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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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45-2156869
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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350 Highland Drive
Lewisville, TX
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75067
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(Address of principal executive offices)
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(Zip Code)
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Large Accelerated Filer
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x
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Accelerated Filer
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¨
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Non-Accelerated Filer
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¨
(Do not check if a smaller reporting company.)
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Smaller reporting company
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¨
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Page
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PART I
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FINANCIAL INFORMATION
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Item 1.
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Item 2.
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Item 3.
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Quantitative and Qualitative Disclosure About Market Risks
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Item 4.
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PART II
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OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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•
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change in delinquencies for the loans we service or originate, increases in interest rates, our ability to refinance existing loans, and increases in defaults;
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•
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our ability to compete successfully in the mortgage loan servicing and mortgage loan originations industries;
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•
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our ability to maintain or grow the size of our servicing portfolio and realize our significant investments in personnel and our technology platform by successfully identifying attractive acquisition opportunities, including MSRs, subservicing contracts, servicing platforms and originations platforms;
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•
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errors in our financial models or changes in assumptions and requirements to write down the value of certain assets;
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•
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our substantial indebtedness;
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•
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our potential need to incur more debt;
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•
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our ability to scale-up appropriately and integrate our acquisitions to realize the anticipated benefits of any such acquisitions, including potentially significant acquisitions;
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•
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our ability to meet certain criteria or characteristics under the indentures governing our securitized pools of loans;
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•
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changes to HARP, HAMP, Making Home Affordable Plan or other similar government programs;
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•
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the deterioration of the market for reverse mortgages and increase in foreclosure rates for reverse mortgages;
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•
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our ability to follow the specific guidelines of GSEs or a significant change in such guidelines;
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•
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changes in our business relationships with the Fannie Mae, Freddie Mac, Ginnie Mae and others that facilitate the issuance of MBS;
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•
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changes to the nature of the guarantees of Fannie Mae and Freddie Mac and the market implications of such changes;
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•
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our ability to maintain our technology systems and our ability to adapt such systems for future operating environments;
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•
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failure of our internal security measures or breach of our privacy protections and our ability to mitigate the impact of technology failures;
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•
|
the impact of operating in a highly regulated industry, the ongoing implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), including rules issued by the Consumer Financial Protection Bureau (CFPB), on our business activities and practices, costs of operations and overall results of operations;
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•
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the impact on our servicing practices as a result of a consent judgment against one of the largest non-bank servicers by certain federal and state agencies;
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•
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changes in federal, state and local laws that are adverse to mortgage servicers which increase costs and operational complexity and impose significant penalties for violation;
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•
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changes to federal, state and local laws and regulations concerning loan servicing, loan origination, loan modification or the licensing of entities that engage in these activities;
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•
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delays in foreclosure proceedings due to lack of judicial resources and new legislation to establish certain lending and borrowing practices;
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•
|
volatility in our common stock price;
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March 31,
2014 |
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December 31,
2013 |
||||
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(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
404,073
|
|
|
$
|
441,902
|
|
Restricted cash
|
471,635
|
|
|
592,747
|
|
||
Accounts receivable
|
4,057,477
|
|
|
5,636,482
|
|
||
Mortgage loans held for sale, $1,741,126 and $2,585,340 at fair value, respectively
|
1,741,126
|
|
|
2,603,380
|
|
||
Mortgage loans held for investment, principally subject to nonrecourse debt - Legacy Assets, net of allowance for loan losses of $3,549 and $2,144 respectively
|
204,392
|
|
|
211,050
|
|
||
Reverse mortgage interests
|
1,620,879
|
|
|
1,434,506
|
|
||
Mortgage servicing rights, $2,576,550 and $2,488,283 at fair value, respectively
|
2,590,780
|
|
|
2,503,162
|
|
||
Property and equipment, net of accumulated depreciation of $83,011 and $74,723 respectively
|
119,306
|
|
|
119,185
|
|
||
Derivative financial instruments
|
95,774
|
|
|
123,878
|
|
||
Other assets
|
327,121
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|
|
360,397
|
|
||
Total assets
|
$
|
11,632,563
|
|
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$
|
14,026,689
|
|
Liabilities and stockholders' equity
|
|
|
|
||||
Notes payable
|
$
|
4,591,998
|
|
|
$
|
6,984,351
|
|
Unsecured senior notes
|
2,444,020
|
|
|
2,444,062
|
|
||
Payables and accrued liabilities
|
1,189,430
|
|
|
1,308,450
|
|
||
Derivative financial instruments
|
6,377
|
|
|
8,526
|
|
||
Mortgage servicing liabilities
|
82,210
|
|
|
82,521
|
|
||
Other nonrecourse debt
|
2,306,701
|
|
|
2,208,881
|
|
||
Total liabilities
|
10,620,736
|
|
|
13,036,791
|
|
||
Commitments and contingencies – See Note 18
|
—
|
|
|
—
|
|
||
Preferred stock at $0.01 par value - 300,000 shares authorized, no shares issued and outstanding
|
—
|
|
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—
|
|
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Common stock at $0.01 par value - 1,000,000 shares authorized, 90,787 shares and 90,330 shares issued at March 31, 2014 and December 31, 2013, respectively
|
906
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906
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|
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Additional paid-in-capital
|
571,640
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|
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566,642
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|
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Retained earnings
|
446,377
|
|
|
422,341
|
|
||
Treasury shares; 317 shares and 168 shares at cost, respectively
|
(11,727
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)
|
|
(6,944
|
)
|
||
Accumulated other comprehensive income
|
—
|
|
|
1,963
|
|
||
Total Nationstar Inc. stockholders' equity
|
1,007,196
|
|
|
984,908
|
|
||
Noncontrolling interest
|
4,631
|
|
|
4,990
|
|
||
Total equity
|
1,011,827
|
|
|
989,898
|
|
||
Total liabilities and equity
|
$
|
11,632,563
|
|
|
$
|
14,026,689
|
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenues:
|
|
|
|
||||
Servicing fee income
|
$
|
240,164
|
|
|
$
|
197,596
|
|
Other fee income
|
101,547
|
|
|
44,879
|
|
||
Total fee income
|
341,711
|
|
|
242,475
|
|
||
Gain on mortgage loans held for sale
|
127,936
|
|
|
188,587
|
|
||
Total revenues
|
469,647
|
|
|
431,062
|
|
||
Expenses and impairments:
|
|
|
|
||||
Salaries, wages and benefits
|
156,595
|
|
|
134,987
|
|
||
General and administrative
|
156,200
|
|
|
125,642
|
|
||
Loss on foreclosed real estate and other
|
600
|
|
|
2,007
|
|
||
Occupancy
|
7,738
|
|
|
5,935
|
|
||
Total expenses and impairments
|
321,133
|
|
|
268,571
|
|
||
Other income (expense):
|
|
|
|
||||
Interest income
|
43,943
|
|
|
29,608
|
|
||
Interest expense
|
(156,600
|
)
|
|
(92,374
|
)
|
||
Gain on interest rate swaps and caps
|
2,821
|
|
|
1,268
|
|
||
Total other income (expense)
|
(109,836
|
)
|
|
(61,498
|
)
|
||
Income before taxes
|
38,678
|
|
|
100,993
|
|
||
Income tax expense
|
15,001
|
|
|
38,377
|
|
||
Net income
|
23,677
|
|
|
62,616
|
|
||
Less: Net loss attributable to noncontrolling interests
|
(359
|
)
|
|
—
|
|
||
Net income attributable to Nationstar Inc.
|
24,036
|
|
|
62,616
|
|
||
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Change in value of designated cash flow hedge
|
(1,963
|
)
|
|
—
|
|
||
Comprehensive income
|
$
|
22,073
|
|
|
$
|
62,616
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
||||
Basic earnings per share
|
$
|
0.27
|
|
|
$
|
0.70
|
|
Diluted earnings per share
|
$
|
0.27
|
|
|
$
|
0.70
|
|
Weighted average shares:
|
|
|
|
||||
Basic
|
89,342
|
|
|
89,293
|
|
||
Dilutive effect of stock awards
|
733
|
|
|
649
|
|
||
Diluted
|
90,075
|
|
|
89,942
|
|
||
Dividends declared per share
|
$
|
—
|
|
|
$
|
—
|
|
|
Common Shares
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Treasury shares
|
|
Common shares held by subsidiary
|
|
Accumulated
Other Comprehensive Income |
|
Total Nationstar Inc. Equity
|
|
Non-controlling interests
|
|
Total Stockholders’ Equity
|
|||||||||||||||||||
Balance at December 31, 2012
|
90,460
|
|
|
$
|
905
|
|
|
$
|
556,056
|
|
|
$
|
205,287
|
|
|
$
|
—
|
|
|
$
|
(4,566
|
)
|
|
$
|
—
|
|
|
$
|
757,682
|
|
|
$
|
—
|
|
|
$
|
757,682
|
|
Shares issued under incentive plan
|
82
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Change in the value of cash flow hedge, net of tax of $1,183
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,963
|
|
|
1,963
|
|
|
—
|
|
|
1,963
|
|
|||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
10,574
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,574
|
|
|
—
|
|
|
10,574
|
|
|||||||||
Excess tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
4,579
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,579
|
|
|
—
|
|
|
4,579
|
|
|||||||||
Withholding tax related to share based settlement of common stock by management
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,944
|
)
|
|
—
|
|
|
—
|
|
|
(6,944
|
)
|
|
—
|
|
|
(6,944
|
)
|
|||||||||
Shares cancelled
|
(212
|
)
|
|
(2
|
)
|
|
(4,564
|
)
|
|
—
|
|
|
—
|
|
|
4,566
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Contributions from joint venture members to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,990
|
|
|
4,990
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
217,054
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
217,054
|
|
|
—
|
|
|
217,054
|
|
|||||||||
Balance at December 31, 2013
|
90,330
|
|
|
906
|
|
|
566,642
|
|
|
422,341
|
|
|
(6,944
|
)
|
|
—
|
|
|
1,963
|
|
|
984,908
|
|
|
4,990
|
|
|
989,898
|
|
|||||||||
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Shares issued under incentive plan
|
457
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Change in the value of cash flow hedge, net of tax of $1,183
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,963
|
)
|
|
(1,963
|
)
|
|
—
|
|
|
(1,963
|
)
|
|||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
2,809
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,809
|
|
|
—
|
|
|
2,809
|
|
|||||||||
Excess tax benefit from share-based compensation
|
—
|
|
|
—
|
|
|
2,189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,189
|
|
|
—
|
|
|
2,189
|
|
|||||||||
Withholding tax related to share based settlement of common stock by management
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
(4,783
|
)
|
|
—
|
|
|
—
|
|
|
(4,783
|
)
|
|
—
|
|
|
(4,783
|
)
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
24,036
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,036
|
|
|
(359
|
)
|
|
23,677
|
|
|||||||||
Balance at March 31, 2014
|
90,787
|
|
|
$
|
906
|
|
|
$
