Attached files

file filename
EX-4.1 - EXHIBIT 4.1 - Nationstar Mortgage Holdings Inc.exhibit41-amendmentno2tofo.htm
EX-4.4 - EXHIBIT 4.4 - Nationstar Mortgage Holdings Inc.exhibit44-amendmentno7tose.htm
EX-4.2 - EXHIBIT 4.2 - Nationstar Mortgage Holdings Inc.exhibit42-amendmentno3tofo.htm
EX-4.3 - EXHIBIT 4.3 - Nationstar Mortgage Holdings Inc.exhibit43-amendmentno6tose.htm
EX-31.1 - EXHIBIT 31.1 - Nationstar Mortgage Holdings Inc.nsmh06302015exhibit311.htm
EX-31.2 - EXHIBIT 31.2 - Nationstar Mortgage Holdings Inc.nsmh06302015exhibit312.htm
EX-32.1 - EXHIBIT 32.1 - Nationstar Mortgage Holdings Inc.nsmh06302015exhibit321.htm
EX-32.2 - EXHIBIT 32.2 - Nationstar Mortgage Holdings Inc.nsmh06302015exhibit322.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
 
 FORM 10-Q
 
 
 
 
 
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2015
or
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from      to                     
Commission file number: 001-35449
 
 
 
 
 
Nationstar Mortgage Holdings Inc.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
 
45-2156869
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
8950 Cypress Waters Blvd
Coppell, TX
 
75019
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code:
(469) 549-2000
 
 
 
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, "accelerated filer" and "smaller reporting company" in Rule  12(b)-2 of the Exchange Act
Large Accelerated Filer
x
Accelerated Filer
¨
 
 
 
 
Non-Accelerated Filer
¨ (Do not check if a smaller reporting company.)
Smaller reporting company
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x
Number of shares of common stock, $0.01 par value, outstanding as of June 30, 2015: 109,734,001



1


NATIONSTAR MORTGAGE HOLDINGS INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
 
 
 
Page
PART I
FINANCIAL INFORMATION
 
 
 
 
Item 1.
 
 
 
 
Consolidated Balance Sheets – June 30, 2015 (unaudited) and December 31, 2014
 
 
 
 
Unaudited Consolidated Statements of Income and Comprehensive Income - For the three and six months ended June 30, 2015 and 2014
 
 
 
 
Consolidated Statements of Stockholders’ Equity - For the six months ended June 30, 2015 (unaudited) and year ended December 31, 2014
 
 
 
 
Unaudited Consolidated Statements of Cash Flows - For the six months ended June 30, 2015 and 2014
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
Quantitative and Qualitative Disclosure About Market Risks
 
 
 
Item 4.
 
 
 
PART II
OTHER INFORMATION
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 
 
 


2


PART I. Financial Information

Item 1. Consolidated Financial Statements
NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
 
June 30,
2015
 
December 31,
2014
 
(unaudited)
 
 
Assets
 
 
 
Cash and cash equivalents
$
562,939

 
$
299,002

Restricted cash
387,914

 
285,530

Mortgage servicing rights, $3,350,298 and $2,949,739 at fair value, respectively
3,360,322

 
2,961,321

Advances
2,348,114

 
2,546,362

Reverse mortgage interests
7,424,565

 
2,453,069

Mortgage loans held for sale
1,906,010

 
1,277,931

Mortgage loans held for investment, net of allowance for loan losses of $3,549 and $3,531, respectively
182,330

 
191,569

Property and equipment, net of accumulated depreciation of $87,468 and $69,721, respectively
134,155

 
129,611

Derivative financial instruments
108,265

 
91,051

Other assets
906,889

 
877,229

Total assets
$
17,321,503

 
$
11,112,675

Liabilities and stockholders' equity
 
 
 
Unsecured senior notes
$
2,158,392

 
$
2,159,231

Advance facilities
1,826,452

 
1,901,783

Warehouse facilities
2,152,915

 
1,572,622

Payables and accrued liabilities
1,390,207

 
1,322,078

MSR related liabilities - nonrecourse
1,287,140

 
1,080,465

Mortgage servicing liabilities
47,775

 
65,382

Derivative financial instruments
7,859

 
18,525

Other nonrecourse debt
6,693,772

 
1,768,311

Total liabilities
15,564,512

 
9,888,397

Commitments and contingencies

 

Preferred stock at $0.01 par value - 300,000 shares authorized, no shares issued and outstanding

 

Common stock at $0.01 par value - 1,000,000 shares authorized, 108,881 shares and 90,999 shares issued, respectively
1,084

 
910

Additional paid-in-capital
1,097,441

 
587,446

Retained earnings
669,303

 
643,059

Treasury shares; 858 shares and 602 shares at cost, respectively
(18,637
)
 
(12,433
)
Total Nationstar stockholders' equity
1,749,191

 
1,218,982

Noncontrolling interest
7,800

 
5,296

Total equity
1,756,991

 
1,224,278

Total liabilities and equity
$
17,321,503

 
$
11,112,675

See accompanying notes to the unaudited consolidated financial statements.

3




NATIONSTAR MORTGAGE HOLDINGS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(amounts in thousands, except for earnings per share data)

 
For the three months ended June 30,
For the six months ended June 30,
 
2015
 
2014
2015
 
2014
Revenues:
 
 
 
 
 
 
Service related
$
457,723

 
$
376,817

$
672,846

 
$
718,528

Net gain on mortgage loans held for sale
163,886

 
172,916

330,880

 
300,852

Total revenues
621,609

 
549,733

1,003,726

 
1,019,380

Expenses:
 
 
 
 
 
 
Salaries, wages and benefits
198,356

 
154,052

377,112

 
310,647

General and administrative
242,629

 
192,659

447,716

 
357,197

Total expenses
440,985

 
346,711

824,828

 
667,844

Other income (expense):
 
 
 
 
 
 
Interest income
87,155

 
42,941

130,929

 
86,884

Interest expense
(147,863
)
 
(139,422
)
(263,511
)
 
(296,022
)
Gain (loss) on interest rate swaps and caps
95

 
(953
)
(672
)
 
1,868

Total other income (expense)
(60,613
)
 
(97,434
)
(133,254
)
 
(207,270
)
Income before taxes
120,011

 
105,588

45,644

 
144,266

Income tax expense
44,171

 
38,941

16,646

 
53,942

Net income
75,840

 
66,647

28,998

 
90,324

Less: Net gain (loss) attributable to noncontrolling interests
1,281

 
192

2,754

 
(167
)
Net income attributable to Nationstar
74,559

 
66,455

26,244

 
90,491

Other comprehensive income, net of tax:
 
 
 
 
 
 
Change in value of designated cash flow hedge, net of tax of $0 and ($1,183), respectively

 


 
(1,963
)
Comprehensive income
$
74,559

 
$
66,455

$
26,244

 
$
88,528

 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
Basic earnings per share
$
0.69

 
$
0.74

$
0.27

 
$
1.01

Diluted earnings per share
$
0.69

 
$
0.74

$
0.26

 
$
1.01

Weighted average shares:
 
 

 
 
 
       Basic
107,521

 
89,465

98,864

 
89,404

       Dilutive effect of stock awards
368

 
729

548

 
592

       Diluted
107,889

 
90,194

99,412

 
89,996

Dividends declared per share
$

 
$

$

 
$

See accompanying notes to the unaudited consolidated financial statements.

