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GOODWILL AND INTANGIBLE ASSETS, NET
12 Months Ended
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND INTANGIBLE ASSETS, NET
GOODWILL AND INTANGIBLE ASSETS, NET
 
Goodwill
 
Goodwill was recorded primarily in connection with the 2015 acquisitions of CastleLine and the Acquired RentRange and Investability Businesses, the 2014 acquisitions of Mortgage Builder and Owners, the 2013 acquisitions of Homeward and Equator, the 2011 acquisitions of Springhouse, LLC and Tracmail and the 2010 acquisition of MPA. Note 5 discusses 2015, 2014 and 2013 acquisitions. Changes in goodwill during the years ended December 31, 2015 and 2014 are summarized below:
(in thousands)
 
Mortgage
Services
 
Financial
Services
 
Technology
Services
 
Total
 
 
 
 
 
 
 
 
 
Balance January 1, 2014
 
$
12,958

 
$
2,378

 
$
84,078

 
$
99,414

Acquisition of Mortgage Builder
 

 

 
9,135

 
9,135

Acquisition of Owners
 
19,775

 

 

 
19,775

Impairment of Equator goodwill
 

 

 
(37,473
)
 
(37,473
)
Balance, December 31, 2014
 
32,733

 
2,378

 
55,740

 
90,851

Acquisition of CastleLine
 
28,125

 

 

 
28,125

Acquisition of Acquired RentRange and Investability
   Businesses
 
19,565

 

 

 
19,565

Impairment of Technology Services goodwill
 

 

 
(55,740
)
 
(55,740
)
 
 
 
 
 
 
 
 
 
Balance, December 31, 2015
 
$
80,423

 
$
2,378

 
$

 
$
82,801



In the second quarter of 2014, management determined that Equator goodwill should be tested for impairment as a result of the decline in fair value of the Equator Earn Out (see Note 15). Consequently, we initiated a quantitative two-step goodwill impairment test by comparing the carrying value of the net assets of Equator to its fair value based on a discounted cash flow analysis. Based on this goodwill assessment, we determined that the fair value of Equator was less than its carrying value and goodwill was impaired. As a result, we recorded an impairment loss of $37.5 million.

During our fourth quarter 2014 and 2015 annual goodwill assessments, we elected to bypass the initial analysis of qualitative factors and perform a quantitative two-step goodwill impairment test of all of our reporting units as a result of the goodwill impairment recorded in the second quarter of 2014. We calculated the fair value of each of our reporting units by using a discounted cash flow analysis and concluded that the fair values of the Mortgage Services, Financial Services and Technology Services reporting units exceeded their carrying values by a significant margin in 2014 and that the fair values of the Mortgage Services and Financial Services reporting units exceeded their carrying values by a significant margin in 2015. In 2015, the fair value of the Technology Services reporting unit was less than its carrying value. Accordingly, we performed step two of the impairment test for the Technology Services reporting unit and determined that the remaining $55.7 million of goodwill was impaired. As a result, we recorded an estimated $55.7 million impairment loss in the fourth quarter of 2015. This goodwill impairment was primarily driven by the Company’s current projected Technology Services revenue from Ocwen and investment in technologies provided to Ocwen. There were no additional goodwill impairments as of December 31, 2015 and 2014, and there was no goodwill impairment in 2013.

Intangible Assets, Net
 
Intangible assets, net consist of the following as of December 31:
 
 
Weighted
average
estimated
useful life (in years)
 
Gross carrying amount
 
Accumulated amortization
 
Net book value
(in thousands)
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Definite lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trademarks and trade names
 
13
 
$
15,244

 
$
13,889

 
$
(6,491
)
 
$
(5,016
)
 
$
8,753

 
$
8,873

Customer related intangible assets
 
10
 
274,428

 
289,308

 
(113,725
)
 
(79,606
)
 
160,703

 
209,702

Operating agreement
 
20
 
35,000

 
35,000

 
(10,354
)
 
(8,604
)
 
24,646

 
26,396

Non-compete agreements
 
4
 
1,435

 

 
(115
)
 

 
1,320

 

Intellectual property
 
10
 
300

 
300

 
(55
)
 
(25
)
 
245

 
275

Other intangible assets
 
5
 
1,375

 

 
(39
)
 

 
1,336

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
$
327,782

 
$
338,497

 
$
(130,779
)
 
$
(93,251
)
 
$
197,003

 
$
245,246


 
Amortization expense for definite lived intangible assets was $41.1 million, $37.7 million and $28.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. Expected annual definite lived intangible asset amortization expense for 2016 through 2020 is $32.3 million, $26.7 million, $23.6 million, $21.4 million and $19.5 million, respectively.
 
In the fourth quarter of 2015, we recorded an impairment loss of $11.9 million in our Technology Services segment related to customer relationship intangible assets from the 2013 Homeward and ResCap fee-based business acquisitions. These impairments of intangible assets were primarily driven by the Company’s current projected Technology Services revenue from Ocwen and investment in technologies provided to Ocwen. There were no impairments of intangible assets for the years ended December 31, 2014 and 2013.