|
571,640
|
|
|
$
|
446,377
|
|
|
$
|
(11,727
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,007,196
|
|
|
$
|
4,631
|
|
|
$
|
1,011,827
|
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Operating activities
|
|
|
|
||||
Net income
|
$
|
24,036
|
|
|
$
|
62,616
|
|
Adjustments to reconcile net income to net cash (used in) / provided by operating activities:
|
|
|
|
||||
Share-based compensation
|
2,809
|
|
|
2,858
|
|
||
Loss on foreclosed real estate and other
|
600
|
|
|
2,007
|
|
||
(Gain) / loss on derivatives including ineffectiveness on interest rate swaps and caps
|
(2,821
|
)
|
|
(1,268
|
)
|
||
Fair value changes in excess spread financing
|
(3,369
|
)
|
|
23,891
|
|
||
Depreciation and amortization
|
8,792
|
|
|
3,901
|
|
||
Fair value changes and amortization/accretion of mortgage servicing rights
|
78,687
|
|
|
9,384
|
|
||
Fair value change in mortgage servicing rights financing liability
|
(10,788
|
)
|
|
—
|
|
||
Amortization (accretion) of premiums/discounts
|
9,959
|
|
|
9,509
|
|
||
Gain on mortgage loans held for sale
|
(127,936
|
)
|
|
(188,587
|
)
|
||
Mortgage loans originated and purchased, net of fees
|
(5,402,862
|
)
|
|
(3,781,116
|
)
|
||
Proceeds on sale of and payments of mortgage loans held for sale
|
6,361,308
|
|
|
3,694,859
|
|
||
Net tax effect of stock grants
|
(2,189
|
)
|
|
(2,660
|
)
|
||
Cash settlement on derivative financial instruments
|
—
|
|
|
(129
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable, including servicing advances, net
|
(12,107
|
)
|
|
81,094
|
|
||
Reverse mortgage funded advances
|
(197,529
|
)
|
|
(178,181
|
)
|
||
Other assets
|
12,814
|
|
|
6,486
|
|
||
Payables and accrued liabilities
|
(122,141
|
)
|
|
(104,947
|
)
|
||
Net cash provided by (used in) operating activities
|
617,263
|
|
|
(360,283
|
)
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Investing activities
|
|
|
|
||||
Property and equipment additions, net of disposals
|
(8,913
|
)
|
|
(5,867
|
)
|
||
Purchases of reverse mortgage servicing rights and interests
|
—
|
|
|
(50,198
|
)
|
||
Deposits on/purchase of forward mortgage servicing rights, net of liabilities incurred
|
(93,092
|
)
|
|
(266,625
|
)
|
||
Loan repurchases from Ginnie Mae
|
—
|
|
|
(8,815
|
)
|
||
Proceeds from sales of REO
|
23,498
|
|
|
4,157
|
|
||
Proceeds on sale of servicer advances
|
182,871
|
|
|
—
|
|
||
Acquisition of Greenlight Financial Services and other businesses, net
|
—
|
|
|
(12,500
|
)
|
||
Net cash provided by (used in) investing activities
|
104,364
|
|
|
(339,848
|
)
|
||
Financing activities
|
|
|
|
||||
Issuance of unsecured senior notes, net
|
—
|
|
|
599,269
|
|
||
Transfers (to) / from restricted cash, net
|
104,225
|
|
|
32,723
|
|
||
Issuance of participating interest financing in reverse mortgage interests
|
103,324
|
|
|
166,646
|
|
||
Issuance of excess spread financing
|
37,859
|
|
|
192,730
|
|
||
Decrease in notes payable
|
(975,156
|
)
|
|
(191,700
|
)
|
||
Proceeds from mortgage servicing rights financing
|
20,651
|
|
|
—
|
|
||
Repayment of nonrecourse debt – Legacy assets
|
(2,998
|
)
|
|
(2,612
|
)
|
||
Repayment of excess spread financing
|
(42,717
|
)
|
|
(20,881
|
)
|
||
Debt financing costs
|
(2,050
|
)
|
|
(9,750
|
)
|
||
Net tax benefit for stock grants issued
|
2,189
|
|
|
2,660
|
|
||
Contributions from joint venture member to noncontrolling interests
|
—
|
|
|
4,990
|
|
||
Redemption of shares for stock vesting
|
(4,783
|
)
|
|
(6,554
|
)
|
||
Net cash provided by (used in) financing activities
|
(759,456
|
)
|
|
767,521
|
|
||
Net increase in cash and cash equivalents
|
(37,829
|
)
|
|
67,390
|
|
||
Cash and cash equivalents at beginning of period
|
441,902
|
|
|
152,649
|
|
||
Cash and cash equivalents at end of period
|
$
|
404,073
|
|
|
$
|
220,039
|
|
Supplemental disclosures of non-cash activities
|
|
|
|
||||
Transfer of mortgage loans held for investment to REO at fair value
|
$
|
1,336
|
|
|
$
|
1,454
|
|
Transfer of reverse mortgage interest to REO at fair value
|
11,156
|
|
|
—
|
|
||
Mortgage servicing rights resulting from sale or securitization of mortgage loans
|
58,304
|
|
|
31,268
|
|
||
Tax related share-based settlement of common stock
|
4,783
|
|
|
6,554
|
|
||
Liabilities incurred from purchase of forward mortgage servicing rights
|
6,494
|
|
|
365,567
|
|
|
|
May 31, 2013
|
||
Intangible assets
|
|
$
|
18,530
|
|
Derivative financial instruments
|
|
18,101
|
|
|
Equipment
|
|
3,561
|
|
|
Prepaid expenses and other assets
|
|
700
|
|
|
Payables and accrued liabilities
|
|
(589
|
)
|
|
Net assets acquired
|
|
40,303
|
|
|
Estimated purchase price
|
|
75,700
|
|
|
Goodwill
|
|
$
|
35,397
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
|
Transfers
Accounted for as
Secured
Borrowings
|
|
Reverse Secured Borrowings
|
|
Transfers
Accounted for as Secured Borrowings |
|
Reverse Secured Borrowings
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Restricted cash
|
$
|
192,934
|
|
|
$
|
—
|
|
|
$
|
272,188
|
|
|
$
|
—
|
|
Reverse mortgage interests
|
—
|
|
|
1,135,654
|
|
|
—
|
|
|
1,039,645
|
|
||||
Accounts receivable
|
2,295,144
|
|
|
—
|
|
|
4,031,444
|
|
|
—
|
|
||||
Mortgage loans held for investment, principally subject to nonrecourse debt
|
202,614
|
|
|
—
|
|
|
208,263
|
|
|
—
|
|
||||
Derivative financial instruments
|
3,100
|
|
|
—
|
|
|
3,691
|
|
|
—
|
|
||||
Other assets
|
2,651
|
|
|
—
|
|
|
2,375
|
|
|
—
|
|
||||
Total Assets
|
$
|
2,696,443
|
|
|
$
|
1,135,654
|
|
|
$
|
4,517,961
|
|
|
$
|
1,039,645
|
|
LIABILITIES
|
|
|
|
|
|
|
|
||||||||
Notes payable
|
$
|
2,773
|
|
|
$
|
—
|
|
|
$
|
3,672,726
|
|
|
$
|
—
|
|
Payables and accrued liabilities
|
2,089,168
|
|
|
—
|
|
|
4,242
|
|
|
—
|
|
||||
Nonrecourse debt–Legacy Assets
|
86,529
|
|
|
—
|
|
|
89,108
|
|
|
—
|
|
||||
Participating interest financing
|
—
|
|
|
1,202,252
|
|
|
—
|
|
|
1,080,718
|
|
||||
Total Liabilities
|
$
|
2,178,470
|
|
|
$
|
1,202,252
|
|
|
$
|
3,766,076
|
|
|
$
|
1,080,718
|
|
|
March 31, 2014
|
December 31, 2013
|
|||||
Total collateral balances
|
$
|
3,708,047
|
|
|
$
|
3,831,473
|
|
Total certificate balances
|
3,719,476
|
|
|
3,843,694
|
|
||
Total mortgage servicing rights at fair value
|
26,945
|
|
|
30,074
|
|
Principal Amount of Loans 60 Days or More Past Due
|
March 31, 2014
|
|
March 31, 2013
|
||||
Unconsolidated securitization trusts
|
$
|
1,033,703
|
|
|
$
|
1,179,325
|
|
|
|
|
|
||||
|
For the three months ended March 31,
|
||||||
Credit Losses
|
2014
|
|
2013
|
||||
Unconsolidated securitization trusts
|
$
|
66,542
|
|
|
$
|
64,858
|
|
|
For the three months ended
|
||||||||||||
|
March 31, 2014
|
March 31, 2013
|
|||||||||||
|
Servicing Fees Received
|
Loan
Repurchases |
|
Servicing Fees Received
|
Loan
Repurchases |
||||||||
Unconsolidated securitization trusts
|
$
|
7,778
|
|
$
|
—
|
|
|
$
|
6,791
|
|
$
|
—
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Servicer advances, net of purchase discount $44,514 and $62,217, respectively
|
$
|
3,748,599
|
|
|
$
|
5,217,769
|
|
Reverse mortgage servicer advances
|
141,628
|
|
|
93,494
|
|
||
Receivables from trusts and agencies
|
79,395
|
|
|
105,917
|
|
||
Accrued revenues
|
46,078
|
|
|
57,082
|
|
||
Accrued interest
|
1,911
|
|
|
6,970
|
|
||
Other
|
39,866
|
|
|
155,250
|
|
||
Total accounts receivable
|
$
|
4,057,477
|
|
|
$
|
5,636,482
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Mortgage loans held for sale – unpaid principal balance
|
$
|
1,668,997
|
|
|
$
|
2,532,881
|
|
Mark-to-market adjustment
|
72,129
|
|
|
70,499
|
|
||
Total mortgage loans held for sale
|
$
|
1,741,126
|
|
|
$
|
2,603,380
|
|
|
For the three months ended
|
||||||
|
March 31, 2014
|
|
March 31, 2013
|
||||
Mortgage loans held for sale – beginning balance
|
$
|
2,603,380
|
|
|
$
|
1,480,537
|
|
Mortgage loans originated and purchased, net of fees
|
5,402,862
|
|
|
3,781,116
|
|
||
Proceeds on sale of and payments of mortgage loans held for sale
|
(6,261,204
|
)
|
|
(3,549,535
|
)
|
||
Transfer of mortgage loans held for sale to held for investment or other assets
|
(3,912
|
)
|
|
(8,409
|
)
|
||
Mortgage loans held for sale – ending balance
|
$
|
1,741,126
|
|
|
$
|
1,703,709
|
|
|
|
|
||||||
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Mortgage loans held for investment, principally subject to nonrecourse debt - Legacy Assets, net – unpaid principal balance
|
|
$
|
297,628
|
|
|
$
|
305,085
|
|
Transfer discount
|
|
|
|
|
||||
Accretable
|
|
(16,979
|
)
|
|
(17,362
|
)
|
||
Non-accretable
|
|
(72,708
|
)
|
|
(74,529
|
)
|
||
Allowance for loan losses
|
|
(3,549
|
)
|
|
(2,144
|
)
|
||
Total mortgage loans held for investment, principally subject to nonrecourse debt - Legacy Assets, net
|
|
$
|
204,392
|
|
|
$
|
211,050
|
|
|
Three months ended March 31, 2014
|
|
Year ended December 31, 2013
|
||||
Accretable Yield
|
|
|
|
||||
Balance at the beginning of the period
|
$
|
17,362
|
|
|
$
|
19,749
|
|
Additions
|
—
|
|
|
—
|
|
||
Accretion
|
(784
|
)
|
|
(3,235
|
)
|
||
Reclassifications from (to) nonaccretable discount
|
401
|
|
|
848
|
|
||
Disposals
|
—
|
|
|
—
|
|
||
Balance at the end of the period
|
$
|
16,979
|
|
|
$
|
17,362
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
|
(in thousands)
|
||||||
Credit Quality by Delinquency Status
|
|
|
|
||||
Performing
|
$
|
210,090
|
|
|
$
|
218,262
|
|
Non-Performing
|
87,538
|
|
|
86,823
|
|
||
Total
|
$
|
297,628
|
|
|
$
|
305,085
|
|
Credit Quality by Loan-to-Value Ratio
|
|
|
|
||||
Less than 60
|
$
|
31,084
|
|
|
$
|
32,885
|
|
Less than 70 and more than 60
|
16,125
|
|
|
14,633
|
|
||
Less than 80 and more than 70
|
21,021
|
|
|
23,075
|
|
||
Less than 90 and more than 80
|
26,179
|
|
|
25,536
|
|
||
Less than 100 and more than 90
|
26,881
|
|
|
25,686
|
|
||
Greater than 100
|
176,338
|
|
|
183,270
|
|
||
Total
|
$
|
297,628
|
|
|
$
|
305,085
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
UPB of advances previously securitized by Nationstar
|
$
|
1,135,654
|
|
|
$
|
1,039,645
|
|
UPB of advances not securitized
|
486,195
|
|
|
395,663
|
|
||
Allowance for losses - reverse mortgage interests
|
(970
|
)
|
|
(802
|
)
|
||
Total reverse mortgage interests
|
$
|
1,620,879
|
|
|
$
|
1,434,506
|
|
Credit Sensitive MSRs
|
March, 31, 2014
|
|
December 31, 2013
|
||
Discount rate
|
13.69
|
%
|
|
14.17
|
%
|
Total prepayment speeds
|
20.65
|
%
|
|
20.34
|
%
|
Expected weighted-average life
|
4.64 years
|
|
|
4.63 years
|
|
Credit losses
|
20.22
|
%
|
|
22.87
|
%
|
Interest Rate Sensitive MSRs
|
March 31, 2014
|
|
December 31, 2013
|
||
Discount rate
|
9.54
|
%
|
|
10.50
|
%
|
Total prepayment speeds
|
10.52
|
%
|
|
8.97
|
%
|
Expected weighted-average life
|
7.06 years
|
|
|
7.88 years
|
|
Credit losses
|
8.05
|
%
|
|
9.12
|
%
|
|
Three months ended March 31, 2014
|
|
Year ended December 31, 2013
|
||||
Fair value at the beginning of the period
|
$
|
2,488,283
|
|
|
$
|
635,860
|
|
Additions:
|
|
|
|
||||
Servicing resulting from transfers of financial assets
|
58,304
|
|
|
248,381
|
|
||
Purchases of servicing assets
|
108,312
|
|
|
1,545,584
|
|
||
Changes in fair value:
|
|
|
|
|
|||
Due to changes in valuation inputs or assumptions used in the valuation model
|
(20,645
|
)
|
|
355,586
|
|
||
Other changes in fair value
|
(57,704
|
)
|
|
(297,128
|
)
|
||
Fair value at the end of the period
|
$
|
2,576,550
|
|
|
$
|
2,488,283
|
|
UPB of forward loans serviced for others
|
|
|
|
||||
Credit sensitive loans
|
$
|
264,176,084
|
|
|
$
|
266,757,777
|
|
Interest sensitive loans
|
62,236,994
|
|
|
56,056,362
|
|
||
Total owned loans
|
$
|
326,413,078
|
|
|
$
|
322,814,139
|
|
|
Discount Rate
|
|
Total Prepayment
Speeds
|
|
Credit Losses
|
|||||||||||||||
|
100 bps
Adverse
Change
|
200 bps
Adverse
Change
|
|
10%
Adverse
Change
|
20%
Adverse
Change
|
|
10%
Adverse
Change
|
20%
Adverse
Change
|
||||||||||||
March 31, 2014
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage servicing rights
|
$
|
(75,996
|
)
|
$
|
(156,336
|
)
|
|
$
|
(113,473
|
)
|
$
|
(217,542
|
)
|
|
$
|
(56,354
|
)
|
$
|
(111,291
|
)
|
December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage servicing rights
|
$
|
(74,681
|
)
|
$
|
(151,899
|
)
|
|
$
|
(101,590
|
)
|
$
|
(195,445
|
)
|
|
$
|
(89,958
|
)
|
$
|
(178,669
|
)
|
|
Three months ended
|
Year ended
|
||||||||||||
|
March 31, 2014
|
December 31, 2013
|
||||||||||||
|
Assets
|
|
Liabilities
|
Assets
|
|
Liabilities
|
||||||||
Activity of MSRs at amortized cost
|
|
|
|
|
|
|
||||||||
Balance at the beginning of the period
|
$
|
14,879
|
|
|
$
|
82,521
|
|
$
|
10,973
|
|
|
$
|
83,238
|
|
Additions:
|
|
|
|
|
|
|
||||||||
Purchase /Assumptions of servicing rights/obligations
|
—
|
|
|
—
|
|
3,980
|
|
|
—
|
|
||||
Deductions:
|
|
|
|
|
|
|
||||||||
Amortization/Accretion
|
(649
|
)
|
|
(311
|
)
|
(74
|
)
|
|
(717
|
)
|
||||
Balance at end of the period
|
$
|
14,230
|
|
|
$
|
82,210
|
|
$
|
14,879
|
|
|
$
|
82,521
|
|
Fair value at end of period
|
$
|
38,430
|
|
|
$
|
68,965
|
|
$
|
29,192
|
|
|
$
|
63,996
|
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Servicing fees
|
$
|
253,685
|
|
|
$
|
182,709
|
|
Ancillary fees
|
55,416
|
|
|
36,870
|
|
||
Total servicing and ancillary fees
|
$
|
309,101
|
|
|
$
|
219,579
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Loans subject to repurchase right from Ginnie Mae
|
$
|
134,134
|
|
|
$
|
120,736
|
|
Deferred financing costs
|
66,035
|
|
|
73,030
|
|
||
Goodwill
|
38,820
|
|
|
38,820
|
|
||
Real estate owned (REO), net
|
37,734
|
|
|
45,632
|
|
||
Intangible assets
|
21,180
|
|
|
21,737
|
|
||
Prepaid expenses
|
16,196
|
|
|
21,993
|
|
||
Receivables from affiliates
|
5,306
|
|
|
8,861
|
|
||
Collateral deposits on derivative instruments
|
5,049
|
|
|
25,932
|
|
||
Other
|
2,667
|
|
|
3,656
|
|
||
Total other assets
|
$
|
327,121
|
|
|
$
|
360,397
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Payable to servicing and subservicing investors
(1)
|
359,395
|
|
|
359,214
|
|
||
Payable to insurance carriers and insurance cancellation reserves
|
166,040
|
|
|
164,244
|
|
||
Loans subject to repurchase from Ginnie Mae
|
134,134
|
|
|
120,736
|
|
||
Accrued interest
|
82,840
|
|
|
76,303
|
|
||
MSR purchases payable including advances
|
53,102
|
|
|
135,759
|
|
||
Current income taxes
|
47,391
|
|
|
35,961
|
|
||
Repurchase reserves
|
44,478
|
|
|
40,695
|
|
||
Accrued bonus and payroll
|
34,102
|
|
|
66,755
|
|
||
Other
(2)
|
267,948
|
|
|
308,783
|
|
||
Total payables and accrued liabilities
|
$
|
1,189,430
|
|
|
$
|
1,308,450
|
|
(1)
|
In January and June 2013, Nationstar terminated these interest rate swaps.