4



NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(amounts in thousands)
 
Common Stock Outstanding
 
Common Stock
 
Additional Paid-in Capital
 
Retained Earnings
 
Treasury shares
 
Accumulated Other Comprehensive Income
 
Total Nationstar Stockholders'
Equity
 
Non-controlling interests
 
Total
Equity
Balance at December 31, 2013
90,330

 
$
906

 
$
566,642

 
$
422,341

 
$
(6,944
)
 
$
1,963

 
$
984,908

 
$
4,990

 
$
989,898

Shares (including forfeitures) issued under incentive plan
1,271

 
4

 
(4
)
 

 

 

 

 

 

Change in the value of cash flow hedge, net of tax of $1,183

 

 

 

 

 
(1,963
)
 
(1,963
)
 

 
(1,963
)
Share-based compensation

 

 
18,565

 

 

 

 
18,565

 

 
18,565

Excess tax benefit from share-based compensation

 

 
2,243

 

 

 

 
2,243

 

 
2,243

Shares acquired by Nationstar related to incentive compensation awards

 

 

 

 
(5,489
)
 

 
(5,489
)
 

 
(5,489
)
Net income

 

 

 
220,718

 

 

 
220,718

 
306

 
221,024

Balance at December 31, 2014
91,601

 
910

 
587,446

 
643,059

 
(12,433
)
 

 
1,218,982

 
5,296

 
1,224,278

(unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares (including forfeitures) issued under incentive plan
633

 

 

 

 

 

 

 

 

Acquisition of non-controlling interest in subsidiaries

 
(1
)
 
1

 

 

 

 

 
(250
)
 
(250
)
Share-based compensation

 

 
11,313

 

 

 

 
11,313

 

 
11,313

Issuance of common stock, net
17,500

 
175

 
497,586

 

 

 

 
497,761

 

 
497,761

Excess tax benefit from share-based compensation

 

 
1,095

 

 

 

 
1,095

 

 
1,095

Withholding tax related to share based settlement of common stock by management

 

 

 

 
(6,204
)
 

 
(6,204
)
 

 
(6,204
)
Net income

 

 

 
26,244

 

 

 
26,244

 
2,754

 
28,998

Balance at June 30, 2015
109,734

 
1,084

 
1,097,441

 
669,303

 
(18,637
)
 

 
1,749,191

 
7,800

 
1,756,991



5


See accompanying notes to the unaudited consolidated financial statements.

6


NATIONSTAR MORTGAGE HOLDINGS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
 
For the six months ended June 30,
 
2015
 
2014
Operating Activities
 
 
 
Net income attributable to Nationstar
$
26,244

 
$
90,491

Reconciliation of net income to net cash attributable to operating activities:
 
 
 
Share-based compensation
11,313

 
6,868

Excess tax benefit from share-based compensation
(1,095
)
 
(2,189
)
Net gain on mortgage loans held for sale
(330,880
)
 
(300,852
)
Mortgage loans originated and purchased, net of fees
(9,883,868
)
 
(11,470,908
)
Proceeds on sale of and payments of mortgage loans held for sale and held for investment
9,429,885

 
12,089,338

Gain (loss) on interest rate swaps and caps

672

 
(1,868
)
Cash settlement on derivative financial instruments

 
1,352

Depreciation and amortization
26,627

 
20,401

Amortization (accretion) of premiums/discounts
(5,190
)
 
13,037

Fair value changes in excess spread financing
38,951

 
23,767

Fair value changes and amortization/accretion of mortgage servicing rights
183,042

 
123,573

Fair value change in mortgage servicing rights financing liability
9,640

 
(49,257
)
Changes in assets and liabilities:
 
 
 
Advances
217,638

 
769,754

Reverse mortgage interests
(124,449
)
 
(413,478
)
Other assets
65,637

 
223,116

Payables and accrued liabilities
38,697

 
(260,566
)
Net cash attributable to operating activities
(297,136
)
 
862,579

 
 
 
 
Investing Activities
 
 
 
Property and equipment additions, net of disposals
(27,051
)
 
(23,678
)
Purchase of forward mortgage servicing rights, net of liabilities incurred
(500,041
)
 
(187,803
)
Purchase of reverse mortgage interests, net of participations sold
(4,815,684
)
 

Proceeds on sale of servicer advances

 
512,527

Acquisitions, net
(45,276
)
 
(18,000
)
Net cash attributable to investing activities
(5,388,052
)
 
283,046

Continued on following page.

7



NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
(amounts in thousands)
 
For the six months ended June 30,
 
2015
 
2014
Financing Activities
 
 
 
Transfers (to) / from restricted cash, net
(102,384
)
 
241,423

Issuance of common stock, net of issuance costs
497,761

 

Debt financing costs
(10,639
)
 
(9,153
)
Increase (decrease) in warehouse facilities
580,293

 
(1,380,793
)
Increase (decrease) in advance facilities
(75,331
)
 
(76,148
)
Proceeds from HECM securitizations
342,403

 

Repayment of HECM securitizations
(63,013
)
 

Issuance of excess spread financing
258,196

 
111,118

Repayment of excess spread financing
(100,228
)
 
(85,257
)
Increase in participating interest financing in reverse mortgage interests
4,633,093

 
192,355

Proceeds from mortgage servicing rights financing

 
52,835

Repayment of nonrecourse debt – Legacy assets
(5,917
)
 
(7,414
)
Excess tax benefit from share-based compensation
1,095

 
2,189

Surrender of shares relating to stock vesting
(6,204
)
 
(4,755
)
Net cash attributable to financing activities
5,949,125

 
(963,600
)
Net increase (decrease) in cash and cash equivalents
263,937

 
182,025

Cash and cash equivalents at beginning of period
299,002

 
441,902

Cash and cash equivalents at end of period
$
562,939

 
$
623,927

 
 
 
 
Supplemental disclosures of cash activities
 
 
 
Cash paid for interest expense
$
262,954

 
$
256,655

Net cash (received)/paid for income taxes
9,734

 
(25,540
)
Supplemental disclosures of non-cash activities
 
 
 
Transfer of mortgage loans held for investment to REO at fair value
$
1,465

 
$
2,125

Mortgage servicing rights resulting from sale or securitization of mortgage loans
105,506

 
120,212

Payable to seller of forward mortgage servicing rights
13,492

 
25,060

See accompanying notes to the unaudited consolidated financial statements. 

