NATIONSTAR MORTGAGE HOLDINGS INC., 10-Q filed on 11/7/2014
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2014
Nov. 3, 2014
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
Nationstar Mortgage Holdings Inc.  
 
Entity Central Index Key
0001520566 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2014 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q3 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Non-accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
90,982,859 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Assets
 
 
Cash and cash equivalents
$ 269,735 
$ 441,902 
Restricted cash
294,044 
592,747 
Accounts receivable
3,060,382 
5,636,482 
Mortgage loans held for sale, $1,695,502 and $2,585,340 at fair value, respectively
1,697,041 
2,603,380 
Mortgage loans held for investment, net of allowance for loan losses of $3,549 and $2,144 respectively
195,432 
211,050 
Reverse mortgage interests
1,956,952 
1,434,506 
Mortgage servicing rights, $2,898,209 and $2,488,283 at fair value, respectively
2,910,640 
2,503,162 
Property and equipment, net of accumulated depreciation of $100,515 and $74,723 respectively
121,635 
119,185 
Derivative financial instruments
88,333 
123,878 
Other assets
282,850 
360,397 
Total assets
10,877,044 
14,026,689 
Liabilities and equity
 
 
Notes payable
3,532,743 
6,984,351 
Unsecured senior notes
2,159,651 
2,444,062 
Payables and accrued liabilities
1,344,895 
1,308,450 
Derivative financial instruments
9,621 
8,526 
Mortgage servicing liabilities
78,954 
82,521 
Other nonrecourse debt
2,552,856 
2,208,881 
Total liabilities
9,678,720 
13,036,791 
Commitments and contingencies – See Note 15
0 
0 
Preferred stock at $0.01 par value - 300,000 shares authorized, no shares issued and outstanding
0 
0 
Common stock at $0.01 par value - 1,000,000 shares authorized, 90,975 shares and 90,330 shares issued at September 30, 2014 and December 31, 2013, respectively
910 
906 
Additional paid-in-capital
586,929 
566,642 
Retained earnings
624,057 
422,341 
Treasury shares; 531 shares and 168 shares at cost, respectively
(18,449)
(6,944)
Accumulated other comprehensive income
0 
1,963 
Total Nationstar stockholders' equity
1,193,447 
984,908 
Noncontrolling interest
4,877 
4,990 
Total equity
1,198,324 
989,898 
Total liabilities and equity
$ 10,877,044 
$ 14,026,689 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Statement of Financial Position [Abstract]
 
 
Mortgage loans held for sale at fair value
$ 1,695,502 
$ 2,585,340 
Allowance for loan losses of mortgage loans held for investment, subject to nonrecourse debt
3,549 
2,144 
Mortgage servicing rights at fair value
(2,898,209)
(2,488,283)
Accumulated depreciation of property and equipment
$ 100,515 
$ 74,723 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
300,000,000 
300,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
(1,000,000,000)
(1,000,000,000)
Common stock, shares issued
91,506,000 
90,330,000 
Common stock, shares outstanding
90,975,000 
90,330,000 
Treasury Stock, Shares
531,000 
168,000 
Unaudited Consolidated Statements of Operations and Comprehensive Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Revenues:
 
 
 
 
Servicing fee income
$ 235,408 
$ 341,679 
$ 733,671 
$ 802,584 
Other fee income
126,101 
84,203 
346,366 
186,877 
Total fee income
361,509 
425,882 
1,080,037 
989,461 
Gain on mortgage loans held for sale
142,815 
205,956 
443,667 
677,104 
Total revenues
504,324 
631,838 
1,523,704 
1,666,565 
Expenses and impairments:
 
 
 
 
Salaries, wages and benefits
(160,757)
(193,258)
(471,404)
(499,875)
General and Administrative Expense
157,068 
187,517 
494,453 
472,241 
Loss on foreclosed real estate and other
2,731 
9,498 
5,826 
13,363 
Occupancy
6,668 
5,581 
23,385 
18,797 
Total expenses and impairments
327,224 
395,854 
995,068 
1,004,276 
Other income (expense):
 
 
 
 
Interest income
43,314 
63,903 
130,198 
145,948 
Interest expense
(116,673)
(168,215)
(412,695)
(378,500)
Gain (Loss) on Sale of Properties
4,898 
0 
4,898 
0 
Gain on interest rate swaps and caps
940 
400 
2,808 
2,457 
Total other income (expense)
(67,521)
(103,912)
(274,791)
(230,095)
Income before taxes
109,579 
132,072 
253,845 
432,194 
Income tax expense
(1,700)
50,187 
52,242 
164,233 
Net income
111,279 
81,885 
201,603 
267,961 
Less: Net gain (loss) attributable to noncontrolling interests
54 
0 
(113)
0 
Net income attributable to Nationstar
111,225 
81,885 
201,716 
267,961 
Other comprehensive income, net of tax:
 
 
 
 
Change in value of designated cash flow hedge
0 
(407)
(1,963)
1,412 
Comprehensive income
$ 111,225 
$ 81,478 
$ 199,753 
$ 269,373 
Earnings per share:
 
 
 
 
Basic earnings per share (in dollars per share)
$ 1.23 
$ 0.92 
$ 2.24 
$ 3.00 
Diluted earnings per share (in dollars per share)
$ 1.22 
$ 0.91 
$ 2.22 
$ 2.97 
Weighted average shares:
 
 
 
 
Basic (shares)
90,120 
89,477 
89,990 
89,398 
Dilutive effect of stock awards (shares)
1,001 
921 
690 
752 
Diluted (shares)
91,121 
90,398 
90,680 
90,150 
Dividends declared per share (in dollars per share)
$ 0 
$ 0 
$ 0 
$ 0 
Consolidated Statements of Shareholders' Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Stock
Additional Paid-in Capital
Retained Earnings
Treasury Stock [Member]
Common Shares Held By Subsidiary
Accumulated Other Comprehensive Income (Loss) [Member]
Noncontrolling Interest [Member]
Balance at Dec. 31, 2012
$ 757,682 
$ 905 
$ 556,056 
$ 205,287 
$ 0 
$ (4,566)
$ 0 
$ 0 
Balance, shares at Dec. 31, 2012
 
90,460 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures
 
82 
 
 
 
 
 
 
Share-based compensation
0 
3 
(3)
 
 
 
 
 
LLC conversion of equity to common shares
1,963 
0 
 
 
 
 
 
 
LLC conversion of equity to common shares, shares
 
0 
 
 
 
 
 
 
Common stock issuance
10,574 
0 
10,574 
 
 
 
 
 
Change in value of designated cash flow hedge
 
 
 
 
 
 
1,963 
 
Stock Issued During Period, Shares, Treasury Stock Reissued
 
0 
 
 
 
 
 
 
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition
 
 
 
0 
 
 
 
 
Redemption of shares for stock vesting
(6,944)
 
0 
 
6,944 
 
 
 
Treasury shares; 531 shares and 168 shares at cost, respectively
(6,944)
 
 
 
 
 
 
 
Tax related share-based settlement of units by members
 
 
 
 
 
0 
 
 
Net tax benefit for stock grants issued
4,579 
 
4,579 
 
 
 
 
 
Treasury Stock, Shares, Acquired
 
0 
 
 
 
 
 
 
Treasury Stock, Shares, Retired
 
(212)
 
 
 
 
 
 
Treasury Stock, Retired, Cost Method, Amount
0 
(2)
(4,564)
 
 
4,566 
 
 
Noncontrolling interest
4,990 
 
 
 
 
 
 
 
Contributions from joint venture member to noncontrolling interests
4,990 
 
 
 
 
 
 
4,990 
Net income attributable to Nationstar
217,054 
 
 
217,054 
 
0 
 
 
Total equity
989,898 
 
 
 
 
 
 
 
Balance at Dec. 31, 2013
984,908 
906 
566,642 
422,341 
(6,944)
0 
1,963 
4,990 
Balance, shares at Dec. 31, 2013
 
90,330 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures
 
1,176 
 
 
 
 
 
 
Share-based compensation
0 
4 
(4)
0 
0 
0 
0 
0 
Change in value of designated cash flow hedge
(1,963)
0 
0 
0 
0 
0 
(1,963)
0 
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition
11,344 
 
11,344 
 
 
 
 
 
Redemption of shares for stock vesting
(4,755)
 
 
 
 
 
 
 
Treasury shares; 531 shares and 168 shares at cost, respectively
(18,449)
 
 
 
 
 
 
 
Excess tax benefit from share-based compensation
2,197 
 
 
 
 
 
 
 
Net tax benefit for stock grants issued
2,197 
 
2,197 
0 
 
 
 
 
Treasury Stock, activity for period
(4,755)
 
6,750 
 
(11,505)
 
 
 
Noncontrolling interest
4,877 
 
 
 
 
 
 
 
Contributions from joint venture member to noncontrolling interests
0 
 
 
 
 
 
 
 
Net income attributable to Nationstar
201,716 
 
 
201,716 
 
 
0 
 
Less: Net gain (loss) attributable to noncontrolling interests
(113)
 
 
 
 
 
 
(113)
Total equity
1,198,324 
 
 
 
 
 
 
 
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest
201,603 
 
 
 
 
 
 
 
Balance at Sep. 30, 2014
$ 1,193,447 
$ 910 
$ 586,929 
$ 624,057 
$ (18,449)
$ 0 
$ 0 
$ 4,877 
Balance, shares at Sep. 30, 2014
 
91,506 
 
 
 
 
 
 
Unaudited Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Statement of Cash Flows [Abstract]
 
 
Interest Paid
$ 386 
$ 282,417,000 
Income Taxes Paid, Net
(15,847)
112,392,000 
Operating activities
 
 
Net income attributable to Nationstar
201,716 
267,961 
Adjustments to reconcile net income to net cash (used in) / provided by operating activities:
 
 
Share-based compensation
11,344 
8,140 
Net tax effect of stock grants
(2,197)
(2,660)
Loss on foreclosed real estate and other
5,826 
13,363 
Gain on mortgage loans held for sale
(443,667)
(677,104)
Mortgage loans originated and purchased, net of fees
(16,548,058)
(17,166,460)
Proceeds on sale of and payments of mortgage loans held for sale
(17,757,055)
(15,376,486)
Gain on derivatives including ineffectiveness
(2,808)
(2,457)
Cash settlement on derivative financial instruments
1,352 
(4,544)
Depreciation and amortization
29,963 
16,686 
Amortization of premiums/discounts
16,660 
39,261 
Fair value changes in excess spread financing
61,080 
33,229 
Fair value changes and amortization/accretion of mortgage servicing rights
(128,227)
38,117 
Fair value change in mortgage servicing rights financing liability
(38,260)
0 
Changes in assets and liabilities:
 
 
Accounts receivable, including servicing advances, net
601,549 
(96,120)
Reverse mortgage interests
(572,544)
(460,534)
Other assets
62,286 
(331,855)
Payables and accrued liabilities
(25,460)
503,061 
Net cash attributable to operating activities
1,244,064 
(2,521,664)
Investing activities
 
 
Property and equipment additions, net of disposals
(41,567)
(47,883)
Proceeds from Sale of Buildings
10,412 
0 
Purchases of reverse mortgage servicing rights and interests
0 
15,059 
Purchase of forward mortgage servicing rights, net of liabilities incurred
(317,247)
(2,331,658)
Proceeds on sale of servicer advances
512,527 
0 
Loan repurchases from Ginnie Mae
(9,134)
0 
Proceeds from sales of REO
70,480 
60,389 
Acquisitions, net
(18,000)
(78,200)
Net cash attributable to investing activities
207,471 
(2,412,411)
Financing activities
 
 
Transfers (to) / from restricted cash, net
(282,289)
348,499 
Issuance of unsecured senior notes, net
0 
1,365,244 
Repayments of Unsecured Debt
(285,000)
0 
Debt financing costs
(11,461)
(46,784)
Increase (decrease) in notes payable
(1,942,141)
3,042,623 
Issuance of excess spread financing
150,951 
707,640 
Repayment of excess spread financing
(135,897)
(77,505)
Increase in participating interest financing in reverse mortgage interests
(279,636)
(422,787)
Proceeds from mortgage servicing rights financing
52,835 
0 
Repayment of nonrecourse debt – Legacy assets
(12,356)
(9,925)
Due to financial services companies
 
0 
Contributions from joint venture member to noncontrolling interests
0 
4,990 
Net tax benefit for stock grants issued
2,197 
2,660 
Redemption of shares for stock vesting
(4,755)
(6,554)
Net cash attributable to financing activities
(1,623,702)
5,056,677 
Net increase (decrease) in cash and cash equivalents
(172,167)
122,602 
Cash and cash equivalents at beginning of period
441,902 
152,649 
Cash and cash equivalents at end of period
269,735 
275,251 
Supplemental disclosures of non-cash activities
 
 
Supplemental disclosures of non-cash activities
2,901 
3,238 
Transfer of reverse mortgage interest to REO at fair value
50,098 
12,036 
Mortgage servicing rights resulting from sale or securitization of mortgage loans
185,822 
177,583 
Tax related share-based settlement of common stock
4,755 
6,554 
Liabilities incurred from purchase of forward mortgage servicing rights
63,231 
78,091 
Change in value of designated cash flow hedge
$ (1,963)
$ 1,412 
Nature of Business and Basis of Presentation
Nature of Business and Basis of Presentation
Nature of Business and Basis of Presentation
Nature of Business
Nationstar Mortgage Holdings Inc. (Nationstar or the Company), a Delaware corporation, earns fees through the delivery of quality servicing, origination and transaction based services related principally to single-family residences.
Nationstar presents financial performance utilizing reportable segments aligned with how the operations are managed. The Servicing segment reflects the results of operations attributable to residential mortgage servicing rights (MSRs) acquired from and loans subserviced for third-parties and originated loans. The Solutionstar segment reflects financial performance related to real estate services (e.g., collateral valuation, title, closing services) and real estate exchange, including our HomeSearch.com residential market portal. The Originations segment includes fees associated with loan originations and gains from the sale and securitization of loans. The Corporate and Other segment encompasses certain identified corporate costs as well as the 'Legacy' portfolio which includes primarily all subprime mortgage loans originated in the latter portion of 2006 and 2007 or acquired from Nationstar's predecessor.
Basis of Presentation
The consolidated financial statements include the accounts of Nationstar, its wholly-owned subsidiaries, and other entities in which the Company has a controlling financial interest, and those variable interest entities (VIEs) where Nationstar's wholly-owned subsidiaries are the primary beneficiaries. Intercompany balances and transactions have been eliminated. Results of operations, assets and liabilities of VIEs are included from the date that Nationstar became the primary beneficiary through the date Nationstar ceases to be the primary beneficiary.
The interim consolidated financial statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of the interim periods have been included. The consolidated interim financial statements of Nationstar have been prepared in accordance with generally accepted accounting principles for interim information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (SEC). Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States (GAAP) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Nationstar's Annual Report on Form 10-K filed on February 27, 2014. The results of operations for the interim periods disclosed are not necessarily indicative of the results that may be expected for the full year or any future period. Certain prior period amounts have been reclassified to conform to the current period presentation. Nationstar evaluated subsequent events through the date these interim consolidated financial statements were issued.
Recent Accounting Developments
Recent Accounting Developments
Recent Accounting Developments

Accounting Standard Update No 2014-04, Receivables: Troubled Debt Restructuring by Creditors Reclassification of
Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure (ASU 2014-04), was created to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage so that the asset would be derecognized in the receivable and recognized as real estate property. This update specifies that an in substance repossession occurs when either the creditor has obtained the legal title to the property after a foreclosure or the borrower has transferred all interest in the property to the creditor through a deed in lieu of foreclosure or similar legal agreement so that at that time the asset should be reclassified from a loan receivable to real estate property. This update also provides that a disclosure of the amount of foreclosed residential real estate property and the recorded investment in consumer mortgage loans collateralized by residential real estate property that is in the process of foreclosure must be included in both interim and annual financial reports. This amendment update is effective for periods for fiscal years beginning after December 15, 2014. The adoption of ASU 2014-04 is not expected to have a material impact on our financial condition, liquidity or results of operations.

Accounting Standards Update No 2014-09, Revenue from Contracts with Customers (ASU 2014-09), was created to standardize revenue recognition process between public and private companies as well as across industries in an effort to more closely align GAAP revenue recognition with international standards to provide a more comparable revenue number for the users of the financial statements. The standard outlines that for all contracts, revenue should be recognized when or as the entity satisfies a performance obligation. Revenue is recognized either over a period or at one point in time in accordance with how the control of the service or good is transferred. This amendment update is for all year-end and interim periods beginning after December 15, 2016 and early application is not permitted. The Company is evaluating the impact of the adoption of ASU 2014-09 on our financial condition, liquidity and results of operations.
Accounting Standards Update No 2014-11, Transfers and Servicing: Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (ASU 2014-11), was created to provide greater disclosure in reference to repurchase agreements and similar transactions. For repurchase agreements, the entity must disclose the carrying amount of the assets derecognized at the derecognition date, the amount of gross proceeds received by the transferor at the time of derecognition, information about the transferor’s ongoing exposure to economic return on the transferred financial assets, amounts that are reported in the balance sheet arising from the transactions, disaggregation of the gross obligation by class of collateral pledged, remaining contractual tenor of the agreement, and a discussion of the potential risks associated with the agreements and the related collateral pledged and how these risks are managed. This amendment update is effective for year-end periods beginning after December 15, 2014 and early application is not permitted. The adoption of ASU 2014-11 is not expected to have a material impact on our financial condition, liquidly or results of operations.
ASU No. 2014-12, Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, (ASU 2014-12), requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. ASU 2014-12 is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted. The adoption of ASU 2014-12 is not expected to have a material impact on our financial condition, liquidity or results of operation.
Accounting Standards Update No. 2014-14, Receivables - Troubled Debt Restructuring by Creditors (Subtopic 310-40), Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure, (ASU 2014-14), streamlines how companies classify government-guaranteed mortgage loans upon foreclosure. This update specifies that the mortgage loan be derecognized and a separate other receivable be recognized upon foreclosure when specific conditions are met. The conditions are that the government guarantee is not separable from the loan prior to foreclosure, at foreclosure, the creditor has the intent and ability to convey property to guarantor and make a claim on the guarantee and the amount recoverable under the guarantee is fixed and determinable. ASU 2014-14 is effective for all interim and annual periods beginning after December 14, 2014. Upon the adoption ASU 2014-14, the Company will appropriately reclassify amounts previously classified as real estate owned into accounts receivable on its consolidated balance sheet.
Accounting Standards Update 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, (ASU 2014-15), creates a consistency in the disclosures made by an entity when there is doubt that the entity will continue as a going concern. The updates requires that management must evaluate whether there are conditions that would prevent the entity to continue as a going concern and if there is substantial doubt, they must disclose their plans to alleviate the substantial doubt or mitigate the conditions that create it within a footnote disclosure. ASU 2014-15 also provides the definition of substantial doubt in order to provide consistency as to when an entity should provide a footnote disclosure. ASU 2014-15 is effective for annual periods ending after December 15, 2016. The adoption of ASU 2014-15 is not expected to have a material impact on our financial condition, liquidity or results of operations.
Variable Interest Entities and Securitizations
Variable Interest Entities and Securitizations
Securitizations and Financings

In the normal course of business, Nationstar enters into various types of securitizations and asset-backed financing arrangements secured by assets. For disclosure purposes, Nationstar aggregates these transactions based upon whether the transaction was treated as a sale (securitizations), accounted for as a secured borrowing (financings) or consolidated because the Company is the primary beneficiary of a variable interest entity (VIE).

Securitizations Treated as Sales

With respect to securitizations of residential mortgage loans, Nationstar’s continuing involvement typically includes acting as servicer for the mortgage loans held by the trust and holding beneficial interests in the trust. Nationstar’s responsibilities as servicer include, among other things, collecting monthly payments, maintaining escrow accounts, providing periodic reports and managing insurance in exchange for a contractually specified servicing fee. The beneficial interests held consist of both
subordinate and residual securities that were retained at the time of securitization. These securitizations generally do not result
in consolidation of the VIE as the beneficial interests that the Company holds in the securitization trusts have no value and no potential for significant cash flows in the future. In addition, at September 30, 2014 and December 31, 2013, the Company had no other significant assets in our consolidated financial statements related to these trusts. The Company has no obligation to provide financial support to unconsolidated securitization trusts and has provided no such support. The creditors of the trusts can look only to the assets of the trusts themselves for satisfaction of the debt issued by the trusts and have no recourse against the assets of Nationstar. The general creditors of Nationstar have no claim on the assets of the trusts. Nationstar's exposure to loss as a result of its continuing involvement with the trusts is limited to the carrying values, if any, of its investments in the residual and subordinate securities of the trusts, the MSRs that are related to the trusts and the advances to the trusts. The Company considers the probability of loss arising from its advances to the trust to be remote because of its position ahead of most of the other liabilities of the trusts. See Note 4, Accounts Receivable, and Note 6, Mortgage Servicing Rights, for additional information regarding advances and MSRs.

Gains and losses on the assets transferred are recognized based on the carrying amount of the financial assets involved in the transfer, allocated between the assets transferred and the retained interests based on their relative fair value at the date of transfer, other than MSRs. Retained MSRs are recorded at their fair value on the transfer date.

A summary of the outstanding collateral and certificate balances for securitization trusts for which Nationstar was the transferor, including any retained beneficial interests and MSRs, that were not consolidated by Nationstar for the periods indicated are as follows:
 
September 30, 2014
 
December 31, 2013
Total collateral balances
$
3,368,452

 
$
3,831,473

Total certificate balances
3,394,555

 
3,843,694

A summary of mortgage loans transferred to unconsolidated securitization trusts that are 60 days or more past due and the credit losses incurred in the unconsolidated securitization trusts are presented below:
 
Principal Amount of Loans 60 Days or More Past Due
September 30, 2014
 
September 30, 2013
Unconsolidated securitization trusts
$
887,105

 
$
1,183,582

 
 
 
 
 
For the three
months ended September 30,
 
For the nine
months ended September 30,
Credit Losses
2014
 
2013
 
2014
 
2013
Unconsolidated securitization trusts
$
71,757

 
$
57,879

 
$
219,189

 
$
185,612


Certain cash flows received from securitization trusts related to the transfers of mortgage loans accounted for as sales for the dates indicated were as follows:
 
 
For the three
months ended September 30,
 
For the nine
months ended September 30,
 
2014
 
2013
 
2014
 
2013
 
Servicing Fees Received
 
Loan
Repurchases
 
Servicing Fees Received
 
Loan
Repurchases
 
Servicing Fees Received
 
Loan
Repurchases
 
Servicing Fees Received
 
Loan
Repurchases
Unconsolidated securitization trusts
$
2,632

 
$
—

 
$
9,515

 
$
—

 
20,818

 
$
—

 
$
29,219

 
$
—

Financings
Nationstar maintains various agreements with special purpose entities under which Nationstar transfers mortgage loans in exchange for cash. These entities issue debt supported by collections on the transferred mortgage loans. These transfers do not qualify for sale treatment because Nationstar continues to retain control over the transferred assets. As a result, Nationstar accounts for these transfers as financings and continues to carry the transferred assets and recognizes the related liabilities on Nationstar’s consolidated balance sheets. Collections on the mortgage loans pledged to the entities are used to repay principal and interest and to pay the expenses of the entity. The holders of these beneficial interests issued by these entities do not have recourse to Nationstar and can only look to the assets of the entities themselves for satisfaction of the debt.

Nationstar has issued pools of Home Equity Conversion Mortgage Backed Securities to third-party investors collateralized by advances on the related Home Equity Conversion Mortgages. These transfers do not meet the requirement for sale accounting and are accounted for as secured financings with the reverse mortgage interests and the related financing included in the consolidated financial statements of Nationstar. The assets and liabilities are reported in reverse mortgage interest and other nonrecourse debt, respectively, on Nationstar's consolidated balance sheet.
VIEs

Nationstar also transfers servicing advance receivables to special purpose entities in exchange for cash. We consolidate these entities because Nationstar is the primary beneficiary of the VIE. These VIEs issue debt supported by collections on the transferred advances. Nationstar made these transfers under the terms of the advance facility agreements. The Company classifies the transferred advances on its consolidated balance sheets as accounts receivable and the related liabilities as notes payable.

A summary of the assets and liabilities of Nationstar’s transactions with VIEs included in the Company’s consolidated financial statements as of September 30, 2014 and December 31, 2013 is presented in the following tables:
 
 
September 30, 2014
 
December 31, 2013
 
Transfer Included in the Consolidated Financial Statements
 
Reverse Secured Borrowings
 
Transfer Included in the Consolidated Financial Statements
 
Reverse Secured Borrowings
ASSETS
 
 
 
 
 
 
 
Restricted cash
$
98,115

 
$
—

 
$
272,188

 
$
—

Reverse mortgage interests
—

 
1,296,420

 
—

 
1,039,645

Accounts receivable
1,170,414

 
—

 
4,031,444

 
—

Mortgage loans held for investment, net
193,429

 
—

 
208,263

 
—

Derivative financial instruments
1,349

 
—

 
3,691

 
—

Other assets
1,550

 
—

 
2,375

 
—

Total Assets
$
1,464,857

 
$
1,296,420

 
$
4,517,961

 
$
1,039,645

LIABILITIES
 
 
 
 
 
 
 
Notes payable
$
1,003,200

 
$
—

 
$
3,672,726

 
$
—

Payables and accrued liabilities
1,357

 
—

 
4,242

 
—

Nonrecourse debt–Legacy Assets
78,481

 
—

 
89,107

 
—

Participating interest financing
—

 
1,367,382

 
—

 
1,080,718

Total Liabilities
$
1,083,038

 
$
1,367,382

 
$
3,766,075

 
$
1,080,718

Accounts Receivable
Accounts Receivable
Accounts Receivable

Accounts receivable consists primarily of accrued revenues, including accrued servicing fees and commissions, accrued interest on mortgage loans and securitizations and borrower advances made to securitization trusts, and other third parties as required under various servicing agreements related to delinquent loans, which are ultimately repaid from the securitization trusts or the borrower.
Accounts receivable consist of the following:
 
 
September 30, 2014
 
December 31, 2013
Servicer advances, net of purchase discount $8,875 and $62,217, respectively
$
2,594,106

 
$
5,099,670

Reverse mortgage servicer advances
201,541

 
93,494

Accrued revenues
158,861

 
134,440

Receivables from trusts and agencies
84,171

 
105,917

Accrued interest
2,805

 
6,970

Other
18,898

 
195,991

Total accounts receivable
$
3,060,382

 
$
5,636,482



During the three month period ending September 30, 2014, there was no accretion of purchase discounts. However for the nine month period ended September 30, 2014, the Company accreted $8.4 million of the purchase discounts from recovered servicer advances into interest income. During the three and nine month periods ended September 30, 2013, the Company accreted $11.3 million and $22.5 million, respectively, of the purchase discounts from recovered servicer advances.

In 2014, Nationstar sold approximately $2.2 billion of servicer advances to a joint venture entity capitalized by New Residential and other investors. See Note 17, Disclosures Related to Transactions with Affiliates of Fortress Investment Group LLC, for additional information. Consequently, the related purchase discount of $52.9 million was eliminated from Nationstar's consolidated balance sheet. See Note 10, Indebtedness, for additional information.

As of September 30, 2014 and December 31, 2013, Nationstar carried an allowance for uncollectible servicer advances of $94.4 million and $40.7 million respectively, primarily related to acquired interest advances on Ginnie Mae loans originally purchased at a discount.
Mortgage Loans Held for Sale and Investment
Mortgage Loans Held for Sale and Investment
Mortgage Loans Held for Sale and Investment, including Reverse Mortgage Interests
Mortgage loans held for sale
Nationstar maintains a strategy of originating mortgage loan products primarily for the purpose of selling to GSEs or other third-party investors in the secondary market. Generally, all newly originated mortgage loans held for sale are delivered to third-party purchasers or securitized shortly after origination.
Mortgage loans held for sale consist of the following:
 
 
September 30, 2014
 
December 31, 2013
Mortgage loans held for sale – unpaid principal balance
$
1,629,030

 
$
2,532,881

Mark-to-market adjustment, included in Gain on Mortgage Loans Held for Sale
68,011

 
70,499

Total mortgage loans held for sale
$
1,697,041

 
$
2,603,380


Nationstar had $36.6 million and $69.5 million mortgage loans held for sale on nonaccrual status at September 30, 2014 and December 31, 2013, respectively. The majority of loans on nonaccrual status are Ginnie Mae repurchased loans that were repurchased solely to modify the loans. Upon completion of the modification the loans are expected to be subject to sale to a GSE. The fair value of loans held for sale on nonaccrual status at September 30, 2014 and December 31, 2013, was approximately $30.8 million and $63.5 million, respectively.
A reconciliation of the changes in mortgage loans held for sale for the dates indicated is presented in the following table:
 
 
For the nine months ended
 
September 30, 2014
 
September 30, 2013
Mortgage loans held for sale – beginning balance
$
2,603,380

 
$
1,480,537

Mortgage loans originated and purchased, net of fees
16,548,058

 
17,166,460

Proceeds on sale of and payments of mortgage loans held for sale
(17,449,261
)
 
(14,780,987
)
Transfer of mortgage loans held for sale to held for investment or other assets
(5,136
)
 
2,450

Mortgage loans held for sale – ending balance
$
1,697,041

 
$
3,868,460


For certain loans sold to Ginnie Mae, Nationstar, as the servicer has the right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased solely with the intent to repool into new Ginnie Mae securitizations or to otherwise sell to third-party investors. For the nine months ended September 30, 2014 and September 30, 2013, Nationstar repurchased $3.1 billion and $0.7 billion of mortgage loans, respectively, out of Ginnie Mae securitization pools.
Mortgage loans held for investment, net
Mortgage loans held for investment, net consist of nonconforming mortgage loans securitized which serve as collateral for the issued nonrecourse debt principally associated with our Legacy Assets.
An allowance for loan losses is established by recording a provision for loan losses in the Consolidated Statement of Income and Comprehensive Income when management believes a loss is probable on a loan held for investment. When management determines that a loan held for investment is partially or fully uncollectible, the loss is charged against the allowance for loan losses. Recoveries on losses previously charged to the allowance are credited to the allowance at the time the recovery is collected.
Mortgage loans held for investment, net as of the dates indicated include: 
 
 
September 30, 2014
 
December 31, 2013
Mortgage loans held for investment, net – unpaid principal balance
 
$
283,115

 
$
305,085

Transfer discount:
 

 

Accretable
 
(16,025
)
 
(17,362
)
Non-accretable
 
(68,109
)
 
(74,529
)
Allowance for loan losses
 
(3,549
)
 
(2,144
)
Total mortgage loans held for investment, net
 
$
195,432

 
$
211,050



The changes in accretable yield on loans transferred to mortgage loans held for investment, net were as follows: 

 
For the nine months ended September 30, 2014
 
Year ended December 31, 2013
Accretable Yield
 
 
 
Balance at the beginning of the period
$
17,362

 
$
19,749

Accretion
(2,258
)
 
(3,235
)
Reclassifications from (to) nonaccretable discount
921

 
848

Balance at the end of the period
$
16,025

 
$
17,362


Nationstar may periodically modify the terms of any outstanding mortgage loans held for investment, net for loans that are either in default or in imminent default. Modifications often involve reduced payments by borrowers, modification of the original terms of the mortgage loans, forgiveness of debt and/or modified servicing advances. As a result of the volume of modification agreements entered into, the estimated average outstanding life in this pool of mortgage loans has been extended. Nationstar records interest income on the transferred loans on a level-yield method. To maintain a level-yield on these transferred loans over the estimated extended life, Nationstar reclassified approximately $0.9 million of transfer discount to accretable yield for the nine months ended September 30, 2014 and $0.8 million for the year ended December 31, 2013. Furthermore, Nationstar considers the decrease in principal, interest, and other cash flows expected to be collected arising from the transferred loans as an impairment.

Delinquency status and loan-to-value ratio (LTV) are common credit quality indicators that Nationstar monitors and utilizes in its evaluation of the adequacy of the allowance for loan losses, of which the primary indicator of credit quality is delinquency status. Loan delinquencies and unpaid principal balances are updated based upon collection activity. Collateral values are updated from third-party providers on a periodic basis. The collateral values used to derive the LTVs are obtained at various dates, but the majority are within the last twenty-four months. For an event requiring a decision based at least in part on the collateral value, Nationstar takes its last known value provided by a third party and then adjusts the value based on the applicable home price index.
Reverse mortgage interests
Reverse mortgage interests include advances, recoverable upon the sale of the subject property, and defaulted advances that can be securitized and sold. As of September 30, 2014 and December 31, 2013, Nationstar had $2.0 billion and $1.4 billion, respectively, in outstanding reverse mortgage interests.When Nationstar determines that a loss on the advance balance is probable and that the carrying balance may be partially or fully uncollectible, an allowance for loan loss is established by recording a provision for loan losses in the consolidated statement of income and comprehensive income.
Reverse mortgage interests as of the dates indicated include:

 
September 30, 2014
 
December 31, 2013
UPB of advances previously securitized by Nationstar
$
1,296,420

 
$
1,039,645

UPB of advances not securitized
661,962

 
395,663

Allowance for losses - reverse mortgage interests
(1,430
)
 
(802
)
Total reverse mortgage interests
$
1,956,952

 
$
1,434,506

Nationstar collectively evaluates all reverse mortgage interest assets for impairment.
Mortgage Servicing Rights (MSRs)
Mortgage Servicing Rights (MSRs)
Mortgage Servicing Rights
MSRs at fair value

MSRs arise from contractual agreements between Nationstar and investors in mortgage securities and mortgage loans. Nationstar records MSR assets when it sells loans on a servicing-retained basis, at the time of a securitization that qualifies and meets requirements for sale accounting or through the acquisition or assumption of the right to service a financial asset. Under these contracts, Nationstar performs loan servicing functions in exchange for fees and other remuneration. Nationstar has elected to record these MSRs at fair value.

The fair value of the MSRs is based upon the present value of the expected future cash flows related to servicing these loans. Nationstar receives a base servicing fee ranging from 0.25% to 0.50% annually on the remaining outstanding principal balances of the loans. The servicing fees are collected from investors. Nationstar determines the fair value of the MSRs by the use of a cash flow model that incorporates prepayment speeds, delinquencies, discount rate, ancillary fees and other assumptions (including servicing costs) that management believes are consistent with the assumptions other major market participants use in valuing the MSRs. The nature of the forward loans underlying the MSRs affects the assumptions used in the cash flow model. Nationstar obtains third-party valuation for boarded MSRs to assess the reasonableness of the fair value calculated by the cash flow model.

Most of the forward loans underlying the MSRs carried at fair value that are owned by Nationstar are credit sensitive in nature and the value of these MSRs are more likely to be affected by changes in credit losses than by interest rate movement. The remaining forward loans underlying Nationstar’s MSRs held at fair value are prime agency and government conforming residential mortgage loans for which the value of these MSRs are more likely to be affected by interest rate movement than changes in credit losses.
Nationstar used the following weighted average assumptions in estimating the fair value of MSRs for the dates indicated:
 
Credit Sensitive MSRs
September 30, 2014
 
December 31, 2013
Discount rate
12.15
%
 
14.17
%
Total prepayment speeds
17.24
%
 
20.34
%
Expected weighted-average life
5.59 years

 
4.63 years

Credit losses
7.35
%
 
22.87
%
Interest Rate Sensitive MSRs
September 30, 2014
 
December 31, 2013
Discount rate
9.60
%
 
10.50
%
Total prepayment speeds
9.77
%
 
8.97
%
Expected weighted-average life
7.01 years

 
7.88 years

Credit losses
2.22
%
 
9.12
%


Changes in assumptions used to estimate the fair value of MSRs reflect changes in our view of market conditions affecting MSR values as well as changes based on the performance in the underlying pools of loans.

Discount rates were reduced to reflect increasing market trading multiples. Prepayment speed on interest sensitive loans increased due to a decline in mortgage interest rates over the period.

Reduced prepayment speeds in credit sensitive loans along with improved credit losses in both credit and interest sensitive pools are driven by lower overall actual prepayments as well as a higher proportion of voluntary versus involuntary prepayments.

