WALTER INVESTMENT MANAGEMENT CORP (Form: 10-K, Received: 02/29/2016 06:34:16)

Large accelerated filer þ

Accelerated filer ¨

Non-accelerated filer ¨

Smaller reporting company ¨

(Do not check if a smaller reporting company)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K



þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015



¨	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: 001-13417

Walter Investment Management Corp.

(Exact name of registrant as specified in its charter)



Maryland		13-3950486
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

3000 Bayport Drive, Suite 1100 Tampa, FL		33607 (Zip Code)
(Address of principal executive offices)

(813) 421-7600

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of Class		Name of Exchange on Which Registered
Common Stock, $0.01 Par Value per Share		NYSE

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III or this Form 10-K or any amendment to this Form 10-K ¨

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 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate market value of the registrant's voting stock held by non-affiliates as of June 30, 2015 , the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $0.8 billion , based on the closing sale price of the registrant’s common stock as reported on the New York Stock Exchange on such date. For purposes of this calculation the registrant has considered all Schedule 13G and Schedule 13D filers as of such date to be non-affiliates.

The registrant had 35,573,405 shares of common stock outstanding as of February 19, 2016 .

Documents Incorporated by Reference

Portions of the registrant's definitive Proxy Statement to be filed with the Securities and Exchange Commission under Regulation 14A within 120 days after the end of registrant's fiscal year covered by this Annual Report are incorporated by reference into Part III.

WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

FORM 10-K

ANNUAL REPORT

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015

INDEX




	PART I
Item 1.	Business	6
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	39
Item 2.	Properties	39
Item 3.	Legal Proceedings	39
Item 4.	Mine Safety Disclosures	40

	PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	41
Item 6.	Selected Financial Data	43
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	44
Item 7A.	Quantitative and Qualitative Disclosure about Market Risk	108
Item 8.	Financial Statements and Supplementary Data	111
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	111
Item 9A.	Controls and Procedures	111
Item 9B.	Other Information	114

	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	115
Item 11.	Executive Compensation	115
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	115
Item 13.	Certain Relationships and Related Transactions, and Director Independence	115
Item 14.	Principal Accountant Fees and Services	115

	PART IV
Item 15.	Exhibits and Financial Statement Schedules	116
	Signatures	117

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Certain acronyms and terms used throughout this Form 10-K are defined in the Glossary of Terms located at the end of Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Certain statements in this report, including matters discussed under Item 1. Business, Item 3. Legal Proceedings and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and including matters discussed elsewhere in this report, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Statements that are not historical fact are forward-looking statements. Certain of these forward-looking statements can be identified by the use of words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “estimates,” “assumes,” “may,” “should,” “will,” "targets," or other similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors, and our actual results, performance or achievements could differ materially from future results, performance or achievements expressed in these forward-looking statements. These forward-looking statements are based on our current beliefs, intentions and expectations. These statements are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to, those factors, risks and uncertainties described below and in more detail in Item 1A. Risk Factors and in our other filings with the SEC.

In particular (but not by way of limitation), the following important factors, risks and uncertainties could affect our future results, performance and achievements and could cause actual results, performance and achievements to differ materially from those expressed in the forward-looking statements:


•	our ability to operate our business in compliance with existing and future rules and regulations affecting our business, including those relating to the origination and servicing of residential loans, the management of third-party assets and the insurance industry (including lender-placed insurance), and changes to, and/or more stringent enforcement of, such rules and regulations;


•	increased scrutiny and potential enforcement actions by federal and state authorities;


•	the substantial resources (including senior management time and attention) we devote to, and the significant compliance costs we incur in connection with, regulatory compliance and regulatory examinations and inquiries, and any consumer redress, fines, penalties or similar payments we make in connection with resolving such matters;


•	uncertainties relating to interest curtailment obligations and any related financial and litigation exposure (including exposure relating to false claims);


•	potential costs and uncertainties, including the effect on future revenues, associated with and arising from litigation, regulatory investigations and other legal proceedings;

•

our dependence on U.S. government-sponsored entities (especially Fannie Mae) and agencies and their residential loan programs and our ability to maintain relationships with, and remain qualified to participate in programs sponsored by, such entities, our ability to satisfy various existing or future GSE, agency and other capital, net worth, liquidity and other financial requirements applicable to our business, and our ability to remain qualified as a GSE approved seller, servicer or component servicer, including the ability to continue to comply with the GSEs’ respective residential loan and selling and servicing guides;


•	uncertainties relating to the status and future role of GSEs, and the effects of any changes to the origination and/or servicing requirements of the GSEs or various regulatory authorities or the servicing compensation structure for mortgage servicers pursuant to programs of GSEs or various regulatory authorities;


•	our ability to maintain our loan servicing, loan origination, insurance agency or collection agency licenses, or any other licenses necessary to operate our businesses, or changes to, or our ability to comply with, our licensing requirements;


•	our ability to comply with the servicing standards required by the National Mortgage Settlement;


•	our ability to comply with the terms of the stipulated order resolving allegations arising from an FTC and CFPB investigation of Ditech Financial;


•	operational risks inherent in the mortgage servicing and mortgage originations businesses, including reputational risk;


•	risks related to our substantial levels of indebtedness, including our ability to comply with covenants contained in our debt agreements, generate sufficient cash to service such indebtedness and refinance such indebtedness on favorable terms, as well as our ability to incur substantially more debt;

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•	our ability to renew advance financing facilities or warehouse facilities and maintain borrowing capacity under such facilities;


•	our ability to maintain or grow our servicing business and our residential loan originations business;

•

our ability to achieve our strategic initiatives, particularly our ability to: execute and complete balance sheet management activities; complete the sale of our insurance business; make arrangements with potential capital partners; complete sales of assets to, and enter into other arrangements with, WCO; increase the mix of our fee-for-service business; reduce our debt; and develop new business, including acquisitions of MSRs or entering into new subservicing arrangements;


•	changes in prepayment rates and delinquency rates on the loans we service or sub-service;


•	the ability of our clients and credit owners to transfer or otherwise terminate our servicing or sub-servicing rights;


•	a downgrade of, or other adverse change relating to, our servicer ratings or credit ratings;


•	our ability to collect reimbursements for servicing advances and earn and timely receive incentive payments and ancillary fees on our servicing portfolio;


•	our ability to collect indemnification payments and enforce repurchase obligations relating to mortgage loans we purchase from our correspondent clients and our ability to collect in a timely manner indemnification payments relating to servicing rights we purchase from prior servicers;


•	local, regional, national and global economic trends and developments in general, and local, regional and national real estate and residential mortgage market trends in particular, including the volume and pricing of home sales and uncertainty regarding the levels of mortgage originations and prepayments;


•	uncertainty as to the volume of originations activity we will benefit from prior to, and following, the expiration of HARP, which is scheduled to occur on December 31, 2016, including uncertainty as to the number of "in-the-money" accounts we may be able to refinance;

•

risks associated with the origination, securitization and servicing of reverse mortgages, including changes to reverse mortgage programs operated by FHA, HUD or Ginnie Mae, our ability to accurately estimate interest curtailment liabilities, continued demand for HECM loans and other reverse mortgages, our ability to fund HECM repurchase obligations, our ability to fund principal additions on our HECM loans, and our ability to securitize our HECM loans and tails;


•	our ability to realize all anticipated benefits of past, pending or potential future acquisitions or joint venture investments;


•	the effects of competition on our existing and potential future business, including the impact of competitors with greater financial resources and broader scopes of operation;


•	changes in interest rates and the effectiveness of any hedge we may employ against such changes;


•	risks and potential costs associated with technology and cybersecurity, including: the risks of technology failures and of cyber-attacks against us or our vendors; our ability to adequately respond to actual or alleged cyber-attacks; and our ability to implement adequate internal security measures and protect confidential borrower information;


•	risks and potential costs associated with the implementation of new technology such as MSP, the use of new vendors or the transfer of our servers or other infrastructure to new data center facilities;


•	our ability to comply with evolving and complex accounting rules, many of which involve significant judgment and assumptions;


•	uncertainties regarding impairment charges relating to our goodwill or other intangible assets;


•	our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures;


•	our ability to manage conflicts of interest relating to our investment in WCO and maintain our relationship with WCO; and

•

risks related to our relationship with Walter Energy and uncertainties arising from or relating to its bankruptcy filings, including potential liability for any taxes, interest and/or penalties owed by the Walter Energy consolidated group for the full or partial tax years during which certain of the Company's former subsidiaries were a part of such consolidated group and certain other tax risks allocated to us in connection with our spin-off from Walter Energy.

All of the above factors, risks and uncertainties are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors, risks and uncertainties emerge from time to time, and it is not possible for our management to predict all such factors, risks and uncertainties.

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Although we believe that the assumptions underlying the forward-looking statements (including those relating to our outlook) contained herein are reasonable, any of the assumptions could be inaccurate, and therefore any of these statements included herein may prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made, except as otherwise required under the federal securities laws. If we were in any particular instance to update or correct a forward-looking statement, investors and others should not conclude that we would make additional updates or corrections thereafter except as otherwise required under the federal securities laws.

In addition, this report may contain statements of opinion or belief concerning market conditions and similar matters. In certain instances, those opinions and beliefs could be based upon general observations by members of our management, anecdotal evidence and/or our experience in the conduct of our business, without specific investigation or statistical analyses. Therefore, while such statements reflect our view of the industries and markets in which we are involved, they should not be viewed as reflecting verifiable views and such views may not be shared by all who are involved in those industries or markets.

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PART I

ITEM 1. BUSINESS

The Company

We are a diversified mortgage banking firm focused primarily on servicing and originating residential loans, including reverse loans. We service a wide array of loans across the credit spectrum for our own portfolio and for GSEs, government agencies, third-party securitization trusts and other credit owners. Through our consumer and correspondent lending channels, we originate and purchase residential loans that we predominantly sell to GSEs and government entities. In addition, we operate several other complementary businesses, which include managing a portfolio of credit-challenged, non-conforming residential mortgage loans; an insurance agency serving borrowers and credit owners of our servicing portfolio; a post charge-off collection agency; and an asset management business through our SEC registered investment advisor. These supplemental businesses allow us to leverage our core servicing capabilities and consumer base to generate complementary revenue streams.

Our goal is to become a partner with our customers; assisting them with the originations process and through the life of their loan, with a highly regarded originations and servicing platform and quality customer service in an open, honest and straightforward manner. We are a Maryland corporation incorporated in 1997 and operate throughout the U.S. Our business was established in 1958 and operated as the captive financing business of Walter Energy, originating and purchasing residential loans and servicing these loans to maturity. In April 2009, we were spun off from Walter Energy; merged with Hanover; qualified as a REIT; and began to operate our business as an independent, publicly-traded company. After the spin-off, in 2010 we acquired Marix, a high-touch specialty mortgage servicer, and in 2011 we acquired Green Tree, a leading independent mortgage loan servicer providing high-touch servicing of GSE, government entity and third-party mortgage loans. As a result of the Green Tree acquisition, we no longer qualified as a REIT. Since then, we have grown our servicing and originations businesses both organically and through a number of acquisitions, including the acquisitions of RMS and S1L in 2012, the acquisition of a national originations platform in 2013 from ResCap and significant bulk servicing right acquisitions in 2013 and 2014.

The terms “Walter Investment,” the “Company,” “we,” “us” and “our” as used throughout this report refer to Walter Investment Management Corp. and its consolidated subsidiaries.

At December 31, 2015 , we serviced 2.2 million residential loans with an unpaid principal balance of $266.6 billion . We have been one of the 10 largest residential loan servicers in the U.S by unpaid principal balance for the past three years according to Inside Mortgage Finance. Our originations business originated $25.1 billion in mortgage loan volume in 2015 , ranking it in the top 20 originators nationally by unpaid principal balance according to Inside Mortgage Finance. Our reverse mortgage business is a leading integrated franchise in the reverse mortgage sector and, according to an industry source, was the third leading issuer of HMBS during the year ended December 31, 2015.

We manage our Company in three reportable segments: Servicing, Originations, and Reverse Mortgage. A description of the business conducted by each of these segments is provided below:

Servicing - Our Servicing segment consists of operations that perform servicing for third-party credit owners of mortgage loans for a fee and the Company’s own mortgage loan portfolio. The Servicing segment also operates complementary businesses consisting of an insurance agency serving residential loan borrowers and credit owners and a collections agency that performs collections of post charge-off deficiency balances for third parties and the Company.

Servicing activities relating to our mortgage loan portfolio are performed on a fee-for-service basis and involve the management (e.g., calculation, collection and remittance) of mortgage payments, escrow accounts, and insurance claims. For certain accounts, we perform specialty servicing activities utilizing a “high-touch” model to establish and maintain borrower contact and facilitate loss-mitigation strategies in an attempt to keep defaulted borrowers in their homes. Borrower interactions rely on loss mitigation strategies that apply predictive analytics to identify risk factors and severity grades to determine appropriate loss mitigation options and strategies. We assign a SPOC to accounts experiencing difficulties in order to make collection calls and coordinate loss mitigation efforts. The single point of contact allows us to build one-on-one relationships with our consumers. We follow GSE servicing guidelines (as well as other credit owner guidelines) for a standardized loss mitigation process and have frequent contact with borrowers. Under certain circumstances, we offer loss-mitigation options that include loan modification through the use of federally-sponsored loan modification programs such as HAMP, which was established to assist eligible home owners with loan modifications on their home mortgage debt and which is scheduled to expire in December 2016. We also manage loan modification programs for borrowers experiencing temporary hardships by providing short-term interest rate reductions and/or payment deferrals. Prior to pursuing foreclosure, we pursue alternative property resolutions such as short sales (in which the borrower agrees to sell the property for less than the loan balance and the difference is forgiven) and deeds-in-lieu of foreclosure (in which the borrower agrees to convey the property deed outside of foreclosure proceedings), when loan modification and other efforts are unable to cure a default.

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We perform mortgage servicing for various clients (as sub-servicer) and for credit owners, the most significant of which is Fannie Mae. Our servicing revenues from servicing Fannie Mae residential loans constituted approximately 45% of our total revenues in 2015. Under our numerous master servicing agreements and sub-servicing contracts, we agree to service loans in accordance with servicing standards that our counterparties change from time to time. These agreements and contracts can typically be terminated by the counterparties thereto, with or without cause. Refer to Item 1A. Risk Factors for a discussion of certain risks relating to our master servicing agreements and sub-servicing contracts.

We have grown our servicing portfolio by: acquiring servicing rights in bulk transactions, pursuant to co-issue arrangements and in connection with business acquisitions; retaining servicing rights relating to mortgage loans we originate; and entering into sub-servicing contracts. Under our co-issue arrangements, we generally have the right to purchase from third party mortgage loan originators, from time to time on a flow basis, servicing rights relating to certain mortgage loans originated by such third parties, subject to certain conditions. As the owner of servicing rights, we act on behalf of loan owners and have the contractual right to receive a stream of cash flows (expressed as a percentage of unpaid principal balance) in exchange for performing specified servicing functions and temporarily advancing funds to meet contractual payment requirements for credit owners and to pay taxes, insurance and foreclosure costs on delinquent or defaulted mortgages. As a sub-servicer we earn a contractual fee on a per-loan basis and we are reimbursed for servicing advances we make on delinquent or defaulted mortgages, generally in the following month. We can earn incentive fees based on the performance of certain loan pools serviced by us and also have the ability, under certain circumstances, to earn modification fees and other program specific incentives, such as HAMP fees, and ancillary fees, such as late fees. Our specialty servicing fees typically include a base servicing fee and activity-based fees for the successful completion of default-related services.

The value of a servicing right asset is based on the present value of the stream of expected servicing-related cash flows from a loan and is largely dependent on market interest rates, prepayment speeds and delinquency performance. Generally, a rising interest rate environment drives a decline in prepayment speeds and thus increases the value of servicing rights, while a declining interest rate environment drives increases in prepayment speeds and thus reduces the value of servicing rights.

Our Servicing segment provides voluntary insurance for residential loan borrowers and lender-placed hazard insurance for borrowers and credit owners, as well as other ancillary products, through our insurance agency for a commission. Commissions may be earned on lender-placed insurance in certain circumstances and if permitted under applicable laws and regulations. Mortgage loans require borrowers to maintain insurance coverage to protect the collateral securing the loan. To the extent a borrower fails to maintain the necessary coverage, we are generally required to ensure insurance is purchased on the credit owner’s behalf. Though we are licensed nationwide to sell insurance products on behalf of third-party insurance carriers, we neither underwrite insurance policies nor adjudicate claims.

Insurance revenues earned have historically been aligned with the size of our servicing portfolio. However, due to Fannie Mae and Freddie Mac restrictions that became effective on June 1, 2014 and other recent regulatory developments surrounding lender-placed insurance, our sales commissions related to lender-placed insurance policies decreased materially beginning in 2014.

Our Servicing segment performs collections of post charge-off or foreclosure deficiency balances for itself and on behalf of third-party securitization trusts and other asset owners. The third-party fee we earn is based on a percentage of our collections or a percentage of the unpaid principal balance. We recognize revenues associated with our on-balance sheet charged-off loan portfolio through its change in fair value.

Originations - Our Originations segment originates and purchases mortgage loans through the following channels:


•	Consumer originations, which is comprised of:


◦	Consumer retention - originates mortgage loans primarily through the use of a centralized call center that utilizes leads generated through solicitations of consumers in our existing servicing portfolio and through referrals from our servicing call centers.


◦	Consumer direct - originates mortgage loans primarily through the use of a centralized call center that utilizes origination leads generated through direct mail, internet, telephone and general advertising campaign solicitations of consumers, some of whom who are not currently in our existing servicing portfolio.


•	Correspondent lending - purchases closed mortgage loans from a network of lenders in the marketplace.

Beginning in 2016, we combined our consumer retention and consumer direct call centers to pursue a more streamlined consumer lending process.

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Our consumer originations operations offer a range of home purchase and refinance mortgage loan options, including fixed and adjustable rate conventional conforming, FHA, VA, USDA and jumbo products. A conventional conforming loan is a mortgage loan that conforms to GSE guidelines, which include, but are not limited to, limits on loan amount, loan-to-value ratios, debt-to-income ratios, and minimum credit scores. Our product offerings include special financing programs such as HARP, which has expanded loan-to-value limits for qualified applicants, as compared to conventional conforming loans. The mortgage loans we fund are generally eligible for sale to GSEs or insured by government agencies.

We underwrite the mortgage loans we originate generally to secondary market standards, including the standards set by Fannie Mae, Freddie Mac, the FHA, the VA, and jumbo loan investor programs. Loans are reviewed by our underwriters in an attempt to ensure each mortgage loan is documented according to, and its terms comply with, the applicable secondary market standard. Our underwriters determine loan eligibility based on specific loan product requirements, such as loan-to-value, FICO, or maximum loan amount. Third party diligence tools are utilized by our underwriters to validate data supplied by the potential borrower and to uncover potential discrepancies. We conduct audits on our underwriters to confirm proper adherence to our internal guidelines and polices, which audits are in addition to our standard quality control review. These audits are designed to provide an additional layer of internal review in an attempt to further mitigate quality defects and repurchase risk in the originations process.

Within our correspondent lending channel we generally purchase the same types of loans that we originate in our consumer originations channel, although the mix varies among these channels. Correspondent lenders with which we do business agree to comply with our client guide, which sets forth the terms and conditions for selling loans to us and generally governs the business relationship. We monitor and attempt to mitigate counterparty risk related to loans that we acquire through our correspondent lending channel by conducting quality control reviews of correspondent lenders, reviewing compliance by correspondent lenders with applicable underwriting standards and our client guide, and evaluating the credit worthiness of correspondent lenders on a periodic basis. In 2015, our correspondent lending channel purchased loans from 476 lenders in the marketplace, of which 60 were associated with half of our purchases.

Our capital markets group is responsible for pricing loans and managing the interest rate and pull through risk from the time the loan is locked until the time it is sold to third parties in an attempt to maximize loan sale profitability through our various originations channels. The capital markets group uses models and hedging analysis in an attempt to maximize profitability while minimizing the risks inherent in the originations business.

In January 2016, we exited activities associated with our consumer retail channel, which originated mortgage loans through loan officers. Our consumer retail channel originated $551.3 million in mortgage loans during the year ended December 31, 2015.

In 2015, the mix of mortgage loans sold by our Originations segment (which includes loans originated and purchased through all channels), based on unpaid principal balance, shifted from substantially all Fannie Mae conventional conforming loans during 2014 to approximately (i) 56% Fannie Mae conventional conforming loans, (ii) 35% Ginnie Mae loans and (iii) 9% Freddie Mac conventional conforming loans. A substantial majority of our Ginnie Mae mortgage loan originations in 2015 were FHA-insured loans.

Our Originations segment revenue, which is primarily gains on sales of loans, is impacted by interest rates and the volume of loans locked. The margins earned by our Originations segment are impacted by our cost to originate the loans including underwriting, fulfillment and lead costs. We generally sell our originated and purchased mortgage loans to third parties while retaining the servicing rights.

Reverse Mortgage - Our Reverse Mortgage segment primarily focuses on the origination or purchase, securitization and servicing of reverse loans. Reverse loan originations are generally conducted through our consumer direct, consumer retail, wholesale and correspondent lending origination channels.

The consumer retail channel originates reverse loans in 48 states and the District of Columbia through loan officers located in approximately 35 licensed locations throughout the U.S. The consumer direct channel originates reverse loans through call centers with leads purchased from lead purveyors or generated via advertising campaigns. The wholesale channel sources reverse loans from a network of brokers. The correspondent channel purchases reverse loans from a network of correspondents in the marketplace.

Our Reverse Mortgage segment receives cash proceeds at the time reverse loans are securitized. We securitize substantially all our reverse loans through the Ginnie Mae II MBS program into HMBS. Based upon the structure of the Ginnie Mae II MBS program, we determined that we have not met all of the requirements for sale accounting, and as such, we account for these transfers as secured borrowings. Under this accounting treatment, the reverse loans remain on the consolidated balance sheet as residential loans. The segment earns net revenue on the net fair value gains on reverse loans and the related HMBS obligations.

This segment also performs servicing for third-party credit owners of reverse loans, similar to our Servicing segment, and provides other complementary services for the reverse mortgage market, such as real estate owned property management and disposition, for a fee.

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Other - Our Other non-reportable segment primarily consists of the assets and liabilities of the Non-Residual Trusts, corporate debt and our asset management business, which we operate through GTIM, our SEC registered investment adviser subsidiary and the investment manager of WCO. WCO was formed to invest in mortgage-related assets. We may seek to work with WCO in connection with certain servicing right acquisitions and other transactions.

As previously reported, during the first quarter of 2015, we took steps to simplify our business and reorganized our reportable segments to align with our changes in the management reporting structure. As a result of this reorganization, we modified the Servicing segment by combining the Asset Receivables Management, Insurance, and Loans and Residuals businesses into the Servicing segment. We believe the changes in our reportable business segments reflect the way management, under its new reporting structure, monitors performance, aligns strategies and allocates resources in the current environment, while altogether improving efficiencies. Refer to Note 27 in the Notes to Consolidated Financial Statements for financial information relating to our segments.

Competition

We compete with a great number of competitors in the mortgage banking market for both the servicing and originations businesses as well as in our reverse mortgage and complementary businesses. Key competitors include financial institutions and non-bank servicers and originators. Our competitive position in the servicing business is largely determined by our strong relationships in the sector; our scale; our ability to differentiate ourselves from our competitors through a highly-regarded servicing platform; our continued focus on the consumer experience; and our compliance with a complex matrix of local, state and federal regulatory requirements. In the originations business our competitive position is determined by our scale in the sector; our ability to grow our brand over time; our ability to provide a best-in-class consumer experience; and our ability to offer a breadth of competitive products. Our consolidated mortgage loan origination and servicing businesses operate under our single brand, Ditech, to deliver a streamlined process for our customers, driving a "life of loan" experience. We are focused on providing excellent customer service in a compliant manner.

Technology

Our businesses employ technology by using third-party systems where standardization is key and proprietary systems where superior functionality, flexibility and time to market are critical to regulatory compliance, customer experience and credit performance. The majority of our proprietary systems are supported by a team of information technology professionals using the latest development techniques and technologies to protect our systems and ensure they are effective. In-house developed proprietary systems are leveraged for customer service, default management, data modeling and reverse mortgage originations and servicing.

On October 27, 2014, Green Tree Servicing (now Ditech Financial) signed a long-term Loan Servicing Agreement with Black Knight Financial Services, LLC for the use of MSP, a mortgage and consumer loan servicing platform. Ditech Financial has been using a combination of MSP and its own proprietary collections, customer service and default management systems to service Ginnie Mae and Freddie Mac loans for several years. Ditech Financial intends to move its Fannie Mae first lien mortgages to MSP in the first half of 2016 and will continue to utilize proprietary collections, customer service and default management systems for such loans. Ditech Financial anticipates that it will move the remainder of its loans, which consist primarily of private label loans, manufactured housing loans and second liens, to MSP from its proprietary system in 2017. We believe we have capacity in our platform to support the growth of our portfolios.

Subsidiaries

For a listing of our subsidiaries, refer to Exhibit 21 of this Annual Report on Form 10-K.

Employees

At December 31, 2015 , we employed approximately 5,900 full-time equivalent employees, as compared to 6,700 at December 31, 2014 , all of whom were in the U.S. The decline in full-time equivalent employees was due primarily to distinct actions we took in 2015 to improve efficiencies within the organization, restructuring measures within our mortgage loan servicing operations and actions to improve the profitability of the reverse mortgage business, which included streamlining its geographic footprint. We believe we have been successful in our efforts to recruit and retain qualified employees. However, from time to time we experience turnover with respect to certain roles at the Company, and therefore maintain active and continuous new employee recruiting and training programs. None of our employees is a party to any collective bargaining agreements.

We outsource certain back-office functions that support our loan originations and servicing groups to third-party vendors located in the U.S. and offshore locations in an effort to improve efficiency and reduce cost. These back-office functions include loan set-up, escrow account set-up, claims filing, post-close audits, indexing and imaging. When we outsource a function we retain a third-party vendor to perform such function, as opposed to having our employees perform such function. From time to time we expect to outsource additional back-office and other functions.

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Rights Agreement

On June 29, 2015, we entered into a Rights Agreement with Computershare. Also on June 29, 2015, our Board of Directors authorized and we declared a dividend of one preferred stock purchase right for each outstanding share of our common stock. The dividend was payable on July 9, 2015 to stockholders of record as of the close of business on July 9, 2015 and entitles the registered holder to purchase from us one one-thousandth of a fully paid non-assessable share of Junior Participating Preferred Stock, par value $0.01 per share, of the Company at a price of $74.16 , subject to adjustment as provided in the Rights Agreement. The terms of the preferred stock purchase rights are set forth in the Rights Agreement, which is summarized in our Current Report on Form 8-K dated June 29, 2015. Subject to certain limited exceptions specified in the Rights Agreement (including the amendments described below), the rights are not exercisable until a person or group of persons acting in concert acquires beneficial ownership, as defined in the Rights Agreement, of more than 20% of our outstanding shares of common stock. One such exception is that a person or group that already owned 20% or more of our outstanding shares of common stock before the first public announcement of the rights plan may continue to own those shares without causing the rights to become exercisable. The rights plan will expire on June 29, 2016, unless the rights are earlier redeemed or exchanged by us.

Amendment No. 1 to the Rights Agreement

On November 16, 2015, in connection with the appointment of Daniel Beltzman to our Board of Directors, we entered into Amendment No. 1 to the Rights Agreement with Computershare. Upon the terms and subject to the conditions set forth in the Rights Agreement and this amendment, (i) Birch Run and its affiliates and associates may acquire up to 25% of the total voting power of all shares of our common stock without triggering the exercisability of the preferred share purchase rights attached to shares of our common stock pursuant to the Rights Agreement, and (ii) shares of our common stock received by directors as compensation for their services, pursuant to any director compensation program, will also not trigger the exercisability of such rights.

Amendment No. 2 to the Rights Agreement

On November 22, 2015, in connection with the appointment of Vadim Perelman to our Board of Directors, we entered into Amendment No. 2 to the Rights Agreement with Computershare. Upon the terms and subject to the conditions set forth in the Rights Agreement and this amendment, Baker Street may acquire up to 25% of the total voting power of all shares of our common stock without triggering the exercisability of the preferred share purchase rights attached to shares of our common stock pursuant to the Rights Agreement.

Walter Capital Opportunity Corp.

In 2014, we established WCO, a company formed to invest in mortgage-related assets, including MSRs, excess servicing spread related to MSRs, residential whole loans, agency mortgage-backed securities and other real estate-related securities and related derivatives, (i) to facilitate our transition toward a business model in which, where appropriate and feasible, we sub-service and manage mortgage-related assets owned by third parties rather than by us, and (ii) to grow our investment management business.

As of December 31, 2015, WCO had aggregate total capital commitments of $245.0 million , of which approximately $220.0 million had been funded, including the entirety of our $20.0 million capital commitment. We also own warrants to purchase additional equity in WCO.

Concurrently with the first funding of WCO capital commitments in July 2014:

(i)

we entered into a management agreement with WCO pursuant to which GTIM was appointed the manager of WCO. Under the management agreement, GTIM provides investment advisory and management services to WCO and administers its business activities and day-to-day operations, including providing the management team of WCO (which is comprised of persons that are also officers and/or employees of the Company) and counseling WCO regarding its qualification as a REIT. GTIM provides its services under the management agreement subject to the supervision of WCO’s board of directors, which was comprised of four members as of December 31, 2015, one of which is also a director and officer of Walter Investment. Pursuant to the management agreement, GTIM is entitled to earn a base management fee and certain performance-based incentive fees. The management agreement has an initial four-year term, with automatic one-year renewal periods;

(ii)

we entered into a contribution agreement with WCO, which was subsequently amended, and pursuant thereto, in May 2015, contributed 100% of the equity of Marix to WCO (Marix holds certain state licenses to own MSRs and is an approved Freddie Mac and Fannie Mae servicer; however, any transfer to Marix of an MSR relating to a GSE mortgage loan would require the consent of the applicable GSE, and potentially other approvals);


(iii)	we sold to WCO a portion of the excess servicing spread associated with certain mortgage loans serviced by us for $75.4 million ; and

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(iv)	we entered into various other ancillary agreements with WCO pursuant to which, among other things, WCO has the right to make the first offer to purchase servicing rights relating to certain mortgage loans we originate and certain excess servicing spread that we may create from time to time.

In November 2015, we entered into additional arrangements with WCO:


(i)	we sold to WCO excess servicing spread associated with certain mortgage loans serviced by us for $46.8 million ;


(ii)	we sold mortgage servicing rights originated by Ditech Financial to WCO for $17.8 million ;


(iii)	we entered into a sub-servicing arrangement with WCO pursuant to which we sub-service the mortgage loans underlying the mortgage servicing rights sold by Ditech Financial to WCO in exchange for a sub-servicing fee; and


(iv)	Ditech Financial was engaged by WCO to offer refinancing options to borrowers with mortgage loans underlying the aforementioned excess spread sale transaction and mortgage servicing rights transaction for purposes of minimizing portfolio runoff.

In addition, we have entered into servicing and sub-servicing arrangements with WCO pursuant to which we service residential whole loans acquired by WCO from a third party in exchange for a servicing fee and sub-service GSE mortgage loans underlying mortgage servicing rights acquired by WCO from a third party in exchange for a sub-servicing fee. Ditech Financial was also engaged by WCO to offer refinancing options to borrowers with mortgage loans underlying the aforementioned sub-servicing arrangement for purposes of minimizing portfolio runoff.

As described above, we have sold excess servicing spread and servicing rights to WCO and have been engaged by WCO to service whole loans and sub-service mortgage loans underlying mortgage servicing rights owned by WCO. We anticipate that we may enter into additional arrangements of this nature with WCO in the future, subject to mutual agreement on the terms of any such arrangements. However, WCO is not obligated to purchase excess servicing spread or servicing rights from us, to utilize us to service any whole loans it may acquire, or to utilize us to sub-service any servicing rights it may acquire from us or others.

Laws and Regulations

Our business is subject to extensive regulation by federal, state and local authorities, including the CFPB, HUD, VA, the SEC and various state agencies that license, audit and conduct examinations of our mortgage servicing and mortgage originations businesses. We are also subject to a variety of regulatory and contractual obligations imposed by credit owners, investors, insurers and guarantors of the mortgages we originate and service, including, but not limited to, Fannie Mae, Freddie Mac, Ginnie Mae, FHFA and the VA/FHA. Furthermore, our industry has been under increased scrutiny by federal and state regulators over the past several years. We expect this scrutiny to continue. Laws, rules, regulations and practices that have been in place for many years may be changed, and new laws, rules, regulations and administrative guidance have been, and may continue to be, introduced in order to address real and perceived problems in our industry. We expect to incur ongoing operational, legal and system costs in order to comply with these rules and regulations.

Federal Law

We are required to comply with numerous federal consumer protection and other laws, including, but not limited to:


•	Sections 502 through 509 of the Gramm-Leach-Bliley Act and Regulation P, which requires initial and periodic communication with consumers on privacy matters and the maintenance of privacy regarding certain consumer data in our possession;


•	the Fair Debt Collection Practices Act, which regulates the timing and content of communications on debt collections;


•	the TILA, including HOEPA, and Regulation Z, which regulate mortgage loan origination activities, require certain disclosures be made to mortgagors regarding terms of mortgage financing, regulate certain high-cost mortgages, mandate home ownership counseling for mortgage applicants and regulate certain mortgage servicing activities;


•	the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act and Regulation V, which collectively regulate the use and reporting of information related to the credit history of consumers;


•	the Equal Credit Opportunity Act and Regulation B, which prohibit discrimination on the basis of age, race and certain other characteristics in the extension of credit and requires certain disclosures to applicants for credit;


•	the Homeowners Protection Act, which requires the cancellation of mortgage insurance once certain equity levels are reached;


•	the Home Mortgage Disclosure Act and Regulation C, which require reporting of certain public loan data;

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•	the Fair Housing Act and its implementing regulations, which prohibit discrimination in housing on the basis of race, sex, national origin, and certain other characteristics;


•	the Servicemembers Civil Relief Act, as amended, which provides certain legal protections and relief to members of the military;


•	the RESPA and Regulation X, which governs certain mortgage loan origination activities and practices and related disclosures and the actions of servicers related to various items, including escrow accounts, servicing transfers, lender-placed insurance, loss mitigation, error resolution, and other customer communications;


•	Regulation AB under the Securities Act, which requires registration, reporting and disclosure for mortgage-backed securities;


•	certain provisions of the Dodd-Frank Act, including the Consumer Financial Protection Act, which among other things, created the CFPB and prohibits unfair, deceptive or abusive acts or practices;


•	the Federal Trade Commission Act, the FTC Credit Practices Rules and the FTC Telemarketing Sales Rule, which prohibit unfair and deceptive acts and practices and certain related practices;


•	the Telephone Consumer Protection Act, which restricts telephone solicitations and automatic telephone equipment;


•	Regulation N, which prohibits certain unfair and deceptive acts and practices related to mortgage advertising;


•	the Bankruptcy Code and bankruptcy injunctions and stays, which can restrict collection of debts;


•	the Secure and Fair Enforcement for Mortgage Licensing Act; and


•	various federal flood insurance laws that require the lender and servicer to provide notice and ensure appropriate flood insurance is maintained when required.

The Dodd-Frank Act, enacted in 2010, constituted a sweeping reform of the regulation and supervision of financial institutions, as well as the regulation of derivatives, capital market activities and consumer financial services. Among other things, the Dodd-Frank Act created the CFPB, a new federal entity responsible for regulating consumer financial services. The CFPB has rulemaking authority with respect to many of the federal consumer protection laws applicable to mortgage servicers, including TILA, RESPA and the FDCPA. The CFPB also has supervision, examination and enforcement authority over consumer financial products and services offered by certain non-depository institutions and large insured depository institutions. The CFPB's jurisdiction includes persons (such as us) originating, brokering or servicing residential mortgage loans, those persons performing loan modification or foreclosure relief services in connection with such loans and certain entities involved in the transfer of MSRs.

Title XIV of the Dodd-Frank Act imposes a number of requirements on mortgage originators and servicers of residential mortgage loans, significantly increases the penalties for noncompliance with certain consumer protection laws and also established new standards and practices for mortgage originators and servicers. Subsequent to the enactment of the Dodd-Frank Act, the CFPB has issued, and is expected to continue to issue, various rules that impact mortgage servicing and originations, including: periodic billing statements; certain notices and acknowledgments; prompt crediting of borrowers’ accounts for payments received; additional notice, review and timing requirements with respect to delinquent borrowers; prompt investigation of complaints by borrowers; additional requirements before purchasing insurance to protect the lender’s interest in the property; certain customer service benchmarks for servicers; servicers’ obligations to establish reasonable policies and procedures; requirements to provide information about mortgage loss mitigation options to delinquent borrowers; rules governing the scope, timing, content and format of disclosures to consumers regarding the interest rate adjustments of their variable-rate transactions; establishing certain requirements relating to billing statements, payment crediting and the provision of payoff statements; preventing or limiting servicers of residential mortgage loans from taking certain actions (e.g. the charging of certain fees); requirements for determining prospective borrowers’ abilities to repay their mortgages; removing incentives for higher cost mortgages; prohibiting prepayment penalties for non-qualified mortgages; prohibiting mandatory arbitration clauses; requiring additional disclosures to potential borrowers; restricting the fees that mortgage originators may collect; requiring new mortgage loan disclosures that integrate the TILA disclosures with the RESPA disclosures for certain covered transactions; and other new requirements, in each case either increasing costs and risks related to servicing and originations or reducing revenues currently generated.

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Recently, the only reverse mortgage loan product we have originated is the HECM, an FHA-insured loan that must comply with FHA and other regulatory requirements. Accordingly, many of the recent federal legal changes affecting our reverse mortgage business relate to the HECM. On September 3, 2013, the FHA announced changes to the HECM program, pursuant to authority under the Reverse Mortgage Stabilization Act, signed into law on August 9, 2013. The changes impact initial mortgage insurance premiums and principal limit factors, impose restrictions on the amount of funds that senior borrowers may draw down at closing and during the first 12 months after closing, and require a financial assessment for all HECM borrowers to ensure they have the capacity and willingness to meet their financial obligations and the terms of the reverse mortgage. Key components of the financial assessment include a credit history and property charge payment history analysis, a cash flow/residual income analysis, and an analysis of compensating factors and extenuating circumstances to determine if the applicant is eligible for a HECM loan. In addition, the changes require borrowers to set aside a portion of the loan proceeds they receive at closing (or withhold a portion of monthly loan disbursements) for the payment of property taxes and homeowners insurance based on the results of the financial assessment. The new HECM requirements generally became effective on September 30, 2013, with the new financial assessment requirements and funding requirements for the payment of property charges taking effect on April 27, 2015.

State Law

We are also subject to extensive state licensing, statutory and regulatory requirements as a mortgage servicer, loan originator, debt collector and insurance agency throughout the U.S. We are subject to ongoing supervision, audits and examinations conducted by state regulators, including periodic requests from state and other agencies for records, documents and information regarding our policies, procedures and business practices.

State laws affecting our businesses have also been evolving. Some changes have occurred on a nationwide basis at the state level due to the establishment and/or amendment of minimum standards under federal law, such as state licensing requirements. Some states may seek to incorporate federal requirements as a requirement imposed on a state licensed entity, while other states may seek to impose their own additional requirements to the extent not preempted under federal law. Additionally, there have been trends in state lawmaking focusing on the servicing of mortgage loans related to, for example, data privacy, loan modifications and anti-foreclosure measures.

Recent Regulatory Developments

Servicing Segment

On May 7, 2014, the Financial Stability Oversight Council recommended that state regulators work together with each other, the CFPB and the FHFA, as appropriate, to collaborate on prudential and corporate governance standards to strengthen non-bank mortgage servicing companies. On March 25, 2015, the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators proposed a set of prudential regulatory standards that would apply to all non-bank mortgage servicers licensed by and operating in any U.S. state. The standards address capital, liquidity, risk management, data standards, data protection, corporate governance, servicing transfer requirements and change of control requirements. A 90-day public comment period expired on June 23, 2015 and the proposal remains pending. It is unclear what the final requirements will be, when they will be issued (if at all) or how such requirements may impact our business.

On July 10, 2015, the FCC issued a Declaratory Ruling and Order, effective immediately, clarifying numerous aspects of the Telephone Consumer Protection Act. The TCPA regulates telemarketing communications, the use of automatic telephone dialing systems and artificial or prerecorded voice messages (often referred to as “robocalls”) and unsolicited facsimile transmissions. Under the new ruling, the FCC adopted a broad definition of the term “automatic telephone dialing system” focusing on the functional capability of the dialing system rather than the system’s current application and usage. Additionally, the FCC clarified that a consumer who has previously given consent to be called may revoke such consent in any reasonable manner, but did not provide guidance as to what procedures or standards a business must follow in providing such revocation right. The FCC also held that calls placed to persons who are not the intended recipients of the calls are actionable under the TCPA. The FCC's decision is currently being challenged in several appeals and lawsuits. The TCPA regulates activities not only in our Servicing segment, but in our other businesses as well.

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There have been various legal and regulatory developments in Nevada regarding liens asserted by homeowner’s associations for unpaid assessments. In September 2014, the Nevada Supreme Court held that a HOA non-judicial foreclosure sale can extinguish a mortgage lender’s previously-recorded first deed of trust on a property if that foreclosure is to recover assessments categorized as super priority amounts. In June 2015, the U.S. District Court for the District of Nevada issued an opinion holding that federal law prohibits a HOA foreclosure proceeding from extinguishing a first deed of trust assigned to Fannie Mae. Recently, a Nevada state court reached the same conclusion. The Nevada Supreme Court also recently reversed a lower court summary judgment decision invalidating an HOA foreclosure sale on the basis that the HOA refused the lienholder’s tender of the super-priority portion of the lien and that the HOA sale was commercially unreasonable. The Nevada Supreme Court ruled that these were issues of fact and remanded for further proceedings. Additional litigation in both state and federal courts and appellate courts is pending with respect to these issues. Also, new legislation in Nevada, which became effective on October 1, 2015, requires HOAs to provide notice to lienholders relating to the default and foreclosure sale and also to provide creditors with a right to redeem the property for up to 60 days following an HOA foreclosure sale. In addition, credit owners may assert claims against servicers for failure to advance sufficient funds to cover unpaid HOA assessments and protect the credit owner’s interest in the subject property. We service numerous loans in Nevada and are involved in litigation and other legal proceedings affected by, or related to, these HOA matters.

Originations Segment

On November 20, 2013, the CFPB issued a final rule amending Regulation X of RESPA and Regulation Z of TILA integrating certain mortgage loan disclosure forms and requirements under RESPA and TILA. The rule became effective on October 3, 2015 and applies to covered transactions for which the creditor or mortgage broker receives an application on or after the effective date.

Reverse Mortgage Segment

In two Mortgagee Letters issued in 2015, HUD amended its requirements for non-borrowing spouses on HECM loans. Specifically, when a deceased HECM borrower is survived by a non-borrowing spouse, HUD clarified that a servicer may either foreclose in accordance with the contract as endorsed or utilize a Mortgagee Optional Election Assignment, whereby the servicer may assign an eligible HECM loan to HUD after the death of the last surviving borrower, subject to certain requirements.

Also in 2015, HUD published various mortgagee letters regarding “due and payable” policies and parameters, including the requirement for the mortgagee to report the death of the last borrower to HUD within 60 days of death, and loss mitigation options for HECM borrowers in default as the result of unpaid property charges such as taxes or hazard insurance premiums.

HUD issued additional mortgagee letters in 2016 providing further guidance on the above requirements, and we expect additional HUD guidance on these requirements in the future.

Company Website and Availability of SEC Filings

Our website can be found at www.walterinvestment.com . We make available free of charge on our website or provide a link on our website to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after those reports are electronically filed with, or furnished to, the SEC. To access these filings, go to our website, click on “Investor Relations” and then click on "SEC Filings." We also make available through our website other reports filed with or furnished to the SEC under the Exchange Act, including our proxy statements and reports filed by officers and directors under Section 16(a) of the Exchange Act, as well as our Code of Conduct and Ethics, our Corporate Governance Guidelines, and charters for our committees, including our Audit Committee, Compensation and Human Resources Committee, Nominating and Corporate Governance Committee and Compliance Committee. In addition, our website may include disclosure relating to certain non-GAAP financial measures that we may make public orally, telephonically, by webcast, by broadcast, or by similar means from time to time.

From time to time, we may use our website as a channel of distribution of material company information. Financial and other material information regarding the Company is routinely posted on and accessible at http://investor.walterinvestment.com .

Any information on our website or obtained through our website is not part of this Annual Report on Form 10-K.

Our Investor Relations Department can be contacted at 3000 Bayport Drive, Suite 1100, Tampa, Florida 33607, Attn: Investor Relations, telephone (813) 421-7694.

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ITEM 1A. RISK FACTORS

You should carefully review and consider the risks and uncertainties described below, which are risks and uncertainties that could materially adversely affect our business, prospects, financial condition, cash flows, liquidity, results of operations, our ability to pay dividends to our stockholders and/or our stock price. In addition, to the extent that any of the information contained in this Annual Report on Form 10-K constitutes forward-looking information, the risk factors set forth below are cautionary statements identifying important factors that could cause our actual results for various financial reporting periods to differ materially from those expressed in any forward-looking statements made by or on our behalf.

Legal and Regulatory Risks

If we fail to operate our business in compliance with both existing and future requirements, our business, financial condition, liquidity and/or results of operations could be materially and adversely affected.

Our business is subject to extensive regulation by federal, state and local governmental and regulatory authorities, including the CFPB, the FTC, HUD, the VA, the SEC and various state agencies that license, audit, investigate and conduct examinations of our mortgage servicing, origination, insurance, collection, reverse mortgage and other activities. Further, in recent years the policies, laws, rules and regulations applicable to our business have been rapidly evolving. It is likely that federal, state or local governmental authorities will continue to enact laws, rules or regulations that will result in changes in our business practices and increased costs of compliance. However, we are unable to predict whether any such changes will adversely affect our business.

In addition, the GSEs, Ginnie Mae and other business counterparties also subject us to periodic reviews and audits, and we routinely conduct our own internal reviews and audits. These various audits, reviews and examinations of our business and related activities sometimes uncover deficiencies in our compliance with our policies and other requirements to which we are subject. While we strive to investigate and remediate such deficiencies, there can be no assurance that any remedial measures we implement will ensure compliance with applicable policies, laws and regulations or be deemed sufficient by the GSEs, governmental authorities or other interested parties.

We devote substantial resources (including senior management time and attention) to regulatory compliance and regulatory inquiries, and we incur, and expect to continue to incur, significant costs in connection therewith. Our business, financial condition, liquidity and/or results of operations could be materially and adversely affected by the substantial resources (including senior management time and attention) we devote to, and the significant compliance costs we incur in connection with, compliance and regulatory inquiries, and any fines, penalties, restitution or similar payments we make in connection with resolving such matters.

Furthermore, our actual or alleged failure to comply with applicable federal, state and local laws and regulations and GSE, Ginnie Mae and other business counterparty requirements, or to implement and adhere to adequate remedial measures designed to address any identified compliance deficiencies, could lead to:


•	the loss or suspension of licenses and approvals necessary to operate our business;


•	limitations, restrictions or complete bans on our business or various segments of our business;


•	disqualification from participation in governmental programs, including GSE programs;


•	damage to our reputation;


•	governmental investigations and enforcement actions;


•	administrative fines and financial penalties;


•	litigation, including class action lawsuits;


•	civil and criminal liability;


•	termination of our servicing and sub-servicing agreements or other contracts;


•	loss of personnel who are targeted by prosecutions, investigations, enforcement actions or litigation;


•	a significant increase in compliance costs;


•	a significant increase in the resources (including senior management time and attention) we devote to regulatory compliance and regulatory inquiries;


•	an inability to access new, or a loss of current, liquidity and funding sources necessary to operate our business;


•	restrictions on mergers and acquisitions;

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•	impairment of assets;


•	conservatorship or receivership by order of a court or regulator; and


•	an inability to execute on our business strategy.

Any of these outcomes could materially and adversely affect our reputation, business, business prospects, financial condition, prospects, liquidity and/or results of operations.

The mortgage servicing industry has been and remains under increased scrutiny from state and federal regulators and other authorities, with particular attention directed at larger non-bank servicing organizations that have experienced recent and rapid growth such as Walter Investment. We cannot guarantee that any such scrutiny and investigations will not materially adversely affect us.

Our failure to comply with existing and future rules and regulations relating to the origination and servicing of residential loans, and/or more stringent enforcement of such rules and regulations by the CFPB, HUD and other federal agencies could result in enforcement actions, fines, penalties and reputational damage.

On July 21, 2010, the Dodd-Frank Act was signed into law for the express purpose of further regulating the financial services industry, including mortgage origination, sales, servicing and securitization. The CFPB, a federal agency established pursuant to the Dodd-Frank Act, officially began operation on July 21, 2011. The CFPB is charged, in part, with enforcing laws involving consumer financial products and services, including mortgage finance and servicing and reverse mortgages, and is empowered with examination, enforcement and rulemaking authority. While the full scope of the CFPB’s rulemaking and regulatory agenda relating to the mortgage servicing and origination industry is unclear and evolving, it is apparent that the CFPB has taken a very active role.

The Dodd-Frank Act established new standards and practices for mortgage originators and servicers, including determining prospective borrowers’ abilities to repay their mortgages, removing incentives for higher cost mortgages, prohibiting prepayment penalties for non-qualified mortgages, prohibiting mandatory arbitration clauses, requiring additional disclosures to potential borrowers, restricting the fees that mortgage originators may collect, new mortgage loan disclosures that integrate TILA and RESPA disclosures for certain covered transactions and other new requirements.

We are an approved non-supervised FHA mortgagee. In recent years, HUD and the DOJ have pursued actions against FHA-approved lenders, including RMS, under the False Claims Act, which imposes liability on any person who knowingly makes a false or fraudulent claim for payment to the U.S. government. Potential penalties are significant as these actions may result in treble damages and several large settlements have been entered into by HUD-approved mortgagees who have allegedly violated the False Claims Act. In addition, it is possible the DOJ could initiate actions against Fannie Mae- and Freddie Mac-approved lenders and servicers for alleged violations of the False Claims Act as a result of noncompliance with the GSE’s underwriting and other guidelines, given the FHFA conservatorship.

Regulations under the Dodd-Frank Act, bulletins issued by the CFPB pursuant to its authority, and other actions by the CFPB, HUD, the VA and other federal agencies could materially and adversely affect the manner in which we conduct our businesses, and have and could continue to result in heightened federal regulation and oversight of our business activities and in increased costs and potential litigation associated with our business activities. See Item 3. Legal Proceedings for additional information.

Our business is highly dependent on U.S. government-sponsored entities and agencies, and any changes in these entities or their current roles could materially and adversely affect our business, liquidity, financial position and/or results of operations.

The U.S. residential mortgage industry in general and our business in particular are highly dependent on the GSEs, particularly Fannie Mae, and Ginnie Mae. We receive compensation for servicing loans on behalf of the GSEs and Ginnie Mae. In addition, we sell mortgage loans to GSEs, which include mortgage loans in GSE guaranteed securitizations. We are also an approved non-supervised FHA mortgagee, VA approved lender and an approved issuer of HMBS, which are guaranteed by Ginnie Mae and collateralized by participation interests in HECMs, which are insured by the FHA. We derive material benefits from our relationships with GSEs and Ginnie Mae, as our ability to originate and sell mortgage loans under their programs reduces our credit exposure and mortgage inventory financing costs. In 2015, we earned approximately 45% of our total revenues from servicing Fannie Mae residential loans and approximately 56% and 35% of the mortgage loans our Originations segment sold were Fannie Mae conventional conforming loans and Ginnie Mae loans, respectively.

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There is significant uncertainty regarding the future of Fannie Mae and Freddie Mac, including with respect to how long they will continue to be in existence, the extent of their roles in the market and what forms they will have. On September 7, 2008, the FHFA placed Fannie Mae and Freddie Mac into conservatorship. As the conservator of Fannie Mae and Freddie Mac, the FHFA controls and directs the operations of Fannie Mae and Freddie Mac. There are several pending bills and proposals to revamp both Fannie Mae and Freddie Mac. The roles of Fannie Mae and Freddie Mac could be significantly reduced or eliminated and the nature of the guarantees could be considerably limited relative to historical practice. Any change in the traditional roles of Fannie Mae, Freddie Mac or the FHA could adversely affect our business and results of operations.

Any discontinuation of, or significant reduction in, the operation of the GSEs or agencies or any significant adverse change in the level of activity of the GSEs or agencies in the primary or secondary mortgage markets or in the underwriting criteria of the GSEs or agencies could materially and adversely affect our business, liquidity, financial position and results of operations. In addition, we would be materially adversely affected if our business relationship with Fannie Mae was to deteriorate in any significant respect.

We are subject to state licensing requirements and incur related substantial compliance costs, and our business would be adversely affected if we encountered a suspension or termination of our licenses.

Our operations are subject to regulation, supervision and licensing under various federal, state and local statutes, ordinances and regulations. Although we are not a bank or bank holding company, in most states in which we operate, one or more regulatory agencies regulate and enforce laws relating to non-bank mortgage servicing companies and/or mortgage origination companies such as Ditech Financial and RMS. These rules and regulations generally provide for licensing as a mortgage servicing company, mortgage origination company, debt collection agency and/or third party default specialist, as applicable, requirements as to the documentation, individual licensing of our employees and employee hiring background checks, licensing of independent contractors with whom we contract, restrictions on collection practices, disclosure and record-keeping requirements and enforcement of borrowers' rights. In certain states, we are subject to periodic examination by state regulatory authorities. Some states in which we operate require special licensing or provide extensive regulation of our business, and state regulators may have broad discretion to restrict our activities or to suspend approval or withdraw our licenses for non-compliance with applicable requirements. The failure to satisfy those and other regulatory requirements could result in a default under our servicing agreements, impact our ability to originate new loans and have a material adverse effect on our financial condition and operations.

Regulatory changes could increase our costs through additional or stricter licensing laws, disclosure laws or other regulatory requirements and could impose conditions to licensing that we or our personnel are unable to meet. Future legislation and changes in regulation may significantly increase the compliance costs on our operations or impact overall profitability of our business. This could make our business cost-prohibitive in the affected state or states and could materially affect our business.

Legal proceedings and related costs may increase and could adversely affect our financial results.

We are involved in various legal proceedings, including numerous matters that arise in the ordinary course of our business. Like other participants in our industry, we have been and may continue to be the subject of class action and other lawsuits and regulatory actions by state attorneys general and federal and state regulators and enforcement agencies.

Litigation and other proceedings may require that we pay attorneys' fees, settlement costs, damages, penalties or other charges, which could adversely affect our financial results and condition and damage our reputation.

Governmental and regulatory investigations, both state and federal, have increased in all areas of our business. The costs of responding to the investigations can be substantial. In addition, government-mandated changes, resulting from investigations or otherwise, to our loan origination and servicing practices have led, and may continue to lead, to higher costs and additional administrative burdens, such as record retention and informational obligations.

Pursuant to a final court order approved by the United States District Court for the District of Minnesota in April 2015 relating to matters arising from an FTC and CFPB investigation regarding Green Tree Servicing’s servicing practices, Green Tree Servicing agreed to detailed injunctions relating to its mortgage servicing and collection practices and other matters, including injunctions against future violations of certain consumer protection statutes and regulations, and it agreed to establish and maintain a comprehensive data integrity program reasonably designed to ensure the accuracy, integrity, and completeness of the data and other information about accounts that it services, collects, or sells. If Ditech Financial fails to comply with the order, it could be subject to additional sanctions, including actions for contempt, actions seeking additional fines, or new actions alleging violations of consumer protection statutes. The failure to comply with the order could have a material adverse effect on our reputation, business, business practices, prospects, results of operation, liquidity and financial condition.

See Item 3. Legal Proceedings for additional information.

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Risks Related to our Business

Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations.

We have substantial levels of indebtedness. As of December 31, 2015 , we had approximately $4.9 billion of total indebtedness outstanding, the majority of which was secured, including:


•	$1.4 billion of indebtedness under our 2013 Term Loan;


•	$538.7 million aggregate principal amount of Senior Notes;


•	$290.0 million aggregate principal amount of Convertible Notes;


•	$1.2 billion , in the aggregate, of indebtedness under various servicing advance financing structures and the Early Advance Reimbursement Agreement; and


•	$1.3 billion , in the aggregate, of indebtedness under various master repurchase agreements.

All of these amounts of indebtedness exclude (i) intercompany indebtedness, (ii) guarantees of affiliate debt and (iii) mortgage-backed debt and HMBS related obligations, which are non-recourse to us and our subsidiaries.

Our high level of indebtedness could have important consequences, including:


•	increasing our vulnerability to downturns or adverse changes in general economic, industry or competitive conditions and adverse changes in government regulations;


•	requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities;


•	exposing us to the risk of increased interest rates as certain of our unhedged obligations are at a variable rate of interest;


•	limiting our ability to make strategic acquisitions or causing us to make non-strategic divestitures;


•	limiting our ability to obtain additional financing for working capital, capital expenditures, product or service line development, debt service requirements, acquisitions and general corporate or other purposes; and


•	limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors with lower debt levels.

We and our subsidiaries have the ability to incur additional indebtedness in the future, subject to the restrictions contained in the agreements governing our indebtedness, including our 2013 Secured Credit Facilities and the Senior Notes Indenture. If new indebtedness is added to our current debt levels, the related risks that we now face could intensify.

We may not be able to generate sufficient cash to meet all of our obligations or service all of our indebtedness and may not be able to extend or refinance our indebtedness. If we are unable to do so, we may be forced to take other actions to satisfy our obligations, which may not be successful.

Our ability to make required payments on our debt and other obligations depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control, including the risk factors as set forth herein. We cannot assure you we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness or to meet our other obligations such as our obligations to repurchase HECM loans or our mandatory clean-up call obligations related to our Non-Residual Trusts.

In addition, we conduct a substantial part of our operations through our subsidiaries. Accordingly, repayment of our indebtedness is also dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us by dividend, debt repayment or otherwise. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness.

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Much of our debt is short-term and some of our facilities not committed, so we regularly seek to extend or refinance our existing indebtedness. Our ability to extend or refinance our indebtedness on favorable terms, or at all, is directly affected by global economic and financial conditions and other factors outside our control. In addition, optional prepayment of certain of our existing indebtedness is subject to our payment of prepayment premiums. In addition, our ability to incur secured indebtedness (which would generally enable us to achieve better pricing than the incurrence of unsecured indebtedness) depends in part on the value of our assets, which depends, in turn, on the strength of our cash flows and results of operations, and on economic and market conditions and other factors. From time to time in the recent past, we have had to obtain waivers or amendments of covenants in our debt agreements. If we are unable to obtain needed waivers or amendments in the future, we could experience material adverse consequences.

If our cash flows and capital resources are insufficient to fund our debt service and other obligations or we are unable to extend or refinance our indebtedness, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations. If our operating results and available cash are insufficient to meet our debt service and other obligations, we could face substantial liquidity problems and might be required to dispose of material assets or operations, such as the sale of mortgage servicing rights. We may not be able to consummate those dispositions, or the proceeds from the dispositions may not be adequate to meet any debt service and other obligations then due.

Despite our current debt levels, we may still incur substantially more debt or take other actions which would intensify the risks discussed above.

Despite our current consolidated debt levels, we and our subsidiaries are permitted to and may incur substantial additional debt in the future (including in connection with additional acquisitions), some of which may be secured, subject to the restrictions contained in our debt instruments. In addition, our 2013 Revolver provides for $125.0 million of borrowings, subject to customary borrowing conditions. Although the 2013 Secured Credit Facilities and the Senior Notes Indenture contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. Any such indebtedness could increase our leverage and the risks we face from indebtedness. We may also be permitted to take a number of other actions that could have the effect of diminishing our ability to make payments on our indebtedness when due.

Our debt agreements contain covenants that restrict our operations and may inhibit flexibility in operating our business and increasing revenues.

Our 2013 Secured Credit Facilities and the Senior Notes Indenture contain various covenants that limit our ability to engage in specified types of transactions. These covenants limit our and certain of our subsidiaries' ability to, among other things:


•	incur additional indebtedness or issue certain preferred shares;


•	pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments;


•	make certain investments;


•	sell or transfer assets;


•	create liens;


•	consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and


•	enter into certain transactions with our affiliates.

A breach of any of these covenants could result in a default and our lenders could elect to declare all amounts outstanding to be immediately due and payable and to terminate all commitments to extend further credit. If we were unable to repay those amounts, the secured lenders could proceed against the collateral granted to them to secure such indebtedness. There can be no assurance that we will have sufficient assets to repay amounts due under our 2013 Secured Credit Facilities and our other indebtedness.

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We also use warehouse facilities, structured financing arrangements, securitizations and other forms of term debt, in addition to transaction or asset-specific financing arrangements, to finance our business activities. Certain of these financing arrangements contain restrictions, covenants, and representations and warranties that, among other conditions, require us to satisfy specified financial and asset quality tests and may restrict our ability to engage in mergers or consolidations. In the past, including in 2015, we have obtained waivers or amendments from certain of our lenders in order to maintain compliance with certain covenants and other terms of our financing facilities, and we expect to seek waivers or amendments in the future if necessary. There is no assurance our lenders would consent to a waiver or amendment in the event of noncompliance or that such consent would not be conditioned upon the receipt of a cash payment, increased interest rates or other revised terms. If we fail to meet or satisfy any covenants or representations and warranties contained in our financing agreements, including the failure to maintain or satisfy requirements imposed by the GSEs or Ginnie Mae, we could be in default under these agreements and our lenders could elect to declare any and all amounts outstanding under the agreements immediately due and payable, enforce their respective interests against collateral pledged under such agreements, and restrict our ability to make additional borrowings. Many of our financing agreements contain cross-default provisions, such that if a default occurs under any one agreement, the lenders under our other agreements also could declare a default.

Our mortgage servicing business involves significant operational risks.

We have grown our mortgage servicing business rapidly over the past several years. Our mortgage servicing business involves, among other things, complex record-keeping, the handling of numerous payments each month, a significant amount of consumer contact and participation in foreclosure and bankruptcy proceedings, all of which are subject to detailed, prescriptive and sometimes unclear regulation and client requirements, and performing these tasks in a compliant, timely and profitable manner involves significant operational risk. We have suffered operational deficiencies due to the operational risks associated with servicing mortgages and/or our rapid expansion. If we continue to experience operational deficiencies in the future, this could adversely affect our results of operations and could also lead to potential violations of governmental regulations followed by enforcement penalties and fines.

When we acquire the rights to service mortgages, particularly GSE mortgages, we may incur liability that is the result of errors or violations of law attributable to prior originators and servicers of such mortgages to the extent applicable law or our contractual arrangements expose us to such liability, which is normally the case absent additional contractual arrangements that are negotiated on a transaction by transaction basis. In certain circumstances, we have obtained contractual arrangements meant to minimize our exposure to such liabilities. Such contractual arrangements can take the form of, for example, liability bifurcation agreements with the GSEs pursuant to which such liabilities are not assumed by us, or an indemnification pursuant to which we are indemnified for such liabilities by the former owners of the MSRs. There is no assurance that any such arrangements, even if obtainable, enforceable and collectible, will be sufficient in amount, scope or duration to fully offset the possible liabilities arising from a particular acquisition. Furthermore, there is no assurance that any such indemnification will cover losses resulting from claims that may be asserted against us by a GSE or others with respect to errors or violations that occurred prior to a particular acquisition by us.

The owners of loans we service or sub-service may, under certain circumstances, transfer our servicing rights or sub-servicing or otherwise terminate our servicing rights or sub-servicing contracts.

Under the terms of our master servicing agreements (including any amendments and addendums thereto) with GSEs and other clients, our clients have the right to terminate us as the servicer of the loans we service on their behalf if we default pursuant to the terms and conditions of the applicable servicing agreement. In addition, under certain of our agreements, the servicing on some or all of the loans can be transferred by our client, either with or without cause, and in certain of these instances without the receipt by us of consideration for the transferred servicing rights.

Our master servicing agreements with GSEs also require that we service in accordance with GSE servicing guidelines. Failure to comply with servicing standards, to maintain certain tangible net worth levels and satisfy other requirements could result in termination of our agreements with the GSEs. For example, under our mortgage selling and servicing contract (including the amendments and addendums thereto) with Fannie Mae, Fannie Mae has the ability to terminate such contract (i) without cause, subject to payment of an agreed-upon termination fee or (ii) with cause, in which case Fannie Mae would not be obligated to pay us a termination fee. Events that could allow Fannie Mae to terminate such contract for cause include, without limitation, a breach of the mortgage selling and servicing contract by us, our failure to comply with certain servicing guidelines, or a change in our financial status that, in Fannie Mae’s opinion, materially and adversely affects our ability to satisfactorily service mortgages.

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Under our sub-servicing contracts (including any amendments and addendums thereto), the primary servicers for whom we conduct sub-servicing activities have the right to terminate our sub-servicing rights with or without cause, with generally 60 to 90 days’ notice to us. In some instances, the sub-servicing contracts require payment to us of a deboarding fee upon transfer, while in other instances there is little to no consideration paid to us in connection with any transfer or other termination of sub-servicing rights. Additionally, from time to time, GSEs and other clients for whom we conduct sub-servicing activities could sell the mortgage servicing rights relating to some or all of the loans we sub-service for such client, which could lead to a termination of our sub-servicing engagement with respect to such mortgage servicing rights and a decrease in our sub-servicing revenue. We expect to continue to seek additional sub-servicing opportunities under terms and conditions, which could exacerbate these risks.

If we were to have our servicing or sub-servicing rights transferred or otherwise terminated on a material portion of our servicing portfolio, this could materially and adversely affect our business, financial condition, liquidity and results of operations.

We are required to service some of our mortgage loans in accordance with the National Mortgage Settlement standards, and our failure to meet those standards has harmed, and may continue to harm, our reputation and business.

In connection with our purchase of Fannie Mae MSRs from ResCap on January 31, 2013, we agreed to service the mortgage loans for which the MSRs were acquired in accordance with the servicing standards set forth in a Consent Judgment, the National Mortgage Settlement, filed on April 4, 2012 in a legal proceeding involving ResCap as a party. Accordingly, we are subject to periodic testing by the Monitor, who was appointed under the Consent Judgment and charged with responsibility to determine whether the servicers subject to the NMS are complying with the NMS servicing standards and satisfying the requirements of the Consent Judgment. In the past, we have not passed the testing of certain metrics and submitted various corrective action plans and remediation plans to the Monitor. More recently, the Monitor has filed various reports with the applicable court, stating that Ditech Financial had passed all metrics tested relating to 2014 testing periods and in the calendar quarters ended March 31, 2015 and June 30, 2015. We expect the Monitor to file its final report relating to the quarter ended September 30, 2015 in the near-term. Although we have devoted considerable resources to ensuring compliance with the NMS requirements, there is no assurance that our corrective action plans will continue to be successful and that we will pass all remaining metrics and remediation tested. If we were to fail a metric, we may be obligated to indemnify ResCap in the event ResCap is fined or penalized as a result of such testing results.

We are required to make servicing advances that can be subject to delays in recovery or may not be recoverable in certain circumstances.

During any period in which a borrower is not making payments, we are required under some of our mortgage servicing agreements to advance our own funds to meet contractual principal and interest remittance requirements for credit owners. In addition, we must pay property taxes, insurance premiums, legal expenses and make other protective advances on behalf of the borrower. We also advance funds to maintain, repair and market real estate properties on behalf of credit owners. Our obligation to make such advances may increase in connection with any future acquisitions of servicing portfolios and any additional sub-servicing contracts. In certain situations, our contractual obligations may require us to make certain advances for which we may not be reimbursed.

Servicing advances are generally recovered when a mortgage loan delinquency is resolved, the loan is repaid or refinanced, a liquidation occurs, or through the agency claim process. Regulatory actions that lengthen the foreclosure process may increase the amount of servicing advances we are required to make, lengthen the time it takes for us to be reimbursed for such advances and increase the costs incurred by us in connection with such advances. In certain circumstances, we have been, and we may in the future be, unable to collect reimbursement for advances if we do not seek reimbursement in a timely manner or have the proper documentation supporting the advance. We have experienced delays in the collection of reimbursements for advances in the past. Additional or significant delays in our ability to collect advances could adversely affect our liquidity, and our inability to be reimbursed for advances would adversely affect our business, financial condition or results of operations.

When we purchase mortgage servicing rights from prior servicers, we may also acquire outstanding servicer and protective advances related to those rights. As of December 31, 2015, approximately $500 million of our net servicer and protective advances had been acquired by us from prior servicers. In our agreements under which we have acquired MSRs, the prior servicer generally represents that the advances we have acquired from them are eligible for reimbursement by the credit owner and indemnifies us for breaches of that representation. However, the prior servicer’s indemnification obligation with respect to advances generally expires four years after the acquisition date (or at another specific date), and in order to claim indemnification we may have to satisfy other conditions precedent. Our ability to file indemnity claims with the prior servicer before the expiration date and to meet other conditions precedent may be affected by factors outside our control. For example, if we submit claims for advance reimbursement from the credit owner and such credit owner fails to resolve such claims before the expiration date elapses, we may be unable to seek indemnity for such claims. As a result, despite the indemnification arrangements, we may experience losses relating to advances that we have acquired from prior servicers.

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Our failure to renew one or more of our advance financing facilities or warehouse facilities, or any loss of a material amount of borrowing capacity under such facilities, could have a material adverse effect on our business, financial condition, liquidity or results of operations.

We have financing facilities that we depend upon to finance, on a short-term basis, our servicer advances and our residential loan originations and repurchase activities, including the repurchase of HECMs out of Ginnie Mae securitization pools. Each of these facilities is typically subject to renewal every year and contains provisions that in certain circumstances could prevent us from utilizing any unused capacity under such facility and/or that could accelerate our repayment of amounts outstanding under such facility. Only servicing advances and residential loans (including repurchased residential loans) that meet certain eligibility requirements as defined in the relevant financing facility agreements are eligible to be financed using such facilities. The financing facilities require us to maintain a good standing relationship with the GSEs, and if any contract governing such relationship were terminated, it would limit or eliminate our ability to fund our borrowing needs. In addition, amounts borrowed under our servicing advance facilities are due on a fixed date (unless extended) and, in certain circumstances, we may be required to repay such amounts before we have been reimbursed for the related advances.

Our failure to renew one or more of these financing facilities on terms acceptable to us, the acceleration of amounts due under such facilities or our loss of a material amount of borrowing capacity under such facilities, could have a material adverse effect on our business, financial condition, liquidity or results of operations.

Our failure to maintain or grow our servicing business could have a material adverse effect on our business, financial position, results of operations and cash flows.

Our servicing portfolio is subject to "run-off," meaning that mortgage loans serviced by us may be repaid at maturity, prepaid prior to maturity, or liquidated through foreclosure, deed-in-lieu of foreclosure or other liquidation process. While we seek to replenish our servicing portfolio through the addition of sub-servicing contracts and through our own MSR originations and acquisitions of MSRs from third parties, we cannot assure you that we will be successful in maintaining the size of our servicing portfolio.

Our ability to maintain or grow our servicing business may depend, in part, on our ability to acquire servicing rights from third parties. This depends on many factors, including the willingness and ability of the current owners of servicing rights to transfer such servicing rights, and in most cases GSEs and/or government authorities granting consent for such transfers. In part because of consumer complaints about problems arising from servicing transfers, regulatory scrutiny of, and interference with, such transfers has increased. We do not have any control over the scope and/or timing of the current owners’ efforts to transfer servicing.

There is significant competition in the non-bank servicing sector for servicing rights made available for purchase, and the supply of such portfolios may decline as the opportunity created by the financial crisis ebbs. These and other factors could increase the price we pay for such portfolios or reduce sub-servicing margins, which could have a material adverse effect on our business, financial condition and results of operations. In determining the purchase price we are willing to pay for servicing rights and the fee for which we are willing to accept sub-servicing engagements, management makes certain assumptions regarding various factors, many of which are beyond our control, including, among other things:


•	origination vintage and geography;


•	loan to value ratio;


•	stratification of FICO scores;


•	the rates of prepayment and repayment within the underlying pools of mortgage loans;


•	projected rates of delinquencies, defaults and liquidations;


•	future interest rates;


•	our cost to service the loans;


•	incentive and ancillary fee income; and


•	amounts of future servicing advances.

The methodology used to determine the purchase price we are willing to pay for servicing rights and the fee for which we are willing to accept sub-servicing engagements is complex and management’s assumptions about matters affecting pricing may prove to be inaccurate. As a result, we may not be successful in completing acquisitions on favorable terms or at all or we may overpay or not realize anticipated benefits of acquisitions in our business development pipeline.

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In addition, although we are currently planning to try to increase our sub-servicing activities, we may not be successful in achieving this goal. If we fail to do so, our servicing portfolio could decline or we may be required to invest our capital in acquiring servicing rights.

Changes in prepayment rates on loans we service due to changes in interest rates, government mortgage programs or other factors could result in reduced earnings or losses.

Changes in prepayment rates on loans we service could result in reduced earnings or losses. Many factors beyond our control affect prepayment rates, including changes in interest rates and government mortgage programs. Many borrowers can prepay their mortgage loans through refinancings when mortgage rates decrease. Any increase in prepayments could reduce our servicing portfolio and have a significant impact on our net servicing revenue and fees. For example:


•	If prepayment speeds increase, our net servicing revenue and fees will decline more rapidly than anticipated because of the greater than expected decrease in the number of loans or unpaid balance on which those fees are based.

•

Amortization of servicing rights carried at amortized cost is a significant reduction to net servicing revenue and fees. Since we amortize servicing rights in proportion to total expected income over the life of a portfolio, an increase in prepayment speeds leads to increased amortization as we revise downward our estimate of total expected income. Faster prepayment speeds will also result in higher compensating interest expense.

•

The change in fair value of servicing rights carried at fair value can have a significant impact on net servicing revenue and fees. We base the price we pay for servicing rights and assess the value of our servicing rights on, among other things, our projection of servicing-related cash flows from the related pool of mortgage loans. Our expectation of prepayment speeds is a significant assumption underlying those cash flow projections. If prepayment speeds increase more than expected, we may be required to write down the value of our servicing rights, which would have a negative impact on our net servicing revenue and fees.

A downgrade in our servicer ratings could have an adverse effect on our business, financial condition or results of operations.

Standard & Poor's and Moody's rate us as a residential loan servicer. These ratings may be downgraded in the future. Any such downgrade could adversely affect our business, financial condition or results of operations, as well as our ability to finance servicing advances and maintain our status as an approved servicer by Fannie Mae and Freddie Mac. In particular, the Fannie Mae selling and servicing guide and certain of our servicing agreements require that we maintain a servicer rating of at least “average” (or the corresponding equivalent rating). Our failure to maintain favorable or specified ratings may cause our termination as servicer and further impair our ability to consummate future servicing transactions, which could have an adverse effect on our business, financial condition or results of operations.

An increase in delinquency rates could have a material adverse effect on our business, financial position, results of operations and cash flows.

Delinquency rates can have a significant impact on our revenues and expenses and the value of our MSRs. For example, an increase in delinquencies may result in lower revenues because, for some GSE and other business, we may only collect servicing fees for performing loans. Additionally, while increased delinquencies may generate higher ancillary fees, including late fees, these fees are not likely to be recoverable in the event that the related loan is liquidated and are generally only recognized as revenue upon collection. In addition, an increase in delinquencies lowers the interest income we receive on cash held in collection and other accounts. Delinquencies can also increase our liability for servicing advances, as we may be required to advance certain payments early in a delinquency, which could impact our liquidity. An increase in delinquencies will result in a higher cost to service due to the increased time and effort required to collect payments from delinquent borrowers.

The enforcement of consent orders by certain federal banking agencies against the largest servicers related to foreclosure practices could impose additional compliance costs on our servicing business.

On April 13, 2011, the federal banking agencies overseeing certain aspects of the mortgage market entered into consent orders with 14 of the largest mortgage servicers in the United States regarding foreclosure practices. The enforcement actions require the servicers, among other things, to: (i) correct deficiencies in residential loan servicing and foreclosure practices; (ii) make significant modifications in practices for residential loan servicing and foreclosure processing, including communications with borrowers and limitations on dual-tracking, which occurs when servicers continue to pursue foreclosure during the loan modification process; (iii) ensure that foreclosures are not pursued once a residential loan has been approved for modification and to establish a single point of contact for borrowers throughout the loan modification and foreclosure processes; and (iv) establish robust oversight and controls pertaining to their third-party vendors, including outside legal counsel, that provide default management or foreclosure services.

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On February 28, 2013, the consent orders for 13 of the 14 servicers were amended to memorialize an agreement that had been reached in January 2013 with the Office of the Comptroller of the Currency and the Federal Reserve Board to provide more than $9.3 billion in payments and other assistance to borrowers, including $3.6 billion in cash payments and $5.7 billion in other assistance such as loan modifications and forgiveness of deficiency judgments.

Although we are neither a direct party to these consent orders nor a banking organization, we have become subject to certain aspects of the consent orders to the extent: (i) we sub-service loans for the servicers that are parties to the consent orders; (ii) our clients require that we comply with certain aspects of the consent orders; or (iii) we otherwise find it prudent to comply with certain aspects of the consent orders. Further, certain laws, rules and regulations enacted or promulgated since the consent orders were entered into impose requirements on us that are similar to certain aspects of the consent orders. The settlement also adds requirements for loss mitigation programs, including restrictions on the imposition of force-placed lender insurance and other activities designed to keep borrowers in their homes. In addition, in connection with certain of our acquisitions, we agreed to certain monitoring of our servicing of these assets, which is required under the consent orders. Changes to our servicing practices could increase compliance costs for our servicing business, which could materially and adversely affect our financial condition or results of operations.

Lender-placed insurance is under increased scrutiny by regulators and, as a result of recent changes, income from commissions for our insurance business has been reduced.

Under certain circumstances, when borrowers fail to provide hazard insurance on their residences, the owner or servicer of the loan may place such insurance to protect the collateral and passes on the premium to the borrower. Our insurance agency has acted as an agent for this purpose, placing the insurance coverage with a third-party carrier for which the agency may earn a commission.

Effective June 1, 2014, mortgage servicers and their affiliates may not receive commissions or other forms of compensation in connection with lender-placed insurance on GSE loans. Certain states have also imposed or proposed restrictions on the ability of mortgage servicers and their affiliates to receive commissions in connection with lender-placed insurance on mortgage loans relating to residential property located in the applicable state, and additional states may impose the same or similar restrictions in the future. Due to these and other recent regulatory developments surrounding lender-placed insurance policies, our sales commissions related to lender-placed insurance policies have decreased. In the event a potential sale of substantially all of our insurance business is consummated, we will no longer receive any sales commissions from such insurance.

Additionally, Ditech Financial is subject to several putative class action lawsuits that allege Ditech Financial and its affiliates improperly received benefits from lender-placed insurance providers in the form of commissions for work not performed, services provided at a reduced cost, and expense reimbursements that did not reflect the actual cost of the services rendered. See Item 3. Legal Proceedings for additional information, including a discussion of the settlement agreement reached between the parties in one such matter, which agreement remains subject to court approval.

We may be subject to liability for potential violations of predatory lending, antidiscrimination statutes and/or servicing laws, which could adversely impact our results of operations, financial condition and business.

Various federal, state and local laws are designed to discourage predatory lending, discrimination based on certain characteristics and other servicing practices. HOEPA prohibits inclusion of certain provisions in residential loans that have mortgage rates, origination costs or prepayment penalties in excess of prescribed levels and requires that borrowers be given certain disclosures prior to origination. Some states have enacted, or may enact, similar laws or regulations, which in some cases impose restrictions and requirements greater than those in HOEPA. In addition, under the anti-predatory lending laws of some states, the origination of certain residential loans, including loans that are not classified as "high cost" loans under applicable law, must satisfy a net tangible benefits test with respect to the related borrower. This test may be highly subjective and open to interpretation. As a result, a court may determine that a residential loan, for example, does not meet the test even if the related originator reasonably believed that the test was satisfied. Failure of residential loan originators or servicers to comply with these laws, to the extent any of their residential loans are or become part of our mortgage-related assets, could subject us, as a loan originator, as a servicer or as an assignee or purchaser, in the case of acquired loans, to monetary penalties and could result in the borrowers rescinding the affected residential loans. Lawsuits have been brought in various states making claims against originators, servicers, assignees and purchasers of high cost loans for violations of state law. Named defendants in these cases have included numerous participants within the secondary mortgage market. If our loans are found to have been originated in violation of predatory or abusive lending laws, we could incur losses, which could materially and adversely impact our results of operations, financial condition and business.

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Antidiscrimination statutes, such as the Fair Housing Act and the Equal Credit Opportunity Act, prohibit creditors from discriminating against loan applicants and borrowers based on certain characteristics, such as race, religion and national origin. Various federal regulatory agencies and departments, including the DOJ and CFPB, take the position that these laws apply not only to intentional discrimination, but also to neutral practices that have a disparate impact on a group that shares a characteristic that a creditor may not consider in making credit decisions, or protected classes. These regulatory agencies, as well as consumer advocacy groups and plaintiffs’ attorneys, are becoming more aggressive in asserting claims that the practices of lenders and loan servicers result in a “disparate impact” on protected classes. While the U.S. Supreme Court recently confirmed that the “disparate impact” theory applies to cases brought under the Fair Housing Act, it is still unclear whether the theory applies under ECOA. To the extent that the “disparate impact” theory continues to apply, we may be faced with significant administrative burdens in attempting to comply and potential liability for failures to comply. Furthermore, many industry observers believe that the CFPB’s “ability to pay” rule will have the unintended consequence of having a disparate impact on protected classes. Specifically, it is possible that lenders that originate only “qualified mortgages,” such as Ditech Financial, may be exposed to discrimination claims under a disparate impact theory.

The expiration of, or changes to, government mortgage modification, refinancing or other programs could adversely affect future revenues.

Under HAMP, HARP and similar government programs, a participating servicer may be entitled to receive financial incentives in connection with any mortgage refinancing or modification plans it enters into with eligible borrowers and subsequent success fees to the extent that a borrower remains current in any agreed upon loan modification. We participate in and have dedicated numerous resources to HAMP and HARP, benefiting from fees and from significant loan originations volumes. Changes in legislation or regulation regarding such loan modification programs and changes in the requirements necessary to qualify for refinancing mortgage loans may impact the extent to which we participate in and receive financial benefits from such programs, or may increase the expense of our participation in such programs. We expect refinancing and modification volumes, revenues and margins to decline in 2016 as we believe peak HARP and HAMP refinancings and modifications have already occurred. In addition, the HAMP and HARP programs are currently scheduled to terminate on December 31, 2016, which could have a significant adverse effect on our originations volumes.

We cannot accurately predict the amount of incentive payments and ancillary fees we will earn on our servicing portfolio.

We earn incentive payments and ancillary fees in connection with servicing our residential loan portfolio. The amount of such payments and fees, and the timing of our receipt of such payments and fees, is dependent upon many factors, some of which are not in our control. For example, some of our servicing contracts contain periodic performance payments that are determined by formulas and/or are tied to the performance of our competitors. Inasmuch as we have little or no insight into the performance of our competitors, it is difficult, if not impossible in some instances, to predict with any certainty the amount of these incentive payments, if any. We also earn certain ancillary fees, such as, for example, late fees, the amount of which can vary significantly from period to period, in most instances due to circumstances over which we have no control. In certain circumstances, payments and ancillary fees can be, and have been, modified or eliminated by a credit owner with little or no notice to us. If certain of our assumptions relating to the amount of incentive payments or ancillary fees we expect to earn and collect in a given period prove to be materially inaccurate, due to the reduction or elimination of any of these fees or otherwise, or if regulators challenge the legitimacy of any of these fees, this could adversely affect our business, financial condition, liquidity and results of operations.

We may not be able to continue to grow our loan originations business, which could adversely affect our business, financial condition and results of operations.

Our mortgage originations business is conducted principally through our correspondent lending, consumer retention and consumer direct channels. Our correspondent lending channel, in which we purchase closed mortgage loans from a network of lenders in the marketplace, grew significantly in 2015. We face intense competition and generally have historically experienced lower margins in the correspondent lending channel as compared to the margins we have experienced in our consumer retention and consumer direct channels. Through our consumer retention channel, we refinance or provide new loans to borrowers whose loans we currently service. The volume of originations in the consumer retention channel has depended in large part upon the HARP program, which is scheduled to expire in 2016. We believe peak HARP refinancing volumes occurred in prior periods. We are seeking to increase the volume of new purchase money mortgages we originate in the consumer direct channel by using sales lead aggregators, television and internet marketing to reach new borrowers and special campaigns to attract existing servicing customers. In early 2016, we closed our consumer retail originations channel. If we are unable to expand our origination channels successfully, including building our correspondent lending channel and developing our consumer direct channel, this could have a material adverse effect on our business, financial position, results of operations and cash flows.

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Our mortgage originations business is highly dependent upon programs administered by Fannie Mae, Freddie Mac and Ginnie Mae. Failure to maintain our relationships with each of Fannie Mae, Freddie Mac and Ginnie Mae could materially and adversely affect our business, financial position, results of operations and cash flows.

Our ability to generate revenues in our mortgage originations business is highly dependent on programs administered by Fannie Mae, Freddie Mac, Ginnie Mae and others that facilitate the issuance of mortgage-backed securities in the secondary market. Our status as a Fannie Mae, Freddie Mac and Ginnie Mae approved seller/servicer is subject to compliance with each entity’s respective selling and servicing guidelines and failure to adhere to such guidelines could result in the unilateral termination or suspension of our status as an approved seller/servicer.

During 2015, substantially all of our originated mortgage loans were sold to, or were sold pursuant to programs sponsored by, Fannie Mae, Freddie Mac or Ginnie Mae. We also derive other material financial benefits from our relationships with Fannie Mae, Freddie Mac and Ginnie Mae, including the assumption of credit risk by these entities on loans included in mortgage-backed securities in exchange for our payment of guarantee fees. Our failure to maintain our relationship with Fannie Mae, Freddie Mac or Ginnie Mae could materially and adversely affect our business, financial position, results of operations and cash flows.

Additionally, the FHFA has in the past increased guarantee fees that the GSEs charge lenders for guaranteeing the timely payment of principal and interest on their mortgage-backed securities and we cannot assure you that they will not increase such fees in the future. Any future increases in guarantee fees or changes to their structure may generally raise lending costs and restrict the availability of credit, particularly to higher risk borrowers, and negatively affect our ability to grow, and the performance of, both our servicing and lending businesses.

We depend on the accuracy and completeness of information about borrowers and counterparties and any misrepresented information could adversely affect our business, financial condition and results of operations.

In deciding whether to extend credit or to enter into other transactions with borrowers and counterparties, we may rely on information furnished to us by or on behalf of borrowers and counterparties, including financial statements and other financial information. We also may rely on representations of borrowers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. If any of this information is intentionally or negligently misrepresented and such misrepresentation is not detected prior to loan funding, the value of the loan may be significantly lower than expected. Whether a misrepresentation is made by the loan applicant, the mortgage broker, correspondent lender, another third party or one of our employees, we generally bear the risk of loss associated with the misrepresentation. Our correspondent lenders are generally obligated to repurchase any loans they have sold to us for which a misrepresentation has been made. We, however, may not have detected or may not detect all misrepresented information in our loan originations or from our business clients. In addition, our correspondent lenders may not have sufficient resources to repurchase loans for which a misrepresentation has been made. Therefore, any such misrepresented information could adversely affect our business, financial condition and results of operations.

We may be required to make indemnification payments relating to, and/or repurchase, mortgage loans we sold or securitized, or will sell or securitize, if our representations and warranties relating to these mortgage loans are inaccurate at the time the loan is sold or securitized, or under other circumstances.

To finance our future operations, we generally sell or securitize the loans that we originate or purchase through our correspondent and other channels. Our contracts relating to mortgage loans we sell or securitize contain provisions that require us, under certain circumstances, to make indemnification payments relating to, and/or repurchase, such loans. Our indemnification and repurchase obligations vary contract by contract, but such contracts typically require us to either make an indemnification payment and/or repurchase a loan if, among other things:


•	our representations and warranties relating to the loan are materially inaccurate, including but not limited to representations concerning loan underwriting, regulatory compliance or property appraisals;


•	we fail to secure adequate mortgage insurance within a certain period after closing; or


•	the borrower fails to make certain initial loan payments due to the purchaser.

We believe that our maximum repurchase exposure under such contracts is the origination UPB of all mortgage loans we have sold or securitized. At December 31, 2015 , our maximum exposure to repurchases due to potential breaches of representations and warranties was $51.3 billion and was based on the original UPB of loans sold from the beginning of 2013 through the year ended December 31, 2015, adjusted for voluntary payments made by the borrower on loans for which we perform servicing. To recognize the potential mortgage loan repurchase or indemnification losses, we have recorded a reserve of $23.1 million at December 31, 2015 . In 2015 , we incurred losses of $1.4 million related to such indemnification and repurchase activity. If our mortgage loan originations increase in the future, our indemnification and repurchase requests may also increase. During periods of elevated mortgage payment delinquency rates and declining housing prices, originators have experienced, and may in the future continue to experience, an increase in loan

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repurchase and indemnification claims due to actual or alleged breaches of representations and warranties in connection with the sale or servicing of mortgage loans. The estimate of our loan repurchase and indemnification liability is subjective and based upon our projections of the future incidence of loan repurchase and indemnification claims, as well as loss severities. Losses incurred in connection with loan repurchase and indemnification claims may be in excess of our estimates (including our estimate of liabilities we will assume in an acquisition and factor into our purchase price). Our reserve for indemnification and repurchase obligations may increase in the future. If we are required to make indemnification payments with respect to, and/or repurchase, mortgage loans that we originate and sell or securitize in amounts that result in losses that exceed our reserve, this could adversely affect our business, financial condition and results of operations.

From time to time, the FHFA proposes revisions to the GSEs' standard representation and warranty framework, under which the GSEs require lenders to repurchase mortgage loans under certain circumstances. For example, in January 2013, the FHFA sought to relieve lenders of obligations to repurchase loans that had clean payment histories for 36 months. In May 2014, the FHFA and the GSEs announced additional clarifications. We cannot predict how recent or future changes to the GSEs' representation and warranty framework will impact our business, liquidity, financial condition and results of operations.

We originate, securitize and service reverse loans, which subjects us to additional risks and could have a material adverse effect on our business, liquidity, financial condition and results of operations.

We originate, securitize and service reverse loans. The reverse loans business is subject to substantial risks, including market, credit, interest rate, liquidity, operational, reputational and legal risks. A reverse loan (e.g., a HECM) is a loan available to seniors aged 62 or older that allows homeowners to borrow money against the value of their home. We depend on our ability to securitize reverse loans, subsequent draws, mortgage insurance premiums and servicing fees, and our liquidity and profitability would be adversely affected if our ability to access the securitization market were to be limited or if the margins we earn in connection with such securitizations were to be reduced. Defaults on reverse loans leading to foreclosures may occur if borrowers fail to meet maintenance obligations, such as payment of taxes or home insurance premiums, or fail to meet occupancy requirements. An increase in foreclosure rates may increase our cost of servicing. We may become subject to negative publicity in the event that defaults on reverse mortgages lead to foreclosures or evictions of homeowners.

As a reverse loan servicer, we are responsible for funding any payments due to borrowers in a timely manner, remitting to credit owners interest accrued, paying for interest shortfalls, and funding advances such as taxes and home insurance premiums. During any period in which a borrower is not making required real estate tax and property insurance premium payments, we may be required under servicing agreements to advance our own funds to pay property taxes, insurance premiums, legal expenses and other protective advances. We also may be required to advance funds to maintain, repair and market real estate properties. In certain situations, our contractual obligations may require us to make certain advances for which we may not be reimbursed. In addition, in the event a reverse loan serviced by us defaults or becomes delinquent, the repayment to us of the advance may be delayed until the reverse loan is repaid or refinanced or liquidation occurs. A delay in our ability to collect advances may adversely affect our liquidity, and our inability to be reimbursed for advances could adversely affect our business, financial condition or results of operations. Advances are typically recovered upon weekly or monthly reimbursement or from securitization in the market. We could receive requests for advances in excess of amounts we are able to fund, which could materially and adversely affect our liquidity. All of the above factors could have a material adverse effect on our business, liquidity, financial condition and results of operations.

Material changes to the laws, regulations, rules or practices applicable to reverse loan programs operated by FHA, HUD or Ginnie Mae, or a loss of our approved status under such programs, could adversely affect our reverse mortgage segment.

The reverse loan industry is largely dependent upon the FHA, HUD and government entities like Ginnie Mae. There can be no guarantee that any or all of these entities will continue to participate in the reverse mortgage industry or that they will not make material changes to the laws, regulations, rules or practices applicable to reverse loan programs. The principal reverse loan product we originate is the HECM, an FHA-insured loan that must comply with FHA and other regulatory requirements. The FHA regulations governing the HECM product have changed from time to time. For example, the FHA, on January 30, 2013, consolidated its standard fixed-rate reverse loan program with its fixed-rate saver program, which limits the amounts borrowers can draw. On September 3, 2013, the FHA announced changes to the HECM program, pursuant to authority under the Reverse Mortgage Stabilization Act, signed into law on August 9, 2013. The changes impact initial mortgage insurance premiums and principal limit factors, impose restrictions on the amount of funds that senior borrowers may draw down at closing and during the first 12 months after closing, and require a financial assessment for all HECM borrowers to ensure they have the capacity and willingness to meet their financial obligations and the terms of the reverse loan. Key components of the financial assessment include a credit history and property charge payment history analysis, a cash flow/residual income analysis, and an analysis of compensating factors and extenuating circumstances to determine if the applicant is eligible for a HECM loan. In addition, the changes require borrowers to set aside a portion of the loan proceeds they receive at closing (or withhold a portion of monthly loan disbursements) for the payment of property taxes and homeowners insurance based on the results of the financial assessment. The new HECM requirements generally became effective on September 30, 2013, with the new financial assessment requirements and funding requirements for the payment of property charges taking effect on April

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27, 2015. The FHA also amended or clarified requirements related to both HECM originations and servicing through a series of issuances in 2013, 2014 and 2015. The new requirements relate to advertising, restrictions on loan provisions, limitations on payment methods, new underwriting requirements, revised principal limits, revised financial assessment and property charge requirements, the treatment of non-borrowing spouses and “due and payable” policies and parameters. These changes adversely affected the volumes and margins of our new reverse loan originations in 2014 and 2015 while also increasing the costs required to attract new borrowers of reverse loans. Although the industry has experienced a decrease in volume subsequent to implementing the new financial assessment requirements, it is still unclear the amount attributable to the related, compulsory operating changes and what impact these changes will have on future volumes of reverse loan originations.

In addition, our statuses as an approved non-supervised FHA mortgagee and an approved Ginnie Mae issuer and servicer are subject to compliance with FHA’s and Ginnie Mae’s respective regulations, guides, handbooks, mortgagee letters and all participants’ memoranda. If a Ginnie Mae issuer defaults under its program obligations to Ginnie Mae, Ginnie Mae has a right to terminate the approved status of the issuer, seize the mortgage servicing rights of such issuer without compensation (which includes the right to be reimbursed for outstanding advances from the FHA), demand indemnification for its losses, and impose administrative sanctions, which may include civil money penalties. Each subsidiary of the Company that is a Ginnie Mae issuer has also entered into a cross default agreement with Ginnie Mae which provides that, upon the default by a subsidiary under an applicable Ginnie Mae program agreement, Ginnie Mae will have the right to (i) declare a default on all other pools and loan packages of that subsidiary and all pools and loan packages of any affiliated Ginnie Mae issuer that executed the cross default agreement and (ii) exercise any other remedies available under applicable law against each of the affiliated Ginnie Mae issuers.

Any discontinuation of, or significant reduction or material change in, the operation of the FHA, HUD or government entities like Ginnie Mae, or the loss of our approved non-supervised FHA mortgagee or Ginnie Mae issuer or servicer status, could have a material adverse effect on our overall business and our financial position, results of operations and cash flows.

If our estimated liability with respect to interest curtailment obligations arising out of servicing errors is inaccurate, or additional errors are found, and we are required to record additional material amounts, there may be an adverse impact on our results of operations or financial condition.

Subsequent to the completion of our acquisition of RMS, we discovered a failure by RMS to record certain liabilities to HUD, FHA and/or credit owners related to servicing errors by RMS. FHA regulations provide that servicers meet a series of event-specific timeframes during the default, foreclosure, conveyance, and mortgage insurance claim cycles. Failure to timely meet any processing deadline may stop the accrual of debenture interest otherwise payable in satisfaction of a claim under the FHA mortgage insurance contract and the servicer may be responsible to HUD for debenture interest that is not self-curtailed by the servicer, or for making the credit owner whole for any interest curtailed by FHA due to not meeting the required event-specific timeframes.

The Company had a curtailment obligation liability of $107.3 million at December 31, 2015 related to the foregoing which reflects management’s best estimate of the probable incurred claim. The curtailment liability is recorded in payables and accrued liabilities on the consolidated balance sheets. The Company assumed $46.0 million of this liability through the acquisition of RMS, which resulted in a corresponding offset to goodwill and deferred tax assets. During the year ended December 31, 2015 , the Company recorded a provision, net of expected third-party recoveries, related to the curtailment liability of $37.3 million . The Company has potential estimated maximum financial statement exposure for an additional $139.8 million related to similar claims, which are reasonably possible, but which the Company believes are primarily the responsibility of third parties (e.g., prior servicers and/or credit owners). The Company’s potential exposure to a substantial portion of this additional risk relates to the possibility that such third parties may claim that the Company is responsible for the servicing liability or that the Company exacerbated an existing failure by the third party. The actual amount, if any, of this exposure is difficult to estimate and requires significant management judgment as curtailment obligations continue to be an industry issue. While we are pursuing, and will continue to pursue, mitigation efforts to reduce both the direct exposure and the reasonably possible third-party-related exposure, we cannot assure you that any such efforts will be successful.

We had a curtailment obligation liability of $8.2 million at December 31, 2015 related to mortgage loan servicing which we assumed through an acquisition of servicing rights. We are obligated to service the related mortgage loans in accordance with Ginnie Mae requirements, including repayment to credit owners for advances and interest curtailment. The curtailment liability is recorded in payables and accrued liabilities on the consolidated balance sheets.

We cannot assure you that we will not discover additional facts resulting in changes to our estimated liability. To the extent we are required to record additional amounts as liabilities, there may be an adverse impact on our results of operations or financial condition.

See Item 3. Legal Proceedings for additional information.

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If the market for HECM loans and other reverse loans does not grow, our business, liquidity, financial condition and results of operations may be materially adversely affected.

The growth of our business depends, in part, on growth in the demand for HECM loans and other reverse loans. During the second quarter of 2015, we revised our multi-year forecast for the reverse mortgage business, which incorporated lower projected revenues and reflected changes related to current market trends and other expectations about the anticipated operating results of the reverse mortgage business. If growth in demand for reverse loans does not occur, as a result of regulatory changes or other factors which we cannot predict, our business, liquidity, financial condition and results of operations may be materially adversely affected.

We may be unable to fund our HECM repurchase obligations, and/or face delays in our ability to make such repurchases, or we may be unable to assign repurchased HECM loans to the FHA, which could have a material adverse effect on our business, liquidity, financial condition and results of operations.

We issue HMBS collateralized by HECM loans we originate. Under the Ginnie Mae HMBS program, we are required to repurchase a HECM loan from an HMBS pool we have issued when the outstanding principal balance of the HECM loan is equal to or greater than 98% of the maximum claim amount. There can be no assurance that we will have access to the funding necessary to satisfy our repurchase obligations, particularly if our actual repurchase obligations materially exceed our estimated repurchase obligations. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources for additional information.

When we repurchase a HECM loan that is not in default from an HMBS pool, we must fund such repurchase until we assign the repurchased HECM loan to the FHA and receive reimbursement, which generally occurs within 60 days of repurchase (assuming the repurchased loan continues to perform during such time). If a repurchased HECM loan goes into default (e.g., if the borrower has failed to pay real estate taxes or property insurance premiums) following our repurchase of such loan from an HMBS pool but prior to our assignment of such loan to the FHA, or is in default at the time we repurchase such loan from an HMBS pool, the FHA will not accept such loan for assignment and we must continue to fund such loan until the default is cured or we otherwise satisfy FHA requirements relating to foreclosure of the loan and sell the underlying property. Thus, we are exposed to financing risk when we must repurchase a HECM loan from an HMBS pool, which risk is exacerbated if such loan is in default at the time of repurchase or goes into default prior to our assignment of such loan to the FHA. In addition, we may be exposed to risk of loss of principal when a HECM loan goes into default, which risk is exacerbated for defaulted loans we seek to foreclose upon. Foreclosure of a HECM loan can be an expensive and lengthy process which could have a substantial negative effect on our anticipated return on the foreclosed HECM loan, especially in circumstances where we make an appraisal based claim to the FHA with respect to a HECM loan because we have not been able to liquidate the underlying property for an acceptable price within the timeframe established by the FHA.

During 2015, our repurchases amounted to approximately $333.2 million , with a balance of approximately $233.6 million at the end of 2015, an increase from approximately $114.7 million at the end of 2014. We expect our repurchase obligations to increase through 2016 and in subsequent years, but the amount of repurchase obligations we will incur in any specific period in the future is uncertain, as it will be affected by, among other things, the rate at which borrowers draw down on amounts available under their HECM loans. In addition, the balance of funds we must commit to repurchases (and the related cost of such funding) will depend in part on how long we must hold and service such loans after repurchasing them. As our funding needs increase for repurchased HECMs, we will seek to enter into new or increased lending facilities to provide a portion of such funds, however we cannot be certain such new facilities will be available or that our existing facilities will be extended.

When we securitize HECM loans into HMBS, we are required to covenant and warrant to Ginnie Mae, among other things, that the HECM loans related to each participation included in the HMBS are eligible under the requirements of the National Housing Act and the Ginnie Mae Mortgage-Backed Securities Guide, and that we will take all actions necessary to continue to ensure the HECM loans continued eligibility. The Ginnie Mae HMBS program requires that we repurchase the participation related to any HECM loan that does not meet the requirements of the Ginnie Mae Mortgage-Backed Securities Guide. Significant repurchase requirements could materially adversely affect our business, financial condition, liquidity and results of operations.

If we are unable to fund our HECM repurchase obligations, for example because new or increased lending facilities are not available or in the event that our repurchase obligations in any period significantly exceed our expectations, or face delays in our ability to make such repurchases, or are unable, to assign repurchased HECM loans to the FHA, our business, liquidity, financial condition and results of operations could be materially adversely affected.

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We may suffer operating losses as a result of not being fully reimbursed for certain costs and interest expenses on our HECM loans, or if we fail to originate or service such loans in conformity with the FHA’s guidelines.

The FHA will reimburse us for most HECM loan losses incurred by us, up to the maximum claim amount, if, upon disposition of the collateral a deficit exists between the value of the collateral and the loan balance. However, there are certain costs and expenses that the FHA will not reimburse. Additionally, the FHA pays the FHA debenture rate instead of the loan interest rate from the date the loan becomes due and payable to the date of disposition of the property or final appraisal. In the event the pass through rate we are required to pay to an HMBS investor exceeds the FHA debenture rate, we will suffer an interest rate loss.

Additionally, if we fail to service HECM loans in conformity with the FHA’s guidelines, we could lose our right to service the portfolio or be subject to financial penalties that could affect our ability to receive loss claims or result in the curtailment of FHA debenture rate reimbursement. The FHA may also at its discretion request indemnification from a lender on a possible loss on a HECM loan if it determines that the loan was not originated or serviced in conformity with its rules or regulations.

If we are unable to fund our tail commitments or securitize our HECM loans (including tails), this could have a material adverse effect on our business, financial condition, liquidity and results of operations.

We originate HECM loans with the intention of securitizing them, and we expect to securitize principal additions to a borrower’s HECM loan balance (for mortgage insurance premiums, servicing fees, interest, and borrower draws on lines-of-credit), which we refer to collectively as “tails.” We currently fund tails on a short-term basis with cash flows from operations until such tails are securitized. As of December 31, 2015 , our unfunded tail commitment was $1.3 billion . If our operating cash flows are insufficient to fund our tail commitments and we are unable to obtain one or more alternative sources of funding for such commitments, or we are unable to securitize our HECM loans (including future tails), this could have a material adverse effect on our business, financial condition, liquidity and results of operations.

Our common stock price may experience substantial volatility which may affect your ability to sell our common stock at an advantageous price.

The market price of our common stock has been and may continue to be volatile. For example, the closing market price of our common stock on the New York Stock Exchange fluctuated between $9.63 per share and $24.35 per share during 2015 and may continue to fluctuate. The volatility may affect your ability to sell our common stock at an advantageous price. Market price fluctuations in our common stock may be due to reduced liquidity resulting from industry and regulatory matters, highly concentrated ownership of our common stock, acquisitions, dispositions or other material public announcements, along with a variety of additional factors including, without limitation, those set forth under these “Risk Factors.”

A downgrade in our credit ratings could negatively affect our cost of, and ability to access, capital.

Our ability to obtain adequate and cost effective financing depends in part on our credit ratings. Our credit ratings may be subject to revision, including downgrade, or withdrawal at any time by the assigning rating agency. A negative change in our ratings outlook or any downgrade in our current credit ratings by the rating agencies that provide such ratings could adversely affect our cost of borrowing and/or access to sources of liquidity and capital. Such a downgrade could adversely affect our access to the public and private credit markets and increase the costs of borrowing under available credit lines, which could adversely affect our business, financial condition, results of operations and cash flows.

Changes in interest rates could materially and adversely affect our volume of mortgage loan originations or reduce the value of our MSRs, either of which could have a material adverse effect on our business, financial position, results of operations or cash flows.

Historically, rising interest rates have generally been associated with a lower volume of loan originations and lower pricing margins due to a disincentive for borrowers to refinance at a higher interest rate, while falling interest rates have generally been associated with higher loan originations and higher pricing margins, due to an incentive for borrowers to refinance at a lower interest rate. Accordingly, increases in interest rates could materially and adversely affect our mortgage loan origination volume, which could have a material and adverse effect on our overall business, consolidated financial position, results of operations or cash flows. In addition, changes in interest rates may require us to post additional collateral under certain of our financing arrangements and derivative agreements, which could impact our liquidity.

Changes in interest rates are also a key driver of the performance of our mortgage servicing segment as the values of our MSRs are highly sensitive to changes in interest rates. Historically, the value of our MSRs has increased when interest rates rise, as higher interest rates lead to decreased prepayment rates, and has decreased when interest rates decline, as lower interest rates lead to increased prepayment rates. As a result, substantial volatility in interest rates materially affects our mortgage servicing business, as well as our consolidated financial position, results of operations and cash flows.

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In addition, rising interest rates could (i) require us to post additional collateral under certain of our financing arrangements, which could adversely impact our liquidity, (ii) negatively impact our reverse loan originations and servicing businesses, particularly our volume of originations, the amount we earn in connection with the securitization of HECM loans (including tails) that were originated in a lower interest rate environment, and our exposure with respect to a portion of the accrued interest on HECM loans that go into default while in an HMBS pool, (iii) negatively impact our mortgage loan origination volumes, and (iv) have other material and adverse effects on our business, consolidated financial position, results of operations or cash flows, such as, for example, generally making it more expensive for us to fund our various businesses. In a declining interest rate environment, we have been, and could in the future be, required to post additional collateral under certain of our derivative arrangements, which could adversely impact our liquidity.

Failure to hedge effectively against interest rate changes may adversely affect results of operations.

The Company currently uses derivative financial instruments, primarily forward sales commitments, to manage exposure to interest rate risk and changes in the fair value of IRLCs and mortgage loans held for sale. The Company may also enter into commitments to purchase MBS as part of its overall hedging strategy. In the future, we may seek to manage our exposure to interest rate changes by using interest rate hedging agreements, such as interest swaps and options. The nature and timing of hedging transactions may influence the effectiveness of a given hedging strategy, and no hedging strategy is consistently effective. Poorly designed strategies, improperly executed and documented transactions or inaccurate assumptions could actually increase our risks and losses. In addition, hedging strategies involve transaction and other costs. Our hedging strategies and the derivatives that we use may not offset the risks of interest rate volatility and our hedging transactions may result in or magnify losses. Furthermore, interest rate derivatives may not be available at all, or at favorable terms, particularly during economic downturns. Any of the foregoing risks could adversely affect our business, financial condition or results of operations.

Additional risks related to hedging include:


•	interest rate hedging can be expensive, particularly during periods of rising and volatile interest rates;


•	available interest rate hedges may not correspond directly with the interest rate risk for which protection is sought;


•	the duration of the hedge may not match the duration of the related liability;


•	the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction;


•	the party owing money in the hedging transaction may default on its obligation to pay; and


•	a court could rule that such an agreement is not legally enforceable.

Technology failures or cyber-attacks against us or our vendors could damage our business operations and reputation, increase our costs, and result in significant third party liability.

The financial services industry as a whole is characterized by rapidly changing technologies. System disruptions and failures caused by fire, power loss, telecommunications failures, unauthorized intrusion (e.g., cyber-attack), computer viruses and disabling devices, natural disasters and other similar events, may interrupt or delay our ability to provide services to our borrowers. Security breaches, acts of vandalism and developments in computer intrusion capabilities could result in a compromise or breach of the technology that we use to protect our borrowers' personal information and transaction data. Systems failures could result in reputational damage to our business and cause us to incur significant costs and third party liability, and this could adversely affect our business, financial condition or results of operations. See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Cybersecurity for additional information relating to cybersecurity.

We are in the process of transitioning our mortgage servicing business to MSP, a mortgage and consumer loan servicing platform, and problems with the transition to, or implementation of, MSP could interfere with our business and operations and adversely affect our financial condition.

We are in the process of transitioning our mortgage servicing business to MSP, a mortgage and consumer loan servicing platform. We have invested, and will continue to invest, significant capital and human resources in the transition to and implementation of MSP. We have experienced decreases in productivity and increased costs as our employees implement and become familiar with the new system. Any disruptions, delays or deficiencies in such efforts, particularly any disruptions, delays or deficiencies that impact our operations, including loss of customer data, could have a material adverse effect on our business and operations. Furthermore, the transition to and implementation of MSP has been more costly than we initially anticipated and our current estimates for the remaining cost and time required to completely transition to and implement MSP may be wrong. If we are unable to successfully transition to and implement MSP as planned, our financial position, results of operations and cash flows could be adversely impacted.

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We may be unable to protect our technology or keep up with the technology of our competitors.

We rely on proprietary and licensed software, and other technology, proprietary information and intellectual property to operate our business and to provide us with a competitive advantage. However, we may be unable to maintain and protect, or prevent others from misappropriating or otherwise violating, our rights in such software, technology, proprietary information and intellectual property. In addition, competitors may be able to develop software and technologies that are as good as or better than our software and technology without violating our rights, which could put us at a disadvantage. Our failure to maintain, protect and continue to develop our software, technology, proprietary information and intellectual property could adversely affect our business, financial condition or results of operations.

Any failure of our internal security measures or those of our vendors, or breach of our privacy protections, could cause harm to our reputation and subject us to liability.

In the ordinary course of our business, we receive and store certain confidential nonpublic information concerning borrowers including names, addresses, social security numbers and other confidential information. Additionally, we enter into third party relationships to assist with various aspects of our business, some of which require the exchange of confidential borrower information. Breaches of security may occur through intentional or unintentional acts by those having authorized or unauthorized access to our systems or our clients' or counterparties' confidential information, including employees and customers, as well as hackers, and through electronic, physical or other means. If such a compromise or breach of our security measures or those of our vendors occurs, and confidential information is misappropriated, it could cause interruptions in our operations and/or expose us to significant liabilities, reporting obligations, remediation costs and damage to our reputation. Significant damage to our reputation or the reputation of our clients could negatively impact our ability to attract or retain clients. Any of the foregoing risks could adversely affect our business, financial condition or results of operations.

While we have obtained insurance to cover us against certain cyber security risks and information theft, there can be no guarantee that all losses will be covered or that the insurance limits will be sufficient to cover such losses.

We have obtained insurance coverage that protects us against losses from unauthorized penetration of company technology systems, employee theft of customer and/or company private information, and company liability for third party vendors who mishandle company information. This insurance includes coverage for third party losses as well as costs incidental to a breach of company systems such as notification, credit monitoring and identity theft resolution services. However, there can be no guarantee that every potential loss due to cyber-attack or theft of information has been insured against, nor that the limits of the insurance we have acquired will be sufficient to cover all such losses.

Our vendor relationships subject us to a variety of risks.

We have vendors that, among other things, provide us with financial, technology and other services to support our businesses. With respect to vendors engaged to perform activities required by servicing or originations criteria or regulatory requirements, we are required to take responsibility for assessing compliance with the applicable servicing or originations criteria or regulatory requirements for the applicable vendor and are required to have procedures in place to provide reasonable assurance that the vendor’s activities comply in all material respects with servicing or originations criteria or regulatory requirements applicable to the vendor. In the event that a vendor’s activities do not comply with the servicing or originations criteria or regulatory requirements, it could materially negatively impact our business. In addition, we rely on third-party vendors for certain services important or critical to our business, such as Black Knight Financial Services, LLC, with whom we've signed a long-term Loan Servicing Agreement for the use of MSP. If our current vendors, particularly the vendors that provide important or critical services to us, were to stop providing such services to us on acceptable terms, we may be unable to procure such services from other vendors in a timely and efficient manner and on acceptable terms, or at all. Further, we may incur significant costs to resolve any such disruptions in service and this could adversely affect our business, financial condition and results of operations.

Negative public opinion could damage our reputation and adversely affect our earnings.

Reputational risk, or the risk to our business, earnings and capital from negative public opinion, is inherent in our business. Negative public opinion can result from our actual or alleged conduct in any number of activities, including lending, loan servicing, debt collection practices, and corporate governance, and from actions taken by government regulators and community organizations in response to those activities. Negative public opinion can also result from media coverage, whether accurate or not. Negative public opinion can adversely affect our ability to attract and retain customers, counterparties and employees and can expose us to litigation and regulatory action. Although we take steps to minimize reputation risk in dealing with our customers and communities, this risk will always be present in our organization.

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The industry in which we operate is highly competitive, and, to the extent we fail to meet these competitive challenges or otherwise do not achieve our strategic initiatives, it could have a material adverse effect on our business, financial position, results of operations or cash flows.

We operate in a highly competitive industry that could become even more competitive as a result of economic, legislative, regulatory or technological changes. We compete with a great number of competitors in the mortgage banking market for both the servicing and originations businesses as well as in our reverse mortgage and complementary businesses. Key competitors include financial institutions and non-bank servicers and originators. Many of our competitors, particularly banks, are substantially larger and have considerably greater financial, technical and marketing resources, and typically have access to greater financial resources and lower funding costs. All of these factors place us at a competitive disadvantage. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more favorable relationships than we can. Competition to service mortgage loans may result in lower margins. Because of the relatively limited number of servicing customers, our competitive position is impacted by our ability to differentiate ourselves from our competitors through our servicing platform and our failure to meet the expectations of any one of such customers could materially impact our business. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition or results of operations.

From time to time, we announce various strategic initiatives for our business, including without limitation initiatives relating to acquisitions and dispositions of mortgage servicing rights and other assets, changes in the mix of our fee-for-service business, balance sheet assessment and optimization, reducing our debt, developing and growing certain portions of our business, the use of capital partners, cost savings and operational efficiencies, and other matters. Our ability to achieve such initiatives is dependent upon numerous factors, many of which are not in our control. Our failure to achieve some or all of our strategic initiatives in a timely and efficient manner, or at all, could have a material adverse effect on our business, financial condition, liquidity and results of operations.

We may not realize all of the anticipated benefits of past, pending or potential future acquisitions or joint venture investments, which could adversely affect our business, financial condition and results of operations.

We periodically explore opportunities to grow our business through the acquisition of MSRs and other businesses and assets. Our ability to realize the anticipated benefits of past, pending or potential future acquisitions will depend, in part, on our ability to integrate these acquisitions into our business and is subject to certain risks, including:


•	our ability to successfully combine the acquired businesses with ours;


•	whether the combined businesses will perform as expected;


•	the possibility that we inaccurately value assets or businesses we acquire, that we pay more than the value we will derive from the acquisitions, or that the value declines after the acquisition;


•	the reduction of our cash available for operations and other uses;


•	the disruption to our operations inherent in making numerous acquisitions over a relatively short period of time;


•	the disruption to the ongoing operations at the acquired businesses;


•	the incurrence of significant indebtedness to finance our acquisitions;


•	the assumption of certain known and unknown liabilities of the acquired businesses;


•	uncoordinated market functions;


•	unanticipated issues and delays in integrating the acquired business or any information, communications or other systems;


•	unanticipated incompatibility of purchasing, logistics, marketing and administration methods;


•	unanticipated liabilities associated with the acquired business, assets or joint venture;


•	additional costs or capital requirements beyond forecasted amounts;


•	delays in the completion of acquisitions, including due to delays in or the failure to obtain approvals from governmental or regulatory entities;


•	lack of expected synergies, failure to realize the anticipated benefits we expect to realize from the acquisition or joint venture, or failure of the assets or businesses we acquire to perform at levels meeting our expectations;


•	not retaining key employees; and


•	the diversion of management's attention from ongoing business concerns.

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If we are not able to successfully combine the acquired businesses and assets with ours within the anticipated time frame, or at all, the anticipated benefits of the acquisitions may not be realized fully, or at all, or may take longer to realize than expected, the combined businesses and assets may not perform as expected, and the value of our common stock may be adversely affected.

Further, prices at which acquisitions can be made fluctuate with market conditions. We have experienced times during which acquisitions could not be made in specific markets at prices we considered acceptable, and we expect that we will experience this condition in the future. In addition, in order to finance an acquisition we may borrow funds, thereby increasing our leverage and diminishing our liquidity, or raise additional capital, which could dilute the interests of our existing shareholders. Also, it is possible that we will expend considerable resources in the pursuit of an acquisition that, ultimately, either does not close or is terminated. If we incur additional indebtedness to finance an acquisition, the acquired business may not be able to generate sufficient cash flow to service that additional indebtedness.

We cannot assure you that future acquisitions or joint ventures will not adversely affect our results of operations and financial condition, or that we will realize all of the anticipated benefits of any future acquisitions or joint ventures.

We use, and will continue to use, analytical models and data in connection with the pricing of new business and the valuation of our future investments, and any incorrect, misleading or incomplete information used in connection therewith may subject us to potential risks.

Given the complexity of our proposed future investments and strategies, we rely, and will continue to rely, on analytical models and information and data, some of which is supplied by third parties. Should our models or such data prove to be incorrect or misleading, any decision made in reliance thereon exposes us to potential risks. Some of the analytical models that we use or will be used by us are predictive in nature. The use of predictive models has inherent risks and may incorrectly forecast future behavior, leading to potential losses. We also use and will continue to use valuation models that rely on market data inputs. If incorrect market data is input into a valuation model, even a tested and well-respected valuation model, it may provide incorrect valuations and, as a result, could provide adverse actual results as compared to the predictive results.

We use estimates in determining the fair value of certain assets. If our estimates prove to be incorrect, we may be required to write down the value of these assets which could adversely affect our earnings.

We estimate the fair value for certain assets (including MSRs) and liabilities by calculating the present value of expected future cash flows utilizing assumptions that we believe are used by market participants. The methodology used to estimate these values is complex and uses asset-specific collateral data and market inputs for interest and discount rates and liquidity dates.

Valuations are highly dependent upon the reasonableness of our assumptions and the predictability of the relationships that drive the results of our valuation methodologies. If prepayment speeds increase more than estimated, delinquency and default levels are higher than anticipated or other events occur, we may be required to write down the value of certain assets, which could adversely affect our earnings.

Accounting rules for certain of our transactions continue to evolve, are highly complex, and involve significant judgments and assumptions. Changes in accounting interpretations or assumptions could impact our financial statements.

Accounting rules for our business, such as the rules for determining the fair value measurement and disclosure of financial instruments, are highly complex and involve significant judgment and assumptions. These complexities could lead to a delay in the preparation of financial information and the delivery of this information to our stockholders. Changes in accounting interpretations or assumptions related to fair value could impact our financial statements and our ability to timely prepare our financial statements.

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Impairment charges relating to our goodwill or other intangible assets could adversely affect our financial performance.

At December 31, 2015 , we had $367.9 million of goodwill and $84.0 million of other intangible assets. We evaluate goodwill for impairment at the reporting unit level as of October 1 of each year, or whenever events or circumstances indicate potential impairment. A significant decline in our reporting unit performance, increases in equity capital requirements, increases in the estimated cost of debt or equity, a significant adverse change in the business climate or a sustained decline in the price of our common stock may necessitate our taking charges in the future related to the impairment of our goodwill. We incurred impairment charges of $207.6 million and $82.3 million during 2015 and 2014, respectively. The goodwill evaluation performed during the fourth quarter of 2015 indicated the estimated implied fair value of the Servicing reporting unit's goodwill at the evaluation date was less than its book value, therefore requiring an impairment charge of $151.0 million . The goodwill evaluations performed in the second quarters of 2015 and 2014 indicated the estimated implied fair value of the Reverse Mortgage reporting unit’s goodwill at each evaluation date was less than its book value, therefore requiring impairment charges of $56.5 million and $82.3 million , respectively. As a result of these goodwill impairment charges, the Reverse Mortgage reporting unit no longer has goodwill. If we determine that our goodwill or another intangible asset is impaired, we may be required to record additional significant charges to earnings that could adversely affect our financial condition and operating results.

If we do not maintain effective internal controls over financial reporting, we could fail to accurately report our financial results, which may materially adversely affect our business and financial condition.

Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal controls over financial reporting and have our independent auditors issue their own opinion on our internal controls over financial reporting. Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. A material weakness is defined by the standards issued by the Public Company Accounting Oversight Board as a deficiency or a combination of deficiencies in internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

It is possible that material weaknesses and/or control deficiencies could be identified by our management or by our independent auditing firm in the future, or may occur without being identified. The existence of any material weakness or significant deficiency could require management to devote significant time and incur significant expense to remediate such weakness or deficiency and management may not be able to remediate the same in a timely manner. Any such weakness or deficiency, even if remediated quickly, could result in regulatory scrutiny or lead to a default under our indebtedness. Furthermore, any material weakness requiring disclosure could cause investors to lose confidence in our reported financial condition, materially affect the market price and trading liquidity of our debt instruments, reduce the market value of our common stock and otherwise materially adversely affect our business and financial condition.

Our business could suffer if we fail to attract and retain our senior managers and a highly skilled workforce.

Our future success will depend on our ability to identify, hire, develop, motivate and retain highly qualified personnel for all areas of our organization, in particular skilled managers, loan servicers, debt default specialists, loan officers and underwriters. Trained and experienced personnel are in high demand and may be in short supply in some areas. Many of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment. In addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. We may not be able to attract, develop and maintain an adequate skilled workforce necessary to operate our businesses and labor expenses may increase as a result of a shortage in the supply of qualified personnel. If we are unable to attract and retain such personnel, we may not be able to take advantage of acquisitions and other growth opportunities that may be presented to us and this could materially affect our business, financial condition and results of operations.

The experience of our senior managers is a valuable asset to us. Our management team has significant experience in the residential loans originations and servicing industry. The loss of the services of our senior managers could adversely affect our business.

Our reputation, business and operations could be adversely affected if there are regulatory compliance failures related to our investment adviser activities.

One of our subsidiaries, GTIM, is a registered investment adviser under the Advisers Act. GTIM provides investment advisory and related services to investment advisory clients. A failure by GTIM to comply with the requirements of the Advisers Act, including record-keeping, advertising and operating requirements, disclosure obligations and prohibitions on fraudulent activities, could result in investigations, sanctions and reputational damage.

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We will have to manage the conflicts of interests inherent in the investment allocation commitments we have made to WCO and our own investment objectives. Our failure to deal appropriately with conflicts of interest or maintain our relationship with WCO could damage our reputation, expose us to regulatory risks, and adversely affect our business.

WCO’s investment objectives include the acquisition of WCO Target Assets, which include servicing-related assets of the type that we have historically acquired (or retained) and that we may be interested in acquiring (or retaining) in the future. We have agreed to provide WCO with certain rights of first offer in certain investment opportunities in WCO Target Assets, which could limit our ability to acquire (or retain) such assets ourselves. We have adopted an allocation policy pursuant to which WCO will have certain rights of first offer to invest in certain percentages of WCO Target Assets identified by us or our affiliates while WCO’s management agreement with GTIM is in effect. In addition, we have specific contractual commitments with WCO relating to certain WCO Target Assets we may originate or otherwise create in the future. In order to comply with the allocation policy and these contractual commitments to WCO, we have adopted internal compliance policies and procedures.

Mr. Dixon, our Vice Chairman, Chief Executive Officer and President, also serves as Chief Executive Officer, Chief Investment Officer and a member of the board of directors of WCO. Mr. Dixon may have conflicts between his duties to us and our subsidiaries and his duties to WCO. Mr. Dixon also owns shares of us but not WCO, which could create the perception of additional conflicts of interest regarding investment decisions for WCO and us. The management team of WCO is comprised of persons that are also officers and/or employees of Walter and its subsidiaries, and such persons may have conflicts between their duties to us and our subsidiaries and their duties to WCO. Mr. O’Brien, our former Chief Executive Officer and a current member of our Board of Directors, served on the board of directors of WCO until his voluntary resignation from such board, effective December 31, 2014. Conflicts of interest may also exist or develop regarding various matters, including decisions about the allocation of specific investment opportunities between us on the one hand and WCO on the other, in situations involving sales of assets by us to WCO, and in situations where we may seek to service mortgage assets held by WCO. We attempt to manage such potential conflicts through our practices, our internal compliance policies and procedures, our allocation policy and the agreements we negotiated with WCO, although no assurance can be given that conflicts will not nevertheless arise.

Appropriately dealing with conflicts of interest is complex and difficult and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with one or more potential or actual conflicts of interest. It is possible that potential or perceived conflicts could give rise to disagreements with WCO or regulatory enforcement actions as a result of GTIM’s obligations as the investment advisor to WCO or result in a breach of the restrictive covenants contained in our debt agreements. Regulatory scrutiny of, or litigation in connection with, conflicts of interest could have a material adverse effect on our reputation, hamper our ability to raise additional funds, discourage counterparties to do business with us, and damage our investment in WCO and could have a material adverse effect on our business, financial condition, liquidity and results of operations.

We have entered into various transactions with WCO and expect to continue doing so as part of our strategy. If we are unable to maintain relationships with WCO, or if WCO is unable to obtain additional funding on favorable terms, or at all, we may be unable to execute on our strategy and our business could be materially adversely affected. Additionally, WCO’s qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which only limited judicial and administrative authorities exist, and even a technical or inadvertent violation could jeopardize WCO’s REIT qualification, adversely affect our relationship with WCO and expose us to liability.

Risks Related to Our Organization and Structure

Certain provisions of Maryland law and our stockholder rights plan could inhibit a change in our control.

Certain provisions of the MGCL may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change in our control under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then prevailing market price of such shares. We are subject to the "business combination" provisions of the MGCL that, subject to limitations, prohibit certain business combinations between us and an "interested stockholder" (defined generally as any person who beneficially owns, directly or indirectly, 10% or more of our then outstanding voting stock or an affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of our then outstanding stock) or an affiliate thereof for five years after the most recent date on which the stockholder becomes an interested stockholder and, thereafter, imposes special appraisal rights and supermajority stockholder voting requirements on these combinations. These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by the board of directors of a corporation prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the statute, our Board of Directors has by resolution exempted business combinations between us and any other person, provided that the business combination is first approved by our Board of Directors. This resolution, however, may be altered or repealed in whole or in part at any time. If this resolution is repealed, or our Board of Directors does not otherwise approve a business combination, this statute may discourage others from trying to acquire control of us and may increase the difficulty of consummating any offer.

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The "control share" provisions of the MGCL provide that "control shares" of a Maryland corporation (defined as shares which, when aggregated with all other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in the election of directors) acquired in a "control share acquisition" (defined as the acquisition of issued and outstanding "control shares," subject to certain exceptions) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding votes entitled to be cast by the acquirer of control shares, our officers and our employees who are also our directors. Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our shares of stock. There can be no assurance that this provision will not be amended or eliminated at any time in the future.

The "unsolicited takeover" provisions of the MGCL permit our Board of Directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to implement certain provisions if we have a class of equity securities registered under the Exchange Act and at least three independent directors. These provisions may have the effect of inhibiting a third party from making an acquisition proposal for us or of delaying, deferring or preventing a change in our control under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then current market price.

Our Board of Directors is divided into three classes of directors. Directors of each class are elected for three-year terms upon the expiration of their current terms, and each year one class of directors will be elected by our stockholders. The staggered terms of our directors may reduce the possibility of a tender offer or an attempt at a change in control, even though a tender offer or change in control might be in the best interests of our stockholders.

In addition, on June 29, 2015, our Board of Directors adopted a stockholder rights plan, commonly referred to as a "poison pill," in response to accumulations of our common stock in the market. The stockholder rights plan is intended to deter the acquisition by a person or group of persons acting in concert of beneficial ownership of more than 20% of the outstanding shares of our common stock without negotiation with, and the approval of, our Board of Directors by making such an acquisition prohibitively expensive for the acquirer(s). Although we have amended the rights plan to permit certain stockholders to acquire up to 25% of the outstanding shares of our common stock, the rights plan, which is scheduled to expire on June 29, 2016, applies equally to all current and future stockholders. The rights plan is not intended to deter offers that our Board of Directors determines are in the best interests of our stockholders; however, it may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which our stockholders might receive a premium for their shares.

We may issue shares of preferred stock with greater rights than our common stock.

Our charter authorizes our Board of Directors to issue one or more classes or series of preferred stock and set the terms of the preferred stock without seeking any further approval from our stockholders. Any preferred stock that is issued may rank ahead of our common stock in terms of dividends, liquidation rights, or voting rights. If we issue preferred stock, it may adversely affect the market price of our common stock, decrease the amount of earnings and assets available for distribution to holders of our common stock or adversely affect the rights and powers, including voting rights, of the holders of our common stock.

Our authorized but unissued shares of common and preferred stock may prevent a change in our control.

Our charter authorizes us to issue additional authorized but unissued shares of common or preferred stock. In addition, our Board of Directors may, without stockholder approval, classify or reclassify any unissued shares of common or preferred stock into other classes or series of stock and set the preferences, rights and other terms of the classified or reclassified shares. As a result, our Board of Directors may establish a class or series of shares of common or preferred stock that could delay or prevent a transaction or a change in control that might involve a premium price for our shares of common stock or otherwise be in the best interest of our stockholders.

Risks Related to Our Relationship with Walter Energy

We may become liable for U.S. federal income taxes allegedly owed by the Walter Energy consolidated group for 2009 and prior tax years. We cannot predict how Walter Energy’s recent bankruptcy filing in Alabama may affect the outcome of these matters.

We may become liable for U.S. federal income taxes allegedly owed by the Walter Energy consolidated group for 2009 and prior tax years. Under federal law, each member of a consolidated group for U.S. federal income tax purposes is severally liable for the federal income tax liability of each other member of the consolidated group for any year in which it was a member of the consolidated group at any time during such year. Certain former subsidiaries of the Company (which were subsequently merged or otherwise consolidated with certain current subsidiaries of the Company) were part of the Walter Energy consolidated tax group prior to our spin-off from Walter Energy on April 17, 2009. As a result, if the Walter Energy consolidated group’s federal income taxes (including penalties and interest) for such tax years are not discharged by Walter Energy or otherwise, we could be liable for such amounts.

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Walter Energy Tax Matters . According to Walter Energy’s Form 10-Q, or the Walter Energy Form 10-Q, for the quarter ended September 30, 2015 (filed with the SEC on November 5, 2015) and certain other public filings made by Walter Energy in its bankruptcy proceedings currently pending in Alabama, described below, certain tax matters with respect to certain tax years prior to and including the year of the Company's spin-off from Walter Energy remain unresolved, including certain tax matters relating to: (i) a “proof of claim” for a substantial amount of taxes, interest and penalties with respect to Walter Energy’s fiscal years ended August 31, 1983 through May 31, 1994, which was filed by the IRS in connection with Walter Energy’s bankruptcy filing on December 27, 1989 in the United States Bankruptcy Court for the Middle District of Florida, Tampa Division; (ii) an IRS audit of Walter Energy’s federal income tax returns for the years ended May 31, 2000 through December 31, 2008; and (iii) an IRS audit of Walter Energy’s federal income tax returns for the 2009 through 2013 tax years. It is unclear how these tax matters will be impacted, if at all, by Walter Energy’s recent Chapter 11 bankruptcy filing in Alabama, which is discussed below.

Walter Energy 2015 Bankruptcy Filing . On July 15, 2015, Walter Energy filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Northern District of Alabama and, in connection therewith, filed a motion to assume a pre-petition RSA between Walter Energy and certain holders of its funded indebtedness. Under the RSA, the parties thereto agreed to pursue confirmation of a plan of reorganization unless certain events occur, in which case Walter Energy will abandon the plan process and pursue a sale of its assets in accordance with Section 363 of the Bankruptcy Code. There was no indication in the RSA of the amount of anticipated tax claims. According to the Walter Energy Form 10-Q, Walter Energy intended to seek a comprehensive resolution of all outstanding federal tax issues including, to the extent possible, issues relating to the “proof of claim” described above, in connection with its recent Chapter 11 bankruptcy filing in Alabama.

On August 18, 2015, Walter Energy filed a motion with the Florida bankruptcy court requesting that the court transfer venue of its disputes with the IRS to the Alabama bankruptcy court. In that motion, Walter Energy asserted that it believed the liability for the years at issue "will be materially, if not completely, offset by the [r]efunds" asserted by Walter Energy against the IRS. The Florida bankruptcy court transferred venue of the matter to the Alabama bankruptcy court, where it remains pending.

In accordance with the RSA, on August 26, 2015, Walter Energy filed with the Alabama bankruptcy court a proposed plan of reorganization and accompanying disclosure statement. There was no indication in the plan or disclosure statement of the amount of anticipated tax claims. No such information was contained in Walter Energy's schedules of assets and liabilities and statement of financial affairs, filed with the Alabama bankruptcy court on August 28, 2015. As a result of certain disputes in the Alabama bankruptcy court, on September 28, 2015, the Alabama bankruptcy court entered an order confirming that the RSA had been terminated.

On November 5, 2015, Walter Energy together with certain of its subsidiaries, entered into the Walter Energy Asset Purchase Agreement with Coal Acquisition, a Delaware limited liability company formed by members of Walter Energy’s senior lender group, pursuant to which, among other things, Coal Acquisition agreed to acquire substantially all of Walter Energy’s assets and assume certain liabilities, subject to, among other things, a number of closing conditions set forth therein. The sale of such assets pursuant to the Walter Energy Asset Purchase Agreement was conducted under the provisions of Sections 363 and 365 of the Bankruptcy Code. On January 8, 2016, after conducting a hearing, the Bankruptcy Court entered an order approving the sale of Walter Energy's assets to Coal Acquisition free and clear of all liens, claims, interests and encumbrances of the Debtors.

We cannot predict whether or to what extent we may become liable for federal income taxes of the Walter Energy consolidated group, in part because we believe, based on publicly available information, that: (i) the amount of taxes owed by the Walter Energy consolidated group for the periods from 1983 through 2009 remains unresolved; (ii) in light of Walter Energy’s 2015 Chapter 11 bankruptcy filing, it is unclear (a) whether Walter Energy will be obligated or able to pay any or all of such amounts owed and (b) what portion of the IRS claims against the Walter Energy consolidated group for 2009 and prior tax years are attributable to tax, interest and/or penalties and what priority, if any, the IRS will receive in the Alabama bankruptcy proceedings with respect to its claims against Walter Energy; and (iii) we cannot predict whether, in the event Walter Energy does not discharge all tax obligations for the consolidated group, the IRS will seek to enforce tax claims against former members of the Walter Energy consolidated group. Further, because we cannot currently estimate our liability, if any, relating to the federal income tax liability of Walter Energy’s consolidated tax group during the tax years in which we were a part of such group, we cannot determine whether such liabilities, if any, could have a material adverse effect on our business, financial condition, liquidity and/or results of operations.

Tax Separation Agreement . In connection with our spin-off from Walter Energy, the Company and Walter Energy entered into a Tax Separation Agreement, dated April 17, 2009. Notwithstanding any several liability the Company may have under federal tax law described above, under the Tax Separation Agreement, Walter Energy agreed to retain full liability for all U.S. federal income or state combined income taxes of the Walter Energy consolidated group for 2009 and prior tax years (including any interest, additional taxes or penalties applicable thereto), subject to limited exceptions. Accordingly, we filed "proofs of claim" in the Alabama bankruptcy proceedings asserting claims for any such amounts to the extent we are ultimately held liable for the same.

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It is unclear, however, whether claims made by the Company under the Tax Separation Agreement would be enforceable against Walter Energy in connection with, or following the conclusion of, the various Walter Energy bankruptcy proceedings described above or if such claims would be rejected or disallowed under bankruptcy law, and whether Walter Energy will have the ability to satisfy in part or in full the amount of any claims made by the Company under the Tax Separation Agreement or otherwise.

Furthermore, the Tax Separation Agreement provides that Walter Energy has, in its sole discretion, the exclusive right to represent the interests of the consolidated group in any audit, court proceeding or settlement of a claim with the IRS for the tax years in which certain of the Company's former subsidiaries were a member of the Walter Energy consolidated group for U.S. federal income tax purposes. Moreover, the Tax Separation Agreement obligates us to take certain tax positions that are consistent with those taken historically by Walter Energy. In the event we do not take such positions, we could be liable to Walter Energy to the extent our failure to do so results in an increased tax liability or the reduction of any tax asset of Walter Energy. These arrangements may result in conflicts of interests between us and Walter Energy, particularly with regard to the Walter Energy bankruptcy proceedings described above.

Lastly, according to its public filings, Walter Energy’s 2009 tax year is currently under audit. Accordingly, if it is determined that certain distribution taxes and other amounts are owed related to our spin-off from Walter Energy in 2009, we may be liable under the Tax Separation Agreement for all or a portion of such amounts.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our executive and principal administrative office is located in Tampa, Florida in a 29,000 square foot facility, which is leased under a long-term lease. Our administrative and corporate operations and activities of our non-reportable segments are conducted at our Tampa location, all of which are recorded within our Other non-reportable segment. Our Servicing segment has centralized servicing operations located in Saint Paul, Minnesota; Tempe, Arizona; Rapid City, South Dakota; Irving, Texas; and Jacksonville, Florida in leased office spaces ranging between 31,000 and 126,000 square feet. Our Reverse Mortgage segment operations centers lease office space ranging from 14,000 to 68,000 square feet in San Diego, California; Charlotte, North Carolina; Palm Beach Gardens, Florida; and Houston, Texas. Our Originations segment is headquartered in approximately 162,000 square feet of leased office space in Fort Washington, Pennsylvania. In addition, our field servicing and regional operations lease approximately 145 smaller offices located throughout the U.S. Our lease agreements have terms that expire through 2027 , exclusive of renewal option periods. We believe that our leased facilities are adequate for our current requirements, although growth in our business may require us to lease additional facilities or modify existing leases.

ITEM 3. LEGAL PROCEEDINGS

The Company is, and expects that, from time to time, it will continue to become, involved in litigation, arbitration, examinations, inquiries, investigations and claims. These include pending examinations, inquiries and investigations by governmental and regulatory agencies, including but not limited to the SEC, IRS, state attorneys general and other state regulators, Offices of the United States Trustees and the CFPB, into whether certain of the Company's residential loan servicing and originations practices, bankruptcy practices and other aspects of its business comply with applicable laws and regulatory requirements.

From time to time, the Company has received and may in the future receive subpoenas and other information requests from federal and state governmental and regulatory agencies that are examining or investigating the Company. The Company, Mark O’Brien, Denmar Dixon and certain current and former Company officers have received subpoenas from the SEC requesting documents, testimony and/or other information in connection with an investigation concerning trading in the Company’s securities. The Company and the aforementioned individuals are cooperating with the investigation. In addition, Ditech Financial has received a letter from the SEC requesting a voluntary production of documents and other information in connection with an investigation relating to mortgage loan servicer use of collection agents. We believe a similar letter was also sent to other companies in the industry. The Company cannot provide any assurance as to the outcome of the aforementioned investigations or that such outcomes will not have a material adverse effect on its reputation, business, prospects, results of operations, liquidity or financial condition.

