Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2018	Aug. 03, 2018
Document and Entity Information
Entity Registrant Name	IMPAC MORTGAGE HOLDINGS INC
Entity Central Index Key	0001000298
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		21,047,589
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 32,960	$ 33,223
Restricted cash	4,606	5,876
Mortgage loans held-for-sale	481,291	568,781
Finance receivables	37,215	41,777
Mortgage servicing rights	180,733	154,405
Securitized mortgage trust assets	3,409,477	3,670,550
Goodwill	29,925	104,587
Intangible assets, net	6,033	21,582
Loans eligible for repurchase from Ginnie Mae	60,488	47,697
Other assets	23,494	33,222
Total assets	4,266,222	4,681,700
LIABILITIES
Warehouse borrowings	482,546	575,363
MSR financings	62,000	35,133
Convertible notes, net	24,979	24,974
Long-term debt	45,787	44,982
Securitized mortgage trust liabilities	3,393,721	3,653,265
Liability for loans eligible for repurchase from Ginnie Mae	60,488	47,697
Contingent consideration		554
Other liabilities	33,952	34,585
Total liabilities	4,103,473	4,416,553
Commitments and contingencies (See Note 11)
STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value; 200,000,000 shares authorized; 21,026,392 and 20,949,679 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively	210	209
Additional paid-in capital	1,234,622	1,233,704
Accumulated other comprehensive earnings, net of tax	25,053
Net accumulated deficit:
Cumulative dividends declared	(822,520)	(822,520)
Retained deficit	(274,637)	(146,267)
Net accumulated deficit	(1,097,157)	(968,787)
Total stockholders’ equity	162,749	265,147
Total liabilities and stockholders’ equity	4,266,222	4,681,700
Series A-1 junior participating preferred stock
STOCKHOLDERS’ EQUITY
Preferred stock
Series B 9.375% redeemable preferred stock
STOCKHOLDERS’ EQUITY
Preferred stock	7	7
Series C 9.125% redeemable preferred stock
STOCKHOLDERS’ EQUITY
Preferred stock	$ 14	$ 14

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Preferred stock, liquidation value (in dollars)		$ 51,800
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	21,026,392	20,949,679
Common stock, shares outstanding	21,026,392	20,949,679
Series A-1 junior participating preferred stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	2,500,000	2,500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series B 9.375% redeemable preferred stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, dividend rate (as a percent)	9.375%	9.375%
Preferred stock, liquidation value (in dollars)	$ 30,290	$ 30,290
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	665,592	665,592
Preferred stock, shares outstanding	665,592	665,592
Series C 9.125% redeemable preferred stock
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, dividend rate (as a percent)	9.125%	9.125%
Preferred stock, liquidation value (in dollars)	$ 35,127	$ 35,127
Preferred stock, shares authorized	5,500,000	5,500,000
Preferred stock, shares issued	1,405,086	1,405,086
Preferred stock, shares outstanding	1,405,086	1,405,086

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) EARNINGS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues:
Gain on sale of loans, net	$ 18,741	$ 36,806	$ 40,223	$ 74,126
Servicing fees, net	9,861	7,764	19,324	15,083
Gain (loss) on mortgage servicing rights, net	167	(6,669)	7,872	(7,646)
Real estate services fees, net	1,038	1,504	2,423	3,137
Other	116	228	207	275
Total revenues	29,923	39,633	70,049	84,975
Expenses:
Personnel expense	16,678	21,373	34,421	46,291
Business promotion	9,000	10,110	18,730	20,341
General, administrative and other	10,846	8,324	19,122	16,348
Intangible asset impairment	13,450		13,450
Goodwill impairment	74,662		74,662
Accretion of contingent consideration		707		1,552
Change in fair value of contingent consideration		(6,793)		(6,254)
Total expenses	124,636	33,721	160,385	78,278
Operating (loss) income	(94,713)	5,912	(90,336)	6,697
Other income (expense):
Interest income	49,064	60,573	99,215	122,157
Interest expense	(48,518)	(59,475)	(97,648)	(120,614)
Loss on extinguishment of debt		(1,265)		(1,265)
Change in fair value of long-term debt	258	(265)	1,481	(2,761)
Change in fair value of net trust assets, including trust REO gains	217	2,005	(1,921)	8,324
Total other income, net	1,021	1,573	1,127	5,841
(Loss) earnings before income taxes	(93,692)	7,485	(89,209)	12,538
Income tax expense	3,706	1,045	4,316	1,471
Net (loss) earnings	(97,398)	6,440	(93,525)	11,067
Other comprehensive (loss) earnings:
Change in fair value of instrument specific credit risk	(526)		(1,965)
Total comprehensive (loss) earnings	$ (97,924)	$ 6,440	$ (95,490)	$ 11,067
(Loss) earnings per common share:
Basic (in dollars per share)	$ (4.65)	$ 0.33	$ (4.46)	$ 0.62
Diluted (in dollars per share)	$ (4.65)	$ 0.32	$ (4.46)	$ 0.62
Real Estate
Revenues:
Real estate services fees, net	$ 1,038	$ 1,504	$ 2,423	$ 3,137

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY - 6 months ended Jun. 30, 2018 - USD ($) $ in Thousands	Preferred Stock	Common Stock	Additional Paid-In Capital	Cumulative Dividends Declared	Retained Deficit	Accumulated Other Comprehensive Earnings	Total
Balance at Dec. 31, 2017	$ 21	$ 209	$ 1,233,704	$ (822,520)	$ (146,267)		$ 265,147
Balance (in shares) at Dec. 31, 2017	2,070,678	20,949,679
Increase (Decrease) in Stockholders' Equity
Proceeds and tax benefit from exercise of stock options		$ 1	319				320
Proceeds and tax benefit from exercise of stock options (in shares)		76,713
Stock based compensation			599				599
Other comprehensive earnings						$ (1,965)	(1,965)
Net loss					(93,525)		(93,525)
Balance at Jun. 30, 2018	$ 21	$ 210	$ 1,234,622	$ (822,520)	(274,637)	25,053	162,749
Balance (in shares) at Jun. 30, 2018	2,070,678	21,026,392
Increase (Decrease) in Stockholders' Equity
Reclassification and adjustment related to adoption of new standard \| ASU 2016-01					(27,018)	$ 27,018
Reclassification and adjustment related to adoption of new standard \| ASU 2016-16					$ (7,827)		$ (7,827)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) earnings	$ (97,398)	$ 6,440	$ (93,525)	$ 11,067
Loss on sale of mortgage servicing rights		(331)		82
Change in fair value of mortgage servicing rights	(393)	7,739	(9,572)	8,861
Loss on extinguishment of debt		1,265		1,265
Gain on sale of mortgage loans			(47,766)	(62,202)
Change in fair value of mortgage loans held-for-sale			5,282	(9,598)
Change in fair value of derivatives lending, net			419	(669)
Provision (recovery) for repurchases			1,594	(1,574)
Origination of mortgage loans held-for-sale			(2,354,373)	(3,373,606)
Sale and principal reduction on mortgage loans held-for-sale			2,467,591	3,217,330
Gains from REO	1,590	(4,218)	(603)	(5,751)
Change in fair value of net trust assets, excluding REO			2,524	(2,573)
Change in fair value of long-term debt	(258)	265	(1,481)	2,761
Accretion of interest income and expense			20,544	48,114
Amortization of intangible and other assets			2,385	2,384
Accretion of contingent consideration		707		1,552
Change in fair value of contingent consideration		(6,793)		(6,254)
Amortization of debt issuance costs and discount on note payable			41	124
Stock-based compensation			599	979
Impairment of deferred charge				520
Impairment of goodwill	74,662		74,662
Impairment of intangible assets	13,450		13,450
Excess tax benefit from share based compensation				12
Change in deferred tax assets, net			4,315
Net change in other assets			(1,743)	(2,170)
Net change in other liabilities			(2,890)	(11,966)
Net cash provided by (used in) operating activities			81,453	(181,312)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net change in securitized mortgage collateral			247,374	366,469
Proceeds from the sale of mortgage servicing rights				813
Purchase of mortgage servicing rights				(5,619)
Finance receivable advances to customers			(350,264)	(434,567)
Repayments of finance receivables			354,826	438,788
Net change in mortgages held-for-investment				1
Purchase of premises and equipment			(530)	(399)
Proceeds from the sale of REO			11,207	15,924
Net cash provided by investing activities			262,613	381,410
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock				55,454
Repayment of MSR financing			(40,133)	(25,000)
Borrowings under MSR financing			67,000	35,133
Repayment of warehouse borrowings			(2,355,268)	(3,073,584)
Borrowings under warehouse agreements			2,262,451	3,265,581
Repayment of term financing				(30,000)
Payment of acquisition related contingent consideration			(554)	(11,444)
Repayment of securitized mortgage borrowings			(279,196)	(425,930)
Principal payments on capital lease			(106)	(174)
Debt issuance costs				(100)
Tax payments on stock based compensation awards			(113)	(103)
Proceeds from exercise of stock options			320	296
Net cash used in financing activities			(345,599)	(209,871)
Net change in cash, cash equivalents and restricted cash			(1,533)	(9,773)
Cash, cash equivalents and restricted cash at beginning of period			39,099	46,067	$ 46,067
Cash, cash equivalents and restricted cash at end of period	$ 37,566	$ 36,294	37,566	36,294	$ 39,099
NON-CASH TRANSACTIONS:
Transfer of securitized mortgage collateral to real estate owned			10,502	10,042
Mortgage servicing rights retained from loan sales and issuance of mortgage backed securities			$ 16,756	$ 24,873

Summary of Business and Financial Statement Presentation	6 Months Ended
	Jun. 30, 2018
Summary of Business and Financial Statement Presentation
Summary of Business and Financial Statement Presentation	IMPAC MORTGAGE HOLDINGS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except share and per share data or as otherwise indicated) Note 1.—Summary of Business and Financial Statement Presentation Business Summary Impac Mortgage Holdings, Inc. (the Company or IMH) is a Maryland corporation incorporated in August 1995 and has the following direct and indirect wholly-owned subsidiaries: Integrated Real Estate Service Corporation (IRES), Impac Mortgage Corp. (IMC), IMH Assets Corp. (IMH Assets) and Impac Funding Corporation (IFC). The Company’s operations include the mortgage lending operations and real estate services conducted by IRES and IMC and the long-term mortgage portfolio (residual interests in securitizations reflected as net trust assets and liabilities in the consolidated balance sheets) conducted by IMH. IMC’s mortgage lending operations include the activities of CashCall Mortgage (CCM). Financial Statement Presentation The accompanying unaudited consolidated financial statements of IMH and its subsidiaries (as defined above) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for the six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. These interim period condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the United States Securities and Exchange Commission (SEC). All significant intercompany balances and transactions have been eliminated in consolidation. In addition, certain amounts in the prior periods’ consolidated financial statements have been reclassified to conform to the current period presentation. Management has made a number of material estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. Additionally, other items affected by such estimates and assumptions include the valuation of trust assets and trust liabilities, contingencies, the estimated obligation of repurchase liabilities related to sold loans, the valuation of long-term debt, mortgage servicing rights, goodwill and intangible asset valuation and impairment, mortgage loans held-for-sale and derivative instruments, including interest rate lock commitments (IRLC). Actual results could differ from those estimates and assumptions. Recent Accounting Pronouncements Accounting Standards Update (ASU) No. 2014-09, 2015-04, 2016-08, 2016-10, 2016-12, 2016-20, 2017-13 and 2017-14, collectively implemented as Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), “Revenue from Contracts with Customers (Topic 606)”, provides guidance for revenue recognition. This ASC’s core principle requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects consideration to which the company expects to be entitled in exchange for those goods or services. The standard also clarifies the principal versus agent considerations, providing the evaluation must focus on whether the entity has control of the goods or services before they are transferred to the customer. The new standard permits the use of either the modified retrospective or full retrospective transition method. The Company's revenue is primarily generated from loan originations, loan servicing and real estate services. Origination revenue is comprised of fee income earned at origination of a loan, interest income earned for the period the loans are held and gain on sale on loans upon disposition of the loan. Servicing revenue is comprised of servicing fees and other ancillary fees in connection with our servicing activities. Real estate services revenue is comprised of income earned from various real estate services and support such as loss mitigation, loan modification, surveillance and disposition and monitoring services. The Company performed a review of the guidance as compared to current accounting policies and have evaluated all services rendered to customers as well as underlying contracts to determine the impact of this standard to the Company’s revenue recognition process. The majority of services rendered by the Company in connection with loan originations, loan servicing and the long-term mortgage portfolio are not within the scope of FASB ASC 606. However, the Company identified real estate services revenues that were within the scope of FASB ASC 606 and the impact upon adoption was not materially different from the previous revenue recognition processes. The Company adopted this guidance on January 1, 2018, and the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." The amendments in ASU 2016-01, among other things, requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables); requires separate presentation in other comprehensive income for the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The update is effective for interim and annual reporting periods beginning after December 15, 2017 on a modified retrospective basis, using a cumulative-effect adjustment to the balance sheet as of the beginning of the year adopted. The Company adopted this guidance on January 1, 2018, which resulted in a $27.0 million reclass, net of tax, between opening retained earnings and other comprehensive earnings (loss) within stockholders’ equity. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The update amends the guidance in Accounting Standards Codification 230, Statement of Cash Flows, and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. In addition, in November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash (ASU 2016-18). This ASU clarifies certain existing principles in FASB ASC 230, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. These ASUs were effective for the Company’s fiscal year beginning after December 15, 2017 and subsequent interim periods. The Company adopted this guidance retrospectively on January 1, 2018. The adoption of this ASU did not have a material impact on the consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” This ASU requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. The adoption of this standard was applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company adopted this guidance on January 1, 2018, which resulted in a $7.8 million cumulative effect adjustment to opening retained earnings. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment. ASU 2017-04 amends Topic 350 to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This update requires the performance of an annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those periods, with early adoption permitted. The Company early adopted this guidance prospectively on June 30, 2018. See Note 4.—Goodwill and Intangible Assets for further discussion on goodwill impairment testing. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” The update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU is effective for annual reporting periods beginning after December 15, 2017. The Company adopted this guidance on January 1, 2018, and the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU allows a reclassification from accumulated other comprehensive earnings (AOCE) to retained earnings for the stranded tax effects caused by the revaluation of deferred taxes resulting from the newly enacted corporate tax rate in the Tax Cuts and Jobs Act. The ASU is effective in years beginning after December 15, 2018, but permits early adoption in a period for which financial statements have not yet been issued. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. In February 2018, the FASB ASU 2018-03, “Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This amendment clarifies certain aspects of the new guidance (ASU 2016-01) on recognizing and measuring financial instruments and presentation requirements for certain fair value option liabilities. ASU 2018-03 is effective for interim periods beginning after June 15, 2018 and will be effective for our 2018 third quarter and annual reporting period. The standard requires entities to record a cumulative-effect adjustment to the statement of financial position at the beginning of the fiscal year in which the amendments are adopted. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” This ASU codifies existing SEC guidance contained in SEC Staff Accounting Bulletin No. 118 (SAB 118), which expresses the view of the staff regarding application of existing guidance for the accounting for income taxes as it relates to the enactment of the Tax Cuts and Jobs Act (the TCJA) which was signed into law in the fourth quarter of 2017. In accordance with ASU 2018-05, the Company has recorded provisional estimates for the accounting impacts of the TCJA, deferred tax remeasurements, and other items, due to the uncertainty regarding how these provisions are to be implemented and additional anticipated forthcoming guidance. As management completes the analysis of the impacts of the TCJA, the Company may refine its current estimate and make adjustments, which will be recognized through income in the period such adjustments are identified, as required by ASU 2018-05. In June 2018, the FASB issued ASU 2018-07, “Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. This ASU specifies that Topic 718 apply to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

Mortgage Loans Held-for-Sale

6 Months Ended

Jun. 30, 2018

Mortgage Loans Held-for-Sale

Mortgage Loans Held-for-Sale

Note 2.—Mortgage Loans Held-for-Sale

A summary of the unpaid principal balance (UPB) of mortgage loans held-for-sale by type is presented below:


	June 30,		December 31,
	2018		2017
Government (1)	$	209,133	$	263,512
Conventional (2)		98,172		193,055
Other (3)		160,066		93,012
Fair value adjustment (4)		13,920		19,202
Total mortgage loans held for sale	$	481,291	$	568,781

(1)

Includes all government-insured loans including Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA).

(2)

Includes loans eligible for sale to Federal National Mortgage Association (Fannie Mae or FNMA) and Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC).

(3)

Includes non-qualified mortgages (NonQM) and jumbo loans.

(4)

Changes in fair value are included in gain on sale of loans, net in the accompanying consolidated statements of operations.

Gain on mortgage loans held-for-sale (LHFS), included in gain on sale of loans, net in the consolidated statements of operations, is comprised of the following the three and six months ended June 30, 2018 and 2017:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Gain on sale of mortgage loans	$	28,641	$	49,282	$	57,979	$	87,522
Premium from servicing retained loan sales		6,273		12,807		16,756		24,873
Unrealized gains (losses) from derivative financial instruments		1,435		1,896		(665)		751
Realized (losses) gains from derivative financial instruments		(227)		(6,167)		11,818		(5,042)
Mark to market (loss) gain on LHFS		(391)		4,394		(5,282)		9,598
Direct origination expenses, net		(15,773)		(25,314)		(38,789)		(45,150)
(Provision) recovery for repurchases		(1,217)		(92)		(1,594)		1,574
Total gain on sale of loans, net	$	18,741	$	36,806	$	40,223	$	74,126

Mortgage Servicing Rights

6 Months Ended

Jun. 30, 2018

Mortgage Servicing Rights

Mortgage Servicing Rights

Note 3.—Mortgage Servicing Rights

The Company retains mortgage servicing rights (MSRs) from its sales and securitization of certain mortgage loans or as a result of purchase transactions. MSRs are reported at fair value based on the income derived from the net projected cash flows associated with the servicing contracts. The Company receives servicing fees, less subservicing costs, on the UPB of the loans. The servicing fees are collected from the monthly payments made by the mortgagors or when the underlying real estate is foreclosed upon and liquidated. The Company may receive other remuneration from rights to various mortgagor-contracted fees, such as late charges, collateral reconveyance charges and nonsufficient fund fees, and the Company is generally entitled to retain the interest earned on funds held pending remittance (or float) related to its collection of mortgagor principal, interest, tax and insurance payments.

The following table summarizes the activity of MSRs for the six months ended June 30, 2018 and year ended December 31, 2017:


	June 30,		December 31,
	2018		2017
Balance at beginning of period	$	154,405	$	131,537
Additions from servicing retained loan sales		16,756		56,049
Addition from purchases		—		5,618
Reductions from bulk sales (1)		—		(895)
Changes in fair value (2)		9,572		(37,904)
Fair value of MSRs at end of period	$	180,733	$	154,405

(1)

In the first quarter of 2017, the Company sold substantially all of its NonQM MSRs.

(2)

Changes in fair value are included within gain (loss) on MSRs, net in the accompanying consolidated statements of operations.

