10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from      to                     

Commission file number: 001-35449

Nationstar Mortgage Holdings Inc.

(Exact name of registrant as specified in its charter)

Delaware	45-2156869
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
350 Highland Drive Lewisville, TX	75067
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(469) 549-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12(b)-2 of the Exchange Act (check one)

Large Accelerated Filer	¨	Accelerated Filer	¨
Non-Accelerated Filer	x (Do not check if a smaller reporting company.)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Number of shares of common stock, $0.01 par value, outstanding as of November 2, 2012: 90,409,425

NATIONSTAR MORTGAGE HOLDINGS INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	5
	Consolidated Balance Sheets – September 30, 2012 (unaudited) and December 31, 2011	5
	Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) - For the three and nine months ended September 30, 2012 and 2011	6
	Consolidated Statements of Shareholders’ Equity - For the nine months ended September 30, 2012 (unaudited) and year ended December 31, 2011	7
	Unaudited Consolidated Statements of Cash Flows - For the nine months ended September 30, 2012 and 2011	8
	Notes to Unaudited Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	53
Item 3.	Quantitative and Qualitative Disclosure About Market Risks	74
Item 4.	Controls and Procedures	74
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	75
Item 1A.	Risk Factors	75
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
Item 3.	Defaults Upon Senior Securities	75
Item 4.	Mine Safety Disclosures	75
Item 5.	Other Information	75
Item 6.	Exhibits, Financial Statement Schedules	76
Signatures
Exhibits

2

CAUTIONS REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements include, without limitation, statements concerning plans, objectives, goals, projections, strategies, future events or performance, and underlying assumptions and other statements, which are not statements of historical facts. When used in this discussion, the words “anticipate,” “appears,” “believe,” “foresee,” “intend,” “should,” “expect,” “estimate,” “project,” “plan,” “may,” “could,” “will,” “are likely” and similar expressions are intended to identify forward-looking statements. These statements involve predictions of our future financial condition, performance, plans and strategies, and are thus dependent on a number of factors including, without limitation, assumptions and data that may be imprecise or incorrect. Specific factors that may impact performance or other predictions of future actions have, in many but not all cases, been identified in connection with specific forward-looking statements. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include:

• the delay in our foreclosure proceedings due to inquiries by certain state Attorneys General, court administrators, and state and federal government agencies;

• the impact of the ongoing implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), including proposed Consumer Financial Protection Bureau ("CFPB") rules relating to mortgage servicers and the recent examination of our business begun by the CFPB, on our business activities and practices, costs of operations and overall results of operations;

• the impact on our servicing practices of enforcement consent orders against and agreements entered into by certain federal and state agencies with the largest mortgage servicers and ongoing inquiries regarding other non-bank mortgage servicers;

• increased legal proceedings and related costs;

• the continued uncertainty of the residential mortgage market, increase in monthly payments on adjustable rate mortgage loans, adverse economic conditions, decrease in property values and increase in delinquencies and defaults;

• the deterioration of the market for reverse mortgages and increase in foreclosure rates for reverse mortgages;

• our ability to efficiently service higher risk loans;

• our ability to mitigate the increased risks related to servicing reverse mortgages;

• our ability to compete successfully in the mortgage loan servicing and mortgage loan originations industries;

• 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 mortgage servicing rights ("MSRs"), subservicing contracts, servicing platforms and originations platforms;

• our ability to scale-up appropriately and integrate our acquisitions to realize the anticipated benefits of any such potential future acquisitions, including potentially significant acquisitions;

• our ability to close on and realize the benefits of the acquisition of certain assets from Residential Capital LLC (ResCap), Residential Funding Company, LLC, GMAC Mortgage, LLC, Executive Trustee Services, LLC, ETS of Washington, Inc., EPRE LLC, GMACM Borrower LLC and RFC Borrower LLC (collectively, the ResCap Sellers) whether due to our failure to be the winning bidder in the auction process, the failure of a closing condition or otherwise;

• our ability to obtain sufficient capital to meet our financing requirements;

• our ability to grow our loan originations volume;

• the termination of our servicing rights and subservicing contracts;

• 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;

• changes in state and federal laws that are adverse to mortgage servicers which increase costs and operational complexity and impose significant penalties for violations;

• loss of our licenses;

• our ability to meet certain criteria or characteristics under the indentures governing our securitized pools of loans;

• our ability to follow the specific guidelines of government-sponsored enterprises ("GSEs") or a significant change in such guidelines;

• delays in our ability to collect or be reimbursed for servicing advances;

3

• changes to Home Affordable Modification Program ("HAMP"), Home Affordable Refinance Program ("HARP"), Making Home Affordable Plan ("MHA") or other similar government programs;

• changes in our business relationships with the Federal National Mortgage Association ("Fannie Mae"), the Federal Home Loan Mortgage Corporation ("Freddie Mac"), the Government National Mortgage Association ("Ginnie Mae") and others that facilitate the issuance of mortgage-backed securities ("MBS");

• changes to the nature of the guarantees of Fannie Mae and Freddie Mac and the market implications of such changes;

• errors in our financial models or changes in assumptions;

• requirements to write down the value of certain assets;

• changes in prevailing interest rates;

• our ability to successfully mitigate our risks through hedging strategies;

• changes to our servicer ratings;

• the accuracy and completeness of information about borrowers and counterparties;

• our ability to maintain our technology systems and our ability to adapt such systems for future operating environments;

• failure of our internal security measures or breach of our privacy protections;

• failure of our vendors to comply with servicing criteria;

• the loss of the services of our senior managers;

• failure to attract and retain a highly skilled work force;

• changes in public opinion concerning mortgage originators or debt default specialists; and

• changes in accounting standards.

All of the above factors are difficult to predict, contain uncertainties that may materially affect actual results, and may be beyond our control. New factors emerge from time to time, and it is not possible for our management to predict all such factors or to assess the effect of each such new factor on our business. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore any of these statements included herein may prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. Please refer to Item 1A. Risk Factors of Nationstar Mortgage LLC's Annual Report on Form 10-K filed on March 15, 2012, and Item 1A. Risk Factors of our Form 10-Q filed on August 14, 2012 for further information on these and other factors affecting us.

4

PART I.Financial Information

Item 1.Financial Statements

NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars and shares in thousands)

	September 30, 2012			December 31, 2011
	(unaudited)
Assets
Cash and cash equivalents	$	430,815		$	62,445
Restricted cash	258,858			71,499
Accounts receivable	2,852,985			562,300
Mortgage loans held for sale	703,214			458,626
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Assets, net of allowance for loan losses of $7,645 and $5,824, respectively	238,178			243,480
Reverse mortgage interests	452,886			—
Receivables from affiliates	13,301			4,609
Mortgage servicing rights – fair value	592,692			251,050
Mortgage servicing rights – amortized cost	8,036			—
Property and equipment, net of accumulated depreciation of $45,544 and $39,201, respectively	48,714			24,073
Real estate owned (REO), net	3,193			3,668
Other assets	338,359			106,181
Total assets	$	5,941,231		$	1,787,931
Liabilities and equity
Notes payable	$	2,532,316		$	873,179
Unsecured senior notes	1,062,423			280,199
Payables and accrued liabilities	762,268			183,789
Derivative financial instruments	37,835			12,370
Mortgage servicing liabilities	82,313			—
Nonrecourse debt - Legacy Assets	101,898			112,490
Excess spread financing - fair value	255,484			44,595
Participating interest financing	415,448			—
Total liabilities	5,249,985			1,506,622
Commitments and contingencies – See Note 18
Members’ units related to Nationstar Mortgage LLC	—			281,309
Preferred stock at $0.01 par value - 300,000 shares authorized, no shares issued and outstanding	—			—
Common stock at $0.01 par value - 1,000,000 shares authorized, 90,418 shares issued and outstanding	904			—
Additional paid-in-capital	553,380			—
Accumulated other comprehensive loss	—			—
Retained earnings	141,528			—
Common shares held by subsidiary	(4,566		)	—
Total equity	691,246			281,309
Total liabilities and equity	$	5,941,231		$	1,787,931

See accompanying notes to the consolidated financial statements.

5

NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(dollars and shares in thousands, except per share data)

	For the three months ended September 30,						For the nine months ended September 30,
	2012			2011			2012			2011
Revenues:
Servicing fee income	$	135,504		$	53,031		$	305,546		$	160,755
Other fee income	2,396			7,660			21,259			23,999
Total fee income	137,900			60,691			326,805			184,754
Gain on mortgage loans held for sale	139,259			30,232			312,116			73,560
Total revenues	277,159			90,923			638,921			258,314
Expenses and impairments:
Salaries, wages and benefits	98,107			50,904			238,519			146,199
General and administrative	51,585			25,397			127,107			56,707
Provision for loan losses	1,545			877			3,153			2,005
Loss/(gain) on foreclosed real estate	(2,050		)	2,558			1,705			6,904
Occupancy	5,641			3,458			11,293			7,902
Total expenses and impairments	154,828			83,194			381,777			219,717
Other income (expense):
Interest income	23,542			16,201			52,633			51,246
Interest expense	(65,015		)	(26,376		)	(125,908		)	(76,929		)
Loss on interest rate swaps and caps	(1,077		)	—			(1,702		)	—
Fair value changes in ABS securitizations	—			(654		)	—			(6,919		)
Total other expense	(42,550		)	(10,829		)	(74,977		)	(32,602		)
Income (loss) before taxes	79,781			(3,100		)	182,167			5,995
Income tax expense	24,714			—			40,639			—
Net income (loss)	55,067			(3,100		)	141,528			5,995
Other comprehensive loss, net of tax:
Cash flow hedges:
Change in value of designated cash flow hedges	—			—			(423		)	(1,071		)
Reclassification adjustments for gain (loss) included in earnings	423			—			423			—
Comprehensive income (loss)	$	55,490		$	(3,100	)	$	141,528		$	4,924
Earnings (loss) per share:
Basic earnings (loss) per share	$	0.62		$	(0.04	)	$	1.68		$	0.09
Diluted earnings (loss) per share	$	0.61		$	(0.04	)	$	1.68		$	0.09
Weighted average shares:
Basic	89,168			70,000			84,038			70,000
Dilutive effect of stock awards	597			—			360			—
Diluted	89,765			70,000			84,398			70,000
Dividends declared per share	$	—		$	—		$	—		$	—

See accompanying notes to the consolidated financial statements.

6

NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(dollars and shares in thousands)

	Common Shares	Members’ Units			Common Stock		Additional Paid-in Capital			Accumulated  Other Comprehensive Loss			Retained Earnings		Common shares held by subsidiary			Total Shareholders’ Units and  Equity
Balance at December 31, 2010	—	$	255,301		$	—	$	—		$	1,071		$	—	$	—		$	256,372
Share-based compensation	—	14,815			—		—			—			—		—			14,815
Distributions to parent	—	(4,348		)	—		—			—			—		—			(4,348		)
Tax related share-based settlement of units by members	—	(5,346		)	—		—			—			—		—			(5,346		)
Net income	—	20,887			—		—			—			—		—			20,887
Change in value of cash flow hedge	—	—			—		—			(1,071		)	—		—			(1,071		)
Balance at December 31, 2011	—	281,309			—		—			—			—		—			281,309
(unaudited)
Contributions from parent – FIF HE	—	12,764			—		—			—			—		—			12,764
Change in value of cash flow hedge	—	—			—		—			(423		)	—		—			(423		)
Reclassification adjustment for gain (loss) included in earnings	—	—			—		—			423			—		—			423
LLC conversion of equity to common shares	70,000	(294,073		)	700		293,373			—			—		—			—
Common stock issuance	19,167	—			192		246,508			—			—		—			246,700
Shares issued under incentive plan	1,251	—			12		(12		)	—			—		—			—
Share-based compensation	—	—			—		10,665			—			—		—			10,665
Excess tax benefit from share-based compensation	—	—			—		2,846			—			—		—			2,846
Withholding tax related to share based settlement of common stock by management	—	—			—		—			—			—		(4,566		)	(4,566		)
Net income	—	—			—		—			—			141,528		—			141,528
Balance at September 30, 2012	90,418	$	—		$	904	$	553,380		$	—		$	141,528	$	(4,566	)	$	691,246

See accompanying notes to the consolidated financial statements.

7

NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

	For the nine months ended September 30,
	2012			2011
Operating activities
Net income	$	141,528		$	5,995
Adjustments to reconcile net income to net cash (used in) / provided by operating activities:
Share-based compensation	10,665			12,201
Gain on mortgage loans held for sale	(312,116		)	(73,560		)
Provision for loan losses	3,153			2,005
Loss on foreclosed real estate	1,705			6,904
Loss on equity method investments	1,327			971
(Gain) / loss on derivatives including ineffectiveness on interest rate swaps and caps	1,702			(2,032		)
Fair value changes in ABS securitizations	—			6,919
Fair value changes in excess spread financing	5,050			—
Depreciation and amortization	6,358			2,551
Fair value changes in mortgage servicing rights	42,810			30,757
Amortization/accretion of mortgage servicing rights at amortized cost	(3,276		)	—
Amortization of debt discount	18,101			10,324
Amortization (accretion) of loan discounts	(4,002		)	(4,001		)
Mortgage loans originated and purchased, net of fees	(4,814,018		)	(2,285,558		)
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	4,769,317			2,334,807
Changes in assets and liabilities:
Accounts receivable, net	(268,394		)	(35,055		)
Receivables from affiliates	653			2,911
Reverse mortgage interests	(317,272		)	—
Other assets	(135,107		)	(2,037		)
Payables and accrued liabilities	231,925			35,840
Net cash (used in)/provided by operating activities	(619,891		)	49,942

Continued on following page.

8

NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Continued)

(dollars in thousands)

	For the nine months ended September 30,
	2012			2011
Investing activities
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt	—			29,395
Property and equipment additions, net of disposals	(20,699		)	(15,147		)
Acquisition of equity method investee	—			(6,600		)
Cash disbursement from assumption of reverse mortgage servicing obligations, net	(31,169		)	—
Purchase of forward mortgage servicing rights, including advances, net of liabilities incurred	(2,024,019		)	(40,305		)
Loan repurchases from Ginnie Mae	(6,856		)	—
Proceeds from sales of REO	8,434			22,897
Net cash used in investing activities	(2,074,309		)	(9,760		)
Financing activities
Issuance of Senior Unsecured Notes, net	781,196			—
Transfers (to) / from restricted cash, net	(187,359		)	18,312
Issuance of common stock, net of IPO issuance costs	246,700			—
Issuance of participating interest financing	416,303			—
Issuance of excess spread financing	215,570			—
Increase in notes payable	1,659,137			29,025
Repayment of nonrecourse debt – Legacy assets	(12,306		)	(26,119		)
Repayment of ABS nonrecourse debt	—			(47,175		)
Repayment of excess servicing spread financing	(12,981		)	—
Distributions to parent – FIF	—			(3,900		)
Debt financing costs	(43,690		)	(2,734		)
Tax related share-based settlement of units by members	—			(4,809		)
Net cash provided by / (used in) financing activities	3,062,570			(37,400		)
Net increase in cash and cash equivalents	368,370			2,782
Cash and cash equivalents at beginning of period	62,445			21,223
Cash and cash equivalents at end of period	$	430,815		$	24,005
Supplemental disclosures of non-cash activities
Transfer of mortgage loans held for sale to REO at fair value	$	—		$	90
Transfer of mortgage loans held for investment to REO at fair value	2,808			3,675
Transfer of mortgage loans held for investment, subject to ABS nonrecourse debt to REO at fair value	—			9,616
Mortgage servicing rights resulting from sale or securitization of mortgage loans	37,578			17,985
Excess tax benefit from share based compensation	2,846			—
Tax related share-based settlement of common stock	4,566			—
Liabilities incurred from acquired servicer advances	294,671			—

See accompanying notes to the consolidated financial statements.

9

NATIONSTAR MORTGAGE HOLDINGS INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, unless otherwise stated)

1. Nature of Business, Basis of Presentation and Material Transaction

Nature of Business

Nationstar Mortgage Holdings Inc. (Nationstar Inc. or the Company) is a Delaware corporation, formed in conjunction with and for the purpose of effecting an initial public offering by allowing common shareholders to own equity in a corporation instead of in a limited liability company.

Nationstar Inc. is a holding company that conducts no operating activities and owns no significant assets other than through its interests in its subsidiaries. Through its subsidiaries, Nationstar Inc. is engaged primarily in the servicing of residential mortgage loans for others and the origination and selling or securitization of single-family conforming mortgage loans to government-sponsored entities (GSE) or other third-party investors in the secondary market. Nationstar Mortgage LLC (Nationstar), the Company's principal operating subsidiary, is one of the largest high touch non-bank servicers in the United States.

Basis of Presentation

In conjunction with the initial public offering of Nationstar Inc., Nationstar became a wholly-owned indirect subsidiary of Nationstar Inc. Prior to the reorganization and initial public offering (Reorganization), Nationstar was a wholly-owned subsidiary of FIF HE Holdings LLC (FIF). Nationstar Inc. was formed solely for the purpose of reorganizing the structure of FIF and Nationstar so that the common stock issuer was a corporation rather than a limited liability company. As such, investors own common stock rather than equity interests in a limited liability company. Upon completion of the initial public offering and Reorganization, all of the equity interests in Nationstar were transferred from FIF to two direct wholly-owned subsidiaries of Nationstar Inc. In conjunction with the Reorganization, FIF contributed certain assets to Nationstar. The Reorganization has been accounted for as a reorganization under common control and, accordingly, there was no change in the basis of the assets and liabilities. As part of the Reorganization, FIF exchanged its equity in Nationstar for 70,000,000 shares of common stock in Nationstar Inc.

The consolidated financial statements include the accounts of Nationstar Inc. and its wholly-owned subsidiaries and those variable interest entities (VIEs) where Nationstar Inc.'s wholly-owned subsidiaries are the primary beneficiaries. Nationstar Inc. applies the equity method of accounting to investments when the entity is not a VIE and Nationstar Inc. is able to exercise significant influence, but not control, over the policies and procedures of the entity but owns less than 50% of the voting interests. Intercompany balances and transactions have been eliminated. Results of operations, assets and liabilities of VIEs are included from the date that Nationstar Inc. became the primary beneficiary through the date Nationstar Inc. ceases to be the primary beneficiary.

The interim consolidated financial statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of the interim periods have been included. The consolidated interim financial statements of Nationstar Inc. have been prepared in accordance with generally accepted accounting principles for interim information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (SEC). Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States (GAAP) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Nationstar Mortgage LLC's Annual Report on Form 10-K filed on March 15, 2012. The results of operations for the nine month period ended September 30, 2012, are not necessarily indicative of the results that may be expected for the year ended December 31, 2012. Certain prior period amounts have been reclassified to conform to the current period presentation. Nationstar Inc. evaluated subsequent events through the date these interim consolidated financial statements were issued.

Material Second Quarter Transaction

On March 6, 2012, Nationstar entered into an asset purchase agreement with Aurora Bank FSB and Aurora Loan Services LLC, (collectively Aurora). Nationstar and Aurora closed the asset purchase in June 2012. Nationstar paid Aurora approximately $2.0 billion that included mortgage servicing rights of approximately $271.5 million and servicing advance receivables of approximately $1.7 billion. As a part of the purchase, certain other assets and liabilities were also acquired. The mortgage servicing rights relate to approximately 300,000 residential mortgage loans with an unpaid principal balance of over $63 billion. As of the closing date, Nationstar entered into certain financing arrangements amounting to approximately $1.3 billion

10

for the servicing advance receivables and $176.5 million for excess spread financing related to the mortgage servicing rights. The remainder of the purchase price was funded with Nationstar cash.

2. Recent Accounting Developments

Accounting Standards Update No. 2011-03, Reconsideration of Effective Control for Repurchase Agreements (Update No. 2011-03). Update No. 2011-03 is intended to improve the accounting and reporting of repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. This amendment removes the criterion pertaining to an exchange of collateral such that it should not be a determining factor in assessing effective control, including (i) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (ii) the collateral maintenance implementation guidance related to that criterion. Other criteria applicable to the assessment of effective control are not changed by the amendments in the update. The amendments in this update were effective for interim and annual periods beginning after December 15, 2011. The adoption of Update No. 2011-03 did not have a material impact on the Company’s financial condition, liquidity or results of operations.

Accounting Standards Update No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (Update No. 2011-04). Update No. 2011-04 is intended to provide common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards (IFRS). The changes required in this update include changing the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments in this update are to be applied prospectively and were effective for interim and annual periods beginning after December 15, 2011. Upon adoption, certain disclosure requirements were added to the Fair Value Measurements footnote. The adoption of Update No. 2011-04 did not have a material impact on the Company’s financial condition, liquidity or results of operations.

Accounting Standards Update No. 2011-05, Presentation of Comprehensive Income (Update No. 2011-05). Update No. 2011-05 is intended to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. Update No. 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity and now requires that all non-owner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This update does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments in this update are to be applied retrospectively and were effective for interim and annual periods beginning after December 15, 2011. The adoption of Update No. 2011-05 did not have a material impact on the Company’s financial statements.

Accounting Standards Update No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No 2011-05 (Update No. 2011-12). Update 2011-12 is intended to temporarily defer the effective date of the requirement to present separate line items on the income statement for reclassification adjustments of items out of accumulated other comprehensive income into net income as required by Update No. 2011-05. All other requirements in Update 2011-05 are not affected by this update. This update does not change the requirement to present reclassifications adjustments within other comprehensive income either on the face of the statement that reports other comprehensive income or in the notes to the financial statements (Update 2011-05). The amendments in this update were effective for interim and annual periods beginning after December 15, 2011. The adoption of Update No. 2011-12 did not have a material impact on the Company's financial statements.

3. Variable Interest Entities and Securitizations

Nationstar has been the transferor in connection with a number of securitizations or asset-backed financing arrangements, from which Nationstar has continuing involvement with the underlying transferred financial assets. Nationstar aggregates these securitizations or asset-backed financing arrangements into two groups: 1) securitizations of residential mortgage loans and 2) transfers accounted for as secured borrowings.

On securitizations of residential mortgage loans, Nationstar’s continuing involvement typically includes acting as servicer for the mortgage loans held by the trust and holding beneficial interests in the trust. Nationstar’s responsibilities as servicer include, among other things, collecting monthly payments, maintaining escrow accounts, providing periodic reports and managing insurance in exchange for a contractually specified servicing fee. The beneficial interests held consist of both subordinate and residual securities that were retained at the time of the securitization and any mortgage servicing rights subsequently retained in the securitization.

Nationstar also maintains various agreements with special purpose entities (SPEs), under which Nationstar transfers mortgage loans and/or advances on residential mortgage loans in exchange for cash. These SPEs issue debt supported by collections on

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the transferred mortgage loans and/or advances. These transfers do not qualify for sale treatment because Nationstar continues to retain control over the transferred assets. As a result, Nationstar accounts for these transfers as financings and continues to carry the transferred assets and recognizes the related liabilities on Nationstar’s consolidated balance sheets. Collections on the mortgage loans and/or advances pledged to the SPEs are used to repay principal and interest and to pay the expenses of the entity. The holders of these beneficial interests issued by these SPEs do not have recourse to Nationstar and can only look to the assets of the SPEs themselves for satisfaction of the debt.

A Variable Interest Entity (VIE) is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary, which is the entity that, through its variable interests has both the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Current accounting guidance requires that all existing SPEs be evaluated for consolidation. Nationstar identified certain securitization trusts where Nationstar, through its affiliates, continued to hold beneficial interests in these trusts. These retained beneficial interests obligate Nationstar to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant. In addition, Nationstar as master servicer on the related mortgage loans, retains the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE. When it is determined that Nationstar has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, the assets and liabilities of these VIEs are included in Nationstar’s consolidated financial statements. Upon consolidation of these VIEs, Nationstar derecognized all previously recognized beneficial interests obtained as part of the securitization, including any retained investment in debt securities, mortgage servicing rights, and any remaining residual interests. In addition, Nationstar recognized the securitized mortgage loans as mortgage loans held for investment, subject to ABS nonrecourse debt, and the related asset-backed certificates (ABS nonrecourse debt) acquired by third parties as ABS nonrecourse debt on Nationstar’s consolidated balance sheet.

As a result of market conditions and deteriorating credit performance on these consolidated VIEs, Nationstar expects minimal to no future cash flows on the economic residual. Under existing GAAP, Nationstar would be required to provide for additional allowances for loan losses on the securitization collateral as credit performance deteriorated, with no offsetting reduction in the securitization’s debt balances, even though any nonperformance of the assets will ultimately pass through as a reduction of amounts owed to the debt holders once they are extinguished. Therefore, Nationstar would be required to record accounting losses beyond its economic exposure.

To more accurately represent the future economic performance of the securitization collateral and related debt balances, Nationstar elected the fair value option provided for by Accounting Standards Codification (ASC) ASC 825-10, Financial Instruments-Overall. This option was applied to all eligible items within the VIE, including mortgage loans held for investment, subject to ABS nonrecourse debt, and the related ABS nonrecourse debt.

Subsequent to this fair value election, Nationstar no longer records an allowance for loan loss on mortgage loans held for investment, subject to ABS nonrecourse debt. Nationstar continues to record interest income in Nationstar’s consolidated statement of operations on these fair value elected loans until they are placed on a nonaccrual status when they are 90 days or more past due. The fair value adjustment recorded for the mortgage loans held for investment is classified within fair value changes of ABS securitizations in Nationstar’s consolidated statement of operations.

Subsequent to the fair value election for ABS nonrecourse debt, Nationstar continues to record interest expense in Nationstar’s consolidated statement of operations on the fair value elected ABS nonrecourse debt. The fair value adjustment recorded for the ABS nonrecourse debt is classified within fair value changes of ABS securitizations in Nationstar’s consolidated statement of operations.

Under the existing pooling and servicing agreements of these securitization trusts, the principal and interest cash flows on the underlying securitized loans are used to service the asset-backed certificates. Accordingly, the timing of the principal payments on this nonrecourse debt is dependent on the payments received on the underlying mortgage loans and liquidation of real estate owned.

Nationstar consolidates the SPEs created for the purpose of issuing debt supported by collections on loans and advances that have been transferred to it as VIEs, and Nationstar is the primary beneficiary of these VIEs. The Company consolidates the assets and liabilities of the VIEs onto its consolidated financial statements.

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In December 2011, Nationstar sold its remaining variable interest in a securitization trust that had been a consolidated VIE since January 1, 2010 and deconsolidated the VIE. In accordance with ASC 810 Nationstar has evaluated this securitization trust and determined that Nationstar no longer has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, and this securitization trust was derecognized as of December 31, 2011. Upon deconsolidation of this VIE, Nationstar derecognized the securitized mortgage loans held for investment, subject to ABS nonrecourse debt, the related ABS nonrecourse debt, as well as certain other assets and liabilities of the securitization trust, and recognized any MSRs on the consolidated balance sheet. The impact of this derecognition on the Company’s consolidated statement of operations was recognized in the fourth quarter of 2011 in the fair value changes in ABS securitizations line item.

A summary of the assets and liabilities of Nationstar’s transactions with VIEs included in the Company’s consolidated financial statements as of September 30, 2012 and December 31, 2011 is presented in the following tables (in thousands):

	September 30, 2012		December 31, 2011
	Transfers Accounted for as Secured Borrowings		Transfers Accounted for as Secured Borrowings
ASSETS
Restricted cash	$	126,002	$	22,316
Accounts receivable	2,269,229		279,414
Mortgage loans held for investment, subject to nonrecourse debt	228,041		237,496
REO	1,830		3,668
Total Assets	$	2,625,102	$	542,894
LIABILITIES
Notes payable	$	1,707,941	$	244,574
Payables and accrued liabilities	2,412		977
Derivative financial instruments	7,041		—
Nonrecourse debt–Legacy Assets	101,898		112,490
Total Liabilities	$	1,819,292	$	358,041

A summary of the outstanding collateral and certificate balances for securitization trusts, including any retained beneficial interests and MSRs, that were not consolidated by Nationstar for the periods indicated are as follows (in thousands):

	September 30, 2012		December 31, 2011
Total collateral balances	$	4,239,774	$	4,579,142
Total certificate balances	4,230,472		4,582,598
Total mortgage servicing rights at fair value	23,367		28,635

Nationstar has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of September 30, 2012 or December 31, 2011, and therefore does not have a significant maximum exposure to loss related to these unconsolidated VIEs. A summary of mortgage loans transferred to unconsolidated securitization trusts that are 60 days or more past due and the credit losses incurred in the unconsolidated securitization trusts are presented below (in thousands):

	As of or for the nine months ended,
	September 30, 2012				September 30, 2011
	Principal Amount of Loans 60 Days or More Past Due		Credit Losses		Principal Amount of Loans 60 Days or More Past Due		Credit Losses
Total securitization trusts	$	1,060,797	$	208,628	$	801,216	$	182,991

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Certain cash flows received from securitization trusts accounted for as sales for the dates indicated were as follows (in thousands):

	For the three months ended								For the nine months ended
	September 30, 2012				September 30, 2011				September 30, 2012				September 30, 2011
	Servicing Fees Received		Loan Repurchases		Servicing Fees Received		Loan Repurchases		Servicing Fees Received		Loan Repurchases		Servicing Fees Received		Loan Repurchases
Total securitization trusts	$	6,317	$	—	$	5,870	$	—	$	22,149	$	—	$	21,221	$	—

4. Consolidated Statement of Cash Flows-Supplemental Disclosure

Total interest paid for the nine months ended September 30, 2012 and 2011 was approximately $78.2 million and $61.8 million, respectively. Income taxes paid for the nine months ended September 30, 2012 was $18.2 million. There were no income taxes paid for the nine months ended September 30, 2011.

5. Accounts Receivable

Accounts receivable consist primarily of accrued interest receivable on mortgage loans and securitizations, accrued servicing fees, and advances made to unconsolidated securitization trusts, as required under various servicing agreements related to delinquent loans, which are ultimately paid back to Nationstar from such trusts and third parties.

Accounts receivable consist of the following (in thousands):

	September 30, 2012		December 31, 2011
Delinquent interest advances	$	1,508,429	$	213,737
Corporate and escrow advances	1,159,711		299,946
Accrued servicing fees	94,214		20,865
Reverse mortgage	26,240		—
Receivables from trusts	13,175		4,664
Accrued interest	3,942		1,512
Insurance deposits	1,750		1,750
Other	45,524		19,826
Total accounts receivable	$	2,852,985	$	562,300

6. Mortgage Loans Held for Sale and Investment

Mortgage loans held for sale

Nationstar maintains a strategy of originating mortgage loan products primarily for the purpose of selling to GSEs or other third party investors in the secondary market. Generally, all newly originated mortgage loans held for sale are delivered to third-party purchasers or securitized shortly after origination.

Nationstar has elected to measure newly originated prime residential mortgage loans held for sale at fair value, as permitted under ASC 825, Financial Instruments. Nationstar estimates fair value by evaluating a variety of market indicators, including recent trades and outstanding commitments, calculated on an aggregate basis (see Note 14 – Fair Value Measurements).

Mortgage loans held for sale consist of the following (in thousands):

	September 30, 2012		December 31, 2011
Mortgage loans held for sale – unpaid principal balance	$	668,345	$	442,596
Mark-to-market adjustment	34,869		16,030
Total mortgage loans held for sale	$	703,214	$	458,626

We had no mortgage loans held for sale on a nonaccrual status at September 30, 2012 or December 31, 2011.

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A reconciliation of the changes in mortgage loans held for sale to the amounts presented in the consolidated statements of cash flows for the dates indicated is presented in the following table (in thousands):

For the nine months ended September 30,	2012			2011
Mortgage loans held for sale – beginning balance	$	458,626		$	369,617
Mortgage loans originated and purchased, net of fees	4,814,018			2,285,558
Cost of loans sold, net of fees	(4,606,909		)	(2,287,430		)
Principal payments received on mortgage loans held for sale and other changes	38,935			10,475
Transfer of mortgage loans held for sale to held for investment	(1,456		)	(288		)
Mortgage loans held for sale – ending balance	$	703,214		$	377,932

Mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net

Mortgage loans held for investment, subject to nonrecourse debt – legacy assets principally consist of nonconforming or subprime mortgage loans securitized which serve as collateral for the issued debt. These loans were transferred on October 1, 2009 from mortgage loans held for sale at fair value on the transfer date, as determined by the present value of expected future cash flows, with no valuation allowance recorded. The difference between the undiscounted cash flows expected and the investment in the loan is recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at transfer are not recognized as a yield adjustment or as a loss accrual or a valuation allowance. Increases in expected cash flows subsequent to the transfer are recognized prospectively through adjustment of the yield on the loans over the remaining life. Decreases in expected cash flows subsequent to transfer are recognized as a valuation allowance.

An allowance for loan losses is established by recording a provision for loan losses in the consolidated statement of operations when management believes a loss has occurred on a loan held for investment. When management determines that a loan held for investment is partially or fully uncollectible, the estimated loss is charged against the allowance for loan losses. Recoveries on losses previously charged to the allowance are credited to the allowance at the time the recovery is collected.

Nationstar accounts for the loans that were transferred to held for investment from held for sale during October 2009 in a manner similar to ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. At the date of transfer, management evaluated such loans to determine whether there was evidence of deterioration of credit quality since acquisition and if it was probable that Nationstar would be unable to collect all amounts due according to the loan’s contractual terms. The transferred loans were aggregated into separate pools of loans based on common risk characteristics (loan delinquency). Nationstar considers expected prepayments, and estimates the amount and timing of undiscounted expected principal, interest, and other cash flows for each aggregated pool of loans. The determination of expected cash flows utilizes internal inputs such as prepayment speeds and credit losses. These internal inputs require the use of judgment and can have a significant impact on the accretion of income and/or valuation allowance. Nationstar determines the excess of the pool’s scheduled contractual principal and contractual interest payments over all cash flows expected as of the transfer date as an amount that should not be accreted (nonaccretable difference). The remaining amount is accreted into interest income over the remaining life of the pool of loans (accretable yield).

Over the life of the transferred loans, management continues to estimate cash flows expected to be collected. Nationstar evaluates at the balance sheet date whether the present value of the loans determined using the effective interest rates has decreased, and if so, records an allowance for loan loss. The present value of any subsequent increase in the transferred loans cash flows expected to be collected is used first to reverse any existing allowance for loan loss related to such loans. Any remaining increase in cash flows expected to be collected are used to adjust the amount of accretable yield recognized on a prospective basis over the remaining life of the loans.

Nationstar accounts for its allowance for loan losses for all other mortgage loans held for investment in accordance with ASC 450-20, Loss Contingencies. The allowance for loan losses represents management’s best estimate of probable losses inherent in the loans held for investment portfolio. Mortgage loans held for investment portfolio is comprised primarily of large groups of homogeneous residential mortgage loans. These loans are evaluated based on the loan’s present delinquency status. The entire allowance is available to absorb probable credit losses from the entire held for investment portfolio.

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Mortgage loans held for investment, subject to nonrecourse debt—legacy assets, net as of the dates indicated include (in thousands):

	September 30, 2012			December 31, 2011
Mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net – unpaid principal balance	$	361,474		$	375,720
Transfer discount
Accretable	(20,828		)	(22,392		)
Non-accretable	(94,823		)	(104,024		)
Allowance for loan losses	(7,645)			(5,824		)
Total mortgage loans held for investment, subject to nonrecourse debt -legacy assets, net	$	238,178		$	243,480

The changes in accretable yield on loans transferred to mortgage loans held for investment, subject to nonrecourse debt- legacy assets were as follows (in thousands):

	Nine months ended September 30, 2012			Year ended December 31, 2011
Accretable Yield
Balance at the beginning of the period	$	22,392		$	25,219
Additions	—			—
Accretion	(2,728		)	(4,131		)
Reclassifications from (to) nonaccretable discount	1,164			1,304
Disposals	—			—
Balance at the end of the period	$	20,828		$	22,392

Nationstar may periodically modify the terms of any outstanding mortgage loans held for investment, subject to nonrecourse debt-legacy assets, net for loans that are either in default or in imminent default. Modifications often involve reduced payments by borrowers, modification of the original terms of the mortgage loans, forgiveness of debt and/or increased servicing advances. As a result of the volume of modification agreements entered into, the estimated average outstanding life in this pool of mortgage loans has been extended. Nationstar records interest income on the transferred loans on a level-yield method. To maintain a level-yield on these transferred loans over the estimated extended life, Nationstar reclassified approximately $1.2 million for the nine months ended September 30, 2012, and $1.3 million for the year ended December 31, 2011 from nonaccretable difference. Furthermore, Nationstar considers the decrease in principal, interest, and other cash flows expected to be collected arising from the transferred loans as an impairment, and Nationstar recorded provisions for loan losses of $1.5 million and $0.9 million for the three months ended September 30, 2012 and 2011 on the transferred loans to reflect this impairment. Nationstar recorded provisions for loan losses of $2.0 million for the nine months ended September 30, 2011, and $3.2 million for the nine months ended September 30, 2012 on the transferred loans to reflect this impairment.

Nationstar collectively evaluates all mortgage loans held for investment, subject to nonrecourse debt-legacy assets for impairment. The changes in the allowance for loan losses on mortgage loans held for investment, subject to nonrecourse debt-legacy assets, net were as follows (in thousands) for the dates indicated:

	Nine months ended September 30, 2012
	Performing			Non-Performing			Total
Balance at the beginning of the period	$	1,641		$	4,183		$	5,824
Provision for loan losses	2,249			904			3,153
Charge-offs	(978		)	(354		)	(1,332		)
Balance at the end of the period	$	2,912		$	4,733		$	7,645
Ending balance – collectively evaluated for impairment	$	278,367		$	83,107		$	361,474

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	Year ended December 31, 2011
	Performing			Non-Performing			Total
Balance at the beginning of the period	$	829		$	2,469		$	3,298
Provision for loan losses	1,346			2,191			3,537
Recoveries on loans previously charged-off	—			—			—
Charge-offs	(534		)	(477		)	(1,011		)
Balance at the end of the period	$	1,641		$	4,183		$	5,824
Ending balance – Collectively evaluated for impairment	$	283,770		$	91,950		$	375,720

Loan delinquency and loan-to-value ratio (LTV) are common credit quality indicators that Nationstar monitors and utilizes in its evaluation of the adequacy of the allowance for loan losses, of which the primary indicator of credit quality is loan delinquency. LTV refers to the ratio of comparing the loan’s unpaid principal balance to the property’s collateral value. Loan delinquencies and unpaid principal balances are updated monthly based upon collection activity. Collateral values are updated from third-party providers on a periodic basis. For an event requiring a decision based at least in part on the collateral value, Nationstar takes its last known value provided by a third party and then adjusts the value based on the applicable home price index.

The following tables provide the outstanding unpaid principal balance of Nationstar’s mortgage loans held for investment by credit quality indicators as of dates indicated.

	September 30, 2012		December 31, 2011
	(in thousands)
Credit Quality by Delinquency Status
Performing	$	278,367	$	283,770
Non-Performing	83,107		91,950
Total	$	361,474	$	375,720
Credit Quality by Loan-to-Value Ratio
Less than 60	$	40,060	$	42,438
Less than 70 and more than 60	15,817		15,968
Less than 80 and more than 70	22,627		25,190
Less than 90 and more than 80	28,863		32,620
Less than 100 and more than 90	32,804		33,708
Greater than 100	221,303		225,796
Total	$	361,474	$	375,720

Performing loans refer to loans that are less than 90 days delinquent. Non-performing loans refer to loans that are greater than 90 days delinquent.

Reverse mortgage interests

Reverse mortgage interests consists of fees paid to taxing authorities for borrowers’ unpaid taxes and insurance, and payments made to borrowers for line of credit draws on the reverse mortgages. These advances include due and payable advances, which are recovered upon the sale of the subject property, and defaulted advances that can be securitized and sold. As of September 30, 2012, Nationstar had $452.9 million in outstanding reverse mortgage interests.

Nationstar accounts for outstanding and future reverse mortgage interests as financing receivables in accordance with ASC 310, Receivables. Interest and other unpaid taxes and fees are accrued monthly and capitalized as part of the outstanding advance balance. When Nationstar determines that a loss on the advance balance is probable and that the carrying balance may be partially or fully uncollectible, an allowance for loan loss is established by recording a provision for loan losses in the consolidated statement of operations.

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7. Mortgage Servicing Rights (MSRs)

MSRs at fair value

Nationstar recognizes MSRs related to all existing residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting and for which the servicing rights are retained. Additionally, Nationstar may acquire the rights to service residential mortgage loans that do not relate to assets transferred by Nationstar through the purchase of these rights from third parties.

Nationstar identifies MSRs related to all existing forward residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting or through the acquisition of rights to service forward residential mortgage loans that do not relate to assets transferred by Nationstar through the purchase of these rights from third parties as a class of MSR. Nationstar applies fair value accounting to this class of MSRs, with all changes in fair value recorded as charges or credits to servicing fee income in accordance with ASC 860-50, Servicing Assets and Liabilities.

MSRs arise from contractual agreements between Nationstar and investors in mortgage securities and mortgage loans. Nationstar records MSR assets when it sells loans on a servicing-retained basis, at the time of securitization or through the acquisition or assumption of the right to service a financial asset. Under these contracts, Nationstar performs loan servicing functions in exchange for fees and other remuneration.

The fair value of the MSRs is based upon the present value of the expected future cash flows related to servicing these loans. Nationstar receives a base servicing fee ranging from 0.25% to 0.50% annually on the remaining outstanding principal balances of the loans. The servicing fees are collected from investors. Nationstar determines the fair value of the MSRs by the use of a cash flow model that incorporates prepayment speeds, discount rate, and other assumptions (including servicing costs) that management believes are consistent with the assumptions other major market participants use in valuing the MSRs. Certain of the forward loans underlying the MSRs are prime agency and government conforming residential forward mortgage loans and as such are more interest rate sensitive whereas the remaining MSRs are more credit sensitive. The nature of the forward loans underlying the MSRs affects the assumptions that management believes other major market participants use in valuing the MSRs. Nationstar obtains third-party valuations for a portion of its MSRs to assess the reasonableness of the fair value calculated by the cash flow model.

Certain of the forward loans underlying the mortgage servicing rights carried at fair value that are owned by Nationstar are credit sensitive in nature and the value of these mortgage servicing rights are more likely to be affected from changes in credit losses than from interest rate movement. The remaining forward loans underlying Nationstar’s MSRs held at fair value are prime agency and government conforming residential mortgage loans for which the value of these MSRs are more likely to be affected from interest rate movement than changes in credit losses.

Nationstar used the following weighted average assumptions in estimating the fair value of MSRs for the dates indicated:

Credit Sensitive MSRs	September 30, 2012		December 31, 2011
Discount rate	17.12	%	25.71	%
Total prepayment speeds	20.74	%	15.80	%
Expected weighted-average life	4.49 years		5.15 years
Credit losses	21.35	%	35.42	%
Interest Rate Sensitive MSRs	September 30, 2012		December 31, 2011
Discount rate	10.62	%	10.46	%
Total prepayment speeds	18.63	%	19.02	%
Expected weighted-average life	4.79 years		5.04 years
Credit losses	9.59	%	9.73	%

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The activity of MSRs carried at fair value is as follows for the dates indicated (in thousands):

	Nine months ended September 30, 2012			Year ended December 31, 2011
Fair value at the beginning of the period	$	251,050		$	145,062
Additions:
Servicing resulting from transfers of financial assets	37,578			36,474
Recognition of servicing assets from derecognition of variable interest entities	—			5,714
Purchases of servicing assets	346,874			102,800
Changes in fair value:
Due to changes in valuation inputs or assumptions used in the valuation model	6,669			(14,207		)
Other changes in fair value	(49,479		)	(24,793		)
Fair value at the end of the period	$	592,692		$	251,050
Unpaid principal balance of forward loans serviced for others
Credit sensitive loans	$	106,076,630		$	32,408,623
Interest sensitive loans	14,776,208			11,844,831
Total owned loans	$	120,852,838		$	44,253,454

The following table shows the hypothetical effect on the fair value of the MSRs using various unfavorable variations of the expected levels of certain key assumptions used in valuing these assets at September 30, 2012 and December 31, 2011 (in thousands):

	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
September 30, 2012
Mortgage servicing rights	$	(17,284	)	$	(32,796	)	$	(67,848	)	$	(137,087	)	$	(50,922	)	$	(107,768	)
December 31, 2011
Mortgage servicing rights	$	(6,640	)	$	(12,929	)	$	(13,281	)	$	(25,215	)	$	(5,081	)	$	(10,944	)

These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a 10% variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors (e.g., a decrease in total prepayment speeds may result in an increase in credit losses), which could impact the above hypothetical effects.

MSRs at amortized cost

Additionally, Nationstar has acquired servicing rights for reverse mortgage loans. For this class of servicing rights, Nationstar applies the amortization method (i.e., lower of cost or market) with the capitalized cost of the MSRs amortized in proportion and over the period of the estimated net future servicing income and recognized as an adjustment to servicing fee income. The expected period of the estimated net servicing income is based, in part, on the expected prepayment period of the underlying reverse mortgages. This class of MSRs is periodically evaluated for impairment. For purposes of measuring impairment, MSRs are stratified based on predominant risk characteristics of the underlying serviced loans. These risk characteristics include loan type (fixed or adjustable rate), term and interest rate. Impairment, if any, represents the excess of amortized cost of an individual stratum over its estimated fair value and is recognized through a valuation allowance.

As of September 30, 2012, Nationstar owns the right to service certain reverse mortgage MSRs with an unpaid principal balance of $27.3 billion. The initial carrying amount of these MSRs is based on the relative fair value of the purchased assets

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and liabilities including reverse mortgage interests. These MSRs are subsequently accounted for using the amortization method. Amortization / accretion is recorded as service fee income on the statement of operations and comprehensive income. Nationstar utilizes a variety of assumptions in assessing the fair value of its servicing assets or liabilities, with the primary assumptions including discount rates and the expected weighted average life. At September 30, 2012, no impairment was identified. Interest and servicing fees collected on reverse mortgage interests are included as a component of either interest or service fee income.

The activity of MSRs carried at amortized cost is as follows for the date indicated (in thousands):

	Nine months Ended
	September 30, 2012
	Assets			Liabilities
Activity of MSRs at amortized cost
Balance at the beginning of the period	$	—		$	—
Additions:
Purchase /Assumptions of servicing rights/obligations	9,000			86,553
Deductions:
Amortization/Accretion	(964		)	(4,240		)
Balance at end of the period	$	8,036		$	82,313

Subserviced loans

In addition to the two classes of MSRs that Nationstar services for others, Nationstar also subservices loans on behalf of owners of MSRs or loans for a fee. Nationstar has no recorded value for its subservicing arrangements. At September 30, 2012 and December 31, 2011, the unpaid principal balances under subservicing arrangements were $46.2 billion and $53.7 billion, respectively.

Total servicing and ancillary fees from Nationstar’s servicing portfolio (including subservicing) of residential mortgage loans are presented in the following table for the periods indicated (in thousands):

	For the three months ended September 30,				For the nine months ended September 30,
	2012		2011		2012		2011
Servicing fees	$	95,281	$	48,141	$	223,255	$	133,338
Ancillary fees	35,355		25,772		84,893		62,848
Total servicing and ancillary fees	$	130,636	$	73,913	$	308,148	$	196,186

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8. Other Assets

Other assets consisted of the following (in thousands):

	September 30, 2012		December 31, 2011
Interest rate locks (see Note 10)	$	112,628	$	11,302
Deposit in escrow for ResCap acquisition	72,000		—
Loans subject to repurchase right from Ginnie Mae	58,534		35,735
Deferred financing costs	43,501		12,059
Margin call deposits	29,784		4,518
Equity method investment	8,994		6,493
Prepaid expenses	6,445		4,286
Unsecured loans	1,803		1,827
Deposits pending on mortgage servicing rights acquisitions	1,798		28,904
Other	2,872		1,057
Total other assets	$	338,359	$	106,181

In conjunction with Nationstar's definitive agreement to acquire certain assets from Residential Capital, LLC (see Note 23), Nationstar was required to place in escrow $72.0 million toward the purchase price. Also, as a part of the transaction, Newcastle Investment Corp. (Newcastle) remitted $25.2 million to Nationstar toward the escrow payment. Such amount has been recorded in payables and accrued liabilities in the Company's consolidated balance sheet and would be repaid to Newcastle in the event that the agreement is not consummated.

Deposits pending on mortgage servicing rights acquisitions primarily consist of amounts transferred to third parties for the future acquisition of mortgage servicing. In December 2011, Nationstar entered into an agreement with a financial institution to acquire the rights to service reverse mortgages with an unpaid principal balance of approximately $9.5 billion, of which the underlying reverse mortgages are currently owned by an unaffiliated GSE. The purchase of these servicing rights was completed upon the approval of the GSE which was received in June 2012 . Upon execution of the purchase, Nationstar assumed responsibility for advance obligations on the underlying reverse mortgage loans. Nationstar paid $9.0 million for the purchase of these servicing rights which had previously been deposited with the financial institution. Also, as of December 31, 2011, Nationstar had placed in escrow $17.9 million relating to the purchase of the mortgage servicing rights and related outstanding advance balances with the same financial institution. Such purchase was completed in January 2012 and these escrow amounts were released. In addition, Nationstar has entered into separate agreements to purchase forward mortgage servicing rights. These amounts are carried as deposits on acquired servicing rights acquisitions until the underlying forward residential mortgage loan balances are transferred to Nationstar. Nationstar has deposits with a counterparty for servicing rights on forward mortgages for $1.8 million as of September 30, 2012 that are substantially expected to be originated and transferred to Nationstar during the fourth quarter of 2012, and $2.0 million as of December 31, 2011 that were originated and transferred to Nationstar during the first quarter of 2012.

For certain loans sold to GNMA (Ginnie Mae), Nationstar as the servicer has the unilateral right to repurchase without Ginnie Mae’s prior authorization any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. Once Nationstar has the unilateral right to repurchase the delinquent loan, Nationstar has effectively regained control over the loan, and under GAAP, must re-recognize the loan on its balance sheet and establish a corresponding repurchase liability regardless of Nationstar’s intention to repurchase the loan. Nationstar’s re-recognized loans included in other assets and the corresponding liability in payables and accrued liabilities was $58.5 million at September 30, 2012 and $35.7 million at December 31, 2011.

In March 2011, Nationstar acquired a 22% interest in ANC Acquisition LLC (ANC) for an initial investment of $6.6 million. ANC is the parent company of National Real Estate Information Services, LP (NREIS), a real estate services company. In March 2012, FIF contributed its 13% investment in ANC to Nationstar, increasing the overall investment to 35%. As Nationstar is able to exercise significant influence, but not control, over the policies and procedures of the entity, and Nationstar owns less than 50% of the voting interests, Nationstar applies the equity method of accounting. NREIS, an ancillary real estate services and vendor management company, offers comprehensive settlement and property valuation services for both originations and default management channels. Direct or indirect product offerings include title insurance agency, tax searches, flood certification, default valuations, full appraisals and broker price opinions.

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A summary of the assets, liabilities, and operations of ANC as of the following periods are presented in the following tables (in thousands):

							September 30, 2012			December 31, 2011
ASSETS
Cash							$	3,259		$	2,486
Accounts receivable							3,837			5,296
Receivables from affiliates							388			92
Equity method investments							1,482			2,788
Property and equipment, net							2,092			1,995
Goodwill and other intangible assets							33,548			33,876
Other assets							820			590
Total assets							$	45,426		$	47,123
LIABILITIES
Notes payable							$	4,724		$	4,724
Payables and accrued liabilities							16,049			13,236
Total liabilities							$	20,773		$	17,960
	Three months ended September 30,						Nine months ended September 30,			From Acquisition through September 30,
	2012			2011			2012			2011
REVENUES
Sales	$	12,917		$	13,181		$	41,296		$	25,382
Cost of sales	(10,447		)	(10,871		)	(31,878		)	(21,593		)
Net sales revenues	2,470			2,310			9,418			3,789
OTHER (EXPENSE)/INCOME
Operating costs	(4,841		)	(5,054		)	(13,903		)	(9,004		)
Income from equity method investments	675			771			1,930			1,176
Depreciation and amortization	(377		)	(180		)	(1,138		)	(359		)
Other (expense)/income	(42		)	136			(111		)	39
Gain/(loss) from discontinued operations	21			(27		)	(14		)	(54		)
Total expense	(4,564		)	(4,354		)	(13,236		)	(8,202		)
Net loss	$	(2,094	)	$	(2,044	)	$	(3,818	)	$	(4,413	)

Nationstar recorded a net charge to earnings related to loss on equity method investments of $0.7 million and $1.3 millionfor the three and nine months endedSeptember 30, 2012, respectively, a $0.5 million loss related to the three months ended September 30, 2011 and a $1.0 million loss related to the period from acquisition through September 30, 2011, which is included as a component of other fee income in Nationstar’s consolidated statement of operations.

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9. Payables and Accrued Liabilities

Payables and accrued liabilities consist of the following (in thousands):

	September 30, 2012		December 31, 2011
MSR purchases payable including advances	$	310,609	$	8,204
Mortgage insurance premiums and reserves	70,344		19,162
Loans subject to repurchase from Ginnie Mae	58,534		35,735
Payables to securitization trusts	37,607		10,665
Reverse mortgage payables	46,000		—
Accrued bonus and payroll	43,511		21,236
Accrued interest	39,902		10,225
Government sponsored entities	26,797		18,728
Deposit from MSR co-investor for ResCap	25,200		—
Taxes	14,544		154
Repurchase reserves	15,055		10,026
Legal and professional fees	12,076		5,931
Cancelled lease reserves	7,319		9,160
Servicing Payables	6,628		—
Other	48,142		34,563
Total payables and accrued liabilities	$	762,268	$	183,789

10. Derivative Financial Instruments

Nationstar enters into interest rate lock commitments (IRLCs) with prospective borrowers. These commitments are carried at fair value in accordance with ASC 815, Derivatives and Hedging. ASC 815 clarifies that the expected net future cash flows related to the associated servicing of a loan should be included in the measurement of all written loan commitments that are accounted for at fair value through earnings. The estimated fair values of IRLCs are based on quoted market values and are recorded in other assets in the consolidated balance sheets. The initial and subsequent changes in the value of IRLCs are a component of gain on mortgage loans held for sale.

Nationstar actively manages the risk profiles of its IRLCs and mortgage loans held for sale on a daily basis. To manage the price risk associated with IRLCs, Nationstar enters into forward sales of MBS in an amount equal to the portion of the IRLC expected to close, assuming no change in mortgage interest rates. In addition, to manage the interest rate risk associated with mortgage loans held for sale, Nationstar enters into forward sale commitments to deliver mortgage loan inventory to investors. The estimated fair values of forward sales of MBS and forward sale commitments are based on quoted market values and are recorded as a component of other assets or liabilities and mortgage loans held for sale, respectively, in the consolidated balance sheets. The initial and subsequent changes in value on forward sales of MBS and forward sale commitments are a component of gain on mortgage loans held for sale.

Periodically, Nationstar enters into interest rate swap agreements to hedge the interest payment on the warehouse debt. These interest rate swap agreements generally require Nationstar to pay a fixed interest rate and receive a variable interest rate based on LIBOR. Unless designated as an accounting hedge, Nationstar records losses on interest rate swaps as a component of gain/(loss) on interest rate swaps and caps in Nationstar’s consolidated statements of operations. Unrealized losses on undesignated interest rate derivatives are separately disclosed under operating activities in the consolidated statements of cash flows. Interest rate swaps designated as cash flow hedges under ASC 815 are recorded at fair value on the Company’s consolidated balance sheet, with any changes in fair value related to the effective portion of the hedge being recorded as an adjustment to other comprehensive income. To qualify as a cash flow hedge, the hedge must be highly effective at reducing the risk associated with the exposure being hedged and must be formally designated at hedge inception. Nationstar considers a hedge to be highly effective if the change in fair value of the derivative hedging instrument is within 80% to 125% of the change in the fair value of the hedged item attributable to the hedged risk. Ineffective portions of the cash flow hedge are reflected in earnings as they occur as a component of interest expense.

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Historically, Nationstar has entered into interest rate swap agreements to hedge the interest payments associated with its outstanding floating rate financing servicer advance facilities. Prior to September 30, 2012, certain of these derivatives were designated as cash flow hedges and were recorded at fair value on Nationstar's balance sheet, with any change in fair value being recorded as an adjustment to other comprehensive income. On September 30, 2012, the Company dedesignated the remainder of the interest rate swap agreements, with any further changes in fair value being recorded as a charge to gain or loss in interest rate swaps and caps in Nationstar's consolidated statement of operations.