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
|
Outstanding
|
|
Collateral
Pledged
|
|
Outstanding
|
|
Collateral
Pledged
|
||||||||
Servicing Segment Notes Payable
|
|
|
|
|
|
|
|
||||||||
MBS advance financing facility
|
$
|
524,742
|
|
|
$
|
606,833
|
|
|
$
|
560,814
|
|
|
$
|
651,953
|
|
Securities repurchase facility (2011)
|
34,196
|
|
|
55,603
|
|
|
35,546
|
|
|
55,603
|
|
||||
Nationstar agency advance financing facility
|
775,477
|
|
|
837,790
|
|
|
851,957
|
|
|
918,574
|
|
||||
Reverse participations financing facility
|
58,245
|
|
|
75,784
|
|
|
102,031
|
|
|
124,536
|
|
||||
MBS advance financing facility (2012)
|
50,000
|
|
|
136,378
|
|
|
179,306
|
|
|
220,833
|
|
||||
Nationstar Mortgage Advance Receivable Trust
|
685,109
|
|
|
747,067
|
|
|
1,240,940
|
|
|
1,347,410
|
|
||||
Nationstar Servicer Advance Receivables Trust 2013-BA
|
628,582
|
|
|
709,165
|
|
|
1,579,830
|
|
|
1,764,296
|
|
||||
Originations Segment Notes Payable
|
|
|
|
|
|
|
|
||||||||
$1.50 billion warehouse facility
|
727,778
|
|
|
793,102
|
|
|
797,281
|
|
|
891,648
|
|
||||
$750 million warehouse facility
|
314,830
|
|
|
327,364
|
|
|
639,378
|
|
|
673,599
|
|
||||
$700 million warehouse facility
|
119,991
|
|
|
122,437
|
|
|
111,980
|
|
|
115,629
|
|
||||
$600 million warehouse facility
|
300,395
|
|
|
307,170
|
|
|
214,570
|
|
|
224,162
|
|
||||
$400 million warehouse facility
|
367,330
|
|
|
386,871
|
|
|
447,926
|
|
|
477,980
|
|
||||
$300 million warehouse facility
|
55
|
|
|
58
|
|
|
159,435
|
|
|
166,482
|
|
||||
$200 million warehouse facility
|
5,268
|
|
|
7,786
|
|
|
63,357
|
|
|
93,098
|
|
||||
Total notes payable
|
$
|
4,591,998
|
|
|
$
|
5,113,408
|
|
|
$
|
6,984,351
|
|
|
$
|
7,725,803
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
$285 million face value, 10.875% interest rate payable semi-annually, due April 2015
|
$
|
283,523
|
|
|
$
|
283,153
|
|
$475 million face value, 6.500% interest rate payable semi-annually, due August 2018
|
475,000
|
|
|
475,000
|
|
||
$375 million face value, 9.625% interest rate payable semi-annually, due May 2019
|
379,159
|
|
|
379,360
|
|
||
$400 million face value, 7.875% interest rate payable semi-annually, due October 2020
|
400,618
|
|
|
400,634
|
|
||
$600 million face value, 6.500% interest rate payable semi-annually, due July 2021
|
605,720
|
|
|
605,915
|
|
||
$300 million face value, 6.500% interest rate payable semi-annually, due June 2022
|
300,000
|
|
|
300,000
|
|
||
Total
|
$
|
2,444,020
|
|
|
$
|
2,444,062
|
|
Year
|
Amount
|
||
2014
|
$
|
—
|
|
2015
|
285,000
|
|
|
2016
|
—
|
|
|
2017
|
—
|
|
|
2018
|
475,000
|
|
|
Thereafter
|
1,675,000
|
|
|
Total
|
$
|
2,435,000
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Nonrecourse debt - Legacy Assets
|
$
|
86,529
|
|
|
$
|
89,107
|
|
Excess spread financing - fair value
|
978,183
|
|
|
986,410
|
|
||
Participating interest financing
|
1,202,252
|
|
|
1,103,490
|
|
||
Mortgage servicing rights financing liabilities
|
39,737
|
|
|
29,874
|
|
||
Total
|
$
|
2,306,701
|
|
|
$
|
2,208,881
|
|
|
Discount Rate
|
|
Total Prepayment
Speeds
|
|
Credit Losses
|
|||||||||||||||
|
100 bps
Adverse
Change
|
200 bps
Adverse
Change
|
|
10%
Adverse
Change
|
20%
Adverse
Change
|
|
10%
Adverse
Change
|
20%
Adverse
Change
|
||||||||||||
March 31, 2014
|
|
|
|
|
|
|
|
|
||||||||||||
Excess spread financing
|
$
|
29,113
|
|
$
|
60,058
|
|
|
$
|
21,183
|
|
$
|
44,586
|
|
|
$
|
22,729
|
|
$
|
40,688
|
|
December 31, 2013
|
|
|
|
|
|
|
|
|
||||||||||||
Excess spread financing
|
$
|
33,156
|
|
$
|
68,636
|
|
|
$
|
26,492
|
|
$
|
53,753
|
|
|
$
|
29,219
|
|
$
|
42,611
|
|
Excess Spread financing
|
Prepayment Speeds
|
Average Life (years)
|
Discount Rate
|
Recapture Rate
|
For the three months ended March 31, 2014
|
|
|
|
|
Low
|
5.8%
|
3.2 years
|
9.1%
|
5.0%
|
High
|
20.2%
|
5.7 years
|
19.0%
|
36.4%
|
For the year ended December 31, 2013
|
|
|
|
|
Low
|
4.0%
|
3.4 years
|
10.1%
|
5.0%
|
High
|
17.6%
|
5.7 years
|
20.0%
|
35.8%
|
|
|
|
March 31, 2014
|
||||||||||||
|
|
|
Recurring Fair Value Measurements
|
||||||||||||
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Mortgage loans held for sale
(1)
|
$
|
1,741,126
|
|
|
$
|
—
|
|
|
$
|
1,741,126
|
|
|
$
|
—
|
|
Mortgage servicing rights
|
2,576,550
|
|
|
—
|
|
|
—
|
|
|
2,576,550
|
|
||||
Other assets:
|
|
|
|
|
|
|
|
||||||||
IRLCs
|
85,069
|
|
|
—
|
|
|
85,069
|
|
|
—
|
|
||||
Forward MBS trades
|
6,738
|
|
|
—
|
|
|
6,738
|
|
|
—
|
|
||||
LPCs
|
867
|
|
|
—
|
|
|
867
|
|
|
—
|
|
||||
Interest rate swaps and caps
|
3,100
|
|
|
—
|
|
|
3,100
|
|
|
—
|
|
||||
Total assets
|
$
|
4,413,450
|
|
|
$
|
—
|
|
|
$
|
1,836,900
|
|
|
$
|
2,576,550
|
|
LIABILITIES
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||||
IRLCs
|
$
|
279
|
|
|
$
|
—
|
|
|
$
|
279
|
|
|
$
|
—
|
|
Interest rate swaps on ABS debt
|
569
|
|
|
—
|
|
|
569
|
|
|
—
|
|
||||
Forward MBS trades
|
5,180
|
|
|
—
|
|
|
5,180
|
|
|
—
|
|
||||
LPCs
|
349
|
|
|
—
|
|
|
349
|
|
|
—
|
|
||||
Excess spread financing (at fair value)
|
978,183
|
|
|
—
|
|
|
—
|
|
|
978,183
|
|
||||
Mortgage servicing rights financing
|
39,737
|
|
|
—
|
|
|
—
|
|
|
39,737
|
|
||||
Total liabilities
|
$
|
1,024,297
|
|
|
$
|
—
|
|
|
$
|
6,377
|
|
|
$
|
1,017,920
|
|
|
|
|
December 31, 2013
|
||||||||||||
|
|
|
Recurring Fair Value Measurements
|
||||||||||||
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Mortgage loans held for sale
(1)
|
$
|
2,585,340
|
|
|
$
|
—
|
|
|
$
|
2,585,340
|
|
|
$
|
—
|
|
Mortgage servicing rights
|
2,488,283
|
|
|
—
|
|
|
—
|
|
|
2,488,283
|
|
||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
||||||||
IRLCs
|
87,128
|
|
|
—
|
|
|
87,128
|
|
|
—
|
|
||||
Forward MBS trades
|
32,266
|
|
|
—
|
|
|
32,266
|
|
|
—
|
|
||||
LPCs
|
793
|
|
|
—
|
|
|
793
|
|
|
—
|
|
||||
Interest rate swaps and caps
|
3,691
|
|
|
—
|
|
|
3,691
|
|
|
—
|
|
||||
Total assets
|
$
|
5,197,501
|
|
|
$
|
—
|
|
|
$
|
2,709,218
|
|
|
$
|
2,488,283
|
|
LIABILITIES
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||||
IRLCs
|
$
|
2,698
|
|
|
$
|
—
|
|
|
$
|
2,698
|
|
|
$
|
—
|
|
Interest rate swaps on ABS debt
|
834
|
|
|
—
|
|
|
834
|
|
|
—
|
|
||||
Forward MBS trades
|
3,305
|
|
|
—
|
|
|
3,305
|
|
|
—
|
|
||||
LPCs
|
1,689
|
|
|
—
|
|
|
1,689
|
|
|
—
|
|
||||
Mortgage servicing rights financing
|
29,874
|
|
|
—
|
|
|
—
|
|
|
29,874
|
|
||||
Excess spread financing (at fair value)
|
986,410
|
|
|
—
|
|
|
—
|
|
|
986,410
|
|
||||
Total liabilities
|
$
|
1,024,810
|
|
|
$
|
—
|
|
|
$
|
8,526
|
|
|
$
|
1,016,284
|
|
(1)
|
Based on the nature and risks of these assets, the Company has determined that presenting them as a single class is appropriate.
|
|
|
ASSETS
|
|
LIABILITIES
|
|||||||
For the three months ended March 31, 2014
|
|
Mortgage
servicing rights
|
|
Excess spread
financing
|
Mortgage Servicing Rights Financing
|
||||||
Beginning balance
|
|
$
|
2,488,283
|
|
|
$
|
986,410
|
|
$
|
29,874
|
|
Transfers into Level 3
|
|
—
|
|
|
—
|
|
—
|
|
|||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
—
|
|
|||
Total gains or losses
|
|
|
|
|
|
||||||
Included in earnings
|
|
(78,349
|
)
|
|
(3,369
|
)
|
(10,788
|
)
|
|||
Included in other comprehensive income
|
|
—
|
|
|
—
|
|
|
||||
Purchases, issuances, sales and settlements
|
|
|
|
|
|
||||||
Purchases
|
|
108,312
|
|
|
—
|
|
—
|
|
|||
Issuances
|
|
58,304
|
|
|
37,859
|
|
20,651
|
|
|||
Sales
|
|
—
|
|
|
—
|
|
—
|
|
|||
Settlements
|
|
—
|
|
|
(42,717
|
)
|
—
|
|
|||
Ending balance
|
|
$
|
2,576,550
|
|
|
$
|
978,183
|
|
$
|
39,737
|
|
|
|
ASSETS
|
|
LIABILITIES
|
|||||||
For the year ended December 31, 2013
|
|
Mortgage
servicing rights
|
|
Excess spread
financing
|
Mortgage Servicing Rights Financing
|
||||||
Beginning balance
|
|
$
|
635,860
|
|
|
$
|
288,089
|
|
$
|
—
|
|
Transfers into Level 3
|
|
—
|
|
|
—
|
|
—
|
|
|||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
—
|
|
|||
Total gains or losses
|
|
|
|
|
|
||||||
Included in earnings
|
|
58,458
|
|
|
73,333
|
|
—
|
|
|||
Included in other comprehensive income
|
|
—
|
|
|
—
|
|
—
|
|
|||
Purchases, issuances, sales and settlements
|
|
|
|
|
|
||||||
Purchases
|
|
1,545,584
|
|
|
—
|
|
—
|
|
|||
Issuances
|
|
248,381
|
|
|
755,344
|
|
29,874
|
|
|||
Sales
|
|
—
|
|
|
—
|
|
—
|
|
|||
Settlements
|
|
—
|
|
|
(130,356
|
)
|
—
|
|
|||
Ending balance
|
|
$
|
2,488,283
|
|
|
$
|
986,410
|
|
$
|
29,874
|
|
|
Nonrecurring Fair Value
Measurements
|
|
Total Estimated
Fair Value
|
|
Total Gain
(Loss) Included
in Earnings
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
||||||||||||
Three months ended March 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
REO
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,734
|
|
|
$
|
37,734
|
|
|
$
|
600
|
|
Total assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
37,734
|
|
|
$
|
37,734
|
|
|
$
|
600
|
|
Year ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
REO
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,632
|
|
|
$
|
45,632
|
|
|
$
|
(13,316
|
)
|
Total assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,632
|
|
|
$
|
45,632
|
|
|
$
|
(13,316
|
)
|
(1)
|
Based on the nature and risks of these assets and liabilities, the Company has determined that presenting them as a single class is appropriate.