At June 30, 2018 and December 31, 2017, the outstanding principal balance of the mortgage servicing portfolio was comprised of the following:


	June 30,		December 31,
	2018		2017
Government insured	$	3,606,688	$	2,834,680
Conventional (1)		13,177,521		13,493,463
NonQM		1,937		1,957
Total loans serviced	$	16,786,146	$	16,330,100

(1)

At June 30, 2018 and December 31, 2017, $13.2 billion and $13.5 billion, respectively, of Fannie Mae and Freddie Mac servicing was pledged as collateral as part of the MSR Financing (See Note 5.—Debt– MSR Financings). Pledged collateral was approximately 77% and 81% of the fair value of MSRs in the consolidated balance sheets at June 30, 2018 and December 31, 2017, respectively.

The table below illustrates hypothetical changes in fair values of MSRs, caused by assumed immediate changes to key assumptions that are used to determine fair value. See Note 7.—Fair Value of Financial Instruments for a description of the key assumptions used to determine the fair value of MSRs.


	June 30,		December 31,
Mortgage Servicing Rights Sensitivity Analysis	2018		2017
Fair value of MSRs	$	180,733	$	154,405
Prepayment Speed:
Decrease in fair value from 10% adverse change		(3,464)		(5,643)
Decrease in fair value from 20% adverse change		(7,178)		(11,275)
Decrease in fair value from 30% adverse change		(11,101)		(16,807)
Discount Rate:
Decrease in fair value from 10% adverse change		(6,759)		(5,461)
Decrease in fair value from 20% adverse change		(13,046)		(10,555)
Decrease in fair value from 30% adverse change		(18,905)		(15,316)

Sensitivities are hypothetical changes in fair value and cannot be extrapolated because the relationship of changes in assumptions to changes in fair value may not be linear. Also, the effect of a variation in a particular assumption is calculated without changing any other assumption, whereas a change in one factor may result in changes to another. Accordingly, no assurance can be given that actual results would be consistent with the results of these estimates. As a result, actual future changes in MSR values may differ significantly from those displayed above.

Gain (loss) on mortgage servicing rights, net is comprised of the following for the three and six months ended June 30, 2018 and 2017:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Change in fair value of mortgage servicing rights	$	393	$	(7,739)	$	9,572	$	(8,861)
Gain (loss) on sale of mortgage servicing rights		—		331		—		(82)
Realized and unrealized (losses) gains from hedging instruments		(226)		739		(1,700)		1,297
Gain (loss) on mortgage servicing rights, net	$	167	$	(6,669)	$	7,872	$	(7,646)

Servicing fees, net is comprised of the following for the three and six months ended June 30, 2018 and 2017:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018			2017	2018		2017
Contractual servicing fees	$	11,326	$	9,011	$	22,864	$	17,377
Late and ancillary fees		167		73		318		158
Subservicing and other costs		(1,632)		(1,320)		(3,858)		(2,452)
Servicing fees, net	$	9,861	$	7,764	$	19,324	$	15,083

Loans Eligible for Repurchase from Ginnie Mae (GNMA)

The Company routinely sells loans in GNMA guaranteed mortgage‑backed securities (MBS) by pooling eligible loans through a pool custodian and assigning rights to the loans to GNMA. When these GNMA loans are initially pooled and securitized, the Company meets the criteria for sale treatment and derecognizes the loans. The terms of the GNMA MBS program allow, but do not require, the Company to repurchase mortgage loans when the borrower has made no payments for three consecutive months. When the Company has the unconditional right, as servicer, to repurchase GNMA pool loans it has previously sold and are more than 90 days past due, the Company then re-recognizes the loans on its consolidated balance sheets in other assets, at their UPB, and records a corresponding liability in other liabilities in the consolidated balance sheets. At June 30, 2018 and December 31, 2017, loans eligible for repurchase from GNMA totaled $60.5 million and $47.7 million in UPB, respectively. As part of the Company’s repurchase reserve, the Company records a repurchase provision to provide for estimated losses from the sale or securitization of all mortgage loans, including these loans.

The loans eligible for repurchase from GNMA are in the Company’s servicing portfolio. The Company monitors the delinquency of the servicing portfolio and directs the subservicer to mitigate losses on delinquent loans.

Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets.

Goodwill and Intangible Assets

Note 4.—Goodwill and Intangible Assets

Goodwill arises from the acquisition method of accounting for business combinations and represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. Other intangible assets with definite lives include trademarks, customer relationships, and non-compete agreements. In the first quarter of 2015, the Company acquired CCM and recorded $104.6 million of goodwill and intangible assets of $33.1 million, consisting of $17.2 million for trademark, $10.2 million for customer relationships and $5.7 million for a non-compete agreement with the former owner of CCM. The purchase price allocation was prepared with the assistance of a third party valuation firm.

For goodwill, the determination of fair value of a reporting unit involves, among other things, application of the income approach, which includes developing forecasts of future cash flows and determining an appropriate discount rate. Goodwill is considered a Level 3 nonrecurring fair value measurement.

The methodology used to determine the fair value of trademarks includes assumptions with inherent uncertainty, including projected sales volumes and related projected revenues, long-term growth rates, royalty rates that a market participant might assume and judgments regarding the factors to develop an applied discount rate. The carrying value of intangible assets is at risk of impairment if future projected usage, revenues or long-term growth rates are lower than those currently projected, or if factors used in the development of a discount rate result in the application of a higher discount rate. The intangible assets are considered Level 3 nonrecurring fair value measurements.

The Company reviews its goodwill and intangible assets for impairment at least annually as of December 31 or more frequently if facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit that has goodwill is less than its carrying value. As of March 31, 2018, we performed an interim goodwill impairment evaluation for this reporting unit and determined that there was no impairment. As previously disclosed in our quarterly and annual reports, CCM has continued to experience declines in mortgage refinancing originations and margin compression, primarily a result of sustained increases in market interest rates from a historically low interest rate environment. In addition, the business model of CCM has led to additional margin compression through adverse demand from investors, as a result of the borrowers propensity to refinance.

The CCM brand has also experienced a material loss in value resulting from 1) the aforementioned adverse treatment from capital market participants for loans produced by the reporting unit, 2) consumer uncertainty due to the use of a similar brand name by an unaffiliated financial services company and 3) substantial deterioration in brand awareness. In light of these developments, a significant reduction in the anticipated future cash flows and estimated fair value for this reporting unit has occurred. The Company has shifted the consumer direct strategy and long-term business plans for CCM due to changing conditions.

Using this updated information, we performed an impairment test to evaluate the CCM goodwill and intangible assets for impairment. The Company compared the fair value of its net assets, using three methodologies (two income approaches and one market approach), to the carrying value and determined that its goodwill was impaired. As a result, we recorded an impairment charge of $74.7 million related to goodwill and $13.4 million related to intangible assets during the quarter ended June 30, 2018. Our fair value estimates utilize significant unobservable inputs and thus represent Level 3 fair value measurements. If actual results continue to deteriorate, it is possible that an assessment of the estimated fair value of CCM will not exceed its carrying value in the future, in which case further impairment of goodwill will be recorded.

The following table presents the changes in the carrying amount of goodwill for the periods indicated:


Balance at December 31, 2017	$	104,587
Impairment		(74,662)
Balance at June 30, 2018	$	29,925

As part of the acquisition of CCM, the purchase price of the intangible assets the Company acquired, are listed below for the periods indicated:


	Net Carrying Amount		Accumulated				Net Carrying Amount		Remaining
	at December 31, 2017		Amortization		Impairment		at June 30, 2018		Life
Intangible assets:
Trademark	$	14,035	$	(585)	$	(13,450)	$	—	—
Customer relationships		6,027		(754)		—		5,273	3.5
Non-compete agreement		1,520		(760)		—		760	0.5
Total intangible assets acquired	$	21,582	$	(2,099)	$	(13,450)	$	6,033	3.1

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Debt

6 Months Ended

Jun. 30, 2018

Debt

Debt

Note 5.—Debt

Warehouse Borrowings

The Company, through its subsidiaries, enters into Master Repurchase Agreements with lenders providing warehouse facilities. The warehouse facilities are uncommitted facilities used to fund, and are secured by, residential mortgage loans from the time of funding until the time of settlement when sold to the investor. In accordance with the terms of the Master Repurchase Agreements, the Company is required to maintain cash balances with the lender as additional collateral for the borrowings, which are included in restricted cash in the accompanying consolidated balance sheets.

The following table presents certain information on warehouse borrowings and related accrued interest for the periods indicated:


	Maximum		Balance Outstanding At
	Borrowing		June 30,		December 31,
	Capacity		2018		2017		Maturity Date
Short-term borrowings:
Repurchase agreement 1	$	150,000	$	122,557	$	100,630	June 14, 2019
Repurchase agreement 2 (1)		35,000		30,846		31,632	September 10, 2018
Repurchase agreement 3 (2)		225,000		104,648		154,020	December 21, 2018
Repurchase agreement 4 (3)		250,000		36,875		152,772	July 12, 2019
Repurchase agreement 5		175,000		107,514		88,920	January 31, 2019
Repurchase agreement 6		100,000		56,722		47,389	June 27, 2019
Repurchase agreement 7		50,000		23,384		—	December 26, 2018
Total warehouse borrowings	$	985,000	$	482,546	$	575,363

(1)

In July 2018, the maturity of the line was extended to September 10, 2018.

(2)

As of June 30, 2018 and December 31, 2017, $37.2 million and $41.8 million, respectively, are associated with finance receivables made to the Company’s warehouse customers.

(3)

In July 2018, the maturity of the line was extended to July 12, 2019.

MSR Financings

In February 2018, IMC (Borrower), amended the Line of Credit Promissory Note (FHLMC and GNMA Financing) originally entered into in August 2017, increasing the maximum borrowing capacity of the revolving line of credit to $50.0 million and extending the term to January 31, 2019. In May 2018, the agreement was amended increasing the maximum borrowing capacity of the revolving line of credit to $60.0 million, increasing the borrowing capacity up to 60% of the fair market value of the pledged mortgage servicing rights and reducing the interest rate per annum to one-month LIBOR plus 3.0%. As part of the May 2018 amendment, the obligations under the Line of Credit are secured by FHLMC and GNMA pledged mortgage servicing rights (subject to an acknowledge agreement) and is guaranteed by Integrated Real Estate Services, Corp. At June 30, 2018, $32.5 million was outstanding under the FHLMC and GNMA Financing and was secured by $67.8 million of mortgage servicing rights.

On February 10, 2017, IMC (Borrower), entered into a Loan and Security Agreement (Agreement) with a lender providing for a revolving loan commitment of $40.0 million for a period of two years (FNMA Financing). The Borrower is able to borrow up to 55% of the fair market value of FNMA pledged servicing rights. Upon the two year anniversary of the Agreement, any amounts outstanding will automatically be converted into a term loan due and payable in full on the one year anniversary of the conversion date. Interest payments are payable monthly and accrue interest at the rate per annum equal to one-month LIBOR plus 4.0% and the balance of the obligation may be prepaid at any time. The Borrower initially drew down $35.1 million, and used a portion of the proceeds to pay off the Term Financing (approximately $30.1 million) originally entered into in June 2015 as discussed below. The Borrower also paid the lender an origination fee of $100 thousand, which is deferred and amortized over the life of the FNMA Financing. At June 30, 2018, $29.5 million was outstanding under the FNMA Financing and was secured by $71.7 million of mortgage servicing rights.

Convertible Notes

In May 2015, the Company issued an additional $25.0 million Convertible Promissory Notes (2015 Convertible Notes). The 2015 Convertible Notes mature on or before May 9, 2020 and accrue interest at a rate of 7.5% per annum, to be paid quarterly. The Company had approximately $50 thousand in transaction costs, which were deferred and amortized over the life of the 2015 Convertible Notes.

Noteholders may convert all or a portion of the outstanding principal amount of the 2015 Convertible Notes into shares of the Company’s common stock (Conversion Shares) at a rate of $21.50 per share, subject to adjustment for stock splits and dividends (Conversion Price). The Company has the right to convert the entire outstanding principal of the 2015 Convertible Notes into Conversion Shares at the Conversion Price if the market price per share of the common stock, as measured by the average volume-weighted closing stock price per share of the common stock on the NYSE AMERICAN (or any other U.S. national securities exchange then serving as the principal such exchange on which the shares of common stock are listed), reaches the level of $30.10 for any twenty (20) trading days in any period of thirty (30) consecutive trading days after the Closing Date. Upon conversion of the 2015 Convertible Notes by the Company, the entire amount of accrued and unpaid interest (and all other amounts owing) under the 2015 Convertible Notes are immediately due and payable. Furthermore, if the conversion of the 2015 Convertible Notes by the Company occurs prior to the third anniversary of the Closing Date, then the entire amount of interest under the 2015 Convertible Notes through the third anniversary is immediately due and payable. To the extent the Company pays any cash dividends on its shares of common stock prior to conversion of the 2015 Convertible Notes, upon conversion of the 2015 Convertible Notes, the Noteholders will also receive such dividends on an as-converted basis of the 2015 Convertible Notes less the amount of interest paid by the Company prior to such dividend.

Long-term Debt

Junior Subordinated Notes

The Company carries its Junior Subordinated Notes at estimated fair value as more fully described in Note 7.—Fair Value of Financial Instruments. The following table shows the remaining principal balance and fair value of junior subordinated notes issued as of June 30, 2018 and December 31, 2017:


	June 30,		December 31,
	2018		2017
Junior Subordinated Notes (1)	$	62,000	$	62,000
Fair value adjustment		(16,213)		(17,018)
Total Junior Subordinated Notes	$	45,787	$	44,982

(1)

Stated maturity of March 2034; requires quarterly distributions at a variable rate of 3‑month LIBOR plus 3.75% per annum.

Securitized Mortgage Trusts

6 Months Ended

Jun. 30, 2018

Securitized Mortgage Trusts

Securitized Mortgage Trusts

Note 6.—Securitized Mortgage Trusts

Securitized Mortgage Trust Assets

Securitized mortgage trust assets, which are recorded at their estimated fair value, are comprised of the following at June 30, 2018 and December 31, 2017:


	June 30,		December 31,
	2018		2017
Securitized mortgage collateral	$	3,401,037	$	3,662,008
REO		8,440		8,542
Total securitized mortgage trust assets	$	3,409,477	$	3,670,550

Securitized Mortgage Trust Liabilities

Securitized mortgage trust liabilities, which are recorded at their estimated fair value, are comprised of the following at June 30, 2018 and December 31, 2017:


	June 30,		December 31,
	2018		2017
Securitized mortgage borrowings	$	3,393,721	$	3,653,265

Changes in fair value of net trust assets, including trust REO losses, are comprised of the following for the three and six months ended June 30, 2018 and 2017:


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Change in fair value of net trust assets, excluding REO	$	1,807	$	(2,213)	$	(2,524)	$	2,573
(Losses) gains from REO		(1,590)		4,218		603		5,751
Change in fair value of net trust assets, including trust REO (losses) gains	$	217	$	2,005	$	(1,921)	$	8,324

Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2018

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Note 7.—Fair Value of Financial Instruments

The use of fair value to measure the Company’s financial instruments is fundamental to its consolidated financial statements and is a critical accounting estimate because a substantial portion of its assets and liabilities are recorded at estimated fair value.

FASB ASC 825 requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate such fair values. The following table presents the estimated fair value of financial instruments included in the consolidated financial statements as of the dates indicated:


	June 30, 2018								December 31, 2017
	Carrying		Estimated Fair Value						Carrying		Estimated Fair Value
	Amount		Level 1		Level 2		Level 3		Amount		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	32,960	$	32,960	$	—	$	—	$	33,223	$	33,223	$	—	$	—
Restricted cash		4,606		4,606		—		—		5,876		5,876		—		—
Mortgage loans held-for-sale		481,291		—		481,291		—		568,781		—		568,781		—
Finance receivables		37,215		—		37,215		—		41,777		—		41,777		—
Mortgage servicing rights		180,733		—		—		180,733		154,405		—		—		154,405
Derivative assets, lending, net		4,538		—		—		4,538		4,777		—		420		4,357
Securitized mortgage collateral		3,401,037		—		—		3,401,037		3,662,008		—		—		3,662,008

Liabilities
Warehouse borrowings	$	482,546	$	—	$	482,546	$	—	$	575,363	$	—	$	575,363	$	—
MSR financings		62,000		—		—		62,000		35,133		—		—		35,133
Convertible notes		24,979		—		—		24,979		24,974		—		—		24,974
Contingent consideration		—		—		—		—		554		—		—		554
Long-term debt		45,787		—		—		45,787		44,982		—		—		44,982
Securitized mortgage borrowings		3,393,721		—		—		3,393,721		3,653,265		—		—		3,653,265
Derivative liabilities, lending, net		179		—		179		—		—		—		—		—

The fair value amounts above have been estimated by management using available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop the estimates of fair value in both inactive and orderly markets. Accordingly, the estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

For securitized mortgage collateral and securitized mortgage borrowings, the underlying Alt-A (non-conforming) residential and commercial loans and mortgage-backed securities market have experienced significant declines in market activity, along with a lack of orderly transactions. The Company’s methodology to estimate fair value of these assets and liabilities include the use of internal pricing techniques such as the net present value of future expected cash flows (with observable market participant assumptions, where available) discounted at a rate of return based on the Company’s estimates of market participant requirements. The significant assumptions utilized in these internal pricing techniques, which are based on the characteristics of the underlying collateral, include estimated credit losses, estimated prepayment speeds and appropriate discount rates.

Refer to Recurring Fair Value Measurements below for a description of the valuation methods used to determine the fair value of investment securities available-for-sale, securitized mortgage collateral and borrowings, derivative assets and liabilities, long-term debt, mortgage servicing rights and mortgage loans held-for-sale.

The carrying amount of cash, cash equivalents and restricted cash approximates fair value.

Finance receivables carrying amounts approximate fair value due to the short-term nature of the assets and do not present unanticipated interest rate or credit concerns.

Warehouse borrowings carrying amounts approximate fair value due to the short-term nature of the liabilities and do not present unanticipated interest rate or credit concerns.

Convertible notes are recorded at amortized cost. The estimated fair value is determined using a discounted cash flow model using estimated market rates.

MSR financings carrying amount approximates fair value as the underlying facility bears interest at a rate that is periodically adjusted based on a market index.

Fair Value Hierarchy

The application of fair value measurements may be on a recurring or nonrecurring basis depending on the accounting principles applicable to the specific asset or liability or whether management has elected to carry the item at its estimated fair value.

FASB ASC 820-10-35 specifies a hierarchy of valuation techniques based on whether the inputs to those techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1—Quoted prices (unadjusted) in active markets for identical instruments or liabilities that an entity has the ability to assess at measurement date.

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices that are observable for an asset or liability, including interest rates and yield curves observable at commonly quoted intervals, prepayment speeds, loss severities, credit risks and default rates; and market-corroborated inputs.

Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers is unobservable.

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when estimating fair value.

As a result of the lack of observable market data resulting from inactive markets, the Company has classified its investment securities available-for-sale, mortgage servicing rights, securitized mortgage collateral and borrowings, derivative assets and liabilities (trust and IRLCs), and long-term debt as Level 3 fair value measurements. Level 3 assets and liabilities measured at fair value on a recurring basis were approximately 88% and 99% and 87% and 99%, respectively, of total assets and total liabilities measured at estimated fair value at June 30, 2018 and December 31, 2017.