In conjunction with the Reorganization, FIF contributed outstanding interest rate swaps in March 2012 to Nationstar. These interest rate swaps on ABS debt generally require Nationstar to pay a fixed interest rate and receive a variable interest rate based on LIBOR. The outstanding interest rate swaps have not been designated as accounting hedges during the nine months ended September 30, 2012. Any changes in fair value are recorded as a component of gains or losses on interest rate swaps and caps in Nationstar’s consolidated statement of operations.

Associated with the Company's derivatives is $29.8 million in margin call deposits recorded in other assets on the Company's balance sheet as of September 30, 2012.

The following table shows the effect of derivative financial instruments that were designated as accounting hedges for the three and nine months ended September 30, 2012 and 2011.

The Effect of Derivative Instruments on the Statement of Operations

(in thousands)

Derivatives in ASC 815 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of  Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
For the three months ended September 30, 2012
Interest Rate Swap	$	—		Interest Expense	$	—	Interest Expense	$	423
For the three months ended September 30, 2011
Interest Rate Swap	$	—		Interest Expense	$	—	Interest Expense	$	617
For the nine months ended September 30, 2012
Interest Rate Swap	$	—		Interest Expense	$	—	Interest Expense	$	—
For the nine months ended September 30, 2011
Interest Rate Swap	$	(1,071	)	Interest Expense	$	582	Interest Expense	$	2,032

As of September 30, 2012, there was no credit risk related to contingent features in any of the Company's derivative agreements.

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The following tables provide the outstanding notional balances and fair values of outstanding positions for the dates indicated, and recorded gains/(losses) during the periods indicated (in thousands):

	Expiration Dates	Outstanding Notional		Fair Value		Recorded Gains / (Losses)
For the nine months ended September 30, 2012
MORTGAGE LOANS HELD FOR SALE
Loan sale commitments	2012	$	4,175	$	212	$	(422	)
OTHER ASSETS
IRLCs	2012	4,353,327		112,628		101,326
LIABILITIES
Interest rate swaps and caps	2012-2015	648,940		7,041		(501		)
Interest rate swaps on ABS debt (1)	2012-2017	894,363		1,632		(1,201		)
Forward MBS trades	2012	2,838,185		29,162		(23,332		)
For the year ending December 31, 2011
MORTGAGE LOANS HELD FOR SALE
Loan sale commitments	2012	$	28,047	$	634	$	592
OTHER ASSETS
IRLCs	2012	736,377		11,302		6,598
LIABILITIES
Interest rate swaps and caps	2012-2015	193,500		6,540		1,261
Forward MBS trades	2012	691,725		5,830		(9,792		)
Interest rate swap, subject to ABS nonrecourse debt (2)	—	—		—		(8,058		)

(1) In March 2012, Nationstar received interest rate swaps from FIF as a part of the reorganization.

(2) In December 2011, Nationstar sold its remaining variable interest in a securitization trust that had been a consolidated VIE since January 1, 2010 and deconsolidated the VIE. Upon deconsolidation of this VIE, Nationstar derecognized the related ABS nonrecourse debt and therefore the underlying interest rate swap, subject to ABS nonrecourse debt.

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11. Indebtedness

Notes Payable

A summary of the balances of notes payable for the dates indicated is presented below (in thousands).

	September 30, 2012				December 31, 2011
	Outstanding		Collateral Pledged		Outstanding		Collateral Pledged
Servicing Segment Notes Payable
MBS advance financing facility	$	178,455	$	197,934	$	179,904	$	182,096
Securities repurchase facility (2011)	11,774		55,603		11,774		55,603
2010-ABS advance financing facility	189,038		228,898		219,563		249,499
2011-1 Agency advance financing facility	159,945		181,803		25,011		28,811
MSR note	6,015		13,296		10,180		16,230
2012-AW Agency advance financing facility	100,000		124,551		—		—
2012-C ABS advance financing facility	562,366		692,635		—		—
2012-R ABS advance financing facility	328,793		392,360		—		—
2012-W ABS advance financing facility	367,797		454,402		—		—
Reverse participations financing facility	18,801		21,298		—		—
Originations Segment Notes Payable
$375 million warehouse facility	195,703		211,820		46,810		51,040
$150 million warehouse facility	155,323		162,705		251,722		265,083
$250 million warehouse facility (2011)	141,204		147,941		7,310		7,672
$100 million warehouse facility (2009)	87,659		91,311		16,047		16,715
ASAP+ facility	29,443		28,800		104,858		104,006
Total notes payable	$	2,532,316	$	3,005,357	$	873,179	$	976,755

Servicing Segment Notes Payable

MBS advance financing facility - Nationstar has a one-year committed facility agreement with a GSE, under which Nationstar may transfer to the GSE certain servicing advance receivables against the transfer of funds by the GSE. This facility has the capacity to purchase up to $325 million in eligible servicing advance receivables. The interest rate is based on LIBOR plus a spread of 2.50%. The maturity date of this facility is currently December 2012.

Securities repurchase facility (2011) - In December 2011, Nationstar entered into a securities repurchase facility with a financial services company that was amended in February 2012 to extend the expiration to February 22, 2013. The MRA states that Nationstar may from time to time transfer to the financial services company eligible securities against the transfer of funds by the financial services company, with a simultaneous agreement by the financial services company to transfer such securities to Nationstar at a certain date, or on demand by Nationstar, against the transfer of funds from Nationstar. Additionally, the financial services company may elect to extend the transfer date for an additional 90 days at mutually agreed upon terms. The interest rate is based on LIBOR plus a margin of 3.50%. As of September 30, 2012, Nationstar has pledged the Company’s $55.6 million outstanding retained interest in the outstanding Nonrecourse debt—Legacy Assets securitization which was structured as a financing.

2010-ABS advance financing facility - In December 2010, Nationstar executed the 2010-ABS Advance Financing Facility with a financial institution. This facility has the capacity to purchase up to $300 million of advance receivables. The interest rate is based on LIBOR plus a spread of 3.00%. This facility matures in May 2014. This debt is nonrecourse to Nationstar.

2011-1 Agency advance financing facility - In October 2011, Nationstar executed the 2011-1 Agency Advance Financing Facility with a financial institution. This facility has the capacity to borrow up to $300 million and the interest rate is based on LIBOR plus a spread ranging from 2.5% to 6.50% depending upon class of the note. In October 2012, Nationstar amended the agreement to increase the borrowing capacity to $600 million. The maturity date of this facility is October 2013. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

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MSR note - In connection with the October 2009 MSR acquisition, Nationstar executed a four-year note agreement with a GSE. As collateral for this note, Nationstar has pledged Nationstar’s rights, title, and interest in the acquired servicing portfolio. The interest rate is based on LIBOR plus 2.50%. The maturity date of this facility is October 2013.

2012-AW Agency advance financing facility - In June 2012, Nationstar executed the 2012-AW Agency Advance Financing Facility with a financial institution. This facility has the capacity to borrow up to $100 million and the interest rate is based on LIBOR plus a spread of 2.50%. The maturity date of this facility is June 2013. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

2012-C ABS advance financing facility - In June 2012, Nationstar executed the 2012-C ABS Advance Financing Facility with a financial institution. This facility has the capacity to borrow up to $600 million and the interest rate is based on LIBOR plus a spread ranging from 3.50% to 4.50%. The maturity date of this facility is June 2014. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

2012-R ABS advance financing facility - In June 2012, Nationstar executed the 2012-R ABS Advance Financing Facility with a financial institution. This facility has the capacity to borrow up to $350 million and the interest rate is based on LIBOR plus a spread ranging from 3.37% to 8.00%. The maturity date of this facility is June 2014. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

2012-W ABS advance financing facility - In June 2012, Nationstar executed the 2012-W ABS Advance Financing Facility with a financial institution. This facility has the capacity to borrow up to $450 million and the interest rate is based on LIBOR plus a spread of 3.75%. The maturity date of this facility is June 2013. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

Reverse participations and max claim buyouts financing facility - In June 2012, Nationstar executed a reverse participations and max claim buyouts financing facility with a financial institution. This facility has capacity to borrow up to $150 million and the interest rate is based on LIBOR plus a spread of 4.00%. The maturity date of this facility is June 2014. This facility is partially secured by reverse mortgage loans.

Originations Segment Notes Payable

$375M warehouse facility - In February 2010, Nationstar executed a Master Repurchase Agreement (MRA) with a financial institution, which will expire in January 2013. The MRA states that from time to time Nationstar may enter into transactions, for an aggregate amount of $375 million, in which Nationstar agrees to transfer to the same financial institution certain mortgage loans against the transfer of funds by the same financial institution, with a simultaneous agreement by the same financial institution to transfer such mortgage loans to Nationstar at a date certain, or on demand by Nationstar, against the transfer of funds from Nationstar. In June 2012, Nationstar amended the agreement to increase the borrowing capacity from $175 million to $375 million. The interest rate is based on LIBOR plus a spread ranging from 1.75% to 2.50%.

$150M warehouse facility - Nationstar has an MRA with a financial services company, which was amended in February 2012 to expire in August 2013 and reduce the committed amount from $300 million to $150 million. The MRA states that from time to time Nationstar may enter into transactions in which Nationstar agrees to transfer to the financial services company certain mortgage loans or MBS against the transfer of funds by the financial services company, with a simultaneous agreement by the financial services company to transfer such mortgage loans or MBS to Nationstar at a certain date, or on demand by Nationstar, against the transfer of funds from Nationstar. The interest rate is based on LIBOR plus a margin of 3.25%.

$250M warehouse facility (2011) - In March 2011, as amended, Nationstar executed an MRA with a financial institution, under which Nationstar may enter into transactions, for an aggregate amount of $250 million in which Nationstar agrees to transfer to the same financial institution certain mortgage loans and certain securities against the transfer of funds by the same financial institution, with a simultaneous agreement by the same financial institution to transfer such mortgage loans and securities to Nationstar at a date certain, or on demand by Nationstar, against the transfer of funds from Nationstar. The maturity is August 2013 with the interest rate based on LIBOR plus a spread of 2.25% to 3.00%, which varies based on the underlying transferred collateral.

$100M warehouse facility (2009) - In October 2009, Nationstar executed a MRA with a financial institution. This MRA states that from time to time Nationstar may enter into transactions, for an aggregate amount of $100 million, in which Nationstar agrees to transfer to the financial institution certain mortgage loans against the transfer of funds by the financial institution, with a simultaneous agreement by the financial institution to transfer such mortgage loans to Nationstar at a certain date, or on demand by Nationstar, against the transfer of funds from Nationstar. The interest rate is based on LIBOR plus a spread of 3.25%. The maturity date of this MRA with the financial institution is January 2013.

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ASAP + facility - During 2009, Nationstar began executing As Soon As Pooled Plus agreements with a GSE, under which Nationstar transfers to the GSE eligible mortgage loans that are to be pooled into the GSE MBS against the transfer of funds by the GSE. The interest rate is based on LIBOR plus a spread of 1.50%. These agreements typically have a maturity of up to 45 days.

Unsecured Senior Notes

A summary of the balances of unsecured senior notes is presented below (in thousands):

	September 30, 2012		December 31, 2011
$285 million face value, 10.875% interest rate payable semi-annually, due April 2015	$	281,307	$	280,199
$375 million face value, 9.625% interest rate payable semi-annually, due May 2019	380,366		—
$400 million face value, 7.875% interest rate payable semi-annually, due October 2020	$	400,750	$	—
Total	$	1,062,423	$	280,199

In March 2010, Nationstar completed the offering of $250.0 million of unsecured senior notes, which were issued with an issue discount of $7.0 million for net cash proceeds of $243.0 million, with a maturity date of April 2015. In December 2011, Nationstar completed an additional offering of $35.0 million of unsecured senior notes under the same indenture. The additional offering was issued with an issue discount of $0.3 million for net cash proceeds of $34.7 million. These unsecured senior notes pay interest semi-annually at an interest rate of 10.875%. These unsecured notes were issued in a private placement and were subsequently exchanged for an equal principal amount of notes registered under the Securities Act of 1933 with substantially identical terms.

In April 2012 and in July 2012, Nationstar completed an offering of $275.0 million and $100.0 million, respectively, in senior unsecured notes, the proceeds of these offerings were $269.5 million and $103.3 million respectively, with a maturity of May 2019. These unsecured senior notes pay interest semi-annually at an interest rate of 9.625%. These unsecured notes were issued in a private placement and have not been registered under the Securities Act of 1933.

In September 2012, Nationstar completed two offerings of $300.0 million and $100.0 million of senior unsecured notes, the proceeds of these offerings were $295.5 million and $99.3 million, respectively, with a maturity of October 2020. These unsecured senior notes pay interest semi-annually at an interest rate of 7.875%. These unsecured notes were issued in a private placement and have not been registered under the Securities Act of 1933.

The indentures for the unsecured senior notes contain various covenants and restrictions that limit the Company's, Nationstar's, or certain of its subsidiaries’, ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all of their assets, or enter into certain transactions with affiliates.

The expected maturities of Nationstar's senior unsecured notes based on contractual maturities are as follows (in thousands).

Year	Amount
2013	$	—
2014	—
2015	285,000
2016	—
2017	—
Thereafter	775,000
Total	$	1,060,000

Legacy Asset and Other Financing

Nonrecourse Debt–Legacy Assets

In November 2009, Nationstar completed the securitization of approximately $222 million of ABS, which was structured as a secured borrowing. This structure resulted in Nationstar carrying the securitized loans as mortgages on Nationstar’s

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consolidated balance sheet and recognizing the asset-backed certificates acquired by third parties as nonrecourse debt, totaling approximately $101.9 million and $112.5 million at September 30, 2012, and December 31, 2011, respectively. The principal and interest on these notes are paid using the cash flows from the underlying mortgage loans, which serve as collateral for the debt. The interest rate paid on the outstanding securities is 7.50%, which is subject to an available funds cap. The total outstanding principal balance on the underlying mortgage loans serving as collateral for the debt was approximately $344.2 million and $373.1 million at September 30, 2012 and December 31, 2011, respectively. Accordingly, the timing of the principal payments on this nonrecourse debt is dependent on the payments received on the underlying mortgage loans. The unpaid principal balance on the outstanding notes was $118.6 million and $130.8 million at September 30, 2012 and December 31, 2011, respectively.

Excess Spread Financing Debt at Fair Value

In conjunction with Nationstar's acquisition of certain mortgage servicing rights on various pools of residential mortgage loans (the Portfolios), Nationstar has entered into sale and assignment agreements which are treated as financings with an indirect wholly-owned subsidiary of Newcastle. Nationstar is an affiliate of Newcastle’s manager. Nationstar, in transactions accounted for as financing arrangements, sold to Newcastle the right to receive 65% of the excess cash flow generated from the Portfolios after receipt of a fixed basic servicing fee per loan.

Nationstar retains all ancillary income associated with servicing the Portfolios and 35% of the excess cash flow after receipt of the fixed basic servicing fee. Nationstar continues to be the servicer of the Portfolios and provides all servicing and advancing functions. Newcastle has no prior or ongoing obligations associated with the Portfolios.

Contemporaneous with the above, Nationstar entered into refinanced loan agreements with Newcastle. Should Nationstar refinance any loan in the Portfolios, subject to certain limitations, Nationstar will be required to transfer the new loan or a replacement loan of similar economic characteristics into the Portfolios. The new or replacement loan will be governed by the same terms set forth in the sale and assignment agreement described above.

The total carrying amount of the outstanding excess spread financing agreements was $255.5 million and $44.6 million at September 30, 2012 and December 31, 2011, respectively.

Participating Interest Financing

Participating interest financing represent the issuance of pools of Home Equity Conversion Mortgage Backed Securities (HMBS) to third-party security holders which are guaranteed by certain GSEs. Nationstar has accounted for the transfer of these advances in the related Home Equity Conversion Mortgages (HECM) loans as secured borrowings, retaining the initial Reverse mortgage interests on its balance sheet, and recording the pooled HMBS as participating interest financing liabilities on the Company’s balance sheet. Monthly cash flows generated from the HECM loans are used to service the HMBS. The interest rate is based on the underlying HMBS rate with a range of 0.53% to 7.17%. The participating interest financing was $415.4 million at September 30, 2012. There was none outstanding at December 31, 2011.

Financial Covenants

As of September 30, 2012, Nationstar was in compliance with its covenants on its borrowing arrangements and credit facilities. These covenants generally relate to Nationstar’s tangible net worth, liquidity reserves, and leverage requirements.

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12. General and Administrative Expenses

General and administrative expenses consist of the following for the dates indicated (in thousands):

	For the three months ended				For the nine months ended
	September 30, 2012		September 30, 2011		September 30, 2012		September 30, 2011
Servicing	$	13,893	$	7,106	$	50,530	$	16,101
Legal and professional fees	18,251		8,508		32,818		13,145
Depreciation and amortization	2,973		991		6,358		2,551
Equipment	2,450		1,251		5,569		3,245
Postage	2,395		1,522		5,056		3,937
Travel	2,043		871		4,730		2,383
Other	9,580		5,148		22,046		15,345
Total general and administrative expenses	$	51,585	$	25,397	$	127,107	$	56,707

13. Income Taxes

The financial statements through December 31, 2011 and for the period January 1, 2012 up to Reorganization do not include income tax expense or benefit or any current or deferred income tax assets or liabilities. Nationstar Inc.'s corporate subsidiaries were subject to income taxes prior to the Reorganization, however, income tax expense (primarily state) and related tax liabilities were not material for presentation purposes.

As a result of the Reorganization, Nationstar Inc. and its subsidiaries, including Nationstar, became a new corporate consolidated group for income tax purposes. As a result of the change in income tax status, the Company is required to record deferred taxes on the difference between book and tax bases in assets and liabilities as of the Reorganization date. The net deferred tax asset or liability is recorded through the consolidated statement of operations as a component of income tax expense. As of the Reorganization date, the Company recorded a $70.8 million deferred tax asset for net operating and other loss carryforwards inherited as a result of the Reorganization, and a $16.5 million deferred tax liability related to basis differences in Nationstar's assets and liabilities. In addition, the Company recorded a $54.3 million valuation allowance for deferred tax assets that management concluded will likely not be realized.

The Company recorded an income tax provision of $24.7 million on pretax income for the three months ended September 30, 2012. For the nine months ended September 30, 2012, income tax expense was $40.6 million.

14. Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, provides a definition of fair value, establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements. The standard applies when GAAP requires or allows assets or liabilities to be measured at fair value and, therefore, does not expand the use of fair value in any new circumstance.

ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered fair value hierarchy based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs). In addition, ASC 820 requires an entity to consider all aspects of nonperformance risk, including its own credit standing, when measuring the fair value of a liability. Under ASC 820, related disclosures are segregated for assets and liabilities measured at fair value based on the level used within the hierarchy to determine their fair values.

The following describes the methods and assumptions used by Nationstar in estimating fair values:

Cash and Cash Equivalents, Restricted Cash – The carrying amount reported in the consolidated balance sheets approximates fair value.

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Mortgage Loans Held for Sale – Nationstar originates mortgage loans in the U.S. that it intends to sell to Fannie Mae, Freddie Mac, and Ginnie Mae (collectively, the Agencies). Additionally, Nationstar holds mortgage loans that it intends to sell into the secondary markets via whole loan sales or securitizations. Nationstar measures newly originated prime residential mortgage loans held for sale at fair value.

Mortgage loans held for sale are typically pooled together and sold into certain exit markets, depending upon underlying attributes of the loan, such as agency eligibility, product type, interest rate, and credit quality. Mortgage loans held for sale are valued using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. As these prices are derived from quoted market prices, Nationstar classifies these valuations as Level 2 in the fair value disclosures.

Mortgage Loans Held for Investment, subject to nonrecourse debt – Legacy Assets – Nationstar determines the fair value of loans held for investment, subject to nonrecourse debt – Legacy Assets using internally developed valuation models. These valuation models estimate the exit price Nationstar expects to receive in the loan’s principal market. Although Nationstar utilizes and gives priority to observable market inputs such as interest rates and market spreads within these models, Nationstar typically is required to utilize internal inputs, such as prepayment speeds, credit losses, and discount rates. These internal inputs require the use of judgment by Nationstar and can have a significant impact on the determination of the loan’s fair value. As these prices are derived from a combination of internally developed valuation models and quoted market prices, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Mortgage Servicing Rights – Fair Value – Nationstar recognizes MSRs related to all existing residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting and for which the servicing rights are retained. Additionally, Nationstar may acquire the rights to service residential mortgage loans that do not relate to assets transferred by Nationstar through the purchase of these rights from third parties. Nationstar estimates the fair value of its forward MSRs using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds and discount rates. These assumptions are generated and applied based on collateral stratifications including product type, remittance type, geography, delinquency and coupon dispersion. These assumptions require the use of judgment by Nationstar and can have a significant impact on the determination of the MSR’s fair value. Periodically, management obtains third party valuations of a portion of the portfolio to assess the reasonableness of the fair value calculations provided by the cash flow model. Because of the nature of the valuation inputs, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Reverse Mortgage Interests – Nationstar’s reverse mortgage advances consist of fees paid to taxing authorities for borrowers' unpaid taxes and insurance, and payments made to borrowers for line of credit draws on reverse mortgages. These advances include due and payable advances, which are recovered upon the foreclosure and sale of the subject property, and defaulted advances that can be securitized. Nationstar estimates the fair value using a market approach by utilizing the fair value of securities backed by similar advances on reverse mortgage loans, adjusted for certain factors. Nationstar classifies these valuations as Level 2 in the fair value disclosures.

REO – Nationstar determines the fair value of REO properties through the use of third-party appraisals and broker price opinions, adjusted for estimated selling costs. Such estimated selling costs include realtor fees and other anticipated closing costs. These values are adjusted to take into account factors that could cause the actual liquidation value of foreclosed properties to be different than the appraised values. This valuation adjustment is based upon Nationstar’s historical experience with REO. REO is classified as Level 3 in the fair value disclosures.

Derivative Instruments – Nationstar enters into a variety of derivative financial instruments as part of its hedging strategy. The majority of these derivatives are exchange-traded or traded within highly active dealer markets. In order to determine the fair value of these instruments, Nationstar utilizes the exchange price or dealer market price for the particular derivative contract; therefore, these contracts are classified as Level 2. In addition, Nationstar enters into IRLCs with prospective borrowers. These commitments are carried at fair value based on fair value of related mortgage loans which is based on observable market data. Nationstar adjusts the outstanding IRLCs with prospective borrowers based on an expectation that it will be exercised and the loan will be funded. IRLCs are recorded in other assets in the consolidated balance sheets. These IRLCs are classified as Level 2 in the fair value disclosures.

Notes Payable – Notes payable consists of outstanding borrowing on Nationstar's warehouse and advance financing facilities. As the underlying warehouse and advance finance facilities bear interest at a rate that is periodically adjusted based on a market

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index, the carrying amount reported on the consolidated balance sheet approximates fair value. Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Unsecured Senior Notes – The fair value of unsecured senior notes is based on quoted market prices and is considered Level 1 from the market observable inputs used to determine fair value.

Nonrecourse Debt – Legacy Assets – Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. These prices are derived from a combination of internally developed valuation models and quoted market prices, and are classified as Level 3.

Excess Spread Financing – Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions at September 30, 2012 being mortgage prepayment speeds of 12.8%, average life of 4.5 years, and discount rate of 14.4%. Changes in fair value to the excess spread financing are recorded as a component of service fee income in Nationstar's consolidated statement of operations. As these prices are derived from a combination of internally developed valuation models and quoted market prices based on the value of the underlying MSRs, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Participating Interest Financing – Nationstar estimates the fair value using a market approach by utilizing the fair value of securities backed by similar participating interests in reverse mortgage loans. Nationstar classifies these valuations as Level 2 in the fair value disclosures.

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The estimated carrying amount and fair value of Nationstar’s financial instruments and other assets and liabilities measured at fair value on a recurring basis is as follows for the dates indicated (in thousands):

			September 30, 2012
			Recurring Fair Value Measurements
	Total Fair Value		Level 1		Level 2		Level 3
ASSETS
Mortgage loans held for sale(1)	$	703,214	$	—	$	703,214	$	—
Mortgage servicing rights – fair value(1)	592,692		—		—		592,692
Other assets:
IRLCs	112,628		—		112,628		—
Total assets	$	1,408,534	$	—	$	815,842	$	592,692
LIABILITIES
Derivative financial instruments
Interest rate swaps and caps	$	7,041	$	—	$	7,041	$	—
Interest rate swaps on ABS debt	1,632		—		1,632		—
Forward MBS trades	29,162		—		29,162		—
Excess spread financing (at fair value)	255,484		—		—		255,484
Total liabilities	$	293,319	$	—	$	37,835	$	255,484
			December 31, 2011
			Recurring Fair Value Measurements
	Total Fair Value		Level 1		Level 2		Level 3
ASSETS
Mortgage loans held for sale(1)	$	458,626	$	—	$	458,626	$	—
Mortgage servicing rights – fair value(1)	251,050		—		—		251,050
Other assets:
IRLCs	11,302		—		11,302		—
Total assets	$	720,978	$	—	$	469,928	$	251,050
LIABILITIES
Derivative financial instruments
Interest rate swaps and caps	$	6,540	$	—	$	6,540	$	—
Forward MBS trades	5,830		—		5,830		—
Excess spread financing (at fair value)	44,595		—		—		44,595
Total liabilities	$	56,965	$	—	$	12,370	$	44,595

(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.

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The table below presents a reconciliation for all of Nationstar’s Level 3 assets and liabilities measured at fair value on a recurring basis for the dates indicated (in thousands):

	ASSETS			LIABILITIES
For the three months ended September 30, 2012	Mortgage servicing rights			Excess spread financing
Beginning balance	$	596,462		$	266,693
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Total gains or losses
Included in earnings	(22,430		)	(2,213		)
Included in other comprehensive income	—			—
Purchases, issuances, sales and settlements
Purchases	5,210			—
Issuances	13,450			(1,522		)
Sales	—			—
Settlements	—			(7,474		)
Ending balance	$	592,692		$	255,484

	ASSETS			LIABILITIES
For the nine months ended September 30, 2012	Mortgage servicing rights			Excess spread financing
Beginning balance	$	251,050		$	44,595
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Total gains or losses
Included in earnings	(42,810		)	5,050
Included in other comprehensive income	—			—
Purchases, issuances, sales and settlements
Purchases	346,874			—
Issuances	37,578			218,820
Sales	—			—
Settlements	—			(12,981		)
Ending balance	$	592,692		$	255,484

	ASSETS			LIABILITIES
For the year ending December 31, 2011	Mortgage servicing rights			Excess spread financing
Beginning balance	$	145,062		$	—
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Total gains or losses
Included in earnings	(39,000		)	3,060
Included in other comprehensive income	—			—
Purchases, issuances, sales and settlements
Purchases	102,800			—
Issuances	36,474			43,742
Sales	—			—
Settlements	5,714			(2,207		)
Ending balance	$	251,050		$	44,595

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The table below presents the items which Nationstar measures at fair value on a nonrecurring basis (in thousands).

	Nonrecurring Fair Value Measurements						Total Estimated Fair Value		Total Gain (Loss) Included in Earnings
	Level 1		Level 2		Level 3
Three months ended September 30, 2012
Assets
REO(1)	$	—	$	—	$	3,193	$	3,193	$	2,050
Total assets	$	—	$	—	$	3,193	$	3,193	$	2,050
Nine months ended September 30, 2012
Assets
REO(1)	$	—	$	—	$	3,193	$	3,193	$	(1,705	)
Total assets	$	—	$	—	$	3,193	$	3,193	$	(1,705	)
Year ended December 31, 2011
Assets
REO(1)	$	—	$	—	$	3,668	$	3,668	$	(6,833	)
Total assets	$	—	$	—	$	3,668	$	3,668	$	(6,833	)

(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.

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The table below presents a summary of the estimated carrying amount and fair value of Nationstar’s financial instruments (in thousands).

	September 30, 2012
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	430,815	$	430,815	$	—	$	—
Restricted cash	258,858		258,858		—		—
Mortgage loans held for sale	703,214		—		703,214		—
Mortgage loans held for investment, subject to nonrecourse debt – Legacy assets	238,178		—		—		221,852
Reverse mortgage interests	452,886		—		492,765		—
Derivative instruments	112,628		—		112,628		—
Financial liabilities:
Notes payable	2,532,216		—		—		2,532,216
Unsecured senior notes	1,062,423		1,129,060		—		—
Derivative financial instruments	37,835		—		37,835		—
Nonrecourse debt - Legacy assets	101,898		—		—		103,727
Excess spread financing	255,484		—		—		255,484
Participating interest financing	415,448		—		417,650		—
	December 31, 2011
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	62,445	$	62,445	$	—	$	—
Restricted cash	71,499		71,499		—		—
Mortgage loans held for sale	458,626		—		458,626		—
Mortgage loans held for investment, subject to nonrecourse debt – Legacy assets	243,480		—		—		226,890
Derivative instruments	11,302		—		11,302		—
Financial liabilities:
Notes payable	873,179		—		—		873,179
Unsecured senior notes	280,199		282,150		—		—
Derivative financial instruments	12,370		—		12,370		—
Nonrecourse debt - Legacy assets	112,490		—		—		114,037
Excess spread financing	44,595		—		—		44,595

15. Shareholders’ Equity

Share-based compensation is recognized in accordance with ASC 718, Compensation-Stock Compensation. This guidance requires all share-based payments to employees, including grants of employee stock options, to be recognized as an expense in the consolidated statements of operations, based on the fair values. The amount of compensation is measured at the fair value of the awards when granted and this cost is expensed over the required service period, which is normally the vesting period of the award.

Nationstar Inc. has adopted the 2012 Incentive Compensation Plan (the “2012 Plan”), that offers certain key employees of Nationstar, consultants and non-employee directors equity-based awards. In connection with the initial public offering, on March 7, 2012, Nationstar Inc. made grants of restricted stock to management in the total amount of 1,191,117 shares and also to members of the Board in the total amount of 85,716 shares.

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The restricted stock, net of forfeitures, is scheduled to vest over 3 years with 405,269 shares vesting in March 2013, 405,269 shares vesting in March 2014, and 406,486 shares vesting in March 2015. The weighted average grant date fair value of the restricted stock was $14.00.

The following table summarizes information about our restricted stock as of September 30, 2012 under the 2012 Plan (restricted stock in thousands):

	Shares	Grant Date Fair Value	Remaining Contractual Term
Restricted Stock outstanding at March 31, 2012	1,277	$14.00	2.4
Granted	6	$28.17	1.0
Forfeited	(32)
Restricted Stock outstanding at September 30, 2012	1,251
Restricted Stock unvested and expected to vest	1,223
Restricted Stock vested and payable at September 30, 2012	—

In addition to the 2012 Plan, Nationstar management also had interests in certain of the predecessor parent company FIF’s restricted preferred units which fully vested on June 30, 2012. The weighted average grant date fair value of these units was $4.23. In conjunction with the final vesting under this plan, certain participants remitted a portion of their Nationstar Inc. common stock to Nationstar Mortgage LLC in payment of a portion of their federal tax withholdings on their vested shares. The participants paid the remainder of their required tax payments with cash. As a result of the above activity, Nationstar Mortgage LLC holds 212,156 shares of Nationstar Inc. common shares at their cost of $4.6 million. These shares are reflected in Nationstar's consolidated balance sheet as common shares held by subsidiary, a contra equity account. The shares are expected to be held by Nationstar Mortgage LLC until they can be distributed to Nationstar Inc. and retired.

Total compensation expense, net of forfeitures, for both the 2012 Plan and the predecessor plan recognized for the three and nine months endedSeptember 30, 2012 was $2.6 million and $10.7 million, respectively. Total compensation expense for the three and nine months ended September 30, 2011 was $1.7 million and $12.2 million, respectively. Total compensation expenses, net of forfeitures, for the predecessor plan for the three and nine months endedSeptember 30, 2012, was $0.0 million and $4.6 million, respectively. Nationstar expects to recognize $2.5 million of compensation expense in the last three months of 2012, $5.7 million in 2013, $2.4 million in 2014, and $0.4 million in 2015.

16. Earnings Per Share

Net income per share is computed under the provisions of ASC 260, Earnings Per Share. Basic net income per share is computed based on the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed based on the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares represent outstanding restricted stock.

17. Capital Requirements

Certain of Nationstar’s secondary market investors require various capital adequacy requirements, as specified in the respective selling and servicing agreements. To the extent that these mandatory, imposed capital requirements are not met, Nationstar’s secondary market investors may ultimately terminate Nationstar’s selling and servicing agreements, which would prohibit Nationstar from further originating or securitizing these specific types of mortgage loans. In addition, these secondary market investors may impose additional net worth or financial condition requirements based on an assessment of market conditions or other relevant factors.

Among Nationstar’s various capital requirements related to its outstanding selling and servicing agreements, the most restrictive of these requires Nationstar to maintain a minimum adjusted net worth balance of $356.5 million. As of September 30, 2012, Nationstar was in compliance with all of its selling and servicing capital requirements.

Additionally, Nationstar is required to maintain a minimum tangible net worth of at least $175.0 million as of each quarter-end related to its outstanding Master Repurchase Agreements on its outstanding repurchase facilities. As of September 30, 2012, Nationstar was in compliance with these minimum tangible net worth requirements.

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18. Commitments and Contingencies

Litigation and Regulatory Matters

In the ordinary course of business, Nationstar Inc. and its subsidiaries and current and former officers and employees are routinely named as defendants in various legal actions, including class actions and other litigation, arising in connection with activities related to a national mortgage servicer and lender. Certain of the actual or threatened legal actions include claims for substantial compensatory, punitive and/or, statutory damages or claims for an indeterminate amount of damages. Further, in the ordinary course of business the Company and certain related parties can be or are involved in governmental and regulatory examinations, information gathering requests, investigations and proceedings (both formal and informal), regarding the Company’s business, certain of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief.

The Company seeks to resolve all litigation and regulatory matters in the manner management believes is in the best interest of the Company and contests liability, allegations of wrongdoing and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with outstanding legal and regulatory proceedings utilizing the latest information available. Where available information indicates that it is probable a liability has been incurred and the Company can reasonably estimate the amount of that loss an accrued liability is established. The actual costs of resolving these proceedings may be substantially higher or lower than the amounts accrued.

A 50 state task force of attorneys general as well as certain federal agencies are investigating issues related to the conduct of certain mortgage servicing companies and related service providers, in connection with mortgage foreclosures. While the Company is not involved in the investigation or negotiations regarding a settlement, the ultimate outcome could have a material impact on other mortgage servicers, including the Company.

When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. If, at the time of evaluation, the loss contingency is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable. Once the matter is deemed to be both probable and estimable, the Company will establish an accrued liability and record a corresponding amount to litigation related expense. The Company will continue to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Litigation related expense, which includes the fees paid to external legal providers, of $3.5 million and $9.7 million were included in general and administrative expense on the consolidated statements of operations for the three and nine months endedSeptember 30, 2012, respectively, and $6.3 million and $7.8 million for the three and nine months ended September 30, 2011, respectively.

Based on current knowledge, and after consultation with counsel, management believes that the current legal accrued liability is appropriate, and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the consolidated financial condition of the Company, although the outcome of such proceedings could be material to the Company’s operating results and cash flows for a particular period depending on among other things, the level of the Company’s revenues or income for such period. However, in the event of significant developments on existing cases, it is possible that the ultimate resolution, if unfavorable, may be material to the Company’s consolidated financial statements.

Loan and Other Commitments

Nationstar enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. These IRLCs are treated as derivatives and are carried at fair value (See Note 10, Derivative Financial Instruments).

In 2012, Nationstar completed its acquisitions of certain MSRs related to approximately $27.2 billion of unpaid principal balance in reverse mortgage loans from financial services companies. As servicer for these reverse mortgage loans, among other things, the Company is obligated to make advances to the loan customers as required. At September 30, 2012, the Company’s maximum unfunded advance obligation related to these MSRs was approximately $4.3 billion. Upon funding any portion of these advances, the Company expects to securitize and sell the advances in transactions that will be accounted for as financing arrangements.

Other Contingencies

In June 2011, Nationstar entered into an agreement to subservice loans for a financial services company. Nationstar began to subservice these loans in July and August 2011. This subservicing agreement included, among other things, a loss incentive and sharing arrangement. Under this arrangement, Nationstar can earn incentive fees of up to $2.5 million for successfully

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mitigating losses within a specific subserviced population of loans. This incentive fee would be recognized when earned. For this same population of loans, Nationstar is subject to loss sharing under certain conditions. Should losses in this population of loans exceed a specified level, Nationstar would be required to share a portion of the losses on such loans up to a maximum of $10.0 million. Losses under this arrangement would be recognized at the point at which Nationstar determines that a liability is expected to be incurred. At September 30, 2012, Nationstar has estimated no liability under this agreement.

During December 2009, Nationstar entered into a strategic relationship with a major mortgage market participant, which

contemplates, among other things, significant mortgage servicing rights and subservicing transfers to Nationstar upon terms to be determined. Under this arrangement, if certain delivery thresholds have been met, the market participant may require Nationstar to establish an operating division or newly created subsidiary with separate, dedicated employees within a specified timeline to service such mortgage servicing rights and subservicing. After a specified time period, this market participant may purchase the subsidiary at an agreed upon price. Since December 2010, all of the required delivery thresholds with this market participant have been met, but the market participant has not required the Company to establish an operating division or newly created subsidiary with separate, dedicated employees.

19. Business Segment Reporting

Nationstar currently conducts business in two separate operating segments: Servicing and Originations. The Servicing segment provides loan servicing on Nationstar’s total servicing portfolio, including the collection of principal and interest payments and the assessment of ancillary fees related to the servicing of mortgage loans. The Originations segment involves the origination, packaging, and sale of agency mortgage loans into the secondary markets via whole loan sales or securitizations. Nationstar reports the activity not related to either operating segment in the Legacy Portfolio and Other column. The Legacy Portfolio and Other column includes primarily all subprime mortgage loans originated in the latter portion of 2006 and during 2007 or acquired from Nationstar’s predecessor and consolidated VIEs which were consolidated pursuant to consolidation guidance related to VIEs adopted on January 1, 2010.

Nationstar’s segments are based upon Nationstar’s organizational structure which focuses primarily on the services offered. The accounting policies of each reportable segment are the same as those of Nationstar except for 1) expenses for consolidated back-office operations and general overhead-type expenses such as executive administration and accounting and 2) revenues generated on inter-segment services performed. Expenses are allocated to individual segments based on the estimated value of services performed, including total revenue contributions, personnel headcount, and the equity invested in each segment. Revenues generated or inter-segment services performed are valued based on similar services provided to external parties.

To reconcile to Nationstar’s consolidated results, certain inter-segment revenues and expenses are eliminated in the “Elimination” column in the following tables.

The following tables are a presentation of financial information by segment for the periods indicated (in thousands):

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	Three months ended September 30, 2012
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	135,398		$	—		$	135,398		$	548		$	(442	)	$	135,504
Other fee income	6,457			(4,055		)	2,402			(6		)				2,396
Total fee income	141,855			(4,055		)	137,800			542			(442		)	137,900
Gain/(loss) on mortgage loans held for sale	—			139,259			139,259			—			—			139,259
Total revenues	141,855			135,204			277,059			542			(442		)	277,159
Total expenses and impairments	95,296			56,481			151,777			3,051			—			154,828
Other income (expense):
Interest income	12,544			6,161			18,705			4,395			442			23,542
Interest expense	(53,830		)	(7,738		)	(61,568		)	(3,447		)	—			(65,015		)
Gain (loss) on interest rate swaps and caps	236			—			236			(1,313		)	—			(1,077		)
Total other income (expense)	(41,050		)	(1,577		)	(42,627		)	(365		)	442			(42,550		)
Income (loss) before taxes	$	5,509		$	77,146		$	82,655		$	(2,874	)	$	—		$	79,781
Depreciation and amortization	$	2,006		$	766		$	2,772		$	201		$	—		$	2,973
Total assets	4,470,896			1,079,521			5,550,417			390,814			—			5,941,231

	Three months ended September 30, 2011
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	54,220		$	—		$	54,220		$	519		$	(1,708	)	$	53,031
Other fee income	3,772			3,114			6,886			774			—			7,660
Total fee income	57,992			3,114			61,106			1,293			(1,708		)	60,691
Gain/(loss) on mortgage loans held for sale	—			30,352			30,352			—			(120		)	30,232
Total revenues	57,992			33,466			91,458			1,293			(1,828		)	90,923
Total expenses and impairments	47,874			25,890			73,764			9,550			(120		)	83,194
Other income (expense):
Interest income	907			3,056			3,963			10,530			1,708			16,201
Interest expense	(14,161		)	(2,989		)	(17,150		)	(9,226		)	—			(26,376		)
Fair value changes ABS securitizations	—			—			—			(654		)	—			(654		)
Total other income (expense)	(13,254		)	67			(13,187		)	650			1,708			(10,829		)
Income before taxes	$	(3,136	)	$	7,643		$	4,507		$	(7,607	)	$	—		$	(3,100	)
Depreciation and amortization	$	525		$	327		$	852		$	139		$	—		$	991
Total assets	810,157			429,661			1,239,818			764,507			—			2,004,325

40

	Nine months ended September 30, 2012
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	305,124		$	—		$	305,124		$	1,785		$	(1,363	)	$	305,546
Other fee income	19,728			1,665			21,393			(134		)				21,259
Total fee income	324,852			1,665			326,517			1,651			(1,363		)	326,805
Gain (loss) on mortgage loans held for sale	—			312,094			312,094			—			22			312,116
Total revenues	324,852			313,759			638,611			1,651			(1,341		)	638,921
Total expenses and impairments	228,182			132,935			361,117			20,660			—			381,777
Other income (expense):
Interest income	22,406			14,719			37,125			14,145			1,363			52,633
Interest expense	(99,053		)	(15,529		)	(114,582		)	(11,304		)	(22		)	(125,908		)
Gain (loss) on interest rate swaps and caps	424			—			424			(2,126		)	—			(1,702		)
Total other income (expense)	(76,223		)	(810		)	(77,033		)	715			1,341			(74,977		)
Income before taxes	$	20,447		$	180,014		$	200,461		$	(18,294	)	$	—		$	182,167
Depreciation and amortization	$	4,104		$	1,669		$	5,773		$	585		$	—		$	6,358
Total assets	4,470,896			1,079,521			5,550,417			390,814			—			5,941,231

	Nine months ended September 30, 2011
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	164,804		$	—		$	164,804		$	1,257		$	(5,306	)	$	160,755
Other fee income	10,437			10,983			21,420			2,579			—			23,999
Total fee income	175,241			10,983			186,224			3,836			(5,306		)	184,754
Gain (loss) on mortgage loans held for sale	—			73,832			73,832			—			(272		)	73,560
Total revenues	175,241			84,815			260,056			3,836			(5,578		)	258,314
Total expenses and impairments	128,177			71,404			199,581			20,408			(272		)	219,717
Other income (expense):
Interest income	2,529			8,560			11,089			34,851			5,306			51,246
Interest expense	(41,109		)	(7,480		)	(48,589		)	(28,340		)	—			(76,929		)
Fair value changes - ABS securitizations	—			—			—			(6,919		)	—			(6,919		)
Total other income (expense)	(38,580		)	1,080			(37,500		)	(408		)	5,306			(32,602		)
Income before taxes	$	8,484		$	14,491		$	22,975		$	(16,980	)	$	—		$	5,995
Depreciation and amortization	$	1,293		$	894		$	2,187		$	364		$	—		$	2,551
Total assets	810,157			429,661			1,239,818			764,507			—			2,004,325

41

20. Guarantor Financial Statement Information

Nationstar has $1.1 billion aggregate principal amount of unsecured senior notes which mature on various dates through October 1, 2020. The notes are jointly and severally guaranteed on an unsecured senior basis by all of Nationstar’s existing and future wholly-owned domestic restricted subsidiaries with certain exceptions. All guarantor subsidiaries are 100% owned by Nationstar. Effective June 30, 2012, Nationstar Inc. and its two direct wholly-owned subsidiaries became guarantors of the unsecured senior notes as well. Presented below are consolidating financial statements of Nationstar Inc., Nationstar, and the guarantor subsidiaries for the periods indicated.

NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2012 (IN THOUSANDS)
Assets	Nationstar Inc.		Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)		Eliminations			Consolidated
Cash and cash equivalents	$	—	$	430,497		$	318	$	—	$	—		$	430,815
Restricted cash	—		132,854			3		126,001		—			258,858
Accounts receivable, net	—		2,851,007			—		1,978		—			2,852,985
Mortgage loans held for sale	—		703,214			—		—		—			703,214
Mortgage loans held for investment, subject to nonrecourse debt–Legacy Asset, net	—		10,137			—		228,041		—			238,178
Participating interest in reverse mortgages	—		452,886			—		—		—			452,886
Receivables from affiliates	—		(1,605,564		)	82,229		1,536,636		—			13,301
Mortgage servicing rights – fair value	—		592,692			—		—		—			592,692
Investment in subsidiaries	661,463		157,812			—		—		(819,275		)	—
Mortgage servicing rights – amortized cost	—		8,036			—		—		—			8,036
Property and equipment, net	—		47,879			835		—		—			48,714
REO, net	—		1,363			—		1,830		—			3,193
Other assets	29,783		338,359			—		—		(29,783		)	338,359
Total assets	$	691,246	$	4,121,172		$	83,385	$	1,894,486	$	(849,058	)	$	5,941,231
Liabilities and shareholders’ equity
Notes payable	$	—	$	823,608		$	—	$	1,708,708	$	—		$	2,532,316
Unsecured senior notes	—		1,062,423			—		—		—			1,062,423
Payables and accrued liabilities	—		789,639			—		2,412		(29,783		)	762,268
Payables to affiliates	—		—			—		—		—			—
Derivative financial instruments	—		30,794			—		7,041		—			37,835
Mortgage Servicing Liability	—		82,313			—		—		—			82,313
Nonrecourse debt–Legacy Assets	—		—			—		101,898		—			101,898
Excess spread financing - at fair value	—		255,484			—		—		—			255,484
Participating interest financing	—		415,448			—		—		—			415,448
Total liabilities	—		3,459,709			—		1,820,059		(29,783		)	5,249,985
Total shareholders’ equity	691,246		661,463			83,385		74,427		(819,275		)	691,246
Total liabilities and shareholders’ equity	$	691,246	$	4,121,172		$	83,385	$	1,894,486	$	(849,058	)	$	5,941,231

42

NATIONSTAR MORTGAGE INC CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 (IN THOUSANDS)
	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	—		$	135,339		$	—	$	607		$	(442	)	$	135,504
Other fee income	—			(4,672		)	6,947		121			—			2,396
Total fee income	—			130,667			6,947		728			(442		)	137,900
Gain on mortgage loans held for sale	—			139,259			—		—			—			139,259
Total Revenues	—			269,926			6,947		728			(442		)	277,159
Expenses and impairments:
Salaries, wages and benefits	—			96,121			1,986		—			—			98,107
General and administrative	—			50,573			401		611			—			51,585
Provision for loan losses	—			—			—		1,545			—			1,545
Loss on foreclosed real estate and other	—			884			—		(2,934		)	—			(2,050		)
Occupancy	—			5,641			—		—			—			5,641
Total expenses and impairments	—			153,219			2,387		(778		)	—			154,828
Other income (expense):
Interest income	—			18,460			—		4,640			442			23,542
Interest expense	—			(43,000		)	—		(22,015		)	—			(65,015		)
Gain/(Loss) on interest rate swaps and caps	—			(389		)	—		(688		)	—			(1,077		)
Gain/(loss) from subsidiaries	49,931			(11,997		)	—		—			(37,934		)	—
Total other income (expense)	49,931			(36,926		)	—		(18,063		)	(37,492		)	(42,550		)
Income before taxes	49,931			79,781			4,560		(16,557		)	(37,934		)	79,781
Income tax expense/(benefit)	(5,136		)	29,850			—		—			—			24,714
Net income/(loss)	55,067			49,931			4,560		(16,557		)	(37,934		)	55,067
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			—		—			—			—
Reclassification adjustments for gain (loss) included in earnings	$	—		$	—		$	—	$	423		$	—		$	423
Comprehensive income / (loss)	$	55,067		$	49,931		$	4,560	$	(16,134	)	$	(37,934	)	$	55,490

43

NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 (IN THOUSANDS)
	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	—		$	301,363		$	—	$	5,546		$	(1,363	)	$	305,546
Other fee income	—			310			20,596		353			—			21,259
Total fee income	—			301,673			20,596		5,899			(1,363		)	326,805
Gain on mortgage loans held for sale	—			312,116			—		—			—			312,116
Total Revenues	—			613,789			20,596		5,899			(1,363		)	638,921
Expenses and impairments:
Salaries, wages and benefits	—			231,709			6,810		—			—			238,519
General and administrative	—			119,772			1,778		5,557			—			127,107
Provision for loan losses	—			—			—		3,153			—			3,153
Loss on foreclosed real estate and other	—			1,008			—		697			—			1,705
Occupancy	—			11,293			—		—			—			11,293
Total expenses and impairments	—			363,782			8,588		9,407			—			381,777
Other income (expense):
Interest income	—			36,489			—		14,781			1,363			52,633
Interest expense	—			(89,832		)	—		(36,076		)	—			(125,908		)
Gain/(Loss) on interest rate swaps and caps	—			(1,201		)	—		(501		)	—			(1,702		)
Gain/(loss) from subsidiaries	114,591			(13,331		)	—		—			(101,260		)	—
Total other income (expense)	114,591			(67,875		)	—		(21,796		)	(99,897		)	(74,977		)
Income before taxes	114,591			182,132			12,008		(25,304		)	(101,260		)	182,167
Income tax expense/(benefit)	(26,937		)	67,541			5		30			—			40,639
Net income/(loss)	141,528			114,591			12,003		(25,334		)	(101,260		)	141,528
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			—		(423		)	—			(423		)
Reclassification adjustments for gain (loss) included in earnings	—			—			—		423			—			423
Comprehensive income / (loss)	$	141,528		$	114,591		$	12,003	$	(25,334	)	$	(101,260	)	$	141,528

44

NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 (IN THOUSANDS)
	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Operating activities:
Net income/(loss)	$	141,528		$	114,591		$	12,003		$	(25,334	)	$	(101,260	)	$	141,528
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
(Gain)/loss from subsidiaries	(114,591		)	13,331			—			—			101,260			—
Share-based compensation	—			10,665			—			—			—			10,665
Gain on mortgage loans held for sale	—			(312,116		)	—			—			—			(312,116		)
Provision for loan losses	—			—			—			3,153			—			3,153
Loss on foreclosed real estate and other	—			1,008			—			697			—			1,705
Loss on equity method investments	—			1,327			—			—			—			1,327
(Gain)/loss on ineffectiveness on interest rate swaps and cap	—			1,201			—			501			—			1,702
Fair value changes in excess spread financing	—			5,050			—			—			—			5,050
Depreciation and amortization	—			6,315			43			—			—			6,358
Change in fair value of mortgage servicing rights	—			42,810			—			—			—			42,810
Accretion of mortgage servicing liability	—			(3,276		)	—			—			—			(3,276		)
Amortization of debt discount	—			16,387			—			1,714			—			18,101
Amortization of premiums/(discounts)	—			(125		)	—			(3,877		)	—			(4,002		)
Mortgage loans originated and purchased, net of fees	—			(4,814,018		)	—			—			—			(4,814,018		)
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	—			4,761,946			—			7,371			—			4,769,317
Changes in assets and liabilities:
Accounts receivable	—			(546,934		)	7			278,533			—			(268,394		)
Receivables from/(payables to) affiliates	—			1,626,650			(11,979		)	(1,614,018		)	—			653
Reverse funded advances due to securitization	—			(317,272		)	—			—			—			(317,272		)
Other assets	(29,783		)	(135,107		)	—			—			29,783			(135,107		)
Accounts payable and accrued liabilities	2,846			259,694			—			(832		)	(29,783		)	231,925
Net cash provided by/(used in) operating activities	—			732,127			74			(1,352,092		)	—			(619,891		)

45

	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Investing activities:
Property and equipment additions, net of disposals	—			(20,699		)	—		—			—			(20,699		)
Cash Proceeds from assumption of reverse mortgage servicing obligations, net	—			(31,169		)	—		—			—			(31,169		)
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred	—			(2,024,019		)	—		—			—			(2,024,019		)
Repurchases of REO from Ginnie Mae	—			(6,856		)	—		—			—			(6,856		)
Proceeds from sales of REO	—			4,485			—		3,949			—			8,434
Net cash provided by/(used in) investing activities	—			(2,078,258		)	—		3,949			—			(2,074,309		)
Financing activities:
Issuance of Senior Unsecured Notes	—			781,196			—		—			—			781,196
Transfers to/from restricted cash	—			(83,674		)	—		(103,685		)	—			(187,359		)
Issuance of common stock, net of IPO issuance costs	246,700			—			—		—			—			246,700
Issuance of participating interest financing	—			416,303			—		—			—			416,303
Issuance of excess spread financing	—			215,570			—		—			—			215,570
Increase (decrease) in notes payable, net	—			195,003			—		1,464,134			—			1,659,137
Repayment of nonrecourse debt–Legacy assets	—			—			—		(12,306		)	—			(12,306		)
Repayment of excess servicing spread financing	—			(12,981		)	—		—			—			(12,981		)
Distribution to subsidiaries	(246,700		)	—			—		—			246,700			—
Contributions of parent	—			246,700			—		—			(246,700		)	—
Debt financing costs	—			(43,690		)	—		—			—			(43,690		)
Net cash provided by/(used in) financing activities	—			1,714,427			—		1,348,143			—			3,062,570
Net increase/(decrease) in cash	—			368,296			74		—			—			368,370
Cash and cash equivalents at beginning of period	—			62,201			244		—			—			62,445
Cash and cash equivalents at end of period	$	—		$	430,497		$	318	$	—		$	—		$	430,815

46

NATIONSTAR MORTGAGE LLC CONSOLIDATING BALANCE SHEET DECEMBER 31, 2011 (IN THOUSANDS)
	Issuer (Parent)		Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	62,201	$	244	$	—	$	—		$	62,445
Restricted cash	49,180		3		22,316		—			71,499
Accounts receivable, net	281,782		7		280,511		—			562,300
Mortgage loans held for sale	458,626		—		—		—			458,626
Mortgage loans held for investment, subject to nonrecourse debt–Legacy Asset, net	5,984		—		237,496		—			243,480
Receivables from affiliates	41,961		70,541		—		(107,893		)	4,609
Mortgage servicing rights – fair value	251,050		—		—		—			251,050
Investment in subsidiaries	140,880		—		—		(140,880		)	—
Property and equipment, net	23,238		835		—		—			24,073
REO, net	—		—		3,668		—			3,668
Other assets	106,181		—		—		—			106,181
Total assets	$	1,421,083	$	71,630	$	543,991	$	(248,773	)	$	1,787,931
Liabilities and members’ equity
Notes payable	$	628,605	$	—	$	244,574	$	—		$	873,179
Unsecured senior notes	280,199		—		—		—			280,199
Payables and accrued liabilities	180,545		—		3,244		—			183,789
Payables to affiliates	—		—		107,893		(107,893		)	—
Derivative financial instruments	5,830		—		6,540		—			12,370
Derivative financial instruments, subject to ABS nonrecourse debt	—		—		—		—			—
Nonrecourse debt–Legacy Assets	—		—		112,490		—			112,490
Excess spread financing – fair value	44,595		—		—		—			44,595
ABS nonrecourse – fair value	—		—		—		—			—
Total liabilities	1,139,774		—		474,741		(107,893		)	1,506,622
Total members’ equity	281,309		71,630		69,250		(140,880		)	281,309
Total liabilities and members’ equity	$	1,421,083	$	71,630	$	543,991	$	(248,773	)	$	1,787,931

47

NATIONSTAR MORTGAGE LLC CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 (IN THOUSANDS)
	Issuer			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	50,983		$	(106	)	$	3,862		$	(1,708	)	$	53,031
Other fee income	3,517			3,882			261			—			7,660
Total fee income	54,500			3,776			4,123			(1,708		)	60,691
Gain on mortgage loans held for sale	30,232			—			—			—			30,232
Total Revenues	84,732			3,776			4,123			(1,708		)	90,923
Expenses and impairments:
Salaries, wages and benefits	49,989			915			—			—			50,904
General and administrative	20,585			871			3,941			—			25,397
Provision for loan losses	1,281			—			(404		)	—			877
Loss on foreclosed real estate	1,234			—			1,324			—			2,558
Occupancy	3,419			39			—			—			3,458
Total expenses and impairments	76,508			1,825			4,861			—			83,194
Other income / (expense):
Interest income	2,871			5			11,617			1,708			16,201
Interest expense	(14,686		)	—			(11,690		)	—			(26,376		)
Fair value changes in ABS securitizations	—			—			(553		)	(101		)	(654		)
Gain / (loss) from subsidiaries	592			—			—			(592		)	—
Total other income / (expense)	(11,223		)	5			(626		)	1,015			(10,829		)
Net income / (loss)	(2,999		)	1,956			(1,364		)	(693		)	(3,100		)
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			—			—			—
Comprehensive income / (loss)	$	(2,999	)	$	1,956		$	(1,364	)	$	(693	)	$	(3,100	)

48

NATIONSTAR MORTGAGE LLC CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 (IN THOUSANDS)
	Issuer (Parent)			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	162,741		$	(542	)	$	3,862		$	(5,306	)	$	160,755
Other fee income	11,647			11,411			941			—			23,999
Total fee income	174,388			10,869			4,803			(5,306		)	184,754
Gain on mortgage loans held for sale	73,560			—			—			—			73,560
Total Revenues	247,948			10,869			4,803			(5,306		)	258,314
Expenses and impairments:
Salaries, wages and benefits	143,646			2,553			—			—			146,199
General and administrative	50,054			2,705			3,948			—			56,707
Provision for loan losses	2,005			—			—			—			2,005
Loss on foreclosed real estate	1,436			—			5,468			—			6,904
Occupancy	7,765			137			—			—			7,902
Total expenses and impairments	204,906			5,395			9,416			—			219,717
Other income / (expense):
Interest income	11,070			—			34,870			5,306			51,246
Interest expense	(41,411		)	—			(35,518		)	—			(76,929		)
Fair value changes in ABS securitizations	—			—			(6,935		)	16			(6,919		)
Gain / (loss) from subsidiaries	(6,722		)	—			—			6,722			—
Total other income / (expense)	(37,063		)	—			(7,583		)	12,044			(32,602		)
Net income / (loss)	$	5,979		$	5,474		$	(12,196	)	$	6,738		$	5,995
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			(1,071		)	—			(1,071		)
Comprehensive income / (loss)	$	5,979		$	5,474		$	(13,267	)	$	6,738		$	4,924

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NATIONSTAR MORTGAGE LLC CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 (IN THOUSANDS)
	Issuer (Parent)			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Operating activities:
Net income/(loss)	$	5,979		$	5,474		$	(12,196	)	$	6,738		$	5,995
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Loss on equity method investments	971												971
Share-based compensation	12,201			—			—			—			12,201
Gain on mortgage loans held for sale	(73,560		)	—			—			—			(73,560		)
Provision for loan losses	2,005			—			—			—			2,005
Loss on foreclosed real estate and other	1,436			—			5,468			—			6,904
(Gain)/loss on ineffectiveness on interest rate swaps and cap	—			—			(2,032		)	—			(2,032		)
Fair value changes in ABS securitizations	—			—			6,935			(16		)	6,919
Loss from subsidiaries	6,722			—			—			(6,722		)	—
Depreciation and amortization	2,551			—			—			—			2,551
Change in fair value of mortgage servicing rights	30,757			—			—			—			30,757
Amortization of debt discount	6,667			—			3,657			—			10,324
Amortization of premiums/(discounts)	—			—			(4,001		)	—			(4,001		)
Mortgage loans originated and purchased, net of fees	(2,285,558		)	—			—			—			(2,285,558		)
Cost of loans sold, net of fees	2,287,430			—			—			—			2,287,430
Principal payments/prepayments received and other changes in mortgage loans originated as held for sale	37,620			—			9,757			—			47,377
Changes in assets and liabilities:
Accounts receivable	(35,366		)	(5		)	316			—			(35,055		)
Receivables from/(payables to) affiliates	(24,356		)	(5,031		)	32,298			—			2,911
Other assets	(2,037		)	—			—			—			(2,037		)
Accounts payable and accrued liabilities	36,053			—			(213		)	—			35,840
Net cash provided by/(used) in operating activities	9,515			438			39,989			—			49,942

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	Issuer (Parent)			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations		Consolidated
Investing activities:
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt	—			—			29,395			—		29,395
Property and equipment additions, net of disposals	(15,147		)	—			—			—		(15,147		)
Acquisition of equity method investment	(6,600		)	—			—			—		(6,600		)
Purchase of mortgage servicing rights	(40,305		)	—			—			—		(40,305		)
Proceeds from sales of REO	—			—			22,897			—		22,897
Net cash provided by/(used) in investing activities	(62,052		)	—			52,292			—		(9,760		)
Financing activities:
Transfers to/from restricted cash	4,972			(3		)	13,343			—		18,312
Decrease in notes payable, net	62,237			—			(33,212		)	—		29,025
Repayment of nonrecourse debt–Legacy assets	—			—			(26,119		)	—		(26,119		)
Repayment of ABS nonrecourse debt	—			—			(47,175		)	—		(47,175		)
Debt financing costs	(2,734		)	—			—			—		(2,734		)
Distribution to parent	(3,900		)	—			—			—		(3,900		)
Tax related share-based settlement of units by members	(4,809		)	—			—			—		(4,809		)
Net cash provided by/(used) in financing activities	55,766			(3		)	(93,163		)	—		(37,400		)
Net increase/(decrease) in cash	3,229			435			(882		)	—		2,782
Cash and cash equivalents at beginning of period	20,904			319			—			—		21,223
Cash and cash equivalents at end of period	$	24,133		$	754		$	(882	)	$	—	$	24,005

21. Disclosures Related to Transactions with Affiliates of Fortress Investment Group LLC

Nationstar maintains a marketing agreement with Springleaf Home Equity, Inc., formerly known as American General Home Equity, Inc., Springleaf General Financial Services of Arkansas, Inc., formerly known as American General Financial Services of Arkansas, Inc. and MorEquity, Inc. (collectively “Springleaf”), each of which are indirectly owned by investment funds managed by affiliates of Fortress Investment Group LLC. Pursuant to this agreement, Nationstar markets mortgage originations products to customers of Springleaf, and is compensated by the originations fees of loans that Nationstar refinances.