8

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)


1. Nature of Business and Basis of Presentation
Nature of Business
Nationstar Mortgage Holdings Inc., a Delaware corporation, including its consolidated subsidiaries (collectively, Nationstar or the Company), earns fees through the delivery of servicing, origination and transaction based services related principally to single-family residences throughout the United States.
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. Nationstar applies the equity method of accounting to investments when the entity is not a VIE and Nationstar is able to exercise significant influence, but not control, over the policies and procedures of the entity but owns less than 50% of the voting interests. 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, 2015. 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

In 2015, Nationstar adopted ASU 2014-14. As a result of this adoption, the Company reclassified $22.3 million and $36.0 million of Real Estate Owned to Receivables from trusts, agencies and prior servicers, net, as of June 30, 2015 and December 31, 2014, respectively, both of which are a component of Other Assets on the consolidated balance sheet. Additionally, the Company reclassified $69.4 million of real estate owned (previously recorded as a component of other assets) to reverse mortgage interest as of December 31, 2014, on its consolidated balance sheet. Consequently, the presentation is consistent for all periods presented.

Accounting Standards Update 2015-02: Consolidation (Topic 810) - Amendments to the Consolidation Analysis (ASU 2015-02) changes the analysis that a reporting entity must perform when deciding to consolidate a legal entity. This amendment changes the evaluation of whether limited partnerships are variable interest entities or voting interest entities and eliminates the presumption that a general partner should consolidate a limited partnership. This amendment also changes the analysis for entities that are involved with variable interest entities and provides an exception for companies with interests in entities that are required to comply with requirements of the Investment Company Act of 1940 for registered money market funds. The amendment is effective for fiscal years and interim periods beginning after December 15, 2015. The Company is currently evaluating the impact of adopting ASU 2015-02.
Accounting Standards Update 2015-03: Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03) requires that debt issuance costs be included in the carrying value of the related debt liability, when recognized, on the face of the balance sheet. This amendment is effective for fiscal years beginning after December 15, 2015. The Company is currently evaluating the impact of adopting ASU 2015-03.
Accounting Standards Update 2015-05 - Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (ASU 2015-05) was created to eliminate diversity in the reporting of fees paid by a customer in a cloud computing arrangement caused by lack of guidance. This update provides that if a cloud computing arrangement includes a software license, the license element should be accounted for as other acquired software licenses.

9

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

If the cloud computing arrangement does not include a software license then the fees should be accounted for as a service contract. This amendment is effective for annual periods beginning after December 15, 2015. The Company is currently evaluating the impact of adopting ASU 2015-05.
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 consistency in the disclosures made by an entity when there is doubt that the entity will continue as a going concern. 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.

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. 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 2015-01: Income Statement - Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items (ASU 2015-01) eliminates the concept of extraordinary items from GAAP. ASU 2015-01 is effective for fiscal years beginning after December 15, 2015. The adoption of
ASU 2015-01 is not expected to have a material impact on our financial condition, liquidity or results of operations.

Effective January 1, 2015, the Company adopted Accounting Standards Update No. 2014-14, Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40), Classification of Certain Government-Guaranteed Loans Upon Foreclosure (ASU 2014-14). This update requires that foreclosed mortgage loans guaranteed by the government be derecognized and a separate other receivable recognized if certain conditions are met. Upon adoption of this ASU, foreclosed loans backed by government guarantees that were previously recorded as a component of Real Estate Owned in Other Assets were reclassified to Reverse Mortgage Interests on the Company's consolidated balance sheet. Consistent with the Company's adoption of ASU 2014-14, prior year amounts were reclassified to be in conformity with the current year presentation. The adoption of ASU 2014-14 did not have an impact to the Company's net income.

Effective January 1, 2015, the Company adopted Accounting Standards Update No. 2014-04, Receivables — Troubled Debt Restructurings by Creditors (Subtopic 310-40), Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure (ASU 2014-04). This update requires disclosure of consumer mortgage loans collateralized by residential real estate for which formal foreclosure proceedings are in process. Consistent with the Company's adoption of ASU 2014-04, the Company made the required disclosure for the current and prior year in the Mortgage Loans Held for Sale and Investment footnote. The adoption of ASU 2014-04 did not have an impact to the Company's net income.



10

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

2. Mortgage Servicing Rights and Related Liabilities
MSRs and Related Liabilities
June 30, 2015
 
December 31, 2014
MSRs - Fair Value
$
3,350,298

 
$
2,949,739

MSRs - LOCOM
10,024

 
11,582

Mortgage Servicing Rights
3,360,322

 
2,961,321

 
 
 
 
Mortgage Servicing Liabilities
47,775

 
65,382

 
 
 
 
Excess spread financing - fair value
1,228,070

 
1,031,035

Mortgage servicing rights financing liability - fair value
59,070

 
49,430

MSR Related Liabilities (nonrecourse)
$
1,287,140

 
$
1,080,465


Mortgage Servicing Rights - Fair Value
MSRs - Fair Value consists of rights the Company owns and records as assets to service traditional residential mortgage loans for others either as a result of a purchase transaction or from the sale and securitization of loans originated. MSRs - Fair Value comprise both agency and non-Agency loans. The Company segregates MSRs - Fair Value between credit sensitive and interest sensitive pools. Interest sensitive pools are primarily impacted by changes in forecasted interest rates, which in turn impact voluntary prepayment speeds. Credit sensitive pools are primarily impacted by borrower performance under specified repayment terms, which most directly impacts involuntary prepayments and delinquency rates.
The Company assesses whether acquired portfolios are more credit sensitive or interest sensitive in nature on the date of acquisition. The Company considers numerous factors in making this assessment, including loan-to-value ratios, FICO scores, percentage of portfolio previously modified, portfolio seasoning and similar criteria. Once the determination for a pool is made, it is not changed over time.

Interest sensitive portfolios consist of lower delinquency single-family conforming residential forward mortgage agency loans. Credit sensitive portfolios primarily consist of higher delinquency single-family non-conforming residential forward mortgage loans serviced both for agency and non-Agency investors.

The following table provides a breakdown of the total credit and interest sensitive UPBs for Nationstar's owned MSRs.
 
June 30, 2015
 
December 31, 2014

UPB
 
Fair Value
 
UPB
 
Fair Value
Credit Sensitive
$
247,720,305

 
$
2,171,954

 
241,769,601

 
1,919,290

Interest Sensitive
105,686,989

 
1,178,344

 
91,843,044

 
1,030,449

 
$
353,407,294

 
$
3,350,298

 
$
333,612,645

 
$
2,949,739


The activity of MSRs carried at fair value is as follows for the dates indicated:

11

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

 
For the six months ended June 30,
 
2015
 
2014
Fair value at the beginning of the period
2,949,739

 
2,488,283

Additions:
 
 
 
Servicing resulting from transfers of financial assets
105,506

 
120,212

Purchases of servicing assets
494,145

 
193,677

Changes in fair value:
 
 
 
Due to changes in valuation inputs or assumptions used in the valuation model
18,347

 
24,821

Other changes in fair value
(217,439
)
 
(148,859
)
Fair value at the end of the period
$
3,350,298

 
$
2,678,134

In the fourth quarter of 2014, the Company revised its approach in calculating Other Changes in Fair Value in the above rollforward. Under the revised approach, Nationstar began incorporating scheduled principal payments, which were previously included as a component in the Due to changes in valuation inputs or assumptions line, as a component in Other changes in fair value. Nationstar has reclassified the amounts presented in the June 30, 2014 rollforward to conform to the current presentation. There was no impact to net income or to the total changes in fair value in the prior period as a result of the reclassified amounts.
Nationstar used the following weighted average assumptions in estimating the fair value of MSRs for the dates indicated:
Credit Sensitive
June 30, 2015
 