Recurring Fair Value Measurements

The Company assesses the financial instruments on a quarterly basis to determine the appropriate classification within the fair value hierarchy, as defined by ASC Topic 810. Transfers between fair value classifications occur when there are changes in pricing observability levels. Transfers of financial instruments among the levels occur at the beginning of the reporting period. There were no material transfers between our Level 1 and Level 2 classified instruments during the six months ended June 30, 2018.

The following tables present the Company’s assets and liabilities that are measured at estimated fair value on a recurring basis, including financial instruments for which the Company has elected the fair value option at June 30, 2018 and December 31, 2017, based on the fair value hierarchy:


	Recurring Fair Value Measurements
	June 30, 2018						December 31, 2017
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Mortgage loans held-for-sale	$	—	$	481,291	$	—	$	—	$	568,781	$	—
Derivative assets, lending, net (1)		—		—		4,538		—		420		4,357
Mortgage servicing rights		—		—		180,733		—		—		154,405
Securitized mortgage collateral		—		—		3,401,037		—		—		3,662,008
Total assets at fair value	$	—	$	481,291	$	3,586,308	$	—	$	569,201	$	3,820,770
Liabilities
Securitized mortgage borrowings	$	—	$	—	$	3,393,721	$	—	$	—	$	3,653,265
Long-term debt		—		—		45,787		—		—		44,982
Contingent consideration		—		—		—		—		—		554
Derivative liabilities, lending, net (2)		—		179		—		—		—		—
Total liabilities at fair value	$	—	$	179	$	3,439,508	$	—	$	—	$	3,698,801

(1)

At June 30, 2018, derivative assets, lending, net included $4.5 million in IRLCs and is included in other assets in the accompanying consolidated balance sheets. At December 31, 2017, derivative assets, lending, net included $4.4 million in IRLCs and $420 thousand in hedging instruments, respectively, and is included in other assets in the accompanying consolidated balance sheets.

(2)

At June 30, 2018, derivative liabilities, lending, net included $179 thousand in hedging instruments and is included in other liabilities in the accompanying consolidated balance sheets.

The following tables present reconciliations for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended June 30, 2018 and 2017:


	Level 3 Recurring Fair Value Measurements
	For the Three Months Ended June 30, 2018

							Interest
	Securitized		Securitized		Mortgage		rate lock		Long-
	mortgage		mortgage		servicing		commitments,		term
	collateral		borrowings		rights		net		debt
Fair value, March 31, 2018	$	3,513,901	$	(3,508,477)	$	174,067	$	3,854	$	(45,337)
Total gains (losses) included in earnings:
Interest income (1)		11,286		—		—		—		—
Interest expense (1)		—		(17,117)		—		—		(182)
Change in fair value		12,686		(10,879)		393		684		258
Change in fair value of instrument specific credit risk		—		—		—		—		(526)	(2)
Total gains (losses) included in earnings		23,972		(27,996)		393		684		(450)
Transfers in and/or out of Level 3		—		—		—		—		—
Purchases, issuances and settlements:
Purchases		—		—		—		—		—
Issuances		—		—		6,273		—		—
Settlements		(136,836)		142,752		—		—		—
Fair value, June 30, 2018	$	3,401,037	$	(3,393,721)	$	180,733	$	4,538	$	(45,787)
Unrealized gains (losses) still held (3)	$	(490,822)	$	2,666,746	$	180,733	$	4,538	$	16,213

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $1.8 million for three months ended June 30, 2018. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings.

(2)

Amount represents the change in instrument specific credit risk in other comprehensive earnings in the consolidated statements of operations and comprehensive earnings as required by the adoption of ASU 2016-01 on January 1, 2018.

(3)

Represents the amount of unrealized gains (losses) relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2018.


	Level 3 Recurring Fair Value Measurements
	For the Three Months Ended June 30, 2017

							Interest
	Securitized		Securitized		Mortgage		rate lock		Long-
	mortgage		mortgage		servicing		commitments,		term		Contingent
	collateral		borrowings		rights		net		debt		consideration
Fair value, March 31, 2017	$	3,903,336	$	(3,892,668)	$	141,586	$	12,333	$	(50,044)	$	(24,498)
Total gains (losses) included in earnings:
Interest income (1)		14,101		—		—		—		—		—
Interest expense (1)		—		(36,505)		—		—		(161)		—
Change in fair value		50,168		(52,381)		(7,739)		(2,787)		(265)		6,086
Total (losses) gains included in earnings		64,269		(88,886)		(7,739)		(2,787)		(426)		6,086
Transfers in and/or out of Level 3		—		—		—		—		—		—
Purchases, issuances and settlements:
Purchases		—		—		5,619		—		—		—
Issuances		—		—		12,807		—		—		—
Settlements		(191,421)		214,035		—		—		5,934		3,486
Fair value, June 30, 2017	$	3,776,184	$	(3,767,519)	$	152,273	$	9,546	$	(44,536)	$	(14,926)
Unrealized gains (losses) still held (2)	$	(729,834)	$	2,888,635	$	152,273	$	9,546	$	17,464	$	(14,926)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $2.1 million for the three months ended June 30, 2017. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings.

(2)

Represents the amount of unrealized gains (losses) relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2017.


	Level 3 Recurring Fair Value Measurements
	For the Six Months Ended June 30, 2018

							Interest
	Securitized		Securitized		Mortgage		rate lock		Long-
	mortgage		mortgage		servicing		commitments,		term			Contingent
	collateral		borrowings		rights		net		debt			consideration
Fair value, December 31, 2017	$	3,662,008	$	(3,653,265)	$	154,405	$	4,357	$	(44,982)		$	(554)
Total gains (losses) included in earnings:
Interest income (1)		16,974		—		—		—		—			—
Interest expense (1)		—		(37,197)		—		—		(321)			—
Change in fair value		(20,069)		17,545		9,572		181		1,481			—
Change in fair value of instrument specific credit risk		—		—		—		—		(1,965)	(2)		—
Total gains (losses) included in earnings		(3,095)		(19,652)		9,572		181		(805)			—
Transfers in and/or out of Level 3		—		—		—		—		—			—
Purchases, issuances and settlements:
Purchases		—		—		—		—		—			—
Issuances		—		—		16,756		—		—			—
Settlements		(257,876)		279,196		—		—		—			554
Fair value, June 30, 2018	$	3,401,037	$	(3,393,721)	$	180,733	$	4,538	$	(45,787)		$	—

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $4.0 million for six months ended June 30, 2018. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings.

(2)


	Level 3 Recurring Fair Value Measurements
	For the Six Months Ended June 30, 2017

							Interest
	Securitized		Securitized		Mortgage		rate lock		Long-
	mortgage		mortgage		servicing		commitments,		term		Contingent
	collateral		borrowings		rights		net		debt		consideration
Fair value, December 31, 2016	$	4,021,891	$	(4,017,603)	$	131,537	$	11,169	$	(47,207)	$	(31,072)
Total gains (losses) included in earnings:
Interest income (1)		29,585		—		—		—		—		—
Interest expense (1)		—		(77,200)		—		—		(502)		—
Change in fair value		101,220		(98,647)		(8,861)		(1,623)		(2,761)		4,702
Total gains (losses) included in earnings		130,805		(175,847)		(8,861)		(1,623)		(3,263)		4,702
Transfers in and/or out of Level 3		—		—		—		—		—		—
Purchases, issuances and settlements:
Purchases		—		—		5,619		—		—		—
Issuances		—		—		24,873		—		—		—
Settlements		(376,512)		425,931		(895)		—		5,934		11,444
Fair value, June 30, 2017	$	3,776,184	$	(3,767,519)	$	152,273	$	9,546	$	(44,536)	$	(14,926)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $4.2 million for the six months ended June 30, 2017. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings.

The following table presents quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and nonrecurring basis at June 30, 2018:


	Estimated		Valuation	Unobservable	Range of		Weighted
Financial Instrument	Fair Value		Technique	Input	Inputs		Average
Assets and liabilities backed by real estate
Securitized mortgage collateral, and	$	3,401,037	DCF	Prepayment rates	2.6 - 21.0	%	8.6	%
Securitized mortgage borrowings		(3,393,721)		Default rates	0.01 - 4.0	%	1.5	%
				Loss severities	6.6 - 86.7	%	42.9	%
				Discount rates	3.0 - 25.0	%	4.4	%
Other assets and liabilities
Mortgage servicing rights	$	180,733	DCF	Discount rate	8.9 - 14.0	%	9.7	%
				Prepayment rates	6.8 - 88.8	%	9.7	%
Derivative assets - IRLCs, net		4,538	Market pricing	Pull-through rate	7.8 - 99.9	%	74.4	%
Long-term debt		(45,787)	DCF	Discount rate	10.0	%	10.0	%

DCF = Discounted Cash Flow

For assets and liabilities backed by real estate, a significant increase in discount rates, default rates or loss severities would result in a significantly lower estimated fair value. The effect of changes in prepayment speeds would have differing effects depending on the seniority or other characteristics of the instrument. For other assets and liabilities, a significant increase in discount rates would result in a significantly lower estimated fair value. A significant increase in one-month LIBOR would result in a significantly higher estimated fair value for derivative liabilities, net, securitized trusts. The Company believes that the imprecision of an estimate could be significant.

The following tables present the changes in recurring fair value measurements included in net earnings for the three months ended June 30, 2018 and 2017:


	Recurring Fair Value Measurements
	Changes in Fair Value Included in Net Earnings
	For the Three Months Ended June 30, 2018
					Change in Fair Value of
	Interest		Interest		Net Trust		Long-term		Other Revenue		Gain on Sale
	Income (1)		Expense (1)		Assets		Debt		and Expense		of Loans, net		Total
Securitized mortgage collateral	$	11,286	$	—	$	12,686	$	—	$	—	$	—	$	23,972
Securitized mortgage borrowings		—		(17,117)		(10,879)		—		—		—		(27,996)
Derivative liabilities, net, securitized trusts		—		—		—		—		—		—		—
Long-term debt		—		(182)		—		258		—		—		76
Mortgage servicing rights (2)		—		—		—		—		393		—		393
Mortgage loans held-for-sale		—		—		—		—		—		(391)		(391)
Derivative assets — IRLCs		—		—		—		—		—		684		684
Derivative liabilities — Hedging Instruments		—		—		—		—		(38)		751		713
Total	$	11,286	$	(17,299)	$	1,807	$	258	$	355	$	1,044	$	(2,549)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities.

(2)

Included in loss on MSRs, net in the consolidated statements of operations.


	Recurring Fair Value Measurements
	Changes in Fair Value Included in Net Earnings
	For the Three Months Ended June 30, 2017
					Change in Fair Value of
	Interest		Interest		Net Trust		Long-term		Other		Gain on Sale
	Income (1)		Expense (1)		Assets		Debt		Revenue		of Loans, net		Total
Securitized mortgage collateral	$	14,101	$	—	$	50,168	$	—	$	—	$	—	$	64,269
Securitized mortgage borrowings		—		(36,505)		(52,381)		—		—		—		(88,886)
Derivative liabilities, net, securitized trusts		—		—		—		—		—		—		—
Long-term debt		—		(161)		—		(265)		—		—		(426)
Mortgage servicing rights (2)		—		—		—		—		(7,739)		—		(7,739)
Contingent consideration		—		—		—		—		6,086		—		6,086
Mortgage loans held-for-sale		—		—		—		—		—		4,394		4,394
Derivative assets — IRLCs		—		—		—		—		—		(2,787)		(2,787)
Derivative liabilities — Hedging Instruments		—		—		—		—		(1,305)		4,683		3,378
Total	$	14,101	$	(36,666)	$	(2,213)	$	(265)	$	(2,958)	$	6,290	$	(21,711)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities.

(2)

Included in loss on MSRs, net in the consolidated statements of operations.

The following tables present the changes in recurring fair value measurements included in net earnings for the six months ended June 30, 2018 and 2017:


	Recurring Fair Value Measurements
	Changes in Fair Value Included in Net Earnings
	For the Six Months Ended June 30, 2018
					Change in Fair Value of
	Interest		Interest		Net Trust			Long-term		Other Revenue		Gain on Sale
	Income (1)		Expense (1)		Assets			Debt		and Expense		of Loans, net		Total
Securitized mortgage collateral	$	16,974	$	—	$	(20,069)		$	—	$	—	$	—	$	(3,095)
Securitized mortgage borrowings		—		(37,197)		17,545			—		—		—		(19,652)
Derivative liabilities, net, securitized trusts		—		—		—			—		—		—		—
Long-term debt		—		(321)		—			1,481		—		—		1,160
Mortgage servicing rights (2)		—		—		—			—		9,572		—		9,572
Mortgage loans held-for-sale		—		—		—			—		—		(5,282)		(5,282)
Derivative assets — IRLCs		—		—		—			—		—		181		181
Derivative liabilities — Hedging Instruments		—		—		—			—		246		(846)		(600)
Total	$	16,974	$	(37,518)	$	(2,524)	(3)	$	1,481	$	9,818	$	(5,947)	$	(17,716)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities.

(2)

Included in loss on MSRs, net in the consolidated statements of operations.

(3)

For the six months ended June 30, 2018, change in the fair value of net trust assets, excluding REO was $2.5 million.


	Recurring Fair Value Measurements
	Changes in Fair Value Included in Net Earnings
	For the Six Months Ended June 30, 2017
					Change in Fair Value of
	Interest		Interest		Net Trust			Long-term		Other Revenue		Gain on Sale
	Income (1)		Expense (1)		Assets			Debt		and Expense		of Loans, net		Total
Securitized mortgage collateral	$	29,585	$	—	$	101,220		$	—	$	—	$	—	$	130,805
Securitized mortgage borrowings		—		(77,200)		(98,647)			—		—		—		(175,847)
Derivative liabilities, net, securitized trusts		—		—		—			—		—		—		—
Long-term debt		—		(502)		—			(2,761)		—		—		(3,263)
Mortgage servicing rights (2)		—		—		—			—		(8,861)		—		(8,861)
Contingent consideration		—		—		—			—		4,702		—		4,702
Mortgage loans held-for-sale		—		—		—			—		—		9,598		9,598
Derivative assets — IRLCs		—		—		—			—		—		(1,623)		(1,623)
Derivative liabilities — Hedging Instruments		—		—		—			—		(83)		2,374		2,291
Total	$	29,585	$	(77,702)	$	2,573	(3)	$	(2,761)	$	(4,242)	$	10,349	$	(42,198)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities.

(2)

Included in loss on MSRs, net in the consolidated statements of operations.

(3)

For the six months ended June 30, 2017, change in the fair value of net trust assets, excluding REO was $2.6 million.

The following is a description of the measurement techniques for items recorded at estimated fair value on a recurring basis.

Mortgage servicing rights—The Company elected to carry its MSRs arising from its mortgage loan origination operation at estimated fair value. The fair value of MSRs is based upon market prices for similar instruments and a discounted cash flow model. The valuation model incorporates assumptions that market participants would use in estimating the fair value of servicing. These assumptions include estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, prepayment and late fees, among other considerations. Mortgage servicing rights are considered a Level 3 measurement at June 30, 2018.

Mortgage loans held-for-sale—The Company elected to carry its mortgage loans held-for-sale originated or acquired at estimated fair value. Fair value is based on quoted market prices, where available, prices for other traded mortgage loans with similar characteristics, and purchase commitments and bid information received from market participants. Given the meaningful level of secondary market activity for mortgage loans, active pricing is available for similar assets and accordingly, the Company classifies its mortgage loans held-for-sale as a Level 2 measurement at June 30, 2018.

Securitized mortgage collateral—The Company elected to carry its securitized mortgage collateral at fair value. These assets consist primarily of non-conforming mortgage loans securitized between 2002 and 2007. Fair value measurements are based on the Company’s internal models used to compute the net present value of future expected cash flows with observable market participant assumptions, where available. The Company’s assumptions include its expectations of inputs that other market participants would use in pricing these assets. These assumptions include judgments about the underlying collateral, prepayment speeds, estimated future credit losses, forward interest rates, investor yield requirements and certain other factors. As of June 30, 2018, securitized mortgage collateral had UPB of $3.9 billion, compared to an estimated fair value on the Company’s balance sheet of $3.4 billion. The aggregate UPB exceeds the fair value by $0.5 billion at June 30, 2018. As of June 30, 2018, the UPB of loans 90 days or more past due was $0.5 billion compared to an estimated fair value of $0.2 billion. The aggregate UPB of loans 90 days or more past due exceed the fair value by $0.3 billion at June 30, 2018. Securitized mortgage collateral is considered a Level 3 measurement at June 30, 2018.

Securitized mortgage borrowings—The Company elected to carry its securitized mortgage borrowings at fair value. These borrowings consist of individual tranches of bonds issued by securitization trusts and are primarily backed by non-conforming mortgage loans. Fair value measurements include the Company’s judgments about the underlying collateral and assumptions such as prepayment speeds, estimated future credit losses, forward interest rates, investor yield requirements and certain other factors. As of June 30, 2018, securitized mortgage borrowings had an outstanding principal balance of $3.9 billion, net of $2.2 billion in bond losses, compared to an estimated fair value of $3.4 billion. The aggregate outstanding principal balance exceeds the fair value by $0.5 billion at June 30, 2018. Securitized mortgage borrowings are considered a Level 3 measurement at June 30, 2018.

Contingent consideration—Contingent consideration was applicable to the acquisition of CCM and was estimated and recorded at fair value at the acquisition date as part of purchase price consideration. Additionally, each reporting period, the Company estimated the change in fair value of the contingent consideration and any change in fair value is recognized in the Company’s consolidated statements of operations if it is determined to not be a measurement period adjustment. The estimate of the fair value of contingent consideration required significant judgment and assumptions to be made about future operating results, discount rates and probabilities of various projected operating result scenarios. In the fourth quarter of 2017, the earn-out period ended and the remaining $554 thousand in contingent consideration payments were paid during the three months ended March 31, 2018. Contingent consideration was considered a Level 3 measurement at June 30, 2017, and as of June 30, 2018, we have no further obligations related to contingent consideration.

Long-term debt—The Company elected to carry its remaining long-term debt (consisting of junior subordinated notes) at fair value. These securities are measured based upon an analysis prepared by management, which considered the Company’s own credit risk, including settlements with trust preferred debt holders and discounted cash flow analysis. As of June 30, 2018, long-term debt had UPB of $62.0 million compared to an estimated fair value of $45.8 million. The aggregate UPB exceeds the fair value by $16.2 million at June 30, 2018. The long-term debt is considered a Level 3 measurement at June 30, 2018.

Derivative assets and liabilities, lending—The Company’s derivative assets and liabilities are carried at fair value as required by GAAP and are accounted for as free standing derivatives. The derivatives include IRLCs with prospective residential mortgage borrowers whereby the interest rate on the loan is determined prior to funding and the borrowers have locked in that interest rate. These commitments are determined to be derivative instruments in accordance with GAAP. The derivatives also include hedging instruments (typically TBA MBS) used to hedge the fair value changes associated with changes in interest rates relating to its mortgage lending originations as well as mortgage servicing rights. The Company hedges the period from the interest rate lock (assuming a fall-out factor) to the date of the loan sale. The estimated fair value of IRLCs are based on underlying loan types with similar characteristics using the TBA MBS market, which is actively quoted and easily validated through external sources. The data inputs used in this valuation include, but are not limited to, loan type, underlying loan amount, note rate, loan program and expected sale date of the loan, adjusted for current market conditions. These valuations are adjusted at the loan level to consider the servicing release premium and loan pricing adjustments specific to each loan. For all IRLCs, the base value is then adjusted for the anticipated Pull-through Rate. The anticipated Pull-through Rate is an unobservable input based on historical experience, which results in classification of IRLCs as a Level 3 measurement at June 30, 2018.