The activity of MSRs carried at fair value is as follows for the dates indicated: 
 
For the nine months ended
September 30, 2014
 
For the year ended
December 31, 2013
Fair value at the beginning of the period
$
2,488,283

 
$
635,860

Additions:
 
 
 
Servicing resulting from transfers of financial assets
185,822

 
248,381

Purchases of servicing assets
353,450

 
1,545,584

Changes in fair value:
 
 
 
Due to changes in valuation inputs or assumptions used in the valuation model
49,779

 
355,586

Other changes in fair value
(179,125
)
 
(297,128
)
Fair value at the end of the period
$
2,898,209

 
$
2,488,283

UPB of forward loans serviced for others
 
 
 
Credit sensitive loans
$
242,991,593

 
$
266,757,777

Interest sensitive loans
75,980,389

 
56,056,362

Total owned loans
$
318,971,982

 
$
322,814,139



The $49.8 million in changes in fair value due to valuation inputs or assumptions for the nine months ended September 30, 2014 includes $64.6 million in scheduled principal payments.

The following table shows the hypothetical effect on the fair value of the MSRs using various unfavorable variations of the expected levels of certain key assumptions used in valuing these assets at September 30, 2014 and December 31, 2013:
 
Discount Rate
 
Total Prepayment
Speeds
 
Credit Losses
 
100 bps
Adverse
Change
200 bps
Adverse
Change
 
10%
Adverse
Change
20%
Adverse
Change
 
10%
Adverse
Change
20%
Adverse
Change
September 30, 2014
 
 
 
 
 
 
 
 
 Mortgage servicing rights
$
(109,213
)
$
(205,224
)
 
$
(107,917
)
$
(206,835
)
 
$
(37,922
)
$
(75,760
)
December 31, 2013
 
 
 
 
 
 
 
 
 Mortgage servicing rights
$
(74,681
)
$
(151,899
)
 
$
(101,590
)
$
(195,445
)
 
$
(89,958
)
$
(178,669
)


These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a 10% variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors (i.e., a decrease in total prepayment speeds may result in an increase in credit losses), which could impact the above hypothetical effects.
MSRs at amortized cost
Additionally, Nationstar owns servicing rights for reverse mortgage loans. For this class of servicing rights, Nationstar applies the amortization method (e.g., lower of cost or market) with the capitalized cost of the MSRs amortized in proportion and over the period of the estimated net future servicing income and recognized as an adjustment to servicing fee income. The expected period of the estimated net servicing income is based, in part, on the expected prepayment period of the underlying reverse mortgages. This class of MSRs is periodically evaluated for impairment. For purposes of measuring impairment, MSRs are stratified based on predominant risk characteristics of the underlying serviced loans. These risk characteristics include loan type (fixed or adjustable rate), term and interest rate. Impairment, if any, represents the excess of amortized cost of an individual stratum over its estimated fair value and is recognized through a valuation allowance.
Nationstar owns the right to service certain reverse mortgage MSRs with an unpaid principal balance of $28.4 billion and $28.9 billion as of September 30, 2014 and December 31, 2013. Nationstar utilizes a variety of assumptions in assessing the fair value of its servicing assets or liabilities, with the primary assumptions including discount rates, prepayment speeds, home price index, collateral values and the expected weighted average life. At September 30, 2014 and December 31, 2013, no impairment was identified. Interest and servicing fees collected on reverse mortgage interests are included as a component of either interest or service fee income based on whether Nationstar acquired the related borrower draws from a predecessor servicer or funded borrower draws under its obligation to service the related HECMs subsequent to the acquisition of the rights to service these loans.

The activity of MSRs carried at amortized cost is as follows for the dates indicated:
 
 
For the nine months ended
 
For the year ended
 
September 30, 2014
 
December 31, 2013
 
Assets
 
Liabilities
 
Assets
 
Liabilities
Activity of MSRs at amortized cost
 
 
 
 
 
 
 
Balance at the beginning of the period
$
14,879

 
$
82,521

 
$
10,973

 
$
83,238

Additions:
 
 
 
 
 
 
 
Purchase /Assumptions of servicing rights/obligations
—

 
—

 
3,980

 
—

Deductions:
 
 
 
 
 
 
 
Amortization/Accretion
(2,448
)
 
(3,567
)
 
(74
)
 
(717
)
Balance at end of the period
$
12,431

 
$
78,954

 
$
14,879

 
$
82,521

Fair value at end of period
$
35,475

 
$
61,853

 
$
29,192

 
$
63,996


Subserviced loans
Nationstar also subservices loans on behalf of owners of MSRs or loans for a fee. Nationstar has no recorded value for its subservicing arrangements. At September 30, 2014 and December 31, 2013, the unpaid balances under subservicing arrangements and rights to service certain foreclosed loans were $20.4 billion and $35.4 billion, respectively.
Other Assets
Other Assets
Other Assets
Other assets consisted of the following:
 
 
September 30, 2014
 
December 31, 2013
Loans subject to repurchase right from Ginnie Mae
$
83,547

 
$
120,736

Goodwill
54,701

 
38,820

Real estate owned (REO), net
53,264

 
45,632

Deferred financing costs
48,949

 
73,030

Intangible assets
20,187

 
21,737

Prepaid expenses
9,942

 
21,993

Collateral deposits on derivative instruments
5,487

 
25,932

Receivables from affiliates
5,479

 
8,861

Other
1,294

 
3,656

Total other assets
$
282,850

 
$
360,397


For certain loans that Nationstar sold to Ginnie Mae, Nationstar as the issuer has the unilateral right to repurchase, without Ginnie Mae’s prior authorization, any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. Once Nationstar has the unilateral right to repurchase a delinquent loan, Nationstar has effectively regained control over the loan, and under GAAP, must re-recognize the loan on its consolidated balance sheets and establish a corresponding repurchase liability regardless of Nationstar’s intention to repurchase the loan. Nationstar’s re-recognized loans included in other assets and the corresponding liability in payables and accrued liabilities was $83.5 million at September 30, 2014 and $120.7 million at December 31, 2013.
In May 2014, Nationstar acquired Real Estate Digital, LLC (RED). In the initial purchase price allocations, Nationstar recorded $15.9 million in goodwill on its consolidated balance sheet.
Accounts Payable
Payables and Accrued Liabilities
Payables and Accrued Liabilities
Payables and accrued liabilities consist of the following:
 
September 30, 2014
 
December 31, 2013
Payables to servicing and subservicing investors(1)
$
314,864

 
$
359,214

Payables to insurance carriers and insurance cancellation reserves
159,351

 
164,244

Taxes
100,190

 
35,961

Loans subject to repurchase from Ginnie Mae
83,547

 
120,736

MSR purchases payable including advances
65,374

 
135,759

Accrued interest
64,559

 
76,303

Accrued bonus and payroll
62,023

 
66,755

Repurchase reserves
48,252

 
40,695

Other(2)
446,735

 
308,783

Total payables and accrued liabilities
$
1,344,895

 
$
1,308,450



(1) Payables to servicing and subservicing investors represents amounts due to investors in connection with loans serviced and that are paid from collections of the underlying loans, insurance proceeds or at time of property disposal.

(2) Other payables primarily consist of accrued legal and professional fees, capital lease obligations and amounts payable to
securitization trusts.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments
Derivatives instruments utilized by Nationstar primarily include interest rate lock commitments (IRLCs), Loan Purchase Commitments (LPCs), Forward MBS trades and interest rate swap agreements.
Nationstar enters into IRLCs with prospective borrowers. These commitments are carried at fair value in accordance with ASC 815, Derivatives and Hedging. ASC 815 clarifies that the expected net future cash flows related to the associated servicing of a loan should be included in the measurement of all written loan commitments that are accounted for at fair value through earnings. The estimated fair values of IRLCs are based on the fair value of the related mortgage loans which is based on observable market data and is recorded in derivative financial instruments within the consolidated balance sheets. Nationstar adjusts the outstanding IRLCs with prospective borrowers based on an expectation that it will be exercised and the loan will be funded. The initial and subsequent changes in the value of IRLCs are a component of gain on mortgage loans held for sale.
Nationstar actively manages the risk profiles of its IRLCs and mortgage loans held for sale on a daily basis. To manage the price risk associated with IRLCs, Nationstar enters into forward sales of MBS in an amount equal to the portion of the IRLC expected to close, assuming no change in mortgage interest rates. In addition, to manage the interest rate risk associated with mortgage loans held for sale, Nationstar enters into forward sale commitments to deliver mortgage loan inventory to investors. The estimated fair values of forward sales of MBS and forward sale commitments are based on exchange prices or the dealer market price and are recorded as a component of derivative financial instruments and mortgage loans held for sale, respectively, in the consolidated balance sheets. The initial and subsequent changes in value on forward sales of MBS and forward sale commitments are a component of gain on mortgage loans held for sale.
Nationstar may occasionally enter into contracts with other mortgage lenders to purchase residential mortgage loans at a future date, which are referred to as LPCs. LPCs are accounted for as derivatives under ASC 815 and recorded at fair value in derivative financial instruments on Nationstar's consolidated balance sheet. Subsequent changes in LPCs are recorded as a charge or credit to gain on mortgage loans held for sale.
Periodically, Nationstar has entered into interest rate swap agreements to hedge the interest payment on the warehouse debt and securitization of its mortgage loans held for sale. These interest rate swap agreements generally require Nationstar to pay a fixed interest rate and receive a variable interest rate based on LIBOR. Unless designated as an accounting hedge, Nationstar records gains and losses on interest rate swaps as a component of gain/(loss) on interest rate swaps and caps in Nationstar’s consolidated statements of income and comprehensive income. Unrealized losses on undesignated interest rate derivatives are separately disclosed under operating activities in the consolidated statements of cash flows. Interest rate swaps designated as cash flow hedges under ASC 815 are recorded at fair value on the Company’s consolidated balance sheet, with any changes in fair value related to the effective portion of the hedge being recorded as an adjustment to other comprehensive income and subsequently recognized in interest expense in the same period the hedged forecast transaction affects earnings. To qualify as a cash flow hedge, the hedge must be highly effective at reducing the risk associated with the exposure being hedged and must be formally designated at hedge inception. Nationstar considers a hedge to be highly effective if the change in fair value of the derivative hedging instrument is within 80% to 125% of the change in the fair value of the hedged item attributable to the hedged risk. Ineffective portions of the cash flow hedge are reflected in earnings as they occur as a component of interest expense. There are no designated accounting hedges outstanding as of September 30, 2014.

Associated with the Company's derivatives is $5.5 million and $25.9 million in collateral deposits on derivative instruments recorded in other assets on the Company's balance sheets as of September 30, 2014 and December 31, 2013, respectively. The Company does not offset fair value amounts recognized for derivative instruments and the amounts collected and/or deposited on derivative instruments in its consolidated balance sheets.
The following tables provide the outstanding notional balances and fair values of outstanding positions for the dates indicated, and recorded gains/(losses) during the periods indicated:
 
 
Expiration
Dates
 
Outstanding
Notional
 
Fair
Value
 
Recorded
Gains /
(Losses)
For the nine months ended September 30, 2014
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
MORTGAGE LOANS HELD FOR SALE
 
 
 
 
 
 
 
Loan sale commitments
2014
 
$
13,933

 
$
609

 
$
602

DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2014
 
2,388,232

 
83,446

 
(3,682
)
Forward MBS trades
2014
 
1,101,888

 
1,488

 
(30,778
)
LPCs
2014
 
274,716

 
2,050

 
1,257

Interest rate swaps and caps
2018
 
147,600

 
1,349

 
2,157

LIABILITIES
 
 
 
 
 
 
 
DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2014
 
867

 
3

 
2,695

Interest rate swaps on ABS debt
2014 - 2017
 
249,704

 
183

 
651

       Forward MBS trades
2014
 
2,424,775

 
8,415

 
(5,110
)
LPCs
2014
 
76,385

 
1,020

 
669

 
 
 
 
 
 
 
 
For the year ended December 31, 2013
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
MORTGAGE LOANS HELD FOR SALE
 
 
 
 
 
 
 
Loan sale commitments
2014
 
$
57,965

 
$
7

 
$
(14
)
DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2014
 
3,083,131

 
87,128

 
(69,856
)
Forward MBS trades
2014
 
5,425,663

 
32,266

 
19,084

LPCs
2014
 
197,475

 
793

 
(460
)
Interest rate swaps and caps
2018
 
167,000

 
3,691

 
544

LIABILITIES
 
 
 
 
 
 
 
DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2014
 
260,407

 
2,698

 
(1,613
)
Interest rate swaps and caps (1) 

 
—

 
—

 
1,576

Interest rate swaps on ABS debt
2014-2017
 
424,269

 
834

 
1,012

Forward MBS trades
2014
 
1,351,870

 
3,305

 
8,713

LPCs
2014
 
204,486

 
1,689

 
(1,603
)
 
(1)
In January and June 2013, Nationstar terminated these interest rate swaps.
Indebtedness
Indebtedness
Indebtedness
Notes Payable
A summary of the balances of notes payable for the dates indicated is presented below.
 
 
 
 
 
 
 
 
 
September 30, 2014
 
December 31, 2013
 
Interest Rate
 
Maturity Date
 
Collateral
 
Capacity Amount
 
Outstanding
 
Collateral Pledged
 
Outstanding
 
Collateral pledged
Servicing Segment Notes Payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MBS advance financing facility
LIBOR+2.50% to 4.00%
 
March 2015
 
Servicing advance receivables
 
$
775,000

 
$
455,629

 
$
514,841

 
$
560,814

 
$
651,953

Securities repurchase facility (2011)
LIBOR +3.50%
 
90 day revolving
 
Nonrecourse debt - Legacy Assets
 
—

 
34,613

 
55,603

 
35,546

 
55,603

Nationstar agency advance financing facility (1)
LIBOR+1.20% to 3.75%
 
October 2015
 
Servicing advance receivables
 
1,100,000

 
603,354

 
718,970

 
851,957

 
918,574

Reverse participations financing facility
LIBOR+4.00%
 
June 2014(7)
 
Reverse mortgage loans (2)
 
150,000

 
—

 
—

 
102,031

 
124,536

MBS advance financing facility (2012)
LIBOR+5.00%
 
April 2015
 
Servicing advance receivables
 
50,000

 
39,654

 
47,467

 
179,306

 
220,833

Nationstar Mortgage Advance Receivable
Trust (3)
LIBOR+1.15% to 5.30%
 
June 2014 (4) June 2016 (6) June 2018
 
Servicing advance receivables
 
475,000

 
399,846

 
450,345

 
1,240,940

 
1,347,410

MBS servicer advance facility (2014)
LIBOR + 3.50%
 
July 2015
 
Servicing advance receivables
 
80,000

 
68,123

 
92,165

 
—

 
—

Nationstar Servicer Advance Receivables Trust 2013 - BA (5)
LIBOR+2.50%
 
June 2014
 
Servicing advance receivables
 
1,000,000

 
—

 
—

 
1,579,830

 
1,764,296

 
 
1,601,219


1,879,391

 
4,550,424

 
5,083,205

 
 
 
September 30, 2014
 
December 31, 2013
 
Interest Rate
 
Maturity Date
 
Collateral
 
Capacity Amount
 
Outstanding
 
Collateral Pledged
 
Outstanding
 
Collateral pledged
Originations Segment Notes Payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$1.5 billion warehouse facility
LIBOR+2.00% to 2.875%
 
October 2015
 
Mortgage loans or MBS
 
$
1,500,000

 
$
698,300

 
$
793,342

 
$
797,281

 
$
891,648

$750 million warehouse facility
LIBOR+1.75% to 2.50%
 
April 2015
 
Mortgage loans or MBS
 
750,000

 
428,970

 
447,121

 
639,378

 
673,599

$500 million warehouse facility
LIBOR+1.75% to 2.75%
 
September 2015
 
Mortgage loans or MBS
 
500,000

 
253,713

 
260,443

 
111,980

 
115,629

$500 million warehouse facility
LIBOR+0.75% to 3.50%
 
June 2015
 
Mortgage loans or MBS
 
500,000

 
197,067

 
209,060

 
214,570

 
224,162

$500 million warehouse facility
LIBOR+ 1.50% to 2.25%
 
June 2015
 
Mortgage loans or MBS
 
500,000

 
226,249

 
231,696

 
447,926

 
477,980

$300 million warehouse facility
LIBOR +2.50%
 
September 2014(8)
 
Mortgage loans or MBS
 
300,000

 
—

 
—

 
159,435

 
166,482

$200 million warehouse facility
LIBOR+2.75%
 
February 2015
 
Mortgage loans or MBS
 
200,000

 
87,145

 
103,804

 
63,357

 
93,098

$75 million warehouse facility (HCM) (9)
LIBOR+ 2.25% to 2.875%
 
October 2015
 
Mortgage loans or MBS
 
75,000

 
40,080

 
41,786

 
—

 
—

ASAP+ facility
LIBOR+1.50%
 
Up to 45 days
 
GSE mortgage loans or GSE MBS
 
—

 
—

 
—

 
—

 
—

 
 
 

 
 
 
 
 
1,931,524

 
2,087,252

 
2,433,927

 
2,642,598

 
 
 
 
 
 
 
 
 
$
3,532,743

 
$
3,966,643

 
$
6,984,351

 
$
7,725,803


(1) This facility has both variable funding notes (VFN) and term notes. Nationstar issued $300.0 million in term notes to institutional investors. The notes have a weighted average interest rate of 1.46% and a weighted average term of 3 years.
(2) This facility is partially secured by reverse mortgage loans and partially unsecured.
(3) This facility has both VFNs and term notes. Nationstar issued $1.0 billion of term notes to institutional investors of which $300.0 million remains outstanding. The notes have an average interest rate of 1.51% and mature in June 2018.
(4) The notes that were scheduled to mature in June 2014 were redeemed in January 2014.
(5) Nationstar terminated this advance receivable facility in May 2014 at which time all outstanding balances had been repaid.
(6) The notes that were scheduled to mature in June 2016 were redeemed in June 2014.
(7) This facility expired in June 2014 and was not renewed.
(8) This facility expired in September 2014 and was not renewed.
(9) This facility is a sublimit of the $1.5 billion facility specific to HCM.
Unsecured Senior Notes
A summary of the balances of unsecured senior notes is presented below:
 
September 30, 2014
 
December 31, 2013
$285 million face value, 10.875% interest rate payable semi-annually, due April 2015(1)
$
—

 
$
283,153

$475 million face value, 6.500% interest rate payable semi-annually, due August 2018
475,000

 
475,000

$375 million face value, 9.625% interest rate payable semi-annually, due May 2019
378,756

 
379,360

$400 million face value, 7.875% interest rate payable semi-annually, due October 2020
400,565

 
400,634

$600 million face value, 6.500% interest rate payable semi-annually, due July 2021
605,330

 
605,915

$300 million face value, 6.500% interest rate payable semi-annually, due June 2022
300,000

 
300,000

Total
$
2,159,651

 
$
2,444,062


(1) Nationstar redeemed all of its outstanding 10.875% Senior Notes due 2015 on July 25, 2014 (the Redemption Date) at a redemption price of 100% of the principal amount of the notes, plus accrued and unpaid interest on the notes redeemed to, but not including, the Redemption Date. Deferred debt issuance costs of $3.4 million were written off in connection with this redemption.
The indentures for the unsecured senior notes contain various covenants and restrictions that limit Nationstar's, or certain of its subsidiaries', ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all of their assets, or enter into certain transactions with affiliates. The indentures contain certain events of default, including (subject, in some cases, to customary cure periods and materiality thresholds) defaults based on (i) the failure to make payments under the indenture when due, (ii) breach of covenants, (iii) cross-defaults to certain other indebtedness, (iv) certain bankruptcy or insolvency events, (v) material judgments and (vi) invalidity of material guarantees.

The indentures for the unsecured senior notes provide that Nationstar may redeem all or a portion of the notes prior to certain fixed dates by paying a make-whole premium plus accrued and unpaid interest and additional interest, if any, to the redemption dates. In addition, Nationstar may redeem all or a portion of the senior notes at any time on or after certain fixed dates at the applicable redemption prices set forth in the indentures plus accrued and unpaid interest and additional interest, if any, to the redemption dates.

Additionally, the indentures provide that on or before certain fixed dates, Nationstar may redeem up to 35% of the aggregate principal amount of the senior notes with the net proceeds of certain equity offerings at fixed redemption prices, plus accrued and unpaid interest and additional interest, if any, to the redemption dates, subject to compliance with certain conditions.
The ratios included in the indentures for the senior notes are incurrence-based compared to the customary ratio covenants that are often found in credit agreements that require a company to maintain a certain ratio.
As of September 30, 2014, the expected maturities of Nationstar's unsecured senior notes based on contractual maturities are as follows:
Year
Amount
2014
$
—

2015
—

2016
—

2017
—

2018
475,000

Thereafter
1,675,000

Total
$
2,150,000


Other Nonrecourse Debt
A summary of the balances of other nonrecourse debt is presented below:
 
September 30, 2014
 
December 31, 2013
Nonrecourse debt - Legacy Assets
$
78,481

 
$
89,107

Excess spread financing - fair value
1,062,544

 
986,410

Participating interest financing
1,367,382

 
1,103,490

Mortgage servicing rights financing liabilities
44,449

 
29,874

Total
$
2,552,856

 
$
2,208,881


Nonrecourse Debt–Legacy Assets
In November 2009, Nationstar completed the securitization of approximately $222.0 million of ABS, which was accounted for as a secured borrowing. This structure resulted in Nationstar carrying the securitized loans as mortgages on Nationstar’s consolidated balance sheet and recognizing the asset-backed certificates acquired by third parties as nonrecourse debt, totaling approximately $78.5 million and $89.1 million at September 30, 2014, and December 31, 2013, respectively. The principal and interest on these notes are paid using the cash flows from the underlying mortgage loans, which serve as collateral for the debt. The interest rate paid on the outstanding securities is 7.50%, which is subject to an available funds cap. The total outstanding principal balance on the underlying mortgage loans serving as collateral for the debt was approximately $274.0 million and $302.0 million at September 30, 2014 and December 31, 2013, respectively. Accordingly, the timing of the principal payments on this nonrecourse debt is dependent on the payments received on the underlying mortgage loans. The unpaid principal balance on the outstanding notes was $91.3 million and $103.6 million at September 30, 2014 and December 31, 2013, respectively.
Excess Spread Financing Debt at Fair Value
In conjunction with Nationstar's acquisition of certain MSRs on various pools of residential mortgage loans (the Portfolios), Nationstar has entered into sale and assignment agreements with certain entities formed by New Residential Investment Corp. (New Residential) in which New Residential and/or certain funds managed by Fortress own an interest. Nationstar, in transactions accounted for as financing arrangements, sold to such entities the right to receive a specified percentage of the excess cash flow generated from the Portfolios after receipt of a fixed basic servicing fee per loan. Nationstar has elected fair value accounting for these financing agreements.
Nationstar retains all ancillary income associated with servicing the Portfolios and the remaining portion of the excess cash flow after receipt of a fixed basic servicing fee. Nationstar continues to be the servicer of the Portfolios and provides all servicing and advancing functions. New Residential has no prior or ongoing obligations associated with the Portfolios.
Contemporaneous with the above, Nationstar entered into refinanced loan agreements with New Residential. Should Nationstar refinance any loan in the Portfolios, subject to certain limitations, Nationstar can be required to transfer the new loan or a replacement loan of similar economic characteristics into the Portfolios. The new or replacement loan will be governed by the same terms set forth in the sale and assignment agreement described above.

The following table shows the hypothetical effect on fair value of excess spread financing using various unfavorable variations of the expected levels of certain key assumptions used in valuing these liabilities at the dates indicated:

 
Discount Rate
 
Total Prepayment
Speeds
 
Credit Losses
 
100 bps
Adverse
Change
200 bps
Adverse
Change
 
10%
Adverse
Change
20%
Adverse
Change
 
10%
Adverse
Change
20%
Adverse
Change
September 30, 2014
 
 
 
 
 
 
 
 
Excess spread financing
$
38,897

$
79,644

 
$
34,979

$
73,083

 
$
3,066

$
7,665

December 31, 2013
 
 
 
 
 
 
 
 
 Excess spread financing
$
33,156

$
68,636

 
$
26,492

$
53,753

 
$
29,219

$
42,611


As the fair value on the outstanding excess spread financing is linked to the future economic performance of certain MSRs, any adverse changes in the MSRs would inherently benefit the net carrying amount of the excess spread financing, while any beneficial changes in certain key assumptions used in valuing the MSRs would negatively impact the net carrying amount of the excess spread financing.
These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a 10% variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors (e.g., a decrease in total prepayment speeds may result in an increase in credit losses), which could impact the above hypothetical effects. Also, a positive change in the above assumptions would not necessarily correlate with the corresponding decrease in the net carrying amount of the excess spread financing.
Participating Interest Financing
Participating interest financing represents the issuance of pools of Home Equity Conversion Mortgage Backed Securities (HMBS) to third-party security holders which are guaranteed by certain GSEs. Nationstar has accounted for the transfer of these advances in the related Home Equity Conversion Mortgages (HECM) loans as secured borrowings, retaining the initial reverse mortgage interests on its consolidated balance sheet, and recording the pooled HMBS as participating interest financing liabilities on the Company’s consolidated balance sheet. Monthly cash flows generated from the HECM loans are used to service the HMBS. The interest rate is based on the underlying HMBS rate with a range of 0.14% to 6.98%. The participating interest financing was $1,367.4 million and $1,103.5 million at September 30, 2014 and December 31, 2013, respectively.
Mortgage Servicing Rights Financing Liabilities
Nationstar has entered into agreements to sell the basic fee component of certain MSRs and servicer advances under specified terms. Under the terms of these agreements, the transfer of servicing is contingent on the receipt of consents from various third parties. Until these required consents are obtained Nationstar continues to be the named servicer and, for accounting purposes, ownership of the mortgage servicing rights continues to reside with Nationstar. Nationstar continues to account for the MSRs on its consolidated balance sheets. In addition, Nationstar records a MSRs financing liability associated with this financing transaction. See Note 17 - Disclosures Related to Transactions with Affiliates of Fortress Investment Group LLC.
Nationstar has elected to measure the mortgage servicing rights financings at fair value with all changes in fair value recorded as a charge or credit to servicing fee income in the consolidated statements of income and comprehensive income.
Financial Covenants

As of September 30, 2014, management believes Nationstar was in compliance with its financial covenants on its borrowing arrangements and credit facilities. These covenants generally relate to Nationstar's tangible net worth, liquidity reserves and leverage requirements.
Nationstar is required to maintain a minimum tangible net worth of at least $517.3 million as of each quarter-end related to its outstanding Master Repurchase Agreements on its outstanding repurchase facilities. As of September 30, 2014, Nationstar was in compliance with these minimum tangible net worth requirements.
Income Taxes
Income Taxes
Income Taxes

Income tax expense was as follows:

 
For the three months ended September 30,
 
For the nine months ended September 30,
2014
 
2013
 
2014
 
2013
Tax Expense
$
(1,700
)
 
$
50,187

 
$
52,242

 
$
164,233

 
 
 
 
 
 
 
 
Effective tax rate
1.6
%
 
38.0
%
 
20.6
%
 
38.0
%

The primary reason for the significant variation in the expected tax rate and the actual tax rate was the partial release of the deferred tax valuation allowance that was recorded against the Company’s loss carryforwards. Excluding the release of the valuation allowance, the Company’s effective tax rate would have been 38.8% for the three months ended September 30, 2014 and 38.0% for the nine months ended September 30, 2014.
The Company had a net deferred tax liability of $116.0 million at September 30, 2014 and $102.7 million at December 31, 2013. A valuation allowance of $6.4 million and $46.7 million was recorded against deferred tax assets at September 30, 2014 and December 31, 2013, respectively, as management believes that it is more likely than not that not all of the deferred tax assets will be realized.

The Company has federal net operating loss carryforwards (NOL) of approximately $199.4 million that will begin to expire in 2027, if unused. The Company also has state NOLs that will begin to expire in 2014 if unused. The amount of the state NOLs varies by state based on whether the NOL is derived from the pre-apportioned Federal NOL or calculated based on the apportioned Federal NOL. The Company also has net capital loss carryforwards of approximately $15.9 million that begin to expire in 2015. The Federal NOL is limited under Sections 382 and 383 of the Internal Revenue Code as a result of a reorganization that occurred in advance of the Company’s initial public offering. The annual limitation is approximately $11 million.

The Company regularly reviews the carrying amount of its deferred tax assets to determine if a valuation allowance is necessary. If based on the available evidence, it is more likely than not that all or a portion of the Company's deferred tax assets will not be realized in future periods, a valuation allowance is established. Management considers all available evidence, both positive and negative, in evaluating the need for a valuation allowance. Significant judgment is required in assessing future earnings trends and the timing of reversals of temporary differences. The Company's evaluation is based on current tax laws as well as management's expectations of future performance. At the date of the Company’s initial public offering, the Company was in a three year cumulative loss and the Company concluded it was not more likely than not that the net operating loss would be used.

The Company has generated significant pretax income over the past three years and has increased the size of its servicing portfolio to $347.3 billion as of September 30, 2014 from $159.2 billion as of December 31, 2012. Management is forecasting sufficient earnings for the coming year and the foreseeable future due to the increased servicing portfolio along with a profitable originations platform and a growing mortgage services business. Accordingly, management believes that, while the Company’s NOL is limited by Section 382 of the Internal Revenue Code, the amount of earnings needed in each year to fully utilize the allowable limitation are more likely than not to occur given the three year earnings history and
management’s current projections.
The Company has not released the $5.6 million valuation allowance recorded against the capital loss carryforward because management does not believe it is more likely than not that the Company will generate sufficient capital gains to utilize the loss carryforward prior to expiration. Additionally, the Company has not released the $0.5 million valuation allowance recorded against the portion of the Federal NOL carryforward and the $0.3 million valuation allowance recorded against the State NOL carryforward that are expected to expire unutilized. Accordingly, a valuation allowance of $6.4 million remains as of September 30, 2014.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
ASC 820, Fair Value Measurements and Disclosures (ASC 820), provides a definition of fair value, establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements. The standard applies when GAAP requires or allows assets or liabilities to be measured at fair value, but does not expand the use of fair value in any new circumstance.
ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered fair value hierarchy based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs). In addition, ASC 820 requires an entity to consider all aspects of nonperformance risk, including its own credit standing, when measuring the fair value of a liability. Under ASC 820, related disclosures are segregated for assets and liabilities measured at fair value based on the level used within the hierarchy to determine their fair values.
The following describes the methods and assumptions used by Nationstar in estimating fair values:
Cash and Cash Equivalents, Restricted Cash – The carrying amount reported in the consolidated balance sheets approximates fair value. Cash, cash equivalents, and restricted cash are classified as Level 1 in the fair value disclosures.
Mortgage Loans Held for Sale – Nationstar originates mortgage loans in the U.S. that it intends to sell to Fannie Mae, Freddie Mac, and Ginnie Mae (collectively, the Agencies). Additionally, Nationstar holds mortgage loans that it intends to sell into the secondary markets via whole loan sales or securitizations. Nationstar measures newly originated prime residential mortgage loans held for sale at fair value.
Mortgage loans held for sale are typically pooled together and sold into certain exit markets, depending upon underlying attributes of the loan, such as agency eligibility, product type, interest rate, and credit quality. Mortgage loans held for sale are valued using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. As these prices are derived from market prices, Nationstar classifies these valuations as Level 2 in the fair value disclosures.

The Company may acquire mortgage loans held for sale from various securitization trusts for which it acts as servicer through the exercise of various clean-up call options as permitted through the respective pooling and servicing agreements. The Company has elected to account for these loans at the lower of cost or market. Nationstar classifies these valuations as Level 2 in the fair value disclosures.

Nationstar may also purchase loans out of a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. These purchased loans are accounted for at fair value, and Nationstar classifies these valuations as Level 2 in the fair value disclosures.
Mortgage Loans Held for Investment, net – Nationstar determines the fair value of loans held for investment using internally developed valuation models. These valuation models estimate the exit price Nationstar expects to receive in the loan’s principal market. Although Nationstar utilizes and gives priority to observable market inputs such as interest rates and market spreads within these models, Nationstar typically is required to utilize internal inputs, such as prepayment speeds, credit losses, and discount rates. These internal inputs require the use of judgment by Nationstar and can have a significant impact on the determination of the loan’s fair value. As these prices are derived from a combination of internally developed valuation models and quoted market prices, Nationstar classifies these valuations as Level 3 in the fair value disclosures.
Mortgage Servicing Rights – Fair Value – Nationstar estimates the fair value of its forward MSRs using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, discount rates, ancillary fees, credit losses and costs to service. These assumptions are generated and applied based on collateral stratifications including product type, remittance type, geography, delinquency and coupon dispersion. These assumptions require the use of judgment by Nationstar and can have a significant impact on the determination of the MSR’s fair value. Periodically, management obtains third party valuations on the portfolio to assess the reasonableness of the fair value calculations provided by the cash flow model. Because of the nature of the valuation inputs, Nationstar classifies these valuations as Level 3 in the fair value disclosures.
Reverse Mortgage Interests – Nationstar’s reverse mortgage interests consist of fees paid to taxing authorities for borrowers' unpaid taxes and insurance, and payments made to borrowers for line of credit draws on reverse mortgages. These advances include due and payable advances, which are recovered upon the foreclosure and sale of the subject property, and defaulted advances that can be securitized. These interests are carried at amortized cost less an allowance for loan loss in the consolidated financial statements. Nationstar estimates the fair value using a market approach by utilizing the fair value of securities backed by similar advances on reverse mortgage loans, adjusted for certain factors. Nationstar classifies these valuations as Level 3 in the fair value disclosures.