On August 28, 2015, RMS received a CID from the CFPB to produce certain documents and answer questions relating to RMS’s marketing and provision of reverse mortgage products and services. RMS is cooperating with the CFPB by responding to the CID. To date, the CFPB has not advised RMS of any adverse findings in its investigation. However, RMS is unable to predict the outcome of the investigation or the amount of loss, if any, that would result from an adverse resolution of this matter.

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The Company has received various subpoenas for testimony and documents, motions for examinations pursuant to Federal Rule of Bankruptcy Procedure 2004, and other information requests from certain Offices of the United States Trustees, acting through trial counsel in various federal judicial districts, seeking information regarding an array of the Company’s policies, procedures and practices in servicing loans to borrowers who are in bankruptcy and the Company's compliance with bankruptcy laws and rules. We have provided information in response to these subpoenas and requests and have met with representatives of certain Offices of the United States Trustees to discuss various issues that have arisen in the course of these inquiries, including our compliance with bankruptcy laws and rules. We cannot predict the outcome of the aforementioned proceedings and investigations, which could result in requests for damages, fines, sanctions, or other remediation. We could face further legal proceedings in connection with these matters. We may seek to enter into one or more agreements to resolve these matters. Any such agreement may require us to pay fines or other amounts for alleged breaches of law and to change or otherwise remediate our business practices. Legal proceedings relating to these matters and the terms of any settlement agreement could have a material adverse effect on the Company’s reputation, business, prospects, results of operations, liquidity and financial condition.

Since mid-2014, we have received subpoenas for documents and other information requests from the offices of various state attorneys general who have, as a group and individually, been investigating our mortgage servicing practices. We have provided information in response to these subpoenas and requests and have had discussions with representatives of the states involved in the investigations to explain our practices. We may seek to reach an agreement to resolve these matters with one or more states. Any such agreement may include, among other things, enhanced servicing standards, monitoring and testing obligations, and payments for remediation, consumer relief, penalties and other amounts. We cannot predict whether litigation or other legal proceedings will be commenced by one or more states in relation to these investigations. Any legal proceedings and any agreement resolving these matters could have a material adverse effect on the Company’s reputation, business, prospects, results of operation, liquidity and financial condition.

The Company is involved in litigation, including putative class actions, and other legal proceedings concerning, among other things, lender-placed insurance, private mortgage insurance, bankruptcy practices, employment practices, the Consumer Financial Protection Act, the Fair Debt Collection Practices Act, the TCPA, the Fair Credit Reporting Act, TILA, RESPA, the ECOA, and other federal and state laws and statutes. For example, in Sanford Buckles v. Green Tree Servicing LLC and Walter Investment Management Corporation , filed on August 18, 2015 in the U.S. District Court for the District of Nevada, the Parent Company and Ditech Financial are subject to a putative class action suit alleging that the Parent Company and Ditech Financial improperly recorded phone calls received from, and/or made to, Nevada residents without their prior consent in violation of Nevada state law. The plaintiff in this suit, on behalf of himself and others similarly situated, seeks punitive and statutory damages, and attorneys’ fees. Ditech Financial is also subject to several purported class action suits alleging violations of the TCPA for placing phone calls to plaintiffs’ cell phones using an automatic telephone dialing system without their prior consent. The plaintiffs in these suits, on behalf of themselves and others similarly situated, seek statutory damages for both negligent and knowing or willful violations of the TCPA and, in one case, attorneys' fees.

The outcome of all of the Company's legal proceedings is uncertain, and it is possible that adverse results in such proceedings (which could include restitution, penalties, punitive damages and injunctive relief affecting the Company's business practices) and the terms of any settlements of such proceedings could have a material adverse effect on the Company's reputation, business, prospects, results of operations, liquidity or financial condition. In addition, governmental and regulatory agency examinations, inquiries and investigations may result in the commencement of lawsuits or other proceedings against us or our personnel. Although the Company has historically been able to resolve the preponderance of its ordinary course litigations on terms it considered favorable and without a material effect, this pattern may not continue and, in any event, individual cases could have unexpected materially adverse outcomes, requiring payments or other expenses in excess of amounts already accrued. The Company cannot predict whether or how any legal proceeding will affect the Company's business relationship with actual or potential customers, the Company's creditors, rating agencies and others. In addition, cooperating in, defending and resolving these legal proceedings consume significant amounts of management time and attention and could cause the Company to incur substantial legal, consulting and other expenses and to change the Company's business practices, even in cases where there is no determination that the Company's conduct failed to meet applicable legal or regulatory requirements.

For a description of certain legal proceedings, please see Note 29 to the Notes to Consolidated Financial Statements included in Item 8 of this report, which is incorporated by reference herein.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock trades on the NYSE under the symbol "WAC." As of February 19, 2016 , there were 134 record holders of our common stock.

The following table sets forth certain high and low sales prices of our common stock. There were no cash dividends declared on our common stock for the periods indicated.



	Stock Prices
	High		Low
2015
First Quarter ended March 31	$	24.35	$	14.16
Second Quarter ended June 30	23.70		15.92
Third Quarter ended September 30	23.38		14.39
Fourth Quarter ended December 31	17.80		9.63

2014
First Quarter ended March 31	$	35.97	$	24.11
Second Quarter ended June 30	30.78		24.00
Third Quarter ended September 30	30.24		21.41
Fourth Quarter ended December 31	23.47		15.94

We have no current plans to pay any cash dividends on our common stock and instead may retain earnings, if any, for future operations and expansion or debt repayment, among other things. Any decision to declare and pay dividends in the future will be made at the discretion of our Board of Directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our Board of Directors may deem relevant. In addition, our ability to pay dividends is limited by covenants in our 2013 Credit Agreement and Senior Notes Indenture. These restrictions on dividends are described in greater detail in the Liquidity and Capital Resources section under Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Refer to Note 25 in the Notes to Consolidated Financial Statements included in Item 8 of this report for additional information regarding dividend restrictions.

Issuer Purchases of Equity Securities



Period	Total Number of Shares Purchased ⁽¹⁾	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽²⁾	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
October 2015
(October 1 - October 31)	—	$	—	—	$	50,000,000
November 2015
(November 1 - November 30)	2,007,909	$	11.48	1,933,800	$	27,871,031
December 2015
(December 1 - December 31)	448,933	$	13.22	448,933	$	21,934,740
Total	2,456,842	$	11.80	2,382,733	$	21,934,740

__________


(1)	Includes 74,109 shares withheld to cover the minimum tax withholding obligation associated with the vesting of restricted stock units at an average price of $12.35 per share.

(2)

On May 6, 2015, the Company announced that its Board of Directors had authorized the repurchase of up to an aggregate amount of $50.0 million of the Company’s common stock. The authorization expires on May 31, 2016 and may be modified, suspended, or discontinued by the Board of Directors at any time without notice. Shares of common stock that the Company repurchases are canceled and return to the status of authorized but unissued shares.

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Shareholder Return Performance Chart

The following graph shows a five-year comparison of the cumulative total shareholder return on our common stock with the cumulative total returns of the Russell 2000 Index and the S&P SmallCap 600 Financial Index as of December 31st of each year presented. The graph assumes that $100 was invested on December 31, 2010 and that all dividends and distributions were reinvested. The comparisons in the chart are provided in accordance with SEC requirements and are not intended to forecast or be indicative of possible future performance of our common stock.

The foregoing performance graph and related information shall not be deemed “soliciting material” nor to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filings under the Securities Act or the Exchange Act except to the extent we specifically incorporate it by reference into such filing.

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ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth certain selected consolidated financial data of the Company. The selected financial data should be read in conjunction with Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and our Consolidated Financial Statements included in Item 8 of this report. Our business has changed substantially during the past several years. As a result of the acquisition of Green Tree and no longer qualifying as a REIT in 2011; the acquisitions of RMS and S1L in 2012; the acquisition of the ResCap capital markets and national originations platforms in 2013; and bulk servicing portfolio acquisitions in 2013 and 2014, our historical annual consolidated financial results presented herein are not necessarily indicative of the results that may be expected for any future period. Refer to Note 3 of the Notes to Consolidated Financial Statements included in Item 8 for additional information on business combinations and asset acquisitions and the Liquidity and Capital Resources section of Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for a description of our financing transactions. We made certain reclassifications to prior year balances to conform to the current year presentation.



	For the Years Ended December 31,
	2015 ⁽¹⁾			2014 ⁽²⁾			2013 ⁽³⁾			2012 ⁽⁴⁾			2011 ⁽⁵⁾
	(in thousands except per share data)
Revenues	$	1,274,259		$	1,487,153		$	1,802,499		$	623,807		$	373,851
Expenses	1,711,756			1,625,029			1,383,253			617,900			381,123
Other gains (losses)	33,071			18,536			(6,428		)	(41,358		)	1,139
Income (loss) before income taxes	(404,426		)	(119,340		)	412,818			(35,451		)	(6,133		)
Income tax expense (benefit)	(141,236		)	(9,012		)	159,351			(13,317		)	60,264
Net income (loss)	$	(263,190	)	$	(110,328	)	$	253,467		$	(22,134	)	$	(66,397	)

Basic earnings (loss) per common and common equivalent share	$	(7.00	)	$	(2.93	)	$	6.75		$	(0.73	)	$	(2.41	)
Diluted earnings (loss) per common and common equivalent share	(7.00		)	(2.93		)	6.63			(0.73		)	(2.41		)
Total dividends declared per common and common equivalent share	—			—			—			—			0.22

	At December 31,
	2015 ⁽¹⁾			2014 ⁽²⁾			2013 ⁽³⁾			2012 ⁽⁴⁾			2011 ⁽⁵⁾
Total assets	$	18,591,501		$	18,949,583		$	17,339,431		$	10,938,533		$	4,068,047
Residential loans at fair value	12,673,439			11,832,630			10,341,375			6,710,211			672,714
Servicing rights, net	1,788,576			1,730,216			1,304,900			242,712			250,329
Servicer and protective advances, net	1,595,911			1,761,082			1,381,434			173,047			140,690
Debt and other obligations:
Servicing advance liabilities	1,229,280			1,365,885			971,286			100,164			107,039
Warehouse borrowings	1,340,388			1,176,956			1,085,563			255,385			—
Servicing rights related liabilities	117,000			66,311			—			—			—
Corporate debt	2,157,424			2,237,037			2,237,535			867,662			718,247
Mortgage-backed debt	1,051,679			1,739,827			1,874,314			2,056,286			2,203,638
HMBS related obligations	10,647,382			9,951,895			8,652,746			5,874,552			—
Total debt and other obligations	16,543,153			16,537,911			14,821,444			9,154,049			3,028,924
Total stockholders' equity	$	804,676		$	1,076,659		$	1,167,016		$	894,928		$	533,532

__________

(1)

During 2015, we recorded $143.3 million in losses resulting from changes in valuation inputs and other assumptions used in the fair value of assets and liabilities carried at fair value, $207.6 million in goodwill impairment charges related to our Servicing and Reverse Mortgage reporting units and $56.4 million r elated to regulatory developments in 2015 that led to additional charges around curtailable events and to accruals associated with legal and regulatory matters outside of the normal course of business.

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(2)

During 2014, we recorded $100.8 million in costs for legal and regulatory matters o utside of normal course of business, $77.9 million in losses resulting from changes in valuation inputs and other assumptions used in the fair value of assets and liabilities carried at fair value, a $75.7 million provision for uncollectible advances, and an $82.3 million goodwill impairment charge related to our Reverse Mortgage reporting unit. We recorded $36.8 million in asset management performance fees collected and earned by our Other non-reportable segment in connection with the asset management of a fund. We recorded $223.7 million in assets, mostly consisting of servicing rights and advances, in connection with the acquisition of the EverBank net assets and $319.8 million in servicing rights in connection with the acquisition of a pool of Fannie Mae MSRs.

(3)

During 2013, we recorded $137.7 million in gains resulting from changes in valuation inputs and other assumptions used in the fair value of assets and liabilities carried at fair value and $12.5 million of loss on extinguishment of debt in connection with the refinancing of our corporate debt. We recorded $491.4 million in assets, mostly consisting of servicing rights and advances, in connection with the acquisition of the ResCap net assets and $503.0 million in servicing rights in connection with the BOA asset purchase. Further, in connection with the BOA asset purchase, we disbursed $740.7 million in servicer and protective advances with funds from our servicing advance facilities.

(4)

During 2012, we recorded $48.6 million of losses on extinguishment of debt in connection with the repayment and termination of our 2011 Second Lien Term Loan and the refinancing of our 2011 First Lien Term Loan and $90.0 million revolver. We recorded $5.6 billion in assets, which mostly consisted of residential loans, and assumed $5.3 billion in HMBS related obligations in connection with the acquisition of RMS, and recorded $128.4 million in total assets in connection with the acquisition of S1L.

(5)

During 2011, we recorded a $62.7 million charge to income tax expense for the impact of the loss of our REIT status and being taxed as a C corporation. The loss of our REIT status was the direct result of the acquisition of Green Tree and is retroactive to January 1, 2011. In addition, we recorded $2.2 billion in assets, which included $729.2 million in residential loans, and $861.7 million in mortgage-backed debt in connection with the acquisition of Green Tree.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our Consolidated Financial Statements and notes thereto included in Item 8 of this report. This discussion contains a number of forward-looking statements, all of which are based on our current expectations and all of which could be affected by uncertainties and risks. Our actual results may differ materially from the results contemplated in these forward-looking statements as a result of many factors including, but not limited to, those described in Part I, Item 1A. Risk Factors. Historical results and trends which might appear should not be taken as indicative of future operations, particularly in light of our recent acquisitions and regulatory developments discussed throughout this report. Refer to the Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 section located in the forepart in this report for a discussion regarding forward-looking statements.

Executive Summary

The Company

We are a diversified mortgage banking firm focused primarily on servicing and originating residential loans, including reverse loans. We service a wide array of loans across the credit spectrum for our own portfolio and for GSEs, government agencies, third-party securitization trusts and other credit owners. Through our consumer and correspondent lending channels, we originate and purchase residential loans that we predominantly sell to GSEs and government entities. In addition, we operate several other complementary businesses which include managing a portfolio of credit-challenged, non-conforming residential mortgage loans; an insurance agency serving borrowers and credit owners of our servicing portfolio; a post charge-off collection agency; and an asset management business through our SEC registered investment advisor. These supplemental businesses allow us to leverage our core servicing capabilities and consumer base to generate complementary revenue streams.

At December 31, 2015 , we serviced 2.2 million residential loans with a total unpaid principal balance of $266.6 billion . We have been one of the 10 largest residential loan servicers in the U.S by unpaid principal balance for the past three years according to Inside Mortgage Finance. Our originations business originated $25.1 billion in mortgage loan volume in 2015 , ranking it in the top 20 originators nationally by unpaid principal balance according to Inside Mortgage Finance. Our reverse mortgage business is a leading integrated franchise in the reverse mortgage sector and, according to an industry source, was the third leading issuer of HMBS in 2015 .

During 2015 , we added to the unpaid principal balance of our third-party mortgage loan servicing portfolio: $21.3 billion relating to acquired servicing rights, $7.3 billion relating to sub-servicing contracts and $18.6 billion relating to servicing rights capitalized upon sales of mortgage loans, while also adding $2.7 billion of unpaid principal balance to our third-party reverse loan servicing portfolio. Our third-party mortgage loan and reverse loan servicing portfolio was reduced by $39.5 billion of unpaid principal balance in payoffs and sales, net of recapture activities, during 2015 . Also in 2015 , we originated and purchased $1.4 billion in reverse mortgage volume and issued $1.5 billion in HMBS.

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Our mortgage loan and reverse mortgage originations businesses diversify our revenue base and offer various sources for replenishing and growing the Company's servicing portfolio. During 2015 , we originated and purchased $25.1 billion of mortgage loans, substantially all of which were added to our servicing portfolio upon loan sale. Of these originations, we added $17.6 billion of unpaid principal balance to our servicing portfolio through our correspondent channel. The majority of the remaining originations resulted from our retention activities associated with our existing servicing portfolio. Through our retention activities, we assist consumers in refinancing their loans, which reduces the runoff on our existing servicing portfolio.

We manage our Company in three reportable segments: Servicing, Originations, and Reverse Mortgage. A description of the business conducted by each of these segments is provided below:

Servicing — Our Servicing segment consists of operations that perform servicing for third-party credit owners of mortgage loans for a fee and the Company’s own mortgage loan portfolio. The Servicing segment also operates complementary businesses consisting of an insurance agency serving residential loan borrowers and credit owners and a collections agency which performs collections of post charge-off deficiency balances for third parties and the Company. In addition, the Servicing segment holds the assets and mortgage-backed debt of the Residual Trusts.

Originations — Our Originations segment consists of operations that originate and purchase mortgage loans that are intended for sale to third parties. In 2015, the mix of mortgage loans sold by our Originations segment, based on unpaid principal balance, shifted from substantially all Fannie Mae conventional conforming loans during 2014 to approximately (i) 56% Fannie Mae conventional conforming loans, (ii) 35% Ginnie Mae loans, and (iii) 9% Freddie Mac conventional conforming loans. A substantial majority of our Ginnie Mae mortgage loan originations in 2015 were FHA-insured loans.

Reverse Mortgage — Our Reverse Mortgage segment consists of operations that purchase and originate HECMs that are securitized, but remain on the consolidated balance sheet as collateral for secured borrowings. This segment performs servicing for third-party credit owners and the Company and provides other complementary services for the reverse mortgage market, such as real estate owned property management and disposition.

Other — Our Other non-reportable segment primarily consists of the assets and liabilities of the Non-Residual Trusts, corporate debt and our asset management business, which we operate through GTIM.

Overview

Our profitability is dependent on our ability to generate revenue, primarily from our servicing and originations businesses. Our Servicing segment revenue is primarily impacted by the size and mix of our capitalized servicing and sub-servicing portfolios and is generated through servicing of mortgage loans for clients and/or credit owners. Net servicing revenue and fees includes the change in fair value of servicing rights carried at fair value and the amortization of all other servicing rights. Our servicing fee income generation is influenced by the level and timing of entrance into sub-servicing contracts and purchases and sales of servicing rights. The fair value of our servicing rights is largely dependent on the size of the related portfolio, discount rates and prepayment and default speeds. Our Originations segment revenue, which is primarily gains on sales of loans, is impacted by interest rates and the volume of loans locked as well as the margins earned in our various origination channels. Gains on sales of loans include the cost of additions to the representations and warranties reserve. Our Reverse Mortgage segment is impacted by new origination reverse loan volume, draws on existing reverse loans and the fair value of reverse loans and HMBS.

Our results of operations are also affected by expenses such as salaries and benefits, information technology, occupancy, legal and professional fees, the provision for advances, curtailment, interest expense and other operating expenses. In addition, during 2015 and 2014, our expenses were impacted by non-cash goodwill impairment charges of $207.6 million and $82.3 million , respectively. Refer to the Financial Highlights, Results of Operations and Business Segment Results sections below for further information.

Our principal sources of liquidity are the cash flows generated from our business segments and funds available from our 2013 Revolver, master repurchase agreements, mortgage loan servicing advance facilities, issuance of HMBS and excess servicing spread financing arrangements. We may generate additional liquidity through sales of MSRs, any portion thereof, or other assets.

Financial Highlights

2015 Compared to 2014

Total revenues for 2015 were $1.3 billion , which represented a decline of $212.9 million , or 14% , as compared to 2014 . The decrease in revenue reflects a $107.2 million decrease in net servicing revenue and fees, primarily driven by $128.5 million in higher fair value losses on servicing rights; $60.2 million in lower interest income on loans; $11.7 million in lower net fair value gains on reverse loans and related HMBS obligations; and $8.3 million in lower net gains on sales of loans.

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We recorded fair value losses on our servicing rights carried at fair value primarily as a result of higher discount rates used to value our servicing rights and higher realization of expected cash flows. We had lower interest income on loans primarily due to the sale of our residual interest in seven of the Residual Trusts in the second quarter of 2015. We had lower net fair value gains on reverse loans and related HMBS obligations primarily due to the widening of spreads resulting from changes in market pricing for HECMs and HMBS and a lower reduction of LIBOR in 2015 as compared to 2014, offset partially by an increase in cash generated by origination, purchase and securitization of HECMs. We had lower net gains on sales of loans due primarily to a shift in volume from the higher margin retention channel to the lower margin correspondent channel, even though average interest rates were lower during 2015 as compared to 2014 and these lower rates gave rise to a higher total volume of locked loans.

Total expenses for 2015 were $1.7 billion , which represented an increase of $86.7 million , or 5% , as compared to 2014 . We incurred $56.5 million and $82.3 million in impairment charges in the Reverse Mortgage reporting unit during the years ended December 31, 2015 and 2014, respectively, and $151.0 million in impairment charges in our Servicing reporting unit during the year ended December 31, 2015. As a result of the goodwill impairment charges in the Reverse Mortgage reporting unit, this reporting unit no longer has goodwill. In addition, we had $33.5 million in lower interest expense related to mortgage-backed debt primarily due to the aforementioned sale of our residual interest in seven of the Residual Trusts.

We recognized total other gains of $33.1 million in 2015 , which include an $11.8 million gain recognized on the sale of an investment which was accounted for using the equity method; an $8.9 million realized gain recognized on the sale of a trading security; a $7.3 million net fair value gain relating to the Non-Residual Trusts; a $4.7 million net gain on extinguishment of debt related to the repurchase of Senior Notes and the voluntary prepayment on the 2013 Term Loan; a $3.1 million gain for consideration received for the contribution of Marix to WCO; and a $2.8 million loss recognized on the sale of our residual interest in seven of the Residual Trusts.

Our cash flows used in operating activities were $48.1 million during 2015 . We finished 2015 with $202.8 million in cash and cash equivalents. Cash used in operating activities decreased by $156.2 million during 2015 as compared to 2014 . The decrease in cash used in operating activities was primarily a result of an increase in cash related to changes in assets and liabilities, including higher collections of servicer and protective advances and an increase in accrued expenses related to uncertain tax positions, partially offset by higher settlements of payables relating to servicer and protective advances acquired in conjunction with the acquisition of servicing rights and a decrease in accrued expenses related to legal and regulatory matters. In addition, cash increased due to proceeds received from the sale of a trading security received as consideration for the sale of the excess servicing spread associated with certain servicing rights. These increases were partially offset by a decrease in cash related to a lower volume of loans sold in relation to originated loans.

2014 Compared to 2013

Total revenues for 2014 were $1.5 billion , which represented a decline of $315.3 million , or 17% , as compared to 2013 . The decrease in revenue reflects a $181.9 million decrease in net servicing revenue and fees, primarily driven by a $321.6 million decrease related to the change in fair value of servicing rights, partially offset by increased gross servicing revenue and fees of $143.0 million resulting from the growth in our servicing portfolio; a decrease of $136.8 million in net gains on sales of loans; and lower net fair value gains on reverse loans and related HMBS obligations of $10.4 million . Other revenues increased $37.3 million due primarily to $36.8 million in performance fees earned by our investment management business in 2014.

We incurred losses on our servicing rights carried at fair value primarily as a result of a declining interest rate environment. We had lower net gains on sales of loans due primarily to a shift in volume from the higher margin consumer retention channel to the lower margin correspondent lending channel. We had lower net fair value gains on reverse loans and related HMBS obligations due primarily to lower cash generated by origination, purchase and securitization of HECMs, offset partially by the tightening of spreads from changes in market pricing for HECMs and HMBS and a reduction of LIBOR.

Total expenses for 2014 were $1.6 billion , which represented an increase of $241.8 million , or 17% , as compared to 2013 . The increase in expenses was primarily driven by the growth in our servicing portfolio coupled with an increased provision for uncollectible advances and increased costs for legal and regulatory matters outside of normal course of business, and an $82.3 million goodwill impairment charge recorded by our Reverse Mortgage reporting unit. In addition, interest expense increased $30.4 million primarily resulting from increased average corporate debt outstanding and increased servicing advance liabilities.

Our cash flows used in operating activities were $204.3 million during 2014 . We finished 2014 with $320.2 million in cash and cash equivalents. Our operating cash flows increased by $1.6 billion during 2014 as compared to 2013 primarily as a result of a higher volume of loans sold in relation to originated loans given the ramp up of our mortgage loan originations business in 2013. Loan originations volume was significantly larger than volume sold in 2013. In 2014 , the relationship of loan production to volume sold normalized. In addition, during 2013, the growth of our servicing portfolio required the use of additional funds for servicer and protective advances of $778.0 million of cash.

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Refer to the Results of Operations and Business Segment Results sections below for further information on the changes addressed above. Also included in the Business Segment Results section is a discussion of changes in our non-GAAP financial measures. A description of our non-GAAP financial measures is included in the Non-GAAP Financial Measures section below.

Our Industry and Operating Environment

The majority of the approximately $10.0 trillion in U.S. residential mortgage debt outstanding has historically been serviced by large money-center banks, which generally focus on conventional mortgages with low delinquency rates. This allowed for low-cost, routine payment processing and required minimal consumer interaction. Following the credit crisis, the need for “high-touch” specialty servicers, such as Ditech Financial, increased as loan performance declined, delinquencies rose and servicing complexities broadened.

The mortgage industry has seen a significant shift in the servicing landscape since the housing downturn in 2008, as specialty servicers either sub-serviced or acquired portfolios that money-center banks and others have sought to divest. While the five largest bank servicers once commanded a nearly 60% market share of the servicing sector, their share had declined to approximately 37% at December 31, 2015. Over the next several years we expect banking organizations will continue to seek to transfer servicing to specialty servicers as they focus on their core client base and shift servicing for non-core clients and credit-sensitive loans and comply with recent changes in banking organization capital rules.

Following the housing downturn in 2008, national originations volume peaked in 2012 at more than $2.0 trillion, declining to approximately $1.8 trillion in 2013 and $1.3 trillion in 2014. However, the low interest rate environment in 2015 contributed to an estimated $1.7 trillion in originations in 2015. The 30-year conventional mortgage rate averaged approximately 3.85%, 4.17% and 3.98% for the years ended December 31, 2015, 2014 and 2013, respectively. Conversely, in December 2015 the Federal Reserve announced its first increase in interest rates since 2006. As of February 19, 2016 , our expectations based on market data are for mortgage originations to decrease approximately 10% to $1.5 trillion in 2016 as declining refinance volume more than offsets increasing home purchase volume. Based on such data, we believe refinance volumes may drop approximately 30% in 2016 compared to 2015 driven by rising interest rates, after increasing approximately 50% in 2015 compared to 2014. While the volume of originations tends to decline in a rising interest rate environment, the value of our servicing rights tend to rise as prepayments decrease.

The reverse mortgage sector has seen significant change in the past several years. Several of the largest reverse mortgage originators have left the industry and there have been significant changes made by the FHA and Ginnie Mae to the products offered, underwriting guidelines and servicing protocols. Loan volumes have been in decline over the last several years. According to an industry source, we believe HECM endorsements, which represent the insuring of loans by the FHA, will decrease slightly in 2016 and begin to grow in 2017 through 2022 based on forecasts of home pricing and the senior population. We believe the growth in endorsements is an indicator that reverse loan originations are expected to increase.

Regulatory Developments

For a summary of the regulatory framework under which we operate and recent regulatory developments, refer to the Laws and Regulations section of Part I, Item 1. Business.

Strategy

Capital Efficiency

We are focused on using our capital efficiently. We continue to pursue three main strategies to bolster our servicing portfolio. First, we use our originations platform to refinance and retain loans in our current servicing portfolio as well as to generate new loans to add to our servicing portfolio. Second, we are planning to increase over time the portion of our servicing portfolio that is associated with sub-servicing contracts, which generate fee income for us with lower capital outlay, as compared to purchasing servicing rights. We expect certain banks and other owners of mortgage servicing rights (including potentially WCO) will seek to engage sub-servicers to assist with certain servicing portfolios, including portfolios of credit-sensitive and defaulted loans. We believe we are well-positioned to compete for such sub-servicing engagements, given the scale and track record of our servicing platform. Third, we may also, from time to time, consider acquiring mortgage servicing rights.

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Although we remain committed to expanding our servicing portfolio, we expect that over time we will seek to limit our investment in mortgage servicing rights. We plan to seek to sell mortgage servicing rights owned by us to WCO or to other third parties, generally on the basis that we are retained by the buyer to sub-service such rights. We may also seek to sell excess servicing spread or other similar assets. Our strategy for growing our servicing portfolio generally depends on being able to collaborate with owners of servicing rights in this manner. Our ability to effect such collaborations will depend on various factors such as the capital available to such parties, their ability to purchase servicing rights at a price attractive to them and agreement between us and them on the price and terms for our sub-servicing engagement.

In 2015, in connection with our focus on efficient use of capital, we monetized certain non-core assets. In April 2015, we sold the residual interests in seven of the Residual Trusts and in the first quarter of 2015 we sold an equity method investment, as described in Business Segment Results. Further, we continue to work on a potential sale of substantially all of our insurance business. There can be no assurance this potential sale will be consummated. We may consider other asset sale opportunities if they arise.

During 2015, we undertook a number of actions designed to strengthen the capital structure of the Company. These actions included the repurchase of approximately 2.4 million shares of common stock under our publicly announced repurchase authorization, the repurchase of Senior Notes with a carrying value of $35.7 million and a voluntary payment of $50.0 million on the 2013 Term Loan. We intend to pursue opportunities designed to further strengthen the Company’s capital structure through the efficient deployment of capital generated from contemplated future actions including the aforementioned potential sale of the insurance business, potential sales of mortgage servicing rights or excess servicing spread or other similar assets, as well as cash generated from our operations.

From time to time, we may look to selectively grow and add to our complementary businesses which leverage our core servicing portfolio and platform.

Consumer-Focused Rebranding

During the third quarter of 2015, we consolidated Ditech Mortgage Corp and Green Tree Servicing into one legal entity, Ditech Financial, with one brand, Ditech, a Walter Company. We believe this rebranding and consolidation will allow for greater focus on our consumers, will enhance brand recognition as mortgage loans originated by Ditech Financial will be serviced by the same brand, will simplify the process and improve quality for the consumer and will provide us with greater opportunities to cross-sell. We are focused on increasing our recapture rates from the serviced portfolio and believe the enhanced brand recognition will contribute to improving our recapture performance. The consolidation will also enable us to better leverage our resources and talent across the businesses and is expected to drive operational efficiencies. In addition, we exited the Originations segment's consumer retail channel in January 2016 and have focused on developing our Originations segment's consumer direct channel. Further, we have made and are continuing to make investments in technology which are designed to facilitate the originations process for borrowers.

Operational Efficiency

In 2015, we began taking actions across our businesses to improve efficiency and reduce expenses. For example, we captured opportunities for enhanced benefits from shared services and the acceleration of automation efforts. We believe that the actions we took are likely to provide at least $75 million in annual cost savings beginning in 2016. One-time costs associated with the implementation of these initiatives were approximately $15 million.

In conjunction with our exit from the Originations segment's consumer retail channel in January 2016, we continued our expense reduction efforts and further reorganized Ditech Financial in an attempt to improve our efficiency. One-time costs associated with the measures taken in January 2016 are estimated to be approximately $5 million. The consumer retail channel incurred a direct margin loss of approximately $11 million in 2015. In addition to the elimination of this loss in future annual periods, the January 2016 reorganization activities are expected to result in additional annual cost savings of approximately $17 million. Further, as part of our ongoing technology improvement and customer experience enhancement initiatives, we commenced a project in February 2016 to review many of our operating processes. We expect to complete our initial review of such processes in the second quarter of 2016 and plan to move forward with implementation of identified action items thereafter.

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While we have been successful in implementing certain cost saving initiatives and we plan to continue to take actions across our businesses to improve efficiency and reduce expense, certain other costs have risen or are expected to rise. For example, we have been making investments and taking other measures to enhance the structure and effectiveness of our compliance and risk processes and associated programs across the Company, with a view to driving continuous improvements in our compliance results. The mortgage industry generally, including our Company, is subject to extensive and evolving regulation and continues to be under scrutiny from federal and state regulators and other government agencies. This oversight has led, in our case, to ongoing investigations and examinations of several of our business areas, and we have been and will be required to dedicate internal and external resources to providing information to and otherwise cooperating with such regulators and government agencies. In addition, we have incurred, and expect that in the future we will incur, expenses (i) associated with the remediation or other resolution of findings or concerns raised by regulators, government agencies and customers, (ii) to enhance the effectiveness of our risk and compliance program and (iii) to otherwise rectify instances of operational issues and other events of noncompliance discovered through our compliance program or otherwise. These investments to enhance our compliance and risk processes are also intended to result in an improved customer experience and competitive advantage for our business.

Financing Transactions

Refer to the Liquidity and Capital Resources section below for a description of our financing transactions.

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Results of Operations — Comparison of Consolidated Results of Operations (dollars in thousands):



	For the Years Ended December 31,									Variance
	For the Years Ended December 31,									2015 vs. 2014					2014 vs. 2013
	2015			2014			2013			$			%		$			%
REVENUES
Net servicing revenue and fees	$	494,267		$	601,510		$	783,389		$	(107,243	)	(18	)%	$	(181,879	)	(23	)%
Net gains on sales of loans	453,840			462,172			598,974			(8,332		)	(2	)%	(136,802		)	(23	)%
Interest income on loans	74,365			134,555			144,651			(60,190		)	(45	)%	(10,096		)	(7	)%
Net fair value gains on reverse loans and related HMBS obligations	98,265			109,972			120,382			(11,707		)	(11	)%	(10,410		)	(9	)%
Insurance revenue	47,201			71,010			84,478			(23,809		)	(34	)%	(13,468		)	(16	)%
Other revenues	106,321			107,934			70,625			(1,613		)	(1	)%	37,309			53	%
Total revenues	1,274,259			1,487,153			1,802,499			(212,894		)	(14	)%	(315,346		)	(17	)%

EXPENSES
Salaries and benefits	576,817			578,627			549,799			(1,810		)	—	%	28,828			5	%
General and administrative	574,091			577,506			480,377			(3,415		)	(1	)%	97,129			20	%
Interest expense	273,606			303,103			272,655			(29,497		)	(10	)%	30,448			11	%
Goodwill impairment	207,557			82,269			—			125,288			152	%	82,269			n/m
Depreciation and amortization	69,128			72,721			71,027			(3,593		)	(5	)%	1,694			2	%
Other expenses, net	10,557			10,803			9,395			(246		)	(2	)%	1,408			15	%
Total expenses	1,711,756			1,625,029			1,383,253			86,727			5	%	241,776			17	%

OTHER GAINS (LOSSES)
Gains (losses) on extinguishments	4,660			—			(12,489		)	4,660			n/m		12,489			(100	)%
Other net fair value gains	7,398			19,280			6,061			(11,882		)	(62	)%	13,219			218	%
Other	21,013			(744		)	—			21,757			n/m		(744		)	n/m
Total other gains (losses)	33,071			18,536			(6,428		)	14,535			78	%	24,964			(388	)%

Income (loss) before income taxes	(404,426		)	(119,340		)	412,818			(285,086		)	239	%	(532,158		)	(129	)%
Income tax expense (benefit)	(141,236		)	(9,012		)	159,351			(132,224		)	n/m		(168,363		)	(106	)%
Net income (loss)	$	(263,190	)	$	(110,328	)	$	253,467		$	(152,862	)	139	%	$	(363,795	)	(144	)%

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Net Servicing Revenue and Fees

A summary of net servicing revenue and fees is provided below (dollars in thousands):



	For the Years Ended December 31,									Variance
	For the Years Ended December 31,									2015 vs. 2014					2014 vs. 2013
	2015			2014			2013			$			%		$			%
Servicing fees	$	708,491		$	675,335		$	544,544		$	33,156		5	%	$	130,791		24	%
Incentive and performance fees	117,586			157,148			156,279			(39,562		)	(25	)%	869			1	%
Ancillary and other fees	104,750			88,430			77,091			16,320			18	%	11,339			15	%
Servicing revenue and fees	930,827			920,913			777,914			9,914			1	%	142,999			18	%
Changes in valuation inputs or other assumptions ⁽¹⁾	(157,262		)	(124,471		)	153,331			(32,791		)	26	%	(277,802		)	(181	)%
Other changes in fair value ⁽²⁾	(244,730		)	(149,031		)	(105,273		)	(95,699		)	64	%	(43,758		)	42	%
Change in fair value of servicing rights	(401,992		)	(273,502		)	48,058			(128,490		)	47	%	(321,560		)	(669	)%
Amortization of servicing rights	(26,827		)	(43,101		)	(42,583		)	16,274			(38	)%	(518		)	1	%
Change in fair value of servicing rights related liabilities	(7,741		)	(2,800		)	—			(4,941		)	176	%	(2,800		)	n/m
Net servicing revenue and fees	$	494,267		$	601,510		$	783,389		$	(107,243	)	(18	)%	$	(181,879	)	(23	)%

__________


(1)	Represents the net change in servicing rights carried at fair value resulting primarily from market-driven changes in interest rates and prepayment speeds.


(2)	Represents the realization of expected cash flows over time and includes $12.9 million in servicing rights transferred to us for no consideration in 2013.

We recognize servicing revenue and fees on servicing performed for third parties in which we either own the servicing right or act as sub-servicer. This revenue includes contractual fees earned on the serviced loans, incentive and performance fees earned based on the performance of certain loans or loan portfolios serviced by us, and loan modification fees. Servicing revenue and fees also includes asset recovery income, which is included in incentive and performance fees, and ancillary fees such as late fees and expedited payment fees. Servicing revenue and fees are adjusted for the amortization and change in fair value of servicing rights and the change in fair value of the servicing rights related liabilities.

Servicing fees increased $33.2 million in 2015 as compared to 2014 and $130.8 million in 2014 as compared to 2013 due primarily to growth in the third-party servicing portfolio resulting from portfolio acquisitions and servicing rights capitalized as a result of our loan origination activities, partially offset by runoff of the servicing portfolio. Incentive and performance fees decreased $39.6 million for 2015 as compared to 2014 due primarily to lower modification fees, fees earned under HAMP and asset recovery income, partially offset by higher real estate owned management fees. Ancillary and other fees increased $16.3 million for 2015 as compared to 2014 and $11.3 million in 2014 as compared to 2013 due primarily to growth in the mortgage loan servicing portfolio. Refer to the Servicing segment discussion under our Business Segment Results section below for additional information on the changes in fair value relating to servicing rights and our servicing rights related liabilities.

Net Gains on Sales of Loans

Net gains on sales of loans include realized and unrealized gains and losses on loans held for sale, fair value adjustments on IRLCs and other related freestanding derivatives, values of the initial capitalized servicing rights, and a provision for the repurchase of loans. Net gains on sales of loans decreased $8.3 million in 2015 as compared to 2014 and $136.8 million in 2014 as compared to 2013 primarily as a result of a shift in volume from the higher margin retention channel to the lower margin correspondent channel, partially offset by higher volumes of locked loans.

Interest Income on Loans

We earn interest income on the residential loans held in the Residual Trusts and on our unencumbered mortgage loans, both of which are accounted for at amortized cost. During April 2015, we sold our residual interest in seven of the Residual Trusts, or sale of residual interests, and deconsolidated the assets and liabilities of these trusts. Interest income decreased $60.2 million in 2015 as compared to 2014 primarily due to the aforementioned sale of our residual interests in 2015, runoff of the overall mortgage loan portfolio and a lower average yield on loans due to an increase in delinquencies that are 90 days or more past due.

Interest income decreased $10.1 million in 2014 as compared to 2013 due primarily to runoff of the overall mortgage loan portfolio and a lower average yield on loans due to an increase in delinquencies that are 90 days or more past due.

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Provided below is a summary of the average balances of residential loans carried at amortized cost and the related interest income and average yields (dollars in thousands):



	For the Years Ended December 31,									Variance
	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Residential loans at amortized cost
Interest income	$	74,365		$	134,555		$	144,651		$	(60,190	)	$	(10,096	)
Average balance ⁽¹⁾	800,920			1,372,507			1,465,346			(571,587		)	(92,839		)
Average yield	9.28		%	9.80		%	9.87		%	(0.52		)%	(0.07		)%

__________


(1)	Average balance is calculated as the average recorded investment in the loans at the beginning of each month during the year.

Net Fair Value Gains on Reverse Loans and Related HMBS Obligations

Net fair value gains on reverse loans and related HMBS obligations include the contractual interest income earned on reverse loans, including those not yet securitized or bought out of securitization pools, net of interest expense on HMBS related obligations, and the change in fair value of these assets and liabilities. Refer to the Reverse Mortgage segment discussion under our Business Segment Results section below for additional information including a detailed breakout of the components of net fair value gains on reverse loans and related HMBS obligations.

Net fair value gains on reverse loans and related HMBS obligations decreased $11.7 million during 2015 as compared to 2014 due primarily to the widening of spreads resulting from changes in market pricing for HECMs and HMBS and a lower reduction of LIBOR in 2015 as compared to 2014, offset partially by an increase in cash generated by origination, purchase and securitization of HECMs.

Net fair value gains on reverse loans and related HMBS obligations decreased $10.4 million during 2014 as compared to 2013 due primarily to lower cash generated by origination, purchase and securitization of HECMs, offset partially by the tightening of spreads from changes in market pricing for HECMs and HMBS and a reduction of LIBOR.

Insurance Revenue

Insurance revenue consists of commission income and fees earned on voluntary and lender-placed insurance policies issued and other products sold to borrowers, net of estimated future policy cancellations. Commission income is based on a percentage of the premium of the insurance policy issued, which varies based on the type of policy. Insurance revenue decreased $23.8 million in 2015 as compared to 2014 and $13.5 million in 2014 as compared to 2013 due primarily to a decrease in commissions earned related to lender-placed insurance policies resulting from regulatory changes and runoff of existing policies. Due to changes in GSE requirements and regulations that limited our ability to charge commissions for lender-placed insurance policies, our sales commissions related to lender-placed insurance policies began to decrease in June 2014. During 2014, these lower commissions were partially offset by commissions earned from an increase in lender-placed insurance policies issued prior to the effective date of the regulatory changes related to 2013 and early 2014 bulk servicing right acquisitions. In addition, in September 2015 we entered into an agreement to settle a litigation matter pursuant to which we have agreed not to receive commissions as a result of the placement of certain lender-placed insurance policies. We believe we have accrued the full amount expected to be paid under the settlement agreement at December 31, 2015 . As a result of this settlement (and the potential sale of our insurance business), we expect a further reduction in our insurance revenues in 2016.

Other Revenues

Other revenues consists primarily of asset management performance fees, the change in fair value of charged-off loans, income associated with our beneficial interest in a servicing asset, and origination fee income. Other revenues decreased $1.6 million in 2015 as compared to 2014 due primarily to $36.8 million in asset management performance fees collected and earned by our Other non-reportable segment in connection with the investment management of a fund during 2014 and $7.5 million in lower income from our beneficial interest in a servicing asset. The performance fees were earned in connection with the liquidation of the fund’s investments during 2014 and are based on the fund exceeding pre-defined thresholds. These fees are recorded when the fund is terminated or when the likelihood of claw-back is improbable. The decrease in these revenues was partially offset by $19.3 million in higher fair value gains relating to charged-off loans as a result of twelve months of collection activity in 2015 compared to eight months in 2014 and an increase in expected collections; $17.7 million in higher origination fee income resulting from the refinancing of mortgage loans partially offset by lower fees charged to new reverse loan borrowers; and $6.2 million in higher other interest income. Origination fee income was $40.6 million and $22.9 million for 2015 and 2014 , respectively.

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Other revenues increased $37.3 million in 2014 as compared to 2013 due primarily to $36.8 million in the aforementioned asset management performance fees, a $22.5 million gain in fair value on charged-off loans acquired in 2014 and $4.5 million increase in income from our beneficial interest in a servicing asset. These increases were partially offset by $22.6 million in lower origination fee income resulting primarily from lower fees charged to borrowers for refinancing mortgage loans. Origination fee income was $22.9 million and $45.5 million for 2014 and 2013, respectively.

Salaries and Benefits

Salaries and benefits decreased $1.8 million in 2015 as compared to 2014 primarily due to a decrease in compensation and benefits resulting from a lower average headcount during 2015, partially offset by an increase in share-based compensation due largely to a higher number of awards granted and the acceleration of expense associated with a former employee's unvested awards, and increases in bonuses and severance. Headcount decreased by approximately 800 full-time employees from approximately 6,700 at December 31, 2014 to approximately 5,900 at December 31, 2015 .

Salaries and benefits increased $28.8 million in 2014 as compared to 2013 primarily due to an increase in the number of employees as a result of hiring to support the growth of our servicing business and corporate operations. Headcount increased by approximately 300 full-time employees from approximately 6,400 at December 31, 2013 to approximately 6,700 at December 31, 2014.

General and Administrative

Refer to the Business Segment Results section below for additional information regarding general and administrative expenses for each of our segments.

Interest Expense

We incur interest expense on our corporate debt, mortgage-backed debt issued by the Residual Trusts, master repurchase agreements and servicing advance liabilities, all of which are accounted for at amortized cost. Interest expense decreased $29.5 million in 2015 as compared to 2014 due primarily to decreases in interest expense related to mortgage-backed debt and servicing advance liabilities, partially offset by an increase in interest expense related to master repurchase agreements. Interest expense related to mortgage-backed debt decreased primarily as a result of the sale of our residual interests, which required the deconsolidation of the related mortgage-backed debt, and the runoff of the overall related mortgage loan portfolio. Interest expense related to servicing advance liabilities decreased due primarily to a lower average interest rate, offset partially by a higher average balance outstanding. Interest expense related to master repurchase agreements, which are utilized to fund purchases and originations of mortgage loans and reverse loans, increased primarily as a result of a higher average outstanding balance, which is due largely to a higher volume of mortgage loan fundings, partially offset by a lower average interest rate.

Interest expense increased $30.4 million in 2014 as compared to 2013 due primarily to corporate debt transactions throughout 2013, which included incremental borrowings under our 2012 Term Loan and related subsequent refinancing activities under our 2013 Term Loan and the issuance of our Senior Notes. These financing transactions resulted in a higher average balance of our corporate debt, but a lower average interest rate as compared to 2013. In addition, interest expense increased as a result of a higher average balance of servicing advance liabilities, which are utilized to finance servicer and protective advances, due to our growing servicing business. These increases were partially offset by decreases in interest expense related to mortgage-backed debt and master repurchase agreements. Interest expense related to mortgage-backed debt decreased as a result of a lower average outstanding balance as the portfolio continues to run off. Interest expense related to master repurchase agreements decreased primarily as a result of a lower average interest rate. Refer to the Liquidity and Capital Resources section below for additional information on our debt.

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Provided below is a summary of the average balances of our corporate debt, mortgage-backed debt of the Residual Trusts, servicing advance liabilities, and master repurchase agreements, as well as the related interest expense and average rates (dollars in thousands):



	For the Years Ended December 31,									Variance
	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Corporate debt ⁽¹⁾
Interest expense	$	147,789		$	147,747		$	123,526		$	42		$	24,221
Average balance ⁽⁴⁾	2,251,700			2,271,551			1,768,633			(19,851		)	502,918
Average rate	6.56		%	6.50		%	6.98		%	0.06		%	(0.48		)%

Mortgage-backed debt of the Residual Trusts ⁽²⁾
Interest expense	$	44,368		$	77,858		$	86,974		$	(33,490	)	$	(9,116	)
Average balance ⁽⁵⁾	685,105			1,154,126			1,262,709			(469,021		)	(108,583		)
Average rate	6.48		%	6.75		%	6.89		%	(0.27		)%	(0.14		)%

Servicing advance liabilities ⁽²⁾
Interest expense	$	40,987		$	43,909		$	25,752		$	(2,922	)	$	18,157
Average balance ⁽⁴⁾	1,259,686			1,021,727			588,459			237,959			433,268
Average rate	3.25		%	4.30		%	4.38		%	(1.05		)%	(0.08		)%

Master repurchase agreements ⁽³⁾
Interest expense	$	40,462		$	33,589		$	36,403		$	6,873		$	(2,814	)
Average balance ⁽⁴⁾	1,381,911			1,007,593			940,080			374,318			67,513
Average rate	2.93		%	3.33		%	3.87		%	(0.40		)%	(0.54		)%

__________


(1)	Corporate debt includes our 2013 Term Loan, Senior Notes, and Convertible Notes. Corporate debt activities are included in the Other non-reportable segment.


(2)	Mortgage-backed debt of the Residual Trusts and servicing advance liabilities are held by our Servicing segment.


(3)	Master repurchase agreements are held by the Originations and Reverse Mortgage segments.


(4)	Average balance for corporate debt, servicing advance liabilities and master repurchase agreements is calculated as the average daily carrying value.


(5)	Average balance for mortgage-backed debt is calculated as the average carrying value at the beginning of each month during the year.

Goodwill Impairment

We incurred $207.6 million and $82.3 million in impairment charges during 2015 and 2014. The goodwill evaluation performed during the fourth quarter of 2015 indicated the estimated implied fair value of the Servicing reporting unit’s goodwill at the evaluation date was less than its book value, therefore requiring an impairment charge of $151.0 million . The goodwill evaluations performed in the second quarters of 2015 and 2014 indicated the estimated implied fair value of the Reverse Mortgage reporting unit’s goodwill at each evaluation date was less than its book value, therefore requiring impairment charges of $56.5 million and $82.3 million , respectively. As a result of these goodwill impairment charges, the Reverse Mortgage reporting unit no longer has goodwill. Refer to Note 13 in the Notes to Consolidated Financial Statements included in Item 8 for further discussion.

Gains (Losses) on Extinguishments

During 2015, we recognized a $4.7 million net gain on extinguishment of debt. We recognized a gain of $5.7 million related to the repurchase of Senior Notes with a carrying value of $35.7 million and an unpaid principal balance of $36.3 million for $30.0 million and a loss of $1.0 million related to the write-off of issue costs resulting from the voluntary payment of $50.0 million on the 2013 Term Loan.

During 2013, we recognized a $12.5 million loss on extinguishment of debt resulting from a $300.0 million early repayment of the 2012 Term Loan with proceeds from our Senior Notes and the refinancing of the remaining $1.4 billion 2012 Term Loan (including incremental borrowings) with our $1.5 billion 2013 Term Loan.

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Other Net Fair Value Gains

Other net fair value gains consists primarily of fair value gains and losses on the assets and liabilities of the Non-Residual Trusts and fluctuates generally based on changes in prepayment speeds, default rates, loss severity, LIBOR rates and discount rates. Other net fair value gains decreased $11.9 million in 2015 as compared to 2014 primarily as a result of the reduction of discount rates utilized in the valuations of the assets and liabilities of the Non-Residual Trusts in 2014 resulting from tightening of yields in the market. Other net fair value gains increased $13.2 million in 2014 as compared to 2013 primarily as a result of the aforementioned reduction of discount rates in 2014 as well as a $4.8 million loss incurred in 2013 related to an increase in the contingent earn-out liability related to a business acquisition.

Other Gains (Losses)

Other gains of $21.0 million for 2015 include an $11.8 million gain recognized on the sale of an investment which was accounted for using the equity method; an $8.9 million realized gain recognized on the sale of a trading security; a $3.1 million gain for consideration received for the contribution of Marix; and a $2.8 million loss recognized on the sale of our residual interests. In 2015, we received and subsequently sold a trading security as consideration for the sale of the excess servicing spread associated with certain servicing rights.

Income Tax Expense (Benefit)

Our effective tax rate will always differ from the U.S. statutory tax rate of 35% due to state and local taxes and non-deductible expenses. Refer to Note 24 in the Notes to Consolidated Financial Statements in Item 8 for a reconciliation of our effective tax rate to the U.S. statutory tax rate.

Income tax benefit increased $132.2 million in 2015 as compared to 2014 due primarily to the increase in loss before income taxes offset by the impact on income taxes for non-deductible expenses such as the impairment of goodwill of the Reverse Mortgage reporting unit. These items were partially offset by a lower release of uncertain tax positions associated with state and local taxes due to a lapse in the statute of limitations from $3.6 million in 2014 to $2.1 million in 2015.

The change of $168.4 million from income tax expense in 2013 to an income tax benefit in 2014 was due primarily to the change from income before income taxes in 2013 to a loss before income taxes in 2014, offset by the impact on income taxes for non-deductible expenses such as the goodwill impairment. In addition, during 2014 we released $3.6 million from the aforementioned liability for unrecognized tax benefits associated with state and local taxes.

Financial Condition — Comparison of Consolidated Financial Condition at December 31, 2015 to December 31, 2014

Our total assets and total liabilities decreased by $358.1 million and $86.1 million , respectively, at December 31, 2015 as compared to December 31, 2014 . The most significant changes in assets and liabilities are described below.

Residential loans at amortized cost decreased $773.1 million primarily as a result of the sale of our residual interests and the runoff of the overall related mortgage loan portfolio.

Residential loans at fair value increased $840.8 million primarily as a result of the growth in our reverse loan portfolio and higher fundings of mortgage loans which outpaced sales, offset in part by a lower fair value adjustment on reverse loans. The fair value adjustment decreased as a result of wider pricing spreads, partially offset by lower LIBOR.

Servicer and protective advances decreased $165.2 million primarily as a result of collections of servicer and protective advances.

Goodwill decreased $207.6 million due to a non-cash impairment charge to the asset carrying value recorded during the second and fourth quarters of 2015 . The impairment testing is performed on each of our reporting units on an annual basis, or more often if events or circumstances indicate that there may be impairment. At June 30, 2015, our analysis indicated impairment of the Reverse Mortgage reporting unit’s goodwill, and as such we recorded a goodwill impairment charge of $56.5 million . The primary cause of the goodwill impairment in the Reverse Mortgage reporting unit was the decline in the estimated fair value of the reporting unit as a result of operational challenges in its retail origination channel; a reduction in opportunities for additional sub-servicing business; a greater than originally anticipated deferral of cash flows to future years with respect to previously introduced product changes; recent regulatory developments that could impact the likelihood of curtailment events in future periods; increasing liquidity requirements for the repurchase of certain HECMs and real estate owned from Ginnie Mae securitization pools; and an increase in obligations surrounding curtailment-related items existing at the time of the RMS acquisition. These factors resulted in reduced and delayed cash flows in the reverse mortgage business.

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Deferred tax asset, net of $108.1 million in 2015 changed by $194.7 million from a deferred tax liability, net of $86.6 million in 2014. The change in deferred taxes was primarily a result of the current year operating loss, which increased the net operating loss carryforwards; the tax impact of the sale of our residual interests; differences in tax and GAAP bases and recovery methods for servicing rights; the sales of excess servicing spreads and servicing rights during the year; and an increase in the curtailment liability primarily related to the reverse mortgage business. These items were partially offset by decreases in accrued expenses related to legal and regulatory matters and tax amortization of deductible goodwill.

Servicing advance liabilities, which are utilized to finance servicer and protective advances, decreased $136.6 million primarily as a result of collections of servicer and protective advances, which are used to settle balances outstanding.

Mortgage-backed debt decreased $688.1 million primarily as a result of the sale of our residual interests, which required the deconsolidation of the related mortgage-backed debt.

HMBS related obligations increased $695.5 million due primarily to the securitization of reverse loans, partially offset by the repurchase of certain HECMs and real estate owned from securitization pools.

Non-GAAP Financial Measures

We manage our Company in three reportable segments: Servicing, Originations and Reverse Mortgage. We measure the performance of our business segments through the following measures: income (loss) before income taxes, Adjusted Earnings, and Adjusted EBITDA. Management considers Adjusted Earnings and Adjusted EBITDA, both non-GAAP financial measures, to be important in the evaluation of our business segments and of the Company as a whole, as well as for allocating capital resources to our segments. Adjusted Earnings and Adjusted EBITDA are supplemental metrics utilized by management to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use these measures when analyzing our operating performance. Adjusted Earnings and Adjusted EBITDA are not presentations made in accordance with GAAP and our use of these measures and terms may vary from other companies in our industry.

Adjusted Earnings is defined as income (loss) before income taxes plus changes in fair value due to changes in valuation inputs and other assumptions; certain depreciation and amortization costs related to the increased basis in assets (including servicing rights and sub-servicing contracts) acquired within business combination transactions (or step-up depreciation and amortization); goodwill impairment, if any; the provision for curtailment expense, net of expected third-party recoveries, as described in footnote two to the Adjusted Earnings table below; share-based compensation expense; non-cash interest expense; restructuring costs; estimated settlements and costs for certain legal and regulatory matters; fair value to cash adjustments for reverse loans; and select other cash and non-cash adjustments primarily including certain non-recurring costs; severance; gain or loss on extinguishment of debt; the net impact of the Non-Residual Trusts; and transaction and integration costs. Adjusted Earnings excludes unrealized changes in fair value of MSRs that are based on projections of expected future cash flows and prepayments. Adjusted Earnings includes both cash and non-cash gains from mortgage loan origination activities. Non-cash gains are net of non-cash charges or reserves provided. Adjusted Earnings includes cash generated from reverse mortgage origination activities. Adjusted Earnings may from time to time also include other adjustments, as applicable based upon facts and circumstances, consistent with the intent of providing investors with a supplemental means of evaluating our operating performance.

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Adjusted EBITDA eliminates the effects of financing, income taxes and depreciation and amortization. Adjusted EBITDA is defined as income (loss) before income taxes; amortization of servicing rights and other fair value adjustments; interest expense on corporate debt; depreciation and amortization; goodwill impairment, if any; the provision for curtailment expense, net of expected third-party recoveries, as described in footnote one to the Adjusted EBITDA table below; share-based compensation expense; restructuring costs; estimated settlements and costs for certain legal and regulatory matters; fair value to cash adjustments for reverse loans; and select other cash and non-cash adjustments primarily certain non-recurring costs; the net provision for the repurchase of loans sold; non-cash interest income; severance; gain or loss on extinguishment of debt; interest income on unrestricted cash and cash equivalents; the net impact of the Non-Residual Trusts; the provision for loan losses; Residual Trust cash flows; transaction and integration costs; and servicing fee economics. Adjusted EBITDA includes both cash and non-cash gains from mortgage loan origination activities. Adjusted EBITDA excludes the impact of fair value option accounting on certain assets and liabilities and includes cash generated from reverse mortgage origination activities. Adjusted EBITDA may also include other adjustments, as applicable based upon facts and circumstances, consistent with the intent of providing investors a supplemental means of evaluating our operating performance.

Adjusted Earnings and Adjusted EBITDA should not be considered as alternatives to (i) net income (loss) or any other performance measures determined in accordance with GAAP or (ii) operating cash flows determined in accordance with GAAP. Adjusted Earnings and Adjusted EBITDA have important limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Some of the limitations of these metrics are:


•	Adjusted Earnings and Adjusted EBITDA do not reflect cash expenditures for long-term assets and other items that have been and will be incurred, future requirements for capital expenditures or contractual commitments;


•	Adjusted Earnings and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;


•	Adjusted Earnings and Adjusted EBITDA do not reflect certain tax payments that represent reductions in cash available to us;


•	Adjusted Earnings and Adjusted EBITDA do not reflect any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future;


•	Adjusted Earnings and Adjusted EBITDA do not reflect non-cash compensation which is and will remain a key element of our overall long-term incentive compensation package;


•	Adjusted Earnings and Adjusted EBITDA do not reflect the change in fair value due to changes in valuation inputs and other assumptions;


•	Adjusted EBITDA does not reflect the change in fair value resulting from the realization of expected cash flows; and


•	Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our servicing rights related liabilities and corporate debt, although it does reflect interest expense associated with our servicing advance liabilities, master repurchase agreements, mortgage-backed debt, and HMBS related obligations.

Because of these limitations, Adjusted Earnings and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted Earnings and Adjusted EBITDA only as supplements. Users of our financial statements are cautioned not to place undue reliance on Adjusted Earnings and Adjusted EBITDA.

The following tables reconcile Adjusted Earnings and Adjusted EBITDA to loss before income taxes, which we consider to be the most directly comparable GAAP financial measure to Adjusted Earnings and Adjusted EBITDA (in thousands):

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Adjusted Earnings



	For the Year Ended December 31, 2015
Loss before income taxes	$	(404,426	)
Adjustments to loss
Goodwill impairment	207,557
Changes in fair value due to changes in valuation inputs and other assumptions	137,198
Step-up depreciation and amortization ⁽¹⁾	59,264
Curtailment expense ⁽²⁾	30,419
Legal and regulatory matters ⁽³⁾	26,020
Share-based compensation expense	20,937
Non-cash interest expense	12,098
Restructuring costs ⁽⁴⁾	11,561
Fair value to cash adjustment for reverse loans ⁽⁵⁾	2,291
Other ⁽⁶⁾	16,944
Sub-total	524,289
Adjusted Earnings	$	119,863

__________


(1)	Represents depreciation and amortization costs related to the increased basis in assets, including servicing and sub-servicing rights, acquired within business combination transactions.

(2)

Represents the provision for curtailment expense, net of expected third-party recoveries, related to historical practices at RMS which have led to increasing exposure for historical periods as regulatory requirements are clarified. Current practices have been revised in order to minimize current and future exposure to curtailable events. Our non-GAAP measures are not adjusted for accruals for current period curtailable events as such accruals are considered part of ongoing operating results of the business.


(3)	Represents estimated settlement amounts for certain legal and regulatory matters outside of the normal course of business as well as legal costs and expenses associated with these matters.

(4)

Restructuring costs include expenses related to the closing of offices and the termination of certain employees as well as other expenses to institute efficiencies. Restructuring costs incurred in 2015 to improve efficiencies within the organization included re-branding the mortgage loan originations business by consolidating Ditech Mortgage Corp and Green Tree Servicing into one legal entity with one brand, Ditech, a Walter Company, and measures taken to restructure the mortgage loan servicing operations and improve the profitability of the reverse mortgage business by streamlining its geographic footprint and strengthening its retail originations channel. These costs also include those relating to our exit from the consumer retail channel of the Originations segment.


(5)	Represents the non-cash fair value adjustment to arrive at cash generated from reverse mortgage origination activities.


(6)	Includes certain non-recurring costs, severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts and transaction and integration costs.

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Adjusted EBITDA



	For the Year Ended December 31, 2015
Loss before income taxes	$	(404,426	)
Adjustments to EBITDA
Amortization of servicing rights and other fair value adjustments	408,755
Goodwill impairment	207,557
Interest expense	157,817
Depreciation and amortization	69,128
Curtailment expense ⁽¹⁾	30,419
Legal and regulatory matters ⁽²⁾	26,020
Share-based compensation expense	20,937
Restructuring costs ⁽³⁾	11,561
Fair value to cash adjustment for reverse loans ⁽⁴⁾	2,291
Other ⁽⁵⁾	19,660
Sub-total	954,145
Adjusted EBITDA	$	549,719

__________

(1)

Represents the provision for curtailment expense, net of expected third-party recoveries, related to historical practices at RMS that have led to increasing exposure for historical periods as regulatory requirements are clarified. Current practices have been revised in order to minimize current and future exposure to curtailable events. Our non-GAAP measures are not adjusted for accruals for current period curtailable events as such accruals are considered part of ongoing operating results of the business.


(2)	Represents estimated settlement amounts for certain legal and regulatory matters outside of the normal course of business as well as legal costs and expenses associated with these matters.

(3)


(4)	Represents the non-cash fair value adjustment to arrive at cash generated from reverse mortgage origination activities.


(5)	Includes certain non-recurring costs, the net provision for the repurchase of loans sold, non-cash interest income, severance, gain on extinguishment of debt, interest income on unrestricted cash and cash equivalents, the net impact of the Non-Residual Trusts, the provision for loan losses, Residual Trust cash flows, transaction and integration costs and servicing fee economics.

Business Segment Results

In calculating income (loss) before income taxes for our segments, we allocate indirect expenses to our business segments. Indirect expenses are allocated to our Servicing, Originations, Reverse Mortgage and certain non-reportable segments based on headcount.

We reconcile our income (loss) before income taxes for our business segments to our GAAP consolidated income (loss) before taxes and report the financial results of our Non-Residual Trusts, other non-reportable operating segments and certain corporate expenses as other activity. Refer below for further information on the results of operations for our Servicing, Originations and Reverse Mortgage segments. For a reconciliation of our income (loss) before income taxes for our business segments to our GAAP consolidated income (loss) before income taxes, refer to Note 27 in the Notes to Consolidated Financial Statements included in Item 8.

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Reconciliation of GAAP Consolidated Income (Loss) Before Income Taxes to Adjusted Earnings (Loss) and Adjusted EBITDA (in thousands):



	For the Year Ended December 31, 2015
	Servicing			Originations		Reverse Mortgage			Other			Total Consolidated
Income (loss) before income taxes	$	(269,770	)	$	123,536	$	(112,337	)	$	(145,855	)	$	(404,426	)

Adjustments to earnings (loss)
Goodwill impairment	151,018			—		56,539			—			207,557
Changes in fair value due to changes in valuation inputs and other assumptions	137,198			—		—			—			137,198
Step-up depreciation and amortization	27,697			7,424		5,178			—			40,299
Curtailment expense	—			—		30,419			—			30,419
Legal and regulatory matters	20,445			—		5,575			—			26,020
Share-based compensation expense	12,700			5,557		2,395			285			20,937
Step-up amortization of sub-servicing rights	18,965			—		—			—			18,965
Non-cash interest expense	1,283			—		—			10,815			12,098
Restructuring costs	6,462			2,608		1,640			851			11,561
Fair value to cash adjustment for reverse loans	—			—		2,291			—			2,291
Other	3,776			1,272		349			11,547			16,944
Total adjustments	379,544			16,861		104,386			23,498			524,289
Adjusted Earnings (Loss)	109,774			140,397		(7,951		)	(122,357		)	119,863

Adjustments to EBITDA
Amortization of servicing rights and other fair value adjustments	250,539			—		2,053			—			252,592
Interest expense on debt	8,779			—		2			136,938			145,719
Depreciation and amortization	17,740			8,387		2,687			15			28,829
Other	(6,556		)	8,827		139			306			2,716
Total adjustments	270,502			17,214		4,881			137,259			429,856
Adjusted EBITDA	$	380,276		$	157,611	$	(3,070	)	$	14,902		$	549,719

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	For the Year Ended December 31, 2014
	Servicing			Originations			Reverse Mortgage			Other ⁽¹⁾			Total Consolidated
Income (loss) before income taxes	$	(29,287	)	$	117,104		$	(101,168	)	$	(105,989	)	$	(119,340	)

Adjustments to earnings (loss)
Goodwill impairment	—			—			82,269			—			82,269
Changes in fair value due to changes in valuation inputs and other assumptions	114,759			—			—			—			114,759
Step-up depreciation and amortization	26,587			9,903			7,081			1			43,572
Curtailment expense	—			—			1,460			—			1,460
Legal and regulatory matters	75,564			907			24,297			—			100,768
Share-based compensation expense	8,942			3,445			2,185			(39		)	14,533
Step-up amortization of sub-servicing rights	33,317			—			—			—			33,317
Non-cash interest expense	2,326			—			—			9,755			12,081
Restructuring costs	1,657			2,887			—			—			4,544
Fair value to cash adjustment for reverse loans	—			—			(24,602		)	—			(24,602		)
Other	963			4,049			4,485			(7,091		)	2,406
Total adjustments	264,115			21,191			97,175			2,626			385,107
Adjusted Earnings (Loss)	234,828			138,295			(3,993		)	(103,363		)	265,767

Adjustments to EBITDA
Amortization of servicing rights and other fair value adjustments	156,131			—			2,683			—			158,814
Interest expense on debt	5,003			—			26			137,878			142,907
Depreciation and amortization	19,746			7,187			2,203			13			29,149
Other	8,741			(1,165		)	(73		)	44			7,547
Total adjustments	189,621			6,022			4,839			137,935			338,417
Adjusted EBITDA	$	424,449		$	144,317		$	846		$	34,572		$	604,184

__________


(1)	Our Other non-reportable segment includes $36.8 million in asset management performance fees collected and earned in connection with the asset management of a fund.

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	For the Year Ended December 31, 2013
	Servicing			Originations		Reverse Mortgage			Other			Total Consolidated
Income (loss) before income taxes	$	345,954		$	226,395	$	5,201		$	(164,732	)	$	412,818

Adjustments to earnings (loss)
Changes in fair value due to changes in valuation inputs and other assumptions	(153,331		)	—		—			—			(153,331		)
Step-up depreciation and amortization	34,261			7,642		9,546			1			51,450
Curtailment expense	—			—		8,894			—			8,894
Share-based compensation expense	8,005			2,357		1,019			1,630			13,011
Step-up amortization of sub-servicing rights	30,405			—		—			—			30,405
Non-cash interest expense	3,495			—		—			8,800			12,295
Fair value to cash adjustment for reverse loans	—			—		17,995			—			17,995
Debt issuance costs not capitalized	—			—		—			15,614			15,614
Loss on debt extinguishment	—			—		—			12,489			12,489
Other	463			—		2,248			17,668			20,379
Total adjustments	(76,702		)	9,999		39,702			56,202			29,201
Adjusted Earnings (Loss)	269,252			236,394		44,903			(108,530		)	442,019

Adjustments to EBITDA
Amortization of servicing rights and other fair value adjustments	113,926			—		3,526			—			117,452
Interest expense on debt	169			—		40			114,517			114,726
Depreciation and amortization	16,931			1,064		1,573			9			19,577
Other	(9,607		)	7,738		(365		)	208			(2,026		)
Total adjustments	121,419			8,802		4,774			114,734			249,729
Adjusted EBITDA	$	390,671		$	245,196	$	49,677		$	6,204		$	691,748

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Servicing

Provided below is a summary of results of operations, Adjusted Earnings and Adjusted EBITDA for our Servicing segment (dollars in thousands):



	For the Years Ended December 31,									Variance
	For the Years Ended December 31,									2015 vs. 2014					2014 vs. 2013
	2015			2014			2013			$			%		$			%
Net servicing revenue and fees
Third parties	$	453,325		$	566,064		$	756,047		$	(112,739	)	(20	)%	$	(189,983	)	(25	)%
Intercompany	9,219			9,897			8,133			(678		)	(7	)%	1,764			22	%
Total net servicing revenue and fees	462,544			575,961			764,180			(113,417		)	(20	)%	(188,219		)	(25	)%
Interest income on loans	74,303			134,472			144,651			(60,169		)	(45	)%	(10,179		)	(7	)%
Insurance revenue	47,201			71,010			84,478			(23,809		)	(34	)%	(13,468		)	(16	)%
Intersegment retention revenue	30,751			40,546			59,891			(9,795		)	(24	)%	(19,345		)	(32	)%
Net gains on sales of loans	3,699			—			—			3,699			n/m		—			—	%
Other revenues	51,005			35,445			7,543			15,560			44	%	27,902			370	%
Total revenues	669,503			857,434			1,060,743			(187,931		)	(22	)%	(203,309		)	(19	)%
General and administrative and allocated indirect expenses	387,275			415,124			283,353			(27,849		)	(7	)%	131,771			47	%
Salaries and benefits	270,190			293,686			258,809			(23,496		)	(8	)%	34,877			13	%
Goodwill impairment	151,018			—			—			151,018			n/m		—			—	%
Interest expense	85,482			121,856			112,895			(36,374		)	(30	)%	8,961			8	%
Depreciation and amortization	45,437			46,333			51,192			(896		)	(2	)%	(4,859		)	(9	)%
Other expenses, net	6,080			8,182			7,871			(2,102		)	(26	)%	311			4	%
Total expenses	945,482			885,181			714,120			60,301			7	%	171,061			24	%
Other net fair value gains (losses)	75			(796		)	(669		)	871			(109	)%	(127		)	19	%
Other gains (losses)	6,134			(744		)	—			6,878			(924	)%	(744		)	n/m
Income (loss) before income taxes	(269,770		)	(29,287		)	345,954			(240,483		)	821	%	(375,241		)	(108	)%

Adjustments to earnings (loss)
Goodwill impairment	151,018			—			—			151,018			n/m		—			—	%
Changes in fair value due to changes in valuation inputs and other assumptions	137,198			114,759			(153,331		)	22,439			20	%	268,090			(175	)%
Step-up depreciation and amortization	27,697			26,587			34,261			1,110			4	%	(7,674		)	(22	)%
Legal and regulatory matters	20,445			75,564			—			(55,119		)	(73	)%	75,564			n/m
Step-up amortization of sub-servicing rights	18,965			33,317			30,405			(14,352		)	(43	)%	2,912			10	%
Share-based compensation expense	12,700			8,942			8,005			3,758			42	%	937			12	%
Restructuring costs	6,462			1,657			—			4,805			290	%	1,657			n/m
Non-cash interest expense	1,283			2,326			3,495			(1,043		)	(45	)%	(1,169		)	(33	)%
Other	3,776			963			463			2,813			292	%	500			108	%
Total adjustments	379,544			264,115			(76,702		)	115,429			44	%	340,817			(444	)%
Adjusted Earnings	109,774			234,828			269,252			(125,054		)	(53	)%	(34,424		)	(13	)%

Adjustments to EBITDA
Amortization of servicing rights and other fair value adjustments	250,539			156,131			113,926			94,408			60	%	42,205			37	%
Depreciation and amortization	17,740			19,746			16,931			(2,006		)	(10	)%	2,815			17	%
Interest expense on debt	8,779			5,003			169			3,776			75	%	4,834			n/m
Other	(6,556		)	8,741			(9,607		)	(15,297		)	(175	)%	18,348			(191	)%
Total adjustments	270,502			189,621			121,419			80,881			43	%	68,202			56	%
Adjusted EBITDA	$	380,276		$	424,449		$	390,671		$	(44,173	)	(10	)%	$	33,778		9	%

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Mortgage Loan Servicing Portfolio

Provided below are summaries of the activity in our mortgage loan servicing portfolio (dollars in thousands):



	For the Years Ended December 31,
	2015					2014
	Number of Accounts		Unpaid Principal Balance			Number of Accounts		Unpaid Principal Balance
Third-party servicing portfolio ⁽¹⁾
Balance at beginning of the year	2,142,689		$	234,905,729		1,894,446		$	198,828,470
Acquisition of pool of Fannie Mae MSRs	—		—			254,960		27,559,108
Acquisition of EverBank net assets	—		—			72,176		9,756,509
Loan sales with servicing retained	84,368		18,578,484			45,760		10,074,277
Other new business added ^{(2) (3)}	150,579		28,620,409			176,680		23,751,034
Payoffs and sales, net ^{(2) (4) (5)}	(290,018	)	(37,980,310		)	(301,333	)	(35,063,669		)
Balance at end of the year	2,087,618		244,124,312			2,142,689		234,905,729
On-balance sheet residential loans and real estate owned ⁽⁶⁾	36,857		2,439,806			56,461		3,175,298
Total mortgage loan servicing portfolio	2,124,475		$	246,564,118		2,199,150		$	238,081,027

__________

(1)

Third-party servicing includes servicing rights capitalized, sub-servicing rights capitalized and sub-servicing rights not capitalized. Sub-servicing rights capitalized consist of contracts acquired through business combinations whereby the benefits from the contract are greater than adequate compensation for performing the servicing. Refer to Note 2 to the Notes to Consolidated Financial Statements for additional information.


(2)	Consists of activities associated with servicing and sub-servicing contracts.


(3)	Includes the loans of the seven Residual Trusts that were deconsolidated from our consolidated balance sheet upon sale in 2015 of our residual interests in those trusts.


(4)	Amounts presented are net of loan sales associated with servicing retained multi-channel recapture activities of $6.4 billion and $8.8 billion in 2015 and 2014 , respectively.


(5)	Includes the impact of the sale of servicing rights associated with 4,551 accounts and $968.4 million in unpaid principal balance during 2014.


(6)	On-balance sheet residential loans and real estate owned primarily includes mortgage loans held for sale as well as assets of the Non-Residual Trusts and Residual Trusts.

The portfolio disappearance rate, consisting of contractual payments, voluntary prepayments and defaults, of the total mortgage loan portfolio, was 14.23% in 2015 .

The Servicing segment receives intercompany servicing fees related to on-balance sheet assets of the Originations segment and the Other non-reportable segment. Provided below are summaries of the composition of our mortgage loan servicing portfolio (dollars in thousands):



	At December 31, 2015
	Number of Accounts	Unpaid Principal Balance		Weighted- Average Contractual Servicing Fee		30 Days or More Past Due ⁽¹⁾
Third-party servicing portfolio
First lien mortgages	1,676,307	$	231,637,730	0.27	%	9.09	%
Second lien mortgages	179,594	5,823,302		0.46	%	3.41	%
Manufactured housing and other	231,717	6,663,280		1.09	%	6.42	%
Total accounts serviced for third parties ^{(2) (4)}	2,087,618	244,124,312		0.30	%	8.88	%
On-balance sheet residential loans and real estate owned ⁽³⁾	36,857	2,439,806				5.07	%
Total mortgage loan servicing portfolio	2,124,475	$	246,564,118			8.85	%

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	At December 31, 2014
	Number of Accounts	Unpaid Principal Balance		Weighted- Average Contractual Servicing Fee		30 Days or More Past Due ⁽¹⁾
Third-party servicing portfolio
First lien mortgages	1,648,932	$	220,011,843	0.26	%	9.93	%
Second lien mortgages	226,002	7,277,171		0.48	%	2.80	%
Manufactured housing and other	267,755	7,616,715		1.10	%	4.43	%
Total accounts serviced for third parties ⁽²⁾	2,142,689	234,905,729		0.30	%	9.53	%
On-balance sheet residential loans and real estate owned ⁽³⁾	56,461	3,175,298				5.07	%
Total mortgage loan servicing portfolio	2,199,150	$	238,081,027			9.47	%

__________

(1)

Past due status is measured based on either the MBA method or the OTS method as specified in the servicing agreement. Under the MBA method, a loan is considered past due if its monthly payment is not received by the end of the day immediately preceding the loan's next due date. Under the OTS method, a loan is considered past due if its monthly payment is not received by the loan's due date in the following month. Past due status is based on the current contractual due date of the loan, except in the case of an approved repayment plan, including a plan approved by the bankruptcy court, or a completed loan modification, in which case past due status is based on the modified due date or status of the loan.


(2)	Consists of $194.8 billion and $49.3 billion in unpaid principal balance associated with servicing and sub-servicing contracts, respectively, at December 31, 2015 and $179.7 billion and $55.2 billion, respectively, at December 31, 2014 .


(3)	Includes residential loans and real estate owned held by the Servicing segment for which it does not recognize servicing fees.


(4)	At December 31, 2015 includes $6.6 billion in unpaid principal balance of sub-servicing performed for WCO and $1.7 billion associated with servicing rights sold to WCO.

The unpaid principal balance of our third-party servicing portfolio increased $9.2 billion at December 31, 2015 as compared to December 31, 2014 primarily due to our originations sales with servicing retained and servicing and sub-servicing portfolio acquisitions, partially offset by runoff of the portfolio. Sub-servicing portfolio acquisitions include new sub-servicing performed for WCO. The decrease in the unpaid principal balance of our on-balance sheet residential loans and real estate owned of $735.5 million can be attributed to the sale of our residual interests, which resulted in the deconsolidation of the related loans, combined with the overall portfolio runoff of the assets held by the Residual and Non-Residual Trusts, partially offset by an increase in mortgage loans held for sale of $213.8 million . The unpaid principal balance of loans associated with the sale of the seven Residual Trusts is included in our third-party servicing portfolio at December 31, 2015 since we continue to service these loans.

The overall delinquencies associated with our third-party servicing portfolio decreased at December 31, 2015 as compared to December 31, 2014 primarily because the new loans we originated and acquired have experienced a lower delinquency rate than our historical servicing portfolio had experienced.

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Net Servicing Revenue and Fees

A summary of net servicing revenue and fees for our Servicing segment is provided below (dollars in thousands):



	For the Years Ended December 31,									Variance
	For the Years Ended December 31,									2015 vs. 2014					2014 vs. 2013
	2015			2014			2013			$			%		$			%
Servicing fees	$	703,987		$	672,189		$	541,007		$	31,798		5	%	$	131,182		24	%
Incentive and performance fees	94,829			135,892			141,278			(41,063		)	(30	)%	(5,386		)	(4	)%
Ancillary and other fees	98,235			84,600			72,894			13,635			16	%	11,706			16	%
Servicing revenue and fees	897,051			892,681			755,179			4,370			—	%	137,502			18	%
Changes in valuation inputs or other assumptions ⁽¹⁾	(157,262		)	(124,471		)	153,331			(32,791		)	26	%	(277,802		)	(181	)%
Other changes in fair value ⁽²⁾	(244,730		)	(149,031		)	(105,273		)	(95,699		)	64	%	(43,758		)	42	%
Change in fair value of servicing rights	(401,992		)	(273,502		)	48,058			(128,490		)	47	%	(321,560		)	(669	)%
Amortization of servicing rights	(24,774		)	(40,418		)	(39,057		)	15,644			(39	)%	(1,361		)	3	%
Change in fair value of servicing rights related liabilities ⁽³⁾	(7,741		)	(2,800		)	—			(4,941		)	176	%	(2,800		)	n/m
Net servicing revenue and fees	$	462,544		$	575,961		$	764,180		$	(113,417	)	(20	)%	$	(188,219	)	(25	)%

__________


(1)	Represents the net change in servicing rights carried at fair value resulting primarily from market-driven changes in interest rates and prepayment speeds.


(2)	Represents the realization of expected cash flows over time and includes $12.9 million in servicing rights transferred to the Company for no consideration during 2013.


(3)	Includes interest expense on servicing rights related liabilities, which represents the accretion of fair value, of $9.3 million and $4.9 million during 2015 and 2014 , respectively.

2015 Compared to 2014

Servicing fees increased $31.8 million in 2015 as compared to 2014 primarily due to growth in the third-party servicing portfolio resulting from portfolio acquisitions and servicing rights capitalized as a result of our loan origination activities, partially offset by runoff of the servicing portfolio. Additionally there was a $13.1 million benefit recognized during 2014 from the settlement of differences in views between a prior servicer and the Company on how certain fees were recognized under a contract that was not recognized during the current year. Average loans serviced increased by $17.1 billion , or 8% , in 2015 as compared to 2014 .

Incentive and performance fees include modification fees, fees earned under HAMP, asset recovery income, and other incentives. Modification fees and fees earned under HAMP decreased $30.4 million in 2015 as compared to 2014 due primarily to a lower volume of completed modifications and lower fees for maintenance of performing modified loans no longer eligible for HAMP incentive fees. We expect to modify fewer loans in the future as a result of the scheduled termination of HAMP in December 2016 and there being a fewer number of loans in our servicing portfolio eligible for modification. In addition, asset recovery income decreased $7.9 million for 2015 as compared to 2014 as a result of lower gross collections due primarily to the runoff of the related loans managed by the Servicing segment. Incentives relating to the performance of certain loan pools serviced by us decreased $2.8 million for 2015 as compared to 2014. We expect incentives relating to the performance of loan pools serviced by us to continue to decline as a result of market and other factors, including changes in incentive programs, runoff of the related loan portfolio and improving economic conditions, which may reduce the opportunity to earn these incentives.

Ancillary and other fees, which primarily include late fees and expedited payment fees, increased $13.6 million in 2015 as compared to 2014 due primarily to growth in the servicing portfolio.

2014 Compared to 2013

Servicing fees increased $131.2 million in 2014 as compared to 2013 primarily due to growth in the third-party servicing portfolio resulting from portfolio acquisitions and servicing rights capitalized as a result of our loan origination activities, partially offset by runoff of the servicing portfolio. Average loans serviced increased by $38.2 billion, or 20%, in 2014 as compared to 2013.

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Incentives relating to the performance of certain loan pools serviced by us decreased $9.1 million in 2014 as compared to 2013. Asset recovery income decreased by $5.1 million in 2014 as compared to 2013 as a result of lower gross collections due primarily to the runoff of the related loans managed by the Servicing segment. Modification fees and fees earned under HAMP increased $8.8 million in 2014 as compared to 2013 due to a higher volume of completed modifications as well as successful maintenance of the modified loans under performing status.

Ancillary and other fees increased $11.7 million in 2014 as compared to 2013 due primarily to growth in the servicing portfolio.

Provided below is a summary of the average unpaid principal balance of loans serviced and the related average servicing fee for our Servicing segment (dollars in thousands):



	For the Years Ended December 31,									Variance
	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Average unpaid principal balance of loans serviced ⁽¹⁾	$	244,736,114		$	227,589,645		$	189,365,728		$	17,146,469		$	38,223,917
Average servicing fee ⁽²⁾	0.29		%	0.30		%	0.29		%	(0.01		)%	0.01		%

__________


(1)	Average unpaid principal balance of loans serviced is calculated as the average of the average monthly unpaid principal balances. The average unpaid principal balance presented above includes on-balance sheet loans owned by the Servicing segment for which it does not earn a servicing fee.


(2)	Average servicing fee is calculated by dividing gross servicing fees by the average unpaid principal balance of loans serviced.

The decrease in average servicing fee of one basis point for 2015 as compared to 2014, as well as the increase in average servicing fee of one basis point for 2014 as compared to 2013, related primarily to a benefit of $13.1 million recognized during 2014 from the settlement of differences in views between a prior servicer and the Company on how certain fees were recognized under a contract.

Servicing Rights Carried at Fair Value

Changes in the fair value of servicing rights, which reflect our quarterly valuation process, have a significant effect on net servicing revenue and fees. A summary of key economic inputs and assumptions used in estimating the fair value of servicing rights carried at fair value is presented below (dollars in thousands):



	December 31,									Variance
	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Servicing rights at fair value	$	1,682,016		$	1,599,541		$	1,131,124		$	82,475		$	468,417
Unpaid principal balance of accounts serviced	183,506,006			168,832,342			130,123,288			14,673,664			38,709,054
Inputs and assumptions
Weighted-average remaining life in years	6.3			6.6			6.8			(0.3		)	(0.2		)
Weighted-average stated borrower interest rate on underlying collateral	4.31		%	4.65		%	5.20		%	(0.34		)%	(0.55		)%
Weighted-average discount rate	10.88		%	9.55		%	9.76		%	1.33		%	(0.21		)%
Conditional prepayment rate	9.94		%	7.87		%	7.06		%	2.07		%	0.81		%
Conditional default rate	1.06		%	2.36		%	2.90		%	(1.30		)%	(0.54		)%

Year Ended December 31, 2015

The increase in servicing rights carried at fair value at December 31, 2015 as compared to December 31, 2014 related primarily to $544.6 million in servicing right portfolio acquisitions and servicing rights capitalized upon sales of loans, partially offset by a reduction in fair value of $402.0 million and sales of servicing rights of $60.1 million . The reduction in fair value of these servicing rights in 2015 was attributed to a loss of $157.3 million in changes in valuation inputs or other assumptions and a loss of $244.7 million in other changes in fair value which reflect the impact of the realization of expected cash flows resulting from both regularly scheduled and unscheduled payments and payoffs of loan principal.

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The loss resulting from changes in valuation inputs or other assumptions of $157.3 million in 2015 was due primarily to a higher discount rate at December 31, 2015 as compared to December 31, 2014, an increase in the assumed conditional prepayment rate and an increase in FHFA's house pricing index. The higher assumed conditional prepayment rate was primarily due to actual interest rates being lower than what the market forward interest rate curves had projected for future periods as of December 31, 2014. In addition, the assumed conditional prepayment rate was impacted by a change in mix with the growth of the Freddie Mac and Ginnie Mae servicing rights. The conditional default assumption was lower primarily as a result of the aforementioned refinement of our valuation model.

Other changes in fair value above consist of the realization of expected cash flows. The increase in realization of expected cash flows of $95.7 million in 2015 as compared to 2014 was due primarily to faster prepayment speeds than anticipated and a larger servicing portfolio resulting from acquisitions of servicing rights, including those from loan origination activities.

Year Ended December 31, 2014

The loss resulting from changes in valuation inputs or other assumptions of $124.5 million in 2014 was due primarily to a higher assumed conditional prepayment rate at December 31, 2014 as compared to December 31, 2013, which was largely driven by a lower interest rate environment and an increase in the FHFA’s housing price index, partially offset by lower future HARP opportunities. There was a decline in the assumed conditional default rate, which was driven by portfolio acquisitions in 2014 that had lower risk profiles, and accordingly, lower assumed conditional default rates. Discount rates were reduced based on observable market rates.

Included in other changes in fair value above is the realization of expected cash flows and, during 2013, $12.9 million in servicing rights transferred to us for no consideration. The increase in realization of expected cash flows of $30.9 million in 2014 as compared to 2013 was due primarily to acquisitions of servicing rights, including those from loan origination activities, partially offset by slower prepayment speeds than anticipated.

Year Ended December 31, 2013

Our servicing rights carried at fair value primarily consist of servicing rights acquired since January 1, 2013. The gain resulting from changes in valuation inputs or other assumptions of $153.3 million during 2013 was due primarily to overall reductions to assumed conditional prepayment rates and conditional default rates since the acquisitions of the related servicing rights. The decline in assumed conditional prepayment rates resulted primarily from a higher interest rate environment, which was partially offset by the impact of HARP being extended in April 2013 through December 2015 and the increase in the FHFA’s housing price index. The decline in assumed conditional default rates was due primarily to actual performance and the addition of lower delinquency loans to our servicing portfolio. Assumed discount rates remained relatively flat since the acquisitions of servicing rights during 2013. The extension of HAMP in May 2013 to December 2015 also contributed to the change in valuation inputs and other assumptions given expected growth in incentive fees.

Servicing Rights Related Liabilities

The loss in fair value relating to our servicing rights related liabilities of $7.7 million for 2015 is comprised of $7.7 million in loss in fair value relating to excess servicing spread liabilities and less than $0.1 million in loss in fair value relating to servicing rights financing. The loss in fair value relating to our servicing rights related liabilities of $2.8 million for 2014 is entirely related to an excess servicing spread liability. The loss in fair value relating to excess servicing rights liabilities increased by $4.9 million in 2015 as compared to 2014 due primarily to the change in interest expense which relates to the accretion of fair value. The higher interest expense was mainly due to having the 2014 excess servicing spread financing the entire twelve month period of 2015 as opposed to six months in 2014.

Interest Income on Loans

Interest income decreased $60.2 million in 2015 as compared to 2014 primarily due to the sale of our residual interests in 2015, runoff of the overall mortgage loan portfolio and a lower yield on loans due to an increase in delinquencies that are 90 days or more past due.

Interest income decreased $10.2 million in 2014 as compared to 2013 due primarily to runoff of the overall mortgage loan portfolio and a lower yield on loans due to an increase in delinquencies that are 90 days or more past due.

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Insurance Revenue

Insurance revenue decreased $23.8 million in 2015 as compared to 2014 and $13.5 million in 2014 as compared to 2013 primarily as a result of changes in GSE requirements and regulations that limited our ability to charge commissions for lender-placed insurance policies during 2014 that led to a decrease in our sales commissions related to lender-placed insurance policies beginning in June 2014 as well as runoff of existing policies. During 2014, these lower commissions were partially offset by commissions earned from an increase in lender-placed insurance policies issued prior to the effective date of the regulatory changes related to the 2013 and early 2014 bulk servicing right acquisitions.

Intersegment Retention Revenue

Intersegment retention revenue relates to fees for Servicing segment charges to our Originations segment for loan originations completed by the Originations segment that resulted from access to the Servicing segment’s servicing portfolio for which there was a related capitalized servicing right. The decline in intersegment retention revenue of $9.8 million in 2015 as compared to 2014 and $19.3 million in 2014 as compared to 2013 was due primarily to the decline in funded retention volume for which there was an existing capitalized servicing right.

Net Gains on Sales of Loans

Net gains on sales of loans for the Company includes realized and unrealized gains and losses on loans as well as the changes in fair value of our IRLCs and other freestanding derivatives. A substantial portion of our gain on sales of loans is recognized at the time we commit to originate or purchase a loan at specified terms as we recognize the value of the IRLC at the time of commitment. The fair value of the IRLC includes our estimate of the fair value of the servicing right we expect to receive upon sale of the loan.

Beginning in 2015, the Originations segment recognizes the initial fair value of the entire commitment, including the servicing rights component, on the date of the commitment, while the Servicing segment recognizes the change in fair value of the servicing rights component of our IRLCs and loans held for sale that occurs subsequent to the date of our commitment through the sale of the loan. Net gains on sale of loans for the Servicing segment consists of this change in fair value as well as net gains on sales of loans to third parties.

Other Revenues

Other revenues increased $15.6 million in 2015 as compared to 2014 primarily as a result of $19.3 million in higher fair value gains relating to charged-off loans resulting primarily from twelve months of collection activity in 2015 compared to eight months in 2014 and an increase in expected collections, and $4.3 million higher other interest income, partially offset by $7.5 million lower beneficial interest income related to a servicing asset.

Other revenues increased $27.9 million in 2014 as compared to 2013 primarily due to $22.5 million in higher fair value gains relating to charged-off loans that were purchased during 2014 and $4.5 million in higher beneficial interest income related to a servicing asset.

General and Administrative and Allocated Indirect Expenses

General and administrative and allocated indirect expenses decreased $27.8 million in 2015 as compared to 2014 resulting primarily from $40.7 million in lower legal related costs largely due to lower accruals for legal and regulatory matters outside of the ordinary course of business and $14.5 million in lower provision for uncollectible advances due to a decrease in advance balances and an improvement in collection experience, partially offset by $11.3 million in additional costs in 2015 to support efficiency and technology-related initiatives, $8.8 million in higher default and other loan servicing costs resulting from growth in the servicing portfolio, and $4.1 million in expenses relating to consolidating and re-branding our mortgage loan business as Ditech, a Walter Company.

General and administrative and allocated indirect expenses increased $131.8 million in 2014 as compared to 2013 resulting primarily from additional costs associated with growth in the servicing portfolio, which included a higher provision for uncollectible advances of $34.5 million, and $75.6 million in higher legal accruals for loss contingencies and legal expenses due to legal and regulatory matters outside of normal course of business. The higher provision for uncollectible advances is due to the growth in advances from servicing right acquisitions in 2013 and 2014, aging of balances and collection experience.

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Salaries and Benefits

Salaries and benefits expense decreased $23.5 million in 2015 as compared to 2014 primarily due to a lower average headcount as a result of restructuring measures within our mortgage loan servicing operations, offset in part by severance incurred in relation to this restructuring. Headcount assigned directly to our Servicing segment decreased by approximately 600 full-time employees from 4,200 at December 31, 2014 to 3,600 at December 31, 2015.

Salaries and benefits expense increased $34.9 million in 2014 as compared to 2013 due to hiring to support the growth of our business, including the hiring of EverBank employees in 2014. Headcount assigned directly to our Servicing segment increased by approximately 500 full-time employees from 3,700 at December 31, 2013 to 4,200 at December 31, 2014.

Goodwill Impairment

We incurred a $151.0 million impairment charge during 2015 as a result of a goodwill evaluation performed in the fourth quarter of 2015. The evaluation indicated the estimated implied fair value of the Servicing reporting unit’s goodwill at the evaluation date was less than its book value, therefore requiring the impairment charge.

Interest Expense

Interest expense decreased $36.4 million in 2015 as compared to 2014 primarily as a result of the sale of our residual interests and the runoff of the overall related mortgage loan portfolio.

Interest expense increased $9.0 million in 2014 as compared to 2013 primarily as a result of a higher average balance of servicing advance liabilities due to the growth of our servicing business as a result of portfolio acquisitions. This increase was partially offset by a decrease in interest expense on mortgage-backed debt issued by the Residual Trusts, as a result of a lower average outstanding balance as the related residential loan portfolio continues to runoff.

Other Gains (Losses)

Other gains of $6.1 million for 2015 includes an $8.9 million realized gain recognized on the sale of a trading security, partially offset by a $2.8 million loss recognized on the sale of our residual interests.

Adjusted Earnings

Adjusted Earnings margin decreased six basis points in 2015 as compared to 2014 primarily due to lower revenues (adjusted for the impact of the change in fair value driven by changes in valuation inputs) per loan serviced, partially offset by lower expenses, primarily salaries and benefits, per loan serviced and a net gain resulting from the sale of a trading security and the sale of our residual interests. The decline in revenues per loan serviced is primarily due to the increase in realization of expected cash flows due mainly to faster prepayment speeds than anticipated and a larger servicing portfolio, and the decline in incentive and performance fees and insurance revenue.

Adjusted Earnings margin decreased four basis points in 2014 as compared to 2013 primarily due to lower revenues (adjusted for the impact of the change in fair value driven by changes in valuation inputs) per loan serviced which primarily resulted from the decline in incentive and performance fees, intersegment retention revenue and insurance revenue.

Adjusted EBITDA

Adjusted EBITDA margin decreased two basis points in 2015 as compared to 2014 primarily due to lower revenues (adjusted for the impact of the change in fair value) per loan serviced, partially offset by lower expenses, primarily salaries and benefits, per loan serviced and a net gain resulting from the sale of a trading security and the sale of our residual interests. The decline in revenues per loan serviced is primarily due to the decline in incentive and performance fees and insurance revenue.

Adjusted EBITDA margin decreased three basis points in 2014 as compared to 2013 primarily due to lower revenues (adjusted for the impact of the change in fair value) per loan serviced which primarily resulted from the decline in incentive and performance fees, intersegment retention revenue and insurance revenue.

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Provided below is a summary of our Servicing segment's margin (in basis points):



	For the Years Ended December 31,			Variance
	2015	2014 ⁽²⁾	2013	2015 vs. 2014		2014 vs. 2013
Adjusted Earnings margin ⁽¹⁾	4	10	14	(6	)	(4	)
Adjusted EBITDA margin ⁽¹⁾	16	18	21	(2	)	(3	)

__________


(1)	Margins are calculated by dividing the applicable non-GAAP measure by the average principal balance of loans serviced during the year.

(2)

The average principal balance of loans serviced utilized in the calculation of the Adjusted Earnings and Adjusted EBITDA margins for the year ended December 31, 2014 includes adjustments related to servicing fee economics to reflect servicing right acquisitions closed during certain quarters as though they were closed at the beginning of the quarter, as economics (cash flows) were actually recorded for the full quarter.

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Originations

Provided below is a summary of results of operations, Adjusted Earnings and Adjusted EBITDA for our Originations segment (dollars in thousands):



								Variance
	For the Years Ended December 31,							2015 vs. 2014					2014 vs. 2013
	2015		2014			2013		$			%		$			%
Net gains on sales of loans	$	448,533	$	462,172		$	594,341	$	(13,639	)	(3	)%	$	(132,169	)	(22	)%
Other revenues	45,312		19,650			36,100		25,662			131	%	(16,450		)	(46	)%
Total revenues	493,845		481,822			630,441		12,023			2	%	(148,619		)	(24	)%
Salaries and benefits	161,992		162,006			174,380		(14		)	—	%	(12,374		)	(7	)%
General and administrative and allocated indirect expenses	125,285		115,235			132,600		10,050			9	%	(17,365		)	(13	)%
Intersegment retention expense	30,751		40,546			59,891		(9,795		)	(24	)%	(19,345		)	(32	)%
Interest expense	36,470		29,841			28,469		6,629			22	%	1,372			5	%
Depreciation and amortization	15,811		17,090			8,706		(1,279		)	(7	)%	8,384			96	%
Total expenses	370,309		364,718			404,046		5,591			2	%	(39,328		)	(10	)%
Income before income taxes	123,536		117,104			226,395		6,432			5	%	(109,291		)	(48	)%

Adjustments to earnings
Step-up depreciation and amortization	7,424		9,903			7,642		(2,479		)	(25	)%	2,261			30	%
Share-based compensation expense	5,557		3,445			2,357		2,112			61	%	1,088			46	%
Restructuring costs	2,608		2,887			—		(279		)	(10	)%	2,887			n/m
Legal and regulatory matters	—		907			—		(907		)	(100	)%	907			n/m
Other	1,272		4,049			—		(2,777		)	(69	)%	4,049			n/m
Total adjustments	16,861		21,191			9,999		(4,330		)	(20	)%	11,192			112	%
Adjusted Earnings	140,397		138,295			236,394		2,102			2	%	(98,099		)	(41	)%

Adjustments to EBITDA
Depreciation and amortization	8,387		7,187			1,064		1,200			17	%	6,123			575	%
Other	8,827		(1,165		)	7,738		9,992			(858	)%	(8,903		)	(115	)%
Total adjustments	17,214		6,022			8,802		11,192			186	%	(2,780		)	(32	)%
Adjusted EBITDA	$	157,611	$	144,317		$	245,196	$	13,294		9	%	$	(100,879	)	(41	)%

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The volume of our originations activity and changes in market rates primarily govern the fluctuations in revenues and expenses of our Originations segment. Provided below are summaries of our originations volume by channel (in thousands):



	For the Year Ended December 31, 2015
	Locked Volume ⁽¹⁾		Funded Volume		Sold Volume
Correspondent	$	17,636,550	$	17,786,822	$	17,736,488
Retention	6,225,358		6,301,633		6,169,389
Consumer Direct	662,798		489,811		472,490
Retail	595,131		551,296		523,189
Total	$	25,119,837	$	25,129,562	$	24,901,556



	For the Year Ended December 31, 2014
	Locked Volume ⁽¹⁾		Funded Volume		Sold Volume
Correspondent	$	10,779,432	$	9,993,133	$	9,648,214
Retention	8,034,450		7,982,474		8,158,785
Consumer Direct	128,839		78,406		48,629
Retail	134,509		148,101		141,413
Wholesale ⁽²⁾	194,402		269,619		365,209
Total	$	19,271,632	$	18,471,733	$	18,362,250



	For the Year Ended December 31, 2013
	Locked Volume ⁽¹⁾		Funded Volume		Sold Volume
Correspondent	$	5,198,556	$	4,608,510	$	4,303,715
Retention	10,785,607		9,322,332		8,740,556
Retail ⁽³⁾	603,021		646,122		627,669
Wholesale	1,480,182		1,351,117		1,255,969
Total	$	18,067,366	$	15,928,081	$	14,927,909

__________


(1)	Volume has been adjusted by the percentage of mortgage loans not expected to close based on previous historical experience and changes in interest rates.


(2)	We exited the wholesale business in February 2014.


(3)	Included in retail originations volume for 2013 is activity related to retention initiated by the retail channel.

Net Gains on Sales of Loans

Net gains on sales of loans include realized and unrealized gains and losses on loans, the initial fair value of the capitalized servicing rights upon loan sales, as well as the changes in fair value of our IRLCs and other freestanding derivatives. The amount of net gains on sales of loans is a function of the volume and margin of our originations activity and is impacted by fluctuations in interest rates. A substantial portion of our gains on sales of loans is recognized at the time we commit to originate or purchase a loan at specified terms, as we recognize the value of the IRLC at the time of commitment. The fair value of the IRLC includes our estimate of the fair value of the servicing right we expect to receive upon sale of the loan. We recognize loan origination costs as incurred, which typically align with the date of loan funding for consumer originations and the date of loan purchase for correspondent lending. These expenses are primarily included in general and administrative expenses and salaries and benefits on the consolidated statements of comprehensive income (loss). In addition, we record a provision for losses relating to representations and warranties made as part of the loan sale transaction at the time the loan is sold.

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The volatility in the gain on sale spread is attributable to market pricing, which changes with demand, channel mix, and the general level of interest rates. While many factors may affect consumer demand for mortgages, generally, pricing competition on mortgage loans is lower in periods of low or declining interest rates, as consumer demand is greater. This provides opportunities for originators to increase volume and earn wider margins. Conversely, pricing competition increases when interest rates rise as consumer demand lessens. This reduces overall origination volume and may lead originators to reduce margins. The level and direction of interest rates are not the sole determinant of consumer demand for mortgages. Other factors such as secondary market conditions, home prices, credit spreads or legislative activity may impact consumer demand more significantly than interest rates in any given period.

Net gains on sales of loans for our Originations segment consists of the following (dollars in thousands):



	For the Years Ended December 31,									Variance
	For the Years Ended December 31,									2015 vs. 2014					2014 vs. 2013
	2015			2014			2013			$			%		$			%
Realized gains on sales of loans	$	167,660		$	367,314		$	214,265		$	(199,654	)	(54	)%	$	153,049		71	%
Change in unrealized gains on loans held for sale	(7,697		)	1,412			24,771			(9,109		)	(645	)%	(23,359		)	(94	)%
Gains (losses) on interest rate lock commitments	(9,464		)	21,061			38,126			(30,525		)	(145	)%	(17,065		)	(45	)%
Gains (losses) on forward sales commitments ⁽¹⁾	(19,747		)	(156,201		)	111,830			136,454			(87	)%	(268,031		)	(240	)%
Losses on MBS purchase commitments ⁽¹⁾	(24,250		)	(18,009		)	(5,599		)	(6,241		)	35	%	(12,410		)	222	%
Capitalized servicing rights	305,838			214,285			187,749			91,553			43	%	26,536			14	%
Provision for repurchases	(16,008		)	(7,741		)	(9,054		)	(8,267		)	107	%	1,313			(15	)%
Interest income	52,201			40,051			32,253			12,150			30	%	7,798			24	%
Net gains on sales of loans	$	448,533		$	462,172		$	594,341		$	(13,639	)	(3	)%	$	(132,169	)	(22	)%

__________


(1)	Realized gains (losses) on freestanding derivatives were $(67.0) million , $(134.8) million and $87.7 million during 2015, 2014 and 2013 , respectively.

The decrease in net gains on sales of loans in 2015 and 2014 as compared to the corresponding prior year periods was primarily due to a shift in volume from the higher margin retention channel to the lower margin correspondent channel, offset partially by a higher volume of locked loans in each respective period. The higher volume of locked loans during 2015 as compared to 2014 was largely due to lower average interest rates in 2015, while the higher volume of locked loans in 2014 as compared to 2013 was due to having a full twelve months of activity in 2014 as opposed to a condensed period in 2013. Additionally, we had higher capitalized servicing rights during 2015 as compared to 2014 due primarily to a higher volume of loans sold as well as a change in mix from substantially all Fannie Mae in 2014 to approximately 35% Ginnie Mae, which have a higher servicing fee than GSE loans, and 65% Fannie Mae and Freddie Mac loans in 2015. The condensed period in 2013 results from the acquisition of the capital markets and originations platforms from ResCap on January 31, 2013 and the correspondent lending business from Ally Bank on March 1, 2013. These acquisitions initiated the ramp up of our mortgage loan originations business.

The years ended December 31, 2015 and 2014 included the benefit of higher margins from HARP, which is scheduled to expire on December 31, 2016. HARP is a federal program of the U.S. which helps homeowners refinance their mortgage. Our strategy includes significant efforts to maintain retention volumes through traditional refinancing opportunities and HARP, although we believe peak HARP refinancing already occurred in prior periods.

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Provided below is a summary of origination economics for all channels (in basis points):



	For the Years Ended December 31,						Variance
	For the Years Ended December 31,						2015 vs. 2014				2014 vs. 2013
	2015		2014		2013		Bps		%		Bps		%
Gain on sale of loans ⁽¹⁾	178		240		329		(62	)	(26	)%	(89	)	(27	)%
Fee income ⁽²⁾	18		11		23		7		64	%	(12	)	(52	)%
Direct expenses ⁽²⁾	(110	)	(142	)	(175	)	32		(23	)%	33		(19	)%
Direct margin	86		109		177		(23	)	(21	)%	(68	)	(38	)%

__________


(1)	Calculated on pull-through adjusted locked volume.


(2)	Calculated on funded volume.

The decline in direct margin in 2015 as compared to 2014 was primarily due to a shift in volume from the higher margin retention channel to the lower margin correspondent channel. This decline was partially offset by higher origination fees in 2015, the impact of lower direct expenses as a result of the exit from the wholesale business in February 2014, economies of scale as a result of higher loan volume and other cost cutting measures in 2014 and 2015.

The decline in direct margin in 2014 as compared to 2013 was primarily due to a shift in volume from the higher margin retention channel to the lower margin correspondent channel and lower origination fees in 2014. In addition, 2014 includes the impact of lower direct expenses resulting from economies of scale and cost cutting initiatives established to align activities with the scope and scale of operations at such time.

Other Revenues

Other revenues, which consists primarily of origination fee income and interest on cash equivalents, increased $25.7 million in 2015 as compared to 2014 , and decreased $16.5 million in 2014 as compared to 2013 , primarily as a result of lower origination fees in 2014 due to our having waived certain fees charged to borrowers refinancing mortgage loans.

Salaries and Benefits

Salaries and benefits expense remained flat in 2015 as compared to 2014 . Although level between both years, 2015 had a decrease in compensation and benefits primarily due to lower average headcount and lower severance due mainly to the exit from the wholesale business in February 2014 and an office closure in 2014. These lower expenses were offset by higher incentives in 2015 due to an increase in funded volume, partially offset by the impact from the change in mix from higher incentive paying retention originations to lower incentive paying correspondent originations.

Salaries and benefits expense decreased $12.4 million in 2014 as compared to 2013 primarily as a result of the reduction in workforce in order to align the employee base with the scope and scale of operations in 2014, which included our exit from the mortgage wholesale channel, partially offset by higher volume of loans funded during 2014 coupled with a full year of mortgage loan originations activity in 2014 as compared to a condensed period in 2013.

General and Administrative and Allocated Indirect Expenses

General and administrative and allocated indirect expenses increased $10.1 million in 2015 as compared to 2014 primarily due to higher loan origination expenses due to an increased volume of loan fundings and increased advertising resulting from additional mail solicitations and internet lead generations as well as re-branding for our mortgage loan business under Ditech, a Walter Company. In addition, we had a larger reduction in 2014 to our estimate of the liability associated with our representations and warranties for sales of mortgage loans due to the prior year including a reduction to our reserves as a result of timely payment history on loans originated under HARP and lower actual origination defects as compared to original expectations. Under HARP, after one year of timely payments by the borrower since the origination of the loan, our exposure to the liability associated with representations and warranties becomes limited in nature. In the prior year, we had more loans completing one year of timely payments and such loans had higher initial reserves established due to a higher initial estimate of defects. These higher expenses were partially offset by lower occupancy, printing and mailing costs in support of cost savings measures.

General and administrative and allocated indirect expenses decreased $17.4 million in 2014 as compared to 2013 primarily as a result of the management of expenses to align with the scope and scale of operations in 2014, partially offset by a higher volume of loans funded during 2014 coupled with a full year of mortgage loan originations activity in 2014 as compared to a condensed period in 2013.

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Intersegment Retention Expense

Intersegment retention expense relates to fees charged by our Servicing segment to the Originations segment in relation to loan originations that resulted from access to the Servicing segment’s servicing portfolio for which there was a related capitalized servicing right recorded by the Servicing segment. The decline in intersegment retention expense of $9.8 million in 2015 as compared to 2014 and $19.3 million in 2014 as compared to 2013 was due primarily to the decline in funded retention volume for which there was an existing capitalized servicing right.

Interest Expense

Interest expense increased $6.6 million in 2015 as compared to 2014 and $1.4 million in 2014 as compared to 2013 primarily due to higher average borrowings on master repurchase agreements due to higher volumes of loan fundings, partially offset by lower average costs of debt. In addition, there was a full year of mortgage loan originations activity in 2014 as compared to a condensed period in 2013.

Adjusted Earnings and Adjusted EBITDA

Adjusted Earnings and Adjusted EBITDA increased $2.1 million and $13.3 million , respectively, in 2015 as compared to 2014 due primarily to higher origination fee income, offset partially by lower net gains on sales of loans and higher expenses. We had a higher net provision for the repurchase of loans due primarily to a shift in volume of originations from the retention channel to the correspondent channel, which has a higher estimated defect rate.

Adjusted Earnings and Adjusted EBITDA decreased $98.1 million and $100.9 million , respectively, in 2014 as compared to 2013 due primarily to reduced net gains on sales of loans. During 2013, the business substantially ramped up operations due to first quarter 2013 acquisitions; therefore locked volume was significantly larger than funded volume. As a result, 2013 had higher revenues in relation to expenses. In 2014, the relationship of locked volume to funded volume normalized.

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Reverse Mortgage

Provided below is a summary of results of operations, Adjusted Earnings (Loss) and Adjusted EBITDA for our Reverse Mortgage segment (dollars in thousands):



	For the Years Ended December 31,									Variance
	For the Years Ended December 31,									2015 vs. 2014					2014 vs. 2013
	2015			2014			2013			$			%		$			%
Net fair value gains on reverse loans and related HMBS obligations	$	98,265		$	109,972		$	120,382		$	(11,707	)	(11	)%	$	(10,410	)	(9	)%
Net servicing revenue and fees	42,648			35,446			27,342			7,202			20	%	8,104			30	%
Net gains (losses) on sales of loans	(98		)	—			4,633			(98		)	n/m		(4,633		)	(100	)%
Other revenues	6,794			11,743			15,307			(4,949		)	(42	)%	(3,564		)	(23	)%
Total revenues	147,609			157,161			167,664			(9,552		)	(6	)%	(10,503		)	(6	)%
General and administrative and allocated indirect expenses	98,629			83,623			68,825			15,006			18	%	14,798			22	%
Salaries and benefits	88,967			77,264			74,106			11,703			15	%	3,158			4	%
Goodwill impairment	56,539			82,269			—			(25,730		)	(31	)%	82,269			n/m
Depreciation and amortization	7,865			9,284			11,119			(1,419		)	(15	)%	(1,835		)	(17	)%
Interest expense	3,902			3,773			7,974			129			3	%	(4,201		)	(53	)%
Other expenses, net	4,044			2,116			439			1,928			91	%	1,677			382	%
Total expenses	259,946			258,329			162,463			1,617			1	%	95,866			59	%
Income (loss) before income taxes	(112,337		)	(101,168		)	5,201			(11,169		)	11	%	(106,369		)	n/m

Adjustments to earnings (loss)
Goodwill impairment	56,539			82,269			—			(25,730		)	(31	)%	82,269			n/m
Curtailment expense	30,419			1,460			8,894			28,959			n/m		(7,434		)	(84	)%
Legal and regulatory matters	5,575			24,297			—			(18,722		)	(77	)%	24,297			n/m
Step-up depreciation and amortization	5,178			7,081			9,546			(1,903		)	(27	)%	(2,465		)	(26	)%
Share-based compensation expense	2,395			2,185			1,019			210			10	%	1,166			114	%
Fair value to cash adjustment for reverse loans	2,291			(24,602		)	17,995			26,893			(109	)%	(42,597		)	(237	)%
Restructuring costs	1,640			—			—			1,640			n/m		—			—	%
Other	349			4,485			2,248			(4,136		)	(92	)%	2,237			100	%
Total adjustments	104,386			97,175			39,702			7,211			7	%	57,473			145	%
Adjusted Earnings (Loss)	(7,951		)	(3,993		)	44,903			(3,958		)	99	%	(48,896		)	(109	)%

Adjustments to EBITDA
Depreciation and amortization	2,687			2,203			1,573			484			22	%	630			40	%
Amortization of servicing rights	2,053			2,683			3,526			(630		)	(23	)%	(843		)	(24	)%
Interest expense on debt	2			26			40			(24		)	(92	)%	(14		)	(35	)%
Other	139			(73		)	(365		)	212			(290	)%	292			(80	)%
Total adjustments	4,881			4,839			4,774			42			1	%	65			1	%
Adjusted EBITDA	$	(3,070	)	$	846		$	49,677		$	(3,916	)	(463	)%	$	(48,831	)	(98	)%

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Reverse Mortgage Servicing Portfolio

Provided below are summaries of the activity in our third-party servicing portfolio for our reverse mortgage business, which includes accounts serviced for third parties for which we earn servicing revenue and, thus, excludes servicing performed related to reverse loans and real estate owned that have been recognized on our consolidated balance sheets, as the reverse loan transfer was accounted for as a secured borrowing (dollars in thousands):



	For the Years Ended December 31,
	2015					2014
	Number of Accounts		Unpaid Principal Balance			Number of Accounts		Unpaid Principal Balance
Third-party servicing portfolio
Balance at beginning of the year	50,196		$	8,626,946		44,663		$	7,690,304
New business added	12,880		2,043,089			9,942		1,300,259
Other additions ⁽¹⁾	—		645,715			—		489,287
Payoffs and sales	(7,030	)	(1,497,350		)	(4,409	)	(852,904		)
Balance at end of the year	56,046		$	9,818,400		50,196		$	8,626,946

__________


(1)	Other additions include additions to the principal balance serviced related to draws on lines of credit, interest, servicing fees, mortgage insurance and advances owed by the existing borrower.

Provided below are summaries of our reverse loan servicing portfolio (dollars in thousands):



	At December 31, 2015			At December 31, 2014
	Number of Accounts	Unpaid Principal Balance		Number of Accounts	Unpaid Principal Balance
Third-party servicing portfolio ⁽¹⁾	56,046	$	9,818,400	50,196	$	8,626,946
On-balance sheet residential loans and real estate owned	65,187	10,265,726		60,302	9,404,169
Total reverse loan servicing portfolio	121,233	$	20,084,126	110,498	$	18,031,115

__________

(1)

We earn a fixed dollar amount per loan on a majority of our third-party reverse loan servicing portfolio. The weighted-average contractual servicing fee for our third-party servicing portfolio was 0.14% and 0.16% at December 31, 2015 and 2014 , respectively. The decline in the average fee was primarily a result of lower fees per loan for certain servicing agreements, combined with the impact of a higher average loan balance.

Net Fair Value Gains on Reverse Loans and Related HMBS Obligations

Provided in the table below is a summary of the components of net fair value gains on reverse loans and related HMBS obligations (dollars in thousands):



	For the Years Ended December 31,									Variance
	For the Years Ended December 31,									2015 vs. 2014					2014 vs. 2013
	2015			2014			2013			$			%		$			%
Interest income on reverse loans	$	435,585		$	398,925		$	347,497		$	36,660		9	%	$	51,428		15	%
Interest expense on HMBS related obligations	(403,817		)	(372,346		)	(321,820		)	(31,471		)	8	%	(50,526		)	16	%
Net interest income on reverse loans and HMBS related obligations	31,768			26,579			25,677			5,189			20	%	902			4	%

Change in fair value of reverse loans	(232,993		)	35,272			(239,417		)	(268,265		)	(761	)%	274,689			(115	)%
Change in fair value of HMBS related obligations	299,490			48,121			334,122			251,369			522	%	(286,001		)	(86	)%
Net change in fair value on reverse loans and HMBS related obligations	66,497			83,393			94,705			(16,896		)	(20	)%	(11,312		)	(12	)%
Net fair value gains on reverse loans and related HMBS obligations	$	98,265		$	109,972		$	120,382		$	(11,707	)	(11	)%	$	(10,410	)	(9	)%

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Net fair value gains on reverse loans and related HMBS obligations include the contractual interest income earned on reverse loans, including those not yet securitized or no longer in securitization pools, net of interest expense on HMBS related obligations, and the change in fair value of these assets and liabilities. Included in the change in fair value are gains due to loan originations that include "tails." Tails are participations in previously securitized HECMs and are created by additions to principal for borrower draws on lines-of-credit, interest, servicing fees, and mortgage insurance premiums. Economic gains and losses result from the pricing of an aggregated pool of loans exceeding the cost of the origination or acquisition of the loan as well as the change in fair value resulting from changes to market pricing on HECMs and HMBS. No gain or loss is recognized as a result of the securitization of reverse loans as these transactions are accounted for as secured borrowings. However, HECMs and HMBS related obligations are marked to fair value, which can result in a net gain or loss related to changes in market pricing.

Net interest income increased $5.2 million in 2015 as compared to 2014 primarily as a result of the growth in both reverse loans and HMBS related obligations, offset partially by the increase in nonperforming reverse loans which have lower interest rates than performing loans. Cash generated by origination, purchase and securitization of HECMs included in the change in fair value increased $10.0 million in 2015 as compared to 2014 primarily as a result of a shift in volume from lower margin new originations to higher margin tails. Net non-cash fair value adjustments included in the change in fair value fluctuated by $26.9 million from a gain in 2014 to a loss in 2015 due primarily to a lower reduction of LIBOR in 2015 as compared to 2014. In addition, in 2015 the impact of the reduction of LIBOR was offset by the widening of spreads between reverse loans and HMBS related obligations resulting from changes in market pricing for HECMs and HMBS. In 2014 there was a tightening of spreads. The conditional repayment rate utilized in the valuation of reverse loans and HMBS related obligations has increased from 21.68% and 21.21% at December 31, 2014, respectively, to 25.59% and 24.70% at December 31, 2015, respectively, as the portfolio ages and recent regulatory guidance surrounding due and payable policies has resulted in shorter projected default servicing timelines.

While we had growth in both reverse loans and HMBS related obligations in 2014 as compared to 2013, we also had an increase in nonperforming reverse loans, which have lower interest rates than performing loans and as a result, net interest income was relatively flat. Cash generated by origination, purchase and securitization of HECMs included in the change in fair value decreased $53.9 million primarily as a result of lower margin new originations, partially offset by higher margin tails. Net non-cash fair value adjustments included in the change in fair value increased favorably by $42.6 million due to a reduction of LIBOR and the tightening of spreads between reverse loans and HMBS related obligations resulting from changes in market pricing for HECMs and HMBS.

Provided below are summaries of our funded volume, which represents purchases and originations of reverse loans, and volume of securitizations into HMBS (dollars in thousands):



							Variance
	For the Years Ended December 31,						2015 vs. 2014					2014 vs. 2013
	2015		2014		2013		$			%		$			%
Funded volume	$	1,418,624	$	1,457,122	$	2,897,579	$	(38,498	)	(3	)%	$	(1,440,457	)	(50	)%
Securitized volume ⁽¹⁾	1,465,743		1,480,085		2,882,344		(14,342		)	(1	)%	(1,402,259		)	(49	)%

__________


(1)	Securitized volume includes $404.0 million, $299.4 million and $189.4 million of tails securitized for 2015, 2014 and 2013 , respectively. Tail draws associated with the HECM IDL product that commenced in late 2013 were $199.9 million and $44.8 million for 2015 and 2014, respectively. There were no tail draws of the HECM IDL product in 2013.

The decline in both funded and securitized volume during 2014 as compared to 2013 is due primarily to regulatory changes to the HECM program, and to a lesser degree, increased competition. Regulatory changes impacted reverse mortgage loan products available to borrowers and reduced the available principal to be drawn initially by borrowers.

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Net Servicing Revenue and Fees

A summary of net servicing revenue and fees for our Reverse Mortgage segment is provided below (dollars in thousands):



	For the Years Ended December 31,									Variance
	For the Years Ended December 31,									2015 vs. 2014				2014 vs. 2013
	2015			2014			2013			$		%		$			%
Servicing fees	$	13,723		$	13,043		$	11,670		$	680	5	%	$	1,373		12	%
Incentive and performance fees	22,757			21,256			15,001			1,501		7	%	6,255			42	%
Ancillary and other fees	8,221			3,830			4,197			4,391		115	%	(367		)	(9	)%
Servicing revenue and fees	44,701			38,129			30,868			6,572		17	%	7,261			24	%
Amortization of servicing rights	(2,053		)	(2,683		)	(3,526		)	630		(23	)%	843			(24	)%
Net servicing revenue and fees	$	42,648		$	35,446		$	27,342		$	7,202	20	%	$	8,104		30	%

The growth in net servicing revenue and fees of $7.2 million in 2015 as compared to 2014 and $8.1 million in 2014 as compared to 2013 was due primarily to an increase in incentive and performance fees for the management of real estate owned and in 2015, termination fees relating to the agreement to manage such real estate owned. In March 2015, we entered into an agreement with a counterparty to phase out the management of real estate owned through October 1, 2015. Fees associated with this contract approximated 63% and 75% of incentive and performance fees during 2015 and 2014, respectively, and as a result of the termination of the contract, we expect our incentive and performance fees to decline in 2016.

Other Revenues

Other revenues include originations fee income and other miscellaneous income. Other revenues declined $4.9 million in 2015 as compared to 2014 and $3.6 million in 2014 as compared to 2013 primarily as a result of the decline in origination fee income resulting from fewer originations. In addition, during 2015 we charged lower fees to new borrowers.

General and Administrative and Allocated Indirect Expenses

General and administrative and allocated indirect expenses increased $15.0 million in 2015 as compared to 2014 due primarily to a $10.2 million increase in expenses related to regulatory developments in 2015 which led to additional charges around curtailable events and to accrual adjustments associated with legal and regulatory matters outside of the normal course of business. In addition, there was a $6.8 million increase in curtailment due primarily to an increase in missed timelines driven by an increase in volume resulting from the contraction of default servicing timeframes due to recent regulatory changes and an increase in the related exposure to incurred but not known deaths of the mortgagor and the mortgagor’s vacancy from their principal residence. Further there was a $2.8 million increase in advertising and a $6.9 million net increase in various miscellaneous expenses including real estate owned management support services, equipment maintenance and occupancy expenses. These higher charges were partially offset by $8.2 million in lower provisions on uncollectible receivables and advances resulting from improved collections and recent historical experience, as well as transaction costs of $3.5 million recorded in 2014 related to an unsuccessful acquisition, with no similar charge in 2015.

General and administrative and allocated indirect expenses increased $14.8 million in 2014 as compared to 2013 , due primarily to $24.3 million in higher legal accruals for loss contingencies and legal expenses due to legal and regulatory matters outside of normal course of business and $3.5 million of transaction costs resulting from an unsuccessful acquisition. These expenses were partially offset by a decrease of $12.8 million in the provision for our curtailment liability and our provisions for uncollectible receivables and advances and insignificant variances related to other expenses.

Salaries and Benefits

Salaries and benefits expense increased $11.7 million in 2015 as compared to 2014 due primarily to a larger average headcount during the current year, higher incentives and higher severance. Salaries and benefits expense remained relatively flat in in 2014 as compared to 2013 . As a result of an increase in defaulted loans and recent regulatory guidance surrounding due and payable policies which have resulted in shorter projected default servicing timelines, we have increased our headcount of employees dedicated to such servicing.

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Goodwill Impairment

We incurred $56.5 million and $82.3 million in impairment charges during 2015 and 2014 as a result of goodwill evaluations performed in the second quarters of 2015 and 2014, respectively. The evaluations indicated the estimated implied fair value of the Reverse Mortgage reporting unit’s goodwill at each evaluation date was less than its book value, therefore requiring the impairment charges. As a result of these goodwill impairment charges, the Reverse Mortgage reporting unit no longer has goodwill.

Interest Expense

Interest expense remained relatively flat in 2015 as compared to 2014 . Interest expense decreased $4.2 million in 2014 as compared to 2013 due primarily to lower average borrowings on master repurchase agreements resulting from a lower volume of loan fundings and lower cost of debt.

Adjusted Earnings (Loss) and Adjusted EBITDA

Adjusted Loss increased $4.0 million and Adjusted EBITDA decreased $3.9 million in 2015 as compared to 2014 . The changes in these non-GAAP financial measures was due primarily to the growth in cash generated from origination, purchase and securitization of HECMs and net servicing revenue and fees, offset partially by higher expenses.

Adjusted Earnings (Loss) and Adjusted EBITDA decreased $48.9 million and $48.8 million , respectively, in 2014 as compared to 2013 . The decrease in these non-GAAP financial measures was due primarily to the decline in cash generated from origination, purchase and securitization of HECMs

Other Non-Reportable

Other Revenues

Other revenues for our Other non-reportable segment consists primarily of asset management performance fees, and to a lesser extent, asset management advisory fees and other interest income. Other revenues decreased $35.8 million in 2015 as compared to 2014 due primarily to $36.8 million in asset management performance fees collected and earned in connection with the asset management of a fund during 2014, partially offset by the settlement of a receivable that was repaid in conjunction with the sale of an investment accounted for using the equity method during 2015.

Other revenues increased $29.5 million in 2014 as compared to 2013 due primarily to the aforementioned $36.8 million in asset management performance fees, partially offset by a decline in asset management advisory fees.

Expenses

Total expenses for our Other non-reportable segment increased $10.8 million in 2015 as compared to 2014 due primarily to higher salaries and benefits expense relating to increases in share-based compensation expense due largely to a higher number of awards granted and bonuses.

Total expenses for our Other non-reportable segment decreased $3.4 million in 2014 as compared to 2013 due primarily to $30.4 million in lower general and administrative and allocated indirect expenses largely resulting from costs incurred to affect corporate debt financing transactions in 2013. Our corporate debt transactions during 2013 included incremental borrowings under our 2012 Term Loan, the related subsequent refinancing activities under our 2013 Term Loan and the issuance of our Senior Notes. The decrease in expenses was partially offset by a $24.3 million increase in interest expense on corporate debt resulting from these corporate debt transactions. These financing transactions resulted in a higher average balance of corporate debt of $502.9 million, partially offset by a lower average interest rate of 48 basis points, which resulted in a lower cost of debt.

Total Other Gains (Losses)

Total other gains increased $6.8 million in 2015 as compared to 2014 due primarily to an $11.8 million gain recognized on the sale of an investment which was accounted for using the equity method; a $4.7 million net gain on extinguishment of debt related to the repurchase of Senior Notes and the voluntary prepayment on the 2013 Term Loan; and a $3.1 million gain for consideration received for the contribution of Marix to WCO. These gains were partially offset by $12.8 million in lower net fair value gains on the assets and liabilities of the Non-Residual Trusts as 2014 included the impact of changes in assumptions related to the reduction of discount rates resulting from tightening of yields in the market.

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Total other gains of $20.1 million in 2014 increased $25.8 million from total other losses of $5.8 million in 2013 due primarily to a loss on extinguishment of debt of $12.5 million incurred in 2013, $8.6 million in higher fair value gains on the Non-Residual Trusts in 2014 resulting from the aforementioned reduction to discount rates, and a $4.8 million loss incurred in 2013 related to an increase in the contingent earn-out liability related to a business acquisition.

Liquidity and Capital Resources

Overview

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay debt and meet the financial obligations of our operations including funding acquisitions; mortgage loan and reverse loan servicing advances; obligations associated with the repurchase of reverse loans from securitization pools; funding additional borrowing capacity on reverse loans; origination of mortgage loans; and other general business needs, including the cost of compliance with changing legislation and related rules. Our liquidity is measured as our consolidated cash and cash equivalents excluding subsidiary minimum cash requirement balances, which are typically associated with our servicer licensing or financing agreements with third parties. This measure also includes our borrowing capacity available under the 2013 Revolver, as described under the Corporate Debt section below. At December 31, 2015 , our liquidity was $256.7 million. At December 31, 2015 , we had contractual obligations, subject to certain conditions and adjustments, to utilize approximately $27.7 million of this amount to fund acquisitions of servicing rights, including related servicer and protective advances, and certain payment obligations under our asset purchase agreement with RCS.

We endeavor to maintain our liquidity at a level sufficient to fund certain known or expected payments and to fund our working capital needs. Our principal sources of liquidity are the cash flows generated from our business segments and funds available from our 2013 Revolver, master repurchase agreements, mortgage loan servicing advance facilities, issuance of HMBS and excess servicing spread financing arrangements. We may generate additional liquidity through sales of MSRs, any portion thereof, or other assets.

We believe that, based on current forecasts and anticipated market conditions, our current liquidity, along with the funds generated from our principal sources of liquidity discussed above, will allow for financial flexibility to meet anticipated cash requirements to fund operating needs and expenses, servicing advances, loan originations and repurchases of mortgage loans and HECMs, planned capital expenditures, current committed business and asset acquisitions, and all required debt service obligations for the next 12 months. We expect that significant acquisitions of servicing rights and other opportunities to grow by acquisition would need to be funded primarily through, or in collaboration with, external capital sources. Our operating cash flows and liquidity are significantly influenced by numerous factors, including interest rates and continued availability of financing. Our liquidity outlook assumes the renewal of existing mortgage loan servicing advance facilities, mortgage loan and reverse loan master repurchase agreements and reverse loan master repurchase agreements to fund repurchases of HECMs. In addition, management from time to time pursues other financing facilities. We may access the capital markets from time to time, in public or in private transactions, to augment our liquidity position, fund growth opportunities or for other reasons. We continually monitor our cash flows and liquidity in order to be responsive to changing conditions.

We have an effective universal shelf registration statement on file with the SEC. Under this universal shelf registration statement, we have the capacity to offer and sell from time to time an indeterminate number of our securities, including common stock, debt securities, preferred stock, warrants and units, having an aggregate initial offering price not to exceed $1.5 billion. This universal shelf registration statement expires on or about January 13, 2018.

Share Repurchase Plan

On May 6, 2015, the Board of Directors of the Company authorized us to repurchase up to $50.0 million of shares of our common stock, during the period beginning on May 11, 2015 and ending on May 31, 2016. Repurchases may be made from time to time based upon our discretion through one or more open market or privately negotiated transactions, and pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act. The timing and amounts of any such repurchases will depend on a variety of factors, including the market price of our shares and general market and economic conditions. The share repurchase program may be extended, suspended or discontinued at any time without notice.

At December 31, 2015, we had repurchased 2,382,733 shares of common stock pursuant to our share repurchase plan at an aggregate cost of $28.1 million , or an average cost of $11.78 per share. Shares of common stock that we repurchase are canceled and return to the status of authorized but unissued shares.

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Mortgage Loan Servicing Business

Our servicing agreements impose on us various rights and obligations that affect our liquidity. Among the most significant of these obligations is the requirement that we advance our own funds to pay taxes, insurance and foreclosure costs and various other items, referred to as protective advances. Protective advances are required to preserve the collateral underlying the residential loans being serviced. In addition, we advance our own funds to meet contractual payment requirements for credit owners. As a result of bulk servicing right acquisitions in 2013 and 2014, we experienced and continue to incur an elevated level of advance requirements. Sub-servicers are generally reimbursed for advances in the month following the advance, so our advance funding requirements may be reduced if we succeed in increasing the fee-for-service mix in our servicing portfolio. In the normal course of business, we borrow money from various counterparties who provide us with financing to fund a portion of our mortgage loan related servicing advances on a short-term basis or provide for reimbursement within an agreed-upon period. Our ability to fund servicing advances is a significant factor that affects our liquidity, and to operate and grow our servicing portfolio we depend upon our ability to secure these types of arrangements on acceptable terms and to renew or replace existing financing facilities as they expire. However, there can be no assurance that these facilities will be available to us in the future. The servicing advance financing agreements that support our servicing operations are discussed below.

Servicing Advance Liabilities

We have four servicing advance facilities through several lenders and an Early Advance Reimbursement Agreement with Fannie Mae which, in each case, are used to fund servicer and protective advances that are our responsibility under certain servicing agreements. The servicing advance facilities and the Early Advance Reimbursement Agreement had an aggregate capacity amount of $1.5 billion at December 31, 2015 . The interest rates are either fixed or are primarily based on LIBOR plus between 2.30% and 4.40% and have various expiration dates through October 2018. Payments on the amounts due under these agreements are paid from proceeds received by the subsidiaries (i) in connection with the liquidation of mortgaged properties, (ii) from repayments received from mortgagors, or (iii) from reimbursements received from the owners of the mortgage loans, such as Fannie Mae, Freddie Mac and private label securitization trusts. Accordingly, repayment of the servicing advance liabilities is dependent on the proceeds that are received on the underlying advances associated with the agreements. Two of the servicing advance facilities, with total borrowing capacity of $1.2 billion , are non-recourse to the Company.

Servicing Advance Facilities

At December 31, 2015 , we had $1.1 billion outstanding under all servicing advance facilities which have an aggregate capacity of $1.3 billion. The servicing advance facilities contain customary events of default and covenants, including financial covenants. Financial covenants most sensitive to our operating results and financial position are the requirements that a subsidiary maintain minimum tangible net worth, indebtedness to tangible net worth and minimum liquidity. Our subsidiary was in compliance with these financial covenants at December 31, 2015 .

We are party to a servicer advance financing facility that provides funding for servicer and protective advances made by Ditech Financial in connection with its servicing of certain Fannie Mae and Freddie Mac mortgage loans. On October 21, 2015, this facility was amended and restated to provide for the issuance of $500.0 million aggregate principal amount of term notes consisting of Series 2015-T1 one-year term notes with an initial aggregate principal balance of $360.0 million and Series 2015-T2 three-year term notes with an initial aggregate principal balance of $140.0 million ; to extend the commitment for up to $600.0 million of previously issued Series 2014-VF2 variable funding notes until October 2016; and to reduce total borrowing capacity under this facility by $100.0 million to $1.1 billion in the aggregate. The proceeds from the issuance of the Series 2015-T1 term notes and the Series 2015-T2 term notes were used to reduce the outstanding principal balance of the Series 2014-VF2 variable funding notes and to pay certain transaction fees, costs and expenses.

The maximum permitted principal balance of the variable funding notes that can be drawn at any given time is dependent upon the amount of eligible collateral owned by the issuer of the notes and, after giving effect to the issuance of the Series 2015-T1 term notes and the Series 2015-T2 term notes, may not exceed $600.0 million in the aggregate.

The collateral securing the term notes and the variable funding notes consists primarily of rights to reimbursement for servicer and protective advances in respect of certain mortgage loans serviced by Ditech Financial on behalf of Freddie Mac and Fannie Mae.

Each series of term notes and variable funding notes were issued in four classes. Interest on the term notes is based on a fixed rate per annum ranging from approximately 2.30% to 3.93% for the Series 2015-T1 term notes and 3.09% to 4.67% for the Series 2015-T2 term notes. The interest on the variable funding notes is based on one-month LIBOR, (or, in certain circumstances, the higher of (i) the prime rate and (ii) the federal funds rate plus 0.50%) plus a per annum margin ranging from approximately 2.34% to 4.36%.

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If the Series 2015-T1 term notes are not redeemed or refinanced on or prior to October 17, 2016, and the Series 2015-T2 term notes are not redeemed or refinanced on or prior to October 15, 2018, one-twelfth of the related note balances will be required to be repaid on each monthly payment date thereafter. Failure to make any such one-twelfth payment will result in an event of default. We may repay and redraw the variable funding notes issued for 364-days from and including October 21, 2015, subject to the satisfaction of various funding conditions. If such 364-day period is not extended, the variable funding notes will become due and payable on October 19, 2016.

Under this facility, creditors of the issuer and depositor entities (including the holders of the term notes and variable funding notes) have no recourse to any assets or revenues of Ditech Financial or the Parent Company other than to the limited extent of Ditech Financial’s or the Parent Company’s obligations with respect to various representations and warranties, covenants and indemnities under this facility and the Parent Company’s obligations as a guarantor of certain of Ditech’s representations, warranties, covenants and indemnities under the facility. Creditors of the Parent Company and Ditech Financial do not have recourse to any assets or revenues of either the issuer or depositor entities under the facility.

The facility's base indenture and indenture supplements include facility events of default and target amortization events customary for financings of this type, including but not limited to target amortization events related to breaches of covenants, defaults under certain other material indebtedness, material judgments, certain tests related to the collection and performance of the receivables securing the notes issued pursuant to the base indenture and the applicable indenture supplement, and with respect to the variable funding notes, certain financial tests and change of control. Upon the occurrence of an event of default, specified percentages of noteholders have the right to terminate all commitments and accelerate the notes under the base indenture, enforce their rights with respect to the collateral and take certain other actions. The events of default include, among other events, the occurrence of any failure to make payments (subject to certain cure periods and including balances due after the occurrence of a target amortization event), failure of Ditech Financial to satisfy various deposit and remittance obligations as servicer of certain mortgage loans, the requirement of a subsidiary, Green Tree Agency Advance Funding Trust I, to be registered as an “investment company” under the Investment Company Act of 1940, as amended, certain tests related to the collection and performance of the receivables securing the notes issued pursuant to the base indenture and applicable indenture supplement, removal of Ditech Financial’s status as an approved seller or servicer by either Fannie Mae or Freddie Mac and bankruptcy events.

In connection with this facility, we entered into an acknowledgment with Fannie Mae, dated as of December 19, 2014, and an amended and restated consent agreement with Freddie Mac, dated as of October 21, 2015, which (i) in the case of Fannie Mae, waived or (ii) in the case of Freddie Mac, subordinated, their respective rights of set-off against rights to reimbursement for certain servicer advances and delinquency advances subject to this facility. The Fannie Mae acknowledgment agreement remains in effect unless Fannie Mae withdraws its consent (i) at each yearly anniversary of the agreement by providing thirty days' advance written notice or (ii) upon certain other specified events. The Freddie Mac consent agreement automatically renews for successive annual terms; however, Freddie Mac may terminate its consent on 30 days' written notice. If either Fannie Mae or Freddie Mac were to withdraw such waiver or subordination, as applicable, of its respective rights of set-off, our ability to increase the draws on the variable funding notes or maintain the drawn balances thereunder could be materially limited or eliminated.