The fair value of the Hedging Instruments is based on the actively quoted TBA MBS market using observable inputs related to characteristics of the underlying MBS stratified by product, coupon and settlement date. Therefore, the Hedging Instruments are classified as a Level 2 measurement at June 30, 2018.

The following table includes information for the derivative assets and liabilities, lending for the periods presented:


					Total Gains (Losses)				Total Gains (Losses)
	Notional Amount				For the Three Months Ended				For the Six Months Ended
	June 30,		December 31,		June 30,				June 30,
	2018		2017		2018		2017		2018		2017
Derivative – IRLC's (1)	$	369,707	$	398,225	$	684	$	(2,787)	$	181	$	(1,623)
Derivative – TBA MBS (2)		418,807		687,500		299		(746)		9,275		(1,371)

(1)

Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations.

(2)

Amounts included in gain on sale of loans, net and gain (loss) on mortgage servicing rights, net within the accompanying consolidated statements of operations.

Nonrecurring Fair Value Measurements

The Company is required to measure certain assets and liabilities at estimated fair value from time to time. These fair value measurements typically result from the application of specific accounting pronouncements under GAAP. The fair value measurements are considered nonrecurring fair value measurements under FASB ASC 820-10.

The following tables present financial and non-financial assets and liabilities measured using nonrecurring fair value measurements at June 30, 2018 and 2017, respectively:


	Nonrecurring Fair Value Measurements						Total Gains (Losses) (1)		Total Gains (Losses) (1)
	June 30, 2018						For the Three Months Ended		For the Six Months Ended
	Level 1		Level 2		Level 3		June 30, 2018		June 30, 2018
REO (2)	$	—	$	169	$	—	$	(1,590)	$	603
Deferred charge (3)		—		—		—		—		—
Intangible assets		—		—		6,033		(13,450)		(13,450)
Goodwill		—		—		29,925		(74,662)		(74,662)

(1)

Total losses reflect losses from all nonrecurring measurements during the period.

(2)

Balance represents REO at June 30, 2018, which have been impaired subsequent to foreclosure. For the three and six months ended June 30, 2018, the Company recorded $1.6 million and $603 thousand, respectively, in (losses) gains related to changes in net realizable value (NRV) of properties. Losses represent impairment of the NRV attributable to an increase in state specific loss severities on properties held during the period, which resulted in a decrease to NRV. Gains represent recovery of the NRV attributable to an improvement in state specific loss severities on properties held during the period, which resulted in an increase to NRV.

(3)

With the adoption of ASU 2016-16 on January 1, 2018, $7.8 million in deferred charge was eliminated with a cumulative effect adjustment to opening retained earnings.


	Nonrecurring Fair Value Measurements						Total Gains (Losses) (1)		Total Gains (Losses) (1)
	June 30, 2017						For the Three Months Ended		For the Six Months Ended
	Level 1		Level 2		Level 3		June 30, 2017		June 30, 2017
REO (2)	$	—	$	6,498	$	—	$	4,218	$	5,751
Deferred charge (3)		—		—		8,165		(243)		(520)

(1)

Total losses reflect losses from all nonrecurring measurements during the period.

(2)

Balance represents REO at June 30, 2017 which has been impaired subsequent to foreclosure. For the three and six months ended June 30, 2017, the Company recorded $4.2 million and $5.8 million, respectively, in gains which represent recovery of the NRV attributable to an improvement in state specific loss severities on properties held during the period which resulted in an increase to NRV.

(3)

For the three and six months ended June 30, 2017, the Company recorded $243 thousand and $520 thousand in income tax expense resulting from impairment write-downs of deferred charge based on changes in estimated cash flows and lives of the related mortgages retained in the securitized mortgage collateral.

Real estate owned—REO consists of residential real estate acquired in satisfaction of loans. Upon foreclosure, REO is adjusted to the estimated fair value of the residential real estate less estimated selling and holding costs, offset by expected contractual mortgage insurance proceeds to be received, if any. Subsequently, REO is recorded at the lower of carrying value or estimated fair value less costs to sell. REO balance representing REOs which have been impaired subsequent to foreclosure are subject to nonrecurring fair value measurement and included in the nonrecurring fair value measurements tables. Fair values of REO are generally based on observable market inputs, and are considered Level 2 measurements at June 30, 2018.

Deferred charge— Deferred charge represented the deferral of income tax expense on inter-company profits that resulted from the sale of mortgages from taxable subsidiaries to IMH in prior years. The Company evaluated the deferred charge for impairment quarterly using internal estimates of estimated cash flows and lives of the related mortgages retained in the securitized mortgage collateral. If the deferred charge was determined to be impaired, it was recognized as a component of income tax expense. On January 1, 2018, the Company adopted ASU 2016-16, which resulted in a $7.8 million cumulative effect adjustment to opening retained earnings eliminating the remaining deferred charge on the balance sheet. Deferred charge was considered a Level 3 measurement at June 30, 2018.

Intangible assets— The methodology used to determine the fair value as well as measure potential impairment of trademarks includes assumptions with inherent uncertainty, including projected sales volumes and related projected revenues, long-term growth rates, royalty rates that a market participant might assume and judgments regarding the factors to develop an applied discount rate. The carrying value of intangible assets is at risk of impairment if future projected usage, revenues or long-term growth rates are lower than those currently projected, or if factors used in the development of a discount rate result in the application of a higher discount rate. As the results of our testing indicated that the carrying values of certain of these assets would not be recoverable, we recorded intangible asset impairment of approximately $13.4 million during the quarter ended June 30, 2018. The intangible assets are considered Level 3 nonrecurring fair value measurements at June 30, 2018.

Goodwill— For goodwill, the determination of fair value of a reporting unit involves, among other things, application of various approaches, which include developing forecasts of future cash flows with a number of assumptions including but not limited to, origination and margin projections, growth and terminal value projections, and judgements regarding the factors to develop discount rates and cost of capital. The Company reviews its goodwill for impairment at least annually as of December 31 or more frequently if facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit that has goodwill is less than its carrying value. The Company compared the fair value of its net assets using three methodologies (two income approaches and one market approach), to the carrying value and determined that its goodwill was impaired. As a result, we recorded an impairment charge of $74.7 million related to goodwill during the quarter ended June 30, 2018. Goodwill is considered a Level 3 nonrecurring fair value measurement at June 30, 2018.

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2018
Income Taxes
Income Taxes	Note 8.—Income Taxes The Company calculates its quarterly tax provision pursuant to the guidelines in ASC 740 Income Taxes. ASC 740 requires companies to estimate the annual effective tax rate for current year ordinary income. In calculating the effective tax rate, permanent differences between financial reporting and taxable income are factored into the calculation, but temporary differences are not. The estimated annual effective tax rate represents the best estimate of the tax provision in relation to the best estimate of pre-tax ordinary income or loss. The estimated annual effective tax rate is then applied to year-to-date ordinary income or loss to calculate the year-to-date interim tax provision. The Company recorded income tax expense of $3.7 million and $4.3 million for the three and six months ended June 30, 2018, respectively. Tax expense for the three and six months ended June 30, 2018 is primarily the result of an increase in the valuation allowance eliminating the net deferred tax asset and state income taxes from states where the Company does not have net operating loss carryforwards or state minimum taxes, including AMT. The Company recorded income tax expense of $1.0 million and $1.5 million for the three and six months ended June 30, 2017, respectively, primarily the result of the recognition of a deferred tax liability created by the amortization of an indefinite-life intangible asset (goodwill) and amortization of the deferred charge. The deferred tax liability for indefinite-life intangibles cannot be included in the calculation of valuation allowance as these liabilities cannot be considered when determining the realizability of the net deferred tax assets. The deferred charge represents the deferral of income tax expense on inter-company profits that resulted from the sale of mortgages from taxable subsidiaries to IMH prior to 2008. The deferred charge amortization and/or impairment, which does not result in any tax liability to be paid, is calculated based on the change in the estimated fair value of the underlying securitized mortgage collateral during the period. Prior to the adoption of ASU 2016-16 on January 1, 2018, the deferred charge was included in other assets in the accompanying consolidated balance sheets and was amortized as a component of income tax expense in the accompanying consolidated statements of operations. As of December 31, 2017, the Company had estimated federal net operating loss (NOL) carryforwards of approximately $619.9 million. Federal NOL carryforwards begin to expire in 2027. As of December 31, 2017, the Company had estimated California NOL carryforwards of approximately $431.0 million, which begin to expire in 2028. The Company may not be able to realize the maximum benefit due to the nature and tax entities that holds the NOL.

Reconciliation of Earnings Per Share

6 Months Ended

Jun. 30, 2018

Reconciliation of Earnings Per Share

Reconciliation of Earnings Per Share

Note 9.—Reconciliation of Earnings Per Share

Basic net earnings per share is computed by dividing net earnings available to common stockholders (numerator) by the weighted average number of vested, common shares outstanding during the period (denominator). Diluted net earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding plus the effect of dilutive potential common shares outstanding during the period using the if-converted method. Dilutive potential common shares include shares issuable upon conversion of Convertible Notes, dilutive effect of outstanding stock options and deferred stock units (DSUs).


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Numerator for basic (loss) earnings per share:
Net (loss ) earnings	$	(97,398)	$	6,440	$	(93,525)	$	11,067

Numerator for diluted (loss) earnings per share:
Net (loss) earnings	$	(97,398)	$	6,440	$	(93,525)	$	11,067
Interest expense attributable to convertible notes (1)		—		437		—		875
Net (loss) earnings plus interest expense attributable to convertible notes	$	(97,398)	$	6,877	$	(93,525)	$	11,942

Denominator for basic (loss) earnings per share (2):
Basic weighted average common shares outstanding during the period		20,964		19,791		20,958		17,918

Denominator for diluted (loss) earnings per share (2):
Basic weighted average common shares outstanding during the period		20,964		19,791		20,958		17,918
Net effect of dilutive convertible notes (1)		—		1,163		—		1,163
Net effect of dilutive stock options and DSU’s		—		304		—		296
Diluted weighted average common shares		20,964		21,258		20,958		19,377
Net (loss) earnings per common share:
Basic	$	(4.65)	$	0.33	$	(4.46)	$	0.62
Diluted	$	(4.65)	$	0.32	$	(4.46)	$	0.62

(1)

Adjustments to diluted earnings per share for the convertible notes for the three and six months ended June 30, 2018 were excluded from the calculation, as they are anti-dilutive.

(2)

Number of shares presented in thousands.

At June 30, 2018, there were 1.2 million shares attributable to the Convertible Notes and 1.3 million stock options outstanding which were anti-dilutive. At June 30, 2017, there were 683 thousand anti-dilutive stock options outstanding.

Segment Reporting

6 Months Ended

Jun. 30, 2018

Segment Reporting

Segment Reporting

Note 10.—Segment Reporting

The Company has three primary reporting segments which include mortgage lending, long-term mortgage portfolio and real estate services. Unallocated corporate and other administrative costs, including the costs associated with being a public company, are presented in Corporate and other.


Statement of Operations Items for the	Mortgage		Real Estate		Long-term		Corporate
Three Months Ended June 30, 2018:	Lending		Services		Portfolio		and other		Consolidated
Gain on sale of loans, net	$	18,741	$	—	$	—	$	—	$	18,741
Real estate services fees, net		—		1,038		—		—		1,038
Servicing fees, net		9,861		—		—		—		9,861
Gain on mortgage servicing rights, net		167		—		—		—		167
Other revenue		—		—		101		15		116
Intangible asset impairment		(13,450)		—		—		—		(13,450)
Goodwill impairment		(74,662)		—		—		—		(74,662)
Other operating expense		(28,985)		(591)		(111)		(6,837)		(36,524)
Other income (expense)		305		—		1,177		(461)		1,021
Net (loss) earnings before income tax expense	$	(88,023)	$	447	$	1,167	$	(7,283)		(93,692)
Income tax expense										3,706
Net loss									$	(97,398)


Statement of Operations Items for the	Mortgage		Real Estate		Long-term		Corporate
Three Months Ended June 30, 2017:	Lending		Services		Portfolio		and other		Consolidated
Gain on sale of loans, net	$	36,806	$	—	$	—	$	—	$	36,806
Real estate services fees, net		—		1,504		—		—		1,504
Servicing fees, net		7,764		—		—		—		7,764
Loss on mortgage servicing rights, net		(6,669)		—		—		—		(6,669)
Other revenue		5		—		66		157		228
Accretion of contingent consideration		(707)		—		—		—		(707)
Change in fair value of contingent consideration		6,793		—		—		—		6,793
Loss on extinguishment of debt		—		—		(1,265)		—		(1,265)
Other operating expense		(35,230)		(743)		(100)		(3,734)		(39,807)
Other income (expense)		582		—		2,683		(427)		2,838
Net earnings (loss) before income tax expense	$	9,344	$	761	$	1,384	$	(4,004)	$	7,485
Income tax expense										1,045
Net earnings									$	6,440


Statement of Operations Items for the	Mortgage		Real Estate		Long-term		Corporate
Six Months Ended June 30, 2018:	Lending		Services		Portfolio		and other		Consolidated
Gain on sale of loans, net	$	40,223	$	—	$	—	$	—	$	40,223
Real estate services fees, net		—		2,423		—		—		2,423
Servicing fees, net		19,324		—		—		—		19,324
Gain on mortgage servicing rights, net		7,872		—		—		—		7,872
Other revenue		—		—		186		21		207
Intangible asset impairment		(13,450)		—		—		—		(13,450)
Goodwill impairment		(74,662)		—		—		—		(74,662)
Other operating expense		(60,533)		(1,229)		(176)		(10,335)		(72,273)
Other income (expense)		638		—		1,373		(884)		1,127
Net (loss) earnings before income tax expense	$	(80,588)	$	1,194	$	1,383	$	(11,198)		(89,209)
Income tax expense										4,316
Net loss									$	(93,525)


Statement of Operations Items for the	Mortgage		Real Estate		Long-term		Corporate
Six Months Ended June 30, 2017:	Lending		Services		Portfolio		and other		Consolidated
Gain on sale of loans, net	$	74,126	$	—	$	—	$	—	$	74,126
Real estate services fees, net		—		3,137		—		—		3,137
Servicing fees, net		15,083		—		—		—		15,083
Loss on mortgage servicing rights, net		(7,646)		—		—		—		(7,646)
Other revenue		19		—		127		129		275
Accretion of contingent consideration		(1,552)		—		—		—		(1,552)
Change in fair value of contingent consideration		6,254		—		—		—		6,254
Loss on extinguishment of debt		—		—		(1,265)		—		(1,265)
Other operating expense		(73,315)		(1,737)		(186)		(7,742)		(82,980)
Other income (expense)		988		—		7,396		(1,278)		7,106
Net earnings (loss) before income tax expense	$	13,957	$	1,400	$	6,072	$	(8,891)	$	12,538
Income tax expense										1,471
Net earnings									$	11,067


	Mortgage		Real Estate		Long-term		Corporate
Balance Sheet Items as of:	Lending		Services		Portfolio		and other		Consolidated
Total Assets at June 30, 2018 (1)	$	851,509	$	—	$	3,409,536	$	5,177	$	4,266,222
Total Assets at December 31, 2017 (1)	$	992,983	$	251	$	3,678,377	$	10,089	$	4,681,700

(1)

All segment asset balances exclude intercompany balances.

Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies

Commitments and Contingencies

Note 11.—Commitments and Contingencies

Legal Proceedings

The Company is a defendant in or a party to a number of legal actions or proceedings that arise in the ordinary course of business. In some of these actions and proceedings, claims for monetary damages are asserted against the Company. In view of the inherent difficulty of predicting the outcome of such legal actions and proceedings, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss related to each pending matter may be, if any.

In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and estimable. In any case, there may be an exposure to losses in excess of any such amounts whether accrued or not. Any estimated loss is subject to significant judgment and is based upon currently available information, a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimated loss will change from time to time, and actual results may vary significantly from the current estimate. Therefore, an estimate of possible loss represents what the Company believes to be an estimate of possible loss only for certain matters meeting these criteria. It does not represent the Company’s maximum loss exposure.

Based on the Company’s current understanding of these pending legal actions and proceedings, management does not believe that judgments or settlements arising from pending or threatened legal matters, individually or in the aggregate, will have a material adverse effect on the consolidated financial position, operating results or cash flows of the Company. However, in light of the inherent uncertainties involved in these matters, some of which are beyond the Company’s control, and the very large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to the Company’s results of operations or cash flows for any particular reporting period.

The legal matter updates summarized below are ongoing and may have an effect on the Company’s business and future financial condition and results of operations:

On December 7, 2011, a purported class action was filed in the Circuit Court of Baltimore City, entitled Timm, v. Impac Mortgage Holdings, Inc., purportedly on behalf of holders of the Company’s 9.375% Series B Cumulative Redeemable Preferred Stock (Preferred B) and 9.125% Series C Cumulative Redeemable Preferred Stock (Preferred C) who did not tender their stock in connection with the Company’s 2009 completion of its Offer to Purchase and Consent Solicitation. The action sought the payment of certain quarterly dividends for the Preferred B and C holders, the unwinding of the consents, and reinstatement of all rights under the 2004 Preferred Stock Articles Supplementary, including the cumulative dividend on the Preferred B and C stock, and the election of two directors by the Preferred B and C holders. The action also sought punitive damages and legal expenses. On July 16, 2018, the Court entered a Judgement Order whereby it (1) declared and entered judgment in favor of all defendants on all claims related to the Preferred C holders and all claims against all individual defendants thereby affirming the validity of the 2009 amendments to the Series B Articles Supplementary; (2) declared its interpretation of the voting provision language in the Preferred B Articles Supplementary to mean that consent of two-thirds of the Preferred B stockholders was required to approve the 2009 amendments to the Preferred B Articles Supplementary, which consent was not obtained, thus rendering the amendments invalid and leaving the 2004 Preferred B Articles Supplementary in effect; (3) ordered the Company to hold a special election within sixty days for the Preferred B stockholders to elect two directors to the Board of Directors pursuant to the 2004 Preferred B Articles Supplementary (which Directors will remain on the Company’s Board of Directors until such time as all accumulated dividends on the Preferred B have been paid or set aside for payment) and, (4) declared that the Company is required to pay three quarters of dividends on the Preferred B stock under the 2004 Articles Supplementary (approximately, $1.2 million, but did not order the Company to make any payment at this time). The Court declined to certify any class pending the outcome of appeals and certified its Judgment Order for immediate appeal. The Company has appealed the Judgment Order and intends to seek a stay of the order requiring the Company to hold a special meeting for the election of two directors pending the outcome of appeals. As a result of the Judgement Order, the following terms of Preferred B are also deemed to be reinstated: 1) unpaid cash dividends on the Series B at a rate of 9.375% per year will accrue and be cumulative on a quarterly basis, 2) dividends and distributions on, and the repurchase of stock ranking junior (such as our common stock) or on parity to the Preferred B are prohibited (except the dividends in the form of shares of stock) unless full cumulative dividends on the Preferred B stock have been paid or set aside for payment, 3) the Company may not redeem less than all of the outstanding Preferred B stock unless full cumulative dividends on the Preferred B stock are paid or set aside for payment, 4) the Company may not, without approval of at least two thirds of the Preferred B create or authorize any class or series of capital stock ranking senior to the Preferred B or amend provisions of the Company’s charter so as to materially and adversely affect the terms of the Preferred B, subject to certain exceptions, and 5) upon any liquidation, dissolution or winding up of the Company, the Preferred B are entitled to be paid before any distribution of assets to the common stock or junior preferred stock.

