Receivables Held for Sale (Tables)
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12 Months Ended |
Dec. 31, 2016 |
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| Receivables [Abstract] |
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| Summary of Real Estate Secured Receivables Held for Sale |
Receivables held for sale, which are carried at the lower of amortized cost or fair value, are comprised of the following: | | | | | | | | | | December 31, 2016 | | December 31, 2015 | | (in millions) | Real estate secured receivables held for sale: | | | | First lien | $ | 4,699 |
| | $ | 8,110 |
| Second lien | 975 |
| | 155 |
| Total real estate secured receivables held for sale(1) | $ | 5,674 |
| | $ | 8,265 |
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| | (1) | At December 31, 2016, receivables held for sale includes $750 million of closed-end real estate secured receivables which are part of a collateralized funding transaction. These receivables will be sold when they are contractually released as collateral under the public trust and become available for sale. See Note 17, "Variable Interest Entities," for further discussion of our collateralized funding transactions. |
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| Schedule of Receivables Sold to Third-party Investors |
The following table summarizes receivables sold to third-party investors during the periods presented. | | | | | | | | | | | | | Year Ended December 31, | 2016 | | 2015 | | 2014 | | (in millions) | Unpaid principal balance at the time of sale(1) | $ | 10,130 |
| | $ | 2,591 |
| | $ | 2,927 |
| | | | | | | Aggregate cash consideration received | $ | 9,663 |
| | $ | 2,022 |
| | $ | 2,242 |
| Aggregate carrying value at the time of sale(1) | 8,973 |
| | 1,995 |
| | 2,152 |
| Transaction costs | 57 |
| | 15 |
| | 27 |
| Gain on sale of real estate secured receivables | $ | 633 |
| | $ | 12 |
| | $ | 63 |
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| | (1) | For the year ended December 31, 2016, amount includes receivables with an unpaid principal balance of $4,478 million (aggregate carrying value of $4,040 million) that were sold during the fourth quarter of 2016. |
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| Summary of Activity in Receivables Held for Sale |
The following table summarizes the activity in receivables held for sale during the years ended December 31, 2016, 2015 and 2014: | | | | | | | | | | | | | Year Ended December 31, | 2016 | | 2015 | | 2014 | | (in millions) | Real estate secured receivables held for sale at beginning of period | $ | 8,265 |
| | $ | 860 |
| | $ | 2,047 |
| Transfer of real estate secured receivables into held for sale at the lower of amortized cost or fair value(1)(2) | 7,574 |
| | 10,327 |
| | 909 |
| Real estate secured receivable sales | (8,973 | ) | | (1,995 | ) | | (2,152 | ) | Lower of amortized cost or fair value adjustment on real estate secured receivables held for sale | (201 | ) | | (130 | ) | | 314 |
| Carrying value of real estate secured receivables held for sale transferred to REO | (54 | ) | | (93 | ) | | (182 | ) | Carrying value of real estate secured receivables held for sale settled through short sale | (33 | ) | | (55 | ) | | (61 | ) | Change in real estate secured receivable balance, including collections | (904 | ) | | (649 | ) | | 30 |
| Transfer of real estate secured receivables into held for investment at the lower of amortized cost or fair value(3) | — |
| | — |
| | (45 | ) | Real estate secured receivables held for sale at end of period(4) | $ | 5,674 |
| | $ | 8,265 |
| | $ | 860 |
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| | (1) | The initial lower of amortized cost or fair value adjustment on receivables transferred into held for sale during the years ended December 31, 2016, 2015 and 2014 totaled $587 million, $234 million and $113 million, respectively. |
| | (2) | Amount includes any accrued interest associated with the receivable. |
| | (3) | During 2014, we identified a small number of receivables held for sale which did not meet our criteria to be classified as held for sale at that time. As a result, we transferred these receivables to held for investment at the lower of amortized cost or fair value. |
| | (4) | Real estate secured receivables held for sale in the table above are presented net of the valuation allowance. |
