Average [Member] | Serviced Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6],[8] | 26 years | 26 years | |
Directly Held [Member] | Non-Agency [Member] | Weighted Average [Member] | Excess MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6],[8] | 26 years | 26 years | |
Held through Equity Method Investees [Member] | Excess MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 9.80% | 10.80% | |
Delinquency | [2],[3] | 5.00% | 5.60% | |
Recapture Rate | [2],[4] | 29.80% | 29.00% | |
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.0021 | 0.0020 | |
Held through Equity Method Investees [Member] | Weighted Average [Member] | Excess MSRs [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6] | 24 years | 24 years | |
Held through Equity Method Investees [Member] | Agency [Member] | Original Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 11.80% | 12.60% | |
Delinquency | [2],[3] | 5.20% | 5.90% | |
Recapture Rate | [2],[4] | 35.00% | 34.30% | |
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.0019 | 0.0019 | |
Held through Equity Method Investees [Member] | Agency [Member] | Recaptured Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 7.30% | 7.70% | |
Delinquency | [2],[3] | 4.50% | 5.00% | |
Recapture Rate | [2],[4] | 24.70% | 20.00% | |
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.0023 | 0.0023 | |
Held through Equity Method Investees [Member] | Agency [Member] | Recapture Agreement [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Prepayment Speed | [1],[2] | 7.30% | 7.70% | |
Delinquency | [2],[3] | 5.00% | 4.90% | |
Recapture Rate | [2],[4] | 20.00% | 20.00% | |
Excess Mortgage Servicing Amount (bps) | [2],[5] | 0.0023 | 0.0023 | |
Held through Equity Method Investees [Member] | Agency [Member] | Weighted Average [Member] | Original Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6] | 23 years | 24 years | |
Held through Equity Method Investees [Member] | Agency [Member] | Weighted Average [Member] | Recaptured Pools [Member] | ||||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | ||||
Collateral Weighted Average Maturity (in years) | [2],[6] | 25 years | 25 years | |
[1] | Projected annualized weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector. | |||
[2] | Weighted by fair value of the portfolio. | |||
[3] | Projected percentage of residential mortgage loans in the pool for which the borrower will miss its mortgage payments. | |||
[4] | Percentage of voluntarily prepaid loans that are expected to be refinanced by the related servicer or subservicer, as applicable. | |||
[5] | Weighted average total mortgage servicing amount, in excess of the basic fee as applicable, measured in basis points (bps). | |||
[6] | Weighted average maturity of the underlying residential mortgage loans in the pool. | |||
[7] | Recapture rate represents the expected recapture rate with the successor subservicer appointed by NRM. | |||
[8] | For certain pools, the Excess MSR will be paid on the total UPB of the mortgage portfolio (including both performing and delinquent loans until REO). For these pools, no delinquency assumption is used. |
FAIR VALUE MEASUREMENT - Narrat
FAIR VALUE MEASUREMENT - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2016 | |
Schedule of Equity Method Investments | |||
Assets measured at fair value on a nonrecurring basis | $ 449.9 | $ 292.4 | |
Reduction of value of assets due to fair value adjustment | $ 28.7 | ||
Consumer Loan Companies [Member] | |||
Schedule of Equity Method Investments | |||
Debt assumed | $ 1,803.2 | ||
Minimum [Member] | |||
Schedule of Equity Method Investments | |||
Recapture rate, term (in months) | 3 months | ||
Broker price discount | 10.00% | ||
Maximum [Member] | |||
Schedule of Equity Method Investments | |||
Recapture rate, term (in months) | 6 months | ||
Broker price discount | 25.00% | ||
Real Estate Securities [Member] | |||
Schedule of Equity Method Investments | |||
Assets measured at fair value on a nonrecurring basis | $ 406.3 | 253 | |
Real Estate Acquired in Satisfaction of Debt [Member] | |||
Schedule of Equity Method Investments | |||
Assets measured at fair value on a nonrecurring basis | 43.6 | 39.4 | |
Reduction of value of assets due to fair value adjustment | 17.3 | 4.5 | |
Loans Held-for-sale [Member] | |||
Schedule of Equity Method Investments | |||
Reduction of value of assets due to fair value adjustment | $ 11.4 | $ 14.1 | |
Maturity Greater than 30 Days [Member] | |||
Schedule of Equity Method Investments | |||
Days delinquent (in days) | 30 days | ||
MSRs [Member] | |||
Schedule of Equity Method Investments | |||
Discount rate | 12.00% | ||
MSRs [Member] | Excess MSRs Investees [Member] | |||
Schedule of Equity Method Investments | |||
Weighted average discount rate, used to value investments in excess MSRs | 9.80% | 9.80% |
FAIR VALUE MEASUREMENT - Sum121
FAIR VALUE MEASUREMENT - Summary of Certain Information Regarding the Inputs used in Valuing the Servicer Advances (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Weighted Average [Member] | |||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | |||
Collateral Weighted Average Maturity (in years) | [1],[2] | 23 years | |
Servicer Advances [Member] | |||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | |||
Outstanding Servicer Advances to UPB of Underlying Residential Mortgage Loans | 2.10% | 2.30% | |
Prepayment Rate | [3] | 9.80% | 10.40% |
Delinquency | 14.90% | 17.50% | |
Mortgage Servicing Amount (bps) | [4] | 0.00083 | 0.00092 |
Discount Rate | 5.60% | 5.60% | |
Servicer Advances [Member] | Weighted Average [Member] | |||
Fair Value Inputs, Equity, Quantitative Information [Line Items] | |||
Collateral Weighted Average Maturity (in years) | [5] | 24 years 9 months 9 days | 24 years 6 months |
[1] | Weighted average maturity of the underlying residential mortgage loans in the pool. | ||
[2] | Weighted by fair value of the portfolio. | ||
[3] | Projected annual weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector. | ||
[4] | Mortgage servicing amount excludes the amounts New Residential pays its servicers as a monthly servicing fee. | ||
[5] | Weighted average maturity of the underlying residential mortgage loans in the pool. |
FAIR VALUE MEASUREMENT - Sch122
FAIR VALUE MEASUREMENT - Schedule of Securities Valuation Methodology and Results (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)source | Dec. 31, 2015USD ($) | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Outstanding Face Amount | $ 8,788,957 | $ 4,418,552 | |
Amortized Cost Basis | 4,948,327 | 2,498,078 | |
Total Fair Value | $ 5,073,858 | 2,501,881 | |
Number of broker quotation sources | source | 2 | ||
Percentage of instruments with ranges of assumptions used available | 77.07554% | ||
Multiple Quotes [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Total Fair Value | [1] | $ 4,558,392 | 1,947,579 |
Single Quote [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Total Fair Value | [2] | 515,466 | 554,302 |
Single Quote [Member] | Seller [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Total Fair Value | 509,600 | 228,500 | |
Agency RMBS [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Outstanding Face Amount | [3],[4] | 1,486,739 | 884,578 |
Amortized Cost Basis | [3],[4] | 1,532,421 | 918,633 |
