INVESTMENT IN EQUITY SECURITIES

12 Months Ended

Dec. 31, 2020

Investments, Debt and Equity Securities [Abstract]

INVESTMENT IN EQUITY SECURITIES

INVESTMENT IN EQUITY SECURITIES

During 2016, we purchased 4.1 million shares of RESI common stock. This investment is reflected in the accompanying consolidated balance sheets at fair value and changes in fair value are included in other income (expense), net in the accompanying consolidated statements of operations and comprehensive loss. As of December 31, 2019, we held 3.5 million shares of RESI common stock (no comparative amount as of December 31, 2020). As of December 31, 2019 and 2018, the fair value of our investment was $42.6 million and $36.2 million, respectively (no comparative amount as of December 31, 2020). During the years ended December 31, 2020, 2019 and 2018, we recognized an unrealized gain (loss) from the change in fair value of $4.0 million, $14.4 million and $(13.0) million, respectively, in the consolidated statements of operations and comprehensive loss.

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, that required equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. This standard was effective for the Company on January 1, 2018. The adoption of this standard resulted in a cumulative effect adjustment to increase retained earnings and decrease accumulated other comprehensive income by $0.7 million, net of income tax provision, on January 1, 2018.

The unrealized gain for years ended December 31, 2020 and 2019 included $4.1 million and $2.0 million of net gains recognized on RESI shares sold during the period, respectively (no comparative amount for the year ended December 31, 2018). During the years ended December 31, 2020, 2019 and 2018, we earned dividends of $0.5 million, $1.7 million and $2.5 million, respectively, related to this investment.

During the year ended December 31, 2020, the Company sold all of its remaining 3.5 million shares for net proceeds of $46.6 million. During the year ended December 31, 2019, the Company sold 0.7 million shares for net proceeds of $8.0 million. As required by our senior secured term loan agreement, the Company used the net proceeds to repay a portion of its senior secured term loan.