December 31, 2014
Discount rate
11.66
%
 
11.96
%
Total prepayment speeds
17.05
%
 
18.58
%
Expected weighted-average life
5.91 years

 
5.39 years

Interest Sensitive
June 30, 2015
 
December 31, 2014
Discount rate
9.10
%
 
9.09
%
Total prepayment speeds
11.68
%
 
11.27
%
Expected weighted-average life
6.38 years

 
6.49 years


The following table shows the hypothetical effect on the fair value of the MSRs using certain unfavorable variations of the expected levels of key assumptions used in valuing these assets at June 30, 2015 and December 31, 2014:

 
Discount Rate
 
Total Prepayment
Speeds
 
100 bps
Adverse
Change
 
200 bps
Adverse
Change
 
10%
Adverse
Change
 
20%
Adverse
Change
June 30, 2015
 
 
 
 
 
 
 
 Mortgage servicing rights
$
(135,060
)
 
$
(247,779
)
 
$
(130,260
)
 
$
(249,466
)
December 31, 2014
 
 
 
 
 
 
 
 Mortgage servicing rights
$
(110,900
)
 
$
(207,295
)
 
$
(112,603
)
 
$
(199,078
)

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, which could impact the above hypothetical effects.

MSRs - LOCOM
Nationstar owns the right to service certain reverse mortgages with an unpaid principal balance of $31.8 billion and $28.0 billion as of June 30, 2015 and December 31, 2014, respectively. Nationstar carries these mortgage servicing rights at the lower of cost or market and performs an impairment analysis at the end of each reporting period. In determining fair value for the purpose of impairment, Nationstar utilizes a variety of assumptions, with the primary assumptions including discount rates, prepayment

12

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

speeds, home price index, collateral values and the expected weighted average life. At June 30, 2015 and December 31, 2014, no impairment was identified. Interest and servicing fees collected on reverse mortgage interests are included as a component of either interest income or service related revenues based on whether Nationstar acquired the related borrower draws from a predecessor servicer or funded borrower draws under its obligation to service the related Home Equity Conversion Mortgages (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 six months ended June 30,
 
2015
 
2014
 
Assets
 
Liabilities
 
Assets
 
Liabilities
Activity of MSRs at amortized cost
 
 
 
 
 
 
 
Balance at the beginning of the period
$
11,582

 
$
65,382

 
$
14,879

 
$
82,521

Additions:
 
 
 
 
 
 
 
Purchase /Assumptions of servicing rights/obligations

 

 

 

Deductions:
 
 
 
 
 
 
 
Amortization/Accretion
(1,558
)
 
(17,607
)
 
(1,564
)
 
(2,029
)
Balance at end of the period
$
10,024

 
$
47,775

 
$
13,315

 
$
80,492

Fair value at end of period
$
31,636

 
$
39,042

 
$
36,997

 
$
62,680


For the six month periods ended June 30, 2015 and 2014, the Company accreted $17.6 million and $2.0 million, respectively, of the mortgage servicing liability as a result of increased HECM loan repurchase activity. Issuers of HECMs are responsible for repurchasing any loans out of the HMBS pool when the outstanding principal balance of the related HECM loan is equal to or greater than 98% of the lesser of the appraised value of the underlying property at origination or $625 thousand.

Excess Spread Financing 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 Investment Group LLC (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.

Servicing fees associated with a traditional MSR can be segregated into a base servicing fee and an excess servicing fee. The base servicing fee, along with ancillary income, is meant to cover costs incurred to service the specified pool plus a reasonable profit margin. The remaining servicing fee is considered excess.
Nationstar retains all the base servicing fee and ancillary revenues associated with servicing the Portfolios and the retained portion of the excess 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 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 sale and assignment agreement described above.

13

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)


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
June 30, 2015
 
 
 
 
 
 
 
Low
7.2%
 
3.9 years
 
8.5%
 
6.8%
High
17.3%
 
8.6 years
 
14.2%
 
30.3%
December 31, 2014
 
 
 
 
 
 
 
Low
6.2%
 
4.0 years
 
8.5%
 
6.7%
High
19.4%
 
7.1 years
 
14.2%
 
31.3%

The following table shows the hypothetical effect on the fair value of excess spread financing using certain unfavorable variations of the expected levels of key assumptions used in valuing these liabilities at the dates indicated:
 
Discount Rate
 
Total Prepayment
Speeds
 
100 bps
Adverse
Change
200 bps
Adverse
Change
 
10%
Adverse
Change
20%
Adverse
Change
June 30, 2015
 
 
 
 
 
Excess spread financing
$
40,932

$
86,191

 
$
33,607

$
71,308

December 31, 2014
 
 
 
 
 
Excess spread financing
$
36,632

$
75,964

 
$
33,618

$
70,379


As the cash flow assumptions utilized in determining the fair value amounts in the excess spread financing are based on the related cash flow assumptions utilized in the financed MSRs, any fair value changes recognized in the MSRs would inherently have an inverse impact on the carrying amount in the related excess spread financing. For example, while an increase in discount rates would negatively impact the value of the Company's MSRs, it would reduce the carrying value of the associated excess spread financing liability.

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, 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.

Mortgage Servicing Rights Financing
From December 2013 through June 2014, Nationstar entered into agreements to sell a contractually specified base fee component of certain MSRs and servicer advances under specified terms to New Residential and certain unaffiliated third-parties. 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 18, Disclosures Related to Transactions with Affiliates of Fortress Investment Group LLC for additional information.

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 related revenue in the consolidated statements of income and comprehensive income. The weighted average assumptions used in Nationstar's valuation of Mortgage Servicing Rights Financing were as follows:
 
June 30, 2015
 
December 31, 2014
Advance financing rates
2.79
%
 
2.79
%
Annual advance recovery rates
24.67
%
 
27.55
%

14

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)


3. Advances
 
June 30, 2015
 
December 31, 2014
 


 


Advances
$
2,348,114

 
$
2,546,362


Servicing advances on non-Agency securities are typically recovered first at a loan-level from proceeds of the mortgage loans for which the advance was made, and then if loan-level funds are determined to be ultimately insufficient, from cash collected from all borrowers in a securitization trust. For advances on agency securities, servicing advances represent a receivable from the respective agency and are recovered from cash collections in a securitization trust and/or a requested reimbursement from the agency.
Nationstar accretes purchase discounts into interest income as the related servicer advances are recovered. During the three and six month period ended June 30, 2015, the Company accreted $0.0 million and $0.3 million, respectively, of the purchase discounts from recovered servicer advances. During the three and six month periods ended June 30, 2014, the Company accreted $3.4 million and $8.4 million respectively, of the purchase discounts from recovered servicer advanced into interest income.
 
As of June 30, 2015 and December 31, 2014, Nationstar carried an allowance for uncollectible servicer advances of $13.9 million and $9.2 million, respectively. Advances balances are reflected net of these reserves.
   