On April 30, 2012, a purported class action was filed entitled Marentes v. Impac Mortgage Holdings, Inc., alleging that certain loan modification activities of the Company constitute an unfair business practice, false advertising and marketing, and that the fees charged are improper. The complaint seeks unspecified damages, restitution, injunctive relief, attorney’s fees and prejudgment interest. On August 22, 2012, the plaintiff filed an amended complaint adding Impac Funding Corporation as a defendant and on October 2, 2012, the plaintiff dismissed Impac Mortgage Holdings, Inc., without prejudice. The trial was bifurcated with phase 1 scheduled to determine the proper measure of restitution, if the court later determines in phase 2 that any relief is proper, and phase 2 scheduled to determine whether the defendant is liable for any restitution and, if so, the actual calculation of restitution under the formula determined in phase 1. The phase 1 trial was held on June 29, 2018, and the court agreed with the defendant and ruled that if liability is determined under phase 2, the proper measure of restitution is the time value of the fees paid by the plaintiffs from the time they were paid to the time the fees were lawfully collected by the defendant.

On November 1, 2016, a qui tam action was filed under seal entitled United States of America ex rel Jeremy Calva, et al. v. Impac Secured Assets Corp., et al. The matter was unsealed on November 3, 2017. The complaint alleged the defendants violated the False Claims Act by misrepresenting loan delinquency rates for loans deposited into certain securitization trusts, not notifying the trustee of certain trusts that delinquent loans were deposited into the trusts, not notifying anyone that Company affiliates were the originator of most loans as well as the sponsor, depositor, issuer, and master servicer of certain trusts, causing government entities to buy bonds in those trusts. The court granted the defendants’ motion to dismiss the complaint on June 20, 2018.

On April 20, 2017, a purported class action was filed in the United States District Court, Central District of California, entitled Nguyen v. Impac Mortgage Corp. dba CashCall Mortgage et al. The plaintiffs contend the defendants did not pay purported class members overtime compensation or provide meal and rest breaks, as required by law. The action seeks to invalidate any waiver signed by a purported class member of their right to bring a class action and seeks damages, restitution, penalties, attorney’s fees, interest, and an injunction against unfair, deceptive, and unlawful activities. The defendants have filed a motion to compel arbitration of the claims.

In 2012, 2013, and 2014, the Company received letters from Deutsche Bank seeking indemnification related to mortgage backed securities bonds issued, originated or sold by ISAC, IFC, IMH Assets Corp. and the Company, arising from cases filed against Deutsche Bank in New York. In July 2018, the Company received an additional indemnification notice from Deutsche Bank as a result of a case filed against Deutsche Bank in Orange County Superior Court in 2016, entitled BlackRock Balanced Capital Portfolio (FI) et al. v. Deutsche Bank.

In 2001, Baker, et al. v. Century Financial Group, et al., was filed in the Circuit Court of Clay County, Missouri, as a putative class action against the Company, Century Financial, and others claiming violations of Missouri's Second Mortgage Loan Act. Plaintiffs seek on behalf of themselves and the members of the putative class, among other things, disgorgement or restitution of all allegedly improperly-collected charges, the right to rescind all affected loan transactions, the right to offset any finance charges, closing costs, points or other loan fees paid against the principal amounts due on the loans if rescinded, actual and punitive damages, and attorneys' fees. In April 2018, the court of appeals reversed the lower court’s dismissal of the case on statute of limitations grounds. In July 2018, the defendants filed a petition for Missouri’s Supreme Court to review the court of appeal’s decision.

In July 2018, the Company received a letter from a former employee addressed to the California Labor & Workforce Development Agency alleging the Company violated various California Labor Code provisions, including, but not limited to, not paying employees for all time worked, including overtime, not providing meal and rest breaks, and not providing accurate wage statements. The letter requested to be notified if the Agency intended to investigate the matter and, if not, the former employee would pursue penalties under the Private Attorneys General Act on behalf of aggrieved employees.

The Company is a party to other litigation and claims which are normal in the course of our operations. While the results of such other litigation and claims cannot be predicted with certainty, we believe the final outcome of such matters will not have a material adverse effect on our financial condition or results of operations. The Company believes that it has meritorious defenses to the claims and intends to defend these claims vigorously and as such the Company believes the final outcome of such matters will not have a material adverse effect on its financial condition or results of operations. Nevertheless, litigation is uncertain and the Company may not prevail in the lawsuits and can express no opinion as to their ultimate resolution. An adverse judgment in any of these matters could have a material adverse effect on the Company’s financial position and results of operations.

Please refer to IMH’s report on Form 10-K for the year ended December 31, 2017 for a description of litigation and claims.

Repurchase Reserve

When the Company sells mortgage loans, it makes customary representations and warranties to the purchasers about various characteristics of each loan such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. The Company’s whole loan sale agreements generally require it to repurchase loans if the Company breached a representation or warranty given to the loan purchaser.

The following table summarizes the repurchase reserve activity, within other liabilities on the consolidated balance sheets, related to previously sold loans for the six months ended June 30, 2018 and year ended December 31, 2017:


	June 30,		December 31,
	2018		2017
Beginning balance	$	6,020	$	5,408
Provision for repurchases		1,594		1,557
Settlements		(1,419)		(945)
Total repurchase reserve	$	6,195	$	6,020

Short-Term Loan Commitments

The Company uses a portion of its warehouse borrowing capacity to provide secured short-term revolving financing to small and medium-size mortgage originators to finance mortgage loans from the closing of the mortgage loans until sold to investors (Finance Receivables). As of June 30, 2018, the warehouse lending operations had warehouse lines to non-affiliated customers for borrowings up to $112.0 million, of which there was an outstanding balance of $37.2 million in finance receivables compared to $41.8 million as of December 31, 2017. The finance receivables are generally secured by residential mortgage loans as well as personal guarantees.

Commitments to Extend Credit

The Company enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. These loan commitments are treated as derivatives and are carried at fair value. See Note 7. — Fair Value of Financial Instruments for more information.

Equity and Share Based Payments

6 Months Ended

Jun. 30, 2018

Equity and Share Based Payments

Equity and Share Based Payments

Note 12.—Equity and Share Based Payments

Redeemable Preferred Stock

At December 31, 2017, the Company had outstanding $51.8 million liquidation preference of Series B and Series C Preferred Stock. The holders of each series of Preferred Stock, which are non‑voting and redeemable at the option of the Company, retain the right to a $25.00 per share liquidation preference in the event of a liquidation of the Company and the right to receive dividends on the Preferred Stock if any such dividends are declared.

As disclosed previously within Note 11.—Commitments and Contingencies, on July 16, 2018, the court entered its Judgement Order and Memorandum Opinion on the matter entitled Timm, v. Impac Mortgage Holdings, Inc., a purported class action purportedly on behalf of holders of the Company’s 9.375% Series B Cumulative Redeemable Preferred Stock (Preferred B) and 9.125% Series C Cumulative Redeemable Preferred Stock (Preferred C). The judgment declared (among other items disclosed in Note 11) that two-thirds of the Preferred B holders were required to approve the 2009 amendments to the Preferred B Articles Supplementary, which was not obtained, rendering the 2009 amendments to the Preferred B Articles Supplementary invalid and leaving the 2004 Preferred B Articles Supplementary in effect. As a result of the Judgement Order, all rights of the Preferred B holders under the 2004 Articles are deemed reinstated. Subject to an appeal, the Company has cumulative undeclared dividends in arrears of approximately $13.6 million, or approximately $20.51 per outstanding share of Preferred B, increasing the liquidation value to approximately $45.51 per share. Additionally, every quarter the cumulative undeclared dividends in arrears will increase by $0.5859 per share, or approximately $390 thousand. The liquidation preference, inclusive of the cumulative undeclared dividends in arrears, is only payable upon voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs.

Share Based Payments

The following table summarizes activity, pricing and other information for the Company’s stock options for the six months ended June 30, 2018:


		Weighted-
		Average
	Number of	Exercise
	Shares	Price
Options outstanding at December 31, 2017	1,582,754	$	13.61
Options granted	30,000		8.85
Options exercised	(76,713)		4.17
Options forfeited/cancelled	(209,380)		15.93
Options outstanding at June 30, 2018	1,326,661		13.69
Options exercisable at June 30, 2018	811,834	$	12.63

As of June 30, 2018, there was approximately $1.8 million of total unrecognized compensation cost related to stock option compensation arrangements granted under the plan, net of estimated forfeitures. That cost is expected to be recognized over the remaining weighted average period of 1.7 years.

The following table summarizes activity, pricing and other information for the Company’s deferred stock units (DSU’s), also referred to as deferred stock units as the issuance of the stock is deferred until termination of service, for the six months ended June 30, 2018:


		Weighted-
		Average
	Number of	Grant Date
	Shares	Fair Value
DSU's outstanding at December 31, 2017	100,750	$	10.41
DSU’s granted	—		—
DSU’s exercised	—		—
DSU’s forfeited/cancelled	—		—
DSU’s outstanding at June 30, 2018	100,750	$	10.41

As of June 30, 2018, there was approximately $179 thousand of total unrecognized compensation cost related to the DSU compensation arrangements granted under the plan. That cost is expected to be recognized over a weighted average period of 2.0 years.

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2018
Subsequent Events
Subsequent Events	Note 13.—Subsequent Events On July 17, 2018, the stockholders of the Company approved an amendment to the Company’s 2010 Omnibus Incentive Plan, as amended (the “Plan”), increasing the number of shares available under the Plan by 300,000 shares. Awards under the Plan may include incentive stock options, nonqualified stock options, stock appreciation rights, restricted shares of common stock, restricted stock units, performance share or unit awards, other stock-based awards and cash-based incentive awards. The increase in shares available under the Plan is designed to enhance the Company's flexibility in granting stock options and other awards to officers, employees, non-employee directors and other key persons and to ensure that the Company can continue to grant stock options and other awards to such persons at levels determined to be appropriate by the Company’s compensation committee. Effective August 7, 2018, the Board of Directors appointed George A. Mangiaracina as Chief Executive Officer of the Company. Mr. Mangiaracina also serves as President, to which he was appointed on March 14, 2018. Subsequent events have been evaluated through the date of this filing.

Summary of Business and Financial Statement Presentation (Policies)	6 Months Ended
	Jun. 30, 2018
Summary of Business and Financial Statement Presentation
Financial Statement Presentation	Financial Statement Presentation The accompanying unaudited consolidated financial statements of IMH and its subsidiaries (as defined above) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for the six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. These interim period condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the United States Securities and Exchange Commission (SEC). All significant intercompany balances and transactions have been eliminated in consolidation. In addition, certain amounts in the prior periods’ consolidated financial statements have been reclassified to conform to the current period presentation. Management has made a number of material estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. Additionally, other items affected by such estimates and assumptions include the valuation of trust assets and trust liabilities, contingencies, the estimated obligation of repurchase liabilities related to sold loans, the valuation of long-term debt, mortgage servicing rights, goodwill and intangible asset valuation and impairment, mortgage loans held-for-sale and derivative instruments, including interest rate lock commitments (IRLC). Actual results could differ from those estimates and assumptions.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Accounting Standards Update (ASU) No. 2014-09, 2015-04, 2016-08, 2016-10, 2016-12, 2016-20, 2017-13 and 2017-14, collectively implemented as Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), “Revenue from Contracts with Customers (Topic 606)”, provides guidance for revenue recognition. This ASC’s core principle requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects consideration to which the company expects to be entitled in exchange for those goods or services. The standard also clarifies the principal versus agent considerations, providing the evaluation must focus on whether the entity has control of the goods or services before they are transferred to the customer. The new standard permits the use of either the modified retrospective or full retrospective transition method. The Company's revenue is primarily generated from loan originations, loan servicing and real estate services. Origination revenue is comprised of fee income earned at origination of a loan, interest income earned for the period the loans are held and gain on sale on loans upon disposition of the loan. Servicing revenue is comprised of servicing fees and other ancillary fees in connection with our servicing activities. Real estate services revenue is comprised of income earned from various real estate services and support such as loss mitigation, loan modification, surveillance and disposition and monitoring services. The Company performed a review of the guidance as compared to current accounting policies and have evaluated all services rendered to customers as well as underlying contracts to determine the impact of this standard to the Company’s revenue recognition process. The majority of services rendered by the Company in connection with loan originations, loan servicing and the long-term mortgage portfolio are not within the scope of FASB ASC 606. However, the Company identified real estate services revenues that were within the scope of FASB ASC 606 and the impact upon adoption was not materially different from the previous revenue recognition processes. The Company adopted this guidance on January 1, 2018, and the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." The amendments in ASU 2016-01, among other things, requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables); requires separate presentation in other comprehensive income for the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The update is effective for interim and annual reporting periods beginning after December 15, 2017 on a modified retrospective basis, using a cumulative-effect adjustment to the balance sheet as of the beginning of the year adopted. The Company adopted this guidance on January 1, 2018, which resulted in a $27.0 million reclass, net of tax, between opening retained earnings and other comprehensive earnings (loss) within stockholders’ equity. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” The update amends the guidance in Accounting Standards Codification 230, Statement of Cash Flows, and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to eight specific cash flow issues. In addition, in November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash (ASU 2016-18). This ASU clarifies certain existing principles in FASB ASC 230, including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. These ASUs were effective for the Company’s fiscal year beginning after December 15, 2017 and subsequent interim periods. The Company adopted this guidance retrospectively on January 1, 2018. The adoption of this ASU did not have a material impact on the consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” This ASU requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. This ASU is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. The adoption of this standard was applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company adopted this guidance on January 1, 2018, which resulted in a $7.8 million cumulative effect adjustment to opening retained earnings. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment. ASU 2017-04 amends Topic 350 to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. This update requires the performance of an annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The guidance is effective for annual periods beginning after December 15, 2019, including interim periods within those periods, with early adoption permitted. The Company early adopted this guidance prospectively on June 30, 2018. See Note 4.—Goodwill and Intangible Assets for further discussion on goodwill impairment testing. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” The update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This ASU is effective for annual reporting periods beginning after December 15, 2017. The Company adopted this guidance on January 1, 2018, and the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU allows a reclassification from accumulated other comprehensive earnings (AOCE) to retained earnings for the stranded tax effects caused by the revaluation of deferred taxes resulting from the newly enacted corporate tax rate in the Tax Cuts and Jobs Act. The ASU is effective in years beginning after December 15, 2018, but permits early adoption in a period for which financial statements have not yet been issued. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. In February 2018, the FASB ASU 2018-03, “Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This amendment clarifies certain aspects of the new guidance (ASU 2016-01) on recognizing and measuring financial instruments and presentation requirements for certain fair value option liabilities. ASU 2018-03 is effective for interim periods beginning after June 15, 2018 and will be effective for our 2018 third quarter and annual reporting period. The standard requires entities to record a cumulative-effect adjustment to the statement of financial position at the beginning of the fiscal year in which the amendments are adopted. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118.” This ASU codifies existing SEC guidance contained in SEC Staff Accounting Bulletin No. 118 (SAB 118), which expresses the view of the staff regarding application of existing guidance for the accounting for income taxes as it relates to the enactment of the Tax Cuts and Jobs Act (the TCJA) which was signed into law in the fourth quarter of 2017. In accordance with ASU 2018-05, the Company has recorded provisional estimates for the accounting impacts of the TCJA, deferred tax remeasurements, and other items, due to the uncertainty regarding how these provisions are to be implemented and additional anticipated forthcoming guidance. As management completes the analysis of the impacts of the TCJA, the Company may refine its current estimate and make adjustments, which will be recognized through income in the period such adjustments are identified, as required by ASU 2018-05. In June 2018, the FASB issued ASU 2018-07, “Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”, which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. This ASU specifies that Topic 718 apply to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 is effective for public business entities for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

Mortgage Loans Held-for-Sale (Tables)

6 Months Ended

Jun. 30, 2018

Mortgage Loans Held-for-Sale

Summary of the unpaid principal balance (UPB ) of mortgage loans held-for-sale by type


	June 30,		December 31,
	2018		2017
Government (1)	$	209,133	$	263,512
Conventional (2)		98,172		193,055
Other (3)		160,066		93,012
Fair value adjustment (4)		13,920		19,202
Total mortgage loans held for sale	$	481,291	$	568,781

(1)

Includes all government-insured loans including Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA).

(2)

Includes loans eligible for sale to Federal National Mortgage Association (Fannie Mae or FNMA) and Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC).

(3)

Includes non-qualified mortgages (NonQM) and jumbo loans.

(4)

Changes in fair value are included in gain on sale of loans, net in the accompanying consolidated statements of operations.

Schedule of gain on loans held-for-sale (LHFS)


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Gain on sale of mortgage loans	$	28,641	$	49,282	$	57,979	$	87,522
Premium from servicing retained loan sales		6,273		12,807		16,756		24,873
Unrealized gains (losses) from derivative financial instruments		1,435		1,896		(665)		751
Realized (losses) gains from derivative financial instruments		(227)		(6,167)		11,818		(5,042)
Mark to market (loss) gain on LHFS		(391)		4,394		(5,282)		9,598
Direct origination expenses, net		(15,773)		(25,314)		(38,789)		(45,150)
(Provision) recovery for repurchases		(1,217)		(92)		(1,594)		1,574
Total gain on sale of loans, net	$	18,741	$	36,806	$	40,223	$	74,126

Mortgage Servicing Rights (Tables)

6 Months Ended

Jun. 30, 2018

Mortgage Servicing Rights

Schedule of changes in the fair value of MSRs


	June 30,		December 31,
	2018		2017
Balance at beginning of period	$	154,405	$	131,537
Additions from servicing retained loan sales		16,756		56,049
Addition from purchases		—		5,618
Reductions from bulk sales (1)		—		(895)
Changes in fair value (2)		9,572		(37,904)
Fair value of MSRs at end of period	$	180,733	$	154,405

(1)

In the first quarter of 2017, the Company sold substantially all of its NonQM MSRs.

(2)

Changes in fair value are included within gain (loss) on MSRs, net in the accompanying consolidated statements of operations.