Early Advance Reimbursement Agreement

Ditech Financial's Early Advance Reimbursement Agreement with Fannie Mae is used exclusively to fund certain principal and interest, servicer and protective advances that are the responsibility of Ditech Financial under its Fannie Mae servicing agreements. This agreement was renewed in April 2015 and now expires in March 2016. If not renewed, there will be no additional funding by Fannie Mae of new advances under the agreement. In addition, collections recovered during the 18 months following the expiration of the agreement are to be remitted to Fannie Mae to settle any remaining outstanding balance due under such agreement. Upon expiration of the 18 month period, any remaining balance would become due and payable. At December 31, 2015 , we had borrowings of $156.7 million under the Early Advance Reimbursement Agreement, which has a capacity of $200.0 million .

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Mortgage Loan Originations Business

Master Repurchase Agreements

We utilize master repurchase agreements to support our origination or purchase of mortgage loans. These agreements were entered into by Ditech Financial. The five facilities had an aggregate capacity of $2.3 billion at December 31, 2015 . At December 31, 2015 , the interest rates on the facilities were primarily based on LIBOR plus between 2.10% and 3.00% and have various expiration dates through October 2016 . These facilities provide creditors a security interest in the mortgage loans that meet the eligibility requirements under the terms of the particular facility in exchange for cash proceeds used to originate or purchase mortgage loans. We agree to repay borrowings under these facilities within a specified timeframe, and the source of repayment is typically from the sale or securitization of the underlying loans into the secondary mortgage market. We evaluate our needs under these facilities based on forecasted mortgage loan origination volume; however, there can be no assurance that these facilities will be available to us in the future. The aggregate capacity includes $1.0 billion of committed funds and $1.3 billion of uncommitted funds. To the extent uncommitted funds are requested to purchase or originate mortgage loans, the counterparties have no obligation to fulfill such request. All obligations of Ditech Financial under the master repurchase agreements are guaranteed by the Parent Company. We had $1.2 billion of short-term borrowings under these master repurchase agreements at December 31, 2015 , which included $305.8 million of borrowings utilizing uncommitted funds.

All of our master repurchase agreements contain customary events of default and covenants, the most significant of which are financial covenants. Financial covenants that are most sensitive to the operating results and resulting financial position are minimum tangible net worth requirements, indebtedness to tangible net worth ratio requirements, and minimum liquidity and profitability requirements.

On June 22, 2015, as a result of a group of affiliated stockholders of the Company publicly disclosing on a Schedule 13D filing with the SEC that it had acquired beneficial ownership in excess of 20% of the outstanding common stock of the Company, a “change of control” event of default occurred under a master repurchase agreement relating to one of our mortgage warehouse facilities, which then caused a “cross-default” event of default to occur under certain other master repurchase agreements relating to certain additional mortgage warehouse facilities. We promptly obtained waivers for such “change of control” event of default and each related “cross-default” event of default from all applicable lenders. The master repurchase agreement under which the “change of control” event of default occurred was also amended to remove the change of control provision as it relates to the Parent Company.

For the quarter ended December 31, 2015, two of Ditech Financial’s master repurchase agreements were amended to allow for a net loss under their respective minimum profitability covenants. Without these amendments, Ditech Financial would not have been in compliance with these covenants for the quarter ended December 31, 2015.

As a result of Ditech Financial obtaining these amendments, we were in compliance with all financial covenants relating to master repurchase agreements at December 31, 2015 .

Representations and Warranties

In conjunction with our originations business, we provide representations and warranties on loan sales. We sell substantially all of our originated or purchased mortgage loans into the secondary market for securitization or to private investors as whole loans. We sell conventional conforming and government-backed mortgage loans through GSE and agency-sponsored securitizations in which mortgage-backed securities are created and sold to third-party investors. We also sell non-conforming mortgage loans to private investors. In doing so, representations and warranties regarding certain attributes of the loans are made to the third-party investor. Subsequent to the sale, if it is determined that a loan sold is in breach of these representations or warranties, we generally have an obligation to cure such breach. In general, if we are unable to cure such breach, the purchaser of the loan may require us to repurchase such loan for the unpaid principal balance, accrued interest, and related advances, and in any event, we must indemnify such purchaser for certain losses and expenses incurred by such purchaser in connection with such breach. Our credit loss may be reduced by any recourse we have to correspondent lenders that, in turn, have sold such residential loans to us and breached similar or other representations and warranties.

Our representations and warranties are generally not subject to stated limits of exposure with the exception of certain loans originated under HARP, which limits exposure based on payment history of the loan. At December 31, 2015 , our maximum exposure to repurchases due to potential breaches of representations and warranties was $51.3 billion , and was based on the original unpaid principal balance of loans sold from the beginning of 2013 through the year ended December 31, 2015 adjusted for voluntary payments made by the borrower on loans for which we perform the servicing. A majority of our loan sales were servicing retained.

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Rollforwards of the liability associated with representations and warranties are included below (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Balance at beginning of the year	$	10,959		$	9,134		$	75
Provision for new sales	16,008			7,741			9,059
Change in estimate of existing reserves	(2,419		)	(5,068		)	—
Net realized losses on repurchases	(1,403		)	(848		)	—
Balance at end of the year	$	23,145		$	10,959		$	9,134

The change in estimate of existing reserves during 2014 is due primarily to timely payment history on loans originated under HARP and lower history of actual origination defects as compared to original expectation.

Rollforwards of loan repurchase requests based on the original unpaid principal balance are included below (dollars in thousands):



	For the Years Ended December 31,
	2015					2014
	No. of Loans		Unpaid Principal Balance			No. of Loans		Unpaid Principal Balance
Balance at beginning of the year	48		$	11,509		10		$	2,324
Repurchases and indemnifications	(81	)	(14,568		)	(16	)	(3,607		)
Claims initiated	278		58,924			115		28,032
Rescinded	(215	)	(49,640		)	(61	)	(15,240		)
Balance at end of the year	30		$	6,225		48		$	11,509

Reverse Mortgage Business

Master Repurchase Agreements

Through RMS's warehouse facilities under master repurchase agreements we finance the origination or purchase of reverse loans and repurchases of certain HECMs and real estate owned from Ginnie Mae securitization pools. At December 31, 2015 , we had a facility with a capacity of $125.0 million that could be used to originate or purchase reverse loans and another facility with a capacity of $100.0 million that could be used to repurchase HECMs and real estate owned from Ginnie Mae securitization pools. The interest rates on the facilities are primarily based on LIBOR plus between 2.50% and 3.13% and have expiration dates through October 2016 . These facilities are secured by the underlying asset and provide creditors a security interest in the assets that meet the eligibility requirements under the terms of the particular facility. We agree to repay the borrowings under these facilities within a specified timeframe, and the source of repayment is typically from proceeds received on the securitization of the underlying reverse loans, claim proceeds received from HUD or liquidation proceeds from the sale of real estate owned. We evaluate our needs under these facilities based on forecasted reverse loan origination volume and repurchases; however, there can be no assurance that these facilities will be available to us in the future. At December 31, 2015, $175.0 million of the aggregate capacity has been provided on an uncommitted basis, and as such, to the extent these funds are requested to purchase or originate reverse loans or repurchase HECMs and real estate owned from Ginnie Mae securitization pools, the counterparties have no obligation to fulfill such request. All obligations of RMS under the master repurchase agreements are guaranteed by the Parent Company. We had $122.3 million of borrowings under these master repurchase agreements at December 31, 2015 which included $87.4 million of borrowings relating to repurchases of HECMs and real estate owned.

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Reverse Loan Securitizations

We transfer reverse loans that we have originated or purchased through the Ginnie Mae HMBS issuance process. The proceeds from the transfer of the HMBS are accounted for as a secured borrowing and are classified on the consolidated balance sheets as HMBS related obligations. The proceeds from the transfer are used to repay borrowings under our master repurchase agreements. At December 31, 2015 , we had $10.0 billion in unpaid principal balance outstanding on the HMBS related obligations. At December 31, 2015 , $10.0 billion in unpaid principal balance of reverse loans and real estate owned was pledged as collateral to the HMBS beneficial interest holders, and are not available to satisfy the claims of our creditors. Ginnie Mae, as guarantor of the HMBS, is obligated to the holders of the HMBS in an instance of RMS default on its servicing obligations, or when the proceeds realized on HECMs are insufficient to repay all outstanding HMBS related obligations. Ginnie Mae has recourse to RMS in connection with certain claims relating to the performance and obligations of RMS as both an issuer of HMBS and a servicer of HECMs underlying HMBS.

Borrower remittances received on the reverse loans, if any, and proceeds received from the sale of real estate owned and our funds used to repurchase reverse loans are used to reduce the HMBS related obligations by making payments to Ginnie Mae, who will then remit the payments to the holders of the HMBS. The maturity of the HMBS related obligations is directly affected by the liquidation of the reverse loans or liquidation of real estate owned and events of default as stipulated in the reverse loan agreements with borrowers. Refer to the below for additional information on repurchases of reverse loans.

HMBS Issuer Obligations

As an HMBS issuer, we assume certain obligations related to each security issued. The most significant obligation is the requirement to purchase loans out of the Ginnie Mae securitization pools once the outstanding principal balance of the related HECM is equal to or greater than 98% of the maximum claim amount. Performing repurchased loans are conveyed to HUD and payment is received from HUD typically within 30 days of repurchase. Non-performing repurchased loans are generally liquidated through foreclosure and subsequent sale of real estate owned. Loans are considered non-performing upon events such as, but not limited to, the death of the mortgagor, the mortgagor no longer occupying the property as their principal residence, or the property taxes or insurance not being paid. We rely upon certain master repurchase agreements and operating cash flows, to the extent necessary, to repurchase loans. The timing and amount of our obligation to repurchase HECMs is uncertain as repurchase is predicated on certain factors such as whether or not a borrower event of default occurs prior to the HECM reaching the mandatory repurchase threshold under which we are obligated to repurchase the loan.

Rollforwards of reverse loan and real estate owned repurchase activity (by unpaid principal balance) are included below (in thousands):



	For the Years Ended December 31,
	2015			2014
Balance at beginning of the year	$	114,727		$	50,687
Repurchases and other additions ⁽¹⁾	333,229			147,599
Liquidations	(214,362		)	(83,559		)
Balance at end of the year	$	233,594		$	114,727

__________


(1)	Other additions include additions to the principal balance related to interest, servicing fees, mortgage insurance and advances.

Our repurchases of reverse loans and real estate owned have increased significantly as compared to 2014. We expect an increase to repurchase requirements due to the increased flow of defaulted HECMs and real estate owned that have moved through the buyout process.

Reverse Loan Servicer Obligations

Similar to our mortgage loan servicing business, our reverse mortgage servicing agreements impose on us obligations to advance our own funds to meet contractual payment requirements for customers and credit owners and to pay protective advances, which are required to preserve the collateral underlying the residential loans being serviced. We rely upon operating cash flows to fund these obligations.

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As servicer of reverse loans, we are also obligated to fund additional borrowing capacity in the form of undrawn lines of credit on floating rate and fixed rate reverse loans. We rely upon our operating cash flows to fund these additional borrowings on a short-term basis prior to securitization (when performing services of both the issuer and servicer) or reimbursement by the issuer (when providing third-party servicing). The additional fundings made by us, as issuer and servicer, are generally securitized within 30 days after funding. Similarly, the additional fundings made by us, as third-party servicer, are typically reimbursed by the issuer within 30 days after funding. Our commitment to fund additional borrowing capacity was $1.3 billion at December 31, 2015 , which includes $868.3 million in capacity that was available to be drawn by borrowers at December 31, 2015 and $475.9 million in capacity that will become eligible to be drawn by borrowers throughout the twelve months ending December 31, 2016 assuming the loans remain performing. There is no termination date for these drawings so long as the loan remains performing. The obligation to fund these additional borrowings could have a significant impact on our liquidity.

Servicing Rights Related Liabilities

Excess Servicing Spread Liabilities

In July 2014, we completed an excess servicing spread transaction with WCO whereby we sold 70% of the excess servicing spread from a pool of servicing rights, with an unpaid principal balance of $25.2 billion, to WCO for a sales price of $75.4 million. In November 2015, we completed an additional excess servicing spread transaction with WCO whereby we sold 100% of excess servicing spread from a pool of servicing rights, with an unpaid principal balance of $7.5 billion , to WCO for a sales price of $46.8 million . We recognized the proceeds from the sales of the excess servicing spreads as financing arrangements. We elected to record the excess servicing spread liabilities at fair value similar to the related servicing rights. At December 31, 2015 , the carrying value of our excess servicing spread liabilities was $100.1 million , the repayment of which is based on future servicing fees received from the residential loans underlying the servicing rights.

Servicing Rights Financing

In November 2015, we completed the sale of servicing rights, with an unpaid principal balance of $1.8 billion, to WCO for a sales price of $17.8 million. We recognized the proceeds from the sale of the servicing rights as a financing arrangement. We elected to record the servicing rights financing at fair value similar to the related servicing rights. The repayment of such financing is based on future servicing fees received from the residential loans underlying the servicing rights. At December 31, 2015 , the carrying value of our servicing rights financing and the related servicing rights was $16.9 million . We have a receivable due from WCO for this sale of $8.9 million at December 31, 2015. In November 2015, we also entered into a sub-servicing arrangement with WCO pursuant to which we will sub-service the residential loans underlying such servicing rights in exchange for a sub-servicing fee.

Corporate Debt

Term Loans and Revolver

We have a $1.5 billion 2013 Term Loan and a $125.0 million 2013 Revolver. Our obligations under the 2013 Secured Credit Facilities are guaranteed by substantially all of our subsidiaries and secured by substantially all of our assets subject to certain exceptions, such as the assets of the consolidated Residual and Non-Residual Trusts and consolidated financing entities, as well as the residential loans and real estate owned of the Ginnie Mae securitization pools that have been recorded on our consolidated balance sheets.

The material terms of our 2013 Secured Credit Facilities are summarized in the table below:



Debt Agreement	Interest Rate	Amortization	Maturity/Expiration
$1.5 billion 2013 Term Loan	LIBOR plus 3.75% LIBOR floor of 1.00%	1.00% per annum beginning 1st quarter of 2014; remainder at final maturity	December 18, 2020
$125.0 million 2013 Revolver	LIBOR plus 3.75%	Bullet payment at maturity	December 19, 2018

An amount of up to $25.0 million under the 2013 Revolver is available to be used for the issuance of LOCs. Any amounts outstanding in issued LOCs reduce availability for cash borrowings under the 2013 Revolver. There have been no borrowings under the 2013 Revolver. At December 31, 2015 , we had $0.3 million outstanding in an issued LOC with remaining availability under the 2013 Revolver of $124.7 million . The commitment fee on the unused portion of the 2013 Revolver is 0.50% per annum. During the year ended December 31, 2015, we made a voluntary payment of $50.0 million on our 2013 Term Loan that resulted in a loss on extinguishment of $1.0 million due to the write-off of the related issue costs. The loss on extinguishment is recorded in gains (losses) on extinguishments on the consolidated statements of comprehensive income (loss). The balance outstanding on the 2013 Term Loan was $1.4 billion at December 31, 2015 .

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The 2013 Secured Credit Facilities contain restrictive covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to incur or guarantee additional indebtedness, pay dividends on or redeem or repurchase our capital stock, make certain types of investments, create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries, incur certain liens, sell or otherwise dispose of certain assets, enter into transactions with affiliates, enter into sale and leaseback transactions, and consolidate or merge with or into, or sell all or substantially all of our assets to, another person. These covenants are subject to a number of important limitations and exceptions. The 2013 Secured Credit Facilities also contain customary events of default, including the failure to make timely payments on the 2013 Term Loan and 2013 Revolver or other material indebtedness, the failure to satisfy certain covenants and specified events of bankruptcy and insolvency. We were in compliance with all covenants contained in our 2013 Secured Credit Facilities at December 31, 2015 .

Senior Notes

In December 2013, we completed the sale of $575.0 million aggregate principal amount of Senior Notes, which pay interest semi-annually at an interest rate of 7.875% and mature on December 15, 2021 . The balance outstanding on the Senior Notes was $528.3 million at December 31, 2015 .

The Senior Notes were offered and sold in a transaction exempt from the registration requirements under the Securities Act, and resold to qualified institutional buyers in reliance on Rule 144A and Regulation S under the Securities Act. The Senior Notes were issued pursuant to an indenture, dated as of December 17, 2013, among the Company, the guarantor parties thereto and Wells Fargo Bank, National Association, as trustee. The Senior Notes are guaranteed on an unsecured senior basis by each of our current and future wholly-owned domestic subsidiaries that guarantee our obligations under our 2013 Term Loan. On October 14, 2014, we filed with the SEC a registration statement under the Securities Act so as to allow holders of the Senior Notes to exchange their Senior Notes for the same principal amount of a new issue of notes with identical terms, except that the exchange notes are not subject to certain restrictions on transfer. The registration statement was declared effective by the SEC on October 27, 2014, the exchange offer expired on November 25, 2014, and settlement occurred on December 2, 2014.

On or prior to December 15, 2016, we may on any one or more occasions redeem up to 35% of the aggregate principal amount of the Senior Notes with the net cash proceeds of certain equity offerings at 107.875% of their aggregate principal amount plus accrued and unpaid interest as of the redemption date. Prior to December 15, 2016, we may redeem some or all of the Senior Notes at a make-whole premium plus accrued and unpaid interest, if any, as of the redemption date.

On or after December 15, 2016, we may on any one or more occasions redeem some or all of the Senior Notes at a purchase price equal to 105.906% of the principal amount of the Senior Notes, plus accrued and unpaid interest, if any, as of the redemption date, such optional redemption prices decreasing to 103.938% on or after December 15, 2017, 101.969% on or after December 15, 2018 and 100.000% on or after December 15, 2019.

If a change of control, as defined under the Senior Notes Indenture, occurs, the holders of our Senior Notes may require that we purchase with cash all or a portion of these Senior Notes at a purchase price equal to 101% of the principal amount of the Senior Notes, plus accrued and unpaid interest to the redemption date.

The Senior Notes Indenture contains restrictive covenants that, among other things, limits our ability and the ability of our restricted subsidiaries to incur or guarantee additional indebtedness, pay dividends on or redeem or repurchase our capital stock, make certain types of investments, create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries, incur certain liens, sell or otherwise dispose of certain assets, enter into transactions with affiliates, enter into sale and leaseback transactions, and consolidate or merge with or into, or sell all or substantially all of our assets to, another person. These covenants are subject to a number of important limitations and exceptions. The Senior Notes Indenture also contains customary events of default, including the failure to make timely payments on the Senior Notes or other material indebtedness, the failure to satisfy certain covenants and specified events of bankruptcy and insolvency. We were in compliance with all covenants contained in the Senior Notes Indenture at December 31, 2015 .

During the fourth quarter of 2015, we repurchased Senior Notes with a carrying value of $35.7 million and an unpaid principal balance of $36.3 million for $30.0 million that resulted in a gain on extinguishment of $5.7 million , which is recorded in gains (losses) on extinguishments on the consolidated statements of comprehensive income (loss).

Convertible Notes

In October 2012, we closed on a registered underwritten public offering of $290.0 million aggregate principal amount of Convertible Notes. The Convertible Notes pay interest semi-annually on May 1 and November 1, commencing on May 1, 2013, at a rate of 4.50% per annum, and mature on November 1, 2019 .

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Prior to May 1, 2019, the Convertible Notes will be convertible only upon specified events and during specified periods, and, on or after May 1, 2019, at any time. The Convertible Notes will initially be convertible at a conversion rate of 17.0068 shares of our common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $58.80 per share. Upon conversion, we may pay or deliver, at our option, cash, shares of our common stock, or a combination of cash and shares of common stock. It is our intent to settle all conversions through combination settlement, which involves payment of an amount of cash equal to the principal amount and any excess of conversion value over the principal amount in shares of common stock.

As market conditions warrant, we may from time to time, subject to limitations as stated in our 2013 Secured Credit Facilities, repurchase debt securities issued by us, in the open market, in privately negotiated transactions, by tender offer or otherwise.

Mortgage-Backed Debt

We funded the residential loan portfolio in the consolidated Residual Trusts through the securitization market. We record on our consolidated balance sheets the assets and liabilities, including mortgage-backed debt, of the Non-Residual Trusts as a result of certain obligations to exercise mandatory clean-up calls for each of these trusts at their earliest exercisable dates. The mortgage-backed debt issued by the Residual Trusts is accounted for at amortized cost. The mortgage-backed debt of the Non-Residual Trusts is accounted for at fair value. The total unpaid principal balance of mortgage-backed debt was $1.1 billion at December 31, 2015 .

At December 31, 2015 , mortgage-backed debt was collateralized by $1.1 billion of assets including residential loans, receivables related to the Non-Residual Trusts, real estate owned and restricted cash and cash equivalents. All of the mortgage-backed debt is non-recourse and not cross-collateralized and, therefore, must be satisfied exclusively with the proceeds from the residential loans and real estate owned held in each securitization trust and also from draws on the LOCs of certain Non-Residual Trusts.

Borrower remittances received on the residential loans of the Residual and Non-Residual Trusts collateralizing this debt and draws under LOCs issued by a third-party and serving as credit enhancements to certain of the Non-Residual Trusts are used to make payments on the mortgage-backed debt. The maturity of the mortgage-backed debt is directly affected by the rate of principal prepayments on the collateral. As a result, the actual maturity of the mortgage-backed debt is likely to occur earlier than the stated maturity. Certain of our mortgage-backed debt issued by the Residual Trusts is also subject to voluntary redemption according to the specific terms of the respective indenture agreements, including an option by us to exercise a clean-up call. The mortgage-backed debt issued by the Non-Residual Trusts is subject to mandatory clean-up call provisions pursuant to which we are required to purchase the related mortgage loans from the trusts at the earliest of their exercisable call dates, which is the date each loan pool falls to 10% of the original principal amount. We anticipate the mandatory call obligations to settle beginning in 2017 and continuing through 2019 based upon our current cash flow projections for the Non-Residual Trusts. At December 31, 2015, the total estimated outstanding balance of the residential loans expected to be called at the respective call dates is $417.6 million . We expect to finance the capital required to exercise the mandatory clean-up call primarily through cash on hand, asset-backed financing or in partnership with a capital provider, or through any combination of the foregoing. However, there can be no assurance that we will be able to sell the loans or obtain financing when needed. Our obligation for the mandatory clean-up call could have a significant impact on our liquidity.

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Contractual Obligations

The following table summarizes, by remaining maturity, our future cash obligations at December 31, 2015 (in thousands):



	Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years		Indeterminate Maturity		Total
Corporate debt
Principal	$	—	$	—	$	1,713,750	$	538,662	$	—	$	2,252,412
Interest ⁽¹⁾	124,225		248,074		231,649		42,420		—		646,368
Total corporate debt	124,225		248,074		1,945,399		581,082		—		2,898,780
Warehouse borrowings ⁽²⁾	1,340,388		—		—		—		—		1,340,388
Leases ⁽³⁾	18,052		32,552		23,700		41,437				115,741
Mandatory call obligation	—		354,679		62,904		—		—		417,583
HMBS related obligations ⁽⁴⁾	—		—		—		—		10,012,283		10,012,283
Acquisitions of servicing rights and related advances ⁽⁵⁾	27,667		—		—		—		—		27,667
Unfunded commitments associated with the Originations segment ⁽⁶⁾	4,101,892		—		—		—		—		4,101,892
Unfunded commitments associated with the Reverse Mortgage segment ^{(6) (7)}	36,677		—		—		—		1,363,387		1,400,064
Early Advance Reimbursement Agreement ⁽⁸⁾	156,739		—		—		—		—		156,739
Servicing advance facilities ⁽⁸⁾	—		79,772		—		—		—		79,772
Uncertain tax positions	—		—		—		—		64,554		64,554
Total	$	5,805,640	$	715,077	$	2,032,003	$	622,519	$	11,440,224	$	20,615,463

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(1)	Amounts relate to future cash payments for interest expense on our 2013 Term Loan, Convertible Notes and Senior Notes and are calculated by multiplying outstanding principal balances by the respective interest rate for each commitment at December 31, 2015 .


(2)	Our warehouse borrowings are repaid primarily with proceeds from sales of mortgage loans and securitizations of reverse loans.


(3)	Includes $0.5 million in capital leases scheduled to mature in less than 1 year and included in corporate debt on the consolidated balance sheets.

(4)

HMBS related obligations have no stated maturity. The maturity of HMBS related obligations is directly affected by the liquidation of the reverse loans or liquidation of real estate owned, including voluntary liquidation on behalf of the borrower, and events of default as stipulated in the reverse loan agreements with borrowers. Refer to the HMBS Issuer Obligations section above for HECM and real estate owned repurchase activity, which would exclude voluntary liquidations made on behalf of the borrower, during 2015 and 2014. There is no repurchase activity in instances where proceeds from voluntary liquidations are made on behalf of the borrower as such proceeds are used to settle the associated HMBS related obligation.


(5)	Contractual obligations associated with acquisitions of servicing rights and related advances for which the Company has executed an agreement.


(6)	Refer to Note 29 in the Notes to Consolidated Financial Statements included in Item 8 for further information regarding unfunded commitments.

(7)

Unfunded commitments presented under indeterminate maturity above represents the aggregate unfunded borrowing capacity of borrowers under our reverse loans at December 31, 2015. This amount includes $868.3 million in capacity that was available to be drawn by borrowers at December 31, 2015 and $475.9 million in capacity that will become eligible to be drawn by borrowers throughout 2016 assuming the loans remain performing. There is no termination date for these drawings so long as the loan remains performing.

(8)

Our Early Advance Reimbursement Agreement and servicing advance facilities above are included in servicing advance liabilities on our consolidated balance sheets. Collections of advances that have been reimbursed under the Early Advance Reimbursement Agreement require remittance upon collection to settle the outstanding balance. We are required to remit 60% to 85% of advances reimbursed under the servicing advance facilities to settle the balance outstanding under the agreements.

We exclude from the table above the amounts due under the Receivables Loan Agreement and the Indenture Agreement, which are included in servicing advance liabilities on our consolidated balance sheets. The Receivables Loan Agreement and the Indenture Agreement are non-recourse to us. Payments under these facilities are required upon collection of the underlying advances that have been reimbursed under the agreement.

Our servicing rights related liabilities have been excluded from the table above as repayment is based on future servicing fees received from residential loans underlying the servicing rights.

We exclude mortgage-backed debt from the contractual obligations disclosed in the table above as this debt is non-recourse and not cross-collateralized and, therefore, must be satisfied exclusively from the proceeds of the residential loans and real estate owned held in the securitization trusts and by the $260.4 million in LOCs available for certain Non-Residual Trusts.

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Operating lease obligations include (i) a lease for our principal operating location in Tampa, Florida; (ii) leases for our centralized servicing operations in Saint Paul, Minnesota; Tempe, Arizona; Rapid City, South Dakota; Irving, Texas; and Jacksonville, Florida; (iii) leases related to our reverse mortgage operations located in San Diego, California; Charlotte, North Carolina; Palm Beach Gardens, Florida; and Houston, Texas; (iv) a lease for our originations operations located in Fort Washington, Pennsylvania; and (v) other regional servicing and originations operations.

Certain Capital Requirements and Guarantees

We, including our subsidiaries, are required to comply with requirements under federal and state laws and regulations, including requirements imposed in connection with certain licenses and approvals, as well as requirements of federal, state, GSE, Ginnie Mae and other business partner loan programs, some of which are financial covenants related to minimum levels of net worth and other financial requirements. If these mandatory imposed capital requirements are not met, our selling and servicing agreements could be terminated and lending and servicing licenses could be suspended or revoked. For further information relating to these requirements, including certain Ginnie Mae and Fannie Mae waivers and certain guarantees provided by the Parent Company, refer to Note 28 in the Notes to Consolidated Financial Statements included in Item 8.

Noncompliance with those requirements for which we have not received a waiver could have a negative impact on our company which could include suspension or termination of the selling and servicing agreements which would prohibit future origination or securitization of mortgage loans or being an approved seller or servicer for the applicable GSE.

After taking into account the waivers mentioned at Note 28 in the Notes to Consolidated Financial Statements included in Item 8, all of our subsidiaries were in compliance with all of their capital requirements at December 31, 2015 .

We also have financial covenant requirements relating to our servicing advance facilities and master repurchase agreements. Refer to additional information at the Mortgage Loan Servicing Business, Mortgage Loan Originations Business and Reverse Mortgage Business sections above for further information.

Dividends

We have no current plans to pay any cash dividends on our common stock. Any decision to declare and pay dividends in the future will be made at the discretion of our Board of Directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our Board of Directors may deem relevant. In addition, our ability to pay dividends is limited by covenants in our 2013 Credit Agreement and the Senior Notes Indenture. Refer to the Corporate Debt section above.

Sources and Uses of Cash

The following table sets forth selected consolidated cash flow information (in thousands):



	For the Years Ended December 31,									Variance
	2015			2014			2013			2015 vs. 2014			2014 vs. 2013
Cash flows used in operating activities:
Net income (loss) adjusted for non-cash operating activities	$	(249,042	)	$	(155,149	)	$	(224,952	)	$	(93,893	)	$	69,803
Changes in assets and liabilities	177,196			(213,203		)	(983,868		)	390,399			770,665
Net cash provided by (used in) originations activities ⁽¹⁾	(46,637		)	164,082			(601,655		)	(210,719		)	765,737
Proceeds from sale of trading security	70,390			—			—			70,390			—
Cash flows used in operating activities	(48,093		)	(204,270		)	(1,810,475		)	156,177			1,606,205
Cash flows used in investing activities	(454,948		)	(1,244,111		)	(3,776,083		)	789,163			2,531,972
Cash flows provided by financing activities	385,694			1,276,671			5,636,389			(890,977		)	(4,359,718		)
Net increase (decrease) in cash and cash equivalents	$	(117,347	)	$	(171,710	)	$	49,831		$	54,363		$	(221,541	)

__________


(1)	Represents purchases and originations of residential loans held for sale, net of proceeds from sales and payments.

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Operating Activities

The primary sources and uses of cash for operating activities are purchases, originations and sales activity of residential loans held for sale, changes in assets and liabilities, or operating working capital, and net loss adjusted for non-cash items. Cash used in operating activities decreased $156.2 million in 2015 as compared to 2014. The decrease in cash used in operating activities was primarily a result of an increase in cash related to changes in assets and liabilities, including higher collections of servicer and protective advances and an increase in accrued expenses related to uncertain tax positions, partially offset by higher settlements of payables relating to servicer and protective advances acquired in conjunction with the acquisition of servicing rights and a decrease in accrued expenses related to legal and regulatory matters. In addition, cash increased due to proceeds received from the sale of a trading security received as consideration for the sale of the excess servicing spread associated with certain servicing rights. These increases were partially offset by a decrease in cash related to a lower volume of loans sold in relation to originated loans.

Cash used in operating activities decreased $1.6 billion in 2014 as compared to 2013. The decrease was primarily a result of a higher volume of loans sold in relation to originated loans. In 2013, we ramped-up our mortgage loan originations business, therefore, loan originations were significantly larger than volume sold. In 2014, the relationship of loan production to volume sold normalized. In addition, during 2013, the growth of our servicing portfolio required the use of additional funds for servicer and protective advances of $778.0 million of cash, which represents a majority of the changes in assets and liabilities in 2014 as compared to 2013 in the table above.

Investing Activities

The primary sources and uses of cash for investing activities relate to purchases, originations and payment activity on reverse loans, payments received on mortgage loans held for investment, and payments made for business and servicing rights acquisitions. Net cash used in investing activities decreased $789.2 million in 2015 as compared to 2014. Cash used for purchases and originations of reverse loans held for investment, net of payments received, decreased $357.1 million during 2015 as compared to 2014 primarily as a result of an increase in principal repayments on loans and payments received for loans conveyed to HUD. Cash paid for business acquisitions and purchases of servicing rights decreased $195.8 million in 2015 as compared to 2014. In addition, we received cash proceeds of $203.9 million from the sale of residual interests and the sale of an investment in 2015.

Net cash used in investing activities decreased $2.5 billion in 2014 as compared to 2013. Cash used for purchases and originations of reverse loans held for investment, net of payments received, decreased $1.7 billion as a result of a decrease in new origination volume in our reverse mortgage operations. Cash paid for business acquisitions and purchases of servicing rights also decreased $823.8 million. The cash used in 2014 for business acquisitions and purchases of servicing rights includes cash used for the purchase of the EverBank net assets and a pool of Fannie Mae MSRs while the cash used in 2013 relates to the acquisitions of net assets from ResCap and Ally Bank as well as the BOA asset purchase. In addition, during 2014 we acquired a $64.5 million portfolio of charged-off loans.

Financing Activities

The primary sources and uses of cash for financing activities relate to securing cash for our originations, reverse mortgage and servicing businesses, as well as for our corporate investing activities. Net cash provided by financing activities decreased $891.0 million in 2015 as compared to 2014. Net cash borrowings from servicing advance liabilities used to fund advances for our servicing business decreased $528.3 million primarily as a result of less funding of advances principally driven by lower cash needed to fund servicer and protective advances as well as higher collections of advances, which are used to settle balances outstanding. Cash generated from the securitization of reverse loans, net of payments on HMBS related obligations, decreased $383.1 million primarily as a result of an increase in the repurchase of certain HECMs and real estate owned from securitization pools. Payments on corporate debt increased due to a $50.0 million voluntary debt payment made on the 2013 Term Loan and the repurchase of Senior Notes with a carrying value of $35.7 million and an unpaid principal balance of $36.3 million for $30.0 million . In addition, in 2015 we entered into an excess servicing spread transaction with, and sold servicing rights to, WCO, which provided $55.7 million in cash.

Net cash provided by financing activities decreased $4.4 billion in 2014 as compared to 2013. Cash generated from the securitization of reverse loans, net of payments on HMBS related obligations, decreased $1.8 billion as a result of a decrease in new origination volume in our reverse mortgage operations. Net cash borrowings from servicing advance liabilities used to fund advances for our servicing business decreased $476.5 million primarily as a result of less funding of advances principally driven by lower levels of servicing right acquisitions in 2014. Net cash borrowings on master repurchase agreements decreased $738.8 million due primarily to the ramp-up of our mortgage loan originations business in 2013. Net cash generated from corporate debt financing activities decreased $2.8 billion as a result of additional incremental borrowings under our 2012 Term Loan during 2013 with no comparable borrowings during 2014. During 2014, we entered into an excess servicing spread transaction with WCO which provided $75.4 million in cash.

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Credit Risk

Consumer Credit Risk

In conjunction with our originations business, we provide representations and warranties on loan sales. Subsequent to the sale, if it is determined that a loan sold is in breach of these representations or warranties, we generally have an obligation to cure such breach. In general, if we are unable to cure such breach, the purchaser of the loan may require us to repurchase such loan for the unpaid principal balance, accrued interest, and related advances, and in any event, we must indemnify such purchaser for certain losses and expenses incurred by such purchaser in connection with such breach. In the case we repurchase the loan, the Company bears any subsequent credit loss on the loan. Our credit loss may be reduced by any recourse we have to correspondent lenders that, in turn, have sold such residential loans to us and breached similar or other representations and warranties. We maintain a reserve for losses on our representations and warranties obligations. Refer to Notes 5 and 29 in the Notes to Consolidated Financial Statements included in Item 8 and to the Liquidity and Capital Resources section for additional information. At December 31, 2015 , we held $8.2 million in repurchased loans.

We are also subject to credit risk associated with mortgage loans that we purchase and originate during the period of time prior to the sale of these loans. We consider the credit risk associated with these loans to be insignificant as we hold the loans for a short period of time, typically less than 20 days, and the market for these loans continues to be highly liquid.

Counterparty Credit Risk

We are exposed to counterparty credit risk in the event of non-performance by counterparties to various agreements, including our forward sales and MBS purchase commitments. We attempt to minimize this risk through monitoring procedures, including monitoring of our counterparties’ credit ratings, review of our counterparties' financial statements, and establishment of collateral requirements. Counterparty credit risk, as well as our own credit risk, is taken into account when determining fair value, although its impact is diminished by daily cash margin posting on the majority of our forward sales and MBS purchase commitments and other collateral requirements.

Counterparty credit risk also exists with our third-party originators from whom we purchase originated mortgage loans and certain third-party originators from whom we acquire serving rights. The third-party originators incur a representation and warranty obligation when they sell the mortgage loan to us or another third party, and they agree to reimburse us for any losses incurred due to an origination defect. We become exposed to losses for origination defects if the third-party originator is not able to reimburse us for losses incurred for indemnification or repurchase. We attempt to mitigate this risk by conducting quality control reviews of the third-party originators, reviewing compliance by third-party originators with applicable underwriting standards and our client guide, and evaluating the credit worthiness of third-party originators on a periodic basis.

Real Estate Market Risk

We include on our consolidated balance sheets assets secured by real property and property obtained directly as a result of foreclosures. Residential property values are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions (such as an oversupply of housing); changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay our loans, which could also cause us to suffer losses.

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The following tables present the activity related to foreclosed property (dollars in thousands):



	For the Year Ended December 31, 2015
	Reverse Mortgage					Servicing					Non-Residual Trusts ⁽¹⁾
	Units		Amount			Units		Amount			Units		Amount
Balance at beginning of year	489		$	55,260		560		$	32,059		80		$	1,023
Foreclosures and other additions, at fair value	763		89,257			435		22,480			402		4,108
Cost basis of financed sales	—		—			(400	)	(21,588		)	—		—
Cost basis of cash sales to third parties and other dispositions ⁽²⁾	(710	)	(74,020		)	(396	)	(22,103		)	(423	)	(3,602		)
Lower of cost or fair value adjustments	—		(4,039		)	—		(481		)	—		(971		)
Balance at end of year	542		$	66,458		199		$	10,367		59		$	558

	For the Year Ended December 31, 2014
	Reverse Mortgage					Servicing					Non-Residual Trusts ⁽¹⁾
	Units		Amount			Units		Amount			Units		Amount
Balance at beginning of year	234		$	26,965		809		$	45,306		117		$	1,302
Foreclosures and other additions, at fair value	588		65,683			902		47,372			513		5,482
Cost basis of financed sales	—		—			(951	)	(51,714		)	—		—
Cost basis of cash sales to third parties and other dispositions	(333	)	(35,286		)	(200	)	(9,462		)	(550	)	(4,746		)
Lower of cost or fair value adjustments	—		(2,102		)	—		557			—		(1,015		)
Balance at end of year	489		$	55,260		560		$	32,059		80		$	1,023

__________


(1)	Foreclosed property held by the Non-Residual Trusts is included in our Other non-reportable segment.


(2)	The Servicing segment includes 327 units and $18.7 million related to the sale of our residual interests which resulted in the deconsolidation of the related foreclosed property.

A non-performing reverse loan whose maximum claim amount has not been met is generally foreclosed upon on behalf of Ginnie Mae with the real estate owned remaining in the securitization pool until liquidation. Although performing and non-performing loans are covered by FHA insurance, we may incur expenses and losses in the process of repurchasing and liquidating these loans that are not reimbursable by FHA in accordance with program guidelines. In addition, in certain circumstances, we may be subject to real estate price risk to the extent we are unable to liquidate real estate owned within the FHA program guidelines. We attempt to mitigate this risk by monitoring the aging of real estate owned and managing our marketing and sales program based on this aging. The growth in the real estate owned portfolio held by the Reverse Mortgage segment was due to growth in our business and the increased flow of HECMs that move through the foreclosure process.

Impact of Inflation and Changing Prices

Our consolidated financial statements and notes thereto presented herein have been prepared in accordance with GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering the changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike most industrial companies, nearly all of our assets and liabilities are, or are based on, financial assets. As a result, interest rates have a greater impact on our performance than do the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

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Ratings

We receive various credit and servicer ratings as set forth below. Our ratings may be subject to a revision or withdrawal at any time by the assigning rating agency, and each rating should be evaluated independently of any other rating. Rating agency ratings are not a recommendation to buy, sell or hold any security.

Credit Ratings

Credit ratings are intended to be an indicator of the creditworthiness of a particular company, security or obligation and are considered by lenders in connection with the setting of interest rates and terms for a company's borrowings. The following table summarizes our credit ratings and outlook as of the date of this report.



	Moody's	S&P
Corporate / CCR	B2	B+
Senior Secured Debt	B2	BB-
Senior Unsecured Debt	B3	B-
Outlook	Stable	Stable
Date of Last Action	May 2015	October 2015

Servicer Ratings

Residential loan and manufactured housing servicer ratings reflect the applicable rating agency's assessment of a servicer’s operational risk and how the quality and experience of the servicer affect loan performance. The following table summarizes the servicer ratings and outlook assigned to certain of our servicer subsidiaries as of the date of this report. Unless otherwise specified, these servicer ratings relate to Ditech Financial as a servicer of mortgage loans.



	Moody's	S&P	Fitch ⁽¹⁾
Residential Prime Servicer	—	—	RPS2-
Residential Subprime Servicer	SQ3+	Above Average	RPS2-
Residential Special Servicer	—	Above Average	RSS2-
Residential Second/Subordinated Lien Servicer	SQ2-	Above Average	RPS2-
Manufactured Housing Servicer	SQ2-	Above Average	—
Residential HLTV Servicer	—	—	RPS2-
Residential HELOC Servicer	—	—	RPS2-
Residential Reverse Mortgage Servicer	—	Strong ⁽²⁾	—
Outlook	Not on review	Stable	Outlook Negative
Date of Last Action	December 2015	October 2015	March 2015

__________


(1)	Following an internal review of our servicer ratings in 2015, including the servicer rating requirements contained in our contracts, we decided to no longer solicit servicer ratings from Fitch.


(2)	S&P last affirmed its rating for RMS as a residential reverse mortgage servicer in November 2015 with a stable outlook.

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Cybersecurity

We devote significant resources to maintain and regularly update our systems and processes that are designed to protect the security of our computer systems, software, networks and other technology assets against attempts by unauthorized parties to obtain access to confidential information, destroy data, disrupt or degrade service, sabotage systems or cause other damage. From time to time we, our vendors and other companies that store or process confidential borrower personal and transactional data are targeted by unauthorized parties using malicious code and viruses or otherwise attempting to breach the security of our or our vendors’ systems and data. We employ extensive layered security at all levels within our organization to help us detect malicious activity, both from within the organization and from external sources. It is company protocol to investigate the cause and extent of all instances of cyber-attack, potential or confirmed, and take any additional necessary actions including: conducting additional internal investigation; engaging third-party forensic experts; updating our defenses; and involving senior management. We have established, and continue to establish on an ongoing basis, defenses to identify and mitigate these cyber-attacks, and although these cyber-attacks have on occasion penetrated certain defenses, they have not, to date, resulted in any material disruption to our operations and have not had a material adverse effect on our results of operations. However, loss, unauthorized access to, or misuse of confidential or personal information could disrupt our operations, damage our reputation, and expose us to claims from customers, financial institutions, regulators, employees and other persons, any of which could have an adverse effect on our business, financial condition and results of operations.

In August of 2014, the Company was notified by the United States Secret Service of potential unauthorized access to certain computer applications residing on servers operated on behalf of Ditech Financial. We retained a team of forensic experts to investigate the incident to determine the scope of the data, if any, that was susceptible to unauthorized access. The forensic investigation did not identify conclusive evidence that data was in fact improperly accessed. We have been in contact with appropriate governmental agencies and have provided information to several state agencies in response to their requests. We have also notified identified individuals whose personal information we believe potentially might have been made accessible in the incident. In addition, we have taken and continue to take steps to further enhance the security of our data and defenses against future threats. Expenses incurred to date related to this incident have not been material. We may incur additional expenses in connection with this incident.

In addition to our vendors, other third parties with whom we do business or that facilitate our business activities (e.g., GSEs, transaction counterparties and financial intermediaries) could also be sources of cybersecurity risk to us, including with respect to breakdowns or failures of their systems, misconduct by the employees of such parties, or cyber-attacks which could affect their ability to deliver a product or service to us or result in lost or compromised information of us or our consumers. We work with our vendors and other third parties with whom we do business, to enhance our defenses and improve resiliency to cybersecurity threats. Systems failures could result in reputational damage to our business and cause us to incur significant costs and third-party liability, and this could adversely affect our business, financial condition and results of operations.

Off-Balance Sheet Arrangements

We have certain off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, revenues and expenses, results of operations, liquidity, capital expenditures or capital resources.

We have exposure to representations and warranty obligations as a result of our loans sales activities. If it is determined that loans sold are in breach of these representations or warranties and we are unable to cure such breach, we generally have an obligation to either repurchase the loan for the unpaid principal balance, accrued interest, and related advances, and in any event, me must indemnify the purchaser of the loans for certain losses and expenses incurred by such purchaser in connection with such breach. Our credit loss may be reduced by any recourse we have to correspondent lenders that, in turn, have sold such residential loans to us and breached similar or other representations and warranties. We record an estimate of the liability associated with our representations and warranties exposure on our consolidated balance sheet. Refer to Notes 5 and 29 in the Notes to Consolidated Financial Statements included in Item 8 for the financial effect of these arrangements and to the Liquidity and Capital Resources section for additional information.

We have a variable interest in WCO which provided financing to us during 2014 and 2015 through the sales of excess servicing spreads and servicing rights. The repayment of the excess servicing spread liabilities and servicing rights financing is based on future servicing fees received from the residential loans underlying the servicing rights. In addition, we perform sub-servicing for WCO. Refer to Notes 2 and 12 in the Notes to Consolidated Financial Statements included in Item 8 for additional information on servicing activities. We also have other variable interests in other entities that we do not consolidate as we have determined we are not the primary beneficiary. Refer to Note 4 in the Notes to Consolidated Financial Statements included in Item 8 for additional information.

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Critical Accounting Estimates

Included in Note 2 in the Notes to Consolidated Financial Statements located in Item 8 is a summary of our significant accounting policies. These policies are integral to the presentation of our results of operations, financial condition and cash flows. While all of these policies require a certain level of management judgment and estimates, this section highlights and discusses the critical accounting policies that require management to make highly difficult, complex or subjective judgments and estimates at times regarding matters that are inherently uncertain and susceptible to change. If actual results differ from our judgments and assumptions, then it may have an adverse impact on our results of operations, financial condition and cash flows.

Fair Value Measurements

We have an established and documented process for determining fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A three-tier fair value hierarchy is used to prioritize the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities, or Level 1 inputs, and the lowest priority to unobservable inputs, or Level 3 inputs. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Refer to Note 6 in the Notes to Consolidated Financial Statements included in Item 8 for a description of valuation methodologies used to measure assets and liabilities at fair value and details on the valuation models, key inputs to those models and significant assumptions utilized.

The following table summarizes the assets and liabilities measured at fair value on a recurring basis using Level 3 inputs (dollars in thousands):



	December 31,
	2015			2014
Assets
Reverse loans	$	10,763,816		$	10,064,365
Mortgage loans related to Non-Residual Trusts	526,016			586,433
Charged-off loans	49,307			57,217
Receivables related to Non-Residual Trusts	16,542			25,201
Servicing rights carried at fair value	1,682,016			1,599,541
Freestanding derivative instruments (IRLCs)	51,519			60,400
Assets at fair value using Level 3 inputs	$	13,089,216		$	12,393,157
As a percentage of total assets measured at fair value on a recurring basis	90.71		%	91.63		%

Liabilities
Freestanding derivative instruments (IRLCs)	$	1,070		$	263
Servicing rights related liabilities	117,000			66,311
Mortgage-backed debt related to Non-Residual Trusts	582,340			653,167
HMBS related obligations	10,647,382			9,951,895
Liabilities at fair value using Level 3 inputs	$	11,347,792		$	10,671,636
As a percentage of total liabilities measured at fair value on a recurring basis	99.95		%	99.72		%

When available, we generally use quoted market prices to determine fair value. If quoted market prices are not available, fair value is based upon internally-developed valuation models, such as a discounted cash flow model, that where possible, use current market-based or independently sourced market parameters, such as market rates commensurate with an instrument’s credit quality and duration. We consider market liquidity when estimating fair value based on the type of asset or liability measured and the valuation method used. For example, for mortgage loans where the significant inputs have become unobservable due to illiquidity in the markets for non-agency and non-conforming mortgage loans, we use a discounted cash flow technique to estimate fair value. This technique incorporates forecasting of expected cash flows discounted at an appropriate market discount rate that is intended to reflect the lack of liquidity in the market. Level 3 unobservable assumptions reflect our own estimates for assumptions that market participants would use in pricing the asset or liability.

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Unobservable inputs used in our internal valuation models require considerable judgment and are inherently difficult to estimate. Changes to these inputs can have a significant effect on fair value measurements. Accordingly, our estimates of fair value are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. Separate from the possible future impact to our results of operations from changes to inputs, the value of market-sensitive assets and liabilities may change subsequent to the balance sheet date, due to the nature and magnitude of future credit and market conditions. Such credit and market conditions may change quickly and in unforeseen ways and the resulting volatility could have a significant, negative effect on future operating results. These fluctuations would not be indicative of deficiencies in our models or inputs.

All of the techniques used and information obtained in the valuation process provide a range of estimated values, which are evaluated in order to establish an estimated value that, based on management's judgment, represents a reasonable estimate of fair value. It is not uncommon for the range of value to vary widely, and in such cases, we select an estimated value that we believe is the best indication of value based on the yield a market participant in the current environment would expect.

Our Valuation Committee determines and approves valuation policies and unobservable inputs used to estimate the fair value of items measured at fair value on a recurring basis. The Valuation Committee meets on a quarterly basis to review the assets and liabilities that require fair value measurement, including how each asset and liability has actually performed in comparison to the unobservable inputs and the projected performance provided by our Credit Risk Group. The Valuation Committee also reviews related available market data.

The changes to the fair value of our Level 3 assets and liabilities are discussed in the Results of Operations and Business Segment Results sections.

Reverse Loans and HMBS Related Obligations

Changes in market pricing for HECMs and HMBS and LIBOR can have a material impact on fair value and our results of operations. We utilize and give priority to observable market inputs, such as interest rates and market spreads, in our valuation of reverse loans and HMBS related obligations. However, we also utilize unobservable inputs, such as repayment speeds, mortality assumptions and expected duration, and also consider the value of underlying collateral. These unobservable inputs require the use of our judgment and can also have a significant impact on the determination of fair value. The growth in reverse loans and HMBS related obligations at December 31 2015 as compared to December 31, 2014 is due largely to new originations and higher loan balances for previously existing borrowers resulting primarily from tails, partially offset by the liquidation of reverse loans.

Non-Residual Trusts

We utilize and give priority to observable market inputs, such as interest rates and market spreads, in our valuation of the assets and liabilities of the Non-Residual Trusts. However, we also utilize internal inputs, such as prepayment speeds, default rates, loss severity and discount rates, and also consider the value of underlying collateral. These internal inputs require the use of our judgment and can have a significant impact on the determination of fair value. The nets assets of the Non-Residual Trusts have remained relatively consistent from December 31, 2014 to December 31, 2015. Our mandatory call obligation associated with the Non-Residual Trusts will impact our liquidity in the future. Refer to the Liquidity and Capital Resources section for additional information.

Charged-off Loans

We primarily utilize internal inputs, such as collection rates and discount rates, in the valuation of charged-off loans and also consider borrower specific factors such as FICO scores and bankruptcy status as well as underlying collateral. In addition, we take into account current and expected future economic conditions. Charged-off loans decreased from December 31, 2014 to December 31, 2015 primarily due to collections during 2015.

Servicing Rights

We estimate the fair value of our servicing rights by calculating the present value of expected future cash flows utilizing assumptions that we believe a market participant would consider in valuing our servicing rights. The significant components of the estimated future cash flows for servicing rights include estimates and assumptions related to the prepayments of principal, defaults, ancillary fees, and discount rates that we believe approximate yields required by investors for these assets, and the expected cost of servicing. We reassess periodically and adjust the underlying inputs and assumptions in the model to reflect market conditions and assumptions that a market participant would consider in valuing servicing rights.

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We use a discounted cash flow model for our servicing rights. This process allows us to determine inputs that are significant to the valuation and serves as a basis to forecast prepayment and default rates. These rates, which are used in the development of expected future cash flows, are based on historical observations of prepayment behavior in similar periods, comparing current and expected future mortgage rates to the mortgage rates of our servicing portfolio, and incorporates loan characteristics (e.g., loan type and note rate) and the relative sensitivity of our servicing portfolio to refinancing and also considers estimated levels of home equity. The fair value estimates and assumptions are compared to industry surveys, recent market activity, actual portfolio experience, and when available, observable market data, and are adjusted as applicable based on this data.

Changes in these assumptions are generally expected to affect our results of operations as follows:


•	A declining interest rate environment generally drives increases in prepayment speeds. Increases in prepayments of principal reduce the value of our servicing rights as the underlying loans prepay faster, which causes accelerated servicing right amortization or declines in the fair value of servicing rights;


•	Increases in defaults generally reduce the value of our servicing rights as the cost of servicing increases during the delinquency period due primarily to increases in servicing advances and related interest expense, which is partially offset by increases in ancillary fees; and


•	Increases in discount rate reduce the value of our servicing rights due to the lower overall net present value of the cash flows.

In contrast, decreases in prepayment speeds, defaults and discount rates generally increase the value of servicing rights.

Refer to Note 12 in the Notes to Consolidated Financial Statements included in Item 8 for the effect on the fair value of servicing rights carried at fair value for adverse changes to certain significant assumptions. Refer to the Servicing section within Business Segment Results for a discussion of the changes in servicing rights carried at fair value.

Interest Rate Lock Commitments

Fair values of IRLCs are derived using valuation models incorporating market pricing for instruments with similar characteristics and by estimating the fair value of the servicing rights expected to be recorded at sale of the loan and are adjusted for anticipated loan funding probability. The loan funding probability ratio represents the aggregate likelihood that loans currently in a lock position will ultimately close, which is largely dependent on the loan processing stage that a loan is currently in, and changes in interest rates from the time of the rate lock through the time a loan is closed. The estimation process involved with the fair value of servicing rights is discussed above. Both the fair value of the servicing rights expected to be recorded at sale of the loan and the loan funding probability ratio are based on management judgment; these inputs can have a material effect on the estimated fair values.

We have derivative instruments that we hold to manage the price risk associated with IRLCs and loans held for sale. These derivatives and loans held for sale are classified as Level 2 within the fair value hierarchy. Refer to Note 6 in the Notes to Consolidated Financial Statements included in Item 8 for additional information.

Servicing Rights Related Liabilities

Our procedures for estimating the fair value servicing rights related liabilities are similar to those described above for servicing rights. The increase in servicing rights related liabilities at December 31, 2015 as compared to December 31, 2014 is primarily due to the sales of an excess servicing spread and servicing rights, partially offset by payments on the liabilities.

Allowance for Uncollectible Advances

We establish an allowance for uncollectible advances that provides for probable losses inherent in funded servicer and protective advances. The allowance is based on a collection risk analysis that considers the underlying loan, the type of advance, our customers’ servicing and advance reimbursement guidelines, reimbursement patterns and past loss experience. Although we examine a variety of available data to determine our allowance, our estimation process is subject to risks and uncertainties, including a reliance on historical loss and trend information that may not be representative of current conditions and indicative of future performance.

Our allowance for uncollectible advances increased $7.9 million at December 31, 2015 as compared to December 31, 2014. The allowance for uncollectible advances continued to grow during 2015 primarily due to increasing rejected claim filings, aging of rejected claims and increases in foreclosure legal costs. This increase was partially offset by the reduction to the allowance for the sale of our residual interests. We believe our allowance is sufficient to provide for probable losses based on internal reviews of the assumptions and methodology used; however, facts and circumstances may change which could cause the actual loss to exceed estimates.

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Goodwill

As a result of our various acquisitions, we have recorded goodwill, which represents the excess of the consideration paid for a business combination over the fair value of the identifiable net assets acquired. Goodwill is initially recorded at fair value and is subsequently evaluated at least annually for impairment. We perform this annual test at the reporting unit level as of October 1 of each year, or whenever events or circumstances indicate potential impairment. Impairment exists when a reporting unit’s carrying amount of goodwill exceeds its implied fair value. A reporting unit is a business segment or one level below. We have identified five reporting units, which constitute businesses: (i) Servicing; (ii) ARM; (iii) Insurance; (iv) Originations; and (v) Reverse Mortgage. Segment management regularly reviews discrete financial information for these reporting units.

We have the option of performing a qualitative assessment to determine whether any further quantitative testing for a potential impairment is necessary. Our qualitative assessment will use judgments including, but not limited to, changes in the general economic environment, industry and regulatory considerations, current economic performance compared to historical economic performance, entity-specific events, events affecting our reporting units, and sustained changes in our stock price, where applicable. If we elect to bypass the qualitative assessment or if we determine, based upon our assessment of those qualitative factors that it is more likely than not that the fair value of the reporting unit is less than its net carrying value, a quantitative assessment is required. The quantitative test is a two-step test. The first step identifies whether there is potential impairment by comparing the fair value of a reporting unit to the carrying amount, including goodwill. If the fair value of a reporting unit is less than its carrying amount, the second step of the impairment test is required to measure the amount of impairment loss, if any. As part of the second step, we allocate the reporting unit’s fair value to all of its assets and liabilities in a manner similar to a purchase price allocation, with any residual fair value allocated to goodwill (implied fair value of goodwill). If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of such goodwill, we recognize an impairment loss in an amount equal to that excess up to the carrying value of goodwill.

During the second quarter of 2015, the Reverse Mortgage reporting unit experienced operational challenges in its retail origination channel and experienced a reduction in opportunities for additional sub-servicing business. Additionally, more experience existed with respect to previously introduced product changes that deferred a significant amount of cash flow to future years. The initial impact of this deferral of cash flows to future years was greater than we had originally anticipated. Also during the second quarter of 2015, new financial assessment requirements for the HECM program went into effect and new mortgagee letters were issued that could impact the likelihood of curtailment events in future periods. At such time, the impact of these more recent changes remained uncertain. At the same time, the Reverse Mortgage reporting unit continued to experience increasing liquidity requirements for the repurchase of certain HECMs and real estate owned from Ginnie Mae securitization pools, and based on recent developments, an increase in obligations surrounding curtailment-related items existing at the time of the RMS acquisition. Collectively, the impact of the greater than anticipated principal deferral, the operational challenges and the liquidity requirements resulted in reduced and delayed cash flows in the reverse mortgage business.

During the second quarter of 2015, we revised our multi-year forecast for the reverse mortgage business. The change in assumptions used in the revised forecast and the fair value estimates utilized in the impairment testing of the Reverse Mortgage reporting unit goodwill incorporated lower projected revenue as a result of the factors noted above. The revised forecast also reflected changes related to current market trends and other expectations about the anticipated operating results of the reverse mortgage business.

Based on these factors, we determined that there were interim impairment indicators that led to the need for a quantitative impairment analysis for goodwill purposes during the second quarter.

Based on the step one analysis, we concluded that the fair value of the Reverse Mortgage reporting unit (determined based on the income approach) was below its carrying value and were therefore required to perform a step two analysis to determine the implied fair value of goodwill. We concluded, based on the step two analysis, that the carrying amount of the reporting unit's goodwill exceeded its implied fair value and as a result, recorded a $56.5 million goodwill impairment charge in the second quarter of 2015.

Step 1 Annual Testing

Similar to 2014, our share price continued to experience volatility during 2015. As a result, we reassessed our market capitalization and the implications that the decline in market capitalization had on the carrying value of our goodwill. Management concluded that there were circumstances evident which indicated the fair value of our reporting units could be below their carrying amounts. As a result of the Step 1 testing, the Originations and ARM reporting units had fair values which exceeded their carrying values of 52% and 5% , respectively. However, the Servicing reporting unit had a carrying value which exceeded its fair value and therefore, we were required to complete the second step of the impairment evaluation for this reporting unit. Based on the step two analysis, the carrying amount of the Servicing reporting unit’s goodwill exceeded its implied fair value and as a result, we recorded a $151.0 million goodwill impairment charge in the fourth quarter of 2015. This impairment was primarily the result of higher discount rates applied to forecasted cash flows driven by the decline in our stock price, which has been impacted by continued challenges in our industry, market developments, as well as the impact these factors have had on certain Company specific matters. At December 31, 2015, the Servicing, Originations and ARM reporting units had goodwill of $281.2 million, $47.7 million and $34.5 million, respectively.

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We are likely to continue to be impacted in the near term by overall market performance within the sector, a continued level of regulatory scrutiny and other Company specific matters. As a result, we have and will continue to regularly monitor, among other things, our market capitalization, overall economic and sector conditions and other events or circumstances, including the ability to develop new business opportunities within the ARM reporting unit that may result in an impairment of goodwill in the future.

Contingencies

We estimate contingent liabilities based on management's evaluation of the probability of outcomes and the ability to estimate the range of exposure. A liability is contingent if the extent of loss is not presently known but may become known in the future through the occurrence of some uncertain future event. Accounting standards require that a liability be recorded if it is determined that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. In deriving an estimate, we are required to make assumptions about matters that are, by their nature, highly uncertain. The assessment of contingent liabilities, including legal contingencies, curtailment obligations and repurchase obligations, involves the use of critical estimates, assumptions and judgments. Through our assessment we consider many factors, including the progress of the matter, prior experience and experience of others in similar matters, available defenses, and the advice of legal counsel and other experts. Our estimates are based on the belief that future events will validate the current assumptions regarding the ultimate outcome of these exposures. Because matters may be resolved over long periods of time, accruals are adjusted as more information becomes available or when an event occurs requiring a change. However, there can be no assurance that future events will not differ from our assessments.

New Accounting Pronouncements

Refer to Note 1 in the Notes to Consolidated Financial Statements for a summary of recently adopted and recently issued accounting standards and their related effects or anticipated effects on our consolidated results of operations and financial condition.

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Glossary of Terms

This Glossary of Terms includes acronyms and defined terms that are used throughout this Annual Report on Form 10-K.


2011 First Lien Term Loan	$500 million first lien senior secured term loan facility entered into on July 1, 2011


2011 Plan	2011 Omnibus Incentive Plan established by the Company on May 10, 2011


2011 Second Lien Term Loan	$265 million second lien senior secured term loan facility entered into on July 1, 2011


2012 Common Stock Offering	Registered underwritten public offering of 6,900,000 shares of the Company's common stock completed on October 23, 2012


2012 Revolver	$125 million senior secured revolving credit facility entered into on November 28, 2012


2012 Term Loan	$700 million senior term loan facility entered into on November 28, 2012


2013 Credit Agreement	Credit agreement entered into on December 19, 2013 among the Company, Credit Suisse AG, as administrative agent and collateral agent, the lenders from time to time party thereto and other parties thereto


2013 Revolver	$125 million senior secured revolving credit facility entered into on December 19, 2013


2013 Secured Credit Facilities	2013 Term Loan and 2013 Revolver, collectively


2013 Term Loan	$1.5 billion senior secured first lien term loan entered into on December 19, 2013


Adjusted EBITDA	Adjusted earnings before interest, taxes, depreciation and amortization, a non-GAAP financial measure, refer to Non-GAAP Financial Measures section under Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for description of metric


Adjusted Earnings (Loss)	Adjusted earnings or loss before taxes, a non-GAAP financial measure, refer to Non-GAAP Financial Measures section under Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for description of metric


Advisers Act	Investment Advisers Act of 1940


Ally Bank	A subsidiary of Ally Financial Inc.


Ally Bank net assets	The correspondent lending and wholesale broker businesses acquired from Ally Bank on March 1, 2013


ARM	Asset Receivables Management, a reporting unit of the Company


Baker Street	Baker Street Capital Management, LLC and certain of its affiliates, collectively


Bankruptcy Code	The United States Bankruptcy Code, 11 U.S.C. Section 101, et seq. as amended


Birch Run	Birch Run Capital Advisors, LP


BOA	Bank of America, N.A.


BOA asset purchase	The purchase of Fannie Mae MSRs from BOA on January 31, 2013


Borrowers	Borrowers under residential mortgage loans and installment obligors under residential retail installment agreements


Bps	Basis points


CCR	Corporate credit rating


CFE	Collateralized financing entity


CFPB	Consumer Financial Protection Bureau


Charged-off loans	Defaulted consumer and residential loans acquired by the Company at substantial discounts to face value acquired during 2014, which are also referred to as post charge-off deficiency balances


CID	Civil investigative demand


Coal Acquisition	Coal Acquisition LLC


Computershare	Computershare Trust Company, N.A., as Rights Agent to the Rights Agreement


Conditional Commitment	The time the lender becomes committed to the loan subject to the borrower meeting certain requirements


Consolidated Financial Statements	The consolidated financial statements of Walter Investment Management Corp. and its subsidiaries and the notes thereto included in Item 8 of this Form 10-K

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Convertible Notes	$290 million aggregate principal amount of 4.50% convertible senior subordinated notes due 2019 sold in a registered underwritten public offering on October 23, 2012


COSO	Committee of Sponsoring Organizations of the Treadway Commission


Credit Suisse	Credit Suisse First Boston Mortgage Capital LLC


Distribution taxes	Taxes imposed on Walter Energy or a Walter Energy shareholder as a result of the potential determination that the Company's spin-off from Walter Energy was not tax-free pursuant to Section 355 of the Code


Ditech Financial	Ditech Financial LLC, formerly Green Tree Servicing LLC, an indirect wholly-owned subsidiary of the Company


Ditech Mortgage Corp	Formerly an indirect wholly-owned subsidiary of the Company; Ditech Mortgage Corp and DT Holdings LLC were merged with and into Green Tree Servicing LLC, with Green Tree Servicing LLC continuing as the surviving entity, which was renamed Ditech Financial LLC


Dodd-Frank Act	Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010


DOJ	United States Department of Justice

Early Advance Reimbursement


Agreement	$200 million financing facility with Fannie Mae, formerly referred to as the Servicing Advance Reimbursement Agreement


ECOA	Equal Credit Opportunity Act


EverBank	EverBank Financial Corp


EverBank net assets	Assets purchased from EverBank under a series of definitive agreements entered into on October 30, 2013, including (i) certain private and GSE-backed MSRs and related servicer advances, (ii) sub-servicing rights for mortgage loans and (iii) a default servicing platform


Exchange Act	Securities Exchange Act of 1934, as amended


Exchange Notes	New issue of registered notes with identical terms of the Company's $575 million aggregate principal amount of 7.875% Senior Notes due 2021, except that they will not be subject to certain restrictions on transfer


Fannie Mae	Federal National Mortgage Association


FASB	Financial Accounting Standards Board


FCC	Federal Communications Commission


FDCPA	Fair Debt Collection Practices Act


Federal Reserve Board	Board of Governors of the Federal Reserve System


FHA	Federal Housing Administration


FHFA	Federal Housing Finance Agency


FICO	Fair Isaac Corporation (borrower credit score)


Fitch	Fitch Ratings Inc, a nationally recognized statistical rating organization designated by the SEC


Forward sales commitments	Forward sales of agency to-be-announced securities, a freestanding derivative financial instrument


Freddie Mac	Federal Home Loan Mortgage Corporation


FTC	Federal Trade Commission


GAAP	United States Generally Accepted Accounting Principles


Ginnie Mae	Government National Mortgage Association


Green Tree	GTCS Holdings LLC, acquired by the Company on July 1, 2011


Green Tree Servicing	Green Tree Servicing LLC; former name of Ditech Financial. Ditech Mortgage Corp and DT Holdings LLC were merged with and into Green Tree Servicing LLC, with Green Tree Servicing LLC continuing as the surviving entity, which was renamed Ditech Financial LLC


GSE	Government-sponsored entity


GTIM	Green Tree Investment Management, LLC, an indirect wholly-owned subsidiary of the Company


HAMP	Home Affordable Modification Program


Hanover	Hanover Capital Mortgage Holdings, Inc.

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HARP	Home Affordable Refinance Program


HECM	Home Equity Conversion Mortgage


HECM IDL	Home Equity Conversion Mortgage Initial Disbursement Limit


HELOC	Home equity line of credit


HLTV	High loan to value


HMBS	Home Equity Conversion Mortgage-Backed Securities


HOA	Homeowners' association


HOEPA	Home Ownership and Equity Protection Act of 1994


HUD	U.S. Department of Housing and Urban Development


IRLC	Interest rate lock commitment, a freestanding derivative financial instrument


IRS	Internal Revenue Service


Lender-placed	Also referred to as "force-placed"


LIBOR	London Interbank Offered Rate


LTV	loan-to-value


LOC	Letter of Credit


Marix	Marix Servicing, LLC


MBA	Mortgage Bankers Association


MBS	Mortgage-backed securities


MBS purchase commitments	Commitments to purchase mortgage-backed securities, a freestanding derivative financial instrument


MGCL	Maryland General Corporation Law


Monitor	Monitor under the National Mortgage Settlement


Moody's	Moody’s Investors Service Limited, a nationally recognized statistical rating organization designated by the SEC


Mortgage loans	Traditional mortgage loans and residential retail installment agreements, which include manufactured housing loans as well as consumer loans


MSP	A mortgage and consumer loan servicing platform licensed from Black Knight Financial Services, LLC


MSR	Mortgage servicing rights


MTGE	American Capital Mortgage Investment Corp., a Maryland corporation

National Mortgage Settlement


(NMS)	A settlement agreement, dated February 9, 2012 and approved by the applicable court on April 4, 2012, among the federal government, 49 states and certain mortgage servicers addressing issues relating to mortgage servicing, foreclosure and bankruptcy practices


Net realizable value	Fair value less cost to sell


n/m	Not meaningful


Non-Residual Trusts	Securitization trusts that the Company consolidates and in which the Company does not hold residual interests


NYSE	New York Stock Exchange


OTS	Office of Thrift Supervision


Parent Company	Walter Investment Management Corp.


RCS	Residential Credit Solutions, Inc., a Delaware corporation and a wholly-owned subsidiary of MTGE


Receivables Loan Agreement	$75 million financing facility entered into on May 2, 2012


REIT	Real estate investment trust


ResCap	Residential Capital LLC


ResCap net assets	The rights acquired and liabilities assumed by the Company on January 31, 2013 relating to (a) all of ResCap’s Fannie Mae MSRs and related servicer advances, and (b) ResCap’s mortgage originations and capital markets platforms

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Residential loans	Residential mortgage loans, including traditional mortgage loans, reverse mortgage loans and residential retail installment agreements, which include manufactured housing loans as well as consumer loans


Residual Trusts	Securitization trusts that the Company consolidates and in which it holds a residual interest


RESPA	Real Estate Settlement Procedures Act


Reverse loans	Reverse mortgage loans, including HECMs


Rights Agent	Computershare Trust Company, N.A.


Rights Agreement	Rights Agreement, dates as of June 29, 2015, between Walter Investment Management Corp. and Computershare Trust Company, N.A., as Rights Agent


Risk-managed loan class	Risk-managed mortgage loan class


RMS	Reverse Mortgage Solutions, Inc., an indirect wholly-owned subsidiary of the Company


RSA	Restructuring support agreement, dated as of July 15, 2015, by and between Walter Energy and its affiliated debtors and debtors-in-possession and the holders of its first lien claims party thereto, relating to Walter Energy’s Chapter 11 bankruptcy filed on July 15, 2015 in the United States Bankruptcy Court for the Northern District of Alabama


RSU	Restricted stock unit


S1L	Security One Lending, an indirect wholly-owned subsidiary of the Company, now known as Ditech


SEC	U.S. Securities and Exchange Commission


Securities Act	Securities Act of 1933, as amended


Senior Notes	$575 million aggregate principal amount of 7.875% senior notes due 2021 issued on December 17, 2013


Senior Notes Indenture	Indenture for the 7.875% Senior Notes due 2021 dated December 17, 2013 among the Company, the guarantors and Wells Fargo Bank, National Association, as trustee

Servicer and Protective Advance


Financing Facilities	The Company's interests in financing entities that acquire servicer and protective advances from certain wholly-owned subsidiaries


SPOC	Single Point of Contact


S&P	Standard and Poor's Ratings Services, a nationally recognized statistical rating organization designated by the SEC


TBAs	To-be-announced securities


TCPA	Telephone Consumer Protection Act


TILA	Truth in Lending Act


Trust Notes	The mortgage-backed and asset-backed notes issued by the Residual Trusts


TSR	Total shareholder return


UPB	Unpaid principal balance


U.S.	United States of America


U.S. Treasury	U.S. Department of the Treasury


USDA	United States Department of Agriculture


VA	United States Department of Veterans Affairs


VIE	Variable interest entity


Walter Energy	Walter Energy, Inc.

Walter Energy Asset Purchase


Agreement	Stalking horse asset purchase agreement entered into by Walter Energy, together with certain of its subsidiaries, and Coal Acquisition on November 5, 2015


Walter Investment	Walter Investment Management Corp. and its consolidated subsidiaries


Warehouse borrowings	Borrowings under master repurchase agreements


WCO	Walter Capital Opportunity Corp. and its consolidated subsidiaries


WCO LP	Walter Capital Opportunity, LP, a subsidiary of Walter Capital Opportunity Corp.

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WCO Target Assets	Assets in which WCO can invest, including excess servicing spread related to MSRs, MSRs, residential whole loans and reverse residential whole loans, reverse MSRs (to the extent available and consistent with the real estate investment trust rules), agency reverse mortgage backed securities and other real estate related securities and related derivatives


York	York Capital Management, L.P., and certain affiliates thereof

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We seek to manage the risks inherent in our business — including, but not limited to, credit risk, liquidity risk, real estate market risk, and interest rate risk — in a prudent manner designed to enhance our earnings and preserve our capital. In general, we seek to assume risks that can be quantified from historical experience, to actively manage such risks, and to maintain capital levels consistent with these risks. For information regarding our credit risk, real estate market risk and liquidity risk, refer to the Credit Risk Management, Real Estate Market Risk and Liquidity and Capital Resources sections under Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Interest Rate Risk

Interest rate risk is the risk of loss of future earnings or fair value due to changes in interest rates. Our principal market exposure associated with interest rate risk relates to changes in long-term Treasury and mortgage interest rates and LIBOR.

We provide sensitivity analysis surrounding changes in interest rates in the Servicing, Originations and Reverse Mortgage Segments and Other Financial Instruments sections below. However, there are certain limitations inherent in any sensitivity analysis, including the necessity to conduct the analysis based on a single point in time and the inability to include the complex market reactions that normally would arise from the market shifts modeled .

Servicing, Originations and Reverse Mortgage Segments

Sensitivity Analysis

The following table summarizes the estimated change in the fair value of certain assets and liabilities given hypothetical instantaneous parallel shifts in the interest rate yield curve (in thousands):



	December 31, 2015
	Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps
Servicing segment
Servicing rights carried at fair value	$	(227,315	)	$	(99,025	)	$	78,064		$	145,147
Servicing rights related liabilities	8,408			4,005			(3,662		)	(7,011		)
Net change in fair value - Servicing segment	$	(218,907	)	$	(95,020	)	$	74,402		$	138,136

Originations segment
Residential loans held for sale	$	29,695		$	15,759		$	(17,443	)	$	(36,162	)
Freestanding derivatives ⁽¹⁾	(35,817		)	(18,457		)	18,404			37,024
Net change in fair value - Originations segment	$	(6,122	)	$	(2,698	)	$	961		$	862

Reverse Mortgage segment
Reverse loans	$	128,204		$	64,074		$	(63,184	)	$	(125,508	)
HMBS related obligations	(108,500		)	(54,385		)	53,808			107,053
Net change in fair value - Reverse Mortgage segment	$	19,704		$	9,689		$	(9,376	)	$	(18,455	)

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	December 31, 2014
	Down 50 bps			Down 25 bps			Up 25 bps			Up 50 bps
Servicing segment
Servicing rights carried at fair value	$	(118,154	)	$	(58,417	)	$	55,476		$	106,956
Servicing rights related liabilities	5,117			2,455			(2,208		)	(4,127		)
Net change in fair value - Servicing segment	$	(113,037	)	$	(55,962	)	$	53,268		$	102,829

Originations segment
Residential loans held for sale	$	31,173		$	16,593		$	(18,011	)	$	(37,416	)
Freestanding derivatives ⁽¹⁾	(32,384		)	(16,495		)	16,952			34,964
Net change in fair value - Originations segment	$	(1,211	)	$	98		$	(1,059	)	$	(2,452	)

Reverse Mortgage segment
Reverse loans	$	147,705		$	78,313		$	(79,666	)	$	(158,159	)
HMBS related obligations	(123,275		)	(66,238		)	67,946			135,061
Net change in fair value - Reverse Mortgage segment	$	24,430		$	12,075		$	(11,720	)	$	(23,098	)

__________


(1)	Consists of IRLCs, forward sales commitments and MBS purchase commitments.

We used December 31, 2015 and 2014 market rates on our instruments to perform the sensitivity analysis. These sensitivities measure the potential impact on fair value, are hypothetical, and presented for illustrative purposes only. There are certain limitations inherent in the sensitivity analysis presented, including the necessity to conduct the analysis based on a single point in time and the inability to include complex market reactions that normally would arise from the market shifts modeled. Changes in fair value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in 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 can have an effect on 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.

Servicing Rights

Servicing rights are subject to prepayment risk as the mortgage loans underlying the servicing rights permit the borrowers to prepay the loans. Consequently, the value of these servicing rights generally tend to diminish in periods of declining interest rates (as prepayments increase) and tend to increase in periods of rising interest rates (as prepayments decrease). This analysis ignores the impact of changes on certain material variables, such as non-parallel shifts in interest rates, or changing consumer behavior to incremental changes in interest rates.

Although the level of interest rates is a key driver of prepayment activity, there are other factors that influence prepayments, including home prices, underwriting standards, availability of government-sponsored refinance programs and other product characteristics. Since our Originations segment’s results of operations are positively impacted when interest rates decline, our Originations segment’s results of operations may partially offset the change in fair value of servicing rights over time. The interaction between the results of operations of these activities is a core component of our overall interest rate risk assessment. We take into account the estimated benefit of originations on our Originations segment’s results of operations to determine the impact on net economic value from a decline in interest rates, and we continuously assess our ability to replenish lost value of servicing rights and cash flow due to increased prepayments. The Company does not currently use derivative instruments to hedge the interest rate risk inherent in the value of servicing rights. The Company may choose to use such instruments in the future. The amount and composition of derivatives used to hedge the value of servicing rights, if any, will depend on the exposure to loss of value on the servicing rights, the expected cost of the derivatives, expected liquidity needs, and the expected increase to earnings generated by the origination of new loans resulting from the decline in interest rates. The servicing rights sensitivity to interest rate changes increased at December 31, 2015 from December 31, 2014 due primarily to the growth in servicing rights carried at fair value as a result of acquired and originated servicing rights and the change in mix in the related servicing portfolio with the growth of Freddie Mac and Ginnie Mae loans.

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Servicing Rights Related Liabilities

Servicing rights related liabilities consists of excess servicing spread liabilities and a servicing rights financing. Servicing rights related liabilities are generally subject to fair value losses when interest rates rise. Increasing interest rates typically slow down refinancing activity. Decreased refinancing activity increases the life of the loans underlying the servicing rights related liabilities, thereby increasing the fair value of the servicing rights related liabilities. As the fair value of the servicing rights related liabilities are related to the future economic performance of certain servicing rights, any adverse changes in those servicing rights would inherently benefit the fair value of the servicing rights related liabilities by decreasing our obligation, while any beneficial changes in the assumptions used to value servicing rights would negatively impact the fair value of the servicing rights related liabilities by increasing our obligation.

Loans Held for Sale and Related Freestanding Derivatives

We are subject to interest rate and price risk on mortgage loans held for sale during the short time from the loan funding date until the date the loan is sold into the secondary market. Interest rate lock commitments represent an agreement to extend credit to a mortgage loan applicant or to purchase loans from a third-party originator, collectively referred to as IRLC, whereby the interest rate of the loan is set prior to funding or purchase. IRLCs, which are considered freestanding derivatives, are subject to interest rate risk and related price risk during the period from the date of the commitment through the loan funding date or expiration date. Loan commitments generally range from 35 to 50 days from lock to funding of the mortgage loan; our holding period from funding to sale is typically less than 20 days.

An integral component of our interest rate risk management strategy is our use of freestanding derivative instruments to minimize significant fluctuations in earnings caused by changes in interest rates that affect the value of our IRLCs and mortgage loans held for sale. The derivatives utilized to hedge the interest rate risk are forward sales commitments, which are forward sales of agency TBAs. These TBAs are primarily used to fix the forward sales price that will be realized upon the sale of the mortgage loans into the secondary market. We also enter into commitments to purchase MBS as part of our overall hedging strategy.

Reverse Loans and HMBS Related Obligations

We are subject to interest rate risk on our reverse loans and HMBS related obligations as a result of different expected cash flows and longer expected durations for loans as compared to HMBS related obligations. Our reverse loans have longer durations primarily as a result of our obligations as issuer of HMBS which includes the requirement to purchase loans out of the Ginnie Mae securitization pools once the outstanding principal balance of the related HECM is equal to or greater than 98% of the maximum claim amount.

Other Financial Instruments

The following summarizes the estimated changes in annual interest expense at December 31, 2015 and 2014 given a hypothetical and instant parallel shift in the yield curve of 25 and 50 basis points. Our total market risk is influenced by a wide variety of factors including market volatility and the liquidity of the markets.

Servicing Advance Liabilities

At December 31, 2015, our servicing advance agreements included both fixed rate and LIBOR-based borrowings, while borrowings at December 31, 2014 were primarily LIBOR-based. Based on an increase of 25 and 50 basis points in LIBOR at December 31, 2015 and the outstanding LIBOR-based liabilities recorded at such time, our annual interest expense for servicing advance liabilities would increase by $1.8 million and $3.7 million, respectively. Based on the same increases in LIBOR at December 31, 2014 and the outstanding liabilities recorded at such time, our annual interest expense for servicing advance liabilities would increase by $3.4 million and $6.8 million, respectively.

Warehouse Borrowings

Our master repurchase agreements are primarily LIBOR-based. Based on an increase of 25 and 50 basis points in LIBOR at December 31, 2015 and the outstanding borrowings recorded at such time, our annual interest expense for warehouse borrowings would increase by $3.4 million and $6.7 million, respectively. Based on the same increases in LIBOR at December 31, 2014 and the outstanding borrowings recorded at such time, our annual interest expense for warehouse borrowings would increase by $3.2 million and $6.5 million, respectively.

Corporate Debt

Our 2013 Term Loan is LIBOR-based with a 1.0% floor in place. Due to the 1.0% floor, an increase of 25 and 50 basis points in LIBOR on outstanding debt recorded at December 31, 2015 and 2014 would have no impact on interest expense as the applicable rate would not have exceeded the 1.0% floor.

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Mortgage Loans and Related Mortgage-backed Debt

We exclude mortgage loans and mortgage-backed debt of the Residual and Non-Residual Trusts from the analysis of rate-sensitive assets and liabilities. These assets and liabilities generally do not represent significant interest rate risk to us as it relates to potential losses in future earnings or fair value. Although we hold residual interests in the Residual Trusts, the mortgage loans and mortgage-backed debt in these trusts, which are carried at amortized cost, are mostly at fixed rates of interest. In contrast, approximately half of the assets of the Non-Residual Trusts are fixed rate, whereas the mortgage-backed debt is entirely variable rate. Nonetheless, the impact of changes in interest rates are mostly offset. However, we are obligated to exercise mandatory clean-up call obligations related to the Non-Residual Trusts, which we anticipate will settle beginning in 2017 and continuing through 2019 based upon our current cash flow projections. Upon exercise of the clean-up calls, we will be exposed to interest rate risk with regard to the purchased loans.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements and related notes, together with the Report of Independent Registered Certified Public Accounting Firm thereon, are included in Part IV, Item 15. Exhibits and Financial Statement Schedules and begin on page F-1 of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company's reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company's management, with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures as of December 31, 2015 . Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2015 , the design and operation of the Company's disclosure controls and procedures were effective at the reasonable assurance level.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

Management assessed the effectiveness of our internal control over financial reporting at December 31, 2015 . In making this assessment, management used the 2013 criteria set forth by COSO in the Internal Control-Integrated Framework. Based on our assessment and those criteria, management believes that we maintained effective internal control over financial reporting at December 31, 2015 .

The effectiveness of our internal control over financial reporting at December 31, 2015 , has been audited by Ernst & Young LLP, an independent registered certified public accounting firm, as stated in their attestation report included in this Annual Report on Form 10-K .

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Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended December 31, 2015 covered by this Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Report of Independent Registered Certified Public Accounting Firm

The Board of Directors and Stockholders of

Walter Investment Management Corp.

We have audited Walter Investment Management Corp. and subsidiaries' internal control over financial reporting as of December 31, 2015 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Walter Investment Management Corp. and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Walter Investment Management Corp. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015 , based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Walter Investment Management Corp. and subsidiaries as of December 31, 2015 and 2014 , and the related consolidated statements of comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2015 , and our report dated February 29, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Tampa, Florida

February 29, 2016

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ITEM 9B. OTHER INFORMATION

Amendment to 2013 Credit Agreement

On February 23, 2016, the Company entered into an amendment to its 2013 Credit Agreement in order to (w) remove the aggregate principal amount limitation with respect to the Company’s ability to repurchase term loans through Dutch auctions, (x) remove the limitation with respect to the frequency of the Company’s ability to initiate Dutch auctions, (y) permit the Company to receive assignments of term loans through open market purchases and (z) make certain other amendments.

Credit Suisse AG, certain of its affiliates and other lenders under the 2013 Credit Agreement and their affiliates have, from time to time, provided investment banking and advisory services to the Company and/or its affiliates for which they have received customary fees and commissions and such affiliates may provide these services from time to time in the future.

The foregoing description of the amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the amendment, which is filed as Exhibit 10.16.2 to this report and is incorporated herein by reference.

Reverse Mortgage Warehouse Financing Facility

On February 23, 2016, RMS, certain of its subsidiaries and Credit Suisse entered into a new mortgage warehouse financing facility pursuant to a master repurchase agreement. This agreement provides funding for the purchase and origination of HECM loans and the repurchase of certain HECM loans from Ginnie Mae securitization pools and foreclosed real estate. Also on February 23, 2016, the Parent Company executed a guaranty in favor of Credit Suisse guaranteeing RMS' obligations under the facility.

The aggregate amount of revolving financing capacity under this facility is $100.0 million , which includes committed capacity of $10.0 million through March 30, 2016 and $50.0 million thereafter. The facility terminates February 21, 2017. The interest rate on the facility is based on the bank rate plus 2.75% for borrowings related to the purchase and origination of reverse loans and 3.25% for borrowings related to the repurchase of HECMs and real estate owned. The facility contains various customary events of default, representations, warranties, covenants, conditions precedent and indemnification provisions.

Certain affiliates of the lender under this facility have, from time to time, provided investment banking and advisory services to the Company and/or its affiliates for which they have received customary fees and commissions and such affiliates may provide these services from time to time in the future.

The foregoing description of the facility does not purport to be complete and is qualified in its entirety by reference to the full text of the facility which is filed as Exhibits 10.23.1 and 10.23.2 to this report and is incorporated herein by reference.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 10 is incorporated herein by reference to the definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

Code of Conduct and Ethics

We have adopted a Code of Conduct and Ethics that applies to all employees, including executive officers, and to directors. The Code of Conduct and Ethics is available on the Corporate Governance page of our website at www.investor.walterinvestment.com . If we ever were to amend or waive any provision of our Code of Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or any person performing similar functions, we intend to satisfy our disclosure obligations with respect to any such amendment or waiver by posting such information on our website set forth above rather than by filing a Form 8-K.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 is incorporated herein by reference to the definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by Item 12 is incorporated herein by reference to the definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Item 13 is incorporated herein by reference to the definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 is incorporated herein by reference to the definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this report

(1) Financial Statements.

The Consolidated Financial Statements filed as part of this report are listed on the Table of Contents to Consolidated Financial Statements on page F-1.

(2) Financial Statement Schedules.

Financial statement schedules filed as part of this report are listed on the Table of Contents to Consolidated Financial Statements on page F-1.

(b) Exhibits.

Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits attached hereto, which is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	WALTER INVESTMENT MANAGEMENT CORP.

Dated: February 29, 2016	By:	/s/ Denmar J. Dixon
		Denmar J. Dixon
		Vice Chairman, President and Chief Executive Officer (Principal Executive Officer)

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Pursuant to requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



Signature	Title	Date

/s/ Daniel Beltzman	Director	February 29, 2016
Daniel Beltzman

/s/ Steven R. Berrard	Director	February 29, 2016
Steven R. Berrard

/s/ Ellyn L. Brown	Director	February 29, 2016
Ellyn L. Brown

/s/ Denmar J. Dixon	Director	February 29, 2016
Denmar J. Dixon

/s/ William J. Meurer	Director	February 29, 2016
William J. Meurer

/s/ Alvaro G. de Molina	Director	February 29, 2016
Alvaro G. de Molina

/s/ Mark J. O'Brien	Director	February 29, 2016
Mark J. O'Brien

/s/ James L. Pappas	Director	February 29, 2016
James L. Pappas

/s/ Vadim Perelman	Director	February 29, 2016
Vadim Perelman

/s/ Shannon E. Smith	Director	February 29, 2016
Shannon E. Smith

/s/ Michael T. Tokarz	Director	February 29, 2016
Michael T. Tokarz

/s/ Gary L. Tillett	Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	February 29, 2016
Gary L. Tillett

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INDEX TO EXHIBITS



Exhibit No.			Description
2.1.1			Second Amended and Restated Agreement and Plan of Merger, dated as of February 6, 2009, among Walter Industries, Inc., JWH Holding Company, LLC, Walter Investment Management LLC, and Hanover Capital Mortgage Holdings, Inc. (Incorporated herein by reference to Annex A to the proxy statement/ prospectus forming a part of Amendment No. 4 to the Registrant's Registration Statement on Form S-4, Registration No. 333-155091, as filed with the Securities and Exchange Commission on February 17, 2009).

2.1.2			Amendment to the Second Amended and Restated Agreement and Plan of Merger, dated February 17, 2009, among Walter Industries, Inc., JWH Holding Company, LLC, Walter Investment Management LLC, and Hanover Capital Mortgage Holdings, Inc. (Incorporated herein by reference to Annex A to the proxy statement/ prospectus forming a part of Amendment No. 4 to the Registrant's Registration Statement on Form S-4, Registration No. 333-155091, as filed with the Securities and Exchange Commission on February 17, 2009).

2.2			Securities Purchase Agreement, dated as of August 25, 2010, by and among Marathon Asset Management, L.P., Michael O’Hanlon, Marix Servicing LLC, and Walter Investment Management Corp. (Incorporated herein by reference to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on August 25, 2010).

2.3			Membership Interest Purchase Agreement, dated as of March 25, 2011, by and among GTCS Holdings LLC, GTH LLC, and Walter Investment Management Corp., a Maryland corporation (Incorporated herein by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on March 30, 2011).

2.4.1			Stock Purchase Agreement, dated as of August 31, 2012, by and among Walter Investment Management Corp., Reverse Mortgage Solutions, Inc., JAM Special Opportunities Fund, L.P., as principal seller, and the stockholder sellers listed on the signature pages thereto (the “RMS Purchase Agreement”) (Incorporated herein by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on September 6, 2012).

2.4.2			Letter of Understanding dated November 1, 2012 relating to the RMS Purchase Agreement (Incorporated herein by reference to Exhibit 2.1.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 as filed with the Securities and Exchange Commission on November 8, 2012).

2.5.1			Joint Bidding Agreement, dated as of October 19, 2012, by and between Ocwen Loan Servicing, LLC and Walter Investment Management Corporation (Incorporated herein by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 as filed with the Securities and Exchange Commission on November 8, 2012).

2.5.2			Asset Purchase Agreement, dated as of November 2, 2012, entered into between Ocwen Loan Servicing, LLC, as purchaser, and Residential Capital, LLC, Residential Funding Company, LLC, GMAC Mortgage, Executive Trustee Services, LLC, ETS of Washington, Inc., EPRE LLC, GMACM Borrower LLC, and RFC Borrower LLC (the “ResCap Purchase Agreement”) (Incorporated herein by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 8, 2012).

2.5.3			Amendment No. 1, dated as of November 20, 2012, to the ResCap Purchase Agreement, by and among Ocwen Loan Servicing, LLC, and Residential Capital, LLC, Residential Funding Company, LLC, GMAC Mortgage, LLC, Executive Trustee Services, LLC, ETS of Washington, Inc., EPRE LLC, GMACM Borrower LLC, and RFC Borrower LLC (Incorporated herein by reference to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 27, 2012).

2.6			Stock Purchase Agreement, dated as of December 31, 2012,, by and among Walter Investment Management Corp., Security One Lending, JAM Special Opportunities Fund II, L.P., as principal seller, and the other stockholder sellers listed on the signature pages thereto (Incorporated herein by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission on March 18, 2013).

3.1			Walter Investment Management Corp. Articles of Amendment and Restatement effective May 3, 2013 (Incorporated herein by reference to Exhibit 3 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 as filed with the Securities and Exchange Commission on May 10, 2013).

3.2			Walter Investment Management Corp. Amended and Restated Bylaws, effective February 28, 2012 (Incorporated herein by reference to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on March 5, 2012).

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Exhibit No.			Description
3.3			Articles Supplementary for the Junior Participating Preferred Stock of the Company, effective June 29, 2015 (Incorporated herein by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on June 30, 2015).

4.1			Specimen Common Stock Certificate of Registrant (Incorporated herein by reference to Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 as filed with the Securities and Exchange Commission on May 15, 2009).

4.2			Subordinated Indenture, dated as of January 13, 2012, between Walter Investment Management Corp. and Wells Fargo Bank, National Association, as trustee (incorporated herein by reference to Exhibit 4.6 to the Registrant’s Registration Statement on Form S-3 filed with the Securities and Exchange Commission on January 13, 2012).

4.3			First Supplemental Indenture dated as of October 23, 2012 to the Indenture dated January 13, 2012 between Walter Investment Management Corp. and Wells Fargo Bank, National Association, as trustee, and Form of 4.50% Convertible Senior Subordinated Notes due 2019 (Incorporated herein by reference to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on October 23, 2012).

4.4			Indenture, dated as of December 17, 2013, among Walter Investment Management Corp., the guarantor parties thereto and Wells Fargo Bank, National Association, as trustee, and form of 7.875% Senior Notes due 2021). (Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 18, 2013).

4.5.1			Rights Agreement, dated as of June 29, 2015, between Walter Investment Management Corp. and Computershare Trust Company, N.A., as Rights Agent, which includes the Form of Articles Supplementary for the Junior Participating Preferred Stock as Exhibit A , the Form of Right Certificate as Exhibit B and the Form of Summary of Rights as Exhibit C (Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on June 30, 2015).

4.5.2			Amendment No. 1, dated as of November 16, 2015, to the Rights Agreement, dated as of June 29, 2015, between Walter Investment Management Corp. and Computershare Trust Company, N.A., as Rights Agent (Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 17, 2015).

4.5.3			Amendment No. 2, dated as of November 22, 2015, to the Rights Agreement, dated as of June 29, 2015, and previously amended by Amendment No. 1, dated November 16, 2015, each between Walter Investment Management Corp. and Computershare Trust Company, N.A., as Rights Agent (Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 23, 2015).

4.6			Second Amended and Restated Indenture, dated as of October 21, 2015, among Green Tree Agency Advance Funding Trust I, as Issuer, Wells Fargo Bank, N.A. as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary, Ditech Financial LLC, as Servicer and Administrator, and Barclays Bank PLC, as Administrative Agent, and consented to by Barclays Bank PLC (Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on October 26, 2015).

4.7			Amended and Restated Series 2014-VF2 Indenture Supplement to Second Amended and Restated Indenture, dated as of October 21, 2015, among Green Tree Agency Advance Funding Trust I, as Issuer, Wells Fargo Bank, N.A. as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary, Ditech Financial LLC, as Servicer and Administrator, and Barclays Bank PLC, as Administrative Agent (Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on October 26, 2015).

4.8			Series 2015-T1 Indenture Supplement to Second Amended and Restated Indenture, dated as of October 21, 2015, among Green Tree Agency Advance Funding Trust I, as Issuer, Wells Fargo Bank, N.A., as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary, Ditech Financial LLC, as Servicer and Administrator, and Barclays Bank PLC, as Administrative Agent (Incorporated herein by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on October 26, 2015).

4.9			Series 2015-T2 Indenture Supplement to Second Amended and Restated Indenture, dated as of October 21, 2015, among Green Tree Agency Advance Funding Trust I, as Issuer, Wells Fargo Bank, N.A., as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary, Ditech Financial LLC, as Servicer and Administrator, and Barclays Bank PLC, as Administrative Agent (Incorporated herein by reference to Exhibit 4.4 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on October 26, 2015).

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Exhibit No.			Description
10.1.1†			1999 Equity Incentive Plan (Incorporated herein by reference to Exhibit 10.7.1 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1999 as filed with the Securities and Exchange Commission on March 30, 2000).

10.1.2†			Amendment No. 1 to the Walter Investment Management Corp. 1999 Equity Incentive Plan (Incorporated by reference to Exhibit 4.4.2 to the Registrant's Registration Statement on Form S-8, Registration No. 333-160743, as filed with the Securities and Exchange Commission on July 22, 2009).

10.1.3†			Amendment No. 2 to the Walter Investment Management Corp. 1999 Equity Incentive Plan (Incorporated by reference to Exhibit 4.4.3 to the Registrant's Registration Statement on Form S-8, Registration No. 333-160743, as filed with the Securities and Exchange Commission on July 22, 2009).

10.2			Trademark License Agreement dated April 17, 2009 by and between Walter Industries, Inc. and Walter Investment Management LLC (Incorporated herein by reference to Exhibit 10.1.6 to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on April 23, 2009).

10.3			Tax Separation Agreement dated as of April 17, 2009 between Walter Industries, Inc. and Walter Investment Management LLC (Incorporated herein by reference to Exhibit 10.1.8 to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on April 23, 2009).

10.4			Joint Litigation Agreement between Walter Industries, Inc. and Walter Investment Management LLC, effective as of April 17, 2009(Incorporated herein by reference to Exhibit 10.1.9 to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on April 23, 2009).

10.5.1†			The 2009 Long-Term Equity Incentive Plan of Walter Investment Management Corp. (Incorporated herein by reference to Exhibit 10.65 to Walter Investment Management Corp.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed with the Securities and Exchange Commission on May 15, 2009).

10.5.2†			Form of Nonqualified Option Award Agreement for Executive Officers under the 2009 Long-Term Incentive Award Plan of Walter Investment Management Corp. (Incorporated herein by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on January 8, 2010).

10.6†			Form of Director and Officer Indemnity Agreements dated April 17, 2009 (Incorporated by reference to Exhibit 10.23 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 as filed with the Securities and Exchange Commission on August 14, 2009).

10.7†			Employment Letter Agreement between Walter Investment Management Corp. and Denmar Dixon dated January 22, 2010 (Incorporated herein by reference to Exhibit 99.1 to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on January 26, 2010).

10.8.1†			Amended and Restated Employment Letter Agreement between Walter Investment Management Corp. and Mark J. O’Brien dated March 15, 2010 (Incorporated herein by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 as filed with the Securities and Exchange Commission on May 5, 2010).

10.8.2†			Amendment to Mark O'Brien Employment Contract dated March 29, 2012 (Incorporated herein by reference to Exhibit 99.1 to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on April 3, 2012).

10.8.3†			Retirement Agreement, by and between Walter Investment Management Corp. and Mark J. O'Brien, entered into as of October 2, 2015 (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on October 5, 2015).

10.9.1†			Walter Investment Management Corp. Amended and Restated 2011 Omnibus Incentive Plan (Amended and Restated May 3, 2013) (Incorporated herein by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 8, 2013).

10.9.2†			Form of Nonqualified Option Award Agreement under 2011 Omnibus Incentive Plan of Walter Investment Management Corp. (Incorporated herein by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K as filed with the Securities and Exchange Commission on May 16, 2011).

10.9.3†			Form of Performance Share Award Agreement under the Walter Investment Management Corp. Amended and Restated 2011 Omnibus Incentive Plan (Amended and Restated May 3, 2013)(Incorporated herein by reference to Exhibit 10.10.3 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on February 26, 2015).

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Exhibit No.			Description
10.9.4†			Form of Restricted Stock Unit Award Agreement under the Walter Investment Management Corp. Amended and Restated 2011 Omnibus Incentive Plan (Amended and Restated May 3, 2013)(Incorporated herein by reference to Exhibit 10.10.4 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on February 26, 2015).

10.10†			Form of Green Tree Executive Severance Plan for Senior Executives entered into by the Company's Green Tree subsidiary (Incorporated herein by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 as filed with the Securities and Exchange Commission on November 8, 2011).

10.11*†			Severance Policy of Walter Investment Management Corp. effective February 9, 2015.

10.12.1			Amended and Restated Receivables Loan Agreement (“Receivables Loan Agreement”), dated as of May 2, 2012, by and among Green Tree Advance Receivables II LLC, as borrower, Green Tree Servicing, as administrator, the financial institutions from time to time party hereto, as lenders, Wells Fargo Bank, National Association, and Wells Fargo Capital Finance, LLC, as agent for the lenders (Incorporated herein by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 as filed with the Securities and Exchange Commission on May 9, 2012).

10.12.2			Amendment No. 1 to Receivables Loan Agreement, dated as of June 4, 2012, by and among Green Tree Advance Receivables II LLC, as borrower, Green Tree Servicing, as administrator, the financial institutions from time to time party hereto, as lenders, Wells Fargo Bank, National Association, and Wells Fargo Capital Finance, LLC, as agent for the lenders (Incorporated herein by reference to Exhibit 10.30.1 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on February 27, 2014 and amended on August 14, 2014).

10.12.3			Amendment No. 2 to Receivables Loan Agreement, dated as of May 3, 2013, by and among Green Tree Advance Receivables II LLC, as borrower, Green Tree Servicing, as administrator, the financial institutions from time to time party hereto, as lenders, Wells Fargo Bank, National Association, and Wells Fargo Capital Finance, LLC, as agent for the lenders (Incorporated herein by reference to Exhibit 10.30.2 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on February 27, 2014 and amended on August 14, 2014).

10.12.4			Amendment No. 3 to Receivables Loan Agreement, dated as of August 13, 2013, by and among Green Tree Advance Receivables II LLC, as borrower, Green Tree Servicing, as administrator, the financial institutions from time to time party hereto, as lenders, Wells Fargo Bank, National Association, and Wells Fargo Capital Finance, LLC, as agent for the lenders (Incorporated herein by reference to Exhibit 10.30.3 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on February 27, 2014 and amended on August 14, 2014).

10.12.5			Amendment No. 4 to Receivables Loan Agreement, dated as of September 30, 2013, by and among Green Tree Advance Receivables II LLC, as borrower, Green Tree Servicing, as administrator, the financial institutions from time to time party hereto, as lenders, Wells Fargo Bank, National Association, and Wells Fargo Capital Finance, LLC, as agent for the lenders (Incorporated herein by reference to Exhibit 10.30.4 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on February 27, 2014 and amended on August 14, 2014).

10.12.6			Amendment No. 5 to Receivables Loan Agreement, dated as of December 30, 2013, by and among Green Tree Advance Receivables II LLC, as borrower, Green Tree Servicing, as administrator, the financial institutions from time to time party hereto, as lenders, Wells Fargo Bank, National Association, and Wells Fargo Capital Finance, LLC, as agent for the lenders (Incorporated herein by reference to Exhibit 10.30.5 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on February 27, 2014 and amended on August 14, 2014).

10.12.7			Amendment No. 6 to Receivables Loan Agreement, dated as of December 30, 2013, by and among Green Tree Advance Receivables II LLC, as borrower, Green Tree Servicing, as administrator, the financial institutions from time to time party hereto, as lenders, Wells Fargo Bank, National Association, and Wells Fargo Capital Finance, LLC, as agent for the lenders (Incorporated herein by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 filed with the Securities and Exchange Commission on August 11, 2014).

10.12.8			Amendment No. 7 to Receivables Loan Agreement, dated as of September 9, 2014, and effective as of March 31, 2014, by and among Green Tree Advance Receivables II LLC, as borrower, Green Tree Servicing, as administrator, the financial institutions from time to time party hereto, as lenders, Wells Fargo Bank, National Association, and Wells Fargo Capital Finance, LLC, as agent for the lenders (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 filed with the Securities and Exchange Commission on November 6, 2014).

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Exhibit No.			Description
10.12.9			Amendment No. 8 to Receivables Loan Agreement, dated as of July 28, 2015, by and among Green Tree Advance Receivables II LLC, as borrower, Green Tree Servicing LLC, as administrator, the financial institutions identified on the signature pages thereto, as lenders, Wells Fargo Bank, National Association, as Calculation Agent, Account Bank, Verification Agent and Securities Intermediary, and Wells Fargo Capital Finance, LLC, as agent for the lenders (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 as filed with the Securities and Exchange Commission on November 5, 2015).

10.13.1			Mortgage Selling and Servicing Contract (the "MSSC"), dated March 23, 2005, by and between Fannie Mae and Green Tree Servicing (Incorporated herein by reference to Exhibit 10.37 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission on March 18, 2013).

10.13.2			Addendum to MSSC, dated March 23, 2005, by and between Fannie Mae and Green Tree Servicing (Incorporated herein by reference to Exhibit 10.37 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission on March 18, 2013).

10.13.3+			Addendum (the “EAR Agreement”) to the MSSC by and between Fannie Mae and Green Tree Servicing, effective April 1, 2014 (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 filed with the Securities and Exchange Commission on April 8, 2014 and amended on April 13, 2014).

10.13.4			Guaranty made as of March 17, 2014 by Walter Investment Management Corp. for the benefit of Fannie Mae (Incorporated herein by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 filed with the Securities and Exchange Commission on April 8, 2014 and amended on April 13, 2014).

10.13.5			First Amendment to the EAR Agreement by and between Fannie Mae and Green Tree Servicing, effective June 1, 2014 (Incorporated herein by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 filed with the Securities and Exchange Commission on August 11, 2014).

10.13.6+			Addendum to the MSSC, effective June 6, 2014, by and between Fannie Mae and Green Tree Servicing (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 filed with the Securities and Exchange Commission on August 11, 2014).

10.13.7			Second Amendment to the EAR Agreement by and between Fannie Mae and Green Tree Servicing, entered into effective December 19, 2014 (Incorporated herein by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on December 29, 2014).

10.13.8			Addendum to the MSSC between Fannie Mae and Green Tree Servicing effective April 4, 2012 (Incorporated herein by reference to Exhibit 10.14.8 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on February 26, 2015).

10.13.9			Addendum to the MSSC between Fannie Mae and Green Tree Servicing effective February 8, 2013 (Incorporated herein by reference to Exhibit 10.14.9 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on February 26, 2015).

10.13.10			Addendum to the MSSC between Fannie Mae and Green Tree Servicing effective April 29, 2013 (Incorporated herein by reference to Exhibit 10.14.10 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on February 26, 2015).

10.13.11*			Addendum to the MSSC between Fannie Mae and Ditech Financial LLC dated August 31, 2015.

10.14.1			Credit Agreement dated as of November 28, 2012, among Walter Investment Management Corp., the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on December 4, 2012).

10.14.2			Amendment No. 1, Incremental Amendment and Joinder Agreement, dated January 31, 2013 relating to the Credit Agreement, dated November 28, 2012, among Walter Investment Management Corp., the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 6, 2013).

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Exhibit No.			Description
10.14.3			Amendment No. 2 to Credit Agreement, dated as of March 14, 2013, to that certain Credit Agreement, dated as of November 28, 2012 among Walter Investment Management Corp., the lenders from time to time party thereto and Credit Suisse AG, as administrative agent and collateral agent (Incorporated herein by reference to Exhibit 10.42.3 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission on March 18, 2013).

10.14.4			Amendment No. 3, Incremental Amendment and Joinder Agreement, dated as of June 6, 2013 relating to the Credit Agreement, dated November 28, 2012, among Walter Investment Management Corp., the lenders from time to time party thereto, and Credit Suisse AG, as administrative agent and collateral agent, and each of Credit Suisse AG, Morgan Stanley Senior Funding Inc., Barclays Bank PLC and Bank of America, N.A. (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 11, 2013).

10.14.5			Amendment No. 1 to Amendment No. 3, Incremental Amendment and Joinder Agreement, dated as of July 17, 2013, among Walter Investment Management Corp., the other Credit Parties party thereto, and Credit Suisse AG as administrative agent and collateral agent (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2013).

10.14.6			Amendment No. 4, Incremental Amendment and Joinder Agreement dated as of July 23, 2013 relating to the Credit Agreement dated as of November 28, 2012 among Walter Investment Management Corp., the lenders from time to time party thereto, and Credit Suisse AG, as administrative and collateral agent (Incorporated herein by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2013).

10.14.7			Amendment No. 5 to Credit Agreement, dated as of September 5, 2013, to that certain Credit Agreement, dated as of November 28, 2012 Agreement, dated as of July 23, 2013, among Walter Investment Management Corp., the lenders from time to time party thereto and Credit Suisse AG, as administrative agent and collateral agent (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 11, 2013).

10.15			Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Green Tree Servicing, and Bank of America, National Association (Incorporated herein by reference to Exhibit 10.43 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the Securities and Exchange Commission on March 18, 2013).

10.16.1			Credit Agreement dated December 19, 2013, among Walter Investment Management Corp., Credit Suisse AG, as administrative agent and collateral agent, the lenders from time to time party thereto and the other parties thereto (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 20, 2013).

10.16.2*			Amendment No. 1, dated February 23, 2016, to the Amended and Restated Credit Agreement dated December 19, 2013, among Walter Investment Management Corp., Credit Suisse AG, as administrative agent and collateral agent and the lenders from time to time party thereto.

10.17†			Employment Letter Agreement between Walter Investment Management Corp. and Gary Tillett dated January 28, 2013 (Incorporated herein by reference to Exhibit 10.39 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on February 27, 2014 and amended on August 14, 2014).

10.18			Amended and Restated Receivables Sale Agreement, dated as of October 21, 2015, among Ditech Financial LLC, as Seller, Green Tree Advance Receivables III LLC, as Depositor, and Walter Investment Management Corp., as Limited Guarantor, and consented to by Barclays, as Administrative Agent (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on October 26, 2015).

10.19			Amended and Restated Receivables Pooling Agreement, dated as of October 21, 2015, between the Green Tree Advance Receivables III LLC, as Depositor, and Green Tree Agency Advance Funding Trust I, as Issuer, and consented to by Barclays, as Administrative Agent (Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on October 26, 2015).

10.20			Acknowledgment Agreement with respect to Servicing Advance Receivables, dated as of December 19, 2014, by and among Green Tree Servicing, Green Tree Agency Advance Funding Trust I, Green Tree Advance Receivables III LLC, Wells Fargo Bank, N.A. as Indenture Trustee and Fannie Mae (Incorporated herein by reference to Exhibit 10.6 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on December 29, 2014).

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Exhibit No.			Description
10.21			Third Amended and Restated Consent Agreement, dated as of October 21, 2015, by and among Ditech Financial LLC, Green Tree Agency Advance Funding Trust I, Green Tree Advance Receivables III LLC, Wells Fargo Bank, N.A., as Indenture Trustee and the Federal Home Loan Mortgage Corporation (Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on October 26, 2015).

10.22.1*			Master Repurchase Agreement, dated September 29, 2015, but effective as of October 15, 2015, among Barclays Bank PLC, as Agent, Sutton Funding LLC, as Purchaser, Reverse Mortgage Solutions, Inc., as a Seller and RMS REO BRC, LLC, as a Seller.

10.22.2*			Guaranty, dated September 29, 2015, but effective as of October 15, 2015, by Walter Investment Management Corp., as Guarantor, and acknowledged and agreed by Barclays Bank PLC, as Agent and Sutton Funding LLC, as Purchaser.

10.23.1*			Master Repurchase Agreement, dated February 23, 2016, by and among Credit Suisse First Boston Mortgage Capital LLC, Reverse Mortgage Solutions, Inc., RMS REO CS LLC and Wilmington Savings Fund Society, FSB, D/B/A Christian Trust.

10.23.2*			Guaranty, dated as of February 23, 2016, by Walter Investment Management Corp., as Guarantor.

10.24†			Employment Letter Agreement between Walter Investment Management Corp. and Jonathan F. Pedersen, dated October 16, 2013 (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 as filed with the Securities and Exchange Commission on May 7, 2015).

10.25*†			Employment Letter Agreement between Walter Investment Management Corp. and David Schneider, dated February 10, 2015.

10.26			Letter agreement, dated as of November 16, 2015, between Walter Investment Management Corp., Birch Run Capital Advisors, LP and Daniel Beltzman (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 17, 2015).

10.27			Investor Agreement, dated as of November 22, 2015, between Walter Investment Management Corp., Baker Street Capital Management, LLC and certain of its affiliates, and Vadim Perelman (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 23, 2015).

21*			Subsidiaries of the Registrant.

23*			Consent of Ernst & Young LLP.

31.1*			Certification by Denmar J. Dixon pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*			Certification by Gary L. Tillett pursuant to Securities Exchange Act Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32*			Certification by Denmar J. Dixon and Gary L. Tillett pursuant to 18 U.S.C. Section 1352, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101**			XBRL (Extensible Business Reporting Language) - The following materials from Walter Investment Management Corp.’s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL (Extensible Business Reporting Language); (i) Consolidated Balance Sheets as of December 31, 2015 and 2014, (ii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2015, 2014 and 2013, (iii) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2015, 2014 and 2013; (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013; and (v) Notes to Consolidated Financial Statements.

* Filed or furnished herewith.

** Filed electronically with this report.


+	Certain information has been omitted from this exhibit and filed separately with the Securities and Exchange Commission. Confidential treatment has been granted with respect to the omitted portions pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Omitted portions are indicated in this exhibit with [***].


†	Constitutes a management contract or compensatory plan or arrangement.

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The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

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WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

TABLE OF CONTENTS TO CONSOLIDATED FINANCIAL STATEMENTS




		Page
Report of Independent Registered Certified Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2015 and 2014		F-3
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2015, 2014 and 2013		F-5
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2015, 2014 and 2013		F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013		F-7
Notes to Consolidated Financial Statements		F-9
1. Business and Basis of Presentation		F-9
2. Significant Accounting Policies		F-11
3. Acquisitions		F-21
4. Variable Interest Entities		F-22
5. Transfers of Residential Loans		F-27
6. Fair Value		F-28
7. Freestanding Derivative Financial Instruments		F-36
8. Residential Loans at Amortized Cost, Net		F-37
9. Residential Loans at Fair Value		F-38
10. Receivables, Net		F-39
11. Servicer and Protective Advances, Net		F-40
12. Servicing of Residential Loans		F-40
13. Goodwill and Intangible Assets, Net		F-44
14. Premises and Equipment, Net		F-47
15. Other Assets		F-48
16. Payables and Accrued Liabilities		F-48
17. Servicing Advance Liabilities		F-49
18. Warehouse Borrowings		F-50
19. Servicing Rights Related Liabilities		F-51
20. Corporate Debt		F-52
21. Mortgage-Backed Debt		F-54
22. HMBS Related Obligations		F-54
23. Share-Based Compensation		F-54
24. Income Taxes		F-57
25. Common Stock and Earnings (Loss) Per Share		F-60
26. Supplemental Disclosures of Cash Flow Information		F-63
27. Segment Reporting		F-63
28. Certain Capital Requirements and Guarantees		F-65
29. Commitments and Contingencies		F-66
30. Separate Financial Information of Subsidiary Guarantors of Indebtedness		F-73
31. Quarterly Results of Operations (Unaudited)		F-82
32. Subsequent Events		F-83

Financial Statement Schedule
Schedule I - Financial Information (Parent Company Only) as of December 31, 2015 and 2014 and for the Years Ended December 31, 2015, 2014 and 2013		F-84

Table of Contents

Report of Independent Registered Certified Public Accounting Firm

The Board of Directors and Stockholders of

Walter Investment Management Corp.

We have audited the accompanying consolidated balance sheets of Walter Investment Management Corp. and subsidiaries as of December 31, 2015 and 2014 , and the related consolidated statements of comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2015 . Our audits also included the financial statement schedule listed in the Index at Schedule I. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Walter Investment Management Corp. and subsidiaries at December 31, 2015 and 2014 , and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2015 , in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Walter Investment Management Corp. and subsidiaries’ internal control over financial reporting as of December 31, 2015 , based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 29, 2016 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Tampa, Florida

February 29, 2016

F-2

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WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)



	December 31,
	2015		2014
ASSETS
Cash and cash equivalents	$	202,828	$	320,175
Restricted cash and cash equivalents	708,099		733,015
Residential loans at amortized cost, net (includes $4,457 and $10,033 in allowance for loan losses at December 31, 2015 and 2014, respectively)	541,406		1,314,539
Residential loans at fair value	12,673,439		11,832,630
Receivables, net (includes $16,542 and $25,201 at fair value at December 31, 2015 and 2014, respectively)	214,398		215,629
Servicer and protective advances, net (includes $120,338 and $112,427 in allowance for uncollectible advances at December 31, 2015 and 2014, respectively)	1,595,911		1,761,082
Servicing rights, net (includes $1,682,016 and $1,599,541 at fair value at December 31, 2015 and 2014, respectively)	1,788,576		1,730,216
Goodwill	367,911		575,468
Intangible assets, net	84,038		103,503
Premises and equipment, net	106,481		124,926
Deferred tax asset, net	108,050		—
Other assets (includes $58,512 and $68,151 at fair value at December 31, 2015 and 2014, respectively)	200,364		238,400
Total assets	$	18,591,501	$	18,949,583

LIABILITIES AND STOCKHOLDERS' EQUITY
Payables and accrued liabilities (includes $6,475 and $30,024 at fair value at December 31, 2015 and 2014, respectively)	$	639,980	$	663,829
Servicer payables	603,692		584,567
Servicing advance liabilities	1,229,280		1,365,885
Warehouse borrowings	1,340,388		1,176,956
Servicing rights related liabilities at fair value	117,000		66,311
Corporate debt	2,157,424		2,237,037
Mortgage-backed debt (includes $582,340 and $653,167 at fair value at December 31, 2015 and 2014, respectively)	1,051,679		1,739,827
HMBS related obligations at fair value	10,647,382		9,951,895
Deferred tax liability, net	—		86,617
Total liabilities	17,786,825		17,872,924

Commitments and contingencies (Note 29)

Stockholders' equity:
Preferred stock, $0.01 par value per share:
Authorized - 10,000,000 shares
Issued and outstanding - 0 shares at December 31, 2015 and 2014	—		—
Common stock, $0.01 par value per share:
Authorized - 90,000,000 shares
Issued and outstanding - 35,573,405 and 37,711,623 shares at December 31, 2015 and 2014, respectively	355		377
Additional paid-in capital	591,454		600,643
Retained earnings	212,054		475,244
Accumulated other comprehensive income	813		395
Total stockholders' equity	804,676		1,076,659
Total liabilities and stockholders' equity	$	18,591,501	$	18,949,583

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The following table presents the assets and liabilities of the Company’s consolidated variable interest entities, which are included on the consolidated balance sheets above. The assets in the table below include those assets that can only be used to settle obligations of the consolidated variable interest entities. The liabilities in the table below include third-party liabilities of the consolidated variable interest entities only, and for which creditors or beneficial interest holders do not have recourse to the Company, and exclude intercompany balances that eliminate in consolidation.



	December 31,
	2015		2014
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITIES THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITIES:
Restricted cash and cash equivalents	$	59,705	$	105,977
Residential loans at amortized cost, net	500,563		1,292,781
Residential loans at fair value	526,016		586,433
Receivables at fair value	16,542		25,201
Servicer and protective advances, net	1,136,246		1,273,186
Other assets	12,170		34,567
Total assets	$	2,251,242	$	3,318,145

LIABILITIES OF THE CONSOLIDATED VARIABLE INTEREST ENTITIES FOR WHICH CREDITORS OR BENEFICIAL INTEREST HOLDERS DO NOT HAVE RECOURSE TO THE COMPANY:
Payables and accrued liabilities	$	3,435	$	8,511
Servicing advance liabilities	992,769		1,160,257
Mortgage-backed debt (includes $582,340 and $653,167 at fair value at December 31, 2015 and 2014, respectively)	1,051,679		1,739,827
Total liabilities	$	2,047,883	$	2,908,595

The accompanying notes are an integral part of the consolidated financial statements.

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WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)



	For the Years Ended December 31,
	2015			2014			2013
REVENUES
Net servicing revenue and fees	$	494,267		$	601,510		$	783,389
Net gains on sales of loans	453,840			462,172			598,974
Interest income on loans	74,365			134,555			144,651
Net fair value gains on reverse loans and related HMBS obligations	98,265			109,972			120,382
Insurance revenue	47,201			71,010			84,478
Other revenues	106,321			107,934			70,625
Total revenues	1,274,259			1,487,153			1,802,499

EXPENSES
Salaries and benefits	576,817			578,627			549,799
General and administrative	574,091			577,506			480,377
Interest expense	273,606			303,103			272,655
Goodwill impairment	207,557			82,269			—
Depreciation and amortization	69,128			72,721			71,027
Other expenses, net	10,557			10,803			9,395
Total expenses	1,711,756			1,625,029			1,383,253

OTHER GAINS (LOSSES)
Gains (losses) on extinguishments	4,660			—			(12,489		)
Other net fair value gains	7,398			19,280			6,061
Other	21,013			(744		)	—
Total other gains (losses)	33,071			18,536			(6,428		)

Income (loss) before income taxes	(404,426		)	(119,340		)	412,818
Income tax expense (benefit)	(141,236		)	(9,012		)	159,351
Net income (loss)	$	(263,190	)	$	(110,328	)	$	253,467

OTHER COMPREHENSIVE INCOME (LOSS) BEFORE TAXES
Change in postretirement benefits liability	193			138			58
Amortization of realized losses on closed hedges	—			(145		)	(127		)
Unrealized gain on available-for-sale security in other assets	503			77			75
Other comprehensive income before taxes	696			70			6
Income tax expense for other comprehensive income items	278			173			1
Other comprehensive income (loss)	418			(103		)	5
Total comprehensive income (loss)	$	(262,772	)	$	(110,431	)	$	253,472

Net income (loss)	$	(263,190	)	$	(110,328	)	$	253,467
Basic earnings (loss) per common and common equivalent share	$	(7.00	)	$	(2.93	)	$	6.75
Diluted earnings (loss) per common and common equivalent share	(7.00		)	(2.93		)	6.63
Weighted-average common and common equivalent shares outstanding — basic	37,578			37,631			37,003
Weighted-average common and common equivalent shares outstanding — diluted	37,578			37,631			37,701

The accompanying notes are an integral part of the consolidated financial statements.

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WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)



	Common Stock					Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income
	Shares		Amount			Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income			Total
Balance at January 1, 2013	36,687,785		$	367		$	561,963		$	332,105		$	493		$	894,928
Net income	—		—			—			253,467			—			253,467
Other comprehensive income, net of tax	—		—			—			—			5			5
Share-based compensation	—		—			13,011			—			—			13,011
Excess tax benefit on share-based compensation	—		—			2,705			—			—			2,705
Issuance of shares under incentive plans	689,489		7			2,893			—			—			2,900
Balance at December 31, 2013	37,377,274		374			580,572			585,572			498			1,167,016
Net loss	—		—			—			(110,328		)	—			(110,328		)
Other comprehensive loss, net of tax	—		—			—			—			(103		)	(103		)
Share-based compensation	—		—			14,533			—			—			14,533
Excess tax benefit on share-based compensation	—		—			42			—			—			42
Issuance of shares under incentive plans	334,349		3			5,496			—			—			5,499
Balance at December 31, 2014	37,711,623		377			600,643			475,244			395			1,076,659
Net loss	—		—			—			(263,190		)	—			(263,190		)
Other comprehensive income, net of tax	—		—			—			—			418			418
Share-based compensation	—		—			20,937			—			—			20,937
Tax shortfall on share-based compensation	—		—			(1,367		)	—			—			(1,367		)
Issuance of shares under incentive plans	244,515		2			(718		)	—			—			(716		)
Repurchase and cancellation of common stock under repurchase plan	(2,382,733	)	(24		)	(28,041		)	—			—			(28,065		)
Balance at December 31, 2015	35,573,405		$	355		$	591,454		$	212,054		$	813		$	804,676

The accompanying notes are an integral part of the consolidated financial statements.

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WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	For the Years Ended December 31,
	2015			2014			2013
Operating activities
Net income (loss)	$	(263,190	)	$	(110,328	)	$	253,467

Adjustments to reconcile net income (loss) to net cash used in operating activities
Net fair value gains on reverse loans and related HMBS obligations	(98,265		)	(109,972		)	(120,382		)
Amortization of servicing rights	26,827			43,101			42,583
Change in fair value of servicing rights	401,992			273,502			(48,058		)
Change in fair value of servicing rights related liabilities	(1,587		)	(2,114		)	—
Change in fair value of charged-off loans	(18,475		)	(7,598		)	—
Other net fair value (gains) losses	1,682			(8,530		)	6,464
Accretion of discounts on residential loans and advances	(7,130		)	(15,744		)	(17,991		)
Accretion of discounts on debt and amortization of deferred debt issuance costs	20,408			19,084			21,680
Amortization of other deferred debt issuance costs	11,004			14,699			6,910
Provision for uncollectible advances	52,679			75,704			37,993
Depreciation and amortization of premises and equipment and intangible assets	69,128			72,721			71,027
Provision (benefit) for deferred income taxes	(196,326		)	(35,408		)	97,418
Share-based compensation	20,937			14,533			13,011
Purchases and originations of residential loans held for sale	(25,942,841		)	(18,878,305		)	(16,141,573		)
Proceeds from sales of and payments on residential loans held for sale	25,896,204			19,042,387			15,539,918
Net gains on sales of loans	(453,840		)	(462,172		)	(598,974		)
Proceeds from sale of trading security	70,390			—			—
Gain on sale of trading security	(10,296		)	—			—
Gain on sale of investments	(8,959		)	—			—
Goodwill impairment	207,557			82,269			—
Other	(3,188		)	1,104			9,900

Changes in assets and liabilities
Decrease (increase) in receivables	2,629			70,495			(64,270		)
Decrease (increase) in servicer and protective advances	133,940			(291,383		)	(1,069,377		)
Decrease (increase) in other assets	29,793			(17,332		)	(14,327		)
Increase in payables and accrued liabilities	1,002			65,858			160,386
Increase (decrease) in servicer payables	9,832			(40,841		)	3,720
Cash flows used in operating activities	(48,093		)	(204,270		)	(1,810,475		)

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WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(in thousands)

	For the Years Ended December 31,
	2015			2014			2013
Investing activities
Purchases and originations of reverse loans held for investment	(1,471,275		)	(1,505,215		)	(3,020,937		)
Principal payments received on reverse loans held for investment	871,832			548,660			372,375
Principal payments received on mortgage loans held for investment	114,906			162,257			169,659
Payments received on charged-off loans held for investment	26,385			14,929			—
Payments received on receivables related to Non-Residual Trusts	7,481			9,471			14,804
Proceeds from sales of real estate owned, net	76,703			55,306			38,424
Purchases of premises and equipment	(27,761		)	(21,573		)	(38,639		)
Decrease (increase) in restricted cash and cash equivalents	9,219			11,333			(8,156		)
Payments for acquisitions of businesses, net of cash acquired	(5,095		)	(197,061		)	(492,283		)
Acquisitions of servicing rights	(264,743		)	(268,618		)	(797,165		)
Proceeds from sale of investment	14,376			—			—
Proceeds from sale of residual interests in Residual Trusts	189,513			—			—
Acquisitions of charged-off loans held for investment	—			(64,548		)	—
Other	3,511			10,948			(14,165		)
Cash flows used in investing activities	(454,948		)	(1,244,111		)	(3,776,083		)

Financing activities
Proceeds from issuance of corporate debt, net of debt issuance costs	—			—			3,106,263
Payments on corporate debt	(12,901		)	(17,220		)	(362,931		)
Proceeds from securitizations of reverse loans	1,622,481			1,617,399			3,216,096
Payments on HMBS related obligations	(1,025,458		)	(637,272		)	(409,331		)
Issuances of servicing advance liabilities	2,073,227			2,299,930			1,604,272
Payments on servicing advance liabilities	(2,206,965		)	(1,905,331		)	(733,150		)
Net change in warehouse borrowings related to mortgage loans	207,305			75,726			929,015
Net change in warehouse borrowings related to reverse loans	(43,873		)	15,667			(98,837		)
Proceeds from sales of excess servicing spreads and servicing rights	55,698			75,426			—
Payments on servicing rights related liabilities	(12,317		)	(6,822		)	—
Other debt issuance costs paid	(13,949		)	(17,281		)	(9,833		)
Payments on mortgage-backed debt	(136,493		)	(181,155		)	(200,369		)
Extinguishments and settlement of debt	(79,877		)	—			(1,405,424		)
Repurchase of shares under stock repurchase plan	(28,065		)	—			—
Other	(13,119		)	(42,396		)	618
Cash flows provided by financing activities	385,694			1,276,671			5,636,389

Net increase (decrease) in cash and cash equivalents	(117,347		)	(171,710		)	49,831
Cash and cash equivalents at the beginning of the year	320,175			491,885			442,054
Cash and cash equivalents at the end of the year	$	202,828		$	320,175		$	491,885

The accompanying notes are an integral part of the consolidated financial statements.

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WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business and Basis of Presentation

Walter Investment Management Corp. and its subsidiaries, or the Company, is a mortgage banking firm focused primarily on servicing and originating residential loans, including reverse loans. The Company services loans for its own portfolio and for GSEs, government agencies, third-party securitization trusts and other credit owners. In addition, the Company operates several other businesses which include managing a portfolio of credit-challenged, non-conforming residential mortgage loans; an insurance agency serving borrowers and credit owners of its servicing portfolio; a post charge-off collection agency; and an asset management business. The Company operates throughout the U.S.

The Company operates through three reportable segments, Servicing, Originations, and Reverse Mortgage. Refer to Note 27 for additional information.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with GAAP. The consolidated financial statements include the accounts of Walter Investment, its wholly-owned subsidiaries, and VIEs, of which the Company is the primary beneficiary. All significant intercompany balances and transactions have been eliminated. The results of operations for business combinations are included from their respective dates of acquisition.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although management is not currently aware of any factors that would significantly change its estimates and assumptions, actual results may differ from these estimates.

Changes in Presentation

Certain prior year amounts have been reclassified to conform to current year presentation. During the first quarter of 2015, the Company reorganized its reportable segments, changed the composition of indirect costs and depreciation and amortization allocated to the business segments, and established an intersegment charge between the Servicing and Originations segments for certain loan originations associated with the Company's mortgage loan servicing portfolio. Refer to Note 27 for additional information. In addition, the Company has included the excess servicing spread liability at fair value in the servicing rights related liabilities at fair value line item on the consolidated balance sheets. Also, as a result of the early adoption of recent accounting guidance detailed further below, the Company's debt issuance costs that are not related to line-of-credit arrangements have been reclassified from other assets to corporate debt and mortgage-backed debt on the consolidated balance sheets for all years presented.

Recent Accounting Guidance

In January 2014, the FASB issued an accounting standards update that clarifies the definition of an in-substance repossession and foreclosure, and requires additional disclosures related to these items. This amendment reduces diversity in practice by clarifying when an in-substance repossession or foreclosure occurs, that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The required disclosures under these new amendments require interim and annual disclosures of both (i) the amount of foreclosed residential real estate property held by the creditor and (ii) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure. These additional disclosures are included in Note 6.

In April 2014, the FASB issued an accounting standards update which changes the criteria for reporting discontinued operations. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of, or is classified as held for sale, and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Major strategic shifts include disposals of a significant geographic area or line of business. The new standard allows an entity to have significant continuing involvement and cash flows with the discontinued operation. The standard requires expanded disclosures for discontinued operations and new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. The amendments in this standard were effective for the Company beginning January 1, 2015. The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

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In May 2014, the FASB issued guidance that supersedes most revenue recognition requirements regarding contracts with customers to transfer goods or services or for the transfer of nonfinancial assets. The guidance also supersedes most industry specific guidance but does exclude insurance contracts and financial instruments. Under the new guidance, entities are required to recognize revenue in order to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step analysis to be performed on transactions to determine when and how revenue is recognized. In April 2015, the FASB voted for a one-year deferral of the effective date of the new revenue recognition standard, resulting in this new guidance being effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. Entities have the option of using either a full retrospective application or a modified retrospective application to adopt the guidance. Early adoption is not permitted. The Company is currently evaluating the effect the guidance will have on its consolidated financial statements, including the method it will choose for adoption.

In June 2014, the FASB issued an accounting standards update on transfers and servicing, effective prospectively for fiscal years beginning after December 15, 2014 and interim periods within those years. The new guidance requires that repurchase financing arrangements be accounted for as secured borrowings and provides for enhanced disclosures, including the nature of collateral pledged and the time to maturity. Certain interim period disclosures for repurchase agreements are effective for interim periods beginning after March 15, 2015. The adoption of the guidance addressing the accounting for repurchase financing arrangements, which was effective beginning January 1, 2015, did not have an impact on the Company’s consolidated financial statements as the Company already records repurchase agreements as secured borrowings. The new disclosure requirements are included in Note 18.

In August 2014, the FASB issued an accounting standards update regarding an alternative approach on measuring the financial assets and financial liabilities of a consolidated CFE (referred to as the measurement alternative). The accounting standard update provides an entity with an election to measure the financial assets and financial liabilities of a consolidated CFE on the basis of either the fair value of the CFE’s financial assets or financial liabilities, whichever is more observable. The new guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The adoption of this standard is not expected to have a significant impact on the Company's consolidated financial statements.

In August 2014, the FASB issued an accounting standards update on the classification of certain foreclosed mortgage loans held by creditors that are either fully or partially guaranteed under government programs. The amendments are intended to clarify when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan should be derecognized and the real estate recognized. The amendment requires that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met, (i) the loan has a government guarantee that is not separable from the loan before foreclosure; (ii) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim; and (iii) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The amendments in this standard were effective for the Company beginning January 1, 2015. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.

In January 2015, the FASB issued an accounting standards update eliminating the concept of extraordinary items. This amendment is intended to reduce complexity in accounting standards. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. The new guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The adoption of this standard is not expected to have a significant impact on the Company's consolidated financial statements.

In February 2015, the FASB issued an accounting standards update which requires amendments to both the variable interest entity and voting models. The amendments (i) rescind the indefinite deferral of certain aspects of accounting standards relating to consolidations and provide a permanent scope exception for registered money market funds and similar unregistered money market funds, (ii) modify the identification of variable interests (fees paid to a decision maker or service provider), the VIE characteristics for a limited partnership or similar entity and primary beneficiary determination under the VIE model, and (iii) eliminate the presumption within the current voting model that a general partner controls a limited partnership or similar entity. The new guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The amendments may be applied using either a modified retrospective or full retrospective approach. The Company elected to early adopt these amendments using the full retrospective approach, and therefore the amendments in this standard were effective for the Company beginning April 1, 2015. The adoption of this standard did not result in any additional consolidations of variable interest entities.

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In April 2015, the FASB issued an accounting standards update regarding the approach for recognizing debt issuance costs, to which a clarification was issued in August 2015. The amendments now require entities to recognize debt issuance costs as a direct deduction from the carrying amount of the related debt liability and not recorded as a separate asset. Given the absence of authoritative guidance for debt issuance costs related to line-of-credit arrangements in the original accounting standards update, the SEC Staff stated that it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the costs ratably over the term of the arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit. The new guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The Company elected to early adopt these amendments, and therefore, the amendments in these standards were effective for the Company beginning December 31, 2015. The Company's debt issuance costs that are not related to line-of-credit arrangements have been reclassified from other assets to corporate debt and mortgage-backed debt on the consolidated balance sheets for all years presented, which resulted in a reduction to the Company's assets and liabilities of $42.4 million at December 31, 2014.

In April 2015, the FASB issued an accounting standards update that provides guidance regarding whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the entity should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the entity should account for the arrangement as a service contract. This guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements.

In September 2015, the FASB issued an accounting standards update which provides updated guidance regarding simplifying the accounting for recognizing adjustments to provisional amounts identified during the measurement period in a business combination. To simplify the accounting for these adjustments, the amendments in this update eliminate the requirement to retrospectively account for the adjustments and to recognize them in the period that they are identified. This guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2015 with early adoption permitted. The adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial statements.

In January 2016, the FASB issued an accounting standards update that makes amendments to the guidance on the classification and measurement of financial instruments. The new standard revises an entity's accounting related to (i) the classification and measurement of investments in equity securities and (ii) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. This guidance is effective for annual reporting periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company is currently evaluating the effect, if any, the guidance will have on its consolidated financial statements.

In February 2016, the FASB issued an accounting standards update that requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset to not recognize lease assets and lease liabilities. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach, which includes a number of optional practical expedients that entities may elect to apply. This guidance is effective for fiscal years beginning after December 15, 2018, with early application permitted. The Company has not evaluated the impact that this guidance will have on its consolidated financial statements due to the timing of the issuance of this guidance.

2. Significant Accounting Policies

Principles of Consolidation

The Company’s consolidated financial statements include the accounts and transactions of Walter Investment and other entities in which the Company has a controlling financial interest. A controlling financial interest may exist in the form of an ownership of a majority of an entity’s voting interests or through other arrangements with entities, such as with a VIE.

The Company evaluates each securitization trust associated with its residential loan portfolio to determine if the Company has a variable interest in the trust, if the trust meets the definition of a VIE and whether the Company has a controlling financial interest as the primary beneficiary of the VIE. If the Company determines that it does have a variable interest in the trust, that the trust is a VIE, and that it is the primary beneficiary of the VIE, it consolidates the VIE. The evaluation considers all of the Company’s involvement with the VIE, identifying both the implicit and explicit variable interests that either individually or in the aggregate could be significant enough to warrant its designation as the primary beneficiary. This designation is evidenced by both the power to direct the

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activities of the VIE that most significantly impact its economic performance and the obligation to absorb the losses of, or the right to receive the benefits from, the VIE that could potentially be significant to the VIE.

When the Company’s only involvement with a securitization trust is that of servicer, the Company evaluates whether its servicing fee is deemed a variable interest. When the Company’s servicing fee meets all of the criteria in the accounting guidance for VIEs regarding fees paid to service providers, the Company concludes that it is acting in the capacity of a fiduciary and that it does not have a variable interest in the securitization trust. Accordingly, the Company does not consolidate the trust. However, in the event the servicing fee is deemed a variable interest, the Company evaluates whether it has the power to direct the activities of the VIE that most significantly impact the VIE's economic performance. If the Company concludes that it has such power, the Company consolidates the trust. The Company performs a similar evaluation when it is involved with other entities that are not securitization trusts.

The Company re-evaluates whether an entity in which it has a variable interest is a VIE when certain significant events occur. Throughout the duration of its involvement with an entity that is deemed a VIE, the Company reassesses whether it is the primary beneficiary and, accordingly, whether it must consolidate the VIE. Certain events may change the primary beneficiary of a VIE determination including, but not limited to, a change in the Company’s ownership of the residual interests, a change in the Company’s role as servicer, or a change in the Company’s contractual obligations to a VIE.

Deconsolidation of Marix

During the second quarter of 2015, the Company completed the contribution and deconsolidation of 100% of the equity of Marix to WCO pursuant to the terms of an amended contribution agreement among the Company, WCO and certain other parties. Pursuant to such agreement and as consideration for such contribution, during the third quarter of 2015, the Company received 300,000 partnership common units in WCO LP, a contingent consideration, following achievement by Marix of various post-contribution milestones, including the purchase of its first MSR. The Company elected to account for the partnership common units as a gain contingency. As a result, during the third quarter of 2015 the Company recorded a $3.1 million gain for the consideration received for the contribution of Marix, which is recorded in the other line item within other gains (losses) on the consolidated statements of comprehensive income (loss).

Cash and Cash Equivalents

Cash and cash equivalents include short-term deposits and highly-liquid investments that have original maturities of three months or less when purchased and are stated at cost, which approximates fair value. The Company maintains cash and cash equivalents with federally-insured financial institutions and these balances typically exceed insurable amounts. Cash equivalents also include amounts due from third-party financial institutions in process of settlement. These transactions typically settle in three days or less and were $116.1 million and $88.6 million at December 31, 2015 and 2014 , respectively.

Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents includes cash and cash equivalents that are legally restricted as to use or withdrawal. Restricted cash primarily includes (i) principal and interest payments collected by the Company as servicer on behalf of third-party credit owners and unconsolidated securitization trusts that have not yet been remitted to the credit owners or trusts; (ii) principal and interest payments collected by consolidated securitization trusts that have not yet been remitted to the bondholders; and (iii) amounts pledged as collateral for servicing advance facilities. Restricted cash equivalents include investments in money market mutual funds.

Residential Loans at Amortized Cost, Net

Residential loans carried at amortized cost include mortgage loans associated with the Residual Trusts and unencumbered mortgage loans. A majority of these loans were originated by the Company, acquired from other originators, principally an affiliate of Walter Energy, or acquired as part of a pool. Originated loans were initially recorded at the discounted value of the future payments using an imputed interest rate net of cost-basis adjustments such as deferred loan origination fees and associated direct costs, premiums and discounts. The imputed interest rate used represented the estimated prevailing market rate of interest for loans of similar terms issued to borrowers with similar credit risk. New originations of mortgage loans held for investment subsequent to May 1, 2008 relate primarily to the financing of sales of real estate owned. The imputed interest rate on these financings is based on observable market mortgage rates, adjusted for variations in expected credit losses where market data is unavailable. Loans acquired in a pool are generally purchased at a discount to their unpaid principal balance and are recorded at their purchase price at acquisition.

Interest Income and Amortization

Interest income on the Company’s residential loans carried at amortized cost consists of the interest earned on the outstanding principal balance of the underlying loan based on the contractual terms of the residential loan and retail installment agreement and the amortization of cost-basis adjustments, principally premiums and discounts. The retail installment agreements state the maximum

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amount to be charged to borrowers and ultimately recognized as interest income, based on the contractual number of payments and dollar amount of monthly payments. Cost-basis adjustments are deferred and recognized over the contractual life of the loan as an adjustment to yield using the level yield method. Residential loan pay-offs received in advance of scheduled maturity (voluntary prepayments) affect the amount of interest income due to the recognition at that time of any remaining unamortized premiums, discounts, or other cost-basis adjustments arising from the loan’s inception.

Non-accrual Loans

Residential loans at amortized cost that are not insured are placed on non-accrual status when any portion of the principal or interest is 90 days past due. When placed on non-accrual status, the related interest receivable is reversed against interest income of the current period. Interest income on non-accrual loans, if received, is recorded using the cash basis method of accounting. Residential loans are removed from non-accrual status when there is no longer significant uncertainty regarding collection of the principal and the associated interest. If a non-accrual loan is returned to accruing status, the accrued interest, at the date the residential loan is placed on non-accrual status and interest during the non-accrual period are recorded as interest income as of the date the loan no longer meets the non-accrual criteria. The past due or delinquency status of residential loans is generally determined based on the contractual payment terms. In the case of loans with an approved repayment plan, including plans approved by the bankruptcy court, delinquency is based on the modified due date of the loan. Loan balances are charged off when it becomes evident that balances are not collectible.

Allowance for Loan Losses

The allowance for loan losses represents management’s estimate of probable incurred credit losses inherent in the residential loan portfolio carried at amortized cost as of the balance sheet date. This portfolio is made up of one segment and class that consists primarily of less-than prime, credit-challenged residential loans, whose primary risk to the Company is credit exposure. The method for monitoring and assessing credit risk is the same throughout the portfolio.

Residential loans carried at amortized cost are homogeneous and evaluated collectively for impairment. The determination of the level of the allowance for loan losses and, correspondingly, the provision for loan losses is based on, but not limited to, delinquency levels, default frequency experience, prior loan loss severity experience, and management’s judgment and assumptions regarding various matters, including the composition of the residential loan portfolio, known and inherent risks in the portfolio, the estimated value of the underlying real estate collateral, the level of the allowance in relation to total loans and to historical loss levels, current economic and market conditions within the applicable geographic areas of the underlying real estate, changes in unemployment levels, and the impact that changes in interest rates have on a borrower’s ability to refinance its loan and to meet its repayment obligations. Management evaluates these assumptions and various other relevant factors impacting credit quality and inherent losses when quantifying the Company’s exposure to credit losses and assessing the adequacy of its allowance for loan losses as of each reporting date. The level of the allowance is adjusted based on the results of management’s analysis. Generally, as residential loans age, the credit exposure is reduced, resulting in decreasing provisions.

While the Company considers the allowance for loan losses to be adequate based on information currently available, future adjustments to the allowance may be necessary if circumstances differ from the assumptions used by management in determining the allowance for loan losses.

Loan Modifications

The Company will occasionally modify a loan agreement at the request of the borrower. The Company’s current modification program offered to borrowers is limited and is used to assist borrowers experiencing temporary hardships and is intended to minimize the economic loss to the Company and to avoid foreclosure. Generally, the Company’s modifications are short-term interest rate reductions and/or payment deferrals with forgiveness of principal rarely granted. A modification of a loan constitutes a troubled debt restructuring when a borrower is experiencing financial difficulty and the modification constitutes a concession. Loans modified in a troubled debt restructuring are typically already on non-accrual status and have an allowance recorded. At times, loans modified in a troubled debt restructuring by the Company may have the financial effect of increasing the allowance associated with the loan. The allowance for an impaired loan that has been modified in a troubled debt restructuring is measured based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or the estimated fair value of the collateral less any selling costs. Troubled debt restructurings have historically been, and continue to be, insignificant to the Company.

Residential Loans at Fair Value

Residential Loans Held for Investment

Residential loans held for investment and carried at fair value consist of reverse loans, mortgage loans associated with the Non-Residual Trusts, and charged-off loans. The Company has elected to carry these loans at fair value.

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Reverse loans consist of HECMs that were either originated or acquired by the Company. The loans are pooled and securitized into HMBS that are sold into the secondary market with servicing rights retained. Based upon the structure of the Ginnie Mae securitization program, the Company has determined that it has not met all of the requirements for sale accounting and accounts for these transfers as secured borrowings. Under this accounting treatment, the reverse loans remain on the consolidated balance sheets as residential loans. The proceeds from the transfers of reverse loans are recorded as HMBS related obligations with no gain or loss recognized on the transfers.

Reverse loans also include loans that have not yet been transferred to Ginnie Mae securitization pools and loans that have been repurchased from Ginnie Mae securitization pools. The Company, as an issuer of HMBS, is required to repurchase reverse loans out of the Ginnie Mae securitization pools once the outstanding principal balance of the related HECM is equal to or greater than 98% of the maximum claim amount, which is defined as the lesser of a home's appraised value at the point in time that the Conditional Commitment is issued or the maximum loan limit that can be insured by the FHA. Performing repurchased loans are conveyed to HUD and nonperforming repurchased loans are generally liquidated through foreclosure and subsequent sale of the real estate owned. Loans are considered nonperforming upon events such as, but not limited to, the death of the mortgagor, the mortgagor no longer occupying the property as their principal residence, or the property taxes or insurance not being paid. In addition to having to fund these repurchases, the Company also typically earns a lower interest rate and incurs certain non-reimbursable costs during the process of liquidating nonperforming loans.

The yield on reverse loans, along with any change in fair value, is recorded in net fair value gains on reverse loans and related HMBS obligations on the consolidated statements of comprehensive income (loss). Similarly, the yield on and change in fair value of mortgage loans associated with the Non-Residual Trusts, is recorded in other net fair value gains. The yield on reverse loans and mortgage loans associated with the Non-Residual Trusts includes recognition of contractual interest income based on the stated interest rates of the loans that is expected to be collected, as well as the accretion of fair value.

Charged-off loans represent a portfolio of defaulted consumer and residential loans which were acquired at substantial discounts to face value. Charged-off loans are consumers' unpaid financial commitments and include residential mortgage loans, auto loans and other unsecured consumer loans. The accretion of fair value associated with charged-off loans, along with any change in fair value, is recorded in other revenues on the consolidated statements of comprehensive income (loss). There is no contractual interest income recognized in relation to charged-off loans.

Purchases and originations of and payments received on residential loans held for investment are included in investing activities on the consolidated statements of cash flows.

Residential Loans Held for Sale

Residential loans held for sale represent mortgage loans originated or acquired by the Company with the intent to sell. These loans are originated or acquired primarily for purposes of selling into the secondary market or to private investors as whole loans with servicing rights either retained or sold. The Company has elected to carry mortgage loans held for sale at fair value. The yield on the loans and any change in fair value are recorded in net gains on sales of loans on the consolidated statements of comprehensive income (loss). The yield on the loans includes recognition of interest income based on the stated interest rates of the loans that are expected to be collected, as well as the accretion of fair value. Gains or losses recognized upon sale of residential loans held for sale are also included in net gains on sales of loans on the consolidated statements of comprehensive income (loss). Loan origination fees are recorded in other revenues within the consolidated statements of comprehensive income (loss) when earned and related costs are recognized in general and administrative expenses when incurred. All activity related to residential loans held for sale are included in operating activities on the consolidated statements of cash flows.

The Company’s agreements with GSEs and other third parties include standard representations and warranties related to the loans the Company sells. The representations and warranties require adherence to origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. Breaches of representations and warranties, with the exception of certain loans originated under HARP, are generally enforceable at any time over the life of the loan. If the Company is unable to cure such breach, the purchaser of the loan may require the Company to repurchase such loan for the unpaid principle balance, accrued interest, and related advances, and in any event, the Company must indemnify such purchaser for certain losses and expenses incurred by such purchaser in connection with such breach. In the case the Company repurchases the loan, the Company bears any subsequent credit loss on the loan. The Company’s credit loss may be reduced by any recourse it has to correspondent lenders that, in turn, have sold such residential loans to the Company and breached similar or other representations and warranties. In such event, the Company has the right to seek a recovery of related repurchase losses from that correspondent lender. The Company actively contests claims to the extent that the Company does not consider the claims to be valid. The Company seeks to manage the risk of repurchase and associated credit exposure through the Company's underwriting and quality assurance practices.

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The Company records a provision for losses relating to such representations and warranties as part of its loan sale transactions at the time the loan is sold in accordance with the accounting guidance for guarantees. The provision is a reduction in the net gains on sales of loans on the consolidated statements of comprehensive income (loss). The method used to estimate the liability for representations and warranties is a function of the representations and warranties given and considers a combination of factors, including, but not limited to, historical defect rates, projected repurchase rates, projected resale values, and the probability of reimbursement by the correspondent loan seller. The liability, which is recorded in payables and accrued liabilities on the consolidated balance sheets, is updated based on changes in estimates, with those changes recorded as a component of general and administrative expenses on the consolidated statements of comprehensive income (loss). The level of the liability for representations and warranties requires considerable management judgment. The level of residential loan repurchase losses is dependent on economic factors and external conditions that may change over the lives of the underlying loans.

Receivables Related to Non-Residual Trusts

Receivables related to Non-Residual Trusts, which are recorded in receivables, net on the consolidated balance sheets, consist of the estimated fair value of expected future draws on LOCs from a third party. The LOCs are credit enhancements to the Non-Residual Trusts. The cash flows received from the LOC draws are paid directly to the underlying securitization trusts and are used to pay bondholders of these securitizations for shortfalls in principal and interest collections on the loans in the securitizations. The Company has elected to carry these receivables at fair value. Changes in fair value are recorded in other net fair value gains on the consolidated statements of comprehensive income (loss).

Servicing Operations

Servicing Rights, Net

Capitalized servicing rights include rights associated with servicing and sub-servicing contracts acquired in connection with business combinations and servicing rights acquired through the purchase of such rights from third parties or through the sale of loans with servicing rights retained. At initial recognition, the fair value of the servicing right is established using assumptions consistent with those used to establish the fair value of existing servicing rights.

A servicing or sub-servicing asset (or liability) is recognized on the consolidated balance sheets when the benefits of servicing are deemed to be greater (or lower) than adequate compensation for the servicing activities performed by the Company. No servicing or sub-servicing asset or liability is recorded if the amounts earned represent adequate compensation. Generally, no servicing asset or liability is recognized when the Company enters into new sub-servicing contracts; however, previously existing contracts acquired in a business combination may be deemed to provide greater (or lower) than adequate compensation.

Subsequent to acquisition, servicing rights (or liabilities) are accounted for using the amortization method or the fair value measurement method, based on the Company’s strategy for managing the risks of the underlying portfolios. Risks inherent in servicing rights include prepayment and interest rate risks.

The Company identifies classes of servicing rights based upon the availability of market inputs used in determining fair value and its available risk management strategies associated with the servicing rights. Based upon these criteria, the Company has identified three classes of servicing rights: a risk-managed loan class, a mortgage loan class, and a reverse loan class. The risk-managed loan class includes loan portfolios for which the Company may apply a hedging strategy in the future. For servicing assets associated with the risk-managed loan class, which are accounted for at fair value, the Company measures the fair value at each reporting date and records changes in fair value in net servicing revenue and fees on the consolidated statements of comprehensive income (loss).

Servicing rights associated with the mortgage loan class and the reverse loan class are amortized based on expected cash flows in proportion to and over the life of servicing revenue. Amortization is recorded as an adjustment to net servicing revenue and fees on the consolidated statements of comprehensive income (loss). Servicing assets (or liabilities) are stratified by product type and compared to the estimated fair value on a quarterly basis. Impairment (or an increased obligation) is recognized through a valuation allowance for each stratum. The valuation allowance is adjusted to reflect the amount, if any, by which the carrying value of the servicing rights for a given stratum exceeds (or in the case of servicing liabilities, is lower than) its fair value. Any fair value in excess of (or in the case of servicing liabilities, lower than) the carrying value for a given stratum is not recognized. The Company recognizes a direct impairment to the servicing asset or liability when the valuation allowance is determined to be unrecoverable.

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Net Servicing Revenue and Fees

Servicing revenue and fees consists of income from the Company’s third-party servicing portfolio which includes loans associated with arrangements in which the Company owns the servicing rights or acts as sub-servicer. Servicing revenue and fees includes contractual servicing fees, incentive and performance fees, and ancillary income. Contractual servicing fees related to arrangements in which the Company owns the servicing rights are generally based on a percentage of the unpaid principal balance of the related collateral and are recorded when earned, which is generally upon collection of payments from borrowers. Contractual servicing fees related to arrangements in which the Company acts as sub-servicer are generally based on a fixed dollar amount per loan and are accrued in the period the services are performed. Incentive and performance fees include fees based on the performance of specific portfolios or loans, asset recovery income, and modification fees. Fees based on the performance of specific portfolios or loans are recognized when earned based on the terms of the various servicing and incentive agreements. Asset recovery income is generally recognized upon collection. Certain other incentive fees are recognized when determinable, which is when the Company is officially notified of the amount of such fees. Ancillary income includes late fees, prepayment fees, and collection fees and is generally recognized upon collection. Servicing revenue and fees are adjusted for the amortization of servicing rights carried at amortized cost, the change in fair value of servicing rights carried at fair value and the change in fair value of servicing rights related liabilities.

Servicer and Protective Advances, Net

In the ordinary course of servicing residential loans and pursuant to certain servicing agreements, the Company may advance the principal and interest portion of delinquent mortgage payments to credit owners prior to the collection of such amounts from borrowers, provided that the Company determines these advances are recoverable from either the borrower or the liquidation of collateral. In addition, the Company is required under certain servicing contracts to ensure that property taxes, insurance premiums, foreclosure costs and various other items are paid in order to preserve the assets being serviced. Generally, the Company recovers such advances from borrowers for reinstated or performing loans, from proceeds of liquidation of collateral or ultimate disposition of the loan, from credit owners or from loan insurers. Certain of the Company’s servicing agreements provide that repayment of servicing advances made under the respective agreements have a priority over all other cash payments to be made from the proceeds of the residential loan, and in certain cases the proceeds of the pool of residential loans, which are the subject of that servicing agreement. As a result, the Company is entitled to repayment from loan proceeds before any interest or principal is paid to the bondholders, and in certain cases, advances in excess of loan proceeds may be recovered from pool-level proceeds. These assets are carried at cost, net of estimated losses. Losses can occur in the normal course of servicing loans when the Company fails to make advances in accordance with investor guidelines including filing claims timely, requesting approvals, or advancing outside of guidelines. The Company establishes an allowance for uncollectible advances based on an analysis of the underlying loans, their historical loss experience, and recoverability pursuant to the terms of underlying servicing agreements. Generally, estimated losses related to advances are recorded in general and administrative expenses on the consolidated statements of comprehensive income (loss).

Custodial Accounts

In connection with its servicing activities, the Company has a fiduciary responsibility for amounts primarily related to borrower escrow funds and other custodial funds due to credit owners aggregating $3.8 billion and $3.5 billion at December 31, 2015 and 2014 , respectively. These funds, which do not represent assets or liabilities of the Company, are maintained in segregated bank accounts, and accordingly, are not reflected on the consolidated balance sheets.

Goodwill

Goodwill represents the excess of the consideration paid in a business combination over the fair value of the identifiable net assets acquired. The Company tests goodwill for impairment at the reporting unit level at least annually or whenever events or circumstances indicate that the carrying value of goodwill may not be recoverable from future cash flows. The Company has the option of performing a qualitative assessment of impairment to determine whether any further quantitative testing for impairment is necessary. If the Company elects to bypass the qualitative assessment or if it determines, based on qualitative factors, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a two-step quantitative test is required. In Step 1, the Company compares the fair value of the reporting unit with its net carrying value, including goodwill. If the net carrying value of the reporting unit exceeds its fair value, the Company then performs Step 2 of the impairment test to measure the amount of impairment loss, if any. In Step 2, the Company allocates the reporting unit’s fair value to all of its assets and liabilities in a manner similar to a purchase price allocation, with any residual fair value allocated to goodwill (implied fair value of goodwill). If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of such goodwill, the Company recognizes an impairment loss in an amount equal to that excess up to the carrying value of goodwill. In performing the two-step quantitative assessment, fair value of the reporting unit is based on discounted cash flows, market multiples, and/or appraised values, as appropriate.

The Company completed its annual goodwill impairment test effective October 1, 2015 . Refer to Note 13 for further information.

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Intangible Assets, Net

Intangible assets primarily consists of customer relationships and institutional relationships. Intangible assets are amortized using either an economic consumption method or a straight-line method over their related expected useful lives. Intangible assets subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An asset is considered to be impaired when the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposition does not exceed its carrying amount. The amount of the impairment loss, if any, is measured as the amount by which the carrying value of the asset exceeds its fair value.

Premises and Equipment, Net

Premises and equipment, net is stated at cost less accumulated depreciation and amortization. Depreciation and amortization is recorded on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements and assets under capital leases are amortized over the lesser of the remaining term of the lease or the useful life of the leased asset. Costs to internally develop computer software are capitalized during the application development stage and include external direct costs of materials and services as well as employee costs directly associated with the project during the capitalization period. Premises and equipment are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An asset is considered to be impaired when the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposition does not exceed its carrying amount. The amount of the impairment loss, if any, is measured as the amount by which the carrying value of the asset exceeds its fair value.

Derivatives

The Company enters into commitments to originate and purchase mortgage loans at interest rates that are determined prior to the funding or purchase of the loan. These commitments are referred to as IRLCs. IRLCs are considered freestanding derivatives and are recorded at fair value at inception. Changes in fair value subsequent to inception are based on changes in the fair value of the underlying loan, and changes in the probability that the loan will fund within the terms of the commitment.

The Company uses derivative financial instruments, primarily forward sales commitments, to manage exposure to interest rate risk and changes in the fair value of IRLCs and mortgage loans held for sale. The Company may also enter into commitments to purchase MBS as part of its overall hedging strategy. The Company has elected not to designate these freestanding derivatives as hedging instruments under GAAP.

The fair value of freestanding derivatives is recorded in other assets or payables and accrued liabilities on the consolidated balance sheets with changes in the fair values included in net gains on sales of loans on the consolidated statements of comprehensive income (loss). Cash flows related to freestanding derivatives are included in operating activities on the consolidated statements of cash flows.

In connection with forward sales commitments and MBS purchase commitments, the Company has margin agreements with its counterparties whereby both parties are required to post cash margin in the event the fair values of the derivative financial instruments meet or exceed established thresholds and minimum transfer amounts. This process substantially mitigates counterparty credit risk. The right to receive cash margin placed by the Company with its counterparties is included in other assets, and the obligation to return cash margin received by the Company from its counterparties is included in payables and accrued liabilities on the consolidated balance sheets. The Company has elected to record derivative assets and liabilities and related cash margin on a gross basis, even when a legally enforceable master netting arrangement exists between the Company and the derivative counterparty.

The derivative transactions described above are measured in terms of the notional amount. With the exception of IRLCs, the notional amount is generally not exchanged and is used only as a basis on which interest and other payments are determined.

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Real Estate Owned, Net

Real estate owned, net is included in other assets on the consolidated balance sheets, and represents properties acquired in satisfaction of residential loans. Upon foreclosure, or when the Company otherwise takes possession of the property, real estate owned is recorded at the lower of cost or estimated fair value less estimated costs to sell. The excess of cost over the fair value of the property acquired less estimated costs to sell, or net realizable value, is charged to the allowance for loan losses for residential loans carried at amortized cost, to other net fair value gains for mortgage loans carried at fair value, and to net fair value gains on reverse loans and related HMBS obligations for reverse loans. The fair value of the property is generally based upon historical resale recovery rates and current market conditions or appraisals. Subsequent declines in the value of real estate owned are recorded as adjustments to the carrying amount through a valuation allowance and are recorded in other expenses, net on the consolidated statements of comprehensive income (loss). Losses from the sale of real estate owned associated with reverse loans are typically covered by FHA insurance, the benefit of which is considered in the net realizable value estimate. To the extent these losses are not covered by the FHA insurance, they are recognized in other expenses, net on the consolidated statements of comprehensive income (loss) when incurred. Costs relating to the improvement of the property are capitalized to the extent the balance does not exceed its fair value, whereas those costs relating to maintaining the property are recorded when incurred to other expenses, net on the consolidated statements of comprehensive income (loss).

The Company may finance the sale of its real estate owned for the portfolio associated with the Residual Trusts. Revenue from the sale of real estate owned is recognized by the full accrual method when the specific criteria for use of this method are met. However, frequently, the requirement for a minimum 5% initial cash investment for primary residences is not met. When this is the case, losses are recognized immediately while gains are deferred and recognized by the installment method until the borrower’s initial investment reaches the minimum 5% requirement. Once the borrower’s initial investment reaches the minimum required amount, revenue is recognized by the full accrual method. Gains and losses on the sale of real estate owned are charged to other expenses, net on the consolidated statements of comprehensive income (loss) when incurred.

Insurance Operations

The Company earns commission revenue on voluntary insurance provided for residential loan borrowers and lender-placed hazard insurance for borrowers and credit owners, if permitted under applicable laws and regulations. Commission revenue is recognized when the earnings process has been completed, which is the effective date of the insurance policy, and collectability is reasonably assured. As customers generally pay their premiums in installments over the life of the policies, the Company records an insurance premium receivable and a corresponding payable to insurance carrier, net of commission, which are included on the consolidated balance sheets in receivables, net and payables and accrued liabilities, respectively. At the time commission revenue is recognized, the Company can reliably estimate expected policy cancellations and records a reserve for cancellations, which is estimated based on historical experience adjusted for known events or circumstances. The reserve for policy cancellations is evaluated on a quarterly basis and adjusted to reflect current estimates.

Servicer Payables

Servicer payables represent amounts collected that are required to be remitted to third-party trusts, credit owners, or others. These collections are primarily from borrowers whose loans the Company services.

Servicing Rights Related Liabilities

Servicing rights related liabilities consists of excess servicing spread liabilities and a servicing rights financing, as discussed below.

Excess Servicing Spread Liabilities

The Company recognized the proceeds from the sales to WCO of beneficial interests in certain portions of the contractual servicing fees associated with certain mortgage loans serviced by the Company as financing arrangements. The beneficial interest is referred to as excess servicing spread. The Company elected to record the excess servicing spread liabilities at fair value consistent with the related servicing rights. The change in fair value of the excess servicing spread liabilities is recorded in net servicing revenue and fees on the consolidated statements of comprehensive income (loss). The change in fair value of the excess servicing spread liabilities includes the accretion of fair value, which is recorded using the effective interest method based on the expected cash flows from the excess servicing spreads through the expected life of the underlying loans. There is no contractual interest rate on excess servicing spread liabilities.

Servicing Rights Financing

From time to time, the Company will enter into certain transactions to sell certain servicing rights. The Company evaluates these transactions to determine if they are sales or structured financing arrangements. When these transfers qualify for sale treatment, the Company derecognizes the transferred assets on its consolidated balance sheets.

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The Company has determined that not all risk of rewards and ownership were passed to WCO upon a sale of servicing rights. As a result, the Company accounted for such sale of servicing rights as a secured borrowing. Under this accounting treatment, the servicing rights remain on the consolidated balance sheets and the proceeds from the sale of the servicing rights are recognized as a servicing rights financing. The Company elected to record the servicing rights financing at fair value consistent with the related servicing rights. The change in fair value of the servicing rights financing is recorded in net servicing revenue and fees on the consolidated statements of comprehensive income (loss). The change in fair value of the servicing rights financing includes the accretion of fair value, which is recorded using the effective interest method based on the expected cash flows from the servicing rights through the expected life of the underlying loans. There is no contractual interest rate on servicing rights related financing. Proceeds from the sale of these servicing rights and payments on the servicing rights financing are included in financing activities on the consolidated statements of cash flows.

Debt and Other Obligations

Servicing advance liabilities, warehouse borrowings and corporate debt and are carried at amortized cost, and in the case of servicing advance liabilities relating to term notes and corporate debt, net of discounts and debt issuance costs. Deferred debt issuance costs associated with servicing advance liabilities with line-of-credit arrangements, warehouse borrowings and the 2013 Revolver are recorded in other assets on the consolidated balance sheets. Deferred debt issuance costs and original issue discounts, if any, are amortized to interest expense over the term of the debt or obligation using either the effective interest method or the straight-line method.

Mortgage-Backed Debt

The Company’s mortgage-backed debt associated with the Residual Trusts is carried at amortized cost, net of discounts and deferred debt issuance costs. These costs and original issue discounts, if any, are amortized to interest expense over the term of the debt using the effective interest method. The Company elected to carry mortgage-backed debt related to the Non-Residual Trusts at fair value. The yield on the mortgage-backed debt along with any change in fair value is recorded in other net fair value gains on the consolidated statements of comprehensive income (loss). The yield on the mortgage-backed debt includes recognition of interest expense based on the stated interest rates of the mortgage-backed debt, as well as the accretion of fair value.

HMBS Related Obligations

The Company recognizes the proceeds from the transfer of HMBS as a secured borrowing. The Company elected to record the secured borrowing, or the HMBS related obligations, at fair value. The yield on the HMBS related obligations along with any change in fair value is recorded in net fair value gains on reverse loans and related HMBS obligations on the consolidated statements of comprehensive income (loss). The yield on the HMBS obligations includes recognition of contractual interest expense based on the stated interest rates of the HMBS obligations, as well as the accretion of fair value. Proceeds from securitizations of reverse loans and payments on HMBS related obligations are included in financing activities on the consolidated statements of cash flows.

Other Revenues

Other revenues for the year ended December 31, 2014 include $36.8 million in asset management performance fees collected and earned in connection with the asset management of a fund. These asset management performance fees were earned in connection with the liquidation of the fund’s investments during the period and were based on the fund performance exceeding pre-defined thresholds. The Company records the asset management performance fees when the fund is terminated or when the likelihood of claw-back is improbable. These fees are recorded in the Other non-reportable segment.

Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates for the periods in which the differences are expected to reverse. The change in deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period of the change.

Periodic reviews of the carrying amount of deferred tax assets are made to determine if the establishment of a valuation allowance is necessary. A valuation allowance is required when it is more likely than not that all or a portion of a deferred tax asset will not be realized. All evidence, both positive and negative, is evaluated when making this determination. Items considered in this analysis include the ability to carry back losses to recoup taxes previously paid, the reversal of temporary differences, tax planning strategies, historical financial performance, expectations of future earnings, and the length of statutory carryforward periods. Significant judgment is required in assessing future earnings trends and the timing of reversals of temporary differences.

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The Company assesses its tax positions for all open tax years and determines whether it has any material unrecognized liabilities in accordance with the guidance on accounting for uncertain tax positions. The Company records interest and penalties on uncertain tax positions in income tax expense and general and administrative expenses, respectively, on the consolidated statements of comprehensive income (loss).

Share-Based Compensation

The Company has in effect stock incentive plans under which restricted stock, RSUs, performance shares and non-qualified stock options have been granted to employees and non-employee members of the Board of Directors. The Company estimates the fair value of share-based awards on the date of grant. The value of the award is generally recognized as an expense using the graded method over the requisite service period. The fair value of the Company’s restricted stock and RSUs is generally based on the average of the high and low market prices of its common stock on the date of grant. The Company estimates the fair value of performance shares and non-qualified stock options as of the date of grant using the Monte-Carlo simulation model and Black-Scholes option pricing model, respectively. These models consider, among other factors, the performance period or expected life of the award, the expected volatility of the Company’s stock price, and expected dividends. The Company records share-based compensation expense in salaries and benefits expense on the consolidated statements of comprehensive income (loss).

Advertising Costs

Advertising costs are expensed as incurred and are included in general and administrative expenses on the consolidated statements of comprehensive income (loss). For the years ended December 31, 2015 , 2014 and 2013 , advertising expense amounted to $44.5 million , $31.2 million and $23.3 million , respectively.

Basic and Diluted Earnings (Loss) Per Share

The Company uses the two-class method to determine earnings per share. Outstanding share-based payment awards that include non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities and are included in the calculation of basic earnings per common share pursuant to the two-class method. The Company’s participating securities are comprised of RSUs. Under the two-class method, net income is reduced by the amount of dividends declared in the period for common stock and participating securities. The remaining undistributed earnings are then allocated to common stock and participating securities as if all of the net income for the period had been distributed. Basic earnings per share excludes dilution and is calculated by dividing net income allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income allocable to common shares by the weighted-average number of common shares for the period, as adjusted for the potential dilutive effect of non-participating share-based awards and convertible debt, based on the treasury method. The Company uses the treasury method to compute the dilutive effect of convertible debt based on its intention to settle all conversions through combination settlement, which involves repayment of an amount of cash equal to the principal amount of convertible debt and any excess of conversion value over the principal amount of convertible debt in shares of common stock. During periods of net loss, diluted loss per share is equal to basic loss per share as the antidilutive effect of non-participating share-based awards and convertible debt is disregarded. No effect is given to participating securities in the computation of basic and diluted loss per share as these securities do not share in the losses of the Company.

Contingencies

The Company evaluates contingencies based on information currently available and establishes accruals for those matters when a loss contingency is considered probable and the related amount is reasonably estimable. For matters where a loss is believed to be reasonably possible but not probable, no accrual is established but the nature of the loss contingency and an estimate of the reasonably possible range of loss in excess of amounts accrued, when such estimate can be made, is disclosed. In deriving an estimate, the Company is required to make assumptions about matters that are, by their nature, highly uncertain. The assessment of loss contingencies, including legal contingencies and curtailment obligations, involves the use of critical estimates, assumptions and judgments. Whenever practicable, the Company consults with outside experts, including legal counsel and consultants, to assist with the gathering and evaluation of information related to contingent liabilities. It is not possible to predict or determine the outcome of all loss contingencies. Accruals are periodically reviewed and may be adjusted as circumstances change.

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3. Acquisitions

EverBank Net Assets

On October 30, 2013, the Company entered into a series of definitive agreements to purchase (i) certain private and GSE-backed MSRs and related servicer advances, (ii) sub-servicing rights for mortgage loans and (iii) a default servicing platform from EverBank. The agreements called for an estimated total purchase price of (i) $83.4 million for the MSRs, less net cash flows received on the underlying loans between October 30, 2013 and the date of legal transfer; (ii) par value of the related servicer advances; and (iii) $1.9 million associated with the default servicing platform. The Company paid $16.7 million of the estimated purchase price on October 30, 2013.

During March 2014, the Company received approvals to transfer MSRs and sub-servicing rights with an unpaid principal balance of approximately $16.5 billion . Accordingly, the Company paid an additional $44.7 million of the estimated purchase price and recorded MSRs at fair value of $58.7 million . The Company completed the transfer of the loans underlying the acquired MSRs onto the Company’s servicing systems and concurrently took possession of the associated servicer advances, resulting in additional payments by the Company of $5.1 million and $152.5 million during the years ended December 31, 2015 and 2014, respectively. The remainder of the purchase price is recorded in payables and accrued liabilities on the consolidated balance sheet at December 31, 2015.

The Company accounted for this series of transactions as a business combination upon closing of the default servicing platform which occurred on May 1, 2014. As the acquired assets and assumed liabilities transferred at several dates, acquired assets and assumed liabilities for approved transactions were recorded on the dates the transfers to the Company occurred. In connection with the acquisition, the Company acquired $223.7 million in assets and assumed $0.9 million in payables and accrued liabilities. The assets acquired included $163.2 million in servicer and protective advances and $58.7 million in servicing rights. The EverBank net assets have been allocated to the Servicing segment. The addition of EverBank's default servicing platform and employees to the Company's existing platform augmented both the Company's product capabilities and capacity, as well as extended its geographic diversity.

Pool of Fannie Mae MSRs

On December 10, 2013, the Company entered into an agreement with an affiliate of a national bank to acquire a pool of Fannie Mae MSRs and related servicer advances for an estimated purchase price of $330.0 million for the MSRs, less net cash flows received on the underlying loans between December 10, 2013 and the date of legal transfer. During the three months ended March 31, 2014, the Company completed the acquisition upon receipt of credit owner approval to transfer servicing, at which time the unpaid principal balance of the loans was $27.6 billion . The Company paid $3.2 million , $161.8 million and $165.0 million of the purchase price during the years ended December 31, 2015, 2014 and 2013, respectively. The Company accounted for this transaction as an asset purchase.

ResCap Net Assets

On January 31, 2013 , the Company (i) acquired the assets and assumed the liabilities relating to all of ResCap’s Fannie Mae MSRs and related servicer advances, and (ii) acquired ResCap’s mortgage originations and capital markets platforms, collectively referred to as the ResCap net assets, for an adjusted purchase price of $479.2 million . At closing, the ResCap Fannie Mae MSRs were associated with loans totaling $42.3 billion in unpaid principal balance. The Company made cash payments of $15.0 million in the fourth quarter of 2012 and $477.0 million on January 31, 2013. The Company was refunded $12.8 million for cash paid in excess of the adjusted purchase price during the fourth quarter of 2014. In connection with the acquisition, the Company acquired $491.4 million in assets and assumed $12.2 million in liabilities. The assets acquired included $175.1 million in servicer and protective advances, $242.6 million in servicing rights, $47.6 million in goodwill and $25.1 million in intangible assets and capitalized software. The ResCap net assets were allocated to the Servicing and Originations segments. Goodwill acquired was allocated in its entirety to the Originations segment. The acquisition of the ResCap net assets provided the Company with a fully integrated originations platform to complement and enhance its servicing business. The Company accounted for this transaction as a business combination.

Ally Bank Net Assets

On March 1, 2013 , the Company acquired the correspondent lending and wholesale broker businesses of Ally Bank for a cash payment of $0.1 million . In connection with the acquisition, the Company acquired $1.5 million in assets, primarily including $1.2 million in intangible assets and $0.1 million in goodwill, and assumed $1.4 million in payables and accrued liabilities. The Ally Bank net assets were allocated to the Originations segment. The acquisition of the Ally Bank net assets has allowed the Company to pursue correspondent lending opportunities using the capabilities resident in the ResCap originations platform. This acquisition was accounted for as a business combination.

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The Company incurred acquisition-related expenses to acquire the ResCap net assets and the Ally Bank net assets of $3.0 million during the year ended December 31, 2013, which were included in general and administrative expenses on the consolidated statement of comprehensive income.

Bank of America Asset Purchase

On January 31, 2013, the Company purchased Fannie Mae MSRs from BOA for total consideration of $495.7 million , all of which was paid as of December 31, 2013. At closing, the Fannie Mae MSRs were associated with loans totaling $84.4 billion in unpaid principal balance. As part of the asset purchase agreement, BOA provided sub-servicing on an interim basis while the loan servicing was transferred in tranches to the Company’s servicing systems. As each tranche was boarded, the Company was also obligated to purchase the related servicer advances associated with the boarded loans. The Company purchased $740.7 million of servicer advances as part of the asset purchase agreement. All servicing transfers were completed by December 2013, at which time BOA ceased to be the sub-servicer.

4. Variable Interest Entities

Consolidated Variable Interest Entities

Residual Trusts

The Company evaluates each securitization trust that funded its residential loan portfolio to determine if it meets the definition of a VIE, and whether or not the Company is required to consolidate the trust. The Company determined that it is the primary beneficiary of five (previously twelve ) securitization trusts in which it owns residual interests, and as a result, has consolidated these trusts. As a holder of the residual securities issued by the trusts, the Company has both the obligation to absorb losses to the extent of its investment and the right to receive benefits from the trusts, both of which could potentially be significant to the trusts. In addition, as the servicer for these trusts, the Company concluded it has the power to direct the activities that most significantly impact the economic performance of the trusts through its ability to manage the delinquent assets of the trusts. Specifically, the Company has discretion, subject to applicable contractual provisions and consistent with prudent mortgage-servicing practices, to decide whether to sell or work out any loans that become troubled.

The Company is not contractually required to provide any financial support to the Residual Trusts. The Company may, from time to time at its sole discretion, purchase certain assets or cover certain expenses for the trusts to cure delinquency or loss triggers for the sole purpose of releasing excess overcollateralization to the Company. Other than potentially acquiring assets for such purpose, based on current performance trends, the Company does not expect to provide financial support to the Residual Trusts.

In April 2015, the Company sold its residual interests in seven of the Residual Trusts that it previously consolidated for $189.5 million in cash proceeds. Upon the sale of the residual interests, the Company determined that it was no longer required to consolidate the seven trusts as it was no longer the primary beneficiary of these trusts since (i) it did not hold the residual securities issued by the trusts and therefore had no obligation to absorb future losses to the extent of its investment and no right to receive future benefits from the trust, both of which could potentially be significant to the trusts, and (ii) it is adequately compensated and its role as servicer is of a fiduciary nature. In conjunction with the transaction, the Company deconsolidated the seven Residual Trusts and removed related assets of $783.9 million and liabilities of $588.5 million from its consolidated balance sheet and recorded servicing rights of $3.1 million . As a result of the sale the Company recorded a loss of $2.8 million which is recorded in other within other gains (losses) on the consolidated statements of comprehensive income (loss).

Non-Residual Trusts

The Company determined that it is the primary beneficiary of ten securitization trusts for which it does not own any residual interests. The Company does not receive economic benefit from the residential loans while the loans are held by the Non-Residual Trusts other than the servicing fees paid to the Company to service the loans. However, as part of a prior agreement to acquire the rights to service the loans in these securitization trusts, the Company has certain obligations to exercise mandatory clean-up calls for each of these trusts at their earliest exercisable dates, which is the date each loan pool falls to 10% of the original principal amount. The Company will take control of the remaining collateral in the trusts when these calls are exercised, thus the clean-up call is deemed a variable interest as the Company will be required, under this obligation, to absorb any losses of the trusts subsequent to these calls, which could potentially be significant to each trust. Additionally, as servicer of these trusts, the Company has concluded that it has the power to direct the activities that most significantly impact the economic performance of the trusts.

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The Company is not contractually required to provide any financial support to the Non-Residual Trusts. However, as described above, the Company is obligated to exercise the mandatory clean-up call obligations it assumed as part of the agreement to acquire the rights to service the loans in these trusts. The Company expects to call these securitizations beginning in 2017 and continuing through 2019 . The total outstanding balance of the residential loans expected to be called at the various respective call dates is $417.6 million at December 31, 2015 .

For seven of the ten Non-Residual Trusts and four securitization trusts that have not been consolidated, the Company, as part of an agreement to service the loans in all eleven trusts, also has an obligation to reimburse a third party for the final $165.0 million in LOCs, if drawn, which were issued to the eleven trusts by a third party as credit enhancements to these trusts. As the LOCs were provided as credit enhancements to these securitizations, the trusts will draw on these LOCs if there are insufficient cash flows from the underlying collateral to pay the bondholders. The total amount available on these LOCs for these trusts was $260.4 million and $265.2 million at December 31, 2015 and 2014 , respectively. Based on the Company’s estimates of the underlying performance of the collateral in these securitizations, the Company does not expect that the final $165.0 million will be drawn, and therefore, no liability for the fair value of this obligation has been recorded on the Company’s consolidated balance sheets; however, actual performance may differ from this estimate in the future. For further information on the four securitization trusts that have not been consolidated by the Company, refer to the Unconsolidated Variable Interest Entities section of this Note.

Servicer and Protective Advance Financing Facilities

The Company has interests in financing entities that acquire servicer and protective advances from certain wholly-owned subsidiaries. The financing subsidiaries are deemed to be VIEs due to the design of the entities including restrictions on its operating activities. The Company is the primary beneficiary of these financing subsidiaries and, accordingly, consolidates the financing subsidiaries. The subsidiaries issue or enter into debt supported by collections on the transferred advances. Refer to Note 17 for additional information.

Included in the tables below are summaries of the carrying amounts of the assets and liabilities of consolidated VIEs (in thousands):



	December 31, 2015
	Residual Trusts		Non-Residual Trusts		Servicer and Protective Advance Financing Facilities		Total
Assets
Restricted cash and cash equivalents	$	13,369	$	11,388	$	34,948	$	59,705
Residential loans at amortized cost, net	500,563		—		—		500,563
Residential loans at fair value	—		526,016		—		526,016
Receivables at fair value	—		16,542		—		16,542
Servicer and protective advances, net	—		—		1,136,246		1,136,246
Other assets	9,357		558		2,255		12,170
Total assets	$	523,289	$	554,504	$	1,173,449	$	2,251,242

Liabilities
Payables and accrued liabilities	$	2,084	$	—	$	1,351	$	3,435
Servicing advance liabilities	—		—		992,769		992,769
Mortgage-backed debt	469,339		582,340		—		1,051,679
Total liabilities	$	471,423	$	582,340	$	994,120	$	2,047,883

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	December 31, 2014
	Residual Trusts		Non-Residual Trusts		Servicer and Protective Advance Financing Facilities		Total
Assets
Restricted cash and cash equivalents	$	41,632	$	12,710	$	51,635	$	105,977
Residential loans at amortized cost, net	1,292,781		—		—		1,292,781
Residential loans at fair value	—		586,433		—		586,433
Receivables at fair value	—		25,201		—		25,201
Servicer and protective advances, net	—		—		1,273,186		1,273,186
Other assets	30,126		1,023		3,418		34,567
Total assets	$	1,364,539	$	625,367	$	1,328,239	$	3,318,145

Liabilities
Payables and accrued liabilities	$	7,590	$	—	$	921	$	8,511
Servicing advance liabilities	—		—		1,160,257		1,160,257
Mortgage-backed debt	1,086,660		653,167		—		1,739,827
Total liabilities	$	1,094,250	$	653,167	$	1,161,178	$	2,908,595

The assets of the consolidated VIEs are pledged as collateral to the servicing advance liabilities and mortgage-backed debt and are not available to satisfy claims of general creditors of the Company. The mortgage-backed debt issued by each consolidated securitization trust is to be satisfied solely from the proceeds of the residential loans and other collateral held in the trusts while the servicing advance liabilities related to the trusts are to be satisfied from the recoveries or repayments from the underlying advances. The consolidated VIEs are not cross-collateralized and the holders of the mortgage-backed debt issued by the trusts and lenders under the servicer and protective financing facilities do not have recourse to the Company. Refer to Note 21 for additional information regarding the mortgage-backed debt and Note 17 for additional information regarding servicing advance liabilities.

For the Residual Trusts, interest income earned on the residential loans and interest expense incurred on the mortgage-backed debt, both of which are carried at amortized cost, are recorded on the consolidated statements of comprehensive income (loss) in interest income on loans and interest expense, respectively. Additionally, the Company records a provision for its estimate of probable incurred credit losses associated with the residential loans as provision for loan losses, which is included in other expenses, net on the consolidated statements of comprehensive income (loss). Interest receipts on residential loans and interest payments on mortgage-backed debt are included in operating activities, while principal payments on residential loans are included in investing activities and payments on mortgage-backed debt are included in financing activities on the consolidated statements of cash flows.

The change in fair value of the assets and liabilities of the Non-Residual Trusts are included in other net fair value gains on the consolidated statements of comprehensive income (loss). Included in other net fair value gains is the interest income that is expected to be collected on the residential loans, the interest expense that is expected to be paid on the mortgage-backed debt, as well as the accretion of fair value. The non-cash component of other net fair value gains is recognized as an adjustment in reconciling net income or loss to net cash provided by or used in operating activities on the consolidated statements of cash flows. Principal payments on residential loans and draws on receivables are included in investing activities while payments on mortgage-backed debt are included in financing activities on the consolidated statements of cash flows.

Interest expense associated with the servicer and protective advance financing facilities is included in interest expense on the consolidated statements of comprehensive income (loss). Changes in servicer and protective advances are included in operating activities while the issuances of and payments on servicing advance liabilities are included in financing activities on the consolidated statements of cash flows.

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Unconsolidated Variable Interest Entities

The Company has variable interests in VIEs that it does not consolidate as it has determined that it is not the primary beneficiary of the VIEs.

Servicing Arrangements with Letter of Credit Reimbursement Obligation

As part of an agreement to service the loans in eleven securitization trusts, the Company has an obligation to reimburse a third party for the final $165.0 million in LOCs if drawn. The LOCs were issued by a third party as credit enhancements to these eleven securitizations and, accordingly, the securitization trusts will draw on these LOCs if there are insufficient cash flows from the underlying collateral to pay the bondholders.

As noted above, the Company has determined that for seven of these securitization trusts, the Company is the primary beneficiary due to a mandatory clean-up call obligation related to these trusts and, accordingly, the Company has consolidated the seven trusts on the consolidated balance sheets. However, for the four remaining securitization trusts for which the Company does not have a mandatory clean-up call obligation, the Company’s involvement consists only of servicer and the LOC reimbursement obligation. As explained in the Consolidated VIEs section above, the Company does not expect that the final $165.0 million in LOCs will be drawn. As the Company’s only involvement is that of servicer and the LOC reimbursement obligation, which is not expected to be drawn, the Company has concluded that it is not the primary beneficiary of the trusts as it does not have a variable interest that could potentially be significant to the trusts. Accordingly, the four securitization trusts have not been consolidated on the Company’s consolidated balance sheets.

Other Servicing Arrangements

The Company is involved with other securitization trusts as servicer of the financial assets of the trusts. The Company’s servicing fees are anticipated to absorb more than an insignificant portion of the returns of the trusts and the Company has considered its contract to service the financial assets of the trusts a variable interest. Typically, the Company’s involvement as servicer allows it to control the activities of the trusts that most significantly impact the economic performance of the trusts; however, based on the nature of the trusts, the obligations to its beneficial interest holders are guaranteed. Further, the Company’s involvement as servicer is subject to substantive kick-out rights held by a single party, and there are no significant barriers to the exercise of those kick-out rights. As a result, the Company has determined that it is not the primary beneficiary of those trusts and those trusts are not consolidated on the Company’s balance sheets. The termination of the Company as servicer to the financial assets of the trusts would eliminate any future servicing revenues and related cash flows associated with the underlying financial assets held by the trusts.

Transactions with WCO

In April 2014, the Company and York entered into an agreement to contribute cash and other assets in exchange for 100% of the equity interests in WCO which was established to invest in mortgage-related assets. Under the agreement, the Company and York committed to contribute to WCO cash of $20.0 million and $200.0 million , respectively. In July 2014, the Company completed its initial funding of $7.1 million of the Company's total capital commitment of $20.0 million to WCO. In November 2015, the Company, WCO, WCO LP and the other investors in WCO entered into an agreement, pursuant to which, among other things, such other investors in WCO agreed to make, in aggregate, an additional $25.0 million capital commitment to WCO. After giving effect to such additional capital commitment, (i) the Company continued to have a $20.0 million capital commitment to WCO, and (ii) WCO had total capital commitments of $245.0 million . Further, in November 2015, the Company together with the other investors in WCO funded the remaining portion of the original $220.0 million of capital commitments. The Company's investment in WCO was $22.6 million and $6.5 million at December 31, 2015 and 2014, respectively. For the years ended December 31, 2015 and 2014, the Company recorded income of $0.6 million and $0.2 million , respectively, relating to its investment in WCO.

During the second quarter of 2015, the Company completed the contribution of 100% of the equity of Marix to WCO pursuant to the terms of an amended contribution agreement among the Company, WCO and certain other parties. Pursuant to such agreement and as consideration for such contribution, during the third quarter of 2015 the Company received 300,000 partnership common units in WCO LP following achievement by Marix of various post-contribution milestones, including purchase of its first MSR.

The Company’s subsidiary, GTIM, earns fees for providing investment advisory and management services to WCO and administering its business activities and day-to-day operations. During the years ended December 31, 2015 and 2014 , the Company earned $1.0 million and $0.3 million , respectively, in fees associated with these activities which are recorded in other revenues on the consolidated statements of comprehensive income (loss). The Company had $0.4 million and $0.1 million in receivables related to fees earned for investment advisory and management services provided to WCO included in receivables, net on the consolidated balance sheets at December 31, 2015 and 2014 , respectively.

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The Company, in exchange for a servicing fee, services certain assets held by WCO. The Company also has servicing rights related liabilities for the sales to WCO of beneficial interests in certain portions of contractual servicing fees associated with mortgage loans serviced by the Company as well as for the sale of servicing rights. The Company is engaged by WCO to offer refinancing options to borrowers with mortgage loans underlying the excess servicing spread and servicing rights transactions that occurred during the year ended December 31, 2015. In addition, the Company has a similar arrangement with WCO with respect to certain other servicing rights held by WCO. These arrangements were made for purposes of reducing portfolio runoff. Further, the Company entered into various other ancillary agreements with WCO pursuant to which, among other things, WCO has the right to make the first offer to purchase servicing rights relating to certain mortgage loans originated by the Company and certain excess servicing spread that the Company may create from time to time.

Refer to Note 12 and Note 19 for additional information on servicing and servicing rights related liabilities, respectively. WCO is not obligated to purchase excess servicing spread or servicing rights from the Company, and is not obligated to engage the Company to perform servicing activities; however, the Company anticipates that it will enter into additional arrangements of this nature with WCO in the future, subject to mutual agreement on the terms of any such arrangements.

WCO lacks sufficient equity at risk to finance its activities without subordinated financial support and as such is a VIE. WCO’s board of directors have decision making authority as it relates to the activities that most significantly impact the economic performance of WCO, including making decisions related to significant investments, servicing, capital and debt financing. As a result, the Company is not deemed to be the primary beneficiary of WCO as it does not have the power to direct the activities that most significantly impact WCO’s economic performance.

Type of Involvement in Unconsolidated Variable Interest Entities

The following table presents the carrying amounts of the Company’s assets and liabilities that relate to its variable interests in the VIEs that are not consolidated, as well as its maximum exposure to loss and the size of the unconsolidated VIEs (in thousands):



	Carrying Value of Assets and Liabilities Recorded on the Consolidated Balance Sheets																			Size of VIEs ⁽²⁾
Type of Involvement	Servicing Rights, Net		Servicer and Protective Advances, Net		Receivables, Net		Other Assets		Payables and Accrued Liabilities			Servicing Rights Related Liabilities			Net Assets (Liabilities)			Maximum Exposure to Loss ⁽¹⁾		Size of VIEs ⁽²⁾
VIEs associated with servicing arrangements
Servicing arrangements with a LOC reimbursement obligation
December 31, 2015	$	1,145	$	2,656	$	123	$	—	$	—		$	—		$	3,924		$	168,924	$	153,070
December 31, 2014	1,454		2,530		141		—		—			—			4,125			169,125		173,819
Other servicing arrangements
December 31, 2015	—		—		190		—		—			—			190			190		443,631
December 31, 2014	—		—		189		—		—			—			189			189		447,643
Transactions with WCO
December 31, 2015	16,889		7,015		9,814		23,578		(4,500		)	(117,000		)	(64,204		)	—		228,361
December 31, 2014	—		—		147		7,319		—			(66,311		)	(58,845		)	—		80,522

__________

(1)

The Company's maximum exposure to loss for VIEs equals the carrying value of assets recognized on the consolidated balance sheets, and in the case of arrangements with a LOC reimbursement obligation, also includes the obligation to reimburse a third party for the final $165.0 million drawn on LOCs discussed above. At December 31, 2015 and 2014, the Company has no exposure to loss as it relates to transactions with WCO as a result of its net liabilities due to WCO.


(2)	The size of unconsolidated VIEs is represented by the unpaid principal balance of loans serviced for VIEs associated with servicing arrangements. In the case of transactions with WCO, the size of the VIE is WCO's net assets.

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5. Transfers of Residential Loans

Sales of Mortgage Loans

As part of its originations activities, the Company sells substantially all of its originated or purchased mortgage loans into the secondary market for securitization or to private investors as whole loans. The Company sells conventional conforming and government-backed mortgage loans through GSE and agency-sponsored securitizations in which mortgage-backed securities are created and sold to third-party investors. The Company also sells non-conforming mortgage loans to private investors. The Company accounts for these transfers as sales, and in most, but not all, cases, retains the servicing rights associated with the sold loans. If the servicing rights are retained, the Company receives a servicing fee for servicing the sold loans, which represents continuing involvement. During the year ended December 31, 2015, 56% and 35% of all mortgage loans were purchased by Fannie Mae and Ginnie Mae, respectively, while the remaining 9% were primarily sold to Freddie Mac. During the years ended December 31, 2014 and 2013, substantially all of the mortgage loans sold were purchased by Fannie Mae.

Certain guarantees arise from agreements associated with the sale of the Company's residential loans. Under these agreements, the Company may be obligated to repurchase loans, or otherwise indemnify or reimburse the credit owner or insurer for losses incurred, due to material breach of contractual representations and warranties. Refer to Note 29 for further information.

The following table presents the carrying amounts of the Company’s assets that relate to its continued involvement with mortgage loans that have been sold with servicing rights retained and the unpaid principal balance of these sold loans (in thousands):



	Carrying Value of Assets Recorded on the Consolidated Balance Sheets						Unpaid Principal Balance of Sold Loans
	Servicing Rights, Net		Servicer and Protective Advances, Net		Total		Unpaid Principal Balance of Sold Loans
December 31, 2015	$	509,785	$	25,078	$	534,863	$	46,983,388
December 31, 2014	331,365		13,146		344,511		28,457,216

At December 31, 2015 and 2014 , 0.5% and 0.3% , respectively, of mortgage loans sold and serviced by the Company were 60 days or more past due.

The following table presents a summary of cash flows related to sales of mortgage loans (in thousands):



	For the Years Ended December 31,
	2015		2014		2013
Cash proceeds received from sales, net of fees	$	25,860,529	$	19,118,420	$	15,293,601
Servicing fees collected ⁽¹⁾	111,635		63,420		11,212
Repurchases of previously sold loans	14,636		8,186		—

__________


(1)	Represents servicing fees collected on all loans sold whereby the Company has continued involvement.

In connection with these sales, the Company recorded servicing rights using a fair value model that utilizes Level 3 unobservable inputs. Refer to Note 12 for information relating to servicing of residential loans.

Transfers of Reverse Loans

The Company, through RMS, is an approved issuer of Ginnie Mae HMBS. The HMBS are guaranteed by Ginnie Mae and collateralized by participation interests in HECMs insured by the FHA. The Company both originates and purchases HECMs that are pooled and securitized into HMBS that the Company sells into the secondary market with servicing rights retained. Based upon the structure of the Ginnie Mae securitization program, the Company has determined that it has not met all of the requirements for sale accounting and accounts for these transfers as secured borrowings. Under this accounting treatment, the reverse loans remain on the consolidated balance sheets as residential loans. The proceeds from the transfer of reverse loans are recorded as HMBS related obligations with no gain or loss recognized on the transfer. Ginnie Mae, as guarantor of the HMBS, is obligated to the holders of the HMBS in an instance of RMS default on its servicing obligations, or when the proceeds realized on HECMs are insufficient to repay all outstanding HMBS related obligations. Ginnie Mae has recourse to RMS to the extent of the participation interests in HECMs serving as collateral to the HMBS, but does not have recourse to the general assets of the Company, except that Ginnie Mae has recourse to RMS in connection with certain claims relating to the performance and obligations of RMS as both an issuer of HMBS and a servicer of HECMs underlying HMBS.

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At December 31, 2015 , the unpaid principal balance and the carrying value associated with both the reverse loans and the real estate owned pledged as collateral to the securitization pools were $10.0 billion and $10.6 billion , respectively.

6. Fair Value

Basis for Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A three-tier fair value hierarchy is used to prioritize the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:

Level 1 — Valuation is based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 — Valuation is based on quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 — Valuation is based on inputs that are both significant to the fair value measurement and unobservable.

The accounting guidance concerning fair value allows the Company to elect to measure financial instruments at fair value and report the changes in fair value through net income or loss. This election can only be made at certain specified dates and is irrevocable once made. Other than mortgage loans held for sale, which the Company has elected to measure at fair value, the Company does not have a fair value election policy, but rather makes the election on an instrument-by-instrument basis as assets and liabilities are acquired or incurred, other than for those assets and liabilities that are required to be recorded and subsequently measured at fair value.

Transfers into and out of the fair value hierarchy levels are assumed to be as of the end of the quarter in which the transfer occurred. There were no transfers between levels during the years ended December 31, 2015 and 2014 .

Items Measured at Fair Value on a Recurring Basis

The following table summarizes the assets and liabilities in each level of the fair value hierarchy (in thousands). There were no assets or liabilities measured at fair value on a recurring basis utilizing Level 1 assumptions.



	December 31,
	2015		2014
Level 2
Assets
Mortgage loans held for sale	$	1,334,300	$	1,124,615
Freestanding derivative instruments	6,993		7,751
Level 2 assets	$	1,341,293	$	1,132,366
Liabilities
Freestanding derivative instruments	$	5,405	$	29,761
Level 2 liabilities	$	5,405	$	29,761

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	December 31,
	2015		2014
Level 3
Assets
Reverse loans	$	10,763,816	$	10,064,365
Mortgage loans related to Non-Residual Trusts	526,016		586,433
Charged-off loans	49,307		57,217
Receivables related to Non-Residual Trusts	16,542		25,201
Servicing rights carried at fair value	1,682,016		1,599,541
Freestanding derivative instruments (IRLCs)	51,519		60,400
Level 3 assets	$	13,089,216	$	12,393,157
Liabilities
Freestanding derivative instruments (IRLCs)	$	1,070	$	263
Servicing rights related liabilities	117,000		66,311
Mortgage-backed debt related to Non-Residual Trusts	582,340		653,167
HMBS related obligations	10,647,382		9,951,895
Level 3 liabilities	$	11,347,792	$	10,671,636

The following assets and liabilities are measured on the consolidated balance sheets at fair value on a recurring basis utilizing significant unobservable inputs or Level 3 assumptions in their valuation. The following tables provide a reconciliation of the beginning and ending balances of these assets and liabilities (in thousands):



	For the Year Ended December 31, 2015
	Fair Value January 1, 2015			Total Gains (Losses) Included in Comprehensive Loss			Purchases		Sales			Originations / Issuances			Settlements			Fair Value December 31, 2015
Assets
Reverse loans ⁽¹⁾	$	10,064,365		$	202,494		$	762,657	$	(16,592	)	$	708,948		$	(958,056	)	$	10,763,816
Mortgage loans related to Non-Residual Trusts	586,433			41,643			—		—			—			(102,060		)	526,016
Charged-off loans ⁽²⁾	57,217			41,803			—		—			—			(49,713		)	49,307
Receivables related to Non-Residual Trusts	25,201			(1,178		)	—		—			—			(7,481		)	16,542
Servicing rights carried at fair value	1,599,541			(401,992		)	237,820		(60,094		)	306,741			—			1,682,016
Freestanding derivative instruments (IRLCs)	60,400			(8,281		)	—		—			—			(600		)	51,519
Total assets	$	12,393,157		$	(125,511	)	$	1,000,477	$	(76,686	)	$	1,015,689		$	(1,117,910	)	$	13,089,216

Liabilities
Freestanding derivative instruments (IRLCs)	$	(263	)	$	(807	)	$	—	$	—		$	—		$	—		$	(1,070	)
Servicing rights related liabilities	(66,311		)	(7,741		)	—		—			(64,593		)	21,645			(117,000		)
Mortgage-backed debt related to Non-Residual Trusts	(653,167		)	(33,142		)	—		—			—			103,969			(582,340		)
HMBS related obligations	(9,951,895		)	(104,327		)	—		—			(1,622,481		)	1,031,321			(10,647,382		)
Total liabilities	$	(10,671,636	)	$	(146,017	)	$	—	$	—		$	(1,687,074	)	$	1,156,935		$	(11,347,792	)

__________


(1)	During the year ended December 31, 2015, the Company sold $16.6 million in reverse loans and recognized $0.1 million in net losses on sales of loans.


(2)	Included in gains on charged-off loans are gains from instrument-specific credit risk of $18.5 million , which primarily result from changes in assumptions related to collection rates and discount rates.

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	For the Year Ended December 31, 2014
	Fair Value January 1, 2014			Acquisition of EverBank Net Assets		Total Gains (Losses) Included in Comprehensive Loss			Purchases		Sales			Originations / Issuances			Settlements			Fair Value December 31, 2014
Assets
Reverse loans	$	8,738,503		$	—	$	434,197		$	894,252	$	—		$	611,826		$	(614,413	)	$	10,064,365
Mortgage loans related to Non-Residual Trusts ⁽¹⁾	587,265			—		111,258			—		—			—			(112,090		)	586,433
Charged-off loans ⁽²⁾	—			—		22,501			64,548		—			—			(29,832		)	57,217
Receivables related to Non-Residual Trusts ⁽¹⁾	43,545			—		(8,873		)	—		—			—			(9,471		)	25,201
Servicing rights carried at fair value	1,131,124			58,680		(273,502		)	479,820		(10,866		)	214,285			—			1,599,541
Freestanding derivative instruments (IRLCs)	42,831			—		17,569			—		—			—			—			60,400
Total assets	$	10,543,268		$	58,680	$	303,150		$	1,438,620	$	(10,866	)	$	826,111		$	(765,806	)	$	12,393,157

Liabilities
Freestanding derivative instruments (IRLCs)	$	(3,755	)	$	—	$	3,492		$	—	$	—		$	—		$	—		$	(263	)
Servicing rights related liabilities	—			—		(2,800		)	—		—			(75,426		)	11,915			(66,311		)
Mortgage-backed debt related to Non-Residual Trusts ⁽¹⁾	(684,778		)	—		(82,253		)	—		—			—			113,864			(653,167		)
HMBS related obligations	(8,652,746		)	—		(324,225		)	—		—			(1,617,398		)	642,474			(9,951,895		)
Total liabilities	$	(9,341,279	)	$	—	$	(405,786	)	$	—	$	—		$	(1,692,824	)	$	768,253		$	(10,671,636	)

__________


(1)	Included in gains (losses) on mortgage loans, receivables and mortgage-backed debt related to Non-Residual Trusts are gains (losses) from instrument-specific credit risk of $62.1 million , $(8.1) million and $(35.4) million , respectively, due primarily from changes in assumptions related to the reduction of discount rates resulting from tightening of yields in the market.


(2)	Included in gains on charged-off loans are gains from instrument-specific credit risk of $7.6 million , which primarily result from changes in assumptions related to collection rates and discount rates.

Refer to Note 2 for the location within the consolidated statements of comprehensive income (loss) of the gains and losses resulting from changes in fair value of assets and liabilities disclosed above. Total gains and losses included above include interest income and interest expense at the stated rate for interest-bearing assets and liabilities, respectively, accretion and amortization, and the impact of the changes in valuation inputs and assumptions.

The Company’s Valuation Committee determines and approves valuation policies and unobservable inputs used to estimate the fair value of items measured at fair value on a recurring basis. The Valuation Committee, consisting of certain members of the senior executive management team, meets on a quarterly basis to review the assets and liabilities that require fair value measurement, including how each asset and liability has actually performed in comparison to the unobservable inputs and the projected performance provided by the Company’s Credit Risk Group. The Valuation Committee also reviews related available market data.

The following is a description of the methods used to estimate the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis, as well as the basis for classifying these assets and liabilities as Level 2 or 3 within the fair value hierarchy. The Company’s valuations consider assumptions that it believes a market participant would consider in valuing the assets and liabilities, the most significant of which are disclosed below. The Company reassesses and periodically adjusts the underlying inputs and assumptions used in the valuations for recent historical experience, as well as for current and expected relevant market conditions.

Residential loans

•

Reverse loans, mortgage loans related to Non-Residual Trusts and charged-off loans — These loans are not traded in an active, open market with readily observable prices. Accordingly, the Company estimates fair value using Level 3 unobservable market inputs. The estimated fair value is based on the net present value of projected cash flows over the estimated life of the loans. The discount rate assumption for these assets considers, as applicable, collateral and credit risk characteristics of the loans, collection rates, current market interest rates, expected duration, and current market yields.

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•	Mortgage loans held for sale — These loans are valued using a market approach by utilizing observable quoted market prices, where available, or prices for other whole loans with similar characteristics. The Company classifies these loans as Level 2 within the fair value hierarchy.

Receivables related to Non-Residual Trusts — The Company estimates the fair value of these receivables using the net present value of expected cash flows from the LOCs to be used to pay bondholders over the remaining life of the securitization trusts and applies Level 3 unobservable market inputs in its valuation. Receivables related to Non-Residual Trusts are recorded in receivables, net on the consolidated balance sheets.

Servicing rights carried at fair value — The Company accounts for servicing rights associated with the risk-managed loan class at fair value. The Company uses a discounted cash flow model to estimate the fair value of these assets. The assumptions utilized are based on collateral stratifications including product type, remittance type, geography, delinquency, and coupon dispersion of the underlying loan portfolio. The Company classifies servicing rights within Level 3 of the fair value hierarchy.

Freestanding derivative instruments — Fair values of IRLCs are derived using valuation models incorporating market pricing for instruments with similar characteristics and by estimating the fair value of the servicing rights expected to be recorded at sale of the loan. The fair values are then adjusted for anticipated loan funding probability. Both the fair value of servicing rights expected to be recorded at the date of sale of the loan and anticipated loan funding probability are significant unobservable inputs and, as a result, IRLCs are classified as Level 3 within the fair value hierarchy. The loan funding probability ratio represents the aggregate likelihood that loans currently in a lock position will ultimately close, which is largely dependent on the loan processing stage that a loan is currently in and changes in interest rates from the time of the rate lock through the time a loan is closed. IRLCs have positive fair value at inception and change in value as interest rates and loan funding probability change. Rising interest rates have a positive effect on the fair value of the servicing rights component of the IRLC fair value and increase the loan funding probability. An increase in loan funding probability (i.e., higher aggregate likelihood of loans estimated to close) will result in the fair value of the IRLC increasing if in a gain position, or decreasing, to a lower loss, if in a loss position. A significant increase (decrease) to the fair value of servicing rights component in isolation could result in a significantly higher (lower) fair value measurement.

The fair value of forward sales commitments and MBS purchase commitments is determined based on observed market pricing for similar instruments; therefore, these contracts are classified as Level 2 within the fair value hierarchy. Counterparty credit risk is taken into account when determining fair value, although the impact is diminished by daily margin posting on all forward sales and purchase commitments. Refer to Note 7 for additional information on freestanding derivative financial instruments.

Servicing rights related liabilities — The Company uses a discounted cash flow model used to estimate the fair value of both its excess servicing spread liabilities and its servicing rights financing. The assumptions utilized are based on collateral stratifications including product type, remittance type, geography, delinquency, and coupon dispersion of the underlying loan portfolio. The Company classifies its servicing rights related liabilities as Level 3 within the fair value hierarchy.

Mortgage-backed debt related to Non-Residual Trusts — This debt is not traded in an active, open market with readily observable prices. Accordingly, the Company estimates fair value using Level 3 unobservable market inputs. The estimated fair value of the debt is based on the net present value of the projected principal and interest payments owed for the estimated remaining life of the securitization trusts. An analysis of the credit assumptions for the underlying collateral in each of the securitization trusts is performed to determine the required payments to bondholders.

HMBS related obligations — These obligations are not traded in an active, open market with readily observable prices. Accordingly, the Company estimates fair value using Level 3 unobservable market inputs. The estimated fair value is based on the net present value of projected cash flows over the estimated life of the liabilities. The discount rate assumption for these liabilities is based on an assessment of current market yields for HMBS, expected duration, and current market interest rates. The yield on seasoned HMBS is adjusted based on the duration of each HMBS and assuming a constant spread to LIBOR.

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The following tables present the significant unobservable inputs used in the fair value measurement of the assets and liabilities described above. The Company utilizes a discounted cash flow model to estimate the fair value of all Level 3 assets and liabilities included on the consolidated financial statements at fair value on a recurring basis, with the exception of IRLCs for which the Company utilizes a market approach.

With the exception of IRLCs and collection rates associated with charged-off loans, significant increases (decreases) in any of the inputs related to assets disclosed below, in isolation, could result in a significantly lower (higher) fair value measurement. Significant increases (decreases) in any of the inputs related to liabilities, other than IRLCs, and collection rates on charged-off loans, as disclosed below, in isolation, could result in a significantly higher (lower) fair value measurement. The impact on fair value for increases and decreases to significant unobservable inputs related to IRLCs is discussed above.



		December 31, 2015			December 31, 2014
	Significant Unobservable Input ^{(1) (2)}	Range of Input ⁽³⁾	Weighted Average of Input ⁽³⁾		Range of Input ⁽³⁾	Weighted Average of Input ⁽³⁾
Assets
Reverse loans	Weighted-average remaining life in years	1.1 - 10.0	4.1		1.8 - 12.3	4.7
	Conditional repayment rate	13.53% - 52.94%	25.59	%	13.40% - 42.20%	21.68	%
	Discount rate	2.08% - 3.56%	2.84	%	2.00% - 3.65%	2.76	%
Mortgage loans related to Non-Residual Trusts	Conditional prepayment rate	2.67% - 4.66%	3.52	%	2.24% - 3.76%	3.17	%
	Conditional default rate	1.47% - 2.74%	2.05	%	1.68% - 3.51%	2.34	%
	Loss severity	73.07% - 95.88%	88.72	%	76.12% - 92.53%	85.88	%
	Discount rate	8.00%	8.00	%	8.00%	8.00	%
Charged-off loans	Collection rate	2.15% - 3.54%	2.23	%	2.34% - 4.53%	2.46	%
	Discount rate	28.00%	28.00	%	30.00% - 32.25%	30.19	%
Receivables related to Non-Residual Trusts	Conditional prepayment rate	1.93% - 3.62%	2.90	%	1.89% - 3.33%	2.72	%
	Conditional default rate	1.66% - 2.98%	2.30	%	1.92% - 3.81%	2.55	%
	Loss severity	70.33% - 93.46%	85.63	%	73.26% - 89.78%	82.87	%
	Discount rate	0.50%	0.50	%	0.50%	0.50	%
Servicing rights carried at fair value	Weighted-average remaining life in years	5.2 - 9.0	6.3		5.6 - 9.3	6.6
	Discount rate	10.00% - 14.34%	10.88	%	8.24% - 29.16%	9.55	%
	Conditional prepayment rate	6.07% - 13.15%	9.94	%	5.04% - 11.15%	7.87	%
	Conditional default rate	0.05% - 2.49%	1.06	%	0.28% - 3.53%	2.36	%
Interest rate lock commitments	Loan funding probability	2.34% - 100.00%	79.42	%	3.44% - 100.00%	77.45	%
	Fair value of initial servicing rights multiple ⁽⁴⁾	0.05 - 7.06	3.71		0.20 - 5.47	3.83

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		December 31, 2015			December 31, 2014
	Significant Unobservable Input ^{(1) (2)}	Range of Input ⁽³⁾	Weighted Average of Input ⁽³⁾		Range of Input ⁽³⁾	Weighted Average of Input ⁽³⁾
Liabilities
Interest rate lock commitments	Loan funding probability	38.00% - 100.00%	83.28	%	28.00% - 100.00%	80.90	%
	Fair value of initial servicing rights multiple ⁽⁴⁾	0.11 - 5.88	4.00		0.67 - 5.47	4.06
Servicing rights related liabilities	Weighted-average remaining life in years	6.3 - 7.4	6.6		7.2 - 7.4	7.3
	Discount rate	11.67% - 13.85%	13.24	%	13.60%	13.60	%
	Conditional prepayment rate	8.32% - 11.28%	9.98	%	7.71% - 7.89%	7.79	%
	Conditional default rate	0.11% - 1.06%	0.58	%	0.86% - 2.31%	1.51	%
Mortgage-backed debt related to Non-Residual Trusts	Conditional prepayment rate	1.93% - 3.62%	2.90	%	1.89% - 3.33%	2.72	%
	Conditional default rate	1.66% - 2.98%	2.30	%	1.92% - 3.81%	2.55	%
	Loss severity	70.33% - 93.46%	85.63	%	73.26% - 89.78%	82.87	%
	Discount rate	6.00%	6.00	%	6.00%	6.00	%
HMBS related obligations	Weighted-average remaining life in years	0.9 - 6.6	3.5		1.3 - 7.7	3.9
	Conditional repayment rate	12.06% - 55.49%	24.70	%	11.30% - 48.65%	21.21	%
	Discount rate	1.73% - 3.08%	2.39	%	1.44% - 3.06%	2.36	%

__________


(1)	Conditional repayment rate includes assumptions for both voluntary and involuntary rates as well as assumptions for the assignment of HECMs to HUD, in accordance with obligations as servicer.


(2)	Voluntary and involuntary prepayment rates have been presented as conditional prepayment rate and conditional default rate, respectively.

(3)

With the exception of loss severity, fair value of initial servicing rights embedded in IRLCs and discount rate on charged-off loans, all significant unobservable inputs above are based on the related unpaid principal balance of the underlying collateral, or in the case of HMBS related obligations, the balance outstanding. Loss severity is based on projected liquidations. Fair value of servicing rights embedded in IRLCs represents a multiple of the annual servicing fee. The discount rate on charged-off loans is based on the loan balance at fair value.


(4)	Fair value of servicing rights embedded in IRLCs, which represents a multiple of the annual servicing fee, excludes the impact of IRLCs identified as servicing released.

Fair Value Option

With the exception of freestanding derivative instruments, the Company has elected the fair value option for the assets and liabilities described above as measured at fair value on a recurring basis. The fair value option was elected for these assets and liabilities as the Company believes fair value best reflects their expected future economic performance.

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Presented in the table below is the estimated fair value and unpaid principal balance of loans and debt instruments that have contractual principal amounts and for which the Company has elected the fair value option (in thousands):



	December 31, 2015				December 31, 2014
	Estimated Fair Value		Unpaid Principal Balance		Estimated Fair Value		Unpaid Principal Balance
Loans at fair value under the fair value option
Reverse loans ⁽¹⁾	$	10,763,816	$	10,187,521	$	10,064,365	$	9,340,270
Mortgage loans held for sale ⁽¹⁾	1,334,300		1,285,582		1,124,615		1,071,787
Mortgage loans related to Non-Residual Trusts	526,016		580,695		586,433		650,382
Charged-off loans	49,307		2,887,367		57,217		3,366,504
Total	$	12,673,439	$	14,941,165	$	11,832,630	$	14,428,943

Debt instruments at fair value under the fair value option
Mortgage-backed debt related to Non-Residual Trusts	$	582,340	$	585,839	$	653,167	$	657,174
HMBS related obligations ⁽²⁾	10,647,382		10,012,283		9,951,895		9,172,083
Total	$	11,229,722	$	10,598,122	$	10,605,062	$	9,829,257

__________


(1)	Includes loans that collateralize master repurchase agreements. Refer to Note 18 for additional information.


(2)	For HMBS related obligations, the unpaid principal balance represents the balance outstanding.

Included in mortgage loans related to Non-Residual Trusts are loans that are 90 days or more past due that had a fair value of $2.6 million and $2.0 million , and an unpaid principal balance of $16.2 million and $10.2 million , at December 31, 2015 and 2014 , respectively. Mortgage loans held for sale that are 90 days or more past due are insignificant at December 31, 2015 . At December 31, 2014, there are no mortgage loans held for sale that are 90 days or more past due. Charged-off loans are predominantly 90 days or more past due.

Items Measured at Fair Value on a Non-Recurring Basis

The Company held real estate owned, net of $77.4 million and $88.4 million at December 31, 2015 and 2014 , respectively. In addition, the Company had loans that were in the process of foreclosure of $244.9 million at December 31, 2015 , which are included in residential loans at amortized cost, net and residential loans at fair value on the consolidated balance sheet. Real estate owned, net is included on the consolidated balance sheets in other assets and is measured at net realizable value on a non-recurring basis utilizing significant unobservable inputs or Level 3 assumptions in their valuation.

The following table presents the significant unobservable input used in the fair value measurement of real estate owned, net:



		December 31, 2015			December 31, 2014
	Significant Unobservable Input	Range of Input	Weighted Average of Input		Range of Input	Weighted Average of Input
Real estate owned, net	Loss severity ⁽¹⁾	0.00% - 72.58%	8.25	%	0.00% - 59.58%	8.04	%

__________


(1)	Loss severity is based on the unpaid principal balance of the related loan at the time of foreclosure.

The Company held real estate owned, net in the Reverse Mortgage and Servicing segments and Other non-reportable segment of $66.4 million , $10.4 million and $0.6 million at December 31, 2015, respectively, and $55.3 million , $32.1 million and $1.0 million , at December 31, 2014, respectively. At December 31, 2015, properties (represented by 5% or more of real estate owned) were located in Florida, Texas, Illinois, and Puerto Rico. In determining fair value, the Company either obtains appraisals or performs a review of historical severity rates of real estate owned previously sold by the Company. When utilizing historical severity rates, the properties are stratified by collateral type and/or geographical concentration and length of time held by the Company. The severity rates are reviewed for reasonableness by comparison to third-party market trends and fair value is determined by applying severity rates to the stratified population. In the determination of fair value of real estate owned associated with reverse mortgages, the Company considers amounts typically covered by FHA insurance. Management approves valuations that have been determined using the historical severity rate method.

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F or the years ended December 31, 2015, 2014 and 2013 , real estate owned expenses, net which are recorded in other expenses, net on the consolidated statements of comprehensive income (loss) were $6.3 million , $7.0 million and $6.4 million , respectively. Included in real estate owned expenses, net are lower of cost or fair value adjustments of $5.5 million , $2.8 million and $0.8 million for the years ended December 31, 2015, 2014 and 2013 , respectively.

Fair Value of Other Financial Instruments

The following table presents the carrying amounts and estimated fair values of financial assets and liabilities that are not recorded at fair value on a recurring or non-recurring basis and their respective levels within the fair value hierarchy (in thousands). This table excludes cash and cash equivalents, restricted cash and cash equivalents, servicer payables and warehouse borrowings as these financial instruments are highly liquid or short-term in nature and as a result, their carrying amounts approximate fair value.



		December 31, 2015				December 31, 2014
	Fair Value Hierarchy	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets
Residential loans at amortized cost, net	Level 3	$	541,406	$	554,664	$	1,314,539	$	1,377,213
Insurance premium receivables	Level 3	90,053		87,152		98,220		93,395
Servicer and protective advances, net	Level 3	1,595,911		1,513,076		1,761,082		1,691,443

Financial liabilities
Payables to insurance carriers	Level 3	63,410		62,694		69,498		68,673
Servicing advance liabilities ⁽¹⁾	Level 3	1,226,898		1,232,147		1,362,017		1,367,519
Corporate debt ⁽²⁾	Level 2	2,152,031		1,904,467		2,230,557		2,095,286
Mortgage-backed debt carried at amortized cost	Level 3	469,339		475,347		1,086,660		1,121,369

__________


(1)	The carrying amounts of servicing advance liabilities are net of deferred issuance costs, including those relating to line-of-credit arrangements, which are recorded in other assets.


(2)	The carrying amounts of corporate debt are net of the 2013 Revolver deferred issuance costs, which are recorded in other assets.

The following is a description of the methods and significant assumptions used in estimating the fair value of the Company’s financial instruments that are not measured at fair value on a recurring or non-recurring basis.

Residential loans at amortized cost, net — The methods and assumptions used to estimate the fair value of residential loans carried at amortized cost are the same as those described above for mortgage loans related to Non-Residual Trusts.

Insurance premium receivables — The estimated fair value of these receivables is based on the net present value of the expected cash flows. The determination of fair value includes assumptions related to the underlying collateral serviced by the Company, such as delinquency and default rates, as the insurance premiums are collected as part of the borrowers’ loan payments or from the related trusts.

Servicer and protective advances, net — The estimated fair value of these advances is based on the net present value of expected cash flows. The determination of expected cash flows includes consideration of recoverability clauses in the Company’s servicing agreements, as well as assumptions related to the underlying collateral and when proceeds may be used to recover these receivables.

Payables to insurance carriers — The estimated fair value of these liabilities is based on the net present value of the expected carrier payments over the life of the payables.

Servicing advance liabilities — The estimated fair value of the majority of these liabilities approximates carrying value as these liabilities bear interest at a rate that is adjusted regularly based on a market index.

Corporate debt — The Company’s 2013 Term Loan, Convertible Notes, and Senior Notes are not traded in an active, open market with readily observable prices. The estimated fair value of corporate debt is primarily based on an average of broker quotes.

Mortgage-backed debt carried at amortized cost — The methods and assumptions used to estimate the fair value of mortgage-backed debt carried at amortized cost are the same as those described above for mortgage-backed debt related to Non-Residual Trusts.

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Net Gains on Sales of Loans

Provided in the table below is a summary of the components of net gains on sales of loans (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Realized gains on sales of loans	$	171,128		$	367,314		$	218,504
Change in unrealized gains on loans held for sale	(7,345		)	1,412			24,771
Gains (losses) on interest rate lock commitments	(9,088		)	21,061			38,126
Gains (losses) on forward sales commitments	(19,747		)	(156,201		)	111,830
Losses on MBS purchase commitments	(24,250		)	(18,009		)	(5,599		)
Capitalized servicing rights	306,741			214,285			187,749
Provision for repurchases	(16,008		)	(7,741		)	(9,067		)
Interest income	52,227			40,051			32,625
Other	182			—			35
Net gains on sales of loans	$	453,840		$	462,172		$	598,974

Net Fair Value Gains on Reverse Loans and Related HMBS Obligations

Provided in the table below is a summary of the components of net fair value gains on reverse loans and related HMBS obligations (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Interest income on reverse loans	$	435,585		$	398,925		$	347,497
Change in fair value of reverse loans	(232,993		)	35,272			(239,417		)
Net fair value gains on reverse loans	202,592			434,197			108,080

Interest expense on HMBS related obligations	(403,817		)	(372,346		)	(321,820		)
Change in fair value of HMBS related obligations	299,490			48,121			334,122
Net fair value gains (losses) on HMBS related obligations	(104,327		)	(324,225		)	12,302
Net fair value gains on reverse loans and related HMBS obligations	$	98,265		$	109,972		$	120,382

7. Freestanding Derivative Financial Instruments

The following table provides the total notional or contractual amounts and related fair values of derivative assets and liabilities as well as cash margin (in thousands):



	December 31, 2015						December 31, 2014
	Notional/ Contractual Amount		Fair Value				Notional/ Contractual Amount		Fair Value
	Notional/ Contractual Amount		Derivative Assets		Derivative Liabilities		Notional/ Contractual Amount		Derivative Assets		Derivative Liabilities
Interest rate lock commitments	$	3,398,892	$	51,519	$	1,070	$	2,825,924	$	60,400	$	263
Forward sales commitments	4,650,000		6,427		4,871		4,989,400		332		29,744
MBS purchase commitments	703,000		566		534		1,847,000		7,419		17
Total derivative instruments			$	58,512	$	6,475			$	68,151	$	30,024
Cash margin			$	209	$	10,101			$	14,664	$	2,780

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Derivative positions subject to netting arrangements include all forward sale commitments, MBS purchase commitments, and cash margin, as reflected in the table above, and allow the Company to net settle asset and liability positions, as well as cash margin, with the same counterparty. After consideration of these netting arrangements and offsetting positions by counterparty, the total net settlement amount as it relates to these positions were asset positions of $0.3 million and less than $0.1 million , and liability positions of $8.6 million and $10.2 million , at December 31, 2015 and 2014 , respectively. A master netting arrangement with one of the Company’s counterparties also allows for offsetting derivative positions and margin against amounts associated with the master repurchase agreement with that same counterparty. At December 31, 2015 , the Company’s net derivative asset position with that counterparty of $0.4 million is comprised of $2.8 million of over-collateralized positions associated with the master repurchase agreement, partially offset by a net derivative liability position of $0.3 million and a cash margin received of $2.1 million . Over collateralized positions on master repurchase agreements are not reflected as margin in the table above. Refer to Note 6 for a summary of the gains and losses on freestanding derivatives.

8. Residential Loans at Amortized Cost, Net

Residential loans at amortized cost, net consist of mortgage loans held for investment. The majority of these residential loans are held in securitization trusts that have been consolidated. Refer to Note 4 for further information regarding VIEs.

Residential loans at amortized cost, net are comprised of the following components (in thousands):



	December 31,
	2015			2014
Unpaid principal balance	$	580,086		$	1,442,838
Unamortized discounts and other cost basis adjustments, net ⁽¹⁾	(34,223		)	(118,266		)
Allowance for loan losses	(4,457		)	(10,033		)
Residential loans at amortized cost, net ⁽²⁾	$	541,406		$	1,314,539

__________


(1)	Includes $4.6 million and $12.0 million of accrued interest receivable at December 31, 2015 and 2014 , respectively.


(2)	Includes $40.8 million and $21.8 million of mortgage loans that are not related to consolidated VIEs at December 31, 2015 and 2014 , respectively.

Allowance for Loan Losses

The following table summarizes the activity in the allowance for loan losses on residential loans at amortized cost, net (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Balance at beginning of the year	$	10,033		$	14,320		$	20,435
Provision for loan losses ⁽¹⁾	3,142			1,491			1,229
Charge-offs, net of recoveries ⁽²⁾	(3,034		)	(5,778		)	(7,344		)
Sale of residual interests ⁽³⁾	(5,684		)	—			—
Balance at end of the year	$	4,457		$	10,033		$	14,320

__________


(1)	Provision for loan losses is included in other expenses, net on the consolidated statements of comprehensive income (loss).


(2)	Includes charge-offs recognized upon foreclosure of real estate in satisfaction of residential loans of $1.7 million , $4.3 million and $7.2 million for the years ended December 31, 2015, 2014 and 2013 , respectively.


(3)	Sale of residual interests represents a decrease to the allowance for loan losses resulting from the deconsolidation of the seven Residual Trusts during the year ended December 31, 2015. Refer to Note 4 for additional information.

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Aging of Past Due Residential Loans and Credit Risk Profile Based on Delinquencies

Residential loans at amortized cost that are not insured are placed on non-accrual status when any portion of the principal or interest is 90 days past due. When placed on non-accrual status, the related interest receivable is reversed against interest income of the current period. Interest income on non-accrual loans, if received, is recorded using the cash-basis method of accounting. Residential loans are removed from non-accrual status when there is no longer significant uncertainty regarding collection of the principal and the associated interest. If a non-accrual loan is returned to accruing status, the accrued interest existing at the date the residential loan is placed on non-accrual status and interest during the non-accrual period are recorded as interest income as of the date the loan no longer meets the non-accrual criteria. The past due or delinquency status of residential loans is generally determined based on the contractual payment terms. In the case of loans with an approved repayment plan, including plans approved by the bankruptcy court, delinquency is based on the modified due date of the loan. Loan balances are charged off when it becomes evident that balances are not collectible.

Factors that are important to managing overall credit quality and minimizing loan losses include sound loan underwriting, monitoring of existing loans, early identification of problem loans and timely resolution of problems. The Company primarily utilizes delinquency status to monitor the credit quality of the portfolio. The Company considers all loans 30 days or more past due to be non-performing and all loans that are current to be performing with regard to its credit quality profile. The Company had a recorded investment in loans that were 30 days or more past due of $46.6 million and $88.6 million at December 31, 2015 and 2014 , respectively.

Ginnie Mae Securitizations

For certain mortgage loans that the Company pooled and securitized with Ginnie Mae, the Company 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. As a result of this unilateral right, the Company must recognize the delinquent loan on its consolidated balance sheets and establish a corresponding liability regardless of the Company’s intention to repurchase the loan. At December 31, 2015 and 2014, the Company has recorded $22.5 million and $1.5 million , respectively, in such loans with a corresponding liability in payables and accrued liabilities. These loans are recorded in residential loans at amortized cost, net on the consolidated balance sheets.

Concentrations of Credit Risk

Concentrations of credit risk associated with the residential loan portfolio carried at amortized cost are limited due to the large number of customers and their dispersion across many geographic areas. At December 31, 2015, the homes securing these loans (represented by 5% or more of unpaid principal balance) were located in Texas, Mississippi, Alabama, Louisiana and South Carolina.

9. Residential Loans at Fair Value

Residential Loans Held for Investment

Residential loans held for investment and carried at fair value include reverse loans, mortgage loans related to Non-Residual Trusts and charged-off loans.

Credit Risk

Concentrations of credit risk associated with the residential loan portfolio carried at fair value and held for investment are limited due to the large number of customers and their dispersion across many geographic areas. At December 31, 2015, the homes securing reverse loans and mortgage loans related to Non-Residual Trusts (represented by 5% or more of unpaid principal balance) were located in California, Florida, Texas, and New York.

HECMs are insured by the FHA. Although performing and nonperforming reverse loans are covered by FHA insurance, the Company may incur expenses and losses in the process of repurchasing and liquidating these loans that are not reimbursable by FHA in accordance with program guidelines. However, these amounts are considered to be insignificant.

The Company does not currently own residual interests in or provide credit support to the Non-Residual Trusts. However, the Company has assumed mandatory call obligations related to the Non-Residual Trusts and will be subject to a certain amount of credit risk associated with the purchased mortgage loans when the calls are exercised. This credit risk is considered in the fair value of the related mortgage loans. Refer to Note 29 for additional information.

The charged-off loan portfolio was acquired for a substantial discount to face value and as a result, exposes the Company to minimal credit risk.

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Residential Loans Held for Sale

The Company sells substantially all of its originated or purchased mortgage loans into the secondary market for securitization or to private investors as whole loans. The Company typically retains the right to service these loans. Refer to Note 5 for additional information regarding these sales of residential loans that are held for sale.

A reconciliation of the changes in residential loans held for sale to the amounts presented on the consolidated statements of cash flows is presented in the following table (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Balance at beginning of the year	$	1,124,615		$	1,015,607		$	45,065
Purchases and originations of loans held for sale	25,942,841			18,878,305			16,141,573
Proceeds from sales of and payments on loans held for sale ⁽¹⁾	(25,963,200		)	(19,177,179		)	(15,452,196		)
Realized gains on sales of loans ⁽²⁾	171,128			367,314			218,504
Change in unrealized gains on loans held for sale ⁽²⁾	(7,345		)	1,412			24,771
Interest income ⁽²⁾	52,227			40,051			32,625
Transfers from loans held for investment	16,690			—			5,183
Other	(2,656		)	(895		)	82
Balance at end of the year	$	1,334,300		$	1,124,615		$	1,015,607

__________


(1)	Excludes realized gains and losses on freestanding derivatives.


(2)	Amount is a component of net gains on sales of loans on the consolidated statements of comprehensive income (loss). Refer to Note 6 for additional information.

Credit Risk

The Company is subject to credit risk associated with mortgage loans that it purchases and originates during the period of time prior to the sale of these loans. The Company considers credit risk associated with these loans to be insignificant as it holds the loans for a short period of time, typically less than 20 days, and the market for these loans continues to be highly liquid. The Company is also subject to credit risk associated with mortgage loans it has repurchased as a result of breaches of representations and warranties during the period of time between repurchase and resale. At December 31, 2015 , the Company held $8.2 million in repurchased loans.

10. Receivables, Net

Receivables, net consists of the following (in thousands):



	December 31,
	2015			2014
Insurance premium receivables	$	90,053		$	98,220
Servicing fee receivables	42,773			51,183
Receivables related to Non-Residual Trusts	16,542			25,201
Income tax receivables	10,671			17,106
Servicing rights related receivable from WCO	8,895			—
Other receivables	49,068			27,837
Total receivables	218,002			219,547
Less: Allowance for uncollectible receivables	(3,604		)	(3,918		)
Receivables, net	$	214,398		$	215,629

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11. Servicer and Protective Advances, Net

Servicer advances consist of principal and interest advances to certain unconsolidated securitization trusts to meet contractual payment requirements to credit owners. Protective advances consist of advances to protect the collateral being serviced by the Company and primarily include payments made for property taxes, insurance and foreclosure costs. Servicer and protective advances, net consists of the following (in thousands):



	December 31,
	2015			2014
Servicer advances	$	44,031		$	59,587
Protective advances	1,672,218			1,813,922
Total servicer and protective advances	1,716,249			1,873,509
Less: Allowance for uncollectible advances	(120,338		)	(112,427		)
Servicer and protective advances, net	$	1,595,911		$	1,761,082

The following table shows the activity in the allowance for uncollectible advances (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Balance at beginning of the year	$	112,427		$	62,542		$	34,418
Provision for uncollectible advances	52,679			75,704			37,993
Charge-offs, net of recoveries and other ⁽¹⁾	(44,768		)	(25,819		)	(9,869		)
Balance at end of the year	$	120,338		$	112,427		$	62,542

__________


(1)	Includes $23.5 million related to the sale of residual interests in seven Residual Trusts during the year ended December 31, 2015.

12. Servicing of Residential Loans

The Company provides servicing of residential loans and real estate owned for itself and third-party credit owners. The Company’s total servicing portfolio consists of accounts serviced for others for which servicing rights have been capitalized, accounts sub-serviced for others, as well as residential loans and real estate owned recognized on the consolidated balance sheets.

Provided below is a summary of the Company’s total servicing portfolio (dollars in thousands):



	December 31, 2015			December 31, 2014
	Number of Accounts	Unpaid Principal Balance		Number of Accounts	Unpaid Principal Balance
Third-party credit owners ⁽¹⁾
Capitalized servicing rights ⁽²⁾	1,637,541	$	197,154,579	1,573,867	$	182,207,043
Capitalized sub-servicing ⁽³⁾	159,368	9,053,755		187,747	10,443,480
Sub-servicing ⁽⁴⁾	346,755	47,734,378		431,271	50,882,152
Total third-party servicing portfolio	2,143,664	253,942,712		2,192,885	243,532,675
On-balance sheet residential loans and real estate owned	102,044	12,705,532		116,763	12,579,467
Total servicing portfolio ⁽⁵⁾	2,245,708	$	266,648,244	2,309,648	$	256,112,142

__________


(1)	Includes real estate owned serviced for third parties.


(2)	At December 31, 2015, includes $1.7 billion in unpaid principal balance associated with servicing rights sold to WCO. Refer to Note 19 for additional information relating to this sale.


(3)	Consists of sub-servicing contracts acquired through business combinations whereby the benefits from the contract are greater than adequate compensation for performing the servicing.


(4)	Includes $6.6 billion in unpaid principal balance of sub-servicing performed for WCO at December 31, 2015.


(5)	Excludes charged-off loans managed by the Servicing segment.

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The Company’s geographic diversification of its third-party servicing portfolio, based on the outstanding unpaid principal balance, is as follows (dollars in thousands):



	December 31, 2015					December 31, 2014
	Number of Accounts	Unpaid Principal Balance		Percentage of Total		Number of Accounts	Unpaid Principal Balance		Percentage of Total
California	244,708	$	46,704,146	18.4	%	239,450	$	42,499,413	17.5	%
Florida	180,242	21,714,653		8.6	%	189,111	22,378,614		9.2	%
Texas	169,167	14,380,328		5.7	%	172,999	13,724,469		5.6	%
Other <5%	1,549,547	171,143,585		67.3	%	1,591,325	164,930,179		67.7	%
Total	2,143,664	$	253,942,712	100.0	%	2,192,885	$	243,532,675	100.0	%

Net Servicing Revenue and Fees

The Company services loans for itself, as well as for third parties, and earns servicing income from its third-party servicing portfolio. The following table presents the components of net servicing revenue and fees, which consists of revenues earned by the Servicing and Reverse Mortgage segments (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Servicing fees ^{(1) (2)}	$	708,491		$	675,335		$	544,544
Incentive and performance fees ⁽¹⁾	117,586			157,148			156,279
Ancillary and other fees ^{(1) (3)}	104,750			88,430			77,091
Servicing revenue and fees	930,827			920,913			777,914
Amortization of servicing rights ⁽⁴⁾	(26,827		)	(43,101		)	(42,583		)
Change in fair value of servicing rights	(401,992		)	(273,502		)	48,058
Change in fair value of servicing rights related liabilities ^{(2) (5)}	(7,741		)	(2,800		)	—
Net servicing revenue and fees	$	494,267		$	601,510		$	783,389

__________


(1)	Includes sub-servicing fees, incentive and performance fees, and ancillary and other fees related to servicing assets held by WCO of $1.3 million , $0.1 million and $0.1 million , respectively, for the year ended December 31, 2015.


(2)	Includes a pass-through of $0.6 million relating to servicing rights sold to WCO for the year ended December 31, 2015.


(3)	Includes late fees of $62.8 million , $48.4 million and $39.9 million for the years ended December 31, 2015, 2014 and 2013 , respectively.


(4)	Includes $0.4 million in amortization of a servicing liability for the year ended December 31, 2015.


(5 )	Includes interest expense on servicing rights related liabilities, which represents the accretion of fair value, of $9.3 million and $4.9 million for the years ended December 31, 2015 and 2014 , respectively.

For the years ended December 31, 2015, 2014 and 2013 , servicing revenue and fees included $571.4 million , $615.8 million and $495.3 million , respectively, in revenues from servicing Fannie Mae residential loans. These amounts consist of revenues from the Company's Servicing and Reverse Mortgage segments. A substantial portion of the Company’s third-party servicing revenue consists of revenues from Fannie Mae, a large commercial bank, and various securitization trusts.

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Servicing Rights

Servicing Rights Carried at Amortized Cost

The following table summarizes the activity in the carrying value of servicing rights carried at amortized cost by class (in thousands):



	Mortgage Loan			Reverse Loan
Balance at January 1, 2013	$	227,191		$	15,521
Reclassifications ⁽¹⁾	(26,382		)	—
Purchases	36			—
Amortization of servicing rights	(39,057		)	(3,526		)
Other	(6		)	(1		)
Balance at December 31, 2013	161,782			11,994
Amortization of servicing rights	(40,418		)	(2,683		)
Balance at December 31, 2014	121,364			9,311
Servicing rights capitalized upon deconsolidation of Residual Trusts	3,133			—
Amortization of servicing rights	(25,195		)	(2,053		)
Balance at December 31, 2015	$	99,302		$	7,258

__________


(1)	Represents servicing rights for which the Company elected fair value accounting as of January 1, 2013. This election had no impact on retained earnings.

Servicing rights accounted for at amortized cost are evaluated for impairment by strata based on their estimated fair values. The risk characteristics used to stratify servicing rights for purposes of measuring impairment are the type of loan products, which consist of manufactured housing loans, first lien residential mortgages and second lien residential mortgages for the mortgage loan class, and reverse mortgages for the reverse loan class. At December 31, 2015 , the fair value of servicing rights for the mortgage loan class and the reverse loan class was $117.3 million and $11.1 million , respectively. At December 31, 2014 , the fair value of servicing rights for the mortgage loan class and the reverse loan class was $142.5 million and $14.1 million , respectively. Fair value was estimated using the present value of projected cash flows over the estimated period of net servicing income.

The estimation of fair value requires significant judgment and uses key economic inputs and assumptions, which are provided in the table below:



	December 31, 2015
	Mortgage Loan		Reverse Loan
Weighted-average remaining life in years	5.6		2.8
Weighted-average discount rate	12.06	%	15.00	%
Conditional prepayment rate ⁽¹⁾	6.49	%	N/A
Conditional default rate ⁽¹⁾	2.16	%	N/A
Conditional repayment rate ⁽²⁾	N/A		29.53	%

__________


(1)	Voluntary and involuntary prepayment rates have been presented as conditional prepayment rate and conditional default rate, respectively.


(2)	Conditional repayment rate includes assumptions for both voluntary and involuntary rates as well as assumptions for the assignment of HECMs to HUD, in accordance with obligations as servicer.

The valuation of servicing rights is affected by the underlying assumptions above. Should the actual performance and timing differ materially from the Company’s projected assumptions, the estimate of fair value of the servicing rights could be materially different.

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Servicing Rights Carried at Fair Value

The following table summarizes the activity in servicing rights carried at fair value (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Balance at beginning of the year	$	1,599,541		$	1,131,124		$	26,382
Acquisition of EverBank net assets	—			58,680			—
Acquisition of ResCap net assets	—			—			242,604
Purchases	237,820			479,820			626,331
Servicing rights capitalized upon sales of loans	306,741			214,285			187,749
Sales	(60,094		)	(10,866		)	—
Change in fair value due to:
Changes in valuation inputs or other assumptions ⁽¹⁾	(157,262		)	(124,471		)	153,331
Other changes in fair value ⁽²⁾	(244,730		)	(149,031		)	(105,273		)
Total change in fair value	(401,992		)	(273,502		)	48,058
Balance at end of the year ⁽³⁾	$	1,682,016		$	1,599,541		$	1,131,124

__________


(1)	Represents the change in fair value resulting primarily from market-driven changes in interest rates and prepayment speeds.


(2)	Represents the realization of expected cash flows over time and includes $12.9 million in servicing rights transferred to the Company for no consideration for the year ended December 31, 2013.


(3)	At December 31, 2015, includes $16.9 million in servicing rights that were sold to WCO and accounted for as a financing.

The fair value of servicing rights accounted for at fair value was estimated using the present value of projected cash flows over the estimated period of net servicing income. The estimation of fair value requires significant judgment and uses key economic inputs and assumptions which are described at Note 6. Should the actual performance and timing differ materially from the Company's projected assumptions, the estimate of fair value of the servicing rights could be materially different.

The following table summarizes the hypothetical effect on the fair value of servicing rights carried at fair value using adverse changes of 10% and 20% to the weighted average of the significant assumptions used in valuing these assets (dollars in thousands):



	December 31, 2015								December 31, 2014
			Decline in fair value due to								Decline in fair value due to
	Assumption		10% adverse change			20% adverse change			Assumption		10% adverse change			20% adverse change
Weighted-average discount rate	10.88	%	$	(68,874	)	$	(132,645	)	9.55	%	$	(62,785	)	$	(121,117	)
Weighted-average conditional prepayment rate	9.94	%	(63,884		)	(123,173		)	7.87	%	(59,344		)	(114,523		)
Weighted-average conditional default rate	1.06	%	(21,208		)	(43,576		)	2.36	%	(15,388		)	(30,285		)

The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, the effect of an adverse variation in a particular assumption on the fair value of the servicing rights is calculated without changing any other assumption, while in reality changes in one factor may result in changes in another, which may either magnify or counteract the effect of the change.

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Fair Value of Originated Servicing Rights

For mortgage loans sold with servicing retained, the Company used the following inputs and assumptions to determine the fair value of servicing rights at the dates of sale. These servicing rights are included in servicing rights capitalized upon sales of loans in the table presented above that summarizes the activity in servicing rights accounted for at fair value.



	For the Years Ended December 31,
	2015	2014	2013
Weighted-average life in years	6.5	7.1	8.7
Weighted-average discount rate	11.90%	9.43%	9.64%
Weighted-average conditional prepayment rate	8.19%	7.67%	5.62%
Weighted-average conditional default rate	0.39%	0.73%	0.77%

13. Goodwill and Intangible Assets, Net

Goodwill and intangible assets were recorded in connection with various business combinations. Amortization expense associated with intangible assets was $19.5 million , $18.9 million and $31.3 million for the years ended December 31, 2015, 2014 and 2013 , respectively.

Intangible assets, net consists of the following (in thousands):



	December 31, 2015							December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer relationships	$	133,067	$	(64,238	)	$	68,829	$	139,767	$	(58,910	)	$	80,857
Institutional relationships	16,600		(8,468		)	8,132		16,600		(6,618		)	9,982
Other	10,000		(2,923		)	7,077		15,000		(2,336		)	12,664
Total intangible assets	$	159,667	$	(75,629	)	$	84,038	$	171,367	$	(67,864	)	$	103,503

Based on the balance of intangible assets, net at December 31, 2015 , the following is an estimate of amortization expense for each of the next five years and thereafter (in thousands):



	Amortization Expense
2016	$	11,728
2017	10,192
2018	9,108
2019	8,136
2020	7,310
Thereafter	37,564
Total	$	84,038

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The table below sets forth the activity in goodwill by reportable segment (in thousands):



	Reportable Segment
	Servicing ⁽¹⁾			Originations		Reverse Mortgage			Total
Balance at January 1, 2014 ⁽²⁾	$	471,182		$	47,747	$	138,808		$	657,737
Impairment	—			—		(82,269		)	(82,269		)
Balance at December 31, 2014 ⁽²⁾	471,182			47,747		56,539			575,468
Impairment	(151,018		)	—		(56,539		)	(207,557		)
Balance at December 31, 2015 ⁽²⁾	$	320,164		$	47,747	$	—		$	367,911

__________


(1)	The Servicing, Insurance and ARM reporting units are components of the Servicing segment.


(2)	There were accumulated impairment losses included in goodwill of $151.0 million relating to the Servicing segment at December 31, 2015 and $138.8 million and $82.3 million relating to the Reverse Mortgage segment at December 31, 2015 and 2014, respectively. There were no accumulated impairment losses at January 1, 2014.

The Company completed a qualitative assessment of goodwill impairment on its Insurance reporting unit during the fourth quarter of 2015 , and based on that assessment the Company believes it is more likely than not that the fair value of this reporting unit exceeds its carrying value. The Company performed a quantitative impairment test for the Originations and ARM reporting units and concluded that the fair value of each reporting unit was greater than their respective carrying values. These conclusions were reached primarily due to the respective reporting unit's operating results, business plans, economic projections, anticipated cash flows and market data. A quantitative assessment was also performed for the Servicing reporting unit and the Company concluded its goodwill was impaired, as described below. Thus, other than the goodwill impairment charges recorded for the Servicing and Reverse Mortgage reporting units during the year ended December 31, 2015 , there were no other goodwill impairment charges recorded in 2015.

Reverse Mortgage 2014

During August 2013, HUD announced certain changes to the HECM program that impacted the reverse mortgage products available to borrowers and reduced the available principal to be drawn initially by borrowers, deferring a significant amount of cash flow to future years. The regulatory changes forced industry participants to revise their overall business strategies. These changes created competitive pressures in the overall market place resulting in reduced and delayed cash flows which negatively impact discounted cash flows due to the time value of money.

As a result of the August 2013 changes, the Company's Reverse Mortgage reporting unit experienced operating challenges during 2014. During the second quarter of 2014, the Company developed a new strategy to increase the volume of new reverse loans sourced through the reporting unit’s retail origination channel that was anticipated to provide higher cash flows to the reporting unit. As part of this process, the Company revised its multi-year forecast for the reverse mortgage business. The change in assumptions used in the revised forecast and the fair value estimates utilized in the impairment testing of the reporting unit goodwill incorporated insights gained since acquiring the reverse mortgage business. Changes in the HECM program noted above resulted in lower projected revenue for the Company. The revised forecast also reflected changes related to current market trends, business mix, and cost structure, a likely reduction of certain fee revenue streams, and other expectations about the anticipated short-term operating results of the reverse mortgage business.

The Company determined that there were interim impairment indicators that led to the need for a quantitative impairment analysis for goodwill purposes during the second quarter of 2014. These indicators included lower operating results over a sustained period of time due to increased costs to service; adverse market conditions and regulatory trends within the reverse loan industry which drives lower volume; and reduced cash flows on the origination of reverse loans through the reporting unit's correspondent channel, as well as changes in the Company's reverse mortgage strategy and the revised financial forecast.

The fair value of the Reverse Mortgage reporting unit was based on the income approach. The decline in the fair value of the Reverse Mortgage reporting unit resulted from lower projected revenue growth rates and profitability levels in the short term, as well as an increase in the risk factor that is included in the discount rate used to calculate the discounted cash flows.

Based on the Company's analyses, the fair value of the reporting unit was below its carrying value. As a result, the Company recorded an $82.3 million goodwill impairment charge in the second quarter of 2014 which is included in the goodwill impairment line item on the consolidated statement of comprehensive loss for the year ended December 31, 2014.

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Reverse Mortgage 2015

During the second quarter of 2015, the Reverse Mortgage reporting unit experienced operational challenges in its retail origination channel and experienced a reduction in opportunities for additional sub-servicing business. Additionally, more experience existed with respect to previously introduced product changes that deferred a significant amount of cash flow to future years. The initial impact of this deferral of cash flows to future years was greater than originally anticipated by the Company. Also during the second quarter of 2015, new financial assessment requirements for the HECM program went into effect and new mortgagee letters were issued that could impact the likelihood of curtailment events in future periods. At such time, the impact of these more recent changes remained uncertain. At the same time, the Reverse Mortgage reporting unit continued to experience increasing liquidity requirements for the repurchase of certain HECMs and real estate owned from Ginnie Mae securitization pools, and based on recent developments, an increase in obligations surrounding curtailment-related items existing at the time of the RMS acquisition. Collectively, the impact of the greater than anticipated principal deferral, the operational challenges and the liquidity requirements resulted in reduced and delayed cash flows in the reverse mortgage business.

In addition, during the second quarter of 2015, the Company revised its multi-year forecast for the reverse mortgage business. The change in assumptions used in the revised forecast and the fair value estimates utilized in the impairment testing of the Reverse Mortgage reporting unit goodwill incorporated lower projected revenue as a result of the factors noted above. The revised forecast also reflected changes related to current market trends and other expectations about the anticipated operating results of the reverse mortgage business.

Based on these factors, the Company determined that there were interim impairment indicators that led to the need for a quantitative impairment analysis for goodwill purposes during the second quarter.

Based on the step one analysis, the Company concluded that the fair value of the Reverse Mortgage reporting unit (determined based on the income approach) was below its carrying value and was therefore required to perform a step two analysis to determine the implied fair value of goodwill. The Company concluded, based on the step two analysis, that the carrying amount of the reporting unit's goodwill exceeded its implied fair value and as a result, recorded a $56.5 million goodwill impairment charge in the second quarter of 2015 which is included in goodwill impairment on the consolidated statements of comprehensive income (loss).

Step 1 Annual Testing

Similar to 2014, the Company's share price continued to experience volatility during 2015. As a result, the Company reassessed its market capitalization and the implications that the decline in market capitalization had on the carrying value of its goodwill. Management concluded that there were circumstances evident which indicated the fair value of the Company's reporting units could be below their carrying amounts. As a result of the Step 1 testing, the Originations and ARM reporting units had fair values which exceeded their carrying values of 52% and 5% , respectively. However, the Servicing reporting unit had a carrying value which exceeded its fair value and therefore, the Company was required to complete the second step of the impairment evaluation for this reporting unit. Based on the step two analysis, the carrying amount of the Servicing reporting unit’s goodwill exceeded its implied fair value and as a result, the Company recorded a $151.0 million goodwill impairment charge in the fourth quarter of 2015 which is included in goodwill impairment on the consolidated statements of comprehensive income (loss). This impairment was primarily the result of higher discount rates applied to forecasted cash flows driven by the decline in the Company's stock price, which has been impacted by continued challenges in the Company's industry, market developments, as well as the impact these factors have had on certain Company specific matters.

The Company is likely to continue to be impacted in the near term by overall market performance within the sector, a continued level of regulatory scrutiny and other Company specific matters. As a result, the Company has and will continue to regularly monitor, among other things, its market capitalization, overall economic and sector conditions and other events or circumstances, including the ability to develop new business opportunities within the ARM reporting unit that may result in an impairment of goodwill in the future.

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14. Premises and Equipment, Net

Premises and equipment, net consists of the following (dollars in thousands):



	December 31,						Useful Life (in years)
	2015			2014			Useful Life (in years)
Computer software	$	213,923		$	207,175		3 - 7
Computer hardware	35,120			33,636			3
Furniture and fixtures	10,649			10,834			3
Office equipment and other	6,053			5,162			3
Assets in development	23,995			2,137
Total premises and equipment	289,740			258,944
Less: accumulated depreciation and amortization	(183,259		)	(134,018		)
Premises and equipment, net	$	106,481		$	124,926

The Company recorded depreciation and amortization expense for premises and equipment of $49.7 million , $53.8 million and $39.7 million , which includes amortization expense for computer software of $37.9 million , $40.7 million and $30.8 million , for the years ended December 31, 2015, 2014 and 2013 , respectively.

Computer software, net consists of the following (in thousands):



	December 31,
	2015			2014
Computer software	$	213,923		$	207,175
Less: Accumulated amortization	(143,498		)	(105,585		)
Computer software, net	$	70,425		$	101,590

Based on the balance of computer software, net at December 31, 2015 , the following is an estimate of amortization expense for each of the next five years and thereafter (in thousands):



	Amortization Expense
2016	$	32,517
2017	23,785
2018	11,048
2019	1,656
2020	1,383
Thereafter	36
Total	$	70,425

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15. Other Assets

Other assets consists of the following (in thousands):



	December 31,
	2015		2014
Real estate owned, net	$	77,383	$	88,362
Derivative instruments	58,512		68,151
Investment in WCO	22,598		6,488
Deferred debt issuance costs	10,261		11,515
Margin receivable on derivative instruments	209		14,664
Other	31,401		49,220
Total other assets	$	200,364	$	238,400

16. Payables and Accrued Liabilities

Payables and accrued liabilities consists of the following (in thousands):



	December 31,
	2015		2014
Curtailment liability ⁽¹⁾	$	115,453	$	60,776
Accounts payable and accrued liabilities	113,325		174,659
Employee-related liabilities	95,926		93,368
Uncertain tax positions ⁽²⁾	64,554		14,914
Payables to insurance carriers	63,410		69,498
Originations liability	48,930		45,370
Loans subject to repurchase from Ginnie Mae	22,507		1,517
Servicing rights and related advance purchases payable	21,649		77,231
Acquisition related escrow funds payable to sellers	10,236		10,236
Margin payable on derivative instruments	10,101		2,780
Accrued interest payable	9,819		13,808
Derivative instruments	6,475		30,024
Other	57,595		69,648
Total payables and accrued liabilities	$	639,980	$	663,829

__________

(1)

The increase in the curtailment liability at December 31, 2015 relates primarily to regulatory developments that led to additional charges around curtailable events. In addition there was an increase in missed timelines driven by an increase in volume resulting from the contraction of default servicing timeframes due to recent regulatory changes and an increase in the related exposure to incurred but not known deaths of the mortgagor and the mortgagor's vacancy from their principal residence.

(2)

During the year ended December 31, 2015, the Company determined that a tax accounting method as employed is not more likely than not to be realized and has derecognized the tax position. The Company has recorded an offsetting deferred tax asset as a component of its deferred tax liability related to servicing rights. The Company expects to file with the IRS for an accounting method change during the first quarter of 2016 and, as a result, expects this uncertain tax position to reverse at that time.

Costs Associated with Exit Activities

During 2015, the Company took distinct actions to improve efficiencies within the organization, which included re-branding its mortgage loan originations business by consolidating Ditech Mortgage Corp and Green Tree Servicing into one legal entity with one brand, Ditech, a Walter Company. Additionally, the Company took measures to restructure its mortgage loan servicing operations and improve the profitability of the reverse mortgage business by streamlining its geographic footprint and strengthening its retail originations channel. These actions resulted in costs relating to the closing of offices and the termination of certain employees as well as other expenses to institute efficiencies. The Company completed these activities in the fourth quarter of 2015.

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In the fourth quarter of 2015, the Company made a decision to exit the consumer retail channel of the Originations segment beginning in January 2016. As a result of this decision, the Company incurred $1.2 million in costs during the fourth quarter of 2015 and expects to incur additional costs of approximately $0.7 million during the first half of 2016.

The costs resulting from these exit activities are recorded in salaries and benefits and general and administrative expenses on the consolidated statements of comprehensive income (loss). The following table summarizes the accrued liability, which is included in payables and accrued liabilities on the consolidated balance sheets, and the related charges and cash payments and other settlements associated with these activities (in thousands):



	For the Year Ended December 31, 2015
	Severance and Other Related Costs			Office Closures and Other Costs			Total
Balance at beginning of the year	$	—		$	—		$	—
Charges	6,006			5,555			11,561
Cash payments or other settlements	(3,419		)	(3,959		)	(7,378		)
Balance at end of year	$	2,587		$	1,596		$	4,183
Total expected costs to be incurred	$	6,006		$	6,275		$	12,281

The following table summarizes the activities described above by reportable segment (in thousands):



	For the Year Ended December 31, 2015
	Servicing			Originations			Reverse Mortgage			Other			Total Consolidated
Balance at beginning of the year	$	—		$	—		$	—		$	—		$	—
Charges	6,462			2,608			1,640			851			11,561
Cash payments or other settlements	(5,288		)	(945		)	(294		)	(851		)	(7,378		)
Balance at end of year	$	1,174		$	1,663		$	1,346		$	—		$	4,183
Total expected costs to be incurred	$	6,462		$	3,328		$	1,640		$	851		$	12,281

17. Servicing Advance Liabilities

Servicing advance liabilities, which are carried at amortized cost, consists of the following (in thousands):



	December 31,
	2015		2014
Servicing advance facilities ⁽¹⁾	$	1,072,541	$	1,197,148
Early Advance Reimbursement Agreement	156,739		168,737
Total servicing advance liabilities	$	1,229,280	$	1,365,885

__________


(1)	At December 31, 2015, servicing advance facilities are net of $2.9 million in deferred issuance costs relating to term notes. There were no such term notes at December 31, 2014.

The Company's subsidiaries have servicing advance facilities through several lenders and an Early Advance Reimbursement Agreement with Fannie Mae which, in each case, are used to fund certain servicer and protective advances that are the responsibility of the Company under certain servicing agreements.

The servicing advance facilities and the Early Advance Reimbursement Agreement had an aggregate capacity of $1.5 billion at December 31, 2015 . These facilities include $360.0 million of term notes at a weighted-average fixed interest rate of 2.63% expiring in October 2016 and $140.0 million of term notes at a weighted-average fixed interest rate of 3.48% expiring October 2018 . The interest rates on the remaining capacities are primarily based on LIBOR plus between 2.30% and 4.40% , and have various expiration dates through July 2018 . The facilities had a weighted-average stated interest rate of 3.25% and 2.32% at December 31, 2015 and December 31, 2014, respectively. Payments on the amounts due under these agreements are paid from proceeds received by the subsidiaries (i) in connection with the liquidation of mortgaged properties, (ii) from repayments received from mortgagors, or (iii) from reimbursements received from the owners of the mortgage loans, such as Fannie Mae, Freddie Mac and private label

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securitization trusts. Accordingly, repayment of the servicing advance liabilities is dependent on the recoveries or repayments by third-party borrowers that are received on the underlying advances associated with the agreements. Two of the servicing advance facilities are non-recourse to the Company. Refer to Note 4 for additional information.

Servicing Advance Facilities

The servicing advance facilities had $1.3 billion of collateral pledged by the Company's subsidiaries under these agreements at December 31, 2015 . The servicing advance facilities contain customary events of default and covenants, including financial covenants. Financial covenants most sensitive to the Company’s operating results and financial position are the requirements that a subsidiary maintain minimum tangible net worth, indebtedness to tangible net worth and minimum liquidity. The Company's subsidiary was in compliance with these financial covenants at December 31, 2015 .

One of the facilities provides funding for servicer and protective advances made by Ditech Financial in connection with its servicing of certain Fannie Mae and Freddie Mac mortgage loans. On October 21, 2015, this facility was amended and restated to provide for the issuance of $500.0 million aggregate principal amount of term notes consisting of one -year term notes with an initial aggregate principal balance of $360.0 million and three -year term notes with an initial aggregate principal balance of $140.0 million ; to extend the commitment for up to $600.0 million of previously issued variable funding notes until October 2016; and to reduce total borrowing capacity under this facility by $100.0 million to $1.1 billion in the aggregate.

If the one -year term notes are not redeemed or refinanced on or prior to October 17, 2016 , and the three -year term notes are not redeemed or refinanced on or prior to October 15, 2018 , one-twelfth of the related note balances will be required to be repaid on each monthly payment date thereafter. The variable funding notes will become due and payable on October 19, 2016 if not otherwise extended for an additional 364 -day period.

Early Advance Reimbursement Agreement

Ditech Financial's Early Advance Reimbursement Agreement with Fannie Mae is used exclusively to fund certain principal and interest, servicer and protective advances that are the responsibility of Ditech Financial under its Fannie Mae servicing agreements. This agreement was renewed in April 2015 and expires in March 2016 . If not renewed, there will be no additional funding by Fannie Mae of new advances under the agreement. In addition, collections recovered during the 18 months following the expiration of the agreement are to be remitted to Fannie Mae to settle any remaining outstanding balance due under such agreement. Upon expiration of the 18 month period, any remaining balance would become due and payable. At December 31, 2015, the Company had borrowings of $156.7 million under the Early Advance Reimbursement Agreement, which has a capacity of $200.0 million .

18. Warehouse Borrowings

The Company's subsidiaries enter into master repurchase agreements with lenders providing warehouse facilities. The warehouse facilities are used to fund the origination and purchase of residential loans, as well as the repurchase of certain HECMs and real estate owned from Ginnie Mae securitization pools. The facilities had an aggregate funding capacity of $2.5 billion at December 31, 2015 and are secured by certain residential loans and real estate owned. At December 31, 2015, the interest rates on the facilities are primarily based on LIBOR plus between 2.10% and 3.13% , and have various expiration dates through October 2016 . The facilities had a weighted-average stated interest rate of 2.83% and 2.59% at December 31, 2015 and 2014, respectively. At December 31, 2015 , $1.3 billion of the outstanding borrowings were secured by $1.4 billion in originated and purchased residential loans and $87.4 million of outstanding borrowings were secured by $103.8 million in repurchased HECMs and real estate owned.

Borrowings utilized to fund the origination and purchase of residential loans are due upon the earlier of sale or securitization of the loan or within 60 to 90 days of borrowing. On average, the Company sells or securitizes these loans within 20 days of borrowing. Borrowings utilized to repurchase HECMs and real estate owned are due upon the earlier of receipt of claim proceeds from HUD or receipt of proceeds from liquidation of the related real estate owned. In any event, borrowings associated with HECMs are due within 364 days of borrowing while borrowings relating to real estate owned are due within 180 days. In accordance with the terms of the agreements, the Company may be required to post cash collateral should the fair value of the pledged assets decrease below certain contractual thresholds. The Company is exposed to counterparty credit risk associated with the repurchase agreements in the event of non-performance by the counterparties. The amount at risk during the term of the repurchase agreement is equal to the difference between the amount borrowed by the Company and the fair value of the pledged assets. The Company mitigates this risk through counterparty monitoring procedures, including monitoring of the counterparties' credit ratings and review of their financial statements.

All of the Company’s master repurchase agreements contain customary events of default and covenants, the most significant of which are financial covenants. Financial covenants most sensitive to the Company’s operating results and financial position are minimum tangible net worth requirements, indebtedness to tangible net worth ratio requirements, and minimum liquidity and profitability requirements.

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On June 22, 2015, as a result of a group of affiliated stockholders of the Company publicly disclosing on a Schedule 13D filing with the SEC that it had acquired beneficial ownership in excess of 20.0% of the outstanding common stock of the Company, a “change of control” event of default occurred under a master repurchase agreement relating to one of the Company’s mortgage warehouse facilities, which then caused a “cross-default” event of default to occur under certain other master repurchase agreements relating to certain additional Company mortgage warehouse facilities. The Company promptly obtained waivers for such “change of control” event of default and each related “cross-default” event of default from all applicable lenders. The master repurchase agreement under which the “change of control” event of default occurred was also amended to remove the change of control provision as it relates to the Parent Company.

As a result of Ditech Financial obtaining these amendments, the Company's subsidiaries were in compliance with their financial covenants relating to warehouse borrowings at December 31, 2015 .

19. Servicing Rights Related Liabilities

Servicing rights related liabilities consists of the following (in thousands):



	December 31,
	2015		2014
Excess servicing spread liabilities	$	100,111	$	66,311
Servicing rights financing	16,889		—
Total servicing rights related liabilities	$	117,000	$	66,311

Excess Servicing Spread Liabilities

The Company sold to WCO portions of the excess servicing spread associated with certain mortgage loans serviced by the Company for $46.8 million and $75.4 million in November 2015 and July 2014, respectively. The Company retains all ancillary income associated with servicing the portfolio in addition to the receipt of a base servicing fee. The Company continues to be the servicer of the residential loans and provides all servicing functions, including responsibility to make advances. Payments on the excess servicing spread liabilities are based on future servicing fees received from residential loans underlying the servicing rights. Interest expense on the excess servicing spread liabilities, which represents the accretion of fair value, was $9.0 million and $4.9 million for the years ended December 31, 2015 and 2014 , respectively. There is no contractual interest rate on the excess servicing spread liabilities.

Contemporaneous with the agreement relating to the sale of the excess servicing spread in November 2015, the Company entered into a recapture agreement with WCO entitling WCO to the excess servicing spread on the subsequent refinancing by the Company of a loan in the original excess servicing spread portfolio. The new or replacement loan will be governed by the same terms set forth in the related excess servicing spread sale agreement. If the Company is unable to deliver, or WCO is unable to accept delivery of, the excess servicing spread associated with the new or replacement loan, then, in each case, the Company is obligated to “repurchase” the excess servicing spread related to the refinanced loan at the excess spread recapture price, as defined in the recapture agreement, upon the request of WCO.

Servicing Rights Financing

In November 2015, the Company sold to WCO a portfolio of servicing rights for $17.8 million . The Company also entered into an agreement to sub-service the related residential loans. As a result, the Company continues to be the servicer of the residential loans and provides all servicing functions, including responsibility to make advances, and receives a sub-servicing fee for such services. The Company retains all ancillary income associated with servicing the portfolio. WCO is required to reimburse the Company for advances within 30 days of invoice. Payments on the servicing rights financing are based on future servicing fees received from residential loans underlying the servicing rights. At December 31, 2015, the carrying value of the related servicing rights was $16.9 million . The Company has a receivable due from WCO for this sale of $8.9 million at December 31, 2015. Interest expense on the service rights financing, which represents the accretion of fair value, was $0.3 million for the year ended December 31, 2015. There is no contractual interest rate on the service rights financing.

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The Company has a recapture agreement relating to certain sub-servicing performed on behalf of WCO, including sub-servicing relating to the servicing rights sold to WCO during the year ended December 31, 2015, whereby WCO is entitled to the servicing right resulting from the refinancing by the Company of a loan in the original servicing portfolio. The new or replacement loan will be governed by the same terms set forth in the related sub-servicing agreement. In the event the Company originates a new loan that is not in compliance with the recapture agreement or fails to deliver the new loan to Fannie Mae or Freddie Mac as soon as commercially reasonable, the Company, upon WCO's demand, is obligated to repurchase the servicing right related to the original loan at the servicing rights recapture price, as defined in the recapture agreement, or replace the servicing rights with another loan, subject to mutually agreed upon terms.

20. Corporate Debt

Corporate debt consists of the following (dollars in thousands):



	December 31, 2015				December 31, 2014
	Amortized Cost		Weighted- Average Stated Interest Rate ⁽¹⁾		Amortized Cost		Weighted- Average Stated Interest Rate ⁽¹⁾
2013 Term Loan (unpaid principal balance of $1,423,750 and $1,485,000 at December 31, 2015 and 2014)	$	1,396,884	4.75	%	$	1,452,168	4.75	%
Senior Notes (unpaid principal balance of $538,662 and$575,000 at December 31, 2015 and 2014)	528,337		7.875	%	562,605		7.875	%
Convertible Notes (unpaid principal balance of $290,000 at December 31, 2015 and 2014)	231,723		4.50	%	220,133		4.50	%
Capital leases	480				2,131
Total corporate debt	$	2,157,424			$	2,237,037

__________


(1)	Represents the weighted-average stated interest rate, which may be different from the effective rate which considers the amortization of discounts and issuance costs.

The effective interest rate on corporate debt was 6.56% and 6.50% for the years ended December 31, 2015 and 2014 , respectively. The increase in effective interest rate is due primarily to the voluntary payment of the lower rate 2013 Term Loan during 2015 as described below.

The following table provides the contractual maturities (by unpaid principal balance) of corporate debt at December 31, 2015 (in thousands):



	Corporate Debt
2016	$	480
2017	—
2018	—
2019	303,750
2020	1,410,000
Thereafter	538,662
Total	$	2,252,892

Term Loans and Revolver

In December 2013, the Company refinanced its $700.0 million 2012 Term Loan with the $1.5 billion 2013 Term Loan, and refinanced its $125.0 million 2012 Revolver with the $125.0 million 2013 Revolver. The Company’s obligations under the 2013 Secured Credit Facilities are guaranteed by substantially all of the Company’s subsidiaries and secured by substantially all of the Company’s assets subject to certain exceptions, the most significant of which are the assets of the consolidated Residual and Non-Residual Trusts, the residential loans and real estate owned of the Ginnie Mae securitization pools, and advances of the consolidated financing entities. Refer to the Consolidated Variable Interest Entities section of Note 4 for additional information.

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The terms of the 2013 Secured Credit Facilities are summarized in the table below.



Debt Agreement	Interest Rate	Amortization	Maturity/Expiration
$1.5 billion 2013 Term Loan	LIBOR plus 3.75% LIBOR floor of 1.00%	1.00% per annum beginning 1st quarter 2014; remainder at final maturity	December 18, 2020
$125.0 million 2013 Revolver	LIBOR plus 3.75%	Bullet payment at maturity	December 19, 2018

The capacity under the 2013 Revolver allows requests for the issuance of LOCs of up to $25.0 million or total cash borrowings of up to $125.0 million less any amounts outstanding in issued LOCs. There have been no borrowings under the 2013 Revolver. At December 31, 2015 , the Company had outstanding $0.3 million in an issued LOC with remaining availability under the 2013 Revolver of $124.7 million . The commitment fee on the unused portion of the 2013 Revolver is 0.50% per annum. During the year ended December 31, 2015, the Company made a voluntary payment of $50.0 million on the 2013 Term Loan that resulted in a loss on extinguishment of $1.0 million due to the write-off of the related issue costs. The loss on extinguishment is recorded in gains (losses) on extinguishments on the consolidated statements of comprehensive income (loss).

The Company completed an analysis to determine whether the refinancing of its 2012 Term Loan in 2013 met the criteria to be accounted for as a modification or an extinguishment under accounting guidance. The 2012 Term Loan was comprised of a syndicate of lenders, and the analyses required the comparison of debt cash flows on a lender-by-lender basis under each loan prior to and subsequent to the refinancing. The cash flow comparison was completed only for those lenders participating in the syndication both prior and subsequent to each refinancing and resulted in treatment of each refinancing partially as a modification, and partially as an extinguishment. Those lenders participating in the syndication prior to, but not subsequent to, each refinancing were treated as extinguished debt. Those lenders participating in the syndication subsequent to, but not prior to, each refinancing were treated as new borrowings. As a result, the Company recognized a loss on extinguishment of $12.5 million related to the 2012 Term Loan for the year ended December 31, 2013.

Senior Notes

In December 2013, the Company completed the sale of $575.0 million Senior Notes. The Senior Notes pay interest semi-annually on June 15 and December 15, commencing on June 15, 2014, at a rate of 7.875% per annum, and mature on December 15, 2021 .

During the year ended December 31, 2013, the Company generated net proceeds of $561.3 million from the Senior Notes after deducting underwriting discounts, commissions, and offering expenses. The Company used the net proceeds from the Senior Notes, together with borrowings under its 2013 Term Loan, to finance the acquisition of servicing rights, to repay indebtedness outstanding under its previously existing 2012 Term Loan, to pay related fees and expenses and for general corporate purposes.

On October 14, 2014, the Company filed with the SEC a registration statement under the Securities Act so as to allow holders of the Senior Notes to exchange their Senior Notes for the same principal amount of a new issue of notes, or the Exchange Notes, with identical terms, except that the Exchange Notes are not subject to certain restrictions on transfer. The registration statement was declared effective by the SEC on October 27, 2014 and the exchange offer closed on December 2, 2014.

During the fourth quarter of 2015, the Company repurchased Senior Notes with a carrying value of $35.7 million and an unpaid principal balance of $36.3 million for $30.0 million that resulted in a gain on extinguishment of $5.7 million , which is recorded in gains (losses) on extinguishments on the consolidated statements of comprehensive income (loss).

Convertible Notes

In October 2012, the Company completed the sale of $290 million Convertible Notes. The Convertible Notes pay interest semi-annually on May 1 and November 1, commencing on May 1, 2013, at a rate of 4.50% per annum, and mature on November 1, 2019 .

Prior to May 1, 2019, the Convertible Notes will be convertible only upon specified events including the satisfaction of a sales price condition, satisfaction of a trading price condition or specified corporate events and during specified periods, and, on or after May 1, 2019, at any time. The Convertible Notes will initially be convertible at a conversion rate of 17.0068 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $58.80 per share, which is a 40% premium to the public offering price of the Company’s common stock in the 2012 Common Stock Offering of $42.00 . Upon conversion, the Company may pay or deliver, at its option, either cash, shares of the Company’s common stock, or a combination of cash and shares of common stock. It is the Company’s intent to settle all conversions through combination settlement, which involves repayment of an amount of cash equal to the principal amount and any excess of conversion value over the principal amount in shares of common stock.

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During the years ended December 31, 2015, 2014 and 2013 , the Company recorded $24.6 million , $23.4 million and $22.4 million , respectively, in interest expense related to its Convertible Notes, which included $10.8 million , $9.8 million and $8.8 million in amortization of discount, respectively. The effective interest rate of the liability component of the Convertible Notes, which includes the amortization of discount and debt issuance costs, was 10.6% for the years ended December 31, 2015, 2014 and 2013 . At December 31, 2015 and 2014 , the unamortized discount was $53.5 million and $64.3 million , respectively. The unamortized discount at December 31, 2015 will be recognized over its remaining life of 3.8 years.

21. Mortgage-Backed Debt

Mortgage-backed debt consists of debt issued by the Residual and Non-Residual Trusts that have been consolidated by the Company. The mortgage-backed debt of the Residual Trusts is carried at amortized cost while the mortgage-backed debt of the Non-Residual Trusts is carried at fair value.

Provided in the table below is information regarding the mortgage-backed debt (dollars in thousands):



	December 31, 2015				December 31, 2014
	Carrying Value		Weighted-Average Stated Interest Rate ⁽¹⁾		Carrying Value		Weighted-Average Stated Interest Rate ⁽¹⁾
Mortgage-backed debt at amortized cost (unpaid principal balance of $474,759 and $1,099,997 at December 31, 2015 and 2014, respectively) ⁽²⁾	$	469,339	6.07	%	$	1,086,660	6.63	%
Mortgage-backed debt at fair value (unpaid principal balance of $585,839 and $657,174 at December 31, 2015 and 2014, respectively)	582,340		5.53	%	653,167		5.45	%
Total mortgage-backed debt	$	1,051,679	5.77	%	$	1,739,827	6.19	%

__________


(1)	Represents the weighted-average stated interest rate, which may be different from the effective rate, which considers the amortization of discounts and issuance costs.


(2)	During the year ended December 31, 2015, the Company sold its residual interests in seven of the Residual Trusts that it previously consolidated. Refer to Note 4 for additional information.

Borrower remittances received on the residential loans collateralizing this debt, as well as draws under LOCs servicing as credit enhancements to certain Non-Residual Trusts, are used to make principal and interest payments due on the mortgage-backed debt. The Trust Notes issued by the Residual Trusts have final maturities ranging from 2036 to 2040 . The m aturity of the Company's mortgage-backed debt is directly affected by principal prepayments on the collateral. As a result, the actual m aturity of the mortgage-backed debt is likely to occur earlier than the stated maturity. Certain of the Company’s mortgage-backed debt issued by the Residual Trusts is subject to redemption according to specific terms of the respective indenture agreements, including the option to exercise a clean-up call. The mortgage-backed debt issued by the Non-Residual Trusts is subject to mandatory clean-up calls. The Company is obligated to exercise the clean-up calls on the earliest possible call date, which is the date the principal amount of each loan pool falls to 10% of the original principal amount. The Company expects to call these securitizations beginning in 2017 and continuing through 2019 . At December 31, 2015 , mortgage-backed debt was collateralized by $1.1 billion of assets including residential loans, receivables related to the Non-Residual Trusts, real estate owned and restricted cash and cash equivalents. Refer to the Consolidated Variable Interest Entities section of Note 4 for further information.

22. HMBS Related Obligations

The weighted-average stated interest rate on HMBS related obligations was 4.04% and 4.18% at December 31, 2015 and 2014 , respectively. At December 31, 2015 , the weighted-average remaining life was 3.5 years. The unpaid principal balance and the carrying value of residential loans and real estate owned pledged as collateral to the securitization pools was $10.0 billion and $10.6 billion , respectively, at December 31, 2015 .

23. Share-Based Compensation

The Company established the 2011 Plan which permits the grant of stock options, restricted stock, RSUs, performance-shares and other stock-based awards to the Company’s officers, directors, employees, and other persons expected to provide significant services to the Company and its subsidiaries through May 10, 2021 . A total of 6,550,000 shares were authorized to be granted under the 2011 Plan at December 31, 2012, some of which were previously granted under incentive plans that were in effect prior to the 2011 Plan. In May 2013, the 2011 Plan was amended to increase the authorized shares by 2,265,000 shares, resulting in a total of 8,815,000 shares of common stock available for issuance under the 2011 Plan as amended.

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The 2011 Plan is administered by the Compensation Committee, which is comprised of two or more independent members of the Board of Directors. Under the 2011 Plan, the maximum number of shares for which options or stock appreciation rights may be granted to any participant in any calendar year is 2.0 million shares, and the maximum number of shares that may be paid to any participant in any calendar year in the form of RSUs, performance shares or other stock-based awards, in each case that are performance-based compensation, is 2.0 million shares determined as of the date of payout. Each contractual term of an option granted is fixed by the Compensation Committee, and except for limited circumstances, the term cannot exceed ten years from the grant date. Restricted stock, RSUs and performance-share awards have a vesting period as defined by the applicable award agreement.

At December 31, 2015 , there were 2,021,939 shares underlying the 2011 Plan that are authorized, but not yet granted. The Company issues new shares of stock upon the exercise of stock options and the vesting of restricted stock, RSUs and performance shares. Awards of stock options, restricted stock, and RSUs granted in recent years generally vest over a three or four year period and are based on service. Awards of performance shares granted in recent years generally vest over a three year performance period and are based on service and a market-based performance condition.

Stock Options

The following table summarizes the activity for stock options granted by the Company:



	Shares		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in $000s)
Outstanding at January 1, 2013	1,955,799		$	17.92	7.02	$	49,458
Granted	1,050,904		33.79
Exercised	(166,711	)	17.39			3,561
Forfeited or expired	(113,439	)	31.33
Outstanding at December 31, 2013	2,726,553		23.51		7.22	32,785
Granted	67,507		29.11
Exercised	(303,449	)	18.12			3,468
Forfeited or expired	(126,883	)	31.24
Outstanding at December 31, 2014	2,363,728		23.95		6.34	1,223
Granted	789,210		16.39
Exercised	(15,458	)	12.88			150
Forfeited or expired	(127,247	)	27.66
Outstanding at December 31, 2015	3,010,233		21.87		5.56	443

Exercisable at December 31, 2015	1,376,478		17.87		4.09	443
Options expected to vest as of December 31, 2015	1,586,583		25.49		6.82	—

The grant-date fair values of stock options granted to employees and directors of the Company during the years ended December 31, 2015, 2014 and 2013 were $5.1 million , $0.7 million and $15.8 million , respectively. The weighted-average grant-date fair values of stock options granted during the years ended December 31, 2015, 2014 and 2013 were $6.49 , $10.05 and $15.05 , respectively. The total amount of cash received by the Company from the exercise of stock options was $0.2 million , $5.5 million and $2.9 million for the years ended December 31, 2015, 2014 and 2013 , respectively. The total fair values of options that vested during the years ended December 31, 2015, 2014 and 2013 were $1.7 million , $5.7 million and $4.3 million , respectively.