|
|
March 31, 2014
|
||||||||||||||
|
Carrying
Amount
|
|
Fair Value
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
404,073
|
|
|
$
|
404,073
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
471,635
|
|
|
471,635
|
|
|
—
|
|
|
—
|
|
||||
Mortgage loans held for sale
|
1,741,126
|
|
|
—
|
|
|
1,741,126
|
|
|
—
|
|
||||
Mortgage loans held for investment, principally subject to nonrecourse debt – Legacy assets
|
204,392
|
|
|
—
|
|
|
—
|
|
|
180,780
|
|
||||
Reverse mortgage interests
|
1,620,879
|
|
|
—
|
|
|
—
|
|
|
1,596,633
|
|
||||
Derivative financial instruments
|
95,773
|
|
|
—
|
|
|
95,733
|
|
|
—
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Notes payable
|
4,591,998
|
|
|
—
|
|
|
—
|
|
|
4,591,998
|
|
||||
Unsecured senior notes
|
2,444,020
|
|
|
2,456,370
|
|
|
—
|
|
|
—
|
|
||||
Derivative financial instruments
|
6,377
|
|
|
—
|
|
|
6,377
|
|
|
—
|
|
||||
Nonrecourse debt - Legacy assets
|
86,529
|
|
|
—
|
|
|
—
|
|
|
96,298
|
|
||||
Excess spread financing
|
978,183
|
|
|
—
|
|
|
—
|
|
|
978,183
|
|
||||
Participating interest financing
|
1,202,252
|
|
|
—
|
|
|
1,167,915
|
|
|
—
|
|
||||
Mortgage servicing rights financing liability
|
39,737
|
|
|
—
|
|
|
—
|
|
|
39,737
|
|
||||
|
December 31, 2013
|
||||||||||||||
|
Carrying
Amount
|
|
Fair Value
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
441,902
|
|
|
$
|
441,902
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
592,747
|
|
|
592,747
|
|
|
—
|
|
|
—
|
|
||||
Mortgage loans held for sale
|
2,603,380
|
|
|
—
|
|
|
2,601,520
|
|
|
—
|
|
||||
Mortgage loans held for investment, principally subject to nonrecourse debt – Legacy assets
|
211,050
|
|
|
—
|
|
|
—
|
|
|
180,435
|
|
||||
Reverse mortgage interests
|
1,434,506
|
|
|
—
|
|
|
—
|
|
|
1,405,197
|
|
||||
Derivative financial instruments
|
123,878
|
|
|
—
|
|
|
123,878
|
|
|
—
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Notes payable
|
6,984,351
|
|
|
—
|
|
|
—
|
|
|
6,984,351
|
|
||||
Unsecured senior notes
|
2,444,062
|
|
|
2,489,886
|
|
|
—
|
|
|
—
|
|
||||
Derivative financial instruments
|
8,526
|
|
|
—
|
|
|
8,526
|
|
|
—
|
|
||||
Nonrecourse debt - Legacy assets
|
89,107
|
|
|
—
|
|
|
—
|
|
|
95,345
|
|
||||
Excess spread financing
|
986,410
|
|
|
—
|
|
|
—
|
|
|
986,410
|
|
||||
Participating interest financing
|
1,103,490
|
|
|
—
|
|
|
1,093,747
|
|
|
—
|
|
||||
Mortgage servicing rights financing liability
|
29,874
|
|
|
—
|
|
|
—
|
|
|
29,874
|
|
|
Shares
|
|
Weighted Average
Grant Date Fair Value |
|
Weighted Average Remaining Contractual Term
|
Restricted stock outstanding at December 31, 2012
|
1,293
|
|
|
|
|
Grants issued in 2013
|
307
|
|
$37.88
|
|
2.0
|
Forfeited
|
(56)
|
|
$20.46
|
|
|
Shares surrendered to treasury to pay taxes
|
(168)
|
|
|
|
|
Restricted stock outstanding at December 31, 2013
|
1,376
|
|
|
|
|
Grants issued in 2014
|
620
|
|
$29.30
|
|
2.9
|
Forfeited
|
(14)
|
|
$30.10
|
|
|
Shares surrendered to treasury to pay taxes
|
(149)
|
|
|
|
|
Restricted stock outstanding at March 31, 2014
|
1,833
|
|
|
|
|
Restricted stock unvested and expected to vest
|
977
|
|
|
|
|
Restricted stock vested and payable at March 31, 2014
|
—
|
|
|
|
|
|
2014
|
2015
|
2016
|
2017
|
Restricted stock expected to vest
|
23
|
533
|
249
|
172
|
|
Three months ended March 31, 2014
|
||||||||||||||||||||||
|
Servicing
|
|
Originations
|
|
Operating
Segments
|
|
Legacy
Portfolio
and Other
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing fee income
|
$
|
254,347
|
|
|
$
|
—
|
|
|
$
|
254,347
|
|
|
$
|
298
|
|
|
$
|
(14,481
|
)
|
|
$
|
240,164
|
|
Other fee income
|
86,802
|
|
|
14,792
|
|
|
101,594
|
|
|
(47
|
)
|
|
—
|
|
|
101,547
|
|
||||||
Total fee income
|
341,149
|
|
|
14,792
|
|
|
355,941
|
|
|
251
|
|
|
(14,481
|
)
|
|
341,711
|
|
||||||
Gain/(loss) on mortgage loans held for sale
|
(1,695
|
)
|
|
116,200
|
|
|
114,505
|
|
|
(672
|
)
|
|
14,103
|
|
|
127,936
|
|
||||||
Total revenues
|
339,454
|
|
|
130,992
|
|
|
470,446
|
|
|
(421
|
)
|
|
(378
|
)
|
|
469,647
|
|
||||||
Total expenses and impairments
|
205,963
|
|
|
108,320
|
|
|
314,283
|
|
|
6,850
|
|
|
—
|
|
|
321,133
|
|
||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
18,664
|
|
|
21,521
|
|
|
40,185
|
|
|
3,380
|
|
|
378
|
|
|
43,943
|
|
||||||
Interest expense
|
(114,626
|
)
|
|
(36,603
|
)
|
|
(151,229
|
)
|
|
(5,371
|
)
|
|
—
|
|
|
(156,600
|
)
|
||||||
Gain (loss) on interest rate swaps and caps
|
2,556
|
|
|
—
|
|
|
2,556
|
|
|
265
|
|
|
—
|
|
|
2,821
|
|
||||||
Total other income (expense)
|
(93,406
|
)
|
|
(15,082
|
)
|
|
(108,488
|
)
|
|
(1,726
|
)
|
|
378
|
|
|
(109,836
|
)
|
||||||
Income (loss) before taxes
|
$
|
40,085
|
|
|
$
|
7,590
|
|
|
$
|
47,675
|
|
|
$
|
(8,997
|
)
|
|
$
|
—
|
|
|
$
|
38,678
|
|
Depreciation and amortization
|
$
|
4,588
|
|
|
$
|
2,967
|
|
|
$
|
7,555
|
|
|
$
|
1,237
|
|
|
$
|
—
|
|
|
$
|
8,792
|
|
Total assets
|
9,015,131
|
|
|
1,992,477
|
|
|
11,007,608
|
|
|
624,955
|
|
|
—
|
|
|
11,632,563
|
|
|
Three months ended March 31, 2013
|
||||||||||||||||||||||
|
Servicing
|
|
Originations
|
|
Operating
Segments
|
|
Legacy
Portfolio
and Other
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing fee income
|
$
|
206,460
|
|
|
$
|
—
|
|
|
$
|
206,460
|
|
|
$
|
555
|
|
|
$
|
(9,419
|
)
|
|
$
|
197,596
|
|
Other fee income
|
39,065
|
|
|
5,896
|
|
|
44,961
|
|
|
(82
|
)
|
|
—
|
|
|
44,879
|
|
||||||
Total fee income
|
245,525
|
|
|
5,896
|
|
|
251,421
|
|
|
473
|
|
|
(9,419
|
)
|
|
242,475
|
|
||||||
Gain/(loss) on mortgage loans held for sale
|
(98
|
)
|
|
179,793
|
|
|
179,695
|
|
|
(92
|
)
|
|
8,984
|
|
|
188,587
|
|
||||||
Total revenues
|
245,427
|
|
|
185,689
|
|
|
431,116
|
|
|
381
|
|
|
(435
|
)
|
|
431,062
|
|
||||||
Total expenses and impairments
|
147,609
|
|
|
111,902
|
|
|
259,511
|
|
|
9,060
|
|
|
—
|
|
|
268,571
|
|
||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
13,380
|
|
|
10,979
|
|
|
24,359
|
|
|
4,814
|
|
|
435
|
|
|
29,608
|
|
||||||
Interest expense
|
(71,321
|
)
|
|
(16,759
|
)
|
|
(88,080
|
)
|
|
(4,294
|
)
|
|
—
|
|
|
(92,374
|
)
|
||||||
Gain (loss) on interest rate swaps and caps
|
795
|
|
|
—
|
|
|
795
|
|
|
473
|
|
|
—
|
|
|
1,268
|
|
||||||
Total other income (expense)
|
(57,146
|
)
|
|
(5,780
|
)
|
|
(62,926
|
)
|
|
993
|
|
|
435
|
|
|
(61,498
|
)
|
||||||
Income (loss) before taxes
|
$
|
40,672
|
|
|
$
|
68,007
|
|
|
$
|
108,679
|
|
|
$
|
(7,686
|
)
|
|
$
|
—
|
|
|
$
|
100,993
|
|
Depreciation and amortization
|
$
|
2,306
|
|
|
$
|
816
|
|
|
$
|
3,122
|
|
|
$
|
779
|
|
|
$
|
—
|
|
|
$
|
3,901
|
|
Total assets
|
6,378,129
|
|
|
2,155,114
|
|
|
8,533,243
|
|
|
352,322
|
|
|
—
|
|
|
8,885,565
|
|
NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING BALANCE SHEET
MARCH 31, 2014
(IN THOUSANDS)
|
|||||||||||||||||||||||
Assets
|
Nationstar Inc.
|
|
Issuer
|
|
Guarantor
(Subsidiaries)
|
|
Non-Guarantor
(Subsidiaries)
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
381,635
|
|
|
$
|
1,714
|
|
|
$
|
20,724
|
|
|
$
|
—
|
|
|
$
|
404,073
|
|
Restricted cash
|
—
|
|
|
276,320
|
|
|
3
|
|
|
195,312
|
|
|
—
|
|
|
471,635
|
|
||||||
Accounts receivable
|
—
|
|
|
4,008,370
|
|
|
2,366
|
|
|
46,741
|
|
|
—
|
|
|
4,057,477
|
|
||||||
Mortgage loans held for sale
|
—
|
|
|
1,740,951
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
1,741,126
|
|
||||||
Mortgage loans held for investment, principally subject to nonrecourse debt–Legacy Asset, net
|
—
|
|
|
1,778
|
|
|
—
|
|
|
202,614
|
|
|
—
|
|
|
204,392
|
|
||||||
Reverse mortgage interests
|
—
|
|
|
1,620,879
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,620,879
|
|
||||||
Mortgage servicing rights
|
—
|
|
|
2,590,780
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,590,780
|
|
||||||
Investment in subsidiaries
|
1,009,738
|
|
|
204,241
|
|
|
—
|
|
|
—
|
|
|
(1,213,979
|
)
|
|
—
|
|
||||||
Property and equipment, net
|
—
|
|
|
114,832
|
|
|
877
|
|
|
3,597
|
|
|
—
|
|
|
119,306
|
|
||||||
Derivative financial instruments
|
—
|
|
|
92,674
|
|
|
—
|
|
|
3,100
|
|
|
—
|
|
|
95,774
|
|
||||||
Other assets
|
2,089
|
|
|
618,482
|
|
|
347,849
|
|
|
1,848,978
|
|
|
(2,490,277
|
)
|
|
327,121
|
|
||||||
Total assets
|
$
|
1,011,827
|
|
|
$
|
11,650,942
|
|
|
$
|
352,809
|
|
|
$
|
2,321,241
|
|
|
$
|
(3,704,256
|
)
|
|
$
|
11,632,563
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Notes payable
|
$
|
—
|
|
|
$
|
2,502,831
|
|
|
$
|
—
|
|
|
$
|
2,089,167
|
|
|
$
|
—
|
|
|
$
|
4,591,998
|
|
Unsecured senior notes
|
—
|
|
|
2,444,020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,444,020
|
|
||||||
Payables and accrued liabilities
|
—
|
|
|
1,203,396
|
|
|
2,994
|
|
|
14,503
|
|
|
(31,463
|
)
|
|
1,189,430
|
|
||||||
Payables to affiliates
|
—
|
|
|
2,182,198
|
|
|
116,495
|
|
|
160,121
|
|
|
(2,458,814
|
)
|
|
—
|
|
||||||
Derivative financial instruments
|
—
|
|
|
6,377
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,377
|
|
||||||
Mortgage servicing liabilities
|
—
|
|
|
82,210
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82,210
|
|
||||||
Other nonrecourse debt
|
—
|
|
|
2,220,172
|
|
|
—
|
|
|
86,529
|
|
|
—
|
|
|
2,306,701
|
|
||||||
Total liabilities
|
—
|
|
|
10,641,204
|
|
|
119,489
|
|
|
2,350,320
|
|
|
(2,490,277
|
)
|
|
10,620,736
|
|
||||||
Total equity
|
1,011,827
|
|
|
1,009,738
|
|
|
233,320
|
|
|
(29,079
|
)
|
|
(1,213,979
|
)
|
|
1,011,827
|
|
||||||
Total liabilities and equity
|
$
|
1,011,827
|
|
|
$
|
11,650,942
|
|
|
$
|
352,809
|
|
|
$
|
2,321,241
|
|
|
$
|
(3,704,256
|
)
|
|
$
|
11,632,563
|
|
NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED MARCH 31, 2014 (IN THOUSANDS) |
|||||||||||||||||||||||
|
Nationstar Inc.
|
|
Issuer
|
|
Guarantor
(Subsidiaries) |
|
Non-Guarantor
(Subsidiaries) |
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing fee income
|
$
|
—
|
|
|
$
|
254,609
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
(14,452
|
)
|
|
$
|
240,164
|
|
Other fee income
|
—
|
|
|
17,320
|
|
|
27,421
|
|
|
56,806
|
|
|
—
|
|
|
101,547
|
|
||||||
Total fee income
|
—
|
|
|
271,929
|
|
|
27,428
|
|
|
56,806
|
|
|
(14,452
|
)
|
|
341,711
|
|
||||||
Gain on mortgage loans held for sale
|
—
|
|
|
113,889
|
|
|
—
|
|
|
(27
|
)
|
|
14,074
|
|
|
127,936
|
|
||||||
Total revenues
|
—
|
|
|
385,818
|
|
|
27,428
|
|
|
56,779
|
|
|
(378
|
)
|
|
469,647
|
|
||||||
Expenses and impairments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Salaries, wages and benefits
|
—
|
|
|
143,358
|
|
|
1,696
|
|
|
11,541
|
|
|
—
|
|
|
156,595
|
|
||||||
General and administrative
|
—
|
|
|
128,927
|
|
|
796
|
|
|
26,477
|
|
|
—
|
|
|
156,200
|
|
||||||
Loss on foreclosed real estate and other
|
—
|
|
|
(2,185
|
)
|
|
—
|
|
|
2,785
|
|
|
—
|
|
|
600
|
|
||||||
Occupancy
|
—
|
|
|
6,983
|
|
|
95
|
|
|
660
|
|
|
—
|
|
|
7,738
|
|
||||||
Total expenses and impairments
|
—
|
|
|
277,083
|
|
|
2,587
|
|
|
41,463
|
|
|
—
|
|
|
321,133
|
|
||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
—
|
|
|
39,710
|
|
|
—
|
|
|
3,855
|
|
|
378
|
|
|
43,943
|
|
||||||
Interest expense
|
—
|
|
|
(134,478
|
)
|
|
—
|
|
|
(22,122
|
)
|
|
—
|
|
|
(156,600
|
)
|
||||||
Gain/(Loss) on interest rate swaps and caps
|
—
|
|
|
265
|
|
|
—
|
|
|
2,556
|
|
|
—
|
|
|
2,821
|
|
||||||
Gain/(loss) from subsidiaries
|
39,037
|
|
|
24,446
|
|
|
—
|
|
|
—
|
|
|
(63,483
|
)
|
|
—
|
|
||||||
Total other income (expense)
|
39,037
|
|
|
(70,057
|
)
|
|
—
|
|
|
(15,711
|
)
|
|
(63,105
|
)
|
|
(109,836
|
)
|
||||||
Income before taxes
|
39,037
|
|
|
38,678
|
|
|
24,841
|
|
|
(395
|
)
|
|
(63,483
|
)
|
|
38,678
|
|
||||||
Income tax expense/(benefit)
|
15,001
|
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,001
|
|
||||||
Net income/(loss)
|
24,036
|
|
|
38,678
|
|
|
24,841
|
|
|
(395
|
)
|
|
(63,483
|
)
|
|
23,677
|
|
||||||
Less: Net loss attributable to noncontrolling interests
|
—
|
|
|
(359
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(359
|
)
|
||||||
Net income/(loss) excluding noncontrolling interests
|
$
|
24,036
|
|
|
$
|
39,037
|
|
|
$
|
24,841
|
|
|
$
|
(395
|
)
|
|
$
|
(63,483
|
)
|
|
$
|
24,036
|
|
NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2014
(IN THOUSANDS)
|
|||||||||||||||||||||||
|
Nationstar Inc.