REO – Nationstar carries REO at fair value and determines the fair value of REO properties through the use of third-party appraisals and broker price opinions, adjusted for estimated selling costs. Such estimated selling costs include realtor fees and other anticipated closing costs. These values are adjusted to take into account factors that could cause the actual liquidation value of foreclosed properties to be different than the appraised values. This valuation adjustment is based upon Nationstar’s historical experience with REO. REO is classified as Level 3 in the fair value disclosures.
Derivative Financial Instruments – Nationstar enters into a variety of derivative financial instruments as part of its hedging strategy. The majority of these derivatives are exchange-traded or traded within highly active dealer markets. In order to determine the fair value of these instruments, Nationstar utilizes the exchange price or dealer market price for the particular derivative contract; therefore, these contracts are classified as Level 2. In addition, Nationstar enters into IRLCs and LPCs with prospective borrowers and other loan originators. These commitments are carried at fair value based on the fair value of related mortgage loans which are based on observable market data. Nationstar adjusts the outstanding IRLCs with prospective borrowers based on an expectation that it will be exercised and the loan will be funded. IRLCs and LPCs are recorded in derivative financial instruments in the consolidated balance sheets. These commitments are classified as Level 2 in the fair value disclosures.
Notes Payable – Notes payable consists of outstanding borrowings on Nationstar's warehouse and advance financing facilities. As the underlying warehouse and advance finance facilities bear interest at rates that are periodically adjusted based on a market index, the carrying amount reported on the consolidated balance sheet approximates fair value. Nationstar classifies these valuations as Level 3 in the fair value disclosures.
Unsecured Senior Notes – The fair value of unsecured senior notes, which are carried at amortized cost, is based on quoted market prices and is considered Level 1 from the market observable inputs used to determine fair value.
Nonrecourse Debt – Legacy Assets – Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. These prices are derived from a combination of internally developed valuation models and quoted market prices, and are classified as Level 3.
Excess Spread Financing – Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions at September 30, 2014 being mortgage prepayment speeds of 12.8%, average life of 5.7 years, recapture rates of 6.6% to 31.9%, and discount rate of 11.8%. Key assumptions at December 31, 2013, were mortgage prepayment speeds of 9.6%, average life of 4.7 years, recapture rates of 5.0% to 35.8%, and discount rate of 13.9%. Changes in fair value of the excess spread financing are recorded as a component of service fee income in Nationstar's consolidated statement of income and comprehensive income. As these prices are derived from a combination of internally developed valuation models and quoted market prices based on the value of the underlying MSRs, Nationstar classifies these valuations as Level 3 in the fair value disclosures.
The range of various assumptions used in Nationstar's valuation of excess spread financing were as follows:
Excess Spread financing
Prepayment Speeds
Average Life (years)
Discount Rate
Recapture Rate
September 30, 2014
 
 
 
 
Low
5.5%
3.9 years
9.0%
6.6%
High
19.3%
7.4 years
14.2%
31.9%
December 31, 2013
 
 
 
 
Low
4.0%
3.4 years
10.1%
5.0%
High
17.6%
5.7 years
20.0%
35.8%

A positive change in the above assumptions would not necessarily correlate with the corresponding decrease in the net carrying amount of the excess spread financing.
Mortgage Servicing Rights Financing - Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions at September 30, 2014 being advance financing rates of 2.72%, annual advance recovery rates of 24.60%, and working capital. Changes in fair value of the mortgage servicing rights financing liability are recorded as a component of service fee income in Nationstar’s consolidated statements of income and comprehensive income. As these prices are derived from a combination of internally developed valuation models and quoted market prices based on the value of the underlying MSRs, Nationstar classifies these valuations as Level 3 in the fair value disclosures.
Participating Interest Financing – Nationstar estimates the fair value using a market approach by utilizing the fair value of securities backed by similar participating interests in reverse mortgage loans. Nationstar classifies these valuations as Level 2 in the fair value disclosures.
The estimated carrying amount and fair value of Nationstar’s financial instruments and other assets and liabilities measured at fair value on a recurring basis is as follows for the dates indicated:
 
 
 
September 30, 2014
 
 
 
Recurring Fair Value Measurements
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
ASSETS
 
 
 
 
 
 
 
Mortgage loans held for sale(1)
$
1,695,502

 
$
—

 
$
1,695,502

 
$
—

Mortgage servicing rights
2,898,209

 
—

 
—

 
2,898,209

Other assets:
 
 
 
 
 
 
 
IRLCs
83,446

 
—

 
83,446

 
—

Forward MBS trades
1,488

 
—

 
1,488

 
—

LPCs
2,050

 
—

 
2,050

 
—

       Interest rate swaps and caps
1,349

 
—

 
1,349

 
—

Total assets
$
4,682,044

 
$
—

 
$
1,783,835

 
$
2,898,209

LIABILITIES
 
 
 
 
 
 
 
Derivative financial instruments
 
 
 
 
 
 
 
IRLCs
$
3

 
$
—

 
$
3

 
$
—

Interest rate swaps on ABS debt
183

 
—

 
183

 
—

       Forward MBS trades
8,415

 
—

 
8,415

 
—

       LPCs
1,020

 
—

 
1,020

 
—

Mortgage servicing rights financing
44,449

 
—

 
—

 
44,449

Excess spread financing (at fair value)
1,062,544

 
—

 
—

 
1,062,544

Total liabilities
$
1,116,614

 
$
—

 
$
9,621

 
$
1,106,993

 
 
 
December 31, 2013
 
 
 
Recurring Fair Value Measurements
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
ASSETS
 
 
 
 
 
 
 
Mortgage loans held for sale(1)
$
2,585,340

 
$
—

 
$
2,585,340

 
$
—

Mortgage servicing rights
2,488,283

 
—

 
—

 
2,488,283

Derivative financial instruments:

 

 

 

IRLCs
87,128

 
—

 
87,128

 
—

Forward MBS trades
32,266

 
—

 
32,266

 
—

LPCs
793

 
—

 
793

 
—

       Interest rate swaps and caps
3,691

 
—

 
3,691

 
—

Total assets
$
5,197,501

 
$
—

 
$
2,709,218

 
$
2,488,283

LIABILITIES
 
 
 
 
 
 
 
Derivative financial instruments
 
 
 
 
 
 
 
IRLCs
$
2,698

 
$
—

 
$
2,698

 
$
—

Interest rate swaps on ABS debt
834

 
—

 
834

 
—

Forward MBS trades
3,305

 
—

 
3,305

 
—

LPCs
1,689

 
—

 
1,689

 
—

Mortgage servicing rights financing
29,874

 
—

 
—

 
29,874

Excess spread financing (at fair value)
986,410

 
—

 
—

 
986,410

Total liabilities
$
1,024,810

 
$
—

 
$
8,526

 
$
1,016,284

(1) 
Based on the nature and risks of these assets, the Company has determined that presenting them as a single class is appropriate.
The table below presents a reconciliation for all of Nationstar’s Level 3 assets and liabilities measured at fair value on a recurring basis for the dates indicated:

 
 
ASSETS
 
LIABILITIES
For the three months ended September 30, 2014
 
Mortgage
servicing rights
 
Excess spread
financing
Mortgage Servicing Rights Financing
Beginning balance
 
$
2,678,134

 
$
1,036,038

$
33,452

Transfers into Level 3
 
—

 
—

—

Transfers out of Level 3
 
—

 
—

—

Total gains or losses
 
 
 
 
 
Included in earnings
 
(5,308
)
 
37,313

10,997

Included in other comprehensive income
 
—

 
—

—

Purchases, issuances, sales and settlements
 
 
 
 
 
Purchases
 
159,773

 
—

—

Issuances
 
65,610

 
39,833

—

Sales
 
—

 
—

—

Settlements
 
—

 
(50,640
)
—

Ending balance
 
$
2,898,209

 
$
1,062,544

$
44,449


 
 
ASSETS
 
LIABILITIES
For the nine months ended September 30, 2014
 
Mortgage
servicing rights
 
Excess spread
financing
Mortgage Servicing Rights Financing
Beginning balance
 
$
2,488,283

 
$
986,410

$
29,874

Transfers into Level 3
 
—

 
—

—

Transfers out of Level 3
 
—

 
—

—

Total gains or losses
 
 
 
 
 
Included in earnings
 
(129,346
)
 
61,080

(38,260
)
Included in other comprehensive income
 
—

 
—

—

Purchases, issuances, sales and settlements
 
 
 
 
 
Purchases
 
353,450

 
—

—

Issuances
 
185,822

 
150,951

52,835

Sales
 
—

 
—

—

Settlements
 
—

 
(135,897
)
—

Ending balance
 
$
2,898,209

 
$
1,062,544

$
44,449



 
 
ASSETS
 
LIABILITIES
For the year ended December 31, 2013
 
Mortgage
servicing rights
 
Excess spread
financing
Mortgage Servicing Rights Financing
Beginning balance
 
$
635,860

 
$
288,089

$
—

Transfers into Level 3
 
—

 
—

—

Transfers out of Level 3
 
—

 
—

—

Total gains or losses
 
 
 
 
 
Included in earnings
 
58,458

 
73,333

—

Included in other comprehensive income
 
—

 
—

—

Purchases, issuances, sales and settlements
 
 
 
 
 
Purchases
 
1,545,584

 
—

—

Issuances
 
248,381

 
755,344

29,874

Sales
 
—

 
—

—

Settlements
 
—

 
(130,356
)
—

Ending balance
 
$
2,488,283

 
$
986,410

$
29,874
























The table below presents a summary of the estimated carrying amount and fair value of Nationstar’s financial instruments.

 
September 30, 2014
 
Carrying
Amount
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
269,735

 
$
269,735

 
$
—

 
$
—

Restricted cash
294,044

 
294,044

 
—

 
—

Mortgage loans held for sale
1,697,041

 
—

 
1,696,657

 
—

Mortgage loans held for investment, net
195,432

 
—

 
—

 
168,959

Reverse mortgage interests
1,956,952

 
—

 
—

 
1,937,199

Derivative financial instruments
88,333

 
—

 
88,333

 
—

Financial liabilities:
 
 
 
 
 
 
 
Notes payable
3,532,743

 
—

 
—

 
3,532,743

Unsecured senior notes
2,159,651

 
2,150,702

 
—

 
—

Derivative financial instruments
9,621

 
—

 
9,621

 
—

Nonrecourse debt - Legacy assets
78,481

 
—

 
—

 
89,018

Excess spread financing
1,062,544

 
—

 
—

 
1,062,544

Participating interest financing
1,367,382

 
—

 
1,336,722

 
—

Mortgage servicing rights financing liability
44,449

 
—

 
—

 
44,449

 
December 31, 2013
 
Carrying
Amount
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
441,902

 
$
441,902

 
$
—

 
$
—

Restricted cash
592,747

 
592,747

 
—

 
—

Mortgage loans held for sale
2,603,380

 
—

 
2,601,520

 
—

Mortgage loans held for investment, net
211,050

 
—

 
—

 
180,435

Reverse mortgage interests
1,434,506

 
—

 
—

 
1,405,197

Derivative financial instruments
123,878

 
—

 
123,878

 
—

Financial liabilities:
 
 
 
 
 
 
 
Notes payable
6,984,351

 
—

 
—

 
6,984,351

Unsecured senior notes
2,444,062

 
2,489,886

 
—

 
—

Derivative financial instruments
8,526

 
—

 
8,526

 
—

Nonrecourse debt - Legacy assets
89,107

 
—

 
—

 
95,345

Excess spread financing
986,410

 
—

 
—

 
986,410

Participating interest financing
1,103,490

 
—

 
1,093,747

 
—

Mortgage servicing rights financing liability
29,874

 
—

 
—

 
29,874

Capital Requirements
Capital Requirements
Capital Requirements
Certain of Nationstar's secondary market investors require minimum net worth (capital) requirements, as specified in the respective selling and servicing agreements. In addition, these investors may require capital ratios in excess of the stated requirements to approve large servicing transfers. To the extent that these requirements are not met, Nationstar's secondary market investors may utilize a range of remedies ranging from sanctions, suspension or ultimately termination of Nationstar's selling and servicing agreements, which would prohibit Nationstar from further originating or securitizing these specific types of mortgage loans or being an approved servicer.
Among Nationstar's various capital requirements related to its outstanding selling and servicing agreements, the most restrictive of these requires Nationstar to maintain a minimum adjusted net worth balance of $653.5 million. As of September 30, 2014, Nationstar was in compliance with its selling and servicing capital requirements.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Litigation and Regulatory Matters
Nationstar and its affiliates are routinely and currently involved in a significant number of legal proceedings concerning matters that arise in the ordinary course of business, including putative class actions and other litigation. These actions and proceedings are generally based on alleged violations of consumer protection, securities, employment, contract and other laws, including, without limitation, the Equal Credit Opportunity Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act, Real Estate Settlement Procedures Act, Servicemember's Civil Relief Act, Telephone Consumer Protection Act, Truth in Lending Act, Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and False Claims Act. Additionally, along with others in our industry, the Company is subject to repurchase and indemnification claims and may continue to receive claims in the future, relating to the sale of mortgage loans and/or the servicing of mortgage loans and securitizations. The Company is also subject to legal actions or proceedings related to loss sharing and indemnification provisions of our various acquisitions. Certain of the actual legal actions and proceedings include claims for substantial compensatory, punitive and/or statutory damages or claims for an indeterminate amount of damages. The outcome of such proceedings is difficult to predict or estimate until late in the proceedings, which may last several years. In particular, ongoing and other legal proceedings brought under federal or state consumer protection laws may result in a separate fine for each violation of the laws, which, particularly in the case of class action lawsuits, could result in damages substantially in excess of the amount earned from the underlying activities and that could have a material adverse effect on the Company's liquidity and financial position. The certification of any putative class action could substantially increase the Company's exposure to damages.
Further, in the ordinary course of business the Company and its subsidiaries can be or are involved in governmental and regulatory examinations, information gathering requests, investigations and proceedings (both formal and informal), regarding the Company’s business, certain of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. Such inquiries may include those into servicer foreclosure processes and procedures, lender-placed insurance and originations.

The Company seeks to resolve all litigation and regulatory matters in the manner management believes is in the best interest of the Company and contests liability, allegations of wrongdoing and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with outstanding legal and regulatory proceedings utilizing the latest information available. Where available information indicates that it is probable a liability has been incurred and the Company can reasonably estimate the amount of that loss an accrued liability is established. The actual costs of resolving these proceedings may be substantially higher or lower than the amounts accrued.

When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is both probable and estimable. If, at the time of evaluation, the loss contingency is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable. Once the matter is deemed to be both probable and estimable, the Company will establish an accrued liability and record a corresponding amount to litigation related expense. The Company will continue to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Litigation related expense, which includes the fees paid to external legal service providers, of $3.6 million and $18.8 million were included in general and administrative expense on the consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2014, respectively, and $6.2 million and $14.2 million for the three and nine months ended September 30, 2013, respectively, were included in general and administrative expenses on the consolidated statements of income and comprehensive income.
For a number of matters for which a loss is probable or reasonably possible in future periods, whether in excess of a related accrued liability or where there is no accrued liability, the Company may be able to estimate a range of possible loss. In determining whether it is possible to provide an estimate of loss or range of possible loss, the Company reviews and evaluates its material litigation and regulatory matters on an ongoing basis, in conjunction with any outside counsel handling the matter. For those matters for which an estimate is possible, management currently believes the aggregate range of reasonably possible loss is $2.6 million to $6.9 million in excess of the accrued liability (if any) related to those matters as of September 30, 2014. This estimated range of possible loss is based upon currently available information and is subject to significant judgment, numerous assumptions and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary substantially from the current estimate. Those matters for which an estimate is not possible are not included within the estimated range. Therefore, this estimated range of possible loss represents what management believes to be an estimate of possible loss only for certain matters meeting these criteria. It does not represent the Company's maximum loss exposure.
Based on current knowledge, and after consultation with counsel, management believes that the current legal accrued liability is appropriate, and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the consolidated financial condition of the Company, although the outcome of such proceedings could be material to the Company’s operating results and cash flows for a particular period depending, on among other things, the level of the Company’s revenues or income for such period. However, in the event of significant developments on existing cases, it is possible that the ultimate resolution, if unfavorable, may be material to the Company’s consolidated financial statements.

Loan and Other Commitments
Nationstar enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. Nationstar also enters into LPCs with prospective sellers. These loan commitments are treated as derivatives and are carried at fair value (See Note 9 - Derivative Financial Instruments).

Nationstar has certain MSRs related to approximately $28.4 billion of unpaid principal balance in reverse mortgage loans. As servicer for these reverse mortgage loans, among other things, the Company is obligated to make advances to the loan customers as required. At September 30, 2014, the Company’s maximum unfunded advance obligation related to these MSRs was approximately $4.2 billion. Upon funding any portion of these advances, the Company expects to securitize and sell the advances in transactions that will be accounted for as a financing arrangement.
Business Segment Reporting
Business Segment Reporting
Business Segment Reporting
As of the second quarter of 2014, the Company realigned its business segment reporting structure as a result of the change in the Chief Operating Decision Maker. While this financial data reflects the change in the Company's reportable segments described below, including the historical data presented for comparison purposes, the Company has not revised or restated its historical financial statements for any period. The realignment principally involved the separation of the former ‘Servicing’ segment into two segments and the reclassification of previously allocated corporate costs, including interest costs related to Nationstar’s unsecured senior debt, into the Corporate and Other segment. Corporate costs included within the Corporate and Other segment include expenses related to certain executive salaries and other corporate functions that are not directly attributable to our operating segments.
Nationstar’s segments are based upon Nationstar’s organizational structure which focuses primarily on the services offered. The accounting policies of each reportable segment are the same as those of Nationstar except for 1) expenses for consolidated back-office operations and general overhead-type expenses such as executive administration and accounting, and 2) revenues generated on inter-segment services performed. Expenses are allocated to individual segments based on the estimated value of services performed, including estimated utilization of square footage and corporate personnel as well as the equity invested in each segment. Revenues generated or inter-segment services performed are valued based on similar services provided to external parties.
To reconcile to Nationstar’s consolidated results, certain inter-segment revenues and expenses are eliminated in the “Eliminations” column in the following tables.
The following tables are a presentation of financial information by segment for the periods indicated:
 
 
Three months ended September 30, 2014
 
 
Servicing
 
Originations
 
Solutionstar
 
Total Operating
Segments
 
Corporate and Other
 
Eliminations
 
Consolidated
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
 
$
253,434

 
$
105

 
$
4

 
$
253,543

 
$
(1,002
)
 
$
(17,133
)
 
$
235,408

Other fee income
 
28,113

 
10,334

 
85,519

 
123,966

 
2,135

 
—

 
126,101

Total fee income
 
281,547

 
10,439

 
85,523

 
377,509

 
1,133

 
(17,133
)
 
361,509

Gain/(loss) on mortgage loans held for sale
 
(1,147
)
 
128,355

 
—

 
127,208

 
(1,172
)
 
16,779

 
142,815

Total revenues
 
280,400

 
138,794

 
85,523

 
504,717

 
(39
)
 
(354
)
 
504,324

Total expenses and impairments
 
160,975

 
89,369

 
50,006

 
300,350

 
26,874

 
—

 
327,224

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
18,369

 
18,903

 
—

 
37,272

 
5,688

 
354

 
43,314

Interest expense
 
(48,651
)
 
(17,085
)
 
(352
)
 
(66,088
)
 
(50,585
)
 
—

 
(116,673
)
Gain on sale of property
 
—

 
—

 
—

 
—

 
4,898

 
—

 
4,898

Gain (loss) on interest rate swaps and caps
 
795

 
—

 
—

 
795

 
145

 
—

 
940

Total other income (expense)
 
(29,487
)
 
1,818

 
(352
)
 
(28,021
)
 
(39,854
)
 
354

 
(67,521
)
Income (loss) before taxes
 
$
89,938

 
$
51,243

 
$
35,165

 
$
176,346

 
$
(66,767
)
 
$
—

 
$
109,579

Depreciation and amortization
 
$
2,886

 
$
1,049

 
$
922

 
$
4,857

 
$
4,705

 
$
—

 
$
9,562

Total assets
 
8,370,695

 
1,929,239

 
319,910

 
10,619,844

 
257,200

 
—

 
10,877,044

 
 
Three months ended September 30, 2013
 
 
Servicing
 
Originations
 
Solutionstar
 
Total Operating
Segments
 
Corporate and Other
 
Eliminations
 
Consolidated
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
 
$
357,262

 
$
(1
)
 
$
13

 
$
357,274

 
$
551

 
$
(16,146
)
 
$
341,679

Other fee income
 
19,782

 
23,117

 
41,254

 
84,153

 
50

 
—

 
84,203

Total fee income
 
377,044

 
23,116

 
41,267

 
441,427

 
601

 
(16,146
)
 
425,882

Gain/(loss) on mortgage loans held for sale
 
124

 
190,186

 
—

 
190,310

 
(101
)
 
15,747

 
205,956

Total revenues
 
377,168

 
213,302

 
41,267

 
631,737

 
500

 
(399
)
 
631,838

Total expenses and impairments
 
158,247

 
176,600

 
31,964

 
366,811

 
29,043

 
—

 
395,854

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
31,913

 
28,273

 
—

 
60,186

 
3,318

 
399

 
63,903

Interest expense
 
(85,653
)
 
(32,879
)
 
(103
)
 
(118,635
)
 
(49,580
)
 
—

 
(168,215
)
Gain (loss) on interest rate swaps and caps
 
94

 
—

 
—

 
94

 
306

 
—

 
400

Total other income (expense)
 
(53,646
)
 
(4,606
)
 
(103
)
 
(58,355
)
 
(45,956
)
 
399

 
(103,912
)
Income (loss) before taxes
 
$
165,275

 
$
32,096

 
$
9,200

 
$
206,571

 
$
(74,499
)
 
$
—

 
$
132,072

Depreciation and amortization
 
$
3,659

 
$
1,914

 
$
409

 
$
5,982

 
$
1,013

 
$
—

 
$
6,995

Total assets
 
10,067,020

 
4,256,216

 
38,977

 
14,362,213

 
2,705,859

 
—

 
17,068,072



 
 
Nine months ended September 30, 2014
 
 
Servicing
 
Originations
 
Solutionstar
 
Total Operating
Segments
 
Corporate and Other
 
Eliminations
 
Consolidated
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
 
$
787,972

 
$
317

 
$
17

 
$
788,306

 
$
(429
)
 
$
(54,206
)
 
$
733,671

Other fee income
 
71,722

 
38,071

 
233,869

 
343,662

 
2,704

 
—

 
346,366

Total fee income
 
859,694

 
38,388

 
233,886

 
1,131,968

 
2,275

 
(54,206
)
 
1,080,037

Gain/(loss) on mortgage loans held for sale
 
(2,972
)
 
395,756

 
—

 
392,784

 
(2,223
)
 
53,106

 
443,667

Total revenues
 
856,722

 
434,144

 
233,886

 
1,524,752

 
52

 
(1,100
)
 
1,523,704

Total expenses and impairments
 
511,998

 
291,503

 
134,725

 
938,226

 
56,842

 
—

 
995,068

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
59,191

 
57,751

 
—

 
116,942

 
12,156

 
1,100

 
130,198

Interest expense
 
(199,464
)
 
(56,333
)
 
(496
)
 
(256,293
)
 
(156,402
)
 
—

 
(412,695
)
Gain on sale of property

 
—

 
—

 
—

 
—

 
4,898

 
—

 
4,898

Gain (loss) on interest rate swaps and caps
 
2,156

 
—

 
—

 
2,156

 
652

 
—

 
2,808

Total other income (expense)
 
(138,117
)
 
1,418

 
(496
)
 
(137,195
)
 
(138,696
)
 
1,100

 
(274,791
)
Income (loss) before taxes
 
$
206,607

 
$
144,059

 
$
98,665

 
$
449,331

 
$
(195,486
)
 
$
—

 
$
253,845

Depreciation and amortization
 
$
11,453

 
$
7,754

 
$
2,764

 
$
21,971

 
$
7,992

 
$
—

 
$
29,963

Total assets
 
8,370,695

 
1,929,239

 
319,910

 
10,619,844

 
257,200

 
—

 
10,877,044

 
 
Nine months ended September 30, 2013
 
 
Servicing
 
Originations
 
Solutionstar
 
Total Operating
Segments
 
Corporate and Other
 
Eliminations
 
Consolidated
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
 
$
848,324

 
$
95

 
$
41

 
$
848,460

 
$
1,322

 
$
(47,198
)
 
$
802,584

Other fee income
 
58,795

 
36,479

 
91,694

 
186,968

 
(91
)
 
—

 
186,877

Total fee income
 
907,119

 
36,574

 
91,735

 
1,035,428

 
1,231

 
(47,198
)
 
989,461

Gain/(loss) on mortgage loans held for sale
 
(61
)
 
631,212

 
—

 
631,151

 
—

 
45,953

 
677,104

Total revenues
 
907,058

 
667,786

 
91,735

 
1,666,579

 
1,231

 
(1,245
)
 
1,666,565

Total expenses and impairments
 
432,219

 
424,368

 
75,906

 
932,493

 
71,783

 
—

 
1,004,276

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
66,961

 
65,936

 
—

 
132,897

 
11,806

 
1,245

 
145,948

Interest expense
 
(195,089
)
 
(56,732
)
 
(195
)
 
(252,016
)
 
(126,484
)
 
—

 
(378,500
)
Gain (loss) on interest rate swaps and caps
 
1,466

 
—

 
—

 
1,466

 
991

 
—

 
2,457

Total other income (expense)
 
(126,662
)
 
9,204

 
(195
)
 
(117,653
)
 
(113,687
)
 
1,245

 
(230,095
)
Income (loss) before taxes
 
$
348,177

 
$
252,622

 
$
15,634

 
$
616,433

 
$
(184,239
)
 
$
—

 
$
432,194

Depreciation and amortization
 
$
9,315

 
$
4,149

 
712

 
$
14,176

 
$
2,510

 
$
—

 
$
16,686

Total assets
 
10,067,020

 
4,256,216

 
38,977

 
14,362,213

 
2,705,859

 
—

 
17,068,072

Guarantor Financial Statement Information
Guarantor Financial Statement Information
. Guarantor Financial Statement Information
As of September 30, 2014, Nationstar Mortgage LLC and Nationstar Capital Corporation(1) (collectively, the Issuer), both wholly owned subsidiaries of Nationstar, have issued $2.2 billion aggregate principal amount of unsecured senior notes which mature on various dates through June 1, 2022. The unsecured senior notes are unconditionally guaranteed, jointly and severally, by all of Nationstar Mortgage LLC’s existing and future domestic subsidiaries other than its securitization and certain finance subsidiaries, certain other restricted subsidiaries, excluded restricted subsidiaries and subsidiaries that in the future Nationstar Mortgage LLC designates as unrestricted subsidiaries. All guarantor subsidiaries are 100% owned by Nationstar Mortgage LLC. Nationstar and its two direct wholly-owned subsidiaries are guarantors of the unsecured senior notes as well. Presented below are the condensed consolidating financial statements of Nationstar, Nationstar Mortgage LLC and the guarantor subsidiaries for the periods indicated.
In the condensed consolidating financial statements presented below, Nationstar allocates income tax expense to Nationstar Mortgage LLC as if it were a separate tax payer entity pursuant to ASC 740, Income Taxes.
(1)Nationstar Capital Corporation has no assets, operations or liabilities other than being a co-obliger of the unsecured senior notes.

NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2014
(IN THOUSANDS)
Assets
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Cash and cash equivalents
$
—

 
$
256,513

 
$
691

 
$
12,531

 
$
—

 
$
269,735

Restricted cash
—

 
195,522

 
—

 
98,522

 
—

 
294,044

Accounts receivable
—

 
2,989,520

 
2,115

 
68,747

 
—

 
3,060,382

Mortgage loans held for sale
—

 
1,655,677

 
—

 
41,364

 
—

 
1,697,041

Mortgage loans held for investment, net
—

 
1,549

 
—

 
193,883

 
—

 
195,432

Reverse mortgage interests
—

 
1,956,952

 
—

 
—

 
—

 
1,956,952

Mortgage servicing rights
—

 
2,910,640

 
—

 
—

 
—

 
2,910,640

Investment in subsidiaries
1,181,205

 
305,193

 
—

 
—

 
(1,486,398
)
 
—

Property and equipment, net
—

 
108,980

 
835

 
11,820

 
—

 
121,635

Derivative financial instruments
—

 
83,627

 
—

 
4,706

 
—

 
88,333

Other assets
17,118

 
523,979

 
268,420

 
1,036,860

 
(1,563,527
)
 
282,850

Total assets
$
1,198,323

 
$
10,988,152

 
$
272,061

 
$
1,468,433

 
$
(3,049,925
)
 
$
10,877,044

Liabilities and stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Notes payable
$
—

 
$
2,489,464

 
$
—

 
$
1,043,279

 
$
—

 
$
3,532,743

Unsecured senior notes
—

 
2,159,651

 
—

 
—

 
—

 
2,159,651

Payables and accrued liabilities
—

 
1,343,809

 
—

 
32,619

 
(31,533
)
 
1,344,895

Payables to affiliates
—

 
1,251,073

 
116,349

 
164,572

 
(1,531,994
)
 
—

Derivative financial instruments
—

 
9,621

 
—

 
—

 
—

 
9,621

Mortgage servicing liabilities
—

 
78,954

 
—

 
—

 
—

 
78,954

Other nonrecourse debt
—

 
2,474,375

 
—

 
78,481

 
—

 
2,552,856

Total liabilities
—

 
9,806,947

 
116,349

 
1,318,951

 
(1,563,527
)
 
9,678,720

Total equity
1,198,323

 
1,181,205

 
155,712

 
149,482

 
(1,486,398
)
 
1,198,324

Total liabilities and equity
$
1,198,323

 
$
10,988,152

 
$
272,061

 
$
1,468,433

 
$
(3,049,925
)
 
$
10,877,044




NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 (IN THOUSANDS)
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
$
—

 
$
252,537

 
$
4

 
$
—

 
$
(17,133
)
 
$
235,408

Other fee income
—

 
58,284

 
(12,973
)
 
80,790

 
—

 
126,101

Total fee income
—

 
310,821

 
(12,969
)
 
80,790

 
(17,133
)
 
361,509

Gain on mortgage loans held for sale
—

 
121,912

 
—

 
4,124

 
16,779

 
142,815

Total revenues
—

 
432,733

 
(12,969
)
 
84,914

 
(354
)
 
504,324

Expenses and impairments:
 
 
 
 
 
 
 
 
 
 
 
Salaries, wages and benefits
—

 
135,686

 
750

 
24,321

 
—

 
160,757

General and administrative
—

 
130,356

 
(3,002
)
 
29,714

 
—

 
157,068

Loss on foreclosed real estate and other
—

 
1,230

 
—

 
1,501

 
—

 
2,731

Occupancy
—

 
5,606

 
44

 
1,018

 
—

 
6,668

Total expenses and impairments
—

 
272,878

 
(2,208
)
 
56,554

 
—

 
327,224

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
38,403

 
—

 
4,557

 
354

 
43,314

Interest expense
—

 
(106,771
)
 
—

 
(9,902
)
 
—

 
(116,673
)
Gain on disposal of property
—

 
4,898

 
—

 
—

 
—

 
4,898

Gain/(Loss) on interest rate swaps and caps
—

 
145

 
—

 
795

 
—

 
940

Gain/(loss) from subsidiaries
111,225

 
13,049

 
—

 
—

 
(124,274
)
 
—

Total other income (expense)
111,225

 
(50,276
)
 
—

 
(4,550
)
 
(123,920
)
 
(67,521
)
Income before taxes
111,225

 
109,579

 
(10,761
)
 
23,810

 
(124,274
)
 
109,579

Income tax expense/(benefit)
—

 
(1,700
)
 
—

 
—

 
—

 
(1,700
)
Net income/(loss)
111,225

 
111,279

 
(10,761
)
 
23,810

 
(124,274
)
 
111,279

Less: Net loss attributable to noncontrolling interests
—

 
54

 
—

 
—

 
—

 
54

Net income/(loss) excluding noncontrolling interests
$
111,225

 
$
111,225

 
$
(10,761
)
 
$
23,810

 
$
(124,274
)
 
$
111,225




NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
(IN THOUSANDS)
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
$
—

 
$
787,860

 
$
17

 
$
—

 
$
(54,206
)
 
$
733,671

Other fee income
—

 
90,309

 
45,569

 
210,488

 
—

 
346,366

Total fee income
—

 
878,169

 
45,586

 
210,488

 
(54,206
)
 
1,080,037

Gain on mortgage loans held for sale
—

 
386,461

 
—

 
4,100

 
53,106

 
443,667

Total revenues
—

 
1,264,630

 
45,586

 
214,588

 
(1,100
)
 
1,523,704

Expenses and impairments:
 
 
 
 
 
 
 
 
 
 
 
Salaries, wages and benefits
—

 
418,190

 
4,257

 
48,957

 
—

 
471,404

General and administrative
—

 
407,220

 
1,461

 
85,772

 
—

 
494,453

Loss on foreclosed real estate and other
—

 
(160
)
 
—

 
5,986

 
—

 
5,826

Occupancy
—

 
20,609

 
277

 
2,499

 
—

 
23,385

Total expenses and impairments
—

 
845,859

 
5,995

 
143,214

 
—

 
995,068

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
116,258

 
—

 
12,840

 
1,100

 
130,198

Interest expense
—

 
(367,784
)
 
—

 
(44,911
)
 
—

 
(412,695
)
Gain on disposal of property
—

 
4,898

 
—

 
—

 
—

 
4,898

Gain/(Loss) on interest rate swaps and caps
—

 
652

 
—

 
2,156

 
—

 
2,808

Gain/(loss) from subsidiaries
201,716

 
81,050

 
—

 
—

 
(282,766
)
 
—

Total other income (expense)
201,716

 
(164,926
)
 
—

 
(29,915
)
 
(281,666
)
 
(274,791
)
Income before taxes
201,716

 
253,845

 
39,591

 
41,459

 
(282,766
)
 
253,845

Income tax expense/(benefit)
—

 
52,242

 
—

 
—

 
—

 
52,242

Net income/(loss)
201,716

 
201,603

 
39,591

 
41,459

 
(282,766
)
 
201,603

Less: Net loss attributable to noncontrolling interests
—

 
(113
)
 
—

 
—

 
—

 
(113
)
Net income/(loss) excluding noncontrolling interests
$
201,716

 
$
201,716

 
$
39,591

 
$
41,459

 
$
(282,766
)
 
$
201,716


NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
(IN THOUSANDS)
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net income/(loss)
$
201,716

 
$
201,716

 
$
39,591

 
$
41,459

 
$
(282,766
)
 
$
201,716

Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
 
 
 
 
 
 
 
 
 
 
 
(Gain)/loss from subsidiaries
(201,716
)
 
(81,050
)
 
—

 
—

 
282,766

 
—

Share-based compensation
—

 
11,344

 
—

 
—

 
—

 
11,344

Net tax effect of stock grants
—

 
(2,197
)
 
—

 
—

 
—

 
(2,197
)
Loss on foreclosed real estate and other
—

 
(160
)
 
—

 
5,986

 
—

 
5,826

Gain on mortgage loans held for sale
—

 
(386,461
)
 
—

 
(4,100
)
 
(53,106
)
 
(443,667
)
Mortgage loans originated and purchased, net of fees
—

 
(16,548,058
)
 
—

 
—

 
—

 
(16,548,058
)
Proceeds on sale of and payments of mortgage loans held for sale
—

 
17,729,442

 
—

 
(25,493
)
 
53,106

 
17,757,055

(Gain)/loss on derivatives including ineffectiveness
—

 
(652
)
 
—

 
(2,156
)
 
—

 
(2,808
)
Cash settlement on derivative financial instruments
—

 
—

 
—

 
1,352

 
—

 
1,352

Depreciation and amortization
—

 
27,148

 
89

 
2,726

 
—

 
29,963

Amortization (accretion) of premiums/discounts
—

 
18,578

 
—

 
(1,918
)
 
—

 
16,660

Fair value changes in excess spread financing
—

 
61,080

 
—

 
—

 
—

 
61,080

Fair value changes and amortization/accretion of mortgage servicing rights
—

 
128,227

 
—

 
—

 
—

 
128,227

Fair value change in mortgage servicing rights liability
—

 
(38,260
)
 
—

 
—

 
—

 
(38,260
)
Changes in assets and liabilities:
 
 
 
 
 
 
 
 
 
 

Accounts receivable, including servicing advances, net
—

 
(3,395,051
)
 
467

 
3,996,133

 
—

 
601,549

Reverse mortgage funded advances
—

 
(572,544
)
 
—

 
—

 
—

 
(572,544
)
Other assets
4,755

 
1,659,322

 
(37,347
)
 
(1,564,513
)
 
69

 
62,286

Payables and accrued liabilities
—

 
(38,452
)
 
(5,950
)
 
19,011

 
(69
)
 
(25,460
)
Net cash attributable to operating activities
4,755

 
(1,226,028
)
 
(3,150
)
 
2,468,487

 
—

 
1,244,064

 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Investing activities:
 
 
 
 
 
 
 
 
 
 
 
Property and equipment additions, net of disposals
—

 
(29,517
)
 
(69
)
 
(11,981
)
 
—

 
(41,567
)
Gain on disposal of building
—

 
10,412

 
—

 
—

 
—

 
10,412

Purchase of forward mortgage servicing rights, net of liabilities incurred
—

 
(317,247
)
 
—

 
—

 
—

 
(317,247
)
Proceeds from sale of servicer advances
—

 
512,527

 
—

 
—

 
—

 
512,527

Loan repurchases from Ginnie Mae
—

 
(9,134
)
 
—

 
—

 
—

 
(9,134
)
Proceeds from sales of REO
—

 
70,480

 
—

 
—

 
—

 
70,480

Acquisitions, net
—

 
(18,000
)
 
—

 
—

 
—

 
(18,000
)
Net cash attributable to investing activities
—

 
219,521

 
(69
)
 
(11,981
)
 
—

 
207,471

Financing activities:
 
 
 
 
 
 
 
 
 
 
 
Transfers (to)/from restricted cash, net
—

 
100,185

 
3

 
182,101

 
—

 
282,289

Repayment of unsecured senior notes
—

 
(285,000
)
 
—

 
—

 
—

 
(285,000
)
Debt financing costs
—

 
(11,461
)
 
—

 
—

 
—

 
(11,461
)
Increase/(decrease) in notes payable
—

 
687,306

 
—

 
(2,629,447
)
 
—

 
(1,942,141
)
Issuance of excess spread financing
—

 
150,951

 
—

 
—

 
—

 
150,951

Repayment of excess spread financing
—

 
(135,897
)
 
—

 
—

 
—

 
(135,897
)
Increase in participating interest financing in reverse mortgage interests
—

 
279,636

 
—

 
—

 
—

 
279,636

Proceeds from mortgage servicing rights financing
—

 
52,835

 
—

 
—

 
—

 
52,835

Repayment of nonrecourse debt–Legacy assets
—

 
—

 
—

 
(12,356
)
 
—

 
(12,356
)
Net tax benefit for stock grants issued
—

 
2,197

 
—

 
—

 
—

 
2,197

Redemption of shares for stock vesting
(4,755
)
 
—

 
—

 
—

 
—

 
(4,755
)
Net cash attributable to financing activities
(4,755
)
 
840,752

 
3

 
(2,459,702
)
 
—

 
(1,623,702
)
Net increase in cash and cash equivalents
—

 
(165,755
)
 
(3,216
)
 
(3,196
)
 
—

 
(172,167
)
Cash and cash equivalents at beginning of period
—

 
422,268

 
3,907

 
15,727

 
—

 
441,902

Cash and cash equivalents at end of period
$
—

 
$
256,513

 
$
691

 
$
12,531

 
$
—

 
$
269,735




NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2013
(IN THOUSANDS)

