TWO Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Variable Interest Entities

Variable Interest Entities

9 Months Ended

Sep. 30, 2019

Variable Interest Entities [Abstract]

The Issuer Trust that was formed for the purpose of financing MSR through securitization (see discussion in Note 2 - Basis of Presentation and Significant Accounting Policies) is considered a VIE for financial reporting purposes and, thus, was reviewed for consolidation under the applicable consolidation guidance. As the Company has both the power to direct the activities of the Issuer Trust that most significantly impact the entity’s performance, and the obligation to absorb losses or the right to receive benefits of the entity that could be significant, the Company consolidates the trust. Additionally, in accordance with arrangements entered into in connection with the securitization transaction, the Company has direct financial obligations payable to the Issuer Trust, which, in turn, support the Issuer Trust’s obligations to noteholders under the securitization transaction.

The following table presents a summary of the assets and liabilities of all consolidated trusts as reported on the condensed consolidated balance sheets as of September 30, 2019 and December 31, 2018:



(in thousands)	September 30, 2019		December 31, 2018
Note receivable ⁽¹⁾	$	394,235	$	—
Cash and cash equivalents	200		—
Accrued interest receivable ⁽¹⁾	321		—
Total Assets	$	394,756	$	—
Term notes payable	$	394,235	$	—
Accrued interest payable	321		—
Other liabilities	200		—
Total Liabilities	$	394,756	$	—

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(1)

Receivables due from a wholly owned subsidiary of the Company to the Issuer Trust are eliminated in consolidation in accordance with U.S. GAAP.