Advances and Other Receivables, Net

9 Months Ended

Sep. 30, 2020

3. Advances and Other Receivables, Net

Advances and other receivables, net, consists of the following:


Advances and Other Receivables, Net	September 30, 2020		December 31, 2019
Servicing advances, net of $92 and $131 purchase discount, respectively	$	746	$	970
Receivables from agencies, investors and prior servicers, net of $21 and $21 purchase discount, respectively	190		193
Reserves	(191)		(175)
Total advances and other receivables, net	$	745	$	988

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


	Three Months Ended September 30,				Nine Months Ended September 30,
Reserves for Advances and Other Receivables	2020		2019			2020		2019
Balance - beginning of period	$	216	$	98		$	168	$	47
Provision and other additions(1)	13		35			72		102
Write-offs	(38)		(3)			(49)		(19)
Balance - end of period	$	191	$	130		$	191	$	130

(1)The Company recorded a provision of $7 and $18 through the MTM adjustments in revenues - service related, net, in the consolidated statements of operations during the three months ended September 30, 2020 and 2019, respectively, and $20 and $46 during the nine months ended September 30, 2020 and 2019, 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

The following tables set forth the activities of the purchase discounts for advances and other receivables:


	Three Months Ended September 30, 2020				Three Months Ended September 30, 2019
Purchase Discount for Advances and Other Receivables	Servicing Advances		Receivables from Agencies, Investors and Prior Servicers		Servicing Advances		Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	117	$	21	$	156	$	48
Utilization of purchase discounts	(25)		—		(8)		—
Balance - end of period	$	92	$	21	$	148	$	48


	Nine Months Ended September 30, 2020				Nine Months Ended September 30, 2019
Purchase Discount for Advances and Other Receivables	Servicing Advances		Receivables from Agencies, Investors and Prior Servicers		Servicing Advances		Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	131	$	21	$	205	$	48
Addition from acquisition	—		—		19		—
Utilization of purchase discounts	(39)		—		(76)		—
Balance - end of period	$	92	$	21	$	148	$	48

Credit Loss for Advances and Other Receivables

As described in Note 1, Nature of Business and Basis of Presentation, advances and other receivables are within the scope of ASU 2016-13, and the Company modified its accounting policy regarding its assessment of reserves for credit-related losses in accordance with CECL framework. During the three and nine months ended September 30, 2020, the Company increased the CECL reserve by $13 and $27, respectively. As of September 30, 2020, the total CECL reserve was $44, of which $27 and $17 was recorded in reserves and purchase discount for advances and other receivables, respectively.

Based upon the Company’s application of ASU 2016-13, the Company determined that the credit-related risk associated with applicable financial instruments typically increase with the passage of time. The CECL reserve methodology considers these financial instruments collectible to a point in time of 39 months. Any projected remaining balance at the end of the collection period is considered a loss and factors into the overall CECL loss rate required.