Additionally, in January 2011, Nationstar entered into three agreements to act as the loan subservicer for Springleaf for a whole loan portfolio and two securitized loan portfolios totaling $4.4 billion for which Nationstar receives a monthly per loan subservicing fee and other performance incentive fees subject to the agreements with Springleaf. For the nine months ended September 30, 2012 and 2011, Nationstar recognized revenue of $7.5 million and $7.4 million, respectively, in additional servicing and other performance incentive fees related to these portfolios. For the three months ended September 30, 2012 and 2011, Nationstar recognized revenue of $2.4 million and $2.5 million , respectively, in additional servicing and other performance incentive fees related to these portfolios. At September 30, 2012 and December 31, 2011, Nationstar had an outstanding receivable from Springleaf of $0.5 million and $0.6 million, respectively, which was included as a component of accounts receivable.

Nationstar is the loan servicer for two securitized loan portfolios managed by Newcastle, which is managed by an affiliate of Fortress Investment Group LLC, for which Nationstar receives a monthly net servicing fee equal to 0.50% per annum on the unpaid principal balance of the portfolios, which was $1.0 billion and $1.1 billion, as of September 30, 2012 and 2011, respectively. For the three months ended September 30,2012 and 2011, Nationstar received servicing fees and other performance incentive fees of $1.3 million and $1.4 million, respectively. For the nine months ended September 30,2012 and 2011, Nationstar received servicing fees and other performance incentive fees of $3.9 million and $4.4 million, respectively.

Additionally, from December 2011 through September 2012, Nationstar entered into several agreements with Newcastle, where Nationstar sold to Newcastle the right to receive approximately 65% of the excess cash flow generated from certain acquired MSRs after receipt of a fixed basic servicing fee per loan. Nationstar will retain all ancillary income associated with servicing such MSRs and 35% of the excess cash flow after receipt of the fixed basic servicing fee. Nationstar will continue to be the servicer of the loans and provide all servicing and advancing functions for the portfolio. Newcastle will not have prior or

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ongoing obligations associated with this MSR portfolio. Furthermore, should Nationstar refinance any loan in such portfolio, subject to certain limitations, Nationstar will be required to transfer the new loan or a replacement loan of similar economic characteristics into the portfolio. The new or replacement loan will be governed by the same terms set forth in the agreement described above.

The fair value on the outstanding liability related to these agreements was $255.5 million at September 30, 2012.

22. Related Party Disclosure

In March 2011, Nationstar entered into a limited partnership agreement with ANC. ANC is the parent company of NREIS, which through the ANC partnership Nationstar holds a non-controlling interest in NREIS, an ancillary real estate services and vendor management company that directly and indirectly provides title agency settlement or valuation services for loan originations and default management. As Nationstar is able to exercise significant influence, but not control, over the policies and procedures of the entity, and Nationstar owns less than 50% of the voting interests, Nationstar applies the equity method of accounting. In March 2012 as part of the initial public offering restructuring, Nationstar assumed FIF’s 13% ownership in NREIS, increasing the total Nationstar investment to 35%. Nationstar disbursed servicing-related advances of $4.6 million and $1.6 million for the three months ended September 30, 2012 and September 30, 2011, respectively. Nationstar disbursed servicing-related advances of $12.4 million and $1.7 million for the nine months ended September 30, 2012 and September 30, 2011, respectively. Additionally, during May 2012, Nationstar advanced NREIS $2.0 million for future services. These amounts are recorded in accounts receivable in our financial statements.

23. Subsequent Events

Definitive Agreement to Acquire Certain Mortgage Servicing Assets of Residential Capital, LLC

On May 13, 2012, Nationstar signed a definitive agreement (the “Agreement”) which was subsequently amended on June 28, 2012 to acquire certain residential mortgage servicing assets and other assets (collectively, “Mortgage Servicing Assets”) from Residential Capital, LLC and related entities (collectively, “ResCap”) in connection with ResCap’s proceedings before the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).

On October 23, 2012, an auction was conducted for the related Mortgage Servicing Assets. During the auction, Nationstar did not secure the highest bid. The results of the auction are subject to Bankruptcy Court approval which is scheduled to be heard by the Bankruptcy Court on November 19, 2012. Because Nationstar was originally approved by the Bankruptcy Court as the stalking-horse bidder, if the Agreement is terminated as a result of the Bankruptcy Court's approval of the highest bid in the auction, ResCap will be required to pay Nationstar a $24 million break-up fee in cash (a portion of which will be payable to Newcastle). Under the terms of the Agreement, as the back-up bidder, Nationstar is required to hold open its bid until the earlier of (a) the Bankruptcy Court's approval of the successful bid or (b) 30 calendar days following the auction. If the highest bidder is not approved by the Bankruptcy Court, or is unable to complete the transaction during this time period, Nationstar would be required to purchase the Mortgage Servicing Assets for approximately $2.9 billion (Nationstar's final bid) as required pursuant to the auction terms.

Amendment of 2011-1 agency advance financing facility

In October 2012, Nationstar amended the 2011-1 Agency Advance Financing Facility. This facility has the capacity to borrow up to $600 million and the interest rate is based on LIBOR plus a spread ranging from 2.5% to 6.50% depending upon class of the note. The maturity date of this facility is October 2013. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

In conjunction with the completion of Nationstar Mortgage Holdings Inc.'s initial public offering, Nationstar Mortgage LLC became a wholly-owned indirect subsidiary of Nationstar Mortgage Holdings Inc. Nationstar Mortgage Holdings Inc. was formed as a Delaware corporation for the purpose of reorganizing the structure of FIF HE Holdings LLC (FIF) and Nationstar Mortgage LLC so that the common stock issuer was a corporation rather than a limited liability company. Investors in FIF exchanged their membership units for shares in Nationstar Mortgage Holdings Inc. Because Nationstar Mortgage Holdings Inc. had no operations prior to the reorganization and initial public offering, Nationstar Mortgage LLC is the predecessor company. The following discussion and analysis relates to the operations of Nationstar Mortgage Holdings Inc. and its consolidated subsidiaries. The terms “we,” “us”, or “our” refer to the business of Nationstar Mortgage Holdings Inc. (Nationstar Inc. or the Company) or its predecessor Nationstar Mortgage LLC (Nationstar) as appropriate.

General

Our Business

We are one of the largest high touch non-bank residential mortgage servicers in the United States with a broad array of servicing capabilities across the residential mortgage product spectrum. We have been the fastest growing mortgage servicer since 2007 as measured by annual percentage growth in UPB, having grown 78.2% annually on a compounded basis. As of September 30, 2012, we serviced over 1.1 million residential mortgage loans with an aggregate UPB of $197.6 billion. Our total servicing portfolio as of September 30, 2012 includes approximately $27.3 billion of servicing related to reverse residential mortgage loans which were acquired in January 2012 and June 2012. We currently outsource the servicing of our reverse residential mortgage loan portfolio to several servicing counterparties. Additionally, we made an acquisition of forward MSRs in September 2012 related to UPB of approximately $6.1 billion. This acquisition was boarded in October 2012.

We service loans as the owner of the forward MSRs, which we refer to as “primary servicing,” and we service loans on behalf of other MSR or mortgage owners, which we refer to as “subservicing,” We acquire MSRs on a standalone basis and have also developed an innovative model for investing on a capital light basis by co-investing with financial partners in “excess MSRs.” Subservicing represents another capital light means of growing our servicing business, as subservicing contracts are typically awarded on a no-cost basis and do not require substantial capital. As of September 30, 2012, our primary servicing and subservicing, represented 62.3% and 23.9%, respectively of our total servicing portfolio, with 13.8% of our outstanding servicing portfolio consisting of reverse residential mortgage loans. In addition, we operate or have investments in several adjacent businesses designed to meet the changing needs of the mortgage industry. These businesses offer an array of ancillary services, including providing services for delinquent loans, managing loans in the foreclosure/REO process and providing title insurance agency, loan settlement and valuation services on newly originated and re-originated loans.

In June 2012, we closed an asset purchase agreement with Aurora Bank FSB and Aurora Loan Services LLC (collectively Aurora). Under the Asset Purchase Agreement, we purchased MSRs to approximately 300,000 residential mortgage loans with a total unpaid principal balance of over $63 billion, $1.7 billion of servicing advance receivables, and certain other assets. The composition of the acquired MSR portfolio is approximately 75% non-conforming loans in private label securitizations and approximately 25% conforming loans in GSE pools. We also assumed certain liabilities.

In January 2012, we acquired the mortgage servicing rights related to a portfolio of reverse residential mortgage loans with an unpaid principal balance of approximately $7.9 billion. In June 2012, we completed two additional acquisitions of MSRs related to reverse mortgages. These acquisitions totaled approximately $19.4 billion in unpaid principal balance. Reverse mortgages provide seniors (62 years and older) with a loan secured by their home. The majority of reverse mortgages are secured by the Federal Housing Administration (FHA) and are referred to as “HECMs” or Home Equity Conversion Mortgages. Like a typical home equity loan, reverse mortgages are designed to enable seniors to borrow against the value of their home. Unlike a typical home equity loan, no payment of principal or interest is required until the death of the borrower or sale of the home and the amount of the loan is dependent on the appraised value of the home at the time of origination, the interest rate on the loan and the borrower's age. Reverse mortgages may be either fully funded (fixed rate loan) or can provide for a line of credit that can be drawn periodically (adjustable rate “ARM” loan).

We are one of only a few non-bank servicers with a fully integrated loan originations platform to complement and enhance our servicing business. We originate primarily conventional agency (GSE) and government-insured residential mortgage loans and, to mitigate risk, typically sell these loans within 30 days while retaining the associated servicing rights. Our originations efforts are primarily focused on “re-origination,” which involves actively working with existing borrowers to refinance their mortgage loans. By re-originating loans for existing borrowers, we retain the servicing rights, thereby extending the longevity of the servicing cash flows, which we refer to as “recapture.”

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We also have a legacy asset portfolio, which consists primarily of non-prime and nonconforming residential mortgage loans, most of which we originated from April to July 2007. In November 2009, we engaged in a transaction through which we term-financed our legacy assets with a nonrecourse loan. Additionally, we consolidated certain securitization trusts where it was determined that we had both the power to direct the activities that most significantly impact the variable interest entities' (VIE) economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE pursuant to new consolidation accounting guidance related to VIEs adopted on January 1, 2010. In December 2011, we sold our remaining variable interest in a securitization trust and deconsolidated the VIE.

The analysis of our financial condition and results of operations as discussed herein is primarily focused on the combined results of our two Operating Segments: the Servicing Segment and the Originations Segment.

Our internet address is www.nationstarholdings.com. Through this internet website (under the “Investor Relations / Financial Information” link), we make available, free of charge, our reports that are electronically filed with or furnished to the Securities and Exchange Commission (SEC). Information contained on or available through this website is not incorporated by reference herein.

Critical Accounting Policies

Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. In particular, we have identified four policies that, due to the judgment, estimates and assumptions inherent in those policies, are critical to an understanding of our consolidated financial statements. These policies relate to: (a) fair value measurements, (b) sale of mortgage loans, (c) accounting for mortgage loans held for investment, subject to nonrecourse debt and (d) valuation of deferred tax assets. We believe that the judgment, estimates and assumptions used in the preparation of our consolidated financial statements are appropriate given the factual circumstances at the time. However, given the sensitivity of our consolidated financial statements to these critical accounting policies, the use of other judgments, estimates and assumptions could result in material differences in our results of operations or financial condition.

For further information on our critical accounting policies, please refer to our Quarterly Report on Form 10-Q for the period ended March 31, 2012. There have been no material changes to our critical accounting policies since March 31, 2012.

Selected Financial Data

Selected consolidated balance sheet, statement of operations and other selected data are as follows (dollars in thousands).

	September 30, 2012		December 31, 2011
Consolidated Balance Sheets Data:
Cash and cash equivalents	$	430,815	$	62,445
Accounts receivable	2,852,985		562,300
Mortgage servicing rights (at fair value)	592,692		251,050
Total assets	5,941,231		1,787,931
Notes payable	2,532,316		873,179
Unsecured senior notes	1,062,423		280,199
Nonrecourse debt-legacy assets	101,898		112,490
Excess spread financing (at fair value)	255,484		44,595
Total liabilities	5,249,985		1,506,622
Total equity	691,246		281,309

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Consolidated Statements of Operations and Comprehensive Income Data:	For the three months ended  September 30,						For the nine months ended  September 30,
	2012			2011			2012			2011
Total revenues	$	277,159		$	90,923		$	638,921		$	258,314
Total expenses and impairments	154,828			83,194			381,777			219,717
Total other expense	(42,550		)	(10,829		)	(74,977		)	(32,602		)
Income (loss) before taxes	79,781			(3,100		)	182,167			5,995
Total income tax expense	24,714			—			40,639			—
Net income (loss)	55,067			(3,100		)	141,528			5,995
Reclassification adjustment for gain (loss) included in earnings	423			—			423			—
Change in value of designated cash flow hedges	—			—			(423		)	(1,071		)
Comprehensive income (loss)	$	55,490		$	(3,100	)	$	141,528		$	4,924
Other Financial Data:
Net cash provided by / (used in):
Operating activities	$	(263,266	)	$	(66,155	)	$	(619,891	)	$	49,942
Investing activities	(105,656		)	(28,382		)	(2,074,309		)	(9,760		)
Financing activities	783,845			116,010			3,062,570			(37,400		)
Adjusted EBITDA(1) (non-GAAP measure)	123,035			32,996			301,479			88,661
Operating Segments:
Interest expense from unsecured senior notes	17,656			7,543			39,714			22,622
Change in fair value of mortgage servicing rights	22,430			19,035			42,810			30,757
Depreciation and amortization	2,772			852			5,773			2,187
Share-based compensation	2,623			1,676			11,371			12,152

(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 2007 restructuring 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 QSPE.

Adjusted EBITDA

Adjusted EBITDA provides us with a key measure of our Operating Segments' performance as it assists us in comparing our Operating Segments' performance on a consistent basis. Management believes Adjusted EBITDA is useful in assessing the profitability of our core business and uses Adjusted EBITDA in evaluating our operating performance as follows:

• 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.

Management does not assess the growth prospects and the profitability of our legacy asset portfolio and certain securitization trusts that were previously consolidated, except to the extent necessary to assess whether cash flows from the assets in the legacy asset portfolio are sufficient to service its debt obligations.

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We also use Adjusted EBITDA (with additional adjustments) to measure our compliance with covenants such as leverage coverage ratios for our unsecured senior notes.

Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

• 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.

Because of these and other limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. Adjusted EBITDA is presented to provide additional information about our operations. Adjusted EBITDA is a non-GAAP measure and should be considered in addition to, but not as a substitute for or superior to, operating income, net income, operating cash flow and other measures of financial performance prepared in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.

	For the three months ended September 30,						For the nine months ended September 30,
Net Income/(Loss) from Operating Segments to Adjusted EBITDA Reconciliation (dollars in thousands):	2012			2011			2012			2011
Net income (loss)	$	55,067		$	(3,100	)	$	141,528		$	5,995
Plus:
Net loss from Legacy Portfolio and Other	2,874			7,607			18,294			16,980
Income tax expense	24,714			—			40,639			—
Income from Operating Segments	82,655			4,507			200,461			22,975
Adjust for:
Interest expense from unsecured senior notes	17,656			7,543			39,714			22,622
Depreciation and amortization	2,772			852			5,773			2,187
Change in fair value of mortgage servicing rights	22,430			19,035			42,810			30,757
Amortization of mortgage servicing rights/obligations - at amortized cost	(2,652		)	—			(3,276		)	—
Share-based compensation	2,623			1,676			11,371			12,152
Fair value changes on excess spread financing	(2,213		)	—			5,050			—
Fair value changes in derivatives	(236		)	—			(424		)	—
Ineffective portion of cash flow hedge	—			(617		)	—			(2,032		)
Adjusted EBITDA	$	123,035		$	32,996		$	301,479		$	88,661

Recent Developments

On May 13, 2012, Nationstar signed a definitive agreement (the “Agreement”) which was subsequently amended on June 28, 2012 to acquire certain residential mortgage servicing assets and other assets (collectively, “Mortgage Servicing Assets”) from Residential Capital, LLC and related entities (collectively, “ResCap”) in connection with ResCap’s proceedings before the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).

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On October 23, 2012, an auction was conducted for the related Mortgage Servicing Assets. During the auction, Nationstar did not secure the highest bid. The results of the auction are subject to Bankruptcy Court approval which is scheduled to be heard by the Bankruptcy Court on November 19, 2012. Because Nationstar was originally approved by the Bankruptcy Court as the stalking-horse bidder, if the Agreement is terminated as a result of the Bankruptcy Court's approval of the highest bid in the auction, ResCap will be required to pay Nationstar a $24 million break-up fee in cash (a portion of which will be payable to Newcastle). Under the terms of the Agreement, as the back-up bidder, Nationstar is required to hold open its bid until the earlier of (a) the Bankruptcy Court's approval of the successful bid or (b) 30 calendar days following the auction. If the highest bidder is not approved by the Bankruptcy Court, or is unable to complete the transaction during this time period, Nationstar would be required to purchase the Mortgage Servicing Assets as required pursuant to the auction terms.

Results of Operations

Below is a summarization of our consolidated operating results for the periods indicated. We provide further discussion of our results of operations for each of our reportable segments under “Segment Results” below. Certain income and expenses not allocated to our reportable segments are presented under “Legacy Portfolio and Other” below and discussed in “Note 19—Business Segment Reporting”, in the accompanying Notes to Consolidated Financial Statements.

Comparison of Consolidated Results for the Three Months Ended September 30, 2012 and 2011

Revenues increased $186.3 million to $277.2 million for the three months ended September 30, 2012 from $90.9 million for the three months ended September 30, 2011, due to increases in both our total fee income and our gain on mortgage loans held for sale. The increase in our total fee income was primarily the result of our higher average forward servicing portfolio balance, which increased to $160.3 billion for the three months ended September 30, 2012, compared to $83.7 billion for the three months ended September 30, 2011 and an increase in loss mitigation and performance based incentive fees combined with fees earned from our reverse mortgage portfolio, which we began servicing in January 2012. The increase in the gain on loans held for sale was a result of the $910.1 million, or 100.3%, increase in the amount of loans originated during the 2012 period compared to the 2011 period, higher margins earned on the sale of residential mortgage loans during the period and an increase in the value of our outstanding derivative financial instruments as a result of an increase in our outstanding mortgage loan commitments.

Expenses and impairments increased $71.6 million to $154.8 million for the three months ended September 30, 2012 from $83.2 million for the three months ended September 30, 2011, primarily due to the increase in compensation expenses related to increased staffing levels in order to accommodate our larger servicing portfolio and originations volumes as well as other related increases in general and administrative expenses.

Other expense increased $31.8 million to $42.6 million for the three months ended September 30, 2012 from $10.8 million for the three months ended September 30, 2011, primarily due to a decrease in our net interest margin resulting from higher average outstanding balances on our outstanding warehouse and advance facilities combined with a higher average outstanding balance on our senior unsecured notes.

For the three months ended September 30, 2012, we incurred tax expense of $24.7 million, with no corresponding tax expense during the comparable 2011 period. During March 2012, we became a taxable entity in conjunction with our initial public offering.

Comparison of Consolidated Results for the Nine Months Ended September 30, 2012 and 2011

Revenues increased $380.6 million to $638.9 million for the nine months ended September 30, 2012 from $258.3 million for the nine months ended September 30, 2011, due to increases in both our total fee income and our gain on mortgage loans held for sale. The increase in our total fee income was primarily the result of our higher average forward servicing portfolio balance, which increased to $117.4 billion for the nine months ended September 30, 2012, compared to $71.9 billion for the nine months ended September 30, 2011 and an increase in loss mitigation and performance based incentive fees combined with fees earned from our reverse mortgage portfolio, which we began servicing in January 2012. The increase in the gain on loans held for sale was a result of the $2,528.5 million, or 110.6%, increase in the amount of loans originated during the 2012 period compared to the 2011 period, higher margins earned on the sale of residential mortgage loans during the period and an increase in the value of our outstanding derivative financial instruments as a result of an increase in our outstanding mortgage loan commitments.

Expenses and impairments increased $162.1 million to $381.8 million for the nine months ended September 30, 2012 from $219.7 million for the nine months ended September 30, 2011, primarily due to the increase in compensation expenses related

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to increased staffing levels in order to accommodate our larger servicing portfolio and originations volumes as well as other related increases in general and administrative expenses.

Other expense increased $42.4 million to $75.0 million for the nine months ended September 30, 2012 from $32.6 million for the nine months ended September 30, 2011, primarily due to a decrease in our net interest margin resulting from higher average outstanding balances on our outstanding warehouse and advance facilities combined with a higher average outstanding balance on our senior unsecured notes.

For the nine months ended September 30, 2012, we incurred tax expense of $40.6 million, with no corresponding expense during the comparable 2011 period. During March 2012, we became a taxable entity in conjunction with our initial public offering.

Segment Results

Our primary business strategy is to generate recurring, stable income from managing and growing our servicing portfolio. We operate through two business segments: the Servicing Segment and the Originations Segment, which we refer to collectively as our Operating Segments. We report the activity not related to either operating segment in Legacy Portfolio and Other. Legacy Portfolio and Other includes primarily all subprime mortgage loans originated mostly from April to July 2007 or acquired, and VIEs which were consolidated pursuant to the adoption of consolidation guidance related to VIEs. As of September 30, 2012, we had no consolidated VIEs.

The accounting policies of each reportable segment are the same as those of the consolidated financial statements except for (i) expenses for consolidated back-office operations and general overhead expenses such as executive administration and accounting and (ii) revenues generated on inter-segment services performed. Expenses are allocated to individual segments based on the estimated value of the services performed, including total revenue contributions, personnel headcount, and the equity invested in each segment. Revenues generated on inter-segment services performed are valued based on similar serviced provided to external parties.

Servicing Segment

The Servicing Segment provides loan servicing on our primary and subservicing portfolios, including the collection of principal and interest payments and the generation of ancillary fees related to the servicing of mortgage loans. We also service approximately $27.3 billion in reverse residential mortgage loans which we acquired in 2012. Servicing reverse mortgage loans involves monitoring the condition of the property, advancing for delinquent taxes and insurance, advancing for line of credit draws, and dealing with foreclosure and recovery in the event of default.

Increase in aggregate UPB of our servicing portfolio primarily governs the increase in revenues, expenses and other income (expense) of our Servicing Segment.

The table below provides detail of the UPB of our servicing portfolio at the periods indicated.

	September 30, 2012		September 30, 2011
Servicing Portfolio (in millions)
Unpaid principal balance (by investor):
Special servicing	$	10,751	$	10,621
Government-sponsored enterprises	92,695		62,085
Non-Agency securitizations	55,453		19,821
Total boarded forward servicing portfolio	158,899		92,527
Acquired Servicing Rights owned - serviced by others	5,226		—
Acquired Servicing Rights owned - serviced by predecessor	6,134		10,189
Total forward servicing portfolio	170,259		102,716
Reverse mortgage servicing	27,313		—
Total servicing portfolio unpaid principal balance	$	197,572	$	102,716

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The table below provides detail of the characteristics and key performance metrics of our forward servicing portfolio for the periods indicated.

Nine months ended September 30,	2012 (1)			2011
($ in millions, except for average loan amount)
Loan count-servicing	879,058			550,283
Ending unpaid principal balance	$	158,899		$	92,527
Average unpaid principal balance	$	117,405		$	78,351
Average loan amount	$	180,761		$	168,144
Average coupon	5.36		%	5.46		%
Average FICO	669			667
60+ delinquent (% of loans) (2)	13.7		%	14.7		%
Total prepayment speed (12 month constant pre-payment rate)	15.6		%	12.5		%

(1) 2012 characteristics and key performance metrics of our servicing portfolio exclude approximately $6.1 billion and approximately 33,000 units of forward residential mortgage loans acquired. These loans were boarded in October 2012 and have been excluded from our key performance metrics above. Additionally, these characteristics and key performance metrics exclude forward residential mortgage servicing rights serviced by others.

(2) 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.

The table below provides detail of the characteristics and key performance metrics of our reverse servicing portfolio for the nine months ended September 30, 2012.

Nine months ended September 30,	2012
($ in millions, except for average loan amount)
Loan count	166,015
Ending unpaid principal balance	$	27,313
Average loan amount	$	164,004
Average coupon	3.02		%
Average borrower age	76

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Servicing Fee Income

Servicing fee income consists of the following for the periods indicated (in thousands).

	For the three months ended September 30,						For the nine months ended September 30,
	2012			2011			2012			2011
Servicing fee income	$	113,154		$	51,837		$	255,847		$	145,237
Loss mitigation and performance-based incentive fees	5,787			4,713			20,741			8,896
Modification fees	17,186			10,485			31,718			23,485
Late fees and other ancillary charges	8,048			5,860			22,342			17,981
Reverse mortgage fees	8,303			—			18,446			—
Other servicing fee related revenues	485			360			614			(37		)
Total servicing fee income before MSR fair value adjustments	152,963			73,255			349,708			195,562
Fair value adjustments on excess spread financing	2,213			—			(5,050		)	—
Reverse mortgage servicing amortization/accretion	2,652			—			3,276			—
MSR fair value adjustments	(22,430		)	(19,035		)	(42,810		)	(30,757		)
Total servicing fee income	$	135,398		$	54,220		$	305,124		$	164,805

The following tables provide servicing fee income and UPB by primary servicing, subservicing and reverse servicing for and at the periods indicated (in thousands).

	For the three months ended September 30,				For the nine months ended September 30,
	2012		2011		2012		2011
Primary servicing	$	113,204	$	39,154	$	234,554	$	112,235
Subservicing	31,456		34,101		96,708		83,327
Reverse servicing	8,303		—		18,446		—
Total servicing fee income before MSR fair value adjustments	$	152,963	$	73,255	$	349,708	$	195,562

	September 30, 2012		September 30, 2011
UPB (in millions)
Primary servicing	$	123,132	$	36,527
Subservicing	47,127		56,000
Reverse servicing	27,313		—
Total unpaid principal balance	$	197,572	$	92,527

Servicing Segment for the Three Months Ended September 30, 2012 and 2011

Service Fee Income

Servicing fee income was $135.4 million for the three months ended September 30, 2012 compared to $54.2 million for the three months ended September 30, 2011, an increase of $81.2 million, or 149.8%, primarily due to the net effect of the following:

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• Increase of $61.4 million due to higher average UPB on our forward servicing portfolio, which increased to $160.3 billion in the 2012 period compared to $83.7 billion in the comparable 2011 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 $82.8 billion in the 2012 period compared to $56.4 billion in the comparable 2011 period. In addition, we also experienced an increase in average UPB for our private asset-backed securitizations portfolio, which increased to $36.4 billion in the three months ended September 30, 2012 compared to $13.3 billion in the comparable 2011 period.

• Increase of $1.1 million due to increased loss mitigation and performance-based incentive fees earned from a GSE.

• Increase of $6.7 million due to higher modification fees earned from HAMP and non-HAMP modifications.

• Increase of $2.1 million from increased collections from late fees and other ancillary charges.

• Increase of $8.3 million from fees earned from our reverse mortgage portfolio for which we began servicing in January 2012.

• Decrease of $3.4 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 expenses 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 includes the estimated effects of loan modifications on expected cash flows. 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 major market participants would 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. Additionally, several state attorneys general have previously requested that certain mortgage servicers, including us, suspend foreclosure proceedings pending internal review to ensure compliance with applicable law, and we received requests from four such state attorneys general. Although we have resumed those previously delayed proceedings, 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 believe major market participants would use to value their MSRs. We periodically compare our internal MSR valuation to third-party valuation of our MSRs to help substantiate our market assumptions. We have considered the costs related to the delayed proceedings in our assumptions and we do not believe that any resulting decrease in the MSR was material given the expected short-term nature of the issue.

• Increase of $2.2 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 65% 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.

Other Fee Income

Other fee income was $6.5 million for the three months ended September 30, 2012 compared to $3.8 million for the three months ended September 30, 2011, an increase of $2.7 million, or 71.1%, due to higher commissions earned on lender placed insurance and higher REO sales commissions.

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The following table provides other fee income by primary servicing, subservicing and adjacent businesses for the periods indicated (in thousands).

	For the three months ended  September 30,
	2012		2011
Primary servicing	$	430	$	1,002
Subservicing	16		726
Adjacent businesses	6,011		2,044
Total other fee income	$	6,457	$	3,772

Expenses and Impairments

Expenses and impairments were $95.3 million for the three months ended September 30, 2012 compared to $47.9 million the three months ended September 30, 2011, an increase of $47.4 million, or 99.0%, primarily due to the increase of $25.0 million in salaries, wages and benefits expense resulting primarily from an increase in average headcount from 1,607 in the 2011 period to 2,342 in the 2012 period and an increase of $19.6 million in general and administrative and occupancy-related expenses associated with increased headcount and growth in the servicing portfolio.

The following table provides primary servicing, subservicing, reverse servicing, adjacent businesses and other Servicing Segment expenses for the periods indicated (in thousands).

	For the three months ended September 30,
	2012		2011
Primary servicing	$	43,206	$	18,507
Subservicing	31,124		24,616
Reverse servicing	8,902		—
Adjacent businesses	8,489		2,717
Other Servicing Segment expenses	3,575		2,034
Total expenses and impairments	$	95,296	$	47,874

Other Servicing Segment expenses primarily includes share-based compensation expenses.

Other Income (Expense)

Total other expense was $41.1 million for the three months ended September 30, 2012 compared to $13.3 million for the three months ended September 30, 2011, an increase in expense, net of income, of $27.8 million, or 209.0%, primarily due to the net effect of the following:

• Interest income was $12.5 million for the three months ended September 30, 2012 compared to $1.0 million for the three months ended September 30, 2011, an increase of $11.5 million primarily attributable to interest earned on our outstanding participating interests in reverse mortgages of $13.4 million, with no respective interest amounts earned in the comparable 2011 period.

• Interest expense was $53.8 million for the three months ended September 30, 2012 compared to $14.2 million for the three ended September 30, 2011, an increase of $39.6 million, or 278.9%, primarily due to higher average outstanding debt of $2,658.3 million for the three months ended September 30, 2012 compared to $620.5 million in the comparable 2011 period. The impact of the higher debt balances is partially offset by lower interest rates due to declines in the base LIBOR and decreases in the overall index margin on outstanding servicer advance facilities. Interest expense from the senior unsecured notes was $15.7 million and $7.5 million, for the three months ended September 30, 2012 and 2011, respectively. Interest expense for the three months ended September 30, 2011 also includes gains for the ineffective portion of a cash flow hedge of $0.6 million, with no respective amounts for the 2012 period.

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Servicing Segment for the Nine Months Ended September 30, 2012 and 2011

Servicing Fee Income

Servicing fee income was $305.1 million for the nine months ended September 30, 2012 compared to $164.8 million for the nine months ended September 30, 2011, an increase of $140.3 million, or 85.1%, primarily due to the net effect of the following:

• Increase of $110.6 million due to higher average UPB on our forward servicing portfolio, which increased to $117.4 billion in the 2012 period compared to $71.9 billion in the comparable 2011 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 of $81.2 billion in the 2012 period compared to $57.1 billion in the comparable 2011 period. In addition, we also experienced an increase in average UPB for our private asset-backed securitizations portfolio, which increased to $37.2 billion in the nine months ended September 30, 2012 compared to $13.5 billion in the comparable 2011 period.

• Increase of $11.8 million due to increased loss mitigation and performance-based incentive fees earned from a GSE.

• Increase of $8.2 million due to higher modification fees earned from HAMP and non-HAMP modifications.

• Increase of $4.3 million from higher collections from late fees and other ancillary charges.

• Increase of $18.4 million from fees earned from our reverse mortgage portfolio for which we began servicing in January 2012.

• Decrease of $12.0 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 expenses 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 includes the estimated effects of loan modifications on expected cash flows. 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 major market participants would 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. Additionally, several state attorneys general have previously requested that certain mortgage servicers, including us, suspend foreclosure proceedings pending internal review to ensure compliance with applicable law, and we received requests from four such state attorneys general. Although we have resumed those previously delayed proceedings, 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 believe major market participants would use to value their MSRs. We periodically compare our internal MSR valuation to third party valuation of our MSRs to help substantiate our market assumptions. We have considered the costs related to the delayed proceedings in our assumptions and we do not believe that any resulting decrease in the MSR was material given the expected short-term nature of the issue.

• Decrease of $5.1 million from change in fair value of our excess spread financing arrangement. 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 65% 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.

Other Fee Income

Other fee income was $19.7 million for the nine months ended September 30, 2012 compared to $10.4 million for the nine months ended September 30, 2011, an increase of $9.3 million, or 89.4%, due to higher commissions earned on lender placed insurance and higher REO sales commissions.

The following table provides other fee income by primary servicing, subservicing and adjacent businesses for the periods indicated (in thousands).

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	For the nine months ended  September 30,
	2012		2011
Primary servicing	$	3,711	$	3,154
Subservicing	2,339		1,895
Adjacent businesses	13,678		5,387
Total other fee income	$	19,728	$	10,436

Expenses and Impairments

Expenses and impairments were $228.2 million for the nine months ended September 30, 2012 compared to $128.2 million the nine months ended September 30, 2011, an increase of $100.0 million, or 78.0%, primarily due to the increase of $42.4 million in salaries, wages and benefits expense resulting primarily from an increase in average headcount from 1,441 in the 2011 period to 2,246 in the 2012 period and an increase of $53.7 million in general and administrative and occupancy-related expenses associated with increased headcount and growth in the servicing portfolio.

The following table provides primary servicing, subservicing, reverse servicing, adjacent businesses and other Servicing Segment expenses for the periods indicated (in thousands).

	For the nine months ended September 30,
	2012		2011
Primary servicing	$	97,444	$	51,167
Subservicing	87,445		58,593
Reverse servicing	17,965		—
Adjacent businesses	13,354		6,224
Other Servicing Segment expenses	11,974		12,193
Total expenses and impairments	$	228,182	$	128,177

Other servicing segment expense primarily includes share-based compensation expense.

Other Income (Expense)

Total other expense was $76.2 million for the nine months ended September 30, 2012 compared to $38.6 million for the nine months ended September 30, 2011, an increase in expense, net of income, of $37.6 million, or 97.4%, primarily due to the net effect of the following:

• Interest income was $22.4 million for the nine months ended September 30, 2012 compared to $2.5 million for the nine months ended September 30, 2011, an increase of $19.9 million primarily attributable to interest earned on our outstanding participating interests in reverse mortgages of $23.3 million, with no respective interest amounts earned in the comparable 2011 period.

• Interest expense was $90.1 million for the nine months ended September 30, 2012 compared to $41.1 million for the nine ended September 30, 2011, an increase of $49.0 million, or 119.2%, primarily due to higher average outstanding debt of $1,515.1 million for the nine months ended September 30, 2012 compared to $618.2 million in the comparable 2011 period. The impact of the higher debt balances is partially offset by lower interest rates due to declines in the base LIBOR and decreases in the overall index margin on outstanding servicer advance facilities. Interest expense from the senior unsecured notes was $37.8 million and $22.5 million, respectively, for the nine months ended September 30, 2012 and 2011. Interest expense for September 30, 2011 also includes gains for the ineffective portion of a cash flow hedge of $2.0 million, with no respective amounts for the 2012 period.

Originations Segment

The Originations Segment involves the origination, packaging, and sale of GSE mortgage loans into the secondary markets via whole loan sales or securitizations.

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Increase in originations volume primarily governs the increase in revenues, expenses and other income (expense) of our Originations Segment. The table below provides detail of the loan characteristics of loans originated for the periods indicated.

	For the three months ended September 30,				For the nine months ended September 30,
Originations Volume (in millions)	2012		2011		2012		2011
Retail	$	977.0	$	590.3	$	2,861.7	$	1,505.9
Wholesale	840.7		317.2		1,952.3		779.7
Total Originations	$	1,817.7	$	907.5	$	4,814.0	$	2,285.6

Originations Segment for the Three Months Ended September 30, 2012 and 2011

Originations Revenue

Total revenues were $135.2 million for the three months ended September 30, 2012 compared to $33.5 million for the three months ended September 30, 2011, an increase of $101.7 million, or 303.6%, primarily due to the net effect of the following:

• Other fee income was ($4.1) million for the three months ended September 30, 2012 compared to $3.1 million for the three months ended September 30, 2011, a decrease of $7.2 million, or 232.3%, primarily due to an increase in net points and fees collected of $3.7 million offset by an increase in broker fees paid of $10.4 million.

Gain on mortgage loans held for sale consists of the following for the periods indicated (in thousands).

	For the three months ended September 30,
	2012			2011
Gain on sale	$	94,437		$	16,270
Provision for repurchases	(3,352		)	(778		)
Capitalized servicing rights	13,450			7,762
Fair value mark-to-market adjustments	(6,455		)	6,161
Mark-to-market on derivatives/hedges	41,179			937
Total gain on mortgage loans held for sale	$	139,259		$	30,352

Gain on mortgage loans held for sale was $139.3 million for the three months ended September 30, 2012, compared to $30.4 million for the three months ended September 30, 2011, an increase of $108.9 million, or 358.2%, primarily due to the net effect of the following:

• Increase of $78.1 million from larger volume of originations, which increased to $1.8 billion in 2012 from $0.9 billion in 2011, and higher margins earned on the sale of residential mortgage loans during the period.

• Increase of $5.7 million from capitalized MSRs due to the larger volume of originations and subsequent retention of MSRs.

• Increase of $40.3 million from change in unrealized gains/losses on derivative financial instruments. These include IRLCs and forward sales of MBS.

• Decrease of $12.7 million resulting from the change in fair value on newly-originated loans.

• Decrease of $2.6 million from a larger provision for repurchases as a result of the increase in our loan sale volume.

Expenses and Impairments

Expenses and impairments were $56.5 million for the three months ended September 30, 2012 compared to $25.9 million for the three months ended September 30, 2011, an increase of $30.6 million, or 118.1%, primarily due to the net effect of the following:

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• Increase of $22.6 million in salaries, wages and benefits expense from increase in average headcount of 1,181 in 2012 from 799 in 2011 and increases in performance-based compensation due to increases in originations volume.

• Increase of $8.0 million in general and administrative and occupancy expense primarily due to an increase in our overhead expenses from the higher originations volume in the 2012 period.

Other Income and Expenses

Total other income (expense) was ($1.6) million for the three months ended September 30, 2012 compared to $0.0 million for the three months ended September 30, 2011, an increase in expense, net of income, of $1.6 million primarily due to the net effect of the following:

• Interest income was $6.2 million for the three months ended September 30, 2012 compared to $3.1 million for the three months ended September 30, 2011, an increase of $3.1 million, or 100.0%, 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 $7.7 million for the three months ended September 30, 2012 compared to $3.0 million for the three months ended September 30, 2011, an increase of $4.7 million, or 156.7%, primarily due to an increase in originations volume in 2012 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 $0.6 million in additional amortization on our outstanding debt facilities due to recent amendments and modifications on our outstanding warehouse facilities.

Originations Segment for the Nine Months Ended September 30, 2012 and 2011

Originations Revenue

Total revenues were $313.8 million for the nine months ended September 30, 2012 compared to $84.8 million for the nine months ended September 30, 2011, an increase of $229.0 million, or 270.0%, primarily due to the net effect of the following:

Other fee income was $1.7 million for the nine months ended September 30, 2012 compared to $11.0 million for the nine months ended September 30, 2011, a decrease of $9.3 million, or 84.5%, primarily due to a decrease in net points and fees collected as a result of an increase in fees paid to third party mortgage brokers. Our wholesale originations business operates largely through third-party mortgage brokers. For the nine months ended September 30, 2012, wholesale consisted of 40.6% of our total origination volume, compared to 34.1% for the comparable 2011 period.

Gain on mortgage loans held for sale consists of the following for the periods indicated (in thousands).

	For the nine months ended September 30,
	2012			2011
Gain on sale	$	186,933		$	42,260
Provision for repurchases	(9,134		)	(2,978		)
Capitalized servicing rights	37,578			25,748
Fair value mark-to-market adjustments	18,838			9,292
Mark-to-market on derivatives/hedges	77,879			(490		)
Total gain on mortgage loans held for sale	$	312,094		$	73,832

Gain on mortgage loans held for sale was $312.1 million for the nine months ended September 30, 2012, compared to $73.8 million for the nine months ended September 30, 2011, an increase of $238.3 million, or 322.9%, primarily due to the net effect of the following:

• Increase of $144.6 million from larger volume of originations, which increased to $4.8 billion 2012 from $2.3 billion in 2011, and higher margins earned on the sale of residential mortgage loans during the period.

• Increase of $11.9 million from capitalized MSRs due to the larger volume of originations and subsequent retention of MSRs.

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• Increase of $9.5 million resulting from the change in fair value on newly-originated loans.

• Increase of $78.4 million from change in unrealized gains/losses on derivative financial instruments. These include IRLCs and forward sales of MBS.

• Decrease of $6.1 million from an increase in our provision for repurchases as a result of the increase in our loan sale volume.

Expenses and Impairments

Expenses and impairments were $132.9 million for the nine months ended September 30, 2012 compared to $71.4 million for the nine months ended September 30, 2011, an increase of $61.5 million, or 86.1%, primarily due to the net effect of the following:

• Increase of $45.5 million in salaries, wages and benefits expense from increase in average headcount of 997 in 2012 from 752 in 2011 and increases in performance-based compensation due to increases in originations volume.

• Increase of $16.0 million in general and administrative and occupancy expense primarily due to an increase in our overhead expenses from the higher originations volume in the 2012 period.

Other Income and Expenses

Total other income (expense) was ($0.8) million for the nine months ended September 30, 2012 compared to $1.1 million for the nine months ended September 30, 2011, an increase in expense, net of income, of $1.9 million, or 172.7% primarily due to the net effect of the following:

• Interest income was $14.7 million for the nine months ended September 30, 2012 compared to $8.6 million for the nine months ended September 30, 2011, an increase of $6.1 million, or 70.9%, 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 $15.5 million for the nine months ended September 30, 2012 compared to $7.5 million for the nine months ended September 30, 2011, an increase of $8.0 million, or 106.7%, primarily due to an increase in originations volume in 2012 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 an additional $1.7 million in amortization on our outstanding debt facilities due to recent amendments and modifications on our outstanding warehouse facilities.

Legacy Portfolio and Other

Our Legacy Portfolio and Other consist primarily of non-prime and nonconforming residential mortgage loans that we primarily originated from April to July 2007. Revenues and expenses are primarily a result of mortgage loans transferred to securitization trusts that were structured as secured borrowings, resulting in carrying the securitized loans as mortgage loans on our consolidated balance sheets and recognizing the asset-backed certificates as nonrecourse debt. These loans were transferred on October 1, 2009, from mortgage loans held for sale to a held-for-investment classification at fair value on the transfer date. Subsequent to the transfer date, we completed the securitization of the mortgage loans, which was structured as a secured borrowing. This structure resulted in carrying the securitized loans as mortgages on our consolidated balance sheet and recognizing the asset-backed certificates acquired by third parties as nonrecourse debt.

Effective January 1, 2010, new accounting guidance eliminated the concept of a QSPE. Consequently, all existing securitization trusts are considered VIEs and are now subject to the new consolidation guidance. Upon consolidation of certain of these VIEs, we recognized the securitized mortgage loans related to these securitization trusts as mortgage loans held for investment, subject to ABS nonrecourse debt. See “Note 3 – Variable Interest Entities and Securitizations” to our Consolidated Financial Statements. Additionally, we elected the fair value option provided for by ASC 825-10, Financial Instruments-Overall. Assets and liabilities related to these VIEs are included in Legacy Assets and Other in our segmented results.

In December 2011, we sold our remaining variable interest in a securitization trust that had been a consolidated VIE since January 1, 2010 and deconsolidated the variable interest. Upon deconsolidation of this VIE, we derecognized the related mortgage loans held for investment, subject to ABS nonrecourse debt and the ABS nonrecourse debt.

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The table below provides detail of the characteristics of our securitization trusts included in Legacy Portfolio and other for the periods indicated (in thousands).

	September 30,
	2012		2011 (1)
Performing – UPB	$	278,367	$	982,510
Nonperforming (90+ Delinquency) - UPB	83,107		295,082
REO - Estimated Fair Value	3,193		15,411
Total Legacy Portfolio and Other – UPB	$	364,667	$	1,293,003

(1) Amounts include one previously off-balance sheet securitization which was consolidated upon adoption of ASC 810, Consolidation, related to consolidation of certain VIEs.

Legacy Portfolio and Other for the Three Months Ended September 30, 2012 and 2011

Total revenues were $0.5 million for the three months ended September 30, 2012 compared to $1.3 million for the three months ended September 30, 2011, a decrease of $0.8 million. This decrease was primarily a result of decreased ancillary income on our legacy portfolio.

Total expenses and impairments were $3.1 million for the three months ended September 30, 2012 compared to $9.6 million for the three months ended September 30, 2011, a decrease of $6.5 million, or 67.7%. This change was primarily related REO that was deconsolidated in December 2011 on the previously consolidated VIE.

Interest income, net of interest expense, decreased to $1.0 million for the three months ended September 30, 2012 as compared to $1.3 million for the three months ended September 30, 2011. The decrease in net interest income was primarily due to the effects of the derecognition of a previously consolidated VIE as of December 31, 2011.

Fair value changes in ABS securitizations were ($0.7) million for the three months ended September 30, 2011, with no related charges for the 2012 period due to the ABS nonrecourse debt and related mortgage loans held for investment and related REO that was deconsolidated in December 2011 on the previously consolidated VIE.

In addition, we recorded a charge to loss on interest rate swaps and caps of $1.3 million for the three months ended September 30, 2012, with no corresponding charge taken during the comparable 2011 period. In conjunction with the Reorganization, FIF contributed outstanding interest rate swaps in March 2012 to Nationstar. These interest rate swaps on ABS debt generally require Nationstar to pay a fixed interest rate and receive a variable interest rate based on LIBOR. These interest rate swaps have not been designated as accounting hedges.

Legacy Portfolio and Other for the Nine Months Ended September 30, 2012 and 2011

Total revenues were $1.7 million for the nine months ended September 30, 2012 compared to $3.8 million for the nine months ended September 30, 2011, a decrease of $2.1 million. This decrease was primarily a result of decreased ancillary income on our legacy portfolio.

Total expenses and impairments were $20.7 million for the nine months ended September 30, 2012 compared to $20.4 million for the nine months ended September 30, 2011, an increase of $0.3 million, or 1.5%. This change was primarily related REO that was deconsolidated in December 2011 on the previously consolidated VIE.

Interest income, net of interest expense, decreased to $2.8 million for the nine months ended September 30, 2012 as compared to $6.6 million for the nine months ended September 30, 2011. The decrease in net interest income was primarily due to the effects of the derecognition of a previously consolidated VIE as of December 31, 2011.

Fair value changes in ABS securitizations were ($6.9) million for the nine months ended September 30, 2011, with no related charges for the 2012 period due to the ABS nonrecourse debt and related mortgage loans held for investment and related REO that was deconsolidated in December 2011 on the previously consolidated VIE.

In addition, we recorded a charge to loss on interest rate swaps and caps of $2.1 million for the nine months ended September 30, 2012, with no corresponding charge taken during the comparable 2011 period. In conjunction with the Reorganization, FIF contributed outstanding interest rate swaps in March 2012 to Nationstar. These interest rate swaps on ABS debt generally

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require Nationstar to pay a fixed interest rate and receive a variable interest rate based on LIBOR. These interest rate swaps have not been designated as accounting hedges.

Analysis of Items on Consolidated Balance Sheet

Assets

Restricted cash consists of certain custodial accounts related to collections on certain mortgage loans and mortgage loan advances that have been pledged to debt counterparties under various master repurchase agreements (MRAs). Restricted cash was $258.9 million at September 30, 2012, an increase of $187.4 million from December 31, 2011, primarily a result of higher servicer advance reimbursement amounts. Additionally, in 2012, we began servicing reverse residential mortgages. Our September 2012 restricted cash balance contains approximately $68.1 million in custodial deposits related to reverse mortgage loans which will be remitted to certain GSEs as required under various securities agreements.

Accounts receivable consists primarily of accrued interest receivable on mortgage loans and securitizations, collateral deposits on surety bonds and advances made to nonconsolidated securitization trusts, as required under various servicing agreements related to delinquent loans, which are ultimately paid back to us from the securitization trusts. Accounts receivable increased $2.3 billion to $2.9 billion at September 30, 2012, primarily due to the acquisition of the Aurora MSRs and related advances.

Mortgage loans held for sale are carried at fair value. We estimate fair value by evaluating a variety of market indicators including recent trades and outstanding commitments. Mortgage loans held for sale were $703.2 million at September 30, 2012, an increase of $244.6 million from December 31, 2011, primarily due to $4.8 billion of loan originations during the 2012 period offset by $4.6 billion in mortgage loan sales.

Mortgage loans held for investment, subject to nonrecourse debt - Legacy Assets consist of nonconforming or subprime mortgage loans securitized which serve as collateral for the nonrecourse debt. Mortgage loans held for investment, subject to nonrecourse debt - Legacy Assets was $238.2 million at September 30, 2012, a decrease of $5.3 million from December 31, 2011, as $3.4 million was transferred to REO during the nine months ended September 30, 2012.

Reverse mortgage interests consists of scheduled and unscheduled draws on reverse residential mortgage loans, capitalized interest and servicing fees, and fees paid to taxing authorities to cover unpaid taxes and insurance. In January and June 2012, we purchased the servicing rights to certain reverse mortgages. Reverse mortgage interests were $452.9 million at September 30, 2012, with no corresponding balance at December 31, 2011.

Receivables from affiliates consist of periodic transactions with Nationstar Regular Holdings, Ltd., a subsidiary of FIF. These transactions typically involve the monthly payment of principal and interest advances that are required to be remitted to securitization trusts as required under various Pooling and Servicing Agreements. These amounts are later repaid to us when principal and interest advances are recovered from the respective borrowers. Receivables from affiliates were $13.3 million at September 30, 2012, an increase of $8.7 million from December 31, 2011. Prior to our March 2012 restructuring in conjunction with our initial public offering, FIF contributed a portion of the outstanding balance in receivables from affiliates related to outstanding interest rate swap settlements to the Company eliminating this payable amount.