Agency RMBS [Member] | Level 2 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Total Fair Value | 1,530,298 | 917,598 | |
Agency RMBS [Member] | Level 2 [Member] | Multiple Quotes [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Total Fair Value | [1] | 1,530,298 | 917,598 |
Agency RMBS [Member] | Level 2 [Member] | Single Quote [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Total Fair Value | [2] | 0 | 0 |
Non-Agency RMBS [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Outstanding Face Amount | [5],[6],[7] | 7,302,218 | 3,533,974 |
Amortized Cost Basis | [5],[6],[7] | 3,415,906 | 1,579,445 |
Fair Value | 2,731,218 | ||
Non-Agency RMBS [Member] | Level 3 [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Total Fair Value | [5] | 3,543,560 | 1,584,283 |
Non-Agency RMBS [Member] | Level 3 [Member] | Multiple Quotes [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Total Fair Value | [1],[5] | 3,028,094 | 1,029,981 |
Non-Agency RMBS [Member] | Level 3 [Member] | Single Quote [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Total Fair Value | [2],[5] | $ 515,466 | $ 554,302 |
Minimum [Member] | Non-Agency RMBS [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Discount Rate | 2.06% | ||
Prepayment Rate | [8] | 0.25% | |
CDR | [9] | 0.25% | |
Loss Severity | [10] | 5.00% | |
Maximum [Member] | Non-Agency RMBS [Member] | |||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||
Discount Rate | 32.75% | ||
Prepayment Rate | [8] | 20.00% | |
CDR | [9] | 10.00% | |
Loss Severity | [10] | 100.00% | |
[1] | New Residential generally obtained pricing service quotations or broker quotations from two sources, one of which was generally the seller (the party that sold New Residential the security) for Non-Agency RMBS. New Residential evaluates quotes received and determines one as being most representative of fair value, and does not use an average of the quotes. Even if New Residential receives two or more quotes on a particular security that come from non-selling brokers or pricing services, it does not use an average because it believes using an actual quote more closely represents a transactable price for the security than an average level. Furthermore, in some cases there is a wide disparity between the quotes New Residential receives. New Residential believes using an average of the quotes in these cases would not represent the fair value of the asset. Based on New Residential’s own fair value analysis, it selects one of the quotes which is believed to more accurately reflect fair value. New Residential has not adjusted any of the quotes received in the periods presented. These quotations are generally received via email and contain disclaimers which state that they are “indicative” and not “actionable” — meaning that the party giving the quotation is not bound to actually purchase the security at the quoted price. New Residential’s investments in Agency RMBS are classified within Level 2 of the fair value hierarchy because the market for these securities is very active and market prices are readily observable.The third-party pricing services and brokers engaged by New Residential (collectively, “valuation providers”) use either the income approach or the market approach, or a combination of the two, in arriving at their estimated valuations of RMBS. Valuation providers using the market approach generally look at prices and other relevant information generated by market transactions involving identical or comparable assets. Valuation providers using the income approach create pricing models that generally incorporate such assumptions as discount rates, expected prepayment rates, expected default rates and expected loss severities. New Residential has reviewed the methodologies utilized by its valuation providers and has found them to be consistent with GAAP requirements. In addition to obtaining multiple quotations, when available, and reviewing the valuation methodologies of its valuation providers, New Residential creates its own internal pricing models for Level 3 securities and uses the outputs of these models as part of its process of evaluating the fair value estimates it receives from its valuation providers. These models incorporate the same types of assumptions as the models used by the valuation providers, but the assumptions are developed independently. These assumptions are regularly refined and updated at least quarterly by New Residential, and reviewed by its valuation group, which is separate from its investment acquisition and management group, to reflect market developments and actual performance.For 77.1% of New Residential’s Non-Agency RMBS, the ranges of assumptions used by New Residential’s valuation providers are summarized in the table below. The assumptions used by New Residential’s valuation providers with respect to the remainder of New Residential’s Non-Agency RMBS were not readily available. Fair Value Discount Rate Prepayment Rate(a) CDR(b) Loss Severity(c)Non-Agency RMBS $2,731,218 2.06% to 32.75% 0.25% to 20% 0.25% to 10.0% 5.0% to 100%(a)Represents the annualized rate of the prepayments as a percentage of the total principal balance of the pool.(b)Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance of the pool.(c)Represents the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding balance. | ||
[2] | New Residential was unable to obtain quotations from more than one source on these securities. For approximately $509.6 million in 2016 and $228.5 million in 2015, the one source was the party that sold New Residential the security. | ||
[3] | Includes securities issued or guaranteed by U.S. Government agencies such as Fannie Mae or Freddie Mac. | ||
[4] | The total outstanding face amount was $1.3 billion and $0.7 billion for fixed rate securities and $0.2 billion and $0.2 billion for floating rate securities as of December 31, 2016 and 2015, respectively. | ||
[5] | Includes New Residential’s investments in interest-only notes for which the fair value option for financial instruments was elected. | ||
[6] | Includes other ABS consisting primarily of (i) interest-only securities and servicing strips (fair value option securities) which New Residential elected to carry at fair value and record changes to valuation through the income statement and (ii) bonds backed by Servicer Advances. Gross Unrealized Weighted AverageAsset Type Outstanding Face Amount Amortized Cost Basis Gains Losses Carrying Value Number of Securities Rating Coupon Yield Life (Years) Principal SubordinationDecember 31, 2016 Servicer Advance Bonds $100,000 $99,838 $310 $— $100,148 1 AAA 3.21% 3.10% 0.7 N/AFair Value Option Securities Interest-only Securities 2,062,647 113,342 5,270 (6,555) 112,057 28 AA+ 1.85% 5.30% 2.9 N/AServicing Strips 456,629 5,613 311 (1) 5,923 11 NA 0.27% 21.74% 6.2 N/ADecember 31, 2015 Servicer Advance Bonds $431,000 $430,951 $— $(661) $430,290 5 AA+ 2.69% 2.70% 1.1 N/AFair Value Option Securities Interest-only Securities 1,522,256 82,101 5,227 (4,348) 82,980 12 AA+ 1.84% 7.11% 4.0 N/A | ||
[7] | The total outstanding face amount was $1.2 billion (including $0.8 billion of residual and fair value option notional amount) and $2.3 billion (including $1.7 billion of residual and fair value option notional amount) for fixed rate securities and $6.1 billion (including $2.1 billion of residual and fair value option notional amount) and $1.3 billion (including $164.4 million of residual and fair value option notional amount) for floating rate securities as of December 31, 2016 and 2015, respectively. | ||
