Advances and Other Receivables, Net

3 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Advances and Other Receivables, Net

4. Advances and Other Receivables, Net

Advances and other receivables, net consists of the following.

	Successor
	March 31, 2019			December 31, 2018
Servicing advances, net of $169and $205 discount, respectively	$	947		$	952
Receivables from agencies, investors and prior servicers, net of $48 and $48 discount, respectively	271			289
Reserves	(71		)	(47		)
Total advances and other receivables, net	$	1,147		$	1,194

The Company, as loan servicer, is contractually responsible to advance funds on behalf of the borrower and investor primarily for loan principal and interest, property taxes and hazard insurance and foreclosure costs. Advances are primarily recovered through reimbursement from the investor, proceeds from sale of loan collateral or mortgage insurance claims. Reserves for advances and other receivables on loans transferred out of the MSR portfolio are established within advances and other receivables.

The Company estimates and records an asset for estimated recoveries to be collected from prior servicers for their respective portion of the losses associated with the underlying loans that were not serviced in accordance with established guidelines. Receivables from prior servicers totaled $94 and $94 for Company’s forward loan portfolio at March 31, 2019 and December 31, 2018, respectively.

The following table sets forth the activities of the reserves for advances and other receivables.

	Successor			Predecessor
Reserves for Advances and Other Receivables	Three Months Ended March 31, 2019			Three Months Ended March 31, 2018
Balance - beginning of period	$	47		$	284
Provision and other additions(1)	30			22
Write-offs	(6		)	(29		)
Balance - end of period	$	71		$	277

⁽¹⁾  The Company and the Predecessor recorded a provision of $11 and $12 through the MTM adjustments in service related revenues for the three months ended March 31, 2019 and 2018, respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate.

Purchase Discount for Advances and Other Receivables

In connection with the acquisition of Pacific Union in February 2019, the Company recorded the acquired advances and other receivables at estimated fair value as of the acquisition date, which resulted in a preliminary purchase discount of $19. Refer to Note 2, Acquisitions for discussion of the Pacific Union acquisition. In 2018, the Company recorded the acquired advances and other receivables in connection with the Merger at estimated fair value as of the acquisition date, which resulted in a preliminary purchase discount of $302.

As of March 31, 2019, a total of $104 purchase discount has been utilized with $217 purchase discount remaining.

The following table sets forth the activities of the purchase discounts for advances and other receivables.

	Successor
	Three Months Ended March 31, 2019
Purchase Discounts	Servicing Advances			Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	205		$	48
Addition from acquisition	19			—
Utilization of purchase discounts	(55		)	—
Balance - end of period	$	169		$	48