MSRs at fair value consist of servicing assets related to all existing forward residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting or through the acquisition of the right to service residential mortgage loans that do not relate to our assets. MSRs were $592.7 million at September 30, 2012, an increase of $341.6 million over December 31, 2011, primarily a result of the purchase of servicing portfolios for $347.3 million combined with capitalization of $37.6 million newly created MSRs, and a $42.8 million decrease in the fair value of our MSRs.

MSRs at amortized cost of $8.0 million at September 30, 2012 represents MSRs for certain reverse loans that we acquired during 2012. Prior to 2012, we had no reverse mortgage servicing rights. Our MSRs for reverse loans are treated as a separate class of servicing assets.

Property and equipment, net is comprised of land, furniture, fixtures, leasehold improvements, computer software, computer hardware, and software in development and other. These assets are stated at cost less accumulated depreciation. Property and equipment, net was $48.7 million at September 30, 2012, an increase of $24.6 million from December 31, 2011, as we invested in information technology systems to support volume growth in both our Servicing and Originations Segments, as well as the addition of certain property acquired from the Aurora purchase.

REO, net represents property we acquired as a result of foreclosures on delinquent mortgage loans. REO, net is recorded at estimated fair value, less costs to sell, at the date of foreclosure. Any subsequent operating activity and declines in value are

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charged to earnings. REO, net was $3.2 million at September 30, 2012, a decrease of $0.5 million from December 31, 2011. This change was primarily due to the transfer of $3.4 million of mortgage loans held for investment to REO, offset by liquidations.

Other assets include deferred financing costs, derivative financial instruments, prepaid expenses, loans subject to repurchase rights from Ginnie Mae and equity method investments. Other assets increased $232.2 million from December 31, 2011 to $338.4 million, primarily due to an increase of $101.3 million in derivative financial instruments, $22.8 million increase in loans subject to repurchase rights from Ginnie Mae, and an increase in margin call deposits of $25.3 million. In addition, we had $72 million placed in escrow at September 30, 2012 related to our definitive agreement to acquire certain assets from Residential Capital, LLC (see Note 8, Other Assets).

Liabilities and Shareholders' Equity

At September 30, 2012, total liabilities were $5.3 billion, a $3.8 billion increase from December 31, 2011. The increase was primarily due to a $1.6 billion increase in notes payable, our issuance of $275 million in unsecured senior notes in April 2012, our issuance of $100 million in unsecured senior notes in July 2012, and our issuance of $400 million in unsecured senior notes in September 2012. In addition, we had an increase in payables and accrued liabilities of $578.5 million and an increase in excess spread financing of $210.9 million. The increases are generally the result of our acquisitions of MSR portfolios, including Aurora, the increase in our mortgage origination business and our entry into servicing reverse mortgages.

Included in our payables and accrued liabilities caption on our balance sheet is our reserve for repurchases and indemnifications of $15.1 million and $10.0 million at September 30, 2012 and December 31, 2011, respectively. This liability represents our (i) estimate of losses to be incurred on the repurchase of certain loans that we previously sold and (ii) estimate of losses to be incurred for indemnification of losses incurred by purchasers or insurers with respect to loans that we sold. Certain sale contracts include provisions requiring us to repurchase a loan or indemnify the purchaser or insurer for losses if a borrower fails to make certain initial loan payments due to the acquirer or if the accompanying mortgage loan fails to meet certain customary representations and warranties. These representations and warranties are made to the loan purchasers or insurers about various characteristics of the loans, such as the manner of origination, the nature and extent of underwriting standards applied and the types of documentation being provided and typically are in place for the life of the loan. Although the representations and warranties are in place for the life of the loan, we believe that most repurchase requests occur within the first five years of the loan. In the event of a breach of the representations and warranties, we may be required to either repurchase the loan or indemnify the purchaser for losses it sustains on the loan. In addition, an investor may request that we refund a portion of the premium paid on the sale of mortgage loans if a loan is prepaid within a certain amount of time from the date of sale. We record a provision for estimated repurchases, loss indemnification and premium recapture on loans sold, which is charged to gain (loss) on mortgage loans held for sale.

The activity of our outstanding repurchase reserves were as follows for the periods indicated (in thousands).

	Nine Months Ended September 30, 2012			Year Ended December 31, 2011
Repurchase reserves, beginning of period	$	10,026		$	7,321
Additions	9,226			5,534
Charge-offs	(4,197		)	(2,829		)
Repurchase reserves, end of period	$	15,055		$	10,026

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The following table summarizes the changes in UPB and loan count related to unresolved repurchase and indemnification requests for the periods indicated (dollars in millions):

	Nine Months Ended September 30, 2012					Year Ended December 31, 2011
	UPB			Count		UPB			Count
Beginning balance	$	12.9		62		$	4.3		21
Repurchases & indemnifications	(5.5		)	(26	)	(6.9		)	(37	)
Claims initiated	17.7			103		32.4			155
Rescinded	(13.6		)	(64	)	(16.9		)	(77	)
	$	11.5		75		$	12.9		62

The following table details our loan sales by period (dollars in billions):

	Nine Months Ended September 30, 2012			Year Ended December 31,
	2012			2011			2010			2009			2008			Total
	$		Count	$		Count	$		Count	$		Count	$		Count	$		Count
Loan Sales	$	4.6	21,172	$	3.3	16,629	$	2.6	13,090	$	1.0	5,344	$	0.5	3,412	$	12.0	59,647

We increase the reserve by applying an estimated loss factor to the principal balance of loan sales. Secondarily, the reserve may be increased based on outstanding claims received. We have observed an increase in repurchase requests in each of the last four years. We believe that because of the increase in our loan originations since 2008, repurchase requests are likely to increase. Should home values continue to decrease, our realized loan losses from loan repurchases and indemnifications may increase as well. As such, our reserve for repurchases may increase beyond our current expectations. While the ultimate amount of repurchases and premium recapture is an estimate, we consider the liability to be adequate at each balance sheet date.

At September 30, 2012, total shareholders' equity was $691.2 million, a $409.9 million increase from December 31, 2011, which is primarily attributable to net income of $141.5 million in the 2012 period, $246.7 million in IPO proceeds, contributions of $12.8 million from FIF, $10.7 million in share-based compensation, offset by a tax withholding of $4.6 million related to a share based settlement of common stock by management.

Impact of Inflation and Changing Prices

Our consolidated financial statements and notes thereto presented herein have been prepared in accordance with GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering the changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of our operations. Unlike most industrial companies, nearly all of our assets and liabilities are monetary in nature. As a result, interest rates have a greater impact on our performance than do the effects of general levels of inflations. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

Recent Accounting Developments

See Note 2, Recent Accounting Developments, of the notes to the consolidated financial statements for details of recently issued accounting pronouncements and their expected impact on our consolidated financial statements.

Liquidity and Capital Resources

Liquidity measures our ability to meet potential cash requirements, including the funding of servicing advances, the payment of operating expenses, the originations of loans and the repayment of borrowings. Our cash balance increased from $62.4 million as of December 31, 2011 to $430.8 million as of September 30, 2012, primarily due to cash outflows in our operating and investing activities, offset by cash inflows from financing activities.

In March 2012 we completed an initial public offering. As part of this offering we raised approximately $247 million in additional capital, net of expenses.

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In April 2012, we completed the offering of $275.0 million aggregate principal amount of unsecured senior notes, with a maturity date of May 2019, in a private placement transaction. After deducting the initial purchasers' discounts, we received net cash proceeds of approximately $269.5 million. Under the terms of these unsecured senior notes, we pay interest biannually to the note holders at an interest rate of 9.625%. In addition, in July 2012, we issued an additional $100.0 million of unsecured senior notes as an add on to the $275.0 million of unsecured senior notes issued in April 2012.

In September 2012, we completed the offering of $300 million aggregate principal amount of unsecured senior notes, with a maturity date of October 2020, in a private placement transaction. After deduction of the initial purchasers' discounts, we received net cash proceeds of approximately $295.5 million. Under the terms of these unsecured senior notes, we pay interest biannually to the note holders at an interest rate of 7.875%. We intend to use a portion of the cash proceeds for general corporate purposes, which may include future acquisitions and transfers of servicing portfolios and/or related businesses from third parties. In addition, in September 2012, we issued an additional $100.0 million of unsecured senior notes as an add on to the $300.0 million of unsecured senior notes issued earlier in September 2012. We issued the notes with an issue premium of $0.8 million for net cash proceeds of $99.3 million.

We grew our servicing portfolio from $92.6 billion in UPB as of September 30, 2011 to $197.6 billion in UPB as of September 30, 2012. We shifted our strategy after 2007 to leverage our industry-leading servicing capabilities and capitalize on the opportunities to grow our originations platform which has led to the strengthening of our liquidity position. As a part of our shift in strategy, we ceased originating non-prime loans in 2007, and new originations have been focused on loans that are eligible to be sold to GSEs. Since 2008, substantially all originated loans have either been sold or are pending sale.

As part of the normal course of our business, we borrow money periodically to fund servicing advances and loan originations. The loans we originate are financed through several warehouse lines on a short-term basis. We typically hold the loans for approximately 30 days and then sell the loans or place them in government securitizations and repay the borrowings under the warehouse lines. We rely upon several counterparties to provide us with financing facilities to fund a portion of our servicing advances and to fund our loan originations on a short- term basis. Our ability to fund current operations depends upon our ability to secure these types of short term financings on acceptable terms and to renew or replace the financings as they expire.

At this time, we see no material negative trends that we believe would affect our access to long-term borrowings, short-term borrowings or bank credit lines sufficient to maintain our current operations, or would likely cause us to cease to be in compliance with any applicable covenants in our indebtedness or that would inhibit our ability to fund operations and capital commitments for the next 12 months.

Our primary sources of funds for liquidity include: (i) lines of credit, other secured borrowings and the unsecured senior notes; (ii) servicing fees and ancillary fees; (iii) payments received from sale or securitization of loans; (iv) payments received from mortgage loans held for sale; and (v) payments from the liquidation or securitization of our outstanding participating interests in reverse mortgage loans.

Our primary uses of funds for liquidity include: (i) funding of servicing advances; (ii) originations of loans; (iii) payment of interest expenses; (iv) payment of operating expenses; (v) repayment of borrowings; (vi) payments for acquisitions of MSRs; and (vii) scheduled and unscheduled draws on our serviced reverse residential mortgage loans.

Our servicing agreements impose on us various rights and obligations that affect our liquidity. Among the most significant of these obligations is the requirement that we advance our own funds to meet contractual principal and interest payments for certain investors and to pay taxes, insurance, foreclosure costs and various other items that are required to preserve the assets being serviced. Delinquency rates and prepayment speed affect the size of servicing advance balances. As a result of the agreement we entered into to purchase the servicing rights to certain reverse mortgages from a financial institution, we will be required to fund payments due to borrowers, which advances are typically greater than advances on forward residential mortgages. These advances are typically recovered upon weekly or monthly reimbursement or from sale in the market.

We intend to continue to seek opportunities to acquire loan servicing portfolios and/or businesses that engage in loan servicing and/or loan originations. Any future acquisitions could require substantial additional capital in excess of cash from operations. We would expect to finance the capital required for acquisitions through a combination of additional issuances of equity, corporate indebtedness, asset backed acquisition financing and/or cash from operations.

Operating Activities

Our operating activities used $619.9 million of cash flow for the nine months ended September 30, 2012 compared to providing $49.9 million of cash flow for the same period in the prior year. The increase in cash used by operating activities of $669.8

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during the 2012 period was primarily due to higher volume originations of residential mortgage loans partially offset by higher volume of sales of mortgage loans. The decrease was primarily due to the net effect of the following:

• Decrease of $2,528.4 million due to higher originations volume. We originated $4,814.0 million in residential mortgage loans during the nine month period ended September 30, 2012, compared to $2,285.6 in mortgage originations for the comparable 2011 period. This decrease was partially offset by an increase of $2,434.5 million in our cash inflows from proceeds received from the sale of our residential mortgage loans and payments received on mortgage loans. We received $4,769.3 million in cash proceeds from loan sales and principal collections for the nine month ended September 30, 2012, compared to $2,334.8 million for the comparable 2011 period.

• Increase of $489.9 million in cash outflows used by working capital which used $488.2 million for the nine months ended September 30, 2012 compared to $1.7 million in cash inflow for the comparable 2011 period.

Investing Activities

Our investing activities used $2,074.3 million and $9.8 million of cash flow for the nine months ended September 30, 2012 and 2011, respectively. The $2,064.5 million increase in cash flows used by investing activities from the 2011 period to the 2012 period was primarily a result of our two significant MSR acquisitions. In May 2012, we acquired the servicing rights of a $10.4 billion forward residential servicing portfolio, which transferred in July 2012. We made an initial deposit on this MSR purchase in June 2012 of $16.1 million. Additionally in June 2012, we acquired the servicing rights of another $63 billion forward residential servicing portfolio, which primarily transferred in July 2012. Total cash used in the acquisition of our 2012 MSR acquisitions, which includes the related advances, was approximately $2.0 billion.

Financing Activities

Our financing activities provided $3,062.6 million and used $37.4 million of cash flow during the nine months ended September 30, 2012 and 2011, respectively. The $3,100.0 million increase in cash flows provided by our financing activities was primarily the result of our June 2012 MSR acquisition, as we leveraged our existing facilities to finance the additional delinquency and servicer advances which were acquired. As a result of these acquisitions, combined with the increase our originations volume, we increased our borrowings on our outstanding advance and warehouse facilities to $1,659.3 million for the nine months ended September 30, 2012, as compared to a $29.0 million outstanding during the comparable 2011 period. During the nine month period ended September 30, 2012, we also completed our March 2012 initial public offering in which we raised approximately $250 million in capital, combined with proceeds from our April 2012 high yield debt offering in which we received $269.5 million in net cash proceeds. In the third quarter of 2012 we received net cash proceeds of $781.2 million through three additional unsecured senior notes offerings.

Contractual Obligations

Except as described below, there were no other significant changes to our outstanding contractual obligations as of September 30, 2012, from amounts previously disclosed in our form 10-Q filed on August 14, 2012.

In July 2012, Nationstar offered $100 million aggregate principal amount of 9.625% Senior Notes due 2019, in a private placement transaction. We issued the notes with an issue premium of $5.5 million for net cash proceeds of $103.3 million. The notes are a further issuance of the $275 million aggregate principal amount of 9.625% Senior Notes due 2019, issued in April 2012.

In September 2012, we completed the offering of $300 million aggregate principal amount of 7.875% Senior Notes due 2020, in a private placement transaction, for net cash proceeds of $295.5 million. In addition, in September 2012, we issued an additional $100 million aggregate principal amount of 7.875% of Senior Notes due 2020, in a private placement transaction. We issued the notes with an issue premium of $0.8 million for net cash proceeds of $99.3 million.

Variable Interest Entities and Off Balance Sheet Arrangements

See Note 3, Variable Interest Entities and Securitizations, of the notes of the consolidated financial statements for a summary of Nationstar's transactions with VIEs and unconsolidated balances details of their impact on our consolidated financial statements.

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Derivatives

See Note 10, Derivative Financial Instruments, of the notes of the consolidated financial statements for a summary of Nationstar's derivative transactions.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Refer to the discussion of market risks included in Part I, Item 3 of our Form 10-Q filed August 14, 2012 and herein incorporated by reference. There has been no significant change in the types of market risks faced by us since June 30, 2012.

We assess our market risk based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential impact on fair values based on hypothetical changes (increases and decreases) in interest rates.

We use a duration-based model in determining the impact of interest rate shifts on our loan portfolio, certain other interest-bearing liabilities measured at fair value and interest rate derivatives portfolios. The primary assumption used in these models is that an increase or decrease in the benchmark interest rate produces a parallel shift in the yield curve across all maturities.

We utilize a discounted cash flow analysis to determine the fair value of MSRs and the impact of parallel interest rate shifts on MSRs. The primary assumptions in this model are prepayment speeds, market discount rates and cost to service. However, this analysis ignores the impact of interest rate changes on certain material variables, such as the benefit or detriment on the value of future loan originations, non-parallel shifts in the spread relationships between MBS, swaps and U.S. Treasury rates and changes in primary and secondary mortgage market spreads. For mortgage loans, IRLCs and forward delivery commitments on MBS, we rely on a model in determining the impact of interest rate shifts. In addition, for IRLCs, the borrower’s propensity to close their mortgage loans under the commitment is used as a primary assumption.

Our total market risk is influenced by a wide variety of factors including market volatility and the liquidity of the markets. There are certain limitations inherent in the sensitivity analysis presented, including the necessity to conduct the analysis based on a single point in time and the inability to include the complex market reactions that normally would arise from the market shifts modeled.

We use market rates on our instruments to perform the sensitivity analysis. The estimates are based on the market risk sensitive portfolios described in the preceding paragraphs and assume instantaneous, parallel shifts in interest rate yield curves. These sensitivities are hypothetical and presented for illustrative purposes only. Changes in fair value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in fair value may not be linear. We do not believe that on the whole that our estimated net changes to the fair value of our assets and liabilities at September 30, 2012 would be significantly different than previously presented.

Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (Exchange Act), as of September 30, 2012.

Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of September 30, 2012, our disclosure controls and procedures are effective. Disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2012 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

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PART II – OTHER INFORMATION

Item 1.Legal Proceedings

From time to time, we are party to various legal proceedings that have arisen in the normal course of conducting business. Although the outcome of these proceedings cannot be predicted with certainty, management does not currently expect any of the proceedings pending against us, individually or in the aggregate, to have a material effect on our business, financial condition and results of operations (see Note 18, Commitments and Contingencies).

Item 1A.Risk Factors

There have been no material changes or additions to the risk factors previously disclosed under “Risk Factors” included in the Nationstar Mortgage LLC's Annual Report on Form 10-K filed with the SEC on March 15, 2012 except those described in our Form 10-Q filed with the SEC on August 14, 2012.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

On September 10, 2012, we issued 6,000 restricted shares of common stock of Nationstar Inc. to an employee. The restricted shares were issued in accordance with the terms of a separation agreement and general release. We relied on Section 4(2) of the Securities Act of 1933, as amended, for an exemption from registration of these shares.

Item 3. Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

None.

Item 5.Other Information

None.

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Item 6.Exhibits, Financial Statement Schedules

Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed or Furnished Herewith
4.1	Fourth Supplemental Indenture, dated as of August 9, 2012 among Nationstar Mortgage Holdings Inc., Nationstar Sub1 LLC, Nationstar Sub2 LLC and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.1	8/9/2012
4.2	Second Supplemental Indenture, dated as of August 9, 2012 among Nationstar Mortgage Holdings Inc., Nationstar Sub1 LLC, Nationstar Sub2 LLC and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.2	8/9/2012
4.3	First Supplemental Indenture, dated as of July 24, 2012 by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.2	7/24/2012
4.4	Fifth Supplemental Indenture, dated as of August 30, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.1	9/4/2012
4.5	Indenture, dated as of September 24, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.1	9/24/2012
4.6	First Supplemental Indenture, dated as of September 28, 2012 by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.2	9/28/2012
10.1	Registration Rights Agreement, dated as of July 24, 2012, among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers	8-K	001-35449	10.1	7/24/2012
10.2	Registration Rights Agreement, dated as of September 24, 2012, among the Issuers, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers	8-K	001-35449	10.1	9/24/2012
10.3	Registration Rights Agreement, dated as of September 28, 2012, among the Issuers, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers	8-K	001-35449	10.1	9/28/2012

76

Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed or Furnished Herewith
31.1	Certification by Chief Executive Officer pursuant to Rules 13a 14(a) and 15d 14(a) under the Securities Exchange Act of 1934 and 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) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002					X
32.1	Certification by Chief Executive Officer pursuant to 18 USC. 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 USC. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
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

77

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NATIONSTAR MORTGAGE HOLDINGS INC.
November 6, 2012	/s/ Jay Bray
Date	Jay Bray Chief Executive Officer
November 6, 2012	/s/ David C. Hisey
Date	David C.Hisey Chief Financial Officer

78

Exhibit Index

Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed or Furnished Herewith
4.1	Fourth Supplemental Indenture, dated as of August 9, 2012 among Nationstar Mortgage Holdings Inc., Nationstar Sub1 LLC, Nationstar Sub2 LLC and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.1	8/9/2012
4.2	Second Supplemental Indenture, dated as of August 9, 2012 among Nationstar Mortgage Holdings Inc., Nationstar Sub1 LLC, Nationstar Sub2 LLC and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.2	8/9/2012
4.3	First Supplemental Indenture, dated as of July 24, 2012 by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.2	7/24/2012	X
4.4	Fifth Supplemental Indenture, dated as of August 30, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.1	9/4/2012	X
4.5	Indenture, dated as of September 24, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee	8-K	001-35449	4.1	9/24/2012
10.1	Registration Rights Agreement, dated as of July 24, 2012, among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers	8-K	001-35449	10.1	7/24/2012
10.2	Registration Rights Agreement, dated as of September 24, 2012, among the Issuers, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers	8-K	001-35449	10.1	9/24/2012
10.3	Registration Rights Agreement, dated as of September 28, 2012, among the Issuers, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers	8-K	001-35449	10.1	9/28/2012
31.1	Certification by Chief Executive Officer pursuant to Rules 13a 14(a) and 15d 14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002					X

79

Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed or Furnished Herewith
31.2	Certification by Chief Financial Officer pursuant to Rules 13a 14(a) and 15d 14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002					X
32.1	Certification by Chief Executive Officer pursuant to 18 USC. 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 USC. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
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

80

EX-31.1

Exhibit 31.1

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, Jay Bray, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2012 of Nationstar Mortgage 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. 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

c. 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 registrant’s board of directors (or persons performing the equivalent function):

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:	November 6, 2012	By:	/s/ Jay Bray
		Jay Bray
		Title:	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, David C. Hisey, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2012 of Nationstar Mortgage 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. 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

c. 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 registrant’s board of directors (or persons performing the equivalent function):

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:	November 6, 2012	By:	/s/ David C. Hisey
		David C. Hisey
		Title	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of Nationstar Mortgage Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jay Bray, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(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:	November 6, 2012
By:	/s/ Jay Bray
	Jay Bray
Title:	Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the quarterly report of Nationstar Mortgage Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David Hisey, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(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:	November 6, 2012
By:	/s/ David C. Hisey
	David C. Hisey
Title:	Chief Financial Officer

XML

General and Administrative Expenses (Tables)

9 Months Ended

Sep. 30, 2012

General and Administrative Expense [Abstract]

General and Administrative Expenses

General and administrative expenses consist of the following for the dates indicated (in thousands):

	For the three months ended				For the nine months ended
	September 30, 2012		September 30, 2011		September 30, 2012		September 30, 2011
Servicing	$	13,893	$	7,106	$	50,530	$	16,101
Legal and professional fees	18,251		8,508		32,818		13,145
Depreciation and amortization	2,973		991		6,358		2,551
Equipment	2,450		1,251		5,569		3,245
Postage	2,395		1,522		5,056		3,937
Travel	2,043		871		4,730		2,383
Other	9,580		5,148		22,046		15,345
Total general and administrative expenses	$	51,585	$	25,397	$	127,107	$	56,707

XML

Mortgage Loans Held for Sale and Investment - Mortgage Loans Held for Investment (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Dec. 31, 2010
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net	$ 238,178	$ 243,480
Mortgage Loans Held for Investment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net - unpaid principal balance	361,474	375,720
Transfer discount - accretable	(20,828)	(22,392)	(25,219)
Transfer discount - non-accretable	(94,823)	(104,024)
Allowance for loan losses	(7,645)	(5,824)	(3,298)
Total mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net	$ 238,178	$ 243,480

XML

Variable Interest Entities and Securitizations - Securitization Trusts (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
Total mortgage servicing rights at fair value	$ 592,692		$ 251,050
Variable Interest Entity, Not Primary Beneficiary
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items]
Total collateral balances	4,239,774		4,579,142
Total certificate balances	4,230,472		4,582,598
Total mortgage servicing rights at fair value	23,367		28,635
Principal Amount of Loans 60 Days or More Past Due	1,060,797	801,216
Credit Losses	$ 208,628	$ 182,991

XML

Indebtedness - Servicing Segment Notes Payable (Details) (USD $)			9 Months Ended		9 Months Ended		1 Months Ended	9 Months Ended		9 Months Ended		9 Months Ended			9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended		9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Servicing Segment Notes Payable, Other MBS Advance Financing Facility	Dec. 31, 2011 Servicing Segment Notes Payable, Other MBS Advance Financing Facility	Sep. 30, 2012 Servicing Segment Notes Payable, Other Securities Repurchase Facility (2011)	Dec. 31, 2011 Servicing Segment Notes Payable, Other Securities Repurchase Facility (2011)	Oct. 31, 2009 Servicing Segment Notes Payable, Other MSR Note	Sep. 30, 2012 Servicing Segment Notes Payable, Other MSR Note	Dec. 31, 2011 Servicing Segment Notes Payable, Other MSR Note	Sep. 30, 2012 Servicing Segment Notes Payable to Banks ABS Advance Financing Facility (2010)	Dec. 31, 2011 Servicing Segment Notes Payable to Banks ABS Advance Financing Facility (2010)	Sep. 30, 2012 Servicing Segment Notes Payable to Banks Agency Advance Financing Facility (2011-1)	Oct. 31, 2012 Servicing Segment Notes Payable to Banks Agency Advance Financing Facility (2011-1)	Dec. 31, 2011 Servicing Segment Notes Payable to Banks Agency Advance Financing Facility (2011-1)	Sep. 30, 2012 Servicing Segment Notes Payable to Banks AW Agency Advance Financing Facility (2012)	Dec. 31, 2011 Servicing Segment Notes Payable to Banks AW Agency Advance Financing Facility (2012)	Sep. 30, 2012 Servicing Segment Notes Payable to Banks C ABS Advance Financing Facility (2012)	Dec. 31, 2011 Servicing Segment Notes Payable to Banks C ABS Advance Financing Facility (2012)	Sep. 30, 2012 Servicing Segment Notes Payable to Banks R ABS Advance Financing Facility (2012)	Dec. 31, 2011 Servicing Segment Notes Payable to Banks R ABS Advance Financing Facility (2012)	Sep. 30, 2012 Servicing Segment Notes Payable to Banks W ABS Advance Financing Facility (2012)	Dec. 31, 2011 Servicing Segment Notes Payable to Banks W ABS Advance Financing Facility (2012)	Sep. 30, 2012 Servicing Segment Notes Payable to Banks Reverse Participations Financing Facility	Dec. 31, 2011 Servicing Segment Notes Payable to Banks Reverse Participations Financing Facility	Sep. 30, 2012 Minimum Servicing Segment Notes Payable to Banks Agency Advance Financing Facility (2011-1)	Sep. 30, 2012 Minimum Servicing Segment Notes Payable to Banks C ABS Advance Financing Facility (2012)	Sep. 30, 2012 Minimum Servicing Segment Notes Payable to Banks R ABS Advance Financing Facility (2012)	Sep. 30, 2012 Maximum Servicing Segment Notes Payable to Banks Agency Advance Financing Facility (2011-1)	Sep. 30, 2012 Maximum Servicing Segment Notes Payable to Banks C ABS Advance Financing Facility (2012)	Sep. 30, 2012 Maximum Servicing Segment Notes Payable to Banks R ABS Advance Financing Facility (2012)
Debt Instrument
Term of agreement			1 year				4 years
Maximum borrowing capacity			$ 325,000,000							$ 300,000,000		$ 300,000,000	$ 600,000,000		$ 100,000,000		$ 600,000,000		$ 350,000,000		$ 450,000,000		$ 150,000,000
Extension period					90 days
Variable interest rate basis			LIBOR		LIBOR			LIBOR		LIBOR		LIBOR			LIBOR		LIBOR		LIBOR		LIBOR		LIBOR
Interest Rate, LIBOR Plus a spread of			2.50%		3.50%			2.50%		3.00%					2.50%						3.75%		4.00%		2.50%	3.50%	3.37%	6.00%	4.00%	8.00%
Collateral Pledged	$ 3,005,357,000	$ 976,755,000	$ 197,934,000	$ 182,096,000	$ 55,603,000	$ 55,603,000		$ 13,296,000	$ 16,230,000	$ 228,898,000	$ 249,499,000	$ 181,803,000		$ 28,811,000	$ 124,551,000	$ 0	$ 692,635,000	$ 0	$ 392,360,000	$ 0	$ 454,402,000	$ 0	$ 21,298,000	$ 0

XML

Mortgage Loans Held for Sale and Investment - Accretable Yield (Details) (Mortgage Loans Held for Investment, USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Mortgage Loans Held for Investment
Accretable Yield Movement Schedule [Roll Forward]
Balance at the beginning of the period	$ 22,392	$ 25,219
Additions	0	0
Accretion	(2,728)	(4,131)
Reclassifications from (to) nonaccretable discount	1,164	1,304
Disposals	0	0
Balance at the end of the period	$ 20,828	$ 22,392

XML

Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 07, 2012
Income Tax Disclosure [Abstract]
Deferred tax asset					$ 70,800,000
Deferred tax liability					16,500,000
Valuation allowance on deferred tax asset					54,300,000
Income tax provision	24,714,000	0	40,639,000	0
Pretax income	$ 79,781,000	$ (3,100,000)	$ 182,167,000	$ 5,995,000

XML

Nature of Business, Basis of Presentation and Material Transaction - Material Transaction (Details) (USD $)	1 Months Ended	9 Months Ended
	Jun. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Mortgaging Servicing Rights
Payments to Acquire Mortgage Servicing Rights (MSR)		$ 2,024,019,000	$ 40,305,000
Mortgage servicing rights - fair value		592,692,000		251,050,000
Accounts Receivable, Net		2,852,985,000		562,300,000
Issuance of notes payable	1,300,000,000
Issuance of excess spread financing	176,500,000	215,570,000	0
Aurora
Mortgaging Servicing Rights
Payments to Acquire Mortgage Servicing Rights (MSR)	2,000,000,000
Mortgage servicing rights - fair value		271,500,000
Accounts Receivable, Net		1,700,000,000
Residential Mortgage | Aurora
Mortgaging Servicing Rights
Number of loans covered by mortgage servicing agreement	300,000
Principal amount outstanding on loans managed and securitized		$ 63,000,000,000

XML

Mortgage Loans Held for Sale and Investment (Tables)

9 Months Ended

Sep. 30, 2012

Mortgage Loans Held for Sale and Investment [Abstract]

Schedule of Mortgage Loans Held-for-Sale

Mortgage loans held for sale consist of the following (in thousands):

	September 30, 2012		December 31, 2011
Mortgage loans held for sale – unpaid principal balance	$	668,345	$	442,596
Mark-to-market adjustment	34,869		16,030
Total mortgage loans held for sale	$	703,214	$	458,626

Reconciliation of Mortgage Loans Held-for-Sale to Cash Flow

A reconciliation of the changes in mortgage loans held for sale to the amounts presented in the consolidated statements of cash flows for the dates indicated is presented in the following table (in thousands):

For the nine months ended September 30,	2012			2011
Mortgage loans held for sale – beginning balance	$	458,626		$	369,617
Mortgage loans originated and purchased, net of fees	4,814,018			2,285,558
Cost of loans sold, net of fees	(4,606,909		)	(2,287,430		)
Principal payments received on mortgage loans held for sale and other changes	38,935			10,475
Transfer of mortgage loans held for sale to held for investment	(1,456		)	(288		)
Mortgage loans held for sale – ending balance	$	703,214		$	377,932

Schedule of Loans Held for Investment

Mortgage loans held for investment, subject to nonrecourse debt—legacy assets, net as of the dates indicated include (in thousands):

	September 30, 2012			December 31, 2011
Mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net – unpaid principal balance	$	361,474		$	375,720
Transfer discount
Accretable	(20,828		)	(22,392		)
Non-accretable	(94,823		)	(104,024		)
Allowance for loan losses	(7,645)			(5,824		)
Total mortgage loans held for investment, subject to nonrecourse debt -legacy assets, net	$	238,178		$	243,480

Changes in Accretable Yield on Mortgage Loans Held for Investment

The changes in accretable yield on loans transferred to mortgage loans held for investment, subject to nonrecourse debt- legacy assets were as follows (in thousands):

	Nine months ended September 30, 2012			Year ended December 31, 2011
Accretable Yield
Balance at the beginning of the period	$	22,392		$	25,219
Additions	—			—
Accretion	(2,728		)	(4,131		)
Reclassifications from (to) nonaccretable discount	1,164			1,304
Disposals	—			—
Balance at the end of the period	$	20,828		$	22,392

Allowance for Loan Losses

The changes in the allowance for loan losses on mortgage loans held for investment, subject to nonrecourse debt-legacy assets, net were as follows (in thousands) for the dates indicated:

	Nine months ended September 30, 2012
	Performing			Non-Performing			Total
Balance at the beginning of the period	$	1,641		$	4,183		$	5,824
Provision for loan losses	2,249			904			3,153
Charge-offs	(978		)	(354		)	(1,332		)
Balance at the end of the period	$	2,912		$	4,733		$	7,645
Ending balance – collectively evaluated for impairment	$	278,367		$	83,107		$	361,474

	Year ended December 31, 2011
	Performing			Non-Performing			Total
Balance at the beginning of the period	$	829		$	2,469		$	3,298
Provision for loan losses	1,346			2,191			3,537
Recoveries on loans previously charged-off	—			—			—
Charge-offs	(534		)	(477		)	(1,011		)
Balance at the end of the period	$	1,641		$	4,183		$	5,824
Ending balance – Collectively evaluated for impairment	$	283,770		$	91,950		$	375,720

Mortgage Loans by Credit Quality Indicator

The following tables provide the outstanding unpaid principal balance of Nationstar’s mortgage loans held for investment by credit quality indicators as of dates indicated.

	September 30, 2012		December 31, 2011
	(in thousands)
Credit Quality by Delinquency Status
Performing	$	278,367	$	283,770
Non-Performing	83,107		91,950
Total	$	361,474	$	375,720
Credit Quality by Loan-to-Value Ratio
Less than 60	$	40,060	$	42,438
Less than 70 and more than 60	15,817		15,968
Less than 80 and more than 70	22,627		25,190
Less than 90 and more than 80	28,863		32,620
Less than 100 and more than 90	32,804		33,708
Greater than 100	221,303		225,796
Total	$	361,474	$	375,720

XML

Fair Value Measurements - Fair Value Assumptions (Details) (Excess Spread Financing)	9 Months Ended
	Sep. 30, 2012
Excess Spread Financing
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement
Mortgage prepayment speeds	12.80%
Average life	3 years 7 months 6 days
Discount rate	14.40%

XML

Indebtedness - Unsecured Notes Maturity Schedule (Details) (Unsecured Senior Notes, USD $)	Sep. 30, 2012
Unsecured Senior Notes
Expected maturities of long-term debt
2013	$ 0
2014	0
2015	285,000,000
2016	0
2017	0
Thereafter	775,000,000
Total	$ 1,060,000,000

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Commitments and Contingencies - Other Contingencies (Details) (Loan Subservicing Agreement, USD $) In Millions, unless otherwise specified	Jun. 30, 2011
Maximum
Mortgage Servicing Rights [Line Items]
Incentive fees	$ 2.5
Loss Sharing Agreement [Member]
Mortgage Servicing Rights [Line Items]
Company share under loss sharing agreement	$ 10.0

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Mortgage Loans Held for Sale and Investment - Credit Quality (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Minimum | Loan-to-Value Ratio Between 60 Percent and 70 Percent
Financing Receivable, Recorded Investment [Line Items]
Loan-to-value ratio	60.00%
Minimum | Loan-to-Value Ratio Between 70 Percent and 80 Percent
Financing Receivable, Recorded Investment [Line Items]
Loan-to-value ratio	70.00%
Minimum | Loan-to-Value Ratio Between 80 Percent and 90 Percent
Financing Receivable, Recorded Investment [Line Items]
Loan-to-value ratio	80.00%
Minimum | Loan-to-Value Ratio Between 90 Percent and 100 Percent
Financing Receivable, Recorded Investment [Line Items]
Loan-to-value ratio	90.00%
Minimum | Loan-to-Value Ratio Greater Than 100 Percent
Financing Receivable, Recorded Investment [Line Items]
Loan-to-value ratio	100.00%
Maximum | Loan-to-Value Ratio Less Than 60 Percent
Financing Receivable, Recorded Investment [Line Items]
Loan-to-value ratio	60.00%
Maximum | Loan-to-Value Ratio Between 60 Percent and 70 Percent
Financing Receivable, Recorded Investment [Line Items]
Loan-to-value ratio	70.00%
Maximum | Loan-to-Value Ratio Between 70 Percent and 80 Percent
Financing Receivable, Recorded Investment [Line Items]
Loan-to-value ratio	80.00%
Maximum | Loan-to-Value Ratio Between 80 Percent and 90 Percent
Financing Receivable, Recorded Investment [Line Items]
Loan-to-value ratio	90.00%
Maximum | Loan-to-Value Ratio Between 90 Percent and 100 Percent
Financing Receivable, Recorded Investment [Line Items]
Loan-to-value ratio	100.00%
Mortgage Loans Held for Investment
Financing Receivable, Recorded Investment [Line Items]
Unpaid principal balance	$ 361,474	$ 375,720
Mortgage Loans Held for Investment | Performing
Financing Receivable, Recorded Investment [Line Items]
Unpaid principal balance	278,367	283,770
Mortgage Loans Held for Investment | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Unpaid principal balance	83,107	91,950
Mortgage Loans Held for Investment | Loan-to-Value Ratio Less Than 60 Percent
Financing Receivable, Recorded Investment [Line Items]
Unpaid principal balance	40,060	42,438
Mortgage Loans Held for Investment | Loan-to-Value Ratio Between 60 Percent and 70 Percent
Financing Receivable, Recorded Investment [Line Items]
Unpaid principal balance	15,817	15,968
Mortgage Loans Held for Investment | Loan-to-Value Ratio Between 70 Percent and 80 Percent
Financing Receivable, Recorded Investment [Line Items]
Unpaid principal balance	22,627	25,190
Mortgage Loans Held for Investment | Loan-to-Value Ratio Between 80 Percent and 90 Percent
Financing Receivable, Recorded Investment [Line Items]
Unpaid principal balance	28,863	32,620
Mortgage Loans Held for Investment | Loan-to-Value Ratio Between 90 Percent and 100 Percent
Financing Receivable, Recorded Investment [Line Items]
Unpaid principal balance	32,804	33,708
Mortgage Loans Held for Investment | Loan-to-Value Ratio Greater Than 100 Percent
Financing Receivable, Recorded Investment [Line Items]
Unpaid principal balance	$ 221,303	$ 225,796

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Indebtedness - Participating Interest Financing (Details) (USD $) In Thousands, unless otherwise specified			9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Participating Interest Financing
Debt Instrument
Interest rate, minimum			0.53%
Interest rate, maximum			7.17%
Participating Interest Financing	$ 415,448
Participating interest financing	$ 415,448	$ 0

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Capital Requirements (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012
Mortgage Banking [Abstract]
Minimum Net Worth Required for Compliance	$ 356.5
Minimum Tangible Net Worth Required for Compliance	$ 175.0

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Fair Value Measurements - Level 3 Reconciliation (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Sep. 30, 2012
Excess Spread Financing
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 0	$ 255,484
Transfers into Level 3	0
Transfers out of Level 3	0
Total gains or losses included in earnings	3,060
Total gains or losses included in other comprehensive income	0
Purchases, issuances, sales and settlements
Purchases	0
Issuances	43,742
Sales	0
Settlements	(2,207)
Ending balance	44,595	255,484
Mortgage Servicing Rights
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	145,062	592,692
Transfers into Level 3	0
Transfers out of Level 3	0
Total gains or losses included in earnings	(39,000)
Total gains or losses included in other comprehensive income	0
Purchases, issuance, sales and settlements
Purchases	102,800
Issuances	36,474
Sales	0
Settlements	5,714
Ending balance	$ 251,050	$ 592,692

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Commitments and Contingencies - Litigation and Regulatory Matters (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Commitments and Contingencies Disclosure [Abstract]
Legal Fees	$ 3.5	$ 6.3	$ 9.7	$ 7.8

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General and Administrative Expenses (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
General and Administrative Expense [Abstract]
Servicing	$ 13,893	$ 7,106	$ 50,530	$ 16,101
Professional Fees	18,251	8,508	32,818	13,145
Depreciation and amortization	2,973	991	6,358	2,551
Equipment	2,450	1,251	5,569	3,245
Postage	2,395	1,522	5,056	3,937
Travel	2,043	871	4,730	2,383
Insurance, taxes, and other	9,580	5,148	22,046	15,345
Total general and administrative expense	$ 51,585	$ 25,397	$ 127,107	$ 56,707

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Indebtedness - Originations Segment Notes Payable (Details) (Originations Segment, USD $)	9 Months Ended		9 Months Ended					9 Months Ended					9 Months Ended
	Sep. 30, 2012 Notes Payable to Banks Warehouse Facility $375 Million	May 31, 2012 Notes Payable to Banks Warehouse Facility $375 Million	Sep. 30, 2012 Notes Payable to Banks Warehouse Facility $250 Million (2011)	Sep. 30, 2012 Notes Payable to Banks Warehouse Facility $100 Million (2009)	Sep. 30, 2012 Notes Payable, Other Warehouse Facility $150 Million	Feb. 29, 2012 Notes Payable, Other Warehouse Facility $150 Million	Jan. 31, 2012 Notes Payable, Other Warehouse Facility $150 Million	Sep. 30, 2012 Notes Payable, Other ASAP Plus Facility	Sep. 30, 2012 Minimum Notes Payable to Banks Warehouse Facility $375 Million	Sep. 30, 2012 Minimum Notes Payable to Banks Warehouse Facility $250 Million (2011)	Sep. 30, 2012 Maximum Notes Payable to Banks Warehouse Facility $375 Million	Sep. 30, 2012 Maximum Notes Payable to Banks Warehouse Facility $250 Million (2011)	Sep. 30, 2012 Maximum Notes Payable, Other ASAP Plus Facility
Debt Instrument
Maximum borrowing capacity	$ 375,000,000	$ 175,000,000	$ 250,000,000	$ 100,000,000		$ 150,000,000	$ 300,000,000
Variable interest rate basis	LIBOR		LIBOR	LIBOR	LIBOR			LIBOR
Interest Rate, LIBOR Plus a spread of				3.25%		3.25%		1.50%	1.75%	2.25%	2.50%	3.00%
Maturity length													45 days

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Business Segment Reporting

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Business Segment Reporting

Business Segment Reporting

Nationstar currently conducts business in two separate operating segments: Servicing and Originations. The Servicing segment provides loan servicing on Nationstar’s total servicing portfolio, including the collection of principal and interest payments and the assessment of ancillary fees related to the servicing of mortgage loans. The Originations segment involves the origination, packaging, and sale of agency mortgage loans into the secondary markets via whole loan sales or securitizations. Nationstar reports the activity not related to either operating segment in the Legacy Portfolio and Other column. The Legacy Portfolio and Other column includes primarily all subprime mortgage loans originated in the latter portion of 2006 and during 2007 or acquired from Nationstar’s predecessor and consolidated VIEs which were consolidated pursuant to consolidation guidance related to VIEs adopted on January 1, 2010.

Nationstar’s segments are based upon Nationstar’s organizational structure which focuses primarily on the services offered. The accounting policies of each reportable segment are the same as those of Nationstar except for 1) expenses for consolidated back-office operations and general overhead-type expenses such as executive administration and accounting and 2) revenues generated on inter-segment services performed. Expenses are allocated to individual segments based on the estimated value of services performed, including total revenue contributions, personnel headcount, and the equity invested in each segment. Revenues generated or inter-segment services performed are valued based on similar services provided to external parties.

To reconcile to Nationstar’s consolidated results, certain inter-segment revenues and expenses are eliminated in the “Elimination” column in the following tables.

The following tables are a presentation of financial information by segment for the periods indicated (in thousands):

	Three months ended September 30, 2012
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	135,398		$	—		$	135,398		$	548		$	(442	)	$	135,504
Other fee income	6,457			(4,055		)	2,402			(6		)				2,396
Total fee income	141,855			(4,055		)	137,800			542			(442		)	137,900
Gain/(loss) on mortgage loans held for sale	—			139,259			139,259			—			—			139,259
Total revenues	141,855			135,204			277,059			542			(442		)	277,159
Total expenses and impairments	95,296			56,481			151,777			3,051			—			154,828
Other income (expense):
Interest income	12,544			6,161			18,705			4,395			442			23,542
Interest expense	(53,830		)	(7,738		)	(61,568		)	(3,447		)	—			(65,015		)
Gain (loss) on interest rate swaps and caps	236			—			236			(1,313		)	—			(1,077		)
Total other income (expense)	(41,050		)	(1,577		)	(42,627		)	(365		)	442			(42,550		)
Income (loss) before taxes	$	5,509		$	77,146		$	82,655		$	(2,874	)	$	—		$	79,781
Depreciation and amortization	$	2,006		$	766		$	2,772		$	201		$	—		$	2,973
Total assets	4,470,896			1,079,521			5,550,417			390,814			—			5,941,231

	Three months ended September 30, 2011
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	54,220		$	—		$	54,220		$	519		$	(1,708	)	$	53,031
Other fee income	3,772			3,114			6,886			774			—			7,660
Total fee income	57,992			3,114			61,106			1,293			(1,708		)	60,691
Gain/(loss) on mortgage loans held for sale	—			30,352			30,352			—			(120		)	30,232
Total revenues	57,992			33,466			91,458			1,293			(1,828		)	90,923
Total expenses and impairments	47,874			25,890			73,764			9,550			(120		)	83,194
Other income (expense):
Interest income	907			3,056			3,963			10,530			1,708			16,201
Interest expense	(14,161		)	(2,989		)	(17,150		)	(9,226		)	—			(26,376		)
Fair value changes ABS securitizations	—			—			—			(654		)	—			(654		)
Total other income (expense)	(13,254		)	67			(13,187		)	650			1,708			(10,829		)
Income before taxes	$	(3,136	)	$	7,643		$	4,507		$	(7,607	)	$	—		$	(3,100	)
Depreciation and amortization	$	525		$	327		$	852		$	139		$	—		$	991
Total assets	810,157			429,661			1,239,818			764,507			—			2,004,325

	Nine months ended September 30, 2012
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	305,124		$	—		$	305,124		$	1,785		$	(1,363	)	$	305,546
Other fee income	19,728			1,665			21,393			(134		)				21,259
Total fee income	324,852			1,665			326,517			1,651			(1,363		)	326,805
Gain (loss) on mortgage loans held for sale	—			312,094			312,094			—			22			312,116
Total revenues	324,852			313,759			638,611			1,651			(1,341		)	638,921
Total expenses and impairments	228,182			132,935			361,117			20,660			—			381,777
Other income (expense):
Interest income	22,406			14,719			37,125			14,145			1,363			52,633
Interest expense	(99,053		)	(15,529		)	(114,582		)	(11,304		)	(22		)	(125,908		)
Gain (loss) on interest rate swaps and caps	424			—			424			(2,126		)	—			(1,702		)
Total other income (expense)	(76,223		)	(810		)	(77,033		)	715			1,341			(74,977		)
Income before taxes	$	20,447		$	180,014		$	200,461		$	(18,294	)	$	—		$	182,167
Depreciation and amortization	$	4,104		$	1,669		$	5,773		$	585		$	—		$	6,358
Total assets	4,470,896			1,079,521			5,550,417			390,814			—			5,941,231

	Nine months ended September 30, 2011
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	164,804		$	—		$	164,804		$	1,257		$	(5,306	)	$	160,755
Other fee income	10,437			10,983			21,420			2,579			—			23,999
Total fee income	175,241			10,983			186,224			3,836			(5,306		)	184,754
Gain (loss) on mortgage loans held for sale	—			73,832			73,832			—			(272		)	73,560
Total revenues	175,241			84,815			260,056			3,836			(5,578		)	258,314
Total expenses and impairments	128,177			71,404			199,581			20,408			(272		)	219,717
Other income (expense):
Interest income	2,529			8,560			11,089			34,851			5,306			51,246
Interest expense	(41,109		)	(7,480		)	(48,589		)	(28,340		)	—			(76,929		)
Fair value changes - ABS securitizations	—			—			—			(6,919		)	—			(6,919		)
Total other income (expense)	(38,580		)	1,080			(37,500		)	(408		)	5,306			(32,602		)
Income before taxes	$	8,484		$	14,491		$	22,975		$	(16,980	)	$	—		$	5,995
Depreciation and amortization	$	1,293		$	894		$	2,187		$	364		$	—		$	2,551
Total assets	810,157			429,661			1,239,818			764,507			—			2,004,325

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Consolidated Statement of Cash Flows-Supplemental Disclosure (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Supplemental Cash Flow Elements [Abstract]
Interest paid	$ 78.2	$ 61.8
Income taxes paid	$ 18.2	$ 0

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Minimum Annual Rental Commitments

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Indebtedness - Excess Spread Financing Debt (Details) (USD $) In Thousands, unless otherwise specified			1 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Dec. 31, 2011 Newcastle
Debt Instrument
Percentage interest sold in excess cash flow			65.00%
Percentage interest retained of excess cash flow			35.00%
Excess spread financing at fair value	$ 255,484	$ 44,595

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Definitive Agreement to Acquire Certain Mortgage Servicing Assets of Residential Capital, LLC (Details) (USD $)	1 Months Ended	9 Months Ended
	Jun. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2013 Scenario, Forecast Residential Capital, LLC	Mar. 31, 2013 Termination Fee [Member] Scenario, Forecast Residential Capital, LLC
Mortgage Servicing Rights [Line Items]
Purchase price of mortgage servicing rights				$ 2,900,000,000
Issuance of excess spread financing	176,500,000	215,570,000	0
Termination fee, amount					$ 24,000,000

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Effect of Derivative Instruments on the Statement of Operations

Derivatives in ASC 815 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of  Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
For the three months ended September 30, 2012
Interest Rate Swap	$	—		Interest Expense	$	—	Interest Expense	$	423
For the three months ended September 30, 2011
Interest Rate Swap	$	—		Interest Expense	$	—	Interest Expense	$	617
For the nine months ended September 30, 2012
Interest Rate Swap	$	—		Interest Expense	$	—	Interest Expense	$	—
For the nine months ended September 30, 2011
Interest Rate Swap	$	(1,071	)	Interest Expense	$	582	Interest Expense	$	2,032

Schedule of Derivative Instruments

The following tables provide the outstanding notional balances and fair values of outstanding positions for the dates indicated, and recorded gains/(losses) during the periods indicated (in thousands):

	Expiration Dates	Outstanding Notional		Fair Value		Recorded Gains / (Losses)
For the nine months ended September 30, 2012
MORTGAGE LOANS HELD FOR SALE
Loan sale commitments	2012	$	4,175	$	212	$	(422	)
OTHER ASSETS
IRLCs	2012	4,353,327		112,628		101,326
LIABILITIES
Interest rate swaps and caps	2012-2015	648,940		7,041		(501		)
Interest rate swaps on ABS debt (1)	2012-2017	894,363		1,632		(1,201		)
Forward MBS trades	2012	2,838,185		29,162		(23,332		)
For the year ending December 31, 2011
MORTGAGE LOANS HELD FOR SALE
Loan sale commitments	2012	$	28,047	$	634	$	592
OTHER ASSETS
IRLCs	2012	736,377		11,302		6,598
LIABILITIES
Interest rate swaps and caps	2012-2015	193,500		6,540		1,261
Forward MBS trades	2012	691,725		5,830		(9,792		)
Interest rate swap, subject to ABS nonrecourse debt (2)	—	—		—		(8,058		)

(1) In March 2012, Nationstar received interest rate swaps from FIF as a part of the reorganization.

(2) In December 2011, Nationstar sold its remaining variable interest in a securitization trust that had been a consolidated VIE since January 1, 2010 and deconsolidated the VIE. Upon deconsolidation of this VIE, Nationstar derecognized the related ABS nonrecourse debt and therefore the underlying interest rate swap, subject to ABS nonrecourse debt.

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Mortgage Loans Held for Sale and Investment - Mortgage Loans Held for Sale (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Mortgage Loans Held for Sale and Investment [Abstract]
Mortgage loans held for sale - unpaid principal balance	$ 668,345	$ 442,596
Mark-to-market adjustment	34,869	16,030
Total mortgage loans held for sale	$ 703,214	$ 458,626	$ 377,932	$ 369,617

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Payables and Accrued Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Payables and Accruals [Abstract]
MSR purchases payable	$ 310,609	$ 8,204
Mortgage insurance premiums and reserves	70,344	19,162
Payables to securitization trusts	37,607	10,665
Loans subject to repurchase from Ginnie Mae	58,534	35,735
Cancelled lease reserves	7,319	9,160
Servicing Liability	6,628	0
Legal and professional fees	12,076	5,931
Accrued bonus and payroll	43,511	21,236
Accrued interest	39,902	10,225
Government sponsored entities	26,797	18,728
Repurchase reserves	15,055	10,026
Deposit from MSR co-investor for ResCap	25,200	0
Reverse mortgage payables	46,000	0
Taxes	14,544	154
Other	48,142	34,563
Total payables and accrued liabilities	$ 762,268	$ 183,789

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Mortgage Servicing Rights - Fair Value Sensitivity Analysis (Details) (Mortgage Servicing Rights, USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Total Prepayment Speeds, 10% Adverse Change		$ (13,281)
Total Prepayment Speeds, 20% Adverse Change		(25,215)
Credit Losses, 10% Adverse Change		(5,081)
Credit Losses, 20% Adverse Change		(10,944)
100 Basis Points
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Percentage change of discount rate	1.00%	1.00%
Discount Rate, Adverse Change		(6,640)
200 Basis Points
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Percentage change of discount rate	2.00%	2.00%
Discount Rate, Adverse Change		$ (12,929)

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Variable Interest Entities and Securitizations - Assets and Liabilities of Consolidated VIEs (Details) (Residential Mortgage, USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Assets	$ 2,625,102	$ 542,894
Liabilities	1,819,292	358,041
Restricted Cash
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Assets	126,002	22,316
Accounts Receivable
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Assets	2,269,229	279,414
Mortgage Loans Held for Investment
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Assets	228,041	237,496
Real Estate Owned
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Assets	1,830	3,668
Notes Payable
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Liabilities	1,707,941	244,574
Payables and Accrued Liabilities
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Liabilities	2,412	977
Derivative Financial Instruments
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Liabilities	7,041	0
Nonrecourse Debt-Legacy Assets
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Liabilities	$ 101,898	$ 112,490

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Variable Interest Entities and Securitizations

9 Months Ended

Sep. 30, 2012

Variable Interest Entities and Securitizations [Abstract]

Variable Interest Entities and Securitizations

Variable Interest Entities and Securitizations

Nationstar has been the transferor in connection with a number of securitizations or asset-backed financing arrangements, from which Nationstar has continuing involvement with the underlying transferred financial assets. Nationstar aggregates these securitizations or asset-backed financing arrangements into two groups: 1) securitizations of residential mortgage loans and 2) transfers accounted for as secured borrowings.

On securitizations of residential mortgage loans, Nationstar’s continuing involvement typically includes acting as servicer for the mortgage loans held by the trust and holding beneficial interests in the trust. Nationstar’s responsibilities as servicer include, among other things, collecting monthly payments, maintaining escrow accounts, providing periodic reports and managing insurance in exchange for a contractually specified servicing fee. The beneficial interests held consist of both subordinate and residual securities that were retained at the time of the securitization and any mortgage servicing rights subsequently retained in the securitization.

Nationstar also maintains various agreements with special purpose entities (SPEs), under which Nationstar transfers mortgage loans and/or advances on residential mortgage loans in exchange for cash. These SPEs issue debt supported by collections on the transferred mortgage loans and/or advances. These transfers do not qualify for sale treatment because Nationstar continues to retain control over the transferred assets. As a result, Nationstar accounts for these transfers as financings and continues to carry the transferred assets and recognizes the related liabilities on Nationstar’s consolidated balance sheets. Collections on the mortgage loans and/or advances pledged to the SPEs are used to repay principal and interest and to pay the expenses of the entity. The holders of these beneficial interests issued by these SPEs do not have recourse to Nationstar and can only look to the assets of the SPEs themselves for satisfaction of the debt.