[8] | Represents the annualized rate of the prepayments as a percentage of the total principal balance of the pool. | ||
[9] | Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance of the pool. | ||
[10] | Represents the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding balance. |
FAIR VALUE MEASUREMENT - Sch123
FAIR VALUE MEASUREMENT - Schedule of Inputs Used in Valuing Residential Mortgage Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Mortgage Loans on Real Estate [Line Items] | |||
Weighted Average Life (Years) | 1 year 10 months 3 days | ||
Performing Loans [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Weighted Average Life (Years) | [1],[2] | 6 years 8 months | |
Nonrecurring [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Discount Rate | 4.90% | 5.60% | |
Weighted Average Life (Years) | [3] | 4 years 1 month 5 days | 3 years 7 months 7 days |
Prepayment Rate | 6.10% | 4.20% | |
Loss Severity | [4] | 27.90% | 22.70% |
Nonrecurring [Member] | Performing Loans [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Discount Rate | 3.80% | 5.00% | |
Weighted Average Life (Years) | [3] | 5 years 11 months 19 days | 4 years 2 months 18 days |
Prepayment Rate | 11.70% | 9.20% | |
CDR | [5] | 1.20% | 2.80% |
Loss Severity | [4] | 24.40% | 35.20% |
Nonrecurring [Member] | Non-Performing Loans [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Discount Rate | 5.60% | 5.70% | |
Weighted Average Life (Years) | [3] | 2 years 11 months 25 days | 3 years 5 months 12 days |
Prepayment Rate | 2.80% | 2.90% | |
Loss Severity | [4] | 30.00% | 19.60% |
Nonrecurring [Member] | Fair Value [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Fair Value | $ 406,284 | $ 253,013 | |
Nonrecurring [Member] | Fair Value [Member] | Performing Loans [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Fair Value | 151,436 | 50,858 | |
Nonrecurring [Member] | Fair Value [Member] | Non-Performing Loans [Member] | |||
Mortgage Loans on Real Estate [Line Items] | |||
Fair Value | $ 254,848 | $ 202,155 | |
[1] | Performing loans are generally placed on nonaccrual status when principal or interest is 120 days or more past due. | ||
[2] | The weighted average life is based on the expected timing of the receipt of cash flows. | ||
[3] | The weighted average life is based on the expected timing of the receipt of cash flows. | ||
[4] | Loss severity is the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding loan balance. | ||
[5] | Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance. |
FAIR VALUE MEASUREMENT - Sch124
FAIR VALUE MEASUREMENT - Schedule of Loans for Which Fair Value is Only Disclosed (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
Feb. 28, 2013 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Valuation provision (reversal) on loans | $ 35,871 | [1] | $ 18,275 | $ 16,825 | $ 6,745 | $ 16,188 | $ (3,341) | $ 4,772 | $ 977 | $ 77,716 | $ 18,596 | $ 9,891 | ||
Weighted Average Life (Years) | 1 year 10 months 3 days | |||||||||||||
Residential Mortgage [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Valuation provision (reversal) on loans | $ 77 | $ 78 | ||||||||||||
Discount Rate | 7.60% | 5.30% | ||||||||||||
Weighted Average Life (Years) | [2] | 2 years 11 months 4 days | 3 years 3 months 19 days | |||||||||||
Loss Severity | [3] | 30.50% | 13.30% | |||||||||||
Residential Mortgage [Member] | Reported Value Measurement [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Carrying Value | 481,142 | 853,846 | $ 481,142 | $ 853,846 | ||||||||||
Residential Mortgage [Member] | Fair Value [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Fair Value | 502,046 | 862,172 | $ 502,046 | $ 862,172 | ||||||||||
Reverse Mortgage Loans [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Weighted Average Life (Years) | [4],[5],[6] | 4 years 2 months 14 days | ||||||||||||
Interest in reverse mortgage loans | 70.00% | 70.00% | ||||||||||||
Reverse Mortgage Loans [Member] | Residential Mortgage [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Valuation provision (reversal) on loans | [7] | $ 73 | $ 35 | |||||||||||
Discount Rate | [7] | 7.00% | 10.00% | |||||||||||
Weighted Average Life (Years) | [2],[7] | 4 years 6 months 16 days | 4 years 2 months 14 days | |||||||||||
Loss Severity | [3],[7] | 9.50% | 8.10% | |||||||||||
Reverse Mortgage Loans [Member] | Residential Mortgage [Member] | Reported Value Measurement [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Carrying Value | [7] | 11,468 | 19,560 | $ 11,468 | $ 19,560 | |||||||||
Reverse Mortgage Loans [Member] | Residential Mortgage [Member] | Fair Value [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Fair Value | [7] | 12,952 | 19,560 | 12,952 | $ 19,560 | |||||||||
Performing Loans [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Weighted Average Life (Years) | [6],[8] | 6 years 8 months | ||||||||||||
Performing Loans [Member] | Residential Mortgage [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Valuation provision (reversal) on loans | $ 4 | $ 43 | ||||||||||||
Discount Rate | 7.40% | 4.80% | ||||||||||||
Weighted Average Life (Years) | [2] | 5 years 7 months 3 days | 5 years 2 months 5 days | |||||||||||
Prepayment Rate | 6.20% | 6.60% | ||||||||||||
CDR | [9] | 2.10% | 1.20% | |||||||||||
Loss Severity | [3] | 50.30% | 14.30% | |||||||||||
Performing Loans [Member] | Residential Mortgage [Member] | Reported Value Measurement [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Carrying Value | 23,758 | 246,190 | $ 23,758 | $ 246,190 | ||||||||||
Performing Loans [Member] | Residential Mortgage [Member] | Fair Value [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Fair Value | 24,420 | 248,858 | $ 24,420 | $ 248,858 | ||||||||||
Non-Performing Loans [Member] | Residential Mortgage [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Discount Rate | 7.60% | 5.40% | ||||||||||||
Weighted Average Life (Years) | [2] | 2 years 8 months 29 days | 2 years 5 months 25 days | |||||||||||
Prepayment Rate | 2.00% | 1.40% | ||||||||||||
Loss Severity | [3] | 30.00% | 13.10% | |||||||||||
Non-Performing Loans [Member] | Residential Mortgage [Member] | Reported Value Measurement [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Carrying Value | 445,916 | 588,096 | $ 445,916 | $ 588,096 | ||||||||||
Non-Performing Loans [Member] | Residential Mortgage [Member] | Fair Value [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Fair Value | 464,674 | $ 593,754 | 464,674 | $ 593,754 | ||||||||||
Consumer Loans [Member] | Consumer Loan [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Valuation provision (reversal) on loans | $ 6,451 | |||||||||||||
Discount Rate | 9.30% | |||||||||||||
Weighted Average Life (Years) | [2] | 3 years 10 months 6 days | ||||||||||||
Prepayment Rate | 15.40% | |||||||||||||
CDR | [9] | 5.70% | ||||||||||||
Loss Severity | [3] | 87.60% | ||||||||||||
Consumer Loans [Member] | Consumer Loan [Member] | Reported Value Measurement [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Carrying Value | 1,799,486 | $ 1,799,486 | ||||||||||||
Consumer Loans [Member] | Consumer Loan [Member] | Fair Value [Member] | ||||||||||||||