4. Reverse mortgage interests


 
June 30, 2015
 
December 31, 2014
Participating interests
$
6,015,287

 
$
1,363,225

Other interests securitized
548,276

 
341,268

Unsecuritized interests
874,388

 
752,801

Allowance for losses - reverse mortgage interests
(13,386
)
 
(4,225
)
Total reverse mortgage interests
$
7,424,565

 
$
2,453,069



Participating interests consists of Nationstar HECM loans and related advances that have been securitized through the issuance of Home Equity Conversion Mortgage Backed Securities (HMBS) guaranteed by Ginnie Mae to third party security holders. In May, 2015, the Company paid $192 million funded from cash on hand to Generation Mortgage and received reverse mortgage net assets valued at $233 million, comprised of $4.9 billion of UPB assets and $4.6 billion of assumed liabilities.

Other interests securitized consists of reverse mortgage interests which have been transferred to private securitization trusts and are subject to nonrecourse debt. Nationstar evaluated these trusts and concluded that they meet the definition of a VIE and Nationstar is the primary beneficiary. Accordingly, these transactions are treated as secured borrowings and both the reverse mortgage interests and the related indebtedness are retained on Nationstar’s balance sheet. See Note 8, Indebtedness and Note 10, Securitizations and Financing.

In December 2014, Nationstar Mortgage LLC completed the securitization of approximately $343.6 million in Nationstar HECM Loan Trust 2014-1Mortgage Backed Securities. The notes were issued under two separate classes, comprised of Class A Notes and Class M Notes. As part of the securitization, Nationstar retained a portion of the offered Class A notes of approximately $70.4 million as well as the Class M Notes with an outstanding note balance of $36.2 million. A portion of the notes retained by Nationstar represent subordinated beneficial interests. In the first quarter 2015, the Company sold the remaining retained portions of the Class A and the Class M notes for total proceeds of $73.1 million.



15

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

In the second quarter of 2015, the company issued $269.4 million of notes through a private mortgage-backed securities issuance; secured with non-performing HECM loans and REO properties acquired from a Ginnie Mae sponsored HECM mortgage-backed security. The notes have a final maturity date of May 2018. This transaction was accounted for as a secured borrowing, the related financial assets will continue to be recorded at lower of cost or market with a corresponding liability to other non-recourse debt. No portion of the notes were retained by the Company as of June 30, 2015.

Unsecuritized interests consist primarily of (1) recently funded borrower draws; (2) Ginnie Mae HECMs that have been repurchased out of a Ginnie Mae HECM securitization that have reached 98% or more of the maximum claim amount; (3) repurchased Ginnie Mae HECM interests that have been assigned to the FHA for reimbursement; (4) foreclosed assets; (5) advances made on inactive loans that cannot be securitized due to the delinquency status; and (6) accounts receivable related to FHA claims. Under the Ginnie Mae HMBS program, the Company is required to repurchase a HECM loan from the HMBS pool when the outstanding principal balance of the HECM loan is equal to or greater than 98% of the maximum claim amount. Nationstar routinely securitizes eligible reverse mortgage interests. As stated above, these transactions are treated as secured borrowings with both the reverse mortgage interests and related indebtedness retained on Nationstar’s balance sheet.
  
Nationstar evaluates its reverse mortgage interests on a periodic basis. As of the three and six month periods ended June 30, 2015, no impairment was recorded.


5. Mortgage Loans Held for Sale and Investment
Mortgage loans held for sale
Nationstar maintains a strategy of originating mortgage loan products primarily for the purpose of selling to government-sponsored enterprises (GSEs) or other third-party investors, primarily Ginnie Mae, in the secondary market. Nationstar primarily focuses on assisting customers currently in the Company's servicing portfolio with refinances of loans or new home purchases (referred to as recapture). Generally, all newly originated mortgage loans held for sale are delivered to third-party purchasers or securitized shortly after origination on a servicing-retained basis.

Mortgage loans held for sale consist of the following for the dates indicated:
 
 
June 30, 2015
 
December 31, 2014
Mortgage loans held for sale – unpaid principal balance
$
1,854,736

 
$
1,218,596

Mark-to-market adjustment(1)
51,274

 
59,335

Total mortgage loans held for sale
$
1,906,010

 
$
1,277,931

(1) The mark-to-market adjustment is reflected in net gain on mortgage loans held for sale on our consolidated statements of income and comprehensive income.

The total UPB of mortgage loans held for sale on nonaccrual status was as follows for the dates indicated:
 
June 30, 2015
 
December 31, 2014
Mortgage loans held for sale - unpaid principal balance

UPB
 
Fair Value
 
UPB
 
Fair Value
Nonaccrual
$
27,381

 
$
24,812

 
$
31,968

 
$
26,022

The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was as follows for the dates indicated:
Mortgage loans held for sale - unpaid principal balance
June 30, 2015
 
December 31, 2014
Foreclosure
$
15,706

 
$
17,493

A reconciliation of the changes in mortgage loans held for sale for the dates indicated is presented in the following table:

16

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

 
 
For the six months ended
 
June 30, 2015
 
June 30, 2014
Mortgage loans held for sale – beginning balance
$
1,277,931

 
$
2,603,380

Mortgage loans originated and purchased, net of fees
9,854,949

 
11,470,908

Proceeds on sale of and payments of mortgage loans held for sale
(9,420,331
)
 
(12,089,338
)
Gain on Sale of Mortgage Loans(1)
196,727

 
241,971

Transfer of mortgage loans held for sale to held for investment or other assets
(3,266
)
 
(2,100
)
Mortgage loans held for sale – ending balance
$
1,906,010

 
$
2,224,821


(1) The gain on sale of mortgage loans is reflected in net gain on mortgage loans held for sale on our consolidated statements of income and comprehensive income.

Included in Mortgage loans originated and purchased, net of fees are loans repurchased out of Ginnie Mae pools where we are the named servicer. As named servicer, Nationstar 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 six months ended June 30, 2015 and June 30, 2014, Nationstar repurchased loans from Ginnie Mae securitization pools $0.9 billion and $2.3 billion of mortgage loans, respectively.
Mortgage loans held for investment, net
Mortgage loans held for investment, net as of the dates indicated include: 
 
 
June 30, 2015
 
December 31, 2014
Mortgage loans held for investment, net – unpaid principal balance
 
$
263,581

 
$
276,820

Transfer discount:
 
 
 

Accretable
 
(13,825
)
 
(15,503
)
Non-accretable
 
(63,877
)
 
(66,217
)
Allowance for loan losses
 
(3,549
)
 
(3,531
)
Total mortgage loans held for investment, net
 
$
182,330

 
$
191,569


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

 
For the six months ended June 30, 2015
 
For the year ended December 31, 2014
Accretable Yield
 
 
 
Balance at the beginning of the period
$
15,503

 
$
17,362

Accretion
(1,406
)
 
(2,955
)
Reclassifications from (to) nonaccretable discount
(272
)
 
1,096

Balance at the end of the period
$
13,825

 
$
15,503

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 $0.3 million of transfer discount to non-accretable yield for the six months ended June 30, and $1.1 million for the year ended December 31, 2014. Furthermore, Nationstar considers the decrease in principal, interest, and other cash flows expected to be collected arising from the transferred loans as an impairment.