 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
422,268

 
$
3,907

 
$
15,727

 
$
—

 
$
441,902

Restricted cash
—

 
312,120

 
3

 
280,624

 
—

 
592,747

Accounts receivable
—

 
1,569,021

 
2,582

 
4,064,879

 
—

 
5,636,482

Mortgage loans held for sale
—

 
2,603,380

 
—

 
—

 
—

 
2,603,380

Mortgage loans held for investment, net
—

 
2,786

 
—

 
208,264

 
—

 
211,050

Reverse mortgage interests
—

 
1,434,506

 
—

 
—

 
—

 
1,434,506

Mortgage servicing rights
—

 
2,503,162

 
—

 
—

 
—

 
2,503,162

Investment in subsidiaries
968,027

 
181,545

 
—

 
—

 
(1,149,572
)
 
—

Property and equipment, net
—

 
115,765

 
855

 
2,565

 
—

 
119,185

Derivative financial instruments
—

 
120,187

 
—

 
3,691

 
—

 
123,878

Other assets
21,872

 
4,683,749

 
323,346

 
3,373,048

 
(8,041,618
)
 
360,397

Total assets
$
989,899

 
$
13,948,489

 
$
330,693

 
$
7,948,798

 
$
(9,191,190
)
 
$
14,026,689

Liabilities and members’ equity
 
 
 
 
 
 
 
 
 
 
 
Notes payable
$
—

 
$
3,311,625

 
$
—

 
$
3,672,726

 
$
—

 
$
6,984,351

Unsecured senior notes
—

 
2,444,062

 
—

 
—

 
—

 
2,444,062

Payables and accrued liabilities
—

 
1,319,172

 
5,950

 
14,791

 
(31,463
)
 
1,308,450

Payables to affiliates
—

 
3,694,782

 
116,349

 
4,199,023

 
(8,010,154
)
 
—

Derivative financial instruments
—

 
8,526

 
—

 
—

 
—

 
8,526

Mortgage servicing liabilities
—

 
82,521

 
—

 
—

 
—

 
82,521

Other nonrecourse debt
—

 
2,119,774

 
—

 
89,107

 
—

 
2,208,881

Total liabilities
—

 
12,980,462

 
122,299

 
7,975,647

 
(8,041,617
)
 
13,036,791

Total equity
989,899

 
968,027

 
208,394

 
(26,849
)
 
(1,149,573
)
 
989,898

Total liabilities and equity
$
989,899

 
$
13,948,489

 
$
330,693

 
$
7,948,798

 
$
(9,191,190
)
 
$
14,026,689



NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013
(IN THOUSANDS)
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
$
—

 
$
357,832

 
$
—

 
$
—

 
$
(16,153
)
 
$
341,679

Other fee income
—

 
23,404

 
58,780

 
2,019

 
—

 
84,203

Total fee income
—

 
381,236

 
58,780

 
2,019

 
(16,153
)
 
425,882

Gain on mortgage loans held for sale
—

 
190,202

 
—

 
—

 
15,754

 
205,956

Total revenues
—

 
571,438

 
58,780

 
2,019

 
(399
)
 
631,838

Expenses and impairments:

 

 

 

 

 

Salaries, wages and benefits
—

 
181,366

 
11,799

 
93

 
—

 
193,258

General and administrative
—

 
167,409

 
19,566

 
542

 
—

 
187,517

Loss on foreclosed real estate and other
—

 
5,221

 
—

 
4,277

 
—

 
9,498

Occupancy
—

 
5,237

 
344

 
—

 
—

 
5,581

Total expenses and impairments
—

 
359,233

 
31,709

 
4,912

 
—

 
395,854

Other income / (expense):

 

 

 

 

 

Interest income
—

 
60,150

 
—

 
3,354

 
399

 
63,903

Interest expense
—

 
(132,701
)
 
—

 
(35,514
)
 
—

 
(168,215
)
Gain on interest rate swaps and caps
—

 
306

 
—

 
94

 
—

 
400

Gain /(loss) from subsidiaries
81,885

 
(7,888
)
 
—

 
—

 
(73,997
)
 
—

Total other income /(expense)
81,885

 
(80,133
)
 
—

 
(32,066
)
 
(73,598
)
 
(103,912
)
Income before taxes
81,885

 
132,072

 
27,071

 
(34,959
)
 
(73,997
)
 
132,072

Income tax expense
—

 
50,187

 
—

 
—

 
—

 
50,187

Net income (loss)
$
81,885

 
$
81,885

 
$
27,071

 
$
(34,959
)
 
$
(73,997
)
 
$
81,885



 



NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013
(IN THOUSANDS)
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
$
—

 
$
849,789

 
$
—

 
$
—

 
$
(47,205
)
 
$
802,584

Other fee income
—

 
37,800

 
146,791

 
2,286

 
—

 
186,877

Total fee income
—

 
887,589

 
146,791

 
2,286

 
(47,205
)
 
989,461

Gain on mortgage loans held for sale
—

 
631,144

 
—

 
—

 
45,960

 
677,104

Total revenues
—

 
1,518,733

 
146,791

 
2,286

 
(1,245
)
 
1,666,565

Expenses and impairments:
 
 
 
 
 
 
 
 
 
 
 
Salaries, wages and benefits
—

 
470,020

 
29,762

 
93

 
—

 
499,875

General and administrative
—

 
425,268

 
46,378

 
595

 
—

 
472,241

Loss on foreclosed real estate and other
—

 
9,288

 
—

 
4,075

 
—

 
13,363

Occupancy
—

 
18,038

 
759

 
—

 
—

 
18,797

Total expenses and impairments
—

 
922,614

 
76,899

 
4,763

 
—

 
1,004,276

Other income / (expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
133,834

 
—

 
10,869

 
1,245

 
145,948

Interest expense
—

 
(299,225
)
 
—

 
(79,275
)
 
—

 
(378,500
)
Gain on interest rate swaps and caps
—

 
726

 
—

 
1,731

 
—

 
2,457

Gain /(loss) from subsidiaries
267,961

 
740

 
—

 
—

 
(268,701
)
 
—

Total other income /(expense)
267,961

 
(163,925
)
 
—

 
(66,675
)
 
(267,456
)
 
(230,095
)
Income before taxes
267,961

 
432,194

 
69,892

 
(69,152
)
 
(268,701
)
 
432,194

Income tax expense
—

 
164,233

 
—

 
—

 
—

 
164,233

Net income (loss)
$
267,961

 
$
267,961

 
$
69,892

 
$
(69,152
)
 
$
(268,701
)
 
$
267,961


NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013
(IN THOUSANDS)
 
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
Net income/(loss)
 
$
267,961

 
$
267,961

 
$
69,892

 
$
(69,152
)
 
$
(268,701
)
 
$
267,961

Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
 
 
 

 

 

 
 
 
 
(Gain)/loss from subsidiaries
 
(267,961
)
 
(740
)
 
—

 
—

 
268,701

 
—

Share-based compensation
 
—

 
8,140

 
—

 
—

 
—

 
8,140

Net tax effect of stock grants
 
—

 
(2,660
)
 
—

 
—

 
—

 
(2,660
)
Loss on foreclosed real estate and other
 
—

 
9,288

 
—

 
4,075

 
—

 
13,363

Gain on mortgage loans held for sale
 
—

 
(631,144
)
 
—

 
—

 
(45,960
)
 
(677,104
)
Mortgage loans originated and purchased, net of fees
 
—

 
(17,166,460
)
 
—

 
—

 
—

 
(17,166,460
)
Proceeds on sale of and payments of mortgage loans held for sale
 
—

 
15,314,755

 
—

 
15,771

 
45,960

 
15,376,486

(Gain) / loss on derivatives including ineffectiveness
 
—

 
(726
)
 
—

 
(1,731
)
 
—

 
(2,457
)
Cash settlement on derivatives financial instruments
 
—

 
—

 
—

 
(4,544
)
 
—

 
(4,544
)
Depreciation and amortization
 
—

 
15,987

 
651

 
48

 
—

 
16,686

Amortization (accretion) of premiums/discounts
 
—

 
40,937

 
—

 
(1,676
)
 
—

 
39,261

Fair value changes in excess spread financing
 
—

 
33,229

 
—

 
—

 
—

 
33,229

Fair value changes and amortization/accretion of mortgage servicing rights
 
—

 
(38,117
)
 
—

 
—

 
—

 
(38,117
)
Fair value change in mortgage servicing rights financing liability
 
—

 
—

 
—

 
—

 
—

 
—

Changes in assets and liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable, including servicing' advances, net
 
—

 
(68,473
)
 
(27,589
)
 
(58
)
 
—

 
(96,120
)
Reverse mortgage funded advances
 
—

 
(460,534
)
 
—

 
—

 
—

 
(460,534
)
Other assets
 
3,894

 
3,076,784

 
(50,016
)
 
(3,379,816
)
 
17,299

 
(331,855
)
Payable and accrued liabilities
 
—

 
507,301

 
10,954

 
2,105

 
(17,299
)
 
503,061

Net cash attributable to operating activities
 
3,894

 
905,528

 
3,892

 
(3,434,978
)
 
—

 
(2,521,664
)
 
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment additions, net of disposals
 
—

 
(45,767
)
 
(1,064
)
 
(1,052
)
 
—

 
(47,883
)
Purchase of reverse mortgage servicing rights and interests
 
—

 
(15,059
)
 
—

 
—

 
—

 
(15,059
)
Purchase of forward mortgage servicing rights, net of liabilities incurred
 
—

 
(2,331,658
)
 
—

 
—

 
—

 
(2,331,658
)
Proceeds on sale of servicer advances
 
—

 
—

 
—

 
—

 
—

 
—

Loan repurchases from Ginnie Mae
 
—

 


 
—

 
—

 
—

 
—

Proceeds from sales of REO
 
—

 
60,389

 
—

 
—

 
—

 
60,389

Acquisitions, net
 
—

 
(78,200
)
 
—

 
—

 
—

 
(78,200
)
Net cash attributable to investing activities
 
—

 
(2,410,295
)
 
(1,064
)
 
(1,052
)
 
—

 
(2,412,411
)
Financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
Transfers (to)/from restricted cash, net
 
—

 
(274,085
)
 
(2,454
)
 
(71,960
)
 
—

 
(348,499
)
Issuance of unsecured senior notes, net
 
—

 
1,365,244

 
—

 
—

 
—

 
1,365,244

Debt financing costs
 
—

 
(46,784
)
 
—

 
—

 
—

 
(46,784
)
Increase/(decrease) in notes payable
 
—

 
(487,360
)
 
—

 
3,529,983

 
—

 
3,042,623

Issuance of excess spread financing
 
—

 
707,640

 
—

 
—

 
—

 
707,640

Repayment of excess servicing spread financing
 
—

 
(77,505
)
 
—

 
—

 
—

 
(77,505
)
Increase in participating interest financing in reverse mortgage interests
 
—

 
422,787

 
—

 
—

 
—

 
422,787

Proceeds from mortgage servicing rights financing
 
—

 
—

 
—

 
—

 
—

 
—

Repayment of nonrecourse debt–Legacy assets
 
—

 
—

 
—

 
(9,925
)
 
—

 
(9,925
)
Due to financial services company
 
—

 

 
—

 
—

 
—

 
—

Contributions from joint venture member to noncontrolling interest
 
—

 
4,990

 
—

 
—

 
—

 
4,990

Net tax benefit for stock grants issued
 
2,660

 
—

 
—

 
—

 
—

 
2,660

Redemption of shares for stock vesting
 
(6,554
)
 
—

 
—

 
—

 
—

 
(6,554
)
Net cash attributable to financing activities
 
(3,894
)
 
1,614,927

 
(2,454
)
 
3,448,098

 
—

 
5,056,677

Net increase in cash and cash equivalents
 
—

 
110,160

 
374

 
12,068

 
—

 
122,602

Cash and cash equivalents at beginning of period
 
—

 
152,248

 
401

 
—

 
—

 
152,649

Cash and cash equivalents at end of period
 
$
—

 
$
262,408

 
$
775

 
$
12,068

 
$
—

 
$
275,251

Affiliates of Fortress Investment Group
Affiliates of Fortress Investment Group
Disclosures Related to Transactions with Affiliates of Fortress Investment Group LLC

Nationstar has several agreements to act as the loan subservicer for Springleaf Home Equity, Inc., Springleaf General Financial Services of Arkansas, Inc. and MorEquity, Inc. (collectively, Springleaf) totaling $2.2 billion for which Nationstar receives a monthly per loan subservicing fee and other performance incentive fees subject to the agreements with Springleaf. For the three months ended September 30, 2014 and 2013 Nationstar recognized revenue of $1.1 million and $2.1 million, respectively in additional servicing and other performance incentive fees related to these portfolios. For the nine months ended September 30, 2014 and 2013, Nationstar recognized revenue of $4.7 million and $6.1 million, respectively in additional servicing and other performance incentive fees related to these portfolios. At September 30, 2014 and December 31, 2013, Nationstar had an outstanding receivable from Springleaf of $0.5 million and $0.6 million, respectively, which was included as a component of accounts receivable.

In August 2014, Nationstar entered into a Mortgage Servicing Rights Purchase and Sale Agreement with Springleaf Finance Corporation and MorEquity, Inc., whereby Nationstar agreed to purchase certain servicing rights related to loans previously subserviced for Springleaf. Under the terms of this Mortgage Servicing Rights Purchase and Sale Agreement, Nationstar purchased the servicing rights related to a pool of loans with an aggregate UPB of approximately $4.8 billion. The purchase price related to this Mortgage Servicing Rights Purchase and Sale Agreement was approximately $38.8 million.
Nationstar is the loan servicer for several securitized loan portfolios managed by Newcastle Investment Corp. (Newcastle), which is managed by an affiliate of Fortress Investment Group LLC, for which Nationstar receives a monthly net servicing fee equal to 0.50% per annum on the unpaid principal balance of the portfolios, which was $0.8 billion and $0.9 billion, as of September 30, 2014 and 2013, respectively. For the three months ended September 30, 2014 and 2013, Nationstar received servicing fees and other performance incentive fees of $1.0 million and $1.1 million, respectively. For the nine months ended September 30, 2014 and 2013, Nationstar received servicing fees and other performance incentive fees of $3.1 million and $3.5 million, respectively.
Additionally, Nationstar has entered into several agreements with certain entities formed by New Residential, in which New Residential and/or certain funds managed by Fortress own an interest (each a "New Residential Entity"), where Nationstar sold to the related New Residential Entity the right to receive a portion of the excess cash flow generated from certain acquired MSRs after receipt of a fixed basic servicing fee per loan. Nationstar retains all ancillary income associated with servicing such MSRs and the remaining portion of the excess cash flow after receipt of the fixed basic servicing fee. Nationstar is the servicer of the loans and provides all servicing and advancing functions for the portfolio. The related New Residential Entity does not have prior or ongoing obligations associated with these MSR portfolios. Furthermore, should Nationstar refinance any loan in such portfolios, subject to certain limitations, Nationstar will be required to transfer the new loan or a replacement loan of similar economic characteristics into the portfolios. The new or replacement loan will be governed by the same terms set forth in the agreements described above.

In addition, Nationstar has paid $20.2 million to New Residential for delinquent service fees in advance of the contractual due date. This amount will be ultimately netted against future remittances. This amount is recorded as an offset to outstanding excess spread financing in our consolidated financial statements.
The fair value of the outstanding liability related to these agreements was $1,062.5 million and $986.4 million at September 30, 2014 and December 31, 2013, respectively.

In February 2013, Nationstar acquired certain fixed and adjustable rate reverse mortgage loans with an unpaid principal balance totaling $83.1 million for a purchase price of $50.2 million. In conjunction with this acquisition, Nationstar entered into an agreement with NIC Reverse Loan LLC, a subsidiary of Newcastle, to sell a participating interest amounting to 70% of the acquired reverse mortgage loans. Both Nationstar and NIC Reverse Loan LLC are entitled to the related percentage interest of all amounts received with respect to the reverse mortgage loans, net of payments of servicing fees and the reimbursement to Nationstar of servicing advances. Nationstar receives a fixed payment per loan for servicing these reverse mortgage loans. Nationstar records these reverse mortgage loans as reverse mortgage interests on the Company's consolidated balance sheet.

In December 2013, Nationstar launched a new servicing acquisition structure. Under this structure, Nationstar agreed to sell to a joint venture entity capitalized by New Residential and other investors (collectively, the Purchaser), approximately $2.7 billion of servicer advances currently outstanding on three pools of residential, non-agency mortgage loans, with the potential for up to $6.3 billion. Nationstar also agreed to the sale of the basic fee component of related mortgage servicing rights of approximately $44.3 billion of UPB with potential for up to $130.1 billion of UPB. Nationstar will continue to act as named servicer under each servicing agreement until servicing is transferred to the Purchaser. After the transfer of servicing under any servicing agreement to the Purchaser, Nationstar will subservice the applicable residential mortgage loans.

While the transfer of the mortgage servicing rights to New Residential is intended to achieve the economic result of a sale of
mortgage servicing rights, Nationstar will account for the transactions as financings until the required third party consents are obtained and ownership, for accounting purposes, of the MSRs transfer to New Residential.

Special purpose subsidiaries of Nationstar previously issued approximately $2.1 billion of nonrecourse variable funding notes
(the Notes) to finance the advances funded or acquired by Nationstar. The Notes were issued through two wholly-owned special purpose entities (the Issuers) pursuant to two servicer advance facilities. Pursuant to the Sale Agreement, New Residential purchased the outstanding equity of the wholly-owned special purpose entities of Nationstar that own the Issuers (the Depositors). On the sale date, New Residential and Nationstar amended and restated the transaction documents for each facility. Under these amended and restated transaction documents for each facility, Nationstar will continue to sell future service advances to New Residential, and New Residential will sell the new servicer advances to the Depositors.
Nationstar received approximately $307.3 million in cash proceeds from the Sale Agreement. The fair value of the outstanding
liability related to the Sale Agreement was $44.4 million at September 30, 2014.

In January 2014, Nationstar entered into one Sale Supplements (together with the Master Servicing Rights Purchase Agreement, collectively the “January Sale Agreement”) with the Purchaser. Under the January Sale Agreement, Nationstar sold to the Purchaser the right to repayment on approximately $253.5 million of servicer advances related to non-agency mortgage loans. In addition, Nationstar also sold the right to receive the basic fee component of the related mortgage servicing rights of approximately $8.3 billion of UPB, in exchange for the Purchaser remitting a portion of the basic fee to Nationstar continuing to service the mortgage loans. Nationstar received approximately $253.5 million in cash proceeds from the January Sale Agreement.
In February 2014, Nationstar entered into a Sale Supplement (together with the Master Servicing Rights Purchase Agreement, collectively the February Sale Agreement) with the Purchaser. Under the February Sale Agreement, Nationstar sold to the Purchaser the right to repayment on approximately $756.2 million of servicer advances related to non-agency mortgage loans. In addition, Nationstar also sold the right to receive the basic fee component of the related mortgage servicing rights of approximately $9.4 billion of UPB, in exchange for the Purchaser remitting a portion of the basic fee to Nationstar continuing to service the mortgage loans. Nationstar received approximately $91.4 million in cash proceeds from the February Sale Agreement.
In March 2014, Nationstar entered into a Sale Supplement (together with the Master Servicing Rights Purchase Agreement, collectively the March Sale Agreement) with the Purchaser. Under the March Sale Agreement, Nationstar sold to the Purchaser the right to repayment on approximately $299.1 million of servicer advances related to non-agency mortgage loans. In addition, Nationstar also sold the right to receive the basic fee component of the related mortgage servicing rights of approximately $10.5 billion of UPB, in exchange for the Purchaser remitting a portion of the basic fee to Nationstar continuing to service the mortgage loans. Nationstar received approximately $41.4 million in cash proceeds from the March Sale Agreement.
In May 2014, Nationstar entered into Sale Supplements (together with the Master Servicing Rights Purchase Agreement, collectively the May Sale Agreement) with the Purchaser. Under the May Sale Agreement, Nationstar sold to the Purchaser the right to repayment on approximately $617.5 million of servicer advances related to non-agency mortgage loans. In addition, Nationstar also sold the right to receive the basic fee component of the related mortgage servicing rights of approximately $12.0 billion of UPB, in exchange for the Purchaser remitting a portion of the basic fee to Nationstar for continuing to service the mortgage loans. Nationstar received approximately $75.2 million in cash proceeds from the May Sale Agreement.
In June 2014, Nationstar entered into Sale Supplements (together with the Master Servicing Rights Purchase Agreement, collectively the June Sale Agreement) with the Purchaser. Under the June Sale Agreement, Nationstar sold to the Purchaser the right to repayment on approximately $303.8 million of servicer advances related to non-agency mortgage loans. In addition, Nationstar also sold the right to receive the basic fee component of the related mortgage servicing rights of approximately $14.0 billion of UPB, in exchange for the Purchaser remitting a portion of the basic fee to Nationstar for continuing to service the mortgage loans. Nationstar received approximately $51.0 million in cash proceeds from the June Sale Agreement.

In May 2014, Nationstar entered into a servicing arrangement with New Residential whereby Nationstar will service residential mortgage loans that New Residential and/or its various affiliates and trust entities acquire. The terms and fees of this servicing arrangement generally conform with industry standards for stand-alone residential mortgage loan servicing. For the three and nine months ended September 30, 2014, Nationstar recognized revenue of $1.6 million related to these servicing arrangements.
Subsequent Events
Subsequent Events
. Subsequent Events

In October 2014, Nationstar amended its $1.1 billion outstanding agency advance financing facility with a financial institution. Under the terms of the amended agreement, the maturity dates related to the outstanding variable funding notes was extended to October 2015.

In October 2014, Nationstar amended its $200 million outstanding master repurchase agreement with a financial institution. Under the terms of the amended agreement, the maturity date related to this facility was extended to October 2015.
Nature of Business and Basis of Presentation (Policies)
Consolidation, Policy 
The consolidated financial statements include the accounts of Nationstar, its wholly-owned subsidiaries, and other entities in which the Company has a controlling financial interest, and those variable interest entities (VIEs) where Nationstar's wholly-owned subsidiaries are the primary beneficiaries. Intercompany balances and transactions have been eliminated. Results of operations, assets and liabilities of VIEs are included from the date that Nationstar became the primary beneficiary through the date Nationstar ceases to be the primary beneficiary.
Basis of Accounting, Policy 
The interim consolidated financial statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of the interim periods have been included. The consolidated interim financial statements of Nationstar have been prepared in accordance with generally accepted accounting principles for interim information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (SEC). Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States (GAAP) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Nationstar's Annual Report on Form 10-K filed on February 27, 2014.
Variable Interest Entities and Securitizations (Tables)
Schedule of Assets and Liabilities of VIEs Included in Financial Statements
A summary of the assets and liabilities of Nationstar’s transactions with VIEs included in the Company’s consolidated financial statements as of September 30, 2014 and December 31, 2013 is presented in the following tables:
 
 
September 30, 2014
 
December 31, 2013
 
Transfer Included in the Consolidated Financial Statements
 
Reverse Secured Borrowings
 
Transfer Included in the Consolidated Financial Statements
 
Reverse Secured Borrowings
ASSETS
 
 
 
 
 
 
 
Restricted cash
$
98,115

 
$
—

 
$
272,188

 
$
—

Reverse mortgage interests
—

 
1,296,420

 
—

 
1,039,645

Accounts receivable
1,170,414

 
—

 
4,031,444

 
—

Mortgage loans held for investment, net
193,429

 
—

 
208,263

 
—

Derivative financial instruments
1,349

 
—

 
3,691

 
—

Other assets
1,550

 
—

 
2,375

 
—

Total Assets
$
1,464,857

 
$
1,296,420

 
$
4,517,961

 
$
1,039,645

LIABILITIES
 
 
 
 
 
 
 
Notes payable
$
1,003,200

 
$
—

 
$
3,672,726

 
$
—

Payables and accrued liabilities
1,357

 
—

 
4,242

 
—

Nonrecourse debt–Legacy Assets
78,481

 
—

 
89,107

 
—

Participating interest financing
—

 
1,367,382

 
—

 
1,080,718

Total Liabilities
$
1,083,038

 
$
1,367,382

 
$
3,766,075

 
$
1,080,718

Accounts Receivable (Tables)
Schedule of Accounts Receivable
Accounts receivable consist of the following:
 
 
September 30, 2014
 
December 31, 2013
Servicer advances, net of purchase discount $8,875 and $62,217, respectively
$
2,594,106

 
$
5,099,670

Reverse mortgage servicer advances
201,541

 
93,494

Accrued revenues
158,861

 
134,440

Receivables from trusts and agencies
84,171

 
105,917

Accrued interest
2,805

 
6,970

Other
18,898

 
195,991

Total accounts receivable
$
3,060,382

 
$
5,636,482

Mortgage Loans Held for Sale and Investment (Tables)
Schedule of Mortgage Loans Held-for-Sale 
Mortgage loans held for sale consist of the following:
 
 
September 30, 2014
 
December 31, 2013
Mortgage loans held for sale – unpaid principal balance
$
1,629,030

 
$
2,532,881

Mark-to-market adjustment, included in Gain on Mortgage Loans Held for Sale
68,011

 
70,499

Total mortgage loans held for sale
$
1,697,041

 
$
2,603,380

Reconciliation of Mortgage Loans Held-for-Sale to Cash Flow 
A reconciliation of the changes in mortgage loans held for sale for the dates indicated is presented in the following table:
 
 
For the nine months ended
 
September 30, 2014
 
September 30, 2013
Mortgage loans held for sale – beginning balance
$
2,603,380

 
$
1,480,537

Mortgage loans originated and purchased, net of fees
16,548,058

 
17,166,460

Proceeds on sale of and payments of mortgage loans held for sale
(17,449,261
)
 
(14,780,987
)
Transfer of mortgage loans held for sale to held for investment or other assets
(5,136
)
 
2,450

Mortgage loans held for sale – ending balance
$
1,697,041

 
$
3,868,460

Schedule of Loans Held for Investment 
Mortgage loans held for investment, net as of the dates indicated include: 
 
 
September 30, 2014
 
December 31, 2013
Mortgage loans held for investment, net – unpaid principal balance
 
$
283,115

 
$
305,085

Transfer discount:
 

 

Accretable
 
(16,025
)
 
(17,362
)
Non-accretable
 
(68,109
)
 
(74,529
)
Allowance for loan losses
 
(3,549
)
 
(2,144
)
Total mortgage loans held for investment, net
 
$
195,432

 
$
211,050

Changes in Accretable Yield on Mortgage Loans Held for Investment 
The changes in accretable yield on loans transferred to mortgage loans held for investment, net were as follows: 

 
For the nine months ended September 30, 2014
 
Year ended December 31, 2013
Accretable Yield
 
 
 
Balance at the beginning of the period
$
17,362

 
$
19,749

Accretion
(2,258
)
 
(3,235
)
Reclassifications from (to) nonaccretable discount
921

 
848

Balance at the end of the period
$
16,025

 
$
17,362

Allowance for Loan Losses 
Mortgage Loans by Credit Quality Indicator 
Mortgage Servicing Rights (Tables)
Schedule of Assumptions for Fair Value of Mortgage Service Rights 
Nationstar used the following weighted average assumptions in estimating the fair value of MSRs for the dates indicated:
 
Credit Sensitive MSRs
September 30, 2014
 
December 31, 2013
Discount rate
12.15
%
 
14.17
%
Total prepayment speeds
17.24
%
 
20.34
%
Expected weighted-average life
5.59 years

 
4.63 years

Credit losses
7.35
%
 
22.87
%
Interest Rate Sensitive MSRs
September 30, 2014
 
December 31, 2013
Discount rate
9.60
%
 
10.50
%
Total prepayment speeds
9.77
%
 
8.97
%
Expected weighted-average life
7.01 years

 
7.88 years

Credit losses
2.22
%
 
9.12
%
Schedule of Servicing Assets at Fair Value 
The activity of MSRs carried at fair value is as follows for the dates indicated: 
 
For the nine months ended
September 30, 2014
 
For the year ended
December 31, 2013
Fair value at the beginning of the period
$
2,488,283

 
$
635,860

Additions:
 
 
 
Servicing resulting from transfers of financial assets
185,822

 
248,381

Purchases of servicing assets
353,450

 
1,545,584

Changes in fair value:
 
 
 
Due to changes in valuation inputs or assumptions used in the valuation model
49,779

 
355,586

Other changes in fair value
(179,125
)
 
(297,128
)
Fair value at the end of the period
$
2,898,209

 
$
2,488,283

UPB of forward loans serviced for others
 
 
 
Credit sensitive loans
$
242,991,593

 
$
266,757,777

Interest sensitive loans
75,980,389

 
56,056,362

Total owned loans
$
318,971,982

 
$
322,814,139

Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets [Table Text Block] 
The following table shows the hypothetical effect on the fair value of the MSRs using various unfavorable variations of the expected levels of certain key assumptions used in valuing these assets at September 30, 2014 and December 31, 2013:
 
Discount Rate
 
Total Prepayment
Speeds
 
Credit Losses
 
100 bps
Adverse
Change
200 bps
Adverse
Change
 
10%
Adverse
Change
20%
Adverse
Change
 
10%
Adverse
Change
20%
Adverse
Change
September 30, 2014
 
 
 
 
 
 
 
 
 Mortgage servicing rights
$
(109,213
)
$
(205,224
)
 
$
(107,917
)
$
(206,835
)
 
$
(37,922
)
$
(75,760
)
December 31, 2013
 
 
 
 
 
 
 
 
 Mortgage servicing rights
$
(74,681
)
$
(151,899
)
 
$
(101,590
)
$
(195,445
)
 
$
(89,958
)
$
(178,669
)
Activity of MSRs at Amortized Cost 
The activity of MSRs carried at amortized cost is as follows for the dates indicated:
 
 
For the nine months ended
 
For the year ended
 
September 30, 2014
 
December 31, 2013
 
Assets
 
Liabilities
 
Assets
 
Liabilities
Activity of MSRs at amortized cost
 
 
 
 
 
 
 
Balance at the beginning of the period
$
14,879

 
$
82,521

 
$
10,973

 
$
83,238

Additions:
 
 
 
 
 
 
 
Purchase /Assumptions of servicing rights/obligations
—

 
—

 
3,980

 
—

Deductions:
 
 
 
 
 
 
 
Amortization/Accretion
(2,448
)
 
(3,567
)
 
(74
)
 
(717
)
Balance at end of the period
$
12,431

 
$
78,954

 
$
14,879

 
$
82,521

Fair value at end of period
$
35,475

 
$
61,853

 
$
29,192

 
$
63,996

Other Assets (Tables)
Schedule of Other Assets
Other assets consisted of the following:
 
 
September 30, 2014
 
December 31, 2013
Loans subject to repurchase right from Ginnie Mae
$
83,547

 
$
120,736

Goodwill
54,701

 
38,820

Real estate owned (REO), net
53,264

 
45,632

Deferred financing costs
48,949

 
73,030

Intangible assets
20,187

 
21,737

Prepaid expenses
9,942

 
21,993

Collateral deposits on derivative instruments
5,487

 
25,932

Receivables from affiliates
5,479

 
8,861

Other
1,294

 
3,656

Total other assets
$
282,850

 
$
360,397

Accounts Payable (Tables)
Schedule of Payables and Accrued Liabilities
Payables and accrued liabilities consist of the following:
 
September 30, 2014
 
December 31, 2013
Payables to servicing and subservicing investors(1)
$
314,864

 
$
359,214

Payables to insurance carriers and insurance cancellation reserves
159,351

 
164,244

Taxes
100,190

 
35,961

Loans subject to repurchase from Ginnie Mae
83,547

 
120,736

MSR purchases payable including advances
65,374

 
135,759

Accrued interest
64,559

 
76,303

Accrued bonus and payroll
62,023

 
66,755

Repurchase reserves
48,252

 
40,695

Other(2)
446,735

 
308,783

Total payables and accrued liabilities
$
1,344,895

 
$
1,308,450

Derivative Financial Instruments (Tables)
Schedule of Derivative Instruments
The following tables provide the outstanding notional balances and fair values of outstanding positions for the dates indicated, and recorded gains/(losses) during the periods indicated:
 
 
Expiration
Dates
 
Outstanding
Notional
 
Fair
Value
 
Recorded
Gains /
(Losses)
For the nine months ended September 30, 2014
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
MORTGAGE LOANS HELD FOR SALE
 
 
 
 
 
 
 
Loan sale commitments
2014
 
$
13,933

 
$
609

 
$
602

DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2014
 
2,388,232

 
83,446

 
(3,682
)
Forward MBS trades
2014
 
1,101,888

 
1,488

 
(30,778
)
LPCs
2014
 
274,716

 
2,050

 
1,257

Interest rate swaps and caps
2018
 
147,600

 
1,349

 
2,157

LIABILITIES
 
 
 
 
 
 
 
DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2014
 
867

 
3

 
2,695

Interest rate swaps on ABS debt
2014 - 2017
 
249,704

 
183

 
651

       Forward MBS trades
2014
 
2,424,775

 
8,415

 
(5,110
)
LPCs
2014
 
76,385

 
1,020

 
669

 
 
 
 
 
 
 
 
For the year ended December 31, 2013
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
MORTGAGE LOANS HELD FOR SALE
 
 
 
 
 
 
 
Loan sale commitments
2014
 
$
57,965

 
$
7

 
$
(14
)
DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2014
 
3,083,131

 
87,128

 
(69,856
)
Forward MBS trades
2014
 
5,425,663

 
32,266

 
19,084

LPCs
2014
 
197,475

 
793

 
(460
)
Interest rate swaps and caps
2018
 
167,000

 
3,691

 
544

LIABILITIES
 
 
 
 
 
 
 
DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2014
 
260,407

 
2,698

 
(1,613
)
Interest rate swaps and caps (1) 

 
—

 
—

 
1,576

Interest rate swaps on ABS debt
2014-2017
 
424,269

 
834

 
1,012

Forward MBS trades
2014
 
1,351,870

 
3,305

 
8,713

LPCs
2014
 
204,486

 
1,689

 
(1,603
)
 
(1)
In January and June 2013, Nationstar terminated these interest rate swaps.
Indebtedness (Tables)
Schedule of Unsecured Senior Notes [Table Text Block] 
A summary of the balances of unsecured senior notes is presented below:
 
September 30, 2014
 
December 31, 2013
$285 million face value, 10.875% interest rate payable semi-annually, due April 2015(1)
$
—

 
$
283,153

$475 million face value, 6.500% interest rate payable semi-annually, due August 2018
475,000

 
475,000

$375 million face value, 9.625% interest rate payable semi-annually, due May 2019
378,756

 
379,360

$400 million face value, 7.875% interest rate payable semi-annually, due October 2020
400,565

 
400,634

$600 million face value, 6.500% interest rate payable semi-annually, due July 2021
605,330

 
605,915

$300 million face value, 6.500% interest rate payable semi-annually, due June 2022
300,000

 
300,000

Total
$
2,159,651

 
$
2,444,062

Schedule of Notes Payable 
A summary of the balances of notes payable for the dates indicated is presented below.
 