Mortgage Loans on Real Estate [Line Items] | ||||||||||||||
Fair Value | $ 1,819,106 | $ 1,819,106 | ||||||||||||
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. | |||||||||||||
[2] | The weighted average life is based on the expected timing of the receipt of cash flows. | |||||||||||||
[3] | Loss severity is the expected amount of future realized losses resulting from the ultimate liquidation of a particular loan, expressed as the net amount of loss relative to the outstanding loan balance. | |||||||||||||
[4] | FICO scores are not used in determining how much a borrower can access via a reverse mortgage loan. | |||||||||||||
[5] | Represents a 70% participation interest that New Residential holds in a portfolio of reverse mortgage loans. The average loan balance outstanding based on total UPB was $0.5 million and $0.4 million at December 31, 2016 and 2015, respectively. Approximately 60.9% and 71.0% of these loans have reached a termination event at December 31, 2016 and 2015, respectively. As a result of the termination event, each such loan has matured and the borrower can no longer make draws on these loans. | |||||||||||||
[6] | The weighted average life is based on the expected timing of the receipt of cash flows. | |||||||||||||
[7] | Carrying value and fair value represent a 70% participation interest New Residential holds in the portfolio of reverse mortgage loans. | |||||||||||||
[8] | Performing loans are generally placed on nonaccrual status when principal or interest is 120 days or more past due. | |||||||||||||
[9] | Represents the annualized rate of the involuntary prepayments (defaults) as a percentage of the total principal balance. |
EQUITY AND EARNINGS PER SHARE -
EQUITY AND EARNINGS PER SHARE - Narrative (Details) $ / shares in Units, $ in Thousands | Jan. 01, 2017shares | Jan. 01, 2016shares | Jan. 01, 2015shares | Oct. 17, 2014shares | Jan. 01, 2014shares | May 15, 2013shares | Feb. 21, 2017USD ($)$ / sharesshares | Aug. 31, 2016USD ($)$ / sharesshares | Jul. 31, 2015$ / sharesshares | Jun. 30, 2015USD ($)employee$ / sharesshares | Apr. 30, 2015USD ($)employee$ / sharesshares | Dec. 31, 2014$ / sharesshares | Aug. 31, 2014$ / sharesshares | May 31, 2014$ / sharesshares | Apr. 30, 2014USD ($)employee$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)shares | May 06, 2013shares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 | ||||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||||||||||||
Preferred stock, shares authorized (in shares) | 100,000,000 | |||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||||||||||||
Common stock, shares outstanding (in shares) | 141,400,000 | 250,773,117 | 230,471,202 | 126,512,823 | ||||||||||||||||
Reverse stock split | 0.5 | |||||||||||||||||||
Common stock outstanding, prior to stock split (in shares) | 282,800,000 | |||||||||||||||||||
Proceeds from issuance of common stock | $ | $ 278,800 | $ 442,600 | $ 436,100 | $ 163,800 | $ 279,600 | $ 882,166 | $ 173,507 | |||||||||||||
Risk-free interest rate | 1.45% | 2.61% | 2.02% | 2.87% | ||||||||||||||||
Dividend yield | 11.80% | 7.81% | 6.71% | 12.584% | ||||||||||||||||
Volatility | 27.57% | 23.73% | 24.04% | 25.66% | ||||||||||||||||
Term (in years) | 10 years | 10 years | 10 years | 10 years | ||||||||||||||||
Option exercise (in shares) | [1] | 1,100,497 | 6,734,525 | |||||||||||||||||
Reserved shares of common stock for issuance (in shares) | 15,000,000 | |||||||||||||||||||
Stock option plan term (in years) | 10 years | |||||||||||||||||||
Yearly increase in number of shares available for options | 10.00% | |||||||||||||||||||
Number of additional shares authorized (in shares) | 8,543,539 | 1,437,500 | 0 | |||||||||||||||||
Threshold percentage for options that may be issued to the Manager | 10.00% | |||||||||||||||||||
Stock options outstanding (in shares) | 13,196,610 | |||||||||||||||||||
Number of days to determine average closing price (in days) | 5 days | |||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 15.72 | |||||||||||||||||||
Dilutive common stock equivalents (in shares) | 364,107 | 2,167,796 | 3,092,844 | |||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Proceeds from issuance of common stock | $ | $ 834,600 | |||||||||||||||||||
Risk-free interest rate | 2.38% | |||||||||||||||||||
Dividend yield | 10.82% | |||||||||||||||||||
Volatility | 28.64% | |||||||||||||||||||
Term (in years) | 10 years | |||||||||||||||||||
Number of additional shares authorized (in shares) | 2,000,000 | |||||||||||||||||||
Executive Officer [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Number of employees | employee | 1 | 1 | 1 | |||||||||||||||||
Employee of Manager [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Option exercise (in shares) | 1,100,497 | 107,500 | ||||||||||||||||||
Exercise price of options exercised (in dollars per share) | $ / shares | $ 10.59 | $ 5.61 | ||||||||||||||||||
Employees of Manager and New Residential Director [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Option exercise (in shares) | 498,500 | |||||||||||||||||||
Exercise price of options exercised (in dollars per share) | $ / shares | $ 5.62 | |||||||||||||||||||
Former Employee of Manager [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Option exercise (in shares) | 37,500 | 42,566 | ||||||||||||||||||
Exercise price of options exercised (in dollars per share) | $ / shares | $ 7.19 | $ 7.19 | ||||||||||||||||||
Fortress [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Common stock, shares outstanding (in shares) | 2,400,000 | |||||||||||||||||||
Director [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Stock options outstanding (in shares) | 6,000 | 4,000 | ||||||||||||||||||
Director [Member] | Equity Option [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Stock options outstanding (in shares) | 6,000 | |||||||||||||||||||
Other Affiliates [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Stock options outstanding (in shares) | 10,700,000 | 13,196,610 | 12,380,107 | |||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Issuance of common stock (in shares) | 20,000,000 | 27,900,000 | 29,213,020 | 13,875,000 | ||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 14.20 | $ 15.88 | $ 15.25 | $ 12.20 | ||||||||||||||||
Options granted to Manager (in shares) | 2,000,000 | 2,800,000 | 5,750,000 | 1,437,500 | ||||||||||||||||
Fair value of options granted to Manager | $ | $ 2,300 | $ 3,700 | $ 8,900 | $ 1,400 | ||||||||||||||||
Option exercise (in shares) | 6,700,000 | |||||||||||||||||||
Aggregate shares in cashless exercise (in shares) | 3,600,000 | |||||||||||||||||||
Issuance of common stock (in shares) | 280,111 | |||||||||||||||||||
Common Stock [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Issuance of common stock (in shares) | 56,500,000 | |||||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 15 | |||||||||||||||||||
Options granted to Manager (in shares) | 5,700,000 | |||||||||||||||||||
Fair value of options granted to Manager | $ | $ 8,100 | |||||||||||||||||||
Common Stock [Member] | Executive Officer [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Issuance of common stock (in shares) | 9,100 | 250,000 | 500,000 | |||||||||||||||||
Proceeds from issuance of common stock | $ | $ 6,100 | |||||||||||||||||||