A Variable Interest Entity (VIE) is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support or whose equity investors lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary, which is the entity that, through its variable interests has both the power to direct the activities of a VIE that most significantly impact the VIE's economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Current accounting guidance requires that all existing SPEs be evaluated for consolidation. Nationstar identified certain securitization trusts where Nationstar, through its affiliates, continued to hold beneficial interests in these trusts. These retained beneficial interests obligate Nationstar to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant. In addition, Nationstar as master servicer on the related mortgage loans, retains the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE. When it is determined that Nationstar has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, the assets and liabilities of these VIEs are included in Nationstar’s consolidated financial statements. Upon consolidation of these VIEs, Nationstar derecognized all previously recognized beneficial interests obtained as part of the securitization, including any retained investment in debt securities, mortgage servicing rights, and any remaining residual interests. In addition, Nationstar recognized the securitized mortgage loans as mortgage loans held for investment, subject to ABS nonrecourse debt, and the related asset-backed certificates (ABS nonrecourse debt) acquired by third parties as ABS nonrecourse debt on Nationstar’s consolidated balance sheet.

As a result of market conditions and deteriorating credit performance on these consolidated VIEs, Nationstar expects minimal to no future cash flows on the economic residual. Under existing GAAP, Nationstar would be required to provide for additional allowances for loan losses on the securitization collateral as credit performance deteriorated, with no offsetting reduction in the securitization’s debt balances, even though any nonperformance of the assets will ultimately pass through as a reduction of amounts owed to the debt holders once they are extinguished. Therefore, Nationstar would be required to record accounting losses beyond its economic exposure.

To more accurately represent the future economic performance of the securitization collateral and related debt balances, Nationstar elected the fair value option provided for by Accounting Standards Codification (ASC) ASC 825-10, Financial Instruments-Overall. This option was applied to all eligible items within the VIE, including mortgage loans held for investment, subject to ABS nonrecourse debt, and the related ABS nonrecourse debt.

Subsequent to this fair value election, Nationstar no longer records an allowance for loan loss on mortgage loans held for investment, subject to ABS nonrecourse debt. Nationstar continues to record interest income in Nationstar’s consolidated statement of operations on these fair value elected loans until they are placed on a nonaccrual status when they are 90 days or more past due. The fair value adjustment recorded for the mortgage loans held for investment is classified within fair value changes of ABS securitizations in Nationstar’s consolidated statement of operations.

Subsequent to the fair value election for ABS nonrecourse debt, Nationstar continues to record interest expense in Nationstar’s consolidated statement of operations on the fair value elected ABS nonrecourse debt. The fair value adjustment recorded for the ABS nonrecourse debt is classified within fair value changes of ABS securitizations in Nationstar’s consolidated statement of operations.

Under the existing pooling and servicing agreements of these securitization trusts, the principal and interest cash flows on the underlying securitized loans are used to service the asset-backed certificates. Accordingly, the timing of the principal payments on this nonrecourse debt is dependent on the payments received on the underlying mortgage loans and liquidation of real estate owned.

Nationstar consolidates the SPEs created for the purpose of issuing debt supported by collections on loans and advances that have been transferred to it as VIEs, and Nationstar is the primary beneficiary of these VIEs. The Company consolidates the assets and liabilities of the VIEs onto its consolidated financial statements.

In December 2011, Nationstar sold its remaining variable interest in a securitization trust that had been a consolidated VIE since January 1, 2010 and deconsolidated the VIE. In accordance with ASC 810 Nationstar has evaluated this securitization trust and determined that Nationstar no longer has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, and this securitization trust was derecognized as of December 31, 2011. Upon deconsolidation of this VIE, Nationstar derecognized the securitized mortgage loans held for investment, subject to ABS nonrecourse debt, the related ABS nonrecourse debt, as well as certain other assets and liabilities of the securitization trust, and recognized any MSRs on the consolidated balance sheet. The impact of this derecognition on the Company’s consolidated statement of operations was recognized in the fourth quarter of 2011 in the fair value changes in ABS securitizations line item.

A summary of the assets and liabilities of Nationstar’s transactions with VIEs included in the Company’s consolidated financial statements as of September 30, 2012 and December 31, 2011 is presented in the following tables (in thousands):

	September 30, 2012		December 31, 2011
	Transfers Accounted for as Secured Borrowings		Transfers Accounted for as Secured Borrowings
ASSETS
Restricted cash	$	126,002	$	22,316
Accounts receivable	2,269,229		279,414
Mortgage loans held for investment, subject to nonrecourse debt	228,041		237,496
REO	1,830		3,668
Total Assets	$	2,625,102	$	542,894
LIABILITIES
Notes payable	$	1,707,941	$	244,574
Payables and accrued liabilities	2,412		977
Derivative financial instruments	7,041		—
Nonrecourse debt–Legacy Assets	101,898		112,490
Total Liabilities	$	1,819,292	$	358,041

A summary of the outstanding collateral and certificate balances for securitization trusts, including any retained beneficial interests and MSRs, that were not consolidated by Nationstar for the periods indicated are as follows (in thousands):

	September 30, 2012		December 31, 2011
Total collateral balances	$	4,239,774	$	4,579,142
Total certificate balances	4,230,472		4,582,598
Total mortgage servicing rights at fair value	23,367		28,635

Nationstar has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of September 30, 2012 or December 31, 2011, and therefore does not have a significant maximum exposure to loss related to these unconsolidated VIEs. A summary of mortgage loans transferred to unconsolidated securitization trusts that are 60 days or more past due and the credit losses incurred in the unconsolidated securitization trusts are presented below (in thousands):

	As of or for the nine months ended,
	September 30, 2012				September 30, 2011
	Principal Amount of Loans 60 Days or More Past Due		Credit Losses		Principal Amount of Loans 60 Days or More Past Due		Credit Losses
Total securitization trusts	$	1,060,797	$	208,628	$	801,216	$	182,991

Certain cash flows received from securitization trusts accounted for as sales for the dates indicated were as follows (in thousands):

	For the three months ended								For the nine months ended
	September 30, 2012				September 30, 2011				September 30, 2012				September 30, 2011
	Servicing Fees Received		Loan Repurchases		Servicing Fees Received		Loan Repurchases		Servicing Fees Received		Loan Repurchases		Servicing Fees Received		Loan Repurchases
Total securitization trusts	$	6,317	$	—	$	5,870	$	—	$	22,149	$	—	$	21,221	$	—

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Mortgage Servicing Rights - MSR's at Amortized Cost (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Servicing Asset at Amortized Value, Balance [Roll Forward]
Balance at the beginning of the period	$ 8,036	$ 0
Balance at the end of the period	8,036	0
Servicing Liability at Amortized Value [Roll Forward]
Balance at the beginning of the period	82,313	0
Balance at the end of the period	82,313	0
Mortgage Servicing Rights
Servicing Assets at Amortized Value
Principal amount outstanding on loans managed and securitized	120,852,838	44,253,454
Servicing Liability at Amortized Value [Roll Forward]
Balance at the beginning of the period	82,313
Balance at the end of the period	82,313
Reverse Mortgages
Servicing Assets at Amortized Value
Principal amount outstanding on loans managed and securitized	$ 27,300,000

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Business Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

The following tables are a presentation of financial information by segment for the periods indicated (in thousands):

	Three months ended September 30, 2012
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	135,398		$	—		$	135,398		$	548		$	(442	)	$	135,504
Other fee income	6,457			(4,055		)	2,402			(6		)				2,396
Total fee income	141,855			(4,055		)	137,800			542			(442		)	137,900
Gain/(loss) on mortgage loans held for sale	—			139,259			139,259			—			—			139,259
Total revenues	141,855			135,204			277,059			542			(442		)	277,159
Total expenses and impairments	95,296			56,481			151,777			3,051			—			154,828
Other income (expense):
Interest income	12,544			6,161			18,705			4,395			442			23,542
Interest expense	(53,830		)	(7,738		)	(61,568		)	(3,447		)	—			(65,015		)
Gain (loss) on interest rate swaps and caps	236			—			236			(1,313		)	—			(1,077		)
Total other income (expense)	(41,050		)	(1,577		)	(42,627		)	(365		)	442			(42,550		)
Income (loss) before taxes	$	5,509		$	77,146		$	82,655		$	(2,874	)	$	—		$	79,781
Depreciation and amortization	$	2,006		$	766		$	2,772		$	201		$	—		$	2,973
Total assets	4,470,896			1,079,521			5,550,417			390,814			—			5,941,231

	Three months ended September 30, 2011
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	54,220		$	—		$	54,220		$	519		$	(1,708	)	$	53,031
Other fee income	3,772			3,114			6,886			774			—			7,660
Total fee income	57,992			3,114			61,106			1,293			(1,708		)	60,691
Gain/(loss) on mortgage loans held for sale	—			30,352			30,352			—			(120		)	30,232
Total revenues	57,992			33,466			91,458			1,293			(1,828		)	90,923
Total expenses and impairments	47,874			25,890			73,764			9,550			(120		)	83,194
Other income (expense):
Interest income	907			3,056			3,963			10,530			1,708			16,201
Interest expense	(14,161		)	(2,989		)	(17,150		)	(9,226		)	—			(26,376		)
Fair value changes ABS securitizations	—			—			—			(654		)	—			(654		)
Total other income (expense)	(13,254		)	67			(13,187		)	650			1,708			(10,829		)
Income before taxes	$	(3,136	)	$	7,643		$	4,507		$	(7,607	)	$	—		$	(3,100	)
Depreciation and amortization	$	525		$	327		$	852		$	139		$	—		$	991
Total assets	810,157			429,661			1,239,818			764,507			—			2,004,325

	Nine months ended September 30, 2012
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	305,124		$	—		$	305,124		$	1,785		$	(1,363	)	$	305,546
Other fee income	19,728			1,665			21,393			(134		)				21,259
Total fee income	324,852			1,665			326,517			1,651			(1,363		)	326,805
Gain (loss) on mortgage loans held for sale	—			312,094			312,094			—			22			312,116
Total revenues	324,852			313,759			638,611			1,651			(1,341		)	638,921
Total expenses and impairments	228,182			132,935			361,117			20,660			—			381,777
Other income (expense):
Interest income	22,406			14,719			37,125			14,145			1,363			52,633
Interest expense	(99,053		)	(15,529		)	(114,582		)	(11,304		)	(22		)	(125,908		)
Gain (loss) on interest rate swaps and caps	424			—			424			(2,126		)	—			(1,702		)
Total other income (expense)	(76,223		)	(810		)	(77,033		)	715			1,341			(74,977		)
Income before taxes	$	20,447		$	180,014		$	200,461		$	(18,294	)	$	—		$	182,167
Depreciation and amortization	$	4,104		$	1,669		$	5,773		$	585		$	—		$	6,358
Total assets	4,470,896			1,079,521			5,550,417			390,814			—			5,941,231

	Nine months ended September 30, 2011
	Servicing			Originations			Operating Segments			Legacy Portfolio and Other			Eliminations			Consolidated
REVENUES:
Servicing fee income	$	164,804		$	—		$	164,804		$	1,257		$	(5,306	)	$	160,755
Other fee income	10,437			10,983			21,420			2,579			—			23,999
Total fee income	175,241			10,983			186,224			3,836			(5,306		)	184,754
Gain (loss) on mortgage loans held for sale	—			73,832			73,832			—			(272		)	73,560
Total revenues	175,241			84,815			260,056			3,836			(5,578		)	258,314
Total expenses and impairments	128,177			71,404			199,581			20,408			(272		)	219,717
Other income (expense):
Interest income	2,529			8,560			11,089			34,851			5,306			51,246
Interest expense	(41,109		)	(7,480		)	(48,589		)	(28,340		)	—			(76,929		)
Fair value changes - ABS securitizations	—			—			—			(6,919		)	—			(6,919		)
Total other income (expense)	(38,580		)	1,080			(37,500		)	(408		)	5,306			(32,602		)
Income before taxes	$	8,484		$	14,491		$	22,975		$	(16,980	)	$	—		$	5,995
Depreciation and amortization	$	1,293		$	894		$	2,187		$	364		$	—		$	2,551
Total assets	810,157			429,661			1,239,818			764,507			—			2,004,325

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

23. Subsequent Events

Definitive Agreement to Acquire Certain Mortgage Servicing Assets of Residential Capital, LLC

On May 13, 2012, Nationstar signed a definitive agreement (the “Agreement”) which was subsequently amended on June 28, 2012 to acquire certain residential mortgage servicing assets and other assets (collectively, “Mortgage Servicing Assets”) from Residential Capital, LLC and related entities (collectively, “ResCap”) in connection with ResCap’s proceedings before the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).

On October 23, 2012, an auction was conducted for the related Mortgage Servicing Assets. During the auction, Nationstar did not secure the highest bid. The results of the auction are subject to Bankruptcy Court approval which is scheduled to be heard by the Bankruptcy Court on November 19, 2012. Because Nationstar was originally approved by the Bankruptcy Court as the stalking-horse bidder, if the Agreement is terminated as a result of the Bankruptcy Court's approval of the highest bid in the auction, ResCap will be required to pay Nationstar a $24 million break-up fee in cash (a portion of which will be payable to Newcastle). Under the terms of the Agreement, as the back-up bidder, Nationstar is required to hold open its bid until the earlier of (a) the Bankruptcy Court's approval of the successful bid or (b) 30 calendar days following the auction. If the highest bidder is not approved by the Bankruptcy Court, or is unable to complete the transaction during this time period, Nationstar would be required to purchase the Mortgage Servicing Assets for approximately $2.9 billion (Nationstar's final bid) as required pursuant to the auction terms.

Amendment of 2011-1 agency advance financing facility

In October 2012, Nationstar amended the 2011-1 Agency Advance Financing Facility. This facility has the capacity to borrow up to $600 million and the interest rate is based on LIBOR plus a spread ranging from 2.5% to 6.50% depending upon class of the note. The maturity date of this facility is October 2013. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

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Related Party Disclosures

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related Party Disclosure

Related Party Disclosure

In March 2011, Nationstar entered into a limited partnership agreement with ANC. ANC is the parent company of NREIS, which through the ANC partnership Nationstar holds a non-controlling interest in NREIS, an ancillary real estate services and vendor management company that directly and indirectly provides title agency settlement or valuation services for loan originations and default management. As Nationstar is able to exercise significant influence, but not control, over the policies and procedures of the entity, and Nationstar owns less than 50% of the voting interests, Nationstar applies the equity method of accounting. In March 2012 as part of the initial public offering restructuring, Nationstar assumed FIF’s 13% ownership in NREIS, increasing the total Nationstar investment to 35%. Nationstar disbursed servicing-related advances of $4.6 million and $1.6 million for the three months ended September 30, 2012 and September 30, 2011, respectively. Nationstar disbursed servicing-related advances of $12.4 million and $1.7 million for the nine months ended September 30, 2012 and September 30, 2011, respectively. Additionally, during May 2012, Nationstar advanced NREIS $2.0 million for future services. These amounts are recorded in accounts receivable in our financial statements.

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Mortgage Loans Held for Sale and Investment - Allowance (Details) (Mortgage Loans Held for Investment, USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Financing Receivable, Allowance for Credit Losses
Transferred loans, provision for loan losses	$ 1,500,000	$ 877,000	$ 3,200,000	$ 2,000,000
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at the beginning of the period			5,824,000	3,298,000	3,298,000
Provision for loan losses			3,153,000		3,537,000
Recoveries on loans previously charged off					0
Charge-offs			(1,332,000)		(1,011,000)
Balance at the end of the period	7,645,000		7,645,000		5,824,000
Ending balance - collectively evaluated for impairment	361,474,000		361,474,000		375,720,000
Performing
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at the beginning of the period			1,641,000	829,000	829,000
Provision for loan losses			2,249,000		1,346,000
Recoveries on loans previously charged off					0
Charge-offs			(978,000)		(534,000)
Balance at the end of the period	2,912,000		2,912,000		1,641,000
Ending balance - collectively evaluated for impairment	278,367,000		278,367,000		283,770,000
Nonperforming
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Balance at the beginning of the period			4,183,000	2,469,000	2,469,000
Provision for loan losses			904,000		2,191,000
Recoveries on loans previously charged off					0
Charge-offs			(354,000)		(477,000)
Balance at the end of the period	4,733,000		4,733,000		4,183,000
Ending balance - collectively evaluated for impairment	$ 83,107,000		$ 83,107,000		$ 91,950,000

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Guarantor Financial Statement Information (Tables)

9 Months Ended

Sep. 30, 2012

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Consolidating Balance Sheets

NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2012 (IN THOUSANDS)
Assets	Nationstar Inc.		Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)		Eliminations			Consolidated
Cash and cash equivalents	$	—	$	430,497		$	318	$	—	$	—		$	430,815
Restricted cash	—		132,854			3		126,001		—			258,858
Accounts receivable, net	—		2,851,007			—		1,978		—			2,852,985
Mortgage loans held for sale	—		703,214			—		—		—			703,214
Mortgage loans held for investment, subject to nonrecourse debt–Legacy Asset, net	—		10,137			—		228,041		—			238,178
Participating interest in reverse mortgages	—		452,886			—		—		—			452,886
Receivables from affiliates	—		(1,605,564		)	82,229		1,536,636		—			13,301
Mortgage servicing rights – fair value	—		592,692			—		—		—			592,692
Investment in subsidiaries	661,463		157,812			—		—		(819,275		)	—
Mortgage servicing rights – amortized cost	—		8,036			—		—		—			8,036
Property and equipment, net	—		47,879			835		—		—			48,714
REO, net	—		1,363			—		1,830		—			3,193
Other assets	29,783		338,359			—		—		(29,783		)	338,359
Total assets	$	691,246	$	4,121,172		$	83,385	$	1,894,486	$	(849,058	)	$	5,941,231
Liabilities and shareholders’ equity
Notes payable	$	—	$	823,608		$	—	$	1,708,708	$	—		$	2,532,316
Unsecured senior notes	—		1,062,423			—		—		—			1,062,423
Payables and accrued liabilities	—		789,639			—		2,412		(29,783		)	762,268
Payables to affiliates	—		—			—		—		—			—
Derivative financial instruments	—		30,794			—		7,041		—			37,835
Mortgage Servicing Liability	—		82,313			—		—		—			82,313
Nonrecourse debt–Legacy Assets	—		—			—		101,898		—			101,898
Excess spread financing - at fair value	—		255,484			—		—		—			255,484
Participating interest financing	—		415,448			—		—		—			415,448
Total liabilities	—		3,459,709			—		1,820,059		(29,783		)	5,249,985
Total shareholders’ equity	691,246		661,463			83,385		74,427		(819,275		)	691,246
Total liabilities and shareholders’ equity	$	691,246	$	4,121,172		$	83,385	$	1,894,486	$	(849,058	)	$	5,941,231

NATIONSTAR MORTGAGE LLC CONSOLIDATING BALANCE SHEET DECEMBER 31, 2011 (IN THOUSANDS)
	Issuer (Parent)		Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	62,201	$	244	$	—	$	—		$	62,445
Restricted cash	49,180		3		22,316		—			71,499
Accounts receivable, net	281,782		7		280,511		—			562,300
Mortgage loans held for sale	458,626		—		—		—			458,626
Mortgage loans held for investment, subject to nonrecourse debt–Legacy Asset, net	5,984		—		237,496		—			243,480
Receivables from affiliates	41,961		70,541		—		(107,893		)	4,609
Mortgage servicing rights – fair value	251,050		—		—		—			251,050
Investment in subsidiaries	140,880		—		—		(140,880		)	—
Property and equipment, net	23,238		835		—		—			24,073
REO, net	—		—		3,668		—			3,668
Other assets	106,181		—		—		—			106,181
Total assets	$	1,421,083	$	71,630	$	543,991	$	(248,773	)	$	1,787,931
Liabilities and members’ equity
Notes payable	$	628,605	$	—	$	244,574	$	—		$	873,179
Unsecured senior notes	280,199		—		—		—			280,199
Payables and accrued liabilities	180,545		—		3,244		—			183,789
Payables to affiliates	—		—		107,893		(107,893		)	—
Derivative financial instruments	5,830		—		6,540		—			12,370
Derivative financial instruments, subject to ABS nonrecourse debt	—		—		—		—			—
Nonrecourse debt–Legacy Assets	—		—		112,490		—			112,490
Excess spread financing – fair value	44,595		—		—		—			44,595
ABS nonrecourse – fair value	—		—		—		—			—
Total liabilities	1,139,774		—		474,741		(107,893		)	1,506,622
Total members’ equity	281,309		71,630		69,250		(140,880		)	281,309
Total liabilities and members’ equity	$	1,421,083	$	71,630	$	543,991	$	(248,773	)	$	1,787,931

Consolidating Statements of Operations

NATIONSTAR MORTGAGE LLC CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 (IN THOUSANDS)
	Issuer			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	50,983		$	(106	)	$	3,862		$	(1,708	)	$	53,031
Other fee income	3,517			3,882			261			—			7,660
Total fee income	54,500			3,776			4,123			(1,708		)	60,691
Gain on mortgage loans held for sale	30,232			—			—			—			30,232
Total Revenues	84,732			3,776			4,123			(1,708		)	90,923
Expenses and impairments:
Salaries, wages and benefits	49,989			915			—			—			50,904
General and administrative	20,585			871			3,941			—			25,397
Provision for loan losses	1,281			—			(404		)	—			877
Loss on foreclosed real estate	1,234			—			1,324			—			2,558
Occupancy	3,419			39			—			—			3,458
Total expenses and impairments	76,508			1,825			4,861			—			83,194
Other income / (expense):
Interest income	2,871			5			11,617			1,708			16,201
Interest expense	(14,686		)	—			(11,690		)	—			(26,376		)
Fair value changes in ABS securitizations	—			—			(553		)	(101		)	(654		)
Gain / (loss) from subsidiaries	592			—			—			(592		)	—
Total other income / (expense)	(11,223		)	5			(626		)	1,015			(10,829		)
Net income / (loss)	(2,999		)	1,956			(1,364		)	(693		)	(3,100		)
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			—			—			—
Comprehensive income / (loss)	$	(2,999	)	$	1,956		$	(1,364	)	$	(693	)	$	(3,100	)

NATIONSTAR MORTGAGE LLC CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 (IN THOUSANDS)
	Issuer (Parent)			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	162,741		$	(542	)	$	3,862		$	(5,306	)	$	160,755
Other fee income	11,647			11,411			941			—			23,999
Total fee income	174,388			10,869			4,803			(5,306		)	184,754
Gain on mortgage loans held for sale	73,560			—			—			—			73,560
Total Revenues	247,948			10,869			4,803			(5,306		)	258,314
Expenses and impairments:
Salaries, wages and benefits	143,646			2,553			—			—			146,199
General and administrative	50,054			2,705			3,948			—			56,707
Provision for loan losses	2,005			—			—			—			2,005
Loss on foreclosed real estate	1,436			—			5,468			—			6,904
Occupancy	7,765			137			—			—			7,902
Total expenses and impairments	204,906			5,395			9,416			—			219,717
Other income / (expense):
Interest income	11,070			—			34,870			5,306			51,246
Interest expense	(41,411		)	—			(35,518		)	—			(76,929		)
Fair value changes in ABS securitizations	—			—			(6,935		)	16			(6,919		)
Gain / (loss) from subsidiaries	(6,722		)	—			—			6,722			—
Total other income / (expense)	(37,063		)	—			(7,583		)	12,044			(32,602		)
Net income / (loss)	$	5,979		$	5,474		$	(12,196	)	$	6,738		$	5,995
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			(1,071		)	—			(1,071		)
Comprehensive income / (loss)	$	5,979		$	5,474		$	(13,267	)	$	6,738		$	4,924

NATIONSTAR MORTGAGE INC CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 (IN THOUSANDS)
	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	—		$	135,339		$	—	$	607		$	(442	)	$	135,504
Other fee income	—			(4,672		)	6,947		121			—			2,396
Total fee income	—			130,667			6,947		728			(442		)	137,900
Gain on mortgage loans held for sale	—			139,259			—		—			—			139,259
Total Revenues	—			269,926			6,947		728			(442		)	277,159
Expenses and impairments:
Salaries, wages and benefits	—			96,121			1,986		—			—			98,107
General and administrative	—			50,573			401		611			—			51,585
Provision for loan losses	—			—			—		1,545			—			1,545
Loss on foreclosed real estate and other	—			884			—		(2,934		)	—			(2,050		)
Occupancy	—			5,641			—		—			—			5,641
Total expenses and impairments	—			153,219			2,387		(778		)	—			154,828
Other income (expense):
Interest income	—			18,460			—		4,640			442			23,542
Interest expense	—			(43,000		)	—		(22,015		)	—			(65,015		)
Gain/(Loss) on interest rate swaps and caps	—			(389		)	—		(688		)	—			(1,077		)
Gain/(loss) from subsidiaries	49,931			(11,997		)	—		—			(37,934		)	—
Total other income (expense)	49,931			(36,926		)	—		(18,063		)	(37,492		)	(42,550		)
Income before taxes	49,931			79,781			4,560		(16,557		)	(37,934		)	79,781
Income tax expense/(benefit)	(5,136		)	29,850			—		—			—			24,714
Net income/(loss)	55,067			49,931			4,560		(16,557		)	(37,934		)	55,067
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			—		—			—			—
Reclassification adjustments for gain (loss) included in earnings	$	—		$	—		$	—	$	423		$	—		$	423
Comprehensive income / (loss)	$	55,067		$	49,931		$	4,560	$	(16,134	)	$	(37,934	)	$	55,490

NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 (IN THOUSANDS)
	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	—		$	301,363		$	—	$	5,546		$	(1,363	)	$	305,546
Other fee income	—			310			20,596		353			—			21,259
Total fee income	—			301,673			20,596		5,899			(1,363		)	326,805
Gain on mortgage loans held for sale	—			312,116			—		—			—			312,116
Total Revenues	—			613,789			20,596		5,899			(1,363		)	638,921
Expenses and impairments:
Salaries, wages and benefits	—			231,709			6,810		—			—			238,519
General and administrative	—			119,772			1,778		5,557			—			127,107
Provision for loan losses	—			—			—		3,153			—			3,153
Loss on foreclosed real estate and other	—			1,008			—		697			—			1,705
Occupancy	—			11,293			—		—			—			11,293
Total expenses and impairments	—			363,782			8,588		9,407			—			381,777
Other income (expense):
Interest income	—			36,489			—		14,781			1,363			52,633
Interest expense	—			(89,832		)	—		(36,076		)	—			(125,908		)
Gain/(Loss) on interest rate swaps and caps	—			(1,201		)	—		(501		)	—			(1,702		)
Gain/(loss) from subsidiaries	114,591			(13,331		)	—		—			(101,260		)	—
Total other income (expense)	114,591			(67,875		)	—		(21,796		)	(99,897		)	(74,977		)
Income before taxes	114,591			182,132			12,008		(25,304		)	(101,260		)	182,167
Income tax expense/(benefit)	(26,937		)	67,541			5		30			—			40,639
Net income/(loss)	141,528			114,591			12,003		(25,334		)	(101,260		)	141,528
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			—		(423		)	—			(423		)
Reclassification adjustments for gain (loss) included in earnings	—			—			—		423			—			423
Comprehensive income / (loss)	$	141,528		$	114,591		$	12,003	$	(25,334	)	$	(101,260	)	$	141,528

Consolidating Statements of Cash Flows

NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 (IN THOUSANDS)
	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Operating activities:
Net income/(loss)	$	141,528		$	114,591		$	12,003		$	(25,334	)	$	(101,260	)	$	141,528
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
(Gain)/loss from subsidiaries	(114,591		)	13,331			—			—			101,260			—
Share-based compensation	—			10,665			—			—			—			10,665
Gain on mortgage loans held for sale	—			(312,116		)	—			—			—			(312,116		)
Provision for loan losses	—			—			—			3,153			—			3,153
Loss on foreclosed real estate and other	—			1,008			—			697			—			1,705
Loss on equity method investments	—			1,327			—			—			—			1,327
(Gain)/loss on ineffectiveness on interest rate swaps and cap	—			1,201			—			501			—			1,702
Fair value changes in excess spread financing	—			5,050			—			—			—			5,050
Depreciation and amortization	—			6,315			43			—			—			6,358
Change in fair value of mortgage servicing rights	—			42,810			—			—			—			42,810
Accretion of mortgage servicing liability	—			(3,276		)	—			—			—			(3,276		)
Amortization of debt discount	—			16,387			—			1,714			—			18,101
Amortization of premiums/(discounts)	—			(125		)	—			(3,877		)	—			(4,002		)
Mortgage loans originated and purchased, net of fees	—			(4,814,018		)	—			—			—			(4,814,018		)
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	—			4,761,946			—			7,371			—			4,769,317
Changes in assets and liabilities:
Accounts receivable	—			(546,934		)	7			278,533			—			(268,394		)
Receivables from/(payables to) affiliates	—			1,626,650			(11,979		)	(1,614,018		)	—			653
Reverse funded advances due to securitization	—			(317,272		)	—			—			—			(317,272		)
Other assets	(29,783		)	(135,107		)	—			—			29,783			(135,107		)
Accounts payable and accrued liabilities	2,846			259,694			—			(832		)	(29,783		)	231,925
Net cash provided by/(used in) operating activities	—			732,127			74			(1,352,092		)	—			(619,891		)

	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Investing activities:
Property and equipment additions, net of disposals	—			(20,699		)	—		—			—			(20,699		)
Cash Proceeds from assumption of reverse mortgage servicing obligations, net	—			(31,169		)	—		—			—			(31,169		)
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred	—			(2,024,019		)	—		—			—			(2,024,019		)
Repurchases of REO from Ginnie Mae	—			(6,856		)	—		—			—			(6,856		)
Proceeds from sales of REO	—			4,485			—		3,949			—			8,434
Net cash provided by/(used in) investing activities	—			(2,078,258		)	—		3,949			—			(2,074,309		)
Financing activities:
Issuance of Senior Unsecured Notes	—			781,196			—		—			—			781,196
Transfers to/from restricted cash	—			(83,674		)	—		(103,685		)	—			(187,359		)
Issuance of common stock, net of IPO issuance costs	246,700			—			—		—			—			246,700
Issuance of participating interest financing	—			416,303			—		—			—			416,303
Issuance of excess spread financing	—			215,570			—		—			—			215,570
Increase (decrease) in notes payable, net	—			195,003			—		1,464,134			—			1,659,137
Repayment of nonrecourse debt–Legacy assets	—			—			—		(12,306		)	—			(12,306		)
Repayment of excess servicing spread financing	—			(12,981		)	—		—			—			(12,981		)
Distribution to subsidiaries	(246,700		)	—			—		—			246,700			—
Contributions of parent	—			246,700			—		—			(246,700		)	—
Debt financing costs	—			(43,690		)	—		—			—			(43,690		)
Net cash provided by/(used in) financing activities	—			1,714,427			—		1,348,143			—			3,062,570
Net increase/(decrease) in cash	—			368,296			74		—			—			368,370
Cash and cash equivalents at beginning of period	—			62,201			244		—			—			62,445
Cash and cash equivalents at end of period	$	—		$	430,497		$	318	$	—		$	—		$	430,815

NATIONSTAR MORTGAGE LLC CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 (IN THOUSANDS)
	Issuer (Parent)			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Operating activities:
Net income/(loss)	$	5,979		$	5,474		$	(12,196	)	$	6,738		$	5,995
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Loss on equity method investments	971												971
Share-based compensation	12,201			—			—			—			12,201
Gain on mortgage loans held for sale	(73,560		)	—			—			—			(73,560		)
Provision for loan losses	2,005			—			—			—			2,005
Loss on foreclosed real estate and other	1,436			—			5,468			—			6,904
(Gain)/loss on ineffectiveness on interest rate swaps and cap	—			—			(2,032		)	—			(2,032		)
Fair value changes in ABS securitizations	—			—			6,935			(16		)	6,919
Loss from subsidiaries	6,722			—			—			(6,722		)	—
Depreciation and amortization	2,551			—			—			—			2,551
Change in fair value of mortgage servicing rights	30,757			—			—			—			30,757
Amortization of debt discount	6,667			—			3,657			—			10,324
Amortization of premiums/(discounts)	—			—			(4,001		)	—			(4,001		)
Mortgage loans originated and purchased, net of fees	(2,285,558		)	—			—			—			(2,285,558		)
Cost of loans sold, net of fees	2,287,430			—			—			—			2,287,430
Principal payments/prepayments received and other changes in mortgage loans originated as held for sale	37,620			—			9,757			—			47,377
Changes in assets and liabilities:
Accounts receivable	(35,366		)	(5		)	316			—			(35,055		)
Receivables from/(payables to) affiliates	(24,356		)	(5,031		)	32,298			—			2,911
Other assets	(2,037		)	—			—			—			(2,037		)
Accounts payable and accrued liabilities	36,053			—			(213		)	—			35,840
Net cash provided by/(used) in operating activities	9,515			438			39,989			—			49,942

	Issuer (Parent)			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations		Consolidated
Investing activities:
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt	—			—			29,395			—		29,395
Property and equipment additions, net of disposals	(15,147		)	—			—			—		(15,147		)
Acquisition of equity method investment	(6,600		)	—			—			—		(6,600		)
Purchase of mortgage servicing rights	(40,305		)	—			—			—		(40,305		)
Proceeds from sales of REO	—			—			22,897			—		22,897
Net cash provided by/(used) in investing activities	(62,052		)	—			52,292			—		(9,760		)
Financing activities:
Transfers to/from restricted cash	4,972			(3		)	13,343			—		18,312
Decrease in notes payable, net	62,237			—			(33,212		)	—		29,025
Repayment of nonrecourse debt–Legacy assets	—			—			(26,119		)	—		(26,119		)
Repayment of ABS nonrecourse debt	—			—			(47,175		)	—		(47,175		)
Debt financing costs	(2,734		)	—			—			—		(2,734		)
Distribution to parent	(3,900		)	—			—			—		(3,900		)
Tax related share-based settlement of units by members	(4,809		)	—			—			—		(4,809		)
Net cash provided by/(used) in financing activities	55,766			(3		)	(93,163		)	—		(37,400		)
Net increase/(decrease) in cash	3,229			435			(882		)	—		2,782
Cash and cash equivalents at beginning of period	20,904			319			—			—		21,223
Cash and cash equivalents at end of period	$	24,133		$	754		$	(882	)	$	—	$	24,005

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Nature of Business, Basis of Presentation and Material Transaction (Policies)

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidation, Policy

The consolidated financial statements include the accounts of Nationstar Inc. and its wholly-owned subsidiaries and those variable interest entities (VIEs) where Nationstar Inc.'s wholly-owned subsidiaries are the primary beneficiaries. Nationstar Inc. applies the equity method of accounting to investments when the entity is not a VIE and Nationstar Inc. is able to exercise significant influence, but not control, over the policies and procedures of the entity but owns less than 50% of the voting interests. Intercompany balances and transactions have been eliminated. Results of operations, assets and liabilities of VIEs are included from the date that Nationstar Inc. became the primary beneficiary through the date Nationstar Inc. ceases to be the primary beneficiary.

Basis of Accounting, Policy

The interim consolidated financial statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of the interim periods have been included. The consolidated interim financial statements of Nationstar Inc. have been prepared in accordance with generally accepted accounting principles for interim information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (SEC). Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States (GAAP) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Nationstar Mortgage LLC's Annual Report on Form 10-K filed on March 15, 2012.

New Accounting Pronouncements, Policy

Accounting Standards Update No. 2011-03, Reconsideration of Effective Control for Repurchase Agreements (Update No. 2011-03). Update No. 2011-03 is intended to improve the accounting and reporting of repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. This amendment removes the criterion pertaining to an exchange of collateral such that it should not be a determining factor in assessing effective control, including (i) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (ii) the collateral maintenance implementation guidance related to that criterion. Other criteria applicable to the assessment of effective control are not changed by the amendments in the update. The amendments in this update were effective for interim and annual periods beginning after December 15, 2011. The adoption of Update No. 2011-03 did not have a material impact on the Company’s financial condition, liquidity or results of operations.

Accounting Standards Update No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (Update No. 2011-04). Update No. 2011-04 is intended to provide common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards (IFRS). The changes required in this update include changing the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments in this update are to be applied prospectively and were effective for interim and annual periods beginning after December 15, 2011. Upon adoption, certain disclosure requirements were added to the Fair Value Measurements footnote. The adoption of Update No. 2011-04 did not have a material impact on the Company’s financial condition, liquidity or results of operations.

Accounting Standards Update No. 2011-05, Presentation of Comprehensive Income (Update No. 2011-05). Update No. 2011-05 is intended to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. Update No. 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity and now requires that all non-owner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This update does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments in this update are to be applied retrospectively and were effective for interim and annual periods beginning after December 15, 2011. The adoption of Update No. 2011-05 did not have a material impact on the Company’s financial statements.

Accounting Standards Update No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No 2011-05 (Update No. 2011-12). Update 2011-12 is intended to temporarily defer the effective date of the requirement to present separate line items on the income statement for reclassification adjustments of items out of accumulated other comprehensive income into net income as required by Update No. 2011-05. All other requirements in Update 2011-05 are not affected by this update. This update does not change the requirement to present reclassifications adjustments within other comprehensive income either on the face of the statement that reports other comprehensive income or in the notes to the financial statements (Update 2011-05). The amendments in this update were effective for interim and annual periods beginning after December 15, 2011. The adoption of Update No. 2011-12 did not have a material impact on the Company's financial statements.

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Variable Interest Entities and Securitizations (Tables)

9 Months Ended

Sep. 30, 2012

Variable Interest Entities and Securitizations [Abstract]

Schedule of Assets and Liabilities of VIEs Included in Financial Statements

A summary of the assets and liabilities of Nationstar’s transactions with VIEs included in the Company’s consolidated financial statements as of September 30, 2012 and December 31, 2011 is presented in the following tables (in thousands):

	September 30, 2012		December 31, 2011
	Transfers Accounted for as Secured Borrowings		Transfers Accounted for as Secured Borrowings
ASSETS
Restricted cash	$	126,002	$	22,316
Accounts receivable	2,269,229		279,414
Mortgage loans held for investment, subject to nonrecourse debt	228,041		237,496
REO	1,830		3,668
Total Assets	$	2,625,102	$	542,894
LIABILITIES
Notes payable	$	1,707,941	$	244,574
Payables and accrued liabilities	2,412		977
Derivative financial instruments	7,041		—
Nonrecourse debt–Legacy Assets	101,898		112,490
Total Liabilities	$	1,819,292	$	358,041

Unconsolidated Securitization Trusts

A summary of mortgage loans transferred to unconsolidated securitization trusts that are 60 days or more past due and the credit losses incurred in the unconsolidated securitization trusts are presented below (in thousands):

	As of or for the nine months ended,
	September 30, 2012				September 30, 2011
	Principal Amount of Loans 60 Days or More Past Due		Credit Losses		Principal Amount of Loans 60 Days or More Past Due		Credit Losses
Total securitization trusts	$	1,060,797	$	208,628	$	801,216	$	182,991

A summary of the outstanding collateral and certificate balances for securitization trusts, including any retained beneficial interests and MSRs, that were not consolidated by Nationstar for the periods indicated are as follows (in thousands):

	September 30, 2012		December 31, 2011
Total collateral balances	$	4,239,774	$	4,579,142
Total certificate balances	4,230,472		4,582,598
Total mortgage servicing rights at fair value	23,367		28,635

Cash Flow Receieved from Securitization Trusts

Certain cash flows received from securitization trusts accounted for as sales for the dates indicated were as follows (in thousands):

	For the three months ended								For the nine months ended
	September 30, 2012				September 30, 2011				September 30, 2012				September 30, 2011
	Servicing Fees Received		Loan Repurchases		Servicing Fees Received		Loan Repurchases		Servicing Fees Received		Loan Repurchases		Servicing Fees Received		Loan Repurchases
Total securitization trusts	$	6,317	$	—	$	5,870	$	—	$	22,149	$	—	$	21,221	$	—

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Recent Accounting Developments

9 Months Ended

Sep. 30, 2012

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Developments

Recent Accounting Developments

Accounting Standards Update No. 2011-03, Reconsideration of Effective Control for Repurchase Agreements (Update No. 2011-03). Update No. 2011-03 is intended to improve the accounting and reporting of repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. This amendment removes the criterion pertaining to an exchange of collateral such that it should not be a determining factor in assessing effective control, including (i) the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and (ii) the collateral maintenance implementation guidance related to that criterion. Other criteria applicable to the assessment of effective control are not changed by the amendments in the update. The amendments in this update were effective for interim and annual periods beginning after December 15, 2011. The adoption of Update No. 2011-03 did not have a material impact on the Company’s financial condition, liquidity or results of operations.

Accounting Standards Update No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (Update No. 2011-04). Update No. 2011-04 is intended to provide common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards (IFRS). The changes required in this update include changing the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments in this update are to be applied prospectively and were effective for interim and annual periods beginning after December 15, 2011. Upon adoption, certain disclosure requirements were added to the Fair Value Measurements footnote. The adoption of Update No. 2011-04 did not have a material impact on the Company’s financial condition, liquidity or results of operations.

Accounting Standards Update No. 2011-05, Presentation of Comprehensive Income (Update No. 2011-05). Update No. 2011-05 is intended to improve the comparability, consistency, and transparency of financial reporting and to increase the prominence of items reported in other comprehensive income. Update No. 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity and now requires that all non-owner changes in shareholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This update does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments in this update are to be applied retrospectively and were effective for interim and annual periods beginning after December 15, 2011. The adoption of Update No. 2011-05 did not have a material impact on the Company’s financial statements.

Accounting Standards Update No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No 2011-05 (Update No. 2011-12). Update 2011-12 is intended to temporarily defer the effective date of the requirement to present separate line items on the income statement for reclassification adjustments of items out of accumulated other comprehensive income into net income as required by Update No. 2011-05. All other requirements in Update 2011-05 are not affected by this update. This update does not change the requirement to present reclassifications adjustments within other comprehensive income either on the face of the statement that reports other comprehensive income or in the notes to the financial statements (Update 2011-05). The amendments in this update were effective for interim and annual periods beginning after December 15, 2011. The adoption of Update No. 2011-12 did not have a material impact on the Company's financial statements.

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Accounts Receivable (Tables)

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Schedule of Accounts Receivable

Accounts receivable consist of the following (in thousands):

	September 30, 2012		December 31, 2011
Delinquent interest advances	$	1,508,429	$	213,737
Corporate and escrow advances	1,159,711		299,946
Accrued servicing fees	94,214		20,865
Reverse mortgage	26,240		—
Receivables from trusts	13,175		4,664
Accrued interest	3,942		1,512
Insurance deposits	1,750		1,750
Other	45,524		19,826
Total accounts receivable	$	2,852,985	$	562,300

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Fair Value Measurements - Fair Value by Balance Sheet Line Item (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Financial assets:
Derivative instruments	$ 112,628	$ 11,302
Financial liabilities:
Excess spread financing at fair value	255,484	44,595
Level 1
Financial assets:
Cash and cash equivalents	430,815	62,445
Restricted cash	258,858	71,499
Mortgages loans held for sale	0	0
Mortgage loans held for investment, subject to nonrecourse debt - Legacy assets	0	0
Reverse mortgage interests	0
Derivative instruments	0	0
Financial liabilities:
Notes payable	0	0
Unsecured senior notes	1,129,060	282,150
Derivative financial instruments	0	0
Nonrecourse debt - Legacy assets	0	0
Excess spread financing at fair value	0	0
Participating interest financing	0
Level 2
Financial assets:
Cash and cash equivalents	0	0
Restricted cash	0	0
Mortgages loans held for sale	703,214	458,626
Mortgage loans held for investment, subject to nonrecourse debt - Legacy assets	0	0
Reverse mortgage interests	492,765
Derivative instruments	112,628	11,302
Financial liabilities:
Notes payable	0	0
Unsecured senior notes	0	0
Derivative financial instruments	37,835	12,370
Nonrecourse debt - Legacy assets	0	0
Excess spread financing at fair value	0	0
Participating interest financing	417,650
Level 3
Financial assets:
Cash and cash equivalents	0	0
Restricted cash	0	0
Mortgages loans held for sale	0	0
Mortgage loans held for investment, subject to nonrecourse debt - Legacy assets	221,852	226,890
Reverse mortgage interests	0
Derivative instruments	0	0
Financial liabilities:
Notes payable	2,532,216	873,179
Unsecured senior notes	0	0
Derivative financial instruments	0	0
Nonrecourse debt - Legacy assets	103,727	114,037
Excess spread financing at fair value	255,484	44,595
Participating interest financing	0
Carrying Amount
Financial assets:
Cash and cash equivalents	430,815	62,445
Restricted cash	258,858	71,499
Mortgages loans held for sale	703,214	458,626
Mortgage loans held for investment, subject to nonrecourse debt - Legacy assets	238,178	243,480
Reverse mortgage interests	452,886
Derivative instruments	112,628	11,302
Financial liabilities:
Notes payable	2,532,216	873,179
Unsecured senior notes	1,062,423	280,199
Derivative financial instruments	37,835	12,370
Nonrecourse debt - Legacy assets	101,898	112,490
Excess spread financing at fair value	255,484	44,595
Participating interest financing	$ 415,448

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The estimated carrying amount and fair value of Nationstar’s financial instruments and other assets and liabilities measured at fair value on a recurring basis is as follows for the dates indicated (in thousands):

			September 30, 2012
			Recurring Fair Value Measurements
	Total Fair Value		Level 1		Level 2		Level 3
ASSETS
Mortgage loans held for sale(1)	$	703,214	$	—	$	703,214	$	—
Mortgage servicing rights – fair value(1)	592,692		—		—		592,692
Other assets:
IRLCs	112,628		—		112,628		—
Total assets	$	1,408,534	$	—	$	815,842	$	592,692
LIABILITIES
Derivative financial instruments
Interest rate swaps and caps	$	7,041	$	—	$	7,041	$	—
Interest rate swaps on ABS debt	1,632		—		1,632		—
Forward MBS trades	29,162		—		29,162		—
Excess spread financing (at fair value)	255,484		—		—		255,484
Total liabilities	$	293,319	$	—	$	37,835	$	255,484
			December 31, 2011
			Recurring Fair Value Measurements
	Total Fair Value		Level 1		Level 2		Level 3
ASSETS
Mortgage loans held for sale(1)	$	458,626	$	—	$	458,626	$	—
Mortgage servicing rights – fair value(1)	251,050		—		—		251,050
Other assets:
IRLCs	11,302		—		11,302		—
Total assets	$	720,978	$	—	$	469,928	$	251,050
LIABILITIES
Derivative financial instruments
Interest rate swaps and caps	$	6,540	$	—	$	6,540	$	—
Forward MBS trades	5,830		—		5,830		—
Excess spread financing (at fair value)	44,595		—		—		44,595
Total liabilities	$	56,965	$	—	$	12,370	$	44,595

(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.

Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The table below presents a reconciliation for all of Nationstar’s Level 3 assets and liabilities measured at fair value on a recurring basis for the dates indicated (in thousands):

	ASSETS			LIABILITIES
For the three months ended September 30, 2012	Mortgage servicing rights			Excess spread financing
Beginning balance	$	596,462		$	266,693
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Total gains or losses
Included in earnings	(22,430		)	(2,213		)
Included in other comprehensive income	—			—
Purchases, issuances, sales and settlements
Purchases	5,210			—
Issuances	13,450			(1,522		)
Sales	—			—
Settlements	—			(7,474		)
Ending balance	$	592,692		$	255,484

	ASSETS			LIABILITIES
For the nine months ended September 30, 2012	Mortgage servicing rights			Excess spread financing
Beginning balance	$	251,050		$	44,595
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Total gains or losses
Included in earnings	(42,810		)	5,050
Included in other comprehensive income	—			—
Purchases, issuances, sales and settlements
Purchases	346,874			—
Issuances	37,578			218,820
Sales	—			—
Settlements	—			(12,981		)
Ending balance	$	592,692		$	255,484

	ASSETS			LIABILITIES
For the year ending December 31, 2011	Mortgage servicing rights			Excess spread financing
Beginning balance	$	145,062		$	—
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Total gains or losses
Included in earnings	(39,000		)	3,060
Included in other comprehensive income	—			—
Purchases, issuances, sales and settlements
Purchases	102,800			—
Issuances	36,474			43,742
Sales	—			—
Settlements	5,714			(2,207		)
Ending balance	$	251,050		$	44,595

Fair Value Measurements, Nonrecurring

The table below presents the items which Nationstar measures at fair value on a nonrecurring basis (in thousands).

	Nonrecurring Fair Value Measurements						Total Estimated Fair Value		Total Gain (Loss) Included in Earnings
	Level 1		Level 2		Level 3
Three months ended September 30, 2012
Assets
REO(1)	$	—	$	—	$	3,193	$	3,193	$	2,050
Total assets	$	—	$	—	$	3,193	$	3,193	$	2,050
Nine months ended September 30, 2012
Assets
REO(1)	$	—	$	—	$	3,193	$	3,193	$	(1,705	)
Total assets	$	—	$	—	$	3,193	$	3,193	$	(1,705	)
Year ended December 31, 2011
Assets
REO(1)	$	—	$	—	$	3,668	$	3,668	$	(6,833	)
Total assets	$	—	$	—	$	3,668	$	3,668	$	(6,833	)

(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

Fair Value, by Balance Sheet Grouping

The table below presents a summary of the estimated carrying amount and fair value of Nationstar’s financial instruments (in thousands).