 
 
 
 
 
 
 
 
September 30, 2014
 
December 31, 2013
 
Interest Rate
 
Maturity Date
 
Collateral
 
Capacity Amount
 
Outstanding
 
Collateral Pledged
 
Outstanding
 
Collateral pledged
Servicing Segment Notes Payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MBS advance financing facility
LIBOR+2.50% to 4.00%
 
March 2015
 
Servicing advance receivables
 
$
775,000

 
$
455,629

 
$
514,841

 
$
560,814

 
$
651,953

Securities repurchase facility (2011)
LIBOR +3.50%
 
90 day revolving
 
Nonrecourse debt - Legacy Assets
 
—

 
34,613

 
55,603

 
35,546

 
55,603

Nationstar agency advance financing facility (1)
LIBOR+1.20% to 3.75%
 
October 2015
 
Servicing advance receivables
 
1,100,000

 
603,354

 
718,970

 
851,957

 
918,574

Reverse participations financing facility
LIBOR+4.00%
 
June 2014(7)
 
Reverse mortgage loans (2)
 
150,000

 
—

 
—

 
102,031

 
124,536

MBS advance financing facility (2012)
LIBOR+5.00%
 
April 2015
 
Servicing advance receivables
 
50,000

 
39,654

 
47,467

 
179,306

 
220,833

Nationstar Mortgage Advance Receivable
Trust (3)
LIBOR+1.15% to 5.30%
 
June 2014 (4) June 2016 (6) June 2018
 
Servicing advance receivables
 
475,000

 
399,846

 
450,345

 
1,240,940

 
1,347,410

MBS servicer advance facility (2014)
LIBOR + 3.50%
 
July 2015
 
Servicing advance receivables
 
80,000

 
68,123

 
92,165

 
—

 
—

Nationstar Servicer Advance Receivables Trust 2013 - BA (5)
LIBOR+2.50%
 
June 2014
 
Servicing advance receivables
 
1,000,000

 
—

 
—

 
1,579,830

 
1,764,296

 
 
1,601,219


1,879,391

 
4,550,424

 
5,083,205

 
 
 
September 30, 2014
 
December 31, 2013
 
Interest Rate
 
Maturity Date
 
Collateral
 
Capacity Amount
 
Outstanding
 
Collateral Pledged
 
Outstanding
 
Collateral pledged
Originations Segment Notes Payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$1.5 billion warehouse facility
LIBOR+2.00% to 2.875%
 
October 2015
 
Mortgage loans or MBS
 
$
1,500,000

 
$
698,300

 
$
793,342

 
$
797,281

 
$
891,648

$750 million warehouse facility
LIBOR+1.75% to 2.50%
 
April 2015
 
Mortgage loans or MBS
 
750,000

 
428,970

 
447,121

 
639,378

 
673,599

$500 million warehouse facility
LIBOR+1.75% to 2.75%
 
September 2015
 
Mortgage loans or MBS
 
500,000

 
253,713

 
260,443

 
111,980

 
115,629

$500 million warehouse facility
LIBOR+0.75% to 3.50%
 
June 2015
 
Mortgage loans or MBS
 
500,000

 
197,067

 
209,060

 
214,570

 
224,162

$500 million warehouse facility
LIBOR+ 1.50% to 2.25%
 
June 2015
 
Mortgage loans or MBS
 
500,000

 
226,249

 
231,696

 
447,926

 
477,980

$300 million warehouse facility
LIBOR +2.50%
 
September 2014(8)
 
Mortgage loans or MBS
 
300,000

 
—

 
—

 
159,435

 
166,482

$200 million warehouse facility
LIBOR+2.75%
 
February 2015
 
Mortgage loans or MBS
 
200,000

 
87,145

 
103,804

 
63,357

 
93,098

$75 million warehouse facility (HCM) (9)
LIBOR+ 2.25% to 2.875%
 
October 2015
 
Mortgage loans or MBS
 
75,000

 
40,080

 
41,786

 
—

 
—

ASAP+ facility
LIBOR+1.50%
 
Up to 45 days
 
GSE mortgage loans or GSE MBS
 
—

 
—

 
—

 
—

 
—

 
 
 

 
 
 
 
 
1,931,524

 
2,087,252

 
2,433,927

 
2,642,598

 
 
 
 
 
 
 
 
 
$
3,532,743

 
$
3,966,643

 
$
6,984,351

 
$
7,725,803


Schedule of Maturities of Long-term Debt 
expected maturities of Nationstar's unsecured senior notes based on contractual maturities are as follows:
Year
Amount
2014
$
—

2015
—

2016
—

2017
—

2018
475,000

Thereafter
1,675,000

Total
$
2,150,000

Fair Value Measurements (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis 
The estimated carrying amount and fair value of Nationstar’s financial instruments and other assets and liabilities measured at fair value on a recurring basis is as follows for the dates indicated:
 
 
 
September 30, 2014
 
 
 
Recurring Fair Value Measurements
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
ASSETS
 
 
 
 
 
 
 
Mortgage loans held for sale(1)
$
1,695,502

 
$
—

 
$
1,695,502

 
$
—

Mortgage servicing rights
2,898,209

 
—

 
—

 
2,898,209

Other assets:
 
 
 
 
 
 
 
IRLCs
83,446

 
—

 
83,446

 
—

Forward MBS trades
1,488

 
—

 
1,488

 
—

LPCs
2,050

 
—

 
2,050

 
—

       Interest rate swaps and caps
1,349

 
—

 
1,349

 
—

Total assets
$
4,682,044

 
$
—

 
$
1,783,835

 
$
2,898,209

LIABILITIES
 
 
 
 
 
 
 
Derivative financial instruments
 
 
 
 
 
 
 
IRLCs
$
3

 
$
—

 
$
3

 
$
—

Interest rate swaps on ABS debt
183

 
—

 
183

 
—

       Forward MBS trades
8,415

 
—

 
8,415

 
—

       LPCs
1,020

 
—

 
1,020

 
—

Mortgage servicing rights financing
44,449

 
—

 
—

 
44,449

Excess spread financing (at fair value)
1,062,544

 
—

 
—

 
1,062,544

Total liabilities
$
1,116,614

 
$
—

 
$
9,621

 
$
1,106,993

 
 
 
December 31, 2013
 
 
 
Recurring Fair Value Measurements
 
Total Fair Value
 
Level 1
 
Level 2
 
Level 3
ASSETS
 
 
 
 
 
 
 
Mortgage loans held for sale(1)
$
2,585,340

 
$
—

 
$
2,585,340

 
$
—

Mortgage servicing rights
2,488,283

 
—

 
—

 
2,488,283

Derivative financial instruments:

 

 

 

IRLCs
87,128

 
—

 
87,128

 
—

Forward MBS trades
32,266

 
—

 
32,266

 
—

LPCs
793

 
—

 
793

 
—

       Interest rate swaps and caps
3,691

 
—

 
3,691

 
—

Total assets
$
5,197,501

 
$
—

 
$
2,709,218

 
$
2,488,283

LIABILITIES
 
 
 
 
 
 
 
Derivative financial instruments
 
 
 
 
 
 
 
IRLCs
$
2,698

 
$
—

 
$
2,698

 
$
—

Interest rate swaps on ABS debt
834

 
—

 
834

 
—

Forward MBS trades
3,305

 
—

 
3,305

 
—

LPCs
1,689

 
—

 
1,689

 
—

Mortgage servicing rights financing
29,874

 
—

 
—

 
29,874

Excess spread financing (at fair value)
986,410

 
—

 
—

 
986,410

Total liabilities
$
1,024,810

 
$
—

 
$
8,526

 
$
1,016,284

(1) 
Based on the nature and risks of these assets, the Company has determined that presenting them as a single class is appropriate.
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation 
The table below presents a reconciliation for all of Nationstar’s Level 3 assets and liabilities measured at fair value on a recurring basis for the dates indicated:

 
 
ASSETS
 
LIABILITIES
For the three months ended September 30, 2014
 
Mortgage
servicing rights
 
Excess spread
financing
Mortgage Servicing Rights Financing
Beginning balance
 
$
2,678,134

 
$
1,036,038

$
33,452

Transfers into Level 3
 
—

 
—

—

Transfers out of Level 3
 
—

 
—

—

Total gains or losses
 
 
 
 
 
Included in earnings
 
(5,308
)
 
37,313

10,997

Included in other comprehensive income
 
—

 
—

—

Purchases, issuances, sales and settlements
 
 
 
 
 
Purchases
 
159,773

 
—

—

Issuances
 
65,610

 
39,833

—

Sales
 
—

 
—

—

Settlements
 
—

 
(50,640
)
—

Ending balance
 
$
2,898,209

 
$
1,062,544

$
44,449


 
 
ASSETS
 
LIABILITIES
For the nine months ended September 30, 2014
 
Mortgage
servicing rights
 
Excess spread
financing
Mortgage Servicing Rights Financing
Beginning balance
 
$
2,488,283

 
$
986,410

$
29,874

Transfers into Level 3
 
—

 
—

—

Transfers out of Level 3
 
—

 
—

—

Total gains or losses
 
 
 
 
 
Included in earnings
 
(129,346
)
 
61,080

(38,260
)
Included in other comprehensive income
 
—

 
—

—

Purchases, issuances, sales and settlements
 
 
 
 
 
Purchases
 
353,450

 
—

—

Issuances
 
185,822

 
150,951

52,835

Sales
 
—

 
—

—

Settlements
 
—

 
(135,897
)
—

Ending balance
 
$
2,898,209

 
$
1,062,544

$
44,449



 
 
ASSETS
 
LIABILITIES
For the year ended December 31, 2013
 
Mortgage
servicing rights
 
Excess spread
financing
Mortgage Servicing Rights Financing
Beginning balance
 
$
635,860

 
$
288,089

$
—

Transfers into Level 3
 
—

 
—

—

Transfers out of Level 3
 
—

 
—

—

Total gains or losses
 
 
 
 
 
Included in earnings
 
58,458

 
73,333

—

Included in other comprehensive income
 
—

 
—

—

Purchases, issuances, sales and settlements
 
 
 
 
 
Purchases
 
1,545,584

 
—

—

Issuances
 
248,381

 
755,344

29,874

Sales
 
—

 
—

—

Settlements
 
—

 
(130,356
)
—

Ending balance
 
$
2,488,283

 
$
986,410

$
29,874



Fair Value, by Balance Sheet Grouping 
The table below presents a summary of the estimated carrying amount and fair value of Nationstar’s financial instruments.

 
September 30, 2014
 
Carrying
Amount
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
269,735

 
$
269,735

 
$
—

 
$
—

Restricted cash
294,044

 
294,044

 
—

 
—

Mortgage loans held for sale
1,697,041

 
—

 
1,696,657

 
—

Mortgage loans held for investment, net
195,432

 
—

 
—

 
168,959

Reverse mortgage interests
1,956,952

 
—

 
—

 
1,937,199

Derivative financial instruments
88,333

 
—

 
88,333

 
—

Financial liabilities:
 
 
 
 
 
 
 
Notes payable
3,532,743

 
—

 
—

 
3,532,743

Unsecured senior notes
2,159,651

 
2,150,702

 
—

 
—

Derivative financial instruments
9,621

 
—

 
9,621

 
—

Nonrecourse debt - Legacy assets
78,481

 
—

 
—

 
89,018

Excess spread financing
1,062,544

 
—

 
—

 
1,062,544

Participating interest financing
1,367,382

 
—

 
1,336,722

 
—

Mortgage servicing rights financing liability
44,449

 
—

 
—

 
44,449

 
December 31, 2013
 
Carrying
Amount
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
441,902

 
$
441,902

 
$
—

 
$
—

Restricted cash
592,747

 
592,747

 
—

 
—

Mortgage loans held for sale
2,603,380

 
—

 
2,601,520

 
—

Mortgage loans held for investment, net
211,050

 
—

 
—

 
180,435

Reverse mortgage interests
1,434,506

 
—

 
—

 
1,405,197

Derivative financial instruments
123,878

 
—

 
123,878

 
—

Financial liabilities:
 
 
 
 
 
 
 
Notes payable
6,984,351

 
—

 
—

 
6,984,351

Unsecured senior notes
2,444,062

 
2,489,886

 
—

 
—

Derivative financial instruments
8,526

 
—

 
8,526

 
—

Nonrecourse debt - Legacy assets
89,107

 
—

 
—

 
95,345

Excess spread financing
986,410

 
—

 
—

 
986,410

Participating interest financing
1,103,490

 
—

 
1,093,747

 
—

Mortgage servicing rights financing liability
29,874

 
—

 
—

 
29,874


Business Segment Reporting (Tables)
Schedule of Segment Reporting Information
The following tables are a presentation of financial information by segment for the periods indicated:
 
 
Three months ended September 30, 2014
 
 
Servicing
 
Originations
 
Solutionstar
 
Total Operating
Segments
 
Corporate and Other
 
Eliminations
 
Consolidated
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
 
$
253,434

 
$
105

 
$
4

 
$
253,543

 
$
(1,002
)
 
$
(17,133
)
 
$
235,408

Other fee income
 
28,113

 
10,334

 
85,519

 
123,966

 
2,135

 
—

 
126,101

Total fee income
 
281,547

 
10,439

 
85,523

 
377,509

 
1,133

 
(17,133
)
 
361,509

Gain/(loss) on mortgage loans held for sale
 
(1,147
)
 
128,355

 
—

 
127,208

 
(1,172
)
 
16,779

 
142,815

Total revenues
 
280,400

 
138,794

 
85,523

 
504,717

 
(39
)
 
(354
)
 
504,324

Total expenses and impairments
 
160,975

 
89,369

 
50,006

 
300,350

 
26,874

 
—

 
327,224

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
18,369

 
18,903

 
—

 
37,272

 
5,688

 
354

 
43,314

Interest expense
 
(48,651
)
 
(17,085
)
 
(352
)
 
(66,088
)
 
(50,585
)
 
—

 
(116,673
)
Gain on sale of property
 
—

 
—

 
—

 
—

 
4,898

 
—

 
4,898

Gain (loss) on interest rate swaps and caps
 
795

 
—

 
—

 
795

 
145

 
—

 
940

Total other income (expense)
 
(29,487
)
 
1,818

 
(352
)
 
(28,021
)
 
(39,854
)
 
354

 
(67,521
)
Income (loss) before taxes
 
$
89,938

 
$
51,243

 
$
35,165

 
$
176,346

 
$
(66,767
)
 
$
—

 
$
109,579

Depreciation and amortization
 
$
2,886

 
$
1,049

 
$
922

 
$
4,857

 
$
4,705

 
$
—

 
$
9,562

Total assets
 
8,370,695

 
1,929,239

 
319,910

 
10,619,844

 
257,200

 
—

 
10,877,044

 
 
Three months ended September 30, 2013
 
 
Servicing
 
Originations
 
Solutionstar
 
Total Operating
Segments
 
Corporate and Other
 
Eliminations
 
Consolidated
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
 
$
357,262

 
$
(1
)
 
$
13

 
$
357,274

 
$
551

 
$
(16,146
)
 
$
341,679

Other fee income
 
19,782

 
23,117

 
41,254

 
84,153

 
50

 
—

 
84,203

Total fee income
 
377,044

 
23,116

 
41,267

 
441,427

 
601

 
(16,146
)
 
425,882

Gain/(loss) on mortgage loans held for sale
 
124

 
190,186

 
—

 
190,310

 
(101
)
 
15,747

 
205,956

Total revenues
 
377,168

 
213,302

 
41,267

 
631,737

 
500

 
(399
)
 
631,838

Total expenses and impairments
 
158,247

 
176,600

 
31,964

 
366,811

 
29,043

 
—

 
395,854

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
31,913

 
28,273

 
—

 
60,186

 
3,318

 
399

 
63,903

Interest expense
 
(85,653
)
 
(32,879
)
 
(103
)
 
(118,635
)
 
(49,580
)
 
—

 
(168,215
)
Gain (loss) on interest rate swaps and caps
 
94

 
—

 
—

 
94

 
306

 
—

 
400

Total other income (expense)
 
(53,646
)
 
(4,606
)
 
(103
)
 
(58,355
)
 
(45,956
)
 
399

 
(103,912
)
Income (loss) before taxes
 
$
165,275

 
$
32,096

 
$
9,200

 
$
206,571

 
$
(74,499
)
 
$
—

 
$
132,072

Depreciation and amortization
 
$
3,659

 
$
1,914

 
$
409

 
$
5,982

 
$
1,013

 
$
—

 
$
6,995

Total assets
 
10,067,020

 
4,256,216

 
38,977

 
14,362,213

 
2,705,859

 
—

 
17,068,072



 
 
Nine months ended September 30, 2014
 
 
Servicing
 
Originations
 
Solutionstar
 
Total Operating
Segments
 
Corporate and Other
 
Eliminations
 
Consolidated
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
 
$
787,972

 
$
317

 
$
17

 
$
788,306

 
$
(429
)
 
$
(54,206
)
 
$
733,671

Other fee income
 
71,722

 
38,071

 
233,869

 
343,662

 
2,704

 
—

 
346,366

Total fee income
 
859,694

 
38,388

 
233,886

 
1,131,968

 
2,275

 
(54,206
)
 
1,080,037

Gain/(loss) on mortgage loans held for sale
 
(2,972
)
 
395,756

 
—

 
392,784

 
(2,223
)
 
53,106

 
443,667

Total revenues
 
856,722

 
434,144

 
233,886

 
1,524,752

 
52

 
(1,100
)
 
1,523,704

Total expenses and impairments
 
511,998

 
291,503

 
134,725

 
938,226

 
56,842

 
—

 
995,068

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
59,191

 
57,751

 
—

 
116,942

 
12,156

 
1,100

 
130,198

Interest expense
 
(199,464
)
 
(56,333
)
 
(496
)
 
(256,293
)
 
(156,402
)
 
—

 
(412,695
)
Gain on sale of property

 
—

 
—

 
—

 
—

 
4,898

 
—

 
4,898

Gain (loss) on interest rate swaps and caps
 
2,156

 
—

 
—

 
2,156

 
652

 
—

 
2,808

Total other income (expense)
 
(138,117
)
 
1,418

 
(496
)
 
(137,195
)
 
(138,696
)
 
1,100

 
(274,791
)
Income (loss) before taxes
 
$
206,607

 
$
144,059

 
$
98,665

 
$
449,331

 
$
(195,486
)
 
$
—

 
$
253,845

Depreciation and amortization
 
$
11,453

 
$
7,754

 
$
2,764

 
$
21,971

 
$
7,992

 
$
—

 
$
29,963

Total assets
 
8,370,695

 
1,929,239

 
319,910

 
10,619,844

 
257,200

 
—

 
10,877,044

 
 
Nine months ended September 30, 2013
 
 
Servicing
 
Originations
 
Solutionstar
 
Total Operating
Segments
 
Corporate and Other
 
Eliminations
 
Consolidated
REVENUES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
 
$
848,324

 
$
95

 
$
41

 
$
848,460

 
$
1,322

 
$
(47,198
)
 
$
802,584

Other fee income
 
58,795

 
36,479

 
91,694

 
186,968

 
(91
)
 
—

 
186,877

Total fee income
 
907,119

 
36,574

 
91,735

 
1,035,428

 
1,231

 
(47,198
)
 
989,461

Gain/(loss) on mortgage loans held for sale
 
(61
)
 
631,212

 
—

 
631,151

 
—

 
45,953

 
677,104

Total revenues
 
907,058

 
667,786

 
91,735

 
1,666,579

 
1,231

 
(1,245
)
 
1,666,565

Total expenses and impairments
 
432,219

 
424,368

 
75,906

 
932,493

 
71,783

 
—

 
1,004,276

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
66,961

 
65,936

 
—

 
132,897

 
11,806

 
1,245

 
145,948

Interest expense
 
(195,089
)
 
(56,732
)
 
(195
)
 
(252,016
)
 
(126,484
)
 
—

 
(378,500
)
Gain (loss) on interest rate swaps and caps
 
1,466

 
—

 
—

 
1,466

 
991

 
—

 
2,457

Total other income (expense)
 
(126,662
)
 
9,204

 
(195
)
 
(117,653
)
 
(113,687
)
 
1,245

 
(230,095
)
Income (loss) before taxes
 
$
348,177

 
$
252,622

 
$
15,634

 
$
616,433

 
$
(184,239
)
 
$
—

 
$
432,194

Depreciation and amortization
 
$
9,315

 
$
4,149

 
712

 
$
14,176

 
$
2,510

 
$
—

 
$
16,686

Total assets
 
10,067,020

 
4,256,216

 
38,977

 
14,362,213

 
2,705,859

 
—

 
17,068,072

Guarantor Financial Statement Information (Tables)
Consolidating Balance Sheets 
NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2013
(IN THOUSANDS)

 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
422,268

 
$
3,907

 
$
15,727

 
$
—

 
$
441,902

Restricted cash
—

 
312,120

 
3

 
280,624

 
—

 
592,747

Accounts receivable
—

 
1,569,021

 
2,582

 
4,064,879

 
—

 
5,636,482

Mortgage loans held for sale
—

 
2,603,380

 
—

 
—

 
—

 
2,603,380

Mortgage loans held for investment, net
—

 
2,786

 
—

 
208,264

 
—

 
211,050

Reverse mortgage interests
—

 
1,434,506

 
—

 
—

 
—

 
1,434,506

Mortgage servicing rights
—

 
2,503,162

 
—

 
—

 
—

 
2,503,162

Investment in subsidiaries
968,027

 
181,545

 
—

 
—

 
(1,149,572
)
 
—

Property and equipment, net
—

 
115,765

 
855

 
2,565

 
—

 
119,185

Derivative financial instruments
—

 
120,187

 
—

 
3,691

 
—

 
123,878

Other assets
21,872

 
4,683,749

 
323,346

 
3,373,048

 
(8,041,618
)
 
360,397

Total assets
$
989,899

 
$
13,948,489

 
$
330,693

 
$
7,948,798

 
$
(9,191,190
)
 
$
14,026,689

Liabilities and members’ equity
 
 
 
 
 
 
 
 
 
 
 
Notes payable
$
—

 
$
3,311,625

 
$
—

 
$
3,672,726

 
$
—

 
$
6,984,351

Unsecured senior notes
—

 
2,444,062

 
—

 
—

 
—

 
2,444,062

Payables and accrued liabilities
—

 
1,319,172

 
5,950

 
14,791

 
(31,463
)
 
1,308,450

Payables to affiliates
—

 
3,694,782

 
116,349

 
4,199,023

 
(8,010,154
)
 
—

Derivative financial instruments
—

 
8,526

 
—

 
—

 
—

 
8,526

Mortgage servicing liabilities
—

 
82,521

 
—

 
—

 
—

 
82,521

Other nonrecourse debt
—

 
2,119,774

 
—

 
89,107

 
—

 
2,208,881

Total liabilities
—

 
12,980,462

 
122,299

 
7,975,647

 
(8,041,617
)
 
13,036,791

Total equity
989,899

 
968,027

 
208,394

 
(26,849
)
 
(1,149,573
)
 
989,898

Total liabilities and equity
$
989,899

 
$
13,948,489

 
$
330,693

 
$
7,948,798

 
$
(9,191,190
)
 
$
14,026,689

NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2014
(IN THOUSANDS)
Assets
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Cash and cash equivalents
$
—

 
$
256,513

 
$
691

 
$
12,531

 
$
—

 
$
269,735

Restricted cash
—

 
195,522

 
—

 
98,522

 
—

 
294,044

Accounts receivable
—

 
2,989,520

 
2,115

 
68,747

 
—

 
3,060,382

Mortgage loans held for sale
—

 
1,655,677

 
—

 
41,364

 
—

 
1,697,041

Mortgage loans held for investment, net
—

 
1,549

 
—

 
193,883

 
—

 
195,432

Reverse mortgage interests
—

 
1,956,952

 
—

 
—

 
—

 
1,956,952

Mortgage servicing rights
—

 
2,910,640

 
—

 
—

 
—

 
2,910,640

Investment in subsidiaries
1,181,205

 
305,193

 
—

 
—

 
(1,486,398
)
 
—

Property and equipment, net
—

 
108,980

 
835

 
11,820

 
—

 
121,635

Derivative financial instruments
—

 
83,627

 
—

 
4,706

 
—

 
88,333

Other assets
17,118

 
523,979

 
268,420

 
1,036,860

 
(1,563,527
)
 
282,850

Total assets
$
1,198,323

 
$
10,988,152

 
$
272,061

 
$
1,468,433

 
$
(3,049,925
)
 
$
10,877,044

Liabilities and stockholders’ equity
 
 
 
 
 
 
 
 
 
 
 
Notes payable
$
—

 
$
2,489,464

 
$
—

 
$
1,043,279

 
$
—

 
$
3,532,743

Unsecured senior notes
—

 
2,159,651

 
—

 
—

 
—

 
2,159,651

Payables and accrued liabilities
—

 
1,343,809

 
—

 
32,619

 
(31,533
)
 
1,344,895

Payables to affiliates
—

 
1,251,073

 
116,349

 
164,572

 
(1,531,994
)
 
—

Derivative financial instruments
—

 
9,621

 
—

 
—

 
—

 
9,621

Mortgage servicing liabilities
—

 
78,954

 
—

 
—

 
—

 
78,954

Other nonrecourse debt
—

 
2,474,375

 
—

 
78,481

 
—

 
2,552,856

Total liabilities
—

 
9,806,947

 
116,349

 
1,318,951

 
(1,563,527
)
 
9,678,720

Total equity
1,198,323

 
1,181,205

 
155,712

 
149,482

 
(1,486,398
)
 
1,198,324

Total liabilities and equity
$
1,198,323

 
$
10,988,152

 
$
272,061

 
$
1,468,433

 
$
(3,049,925
)
 
$
10,877,044

Consolidating Statements of Operations 
NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 (IN THOUSANDS)
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
$
—

 
$
252,537

 
$
4

 
$
—

 
$
(17,133
)
 
$
235,408

Other fee income
—

 
58,284

 
(12,973
)
 
80,790

 
—

 
126,101

Total fee income
—

 
310,821

 
(12,969
)
 
80,790

 
(17,133
)
 
361,509

Gain on mortgage loans held for sale
—

 
121,912

 
—

 
4,124

 
16,779

 
142,815

Total revenues
—

 
432,733

 
(12,969
)
 
84,914

 
(354
)
 
504,324

Expenses and impairments:
 
 
 
 
 
 
 
 
 
 
 
Salaries, wages and benefits
—

 
135,686

 
750

 
24,321

 
—

 
160,757

General and administrative
—

 
130,356

 
(3,002
)
 
29,714

 
—

 
157,068

Loss on foreclosed real estate and other
—

 
1,230

 
—

 
1,501

 
—

 
2,731

Occupancy
—

 
5,606

 
44

 
1,018

 
—

 
6,668

Total expenses and impairments
—

 
272,878

 
(2,208
)
 
56,554

 
—

 
327,224

Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
Interest income
—

 
38,403

 
—

 
4,557

 
354

 
43,314

Interest expense
—

 
(106,771
)
 
—

 
(9,902
)
 
—

 
(116,673
)
Gain on disposal of property
—

 
4,898

 
—

 
—

 
—

 
4,898

Gain/(Loss) on interest rate swaps and caps
—

 
145

 
—

 
795

 
—

 
940

Gain/(loss) from subsidiaries
111,225

 
13,049

 
—

 
—

 
(124,274
)
 
—

Total other income (expense)
111,225

 
(50,276
)
 
—

 
(4,550
)
 
(123,920
)
 
(67,521
)
Income before taxes
111,225

 
109,579

 
(10,761
)
 
23,810

 
(124,274
)
 
109,579

Income tax expense/(benefit)
—

 
(1,700
)
 
—

 
—

 
—

 
(1,700
)
Net income/(loss)
111,225

 
111,279

 
(10,761
)
 
23,810

 
(124,274
)
 
111,279

Less: Net loss attributable to noncontrolling interests
—

 
54

 
—

 
—

 
—

 
54

Net income/(loss) excluding noncontrolling interests
$
111,225

 
$
111,225

 
$
(10,761
)
 
$
23,810

 
$
(124,274
)
 
$
111,225



NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013
(IN THOUSANDS)
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Revenues:
 
 
 
 
 
 
 
 
 
 
 
Servicing fee income
$
—

 
$
357,832

 
$
—

 
$
—

 
$
(16,153
)
 
$
341,679

Other fee income
—

 
23,404

 
58,780

 
2,019

 
—

 
84,203

Total fee income
—

 
381,236

 
58,780

 
2,019

 
(16,153
)
 
425,882

Gain on mortgage loans held for sale
—

 
190,202

 
—

 
—

 
15,754

 
205,956

Total revenues
—

 
571,438

 
58,780

 
2,019

 
(399
)
 
631,838

Expenses and impairments:

 

 

 

 

 

Salaries, wages and benefits
—

 
181,366

 
11,799

 
93

 
—

 
193,258

General and administrative
—

 
167,409

 
19,566

 
542

 
—

 
187,517

Loss on foreclosed real estate and other
—

 
5,221

 
—

 
4,277

 
—

 
9,498

Occupancy
—

 
5,237

 
344

 
—

 
—

 
5,581

Total expenses and impairments
—

 
359,233

 
31,709

 
4,912

 
—

 
395,854

Other income / (expense):

 

 

 

 

 

Interest income
—

 
60,150

 
—

 
3,354

 
399

 
63,903

Interest expense
—

 
(132,701
)
 
—

 
(35,514
)
 
—

 
(168,215
)
Gain on interest rate swaps and caps
—

 
306

 
—

 
94

 
—

 
400

Gain /(loss) from subsidiaries
81,885

 
(7,888
)
 
—

 
—

 
(73,997
)
 
—

Total other income /(expense)
81,885

 
(80,133
)
 
—

 
(32,066
)
 
(73,598
)
 
(103,912
)
Income before taxes
81,885

 
132,072

 
27,071

 
(34,959
)
 
(73,997
)
 
132,072

Income tax expense
—

 
50,187

 
—

 
—

 
—

 
50,187

Net income (loss)
$
81,885

 
$
81,885

 
$
27,071

 
$
(34,959
)
 
$
(73,997
)
 
$
81,885



 

Consolidating Statements of Cash Flows 
NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013
(IN THOUSANDS)
 
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Operating activities:
 
 
 
 
 
 
 
 
 
 
 
 
Net income/(loss)
 
$
267,961

 
$
267,961

 
$
69,892

 
$
(69,152
)
 
$
(268,701
)
 
$
267,961

Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
 
 
 

 

 

 
 
 
 
(Gain)/loss from subsidiaries
 
(267,961
)
 
(740
)
 
—

 
—

 
268,701

 
—

Share-based compensation
 
—

 
8,140

 
—

 
—

 
—

 
8,140

Net tax effect of stock grants
 
—

 
(2,660
)
 
—

 
—

 
—

 
(2,660
)
Loss on foreclosed real estate and other
 
—

 
9,288

 
—

 
4,075

 
—

 
13,363

Gain on mortgage loans held for sale
 
—

 
(631,144
)
 
—

 
—

 
(45,960
)
 
(677,104
)
Mortgage loans originated and purchased, net of fees
 
—

 
(17,166,460
)
 
—

 
—

 
—

 
(17,166,460
)
Proceeds on sale of and payments of mortgage loans held for sale
 
—

 
15,314,755

 
—

 
15,771

 
45,960

 
15,376,486

(Gain) / loss on derivatives including ineffectiveness
 
—

 
(726
)
 
—

 
(1,731
)
 
—

 
(2,457
)
Cash settlement on derivatives financial instruments
 
—

 
—

 
—

 
(4,544
)
 
—

 
(4,544
)
Depreciation and amortization
 
—

 
15,987

 
651

 
48

 
—

 
16,686

Amortization (accretion) of premiums/discounts
 
—

 
40,937

 
—

 
(1,676
)
 
—

 
39,261

Fair value changes in excess spread financing
 
—

 
33,229

 
—

 
—

 
—

 
33,229

Fair value changes and amortization/accretion of mortgage servicing rights
 
—

 
(38,117
)
 
—

 
—

 
—

 
(38,117
)
Fair value change in mortgage servicing rights financing liability
 
—

 
—

 
—

 
—

 
—

 
—

Changes in assets and liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Accounts receivable, including servicing' advances, net
 
—

 
(68,473
)
 
(27,589
)
 
(58
)
 
—

 
(96,120
)
Reverse mortgage funded advances
 
—

 
(460,534
)
 
—

 
—

 
—

 
(460,534
)
Other assets
 
3,894

 
3,076,784

 
(50,016
)
 
(3,379,816
)
 
17,299

 
(331,855
)
Payable and accrued liabilities
 
—

 
507,301

 
10,954

 
2,105

 
(17,299
)
 
503,061

Net cash attributable to operating activities
 
3,894

 
905,528

 
3,892

 
(3,434,978
)
 
—

 
(2,521,664
)
 
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Investing activities:
 
 
 
 
 
 
 
 
 
 
 
 
Property and equipment additions, net of disposals
 
—

 
(45,767
)
 
(1,064
)
 
(1,052
)
 
—

 
(47,883
)
Purchase of reverse mortgage servicing rights and interests
 
—

 
(15,059
)
 
—

 
—

 
—

 
(15,059
)
Purchase of forward mortgage servicing rights, net of liabilities incurred
 
—

 
(2,331,658
)
 
—

 
—

 
—

 
(2,331,658
)
Proceeds on sale of servicer advances
 
—

 
—

 
—

 
—

 
—

 
—

Loan repurchases from Ginnie Mae
 
—

 


 
—

 
—

 
—

 
—

Proceeds from sales of REO
 
—

 
60,389

 
—

 
—

 
—

 
60,389

Acquisitions, net
 
—

 
(78,200
)
 
—

 
—

 
—

 
(78,200
)
Net cash attributable to investing activities
 
—

 
(2,410,295
)
 
(1,064
)
 
(1,052
)
 
—

 
(2,412,411
)
Financing activities:
 
 
 
 
 
 
 
 
 
 
 
 
Transfers (to)/from restricted cash, net
 
—

 
(274,085
)
 
(2,454
)
 
(71,960
)
 
—

 
(348,499
)
Issuance of unsecured senior notes, net
 
—

 
1,365,244

 
—

 
—

 
—

 
1,365,244

Debt financing costs
 
—

 
(46,784
)
 
—

 
—

 
—

 
(46,784
)
Increase/(decrease) in notes payable
 
—

 
(487,360
)
 
—

 
3,529,983

 
—

 
3,042,623

Issuance of excess spread financing
 
—

 
707,640

 
—

 
—

 
—

 
707,640

Repayment of excess servicing spread financing
 
—

 
(77,505
)
 
—

 
—

 
—

 
(77,505
)
Increase in participating interest financing in reverse mortgage interests
 
—

 
422,787

 
—

 
—

 
—

 
422,787

Proceeds from mortgage servicing rights financing
 
—

 
—

 
—

 
—

 
—

 
—

Repayment of nonrecourse debt–Legacy assets
 
—

 
—

 
—

 
(9,925
)
 
—

 
(9,925
)
Due to financial services company
 
—

 

 
—

 
—

 
—

 
—

Contributions from joint venture member to noncontrolling interest
 
—

 
4,990

 
—

 
—

 
—

 
4,990

Net tax benefit for stock grants issued
 
2,660

 
—

 
—

 
—

 
—

 
2,660

Redemption of shares for stock vesting
 
(6,554
)
 
—

 
—

 
—

 
—

 
(6,554
)
Net cash attributable to financing activities
 
(3,894
)
 
1,614,927

 
(2,454
)
 
3,448,098

 
—

 
5,056,677

Net increase in cash and cash equivalents
 
—

 
110,160

 
374

 
12,068

 
—

 
122,602

Cash and cash equivalents at beginning of period
 
—

 
152,248

 
401

 
—

 
—

 
152,649

Cash and cash equivalents at end of period
 
$
—

 
$
262,408

 
$
775

 
$
12,068

 
$
—

 
$
275,251

NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
(IN THOUSANDS)
 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Operating activities:
 
 
 
 
 
 
 
 
 
 
 
Net income/(loss)
$
201,716

 
$
201,716

 
$
39,591

 
$
41,459

 
$
(282,766
)
 
$
201,716

Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
 
 
 
 
 
 
 
 
 
 
 
(Gain)/loss from subsidiaries
(201,716
)
 
(81,050
)
 
—

 
—

 
282,766

 
—

Share-based compensation
—

 
11,344

 
—

 
—

 
—

 
11,344

Net tax effect of stock grants
—

 
(2,197
)
 
—

 
—

 
—

 
(2,197
)
Loss on foreclosed real estate and other
—

 
(160
)
 
—

 
5,986

 
—

 
5,826

Gain on mortgage loans held for sale
—

 
(386,461
)
 
—

 
(4,100
)
 
(53,106
)
 
(443,667
)
Mortgage loans originated and purchased, net of fees
—

 
(16,548,058
)
 
—

 
—

 
—

 
(16,548,058
)
Proceeds on sale of and payments of mortgage loans held for sale
—

 
17,729,442

 
—

 
(25,493
)
 
53,106

 
17,757,055

(Gain)/loss on derivatives including ineffectiveness
—

 
(652
)
 
—

 
(2,156
)
 
—

 
(2,808
)
Cash settlement on derivative financial instruments
—

 
—

 
—

 
1,352

 
—

 
1,352

Depreciation and amortization
—

 
27,148

 
89

 
2,726

 
—

 
29,963

Amortization (accretion) of premiums/discounts
—

 
18,578

 
—

 
(1,918
)
 
—

 
16,660

Fair value changes in excess spread financing
—

 
61,080

 
—

 
—

 
—

 
61,080

Fair value changes and amortization/accretion of mortgage servicing rights
—

 
128,227

 
—

 
—

 
—

 
128,227

Fair value change in mortgage servicing rights liability
—

 
(38,260
)
 
—

 
—

 
—

 
(38,260
)
Changes in assets and liabilities:
 
 
 
 
 
 
 
 
 
 

Accounts receivable, including servicing advances, net
—

 
(3,395,051
)
 
467

 
3,996,133

 
—

 
601,549

Reverse mortgage funded advances
—

 
(572,544
)
 