Common Stock [Member] | Executive Officer [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Issuance of common stock (in shares) | 18,600 | |||||||||||||||||||
Common Stock [Member] | Employee of Manager [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Issuance of common stock (in shares) | 107,500 | |||||||||||||||||||
Common Stock [Member] | Employees of Manager and New Residential Director [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Issuance of common stock (in shares) | 276,037 | |||||||||||||||||||
Common Stock [Member] | Former Employee of Manager [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Issuance of common stock (in shares) | 20,227 | 42,566 | ||||||||||||||||||
Newcastle [Member] | ||||||||||||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||||||||||||||||||
Spin-off distribution ratio (in shares) | 1 | |||||||||||||||||||
[1] | The 1.1 million and 6.7 million options that were exercised in 2016 and 2015 had an intrinsic value of approximately $4.0 million and $59.4 million, respectively, at the date of exercise. |
EQUITY AND EARNINGS PER SHAR126
EQUITY AND EARNINGS PER SHARE - Summary of Common Dividends Declared (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 16, 2016 | Sep. 23, 2016 | Jun. 27, 2016 | Mar. 22, 2016 | Dec. 10, 2015 | Sep. 18, 2015 | May 14, 2015 | Mar. 16, 2015 | Dec. 18, 2014 | Sep. 18, 2014 | Jun. 17, 2014 | Mar. 19, 2014 | Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Dividends Payable [Line Items] | ||||||||||||||||||||||||
Dividend declared per share of common stock (in dollars per share) | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.38 | $ 0.38 | $ 0.35 | $ 0.5 | $ 0.35 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.38 | $ 1.84 | $ 1.75 | $ 1.58 | |
Total Amounts Distributed | $ 115,400 | $ 115,400 | $ 106,000 | $ 106,000 | $ 106,000 | $ 106,000 | $ 89,500 | $ 53,700 | $ 53,700 | $ 49,500 | $ 70,600 | $ 44,300 | $ 442,753 | $ 355,295 | $ 218,094 | |||||||||
Quarterly Dividend [Member] | ||||||||||||||||||||||||
Dividends Payable [Line Items] | ||||||||||||||||||||||||
Dividend declared per share of common stock (in dollars per share) | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.38 | $ 0.38 | $ 0.35 | $ 0.35 | $ 0.35 | ||||||||||||
Special Dividend [Member] | ||||||||||||||||||||||||
Dividends Payable [Line Items] | ||||||||||||||||||||||||
Dividend declared per share of common stock (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0.15 | $ 0 | ||||||||||||
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. |
EQUITY AND EARNINGS PER SHAR127
EQUITY AND EARNINGS PER SHARE - Summary of Outstanding Options (Details) - shares | Dec. 31, 2016 | Dec. 31, 2015 | May 15, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 13,196,610 | ||
Manager [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 11,204,242 | 10,928,580 | |
Manager's Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 1,986,368 | 1,447,527 | |
Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 6,000 | 4,000 | |
Total Affiliates [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 13,196,610 | 12,380,107 | 10,700,000 |
Issued Prior to 2011 [Member] | Manager [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 330,090 | 345,720 | |
Issued Prior to 2011 [Member] | Manager's Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 18,910 | 88,280 | |
Issued Prior to 2011 [Member] | Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 0 | 0 | |
Issued Prior to 2011 [Member] | Total Affiliates [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 349,000 | 434,000 | |
Issued in 2011 - 2016 [Member] | Manager [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 10,874,152 | ||
Issued in 2011 - 2016 [Member] | Manager's Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 1,967,458 | ||
Issued in 2011 - 2016 [Member] | Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 6,000 | ||
Issued in 2011 - 2016 [Member] | Total Affiliates [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 12,847,610 | ||
Issued in 2011 - 2015 [Member] | Manager [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 10,582,860 | ||
Issued in 2011 - 2015 [Member] | Manager's Employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 1,359,247 | ||
Issued in 2011 - 2015 [Member] | Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 4,000 | ||
Issued in 2011 - 2015 [Member] | Total Affiliates [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 11,946,107 |
EQUITY AND EARNINGS PER SHAR128
EQUITY AND EARNINGS PER SHARE - Summary of Outstanding Options by Recipient (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 13,196,610 | ||
Options exercisable (in shares) | 8,429,195 | ||
Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options outstanding (in shares) | 6,000 | 4,000 | |
Stock Options [Member] | Director [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Recipient | Directors | ||
Date of grant | [1] | Various | |
Stock options outstanding (in shares) | 6,000 | ||
Options exercisable (in shares) | 6,000 | ||
Weighted average exercise price (in dollars per share) | [2] | $ 13.99 | |
Intrinsic value of exercisable options | $ 0 | ||
Stock Options [Member] | Manager [Member] | 2003 - 2007 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Recipient | [3] | Manager | |
Date of grant | [1],[3] | 2,007 | |
Stock options outstanding (in shares) | [3] | 349,000 | |
Options exercisable (in shares) | [3] | 349,000 | |
Weighted average exercise price (in dollars per share) | [2],[3] | $ 31.27 | |
Intrinsic value of exercisable options | [3] | $ 0 | |
Stock Options [Member] | Manager [Member] | 2011 - 2012 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Recipient | [3] | Manager | |
Date of grant | [1],[3] | 2,012 | |
Stock options outstanding (in shares) | [3] | 25,000 | |
Options exercisable (in shares) | [3] | 25,000 | |
Weighted average exercise price (in dollars per share) | [2],[3] | $ 7.19 | |
Intrinsic value of exercisable options | [3] | $ 0.2 | |
Stock Options [Member] | Manager [Member] | 2013 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Recipient | [3] | Manager | |
Date of grant | [1],[3] | 2,013 | |
Stock options outstanding (in shares) | [3] | 835,571 | |
Options exercisable (in shares) | [3] | 835,571 | |
Weighted average exercise price (in dollars per share) | [2],[3] | $ 11.48 | |
Intrinsic value of exercisable options | [3] | $ 3.5 | |
Stock Options [Member] | Manager [Member] | 2014 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Recipient | [3] | Manager | |
Date of grant | [1],[3] | 2,014 | |
Stock options outstanding (in shares) | [3] | 1,437,500 | |
Options exercisable (in shares) | [3] | 1,437,500 | |
Weighted average exercise price (in dollars per share) | [2],[3] | $ 12.20 | |
Intrinsic value of exercisable options | [3] | $ 5.1 | |
Stock Options [Member] | Manager [Member] | 2015 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Recipient | [3] | Manager | |
Date of grant | [1],[3] | 2,015 | |
Stock options outstanding (in shares) | [3] | 8,543,539 | |
Options exercisable (in shares) | [3] | 5,509,457 | |
Weighted average exercise price (in dollars per share) | [2],[3] | $ 15.44 | |
Intrinsic value of exercisable options | [3] | $ 1.5 | |
Stock Options [Member] | Manager [Member] | 2016 [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Recipient | [3] | Manager | |