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Method and Assumptions Used to Estimate Fair Values of Options

The weighted-average assumptions the Company used to value options are shown below.



	For the Years Ended December 31,
	2015		2014		2013
Risk-free interest rate	1.07	%	1.17	%	0.75	%
Dividend yield	—	%	—	%	—	%
Expected life (years)	4.00		4.00		5.00
Volatility	50.00	%	42.56	%	51.45	%
Forfeiture rate	3.50	%	2.20	%	3.14	%

The risk-free interest rate is based on the U.S. Treasury yield in effect at the grant date with a term equal to the expected life of the option. The expected life of the options represents the period of time the options are expected to be outstanding. The dividend yield is based on the Company’s estimated annual dividend payout at the grant date. Volatility is based on the Company’s historical data, and in the case of the year ended December 31, 2013, also includes that of a peer group of companies due to the lack of stock-price history. The forfeiture rate is based on historical termination experience.

Non-Vested Share Activity

The Company’s non-vested share-based awards consist of RSUs and performance shares. The grant date fair values of share-based awards granted during the years ended December 31, 2015, 2014 and 2013 were $18.4 million , $24.0 million and $1.3 million , respectively.

The following table summarizes the activity for non-vested awards granted by the Company:



	Shares		Weighted-Average Grant-Date Fair Value Per Share		Weighted-Average Contractual Term (in years)	Aggregate Intrinsic Value (in $000s)
Outstanding at January 1, 2013	815,928		$	22.32	3.09	$	35,101
Granted	36,576		35.79
Vested and settled	(522,762	)	21.16			20,922
Forfeited	(21,316	)	25.73
Outstanding at December 31,2013	308,426		25.65		1.90	10,906
Granted	738,164		32.46
Vested and settled	(30,898	)	29.45			910
Forfeited	(94,133	)	8.48
Outstanding at December 31, 2014	921,559		30.42		1.84	15,215
Granted	1,046,362		17.62
Vested and settled	(303,166	)	24.31			4,132
Forfeited	(165,610	)	23.96
Outstanding at December 31, 2015	1,499,145		23.42		1.88	21,318
Non-vested shares expected to vest as of December 31, 2015	1,459,347		23.54		1.87	20,752

The total fair values of shares that vested and settled during the years ended December 31, 2015, 2014 and 2013 , were $7.4 million , $0.9 million and $11.1 million , respectively.

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Method and Assumptions Used to Estimate Fair Values of Performance-Share Awards

The weighted-average assumptions the Company used to value performance-share awards are shown below.



	For the Years Ended December 31,
	2015			2014
Risk-free interest rate	0.75		%	0.82		%
Simulation period (years)	2.72			2.76
Volatility	52.30		%	46.58		%
Beginning TSR price	$	16.57		$	28.09
Forfeiture rate	3.50		%	2.20		%

The risk-free interest rate is based on the U.S. Treasury yield in effect at the grant date with a term equal to the simulation period used in the Monte-Carlo simulation model. The simulation period is equal to the performance period associated with the performance shares. Volatility is based on the Company’s historical data. Beginning TSR price is equal to the average closing price for the last twenty trading days immediately prior to the first day of the performance period. The forfeiture rate is based on historical termination experience. The performance shares vest December 31, 2016 and 2017, and the shares ultimately awarded will be based upon the performance percentage, which can range from 0% to 200% of the target performance award grant. The performance shares ultimately awarded upon vesting are based on the percentile rank of the Company’s TSR relative to the distribution of the TSRs of peer group companies.

Share-Based Compensation Expense

Share-based compensation expense recognized by the Company is net of actual forfeitures as well as estimated forfeitures, which are estimated based on historical termination behavior. Share-based compensation expense of $20.9 million , $14.5 million and $13.0 million for the years ended December 31, 2015, 2014 and 2013 , respectively, is included in salaries and benefits expense on the consolidated statements of comprehensive income (loss). The tax benefit recognized related to share-based compensation expense for the years ended December 31, 2015, 2014 and 2013 was $8.0 million , $5.5 million and $4.9 million , respectively. For unvested stock options and shares, the Company had $4.4 million and $12.8 million , respectively, of total unrecognized compensation cost at December 31, 2015 , which are both expected to be recognized over a weighted-average period of 1.3 years .

On October 1, 2013, the Company and Charles E. Cauthen, the Company’s previous Executive Vice President and Chief Financial Officer, entered into a separation agreement, pursuant to which the vesting dates of certain stock options awarded to Mr. Cauthen would be accelerated. The acceleration of vesting dates for these awards was considered a Type III modification for share-based compensation, and, as a result, the Company reversed all expense previously recorded for these awards and recorded the new compensation expense over the new requisite service period. The total incremental compensation expense associated with these awards was $1.2 million and $1.1 million for the years ended December 31, 2014 and 2013, respectively.

On October 2, 2015, the Company and Mark J. O'Brien, the Company’s former Chief Executive Officer, entered into a retirement agreement effective October 10, 2015 pursuant to which the vesting dates of certain RSUs and stock options previously awarded to Mr. O'Brien were accelerated to October 10, 2015. Mr. O'Brien is also entitled to be paid the full amount of shares earned based on performance with regard to his currently outstanding awards of performance shares as if Mr. O'Brien remained an employee of the Company through the date on which the amount of the payout under such performance shares is determined. The retention of the performance shares was considered a Type III modification for share-based compensation, and, as a result, the Company reversed all expense previously recorded for these retained awards and recorded the new compensation expense over the new requisite service period. The compensation benefit resulting from these modifications was $1.3 million .

24. Income Taxes

For the years ended December 31, 2015, 2014 and 2013 , the Company recorded income tax expense (benefit) of $(141.2) million , $(9.0) million and $159.4 million , respectively. The increase in income tax benefit for the year ended December 31, 2015 as compared to 2014 results primarily from the increase in loss before income taxes offset by the impact on income taxes for non-deductible expenses such as the impairment of goodwill of the Reverse Mortgage reporting unit. The change from income tax expense for the year ended December 31, 2013 to a tax benefit for the year ended December 31, 2014 was primarily driven by the change from taxable income to a loss offset in part by the impact on income taxes for non-deductible expenses such as the impairment of goodwill of the Reverse Mortgage reporting unit.

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Income tax expense (benefit) consists of the following components (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Current
Federal	$	46,331		$	25,417		$	54,093
State and local	8,759			979			7,840
Current income tax expense	55,090			26,396			61,933
Deferred
Federal	(159,171		)	(33,788		)	84,974
State and local	(37,155		)	(1,620		)	12,444
Deferred income tax expense (benefit)	(196,326		)	(35,408		)	97,418
Total income tax expense (benefit)	$	(141,236	)	$	(9,012	)	$	159,351

Income tax expense (benefit) at the Company’s effective tax rate differed from the statutory tax rate as follows (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Income (loss) before income taxes	$	(404,426	)	$	(119,340	)	$	412,818

Tax provision at statutory tax rate of 35%	(141,549		)	(41,769		)	144,486
Effect of:
Goodwill impairment	19,789			28,794			—
State and local income tax	(16,979		)	(1,649		)	12,828
Contingent earn-out payments	—			—			1,680
Penalties	—			5,140			202
Other	(2,497		)	472			155
Total income tax expense (benefit)	$	(141,236	)	$	(9,012	)	$	159,351

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The following table summarizes the components of deferred tax assets and liabilities (in thousands):



	December 31,
	2015			2014
Deferred tax assets
Reverse loans	$	46,906		$	43,285
Servicing rights related liabilities	45,063			26,610
Servicer and protective advances	37,751			24,580
Intangible assets	37,013			30,701
Curtailment liability	36,086			24,173
Net operating losses	36,014			3,206
Accrued expenses	23,824			26,202
Mandatory call obligation	19,768			20,596
Accrued legal contingencies and settlements	10,284			28,916
Other	48,668			36,077
Total deferred tax assets	341,377			264,346
Valuation allowance	(2,999		)	(3,096		)
Total deferred tax assets, net of valuation allowance	338,378			261,250
Deferred tax liabilities
Servicing rights	(151,163		)	(182,560		)
Net investment in residential loans	(34,967		)	(57,906		)
Discount on Convertible Notes	(19,743		)	(24,799		)
Intangible assets	(9,723		)	(14,480		)
Goodwill	(1,498		)	(48,130		)
Other	(13,234		)	(19,992		)
Total deferred tax liabilities	(230,328		)	(347,867		)
Deferred tax asset (liability), net	$	108,050		$	(86,617	)

The following table summarizes the activity in the valuation allowance on deferred tax assets (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Balance at beginning of year	$	3,096		$	7,453		$	30,712
Charges to income tax expense	—			24			72
Deductions	(97		)	(4,381		)	(23,331		)
Balance at end of year	$	2,999		$	3,096		$	7,453

The Company is required to establish a valuation allowance for deferred tax assets and record a charge to income if it is determined, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets will not be realized. If the Company did conclude that a valuation allowance was required, the resulting loss could have a material adverse effect on its financial condition and results of operations.

The Company’s evaluation focused on identifying significant, objective evidence that it will be able to realize its deferred tax assets in the future. Approximately $36.0 million of the Company’s net deferred tax asset relates to net operating losses which can be carried back two years and forward 20 years . At December 31, 2015, the Company has $163.0 million of carryback potential and a net deferred tax asset of $108.1 million . The Company has concluded that the combination of taxable income in prior carryback years, future reversals of existing taxable temporary differences and expected future taxable income in the next three years are sufficient objective evidence to conclude that a valuation allowance on all of the deferred tax assets is not required.

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The valuation allowance recorded at December 31, 2013 related primarily to certain capital loss carryforwards, net operating loss carryforwards, tax basis differences for real estate owned and non-deductible interest for which the Company concluded it was more likely than not that these items would not be realized in the ordinary course of operations before they expire. During the year ended December 31, 2013, pre-REIT capital loss carryforwards expired. As such, these carryforwards and the related valuation allowance were written off. There was no impact to the Company’s effective tax rate as a result of this change in the valuation allowance. In addition, the Company wrote off the valuation allowance related to certain non-deductible interest and the valuation allowance related to certain state tax net operating losses. The net impact of these changes had an immaterial effect on the Company’s effective tax rate for the year ended December 31, 2013. During the year ended December 31, 2014, the Company lost the ability to claim the tax basis difference related to certain real estate owned due to the expiration of the statute of limitations and the liquidation of these properties. As such, the basis difference and the related valuation allowance were written off. There was no impact to the Company's effective tax rate during the year ended December 31, 2014 as the result of this change in the valuation allowance. The valuation allowance decreased marginally during the year ended December 31, 2015, as a result of the write-off of the net operating loss attributable to Marix upon its deconsolidation. There was no impact to the Company's effective tax rate during the year ended December 31, 2015 as the result of this change in the valuation allowance. The valuation allowance at December 31, 2015 is primarily attributable to net operating loss carry forwards where the Company believes it is more likely than not that these deferred tax assets will not be realized in the ordinary course of operations before they expire. Other than for those deferred tax assets that have a valuation allowance, management believes it is more likely than not that forecasted income together with future reversals of existing taxable temporary differences, will be sufficient to fully recover the deferred tax assets.

At December 31, 2015 , the Company had net operating loss carryforwards of $96.0 million that will expire in 2028 through 2035 .

Uncertain Tax Positions

The Company recognizes tax benefits in accordance with the accounting guidance concerning uncertainty in income taxes. This guidance establishes a more-likely-than-not recognition threshold that must be met before a tax benefit can be recognized in the consolidated financial statements.

A reconciliation of the beginning and ending balances of the total liability for unrecognized tax benefits is as follows (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Balance at the beginning of the year	$	8,705		$	12,523		$	17,537
Increases (reductions) related to prior year tax positions	33,858			(1,571		)	(5,921		)
Increases related to current year tax positions	17,650			1,377			2,044
Reductions as a result of a lapse of the statute of limitations	(2,065		)	(3,624		)	(1,137		)
Balance at the end of the year	$	58,148		$	8,705		$	12,523

The total amount of unrecognized tax benefits that would affect the effective tax rate if recognized was $8.3 million and $4.9 million at December 31, 2015 and 2014 , respectively. For the years ended December 31, 2015, 2014 and 2013 , income tax expense included $0.2 million , $1.8 million and $0.7 million , respectively, for interest and penalties accrued on the liability for unrecognized tax benefits. At December 31, 2015 and 2014 , accrued interest and penalties were $6.4 million and $6.2 million , respectively, which are included in payables and accrued liabilities on the consolidated balance sheets.

The Company’s tax years that remain subject to examination by the IRS are 2012 through 2015 and by various states are 2000 through 2015 .

25. Common Stock and Earnings (Loss) Per Share

Share Repurchase Plan

On May 6, 2015, the Board of Directors of the Company authorized the Company to repurchase up to $50.0 million of shares of the Company’s common stock, during the period beginning on May 11, 2015 and ending on May 31, 2016 . Repurchases may be made from time to time based upon the Company’s discretion through one or more open market or privately negotiated transactions, and pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act. The timing and amounts of any such repurchases will depend on a variety of factors, including the market price of the Company’s shares and general market and economic conditions. The share repurchase program may be extended, suspended or discontinued at any time without notice.

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At December 31, 2015, the Company had repurchased 2,382,733 shares of common stock pursuant its repurchase plan at an aggregate cost of $28.1 million , or an average cost of $11.78 per share. Shares of common stock that the Company repurchases are canceled and return to the status of authorized but unissued shares.

Rights Agreement

On June 29, 2015, the Company and Computershare, as Rights Agent, entered into a Rights Agreement. Also on June 29, 2015 , the Board of Directors of the Company authorized and the Company declared a dividend of one preferred stock purchase right for each outstanding share of common stock of the Company. The dividend was payable on July 9, 2015 to stockholders of record as of the close of business on July 9, 2015 and entitles the registered holder to purchase from the Company one one-thousandth of a fully paid non-assessable share of Junior Participating Preferred Stock, par value $0.01 per share, of the Company at a price of $74.16 subject to adjustment as provided in the Rights Agreement. The terms of the preferred stock purchase rights are set forth in the Rights Agreement, which is summarized in the Company's Current Report on Form 8-K dated June 29, 2015. Subject to certain limited exceptions specified in the Rights Agreement (including the amendments described below), the rights are not exercisable until a person or group of persons acting in concert acquires beneficial ownership, as defined in the Rights Agreement, of more than 20% of the Company's outstanding shares of common stock. One such exception is that a person or group that already owned 20% or more of the Company's outstanding shares of common stock before the first public announcement of the rights plan may continue to own those shares without causing the rights to become exercisable. The rights plan will expire on June 29, 2016 , unless the rights are earlier redeemed or exchanged by the Company.

Amendment No. 1 to the Rights Agreement

On November 16, 2015, the Company and Computershare entered into Amendment No. 1 to the Rights Agreement. Upon the terms and subject to the conditions set forth in the Rights Agreement and this Amendment, (i) Birch Run and its affiliates and associates may acquire up to 25% of the total voting power of all shares of the Company’s common stock without triggering the exercisability of the preferred share purchase rights attached to shares of the Company’s common stock pursuant to the Rights Agreement, and (ii) shares of the Company’s common stock received by directors as compensation for their services, pursuant to any director compensation program of the Company, will also not trigger the exercisability of such rights.

Amendment No. 2 to the Rights Agreement

On November 22, 2015, the Company and Computershare entered into Amendment No. 2 to the Rights Agreement. Upon the terms and subject to the conditions set forth in the Rights Agreement and this Amendment, Baker Street may acquire up to 25% of the total voting power of all shares of the Company’s common stock without triggering the exercisability of the preferred share purchase rights attached to shares of the Company’s common stock pursuant to the Rights Agreement.

Dividends on Common Stock

The decision to declare and pay dividends is made at the discretion of the Company’s Board of Directors and will depend on, among other things, results of operations, cash requirements, financial condition, contractual restrictions and other factors that the Company’s Board of Directors may deem relevant.

Many of the Company’s subsidiaries are subject to restrictions on their ability to pay dividends or otherwise transfer funds to other consolidated subsidiaries and, ultimately, to the Parent Company. These restrictions include, but are not limited to, minimum levels of net worth and other financial requirements imposed by GSEs, Ginnie Mae and other licensing requirements. The aggregate restricted net assets of these subsidiaries was $785.0 million at December 31, 2015 ; however, the restrictions on the net assets of these subsidiaries do not directly limit the ability to pay dividends from consolidated retained earnings.

In addition, the Company’s ability to pay dividends is limited by conditions set forth in the agreements governing the 2013 Secured Credit Facilities and the Senior Notes.

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Earnings (Loss) Per Share

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations shown on the consolidated statements of comprehensive income (loss) (in thousands, except per share data):



	For the Years Ended December 31,
	2015			2014			2013
Basic earnings (loss) per share
Net income (loss)	$	(263,190	)	$	(110,328	)	$	253,467
Less: Net income allocated to unvested participating securities	—			—			(3,719		)
Net income (loss) available to common stockholders (numerator)	$	(263,190	)	$	(110,328	)	$	249,748

Weighted-average common shares outstanding (denominator)	37,578			37,631			37,003

Basic earnings (loss) per common and common equivalent share	$	(7.00	)	$	(2.93	)	$	6.75

Diluted earnings (loss) per share
Net income (loss)	$	(263,190	)	$	(110,328	)	$	253,467
Less: Net income allocated to unvested participating securities	—			—			(3,651		)
Net income (loss) available to common stockholders (numerator)	$	(263,190	)	$	(110,328	)	$	249,816

Weighted-average common shares outstanding	37,578			37,631			37,003
Add: Effect of dilutive stock options, non-participating securities and convertible notes	—			—			698
Diluted weighted-average common shares outstanding (denominator)	37,578			37,631			37,701

Diluted earnings (loss) per common and common equivalent share	$	(7.00	)	$	(2.93	)	$	6.63

A portion of the Company’s unvested RSUs are considered participating securities. During periods of net income, the calculation of earnings per share for common stock is adjusted to exclude the income attributable to the participating securities from the numerator and exclude the dilutive impact of those shares from the denominator. During periods of net loss, as was the case for the years ended December 31, 2015 and 2014, no effect is given to the participating securities because they do not share in the losses of the Company.

The following table summarizes anti-dilutive securities excluded from the computation of dilutive loss per share:



	For the Years Ended December 31,
	2015	2014	2013
Outstanding share-based compensation awards:
Stock options	3,010	2,364	960
Performance shares ⁽¹⁾	—	—	—
Restricted stock units	773	224	—
Assumed conversion of Convertible Notes	4,932	4,932	4,932

__________


(1)	Performance shares represent the number of shares expected to be issued based on the performance percentage as of the end of the reporting periods above.

The Convertible Notes are antidilutive when calculating earnings (loss) per share when the Company's average stock price is less than $58.80 . Upon conversion of the Convertible Notes, the Company may pay or deliver, at its option, cash, shares of the Company’s common stock, or a combination of cash and shares of common stock. It is the Company’s intent to settle all conversions through combination settlement, which involves repayment of an amount of cash equal to the principal amount and any excess of conversion value over the principal amount in shares of common stock.

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26. Supplemental Disclosures of Cash Flow Information

The Company’s supplemental disclosures of cash flow information are summarized as follows (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	288,648		$	316,094		$	278,679
Cash paid (received) for taxes	(1,590		)	(5,338		)	96,849
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Servicing rights capitalized upon sales of loans	306,741			214,285			187,749
Real estate owned acquired through foreclosure	122,911			122,213			107,629
Acquisition of trading security received as consideration for sale of servicing rights	60,094			—			—
Residential loans originated to finance the sale of real estate owned	22,022			52,130			63,219
Acquisition of servicing rights	5,857			60,406			—
Servicing rights capitalized upon deconsolidation of Residual Trusts	3,133			—			—

27. Segment Reporting

Management has organized the Company into three reportable segments based primarily on its services as follows:

•

Servicing — consists of operations that perform servicing for third-party credit owners of mortgage loans for a fee and the Company’s own mortgage loan portfolio. The Servicing segment also operates complementary businesses consisting of an insurance agency serving residential loan borrowers and credit owners and a collections agency which performs collections of post charge-off deficiency balances for third parties and the Company. In addition, the Servicing segment holds the assets and mortgage-backed debt of the Residual Trusts.


•	Originations — consists of operations that originate and purchase mortgage loans that are intended for sale to third parties.


•	Reverse Mortgage — consists of operations that purchase and originate HECMs that are securitized, but remain on the consolidated balance sheet as collateral for secured borrowings. This segment performs servicing for third-party credit owners and the Company and provides other complementary services for the reverse mortgage market, such as real estate owned property management and disposition.

During the first quarter of 2015, the Company took actions to simplify its business including the reorganization of its reportable segments to align with changes in the management reporting structure. These changes affect how management monitors operating performance and allocates resources in the current business environment. As a result of this reorganization, the Company modified the Servicing segment by combining the ARM, Insurance, and Loans and Residuals businesses into the Servicing segment. The Company also made a change to the composition of indirect costs and depreciation and amortization allocated to the business segments and established an intersegment charge between the Servicing and Originations segments for certain loan originations associated with the Company's mortgage loan servicing portfolio. The changes to cost structure align with the business segments supported and segment performance metrics utilized by management. Indirect costs continue to be allocated based on headcount. The Company has recast segment operating results and total assets of prior periods to reflect these changes. As a result of the changes, income before taxes for the Originations segment decreased by $20.0 million while loss before taxes for the Servicing and Reverse Mortgage segments and the Other non-reportable segment decreased by $16.5 million , $3.3 million and $0.2 million , respectively, for the year ended December 31, 2014. Income before taxes for the Servicing, Originations and Reverse Mortgage segments increased (decreased) by $31.5 million , $(36.6) million and $4.9 million , respectively, while loss before taxes for the Other non-reportable segment decreased by $0.2 million , for the year ended December 31, 2013. Total assets for the Servicing segment and the Other non-reportable segment decreased by $3.0 million and $40.1 million , respectively, and total assets eliminated decreased by $43.1 million at December 31, 2014.

The following tables present select financial information of reportable segments (in thousands). The Company has presented the revenue and expenses of the Non-Residual Trusts and other non-reportable operating segments, as well as certain corporate expenses that have not been allocated to the business segments, in Other. Intersegment servicing revenues and expenses have been eliminated. Intersegment revenues are recognized on the same basis of accounting as such revenue is recognized on the consolidated statements of comprehensive income (loss). The changes addressed above have been reflected in the segment information presented below for all periods.

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	For the Year Ended December 31, 2015
	Servicing			Originations		Reverse Mortgage			Other			Eliminations			Total Consolidated
Net servicing revenue and fees ^{(1) (2)}	$	462,544		$	—	$	42,648		$	—		$	(10,925	)	$	494,267
Net gains (losses) on sales of loans ⁽²⁾	3,699			448,533		(98		)	—			1,706			453,840
Interest income on loans	74,303			62		—			—			—			74,365
Net fair value gains on reverse loans and related HMBS obligations	—			—		98,265			—			—			98,265
Insurance revenue	47,201			—		—			—			—			47,201
Other revenues ^{(3) (4)}	81,756			45,250		6,794			5,345			(32,824		)	106,321
Total revenues	669,503			493,845		147,609			5,345			(42,043		)	1,274,259

Interest expense	85,482			36,470		3,902			147,752			—			273,606
Depreciation and amortization	45,437			15,811		7,865			15			—			69,128
Goodwill impairment	151,018			—		56,539			—			—			207,557
Other expenses, net ⁽⁶⁾	663,545			318,028		191,640			30,295			(42,043		)	1,161,465
Total expenses	945,482			370,309		259,946			178,062			(42,043		)	1,711,756

Other gains	6,209			—		—			26,862			—			33,071

Income (loss) before income taxes	$	(269,770	)	$	123,536	$	(112,337	)	$	(145,855	)	$	—		$	(404,426	)

	At December 31, 2015
Total assets	$	5,286,124		$	1,570,258	$	11,127,641		$	1,318,840		$	(711,362	)	$	18,591,501



	For the Year Ended December 31, 2014
	Servicing			Originations		Reverse Mortgage			Other			Eliminations			Total Consolidated
Net servicing revenue and fees ⁽¹⁾	$	575,961		$	—	$	35,446		$	—		$	(9,897	)	$	601,510
Net gains on sales of loans	—			462,172		—			—			—			462,172
Interest income on loans	134,472			83		—			—			—			134,555
Net fair value gains on reverse loans and related HMBS obligations	—			—		109,972			—			—			109,972
Insurance revenue	71,010			—		—			—			—			71,010
Other revenues ^{(3) (5)}	75,991			19,567		11,743			41,179			(40,546		)	107,934
Total revenues	857,434			481,822		157,161			41,179			(50,443		)	1,487,153

Interest expense	121,856			29,841		3,773			147,633			—			303,103
Depreciation and amortization	46,333			17,090		9,284			14			—			72,721
Goodwill impairment	—			—		82,269			—			—			82,269
Other expenses, net ⁽⁶⁾	716,992			317,787		163,003			19,597			(50,443		)	1,166,936
Total expenses	885,181			364,718		258,329			167,244			(50,443		)	1,625,029

Other gains (losses)	(1,540		)	—		—			20,076			—			18,536

Income (loss) before income taxes	$	(29,287	)	$	117,104	$	(101,168	)	$	(105,989	)	$	—		$	(119,340	)

	At December 31, 2014
Total assets	$	6,394,149		$	1,493,851	$	10,476,947		$	1,226,209		$	(641,573	)	$	18,949,583

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	For the Year Ended December 31, 2013
	Servicing			Originations		Reverse Mortgage		Other			Eliminations			Total Consolidated
Net servicing revenue and fees ⁽¹⁾	$	764,180		$	—	$	27,342	$	—		$	(8,133	)	$	783,389
Net gains on sales of loans	—			594,341		4,633		—			—			598,974
Interest income on loans	144,651			—		—		—			—			144,651
Net fair value gains on reverse loans and related HMBS obligations	—			—		120,382		—			—			120,382
Insurance revenue	84,478			—		—		—			—			84,478
Other revenues ⁽³⁾	67,434			36,100		15,307		11,714			(59,930		)	70,625
Total revenues	1,060,743			630,441		167,664		11,714			(68,063		)	1,802,499

Interest expense	112,895			28,469		7,974		123,317			—			272,655
Depreciation and amortization	51,192			8,706		11,119		10			—			71,027
Other expenses, net ⁽⁶⁾	550,033			366,871		143,370		47,360			(68,063		)	1,039,571
Total expenses	714,120			404,046		162,463		170,687			(68,063		)	1,383,253

Other losses	(669		)	—		—		(5,759		)	—			(6,428		)

Income (loss) before income taxes	$	345,954		$	226,395	$	5,201	$	(164,732	)	$	—		$	412,818

__________

(1)

With the exception of $10.9 million , $9.9 million and $8.1 million for the years ended December 31, 2015, 2014 and 2013 , respectively, associated with intercompany activity with the Originations segment and the Other non-reportable segment, all net servicing revenue and fees of the Servicing segment were derived from external customers, including WCO. All net servicing revenue and fees of the Company's Reverse Mortgage segment were derived from external customers.


(2)	Included in net servicing revenue and fees for the year ended December 31, 2015 are late fees of $1.7 million recorded by the Servicing segment which were waived as an incentive for borrowers refinancing their loans. These fees reduced the gain on sale of loans recognized by the Originations segment.

(3)

The Company's Servicing segment includes other revenues of $30.8 million , $40.5 million and $59.9 million for the years ended December 31, 2015, 2014 and 2013 , respectively, associated with fees earned for certain loan originations completed by the Originations segment from leads generated through the Servicing segment's servicing portfolio. The expense incurred by the Originations segment for these originations are included in other expenses, net in the tables above.


(4)	The Company’s Originations segment includes other revenues of $2.0 million for the year ended December 31, 2015 associated with fees earned for supporting the Servicing segment in administrative functions relating to the acquisition of certain servicing rights.


(5)	The Company's Other non-reportable segment recognized $36.8 million in asset management performance fees for year ended December 31, 2014.


(6)	Other expenses, net in the tables above includes salaries and benefits, general and administrative, and other expenses, net consolidated on the statements of comprehensive income (loss).

28. Certain Capital Requirements and Guarantees

The Company's subsidiaries are required to comply with requirements under federal and state laws and regulations, including requirements imposed in connection with certain licenses and approvals, requirements of federal, state, GSE, Ginnie Mae and other business partner loan programs, some of which are financial covenants related to minimum levels of net worth and other financial requirements. If these financial covenants are not met, the Company’s selling and servicing agreements could be terminated and lending and servicing licenses could be suspended or revoked.

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Due to the accounting treatment for reverse loans as secured borrowings when transferred, RMS has obtained an indefinite waiver for certain of these requirements from Ginnie Mae and a waiver through December 2016 from Fannie Mae. In addition, the Parent Company has provided a guarantee whereby it guarantees the performance and obligations of RMS under the Ginnie Mae HMBS program. In the event that the Parent Company fails to honor this guarantee, Ginnie Mae could terminate RMS’s status as a qualified issuer of HMBS as well as take other actions permitted by law that could impact the operations of RMS, including the termination or suspension of RMS’s servicing rights associated with reverse loans underlying HMBS guaranteed by Ginnie Mae. Each subsidiary of the Parent Company that is a Ginnie Mae issuer has also entered into a cross default agreement with Ginnie Mae which provides that, upon the default by a subsidiary under an applicable Ginnie Mae program agreement, Ginnie Mae will have the right to (i) declare a default on all other pools and loan packages of that subsidiary and all pools and loan packages of any affiliated Ginnie Mae issuer that executed the cross default agreement and (ii) exercise any other remedies available under applicable law against each of the affiliated Ginnie Mae issuers.

The Parent Company has also provided a guarantee to (i) Fannie Mae, dated May 31, 2013, for RMS, (ii) Fannie Mae, dated March 17, 2014, for Ditech Financial, and (iii) Freddie Mac, dated December 19, 2013, for Ditech Financial. Pursuant to the RMS guarantee, the Parent Company agreed to guarantee all of the obligations required to be performed or paid by RMS under RMS's mortgage selling and servicing contract or any other agreement between Fannie Mae and RMS relating to mortgage loans or participation interests that RMS delivers or has delivered to Fannie Mae or services or has serviced for, or on behalf of, Fannie Mae. RMS does not currently sell loans to Fannie Mae. Pursuant to the Ditech Financial Fannie Mae guarantee, the Parent Company agreed to guarantee all of the servicing obligations required to be performed or paid by Ditech Financial under Ditech Financial's mortgage selling and servicing agreement, the Fannie Mae selling and servicing guides, or any other agreement between Fannie Mae and Ditech Financial. The Parent Company also agreed to guarantee all selling representations and warranties Ditech Financial has assumed, or may in the future assume, in connection with Ditech Financial's purchase of mortgage servicing rights related to Fannie Mae loans. The Parent Company does not guarantee Ditech Financial's obligations relating to the selling representations and warranties made or assumed by Ditech Financial in connection with the sale and/or securitization of mortgage loans to and/or by Fannie Mae. Pursuant to the Ditech Financial Freddie Mac guarantee, the Parent Company agreed to guarantee all of the seller and servicer obligations required to be performed or paid by Ditech Financial under any agreement between Freddie Mac and Ditech Financial.

Factors that may significantly affect the adequacy of net worth include, but are not limited to, regulatory mandates, the overall economic condition in the mortgage and real estate markets, as well as the financial markets in general. After taking into account the waivers described above, all of the Company's subsidiaries were in compliance with all of their capital requirements at December 31, 2015 and 2014 . The following table presents the required and actual adjusted net worth, as defined by the applicable agreement, for the most restrictive covenant, excluding covenants for which the Company has waivers, applicable to each of the Company's two largest operating subsidiaries (in thousands):



	December 31, 2015				December 31, 2014 ⁽¹⁾
	Required Adjusted Net Worth		Actual Adjusted Net Worth		Required Adjusted Net Worth		Actual Adjusted Net Worth
Ditech Financial	$	671,534	$	1,605,772	$	675,536	$	1,532,480
Reverse Mortgage Solutions	113,264		134,292		108,519		151,583

__________


(1)	Required and actual adjusted net worth at December 31, 2014 for Ditech Financial is represented by that of Green Tree Servicing prior to its merger with Ditech Mortgage Corp and its change of name.

The Company also has financial covenant requirements relating to its servicing advance facilities and its master repurchase agreements. Refer to additional information at Notes 17 and 18.

29. Commitments and Contingencies

Letter of Credit Reimbursement Obligation

As part of an agreement to service the loans in 11 securitization trusts, the Company has an obligation to reimburse a third party for the final $165.0 million drawn under LOCs issued by such third party as credit enhancements to such trusts. The total amount available on these LOCs for these trusts was $260.4 million at December 31, 2015 . The securitization trusts will draw on these LOCs if there are insufficient cash flows from the underlying collateral to pay the bondholders of the securitization trusts. Based on the Company’s estimates of the underlying performance of the collateral in the securitization trusts, the Company does not expect that the final $165.0 million of capacity under the LOCs will be drawn and, therefore, no liability for the fair value of this obligation has been recorded on the Company’s consolidated balance sheets, although actual performance may differ from this estimate in the future.

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Mandatory Clean-Up Call Obligation

The Company is obligated to exercise the mandatory clean-up call obligations assumed as part of an agreement to acquire the rights to service the loans in the Non-Residual Trusts. The Company is required to call these securitizations when each loan pool falls to 10% of the original principal amount and expects to begin to make such calls in 2017 and continuing through 2019 . The total outstanding balance of the residential loans expected to be called at the respective call dates is $417.6 million .

Unfunded Commitments

Reverse Mortgage Loans

At December 31, 2015 , the Company has floating-rate reverse loans in which the borrowers have additional borrowing capacity of $1.3 billion and similar commitments on fixed-rate reverse loans of $0.9 million , primarily in the form of undrawn lines-of-credit. The borrowing capacity includes $868.3 million in capacity that was available to be drawn by borrowers at December 31, 2015 and $475.9 million in capacity that will become eligible to be drawn by borrowers throughout the twelve months ending December 31, 2016 assuming the loans remain performing. There is no termination date for these drawings so long as the loan remains performing. The Company also has short-term commitments to lend $28.7 million and commitments to purchase and sell loans totaling $8.0 million and $31.0 million , respectively, at December 31, 2015 , as well as other commitments to lend of $19.1 million .

Mortgage Loans

The Company has short-term commitments to lend $3.3 billion and commitments to purchase loans totaling $80.6 million at December 31, 2015 . In addition, the Company has commitments to sell $4.7 billion and purchase $0.7 billion in mortgage-backed securities at December 31, 2015 .

Mortgage Origination Contingencies

The Company sells substantially all of its originated or purchased mortgage loans into the secondary market for securitization or to private investors as whole loans. The Company sells conventional conforming and government-backed mortgage loans through GSE and agency-sponsored securitizations in which mortgage-backed securities are created and sold to third-party investors. The Company also sells non-conforming mortgage loans to private investors. In doing so, representations and warranties regarding certain attributes of the loans are made to the third-party investor. Subsequent to the sale, if it is determined that a loan sold is in breach of these representations or warranties, the Company generally has an obligation to cure the breach. In general, if the Company is unable to cure such breach, the purchaser of the loan may require the Company to repurchase such loan for the unpaid principal balance, accrued interest, and related advances, and in any event, the Company must indemnify such purchaser for certain losses and expenses incurred by such purchaser in connection with such breach. The Company’s credit loss may be reduced by any recourse it has to correspondent lenders that, in turn, have sold such residential loans to the Company and breached similar or other representations and warranties.

The Company's representations and warranties are generally not subject to stated limits of exposure with the exception of certain loans originated under HARP, which limits exposure based on payment history of the loan. At December 31, 2015 , the Company’s maximum exposure to repurchases due to potential breaches of representations and warranties was $51.3 billion , and was based on the original unpaid principal balance of loans sold from the beginning of 2013 through December 31, 2015 adjusted for voluntary payments made by the borrower on loans for which the Company performs servicing. A majority of the Company's loan sales were servicing retained. The Company's obligations vary based upon the nature of the repurchase demand and the current status of the mortgage loan.

The following table summarizes the activity for the Company's liability associated with representations and warranties (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Balance at beginning of the year	$	10,959		$	9,134		$	75
Provision for new sales	16,008			7,741			9,059
Change in estimate of existing reserves	(2,419		)	(5,068		)	—
Net realized losses on repurchases	(1,403		)	(848		)	—
Balance at end of the year	$	23,145		$	10,959		$	9,134

The Company's estimate of the liability associated with the representations and warranties exposure is included in originations liability as part of payables and accrued liabilities on the consolidated balance sheets.

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Servicing Contingencies

The Company’s servicing obligations are set forth in industry regulations established by HUD and the FHA and in servicing and sub-servicing agreements with the applicable counterparties, such as Fannie Mae, Freddie Mac and other credit owners. Both the regulations and the servicing agreements provide that the servicer may be liable for failure to perform its servicing obligations and further provide remedies for certain servicer breaches.

Reverse Mortgage Loans

Subsequent to the completion of the acquisition of RMS, the Company discovered a failure by RMS to record certain liabilities to HUD, FHA, and/or credit owners related to servicing errors by RMS. FHA regulations provide that servicers meet a series of event-specific timeframes during the default, foreclosure, conveyance, and mortgage insurance claim cycles. Failure to timely meet any processing deadline may stop the accrual of debenture interest otherwise payable in satisfaction of a claim under the FHA mortgage insurance contract and the servicer may be responsible to HUD for debenture interest that is not self-curtailed by the servicer, or for making the credit owner whole for any interest curtailed by FHA due to not meeting the required event-specific timeframes. The Company had a curtailment obligation liability of $107.3 million at December 31, 2015 related to the foregoing which reflects management’s best estimate of the probable incurred claim. The curtailment liability is recorded in payables and accrued liabilities on the consolidated balance sheets. The Company assumed $46.0 million of this liability through the acquisition of RMS, which resulted in a corresponding offset to goodwill and deferred tax assets. During the year ended December 31, 2015 , the Company recorded a provision, net of expected third-party recoveries, related to the curtailment liability of $37.3 million . The Company has potential estimated maximum financial statement exposure for an additional $139.8 million related to similar claims, which are reasonably possible, but which the Company believes are primarily the responsibility of third parties (e.g., prior servicers and/or credit owners). The Company’s potential exposure to a substantial portion of this additional risk relates to the possibility that such third parties may claim that the Company is responsible for the servicing liability or that the Company exacerbated an existing failure by the third party. The actual amount, if any, of this exposure is difficult to estimate and requires significant management judgment as curtailment obligations continue to be an industry issue. The Company is pursuing and will continue to pursue mitigation efforts to reduce both the direct exposure and the reasonably possible third-party-related exposure.

Mortgage Loans

The Company had a curtailment obligation liability of $8.2 million at December 31, 2015 related to mortgage loan servicing which was assumed through an acquisition of servicing rights. The Company is obligated to service the related mortgage loans in accordance with Ginnie Mae requirements, including repayment to credit owners for corporate advances and interest curtailment. The curtailment liability is recorded in payables and accrued liabilities on the consolidated balance sheets.

Lease Obligations

The Company leases office space and office equipment under various operating lease agreements with terms expiring through 2027 , exclusive of renewal option periods. Rent expense was $21.6 million , $26.7 million and $22.1 million for the years ended December 31, 2015, 2014 and 2013 , respectively. Estimated future minimum rental payments under operating leases at December 31, 2015 are as follows (in thousands):



	Amount
2016	$	17,572
2017	17,725
2018	14,827
2019	12,410
2020	11,290
Thereafter	41,437
Total	$	115,261

Litigation and Regulatory Matters

In the ordinary course of business, the Parent Company and its subsidiaries are defendants in, or parties to, pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. Many of these actions and proceedings are based on alleged violations of consumer protection laws governing the Company's servicing and origination activities. In some of these actions and proceedings, claims for substantial monetary damages are asserted against the Company.

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The Company, in the ordinary course of business, is also subject to regulatory and governmental examinations, information requests and subpoenas, inquiries, investigations and threatened legal actions and proceedings. In connection with formal and informal inquiries, the Company receives numerous requests, subpoenas and orders for documents, testimony and information in connection with various aspects of the Company’s activities.

In view of the inherent difficulty of predicting outcomes of such litigation, regulatory and governmental matters, particularly where the claimants seek very large or indeterminate restitution, penalties or damages, or where the matters present novel legal theories or involve a large number of parties, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each pending matter may be.

Reserves are established for pending or threatened litigation, regulatory and governmental matters when it is probable that a loss has been incurred and the amount of such loss can be reasonably estimated. In light of the inherent uncertainties involved in litigation and other legal proceedings, it is not always possible to determine a reasonable estimate of the amount of a probable loss, and the Company may estimate a range of possible loss for consideration in its estimated accruals. The estimates are based upon currently available information, including advice of counsel, and involve significant judgment taking into account the varying stages and inherent uncertainties of such matters. Accordingly, the Company’s estimates may change from time to time and such changes may be material to the consolidated financial results.

At December 31, 2015 , the Company’s recorded reserves associated with legal and regulatory contingencies for which a loss is probable and can be reasonably estimated were approximately $31 million ; however, there can be no assurance that the ultimate resolution of the Company’s pending or threatened litigation, claims or assessments will not result in losses in excess of the Company’s recorded reserves. As a result, the ultimate resolution of any particular legal matter, or matters, could be material to the Company’s results of operations or cash flows for the period in which such matter is resolved.

For matters involving a probable loss where the Company can estimate the range but not a specific loss amount, the aggregate estimated amount of reasonably possible losses in excess of the recorded liability was $0 to approximately $12 million at December 31, 2015 . Given the inherent uncertainties and status of the Company’s outstanding legal and regulatory matters, the range of reasonably possible losses cannot be estimated for all matters; therefore, this estimated range does not represent the Company’s maximum loss exposure. As new information becomes available, the matters for which the Company is able to estimate, as well as the estimates themselves, will be adjusted accordingly.

The following is a description of certain litigation and regulatory matters:

In response to a CID from the FTC issued in November 2010 and a CID from the CFPB in September 2012, Ditech Financial produced documents and other information concerning a wide range of its loan servicing operations. On October 7, 2013, the CFPB notified Ditech Financial that the CFPB’s staff was considering recommending that the CFPB take action against Ditech Financial for alleged violations of various federal consumer financial laws. On February 20, 2014, the FTC and CFPB staff advised Ditech Financial that they had sought authority to bring an enforcement action and negotiate a resolution related to alleged violations of various federal consumer financial laws. In April 2014, Ditech Financial began discussions with the FTC and CFPB staffs to determine if a settlement of the proposed action could be achieved. On February 16, 2015, Ditech Financial informed the agencies that it would agree to the terms of a proposed stipulated order that, subject to approval by the FTC, the CFPB and the court, would settle the matters arising from the FTC and CFPB investigation. The FTC and CFPB approved the proposed order, and on April 21, 2015, the FTC, CFPB, and Ditech Financial filed the proposed order with the United States District Court for the District of Minnesota, which subsequently approved it. Under the order, Ditech Financial, without admitting or denying the allegations in a complaint filed by the FTC and CFPB, agreed to pay: (i) $18.0 million for alleged misrepresentations relating to payment methods that entail convenience fees; (ii) $30.0 million for alleged misrepresentations related primarily to the time it would take to review short sale requests and for alleged delays in processing loan modifications in servicing transfers; and (iii) a $15.0 million civil money penalty. The Company accrued the full amounts required under the order in the Company’s consolidated financial statements as of December 31, 2014 and paid amounts due during the second quarter of 2015.

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The Company has received various subpoenas for testimony and documents, motions for examinations pursuant to Federal Rule of Bankruptcy Procedure 2004, and other information requests from certain Offices of the United States Trustees, acting through trial counsel in various federal judicial districts, seeking information regarding an array of the Company’s policies, procedures and practices in servicing loans to borrowers who are in bankruptcy and the Company's compliance with bankruptcy laws and rules. The information has been provided in response to these subpoenas and requests and the Company's management have met with representatives of certain Offices of the United States Trustees to discuss various issues that have arisen in the course of these inquiries, including compliance with bankruptcy laws and rules. The outcome of the aforementioned proceedings and investigations cannot be predicted, which could result in requests for damages, fines, sanctions, or other remediation. The Company could face further legal proceedings in connection with these matters, and may seek to enter into one or more agreements to resolve these matters. Any such agreement may require the Company to pay fines or other amounts for alleged breaches of law and to change or otherwise remediate the Company's business practices.

In October 2013, the Company received a subpoena from the HUD Office of Inspector General requesting documents and other information concerning (i) the curtailment of interest payments on HECMs serviced or sub-serviced by RMS, and (ii) RMS’ contractual arrangements with a third-party vendor for the management and disposition of real estate owned properties. In response to that subpoena, the Company cooperated with an investigation relating to those issues by the DOJ and the HUD Office of Inspector General. In April 2015, the U.S. District Court for the Middle District of Florida granted a motion by the DOJ to partially intervene in United States ex. rel. McDonald v. Walter Investment Management Corp., et al., No. 8:13-CV-1705-T23-TGW, which was a civil qui tam complaint that had been filed under seal and that named the Company, RMS, other subsidiaries of the Company, and others, as defendants. The complaint asserted claims under the False Claims Act and Florida law and alleged, among other things, that RMS did not comply with certain HUD regulations applicable to the servicing of reverse mortgages and improperly sought interest payments from HUD. On September 3, 2015, the Company entered into a final settlement agreement with the DOJ and HUD that fully resolved all of the claims asserted in the lawsuit and that did not contain any admission or finding of wrongdoing by the Company. The Company accrued $19.6 million relating to this matter at December 31, 2014 and $10.0 million during the nine months ended September 30, 2015. The Company paid the $29.6 million settlement during the third quarter of 2015.

On March 7, 2014, a putative shareholder class action complaint was filed in the United States District Court for the Southern District of Florida against the Company, Mark O’Brien, Charles Cauthen, Denmar Dixon, Marc Helm and Robert Yeary captioned Beck v. Walter Investment Management Corp., et al., No. 1:14-cv-20880 (S.D. Fla.). On July 7, 2014, an amended class action complaint was filed. The amended complaint named as defendants the Company, Mark O’Brien, Charles Cauthen, Denmar Dixon, Keith Anderson, Brian Corey and Mark Helm, and is captioned Thorpe, et al. v. Walter Investment Management Corp., et al. No. 1:14-cv-20880-UU. The amended complaint asserted federal securities law claims against the Company and the individual defendants under Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. Additional claims are asserted against the individual defendants under Section 20(a) of the Exchange Act. On December 23, 2014, the court granted the defendants’ motions to dismiss and dismissed the amended complaint without prejudice. On January 6, 2015, plaintiffs filed a second amended complaint. The second amended complaint asserted the same legal claims and alleged that between May 9, 2012 and August 11, 2014 the Company and the individual defendants made material misstatements or omissions relating to the Company’s internal controls over financial reporting, the processes and procedures for compliance with applicable regulatory and legal requirements by Ditech Financial, the liabilities associated with the Company’s acquisition of RMS, and RMS's internal controls. The complaint sought class certification and an unspecified amount of damages on behalf of all persons who purchased the Company’s securities between May 9, 2012 and August 11, 2014. On January 23, 2015, all defendants moved to dismiss the second amended complaint. On June 30, 2015, the court issued a decision that granted the motions to dismiss in part and denied the motions in part. Among other things, the court dismissed the claims against Messrs. O’Brien, Cauthen, Dixon and Helm and the claims relating to statements about the Company’s acquisition of RMS. On July 10, 2015, plaintiffs filed a third amended complaint that, among other things, added certain allegations concerning the Company’s settlement with the FTC and CFPB. On July 24, 2015, the Company and Messrs. Anderson and Corey filed an answer to the third amended complaint, which denied the substantive allegations and asserted various defenses. On August 30, 2015, Plaintiffs filed a motion for class certification and briefing on that motion was completed on December 11, 2015. The parties are currently engaged in discovery. The Company cannot provide any assurance as to the outcome of the putative shareholder class action or that such an outcome will not have a material adverse effect on its reputation, business, prospects, results of operations, liquidity or financial condition.

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Ditech Financial is subject to several putative class action lawsuits related to lender-placed insurance. These actions allege that Ditech Financial and its affiliates improperly received benefits from lender-placed insurance providers in the form of commissions for work not performed, services provided at a reduced cost, and expense reimbursements that did not reflect the actual cost of the services rendered. Plaintiffs in these suits assert various theories of recovery and seek remedies including compensatory, actual, punitive, statutory and treble damages, return of unjust benefits, and injunctive relief. One such matter is Circeo-Loudon v. Green Tree Servicing, LLC et al. filed in the United States District Court for the Southern District of Florida on April 17, 2014 and amended on October 16, 2014. A settlement agreement was reached between the parties in the Circeo-Loudon matter on September 11, 2015. This settlement received preliminary approval by the court on December 8, 2015 and a hearing for final approval has been scheduled for May 12, 2016. Pursuant to the settlement agreement, all of the defendants collectively, including Ditech Financial, are required to pay damages to class members who timely file a claim, administrative costs to effectuate the settlement and attorneys' fees and costs. The Company believes it has accrued the full amount expected to be paid under the settlement agreement in its consolidated financial statements as of December 31, 2015. The settlement agreement also provides that Ditech Financial and its subsidiary, Green Tree Insurance Agency, Inc., and their affiliates will be released from certain claims and may no longer receive commissions on the placement of certain lender-placed insurance for a period of five years commencing 120 days from the effective date of the settlement. The Company expects that this settlement, if approved by the court, will lead to the ultimate resolution of the other putative class action lawsuits related to lender-placed insurance to which Ditech Financial is currently subject, although the proposed settlement does not apply to potential claims by class members who opt out of the proposed settlement.

From time to time, federal and state authorities investigate or examine aspects of the Company's business activities, such as its mortgage origination, servicing, collection and bankruptcy practices, among other things. It is the Company's general policy to cooperate with such investigations, and the Company has been responding to information requests and otherwise cooperating with various ongoing investigations and examinations by such authorities. The Company cannot predict the outcome of any of the ongoing proceedings and cannot provide assurances that investigations and examinations will not have a material adverse effect on the Company.

Walter Energy Matters

The Company may become liable for U.S. federal income taxes allegedly owed by the Walter Energy consolidated group for the 2009 and prior tax years . Under federal law, each member of a consolidated group for U.S. federal income tax purposes is severally liable for the federal income tax liability of each other member of the consolidated group for any year in which it was a member of the consolidated group at any time during such year. Certain former subsidiaries of the Company (which were subsequently merged or otherwise consolidated with certain current subsidiaries of the Company) were part of the Walter Energy consolidated tax group prior to the Company's spin-off from Walter Energy on April 17, 2009 . As a result, if the Walter Energy consolidated group’s federal income taxes (including penalties and interest) for such tax years are not discharged by Walter Energy or otherwise, the Company could be liable for such amounts.

Walter Energy Tax Matters. According to Walter Energy’s Form 10-Q, or the Walter Energy Form 10-Q, for the quarter ended September 30, 2015 (filed with the SEC on November 5, 2015) and certain other public filings made by Walter Energy in its bankruptcy proceedings currently pending in Alabama, described below, certain tax matters with respect to certain tax years prior to and including the year of the Company's spin-off from Walter Energy remain unresolved, including certain tax matters relating to: (i) a “proof of claim” for a substantial amount of taxes, interest and penalties with respect to Walter Energy’s fiscal years ended August 31, 1983 through May 31, 1994 , which was filed by the IRS in connection with Walter Energy’s bankruptcy filing on December 27, 1989 in the United States Bankruptcy Court for the Middle District of Florida, Tampa Division; (ii) an IRS audit of Walter Energy’s federal income tax returns for the years ended May 31, 2000 through December 31, 2008 ; and (iii) an IRS audit of Walter Energy’s federal income tax returns for the 2009 through 2013 tax years . It is unclear how these tax matters will be impacted, if at all, by Walter Energy’s recent Chapter 11 bankruptcy filing in Alabama, which is discussed below.

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The Company cannot predict whether or to what extent it may become liable for federal income taxes of the Walter Energy consolidated group, in part because it believes, based on publicly available information, that: (i) the amount of taxes owed by the Walter Energy consolidated group for the periods from 1983 through 2009 remains unresolved; (ii) in light of Walter Energy’s 2015 Chapter 11 bankruptcy filing, it is unclear (a) whether Walter Energy will be obligated or able to pay any or all of such amounts owed and (b) what portion of the IRS claims against the Walter Energy consolidated group for 2009 and prior tax years are attributable to tax, interest and/or penalties and what priority, if any, the IRS will receive in the Alabama bankruptcy proceedings with respect to its claims against Walter Energy; and (iii) it cannot predict whether, in the event Walter Energy does not discharge all tax obligations for the consolidated group, the IRS will seek to enforce tax claims against former members of the Walter Energy consolidated group. Further, because the Company cannot currently estimate its liability, if any, relating to the federal income tax liability of Walter Energy’s consolidated tax group during the tax years in which it was a part of such group, it cannot determine whether such liabilities, if any, could have a material adverse effect on its business, financial condition, liquidity and/or results of operations.

Tax Separation Agreement . In connection with the Company's spin-off from Walter Energy, the Company and Walter Energy entered into a Tax Separation Agreement, dated April 17, 2009 . Notwithstanding any several liability the Company may have under federal tax law described above, under the Tax Separation Agreement, Walter Energy agreed to retain full liability for all U.S. federal income or state combined income taxes of the Walter Energy consolidated group for 2009 and prior tax years (including any interest, additional taxes or penalties applicable thereto), subject to limited exceptions. Accordingly, the Company filed "proofs of claim" in the Alabama bankruptcy proceedings asserting claims for any such amounts to the extent the Company is ultimately held liable for the same.

Furthermore, the Tax Separation Agreement provides that Walter Energy has, in its sole discretion, the exclusive right to represent the interests of the consolidated group in any audit, court proceeding or settlement of a claim with the IRS for the tax years in which certain of the Company’s former subsidiaries were a member of the Walter Energy consolidated group for U.S. federal income tax purposes. Moreover, the Tax Separation Agreement obligates the Company to take certain tax positions that are consistent with those taken historically by Walter Energy. In the event the Company does not take such positions, it could be liable to Walter Energy to the extent our failure to do so results in an increased tax liability or the reduction of any tax asset of Walter Energy. These arrangements may result in conflicts of interests between the Company and Walter Energy, particularly with regard to the Walter Energy bankruptcy proceedings described above.

Lastly, according to its public filings, Walter Energy’s 2009 tax year is currently under audit. Accordingly, if it is determined that certain distribution taxes and other amounts are owed related to the Company's spin-off from Walter Energy in 2009, the Company may be liable under the Tax Separation Agreement for all or a portion of such amounts.

The Company is unable to estimate reasonably possible losses for the matter described above.

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30. Separate Financial Information of Subsidiary Guarantors of Indebtedness

In accordance with the Senior Notes Indenture, certain existing and future 100% owned domestic subsidiaries of the Company have fully and unconditionally guaranteed the Senior Notes on a joint and several basis. These guarantor subsidiaries also guarantee the Parent Company's obligations under the 2013 Secured Credit Facilities. The indenture governing the Senior Notes contains customary exceptions under which a guarantor subsidiary may be released from its guarantee without the consent of the holders of the Senior Notes, including (i) the permitted sale, transfer or other disposition of all or substantially all of a guarantor subsidiary's assets or common stock; (ii) the designation of a restricted guarantor subsidiary as an unrestricted subsidiary; (iii) the release of a guarantor subsidiary from its obligation under the 2013 Secured Credit Facilities and its guarantee of all other indebtedness of the Parent Company and other guarantor subsidiaries; and (iv) the defeasance of the obligations of the guarantor subsidiary by payment of the Senior Notes.

Presented below are the condensed consolidating financial information of the Parent Company, the guarantor subsidiaries on a combined basis, and the non-guarantor subsidiaries on a combined basis.

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Condensed Consolidating Balance Sheet
December 31, 2015
(in thousands)

	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries and VIEs		Eliminations and Reclassifications			Consolidated
ASSETS
Cash and cash equivalents	$	4,016	$	196,812	$	2,000	$	—		$	202,828
Restricted cash and cash equivalents	10,512		639,151		58,436		—			708,099
Residential loans at amortized cost, net	14,130		26,713		500,563		—			541,406
Residential loans at fair value	—		12,147,423		526,016		—			12,673,439
Receivables, net	11,465		185,435		17,498		—			214,398
Servicer and protective advances, net	—		479,059		1,082,405		34,447			1,595,911
Servicing rights, net	—		1,788,576		—		—			1,788,576
Goodwill	—		367,911		—		—			367,911
Intangible assets, net	—		78,523		5,515		—			84,038
Premises and equipment, net	1,559		104,922		—		—			106,481
Deferred tax asset, net	—		132,687		—		(24,637		)	108,050
Other assets	37,724		150,470		12,170		—			200,364
Due from affiliates, net	674,139		—		—		(674,139		)	—
Investments in consolidated subsidiaries and VIEs	2,278,009		54,810		—		(2,332,819		)	—
Total assets	$	3,031,554	$	16,352,492	$	2,204,603	$	(2,997,148	)	$	18,591,501

LIABILITIES AND STOCKHOLDERS' EQUITY
Payables and accrued liabilities	$	43,778	$	596,764	$	5,206	$	(5,768	)	$	639,980
Servicer payables	—		603,692		—		—			603,692
Servicing advance liabilities	—		236,511		992,769		—			1,229,280
Warehouse borrowings	—		1,340,388		—		—			1,340,388
Servicing rights related liabilities at fair value	—		117,000		—		—			117,000
Corporate debt	2,156,944		480		—		—			2,157,424
Mortgage-backed debt	—		—		1,051,679		—			1,051,679
HMBS related obligations at fair value	—		10,647,382		—		—			10,647,382
Deferred tax liability, net	26,156		—		1,746		(27,902		)	—
Obligation to fund non-guarantor VIEs	—		36,048		—		(36,048		)	—
Due to affiliates, net	—		579,715		94,423		(674,138		)	—
Total liabilities	2,226,878		14,157,980		2,145,823		(743,856		)	17,786,825

Stockholders' equity:
Total stockholders' equity	804,676		2,194,512		58,780		(2,253,292		)	804,676
Total liabilities and stockholders' equity	$	3,031,554	$	16,352,492	$	2,204,603	$	(2,997,148	)	$	18,591,501

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Condensed Consolidating Balance Sheet
December 31, 2014
(in thousands)

	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries and VIEs		Eliminations and Reclassifications			Consolidated
ASSETS
Cash and cash equivalents	$	3,162	$	311,810	$	5,203	$	—		$	320,175
Restricted cash and cash equivalents	10,507		617,774		104,734		—			733,015
Residential loans at amortized cost, net	13,302		8,456		1,292,781		—			1,314,539
Residential loans at fair value	—		11,246,197		586,433		—			11,832,630
Receivables, net	16,363		172,579		26,687		—			215,629
Servicer and protective advances, net	—		527,758		1,192,473		40,851			1,761,082
Servicing rights, net	—		1,730,216		—		—			1,730,216
Goodwill	—		575,468		—		—			575,468
Intangible assets, net	—		97,248		6,255		—			103,503
Premises and equipment, net	157		124,769		—		—			124,926
Other assets	39,018		164,815		34,567		—			238,400
Due from affiliates, net	697,979		—		—		(697,979		)	—
Investments in consolidated subsidiaries and VIEs	2,641,527		15,756		—		(2,657,283		)	—
Total assets	$	3,422,015	$	15,592,846	$	3,249,133	$	(3,314,411	)	$	18,949,583

LIABILITIES AND STOCKHOLDERS' EQUITY
Payables and accrued liabilities	$	42,076	$	616,445	$	14,294	$	(8,986	)	$	663,829
Servicer payables	—		584,567		—		—			584,567
Servicing advance liabilities	—		205,628		1,160,257		—			1,365,885
Warehouse borrowings	—		1,176,956		—		—			1,176,956
Servicing rights related liabilities at fair value	—		66,311		—		—			66,311
Corporate debt	2,234,906		2,131		—		—			2,237,037
Mortgage-backed debt	—		—		1,739,827		—			1,739,827
HMBS related obligations at fair value	—		9,951,895		—		—			9,951,895
Deferred tax liability, net	68,374		15,353		2,869		21			86,617
Obligation to fund non-guarantor VIEs	—		32,902		—		(32,902		)	—
Due to affiliates, net	—		583,331		114,648		(697,979		)	—
Total liabilities	2,345,356		13,235,519		3,031,895		(739,846		)	17,872,924

Stockholders' equity:
Total stockholders' equity	1,076,659		2,357,327		217,238		(2,574,565		)	1,076,659
Total liabilities and stockholders' equity	$	3,422,015	$	15,592,846	$	3,249,133	$	(3,314,411	)	$	18,949,583

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Condensed Consolidating Statement of Comprehensive Income (Loss)
For the Year Ended December 31, 2015
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs		Eliminations and Reclassifications			Consolidated
REVENUES
Net servicing revenue and fees	$	—		$	506,154		$	66	$	(11,953	)	$	494,267
Net gains on sales of loans	—			453,840			—		—			453,840
Interest income on loans	1,165			280			72,920		—			74,365
Net fair value gains on reverse loans and related HMBS obligations	—			98,265			—		—			98,265
Insurance revenue	—			43,232			4,794		(825		)	47,201
Other revenues	3,563			105,399			55,130		(57,771		)	106,321
Total revenues	4,728			1,207,170			132,910		(70,549		)	1,274,259

EXPENSES
Salaries and benefits	28,510			548,229			78		—			576,817
General and administrative	35,654			573,457			23,085		(58,105		)	574,091
Interest expense	147,752			46,920			81,756		(2,822		)	273,606
Depreciation and amortization	129			68,259			740		—			69,128
Goodwill impairment	—			207,557			—		—			207,557
Corporate allocations	(54,452		)	54,452			—		—			—
Other expenses, net	(488		)	4,981			6,064		—			10,557
Total expenses	157,105			1,503,855			111,723		(60,927		)	1,711,756

OTHER GAINS
Gains on extinguishments	4,660			—			—		—			4,660
Other net fair value gains	—			122			7,276		—			7,398
Other	12,076			8,937			—		—			21,013
Total other gains	16,736			9,059			7,276		—			33,071

Income (loss) before income taxes	(135,641		)	(287,626		)	28,463		(9,622		)	(404,426		)
Income tax expense (benefit)	(53,546		)	(87,869		)	3,761		(3,582		)	(141,236		)
Income (loss) before equity in earnings (losses) of consolidated subsidiaries and VIEs	(82,095		)	(199,757		)	24,702		(6,040		)	(263,190		)
Equity in earnings (losses) of consolidated subsidiaries and VIEs	(181,095		)	9,571			—		171,524			—
Net income (loss)	$	(263,190	)	$	(190,186	)	$	24,702	$	165,484		$	(263,190	)

Comprehensive income (loss)	$	(262,772	)	$	(190,071	)	$	24,702	$	165,369		$	(262,772	)

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Condensed Consolidating Statement of Comprehensive Income (Loss)
For the Year Ended December 31, 2014
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs		Eliminations and Reclassifications			Consolidated
REVENUES
Net servicing revenue and fees	$	—		$	619,152		$	185	$	(17,827	)	$	601,510
Net gains on sales of loans	—			462,172			—		—			462,172
Interest income on loans	1,007			587			132,961		—			134,555
Net fair value gains on reverse loans and related HMBS obligations	—			109,972			—		—			109,972
Insurance revenue	—			66,051			5,854		(895		)	71,010
Other revenues	1,456			106,041			20,253		(19,816		)	107,934
Total revenues	2,463			1,363,975			159,253		(38,538		)	1,487,153

EXPENSES
Salaries and benefits	19,311			559,316			—		—			578,627
General and administrative	32,198			597,331			30,221		(82,244		)	577,506
Interest expense	147,633			72,203			83,379		(112		)	303,103
Depreciation and amortization	120			71,815			786		—			72,721
Goodwill impairment	—			82,269			—		—			82,269
Corporate allocations	(46,764		)	46,764			—		—			—
Other expenses, net	1,598			2,542			6,663		—			10,803
Total expenses	154,096			1,432,240			121,049		(82,356		)	1,625,029

OTHER GAINS (LOSSES)
Other net fair value gains (losses)	(54		)	(792		)	20,126		—			19,280
Other	—			(744		)	—		—			(744		)
Total other gains (losses)	(54		)	(1,536		)	20,126		—			18,536

Income (loss) before income taxes	(151,687		)	(69,801		)	58,330		43,818			(119,340		)
Income tax expense (benefit)	(49,405		)	17,220			5,665		17,508			(9,012		)
Income (loss) before equity in earnings (losses) of consolidated subsidiaries and VIEs	(102,282		)	(87,021		)	52,665		26,310			(110,328		)
Equity in earnings (losses) of consolidated subsidiaries and VIEs	(8,046		)	21,238			—		(13,192		)	—
Net income (loss)	$	(110,328	)	$	(65,783	)	$	52,665	$	13,118		$	(110,328	)

Comprehensive income (loss)	$	(110,431	)	$	(65,702	)	$	52,435	$	13,267		$	(110,431	)

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Condensed Consolidating Statement of Comprehensive Income
For the Year Ended December 31, 2013
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs		Eliminations and Reclassifications			Consolidated
REVENUES
Net servicing revenue and fees	$	—		$	802,557		$	111	$	(19,279	)	$	783,389
Net gains on sales of loans	—			598,974			—		—			598,974
Interest income on loans	612			718			143,321		—			144,651
Net fair value gains on reverse loans and related HMBS obligations	—			120,382			—		—			120,382
Insurance revenue	—			78,469			6,009		—			84,478
Other revenues	739			69,184			20,135		(19,433		)	70,625
Total revenues	1,351			1,670,284			169,576		(38,712		)	1,802,499

EXPENSES
Salaries and benefits	16,911			532,881			7		—			549,799
General and administrative	55,023			431,897			30,387		(36,930		)	480,377
Interest expense	123,629			60,064			89,521		(559		)	272,655
Depreciation and amortization	124			70,068			835		—			71,027
Corporate allocations	(40,519		)	40,519			—		—			—
Other expenses, net	759			1,443			7,193		—			9,395
Total expenses	155,927			1,136,872			127,943		(37,489		)	1,383,253

OTHER GAINS (LOSSES)
Losses on extinguishments	(12,489		)	—			—		—			(12,489		)
Other net fair value gains (losses)	(4,813		)	(657		)	11,531		—			6,061
Total other gains (losses)	(17,302		)	(657		)	11,531		—			(6,428		)

Income (loss) before income taxes	(171,878		)	532,755			53,164		(1,223		)	412,818
Income tax expense (benefit)	(55,556		)	208,459			6,921		(473		)	159,351
Income (loss) before equity in earnings of consolidated subsidiaries and VIEs	(116,322		)	324,296			46,243		(750		)	253,467
Equity in earnings of consolidated subsidiaries and VIEs	369,789			13,009			—		(382,798		)	—
Net income	$	253,467		$	337,305		$	46,243	$	(383,548	)	$	253,467

Comprehensive income	$	253,472		$	337,337		$	46,168	$	(383,505	)	$	253,472

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Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2015
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs			Eliminations and Reclassifications			Consolidated
Cash flows provided by (used in) operating activities	$	(107,969	)	$	(129,281	)	$	189,157		$	—		$	(48,093	)

Investing activities
Purchases and originations of reverse loans held for investment	—			(1,471,275		)	—			—			(1,471,275		)
Principal payments received on reverse loans held for investment	—			871,832			—			—			871,832
Principal payments received on mortgage loans held for investment	828			—			114,078			—			114,906
Payments received on charged-off loans held for investment	—			26,385			—			—			26,385
Payments received on receivables related to Non-Residual Trusts	—			—			7,481			—			7,481
Proceeds from sales of real estate owned, net	118			69,307			7,278			—			76,703
Purchases of premises and equipment	(175		)	(27,586		)	—			—			(27,761		)
Decrease (increase) in restricted cash and cash equivalents	(6		)	824			8,401			—			9,219
Payments for acquisitions of businesses, net of cash acquired	—			(5,095		)	—			—			(5,095		)
Acquisitions of servicing rights	—			(264,743		)	—			—			(264,743		)
Proceeds from sale of investment	14,376			—			—			—			14,376
Proceeds from sale of residual interests in Residual Trusts	189,513			—			—			—			189,513
Capital contributions to subsidiaries and VIEs	(9,072		)	(37,285		)	—			46,357			—
Returns of capital from subsidiaries and VIEs	27,309			24,107			—			(51,416		)	—
Change in due from affiliates	(8,331		)	11,809			1,388			(4,866		)	—
Other	2,656			855			—			—			3,511
Cash flows provided by (used in) investing activities	217,216			(800,865		)	138,626			(9,925		)	(454,948		)

Financing activities
Payments on corporate debt	(11,250		)	(1,651		)	—			—			(12,901		)
Proceeds from securitizations of reverse loans	—			1,622,481			—			—			1,622,481
Payments on HMBS related obligations	—			(1,025,458		)	—			—			(1,025,458		)
Issuances of servicing advance liabilities	—			283,953			1,789,274			—			2,073,227
Payments on servicing advance liabilities	—			(253,070		)	(1,953,895		)	—			(2,206,965		)
Net change in warehouse borrowings related to mortgage loans	—			207,305			—			—			207,305
Net change in warehouse borrowings related to reverse loans	—			(43,873		)	—			—			(43,873		)
Proceeds from sales of excess servicing spreads and servicing rights	—			55,698			—			—			55,698
Payments on servicing rights related liabilities	—			(12,317		)	—			—			(12,317		)
Other debt issuance costs paid	—			(8,320		)	(5,629		)	—			(13,949		)
Payments on mortgage-backed debt	—			—			(136,493		)	—			(136,493		)
Extinguishments and settlement of debt	(79,877		)	—			—			—			(79,877		)
Repurchase of shares under stock repurchase plan	(28,065		)	—			—			—			(28,065		)
Capital contributions	—			9,072			37,285			(46,357		)	—
Capital distributions	—			(13,006		)	(38,410		)	51,416			—
Change in due to affiliates	11,553			5,893			(22,312		)	4,866			—
Other	(754		)	(11,559		)	(806		)	—			(13,119		)
Cash flows provided by (used in) financing activities	(108,393		)	815,148			(330,986		)	9,925			385,694

Net increase (decrease) in cash and cash equivalents	854			(114,998		)	(3,203		)	—			(117,347		)
Cash and cash equivalents at the beginning of the year	3,162			311,810			5,203			—			320,175
Cash and cash equivalents at the end of the year	$	4,016		$	196,812		$	2,000		$	—		$	202,828

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Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2014
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs			Eliminations and Reclassifications			Consolidated
Cash flows provided by (used in) operating activities	$	(74,452	)	$	1,005,449		$	(1,137,754	)	$	2,487		$	(204,270	)

Investing activities
Purchases and originations of reverse loans held for investment	—			(1,505,215		)	—			—			(1,505,215		)
Principal payments received on reverse loans held for investment	—			548,660			—			—			548,660
Principal payments received on mortgage loans held for investment	535			399			161,323			—			162,257
Payments received on charged-off loans held for investment	—			14,929			—			—			14,929
Payments received on receivables related to Non-Residual Trusts	—			—			9,471			—			9,471
Proceeds from sales of real estate owned, net	227			39,452			15,627			—			55,306
Purchases of premises and equipment	—			(21,573		)	—			—			(21,573		)
Decrease in restricted cash and cash equivalents	4,246			3,723			3,364			—			11,333
Payments for acquisitions of businesses, net of cash acquired	—			(197,061		)	—			—			(197,061		)
Acquisitions of servicing rights	—			(268,618		)	—			—			(268,618		)
Acquisitions of charged-off loans held for investment	—			(64,548		)	—			—			(64,548		)
Capital contributions to subsidiaries and VIEs	(83,544		)	(131		)	—			83,675			—
Returns of capital from subsidiaries and VIEs	76,214			28,085			—			(104,299		)	—
Change in due from affiliates	88,360			214,613			250,108			(553,081		)	—
Other	(2,283		)	13,231			—			—			10,948
Cash flows provided by (used in) investing activities	83,755			(1,194,054		)	439,893			(573,705		)	(1,244,111		)

Financing activities
Payments on corporate debt	(15,000		)	(2,220		)	—			—			(17,220		)
Proceeds from securitizations of reverse loans	—			1,617,399			—			—			1,617,399
Payments on HMBS related obligations	—			(637,272		)	—			—			(637,272		)
Issuances of servicing advance liabilities	—			874,729			1,425,201			—			2,299,930
Payments on servicing advance liabilities	—			(1,572,482		)	(332,849		)	—			(1,905,331		)
Net change in warehouse borrowings related to mortgage loans	—			75,726			—			—			75,726
Net change in warehouse borrowings related to reverse loans	—			15,667			—			—			15,667
Proceeds from sales of excess servicing spreads and servicing rights	—			75,426			—			—			75,426
Payments on servicing rights related liabilities	—			(6,822		)	—			—			(6,822		)
Other debt issuance costs paid	—			(17,264		)	(17		)	—			(17,281		)
Payments on mortgage-backed debt	—			—			(181,155		)	—			(181,155		)
Capital contributions	—			83,544			131			(83,675		)	—
Capital distributions	—			(24,874		)	(79,425		)	104,299			—
Change in due to affiliates	(98,071		)	(329,277		)	(123,246		)	550,594			—
Other	6,921			(40,509		)	(8,808		)	—			(42,396		)
Cash flows provided by (used in) financing activities	(106,150		)	111,771			699,832			571,218			1,276,671

Net increase (decrease) in cash and cash equivalents	(96,847		)	(76,834		)	1,971			—			(171,710		)
Cash and cash equivalents at the beginning of the year	100,009			388,644			3,232			—			491,885
Cash and cash equivalents at the end of the year	$	3,162		$	311,810		$	5,203		$	—		$	320,175

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Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2013
(in thousands)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries and VIEs			Eliminations and Reclassifications			Consolidated
Cash flows provided by (used in) operating activities	$	(99,050	)	$	(1,741,415	)	$	29,860		$	130		$	(1,810,475	)

Investing activities
Purchases and originations of reverse loans held for investment	—			(3,020,937		)	—			—			(3,020,937		)
Principal payments received on reverse loans held for investment	—			372,375			—			—			372,375
Principal payments received on mortgage loans held for investment	84			458			169,117			—			169,659
Payments received on receivables related to Non-Residual Trusts	—			—			14,804			—			14,804
Proceeds from sales of real estate owned, net	254			23,264			14,906			—			38,424
Purchases of premises and equipment	—			(38,639		)	—			—			(38,639		)
Increase in restricted cash and cash equivalents	(752		)	(7,282		)	(122		)	—			(8,156		)
Payments for acquisitions of businesses, net of cash acquired	(477,021		)	(15,262		)	—			—			(492,283		)
Acquisitions of servicing rights	—			(797,165		)	—			—			(797,165		)
Capital contributions to subsidiaries and VIEs	(331,107		)	(16,010		)	—			347,117			—
Returns of capital from subsidiaries and VIEs	37,796			30,307			—			(68,103		)	—
Change in due from affiliates	(688,070		)	(65,619		)	(78,976		)	832,665			—
Other	(15,200		)	1,035			—			—			(14,165		)
Cash flows provided by (used in) investing activities	(1,474,016		)	(3,533,475		)	119,729			1,111,679			(3,776,083		)

Financing activities
Proceeds from issuance of corporate debt, net of debt issuance costs	3,106,263			—			—			—			3,106,263
Payments on corporate debt	(360,826		)	(2,105		)	—			—			(362,931		)
Proceeds from securitizations of reverse loans	—			3,216,096			—			—			3,216,096
Payments on HMBS related obligations	—			(409,331		)	—			—			(409,331		)
Issuances of servicing advance liabilities	—			1,597,043			7,229			—			1,604,272
Payments on servicing advance liabilities	—			(729,274		)	(3,876		)	—			(733,150		)
Net change in warehouse borrowings related to mortgage loans	—			929,015			—			—			929,015
Net change in warehouse borrowings related to reverse loans	—			(98,837		)	—			—			(98,837		)
Other debt issuance costs paid	(1,936		)	(7,897		)	—			—			(9,833		)
Payments on mortgage-backed debt	—			—			(200,369		)	—			(200,369		)
Extinguishments and settlement of debt	(1,405,424		)	—			—			—			(1,405,424		)
Capital contributions	—			331,107			16,010			(347,117		)	—
Capital distributions	—			(10,837		)	(57,266		)	68,103			—
Change in due to affiliates	(29,618		)	772,554			90,284			(833,220		)	—
Other	(1,777		)	2,007			(37		)	425			618
Cash flows provided by (used in) financing activities	1,306,682			5,589,541			(148,025		)	(1,111,809		)	5,636,389

Net increase (decrease) in cash and cash equivalents	(266,384		)	314,651			1,564			—			49,831
Cash and cash equivalents at the beginning of the year	366,393			73,993			1,668			—			442,054
Cash and cash equivalents at the end of the year	$	100,009		$	388,644		$	3,232		$	—		$	491,885

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31. Quarterly Results of Operations (Unaudited)

The following tables summarize the Company’s unaudited consolidated results of operations on a quarterly basis for the years ended December 31, 2015 and 2014 . The sum of the quarterly earnings (loss) per share amounts do not equal the amount reported for the full year since per share amounts are computed independently for each quarter and for the full year based on respective weighted-average shares outstanding and other dilutive potential shares.

Quarterly results of operations are summarized as follows (in thousands, except per share data):



	For the 2015 Quarters Ended
	December 31 ⁽²⁾			September 30			June 30 ⁽²⁾			March 31
Total revenues	$	331,576		$	219,393		$	412,433		$	310,857
Total expenses	548,252			364,124			427,955			371,425
Other gains	8,485			13,173			523			10,890
Loss before income taxes ⁽¹⁾	(208,191		)	(131,558		)	(14,999		)	(49,678		)
Income tax expense (benefit)	(91,056		)	(54,630		)	23,120			(18,670		)
Net loss	$	(117,135	)	$	(76,928	)	$	(38,119	)	$	(31,008	)
Basic loss per common and common equivalent share	$	(3.16	)	$	(2.04	)	$	(1.01	)	$	(0.82	)
Diluted loss per common and common equivalent share	(3.16		)	(2.04		)	(1.01		)	(0.82		)

__________


(1)	A significant portion of the Company's asset and liabilities are carried at fair value and as a result, the Company’s net income or loss can be materially impacted quarter over quarter by gains and losses resulting from changes in valuation inputs and other assumptions used in the fair value of the assets and liabilities.


(2)	The Company recorded goodwill impairment losses of $56.5 million and $151.0 million during the second and fourth quarters of 2015, respectively.



	For the 2014 Quarters Ended
	December 31 ⁽²⁾			September 30 ⁽³⁾			June 30 ^{(3) (4)}			March 31
Total revenues	$	317,492		$	386,000		$	413,713		$	369,948
Total expenses	429,855			389,523			467,171			338,480
Other gains (losses)	3,303			16,204			1,532			(2,503		)
Income (loss) before income taxes ⁽¹⁾	(109,060		)	12,681			(51,926		)	28,965
Income tax expense (benefit)	(65,087		)	83,484			(38,997		)	11,588
Net income (loss)	$	(43,973	)	$	(70,803	)	$	(12,929	)	$	17,377
Basic earnings (loss) per common and common equivalent share	$	(1.17	)	$	(1.88	)	$	(0.34	)	$	0.46
Diluted earnings (loss) per common and common equivalent share	(1.17		)	(1.88		)	(0.34		)	0.45

__________


(1)	A significant portion of the Company's asset and liabilities are carried at fair value and as a result, the Company’s net income or loss can be materially impacted quarter over quarter by gains and losses resulting from changes in valuation inputs and other assumptions used in the fair value of the assets and liabilities.


(2)	Total expenses recorded during the fourth quarter of 2014 included $50.4 million in costs for legal and regulatory matters outside of normal course of business and $34.3 million in the provision for uncollectible advances.


(3)	The Company recorded asset management performance fees of $34.2 million and $2.5 million during the second and third quarters of 2014, respectively.


(4)	The Company recorded an $82.3 million goodwill impairment loss during the second quarter of 2014.

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32. Subsequent Events

RCS Asset Purchase Agreement

On December 8, 2015, Ditech entered into an asset purchase agreement with RCS which closed on January 28, 2016. Pursuant to the terms of the agreement, on or about the closing date, among other things: (i) Ditech became obligated to purchase certain assets from, and assume certain liabilities of, RCS; (ii) Ditech entered into a residential mortgage loan sub-servicing agreement with RCS pursuant to which Ditech will sub-service residential mortgage loans for RCS; (iii) RCS became obligated to transfer to Ditech certain of its existing residential mortgage loan sub-servicing agreements (collectively, the sub-servicing assets); (iv) Ditech made a cash payment of $0.9 million to RCS; and (v) Ditech became obligated to make certain other payments to RCS, as described in more detail below. The sub-servicing assets cover residential mortgage loans, including Fannie Mae and Freddie Mac mortgage loans, having, in aggregate, a total unpaid principal balance of approximately $9.8 billion as of the closing date.

RCS will continue to service the sub-servicing assets on behalf of Ditech from the closing date until the date the servicing related to such sub-servicing assets is transferred from RCS to Ditech. Ditech will pay to RCS a fee of $1.0 million per month, pro-rated for partial months, as compensation for providing the services through the final servicing transfer date and will be responsible for up to an additional $0.2 million related to the wind down and termination by RCS of its servicing operations related to the sub-servicing assets. On the final servicing transfer date, Ditech will purchase and RCS will transfer certain assets, including servicer and protective advances, and certain liabilities, including employee-related liabilities. As of the closing date, the estimated net book value of the purchased assets and assumed liabilities was approximately $10 million .

As the final servicing transfer date has not occurred as of the date of this filing, preliminary purchase accounting information cannot be determined at this time.

Reverse Mortgage Warehouse Financing Facility

On February 23, 2016, RMS entered into new a mortgage warehouse financing facility pursuant to a master repurchase agreement. This agreement provides funding for the purchase and origination of reverse loans and the repurchase of certain HECMs and real estate owned from Ginnie Mae securitization pools.

The aggregate amount of revolving financing capacity under this facility is $100.0 million , which includes committed capacity of $10.0 million through March 30, 2016 and $50.0 million thereafter. The facility terminates February 21, 2017 . The interest rate on the facility is based on the bank rate plus 2.75% for borrowings related to the purchase and origination of reverse loans and 3.25% for borrowings related to the repurchase of HECMs and real estate owned. The facility contains various customary events of default, representations, warranties, covenants, conditions precedent and indemnification provisions.

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Walter Investment Management Corp.

Schedule I

Financial Information

(Parent Company Only)

(in thousands, except share and per share data)



	December 31,
	2015		2014
ASSETS
Cash and cash equivalents	$	4,016	$	3,162
Restricted cash and cash equivalents	10,512		10,507
Residential loans at amortized cost, net	14,130		13,302
Receivables, net	11,465		16,363
Premises and equipment, net	1,559		157
Other assets	37,724		39,018
Due from affiliates, net	674,139		697,979
Investments in consolidated subsidiaries and VIEs	2,278,009		2,641,527
Total assets	$	3,031,554	$	3,422,015

LIABILITIES AND STOCKHOLDERS' EQUITY
Payables and accrued liabilities	$	43,778	$	42,076
Corporate debt	2,156,944		2,234,906
Deferred tax liability, net	26,156		68,374
Total liabilities	2,226,878		2,345,356

Stockholders' equity:
Preferred stock, $0.01 par value per share:
Authorized - 10,000,000 shares
Issued and outstanding - 0 shares at December 31, 2015 and 2014	—		—
Common stock, $0.01 par value per share:
Authorized - 90,000,000 shares
Issued and outstanding - 35,573,405 and 37,711,623 shares at December 31, 2015 and 2014, respectively	355		377
Additional paid-in capital	591,454		600,643
Retained earnings	212,054		475,244
Accumulated other comprehensive income	813		395
Total stockholders' equity	804,676		1,076,659
Total liabilities and stockholders' equity	$	3,031,554	$	3,422,015

The accompanying notes are an integral part of the consolidated financial statements.

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Walter Investment Management Corp.

Schedule I

Financial Information

(Parent Company Only)

(in thousands)



	For the Years Ended December 31,
	2015			2014			2013
REVENUES
Interest income on loans	$	1,165		$	1,007		$	612
Other revenues	3,563			1,456			739
Total revenues	4,728			2,463			1,351

EXPENSES
Interest expense	147,752			147,633			123,629
Salaries and benefits	28,510			19,311			16,911
General and administrative	35,654			32,198			55,023
Depreciation and amortization	129			120			124
Corporate allocations	(54,452		)	(46,764		)	(40,519		)
Other expenses, net	(488		)	1,598			759
Total expenses	157,105			154,096			155,927

OTHER GAINS (LOSSES)
Gains (losses) on extinguishments	4,660			—			(12,489		)
Other net fair value losses	—			(54		)	(4,813		)
Other	12,076			—			—
Total other gains (losses)	16,736			(54		)	(17,302		)

Loss before income taxes	(135,641		)	(151,687		)	(171,878		)
Income tax benefit	(53,546		)	(49,405		)	(55,556		)
Loss before equity in earnings (losses) of consolidated subsidiaries and VIEs	(82,095		)	(102,282		)	(116,322		)
Equity in earnings (losses) of consolidated subsidiaries and VIEs	(181,095		)	(8,046		)	369,789
Net income (loss)	$	(263,190	)	$	(110,328	)	$	253,467

Comprehensive income (loss)	$	(262,772	)	$	(110,431	)	$	253,472

The accompanying notes are an integral part of the consolidated financial statements.

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Walter Investment Management Corp.

Schedule I

Financial Information

(Parent Company Only)

(in thousands)



	For the Years Ended December 31,
	2015			2014			2013
Cash flows used in operating activities	$	(107,969	)	$	(74,452	)	$	(99,050	)

Investing activities
Principal payments received on mortgage loans held for investment	828			535			84
Proceeds from sales of real estate owned, net	118			227			254
Purchases of premises and equipment	(175		)	—			—
Decrease (increase) in restricted cash and cash equivalents	(6		)	4,246			(752		)
Payments for acquisitions of businesses, net of cash acquired	—			—			(477,021		)
Proceeds from sale of investment	14,376			—			—
Proceeds from sale of residual interests in Residual Trusts	189,513			—			—
Capital contributions to subsidiaries and VIEs	(9,072		)	(83,544		)	(331,107		)
Returns of capital from subsidiaries and VIEs	27,309			76,214			37,796
Change in due from affiliates	(8,331		)	88,360			(688,070		)
Other	2,656			(2,283		)	(15,200		)
Cash flows provided by (used in) investing activities	217,216			83,755			(1,474,016		)

Financing activities
Proceeds from issuance of corporate debt, net of debt issuance costs	—			—			3,106,263
Payments on corporate debt	(11,250		)	(15,000		)	(360,826		)
Other debt issuance costs paid	—			—			(1,936		)
Repurchase of shares under stock repurchase plan	(28,065		)	—			—
Extinguishments and settlement of debt	(79,877		)	—			(1,405,424		)
Change in due to affiliates	11,553			(98,071		)	(29,618		)
Other	(754		)	6,921			(1,777		)
Cash flows provided by (used in) financing activities	(108,393		)	(106,150		)	1,306,682

Net increase (decrease) in cash and cash equivalents	854			(96,847		)	(266,384		)
Cash and cash equivalents at the beginning of the year	3,162			100,009			366,393
Cash and cash equivalents at the end of the year	$	4,016		$	3,162		$	100,009

The accompanying notes are an integral part of the consolidated financial statements.

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Walter Investment Management Corp.

Schedule I

Notes to the Parent Company Financial Statements

1. Basis of Presentation

The financial information of the Parent Company should be read in conjunction with the Consolidated Financial Statements included in Item 8 of this report. These Parent Company financial statements reflect the results of operations, financial position and cash flows for the Parent Company and its consolidated subsidiaries and VIEs in which it is the primary beneficiary. These consolidated subsidiaries and VIEs are accounted for using the equity method of accounting.

The accompanying Parent Company financial statements have been prepared in accordance with GAAP. The preparation of these Parent Company financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. These Parent Company financial statements include certain intercompany allocations to its subsidiaries that management believes have been made on a reasonable basis. These costs primarily include executive salaries and other centralized business functions. Refer to Note 27 of the Notes to Consolidated Financial Statements for additional information on intercompany allocations.

2. Corporate Debt

Corporate debt is comprised of secured term loans, convertible senior subordinated notes, and unsecured senior notes. In addition, the Parent Company has a $125.0 million senior secured revolving credit facility. Refer to Note 20 of the Notes to Consolidated Financial Statements for additional information on corporate debt.

3. Supplemental Disclosures of Cash Flow Information

The Company’s supplemental disclosures of cash flow information are summarized as follows (in thousands):



	For the Years Ended December 31,
	2015			2014			2013
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	128,913		$	132,422		$	100,464
Cash paid (received) for taxes	(3,318		)	(6,067		)	91,646
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Servicing rights capitalized upon deconsolidation of Residual Trusts	3,133			—			—
Real estate owned acquired through foreclosure	783			671			657
Residential loans originated to finance the sale of real estate owned	1,466			1,657			1,962
Contributions to subsidiaries	28,249			19,143			—
Distributions from subsidiaries	7,469			183			—

4. Guarantees

Refer to Note 28 of the Notes to Consolidated Financial Statements for certain guarantees made by the Parent Company in regards to Ditech Financial and RMS. In addition to these guarantees, all obligations of Ditech Financial and RMS under master repurchase agreements and certain servicing advance facilities are guaranteed by the Parent. The Parent also guarantees certain subsidiary obligations such as agreements to perform servicing in accordance with contract terms.

F-87

Exhibit 10.11

SEVERANCE POLICY

PURPOSE OF THE POLICY

The policy is intended to provide financial and other benefits in the event of a termination of employment. Severance payments are not to be viewed as automatic and are not compensation for past services, but instead are intended only as prospective payments that will be offered under certain circumstances. This policy replaces and supersedes all other plans, programs, policies, agreements and arrangements of Walter Investment Management Corp. and its affiliates (collectively “the Company”) (other than individual employment agreements) in which any employee has been eligible or entitled to participate, and all such other severance plans, programs, policies, agreements and arrangements are hereby discontinued as of February 9, 2015. The Company has and retains the right to interpret, amend, revise, cancel or terminate the policy at any time and without prior notice. No representations by anyone may extend the policy to provide severance packages or benefits not covered by the policy.

ELIGIBILITY AND PARTICIPATION

All employees of the Company are eligible to participate in the Company’s severance program subject to the terms of this policy. The level of participation in the severance program as set forth in this policy is determined by a participant’s level of responsibility and years of service, within the Company as described below.

Production Employees, Support Employees (support functions include administrative, technical, etc.) and Non-Management Employees will participate in this severance program described herein and be referred to as Level I Participants.

Professional Employees and Managerial-Level Employees and above who are not covered under Level III, will participate in this severance program and be referred to as Level II Participants.

Executive-Level employees who are eligible to participate in the Walter Investment Management Corp. Management Incentive program (MIP) will participate in the severance program and be referred to as Level III Participants.

QUALIFIED TERMINATIONS OF EMPLOYMENT

A Participant in the Company’s severance program is eligible for benefits if regularly scheduled to work at least 30 hours a week, subject to the requirements stated herein, only if the Company, at its sole and exclusive discretion, determines that the Participant has incurred a Qualified Termination of Employment, which means the elimination of the Participant’s current position.

A Participant in the program is not eligible for benefits upon an Unqualified Termination of Employment, which means a termination of employment with the Company as a result of any of the following:


a.	Loss of temporary employment.


b.	Termination of employment where an employment or other written agreement provides for severance for the Participant.


c.	Death.


d.	Disability.


e.	Involuntary termination for performance or conduct as determined by the Company in its sole discretion.


f.	Resignation.


g.	Job Abandonment.


h.	Retirement.


i.	An approved Leave of Absence or failure to return from an approved Leave of Absence.


j.	Transfers within the Company to another position within the Company or from the Company to a Company affiliate.

Severance benefits will not be paid unless and until the Participant signs and does not revoke a Separation Agreement and Release in a form that is satisfactory to, approved by, and provided by the Company. This Separation Agreement and Release may be changed by the Company from time to time.

Additionally, as a condition of the receipt of severance benefits described in this policy, a Participant must immediately return all Company property in his or her possession, including but not limited to all computer equipment (hardware and software), mobile devices, facsimile machines, credit cards, office keys, security access cards, badges, identification cards and all copies (including drafts) of any documentation or information (however stored) relating to the business of the Company, its customers and clients or its prospective customers and clients.

POLICY BENEFITS

Level I, Level II and Level III Participants are eligible for the following Severance Pay (paid in a lump sum at the rate of Participant’s base salary only at the time of termination) upon a Qualified Termination of Employment (assuming the Participant signs, and does not thereafter revoke, the Separation Agreement and Release(s) described here in ):



Level I: Production Employees, Support Employees and Non-Management Employees		Level II: Professional Employee and Management-Level Employees
Full Years of Unbroken Service	Weeks of Pay	Full Years of Unbroken Service	Weeks of Pay
Less than 1	3	Less than 1	5
1	3	1	5
2	4	2	6
3	5	3	7
4	6	4	8
5	7	5	9
6	8	6	10
7	9	7	11
8	10	8	12
9	11	9	13
10	12	10	14
11	13	11	15
12	14	12	16
13	15	13	17
14	16	14	18
15	17	15	19
16	18	16	20
17	19	17	21
18	20	18	22
19	21	19	23
20	22	20	24
21-24	24	21-24	26
25+	26	25+	28

Level III Participants are eligible for the following Severance Pay (paid at the rate of Participant’s base salary only at the time of termination) upon a Qualified Termination of Employment (assuming the Participant signs, and does not thereafter revoke, the General Release Document(s) described herein):



Level III: WIMC MIP Eligible
Full Years of Unbroken Service	Weeks of Pay
0 – 4	26
5 -14	39
15 and above	52

The base salary for a Participant paid on a commission-only basis is deemed to be $50,000 annually.

Any debts or monies Participant owes to the Company including its affiliates will be deducted from the Severance Pay amounts described above.

The Company in its sole discretion determines an employee’s eligibility and the amount of Severance Pay under the policy. Any exception under the severance policy must be due to exceptional circumstances, as solely determined by the Company, and approved in writing by a member of Executive Management.

Exhibit 10.13.11

Seller/Servicer #26184

ADDENDUM TO MORTGAGE SELLING AND SERVICING CONTRACT

This Addendum ("Addendum") modifies the Mortgage Selling and Servicing Contract dated March 23, 2005, (as amended to date, including but not limited to, by Addendum dated March 23, 2005, Addendum dated April 4, 2012, Addendum dated February 8, 2013, and Addendum dated April 29, 2013, the "MSSC'') between Fannie Mae, a corporation organized and existing under the laws of the United States, and Green Tree Servicing LLC (the "Lender").

The purpose of the MSSC is to establish Lender as an approved seller and servicer of mortgages and participation interests. The purpose of this Addendum is to confirm that (i) effective as of August 31, 2015, Ditech Mortgage Corp. (the "Non-Surviving Entity") has merged with and into Lender, (ii) Lender is the surviving entity in that merger and Lender has changed its name from Green Tree Servicing, LLC to Ditech Financial LLC, (iii) Lender is responsible for and has assumed all assets of Non-Surviving Entity and all obligations, representations, warranties, covenants and liabilities of Non-Surviving Entity to Fannie Mae, (iv) Lender ratifies all assignments of mortgage from Non-Surviving Entity to Fannie Mae and the endorsements on the related mortgage notes by Non-Surviving Entity; and (v) Lender ratifies all deliveries made and activities conducted after the date of the merger but prior to the effective date of this Addendum:

1. Lender represents and warrants that:

(a) Non-Surviving Entity was a Fannie Mae approved seller and servicer of mortgages and participation interests pursuant to a Mortgage Selling and Servicing Contract, effective as of August 18, 2008, (as amended to date, including but limited to, by Addendum dated March 15, 2012, Addendum dated May 7, 2012, and by Addendum dated December 4, 2013, the "Non-Surviving Entity's MSSC");

(b) Effective as of August 31, 2015 (the "Merger Date"), as evidenced by Certificate of Merger dated August 4. 2015 and filed on August 13, 2015 with the State of Delaware Secretary of State Division of Corporations, Lender (i) merged with Non Surviving Entity and Lender is the surviving entity (the "Merger"); and (ii) changed its name from Green Tree Servicing LLC to Ditech Financial LLC.

2. Effective as of the Merger Date, Lender shall be responsible for and has assumed all assets of Non-Surviving Entity and all obligations, representations, warranties, covenants and liabilities of Non-Surviving Entity to Fannie Mae under, or that may arise in connection with, Non-Surviving Entity's MSSC, the Fannie Mae Selling Guide (as amended from time to time, the "Selling Guide"), the Fannie Mae Servicing Guide (as amended from time to time, the "Servicing Guide" and together with the Selling Guide, (the "Guides"), or any other document.

3. With respect to any mortgage loans delivered by either Lender or Non- Surviving Entity to Fannie Mae, or any servicing activity conducted by Lender on any Fannie Mae mortgage loan, including but not limited to after the Merger Date, Lender agrees that it shall be responsible, to the same extent as if this Addendum were in full force and effect on the date of any such deliveries and as if Lender had delivered all such mortgage loans under the MSSC, and Lender shall be responsible for all obligations, representations, warranties, covenants and liabilities under, or that may arise in connection with, the MSSC, the Guides, or any other document.

4. Lender ratifies:

(a) The assignments of mortgage, in recordable form, but not recorded from Non-Surviving Entity naming Fannie Mae as the assignee (the "Assignments of Mortgage"), if any, that Non-Surviving Entity has delivered to Fannie Mae or the document custodian on behalf of Fannie Mae; and

(b) The endorsements in blank by Non-Surviving Entity (the "Endorsements") on the mortgage notes related to the mortgages described in the Assignments of Mortgage, if any, that Non-Surviving Entity has delivered, together with the Assignments of Mortgage, to Fannie Mae or the document custodian on behalf of Fannie Mae.

5. Lender confirms that:

(a) The Assignments of Mortgage will have the same force and effect as if the Assignments of Mortgage had been made, executed, and delivered by Lender;

(b) The Endorsements on the mortgage notes related to the mortgages described in the Assignments of Mortgage will have the same force and effect as if the Endorsements had been executed by Lender and such mortgage notes so endorsed had been delivered by Lender; and

(c) Lender may sell Mortgages and participation interests and may service Mortgages only of the type described in Section XVI of the MSSC and any Addendum thereto notwithstanding any provision in Non-Surviving Entity's MSSC permitting Non-Surviving Entity to sell Mortgages and participation interests and to service Mortgages of any other type.

6. All other terms of the MSSC, including any previous modification made to it, remain in effect.

[remainder of page intentionally blank; execution on following page]

By executing this Addendum, Lender and Fannie Mae agree to the modification. The modification takes effect on the date Fannie Mae signs this Addendum.

Lender: Ditech Financial LLC

1100 Landmark Towers

345 St. Peter St.

St. Paul, MN 55102

By: /s/ Laura Reichel

(Authorized Signature)

Laura Reichel, Senior Vice President

(Type Name and Title)

Date: August 31, 2015

Fannie Mae

1835 Market Street, Suite 2300

Philadelphia, PA 19103

By: /s/ Robert Lis

(Authorized Signature)

Robert Lis, Assistant Vice President

(Type Name and Title)

Date: August 31, 2015

Exhibit 10.16.2

Executed Version

AMENDMENT No. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT

AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this “ Agreement ”), dated as of February 23, 2016, to that certain Amended and Restated Credit Agreement, dated as of December 19, 2013 (as amended, supplemented or otherwise modified through the date hereof, the “ Credit Agreement ”) among WALTER INVESTMENT MANAGEMENT CORP., a Maryland corporation (the “ Borrower ”), the lenders from time to time party thereto and CREDIT SUISSE AG, as administrative agent (in such capacity, the “ Administrative Agent ”) and collateral agent.

RECITALS:

WHEREAS, Section 9.08 of the Credit Agreement permits the Credit Agreement to be amended from time to time by the Borrower and the Required Lenders;

WHEREAS, the Borrower, the Administrative Agent, the Collateral Agent and the Lenders identified on the signature pages hereto which collectively constitute the Required Lenders have agreed to amend certain provisions of the Credit Agreement, subject to the terms and conditions set forth herein; and

WHEREAS, the Administrative Agent, acting at the direction of the Required Lenders, has agreed to enter into this Agreement on the terms set forth herein.

NOW, THEREFORE, the parties hereto agree as follows:

Section 1 . Defined Terms. Unless otherwise specifically defined herein, each term used herein (including in the recitals above) that is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement.

Section 2 . Amendments to Credit Agreement.

(a) Section 1.01 of the Credit Agreement is hereby amended by (i) inserting the following defined terms in the proper alphabetical placement:

“ Amendment No. 1 Effective Date ” shall mean February 23, 2016.

“ Bail-In Action ” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“ Bail-In Legislation ” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“ EEA Financial Institution ” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a

subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“ EEA Member Country ” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“ EEA Resolution Authority ” shall mean any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“ EU Bail-In Legislation Schedule ” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“ Write-Down and Conversion Powers ” shall mean, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

and (ii) revising the first sentence in the definition of “Defaulting Lender” by (x) deleting the word “or” immediately prior to the phrase “(ii) had appointed for it a receiver” and (y) inserting the phrase “, or (iii) become the subject of a Bail-in Action” immediately following the phrase “or federal regulatory authority acting in such a capacity”.

(b) Section 2.20 of the Credit Agreement is hereby amended by adding the following clause (h) at the end thereof:

(h) For purposes of determining withholding Taxes imposed under FATCA, from and after the Amendment No. 1 Effective Date, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) this Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

(c) Section 2.24(a) of the Credit Agreement is hereby amended by replacing the word “No” at the beginning of the second sentence in clause (iv) thereof with the phrase “Subject to Section 9.20, no”.

(d) Section 9.04(l) of the Credit Agreement is hereby amended by:

(i) deleting the phrase “(and solely through)” prior to the phrase “Dutch Auctions open to all Lenders” and inserting “(x)” prior to the phrase “Dutch Auctions open to all Lenders”;

(ii). inserting the phrase “or (y) open market purchases, in each case” immediately following the phrase “Dutch Auctions open to all Lenders”;

(iii) deleting the comma prior to the phrase “subject to the following limitations and other provisions”;

(iv) replacing the contents of clause (i) thereof with “[reserved];”; and

(v) inserting the phrase “or open market purchases” immediately following the phrase “in connection with a Dutch Auction” in clause (vi) thereof.

(e) The Credit Agreement is hereby amended by inserting the following Section 9.20 immediately following the end of Section 9.19 thereof:

Section 9.20 Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Credit Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

(f) Exhibit L to the Credit Agreement is hereby amended by deleting the phrase “ and no more than four Auctions may be made in any period of four consecutive fiscal quarters of the Borrower” at the end of the paragraph therein entitled “Summary”.

Section 3 . Conditions. This Agreement shall become effective as of the first date (the “ Effective Date ”) when each of the following conditions shall have been satisfied:

(i) the Administrative Agent shall have received from the Borrower, Lenders which together constitute the Required Lenders and the Administrative Agent an executed counterpart hereof or other written confirmation (in form satisfactory to the Administrative Agent) that such party has signed a counterpart hereof; and

(ii) the Borrower shall have paid any expenses owing by the Borrower to the Administrative Agent under Section 8 of this Agreement.

Section 4. Representations of the Borrower . The Borrower represents and warrants that:

(a) each of the representations and warranties made by any Credit Party in or pursuant to the Credit Documents is true and correct in all material respects (or, in the case of any representation and warranty qualified by materiality, in all respects) on and as of the Effective Date (except to the extent such representations and warranties are specifically made as of an earlier date, in which case such representations and warranties were true and correct in all material respects (or, in the case of any representation and warranty qualified by materiality, in all respects) as of such date); and

(b) no Default or Event of Default has occurred and is continuing on and as of the Effective Date.

Section 5. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

Section 6 . Effect of This Agreement. Except as expressly set forth herein, this Agreement shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of any Lender or Administrative Agent under the Credit Agreement or any other Credit Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Credit Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle any Credit Party to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Credit Document in similar or different circumstances.

Section 7. Counterparts . This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

Section 8 . Miscellaneous. This Agreement shall constitute a Credit Document for all purposes of the Credit Agreement. In accordance with Section 9.05 of the Credit Agreement, the Borrower agrees to reimburse the Administrative Agent for its reasonable and documented out-of-pocket expenses in connection with this Agreement, including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent. Each Lender party hereto acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own decision to enter into this Agreement. The Lenders party hereto hereby expressly consent to the execution of, and direct the Administrative Agent to execute, this Agreement and agree that the Administrative Agent is fully protected by the provisions of Article 8 of the Credit Agreement, including the third paragraph thereof.

[ remainder of page intentionally left blank ]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.



WALTER INVESTMENT MANAGEMENT CORP., as Borrower
By:	/s/ Cheryl Collins
	Name:	Cheryl A. Collins
	Title:	Senior Vice President and Treasurer

[Amendment No. 1 to Credit Agreement – Signature Page]



CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Administrative Agent and as Collateral Agent
By:	/s/ Doreen Barr
Name: Doreen Barr Title: Authorized Signatory
By:	/s/ Warren Van Heyst
Name: /s/ Warren Van Heyst Title: Authorized Signatory

[Amendment No. 1 to Credit Agreement –Signature Page]

Exhibit 10.22.1

EXECUTION VERSION

MASTER REPURCHASE AGREEMENT

among

BARCLAYS BANK PLC, as Agent,

SUTTON FUNDING LLC, as Purchaser,

REVERSE MORTGAGE SOLUTIONS, INC., as a Seller

and

RMS REO BRC, LLC, as a Seller

Dated September 29, 2015

but effective as of October 15, 2015

TABLE OF CONTENTS



1.	APPLICABILITY	1
2.	DEFINITIONS AND INTERPRETATION	2
3.	THE TRANSACTIONS	18
4.	CONFIRMATION	21
5.	[RESERVED]	22
6.	PAYMENT AND TRANSFER	22
7.	MARGIN MAINTENANCE	22
8.	TAXES; TAX TREATMENT	22
9.	SECURITY INTEREST; PURCHASER’S APPOINTMENT AS ATTORNEY-IN-FACT	24
10.	CONDITIONS PRECEDENT	26
11.	RELEASE OF PURCHASED ASSETS	30
12.	RELIANCE	30
13.	REPRESENTATIONS AND WARRANTIES	31
14.	COVENANTS OF SELLER	34
15.	REPURCHASE OF MORTGAGE LOANS	41
16.	SERVICING OF THE MORTGAGE LOANS; SERVICER TERMINATION	42
17.	EVENTS OF DEFAULT	45
18.	REMEDIES	47
19.	DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE	49
20.	USE OF EMPLOYEE PLAN ASSETS	49
21.	INDEMNITY	49
22.	WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS	50
23.	REIMBURSEMENT; SET-OFF	50
24.	FURTHER ASSURANCES	51
25.	ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION	52
26.	TERMINATION	52
27.	REHYPOTHECATION; ASSIGNMENT	52
28.	AMENDMENTS, ETC.	53
29.	SEVERABILITY	53
30.	BINDING EFFECT; GOVERNING LAW	53
31.	WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION AND VENUE; SERVICE OF PROCESS	53
32.	SINGLE AGREEMENT	54
33.	INTENT	54
34.	NOTICES AND OTHER COMMUNICATIONS	54
35.	CONFIDENTIALITY	56
36.	DUE DILIGENCE	57
37.	USA PATRIOT ACT; OFAC AND ANTI-TERRORISM	58

-i-



38.	JOINT AND SEVERAL LIABILITY OF SELLERS	58
39.	EXECUTION IN COUNTERPARTS	59

-ii-

SCHEDULES AND EXHIBITS


EXHIBIT A	MONTHLY CERTIFICATION


EXHIBIT B	REPRESENTATIONS AND WARRANTIES WITH RESPECT TO MORTGAGE LOANS


EXHIBIT C	FORM OF TRANSACTION NOTICE


EXHIBIT D	FORM OF GOODBYE LETTER


EXHIBIT E	FORM OF WAREHOUSE LENDER’S RELEASE


EXHIBIT F	[RESERVED]


EXHIBIT G	[RESERVED]

EXHIBIT H FORM OF SELLER MORTGAGE LOAN SCHEDULE

-iii-

MASTER REPURCHASE AGREEMENT

Dated September 29, 2015, but effective as of October 15, 2015

AMONG:

BARCLAYS BANK PLC, in its capacity as agent pursuant hereto (together with its permitted successors and assigns in such capacity hereunder, “ Agent ”),

SUTTON FUNDING LLC, in its capacity as purchaser (together with its permitted successors and assigns in such capacity hereunder, “ Purchaser ”),

REVERSE MORTGAGE SOLUTIONS, INC . (together with its permitted successors and assigns in such capacity hereunder, “ RMS ”)

and

RMS REO BRC, LLC (together with its permitted successors and assigns in such capacity hereunder, “ REO Subsidiary ”; RMS and REO Subsidiary, individually or collectively, as the context may require, the “ Seller ”).


1.	APPLICABILITY

Purchaser may from time to time, upon the terms and conditions set forth herein, agree to enter into transactions on a committed basis with respect to the Committed Amount and an uncommitted basis with respect to the Uncommitted Amount, in which (x) with respect to the initial Transaction, RMS sells to Purchaser the REO Asset and (y) with respect to any Transaction, a Seller sells to Purchaser Eligible Assets, on a servicing-released basis, against the transfer of funds by Purchaser, with a simultaneous agreement by Purchaser to transfer to Seller the related Purchased Assets on a date certain not later than one year following such transfer, against the transfer of funds by Seller; provided that the Aggregate MRA Purchase Price shall not exceed, as of any date of determination, the Maximum Aggregate Purchase Price. Each such transaction involving (x) the transfer of Eligible Mortgage Loans to Purchaser or (y) the transfer of REO Property (including REO Property resulting from a conversion of REO Property from a Mortgage Loan pursuant to Section 3(j) of this Agreement) to REO Subsidiary resulting in an increase in the value of the REO Asset, shall each be referred to herein as a “ Transaction ,” and shall be governed by this Agreement. This Agreement sets forth the procedures to be used in connection with periodic requests for Purchaser to enter into Transactions with Seller. Seller hereby acknowledges that Purchaser is under no obligation to enter into, any Transaction pursuant to this Agreement with respect to the Uncommitted Amount. Seller acknowledges that during the term of this Agreement, Agent may undertake to join either one or both of Sheffield Receivables Corporation and Barclays Bank Delaware as additional purchasers under this Agreement, and Seller hereby consents to the joinder of such additional purchasers.

On the initial Purchase Date, Purchaser will purchase certain Eligible Mortgage Loans from Seller in connection with the Transaction on such date. After the initial Purchase Date, as part of separate Transactions, Seller may request and, as set forth in the previous paragraph and subject to the terms and conditions of this Agreement, Purchaser may or shall fund an increase in the Aggregate MRA Purchase Price for (i) additional Eligible Mortgage Loans and (ii) the REO Asset based upon

the conveyance by RMS of additional REO Properties to REO Subsidiary or the acquisition of additional REO Properties by the REO Subsidiary.


2.	DEFINITIONS AND INTERPRETATION

(a) Defined Terms.

“ Accepted Servicing Practices ” means with respect to any Mortgage Loan or REO Property, as the context requires, those accepted, customary and prudent mortgage servicing practices (including collection procedures) of prudent mortgage banking institutions that service mortgage loans or real estate owned properties of the same type as the Mortgage Loans or REO Properties in the jurisdiction where the related Mortgaged Property or REO Property is located, and which are in accordance with the requirements of each Agency Program, applicable law and FHA guidelines and regulations, if applicable, so that the FHA insurance is not voided or reduced.

“ Accrual Period ” means, with respect to each Monthly Payment Date for any Transaction, the immediately prior calendar month; provided that with respect to the first Monthly Payment Date of a Transaction following the related Purchase Date, the Accrual Period shall commence on the related Purchase Date.

“ Act of Insolvency ” means, with respect to any Person,

(i) the filing of a voluntary petition (or the consent by such Person to the filing of any such petition against it), commencing, or authorizing the commencement of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors, or suffering any such petition or proceeding to be commenced by another; or such Person shall consent to or seek the appointment of or the taking of possession by a custodian, receiver, conservator, trustee, liquidator, sequestrator or similar official of such Person, or for any substantial part of its Property, or any general assignment for the benefit of creditors;

(ii) a proceeding shall have been instituted against such Person under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, moratorium, delinquency or liquidation law of any jurisdiction, whether now or subsequently in effect, or a custodian, receiver, conservator, liquidator, trustee, sequestrator or similar official for such Person or such Person’s Property (as a debtor or creditor protection procedure) is appointed by any Governmental Authority having the jurisdiction to do so or takes possession of such Property and any such proceeding is not dismissed within thirty (30) days of filing;

(iii) that such Person or any Affiliate shall become insolvent;

(iv) that such Person shall (a) admit in writing its inability to pay or discharge its debts or obligations generally as they become due or mature, (b) admit in writing its inability to, or intention not to, perform any of its material obligations, or (c) generally fail to pay any of its debts or obligations as they become due or mature;

(v) any Governmental Authority shall have seized or appropriated, or assumed custody or control of, all or any substantial part of the Property of such Person, or shall have taken any action to displace the management of such Person;

- 2 -

(vi) the audited annual financial statements of such Person or the notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of such Person as a “going concern” or a reference of similar import or shall indicate that such Person has a negative net worth or is insolvent; or

(vii) if such Person or any Affiliate is a corporation, such Person or any Affiliate or any of their Subsidiaries, shall take any corporate action in furtherance of, or the action of which would result in any of the foregoing actions.

“ Additional Eligible Loan Criteria ” has the meaning assigned thereto in the Pricing Side Letter.

“ Additional Purchased Mortgage Loans ” has the meaning assigned thereto in Section 7(b) hereof.

“ Additional REO Transfer Date ” has the meaning assigned thereto in Section 3(j)(ii).

“ Adjustable Rate Mortgage Loan ” means a Mortgage Loan which provides for the adjustment of the Mortgage Interest Rate payable in respect thereto.

“ Adjusted EBITDA ” means, for any period, Net Income for such period, adjusted by: (a) deducting therefrom (to the extent included in determining Net Income for such period except for payments referred to in clause (a)(iv) and (v) below, without duplication, the amount (determined on a consolidated basis for RMS and its Subsidiaries for such period) of: (i) non-recurring or unusual gains; (ii) non-cash gains and other non-cash income, (iii) the amount of all cash payments or cash charges made (or incurred) on account of a non-cash charge or non-cash loss added back to Adjusted EBITDA pursuant to clause (b)(iv) or (b)(vii) below in a previous period; (iv) net income attributable to discounted operations, (v) gains on non-recourse assets held by any Securitization Entity to the extent consolidated on the balance sheet; and (b) adding thereto (to the extent deducted in determining Net Income for such period or except as otherwise specified below), without duplication, the amount (determined on a consolidated basis for RMS and its Subsidiaries for such period) of: (i) total interest expense (inclusive of amortization of deferred financing fees (other than arrangement, commitment, underwriting, amendment, structuring or similar fees paid to any agent, underwriter or arranger or fees that are not paid ratably to the market) and other original issue discount and banking fees, charges and commissions (e.g., letter of credit fees and commitment fees)), (ii) without duplication among periods, provision for taxes paid or accrued based on income or capital, withholding, franchise and similar taxes; (iii) all depreciation and amortization expense, excluding amortization of Capitalized Mortgage Servicing Rights and intangibles, which shall not be added thereto; (iv) non-cash charges or non-cash losses (including but not limited to share based noncash compensation and non-cash fair value adjustments). (v) non-recurring or unusual losses or charges or net after-tax extraordinary losses or charges (including without limitation any such charges attributable to the implementation of cost-savings initiatives, severance, restructuring charges, relocation costs and one-time compensation charges (in each case relating to any Asset Acquisitions)); (vi) the amount of all cash received on account of any non-cash gains on non-cash income deducted from Adjusted EBITDA pursuant to clause (a)(iii) above in a previous period; and (vii) net loss attributable to discontinued operations.

“ Affiliate ” means, with respect to (i) any specified Person (other than the Seller or the Guarantor), any other Person controlling or controlled by or under common control with such specified Person, (ii) the Seller, its respective Subsidiaries and the Guarantor, and (iii) the Guarantor, the Seller. For the purposes of this definition, “control” means the power to direct the management

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and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms “controlling,” “controlled by” and “under common control with” have meanings correlative to the meaning of “control.”

“ Aged Mortgage Loan ” means a Mortgage Loan for which the time between the date on which RMS purchased such Mortgage Loan from the Ginnie Mae pool and the date of determination is more than 180 days, if such Mortgage Loan either (a) does not have a due and payable date from HUD, (b) foreclosure proceedings have not been initiated or (c) is not on a repayment plan.

“ Aged REO Property ” means an REO Property for which the time between (a) the date on which the earlier of RMS or the REO Subsidiary obtains marketable title and (b) the date of determination is more than six (6) months. Notwithstanding the foregoing, any REO Property shall be Aged REO Property on the date on which related HUD claims proceeds are paid.

“ Agency ” means Ginnie Mae.

“ Agency Guide ” means the Ginnie Mae Guide.

“ Agency Program ” means the Ginnie Mae Program.

“ Agent ” has the meaning set forth in the preamble hereof.

“ Aggregate MRA Purchase Price ” means as of any date of determination, an amount equal to the sum of the aggregate Purchase Price for all Purchased Assets then subject to Transactions under this Agreement.

“ Agreement ” means this Master Repurchase Agreement (including all exhibits, schedules and other addenda thereto), as it may be amended, further supplemented or otherwise modified from time to time.

“ Applicable Margin ” has the meaning assigned thereto in the Pricing Side Letter.

“ Approvals ” means with respect to RMS and Servicer the approvals obtained from the Agency or HUD in designation of RMS and/or Servicer as a Ginnie Mae-approved issuer or an FHA-approved mortgagee, as applicable, in good standing.

“ Asset Acquisition ” means (1) an investment by RMS or any Subsidiary of RMS in any other Person pursuant to which such Person shall become a Subsidiary of RMS, or shall be merged with or into RMS or a Subsidiary of RMS, or (2) the acquisition by RMS or any Subsidiary of RMS of the assets of any Person other than in the ordinary course of business.

“ Assignment and Acceptance ” has the meaning assigned thereto in Section 27(b) hereof.

“ Assignment of Mortgage ” means, with respect to any Mortgage, an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the assignment of the Mortgage.

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“ Backup Servicer Agreement ” means any backup servicing agreement among Purchaser, RMS and a backup servicer appointed pursuant to Section 16(d) , as the same may be amended, modified or supplemented from time to time.

“ Bank ” means (i) Wells Fargo Bank N.A, and its successors and permitted assigns or (ii) such other bank as may be mutually acceptable to RMS and Purchaser.

“ Bankruptcy Code ” means 11 U.S.C. Section 101 et seq. , as amended from time to time.

“ Breakage Costs ” has the meaning assigned thereto in Section 3(h) hereof.

“ Business Day ” means any day other than (i) a Saturday or Sunday, (ii) a day upon which the New York Stock Exchange or the Federal Reserve Bank of New York is closed or (iii) with respect to any day on which the parties hereto have obligations to the Custodian or on which the Custodian has obligations to any party hereto, a day upon which the Custodian’s offices are closed.

“ Capitalized Mortgage Servicing Rights ” means the value of RMS’s and its consolidated Subsidiaries’ (as set forth on its balance sheet) owned mortgage servicing rights, which represent RMS’s estimation of the present value of the fee income earned from continued servicing of the related mortgage loans.

“ Cash Equivalents ” means any of the following: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one (1) year from the date of acquisition; (b) mortgage-backed securities issued or guaranteed by any agency of the United States Government with an implied rating of AAA or with an express rating of AAA by either Standard & Poor’s Ratings Services (“ S&P ”) or by Moody’s Investors Service, Inc. (“ Moody’s ”); (c) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of six (6) months or less from the date of acquisition issued by any commercial bank organized under the laws of the United States or of any state thereof having combined capital and surplus of not less than $500,000,000; (d) commercial paper of a domestic issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within six months from the date of acquisition; (e) repurchase obligations of any commercial bank satisfying the requirements of clause (c) of this definition, having a term of not more than thirty (30) days, with respect to securities issued or fully guaranteed or insured by the United States government; (f) securities with maturities of one (1) year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s; (g) securities with maturities of six (6) months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the requirements of clause (c) of this definition; or (h) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (g) of this definition.

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“ Change in Control ” means either (a) the sale, transfer, or other disposition of all or substantially all of Seller’s assets (excluding any such action taken in connection with any securitization transaction or routine sales of Mortgage Loans or REO Properties) or (b) the consummation of a merger or consolidation of Seller with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity’s equity outstanding immediately after such merger, consolidation or such other reorganization is owned by persons who were not equityholders, an affiliate or a subsidiary of the Seller immediately prior to such merger, consolidation or other reorganization.

“ Change in Law ” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by Purchaser (or any Affiliate thereof) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Collection Account ” means the following account established by RMS in accordance with Section 16(e) for the benefit of Purchaser, Account Number: XXXXXXXXXX, ABA: #XXXXXXXXX.

“ Collection Account Control Agreement ” means that certain Collection Account Control Agreement, dated September 29, 2015 (but effective as of the Effective Date), by and among Purchaser, RMS and Bank, in form and substance acceptable to Purchaser to be entered into with respect to the Collection Account, as the same may be amended, modified or supplemented from time to time.

“ Committed Amount ” has the meaning assigned thereto in the Pricing Side Letter.

“ Confirmation ” has the meaning assigned thereto in Section 4 hereof.

“ Contract ” means an agreement between an Originator and any Obligor, pursuant to or under which such Obligor shall be obligated to pay for merchandise, insurance or services from time to time.

“ Converted REO Property ” means an REO Property that results from the foreclosure of any Mortgage Loan that was a Purchased Asset, or transfer of the related Mortgaged Property in lieu of foreclosure or other transfer of such real property, and (i) which is titled in the name of the REO Subsidiary and (ii) with respect to which such REO Property has satisfied the conditions of Section 3(j)(iv) .

“ Custodial Agreement ” means that certain Custodial Agreement, dated September, 29, 2015 (but effective as of the Effective Date), among RMS, Purchaser, REO Subsidiary, Agent and Custodian, entered into in connection with this Agreement, as the same may be amended, modified or supplemented from time to time.

“ Custodian ” means Deutsche Bank National Trust Company, and its successors and permitted assigns.

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“ Default ” means any event that, with the giving of notice or the passage of time or both, would constitute an Event of Default.

“ Default Rate ” has the meaning assigned thereto in the Pricing Side Letter.

“ Dollars ” or “ $ ” means, unless otherwise expressly stated, lawful money of the United States of America.

“ Effective Date ” means October 15, 2015.

“ Electronic Transmission ” means the delivery of information in an electronic format acceptable to the applicable recipient thereof. An Electronic Transmission shall be considered written notice for all purposes hereof (except when a request or notice by its terms requires execution).

“ Eligible Asset ” means any Eligible Mortgage Loan or the REO Asset.

“ Eligible Mortgage Loan ” means a Mortgage Loan that (i) satisfies each of the representations and warranties in Exhibit B to the Agreement in all material respects, (ii) was, at origination and while in a Ginnie Mae Security, in Strict Compliance with the eligibility requirements of the Ginnie Mae Program, (iii) contains all required documents in the Mortgage File without exceptions unless otherwise waived by Purchaser or permitted below, (iv) meets each of the applicable Additional Eligible Loan Criteria, (v) is identified on the schedule to the related Transaction Notice and (vi) subject to Section 10(b)(xiv) , is not an Illinois Mortgage Loan.

“ ERISA ” means, with respect to any Person, the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and rulings issued thereunder.

“ Escrow Payments ” means, with respect to a Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water charges, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges and other payments as may be required to be escrowed by the Mortgagor with the Mortgagee pursuant to the terms of the Mortgage or any other document.

“ Event of Default ” has the meaning assigned thereto in Section 17 hereof.

“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“ FDIC ” means the Federal Deposit Insurance Corporation or any successor thereto.

“ FHA ” means the Federal Housing Administration, an agency within HUD, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA regulations.

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“ Foreign Purchaser ” has the meaning assigned thereto in Section 8(d) .

“ Foreclosure Date ” has the meaning assigned thereto in Section 3(j)(iv).

“ GAAP ” means generally accepted accounting principles as in effect from time to time in the United States of America.

“ Ginnie Mae ” means the Government National Mortgage Association and its successors in interest, a wholly-owned corporate instrumentality of the government of the United States of America.

“ Ginnie Mae Guide ” means the Ginnie Mae Mortgage-Backed Securities Guide, as such Guide may hereafter from time to time be amended.

“ Ginnie Mae Mortgage Loan ” means a mortgage loan that is in Strict Compliance on the related Purchase Date with the eligibility requirements specified for the applicable Ginnie Mae Program described in the applicable Ginnie Mae Guide.

“ Ginnie Mae Program ” means the Ginnie Mae Mortgage-Backed Securities Programs, as described in the Ginnie Mae Guide.

“ Ginnie Mae Security ” means a fully-modified pass-through mortgage-backed certificate guaranteed by Ginnie Mae, evidenced by a book-entry account in a depository institution having book-entry accounts at the Federal Reserve Bank of New York and backed by a pool of Ginnie Mae Mortgage Loans.

“ Governmental Authority ” means any nation or government, any state or other political subdivision, agency or instrumentality thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over Seller or any of its Subsidiaries or any of their Property.

“ Guarantor ” means Walter Investment Management Corp.

“ Guaranty ” means the guaranty of Guarantor in favor of Purchaser, dated the date hereof, but effective the Effective Date, as the same may be amended, supplemented or otherwise modified from time to time.

“ HECM Buyout Loan ” means an Eligible Mortgage Loan that (a) is insured by FHA and for which no insurance claim payments have been made by FHA, (b) is a Ginnie Mae Mortgage Loan, (c) has been purchased out of a Ginnie Mae Security, (d) is a home equity conversion Mortgage Loan secured by a first lien, and (e) includes all payments made to or on behalf of the related borrower(s) under the related Mortgage Note.

“ Hedge Instrument ” means any interest rate cap agreement, interest rate floor agreement, interest rate swap agreement or other interest rate hedging agreement entered into by RMS with a counterparty reasonably acceptable to Agent, in each case with respect to the Mortgage Loans.

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“ HUD ” means the Department of Housing and Urban Development, or any federal agency or official thereof which may from time to time succeed to the functions thereof with regard to FHA mortgage insurance. The term “HUD,” for purposes of this Agreement, is also deemed to include subdivisions thereof such as the FHA and Ginnie Mae.

“ Illinois Mortgage Loan ” has the meaning assigned thereto in Section 10(b)(xiv) hereof.

“ Income ” means, with respect to any Purchased Asset at any time, any principal and/or interest thereon and all dividends, sale proceeds and all other proceeds as defined in Section 9‑102(a)(64) of the Uniform Commercial Code and all other collections and distributions thereon (including, without limitation, any proceeds received in respect of mortgage insurance).

“ Indebtedness ” means, with respect to any Person as of any date of determination: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable and paid within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (c) indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) in respect of letters of credit or similar instruments issued for account of such Person; (e) capital lease obligations; (f) payment obligations under repurchase agreements, single seller financing facilities, warehouse facilities and other lines of credit; (g) indebtedness of others guaranteed on a recourse or partial recourse basis by such Person; (h) all obligations incurred in connection with the acquisition or carrying of fixed assets; (i) indebtedness of general partnerships of which such Person is a general partner; and (j) any other known or contingent liabilities of such Person.

“ Indemnified Party ” has the meaning assigned thereto in Section 21(a) .

“ Initial Fee ” has the meaning assigned thereto in the Pricing Side Letter.

“ Initial REO Properties ” has the meaning assigned thereto in Section 3(j)(ii).

“ Initial REO Transfer Date ” has the meaning assigned thereto in Section 3(j)(ii).

“ Investment Company Act ” means the Investment Company Act of 1940, as amended, including all rules and regulations promulgated thereunder.

“ LIBOR ” means for each day, the rate (adjusted for statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits for a period equal to one month appearing on Bloomberg Screen US 0001M Page or if such rate ceases to appear on Bloomberg Screen US 0001M Page, or any other service providing comparable rate quotations at approximately 11:00 a.m.,

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London time, on the applicable date of determination, or such interpolated rate as determined by the Agent.

“ Lien ” means any mortgage, deed of trust, lien, claim, pledge, charge, security interest or similar encumbrance.

“ LLC Agreement ” means the limited liability company agreement of the REO Subsidiary entered into by RMS as sole member, as the same may be amended, supplemented or otherwise modified from time to time in accordance with its terms.

“ Margin Call ” has the meaning assigned thereto in Section 7(b) hereof.

“ Margin Deficit ” has the meaning assigned thereto in Section 7(b) hereof.

“ Market Value ” means, with respect to any Purchased Asset and as of any date of determination, (i) the value ascribed to a Purchased Asset (which in the case of the REO Asset, is based on the value ascribed to the REO Properties) by Agent in its sole discretion, exercising good faith and using methodology and parameters customarily used by Agent to value similar assets, as may be as marked to market daily, and (ii) zero, with respect to (x) any Mortgage Loan that is a Purchased Asset but is not an Eligible Mortgage Loan or (y) any REO Property for which Seller has failed to fulfill the requirements of Section 3(j)(ii)(B) (with respect to the Initial REO Properties) or 3(j)(iii)(B) (with respect to all other REO Properties), as applicable.

“ Material Adverse Change ” means, with respect to a Person, any material adverse change in the business, condition (financial or otherwise), operations, performance or Property of such Person, including the insolvency of such Person.

“ Material Adverse Effect ” means (a) a Material Adverse Change with respect to Seller, Servicer, Guarantor or any of their respective Affiliates; (b) a material impairment of the ability of Seller, Servicer, Guarantor or any of their respective Affiliates that is a party to any Program Document to perform under any Program Document to which it is a party; (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Document against Seller, Servicer, Guarantor or any of their respective Affiliates that is a party to any Program Document; (d) a material adverse effect on the Market Value of the Purchased Assets; or (e) a material adverse effect on the Approvals of RMS.

“ Maturity Date ” means October 14, 2016.

“ Maximum Aggregate Purchase Price ” means an amount equal to the sum of the Committed Amount and the Uncommitted Amount.

“ Maximum Time on Facility ” means for each Eligible Mortgage Loan or REO Property, the 364 day period of time, commencing with the related date an Eligible Asset became subject to a Transaction hereunder.

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“ Membership Certificate ” means a physical certificate evidencing a 100% beneficial ownership interest in the REO Subsidiary, which shall be registered in the name of Purchaser until such certificate is repurchased from Purchaser by RMS.

“ Monthly Payment Date ” means the fifth (5th) Business Day of each calendar month beginning with November 6, 2015.

“ Mortgage ” means a mortgage, deed of trust, or other security instrument, securing a Mortgage Note.

“ Mortgage File ” has the meaning assigned thereto in the Custodial Agreement.

“ Mortgage Interest Rate ” means, with respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the related Mortgage Note.

“ Mortgage Loan ” means a HECM Buyout Loan.

“ Mortgage Note ” means a promissory note or other evidence of indebtedness of the obligor thereunder, evidencing a Mortgage Loan, and secured by the related Mortgage.

“ Mortgaged Property ” means the real property (or leasehold estate, if applicable) securing repayment of the debt evidenced by a Mortgage Note.

“ Mortgagee ” means the record holder of a Mortgage Note secured by a Mortgage.

“ Mortgagor ” means the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder.

“ Net Income ” means, for any period, the net income (or loss) of RMS and its Subsidiaries determined on a consolidated basis for such period (taken as a single accounting period) in accordance with GAAP.

“ Nominee ” shall mean RMS or any other Person that executes a nominee agreement, whereby REO Subsidiary agrees that the nominee will hold legal title to Eligible Mortgage Loans owned by REO Subsidiary and such nominee agrees that REO Subsidiary will remain the beneficial owner of such Mortgage Loans, in form and substance acceptable to Purchaser, so long as such nominee is approved in writing by Purchaser in its sole discretion.

“ Non-Utilization Fee ” has the meaning assigned thereto in the Pricing Side Letter.

“ Nonrecourse Debt ” means an obligation for borrowed money secured by a lien on any property owned by a Person, with respect to which obligation the Person has not assumed or become liable for the payment thereof.

“ Notice Date ” has the meaning assigned thereto in Section 3(c) hereof.

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“ Obligations ” means (a) all amounts due and payable by Seller to Purchaser in connection with a Transaction hereunder, together with interest thereon (including interest which would be payable as post‑petition interest in connection with any bankruptcy or similar proceeding) and other obligations and liabilities of Seller to Purchaser arising under, or in connection with, the Program Documents or directly related to the Purchased Assets, whether now existing or hereafter arising; (b) any and all sums paid by Purchaser or on behalf of Purchaser pursuant to the Program Documents in order to preserve any Purchased Asset or its interest therein; (c) in the event of any proceeding for the collection or enforcement of any of Seller’s indebtedness, obligations or liabilities referred to in clause (a), the reasonable expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on any Purchased Asset, or of any exercise by Purchaser and/or Agent of their rights under the Program Documents, including without limitation, reasonable attorneys’ fees and disbursements and court costs; and (d) all of Seller’s indemnity obligations to Purchaser and Agent pursuant to the Program Documents.

“ Obligor ” means a Person obligated to make payments pursuant to a Contract; provided that in the event that any payments in respect of a Contract are made by any other Person, such other Person shall also be deemed to be an Obligor.

“ OFAC ” means the Office of Foreign Assets Control of the United States Department of Treasury.

“ OFAC Lists ” has the meaning ascribed to it in Section 37(b).

“ Originator ” means RMS or any other third party originator as mutually agreed upon by Agent and Seller.

“ Other Taxes ” has the meaning assigned thereto in Section 8(b) .

“ Parent Company ” means a corporation or other entity owning at least 50% of the outstanding shares of voting stock of RMS.

“ Person ” means any legal person, including any individual, corporation, partnership, association, joint stock company, trust, limited liability company, unincorporated organization, governmental entity or other entity of similar nature.

“ Price Differential ” means, with respect to any Purchased Asset or Transaction as of any date of determination, an amount equal to the product of (A) the Pricing Rate (or during the continuation of an Event of Default, by daily application of the Default Rate) and (B) the Purchase Price for such Purchased Asset or Transaction. Price Differential will be calculated in accordance with Section 3(e) herein for the actual number of days elapsed during the applicable Accrual Period on a 360‑day basis.

“ Price Differential Determination Date ” means, with respect to any Monthly Payment Date, the second (2 ^nd ) Business Day preceding such date.

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“ Pricing Rate ” means, as of any date of determination and with respect to an Accrual Period for any Purchased Asset, an amount equal to the sum of (i) LIBOR plus (ii) the Applicable Margin.

“ Pricing Side Letter ” means that certain Pricing Side Letter, dated September 29, 2015 (but effective as of the Effective Date), among each Seller, Purchaser and Agent, entered into in connection with this Agreement, as the same may be amended, modified or supplemented from time to time.

“ Principal Balance ” means (i) with respect to Eligible Mortgage Loans, the unpaid principal balance of such Mortgage Loan and (ii) with respect to the REO Asset, the value ascribed to the related REO Properties (including the value of any related HUD claim) by Agent in its sole discretion, exercising good faith and using methodology and parameters customarily used by Agent to value similar assets, as may be as marked to market daily.

“ Program Documents ” means this Agreement, the Pricing Side Letter, the Custodial Agreement, the Collection Account Control Agreement, any assignment of Hedge Instrument, the Verification Agent Letter, any Backup Servicer Agreement and all other agreements, documents and instruments entered into by Seller on the one hand, and Purchaser or one of its Affiliates (or Custodian on its behalf) and/or Agent or one of its Affiliates on the other, in connection herewith or therewith with respect to the transactions contemplated hereunder or thereunder and all amendments, restatements, modifications or supplements thereto.

“ Property ” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“ Purchase Date ” means, with respect to each Transaction, the date on which Purchased Assets are sold by Seller to Purchaser or Purchaser’s designee (or, in the case of REO Properties transferred to the REO Subsidiary, resulting in an increase of value to the REO Asset) hereunder.

“ Purchase Price ” means the price at which Purchased Assets subject to a Transaction are sold by a Seller to Purchaser or Purchaser’s designee (or, in the case of REO Properties, transferred to the REO Subsidiary, resulting in an increase of value to the REO Asset) on a Purchase Date (which includes a mutually negotiated premium allocable to the portion of the related Purchased Assets that constitutes the related Servicing Rights), which shall (unless otherwise agreed to by the Seller and Purchaser) be equal to (A) in the case of Eligible Mortgage Loans, the lesser of (i) 100% of the Principal Balance of such Purchased Assets as of any date of determination and (ii) the product of the applicable Purchase Price Percentage multiplied by the Market Value of such Purchased Assets as of such date of determination or (B) in the case of the REO Asset, the product of the applicable Purchase Price Percentage multiplied by the sum of (x) the Market Value of the REO Asset and (y) the aggregate of HUD claims proceeds for all REO Properties.

“ Purchase Price Percentage ” has the meaning assigned thereto in the Pricing Side Letter.

“ Purchased Assets ” means each Eligible Mortgage Loan subject to a Transaction and the REO Asset.

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“ Purchased Items ” means the right, title and interest of the Seller in, under and to the following, whether now existing or hereafter acquired: (i) the Mortgage Loans subject to a Transaction, (ii) the Servicing Rights related to the Mortgage Loans subject to a Transaction, (iii) Seller’s rights under any related Hedge Instruments to the extent related to the Mortgage Loans subject to a Transaction, (iv) such other Property, rights, titles or interest as are specified on the related Transaction Notice, (v) rights to payment under all mortgage guarantees and insurance relating to the individual Mortgage Loans subject to a Transaction (issued by governmental agencies or otherwise) or the related Mortgaged Property and any mortgage insurance certificate or other document evidencing such mortgage guarantees or insurance and all claims and payments related to the Mortgage Loans subject to a Transaction, (vi) all guarantees or other support for the Mortgage Loans subject to a Transaction, (vii) all rights to Income and the rights to enforce such payments arising from the Mortgage Loans subject to a Transaction and any other contract rights, payments, rights to payment (including payments of interest or finance charges) with respect thereto, (viii) the REO Asset (with respect to RMS as a Seller only) and the REO Property File with respect to any REO Property held by the REO Subsidiary, (ix) with respect to RMS as a Seller only, the Collection Account and all amounts on deposit therein, (x) all Additional Purchased Mortgage Loans, (xi) all “accounts,” “deposit accounts,” “securities accounts,” “chattel paper,” “commercial tort claims,” “deposit accounts,” “documents,” “general intangibles,” “instruments,” “investment property,” and “securities accounts,” relating to the foregoing as each of those terms is defined in the Uniform Commercial Code and all cash and Cash Equivalents and all products and proceeds relating to or constituting any or all of the foregoing, (xii) any purchase agreements relating to or constituting the Mortgage Loans subject to a Transaction, (xiii) any other collateral pledged or otherwise relating to any or all of the foregoing, together with all files, material documents, instruments, surveys (if available), certificates, correspondence, appraisals, computer records, computer storage media, accounting records and other books and records relating to the foregoing, (xiv) any rights retained by RMS in any Mortgage Loans that it transfers to the REO Subsidiary and (xv) any and all replacements, substitutions, distributions on, or proceeds with respect to, any of the foregoing.

“ Purchaser ” has the meaning set forth in the preamble hereof.

“ Purchaser’s Wire Instructions ” has the meaning set forth in the Pricing Side Letter.

“ Records ” means all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by Seller or any other person or entity with respect to a Purchased Asset. Records shall include, without limitation, (i) with respect to the REO Asset, the Membership Certificate, the related REO Property File, and any other instruments necessary to document such REO Asset, and (ii) with respect to the other Purchased Assets, the Mortgage Notes, any Mortgages, the Mortgage Files, the Servicing Files, and any other instruments necessary to document or service such Purchased Asset, including, without limitation, the complete payment and modification history of such Purchased Asset.