—

 
—

 
—

 
(572,544
)
Other assets
4,755

 
1,659,322

 
(37,347
)
 
(1,564,513
)
 
69

 
62,286

Payables and accrued liabilities
—

 
(38,452
)
 
(5,950
)
 
19,011

 
(69
)
 
(25,460
)
Net cash attributable to operating activities
4,755

 
(1,226,028
)
 
(3,150
)
 
2,468,487

 
—

 
1,244,064

 
Nationstar
 
Issuer
 
Guarantor
(Subsidiaries)
 
Non-Guarantor
(Subsidiaries)
 
Eliminations
 
Consolidated
Investing activities:
 
 
 
 
 
 
 
 
 
 
 
Property and equipment additions, net of disposals
—

 
(29,517
)
 
(69
)
 
(11,981
)
 
—

 
(41,567
)
Gain on disposal of building
—

 
10,412

 
—

 
—

 
—

 
10,412

Purchase of forward mortgage servicing rights, net of liabilities incurred
—

 
(317,247
)
 
—

 
—

 
—

 
(317,247
)
Proceeds from sale of servicer advances
—

 
512,527

 
—

 
—

 
—

 
512,527

Loan repurchases from Ginnie Mae
—

 
(9,134
)
 
—

 
—

 
—

 
(9,134
)
Proceeds from sales of REO
—

 
70,480

 
—

 
—

 
—

 
70,480

Acquisitions, net
—

 
(18,000
)
 
—

 
—

 
—

 
(18,000
)
Net cash attributable to investing activities
—

 
219,521

 
(69
)
 
(11,981
)
 
—

 
207,471

Financing activities:
 
 
 
 
 
 
 
 
 
 
 
Transfers (to)/from restricted cash, net
—

 
100,185

 
3

 
182,101

 
—

 
282,289

Repayment of unsecured senior notes
—

 
(285,000
)
 
—

 
—

 
—

 
(285,000
)
Debt financing costs
—

 
(11,461
)
 
—

 
—

 
—

 
(11,461
)
Increase/(decrease) in notes payable
—

 
687,306

 
—

 
(2,629,447
)
 
—

 
(1,942,141
)
Issuance of excess spread financing
—

 
150,951

 
—

 
—

 
—

 
150,951

Repayment of excess spread financing
—

 
(135,897
)
 
—

 
—

 
—

 
(135,897
)
Increase in participating interest financing in reverse mortgage interests
—

 
279,636

 
—

 
—

 
—

 
279,636

Proceeds from mortgage servicing rights financing
—

 
52,835

 
—

 
—

 
—

 
52,835

Repayment of nonrecourse debt–Legacy assets
—

 
—

 
—

 
(12,356
)
 
—

 
(12,356
)
Net tax benefit for stock grants issued
—

 
2,197

 
—

 
—

 
—

 
2,197

Redemption of shares for stock vesting
(4,755
)
 
—

 
—

 
—

 
—

 
(4,755
)
Net cash attributable to financing activities
(4,755
)
 
840,752

 
3

 
(2,459,702
)
 
—

 
(1,623,702
)
Net increase in cash and cash equivalents
—

 
(165,755
)
 
(3,216
)
 
(3,196
)
 
—

 
(172,167
)
Cash and cash equivalents at beginning of period
—

 
422,268

 
3,907

 
15,727

 
—

 
441,902

Cash and cash equivalents at end of period
$
—

 
$
256,513

 
$
691

 
$
12,531

 
$
—

 
$
269,735

Variable Interest Entities and Securitizations - Assets and Liabilities of Consolidated VIEs (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Reverse Mortgage Interest, Unpaid Principal Balance, Securitized
$ 1,296,420 
$ 1,039,645 
Participating interest financing
1,367,382 
1,080,718 
Residential Mortgage
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Assets
1,464,857 
4,517,961 
Liabilities
1,083,038 
3,766,075 
Residential Mortgage |
Restricted Cash
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Assets
98,115 
272,188 
Residential Mortgage |
Reverse Mortgages
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Assets
0 
0 
Residential Mortgage |
Accounts Receivable
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Assets
1,170,414 
4,031,444 
Residential Mortgage |
Mortgage Loans Held for Investment
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Assets
193,429 
208,263 
Residential Mortgage |
Derivative Financial Instruments, Assets
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Assets
1,349 
3,691 
Residential Mortgage |
Real Estate Owned
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Assets
1,550 
2,375 
Residential Mortgage |
Notes Payable
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Liabilities
1,003,200 
3,672,726 
Residential Mortgage |
Payables and Accrued Liabilities
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Liabilities
1,357 
4,242 
Residential Mortgage |
Nonrecourse Debt-Legacy Assets
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Liabilities
78,481 
89,107 
Residential Mortgage |
Participating Mortgages
 
 
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
 
 
Liabilities
$ 0 
$ 0 
Variable Interest Entities and Securitizations - Securitization Trusts (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
 
 
 
 
 
Financing Receivable, Recorded Investment, Past Due
$ 887,105 
$ 1,183,582 
$ 887,105 
$ 1,183,582 
 
Total collateral balances
3,394,555 
 
3,394,555 
 
3,843,694 
Total certificate balances
3,368,452 
 
3,368,452 
 
3,831,473 
Total mortgage servicing rights at fair value
2,898,209 
 
2,898,209 
 
2,488,283 
Credit Losses
$ 71,757 
$ 57,879 
$ 219,189 
$ 185,612 
 
Variable Interest Entities and Securitizations - Cash Flows from Securitization Trust (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Variable Interest Entities and Securitizations [Abstract]
 
 
 
 
Servicing Fees Received
$ 2,632 
$ 9,515 
$ 20,818 
$ 29,219 
Loan Repurchases
$ 0 
$ 0 
$ 0 
$ 0 
Accounts Receivable - Schedule of Accounts Receivable (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Receivables [Abstract]
 
 
Servicer advances, net of purchase discount
$ 2,594,106 
$ 5,099,670 
Reverse mortgage - other
201,541 
93,494 
Receivables from trusts
158,861 
134,440 
Accrued servicing fees
84,171 
105,917 
Accrued interest
2,805 
6,970 
Other
18,898 
195,991 
Total accounts receivable
$ 3,060,382 
$ 5,636,482 
Accounts Receivable - Narrative (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Jun. 23, 2014
Apr. 30, 2014
Mar. 7, 2014
Feb. 28, 2014
Jan. 30, 2014
Dec. 31, 2013
Receivables [Abstract]
 
 
 
 
 
 
 
 
 
Accretion of Service Advances Discount
$ 11.3 
$ 8.4 
$ 22.5 
 
 
 
 
 
 
Servicer Advances sold to unaffiliated third party
 
2,200.0 
 
303.8 
617.5 
299.1 
756.2 
253.5 
2,700.0 
Eliminated Servicer Advance, Discount due to advance sale
 
52.9 
 
 
 
 
 
 
 
Allowance for Doubtful Accounts Receivable
 
$ 94.4 
 
 
 
 
 
 
$ 40.7 
Mortgage Loans Held for Sale and Investment - Mortgage Loans Held for Sale (Details) (USD $)
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Loans repurchased from securitization pool, during the period
$ 3,100,000,000 
$ 700,000,000 
 
 
Loans Receivable Held-for-sale, Reconciliation to Cash Flow, Deductions from Held-for-sale
(17,449,261,000)
(14,780,987,000)
 
 
Loans Receivable Held-for-Sale, Reconciliation to Cash Flow, Transfer from Held-for-sale to Held-for-investment due to Bankruptcy and Foreclosures
5,136,000 
(2,450,000)
 
 
Mortgage loans held for sale - unpaid principal balance
1,629,030,000 
 
2,532,881,000 
 
Mark-to-market adjustment
68,011,000 
 
70,499,000 
 
Total mortgage loans held for sale
1,697,041,000 
3,868,460,000 
2,603,380,000 
1,480,537,000 
Mortgage Loans Held for Sale nonaccrual basis
36,600,000 
 
69,500,000 
 
Fair Value, Mortgage Loans Held for Sale non-accrual status
$ 30,800,000 
 
$ 63,500,000 
 
Mortgage Loans Held for Sale and Investment - Reconciliation to Cash Flow (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Mortgage Servicing Right [Member]
Dec. 31, 2013
Mortgage Servicing Right [Member]
Servicing Asset at Fair Value, Additions, Servicing Resulting From Transfers of Financial Assets
 
 
$ 185,822 
$ 248,381 
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward]
 
 
 
 
Mortgage loans held for sale - beginning balance
2,603,380 
1,480,537 
 
 
Mortgage loans originated and purchased, net of fees
16,548,058 
17,166,460 
 
 
Loans Receivable Held-for-Sale, Reconciliation to Cash Flow, Transfer from Held-for-sale to Held-for-investment due to Bankruptcy and Foreclosures
5,136 
(2,450)
 
 
Mortgage loans held for sale - ending balance
$ 1,697,041 
$ 3,868,460 
 
 
Mortgage Loans Held for Sale and Investment - Mortgage Loans Held for Investment (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Total mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net
$ 195,432 
$ 211,050 
 
Mortgage Loans Held for Investment
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield, Reclassifications from Nonaccretable Difference
(921)
(848)
 
Mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net - unpaid principal balance
283,115 
305,085 
 
Transfer discount - accretable
(16,025)
(17,362)
(19,749)
Transfer discount - non-accretable
(68,109)
(74,529)
 
Allowance for loan losses
(3,549)
(2,144)
 
Total mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net
$ 195,432 
$ 211,050 
 
Mortgage Loans Held for Sale and Investment - Accretable Yield (Details) (Mortgage Loans Held for Investment, USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Mortgage Loans Held for Investment
 
 
Accretable Yield Movement Schedule [Roll Forward]
 
 
Balance at the beginning of the period
$ 17,362 
$ 19,749 
Accretion
(2,258)
(3,235)
Reclassifications from (to) nonaccretable discount
921 
848 
Balance at the end of the period
$ 16,025 
$ 17,362 
Mortgage Loans Held for Sale and Investment - Allowance (Details) (Mortgage Loans Held for Investment, USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Mortgage Loans Held for Investment
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
Balance at the beginning of the period
$ 3,549 
$ 2,144 
Balance at the end of the period
$ 3,549 
$ 2,144 
Mortgage Loans Held for Sale and Investment - Credit Quality (Details) (Mortgage Loans Held for Investment, USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Mortgage Loans Held for Investment
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
Unpaid principal balance
$ 283,115 
$ 305,085 
Mortgage Loans Held for Sale and Investment - Reverse Mortgage Interests (Details) (USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Feb. 28, 2013
Servicing Assets at Fair Value [Line Items]
 
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
$ 2,200,000,000 
 
 
Purchase price paid reverse mortgage
 
 
50,200,000 
Reverse Mortgage Interest, Unpaid Principal Balance, Securitized
1,296,420,000 
1,039,645,000 
 
Reverse Mortgage Interest, Unpaid Principal Balance, Unsecuritized
661,962,000 
395,663,000 
 
Provision for Loan Losses, Reverse Mortgage Interest
600,000 
300,000 
 
Reverse mortgage interests
1,956,952,000 
1,434,506,000 
 
Reverse Mortgage Interest, Valuation Allowance
(1,430,000)
(802,000)
 
Reverse Mortgages
 
 
 
Servicing Assets at Fair Value [Line Items]
 
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
$ 28,400,000,000 
$ 28,900,000,000 
$ 100,000,000 
Mortgage Loans Held for Sale and Investment Oo-Investor Percent Participation in Acquired Reverse Loans (Details)
Feb. 28, 2013
Acquired Reverse Mortgages [Abstract]
 
Percentage of aquired reverse loans, sold to co-investor
70.00% 
Mortgage Servicing Rights - Fair Value Assumptions (Details) (Mortgage Servicing Rights)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Credit Sensitive
 
 
Assumption for Fair Value of Mortgage Servicing Rights
 
 
Discount rate
12.15% 
14.17% 
Total prepayment speeds
17.24% 
20.34% 
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value, Expected weighted-average life
5 years 7 months 3 days 
4 years 7 months 18 days 
Credit losses
7.35% 
22.87% 
Interest Rate Sensitive
 
 
Assumption for Fair Value of Mortgage Servicing Rights
 
 
Discount rate
9.60% 
10.50% 
Total prepayment speeds
9.77% 
8.97% 
Servicing Assets and Servicing Liabilities at Fair Value, Assumptions Used to Estimate Fair Value, Expected weighted-average life
7 years 0 months 3 days 
7 years 10 months 17 days 
Credit losses
2.22% 
9.12% 
Mortgage Servicing Rights - MSR's at Fair Value (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Servicing Asset at Fair Value, Amount [Roll Forward]
 
 
Fair value at the end of the period
$ 2,898,209 
$ 2,488,283 
Principal Amount Outstanding of Loans Held-in-portfolio [Abstract]
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
2,200,000 
 
Mortgage Servicing Rights
 
 
Servicing Asset at Fair Value, Amount [Roll Forward]
 
 
Fair value at the beginning of the period
2,488,283 
635,860 
Servicing resulting from transfers of financial assets
185,822 
248,381 
Purchases of servicing assets
353,450 
1,545,584 
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model
49,779 
355,586 
Other changes in fair value
(179,125)
(297,128)
Fair value at the end of the period
2,898,209 
2,488,283 
Principal Amount Outstanding of Loans Held-in-portfolio [Abstract]
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
318,971,982 
322,814,139 
Mortgage Servicing Rights |
Credit Sensitive
 
 
Principal Amount Outstanding of Loans Held-in-portfolio [Abstract]
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
242,991,593 
266,757,777 
Mortgage Servicing Rights |
Interest Rate Sensitive
 
 
Principal Amount Outstanding of Loans Held-in-portfolio [Abstract]
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
$ 75,980,389 
$ 56,056,362 
Mortgage Servicing Rights - Fair Value Sensitivity Analysis (Details) (Mortgage Servicing Rights, USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
 
 
Total Prepayment Speeds, 10% Adverse Change
$ 107,917 
$ 101,590 
Total Prepayment Speeds, 20% Adverse Change
206,835 
195,445 
Credit Losses, 10% Adverse Change
37,922 
89,958 
Credit Losses, 20% Adverse Change
75,760 
178,669 
100 Basis Points
 
 
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
 
 
Discount Rate, Adverse Change
109,213 
74,681 
Two Hundred Basis Points [Member]
 
 
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
 
 
Discount Rate, Adverse Change
$ 205,224 
$ 151,899 
Mortgage Servicing Rights - MSR's at Amortized Cost (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2014
Mortgage Servicing Rights
Dec. 31, 2013
Mortgage Servicing Rights
Sep. 30, 2014
Reverse Mortgages
Dec. 31, 2013
Reverse Mortgages
Feb. 28, 2013
Reverse Mortgages
Servicing Assets at Amortized Value
 
 
 
 
 
 
 
Fair Value of Servicing Asset, Amortized Cost
$ 35,475 
$ 29,192 
 
 
 
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
2,200,000 
 
318,971,982 
322,814,139 
28,400,000 
28,900,000 
100,000 
Servicing Asset at Amortized Value, Balance [Roll Forward]
 
 
 
 
 
 
 
Balance at the beginning of the period
 
 
14,879 
10,973 
 
 
 
Purchase/Assumptions of servicing rights/obligations
 
 
0 
3,980 
 
 
 
Amortization/Accretion
 
 
2,448 
74 
 
 
 
Balance at the end of the period
 
 
12,431 
14,879 
 
 
 
Servicing Liability at Amortized Value [Roll Forward]
 
 
 
 
 
 
 
Balance at the beginning of the period
78,954 
82,521 
82,521 
83,238 
 
 
 
Purchase/Assumptions of servicing rights/obligations
 
 
0 
0 
 
 
 
Amortization/Accretion
 
 
3,567 
717 
 
 
 
Balance at the end of the period
78,954 
82,521 
78,954 
82,521 
 
 
 
Fair Value of Servicing Liability, Amortized Cost
$ 61,853 
$ 63,996 
 
 
 
 
 
Mortgage Servicing Rights - Subserviced Loans (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Subserviced Loans [Line Items]
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
$ 2,200,000 
 
Loan Subservicing Agreement
 
 
Subserviced Loans [Line Items]
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
$ 20,400,000 
$ 35,400,000 
Other Assets - Others Assets (Details) (USD $)
9 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Other Assets
 
 
Derivative financial instruments
$ 88,333,000 
$ 123,878,000 
Loans subject to repurchase right from Ginnie Mae
83,547,000 
120,736,000 
Deferred financing costs
48,949,000 
73,030,000 
Goodwill
54,701,000 
38,820,000 
Real estate owned (REO), net
53,264,000 
45,632,000 
Intangible Assets, Net (Excluding Goodwill)
20,187,000 
21,737,000 
Due from Affiliates
5,479,000 
8,861,000 
Prepaid expenses
9,942,000 
21,993,000 
Margin call deposits
5,487,000 
25,932,000 
Other
1,294,000 
3,656,000 
Total other assets
282,850,000 
360,397,000 
Goodwill, Acquired During Period
$ 15,900,000 
 
Other Assets - Mortgage Servicing Rights (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Mortgaging Servicing Rights
 
 
 
Loans subject to repurchase right from Ginnie Mae
$ 83,547 
 
$ 120,736 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
2,200,000 
 
 
Payments to Acquire Mortgage Servicing Rights (MSR)
317,247 
2,331,658 
 
Mortgage Servicing Rights
 
 
 
Mortgaging Servicing Rights
 
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
$ 318,971,982 
 
$ 322,814,139 
Accounts Payable (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Payables and Accruals [Abstract]
 
 
Financial Services Liabilities
$ 314,864 1
$ 359,214 1
MSR purchases payable
65,374 
135,759 
Mortgage insurance premiums and reserves
159,351 
164,244 
Assets Sold under Agreements to Repurchase, Repurchase Liability
83,547 
120,736 
Accrued interest
64,559 
76,303 
Accrued bonus and payroll
62,023 
66,755 
Taxes
100,190 
35,961 
Repurchase reserves
48,252 
40,695 
Other
446,735 2
308,783 2
Total payables and accrued liabilities
$ 1,344,895 
$ 1,308,450 
Derivative Financial Instruments - Statement of Operations Effect (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Change in value of designated cash flow hedge
$ 0 
$ (407)
$ (1,963)
$ 1,412 
Derivative Financial Instruments - Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Derivatives, Fair Value [Line Items]
 
 
Margin Deposit Assets
$ 5,487 
$ 25,932 
Other Assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Margin Deposit Assets
 
25,900 
Forward Contracts |
Designated as Hedging Instrument |
Loans Held-for-sale, Mortgages [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Outstanding Notional - Asset
13,933 
57,965 
Fair Value - Asset
609 
7 
Recorded Gains / (Losses)
602 
(14)
Forward Contracts |
Designated as Hedging Instrument |
Derivative Financial Instruments
 
 
Derivatives, Fair Value [Line Items]
 
 
Outstanding Notional - Liability
2,424,775 
1,351,870 
Fair Value - Liability
8,415 
3,305 
Recorded Gains / (Losses)
(5,110)
8,713 
Loan Purchase Commitments [Member] |
Designated as Hedging Instrument |
Derivative Financial Instruments, Assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Outstanding Notional - Asset
274,716 
197,475 
Fair Value - Asset
2,050 
793 
Recorded Gains / (Losses)
1,257 
(460)
Loan Purchase Commitments [Member] |
Designated as Hedging Instrument |
Derivative Financial Instruments
 
 
Derivatives, Fair Value [Line Items]
 
 
Outstanding Notional - Liability
76,385 
204,486 
Fair Value - Liability
1,020 
1,689 
Recorded Gains / (Losses)
669 
(1,603)
Interest Rate Lock Commitments |
Designated as Hedging Instrument |
Derivative Financial Instruments, Assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Outstanding Notional - Asset
2,388,232 
3,083,131 
Fair Value - Asset
83,446 
87,128 
Recorded Gains / (Losses)
(3,682)
(69,856)
Interest Rate Lock Commitments |
Designated as Hedging Instrument |
Derivative Financial Instruments
 
 
Derivatives, Fair Value [Line Items]
 
 
Outstanding Notional - Liability
867 
260,407 
Fair Value - Liability
3 
2,698 
Recorded Gains / (Losses)
2,695 
(1,613)
Forward Mortgage-Backed Securities Trades [Member] |
Designated as Hedging Instrument |
Derivative Financial Instruments, Assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Outstanding Notional - Asset
1,101,888 
5,425,663 
Fair Value - Asset
1,488 
32,266 
Recorded Gains / (Losses)
(30,778)
19,084 
Interest Rate Swaps and Caps |
Designated as Hedging Instrument |
Derivative Financial Instruments
 
 
Derivatives, Fair Value [Line Items]
 
 
Outstanding Notional - Liability
 
0 1
Fair Value - Liability
 
0 1
Recorded Gains / (Losses)
 
1,576 1
Interest Rate Swap |
Designated as Hedging Instrument |
Derivative Financial Instruments, Assets
 
 
Derivatives, Fair Value [Line Items]
 
 
Outstanding Notional - Asset
147,600 
167,000 
Fair Value - Asset
1,349 
3,691 
Recorded Gains / (Losses)
2,157 
544 
Asset Backed Securities |
Interest Rate Swap |
Designated as Hedging Instrument |
Derivative Financial Instruments
 
 
Derivatives, Fair Value [Line Items]
 
 
Outstanding Notional - Liability
249,704 
424,269 
Fair Value - Liability
183 
834 
Recorded Gains / (Losses)
$ 651 
$ 1,012 
Indebtedness - Notes Payable Summary (Details) (USD $)
9 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Debt Instrument
 
 
Outstanding
$ 3,532,743,000 
$ 6,984,351,000 
Debt Instrument, Collateral Amount
3,966,643,000 
7,725,803,000 
Servicing Segment
 
 
Debt Instrument
 
 
Outstanding
1,601,219,000 
4,550,424,000 
Debt Instrument, Collateral Amount
1,879,391,000 
5,083,205,000 
Servicing Segment |
Notes Payable, Other |
MBS Advance Financing Facility
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
775,000,000 
 
Outstanding
455,629,000 
560,814,000 
Debt Instrument, Collateral Amount
514,841,000 
651,953,000 
Servicing Segment |
Notes Payable, Other |
Securities Repurchase Facility (2011)
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
0 
 
Outstanding
34,613,000 
35,546,000 
Debt Instrument, Collateral Amount
55,603,000 
55,603,000 
Servicing Segment |
Notes Payable, Other |
MBS Advance Financing Facility 2012 [Member]
 
 
Debt Instrument
 
 
Outstanding
39,654,000 
179,306,000 
Debt Instrument, Collateral Amount
47,467,000 
220,833,000 
Servicing Segment |
Notes Payable, Other |
NSM Advance Receivable Trust (2013) [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
475,000,000 
 
Outstanding
399,846,000 
1,240,940,000 
Debt Instrument, Collateral Amount
450,345,000 
1,347,410,000 
Servicing Segment |
Notes Payable, Other |
MBS Servicer Advance Facility (2014) [Domain]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
80,000,000 
 
Outstanding
68,123,000 
0 
Debt Instrument, Collateral Amount
92,165,000 
0 
Servicing Segment |
Notes Payable, Other |
NSM Servicer Advance Receivable Trust 2013-BA [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
1,000,000,000 
 
Outstanding
0 
1,579,830,000 
Debt Instrument, Collateral Amount
0 
1,764,296,000 
Servicing Segment |
Notes Payable to Banks |
Agency Advance Financing Facility (2011-1)
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
1,100,000,000 
 
Outstanding
603,354,000 
851,957,000 
Debt Instrument, Collateral Amount
718,970,000 
918,574,000 
Debt Instrument, Basis Spread on Variable Rate
3.75% 
 
Servicing Segment |
Notes Payable to Banks |
Reverse Participations Financing Facility
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
150,000,000 
 
Outstanding
0 
102,031,000 
Debt Instrument, Collateral Amount
0 
124,536,000 
Originations Segment
 
 
Debt Instrument
 
 
Outstanding
1,931,524,000 
2,433,927,000 
Debt Instrument, Collateral Amount
2,087,252,000 
2,642,598,000 
Originations Segment |
Notes Payable, Other |
Warehouse Facility $700 Million [Member]
 
 
Debt Instrument
 
 
Outstanding
253,713,000 
111,980,000 
Debt Instrument, Collateral Amount
260,443,000 
115,629,000 
Originations Segment |
Notes Payable, Other |
Warehouse Facility $500 Million [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
500,000,000 
 
Outstanding
197,067,000 
214,570,000 
Debt Instrument, Collateral Amount
209,060,000 
224,162,000 
Originations Segment |
Notes Payable to Banks |
Warehouse Facility $1.5 Billion [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
1,500,000,000 
 
Outstanding
698,300,000 
797,281,000 
Debt Instrument, Collateral Amount
793,342,000 
891,648,000 
Originations Segment |
Notes Payable to Banks |
Warehouse Facility $750 Million [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
750,000,000 
 
Outstanding
428,970,000 
639,378,000 
Debt Instrument, Collateral Amount
447,121,000 
673,599,000 
Originations Segment |
Notes Payable to Banks |
Warehouse Facility $700 Million [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
500,000,000 
 
Originations Segment |
Notes Payable to Banks |
Warehouse Facility $500 Million (2013) [Member] [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
500,000,000 
 
Outstanding
226,249,000 
447,926,000 
Debt Instrument, Collateral Amount
231,696,000 
477,980,000 
Originations Segment |
Notes Payable to Banks |
Warehouse Facility $300 Million (2009)
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
300,000,000 
 
Outstanding
0 
159,435,000 
Debt Instrument, Collateral Amount
0 
166,482,000 
Originations Segment |
Notes Payable to Banks |
Warehouse Facility $200 Million [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
200,000,000 
 
Outstanding
87,145,000 
63,357,000 
Debt Instrument, Collateral Amount
103,804,000 
93,098,000 
Originations Segment |
Notes Payable to Banks |
Warehouse Facility $75 Million [Member] [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
75,000,000 
 
Outstanding
40,080,000 
0 
Debt Instrument, Collateral Amount
41,786,000 
0 
Originations Segment |
Notes Payable to Banks |
Revolving facility - ASAP [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
0 
 
Borrowing Capacity in Period Two [Member] |
Servicing Segment |
Notes Payable, Other |
MBS Advance Financing Facility 2012 [Member]
 
 
Debt Instrument
 
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 50,000,000 
 
Indebtedness - Servicing Segment Notes Payable (Details) (Servicing Segment, USD $)
9 Months Ended
Sep. 30, 2014
Notes Payable, Other |
MBS Advance Financing Facility
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 775,000,000 
Notes Payable, Other |
Securities Repurchase Facility (2011)
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
0 
Notes Payable, Other |
NSM Advance Receivable Trust (2013) [Member]
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
475,000,000 
Notes Payable, Other |
NSM Advance Receivable Trust Institutional Investors (2013) [Member]
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
1,000,000,000 
Line of Credit Facility, Remaining Borrowing Capacity
300,000,000 
Long-term Debt, Weighted Average Interest Rate
1.51% 
Notes Payable, Other |
NSM Servicer Advance Receivable Trust 2013-BA [Member]
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
1,000,000,000 
Notes Payable to Banks |
Agency Advance Financing Facility (2011) [Member]
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
1,100,000,000 
Debt Instrument, Basis Spread on Variable Rate
3.75% 
Notes Payable to Banks |
Reverse Participations Financing Facility
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
150,000,000 
Minimum |
Notes Payable to Banks |
Agency Advance Financing Facility (2011) [Member]
 
Debt Instrument
 
Debt Instrument, Basis Spread on Variable Rate
1.20% 
Borrowing Capacity in Period Two [Member] |
Notes Payable, Other |
MBS Advance Financing Facility 2012 [Member]
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
50,000,000 
Secured Debt |
Notes Payable to Banks |
Agency Advance Financing Facility (2011) [Member]
 
Debt Instrument
 
Term of agreement
3 years 
Debt Instrument, Face Amount
$ 300,000,000.0 
Long-term Debt, Weighted Average Interest Rate
1.46% 
Indebtedness - Originations Segment Notes Payable (Details) (Originations Segment, Notes Payable to Banks, USD $)
Sep. 30, 2014
Warehouse Facility $1.5 Billion [Member]
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 1,500,000,000 
Warehouse Facility $750 Million
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
750,000,000 
Warehouse Facility $700 Million [Member]
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
500,000,000 
Warehouse Facility $300 Million (2009)
 
Debt Instrument
 
Line of Credit Facility, Maximum Borrowing Capacity
$ 300,000,000 
Indebtedness - Unsecured Senior Notes (Details) (USD $)
9 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Debt Instrument
 
 
Minimum Tangible Net Worth Required for Compliance
$ 517,300,000 
 
Maximum Percentage Redeemable of Aggregate Principal on Unsecured Debt
35.00% 
 
Unsecured Debt
2,159,651,000 
2,444,062,000 
Write off of Deferred Debt Issuance Cost
3,400,000 
 
Unsecured Senior Notes
 
 
Debt Instrument
 
 
Debt Instrument, Face Amount
2,150,000,000 
 
Unsecured Senior Notes |
Unsecured Senior Notes 10.875% Due April 2015
 
 
Debt Instrument
 
 
Unsecured Debt
0 
283,153,000 
Debt Instrument, Face Amount
285,000,000 
 
Interest rate
10.875% 
 
Unsecured Senior Notes |
Unsecured Senior Notes 9.625% Due May 2019
 
 
Debt Instrument
 
 
Unsecured Debt
378,756,000 
379,360,000 
Debt Instrument, Face Amount
375,000,000 
 
Interest rate
9.625% 
 
Unsecured Senior Notes |
Unsecured Senior Notes Seven Point Eight Seven Five Percent Due Oct 202 [Member]
 
 
Debt Instrument
 
 
Unsecured Debt
400,565,000 
400,634,000 
Debt Instrument, Face Amount
400,000,000 
 
Interest rate
7.875% 
 
Unsecured Senior Notes |
Unsecured Senior Notes Six Point Five Percent Due July 2021 [Member]
 
 
Debt Instrument
 
 
Unsecured Debt
605,330,000 
605,915,000 
Debt Instrument, Face Amount
600,000,000 
 
Interest rate
6.50% 
 
Unsecured Senior Notes |
Unsecured Senior Notes Six Point Five Percent Due July 2022 [Member]
 
 
Debt Instrument
 
 
Unsecured Debt
300,000,000 
300,000,000 
Debt Instrument, Face Amount
300,000,000 
 
Interest rate
6.50% 
 
Unsecured Senior Notes |
Unsecured Senior Notes Six Point Five Percent Due August 2018 [Member]
 
 
Debt Instrument
 
 
Unsecured Debt
475,000,000 
475,000,000 
Debt Instrument, Face Amount
$ 475,000,000 
 
Interest rate
6.50% 
 
Indebtedness - Unsecured Notes Maturity Schedule (Details) (Unsecured Senior Notes, USD $)
Sep. 30, 2014
Unsecured Senior Notes
 
Expected maturities of long-term debt
 
2013
$ 0 
2014
0 
2015
0 
2016
0 
2017
475,000,000 
Thereafter
1,675,000,000 
Debt Instrument, Face Amount
$ 2,150,000,000 
Indebtedness - Legacy Assets (Details) (USD $)
Sep. 30, 2014
Dec. 31, 2013
Nov. 30, 2009
Debt Instrument
 
 
 
Nonrecourse Debt Legacy Assets
$ 2,552,856,000 
$ 2,208,881,000 
 
Unpaid principal balance on outstanding notes
 
 
222,000,000 
Legacy Asset [Member]
 
 
 
Debt Instrument
 
 
 
Nonrecourse Debt Legacy Assets
78,481,000 
89,107,000 
 
Nonrecourse Debt-Legacy Assets
 
 
 
Debt Instrument
 
 
 
Debt Instrument, Principal Amount Outstanding
91,300,000 
103,600,000 
 
Secured Debt |
Nonrecourse Debt-Legacy Assets
 
 
 
Debt Instrument
 
 
 
Interest rate
7.50% 
 
 
Securities Pledged as Collateral [Member]
 
 
 
Debt Instrument
 
 
 
Unpaid principal balance on outstanding notes
$ 274,000,000 
$ 302,000,000 
 
Indebtedness - Excess Spread Financing Debt (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Debt Instrument
 
 
Excess spread financing - fair value
$ 1,062,544 
$ 986,410 
Indebtedness - Participating Interest Financing (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2014
Participating Interest Financing
Debt Instrument
 
 
 
Interest rate, minimum
 
 
0.14% 
Interest rate, maximum
 
 
6.98% 
Participating Interest Financing
$ 1,367,382 
$ 1,103,490 
 
Participating interest financing
$ 1,367,382 
$ 1,080,718 
 
Indebtedness Indebtedness - Fair Value Sensitivity Analysis (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2014
Excess Spread Financing
Dec. 31, 2013
Excess Spread Financing
Sep. 30, 2014
100 Basis Points
Excess Spread Financing
Dec. 31, 2013
100 Basis Points
Excess Spread Financing
Sep. 30, 2014
Two Hundred Basis Points [Member]
Excess Spread Financing
Dec. 31, 2013
Two Hundred Basis Points [Member]
Excess Spread Financing
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
 
 
 
 
 
 
 
Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets [Table Text Block]
Text Block 
 
 
 
 
 
 
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of Other than 10 or 20 Percent Adverse Change in Discount Rate
 
 
 
$ 38,897 
$ 33,156 
$ 79,644 
$ 68,636 
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of 10 Percent Adverse Change in Prepayment Speed
 
34,979 
26,492 
 
 
 
 
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of 20 Percent Adverse Change in Prepayment Speed
 
73,083 
53,753 
 
 
 
 
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of 10 Percent Adverse Change in Expected Credit Losses
 
3,066 
29,219 
 
 
 
 
Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets, Impact of 20 Percent Adverse Change in Expected Credit Losses
 
$ 7,665 
$ 42,611 
 
 
 
 
Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets [Table Text Block] 
The following table shows the hypothetical effect on the fair value of the MSRs using various unfavorable variations of the expected levels of certain key assumptions used in valuing these assets at September 30, 2014 and December 31, 2013:
 
Discount Rate
 
Total Prepayment
Speeds
 
Credit Losses
 
100 bps
Adverse
Change
200 bps
Adverse
Change
 
10%
Adverse
Change
20%
Adverse
Change
 
10%
Adverse
Change
20%
Adverse
Change
September 30, 2014
 
 
 
 
 
 
 
 
 Mortgage servicing rights
$
(109,213
)
$
(205,224
)
 
$
(107,917
)
$
(206,835
)
 
$
(37,922
)
$
(75,760
)
December 31, 2013
 
 
 
 
 
 
 
 
 Mortgage servicing rights
$
(74,681
)
$
(151,899
)
 
$
(101,590
)
$
(195,445
)
 
$
(89,958
)
$
(178,669
)
Indebtedness Mortgage Servicing Rights Financing (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Jun. 30, 2014
Dec. 31, 2013
Short-term Debt [Line Items]
 
 
 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
$ 44,449 
$ 33,452 
$ 29,874 
Income Taxes (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
 
 
Effective Income Tax Rate Unadjusted for change in allowance
38.80% 
 
38.00% 
 
 
Principal Amount Outstanding on Mortgage Loans Serviced
$ 347,300,000,000 
 
$ 347,300,000,000 
 
$ 159,200,000,000 
Income tax expense
(1,700,000)
50,187,000 
52,242,000 
164,233,000 
 
Effective tax rate
1.60% 
38.00% 
20.60% 
38.00% 
 
Net deferred tax liability
116,000,000 
 
116,000,000 
 
102,700,000 
Valuation allowance on deferred tax asset
$ 6,400,000 
 
$ 6,400,000 
 
$ 46,700,000 
Income Taxes Income Tax Expense (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Income Tax Disclosure [Abstract]
 
 
 
 
Income Tax Expense (Benefit)
$ 1,700 
$ (50,187)
$ (52,242)
$ (164,233)
Effective Income Tax Rate Reconciliation, Percent
1.60% 
38.00% 
20.60% 
38.00% 
Income Taxes Income Tax Expense Paragraph (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2014
Dec. 31, 2013
Tax Credit Carryforward [Line Items]
 
 
 
Effective Income Tax Rate Unadjusted for change in allowance
38.80% 
38.00% 
 
Deferred Tax Assets, Valuation Allowance
$ 6.4 
$ 6.4 
$ 46.7 
Deferred Tax Liabilities, Net
116.0 
116.0 
102.7 
Operating Loss Carryforwards
199.4 
199.4 
 