17

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

Loan delinquency 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 loan delinquency status. LTV refers to the ratio of the loan’s unpaid principal balance to the property’s collateral value. Loan delinquencies and unpaid principal balances are updated monthly based upon collection activity. Collateral values are updated from third party providers on a periodic basis. The collateral values used to derive LTV’s are obtained at various dates, but the majority were within the last twenty-four months. For an event requiring a decision based at least in part on the collateral value, the Company takes its last known value provided by a third party and then adjusts the value based on the applicable home price index.The total UPB of mortgage loans held for investment for which the Company has begun formal foreclosure proceedings was as follows for the dates indicated:
Mortgage loans held for investment - unpaid principal balance
June 30, 2015
 
December 31, 2014
Foreclosure
$
47,688

 
$
52,769



 

6. Other Assets
Other assets consisted of the following:
 
 
June 30, 2015
 
December 31, 2014
Receivables from trusts, agencies and prior servicers, net
$
389,583

 
$
386,166

Accrued revenues
161,110

 
154,436

Loans subject to repurchase right from Ginnie Mae
133,928

 
131,592

Goodwill
68,479

 
54,701

Deferred financing costs
49,344

 
46,986

Intangible assets
46,633

 
19,622

Prepaid expenses
12,559

 
9,837

Accrued interest
1,644

 
1,890

Real estate owned (REO), net
1,713

 
1,625

Other
41,896

 
70,374

Total other assets
$
906,889

 
$
877,229

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 $133.9 million at June 30, 2015 and $131.6 million at December 31, 2014.

Acquisitions
In January 2015, Xome Holdings LLC (previously known as Solutionstar Holdings LLC hereafter referred to a XomeSM), a wholly owned subsidiary of Nationstar, acquired Experience 1, Inc., the holding company for Title365, Trusted Signing, and technology subsidiaries X1 Labs and X1 Analytics (collectively, Title365), a technology services provider for title insurance and escrow services. The total consideration transferred for the acquisition was $36.0 million in cash. Related to the acquisition, the Company recorded an additional $16.8 million related to goodwill and $14.2 million in intangible assets. The recognized intangible assets primarily relate to customer relationships, trade names and technology.

In May 2015, XomeSM acquired Quantarium, LLC, a real estate analytics company that has developed industry-leading automated home valuation models utilizing advanced statistical methods and complex proprietary algorithms. In June 2015, Xome acquired substantially all of the assets of GoPaperless Solutions, a leader in digital signature and document management Software-as-a-

18

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

Service solutions. GoPaperless will be integrated into the Xome.com platform during the third quarter. Related to the acquisitions, the company tentatively recorded an additional $4 million related to goodwill and $10 million in intangible assets pending a final valuation.



7. Derivative Financial Instruments

Derivatives instruments utilized by Nationstar primarily include interest rate lock commitments (IRLCs), Loan Purchase Commitments (LPCs), Forward MBS trades, Eurodollar futures and interest rate swap agreements.

Nationstar enters into IRLCs with prospective borrowers. These commitments are carried at fair value, with any changes in fair value recorded in earnings as a component of net gain on mortgage loans held for sale. 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.

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 net 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 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 net gain on mortgage loans held for sale.

In addition, Nationstar enters into Eurodollar futures contracts to replicate the economic hedging results achieved with interest rate swaps or offset the changes in value of its forward sales of certain agency securities. The Company has not designated its futures contracts as hedges for accounting purposes. As a result, realized and unrealized changes in fair value are recognized in net gain on mortgage loans held for sale in the period in which the changes occur.

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 (loss) and comprehensive income (loss). Unrealized losses on designated interest rate derivatives are separately disclosed under operating activities in the consolidated statements of cash flows.

Historically, Nationstar has entered into interest rate swap agreements to hedge the interest payments associated with its outstanding floating rate financing servicer advance facilities. Prior to March 31, 2014, certain of these derivatives were designated as cash flow hedges and were recorded at fair value on Nationstar's balance sheet, with any change in fair value being recorded as an adjustment to other comprehensive income. On March 31, 2014, the Company designated the remainder of the interest rate swap agreements, with any further changes in fair value being recorded as a charge to gain or loss in interest rate swaps and caps in Nationstar's consolidated statements of income (loss) and comprehensive income (loss).

Associated with the Company's forward MBS trades are $13.9 million and $9.8 million in collateral deposits on derivative instruments recorded in payables and accrued liabilities and other assets, respectively, on the Company's balance sheets as of June 30, 2015 and December 31, 2014, 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.

During the six months ended June 30, 2015, Nationstar entered into two interest rate caps with notional values of $800 million and $400 million, respectively, to mitigate interest rate risk. The interest rate caps expire during 2016.

19

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

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 six months ended June 30, 2015
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
MORTGAGE LOANS HELD FOR SALE
 
 
 
 
 
 
 
Loan sale commitments
2015
 
$
1,000

 
$
37

 
$
41

DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2015
 
2,998,234

 
81,205

 
(6,660
)
Forward MBS trades
2015
 
3,138,409

 
22,864

 
22,580

LPCs
2015
 
313,444

 
4,196

 
2,197

Interest rate and caps
2015-2016
 
1,200,000

 

 

LIABILITIES
 
 
 
 
 
 
 
DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2015
 
43,129

 
206

 
(199
)
       Forward MBS trades
2015
 
1,386,757

 
3,691

 
14,669

LPCs
2015
 
559,260

 
3,787

 
(3,739
)
Interest rate swaps and caps
2017
 
29,958

 
57

 
(672
)
Eurodollar futures
2015-2017
 
120,000

 
118

 
(111
)
 
 
 
 
 
 
 
 
For the year ended December 31, 2014
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
 
MORTGAGE LOANS HELD FOR SALE
 
 
 
 
 
 
 
Loan sale commitments
2015
 
$
1,666

 
$
(4
)
 
$
(11
)
DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2015
 
2,556,169

 
87,902

 
774

Forward MBS trades
2015
 
319,112

 
284

 
(31,982
)
LPCs
2015
 
287,089

 
1,999

 
1,206

Interest rate swaps and caps
2017
 
124,650

 
865

 
(1,673
)
Eurodollar futures
2015-2017
 
40,000

 
1

 
1

LIABILITIES
 
 
 
 
 
 
 
DERIVATIVE FINANCIAL INSTRUMENTS
 
 
 
 
 
 
 
IRLCs
2015
 
865

 
7

 
2,691

Interest rate swaps on ABS debt
2015-2017
 
105,681

 
103

 
731

Forward MBS trades
2015
 
2,958,700

 
18,360

 
(15,055
)
LPCs
2015
 
30,494

 
48

 
1,641

Eurodollar futures
2015-2017
 
80,000

 
7

 
(7
)

20

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

8. Indebtedness
Notes Payable
 
 
 
 
 
 
 
 
 