Schedule of the outstanding loans serviced by entity


	June 30,		December 31,
	2018		2017
Government insured	$	3,606,688	$	2,834,680
Conventional (1)		13,177,521		13,493,463
NonQM		1,937		1,957
Total loans serviced	$	16,786,146	$	16,330,100

(1)

Schedule of hypothetical changes in the fair values of MSRs


	June 30,		December 31,
Mortgage Servicing Rights Sensitivity Analysis	2018		2017
Fair value of MSRs	$	180,733	$	154,405
Prepayment Speed:
Decrease in fair value from 10% adverse change		(3,464)		(5,643)
Decrease in fair value from 20% adverse change		(7,178)		(11,275)
Decrease in fair value from 30% adverse change		(11,101)		(16,807)
Discount Rate:
Decrease in fair value from 10% adverse change		(6,759)		(5,461)
Decrease in fair value from 20% adverse change		(13,046)		(10,555)
Decrease in fair value from 30% adverse change		(18,905)		(15,316)

Schedule of Gain (loss) on mortgage servicing rights


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Change in fair value of mortgage servicing rights	$	393	$	(7,739)	$	9,572	$	(8,861)
Gain (loss) on sale of mortgage servicing rights		—		331		—		(82)
Realized and unrealized (losses) gains from hedging instruments		(226)		739		(1,700)		1,297
Gain (loss) on mortgage servicing rights, net	$	167	$	(6,669)	$	7,872	$	(7,646)

Schedule of components of servicing income


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018			2017	2018		2017
Contractual servicing fees	$	11,326	$	9,011	$	22,864	$	17,377
Late and ancillary fees		167		73		318		158
Subservicing and other costs		(1,632)		(1,320)		(3,858)		(2,452)
Servicing fees, net	$	9,861	$	7,764	$	19,324	$	15,083

Goodwill and Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets.

Summary of changes in carrying amount of goodwill


Balance at December 31, 2017	$	104,587
Impairment		(74,662)
Balance at June 30, 2018	$	29,925

Summary of intangible assets acquired


	Net Carrying Amount		Accumulated				Net Carrying Amount		Remaining
	at December 31, 2017		Amortization		Impairment		at June 30, 2018		Life
Intangible assets:
Trademark	$	14,035	$	(585)	$	(13,450)	$	—	—
Customer relationships		6,027		(754)		—		5,273	3.5
Non-compete agreement		1,520		(760)		—		760	0.5
Total intangible assets acquired	$	21,582	$	(2,099)	$	(13,450)	$	6,033	3.1

Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Instrument [Line Items]

Schedule of information on warehouse borrowings


	Maximum		Balance Outstanding At
	Borrowing		June 30,		December 31,
	Capacity		2018		2017		Maturity Date
Short-term borrowings:
Repurchase agreement 1	$	150,000	$	122,557	$	100,630	June 14, 2019
Repurchase agreement 2 (1)		35,000		30,846		31,632	September 10, 2018
Repurchase agreement 3 (2)		225,000		104,648		154,020	December 21, 2018
Repurchase agreement 4 (3)		250,000		36,875		152,772	July 12, 2019
Repurchase agreement 5		175,000		107,514		88,920	January 31, 2019
Repurchase agreement 6		100,000		56,722		47,389	June 27, 2019
Repurchase agreement 7		50,000		23,384		—	December 26, 2018
Total warehouse borrowings	$	985,000	$	482,546	$	575,363

(1)

In July 2018, the maturity of the line was extended to September 10, 2018.

(2)

As of June 30, 2018 and December 31, 2017, $37.2 million and $41.8 million, respectively, are associated with finance receivables made to the Company’s warehouse customers.

(3)

In July 2018, the maturity of the line was extended to July 12, 2019.

Junior Subordinated Notes

Debt Instrument [Line Items]

Schedule of remaining principal balance and fair value


	June 30,		December 31,
	2018		2017
Junior Subordinated Notes (1)	$	62,000	$	62,000
Fair value adjustment		(16,213)		(17,018)
Total Junior Subordinated Notes	$	45,787	$	44,982

(1)

Stated maturity of March 2034; requires quarterly distributions at a variable rate of 3‑month LIBOR plus 3.75% per annum.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21475-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=64930739&loc=d3e28878-108400

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21538-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28541-108399

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=64930785&loc=d3e28551-108399

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=84159872&loc=d3e21521-112644

+ Details

Securitized Mortgage Trusts (Tables)

6 Months Ended

Jun. 30, 2018

Securitized Mortgage Trusts

Schedule of trust assets


	June 30,		December 31,
	2018		2017
Securitized mortgage collateral	$	3,401,037	$	3,662,008
REO		8,440		8,542
Total securitized mortgage trust assets	$	3,409,477	$	3,670,550

Schedule of trust liabilities


	June 30,		December 31,
	2018		2017
Securitized mortgage borrowings	$	3,393,721	$	3,653,265

Schedule of changes in fair value of net trust assets, including trust REO losses


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Change in fair value of net trust assets, excluding REO	$	1,807	$	(2,213)	$	(2,524)	$	2,573
(Losses) gains from REO		(1,590)		4,218		603		5,751
Change in fair value of net trust assets, including trust REO (losses) gains	$	217	$	2,005	$	(1,921)	$	8,324

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value of Financial Instruments

Schedule of estimated fair value of financial instruments included in consolidated financial statements


	June 30, 2018								December 31, 2017
	Carrying		Estimated Fair Value						Carrying		Estimated Fair Value
	Amount		Level 1		Level 2		Level 3		Amount		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	32,960	$	32,960	$	—	$	—	$	33,223	$	33,223	$	—	$	—
Restricted cash		4,606		4,606		—		—		5,876		5,876		—		—
Mortgage loans held-for-sale		481,291		—		481,291		—		568,781		—		568,781		—
Finance receivables		37,215		—		37,215		—		41,777		—		41,777		—
Mortgage servicing rights		180,733		—		—		180,733		154,405		—		—		154,405
Derivative assets, lending, net		4,538		—		—		4,538		4,777		—		420		4,357
Securitized mortgage collateral		3,401,037		—		—		3,401,037		3,662,008		—		—		3,662,008

Liabilities
Warehouse borrowings	$	482,546	$	—	$	482,546	$	—	$	575,363	$	—	$	575,363	$	—
MSR financings		62,000		—		—		62,000		35,133		—		—		35,133
Convertible notes		24,979		—		—		24,979		24,974		—		—		24,974
Contingent consideration		—		—		—		—		554		—		—		554
Long-term debt		45,787		—		—		45,787		44,982		—		—		44,982
Securitized mortgage borrowings		3,393,721		—		—		3,393,721		3,653,265		—		—		3,653,265
Derivative liabilities, lending, net		179		—		179		—		—		—		—		—

Schedule of assets and liabilities that are measured at estimated fair value on recurring basis


	Recurring Fair Value Measurements
	June 30, 2018						December 31, 2017
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Mortgage loans held-for-sale	$	—	$	481,291	$	—	$	—	$	568,781	$	—
Derivative assets, lending, net (1)		—		—		4,538		—		420		4,357
Mortgage servicing rights		—		—		180,733		—		—		154,405
Securitized mortgage collateral		—		—		3,401,037		—		—		3,662,008
Total assets at fair value	$	—	$	481,291	$	3,586,308	$	—	$	569,201	$	3,820,770
Liabilities
Securitized mortgage borrowings	$	—	$	—	$	3,393,721	$	—	$	—	$	3,653,265
Long-term debt		—		—		45,787		—		—		44,982
Contingent consideration		—		—		—		—		—		554
Derivative liabilities, lending, net (2)		—		179		—		—		—		—
Total liabilities at fair value	$	—	$	179	$	3,439,508	$	—	$	—	$	3,698,801

(1)

(2)

At June 30, 2018, derivative liabilities, lending, net included $179 thousand in hedging instruments and is included in other liabilities in the accompanying consolidated balance sheets.

Schedule of reconciliation for all assets and liabilities measured at estimated fair value on recurring basis using significant unobservable inputs (Level 3)


	Level 3 Recurring Fair Value Measurements
	For the Three Months Ended June 30, 2018

							Interest
	Securitized		Securitized		Mortgage		rate lock		Long-
	mortgage		mortgage		servicing		commitments,		term
	collateral		borrowings		rights		net		debt
Fair value, March 31, 2018	$	3,513,901	$	(3,508,477)	$	174,067	$	3,854	$	(45,337)
Total gains (losses) included in earnings:
Interest income (1)		11,286		—		—		—		—
Interest expense (1)		—		(17,117)		—		—		(182)
Change in fair value		12,686		(10,879)		393		684		258
Change in fair value of instrument specific credit risk		—		—		—		—		(526)	(2)
Total gains (losses) included in earnings		23,972		(27,996)		393		684		(450)
Transfers in and/or out of Level 3		—		—		—		—		—
Purchases, issuances and settlements:
Purchases		—		—		—		—		—
Issuances		—		—		6,273		—		—
Settlements		(136,836)		142,752		—		—		—
Fair value, June 30, 2018	$	3,401,037	$	(3,393,721)	$	180,733	$	4,538	$	(45,787)
Unrealized gains (losses) still held (3)	$	(490,822)	$	2,666,746	$	180,733	$	4,538	$	16,213

(1)

(2)

(3)

Represents the amount of unrealized gains (losses) relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2018.


	Level 3 Recurring Fair Value Measurements
	For the Three Months Ended June 30, 2017

							Interest
	Securitized		Securitized		Mortgage		rate lock		Long-
	mortgage		mortgage		servicing		commitments,		term		Contingent
	collateral		borrowings		rights		net		debt		consideration
Fair value, March 31, 2017	$	3,903,336	$	(3,892,668)	$	141,586	$	12,333	$	(50,044)	$	(24,498)
Total gains (losses) included in earnings:
Interest income (1)		14,101		—		—		—		—		—
Interest expense (1)		—		(36,505)		—		—		(161)		—
Change in fair value		50,168		(52,381)		(7,739)		(2,787)		(265)		6,086
Total (losses) gains included in earnings		64,269		(88,886)		(7,739)		(2,787)		(426)		6,086
Transfers in and/or out of Level 3		—		—		—		—		—		—
Purchases, issuances and settlements:
Purchases		—		—		5,619		—		—		—
Issuances		—		—		12,807		—		—		—
Settlements		(191,421)		214,035		—		—		5,934		3,486
Fair value, June 30, 2017	$	3,776,184	$	(3,767,519)	$	152,273	$	9,546	$	(44,536)	$	(14,926)
Unrealized gains (losses) still held (2)	$	(729,834)	$	2,888,635	$	152,273	$	9,546	$	17,464	$	(14,926)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $2.1 million for the three months ended June 30, 2017. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings.

(2)

Represents the amount of unrealized gains (losses) relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2017.


	Level 3 Recurring Fair Value Measurements
	For the Six Months Ended June 30, 2018

							Interest
	Securitized		Securitized		Mortgage		rate lock		Long-
	mortgage		mortgage		servicing		commitments,		term			Contingent
	collateral		borrowings		rights		net		debt			consideration
Fair value, December 31, 2017	$	3,662,008	$	(3,653,265)	$	154,405	$	4,357	$	(44,982)		$	(554)
Total gains (losses) included in earnings:
Interest income (1)		16,974		—		—		—		—			—
Interest expense (1)		—		(37,197)		—		—		(321)			—
Change in fair value		(20,069)		17,545		9,572		181		1,481			—
Change in fair value of instrument specific credit risk		—		—		—		—		(1,965)	(2)		—
Total gains (losses) included in earnings		(3,095)		(19,652)		9,572		181		(805)			—
Transfers in and/or out of Level 3		—		—		—		—		—			—
Purchases, issuances and settlements:
Purchases		—		—		—		—		—			—
Issuances		—		—		16,756		—		—			—
Settlements		(257,876)		279,196		—		—		—			554
Fair value, June 30, 2018	$	3,401,037	$	(3,393,721)	$	180,733	$	4,538	$	(45,787)		$	—

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $4.0 million for six months ended June 30, 2018. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings.

(2)


	Level 3 Recurring Fair Value Measurements
	For the Six Months Ended June 30, 2017

							Interest
	Securitized		Securitized		Mortgage		rate lock		Long-
	mortgage		mortgage		servicing		commitments,		term		Contingent
	collateral		borrowings		rights		net		debt		consideration
Fair value, December 31, 2016	$	4,021,891	$	(4,017,603)	$	131,537	$	11,169	$	(47,207)	$	(31,072)
Total gains (losses) included in earnings:
Interest income (1)		29,585		—		—		—		—		—
Interest expense (1)		—		(77,200)		—		—		(502)		—
Change in fair value		101,220		(98,647)		(8,861)		(1,623)		(2,761)		4,702
Total gains (losses) included in earnings		130,805		(175,847)		(8,861)		(1,623)		(3,263)		4,702
Transfers in and/or out of Level 3		—		—		—		—		—		—
Purchases, issuances and settlements:
Purchases		—		—		5,619		—		—		—
Issuances		—		—		24,873		—		—		—
Settlements		(376,512)		425,931		(895)		—		5,934		11,444
Fair value, June 30, 2017	$	3,776,184	$	(3,767,519)	$	152,273	$	9,546	$	(44,536)	$	(14,926)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $4.2 million for the six months ended June 30, 2017. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations is primarily from contractual interest on the securitized mortgage collateral and borrowings.

Schedule of quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and non-recurring basis


	Estimated		Valuation	Unobservable	Range of		Weighted
Financial Instrument	Fair Value		Technique	Input	Inputs		Average
Assets and liabilities backed by real estate
Securitized mortgage collateral, and	$	3,401,037	DCF	Prepayment rates	2.6 - 21.0	%	8.6	%
Securitized mortgage borrowings		(3,393,721)		Default rates	0.01 - 4.0	%	1.5	%
				Loss severities	6.6 - 86.7	%	42.9	%
				Discount rates	3.0 - 25.0	%	4.4	%
Other assets and liabilities
Mortgage servicing rights	$	180,733	DCF	Discount rate	8.9 - 14.0	%	9.7	%
				Prepayment rates	6.8 - 88.8	%	9.7	%
Derivative assets - IRLCs, net		4,538	Market pricing	Pull-through rate	7.8 - 99.9	%	74.4	%
Long-term debt		(45,787)	DCF	Discount rate	10.0	%	10.0	%

DCF = Discounted Cash Flow

Schedule of changes in recurring fair value measurements included in net earnings


	Recurring Fair Value Measurements
	Changes in Fair Value Included in Net Earnings
	For the Three Months Ended June 30, 2018
					Change in Fair Value of
	Interest		Interest		Net Trust		Long-term		Other Revenue		Gain on Sale
	Income (1)		Expense (1)		Assets		Debt		and Expense		of Loans, net		Total
Securitized mortgage collateral	$	11,286	$	—	$	12,686	$	—	$	—	$	—	$	23,972
Securitized mortgage borrowings		—		(17,117)		(10,879)		—		—		—		(27,996)
Derivative liabilities, net, securitized trusts		—		—		—		—		—		—		—
Long-term debt		—		(182)		—		258		—		—		76
Mortgage servicing rights (2)		—		—		—		—		393		—		393
Mortgage loans held-for-sale		—		—		—		—		—		(391)		(391)
Derivative assets — IRLCs		—		—		—		—		—		684		684
Derivative liabilities — Hedging Instruments		—		—		—		—		(38)		751		713
Total	$	11,286	$	(17,299)	$	1,807	$	258	$	355	$	1,044	$	(2,549)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities.

(2)

Included in loss on MSRs, net in the consolidated statements of operations.


	Recurring Fair Value Measurements
	Changes in Fair Value Included in Net Earnings
	For the Three Months Ended June 30, 2017
					Change in Fair Value of
	Interest		Interest		Net Trust		Long-term		Other		Gain on Sale
	Income (1)		Expense (1)		Assets		Debt		Revenue		of Loans, net		Total
Securitized mortgage collateral	$	14,101	$	—	$	50,168	$	—	$	—	$	—	$	64,269
Securitized mortgage borrowings		—		(36,505)		(52,381)		—		—		—		(88,886)
Derivative liabilities, net, securitized trusts		—		—		—		—		—		—		—
Long-term debt		—		(161)		—		(265)		—		—		(426)
Mortgage servicing rights (2)		—		—		—		—		(7,739)		—		(7,739)
Contingent consideration		—		—		—		—		6,086		—		6,086
Mortgage loans held-for-sale		—		—		—		—		—		4,394		4,394
Derivative assets — IRLCs		—		—		—		—		—		(2,787)		(2,787)
Derivative liabilities — Hedging Instruments		—		—		—		—		(1,305)		4,683		3,378
Total	$	14,101	$	(36,666)	$	(2,213)	$	(265)	$	(2,958)	$	6,290	$	(21,711)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities.

(2)

Included in loss on MSRs, net in the consolidated statements of operations.

The following tables present the changes in recurring fair value measurements included in net earnings for the six months ended June 30, 2018 and 2017:


	Recurring Fair Value Measurements
	Changes in Fair Value Included in Net Earnings
	For the Six Months Ended June 30, 2018
					Change in Fair Value of
	Interest		Interest		Net Trust			Long-term		Other Revenue		Gain on Sale
	Income (1)		Expense (1)		Assets			Debt		and Expense		of Loans, net		Total
Securitized mortgage collateral	$	16,974	$	—	$	(20,069)		$	—	$	—	$	—	$	(3,095)
Securitized mortgage borrowings		—		(37,197)		17,545			—		—		—		(19,652)
Derivative liabilities, net, securitized trusts		—		—		—			—		—		—		—
Long-term debt		—		(321)		—			1,481		—		—		1,160
Mortgage servicing rights (2)		—		—		—			—		9,572		—		9,572
Mortgage loans held-for-sale		—		—		—			—		—		(5,282)		(5,282)
Derivative assets — IRLCs		—		—		—			—		—		181		181
Derivative liabilities — Hedging Instruments		—		—		—			—		246		(846)		(600)
Total	$	16,974	$	(37,518)	$	(2,524)	(3)	$	1,481	$	9,818	$	(5,947)	$	(17,716)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities.

(2)

Included in loss on MSRs, net in the consolidated statements of operations.

(3)

For the six months ended June 30, 2018, change in the fair value of net trust assets, excluding REO was $2.5 million.


	Recurring Fair Value Measurements
	Changes in Fair Value Included in Net Earnings
	For the Six Months Ended June 30, 2017
					Change in Fair Value of
	Interest		Interest		Net Trust			Long-term		Other Revenue		Gain on Sale
	Income (1)		Expense (1)		Assets			Debt		and Expense		of Loans, net		Total
Securitized mortgage collateral	$	29,585	$	—	$	101,220		$	—	$	—	$	—	$	130,805
Securitized mortgage borrowings		—		(77,200)		(98,647)			—		—		—		(175,847)
Derivative liabilities, net, securitized trusts		—		—		—			—		—		—		—
Long-term debt		—		(502)		—			(2,761)		—		—		(3,263)
Mortgage servicing rights (2)		—		—		—			—		(8,861)		—		(8,861)
Contingent consideration		—		—		—			—		4,702		—		4,702
Mortgage loans held-for-sale		—		—		—			—		—		9,598		9,598
Derivative assets — IRLCs		—		—		—			—		—		(1,623)		(1,623)
Derivative liabilities — Hedging Instruments		—		—		—			—		(83)		2,374		2,291
Total	$	29,585	$	(77,702)	$	2,573	(3)	$	(2,761)	$	(4,242)	$	10,349	$	(42,198)

(1)

Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities.

(2)

Included in loss on MSRs, net in the consolidated statements of operations.

(3)

For the six months ended June 30, 2017, change in the fair value of net trust assets, excluding REO was $2.6 million.