	September 30, 2012
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	430,815	$	430,815	$	—	$	—
Restricted cash	258,858		258,858		—		—
Mortgage loans held for sale	703,214		—		703,214		—
Mortgage loans held for investment, subject to nonrecourse debt – Legacy assets	238,178		—		—		221,852
Reverse mortgage interests	452,886		—		492,765		—
Derivative instruments	112,628		—		112,628		—
Financial liabilities:
Notes payable	2,532,216		—		—		2,532,216
Unsecured senior notes	1,062,423		1,129,060		—		—
Derivative financial instruments	37,835		—		37,835		—
Nonrecourse debt - Legacy assets	101,898		—		—		103,727
Excess spread financing	255,484		—		—		255,484
Participating interest financing	415,448		—		417,650		—
	December 31, 2011
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	62,445	$	62,445	$	—	$	—
Restricted cash	71,499		71,499		—		—
Mortgage loans held for sale	458,626		—		458,626		—
Mortgage loans held for investment, subject to nonrecourse debt – Legacy assets	243,480		—		—		226,890
Derivative instruments	11,302		—		11,302		—
Financial liabilities:
Notes payable	873,179		—		—		873,179
Unsecured senior notes	280,199		282,150		—		—
Derivative financial instruments	12,370		—		12,370		—
Nonrecourse debt - Legacy assets	112,490		—		—		114,037
Excess spread financing	44,595		—		—		44,595

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Mortgage Loans Held for Sale and Investment - Reconciliation to Cash Flow (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward]
Mortgage loans held for sale - beginning balance	$ 458,626	$ 369,617
Mortgage loans originated and purchased, net of fees	4,814,018	2,285,558
Cost of loans sold, net of fees	(4,606,909)	(2,287,430)
Principal payments received on mortgage loans held for sale and other changes	38,935	10,475
Transfer of mortgage loans held for sale to held for investment	(1,456)	(288)
Mortgage loans held for sale - ending balance	$ 703,214	$ 377,932

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Indebtedness - Unsecured Senior Notes (Details) (USD $)										1 Months Ended		1 Months Ended			1 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Unsecured Senior Notes	Sep. 30, 2012 Unsecured Senior Notes Unsecured Senior Notes 10.875% Due April 2015	Dec. 31, 2011 Unsecured Senior Notes Unsecured Senior Notes 10.875% Due April 2015	Sep. 30, 2012 Unsecured Senior Notes Unsecured Senior Notes 9.625% Due May 2019	Dec. 31, 2011 Unsecured Senior Notes Unsecured Senior Notes 9.625% Due May 2019	Sep. 30, 2012 Unsecured Senior Notes Unsecured Senior Notes Seven Point Eight Seven Five Percent Due Oct 202 [Member]	Dec. 31, 2011 Unsecured Senior Notes Unsecured Senior Notes Seven Point Eight Seven Five Percent Due Oct 202 [Member]	Mar. 31, 2010 March 2010 Issuance Period Unsecured Senior Notes Unsecured Senior Notes 10.875% Due April 2015	Dec. 31, 2011 March 2010 Issuance Period Unsecured Senior Notes Unsecured Senior Notes 10.875% Due April 2015	Dec. 31, 2011 December 2011 Issuance Period Unsecured Senior Notes Unsecured Senior Notes 10.875% Due April 2015	Apr. 30, 2012 April 2012 Issuance Period Unsecured Senior Notes Unsecured Senior Notes 9.625% Due May 2019	Jul. 31, 2012 Fourth Issuance Period [Member] Unsecured Senior Notes	Jul. 31, 2012 Fourth Issuance Period [Member] Unsecured Senior Notes Unsecured Senior Notes 9.625% Due May 2019	Sep. 30, 2012 Fifth Issuance Period [Member] Unsecured Senior Notes Unsecured Senior Notes Seven Point Eight Seven Five Percent Due Oct 202 [Member]	Sep. 30, 2012 Sixth Issuance Period [Member] [Member] Unsecured Senior Notes Unsecured Senior Notes Seven Point Eight Seven Five Percent Due Oct 202 [Member]
Debt Instrument
Unsecured senior notes	$ 1,062,423,000	$ 280,199,000		$ 281,307,000	$ 280,199,000	$ 380,366,000	$ 0	$ 400,750,000	$ 0
Principal amount			1,060,000,000							250,000,000	285,000,000,000	35,000,000	275,000,000	100,000,000		300,000,000	100,000,000
Debt issuance discount										7,000,000		300,000
Net cash proceeds										$ 243,000,000		$ 34,700,000	$ 269,500,000		$ 103,300,000	$ 99,300,000	$ 295,500,000
Interest rate					10.875%								9.625%			7.875%

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Assets
Cash and cash equivalents	$ 430,815	$ 62,445
Restricted cash	258,858	71,499
Accounts receivable	2,852,985	562,300
Mortgage loans held for sale	703,214	458,626
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Assets, net of allowance for loan losses of $6,101 and $5,824, respectively	238,178	243,480
Reverse mortgage interests	452,886	0
Receivables from affiliates	13,301	4,609
Mortgage servicing rights - fair value	592,692	251,050
Mortgage servicing rights - amortized cost	8,036	0
Property and equipment, net of accumulated depreciation of $42,573 and $39,201, respectively	48,714	24,073
Real estate owned (REO), net	3,193	3,668
Other assets	338,359	106,181
Total assets	5,941,231	1,787,931
Liabilities and equity
Notes payable	2,532,316	873,179
Unsecured senior notes	1,062,423	280,199
Payables and accrued liabilities	762,268	183,789
Derivative financial instruments	37,835	12,370
Mortgage servicing liabilities	82,313	0
Nonrecourse debt - Legacy Assets	101,898	112,490
Excess spread financing - fair value	255,484	44,595
Participating interest financing	415,448	0
Total liabilities	5,249,985	1,506,622
Commitments and contingencies - See Note 18
Members' units related to Nationstar Mortgage LLC	0	281,309
Preferred stock at $0.01 par value - 300,000 shares authorized, no shares issued and outstanding	0	0
Common stock at $0.01 par value - 1,000,000 shares authorized, 89,167 shares issued and outstanding	904	0
Additional paid-in-capital	553,380	0
Accumulated other comprehensive loss	0	0
Retained earnings	141,528	0
Common stock held by subsidiary	(4,566)	0
Total equity	691,246	281,309
Total liabilities and equity	$ 5,941,231	$ 1,787,931

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Nature of Business, Basis of Presentation and Material Transaction (Details) (Common Stock)	9 Months Ended
	Sep. 30, 2012
Common Stock
Schedule of Capitalization, Equity [Line Items]
Number of shares issued to FIF as part of Reorganization	70,000,000

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Related Party Disclosures (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended		9 Months Ended
	Mar. 31, 2012	Sep. 30, 2012 NREIS	Sep. 30, 2011 NREIS	Sep. 30, 2012 NREIS	Sep. 30, 2011 NREIS	May 31, 2012 NREIS
Related Party Transaction [Line Items]
Percentage interest in equity investment acquired	13.00%
Percentage interest in equity investment	35.00%
Servicing-related advances		$ 4.6	$ 1.6	$ 12.4	$ 1.7
Advances to Affiliate						$ 2.0

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Unaudited Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Operating activities
Net income	$ 141,528	$ 5,995
Adjustments to reconcile net income to net cash (used in) / provided by operating activities:
Share-based compensation	10,665	12,201
Gain on mortgage loans held for sale	(312,116)	(73,560)
Provision for loan losses	3,153	2,005
Loss on foreclosed real estate	1,705	6,904
Loss on equity method investments	1,327	971
(Gain) / loss on derivatives including ineffectiveness on interest rate swaps and caps	1,702	(2,032)
Fair value changes in ABS securitizations	0	6,919
Fair value changes in excess spread financing	5,050	0
Depreciation and amortization	6,358	2,551
Fair value changes in mortgage servicing rights	42,810	30,757
Amortizable/Accretion of mortgage servicing rights at amortized cost	(3,276)	0
Amortization of debt discount	18,101	10,324
Amortization of discounts	(4,002)	(4,001)
Mortgage loans originated and purchased, net of fees	(4,814,018)	(2,285,558)
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	4,769,317	2,334,807
Changes in assets and liabilities:
Accounts receivable, net	(268,394)	(35,055)
Receivables from affiliates	653	2,911
Reverse mortgage interests	(317,272)	0
Other assets	(135,107)	(2,037)
Payables and accrued liabilities	231,925	35,840
Net cash (used in)/provided by operating activities	(619,891)	49,942
Investing activities
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt	0	29,395
Property and equipment additions, net of disposals	(20,699)	(15,147)
Acquisition of equity method investee	0	(6,600)
Cash proceeds from assumption of reverse mortgage servicing obligations, net	(31,169)	0
Purchase of forward mortgage servicing rights, net of liabilities incurred	(2,024,019)	(40,305)
Loan Repurchases from Ginnie Mae	(6,856)	0
Proceeds from sales of REO	8,434	22,897
Net cash (used in) / provided by investing activities	(2,074,309)	(9,760)
Financing activities
Issuance of Senior Unsecured Notes, net	781,196	0
Transfers (to) / from restricted cash, net	(187,359)	18,312
Issuance of common stock, net of IPO issuance costs	246,700	0
Issuance of participating interest financing	416,303	0
Issuance of excess spread financing	215,570	0
Increase (decrease) in notes payable	1,659,137	29,025
Repayment of nonrecourse debt - Legacy assets	(12,306)	(26,119)
Repayment of ABS nonrecourse debt	0	(47,175)
Repayment of excess servicing spread financing	(12,981)	0
Distributions to parent - FIF	0	(3,900)
Debt financing costs	(43,690)	(2,734)
Tax related share-based settlement of units by members	0	(4,809)
Net cash provided by / (used in) financing activities	3,062,570	(37,400)
Net increase / (decrease) in cash and cash equivalents	368,370	2,782
Cash and cash equivalents at beginning of period	62,445	21,223
Cash and cash equivalents at end of period	430,815	24,005
Supplemental disclosures of non-cash activities
Transfer of mortgage loans held for sale to REO at fair value	0	90
Transfer of mortgage loans held for investment to REO at fair value	2,808	3,675
Transfer of mortgage loans held for investment, subject to ABS nonrecourse debt to REO at fair value	0	9,616
Mortgage servicing rights resulting from sale or securitization of mortgage loans	37,578	17,985
Excess tax benefit from share based compensation	2,846	0
Tax related share-based settlement of common stock	4,566	0
Liabilities incurred from acquired servicer advances	$ 294,671	$ 0

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Guarantor Financial Statement Information - Consolidating Statements of Cash Flow (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Operating activities
Net income/(loss)	$ 141,528	$ 5,995	$ 20,887
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Gain/(loss) from subsidiaries	0	0
Share-based compensation	10,665	12,201
Gain on mortgage loans held for sale	(312,116)	(73,560)
Provision for loan losses	3,153	2,005
Loss on foreclosed real estate and other	1,705	6,904
Loss on equity method investments	1,327	971
(Gain) / loss on ineffectiveness on interest rate swaps and cap	1,702	(2,032)
Fair value changes in ABS securitizations	0	6,919
Fair value changes in excess spread financing	5,050	0
Depreciation and amortization	6,358	2,551
Change in fair value on mortgage servicing rights	42,810	30,757
Accretion of mortgage servicing liability	(3,276)	0
Amortization of debt discount	18,101	10,324
Amortization of premiums/(discounts)	(4,002)	(4,001)
Mortgage loans originated and purchased, net of fees	(4,814,018)	(2,285,558)
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	4,769,317	2,334,807
Proceeds from Sale of Loans Held-for-sale		2,287,430
Proceeds from Collection of Mortgage Loans Held-for-sale		47,377
Changes in assets and liabilities:
Accounts receivable	(268,394)	(35,055)
Receivables from/(payables to) affiliates	653	2,911
Reverse funded advances due to securitization	(317,272)	0
Other assets	(135,107)	(2,037)
Payables and accrued liabilities	231,925	35,840
Net cash (used in)/provided by operating activities	(619,891)	49,942
Investing activities
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt	0	29,395
Property and equipment additions, net of disposals	(20,699)	(15,147)
Cash Proceeds from assumption of reverse mortgage servicing obligations, net	(31,169)	0
Acquisition of equity method investment	0	(6,600)
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred	(2,024,019)	(40,305)
Repurchases of REO from Ginnie Mae	(6,856)	0
Proceeds from sales of REO	8,434	22,897
Net cash (used in) / provided by investing activities	(2,074,309)	(9,760)
Financing activities
Issuance of Senior Unsecured Notes	781,196	0
Transfers (to) / from restricted cash, net	(187,359)	18,312
Issuance of common stock, net of IPO issuance costs	246,700	0
Issuance of participating interest financing	416,303	0
Issuance of excess spread financing	215,570	0
Increase (decrease) in notes payable	1,659,137	29,025
Repayment of nonrecourse debt - Legacy assets	(12,306)	(26,119)
Repayment of ABS nonrecourse debt	0	(47,175)
Repayment of excess servicing spread financing	(12,981)	0
Distribution to subsidiaries	0
Contributions of parent	0
Distribution to parent	0	(3,900)
Debt financing costs	(43,690)	(2,734)
Tax related share-based settlement of units by members	0	(4,809)
Net cash provided by / (used in) financing activities	3,062,570	(37,400)
Net increase / (decrease) in cash and cash equivalents	368,370	2,782
Cash and cash equivalents at beginning of period	62,445	21,223	21,223
Cash and cash equivalents at end of period	430,815	24,005	62,445
Parent Company
Operating activities
Net income/(loss)	141,528
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Gain/(loss) from subsidiaries	(114,591)
Share-based compensation	0
Gain on mortgage loans held for sale	0
Provision for loan losses	0
Loss on foreclosed real estate and other	0
Loss on equity method investments	0
(Gain) / loss on ineffectiveness on interest rate swaps and cap	0
Fair value changes in excess spread financing	0
Depreciation and amortization	0
Change in fair value on mortgage servicing rights	0
Accretion of mortgage servicing liability	0
Amortization of debt discount	0
Amortization of premiums/(discounts)	0
Mortgage loans originated and purchased, net of fees	0
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	0
Changes in assets and liabilities:
Accounts receivable	0
Receivables from/(payables to) affiliates	0
Reverse funded advances due to securitization	0
Other assets	(29,783)
Payables and accrued liabilities	2,846
Net cash (used in)/provided by operating activities	0
Investing activities
Property and equipment additions, net of disposals	0
Cash Proceeds from assumption of reverse mortgage servicing obligations, net	0
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred	0
Repurchases of REO from Ginnie Mae	0
Proceeds from sales of REO	0
Net cash (used in) / provided by investing activities	0
Financing activities
Issuance of Senior Unsecured Notes	0
Transfers (to) / from restricted cash, net	0
Issuance of common stock, net of IPO issuance costs	246,700
Issuance of participating interest financing	0
Issuance of excess spread financing	0
Increase (decrease) in notes payable	0
Repayment of nonrecourse debt - Legacy assets	0
Repayment of excess servicing spread financing	0
Distribution to subsidiaries	(246,700)
Contributions of parent	0
Debt financing costs	0
Net cash provided by / (used in) financing activities	0
Net increase / (decrease) in cash and cash equivalents	0
Cash and cash equivalents at beginning of period	0
Cash and cash equivalents at end of period	0
Issuer
Operating activities
Net income/(loss)		5,979
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Gain/(loss) from subsidiaries		6,722
Share-based compensation		12,201
Gain on mortgage loans held for sale		(73,560)
Provision for loan losses		2,005
Loss on foreclosed real estate and other		1,436
Loss on equity method investments		971
(Gain) / loss on ineffectiveness on interest rate swaps and cap		0
Fair value changes in ABS securitizations		0
Depreciation and amortization		2,551
Change in fair value on mortgage servicing rights		30,757
Amortization of debt discount		6,667
Amortization of premiums/(discounts)		0
Mortgage loans originated and purchased, net of fees		(2,285,558)
Proceeds from Sale of Loans Held-for-sale		2,287,430
Proceeds from Collection of Mortgage Loans Held-for-sale		37,620
Changes in assets and liabilities:
Accounts receivable		(35,366)
Receivables from/(payables to) affiliates		(24,356)
Other assets		(2,037)
Payables and accrued liabilities		36,053
Net cash (used in)/provided by operating activities		9,515
Investing activities
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt		0
Property and equipment additions, net of disposals		(15,147)
Acquisition of equity method investment		(6,600)
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred		(40,305)
Proceeds from sales of REO		0
Net cash (used in) / provided by investing activities		(62,052)
Financing activities
Transfers (to) / from restricted cash, net		4,972
Increase (decrease) in notes payable		62,237
Repayment of nonrecourse debt - Legacy assets		0
Repayment of ABS nonrecourse debt		0
Distribution to parent		(3,900)
Debt financing costs		(2,734)
Tax related share-based settlement of units by members		(4,809)
Net cash provided by / (used in) financing activities		55,766
Net increase / (decrease) in cash and cash equivalents		3,229
Cash and cash equivalents at beginning of period		20,904	20,904
Cash and cash equivalents at end of period		24,133	62,201
Issuer
Operating activities
Net income/(loss)	114,591
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Gain/(loss) from subsidiaries	13,331
Share-based compensation	10,665
Gain on mortgage loans held for sale	(312,116)
Provision for loan losses	0
Loss on foreclosed real estate and other	1,008
Loss on equity method investments	1,327
(Gain) / loss on ineffectiveness on interest rate swaps and cap	1,201
Fair value changes in excess spread financing	5,050
Depreciation and amortization	6,315
Change in fair value on mortgage servicing rights	42,810
Accretion of mortgage servicing liability	(3,276)
Amortization of debt discount	16,387
Amortization of premiums/(discounts)	(125)
Mortgage loans originated and purchased, net of fees	(4,814,018)
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	4,761,946
Changes in assets and liabilities:
Accounts receivable	(546,934)
Receivables from/(payables to) affiliates	1,626,650
Reverse funded advances due to securitization	(317,272)
Other assets	(135,107)
Payables and accrued liabilities	259,694
Net cash (used in)/provided by operating activities	732,127
Investing activities
Property and equipment additions, net of disposals	(20,699)
Cash Proceeds from assumption of reverse mortgage servicing obligations, net	(31,169)
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred	(2,024,019)
Repurchases of REO from Ginnie Mae	(6,856)
Proceeds from sales of REO	4,485
Net cash (used in) / provided by investing activities	(2,078,258)
Financing activities
Issuance of Senior Unsecured Notes	781,196
Transfers (to) / from restricted cash, net	(83,674)
Issuance of common stock, net of IPO issuance costs	0
Issuance of participating interest financing	416,303
Issuance of excess spread financing	215,570
Increase (decrease) in notes payable	195,003
Repayment of nonrecourse debt - Legacy assets	0
Repayment of excess servicing spread financing	(12,981)
Distribution to subsidiaries	0
Contributions of parent	246,700
Debt financing costs	(43,690)
Net cash provided by / (used in) financing activities	1,714,427
Net increase / (decrease) in cash and cash equivalents	368,296
Cash and cash equivalents at beginning of period	62,201
Cash and cash equivalents at end of period	430,497
Guarantor (Subsidiaries)
Operating activities
Net income/(loss)	12,003	5,474
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Gain/(loss) from subsidiaries	0	0
Share-based compensation	0	0
Gain on mortgage loans held for sale	0	0
Provision for loan losses	0	0
Loss on foreclosed real estate and other	0	0
Loss on equity method investments	0
(Gain) / loss on ineffectiveness on interest rate swaps and cap	0	0
Fair value changes in ABS securitizations		0
Fair value changes in excess spread financing	0
Depreciation and amortization	43	0
Change in fair value on mortgage servicing rights	0	0
Accretion of mortgage servicing liability	0
Amortization of debt discount	0	0
Amortization of premiums/(discounts)	0	0
Mortgage loans originated and purchased, net of fees	0	0
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	0
Proceeds from Sale of Loans Held-for-sale		0
Proceeds from Collection of Mortgage Loans Held-for-sale		0
Changes in assets and liabilities:
Accounts receivable	7	(5)
Receivables from/(payables to) affiliates	(11,979)	(5,031)
Reverse funded advances due to securitization	0
Other assets	0	0
Payables and accrued liabilities	0	0
Net cash (used in)/provided by operating activities	74	438
Investing activities
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt		0
Property and equipment additions, net of disposals	0	0
Cash Proceeds from assumption of reverse mortgage servicing obligations, net	0
Acquisition of equity method investment		0
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred	0	0
Repurchases of REO from Ginnie Mae	0
Proceeds from sales of REO	0	0
Net cash (used in) / provided by investing activities	0	0
Financing activities
Issuance of Senior Unsecured Notes	0
Transfers (to) / from restricted cash, net	0	(3)
Issuance of common stock, net of IPO issuance costs	0
Issuance of participating interest financing	0
Issuance of excess spread financing	0
Increase (decrease) in notes payable	0	0
Repayment of nonrecourse debt - Legacy assets	0	0
Repayment of ABS nonrecourse debt		0
Repayment of excess servicing spread financing	0
Distribution to subsidiaries	0
Contributions of parent	0
Distribution to parent		0
Debt financing costs	0	0
Tax related share-based settlement of units by members		0
Net cash provided by / (used in) financing activities	0	(3)
Net increase / (decrease) in cash and cash equivalents	74	435
Cash and cash equivalents at beginning of period	244	319	319
Cash and cash equivalents at end of period	318	754
Non-Guarantor (Subsidiaries)
Operating activities
Net income/(loss)	(25,334)	(12,196)
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Gain/(loss) from subsidiaries	0	0
Share-based compensation	0	0
Gain on mortgage loans held for sale	0	0
Provision for loan losses	3,153	0
Loss on foreclosed real estate and other	697	5,468
Loss on equity method investments	0
(Gain) / loss on ineffectiveness on interest rate swaps and cap	501	(2,032)
Fair value changes in ABS securitizations		6,935
Fair value changes in excess spread financing	0
Depreciation and amortization	0	0
Change in fair value on mortgage servicing rights	0	0
Accretion of mortgage servicing liability	0
Amortization of debt discount	1,714	3,657
Amortization of premiums/(discounts)	(3,877)	(4,001)
Mortgage loans originated and purchased, net of fees	0	0
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	7,371
Proceeds from Sale of Loans Held-for-sale		0
Proceeds from Collection of Mortgage Loans Held-for-sale		9,757
Changes in assets and liabilities:
Accounts receivable	278,533	316
Receivables from/(payables to) affiliates	(1,614,018)	32,298
Reverse funded advances due to securitization	0
Other assets	0	0
Payables and accrued liabilities	(832)	(213)
Net cash (used in)/provided by operating activities	(1,352,092)	39,989
Investing activities
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt		29,395
Property and equipment additions, net of disposals	0	0
Cash Proceeds from assumption of reverse mortgage servicing obligations, net	0
Acquisition of equity method investment		0
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred	0	0
Repurchases of REO from Ginnie Mae	0
Proceeds from sales of REO	3,949	22,897
Net cash (used in) / provided by investing activities	3,949	52,292
Financing activities
Issuance of Senior Unsecured Notes	0
Transfers (to) / from restricted cash, net	(103,685)	13,343
Issuance of common stock, net of IPO issuance costs	0
Issuance of participating interest financing	0
Issuance of excess spread financing	0
Increase (decrease) in notes payable	1,464,134	(33,212)
Repayment of nonrecourse debt - Legacy assets	(12,306)	(26,119)
Repayment of ABS nonrecourse debt		(47,175)
Repayment of excess servicing spread financing	0
Distribution to subsidiaries	0
Contributions of parent	0
Distribution to parent		0
Debt financing costs	0	0
Tax related share-based settlement of units by members		0
Net cash provided by / (used in) financing activities	1,348,143	(93,163)
Net increase / (decrease) in cash and cash equivalents	0	(882)
Cash and cash equivalents at beginning of period	0	0	0
Cash and cash equivalents at end of period	0	(882)
Eliminations
Operating activities
Net income/(loss)	(101,260)	6,738
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Gain/(loss) from subsidiaries	101,260	(6,722)
Share-based compensation	0	0
Gain on mortgage loans held for sale	0	0
Provision for loan losses	0	0
Loss on foreclosed real estate and other	0	0
Loss on equity method investments	0
(Gain) / loss on ineffectiveness on interest rate swaps and cap	0	0
Fair value changes in ABS securitizations		(16)
Fair value changes in excess spread financing	0
Depreciation and amortization	0	0
Change in fair value on mortgage servicing rights	0	0
Accretion of mortgage servicing liability	0
Amortization of debt discount	0	0
Amortization of premiums/(discounts)	0	0
Mortgage loans originated and purchased, net of fees	0	0
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	0
Proceeds from Sale of Loans Held-for-sale		0
Proceeds from Collection of Mortgage Loans Held-for-sale		0
Changes in assets and liabilities:
Accounts receivable	0	0
Receivables from/(payables to) affiliates	0	0
Reverse funded advances due to securitization	0
Other assets	29,783	0
Payables and accrued liabilities	(29,783)	0
Net cash (used in)/provided by operating activities	0	0
Investing activities
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt		0
Property and equipment additions, net of disposals	0	0
Cash Proceeds from assumption of reverse mortgage servicing obligations, net	0
Acquisition of equity method investment		0
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred	0	0
Repurchases of REO from Ginnie Mae	0
Proceeds from sales of REO	0	0
Net cash (used in) / provided by investing activities	0	0
Financing activities
Issuance of Senior Unsecured Notes	0
Transfers (to) / from restricted cash, net	0	0
Issuance of common stock, net of IPO issuance costs	0
Issuance of participating interest financing	0
Issuance of excess spread financing	0
Increase (decrease) in notes payable	0	0
Repayment of nonrecourse debt - Legacy assets	0	0
Repayment of ABS nonrecourse debt		0
Repayment of excess servicing spread financing	0
Distribution to subsidiaries	246,700
Contributions of parent	(246,700)
Distribution to parent		0
Debt financing costs	0	0
Tax related share-based settlement of units by members		0
Net cash provided by / (used in) financing activities	0	0
Net increase / (decrease) in cash and cash equivalents	0	0
Cash and cash equivalents at beginning of period	0	0	0
Cash and cash equivalents at end of period	$ 0	$ 0

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Mortgage Servicing Rights - Fair Value Assumptions (Details)	6 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2011	Sep. 30, 2012	Dec. 31, 2011
Assumption for Fair Value of Mortgage Servicing Rights
Classes of MSRs serviced for others		2
Mortgage Servicing Rights | Credit Sensitive
Assumption for Fair Value of Mortgage Servicing Rights
Discount rate		17.12%	25.71%
Total prepayment speeds		20.74%	15.80%
Expected weighted-average life	5 years 1 month 24 days	4 years 9 months 15 days
Credit losses		21.35%	35.42%
Mortgage Servicing Rights | Interest Rate Sensitive
Assumption for Fair Value of Mortgage Servicing Rights
Discount rate		10.62%	10.46%
Total prepayment speeds		18.63%	19.02%
Expected weighted-average life	5 years 15 days	4 years 10 months 28 days
Credit losses		9.59%	9.73%

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Other Assets (Tables)

9 Months Ended

Sep. 30, 2012

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

Other assets consisted of the following (in thousands):

	September 30, 2012		December 31, 2011
Interest rate locks (see Note 10)	$	112,628	$	11,302
Deposit in escrow for ResCap acquisition	72,000		—
Loans subject to repurchase right from Ginnie Mae	58,534		35,735
Deferred financing costs	43,501		12,059
Margin call deposits	29,784		4,518
Equity method investment	8,994		6,493
Prepaid expenses	6,445		4,286
Unsecured loans	1,803		1,827
Deposits pending on mortgage servicing rights acquisitions	1,798		28,904
Other	2,872		1,057
Total other assets	$	338,359	$	106,181

Summarized Financial Information of Equity Investment

A summary of the assets, liabilities, and operations of ANC as of the following periods are presented in the following tables (in thousands):

							September 30, 2012			December 31, 2011
ASSETS
Cash							$	3,259		$	2,486
Accounts receivable							3,837			5,296
Receivables from affiliates							388			92
Equity method investments							1,482			2,788
Property and equipment, net							2,092			1,995
Goodwill and other intangible assets							33,548			33,876
Other assets							820			590
Total assets							$	45,426		$	47,123
LIABILITIES
Notes payable							$	4,724		$	4,724
Payables and accrued liabilities							16,049			13,236
Total liabilities							$	20,773		$	17,960
	Three months ended September 30,						Nine months ended September 30,			From Acquisition through September 30,
	2012			2011			2012			2011
REVENUES
Sales	$	12,917		$	13,181		$	41,296		$	25,382
Cost of sales	(10,447		)	(10,871		)	(31,878		)	(21,593		)
Net sales revenues	2,470			2,310			9,418			3,789
OTHER (EXPENSE)/INCOME
Operating costs	(4,841		)	(5,054		)	(13,903		)	(9,004		)
Income from equity method investments	675			771			1,930			1,176
Depreciation and amortization	(377		)	(180		)	(1,138		)	(359		)
Other (expense)/income	(42		)	136			(111		)	39
Gain/(loss) from discontinued operations	21			(27		)	(14		)	(54		)
Total expense	(4,564		)	(4,354		)	(13,236		)	(8,202		)
Net loss	$	(2,094	)	$	(2,044	)	$	(3,818	)	$	(4,413	)

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Other Assets - Mortgage Servicing Rights (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended			1 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 Reverse Mortgages	Sep. 30, 2012 Mortgage Servicing Rights	Dec. 31, 2011 Mortgage Servicing Rights	Dec. 31, 2011 Mortgage Servicing Rights Reverse Mortgages	Sep. 30, 2012 Mortgage Servicing Rights Forward Mortgages	Dec. 31, 2011 Mortgage Servicing Rights Forward Mortgages	Sep. 30, 2012 GNMA	Dec. 31, 2011 GNMA	Sep. 30, 2012 Pending Acquisition	Sep. 30, 2012 Pending Acquisition Mortgage Servicing Rights
Mortgaging Servicing Rights
Deposit for acquisition	$ 1,798		$ 28,904				$ 17,900	$ 1,798	$ 2,000				$ 72,000
Loans subject to repurchase right from Ginnie Mae	58,534		35,735							58,534	35,735
Deposit from MSR co-investor for ResCap												25,200
Principal amount outstanding on loans managed and securitized					120,852,838	44,253,454	9,500,000
Payments to Acquire Mortgage Servicing Rights (MSR)	$ 2,024,019	$ 40,305		$ 9,000

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Earnings Per Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Net income per share is computed under the provisions of ASC 260, Earnings Per Share. Basic net income per share is computed based on the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed based on the weighted-average number of common shares plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares represent outstanding restricted stock.

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Payables and Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2012

Payables and Accruals [Abstract]

Schedule of Payables and Accrued Liabilities

Payables and accrued liabilities consist of the following (in thousands):

	September 30, 2012		December 31, 2011
MSR purchases payable including advances	$	310,609	$	8,204
Mortgage insurance premiums and reserves	70,344		19,162
Loans subject to repurchase from Ginnie Mae	58,534		35,735
Payables to securitization trusts	37,607		10,665
Reverse mortgage payables	46,000		—
Accrued bonus and payroll	43,511		21,236
Accrued interest	39,902		10,225
Government sponsored entities	26,797		18,728
Deposit from MSR co-investor for ResCap	25,200		—
Taxes	14,544		154
Repurchase reserves	15,055		10,026
Legal and professional fees	12,076		5,931
Cancelled lease reserves	7,319		9,160
Servicing Payables	6,628		—
Other	48,142		34,563
Total payables and accrued liabilities	$	762,268	$	183,789

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Subsequent Events (Details) (Unsecured Senior Notes, USD $)		1 Months Ended
	Sep. 30, 2012	Apr. 30, 2012 Unsecured Senior Notes 9.625% Due May 2019 April 2012 Issuance Period
Subsequent Event [Line Items]
Principal amount	$ 1,060,000,000	$ 275,000,000
Interest rate		9.625%
Net cash proceeds		$ 269,500,000

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Litigation and Regulatory Matters

In the ordinary course of business, Nationstar Inc. and its subsidiaries and current and former officers and employees are routinely named as defendants in various legal actions, including class actions and other litigation, arising in connection with activities related to a national mortgage servicer and lender. Certain of the actual or threatened legal actions include claims for substantial compensatory, punitive and/or, statutory damages or claims for an indeterminate amount of damages. Further, in the ordinary course of business the Company and certain related parties can be or are involved in governmental and regulatory examinations, information gathering requests, investigations and proceedings (both formal and informal), regarding the Company’s business, certain of which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief.

The Company seeks to resolve all litigation and regulatory matters in the manner management believes is in the best interest of the Company and contests liability, allegations of wrongdoing and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with outstanding legal and regulatory proceedings utilizing the latest information available. Where available information indicates that it is probable a liability has been incurred and the Company can reasonably estimate the amount of that loss an accrued liability is established. The actual costs of resolving these proceedings may be substantially higher or lower than the amounts accrued.

A 50 state task force of attorneys general as well as certain federal agencies are investigating issues related to the conduct of certain mortgage servicing companies and related service providers, in connection with mortgage foreclosures. While the Company is not involved in the investigation or negotiations regarding a settlement, the ultimate outcome could have a material impact on other mortgage servicers, including the Company.

When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. If, at the time of evaluation, the loss contingency is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable. Once the matter is deemed to be both probable and estimable, the Company will establish an accrued liability and record a corresponding amount to litigation related expense. The Company will continue to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Litigation related expense, which includes the fees paid to external legal providers, of $3.5 million and $9.7 million were included in general and administrative expense on the consolidated statements of operations for the three and nine months endedSeptember 30, 2012, respectively, and $6.3 million and $7.8 million for the three and nine months ended September 30, 2011, respectively.

Based on current knowledge, and after consultation with counsel, management believes that the current legal accrued liability is appropriate, and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the consolidated financial condition of the Company, although the outcome of such proceedings could be material to the Company’s operating results and cash flows for a particular period depending on among other things, the level of the Company’s revenues or income for such period. However, in the event of significant developments on existing cases, it is possible that the ultimate resolution, if unfavorable, may be material to the Company’s consolidated financial statements.

Loan and Other Commitments

Nationstar enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. These IRLCs are treated as derivatives and are carried at fair value (See Note 10, Derivative Financial Instruments).

In 2012, Nationstar completed its acquisitions of certain MSRs related to approximately $27.2 billion of unpaid principal balance in reverse mortgage loans from financial services companies. As servicer for these reverse mortgage loans, among other things, the Company is obligated to make advances to the loan customers as required. At September 30, 2012, the Company’s maximum unfunded advance obligation related to these MSRs was approximately $4.3 billion. Upon funding any portion of these advances, the Company expects to securitize and sell the advances in transactions that will be accounted for as financing arrangements.

Other Contingencies

In June 2011, Nationstar entered into an agreement to subservice loans for a financial services company. Nationstar began to subservice these loans in July and August 2011. This subservicing agreement included, among other things, a loss incentive and sharing arrangement. Under this arrangement, Nationstar can earn incentive fees of up to $2.5 million for successfully mitigating losses within a specific subserviced population of loans. This incentive fee would be recognized when earned. For this same population of loans, Nationstar is subject to loss sharing under certain conditions. Should losses in this population of loans exceed a specified level, Nationstar would be required to share a portion of the losses on such loans up to a maximum of $10.0 million. Losses under this arrangement would be recognized at the point at which Nationstar determines that a liability is expected to be incurred. At September 30, 2012, Nationstar has estimated no liability under this agreement.

During December 2009, Nationstar entered into a strategic relationship with a major mortgage market participant, which

contemplates, among other things, significant mortgage servicing rights and subservicing transfers to Nationstar upon terms to be determined. Under this arrangement, if certain delivery thresholds have been met, the market participant may require Nationstar to establish an operating division or newly created subsidiary with separate, dedicated employees within a specified timeline to service such mortgage servicing rights and subservicing. After a specified time period, this market participant may purchase the subsidiary at an agreed upon price. Since December 2010, all of the required delivery thresholds with this market participant have been met, but the market participant has not required the Company to establish an operating division or newly created subsidiary with separate, dedicated employees.

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Derivative Financial Instruments - Derivative Instruments (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		12 Months Ended
	Sep. 30, 2012		Dec. 31, 2011
Forward Contracts | Loans Held-for-sale, Mortgages [Member]
Derivatives, Fair Value [Line Items]
Fair Value - Asset	$ 212		$ 634
Recorded Gains / (Losses)	(422)		592
Forward Contracts | Derivative Financial Instruments
Derivatives, Fair Value [Line Items]
Fair Value - Liability	29,162		5,830
Recorded Gains / (Losses)	(23,332)		(9,792)
Forward Contracts | Designated as Hedging Instrument | Loans Held-for-sale, Mortgages [Member]
Derivatives, Fair Value [Line Items]
Outstanding Notional - Asset	4,175		28,047
Forward Contracts | Designated as Hedging Instrument | Derivative Financial Instruments
Derivatives, Fair Value [Line Items]
Outstanding Notional - Liability	2,838,185		691,725
Interest Rate Lock Commitments | Other Assets
Derivatives, Fair Value [Line Items]
Fair Value - Asset	112,628		11,302
Recorded Gains / (Losses)	101,326		6,598
Interest Rate Lock Commitments | Designated as Hedging Instrument | Other Assets
Derivatives, Fair Value [Line Items]
Outstanding Notional - Asset	4,353,327		736,377
Interest Rate Swaps and Caps | Derivative Financial Instruments
Derivatives, Fair Value [Line Items]
Fair Value - Liability	7,041		6,540
Recorded Gains / (Losses)	(501)		1,261
Interest Rate Swaps and Caps | Designated as Hedging Instrument | Derivative Financial Instruments
Derivatives, Fair Value [Line Items]
Outstanding Notional - Liability	648,940		193,500
Asset Backed Securities | Interest Rate Swap | Derivative Financial Instruments
Derivatives, Fair Value [Line Items]
Fair Value - Liability	1,632	[1]	0	[2]
Recorded Gains / (Losses)	(1,201)	[1]	(8,058)	[2]
Asset Backed Securities | Interest Rate Swap | Designated as Hedging Instrument | Derivative Financial Instruments
Derivatives, Fair Value [Line Items]
Outstanding Notional - Liability	$ 894,363	[1]	$ 0	[2]

[1] In March 2012, Nationstar received interest rate swaps from FIF as a part of the reorganization.

[2] In December 2011, Nationstar sold its remaining variable interest in a securitization trust that had been a consolidated VIE since January 1, 2010 and deconsolidated the VIE. Upon deconsolidation of this VIE, Nationstar derecognized the related ABS nonrecourse debt and therefore the underlying interest rate swap, subject to ABS nonrecourse debt.

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Nature of Business, Basis of Presentation and Material Transaction

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business, Basis of Presentation and Material Transaction

Nature of Business, Basis of Presentation and Material Transaction

Nature of Business

Nationstar Mortgage Holdings Inc. (Nationstar Inc. or the Company) is a Delaware corporation, formed in conjunction with and for the purpose of effecting an initial public offering by allowing common shareholders to own equity in a corporation instead of in a limited liability company.

Nationstar Inc. is a holding company that conducts no operating activities and owns no significant assets other than through its interests in its subsidiaries. Through its subsidiaries, Nationstar Inc. is engaged primarily in the servicing of residential mortgage loans for others and the origination and selling or securitization of single-family conforming mortgage loans to government-sponsored entities (GSE) or other third-party investors in the secondary market. Nationstar Mortgage LLC (Nationstar), the Company's principal operating subsidiary, is one of the largest high touch non-bank servicers in the United States.

Basis of Presentation

In conjunction with the initial public offering of Nationstar Inc., Nationstar became a wholly-owned indirect subsidiary of Nationstar Inc. Prior to the reorganization and initial public offering (Reorganization), Nationstar was a wholly-owned subsidiary of FIF HE Holdings LLC (FIF). Nationstar Inc. was formed solely for the purpose of reorganizing the structure of FIF and Nationstar so that the common stock issuer was a corporation rather than a limited liability company. As such, investors own common stock rather than equity interests in a limited liability company. Upon completion of the initial public offering and Reorganization, all of the equity interests in Nationstar were transferred from FIF to two direct wholly-owned subsidiaries of Nationstar Inc. In conjunction with the Reorganization, FIF contributed certain assets to Nationstar. The Reorganization has been accounted for as a reorganization under common control and, accordingly, there was no change in the basis of the assets and liabilities. As part of the Reorganization, FIF exchanged its equity in Nationstar for 70,000,000 shares of common stock in Nationstar Inc.

The consolidated financial statements include the accounts of Nationstar Inc. and its wholly-owned subsidiaries and those variable interest entities (VIEs) where Nationstar Inc.'s wholly-owned subsidiaries are the primary beneficiaries. Nationstar Inc. applies the equity method of accounting to investments when the entity is not a VIE and Nationstar Inc. is able to exercise significant influence, but not control, over the policies and procedures of the entity but owns less than 50% of the voting interests. Intercompany balances and transactions have been eliminated. Results of operations, assets and liabilities of VIEs are included from the date that Nationstar Inc. became the primary beneficiary through the date Nationstar Inc. ceases to be the primary beneficiary.

The interim consolidated financial statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results of the interim periods have been included. The consolidated interim financial statements of Nationstar Inc. have been prepared in accordance with generally accepted accounting principles for interim information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission (SEC). Accordingly, the financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States (GAAP) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in Nationstar Mortgage LLC's Annual Report on Form 10-K filed on March 15, 2012. The results of operations for the nine month period ended September 30, 2012, are not necessarily indicative of the results that may be expected for the year ended December 31, 2012. Certain prior period amounts have been reclassified to conform to the current period presentation. Nationstar Inc. evaluated subsequent events through the date these interim consolidated financial statements were issued.

Material Second Quarter Transaction

On March 6, 2012, Nationstar entered into an asset purchase agreement with Aurora Bank FSB and Aurora Loan Services LLC, (collectively Aurora). Nationstar and Aurora closed the asset purchase in June 2012. Nationstar paid Aurora approximately $2.0 billion that included mortgage servicing rights of approximately $271.5 million and servicing advance receivables of approximately $1.7 billion. As a part of the purchase, certain other assets and liabilities were also acquired. The mortgage servicing rights relate to approximately 300,000 residential mortgage loans with an unpaid principal balance of over $63 billion. As of the closing date, Nationstar entered into certain financing arrangements amounting to approximately $1.3 billion for the servicing advance receivables and $176.5 million for excess spread financing related to the mortgage servicing rights. The remainder of the purchase price was funded with Nationstar cash.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Allowance for loan losses of mortgage loans held for investment, subject to nonrecourse debt	$ 7,645	$ 5,824
Accumulated depreciation of property and equipment	$ 45,544	$ 39,201
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	300,000	300,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000	1,000,000
Common Stock, Shares issued	90,412	89,167
Common Stock, Shares outstanding	90,412	89,167

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Indebtedness

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Indebtedness

Indebtedness

Notes Payable

A summary of the balances of notes payable for the dates indicated is presented below (in thousands).

	September 30, 2012				December 31, 2011
	Outstanding		Collateral Pledged		Outstanding		Collateral Pledged
Servicing Segment Notes Payable
MBS advance financing facility	$	178,455	$	197,934	$	179,904	$	182,096
Securities repurchase facility (2011)	11,774		55,603		11,774		55,603
2010-ABS advance financing facility	189,038		228,898		219,563		249,499
2011-1 Agency advance financing facility	159,945		181,803		25,011		28,811
MSR note	6,015		13,296		10,180		16,230
2012-AW Agency advance financing facility	100,000		124,551		—		—
2012-C ABS advance financing facility	562,366		692,635		—		—
2012-R ABS advance financing facility	328,793		392,360		—		—
2012-W ABS advance financing facility	367,797		454,402		—		—
Reverse participations financing facility	18,801		21,298		—		—
Originations Segment Notes Payable
$375 million warehouse facility	195,703		211,820		46,810		51,040
$150 million warehouse facility	155,323		162,705		251,722		265,083
$250 million warehouse facility (2011)	141,204		147,941		7,310		7,672
$100 million warehouse facility (2009)	87,659		91,311		16,047		16,715
ASAP+ facility	29,443		28,800		104,858		104,006
Total notes payable	$	2,532,316	$	3,005,357	$	873,179	$	976,755

Servicing Segment Notes Payable

MBS advance financing facility - Nationstar has a one-year committed facility agreement with a GSE, under which Nationstar may transfer to the GSE certain servicing advance receivables against the transfer of funds by the GSE. This facility has the capacity to purchase up to $325 million in eligible servicing advance receivables. The interest rate is based on LIBOR plus a spread of 2.50%. The maturity date of this facility is currently December 2012.

Securities repurchase facility (2011) - In December 2011, Nationstar entered into a securities repurchase facility with a financial services company that was amended in February 2012 to extend the expiration to February 22, 2013. The MRA states that Nationstar may from time to time transfer to the financial services company eligible securities against the transfer of funds by the financial services company, with a simultaneous agreement by the financial services company to transfer such securities to Nationstar at a certain date, or on demand by Nationstar, against the transfer of funds from Nationstar. Additionally, the financial services company may elect to extend the transfer date for an additional 90 days at mutually agreed upon terms. The interest rate is based on LIBOR plus a margin of 3.50%. As of September 30, 2012, Nationstar has pledged the Company’s $55.6 million outstanding retained interest in the outstanding Nonrecourse debt—Legacy Assets securitization which was structured as a financing.

2010-ABS advance financing facility - In December 2010, Nationstar executed the 2010-ABS Advance Financing Facility with a financial institution. This facility has the capacity to purchase up to $300 million of advance receivables. The interest rate is based on LIBOR plus a spread of 3.00%. This facility matures in May 2014. This debt is nonrecourse to Nationstar.

2011-1 Agency advance financing facility - In October 2011, Nationstar executed the 2011-1 Agency Advance Financing Facility with a financial institution. This facility has the capacity to borrow up to $300 million and the interest rate is based on LIBOR plus a spread ranging from 2.5% to 6.50% depending upon class of the note. In October 2012, Nationstar amended the agreement to increase the borrowing capacity to $600 million. The maturity date of this facility is October 2013. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

MSR note - In connection with the October 2009 MSR acquisition, Nationstar executed a four-year note agreement with a GSE. As collateral for this note, Nationstar has pledged Nationstar’s rights, title, and interest in the acquired servicing portfolio. The interest rate is based on LIBOR plus 2.50%. The maturity date of this facility is October 2013.

2012-AW Agency advance financing facility - In June 2012, Nationstar executed the 2012-AW Agency Advance Financing Facility with a financial institution. This facility has the capacity to borrow up to $100 million and the interest rate is based on LIBOR plus a spread of 2.50%. The maturity date of this facility is June 2013. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

2012-C ABS advance financing facility - In June 2012, Nationstar executed the 2012-C ABS Advance Financing Facility with a financial institution. This facility has the capacity to borrow up to $600 million and the interest rate is based on LIBOR plus a spread ranging from 3.50% to 4.50%. The maturity date of this facility is June 2014. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

2012-R ABS advance financing facility - In June 2012, Nationstar executed the 2012-R ABS Advance Financing Facility with a financial institution. This facility has the capacity to borrow up to $350 million and the interest rate is based on LIBOR plus a spread ranging from 3.37% to 8.00%. The maturity date of this facility is June 2014. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

2012-W ABS advance financing facility - In June 2012, Nationstar executed the 2012-W ABS Advance Financing Facility with a financial institution. This facility has the capacity to borrow up to $450 million and the interest rate is based on LIBOR plus a spread of 3.75%. The maturity date of this facility is June 2013. This facility is secured by servicing advance receivables and is nonrecourse to Nationstar.

Reverse participations and max claim buyouts financing facility - In June 2012, Nationstar executed a reverse participations and max claim buyouts financing facility with a financial institution. This facility has capacity to borrow up to $150 million and the interest rate is based on LIBOR plus a spread of 4.00%. The maturity date of this facility is June 2014. This facility is partially secured by reverse mortgage loans.

Originations Segment Notes Payable

$375M warehouse facility - In February 2010, Nationstar executed a Master Repurchase Agreement (MRA) with a financial institution, which will expire in January 2013. The MRA states that from time to time Nationstar may enter into transactions, for an aggregate amount of $375 million, in which Nationstar agrees to transfer to the same financial institution certain mortgage loans against the transfer of funds by the same financial institution, with a simultaneous agreement by the same financial institution to transfer such mortgage loans to Nationstar at a date certain, or on demand by Nationstar, against the transfer of funds from Nationstar. In June 2012, Nationstar amended the agreement to increase the borrowing capacity from $175 million to $375 million. The interest rate is based on LIBOR plus a spread ranging from 1.75% to 2.50%.

$150M warehouse facility - Nationstar has an MRA with a financial services company, which was amended in February 2012 to expire in August 2013 and reduce the committed amount from $300 million to $150 million. The MRA states that from time to time Nationstar may enter into transactions in which Nationstar agrees to transfer to the financial services company certain mortgage loans or MBS against the transfer of funds by the financial services company, with a simultaneous agreement by the financial services company to transfer such mortgage loans or MBS to Nationstar at a certain date, or on demand by Nationstar, against the transfer of funds from Nationstar. The interest rate is based on LIBOR plus a margin of 3.25%.

$250M warehouse facility (2011) - In March 2011, as amended, Nationstar executed an MRA with a financial institution, under which Nationstar may enter into transactions, for an aggregate amount of $250 million in which Nationstar agrees to transfer to the same financial institution certain mortgage loans and certain securities against the transfer of funds by the same financial institution, with a simultaneous agreement by the same financial institution to transfer such mortgage loans and securities to Nationstar at a date certain, or on demand by Nationstar, against the transfer of funds from Nationstar. The maturity is August 2013 with the interest rate based on LIBOR plus a spread of 2.25% to 3.00%, which varies based on the underlying transferred collateral.

$100M warehouse facility (2009) - In October 2009, Nationstar executed a MRA with a financial institution. This MRA states that from time to time Nationstar may enter into transactions, for an aggregate amount of $100 million, in which Nationstar agrees to transfer to the financial institution certain mortgage loans against the transfer of funds by the financial institution, with a simultaneous agreement by the financial institution to transfer such mortgage loans to Nationstar at a certain date, or on demand by Nationstar, against the transfer of funds from Nationstar. The interest rate is based on LIBOR plus a spread of 3.25%. The maturity date of this MRA with the financial institution is January 2013.

ASAP + facility - During 2009, Nationstar began executing As Soon As Pooled Plus agreements with a GSE, under which Nationstar transfers to the GSE eligible mortgage loans that are to be pooled into the GSE MBS against the transfer of funds by the GSE. The interest rate is based on LIBOR plus a spread of 1.50%. These agreements typically have a maturity of up to 45 days.

Unsecured Senior Notes

A summary of the balances of unsecured senior notes is presented below (in thousands):

	September 30, 2012		December 31, 2011
$285 million face value, 10.875% interest rate payable semi-annually, due April 2015	$	281,307	$	280,199
$375 million face value, 9.625% interest rate payable semi-annually, due May 2019	380,366		—
$400 million face value, 7.875% interest rate payable semi-annually, due October 2020	$	400,750	$	—
Total	$	1,062,423	$	280,199

In March 2010, Nationstar completed the offering of $250.0 million of unsecured senior notes, which were issued with an issue discount of $7.0 million for net cash proceeds of $243.0 million, with a maturity date of April 2015. In December 2011, Nationstar completed an additional offering of $35.0 million of unsecured senior notes under the same indenture. The additional offering was issued with an issue discount of $0.3 million for net cash proceeds of $34.7 million. These unsecured senior notes pay interest semi-annually at an interest rate of 10.875%. These unsecured notes were issued in a private placement and were subsequently exchanged for an equal principal amount of notes registered under the Securities Act of 1933 with substantially identical terms.

In April 2012 and in July 2012, Nationstar completed an offering of $275.0 million and $100.0 million, respectively, in senior unsecured notes, the proceeds of these offerings were $269.5 million and $103.3 million respectively, with a maturity of May 2019. These unsecured senior notes pay interest semi-annually at an interest rate of 9.625%. These unsecured notes were issued in a private placement and have not been registered under the Securities Act of 1933.

In September 2012, Nationstar completed two offerings of $300.0 million and $100.0 million of senior unsecured notes, the proceeds of these offerings were $295.5 million and $99.3 million, respectively, with a maturity of October 2020. These unsecured senior notes pay interest semi-annually at an interest rate of 7.875%. These unsecured notes were issued in a private placement and have not been registered under the Securities Act of 1933.

The indentures for the unsecured senior notes contain various covenants and restrictions that limit the Company's, Nationstar's, or certain of its subsidiaries’, ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all of their assets, or enter into certain transactions with affiliates.

The expected maturities of Nationstar's senior unsecured notes based on contractual maturities are as follows (in thousands).

Year	Amount
2013	$	—
2014	—
2015	285,000
2016	—
2017	—
Thereafter	775,000
Total	$	1,060,000

Legacy Asset and Other Financing

Nonrecourse Debt–Legacy Assets

In November 2009, Nationstar completed the securitization of approximately $222 million of ABS, which was structured as a secured borrowing. This structure resulted in Nationstar carrying the securitized loans as mortgages on Nationstar’s consolidated balance sheet and recognizing the asset-backed certificates acquired by third parties as nonrecourse debt, totaling approximately $101.9 million and $112.5 million at September 30, 2012, and December 31, 2011, respectively. The principal and interest on these notes are paid using the cash flows from the underlying mortgage loans, which serve as collateral for the debt. The interest rate paid on the outstanding securities is 7.50%, which is subject to an available funds cap. The total outstanding principal balance on the underlying mortgage loans serving as collateral for the debt was approximately $344.2 million and $373.1 million at September 30, 2012 and December 31, 2011, respectively. Accordingly, the timing of the principal payments on this nonrecourse debt is dependent on the payments received on the underlying mortgage loans. The unpaid principal balance on the outstanding notes was $118.6 million and $130.8 million at September 30, 2012 and December 31, 2011, respectively.

Excess Spread Financing Debt at Fair Value

In conjunction with Nationstar's acquisition of certain mortgage servicing rights on various pools of residential mortgage loans (the Portfolios), Nationstar has entered into sale and assignment agreements which are treated as financings with an indirect wholly-owned subsidiary of Newcastle. Nationstar is an affiliate of Newcastle’s manager. Nationstar, in transactions accounted for as financing arrangements, sold to Newcastle the right to receive 65% of the excess cash flow generated from the Portfolios after receipt of a fixed basic servicing fee per loan.

Nationstar retains all ancillary income associated with servicing the Portfolios and 35% of the excess cash flow after receipt of the fixed basic servicing fee. Nationstar continues to be the servicer of the Portfolios and provides all servicing and advancing functions. Newcastle has no prior or ongoing obligations associated with the Portfolios.

Contemporaneous with the above, Nationstar entered into refinanced loan agreements with Newcastle. Should Nationstar refinance any loan in the Portfolios, subject to certain limitations, Nationstar will be required to transfer the new loan or a replacement loan of similar economic characteristics into the Portfolios. The new or replacement loan will be governed by the same terms set forth in the sale and assignment agreement described above.

The total carrying amount of the outstanding excess spread financing agreements was $255.5 million and $44.6 million at September 30, 2012 and December 31, 2011, respectively.

Participating Interest Financing

Participating interest financing represent the issuance of pools of Home Equity Conversion Mortgage Backed Securities (HMBS) to third-party security holders which are guaranteed by certain GSEs. Nationstar has accounted for the transfer of these advances in the related Home Equity Conversion Mortgages (HECM) loans as secured borrowings, retaining the initial Reverse mortgage interests on its balance sheet, and recording the pooled HMBS as participating interest financing liabilities on the Company’s balance sheet. Monthly cash flows generated from the HECM loans are used to service the HMBS. The interest rate is based on the underlying HMBS rate with a range of 0.53% to 7.17%. The participating interest financing was $415.4 million at September 30, 2012. There was none outstanding at December 31, 2011.

Financial Covenants

As of September 30, 2012, Nationstar was in compliance with its covenants on its borrowing arrangements and credit facilities. These covenants generally relate to Nationstar’s tangible net worth, liquidity reserves, and leverage requirements.

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Guarantor Financial Statement Information - Consolidating Statements of Operations and Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Revenues:
Servicing fee income	$ 135,504	$ 53,031	$ 305,546	$ 160,755
Other fee income	2,396	7,660	21,259	23,999
Total fee income	137,900	60,691	326,805	184,754
Gain on mortgage loans held for sale	139,259	30,232	312,116	73,560
Total revenues	277,159	90,923	638,921	258,314
Expenses and impairments:
Salaries, wages and benefits	98,107	50,904	238,519	146,199
General and administrative	51,585	25,397	127,107	56,707
Provision for loan losses	1,545	877	3,153	2,005
Loss on foreclosed real estate and other	(2,050)	2,558	1,705	6,904
Occupancy	5,641	3,458	11,293	7,902
Total expenses and impairments	154,828	83,194	381,777	219,717
Other income (expense):
Interest income	23,542	16,201	52,633	51,246
Interest expense	(65,015)	(26,376)	(125,908)	(76,929)
Gain / (Loss) on interest rate swaps and caps	(1,077)	0	(1,702)	0
Fair value changes in ABS securitizations	0	(654)	0	(6,919)
Gain / (loss) from subsidiaries	0	0	0	0
Total other income (expense)	(42,550)	(10,829)	(74,977)	(32,602)
Income before taxes	79,781	(3,100)	182,167	5,995
Income tax expense	(24,714)	0	(40,639)	0
Net income	55,067	(3,100)	141,528	5,995	20,887
Other comprehensive income, net of tax:
Change in value of designated cash flow hedge	0	0	(423)	(1,071)	(1,071)
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax	423	0	423	0
Comprehensive income	55,490	(3,100)	141,528	4,924
Parent Company
Revenues:
Servicing fee income	0		0
Other fee income	0		0
Total fee income	0		0
Gain on mortgage loans held for sale	0		0
Total revenues	0		0
Expenses and impairments:
Salaries, wages and benefits	0		0
General and administrative	0		0
Provision for loan losses	0		0
Loss on foreclosed real estate and other	0		0
Occupancy	0		0
Total expenses and impairments	0		0
Other income (expense):
Interest income	0		0
Interest expense	0		0
Gain / (Loss) on interest rate swaps and caps	0		0
Gain / (loss) from subsidiaries	49,931		114,591
Total other income (expense)	49,931		114,591
Income before taxes	49,931		114,591
Income tax expense	(5,136)		(26,937)
Net income	55,067		141,528
Other comprehensive income, net of tax:
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax	0		0
Comprehensive income	55,067		141,528
Issuer
Revenues:
Servicing fee income		50,983		162,741
Other fee income		3,517		11,647
Total fee income		54,500		174,388
Gain on mortgage loans held for sale		30,232		73,560
Total revenues		84,732		247,948
Expenses and impairments:
Salaries, wages and benefits		49,989		143,646
General and administrative		20,585		50,054
Provision for loan losses		1,281		2,005
Loss on foreclosed real estate and other		1,234		1,436
Occupancy		3,419		7,765
Total expenses and impairments		76,508		204,906
Other income (expense):
Interest income		2,871		11,070
Interest expense		(14,686)		(41,411)
Fair value changes in ABS securitizations		0		0
Gain / (loss) from subsidiaries		592		(6,722)
Total other income (expense)		(11,223)		(37,063)
Net income		(2,999)		5,979
Other comprehensive income, net of tax:
Change in value of designated cash flow hedge		0		0
Comprehensive income		(2,999)		5,979
Issuer
Revenues:
Servicing fee income	135,339		301,363
Other fee income	(4,672)		310
Total fee income	130,667		301,673
Gain on mortgage loans held for sale	139,259		312,116
Total revenues	269,926		613,789
Expenses and impairments:
Salaries, wages and benefits	96,121		231,709
General and administrative	50,573		119,772
Provision for loan losses	0		0
Loss on foreclosed real estate and other	884		1,008
Occupancy	5,641		11,293
Total expenses and impairments	153,219		363,782
Other income (expense):
Interest income	18,460		36,489
Interest expense	(43,000)		(89,832)
Gain / (Loss) on interest rate swaps and caps	(389)		(1,201)
Gain / (loss) from subsidiaries	(11,997)		(13,331)
Total other income (expense)	(36,926)		(67,875)
Income before taxes	79,781		182,132
Income tax expense	29,850		67,541
Net income	49,931		114,591
Other comprehensive income, net of tax:
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax	0		0
Comprehensive income	49,931		114,591
Guarantor (Subsidiaries)
Revenues:
Servicing fee income	0	(106)	0	(542)
Other fee income	6,947	3,882	20,596	11,411
Total fee income	6,947	3,776	20,596	10,869
Gain on mortgage loans held for sale	0	0	0	0
Total revenues	6,947	3,776	20,596	10,869
Expenses and impairments:
Salaries, wages and benefits	1,986	915	6,810	2,553
General and administrative	401	871	1,778	2,705
Provision for loan losses	0	0	0	0
Loss on foreclosed real estate and other	0	0	0	0
Occupancy	0	39	0	137
Total expenses and impairments	2,387	1,825	8,588	5,395
Other income (expense):
Interest income	0	5	0	0
Interest expense	0	0	0	0
Gain / (Loss) on interest rate swaps and caps	0		0
Fair value changes in ABS securitizations		0		0
Gain / (loss) from subsidiaries	0	0	0	0
Total other income (expense)	0	5	0	0
Income before taxes	4,560		12,008
Income tax expense	0		5
Net income	4,560	1,956	12,003	5,474
Other comprehensive income, net of tax:
Change in value of designated cash flow hedge		0		0
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax	0		0
Comprehensive income	4,560	1,956	12,003	5,474
Non-Guarantor (Subsidiaries)
Revenues:
Servicing fee income	607	3,862	5,546	3,862
Other fee income	121	261	353	941
Total fee income	728	4,123	5,899	4,803
Gain on mortgage loans held for sale	0	0	0	0
Total revenues	728	4,123	5,899	4,803
Expenses and impairments:
Salaries, wages and benefits	0	0	0	0
General and administrative	611	3,941	5,557	3,948
Provision for loan losses	1,545	(404)	3,153	0
Loss on foreclosed real estate and other	(2,934)	1,324	697	5,468
Occupancy	0	0	0	0
Total expenses and impairments	(778)	4,861	9,407	9,416
Other income (expense):
Interest income	4,640	11,617	14,781	34,870
Interest expense	(22,015)	(11,690)	(36,076)	(35,518)
Gain / (Loss) on interest rate swaps and caps	(688)		(501)
Fair value changes in ABS securitizations		(553)		(6,935)
Gain / (loss) from subsidiaries	0	0	0	0
Total other income (expense)	(18,063)	(626)	(21,796)	(7,583)
Income before taxes	(16,557)		(25,304)
Income tax expense	0		30
Net income	(16,557)	(1,364)	(25,334)	(12,196)
Other comprehensive income, net of tax:
Change in value of designated cash flow hedge		0		(1,071)
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax	423		423
Comprehensive income	(16,134)	(1,364)	(25,334)	(13,267)
Eliminations
Revenues:
Servicing fee income	(442)	(1,708)	(1,363)	(5,306)
Other fee income	0	0	0	0
Total fee income	(442)	(1,708)	(1,363)	(5,306)
Gain on mortgage loans held for sale	0	0	0	0
Total revenues	(442)	(1,708)	(1,363)	(5,306)
Expenses and impairments:
Salaries, wages and benefits	0	0	0	0
General and administrative	0	0	0	0
Provision for loan losses	0	0	0	0
Loss on foreclosed real estate and other	0	0	0	0
Occupancy	0	0	0	0
Total expenses and impairments	0	0	0	0
Other income (expense):
Interest income	442	1,708	1,363	5,306
Interest expense	0	0	0	0
Gain / (Loss) on interest rate swaps and caps	0		0
Fair value changes in ABS securitizations		(101)		16
Gain / (loss) from subsidiaries	(37,934)	(592)	(101,260)	6,722
Total other income (expense)	(37,492)	1,015	(99,897)	12,044
Income before taxes	(37,934)		(101,260)
Income tax expense	0		0
Net income	(37,934)	(693)	(101,260)	6,738
Other comprehensive income, net of tax:
Change in value of designated cash flow hedge		0		0
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax	0		0
Comprehensive income	$ (37,934)	$ (693)	$ (101,260)	$ 6,738

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Guarantor Financial Statement Information - Details (Details) (USD $)	Sep. 30, 2012 subsidiary
Debt Instrument
Guarantor Subsidiary, Ownership Percentage	100.00%
Number of Subsidiaries as Guarantors of Unsecured Debt	2
Unsecured Senior Notes
Debt Instrument
Principal amount	1,100,000

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 02, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	Nationstar Mortgage Holdings Inc.
Entity Central Index Key	0001520566
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Member units		90,409,425

XML

General and Administrative Expenses

9 Months Ended

Sep. 30, 2012

General and Administrative Expense [Abstract]

General and Administrative Expenses

General and Administrative Expenses

General and administrative expenses consist of the following for the dates indicated (in thousands):

	For the three months ended				For the nine months ended
	September 30, 2012		September 30, 2011		September 30, 2012		September 30, 2011
Servicing	$	13,893	$	7,106	$	50,530	$	16,101
Legal and professional fees	18,251		8,508		32,818		13,145
Depreciation and amortization	2,973		991		6,358		2,551
Equipment	2,450		1,251		5,569		3,245
Postage	2,395		1,522		5,056		3,937
Travel	2,043		871		4,730		2,383
Other	9,580		5,148		22,046		15,345
Total general and administrative expenses	$	51,585	$	25,397	$	127,107	$	56,707

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Fair Value Measurements - Measured on a Recurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012		Dec. 31, 2011
ASSETS
Mortgage servicing rights - fair value	$ 592,692		$ 251,050
Derivative instruments	112,628		11,302
Level 1
ASSETS
Mortgages loans held for sale	0		0
Derivative instruments	0		0
LIABILITIES
Derivative financial instruments	0		0
Level 2
ASSETS
Mortgages loans held for sale	703,214		458,626
Derivative instruments	112,628		11,302
LIABILITIES
Derivative financial instruments	37,835		12,370
Level 3
ASSETS
Mortgages loans held for sale	0		0
Derivative instruments	0		0
LIABILITIES
Derivative financial instruments	0		0
Fair Value, Measurements, Recurring | Total Fair Value
ASSETS
Mortgages loans held for sale	703,214	[1]	458,626	[1]
Mortgage servicing rights - fair value	592,692	[1]	251,050	[1]
Derivative instruments			11,302
Total assets	1,408,534		720,978
LIABILITIES
Excess spread financing (at fair value)	255,484		44,595
Total liabilities	293,319		56,965
Fair Value, Measurements, Recurring | Level 1
ASSETS
Mortgages loans held for sale	0	[1]	0	[1]
Mortgage servicing rights - fair value	0	[1]	0	[1]
Derivative instruments			0
Total assets	0		0
LIABILITIES
Excess spread financing (at fair value)	0		0
Total liabilities	0		0
Fair Value, Measurements, Recurring | Level 2
ASSETS
Mortgages loans held for sale	703,214	[1]	458,626	[1]
Mortgage servicing rights - fair value	0	[1]	0	[1]
Derivative instruments			11,302
Total assets	815,842		469,928
LIABILITIES
Excess spread financing (at fair value)	0		0
Total liabilities	37,835		12,370
Fair Value, Measurements, Recurring | Level 3
ASSETS
Mortgages loans held for sale	0	[1]	0	[1]
Mortgage servicing rights - fair value	592,692	[1]	251,050	[1]
Derivative instruments			0
Total assets	592,692		251,050
LIABILITIES
Excess spread financing (at fair value)	255,484		44,595
Total liabilities	255,484		44,595
Interest Rate Lock Commitments | Fair Value, Measurements, Recurring | Total Fair Value
ASSETS
Derivative instruments	112,628
Interest Rate Lock Commitments | Fair Value, Measurements, Recurring | Level 1
ASSETS
Derivative instruments	0
Interest Rate Lock Commitments | Fair Value, Measurements, Recurring | Level 2
ASSETS
Derivative instruments	112,628
Interest Rate Lock Commitments | Fair Value, Measurements, Recurring | Level 3
ASSETS
Derivative instruments	0
Interest Rate Swaps and Caps | Fair Value, Measurements, Recurring | Total Fair Value
LIABILITIES
Derivative financial instruments	7,041		6,540
Interest Rate Swaps and Caps | Fair Value, Measurements, Recurring | Level 1
LIABILITIES
Derivative financial instruments	0		0
Interest Rate Swaps and Caps | Fair Value, Measurements, Recurring | Level 2
LIABILITIES
Derivative financial instruments	7,041		6,540
Interest Rate Swaps and Caps | Fair Value, Measurements, Recurring | Level 3
LIABILITIES
Derivative financial instruments	0		0
Interest Rate Swap | Fair Value, Measurements, Recurring | Total Fair Value
LIABILITIES
Derivative financial instruments	1,632
Interest Rate Swap | Fair Value, Measurements, Recurring | Level 1
LIABILITIES
Derivative financial instruments	0
Interest Rate Swap | Fair Value, Measurements, Recurring | Level 2
LIABILITIES
Derivative financial instruments	1,632
Interest Rate Swap | Fair Value, Measurements, Recurring | Level 3
LIABILITIES
Derivative financial instruments	0
Forward Contracts | Fair Value, Measurements, Recurring | Total Fair Value
LIABILITIES
Derivative financial instruments	29,162		5,830
Forward Contracts | Fair Value, Measurements, Recurring | Level 1
LIABILITIES
Derivative financial instruments	0		0
Forward Contracts | Fair Value, Measurements, Recurring | Level 2
LIABILITIES
Derivative financial instruments	29,162		5,830
Forward Contracts | Fair Value, Measurements, Recurring | Level 3
LIABILITIES
Derivative financial instruments	$ 0		$ 0

[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.