“ REO Asset ” means the Membership Certificate, so long as the related limited liability company agreement provides that such Membership Certificate is a “Certificated Security” as defined in Article 8 of the Uniform Commercial Code.

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“ REO Deed ” means, with respect to each REO Property, the instrument or document required by the law of the jurisdiction in which the REO Property is located to convey fee title.

“ REO Funding Date ” has the meaning assigned thereto in Section 3(j)(iv).

“ REO Property ” means a residential real property including land and improvements, together with all buildings, fixtures and attachments thereto, all insurance proceeds, liquidation proceeds, condemnation proceeds, and all other rights, benefits, proceeds and obligations arising from or in connection therewith, in each case which is acquired by or transferred to the REO Subsidiary or held by RMS.

“ REO Property File ” means (i) the original REO Deed with evidence of recording of any deed evidencing the ownership of the related REO Property by the REO Subsidiary and (ii) the original or a copy of title insurance policy for the REO Property, an ALTA lender’s title insurance policy or a title commitment.

“ REO Subsidiary ” means RMS REO BRC, LLC, the special purpose Subsidiary of RMS formed to hold Eligible Mortgage Loans and REO Property related to foreclosures of HECM Buyout Loans.

“ REO Subsidiary Schedule of Assets ” means an electronic schedule of assets, identifying the REO Properties currently owned by the REO Subsidiary, whereupon delivery of such schedule, Seller designates which items have been added to or removed from such schedule as compared to the version of such schedule most recently provided by Seller.

“ Repurchase Date ” means, with respect to any Transaction, the earliest of (i) the Termination Date, (ii) the date set forth in the related Transaction Notice as the scheduled Repurchase Date, if any, (iii) if Seller provides both written notice to Purchaser requesting a repurchase of such Transaction and the Repurchase Price, at or prior to 12:00 noon (New York City time) on any date, such date, (iv) if Seller provides written notice to Purchaser requesting a repurchase of such Transaction after 12:00 noon (New York City time) on any date, the next Business Day following delivery of such notice, and (v) upon receipt of proceeds from an appraisal-based claim from HUD.

“ Repurchase Price ” means the price at which Purchased Assets are to be transferred from the Purchaser or Purchaser’s designee to related Seller, which will be determined in each case as the sum of: (i) any portion of the Purchase Price not yet repaid to Purchaser, and in the case of the REO Asset, such unpaid portion of the Purchase Price attributable to the REO Property subject to removal from the REO Subsidiary, (ii) the Price Differential accrued and unpaid thereon except as set forth in Section 3(e) and (iii) Breakage Costs, if any, and (iv) any accrued and unpaid fees or expenses or indemnity amounts and any other outstanding amounts owing and invoiced under the Program Documents from related Seller to Purchaser.

“ Request for Release of Documents ” means the Request for Release of Documents set forth as Annex 5 of the Custodial Agreement.

“ Requirement of Law ” means as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable

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to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

“ SEC ” has the meaning ascribed thereto in Section 35 .

“ Section 404 Notice ” means the notice required pursuant to Section 404 of the Helping Families Save Their Homes Act of 2009 (P.L. 111-22), which amends 15 U.S.C. Section 1641 et seq. , to be delivered by a creditor that is an owner or an assignee of a Mortgage Loan to the related Mortgagor within thirty (30) days after the date on which such Mortgage Loan is sold or assigned to such creditor.

“ Securitization Entity ” means (i) any Person other than Seller (whether or not a Subsidiary of Seller) established for the purpose of issuing asset-backed or mortgaged-backed or mortgage pass-through securities of any kind (including collateralized mortgage obligations and net interest margin securities), (ii) any special purpose Subsidiary established for the purpose of selling, depositing or contributing assets into a Person described in clause (i) or holding securities in any related Securitization Entity, regardless of whether such person is an issuer of securities; provided that such Person is not an obligor with respect to any Indebtedness of Seller and (iii) any special purpose Subsidiary of Seller formed exclusively for the purpose of satisfying the requirements of any credit enhancement or support agreements and regardless of whether such Subsidiary is an issuer of securities.

“ Seller ” has the meaning set forth in the preamble hereof.

“ Seller Mortgage Loan Schedule ” means the list of Eligible Mortgage Loans proposed to be purchased by Purchaser, in the form of Exhibit H hereto, that will be delivered in an excel spreadsheet format by or on behalf of Seller to Agent, Purchaser and Custodian together with each Transaction Notice and attached by the Custodian to the related Trust Receipt. The Seller Mortgage Loan Schedule shall clearly indicate which of RMS or REO Subsidiary owns such Eligible Mortgage Loans.

“ Seller’s Wire Instructions ” has the meaning assigned thereto in the Pricing Side Letter.

“ Separateness Covenants ” means the covenants listed in Section 2.06 of the LLC Agreement.

“ Servicer ” means Reverse Mortgage Solutions, Inc., or any other servicer approved by Agent in its sole discretion, which may be RMS.

“ Servicer Termination Event ” means:

(a) Servicer fails to service the Mortgage Loans in accordance with Accepted Servicing Practices and Servicer fails to correct such failure after receiving written notice of such failure;

(b) Servicer fails to remit when due Income payments required to be made under the terms of this Agreement or such Mortgage Loan; or

(c) Servicer fails to meet the qualifications to maintain all requisite Approvals, such Approvals are revoked or such Approvals are materially modified.

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“ Servicing File ” means with respect to each Mortgage Loan or REO Property, the file retained by Seller or REO Subsidiary or its respective designee consisting of all documents that a prudent originator and servicer would include (including copies of the Mortgage File), all documents necessary to document and service the Mortgage Loans and REO Properties and any and all documents required to be delivered in connection with any transfer of servicing pursuant to the Program Documents.

“ Servicing Records ” means with respect to a Mortgage Loan, the related servicing records, including but not limited to any and all servicing agreements, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the servicing of such Mortgage Loan.

“ Servicing Rights ” means contractual, possessory or other rights of RMS or any other Person to administer or service a Mortgage Loan or to possess the Servicing File.

“ Servicing Term ” has the meaning assigned thereto in Section 16(b) .

“ Stable Balance Fee ” has the meaning assigned thereto in the Pricing Side Letter.

“ Strict Compliance ” means compliance of RMS and the Mortgage Loans with the requirements of the Agency Guide or the FHA regulations and guidelines, as applicable.

“ Subsidiary ” means, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

“ Tangible Net Worth ” means for any Person as of any date of determination, (i) the net worth of Seller on a consolidated basis determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill but excluding originated and purchased mortgage servicing rights) and any and all advances to, investments in and receivables held from Affiliates (other than with respect to the Seller and Subsidiaries of the Seller).

“ Taxes ” has the meaning assigned thereto in Section 8(a) .

“ Termination Date ” means the earliest to occur of (i) the Maturity Date, (ii) the day on which the Seller merges with or consolidates into another entity or any other corporate reorganization and thereafter (a) the surviving entity fails to assume all the obligations of Seller under this Agreement or (b) the creditworthiness of the surviving entity is materially weaker than that of Seller immediately prior to such merger or consolidation, (iii) the day on which, due to a Change in Law, it becomes unlawful for a party to this Agreement to perform its obligations to make payment or deliver or to

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receive payment or delivery with respect to the Transactions or to otherwise comply with the material terms of this Agreement; (iv) failure of Seller to operate or conduct Seller’s business operations or any material portion thereof in the ordinary course, or any other material adverse change in Servicer’s business operations or financial condition, which, in Agent’s sole discretion, constitutes a material impairment of Seller’s ability to perform its obligations under this Agreement or any other related document; (v) upon five (5) Business Days’ prior written notice from Seller to Purchaser following the occurrence of a Change in Law that increases Purchaser’s costs (as further described in Section 3(g) hereof); (vi) at the option of Purchaser, the occurrence of an Event of Default under this Agreement after the expiration of any applicable grace period; and (vii) at the option of Purchaser, the effective date of any event described in Section 14(p) or Section 14(r) .

“ Transaction ” has the meaning assigned thereto in Section 1 .

“ Transaction Notice ” means a written request of Seller to enter into a Transaction in a form attached as Exhibit C hereto or such other form as shall be mutually agreed upon between Seller and Purchaser, which is delivered to Purchaser in accordance with Section 3(c) herein.

“ Trust Receipt ” has the meaning assigned thereto in the Custodial Agreement.

“ Uncommitted Amount ” has the meaning assigned thereto in the Pricing Side Letter.

“ Uniform Commercial Code ” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any Purchased Assets or the continuation, renewal or enforcement thereof is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.

“ Verification Agent ” means an entity appointed by the Agent to perform specific services with respect to the Eligible Mortgage Loans, or its successors and assigns.

“ Verification Agent Letter ” means the agreement pursuant to which the Verification Agent performs services with respect to the Eligible Mortgage Loans.

“ Warehouse Lender ” means any lender providing financing to RMS for the purpose of warehousing, originating or purchasing a Mortgage Loan (including but not limited to purchasers under repurchase agreements), which lender has a security interest in such Mortgage Loan to be purchased by Purchaser.

“ Warehouse Lender’s Release ” means a letter, in the form of Exhibit E , from a Warehouse Lender to Purchaser, unconditionally releasing all of Warehouse Lender’s right, title and interest in certain Mortgage Loans identified therein upon payment to the Warehouse Lender.

(b) Interpretation .

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Headings are for convenience only and do not affect interpretation. The following rules of this subsection (b) apply unless the context requires otherwise. The singular includes the plural and conversely. A gender includes all genders. Where a word or phrase is defined, its other grammatical forms have a corresponding meaning. A reference to a subsection, Section, Annex or Exhibit is, unless otherwise specified, a reference to a section of, or annex or exhibit to, this Agreement. A reference to a party to this Agreement or another agreement or document includes the party’s successors and permitted substitutes or assigns. A reference to an agreement or document is to the agreement or document as amended, modified, novated, supplemented or replaced, except to the extent prohibited by any Program Document. A reference to legislation or to a provision of legislation includes any modification or re-enactment of it, a legislative provision substituted for it and a regulation or statutory instrument issued under it. A reference to writing includes a facsimile transmission and any means of reproducing words in a tangible and permanently visible form. A reference to conduct includes, without limitation, an omission, statement or undertaking, whether or not in writing. An Event of Default exists until it has been waived in writing by Agent or has been timely cured. The words “hereof,” “herein,” “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “including” is not limiting and means “including without limitation.” In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.” This Agreement may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP, consistently applied. References herein to “fiscal year” and “fiscal quarter” refer to such fiscal periods of Seller.

Except where otherwise provided in this Agreement, any determination, consent, approval, statement or certificate made or confirmed in writing with notice to Seller by Purchaser or an authorized officer of Purchaser as required by this Agreement is conclusive in the absence of manifest error. A reference to an agreement includes a security interest, guarantee, agreement or legally enforceable arrangement whether or not in writing related to such agreement.

A reference to a document includes an agreement in writing or a certificate, notice, instrument or document, or any information recorded in electronic form. Where Seller is required to provide any document to Purchaser and/or Agent under the terms of this Agreement, the relevant document shall be provided in writing or printed form unless Purchaser and/or Agent requests otherwise.

This Agreement is the result of negotiations among, and has been reviewed by counsel to, Purchaser, Agent and Seller, and is the product of all parties. In the interpretation of this Agreement, no rule of construction shall apply to disadvantage one party on the ground that such party proposed or was involved in the preparation of any particular provision of this Agreement or this Agreement itself. Except where otherwise expressly stated, Purchaser and Agent may give or withhold, or give conditionally, approvals and consents and may form opinions and make determinations in their absolute sole discretion. Except as specifically required herein, any requirement of good faith, discretion or judgment by Purchaser or Agent shall not be construed to require Purchaser to request or await receipt of information or documentation not immediately available from or with respect to Seller, any other Person or the Purchased Assets themselves.


3.	THE TRANSACTIONS

(a) It is acknowledged and agreed that, notwithstanding any other provision of this Agreement to the contrary, the facility provided under this Agreement is (i) a committed facility with respect to the

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Committed Amount and (ii) an uncommitted facility with respect to the Uncommitted Amount, and Purchaser shall have no obligation to enter into any Transactions hereunder with respect to the Uncommitted Amount. All purchases of Eligible Assets hereunder shall be first deemed committed up to the Committed Amount and then the remainder, if any, shall be deemed uncommitted up the Uncommitted Amount.

(b) Subject to the terms and conditions of the Program Documents, Purchaser may enter into Transactions provided , that the Aggregate MRA Purchase Price shall not exceed, as of any date of determination, the Maximum Aggregate Purchase Price.

(c) Unless otherwise agreed, Seller shall request that Purchaser enter into a Transaction with respect to any Eligible Mortgage Loan by delivering to the indicated required parties (each, a “ Required Recipient ”) the required delivery items (each, a “ Required Delivery Item ”) set forth in the table below by the corresponding required delivery time (the “ Required Delivery Time ”), and such Transaction shall occur no later than the corresponding required purchase time (the “ Required Purchase Time ”):



Purchased Asset Type	Required Delivery Items	Required Delivery Time	Required Recipient	Required Purchase Time
Eligible Mortgage Loan	(i) a Transaction Notice and (ii) Seller Mortgage Loan Schedule	No later than 5:00 p.m. (New York City time) on the Business Day prior to the requested Purchase Date	Purchaser, Agent and Custodian	No later than 5:00 p.m. (New York City time) on the requested Purchase Date

The date on which any notice pursuant to this Section 3(c) is given is known as the “ Notice Date ”.

(d) Upon Seller’s request to enter into a Transaction pursuant to Section 3(c) and assuming all conditions precedent set forth in this Section 3 and in Sections 10(a) and (b) have been met, and provided no Default or Event of Default shall have occurred and be continuing, on the requested Purchase Date, Purchaser shall, in the case of a Transaction with respect to the Committed Amount, and may, in its sole discretion, in the case of a Transaction with respect to the Uncommitted Amount, purchase the Eligible Mortgage Loans included in the related Transaction Notice by transferring the Purchase Price (net of any unpaid Initial Fee, Transaction Fees or any other unpaid fees and expense then due and payable by Seller to Purchaser pursuant to this Agreement) in accordance with Seller’s Wire Instructions or as otherwise provided. Seller acknowledges and agrees that the Purchase Price includes a mutually negotiated premium allocable to the portion of the Purchased Items that constitutes the related Servicing Rights.

(e) On the related Price Differential Determination Date, Agent shall calculate the Price Differential for each outstanding Transaction payable on the Monthly Payment Date utilizing the Pricing Rate. Not less than two (2) Business Days prior to each Monthly Payment Date, Agent shall provide RMS (with a copy to REO Subsidiary) with an invoice for the amount of the Price Differential due and payable with respect to all outstanding Transactions, setting forth the calculations thereof in reasonable detail and all accrued fees and expenses then due and owing to Purchaser from each Seller. On the earliest of (1) the Monthly Payment Date or (2) the Termination Date, each Seller shall pay to Purchaser the Price Differential then due and payable by it for (x) all outstanding related Transactions and (y) Purchased Assets for which Purchaser has received the related Repurchase Price (other than Price Differential) pursuant to Section 3(f) during the prior calendar month.

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(f) With respect to a Transaction, upon the earliest of (1) the Repurchase Date and (2) the Termination Date, Seller shall pay to Purchaser the related Repurchase Price (other than the related accrued Price Differential) together with any other Obligations then due and payable, and shall repurchase all Purchased Assets then subject to such Transaction. The Repurchase Price shall be transferred directly to Purchaser, as set forth in Section 6.

(g) If Agent determines in its sole discretion that any Change in Law or any change in accounting rules regarding capital requirements has the effect of reducing the rate of return on Purchaser’s capital or on the capital of any Affiliate of Purchaser under this Agreement as a consequence of such Change in Law or change in accounting rules (it being understood that Purchaser will make such determination consistent with those made with respect to similar borrowers or sellers under similar credit or repurchase agreements), then from time to time Seller will compensate Purchaser or Purchaser’s Affiliate, as applicable, for such reduced rate of return suffered as a consequence of such Change in Law or change in accounting rules on terms similar to those imposed by Purchaser. Further, if due to the introduction of, any change in, or the compliance by Purchaser with (i) any eurocurrency reserve requirement, or (ii) the interpretation of any law, regulation or any guideline or request from any central bank or other Governmental Authority whether or not having the force of law, there shall be an increase in the cost to Purchaser or any Affiliate of Purchaser in engaging in the present or any future Transactions (it being understood that Purchaser will make the foregoing determinations consistent with those made with respect to similar borrowers or sellers under similar credit or repurchase agreements), then Seller shall, from time to time and upon demand by Purchaser, compensate Purchaser or Purchaser’s Affiliate for such increased costs, and such amounts shall be deemed a part of the Obligations hereunder. Purchaser shall provide Seller with notice as to any such Change in Law, change in accounting rules or change in compliance promptly following Purchaser’s receipt of actual knowledge thereof.

(h) Following the date on which RMS requests and receives term funding from Purchaser, Seller shall indemnify Purchaser and hold Purchaser harmless from any losses, costs and/or expenses that Purchaser may sustain or incur as a result of terminating any Transaction on or before a Repurchase Date arising from the reemployment of funds obtained by Purchaser hereunder or from actual out-of-pocket fees and expenses payable to terminate the deposits from which such funds were obtained (“ Breakage Costs ”). The Agent shall deliver to Seller a statement setting forth the amount and basis of determination of any Breakage Costs in such detail as determined in good faith by Purchaser to be adequate, it being agreed that such statement and the method of its calculation shall be adequate and shall be conclusive and binding upon Seller, absent manifest error. The provisions of this Section 3(h) shall survive termination of this Agreement.

(i) If on any Business Day Agent determines (which determination shall be conclusive absent manifest error) (a) that adequate and reasonable means do not exist for ascertaining LIBOR; or (b) that LIBOR will not adequately and fairly reflect the cost to Purchaser of entering into or maintaining outstanding Transactions; or (c) that it has become unlawful for it to honor its obligation to enter into or maintain outstanding Transactions hereunder using LIBOR, then Agent shall give notice thereof to Seller by telephone, facsimile, or other electronic means as promptly as practicable thereafter and, until Agent notifies Seller that the circumstances giving rise to such notice no longer exist, the Pricing Rate included in any Confirmation with respect to new Transactions and in any calculation of the Price Differential with respect to outstanding Transactions will be determined, subject to the timely approval of Seller after receipt of notice of such revised rate, at a rate per annum that Purchaser determines in its reasonable discretion adequately reflects the cost to Purchaser of making or maintaining such Transactions.

(j) REO Property .

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(i) RMS has taken all actions necessary to fully establish the REO Subsidiary, including, but without limitation, filing a certificate of formation with the applicable state and executing the LLC Agreement.

(ii) Seller (A) shall promptly transfer certain REO Properties unrelated to Mortgage Loans that are Purchased Assets (the “ Initial REO Properties ”) to the REO Subsidiary and the REO Asset along with written notice of the Transaction in the form of an REO Subsidiary Schedule of Assets to the Purchaser and Custodian and shall simultaneously transfer to the Custodian electronic copies of the applicable REO Deeds (such date, the “ Initial REO Transfer Date ”) and (B) shall (x) subject to any applicable redemption period, promptly deliver to the Purchaser evidence, as described in clause (iv) hereof, that Seller has caused the REO Deed to be sent for recording in the applicable office of the applicable jurisdiction and (y) promptly transfer to the Custodian the related REO Property File as the documents contained in therein come into existence; but, with respect to items related to insurance, no more than twenty (20) days, and with respect to items related to the REO Deed, no more than forty-five (45) days, in each case after the transfer of the Initial REO Properties to the REO Subsidiary, unless otherwise agreed to by Purchaser or Agent; provided that if Seller fails to deliver such evidence provided in (B)(x) and (B)(y) of this clause (ii) within the applicable time periods, the related REO Property shall have a Market Value of zero.

(iii) At any time subsequent to the initial Transaction that a Mortgage Loan that is a Purchased Asset is foreclosed upon, (A) the record title in such Mortgage Loan shall promptly be vested in and retained by the Nominee, and Seller shall transfer to the Custodian an electronic copy of the related REO Deed (such date, the “ Foreclosure Date ”, and together with the Initial REO Transfer Date, an “ REO Funding Date ”) and (B) Seller shall (x) subject to any applicable redemption period, promptly deliver to the Purchaser evidence, as described in clause (iv) hereof, that Seller has caused the REO Deed to be sent for recording in the applicable office of the applicable jurisdiction and (y) promptly transfer to the Custodian the related REO Property File as the documents contained in therein come into existence; but, with respect items related to insurance, no more than twenty (20) days, and with respect to items related to the REO Deed, no more than forty-five (45) days, in each case from the Foreclosure Date, unless otherwise agreed to by Purchaser or Agent; provided that if Seller fails to deliver such evidence provided in (x) and (y) of this clause (iii) within the applicable time periods, the related REO Property shall have a Market Value of zero.

(iv) For purposes of this Agreement, a Mortgage Loan that is a Purchased Asset shall be deemed to have converted into an REO Property upon the earliest to occur of the following: (A) an REO Deed shall have been received in the name of the REO Subsidiary with respect to the Mortgaged Property related to such Mortgage Loan; (B) the REO Subsidiary shall have received a receipt or other written acknowledgment acceptable to Purchaser from the filing clerk evidencing the submission for filing of an REO Deed with respect to the Mortgaged Property related to such Mortgage Loan, (C) the REO Subsidiary shall have received a receipt issued by a Governmental Authority evidencing the REO Subsidiary’s right to receive the REO Deed for the Mortgaged Property related to such Mortgage Loan or (D) Purchaser shall have received such other evidence of the REO Subsidiary’s interest in such Converted REO Property acceptable to Purchaser in its reasonable discretion.

(v) On any Foreclosure Date, a Transaction shall be deemed to occur with respect to the Converted REO Property, and the Repurchase Price with respect to such Mortgage Loan shall be reduced to zero and such Repurchase Price shall be accounted for in determining the Purchase Price of such Converted REO Property. A Transaction Notice shall not be required for any such

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deemed Transaction to occur; however, Seller shall provide prompt written notice in the form of an REO Subsidiary Schedule of Assets to Purchaser and Custodian upon such deemed conversion.

(vi) Pursuant to that certain Flow Assignment Agreement, dated as of the date hereof between REO Subsidiary and RMS, RMS may from time to time assign certain Eligible Mortgage Loans subject to a Transaction to REO Subsidiary. Upon the assignment of any such Eligible Mortgage Loan to REO Subsidiary, RMS and REO Subsidiary shall provide notice thereof to Purchaser and deliver to Purchaser an updated Seller Mortgage Loan Schedule showing updated ownership of Eligible Mortgage Loans subject to a Transaction. Thereafter, all obligations with respect to such Eligible Mortgage Loans (including without limitation those in Section 3(e) and 3(f)) shall be obligations of REO Subsidiary. To the extent that an Eligible Mortgage Loan subject to a Transaction is transferred to REO Subsidiary, the value of the REO Asset shall be deemed not to increase by the Purchase Price of such Eligible Mortgage Loans; however any such Eligible Mortgage Loan will retain the Purchase Price assigned to it when it became subject to a Transaction.

(vii) Notwithstanding any of the foregoing, if a Mortgagor shall resume payments on any Eligible Mortgage Loans held by the REO Subsidiary, the parties hereto agree that the REO Subsidiary shall immediately assign such Eligible Mortgage Loans to RMS and provide notice thereof to the Custodian and the Purchaser (in the case of the Purchaser, along with an updated Seller Mortgage Loan Schedule showing updated ownership of Eligible Mortgage Loans subject to a Transaction).


4.	CONFIRMATION

In the event that parties hereto desire to enter into a Transaction on terms other than as set forth in this Agreement, the parties shall execute a confirmation prior to entering into such Transaction, which confirmation shall be in a form that is mutually acceptable to Purchaser and applicable Seller and shall specify such terms, including, without limitation, the Purchase Date, the Purchase Price, the Pricing Rate therefor and the Repurchase Date (a “ Confirmation ”). Any such Confirmation and the related Transaction Notice, together with this Agreement, shall constitute conclusive evidence of the terms agreed to between Purchaser and applicable Seller with respect to the Transaction to which the Confirmation relates. In the event of any conflict between this Agreement and a Confirmation, the terms of the Confirmation shall control with respect to the related Transaction.


5.	[RESERVED]


6.	PAYMENT AND TRANSFER

Unless otherwise agreed by Seller and Purchaser, all transfers of funds hereunder shall be in Dollars in immediately available funds. Seller shall remit (or, if applicable, shall cause to be remitted) directly to Purchaser all payments required to be made by it to Purchaser hereunder or under any other Program Document in accordance with wire instructions provided by Purchaser. Any payments received by Purchaser after 4:00 p.m. (New York City time) shall be applied on the next succeeding Business Day.


7.	MARGIN MAINTENANCE

(a) Agent shall determine the Market Value of the Purchased Assets on a daily basis as determined by Agent in its sole discretion on exercising good faith.

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(b) If, as of any date of determination, the lesser of (a) 100% of the Principal Balance of all Purchased Assets then subject to all Transactions and (b) the aggregate Market Value of all related Purchased Assets subject to all Transactions, taking into account the cash then on deposit in the Collection Account, multiplied by the applicable Purchase Price Percentage is less than the Repurchase Price (excluding accrued Price Differential) for all such Transactions (a “ Margin Deficit ”), then Agent may, by notice to RMS (as such notice is more particularly set forth below, a “ Margin Call ”), require RMS to transfer to Purchaser or Purchaser’s designee cash or, at Purchaser’s option (and provided RMS has additional Eligible Mortgage Loans), additional Eligible Mortgage Loans to Purchaser (“ Additional Purchased Mortgage Loans ”) to cure the Margin Deficit; provided that Purchaser shall not provide notice of a Margin Call to RMS until the Margin Deficit equals or exceeds $500,000. If the Agent delivers a Margin Call to RMS on or prior to 11:00 a.m. (New York City time) on any Business Day, then RMS shall transfer cash or Additional Purchased Mortgage Loans to Purchaser or its designee no later than 5:00 p.m. (New York City time) on the same Business Day. In the event the Agent delivers a Margin Call to RMS after 11:00 a.m. (New York City time) on any Business Day, RMS shall be required to transfer cash or Additional Purchased Mortgage Loans no later than 12:00 noon (New York City time) on the next succeeding Business Day.

(c) Any cash transferred to Purchaser or its designee pursuant to Section 16(f)(ii)(B) herein shall reduce the Repurchase Price of the related Transactions.

(d) The failure of Purchaser, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions of this Agreement or limit the right of Purchaser to do so at a later date. Seller and Purchaser each agree that a failure or delay by Purchaser to exercise its rights hereunder shall not limit or waive Purchaser’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.

(e) For the avoidance of doubt, it is hereby understood and agreed that RMS shall be responsible for satisfying any Margin Deficit existing as a result of any reduction of the Principal Balance of any Purchased Asset pursuant to any action by any bankruptcy court.


8.	TAXES; TAX TREATMENT

(a) All payments made by Seller under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto imposed by any Governmental Authority therewith or thereon, excluding (A) taxes imposed on or measured by net income (however denominated), branch profits taxes or franchise taxes imposed by the United States or a state or a foreign jurisdiction under the laws of which Purchaser is organized, where Purchaser’s applicable lending office is located, or with respect to which Purchaser has a present or former connection (other than any connection arising from executing, delivering, being party to, engaging in any transaction pursuant to, performing its obligations under or enforcing any Program Document), or any political subdivision thereof or (B) taxes imposed under FATCA (collectively, such non-excluded taxes are hereinafter called “ Taxes ”), all of which shall be paid by Seller for its own account not later than the date when due. If Seller is required by law or regulation to deduct or withhold any Taxes from or in respect of any amount payable hereunder, it shall: (a) make such deduction or withholding, (b) pay the amount so deducted or withheld to the appropriate Governmental Authority not later than the date when due, (c) deliver to the Purchaser, promptly, original tax receipts and other evidence satisfactory to the Purchaser of the payment when due of the full amount of such Taxes; and (d) except as otherwise expressly provided in Section 8(d) below, pay to the Purchaser such additional amounts (including all Taxes imposed by any Governmental Authority on such additional amounts) as may be necessary so that the Purchaser receives,

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free and clear of all Taxes, a net amount equal to the amount it would have received under this Agreement, as if no such deduction or withholding had been made.

(b) In addition, Seller agrees to pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (including, without limitation, mortgage recording taxes, transfer taxes and similar fees) imposed by any taxing authority that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement except such taxes imposed with respect to an assignment as a result of a present or former connection between Purchaser and the jurisdiction imposing such taxes (other than connections arising from Purchaser having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Program Document, or sold or assigned any Purchased Asset or Program Document) (“ Other Taxes ”).

(c) Seller shall indemnify Purchaser for the full amount of Taxes (including additional amounts with respect thereto) and Other Taxes, and the full amount of Taxes of any kind imposed by any jurisdiction on amounts payable under this Section 8, and any liability (including penalties, interest and expenses arising thereon or with respect thereto) arising therefrom or with respect thereto, provided, that the Purchaser shall have provided Seller with evidence, reasonably satisfactory to the Seller, of payment of Taxes or Other Taxes, as the case may be.

(d) Any Purchaser that is either (i) not incorporated under the laws of the United States, any State thereof, or the District of Columbia or (ii) not otherwise treated as a “United States person” under the Code (a “ Foreign Purchaser ”) shall provide Seller and Agent with original properly completed and duly executed United States Internal Revenue Service (“ IRS ”) Forms W-8BEN-E or W-8ECI or any successor form prescribed by the IRS (or IRS Form W-8IMY, with IRS Form W-8BEN-E or W-8ECI attached), certifying that such Person is either (1) entitled to benefits under an income tax treaty to which the United States is a party which eliminates United States withholding tax under sections 1441 through 1442 of the Code on payments to it or (2) otherwise fully exempt from United States withholding tax under sections 1441 through 1442 of the Code on payments to it or certifying that the income receivable pursuant to this Agreement is effectively connected with the conduct of a trade or business in the United States in either case, on or prior to the date upon which each such Foreign Purchaser becomes a Purchaser. Each Foreign Purchaser will resubmit the appropriate form eliminating withholding tax on payments to it on the earliest of (A) the third anniversary of the prior submission, or (B) on or before the expiration of thirty (30) days after there is a “change in circumstances” with respect to such Person as defined in Treas. Reg. Section 1.1441-1(e)(4)(ii)(D). For any period with respect to which the Foreign Purchaser has failed to provide Seller and Agent with the appropriate form or other relevant document as expressly required under this Section 8(d) (unless such failure is due to a change in treaty, law, or regulation occurring subsequent to the date on which a form originally was required to be provided under the first sentence of this Section 8(d) or except to the extent that, pursuant to this Section 8, amounts payable with respect to such taxes were payable to Purchaser’s assignor immediately before Purchaser became a party hereto) such Person shall not be entitled to “gross-up” of Taxes under Section 8(a) or indemnification under Section 8(c) with respect to Taxes imposed by the United States which are imposed because of such failure; provided , however , that should a Foreign Purchaser, which is otherwise exempt from a withholding tax, become subject to Taxes because of its failure to deliver a form required hereunder, Seller shall, at no cost or expense to Seller, take such steps as such Foreign Purchaser shall reasonably request to assist such Foreign Purchaser to recover such Taxes. Upon the execution of this Agreement, each Purchaser that is a “United States person” within the meaning of the Code shall deliver to Seller a duly executed original of Internal Revenue Service Form W-9 or such other documentation or information prescribed by applicable laws or reasonably requested by Seller as will enable Seller to

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determine whether or not Purchaser is subject to backup withholding or information reporting requirements. Unless Seller has received such forms or other documents or information as required by this Section 8(d) to establish Purchaser’s exception from backup withholding tax, Seller shall not be required to pay additional sums or indemnify Purchaser for any backup amount withheld.

(e) If a payment made to Purchaser under this Agreement would be subject to United States federal withholding tax imposed by FATCA if Agent or Purchaser were to fail to comply with the applicable reporting requirements of FATCA (including those contained in section 1471(b) or 1472(b) of the Code, as applicable), Purchaser shall deliver to Seller at the time or times prescribed by law and at such time or times reasonably requested by Seller such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Seller as may be necessary for Seller to comply with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 8(e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(f) Without prejudice to the survival of any other agreement of the Seller hereunder, the agreements and obligations of the Seller contained in this Section 8 shall survive the termination of this Agreement. Nothing contained in this Section 8 shall require Purchaser to make available any of their tax returns or other information that they deem to be confidential or proprietary.

(g) Each party to this Agreement acknowledges that it is its intent solely for purposes of U.S. federal and relevant state and local income and franchise taxes to treat each Transaction as indebtedness of the Seller that is secured by the Purchased Items and Purchased Assets and that the Purchased Items and Purchased Assets are owned by Seller in the absence of an Event of Default by the Seller. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless otherwise required by law.


9.	SECURITY INTEREST; PURCHASER’S APPOINTMENT AS ATTORNEY-IN-FACT

(a) Seller and Purchaser intend that (other than for tax and accounting purposes) the Transactions hereunder be sales to Purchaser of the Purchased Assets and not loans from Purchaser to Seller secured by the Purchased Assets. However, in order to preserve Purchaser’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as other than sales, and as security for Seller’s performance of all of its Obligations, Seller hereby grants to Purchaser a first priority security interest in the Purchased Assets and Purchased Items. Seller acknowledges and agrees that its rights with respect to the Purchased Assets and Purchased Items are and shall continue to be at all times junior and subordinate to the rights of Purchaser hereunder.

(b) Seller hereby irrevocably constitutes and appoints Purchaser and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Purchaser’s discretion, to file such financing statement or statements relating to the Purchased Items or Purchased Assets as Purchaser at its option may deem appropriate, and if an Event of Default shall have occurred and be continuing, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be reasonably necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, Seller hereby gives Purchaser the power and right, on behalf of Seller, without assent by, but with notice to, Seller, to do the following if an Event of Default shall have occurred and be continuing and Purchaser has elected to exercise its remedies pursuant to Section 18 hereof:

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(i) in the name of Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any Purchased Items or Purchased Assets and to file any claim or to take any other action or initiate and maintain any appropriate proceeding in any appropriate court of law or equity or otherwise deemed appropriate by Purchaser for the purpose of collecting any and all such moneys due with respect to any Purchased Items or Purchased Assets whenever payable;

(ii) to pay or discharge taxes and Liens levied or placed on or threatened against the Purchased Items or Purchased Assets;

(iii) (A) to direct any party liable for any payment under any Purchased Items or Purchased Assets to make payment of any and all moneys due or to become due thereunder directly to Purchaser or as Purchaser shall direct, (B) in the name of Seller, or in its own name, or otherwise as appropriate, to directly send or cause the applicable servicer to send “hello” letters, “goodbye” letters in the form of Exhibit D , and Section 404 Notices; (C) to ask or demand for, collect, receive payment of and receipt for any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Purchased Items or Purchased Assets; (D) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Purchased Items or Purchased Assets; (E) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Purchased Items or Purchased Assets or any proceeds thereof and to enforce any other right in respect of any Purchased Items or Purchased Assets; (F) to defend any suit, action or proceeding brought against Seller with respect to any Purchased Items or Purchased Assets; (G) to settle, compromise or adjust any suit, action or proceeding described in clause (F) above and, in connection therewith, to give such discharges or releases as Purchaser may deem appropriate; and (H) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Purchased Items or Purchased Assets as fully and completely as though Purchaser were the absolute owner thereof for all purposes, and to do, at Purchaser’s option and Seller’s expense, at any time, and from time to time, all acts and things that Purchaser deems necessary to protect, preserve or realize upon the Purchased Items or Purchased Assets and Purchaser’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do.

Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.

Seller also authorizes Purchaser, from time to time if an Event of Default shall have occurred and be continuing, to execute any endorsements, assignments or other instruments of conveyance or transfer with respect to the Purchased Assets in connection with any sale provided for in Section 18 hereof.

The powers conferred on Purchaser hereunder are solely to protect Purchaser’s interests in the Purchased Items and Purchased Assets and shall not impose any duty upon it to exercise any such powers. Purchaser shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither Purchaser nor any of its officers, directors, employees or agents shall be responsible to Seller for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

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(c) Voting Rights. Subject to this Section, after the occurrence of an Event of Default that has not been waived or cured, Purchaser, as the holder of the Membership Certificate, shall exercise all voting and member rights with respect to the REO Subsidiary membership interests. Prior to the occurrence of an Event of Default that has not been waived or cured, RMS shall exercise all voting rights with respect to the REO Subsidiary membership interests.

(d) Delivery of Access Termination Notice. Purchaser hereby acknowledges and agrees that, with respect to the Collection Account, it shall not deliver an Access Termination Notice (as defined in the Collection Account Control Agreement) unless an Event of Default has occurred.


10.	CONDITIONS PRECEDENT

(a) As conditions precedent to the effectiveness of this Agreement, Purchaser shall have received (or waived in writing) on or before the Effective Date (except as otherwise noted below) each of the following, in form and substance satisfactory to Purchaser and duly executed by each party thereto (as applicable):

(iv) Each of the Program Documents duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver;

(v) Certificates of an officer of each of RMS, REO Subsidiary and Guarantor attaching certified copies of RMS’s, REO Subsidiary’s and Guarantor’s respective consents or charter, bylaws and corporate resolutions, as applicable, approving the Program Documents and Transactions thereunder (either specifically or by general resolution), and all documents evidencing other necessary corporate action or governmental approvals as may be required in connection with the Program Documents;

(vi) A certified copy of a good standing certificate from the jurisdiction of organization of each of RMS, REO Subsidiary and Guarantor, dated as of no earlier than the date which is ten (10) Business Days prior to the Purchase Date with respect to the initial Transaction hereunder;

(vii) An incumbency certificate of the secretary of each of RMS, REO Subsidiary and Guarantor certifying the names, true signatures and titles of RMS’s, REO Subsidiary’s and Guarantor’s representatives who are, if applicable, duly authorized to request Transactions hereunder and to execute the Program Documents and the other documents to be delivered thereunder;

(viii) An opinion of RMS’s counsel (including RMS’s in-house counsel) as to such matters as Purchaser or Agent may reasonably request (including, without limitation, with respect to Purchaser’s first priority lien on and perfected security interest in the Purchased Assets and Purchased Items, a no material litigation, non-contravention, enforceability and corporate opinion with respect to RMS and REO Subsidiary, an opinion with respect to the inapplicability of the Investment Company Act to RMS, the REO Subsidiary and Guarantor, an opinion that this Agreement constitutes a “repurchase agreement” and a “securities contract” within the meaning of the Bankruptcy Code and an opinion that no Transaction constitutes an avoidable transfer under Section 546(f) of the Bankruptcy Code, each in form and substance acceptable to Purchaser and Agent); provided, that RMS’s in-house counsel shall be permitted to provide only the no material litigation, noncontravention and corporate opinions;

(ix) RMS shall have paid to Purchaser and Purchaser shall have received all accrued and unpaid fees and expenses owed to Purchaser in accordance with the Program Documents, including without limitation, the Initial Fee and any Transaction Fees then due and owing pursuant

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to Section 2 of the Pricing Side Letter, and any fees due and owing to the Verification Agent, in each case, in immediately available funds, and without deduction, set-off or counterclaim;

(x) A copy of the insurance policies required by Section 14(q) of this Agreement;

(xi) Evidence that all other actions necessary to perfect and protect Purchaser’s interest in the Purchased Assets and Purchased Items have been taken, including, without limitation, the establishment of the Collection Account, and duly completed and filed Uniform Commercial Code financing statements acceptable to Purchaser and covering the Purchased Items and Purchased Assets on Form UCC1;

(xii) Purchaser and/or Agent shall have completed the initial due diligence review pursuant to Section 36 , and such review shall be satisfactory to Purchaser and Agent in their sole discretion;

(xiii) Reserved.

(xiv) Any other documents reasonably requested by Purchaser or Agent.

(b) As conditions precedent to each Transaction (including the initial Transaction), each of the following conditions shall have been satisfied (or waived in writing):

(i) Purchaser or Purchaser’s designee shall have received (or waived by writing receipt) on or before the Purchase Date with respect to Eligible Assets that are to be the subject of such Transaction (unless otherwise specified in this Agreement) the following, in form and substance satisfactory to Purchaser and (if applicable) duly executed:


(A)	Seller shall have paid to Purchaser and Purchaser shall have received all accrued and unpaid fees and expenses owed to Purchaser in accordance with the Program Documents in immediately available funds, and without deduction, set-off or counterclaim;


(B)	The Transaction Notice and Seller Mortgage Loan Schedule with respect to such Purchased Assets, delivered pursuant to Section 3(c) ;

(C)

Such certificates, customary opinions of counsel or other documents as Purchaser or Agent may reasonably request, provided that such opinions of counsel shall not be required routinely in connection with each Transaction but shall only be required from time to time as deemed necessary by Purchaser in its commercially reasonable judgment; provided further that Seller may provide such opinions of counsel or other documents to Purchaser within ten (10) Business Days following such Purchase Date;


(D)	Seller shall have paid to Purchaser and Purchaser shall have received the Transaction Fees in respect of such Transaction then due and owing pursuant to Section 2 of the Pricing Side Letter, in immediately available funds, and without deduction, set-off or counterclaim;


(E)	(x) With respect to an Eligible Asset that is an Eligible Mortgage Loan, an original Trust Receipt executed by the Custodian without exceptions; and

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(y) with respect to an Eligible Asset that is the REO Asset, a Custodian Loan Transmission (as defined in the Custodial Agreement) from the Custodian identifying that the Custodian has received an electronic copy of the REO Deeds relating to the REO Properties transferred to or obtained by the REO Subsidiary;


(F)	[reserved];


(G)	[reserved];


(H)	[reserved];

(I)

A duly executed Warehouse Lender’s Release from any Warehouse Lender (including any party that has a precautionary security interest in a Mortgage Loan) having a security interest in any Mortgage Loans, substantially in the form of Exhibit E , addressed to Purchaser and Agent, releasing any and all of its right, title and interest in, to and under such Mortgage Loan (including, without limitation, any security interest that such secured party or secured party’s agent may have by virtue of its possession, custody or control thereof) and, to the extent applicable, has filed Uniform Commercial Code termination statements in respect of any Uniform Commercial Code filings made in respect of such Mortgage Loan, and each such Warehouse Lender’s Release and Uniform Commercial Code termination statement has been delivered to Purchaser and Agent prior to such Transaction and to the Custodian as part of the Mortgage File;

(J)

Purchaser shall have received the Non-Utilization Fee or Stable Balance Fee, as applicable, then due and owing pursuant to Section 2 of the Pricing Side Letter in immediately available funds, and without deduction, set-off or counterclaim; provided that Purchaser may, in its sole discretion, net any unpaid Non-Utilization Fee or Stable Balance Fee, as applicable, from the proceeds of any Purchase Price paid by Purchaser to a Seller; and


(K)	evidence that such Mortgage Loan is fully insured by FHA.

(ii) No Default or Event of Default shall have occurred and be continuing;

(iii) Purchaser shall not have determined that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any requirement of law applicable to Purchaser has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Purchaser to enter into Transactions with the applicable Pricing Rate;

(iv) Both immediately prior to the related Transaction and also after giving effect thereto and to the intended use thereof, all representations and warranties in the Program Documents shall be true and correct on the date of such Transaction (with the same force and effect as if made on such date) and Seller is in compliance with the terms and conditions of the Program Documents, other than as may be expressly waived by Purchaser;

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(v) The then Aggregate MRA Purchase Price when added to the Purchase Price for the requested Transaction, shall not exceed, as of any date of determination, the Maximum Aggregate Purchase Price;

(vi) The Purchase Price for the requested Transaction shall not be less than $1,000,000 unless otherwise agreed;

(vii) Satisfaction of any conditions precedent to the initial Transaction as set forth in clause (a) of this Section 10 that were not satisfied prior to such initial Purchase Date;

(viii) Purchaser shall have determined that all actions necessary to maintain Purchaser’s perfected security interest in the Purchased Assets and Purchased Items have been taken;

(ix) Purchaser or its designee shall have received any other documents reasonably requested by Purchaser;

(x) There is no Margin Deficit at the time immediately prior to entering into a new Transaction (other than a Margin Deficit that will be cured contemporaneous with such Transaction in accordance with the provisions of Section 7 hereof);

(xi) To the Seller’s and the Purchaser’s knowledge, the FHA continues to hold permanent indefinite authority to obtain funds directly from the United States Treasury without additional congressional approval;

(xii) None of the following shall have occurred and/or be continuing (it being understood that Purchaser will make the following determinations consistent with those made with respect to similar borrowers or sellers under similar credit or repurchase agreements):

(A)

an event or events shall have occurred in the good faith determination of Purchaser resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in Purchaser not being able to finance Eligible Assets through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or


(B)	an event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by mortgage loans or an event or events shall have occurred resulting in Purchaser not being able to sell securities backed by mortgage loans at prices which would have been reasonable prior to such event or events; or


(C)	there shall have occurred a material adverse change in the financial condition of Purchaser which affects (or can reasonably be expected to affect) materially and adversely the ability of Purchaser to fund its obligations under this Agreement.

(xiii) If the Verification Agent is terminated by the Agent, or resigns, the selection and approval by the Agent of a successor Verification Agent (such approval not to be unreasonably

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withheld or delayed) and the assumption of the Verification Agent’s duties by such successor verification agent shall have become effective within forty-five (45) days of such termination or resignation.

(xiv) Notwithstanding anything to the contrary herein, any Mortgage Loan for which the related Mortgaged Property is located in the state of Illinois (an “ Illinois Mortgage Loan ”) is not an Eligible Mortgage Loan until such time that RMS (i) is in good standing and properly licensed to originate and service Mortgage Loans in Illinois and will perform such functions with respect to the applicable Mortgage Loans and (ii) has provided Purchaser a legal opinion, satisfactory to the Purchaser in its sole discretion, stating that the requirements in clause (i) of this paragraph have been fulfilled.


11.	RELEASE OF PURCHASED ASSETS

Upon timely payment in full of the Repurchase Price and all other Obligations (if any) then owing with respect to a Purchased Asset or REO Property pursuant to Section 3(f) hereof, unless a Margin Deficit or a Default shall have occurred and be continuing: (a) Purchaser shall be deemed to have terminated any security interest that Purchaser may have in such Purchased Asset and Purchased Item or, in the case of the REO Asset, the REO Property subject to repurchase, (b) all of the Purchaser’s right, title and interest in such Purchased Asset or, in the case of the REO Asset, the REO Property subject to repurchase, shall automatically transfer to RMS, and (c) with respect to such Purchased Asset, the Purchaser shall or shall direct Custodian to release such Purchased Asset to Seller. Except as set forth in Sections 15 and 16(f)(ii), Seller shall give at least two (2) Business Days’ prior written notice to the Purchaser if such repurchase shall occur on any date other than the Repurchase Date. In the case of the REO Asset, Purchaser shall assign the REO Asset to RMS upon a repurchase of the REO Asset.

If such a Margin Deficit is applicable, Purchaser shall notify Seller of the amount thereof and Seller may thereupon satisfy the Margin Call in the manner specified in Section 7 .


12.	RELIANCE

With respect to any Transaction, Purchaser may conclusively rely upon, and shall incur no liability to Seller in acting upon, any request or other communication that Purchaser reasonably believes to have been given or made by a person authorized to enter into a Transaction on Seller’s behalf.


13.	REPRESENTATIONS AND WARRANTIES

Each Seller hereby represents and warrants to Purchaser and Agent, and shall on and as of the Purchase Date for any Transaction and on and as of each date thereafter through and including the related Repurchase Date be deemed to represent and warrant to Purchaser and Agent that:

(a) Due Organization, Qualification, Power, Authority and Due Authorization . (w) It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (x) it has qualified to do business in each jurisdiction in which it is legally required to do so, (y) it has the power and authority under its certificate of incorporation, bylaws (or, in the

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case of the REO Subsidiary, its certificate of formation and the LLC Agreement) and applicable law to enter into this Agreement and the Program Documents and to perform all acts contemplated hereby and thereby or in connection herewith and therewith and (z) this Agreement and the Program Documents and the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and do not require any additional approvals or consents or other action by, or any notice to or filing with, any Person other than any that have heretofore been obtained, given or made.

(a) Noncontravention . The consummation of the transactions contemplated by this Agreement and Program Documents are in the ordinary course of business of Seller and will not conflict with, result in the breach of or violate any provision of the charter, by-laws, certification of formation or limited liability company agreement (as applicable) of RMS or REO Subsidiary or result in the breach of any provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under, any agreement, indenture, loan or credit agreement or other instrument to which RMS or REO Subsidiary, the Purchased Assets or any of RMS’s or REO Subsidiary’s Property is or may be subject to, or result in the violation of any law, rule, regulation, order, judgment or decree to which RMS or REO Subsidiary, the Purchased Assets or Seller’s or REO Subsidiary’s Property is subject. Without limiting the generality of the foregoing, the consummation of the Transactions will not violate any policy, regulation or guideline of the FHA or result in the voiding or reduction of the FHA insurance in respect of any Mortgage Loan or REO Property, and such FHA insurance is in full force and effect or shall be in full force and effect as required by the Agency Guide.

(b) Legal Proceeding . There is no action, suit, proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body pending or, to Seller’s knowledge, threatened against or affecting RMS or REO Subsidiary (or, to Seller’s knowledge, any basis therefor) wherein an unfavorable decision, ruling or finding would adversely affect the validity or enforceability of this Agreement, the Program Documents or any agreement or instrument to which RMS or REO Subsidiary is a party and which is used or contemplated for use in the consummation of the transactions contemplated hereby, would adversely affect the proceedings of RMS or REO Subsidiary in connection herewith or would or could materially and adversely affect RMS’s or REO Subsidiary’s ability to carry out its obligations hereunder.

(c) Valid and Binding Obligations . This Agreement, the Program Documents and every other document to be executed by Seller in connection with this Agreement is and will be legal, valid, binding and subsisting obligations of Seller, enforceable in accordance with their respective terms, except that (A) the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (B) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(d) Financial Statements . The financial statements of RMS, copies of which have been furnished to Purchaser and Agent, (i) are, as of the dates and for the periods referred to therein, complete and correct in all material respects, (ii) present fairly the financial condition and results of operations of RMS as of the dates and for the periods indicated and (iii) have been prepared in accordance with GAAP consistently applied, except as noted therein (subject as to interim statements to normal year‑end adjustments). Since the date of the most recent financial statements, there has been no Material Adverse Change with respect to RMS. Except as disclosed in such financial statements or pursuant to Section 14(i) hereof, RMS is not subject to any contingent liabilities or commitments that, individually or in the aggregate, have a material possibility of causing a Material Adverse Change with respect to Seller.

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(e) Accuracy of Information . Neither this Agreement nor any representations and warranties or information relating to Seller that Seller has delivered or caused to be delivered to Purchaser or Agent, including, but not limited to, all documents related to this Agreement, the Program Documents or Seller’s financial statements (when taken as a whole), contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made therein or herein in light of the circumstances under which they were made, not misleading. Since the furnishing of such documents or information, there has been no change, nor any development or event involving a prospective change that would render any of such documents or information untrue or misleading in any material respect.

(f) No Consents . No consent, license, approval or authorization from, or registration, filing or declaration with, any regulatory body, administrative agency or other governmental instrumentality, nor any consent, approval, waiver or notification of any creditor, lessor or other non‑governmental Person, is required in connection with the execution, delivery and performance by Seller of this Agreement or any other Program Document, other than any that have heretofore been obtained, given or made.

(g) Compliance With Law, Etc. No practice, procedure or policy employed or proposed to be employed by RMS or REO Subsidiary in the conduct of its businesses violates any law, regulation, judgment, agreement, regulatory consent, order or decree applicable to it which, if enforced, would result in a Material Adverse Effect.

(h) Solvency . Seller is solvent and will not be rendered insolvent by any Transaction and, after giving effect to each such Transaction, Seller will not be left with an unreasonably small amount of capital with which to engage in its business. Seller does not intend to incur, nor believes that it has incurred, debts beyond its ability to pay such debts as they mature. Seller is not contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of Seller or any of its assets.

(i) Fraudulent Conveyance . The amount of consideration being received by Seller in respect of each Transaction, taken as a whole, constitutes reasonably equivalent value and fair consideration for the related Purchased Assets. Seller is not transferring any Purchased Assets with any intent to hinder, delay or defraud any of its creditors. The Agreement and the Program Documents, any other document contemplated hereby or thereby and each transaction have not been entered into fraudulently by Seller hereunder, or with the intent to hinder, delay or defraud any creditor or Purchaser.

(j) Investment Company Act Compliance . Neither RMS nor any of its Subsidiaries (including the REO Subsidiary) is required to be registered as an “investment company” as defined under the Investment Company Act or is an entity “controlled by” an entity required to be registered as an “investment company” as defined under the Investment Company Act. REO Subsidiary (i) is not required to register under the Investment Company Act based upon the exemption provided by Section 3(c)(5)(C) of the Investment Company Act (although other exemptions or exclusions may be applicable), and (ii) is not a “covered fund” within the meaning of the final regulations issued December 10, 2013, implementing Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, commonly known as the “Volcker Rule”.

(k) Taxes . Each of RMS and REO Subsidiary has timely filed all federal and state tax returns that are required to be filed by it and has paid all taxes, including any assessments received by it, to the extent that such taxes have become due (other than for taxes that are being contested in good faith and for which it has established adequate reserves). Any taxes, fees and other governmental charges payable by Seller in connection with a Transaction and the execution and delivery of the Program Documents have been paid.

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(l) Additional Representations . With respect to each Eligible Mortgage Loan to be sold hereunder by Seller to Purchaser, Seller hereby makes all of the applicable representations and warranties set forth in Exhibit B as of the date the related Mortgage File is delivered to Purchaser or the Custodian with respect to the Eligible Mortgage Loans and continuously while such Eligible Mortgage Loan is subject to a Transaction. Further, as of each Purchase Date, Seller shall be deemed to have represented and warranted in like manner that Seller has no knowledge that any such representation or warranty may have ceased to be true in a material respect as of such date, except as otherwise stated in a Transaction Notice, any such exception to identify the applicable representation or warranty and specify in reasonable detail the related knowledge of Seller.

(m) No Broker . Seller has not dealt with any broker, investment banker, agent, or other person, except for Purchaser, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement; provided , that if Seller has dealt with any broker, investment banker, agent, or other person, except for Purchaser, who may be entitled to any commission or compensation in connection with the sale of Purchased Assets pursuant to this Agreement, such commission or compensation shall have been paid in full by Seller.

(n) Good Title . Seller has not sold, assigned, transferred, pledged or hypothecated any interest in the REO Asset or any individual Mortgage Loan or REO Property subject to a Transaction to any person other than any sale, assignment, transfer, pledge or hypothecation that is released in conjunction with the sale to Purchaser or REO Subsidiary hereunder, and upon delivery of a Purchased Asset to Purchaser, Purchaser will be the sole owner thereof (other than for tax and accounting purposes), free and clear of any lien, claim or encumbrance other than those arising under this Agreement.

(o) Approvals . RMS has all requisite Approvals and RMS shall have provided evidence, satisfactory to Purchaser and Agent, that RMS’s Approvals are in good standing.

(p) [RESERVED] .

(q) No Adverse Actions . RMS has not received from the Agency a notice of extinguishment or a notice indicating material breach, default or material non-compliance which the Agent reasonably determines may entitle the Agency to terminate, suspend, sanction or levy penalties against the RMS, or a notice from the Agency, HUD or FHA indicating any adverse fact or circumstance in respect of RMS which the Agent reasonably determines may entitle the Agency, HUD or FHA, as the case may be, to revoke any Approval or otherwise terminate, suspend RMS as an Agency approved issuer or servicer, or with respect to which such adverse fact or circumstance has caused any of the Agency, HUD or FHA, as the case may be, to terminate RMS, without any subsequent rescission thereof in such notice.

(r) Affiliated Parties . Seller is not an Affiliate of the Custodian or any other party to a Program Document hereunder other than the Guarantor and the other Seller.

(s) REO Subsidiary . The Membership Certificate represents 100% of the beneficial ownership of the REO Subsidiary, and the REO Subsidiary continues to hold legal title to all REO Property related to foreclosures of HECM Buyout Loans that are subject to a Transaction.

The representations and warranties set forth in this Agreement shall survive transfer of the Purchased Assets to Purchaser and shall continue for so long as the Purchased Assets are subject to this Agreement.

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14.	COVENANTS OF SELLER

Each Seller hereby covenants and agrees with Purchaser and Agent as follows as to itself:

(a) Defense of Title . Seller warrants and will defend the right, title and interest of Purchaser in and to all Purchased Assets against all adverse claims and demands.

(b) No Amendment or Compromise . Other than as contemplated by the Program Documents, none of Seller or those acting on Seller’s behalf shall amend, modify, or waive any term or condition of, or settle or compromise any claim in respect of, any item of the Purchased Assets (other than any curtailments imposed by HUD), any related rights or any of the Program Documents without the prior written consent of Purchaser and Agent, unless such amendment or modification does not (i) affect the amount or timing of any payment of principal or interest payable with respect to a Purchased Asset, extend its scheduled maturity date, modify its interest rate, or constitute a cancellation or discharge of its outstanding principal balance or (ii) materially and adversely affect the security afforded by the real property, furnishings, fixtures, or equipment securing the Purchased Asset. Notwithstanding the foregoing, the Seller may amend, modify or waive any term or condition of the individual Mortgage Loans in accordance with Accepted Servicing Practices and the Agency Guide; provided , that Seller shall promptly notify Purchaser and Agent of any amendment, modification or waiver that causes any Mortgage Loan to cease to be an Eligible Mortgage Loan.

(c) No Assignment; No Liens . Seller shall not sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in, or Lien on or otherwise encumber (except pursuant to the Program Documents) any of the Purchased Assets or Purchased Items or any interest therein, provided that this Section 14(c) shall not prevent any contribution, sale, assignment, transfer or conveyance of Purchased Assets in accordance with the Program Documents.

Seller shall not sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or grant, create, incur, assume or permit to exist any Lien with respect to any of the Purchased Assets, the Mortgage Notes or any Property related thereto, including but not limited to the related Mortgages securing such Mortgage Notes and the proceeds of the Mortgage Notes, unless such Liens are the subject of an intercreditor agreement in form and substance satisfactory to the Agent, other than: (A) assignments to, and Liens granted to, Purchaser herein or under the Program Documents; (B) Liens in connection with deposits or pledges to secure payment of worker’s compensation, unemployment insurance, old age pensions or other social security obligations, in the ordinary course of business of the seller or any subsidiary; (C) liens for taxes, fees, assessments, and governmental charges not delinquent or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with GAAP; (D) encumbrances consisting of zoning regulations, easements, rights of way, survey exceptions and other similar restrictions on the use of real property and minor irregularities in title thereto which do not materially impair their use in operation of its business; (E) Liens in connection with hedging arrangements and (F) any other Lien approved by Agent in its sole discretion.

(d) No Economic Interest . Neither Seller nor any affiliate thereof will acquire any economic interest in or obligation with respect to any Purchased Asset that is a Mortgage Loan except for record title to the Mortgage relating to such Purchased Asset and the right and obligation to repurchase the Mortgage Loan hereunder.

(e) Preservation of Purchased Assets . Seller shall take all actions necessary or, in the opinion of Purchaser, desirable, to preserve the Purchased Assets and Purchased Items so that they remain subject

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to a first priority perfected security interest hereunder and deliver evidence that such actions have been taken, including, without limitation, duly completed and filed Uniform Commercial Code financing statements on Form UCC1. Without limiting the foregoing, Seller will comply with all applicable laws, rules, regulations and other laws of any Governmental Authority applicable to Seller relating to the Purchased Items and Purchased Assets and cause the Purchased Items and Purchased Assets to comply with all applicable laws, rules, regulations and other laws of any such Governmental Authority. Seller will not allow any default to occur for which Seller is responsible under any Purchased Items, Purchased Assets or any Program Documents and Seller shall fully perform or cause to be performed when due all of its obligations under any Purchased Items or Purchased Assets or the Program Documents.

(f) Maintenance of Papers, Records and Files .

(i) Seller shall maintain all Records relating to the Purchased Assets not in the possession of Custodian or released in accordance with the Custodial Agreement in good and complete condition in accordance with industry practices and preserve them against loss. Seller shall collect and maintain or cause to be collected and maintained all such Records in accordance with industry custom and practice, and all such Records shall be in Purchaser’s or Custodian’s possession unless Purchaser otherwise approves in writing. Seller will not cause or authorize any such papers, records or files that are an original or an only copy to leave Custodian’s possession, except for individual items removed in connection with servicing a specific Mortgage Loan, in which event Seller will obtain or cause to be obtained a receipt from the Custodian for any such paper, record or file, or as otherwise permitted under the Custodial Agreement.

(ii) For so long as Purchaser has an interest in or Lien on any Purchased Asset, Seller will hold or cause to be held all related Records for the sole benefit of Purchaser.

(iii) Upon reasonable advance notice from Custodian, Agent or Purchaser, Seller shall (x) make any and all such Records available to Custodian or Agent for examination, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, (y) permit Agent or its authorized agents to discuss the affairs, finances and accounts of Seller with its independent certified public accounts; provided, however, Seller shall be permitted to participate in such discussions with its chief operating officer and chief financial officer and to discuss the affairs, finances and accounts of Seller with its independent certified public accountants.

(g) Financial Statements and Other Information; Financial Covenants .

(i) Seller shall keep or cause to be kept in reasonable detail books and records setting forth an account of its assets and business and, as applicable, shall clearly reflect therein the transfer of Purchased Assets to Purchaser. Seller or Guarantor, as applicable, shall furnish or cause to be furnished to Purchaser and Agent the following:


(A)	Financial Statements .

(1) As soon as is practicable, but in any event within ninety (90) days after the end of each fiscal year of RMS, the consolidated audited balance sheets of each of RMS and Guarantor and their respective consolidated Subsidiaries, which will be in conformity with GAAP, and the related consolidated audited statements of comprehensive income and changes in stockholders’ equity showing the financial condition of RMS and Guarantor and their respective consolidated Subsidiaries as of the close of such fiscal year and the results of operations during such year, and consolidated audited statements of cash

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flows, as of the close of such fiscal year, setting forth, in each case, in comparative form the corresponding figures for the preceding year. The foregoing consolidated financial statements are to be reported on by, and to carry the unqualified report (acceptable in form and content to Purchaser and Agent) of, an independent public accountant of national standing acceptable to Purchaser and Agent and are to be accompanied by a letter of management in form and substance acceptable to Purchaser and Agent;

(2) As soon as is practicable, but in any event within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of RMS and Guarantor, consolidated unaudited balance sheets and consolidated statements of comprehensive income and changes in stockholders’ equity and unaudited statement of cash flows, all to be in a form acceptable to Purchaser and Agent, showing the financial condition and results of operations of RMS and Guarantor and their respective consolidated Subsidiaries, each on a consolidated basis as of the end of each such quarter and for the then elapsed portion of the fiscal year, setting forth, in each case, in comparative form the corresponding figures for the corresponding periods of the preceding fiscal year (or in the case of the balance sheet, as of the end of the previous fiscal year, and in the case of the statement of stockholders’ equity, no comparative disclosure), certified by a financial officer of RMS or Guarantor (acceptable to Purchaser and Agent), as applicable, as presenting fairly the financial position and results of operations of RMS and Guarantor and their respective consolidated Subsidiaries and as having been prepared in accordance with GAAP consistently applied, in each case, subject to normal year-end audit adjustments;

(3) As soon as is practicable, but in any event within forty-five (45) days after the end of each of the first two months of a fiscal quarter, consolidated unaudited balance sheets and consolidated statements of comprehensive income, all to be in a form acceptable to Purchaser and Agent, showing the financial condition and results of operations of RMS and its consolidated Subsidiaries on a consolidated basis as of the end of each such month and for the then elapsed portion of the fiscal year, certified by a financial officer of RMS (acceptable to Purchaser and Agent) as presenting fairly the financial position and results of operations of RMS and its consolidated Subsidiaries and as having been prepared in accordance with GAAP consistently applied, in each case, subject to normal year-end audit adjustments;

(4) [RESERVED];

(5) Promptly upon becoming available, copies of all financial statements, reports, notices and proxy statements sent by RMS or Guarantor or their respective consolidated Subsidiaries in a general mailing to their respective stockholders and of all reports and other material (including copies of all registration statements under the Securities Act of 1933, as amended) filed by any of them with any securities exchange or with the SEC or any governmental authority succeeding to any or all of the functions of the SEC; provided, however, that this clause (5) is deemed to be satisfied by RMS arranging for Purchaser to receive automatic email notifications from Guarantor with respect to such items;

(6) Promptly upon becoming available, copies of any press releases issued by RMS and copies of any annual and quarterly financial reports that RMS or Guarantor may be required to file with the SEC or any federal banking agency, or any report

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which RMS may be required to file with the SEC or any federal banking agency containing such financial statements, and other information concerning RMS’s or Guarantor’s business and affairs as is required to be included in such reports in accordance with the rules and regulations of the SEC or such federal banking agency as may be promulgated from time to time; provided, however, that this clause (6) is deemed to be satisfied by RMS arranging for Purchaser to receive automatic email notifications from Guarantor with respect to such items; and

(7) Such supplements to the aforementioned documents and such other information regarding the operations, business, affairs and financial condition of the Seller or Guarantor or their respective consolidated Subsidiaries as Purchaser may reasonably request.


(B)	[RESERVED].


(C)	Other Information . Upon the request of Purchaser or Agent, such other information or reports as Purchaser or Agent may from time to time reasonably request.

(ii) RMS, on a consolidated basis, shall comply with the following financial covenants:


(A)	RMS shall maintain a Tangible Net Worth of not less than $100,000,000.


(B)	At all times RMS shall have unrestricted cash and Cash Equivalents in an amount of not less than $20,000,000.


(C)	At no time shall the ratio of RMS’s Indebtedness (excluding non-recourse Indebtedness or any home equity conversion mortgage-backed security obligations) to Tangible Net Worth exceed 8:1.


(D)	As of each fiscal quarter end, the Adjusted EBITDA, for the prior two consecutive fiscal quarters shall be greater than $1.00; provided , however , notwithstanding anything herein, any breach of this clause (D) shall not be considered an Event of Default, but each will result in a reduction in each Purchase Price Percentage of two (2) percentage points.

(iii) Certifications . Seller shall execute and deliver a certification substantially in the form of Exhibit A attached hereto (i) within forty-five (45) days after the end of each of the first two calendar months of each fiscal quarter of RMS, (ii) within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of RMS and (iii) within ninety (90) days after the end of each fiscal year of RMS.

(h) Agency Reporting . RMS shall comply with the applicable reporting requirements of the Agency Guide and HUD.

(i) Notice of Material Events . Seller shall promptly inform Purchaser and Agent in writing of any of the following:

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(i) any Default, Event of Default by Seller or any other Person (other than Purchaser or Purchaser’s Affiliates) of any material obligation under any Program Document, or the occurrence or existence of any event or circumstance that Seller reasonably expects will with the passage of time become a Default, Event of Default by Seller or any other Person;

(ii) any material reduction in the insurance coverage of RMS as required to be maintained pursuant to Section 14(q) hereof, or any other Person pursuant to any Program Document, with copy of evidence of same attached;

(iii) the commencement of, or any determination in, any litigation, investigation, proceeding, sanctions or suspension between Seller or Guarantor, on the one hand, and any Governmental Authority (or any other Person, but only with respect to material litigation), on the other which, in any case, could reasonably be expected to have a Material Adverse Effect with respect to the Seller;

(iv) any change in accounting policies or financial reporting practices of Seller which could reasonably be expected to have a Material Adverse Effect;

(v) any event, circumstance or condition that has resulted, or has a reasonable likelihood of resulting in either a Material Adverse Change or a Material Adverse Effect with respect to Seller;

(vi) [RESERVED];

(vii) [RESERVED];

(viii) upon Seller becoming aware of any penalties, sanctions or charges levied, or threatened to be levied (which in the case of any penalties, sanctions or charges of a monetary nature, the amount of any such penalty, sanction or charge is material), against Seller or any change or threatened change in Approval status, or the commencement of any non-routine audit, investigation, or the institution of any action or the threat of institution of any action against Seller by any Agency, or any supervisory or regulatory Governmental Authority (including, but not limited to HUD and FHA) supervising or regulating the origination or servicing of mortgage loans by, or the issuer status of, Seller, notice of which is permited to be given by Seller under applicable law, rule or regulation;

(ix) any Change in Control of Seller, or any sale of all or substantially all of Seller’s Property (other than the sale of Mortgage Loans, REO Properties or Servicing Rights, in whole or in part, in the ordinary course of Seller’s business, a securitization transaction or any other transaction permitted under the Program Documents), provided that such notice may be given in accordance with the period of time indicated in Section 14(p); or

(x) upon Seller becoming aware of any termination or threatened termination by the Agency of the Custodian as an eligible custodian.

(j) Maintenance of Approvals . RMS shall take all necessary actions to maintain its Approvals (including any obtained after the date of this Agreement) at all times during the term of this Agreement. If, for any reason, RMS ceases to maintain any such Approval, RMS shall so notify Purchaser and Agent immediately.

(k) Maintenance of Licenses . Seller shall (i) maintain (or cause the Nominee to maintain, as applicable) all licenses, permits or other approvals necessary for Seller to conduct its business and to perform

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its obligations under the Program Documents, (ii) remain in good standing in each jurisdiction in which it is legally required to qualify to do business, (iii) comply in all material respects with all laws of each state in which it conducts business or any Mortgaged Property is located, and (iv) conduct its business strictly in accordance with applicable law.

(l) Taxes, Etc . Seller shall pay and discharge or cause to be paid and discharged, when due all taxes, assessments and governmental charges or levies imposed upon it or upon its income and profits or upon any of its Property, real, personal or mixed (including without limitation, the Purchased Assets) or upon any part thereof, as well as any other lawful claims which, if unpaid, might become a Lien upon such properties or any part thereof, except for any such taxes, assessments and governmental charges, levies or claims as are appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are provided. Seller shall file on a timely basis all federal, and state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it.

(m) Nature of Business . Seller shall not make any material change in the nature of its business as carried on at the date hereof.

(n) UCC3 Financing Statements . Seller shall take all actions necessary to maintain Purchaser’s first priority perfected security interest in the Purchased Assets, including, without limitation, (x) the due filing of Uniform Commercial Code financing statements on Form UCC3, in form and substance satisfactory to the Purchaser (the “ UCC3 Financing Statements ”) on or before October 28, 2015 with respect to (i) a UCC1, initial financing statement file number 2012 4577468 (as amended by UCC3 financing statement number 2014 4472254), filed by Credit Suisse AG on November 28, 2012 and (ii) a UCC1, initial financing statement file number 2014 3592995, filed by Community Trust Bank on September 9, 2014 and (y) providing to Purchaser evidence of the filed UCC3 Financing Statements within thirty (30) days of the Effective Date.

(o) Use of Custodian . Without the prior written consent of Purchaser, Seller shall use no third party custodian as document custodian other than the Custodian for the Mortgage File relating to the Mortgage Loans.

(p) Merger of Seller . Seller shall not, at any time, directly or indirectly (i) liquidate or dissolve or enter into any consolidation or merger or be subject to a Change in Control or sell all or substantially all of its Property (other than in connection with an asset-based financing, securitization or other secondary market transaction related to the Seller’s assets in the ordinary course of the Seller’s business) without providing Purchaser and Agent with not less than forty-five (45) days’ prior written notice of such event; (ii) form or enter into any partnership, joint venture, syndicate or other combination which would have a Material Adverse Effect with respect to Seller; or (iii) make any Material Adverse Change with respect to Seller.

(q) Insurance . RMS shall obtain and maintain insurance with responsible companies in such amounts and against such risks as are customarily carried by business entities engaged in similar businesses similarly situated, including without limitation, the insurance required to be obtained and maintained by the Agency pursuant to the Agency Guide, and will furnish Purchaser and Agent on request full information as to all such insurance, and provide within fifteen (15) days after receipt of such request the certificates or other documents evidencing renewal of each such policy. RMS shall continue to maintain coverage, for itself and its Subsidiaries, that encompasses employee dishonesty, forgery or alteration, theft, disappearance and destruction, robbery and safe burglary, Property (other than money and securities), and computer fraud in an aggregate amount of at least such amount as is required by the Agency.

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(r) Affiliate Transaction . Except as contemplated by this Agreement, without providing Purchaser with not less than forty-five (45) days’ prior written notice of such event, Seller shall not, at any time, directly or indirectly, sell, lease or otherwise transfer any substantial Property or substantial assets to, or otherwise acquire any material Property or material assets from, or otherwise engage in any transactions with, any of its Affiliates (other than its Subsidiaries) unless the terms thereof are no less favorable to Seller, than those that could be obtained at the time of such transaction in an arm’s length transaction with a Person who is not such an Affiliate.

(s) Change of Fiscal Year . Seller shall not, at any time, directly or indirectly, except upon ninety (90) days’ prior written notice to Purchaser and Agent, change the date on which its fiscal year begins from its current fiscal year beginning date.

(t) Transfer of Servicing Rights, Servicing Files and Servicing . With respect to the Servicing Rights of each Mortgage Loan subject to a Transaction, RMS shall transfer such Servicing Rights to Purchaser or its designee on the related Purchase Date. With respect to the Servicing Files and the physical and contractual servicing of each Mortgage Loan subject to a Transaction to the extent in the possession of Seller, Seller shall deliver such Servicing Files and the physical and contractual servicing to Purchaser or its designee upon the expiration of the Servicing Term unless either such Servicing Term is renewed by Purchaser or the termination of the Seller as servicer pursuant to Section 16 . Seller’s transfer of the Servicing Rights, Servicing Files and the physical and contractual servicing under this Section shall be in accordance with customary standards in the industry including the transfer of the gross amount of all escrows, if any, held for the related Mortgagors (without reduction for unreimbursed advances or “negative escrows”).

(u) Audit and Approval Maintenance . RMS shall (i) at all times maintain copies of relevant portions of all final written Agency audits, examinations, evaluations, monitoring reviews and reports of its origination and servicing operations (including those prepared on a contract basis for any such agency) in which there are material adverse findings, including without limitation notices of defaults, notices of termination of approved status, notices of imposition of supervisory agreements or interim servicing agreements, and notices of probation, suspension, or non-renewal, and all necessary approvals from the Agency, and (ii) provide copies of all such audits, examinations, evaluations, monitoring reviews and reports to the Agent in connection with any annual audit by the Agent.

(v) REO Subsidiary Governing Documents . Neither the LLC Agreement nor the REO Subsidiary’s certificate of formation nor any other governing document of the REO Subsidiary may be amended without the Agent’s prior written consent.

(w) Fees and Expenses . Seller shall timely pay to Purchaser all actual out of pocket fees and expenses required to be paid by Seller hereunder and under any other Program Document to Purchaser in immediately available funds, and without deduction, set-off or counterclaim in accordance with the Purchaser’s Wire Instructions.

(x) Agency Status . Once RMS or any of its subservicers has obtained any status with any of the Agency’s mortgage loan pools for which RMS is issuer or servicer, RMS shall not take or omit to take any act that (i) would result in the suspension or loss of any of such status, or (ii) after which RMS or any such relevant subservicer would no longer be in good standing with respect to such status, or (iii) after which RMS or any such relevant subservicer would no longer satisfy all applicable Agency net worth requirements, if both (x) all of the material effects of such act or omission shall not have been cured by RMS or waived by the Agency before termination of such status and (y) the termination of such status could reasonably be expected to have a Material Adverse Effect.

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(y) Further Documents . Seller shall, upon request of Purchaser or Agent, promptly execute and deliver to Purchaser or Agent all such other and further documents and instruments of transfer, conveyance and assignment, and shall take such other action as Purchaser or Agent may require more effectively to transfer, convey, assign to and vest in Purchaser and to put Purchaser in possession of the Property to be transferred, conveyed, assigned and delivered hereunder and otherwise to carry out more effectively the intent of the provisions under this Agreement.

(z) Due Diligence . Seller will permit Purchaser, Agent or their respective agents or designees, including the Verification Agent, to perform due diligence reviews on the Mortgage Loans subject to each Transaction hereunder within thirty (30) days following the related Purchase Date. Seller shall cooperate in all respects with such diligence and shall provide Purchaser, Agent or their respective agents or designees, including the Verification Agent, with all loan files and other information (including, without limitation, RMS’s quality control procedures and results) reasonably requested by Purchaser, Agent or their respective agents or designees, including the Verification Agent, and shall bear all costs and expenses associated with such due diligence.


15.	REPURCHASE OF MORTGAGE LOANS

Upon discovery by Seller of a breach of any of the representations and warranties set forth on Exhibit B to this Agreement, Seller shall give prompt written notice thereof to Purchaser and Agent. Upon any such discovery by Purchaser, Purchaser will notify Seller. It is understood and agreed that the representations and warranties set forth in Exhibit B to this Agreement with respect to the Eligible Mortgage Loans shall survive delivery of the respective Mortgage Files to Purchaser or Custodian with respect to the Eligible Mortgage Loans and shall inure to the benefit of Purchaser. The fact that Purchaser has conducted or has failed to conduct any partial or complete due diligence investigation in connection with its purchase of any Eligible Mortgage Loan shall not affect Purchaser’s right to demand repurchase or any other remedy as provided under this Agreement. Seller shall, within five (5) Business Days of the earlier of Seller’s discovery or receipt of notice with respect to any Eligible Mortgage Loan of (i) any breach of a representation or warranty contained in Exhibit B of this Agreement or (ii) any failure to deliver any of the items required to be delivered as part of the Mortgage File within the time period required for delivery pursuant to the Custodial Agreement, promptly cure such breach or delivery failure in all material respects. If within five (5) Business Days after the earlier of Seller’s discovery of such breach or delivery failure or receipt of notice thereof that such breach or delivery failure has not been remedied by Seller, Seller shall promptly upon receipt of written instructions from Purchaser, at Purchaser’s option, repurchase such Eligible Mortgage Loan at a purchase price equal to the Repurchase Price with respect to such Eligible Mortgage Loan by wire transfer to the account designated by Purchaser.


16.	SERVICING OF THE MORTGAGE LOANS; SERVICER TERMINATION

(a) RMS to Subservice .

(i) Upon payment of the Purchase Price, Purchaser shall own the servicing rights related to the Mortgage Loans including the Mortgage File. RMS and Purchaser each agrees and acknowledges that the Mortgage Loans sold hereunder shall be sold to Purchaser on a servicing-released basis, and that Purchaser is engaging and hereby does engage RMS to provide subservicing of each Mortgage Loan and REO Property for the benefit of Purchaser.

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(ii) So long as a Mortgage Loan is outstanding or an REO Property is owned by the REO Subsidiary, RMS shall neither assign, encumber or pledge its obligation to subservice the Mortgage Loans or REO Properties in whole or in part, nor delegate its rights or duties under this Agreement (to other than a subservicer) without the prior written consent of Purchaser and Agent, the granting of which consent shall be in the sole discretion of Purchaser and Agent. RMS hereby acknowledges and agrees that (A) Purchaser is entering into this Agreement in reliance upon RMS’s representations as to the adequacy of its financial standing, servicing facilities, personnel, records, procedures, reputation and integrity, and the continuance thereof; and (B) RMS’s engagement hereunder to provide mortgage servicing for the benefit of Purchaser is intended by the parties to be a “personal service contract” and RMS is hereunder intended by the parties to be an “independent contractor”.

(iii) RMS shall subservice and administer the Mortgage Loans and REO Properties on behalf of Purchaser in accordance with Accepted Servicing Practices. RMS shall have no right to modify or alter the terms of any Mortgage Loan or consent to the modification or alteration of the terms of any Mortgage Loan except in Strict Compliance with the related Agency Program. RMS shall at all times maintain accurate and complete records of its servicing of the Mortgage Loans and REO Properties, and Agent may, at any time during RMS’s business hours on reasonable notice, examine and make copies of such Servicing Records. RMS agrees that Purchaser is the 100% beneficial owner of all Servicing Records relating to the Mortgage Loans and REO Properties. RMS covenants to hold or cause to be held such Servicing Records for the benefit of Purchaser and to safeguard such Servicing Records and to deliver them promptly to Agent or its designee (including the Custodian) at Agent’s request or otherwise as required by operation of this Section 16 .

(b) Servicing Term . RMS shall subservice such Mortgage Loans and REO Properties for a term of thirty (30) days commencing as of the related Purchase Date, which term may be extended in writing by Agent in its sole discretion, for an additional thirty-day period (each, a “ Servicing Term ”); provided, that Purchaser and/or Agent shall have the right to immediately terminate the Servicer at any time following the occurrence of a Servicer Termination Event. If such Servicing Term is not extended by Agent or if Purchaser or Agent has terminated RMS as a result of a Servicer Termination Event, RMS shall transfer such servicing to Purchaser or its designee at no cost or expense to Purchaser as provided in Section 14(t) . RMS shall hold or cause to be held all Escrow Payments collected with respect to the Mortgage Loans in segregated accounts for the sole benefit of the Mortgagor and shall apply the same for the purposes for which such funds were collected. If RMS should discover that, for any reason whatsoever, it has failed to perform fully its servicing obligations with respect to the Mortgage Loans or REO Properties, RMS shall promptly notify Purchaser and Agent.

(c) Servicing Reports . Within five (5) Business Days after the end of each month, and as requested by Purchaser and/or Agent from time to time, RMS shall furnish to Purchaser, Agent and Verification Agent reports in form and scope satisfactory to Purchaser, setting forth (i) data regarding the performance of the individual Mortgage Loans, (ii) a summary report of all Mortgage Loans serviced by RMS and originated pursuant to the Agency Guide, HUD and/or FHA guidelines (on a portfolio basis) and all REO Properties serviced by RMS, in each case, for the immediately preceding month, including, without limitation, all collections, delinquencies, defaults, defects, claim rates, losses and recoveries and (iii) any other information reasonably requested by Purchaser or Agent or Verification Agent.

(d) Backup Servicer . The Agent, in its sole discretion, may appoint a backup servicer at any time during the term of this Agreement. In such event, RMS shall commence monthly delivery to such backup servicer of the servicing information required to be delivered to Purchaser and Agent pursuant to Section 16

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(c) hereof and any other information reasonably requested by backup servicer, all in a format that is reasonably acceptable to such backup servicer. Purchaser shall pay all costs and expenses of such backup servicer, including, but not limited to all fees of such backup servicer in connection with the processing of such information and the maintenance of a servicing file with respect to the applicable Mortgage Loans and/or REO Properties. RMS shall cooperate fully with such backup servicer in the event of a transfer of servicing hereunder and will provide such backup servicer with all documents and information necessary for such backup servicer to assume the servicing of the applicable Mortgage Loans and/or REO Properties.

(e) Collection Account . Prior to the initial Purchase Date, RMS shall establish and maintain a Collection Account with the Bank in the Agent’s name for the sole and exclusive benefit of Purchaser. Such account shall be subject to the Collection Account Control Agreement. Servicer shall deposit or credit (or cause to be deposited or credited) to the Collection Account all amounts collected on account of the Mortgage Loans and REO Properties within two (2) Business Days of receipt and remit such collections in accordance with Section 16(f) hereof. Following the occurrence and during the continuance of an Event of Default, such amounts shall be deposited or credited irrespective of any right of setoff or counterclaim arising in favor of RMS (or any third party claiming through it) under any other agreement or arrangement. Amounts on deposit in the Collection Account shall be distributed as provided in Section 16(f) .

(f) Income Payments .

(i) Where a particular term of a Transaction extends over the date on which Income is paid in respect of any Purchased Asset subject to that Transaction, Income collected in respect of the Mortgage Loans shall be the Property of Purchaser subject to subsections 16(f)(ii) and (iii) below. The Collection Account shall be subject to the terms and conditions of the Collection Account Control Agreement.

(ii) Except as otherwise provided in Section 16(f)(iv) , on the Monthly Payment Date, Purchaser shall cause amounts deposited in the Collection Account to be released to RMS, which amounts shall be applied by RMS to (A) reduce outstanding Price Differential due and payable in respect of Purchased Assets for which Purchaser has received the related Repurchase Price (other than Price Differential) pursuant to Section 3(f) during the prior calendar month, (B) reduce the Repurchase Price for all outstanding Transactions, and (C) pay all other Obligations then due and payable to Purchaser. Notwithstanding anything set forth in this Agreement, RMS can remit on a more frequent basis with the written consent of the Purchaser and the Agent.

(iii) Notwithstanding anything herein or in the Collection Account Control Agreement to the contrary, RMS shall in no event be permitted to withdraw funds from the Collection Account to the extent that such action would result in the creation of a Margin Deficit (unless prior thereto or simultaneously therewith RMS cures such Margin Deficit in accordance with Section 7 ), or if an Event of Default is then continuing. Further, if an uncured Margin Deficit exists as of such Monthly Payment Date, RMS shall cause the Bank to disburse the Income related to the Transaction for which the Margin Deficit exists to Purchaser (up to the amount of such Margin Deficit), which amounts shall be applied by Purchaser to reduce the related Repurchase Price.

(iv) If a successor servicer takes delivery of such Mortgage Loans and rights to service such REO Properties either under the circumstances set forth in Section 16(i) or otherwise, all amounts deposited in the Collection Account shall be paid to Purchaser promptly upon such delivery.

(g) [Reserved].

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(h) With respect to each Eligible Mortgage Loan and REO Property, RMS shall (i) complete the U.S. Department of Housing and Urban Development’s form for Single-Family Application for Insurance Benefits in the name of Purchaser, and shall cause FHA to pay claims on such Mortgage Loan into the Collection Account, including by ensuring that Box 12 of the form provides “30565-0000-6”, (ii) revise the details for such Mortgage Loan on the Home Equity Reverse Mortgage Information Technology (HERMIT) servicing system by ensuring that Investor Name in the “Servicer Information” section provides “Sutton Funding LLC”, (iii) service such Mortgage Loan in Strict Compliance with all FHA requirements and (iv) otherwise take reasonable steps to ensure that FHA claim payments will be made to Sutton Funding LLC. Notwithstanding the foregoing, if Sutton Funding LLC is not set up in HERMIT, then claim forms will be completed in such a manner that FHA will remit such payments to RMS, and RMS shall remit such payments to the Collection Account or such other account specified in writing by the Purchaser within two (2) Business Days of receipt.

(i) Servicer Termination . Agent, in its sole discretion, may terminate RMS’s rights and obligations as subservicer of the affected Mortgage Loans and REO Properties and require RMS to deliver the related Servicing Records to Agent or its designee upon the occurrence of (i) an Event of Default or (ii) upon the expiration of the Servicing Term as set forth in Section 16(b) by delivering written notice to RMS requiring such termination. Such termination shall be effective upon RMS’s receipt of such written notice; provided , that RMS’s subservicing rights shall be terminated immediately upon the occurrence of a Servicer Termination Event, regardless of whether notice of such event shall have been given to or by Agent, Purchaser or RMS. Upon any such termination, all authority and power of RMS respecting its rights to subservice and duties under this Agreement relating thereto, shall pass to and be vested in the successor servicer appointed by Agent and Agent is hereby authorized and empowered to transfer such rights to subservice the Mortgage Loans and REO Properties for such price and on such terms and conditions as Agent shall reasonably determine. RMS shall promptly take such actions and furnish to Agent such documents that Agent deems necessary or appropriate to enable Agent to enforce such Mortgage Loans and manage such REO Properties and shall perform all acts and take all actions so that the Mortgage Loans and REO Properties and all files and documents relating to such Mortgage Loans and REO Properties held by RMS, together with all escrow amounts relating to such Mortgage Loans and REO Properties, are delivered to the successor servicer, including but not limited to preparing, executing and delivering to the successor servicer any and all documents and other instruments, placing in the successor servicer’s possession all Servicing Records pertaining to such Mortgage Loans and REO Properties and doing or causing to be done, all at RMS’s sole expense. To the extent that the approval of the Agency is required for any such sale or transfer, RMS shall fully cooperate with Agent to obtain such approval. All amounts paid by any purchaser of such rights to service or subservice the Mortgage Loans and REO Properties shall be the Property of Purchaser. The subservicing rights required to be delivered to the successor servicer in accordance with this Section 16(i) shall be delivered free of any servicing rights in favor of RMS or any third party (other than Purchaser) and free of any title, interest, lien, encumbrance or claim of any kind of RMS other than record title to the Mortgages relating to the Mortgage Loans and the right and obligation to repurchase the Mortgage Loans hereunder or remove the related REO Properties from the REO Subsidiary. No exercise by Agent or Purchaser of their rights under this Section 16(i) shall relieve RMS of responsibility or liability for any breach of this Agreement.


17.	EVENTS OF DEFAULT

With respect to any Transactions covered by or related to this Agreement, the occurrence of any of the following events shall constitute an “ Event of Default ”:

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(a) Seller fails to transfer the Purchased Assets to Purchaser on the applicable Purchase Date (provided Purchaser has tendered the related Purchase Price);

(b) Seller either fails to repurchase the Purchased Assets on the applicable Repurchase Date or fails to perform its obligations under Section 7 or the last sentence of Section 15 ;

(c) Seller shall fail to (i) remit to Purchaser when due any payment required to be made under the terms of this Agreement, any of the other Program Documents or any other contracts or agreements delivered in connection herewith or therewith, or (ii) perform, observe or comply with any material term, condition, covenant or agreement contained in this Agreement or any of the other Program Documents (other than the other “Events of Default” set forth in this Section 17 ) or any other contracts or agreements delivered in connection herewith or therewith, and, in the case of clause (ii), such failure is not cured within the time period expressly provided for therein, or, if no such cure period is provided, within two (2) Business Days (or, in the case of Section 14(k)(i) and (ii) hereof, ten (10) Business Days) of the earlier of (x) Seller’s receipt of written notice from Purchaser or Agent or Custodian of such breach or (y) the date on which Seller obtains notice or knowledge of the facts giving rise to such breach;

(d) Any representation or warranty made by Seller or Guarantor (or any of Seller’s or Guarantor’s officers) in the Program Documents or in any other document delivered in connection therewith, shall have been incorrect or untrue in any material respect when made or repeated or deemed by the terms thereof to have been made or repeated (other than the representations or warranties in Exhibit B , which shall be considered solely for the purpose of determining whether the related Purchased Asset is an Eligible Mortgage Loan), which continues unremedied for a period of five (5) Business Days (or, in the case of Section 13(a)(w) and (x) , ten (10) Business Days) after receipt of written notice, unless (i) Seller shall have made any such representation or warranty with the knowledge that it was materially false or misleading at the time made or repeated or deemed to have been made or repeated, or (ii) any such representation or warranty shall have been determined by Purchaser or Agent in its sole discretion to be materially false or misleading on a regular basis;

(e) Seller, Guarantor, any of Seller’s Subsidiaries shall be in a continuing default under, or fail to perform as requested under, or shall otherwise breach the material terms of, in each case beyond any applicable cure period and which has not been waived, and with respect to (i) any warehouse, credit, repurchase, line of credit, financing, derivative, hedging or forward sale agreements or other similar agreement relating to any Indebtedness (other than Nonrecourse Debt) in an amount greater than $5,000,000 between Seller, Guarantor, any of Seller’s Subsidiaries on the one hand, and any Person, on the other hand, (ii) any other agreement relating to any Indebtedness (other than Nonrecourse Debt) in an amount greater than $5,000,000 between Seller, Guarantor, any of Seller’s Subsidiaries, on the one hand, and any Person, on the other hand, or (iii) any other agreement (including, without limitation, the Program Documents), indebtedness, derivative or obligation entered into between Seller, Guarantor, any of Seller’s Subsidiaries and Purchaser or any of its Affiliates;

(f) Any Act of Insolvency of the Seller or Guarantor or any of their respective Affiliates;

(g) Any final judgment or order for the payment of money in excess of $5,000,000 in the aggregate (to the extent that it is, in the reasonable determination of Purchaser or Agent, uninsured and provided that any insurance or other credit posted in connection with an appeal shall not be deemed insurance for these purposes) shall be rendered against Seller or Guarantor or any of Seller’s Subsidiaries by one or more courts, administrative tribunals or other bodies having jurisdiction over them and the same shall not be discharged (or provisions shall not be made for such discharge) satisfied, or bonded, or a stay of execution

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thereof shall not be procured, within the later of sixty (60) days from the date of entry thereof and the date specified therein and Seller or Guarantor or any of Seller’s Subsidiaries, as applicable, shall not, within said period, or such longer period during which execution of the same shall have been stayed or bonded, appeal therefrom and cause the execution thereof to be stayed during such appeal;

(h) Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority (i) shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of Seller or Guarantor or any of their respective Affiliates, (ii) shall have taken any action to displace the management of Seller or any of Seller’s Affiliates or to curtail its authority in the conduct of the business of Seller or any of Seller’s Affiliates and such action could reasonably be expected to have a Material Adverse Effect or (iii) takes any action in the nature of enforcement to remove, limit or restrict the approval of Seller or any of Seller’s Affiliates as an issuer, Purchaser or a seller/servicer of Mortgage Loans or securities backed thereby and such action could reasonably be expected to have a Material Adverse Effect;

(i) RMS shall fail to comply with any of the financial covenants set forth in Section 14(g)(ii), or Guarantor shall fail to comply with any of the financial covenants set forth in the Guaranty;

(j) Any Material Adverse Effect shall have occurred;

(k) This Agreement shall for any reason cease to create a valid first priority security interest or ownership interest upon transfer in any material portion of the Purchased Assets or Purchased Items purported to be covered hereby;

(l) A Change in Control of Seller shall have occurred that has not been approved by Agent;

(m) Purchaser or Agent shall reasonably request, specifying the reasons for such request, reasonable information, and/or written responses to such requests, regarding the financial well‑being of Seller, and such reasonable information and/or responses shall not have been provided within ten (10) Business Days of such request;

(n) [RESERVED];

(o) REO Subsidiary breaches any of its Separateness Covenants;

(p) Change of Servicer without consent of the Agent;

(q) [RESERVED];

(r) Failure of Servicer to meet the qualifications to maintain all requisite Approvals, such Approvals are revoked or such Approvals are materially modified;

(s) [RESERVED]; and

(t) Failure of RMS to use best efforts to cause FHA to make claims payments to Purchaser with respect to any Mortgage Loans sold to Purchaser hereunder; provided that Purchaser is eligible to receive such payments.


18.	REMEDIES

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Upon the occurrence of (i) an Event of Default (other than that referred to in Section 17(f)), Purchaser, at its option, shall have the right to exercise any or all of the following rights and remedies and (ii) an Event of Default referred to in Section 17(f), the following rights and remedies shall immediately and automatically take effect without any further action by any Person.

(a) %3. The Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). Seller’s Obligations hereunder to repurchase all Purchased Assets at the Repurchase Price therefor on the Repurchase Date in such Transactions shall thereupon become immediately due and payable; all Income paid after such exercise or deemed exercise shall be remitted to and retained by Purchaser and applied to the aggregate Repurchase Prices and any other amounts owing by Seller hereunder; Seller shall immediately deliver to Purchaser or its designee any and all original papers, records and files relating to the Purchased Assets subject to such Transaction then in its possession and/or control; and all right, title and interest in and entitlement to such Purchased Assets and Servicing Rights thereon shall become Property of Purchaser.

(i) Purchaser may (A) sell, on or following the Business Day following the date on which the Repurchase Price becomes due and payable pursuant to Section 18(a)(i) without notice or demand of any kind, at a public or private sale and at such price or prices as Purchaser may reasonably deem satisfactory, any or all or portions of the Purchased Assets on a servicing-released or servicing-retained basis, as Purchaser may determine in its sole discretion and/or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Assets, to give Seller credit for such Purchased Assets (including credit for the Servicing Rights in respect of sales on a servicing-retained basis) in an amount equal to the Market Value of the Purchased Assets against the aggregate unpaid Repurchase Price and any other amounts owing by Seller hereunder. Seller shall remain liable to Purchaser for any amounts that remain owing to Purchaser following a sale and/or credit under the preceding sentence. The proceeds of any disposition of Purchased Assets shall be applied first to the reasonable costs and expenses including but not limited to legal fees incurred by Purchaser in connection with or as a result of an Event of Default; second to costs of cover and/or related hedging transactions; third to the aggregate Repurchase Prices; and fourth to all other Obligations.

(ii) The parties recognize that it may not be possible to purchase or sell all of the Purchased Assets on a particular Business Day, or in a transaction with the same purchaser, or in the same manner because the market for such Purchased Assets may not be liquid. In view of these characteristics of the Purchased Assets, the parties agree that liquidation of a Transaction or the underlying Purchased Assets does not require a public purchase or sale and that a good faith private purchase or sale shall be deemed to have been made in a commercially reasonable manner. Accordingly, Purchaser may elect the time and manner of liquidating any Purchased Asset and nothing contained herein shall obligate Purchaser to liquidate any Purchased Asset upon the occurrence of an Event of Default or to liquidate all Purchased Assets in the same manner or on the same Business Day or shall constitute a waiver of any right or remedy of Purchaser. Notwithstanding the foregoing, the parties to this Agreement agree that the Transactions have been entered into in consideration of and in reliance upon the fact that all Transactions hereunder constitute a single business and contractual obligation and that each Transaction has been entered into in consideration of the other Transactions.

(iii) Purchaser may terminate the Agreement.

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(b) Seller hereby acknowledges, admits and agrees that Seller’s obligations under this Agreement are recourse obligations of Seller. In addition to its rights hereunder, Purchaser shall have the right to proceed against any of Seller’s assets which may be in the possession of Purchaser, any of Purchaser’s Affiliates or their designees (including the Custodian), including the right to liquidate such assets and to set-off the proceeds against monies owed by Seller to Purchaser pursuant to this Agreement. Purchaser may set off cash, the proceeds of the liquidation of the Purchased Assets and Additional Purchased Mortgage Loans and all other sums or obligations owed by Purchaser to Seller or against all of Seller’s Obligations to Purchaser, or Seller’s obligations to Purchaser under any other agreement between the parties, or otherwise, whether or not such obligations are then due, without prejudice to Purchaser’s right to recover any deficiency.

(c) Purchaser shall have the right to obtain physical possession of the Records and all other files of Seller relating to the Purchased Assets and all documents relating to the Purchased Assets which are then or may thereafter come into the possession of Seller or any third party acting for Seller and Seller shall deliver to Purchaser such assignments as Purchaser shall request.

(d) Purchaser shall have the right to direct all Persons servicing the Purchased Assets to take such action with respect to the Purchased Assets as Purchaser determines appropriate, including, without limitation, using its rights under a power of attorney granted pursuant to Section 9(b) hereof.

(e) Purchaser shall, without regard to the adequacy of the security for the Obligations, be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession of and protect, collect, manage, liquidate, and sell the Purchased Assets or any portion thereof, collect the payments due with respect to the Purchased Assets or any portion thereof, and do anything that Purchaser is authorized hereunder to do. Seller shall pay all costs and expenses incurred by Purchaser in connection with the appointment and activities of such receiver, and such shall be deemed part of the Obligations hereunder.

(f) Purchaser may, at its option, enter into one or more hedging transactions covering all or a portion of the Purchased Assets, and Seller shall be responsible for all damages, judgments, costs and expenses of any kind which may be imposed on, incurred by or asserted against Purchaser relating to or arising out of such hedging transactions; including without limitation any losses resulting from such hedging transactions, and such shall be deemed part of the Obligations hereunder.

(g) In addition to all the rights and remedies specifically provided herein, Purchaser shall have all other rights and remedies provided by applicable federal, state, foreign and local laws, whether existing at law, in equity or by statute, including, without limitation, all rights and remedies available to a purchaser/secured party under the Uniform Commercial Code.

Except as otherwise expressly provided in this Agreement, Purchaser shall have the right to exercise any of its rights and/or remedies without presentment, demand, protest or further notice of any kind, other than as expressly set forth herein, all of which are hereby expressly waived by Seller.

Purchaser may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives, to the extent permitted by law, any right Seller might otherwise have to require Purchaser to enforce its rights by judicial process. Seller also waives, to the extent permitted by law, any defense Seller might otherwise have to the Obligations, or any guaranty thereof, arising from use of nonjudicial process, enforcement and sale of all or any portion of the Purchased Assets or from any other election of remedies. Seller recognizes that nonjudicial

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remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.

Seller shall cause all sums received by it with respect to the Purchased Assets to be deposited in the Collection Account promptly upon receipt thereof but in no event later than twenty-four (24) hours thereafter. Seller shall be liable to Purchaser for the amount of all losses, costs and/or expenses (plus interest thereon at a rate equal to the Default Rate) which Purchaser may sustain or incur in connection with hedging transactions relating to the Purchased Assets, conduit advances and payments for mortgage insurance.


19.	DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE

No failure on the part of Purchaser to exercise, and no delay by Purchaser in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Purchaser of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All rights and remedies of Purchaser provided for herein are cumulative and in addition to any and all other rights and remedies provided by law, the Program Documents and the other instruments and agreements contemplated hereby and thereby, and are not conditional or contingent on any attempt by Purchaser to exercise any of its rights under any other related document. Purchaser may exercise at any time after the occurrence of an Event of Default one or more remedies permitted hereunder, as it so desires, and may thereafter at any time and from time to time exercise any other remedy or remedies permitted hereunder.


20.	USE OF EMPLOYEE PLAN ASSETS

No assets of an employee benefit plan subject to any provision of ERISA shall be used by any party hereto in a Transaction.


21.	INDEMNITY

(a) RMS and REO Subsidiary agree, jointly and severally, to indemnify and hold harmless Purchaser, Agent and their Affiliates and their respective officers, directors, employees, agents and advisors (each, an “ Indemnified Party ”) from and against (and will reimburse each Indemnified Party as the same is incurred within thirty (30) days following receipt of an invoice therefor) any and all claims, damages, losses, liabilities, Taxes, increased costs and all other reasonable expenses including reasonable out-of-pocket expenses (including, without limitation, reasonable fees and expenses of outside counsel and audit and due diligence fees) that may be incurred by or asserted or awarded against any Indemnified Party, solely relating to claims of third parties, in each case arising out of or in connection with or by reason of (including without limitation, in connection with) (i) any investigation, litigation or other proceeding (whether or not such Indemnified Party is a party thereto) relating to, resulting from or arising out of any of the Program Documents and all other documents related thereto, any breach by Seller of any representation or warranty or covenant in this Agreement or any other Program Document, and all actions taken pursuant thereto, (ii) the Transactions, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby, including, without limitation, any acquisition or proposed acquisition, or any indemnity payable under the servicing agreement or other servicing arrangement, (iii) the actual or alleged presence of hazardous materials on any Property or any environmental action relating in any way to any Property, (iv) the actual or alleged violation of any federal, state, municipal or local predatory lending laws, or (v) the reduction of the Principal Balance due to a cram down or similar action authorized by any bankruptcy

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proceeding or other case arising out of or relating to any petition under the Bankruptcy Code, in each case, except to the extent such claim, damage, loss, liability or expense is found in a final, non‑appealable judgment by a court of competent jurisdiction to have resulted directly from such Indemnified Party’s gross negligence or willful misconduct or is the result of a claim made by Seller against the Indemnified Party, and Seller is ultimately the successful party in any resulting litigation or arbitration. Seller hereby agrees not to assert any claim against Purchaser or any of its Affiliates, or any of their respective officers, directors, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Program Documents, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby.

(b) If Seller fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation, reasonable fees and expenses of counsel and indemnities, such amount may be paid on behalf of Seller by Purchaser, in its sole discretion and Seller shall remain liable for any such payments by Purchaser and such amounts shall be deemed part of the Obligations hereunder. No such payment by Purchaser shall be deemed a waiver of any of Purchaser’s rights under the Program Documents.

(c) Without prejudice to the survival of any other agreement of Seller hereunder, the covenants and obligations of Seller contained in this Section 21 shall survive the payment in full of the Repurchase Price and all other amounts payable hereunder and delivery of the Purchased Assets by Purchaser against full payment therefor.


22.	WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS

Seller hereby expressly waives, to the fullest extent permitted by law, every statute of limitation on a deficiency judgment, any reduction in the proceeds of any Purchased Assets as a result of restrictions upon Purchaser or Custodian contained in the Program Documents or any other instrument delivered in connection therewith, and any right that they may have to direct the order in which any of the Purchased Assets shall be disposed of in the event of any disposition pursuant hereto.


23.	REIMBURSEMENT; SET-OFF

(a) Seller agrees to pay on demand all reasonable out-of-pocket costs and expenses of Purchaser and Agent in connection with the initial and subsequent negotiation, modification, renewal and amendment of the Program Documents (including, without limitation, (A) all collateral review and UCC search and filing fees and expenses and (B) the reasonable fees and expenses of outside counsel for Purchaser and Agent with respect to advising Purchaser and Agent as to their rights and responsibilities, or the perfection, protection or preservation of rights or interests, under this Agreement and any other Program Document, with respect to negotiations with Seller or with other creditors of Seller arising out of any Default or any events or circumstances that may give rise to a Default and with respect to presenting claims in or otherwise participating in or monitoring any bankruptcy, insolvency or other similar proceeding involving creditors’ rights generally and any proceeding ancillary thereto). Seller agrees to pay on demand, with interest at the Default Rate to the extent that an Event of Default has occurred, all costs and expenses, including without limitation, reasonable attorneys’ fees and disbursements (and fees and disbursements of Purchaser’s and Agent’s outside counsel) expended or incurred by Purchaser, Agent and/or Custodian in connection with the modification, renewal, amendment and enforcement (including any waivers) of the Program Documents (regardless of whether a Transaction is entered into hereunder), the taking of any action, including legal action, required or permitted to be taken by Purchaser, Agent (without duplication to Purchaser and Agent)

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and/or Custodian pursuant thereto or by refinancing or restructuring in the nature of a “workout.” Further, Seller agrees to pay, with interest at the Default Rate to the extent that an Event of Default has occurred, all costs and expenses, including without limitation, reasonable attorneys’ fees and disbursements (and fees and disbursements of Purchaser’s and Agent’s outside counsel) expended or incurred by Purchaser and Agent in connection with (a) the rendering of legal advice as to such party’s rights, remedies and obligations under any of the Program Documents, (b) the collection of any sum which becomes due to Purchaser under any Program Document, (c) any proceeding for declaratory relief, any counterclaim to any proceeding, or any appeal, or (d) the protection, preservation or enforcement of any rights of Purchaser. For the purposes of this Section 23(a) , attorneys’ fees shall include, without limitation, fees incurred in connection with the following: (1) discovery; (2) any motion, proceeding or other activity of any kind in connection with a bankruptcy proceeding or case arising out of or relating to any petition under Title 11 of the United States Code, as the same shall be in effect from time to time, or any similar law; (3) garnishment, levy, and debtor and third party examinations; and (4) post-judgment motions and proceedings of any kind, including without limitation any activity taken to collect or enforce any judgment. Any and all of the foregoing amounts referred to in this Section 23(a) shall be deemed a part of the Obligations hereunder. Without prejudice to the survival of any other agreement of Seller hereunder, the covenants and obligations of Seller contained in this Section 23(a) shall survive the payment in full of the Repurchase Price and all other amounts payable hereunder and delivery of the Purchased Assets by Purchaser against full payment therefor.

(b) In addition to any rights and remedies of Purchaser under this Agreement and at law, Purchaser and its Affiliates shall have the right, without prior notice to Seller, any such notice being expressly waived by Seller to the extent permitted by applicable law, upon any amount becoming due and payable (whether at the stated maturity, by acceleration or otherwise) by Seller hereunder or under any other agreement entered into between Seller or any of its Affiliates on the one hand, and Purchaser or any of its Affiliates on the other hand, to set-off and appropriate and apply against such amount any and all Property and deposits (general or special, time or demand, provisional or final), in any currency, or any other credits, indebtedness or claims, in any currency, or any other collateral (in the case of collateral not in the form of cash or such other marketable or negotiable form, by selling such collateral in a recognized market therefor or as otherwise permitted by law or as may be in accordance with custom, usage or trade practice), in each case, whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Purchaser or any Affiliate thereof to or for the credit or the account of Seller of any of its Affiliates. Purchaser may also set-off cash and all other sums or obligations owed by Purchaser or its Affiliates to Seller or its Affiliates (whether under this Agreement or under any other agreement between the parties or between Seller or any of its Affiliates, on the one hand, and Purchaser or any of its Affiliates, on the other) against all of Seller’s obligations to Purchaser or its Affiliates (whether under this Agreement or under any other agreement between the parties or between Seller or any of its Affiliates, on the one hand, and Purchaser or any of its Affiliates, on the other), whether or not such obligations are then due. The exercise of any such right of set-off shall be without prejudice to Purchaser’s or its Affiliate’s right to recover any deficiency. Purchaser agrees to promptly notify Seller after any such set‑off and application made by Purchaser; provided that the failure to give such notice shall not affect the validity of such set‑off and application.


24.	FURTHER ASSURANCES

Seller agrees to do such further acts and things and to execute and deliver to Purchaser or Agent such additional assignments, acknowledgments, agreements, powers and instruments as are reasonably required by Purchaser or Agent to carry into effect the intent and purposes of this Agreement, to perfect the interests of Purchaser in the Purchased Assets or to better assure and confirm unto Purchaser its rights, powers and remedies hereunder.

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25.	ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION

This Agreement supersedes and integrates all previous negotiations, contracts, agreements and understandings between the parties relating to a sale and repurchase of Purchased Assets and Additional Purchased Mortgage Loans, and it, together with the other Program Documents, and the other documents delivered pursuant hereto or thereto, contains the entire final agreement of the parties. No prior negotiation, agreement, understanding or prior contract shall have any validity hereafter.


26.	TERMINATION

This Agreement shall remain in effect until the Termination Date. However, no such termination shall affect Seller’s outstanding obligations to Purchaser at the time of such termination. Seller’s obligations to indemnify Purchaser and Agent pursuant to this Agreement and the other Program Documents shall survive the termination hereof.


27.	REHYPOTHECATION; ASSIGNMENT

(a) Purchaser may, in its sole election, and without the consent of the Seller engage in repurchase transactions with the Purchased Assets or otherwise pledge, hypothecate, assign, transfer or otherwise convey the Purchased Assets with a counterparty of Purchaser’s choice, in all cases subject to Purchaser’s obligation to reconvey the Purchased Assets (and not substitutes therefor) on the Repurchase Date, all at no cost to the Seller. In the event Purchaser engages in a repurchase transaction with any of the Purchased Assets or otherwise pledges or hypothecates any of the Purchased Assets, Purchaser shall have the right to assign to Purchaser’s counterparty any of the applicable representations or warranties in Exhibit B to this Agreement and the remedies for breach thereof, as they relate to the Purchased Assets that are subject to such repurchase transaction.

(b) The Program Documents and the Seller’s rights and obligations thereunder are not assignable by Seller without the prior written consent of Purchaser. Any Person into which Seller may be merged or consolidated, or any corporation resulting from any merger, conversion or consolidation to which Seller shall be a party, or any Person succeeding to the business of Seller, shall be the successor of Seller hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. Without any requirement for further consent of the Seller and at no cost or expense to the Seller, each of Purchaser and Agent may, in its sole election, assign or participate all or a portion of its rights and obligations under this Agreement and the Program Documents with a counterparty of Purchaser’s or Agent’s choice, provided , however , that the Seller will continue to deal directly with Purchaser and Agent following such assignment or participation. Purchaser or Agent shall notify Seller of any such assignment and participation and shall maintain, for review by Seller upon written request, a register of assignees and participants and a copy of any executed assignment and acceptance by Purchaser or Agent and assignee (“ Assignment and Acceptance ”), specifying the percentage or portion of such rights and obligations assigned. The Seller agrees that, for any such permitted assignment, Seller will cooperate with the prompt execution and delivery of documents reasonably necessary for such assignment process to the extent that Seller incurs no cost or expense that is not paid by Purchaser or Agent, as applicable. Upon such assignment, (a) such assignee shall be a party hereto and to each Program Document to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Purchaser or Agent hereunder, and (b) Purchaser or Agent shall, to the extent that such rights and obligations have been so assigned by it to either (i) an Affiliate of Purchaser or Agent which assumes the obligations of Purchaser or Agent hereunder or (ii) to another Person which assumes the

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obligations of Purchaser or Agent hereunder, be released from their obligations hereunder accruing thereafter and under the Program Documents.

(c) Purchaser and Agent may distribute to any prospective assignee, participant or pledgee any document or other information delivered to Purchaser by Seller subject to the confidentiality restrictions contained in Section 35 hereof; accordingly, such prospective assignee, participant or pledgee shall be required to agree to confidentiality provisions similar to those set forth in Section 35 .


28.	AMENDMENTS, ETC.

No amendment or waiver of any provision of this Agreement nor any consent to any failure to comply herewith or therewith shall in any event be effective unless the same shall be in writing and signed by Seller, Purchaser and Agent, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.


29.	SEVERABILITY

If any provision of any Program Document is declared invalid by any court of competent jurisdiction, such invalidity shall not affect any other provision of the Program Documents, and each Program Document shall be enforced to the fullest extent permitted by law.


30.	BINDING EFFECT; GOVERNING LAW

This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and assigns. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).


31.	WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION AND VENUE; SERVICE OF PROCESS

SELLER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PROGRAM DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS, ON BEHALF OF ITSELF AND ITS PROPERTY, TO THE NON‑EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR PROCEEDING. SELLER HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO, NON‑EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS.

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SELLER HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF A SUMMONS AND COMPLAINT AND OTHER PROCESS IN ANY ACTION, CLAIM OR PROCEEDING BROUGHT BY ANOTHER PARTY IN CONNECTION WITH THIS AGREEMENT OR THE OTHER PROGRAM DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS, ON BEHALF OF ITSELF OR ITS PROPERTY, IN THE MANNER SPECIFIED IN THIS SECTION 31 AND TO SUCH PARTY’S ADDRESS SPECIFIED IN SECTION 34 OR SUCH OTHER ADDRESS AS SUCH PARTY SHALL HAVE PROVIDED IN WRITING TO THE OTHER PARTIES HERETO. NOTHING IN THIS SECTION 31 SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO (I) SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW, OR (II) BRING ANY ACTION OR PROCEEDING AGAINST ANY OTHER PARTY OR ITS PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTIONS.


32.	SINGLE AGREEMENT

Seller, Purchaser and Agent acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, Seller, Purchaser and Agent each agree (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, and (ii) that payments, deliveries and other transfers made by any of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transaction hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.


33.	INTENT

Seller, Purchaser and Agent recognize that each of the Transactions and this Agreement is a “repurchase agreement” as that term is defined in Section 101 of the Bankruptcy Code, and a “securities contract” as that term is defined in Section 741 of the Bankruptcy Code, or a “qualified financial contract” as that term is defined in the Federal Deposit Insurance Act, as applicable, and a “master netting agreement” as that term is defined in Section 101 of the Bankruptcy Code.

It is understood that Purchaser’s right to liquidate the Purchased Assets and terminate and accelerate the Transactions and this Agreement or to exercise any other remedies pursuant to Section 18 hereof is a contractual right to liquidate, terminate and accelerate the Transactions under a repurchase agreement, a securities contract, a master netting agreement, and a qualified financial contract as described in Sections 559, 555 and 561 of the Bankruptcy Code and Section 1821(e)(8)(A)(i) of the Federal Deposit Insurance Act, as applicable, and a contractual right to offset under a master netting agreement and across contracts, as described in Section 561 of the Bankruptcy Code. It is understood that Seller’s right to accelerate the Repurchase Date with respect to the Purchased Assets and any Transaction hereunder pursuant to Section 18 hereof is a contractual right to liquidate, terminate and accelerate the Transactions under a repurchase agreement, a securities contract, a master netting agreement, and a qualified financial contract as described in Sections 559, 555 and

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561 of the Bankruptcy Code and Section 1821(e)(8)(A)(i) of the Federal Deposit Insurance Act, as applicable.

The parties hereby intend that any provisions hereof or in any other document, agreement or instrument that is related in any way to the servicing of the individual Mortgage Loans shall be deemed “related to” this Agreement within the meaning of Sections 101(38A)(A) and 101(47)(A)(v) of the Bankruptcy Code and part of the “contract” as such term is used in Section 741 of the Bankruptcy Code.


34.	NOTICES AND OTHER COMMUNICATIONS

Except as provided herein, all notices required or permitted by this Agreement shall be in writing (including without limitation by Electronic Transmission, email or facsimile) and shall be effective and deemed delivered only when received by the party to which it is sent; provided that notices of Events of Default and exercise of remedies or under Sections 6 or 18 shall be sent via overnight mail and by Electronic Transmission. Any such notice shall be sent to a party at the address, electronic mail or facsimile transmission number set forth below:

if to Seller: Reverse Mortgage Solutions, Inc.

2727 Spring Creek Drive

Spring, TX 77373

Attention: General Counsel

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with a copy to: Reverse Mortgage Solutions, Inc.

2727 Spring Creek Drive

Spring, TX 77373

Attention: Andrew G. Dokos

832 616 5815

Andrew.dokos@rmsnav.com

Walter Investment Management Corp.

345 St. Peter Street, Suite 1100

St. Paul, MN 55102

Attention: Cheryl Collins

651 293 3410

651 293 5746 (fax)

Cheryl.collins@walterinvestment.com

RMS REO BRC, LLC

c/o Reverse Mortgage Solutions, Inc.

2727 Spring Creek Drive

Spring, TX 77373

Attention: General Counsel

if to Purchaser: Sutton Funding LLC

2711 Centreville Road, Suite 400

Wilmington, Delaware 19808

with a copy to: Barclays Bank PLC – Legal Department

745 Seventh Avenue, 20th Floor

New York, New York 10019

Telephone: (212) 412-1494

Facsimile: (212) 412-1288

Barclays Capital – Operations

700 Prides Crossing

Newark, Delaware 19713

Attention: Brian Kevil

Telephone: (302) 286-1951

Facsimile: (646) 845-6464

Email: brian.kevil@barclays.com

if to Agent: Barclays Bank PLC – Mortgage Finance

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Ellen Kiernan

Telephone: (212) 412-7990

Facsimile: (212) 412-7333

E-mail: ellen.kiernan@barclays.com

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with a copy to: Barclays Bank PLC – Legal Department

745 Seventh Avenue, 20th Floor

New York, New York 10019

Telephone: (212) 412-1494

Facsimile: (212) 412-1288

Barclays Capital – Operations

700 Prides Crossing

Newark, Delaware 19713

Attention: Brian Kevil

Telephone: (302) 286-1951

Facsimile: (646) 845-6464

Email: brian.kevil@barclays.com

or to such other address, e-mail address or facsimile number as either party may notify to the others in writing from time to time.


35.	CONFIDENTIALITY

Seller, Purchaser and Agent each hereby acknowledge and agree that all written or computer-readable information provided by one party to the other in connection with the Program Documents or the Transactions contemplated thereby, including without limitation, Seller’s Mortgagor information in the possession of Purchaser (the “ Confidential Terms ”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other party except for (i) disclosure to Seller’s direct and indirect parent companies, directors, attorneys, agents or accountants, provided that such attorneys or accountants likewise agree to be bound by this covenant of confidentiality, or are otherwise subject to confidentiality restrictions or (ii) with prior (if feasible) written notice to Purchaser, disclosure required by law, rule, regulation or order of a court or other regulatory body or (iii) with prior (if feasible) written notice to Purchaser, disclosure to any approved hedge counterparty to the extent necessary to obtain any Hedge Instrument hereunder or (iv) with prior (if feasible) written notice to Purchaser, any disclosures or filing required under Securities and Exchange Commission (“ SEC ”) or state securities’ laws; provided that Seller may file a version of the Pricing Side Letter that is redacted to omit the related pricing information (as mutually agreed to by Seller and Purchaser) and shall submit a request (together with an unredacted version of the Pricing Side Letter) with the SEC and each applicable state securities office to keep such pricing information confidential. In the event that the SEC or applicable state securities office rejects such confidentiality request with respect to the Pricing Side Letter, Seller may file an unredacted version of the Pricing Side Letter with the SEC and any applicable state securities office, as applicable. Notwithstanding anything herein to the contrary, except as reasonably necessary to comply with applicable securities laws, each party (and each employee, representative, or other agent of each party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure. For this purpose, tax treatment and tax structure shall not include (i) the identity of any existing or future party (or any Affiliate of such party) to this Agreement or (ii) any specific pricing information or other commercial terms, including the amount of any fees, expenses, rates or payments arising in connection with the transactions contemplated by this Agreement.

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Notwithstanding anything in this Agreement to the contrary, Seller, Purchaser and Agent shall comply with all applicable local, state and federal laws, including, without limitation, all privacy and data protection law, rules and regulations that are applicable to the Purchased Assets and/or any applicable terms of this Agreement, including information relating to any Mortgage Loan that is not purchased hereunder and information relating to any other Mortgage Loans of Seller that is delivered to Purchaser or Agent by another lender under an intercreditor agreement or other agreement (the “Confidential Information”). Seller, Purchaser and Agent understand that the Confidential Information may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the “GLB Act”), and each agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the GLB Act and other applicable federal and state privacy laws. Seller, Purchaser and Agent shall each implement such physical and other security measures as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information” of the “customers” and “consumers” (as those terms are defined in the GLB Act) of such party or any Affiliate of such party which that party holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Seller, Purchaser and Agent shall, at a minimum establish and maintain such data security program as is necessary to meet the objectives of the Interagency Guidelines Establishing Standards for Safeguarding Customer Information as set forth in the Code of Federal Regulations at 12 C.F.R. Parts 30, 208, 211, 225, 263, 308, 364, 568 and 570. Upon request, Seller, Purchaser or Agent, as applicable will provide evidence reasonably satisfactory to allow the requesting party to confirm that the non-requesting party has satisfied its obligations as required under this Section. Without limitation, this may include the requesting party’s review of audits, summaries of test results, and other equivalent evaluations of the non-requesting party. Seller, Purchaser and Agent each shall notify the other immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of the non-notifying party or any Affiliate of the non-notifying party provided directly to the notifying party by the non-notifying party or such Affiliate. The notifying party shall provide such notice to the non-notifying party by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual.


36.	DUE DILIGENCE

Purchaser, Agent, Verification Agent or any of their respective agents, representatives or permitted assigns shall have the right, upon reasonable prior notice and during normal business hours, to conduct inspection and perform continuing due diligence reviews of (x) Seller and Guarantor, including, without limitation, their respective financial condition and performance of its obligations under the Program Documents, and (y) the Servicing File and the Purchased Assets (including, but not limited to, any documentation related to Seller’s FHA servicing practices), and Seller agrees promptly to provide Purchaser, Agent, Verification Agent and their respective agents with access to, copies of and extracts from any and all documents, records, agreements, instruments or information (including, without limitation, any of the foregoing in computer data banks and computer software systems) relating to Seller’s respective business, operations, servicing, financial condition, performance of their obligations under the Program Documents, the documents contained

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in the Servicing Files or the Purchased Assets or assets proposed to be sold hereunder in the possession, or under the control, of Seller. In addition, Seller shall also make available to Purchaser, Agent and/or Verification Agent, upon reasonable prior notice and during normal business hours, a knowledgeable financial or accounting officer of Seller for the purpose of answering questions respecting any of the foregoing. Without limiting the generality of the foregoing, Seller acknowledges that Purchaser shall enter into transactions with Seller based solely upon the information provided by Seller to Purchaser and/or Agent and the representations, warranties and covenants contained herein, and that Purchaser, Agent and/or Verification Agent, at its option, shall have the right at any time to conduct itself or through its agents, or require Seller to conduct quality reviews and underwriting compliance reviews of the individual Mortgage Loans at the expense of Seller. Any such diligence conducted by Purchaser, Agent and/or Verification Agent shall not reduce or limit the Seller’s representations, warranties and covenants set forth herein. Seller agrees to reimburse Purchaser, Agent and/or Verification Agent for all reasonable out-of-pocket due diligence costs and expenses incurred pursuant to this Section 36 .


37.	USA PATRIOT ACT; OFAC AND ANTI-TERRORISM

Seller hereby represents and warrants to Purchaser and Agent, and shall on and as of the Purchase Date for any Transaction and on and as of each date thereafter through and including the related Repurchase Date be deemed to represent and warrant to Purchaser and Agent that:

(a) Each of Purchaser and Agent hereby notifies the Seller that pursuant to the requirements of the USA PATRIOT Improvement and Reauthorization Act, Title III of Pub. L. 109-177 (signed into law March 9, 2009) (the “ Act ”), it is required to obtain, verify, and record information that identifies the Seller, which information includes the name and address of the Seller and other information that will allow each of Purchaser and Agent, as applicable, to identify the Seller in accordance with the Act.

(b) (i) Neither the Seller, nor the Parent Company nor any Originator is named on the list of Specifically Designated Nationals maintained by OFAC or any similar list issued by OFAC (collectively, the “ OFAC Lists ”); (ii) no Person on the OFAC Lists owns a 50% or greater interest in, directly or indirectly, or otherwise controls, the Seller, the Parent Company or any Originator; and (iii) to the best of the knowledge of the Seller or any Originator, none of Purchaser or Agent is precluded, under the laws and regulations administered by OFAC, from entering into this Agreement or any transactions pursuant to this Agreement with the Seller or any Originator due to the ownership or control by any person or entity of stocks, shares, bonds, debentures, notes, drafts or other securities or obligations of the Seller or any Originator.

(c) (i) Neither the Seller nor any Originator will conduct business with or engage in any transaction with any Obligor that the Seller or any Originator knows or should reasonably be expected to know that (x) is named on any of the OFAC Lists or (y) 50% or greater of the equity interests in such Obligor are owned by a Person named on any OFAC List; (ii) if any of the Seller or any Originator obtains actual knowledge or should reasonably be expected to know that any Obligor is named on any of the OFAC Lists or that any Person named on an OFAC List owns a 50% or greater interest in an Obligor, the Seller or any Originator, as applicable, will give prompt written notice to Purchaser and Agent of such fact or facts; and (iii) the Seller and any Originator will (x) comply at all times with the requirements of the Economic and Trade Sanctions and Anti-Terrorism Laws applicable to any transactions, dealings or other actions relating to this Agreement, except to the extent such non-compliance does not result in a violation of applicable law by any of Purchaser or Agent and (y) will, upon Purchaser’s or Agent’s reasonable request from time to time

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during the term of this Agreement, deliver a certification confirming its compliance with the covenants set forth in this Section 37 .


38.	JOINT AND SEVERAL LIABILITY OF SELLERS

(a) Each of REO Subsidiary and RMS shall be jointly and severally liable for the rights, covenants, obligations and warranties and representations of REO Subsidiary and RMS as contained herein and the actions of any Person or third party shall in no way affect such joint and several liability.

(b) Notwithstanding the forgoing, each Seller acknowledges and agrees that a Default or an Event of Default is hereby considered a Default or an Event of Default by each Seller.

(c) Each of REO Subsidiary and RMS acknowledges and agrees that the Purchaser and Agent shall have no obligation to proceed against either REO Subsidiary or RMS before proceeding against the other. Each of REO Subsidiary and RMS hereby waives any defense to its obligations under this Agreement or any other Program Document based upon or arising out of the disability or other defense or cessation of liability of REO Subsidiary or RMS versus the other. A Seller’s subrogation claim arising from payments to Purchaser or Agent shall constitute a capital investment in another Seller (1) subordinated to any claims of Purchaser or Agent, as applicable, and (2) equal to a ratable share of the equity interests in such Seller.


39.	EXECUTION IN COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. The parties agree that this Agreement, any documents to be delivered pursuant to this Agreement and any notices hereunder may be transmitted between them by email and/or by facsimile. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties. The original documents shall be promptly delivered, if requested.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, each Seller, Purchaser and Agent have caused their names to be signed to this Master Repurchase Agreement by their respective officers thereunto duly authorized as of the date first above written.

REVERSE MORTGAGE SOLUTIONS, INC.,
as a Seller

By: /s/ Cheryl Collins
Name: Cheryl A. Collins
Title: SVP & Treasurer

RMS REO BRC, LLC

as a Seller

By: /s/ Cheryl Collins
Name: Cheryl Collins
Title: Manager

SUTTON FUNDING LLC, as Purchaser

By: /s/ Ellen Kiernen

Name: Ellen Kiernen

Title: Vice President

BARCLAYS BANK PLC, as Agent

By: /s/ Arvind Mohan
Name: Arvind Mohan
Title: Director

EXHIBIT A

MONTHLY CERTIFICATION

I, _______________________, _______________________ of [Reverse Mortgage Solutions, Inc.][RMS REO BRC, LLC] (“ Seller ”), in accordance with that certain Master Repurchase Agreement (“ Agreement ”), dated September 29, 2015 (but effective as of October 15, 2015), by and among Barclays Bank PLC, Sutton Funding LLC, [Reverse Mortgage Solutions, Inc.][RMS REO BRC, LLC] and Seller do hereby certify that:


(i)	To the best of my knowledge, no Default or Event of Default has occurred and is continuing[; and


(ii)	RMS has complied with each of the covenants set forth in Section 14(g)(ii), as evidenced by the worksheet attached hereto as Schedule One .]

[Signature Page Follows]

Capitalized terms used but not defined herein have the meanings assigned thereto in the Agreement.

IN WITNESS WHEREOF, I have signed this certificate.

Date: , 201[ ]

[REVERSE MORTGAGE SOLUTIONS, INC.][RMS REO BRC, LLC]

By:_________________________
Name:
Title:

SCHEDULE ONE TO EXHIBIT A

FINANCIAL COVENANTS WORKSHEET

EXHIBIT B

REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO MORTGAGE LOANS

Capitalized terms used but not defined in this Exhibit B have the meanings assigned to such terms in the Master Repurchase Agreement dated September 29, 2015 (but effective as of October 15, 2015, the “ Agreement ”), by and among Barclays Bank PLC (“ Agent ”), Sutton Funding LLC (“ Purchaser ”), RMS REO BRC, LLC (“ REO Subsidiary ”) and Reverse Mortgage Solutions, Inc. (“ RMS ” and, together with REO Subsidiary, the “ Seller ”). Each Seller hereby represents and warrants to Purchaser and Agent that, for each Mortgage Loan sold by it to the Purchaser as of the related Purchase Date and the related Repurchase Date and on each date that such Mortgage Loan is subject to a Transaction:

All information provided to Purchaser or Agent by such Seller, including without limitation the information set forth in the Seller Mortgage Loan Schedule, with respect to the Mortgage Loan is true and correct in all material respects;

Such Mortgage Loan is an Eligible Mortgage Loan;

Such Mortgage Loan is owned solely by such Seller, is not subject to any lien, claim or encumbrance, including, without limitation, any such interest pursuant to a loan or credit agreement for warehousing mortgage loans, and was originated or acquired by such Seller, underwritten and serviced in Strict Compliance and has at all times remained in compliance with all applicable laws and regulations, including without limitation the Federal Truth-in-Lending Act, the Real Estate Settlement Procedures Act, regulations issued pursuant to any of the aforesaid, and any and all rules, requirements, guidelines and announcements of the Agency and the FHA, as the same may be amended from time to time;

The improvements on the land securing such Mortgage Loan are and will be kept insured at all times by responsible insurance companies reasonably acceptable to Purchaser and the Agency against fire and extended coverage hazards under policies, binders or certificates of insurance with a standard mortgagee clause in favor of such Seller or the Nominee and its assigns, providing that such policy may not be canceled without prior notice to the applicable Seller. Any proceeds of such insurance shall be held in trust for the benefit of Purchaser. The scope and amount of such insurance shall satisfy the rules, requirements, guidelines and announcements of the Agency, and shall in all cases be at least equal to the lesser of (A) the principal amount of such Mortgage Loan or (B) the maximum amount permitted by applicable law, and shall not be subject to reduction below such amount through the operation of a coinsurance, reduced rate contribution or similar clause;

Each Mortgage is a valid first lien on the Mortgaged Property and is covered by an attorney’s opinion of title acceptable to the Agency or by a policy of title insurance on a standard ALTA or similar lender’s form in favor of the applicable Seller or the Nominee and its assigns, subject only to exceptions permitted by the applicable Agency Program. The applicable Seller or the Nominee shall hold for the benefit of Purchaser such policy of title insurance and, upon request of Purchaser, shall immediately deliver such policy to Purchaser or to the Custodian on behalf of Purchaser;

Such Mortgage Loan is insured by the FHA under the National Housing Act and is not subject to any defect that would prevent recovery in full or in part against the FHA;

[Reserved];

There are no restrictions, contractual or governmental, which would impair the ability of RMS or Servicer from servicing the Mortgage Loans;

The original Mortgage in respect of each Mortgage Loan has been sent for recordation in the appropriate public recording office in the applicable jurisdictions wherein such recordation is necessary to perfect the lien thereof as against creditors of the applicable Mortgagor;

The Mortgagor is one or more natural persons and/or trustees for an Illinois land trust or a trustee under a “living trust” and such “living trust” is in compliance with the Agency’s guidelines for such trusts;

[Reserved];

No predatory, abusive or deceptive lending practices, including but not limited to, the extension of credit to a Mortgagor that has no tangible net benefit to the Mortgagor, were employed in connection with the origination of the Mortgage Loan;

[Reserved];

If such Mortgage Loan was pledged to another warehouse, credit, repurchase or other financing facility immediately prior to the related Purchase Date, (i) such pledge has been released immediately prior to, or concurrently with, the related Purchase Date hereunder and (ii) Purchaser and Agent have received a Warehouse Lender’s Release Letter in respect of such Mortgage Loan;

Such Mortgage Loan has not been released from the possession of the Custodian, under Section 5 of the Custodial Agreement, to the applicable Seller for a period in excess of fifteen (15) calendar days (or if such fifteenth day is not a Business Day, the next succeeding Business Day) or such earlier time period as indicated on the related Request for Release of Documents, unless such Mortgage Loan has been released pursuant to an Attorney Bailee Letter (as defined in the Custodial Agreement);

Such Mortgage Loan has not been selected in a manner so as to adversely affect Purchaser’s interests;

[Reserved];

Except as allowable under the FHA HECM program, each Mortgage Loan has no future disbursement obligation and is secured by a first lien on an underlying property;

Final proceeds in respect of a sales-based claim have not been received by the date such proceeds are required to be received;

The Mortgage Loan is not secured by property located in (a) a state where the applicable Seller is not licensed as a lender/mortgage banker if such licensing is required or (b) a state that the Purchaser determines to be unacceptable, and provides thirty (30) days’ written notice to the applicable Seller because of a predatory lending or other law in such state;

[Reserved]; and

The Mortgage Loan relates to Mortgaged Property that consists of (i) a detached single family dwelling, (ii) a two-to-four family dwelling, (iii) a one-family dwelling unit in a condominium project, (iv) a townhouse, or (v) a detached single family dwelling in a planned unit development none of which is a cooperative or commercial property; and is not related to Mortgaged Property that consists of (a) mixed use properties, (b) earthen homes, (c) underground homes or (d) any dwelling situated on a leasehold estate.

EXHIBIT C

FORM OF TRANSACTION NOTICE

[insert date]

Barclays Bank PLC

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Ellen Kiernan

Sutton Funding LLC
2711 Centreville Road, Suite 400
Wilmington, Delaware 19808
Attention: Glenn Pearson


Re:	Master Repurchase Agreement, dated September 29, 2015 (but effective as of October 15, 2015) by and among Barclays Bank PLC (“ Agent ”), Sutton Funding LLC (“Purchaser”), RMS REO BRC, LLC [(“Seller”)] and Reverse Mortgage Solutions, Inc. [(“Seller”)]

Ladies/Gentlemen:

Reference is made to the above-referenced Master Repurchase Agreement (the “ Repurchase Agreement ”; capitalized terms used but not otherwise defined herein have the meanings given them in the Repurchase Agreement).

In accordance with Section 3(c) of the Repurchase Agreement, the undersigned Seller hereby requests, and Purchaser agrees, to enter into a Transaction in connection with our delivery of Eligible Assets and all related Servicing Rights, on ____________________ [insert requested Purchase Date, which must be at least one (1) Business Day following the date of the request] (the “ Purchase Date ”), in connection with which we shall sell to you such Eligible Assets on the Seller Mortgage Loan Schedule attached hereto. The Principal Balance of the Eligible Assets is $________ and the Purchase Price to be paid by Purchaser for such Eligible Assets shall be ______ [insert applicable Purchase Price]. Purchaser shall transfer to the Seller an amount equal to $ _______ [insert amount which represents the Purchase Price of the Eligible Assets net of any related Initial Fee or any other fees then due and payable by Seller to Purchaser pursuant to the Agreement]. Seller agrees to repurchase such Purchased Asset on the Repurchase Date(s) at the Repurchase Price(s) set forth in the spreadsheet attached hereto as Schedule 1.

The Eligible Mortgage Loans have the characteristics on the electronic file or computer tape or disc delivered by Seller to Purchaser with respect thereto in connection with this Transaction Notice.

The Seller hereby certifies, as of such Purchase Date, that:

(1) no Default or Event of Default has occurred and is continuing on the date hereof (or to the extent existing, shall be cured after giving effect to such Transaction) nor will occur after giving effect to such Transaction as a result of such Transaction;

(2) each of the representations and warranties made by the Seller and Guarantor in or pursuant to the Program Documents is true and correct in all material respects on and as of such date as if made on and as of the date hereof (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

(3) the Seller is in compliance with all governmental licenses and authorizations and is qualified to do business and is in good standing in all required jurisdictions, except as would not be reasonably likely to have a Material Adverse Effect;

(4) RMS has all requisite Approvals; and

(5) the Seller has satisfied all applicable conditions precedent in Sections 10(a) and (b) of the Repurchase Agreement and all other requirements of the Program Documents.

The undersigned duly authorized officer of Seller further represents and warrants that (1) with respect to the applicable Eligible Mortgage Loans, the documents constituting the Mortgage Files (as defined in the Custodial Agreement) (the “ Receipted Assets ”), have been or are hereby submitted to Custodian and such required documents are to be held by the Custodian for Purchaser, (2) all other documents related to such Receipted Assets (including, but not limited to, mortgages, insurance policies, loan applications and appraisals) have been or will be created and held by Seller for Purchaser, (3) all documents related to such Receipted Assets withdrawn from Custodian shall be held by Seller for Purchaser, and (4) upon Purchaser’s wiring of the Purchase Price pursuant to Section 3(b) of the Repurchase Agreement, Purchaser will have agreed to the terms of the Transaction as set forth herein and purchased the Receipted Assets from the Seller.

Seller hereby represents and warrants that (x) the Receipted Assets have a Principal Balance as of the date hereof of $__________ and (y) the number of Receipted Assets is ______.

Very truly yours,

[REVERSE MORTGAGE SOLUTIONS, INC.][RMS REO BRC, LLC]

By:
Name:
Title:

SCHEDULE 1 TO TRANSACTION NOTICE

LIST OF REPURCHASE PRICES AND REPURCHASE DATES

[SEE ATTACHMENT]

EXHIBIT D

FORM OF GOODBYE LETTER

«Primary_Borrower» [_______] [__], 201[ ]

«Mailing_address_line_1»

«Mail_city», «Mail_state» «Mail_zip»

RE: Transfer of Mortgage Loan Servicing

Mortgage Loan «Account_number»

Dear Customer:

Reverse Mortgage Solutions, Inc. is the present servicer of your mortgage loan. Effective [Date] the servicing of your mortgage will be transferred to _______. This transfer does not affect the terms and conditions of your mortgage, other than those directly related to servicing. Because of the change in servicer, we are required to provide you with this disclosure.

Reverse Mortgage Solutions, Inc. cannot accept any payments received after [Date]. Effective [Date], all payments are to be made to __________. Any payments received by Reverse Mortgage Solutions, Inc. after [Date] will be forwarded to _________________. ___________________ will be contacting you shortly with payment instructions. Please make future payments to:

________________________

Attn: ___________

[Address]

If you currently make payments by an automatic checking or savings account deduction, that service will discontinue effective with the transfer date. After the servicing transfer, you may request this service from _____________.

In [Date], you will receive a statement from Reverse Mortgage Solutions, Inc. reflecting the amount, if any, of the interest and taxes paid on your behalf in 201[ ]. A similar statement will be sent __________________ for the period beginning [Date] through year-end. Both statements must be added together for income tax purposes.

If you have any questions concerning your account through [Date], you should continue to contact Reverse Mortgage Solutions, Inc., at <Seller’s Phone Number>, <HOURS OF OPERATION>. Questions after the transfer date should be directed to ___________________Customer Service Department at 1‑800-_____________, Monday – Friday, 7 a.m. – 7 p.m. EST.

