Quarterly report pursuant to Section 13 or 15(d)

OTHER INCOME, GENERAL AND ADMINISTRATIVE, OTHER ASSETS AND LIABILITIES

v3.20.1
OTHER INCOME, GENERAL AND ADMINISTRATIVE, OTHER ASSETS AND LIABILITIES
3 Months Ended
Mar. 31, 2020
Other Income Assets And Liabilities  
OTHER INCOME, GENERAL AND ADMINISTRATIVE, OTHER ASSETS AND LIABILITIES
OTHER INCOME, GENERAL AND ADMINISTRATIVE, OTHER ASSETS AND LIABILITIES
 
Gain (Loss) on Settlement of Investments, Net — This item is comprised of the following:
 
 
Three Months Ended  
 March 31,
 
 
2020
 
2019
Gain (loss) on sale of real estate securities, net
 
$
(754,540
)
 
$
65,196

Gain (loss) on sale of acquired residential mortgage loans, net
 
35,236

 
3,183

Gain (loss) on settlement of derivatives
 
(84,712
)
 
(93,076
)
Gain (loss) on liquidated residential mortgage loans
 
(839
)
 
(2,489
)
Gain (loss) on sale of REO
 
1,173

 
(1,725
)
Other gains (losses)
 
4,110

 
(14,257
)
 
 
$
(799,572
)
 
$
(43,168
)


Other Income (Loss), Net — This item is comprised of the following:
 
 
Three Months Ended  
 March 31,
 
 
2020
 
2019
Unrealized gain (loss) on notes and bonds payable
 
$
17,002

 
$
(1,137
)
Unrealized gain (loss) on contingent consideration
 
(1,614
)
 
(2,045
)
Unrealized gain (loss) on consumer loans held-for-investment, at fair value
 
(39,917
)
 

Unrealized gain (loss) on equity investments
 
(45,023
)
 
(73
)
Gain (loss) on transfer of loans to REO
 
2,595

 
4,984

Gain (loss) on transfer of loans to other assets
 
(241
)
 
(521
)
Gain (loss) on Excess MSR recapture agreements
 
628

 
307

Gain (loss) on Ocwen common stock
 
(5,050
)
 
2,786

Rental and ancillary revenue
 
19,607

 

Other income (loss)
 
(24,717
)
 
1,694

 
 
$
(76,730
)
 
$
5,995



General and Administrative Expenses, Loan Servicing Expense and Subservicing Expense — General and administrative expense primarily include employee compensation, legal fees, audit fees, insurance premiums, and other costs, as well as loan servicing and subservicing expenses, and are expensed as incurred. General and Administrative Expenses is comprised of the following:
 
 
Three Months Ended  
 March 31,
 
 
2020
 
2019
Compensation and benefits expense, servicing
 
$
51,341

 
$
25,301

Compensation and benefits expense, origination
 
61,278

 
31,310

Legal and professional expense
 
26,037

 
13,292

Loan origination expense
 
22,400

 
10,269

Occupancy expense
 
8,064

 
4,179

Other(A)
 
37,243

 
14,589

 
 
$
206,363

 
$
98,940


(A)
Represents miscellaneous general and administrative expenses.

Other Assets and Other Liabilities — Other assets and liabilities are comprised of the following:
 
Other Assets
 
 
 
Accrued Expenses
and Other Liabilities
 
March 31, 2020
 
December 31, 2019
 
 
 
March 31, 2020
 
December 31, 2019
Margin receivable, net(A)
$
733,624

 
$
280,176

 
MSR purchase price holdback
 
$
93,882

 
$
75,348

Servicing fee receivables
153,137

 
159,607

 
Interest payable
 
37,585

 
68,668

Due from servicers
140,024

 
163,961

 
Accounts payable
 
138,585

 
119,771

Principal and interest receivable
48,895

 
85,191

 
Derivative liabilities (Note 10)
 
160,353

 
6,885

Equity investments(B)
69,533

 
114,763

 
Due to servicers
 
119,285

 
127,846

Other receivables
84,287

 
117,045

 
Residential mortgage loan repurchase liability
 
197,715

 
172,336

Real Estate Owned
81,289

 
93,672

 
Contingent Consideration
 
56,836

 
55,222

Single-family rental properties
26,661

 
24,133

 
Accrued compensation and benefits
 
28,644

 
41,228

Goodwill(C)
29,468

 
29,737

 
Excess spread financing, at fair value
 
25,614

 
31,777

Notes Receivable(D)
45,287

 
37,001

 
Operating lease liabilities
 
38,568

 
38,520

Warrants, at fair value
25,519

 
28,042

 
Reserve for sales recourse
 
11,144

 
12,549

Recovery asset
20,921

 
23,100

 
Other liabilities
 
59,929

 
22,976

Residential mortgage loans subject to repurchase
197,715

 
172,336

 
 
 
$
968,140

 
$
773,126

Property and equipment
23,271

 
18,018

 
 
 
 
 
 
Receivable from government agency(E)
18,020

 
19,670

 
 
 
 
 
 
Intangible assets
36,496

 
40,963

 
 
 
 
 
 
Prepaid expenses
20,862

 
19,249

 
 
 
 
 
 
Operating lease right-of-use asset
32,544

 
32,120

 
 
 
 
 
 
Derivative assets (Note 10)
132,616

 
41,501

 
 
 
 
 
 
Ocwen common stock, at fair value
2,902

 
7,952

 
 
 
 
 
 
Other assets
48,396

 
51,230

 
 
 
 
 
 
 
$
1,971,467

 
$
1,559,467

 
 
 

 



(A)
Represents collateral posted primarily as a result of changes in fair value of our 1) real estate securities securing our repurchase agreements and 2) derivative instruments.
(B)
Represents equity investments in funds that invest in 1) a commercial redevelopment project and 2) operating companies in the single-family housing industry. The indirect investments are accounted for at fair value based on the net asset value (“NAV”) of New Residential’s investment and as an equity method investment, respectively.
(C)
Includes goodwill derived from the acquisition of Shellpoint Partners LLC (“Shellpoint”) as well as Guardian Asset Management, a leading national provider of field services and property management to government agencies, financial institutions and asset management firms.
(D)
Represents a subordinated debt facility to Covius.
(E)
Represents claims receivable from the FHA on EBO and reverse mortgage loans for which foreclosure has been completed and for which New Residential has made or intends to make a claim on the FHA guarantee.

Accretion and Other Amortization — As reflected on the Condensed Consolidated Statements of Cash Flows, this item is comprised of the following:
 
 
Three Months Ended  
 March 31,
 
 
2020
 
2019
Accretion of net discount on securities and loans(A)
 
$
40,052

 
$
141,586

Accretion of servicer advances receivable discount and servicer advance investments
 
(10,915
)
 
7,511

Accretion of excess mortgage servicing rights income
 
13,226

 
5,115

Amortization of deferred financing costs
 
(1,136
)
 
(863
)
Amortization of discount on notes and bonds payable
 
(123
)
 
(455
)
 
 
$
41,104

 
$
152,894


(A)
Includes accretion of the accretable yield on PCD loans.