XML

Business Segment Reporting - Financial Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 segment	Sep. 30, 2011	Dec. 31, 2011
Segment Reporting Information [Line Items]
Number of operating segments			2
Revenues:
Servicing fee income	$ 135,504	$ 53,031	$ 305,546	$ 160,755
Other fee income	2,396	7,660	21,259	23,999
Total fee income	137,900	60,691	326,805	184,754
Gain/(loss) on mortgage loans held for sale	139,259	30,232	312,116	73,560
Total revenues	277,159	90,923	638,921	258,314
Total expenses and impairments	154,828	83,194	381,777	219,717
Other income (expense):
Interest income	23,542	16,201	52,633	51,246
Interest expense	(65,015)	(26,376)	(125,908)	(76,929)
Fair value changes in ABS securitizations	0	(654)	0	(6,919)
Gain / (Loss) on interest rate swaps and caps	(1,077)	0	(1,702)	0
Total other income (expense)	(42,550)	(10,829)	(74,977)	(32,602)
Income before taxes	79,781	(3,100)	182,167	5,995
Depreciation and amortization	2,973	991	6,358	2,551
Total assets	5,941,231	2,004,325	5,941,231	2,004,325	1,787,931
Operating Segments
Revenues:
Servicing fee income	135,398	54,220	305,124	164,804
Other fee income	2,402	6,886	21,393	21,420
Total fee income	137,800	61,106	326,517	186,224
Gain/(loss) on mortgage loans held for sale	139,259	30,352	312,094	73,832
Total revenues	277,059	91,458	638,611	260,056
Total expenses and impairments	151,777	73,764	361,117	199,581
Other income (expense):
Interest income	18,705	3,963	37,125	11,089
Interest expense	(61,568)	(17,150)	(114,582)	(48,589)
Fair value changes in ABS securitizations		0		0
Gain / (Loss) on interest rate swaps and caps	236		424
Total other income (expense)	(42,627)	(13,187)	(77,033)	(37,500)
Income before taxes	82,655	4,507	200,461	22,975
Depreciation and amortization	2,772	852	5,773	2,187
Total assets	5,550,417	1,239,818	5,550,417	1,239,818
Servicing Segment
Revenues:
Servicing fee income	135,398	54,220	305,124	164,804
Other fee income	6,457	3,772	19,728	10,437
Total fee income	141,855	57,992	324,852	175,241
Gain/(loss) on mortgage loans held for sale	0	0	0	0
Total revenues	141,855	57,992	324,852	175,241
Total expenses and impairments	95,296	47,874	228,182	128,177
Other income (expense):
Interest income	12,544	907	22,406	2,529
Interest expense	(53,830)	(14,161)	(99,053)	(41,109)
Fair value changes in ABS securitizations		0		0
Gain / (Loss) on interest rate swaps and caps	236		424
Total other income (expense)	(41,050)	(13,254)	(76,223)	(38,580)
Income before taxes	5,509	(3,136)	20,447	8,484
Depreciation and amortization	2,006	525	4,104	1,293
Total assets	4,470,896	810,157	4,470,896	810,157
Originations Segment
Revenues:
Servicing fee income	0	0	0	0
Other fee income	(4,055)	3,114	1,665	10,983
Total fee income	(4,055)	3,114	1,665	10,983
Gain/(loss) on mortgage loans held for sale	139,259	30,352	312,094	73,832
Total revenues	135,204	33,466	313,759	84,815
Total expenses and impairments	56,481	25,890	132,935	71,404
Other income (expense):
Interest income	6,161	3,056	14,719	8,560
Interest expense	(7,738)	(2,989)	(15,529)	(7,480)
Fair value changes in ABS securitizations		0		0
Gain / (Loss) on interest rate swaps and caps	0		0
Total other income (expense)	(1,577)	67	(810)	1,080
Income before taxes	77,146	7,643	180,014	14,491
Depreciation and amortization	766	327	1,669	894
Total assets	1,079,521	429,661	1,079,521	429,661
Legacy Portfolio and Other
Revenues:
Servicing fee income	548	519	1,785	1,257
Other fee income	(6)	774	(134)	2,579
Total fee income	542	1,293	1,651	3,836
Gain/(loss) on mortgage loans held for sale	0	0	0	0
Total revenues	542	1,293	1,651	3,836
Total expenses and impairments	3,051	9,550	20,660	20,408
Other income (expense):
Interest income	4,395	10,530	14,145	34,851
Interest expense	(3,447)	(9,226)	(11,304)	(28,340)
Fair value changes in ABS securitizations		(654)		(6,919)
Gain / (Loss) on interest rate swaps and caps	(1,313)		(2,126)
Total other income (expense)	(365)	650	715	(408)
Income before taxes	(2,874)	(7,607)	(18,294)	(16,980)
Depreciation and amortization	201	139	585	364
Total assets	390,814	764,507	390,814	764,507
Eliminations
Revenues:
Servicing fee income	(442)	(1,708)	(1,363)	(5,306)
Other fee income		0		0
Total fee income	(442)	(1,708)	(1,363)	(5,306)
Gain/(loss) on mortgage loans held for sale	0	(120)	22	(272)
Total revenues	(442)	(1,828)	(1,341)	(5,578)
Total expenses and impairments	0	(120)	0	(272)
Other income (expense):
Interest income	442	1,708	1,363	5,306
Interest expense	0	0	(22)	0
Fair value changes in ABS securitizations		0		0
Gain / (Loss) on interest rate swaps and caps	0		0
Total other income (expense)	442	1,708	1,341	5,306
Income before taxes	0	0	0	0
Depreciation and amortization	0	0	0	0
Total assets	$ 0	$ 0	$ 0	$ 0

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Unaudited Consolidated Statements of Operations and Comprehensive Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues:
Servicing fee income	$ 135,504	$ 53,031	$ 305,546	$ 160,755
Other fee income	2,396	7,660	21,259	23,999
Total fee income	137,900	60,691	326,805	184,754
Gain on mortgage loans held for sale	139,259	30,232	312,116	73,560
Total revenues	277,159	90,923	638,921	258,314
Expenses and impairments:
Salaries, wages and benefits	98,107	50,904	238,519	146,199
General and administrative	51,585	25,397	127,107	56,707
Provision for loan losses	1,545	877	3,153	2,005
Loss on foreclosed real estate	(2,050)	2,558	1,705	6,904
Occupancy	5,641	3,458	11,293	7,902
Total expenses and impairments	154,828	83,194	381,777	219,717
Other income (expense):
Interest income	23,542	16,201	52,633	51,246
Interest expense	(65,015)	(26,376)	(125,908)	(76,929)
Loss on interest rate swaps and caps	(1,077)	0	(1,702)	0
Fair value changes in ABS securitizations	0	(654)	0	(6,919)
Total other income (expense)	(42,550)	(10,829)	(74,977)	(32,602)
Income before taxes	79,781	(3,100)	182,167	5,995
Income tax expense	24,714	0	40,639	0
Net income	55,067	(3,100)	141,528	5,995
Other comprehensive income, net of tax:
Change in value of designated cash flow hedge	0	0	(423)	(1,071)
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax	423	0	423	0
Comprehensive income	$ 55,490	$ (3,100)	$ 141,528	$ 4,924
Earnings per share:
Basic earnings per share (in dollars per share)	$ 0.62	$ (0.04)	$ 1.68	$ 0.09
Diluted earnings per share (in dollars per share)	$ 0.61	$ (0.04)	$ 1.68	$ 0.09
Weighted average shares:
Basic (shares)	89,168	70,000	84,038	70,000
Dilutive effect of stock awards (shares)	597	0	360	0
Diluted (shares)	89,765	70,000	84,398	70,000
Dividends declared per share (in dollars per share)	$ 0	$ 0	$ 0	$ 0

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Mortgage Loans Held for Sale and Investment

9 Months Ended

Sep. 30, 2012

Mortgage Loans Held for Sale and Investment [Abstract]

Mortgage Loans Held for Sale and Investment

Mortgage Loans Held for Sale and Investment

Mortgage loans held for sale

Nationstar maintains a strategy of originating mortgage loan products primarily for the purpose of selling to GSEs or other third party investors in the secondary market. Generally, all newly originated mortgage loans held for sale are delivered to third-party purchasers or securitized shortly after origination.

Nationstar has elected to measure newly originated prime residential mortgage loans held for sale at fair value, as permitted under ASC 825, Financial Instruments. Nationstar estimates fair value by evaluating a variety of market indicators, including recent trades and outstanding commitments, calculated on an aggregate basis (see Note 14 – Fair Value Measurements).

Mortgage loans held for sale consist of the following (in thousands):

	September 30, 2012		December 31, 2011
Mortgage loans held for sale – unpaid principal balance	$	668,345	$	442,596
Mark-to-market adjustment	34,869		16,030
Total mortgage loans held for sale	$	703,214	$	458,626

We had no mortgage loans held for sale on a nonaccrual status at September 30, 2012 or December 31, 2011.

A reconciliation of the changes in mortgage loans held for sale to the amounts presented in the consolidated statements of cash flows for the dates indicated is presented in the following table (in thousands):

For the nine months ended September 30,	2012			2011
Mortgage loans held for sale – beginning balance	$	458,626		$	369,617
Mortgage loans originated and purchased, net of fees	4,814,018			2,285,558
Cost of loans sold, net of fees	(4,606,909		)	(2,287,430		)
Principal payments received on mortgage loans held for sale and other changes	38,935			10,475
Transfer of mortgage loans held for sale to held for investment	(1,456		)	(288		)
Mortgage loans held for sale – ending balance	$	703,214		$	377,932

Mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net

Mortgage loans held for investment, subject to nonrecourse debt – legacy assets principally consist of nonconforming or subprime mortgage loans securitized which serve as collateral for the issued debt. These loans were transferred on October 1, 2009 from mortgage loans held for sale at fair value on the transfer date, as determined by the present value of expected future cash flows, with no valuation allowance recorded. The difference between the undiscounted cash flows expected and the investment in the loan is recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at transfer are not recognized as a yield adjustment or as a loss accrual or a valuation allowance. Increases in expected cash flows subsequent to the transfer are recognized prospectively through adjustment of the yield on the loans over the remaining life. Decreases in expected cash flows subsequent to transfer are recognized as a valuation allowance.

An allowance for loan losses is established by recording a provision for loan losses in the consolidated statement of operations when management believes a loss has occurred on a loan held for investment. When management determines that a loan held for investment is partially or fully uncollectible, the estimated loss is charged against the allowance for loan losses. Recoveries on losses previously charged to the allowance are credited to the allowance at the time the recovery is collected.

Nationstar accounts for the loans that were transferred to held for investment from held for sale during October 2009 in a manner similar to ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. At the date of transfer, management evaluated such loans to determine whether there was evidence of deterioration of credit quality since acquisition and if it was probable that Nationstar would be unable to collect all amounts due according to the loan’s contractual terms. The transferred loans were aggregated into separate pools of loans based on common risk characteristics (loan delinquency). Nationstar considers expected prepayments, and estimates the amount and timing of undiscounted expected principal, interest, and other cash flows for each aggregated pool of loans. The determination of expected cash flows utilizes internal inputs such as prepayment speeds and credit losses. These internal inputs require the use of judgment and can have a significant impact on the accretion of income and/or valuation allowance. Nationstar determines the excess of the pool’s scheduled contractual principal and contractual interest payments over all cash flows expected as of the transfer date as an amount that should not be accreted (nonaccretable difference). The remaining amount is accreted into interest income over the remaining life of the pool of loans (accretable yield).

Over the life of the transferred loans, management continues to estimate cash flows expected to be collected. Nationstar evaluates at the balance sheet date whether the present value of the loans determined using the effective interest rates has decreased, and if so, records an allowance for loan loss. The present value of any subsequent increase in the transferred loans cash flows expected to be collected is used first to reverse any existing allowance for loan loss related to such loans. Any remaining increase in cash flows expected to be collected are used to adjust the amount of accretable yield recognized on a prospective basis over the remaining life of the loans.

Nationstar accounts for its allowance for loan losses for all other mortgage loans held for investment in accordance with ASC 450-20, Loss Contingencies. The allowance for loan losses represents management’s best estimate of probable losses inherent in the loans held for investment portfolio. Mortgage loans held for investment portfolio is comprised primarily of large groups of homogeneous residential mortgage loans. These loans are evaluated based on the loan’s present delinquency status. The entire allowance is available to absorb probable credit losses from the entire held for investment portfolio.

Mortgage loans held for investment, subject to nonrecourse debt—legacy assets, net as of the dates indicated include (in thousands):

	September 30, 2012			December 31, 2011
Mortgage loans held for investment, subject to nonrecourse debt - legacy assets, net – unpaid principal balance	$	361,474		$	375,720
Transfer discount
Accretable	(20,828		)	(22,392		)
Non-accretable	(94,823		)	(104,024		)
Allowance for loan losses	(7,645)			(5,824		)
Total mortgage loans held for investment, subject to nonrecourse debt -legacy assets, net	$	238,178		$	243,480

The changes in accretable yield on loans transferred to mortgage loans held for investment, subject to nonrecourse debt- legacy assets were as follows (in thousands):

	Nine months ended September 30, 2012			Year ended December 31, 2011
Accretable Yield
Balance at the beginning of the period	$	22,392		$	25,219
Additions	—			—
Accretion	(2,728		)	(4,131		)
Reclassifications from (to) nonaccretable discount	1,164			1,304
Disposals	—			—
Balance at the end of the period	$	20,828		$	22,392

Nationstar may periodically modify the terms of any outstanding mortgage loans held for investment, subject to nonrecourse debt-legacy assets, net for loans that are either in default or in imminent default. Modifications often involve reduced payments by borrowers, modification of the original terms of the mortgage loans, forgiveness of debt and/or increased servicing advances. As a result of the volume of modification agreements entered into, the estimated average outstanding life in this pool of mortgage loans has been extended. Nationstar records interest income on the transferred loans on a level-yield method. To maintain a level-yield on these transferred loans over the estimated extended life, Nationstar reclassified approximately $1.2 million for the nine months ended September 30, 2012, and $1.3 million for the year ended December 31, 2011 from nonaccretable difference. Furthermore, Nationstar considers the decrease in principal, interest, and other cash flows expected to be collected arising from the transferred loans as an impairment, and Nationstar recorded provisions for loan losses of $1.5 million and $0.9 million for the three months ended September 30, 2012 and 2011 on the transferred loans to reflect this impairment. Nationstar recorded provisions for loan losses of $2.0 million for the nine months ended September 30, 2011, and $3.2 million for the nine months ended September 30, 2012 on the transferred loans to reflect this impairment.

Nationstar collectively evaluates all mortgage loans held for investment, subject to nonrecourse debt-legacy assets for impairment. The changes in the allowance for loan losses on mortgage loans held for investment, subject to nonrecourse debt-legacy assets, net were as follows (in thousands) for the dates indicated:

	Nine months ended September 30, 2012
	Performing			Non-Performing			Total
Balance at the beginning of the period	$	1,641		$	4,183		$	5,824
Provision for loan losses	2,249			904			3,153
Charge-offs	(978		)	(354		)	(1,332		)
Balance at the end of the period	$	2,912		$	4,733		$	7,645
Ending balance – collectively evaluated for impairment	$	278,367		$	83,107		$	361,474

	Year ended December 31, 2011
	Performing			Non-Performing			Total
Balance at the beginning of the period	$	829		$	2,469		$	3,298
Provision for loan losses	1,346			2,191			3,537
Recoveries on loans previously charged-off	—			—			—
Charge-offs	(534		)	(477		)	(1,011		)
Balance at the end of the period	$	1,641		$	4,183		$	5,824
Ending balance – Collectively evaluated for impairment	$	283,770		$	91,950		$	375,720

Loan delinquency and loan-to-value ratio (LTV) are common credit quality indicators that Nationstar monitors and utilizes in its evaluation of the adequacy of the allowance for loan losses, of which the primary indicator of credit quality is loan delinquency. LTV refers to the ratio of comparing the loan’s unpaid principal balance to the property’s collateral value. Loan delinquencies and unpaid principal balances are updated monthly based upon collection activity. Collateral values are updated from third-party providers on a periodic basis. For an event requiring a decision based at least in part on the collateral value, Nationstar takes its last known value provided by a third party and then adjusts the value based on the applicable home price index.

The following tables provide the outstanding unpaid principal balance of Nationstar’s mortgage loans held for investment by credit quality indicators as of dates indicated.

	September 30, 2012		December 31, 2011
	(in thousands)
Credit Quality by Delinquency Status
Performing	$	278,367	$	283,770
Non-Performing	83,107		91,950
Total	$	361,474	$	375,720
Credit Quality by Loan-to-Value Ratio
Less than 60	$	40,060	$	42,438
Less than 70 and more than 60	15,817		15,968
Less than 80 and more than 70	22,627		25,190
Less than 90 and more than 80	28,863		32,620
Less than 100 and more than 90	32,804		33,708
Greater than 100	221,303		225,796
Total	$	361,474	$	375,720

Performing loans refer to loans that are less than 90 days delinquent. Non-performing loans refer to loans that are greater than 90 days delinquent.

Reverse mortgage interests

Reverse mortgage interests consists of fees paid to taxing authorities for borrowers’ unpaid taxes and insurance, and payments made to borrowers for line of credit draws on the reverse mortgages. These advances include due and payable advances, which are recovered upon the sale of the subject property, and defaulted advances that can be securitized and sold. As of September 30, 2012, Nationstar had $452.9 million in outstanding reverse mortgage interests.

Nationstar accounts for outstanding and future reverse mortgage interests as financing receivables in accordance with ASC 310, Receivables. Interest and other unpaid taxes and fees are accrued monthly and capitalized as part of the outstanding advance balance. When Nationstar determines that a loss on the advance balance is probable and that the carrying balance may be partially or fully uncollectible, an allowance for loan loss is established by recording a provision for loan losses in the consolidated statement of operations.

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Accounts Receivable

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Accounts Receivable

Accounts Receivable

Accounts receivable consist primarily of accrued interest receivable on mortgage loans and securitizations, accrued servicing fees, and advances made to unconsolidated securitization trusts, as required under various servicing agreements related to delinquent loans, which are ultimately paid back to Nationstar from such trusts and third parties.

Accounts receivable consist of the following (in thousands):

	September 30, 2012		December 31, 2011
Delinquent interest advances	$	1,508,429	$	213,737
Corporate and escrow advances	1,159,711		299,946
Accrued servicing fees	94,214		20,865
Reverse mortgage	26,240		—
Receivables from trusts	13,175		4,664
Accrued interest	3,942		1,512
Insurance deposits	1,750		1,750
Other	45,524		19,826
Total accounts receivable	$	2,852,985	$	562,300

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Capital Requirements

9 Months Ended

Sep. 30, 2012

Mortgage Banking [Abstract]

Capital Requirements

Capital Requirements

Certain of Nationstar’s secondary market investors require various capital adequacy requirements, as specified in the respective selling and servicing agreements. To the extent that these mandatory, imposed capital requirements are not met, Nationstar’s secondary market investors may ultimately terminate Nationstar’s selling and servicing agreements, which would prohibit Nationstar from further originating or securitizing these specific types of mortgage loans. In addition, these secondary market investors may impose additional net worth or financial condition requirements based on an assessment of market conditions or other relevant factors.

Among Nationstar’s various capital requirements related to its outstanding selling and servicing agreements, the most restrictive of these requires Nationstar to maintain a minimum adjusted net worth balance of $356.5 million. As of September 30, 2012, Nationstar was in compliance with all of its selling and servicing capital requirements.

Additionally, Nationstar is required to maintain a minimum tangible net worth of at least $175.0 million as of each quarter-end related to its outstanding Master Repurchase Agreements on its outstanding repurchase facilities. As of September 30, 2012, Nationstar was in compliance with these minimum tangible net worth requirements.

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Income Taxes

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The financial statements through December 31, 2011 and for the period January 1, 2012 up to Reorganization do not include income tax expense or benefit or any current or deferred income tax assets or liabilities. Nationstar Inc.'s corporate subsidiaries were subject to income taxes prior to the Reorganization, however, income tax expense (primarily state) and related tax liabilities were not material for presentation purposes.

As a result of the Reorganization, Nationstar Inc. and its subsidiaries, including Nationstar, became a new corporate consolidated group for income tax purposes. As a result of the change in income tax status, the Company is required to record deferred taxes on the difference between book and tax bases in assets and liabilities as of the Reorganization date. The net deferred tax asset or liability is recorded through the consolidated statement of operations as a component of income tax expense. As of the Reorganization date, the Company recorded a $70.8 million deferred tax asset for net operating and other loss carryforwards inherited as a result of the Reorganization, and a $16.5 million deferred tax liability related to basis differences in Nationstar's assets and liabilities. In addition, the Company recorded a $54.3 million valuation allowance for deferred tax assets that management concluded will likely not be realized.

The Company recorded an income tax provision of $24.7 million on pretax income for the three months ended September 30, 2012. For the nine months ended September 30, 2012, income tax expense was $40.6 million.

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Shareholders' Equity (Details) (USD $)	3 Months Ended		9 Months Ended			9 Months Ended	0 Months Ended	6 Months Ended	9 Months Ended	0 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Sep. 30, 2012 Restricted Preferred Units	Mar. 09, 2012 2012 Plan Restricted Stock	Sep. 30, 2012 2012 Plan Restricted Stock	Sep. 30, 2012 2012 Plan Restricted Stock	Mar. 09, 2012 2012 Plan Management Restricted Stock	Mar. 09, 2012 2012 Plan Members of the Board Restricted Stock	Sep. 30, 2012 Predecessor Plan	Sep. 30, 2012 Predecessor Plan	Sep. 30, 2012 Nationstar Mortgage LLC
Share-based Compensation Arrangement by Share-based Payment Award
Grants								6,000		1,191,117	85,716
Vesting period									3 years
Number vesting in February 2013								405,269	405,269
Number vesting in 2014								405,269	405,269
Number vesting in 2015								406,486	406,486
Weighted average grant date fair value						$ 4.23	$ 14.00
Shares of Nationstar Mortgage stock held by Nationstar LLC														212,156
Value of Nationstar Mortgage shares held by Nationstar LLC	$ 4,566,000		$ 4,566,000		$ 0
Compensation expense, net of forfeitures	2,600,000	1,700,000	10,700,000	12,200,000								0	4,600,000
Compensation expense to recognize in remaining 2012	2,500,000		2,500,000
Compensation expense to recognize in 2013	5,700,000		5,700,000
Compensation expense to recognize in 2014	2,400,000		2,400,000
Compensation expense to recognize in 2015	$ 400,000		$ 400,000

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Payables and Accrued Liabilities

9 Months Ended

Sep. 30, 2012

Payables and Accruals [Abstract]

Payables and Accrued Liabilities

Payables and Accrued Liabilities

Payables and accrued liabilities consist of the following (in thousands):

	September 30, 2012		December 31, 2011
MSR purchases payable including advances	$	310,609	$	8,204
Mortgage insurance premiums and reserves	70,344		19,162
Loans subject to repurchase from Ginnie Mae	58,534		35,735
Payables to securitization trusts	37,607		10,665
Reverse mortgage payables	46,000		—
Accrued bonus and payroll	43,511		21,236
Accrued interest	39,902		10,225
Government sponsored entities	26,797		18,728
Deposit from MSR co-investor for ResCap	25,200		—
Taxes	14,544		154
Repurchase reserves	15,055		10,026
Legal and professional fees	12,076		5,931
Cancelled lease reserves	7,319		9,160
Servicing Payables	6,628		—
Other	48,142		34,563
Total payables and accrued liabilities	$	762,268	$	183,789

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Mortgage Servicing Rights - MSR's at Fair Value (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Servicing Asset at Fair Value, Amount [Roll Forward]
Fair value at the end of the period	$ 592,692	$ 251,050
Mortgage Servicing Rights
Servicing Asset at Fair Value, Amount [Roll Forward]
Fair value at the beginning of the period	251,050	145,062
Servicing resulting from transfers of financial assets	37,578	36,474
Recognition of servicing assets from derecognition of variable interest entities	0	5,714
Purchases of servicing assets	346,874	102,800
Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model	6,669	(14,207)
Other changes in fair value	(49,479)	(24,793)
Fair value at the end of the period	592,692	251,050
Principal Amount Outstanding of Loans Held-in-portfolio [Abstract]
Principal amount outstanding on loans managed and securitized	120,852,838	44,253,454
Mortgage Servicing Rights | Credit Sensitive
Principal Amount Outstanding of Loans Held-in-portfolio [Abstract]
Principal amount outstanding on loans managed and securitized	106,076,630	32,408,623
Mortgage Servicing Rights | Interest Rate Sensitive
Principal Amount Outstanding of Loans Held-in-portfolio [Abstract]
Principal amount outstanding on loans managed and securitized	$ 14,776,208	$ 11,844,831
Minimum
Servicing Assets at Fair Value [Line Items]
Servicing fee, percentage of unpaid principal balance	0.25%
Maximum
Servicing Assets at Fair Value [Line Items]
Servicing fee, percentage of unpaid principal balance	0.50%

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Mortgage Servicing Rights (MSRs)

9 Months Ended

Sep. 30, 2012

Transfers and Servicing [Abstract]

Mortgage Servicing Rights (MSRs)

Mortgage Servicing Rights (MSRs)

MSRs at fair value

Nationstar recognizes MSRs related to all existing residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting and for which the servicing rights are retained. Additionally, Nationstar may acquire the rights to service residential mortgage loans that do not relate to assets transferred by Nationstar through the purchase of these rights from third parties.

Nationstar identifies MSRs related to all existing forward residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting or through the acquisition of rights to service forward residential mortgage loans that do not relate to assets transferred by Nationstar through the purchase of these rights from third parties as a class of MSR. Nationstar applies fair value accounting to this class of MSRs, with all changes in fair value recorded as charges or credits to servicing fee income in accordance with ASC 860-50, Servicing Assets and Liabilities.

MSRs arise from contractual agreements between Nationstar and investors in mortgage securities and mortgage loans. Nationstar records MSR assets when it sells loans on a servicing-retained basis, at the time of securitization or through the acquisition or assumption of the right to service a financial asset. Under these contracts, Nationstar performs loan servicing functions in exchange for fees and other remuneration.

The fair value of the MSRs is based upon the present value of the expected future cash flows related to servicing these loans. Nationstar receives a base servicing fee ranging from 0.25% to 0.50% annually on the remaining outstanding principal balances of the loans. The servicing fees are collected from investors. Nationstar determines the fair value of the MSRs by the use of a cash flow model that incorporates prepayment speeds, discount rate, and other assumptions (including servicing costs) that management believes are consistent with the assumptions other major market participants use in valuing the MSRs. Certain of the forward loans underlying the MSRs are prime agency and government conforming residential forward mortgage loans and as such are more interest rate sensitive whereas the remaining MSRs are more credit sensitive. The nature of the forward loans underlying the MSRs affects the assumptions that management believes other major market participants use in valuing the MSRs. Nationstar obtains third-party valuations for a portion of its MSRs to assess the reasonableness of the fair value calculated by the cash flow model.

Certain of the forward loans underlying the mortgage servicing rights carried at fair value that are owned by Nationstar are credit sensitive in nature and the value of these mortgage servicing rights are more likely to be affected from changes in credit losses than from interest rate movement. The remaining forward loans underlying Nationstar’s MSRs held at fair value are prime agency and government conforming residential mortgage loans for which the value of these MSRs are more likely to be affected from interest rate movement than changes in credit losses.

Nationstar used the following weighted average assumptions in estimating the fair value of MSRs for the dates indicated:

Credit Sensitive MSRs	September 30, 2012		December 31, 2011
Discount rate	17.12	%	25.71	%
Total prepayment speeds	20.74	%	15.80	%
Expected weighted-average life	4.49 years		5.15 years
Credit losses	21.35	%	35.42	%
Interest Rate Sensitive MSRs	September 30, 2012		December 31, 2011
Discount rate	10.62	%	10.46	%
Total prepayment speeds	18.63	%	19.02	%
Expected weighted-average life	4.79 years		5.04 years
Credit losses	9.59	%	9.73	%

The activity of MSRs carried at fair value is as follows for the dates indicated (in thousands):

	Nine months ended September 30, 2012			Year ended December 31, 2011
Fair value at the beginning of the period	$	251,050		$	145,062
Additions:
Servicing resulting from transfers of financial assets	37,578			36,474
Recognition of servicing assets from derecognition of variable interest entities	—			5,714
Purchases of servicing assets	346,874			102,800
Changes in fair value:
Due to changes in valuation inputs or assumptions used in the valuation model	6,669			(14,207		)
Other changes in fair value	(49,479		)	(24,793		)
Fair value at the end of the period	$	592,692		$	251,050
Unpaid principal balance of forward loans serviced for others
Credit sensitive loans	$	106,076,630		$	32,408,623
Interest sensitive loans	14,776,208			11,844,831
Total owned loans	$	120,852,838		$	44,253,454

The following table shows the hypothetical effect on the fair value of the MSRs using various unfavorable variations of the expected levels of certain key assumptions used in valuing these assets at September 30, 2012 and December 31, 2011 (in thousands):

	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
September 30, 2012
Mortgage servicing rights	$	(17,284	)	$	(32,796	)	$	(67,848	)	$	(137,087	)	$	(50,922	)	$	(107,768	)
December 31, 2011
Mortgage servicing rights	$	(6,640	)	$	(12,929	)	$	(13,281	)	$	(25,215	)	$	(5,081	)	$	(10,944	)

These sensitivities are hypothetical and should be evaluated with care. The effect on fair value of a 10% variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors (e.g., a decrease in total prepayment speeds may result in an increase in credit losses), which could impact the above hypothetical effects.

MSRs at amortized cost

Additionally, Nationstar has acquired servicing rights for reverse mortgage loans. For this class of servicing rights, Nationstar applies the amortization method (i.e., lower of cost or market) with the capitalized cost of the MSRs amortized in proportion and over the period of the estimated net future servicing income and recognized as an adjustment to servicing fee income. The expected period of the estimated net servicing income is based, in part, on the expected prepayment period of the underlying reverse mortgages. This class of MSRs is periodically evaluated for impairment. For purposes of measuring impairment, MSRs are stratified based on predominant risk characteristics of the underlying serviced loans. These risk characteristics include loan type (fixed or adjustable rate), term and interest rate. Impairment, if any, represents the excess of amortized cost of an individual stratum over its estimated fair value and is recognized through a valuation allowance.

As of September 30, 2012, Nationstar owns the right to service certain reverse mortgage MSRs with an unpaid principal balance of $27.3 billion. The initial carrying amount of these MSRs is based on the relative fair value of the purchased assets and liabilities including reverse mortgage interests. These MSRs are subsequently accounted for using the amortization method. Amortization / accretion is recorded as service fee income on the statement of operations and comprehensive income. Nationstar utilizes a variety of assumptions in assessing the fair value of its servicing assets or liabilities, with the primary assumptions including discount rates and the expected weighted average life. At September 30, 2012, no impairment was identified. Interest and servicing fees collected on reverse mortgage interests are included as a component of either interest or service fee income.

The activity of MSRs carried at amortized cost is as follows for the date indicated (in thousands):

	Nine months Ended
	September 30, 2012
	Assets			Liabilities
Activity of MSRs at amortized cost
Balance at the beginning of the period	$	—		$	—
Additions:
Purchase /Assumptions of servicing rights/obligations	9,000			86,553
Deductions:
Amortization/Accretion	(964		)	(4,240		)
Balance at end of the period	$	8,036		$	82,313

Subserviced loans

In addition to the two classes of MSRs that Nationstar services for others, Nationstar also subservices loans on behalf of owners of MSRs or loans for a fee. Nationstar has no recorded value for its subservicing arrangements. At September 30, 2012 and December 31, 2011, the unpaid principal balances under subservicing arrangements were $46.2 billion and $53.7 billion, respectively.

Total servicing and ancillary fees from Nationstar’s servicing portfolio (including subservicing) of residential mortgage loans are presented in the following table for the periods indicated (in thousands):

	For the three months ended September 30,				For the nine months ended September 30,
	2012		2011		2012		2011
Servicing fees	$	95,281	$	48,141	$	223,255	$	133,338
Ancillary fees	35,355		25,772		84,893		62,848
Total servicing and ancillary fees	$	130,636	$	73,913	$	308,148	$	196,186

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Other Assets

9 Months Ended

Sep. 30, 2012

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other Assets

Other assets consisted of the following (in thousands):

	September 30, 2012		December 31, 2011
Interest rate locks (see Note 10)	$	112,628	$	11,302
Deposit in escrow for ResCap acquisition	72,000		—
Loans subject to repurchase right from Ginnie Mae	58,534		35,735
Deferred financing costs	43,501		12,059
Margin call deposits	29,784		4,518
Equity method investment	8,994		6,493
Prepaid expenses	6,445		4,286
Unsecured loans	1,803		1,827
Deposits pending on mortgage servicing rights acquisitions	1,798		28,904
Other	2,872		1,057
Total other assets	$	338,359	$	106,181

In conjunction with Nationstar's definitive agreement to acquire certain assets from Residential Capital, LLC (see Note 23), Nationstar was required to place in escrow $72.0 million toward the purchase price. Also, as a part of the transaction, Newcastle Investment Corp. (Newcastle) remitted $25.2 million to Nationstar toward the escrow payment. Such amount has been recorded in payables and accrued liabilities in the Company's consolidated balance sheet and would be repaid to Newcastle in the event that the agreement is not consummated.

Deposits pending on mortgage servicing rights acquisitions primarily consist of amounts transferred to third parties for the future acquisition of mortgage servicing. In December 2011, Nationstar entered into an agreement with a financial institution to acquire the rights to service reverse mortgages with an unpaid principal balance of approximately $9.5 billion, of which the underlying reverse mortgages are currently owned by an unaffiliated GSE. The purchase of these servicing rights was completed upon the approval of the GSE which was received in June 2012 . Upon execution of the purchase, Nationstar assumed responsibility for advance obligations on the underlying reverse mortgage loans. Nationstar paid $9.0 million for the purchase of these servicing rights which had previously been deposited with the financial institution. Also, as of December 31, 2011, Nationstar had placed in escrow $17.9 million relating to the purchase of the mortgage servicing rights and related outstanding advance balances with the same financial institution. Such purchase was completed in January 2012 and these escrow amounts were released. In addition, Nationstar has entered into separate agreements to purchase forward mortgage servicing rights. These amounts are carried as deposits on acquired servicing rights acquisitions until the underlying forward residential mortgage loan balances are transferred to Nationstar. Nationstar has deposits with a counterparty for servicing rights on forward mortgages for $1.8 million as of September 30, 2012 that are substantially expected to be originated and transferred to Nationstar during the fourth quarter of 2012, and $2.0 million as of December 31, 2011 that were originated and transferred to Nationstar during the first quarter of 2012.

For certain loans sold to GNMA (Ginnie Mae), Nationstar as the servicer has the unilateral right to repurchase without Ginnie Mae’s prior authorization any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. Once Nationstar has the unilateral right to repurchase the delinquent loan, Nationstar has effectively regained control over the loan, and under GAAP, must re-recognize the loan on its balance sheet and establish a corresponding repurchase liability regardless of Nationstar’s intention to repurchase the loan. Nationstar’s re-recognized loans included in other assets and the corresponding liability in payables and accrued liabilities was $58.5 million at September 30, 2012 and $35.7 million at December 31, 2011.

In March 2011, Nationstar acquired a 22% interest in ANC Acquisition LLC (ANC) for an initial investment of $6.6 million. ANC is the parent company of National Real Estate Information Services, LP (NREIS), a real estate services company. In March 2012, FIF contributed its 13% investment in ANC to Nationstar, increasing the overall investment to 35%. As Nationstar is able to exercise significant influence, but not control, over the policies and procedures of the entity, and Nationstar owns less than 50% of the voting interests, Nationstar applies the equity method of accounting. NREIS, an ancillary real estate services and vendor management company, offers comprehensive settlement and property valuation services for both originations and default management channels. Direct or indirect product offerings include title insurance agency, tax searches, flood certification, default valuations, full appraisals and broker price opinions.

A summary of the assets, liabilities, and operations of ANC as of the following periods are presented in the following tables (in thousands):

							September 30, 2012			December 31, 2011
ASSETS
Cash							$	3,259		$	2,486
Accounts receivable							3,837			5,296
Receivables from affiliates							388			92
Equity method investments							1,482			2,788
Property and equipment, net							2,092			1,995
Goodwill and other intangible assets							33,548			33,876
Other assets							820			590
Total assets							$	45,426		$	47,123
LIABILITIES
Notes payable							$	4,724		$	4,724
Payables and accrued liabilities							16,049			13,236
Total liabilities							$	20,773		$	17,960
	Three months ended September 30,						Nine months ended September 30,			From Acquisition through September 30,
	2012			2011			2012			2011
REVENUES
Sales	$	12,917		$	13,181		$	41,296		$	25,382
Cost of sales	(10,447		)	(10,871		)	(31,878		)	(21,593		)
Net sales revenues	2,470			2,310			9,418			3,789
OTHER (EXPENSE)/INCOME
Operating costs	(4,841		)	(5,054		)	(13,903		)	(9,004		)
Income from equity method investments	675			771			1,930			1,176
Depreciation and amortization	(377		)	(180		)	(1,138		)	(359		)
Other (expense)/income	(42		)	136			(111		)	39
Gain/(loss) from discontinued operations	21			(27		)	(14		)	(54		)
Total expense	(4,564		)	(4,354		)	(13,236		)	(8,202		)
Net loss	$	(2,094	)	$	(2,044	)	$	(3,818	)	$	(4,413	)

Nationstar recorded a net charge to earnings related to loss on equity method investments of $0.7 million and $1.3 millionfor the three and nine months endedSeptember 30, 2012, respectively, a $0.5 million loss related to the three months ended September 30, 2011 and a $1.0 million loss related to the period from acquisition through September 30, 2011, which is included as a component of other fee income in Nationstar’s consolidated statement of operations.

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Nationstar enters into interest rate lock commitments (IRLCs) with prospective borrowers. These commitments are carried at fair value in accordance with ASC 815, Derivatives and Hedging. ASC 815 clarifies that the expected net future cash flows related to the associated servicing of a loan should be included in the measurement of all written loan commitments that are accounted for at fair value through earnings. The estimated fair values of IRLCs are based on quoted market values and are recorded in other assets in the consolidated balance sheets. The initial and subsequent changes in the value of IRLCs are a component of gain on mortgage loans held for sale.

Nationstar actively manages the risk profiles of its IRLCs and mortgage loans held for sale on a daily basis. To manage the price risk associated with IRLCs, Nationstar enters into forward sales of MBS in an amount equal to the portion of the IRLC expected to close, assuming no change in mortgage interest rates. In addition, to manage the interest rate risk associated with mortgage loans held for sale, Nationstar enters into forward sale commitments to deliver mortgage loan inventory to investors. The estimated fair values of forward sales of MBS and forward sale commitments are based on quoted market values and are recorded as a component of other assets or liabilities and mortgage loans held for sale, respectively, in the consolidated balance sheets. The initial and subsequent changes in value on forward sales of MBS and forward sale commitments are a component of gain on mortgage loans held for sale.

Periodically, Nationstar enters into interest rate swap agreements to hedge the interest payment on the warehouse debt. These interest rate swap agreements generally require Nationstar to pay a fixed interest rate and receive a variable interest rate based on LIBOR. Unless designated as an accounting hedge, Nationstar records losses on interest rate swaps as a component of gain/(loss) on interest rate swaps and caps in Nationstar’s consolidated statements of operations. Unrealized losses on undesignated interest rate derivatives are separately disclosed under operating activities in the consolidated statements of cash flows. Interest rate swaps designated as cash flow hedges under ASC 815 are recorded at fair value on the Company’s consolidated balance sheet, with any changes in fair value related to the effective portion of the hedge being recorded as an adjustment to other comprehensive income. To qualify as a cash flow hedge, the hedge must be highly effective at reducing the risk associated with the exposure being hedged and must be formally designated at hedge inception. Nationstar considers a hedge to be highly effective if the change in fair value of the derivative hedging instrument is within 80% to 125% of the change in the fair value of the hedged item attributable to the hedged risk. Ineffective portions of the cash flow hedge are reflected in earnings as they occur as a component of interest expense.

Historically, Nationstar has entered into interest rate swap agreements to hedge the interest payments associated with its outstanding floating rate financing servicer advance facilities. Prior to September 30, 2012, certain of these derivatives were designated as cash flow hedges and were recorded at fair value on Nationstar's balance sheet, with any change in fair value being recorded as an adjustment to other comprehensive income. On September 30, 2012, the Company dedesignated the remainder of the interest rate swap agreements, with any further changes in fair value being recorded as a charge to gain or loss in interest rate swaps and caps in Nationstar's consolidated statement of operations.

In conjunction with the Reorganization, FIF contributed outstanding interest rate swaps in March 2012 to Nationstar. These interest rate swaps on ABS debt generally require Nationstar to pay a fixed interest rate and receive a variable interest rate based on LIBOR. The outstanding interest rate swaps have not been designated as accounting hedges during the nine months ended September 30, 2012. Any changes in fair value are recorded as a component of gains or losses on interest rate swaps and caps in Nationstar’s consolidated statement of operations.

Associated with the Company's derivatives is $29.8 million in margin call deposits recorded in other assets on the Company's balance sheet as of September 30, 2012.

The following table shows the effect of derivative financial instruments that were designated as accounting hedges for the three and nine months ended September 30, 2012 and 2011.

The Effect of Derivative Instruments on the Statement of Operations

(in thousands)

Derivatives in ASC 815 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of  Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
For the three months ended September 30, 2012
Interest Rate Swap	$	—		Interest Expense	$	—	Interest Expense	$	423
For the three months ended September 30, 2011
Interest Rate Swap	$	—		Interest Expense	$	—	Interest Expense	$	617
For the nine months ended September 30, 2012
Interest Rate Swap	$	—		Interest Expense	$	—	Interest Expense	$	—
For the nine months ended September 30, 2011
Interest Rate Swap	$	(1,071	)	Interest Expense	$	582	Interest Expense	$	2,032

As of September 30, 2012, there was no credit risk related to contingent features in any of the Company's derivative agreements.

The following tables provide the outstanding notional balances and fair values of outstanding positions for the dates indicated, and recorded gains/(losses) during the periods indicated (in thousands):

	Expiration Dates	Outstanding Notional		Fair Value		Recorded Gains / (Losses)
For the nine months ended September 30, 2012
MORTGAGE LOANS HELD FOR SALE
Loan sale commitments	2012	$	4,175	$	212	$	(422	)
OTHER ASSETS
IRLCs	2012	4,353,327		112,628		101,326
LIABILITIES
Interest rate swaps and caps	2012-2015	648,940		7,041		(501		)
Interest rate swaps on ABS debt (1)	2012-2017	894,363		1,632		(1,201		)
Forward MBS trades	2012	2,838,185		29,162		(23,332		)
For the year ending December 31, 2011
MORTGAGE LOANS HELD FOR SALE
Loan sale commitments	2012	$	28,047	$	634	$	592
OTHER ASSETS
IRLCs	2012	736,377		11,302		6,598
LIABILITIES
Interest rate swaps and caps	2012-2015	193,500		6,540		1,261
Forward MBS trades	2012	691,725		5,830		(9,792		)
Interest rate swap, subject to ABS nonrecourse debt (2)	—	—		—		(8,058		)

(1) In March 2012, Nationstar received interest rate swaps from FIF as a part of the reorganization.

(2) In December 2011, Nationstar sold its remaining variable interest in a securitization trust that had been a consolidated VIE since January 1, 2010 and deconsolidated the VIE. Upon deconsolidation of this VIE, Nationstar derecognized the related ABS nonrecourse debt and therefore the underlying interest rate swap, subject to ABS nonrecourse debt.