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| Allowance for Credit Losses on Financing Receivables |
The following table provides a rollforward of our valuation allowance for the years ended December 31, 2016, 2015 and 2014. See Note 18, "Fair Value Measurements," for a discussion of the factors impacting the fair value of these receivables. | | | | | | | | | | | | | Year Ended December 31, | 2016 | | 2015 | | 2014 | | (in millions) | Balance at beginning of period | $ | 13 |
| | $ | — |
| | $ | 329 |
| Initial valuation allowance for real estate secured receivables transferred to held for sale during the period | 11 |
| | — |
| | 113 |
| Increase in valuation allowance resulting from changes in fair value | 263 |
| | 155 |
| | (457 | ) | Change in valuation allowance for receivables sold | (113 | ) | | (142 | ) | | 14 |
| Change in valuation allowance for collections, charged-off, transferred to REO or short sale | — |
| | — |
| | 1 |
| Balance at end of period | $ | 174 |
| | $ | 13 |
| | $ | — |
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| Summary of Components of Cumulative Lower of Amortized Cost or Fair Value Adjustment |
The following table summarizes the components of the lower of amortized cost or fair value adjustment during the years ended December 31, 2016, 2015 and 2014: | | | | | | | | | | | | | | Lower of Amortized Cost or Fair Value Adjustments Associated With | | | (Income)/Expense | Fair Value | | Settlement(3) | | Total | | (in millions) | Year Ended December 31, 2016: | | | | | | Lower of amortized cost or fair value adjustments recorded as a component of: | | | | | | Provision for credit losses(1) | $ | 576 |
| | $ | — |
| | $ | 576 |
| Other revenues: | | | | | | Initial lower of amortized cost or fair value adjustment(2) | 11 |
| | — |
| | 11 |
| Subsequent to initial transfer to held for sale | 263 |
| | (62 | ) | | 201 |
| Lower of amortized cost or fair value adjustment recorded through other revenues | 274 |
| | (62 | ) | | 212 |
| Total lower of amortized cost or fair value adjustment | $ | 850 |
| | $ | (62 | ) | | $ | 788 |
| Year Ended December 31, 2015: | | | | | | Lower of amortized cost or fair value adjustments recorded as a component of: | | | | | | Provision for credit losses(1) | $ | 234 |
| | $ | — |
| | $ | 234 |
| Other revenues: | | | | | | Initial lower of amortized cost or fair value adjustment(2) | — |
| | — |
| | — |
| Subsequent to initial transfer to held for sale | 155 |
| | (25 | ) | | 130 |
| Lower of amortized cost or fair value adjustment recorded through other revenues | 155 |
| | (25 | ) | | 130 |
| Total lower of amortized cost or fair value adjustment | $ | 389 |
| | $ | (25 | ) | | $ | 364 |
| Year Ended December 31, 2014: | | | | | | Lower of amortized cost or fair value adjustments recorded as a component of: | | | | | | Provision for credit losses(1) | $ | — |
| | $ | — |
| | $ | — |
| Other revenues: | | | | | | Initial lower of amortized cost or fair value adjustment(2) | 113 |
| | — |
| | 113 |
| Subsequent to initial transfer to held for sale | (457 | ) | | 143 |
| | (314 | ) | Lower of amortized cost or fair value adjustment recorded through other revenues | (344 | ) | | 143 |
| | (201 | ) | Total lower of amortized cost or fair value adjustment | $ | (344 | ) | | $ | 143 |
| | $ | (201 | ) |
| | (1) | Represents the portion of the initial lower of amortized cost or fair value adjustment attributable to credit factors which are recorded as provision for credit losses in the consolidated statement of income (loss). |
| | (2) | Represents the portion of the initial lower of amortized cost or fair value adjustment attributable to non-credit factors which are recorded as a component of total other revenues in the consolidated statement income (loss) as it reflects the impact on value caused by current marketplace conditions including changes in interest rates. |
| | (3) | Reflects receivable settlements due to either receivable payoffs (including short sales) or transfers of receivables to REO and reflects either a reversal of the non-credit fair value adjustment previously recorded on these receivables or an additional lower of amortized cost or fair value adjustment required at the time of settlement. |
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