Date of grant | [1],[3] | 2,016 | |
Stock options outstanding (in shares) | [3] | 2,000,000 | |
Options exercisable (in shares) | [3] | 266,667 | |
Weighted average exercise price (in dollars per share) | [2],[3] | $ 14.20 | |
Intrinsic value of exercisable options | [3] | $ 0.4 | |
[1] | Options expire on the tenth anniversary from date of grant. | ||
[2] | The exercise prices are subject to adjustment in connection with return of capital dividends. | ||
[3] | The Manager assigned certain of its options to Fortress’s employees as follows:Date of Grant Range of Exercise Prices Total UnexercisedInception to Date2007 $29.92 to $33.80 18,9102014 $12.20 258,7502015 $15.25 to $15.88 1,708,7082016 $14.20 —Total 1,986,368 |
EQUITY AND EARNINGS PER SHAR129
EQUITY AND EARNINGS PER SHARE - Schedule of Options Assigned (Details) | Dec. 31, 2016$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options outstanding (in shares) | shares | 13,196,610 |
2006 - 2007 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options outstanding (in shares) | shares | 18,910 |
2006 - 2007 [Member] | Lower Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price (in dollars per share) | $ / shares | $ 29.92 |
2006 - 2007 [Member] | Upper Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price (in dollars per share) | $ / shares | 33.80 |
2014 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price (in dollars per share) | $ / shares | $ 12.20 |
Stock options outstanding (in shares) | shares | 258,750 |
2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options outstanding (in shares) | shares | 1,708,708 |
2015 [Member] | Lower Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price (in dollars per share) | $ / shares | $ 15.25 |
2015 [Member] | Upper Range [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price (in dollars per share) | $ / shares | 15.88 |
2016 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted average exercise price (in dollars per share) | $ / shares | $ 14.20 |
Stock options outstanding (in shares) | shares | 0 |
Options Assigned [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options outstanding (in shares) | shares | 1,986,368 |
EQUITY AND EARNINGS PER SHAR130
EQUITY AND EARNINGS PER SHARE - Summary of Activity in Outstanding Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Beginning balance, Outstanding options (in shares) | 12,380,107 | 10,737,093 | |
Options granted (in shares) | 2,002,000 | 8,543,539 | |
Options exercised (in shares) | [1] | (1,100,497) | (6,734,525) |
Options expired unexercised (in shares) | (85,000) | (166,000) | |
Ending balance, Outstanding options (in shares) | 13,196,610 | 12,380,107 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Weighted average exercise price, options granted (in dollars per share) | $ 14.20 | $ 15.46 | |
Weighted average exercise price, options exercised (in dollars per share) | [1] | $ 10.59 | $ 7.81 |
Intrinsic value of options exercised | $ 4 | $ 59.4 | |
[1] | The 1.1 million and 6.7 million options that were exercised in 2016 and 2015 had an intrinsic value of approximately $4.0 million and $59.4 million, respectively, at the date of exercise. |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | Jan. 08, 2016lawsuit | Oct. 02, 2015USD ($) | Jan. 29, 2015lawsuit | Mar. 20, 2015lawsuit |
Putative Class Action Lawsuits [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of claims | 3 | |||
Shareholder Derivative Actions [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of claims | 3 | 1 | ||
HSART Bondholders [Member] | ||||
Loss Contingencies [Line Items] | ||||
Amount released from restricted cash to unrestricted use | $ | $ 92.7 |
TRANSACTIONS WITH AFFILIATES132
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | May 15, 2013 | |
Related Party Transaction [Line Items] | |||||
Management agreement, renewal term (in years) | 1 year | ||||
Majority vote, percent | 66.67% | ||||
Decrease in incentive compensation | $ 5.5 | ||||
Payments or accruals for MSR Fund Payments | $ 0.5 | $ 4.4 | |||
Amount transferred to funds | $ 0.1 | ||||
Nationstar [Member] | UPB - Excess MSRs [Member] | Customer Concentration Risk [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of UPB of loans underlying investments | 63.60% | ||||
Nationstar [Member] | UPB - Servicer Advances [Member] | Customer Concentration Risk [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of UPB of loans underlying investments | 33.60% | ||||
FIG LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Management fee rate | 1.50% | ||||
Incentive compensation percentage | 25.00% | ||||
Interest rate for incentive compensation | 10.00% | ||||
Increase in incentive compensation to affiliate | $ 3.3 | ||||
Nationstar [Member] | |||||
Related Party Transaction [Line Items] | |||||
Unpaid principal balance fee | 0.75% | ||||
Nationstar [Member] | Residential Mortgage Loans [Member] | |||||
Related Party Transaction [Line Items] | |||||
Unpaid Principal Balance | $ 591.1 | ||||
Nationstar [Member] | Real Estate Owned [Member] | |||||
Related Party Transaction [Line Items] | |||||
Unpaid balance of real estate owned | 20.8 | ||||
Nationstar [Member] | Non-Agency RMBS [Member] | |||||
Related Party Transaction [Line Items] | |||||
Face amount | 4,300 | ||||
Unpaid Principal Balance | 14,800 | ||||
Nationstar [Member] | Agency RMBS [Member] | |||||
Related Party Transaction [Line Items] | |||||
Face amount | $ 32.6 |
TRANSACTIONS WITH AFFILIATES133
TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES - Schedule of Affiliate Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||
Due to Related Parties [Abstract] | ||||
Total | $ 47,348 | $ 23,785 | ||
Management fees | 41,610 | 33,475 | $ 19,651 | |
Incentive compensation | 42,197 | 16,017 | 54,334 | |
FIG LLC [Member] | ||||
Due to Related Parties [Abstract] | ||||
Management fees | 3,689 | 6,671 | ||
Incentive compensation | 42,197 | 16,017 | ||
Expense reimbursements and other | 1,462 | 1,097 | ||
Total | 47,348 | 23,785 | ||
Management fees | 41,610 | 33,475 | 19,651 | |
Incentive compensation | 42,197 | 16,017 | 54,334 | |
Expense reimbursements | [1] | 500 | 500 | 500 |
Total | $ 84,307 | $ 49,992 | $ 74,485 | |
[1] | Included in General and Administrative Expenses in the Consolidated Statements of Income. |
RECLASSIFICATION FROM ACCUMU134
RECLASSIFICATION FROM ACCUMULATED OTHER COMPREHENSIVE INCOME INTO NET INCOME - Summary of Amounts Reclassified out of Accumulated Other Comprehensive Income into Net Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Other-than-temporary impairment (OTTI) on securities | $ 2,426 | $ 1,765 | $ 2,819 | $ 3,254 | $ 2,494 | $ 1,574 | $ 649 | $ 1,071 | $ 10,264 | $ 5,788 | $ 1,391 | |
Total reclassifications | 37,724 | (7,308) | (64,310) | |||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest [Member] | ||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||
Gain on settlement of investments, net | 27,460 | (13,096) | (65,701) | |||||||||
Other-than-temporary impairment (OTTI) on securities | $ 10,264 | $ 5,788 | $ 1,391 | |||||||||
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | ||||||||||||
Federal | $ 3,813 | $ (2,737) | $ 3,737 | |||||||||
State and Local | 252 | (1,631) | 2,799 | |||||||||
Total Current Income Tax Expense (Benefit) | 4,065 | (4,368) | 6,536 | |||||||||