Sincerely,

Loan Servicing Department

Reverse Mortgage Solutions, Inc.

NOTICE OF ASSIGNMENT, SALE OR TRANSFER

OF SERVICING RIGHTS

You are hereby notified that the servicing of your mortgage loan, that is the right to collect payments from you, is being assigned, sold or transferred.

The assignment, sale or transfer of the servicing of the mortgage loan does not affect any term or condition of the mortgage instruments, other than the terms directly related to the servicing of your loan.

Except in limited circumstances, the law requires that your present servicer send you a notice at least 15 days before the effective date, or at closing. Your new servicer must also send you this notice no later than 15 days after this effective date.

This notification is a requirement of Section 6 of the Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. 2605). You should also be aware of the following information, which is set out in more detail in Section 6 of RESPA (12 U.S.C. 2605).

During the 60 day period following the effective date of the transfer of the loan servicing, a loan payment received by your old servicer before its due date may not be treated by the new loan servicer as late, and a late fee may not be imposed upon you.

Section 6 of RESPA (12 U.S.C. 2605) gives you certain consumer rights. If you send a “qualified written request” to your loan servicer concerning the servicing of your loan, your servicer must provide you with a written acknowledgement within 20 Business Days of receipt of your request. A “qualified written request” is written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, which includes your name and account number and your reasons for the request. If you want to send a “qualified written request” regarding the servicing of your loan, it must be sent to this address:

___________________

[Address]

No later than 60 Business Days after receiving your request, your servicer must make any appropriate corrections to your account, and must provide you with a written clarification regarding any dispute. During this 60 Business Day period, your servicer may not provide information to a consumer reporting agency concerning any overdue payment related to such period or qualified written request. However, this does not prevent the servicer from initiating foreclosure if proper grounds exist under the mortgage documents.

A Business Day is any day excluding legal public holidays (State or federal), Saturday and Sunday.

Section 6 of RESPA also provides for damages and costs for individuals or classes of individuals, in circumstances where servicers are shown to have violated the requirements of that Section. You should seek legal advice if you believe your rights have been violated.

MIRANDA DISCLOSURE – For your protection, please be advised that we are attempting to collect a debt and any information obtained will be used for that purpose. Calls will be monitored and recorded for quality assurance purposes. If you do not wish for your call to be recorded please notify the customer service associate when calling.

BANKRUPTCY INSTRUCTION – Attention to any customer in Bankruptcy or who has received a bankruptcy discharge of this debt. Please be advised that this letter constitutes neither a demand for payment of the captioned debt nor a notice of personal liability to any recipient hereof who might have received a discharge of such debt in accordance with applicable bankruptcy laws or who might be subject to the automatic stay of Section 362 of the United States Bankruptcy Code. However, it may be a notice of possible enforcement of our lien against the collateral property, which has not been discharged in your bankruptcy.

EXHIBIT E

FORM OF WAREHOUSE LENDER’S RELEASE

(Date)

Sutton Funding LLC
2711 Centreville Road, Suite 400

Wilmington, Delaware 19808

Attention: Glenn Pearson

Barclays Bank PLC – Mortgage Finance

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Ellen Kiernan

Barclays Bank PLC – Legal Department

745 Seventh Avenue, 20th Floor

New York, New York 10019

Barclays Capital – Operations

700 Prides Crossing

Newark, Delaware 19713

Attention: Brian Kevil

Reverse Mortgage Solutions, Inc.

2727 Spring Creek Drive

Spring, Texas 77373

Re: Certain Assets Identified on Schedule A hereto and owned by Reverse Mortgage Solutions, Inc.

Capitalized terms used herein but not defined herein have the meanings ascribed to such terms in the Master Repurchase Agreement, dated September 29, 2015 (but effective as of October 15, 2015), among Barclays Bank, PLC, Sutton Funding LLC, RMS REO BRC, LLC and Reverse Mortgage Solutions, Inc.

The undersigned hereby releases all right, interest, lien or claim of any kind with respect to the mortgage loans described in the attached Schedule A , such release to be effective automatically without any further action by any party upon receipt in the account identified below in immediately available funds of $__________________, representing a loan count of _________, in accordance with the following wire instructions:

[ ]

Very truly yours,

[WAREHOUSE LENDER]

By:
Name:
Title:

[SCHEDULE A TO EXHIBIT E – LIST OF ASSETS TO BE RELEASED]

EXHIBIT F

[RESERVED]

EXHIBIT G

[RESERVED]

EXHIBIT H

FORM OF SELLER MORTGAGE LOAN SCHEDULE

[To be provided by Seller.]

- 62 -

Exhibit 10.22.2

EXECUTION VERSION

GUARANTY

This GUARANTY (as the same may be amended, restated, supplemented or otherwise modified from time to time, this “ Guaranty ”), dated September 29, 2015, but effective as of October 15, 2015, is by Walter Investment Management Corp., a Maryland corporation (“ Guarantor ”).

WHEREAS, Guarantor is furnishing its guaranty of the Guaranteed Obligations (as hereinafter defined) in order to induce the Purchaser to purchase certain Eligible Mortgage Loans under the Master Repurchase Agreement (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Master Repurchase Agreement ”), dated September 29, 2015 (but effective as of October 15, 2015), among Reverse Mortgage Solutions, Inc. (“ RMS ”), RMS REO BRC, LLC (“ REO Subsidiary ” and, together with RMS, the “ Sellers ”), Barclays Bank PLC (the “ Agent ”) and Sutton Funding LLC (the “ Purchaser ”).

Capitalized terms not otherwise defined herein are used herein with the same meanings given to such terms in the Master Repurchase Agreement.

Therefore, for good and valuable consideration, the receipt of which is hereby acknowledged by Guarantor, the parties hereto agree as follows:

SECTION 1. Guarantee .

(a) Guarantor unconditionally and irrevocably guarantees to the Purchaser and the Agent the due and punctual payment by, and performance of, the Obligations (as defined in the Master Repurchase Agreement) by Sellers arising under or in connection with the Program Documents (the “ Guaranteed Obligations ”). Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and it will remain bound upon this Guaranty notwithstanding any extension or renewal of any Guaranteed Obligation. Anything contained herein to the contrary notwithstanding, the obligations of Guarantor hereunder at any time shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code (Title 11, United States Code) or any comparable provisions of any similar federal or state law.

(b) Guarantor, to the extent permitted by applicable law, waives presentation to, demand for payment from and protest to any Seller, and also waives notice of protest for nonpayment, notice of acceleration and notice of intent to accelerate. The obligations of the Guarantor hereunder shall not be affected by (i) the failure of the Agent or any Purchaser to assert any claim or demand or to enforce any right or remedy against any Seller under the provisions of the Program Documents or any other agreement or otherwise; (ii) any extension or renewal of any provision hereof or thereof; (iii) any rescission, waiver, compromise, acceleration, amendment or modification of any of the terms or provisions of the Program Documents or of any other agreement; (iv) the release, exchange, waiver or foreclosure of any security held by the Agent or any Purchaser for the Guaranteed Obligations or any of them or (v) the failure of the Agent or any Purchaser to exercise any right or remedy against any other guarantor of the Guaranteed Obligations.

(c) Guarantor further agrees that this Guaranty constitutes a guaranty of performance and of payment when due and not just of collection, and waives, to the extent permitted by applicable law, any right to require that any resort be had by the Agent or any Purchaser to any security held for payment of the Guaranteed Obligations or to any balance of any deposit, account or credit on the books of the Agent in favor of Sellers or to any other Person.

(d) Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of Sellers and any and all endorsers and/or other guarantors of all or any part of the Guaranteed Obligations, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations, or any part thereof, that diligent inquiry would reveal, and Guarantor hereby agrees that the Agent shall have no duty to advise Guarantor of information known to it regarding such condition or any such circumstances. In the event the Agent, in its sole discretion, undertakes at any time or from time to time to provide any such information to Guarantor, the Agent shall be under no obligation (i) to undertake any investigation not a part of its regular business routine, (ii) to disclose any information which the Agent, pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (iii) to make any other or future disclosures of such information or any other information to Guarantor.

(e) This guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Guaranteed Obligations, the Program Documents or any other instrument evidencing any of the Guaranteed Obligations, or by the existence, validity, enforceability, perfection, or extent of any collateral therefore or by any other circumstance relating to the Guaranteed Obligations which might otherwise constitute a defense to this Guaranty. Neither the Purchaser nor the Agent makes any representation or warranty in respect to any such circumstances or has any duty or responsibility whatsoever to Guarantor in respect to the management and maintenance of the Guaranteed Obligations or any collateral which may secure the Guaranteed Obligations.

SECTION 2. No Impairment of Guaranty . The obligations of Guarantor hereunder shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:

(a) any extension, renewal, settlement, indulgence, compromise, claim, waiver, release, surrender, of or with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto, whether (in any such case) by operation of law or otherwise, or any failure or omission to enforce any right, power or remedy with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto;

(b) any modification, amendment or restatement of or supplement to the Program Documents or any other instrument or document delivered in connection therewith, including, without limitation, any such amendment which may increase the amount of, or the interest rates applicable to, any of the Guaranteed Obligations guaranteed hereby;

(c) any release, surrender, compromise, settlement, waiver, subordination or modification, with or without consideration, of any collateral securing the Guaranteed Obligations or any part thereof, or any other obligation of any person or entity with respect to the Guaranteed

Obligations or any part thereof, or any nonperfection or invalidity of any direct or indirect security for the Guaranteed Obligations;

(d) any change in the corporate, partnership or other existence, structure or ownership of a Seller, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting a Seller, or any of their respective assets or any resulting release or discharge of any obligation of a Seller;

(e) the existence of any setoff, claim, counterclaim, recoupment, termination or other rights which Guarantor may have at any time against a Seller or any other person, whether in connection herewith or in connection with any unrelated transactions; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;

(f) the enforceability or validity of the Guaranteed Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to any collateral securing the Guaranteed Obligations or any part thereof, or any other invalidity or unenforceability relating to or against a Seller for any reason related to the Program Documents, or any provision of applicable law, decree, order or regulation of any jurisdiction purporting to prohibit the payment by a Seller of any of the Guaranteed Obligations or otherwise affecting any term of any of the Guaranteed Obligations;

(g) the failure of the Agent or any Purchaser to take any steps to perfect and maintain any security interest in, or to preserve any rights to, any security or collateral for the Guaranteed Obligations, if any;

(h) the election by, or on behalf of the Agent or any Purchaser, in any proceeding instituted under Chapter 11 of Title 11 of the United States Code (11 U.S.C. 101 et. seq.) (the “ Bankruptcy Code ”), of the application of Section 1111(b)(2) of the Bankruptcy Code;

(i) any borrowing or grant of a security interest by a Seller, as debtor-in-possession, under Section 364 of the Bankruptcy Code;

(j) the disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of the claims of the Agent for repayment of all or any part of the Guaranteed Obligations; or

(k) any other act or omission to act or delay of any kind by a Seller, willful or otherwise, the Agent or any other person or any other circumstance whatsoever which might, but for the provisions of this Section 2 , constitute a legal or equitable discharge of Guarantor’s obligations hereunder.

SECTION 3. Continuation and Reinstatement, etc .

(a) Guarantor further agrees that its guaranty hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by the Agent upon the bankruptcy or other reorganization of a Seller or otherwise. In furtherance of the provisions of

this Guaranty, and not in limitation of any other right which the Agent may have at law or in equity against a Seller by virtue hereof, upon failure of a Seller to pay any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice or otherwise, Guarantor hereby promises to and will, upon receipt of written demand by the Agent, forthwith pay or cause to be paid to the Agent in cash an amount equal to the unpaid amount of all such Guaranteed Obligation, and thereupon the Agent shall assign such Guaranteed Obligation, together with all security interests, if any, then held by the Agent or Purchaser in respect of such Guaranteed Obligation, to Guarantor.

(b) Upon payment by Guarantor of any sums to the Agent hereunder, all rights of Guarantor against any Seller involved, arising as a result thereof by way of right of subrogation or otherwise, shall in all respects be subordinate and junior in right of payment to the prior final and indefeasible payment in full of all the Guaranteed Obligations (other than unasserted contingent indemnification obligations) to the Agent. If an amount shall be paid to Guarantor for the account of a Seller, such amount shall be held in trust for the benefit of the Agent to be credited and applied to the Guaranteed Obligations, whether matured or unmatured.

SECTION 4. Representation and Warranties . Guarantor makes the following representations and warranties to the Agent, all of which shall survive the execution and delivery of this Guaranty and the issuance and purchase of the Notes:

(a) Guarantor is a corporation duly organized, validly existing and in good standing under the laws the State of Maryland and is in good standing as a foreign corporation in all jurisdictions where the nature of its properties or business so requires, except where the failure to be in good standing in such other jurisdiction would not, in the aggregate, have a Material Adverse Effect. Guarantor has the power and authority to own its properties and carry on its businesses as now being conducted and to execute, deliver and perform its obligations under this Guaranty.

(b) The execution, delivery and performance of this Guaranty (i) have been duly authorized by all necessary limited liability company action on the part of Guarantor, (ii) will not violate any provision of applicable law or any Governmental Approval applicable to Guarantor, (iii) will not violate any provision of the Certificate of Incorporation, Limited Liability Company Agreement or any other operating or organizational document of Guarantor, (iv) will not violate or result in a default under any provision of any indenture, material agreement, bond, note or other similar material instrument to which Guarantor is a party or by which Guarantor or any of its properties or assets are bound, and (v) will not result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any properties or assets of Guarantor.

(c) This Guaranty when executed will constitute the legal, valid and binding obligation of Guarantor, enforceable in accordance with its terms, subject (i) as to the enforcement of remedies, to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and (ii) to general principles of equity.

(d) Guarantor will realize a direct economic benefit as a result of the amounts paid by Purchaser to the Sellers pursuant to the Master Repurchase Agreement.

SECTION 5. Covenants of Guarantor .

(a) The covenants of Guarantor set forth in Sections 6.03, 6.08 and 6.09 of the Syndicated Credit Facility Agreement and the definitions in the Syndicated Credit Facility Agreement relating to such Sections 6.03, 6.08 and 6.09 of the Syndicated Credit Facility Agreement are hereby incorporated herein by reference as if such sections and definitions are fully set forth herein.

(b) For purposes of this Section 5, “Syndicated Credit Facility Agreement” shall mean that certain Amended and Restated Credit Agreement, dated as of December 19, 2013, among Walter Investment Management Corp., Credit Suisse AG and the lenders party thereto, as the same may be amended, supplemented or otherwise modified from time to time.

SECTION 6. General Waivers; Additional Waivers .

(a) General Waivers . To the extent permitted by applicable law, Guarantor irrevocably waives acceptance hereof, presentment, demand or action on delinquency, protest, the benefit of any statutes of limitations and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any person against a Seller or any other person.

(b) Additional Waivers . Notwithstanding anything herein to the contrary, to the extent permitted by applicable law, Guarantor hereby absolutely, unconditionally, knowingly, and expressly waives:

(1) any right it may have to revoke this Guaranty as to future indebtedness or notice of acceptance hereof;

(2) (i) notice of acceptance hereof; (ii) notice of any Transactions, purchases, loans or other financial accommodations made or extended under the Program Documents or the creation or existence of any Guaranteed Obligations; (iii) notice of the amount of the Guaranteed Obligations, subject, however, to Guarantor’s right to make inquiry of the Agent to ascertain the amount of the Guaranteed Obligations at any reasonable time; (iv) notice of any adverse change in the financial condition of a Seller or of any other fact that might increase Guarantor’s risk hereunder; (v) notice of presentment for payment, demand, protest, and notice thereof as to any instruments among the Program Documents; (vi) notice of any Event of Default or Servicing Termination Event; and (vii) all other notices (except if such notice is specifically required to be given to Guarantor hereunder) and demands to which Guarantor might otherwise be entitled;

(3) its right, if any, to require the Agent to institute suit against, or to exhaust any rights and remedies which the Agent has or may have against any third party, or against any collateral provided by any third party. In this regard, Guarantor agrees that it is bound to the payment of each and all Guaranteed Obligations, whether now existing or hereafter arising, as fully as if the Guaranteed Obligations were directly owing to the Agent by Guarantor. Guarantor further waives any defense arising by reason of any disability or other defense (other than the defense that the

Guaranteed Obligations shall have been fully and finally performed and indefeasibly paid) of Guarantor in respect thereof;

(4) (i) any rights to assert against the Agent or Purchaser any defense (legal or equitable), set-off, counterclaim, or claim which Guarantor may now or at any time hereafter have against any other party liable to the Agent; (ii) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Guaranteed Obligations or any security therefor; (iii) any defense Guarantor has to performance hereunder, and any right Guarantor has to be exonerated, arising by reason of the alteration by the Agent of the Guaranteed Obligations or the acceptance by the Agent or any Purchaser of anything in partial satisfaction of the Guaranteed Obligations; and (iv) the benefit of any statute of limitations affecting Guarantor’s liability hereunder or the enforcement thereof, and any act which shall defer or delay the operation of any statute of limitations applicable to the Guaranteed Obligations shall similarly operate to defer or delay the operation of such statute of limitations applicable to Guarantor’s liability hereunder; and

(5) any defense arising by reason of or deriving from (i) any claim or defense based upon an election of remedies by the Agent, such as nonjudicial foreclosure; or (ii) any election by the Agent under Section 1111(b) of Title 11 of the United States Code entitled “ Bankruptcy ”, as now and hereafter in effect (or any successor statute), to limit the amount of, or any collateral securing, its claim against Guarantor.

SECTION 7. Notices . Notices and other communication provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or electronic photocopy format sent by electronic mail, to the applicable party at its address set forth below its name on the signature pages of this Guaranty or such other address as shall be designated by such party in a written notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Guaranty shall be deemed to have been given on the fifth Business Day after the date when sent by registered or certified mail, postage prepaid, return receipt requested, if by mail, or upon receipt by such party, if by any electronic or facsimile communications equipment, in each case addressed to such party as provided herein or in accordance with the latest unrevoked written direction from such party.

SECTION 8. Successors . Each reference herein to the Purchaser or the Agent shall be deemed to include its successors and permitted assigns (including but not by way of limitation, any assignee of any of the Guaranteed Obligations), in whose favor the provisions of this Guaranty shall inure. Each reference herein to the Guarantor shall be deemed to include its successors and assigns, all of whom shall be bound by the provisions of this Guaranty.

SECTION 9. Stay of Acceleration . If acceleration of the time for payment of any amount payable by a Seller under the Program Documents is stayed upon the insolvency, bankruptcy or reorganization of such Seller, all such amounts otherwise subject to acceleration under the terms of the Program Documents shall nonetheless be payable by the Guarantor hereunder forthwith on demand by the Agent.

SECTION 10. Setoff; No Deductions .

(a) At any time after all or any part of the Guaranteed Obligations have become due and payable (by acceleration or otherwise), the Agent may, without notice to Guarantor and regardless of the acceptance of any security or collateral for the payment hereof, appropriate and apply in accordance with the terms of the Program Documents toward the payment of all or any part of the Guaranteed Obligations (i) any indebtedness due or to become due from the Agent to Guarantor, and (ii) any moneys, credits or other property belonging to Guarantor, at any time held by or coming into the possession of the Agent or any of its affiliates.

(b) Guarantor represents and warrants that it is organized and resident in the United States of America. Guarantor shall make all payments hereunder without setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless Guarantor is compelled by law to make such deduction or withholding, in which case Guarantor shall pay such additional amount as may be required so that Purchaser receives a net amount equal to the amount it would have received under this Guaranty as if no such deduction or withholding had been made.

SECTION 11. SERVICE OF PROCESS . GUARANTOR (I) HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE

COURTS OF THE STATE OF NEW YORK AND TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED UPON THIS GUARANTY, OR THE SUBJECT MATTER HEREOF BROUGHT BY THE AGENT, THE PURCHASER OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS AND (II) HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS GUARANTY OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (III) HEREBY AGREES NOT TO ASSERT ANY OFFSETS OR COUNTERCLAIMS (OTHER THAN COMPULSORY COUNTERCLAIMS) IN ANY SUCH ACTION, SUIT OR PROCEEDING. GUARANTOR HEREBY CONSENTS TO SERVICE OF PROCESS BY CERTIFIED MAIL AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES OF THIS GUARANTY, AND AGREES THAT THE SUBMISSION TO JURISDICTION AND THE CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE AGENT AND THE PURCHASER. FINAL JUDGMENT AGAINST GUARANTOR IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN OTHER JURISDICTIONS (X) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND OF THE AMOUNT OF ANY INDEBTEDNESS OR LIABILITY OF GUARANTOR THEREIN DESCRIBED OR (Y) IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF SUCH OTHER JURISDICTION; PROVIDED , HOWEVER , THAT THE AGENT OR THE PURCHASER MAY AT ITS OPTION BRING SUIT OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST GUARANTOR OR ANY OF ITS ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE GUARANTOR OR SUCH ASSETS MAY BE FOUND.

SECTION 12. GOVERNING LAW . THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.

SECTION 13. No Waiver, etc. Neither a failure nor a delay on the part of the Agent or Purchaser in exercising any right, power or privilege under this Guaranty shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Agent or Purchaser herein

expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which the Agent or Purchaser may have under this Guaranty, at law, in equity, by statute, or otherwise.

SECTION 14. Modification, etc. No modification, amendment or waiver of any provision of this Guaranty, nor the consent to any departure by Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on Guarantor in any case shall entitle Guarantor to any other or further notice or demand in the same, similar or other circumstances.

SECTION 15. Severability . If any one or more of the provisions contained in this Guaranty should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall in no way be affected or impaired thereby.

SECTION 16. Headings . Section headings used herein are for convenience of reference only and are not to affect the construction of, or be taken into consideration in interpreting, this Guaranty.

SECTION 17. Expenses . Guarantor shall pay on demand all reasonable and documented out-of-pocket expenses (including attorneys’ fees) in any way relating to the enforcement or protection of the Purchaser’s or the Agent’s rights under this Guaranty or in respect of the Guaranteed Obligations, including any incurred during any “workout” or restructuring in respect of the Guaranteed Obligations and any incurred in the preservation, protection or enforcement of any rights of the Lender in any insolvency proceeding. The obligations of Guarantor under this paragraph shall survive the payment in full of the Guaranteed Obligations and termination of this Guaranty.

SECTION 18. Indemnification and Survival . Without limitation on any other obligations of Guarantor or remedies of the Agent or Purchaser (each such Person being called an “ Indemnitee ”) under this Guaranty, Guarantor shall, to the fullest extent permitted by law, indemnify, defend and save and hold harmless the Agent and Purchaser from and against, and shall pay on demand, any and all damages, losses, liabilities and expenses (including attorneys’ fees) that may be suffered or incurred by the Agent or Purchaser in connection with or as a result of any failure of any Guaranteed Obligations to be the legal, valid and binding obligations of the Sellers enforceable against the Sellers in accordance with their terms; provided that such indemnity shall not be available, as to any Indemnitee, to the extent that such damages, losses, liabilities and expenses resulted from the gross negligence or willful misconduct of such Indemnitee. The obligations of Guarantor under this paragraph shall survive the payment in full of the Guaranteed Obligations and termination of this Guaranty.

SECTION 19. WAIVER OF JURY TRIAL . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE PURCHASER, THE AGENT AND GUARANTOR HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM,

DEMAND, ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS GUARANTY OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE AGENT THAT THE PROVISIONS OF THIS SECTION 19 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE AGENT HAS RELIED, IS RELYING AND WILL RELY IN ENTERING INTO THIS GUARANTY. GUARANTOR MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 19 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF AGENT TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY. THE AGENT OR THE PURCHASER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 19 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF GUARANTOR TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.

SECTION 20. Obligations Independent . The obligations of Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Guaranteed Obligations. A separate action may be brought against Guarantor to enforce this Guaranty whether or not a Seller or any other person or entity is joined as a party.

[Signature Pages Follow]

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed by its duly authorized officer as of the date first written above.

WALTER INVESTMENT MANAGEMENT CORP. , as Guarantor

By: /s/ Cheryl Collins

Name: Cheryl A. Collins

Title: SVP & Treasurer

Address for Notices:

3000 Bayport Drive, Suite 1100

Tampa, Florida 33607

[Signatures Continue]

[signature page 1 of 2 to Guaranty]

Acknowledged and Agreed By:

BARCLAYS BANK PLC , as Agent

By: /s/ Joseph O’Doherty

Name: Joseph O’Doherty

Title: Managing Director

Address for Notices:

745 Seventh Avenue, 4th Floor

New York, New York 10019

Attention: Joseph O’Doherty

SUTTON FUNDING LLC , as Purchaser

By: /s/ Ellen Kiernan

Name: Ellen Kiernan

Title: Vice President

Address for Notices:

2711 Centreville Road, Suite 400

Wilmington, Delaware 19808

65037.000103 EMF_US 53563709v7

[signature page 2 of 2 to Guaranty]

Exhibit 10.23.1

EXECUTION

MASTER REPURCHASE AGREEMENT

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as buyer
(“ Buyer ”),

REVERSE MORTGAGE SOLUTIONS, INC., as seller (“ Seller ”),

RMS REO CS, LLC (“ REO Subsidiary ”) and

WILMINGTON SAVINGS FUND SOCIETY, FSB, D/B/A CHRISTIANA TRUST, not in its individual capacity, but solely as trustee for RMS CS REPO TRUST 2016 (“ Transaction Subsidiary ”)

Dated February 23, 2016

LEGAL02/36113760v17

TABLE OF CONTENTS



		Page
1.	Applicability	1
2.	Definitions	2
3.	Program; Initiation of Transactions	21
4.	Repurchase; Conversion to REO Property	22
5.	Price Differential	24
6.	Margin Maintenance	24
7.	Income Payments	25
8.	Security Interest	26
9.	Payment and Transfer	30
10.	Conditions Precedent	31
11.	Program; Costs	34
12.	Servicing	37
13.	Representations and Warranties	38
14.	Covenants	44
15.	Events of Default	50
16.	Remedies Upon Default	53
17.	Reports	56
18.	Repurchase Transactions	58
19.	Single Agreement	59
20.	Notices and Other Communications	59
21.	Entire Agreement; Severability	61
22.	Non assignability	61
23.	Set‑off	61
24.	Binding Effect; Governing Law; Jurisdiction	61
25.	No Waivers, Etc.	62
26.	Intent	62
27.	Disclosure Relating to Certain Federal Protections	63
28.	Power of Attorney	63
29.	Buyer May Act Through Affiliates and Transaction Subsidiary May Act Through Seller	64
30.	Indemnification; Obligations	64
31.	Counterparts	65
32.	Confidentiality	65
33.	Recording of Communications	66
34.	Periodic Due Diligence Review	66
35.	Authorizations	67
36.	Acknowledgement Of Anti‑Predatory Lending Policies	67
37.	Documents Mutually Drafted	67
38.	General Interpretive Principles	68

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LEGAL02/36113760v17



39.	Conflicts	68
40.	Nominee	68
41.	Termination of Agreement	69
42.	Joint and Several	69
43.	Limitation of Liability of Trustee	70

SCHEDULES

Schedule 1-A – Representations and Warranties with Respect to Transaction Mortgage Loans

Schedule 1-B – Representations and Warranties with Respect to REO Subsidiary Interests and Transaction Subsidiary Interests

Schedule 1-C – Representations and Warranties with Respect to REO Property

Schedule 1-D – Representations and Warranties with Respect to Pooled Mortgage Loans


Schedule 2 –	Authorized Representatives

EXHIBITS


Exhibit A –	Form Additional Language to be Included in Transaction Request


Exhibit B –	Form of Trade Assignment


Exhibit C –	Reserved


Exhibit D –	Form of Seller Party Power of Attorney


Exhibit E –	Reserved


Exhibit F –	Reserved


Exhibit G –	Seller’s, REO Subsidiary’s and Transaction Subsidiary’s Tax Identification Number


Exhibit H –	Form of Correspondent Seller Release


Exhibit I –	Form of Addendum to Escrow Instructions to be Provided by Seller Before Closing


Exhibit J –	Form of Servicer Notice

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LEGAL02/36113760v17

This Is A Master Repurchase Agreement, Dated As Of February 23, 2016, By And Among Credit Suisse First Boston Mortgage Capital LLC (The “ Buyer ”), Reverse Mortgage Solutions, Inc. (The “ Seller ”), RMS REO CS, Llc (The “ Reo Subsidiary ”) And Wilmington Savings Fund Society, Fsb, D/B/A Christiana Trust, Not In Its Individual Capacity, But Solely As Trustee For RMS CS REPO TRUST 2016 (the “ Transaction Subsidiary ” and together with the Seller and REO Subsidiary, each a “ Seller Party ” and collectively, the “ Seller Parties ”).

NOW, THEREFORE, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Applicability

On the initial Purchase Date, the Buyer will purchase the Certificates (as defined herein) from the Seller in connection with the Transaction on such date, with a simultaneous agreement by Buyer to transfer to Seller the Certificates at a date certain, against the transfer of funds by Seller, in an amount equal to the Repurchase Price. From time to time the parties hereto may enter into Transactions in which Seller agrees to initiate the transfer of Transaction Mortgage Loans or REO Properties to the Transaction Subsidiary or the REO Subsidiary, as applicable, against the transfer of funds by Buyer to Seller in an amount equal to the Purchase Price Increase as the result of the increase in value with respect to the Transaction Mortgage Loans transferred to the Transaction Subsidiary or REO Properties transferred to the REO Subsidiary, as applicable, with a simultaneous agreement by Buyer to permit the release of Transaction Mortgage Loans or REO Properties, as applicable, with respect thereto from the Transaction Subsidiary or REO Subsidiary, as applicable, to or for the benefit of Seller upon payment by Seller of a portion of the Repurchase Price for the Certificates representing the Repurchase Price in respect of such Transaction Mortgage Loans or REO Properties, as applicable, in all cases subject to the terms of this Agreement. This Agreement is a commitment by Buyer to engage in the Transactions as set forth herein up to the Maximum Committed Purchase Price; provided , that Buyer shall have no commitment to enter into any Transaction requested that would result in the aggregate Purchase Price of then-outstanding Transactions exceeding the Maximum Committed Purchase Price, and in no event shall the aggregate Purchase Price of outstanding Transactions exceed the Maximum Aggregate Purchase Price at any time. Each such transaction involving any acquisition or transfer of Transaction Mortgage Loans or REO Properties, as applicable, with a resulting increase in the Purchase Price shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder.

Seller owns and will own 100% of the Capital Stock in the REO Subsidiary on the initial Purchase Date. Seller owns and will own 100% of the Capital Stock in the Transaction Subsidiary on the initial Purchase Date. On the initial Purchase Date, Buyer will purchase the REO Subsidiary Interests and the Transaction Subsidiary Interests from the Seller in connection with the Transactions on such date.

In order to further secure the Obligations hereunder, the interests in the assets of the Transaction Subsidiary shall be pledged by the Transaction Subsidiary to the Buyer and the interests in the assets of the REO Subsidiary shall be pledged by the REO Subsidiary to the Buyer.

2. Definitions

Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

“ 1933 Act ” means the Securities Act of 1933, as amended from time to time.

“ 1934 Act ” means the Securities Exchange Act of 1934, as amended from time to time.

“ Acceptable State ” means any state acceptable pursuant to Seller’s Underwriting Guidelines.

“ Accepted Servicing Practices ” means, with respect to any Mortgage Loan or REO Property, those mortgage servicing practices or property management practices, as applicable, of prudent mortgage lending institutions (including as set forth in the Ginnie Mae Guide, the FHA Regulations and the VA Regulations) which service mortgage loans and manage real estate properties, as applicable, of the same type as such Mortgage Loan or REO Property in the jurisdiction where the related Mortgaged Property is located in accordance with applicable law.

“ Act of Insolvency ” means, with respect to any Person or its Affiliates, (a) the filing of a petition, commencing, or authorizing the commencement of any case or proceeding, or the voluntary joining of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors, or suffering any such petition or proceeding to be commenced by another which is consented to, not timely contested or results in entry of an order for relief; (b) the seeking of the appointment of a receiver, trustee, custodian or similar official for such party or an Affiliate or any substantial part of the property of either; (c) the appointment of a receiver, conservator, or manager for such party or an Affiliate by any governmental agency or authority having the jurisdiction to do so; (d) the making or offering by such party or an Affiliate of a composition with its creditors or a general assignment for the benefit of creditors; (e) the admission by such party or an Affiliate of such party of its inability to pay its debts or discharge its obligations as they become due or mature; or (f) that any governmental authority or agency or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the property of such party or of any of its Affiliates, or shall have taken any action to displace the management of such party or of any of its Affiliates or to curtail its authority in the conduct of the business of such party or of any of its Affiliates.

“ Adjusted Principal Balance ” means for an Early Buyout HECM Loan, the HECM Loan Principal Balance as of the date of repurchase from a Ginnie Mae Security reduced by all amounts received or collected in respect of principal on such Early Buyout HECM Loan.

“ Adjusted Tangible Net Worth ” has the meaning set forth in the Pricing Side Letter.

“ Affiliate ” means, (i) with respect to any Person other than the Seller or the Guarantor, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code, and (ii) with respect to a Seller Party, the Guarantor and, with respect to the Guarantor, a Seller Party.

“ Aged Loan ” has the meaning assigned to such term in the Pricing Side Letter.

“ Agency ” means Fannie Mae or Ginnie Mae, as applicable.

“ Agency Approvals ” means approval by Fannie Mae and Ginnie Mae, as applicable, as an approved issuer, by FHA as an approved mortgagee, in each case in good standing, and, to the extent necessary, by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act.

“ Agency Security ” means a mortgage-backed security issued by an Agency including a Ginnie Mae Security.

“ Aging Limit ” has the meaning assigned to such term in the Pricing Side Letter.

“ Agreement ” means this Master Repurchase Agreement, as it may be amended, supplemented or otherwise modified from time to time.

“ Allocated Repurchase Price ” means, as of any date of determination, for each Transaction Mortgage Loan or REO Property, as applicable, the portion of the Purchase Price allocated to such Transaction Mortgage Loan or REO Property as of such date, as applicable, together with the related accrued and unpaid Price Differential.

“ Appraised Value ” means, with respect to any Mortgage Loan, the lesser of (i) the value set forth on the appraisal (or similar valuation approved by the applicable Agency for the related product) made in connection with the origination of the related Mortgage Loan as the value of the related Mortgaged Property, or (ii) the purchase price paid for the Mortgaged Property, provided, however, that in the case of a Mortgage Loan the proceeds of which are not used for the purchase of the Mortgaged Property, such value shall be based solely on the appraisal made in connection with the origination of such Mortgage Loan.

“ Asset Documents ” means the documents in the related Asset File to be delivered to the Custodian.

“ Asset File ” means, with respect to a Mortgage Loan or REO Property, the documents and instruments relating to such Mortgage Loan or REO Property and set forth in an exhibit to the Custodial Agreement.

“ Asset Schedule ” means, with respect to any Transaction as of any date, a schedule in the form of a computer tape or other electronic medium generated by Seller, and delivered to Buyer and Custodian, which provides information required by Buyer to enter into Transactions relating to the Transaction Mortgage Loans and Contributed REO Properties in a format acceptable to Buyer.

“ Asset Value ” has the meaning assigned to such term in the Pricing Side Letter.

“ Assignment of Mortgage ” means an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the transfer of the Mortgage.

“ Bailee Letter ” has the meaning assigned to such term in the Custodial Agreement.

“ Bankruptcy Code ” means the United States Bankruptcy Code of 1978, as amended from time to time.

“ Base Rate ” means the “CS Base Rate” as identified in Buyer’s warehouse system from time to time.

“ Business Day ” means any day other than (i) a Saturday or Sunday; (ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New York or the Custodian is authorized or obligated by law or executive order to be closed or (iii) a public or bank holiday in New York City.

“ Buyer ” means Credit Suisse First Boston Mortgage Capital LLC, and any successor or assign hereunder.

“ Capital Lease Obligations ” means, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

“ Capital Stock ” means, as to any Person, any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent equity ownership interests in a Person which is not a corporation, including, without limitation, any and all member or other equivalent interests in any limited liability company, limited partnership, trust, and any and all warrants or options to purchase any of the foregoing, in each case, designated as “securities” (as defined in Section 8-102 of the Uniform Commercial Code) in such Person, including, without limitation, all rights to participate in the operation or management of such Person and all rights to such Person’s properties, assets, interests and distributions under the related organizational documents in respect of such Person. “Capital Stock” also includes (i) all accounts receivable arising out of the related organizational documents of such Person; (ii) all general intangibles arising out of the related organizational documents of such Person; and (iii) to the extent not otherwise included, all proceeds of any and all of the foregoing (including within proceeds, whether or not otherwise included therein, any and all contractual rights under any revenue sharing or similar agreement to receive all or any portion of the revenues or profits of such Person).

“ Cash Equivalents ” means (a) securities with maturities of ninety (90) calendar days or less from the date of acquisition issued or fully guaranteed or insured by the United States Government or any agency thereof, (b) certificates of deposit and eurodollar time deposits with maturities of ninety (90) calendar days or less from the date of acquisition and overnight bank deposits of Buyer or of any commercial bank having capital and surplus in excess of $500,000,000, (c) repurchase obligations of Buyer or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than seven days with respect to securities issued or fully guaranteed or insured by the United States Government, (d) commercial paper of a domestic issuer rated at least A‑1 or the equivalent thereof by S&P or P‑1 or the equivalent thereof by Moody’s and in either case maturing within ninety (90) calendar days after the day of acquisition, (e) securities with maturities of ninety (90) calendar days or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody’s, (f) securities with maturities of ninety (90) calendar days or less from the date of acquisition backed by standby letters of credit issued by Buyer or any commercial bank satisfying the requirements of clause (b) of this definition or (g) shares of money market mutual or similar funds which invest exclusively in assets satisfying the requirements of clauses (a) through (f) of this definition.

“ Certificate ” means any certificate evidencing Capital Stock of the REO Subsidiary or Transaction Subsidiary, as applicable.

“ Change in Control ” means:

(a) any transaction or event as a result of which Guarantor ceases to own, directly or indirectly, at least 51% of the stock of Seller; or

(b) other than in connection with the Transactions under this Agreement, any transaction or event as a result of which Seller ceases to own, directly, 100% of the Capital Stock of the Transaction Subsidiary; or

(c) other than in connection with the Transactions under this Agreement, any transaction or event as a result of which Seller fails to own 100% of the Capital Stock of the REO Subsidiary; or

(d) the sale, transfer, or other disposition of all or substantially all of any Seller Party’s assets (excluding any such action taken in connection with any securitization transaction or sales of mortgage loans or mortgage servicing rights in the ordinary course of business for the Seller or as otherwise permitted hereunder); or

(e) the consummation of a merger or consolidation of Seller with or into another entity or any other corporate reorganization, if more than 50% of the combined voting power of the continuing or surviving entity’s equity outstanding immediately after such merger, consolidation or such other reorganization is owned by persons who were not equityholders of the Seller immediately prior to such merger, consolidation or other reorganization.

“ Christiana Trust ” has the meaning specified in Section 43 hereof.

“ Clearing Account ” has the meaning specified in Section 7.b(2) hereof.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Committed Mortgage Loan ” means a Mortgage Loan which is the subject of a Take‑out Commitment with a Take‑out Investor.

“ Commitment Fee ” has the meaning assigned to such term in the Pricing Side Letter.

“ Contributed REO Properties ” means the REO Properties converted from Early Buyout HECM Loans together with the Repurchase Assets related to such REO Properties transferred by Seller to REO Subsidiary or acquired by REO Subsidiary directly in connection with a Transaction under this Agreement, listed on the related Asset Schedule, until the Buyer releases its interest in such Contributed REO Properties in accordance with the terms of this Agreement.

“ Conversion Date ” means the later of (x) the date a REO Property is contributed to the REO Subsidiary or (y) such Purchased Asset becomes a REO Property.

“ Correspondent Mortgage Loan ” means a Mortgage Loan which is (a) originated by a Correspondent Seller and underwritten in accordance with the Underwriting Guidelines and (b) acquired by the Seller from a Correspondent Seller in the ordinary course of business.

“ Correspondent Seller ” means a mortgage loan originator that sells Mortgage Loans originated by it to Seller as a “correspondent” or “private label” client approved by Buyer in writing.

“ Correspondent Seller Release ” means, with respect to any Correspondent Loan, a release by the related Correspondent Seller, substantially in the form of Exhibit H hereto or as otherwise approved by Buyer in writing, of all right, title and interest, including any security interest, in such Correspondent Loan.

“ Credit Agreement ” means that certain Amended and Restated Credit Agreement dated as of December 19, 2013, among Guarantor, as borrower, the lenders party thereto and Credit Suisse AG, as administrative agent and collateral agent as it may be amended, supplemented or otherwise modified from time to time. To the extent provisions of the Credit Agreement are incorporated by reference and such provisions use other defined terms set forth in the Credit Agreement, such defined terms are hereby incorporated by reference as well; provided that if any such provisions or defined terms are subsequently amended or modified, the provisions and defined terms that are incorporated by reference shall be deemed to be such amended or modified provisions and defined terms. Notwithstanding that the Credit Agreement may be terminated, the provisions incorporated by reference into this Agreement shall survive and continue to bind the Seller hereunder.

“ Custodial Agreement ” means the Custodial Agreement, dated as of the date hereof, among each Seller Party, Buyer and Custodian, as it may be amended, supplemented or otherwise modified from time to time.

“ Custodial Asset Schedule ” has the meaning assigned to such term in the Custodial Agreement.

“ Custodian ” means Deutsche Bank National Trust Company or such other party specified by Buyer and agreed to by Seller, which approval shall not be unreasonably withheld.

“ Deed ” means the deed issued in connection with a foreclosure sale of a Mortgaged Property with respect to a HECM Loan or in connection with receiving a deed in lieu of foreclosure evidencing title to the related REO Property.

“ Default ” means an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.

“ Dollars ” and “ $ ” means dollars in lawful currency of the United States of America.

“ Early Buyout HECM Loan ” means a HECM Loan that is repurchased from a Ginnie Mae Security as a result of the HECM Loan Principal Balance equaling or exceeding the Ginnie Mae HECM Repurchase Trigger.

“ Effective Date ” means the date upon which the conditions precedent set forth in Section 10.a shall have been satisfied.

“ Electronic Tracking Agreement ” means the Electronic Tracking Agreement among Buyer, Seller Parties, MERS and MERSCORP Holdings, Inc., to the extent applicable as the same may be amended from time to time.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate ” means any corporation or trade or business that, together with Seller Parties is treated as a single employer under Section 414(b) or (c) of the Code or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as single employer described in Section 414 of the Code.

“ Escrow Instruction Letter ” means the Escrow Instruction Letter from Seller to the Settlement Agent, substantially in the form of Exhibit I hereto or as otherwise approved by Buyer in writing, as the same may be modified, supplemented and in effect from time to time.

“ Escrow Payments ” means, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

“ Event of Default ” has the meaning specified in Section 15 hereof.

“ Event of Termination ” means with respect to any Seller Party, as applicable to such Seller Party, as the case may be, (a) with respect to any Plan, a reportable event, as defined in Section 4043 of ERISA, as to which the PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event, or (b) the withdrawal of such Seller Party or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or (c) the failure by such Seller Party or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Code (or Section 430(j) of the Code as amended by the Pension Protection Act) or Section 302(e) of ERISA (or Section 303(j) of ERISA, as amended by the Pension Protection Act), or (d) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by such Seller Party or any ERISA Affiliate thereof to terminate any plan, or (e) the failure to meet requirements of Section 436 of the Code resulting in the loss of qualified status under Section 401(a)(29) of the Code, or (f) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (g) the receipt by such Seller Party or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (f) has been taken by the PBGC with respect to such Multiemployer Plan, or (h) any event or circumstance exists which may reasonably be expected to constitute grounds for such Seller Party or any ERISA Affiliate thereof to incur liability under Title IV of ERISA or under Sections 412(b) or 430(k) of the Code with respect to any Plan.

“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to Buyer or other recipient of any payment hereunder or required to be withheld or deducted from a payment to Buyer or such other recipient: (a) Taxes based on (or measured by) net income or net profits, franchise Taxes and branch profits Taxes that are imposed on Buyer or other recipient of any payment hereunder as a result of (i) being organized under the laws of, or having its principal office or its applicable lending office located in the jurisdiction imposing such Tax (or any political subdivision thereof), or (ii) a present or former connection between such Buyer or other recipient and the jurisdiction of the Governmental Authority imposing such Tax or any political subdivision or taxing authority thereof (other than connections arising from such Buyer or other recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced under this Agreement or any Program Agreement, or sold or assigned an interest in any Purchased Asset or Transaction Mortgage Loan); (b) any Tax imposed on Buyer or other recipient of a payment hereunder that is attributable to such Buyer’s or other recipient’s failure to comply with relevant requirements set forth in Section 11(e); (c) any withholding Tax that is imposed on amounts payable to or for the account of Buyer or other recipient of a payment hereunder pursuant to a law in effect on the date such person becomes a party to or under this Agreement, or such person changes its lending office, except in each case to the extent that amounts with respect to Taxes were payable either to such person’s assignor immediately before such person became a party hereto or to such person immediately before it changed its lending office; and (d) any U.S. federal withholding Taxes imposed under FATCA.

“ Fannie Mae ” means the Federal National Mortgage Association or any successor thereto.

“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“ FHA Approved Mortgagee ” means a corporation or institution approved as a mortgagee by the FHA under the National Housing Act, as amended from time to time, and applicable FHA regulations, and eligible to own and service mortgage loans such as the FHA Loans.

“ FHA HERMIT System ” means the FHA’s Home Equity Reverse Mortgage Information Technology, together with any successor FHA electronic access portal.

“ FHA Loan ” means a Mortgage Loan which is the subject of an FHA Mortgage Insurance Contract.

“ FHA Mortgage Insurance ” means, mortgage insurance authorized under the National Housing Act, as amended from time to time, and provided by the FHA.

“ FHA Mortgage Insurance Contract ” means the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.

“ FHA Regulations ” means the regulations promulgated by HUD under the National Housing Act, as amended from time to time and codified in 24 Code of Federal Regulations, and other HUD issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters.

“ Fidelity Insurance ” means insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Seller’s regulators.

“ Flow Assignment Agreements ” means (i) that certain Flow Assignment Agreement, dated as of February 23, 2016 between Trustee, not in its individual capacity but solely as trustee for Transaction Subsidiary, as assignor, and REO Subsidiary, as assignee, as the same may be amended, restated, supplemented or otherwise modified from time to time and (ii) that certain Flow Assignment Agreement, dated as of February 23, 2016, between Trustee, not in its individual capacity but solely as trustee for Transaction Subsidiary, as assignee, and REO Subsidiary, as assignor, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ GAAP ” means generally accepted accounting principles in effect from time to time in the United States of America and applied on a consistent basis.

“ Ginnie Mae ” means the Government National Mortgage Association and any successor thereto.

“ Ginnie Mae Eligible Mortgage Loan ” means a HECM Loan that is in strict compliance with the eligibility requirements for swap by Ginnie Mae, under the Ginnie Mae Guide and/or Ginnie Mae program.

“ Ginnie Mae Guide ” means the Ginnie Mae Mortgage-Backed Security Guide, Handbook 5500.3, Rev. 1, as amended from time to time, and any related announcements, directives and correspondence issued by Ginnie Mae.

“ Ginnie Mae HECM Repurchase Trigger ” means, with respect to a HECM Loan, the lesser of (a) 98% of the Maximum Claim Amount and (b) such lesser percentage of the Maximum Claim Amount allowed by Ginnie Mae.

“ Ginnie Mae Security ” means a mortgage-backed security guaranteed by Ginnie Mae pursuant to the Ginnie Mae Guide.

“ Governmental Authority ” means any nation or government, any state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions over any Seller Party or Buyer, as applicable.

“ Guarantee ” means, as to any Person, any obligation of such Person directly or indirectly guaranteeing any Indebtedness of any other Person or in any manner providing for the payment of any Indebtedness of any other Person or otherwise protecting the holder of such Indebtedness against loss (whether by virtue of partnership arrangements, by agreement to keep‑well, to purchase assets, goods, securities or services, or to take‑or‑pay or otherwise); provided that the term “ Guarantee ” shall not include (a) endorsements for collection or deposit in the ordinary course of business, or (b) obligations to make servicing advances for delinquent taxes and insurance or other obligations in respect of a Mortgage Loan or Mortgaged Property, to the extent required by Buyer. The amount of any Guarantee of a Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The terms “ Guarantee ” and “ Guaranteed ” used as verbs shall have correlative meanings.

“ Guarantor ” means Walter Investment Management Corp., in its capacity as guarantor under the Guaranty.

“ Guaranty ” means the Guaranty of the Guarantor dated as of the date hereof as the same may be amended from time to time, pursuant to which the Guarantor fully and unconditionally guarantees the obligations of the Seller Parties hereunder.

“ HECM Loan ” means a home equity conversion Mortgage Loan which is (a) secured by a first lien and (b) is insured by FHA.

“ HECM Loan Principal Balance ” means the principal balance of a HECM Loan (including without limitation all scheduled payments and/or unscheduled payments, accrued interest and MIP Payments and other amounts capitalized into the principal balance) reduced by all amounts received or collected in respect of principal on such HECM Loan.

“ High Cost Mortgage Loan ” means a Mortgage Loan classified as a “high cost,” “threshold,” “covered,” or “predatory” loan under any other applicable state or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees).

“ HUD ” means the United States Department of Housing and Urban Development or any successor thereto.

“ Inbound Account ” means the account set forth in Section 9 hereof.

“ Income ” means, without duplication, with respect to any Purchased Asset, Transaction Mortgage Loan or Contributed REO Property, at any time until repurchased or removed from a Transaction Subsidiary or REO Subsidiary, as applicable, by Seller, any principal received thereon or in respect thereof and all interest, dividends or other distributions thereon.

“ Indebtedness ” means, for any Person: at any time, and only to the extent outstanding at such time: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business, so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; (c) indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations (contingent or otherwise) of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (e) Capital Lease Obligations of such Person; (f) obligations of such Person under repurchase agreements or like arrangements; (g) indebtedness of others Guaranteed by such Person; (h) all obligations of such Person incurred in connection with the acquisition or carrying of fixed assets by such Person; (i) indebtedness of general partnerships of which such Person is a general partner; and (j) any other indebtedness of such Person evidenced by a note, bond, debenture or similar instrument.

“ Indemnified Taxes ” means Taxes other than Excluded Taxes and Other Taxes, imposed on or with respect to any payment made by or on account of any obligation of Seller hereunder or under any Program Agreement.

“ Interest Rate Protection Agreement ” means, with respect to any or all of the Transaction Mortgage Loans that are HECM Loans, any short sale of a U.S. Treasury Security, or futures contract, or mortgage related security, or eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement or Take‑out Commitment, or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by a Seller Party and an Affiliate of Buyer or such other party acceptable to Buyer in its good faith discretion, which agreement is acceptable to Buyer in its good faith discretion.

“ Lender Insurance Authority ” means the permission granted to certain FHA‑approved lenders to process single family mortgage applications without first submitting documentation to HUD as set forth in 12 U.S.C. §1715z‑21 and the regulations enacted thereunder set forth in 24 CFR §203.6.

“ Lien ” means any mortgage, lien, pledge, charge, security interest or similar encumbrance.

“ Loan to Value Ratio ” or “ LTV ” means with respect to any HECM Loan, the ratio of the original outstanding principal amount of such Mortgage Loan to the lesser of (a) the Appraised Value of the Mortgaged Property at origination or (b) if the Mortgaged Property was purchased within twelve (12) months of the origination of such Mortgage Loan, the purchase price of the Mortgaged Property.

“ Margin Call ” has the meaning specified in Section 6.a hereof.

“ Margin Deadlines ” has the meaning specified in Section 6.b hereof.

“ Margin Deficit ” has the meaning specified in Section 6.a hereof.

“ Market Value ” has the meaning assigned to such term in the Pricing Side Letter.

“ Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, or condition (financial or otherwise) of any Seller Party, Guarantor, or any Affiliate that is a party to any Program Agreement taken as a whole; (b) a material impairment of the ability of any Seller Party, Guarantor or any Affiliate that is a party to any Program Agreement to perform under any Program Agreement and to avoid any Event of Default; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Agreement against any Seller Party, Guarantor or any Affiliate that is a party to any Program Agreement, in each case as determined by the Buyer in its sole discretion; provided that any material adverse change or material adverse effect in respect of Christiana Trust, individually, shall not trigger a “Material Adverse Effect” in respect of the Transaction Subsidiary.

“ Maximum Aggregate Purchase Price ” means ONE HUNDRED MILLION DOLLARS ($100,000,000).

“ Maximum Claim Amount ” means the amount of insurance coverage for a HECM Loan provided by the related HUD/FHA insurance thereon.

“ Maximum Committed Purchase Price ” means the following amounts opposite the dates as set forth below, provided that it shall be a condition precedent to increasing the Maximum Committed Purchase Price that Buyer has received the applicable Commitment Fee:



Dates	Maximum Committed Purchase Price
Effective Date thru and including March 30, 2016	$10,000,000
March 31, 2016 thru and including the Termination Date	$50,000,000

“ MERS ” means Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.

“ MERS System ” means the system of recording transfers of mortgages electronically maintained by MERS.

“ MIP Payment ” means all mortgage insurance premiums payable to either HUD or a private mortgage insurer, as set forth in the related Asset File.

“ Moody’s ” means Moody’s Investors Service, Inc. or any successors thereto.

“ Mortgage ” means each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a lien on real property and other property and rights incidental thereto.

“ Mortgage Interest Rate ” means the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.

“ Mortgage Loan ” means any HECM Loan or Early Buyout HECM Loan evidenced by a promissory note and secured by a first lien mortgage, which satisfies the requirements set forth in the Underwriting Guidelines and Section 13.b hereof.

“ Mortgage Note ” means the promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.

“ Mortgaged Property ” means the real property securing repayment of the debt evidenced by a Mortgage Note.

“ Mortgagor ” means the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder.

“ Multiemployer Plan ” means a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been or are required to be made by a Seller Party or any ERISA Affiliate and that is covered by Title IV of ERISA.

“ Net Income ” means, for any period, the net income of Seller on a consolidated basis for such period as determined in accordance with GAAP.

“ Net Worth ” means an amount equal to, on a consolidated basis, Seller’s stockholder equity (determined in accordance with GAAP).

“ Nominee ” means Reverse Mortgage Solutions, Inc., or any successor Nominee appointed by Buyer following an Event of Default.

“ Nominee Agreement ” means that certain Nominee Agreement dated as of February 23, 2016, by and among REO Subsidiary, Trustee, not in its individual capacity but solely as trustee for Transaction Subsidiary, and Seller, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Non-Recourse Debt ” means an obligation for borrowed money secured by a lien on any property owned by a Person, with respect to which obligation the Person has not assumed or become liable for the payment thereof.

“ Obligations ” means (a) all of Seller Parties’ obligations to pay the Repurchase Price on the Repurchase Date, the Price Differential on each Payment Date, and other obligations and liabilities, to Buyer, its Affiliates or Custodian arising under, or in connection with, the Program Agreements, whether now existing or hereafter arising; (b) any and all sums paid by Buyer or on behalf of Buyer in order to preserve any Purchased Asset, Transaction Mortgage Loan or Contributed REO Property or its interest therein; (c) in the event of any proceeding for the collection or enforcement of any of Seller Parties’ indebtedness, obligations or liabilities referred to in clause (a), the reasonable expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on any Purchased Asset, Transaction Mortgage Loan or Contributed REO Property, or of any exercise by Buyer of its rights under the Program Agreements, including, without limitation, attorneys’ fees and disbursements and court costs; and (d) all of Seller Parties’ indemnity obligations to Buyer or Custodian or both pursuant to the Program Agreements.

“ OFAC ” has the meaning set forth in Section 13.a(27) hereof.

“ Officer’s Compliance Certificate ” has the meaning assigned to such term in the Pricing Side Letter.

“ Optional Repurchase ” has the meaning specified in Section 4.b hereof.

“ Optional Repurchase Date ” has the meaning specified in Section 4.b hereof.

“ Other Taxes ” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes or any excise, sales, goods and services or transfer taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Program Agreement.

“ Payee Number ”: means the code used by Fannie Mae to indicate the wire transfer instructions that will be used by Fannie Mae to purchase a Mortgage Loan.

“ Payment Date ” means, with respect to a Purchased Asset, the 5th day of the month following the related Purchase Date and each succeeding 5th day of the month thereafter; provided, that, with respect to such Purchased Asset, the final Payment Date shall be the related Repurchase Date; and provided, further, that if any such day is not a Business Day, the Payment Date shall be the next succeeding Business Day.

“ PBGC ” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“ Pension Protection Act ” means the Pension Protection Act of 2006.

“ Person ” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.

“ Plan ” means an employee benefit or other plan established or maintained by any Seller Party or any ERISA Affiliate and covered by Title IV of ERISA, other than a Multiemployer Plan.

“ Pooled Mortgage Loan ” means a HECM Loan that is part of a pool of Transaction Mortgage Loans certified by the applicable Custodian to an Agency to be swapped for an Agency Security backed by such pool in accordance with the terms of the guidelines issued by the applicable Agency.

“ Post-Default Rate ” has the meaning assigned to such term in the Pricing Side Letter.

“ Power of Attorney ” means a Power of Attorney delivered by each Seller Party substantially in the form of Exhibit D hereto.

“ Price Differential ” means with respect to any Transaction Mortgage Loan or Contributed REO Property as of any date of determination, the aggregate amount obtained by daily application of, for each Transaction Mortgage Loan or Contributed REO Property, the amount equal to the product of (a) the Pricing Rate for such Transaction Mortgage Loan or Contributed REO Property (or during the continuation of an Event of Default, the Post-Default Rate) and (b) the Purchase Price for such Transaction Mortgage Loan or Contributed REO Property, calculated daily on the basis of a 360-day year for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction Mortgage Loan or Contributed REO Property and ending on (but excluding) the Repurchase Date.

“ Pricing Rate ” has the meaning assigned to such term in the Pricing Side Letter.

“ Pricing Side Letter ” means, the letter agreement dated as of the date hereof, among Buyer and Seller Parties, as the same may be amended from time to time.

“ Program Agreements ” means, collectively, this Agreement, the Custodial Agreement, the Pricing Side Letter, the Electronic Tracking Agreement, the Guaranty, each Power of Attorney, the REO Subsidiary Agreement, the Transaction Subsidiary Agreement, the Nominee Agreement, the Flow Assignment Agreements, the Servicing Agreement, if any, and the Servicer Notice, if entered into.

“ Prohibited Person ” has the meaning set forth in Section 13.a(27) hereof.

“ Property ” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“ Purchase Date ” means the date on which a Purchased Asset is to be transferred by Seller to Buyer, or a Purchase Price Increase Date, as applicable.

“ Purchase Price ” means, without duplication: (a) with respect to REO Subsidiary Interests, the aggregate Purchase Price of all REO Properties owned by REO Subsidiary, (b) with respect to Transaction Subsidiary Interests, the aggregate Purchase Price of all Transaction Mortgage Loans owned by Transaction Subsidiary and (c) with respect to each Transaction Mortgage Loan or Contributed REO Property, the price at which such Transaction Mortgage Loan or Contributed REO Property is made subject to a Transaction hereunder, as applicable, which shall equal:

(a) on the Purchase Date of the Purchased Assets or Transaction Mortgage Loans and Conversion Date of Contributed REO Property, the Asset Value of such Purchased Assets or Contributed REO Property as of the Purchase Date;

(b) on any day after the Purchase Date or Conversion Date, except where Buyer and the Seller agree otherwise, the amount determined under the immediately preceding clause decreased by the amount of any cash applied to reduce the Seller’s obligations hereunder with respect to such Transaction Mortgage Loan or Contributed REO Property.

“ Purchase Price Increase ” means an increase in the Purchase Price for the Certificates based upon the REO Subsidiary acquiring additional REO Properties and/or the Transaction Subsidiary acquiring additional Transaction Mortgage Loans to which such portion of the Purchase Price is allocated.

“ Purchase Price Increase Date ” means the date on which a Purchase Price Increase is made with respect to the acquisition of additional REO Properties by the REO Subsidiary and/or additional Transaction Mortgage Loans by the Transaction Subsidiary.

“ Purchase Price Percentage ” has the meaning assigned to such term in the Pricing Side Letter.

“ Purchased Assets ” means the collective reference to Transaction Subsidiary Interests and the REO Subsidiary Interests, together with the indirect beneficial interest in the Contributed REO Properties represented by the REO Subsidiary Interests and the Mortgage Loans owned by the Transaction Subsidiary Interests, together with the Repurchase Assets related to such Transaction Mortgage Loans, Contributed REO Properties, Transaction Subsidiary Interests and REO Subsidiary Interests transferred or pledged by Seller to Buyer in a Transaction hereunder, listed on the related Asset Schedule attached to the related Transaction Request, which such Asset Files the related Custodian has been instructed to hold pursuant to the related Custodial Agreement.

“ Qualified Insurer ” means an insurance company duly authorized and licensed where required by law to transact insurance business and approved as an insurer by Fannie Mae or Freddie Mac or Ginnie Mae, as applicable.

“ Qualified Originator ” means an originator of Mortgage Loans which is acceptable under the Underwriting Guidelines.

“ Records ” means all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by any Seller Party, Servicer or any other person or entity with respect to a Purchased Asset, Transaction Mortgage Loan or REO Property. Records shall include the Mortgage Notes, any Mortgages, the Asset Files, the Deeds, the credit files related to the Purchased Asset and any other instruments necessary to document or service a Mortgage Loan or REO Property.

“ REO Property ” means real property acquired by REO Subsidiary through foreclosure of an Early Buyout HECM Loan or by deed in lieu of such foreclosure.

“ REO Subsidiary ” means RMS REO CS, LLC, a Delaware limited liability company.

“ REO Subsidiary Agreement ” means the limited liability company agreement, dated as of February 23, 2016, between RMS REO CS, LLC and Reverse Mortgage Solutions, Inc., as may be amended, supplemented or otherwise modified from time to time.

“ REO Subsidiary Interests ” means any and all of the Capital Stock of the REO Subsidiary.

“ Reporting Date ” means the 7 ^th Business Day of each month.

“ Repurchase Assets ” has the meaning assigned thereto in Section 8 hereof.

“ Repurchase Date ” means the earliest of (a) the Termination Date, (b) the date requested pursuant to Section 4.a, (c) any Optional Repurchase Date, or (d) the date determined by application of Section 16 hereof.

“ Repurchase Price ” means the price at which Purchased Assets are to be transferred from Buyer or at which the Transaction Subsidiary Interests or REO Subsidiary Interests are to be reduced in value with respect to Transaction Mortgage Loans or Contributed REO Properties, as applicable, released therefrom to Seller upon an Optional Repurchase or termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price for such Purchased Asset, Transaction Mortgage Loan or Contributed REO Property and the accrued but unpaid Price Differential relating to such Purchased Asset, Transaction Mortgage Loan or Contributed REO Property as of the date of such determination.

“ Request for Certification ” means a notice sent to the Custodian reflecting that one or more of the Transaction Mortgage Loans or REO Properties shall be made subject to a Transaction with the Buyer hereunder.

“ Requirement of Law ” means, with respect to any Person, any law, treaty, rule or regulation or determination of an arbitrator, a court or other governmental authority, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“ Responsible Officer ” means as to any Person, the chief executive officer or, with respect to financial matters, any vice president, senior vice president or financial officer primarily responsible for financial matters.

“ S&P ” means Standard & Poor’s Ratings Services, or any successor thereto.

“ SEC ” means the Securities and Exchange Commission, or any successor thereto.

“ Seller ” means Reverse Mortgage Solutions, Inc. or its permitted successors and assigns.

“ Seller Party(ies) ” means, individually or collectively, as applicable, Seller, Transaction Subsidiary and/or REO Subsidiary, as applicable.

“ Servicer ” means any servicer or subservicer approved by Buyer in its sole discretion, which may be Seller.

“ Servicer Notice ” means the notice acknowledged by a third party Servicer substantially in the form of Exhibit J hereto.

“ Servicing Agreement ” means any servicing agreement entered into between Seller and a third party Servicer, as the same may be amended from time to time.

“ Servicing Rights ” means the rights of any Person to administer, service or subservice, the Transaction Mortgage Loans or REO Properties or to possess related Records.

“ Settlement Agent ” means, with respect to any Transaction the subject of which is a Wet‑Ink Mortgage Loan, the entity approved by Buyer, in its sole good‑faith discretion, which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the related Wet‑Ink Mortgage Loan is being originated. A Settlement Agent is deemed approved unless Buyer notifies Seller otherwise at any time electronically or in writing.

“ SIPA ” means the Securities Investor Protection Act of 1970, as amended from time to time.

“ Subsidiary ” means, with respect to any Person, any corporation, limited liability company, partnership, trust or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, limited liability company, partnership, trust or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, limited liability company, partnership, trust or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

“ Take‑out Commitment ” means a commitment of Seller to either (a) sell one or more identified Transaction Mortgage Loans (other than an Early Buyout HECM Loan) to a Take‑out Investor or (b) (i) swap one or more identified Transaction Mortgage Loans (other than an Early Buyout HECM Loan) with a Take‑out Investor that is an Agency for an Agency Security, and (ii) sell the related Agency Security to a Take‑out Investor, and in each case, the corresponding Take‑out Investor’s commitment back to Seller to effectuate any of the foregoing, as applicable. With respect to any Take‑out Commitment with an Agency, the applicable agency documents list Buyer or Buyer’s agent from an intercreditor agreement as sole subscriber. For the avoidance of any doubt, any sale of Transaction Mortgage Loans shall be effected by a simultaneous purchase by Seller from the Transaction Subsidiary of the Transaction Mortgage Loans accompanied by a sale by Seller to a Take-out Investor.

“ Take‑out Investor ” means (a) an Agency or (b) other institution which has made a Take‑out Commitment that has not been rejected in writing by Buyer.

“ Taxes ” means any and all present or future taxes (including social security contributions and value added taxes), levies, imposts, duties (including stamp duties), deductions, charges (including ad valorem charges), withholdings (including backup withholding), assessments, fees or other charges of any nature whatsoever imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Termination Date ” means the earlier of (a) February 21, 2017, and (b) the date of the occurrence of an Event of Default.

“ Test Period ” has the meaning assigned to such term in the Pricing Side Letter.

“ Trade Assignment ” means an assignment to Buyer or agent of Buyer under an intercreditor agreement of a forward trade between a Takeout Investor and Seller with respect to one or more Transaction Mortgage Loans that are Pooled Mortgage Loans substantially in the form of Exhibit B hereto.

“ Transaction ” has the meaning set forth in Section 1 hereof.

“ Transaction Mortgage Loan ” means a Mortgage Loan which is subject to a Transaction under this Agreement.

“ Transaction Request ” means a request via email from Seller to Buyer and Trustee notifying Buyer that Seller wishes to enter into a Transaction, including a Purchase Price Increase, hereunder that indicates that it is a Transaction Request under this Agreement and that contains language substantially in the form attached hereto as Exhibit A .

“ Transaction Subsidiary ” means RMS CS Repo Trust 2016.

“ Transaction Subsidiary Agreement ” means that certain trust agreement, dated as of February 23, 2016 between Reverse Mortgage Solutions, Inc. and Wilmington Savings Fund Society, FSB, a federal savings bank d/b/a Christiana Trust.

“ Transaction Subsidiary Interests ” means any and all of Seller’s interests in the Capital Stock of the Transaction Subsidiary.

“ Trust Receipt ” means, with respect to any Transaction as of any date, a receipt in the form attached as an exhibit to the Custodial Agreement.

“ Trustee ” has the meaning specified in Section 43 hereof.

“ Underwriting Guidelines ” means the standards, procedures and guidelines which conform to the guidelines of the applicable Agency of the Seller for underwriting and acquiring Mortgage Loans, which are set forth in the written policies and procedures of the Seller, a copy of which have been provided to Buyer and such other guidelines as are identified to and approved in writing by Buyer.

“ Uniform Commercial Code ” or “ UCC ” means the Uniform Commercial Code as in effect on the date hereof in the State of New York or the Uniform Commercial Code as in effect in the applicable jurisdiction.

“ VA ” means the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs.

“ VA Approved Lender ” means a lender which is approved by the VA to act as a lender in connection with the origination of VA Loans.

“ VA Loan ” means a Mortgage Loan which is subject of a VA Loan Guaranty Agreement as evidenced by a loan guaranty certificate.

“ VA Loan Guaranty Agreement ” means the obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a maximum amount) upon default of the Mortgagor pursuant to the Servicemen’s Readjustment Act, as amended.

“ VA Regulations ” means the regulations promulgated by the U.S. Department of Veterans Affairs and codified in Title 38 Code of Federal Regulations, and other U.S. Department of Veterans Affairs issuances relating to VA Loans, including the related handbooks, circulars, notices and mortgagee letters.

“ Warehouse Indebtedness ” means Indebtedness of Seller in connection with any repurchase, warehouse, gestation, early purchase or similar facility.

“ Wet‑Ink Delivery Date ” has the meaning assigned to such term in the Pricing Side Letter.

“ Wet‑Ink Documents ” means, with respect to any Wet‑Ink Mortgage Loan, the (a) Transaction Request and (b) the Asset Schedule.

“ Wet‑Ink Mortgage Loan ” means a Transaction Mortgage Loan which is being made subject to a Transaction simultaneously with the origination thereof.

“ Wire Instruction Data ” has the meaning assigned to such term in the Custodial Agreement.

3. Program; Initiation of Transactions

a. On the initial Purchase Date, Buyer will purchase the Transaction Subsidiary Interests (accompanied by a pledge of the related Mortgage Loans by the Transaction Subsidiary) and REO Subsidiary Interests. From time to time, Seller may request and Buyer may fund additional Purchase Price Increases in connection with the conveyance of Contributed REO Properties to the REO Subsidiary and the corresponding increases of the Purchase Price on account of the REO Subsidiary Interests. From time to time, Seller may request and Buyer may fund additional Purchase Price Increases in connection with the conveyance of Transaction Mortgage Loans to the Transaction Subsidiary and the corresponding increases of the Purchase Price on account of the Transaction Subsidiary Interests. This Agreement is a commitment by Buyer to enter into Transactions with Seller up to an aggregate amount equal to the Maximum Committed Purchase Price. This Agreement is not a commitment by Buyer to enter into Transactions with Seller for amounts exceeding the Maximum Committed Purchase Price, but rather, sets forth the procedures to be used in connection with periodic requests for Buyer to enter into Transactions with Seller. Seller hereby acknowledges that, beyond the Maximum Committed Purchase Price, Buyer is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement; provided that once Buyer and Seller enter into a Transaction with respect to one or more Transaction Mortgage Loans or Contributed REO Properties that would in the aggregate exceed the Maximum Committed Purchase Price, Buyer shall not require Seller to repurchase any such Transaction Mortgage Loans or Contributed REO Properties unless such repurchase is otherwise permitted by the terms of this Agreement. All Transaction Mortgage Loans shall exceed or meet the Underwriting Guidelines, and shall be serviced by Seller or Servicer, as applicable. The aggregate Purchase Price of the Certificates (adjusted for any Purchase Price Increases or reductions in Purchase Price, as applicable) subject to outstanding Transactions shall not exceed the Maximum Aggregate Purchase Price.

b. Seller shall request that Buyer enter into a Transaction with respect to Transaction Mortgage Loans by delivering (i) to Buyer, a Transaction Request (A) one (1) Business Day prior to the proposed Purchase Date for Mortgage Loans that are not Wet‑Ink Mortgage Loans or (B) by 3:30 p.m. (New York City time) on the proposed Purchase Date for Wet‑Ink Mortgage Loans and (ii) to Buyer and Custodian an Asset Schedule in accordance with the Custodial Agreement and (iii) to Buyer, with respect to Wet-Ink Mortgage Loans and Correspondent Mortgage Loans, the Wire Instruction Data in accordance with the Custodial Agreement. In the event the Asset Schedule provided by Seller contains erroneous computer data, is not formatted properly or the computer fields are otherwise improperly aligned, Buyer shall provide written or electronic notice to Seller describing such error and Seller shall correct the computer data, reformat or properly align the computer fields itself and resubmit the Asset Schedule as required herein.

c. Reserved .

d. Reserved .

e. Upon the satisfaction of the applicable conditions precedent set forth in Section 10 hereof, all of Seller’s interest in the applicable Purchased Assets shall pass to or be pledged to Buyer on the Purchase Date, against the transfer of the Purchase Price for the Certificates to Seller. Upon transfer of the Purchased Assets to Buyer as set forth in this Section and until termination of any related Transactions or the release of Contributed REO Property or Transaction Mortgage Loans as set forth in Sections 4 or 16 of this Agreement, ownership of each Purchased Asset, including beneficial ownership interest in the related Transaction Mortgage Loans and Contributed REO Property and each document in the related Asset File and Records, is vested in Buyer; provided that, prior to the recordation by the Custodian as provided for in the Custodial Agreement, record title in the name of Seller to each Transaction Mortgage Loan shall be retained by Seller in trust and as Nominee, for the benefit of the Transaction Subsidiary and Buyer, respectively, for the sole purpose of facilitating the servicing and the supervision of the servicing of the Mortgage Loans.

f. With respect to each Wet‑Ink Mortgage Loan, by no later than the Wet‑Ink Delivery Date, Seller shall cause the related Settlement Agent to deliver to the Custodian the remaining documents in the Asset File, as more particularly set forth in the Custodial Agreement.

4. Repurchase; Conversion to REO Property

a. Seller shall repurchase the Certificates from Buyer on the Termination Date. In addition, Seller may repurchase Purchased Assets or effect an Optional Repurchase with respect to Purchased Assets or Transaction Mortgage Loans or Contributed REO Property without penalty or premium on any date pursuant to Section 4.b below. If Seller intends to make such a repurchase, Seller shall give one (1) Business Day’s prior written notice to Buyer, designating the Purchased Assets, Transaction Mortgage Loans or Contributed REO Property to be repurchased. Such obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Asset, Transaction Mortgage Loan or Contributed REO Property (but liquidation or foreclosure proceeds received by Buyer shall be applied to reduce the Repurchase Price for such Purchased Asset, Transaction Mortgage Loan or Contributed REO Property on each Payment Date except as otherwise provided herein). Seller is obligated to repurchase and take physical possession of the Purchased Assets, Transaction Mortgage Loans or Contributed REO Property and related Asset Files from Buyer or its designee (including the Custodian) at Seller’s expense on the related Repurchase Date.

b. When the Transaction Mortgage Loans, Purchased Assets or Contributed REO Properties, as applicable, supporting a portion of the Purchase Price of the Transaction related to the Transaction Mortgage Loans, Purchased Assets or Contributed REO Properties are desired by Seller to be released, sold or otherwise liquidated, Seller shall make payment to Buyer of the Allocated Repurchase Price attributable to such Purchased Assets, Transaction Mortgage Loans or Contributed REO Properties in order to prepay the applicable Repurchase Price (an “ Optional Repurchase ”) in an amount equal to the applicable Repurchase Price on each date such Purchased Assets, Transaction Mortgage Loans or Contributed REO Properties, as applicable, are desired to be repurchased, sold or otherwise liquidated (each, an “ Optional Repurchase Date ”). Such payment shall serve as a partial prepayment of the Repurchase Price in connection with the Transaction in respect of such Purchased Assets, Transaction Mortgage Loans or Contributed REO Properties, as applicable. Seller shall pay the Allocated Repurchase Price and take (or cause its designee to take) physical possession of the Purchased Assets, Transaction Mortgage Loans or Contributed REO Properties, as applicable, from the Transaction Subsidiary or its designee (including the Custodian) at Seller’s expense on the related Optional Repurchase Date. Immediately following such payment, the related Purchased Asset, Transaction Mortgage Loan or Contributed REO Property, as applicable, shall cease to be subject to this Agreement or the other Program Agreements, and Buyer shall be deemed to have released all of its interests in such Purchased Asset, Transaction Mortgage Loan or Contributed REO Property, as applicable, without further action by any Person and shall direct Custodian to release the related Asset File to the Seller or its designee pursuant to the Custodial Agreement.

c. Provided that no Default shall have occurred and is continuing, and Buyer has received the related Repurchase Price upon repurchase of the Purchased Assets or release of Contributed REO Property from the REO Subsidiary or Transaction Mortgage Loans from the Transaction Subsidiary, as applicable, Buyer agrees to release (or permit the release of) its ownership interest hereunder in the Purchased Assets or lien on the Contributed REO Property or Transaction Mortgage Loans (and the other Repurchase Assets related thereto), as applicable, at the request of Seller. The applicable Purchased Assets, Contributed REO Properties or Transaction Mortgage Loans (and the other Repurchase Assets related thereto) shall be delivered to Seller free and clear of any lien, encumbrance or claim. With respect to payments in full by the related Mortgagor of a Transaction Mortgage Loan, Seller agrees to immediately remit (or cause to be remitted) to Buyer the Repurchase Price with respect to such Transaction Mortgage Loan. Buyer agrees to release its lien on the Transaction Mortgage Loans which have been prepaid in full after receipt of evidence of compliance with the immediately preceding sentence.

d. Pursuant to a flow assignment agreement between the REO Subsidiary and the Transaction Subsidiary dated as of the date hereof, the Transaction Subsidiary may from time to time assign certain Transaction Mortgage Loans subject to a Transaction to the REO Subsidiary. Upon the assignment of any such Transaction Mortgage Loan to the REO Subsidiary, the Transaction Subsidiary and the REO Subsidiary shall provide notice thereof to Buyer and deliver to Buyer an updated Mortgage Loan Schedule showing updated ownership of Transaction Mortgage Loans subject to a Transaction. Thereafter, all obligations with respect to such Transaction Mortgage Loans shall be obligations of the REO Subsidiary.

e. Promptly upon an Early Buyout HECM Loan becoming a REO Property as contemplated by Section 8, Seller shall (i) notify Buyer in writing that such Early Buyout HECM Loan has become a REO Property and the value attributed to such REO Property by Seller, (ii) deliver to Buyer and the applicable Custodian an Asset Schedule with respect to such REO Property, (iii) be deemed to make the representations and warranties listed on Schedule 1-C hereto with respect to such REO Property, and (iv) the Purchase Price on account of the Transaction Mortgage Loans shall be decreased and the Purchase Price on account of the REO Subsidiary Interests shall be increased by the same amount. Such REO Property (x) shall be deemed a Contributed REO Property owned by the REO Subsidiary hereunder and its Asset Value as determined by Buyer shall be included in the Asset Value of the REO Subsidiary Interests and (y) to the extent that such conversion results in a Margin Deficit, Seller shall pay such amount in accordance with Section 6.

5. Price Differential

a. On each Business Day that a Transaction is outstanding, the applicable Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid Price Differential shall be settled in cash on each related Payment Date. Two (2) Business Days prior to the Payment Date, Buyer shall give Seller written or electronic notice of the amount of the Price Differential due on such Payment Date. On the Payment Date, Seller shall pay to Buyer the Price Differential for such Payment Date (along with any other amounts to be paid pursuant to Section 7 hereof and Section 3 of the Pricing Side Letter), by wire transfer in immediately available funds.

b. If Seller fails to pay all or part of the Price Differential by 3:00 p.m. (New York City time) on the related Payment Date, with respect to any Purchased Asset, Seller shall be obligated to pay to Buyer (in addition to, and together with, the amount of such Price Differential) interest on the unpaid Repurchase Price at a rate per annum equal to the Post-Default Rate until the Price Differential is received in full by Buyer.

6. Margin Maintenance

a. If at any time the outstanding Purchase Price allocated to any Purchased Asset, Contributed REO Property or Transaction Mortgage Loan subject to a Transaction is greater than the Asset Value allocated to such Purchased Asset, Contributed REO Property or Transaction Mortgage Loan subject to a Transaction (a “ Margin Deficit ”), then Buyer may by notice to Seller require Seller to transfer to Buyer cash in an amount at least equal to the Margin Deficit (such requirement, a “ Margin Call ”).

b. Notice delivered pursuant to Section 6.a above may be given by any written or electronic means. Any notice given before 10:00 a.m. (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than 5:00 p.m. (New York City time) on such Business Day; notice given after 10:00 a.m. (New York City time) on a Business Day shall be met, and the related Margin Call satisfied, no later than 5:00 p.m. (New York City time) on the following Business Day (the foregoing time requirements for satisfaction of a Margin Call are referred to as the “ Margin Deadlines ”). The failure of Buyer, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Buyer to do so at a later date. Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.

c. In the event that a Margin Deficit exists with respect to any Purchased Asset, Contributed REO Property or Transaction Mortgage Loan, Buyer may retain any funds received by it to which the Seller would otherwise be entitled hereunder, which funds (i) shall be held by Buyer against the related Margin Deficit for a Transaction Mortgage Loan or Contributed REO Property and (ii) will be applied by Buyer against the Allocated Repurchase Price related to such Purchased Asset, Contributed REO Property or Transaction Mortgage Loan for which the related Margin Deficit remains otherwise unsatisfied. Notwithstanding the foregoing, the Buyer retains the right, in its sole discretion, to make a Margin Call in accordance with the provisions of this Section 6.

7. Income Payments

a. All Income received on account of the Purchased Assets, Contributed REO Property and Transaction Mortgage Loans during the term of a Transaction shall be the property of Buyer.

b. Notwithstanding that certain Transaction Mortgage Loans and Contributed REO Property are owned by the related Transaction Subsidiary or REO Subsidiary, as applicable, the Seller, as Nominee, shall be listed as the mortgagee of record and shall deposit all claims submitted on account of Early Buyout HECM Loans into the payee account (the “ Clearing Account ”) and shall transfer all such amounts so received into the Inbound Account as set forth below.

c. With respect to Early Buyout HECM Loans and Contributed REO Properties, Seller shall and shall cause the applicable Servicer to deposit all Income related to any (x) prepayment of principal in full with respect to any Transaction Mortgage Loan, (y) HUD claim payments or (z) liquidation proceeds from any REO Property into the Inbound Account (x) within one (1) Business Day following receipt thereof if received by 3:00 p.m. (New York City time) and (y) within two (2) Business Days following receipt thereof if received after 3:00 p.m. (New York City time). To the extent HUD deducts from amounts otherwise due on account of an Early Buyout HECM Loan subject to the Agreement, any amounts owing by Servicer to HUD, Seller shall give prompt written notice thereof to Buyer and shall deposit, within one (1) Business Day following notice or knowledge of such deduction by HUD, such deducted amounts into the Inbound Account. Provided no Event of Default has occurred and is continuing, funds deposited in the Inbound Account shall be held therein and shall be applied on each Payment Date following receipt thereof prior to the occurrence of an Event of Default as follows:

(1) first, to Buyer on account of unpaid fees, expenses, indemnity amounts, Price Differential and any other amounts then due and owing to the Buyer (including, without limitation, any amount sufficient to eliminate any outstanding Margin Deficit ) from the Seller under this Agreement; and

(2) second, all remaining amounts (if any), to the Seller.

d. Notwithstanding any provision to the contrary in this Section 7, (i) upon the occurrence and continuance of an Event of Default or on the Termination Date, Seller shall and shall cause Servicer to deposit all Income to the Inbound Account upon receipt thereof and Buyer shall apply all Income in the Inbound Account to reduce the Obligations hereunder to zero; and (ii) within one (1) Business Day after receipt by Seller of any (x) prepayment of principal in full with respect to any Transaction Mortgage Loan, (y) HUD claims payments or (z) liquidation proceeds from any REO Property, Seller shall remit such amount to Buyer and Buyer shall apply any such amount received by Buyer to reduce the amount of the Allocated Repurchase Price due upon termination of the related Transaction.

8. Security Interest

a. Conveyance; Security Interest; REO Property .

(1) On each Purchase Date, Seller hereby sells, assigns and conveys all of Seller’s rights and interests in the Purchased Assets, including, without limitation, the beneficial interests in Transaction Mortgage Loans and Contributed REO Property identified on the related Asset Schedule, the related Repurchase Assets and the related Servicing Rights and Asset Documents. Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, and in any event, Seller hereby pledges to Buyer as security for the performance by Seller of its Obligations and hereby grants, assigns and pledges to Buyer a fully perfected first priority security interest in the Purchased Assets, including related Servicing Rights and Asset Documents, the beneficial interest in the Transaction Mortgage Loans and Contributed REO Property, any Agency Security or right to receive such Agency Security when issued to the extent backed by any of the Purchased Assets, Transaction Mortgage Loans and Contributed REO Property, the Records, the Program Agreements (to the extent such Program Agreements and Seller’s rights thereunder relate to the Purchased Assets, Transaction Mortgage Loans or Contributed REO Property), any related Take‑out Commitments, any Property relating to the Purchased Assets, Transaction Mortgage Loans or Contributed REO Property, all insurance policies and insurance proceeds relating to any Purchased Asset, Transaction Mortgage Loan, Contributed REO Property or the related Mortgaged Property, including, but not limited to, any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements (if any), Income, Interest Rate Protection Agreements, accounts (including any interest of Seller in escrow accounts) and any other contract rights (other than those rights retained by Ginnie Mae pursuant to the Ginnie Mae Guide), instruments, accounts, payments, rights to payment (including payments of interest or finance charges), general intangibles related to the Purchased Assets, and other assets relating to the Purchased Assets, Transaction Mortgage Loans or Contributed REO Property (including, without limitation, any other accounts) or any interest in the Purchased Assets, Transaction Mortgage Loans or Contributed REO Property, and any proceeds (including the related securitization proceeds) and distributions with respect to any of the foregoing and any other property, rights, title or interests as are specified on a Transaction Request and/or Trust Receipt and/or delivered to Buyer pursuant to a Transaction, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “ Primary Repurchase Assets ”).

(2) In order to further secure the Obligations hereunder, REO Subsidiary hereby grants, assigns and pledges to Buyer a fully perfected first priority security interest in the REO Properties, Transaction Mortgage Loans, all related Servicing Rights, Asset Documents, the Records, the Program Agreements (to the extent such Program Agreements and REO Subsidiary’s rights thereunder relate to the REO Properties and Transaction Mortgage Loans, as applicable), any related Take-out Commitments, any Property relating to the REO Properties and Transaction Mortgage Loans, as applicable, all insurance policies and insurance proceeds relating to any REO Property and Transaction Mortgage Loan, as applicable, including, but not limited to, any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements (if any), Income, Interest Rate Protection Agreements, accounts (including any interest of REO Subsidiary in escrow accounts) and any other contract rights (other than those rights retained by Ginnie Mae pursuant to the Ginnie Mae Guide), instruments, accounts, payments, rights to payment (including payments of interest or finance charges), general intangibles and other assets relating to the REO Properties and Transaction Mortgage Loans, as applicable (including, without limitation, any other accounts) or any interest in the REO Properties and Transaction Mortgage Loans, as applicable, and any proceeds (including the related securitization proceeds) and distributions with respect to any of the foregoing and any other property, rights, title or interests as are specified on a Transaction Request and/or Trust Receipt and/or delivered to Buyer pursuant to a Transaction, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “ REO Subsidiary Repurchase Assets ”).

(3) In order to further secure the Obligations hereunder, Transaction Subsidiary hereby grants, assigns and pledges to Buyer a fully perfected first priority security interest in the Transaction Mortgage Loans, all related Servicing Rights, Asset Documents, any Agency Security or right to receive such Agency Security when issued to the extent backed by any of the Transaction Mortgage Loans, the Records, the Program Agreements (to the extent such Program Agreements and Transaction Subsidiary’s rights thereunder relate to Transaction Mortgage Loans), any related Take-out Commitments, any Property relating to the Transaction Mortgage Loans, all insurance policies and insurance proceeds relating to any Transaction Mortgage Loan or the related Mortgaged Property, including, but not limited to, any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements (if any), Income, Interest Rate Protection Agreements, accounts (including any interest of Transaction Subsidiary in escrow accounts) and any other contract rights (other than those rights retained by Ginnie Mae pursuant to the Ginnie Mae Guide), instruments, accounts, payments, rights to payment (including payments of interest or finance charges), general intangibles and other assets relating to the Transaction Mortgage Loans (including, without limitation, any other accounts) or any interest in the Transaction Mortgage Loans, and any proceeds (including the related securitization proceeds) and distributions with respect to any of the foregoing and any other property, rights, title or interests as are specified on a Transaction Request and/or Trust Receipt and/or delivered to Buyer pursuant to a Transaction, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “ Transaction Subsidiary Repurchase Assets ” and together with the REO Subsidiary Repurchase Assets, the “ Additional Repurchase Assets ” and together with the Primary Repurchase Assets and the REO Subsidiary Repurchase Assets, the “ Repurchase Assets ”). The provisions of paragraphs (a), (b) and (c) are intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and transactions hereunder as defined under Section 101(47)(v) and 741(7)(xi) of the Bankruptcy Code, and are further intended to be a guaranty of the Obligations to the Buyer by the REO Subsidiary and the Transaction Subsidiary, as applicable, to the extent of their respective Repurchase Assets.

b. Release of Security Interest upon Sale . Notwithstanding the foregoing, upon the repurchase of any Purchased Asset by the Seller or release of a Contributed REO Property from the REO Subsidiary or release of a Transaction Mortgage Loan from the Transaction Subsidiary or the sale of a Purchased Asset, Contributed REO Property or Transaction Mortgage Loan to any third party and receipt by Buyer in each case of the related Repurchase Price, the security interest of Buyer in such Purchased Asset, Contributed REO Property or Transaction Mortgage Loan and all related Repurchase Assets will be released with no further action on the part of Buyer, Seller, REO Subsidiary or Transaction Subsidiary.

c. Acquisition of REO Property . If the REO Subsidiary acquires any REO Property by extinguishing any Mortgage Note in connection with the foreclosure of the related Transaction Mortgage Loan, transferring the real property underlying the Mortgage Note in lieu of foreclosure or otherwise transferring of such real property, the REO Subsidiary shall cause such real property to be taken by Deed, or by means of such instruments as is provided by the Governmental Authority governing the transfer, or right to request transfer and issuance of the Deed, or such instrument as is provided by the related Governmental Authority, or to be acquired through foreclosure sale in the jurisdiction in which the REO Property is located, in the name of the Nominee in accordance with Section 40 hereof.

d. Purchased Assets as Securities . The parties acknowledge and agree that the REO Subsidiary Interests and Transaction Subsidiary Interests shall constitute and remain “securities” as defined in Section 8-102 of the Uniform Commercial Code; Seller Parties covenant and agree that (i) the REO Subsidiary Interests and the Transaction Subsidiary Interests are not and will not be dealt in or traded on securities exchanges or securities markets, and (ii) the REO Subsidiary Interests and the Transaction Subsidiary Interests are not and will not be investment company securities within the meaning of Section 8-103 of the Uniform Commercial Code. Seller shall, at its sole cost and expense, take all steps as may be necessary in connection with the re-registration, indorsement, transfer, delivery and pledge of all REO Subsidiary Interests and Transaction Subsidiary Interests to Buyer.

e. Additional Interests . If Seller shall, as a result of ownership of the REO Subsidiary Interests and/or the Transaction Subsidiary Interests, become entitled to receive or shall receive any certificate evidencing any REO Subsidiary Interests and/or Transaction Subsidiary Interests or other equity interest, any option rights, or any equity interest in the REO Subsidiary Interests and/or Transaction Subsidiary Interests, whether in addition to, in substitution for, as a conversion of, or in exchange for the REO Subsidiary Interests and/or Transaction Subsidiary Interests, or otherwise in respect thereof, Seller shall accept the same as the Buyer’s agent, hold the same in trust for the Buyer and deliver the same forthwith to the Buyer in the exact form received, duly indorsed by the Seller to the Buyer, if required, together with an undated transfer power, if required, covering such certificate duly executed in blank, or if requested, deliver Certificates re-registered in the name of Buyer, to be held by the Buyer subject to the terms hereof as additional security for the Obligations. Any sums paid upon or in respect of the REO Subsidiary Interests and/or the Transaction Subsidiary Interests upon the liquidation or dissolution of the REO Subsidiary and/or the Transaction Subsidiary, or otherwise shall be paid over to the Buyer as additional security for the Obligations. If following the occurrence and during the continuation of an Event of Default, any sums of money or property so paid or distributed in respect of the REO Subsidiary Interests and/or the Transaction Subsidiary Interests shall be received by Seller, Seller shall, until such money or property is paid or delivered to the Buyer, hold such money or property in trust for the Buyer segregated from other funds of Seller as additional security for the Obligations.

f. Voting Rights . Subject to this Section, Buyer as the holder, may exercise all voting and member rights with respect to the Purchased Assets. Notwithstanding the foregoing, so long as no Event of Default has occurred and is continuing, (a) Buyer shall notify and consult with Seller prior to the exercise of any rights under this Section, and (b) Seller will have the right to direct Buyer, with respect to any action or inaction related to the Purchased Assets (in the event any action is requested or required to be taken), and the Buyer shall comply with such direction unless the Buyer determines in its good faith discretion that such compliance with such direction will result in a Material Adverse Effect or conflict with any Program Agreement. In no event shall Buyer be required to vote or exercise any right or take any other action which would impair the Purchased Assets or which would be inconsistent with or result in a violation of any provision of this Agreement. Without limiting the generality of the foregoing, Buyer shall have no obligation (other than as expressly set forth in this Agreement) to (i) vote to enable, or take any other action to permit, the REO Subsidiary and/or the Transaction Subsidiary to issue any interests of any nature or to issue any other interests convertible into or granting the right to purchase or exchange for any interests of such entity; (ii) sell, assign, transfer, exchange or otherwise dispose of, or grant any option with respect to, the Purchased Assets; or (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, the Seller’s interest in the Purchased Assets except for the Lien provided for by this Agreement. In no event shall Buyer enter into any agreement or undertaking restricting the right or ability of Seller to sell, assign or transfer the Purchased Assets prior to an Event of Default. For the avoidance of doubt, prior to the occurrence and continuance of an Event of Default, neither the Transaction Subsidiary nor the REO Subsidiary shall need the consent of Buyer with respect to the day-to-day operations thereof and any related resolution required to verify authority for such transactions, so long as such day-to-day operations are performed in accordance with the terms of the Transaction Subsidiary Agreement, the REO Subsidiary Agreement and this Agreement, as applicable.

g. Servicing Rights . Each Seller Party acknowledges that it has no rights to service the Transaction Mortgage Loans and Contributed REO Properties. Without limiting the generality of the foregoing and in the event that any Seller Party is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, subject to any rights retained by Ginnie Mae in the Servicing Rights or any prohibition on the grant of a security interest in the Servicing Rights without the prior express written approval of Ginnie Mae, each Seller Party grants, assigns and pledges to Buyer a security interest in the Servicing Rights and proceeds related thereto and in all instances, whether now owned or hereafter acquired, now existing or hereafter created. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.

h. Financing Statements . Seller Parties agree to execute, deliver and/or file such documents and perform such acts as may be reasonably necessary to fully perfect Buyer’s security interest created hereby. Furthermore, the Seller Parties hereby authorize the Buyer to file financing statements relating to the Repurchase Assets, as the Buyer, at its option, may deem appropriate. The Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 8.

i. Powers of Attorney . In addition to the foregoing, each Seller Party agrees to execute a Power of Attorney, in the form of Exhibit D hereto, to be delivered on the date hereof which may be used only in accordance with Section 28 hereof.

j. Intent . The foregoing provisions in this Section 8 are each intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.

k. The parties acknowledge and agree that the intent of the parties is for the Seller to grant a Lien to Buyer on the Additional Repurchase Assets prior to conveying them to the Transaction Subsidiary and/or the REO Subsidiary and that the Transaction Subsidiary or the REO Subsidiary, as applicable, is acquiring any Additional Repurchase Asset subject to and subordinate to Buyer’s Lien hereunder. It is further intended that simultaneous with the acquisition of the Transaction Subsidiary of the Transaction Subsidiary Repurchase Assets or the REO Subsidiary of the REO Subsidiary Assets, as applicable, the Transaction Subsidiary intends to grant a Lien on such Transaction Subsidiary Repurchase Assets to Buyer hereunder and the REO Subsidiary intends to grant a Lien on such REO Subsidiary Repurchase Assets to Buyer hereunder.

9. Payment and Transfer

Unless otherwise mutually agreed in writing, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction, set‑off or counterclaim, to Buyer at the following account maintained by Buyer: Account No. 31018027 , for the account of CS BUYER/REVERSE MORTG INBOUND, Citibank, ABA No. 021 000 089 or such other account as Buyer shall specify to Seller in writing. Each Seller Party acknowledges that it has no rights of withdrawal from the foregoing account. All Repurchase Assets transferred by one party hereto to the other party shall be in the case of a purchase by Buyer in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as Buyer may reasonably request. All Repurchase Assets shall be evidenced by a Trust Receipt or Certificate. Any Repurchase Price received by Buyer after 2:00 p.m. (New York City time) shall be deemed received on the next succeeding Business Day.

10. Conditions Precedent

a. Initial Transaction . As conditions precedent to the initial Transaction, Buyer shall have received on or before the day of such initial Transaction the following, in form and substance satisfactory to Buyer and, as applicable, duly executed by each Seller Party and each other party thereto:

(1) Program Agreements . The Program Agreements duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver.

(2) Security Interest . Evidence that all other actions necessary or, in the opinion of Buyer, desirable to perfect and protect Buyer’s interest in the Purchased Assets and other Repurchase Assets have been taken, including, without limitation, (i) duly authorized and filed Uniform Commercial Code financing statements on Form UCC‑1 and UCC-3, as applicable and (ii) delivery to the Custodian of each original Certificate re-registered into the name of Buyer and evidence that any Transaction Subsidiary Interests or REO Subsidiary Interests are evidenced by a certificate in a registered form.

(3) Organizational Documents . A certificate of the duly authorized Person of each Seller Party, attaching certified copies of each Seller Party’s organizational documents and resolutions approving the Program Agreements and transactions thereunder (either specifically or by general resolution) and all documents evidencing other necessary action or governmental approvals as may be required in connection with the Program Agreements.

(4) Good Standing Certificate . A certified copy of a good standing certificate from the jurisdiction of organization of each Seller Party, dated as of no earlier than the date ten (10) Business Days prior to the Purchase Date with respect to the initial Transaction hereunder.

(5) Incumbency Certificate . An incumbency certificate of each Seller Party, certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Program Agreements.

(6) Opinion of Counsel . An opinion of each Seller Party’s counsel, in form and substance acceptable to Buyer, including, without limitation (i) the enforceability opinion with respect to each Seller Party, including an Investment Company Act opinion indicating that no Seller Party nor any of its Subsidiaries is an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended (the “ Investment Company Act ”) and that it is not necessary to register the REO Subsidiary or Transaction Subsidiary under the Investment Company Act, for reasons specified in such opinion other than the exemption provided by Section 3(c)(1) or Section 3(c)(7) thereof; (ii) matters of Delaware law, or other applicable law, with respect to the Transaction Subsidiary and the Trustee; and (iii) a Bankruptcy Code opinion of counsel to Seller Parties with respect to matters outlined in Section 26.e hereof.

(7) Underwriting Guidelines . A true and correct copy of the Underwriting Guidelines.

(8) Fees . Payment of any fees due to Buyer hereunder.

(9) Reserved .

b. All Transactions . The obligation of Buyer to enter into each Transaction pursuant to this Agreement is subject to the following conditions precedent:

(1) Due Diligence Review . Without limiting the generality of Section 34 hereof, Buyer shall have completed, to its satisfaction, its due diligence review of the related Purchased Assets, Contributed REO Properties, Seller, REO Subsidiary, Transaction Mortgage Loans, Transaction Subsidiary and the Servicer.

(2) Required Documents .

(a) With respect to each Transaction Mortgage Loan that is not a Wet‑Ink Mortgage Loan, the Asset File has been delivered to the Custodian in accordance with the Custodial Agreement.

(b) With respect to each Wet‑Ink Mortgage Loan, the Wet‑Ink Documents have been delivered to Buyer or Custodian, as the case may be, in accordance with the Custodial Agreement.

(c) With respect to each Correspondent Loan which the Correspondent Seller is selling to Seller simultaneously with such Correspondent Loan becoming a Transaction Mortgage Loan, Seller shall have delivered to the Buyer the Seller Wire Instruction Data in accordance with the terms of the Custodial Agreement.

(d) With respect to each Correspondent Loan, Buyer shall have received a Correspondent Seller Release for such Transaction Mortgage Loan that is duly executed and delivered by the related Correspondent Seller by no later than the time set forth in Section 3.b hereof.

(3) Transaction Documents . Buyer or its designee shall have received on or before the day of such Transaction (unless otherwise specified in this Agreement) the following, in form and substance satisfactory to Buyer and (if applicable) duly executed:

(a) A Transaction Request and Asset Schedule delivered by Seller pursuant to Section 3.b hereof.

(b) The Request for Certification and the related Asset Schedule delivered by Seller, and the Trust Receipt and Custodial Asset Schedule delivered by Custodian.

(c) Such certificates, customary opinions of counsel or other documents as Buyer may reasonably request, provided that such opinions of counsel shall not be required routinely in connection with each Transaction but shall only be required from time to time as deemed necessary by Buyer in good faith; provided further that Seller may provide such opinions of counsel or other documents to Buyer within five (5) Business Days following such Purchase Date.

(4) No Default . No Default or Event of Default shall have occurred and be continuing.

(5) Requirements of Law . Buyer shall not have determined that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions with a Pricing Rate based on Base Rate.

(6) Representations and Warranties . Both immediately prior to the related Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by each Seller Party in each Program Agreement shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).

(7) Electronic Tracking Agreement . To the extent any Transaction Mortgage Loans are registered on the MERS® System, an Electronic Tracking Agreement entered into, duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver.

(8) Releases . Buyer shall have received a warehouse lender’s release or other document acceptable to Buyer in its sole discretion evidencing the release and conveyance of the loan to Seller.

(9) Material Adverse Change . None of the following shall have occurred and/or be continuing (it being understood that Buyer will make the following determinations acting in good faith):

(a) Credit Suisse AG, New York Branch’s corporate bond rating as calculated by S&P or Moody’s has been lowered or downgraded to a rating below investment grade by S&P or Moody’s;

(b) an event or events shall have occurred in the good faith determination of Buyer resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in Buyer not being able to finance Transaction Mortgage Loans or REO Properties through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or

(c) an event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by mortgage loans or an event or events shall have occurred resulting in Buyer not being able to sell securities backed by mortgage loans at prices which would have been reasonable prior to such event or events; or

(d) there shall have occurred a material adverse change in the financial condition of Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of Buyer to fund its obligations under this Agreement.

(10) UCC-3 Filing . Seller shall have filed or cause to be filed a Uniform Commercial Code Financing Statement on form UCC-3 to amend that certain filing No. 2012-4577468 in form and substance acceptable to Buyer in its sole discretion no later than ten (10) Business Days following the Effective Date.

(11) Insurance . Evidence that Seller has added Buyer as an additional loss payee under the Seller’s Fidelity Insurance no later than ten (10) Business Days following the Effective Date.

11. Program; Costs

a. Seller shall reimburse Buyer for any of Buyer’s reasonable out-of-pocket costs, including due diligence review costs and reasonable attorney’s fees, incurred by Buyer in determining the acceptability to Buyer of any Repurchase Assets; provided that Buyer shall provide notice to Seller at such time such out-of-pocket costs and expenses reaches $25,000; provided, however, that failure to deliver such notice shall not affect Seller’s obligations hereunder. Seller shall also pay, or reimburse Buyer if Buyer shall pay, any termination fee, which may be due any Servicer. Seller shall pay the fees and expenses of Buyer’s counsel in connection with the Program Agreements. Legal fees for any subsequent amendments to this Agreement or related documents shall be borne by Seller. Seller shall pay ongoing custodial fees and expenses as set forth in the Custodial Agreement, and any other ongoing fees and expenses under any other Program Agreement.

b. If Buyer determines, in good faith, that, due to the introduction of, any change in, or the compliance by Buyer with (i) any eurocurrency reserve requirement or (ii) the interpretation of any law, regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be an increase in the cost to Buyer in engaging in the present or any future Transactions, then Seller agrees to pay to Buyer, from time to time, upon demand by Buyer (with a copy to Custodian) the actual cost of additional amounts as specified by Buyer to compensate Buyer for such increased costs.

c. With respect to any Transaction, Buyer may conclusively rely upon, and shall incur no liability to any Seller Party in acting upon, any request or other communication that Buyer reasonably believes to have been given or made by a person authorized to enter into a Transaction on such Seller Party’s behalf, whether or not such person is listed on the certificate delivered pursuant to Section10.a(5) hereof.

d. Notwithstanding the assignment of the Program Agreements with respect to each Purchased Asset to Buyer, each Seller Party agrees and covenants with Buyer to enforce diligently their rights and remedies set forth in the Program Agreements.

e. (i) Any payments made by Seller to Buyer or a Buyer assignee hereunder or any Program Agreement shall be made free and clear of and without deduction or withholding for any Taxes, except as required by applicable law. If Seller shall be required by applicable law (as determined in the good faith discretion of the applicable withholding agent) to deduct or withhold any Tax from any sums payable to Buyer or a Buyer assignee, then (i) the Seller shall make such deductions or withholdings and pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law; (ii) to the extent the withheld or deducted Tax is an Indemnified Tax or Other Tax, the sum payable shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 11(e)) the Buyer or Buyer assignee receives an amount equal to the sum it would have received had no such deductions or withholdings been made; and (iii) the Seller shall notify the Buyer or Buyer assignee of the amount paid and shall provide the original or a certified copy of a receipt issued by the relevant Governmental Authority evidencing such payment within ten (10) days thereafter. Seller shall otherwise indemnify Buyer, within ten (10) days after demand therefor, for any Indemnified Taxes or Other Taxes imposed on Buyer (including Indemnified Taxes and Other Taxes imposed or asserted on or attributable to amounts payable under this Section 11(e)) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally asserted by the relevant Governmental Authority.

(ii) Buyer and any Buyer assignee shall deliver to the Seller, at the time or times reasonably requested by the Seller, such properly completed and executed documentation reasonably requested by the Seller as will permit payments made hereunder to be made without withholding or at a reduced rate of withholding. In addition, Buyer and any Buyer assignee, if reasonably requested by Seller, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Seller as will enable the Seller to determine whether or not such Buyer or Buyer assignee is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in this Section 11, the completion, execution and submission of such documentation (other than such documentation in Section 11(e)(ii)(A), (B) and (C) below) shall not be required if in the Buyer’s or Buyer’s assignee’s judgment such completion, execution or submission would subject such Buyer or Buyer assignee to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Buyer or Buyer assignee. Without limiting the generality of the foregoing, Buyer or Buyer assignee shall deliver to the Seller, to the extent legally entitled to do so:

(A) in the case of a Buyer or Buyer assignee which is a “U.S. Person” as defined in section 7701(a)(30) of the Code, a properly completed and executed Internal Revenue Service (“IRS”) Form W-9 certifying that it is not subject to U.S. federal backup withholding tax;

(B) in the case of a Buyer or Buyer assignee which is not a “U.S. Person” as defined in Code section 7701(a)(30): (I) a properly completed and executed IRS Form W-8BEN or W-8ECI, as appropriate, evidencing entitlement to a zero percent or reduced rate of U.S. federal income tax withholding on any payments made hereunder, (II) in the case of such non-U.S. Person claiming exemption from the withholding of U.S. federal income tax under Code sections 871(h) or 881(c) with respect to payments of “portfolio interest,” a duly executed certificate (a “ U.S. Tax Compliance Certificate ”) to the effect that such non-U.S. Person is not (x) a “bank” within the meaning of Code section 881(c)(3)(A), (y) a “10 percent shareholder” of Seller or affiliate thereof, within the meaning of Code section 881(c)(3)(B), or (z) a “controlled foreign corporation” described in Code section 881(c)(3)(C), (III) to the extent such non-U.S. person is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if such non-U.S. person is a partnership and one or more direct or indirect partners of such non-U.S. person are claiming the portfolio interest exemption, such non-U.S. person may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner, and (IV) executed originals of any other form or supplementary documentation prescribed by law as a basis for claiming exemption from or a reduction in United States federal withholding tax together with such supplementary documentation as may be prescribed by law to permit the Seller to determine the withholding or deduction required to be made.

(C) if a payment made to a Buyer or Buyer assignee under this Agreement would be subject to U.S. federal withholding tax imposed by FATCA if such Buyer or assignee were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Buyer or assignee shall deliver to the Seller at the time or times prescribed by law and at such time or times reasonably requested by the Seller such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Seller as may be necessary for the Seller to comply with their obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 11(e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

The applicable IRS forms referred to above shall be delivered by each applicable Buyer or Buyer assignee on or prior to the date on which such person becomes a Buyer or Buyer assignee under this Agreement, as the case may be, and upon the obsolescence or invalidity of any IRS form previously delivered by it hereunder.

f. Any indemnification payable by Seller to Buyer or any Buyer assignee for Indemnified Taxes or Other Taxes that are imposed on Buyer or a Buyer assignee, as described in Section 11(e)(i) hereof, shall be paid by Seller within ten (10) days after demand therefor. A certificate as to the amount of such payment or liability delivered to the Seller by Buyer or a Buyer assignee shall be conclusive absent manifest error.

g. Each party’s obligations under this Section 11 shall survive any assignment of rights by, or the replacement of, Buyer or a Buyer assignee, and the repayment, satisfaction or discharge of all obligations under any Program Agreement.

h. Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local income and franchise taxes to treat each Transaction as indebtedness of Seller that is secured by the Purchased Assets, Transaction Mortgage Loans and Contributed REO Property, and the Purchased Assets as owned by Seller and the Transaction Mortgage Loans as owned by Transaction Subsidiary and the Contributed REO Properties as owned by REO Subsidiary in the absence of an Event of Default by Seller. Buyer and Seller agree that they will treat and report for all tax purposes the Transactions entered into hereunder as one or more loans from Buyer to Seller secured by the Purchased Assets, Transaction Mortgage Loans and Contributed REO Properties, unless otherwise prohibited by law or upon a final determination by any taxing authority that the Transactions are not loans for tax purposes.

12. Servicing

a. Each Seller Party, on Buyer’s behalf, shall contract with Servicer to, or if Seller is the Servicer, Seller shall, service the Transaction Mortgage Loans and Contributed REO Properties for each Seller Party hereunder consistent with the degree of skill and care that Seller customarily requires with respect to similar Transaction Mortgage Loans and Contributed REO Properties owned or managed by it and in accordance with Accepted Servicing Practices. Each Seller Party and Servicer shall (i) comply with all applicable federal, state and local laws and regulations, (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities (if any) hereunder and (iii) not impair the rights of Buyer in any Transaction Mortgage Loan or Contributed REO Property or any payment thereunder. Upon the occurrence and during the continuance of an Event of Default, Buyer may terminate the servicing of any Transaction Mortgage Loan or Contributed REO Property with the then-existing Servicer in accordance with Section 12.e hereof.

b. Each Seller Party shall and shall cause the Servicer to hold or cause to be held all escrow funds collected by such Seller Party and Servicer with respect to any Transaction Mortgage Loans and Contributed REO Properties in trust accounts and shall apply the same for the purposes for which such funds were collected.

c. Reserved .

d. In the event there is a third party Servicer other than Seller and upon Buyer’s request, Seller shall provide promptly to Buyer a Servicer Notice addressed to and agreed to by the Servicer of the related Transaction Mortgage Loans and Contributed REO Properties, advising such Servicer of such matters as Buyer may reasonably request, including, without limitation, recognition by the Servicer of Buyer’s interest in such Transaction Mortgage Loans and Contributed REO Properties and the Servicer’s agreement that upon receipt of notice of an Event of Default from Buyer, it will follow the instructions of Buyer with respect to the Transaction Mortgage Loans and Contributed REO Properties and any related Income with respect thereto.

e. Upon the occurrence and during the continuance of an Event of Default and upon written notice, Buyer shall have the right to immediately terminate the Servicer’s right to service the Transaction Mortgage Loans and Contributed REO Properties without payment of any penalty or termination fee. Each Seller Party and the Servicer shall cooperate in transferring the servicing of the Transaction Mortgage Loans and Contributed REO Properties to a successor servicer appointed by Buyer in its sole discretion. For the avoidance of doubt any termination of the Servicer’s rights to service by the Buyer as a result of an Event of Default shall be deemed part of an exercise of the Buyer’s rights to cause the liquidation, termination or acceleration of this Agreement.

f. If any Seller Party should discover that, for any reason whatsoever, such Seller Party or any entity responsible to such Seller Party for managing or servicing any such Transaction Mortgage Loan or Contributed REO Property has failed to perform fully such Seller Party’s obligations under the Program Agreements or any of the obligations of such entities with respect to the Transaction Mortgage Loans and Contributed REO Properties, such Seller Party shall promptly notify Buyer.

g. Reserved .

h. For the avoidance of doubt, the Seller Parties do not retain any economic rights to the servicing of the Transaction Mortgage Loans and Contributed REO Properties; provided that the Seller shall and shall cause the Servicer to continue to service the Transaction Mortgage Loans and Contributed REO Properties hereunder as part of its Obligations hereunder. As such, each Seller Party expressly acknowledges that the Transaction Mortgage Loans are transferred to the Transaction Subsidiary and pledged to Buyer on a “servicing released” basis and the Contributed REO Property is transferred to REO Subsidiary on a “servicing released” basis and pledged to Buyer on a “servicing released” basis.

13. Representations and Warranties

a. Seller represents and warrants to Buyer as of the date hereof and as of each Purchase Date for any Transaction that:

(1) Seller Party Existence . Seller has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware. REO Subsidiary has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware. Transaction Subsidiary is a common law trust.

(2) Licenses . Each Seller Party is duly licensed or is otherwise qualified in each jurisdiction in which it transacts business for the business which it conducts and is not in default of any applicable federal, state or local laws, rules and regulations unless, in either instance, the failure to take such action is not reasonably likely (either individually or in the aggregate) to cause a Material Adverse Effect. Each Seller Party has the requisite power and authority and legal right to originate and purchase Mortgage Loans (as applicable) and to own, sell and grant a lien on all of its right, title and interest in and to the Transaction Mortgage Loans, and to execute and deliver, engage in the transactions contemplated by, and perform and observe the terms and conditions of, each Program Agreement and any Transaction Request. Seller is an FHA Approved Mortgagee and, to the extent Seller is originating VA Loans, a VA Approved Lender.

(3) Power . Each Seller Party has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect.

(4) Due Authorization . Each Seller Party has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Program Agreements, as applicable. Each Program Agreement has been (or, in the case of Program Agreements not yet executed, will be) duly authorized, executed and delivered by such Seller Party, all requisite or other corporate action having been taken, and each is valid, binding and enforceable against such Seller Party in accordance with its terms except as such enforcement may be affected by bankruptcy, by other insolvency laws, or by general principles of equity.

(5) Reserved .

(6) Event of Default . There exists no Event of Default under Section 15 hereof, which default gives rise to a right to accelerate indebtedness as referenced in Section 15 hereof, under any mortgage, borrowing agreement or other instrument or agreement pertaining to indebtedness for borrowed money or to the repurchase of mortgage loans or securities.

(7) Solvency . Each Seller Party is solvent and will not be rendered insolvent by any Transaction and, after giving effect to such Transaction, will not be left with an unreasonably small amount of capital with which to engage in its business. No Seller Party is contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its assets. The amount of consideration being received by Seller upon the sale of the Purchased Assets to Buyer constitutes reasonably equivalent value and fair consideration for such Purchased Assets. The amount of consideration being received by Seller upon the transfer of the Contributed REO Properties to REO Subsidiary constitutes reasonably equivalent value and fair consideration for such Contributed REO Properties. Seller is not transferring any Purchased Assets to Buyer or any Contributed REO Property to REO Subsidiary or any Transaction Mortgage Loans to Transaction Subsidiary with any intent to hinder, delay or defraud any of its creditors. Each transfer of Transaction Mortgage Loans to Transaction Subsidiary constitutes reasonably equivalent value and fair consideration for such Transaction Mortgage Loans.

(8) No Conflicts . The execution, delivery and performance by each Seller Party of each Program Agreement do not conflict with any term or provision of the formation documents or by‑laws of such Seller Party or any law, rule, regulation, order, judgment, writ, injunction or decree applicable to such Seller Party of any court, regulatory body, administrative agency or governmental body having jurisdiction over such Seller Party, which conflict would have a Material Adverse Effect and will not result in any violation of any such mortgage, instrument, agreement or obligation to which such Seller Party is a party.

(9) True and Complete Disclosure . All information, reports, exhibits, schedules, financial statements or certificates of Seller Parties or any Affiliate thereof or any of their officers furnished or to be furnished to Buyer in connection with the initial or any ongoing due diligence of any Seller Party or any Affiliate or officer thereof, and the negotiation, preparation, or delivery of the Program Agreements, when taken as a whole, (i) are true and complete and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading and (ii) with respect to financial statements, present fairly, in all material respects, the financial condition and results of operations of Seller as of the dates and for the periods indicated. All financial statements have been prepared in accordance with GAAP (other than monthly financial statements solely with respect to footnotes, year‑end adjustments and cash flow statements). Except as disclosed in such financial statements or pursuant to Section 17.b hereof, Seller is not subject to any contingent liabilities or commitments that, individually or in the aggregate, have a material possibility of causing a Material Adverse Effect with respect to Seller.

(10) Approvals . No consent, approval, authorization or order of, registration or filing with, or notice to any governmental authority or court is required under applicable law in connection with the execution, delivery and performance by any Seller Party of each Program Agreement.

(11) Litigation . There is no action, proceeding or investigation pending with respect to which any Seller Party has received service of process or, to the best of such Seller Party’s knowledge threatened against it before any court, administrative agency or other tribunal (A) asserting the invalidity of any Program Agreement, (B) seeking to prevent the consummation of any of the transactions contemplated by any Program Agreement or (C) which is reasonably likely to be determined adversely and, if adversely determined, is reasonably likely to materially and adversely affect the validity of the Purchased Assets, Contributed REO Properties or Transaction Mortgage Loans or the performance by it of its obligations under, or the validity or enforceability of any Program Agreement.

(12) Material Adverse Change . There has been no material adverse change in the business, operations, financial condition or properties of any Seller Party or its Affiliates since the date set forth in the most recent financial statements supplied to Buyer as determined by Buyer in its sole discretion.

(13) Ownership . Upon (a) payment of the Purchase Price and the filing of the financing statement and delivery of the Purchased Assets to the Custodian, delivery to Buyer or Custodian of the originals of the Certificates re-registered in Buyer’s name and the Custodian’s receipt of the related Request for Certification, Buyer shall become the sole owner of the Purchased Assets and have a Lien on the related Repurchase Assets free and clear of all liens and encumbrances and (b) transfer of each Transaction Mortgage Loan to Transaction Subsidiary and each Contributed REO Property to REO Subsidiary, the Transaction Subsidiary or REO Subsidiary shall become the sole owner of the Transaction Mortgage Loan or Contributed REO Property, as applicable, transferred thereto, subject to the Lien of the Buyer.

(14) Underwriting Guidelines . The Underwriting Guidelines provided to Buyer are the true and correct Underwriting Guidelines in all material respects of the Seller.

(15) Taxes . Each Seller Party and its Subsidiaries have timely filed all material tax returns that are required to be filed by them and have paid all material taxes, except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided. The charges, accruals and reserves on the books of such Seller Party and its Subsidiaries in respect of taxes and other governmental charges are, in the opinion of Seller, adequate.

(16) Investment Company . (i) No Seller Party nor any of its Subsidiaries is an “investment company”, or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act, as amended and (ii) it is not necessary to register any of REO Subsidiary and Transaction Subsidiary under the Investment Company Act, for specified reasons other than the exemption provided by Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.

(17) Chief Executive Office; Jurisdiction of Organization . On the Effective Date, Seller Parties’ chief executive office, is, and has been, located at 14405 Walters Road, Suite 200, Houston, TX 77014. On the Effective Date, Seller Parties’ jurisdiction of organization is Delaware. Seller shall provide Buyer with thirty (30) days advance notice of any change in any Seller Party’s principal office or place of business or jurisdiction. Seller has no trade name. During the preceding five years, no Seller Party has been known by or done business under any other name, corporate or fictitious, and has not filed or had filed against it any bankruptcy receivership or similar petitions nor has it made any assignments for the benefit of creditors.

(18) Location of Books and Records . The location where Seller Parties keep their books and records, including all computer tapes and records relating to the Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans and the related Repurchase Assets, as applicable, is their chief executive office.

(19) Adjusted Tangible Net Worth . On the Effective Date, Seller’s Adjusted Tangible Net Worth is not less than the amount set forth in Section 2.1 of the Pricing Side Letter.

(20) ERISA . Each Plan to which each Seller Party or its Subsidiaries make direct contributions, and, to the knowledge of such Seller Party, each other Plan and each Multiemployer Plan, is in compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other federal or state law.

(21) Adverse Selection . No Seller Party has selected the Purchased Assets, Contributed REO Properties or Transaction Mortgage Loans in a manner so as to adversely affect Buyer’s interests.

(22) Reserved .

(23) Reserved .

(24) Agency Approvals . With respect to each Agency Security and to the extent necessary, Seller is an FHA Approved Mortgagee and a Ginnie Mae approved issuer. Seller is also approved by Fannie Mae as an approved lender and, to the extent necessary, approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act. In each such case, Seller is in good standing, with no event having occurred or Seller having any reason whatsoever to believe or suspect will occur prior to the issuance of the Agency Security or the consummation of the Take-out Commitment, as the case may be, including, without limitation, a change in insurance coverage which would either make Seller unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the relevant Agency or to HUD or FHA. Should Seller for any reason cease to possess all such applicable approvals, or should notification to the relevant Agency or to HUD or FHA be required, Seller shall so notify Buyer immediately in writing. Seller may, however, surrender or terminate its status as a Fannie Mae lender/servicer, notwithstanding any term, condition or provisions of this Agreement to the contrary.

(25) No Reliance . Each Seller Party has made its own independent decisions to enter into the Program Agreements and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. No Seller Party is relying upon any advice from Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.

(26) Plan Assets . No Seller Party is an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, and the Purchased Assets, Transaction Mortgage Loans and REO Properties are not “plan assets” within the meaning of 29 CFR §2510.3 101 as amended by Section 3(42) of ERISA, in any Seller Party’s hands, and transactions by or with any Seller Party are not subject to any state or local statute regulating investments or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA.

(27) No Prohibited Persons . No Seller Party nor any of its Affiliates, officers, directors, partners or members, is an entity or person (or to such Seller Party’s knowledge, owned or controlled by an entity or person): (i) that is listed in the Annex to, or is otherwise subject to the provisions of Executive Order 13224 issued on September 24, 2001 (“ EO13224 ”); (ii) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“ OFAC ”) most current list of “Specifically Designated National and Blocked Persons” (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); (iii) who commits, threatens to commit or supports “terrorism”, as that term is defined in EO13224; or (iv) who is otherwise affiliated with any entity or person listed above (any and all parties or persons described in clauses (i) through (iv) above are herein referred to as a “ Prohibited Person ”).

(28) Servicing . Seller services in accordance with Accepted Servicing Practices.

(29) Compliance with 1933 Act . Except as contemplated herein, neither Seller nor anyone acting on its behalf has offered, transferred, pledged, sold or otherwise disposed of any Certificate, any interest in any Certificate or any other similar security to, or solicited any offer to buy or accept a transfer, pledge or other disposition of any Certificate, any interest in any Certificate or any other similar security from, or otherwise approached or negotiated with respect to any Certificate, any interest in any Certificate or any other similar security with, any person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action which would constitute a distribution of any Certificate under the 1933 Act or which would render the disposition of any Certificate a violation of Section 5 of the 1933 Act or require registration pursuant thereto.

(30) Margin Regulations . The use of all funds acquired by Seller under this Agreement will not conflict with or contravene any of Regulations D, T, U or X promulgated by the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified.

b. With respect to every Purchased Asset, Contributed REO Property or Transaction Mortgage Loan, Seller represents and warrants to Buyer as of the applicable Purchase Date for any Transaction and each date thereafter that each representation and warranty set forth on Schedule 1-A , Schedule 1-B , Schedule 1-C and Schedule 1-D as applicable, is true and correct.

c. The representations and warranties set forth in this Agreement shall survive transfer of the Purchased Assets and the pledge of Transaction Mortgage Loans and Contributed REO Properties to Buyer and shall continue for so long as the Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans are subject to this Agreement. Upon discovery by Seller, Servicer or Buyer of any breach of any of the representations or warranties set forth in this Agreement, the party discovering such breach shall promptly give notice of such discovery to the others. Buyer has the right to require, in its unreviewable discretion, Seller to repurchase within one (1) Business Day after receipt of notice from Buyer any Purchased Asset or pay the Allocated Repurchase Price for any Contributed REO Property or Transaction Mortgage Loan for which a breach of one or more of the representations and warranties referenced in Section 13.b exists and which breach has a material adverse effect on the value of such Purchased Asset, Contributed REO Property or Transaction Mortgage Loan or the interests of Buyer.

14. Covenants

Seller as to itself, and each Seller Party, as applicable, covenants with Buyer that, during the term of this facility:

a. Litigation . Seller Parties will promptly, and in any event within ten (10) calendar days after service of process on any of the following, give to Buyer notice of all litigation, actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are threatened or pending) or other legal or arbitrable proceedings affecting any Seller Party or any of its Subsidiaries or affecting any of the Property of any of them before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Program Agreements or any action to be taken in connection with the transactions contemplated hereby or (ii) which, individually or in the aggregate, is reasonably likely to be adversely determined, and if adversely determined, could be reasonably likely to have a Material Adverse Effect. Seller will promptly provide notice of any judgment, which with the passage of time, could cause an Event of Default hereunder.

b. Prohibition of Fundamental Changes . No Seller Party shall enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all of its assets (other than the sale or securitization of Mortgage Loans, servicing rights, RMS REO BRC, LLC or interests in real property, foreclosed or otherwise, in the ordinary course of business of a Seller Party) provided, that Seller may merge or consolidate with (a) any wholly owned subsidiary of Guarantor or Seller (other than REO Subsidiary and Transaction Subsidiary), or (b) any other Person if Seller is the surviving corporation; and provided further, that if after giving effect thereto, no Default would exist hereunder.

c. Servicing . Seller Parties shall not cause the Transaction Mortgage Loans and Contributed REO Properties to be serviced by any Servicer other than a Servicer expressly approved in writing by Buyer, which approval shall be deemed granted by Buyer with respect to Seller with the execution of this Agreement.

d. Insurance . The Seller shall continue to maintain, for Seller and its Subsidiaries, Fidelity Insurance in an aggregate amount at least equal to the amount required by Ginnie Mae to be maintained. The Seller shall maintain, for Seller and its Subsidiaries, Fidelity Insurance in respect of its officers, employees and agents, with respect to any claims made in connection with all or any portion of the Repurchase Assets. The Seller shall notify the Buyer of any material change in the terms of any such Fidelity Insurance.

e. No Adverse Claims . Each Seller Party warrants and will defend, and shall cause any Servicer to defend, the right, title and interest of Buyer in and to all Purchased Assets and the related Repurchase Assets, Transaction Mortgage Loans and Contributed REO Properties.

f. Assignment . Except as permitted herein, no Seller Party nor any Servicer shall sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in or lien on or otherwise encumber (except pursuant to the Program Agreements), any of the Purchased Assets, Contributed REO Properties or any Transaction Mortgage Loans or any interest therein to the extent of such Seller Party’s interest therein, provided that this Section shall not prevent any transfer of Purchased Assets, Contributed REO Properties or Transaction Mortgage Loans in accordance with the Program Agreements.

g. Security Interest . Seller Parties shall do all things necessary to preserve the Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans and the related Repurchase Assets, as applicable, so that they remain subject to a first priority perfected security interest hereunder. Without limiting the foregoing, each Seller Party will comply with all rules, regulations and other laws of any Governmental Authority and cause the Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans or the related Repurchase Assets, as applicable, to comply with all applicable rules, regulations and other laws. No Seller Party will allow any default for which such Seller Party is responsible to occur under any Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans or the related Repurchase Assets or any Program Agreement and each Seller Party shall fully perform or cause to be performed when due all of its obligations under any Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans or the related Repurchase Assets and any Program Agreement.

h. Records .

(1) Seller shall collect and maintain or cause to be collected and maintained all Records relating to the Repurchase Assets in accordance with industry custom and practice for assets similar to the Repurchase Assets, including those maintained pursuant to the preceding subparagraph, and all such Records shall be in Custodian’s possession unless Buyer otherwise approves. Except in accordance with the Custodial Agreement, no Seller Party will allow any such papers, records or files that are an original or an only copy to leave Custodian’s possession, except for individual items removed in connection with servicing a specific Transaction Mortgage Loan or REO Property, in which event such Seller Party will obtain or cause to be obtained a receipt from a financially responsible person for any such paper, record or file. Seller Parties or the Servicer of the Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans will maintain all such Records not in the possession of Custodian in good and complete condition in accordance with industry practices for assets similar to the Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans and preserve them against loss.

(2) For so long as Buyer has an interest in or lien on any Purchased Asset, Contributed REO Property or Transaction Mortgage Loan, Seller Parties will hold or cause to be held all related Records in trust for Buyer. Seller Parties shall notify, or cause to be notified, every other party holding any such Records of the interests and liens in favor of Buyer granted hereby.

(3) Upon reasonable advance notice from Custodian or Buyer, Seller Parties shall (x) make any and all such Records available to Custodian or Buyer to examine any such Records, either by its own officers or employees, or by agents or contractors, or both, and make copies of all or any portion thereof, and (y) permit Buyer or its authorized agents to discuss the affairs, finances and accounts of Seller with its chief operating officer and chief financial officer and to discuss the affairs, finances and accounts of Seller with its independent certified public accountants.

i. Books . Each Seller Party shall keep or cause to be kept in reasonable detail books and records of account of its assets and business and shall clearly reflect therein the transfer of Purchased Assets, Transaction Mortgage Loans and REO Properties to Buyer.

j. Approvals . Seller shall maintain all material licenses, permits or other approvals necessary for Seller to conduct its business and to perform its obligations under the Program Agreements.

k. Material Change in Business . Seller shall not make any material change in the nature of its business as carried on at the date hereof.

l. Underwriting Guidelines . Seller shall not permit any material modifications to be made to the Underwriting Guidelines (other than those required by HUD or Ginnie Mae) that will impact either Buyer or the Transaction Mortgage Loans without the prior consent of Buyer (such consent not to be unreasonably withheld). Seller agrees to deliver to Buyer copies of the Underwriting Guidelines in the event that any changes are made to the Underwriting Guidelines following the Effective Date that could reasonably be expected to affect any of the Purchased Assets or Transaction Mortgage Loans.

m. Reserved .

n. Applicable Law . Each Seller Party shall comply with the material requirements of all applicable laws, rules, regulations and orders of any Governmental Authority.

o. Existence . Each Seller Party shall preserve and maintain its legal existence in the State of its formation and all of its material rights, privileges, licenses and franchises.

p. Chief Executive Office; Jurisdiction of Organization . No Seller Party shall move its chief executive office from the address referred to in Section 13.a(17) or change its jurisdiction of organization from the jurisdiction referred to in Section 13.a(17) unless it shall have provided Buyer thirty (30) days’ prior written notice of such change.

q. Taxes . Each Seller Party shall timely file all material tax returns that are required to be filed by it and shall timely pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained.

r. Transactions with Affiliates . Without providing Buyer with not less than forty-five (45) calendar days’ prior written notice of such event, Seller will not, nor shall Seller permit any other Seller Party to, enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (x) otherwise permitted under the Program Agreements or (y) (A) in the ordinary course of such Seller Party’s business and (B) upon fair and reasonable terms no less favorable to such Seller Party than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate.

s. Reserved .

t. HUD and FHA Matters Regarding Income and Accounts with Respect to Early Buyout HECM Loans .

(1) With respect to each Early Buyout HECM Loan that is an FHA Loan, Seller Parties shall cause the Servicer to list the Servicer as the servicer on FHA HERMIT System, as applicable, and the Seller to be identified as the mortgagee of record on such system under mortgagee number 2461100006, and shall cause Servicer to submit all claims to HUD under such applicable number for remittance of amounts to the Clearing Account.

(2) Seller shall maintain HUD and Ginnie Mae approvals (including any waivers). Should Seller for any reason cease to possess a HUD or Ginnie Mae approval (including any waivers), Seller shall so notify Buyer in writing. Buyer hereby acknowledges that Seller has obtained a waiver in respect of its Ginnie Mae approval and that such waiver constitutes a part of its Ginnie Mae approval.

u. Hedging . Seller has entered into Interest Rate Protection Agreements with respect to the HECM Loans (other than in respect of Early Buyout HECM Loans), having terms with respect to protection against fluctuations in interest rates consistent with its hedging policy.

v. True and Correct Information . All information, reports, exhibits, schedules, financial statements or certificates of Seller Parties, any Affiliate thereof or any of their officers furnished to Buyer hereunder and during Buyer’s diligence of Seller Parties are and will be, when taken as a whole, true and complete and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered by Seller to Buyer pursuant to this Agreement shall be prepared in accordance with U.S. GAAP, or, if applicable, to SEC filings, the appropriate SEC accounting regulations.

w. Agency Approvals . Seller shall maintain all Agency Approvals. Seller shall service all Transaction Mortgage Loans in accordance with the applicable Agency Guide. Should Seller, for any reason, cease to possess all such applicable Agency Approvals, or should notification to the relevant Agency or to HUD, the FHA or the VA be required, such Seller shall so notify Buyer immediately in writing. Notwithstanding the preceding sentence, Seller shall take all necessary action to maintain all of their applicable Agency Approvals at all times during the term of this Agreement and each outstanding Transaction.

x. Take‑out Payments . With respect to each Committed Mortgage Loan, Seller shall arrange that all payments under the related Take‑out Commitment shall be paid directly to Buyer at the Inbound Account, or to an account approved by Buyer in writing prior to such payment. With respect to any Take‑out Commitment with an Agency, if applicable, (1) with respect to the wire transfer instructions as set forth in Freddie Mac Form 987 (Wire Transfer Authorization for a Cash Warehouse Delivery) such wire transfer instructions are identical to Buyer’s wire instructions or Buyer has approved such wire transfer instructions in writing in its sole discretion, or (2) the Payee Number set forth on Fannie Mae Form 1068 (Fixed‑Rate, Graduated-Payment, or Growing-Equity Mortgage Loan Schedule) or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Loan Schedule), as applicable, shall be identical to the Payee Number that has been identified by Buyer in writing as Buyer’s Payee Number or Buyer shall have previously approved the related Payee Number in writing in its sole discretion; with respect to any Take‑out Commitment with an Agency, the applicable agency documents shall list Buyer as sole subscriber, unless otherwise agreed to in writing by Buyer, in Buyer’s sole discretion.

y. Reserved .

z. Plan Assets . No Seller Party shall be an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code and the Seller Parties shall not use “plan assets” within the meaning of 29 CFR §2510.3 101, as amended by Section 3(42) of ERISA to engage in this Agreement or any Transaction hereunder. Transactions by or with any Seller Party shall not be subject to any state or local statute regulating investments of or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA.

aa. Sharing of Information . Upon an event which in the good faith discretion of Buyer could result in a Default, the Seller Parties shall allow the Buyer to exchange information related to the Seller and the Transaction hereunder with third party lenders and the Seller shall permit each third party lender to share such information with the Buyer.

bb. Lender Insurance Authority . In the event that Seller has on the date hereof or subsequently receives Lender Insurance Authority, such authority shall not be revoked or suspended.

cc. Quality Control . Seller shall maintain an internal quality control program that verifies, on a regular basis, the existence and accuracy of all legal documents, credit documents, property appraisals, and underwriting decisions related to Mortgage Loans. Such program shall be capable of evaluating and monitoring the overall quality of Seller’s loan production and servicing activities. Such program shall (i) ensure that the Mortgage Loans are originated and serviced in accordance with prudent mortgage banking practices and accounting principles; (ii) guard against dishonest, fraudulent, or negligent acts; and (iii) guard against errors and omissions by officers, employees, or other authorized persons.

dd. Financial Covenants . Seller shall comply with all financial covenants and/or financial ratios set forth in Section 2 of the Pricing Side Letter as of the dates set forth therein.

ee. Most Favored Status . Seller and Buyer each agree that should Seller or any Subsidiary thereof enter into a repurchase agreement, warehouse facility or similar credit facility in each case providing mortgage warehouse financing with any Person (including, without limitation, Buyer or any of its Affiliates) which by its terms provides more favorable financial covenants covering the same or similar matters set forth in Section 14.dd hereof (each, a “ More Favorable Agreement ”) then the Seller shall provide the Buyer with notice of such more favorable terms contained in such More Favorable Agreement within five (5) Business Days of entering into such More Favorable Agreement and the terms of this Agreement or the Pricing Side Letter, as applicable, shall be deemed automatically amended to include such more favorable terms contained in such More Favorable Agreement, such that such terms operate in favor of Buyer or an Affiliate of Buyer; provided, that in the event that such More Favorable Agreement is terminated, upon notice by Seller to Buyer of such termination, the original terms of this Agreement shall be deemed to be automatically reinstated.

ff. SPE Covenant; Separateness . Except as permitted by this Agreement, each of the REO Subsidiary and the Transaction Subsidiary shall (a) own no assets, and will not engage in any business, other than the assets and transactions specifically contemplated by this Agreement; (b) not incur any Indebtedness or obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than pursuant hereto or as permitted hereunder; (c) not make any loans or advances to any third party, and shall not acquire obligations or securities of its Affiliates; (d) pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) only from its own assets; (e) comply with the provisions of its organizational documents; (f) do all things necessary to observe organizational formalities and to preserve its existence, and will not amend, modify or otherwise change its organizational documents, or suffer same to be amended, modified or otherwise changed, without the prior written consent of Buyer; (g) maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates (except that such financial statements may be consolidated to the extent consolidation is required under GAAP or as a matter of applicable law; provided , that (A) appropriate notation shall be made on such financial statements if prepared to indicate the separateness of the REO Subsidiary or Transaction Subsidiary, as applicable, from such Affiliate and to indicate that the REO Subsidiary’s or Transaction Subsidiary’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (B) such assets shall also be listed on the REO Subsidiary’s or Transaction Subsidiary’s own separate balance sheet if prepared and (C) each of the REO Subsidiary and the Transaction Subsidiary shall file its own tax returns if filed, except to the extent consolidation is required or permitted under applicable law); (h) with respect to the REO Subsidiary only, be, and at all times will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, and shall conduct business in its own name; (i) reserved ; (j) to the fullest extent permitted by law, not engage in or suffer any change of ownership, dissolution, winding up, liquidation, consolidation or merger in whole or in part other than such activities that are expressly permitted hereunder; (k) not commingle its funds or other assets with those of any Affiliate or any other Person; (l) maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any affiliate or any other person other than as contemplated hereunder; (m) not and will not hold itself out to be responsible for the debts or obligations of any other Person; (n) cause each of its direct and indirect owners to agree not to (i) file or consent to the filing of any bankruptcy, insolvency or reorganization case or proceeding with respect to the REO Subsidiary or Transaction Subsidiary; institute any proceedings under any applicable insolvency law or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally with respect to the REO Subsidiary or Transaction Subsidiary; (ii) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for such REO Subsidiary or Transaction Subsidiary, or a substantial portion of its properties; or (iii) make any assignment for the benefit of the REO Subsidiary’s or Transaction Subsidiary’s creditors.