Schedule of information for derivative assets and liabilities - lending


					Total Gains (Losses)				Total Gains (Losses)
	Notional Amount				For the Three Months Ended				For the Six Months Ended
	June 30,		December 31,		June 30,				June 30,
	2018		2017		2018		2017		2018		2017
Derivative – IRLC's (1)	$	369,707	$	398,225	$	684	$	(2,787)	$	181	$	(1,623)
Derivative – TBA MBS (2)		418,807		687,500		299		(746)		9,275		(1,371)

(1)

Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations.

(2)

Amounts included in gain on sale of loans, net and gain (loss) on mortgage servicing rights, net within the accompanying consolidated statements of operations.

Schedule of financial and non-financial assets and liabilities measured using nonrecurring fair value measurements


	Nonrecurring Fair Value Measurements						Total Gains (Losses) (1)		Total Gains (Losses) (1)
	June 30, 2018						For the Three Months Ended		For the Six Months Ended
	Level 1		Level 2		Level 3		June 30, 2018		June 30, 2018
REO (2)	$	—	$	169	$	—	$	(1,590)	$	603
Deferred charge (3)		—		—		—		—		—
Intangible assets		—		—		6,033		(13,450)		(13,450)
Goodwill		—		—		29,925		(74,662)		(74,662)

(1)

Total losses reflect losses from all nonrecurring measurements during the period.

(2)

(3)

With the adoption of ASU 2016-16 on January 1, 2018, $7.8 million in deferred charge was eliminated with a cumulative effect adjustment to opening retained earnings.


	Nonrecurring Fair Value Measurements						Total Gains (Losses) (1)		Total Gains (Losses) (1)
	June 30, 2017						For the Three Months Ended		For the Six Months Ended
	Level 1		Level 2		Level 3		June 30, 2017		June 30, 2017
REO (2)	$	—	$	6,498	$	—	$	4,218	$	5,751
Deferred charge (3)		—		—		8,165		(243)		(520)

(1)

Total losses reflect losses from all nonrecurring measurements during the period.

(2)

(3)

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=84234895&loc=d3e41641-113959

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=84234895&loc=SL5624163-113959

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=84234895&loc=d3e41678-113959

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=84234895&loc=d3e41638-113959

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=84234895&loc=SL5580258-113959

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=84234895&loc=SL5579245-113959

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4C
-URI http://asc.fasb.org/extlink&oid=84234895&loc=SL5624171-113959

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=84234895&loc=SL5579240-113959

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=84234895&loc=d3e41620-113959

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(n)(2))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

+ Details

Reconciliation of Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Reconciliation of Earnings Per Share

Schedule of computation of basic and diluted earnings per common share


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Numerator for basic (loss) earnings per share:
Net (loss ) earnings	$	(97,398)	$	6,440	$	(93,525)	$	11,067

Numerator for diluted (loss) earnings per share:
Net (loss) earnings	$	(97,398)	$	6,440	$	(93,525)	$	11,067
Interest expense attributable to convertible notes (1)		—		437		—		875
Net (loss) earnings plus interest expense attributable to convertible notes	$	(97,398)	$	6,877	$	(93,525)	$	11,942

Denominator for basic (loss) earnings per share (2):
Basic weighted average common shares outstanding during the period		20,964		19,791		20,958		17,918

Denominator for diluted (loss) earnings per share (2):
Basic weighted average common shares outstanding during the period		20,964		19,791		20,958		17,918
Net effect of dilutive convertible notes (1)		—		1,163		—		1,163
Net effect of dilutive stock options and DSU’s		—		304		—		296
Diluted weighted average common shares		20,964		21,258		20,958		19,377
Net (loss) earnings per common share:
Basic	$	(4.65)	$	0.33	$	(4.46)	$	0.62
Diluted	$	(4.65)	$	0.32	$	(4.46)	$	0.62

(1)

Adjustments to diluted earnings per share for the convertible notes for the three and six months ended June 30, 2018 were excluded from the calculation, as they are anti-dilutive.

(2)

Number of shares presented in thousands.

Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2018

Segment Reporting

Reconciliation of earnings from segment to consolidated


Statement of Operations Items for the	Mortgage		Real Estate		Long-term		Corporate
Three Months Ended June 30, 2018:	Lending		Services		Portfolio		and other		Consolidated
Gain on sale of loans, net	$	18,741	$	—	$	—	$	—	$	18,741
Real estate services fees, net		—		1,038		—		—		1,038
Servicing fees, net		9,861		—		—		—		9,861
Gain on mortgage servicing rights, net		167		—		—		—		167
Other revenue		—		—		101		15		116
Intangible asset impairment		(13,450)		—		—		—		(13,450)
Goodwill impairment		(74,662)		—		—		—		(74,662)
Other operating expense		(28,985)		(591)		(111)		(6,837)		(36,524)
Other income (expense)		305		—		1,177		(461)		1,021
Net (loss) earnings before income tax expense	$	(88,023)	$	447	$	1,167	$	(7,283)		(93,692)
Income tax expense										3,706
Net loss									$	(97,398)


Statement of Operations Items for the	Mortgage		Real Estate		Long-term		Corporate
Three Months Ended June 30, 2017:	Lending		Services		Portfolio		and other		Consolidated
Gain on sale of loans, net	$	36,806	$	—	$	—	$	—	$	36,806
Real estate services fees, net		—		1,504		—		—		1,504
Servicing fees, net		7,764		—		—		—		7,764
Loss on mortgage servicing rights, net		(6,669)		—		—		—		(6,669)
Other revenue		5		—		66		157		228
Accretion of contingent consideration		(707)		—		—		—		(707)
Change in fair value of contingent consideration		6,793		—		—		—		6,793
Loss on extinguishment of debt		—		—		(1,265)		—		(1,265)
Other operating expense		(35,230)		(743)		(100)		(3,734)		(39,807)
Other income (expense)		582		—		2,683		(427)		2,838
Net earnings (loss) before income tax expense	$	9,344	$	761	$	1,384	$	(4,004)	$	7,485
Income tax expense										1,045
Net earnings									$	6,440


Statement of Operations Items for the	Mortgage		Real Estate		Long-term		Corporate
Six Months Ended June 30, 2018:	Lending		Services		Portfolio		and other		Consolidated
Gain on sale of loans, net	$	40,223	$	—	$	—	$	—	$	40,223
Real estate services fees, net		—		2,423		—		—		2,423
Servicing fees, net		19,324		—		—		—		19,324
Gain on mortgage servicing rights, net		7,872		—		—		—		7,872
Other revenue		—		—		186		21		207
Intangible asset impairment		(13,450)		—		—		—		(13,450)
Goodwill impairment		(74,662)		—		—		—		(74,662)
Other operating expense		(60,533)		(1,229)		(176)		(10,335)		(72,273)
Other income (expense)		638		—		1,373		(884)		1,127
Net (loss) earnings before income tax expense	$	(80,588)	$	1,194	$	1,383	$	(11,198)		(89,209)
Income tax expense										4,316
Net loss									$	(93,525)


Statement of Operations Items for the	Mortgage		Real Estate		Long-term		Corporate
Six Months Ended June 30, 2017:	Lending		Services		Portfolio		and other		Consolidated
Gain on sale of loans, net	$	74,126	$	—	$	—	$	—	$	74,126
Real estate services fees, net		—		3,137		—		—		3,137
Servicing fees, net		15,083		—		—		—		15,083
Loss on mortgage servicing rights, net		(7,646)		—		—		—		(7,646)
Other revenue		19		—		127		129		275
Accretion of contingent consideration		(1,552)		—		—		—		(1,552)
Change in fair value of contingent consideration		6,254		—		—		—		6,254
Loss on extinguishment of debt		—		—		(1,265)		—		(1,265)
Other operating expense		(73,315)		(1,737)		(186)		(7,742)		(82,980)
Other income (expense)		988		—		7,396		(1,278)		7,106
Net earnings (loss) before income tax expense	$	13,957	$	1,400	$	6,072	$	(8,891)	$	12,538
Income tax expense										1,471
Net earnings									$	11,067

Reconciliation of assets from segment to consolidated


	Mortgage		Real Estate		Long-term		Corporate
Balance Sheet Items as of:	Lending		Services		Portfolio		and other		Consolidated
Total Assets at June 30, 2018 (1)	$	851,509	$	—	$	3,409,536	$	5,177	$	4,266,222
Total Assets at December 31, 2017 (1)	$	992,983	$	251	$	3,678,377	$	10,089	$	4,681,700

All segment asset balances exclude intercompany balances.

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies

Schedule of the activity related to the repurchase reserve for previously sold loans


	June 30,		December 31,
	2018		2017
Beginning balance	$	6,020	$	5,408
Provision for repurchases		1,594		1,557
Settlements		(1,419)		(945)
Total repurchase reserve	$	6,195	$	6,020

Equity and Share Based Payments (Tables)

6 Months Ended

Jun. 30, 2018

Equity and Share Based Payments

Summary of activity, pricing and other information for the Company's stock options


		Weighted-
		Average
	Number of	Exercise
	Shares	Price
Options outstanding at December 31, 2017	1,582,754	$	13.61
Options granted	30,000		8.85
Options exercised	(76,713)		4.17
Options forfeited/cancelled	(209,380)		15.93
Options outstanding at June 30, 2018	1,326,661		13.69
Options exercisable at June 30, 2018	811,834	$	12.63

Summary of activity, pricing and other information for the Company's (DSU's)


		Weighted-
		Average
	Number of	Grant Date
	Shares	Fair Value
DSU's outstanding at December 31, 2017	100,750	$	10.41
DSU’s granted	—		—
DSU’s exercised	—		—
DSU’s forfeited/cancelled	—		—
DSU’s outstanding at June 30, 2018	100,750	$	10.41

Summary of Business and Financial Statement Presentation (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Recent Accounting Pronouncements
Retained earnings unappropriated	$ (1,097,157)	$ (968,787)
ASU 2016-16
Recent Accounting Pronouncements
Retained earnings unappropriated	$ 7,800

Mortgage Loans Held-for-Sale (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Mortgage loans held-for-Sale
Fair value adjustment	$ 13,920		$ 13,920		$ 19,202
Total mortgage loans held-for-sale	481,291		481,291		568,781
Gain on LHFS
Total gain on sale of loans, net			47,766	$ 62,202
Government
Mortgage loans held-for-Sale
Fair value adjustment	209,133		209,133		263,512
Conventional
Mortgage loans held-for-Sale
Fair value adjustment	98,172		98,172		193,055
Other
Mortgage loans held-for-Sale
Fair value adjustment	160,066		160,066		$ 93,012
Mortgage loans, held-for-sale
Gain on LHFS
Gain on sale of mortgage loans	28,641	$ 49,282	57,979	87,522
Premium from servicing retained loan sales	6,273	12,807	16,756	24,873
Unrealized gains (losses) from derivative financial instruments	1,435	1,896	(665)	751
Realized (losses) gains from derivative financial instruments	(227)	(6,167)	11,818	(5,042)
Mark to market (loss) gain on LHFS	(391)	4,394	(5,282)	9,598
Direct origination expenses, net	(15,773)	(25,314)	(38,789)	(45,150)
(Provision) recovery for repurchases	(1,217)	(92)	(1,594)	1,574
Total gain on sale of loans, net	$ 18,741	$ 36,806	$ 40,223	$ 74,126

Mortgage Servicing Rights (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Changes in the fair value of MSRs
Balance at beginning of period			$ 154,405	$ 131,537	$ 131,537
Additions from servicing retained loan sales			16,756		56,049
Addition from purchases					5,618
Reductions from bulk sales					(895)
Changes in fair value			9,572		(37,904)
Fair value of MSRs at end of period	$ 180,733		180,733		154,405
Total loans serviced	16,786,146		$ 16,786,146		$ 16,330,100
Pledged collateral			77.00%		81.00%
Mortgage Servicing Rights Sensitivity Analysis
Change in fair value of mortgage servicing rights	393	$ (7,739)	$ 9,572	(8,861)
Gain (loss) on sale of mortgage servicing rights		331		(82)
Realized and unrealized (losses) gains from hedging instruments	(226)	739	(1,700)	1,297
Gain (loss) on mortgage servicing rights, net	167	(6,669)	7,872	(7,646)
Servicing income, net
Contractual servicing fees	11,326	9,011	22,864	17,377
Late and Ancillary fees	167	73	318	158
Subservicing and other costs	(1,632)	(1,320)	(3,858)	(2,452)
Servicing fees, net	9,861	$ 7,764	19,324	$ 15,083
Government
Changes in the fair value of MSRs
Total loans serviced	3,606,688		3,606,688		$ 2,834,680
Conventional
Changes in the fair value of MSRs
Total loans serviced	13,177,521		13,177,521		13,493,463
NonQM
Changes in the fair value of MSRs
Total loans serviced	1,937		1,937		1,957
Mortgage servicing rights
Mortgage Servicing Rights Sensitivity Analysis
Fair value of MSRs	180,733		180,733		154,405
Prepayment Speed, Decrease in fair value from 10% adverse change	(3,464)		(3,464)		(5,643)
Prepayment Speed, Decrease in fair value from 20% adverse change	(7,178)		(7,178)		(11,275)
Prepayment Speed, Decrease in fair value from 30% adverse change	(11,101)		(11,101)		(16,807)
Discount Rate, Decrease in fair value from 10% adverse change	(6,759)		(6,759)		(5,461)
Discount Rate, Decrease in fair value from 20% adverse change	(13,046)		(13,046)		(10,555)
Discount Rate, Decrease in fair value from 30% adverse change	$ (18,905)		$ (18,905)		$ (15,316)

Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2015	Jun. 30, 2018
Goodwill
Goodwill	$ 104,600	$ 104,587
Intangible assets acquired	33,100
Changes in carrying amount of goodwill
Goodwill, Beginning Balance		104,587
Impairment		(74,662)
Goodwill, Ending Balance	104,600	$ 29,925
Trademark
Goodwill
Intangible assets acquired	17,200
Customer relationships
Goodwill
Intangible assets acquired	10,200
Non-compete agreement
Goodwill
Intangible assets acquired	$ 5,700

Goodwill and Intangible Assets - Intangibles Other Than Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017
Intangible assets and other assets:
Accumulated Amortization		$ (2,385)	$ (2,384)
Intangible asset impairment	$ (13,450)	(13,450)
Cash Call Inc
Intangible assets and other assets:
Net Carrying Amount at		21,582
Accumulated Amortization		(2,099)
Intangible asset impairment		(13,450)
Net Carrying Amount at	6,033	$ 6,033
Remaining Life		3 years 1 month 6 days
Trademark \| Cash Call Inc
Intangible assets and other assets:
Net Carrying Amount at		$ 14,035
Accumulated Amortization		(585)
Intangible asset impairment		(13,450)
Customer relationships \| Cash Call Inc
Intangible assets and other assets:
Net Carrying Amount at		6,027
Accumulated Amortization		(754)
Net Carrying Amount at	5,273	$ 5,273
Remaining Life		3 years 6 months
Non-compete agreement \| Cash Call Inc
Intangible assets and other assets:
Net Carrying Amount at		$ 1,520
Accumulated Amortization		(760)
Net Carrying Amount at	$ 760	$ 760
Remaining Life		6 months

Debt - Warehouse Borrowings (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Warehouse Borrowings [Abstract]
Maximum Borrowing Capacity	$ 985,000
Balance Outstanding	482,546	$ 575,363
Repurchase agreement 1
Warehouse Borrowings [Abstract]
Maximum Borrowing Capacity	150,000
Balance Outstanding	122,557	100,630
Repurchase agreement 2
Warehouse Borrowings [Abstract]
Maximum Borrowing Capacity	35,000
Balance Outstanding	30,846	31,632
Repurchase agreement 3
Warehouse Borrowings [Abstract]
Maximum Borrowing Capacity	225,000
Balance Outstanding	104,648	154,020
Finance receivables made to warehouse customers	37,200	41,800
Repurchase agreement 4
Warehouse Borrowings [Abstract]
Maximum Borrowing Capacity	250,000
Balance Outstanding	36,875	152,772
Repurchase agreement 5
Warehouse Borrowings [Abstract]
Maximum Borrowing Capacity	175,000
Balance Outstanding	107,514	88,920
Repurchase agreement 6
Warehouse Borrowings [Abstract]
Maximum Borrowing Capacity	100,000
Balance Outstanding	56,722	$ 47,389
Repurchase agreement 7
Warehouse Borrowings [Abstract]
Maximum Borrowing Capacity	50,000
Balance Outstanding	$ 23,384

Debt - MSR Financings (Details) - USD ($) $ in Thousands		1 Months Ended	6 Months Ended
Debt - MSR Financings (Details) - USD ($) $ in Thousands	Feb. 10, 2017	May 31, 2018	Jun. 30, 2018	Feb. 28, 2018
Long-term Debt
Maximum Borrowing Capacity			$ 985,000
Loan And Security Agreement [Member]
Long-term Debt
Maximum Borrowing Capacity	$ 100
Loan And Security Agreement [Member] \| Impac Mortgage Corp.
Long-term Debt
Maximum Borrowing Capacity	$ 40,000
Maximum borrowing capacity (in percentage)	55.00%
Debt Instrument, Frequency of Periodic Payment	P2Y
Revolving loan commitment period	1 year
Proceeds from Issuance of Secured Debt	$ 35,100
1ML \| Impac Mortgage Corp.
Long-term Debt
Interest margin over base rate (as a percent)	4.00%
FHLMC and GNMA Financing
Long-term Debt
Maximum Borrowing Capacity		$ 60,000		$ 50,000
Maximum borrowing capacity (in percentage)		60.00%
Financing secured by MSRs			67,800
Amount outstanding during the year			32,500
FHLMC and GNMA Financing \| 1ML
Long-term Debt
Interest margin over base rate (as a percent)		3.00%
FNMA Financing
Long-term Debt
Financing secured by MSRs			71,700
Amount outstanding during the year			$ 29,500
Term Loan Member
Long-term Debt
Repayments of Debt	$ 30,100

Debt - Convertible Notes (Details) - 2015 Convertible Notes $ / shares in Units, $ in Thousands	1 Months Ended
	May 31, 2015 USD ($) D $ / shares
Convertible Notes
Amount of debt issued \| $	$ 25,000
Interest rate of debt (as a percent)	7.50%
Transaction costs \| $	$ 50
Conversion price (in dollars per share) \| $ / shares	$ 21.50
Conditional conversion price (in dollars per share) \| $ / shares	$ 30.10
Number of trading days for which stock price must exceed specified price \| D	20
Number of consecutive trading days during which stock price must exceed specified price \| D	30

Debt - Long-term Debt (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended		12 Months Ended
Debt - Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Long-term Debt
Loss on extinguishment of debt	$ (1,265)		$ (1,265)
Trust Preferred Securities and Junior Subordinated Notes, Fair Value [Abstract]
Long-term debt		$ 45,787		$ 44,982
Trust Preferred Securities \| LIBOR
Long-term Debt
Applicable margin (as a percent)		3.75%
Junior Subordinated Notes
Trust Preferred Securities and Junior Subordinated Notes, Fair Value [Abstract]
Long-term debt		$ 62,000		62,000
Fair value adjustment		(16,213)		(17,018)
Total		$ 45,787		$ 44,982