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Other Assets - Others Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Other Assets
Interest rate locks	$ 112,628	$ 11,302
Deposit in escrow for Rescap Acquisition	72,000	0
Loans subject to repurchase right from Ginnie Mae	58,534	35,735
Deferred financing costs	43,501	12,059
Margin call deposits	29,784	4,518
Equity method investment	8,994	6,493
Prepaid expenses	6,445	4,286
Unsecured loans	1,803	1,827
Escrow Deposit	1,798	28,904
Other	2,872	1,057
Total other assets	338,359	106,181
GNMA
Other Assets
Loans subject to repurchase right from Ginnie Mae	58,534	35,735
Pending Acquisition | Mortgage Servicing Rights
Other Assets
Escrow Deposit	$ 72,000

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Shareholders' Equity - Restricted Stock Rollforward (Details) (2012 Plan, Restricted Stock, USD $)	3 Months Ended	6 Months Ended
	Mar. 31, 2012	Sep. 30, 2012
2012 Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Restricted Stock outstanding at March 31, 2012		1,277,000
Restricted Stock outstanding at March 31, 2012, Grant Date Fair Value	$ 14.00
Restricted Stock outstanding at March 31, 2012, Remaining Contractual Term	2 years 8 months 12 days
Granted		6,000
Forfeited		(32,000)
Restricted Stock outstanding at September 30, 2012	1,277,000	1,251,000
Restricted Stock unvested and expected to vest		1,223,000
Restricted Stock vested and payable at September 30, 2012		0

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Other Assets - Equity Method Investment (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended	3 Months Ended		9 Months Ended		1 Months Ended		3 Months Ended	9 Months Ended
	Mar. 31, 2012	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012 ANC Acquisition LLC	Mar. 31, 2011 ANC Acquisition LLC	Sep. 30, 2011 ANC Acquisition LLC	Sep. 30, 2012 ANC Acquisition LLC	Sep. 30, 2011 ANC Acquisition LLC	Dec. 31, 2011 ANC Acquisition LLC
Schedule of Equity Method Investments [Line Items]
Percentage interest in equity investment acquired	13.00%					13.00%	22.00%
Percentage interest in equity investment	35.00%					35.00%
Initial investment in equity investment							$ 6,600
ASSETS
Cash									3,259		2,486
Accounts receivable									3,837		5,296
Receivables from affiliates									388		92
Equity method investments									1,482		2,788
Property and equipment, net									2,092		1,995
Goodwill and other intangible assets									33,548		33,876
Other assets									820		590
Total assets									45,426		47,123
LIABILITIES
Notes payable									4,724		4,724
Payables and accrued liabilities									16,049		13,236
Total liabilities									20,773		17,960
REVENUES
Sales								13,181	41,296	25,382
Cost of sales								(10,871)	(31,878)	(21,593)
Net sales revenues								2,310	9,418	3,789
OTHER INCOME/(EXPENSE)
Operating costs								(5,054)	(13,903)	(9,004)
Income from equity method investments								771	1,930	1,176
Depreciation and amortization								(180)	(1,138)	(359)
Other income/(expense)								136	(111)	39
Loss from discontinued operations								(27)	(14)	(54)
Total other income/(expense)								(4,354)	(13,236)	(8,202)
Net loss								(2,044)	(3,818)	(4,413)
Loss on equity method investments		$ 730	$ (1,000)	$ 1,327	$ 971

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Mortgage Servicing Rights - Subserviced Loans (Details) (USD $) In Thousands, unless otherwise specified			3 Months Ended		9 Months Ended
	Sep. 30, 2012 Loan Subservicing Agreement	Dec. 31, 2011 Loan Subservicing Agreement	Sep. 30, 2012 Residential Mortgage	Sep. 30, 2011 Residential Mortgage	Sep. 30, 2012 Residential Mortgage	Sep. 30, 2011 Residential Mortgage
Subserviced Loans [Line Items]
Principal amount outstanding on loans managed and securitized	$ 46,200,000	$ 53,700,000
Servicing and ancillary fees
Servicing fees			95,281	48,141	223,255	133,338
Ancillary fees			35,355	25,772	84,893	62,848
Total servicing and ancillary fees				$ 73,913		$ 196,186

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Guarantor Financial Statement Information - Consolidating Balance Sheets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Assets
Cash and cash equivalents	$ 430,815	$ 62,445	$ 24,005	$ 21,223
Restricted cash	258,858	71,499
Accounts receivable, net	2,852,985	562,300
Mortgage loans held for sale	703,214	458,626	377,932	369,617
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Asset, net	238,178	243,480
Participating interest in reverse mortgages	452,886	0
Receivables from affiliates	13,301	4,609
Mortgage servicing rights - fair value	592,692	251,050
Investment in subsidiaries	0	0
Mortgage servicing rights - amortized cost	8,036	0
Property and equipment, net	48,714	24,073
REO, net	3,193	3,668
Other assets	338,359	106,181
Total assets	5,941,231	1,787,931	2,004,325
Liabilities and shareholders' equity
Notes payable	2,532,316	873,179
Unsecured senior notes	1,062,423	280,199
Payables and accrued liabilities	762,268	183,789
Payables to affiliates	0	0
Derivative financial instruments	37,835	12,370
Mortgage Servicing Liability	82,313	0
Nonrecourse debt-Legacy Assets	101,898	112,490
Excess spread financing - fair value	255,484	44,595
Participating interest financing	415,448	0
Total liabilities	5,249,985	1,506,622
Total shareholders' equity	691,246	281,309		256,372
Total liabilities and equity	5,941,231	1,787,931
Parent Company
Assets
Cash and cash equivalents	0	0
Restricted cash	0
Accounts receivable, net	0
Mortgage loans held for sale	0
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Asset, net	0
Participating interest in reverse mortgages	0
Receivables from affiliates	0
Mortgage servicing rights - fair value	0
Investment in subsidiaries	661,463
Mortgage servicing rights - amortized cost	0
Property and equipment, net	0
REO, net	0
Other assets	29,783
Total assets	691,246
Liabilities and shareholders' equity
Notes payable	0
Unsecured senior notes	0
Payables and accrued liabilities	0
Payables to affiliates	0
Derivative financial instruments	0
Mortgage Servicing Liability	0
Nonrecourse debt-Legacy Assets	0
Excess spread financing - fair value	0
Participating interest financing	0
Total liabilities	0
Total shareholders' equity	691,246
Total liabilities and equity	691,246
Issuer
Assets
Cash and cash equivalents		62,201	24,133	20,904
Restricted cash		49,180
Accounts receivable, net		281,782
Mortgage loans held for sale		458,626
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Asset, net		5,984
Receivables from affiliates		41,961
Mortgage servicing rights - fair value		251,050
Investment in subsidiaries		140,880
Property and equipment, net		23,238
REO, net		0
Other assets		106,181
Total assets		1,421,083
Liabilities and shareholders' equity
Notes payable		628,605
Unsecured senior notes		280,199
Payables and accrued liabilities		180,545
Payables to affiliates		0
Derivative financial instruments		5,830
Nonrecourse debt-Legacy Assets		0
Excess spread financing - fair value		44,595
Total liabilities		1,139,774
Total shareholders' equity		281,309
Total liabilities and equity		1,421,083
Issuer
Assets
Cash and cash equivalents	430,497	62,201
Restricted cash	132,854
Accounts receivable, net	2,851,007
Mortgage loans held for sale	703,214
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Asset, net	10,137
Participating interest in reverse mortgages	452,886
Receivables from affiliates	(1,605,564)
Mortgage servicing rights - fair value	592,692
Investment in subsidiaries	157,812
Mortgage servicing rights - amortized cost	8,036
Property and equipment, net	47,879
REO, net	1,363
Other assets	338,359
Total assets	4,121,172
Liabilities and shareholders' equity
Notes payable	823,608
Unsecured senior notes	1,062,423
Payables and accrued liabilities	789,639
Payables to affiliates	0
Derivative financial instruments	30,794
Mortgage Servicing Liability	82,313
Nonrecourse debt-Legacy Assets	0
Excess spread financing - fair value	255,484
Participating interest financing	415,448
Total liabilities	3,459,709
Total shareholders' equity	661,463
Total liabilities and equity	4,121,172
Guarantor (Subsidiaries)
Assets
Cash and cash equivalents	318	244	754	319
Restricted cash	3	3
Accounts receivable, net	0	7
Mortgage loans held for sale	0	0
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Asset, net	0	0
Participating interest in reverse mortgages	0
Receivables from affiliates	82,229	70,541
Mortgage servicing rights - fair value	0	0
Investment in subsidiaries	0	0
Mortgage servicing rights - amortized cost	0
Property and equipment, net	835	835
REO, net	0	0
Other assets	0	0
Total assets	83,385	71,630
Liabilities and shareholders' equity
Notes payable	0	0
Unsecured senior notes	0	0
Payables and accrued liabilities	0	0
Payables to affiliates	0	0
Derivative financial instruments	0	0
Mortgage Servicing Liability	0
Nonrecourse debt-Legacy Assets	0	0
Excess spread financing - fair value	0	0
Participating interest financing	0
Total liabilities	0	0
Total shareholders' equity	83,385	71,630
Total liabilities and equity	83,385	71,630
Non-Guarantor (Subsidiaries)
Assets
Cash and cash equivalents	0	0	(882)	0
Restricted cash	126,001	22,316
Accounts receivable, net	1,978	280,511
Mortgage loans held for sale	0	0
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Asset, net	228,041	237,496
Participating interest in reverse mortgages	0
Receivables from affiliates	1,536,636	0
Mortgage servicing rights - fair value	0	0
Investment in subsidiaries	0	0
Mortgage servicing rights - amortized cost	0
Property and equipment, net	0	0
REO, net	1,830	3,668
Other assets	0	0
Total assets	1,894,486	543,991
Liabilities and shareholders' equity
Notes payable	1,708,708	244,574
Unsecured senior notes	0	0
Payables and accrued liabilities	2,412	3,244
Payables to affiliates	0	107,893
Derivative financial instruments	7,041	6,540
Mortgage Servicing Liability	0
Nonrecourse debt-Legacy Assets	101,898	112,490
Excess spread financing - fair value	0	0
Participating interest financing	0
Total liabilities	1,820,059	474,741
Total shareholders' equity	74,427	69,250
Total liabilities and equity	1,894,486	543,991
Eliminations
Assets
Cash and cash equivalents	0	0	0	0
Restricted cash	0	0
Accounts receivable, net	0	0
Mortgage loans held for sale	0	0
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Asset, net	0	0
Participating interest in reverse mortgages	0
Receivables from affiliates	0	(107,893)
Mortgage servicing rights - fair value	0	0
Investment in subsidiaries	(819,275)	(140,880)
Mortgage servicing rights - amortized cost	0
Property and equipment, net	0	0
REO, net	0	0
Other assets	(29,783)	0
Total assets	(849,058)	(248,773)
Liabilities and shareholders' equity
Notes payable	0	0
Unsecured senior notes	0	0
Payables and accrued liabilities	(29,783)	0
Payables to affiliates	0	(107,893)
Derivative financial instruments	0	0
Mortgage Servicing Liability	0
Nonrecourse debt-Legacy Assets	0	0
Excess spread financing - fair value	0	0
Participating interest financing	0
Total liabilities	(29,783)	(107,893)
Total shareholders' equity	(819,275)	(140,880)
Total liabilities and equity	$ (849,058)	$ (248,773)

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Mortgage Servicing Rights (Tables)

9 Months Ended

Sep. 30, 2012

Transfers and Servicing [Abstract]

Schedule of Assumptions for Fair Value of Mortgage Service Rights

Nationstar used the following weighted average assumptions in estimating the fair value of MSRs for the dates indicated:

Credit Sensitive MSRs	September 30, 2012		December 31, 2011
Discount rate	17.12	%	25.71	%
Total prepayment speeds	20.74	%	15.80	%
Expected weighted-average life	4.49 years		5.15 years
Credit losses	21.35	%	35.42	%
Interest Rate Sensitive MSRs	September 30, 2012		December 31, 2011
Discount rate	10.62	%	10.46	%
Total prepayment speeds	18.63	%	19.02	%
Expected weighted-average life	4.79 years		5.04 years
Credit losses	9.59	%	9.73	%

Schedule of Servicing Assets at Fair Value

The activity of MSRs carried at fair value is as follows for the dates indicated (in thousands):

	Nine months ended September 30, 2012			Year ended December 31, 2011
Fair value at the beginning of the period	$	251,050		$	145,062
Additions:
Servicing resulting from transfers of financial assets	37,578			36,474
Recognition of servicing assets from derecognition of variable interest entities	—			5,714
Purchases of servicing assets	346,874			102,800
Changes in fair value:
Due to changes in valuation inputs or assumptions used in the valuation model	6,669			(14,207		)
Other changes in fair value	(49,479		)	(24,793		)
Fair value at the end of the period	$	592,692		$	251,050
Unpaid principal balance of forward loans serviced for others
Credit sensitive loans	$	106,076,630		$	32,408,623
Interest sensitive loans	14,776,208			11,844,831
Total owned loans	$	120,852,838		$	44,253,454

Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets [Table Text Block]

The following table shows the hypothetical effect on the fair value of the MSRs using various unfavorable variations of the expected levels of certain key assumptions used in valuing these assets at September 30, 2012 and December 31, 2011 (in thousands):

	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
September 30, 2012
Mortgage servicing rights	$	(17,284	)	$	(32,796	)	$	(67,848	)	$	(137,087	)	$	(50,922	)	$	(107,768	)
December 31, 2011
Mortgage servicing rights	$	(6,640	)	$	(12,929	)	$	(13,281	)	$	(25,215	)	$	(5,081	)	$	(10,944	)

Activity of MSRs at Amortized Cost

The activity of MSRs carried at amortized cost is as follows for the date indicated (in thousands):

	Nine months Ended
	September 30, 2012
	Assets			Liabilities
Activity of MSRs at amortized cost
Balance at the beginning of the period	$	—		$	—
Additions:
Purchase /Assumptions of servicing rights/obligations	9,000			86,553
Deductions:
Amortization/Accretion	(964		)	(4,240		)
Balance at end of the period	$	8,036		$	82,313

Schedule of Fees in Servicing Portfolio

Total servicing and ancillary fees from Nationstar’s servicing portfolio (including subservicing) of residential mortgage loans are presented in the following table for the periods indicated (in thousands):

	For the three months ended September 30,				For the nine months ended September 30,
	2012		2011		2012		2011
Servicing fees	$	95,281	$	48,141	$	223,255	$	133,338
Ancillary fees	35,355		25,772		84,893		62,848
Total servicing and ancillary fees	$	130,636	$	73,913	$	308,148	$	196,186

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Accounts Receivable (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Receivables [Abstract]
Delinquent interest advances	$ 1,508,429	$ 213,737
Corporate and escrow advances	1,159,711	299,946
Accrued servicing fees	94,214	20,865
Reverse Mortgage Receivable	26,240	0
Accrued interest	3,942	1,512
Insurance deposits	1,750	1,750
Accounts Receivable from Securitization	13,175	4,664
Other	45,524	19,826
Total accounts receivable	$ 2,852,985	$ 562,300

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Shareholders' Equity

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Shareholders' Equity

Shareholders’ Equity

Share-based compensation is recognized in accordance with ASC 718, Compensation-Stock Compensation. This guidance requires all share-based payments to employees, including grants of employee stock options, to be recognized as an expense in the consolidated statements of operations, based on the fair values. The amount of compensation is measured at the fair value of the awards when granted and this cost is expensed over the required service period, which is normally the vesting period of the award.

Nationstar Inc. has adopted the 2012 Incentive Compensation Plan (the “2012 Plan”), that offers certain key employees of Nationstar, consultants and non-employee directors equity-based awards. In connection with the initial public offering, on March 7, 2012, Nationstar Inc. made grants of restricted stock to management in the total amount of 1,191,117 shares and also to members of the Board in the total amount of 85,716 shares.

The restricted stock, net of forfeitures, is scheduled to vest over 3 years with 405,269 shares vesting in March 2013, 405,269 shares vesting in March 2014, and 406,486 shares vesting in March 2015. The weighted average grant date fair value of the restricted stock was $14.00.

The following table summarizes information about our restricted stock as of September 30, 2012 under the 2012 Plan (restricted stock in thousands):

	Shares	Grant Date Fair Value	Remaining Contractual Term
Restricted Stock outstanding at March 31, 2012	1,277	$14.00	2.4
Granted	6	$28.17	1.0
Forfeited	(32)
Restricted Stock outstanding at September 30, 2012	1,251
Restricted Stock unvested and expected to vest	1,223
Restricted Stock vested and payable at September 30, 2012	—

In addition to the 2012 Plan, Nationstar management also had interests in certain of the predecessor parent company FIF’s restricted preferred units which fully vested on June 30, 2012. The weighted average grant date fair value of these units was $4.23. In conjunction with the final vesting under this plan, certain participants remitted a portion of their Nationstar Inc. common stock to Nationstar Mortgage LLC in payment of a portion of their federal tax withholdings on their vested shares. The participants paid the remainder of their required tax payments with cash. As a result of the above activity, Nationstar Mortgage LLC holds 212,156 shares of Nationstar Inc. common shares at their cost of $4.6 million. These shares are reflected in Nationstar's consolidated balance sheet as common shares held by subsidiary, a contra equity account. The shares are expected to be held by Nationstar Mortgage LLC until they can be distributed to Nationstar Inc. and retired.

Total compensation expense, net of forfeitures, for both the 2012 Plan and the predecessor plan recognized for the three and nine months endedSeptember 30, 2012 was $2.6 million and $10.7 million, respectively. Total compensation expense for the three and nine months ended September 30, 2011 was $1.7 million and $12.2 million, respectively. Total compensation expenses, net of forfeitures, for the predecessor plan for the three and nine months endedSeptember 30, 2012, was $0.0 million and $4.6 million, respectively. Nationstar expects to recognize $2.5 million of compensation expense in the last three months of 2012, $5.7 million in 2013, $2.4 million in 2014, and $0.4 million in 2015.

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Guarantor Financial Statement Information

9 Months Ended

Sep. 30, 2012

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Guarantor Financial Statement Information

Guarantor Financial Statement Information

Nationstar has $1.1 billion aggregate principal amount of unsecured senior notes which mature on various dates through October 1, 2020. The notes are jointly and severally guaranteed on an unsecured senior basis by all of Nationstar’s existing and future wholly-owned domestic restricted subsidiaries with certain exceptions. All guarantor subsidiaries are 100% owned by Nationstar. Effective June 30, 2012, Nationstar Inc. and its two direct wholly-owned subsidiaries became guarantors of the unsecured senior notes as well. Presented below are consolidating financial statements of Nationstar Inc., Nationstar, and the guarantor subsidiaries for the periods indicated.

NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING BALANCE SHEET SEPTEMBER 30, 2012 (IN THOUSANDS)
Assets	Nationstar Inc.		Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)		Eliminations			Consolidated
Cash and cash equivalents	$	—	$	430,497		$	318	$	—	$	—		$	430,815
Restricted cash	—		132,854			3		126,001		—			258,858
Accounts receivable, net	—		2,851,007			—		1,978		—			2,852,985
Mortgage loans held for sale	—		703,214			—		—		—			703,214
Mortgage loans held for investment, subject to nonrecourse debt–Legacy Asset, net	—		10,137			—		228,041		—			238,178
Participating interest in reverse mortgages	—		452,886			—		—		—			452,886
Receivables from affiliates	—		(1,605,564		)	82,229		1,536,636		—			13,301
Mortgage servicing rights – fair value	—		592,692			—		—		—			592,692
Investment in subsidiaries	661,463		157,812			—		—		(819,275		)	—
Mortgage servicing rights – amortized cost	—		8,036			—		—		—			8,036
Property and equipment, net	—		47,879			835		—		—			48,714
REO, net	—		1,363			—		1,830		—			3,193
Other assets	29,783		338,359			—		—		(29,783		)	338,359
Total assets	$	691,246	$	4,121,172		$	83,385	$	1,894,486	$	(849,058	)	$	5,941,231
Liabilities and shareholders’ equity
Notes payable	$	—	$	823,608		$	—	$	1,708,708	$	—		$	2,532,316
Unsecured senior notes	—		1,062,423			—		—		—			1,062,423
Payables and accrued liabilities	—		789,639			—		2,412		(29,783		)	762,268
Payables to affiliates	—		—			—		—		—			—
Derivative financial instruments	—		30,794			—		7,041		—			37,835
Mortgage Servicing Liability	—		82,313			—		—		—			82,313
Nonrecourse debt–Legacy Assets	—		—			—		101,898		—			101,898
Excess spread financing - at fair value	—		255,484			—		—		—			255,484
Participating interest financing	—		415,448			—		—		—			415,448
Total liabilities	—		3,459,709			—		1,820,059		(29,783		)	5,249,985
Total shareholders’ equity	691,246		661,463			83,385		74,427		(819,275		)	691,246
Total liabilities and shareholders’ equity	$	691,246	$	4,121,172		$	83,385	$	1,894,486	$	(849,058	)	$	5,941,231

NATIONSTAR MORTGAGE INC CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012 (IN THOUSANDS)
	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	—		$	135,339		$	—	$	607		$	(442	)	$	135,504
Other fee income	—			(4,672		)	6,947		121			—			2,396
Total fee income	—			130,667			6,947		728			(442		)	137,900
Gain on mortgage loans held for sale	—			139,259			—		—			—			139,259
Total Revenues	—			269,926			6,947		728			(442		)	277,159
Expenses and impairments:
Salaries, wages and benefits	—			96,121			1,986		—			—			98,107
General and administrative	—			50,573			401		611			—			51,585
Provision for loan losses	—			—			—		1,545			—			1,545
Loss on foreclosed real estate and other	—			884			—		(2,934		)	—			(2,050		)
Occupancy	—			5,641			—		—			—			5,641
Total expenses and impairments	—			153,219			2,387		(778		)	—			154,828
Other income (expense):
Interest income	—			18,460			—		4,640			442			23,542
Interest expense	—			(43,000		)	—		(22,015		)	—			(65,015		)
Gain/(Loss) on interest rate swaps and caps	—			(389		)	—		(688		)	—			(1,077		)
Gain/(loss) from subsidiaries	49,931			(11,997		)	—		—			(37,934		)	—
Total other income (expense)	49,931			(36,926		)	—		(18,063		)	(37,492		)	(42,550		)
Income before taxes	49,931			79,781			4,560		(16,557		)	(37,934		)	79,781
Income tax expense/(benefit)	(5,136		)	29,850			—		—			—			24,714
Net income/(loss)	55,067			49,931			4,560		(16,557		)	(37,934		)	55,067
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			—		—			—			—
Reclassification adjustments for gain (loss) included in earnings	$	—		$	—		$	—	$	423		$	—		$	423
Comprehensive income / (loss)	$	55,067		$	49,931		$	4,560	$	(16,134	)	$	(37,934	)	$	55,490

NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 (IN THOUSANDS)
	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	—		$	301,363		$	—	$	5,546		$	(1,363	)	$	305,546
Other fee income	—			310			20,596		353			—			21,259
Total fee income	—			301,673			20,596		5,899			(1,363		)	326,805
Gain on mortgage loans held for sale	—			312,116			—		—			—			312,116
Total Revenues	—			613,789			20,596		5,899			(1,363		)	638,921
Expenses and impairments:
Salaries, wages and benefits	—			231,709			6,810		—			—			238,519
General and administrative	—			119,772			1,778		5,557			—			127,107
Provision for loan losses	—			—			—		3,153			—			3,153
Loss on foreclosed real estate and other	—			1,008			—		697			—			1,705
Occupancy	—			11,293			—		—			—			11,293
Total expenses and impairments	—			363,782			8,588		9,407			—			381,777
Other income (expense):
Interest income	—			36,489			—		14,781			1,363			52,633
Interest expense	—			(89,832		)	—		(36,076		)	—			(125,908		)
Gain/(Loss) on interest rate swaps and caps	—			(1,201		)	—		(501		)	—			(1,702		)
Gain/(loss) from subsidiaries	114,591			(13,331		)	—		—			(101,260		)	—
Total other income (expense)	114,591			(67,875		)	—		(21,796		)	(99,897		)	(74,977		)
Income before taxes	114,591			182,132			12,008		(25,304		)	(101,260		)	182,167
Income tax expense/(benefit)	(26,937		)	67,541			5		30			—			40,639
Net income/(loss)	141,528			114,591			12,003		(25,334		)	(101,260		)	141,528
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			—		(423		)	—			(423		)
Reclassification adjustments for gain (loss) included in earnings	—			—			—		423			—			423
Comprehensive income / (loss)	$	141,528		$	114,591		$	12,003	$	(25,334	)	$	(101,260	)	$	141,528

NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 (IN THOUSANDS)
	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Operating activities:
Net income/(loss)	$	141,528		$	114,591		$	12,003		$	(25,334	)	$	(101,260	)	$	141,528
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
(Gain)/loss from subsidiaries	(114,591		)	13,331			—			—			101,260			—
Share-based compensation	—			10,665			—			—			—			10,665
Gain on mortgage loans held for sale	—			(312,116		)	—			—			—			(312,116		)
Provision for loan losses	—			—			—			3,153			—			3,153
Loss on foreclosed real estate and other	—			1,008			—			697			—			1,705
Loss on equity method investments	—			1,327			—			—			—			1,327
(Gain)/loss on ineffectiveness on interest rate swaps and cap	—			1,201			—			501			—			1,702
Fair value changes in excess spread financing	—			5,050			—			—			—			5,050
Depreciation and amortization	—			6,315			43			—			—			6,358
Change in fair value of mortgage servicing rights	—			42,810			—			—			—			42,810
Accretion of mortgage servicing liability	—			(3,276		)	—			—			—			(3,276		)
Amortization of debt discount	—			16,387			—			1,714			—			18,101
Amortization of premiums/(discounts)	—			(125		)	—			(3,877		)	—			(4,002		)
Mortgage loans originated and purchased, net of fees	—			(4,814,018		)	—			—			—			(4,814,018		)
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees	—			4,761,946			—			7,371			—			4,769,317
Changes in assets and liabilities:
Accounts receivable	—			(546,934		)	7			278,533			—			(268,394		)
Receivables from/(payables to) affiliates	—			1,626,650			(11,979		)	(1,614,018		)	—			653
Reverse funded advances due to securitization	—			(317,272		)	—			—			—			(317,272		)
Other assets	(29,783		)	(135,107		)	—			—			29,783			(135,107		)
Accounts payable and accrued liabilities	2,846			259,694			—			(832		)	(29,783		)	231,925
Net cash provided by/(used in) operating activities	—			732,127			74			(1,352,092		)	—			(619,891		)

	Nationstar Inc.			Issuer			Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Investing activities:
Property and equipment additions, net of disposals	—			(20,699		)	—		—			—			(20,699		)
Cash Proceeds from assumption of reverse mortgage servicing obligations, net	—			(31,169		)	—		—			—			(31,169		)
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred	—			(2,024,019		)	—		—			—			(2,024,019		)
Repurchases of REO from Ginnie Mae	—			(6,856		)	—		—			—			(6,856		)
Proceeds from sales of REO	—			4,485			—		3,949			—			8,434
Net cash provided by/(used in) investing activities	—			(2,078,258		)	—		3,949			—			(2,074,309		)
Financing activities:
Issuance of Senior Unsecured Notes	—			781,196			—		—			—			781,196
Transfers to/from restricted cash	—			(83,674		)	—		(103,685		)	—			(187,359		)
Issuance of common stock, net of IPO issuance costs	246,700			—			—		—			—			246,700
Issuance of participating interest financing	—			416,303			—		—			—			416,303
Issuance of excess spread financing	—			215,570			—		—			—			215,570
Increase (decrease) in notes payable, net	—			195,003			—		1,464,134			—			1,659,137
Repayment of nonrecourse debt–Legacy assets	—			—			—		(12,306		)	—			(12,306		)
Repayment of excess servicing spread financing	—			(12,981		)	—		—			—			(12,981		)
Distribution to subsidiaries	(246,700		)	—			—		—			246,700			—
Contributions of parent	—			246,700			—		—			(246,700		)	—
Debt financing costs	—			(43,690		)	—		—			—			(43,690		)
Net cash provided by/(used in) financing activities	—			1,714,427			—		1,348,143			—			3,062,570
Net increase/(decrease) in cash	—			368,296			74		—			—			368,370
Cash and cash equivalents at beginning of period	—			62,201			244		—			—			62,445
Cash and cash equivalents at end of period	$	—		$	430,497		$	318	$	—		$	—		$	430,815

NATIONSTAR MORTGAGE LLC CONSOLIDATING BALANCE SHEET DECEMBER 31, 2011 (IN THOUSANDS)
	Issuer (Parent)		Guarantor (Subsidiaries)		Non-Guarantor (Subsidiaries)		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	62,201	$	244	$	—	$	—		$	62,445
Restricted cash	49,180		3		22,316		—			71,499
Accounts receivable, net	281,782		7		280,511		—			562,300
Mortgage loans held for sale	458,626		—		—		—			458,626
Mortgage loans held for investment, subject to nonrecourse debt–Legacy Asset, net	5,984		—		237,496		—			243,480
Receivables from affiliates	41,961		70,541		—		(107,893		)	4,609
Mortgage servicing rights – fair value	251,050		—		—		—			251,050
Investment in subsidiaries	140,880		—		—		(140,880		)	—
Property and equipment, net	23,238		835		—		—			24,073
REO, net	—		—		3,668		—			3,668
Other assets	106,181		—		—		—			106,181
Total assets	$	1,421,083	$	71,630	$	543,991	$	(248,773	)	$	1,787,931
Liabilities and members’ equity
Notes payable	$	628,605	$	—	$	244,574	$	—		$	873,179
Unsecured senior notes	280,199		—		—		—			280,199
Payables and accrued liabilities	180,545		—		3,244		—			183,789
Payables to affiliates	—		—		107,893		(107,893		)	—
Derivative financial instruments	5,830		—		6,540		—			12,370
Derivative financial instruments, subject to ABS nonrecourse debt	—		—		—		—			—
Nonrecourse debt–Legacy Assets	—		—		112,490		—			112,490
Excess spread financing – fair value	44,595		—		—		—			44,595
ABS nonrecourse – fair value	—		—		—		—			—
Total liabilities	1,139,774		—		474,741		(107,893		)	1,506,622
Total members’ equity	281,309		71,630		69,250		(140,880		)	281,309
Total liabilities and members’ equity	$	1,421,083	$	71,630	$	543,991	$	(248,773	)	$	1,787,931

NATIONSTAR MORTGAGE LLC CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 (IN THOUSANDS)
	Issuer			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	50,983		$	(106	)	$	3,862		$	(1,708	)	$	53,031
Other fee income	3,517			3,882			261			—			7,660
Total fee income	54,500			3,776			4,123			(1,708		)	60,691
Gain on mortgage loans held for sale	30,232			—			—			—			30,232
Total Revenues	84,732			3,776			4,123			(1,708		)	90,923
Expenses and impairments:
Salaries, wages and benefits	49,989			915			—			—			50,904
General and administrative	20,585			871			3,941			—			25,397
Provision for loan losses	1,281			—			(404		)	—			877
Loss on foreclosed real estate	1,234			—			1,324			—			2,558
Occupancy	3,419			39			—			—			3,458
Total expenses and impairments	76,508			1,825			4,861			—			83,194
Other income / (expense):
Interest income	2,871			5			11,617			1,708			16,201
Interest expense	(14,686		)	—			(11,690		)	—			(26,376		)
Fair value changes in ABS securitizations	—			—			(553		)	(101		)	(654		)
Gain / (loss) from subsidiaries	592			—			—			(592		)	—
Total other income / (expense)	(11,223		)	5			(626		)	1,015			(10,829		)
Net income / (loss)	(2,999		)	1,956			(1,364		)	(693		)	(3,100		)
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			—			—			—
Comprehensive income / (loss)	$	(2,999	)	$	1,956		$	(1,364	)	$	(693	)	$	(3,100	)

NATIONSTAR MORTGAGE LLC CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 (IN THOUSANDS)
	Issuer (Parent)			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Revenues:
Servicing fee income	$	162,741		$	(542	)	$	3,862		$	(5,306	)	$	160,755
Other fee income	11,647			11,411			941			—			23,999
Total fee income	174,388			10,869			4,803			(5,306		)	184,754
Gain on mortgage loans held for sale	73,560			—			—			—			73,560
Total Revenues	247,948			10,869			4,803			(5,306		)	258,314
Expenses and impairments:
Salaries, wages and benefits	143,646			2,553			—			—			146,199
General and administrative	50,054			2,705			3,948			—			56,707
Provision for loan losses	2,005			—			—			—			2,005
Loss on foreclosed real estate	1,436			—			5,468			—			6,904
Occupancy	7,765			137			—			—			7,902
Total expenses and impairments	204,906			5,395			9,416			—			219,717
Other income / (expense):
Interest income	11,070			—			34,870			5,306			51,246
Interest expense	(41,411		)	—			(35,518		)	—			(76,929		)
Fair value changes in ABS securitizations	—			—			(6,935		)	16			(6,919		)
Gain / (loss) from subsidiaries	(6,722		)	—			—			6,722			—
Total other income / (expense)	(37,063		)	—			(7,583		)	12,044			(32,602		)
Net income / (loss)	$	5,979		$	5,474		$	(12,196	)	$	6,738		$	5,995
Other comprehensive income, net of tax:
Change in value of cash flow hedges	—			—			(1,071		)	—			(1,071		)
Comprehensive income / (loss)	$	5,979		$	5,474		$	(13,267	)	$	6,738		$	4,924

NATIONSTAR MORTGAGE LLC CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 (IN THOUSANDS)
	Issuer (Parent)			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations			Consolidated
Operating activities:
Net income/(loss)	$	5,979		$	5,474		$	(12,196	)	$	6,738		$	5,995
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Loss on equity method investments	971												971
Share-based compensation	12,201			—			—			—			12,201
Gain on mortgage loans held for sale	(73,560		)	—			—			—			(73,560		)
Provision for loan losses	2,005			—			—			—			2,005
Loss on foreclosed real estate and other	1,436			—			5,468			—			6,904
(Gain)/loss on ineffectiveness on interest rate swaps and cap	—			—			(2,032		)	—			(2,032		)
Fair value changes in ABS securitizations	—			—			6,935			(16		)	6,919
Loss from subsidiaries	6,722			—			—			(6,722		)	—
Depreciation and amortization	2,551			—			—			—			2,551
Change in fair value of mortgage servicing rights	30,757			—			—			—			30,757
Amortization of debt discount	6,667			—			3,657			—			10,324
Amortization of premiums/(discounts)	—			—			(4,001		)	—			(4,001		)
Mortgage loans originated and purchased, net of fees	(2,285,558		)	—			—			—			(2,285,558		)
Cost of loans sold, net of fees	2,287,430			—			—			—			2,287,430
Principal payments/prepayments received and other changes in mortgage loans originated as held for sale	37,620			—			9,757			—			47,377
Changes in assets and liabilities:
Accounts receivable	(35,366		)	(5		)	316			—			(35,055		)
Receivables from/(payables to) affiliates	(24,356		)	(5,031		)	32,298			—			2,911
Other assets	(2,037		)	—			—			—			(2,037		)
Accounts payable and accrued liabilities	36,053			—			(213		)	—			35,840
Net cash provided by/(used) in operating activities	9,515			438			39,989			—			49,942

	Issuer (Parent)			Guarantor (Subsidiaries)			Non-Guarantor (Subsidiaries)			Eliminations		Consolidated
Investing activities:
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt	—			—			29,395			—		29,395
Property and equipment additions, net of disposals	(15,147		)	—			—			—		(15,147		)
Acquisition of equity method investment	(6,600		)	—			—			—		(6,600		)
Purchase of mortgage servicing rights	(40,305		)	—			—			—		(40,305		)
Proceeds from sales of REO	—			—			22,897			—		22,897
Net cash provided by/(used) in investing activities	(62,052		)	—			52,292			—		(9,760		)
Financing activities:
Transfers to/from restricted cash	4,972			(3		)	13,343			—		18,312
Decrease in notes payable, net	62,237			—			(33,212		)	—		29,025
Repayment of nonrecourse debt–Legacy assets	—			—			(26,119		)	—		(26,119		)
Repayment of ABS nonrecourse debt	—			—			(47,175		)	—		(47,175		)
Debt financing costs	(2,734		)	—			—			—		(2,734		)
Distribution to parent	(3,900		)	—			—			—		(3,900		)
Tax related share-based settlement of units by members	(4,809		)	—			—			—		(4,809		)
Net cash provided by/(used) in financing activities	55,766			(3		)	(93,163		)	—		(37,400		)
Net increase/(decrease) in cash	3,229			435			(882		)	—		2,782
Cash and cash equivalents at beginning of period	20,904			319			—			—		21,223
Cash and cash equivalents at end of period	$	24,133		$	754		$	(882	)	$	—	$	24,005

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Disclosures Related to Transactions with Affiliates of Fortress Investment Group LLC (Details) (USD $) In Thousands, unless otherwise specified			3 Months Ended		9 Months Ended				1 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Springleaf	Sep. 30, 2011 Springleaf	Sep. 30, 2012 Springleaf	Sep. 30, 2011 Springleaf	Dec. 31, 2011 Springleaf	Jan. 31, 2011 Springleaf	Dec. 31, 2011 Newcastle	Sep. 30, 2012 Newcastle	Sep. 30, 2011 Newcastle	Sep. 30, 2012 Newcastle	Sep. 30, 2011 Newcastle	Sep. 30, 2012 Loan Subservicing Agreement	Dec. 31, 2011 Loan Subservicing Agreement	Jan. 31, 2011 Loan Subservicing Agreement Springleaf agreement	Jan. 31, 2011 Securitized Mortgage Loans Springleaf agreement	Sep. 30, 2012 Securitized Mortgage Loans Newcastle loan_portfolio
Schedule of Transactions with Affiliates of Fortress Investment Group LLC [Line Items]
Principal amount outstanding on loans managed and securitized								$ 4,400,000		$ 1,000,000	$ 1,100,000	$ 1,000,000	$ 1,100,000	$ 46,200,000	$ 53,700,000
Servicing revenue			2,400	2,500	7,500	7,400				1,300	1,400	3,900	4,400
Due from Affiliates	13,301	4,609	500		500		600
Number of Loan Portfolios Covered in Service Contract																3	2	2
Servicing fee, percentage of unpaid principal balance												0.50%
Percentage interest sold in excess cash flow									65.00%
Percentage interest retained of excess cash flow									35.00%
Excess spread financing at fair value	$ 255,484	$ 44,595

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Variable Interest Entities and Securitizations - Cash Flows from Securitization Trust (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Variable Interest Entities and Securitizations [Abstract]
Servicing Fees Received	$ 6,317	$ 5,870	$ 22,149	$ 21,221
Loan Repurchases	$ 0	$ 0	$ 0	$ 0

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Restricted Stock Information

The following table summarizes information about our restricted stock as of September 30, 2012 under the 2012 Plan (restricted stock in thousands):

	Shares	Grant Date Fair Value	Remaining Contractual Term
Restricted Stock outstanding at March 31, 2012	1,277	$14.00	2.4
Granted	6	$28.17	1.0
Forfeited	(32)
Restricted Stock outstanding at September 30, 2012	1,251
Restricted Stock unvested and expected to vest	1,223
Restricted Stock vested and payable at September 30, 2012	—

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Consolidated Statements of Shareholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Members' Units	Additional Paid-in Capital	Accumulated Other Comprehensive Income	Retained Earnings	Common Shares Held By Subsidiary
Balance at Dec. 31, 2010	$ 256,372		$ 255,301		$ 1,071
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	14,815		14,815
Distributions to parent	(4,348)		(4,348)
Tax related share-based settlement of units by members	(5,346)		(5,346)
Net income	20,887		20,887
Change in value of cash flow hedge	(1,071)		0		(1,071)
Balance at Dec. 31, 2011	281,309	0	281,309	0	0	0	0
Balance, shares at Dec. 31, 2011		0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Contributions from parent - FIF HE	12,764		12,764
LLC conversion of equity to common shares	0	700	(294,073)	293,373
LLC conversion of equity to common shares, shares		70,000,000
Common stock issuance	246,700	192		246,508
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures	0
Common stock issuance, shares		19,167,000
Share-based compensation	10,665			10,665
Excess tax benefit from share-based compensation	2,846			2,846
Tax related share-based settlement of units by members	(4,566)						(4,566)
Net income	141,528					141,528
Change in value of cash flow hedge	(423)				(423)
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax	423				423
Balance at Sep. 30, 2012	$ 691,246	$ 904	$ 0	$ 553,380	$ 0	$ 141,528	$ (4,566)
Balance, shares at Sep. 30, 2012		90,418,000

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Commitments and Contingencies - Loan and Other Commitments (Details) (Reverse Mortgages, USD $) In Billions, unless otherwise specified	Sep. 30, 2012	Jun. 30, 2012
Reverse Mortgages
Mortgage Servicing Rights [Line Items]
Principal amount outstanding on loans managed and securitized		$ 27.2
Unfunded advance obligations	$ 4.3

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Consolidated Statement of Cash Flows-Supplemental Disclosure

9 Months Ended

Sep. 30, 2012

Supplemental Cash Flow Elements [Abstract]

Consolidated Statement of Cash Flows-Supplemental Disclosure

Consolidated Statement of Cash Flows-Supplemental Disclosure

Total interest paid for the nine months ended September 30, 2012 and 2011 was approximately $78.2 million and $61.8 million, respectively. Income taxes paid for the nine months ended September 30, 2012 was $18.2 million. There were no income taxes paid for the nine months ended September 30, 2011.

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Mortgage Loans Held for Sale and Investment - Reverse Mortgage Interests (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Mortgage Loans Held for Sale and Investment [Abstract]
Reverse mortgage interests	$ 452,886	$ 0

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Fair Value Measurements - Measured on a Nonrecurring Basis (Details) (Fair Value, Measurements, Nonrecurring, USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2012		Sep. 30, 2012		Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Gains (Losses) Included in Earnings	$ 2,050		$ (1,705)		$ (6,833)
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
REO	0	[1]	0	[1]	0	[1]
Total assets	0		0		0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
REO	0	[1]	0	[1]	0	[1]
Total assets	0		0		0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
REO	3,193	[1]	3,193	[1]	3,668	[1]
Total assets	3,193		3,193		3,668
Total Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
REO	3,193	[1]	3,193	[1]	3,668	[1]
Total assets	3,193		3,193		3,668
Real Estate Owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total Gains (Losses) Included in Earnings	$ 2,050	[1]	$ (1,705)	[1]	$ (6,833)	[1]

[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

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Indebtedness - Notes Payable Summary (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Debt Instrument
Outstanding	$ 2,532,316	$ 873,179
Collateral Pledged	3,005,357	976,755
Servicing Segment | Notes Payable, Other | MBS Advance Financing Facility
Debt Instrument
Outstanding	178,455	179,904
Collateral Pledged	197,934	182,096
Servicing Segment | Notes Payable, Other | Securities Repurchase Facility (2011)
Debt Instrument
Outstanding	11,774	11,774
Collateral Pledged	55,603	55,603
Servicing Segment | Notes Payable, Other | MSR Note
Debt Instrument
Outstanding	6,015	10,180
Collateral Pledged	13,296	16,230
Servicing Segment | Notes Payable to Banks | ABS Advance Financing Facility (2010)
Debt Instrument
Outstanding	189,038	219,563
Collateral Pledged	228,898	249,499
Servicing Segment | Notes Payable to Banks | Agency Advance Financing Facility (2011-1)
Debt Instrument
Outstanding	159,945	25,011
Collateral Pledged	181,803	28,811
Servicing Segment | Notes Payable to Banks | AW Agency Advance Financing Facility (2012)
Debt Instrument
Outstanding	100,000	0
Collateral Pledged	124,551	0
Servicing Segment | Notes Payable to Banks | C ABS Advance Financing Facility (2012)
Debt Instrument
Outstanding	562,366	0
Collateral Pledged	692,635	0
Servicing Segment | Notes Payable to Banks | R ABS Advance Financing Facility (2012)
Debt Instrument
Outstanding	328,793	0
Collateral Pledged	392,360	0
Servicing Segment | Notes Payable to Banks | W ABS Advance Financing Facility (2012)
Debt Instrument
Outstanding	367,797	0
Collateral Pledged	454,402	0
Servicing Segment | Notes Payable to Banks | Reverse Participations Financing Facility
Debt Instrument
Outstanding	18,801	0
Collateral Pledged	21,298	0
Originations Segment | Notes Payable, Other | Warehouse Facility $150 Million
Debt Instrument
Outstanding	155,323	251,722
Collateral Pledged	162,705	265,083
Originations Segment | Notes Payable, Other | ASAP Plus Facility
Debt Instrument
Outstanding	29,443	104,858
Collateral Pledged	28,800	104,006
Originations Segment | Notes Payable to Banks | Warehouse Facility $375 Million
Debt Instrument
Outstanding	195,703	46,810
Collateral Pledged	211,820	51,040
Originations Segment | Notes Payable to Banks | Warehouse Facility $250 Million (2011)
Debt Instrument
Outstanding	141,204	7,310
Collateral Pledged	147,941	7,672
Originations Segment | Notes Payable to Banks | Warehouse Facility $100 Million (2009)
Debt Instrument
Outstanding	87,659	16,047
Collateral Pledged	$ 91,311	$ 16,715

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Disclosures Related to Transactions with Affiliates of Fortress Investment Group LLC

9 Months Ended

Sep. 30, 2012

Transactions With Affiliates of Fortress Investment Group LLC [Abstract]

Disclosures Related to Transactions with Affiliates of Fortress Investment Group LLC

Disclosures Related to Transactions with Affiliates of Fortress Investment Group LLC

Nationstar maintains a marketing agreement with Springleaf Home Equity, Inc., formerly known as American General Home Equity, Inc., Springleaf General Financial Services of Arkansas, Inc., formerly known as American General Financial Services of Arkansas, Inc. and MorEquity, Inc. (collectively “Springleaf”), each of which are indirectly owned by investment funds managed by affiliates of Fortress Investment Group LLC. Pursuant to this agreement, Nationstar markets mortgage originations products to customers of Springleaf, and is compensated by the originations fees of loans that Nationstar refinances.

Additionally, in January 2011, Nationstar entered into three agreements to act as the loan subservicer for Springleaf for a whole loan portfolio and two securitized loan portfolios totaling $4.4 billion for which Nationstar receives a monthly per loan subservicing fee and other performance incentive fees subject to the agreements with Springleaf. For the nine months ended September 30, 2012 and 2011, Nationstar recognized revenue of $7.5 million and $7.4 million, respectively, in additional servicing and other performance incentive fees related to these portfolios. For the three months ended September 30, 2012 and 2011, Nationstar recognized revenue of $2.4 million and $2.5 million , respectively, in additional servicing and other performance incentive fees related to these portfolios. At September 30, 2012 and December 31, 2011, Nationstar had an outstanding receivable from Springleaf of $0.5 million and $0.6 million, respectively, which was included as a component of accounts receivable.

Nationstar is the loan servicer for two securitized loan portfolios managed by Newcastle, which is managed by an affiliate of Fortress Investment Group LLC, for which Nationstar receives a monthly net servicing fee equal to 0.50% per annum on the unpaid principal balance of the portfolios, which was $1.0 billion and $1.1 billion, as of September 30, 2012 and 2011, respectively. For the three months ended September 30,2012 and 2011, Nationstar received servicing fees and other performance incentive fees of $1.3 million and $1.4 million, respectively. For the nine months ended September 30,2012 and 2011, Nationstar received servicing fees and other performance incentive fees of $3.9 million and $4.4 million, respectively.

Additionally, from December 2011 through September 2012, Nationstar entered into several agreements with Newcastle, where Nationstar sold to Newcastle the right to receive approximately 65% of the excess cash flow generated from certain acquired MSRs after receipt of a fixed basic servicing fee per loan. Nationstar will retain all ancillary income associated with servicing such MSRs and 35% of the excess cash flow after receipt of the fixed basic servicing fee. Nationstar will continue to be the servicer of the loans and provide all servicing and advancing functions for the portfolio. Newcastle will not have prior or ongoing obligations associated with this MSR portfolio. Furthermore, should Nationstar refinance any loan in such portfolio, subject to certain limitations, Nationstar will be required to transfer the new loan or a replacement loan of similar economic characteristics into the portfolio. The new or replacement loan will be governed by the same terms set forth in the agreement described above.

The fair value on the outstanding liability related to these agreements was $255.5 million at September 30, 2012.

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Indebtedness - Legacy Assets (Details) (USD $)	Nov. 30, 2009	Sep. 30, 2012 Legacy Asset [Member]	Dec. 31, 2011 Legacy Asset [Member]	Sep. 30, 2012 Nonrecourse Debt-Legacy Assets	Dec. 31, 2011 Nonrecourse Debt-Legacy Assets	Sep. 30, 2012 Secured Debt Nonrecourse Debt-Legacy Assets	Sep. 30, 2012 Securities Pledged as Collateral [Member]	Dec. 31, 2011 Securities Pledged as Collateral [Member]
Debt Instrument
Nonrecourse Debt Legacy Assets		$ 101,898,000	$ 112,490,000
Interest rate						7.50%
Unpaid principal balance on outstanding notes	222,000,000						344,200,000	373,100,000
Debt Instrument, Principal Amount Outstanding				$ 118,600,000	$ 130,800,000

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Indebtedness (Tables)

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Schedule of Notes Payable

A summary of the balances of notes payable for the dates indicated is presented below (in thousands).

	September 30, 2012				December 31, 2011
	Outstanding		Collateral Pledged		Outstanding		Collateral Pledged
Servicing Segment Notes Payable
MBS advance financing facility	$	178,455	$	197,934	$	179,904	$	182,096
Securities repurchase facility (2011)	11,774		55,603		11,774		55,603
2010-ABS advance financing facility	189,038		228,898		219,563		249,499
2011-1 Agency advance financing facility	159,945		181,803		25,011		28,811
MSR note	6,015		13,296		10,180		16,230
2012-AW Agency advance financing facility	100,000		124,551		—		—
2012-C ABS advance financing facility	562,366		692,635		—		—
2012-R ABS advance financing facility	328,793		392,360		—		—
2012-W ABS advance financing facility	367,797		454,402		—		—
Reverse participations financing facility	18,801		21,298		—		—
Originations Segment Notes Payable
$375 million warehouse facility	195,703		211,820		46,810		51,040
$150 million warehouse facility	155,323		162,705		251,722		265,083
$250 million warehouse facility (2011)	141,204		147,941		7,310		7,672
$100 million warehouse facility (2009)	87,659		91,311		16,047		16,715
ASAP+ facility	29,443		28,800		104,858		104,006
Total notes payable	$	2,532,316	$	3,005,357	$	873,179	$	976,755

A summary of the balances of unsecured senior notes is presented below (in thousands):

	September 30, 2012		December 31, 2011
$285 million face value, 10.875% interest rate payable semi-annually, due April 2015	$	281,307	$	280,199
$375 million face value, 9.625% interest rate payable semi-annually, due May 2019	380,366		—
$400 million face value, 7.875% interest rate payable semi-annually, due October 2020	$	400,750	$	—
Total	$	1,062,423	$	280,199

Schedule of Maturities of Long-term Debt

The expected maturities of Nationstar's senior unsecured notes based on contractual maturities are as follows (in thousands).

Year	Amount
2013	$	—
2014	—
2015	285,000
2016	—
2017	—
Thereafter	775,000
Total	$	1,060,000

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Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, provides a definition of fair value, establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements. The standard applies when GAAP requires or allows assets or liabilities to be measured at fair value and, therefore, does not expand the use of fair value in any new circumstance.

ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tiered fair value hierarchy based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs). In addition, ASC 820 requires an entity to consider all aspects of nonperformance risk, including its own credit standing, when measuring the fair value of a liability. Under ASC 820, related disclosures are segregated for assets and liabilities measured at fair value based on the level used within the hierarchy to determine their fair values.

The following describes the methods and assumptions used by Nationstar in estimating fair values:

Cash and Cash Equivalents, Restricted Cash – The carrying amount reported in the consolidated balance sheets approximates fair value.

Mortgage Loans Held for Sale – Nationstar originates mortgage loans in the U.S. that it intends to sell to Fannie Mae, Freddie Mac, and Ginnie Mae (collectively, the Agencies). Additionally, Nationstar holds mortgage loans that it intends to sell into the secondary markets via whole loan sales or securitizations. Nationstar measures newly originated prime residential mortgage loans held for sale at fair value.

Mortgage loans held for sale are typically pooled together and sold into certain exit markets, depending upon underlying attributes of the loan, such as agency eligibility, product type, interest rate, and credit quality. Mortgage loans held for sale are valued using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. As these prices are derived from quoted market prices, Nationstar classifies these valuations as Level 2 in the fair value disclosures.

Mortgage Loans Held for Investment, subject to nonrecourse debt – Legacy Assets – Nationstar determines the fair value of loans held for investment, subject to nonrecourse debt – Legacy Assets using internally developed valuation models. These valuation models estimate the exit price Nationstar expects to receive in the loan’s principal market. Although Nationstar utilizes and gives priority to observable market inputs such as interest rates and market spreads within these models, Nationstar typically is required to utilize internal inputs, such as prepayment speeds, credit losses, and discount rates. These internal inputs require the use of judgment by Nationstar and can have a significant impact on the determination of the loan’s fair value. As these prices are derived from a combination of internally developed valuation models and quoted market prices, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Mortgage Servicing Rights – Fair Value – Nationstar recognizes MSRs related to all existing residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting and for which the servicing rights are retained. Additionally, Nationstar may acquire the rights to service residential mortgage loans that do not relate to assets transferred by Nationstar through the purchase of these rights from third parties. Nationstar estimates the fair value of its forward MSRs using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds and discount rates. These assumptions are generated and applied based on collateral stratifications including product type, remittance type, geography, delinquency and coupon dispersion. These assumptions require the use of judgment by Nationstar and can have a significant impact on the determination of the MSR’s fair value. Periodically, management obtains third party valuations of a portion of the portfolio to assess the reasonableness of the fair value calculations provided by the cash flow model. Because of the nature of the valuation inputs, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Reverse Mortgage Interests – Nationstar’s reverse mortgage advances consist of fees paid to taxing authorities for borrowers' unpaid taxes and insurance, and payments made to borrowers for line of credit draws on reverse mortgages. These advances include due and payable advances, which are recovered upon the foreclosure and sale of the subject property, and defaulted advances that can be securitized. Nationstar estimates the fair value using a market approach by utilizing the fair value of securities backed by similar advances on reverse mortgage loans, adjusted for certain factors. Nationstar classifies these valuations as Level 2 in the fair value disclosures.

REO – Nationstar determines the fair value of REO properties through the use of third-party appraisals and broker price opinions, adjusted for estimated selling costs. Such estimated selling costs include realtor fees and other anticipated closing costs. These values are adjusted to take into account factors that could cause the actual liquidation value of foreclosed properties to be different than the appraised values. This valuation adjustment is based upon Nationstar’s historical experience with REO. REO is classified as Level 3 in the fair value disclosures.

Derivative Instruments – Nationstar enters into a variety of derivative financial instruments as part of its hedging strategy. The majority of these derivatives are exchange-traded or traded within highly active dealer markets. In order to determine the fair value of these instruments, Nationstar utilizes the exchange price or dealer market price for the particular derivative contract; therefore, these contracts are classified as Level 2. In addition, Nationstar enters into IRLCs with prospective borrowers. These commitments are carried at fair value based on fair value of related mortgage loans which is based on observable market data. Nationstar adjusts the outstanding IRLCs with prospective borrowers based on an expectation that it will be exercised and the loan will be funded. IRLCs are recorded in other assets in the consolidated balance sheets. These IRLCs are classified as Level 2 in the fair value disclosures.

Notes Payable – Notes payable consists of outstanding borrowing on Nationstar's warehouse and advance financing facilities. As the underlying warehouse and advance finance facilities bear interest at a rate that is periodically adjusted based on a market index, the carrying amount reported on the consolidated balance sheet approximates fair value. Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Unsecured Senior Notes – The fair value of unsecured senior notes is based on quoted market prices and is considered Level 1 from the market observable inputs used to determine fair value.

Nonrecourse Debt – Legacy Assets – Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. These prices are derived from a combination of internally developed valuation models and quoted market prices, and are classified as Level 3.

Excess Spread Financing – Nationstar estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions at September 30, 2012 being mortgage prepayment speeds of 12.8%, average life of 4.5 years, and discount rate of 14.4%. Changes in fair value to the excess spread financing are recorded as a component of service fee income in Nationstar's consolidated statement of operations. As these prices are derived from a combination of internally developed valuation models and quoted market prices based on the value of the underlying MSRs, Nationstar classifies these valuations as Level 3 in the fair value disclosures.

Participating Interest Financing – Nationstar estimates the fair value using a market approach by utilizing the fair value of securities backed by similar participating interests in reverse mortgage loans. Nationstar classifies these valuations as Level 2 in the fair value disclosures.

The estimated carrying amount and fair value of Nationstar’s financial instruments and other assets and liabilities measured at fair value on a recurring basis is as follows for the dates indicated (in thousands):

			September 30, 2012
			Recurring Fair Value Measurements
	Total Fair Value		Level 1		Level 2		Level 3
ASSETS
Mortgage loans held for sale(1)	$	703,214	$	—	$	703,214	$	—
Mortgage servicing rights – fair value(1)	592,692		—		—		592,692
Other assets:
IRLCs	112,628		—		112,628		—
Total assets	$	1,408,534	$	—	$	815,842	$	592,692
LIABILITIES
Derivative financial instruments
Interest rate swaps and caps	$	7,041	$	—	$	7,041	$	—
Interest rate swaps on ABS debt	1,632		—		1,632		—
Forward MBS trades	29,162		—		29,162		—
Excess spread financing (at fair value)	255,484		—		—		255,484
Total liabilities	$	293,319	$	—	$	37,835	$	255,484
			December 31, 2011
			Recurring Fair Value Measurements
	Total Fair Value		Level 1		Level 2		Level 3
ASSETS
Mortgage loans held for sale(1)	$	458,626	$	—	$	458,626	$	—
Mortgage servicing rights – fair value(1)	251,050		—		—		251,050
Other assets:
IRLCs	11,302		—		11,302		—
Total assets	$	720,978	$	—	$	469,928	$	251,050
LIABILITIES
Derivative financial instruments
Interest rate swaps and caps	$	6,540	$	—	$	6,540	$	—
Forward MBS trades	5,830		—		5,830		—
Excess spread financing (at fair value)	44,595		—		—		44,595
Total liabilities	$	56,965	$	—	$	12,370	$	44,595

(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.

The table below presents a reconciliation for all of Nationstar’s Level 3 assets and liabilities measured at fair value on a recurring basis for the dates indicated (in thousands):

	ASSETS			LIABILITIES
For the three months ended September 30, 2012	Mortgage servicing rights			Excess spread financing
Beginning balance	$	596,462		$	266,693
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Total gains or losses
Included in earnings	(22,430		)	(2,213		)
Included in other comprehensive income	—			—
Purchases, issuances, sales and settlements
Purchases	5,210			—
Issuances	13,450			(1,522		)
Sales	—			—
Settlements	—			(7,474		)
Ending balance	$	592,692		$	255,484

	ASSETS			LIABILITIES
For the nine months ended September 30, 2012	Mortgage servicing rights			Excess spread financing
Beginning balance	$	251,050		$	44,595
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Total gains or losses
Included in earnings	(42,810		)	5,050
Included in other comprehensive income	—			—
Purchases, issuances, sales and settlements
Purchases	346,874			—
Issuances	37,578			218,820
Sales	—			—
Settlements	—			(12,981		)
Ending balance	$	592,692		$	255,484

	ASSETS			LIABILITIES
For the year ending December 31, 2011	Mortgage servicing rights			Excess spread financing
Beginning balance	$	145,062		$	—
Transfers into Level 3	—			—
Transfers out of Level 3	—			—
Total gains or losses
Included in earnings	(39,000		)	3,060
Included in other comprehensive income	—			—
Purchases, issuances, sales and settlements
Purchases	102,800			—
Issuances	36,474			43,742
Sales	—			—
Settlements	5,714			(2,207		)
Ending balance	$	251,050		$	44,595

The table below presents the items which Nationstar measures at fair value on a nonrecurring basis (in thousands).

	Nonrecurring Fair Value Measurements						Total Estimated Fair Value		Total Gain (Loss) Included in Earnings
	Level 1		Level 2		Level 3
Three months ended September 30, 2012
Assets
REO(1)	$	—	$	—	$	3,193	$	3,193	$	2,050
Total assets	$	—	$	—	$	3,193	$	3,193	$	2,050
Nine months ended September 30, 2012
Assets
REO(1)	$	—	$	—	$	3,193	$	3,193	$	(1,705	)
Total assets	$	—	$	—	$	3,193	$	3,193	$	(1,705	)
Year ended December 31, 2011
Assets
REO(1)	$	—	$	—	$	3,668	$	3,668	$	(6,833	)
Total assets	$	—	$	—	$	3,668	$	3,668	$	(6,833	)

(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.

The table below presents a summary of the estimated carrying amount and fair value of Nationstar’s financial instruments (in thousands).

	September 30, 2012
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	430,815	$	430,815	$	—	$	—
Restricted cash	258,858		258,858		—		—
Mortgage loans held for sale	703,214		—		703,214		—
Mortgage loans held for investment, subject to nonrecourse debt – Legacy assets	238,178		—		—		221,852
Reverse mortgage interests	452,886		—		492,765		—
Derivative instruments	112,628		—		112,628		—
Financial liabilities:
Notes payable	2,532,216		—		—		2,532,216
Unsecured senior notes	1,062,423		1,129,060		—		—
Derivative financial instruments	37,835		—		37,835		—
Nonrecourse debt - Legacy assets	101,898		—		—		103,727
Excess spread financing	255,484		—		—		255,484
Participating interest financing	415,448		—		417,650		—
	December 31, 2011
	Carrying Amount		Fair Value
			Level 1		Level 2		Level 3
Financial assets:
Cash and cash equivalents	$	62,445	$	62,445	$	—	$	—
Restricted cash	71,499		71,499		—		—
Mortgage loans held for sale	458,626		—		458,626		—
Mortgage loans held for investment, subject to nonrecourse debt – Legacy assets	243,480		—		—		226,890
Derivative instruments	11,302		—		11,302		—
Financial liabilities:
Notes payable	873,179		—		—		873,179
Unsecured senior notes	280,199		282,150		—		—
Derivative financial instruments	12,370		—		12,370		—
Nonrecourse debt - Legacy assets	112,490		—		—		114,037
Excess spread financing	44,595		—		—		44,595