June 30, 2015
 
December 31, 2014
 
Interest Rate
 
Maturity Date
 
Collateral
 
Capacity Amount
 
Outstanding
 
Collateral Pledged
 
Outstanding
 
Collateral pledged
Advance Facilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MBS advance financing facility
LIBOR+2.50% to 4.00%
 
March 2016
 
Servicing advance receivables
 
$
130,000

 
$
63,770

 
$
69,505

 
$
363,014

 
$
418,126

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

 
35,058

 
55,603

 
34,613

 
55,603

Nationstar agency advance financing facility (1)
LIBOR+1.20% to 3.75%
 
October 2015
 
Servicing advance receivables
 
1,300,000

 
1,061,500

 
1,195,152

 
805,706

 
885,115

MBS advance financing facility (2012)
LIBOR+5.00%
 
April 2016
 
Servicing advance receivables
 
50,000

 
45,510

 
54,441

 
42,472

 
50,758

Nationstar Mortgage Advance Receivable
Trust
LIBOR+1.15% to 5.30%
 
June 2018
 
Servicing advance receivables
 
500,000

 
411,563

 
475,978

 
419,170

 
471,243

MBS servicer advance facility (2014)
LIBOR+3.50%
 
September 2015
 
Servicing advance receivables
 
100,000

 
99,820

 
166,954

 
79,084

 
138,010

Nationstar servicer advance receivables trust 2014 - BC
LIBOR+1.50% to 3.00%
 
November 2015
 
Servicing advance receivables
 
200,000

 
109,231

 
120,719

 
106,115

 
121,030

Securities repurchase facility (2014)
LIBOR+1.50% to 2.00%
 
November 2017
 
Securities
 

 

 

 
51,609

 
74,525

 
 
$
1,826,452


$
2,138,352

 
$
1,901,783

 
$
2,214,410

 
 
 
June 30, 2015
 
December 31, 2014
 
Interest Rate
 
Maturity Date
 
Collateral
 
Capacity Amount
 
Outstanding
 
Collateral Pledged
 
Outstanding
 
Collateral pledged
Warehouse Facilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$1.3 billion warehouse facility
LIBOR+2.00% to 2.875%
 
October 2015
 
Mortgage loans or MBS
 
$
1,300,000

 
$
710,840

 
$
757,426

 
$
663,167

 
$
697,257

$1.0 billion warehouse facility
LIBOR+1.75% to 3.25%
 
June 2016
 
Mortgage loans or MBS
 
1,000,000

 
619,540

 
675,637

 
307,294

 
320,285

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

 
299,800

 
307,209

 
176,194

 
179,994

$500 million warehouse facility
LIBOR+ 1.50% to 2.00%
 
July 2015
 
Mortgage loans or MBS
 
500,000

 
292,608

 
310,047

 
183,290

 
192,990

$350 million warehouse facility
LIBOR+2.20% to 4.50%
 
March 2016
 
Mortgage loans or MBS
 
350,000

 
115,443

 
124,151

 
210,049

 
223,849

$200 million warehouse facility
LIBOR+1.50%
 
April 2016
 
Mortgage loans or MBS
 
200,000

 
40,029

 
42,560

 

 

$75 million warehouse facility (HCM) (2)
LIBOR+ 2.25% to 2.875%
 
October 2015
 
Mortgage loans or MBS
 
75,000

 
49,337

 
51,944

 
23,949

 
29,324

$50 million warehouse facility (HCM)
LIBOR + 2.50% to 2.75%
 
November 2015
 
Mortgage loans or MBS
 
50,000

 
25,318

 
26,381

 
8,679

 
9,044

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

 

 

 

 

 
 
 

 
 
 
 
 
$
2,152,915

 
$
2,295,355

 
$
1,572,622

 
$
1,652,743

 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
Mortgage loans
 
 
 
 
 
 
 
 
$
1,735,473

 
$
1,842,445

 
$
1,196,956

 
$
1,241.043

Reverse mortgage interests
 
 
 
 
 
 
 
 
$
417,442

 
$
452,910

 
$
375,666

 
$
411,700


(1) This facility has both variable funding notes (VFN) and term notes. Nationstar issued $300.0 million in term notes to institutional investors of which $100.0 million remains outstanding. The notes have a weighted average interest rate of 2.20% and a weighted average term of 5 years.

21

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

(2) This facility is a sublimit of the $1.3 billion facility specific to Home Community Mortgage (HCM).
Unsecured Senior Notes
A summary of the balances of Unsecured Senior Notes is presented below:
 
June 30, 2015
 
December 31, 2014
$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
378,153

 
378,555

$400 million face value, 7.875% interest rate payable semi-annually, due October 2020
400,495

 
400,541

$600 million face value, 6.500% interest rate payable semi-annually, due July 2021
604,745

 
605,135

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

 
300,000

Total
$
2,158,392

 
$
2,159,231


The indentures for the Unsecured Senior Notes contain various covenants and restrictions that limit Nationstar's ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all of its 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 Unsecured 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 June 30, 2015, the expected maturities of Nationstar's Unsecured Senior Notes based on contractual maturities are as follows:
Year
Amount
2015
$

2016

2017

2018
475,000

2019
375,000

Thereafter
1,300,000

Total
$
2,150,000



22

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

Other Nonrecourse Debt
A summary of the balances of other nonrecourse debt is presented below:
 
June 30, 2015
 
December 31, 2014
Participating interest financing
$
6,084,064

 
$
1,433,145

2014-1 HECM securitization
275,138

 
259,328

2015-1 HECM securitization
263,901

 

Nonrecourse debt - Legacy Assets
70,669

 
75,838

Total
$
6,693,772

 
$
1,768,311


Participating Interest Financing

Participating interest financing represents the issuance of pools of HMBS to third-party security holders which are guaranteed by certain GSEs. Nationstar has accounted for the securitization of these advances in the related 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 through securitization of advances on the HECM loans. The increase in participating interest financing and related reverse mortgage interests for the period ending June 30, 2015 is due to the acquisition from Generations mortgage. The interest rate is based on the underlying HMBS rate with a range of 0.14% to 6.98%. The participating interest financing was $6.1 billion and $1.4 billion at June 30, 2015 and December 31, 2014, respectively.

HECM Securitizations

From time to time, Nationstar securitizes its interests in reverse mortgages. The transactions provide investors with the ability to invest in a pool of non-performing home equity conversion reverse mortgage loans that are covered by Federal Housing Administration (FHA) insurance and secured by one to four-family residential properties and a pool of REO properties acquired through foreclosure or grant of a deed in lieu of foreclosure in connection with reverse mortgage loans that are covered by FHA insurance. The transaction provides Nationstar with access to liquidity for the acquired non-performing HECM loan portfolio, ongoing servicing fees, and potential residual returns. The transactions are structured as secured borrowings with the reverse mortgage loans included in the consolidated financial statements as Reverse Mortgage Interests and the related financing included in other nonrecourse debt. The nonrecourse debt totaled $539.0 million and $259.3 million at June 30, 2015 and December 31, 2014, respectively.