|
|
Issuer
|
|
Guarantor
(Subsidiaries)
|
|
Non-Guarantor
(Subsidiaries)
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income/(loss)
|
$
|
24,036
|
|
|
$
|
39,037
|
|
|
$
|
24,841
|
|
|
$
|
(395
|
)
|
|
$
|
(63,483
|
)
|
|
$
|
24,036
|
|
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Gain)/loss from subsidiaries
|
(39,037
|
)
|
|
(24,446
|
)
|
|
—
|
|
|
—
|
|
|
63,483
|
|
|
—
|
|
||||||
Share-based compensation
|
—
|
|
|
2,809
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,809
|
|
||||||
Loss on foreclosed real estate and other
|
—
|
|
|
(2,185
|
)
|
|
—
|
|
|
2,785
|
|
|
—
|
|
|
600
|
|
||||||
Loss on derivatives including ineffectiveness on interest rate swaps and caps
|
—
|
|
|
(264
|
)
|
|
—
|
|
|
(2,557
|
)
|
|
—
|
|
|
(2,821
|
)
|
||||||
Fair value changes in excess spread financing
|
—
|
|
|
(3,369
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,369
|
)
|
||||||
Depreciation and amortization
|
—
|
|
|
8,078
|
|
|
43
|
|
|
671
|
|
|
—
|
|
|
8,792
|
|
||||||
Fair value changes and amortization/accretion of mortgage servicing rights
|
—
|
|
|
78,687
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,687
|
|
||||||
Amortization of mortgage servicing rights liability
|
—
|
|
|
(10,788
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,788
|
)
|
||||||
Amortization/(accretion) of premiums/(discounts)
|
—
|
|
|
10,465
|
|
|
—
|
|
|
(506
|
)
|
|
—
|
|
|
9,959
|
|
||||||
Gain on mortgage loans held for sale
|
—
|
|
|
(113,889
|
)
|
|
—
|
|
|
27
|
|
|
(14,074
|
)
|
|
(127,936
|
)
|
||||||
Mortgage loans originated and purchased, net of fees
|
—
|
|
|
(5,402,512
|
)
|
|
—
|
|
|
(350
|
)
|
|
—
|
|
|
(5,402,862
|
)
|
||||||
Proceeds on sale of and payments of mortgage available for sale
|
—
|
|
|
6,343,251
|
|
|
—
|
|
|
5,388
|
|
|
12,669
|
|
|
6,361,308
|
|
||||||
Net tax effect of stock grants issued
|
—
|
|
|
(2,189
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,189
|
)
|
||||||
Cash settlement on derivative financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts receivable, including servicing advances, net
|
—
|
|
|
(4,030,462
|
)
|
|
216
|
|
|
4,018,139
|
|
|
—
|
|
|
(12,107
|
)
|
||||||
Reverse mortgage funded advances
|
—
|
|
|
(197,529
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(197,529
|
)
|
||||||
Other assets
|
19,784
|
|
|
2,532,050
|
|
|
(24,272
|
)
|
|
(2,516,153
|
)
|
|
1,405
|
|
|
12,814
|
|
||||||
Payables and accrued liabilities
|
—
|
|
|
(120,082
|
)
|
|
(2,956
|
)
|
|
897
|
|
|
—
|
|
|
(122,141
|
)
|
||||||
Net cash provided by/(used in) operating activities
|
4,783
|
|
|
(893,338
|
)
|
|
(2,128
|
)
|
|
1,507,946
|
|
|
—
|
|
|
617,263
|
|
|
Nationstar Inc.
|
|
Issuer
|
|
Guarantor
(Subsidiaries)
|
|
Non-Guarantor
(Subsidiaries)
|
|
Eliminations
|
|
Consolidated
|
|||||||||||||
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Property and equipment additions, net of disposals
|
—
|
|
|
(7,145
|
)
|
|
(65
|
)
|
|
(1,703
|
)
|
|
—
|
|
|
(8,913
|
)
|
|||||||
Purchases of reverse mortgage rights and interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Deposit on / purchase of forward mortgage servicing rights, net of liabilities incurred
|
—
|
|
|
(93,092
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93,092
|
)
|
|||||||
Loan repurchases from Ginnie Mae
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Proceeds from sales of REO
|
—
|
|
|
23,498
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,498
|
|
|||||||
Proceeds from sale of servicer advances
|
—
|
|
|
182,871
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
182,871
|
|
||||||
Acquisition of Greenlight Financial Services and other businesses, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net cash used in investing activities
|
—
|
|
|
106,132
|
|
|
(65
|
)
|
|
(1,703
|
)
|
|
—
|
|
|
104,364
|
|
|||||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Issuance of unsecured senior notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Transfers (to)/from restricted cash, net
|
—
|
|
|
18,914
|
|
|
—
|
|
|
85,311
|
|
|
—
|
|
|
104,225
|
|
|||||||
Issuance of participating interest financing in reverse mortgage interests
|
—
|
|
|
103,324
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
103,324
|
|
|||||||
Issuance of excess spread financing
|
—
|
|
|
37,859
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,859
|
|
|||||||
Increase/(decrease) in notes payable, net
|
—
|
|
|
608,403
|
|
|
—
|
|
|
(1,583,559
|
)
|
|
—
|
|
|
(975,156
|
)
|
|||||||
Proceeds from mortgage servicing rights financing
|
—
|
|
|
20,651
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,651
|
|
|||||||
Repayment of nonrecourse debt–Legacy assets
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,998
|
)
|
|
—
|
|
|
(2,998
|
)
|
|||||||
Repayment of excess spread financing
|
—
|
|
|
(42,717
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,717
|
)
|
|||||||
Debt financing costs
|
—
|
|
|
(2,050
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,050
|
)
|
|||||||
Net tax benefit for stock grants issued
|
—
|
|
|
2,189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,189
|
|
|||||||
Contribution to joint venture for noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Redemption of shares for stock vesting
|
(4,783
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,783
|
)
|
|||||||
Net cash provided by/(used in) financing activities
|
(4,783
|
)
|
|
746,573
|
|
|
—
|
|
|
(1,501,246
|
)
|
|
—
|
|
|
(759,456
|
)
|
|||||||
Net increase/(decrease) in cash
|
—
|
|
|
(40,633
|
)
|
|
(2,193
|
)
|
|
4,997
|
|
|
—
|
|
|
(37,829
|
)
|
|||||||
Cash and cash equivalents at beginning of period
|
—
|
|
|
422,268
|
|
|
3,907
|
|
|
15,727
|
|
|
—
|
|
|
441,902
|
|
|||||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
|
$
|
381,635
|
|
|
$
|
1,714
|
|
|
$
|
20,724
|
|
|
$
|
—
|
|
|
$
|
404,073
|
|
NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2013
(IN THOUSANDS)
|
|||||||||||||||||||||||
|
Nationstar Inc.
|
|
Issuer
(Parent)
|
|
Guarantor
(Subsidiaries)
|
|
Non-Guarantor
(Subsidiaries)
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
422,268
|
|
|
$
|
3,907
|
|
|
$
|
15,727
|
|
|
$
|
—
|
|
|
$
|
441,902
|
|
Restricted cash
|
—
|
|
|
312,120
|
|
|
3
|
|
|
280,624
|
|
|
—
|
|
|
592,747
|
|
||||||
Accounts receivable
|
—
|
|
|
1,569,021
|
|
|
2,582
|
|
|
4,064,879
|
|
|
—
|
|
|
5,636,482
|
|
||||||
Mortgage loans held for sale
|
—
|
|
|
2,603,380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,603,380
|
|
||||||
Mortgage loans held for investment, principally subject to nonrecourse debt–Legacy Asset, net
|
—
|
|
|
2,786
|
|
|
—
|
|
|
208,264
|
|
|
—
|
|
|
211,050
|
|
||||||
Reverse mortgage interests
|
—
|
|
|
1,434,506
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,434,506
|
|
||||||
Mortgage servicing rights
|
—
|
|
|
2,503,162
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,503,162
|
|
||||||
Investment in subsidiaries
|
968,027
|
|
|
181,545
|
|
|
—
|
|
|
—
|
|
|
(1,149,572
|
)
|
|
—
|
|
||||||
Property and equipment, net
|
—
|
|
|
115,765
|
|
|
855
|
|
|
2,565
|
|
|
—
|
|
|
119,185
|
|
||||||
Derivative financial instruments
|
—
|
|
|
120,187
|
|
|
—
|
|
|
3,691
|
|
|
—
|
|
|
123,878
|
|
||||||
Other assets
|
21,872
|
|
|
4,683,749
|
|
|
323,346
|
|
|
3,373,048
|
|
|
(8,041,618
|
)
|
|
360,397
|
|
||||||
Total assets
|
$
|
989,899
|
|
|
$
|
13,948,489
|
|
|
$
|
330,693
|
|
|
$
|
7,948,798
|
|
|
$
|
(9,191,190
|
)
|
|
$
|
14,026,689
|
|
Liabilities and members’ equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Notes payable
|
$
|
—
|
|
|
$
|
3,311,625
|
|
|
$
|
—
|
|
|
$
|
3,672,726
|
|
|
$
|
—
|
|
|
$
|
6,984,351
|
|
Unsecured senior notes
|
—
|
|
|
2,444,062
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,444,062
|
|
||||||
Payables and accrued liabilities
|
—
|
|
|
1,319,172
|
|
|
5,950
|
|
|
14,791
|
|
|
(31,463
|
)
|
|
1,308,450
|
|
||||||
Payables to affiliates
|
—
|
|
|
3,694,782
|
|
|
116,349
|
|
|
4,199,023
|
|
|
(8,010,154
|
)
|
|
—
|
|
||||||
Derivative financial instruments
|
—
|
|
|
8,526
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,526
|
|
||||||
Mortgage servicing liabilities
|
—
|
|
|
82,521
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82,521
|
|
||||||
Other nonrecourse debt
|
—
|
|
|
2,119,774
|
|
|
—
|
|
|
89,107
|
|
|
—
|
|
|
2,208,881
|
|
||||||
Total liabilities
|
—
|
|
|
12,980,462
|
|
|
122,299
|
|
|
7,975,647
|
|
|
(8,041,617
|
)
|
|
13,036,791
|
|
||||||
Total equity
|
989,899
|
|
|
968,027
|
|
|
208,394
|
|
|
(26,849
|
)
|
|
(1,149,573
|
)
|
|
989,898
|
|
||||||
Total liabilities and equity
|
$
|
989,899
|
|
|
$
|
13,948,489
|
|
|
$
|
330,693
|
|
|
$
|
7,948,798
|
|
|
$
|
(9,191,190
|
)
|
|
$
|
14,026,689
|
|
NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 2013 (IN THOUSANDS) |
|||||||||||||||||||||||
|
Nationstar Inc.
|
|
Issuer
|
|
Guarantor
(Subsidiaries) |
|
Non-Guarantor
(Subsidiaries) |
|
Eliminations
|
|
Consolidated
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Servicing fee income
|
$
|
—
|
|
|
$
|
207,015
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(9,419
|
)
|
|
$
|
197,596
|
|
Other fee income
|
—
|
|
|
6,234
|
|
|
38,517
|
|
|
128
|
|
|
—
|
|
|
44,879
|
|
||||||
Total fee income
|
—
|
|
|
213,249
|
|
|
38,517
|
|
|
128
|
|
|
(9,419
|
)
|
|
242,475
|
|
||||||
Gain on mortgage loans held for sale
|
—
|
|
|
179,603
|
|
|
—
|
|
|
—
|
|
|
8,984
|
|
|
188,587
|
|
||||||
Total revenues
|
—
|
|
|
392,852
|
|
|
38,517
|
|
|
128
|
|
|
(435
|
)
|
|
431,062
|
|
||||||
Expenses and impairments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Salaries, wages and benefits
|
—
|
|
|
128,588
|
|
|
6,399
|
|
|
—
|
|
|
—
|
|
|
134,987
|
|
||||||
General and administrative
|
—
|
|
|
116,403
|
|
|
9,239
|
|
|
—
|
|
|
—
|
|
|
125,642
|
|
||||||
Loss on foreclosed real estate and other
|
—
|
|
|
296
|
|
|
—
|
|
|
1,711
|
|
|
—
|
|
|
2,007
|
|
||||||
Occupancy
|
—
|
|
|
5,784
|
|
|
151
|
|
|
—
|
|
|
—
|
|
|
5,935
|
|
||||||
Total expenses and impairments
|
—
|
|
|
251,071
|
|
|
15,789
|
|
|
1,711
|
|
|
—
|
|
|
268,571
|
|
||||||
Other income / (expense):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
—
|
|
|
25,424
|
|
|
—
|
|
|
3,749
|
|
|
435
|
|
|
29,608
|
|
||||||
Interest expense
|
—
|
|
|
(69,608
|
)
|
|
—
|
|
|
(22,766
|
)
|
|
—
|
|
|
(92,374
|
)
|
||||||
Gain on interest rate swaps and caps
|
—
|
|
|
263
|
|
|
—
|
|
|
1,005
|
|
|
—
|
|
|
1,268
|
|
||||||
Gain /(loss) from subsidiaries
|
62,616
|
|
|
3,133
|
|
|
—
|
|
|
—
|
|
|
(65,749
|
)
|
|
—
|
|
||||||
Total other income /(expense)
|
62,616
|
|
|
(40,788
|
)
|
|
—
|
|
|
(18,012
|
)
|
|
(65,314
|
)
|
|
(61,498
|
)
|
||||||
Income before taxes
|
62,616
|
|
|
100,993
|
|
|
22,728
|
|
|
(19,595
|
)
|
|
(65,749
|
)
|
|
100,993
|
|
||||||
Income tax benefit
|
—
|
|
|
38,377
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,377
|
|
||||||
Net income (loss)
|
$
|
62,616
|
|
|
$
|
62,616
|
|
|
$
|
22,728
|
|
|
$
|
(19,595
|
)
|
|
$
|
(65,749
|
)
|
|
$
|
62,616
|
|
NATIONSTAR MORTGAGE HOLDINGS INC.
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2013
(IN THOUSANDS)
|
||||||||||||||||||||||||
|
|
Nationstar Inc.
|
|
Issuer
(Parent)
|
|
Guarantor
(Subsidiaries)
|
|
Non-Guarantor
(Subsidiaries)
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income/(loss)
|
|
$
|
62,616
|
|
|
$
|
62,616
|
|
|
$
|
22,728
|
|
|
$
|
(19,595
|
)
|
|
$
|
(65,749
|
)
|
|
$
|
62,616
|
|
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
(Gain)/loss from subsidiaries
|
|
(62,616
|
)
|
|
(3,133
|
)
|
|
—
|
|
|
—
|
|
|
65,749
|
|
|
—
|
|
||||||
Share-based compensation
|
|
—
|
|
|
2,858
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,858
|
|
||||||
Loss on foreclosed real estate and other
|
|
—
|
|
|
296
|
|
|
—
|
|
|
1,711
|
|
|
—
|
|
|
2,007
|
|
||||||
Loss on derivatives including ineffectiveness on interest rate swaps and caps
|
|
—
|
|
|
(263
|
)
|
|
—
|
|
|
(1,005
|
)
|
|
—
|
|
|
(1,268
|
)
|
||||||
Fair value changes in excess spread financing
|
|
—
|
|
|
23,891
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,891
|
|
||||||
Depreciation and amortization
|
|
—
|
|
|
3,850
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
3,901
|
|
||||||
Fair value changes and amortization/accretion of mortgage servicing rights
|
|
—
|
|
|
9,384
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,384
|
|
||||||
Amortization /accretion of premiums/(discounts)
|
|
—
|
|
|
9,589
|
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
|
9,509
|
|
||||||
Gain on mortgage loans held for sale
|
|
—
|
|
|
(179,603
|
)
|
|
—
|
|
|
—
|
|
|
(8,984
|
)
|
|
(188,587
|
)
|
||||||
Mortgage loans originated and purchased, net of fees
|
|
—
|
|
|
(3,781,116
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,781,116
|
)
|
||||||
Proceeds on sale of and payments of mortgage loans available for sale
|
|
—
|
|
|
3,682,566
|
|
|
—
|
|
|
3,309
|
|
|
8,984
|
|
|
3,694,859
|
|
||||||
Net tax effect of stock grants
|
|
(2,660
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,660
|
)
|
||||||
Cash settlement on derivatives financial instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(129
|
)
|
|
—
|
|
|
(129
|
)
|
||||||
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts receivable, including servicer advances, net
|
|
—
|
|
|
282,727
|
|
|
(5,840
|
)
|
|
(195,793
|
)
|
|
—
|
|
|
81,094
|
|
||||||
Reverse mortgage funded advances
|
|
—
|
|
|
(178,181
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(178,181
|
)
|
||||||
Other assets
|
|
3,894
|
|
|
(304,127
|
)
|
|
(3,338
|
)
|
|
315,534
|
|
|
(5,477
|
)
|
|
6,486
|
|
||||||
Payable and accrued liabilities
|
|
2,660
|
|
|
(127,198
|
)
|
|
6,038
|
|
|
8,076
|
|
|
5,477
|
|
|
(104,947
|
)
|
||||||
Net cash provided by/(used in) operating activities
|
|
3,894
|
|
|
(495,844
|
)
|
|
19,639
|
|
|
112,028
|
|
|
—
|
|
|
(360,283
|
)
|
|
|
Nationstar Inc.