Deferred: | ||||||||||||
Federal | 33,999 | (2,778) | 12,853 | |||||||||
State and Local | 847 | (3,855) | 3,568 | |||||||||
Total Deferred Income Tax Expense (Benefit) | 34,846 | (6,633) | 16,421 | |||||||||
Total Income Tax Expense (Benefit) | $ 20,716 | $ 20,900 | $ 7,518 | $ (10,223) | $ (15,948) | $ (5,932) | $ 14,306 | $ (3,427) | $ 38,911 | $ (11,001) | $ 22,957 | |
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||||
REIT taxable income distribution | 100.00% | 100.00% | 100.00% | ||
Unrecognized tax benefits, period decrease | $ 0 | $ 2,258,000 | $ 2,300,000 | ||
Reserve for unrecognized tax benefits | 0 | $ 0 | 2,258,000 | $ 0 | |
Benefit to income tax provision | $ (2,300,000) | ||||
Decrease resulting from current period tax positions | $ 2,300,000 | ||||
U.S. federal statutory rate | 35.00% | 35.00% | 35.00% |
INCOME TAXES - Schedule of Repo
INCOME TAXES - Schedule of Reported Provision for Income Taxes and the U.S. Federal Statutory Rate (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Provision at the statutory rate | 35.00% | 35.00% | 35.00% |
Non-taxable REIT income | (28.22%) | (36.51%) | (31.12%) |
State and local taxes | 0.18% | (1.16%) | 0.69% |
Other | 0.19% | (1.58%) | 0.37% |
Total provision | 7.15% | (4.25%) | 4.94% |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Apr. 06, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Deferred tax assets: | |||||
Servicer Advances basis difference | [1] | $ 113,354,000 | $ 144,842,000 | ||
Net operating losses | [2] | 44,289,000 | 42,944,000 | ||
Deferred deductibility of interest expense | 16,543,000 | 0 | |||
Other | 5,684,000 | 6,934,000 | |||
Total deferred tax assets | 179,870,000 | 194,720,000 | |||
Less valuation allowance | (10,054,000) | (9,409,000) | $ (3,619,000) | ||
Net deferred tax assets | 169,816,000 | 185,311,000 | |||
Deferred tax liabilities: | |||||
Unrealized gains on servicer advances | (18,532,000) | 0 | |||
Total deferred tax liability | (18,532,000) | 0 | |||
Net deferred tax assets | 151,284,000 | $ 185,311,000 | |||
Taxable REIT Subsidiaries [Member] | |||||
Deferred tax liabilities: | |||||
Net operating loss carryforwards | 112,000,000 | ||||
HLSS [Member] | |||||
Deferred tax assets: | |||||
Less valuation allowance | $ 0 | ||||
Deferred tax liabilities: | |||||
Increase in deferred tax asset | $ 195,100,000 | ||||
[1] | On April 6, 2015, as a part of the purchase price allocation related to the HLSS Acquisition (Note 1), New Residential recorded an increase to its deferred tax asset of $195.1 million. The deferred tax asset primarily relates to the difference in the book basis and tax basis of New Residential’s investment in Servicer Advances. New Residential believes that such deferred tax asset is more likely than not to be realized and, therefore, no valuation allowance has been recorded against such deferred tax asset as of December 31, 2016. | ||||
[2] | As of December 31, 2016, New Residential’s TRSs had approximately $112.0 million of net operating loss carryforwards for federal and state income tax purposes which may be available to offset future taxable income, if and when it arises. These federal and state net operating loss carryforwards will begin to expire in 2034. The utilization of the net operating loss carryforwards to reduce future income taxes will depend on the TRSs ability to generate sufficient taxable income prior to the expiration of the carryforward period. |
INCOME TAXES - Summary of Chang
INCOME TAXES - Summary of Changes in Deferred Tax Asset Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred Tax Assets, Valuation Allowance [Roll Forward] | ||
Valuation allowance, beginning balance | $ 9,409 | $ 3,619 |
Increase related to net operating losses and loan loss reserves | 1,303 | 6,680 |
Other increase (decrease) | (658) | (890) |
Valuation allowance, ending balance | $ 10,054 | $ 9,409 |
INCOME TAXES - Summary of the R
INCOME TAXES - Summary of the Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 0 | $ 2,258,000 | |
Additions for tax positions of current year | 0 | 0 | |
Other additions (reductions) | 0 | (2,258,000) | $ (2,300,000) |
Ending balance | $ 0 | $ 0 | $ 2,258,000 |
INCOME TAXES - Schedule of Taxa
INCOME TAXES - Schedule of Taxable Common Stock Distributions (Details) - $ / shares | Dec. 16, 2016 | Sep. 23, 2016 | Jun. 27, 2016 | Mar. 22, 2016 | Dec. 10, 2015 | Sep. 18, 2015 | May 14, 2015 | Mar. 16, 2015 | Dec. 18, 2014 | Sep. 18, 2014 | Jun. 17, 2014 | Mar. 19, 2014 | Dec. 31, 2016 | [2] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||
Dividends per share (in dollars per share) | $ 1.38 | [1] | $ 1.75 | $ 1.58 | |||||||||||||||||||||
Ordinary Income | 96.13% | [1] | 92.92% | 84.78% | |||||||||||||||||||||
Long-term Capital Gain | 3.87% | [1] | 7.08% | 15.22% | |||||||||||||||||||||
Return of Capital | 0.00% | [1] | 0.00% | 0.00% | |||||||||||||||||||||
Dividend declared per share of common stock (in dollars per share) | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.38 | $ 0.38 | $ 0.35 | $ 0.5 | $ 0.35 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.38 | $ 1.84 | $ 1.75 | $ 1.58 | ||
[1] | The entire $0.46 per share dividend declared in December 2016 and paid in January 2017 is treated as received by stockholders in 2017. | ||||||||||||||||||||||||
[2] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - USD ($) | Feb. 17, 2017 | Jan. 31, 2017 | Jan. 26, 2017 | Dec. 16, 2016 | Sep. 23, 2016 | Jun. 27, 2016 | Mar. 22, 2016 | Dec. 10, 2015 | Sep. 18, 2015 | May 14, 2015 | Mar. 16, 2015 | Dec. 18, 2014 | Sep. 18, 2014 | Jun. 17, 2014 | Mar. 19, 2014 | Feb. 21, 2017 | Aug. 31, 2016 | Jun. 30, 2015 | Apr. 30, 2015 | Apr. 30, 2014 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 27, 2017 | ||
Subsequent Event [Line Items] | ||||||||||||||||||||||||||||||||||
Dividend declared per share of common stock (in dollars per share) | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.38 | $ 0.38 | $ 0.35 | $ 0.5 | $ 0.35 | $ 0.46 | [1] | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.38 | $ 1.84 | $ 1.75 | $ 1.58 | ||||||||||
Dividends per share (in dollars per share) | $ 1.38 | [2] | $ 1.75 | $ 1.58 | ||||||||||||||||||||||||||||||
Dividends | $ 115,400,000 | $ 115,400,000 | $ 106,000,000 | $ 106,000,000 | $ 106,000,000 | $ 106,000,000 | $ 89,500,000 | $ 53,700,000 | $ 53,700,000 | $ 49,500,000 | $ 70,600,000 | $ 44,300,000 | $ 442,753,000 | $ 355,295,000 | $ 218,094,000 | |||||||||||||||||||
Proceeds from issuance of common stock | $ 278,800,000 | $ 442,600,000 | $ 436,100,000 | $ 163,800,000 | 279,600,000 | $ 882,166,000 | $ 173,507,000 | |||||||||||||||||||||||||||
Risk-free interest rate | 1.45% | 2.61% | 2.02% | 2.87% | ||||||||||||||||||||||||||||||
Dividend yield | 11.80% | 7.81% | 6.71% | 12.584% | ||||||||||||||||||||||||||||||
Volatility | 27.57% | 23.73% | 24.04% | 25.66% | ||||||||||||||||||||||||||||||
Term (in years) | 10 years | 10 years | 10 years | 10 years | ||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 13,208,783,000 | $ 13,208,783,000 | ||||||||||||||||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||||||||||||||
Issuance of common stock (in shares) | 20,000,000 | 27,900,000 | 29,213,020 | 13,875,000 | ||||||||||||||||||||||||||||||
Share price (in dollars per share) | $ 14.20 | $ 15.88 | $ 15.25 | $ 12.20 | $ 15.88 | |||||||||||||||||||||||||||||