Deferred Tax Assets, Capital Loss Carryforwards
15.9 
15.9 
 
Operating Loss Carryforwards, Limitations on Use
 
11 
 
Capital Loss Carryforward [Member]
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
Deferred Tax Assets, Valuation Allowance
5.6 
5.6 
 
Internal Revenue Service (IRS) [Member] |
Valuation Allowance, Operating Loss Carryforwards [Member]
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
Deferred Tax Assets, Valuation Allowance
0.5 
0.5 
 
State and Local Jurisdiction [Member] |
Valuation Allowance, Operating Loss Carryforwards [Member]
 
 
 
Tax Credit Carryforward [Line Items]
 
 
 
Deferred Tax Assets, Valuation Allowance
$ 0.3 
$ 0.3 
 
Fair Value Measurements - Fair Value Assumptions (Details)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Excess Spread Financing
 
 
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement
 
 
Mortgage prepayment speeds
12.80% 
9.60% 
Average life
5 years 8 months 30 days 
4 years 8 months 
Discount rate
11.80% 
13.90% 
Minimum [Member] |
Excess Spread Financing
 
 
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement
 
 
Mortgage prepayment speeds
5.52% 
4.00% 
Average life
3 years 10 months 11 days 
3 years 5 months 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Other Key Assumption Rate or Value
0.0657 
0.05 
Discount rate
9.02% 
10.10% 
Maximum [Member] |
Excess Spread Financing
 
 
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement
 
 
Mortgage prepayment speeds
19.32% 
17.60% 
Average life
7 years 5 months 
5 years 8 months 12 days 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Other Key Assumption Rate or Value
0.3185 
0.358 
Discount rate
14.22% 
20.00% 
Advance financing rates [Domain] |
Mortgage Servicing Right [Member]
 
 
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement
 
 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Other Key Assumption Rate or Value
2.72% 
 
Advance recovery rates [Domain] |
Mortgage Servicing Right [Member]
 
 
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement
 
 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Other Key Assumption Rate or Value
24.60% 
 
Fair Value Measurements - Measured on a Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Jun. 30, 2014
Dec. 31, 2013
ASSETS
 
 
 
Mortgage servicing rights
$ 2,898,209 
 
$ 2,488,283 
Derivative instruments
88,333 
 
123,878 
LIABILITIES
 
 
 
Derivative financial instruments
9,621 
 
8,526 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
44,449 
33,452 
29,874 
Level 1
 
 
 
ASSETS
 
 
 
Mortgages loans held for sale
 
0 
0 
Derivative instruments
 
0 
0 
LIABILITIES
 
 
 
Derivative financial instruments
 
0 
0 
Level 2
 
 
 
ASSETS
 
 
 
Mortgages loans held for sale
 
1,696,657 
2,601,520 
Derivative instruments
 
88,333 
123,878 
LIABILITIES
 
 
 
Derivative financial instruments
 
9,621 
8,526 
Level 3
 
 
 
ASSETS
 
 
 
Mortgages loans held for sale
 
0 
0 
Derivative instruments
 
0 
0 
LIABILITIES
 
 
 
Derivative financial instruments
 
0 
0 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
 
44,449 
29,874 
Fair Value, Measurements, Recurring |
Total Fair Value
 
 
 
ASSETS
 
 
 
Mortgages loans held for sale
1,695,502 
 
2,585,340 
Mortgage servicing rights
2,898,209 
 
2,488,283 
Total assets
4,682,044 
 
5,197,501 
LIABILITIES
 
 
 
Excess spread financing (at fair value)
1,062,544 
 
986,410 
Total liabilities
1,116,614 
 
1,024,810 
Fair Value, Measurements, Recurring |
Level 1
 
 
 
ASSETS
 
 
 
Mortgages loans held for sale
0 
 
0 
Mortgage servicing rights
0 
 
0 
Total assets
0 
 
0 
LIABILITIES
 
 
 
Excess spread financing (at fair value)
0 
 
0 
Total liabilities
0 
 
0 
Fair Value, Measurements, Recurring |
Level 2
 
 
 
ASSETS
 
 
 
Mortgages loans held for sale
1,695,502 
 
2,585,340 
Mortgage servicing rights
0 
 
0 
Total assets
1,783,835 
 
2,709,218 
LIABILITIES
 
 
 
Excess spread financing (at fair value)
0 
 
0 
Total liabilities
9,621 
 
8,526 
Fair Value, Measurements, Recurring |
Level 3
 
 
 
ASSETS
 
 
 
Mortgages loans held for sale
0 
 
0 
Mortgage servicing rights
2,898,209 
 
2,488,283 
Total assets
2,898,209 
 
2,488,283 
LIABILITIES
 
 
 
Excess spread financing (at fair value)
1,062,544 
 
986,410 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
44,449 
 
29,874 
Total liabilities
1,106,993 
 
1,016,284 
Interest Rate Lock Commitments |
Fair Value, Measurements, Recurring |
Total Fair Value
 
 
 
ASSETS
 
 
 
Derivative instruments
83,446 
 
87,128 
LIABILITIES
 
 
 
Derivative financial instruments
3 
 
 
Interest Rate Lock Commitments |
Fair Value, Measurements, Recurring |
Level 1
 
 
 
ASSETS
 
 
 
Derivative instruments
0 
 
0 
LIABILITIES
 
 
 
Derivative financial instruments
0 
 
 
Interest Rate Lock Commitments |
Fair Value, Measurements, Recurring |
Level 2
 
 
 
ASSETS
 
 
 
Derivative instruments
83,446 
 
87,128 
LIABILITIES
 
 
 
Derivative financial instruments
3 
 
 
Interest Rate Lock Commitments |
Fair Value, Measurements, Recurring |
Level 3
 
 
 
ASSETS
 
 
 
Derivative instruments
0 
 
0 
Interest Rate Swaps and Caps |
Fair Value, Measurements, Recurring |
Total Fair Value
 
 
 
ASSETS
 
 
 
Derivative instruments
1,349 
 
3,691 
LIABILITIES
 
 
 
Derivative financial instruments
 
 
2,698 
Interest Rate Swaps and Caps |
Fair Value, Measurements, Recurring |
Level 1
 
 
 
LIABILITIES
 
 
 
Derivative financial instruments
 
 
0 
Interest Rate Swaps and Caps |
Fair Value, Measurements, Recurring |
Level 2
 
 
 
ASSETS
 
 
 
Derivative instruments
1,349 
 
3,691 
LIABILITIES
 
 
 
Derivative financial instruments
 
 
2,698 
Interest Rate Swaps and Caps |
Fair Value, Measurements, Recurring |
Level 3
 
 
 
LIABILITIES
 
 
 
Derivative financial instruments
 
 
0 
Interest Rate Swap |
Fair Value, Measurements, Recurring |
Total Fair Value
 
 
 
LIABILITIES
 
 
 
Derivative financial instruments
183 
 
834 
Interest Rate Swap |
Fair Value, Measurements, Recurring |
Level 1
 
 
 
LIABILITIES
 
 
 
Derivative financial instruments
0 
 
0 
Interest Rate Swap |
Fair Value, Measurements, Recurring |
Level 2
 
 
 
LIABILITIES
 
 
 
Derivative financial instruments
183 
 
834 
Interest Rate Swap |
Fair Value, Measurements, Recurring |
Level 3
 
 
 
LIABILITIES
 
 
 
Derivative financial instruments
0 
 
0 
Forward Contracts |
Fair Value, Measurements, Recurring |
Total Fair Value
 
 
 
ASSETS
 
 
 
Derivative instruments
1,488 
 
32,266 
LIABILITIES
 
 
 
Derivative financial instruments
8,415 
 
3,305 
Forward Contracts |
Fair Value, Measurements, Recurring |
Level 1
 
 
 
ASSETS
 
 
 
Derivative instruments
0 
 
0 
LIABILITIES
 
 
 
Derivative financial instruments
0 
 
0 
Forward Contracts |
Fair Value, Measurements, Recurring |
Level 2
 
 
 
ASSETS
 
 
 
Derivative instruments
1,488 
 
32,266 
LIABILITIES
 
 
 
Derivative financial instruments
8,415 
 
3,305 
Forward Contracts |
Fair Value, Measurements, Recurring |
Level 3
 
 
 
ASSETS
 
 
 
Derivative instruments
0 
 
0 
LIABILITIES
 
 
 
Derivative financial instruments
0 
 
0 
Loan Purchase Commitments [Member] |
Fair Value, Measurements, Recurring |
Total Fair Value
 
 
 
ASSETS
 
 
 
Derivative instruments
2,050 
 
793 
LIABILITIES
 
 
 
Derivative financial instruments
1,020 
 
1,689 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
44,449 
 
 
Loan Purchase Commitments [Member] |
Fair Value, Measurements, Recurring |
Level 1
 
 
 
ASSETS
 
 
 
Derivative instruments
0 
 
0 
LIABILITIES
 
 
 
Derivative financial instruments
0 
 
0 
Loan Purchase Commitments [Member] |
Fair Value, Measurements, Recurring |
Level 2
 
 
 
ASSETS
 
 
 
Derivative instruments
2,050 
 
793 
LIABILITIES
 
 
 
Derivative financial instruments
1,020 
 
1,689 
Loan Purchase Commitments [Member] |
Fair Value, Measurements, Recurring |
Level 3
 
 
 
ASSETS
 
 
 
Derivative instruments
0 
 
0 
LIABILITIES
 
 
 
Derivative financial instruments
$ 0 
 
$ 0 
Fair Value Measurements - Level 3 Reconciliation (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2014
Jun. 30, 2014
Dec. 31, 2013
Sep. 30, 2014
Excess Spread Financing
Sep. 30, 2014
Excess Spread Financing
Dec. 31, 2013
Excess Spread Financing
Sep. 30, 2014
Mortgage Servicing Right Liability [Member]
Sep. 30, 2014
Mortgage Servicing Right Liability [Member]
Dec. 31, 2013
Mortgage Servicing Right Liability [Member]
Sep. 30, 2014
Mortgage Servicing Rights
Sep. 30, 2014
Mortgage Servicing Rights
Dec. 31, 2013
Mortgage Servicing Rights
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
$ 44,449 
$ 33,452 
$ 29,874 
 
 
 
 
 
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
 
 
 
 
 
 
 
 
2,678,134 
2,488,283 
635,860 
Transfers into Level 3
 
 
 
 
 
 
 
 
 
0 
0 
0 
Transfers out of Level 3
 
 
 
 
 
 
 
 
 
0 
0 
0 
Total gains or losses included in earnings
 
 
 
 
 
 
 
 
 
(5,308)
(129,346)
58,458 
Total gains or losses included in other comprehensive income
 
 
 
 
 
 
 
 
 
0 
0 
0 
Purchases, issuance, sales and settlements
 
 
 
 
 
 
 
 
 
 
 
 
Purchases
 
 
 
 
 
 
 
 
 
159,773 
353,450 
1,545,584 
Issuances
 
 
 
 
 
 
 
 
 
65,610 
(185,822)
248,381 
Sales
 
 
 
 
 
 
 
 
 
0 
0 
0 
Settlements
 
 
 
 
 
 
 
 
 
0 
0 
0 
Ending balance
 
 
 
 
 
 
 
 
 
2,898,209 
2,898,209 
2,488,283 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
 
 
1,036,038 
986,410 
288,089 
 
 
 
 
 
 
Transfers into Level 3
 
 
 
0 
0 
0 
0 
0 
 
 
 
 
Transfers out of Level 3
 
 
 
0 
0 
0 
0 
0 
 
 
 
 
Total gains or losses included in earnings
 
 
 
37,313 
61,080 
73,333 
10,997 
(38,260)
 
 
 
 
Total gains or losses included in other comprehensive income
 
 
 
0 
0 
0 
0 
0 
 
 
 
 
Purchases, issuances, sales and settlements
 
 
 
 
 
 
 
 
 
 
 
 
Purchases
 
 
 
0 
0 
0 
0 
0 
 
 
 
 
Issuances
 
 
 
39,833 
150,951 
755,344 
0 
52,835 
29,874 
 
 
 
Sales
 
 
 
0 
0 
0 
0 
0 
 
 
 
 
Settlements
 
 
 
(50,640)
(135,897)
(130,356)
0 
0 
 
 
 
 
Ending balance
 
 
 
$ 1,062,544 
$ 1,062,544 
$ 986,410 
 
 
 
 
 
 
Fair Value Measurements - Fair Value by Balance Sheet Line Item (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Jun. 30, 2014
Dec. 31, 2013
Financial assets:
 
 
 
Derivative instruments
$ 88,333 
 
$ 123,878 
Financial liabilities:
 
 
 
Derivative financial instruments
9,621 
 
8,526 
Excess spread financing - fair value
1,062,544 
 
986,410 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
44,449 
33,452 
29,874 
Level 1
 
 
 
Financial assets:
 
 
 
Cash and cash equivalents
 
269,735 
441,902 
Restricted cash
 
294,044 
592,747 
Mortgages loans held for sale
 
0 
0 
Mortgage loans held for investment, subject to nonrecourse debt - Legacy assets
 
0 
0 
Reverse mortgage interests
 
0 
0 
Derivative instruments
 
0 
0 
Financial liabilities:
 
 
 
Notes payable
 
0 
0 
Unsecured senior notes
 
2,150,702 
2,489,886 
Derivative financial instruments
 
0 
0 
Nonrecourse debt - Legacy assets
 
0 
0 
Excess spread financing - fair value
 
0 
0 
Participating interest financing
 
0 
0 
Level 2
 
 
 
Financial assets:
 
 
 
Cash and cash equivalents
 
0 
0 
Restricted cash
 
0 
0 
Mortgages loans held for sale
 
1,696,657 
2,601,520 
Mortgage loans held for investment, subject to nonrecourse debt - Legacy assets
 
0 
0 
Reverse mortgage interests
 
0 
0 
Derivative instruments
 
88,333 
123,878 
Financial liabilities:
 
 
 
Notes payable
 
0 
0 
Unsecured senior notes
 
0 
0 
Derivative financial instruments
 
9,621 
8,526 
Nonrecourse debt - Legacy assets
 
0 
0 
Excess spread financing - fair value
 
0 
0 
Participating interest financing
 
1,336,722 
1,093,747 
Level 3
 
 
 
Financial assets:
 
 
 
Cash and cash equivalents
 
0 
0 
Restricted cash
 
0 
0 
Mortgages loans held for sale
 
0 
0 
Mortgage loans held for investment, subject to nonrecourse debt - Legacy assets
 
168,959 
180,435 
Reverse mortgage interests
 
1,937,199 
1,405,197 
Derivative instruments
 
0 
0 
Financial liabilities:
 
 
 
Notes payable
 
3,532,743 
6,984,351 
Unsecured senior notes
 
0 
0 
Derivative financial instruments
 
0 
0 
Nonrecourse debt - Legacy assets
 
89,018 
95,345 
Excess spread financing - fair value
 
1,062,544 
986,410 
Participating interest financing
 
0 
0 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
 
44,449 
29,874 
Carrying Amount
 
 
 
Financial assets:
 
 
 
Cash and cash equivalents
 
269,735 
441,902 
Restricted cash
 
294,044 
592,747 
Mortgages loans held for sale
 
1,697,041 
2,603,380 
Mortgage loans held for investment, subject to nonrecourse debt - Legacy assets
 
195,432 
211,050 
Reverse mortgage interests
 
1,956,952 
1,434,506 
Derivative instruments
 
88,333 
123,878 
Financial liabilities:
 
 
 
Notes payable
 
3,532,743 
6,984,351 
Unsecured senior notes
 
2,159,651 
2,444,062 
Derivative financial instruments
 
9,621 
8,526 
Nonrecourse debt - Legacy assets
 
78,481 
89,107 
Excess spread financing - fair value
 
1,062,544 
986,410 
Participating interest financing
 
1,367,382 
1,103,490 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
 
44,449 
29,874 
Fair Value, Measurements, Recurring |
Level 1
 
 
 
Financial assets:
 
 
 
Mortgages loans held for sale
0 
 
0 
Fair Value, Measurements, Recurring |
Level 2
 
 
 
Financial assets:
 
 
 
Mortgages loans held for sale
1,695,502 
 
2,585,340 
Fair Value, Measurements, Recurring |
Level 3
 
 
 
Financial assets:
 
 
 
Mortgages loans held for sale
0 
 
0 
Financial liabilities:
 
 
 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
44,449 
 
29,874 
Fair Value, Measurements, Recurring |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
 
Financial assets:
 
 
 
Mortgages loans held for sale
1,695,502 
 
2,585,340 
Fair Value, Measurements, Recurring |
Forward Contracts |
Level 1
 
 
 
Financial assets:
 
 
 
Derivative instruments
0 
 
0 
Financial liabilities:
 
 
 
Derivative financial instruments
0 
 
0 
Fair Value, Measurements, Recurring |
Forward Contracts |
Level 2
 
 
 
Financial assets:
 
 
 
Derivative instruments
1,488 
 
32,266 
Financial liabilities:
 
 
 
Derivative financial instruments
8,415 
 
3,305 
Fair Value, Measurements, Recurring |
Forward Contracts |
Level 3
 
 
 
Financial assets:
 
 
 
Derivative instruments
0 
 
0 
Financial liabilities:
 
 
 
Derivative financial instruments
0 
 
0 
Fair Value, Measurements, Recurring |
Forward Contracts |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
 
Financial assets:
 
 
 
Derivative instruments
1,488 
 
32,266 
Financial liabilities:
 
 
 
Derivative financial instruments
8,415 
 
3,305 
Fair Value, Measurements, Recurring |
Loan Purchase Commitments [Member] |
Level 1
 
 
 
Financial assets:
 
 
 
Derivative instruments
0 
 
0 
Financial liabilities:
 
 
 
Derivative financial instruments
0 
 
0 
Fair Value, Measurements, Recurring |
Loan Purchase Commitments [Member] |
Level 2
 
 
 
Financial assets:
 
 
 
Derivative instruments
2,050 
 
793 
Financial liabilities:
 
 
 
Derivative financial instruments
1,020 
 
1,689 
Fair Value, Measurements, Recurring |
Loan Purchase Commitments [Member] |
Level 3
 
 
 
Financial assets:
 
 
 
Derivative instruments
0 
 
0 
Financial liabilities:
 
 
 
Derivative financial instruments
0 
 
0 
Fair Value, Measurements, Recurring |
Loan Purchase Commitments [Member] |
Estimate of Fair Value, Fair Value Disclosure [Member]
 
 
 
Financial assets:
 
 
 
Derivative instruments
2,050 
 
793 
Financial liabilities:
 
 
 
Derivative financial instruments
1,020 
 
1,689 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
$ 44,449 
 
 
Fair Value Measurements Fair Value Measurement - Fair Value Assumption (Details) (Excess Spread Financing)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement
 
 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Prepayment Speed
12.80% 
9.60% 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Weighted Average Life
5 years 8 months 30 days 
4 years 8 months 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Discount Rate
11.80% 
13.90% 
Minimum
 
 
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement
 
 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Prepayment Speed
5.52% 
4.00% 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Weighted Average Life
3 years 10 months 11 days 
3 years 5 months 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Discount Rate
9.02% 
10.10% 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Other Key Assumption Rate or Value
0.0657 
0.05 
Maximum
 
 
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement
 
 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Prepayment Speed
19.32% 
17.60% 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Weighted Average Life
7 years 5 months 
5 years 8 months 12 days 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Discount Rate
14.22% 
20.00% 
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Other Key Assumption Rate or Value
0.3185 
0.358 
Share-based Compensation (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award
 
 
 
Redemption of shares for stock vesting
$ (4,755)
$ (6,554)
$ (6,944)
Capital Requirements Capital Requirements (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Mortgage Banking [Abstract]
 
Minimum Net Worth Required for Compliance
$ 653.5 
Minimum Tangible Net Worth Required for Compliance
$ 517.3 
Commitments and Contingencies - Litigation and Regulatory Matters (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Loss Contingencies [Line Items]
 
 
 
 
Legal Fees
$ 3.6 
$ 6.2 
$ 18.8 
$ 14.2 
Litigation and Regulatory Matters [Member]
 
 
 
 
Loss Contingencies [Line Items]
 
 
 
 
Loss Contingency, Range of Possible Loss, Minimum
2.6 
 
2.6 
 
Loss Contingency, Range of Possible Loss, Maximum
$ 6.9 
 
$ 6.9 
 
Commitments and Contingencies - Loan and Other Commitments (Details) (USD $)
Sep. 30, 2014
Dec. 31, 2013
Feb. 28, 2013
Mortgage Servicing Rights [Line Items]
 
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
$ 2,200,000,000 
 
 
Reverse Mortgages
 
 
 
Mortgage Servicing Rights [Line Items]
 
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
28,400,000,000 
28,900,000,000 
100,000,000 
Unfunded advance obligations
$ 4,200,000,000 
 
 
Commitments and Contingencies - Other Contingencies (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Feb. 28, 2013
Mortgage Servicing Rights [Line Items]
 
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
$ 2,200,000 
 
 
Loan Subservicing Agreement
 
 
 
Mortgage Servicing Rights [Line Items]
 
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
20,400,000 
35,400,000 
 
Reverse Mortgages
 
 
 
Mortgage Servicing Rights [Line Items]
 
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
$ 28,400,000 
$ 28,900,000 
$ 100,000 
Business Segment Reporting - Financial Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Segment Reporting Information [Line Items]
 
 
 
 
 
Loss on foreclosed real estate and other
$ 2,731 
$ 9,498 
$ 5,826 
$ 13,363 
 
Revenues:
 
 
 
 
 
Servicing fee income
235,408 
341,679 
733,671 
802,584 
 
Other fee income
126,101 
84,203 
346,366 
186,877 
 
Total fee income
361,509 
425,882 
1,080,037 
989,461 
 
Gain/(loss) on mortgage loans held for sale
142,815 
205,956 
443,667 
677,104 
 
Total revenues
504,324 
631,838 
1,523,704 
1,666,565 
 
Total expenses and impairments
327,224 
395,854 
995,068 
1,004,276 
 
Interest income
43,314 
63,903 
130,198 
145,948 
 
Other income (expense):
 
 
 
 
 
Interest expense
(116,673)
(168,215)
(412,695)
(378,500)
 
Gain (Loss) on Sale of Properties
4,898 
0 
4,898 
0 
 
Gain/(Loss) on interest rate swaps and caps
940 
400 
2,808 
2,457 
 
Total other income (expense)
(67,521)
(103,912)
(274,791)
(230,095)
 
Income before taxes
109,579 
132,072 
253,845 
432,194 
 
Depreciation and amortization
9,562 
6,995 
29,963 
16,686 
 
Assets
10,877,044 
17,068,072 
10,877,044 
17,068,072 
14,026,689 
Operating Segments
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
253,543 
357,274 
788,306 
848,460 
 
Other fee income
123,966 
84,153 
343,662 
186,968 
 
Total fee income
377,509 
441,427 
1,131,968 
1,035,428 
 
Gain/(loss) on mortgage loans held for sale
127,208 
190,310 
392,784 
631,151 
 
Total revenues
504,717 
631,737 
1,524,752 
1,666,579 
 
Total expenses and impairments
300,350 
366,811 
938,226 
932,493 
 
Interest income
37,272 
60,186 
116,942 
132,897 
 
Other income (expense):
 
 
 
 
 
Interest expense
(66,088)
(118,635)
(256,293)
(252,016)
 
Gain (Loss) on Sale of Properties
0 
 
0 
 
 
Gain/(Loss) on interest rate swaps and caps
795 
94 
2,156 
1,466 
 
Total other income (expense)
(28,021)
(58,355)
(137,195)
(117,653)
 
Income before taxes
176,346 
206,571 
449,331 
616,433 
 
Depreciation and amortization
4,857 
5,982 
21,971 
14,176 
 
Assets
10,619,844 
14,362,213 
10,619,844 
14,362,213 
 
Servicing Segment
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
253,434 
357,262 
787,972 
848,324 
 
Other fee income
28,113 
19,782 
71,722 
58,795 
 
Total fee income
281,547 
377,044 
859,694 
907,119 
 
Gain/(loss) on mortgage loans held for sale
(1,147)
124 
(2,972)
(61)
 
Total revenues
280,400 
377,168 
856,722 
907,058 
 
Total expenses and impairments
160,975 
158,247 
511,998 
432,219 
 
Interest income
18,369 
31,913 
59,191 
66,961 
 
Other income (expense):
 
 
 
 
 
Interest expense
(48,651)
(85,653)
(199,464)
(195,089)
 
Gain (Loss) on Sale of Properties
0 
 
0 
 
 
Gain/(Loss) on interest rate swaps and caps
795 
94 
2,156 
1,466 
 
Total other income (expense)
(29,487)
(53,646)
(138,117)
(126,662)
 
Income before taxes
89,938 
165,275 
206,607 
348,177 
 
Depreciation and amortization
2,886 
3,659 
11,453 
9,315 
 
Assets
8,370,695 
10,067,020 
8,370,695 
10,067,020 
 
Originations Segment
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
105 
(1)
317 
95 
 
Other fee income
10,334 
23,117 
38,071 
36,479 
 
Total fee income
10,439 
23,116 
38,388 
36,574 
 
Gain/(loss) on mortgage loans held for sale
128,355 
190,186 
395,756 
631,212 
 
Total revenues
138,794 
213,302 
434,144 
667,786 
 
Total expenses and impairments
89,369 
176,600 
291,503 
424,368 
 
Interest income
18,903 
28,273 
57,751 
65,936 
 
Other income (expense):
 
 
 
 
 
Interest expense
(17,085)
(32,879)
(56,333)
(56,732)
 
Gain (Loss) on Sale of Properties
0 
 
0 
 
 
Gain/(Loss) on interest rate swaps and caps
0 
0 
0 
0 
 
Total other income (expense)
1,818 
(4,606)
1,418 
9,204 
 
Income before taxes
51,243 
32,096 
144,059 
252,622 
 
Depreciation and amortization
1,049 
1,914 
7,754 
4,149 
 
Assets
1,929,239 
4,256,216 
1,929,239 
4,256,216 
 
Solutionstar Segment [Member]
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
4 
13 
17 
41 
 
Other fee income
85,519 
41,254 
233,869 
91,694 
 
Total fee income
85,523 
41,267 
233,886 
91,735 
 
Gain/(loss) on mortgage loans held for sale
0 
0 
0 
0 
 
Total revenues
85,523 
41,267 
233,886 
91,735 
 
Total expenses and impairments
50,006 
31,964 
134,725 
75,906 
 
Interest income
0 
0 
0 
0 
 
Other income (expense):
 
 
 
 
 
Interest expense
(352)
(103)
(496)
(195)
 
Gain (Loss) on Sale of Properties
0 
 
0 
 
 
Gain/(Loss) on interest rate swaps and caps
0 
0 
0 
0 
 
Total other income (expense)
(352)
(103)
(496)
(195)
 
Income before taxes
35,165 
9,200 
98,665 
15,634 
 
Depreciation and amortization
922 
409 
2,764 
712 
 
Assets
319,910 
38,977 
319,910 
38,977 
 
Legacy Portfolio and Other
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
(1,002)
551 
(429)
1,322 
 
Other fee income
2,135 
50 
2,704 
(91)
 
Total fee income
1,133 
601 
2,275 
1,231 
 
Gain/(loss) on mortgage loans held for sale
(1,172)
(101)
(2,223)
0 
 
Total revenues
(39)
500 
52 
1,231 
 
Total expenses and impairments
26,874 
29,043 
56,842 
71,783 
 
Interest income
5,688 
3,318 
12,156 
11,806 
 
Other income (expense):
 
 
 
 
 
Interest expense
(50,585)
(49,580)
(156,402)
(126,484)
 
Gain (Loss) on Sale of Properties
4,898 
 
4,898 
 
 
Gain/(Loss) on interest rate swaps and caps
145 
306 
652 
991 
 
Total other income (expense)
(39,854)
(45,956)
(138,696)
(113,687)
 
Income before taxes
(66,767)
(74,499)
(195,486)
(184,239)
 
Depreciation and amortization
4,705 
1,013 
7,992 
2,510 
 
Assets
257,200 
2,705,859 
257,200 
2,705,859 
 
Eliminations
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
(17,133)
(16,146)
(54,206)
(47,198)
 
Other fee income
0 
0 
0 
0 
 
Total fee income
(17,133)
(16,146)
(54,206)
(47,198)
 
Gain/(loss) on mortgage loans held for sale
16,779 
15,747 
53,106 
45,953 
 
Total revenues
(354)
(399)
(1,100)
(1,245)
 
Total expenses and impairments
0 
0 
0 
0 
 
Interest income
354 
399 
1,100 
1,245 
 
Other income (expense):
 
 
 
 
 
Interest expense
0 
0 
0 
0 
 
Gain (Loss) on Sale of Properties
0 
 
0 
 
 
Gain/(Loss) on interest rate swaps and caps
0 
0 
0 
0 
 
Total other income (expense)
354 
399 
1,100 
1,245 
 
Income before taxes
0 
0 
0 
0 
 
Depreciation and amortization
0 
0 
0 
0 
 
Assets
$ 0 
$ 0 
$ 0 
$ 0 
 
Guarantor Financial Statement Information - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
subsidiary
Dec. 31, 2013
Condensed Financial Information of Parent Company Only Disclosure [Abstract]
 
 
Unsecured Debt
$ 2,159,651 
$ 2,444,062 
Guarantor Subsidiary, Ownership Percentage
100.00% 
 
Number of Subsidiaries as Guarantors of Unsecured Debt
2 
 
Guarantor Financial Statement Information - Consolidating Balance Sheets (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Dec. 31, 2012
Assets
 
 
 
 
Cash and cash equivalents
$ 269,735 
$ 441,902 
$ 275,251 
$ 152,649 
Restricted cash
294,044 
592,747 
 
 
Accounts receivable
3,060,382 
5,636,482 
 
 
Mortgage loans held for sale
1,697,041 
2,603,380 
3,868,460 
1,480,537 
Mortgage loans held for investment, net
195,432 
211,050 
 
 
Reverse mortgage interests
1,956,952 
1,434,506 
 
 
Servicing Asset
2,910,640 
2,503,162 
 
 
Investment in subsidiaries
0 
0 
 
 
Property and equipment, net
121,635 
119,185 
 
 
Derivative financial instruments
88,333 
123,878 
 
 
Other assets
282,850 
360,397 
 
 
Total assets
10,877,044 
14,026,689 
17,068,072 
 
Liabilities and shareholders' equity
 
 
 
 
Notes payable
3,532,743 
6,984,351 
 
 
Unsecured senior notes
2,159,651 
2,444,062 
 
 
Payables and accrued liabilities
1,344,895 
1,308,450 
 
 
Payables to affiliates
0 
0 
 
 
Derivative financial instruments
9,621 
8,526 
 
 
Mortgage servicing liabilities
78,954 
82,521 
 
 
Other nonrecourse debt
2,552,856 
2,208,881 
 
 
Total liabilities
9,678,720 
13,036,791 
 
 
Total equity
1,198,324 
989,898 
 
 
Total liabilities and equity
10,877,044 
14,026,689 
 
 
Parent Company
 
 
 
 
Assets
 
 
 
 
Cash and cash equivalents
0 
0 
0 
0 
Restricted cash
0 
0 
 
 
Accounts receivable
0 
0 
 
 
Mortgage loans held for sale
0 
0 
 
 
Mortgage loans held for investment, net
0 
0 
 
 
Reverse mortgage interests
0 
0 
 
 
Servicing Asset
0 
0 
 
 
Investment in subsidiaries
1,181,205 
968,027 
 
 
Property and equipment, net
0 
0 
 
 
Derivative financial instruments
0 
0 
 
 
Other assets
17,118 
21,872 
 
 
Total assets
1,198,323 
989,899 
 
 
Liabilities and shareholders' equity
 
 
 
 
Notes payable
0 
0 
 
 
Unsecured senior notes
0 
0 
 
 
Payables and accrued liabilities
0 
0 
 
 
Payables to affiliates
0 
0 
 
 
Derivative financial instruments
0 
0 
 
 
Mortgage servicing liabilities
0 
0 
 
 
Other nonrecourse debt
0 
0 
 
 
Total liabilities
0 
0 
 
 
Total equity
1,198,323 
989,899 
 
 
Total liabilities and equity
1,198,323 
989,899 
 
 
Issuer
 
 
 
 
Assets
 
 
 
 
Cash and cash equivalents
256,513 
422,268 
262,408 
152,248 
Restricted cash
195,522 
312,120 
 
 
Accounts receivable
2,989,520 
1,569,021 
 
 
Mortgage loans held for sale
1,655,677 
2,603,380 
 
 
Mortgage loans held for investment, net
1,549 
2,786 
 
 
Reverse mortgage interests
1,956,952 
1,434,506 
 
 
Servicing Asset
2,910,640 
2,503,162 
 
 
Investment in subsidiaries
305,193 
181,545 
 
 
Property and equipment, net
108,980 
115,765 
 
 
Derivative financial instruments
83,627 
120,187 
 
 
Other assets
523,979 
4,683,749 
 
 
Total assets
10,988,152 
13,948,489 
 
 
Liabilities and shareholders' equity
 
 
 
 
Notes payable
2,489,464 
3,311,625 
 
 
Unsecured senior notes
2,159,651 
2,444,062 
 
 
Payables and accrued liabilities
1,343,809 
1,319,172 
 
 
Payables to affiliates
1,251,073 
3,694,782 
 
 
Derivative financial instruments
9,621 
8,526 
 
 
Mortgage servicing liabilities
78,954 
82,521 
 
 
Other nonrecourse debt
2,474,375 
2,119,774 
 
 
Total liabilities
9,806,947 
12,980,462 
 
 
Total equity
1,181,205 
968,027 
 
 
Total liabilities and equity
10,988,152 
13,948,489 
 
 
Guarantor (Subsidiaries)
 
 
 
 
Assets
 
 
 
 
Cash and cash equivalents
691 
3,907 
775 
401 
Restricted cash
0 
3 
 
 
Accounts receivable
2,115 
2,582 
 
 
Mortgage loans held for sale
0 
0 
 
 
Mortgage loans held for investment, net
0 
0 
 
 
Reverse mortgage interests
0 
0 
 
 
Servicing Asset
0 
0 
 
 
Investment in subsidiaries
0 
0 
 
 
Property and equipment, net
835 
855 
 
 
Derivative financial instruments
0 
0 
 
 
Other assets
268,420 
323,346 
 
 
Total assets
272,061 
330,693 
 
 
Liabilities and shareholders' equity
 
 
 
 
Notes payable
0 
0 
 
 
Unsecured senior notes
0 
0 
 
 
Payables and accrued liabilities
0 
5,950 
 
 
Payables to affiliates
116,349 
116,349 
 
 
Derivative financial instruments
0 
0 
 
 
Mortgage servicing liabilities
0 
0 
 
 
Other nonrecourse debt
0 
0 
 
 
Total liabilities
116,349 
122,299 
 
 
Total equity
155,712 
208,394 
 
 
Total liabilities and equity
272,061 
330,693 
 
 
Non-Guarantor (Subsidiaries)
 
 
 
 
Assets
 
 
 
 
Cash and cash equivalents
12,531 
15,727 
12,068 
0 
Restricted cash
98,522 
280,624 
 
 
Accounts receivable
68,747 
4,064,879 
 
 
Mortgage loans held for sale
41,364 
0 
 
 
Mortgage loans held for investment, net
193,883 
208,264 
 
 
Reverse mortgage interests
0 
0 
 
 
Servicing Asset
0 
0 
 
 
Investment in subsidiaries
0 
0 
 
 
Property and equipment, net
11,820 
2,565 
 
 
Derivative financial instruments
4,706 
3,691 
 
 
Other assets
1,036,860 
3,373,048 
 
 
Total assets
1,468,433 
7,948,798 
 
 
Liabilities and shareholders' equity
 
 
 
 
Notes payable
1,043,279 
3,672,726 
 
 
Unsecured senior notes
0 
0 
 
 
Payables and accrued liabilities
32,619 
14,791 
 
 
Payables to affiliates
164,572 
4,199,023 
 
 
Derivative financial instruments
0 
0 
 
 
Mortgage servicing liabilities
0 
0 
 
 
Other nonrecourse debt
78,481 
89,107 
 
 
Total liabilities
1,318,951 
7,975,647 
 
 
Total equity
149,482 
(26,849)
 
 
Total liabilities and equity
1,468,433 
7,948,798 
 
 
Eliminations
 
 
 
 
Assets
 
 
 
