Advances and Other Receivables

9 Months Ended

Sep. 30, 2023

5. Advances and Other Receivables

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


Advances and Other Receivables, Net	September 30, 2023		December 31, 2022
Servicing advances, net of $12 purchase discount	$	813	$	1,053
Receivables from agencies, investors and prior servicers, net of $7 purchase discount	109		103
Reserves	(164)		(137)
Total advances and other receivables, net	$	758	$	1,019

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	2023		2022		2023		2022
Balance - beginning of period	$	156	$	150	$	137	$	167
Provision	8		10		26		22
Reclassifications(1)	11		9		27		31
Write-offs	(11)		(26)		(26)		(77)
Balance - end of period	$	164	$	143	$	164	$	143

(1)Reclassifications represent 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,
	2023				2022
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	$	9	$	7	$	14	$	8
Addition from acquisition(1)	4		—		—		—
Utilization of purchase discounts	(1)		—		(2)		(1)

Balance - end of period	$	12	$	7	$	12	$	7


	Nine Months Ended September 30,
	2023				2022
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	$	12	$	7	$	19	$	12
Addition from acquisition(1)	4		—		—		—
Utilization of purchase discounts	(4)		—		(7)		(5)
Balance - end of period	$	12	$	7	$	12	$	7

(1)In connection with the acquisition of Home Point during the third quarter of 2023, the Company recorded the acquired advances and other receivables at estimate fair value as of the acquisition date, which resulted in a purchase discount of $4. Refer to Note 2, Acquisitions, for discussion of the Home Point acquisition.

Credit Loss for Advances and Other Receivables

As of September 30, 2023, the total current expected credit loss (“CECL”) reserve was $36, of which $29 and $7 were recorded in reserves and purchase discount for advances and other receivables, respectively. As of September 30, 2022, the total CECL reserve was $34, of which $27 and $7 were recorded in reserves and purchase discount for advances and other receivables, respectively. There were no material changes to CECL reserves during the three and nine months ended September 30, 2023 and 2022.

The Company determined that the credit-related risk associated with applicable financial instruments typically increases 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.