Options granted to Manager (in shares) | 2,000,000 | 2,800,000 | 5,750,000 | 1,437,500 | ||||||||||||||||||||||||||||||
Fair value of options granted to Manager | $ 2,300,000 | $ 3,700,000 | $ 8,900,000 | $ 1,400,000 | ||||||||||||||||||||||||||||||
Common Stock [Member] | Executive Officer [Member] | ||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||||||||||||||
Issuance of common stock (in shares) | 9,100 | 250,000 | 500,000 | |||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 6,100,000 | |||||||||||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||||||||||||||
Dividend declared per share of common stock (in dollars per share) | $ 0.48 | |||||||||||||||||||||||||||||||||
Dividends per share (in dollars per share) | $ 0.46 | |||||||||||||||||||||||||||||||||
Proceeds from issuance of common stock | $ 834,600,000 | |||||||||||||||||||||||||||||||||
Risk-free interest rate | 2.38% | |||||||||||||||||||||||||||||||||
Dividend yield | 10.82% | |||||||||||||||||||||||||||||||||
Volatility | 28.64% | |||||||||||||||||||||||||||||||||
Term (in years) | 10 years | |||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Secured Debt [Member] | 2017-T1 Term Notes [Member] | ||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 400,000,000 | |||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Common Stock [Member] | ||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||||||||||||||
Issuance of common stock (in shares) | 56,500,000 | |||||||||||||||||||||||||||||||||
Share price (in dollars per share) | $ 15 | |||||||||||||||||||||||||||||||||
Options granted to Manager (in shares) | 5,700,000 | |||||||||||||||||||||||||||||||||
Fair value of options granted to Manager | $ 8,100,000 | |||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Common Stock [Member] | Executive Officer [Member] | ||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||||||||||||||
Issuance of common stock (in shares) | 18,600 | |||||||||||||||||||||||||||||||||
Subsequent Event [Member] | New Residential Mortgage LLC [Member] | Secured Debt [Member] | ||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||||||||||||||
Maximum borrowing capacity | $ 300,000,000 | |||||||||||||||||||||||||||||||||
Subsequent Event [Member] | New Residential Mortgage LLC [Member] | Secured Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||||||||||||||
Variable interest rate spread | 4.25% | |||||||||||||||||||||||||||||||||
Subsequent Event [Member] | New Residential Mortgage LLC [Member] | CitiMortgage, Inc. [Member] | Mortgage Servicing Rights [Member] | ||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||||||||||||||||
Unpaid Principal Balance | $ 97,000,000,000 | |||||||||||||||||||||||||||||||||
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. | |||||||||||||||||||||||||||||||||
[2] | The entire $0.46 per share dividend declared in December 2016 and paid in January 2017 is treated as received by stockholders in 2017. |
SUMMARY OF QUARTERLY CONSOLI143
SUMMARY OF QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) - Schedule of Quarterly Unaudited Summary Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 16, 2016 | Sep. 23, 2016 | Jun. 27, 2016 | Mar. 22, 2016 | Dec. 10, 2015 | Sep. 18, 2015 | May 14, 2015 | Mar. 16, 2015 | Dec. 18, 2014 | Sep. 18, 2014 | Jun. 17, 2014 | Mar. 19, 2014 | Dec. 31, 2016 | [1] | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Interest income | $ 326,834 | $ 282,388 | $ 277,477 | $ 190,036 | $ 200,181 | $ 182,341 | $ 178,177 | $ 84,373 | $ 1,076,735 | $ 645,072 | $ 346,857 | ||||||||||||||||||||||
Interest expense | 95,023 | 96,488 | 100,685 | 81,228 | 80,605 | 77,558 | 81,871 | 33,979 | 373,424 | 274,013 | 140,708 | ||||||||||||||||||||||
Net interest income (expense) | 231,811 | 185,900 | 176,792 | 108,808 | 119,576 | 104,783 | 96,306 | 50,394 | 703,311 | 371,059 | 206,149 | ||||||||||||||||||||||
Impairment | |||||||||||||||||||||||||||||||||
Other-than-temporary impairment (OTTI) on securities | 2,426 | 1,765 | 2,819 | 3,254 | 2,494 | 1,574 | 649 | 1,071 | 10,264 | 5,788 | 1,391 | ||||||||||||||||||||||
Valuation provision (reversal) on loans | 35,871 | 18,275 | 16,825 | 6,745 | 16,188 | (3,341) | 4,772 | 977 | 77,716 | 18,596 | 9,891 | ||||||||||||||||||||||
Total Impairment Charges | 38,297 | 20,040 | 19,644 | 9,999 | 18,682 | (1,767) | 5,421 | 2,048 | 87,980 | 24,384 | 11,282 | ||||||||||||||||||||||
Net interest income after impairment | 193,514 | 165,860 | 157,148 | 98,809 | 100,894 | 106,550 | 90,885 | 48,346 | 615,331 | 346,675 | 194,867 | ||||||||||||||||||||||
Servicing revenue, net | 118,169 | 0 | 0 | 0 | 118,169 | 0 | 0 | ||||||||||||||||||||||||||
Other income (loss) | 23,437 | [2] | 26,701 | [2] | (19,723) | [2] | 31,922 | [2] | 9,909 | [2] | (17,825) | [2] | 37,650 | [2] | 12,295 | [2] | 62,337 | [2] | 42,029 | [2] | 375,088 | ||||||||||||
Operating expenses | 72,339 | 40,575 | 36,280 | 25,016 | 27,699 | 32,902 | 34,952 | 22,270 | 174,210 | 117,823 | 104,899 | ||||||||||||||||||||||
Income (Loss) Before Income Taxes | 262,781 | 151,986 | 101,145 | 105,715 | 83,104 | 55,823 | 93,583 | 38,371 | 621,627 | 270,881 | 465,056 | ||||||||||||||||||||||
Income tax expense (benefit) | 20,716 | 20,900 | 7,518 | (10,223) | (15,948) | (5,932) | 14,306 | (3,427) | 38,911 | (11,001) | 22,957 | ||||||||||||||||||||||
Net Income (Loss) | 242,065 | 131,086 | 93,627 | 115,938 | 99,052 | 61,755 | 79,277 | 41,798 | 582,716 | 281,882 | 442,099 | ||||||||||||||||||||||
Noncontrolling Interests in Income (Loss) of Consolidated Subsidiaries | 16,908 | 32,178 | 24,975 | 4,202 | (3,928) | 7,193 | 4,158 | 5,823 | 78,263 | 13,246 | 89,222 | ||||||||||||||||||||||
Net income (loss) attributable to common stockholders | $ 225,157 | $ 98,908 | $ 68,652 | $ 111,736 | $ 102,980 | $ 54,562 | $ 75,119 | $ 35,975 | $ 504,453 | $ 268,636 | $ 352,877 | ||||||||||||||||||||||
Net Income Per Share of Common Stock | |||||||||||||||||||||||||||||||||
Basic (in dollars per share) | $ 0.90 | $ 0.41 | $ 0.30 | $ 0.48 | $ 0.45 | $ 0.24 | $ 0.37 | $ 0.25 | $ 2.12 | $ 1.34 | $ 2.59 | ||||||||||||||||||||||
Diluted (in dollars per share) | $ 0.90 | $ 0.41 | $ 0.30 | $ 0.48 | $ 0.45 | $ 0.24 | $ 0.37 | $ 0.25 | $ 2.12 | $ 1.32 | $ 2.53 | ||||||||||||||||||||||
Weighted Average Number of Shares of Common Stock Outstanding | |||||||||||||||||||||||||||||||||
Basic (in shares) | 250,773,117 | 240,601,691 | 230,478,390 | 230,471,202 | 230,459,000 | 230,455,568 | 200,910,040 | 141,434,905 | 238,122,665 | 200,739,809 | 136,472,865 | ||||||||||||||||||||||
Diluted (in shares) | 251,299,730 | 241,099,381 | 230,839,753 | 230,538,712 | 230,698,961 | 231,215,235 | 205,169,099 | 144,911,309 | 238,486,772 | 202,907,605 | 139,565,709 | ||||||||||||||||||||||
Dividend declared per share of common stock (in dollars per share) | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.38 | $ 0.38 | $ 0.35 | $ 0.5 | $ 0.35 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.46 | $ 0.45 | $ 0.38 | $ 1.84 | $ 1.75 | $ 1.58 | ||||||||||
[1] | New Residential completed significant transactions in the fourth quarter of 2016, as described in Notes 5, 8 and 9, as well as certain financings included in Note 11. | ||||||||||||||||||||||||||||||||
[2] | Earnings from investments in equity method investees is included in other income. |