|
|
Issuer
(Parent)
|
|
Guarantor
(Subsidiaries)
|
|
Non-Guarantor
(Subsidiaries)
|
|
Eliminations
|
|
Consolidated
|
||||||||||||
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property and equipment additions, net of disposals
|
|
—
|
|
|
(5,346
|
)
|
|
(521
|
)
|
|
—
|
|
|
—
|
|
|
(5,867
|
)
|
||||||
Purchase of reverse mortgage rights and interests
|
|
—
|
|
|
(50,198
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,198
|
)
|
||||||
Deposit on/purchase of forward mortgage servicing rights, net of liabilities incurred
|
|
—
|
|
|
(266,625
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(266,625
|
)
|
||||||
Loan repurchases from Ginnie Mae
|
|
—
|
|
|
(8,815
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,815
|
)
|
||||||
Acquisition of Greenlight Financial Services and other businesses, net
|
|
—
|
|
|
(12,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,500
|
)
|
||||||
Proceeds from sales of REO
|
|
—
|
|
|
4,157
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,157
|
|
||||||
Net cash provided by/(used in) investing activities
|
|
—
|
|
|
(339,327
|
)
|
|
(521
|
)
|
|
—
|
|
|
—
|
|
|
(339,848
|
)
|
||||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Issuance of unsecured senior notes
|
|
—
|
|
|
599,269
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
599,269
|
|
||||||
Transfers (to)/from restricted cash
|
|
—
|
|
|
(49,111
|
)
|
|
(18,766
|
)
|
|
100,600
|
|
|
—
|
|
|
32,723
|
|
||||||
Issuance of participating interest financing in reverse mortgage interests
|
|
—
|
|
|
166,646
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
166,646
|
|
||||||
Issuance of excess spread financing
|
|
—
|
|
|
192,730
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
192,730
|
|
||||||
Increase/(decrease) in notes payable
|
|
—
|
|
|
8,316
|
|
|
—
|
|
|
(200,016
|
)
|
|
—
|
|
|
(191,700
|
)
|
||||||
Repayment of nonrecourse debt–Legacy assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,612
|
)
|
|
—
|
|
|
(2,612
|
)
|
||||||
Repayment of excess servicing spread financing
|
|
—
|
|
|
(20,881
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,881
|
)
|
||||||
Net tax benefit for stock grants issued
|
|
2,660
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,660
|
|
||||||
Contributions from joint venture member to noncontrolling interests
|
|
—
|
|
|
4,990
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,990
|
|
||||||
Redemption of shares for stock vesting
|
|
(6,554
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,554
|
)
|
||||||
Debt financing costs
|
|
—
|
|
|
(9,750
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,750
|
)
|
||||||
Net cash provided by financing activities
|
|
(3,894
|
)
|
|
892,209
|
|
|
(18,766
|
)
|
|
(102,028
|
)
|
|
—
|
|
|
767,521
|
|
||||||
Net increase/(decrease) in cash
|
|
—
|
|
|
57,038
|
|
|
352
|
|
|
10,000
|
|
|
—
|
|
|
67,390
|
|
||||||
Cash and cash equivalents at beginning of period
|
|
—
|
|
|
152,248
|
|
|
401
|
|
|
—
|
|
|
—
|
|
|
152,649
|
|
||||||
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
209,286
|
|
|
$
|
753
|
|
|
$
|
10,000
|
|
|
$
|
—
|
|
|
$
|
220,039
|
|
|
March 31, 2014
|
December 31, 2013
|
||||
Consolidated Balance Sheets Data:
|
|
|
||||
Cash and cash equivalents
|
$
|
404,073
|
|
$
|
441,902
|
|
Accounts receivable
|
4,057,477
|
|
5,636,482
|
|
||
Mortgage loans held for sale
|
1,741,126
|
|
2,603,380
|
|
||
Mortgage servicing rights
|
2,590,780
|
|
2,503,162
|
|
||
Total assets
|
11,632,563
|
|
14,026,689
|
|
||
Notes payable
|
4,591,998
|
|
6,984,351
|
|
||
Unsecured senior notes
|
2,444,020
|
|
2,444,062
|
|
||
Other nonrecourse debt
|
2,306,701
|
|
2,208,881
|
|
||
Total liabilities
|
10,620,736
|
|
13,036,791
|
|
||
Total Nationstar Inc. stockholders' equity
|
1,007,196
|
|
984,908
|
|
Consolidated Statements of Operations and Comprehensive Income Data:
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Total revenues
|
$
|
469,647
|
|
|
$
|
431,062
|
|
Total expenses and impairments
|
321,133
|
|
|
268,571
|
|
||
Total other expense
|
(109,836
|
)
|
|
(61,498
|
)
|
||
Income before taxes
|
38,678
|
|
|
100,993
|
|
||
Total income tax expense
|
15,001
|
|
|
38,377
|
|
||
Net income
|
23,677
|
|
|
62,616
|
|
||
Less: Net loss attributable to noncontrolling interests
|
(359
|
)
|
|
—
|
|
||
Net income attributable to Nationstar Inc.
|
24,036
|
|
|
62,616
|
|
||
Change in value of designated cash flow hedge
|
(1,963
|
)
|
|
—
|
|
||
Comprehensive income
|
$
|
22,073
|
|
|
$
|
62,616
|
|
|
|
|
|
||||
Other Financial Data:
|
|
|
|
||||
Net cash provided by / (used in):
|
|
|
|
||||
Operating activities
|
$
|
617,263
|
|
|
$
|
(360,283
|
)
|
Investing activities
|
104,364
|
|
|
(339,848
|
)
|
||
Financing activities
|
(759,456
|
)
|
|
767,521
|
|
||
Adjusted EBITDA
(1)
(non-GAAP measure)
|
170,324
|
|
|
178,235
|
|
||
Operating Segments:
|
|
|
|
||||
Interest expense from unsecured senior notes
|
50,297
|
|
|
30,690
|
|
||
Change in fair value of mortgage servicing rights
|
78,349
|
|
|
9,659
|
|
||
Depreciation and amortization
|
7,555
|
|
|
3,528
|
|
||
Share-based compensation
|
2,823
|
|
|
2,858
|
|
||
Fair value changes in mortgage servicing rights net of excess spread financing
|
|
|
|
||||
Mortgage servicing rights:
|
|
|
|
||||
Due to changes in valuation inputs or assumptions used in the valuation model
|
(20,645
|
)
|
|
43,361
|
|
||
Other changes in fair value
|
(57,704
|
)
|
|
(53,020
|
)
|
||
Excess spread financing:
|
|
|
|
||||
Due to changes in valuation inputs or assumptions used in the valuation model
|
5,103
|
|
|
18,070
|
|
||
Other changes in fair value
|
(1,734
|
)
|
|
(41,961
|
)
|
||
Mortgage servicing rights financing liability:
|
|
|
|
||||
Due to changes in valuation inputs or assumptions used in the valuation model
|
4,407
|
|
|
—
|
|
||
Other changes in fair value
|
6,381
|
|
|
—
|
|
(1)
|
Adjusted EBITDA is a key performance measure used by management in evaluating the performance of our segments. Adjusted EBITDA represents our Operating Segments' income, and excludes income and expenses that relate to the financing of the unsecured senior notes, depreciable (or amortizable) asset base of the business, income taxes, exit costs from our restructuring activities and certain non-cash items. Adjusted EBITDA also excludes results from our legacy asset portfolio and certain securitization trusts that were consolidated upon adoption of the accounting guidance eliminating the concept of a Qualified Special Purpose Entity.
|
•
|
Financing arrangements for our Operating Segments are secured by assets that are allocated to these segments. Interest expense that relates to the financing of our unsecured senior notes is not considered in evaluating our operating performance because this obligation is serviced by the excess earnings from our Operating Segments after the debt obligations that are secured by their assets.
|
•
|
To monitor operating costs of each Operating Segment excluding the impact from depreciation, amortization and fair value change of the asset base, exit costs from our restructuring and non-cash operating expense, such as share-based compensation. Operating costs are analyzed to manage costs per our operating plan and to assess staffing levels, implementation of technology based solutions, rent and other general and administrative costs.
|
•
|
Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
|
•
|
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
Adjusted EBITDA does not reflect the cash requirements necessary to service principal payments related to the financing of the business;
|
•
|
Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our corporate debt;
|
•
|
although depreciation and amortization and changes in fair value of MSRs are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
|
•
|
other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
|
|
For the three months ended March 31,
|
||||||
Net Income from Operating Segments to Adjusted EBITDA Reconciliation (dollars in thousands):
|
2014
|
|
2013
|
||||
Net income
|
$
|
24,036
|
|
|
$
|
62,616
|
|
Plus:
|
|
|
|
||||
Net loss from Legacy Portfolio and Other
|
8,997
|
|
|
7,686
|
|
||
Loss attributable to noncontrolling interests
|
(359
|
)
|
|
—
|
|
||
Income tax expense
|
15,001
|
|
|
38,377
|
|
||
Income from Operating Segments
|
47,675
|
|
|
108,679
|
|
||
Adjust for:
|
|
|
|
||||
Interest expense from unsecured senior notes
|
50,297
|
|
|
30,690
|
|
||
Depreciation and amortization
|
7,555
|
|
|
3,528
|
|
||
Change in fair value of mortgage servicing rights
|
78,349
|
|
|
9,659
|
|
||
Amortization of mortgage servicing rights/obligations - at amortized cost
|
338
|
|
|
(275
|
)
|
||
Change in fair value of mortgage servicing rights financing liability
|
(10,788
|
)
|
|
—
|
|
||
Share-based compensation
|
2,823
|
|
|
2,858
|
|
||
Fair value changes on excess spread financing
|
(3,369
|
)
|
|
23,891
|
|
||
Fair value changes in derivatives
|
(2,556
|
)
|
|
(795
|
)
|
||
Adjusted EBITDA
|
$
|
170,324
|
|
|
$
|
178,235
|
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenues:
|
|
|
|
||||
Servicing fee income
|
$
|
240,164
|
|
|
$
|
197,596
|
|
Other fee income
|
101,547
|
|
|
44,879
|
|
||
Total fee income
|
341,711
|
|
|
242,475
|
|
||
Gain on mortgage loans held for sale
|
127,936
|
|
|
188,587
|
|
||
Total revenues
|
469,647
|
|
|
431,062
|
|
||
Expenses and impairments:
|
|
|
|
||||
Salaries, wages and benefits
|
156,595
|
|
|
134,987
|
|
||
General and administrative
|
156,200
|
|
|
125,642
|
|
||
Loss on foreclosed real estate and other
|
600
|
|
|
2,007
|
|
||
Occupancy
|
7,738
|
|
|
5,935
|
|
||
Total expenses and impairments
|
321,133
|
|
|
268,571
|
|
||
Other income (expense):
|
|
|
|
||||
Interest income
|
43,943
|
|
|
29,608
|
|
||
Interest expense
|
(156,600
|
)
|
|
(92,374
|
)
|
||
Gain on interest rate swaps and caps
|
2,821
|
|
|
1,268
|
|
||
Total other income (expense)
|
(109,836
|
)
|
|
(61,498
|
)
|
||
Income before taxes
|
38,678
|
|
|
100,993
|
|
||
Income tax expense
|
15,001
|
|
|
38,377
|
|
||
Net income
|
23,677
|
|
|
62,616
|
|
||
Less: Net loss attributable to noncontrolling interests
|
(359
|
)
|
|
—
|
|
||
Net income attributable to Nationstar Inc.
|
24,036
|
|
|
62,616
|
|
||
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Change in value of designated cash flow hedge
|
(1,963
|
)
|
|
—
|
|
||
Comprehensive income
|
$
|
22,073
|
|
|
$
|
62,616
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
||||
Basic earnings per share
|
$
|
0.27
|
|
|
$
|
0.70
|
|
Diluted earnings per share
|
$
|
0.27
|
|
|
$
|
0.70
|
|
Weighted average shares:
|
|
|
|
||||
Basic
|
89,342
|
|
|
89,293
|
|
||
Dilutive effect of stock awards
|
733
|
|
|
649
|
|
||
Diluted
|
90,075
|
|
|
89,942
|
|
||
Dividends declared per share
|
$
|
—
|
|
|
$
|
—
|
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenues:
|
|
|
|
||||
Servicing fee income
|
$
|
254,347
|
|
|
$
|
206,460
|
|
Other fee income
|
86,802
|
|
|
39,065
|
|
||
Total fee income
|
341,149
|
|
|
245,525
|
|
||
Gain on mortgage loans held for sale
|
(1,695
|
)
|
|
(98
|
)
|
||
Total revenues
|
339,454
|
|
|
245,427
|
|
||
Expenses and impairments:
|
|
|
|
||||
Salaries, wages and benefits
|
84,255
|
|
|
69,749
|
|
||
General and administrative
|
116,695
|
|
|
75,085
|
|
||
Occupancy
|
5,013
|
|
|
2,948
|
|
||
Loss on foreclosed real estate and other
|
—
|
|
|
(173
|
)
|
||
Total expenses and impairments
|
205,963
|
|
|
147,609
|
|
||
Other income (expense):
|
|
|
|
||||
Interest income
|
18,664
|
|
|
13,380
|
|
||
Interest expense
|
(114,626
|
)
|
|
(71,321
|
)
|
||
Loss on interest rate swaps and caps
|
2,556
|
|
|
795
|
|
||
Total other (expense)
|
(93,406
|
)
|
|
(57,146
|
)
|
||
Income before taxes
|
$
|
40,085
|
|
|
$
|
40,672
|
|
|
March 31, 2014
|
|
March 31, 2013
|
||||
Servicing Portfolio (in millions)
|
|
|
|
||||
Unpaid principal balance (by investor):
|
|
|
|
||||
Special servicing
|
$
|
10,893
|
|
|
$
|
10,757
|
|
Government-sponsored enterprises
|
210,540
|
|
|
125,221
|
|
||
Non-Agency securitizations
|
109,331
|
|
|
50,892
|
|
||
Total boarded forward servicing portfolio
|
330,764
|
|
|
186,870
|
|
||
Acquired Servicing Rights owned - serviced by others
|
24,714
|
|
|
4,782
|
|
||
Acquired Servicing Rights owned - serviced by predecessor
|
—
|
|
|
92,590
|
|
||
Total forward servicing portfolio
|
355,478
|
|
|
284,242
|
|
||
Reverse mortgage servicing
|
28,927
|
|
|
28,242
|
|
||
Total servicing portfolio unpaid principal balance
|
$
|
384,405
|
|
|
$
|
312,484
|
|
Three months ended March 31,
|
2014
(1)
|
|
2013
(2)
|
||||
($ in millions, except for average loan amount)
|
|
|
|
||||
Loan count-servicing
|
1,947,160
|
|
|
1,065,400
|
|
||
Ending unpaid principal balance
|
$
|
330,764
|
|
|
$
|
186,870
|
|
Average unpaid principal balance
|
$
|
333,336
|
|
|
$
|
180,403
|
|
Average loan amount
|
$
|
169,150
|
|
|
$
|
175,399
|
|
Average coupon
(3)
|
5.16
|
%
|
|
5.28
|
%
|
||
Average FICO
|
683
|
|
|
673
|
|
||
60+ delinquent (% of loans)
(4)
|
11.1
|
%
|
|
12.7
|
%
|
||
Total prepayment speed (12 month constant pre-payment rate)
|
16.1
|
%
|
|
16.7
|
%
|
(1)
|
2014
characteristics and key performance metrics of our servicing portfolio excludes approximately $24.7 billion and approximately 155,589 units of forward residential mortgage loans acquired and currently serviced by others.
|
(2)
|
2013 characteristics and key performance metrics of our servicing portfolio excludes approximately $92.6 billion and approximately 644,610 units of forward residential mortgage loans acquired and serviced by others.
|
(3)
|
The Company's servicing portfolio contains a wide range of coupons ranging from 2.0% to more than 8.0%. The average coupon listed in the table above is the arithmetic mean coupon of boarded loans in the Company's servicing portfolio as of March 31, 2014 and 2013.
|
(4)
|
Loan delinquency is based on the current contractual due date of the loan. In the case of a completed loan modification, delinquency is based on the modified due date of the loan.
