INVESTMENT IN EQUITY AFFILIATE

12 Months Ended

Dec. 31, 2012

INVESTMENT IN EQUITY AFFILIATE

INVESTMENT IN EQUITY AFFILIATE

10.  INVESTMENT IN EQUITY AFFILIATE

Correspondent One purchases closed conforming and government guaranteed residential mortgages from approved mortgage bankers.  Correspondent One provides members of Lenders One additional avenues to sell loans beyond Lenders One’s preferred investor arrangements and the members’ own network of loan buyers. We have significant influence over the general operations of Correspondent One consistent with our 49% ownership level and therefore account for our investment under the equity method. We have no funding commitments to Correspondent One as of December 31, 2012.

Our net loss on this investment using the equity method was $1.2 million and $0.5 million for the years ended December 31, 2012 and 2011 respectively.

In the first quarter of 2013, we anticipate entering into an agreement to sell all of our equity interest in Correspondent One to Ocwen for approximately $12.7 million. As a result, we recorded a $0.6 million impairment loss as of December 31, 2012, representing the difference between the expected sales price and the carrying value as of December 31, 2012. The loss is included within equity loss in affiliate in other expense (income), net in the consolidated statements of operations.

The following table presents summarized financial information for Correspondent One:

	Year ended
(in thousands)	December 31, 2012
Revenue	$	578
Expenses	2,944
Net loss	(2,366		)

	As of December 31, 2012
Current assets	$	30,096
Non-current assets	796
Current liabilities	3,595
Equity	27,297