 
Cash and cash equivalents
0 
0 
0 
0 
Restricted cash
0 
0 
 
 
Accounts receivable
0 
0 
 
 
Mortgage loans held for sale
0 
0 
 
 
Mortgage loans held for investment, net
0 
0 
 
 
Reverse mortgage interests
0 
0 
 
 
Servicing Asset
0 
0 
 
 
Investment in subsidiaries
(1,486,398)
(1,149,572)
 
 
Property and equipment, net
0 
0 
 
 
Derivative financial instruments
0 
0 
 
 
Other assets
(1,563,527)
(8,041,618)
 
 
Total assets
(3,049,925)
(9,191,190)
 
 
Liabilities and shareholders' equity
 
 
 
 
Notes payable
0 
0 
 
 
Unsecured senior notes
0 
0 
 
 
Payables and accrued liabilities
(31,533)
(31,463)
 
 
Payables to affiliates
(1,531,994)
(8,010,154)
 
 
Derivative financial instruments
0 
0 
 
 
Mortgage servicing liabilities
0 
0 
 
 
Other nonrecourse debt
0 
0 
 
 
Total liabilities
(1,563,527)
(8,041,617)
 
 
Total equity
(1,486,398)
(1,149,573)
 
 
Total liabilities and equity
$ (3,049,925)
$ (9,191,190)
 
 
Guarantor Financial Statement Information - Consolidating Statements of Operations and Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Revenues:
 
 
 
 
 
Servicing fee income
$ 235,408 
$ 341,679 
$ 733,671 
$ 802,584 
 
Other fee income
126,101 
84,203 
346,366 
186,877 
 
Total fee income
361,509 
425,882 
1,080,037 
989,461 
 
Gain on mortgage loans held for sale
142,815 
205,956 
443,667 
677,104 
 
Total revenues
504,324 
631,838 
1,523,704 
1,666,565 
 
Expenses and impairments:
 
 
 
 
 
Salaries, wages and benefits
160,757 
193,258 
471,404 
499,875 
 
General and administrative
157,068 
187,517 
494,453 
472,241 
 
Loss on foreclosed real estate and other
2,731 
9,498 
5,826 
13,363 
 
Occupancy
6,668 
5,581 
23,385 
18,797 
 
Total expenses and impairments
327,224 
395,854 
995,068 
1,004,276 
 
Other income (expense):
 
 
 
 
 
Interest income
43,314 
63,903 
130,198 
145,948 
 
Interest expense
(116,673)
(168,215)
(412,695)
(378,500)
 
Gain (Loss) on Sale of Properties
4,898 
0 
4,898 
0 
 
Gain/(Loss) on interest rate swaps and caps
940 
400 
2,808 
2,457 
 
Income (Loss) from Subsidiaries, Net of Tax
0 
0 
0 
0 
 
Total other income (expense)
(67,521)
(103,912)
(274,791)
(230,095)
 
Income before taxes
109,579 
132,072 
253,845 
432,194 
 
Income tax expense/(benefit)
(1,700)
50,187 
52,242 
164,233 
 
Net income
111,279 
81,885 
201,603 
267,961 
 
Less: Net gain (loss) attributable to noncontrolling interests
54 
0 
(113)
0 
 
Net income attributable to Nationstar
111,225 
81,885 
201,716 
267,961 
217,054 
Parent Company
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
0 
0 
0 
0 
 
Other fee income
0 
0 
0 
0 
 
Total fee income
0 
0 
0 
0 
 
Gain on mortgage loans held for sale
0 
0 
0 
0 
 
Total revenues
0 
0 
0 
0 
 
Expenses and impairments:
 
 
 
 
 
Salaries, wages and benefits
0 
0 
0 
0 
 
General and administrative
0 
0 
0 
0 
 
Loss on foreclosed real estate and other
0 
0 
0 
0 
 
Occupancy
0 
0 
0 
0 
 
Total expenses and impairments
0 
0 
0 
0 
 
Other income (expense):
 
 
 
 
 
Interest income
0 
0 
0 
0 
 
Interest expense
0 
0 
0 
0 
 
Gain (Loss) on Sale of Properties
0 
 
0 
 
 
Gain/(Loss) on interest rate swaps and caps
0 
0 
0 
0 
 
Income (Loss) from Subsidiaries, Net of Tax
111,225 
81,885 
201,716 
267,961 
 
Total other income (expense)
111,225 
81,885 
201,716 
267,961 
 
Income before taxes
111,225 
81,885 
201,716 
267,961 
 
Income tax expense/(benefit)
0 
0 
0 
0 
 
Net income
111,225 
 
201,716 
 
 
Less: Net gain (loss) attributable to noncontrolling interests
0 
 
0 
 
 
Net income attributable to Nationstar
111,225 
81,885 
201,716 
267,961 
 
Issuer
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
252,537 
357,832 
787,860 
849,789 
 
Other fee income
58,284 
23,404 
90,309 
37,800 
 
Total fee income
310,821 
381,236 
878,169 
887,589 
 
Gain on mortgage loans held for sale
121,912 
190,202 
386,461 
631,144 
 
Total revenues
432,733 
571,438 
1,264,630 
1,518,733 
 
Expenses and impairments:
 
 
 
 
 
Salaries, wages and benefits
135,686 
181,366 
418,190 
470,020 
 
General and administrative
130,356 
167,409 
407,220 
425,268 
 
Loss on foreclosed real estate and other
1,230 
5,221 
(160)
9,288 
 
Occupancy
5,606 
5,237 
20,609 
18,038 
 
Total expenses and impairments
272,878 
359,233 
845,859 
922,614 
 
Other income (expense):
 
 
 
 
 
Interest income
38,403 
60,150 
116,258 
133,834 
 
Interest expense
(106,771)
(132,701)
(367,784)
(299,225)
 
Gain (Loss) on Sale of Properties
4,898 
 
4,898 
 
 
Gain/(Loss) on interest rate swaps and caps
145 
306 
652 
726 
 
Income (Loss) from Subsidiaries, Net of Tax
13,049 
(7,888)
81,050 
740 
 
Total other income (expense)
(50,276)
(80,133)
(164,926)
(163,925)
 
Income before taxes
109,579 
132,072 
253,845 
432,194 
 
Income tax expense/(benefit)
(1,700)
50,187 
52,242 
164,233 
 
Net income
111,279 
 
201,603 
 
 
Less: Net gain (loss) attributable to noncontrolling interests
54 
 
(113)
 
 
Net income attributable to Nationstar
111,225 
81,885 
201,716 
267,961 
 
Guarantor (Subsidiaries)
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
4 
0 
17 
0 
 
Other fee income
(12,973)
58,780 
45,569 
146,791 
 
Total fee income
(12,969)
58,780 
45,586 
146,791 
 
Gain on mortgage loans held for sale
0 
0 
0 
0 
 
Total revenues
(12,969)
58,780 
45,586 
146,791 
 
Expenses and impairments:
 
 
 
 
 
Salaries, wages and benefits
750 
11,799 
4,257 
29,762 
 
General and administrative
(3,002)
19,566 
1,461 
46,378 
 
Loss on foreclosed real estate and other
0 
0 
0 
0 
 
Occupancy
44 
344 
277 
759 
 
Total expenses and impairments
(2,208)
31,709 
5,995 
76,899 
 
Other income (expense):
 
 
 
 
 
Interest income
0 
0 
0 
0 
 
Interest expense
0 
0 
0 
0 
 
Gain (Loss) on Sale of Properties
0 
 
0 
 
 
Gain/(Loss) on interest rate swaps and caps
0 
0 
0 
0 
 
Income (Loss) from Subsidiaries, Net of Tax
0 
0 
0 
0 
 
Total other income (expense)
0 
0 
0 
0 
 
Income before taxes
(10,761)
27,071 
39,591 
69,892 
 
Income tax expense/(benefit)
0 
0 
0 
0 
 
Net income
(10,761)
 
39,591 
 
 
Less: Net gain (loss) attributable to noncontrolling interests
0 
 
0 
 
 
Net income attributable to Nationstar
(10,761)
27,071 
39,591 
69,892 
 
Non-Guarantor (Subsidiaries)
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
0 
0 
0 
0 
 
Other fee income
80,790 
2,019 
210,488 
2,286 
 
Total fee income
80,790 
2,019 
210,488 
2,286 
 
Gain on mortgage loans held for sale
4,124 
0 
4,100 
0 
 
Total revenues
84,914 
2,019 
214,588 
2,286 
 
Expenses and impairments:
 
 
 
 
 
Salaries, wages and benefits
24,321 
93 
48,957 
93 
 
General and administrative
29,714 
542 
85,772 
595 
 
Loss on foreclosed real estate and other
1,501 
4,277 
5,986 
4,075 
 
Occupancy
1,018 
0 
2,499 
0 
 
Total expenses and impairments
56,554 
4,912 
143,214 
4,763 
 
Other income (expense):
 
 
 
 
 
Interest income
4,557 
3,354 
12,840 
10,869 
 
Interest expense
(9,902)
(35,514)
(44,911)
(79,275)
 
Gain (Loss) on Sale of Properties
0 
 
0 
 
 
Gain/(Loss) on interest rate swaps and caps
795 
94 
2,156 
1,731 
 
Income (Loss) from Subsidiaries, Net of Tax
0 
0 
0 
0 
 
Total other income (expense)
(4,550)
(32,066)
(29,915)
(66,675)
 
Income before taxes
23,810 
(34,959)
41,459 
(69,152)
 
Income tax expense/(benefit)
0 
0 
0 
0 
 
Net income
23,810 
 
41,459 
 
 
Less: Net gain (loss) attributable to noncontrolling interests
0 
 
0 
 
 
Net income attributable to Nationstar
23,810 
(34,959)
41,459 
(69,152)
 
Eliminations
 
 
 
 
 
Revenues:
 
 
 
 
 
Servicing fee income
(17,133)
(16,153)
(54,206)
(47,205)
 
Other fee income
0 
0 
0 
0 
 
Total fee income
(17,133)
(16,153)
(54,206)
(47,205)
 
Gain on mortgage loans held for sale
16,779 
15,754 
53,106 
45,960 
 
Total revenues
(354)
(399)
(1,100)
(1,245)
 
Expenses and impairments:
 
 
 
 
 
Salaries, wages and benefits
0 
0 
0 
0 
 
General and administrative
0 
0 
0 
0 
 
Loss on foreclosed real estate and other
0 
0 
0 
0 
 
Occupancy
0 
0 
0 
0 
 
Total expenses and impairments
0 
0 
0 
0 
 
Other income (expense):
 
 
 
 
 
Interest income
354 
399 
1,100 
1,245 
 
Interest expense
0 
0 
0 
0 
 
Gain (Loss) on Sale of Properties
0 
 
0 
 
 
Gain/(Loss) on interest rate swaps and caps
0 
0 
0 
0 
 
Income (Loss) from Subsidiaries, Net of Tax
(124,274)
(73,997)
(282,766)
(268,701)
 
Total other income (expense)
(123,920)
(73,598)
(281,666)
(267,456)
 
Income before taxes
(124,274)
(73,997)
(282,766)
(268,701)
 
Income tax expense/(benefit)
0 
0 
0 
0 
 
Net income
(124,274)
 
(282,766)
 
 
Less: Net gain (loss) attributable to noncontrolling interests
0 
 
0 
 
 
Net income attributable to Nationstar
$ (124,274)
$ (73,997)
$ (282,766)
$ (268,701)
 
Guarantor Financial Statement Information - Consolidating Statements of Cash Flow (Details) (USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Operating activities
 
 
 
Net income attributable to Nationstar
$ 201,716,000 
$ 267,961,000 
$ 217,054,000 
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
 
 
 
Intercompany Gains (Losses)
0 
0 
 
Share-based Compensation
11,344,000 
8,140,000 
 
Net tax effect of stock grants
(2,197,000)
(2,660,000)
 
Loss on foreclosed real estate and other
5,826,000 
13,363,000 
 
Gain on mortgage loans held for sale
(443,667,000)
(677,104,000)
 
Payments for Origination and Purchases of Loans Held-for-sale
(16,548,058,000)
(17,166,460,000)
 
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees
17,757,055,000 
15,376,486,000 
 
Gain Loss on Derivatives Including Ineffectiveness on Interest Rate Swaps and Caps
(2,808,000)
(2,457,000)
 
Cash settlement on derivative financial instruments
1,352,000 
(4,544,000)
 
Depreciation and amortization
29,963,000 
16,686,000 
 
Amortization of Debt Discount (Premium)
16,660,000 
39,261,000 
 
Fair value changes in excess spread financing
61,080,000 
33,229,000 
 
Change in fair value on mortgage servicing rights
128,227,000 
(38,117,000)
 
Fair value change in mortgage servicing rights financing liability
(38,260,000)
0 
 
Changes in assets and liabilities:
 
 
 
Accounts receivable
601,549,000 
(96,120,000)
 
Reverse funded advances due to securitization
(572,544,000)
(460,534,000)
 
Other assets
62,286,000 
(331,855,000)
 
Increase (Decrease) in Accounts Payable and Accrued Liabilities
(25,460,000)
503,061,000 
 
Net cash attributable to operating activities
1,244,064,000 
(2,521,664,000)
 
Investing activities
 
 
 
Payments for (Proceeds from) Productive Assets
(41,567,000)
(47,883,000)
 
Proceeds from Sale of Buildings
10,412,000 
0 
 
Cash Proceeds from assumption of reverse mortgage servicing obligations, net
0 
(15,059,000)
 
Payments to Acquire Mortgage Servicing Rights (MSR)
(317,247,000)
(2,331,658,000)
 
Proceeds on sale of servicer advances
512,527,000 
0 
 
Repurchases of REO from Ginnie Mae
(9,134,000)
0 
 
Acquisitions, net
(18,000,000)
(78,200,000)
 
Proceeds from Sale of Real Estate Owned
70,480,000 
60,389,000 
 
Net cash attributable to investing activities
207,471,000 
(2,412,411,000)
 
Financing activities
 
 
 
Proceeds from (Repayments of) Restricted Cash, Financing Activities
282,289,000 
(348,499,000)
 
Issuance of Senior Unsecured Notes
0 
1,365,244,000 
 
Repayments of Unsecured Debt
(285,000,000)
0 
 
Payments of Financing Costs
(11,461,000)
(46,784,000)
 
Proceeds from (Repayments of) Secured Debt
(1,942,141,000)
3,042,623,000 
 
Issuance of excess spread financing
150,951,000 
707,640,000 
 
Repayment of excess spread financing
(135,897,000)
(77,505,000)
 
Proceeds from Mortgage Backed Securities Notes Payable
279,636,000 
422,787,000 
 
Proceeds from mortgage servicing rights financing
52,835,000 
0 
 
Repayment of Nonrecourse Debt Legacy Assets
(12,356,000)
(9,925,000)
 
Due to financial services companies
 
0 
 
Contributions from joint venture member to noncontrolling interests
0 
4,990,000 
4,990,000 
Net tax benefit for stock grants issued
2,197,000 
2,660,000 
4,579,000 
Redemption of shares for stock vesting
(4,755,000)
(6,554,000)
(6,944,000)
Net cash attributable to financing activities
(1,623,702,000)
5,056,677,000 
 
Net increase (decrease) in cash and cash equivalents
(172,167,000)
122,602,000 
 
Cash and cash equivalents at beginning of period
441,902,000 
152,649,000 
152,649,000 
Cash and cash equivalents at end of period
269,735,000 
275,251,000 
441,902,000 
Parent Company
 
 
 
Operating activities
 
 
 
Net income attributable to Nationstar
201,716,000 
267,961,000 
 
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
 
 
 
Intercompany Gains (Losses)
(201,716,000)
(267,961,000)
 
Share-based Compensation
0 
0 
 
Net tax effect of stock grants
0 
0 
 
Loss on foreclosed real estate and other
0 
0 
 
Gain on mortgage loans held for sale
0 
0 
 
Payments for Origination and Purchases of Loans Held-for-sale
0 
0 
 
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees
0 
0 
 
Gain Loss on Derivatives Including Ineffectiveness on Interest Rate Swaps and Caps
0 
0 
 
Cash settlement on derivative financial instruments
0 
0 
 
Depreciation and amortization
0 
0 
 
Amortization of Debt Discount (Premium)
0 
0 
 
Fair value changes in excess spread financing
0 
0 
 
Change in fair value on mortgage servicing rights
0 
0 
 
Fair value change in mortgage servicing rights financing liability
0 
0 
 
Changes in assets and liabilities:
 
 
 
Accounts receivable
0 
0 
 
Reverse funded advances due to securitization
0 
0 
 
Other assets
4,755,000 
3,894,000 
 
Increase (Decrease) in Accounts Payable and Accrued Liabilities
0 
0 
 
Net cash attributable to operating activities
4,755,000 
3,894,000 
 
Investing activities
 
 
 
Payments for (Proceeds from) Productive Assets
0 
0 
 
Proceeds from Sale of Buildings
0 
 
 
Cash Proceeds from assumption of reverse mortgage servicing obligations, net
0 
0 
 
Payments to Acquire Mortgage Servicing Rights (MSR)
0 
0 
 
Proceeds on sale of servicer advances
0 
0 
 
Repurchases of REO from Ginnie Mae
0 
0 
 
Acquisitions, net
0 
0 
 
Proceeds from Sale of Real Estate Owned
0 
0 
 
Net cash attributable to investing activities
0 
0 
 
Financing activities
 
 
 
Proceeds from (Repayments of) Restricted Cash, Financing Activities
0 
0 
 
Issuance of Senior Unsecured Notes
0 
0 
 
Repayments of Unsecured Debt
0 
 
 
Payments of Financing Costs
0 
0 
 
Proceeds from (Repayments of) Secured Debt
0 
0 
 
Issuance of excess spread financing
0 
0 
 
Repayment of excess spread financing
0 
0 
 
Proceeds from Mortgage Backed Securities Notes Payable
0 
0 
 
Proceeds from mortgage servicing rights financing
0 
0 
 
Repayment of Nonrecourse Debt Legacy Assets
0 
0 
 
Due to financial services companies
 
0 
 
Contributions from joint venture member to noncontrolling interests
0 
0 
 
Net tax benefit for stock grants issued
0 
2,660,000 
 
Redemption of shares for stock vesting
(4,755,000)
(6,554,000)
 
Net cash attributable to financing activities
(4,755,000)
(3,894,000)
 
Net increase (decrease) in cash and cash equivalents
0 
0 
 
Cash and cash equivalents at beginning of period
0 
0 
0 
Cash and cash equivalents at end of period
0 
0 
 
Issuer
 
 
 
Operating activities
 
 
 
Net income attributable to Nationstar
201,716,000 
267,961,000 
 
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
 
 
 
Intercompany Gains (Losses)
(81,050,000)
(740,000)
 
Share-based Compensation
11,344,000 
8,140,000 
 
Net tax effect of stock grants
(2,197,000)
(2,660,000)
 
Loss on foreclosed real estate and other
(160,000)
9,288,000 
 
Gain on mortgage loans held for sale
(386,461,000)
(631,144,000)
 
Payments for Origination and Purchases of Loans Held-for-sale
(16,548,058,000)
(17,166,460,000)
 
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees
17,729,442,000 
15,314,755,000 
 
Gain Loss on Derivatives Including Ineffectiveness on Interest Rate Swaps and Caps
(652,000)
(726,000)
 
Cash settlement on derivative financial instruments
0 
0 
 
Depreciation and amortization
27,148,000 
15,987,000 
 
Amortization of Debt Discount (Premium)
18,578,000 
40,937,000 
 
Fair value changes in excess spread financing
61,080,000 
33,229,000 
 
Change in fair value on mortgage servicing rights
128,227,000 
(38,117,000)
 
Fair value change in mortgage servicing rights financing liability
(38,260,000)
0 
 
Changes in assets and liabilities:
 
 
 
Accounts receivable
(3,395,051,000)
(68,473,000)
 
Reverse funded advances due to securitization
(572,544,000)
(460,534,000)
 
Other assets
1,659,322,000 
3,076,784,000 
 
Increase (Decrease) in Accounts Payable and Accrued Liabilities
(38,452,000)
507,301,000 
 
Net cash attributable to operating activities
(1,226,028,000)
905,528,000 
 
Investing activities
 
 
 
Payments for (Proceeds from) Productive Assets
(29,517,000)
(45,767,000)
 
Proceeds from Sale of Buildings
10,412,000 
 
 
Cash Proceeds from assumption of reverse mortgage servicing obligations, net
0 
(15,059,000)
 
Payments to Acquire Mortgage Servicing Rights (MSR)
(317,247,000)
(2,331,658,000)
 
Proceeds on sale of servicer advances
512,527,000 
0 
 
Repurchases of REO from Ginnie Mae
(9,134,000)
   
 
Acquisitions, net
(18,000,000)
(78,200,000)
 
Proceeds from Sale of Real Estate Owned
70,480,000 
60,389,000 
 
Net cash attributable to investing activities
219,521,000 
(2,410,295,000)
 
Financing activities
 
 
 
Proceeds from (Repayments of) Restricted Cash, Financing Activities
100,185,000 
(274,085,000)
 
Issuance of Senior Unsecured Notes
0 
1,365,244,000 
 
Repayments of Unsecured Debt
(285,000,000)
 
 
Payments of Financing Costs
(11,461,000)
(46,784,000)
 
Proceeds from (Repayments of) Secured Debt
687,306,000 
(487,360,000)
 
Issuance of excess spread financing
150,951,000 
707,640,000 
 
Repayment of excess spread financing
(135,897,000)
(77,505,000)
 
Proceeds from Mortgage Backed Securities Notes Payable
279,636,000 
422,787,000 
 
Proceeds from mortgage servicing rights financing
52,835,000 
0 
 
Repayment of Nonrecourse Debt Legacy Assets
0 
0 
 
Due to financial services companies
 
   
 
Contributions from joint venture member to noncontrolling interests
0 
4,990,000 
 
Net tax benefit for stock grants issued
2,197,000 
0 
 
Redemption of shares for stock vesting
0 
0 
 
Net cash attributable to financing activities
840,752,000 
1,614,927,000 
 
Net increase (decrease) in cash and cash equivalents
(165,755,000)
110,160,000 
 
Cash and cash equivalents at beginning of period
422,268,000 
152,248,000 
152,248,000 
Cash and cash equivalents at end of period
256,513,000 
262,408,000 
 
Guarantor (Subsidiaries)
 
 
 
Operating activities
 
 
 
Net income attributable to Nationstar
39,591,000 
69,892,000 
 
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
 
 
 
Intercompany Gains (Losses)
0 
0 
 
Share-based Compensation
0 
0 
 
Net tax effect of stock grants
0 
0 
 
Loss on foreclosed real estate and other
0 
0 
 
Gain on mortgage loans held for sale
0 
0 
 
Payments for Origination and Purchases of Loans Held-for-sale
0 
0 
 
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees
0 
0 
 
Gain Loss on Derivatives Including Ineffectiveness on Interest Rate Swaps and Caps
0 
0 
 
Cash settlement on derivative financial instruments
0 
0 
 
Depreciation and amortization
89,000 
651,000 
 
Amortization of Debt Discount (Premium)
0 
0 
 
Fair value changes in excess spread financing
0 
0 
 
Change in fair value on mortgage servicing rights
0 
0 
 
Fair value change in mortgage servicing rights financing liability
0 
0 
 
Changes in assets and liabilities:
 
 
 
Accounts receivable
467,000 
(27,589,000)
 
Reverse funded advances due to securitization
0 
0 
 
Other assets
(37,347,000)
(50,016,000)
 
Increase (Decrease) in Accounts Payable and Accrued Liabilities
(5,950,000)
10,954,000 
 
Net cash attributable to operating activities
(3,150,000)
3,892,000 
 
Investing activities
 
 
 
Payments for (Proceeds from) Productive Assets
(69,000)
(1,064,000)
 
Proceeds from Sale of Buildings
0 
 
 
Cash Proceeds from assumption of reverse mortgage servicing obligations, net
0 
0 
 
Payments to Acquire Mortgage Servicing Rights (MSR)
0 
0 
 
Proceeds on sale of servicer advances
0 
0 
 
Repurchases of REO from Ginnie Mae
0 
0 
 
Acquisitions, net
0 
0 
 
Proceeds from Sale of Real Estate Owned
0 
0 
 
Net cash attributable to investing activities
(69,000)
(1,064,000)
 
Financing activities
 
 
 
Proceeds from (Repayments of) Restricted Cash, Financing Activities
3,000 
(2,454,000)
 
Issuance of Senior Unsecured Notes
0 
0 
 
Repayments of Unsecured Debt
0 
 
 
Payments of Financing Costs
0 
0 
 
Proceeds from (Repayments of) Secured Debt
0 
0 
 
Issuance of excess spread financing
0 
0 
 
Repayment of excess spread financing
0 
0 
 
Proceeds from Mortgage Backed Securities Notes Payable
0 
0 
 
Proceeds from mortgage servicing rights financing
0 
0 
 
Repayment of Nonrecourse Debt Legacy Assets
0 
0 
 
Due to financial services companies
 
0 
 
Contributions from joint venture member to noncontrolling interests
0 
0 
 
Net tax benefit for stock grants issued
0 
0 
 
Redemption of shares for stock vesting
0 
0 
 
Net cash attributable to financing activities
3,000 
(2,454,000)
 
Net increase (decrease) in cash and cash equivalents
(3,216,000)
374,000 
 
Cash and cash equivalents at beginning of period
3,907,000 
401,000 
401,000 
Cash and cash equivalents at end of period
691,000 
775,000 
 
Non-Guarantor (Subsidiaries)
 
 
 
Operating activities
 
 
 
Net income attributable to Nationstar
41,459,000 
(69,152,000)
 
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
 
 
 
Intercompany Gains (Losses)
0 
0 
 
Share-based Compensation
0 
0 
 
Net tax effect of stock grants
0 
0 
 
Loss on foreclosed real estate and other
5,986,000 
4,075,000 
 
Gain on mortgage loans held for sale
(4,100,000)
0 
 
Payments for Origination and Purchases of Loans Held-for-sale
0 
0 
 
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees
(25,493,000)
15,771,000 
 
Gain Loss on Derivatives Including Ineffectiveness on Interest Rate Swaps and Caps
(2,156,000)
(1,731,000)
 
Cash settlement on derivative financial instruments
1,352,000 
(4,544,000)
 
Depreciation and amortization
2,726,000 
48,000 
 
Amortization of Debt Discount (Premium)
(1,918,000)
(1,676,000)
 
Fair value changes in excess spread financing
0 
0 
 
Change in fair value on mortgage servicing rights
0 
0 
 
Fair value change in mortgage servicing rights financing liability
0 
0 
 
Changes in assets and liabilities:
 
 
 
Accounts receivable
3,996,133,000 
(58,000)
 
Reverse funded advances due to securitization
0 
0 
 
Other assets
(1,564,513,000)
(3,379,816,000)
 
Increase (Decrease) in Accounts Payable and Accrued Liabilities
19,011,000 
2,105,000 
 
Net cash attributable to operating activities
2,468,487,000 
(3,434,978,000)
 
Investing activities
 
 
 
Payments for (Proceeds from) Productive Assets
(11,981,000)
(1,052,000)
 
Proceeds from Sale of Buildings
0 
 
 
Cash Proceeds from assumption of reverse mortgage servicing obligations, net
0 
0 
 
Payments to Acquire Mortgage Servicing Rights (MSR)
0 
0 
 
Proceeds on sale of servicer advances
0 
0 
 
Repurchases of REO from Ginnie Mae
0 
0 
 
Acquisitions, net
0 
0 
 
Proceeds from Sale of Real Estate Owned
0 
0 
 
Net cash attributable to investing activities
(11,981,000)
(1,052,000)
 
Financing activities
 
 
 
Proceeds from (Repayments of) Restricted Cash, Financing Activities
182,101,000 
(71,960,000)
 
Issuance of Senior Unsecured Notes
0 
0 
 
Repayments of Unsecured Debt
0 
 
 
Payments of Financing Costs
0 
0 
 
Proceeds from (Repayments of) Secured Debt
(2,629,447,000)
3,529,983,000 
 
Issuance of excess spread financing
0 
0 
 
Repayment of excess spread financing
0 
0 
 
Proceeds from Mortgage Backed Securities Notes Payable
0 
0 
 
Proceeds from mortgage servicing rights financing
0 
0 
 
Repayment of Nonrecourse Debt Legacy Assets
(12,356,000)
(9,925,000)
 
Due to financial services companies
 
0 
 
Contributions from joint venture member to noncontrolling interests
0 
0 
 
Net tax benefit for stock grants issued
0 
0 
 
Redemption of shares for stock vesting
0 
0 
 
Net cash attributable to financing activities
(2,459,702,000)
3,448,098,000 
 
Net increase (decrease) in cash and cash equivalents
(3,196,000)
12,068,000 
 
Cash and cash equivalents at beginning of period
15,727,000 
0 
0 
Cash and cash equivalents at end of period
12,531,000 
12,068,000 
 
Eliminations
 
 
 
Operating activities
 
 
 
Net income attributable to Nationstar
(282,766,000)
(268,701,000)
 
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
 
 
 
Intercompany Gains (Losses)
282,766,000 
268,701,000 
 
Share-based Compensation
0 
0 
 
Net tax effect of stock grants
0 
0 
 
Loss on foreclosed real estate and other
0 
0 
 
Gain on mortgage loans held for sale
(53,106,000)
(45,960,000)
 
Payments for Origination and Purchases of Loans Held-for-sale
0 
0 
 
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees
53,106,000 
45,960,000 
 
Gain Loss on Derivatives Including Ineffectiveness on Interest Rate Swaps and Caps
0 
0 
 
Cash settlement on derivative financial instruments
0 
0 
 
Depreciation and amortization
0 
0 
 
Amortization of Debt Discount (Premium)
0 
0 
 
Fair value changes in excess spread financing
0 
0 
 
Change in fair value on mortgage servicing rights
0 
0 
 
Fair value change in mortgage servicing rights financing liability
0 
0 
 
Changes in assets and liabilities:
 
 
 
Accounts receivable
0 
0 
 
Reverse funded advances due to securitization
0 
0 
 
Other assets
69,000 
17,299,000 
 
Increase (Decrease) in Accounts Payable and Accrued Liabilities
(69,000)
(17,299,000)
 
Net cash attributable to operating activities
0 
0 
 
Investing activities
 
 
 
Payments for (Proceeds from) Productive Assets
0 
0 
 
Proceeds from Sale of Buildings
0 
 
 
Cash Proceeds from assumption of reverse mortgage servicing obligations, net
0 
0 
 
Payments to Acquire Mortgage Servicing Rights (MSR)
0 
0 
 
Proceeds on sale of servicer advances
0 
0 
 
Repurchases of REO from Ginnie Mae
0 
0 
 
Acquisitions, net
0 
0 
 
Proceeds from Sale of Real Estate Owned
0 
0 
 
Net cash attributable to investing activities
0 
0 
 
Financing activities
 
 
 
Proceeds from (Repayments of) Restricted Cash, Financing Activities
0 
0 
 
Issuance of Senior Unsecured Notes
0 
0 
 
Repayments of Unsecured Debt
0 
 
 
Payments of Financing Costs
0 
0 
 
Proceeds from (Repayments of) Secured Debt
0 
0 
 
Issuance of excess spread financing
0 
0 
 
Repayment of excess spread financing
0 
0 
 
Proceeds from Mortgage Backed Securities Notes Payable
0 
0 
 
Proceeds from mortgage servicing rights financing
0 
0 
 
Repayment of Nonrecourse Debt Legacy Assets
0 
0 
 
Due to financial services companies
 
0 
 
Contributions from joint venture member to noncontrolling interests
0 
0 
 
Net tax benefit for stock grants issued
0 
0 
 
Redemption of shares for stock vesting
0 
0 
 
Net cash attributable to financing activities
0 
0 
 
Net increase (decrease) in cash and cash equivalents
0 
0 
 
Cash and cash equivalents at beginning of period
0 
0 
0 
Cash and cash equivalents at end of period
$ 0 
$ 0 
 
Affiliates of Fortress Investment Group - Narrative (Details) (USD $)
1 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended
Jun. 30, 2014
Apr. 30, 2014
Mar. 31, 2014
Feb. 28, 2014
Jan. 31, 2014
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Jun. 23, 2014
Mar. 7, 2014
Jan. 30, 2014
Feb. 28, 2013
Sep. 30, 2014
Springleaf [Member]
Sep. 30, 2013
Springleaf [Member]
Sep. 30, 2014
Springleaf [Member]
Sep. 30, 2013
Springleaf [Member]
Aug. 31, 2014
Springleaf [Member]
Dec. 31, 2013
Springleaf [Member]
Sep. 30, 2014
Newcastle
Sep. 30, 2013
Newcastle
Sep. 30, 2014
Newcastle
Sep. 30, 2013
Newcastle
Dec. 31, 2013
Newcastle
Sep. 30, 2014
New Residential [Member]
Sep. 30, 2014
Reverse Mortgages
Dec. 31, 2013
Reverse Mortgages
Feb. 28, 2013
Reverse Mortgages
Sep. 30, 2014
Maximum [Member]
Dec. 31, 2013
Maximum [Member]
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement
 
 
 
 
 
$ 2,200,000,000 
 
 
 
 
 
 
 
 
 
 
$ 4,800,000,000 
 
$ 800,000,000 
 
$ 800,000,000 
 
$ 900,000,000 
 
$ 28,400,000,000 
$ 28,900,000,000 
$ 100,000,000 
 
 
Payments to Acquire Mortgage Servicing Rights (MSR)
 
 
 
 
 
317,247,000 
2,331,658,000 
 
 
 
 
 
 
 
38,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contractually Specified Servicing Fees, Late Fees, and Ancillary Fees Earned in Exchange for Servicing Financial Assets
 
 
 
 
 
 
 
 
 
 
 
 
1,100,000 
2,100,000 
4,700,000 
6,100,000 
 
 
1,000,000 
1,100,000 
3,100,000 
3,500,000 
 
1,600,000 
 
 
 
 
 
Due from Affiliates
 
 
 
 
 
5,479,000 
 
8,861,000 
 
 
 
 
500,000 
 
500,000 
 
 
600,000 
 
 
 
 
 
 
 
 
 
 
 
Servicing fee, percentage of unpaid principal balance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.50% 
 
 
 
 
 
 
 
 
Payment of Servicing Fees in Excess of Contractually Specified Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,200,000 
 
 
 
 
 
 
 
 
Excess spread financing - fair value
 
 
 
 
 
1,062,544,000 
 
986,410,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase price paid reverse mortgage
 
 
 
 
 
 
 
 
 
 
 
50,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of aquired reverse loans, sold to co-investor
 
 
 
 
 
 
 
 
 
 
 
70.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicer Advances sold to unaffiliated third party
 
617,500,000 
 
756,200,000 
 
2,200,000,000 
 
2,700,000,000 
303,800,000 
299,100,000 
253,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,300,000,000 
 
UPB related to sold servicing asset
 
 
 
 
 
 
 
44,300,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
130,100,000,000 
Nonrecourse Variable Funding Notes issued by Special Purpose Subsidiaries of NSM
 
 
 
 
 
 
 
2,100,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from Sales Agreement with New Residential
 
 
 
 
 
 
 
307,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Servicing Rights Liability Resulting from Sale of Servicer Advances, Rights not Accounted for as a Sale
33,452,000 
 
 
 
 
44,449,000 
 
29,874,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sold MSR Basic Fee Component
14,000,000,000 
12,000,000,000 
10,500,000,000 
9,400,000,000 
8,300,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds on sale of servicer advances
$ 51,000,000 
$ 75,200,000 
$ 41,400,000 
$ 91,400,000 
$ 253,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subsequent Events - Narrative (Details) (USD $)
Sep. 30, 2014
Unsecured Senior Notes 10.875% Due April 2015
Unsecured Senior Notes
Sep. 30, 2014
Servicing Segment
Agency Advance Financing Facility (2011) [Member]
Notes Payable to Banks
Oct. 31, 2014
Servicing Segment
Agency Advance Financing Facility (2011) [Member]
Notes Payable to Banks
Subsequent Event [Member]
Sep. 30, 2014
Originations Segment
Warehouse Facility $700 Million [Member]
Notes Payable to Banks
Sep. 30, 2014
Originations Segment
Warehouse Facility $200 Million [Member]
Notes Payable to Banks
Oct. 31, 2014
Originations Segment
Warehouse Facility $200 Million [Member]
Notes Payable to Banks
Subsequent Event [Member]
Subsequent Event [Line Items]
 
 
 
 
 
 
Line of Credit Facility, Maximum Borrowing Capacity
 
$ 1,100,000,000 
$ 1,100,000,000 
$ 500,000,000 
$ 200,000,000 
$ 200,000,000 
Interest rate
10.875%