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Reverse Mortgage Interests, Net
 9 Months Ended
Sep. 30, 2020
Reverse Mortgage Interests [Abstract]  
Reverse Mortgage Interests, Net
4. Reverse Mortgage Interests, Net

Reverse mortgage interests, net, consists of the following:
Reverse Mortgage Interests, NetSeptember 30, 2020December 31, 2019
Participating interests in HECM mortgage-backed securities (“HMBS”)$3,663 $4,282 
Other interests securitized1,002 994 
Unsecuritized interests920 1,117 
Purchase discount, net(125)(114)
Total reverse mortgage interests, net$5,460 $6,279 

Participating Interests in HMBS
The Company does not originate reverse mortgages, but during the nine months ended September 30, 2020 and 2019, a total of $134 and $211 in UPB associated with new draws on existing loans was transferred to GNMA and securitized by the Company, respectively.

In March 2019, the Company entered into an agreement with Fannie Mae for the transfer of reverse mortgage loans. As a result, $61 was transferred from Fannie Mae and securitized into GNMA HMBS during the nine months ended September 30, 2019. There was no such activity during the nine months ended September 30, 2020.
Other Interests Securitized
The reverse mortgage interests under other interest securitized have been transferred to private securitization trusts and are accounted for as a secured borrowing. During the nine months ended September 30, 2020, the Company securitized a total of $516 UPB through Trust 2020-1 and a total of $337 UPB from Trust 2018-2 and Trust 2018-3 was called and the related debt was extinguished. During the nine months ended September 30, 2019, the Company securitized a total of $398 UPB through Trust 2019-1 and a total of $249 UPB from Trust 2017-2 was called and the related debt was extinguished. The Company sold $20 UPB of Trust 2018-3 during the nine months ended September 30, 2019. Refer to Other Nonrecourse Debt in Note 9, Indebtedness for additional information.

Unsecuritized Interests
Unsecuritized interests in reverse mortgages consist of the following:
Unsecuritized interestsSeptember 30, 2020December 31, 2019
Repurchased HECM loans (exceeds 98% of their Max Claim Amount (“MCA”))$634 $789 
HECM related receivables(1)
213 250 
Funded borrower draws not yet securitized56 64 
Real estate owned (“REO”) related receivables17 14 
Total unsecuritized interests
$920 $1,117 

(1)HECM related receivables consist primarily of receivables from FNMA for corporate advances and service fees and claims receivables from the U.S. Department of Housing and Urban Development (“HUD”) on reverse mortgage interests.

The Company repurchased a total of $912 and $2,132 of HECM loans out of GNMA HMBS securitizations during the nine months ended September 30, 2020 and 2019, respectively, of which $244 and $561 were subsequently assigned to a third party in accordance with applicable servicing agreements, respectively. To the extent a loan is not subject to applicable servicing agreements and assigned to a third party, the loan is either subject to assignment to HUD, per contractual obligations with GNMA, liquidated via a payoff from the borrower or liquidated via a foreclosure according to the terms of the underlying mortgage. The Company assigned a total of $630 and $1,458 of HECM loans to HUD during the nine months ended September 30, 2020 and 2019, respectively.

Purchase Discount, net, for Reverse Mortgage Interests
The following table sets forth the activities of the purchase discounts, net, for reverse mortgage interests:
Three Months Ended September 30,Nine Months Ended September 30,
Purchase discount, net, for reverse mortgage interests(1)
2020201920202019
Balance - beginning of period$(127)$(163)$(114)$(164)
Adjustments(2)
— — — (24)
Utilization of purchase discounts(3)
8 40 27 80 
Amortization, net of accretion(6)(1)(38)(16)
Balance - end of period$(125)$(124)$(125)$(124)

(1)Net position as certain items are in a premium/(discount) position, based on the characteristics of underlying tranches of loans.
(2)Adjustments during the nine months ended September 30, 2019 due to revised cost to service assumption utilized in the valuation of reverse mortgage assets and liabilities acquired from the Merger.
(3)Utilization of purchase discounts on liquidated loans, for which the remaining receivable was written off.

Credit Loss for Reverse Mortgage Interests
As described in Note 1, Nature of Business and Basis of Presentation, reverse mortgage interests are within the scope of ASU 2016-13, requiring an assessment of reserves regarding credit-related losses in accordance with the CECL framework. Upon applying ASU 2016-13, the Company determined that credit-related losses are immaterial given the government insured nature of the HECM loan product. Any expected credit-related losses are contemplated in the Company’s existing reserve methodology due to the nature of this financial instrument. Accordingly, no cumulative effect adjustment was required upon adoption of ASU 2016-13 on January 1, 2020 and no additional CECL reserve was recorded as of September 30, 2020.
The credit-risk characteristics of reverse mortgage interests do not vary with time as the financial instruments have no contractual life or financial profile as the primary counterparty is the government agency insuring the loans.

Reverse Mortgage Interest Income
Total interest earned on the Company’s reverse mortgage interests was $41 and $74 during the three months ended September 30, 2020 and 2019, respectively, and $158 and $241 during the nine months ended September 30, 2020 and 2019, respectively.