In December 2014, Nationstar Mortgage LLC completed the securitization of approximately $343.6 million in Nationstar HECM Loan Trust 2014-1Mortgage Backed Securities. The notes were issued under two separate classes, comprised of Class A Notes and Class M Notes. As part of the securitization, Nationstar retained a portion of the offered Class A notes of approximately $70.4 million as well as the Class M Notes with an outstanding note balance of $36.2 million. A portion of the notes retained by Nationstar represent subordinated beneficial interests. In the first quarter 2015, the Company sold the remaining retained portions of the Class A and the Class M notes for total proceeds of $73.1 million.

In June 2015, Nationstar Mortgage LLC completed the securitization of approximately $269.4 million in Nationstar HECM Loan Trust 2015-1Mortgage Backed Securities. The notes were issued under two separate classes, comprised of Class A Notes and Class M Notes. No portion of the notes were retained by the Company.

Nonrecourse Debt–Legacy Assets

In November 2009, Nationstar completed the securitization of approximately $222.0 million of Asset Backed Securities (ABS), which was accounted for as a secured borrowing. This structure resulted in Nationstar carrying the securitized mortgage loans on

23

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

Nationstar’s consolidated balance sheet and recognizing the asset-backed certificates acquired by third parties as nonrecourse debt of $70.7 million at June 30, 2015 and $75.8 million at June 30, 2014. 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 $262.1 million and $268.2 million at June 30, 2015 and December 31, 2014, respectively. 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 $82.3 million and $88.2 million at June 30, 2015 and December 31, 2014, respectively.
Financial Covenants

The Company's borrowing arrangements and credit facilities contain various financial covenants which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements. As of June 30, 2015, management believes Nationstar was in compliance with its financial covenants.
Nationstar is required to maintain a minimum tangible net worth of at least $685 million as of each quarter-end related to its outstanding Master Repurchase Agreements on its outstanding repurchase facilities. As of June 30, 2015, Nationstar was in compliance with these minimum tangible net worth requirements.

9. Payables and Accrued Liabilities
Payables and accrued liabilities consist of the following:
 
June 30, 2015
 
December 31, 2014
Payables to servicing and subservicing investors
$
416,383

 
$
329,306

Accrued interest
60,550

 
59,708

Loans subject to repurchase from Ginnie Mae
133,928

 
131,592

Taxes
101,810

 
96,237

Payable to insurance carriers and insurance cancellation reserves
104,749

 
163,381

Accrued bonus and payroll
74,923

 
85,366

Repurchase reserves
28,831

 
29,165

MSR purchases payable including advances
23,098

 
45,697

Other
445,935

 
381,626

Total payables and accrued liabilities
$
1,390,207

 
$
1,322,078


Payables to servicing and subservicing investors
Payables to servicing and subservicing investors represent 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.

Payable to insurance carriers and insurance cancellation reserves
Payable to insurance carriers and insurance cancellation reserves consist of insurance premiums received from borrower payments awaiting disbursement to the insurance carrier and/or amounts due to third party investors on liquidated loans.


10. Securitizations and Financings
Variable Interest Entities

In the normal course of business, Nationstar enters into various types of on- and off-balance sheet transactions with special purpose entities (SPEs), which primarily consists of securitization trusts established for a limited purpose. Generally, these SPEs are formed for the purpose of securitization transactions in which Nationstar transfers assets to an SPE, which then issues to investors various forms of interests in those assets. In these securitization transactions, Nationstar typically receives cash and/or other interests in the SPE as proceeds for the transferred assets. Nationstar will typically retain the right to service the transferred receivables and

24

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

to repurchase the transferred receivables from the SPE if the outstanding balance of the receivables falls to a level where the cost exceeds the benefits of servicing the transferred receivables.

The Company evaluates its interests in each SPE for classification as a Variable Interest Entity (VIE). When an SPE meets the definition of a VIE and the Company determines that Nationstar is the primary beneficiary, the Company includes the SPE in its consolidated financial statements.

Nationstar has determined that the SPEs created in connection with the (i) Nationstar Home Equity Loan Trust 2009-A, (ii) Nationstar Mortgage Advance Receivables Trust, (iii) Nationstar Agency Advance Financing Facility, and (iv) Nationstar Servicer Advance Receivables Trust, 2014 BC should be consolidated as Nationstar is the primary beneficiary. Also, Nationstar consolidates two reverse mortgage SPE’s which are (v) Nationstar HECM Loan Trust 2014-1 and (vi) Nationstar HECM Loan Trust 2015-1 as Nationstar has determined that it is the primary beneficiary.

Nationstar evaluates its interests in certain entities to determine if these entities meet the definition of a VIE and whether the Company is the primary beneficiary and should consolidate the entity based on the variable interests it held both at inception and when there is a change in circumstances that require a reconsideration.

A summary of the assets and liabilities of Nationstar’s transactions with VIEs included in the Company’s consolidated financial statements is presented below for the periods indicated:
 
 
June 30, 2015
 
December 31, 2014
 
Transfers
Accounted for as
Secured
Borrowings
 
Reverse Secured Borrowings
 
Transfers
Accounted for as
Secured
Borrowings
 
Reverse Secured Borrowings
ASSETS
 
 
 
 
 
 
 
Restricted cash
$
169,827

 
$
11,956

 
$
90,068

 
$
15,578

Reverse mortgage interests

 
6,563,553

 

 
1,642,789

Advances
1,791,849

 

 
1,477,388

 

Mortgage loans held for investment, net
181,154

 

 
189,456

 

Derivative financial instruments

 

 
865

 

Other assets
2,726

 

 
2,678

 

Total Assets
$
2,145,556

 
$
6,575,509

 
$
1,760,455

 
$
1,658,367

LIABILITIES
 
 
 
 
 
 
 
Advance facilities
$
1,582,294

 
$

 
$
1,330,991

 
$

Payables and accrued liabilities
1,799

 
377

 
1,596

 
186

Nonrecourse debt–Legacy Assets
70,669

 

 
75,838

 

2014-1 HECM Securitization

 
275,138

 

 
259,328

2015-1 HECM Securitization


 
263,901

 

 

Participating interest financing

 
6,084,064

 

 
1,433,145

Total Liabilities
$
1,654,762

 
$
6,623,480

 
$
1,408,425

 
$
1,692,659


Securitizations Treated as Sales

When Nationstar sells mortgage loans in securitization transactions structured as sales, it may retain one or more bond classes and servicing rights in the securitization. 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:


25

NATIONSTAR MORTGAGE HOLDINGS INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(amounts in thousands, unless otherwise stated)

 
June 30, 2015
 
December 31, 2014
Total collateral balances
$
3,027,803

 
$
3,258,472

Total certificate balances
3,062,887

 
3,297,256


Nationstar has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of June 30, 2015 or December 31, 2014, and therefore does not have a significant maximum exposure to loss related to these unconsolidated VIEs.

A summary of mortgage loans transferred by Nationstar 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
June 30, 2015
 
June 30, 2014
Unconsolidated securitization trusts
$
730,235

 
$
936,178


 
For the three months ended June 30,
 
For the six months ended June 30,
Credit Losses
2015
 
2014
 
2015
 
2014