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
MSR - Fair Value
|
$
|
2,576,550
|
|
|
$
|
2,488,283
|
|
Unpaid principal balance on forward loans serviced for others
|
|
|
|
|
|||
Credit Sensitive loans
|
$
|
264,176,084
|
|
|
$
|
266,757,777
|
|
Interest Sensitive loans
|
62,236,994
|
|
|
56,056,362
|
|
||
Total
|
$
|
326,413,078
|
|
|
$
|
322,814,139
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||
Credit Sensitive MSRs
|
|
|
|
||
Discount rate
|
13.69
|
%
|
|
14.17
|
%
|
Total prepayment speeds
|
20.65
|
%
|
|
20.34
|
%
|
Expected weighted-average life
|
4.64 years
|
|
|
4.63 years
|
|
Credit losses
|
20.22
|
%
|
|
22.87
|
%
|
Interest Rate Sensitive MSRs
|
|
|
|
||
Discount rate
|
9.54
|
%
|
|
10.50
|
%
|
Total prepayment speeds
|
10.52
|
%
|
|
8.97
|
%
|
Expected weighted average life
|
7.06 years
|
|
|
7.88 years
|
|
Credit losses
|
8.05
|
%
|
|
9.12
|
%
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Excess spread financing - fair value
|
$
|
978,183
|
|
|
$
|
986,410
|
|
Weighted-average assumptions:
|
|
|
|
|
|||
Mortgage prepayment speeds
|
10.5
|
%
|
|
10.6
|
%
|
||
Average life of mortgage loans
|
4.7 years
|
|
|
4.7 years
|
|
||
Discount rate
|
13.5
|
%
|
|
13.9
|
%
|
|
For the three months ended March 31. 2014
|
|
For the year ended December 31, 2013
|
||||
Fair value at the beginning of the period
|
$
|
986,410
|
|
|
$
|
288,089
|
|
Additions:
|
|
|
|
||||
New financings
|
37,859
|
|
|
755,344
|
|
||
Deductions:
|
|
|
|
||||
Settlements
|
(42,717
|
)
|
|
(130,356
|
)
|
||
Changes in fair value:
|
|
|
|
||||
Due to changes in valuation inputs or assumptions used in the valuation model
|
(5,103
|
)
|
|
148,852
|
|
||
Other changes in fair value
|
1,734
|
|
|
(75,519
|
)
|
||
Fair value at the end of the period
|
$
|
978,183
|
|
|
$
|
986,410
|
|
|
For the three months ended March 31. 2014
|
|
For the year ended December 31, 2013
|
||||
Fair value at the beginning of the period
|
$
|
29,874
|
|
|
$
|
—
|
|
Additions:
|
|
|
|
||||
New financings
|
20,651
|
|
|
29,874
|
|
||
Deductions:
|
|
|
|
||||
Settlements
|
—
|
|
|
—
|
|
||
Changes in fair value:
|
|
|
|
||||
Due to changes in valuation inputs or assumptions used in the valuation model
|
(4,407
|
)
|
|
—
|
|
||
Other changes in fair value
|
(6,381
|
)
|
|
—
|
|
||
Fair value at the end of the period
|
$
|
39,737
|
|
|
$
|
29,874
|
|
Three months ended March 31,
|
2014
|
|
2013
|
||||
($ in millions, except for average loan amount)
|
|
|
|
||||
Loan count
|
166,041
|
|
|
167,460
|
|
||
Ending unpaid principal balance
|
$
|
28,927
|
|
|
$
|
28,242
|
|
Average loan amount
|
$
|
174,219
|
|
|
$
|
168,650
|
|
Average coupon
|
2.97
|
%
|
|
3.03
|
%
|
||
Average borrower age
|
77
|
|
|
76
|
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Servicing fee income
|
$
|
235,201
|
|
|
$
|
172,081
|
|
Loss mitigation and performance-based incentive fees
|
13,012
|
|
|
5,806
|
|
||
Modification fees
|
32,808
|
|
|
24,717
|
|
||
Late fees and other ancillary charges
|
17,797
|
|
|
11,593
|
|
||
Reverse mortgage fees
|
13,539
|
|
|
18,693
|
|
||
Other servicing fee related revenues
|
6,182
|
|
|
7,120
|
|
||
Total servicing fee income before MSR fair value adjustments
|
318,539
|
|
|
240,010
|
|
||
MSR fair value adjustments
|
(78,349
|
)
|
|
(9,659
|
)
|
||
Fair value adjustments on MSR financing liability
|
10,788
|
|
|
—
|
|
||
Fair value adjustments on excess spread financing
|
3,369
|
|
|
(23,891
|
)
|
||
Total servicing fee income
|
$
|
254,347
|
|
|
$
|
206,460
|
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Primary servicing
|
$
|
305,000
|
|
|
$
|
221,317
|
|
Reverse servicing
|
13,539
|
|
|
18,693
|
|
||
Total servicing fee income before MSR fair value adjustments
|
$
|
318,539
|
|
|
$
|
240,010
|
|
|
March 31, 2014
|
|
March 31, 2013
|
||||
UPB (in millions)
|
|
|
|
||||
Owned forward servicing portfolio - unencumbered
|
$
|
80,790
|
|
|
$
|
65,616
|
|
Owned forward servicing portfolio - subject to excess spread financing
|
250,262
|
|
|
175,926
|
|
||
Subserviced forward servicing portfolio
|
24,426
|
|
|
42,700
|
|
||
Total unpaid principal balance
|
$
|
355,478
|
|
|
$
|
284,242
|
|
•
|
Increase of
$63.1 million
due to higher average UPB on our forward servicing portfolio, which averaged
$333.3 billion
in the
2014
period compared to
$180.4 billion
in the comparable
2013
period. The increase in our servicing portfolio was primarily driven by an increase in average UPB for loans serviced for GSEs and other subservicing contracts for third-party investors to
$210.9 billion
in the
2014
period compared to
$117.5 billion
in the comparable
2013
period. In addition, we also experienced an increase in average UPB for our private asset-backed securitizations portfolio, which increased to
$111.4 billion
in the three months ended
March 31, 2014
compared to
$52.1 billion
in the comparable
2013
period.
|
•
|
Increase of
$7.2 million
due to increased loss mitigation and performance-based incentive fees earned from a GSE.
|
•
|
Increase of
$8.1 million
due to higher modification fees earned from HAMP and non-HAMP modifications.
|
•
|
Increase of
$6.2 million
from increased collections from late fees and other ancillary charges.
|
•
|
Decrease of
$5.2 million
from fees earned from our reverse mortgage portfolio.
|
•
|
Decrease of
$68.6 million
from change in fair value on MSRs which was recognized in servicing fee income. The fair value of our MSRs is based upon the present value of the expected future cash flows related to servicing these loans. The revenue components of the cash flows are servicing fees, interest earned on custodial accounts, and other ancillary income. The expense components include operating costs related to servicing the loans (including delinquency and foreclosure costs) and interest expense on servicing advances. The expected future cash flows are primarily impacted by prepayment estimates, delinquencies, and market discount rates. Generally, the value of MSRs increases when interest rates increase and decreases when interest rates decline due to the effect those changes in interest rates have on prepayment estimates. Other factors affecting the MSR value include the estimated effects of loan modifications on expected cash flows, as well as market changes in the multiples applied to the servicing asset. Such modifications tend to positively impact cash flows by extending the expected life of the affected MSR and potentially producing additional revenue opportunities depending on the type of modification. In valuing the MSRs, we believe our assumptions are consistent with the assumptions other major market participants use. These assumptions include a level of future modification activity that we believe other major market participants would also use in their valuation of MSRs. Internally, we have modification goals that exceed the assumptions utilized in our valuation model. Nevertheless, were we to apply an assumption of a level of future modifications consistent with our internal goals to our MSR valuation, we do not believe the resulting increase in value would be material. Changes in the foreclosure process that may be required by government or regulatory bodies could increase the cost of servicing and diminish the value of our MSRs. We utilize assumptions of servicing costs that include delinquency and foreclosure costs that we
|
•
|
Increase of
$27.3 million
from change in fair value of our excess spread financing arrangements. In conjunction with various MSR acquisitions, we have entered into sale and assignment agreements, which we treated as financings, whereby we sold the right to receive a portion of the excess cash flow generated from certain underlying MSR portfolios after receipt of a fixed basic servicing fee per loan. We measure these financing arrangements at fair value.
|
•
|
Increase of $10.8 million from the change in fair value of our mortgage servicing rights financing liability. In conjunction with our new servicing acquisition structure, we entered into several sale agreements on our outstanding advances, which we treated as financings, whereby we sold the right to payment on outstanding servicer advances. We also sold the right to receive the basic fee component on the related MSRs in exchange for the Purchaser to remit a portion of the basic fee to Nationstar in exchange for Nationstar continuing to service the mortgage loans. We measure these financings at fair value.
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Primary servicing
|
$
|
172,145
|
|
|
$
|
128,425
|
|
Reverse servicing
|
17,927
|
|
|
12,707
|
|
||
Adjacent businesses
|
9,481
|
|
|
2,174
|
|
||
Other Servicing Segment expenses
|
6,410
|
|
|
4,303
|
|
||
Total expenses and impairments
|
$
|
205,963
|
|
|
$
|
147,609
|
|
•
|
Interest income was
$18.7 million
for the three months ended
March 31, 2014
compared to
$13.4 million
for the three months ended
March 31, 2013
, an increase of
$5.3 million
, due in part to higher interest earned on our participating interests in reverse mortgages.
|
•
|
Interest expense was
$114.6 million
for the three months ended
March 31, 2014
compared to
$71.3 million
for the three months ended
March 31, 2013
, an increase of
$43.3 million
, or
60.7%
, primarily due to higher average outstanding debt as a result of our $0.9 billion in unsecured senior notes that were issued in 2013. Interest expense from the unsecured senior notes was
$35.6 million
and
$22.7 million
, for the three months ended
March 31, 2014
and
2013
, respectively.
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenues:
|
|
|
|
||||
Servicing fee income
|
$
|
—
|
|
|
$
|
—
|
|
Other fee income (expense)
|
14,792
|
|
|
5,896
|
|
||
Total fee income (expense)
|
14,792
|
|
|
5,896
|
|
||
Gain on mortgage loans held for sale
|
116,200
|
|
|
179,793
|
|
||
Total revenues
|
130,992
|
|
|
185,689
|
|
||
Expenses and impairments:
|
|
|
|
||||
Salaries, wages and benefits
|
69,985
|
|
|
61,981
|
|
||
General and administrative
|
34,667
|
|
|
46,739
|
|
||
Occupancy
|
3,668
|
|
|
3,182
|
|
||
Total expenses and impairments
|
108,320
|
|
|
111,902
|
|
||
Other income (expense):
|
|
|
|
||||
Interest income
|
21,521
|
|
|
10,979
|
|
||
Interest expense
|
(36,603
|
)
|
|
(16,759
|
)
|
||
Total other income (expense)
|
(15,082
|
)
|
|
(5,780
|
)
|
||
Income before taxes
|
$
|
7,590
|
|
|
$
|
68,007
|
|
|
For the three months ended March 31,
|
||||||
Originations Volume (in millions)
|
2014
|
|
2013
|
||||
Retail
|
$
|
3,290.5
|
|
|
$
|
2,043.1
|
|
Wholesale
|
—
|
|
|
1,102.7
|
|
||
Correspondent
|
1,458.4
|
|
|
267.2
|
|
||
Total Originations
|
$
|
4,748.9
|
|
|
$
|
3,413.0
|
|
|
For the three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Gain on sale
|
$
|
193,728
|
|
|
$
|
139,130
|
|
Provision for repurchases
|
(7,127
|
)
|
|
(5,803
|
)
|
||
Capitalized servicing rights
|
58,304
|
|
|
31,268
|
|
||
Fair value mark-to-market adjustments
|
(154,738
|
)
|
|
(6,934
|
)
|
||
Mark-to-market on derivatives/hedges
|
26,033
|
|
|
22,132
|
|
||
Total gain on mortgage loans held for sale
|
$
|
116,200
|
|
|
$
|
179,793
|
|
•
|
Increase of
$54.6 million
from the increase in originations volume which increased to
$4.7 billion
for the three months ended
March 31, 2014
compared to
$3.4 billion
for the three months ended
March 31, 2013
.
|
•
|
Increase of
$27.0 million
from capitalized MSRs due to the larger volume of originations and subsequent retention of MSRs.
|
•
|
Increase of
$3.9 million
from change in unrealized gains/losses on derivative financial instruments. These include IRLCs and forward sales of MBS.
|
•
|
Decrease of
$147.8 million
resulting from the change in fair value on newly-originated loans.
|
•
|
Decrease of
$1.3 million
from a larger provision for repurchases as a result of the increase in our loan sale volume, partially offset by a lower expected loss rate.
|
•
|
Increase of
$8.0 million
in salaries, wages and benefits expense due to an increase in average headcount, which averaged
2,464
in
2014
compared to
1,800
in
2013
.
|
•
|
Decrease of
$11.6 million
in general and administrative and occupancy expense primarily due to sale of our wholesale originations business.
|
•
|
Interest income was
$21.5 million
for the three months ended
March 31, 2014
compared to
$11.0 million
for the three months ended
March 31, 2013
, an increase of
$10.5 million
, or
95.5%
, representing interest earned from originated loans prior to sale or securitization. The increase is primarily due to the increase in the volume of originations. Loans are typically sold within 30 days of origination.
|
•
|
Interest expense was
$36.6 million
for the three months ended
March 31, 2014
compared to
$16.8 million
for the three months ended
March 31, 2013
, an increase of
$19.8 million
, or
117.9%
, primarily due to an increase in originations volume in
2014
and associated financing required to originate these loans, combined with a slight increase in outstanding average days in warehouse on newly originated loans. Additionally, we recognized
$6.4 million
additional interest expense on unsecured senior notes.
