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Investments in Unconsolidated Entities
 12 Months Ended
Dec. 31, 2020
Equity Method Investments and Joint Ventures [Abstract]  
Investments in Unconsolidated Entities Investments in Unconsolidated EntitiesThe Company has various equity investments in entities where it has the ability to exert significant influence over such entity, but does not control such entity. In these cases the criteria for consolidation have not been met and the Company is required to account for such investments under ASC 323-10; the Company has elected the FVO for its investments in unconsolidated entities. As of December 31, 2020 and 2019, the Company's investments in unconsolidated entities had an aggregate fair value of $141.6 million and $71.9 million, respectively, which is included on the Consolidated Balance Sheet in Investments in unconsolidated entities, at fair value. For the years ended December 31, 2020 and 2019, the Company recognized $37.9 million and $10.2 million, respectively, in Earnings (losses) from investments in unconsolidated entities, on its Consolidated Statement of Operations, primarily related to its investment in loan originators. As of December 31, 2020 and 2019, the Company had non-controlling equity interests in three loan originators with an aggregate fair value of $79.5 million and $40.6 million, respectively. Certain of the entities that the Company accounts for under ASC 323-10 are deemed to be VIEs, and the maximum amount at risk is generally limited to the Company's investment in the VIE. As of December 31, 2020 and 2019, the fair value of the Company's investments in unconsolidated entities that have been deemed to be VIEs was $13.6 million and $28.5 million.
The following table provides details about the Company's investments in unconsolidated entities as of December 31, 2020 and 2019:
Percentage Ownership
of Unconsolidated Entity
Investment in Unconsolidated EntityForm of InvestmentDecember 31, 2020December 31, 2019
Longbridge Financial, LLC(1)
Preferred shares49.7%49.7%
LendSure Mortgage Corp.(1)(2)
Common shares49.9%49.9%
Elizon TCG SBC 2017-1(1)
Membership Interest36.0%—%
Jepson Holdings Limited(1)
Membership Interest30.1%30.1%
Elizon DB 2015-1 LLC(1)(3)(4)
Membership Interest8.9%3.5%
Elizon AFG 2018-1 LLC(1)(3)(5)
Membership Interest—%13.4%
Other(6)(7)
Various7.4%–56.3%7.7%–51.0%
(1)See Note 13 for additional details on the Company's related party transactions.
(2)Excludes investment in warrants convertible into non-voting common shares; including such warrants the Company's additional non-voting stake in the entity was 15.0% as of December 31, 2020. See Note 13 Related Party Transactions—Transactions Involving Certain Loan Originators for additional information.
(3)The Company has evaluated this entity and determined that it meets the definition of a VIE. The Company evaluated its interest in the VIE and determined that the Company does not have the power to direct the activities of the VIE and does not have control of the underlying assets, where applicable. As a result, the Company determined that it is not the primary beneficiary of this VIE and therefore has not consolidated the VIE.
(4)As discussed in Note 13 Related Party Transactions—Participation in Multi-Borrower Financing Facilities, the Company and the Affiliated Entities (as defined in Note 13) each consolidate their segregated silos of the Joint Entity (as defined in Note 13). The Company's effective percentage ownership before the effects of consolidation of both its and the Affiliated Entities' respective segregated silos of the Joint Entity, was 58.2% and 70.4% as of December 31, 2020 and 2019, respectively.
(5)As discussed in Note 13 Related Party Transactions—Participation in Multi-Borrower Financing Facilities, the Company and the Affiliated Entities each consolidate their segregated silos of the Joint Entity. The Company's effective percentage ownership before the effects of consolidation of both its and the Affiliated Entities' respective segregated silos of the Joint Entity, was 48.7% as of December 31, 2019.
(6)Includes interest in Consumer Risk Retention Vehicle, as defined in Note 10—Participation in Multi-Seller Consumer Loan Securitization. The Company has evaluated this entity and determined that it does not meet the definition of a VIE. The Company evaluated its interest in the entity under the voting interest model outlined in ASC 810, and has determined that the Company does not control this entity. As a result, the Company has not consolidated the entity. See Note 10 for additional details on the Company's securitization transactions.
(7)Includes interest in warehouse facilities; see Note 13—Participation in CLO Transactions, for additional details.
The following table provides a summary of the combined financial position of the unconsolidated entities as of December 31, 2020 and 2019, in which the Company has an investment:
December 31, 2020December 31, 2019
(In thousands)
Assets
Investments in securities, loans, MSRs, and REO(1)
$424,475 $560,949 
Other assets117,746 65,580 
Total assets$542,221 $626,529 
Liabilities
Borrowings$215,792 $387,910 
Other liabilities30,801 28,134 
Total liabilities246,593 416,044 
Equity295,628 210,485 
Total liabilities and equity$542,221 $626,529 
(1)Includes investments carried as the lower of cost or fair value as well as investments where the unconsolidated entity has elected the FVO.
The following table provides a summary of the combined results of operations of the unconsolidated entities as of December 31, 2020 and 2019, in which the Company has an investment:
Year Ended December 31, 2020Year Ended December 31, 2019
(In thousands)
Net Interest Income
Interest income$10,935 $30,587 
Interest expense(9,243)(13,316)
Total net interest income1,692 17,271 
Other Income (Loss)
Realized and unrealized gains (losses) on securities, loans, MSRs, and REO, net44,362 40,901 
Other, net44,031 31,848 
Total other income (loss)88,393 72,749 
Total expenses65,492 58,018 
Net income (loss) before income tax expense24,593 32,002 
Income tax expense (benefit)776 979 
Net Income (Loss)$23,817 $31,023