15. Events of Default

Each of the following shall constitute an “ Event of Default ” hereunder:

a. Payment Failure . Failure of Seller to (i) make any payment of Price Differential or Repurchase Price or any other sum which has become due, on a Payment Date or a Repurchase Date or otherwise, whether by acceleration or otherwise, under the terms of this Agreement, any other warehouse and security agreement or any other document evidencing or securing Indebtedness of Seller to Buyer or to any Affiliate of Buyer, or (ii) cure any Margin Deficit when due pursuant to Section 6 hereof.

b. Cross Default . Seller, Guarantor or any of their Affiliates shall be in default under (i) any Indebtedness, in the aggregate, in excess of (x) $5,000,000 of Seller or of such Affiliate or (y) $250,000 with respect to REO Subsidiary or Transaction Subsidiary which default (1) involves the failure to pay (subject to any applicable cure period) a matured obligation, or (2) permits the acceleration (subject to any applicable cure period) of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness, or (ii) any other contract or contracts, in the aggregate in excess of (x) $5,000,000 to which Seller, Guarantor or such Affiliate is a party or (y) $250,000 to which REO Subsidiary or Transaction Subsidiary is a party which default (1) involves the failure to pay (subject to any applicable cure period) a matured obligation, or (2) permits the acceleration (subject to any applicable cure period) of the maturity of obligations by any other party to or beneficiary of such contract.

c. Assignment . Assignment or attempted assignment by any Seller Party or Guarantor of this Agreement or any rights hereunder without first obtaining the specific written consent of Buyer, or the granting by any Seller Party of any security interest, lien or other encumbrances on any Purchased Asset, Contributed REO Property or Transaction Mortgage Loan, as applicable, to any person other than Buyer.

d. Insolvency . An Act of Insolvency shall have occurred with respect to any Seller Party, Guarantor or any Affiliate.

e. Material Adverse Change . Any material adverse change in the Property, business, financial condition or operations of any Seller Party, Guarantor or any of their Affiliates shall occur, in each case as determined by Buyer in its sole good faith discretion, or any other condition shall exist which, in Buyer’s sole good faith discretion, constitutes a material impairment of any Seller Party’s ability to perform its obligations under this Agreement or any other Program Agreement.

f. Breach of Financial Representation or Covenant or Obligation . A breach by any Seller Party of any of the representations, warranties or covenants or obligations set forth in Sections 13.a(1) ( Seller Party Existence ), 13.a(7) ( Solvency ), 13.a(12) ( Material Adverse Change ), 13.a(19) ( Adjusted Tangible Net Worth ), 13.a(29) ( Compliance with 1933 Act ), 14.b ( Prohibition of Fundamental Changes ), 14.o ( Existence ), 14.z ( Plan Assets ), 14.dd ( Financial Covenants ), 14.ee ( Most Favored Status ) or 14.ff ( SPE Covenant; Separateness ) of this Agreement.

g. Breach of Non‑Financial Representation or Covenant . A breach by any Seller Party of any other material representation, warranty or covenant set forth in this Agreement (and not otherwise specified in Section 15.f above), if such breach is not cured within five (5) Business Days or with respect to an event set forth in Section 16.c, thirty (30) calendar days, of such Seller Party’s or Guarantor’s knowledge thereof (other than the representations and warranties set forth in Schedule 1-A , Schedule 1-B , Schedule 1-C and Schedule 1-D which shall be considered solely for the purpose of determining the Asset Value, the existence of a Margin Deficit and the obligation to repurchase any Transaction Mortgage Loan or REO Property unless (i) such party shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made, (ii) any such representations and warranties have been determined by Buyer in its sole discretion to be materially false or misleading on a regular basis, or (iii) Buyer, in its sole discretion, determines that such breach of a material representation, warranty or covenant materially and adversely affects (A) the condition (financial or otherwise) of such party, its Subsidiaries or Affiliates; or (B) Buyer’s determination to enter into this Agreement or Transactions with such party, then such breach shall constitute an immediate Event of Default and no Seller Party shall have any cure right hereunder).

h. Change of Control . The occurrence of a Change in Control of a Seller Party.

i. Failure to Transfer . Any Seller Party fails to either (i) transfer the Purchased Assets or pledge the Transaction Mortgage Loans or Contributed REO Properties, as applicable, to Buyer or (ii) transfer Transaction Mortgage Loans to the Transaction Subsidiary or transfer Contributed REO Properties to the REO Subsidiary on the applicable Purchase Date (provided Buyer has tendered the related Purchase Price).

j. Judgment . A final judgment or judgments for the payment of money in excess of (i) $5,000,000 in the aggregate shall be rendered against Seller Parties, Guarantor or any of their Affiliates or (ii) $250,000 against REO Subsidiary or Transaction Subsidiary by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured, within thirty (30) calendar days from the date of entry thereof.

k. Government Action . Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of any Seller Party, Guarantor or any Affiliate thereof, or shall have taken any action to displace the management of any Seller Party, Guarantor or any Affiliate thereof or to curtail its authority in the conduct of the business of any Seller Party, Guarantor or any Affiliate thereof, or takes any action in the nature of enforcement to remove, limit or restrict the approval of any Seller Party, Guarantor or Affiliate as an issuer, buyer or a seller/servicer of Purchased Assets, Contributed REO Properties or Transaction Mortgage Loans or securities backed thereby, and such action provided for in this Section 15.k shall not have been discontinued or stayed within thirty (30) calendar days.

l. Inability to Perform . An officer of any Seller Party or Guarantor shall admit its inability to, or its intention not to, perform any of such Seller Party’s Obligations hereunder or Guarantor’s obligations hereunder or under the Guaranty.

m. Security Interest . This Agreement shall for any reason cease to create a valid, first priority security interest in any material portion of the Purchased Assets or other Repurchase Assets purported to be covered hereby.

n. Financial Statements . Seller’s or Guarantor’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of Seller or Guarantor as a “going concern” or a reference of similar import.

o. Guarantor Breach . A breach by Guarantor of any representation, warranty or covenant set forth in the Guaranty or any other Program Agreement (subject to any applicable cure periods), any “event of default” by Guarantor under the Guaranty, any repudiation of the Guaranty by the Guarantor, or if the Guaranty is not enforceable against the Guarantor.

p. Servicer Default . A Servicer has defaulted under the applicable Servicing Agreement and Seller has not, within thirty (30) calendar days, (i) replaced such Servicer with a successor Servicer approved by Buyer in its sole discretion or (ii) repurchased all Transaction Mortgage Loans subject to the applicable Servicing Agreement.

q. Take-out Payments . A breach by Seller of any representation, warranty or covenant or obligation set forth in Section 14.x immediately upon receipt of written notice to Seller of such breach from Buyer.

r. Custodian . With respect to HECM Loans or Early Buyout HECM Loans, the Custodian fails to maintain its good standing under the Ginnie Mae Guide or FHA Regulations and is not replaced or Seller fails to repurchase all HECM Loans and Early Buyout HECM Loans within sixty (60) calendar days.

An Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing.

16. Remedies Upon Default

In the event that an Event of Default shall have occurred:

a. Buyer may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency of any Seller Party or any Affiliate), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). Buyer shall (except upon the occurrence of an Act of Insolvency of a Seller Party or any Affiliate) give notice to Seller of the exercise of such option as promptly as practicable.

b. If Buyer exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Section, (i) Seller’s obligations in such Transactions to repurchase all Purchased Assets and Repurchase Assets, at the Repurchase Price therefor on the Repurchase Date determined in accordance with subparagraph (a) of this Section, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by Buyer and applied, in Buyer’s sole discretion, to the aggregate unpaid Repurchase Prices for all outstanding Transactions and any other amounts owing by Seller hereunder, and (iii) Seller shall immediately deliver to Buyer the Asset Files relating to any Purchased Assets and Repurchase Assets subject to such Transactions then in a Seller Party’s possession or control.

c. Buyer also shall have the right to obtain physical possession, and to commence an action to obtain physical possession, of all Records and files of each Seller Party relating to the Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans and all documents relating to the Purchased Assets and Repurchase Assets (including, without limitation, any legal, credit or servicing files with respect to the Purchased Assets and Repurchase Assets) which are then or may thereafter come in to the possession of any Seller Party or any third party acting for such Seller Party. To obtain physical possession of any Purchased Assets or Repurchase Assets held by Custodian, Buyer shall present to Custodian a Trust Receipt. Without limiting the rights of Buyer hereto to pursue all other legal and equitable rights available to Buyer for any Seller Party’s failure to perform its obligations under this Agreement, each of the Seller Parties acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and Buyer shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure. The availability of these remedies shall not prohibit Buyer from pursuing any other remedies for such breach, including the recovery of monetary damages.

d. Buyer shall have the right to direct all servicers then servicing any Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans to remit all collections thereon to Buyer, and if any such payments are received by any Seller Party, such Seller Party shall not commingle the amounts received with other funds of such Seller Party and shall promptly pay them over to Buyer. Buyer shall also have the right to terminate any one or all of the servicers then servicing any Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans with or without cause. In addition, Buyer shall have the right to immediately sell the Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans and liquidate all Repurchase Assets. Such disposition of Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans and Repurchase Assets may be, at Buyer’s option, on either a servicing-released or a servicing-retained basis. Buyer shall not be required to give any warranties as to the Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans or Repurchase Assets with respect to any such disposition thereof. Buyer may specifically disclaim or modify any warranties of title or the like relating to the Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans or Repurchase Assets. The foregoing procedure for disposition of the Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans or Repurchase Assets and liquidation of the Repurchase Assets shall not be considered to adversely affect the commercial reasonableness of any sale thereof. Each Seller Party agrees that it would not be commercially unreasonable for Buyer to dispose of the Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans or the Repurchase Assets or any portion thereof by using internet sites that provide for the auction of assets similar to the Purchased Assets, Contributed REO Properties, Transaction Mortgage Loans or the Repurchase Assets, or that have the reasonable capability of doing so, or that match buyers and sellers of assets. Buyer shall be entitled to place the Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans in a pool for issuance of mortgage-backed securities at the then-prevailing price for such securities and to sell such securities for such prevailing price in the open market. Buyer shall also be entitled to sell any or all of such Purchased Assets, Contributed REO Properties and Repurchase Assets individually for the prevailing price. Buyer shall also be entitled, in its sole discretion to elect, in lieu of selling all or a portion of such Purchased Assets and Repurchase Assets, to give the Seller credit for such Purchased Assets and the Repurchase Assets in an amount equal to the Market Value of the Purchased Assets and Repurchase Assets against the aggregate unpaid Repurchase Price and any other amounts owing by the Seller hereunder.

e. Upon the happening of one or more Events of Default, Buyer may apply any proceeds from the liquidation of the Purchased Assets and Repurchase Assets to the Repurchase Prices hereunder and all other Obligations in the manner Buyer deems appropriate in its sole discretion.

f. Each Seller Party shall be liable to Buyer for (i) the amount of all reasonable legal or other expenses (including, without limitation, all costs and expenses of Buyer in connection with the enforcement of this Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel (including the costs of internal counsel of Buyer) incurred in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction.

g. Seller further recognizes that Buyer may be unable to effect a public sale of any or all of the REO Subsidiary Interests or Transaction Subsidiary Interests, by reason of certain prohibitions contained in the 1934 Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not a view to the distribution or resale thereof. In view of the nature of the REO Subsidiary Interests and Transaction Subsidiary Interests, Seller agrees that liquidation of any REO Subsidiary Interests and Transaction Subsidiary Interests may be conducted in a private sale and at such price as Buyer may deem commercially reasonable. Buyer shall be under no obligation to delay a sale of any of the REO Subsidiary Interests or Transaction Subsidiary Interests for the period of time necessary to permit the Seller to register the REO Subsidiary Interests or Transaction Subsidiary Interests for public sale under the 1934 Act, or under applicable state securities laws, even if Seller would agree to do so.

h. To the extent permitted by applicable law, Seller shall be liable to Buyer for interest on any amounts owing by Seller hereunder, from the date Seller becomes liable for such amounts hereunder until such amounts are (i) paid in full by Seller or (ii) satisfied in full by the exercise of Buyer’s rights hereunder. Interest on any sum payable by Seller under this Section 16.h shall accrue at a rate equal to the Post‑Default Rate.

i. Buyer shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.

j. Buyer may exercise one or more of the remedies available to Buyer immediately upon the occurrence of an Event of Default and, except to the extent provided in subsections (a) and (d) of this Section, at any time thereafter without notice to Seller Parties. All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may have.

k. Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and each Seller Party hereby expressly waives any defenses such Seller Party might otherwise have to require Buyer to enforce its rights by judicial process. Each Seller Party also waives any defense (other than a defense of payment or performance) such Seller Party might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. Each Seller Party recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.

l. Buyer shall have the right to perform reasonable due diligence with respect to any Seller Party and the Purchased Assets and the Repurchase Assets, which review shall be at the expense of Seller.

17. Reports

a. Default Notices . Seller shall furnish to Buyer (i) promptly, copies of any material and adverse notices (including, without limitation, notices of defaults, breaches, potential defaults or potential breaches) and any material financial information that is not otherwise required to be provided by Seller hereunder which is given to Seller’s lenders and (ii) immediately, notice of the occurrence of any (A) Event of Default hereunder, (B) default or breach by Seller or Servicer of any obligation under any Program Agreement or any material contract or agreement of Seller or Servicer or (C) event or circumstance that such party reasonably expects has resulted in, or will, with the passage of time, result in, a Material Adverse Effect or an Event of Default or such a default or breach by such party.

b. Financial Notices . Seller shall furnish to Buyer:

(1) as soon as available and in any event within forty-five (45) calendar days after the end of each calendar month (other than a calendar month which is also the last month in a fiscal quarter), the unaudited consolidated balance sheets of Seller and its consolidated Subsidiaries as of the end of such period and the related unaudited consolidated statements of comprehensive income for the Seller and its consolidated Subsidiaries for such period and the portion of the fiscal year through the end of such period, accompanied by a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements fairly present in all material respects the consolidated financial condition and results of operations of Seller and its consolidated Subsidiaries in accordance with GAAP consistently applied, as at the end of, and for, such period;

(2) as soon as available and in any event within (x) forty-five (45) calendar days after the end of each of the first three fiscal quarters and (y) sixty (60) days after the end of the last fiscal quarter, the unaudited consolidated balance sheets of Seller and its consolidated Subsidiaries as of the end of such period and the related unaudited consolidated statements of comprehensive income and stockholders’ equity and of cash flows for the Seller and its consolidated Subsidiaries for such period and the portion of the fiscal year through the end of such period, accompanied by a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements fairly present in all material respects the consolidated financial condition and results of operations of Seller and its consolidated Subsidiaries in accordance with GAAP consistently applied, as at the end of, and for, such period;

(3) as soon as available and in any event within ninety (90) calendar days after the end of each fiscal year of Seller, the consolidated balance sheets of Seller and its consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of comprehensive income and stockholders’ equity and of cash flows for the Seller and its consolidated Subsidiaries for such year, setting forth in each case in comparative form the figures for the previous year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion and the scope of audit shall be acceptable to Buyer in its sole discretion, shall have no “going concern” qualification and shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of Seller and its respective consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP;

(4) Reserved ;

(5) at the time the Seller furnishes each set of financial statements pursuant to Section 17.b(1), (1) or (3) above, an Officer’s Compliance Certificate of a Responsible Officer of Seller in the form attached as Exhibit A to the Pricing Side Letter;

(6) as soon as available and in any event within thirty (30) calendar days of receipt thereof;

(a) if applicable, copies of any 10‑Ks, 10‑Qs, registration statements and other “ corporate finance ” SEC filings by Guarantor, within 5 Business Days of their filing with the SEC; provided, that, Guarantor or any Affiliate will provide Buyer with a copy of the annual 10‑K filed with the SEC by Guarantor or its Affiliates, no later than ninety (90) calendar days after the end of the year; provided, however, that this clause (6)(a) is deemed to be satisfied by Seller arranging for Buyer to receive automatic email notifications from Guarantor with respect to such items;

(b) solely with respect to Seller as an originator or purchaser of Transaction Mortgage Loans and not in its capacity as a Servicer, copies of relevant portions of all final written Agency, FHA, VA, Governmental Authority and investor audits, examinations, evaluations, monitoring reviews and reports of its operations (including those prepared on a contract basis) which provide for or relate to (i) material corrective action required or (ii) material sanctions proposed, imposed or required, including without limitation notices of defaults, notices of termination of approved status, notices of imposition of supervisory agreements or interim servicing agreements, and notices of probation, suspension, or non‑renewal;

(c) such other information regarding the financial condition, operations, or business of any Seller Party as Buyer may reasonably request; and

(d) the particulars of any Event of Termination in reasonable detail.

c. Notices of Certain Events . As soon as possible and in any event within five (5) Business Days of knowledge thereof, Seller shall furnish to Buyer notice of the following events:

(1) Upon knowledge of a Responsible Officer of Seller or a Person listed on Schedule 2 hereto, with respect to any Transaction Mortgage Loan or REO Property, that the underlying Mortgaged Property has been damaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, or otherwise damaged so as to affect adversely the value of such Transaction Mortgage Loan or REO Property in an amount in excess of $5,000;

(2) any material issues raised upon examination of any Seller Party or its facilities by any Governmental Authority to the extent such matters may be disclosed;

(3) any default related to any Repurchase Asset or any lien or security interest (other than security interests created hereby or by the other Program Agreements) on, or claim asserted against, any of the Purchased Assets or Repurchase Assets; and

(4) any other event, circumstance or condition that has resulted, or has a possibility of resulting, in a Material Adverse Effect with respect to a Seller Party or Servicer; and

d. Portfolio Performance Data . On the first Reporting Date of each calendar month, Seller will furnish to Buyer (i) in the event the Transaction Mortgage Loans and Contributed REO Properties are serviced on a “retained” basis, an electronic Transaction Mortgage Loan and Contributed REO Property performance data, including, without limitation, delinquency reports and volume information, broken down by product ( i.e. , delinquency, foreclosure and net charge‑off reports) and (ii) electronically, in a format mutually acceptable to Buyer and Seller, servicing information, including, without limitation, those fields reasonably requested by Buyer from time to time, on a loan‑by‑loan basis and in the aggregate, with respect to the Transaction Mortgage Loans and Contributed REO Properties serviced by Seller or any Servicer for the month (or any portion thereof) prior to the Reporting Date. In addition to the foregoing information on each Reporting Date, Seller will furnish to Buyer such information upon (i) the occurrence and continuation of an Event of Default and (ii) upon any Transaction Mortgage Loan becoming an Aged Loan.

e. Reserved .

f. Other Reports . Seller shall deliver to Buyer any other reports or information reasonably requested by Buyer or as otherwise required pursuant to this Agreement.

18. Repurchase Transactions

Buyer may, in its sole election, engage in repurchase transactions with the Purchased Assets or Repurchase Assets or otherwise pledge, hypothecate, assign, transfer or otherwise convey the Purchased Assets or Repurchase Assets to a counterparty of Buyer’s choice, provided that Buyer shall return to Seller such Purchased Assets. Unless an Event of Default shall have occurred, no such transaction shall relieve Buyer of its obligations to transfer Purchased Assets or Repurchase Assets to Seller pursuant to Section 4 hereof, or of Buyer’s obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Section 7 hereof. In the event Buyer engages in a repurchase transaction with any of the Purchased Assets or Repurchase Assets or otherwise pledges or hypothecates any of the Purchased Assets or Repurchase Assets, Buyer shall have the right to assign to Buyer’s counterparty any of the applicable representations or warranties herein and the remedies for breach thereof, as they relate to the Purchased Assets or Repurchase Assets that are subject to such repurchase transaction.

19. Single Agreement

Buyer and each Seller Party acknowledge they have and will enter into each Transaction hereunder, in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Buyer and each Seller Party agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, and (ii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.

20. Notices and Other Communications

Any and all notices (with the exception of Transaction Requests which shall be delivered via electronic mail or other electronic medium agreed to by the Buyer and the Seller), statements, demands or other communications hereunder may be given by a party to the other by mail, email, facsimile, messenger or otherwise to the address specified below, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence. In all cases, to the extent that the related individual set forth in the respective “Attention” line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person.

If to a Seller Party:

Reverse Mortgage Solutions, Inc.

14405 Walters Road, Suite 200

Houston, TX 77014

Attention: Treasurer, Andrew G. Dokos

Telephone: 832- 616-5815

Email: Andrew.dokos@rmsnav.com

With a copy to:

Reverse Mortgage Solutions, Inc.

14405 Walters Road, Suite 200

Houston, TX 77014

Attention: General Counsel

And a copy to:

Walter Investment Management Corp.

345 St. Peter Street, Suite 1100

St. Paul, MN 55102

Attention: Cheryl Collins

Telephone: 651-293-3410

Fax: 651-293-5746

Email: Cheryl.collins@walterinvestment.com

If to Buyer:

For Transaction Requests :

CSFBMC LLC
c/o Credit Suisse Securities (USA) LLC
One Madison Avenue, 2nd floor
New York, New York 10010
Attention: Christopher Bergs, Resi Mortgage Warehouse Ops
Phone: 212‑538‑5087
E‑mail: christopher.bergs@credit‑suisse.com

with a copy to:

Credit Suisse First Boston Mortgage Capital LLC
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue, 4th Floor
New York, NY 10010
Attention: Margaret Dellafera
E‑mail: margaret.dellafera @credit‑suisse.com

For all other Notices :

Credit Suisse First Boston Mortgage Capital LLC
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue, 4th Floor
Attention: Margaret Dellafera
New York, New York 10010
Phone Number: 212‑325‑6471
Fax Number: 212‑743‑4810
E‑mail: margaret.dellafera@credit‑suisse.com

with a copy to:

Credit Suisse First Boston Mortgage Capital LLC
c/o Credit Suisse Securities (USA) LLC
One Madison Avenue, 9th Floor
New York, NY 10010
Attention: Legal Department—RMBS Warehouse Lending
Fax Number: (212) 322‑2376

21. Entire Agreement; Severability

This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

22. Non assignability

The Program Agreements are not assignable by any Seller Party. Buyer may from time to time assign all or a portion of its rights and obligations under this Agreement and the Program Agreements; provided, however that Buyer shall maintain as agent of Seller Parties, for review by Seller Parties upon written request, a register of assignees and a copy of an executed assignment and acceptance by Buyer and assignee (“ Assignment and Acceptance ”), specifying the percentage or portion of such rights and obligations assigned and Seller shall only be required to deal directly with the Buyer following such assignment. Buyer may distribute to any prospective assignee any document or other information delivered to Buyer by Seller Parties.

23. Set‑off

In addition to any rights and remedies of the Buyer hereunder and by law, the Buyer shall have the right, without prior notice to the Seller Parties, any such notice being expressly waived by the Seller Parties to the extent permitted by applicable law to set-off and appropriate and apply against any Obligation from any Seller Party or any Affiliate thereof to Buyer or any of its Affiliates any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to return excess margin), credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from the Buyer or any Affiliate thereof to or for the credit or the account of any Seller Party or any Affiliate thereof. The Buyer agrees promptly to notify the Seller Parties after any such set off and application made by the Buyer; provided that the failure to give such notice shall not affect the validity of such set off and application.

24. Binding Effect; Governing Law; Jurisdiction

a. This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Each Seller Party acknowledges that the obligations of Buyer hereunder or otherwise are not the subject of any guaranty by, or recourse to, any direct or indirect parent or other Affiliate of Buyer. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

b. EACH OF SELLER PARTIES AND BUYER HEREBY WAIVES TRIAL BY JURY. EACH OF SELLER PARTIES AND BUYER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS IN ANY ACTION OR PROCEEDING. EACH OF SELLER PARTIES AND BUYER HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO, EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS.

25. No Waivers, Etc.

No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Section 0, 16.a or otherwise, will not constitute a waiver of any right to do so at a later date.

26. Intent

a. The parties recognize that each Transaction is a “ repurchase agreement ” as that term is defined in Section 101 of Title 11 of the United States Code, as amended, a “ securities contract ” as that term is defined in Section 741 of Title 11 of the United States Code, as amended, and a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code, that all payments hereunder are deemed “ margin payments ” or “ settlement payments ” as defined in Title 11 of the United States Code, and that the pledge of the Repurchase Assets constitutes “a security agreement or other arrangement or other credit enhancement” that is “related to” the Agreement and Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code. Seller Parties and Buyer further recognize and intend that this Agreement is an agreement to provide financial accommodations and is not subject to assumption pursuant to Bankruptcy Code Section 365(a).

b. Buyer’s right to liquidate the Purchased Assets and Repurchase Assets delivered to it in connection with the Transactions hereunder or to accelerate or terminate this Agreement or otherwise exercise any other remedies pursuant to Section 16 hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code Sections 555, 559 and 561; any payments or transfers of property made with respect to this Agreement or any Transaction to satisfy a Margin Deficit shall be considered a “margin payment” as such term is defined in Bankruptcy Code Section 741(5).

c. Reserved .

d. It is understood that this Agreement constitutes a “ netting contract ” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“ FDICIA ”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “ covered contractual payment entitlement ” or “ covered contractual payment obligation ”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “ financial institution ” as that term is defined in FDICIA).

e. This Agreement is intended to be a “repurchase agreement” and a “securities contract,” within the meaning of Section 101(47), Section 555, Section 559 and Section 741 under the Bankruptcy Code.

f. Each party agrees that this Agreement is intended to create mutuality of obligations among the parties, and as such, the Agreement constitutes a contract which (i) is between all of the parties and (ii) places each party in the same right and capacity.

27. Disclosure Relating to Certain Federal Protections

The parties acknowledge that they have been advised that:

a. in the case of Transactions in which one of the parties is a broker or dealer registered with the SEC under Section 15 of the 1934 Act, the Securities Investor Protection Corporation has taken the position that the provisions of the SIPA do not protect the other party with respect to any Transaction hereunder;

b. in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and

c. in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.

28. Power of Attorney

Each Seller Party hereby authorizes Buyer to file such financing statement or statements relating to the Repurchase Assets without such Seller Party’s signature thereon as Buyer, at its option, may deem appropriate. Each Seller Party hereby respectively appoints Buyer as such Seller Party’s agent and attorney-in-fact to execute any such financing statement or statements in such Seller Party’s name and, upon the occurrence and continuance of an Event of Default, to perform all other acts which Buyer deems appropriate to perfect and continue its ownership interest in and/or the security interest granted hereby, if applicable, and to protect, preserve and realize upon the Repurchase Assets, including, but not limited to, the right to endorse notes, complete blanks in documents, transfer servicing, and sign assignments on behalf of such Seller Party as its agent and attorney-in-fact. This agency and power of attorney is coupled with an interest and is irrevocable without Buyer’s consent. Notwithstanding the foregoing, the power of attorney hereby granted may be exercised only during the occurrence and continuance of any Default hereunder. Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 28. In addition the foregoing, each Seller Party agrees to execute a Power of Attorney, in the form of Exhibit D hereto, to be delivered on the date hereof.

29. Buyer May Act Through Affiliates and Transaction Subsidiary May Act Through Seller

Buyer may, from time to time, designate one or more Affiliates for the purpose of performing any action hereunder. Pursuant to the Transaction Subsidiary Agreement, Transaction Subsidiary has appointed Seller as its agent with respect to the execution, delivery and/or performance of any Program Agreement, including, without limitation, the Custodial Agreement, any Servicing Agreement and any Servicer Notice.

30. Indemnification; Obligations

a. Seller agrees to hold Buyer and each of its respective Affiliates and their officers, directors, employees, agents and advisors (each, an “ Indemnified Party ”) harmless from and indemnify each Indemnified Party (and will reimburse each Indemnified Party as the same is incurred) against all liabilities, losses, damages, judgments, costs and expenses (including, without limitation, reasonable fees and expenses of counsel) of any kind which may be imposed on, incurred by, or asserted against any Indemnified Party by any third party relating to or arising out of this Agreement, any Transaction Request, any Program Agreement or any transaction contemplated hereby or thereby resulting from anything other than the Indemnified Party’s gross negligence or willful misconduct. Seller also agrees to reimburse each Indemnified Party for all reasonable expenses in connection with the enforcement of this Agreement and the exercise of any right or remedy provided for herein, any Transaction Request and any Program Agreement, including, without limitation, the reasonable fees and disbursements of counsel. Seller’s agreements in this Section 30 shall survive the payment in full of the Repurchase Price and the expiration or termination of this Agreement. Seller hereby acknowledges that its obligations hereunder are recourse obligations of Seller and are not limited to recoveries each Indemnified Party may have with respect to the Purchased Assets and Repurchase Assets. Each of Seller and Buyer also agrees not to assert any claim against the other or any of such party’s, or any of such party’s respective officers, directors, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the facility established hereunder, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.

b. Without limitation to the provisions of Section 4, if any payment of the Repurchase Price of any Transaction or Purchase Price Increase is made by Seller other than on the then scheduled Repurchase Date thereto as a result of an acceleration of the Repurchase Date pursuant to Section 16 or for any other reason, Seller shall, upon demand by Buyer, pay to Buyer an amount sufficient to compensate Buyer for any losses, costs or expenses that it may reasonably incur as of a result of such payment.

c. Without limiting the provisions of Section 30.a hereof, if Seller fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of Seller by Buyer, in its sole discretion.

31. Counterparts

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement in a Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Agreement.

32. Confidentiality

a. This Agreement and its terms, provisions, supplements and amendments, and notices hereunder, are proprietary to Buyer and shall be held by each Seller Party in strict confidence and shall not be disclosed to any third party without the written consent of Buyer except for (i) disclosure to such Seller Party’s direct and indirect Affiliates and Subsidiaries, attorneys or accountants, but only to the extent such disclosure is necessary and such parties agree to hold all information in strict confidence, or (ii) disclosure required by law, rule, regulation or order of a court or other regulatory body. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Agreement, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided that Seller may not disclose the name of or identifying information with respect to Buyer or any pricing terms (including, without limitation, the Pricing Rate, Commitment Fee, Purchase Price Percentage and Purchase Price) or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the federal, state and local tax treatment of the Transactions and is not relevant to understanding the federal, state and local tax treatment of the Transactions, without the prior written consent of the Buyer; provided further that Seller shall redact such pricing terms mutually agreed to between Buyer and Seller and Seller shall file a request with the SEC and each applicable state securities office to keep such information confidential. In the event that the SEC or applicable state securities office rejects such confidentiality request with respect to this information, Seller may file this Agreement, including such pricing terms, with the SEC and any applicable state securities office, as applicable.

b. Notwithstanding anything in this Agreement to the contrary, each of the Seller Parties and Buyer shall comply with all applicable local, state and federal laws, including, without limitation, all privacy and data protection law, rules and regulations that are applicable to the Purchased Assets and the Repurchase Assets and/or any applicable terms of this Agreement, including information pertaining to any Purchased Asset that is not purchased hereunder or customer or loan information that another lender may share with the Buyer pursuant to an intercreditor agreement or other agreement (the “ Confidential Information ”). Each of Seller Party and Buyer understands that the Confidential Information may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm‑Leach‑Bliley Act (the “ GLB Act ”), and each of Seller Party and Buyer agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the GLB Act and other applicable federal and state privacy laws. Seller shall implement such physical and other security measures as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information” of the “customers” and “consumers” (as those terms are defined in the GLB Act) of Buyer or any Affiliate of Buyer which the Seller holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Seller represents and warrants that it has implemented appropriate measures to meet the objectives of Section 501(b) of the GLB Act and of the applicable standards adopted pursuant thereto, as now or hereafter in effect. Upon request, Seller will provide evidence reasonably satisfactory to allow Buyer to confirm that the providing party has satisfied its obligations as required under this Section. Without limitation, this may include Buyer’s review of audits, summaries of test results, and other equivalent evaluations of the Seller. Seller shall notify Buyer immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of Buyer or any Affiliate of Buyer provided directly to such Seller Party by Buyer or such Affiliate. Each Seller Party shall provide such notice to Buyer by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual.

33. Recording of Communications

Buyer and Seller Parties shall have the right (but not the obligation) from time to time to make or cause to be made tape recordings of communications between its employees and those of the other party with respect to Transactions. Buyer and Seller Parties consent to the admissibility of such tape recordings in any court, arbitration, or other proceedings. The parties agree that a duly authenticated transcript of such a tape recording shall be deemed to be a writing conclusively evidencing the parties’ agreement.

34. Periodic Due Diligence Review

Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to each Seller Party and the Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, for the purpose of performing quality control review of the Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans or otherwise, and Seller agrees that upon reasonable (but no less than three (3) Business Days’) prior notice unless an Event of Default shall have occurred, in which case no notice is required, to Seller, Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Asset Files and any and all documents, data, records, agreements, instruments or information relating to such Repurchase Assets (including, without limitation, quality control review) in the possession or under the control of Seller Parties and/or the Custodian. Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Asset Files and the Repurchase Assets. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may purchase Purchased Assets and the Contributed REO Properties or enter into Transactions with respect to Transaction Mortgage Loans from Seller based solely upon the information provided by Seller to Buyer in the Asset Schedule and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Assets and Repurchase Assets purchased in a Transaction, including, without limitation, ordering broker’s price opinions, new credit reports and new appraisals on the related Mortgaged Properties and otherwise re‑generating the information used to originate such Transaction Mortgage Loan. Buyer may underwrite such Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Seller agrees to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Assets, Contributed REO Properties and Transaction Mortgage Loans in the possession, or under the control, of Seller. Seller further agrees that Seller shall pay all out‑of‑pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Section 34; provided that Buyer shall notify Seller of any due diligence expenses in excess of $25,000 per annum.

35. Authorizations

Any of the persons whose signatures and titles appear on Schedule 2 are authorized, acting singly, to act for Seller Parties or Buyer to the extent set forth therein, as the case may be, under this Agreement. The Seller Parties may amend Schedule 2 from time to time by delivering a revised Schedule 2 to Buyer and expressly stating that such revised Schedule 2 shall replace the existing Schedule 2 .

36. Acknowledgement Of Anti‑Predatory Lending Policies

Buyer has in place internal policies and procedures that expressly prohibit its purchase of any High Cost Mortgage Loan.

37. Documents Mutually Drafted

The Seller Parties and the Buyer agree that this Agreement and each other Program Agreement prepared in connection with the Transactions set forth herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.

38. General Interpretive Principles

For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

a. the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;

b. accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

c. references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;

d. a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;

e. the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;

f. the term “include” or “including” shall mean without limitation by reason of enumeration;

g. all times specified herein or in any other Program Agreement (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated; and

h. all references herein or in any Program Agreement to “good faith” means good faith as defined in Section 1‑201(19) of the UCC as in effect in the State of New York.

39. Conflicts

In the event of any conflict between the terms of this Agreement and any other Program Agreement, the documents shall control in the following order of priority: first , the terms of the Pricing Side Letter shall prevail, then the terms of this Agreement shall prevail, and then the terms of the other Program Agreements shall prevail.

40. Nominee

a. Seller Parties and Buyer hereby acknowledge and agree, and Seller Parties hereby appoint, the Nominee as (i) their nominee as mortgagee of record and payee on the FHA HERMIT System, as applicable, and the Nominee hereby accepts such appointment, and (ii) as nominee and agent of Seller Parties and Buyer as set forth herein, to the extent applicable.

b. Following receipt by Nominee of written notice of the occurrence of an Event of Default, the Nominee agrees to take direction from the Buyer with respect to the FHA Loans.

c. It is the intent of the Seller Parties, Servicer and the Buyer that the Servicer or Nominee, as applicable, retains bare legal title to the Transaction Mortgage Loans and Contributed REO Property for all purposes including, without limitation, for purposes of Section 541(d) of the Bankruptcy Code and accordingly, Servicer and Nominee, in their respective capacity as servicer or nominee, shall have no property right to the Transaction Mortgage Loans or Contributed REO Property.

d. Buyer may, upon notice to the Seller Parties, terminate the Servicer as Nominee and appoint itself or another person as the successor nominee following an Event of Default that is continuing.

41. Termination of Agreement

This Agreement shall remain in effect until the Termination Date. Notwithstanding the foregoing, Seller may terminate this Agreement at any time (i) upon the occurrence of an Act of Insolvency in respect of Buyer, (ii) upon the failure of Buyer to return any Transaction Mortgage Loan or REO Property to Seller after the payment by Seller to the Buyer of the related Repurchase Price within five (5) Business Days, or (iii) upon the occurrence of an event of default on the part of Credit Suisse Securities (USA) LLC under any Master Securities Forward Transaction Agreement between Credit Suisse Securities (USA) LLC and Seller, in each case, without the payment of any penalties, breakage costs or termination fees. If Seller exercises such right of termination, to the extent permitted by applicable law, Buyer shall promptly reimburse Seller for the pro-rated amount of the Commitment Fee attributable to the number of days remaining from the date such of such termination until the Termination Date.

42. Joint and Several

Seller Parties and Buyer hereby acknowledge and agree that each Seller Party is jointly and severally liable to Buyer for the full, complete and punctual performance and satisfaction of all obligations of any Seller Party under this Agreement. Accordingly, each Seller Party waives any and all notice of creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by Buyer upon such Seller Party’s joint and several liability. Each Seller Party waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon such Seller Party with respect to the Obligations. When pursuing its rights and remedies hereunder against any Seller Party, Buyer may, but shall be under no obligation to, pursue such rights and remedies hereunder against any Seller Party or any other Person or against any collateral security for the Obligations or any right of offset with respect thereto, and any failure by Buyer to pursue such other rights or remedies or to collect any payments from such Seller Party or any such other Person to realize upon any such collateral security or to exercise any such right of offset, or any release of such Seller Party or any such other Person or any such collateral security, or right of offset, shall not relieve such Seller Party of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Buyer against such Seller Party.

43. Limitation of Liability of Trustee

It is expressly understood and agreed by the parties hereto that (a) this Agreement is executed and delivered by Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust (" Christiana Trust "), not in its individual capacity but solely as trustee (the " Trustee ") under the Transaction Subsidiary Agreement, in the exercise of the powers and authority conferred and vested in it under the Transaction Subsidiary Agreement for the Transaction Subsidiary, (b) each of the representations, undertakings and agreements herein made on the part of the Trustee or the Transaction Subsidiary is made and intended not as personal representations, undertakings and agreements by Christiana Trust but is made and intended for the purpose for binding only the Transaction Subsidiary, (c) nothing herein contained shall be construed as creating any liability on Christiana Trust, individually or personally, to perform any covenant either express or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and any Person claiming by, through or under the parties hereto, (d) Christiana Trust has not verified and has not made any investigation as to the accuracy of any representations, warranties or other obligations of the Trustee or the Transaction Subsidiary under this Agreement or any other related documents and (e) under no circumstances shall Christiana Trust be personally liable for the payment of any indebtedness or expenses of the Trustee or the Transaction Subsidiary or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trustee or the Transaction Subsidiary under this Agreement or any other related documents, all such liability being limited to the Transaction Subsidiary.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the date first above written.

Credit Suisse First Boston Mortgage Capital LLC, as Buyer


By:	/s/ Elie Chau Name: Elie Chau Title: Vice President

Reverse Mortgage Solutions, Inc., as Seller


By:	/s/ Cheryl Collins Name: Cheryl Collins Title: SVP & Treasurer

RMS CS Repo Trust 2016, as Transaction Subsidiary


By:	Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not in its individual capacity but solely as trustee for RMS CS Repo Trust 2016 Name: /s/ Jeffrey R. Everhart Title: AVP

RMS REO CS, LLC, as REO Subsidiary


By:	/s/ Cheryl Collins Name: Cheryl Collins Title: SVP & Treasurer

SCHEDULE 1-A

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO TRANSACTION MORTGAGE LOANS

(a) Reserved .

(b) No Outstanding Charges . All taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. The Seller has not advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Transaction Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the proceeds of the Transaction Mortgage Loan, whichever is earlier.

(c) Original Terms Unmodified . The terms of the Mortgage Note and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination; except by a written instrument which has been recorded, if necessary to protect the interests of Buyer, and which original or (other than with respect to the Mortgage Note) certified copy has been delivered to the Custodian and the terms of which are reflected in the Custodial Asset Schedule. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required, and its terms are reflected on the Custodial Asset Schedule. No Mortgagor in respect of the Transaction Mortgage Loan has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer, to the extent required by such policy, and which assumption agreement is part of the Asset File delivered to the Custodian and the terms of which are reflected in the Custodial Asset Schedule.

(d) No Defenses . The Transaction Mortgage Loan is not subject to any right of rescission, set‑off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part and no such right of rescission, set‑off, counterclaim or defense has been asserted with respect thereto, and no Mortgagor in respect of the Transaction Mortgage Loan was a debtor in any state or federal bankruptcy or insolvency proceeding at the time the Transaction Mortgage Loan was originated.

(e) Hazard Insurance . The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a Qualified Insurer, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Seller as of the date of origination consistent with the Underwriting Guidelines, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount not less than the greatest of (i) 100% of the replacement cost of all improvements to the Mortgaged Property, (ii) the outstanding principal balance of the Transaction Mortgage Loan, or (iii) the amount necessary to avoid the operation of any co‑insurance provisions with respect to the Mortgaged Property, and consistent with the amount that would have been required as of the date of origination in accordance with the Underwriting Guidelines. If any portion of the Mortgaged Property is in an area identified by any federal Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current guidelines of the Federal Emergency Management Agency is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (1) the outstanding principal balance of the Transaction Mortgage Loan (2) the full insurable value of the Mortgaged Property, and (3) the maximum amount of insurance available under the National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1973. All such insurance policies (collectively, the “hazard insurance policy”) contain a standard mortgagee clause naming Seller, its successors and assigns (including, without limitation, subsequent owners of the Transaction Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled without thirty (30) calendar days’ prior written notice to the mortgagee. No such notice has been received by any Seller Party. All premiums on such insurance policy have been paid. The related Mortgage obligates the Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the mortgagee to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from such Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer and is in full force and effect. Seller Party has not engaged in, and has no knowledge of the Mortgagor’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by any Seller Party.

(f) Environmental Compliance . There does not exist on the Mortgaged Property any hazardous substances, hazardous wastes or solid wastes, as such terms are defined in the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act of 1976, or other applicable federal, state or local environmental laws including, without limitation, asbestos, in each case in excess of the permitted limits and allowances set forth in such environmental laws to the extent such laws are applicable to the Mortgaged Property. There is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; there is no violation of any applicable environmental law (including, without limitation, asbestos), rule or regulation with respect to the Mortgaged Property; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property.

(g) Compliance with Applicable Laws . Any and all requirements of any federal, state or local law including, without limitation, usury, truth‑in‑lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Transaction Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations, and Seller shall maintain or shall cause its agent to maintain in its possession, available for the inspection of Buyer, and shall deliver to Buyer, upon demand, evidence of compliance with all such requirements.

(h) No Satisfaction of Mortgage . The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Transaction Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.

(i) Location and Type of Mortgaged Property . The Mortgaged Property is located in an Acceptable State as identified in the Custodial Asset Schedule and consists of a single parcel of real property with a detached or attached single family residence erected thereon, or a two‑ to four‑family dwelling, or an individual unit in a planned unit development or a de minimis planned unit development; provided, however, that any condominium unit or planned unit development shall conform with the applicable Fannie Mae and Freddie Mac requirements regarding such dwellings or shall conform to underwriting guidelines acceptable to Buyer in its sole discretion and that no residence or dwelling is a mobile home. No portion of the Mortgaged Property is used for commercial purposes; provided, that, the Mortgaged Property may be a mixed use property if such Mortgaged Property conforms to underwriting guidelines acceptable to Buyer in its sole discretion.

(j) Valid First Lien . The Mortgage is a valid, subsisting, enforceable and perfected with respect to each first lien Transaction Mortgage Loan, first priority lien and first priority security interest on the real property included in the Mortgaged Property, including all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing. The lien of the Mortgage is subject only to:

a. the lien of current real property taxes and assessments not yet due and payable;

b. covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in Buyer’s title insurance policy delivered to the originator of the Transaction Mortgage Loan and (a) referred to or otherwise considered in the appraisal made for the originator of the Transaction Mortgage Loan or (b) which do not adversely affect the Appraised Value of the Mortgaged Property set forth in such appraisal;

c. other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Transaction Mortgage Loan establishes and creates a valid, subsisting and enforceable first lien and first priority security interest on the property described therein and the applicable Seller Party has full right to pledge and assign the same to Buyer. The Mortgaged Property was not, as of the date of origination of the Transaction Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of the Mortgage.

(k) Validity of Mortgage Documents . The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a Transaction Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All parties to the Mortgage Note, the Mortgage and any other such related agreement had legal capacity to enter into the Transaction Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any other such related agreement have been duly and properly executed by such related parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Transaction Mortgage Loan has taken place on the part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Transaction Mortgage Loan. Seller has reviewed all of the documents constituting the Asset File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. To the best of Seller’s knowledge, except as disclosed to Buyer in writing, all tax identifications and property descriptions are legally sufficient; and tax segregation, where required, has been completed.

(l) Full Disbursement of Proceeds . Except as allowable under the FHA HECM program, each Transaction Mortgage Loan has no future disbursement obligation, and any and all requirements as to completion of any on‑site or off‑site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Transaction Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage. All broker fees have been properly assessed to the Mortgagor and no claims will arise as to broker fees that are double charged and for which the Mortgagor would be entitled to reimbursement.

(m) Ownership . The applicable Seller Party has full right to sell or pledge, as applicable, the Transaction Mortgage Loan to Buyer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to sell or pledge, as applicable, each Transaction Mortgage Loan pursuant to this Agreement and following the sale or pledge, as applicable, of each Transaction Mortgage Loan, Buyer will own or have received a pledge of, as applicable, such Transaction Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest except any such security interest created pursuant to the terms of this Agreement.

(n) Doing Business . All parties which have had any interest in the Transaction Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (i) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, (C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (D) not doing business in such state.

(o) Title Insurance . The Transaction Mortgage Loan is covered by either (i) an attorney’s opinion of title and abstract of title, the form and substance of which is acceptable to prudent mortgage lending institutions making mortgage loans in the area wherein the Mortgaged Property is located or (ii) an ALTA lender’s title insurance policy or other generally acceptable form of policy or insurance acceptable to Fannie Mae or Freddie Mac and each such title insurance policy is issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring Seller, its successors and assigns, as to the first priority lien of the Mortgage, as applicable, in the original principal amount of the Transaction Mortgage Loan, with respect to a Transaction Mortgage Loan (or to the extent a Mortgage Note provides for negative amortization, the maximum amount of negative amortization in accordance with the Mortgage), subject only to the exceptions contained in clauses (a), (b) and (c) of paragraph (i) of this Schedule 1-A , and in the case of adjustable rate Transaction Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. Seller, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder or servicer of the related Mortgage, including Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Seller.

(p) No Defaults . Except with respect to a Mortgage Loan that is an Early Buyout HECM Loan, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller nor its predecessors have waived any default, breach, violation or event of acceleration; and neither Seller nor any of its affiliates nor any of their respective predecessors, have waived any default, breach, violation or event which would permit acceleration, except with respect to a Mortgage Loan that is an Early Buyout HECM Loan.

(q) No Mechanics’ Liens . There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.

(r) Location of Improvements; No Encroachments . All improvements which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning and building law, ordinance or regulation. All seller and/or builder concessions have been subtracted from the Appraised Value of the Mortgaged Property for purposes of determining the LTV.

(s) Origination; Payment Terms . The Transaction Mortgage Loan was originated by or in conjunction with a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar banking institution which is supervised and examined by a federal or state authority.

(t) Customary Provisions . The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a Transaction Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Transaction Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no homestead or other exemption or other right available to the Mortgagor or any other person, or restriction on the Seller or any other person, including without limitation, any federal, state or local, law, ordinance, decree, regulation, guidance, attorney general action, or other pronouncement, whether temporary or permanent in nature, that would interfere with, restrict or delay, either (y) the ability of the Seller, Buyer or any servicer or any successor servicer to sell the related Mortgaged Property at a trustee's sale or otherwise, or (z) the ability of the Seller, Buyer or any servicer or any successor servicer to foreclose on the related Mortgage. The Mortgage Note and Mortgage are on forms acceptable to Freddie Mac, Fannie Mae or FHA.

(u) Occupancy of the Mortgaged Property . As of the Purchase Date the Mortgaged Property is lawfully occupied under applicable law. All inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities. Seller has not received notification from any Governmental Authority that the Mortgaged Property is in material non‑compliance with such laws or regulations, is being used, operated or occupied unlawfully or has failed to have or obtain such inspection, licenses or certificates, as the case may be. Seller has not received notice of any violation or failure to conform with any such law, ordinance, regulation, standard, license or certificate. With respect to any Transaction Mortgage Loan originated with an “owner‑occupied” Mortgaged Property, the Mortgagor represented at the time of origination of the Transaction Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary residence.

(v) No Additional Collateral . The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (j) above.

(w) Deeds of Trust . In the event the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Custodian or Buyer to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.

(x) Transfer of Transaction Mortgage Loans . Except with respect to Transaction Mortgage Loans intended for purchase by Ginnie Mae and for Transaction Mortgage Loans registered with MERS, the Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.

(y) Due‑On‑Sale . Except with respect to Mortgage Loans intended for purchase by Ginnie Mae, the Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Transaction Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the mortgagee thereunder.

(z) No Contingent Interests . The Transaction Mortgage Loan does not have a shared appreciation or other contingent interest feature.

(aa) Consolidation of Future Advances . Any future advances made to the Mortgagor prior to the Purchase Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. The lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to Fannie Mae, Freddie Mac and FHA. The consolidated principal amount does not exceed the original principal amount of the Transaction Mortgage Loan.

(bb) No Condemnation Proceeding . There have not been any condemnation proceedings with respect to the Mortgaged Property and Seller has no knowledge of any such proceedings.

(cc) Collection Practices; Escrow Deposits; Interest Rate Adjustments . The origination and collection practices used by the originator, each servicer of the Transaction Mortgage Loan and Seller with respect to the Transaction Mortgage Loan have been in all material respects in compliance with Accepted Servicing Practices, applicable laws and regulations, and have been in all respects legal and proper. With respect to escrow deposits and Escrow Payments, all such payments are in the possession of, or under the control of, Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All Mortgage Interest Rate adjustments have been made in material compliance with state and federal law and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited.

(dd) Conversion to Fixed Interest Rate . Except as allowed by Fannie Mae or Freddie Mac or otherwise as expressly approved in writing by Buyer, with respect to adjustable rate Transaction Mortgage Loans, the Transaction Mortgage Loan is not convertible to a fixed interest rate Transaction Mortgage Loan.

(ee) Reserved .

(ff) Servicemembers Civil Relief Act . The Mortgagor has not notified Seller, and Seller has no knowledge, of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act.

(gg) Appraisal . The Asset File contains an appraisal of the related Mortgaged Property signed prior to the funding of the Transaction Mortgage Loan by a qualified appraiser, duly appointed by Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Transaction Mortgage Loan, and the appraisal and appraiser both satisfy the requirements of Fannie Mae, Freddie Mac or FHA and Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 as amended and the regulations promulgated thereunder, all as in effect on the date the Transaction Mortgage Loan was originated.

(hh) Disclosure Materials . The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans, and Seller maintains such statement in the Asset File.

(ii) Construction or Rehabilitation of Mortgaged Property . No Transaction Mortgage Loan was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade‑in or exchange of a Mortgaged Property.

(jj) No Defense to Insurance Coverage . No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to Seller on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any private mortgage insurance (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of Seller, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay.

(kk) Reserved .

(ll) No Equity Participation . No document relating to the Transaction Mortgage Loan provides for any contingent or additional interest in the form of participation in the cash flow of the Mortgaged Property or a sharing in the appreciation of the value of the Mortgaged Property. The indebtedness evidenced by the Mortgage Note is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and Seller has not financed nor does it own directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.

(mm) Proceeds of Transaction Mortgage Loan . The proceeds of the Transaction Mortgage Loan have not been and shall not be used to satisfy, in whole or in part, any debt owed or owing by the Mortgagor to Seller or any Affiliate or correspondent of Seller, except in connection with a refinanced Transaction Mortgage Loan; provided, however, no such refinanced Transaction Mortgage Loan shall have been originated pursuant to a streamlined mortgage loan refinancing program.

(nn) Origination Date . (i) Other than with respect to an Early Buyout HECM Loan and Correspondent Mortgage Loans, the Purchase Date is no more than thirty (30) calendar days following the origination date and (ii) with respect to Correspondent Mortgage Loans, the Purchase Date is no more than one-hundred and eighty (180) calendar days following the origination date, unless otherwise agreed to by Buyer.

(oo) No Exception . The Custodian has not noted any material exceptions on a Custodial Asset Schedule with respect to the Transaction Mortgage Loan which would materially adversely affect the Transaction Mortgage Loan or Buyer’s interest in the Transaction Mortgage Loan.

(pp) Mortgage Submitted for Recordation . The Mortgage either has been or will promptly be submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.

(qq) Documents Genuine . Such Transaction Mortgage Loan and all accompanying collateral documents are complete and authentic and all signatures thereon are genuine.

(rr) Reserved .

(ss) Other Encumbrances . To the best of Seller’s knowledge, any property subject to any security interest given in connection with such Transaction Mortgage Loan is not subject to any other encumbrances other than a stated first mortgage, if applicable, and encumbrances which may be allowed under the Underwriting Guidelines.

(tt) Description . The information set forth in the Mortgage Loan Schedule is true and correct in all material respects.

(uu) Located in U.S. No collateral (including, without limitation, the related real property and the dwellings thereon and otherwise) relating to a Transaction Mortgage Loan is located in any jurisdiction other than in one of the fifty (50) states of the United States of America or the District of Columbia or the commonwealth of Puerto Rico.

(vv) Underwriting Guidelines . Each Transaction Mortgage Loan has been originated in accordance with the Underwriting Guidelines (including all supplements or amendments thereto) previously provided to Buyer.

(ww) Reserved .

(xx) Committed Mortgage Loans . Other than any Early Buyout HECM Loan, each Committed Mortgage Loan is covered by a Take‑out Commitment, does not exceed the availability under such Take‑out Commitment (taking into consideration mortgage loans which have been purchased by the respective Take‑out Investor under the Take‑out Commitment and mortgage loan which Seller has identified to Buyer as covered by such Take‑out Commitment) and conforms to the requirements and the specifications set forth in such Take‑out Commitment and the related regulations, rules, requirements and/or handbooks of the applicable Take‑out Investor and is eligible for sale to and insurance or guaranty by, respectively the applicable Take‑out Investor and applicable insurer. Each Take‑out Commitment is a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(yy) Submission of Claims . All claims submitted to HUD for FHA Insurance for any Transaction Mortgage Loan have been submitted via the Home Equity Reverse Mortgage Information Technology (HERMIT) servicing system in accordance with the Ginnie Mae Guide (or via any other method specified in the Ginnie Mae Guide).

(zz) Tax Service . The Transaction Mortgage Loan is covered by a life of loan, transferrable real estate tax service contract that may be assigned to Buyer.

([[) Predatory Lending Regulations; High Cost Loans . No Transaction Mortgage Loan (i) is classified as High Cost Mortgage Loans (ii) is subject to any law, regulation or rule that (A) imposes liability on a mortgagee or a lender to a mortgagee for upkeep to a Mortgaged Property prior to completion of foreclosure thereon, or (B) imposes liability on a lender to a mortgagee for acts or omissions of the mortgagee or otherwise defines a mortgagee in a manner that would include a lender to a mortgagee.

(aaa) Reserved .

(bbb) Wet‑Ink Mortgage Loans . With respect to each Mortgage Loan that is a Wet‑Ink Mortgage Loan, the Settlement Agent has been instructed in writing by Seller to hold the related Mortgage Loan Documents as agent and bailee for Buyer or Buyer’s agent and to promptly forward such Mortgage Loan Documents in accordance with the provisions of the Custodial Agreement and the Escrow Instruction Letter.

(ccc) FHA Mortgage Insurance . With respect to the FHA Loans, the FHA Mortgage Insurance Contract is or eligible to be in full force and effect and there exists no impairment to full recovery without indemnity to HUD or the FHA under FHA Mortgage Insurance. All necessary steps have been taken to keep such guaranty or insurance valid, binding and enforceable and each of such is the binding, valid and enforceable obligation of the FHA, to the full extent thereof, without surcharge, set‑off or defense. Each FHA Loan was originated in accordance with the criteria of an Agency for purchase of such Transaction Mortgage Loans.

(ddd) Reserved.

(eee) Reserved.

(fff) Reserved.

(ggg) Reserved.

(hhh) HECM Loans . With respect to each HECM Loan (i) all of the related Mortgage Loan Documents, including the Mortgage Note, are in a form required by, or acceptable under, the HUD handbook provisions relating to reverse mortgage loans; (ii) all requirements as to any improvement and/or repair to the Mortgaged Property and to the disbursement of set-aside amounts for such HECM Loan have been complied with; (iii) all advances of principal secured by the related Mortgage are consolidated and such consolidated principal amount bears a single interest rate as set forth in the Asset Schedule; (iv) no portion of any proceeds of such HECM Loan received by the related Mortgagor on the closing date of such HECM Loan were disbursed at the closing for any purpose prohibited under the HUD handbook provisions relating to reverse mortgage loans (including, without limitation, for estate planning purposes); (v) the outstanding principal balance of the HECM Loan does not exceed the lesser of (x) 98% of the Maximum Claim Amount and (y) the related principal limit; (vi) all advances of principal made on such HECM Loan (A) shall automatically become subject to a Transaction under this Agreement without the requirement of Buyer to remit any additional Purchase Price and (B) with the Seller disbursing such advances of principal to the related Mortgagor with its own funds and not the funds of any third party lender; (vii) such HECM Loan is eligible to be pooled into an HECM mortgage-backed security, but no participation in such HECM Loan shall have been pooled into an HECM mortgage-backed securitization; (viii) the related Mortgaged Property is lawfully occupied by the Mortgagor as such Mortgagor’s primary residence; (ix) the related principal limit, all scheduled payments and other calculation terms have each been calculated in accordance with and comply with all requirements of the HUD handbook provisions relating to reverse mortgage loans; (x) such HECM Loan bears interest at a rate of interest permitted in accordance with the provisions of the HUD handbook provisions relating to reverse mortgage loans; (xi) no Mortgagor under such HECM Loan is less than sixty-two (62) years old and is otherwise an eligible Mortgagor in accordance with the requirements of the HUD handbook provisions relating to reverse mortgage loans; (xii) each Mortgagor has received all counseling required under the HUD handbook provisions relating to reverse mortgage loans and (xiii) the Custodian holds the related Mortgage Note (except for Wet-Ink Mortgage Loans).

(iii)

SCHEDULE 1-B

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO REO SUBSIDIARY INTERESTS AND TRANSACTION SUBSIDIARY INTERESTS

(a) Ownership . The REO Subsidiary Interests and Transaction Subsidiary Interests constitute all the issued and outstanding beneficial interests of all classes of the Capital Stock of such REO Subsidiary or Transaction Subsidiary, as applicable, are certificated.

(a) Compliance with Law . Each REO Subsidiary Interest and Transaction Subsidiary Interest complies in all respects with, or is exempt from, all applicable requirements of federal, state or local law relating to such REO Subsidiary Interest or Transaction Subsidiary Interest.

(b) Good Title . Immediately prior to the sale, transfer and assignment to Buyer thereof, Seller has good title to, and is the sole owner and holder of, the REO Subsidiary Interests and Transaction Subsidiary Interests, and Seller is transferring such REO Subsidiary Interests and Transaction Subsidiary Interests free and clear of any and all liens, pledges, encumbrances, charges, security interests or any other ownership interests of any nature encumbering such REO Subsidiary Interests and Transaction Subsidiary Interests.

(c) No Fraud . No fraudulent acts were committed by Seller or any of their respective Affiliates in connection with the issuance of such REO Subsidiary Interests and Transaction Subsidiary Interests.

(d) No Defaults . No (i) monetary default, breach or violation exists with respect to any agreement or other document governing or pertaining to the REO Subsidiary Interests or Transaction Subsidiary Interests, or (ii) event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach or violation of the REO Subsidiary Interests or Transaction Subsidiary Interests.

(e) No Modifications . Seller is not a party to any document, instrument or agreement, and there is no document, that by its terms modifies or affects the rights and obligations of any holder of the REO Subsidiary Interests or Transaction Subsidiary Interests and Seller has not consented to any material change or waiver to any term or provision of any such document, instrument or agreement and no such change or waiver exists.

(f) Power and Authority . Seller has full right, power and authority to sell and assign the REO Subsidiary Interests and Transaction Subsidiary Interests and the REO Subsidiary Interests and Transaction Subsidiary Interests have not been cancelled, satisfied or rescinded in whole or part nor has any instrument been executed that would effect a cancellation, satisfaction or rescission thereof.

(g) Consents and Approvals . Other than consents and approvals obtained as of the related Purchase Date or those already granted in the documents governing the REO Subsidiary Interests and Transaction Subsidiary Interests, no consent or approval by any Person is required in connection with Seller’s sale and/or Buyer’s acquisition of the REO Subsidiary Interests or Transaction Subsidiary Interests, for Buyer’s exercise of any rights or remedies in respect of the REO Subsidiary Interests or Transaction Subsidiary Interests or for Buyer’s sale, pledge or other disposition of the REO Subsidiary Interests or Transaction Subsidiary Interests. No third party holds any “right of first refusal”, “right of first negotiation”, “right of first offer”, purchase option, or other similar rights of any kind, and no other impediment exists to any such transfer or exercise of rights or remedies with respect to the REO Subsidiary Interests or Transaction Subsidiary Interests.

(h) No Governmental Approvals . No consent, approval, authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority over Seller is required for any transfer or assignment by the holder of the REO Subsidiary Interests or Transaction Subsidiary Interests to the Buyer.

(i) Original Certificates . Seller has delivered to Buyer the original Certificates or other similar indicia of ownership of the REO Subsidiary Interests and Transaction Subsidiary Interests, however denominated, re-registered in Buyer’s name.

(j) No Litigation . Seller has not received written notice of any outstanding liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind for which the holder of the REO Subsidiary Interests or Transaction Subsidiary Interests is or may become obligated.

(k) Duly and Validly Issued . Each of the Certificates has been duly and validly issued in the name of Buyer.

(l) No Notices . Seller has not received written notice of any outstanding liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind for which the holder of the REO Subsidiary Interests or Transaction Subsidiary Interests is or may become obligated.

(m) REO Subsidiary Interests and Transaction Subsidiary Interests as Securities . The REO Subsidiary Interests and Transaction Subsidiary Interests (a) constitute “securities” as defined in Section 8-102 of the Uniform Commercial Code (b) are not dealt in or traded on securities exchanges or in securities markets, (c) do not constitute investment company securities (within the meaning of Section 8-103(c) of the Uniform Commercial Code) and (d) are not held in a securities account (within the meaning of Section 8-103(c) of the Uniform Commercial Code).

(n) No Distributions . There are (x) no outstanding rights, options, warrants or agreements for a purchase, sale or issuance, in connection with the REO Subsidiary Interests or Transaction Subsidiary Interests, (y) no agreements on the part of Seller to issue, sell or distribute the REO Subsidiary Interests or Transaction Subsidiary Interests (except as contemplated or permitted by this Agreement), and (z) no obligations on the part of Seller (contingent or otherwise) to purchase, repurchase, redeem or otherwise acquire any securities or any interest therein (other than from Buyer or as contemplated by this Agreement) or to pay any dividend or make any distribution in respect of the REO Subsidiary Interests or Transaction Subsidiary Interests (other than to Buyer or as contemplated by this Agreement until the repurchase of the REO Subsidiary Interests or Transaction Subsidiary Interests).

(o) Conveyance; First Priority Lien . Upon delivery to the Buyer of the Certificate (and assuming the continuing possession by the Buyer of such Certificate in accordance with the requirements of applicable law) and the filing of a financing statement covering the Transaction Subsidiary Interests or REO Subsidiary Interests, as applicable, in the appropriate jurisdictions and naming the Seller as debtor and the Buyer as secured party, Seller has conveyed and transferred to Buyer all of its right, title and interest to the Transaction Subsidiary Interests and REO Subsidiary Interests, including taking all steps as may be necessary in connection with the endorsement, transfer of power, delivery and pledge of all Transaction Subsidiary Interests and REO Subsidiary Interests as “securities” (as defined in Section 8-102 of the Uniform Commercial Code) to Buyer. The Lien granted hereunder is a first priority Lien on the Transaction Subsidiary Interests and REO Subsidiary Interests.

(p) No Waiver . Seller has not waived or agreed to any waiver under, or agreed to any amendment or other modification of the Transaction Subsidiary Agreement or REO Subsidiary Agreement except as agreed to by Buyer in writing.

(q) Status of Transaction Subsidiary and REO Subsidiary . Since the date of its formation until the date of this Agreement, neither the Transaction Subsidiary nor the REO Subsidiary has been engaged in any business or activity and has owned no assets other than the assets made subject to Transactions hereunder and related Repurchase Assets.

(r) Margin Regulations . The use of all funds acquired by Seller under this Agreement will not conflict with or contravene any of Regulations D, T, U or X promulgated by the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified.

SCHEDULE 1-C

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO REO PROPERTY

The Seller makes the following representations and warranties to the Buyer, with respect to the REO Property owned or deemed owned by the REO Subsidiary, that as of the Conversion Date for the contribution of REO Property by REO Subsidiary and as of the date of this Agreement and any Transaction hereunder relating to the REO Subsidiary Interests is outstanding and on each day while the Program Agreements and any Transaction hereunder is in full force and effect.

(a) Asset File . (i) The related Deed in the name of the REO Subsidiary shall have been submitted for recording within fifteen (15) Business Days of the related Mortgage Loan having been converted to REO Property, (ii) a copy of the recorded Deed shall be delivered to the applicable Custodian within one hundred and eighty (180) calendar days of such REO Property being acquired by the REO Subsidiary, and (iii) all other documents required to be delivered as part of the Asset File shall be delivered to the applicable Custodian within fifteen (15) Business Days of such REO Property being acquired by the REO Subsidiary or held by an attorney in connection with a foreclosure pursuant to a Bailee Letter.

(b) Ownership . The REO Subsidiary is the sole owner and holder of the REO Property and the Servicing Rights related thereto. The REO Subsidiary has not assigned or pledged the REO Property and the related Servicing Rights except as contemplated in the Agreement, and, except as otherwise disclosed to Buyer in writing, the REO Property is free and clear of any lien or encumbrance other than (A) liens for real estate taxes not yet due and payable, (B) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording of the related security instrument, such exceptions appearing of record being acceptable to mortgage lending institutions generally, and (C) other matters to which like properties are commonly subject which do not, individually or in the aggregate, materially interfere with the use, enjoyment or marketability of the REO Property.

(c) Title . Each Deed is genuine, constitutes the legal, valid and binding conveyance of the REO Property in fee simple to the REO Subsidiary or its designee.

(d) REO Property as Described . The information set forth in the related Asset Schedule and all other information or data furnished by, or on behalf of, Seller to Buyer is true and correct in all material respects as of the date or dates on which such information is furnished.

(e) Taxes and Assessments . Except as otherwise disclosed to Buyer in writing, there are no property taxes, governmental charges, levies or governmental assessments with respect to any REO Property that are delinquent by more than ninety (90) days; provided, however, that a disclosure of outstanding charges provided to Buyer may include the total amount without specifying the related categories of outstanding charges.

(f) No Litigation . Other than any customary claim or counterclaim arising out of any eviction, foreclosure or collection proceeding relating to any REO Property or as otherwise disclosed in writing to Buyer, there is no litigation, proceeding or governmental investigation pending, or any order, injunction or decree outstanding, existing or relating to Seller, REO Subsidiary or any of their Subsidiaries with respect to the REO Property that would materially and adversely affect the value of the REO Property.

(g) Existing Insurance . All improvements upon each REO Property are insured by a borrower or blanket hazard insurance policy in an amount at least equal to the lesser of (1) 100% of the maximum insurable value of such improvements; (2) the replacement value of such improvements; and (3) the amount of the BPO valuation. Each such insurance policy contains a standard mortgagee clause naming REO Subsidiary or Servicer, its successors and assigns as loss payee or named insured, as applicable. If such REO Property at the time of origination of the related mortgage loan was in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards (and such flood insurance has been made available) a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration is in effect with respect to such REO Property unless such REO Property is no longer so identified.

(h) No Mechanics’ Liens . Except as otherwise disclosed to Buyer in writing, there are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the REO Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.

(i) No Damage . Except as otherwise disclosed to Buyer in writing, the REO Property is undamaged by water, fire, earthquake, earth movement other than earthquake, windstorm, flood, tornado, defective construction materials or work, or similar casualty which would cause such REO Property to become uninhabitable.

(j) No Condemnation . Except as otherwise disclosed to Buyer in writing, there is no proceeding pending, or to Seller’s knowledge, threatened, for the total or partial condemnation of the REO Property.

(k) No Hazardous Materials . To Seller’s knowledge, there is no condition affecting any REO Property (x) relating to lead paint, radon, asbestos or other hazardous materials, (y) requiring remediation of any condition or (z) relating to a claim which could impose liability upon, diminish rights of or otherwise adversely affect Buyer.

(l) Location and Type of REO Property . Unless otherwise agreed in writing by Buyer, each REO Property is located in the U.S. or a territory of the U.S. and consists of a one- to four-unit residential property, which may include, but is not limited to, a single-family dwelling, townhouse, condominium unit, or unit in a planned unit development.

(m) No Fraudulent Acts . No fraudulent acts were committed by Seller or REO Subsidiary in connection with the acquisition of such REO Property.

(n) Acquisition of REO Property . With respect to each such REO Property, (i) such REO Property is a Mortgaged Property acquired by REO Subsidiary through foreclosure or by deed in lieu of foreclosure or otherwise, which was, prior to such foreclosure or deed in lieu of foreclosure, subject to the lien of a Mortgage Loan, and (ii) with respect to each such REO Property, upon the consummation of the related Transaction, the applicable Custodian shall have received the related Asset File and such Asset File shall not have been released from the possession of the applicable Custodian for longer than the time periods permitted under the related Custodial Agreement.

(o) No Occupants . Except as otherwise disclosed in writing to Buyer, no tenant or other party has any right to occupy or is currently occupying any REO Property. Other than with respect to a REO Property as to which the redemption period has not yet expired or the eviction process has not yet been completed, no holdover borrower has any right to occupy or is currently occupying any REO Property.

(p) Title Policy . From and after the date that is one (1) Business Day following the conversion of a Mortgage Loan to a REO Property, the REO Property is insured by either an American Land Title Association (“ALTA”) title insurance policy or other generally acceptable form of policy of title insurance acceptable to prudent mortgage lending institutions in the area where the related REO Property is located, issued by a title insurer acceptable to prudent mortgage lenders. With respect to each REO Property, REO Subsidiary is the sole insured of such policy, and such policy is in full force and effect and will be in full force and effect and inure to the benefit of Seller and its successors. To the Seller's knowledge, no claims have been made under such policy and no prior holder of the REO Property, including REO Subsidiary, has done by act or omission, anything that would impair the coverage of such policy.

(q) FHA/VA Insurance . Each REO Property (i) is covered by FHA Mortgage Insurance and there exists no impairment to full recovery without indemnity to HUD or the FHA under the FHA Mortgage Insurance, or (ii) is guaranteed, or eligible to be guaranteed by a VA Loan Guaranty Agreement, under the VA Regulations and there exists no impairment to full recovery without indemnity to the VA under the VA Loan Guaranty Agreement.

SCHEDULE 1-D

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO POOLED MORTGAGE LOANS

With respect to Pooled Mortgage Loans, Seller shall be deemed to make the representations and warranties set forth below to Buyer as of the Purchase Date and as of each date the Pooled Mortgage Loans are subject to a Transaction.

Seller makes the following representations and warranties to Buyer with respect to each Pooled Mortgage Loan, as of the Purchase Date for the purchase of any Pooled Mortgage Loan by Buyer from Seller and as of the date of this Agreement and any Transaction hereunder and at all times while the Program Agreements and any Transaction hereunder is in full force and effect. For purposes of this Schedule 1-D and the representations and warranties set forth herein, a breach of a representation or warranty shall be deemed to have been cured with respect to a Pooled Mortgage Loan if and when Seller has taken or caused to be taken action such that the event, circumstance or condition that gave rise to such breach no longer adversely affects such Pooled Mortgage Loan. With respect to those representations and warranties which are made to the best of Seller’s knowledge, if it is discovered by Seller or Buyer that the substance of such representation and warranty is inaccurate, notwithstanding Seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation and warranty.

(a) Reserved .

(a) Agency Representations . As to each Pooled Mortgage Loan being placed in a Ginnie Mae Security, all of the representations and warranties made or deemed made respecting same contained in (or incorporated by reference therein) the Ginnie Mae Guide provisions and Ginnie Mae program (collectively, the “ Standard Agency Mortgage Loan Representations ”) are (and shall be as of all relevant dates) true and correct in all material respects; and except as may be expressly and previously disclosed to Buyer, Seller has not negotiated with the applicable Agency any exceptions or modifications to such Standard Agency Mortgage Loan Representations.

(b) Committed Mortgage Loans . The Ginnie Mae Security to be issued on account of the Pooled Mortgage Loans is covered by a Take-out Commitment, does not exceed the availability under such Take-out Commitment. Each Take-out Commitment is a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

(c) Certification . With respect to Pooled Mortgage Loans being placed in a Ginnie Mae Security, the related Custodian has certified such Pooled Mortgage Loans to the Agency for the purpose of being swapped for a Ginnie Mae Security backed by such pool, in each case, in accordance with the terms of the Ginnie Mae Guide.

(d) Sole Subscriber . As to the Ginnie Mae Security being issued with respect to Pooled Mortgage Loans, Buyer or such other Person approved in writing by Buyer has been listed as the sole subscriber thereto.

SCHEDULE 2

AUTHORIZED REPRESENTATIVES

SELLER AND REO SUBSIDIARY AUTHORIZATIONS

Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Seller and REO Subsidiary under this Agreement:

Authorized Representatives for execution of Program Agreements and amendments



Name	Title	Signature
Christopher Mullins	President
Cheryl A. Collins	Senior Vice President

Authorized Representatives for execution of Transaction Requests and day-to-day operational functions



Name	Title	Signature
Kayce Davis	Vice President
Andrew G. Dokos	Vice President
Robbye Johnson	Vice President

BUYER AUTHORIZATIONS

Any of the persons whose signatures and titles appear below, including any other authorized officers, are authorized, acting singly, to act for Buyer under this Agreement:

[SEE ATTACHED]

TRANSACTION SUBSIDIARY AUTHORIZATIONS

Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Transaction Subsidiary under this Agreement:

[SEE ATTACHED]

EXHIBIT A

FORM OF ADDITIONAL LANGUAGE TO BE INCLUDED IN TRANSACTION REQUEST

In accordance with Section 2.06 of the Trust Agreement, the Seller, in its capacity as depositor under the Trust Agreement, does hereby grant, transfer, assign, set over and otherwise convey to the Trustee, without recourse, all right, title and interest of the Seller in and to each of the Mortgage Loans identified on the attached Schedule I.

Schedule I to Transaction Request

[schedule of Mortgage Loans to be attached to email]

- 1 -

LEGAL02/36113760v17

EXHIBIT B

FORM OF TRADE ASSIGNMENT

[NAME] (“ Takeout Investor ”)
[Address]

[Address]

Attention: [__]

[DATE]

Ladies and Gentlemen:

Attached hereto is a correct and complete copy of your confirmation of commitment (the “ Commitment ”) for the following security (the “ Security ”):

Trade Date: [__]

Settlement Date: [__]

Security Description: [__]

Coupon: [__]

Price: [__]

Par Amount: [__]

Pool Number: [__]

The undersigned customer (the “ Customer ”) has assigned the Security to Credit Suisse First Boston Mortgage Capital LLC (“ Credit Suisse ”) as security for Customer’s Obligations under the Master Repurchase Agreement, as amended (the “ Agreement ”), by and among Customer, Credit Suisse and [________].

This is to confirm that (i) Takeout Investor’s obligation to purchase the Security on the above terms in accordance with the Commitment is in full force and effect, (ii) Takeout Investor will accept delivery of the Security directly from Credit Suisse, (iii) Takeout Investor will pay Credit Suisse for the Security, (iv) Customer unconditionally guarantees payment to Credit Suisse of all sums due under the Commitment, (v) Credit Suisse shall deliver the Security to Takeout Investor on the above terms and in accordance with the Commitment. Payment will be made “delivery versus payment” to Takeout Investor in immediately available funds. Capitalized terms used, but not otherwise defined herein, shall have the respective meanings assigned to such terms in the Agreement.

B-1

LEGAL02/36113760v17



Very truly yours, [CUSTOMER] By: Name: Title:	Agreed to, confirmed and accepted: [TAKEOUT INVESTOR] By: Name: Title:

EXHIBIT C

RESERVED

EXHIBIT D

FORM OF SELLER PARTY POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that [Reverse Mortgage Solutions, Inc.] [RMS CS Repo Trust 2016] [RMS REO CS, LLC] (“ Seller Party ”) hereby irrevocably constitutes and appoints Credit Suisse First Boston Mortgage Capital LLC (“ Buyer ”) and any officer or agent thereof, with full power of substitution, as its true and lawful attorney‑in‑fact with full irrevocable power and authority in the place and stead of Seller Party and in the name of Seller Party or in its own name, from time to time in Buyer’s discretion:

(a) in the name of Seller Party, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any assets purchased by Buyer under the Master Repurchase Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “ Agreement ”) dated February 23, 2016 (the “ Assets ”) and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Buyer for the purpose of collecting any and all such moneys due with respect to any other assets whenever payable;

(b) to pay or discharge taxes and liens levied or placed on or threatened against the Assets;

(c) (i) to direct any party liable for any payment under any Assets to make payment of any and all moneys due or to become due thereunder directly to Buyer or as Buyer shall direct; (ii) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Assets; (iii) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Assets or any proceeds thereof and to enforce any other right in respect of any Assets; (v) to defend any suit, action or proceeding brought against Seller Party with respect to any Assets; (vi) to settle, compromise or adjust any suit, action or proceeding described in clause (v) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate; (vii) to cause the mortgagee of record to be changed to Buyer on the FHA or VA system, as applicable; and (viii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Assets as fully and completely as though Buyer were the absolute owner thereof for all purposes, and to do, at Buyer’s option and Seller Party’s expense, at any time, and from time to time, all acts and things which Buyer deems necessary to protect, preserve or realize upon the Assets and Buyer’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller Party might do;

(d) for the purpose of carrying out the transfer of servicing with respect to the Assets from Seller Party to a successor servicer appointed by Buyer in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the generality of the foregoing, Seller Party hereby gives Buyer the power and right, on behalf of Seller Party, without assent by Seller Party, to, in the name of Seller Party or its own name, or otherwise, prepare and send or cause to be sent “good‑bye” letters to all mortgagors under the Assets, transferring the servicing of the Assets to a successor servicer appointed by Buyer in its sole discretion; and

(e) for the purpose of delivering any notices of sale to mortgagors or other third parties, including without limitation, those required by law.

Seller Party hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.

Seller Party also authorizes Buyer, from time to time, to execute, in connection with any sale, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Assets.

The powers conferred on Buyer hereunder are solely to protect Buyer’s interests in the Assets and shall not impose any duty upon it to exercise any such powers. Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to Seller Party for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.

TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER PARTY HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND BUYER ON ITS OWN BEHALF AND ON BEHALF OF BUYER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.

[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURES FOLLOW.]

IN WITNESS WHEREOF Seller Party has caused this Power of Attorney to be executed and Seller Party’s seal to be affixed this ______ day of ____________, 201__.

[REVERSE MORTGAGE SOLUTIONS, INC.]


By:	Name: Title:

[RMS CS REPO TRUST 2016]


By:	Name: Title:

[RMS REO CS, LLC]


By:	Name: Title:



STATE OF	)
	)	ss.:
COUNTY OF	)

On the ______ day of ____________, 201__ before me, a Notary Public in and for said State, personally appeared ________________________________, known to me to be _____________________________________ of [Reverse Mortgage Solutions, Inc.] [RMS CS Repo Trust 2016] [RMS REO CS, LLC], the institution that executed the within instrument and also known to me to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day and year in this certificate first above written.

_____________________________
Notary Public

My Commission expires ________________________________

EXHIBIT E

RESERVED

EXHIBIT F

RESERVED

EXHIBIT G

SELLER’S, REO SUBSIDIARY’S AND TRANSACTION SUBSIDIARY’S TAX IDENTIFICATION NUMBER

Seller Tax ID: 77-0672274

Transaction Subsidiary: 77-0672274

REO Subsidiary: 81-1530433

EXHIBIT H

FORM OF CORRESPONDENT SELLER RELEASE

[insert date]

Reverse Mortgage Solutions, Inc.

14405 Walters Road, Suite 200

Houston, TX 77014

Attention: Treasurer, Andrew G. Dokos

Re: Correspondent Seller Release

Effective immediately upon the receipt (the date and time of such receipt, the “ Date and

Time of Sale ”) by [Name of Correspondent Seller] of $____________, [Name of Correspondent

Seller] hereby relinquishes any and all right, title and interest it may have in and to the mortgage

loans described in Exhibit A attached hereto (the “ Loans ”), including any security interest

therein, and certifies that all notes, mortgages, assignments and other documents in its possession

or in the possession of its custodial agent relating to such Loans have been released to Reverse Mortgage Solutions, Inc. or its designee as of the Date and Time of Sale.

[NAME OF CORRESPONDENT SELLER]

By:________________________________

Name:

Title:

EXHIBIT A TO CORRESPONDENT SELLER RELEASE

[List of Loans]

EXHIBIT I

FORM OF ADDENDUM TO ESCROW INSTRUCTIONS TO BE PROVIDED BY SELLER BEFORE CLOSING

This Addendum (“Addendum”) modifies the Loan Closing/Escrow Instructions (“Escrow Instructions”) dated [_______], [____] from Reverse Mortgage Solutions, Inc. (“Seller”) to _________________ (“Escrow Agent”).

Seller is a party to a master repurchase agreement (“Warehouse Agreement”) pursuant to which the buyer thereunder (the “Buyer”) has agreed to provide funds (“Escrow Funds”) to Seller to finance certain residential mortgage loans (“Mortgage Loans”) for which you are acting as Escrow Agent. Buyer’s document custodian and funds disbursement agent, Deutsche Bank National Trust Company (“Custodian”), will disburse such funds on behalf of Buyer.

You hereby agree that you shall (a) receive Escrow Funds from Buyer to be disbursed by the Custodian in connection with the Escrow Instructions, (b) hold such Escrow Funds in trust, without deduction, set-off or counterclaim for the sole and exclusive benefit of Buyer until such Escrow Funds are fully disbursed on behalf of Buyer in accordance with the Escrow Instructions, and (c) disburse such Escrow Funds on the Disbursement Date specified in the Escrow Instructions (“Disbursement Date”) only after you have followed the requirements of the Escrow Instructions with respect to the Mortgage Loans. In the event that such Escrow Funds cannot be disbursed on the Disbursement Date in accordance with the Escrow Instructions, you agree to promptly remit such Escrow Funds to the Custodian by re-routing via wire transfer such Escrow Funds in immediately available funds, without deduction, set-off or counterclaim, back to the account specified in Custodian’s incoming wire transfer.

You further agree that, upon disbursement of the Escrow Funds, you will hold all Mortgage Loan Documents specified in the Escrow Instructions in escrow as agent and bailee for Buyer, and will forward the Mortgage Loan Documents and original Escrow Instructions in connection with such Mortgage Loans by overnight courier to the Custodian within five (5) Business Days following the date of origination.

You agree that all fees, charges and expenses regarding your services to be performed pursuant to the Escrow Instructions are to be paid by Seller or its borrowers, and Buyer shall have no liability with respect thereto.

You represent, warrant and covenant that you are not an affiliate of or otherwise controlled by Seller, and that you are acting as an independent contractor and not as an agent of Seller.

The provisions of this Addendum may not be modified, amended or altered, except by written instrument, executed by the parties hereto and Buyer. You understand that Buyer shall act in reliance upon the provisions set forth in the Escrow Instructions, and that Buyer is an intended third party beneficiary hereof.

[ESCROW AGENT/SETTLEMENT AGENT]

By: ____________________________

Name: __________________________

Title: ___________________________

EXHIBIT J

FORM OF SERVICER NOTICE

[Date]

[________________], as Servicer
[ADDRESS]
Attention: ___________

Re:

Master Repurchase Agreement, dated as of February 23, 2016 (the “ Repurchase Agreement ”), by and between Reverse Mortgage Solutions, Inc. (the “ Seller ”), RMS REO CS, LLC (the “ REO Subsidiary ”), Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not in its individual capacity but solely as trustee for RMS CS Repo Trust 2016 (the “ Transaction Subsidiary ” and together with Seller and REO Subsidiary, the “ Seller Parties ”) and Credit Suisse First Boston Mortgage Capital LLC (the “ Buyer ”).

Ladies and Gentlemen:

[_____________] (the “ Servicer ”) is servicing certain mortgage loans and REO properties for Seller Parties pursuant to that certain Servicing Agreement between the Servicer and Seller Parties (the “ Servicing Agreement ”). Pursuant to the Repurchase Agreement among Buyer and the Seller Parties, the Servicer is hereby notified that Seller Parties have pledged to Buyer certain mortgage loans which are serviced by Servicer which are subject to a security interest in favor of Buyer.

Section 1. Defined Terms .

(a) As used herein, the following terms have the following meanings (all terms defined in this Section 1 or in other provisions of this Servicer Notice in the singular to have the same meanings when used in the plural and vice versa):

“ Accepted Servicing Practices ” means, with respect to any Mortgage Loan or REO Property, those mortgage servicing practices or property management practices, as applicable, of prudent mortgage lending institutions (including as set forth in the GNMA Guide, the FHA Regulations and the VA Regulations) which service mortgage loans and manage real estate properties, as applicable, of the same type as such Mortgage Loan or REO Property in the jurisdiction where the related Mortgaged Property is located, and which are in accordance with the applicable Agency servicing practices and procedures for mortgage-backed security pool mortgages as set forth in the applicable Agency guides, including future updates.

“ Affiliate ” means, with respect to any Person, any “affiliate” of such Person, as such term is defined in the Bankruptcy Code.

“ Agency ” means Freddie Mac, Fannie Mae or GNMA, as applicable.

“ Business Day ” means any day other than (A) a Saturday or Sunday and (B) a public or bank holiday in New York City or the State of California or Texas.

“ Custodian ” has the meaning set forth in the Repurchase Agreement.

“ FHA Mortgage Insurance ” means, mortgage insurance authorized under the National Housing Act, as amended from time to time, and provided by the FHA.

“ GNMA ” means the Government National Mortgage Association and any successor thereto.

“ GNMA Guide ” means the GNMA Mortgage-Backed Securities Guide, Handbook 5500.3, Rev. 1, as amended from time to time, and any related announcements, directives and correspondence issued by GNMA.

“ GNMA Security ” means a mortgage-backed security guaranteed by GNMA pursuant to the GNMA Guide.

“ HUD ” means the United States Department of Housing and Urban Development or any successor thereto.

“ Inbound Account ” has the meaning set forth in the Repurchase Agreement.

“ Income ” means, with respect to any Mortgage Loan or REO Property at any time until repurchased by the Seller, any principal received thereon or in respect thereof and all interest, dividends or other distributions thereon.

“ Lien ” means any mortgage, lien, pledge, charge, security interest or similar encumbrance.

“ Mortgage Loan ” means those mortgage loans subject to Transactions under the Repurchase Agreement.

“ Obligations ” has the meaning set forth in the Repurchase Agreement.

“ Program Agreements ” has the meaning set forth in the Repurchase Agreement.

“ Property ” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

“ Purchased Asset ” has the meaning set forth in the Repurchase Agreement.

“ Responsible Officer ” means as to any Person, the chief executive officer or, with respect to financial matters, the chief financial officer of such Person.

“ Servicer Material Adverse Effect ” means any (a) material adverse change to the property, business, operations or financial condition of Servicer, (b) material impairment of the ability of Servicer to perform its obligations under any of the Program Agreements to which it is a party, (c) material adverse effect on the validity, binding effect or enforceability against the Servicer of any of the Program Agreements to which Servicer is a party, or (d) material adverse effect on the rights and remedies of Buyer as against Servicer under any of the Program Agreements to which Servicer is a party.

“ Servicer Termination Event ” has the meaning set forth in Section 5(a).

“ Servicing Advances ” has the meaning set forth in the Servicing Agreement.

“ Servicing Fees ” has the meaning set forth in the Servicing Agreement.

“ REO Property ” means those REO properties subject to Transactions under the Repurchase Agreement.

“ VA ” means the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs.

(b) Capitalized terms used herein but not herein defined shall have the meanings ascribed thereto in the Repurchase Agreement.

Section 2. Remittance of Collections .

(a) The Servicer shall segregate all amounts collected on account of such Mortgage Loans and REO Properties in the Inbound Account in accordance with the terms and provisions of the Servicing Agreement. Following receipt by Servicer of written notice of the occurrence of an Event of Default, each of the Seller Parties hereby notifies and instructs the Servicer and the Servicer is hereby authorized and instructed to remit any and all amounts which would be otherwise payable to Seller Parties with respect to the Mortgage Loans and/or REO Property to the following account which instructions are irrevocable without the prior written consent of Buyer:

[INSERT INBOUND ACCOUNT]

(b) To the extent any of HUD or VA deducts, from amounts otherwise due on account of Mortgage Loans or REO Property subject to this Servicer Notice, any amounts owing by Servicer to HUD or VA, Servicer shall give prompt written notice thereof to Seller and Buyer and shall deposit, within two (2) Business Days following notice or knowledge of such deduction by HUD or VA, such deducted amounts into the Inbound Account.

Section 3. Agency Matters .

(a) Servicer shall maintain its status as an approved servicer for the Agency, HUD and VA, in each case in good standing (each such approval, a “ Servicer Approval ”). Servicer has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of mortgage loans and REO Property of the same types as may from time to time constitute Mortgage Loans and REO Properties and in accordance with Accepted Servicing Practices.

(b) Should Servicer for any reason, cease to possess all such Servicer Approvals, or should notification to the Agency or, to HUD, FHA or VA be required with respect to any non-compliance or breach, Servicer shall so notify Seller Parties and Buyer immediately in writing. Notwithstanding the preceding sentence, Servicer shall take, all necessary action to maintain all of its Servicer Approvals at all times during the term of the Repurchase Agreement and each outstanding Transaction. Servicer shall service all Mortgage Loans and REO Properties in accordance with the FHA Regulations or VA Regulations, as applicable.

Section 4. Covenants of Servicer . On and as of the date of this Servicer Notice and on each day until this Servicer Notice is no longer in force, Servicer covenants to permit representatives of Buyer, upon five (5) Business Days’ prior notice (unless a Servicer Termination Event shall have occurred and is continuing, in which case, one (1) Business Day’s prior notice shall be required), during normal business hours, to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent requested by Buyer as relating to the Mortgage Loans and underlying REO Property.

Section 5. Servicer Termination Events .

(a) Servicer’s right to service pursuant to each Servicing Agreement shall terminate upon the occurrence of any of the following (each a “ Servicer Termination Event ”):


(i)	An Event of Default;


(ii)	This Servicer Notice is deemed unenforceable;

(iii)

Servicer materially breaches or fails to comply with (A) the Servicing Agreement and such breach or failure continues uncured or unremedied for a period of thirty (30) calendar days or Servicer fails to diligently pursue a cure or remedy (without regard to any other cure periods) or (B) this Servicer Notice (relating to the deposit or transfer of funds) and such breach or failure continues uncured or unremedied for a period of two (2) Business Days (without regard to any other cure periods), in each case, after a Responsible Officer of a Seller Party or Servicer first learns of it;


(iv)	Servicer is unable to comply with the eligibility requirements, or ceases to be an approved servicer, of, in each case, GNMA, HUD or VA;


(v)	Servicer fails to make any required servicing advance, to the extent that such failure would be reasonably likely to impair FHA Mortgage Insurance coverage or VA Loan Guaranty Agreement coverage, with respect to the principal portion of any Mortgage Loan or would be reasonably likely to give rise to a liability to HUD, FHA or VA, as determined by Buyer in its good faith discretion;


(vi)	Servicer fails to make a required deposit to the Inbound Account (i) which is not cured within one (1) Business Day of Seller Party’s knowledge of such failure, or (ii) to the extent such failure or failures occur on multiple occasions (regardless of any subsequent cure);


(vii)	Servicer provides a notice of its intent to resign as Servicer of the Mortgage Loans and REO Property and a new Servicer reasonably acceptable to Buyer is not promptly appointed;


(viii)	Servicer is subject to FHA, HUD or VA fees or penalties which have not been paid or is subject to a set-off by any of FHA, HUD or VA which (A) is reasonably likely to result in a Servicer Material Adverse Effect or (B) failure or failures occur on a persistent and material basis after notice or knowledge thereof (regardless of any subsequent cure); or


(ix)	There shall occur a Servicer Material Adverse Effect, in the determination of Buyer.

(b) Upon the occurrence of a Servicer Termination Event at the Request of Buyer, Servicer shall transfer the servicing to a successor servicer in accordance with the terms of the Servicing Agreement.

Section 6. Notice of Event of Default .

(a) Upon an Event of Default, Buyer may send Servicer notice thereof (a “ Notice of Default ”) and Buyer shall identify in the Notice of Default the Mortgage Loans and REO Property subject to an Event of Default.

(b) Servicer may conclusively rely on any information or Notice of Default delivered by Buyer, and Seller Parties shall indemnify and hold Servicer harmless for any and all claims asserted against it, and for any liabilities, losses, damages, judgments, costs and expenses (including, without limitation, reasonable fees and expenses of counsel) imposed upon it for any actions taken by Servicer in connection with the delivery of such information or Notice of Default.

(c) Following receipt of a Notice of Default from Buyer, Servicer shall follow the instructions of Buyer exclusively with respect to the Mortgage Loans and REO Properties, and shall deliver to Buyer any information with respect to the Mortgage Loans and REO Properties reasonably requested by Buyer.

(d) Following receipt of a Notice of Default from Buyer, Seller and Servicer shall cooperate in changing the mortgagee of record to a successor appointed by Buyer.

Section 7. Indemnification . Without limiting the rights of Seller Parties and Buyer set forth in this Servicer Notice, Servicer shall indemnify Seller Parties and Buyer for any and all liabilities, losses, damages, judgments, costs and expenses (including, without limitation, reasonable fees and expenses of counsel) suffered for any breach of a representation, warranty or covenant in connection with or relating to or arising out of the Servicing Agreement and this Servicer Notice. Without prejudice to the survival of any other agreement of Servicer hereunder, the covenants and obligations of Servicer contained in this Section 7 shall survive the termination of this Servicer Notice.

Section 8. Delay Not Waiver; Remedies are Cumulative . No failure on the part of Buyer to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Buyer of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All rights and remedies of Buyer provided for herein are cumulative and in addition to any and all other rights and remedies provided by law, the Program Agreements and the other instruments and agreements contemplated hereby and thereby, and are not conditional or contingent on any attempt by Buyer to exercise any of its rights under any other related document. Buyer may exercise at any time after the occurrence of a Servicer Termination Event one or more remedies, as they so desire, and may thereafter at any time and from time to time exercise any other remedy or remedies.

Section 9. Counterparts . This Servicer Notice may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Servicer Notice by signing any such counterpart.

Section 10. Entire Agreement . This Servicer Notice embodies the entire agreement and understanding of the parties hereto and thereto and supersede any and all prior agreements, arrangements and understandings relating to the matters provided for herein and therein. No alteration, waiver, amendments, or change or supplement hereto shall be binding or effective unless the same is set forth in writing by a duly authorized representative of each party hereto.

Section 11. Successors and Assigns . This Servicer Notice shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

Section 12. Severability . If any provision of this Servicer Notice is declared invalid by any court of competent jurisdiction, such invalidity shall not affect any other provision of this Servicer Notice, and this Servicer Notice shall be enforced to the fullest extent permitted by law.

Section 13. Governing Law; Jurisdiction; Waiver of Trial by Jury .

(a) THIS SERVICER NOTICE SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTION 5 1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS SERVICER NOTICE AND/OR ANY OTHER PROGRAM AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN THE REPURCHASE AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH BUYER SHALL HAVE BEEN NOTIFIED; AND

(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.

(c) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SERVICER NOTICE AGREEMENT, ANY OTHER PROGRAM AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

Please acknowledge receipt of this instruction letter by signing in the signature block below and forwarding an executed copy to Buyer promptly upon receipt. Any notices to Buyer should be delivered to the following addresses: Eleven Madison Avenue, New York, New York 10010; Attention: Margaret Dellafera; Telephone: 212‑325‑6471.

Very truly yours,

[____________________]

By:
Name:
Title:

ACKNOWLEDGED:

[____________________]
as Servicer

By:
Title:
Telephone:
Facsimile:

REVERSE MORTGAGE SOLUTIONS, INC.

By:
Name:
Title:

RMS REO CS, LLC

By:
Name:
Title:

RMS CS REPO TRUST 2016

By:
Name:
Title:

B-2

LEGAL02/36113760v17

Exhibit 10.23.2

EXECUTION

GUARANTY

GUARANTY, dated as of February 23, 2016 (as amended, supplemented, or otherwise modified from time to time, this “ Guaranty ”), made by Walter Investment Management Corp., a Maryland corporation (the “ Guarantor ”), in favor of Credit Suisse First Boston Mortgage Capital, LLC (the “ Buyer ”).

RECITALS

Pursuant to the Master Repurchase Agreement, dated as of February 23, 2016 (as amended, supplemented or otherwise modified from time to time, the “ Repurchase Agreement ”), among Reverse Mortgage Solutions, Inc. (the “ Seller ”), RMS REO CS, LLC (the “ REO Subsidiary ”), Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not in its individual capacity, but solely as trustee for RMS CS Repo Trust 2016 (the “ Transaction Subsidiary ” and together with Seller and REO Subsidiary, each a “ Seller Party ” and collectively, the “ Seller Parties ”) and the Buyer, the Buyer has agreed from time to time to enter into transactions in which the Seller agrees to transfer to Buyer Purchased Assets against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Purchased Assets at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “ Transaction ”. It is a condition precedent to the obligation of the Buyer to enter into Transactions under the Repurchase Agreement that the Guarantor shall have executed and delivered this Guaranty to the Buyer.

NOW, THEREFORE, in consideration of the foregoing premises, to induce the Buyer to enter into the Repurchase Agreement and to enter into Transactions thereunder, the Guarantor hereby agrees with the Buyer, as follows:

1. Defined Terms .

(a) Unless otherwise defined herein, terms which are defined in the Repurchase Agreement and used herein are so used as so defined.

(b) For purposes of this Guaranty, “Obligations” shall mean all obligations and liabilities of the Seller Parties to the Buyer, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, or out of or in connection with the Repurchase Agreement and any other Program Agreements and any other document made, delivered or given in connection therewith or herewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees and disbursements of counsel to the Buyer that are required to be paid by a party to the Transaction pursuant to the terms of the Program Agreements and costs of enforcement of this Guaranty) or otherwise.

2. Guaranty .

(a) The Guarantor hereby unconditionally and irrevocably guarantees to the Buyer the prompt and complete payment and performance by the Seller Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations.

(b) The Guarantor further agrees to pay any and all expenses (including, without limitation, all fees and disbursements of counsel) which may be paid or incurred by the Buyer in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect to, or collecting against, the Guarantor under this Guaranty. This Guaranty shall remain in full force and effect until the later of (i) the termination of the Repurchase Agreement or (ii) the Obligations are paid in full, notwithstanding that from time to time prior thereto the Seller Parties may be free from any Obligations.

(c) No payment or payments made by the Seller Parties or any other Person or received or collected by the Buyer from the Seller Parties or any other Person by virtue of any action or proceeding or any set-off or appropriation or application, at any time or from time to time, in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of the Guarantor hereunder which shall, notwithstanding any such payment or payments, remain liable for the amount of the Obligations until the Obligations are paid in full.

(d) Guarantor agrees that whenever, at any time, or from time to time, the Guarantor shall make any payment to the Buyer on account of the Guarantor’s liability hereunder, the Guarantor will notify the Buyer in writing that such payment is made under this Guaranty for such purpose.

3. Right of Set-off . The Buyer is hereby irrevocably authorized at any time and from time to time without notice to the Guarantor, any such notice being hereby waived by the Guarantor, to set off and appropriate and apply any and all monies and other property of the Guarantor, deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Buyer or any affiliate thereof to or for the credit or the account of the Guarantor, or any part thereof in such amounts as the Buyer may elect, on account of the Obligations and liabilities of the Guarantor hereunder and claims of every nature and description of the Buyer against the Guarantor, in any currency, whether arising hereunder, under the Repurchase Agreement or otherwise, as the Buyer may elect, whether or not the Buyer has made any demand for payment and although such Obligations and liabilities and claims may be contingent or unmatured. The Buyer shall notify the Guarantor promptly of any such set-off and the application made by the Buyer, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Buyer under this paragraph are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Buyer may have.

4. Subrogation . Notwithstanding any payment or payments made by the Guarantor hereunder or any set-off or application of funds of the Guarantor by the Buyer, the Guarantor shall

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not be entitled to be subrogated to any of the rights of the Buyer against the Seller Parties or any other guarantor or any collateral security or guarantee or right of offset held by the Buyer for the payment of the Obligations, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement from the Seller Parties or any other guarantor in respect of payments made by the Guarantor hereunder, until all amounts owing to the Buyer by the Seller Parties on account of the Obligations are paid in full and the Repurchase Agreement is terminated. If any amount shall be paid to the Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amounts shall be held by the Guarantor in trust for the Buyer, segregated from other funds of the Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned over to the Buyer in the exact form received by the Guarantor (duly indorsed by the Guarantor to the Buyer, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Buyer may determine.

5. Amendments, etc. with Respect to the Obligations . Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Guarantor, and without notice to or further assent by the Guarantor, any demand for payment of any of the Obligations made by the Buyer may be rescinded by the Buyer, and any of the Obligations continued, and the Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Buyer, and the Repurchase Agreement, and the other Program Agreements and any other document in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Buyer may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Buyer for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. The Buyer shall have no obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for this Guaranty or any property subject thereto. When making any demand hereunder against the Guarantor, the Buyer may, but shall be under no obligation to, make a similar demand on the Seller Parties or any other guarantor, and any failure by the Buyer to make any such demand or to collect any payments from the Seller Parties or any such other guarantor or any release of the Seller Parties or such other guarantor shall not relieve the Guarantor of its obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of the Buyer against the Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

6. Guaranty Absolute and Unconditional .

(a) Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by the Buyer upon this Guaranty or acceptance of this Guaranty; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived in reliance upon this Guaranty; and all dealings between the Seller Parties or the Guarantor, on the one hand, and the Buyer, on the other, shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guaranty. Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Seller Parties or the

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Guarantor with respect to the Obligations. This Guaranty shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (i) the validity or enforceability of the Repurchase Agreement, the other Program Agreements, any of the Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Buyer, (ii) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Seller Parties against the Buyer, or (iii) any other circumstance whatsoever (with or without notice to or knowledge of the Seller Parties or the Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Seller Parties for the Obligations, or of the Guarantor under this Guaranty, in bankruptcy or in any other instance. When pursuing its rights and remedies hereunder against the Guarantor, the Buyer may, but shall be under no obligation, to pursue such rights and remedies that they may have against the Seller Parties or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by the Buyer to pursue such other rights or remedies or to collect any payments from the Seller Parties or any such other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Seller Parties or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve the Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Buyer against the Guarantor. This Guaranty shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantor and their successors and assigns thereof, and shall inure to the benefit of the Buyer, and successors, indorsees, transferees and assigns, until all the Obligations and the obligations of the Guarantor under this Guaranty shall have been satisfied by payment in full, notwithstanding that from time to time during the term of the Repurchase Agreement the Seller Parties may be free from any Obligations.

(b) Without limiting the generality of the foregoing, Guarantor hereby agrees, acknowledges, and represents and warrants to the Buyer as follows:

(i) Guarantor hereby waives any defense arising by reason of, and any and all right to assert against the Buyer any claim or defense based upon, an election of remedies by the Buyer which in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor’s subrogation rights, rights to proceed against the Seller Parties or any other guarantor for reimbursement or contribution, and/or any other rights of the Guarantor to proceed against the Seller Parties, against any other guarantor, or against any other person or security.

(ii) Guarantor is presently informed of the financial condition of the Seller Parties and of all other circumstances which diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. The Guarantor hereby covenants that it will make its own investigation and will continue to keep itself informed of the Seller Parties’ financial condition, the status of other guarantors, if any, of all other circumstances which bear upon the risk of nonpayment and that it will continue to rely upon sources other than the Buyer for such information and will not rely upon the Buyer for any such information. Absent a written request for such information by the Guarantor to the Buyer, Guarantor hereby waives its right, if any, to require the Buyer to disclose to Guarantor any

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information which the Buyer may now or hereafter acquire concerning such condition or circumstances including, but not limited to, the release of or revocation by any other guarantor.

(iii) Guarantor has independently reviewed the Repurchase Agreement and related agreements and has made an independent determination as to the validity and enforceability thereof, and in executing and delivering this Guaranty to the Buyer, Guarantor is not in any manner relying upon the validity, and/or enforceability, and/or attachment, and/or perfection of any Liens or security interests of any kind or nature granted by the Seller Parties or any other guarantor to the Buyer, now or at any time and from time to time in the future.

7. Reinstatement . This Guaranty shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Buyer upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Seller Parties or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Seller Parties or any substantial part of its property, or otherwise, all as though such payments had not been made.

8. Payments . Guarantor hereby agrees that the Obligations will be paid to the Buyer without set-off or counterclaim in U.S. Dollars.

9. Representations and Warranties . Guarantor makes and represents to Buyer as of the date hereof and as of each Purchase Date for any Transaction under the Repurchase Agreement the following representations and warranties:

(a) The Guarantor (i) is a duly organized and validly existing corporation in good standing under the laws of the State of Maryland, (ii) has the corporate power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its property or the conduct of its business requires such qualifications, unless such failure is not reasonably likely (either individually or in the aggregate) to cause a Material Adverse Effect.

(b) The execution, delivery and performance of this Guaranty (i) have been duly authorized by all necessary limited liability company action on the part of Guarantor, (ii) will not violate any provision of applicable law, statue, rule or regulation or any order, writ, injunction or decree of any court or Governmental Authority applicable to Guarantor, (iii) will not violate any provision of the organizational documents of Guarantor, (iv) will not violate or result in a default under any provision of any indenture, material agreement, bond, note or other similar material instrument to which Guarantor is a party or by which Guarantor or any of its properties or assets are bound, and (v) will not result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any properties or assets of Guarantor.

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(d) Guarantor will realize a direct economic benefit as a result of the amounts paid by Buyer to Seller Parties pursuant to the Repurchase Agreement.

10. Reserved .

11. Negative Covenants . Guarantor covenants and agrees with Buyer that, during the term of the Repurchase Agreement it will make those covenants and agreements with Buyer as set forth in Sections 6.03, 6.08 and 6.09 of the Credit Agreement. When making those covenants and agreements set forth in the Credit Agreement with the Buyer under this Guaranty, the defined terms used therein unless modified hereunder shall have the meanings set forth in the Credit Agreement and section references and references to schedules and exhibits shall refer to those sections, schedules and exhibits in the Credit Agreement. To the extent provisions of the Credit Agreement are incorporated by reference and such provisions use other defined terms set forth in the Credit Agreement, such defined terms are hereby incorporated by reference as well. Notwithstanding that the Credit Agreement may be terminated, the provisions incorporated by reference into this Guaranty shall survive and continue to bind the Guarantor hereunder. Notwithstanding the foregoing, the following defined terms used in Article 6 of the Credit Agreement and sections in Article 6 of the Credit Agreement shall have the following meanings and/or usages and are hereby amended as follows under the Program Agreements:


•	“Borrower” shall mean “Guarantor”.


•	The reference to the term “Closing Date” in the definition of Unrestricted Subsidiary (as used in Article 6) shall mean the “Closing Date” as defined in the Credit Agreement.


•	The use of the terms “Default” and “Event of Default” in Section 6.03 of the Credit Agreement as incorporated herein by reference shall mean a Default or Event of Default under the Credit Agreement and a Default or Event of Default solely related to Section 15(o) of the Repurchase Agreement.


•	All references to restrictions on dividends imposed on any Person other than the Guarantor shall be deemed deleted.

12. Credit Agreement . Guarantor shall promptly provide to Buyer all amendments, waivers, modifications and supplements to the Credit Agreement.

13. Event of Default . If an Event of Default under the Repurchase Agreement shall have occurred and be continuing, the Guarantor agrees that, as between the Guarantor and Buyer, the Obligations may be declared to be due for purposes of this Guaranty notwithstanding any stay, injunction or other prohibition which may prevent, delay or vitiate any such declaration as against

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a Seller Party and that, in the event of any such declaration (or attempted declaration), such Obligations shall forthwith become due by the Guarantor for purposes of this Guaranty.

14. Severability . Any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

15. Headings . The paragraph headings used in this Guaranty are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

16. No Waiver; Cumulative Remedies . The Buyer shall not by any act (except by a written instrument pursuant to paragraph 17 hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of the Buyer, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Buyer of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Buyer would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided by law.

17. Waivers and Amendments; Successors and Assigns; Governing Law . None of the terms or provisions of this Guaranty may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the Guarantor and the Buyer, provided that any provision of this Guaranty may be waived by the Buyer in a letter or agreement executed by the Buyer or by facsimile or electronic transmission from the Buyer. This Guaranty shall be binding upon the successors and assigns of the Guarantor and shall inure to the benefit of the Buyer and its respective successors and assigns. .

18. Notices . Any and all notices, statements, demands or other communications hereunder may be given by a party to the other by mail, email, facsimile, messenger or otherwise to the address specified below, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence. In all cases, to the extent that the related individual set forth in the respective “Attention” line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person.

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If to Guarantor:

Walter Investment Management Corp.

3000 Bayport Drive, Suite 1100

Tampa, Florida 33607
Attention: Stuart D. Boyd, Senior Vice President Administration and Deputy General Counsel
Phone Number: 813-421-7605
Fax Number: 813-281-5635
E‑mail: sboyd@walterinvestment.com

If to Buyer:

Credit Suisse First Boston Mortgage Capital LLC
c/o Credit Suisse Securities (USA) LLC
Eleven Madison Avenue, 4th Floor
Attention: Margaret Dellafera
New York, New York 10010
Phone Number: 212‑325‑6471
Fax Number: 212‑743‑4810
E‑mail: margaret.dellafera@credit ‑suisse.com

19. Jurisdiction .

(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(b) GUARANTOR HEREBY WAIVES TRIAL BY JURY. GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS IN ANY ACTION OR PROCEEDING. GUARANTOR HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO, EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF

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NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS.

20. Integration . This Guaranty represents the agreement of the Guarantor with respect to the subject matter hereof and there are no promises or representations by the Buyer relative to the subject matter hereof not reflected herein.

21. Acknowledgments . Guarantor hereby acknowledges that:

(a) Guarantor has been advised by counsel in the negotiation, execution and delivery of this Guaranty and the other Program Agreements;

(b) the Buyer does not have any fiduciary relationship to the Guarantor, and the relationship between the Buyer and the Guarantor is solely that of surety and creditor; and

(c) no joint venture exists between the Buyer and the Guarantor or among the Buyer, the Seller Parties and the Guarantor.

22. Intent . This Guaranty is intended to constitute a security agreement or other arrangement or other credit enhancement related to the Repurchase Agreement and Transactions thereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.

[Signature pages follow]

IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly executed and delivered as of the date first above written.

Walter Investment Management Corp., as Guarantor

By: /s/ Cheryl Collins ___________________
Name: Cheryl Collins
Title: SVP & Treasurer

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Exhibit 10.25

February 10, 2015

Mr. David Schneider

205 W Hyde Park PL

#401

Tampa, FL 33606

Dear David:

We are pleased to offer you the position of Executive Vice President at Walter Investment Management Corp. ("Walter" or the “Company”). The purpose of this letter agreement (this "Agreement") is to outline the terms of your employment with the Company. The effective date of this Agreement will be January 1, 2015 (the “Effective Date”).

Subject to the terms and conditions of this Agreement, Walter shall employ you as Executive Vice President with responsibility over Walter's forward servicing operations. In this role, you will report to the Chief Executive Officer of the Company or such other executive as the Company shall, in its discretion, appoint (the “Designated Officer”). You will be responsible for directing all aspects of the Company's forward servicing operations, along with such additional duties as the Designated Officer may from time to time reasonably assign. In addition, you shall comply with the general policies, standards and reputations of the Company and perform such duties with fidelity and to the best of your ability. Such responsibilities may change from time to time; provided that such changed responsibilities shall be consistent in all material respects with your title.


2.	While employed hereunder, you will be eligible to receive the following payments and benefits:


(a)	Base Salary

Your base salary will be $385,000 per year which shall be subject to annual review and potential increase (but not decrease) by the Board of Directors and paid in accordance with the regular payroll practices of the Company, as they may change from time to time. Your base salary, as in effect from time to time, is hereinafter referred to as the "Base Salary."


(b)	Bonus

(i)

You will be eligible to participate in the Company's Management Incentive Plan, as it may be amended from time to time (the “MIP”) and you will be eligible to earn an annual target bonus under the MIP of $600,000, with the potential to increase your bonus to a maximum of $900,000 in accordance with the terms of the MIP; provided, however, that the actual amount of your bonus will be dependent upon the achievement of annual financial and other goals consistent with those established for other members of executive management, as well as the accomplishment of individual objectives, established annually no later than the end of the second quarter of the Company's fiscal year and communicated to you in writing (the actual bonus awarded to you in any given year, which may be greater or less than your target bonus, and may be zero if minimum thresholds are not met, is referred to herein as your “Annual Bonus” for that year (the “Bonus Year”).


(ii)	Unless otherwise expressly provided herein, in order to be eligible to receive an Annual Bonus you must be employed by the Company at the time the bonus is paid. The bonus for any Bonus Year will be payable to you in accordance with the terms of the MIP at the same time as other senior executives of the Company are paid, after the Company closes its books for the Bonus Year.


(c)	Long-Term Incentive

You will be entitled to participate in the Company's long-term incentive plan(s) as in effect from time to time, beginning with the 2015 Company award cycle, and, subject to your continued employment through and including the applicable grant date, will receive a grant under the plan(s) with components and terms that are consistent with awards granted to other members of the Company's executive management. In 2015 such award will be valued at at least $750,000 on the date of the award. The components and terms of any LTI award, and the methodology for determining the economic value for such awards shall be as provided in the plan(s) or otherwise as determined by the Company's Compensation Committee in its discretion and provided to you in a grant document memorializing such terms.


(d)	Benefits

(i)

You will be entitled to receive from the Company prompt reimbursement for all reasonable out-of-pocket business expenses incurred by you in the performance of your duties hereunder, in accordance with the most favorable policies, practices and procedures of the Company relating to reimbursement of business expenses incurred by Company directors, officers or employees in effect at any time during the 12 month period preceding the date you incur the expenses; provided, however, that any such expense reimbursement will be made no later than the last day of the calendar year following the calendar year in which you incur the expense, will not affect the expenses

eligible for reimbursement in any other calendar year, and cannot be liquidated or exchanged for any other benefit.


(ii)	You will be eligible to participate in the Company's group life and health insurance benefit programs that are generally applicable to executives, in accordance with their terms, as they may change from time to time.


(iii)	You will be eligible to participate in the Company's retirement plan that is generally applicable to salaried employees, as it may change from time to time and in accordance with its terms. Your eligibility to participate will be consistent with the requirements of ERISA.


(iv)	You will be entitled to four weeks of annual vacation with carryover to be treated as per the Company's vacation policy, as it may change from time to time.


(v)	Your Benefits under this Agreement, including grants to you under the Company's long-term incentive plan(s), will be subject to periodic review and increase by the Board of Directors.


(e)	Recapitalization

Any equity award agreement will provide that in the event of any change in the capitalization of the Company such as a stock split or a corporate transaction such as a merger, consolidation, separation or otherwise, the number and class of any equity you may have received, shall be equitably adjusted by the Compensation Committee, in its sole discretion, to prevent dilution or enlargement of rights.

It is agreed and understood that your employment with the Company is to be at will, and either you or the Company may terminate the employment relationship at any time for any reason, with or without Cause, and with or without notice to the other; nothing herein or elsewhere constitutes or shall be construed as a commitment to employ you or to pay you severance, other than as stated herein, for any period of time.

While employed by Walter, you agree to devote your full business time and best efforts to the performance of your duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly without the prior written consent of the Chief Executive Officer. Notwithstanding the foregoing, you may manage your personal finances and engage in charitable and civic activities, so long as such activities do not conflict or interfere with the performance of your responsibilities hereunder.


5.	You agree that all inventions, improvements, trade secrets, reports, manuals, computer programs, systems, tapes and other ideas and materials developed or invented by you during the period of your employment with the Company, either solely or in collaboration with others, which relate to the actual or anticipated business or research of the Company, which

result from or are suggested by any work you may do for the Company, or which result from use of the Company's premises or the Company's customers' property (collectively, the “Developments”) shall be the sole and exclusive property of Walter. You hereby assign to the Company your entire right and interest in any such Developments, and will hereafter execute any documents in connection therewith that Walter may reasonably request.


6.	As an inducement to the Company to make this offer to you, you represent and warrant that you are not a party to any agreement or obligation for personal services, and there exists no impediment or restraint, contractual or otherwise on your power, right or ability to accept this offer and to perform the duties and obligations specified herein.


7.	In the event of a termination or cessation of your employment with the Company for any reason, the sole rights and obligations of the Company in connection with your termination shall be those provided under the relevant provision below.

(a)

In the event that your employment is terminated for any reason, you will receive (i) accrued but unpaid Base Salary earned through the date of termination, payable in accordance with the Company's usual payment practices, (ii) any unreimbursed expenses, payable in accordance with Section 2(e)(i), plus (iii) payment for any accrued but unused vacation days, to the extent, and in the amounts provided under the Company's usual policies and arrangements (the “Accrued Obligations”).

(b)

In the event that you suffer a Disability, the Company may terminate your employment on written notice thereof, or in the event of your death, in either case, the Company will pay you (i) amounts payable pursuant to the terms of any applicable disability insurance policy or similar arrangement (if any) that the Company maintains, (ii) the Accrued Obligations, and (iii) any earned but unpaid Annual Bonus for any year preceding the year in which the date of termination occurs and a pro-rated Annual Bonus for the year of termination , in each case, payable in accordance with the terms of the MIP (“Prior Bonus”).

(c)

Separately, and, in addition to the Accrued Obligations and any vesting of equity-based awards as expressly provided for herein, in the event that your employment (y) is terminated by the Company without Cause, or (z) is terminated by you as a result of Constructive Termination (clauses (y) and (z), each, a “Good Leaver Termination”), in each case, the Company will continue to pay (i) your Base Salary as in effect on the termination date for a period of twelve (12) months, payable in accordance with the Company's normal payroll practices, as they may change from time to time, (ii) your Annual Bonus (which shall be in an amount that is consistent with other Company executives of your level) for a period of twelve (12) months, payable at the same time Annual Bonuses would otherwise be payable had you remained employed during such period, (iii) any unpaid Prior Bonus, and (iv) the Company's contribution towards your health, dental and vision benefits for a period of twelve (12) months. By way of example and for the sake of clarity, should your employment terminate pursuant to clause (y) or (z) above on June 30 of any given year, you will be paid the pro-rated Annual Bonus for the year in which your employment terminated, plus, the balance of the Annual Bonus for the remainder of the year in which your employment terminated (i.e., the Annual Bonus for the first six months of your 12 month severance

period) plus six months for the following year (the Annual Bonus for the remaining 6 months of the 12 month severance period).

(d)

Payment of the severance payments and benefits set forth in Sections 7(b) and (c) is subject to (a) your or, in the event of death, your heir's, execution, delivery and non-revocation of a release, including a release of any claims against the Company and its subsidiaries, substantially in the form attached hereto as Appendix I within thirty (30) days following the termination of your employment, (b) your compliance with the provisions of Sections 8 and 9 of this Agreement, and (c) your resignation, effective as of the date of your termination of employment, as an officer and/or director of the Company or any of its subsidiaries or affiliates. In order to be entitled to the foregoing in the event of Constructive Termination, you must provide written notice, including details describing the basis of your claim, to the Company within 60 days of the occurrence of the event(s) giving rise to a claim of Constructive Termination, and the Company will have 30 days to remedy any noncompliance. In the event the Company fails or is unable to remedy any non-compliance, the effective date of your termination of employment shall be 90 days from the date the Company received notice, unless otherwise agreed in writing by you and the Company. Should you fail to provide the foregoing notice, you will thereafter be barred from receiving treatment under the Constructive Termination definition based upon the events giving rise to the claim.

(e)

Any grants of equity that you receive subsequent to the date of this Agreement and the disposition of such awards shall be subject to the terms and conditions of the plan or program under which the awards are granted; provided; however, that, to the extent not inconsistent with such plan or program, any such awards will provide that, in the event of Constructive Termination, all such outstanding unvested awards shall immediately vest.

(f)

For purposes of this Agreement, “Cause” shall mean (A) conviction of, or plea of guilty or nolo contendere to, a felony arising from any act of fraud, embezzlement or willful dishonesty in relation to the business or affairs of the Company, (B) conviction of, or plea of guilty or nolo contendere to, any other felony which is materially injurious to the Company or its reputation or which compromises your ability to perform your job function, and/or act as a representative of the Company, or (C) a willful failure to attempt to substantially perform your duties (other than any such failure resulting from your Disability), after a written demand for substantial performance is delivered to you that specifically identifies the manner in which the Company believes that you have not attempted to substantially perform such duties, and you have failed to remedy the situation, to the extent possible, within fifteen (15) business days of such written notice from the Company or such longer time as may be reasonably required to remedy the situation, but no longer than forty-five (45) calendar days. For purposes of this definition, no act or failure to act on your part shall be considered to be Cause if done, or omitted to be done, by you in good faith and with the reasonable belief that the action or omission was in the best interests of, or were not, in fact, materially detrimental to the Company or a Company subsidiary.


(g)	For purposes of this Agreement, "Constructive Termination" shall mean, without your written consent: (A) a material failure of the Company to comply with the

provisions of this Agreement; (B) a material diminution of your position (including status, offices, title and reporting relationships), duties or responsibilities or pay; (C) any purported termination of your employment other than for Cause; or (D) if you are required to relocate more than 50 miles from the Company's Tampa, Florida location; provided however, that any isolated, insubstantial or inadvertent change, condition, failure or breach described under clauses (A) - (D) above which is not taken in bad faith and is remedied by the Company promptly after the Company's actual receipt of notice from you as provided in this Section 7 shall not constitute Constructive Termination. For purposes of this Agreement, a material diminution in pay shall not be deemed to have occurred if the amount of your bonus fluctuates due to (i) a failure of you or the Company to meet financial targets or performance considerations under the MIP or other Company incentive plan applicable to you and in effect from time to time or (ii) you experience a reduction in salary that is relatively comparable to reductions imposed upon all senior executives of the Company. To be entitled to severance benefits on the basis of Constructive Termination, the event causing Constructive Termination must not be implemented for the purpose of avoiding the restrictions of Section 409A of the Code.

Non-Compete/Non-Solicit. It is understood and agreed that you will have substantial relationships with specific businesses and personnel, prospective and existing, vendors, contractors, customers, and employees of the Company that result in the creation of customer goodwill. It is also understood and agreed that the business of the Company is national in scope and that your duties could be conducted remotely. Therefore, while employed by the Company and continuing for a period of twelve months following the termination of your employment for any reason (the "Restricted Period"), unless the Board of Directors approves an exception, you shall not, directly or indirectly, for yourself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:


(a)	Call upon, solicit, write, direct, divert, influence, accept business (either directly or indirectly) with respect to any account or customer or prospective customer of the Company or any corporation controlling, controlled by, under common control with, or otherwise related to the Company or its affiliates, in each case, for any purpose that is inconsistent with this non-compete provision;


(b)	Accept employment from or become an independent contractor for any Competitor (as defined below) of the Company pursuant to which you would have the same or substantially similar duties, in whole or in part, to the duties that you perform for the Company; or

(c)

Hire away any independent contractors or personnel of Walter and/or entice any such persons to leave the employ of the Company without the prior written consent of the Company; provided, however, that the restriction contained in this clause (c) shall extend through the one year anniversary of the expiration of the Restricted Period. For purposes of this Agreement, "Competitor" shall mean any business or division or unit of any business which provides, in whole or in part, in the United States of America, servicing for and/or the origination of mortgages and/or reverse mortgages. Notwithstanding the foregoing, you shall not be subject to the restrictions set forth in

Subsection 8(b) unless you are terminated under conditions giving rise to a right to payments under Section 7(c) of this Agreement.


9.	Non-Disparagement. Following the termination of your employment under this Agreement for any reason, neither you nor the Company shall, directly or indirectly, for yourself or itself, or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:


(a)	Make any statements or announcements or give anyone authority to make any public statements or announcements concerning the termination of your employment with the Company, other than a mutually agreeable press release, if any, or


(b)	Make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of you or the Company.


(c)	Nothing in this section shall prevent either patty from testifying or responding truthfully to any request for discovery or testimony in any judicial or quasi-judicial proceeding or any government inquiry, investigation or other proceeding.

10.

You acknowledge and agree that you will respect and safeguard the Company's property, trade secrets and confidential information. You acknowledge that the Company's electronic communication systems (such as email and voicemail) are maintained to assist in the conduct of the Company's business and that such systems and data exchanged or stored thereon are Company property. In the event that your employment with the Company terminates for any reason, you agree not to disclose any Company trade secrets or confidential information you acquired while an employee of the Company to any other person or entity, including without limitation, a subsequent employer, or use such information in any manner; provided, however, that any information which enters the public domain other than by breach of this Agreement shall not be considered confidential and provided, further, that nothing in this section shall prevent either party from testifying or responding truthfully to any request for discovery or testimony in any judicial or quasi-judicial proceeding or any government inquiry, investigation or other proceeding.

11.

Clawback. Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any other compensation, paid to you pursuant to this Agreement or any other agreement or arrangement with the Company, which is subject to recovery under any present or future law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).

12.

Indemnification and Insurance. Effective as of the Effective Date, the Company will enter into an Indemnification Agreement in a form provided by the Company which agreement is incorporated herein by reference. In addition, during the term of this Agreement, you will be covered by a Company held directors and officers liability insurance policy, covering acts or omissions, which occur prior to the termination of your employment.

13.

Tax Compliance Delay in Payment. This Agreement is intended to comply with Section 409A of the Code and will be interpreted accordingly. References under this Agreement to the termination of your employment shall be deemed to refer to the date upon which you have experienced a "separation from service" within the meaning of Section 409A of the Code. If the Company reasonably determines that any payment or benefit due under this Agreement, or any other amount that may become due to you after termination of employment, is subject to Section 409A of the Code, and also determines that you are a "specified employee", as defined in Section 409A(a)(2)(B)(i) of the Code, upon your termination of employment for any reason other than death (whether by resignation or otherwise), no amount may be paid to you or on your behalf earlier than six months after the date of your termination of employment (or, if earlier, your death) if such payment would violate the provisions of Section 409A of the Code and the regulations issued thereunder, and payment shall be made, or commence to be made, as the case may be, on the date that is six months and one day after your termination of employment (or, if earlier, one day after your death). For this purpose, you will be considered a "specified employee" if you are employed by an employer, or a subsidiary of a company, that has its stock publicly traded on an established securities market or certain related entities have their stock traded on an established securities market and you are a "key employee'', with the exact meaning of "specified employee", "key employee" and "publicly traded" defined in Section 409A(a)(2)(B)(i) of the Code and the regulations thereunder. Notwithstanding the above, the Company hereby retains discretion to make determinations regarding the identification of "specified employees" and to take any necessary corporate action in connection with such determination. To the extent any reimbursements or in-kind benefits due to you under this Agreement constitute "deferred compensation" under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to you in a manner consistent with Treasury Regulation Section l.409A-3(i)(l)(iv). For purposes of Section 409A of the Code, each payment made under this Agreement shall be designated as a "separate payment" within the meaning of Section 409A of the Code.


14.	You acknowledge and agree that you have read this Agreement carefully, have been advised by the Company to consult with an attorney regarding its contents, and that you fully understand the same.


15.	The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

16.

It is agreed and understood that this Agreement shall constitute our entire agreement with respect to the subject matter hereof and shall supersede all prior agreements, discussions, understandings and proposals (written or oral) relating to your employment with the Company. This Agreement will be interpreted under and in accordance with the laws of the State of Florida without regard to conflicts of laws. The parties hereto agree to resolve any dispute over the terms and conditions or application of this Agreement through binding arbitration pursuant to the rules of the American Arbitration Association ("AAA"). The arbitration will be heard by one arbitrator to be chosen as provided by the rules of the AAA and shall be held in Tampa, Florida. Notwithstanding the foregoing, in the event of a breach or threatened breach of the provisions of Sections 8-10, the party that is in breach or in threatened breach acknowledges and agrees that the other party will suffer irreparable harm that is not subject to being cured with monetary damages and that the aggrieved party shall be entitled to

injunctive relief in a state court of the State of Florida. In any case, in the event you prevail in the dispute, the Company will pay your reasonable fees and costs in connection with the matter (including attorneys' fees). Whether you have prevailed or not shall be determined by the arbitrator or the court, as the case may, or if the arbitrator or court declines to determine whether or not you have prevailed, you will be deemed to have prevailed if in the case of monetary damages you receive in excess of 50% of what you demanded, or if the case has been filed against you, if the Company receives less than 50% of what it has demanded.


17.	Survival. Sections 5, 7 - 13, 16, and 17 shall survive termination of your employment.

[The Remainder of This Page is Intentionally Left Blank]

If the terms contained within this Agreement are acceptable, please sign one of the enclosed copies and return it to me in the envelope provided and retain one copy for your records.

Very truly yours,

Walter Investment Management Corp.

/s/ Mark O’Brien

By: Mark O’Brien

Its: Chairman and Chief Executive Officer

ACCEPTANCE

I have read the foregoing, have been advised to consult with counsel of my choice concerning the same, and I fully understand the same. I approve and accept the terms set forth above as governing my employment relationship with the Company subject to the satisfactory completion of background, reference and credit checks, and a drug test.

Signature /s/ David Schneider Date _ 02/25/15 ________

APPENDIX I

SEPARATION AGREEMENT

AND GENERAL RELEASE OF CLAIMS

This Separation Agreement and General Release of Claims (“Release”) is entered into by and between Walter Investment Management Corp., and its subsidiaries, predecessors , successors, assigns, affiliates, insurers and related entities, (hereinafter collectively referred to as “Employer”) and David Schneider (hereinafter “Employee”). In consideration for the mutual promises set forth below, Employer and Employee agree as follows:

1. Employer and Employee are parties to a contract of employment (“Employment Contract”) to which this Release has been attached and incorporated by reference. Employee's employment with Employer has been terminated and, pursuant to the terms of the Employment Contract, Employee must execute this Release in order to receive the severance set forth in the Employment Contract.

2. In consideration for the promises and covenants set forth in the Employment Contract and this Release, including, specifically but without limitation, the general release set forth in paragraph 3 below, Employee will be paid in accordance with Section 7 of the Employment Contract. Payments to Employee will be made at such times as are set forth in the Employment Contract.

3. Employee agrees, on behalf of himself, and his heirs, executors, administrators, successors in interest and assigns that, except as specifically provided herein, Employee will not file, or cause to be filed, any charges, lawsuits, or other actions of any kind in any forum against Employer and/or its officers, directors, employees, agents, successors and assigns and does hereby further release and discharge Employer and all of its affiliated or related entities, and each of their respective parents, successors, officers, directors, employees, agents, successors and assigns (the “Released Parties”) from any and all claims, causes of action, rights, demands, and obligations of whatever nature kind or character which you may have, known or unknown, against them (including those seeking equitable relief) alleging, without limitation, breach of contract or any tort, legal actions under Title VII of the Civil Rights Act of 1964, as amended, Section 1981 of the Civil Rights Act of 1966, as amended, the Rehabilitation Act of 1973, as amended, the Employee Retirement Income Security Act of 1974, as amended, the Fair Labor Standards Act of 1938, as amended, the Age Discrimination in Employment Act of 1967, as amended, (the “ADEA”) (except to the extent claims under the ADEA arise after the date on which this Release is signed by Employee), the Older Workers' Benefit Protection Act, as amended, the Americans with Disability Act, the Civil Rights Act of 1991, or any state, Federal, or local law or any tort, contract, and quasi-contract or other common law claim or cause of action concerning age, race, religion, national origin, handicap, or any other form of discrimination, or otherwise relating in any way to, Employee's employment with the Company or Employee's separation from the Company or the Company (in its capacities as Employee's former employer or otherwise) or the other Released Parties, including any and all future claims, except claims arising in connection with rights and obligations under this Release or as specifically provided in paragraph 4 or 8 below. Employee further agrees to waive and release any claim for damages occurring at any time after the date of this Release because of any alleged continuing effect of any alleged acts or omissions involving Employee and/or Employer which occurred on or before the date of this Release.

4. Notwithstanding anything contained in this Release to the contrary, the general release set forth in paragraph 3 shall not apply to any claim s under any equity, option or other Employer incentive plan or award, which shall be governed by the terms and conditions of such plan(s) or award. Furthermore, claims relating to the breach of, or to enforce, the severance or any surviving provision of the Employment Contract, the terms of any indemnification agreement, or any other rights to indemnification, expense advancement, or contribution are expressly not released.

5. Employee represents that he has not filed any charges, including, but not limited to, charges against the Company with the Equal Employment Opportunity Commission (“EEOC”), suits, claims or complaints against the Company or a Released Party. This Release forever bars all actions, claims and suits which arose or might arise in the future from any occurrences arising prior to the date of this Release and authorizes any court or administrative agency to dismiss any claim filed by Employee with prejudice. If any administrative agency files any charge, claim or suit on Employee's behalf, Employee agrees to waive all rights to recovery of any equitable or monetary relief and attorneys' fees.

6. Except as required by law, and unless and until this Release is disclosed by the Company or any of its affiliates as may be required by law, the parties to this Release agree that the existence and terms of this Release will remain confidential; provided that Employee may reveal the terms of the Release to Employee's legal, tax and financial advisors, and immediate family so long as Employee advises each such person that they must keep its terms confidential on the same basis as is required of Employee.

7. This Release shall not in any way be construed as an admission by Employer or Employee that they have acted wrongfully with respect to each other or that one party has any rights whatsoever against the other or the other Released Parties.

8. Employee and Employer specifically acknowledge the following:


a.	Employee does not release or waive any right or claim which Employee may have which arises after the date of this Release.


b.	In exchange for this general release, Employee acknowledges that Employee has received separate consideration beyond that which Employee is otherwise entitled to under Employer's policy or applicable law.


c.	Employee is releasing, among other rights, all claims and rights under the Age Discrimination in Employment Act (“ADEA'”) and the Older Workers' Benefit Protection Act (“OWBPA”), 29 U.S.C. §621, et seq.


d.	Employee has twenty-one (21) days to consider this Release.


e.	Employee has seven (7) days to revoke this Release after acceptance. However, this Release will not become effective and no consideration will be paid until after the revocation of the acceptance period has expired. Additionally, for the revocation to be effective, Employee must give written notice of Employee's revocation to Employer's General Counsel, stating “I hereby revoke the Release

and General Release of Claims I executed on [insert date]” and such revocation must be postmarked via certified mail within such seven (7) day period to Walter Investment Management Corp., attention Human Resources, 3000 Bayport Drive, Tampa, FL 33607.


f.	Employee will resign as an officer and/or director of Walter Investment Management Corp. or any of its affiliates or subsidiaries.

9. Should Employee breach any provision of this Release, Employer's obligation to continue to pay the consideration set forth herein shall cease and Employer shall have no further obligation to Employee. All other terms and conditions of this Release, including, but not limited to, the general release in paragraph 3 shall remain in full force and effect. Should Employer breach any provision of this Release, the Employee's obligations hereunder shall cease and Employee shall have no further obligations pursuant to this Release.

10. This Release shall be binding upon Employer, Employee and upon Employee's heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of Employer and the other released parties and their successors and assigns.

11. Employee and Employer acknowledge that this Release and the Employment Contract shall be considered as one document and that, except as set forth herein and therein, including without limitation the provisions of paragraphs 4 and 8 of this Release, any and all prior understandings and agreements between the parties to this Release with respect to the subject matter of this Release and/or the Employment Contract are merged into the Employment Contract and this Release, which fully and completely expresses the entire understanding of the parties with respect to the subject matter hereof and thereof.

12. Employee represents that no inducements, statements, or representations have been made that are not set out in this Release and that Employee does not rely on any inducements, statements, or representations not set forth herein or therein. Employee further represents that he enters into this Release knowingly and voluntarily and on his own free will and choice and that he has been encouraged and given significant opportunity to consult with an attorney of his choice.

13. This Release shall in all respects be interpreted, enforced and governed under the laws of the State of Florida. The language of all parts of this Release shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties to this Release. Should any provision of this Release be declared or be determined by any Court to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of this Release.

14. This Release may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.



DAVID SCHNEIDER By: Name Printed: Date:	WALTER INVESTMENT MANAGEMENT CORP. By: Title: Date:

Exhibit 21

SUBSIDIARIES OF REGISTRANT

As of February 24, 2016



Subsidiary		State of Incorporation
Mid-State Capital, LLC		Delaware
Hanover SPC-A, Inc.		Delaware
Green Tree Credit Solutions LLC		Delaware
Green Tree Investment Holdings III LLC		Delaware
Green Tree Investment Management LLC		Delaware
Green Tree Insurance Agency, Inc.		Minnesota
Green Tree Insurance Agency of Nevada, Inc.		Nevada
Green Tree Insurance Agency Reinsurance Limited		Turks and Caicos Islands
Landmark Asset Receivables Management LLC		Delaware
Walter Management Holding Company LLC		Delaware
Green Tree Servicing Corp.		Delaware
Ditech Financial LLC		Delaware
Green Tree Advance Receivables II LLC		Delaware
Green Tree Advance Receivables III LLC		Delaware
Green Tree Agency Advance Funding Trust I		Delaware
Green Tree Credit LLC		New York
WIMC Real Estate Investment LLC		Delaware
Walter Reverse Acquisition LLC		Delaware
Reverse Mortgage Solutions, Inc.		Delaware
REO Management Solutions, LLC		Delaware
Mortgage Asset Systems, LLC		Delaware
2013 WCO Holdings Corp.		Maryland
RMS REO BRC, LLC		Delaware
RMS REO CS, LLC		Delaware
RMS CS Repo Trust 2016		New York

EXHIBIT 23

Consent of Independent Registered Certified Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:


(1)	Registration Statement (Form S-8 No. 333-160743) pertaining to the Walter Investment Management Corp. 1999 Equity Incentive Plan (As Amended) and the Walter Investment Management Corp. 2009 Long-Term Incentive Award Plan,


(2)	Registration Statement (Form S-8 No. 333-192033) pertaining to the Walter Investment Management Corp. 2011 Omnibus Incentive Plan, and


(3)	Registration Statement (Form S-3 No. 333-201054) of Walter Investment Management Corp., including the related Prospectus,

of our reports dated February 29, 2016 , with respect to the consolidated financial statements and schedule of Walter Investment Management Corp. and subsidiaries, and the effectiveness of internal control over financial reporting of Walter Investment Management Corp. and subsidiaries, included in this Annual Report (Form 10-K) of Walter Investment Management Corp. for the year ended December 31, 2015 .

/s/ Ernst & Young LLP

Tampa, Florida

February 29, 2016

EXHIBIT 31.1

CERTIFICATION BY DENMAR J. DIXON

PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(a),

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Denmar J. Dixon, certify that:

1. I have reviewed this Annual Report on Form 10-K of Walter Investment Management Corp. (the “Registrant”) for the period ended December 31, 2015 (the “Report”);

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

d) disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/s/ Denmar J. Dixon

Denmar J. Dixon

Vice Chairman, President and Chief Executive Officer

Date: February 29, 2016

EXHIBIT 31.2

CERTIFICATION BY GARY L. TILLETT

PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(a),

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gary L. Tillett, certify that:

1. I have reviewed this Annual Report on Form 10-K of Walter Investment Management Corp. (the “Registrant”) for the period ended December 31, 2015 (the “Report”);

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/s/ Gary L. Tillett

Gary L. Tillett

Executive Vice President and Chief Financial Officer

Date: February 29, 2016

EXHIBIT 32

WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

Denmar J. Dixon, Vice Chairman, President and Chief Executive Officer, and Gary L. Tillett, Executive Vice President and Chief Financial Officer, of Walter Investment Management Corp. (the “Company”), each certify to such officer’s knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 that:

1. The Annual Report on Form 10-K of the Company for the period ended December 31, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.




Date: February 29, 2016	By:	/s/ Denmar J. Dixon
		Denmar J. Dixon
		Vice Chairman, President and Chief Executive Officer

Date: February 29, 2016	By:	/s/ Gary L. Tillett
		Gary L. Tillett
		Executive Vice President and Chief Financial Officer