|
|
March 31,
|
||||||
|
2014
|
|
2013
|
||||
Performing – UPB
|
$
|
210,090
|
|
|
$
|
266,854
|
|
Nonperforming (90+ Delinquency) - UPB
|
87,538
|
|
|
81,968
|
|
||
REO - Estimated Fair Value
|
14,232
|
|
|
15,487
|
|
||
Total Legacy Portfolio and Other – UPB
|
$
|
311,860
|
|
|
$
|
364,309
|
|
|
Three months ended March 31, 2014
|
|
Year Ended December 31, 2013
|
||||
Repurchase reserves, beginning of period
|
$
|
40,695
|
|
|
$
|
18,511
|
|
Additions
|
7,127
|
|
|
33,121
|
|
||
Charge-offs
|
(3,344
|
)
|
|
(10,937
|
)
|
||
Repurchase reserves, end of period
|
$
|
44,478
|
|
|
$
|
40,695
|
|
|
Three months ended March 31, 2014
|
|
Year Ended December 31, 2013
|
||||||||||
|
UPB
|
|
Count
|
|
UPB
|
|
Count
|
||||||
Beginning balance
|
$
|
43.0
|
|
|
176
|
|
|
$
|
14.0
|
|
|
79
|
|
Repurchases & indemnifications
|
(1.8
|
)
|
|
(13
|
)
|
|
(8.9
|
)
|
|
(55
|
)
|
||
Claims initiated
|
18.7
|
|
|
84
|
|
|
93.4
|
|
|
439
|
|
||
Rescinded
|
(29.1
|
)
|
|
(127
|
)
|
|
(55.5
|
)
|
|
(287
|
)
|
||
Ending Balance
|
$
|
30.8
|
|
|
120
|
|
|
$
|
43.0
|
|
|
176
|
|
|
Three months ended March 31,
|
|
Year Ended December 31,
|
|
|
|
|
||||||||||||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
Total
|
||||||||||||||||||||||||||||||
|
$
|
|
Count
|
|
$
|
|
Count
|
|
$
|
|
Count
|
|
$
|
|
Count
|
|
$
|
|
Count
|
|
$
|
|
Count
|
||||||||||||||||||
Loan Sales
|
$
|
5.3
|
|
|
29,452
|
|
|
$
|
23.0
|
|
|
109,963
|
|
|
$
|
6.9
|
|
|
31,261
|
|
|
$
|
3.3
|
|
|
16,629
|
|
|
$
|
2.6
|
|
|
13,090
|
|
|
$
|
41.1
|
|
|
200,395
|
|
•
|
This increase in cash outflows was primarily due to an increase of
$2,666.4 million
in our cash inflows from proceeds received from the sale of our residential mortgage loans and payments received on mortgage loans. We received
$6,361.3 million
in cash proceeds from loan sales and principal collections for the
three months ended March 31, 2014
, compared to
$3,694.9 million
for the comparable 2013 period. We originated and purchased
$5,402.9 million
in residential mortgage loans during the three month period ended
March 31, 2014
, compared to $3,781.2 million in mortgage originations and purchases for the comparable 2013 period.
|
•
|
Increase of $123.4 million in cash outflows from working capital which used $318.9 million for the three months ended
March 31, 2014
compared to
$195.5 million
in cash outflow for the comparable 2013 period.
|
Period
|
(a) Total Number of Shares (or Units) Purchased
1
|
(b) Average Price Paid per Share (or Unit)
|
(b) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
(d) Maximum Number (or Appropriate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Program
|
||||
January 1, 2014 - January 31, 2014
|
—
|
|
—
|
|
—
|
|
—
|
|
February 1, 2014 - February 28, 2014
|
—
|
|
—
|
|
—
|
|
—
|
|
March 1, 2014 - March 31, 2014
|
149,430
|
|
30.10
|
|
—
|
|
—
|
|
Total
|
149,430
|
|
30.10
|
|
—
|
|
—
|
|
|
|
Incorporated by Reference
|
|
|||
Exhibit Number
|
Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed or Furnished Herewith
|
|
|
|
|
|
|
|
4.1
|
Amendment No. 1, dated October 9, 2013 to the Base Indenture and to the Series 2013-VF1 Indenture Supplement, among Nationstar Servicer Advance Receivables Trust 2013-BofA, the issuer, Wells Fargo Bank, N.A., as indenture trustee, Nationstar Mortgage LLC, as administrator, and Bank of America, N.A., as administrative agent
|
|
|
|
|
X
|
|
|
|
|
|
|
|
4.2
|
Amendment No. 2 , dated February 28, 2014 to the Base Indenture and to the Series 2013-VF1 Indenture Supplement, among Nationstar Servicer Advance Receivables Trust 2013-BofA, the issuer, Wells Fargo Bank, N.A., as indenture trustee, Nationstar Mortgage LLC, as administrator, and Bank of America, N.A., as administrative agent
|
|
|
|
|
X
|
|
|
|
|
|
|
|
4.3
|
Amendment No. 3 to Series 2013-VF1 Indenture Supplement, dated April 18, 2014 among Nationstar Servicer Advance Receivables Trust 2013-BofA, the issuer, Wells Fargo Bank, N.A., as indenture trustee, Nationstar Mortgage LLC, as administrator, and Bank of America, N.A., as administrative agent
|
|
|
|
|
X
|
|
|
|
|
|
|
|
4.4
|
Amendment No. 1 to the Fourth Amended and Restated Indenture, dated April 22, 2014, among Nationstar Agency Advance Funding Trust, the issuer, The Bank of New York Mellon, as indenture trustee, Nationstar Mortgage LLC, as administrator and Barclays Bank PLC, as administrative agent
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.1
|
Amendment Number Six, dated November 25, 2013 to the Amended and Restated Master Repurchase Agreement among Barclays Bank PLC, Sutton Funding LLC and Nationstar Mortgage LLC
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.2
|
Amendment Number Seven, dated January 14, 2014 to the Amended and Restated Master Repurchase Agreement among Barclays Bank PLC, Sutton Funding LLC and Nationstar Mortgage LLC
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.3**
|
Nationstar Mortgage LLC Annual Incentive Compensation Plan, amended and restated as of February 24, 2014
|
|
|
|
|
X
|
|
|
|
|
|
|
|
31.1
|
Certification by Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
X
|
|
|
|
|
|
|
|
31.2
|
Certification by Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
X
|
|
|
|
|
|
|
|
32.1
|
Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
X
|
|
|
|
|
|
|
|
32.2
|
Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|||
Exhibit Number
|
Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed or Furnished Herewith
|
101.INS
|
XBRL Instance Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
X
|
|
|
|
||||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
X
|
**
|
Management contract, compensatory plan or arrangement.
|
|
|
NATIONSTAR MORTGAGE HOLDINGS INC.
|
|
|
|
May 9, 2014
|
|
/s/ Jay Bray
|
Date
|
|
Jay Bray
Chief Executive Officer (Principal Executive Officer) |
|
|
|
May 9, 2014
|
|
/s/ David C. Hisey
|
Date
|
|
David C. Hisey
Chief Financial Officer
(Principal Accounting and Financial Officer)
|
|
|
Incorporated by Reference
|
|
|||
Exhibit Number
|
Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed or Furnished Herewith
|
4.1
|
Amendment No. 1, dated October 9, 2013 to the Base Indenture and to the Series 2013-VF1 Indenture Supplement, among Nationstar Servicer Advance Receivables Trust 2013-BofA, the issuer, Wells Fargo Bank, N.A., as indenture trustee, Nationstar Mortgage LLC, as administrator, and Bank of America, N.A., as administrative agent
|
|
|
|
|
X
|
|
|
|
|
|
|
|
4.2
|
Amendment No. 2 , dated February 28, 2014 to the Base Indenture and to the Series 2013-VF1 Indenture Supplement, among Nationstar Servicer Advance Receivables Trust 2013-BofA, the issuer, Wells Fargo Bank, N.A., as indenture trustee, Nationstar Mortgage LLC, as administrator, and Bank of America, N.A., as administrative agent
|
|
|
|
|
X
|
|
|
|
|
|
|
|
4.3
|
Amendment No. 3 to Series 2013-VF1 Indenture Supplement, dated April 18, 2014 among Nationstar Servicer Advance Receivables Trust 2013-BofA, the issuer, Wells Fargo Bank, N.A., as indenture trustee, Nationstar Mortgage LLC, as administrator, and Bank of America, N.A., as administrative agent
|
|
|
|
|
X
|
|
|
|
|
|
|
|
4.4
|
Amendment No. 1 to the Fourth Amended and Restated Indenture, dated April 22, 2014, among Nationstar Agency Advance Funding Trust, the issuer, The Bank of New York Mellon, as indenture trustee, Nationstar Mortgage LLC, as administrator and Barclays Bank PLC, as administrative agent
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.1
|
Amendment Number Six, dated November 25, 2013 to the Amended and Restated Master Repurchase Agreement among Barclays Bank PLC, Sutton Funding LLC and Nationstar Mortgage LLC
|
|
|
|
|
X
|
|
|
|
|
|
|
|
10.2
|
Amendment Number Seven, dated January 14, 2014 to the Amended and Restated Master Repurchase Agreement among Barclays Bank PLC, Sutton Funding LLC and Nationstar Mortgage LLC
|
|
|
|
|
X
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10.3**
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Nationstar Mortgage LLC Annual Incentive Compensation Plan, amended and restated as of February 24, 2014
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X
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31.1
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Certification by Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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X
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31.2
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Certification by Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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X
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Incorporated by Reference
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Exhibit Number
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Description
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Form
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File No.
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Exhibit
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Filing Date
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Filed or Furnished Herewith
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32.1
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Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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X
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32.2
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Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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X
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101.INS
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XBRL Instance Document
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X
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101.SCH
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XBRL Taxonomy Extension Schema Document
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X
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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X
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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X
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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X
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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X
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**
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Management contract, compensatory plan or arrangement.
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Class A-VF1
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Advance Type / Type of Advance
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General
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Exempted
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Non-Judicial P&I Advances
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90%
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85%
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Judicial P&I Advances
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90%
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85%
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Non-Judicial Deferred Servicing Fees
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85%
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80%
|
Judicial Deferred Servicing Fees
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85%
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80%
|
Non-Judicial Escrow Advances
|
90%
|
85%
|
Judicial Escrow Advances
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90%
|
85%
|
Non-Judicial Corporate Advances
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90%
|
85%
|
Judicial Corporate Advances
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90%
|
85%
|
AM Funded Wet-Ink Mortgage Loans
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(i) a Transaction Notice and (ii) Seller Mortgage Loan Schedule
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No later than 4:00 p.m. (New York City time) on the Business Day prior to the requested Purchase Date
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Purchaser, Custodian and Disbursement Agent
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No later than 9:00 a.m. (New York City time) on the requested Purchase Date
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PM Funded Wet-Ink Mortgage Loans
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(i) a Transaction Notice and (ii) Seller Mortgage Loan Schedule
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No later than 1:00 p.m. (New York City time) on the requested Purchase Date
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Purchaser, Custodian and Disbursement Agent
|
No later than 4:00 p.m. (New York City time) on the requested Purchase Date
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1.
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Purpose.
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(a)
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Amount of Bonus Pool
. The annual bonus pool from which a bonus (a “
Bonus
”) may be paid to a Participant pursuant to the terms of the Plan shall be equal to four percent (4%) of the Company’s “Operating Cash Flow,” as defined in and determined in accordance with the terms set forth in Exhibit B attached hereto, which Exhibit B may be amended from time to time (the “
Bonus Pool
”).
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(b)
|
Allocation of Bonus Pool Among Participants
. For each fiscal year during which the Plan is in effect, the Committee shall determine, in its sole discretion, but following consultation with the Chief Executive Officer of the Company, the percentage of the Bonus Pool to be allocated to each Participant (the “
Annual Allocation
”), provided that, in no event may the Annual Allocation for such Participant be less than seventy-five percent (75%) of the Annual Allocation for that Participant in the immediately preceding fiscal year. The Committee shall provide notice to the Chief Executive Officer of the Company of such Annual Allocation. Upon receipt of such notice from the Committee, the Chief Executive Officer of the Company shall provide notice to each Participant of that Participant’s Annual Allocation.
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(c)
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Eligibility to Receive Bonus Payment
. Except to the extent otherwise provided in a Participant’s employment agreement with the Company, a Participant shall only be eligible to receive the payment of a Bonus pursuant to the terms of the Plan if, as of the last day of the fiscal year to which such Bonus relates, the Participant (i) is employed by the Company
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(d)
|
Bonus Payment
. A Bonus, if any, shall be paid to a Participant, in cash, as soon as practicable after the Company’s financial results for the fiscal year have been determined;
provided
,
however
, that in no event shall such payment be made earlier than January 1
st
or later than March 15
th
of the year following the year to which it relates.
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(e)
|
Termination of Employment of a Participant
. Subject to Section 4(c) hereof, in the event that a Participant terminates employment with the Company for any reason, the Participant shall no longer be entitled to participate in the Plan and the Committee shall, in its sole discretion, (i) apportion all (or a portion) of the terminated Participant’s Annual Allocation among the remaining Participants, (ii) add a new Participant (or Participants) to the Plan and apportion all (or a portion) of the terminated Participant’s Annual Allocation to the new Participant (or Participants) or (iii) implement any combination of the foregoing.
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5.
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Amendment and Termination.
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(a)
|
No Right to Continued Employment or Payment of a Bonus
. The right of a Participant to receive a Bonus under the Plan shall not be deemed a right to continued employment by the Company or its subsidiaries and does not otherwise restrict the Participant’s right or the right of the Company to terminate the Participant’s employment at any time, with or without notice and with or without cause. No Participant has any claim to be awarded a Bonus, and there is no obligation for uniformity of treatment of Participants. The terms and conditions of each Bonus and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not the Participants are similarly situated).
|
(b)
|
Unfunded Status of Awards
. Bonus payments shall be made from the general funds of the Company and no special or separate fund shall be established or other segregation of assets made to assure the payment of such bonuses.
|
(c)
|
Nontransferability
. No Participant shall have the power or right to transfer (other than by will or the laws of descent and distribution), alienate or otherwise encumber his or her interest under the Plan.
|
(d)
|
Withholding Taxes
. The Company shall withhold all applicable federal, state and local taxes from the payment of any Bonus made pursuant to the Plan, in accordance with applicable laws and regulations.
|
(e)
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Governing Law
. The Plan shall be governed by and construed in accordance with the laws of the State of Texas, without regard to its principles of conflict of laws.
|
(f)
|
Effective Date
. The effective date of the Plan is January 1, 2014.
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1.
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2014 of Nationstar Mortgage Holdings Inc.;
|
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 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.
|
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|
|
Date:
|
May 9, 2014
|
|
|
|
/s/ Jay Bray
|
|
|
|
|
Jay Bray
|
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2014 of Nationstar Mortgage Holdings Inc.;
|
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 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.
|
|
|
|
Date:
|
May 9, 2014
|
|
|
|
/s/ David C. Hisey
|
|
|
|
|
David C. Hisey
|
|
|
|
|
Chief Financial Officer
|
(1)
|
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:
|
May 9, 2014
|
|
|
/s/ Jay Bray
|
||
|
Jay Bray
|
||
|
Chief Executive Officer
|
(1)
|
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:
|
May 9, 2014
|
|
/s/ David C. Hisey
|
|
|
David C. Hisey
|
|
|
Chief Financial Officer
|