Quarterly report pursuant to Section 13 or 15(d)

INVESTMENTS IN SERVICER ADVANCES (Tables)

v2.4.0.8
INVESTMENTS IN SERVICER ADVANCES (Tables)
9 Months Ended
Sep. 30, 2014
Investments, All Other Investments [Abstract]  
Schedule of investment in servicer advances
The following is a summary of the investments in servicer advances, including the right to the basic fee component of the related MSRs, made by the Buyer, which New Residential consolidates:
 
Amortized Cost Basis

Carrying Value(A)

Weighted Average Discount Rate

Weighted Average Life (Years)(B)
September 30, 2014
 
 
 
 
 
 
 
Servicer advances
$
3,108,288

 
$
3,214,113

 
5.5
%
 
4.2
As of December 31, 2013
 
 
 
 
 
 

Servicer advances
$
2,665,551

 
$
2,665,551

 
5.6
%
 
2.7
  
(A)
Carrying value represents the fair value of the investments in servicer advances, including the basic fee component of the related MSRs.
(B)
Weighted Average Life represents the weighted average expected timing of the receipt of expected net cash flows for this investment.

 
 
Three Months Ended September 30,

Nine Months Ended September 30,
 
 
2014

2013

2014

2013
Changes in Fair Value Recorded in
    Other Income
 
$
22,948

 
$

 
$
105,825

 
$


The following is additional information regarding the servicer advances, and related financing, of the Buyer, which New Residential consolidates:
 
 
 
 
 
 
 
 
 
 
Loan-to-Value
 
Cost of Funds(B)
 
 
UPB of Underlying Residential Mortgage Loans
 
Outstanding Servicer Advances
 
Servicer Advances to UPB of Underlying Residential Mortgage Loans
 
Carrying Value of Notes Payable
 
Gross
 
Net(A)
 
Gross
 
Net
September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicer advances(C)
 
$
97,398,297

 
$
3,041,905

 
3.1
%
 
$
2,824,007

 
91.5
%
 
90.5
%
 
3.0
%
 
2.2
%
December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicer advances(C)
 
$
43,444,216

 
$
2,661,130

 
6.1
%
 
$
2,390,778

 
89.8
%
 
88.6
%
 
4.0
%
 
2.3
%
 
(A)
Ratio of face amount of borrowings to par amount of servicer advance collateral, net of an interest reserve maintained by the Buyer.
(B)
Annualized measure of the cost associated with borrowings. Gross Cost of Funds primarily includes interest expense and facility fees. Net Cost of Funds excludes facility fees.
(C)
The following types of advances comprise the investments in servicer advances:
    


September 30, 2014

December 31, 2013
Principal and interest advances

$
792,875


$
1,516,715

Escrow advances (taxes and insurance advances)

1,556,968


934,525

Foreclosure advances

692,062


209,890

  Total

$
3,041,905


$
2,661,130

Schedule of interest income - servicer advances
Interest income recognized by New Residential related to its investments in servicer advances was comprised of the following:


Three Months Ended September 30,

Nine Months Ended September 30,


2014

2013

2014

2013
Interest income, gross of amounts attributable to servicer
   compensation

$
79,116


$


$
232,800


$

  Amounts attributable to base servicer compensation

(18,914
)



(68,220
)


  Amounts attributable to incentive servicer compensation

(9,235
)



(10,790
)


Interest income from investments in servicer advances

$
50,967


$


$
153,790


$


Others' interests in the equity of the Buyer is computed as follows:
 
 
September 30, 2014
 
December 31, 2013
Total Advance Purchaser LLC equity
 
$
509,898

 
$
362,807

    Others' ownership interest
 
55.0
%
 
68.1
%
Others' interest in equity of consolidated subsidiary
 
$
280,445

 
$
247,225


Others' interests in the Buyer's net income is computed as follows:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2014
 
2013
 
2014
 
2013
Net Advance Purchaser LLC income
 
$
46,833

 
$

 
$
166,227

 
$

    Others' ownership interest as a percent of total(A)
 
54.9
%
 
%
 
55.7
%
 
%
Others' interest in net income (loss) of consolidated subsidiaries
 
$
25,726

 
$

 
$
92,524

 
$


(A)
As a result, New Residential owned 45.1% and 44.3% of the Buyer, on average during the three months ended September 30, 2014 and nine months ended September 30, 2014, respectively.