Securitized Mortgage Trusts - Securitized Mortgage Trust Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Trust Assets
Securitized mortgage collateral	$ 3,401,037	$ 3,662,008
REO	8,440	8,542
Total securitized mortgage trust assets	$ 3,409,477	$ 3,670,550

Securitized Mortgage Trusts - Change in Fair Value of Net Trust Assets (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Change in fair value of net trust assets, including trust REO losses
Change in fair value of net trust assets, excluding REO	$ 1,807	$ (2,213)	$ (2,524)	$ 2,573
Gains from REO	(1,590)	4,218	603	5,751
Change in fair value of net trust assets, including trust REO gains	$ 217	$ 2,005	$ (1,921)	$ 8,324

Fair Value of Financial Instruments - Fair value of Financial Instruments Included in the Consolidated Financial Statements (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Assets
Mortgage servicing rights	$ 180,733		$ 154,405	$ 131,537
Liabilities
MSR financings	67,000	$ 35,133
Carrying Amount
Assets
Cash and cash equivalents.	32,960		33,223
Restricted cash	4,606		5,876
Mortgage loans held for-for-sale	481,291		568,781
Finance receivables	37,215		41,777
Mortgage servicing rights	180,733		154,405
Derivatives assets, lending, net	4,538		4,777
Securitized mortgage collateral	3,401,037		3,662,008
Liabilities
Warehouse borrowings	482,546		575,363
MSR financings	62,000		35,133
Convertible notes	24,979		24,974
Contingent consideration			554
Long-term debt	45,787		44,982
Securitized mortgage borrowings	3,393,721		3,653,265
Derivative liabilities, lending, net	179
Estimated Fair Value \| Level 1
Assets
Cash and cash equivalents.	32,960		33,223
Restricted cash	4,606		5,876
Estimated Fair Value \| Level 2
Assets
Mortgage loans held for-for-sale	481,291		568,781
Finance receivables	37,215		41,777
Derivatives assets, lending, net			420
Liabilities
Warehouse borrowings	482,546		575,363
Derivative liabilities, lending, net	179
Estimated Fair Value \| Level 3
Assets
Mortgage servicing rights	180,733		154,405
Derivatives assets, lending, net	4,538		4,357
Securitized mortgage collateral	3,401,037		3,662,008
Liabilities
MSR financings	62,000		35,133
Convertible notes	24,979		24,974
Contingent consideration			554
Long-term debt	45,787		44,982
Securitized mortgage borrowings	$ 3,393,721		$ 3,653,265

Fair Value of Financial Instruments - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Fair Value Measurements
Transfers between Level 1 and Level 2	$ 0
Transfers between Level 2 and Level 1	0
Assets
Mortgage servicing rights	$ 180,733	$ 154,405	$ 131,537
Level 3
Fair Value Measurements
Percentage of level three assets to total assets measured at fair value	88.00%	87.00%
Percentage of level three liabilities to total liabilities measured at fair value	99.00%	99.00%
Recurring basis \| Level 2
Assets
Mortgage loans held for-for-sale	$ 481,291	$ 568,781
Derivatives assets, lending, net		420
Total assets at fair value	481,291	569,201
Liabilities
Derivative liabilities, lending, net	179
Total liabilities at fair value	179
Recurring basis \| Level 3
Assets
Derivatives assets, lending, net	4,538	4,357
Mortgage servicing rights	180,733	154,405
Securitized mortgage collateral	3,401,037	3,662,008
Total assets at fair value	3,586,308	3,820,770
Liabilities
Securitized mortgage borrowings	3,393,721	3,653,265
Long-term debt	45,787	44,982
Contingent consideration		554
Total liabilities at fair value	$ 3,439,508	$ 3,698,801

Fair Value of Financial Instruments - Reconciliation of All Assets and Liabilities Measured Using Level 3 Input (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Level 3
Purchases, issuances and settlements
Net interest income including cash received and paid	$ 1,800	$ 2,100	$ 4,000	$ 4,200
Securitized mortgage borrowings
Purchases, issuances and settlements
Unrealized gains (losses) still held	2,666,746	2,888,635
Changes in fair value of liabilities during the period
Fair value in the beginning of the period	(3,508,477)	(3,892,668)	(3,653,265)	(4,017,603)
Total gains (losses) included in earnings:
Total (losses) gains included in earnings	(27,996)	(88,886)	(19,652)	(175,847)
Purchases, issuances and settlements
Settlements	142,752	214,035	279,196	425,931
Fair value at the end of the period	(3,393,721)	(3,767,519)	(3,393,721)	(3,767,519)
Securitized mortgage borrowings \| Interest expense
Total gains (losses) included in earnings:
Total (losses) gains included in earnings	(17,117)	(36,505)	(37,197)	(77,200)
Securitized mortgage borrowings \| Change in fair value
Total gains (losses) included in earnings:
Total (losses) gains included in earnings	(10,879)	(52,381)	17,545	(98,647)
Long-term debt
Purchases, issuances and settlements
Unrealized gains (losses) still held	16,213	17,464
Changes in fair value of liabilities during the period
Fair value in the beginning of the period	(45,337)	(50,044)	(44,982)	(47,207)
Total gains (losses) included in earnings:
Total (losses) gains included in earnings	(450)	(426)	(805)	(3,263)
Purchases, issuances and settlements
Settlements		5,934		5,934
Fair value at the end of the period	(45,787)	(44,536)	(45,787)	(44,536)
Long-term debt \| Interest expense
Total gains (losses) included in earnings:
Total (losses) gains included in earnings	(182)	(161)	(321)	(502)
Long-term debt \| Change in fair value
Total gains (losses) included in earnings:
Total (losses) gains included in earnings	258	(265)	1,481	(2,761)
Long-term debt \| Change in instrument specific credit risk
Total gains (losses) included in earnings:
Total (losses) gains included in earnings	(526)		(1,965)
Contingent consideration
Purchases, issuances and settlements
Unrealized gains (losses) still held		(14,926)
Changes in fair value of liabilities during the period
Fair value in the beginning of the period		(24,498)	(554)	(31,072)
Total gains (losses) included in earnings:
Total (losses) gains included in earnings		6,086		4,702
Purchases, issuances and settlements
Settlements		3,486	554	11,444
Fair value at the end of the period		(14,926)		(14,926)
Contingent consideration \| Change in fair value
Total gains (losses) included in earnings:
Total (losses) gains included in earnings		6,086		4,702
Securitized mortgage collateral
Changes in fair value of assets during the period
Fair value at the beginning of the period	3,513,901	3,903,336	3,662,008	4,021,891
Total gains (losses) included in earnings:
Total gains (losses) included in earnings	23,972	64,269	(3,095)	130,805
Purchases, issuances and settlements
Settlements	(136,836)	(191,421)	(257,876)	(376,512)
Fair value at the end of the period	3,401,037	3,776,184	3,401,037	3,776,184
Unrealized gains (losses) still held	(490,822)	(729,834)
Securitized mortgage collateral \| Interest income
Total gains (losses) included in earnings:
Total gains (losses) included in earnings	11,286	14,101	16,974	29,585
Securitized mortgage collateral \| Change in fair value
Total gains (losses) included in earnings:
Total gains (losses) included in earnings	12,686	50,168	(20,069)	101,220
Mortgage servicing rights
Changes in fair value of assets during the period
Fair value at the beginning of the period	174,067	141,586	154,405	131,537
Total gains (losses) included in earnings:
Total gains (losses) included in earnings	393	(7,739)	9,572	(8,861)
Purchases, issuances and settlements
Purchases		5,619		5,619
Issuances	(6,273)	(12,807)	16,756	24,873
Settlements				(895)
Fair value at the end of the period	180,733	152,273	180,733	152,273
Unrealized gains (losses) still held	180,733	152,273
Mortgage servicing rights \| Change in fair value
Total gains (losses) included in earnings:
Total gains (losses) included in earnings	393	(7,739)	9,572	(8,861)
Interest rate lock commitments. net (IRLCs)
Changes in fair value of assets during the period
Fair value at the beginning of the period	3,854	12,333	4,357	11,169
Total gains (losses) included in earnings:
Total gains (losses) included in earnings	684	(2,787)	181	(1,623)
Purchases, issuances and settlements
Fair value at the end of the period	4,538	9,546	4,538	9,546
Unrealized gains (losses) still held	4,538	9,546
Interest rate lock commitments. net (IRLCs) \| Change in fair value
Total gains (losses) included in earnings:
Total gains (losses) included in earnings	$ 684	$ (2,787)	$ 181	$ (1,623)

Fair Value of Financial Instruments - Valuation Techniques And Unobservable Inputs Applied (Details) - Level 3 $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($)
Minimum
Unobservable input
Loss severities (as a percent)	6.60%
Maximum
Unobservable input
Loss severities (as a percent)	86.70%
Weighted Average
Unobservable input
Discount rates (as a percent)	4.40%
Loss severities (as a percent)	42.90%
Securitized mortgage borrowings
Valuation techniques
Estimated fair value of liabilities	$ (3,393,721)
Securitized mortgage borrowings \| Minimum
Unobservable input
Default rates (as a percent)	0.01%
Securitized mortgage borrowings \| Maximum
Unobservable input
Default rates (as a percent)	4.00%
Securitized mortgage borrowings \| Weighted Average
Unobservable input
Default rates (as a percent)	1.50%
Securitized mortgage borrowings \| DCF \| Minimum
Unobservable input
Loss severities (as a percent)	3.00%
Securitized mortgage borrowings \| DCF \| Maximum
Unobservable input
Loss severities (as a percent)	25.00%
Long-term debt \| DCF
Valuation techniques
Estimated fair value of liabilities	$ (45,787)
Unobservable input
Discount rates (as a percent)	10.00%
Long-term debt \| DCF \| Weighted Average
Unobservable input
Discount rates (as a percent)	10.00%
Securitized mortgage collateral \| DCF
Valuation techniques
Estimated fair value of assets	$ 3,401,037
Securitized mortgage collateral \| DCF \| Minimum
Unobservable input
Prepayment rates (as a percent)	2.60%
Securitized mortgage collateral \| DCF \| Maximum
Unobservable input
Prepayment rates (as a percent)	21.00%
Securitized mortgage collateral \| DCF \| Weighted Average
Unobservable input
Prepayment rates (as a percent)	8.60%
Mortgage servicing rights \| DCF
Valuation techniques
Estimated fair value of assets	$ 180,733
Mortgage servicing rights \| DCF \| Minimum
Unobservable input
Discount rates (as a percent)	8.90%
Prepayment rates (as a percent)	6.80%
Mortgage servicing rights \| DCF \| Maximum
Unobservable input
Discount rates (as a percent)	14.00%
Mortgage servicing rights \| DCF \| Weighted Average
Unobservable input
Discount rates (as a percent)	9.70%
Prepayment rates (as a percent)	9.70%
Mortgage servicing rights \| Derivative liabilities, net, securitized trusts \| DCF \| Maximum
Unobservable input
Prepayment rates (as a percent)	88.80%
Interest rate lock commitments. net (IRLCs) \| Market pricing
Valuation techniques
Estimated fair value of assets	$ 4,538
Interest rate lock commitments. net (IRLCs) \| Market pricing \| Minimum
Unobservable input
Pull-through rate (as a percent)	7.80%
Interest rate lock commitments. net (IRLCs) \| Market pricing \| Maximum
Unobservable input
Pull-through rate (as a percent)	99.90%
Interest rate lock commitments. net (IRLCs) \| Market pricing \| Weighted Average
Unobservable input
Pull-through rate (as a percent)	74.40%

Fair Value of Financial Instruments - Changes in Recurring Fair Value Measurements Included in Earnings (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Change in Fair Value Included in Net Earnings (Loss)
Change in the fair value of trust assets, excluding REO	$ 1,807	$ (2,213)	$ (2,524)	$ 2,573
Change in fair value of net trust assets, excluding REO			(2,524)	2,573
Securitized mortgage collateral
Difference between aggregate unpaid principal balance and fair value of securitized mortgage collateral	13,920		13,920		$ 19,202
Securitized Mortgage Borrowings
Outstanding principal balance of securitized mortgage borrowings	16,786,146		16,786,146		16,330,100
Contingent consideration
Contingent consideration payments were paid		(6,793)		(6,254)
Contingent consideration					554
Derivative liabilities, net, securitized trusts \| TBA's
Derivative assets and liabilities
Derivative Liability, Notional Amount	418,807		418,807		687,500
Derivative, Gain (Loss) on Derivative, Net	299	(746)	9,275	(1,371)
Derivative assets - IRLCs \| Interest rate lock commitments. net (IRLCs)
Derivative assets and liabilities
Derivative Liability, Notional Amount	369,707		369,707		398,225
Derivative, Gain (Loss) on Derivative, Net	684	(2,787)	181	(1,623)
Level 3
Contingent consideration
Contingent consideration payments were paid			554
Contingent consideration	0	0	0	0
Recurring basis
Change in Fair Value Included in Net Earnings (Loss)
Total	(2,549)	(21,711)	(17,716)	(42,198)
Recurring basis \| Interest income
Change in Fair Value Included in Net Earnings (Loss)
Total	11,286	14,101	16,974	29,585
Recurring basis \| Interest expense
Change in Fair Value Included in Net Earnings (Loss)
Total	(17,299)	(36,666)	(37,518)	(77,702)
Recurring basis \| Change in Fair Value of Net Trust Assets
Change in Fair Value Included in Net Earnings (Loss)
Total	1,807	(2,213)	(2,524)	2,573
Recurring basis \| Change in Fair Value of Long-term Debt
Change in Fair Value Included in Net Earnings (Loss)
Total	258	(265)	1,481	(2,761)
Recurring basis \| Other revenue
Change in Fair Value Included in Net Earnings (Loss)
Total	355	(2,958)	9,818	(4,242)
Recurring basis \| Gain on sale of loans, net
Change in Fair Value Included in Net Earnings (Loss)
Total	1,044	6,290	(5,947)	10,349
Recurring basis \| Contingent consideration
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities		6,086		4,702
Recurring basis \| Contingent consideration \| Other revenue
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities		6,086		4,702
Recurring basis \| Securitized mortgage borrowings
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities	(27,996)	(88,886)	(19,652)	(175,847)
Recurring basis \| Securitized mortgage borrowings \| Interest expense
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities	(17,117)	(36,505)	(37,197)	(77,200)
Recurring basis \| Securitized mortgage borrowings \| Change in Fair Value of Net Trust Assets
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities	(10,879)	(52,381)	17,545	(98,647)
Recurring basis \| Derivative liabilities, net, securitized trusts \| Hedging Instruments
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities			(600)	2,291
Recurring basis \| Derivative liabilities, net, securitized trusts \| Hedging Instruments \| Other revenue
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities			246	(83)
Recurring basis \| Derivative liabilities, net, securitized trusts \| Hedging Instruments \| Gain on sale of loans, net
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities			(846)	2,374
Recurring basis \| Derivative liabilities, net, securitized trusts \| Hedging Instruments
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities	713	3,378
Recurring basis \| Derivative liabilities, net, securitized trusts \| Hedging Instruments \| Other revenue
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities	(38)	(1,305)
Recurring basis \| Derivative liabilities, net, securitized trusts \| Hedging Instruments \| Gain on sale of loans, net
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities	751	4,683
Recurring basis \| Long-term debt
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities	76	(426)	1,160	(3,263)
Recurring basis \| Long-term debt \| Interest expense
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities	(182)	(161)	(321)	(502)
Recurring basis \| Long-term debt \| Change in Fair Value of Long-term Debt
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of liabilities	258	(265)	1,481	(2,761)
Recurring basis \| Securitized mortgage collateral
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets	23,972	64,269	(3,095)	130,805
Recurring basis \| Securitized mortgage collateral \| Interest income
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets	11,286	14,101	16,974	29,585
Recurring basis \| Securitized mortgage collateral \| Change in Fair Value of Net Trust Assets
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets	12,686	50,168	(20,069)	101,220
Recurring basis \| Mortgage servicing rights
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets	393	(7,739)	9,572	(8,861)
Recurring basis \| Mortgage servicing rights \| Other revenue
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets	393	(7,739)	9,572	(8,861)
Recurring basis \| Mortgage loans held-for-sale
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets	(391)	4,394	(5,282)	9,598
Recurring basis \| Mortgage loans held-for-sale \| Gain on sale of loans, net
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets	(391)	4,394	(5,282)	9,598
Recurring basis \| Derivative assets - IRLCs \| Interest rate lock commitments. net (IRLCs)
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets			181	(1,623)
Recurring basis \| Derivative assets - IRLCs \| Interest rate lock commitments. net (IRLCs) \| Gain on sale of loans, net
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets			181	$ (1,623)
Recurring basis \| Derivative assets - IRLCs \| Derivative liabilities, net, securitized trusts
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets	684	(2,787)
Recurring basis \| Derivative assets - IRLCs \| Derivative liabilities, net, securitized trusts \| Gain on sale of loans, net
Change in Fair Value Included in Net Earnings (Loss)
Change in fair value of assets	684	$ (2,787)
Recurring basis \| Level 3
Long-term debt
Estimated fair value of long-term debt	45,787		45,787		$ 44,982
Recurring basis \| Level 3 \| Long-term debt
Long-term debt
Long-term debt unpaid principal balance	62,000		62,000
Estimated fair value of long-term debt	45,800		45,800
Difference between aggregate unpaid principal balances and fair value of long-term debt	16,200		16,200
Recurring basis \| Level 3 \| Securitized mortgage collateral
Securitized mortgage collateral
Unpaid principal balance of securitized mortgage collateral	3,900,000		3,900,000
Estimated fair value of securitized mortgage collateral	3,400,000		3,400,000
Difference between aggregate unpaid principal balance and fair value of securitized mortgage collateral	500,000		500,000
Unpaid principal balance of loans 90 days or more past due	500,000		500,000
Estimated fair value of loans 90 days or more past due	200,000		200,000
Difference between aggregate unpaid principal balances and fair value of mortgage loans	300,000		300,000
Securitized Mortgage Borrowings
Outstanding principal balance of securitized mortgage borrowings	3,900,000		3,900,000
Estimated fair value of securitized mortgage borrowings	3,400,000		3,400,000
Bond losses	2,200,000		2,200,000
Difference between aggregate unpaid principal balances and fair value of securitized mortgage borrowings	$ 500,000		$ 500,000

Fair Value of Financial Instruments - Nonrecurring Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Mar. 31, 2015
Fair Value Measurements
Intangible assets	$ 6,033		$ 6,033		$ 21,582
Goodwill	29,925		29,925		104,587	$ 104,600
Retained earnings	(1,097,157)		(1,097,157)		$ (968,787)
Total Gains (Losses) (1)
Intangible assets	(13,450)		(13,450)
Goodwill	(74,662)		(74,662)
ASU 2016-16
Fair Value Measurements
Retained earnings	7,800		7,800
Nonrecurring Fair Value Measurements
Total Gains (Losses) (1)
REO	(1,590)	$ 4,218	603	$ 5,751
Deferred charge		(243)		(520)
Intangible assets	(13,450)		(13,450)
Goodwill	(74,662)		(74,662)
Nonrecurring Fair Value Measurements \| Level 2
Fair Value Measurements
REO	169	6,498	169	6,498
Nonrecurring Fair Value Measurements \| Level 3
Fair Value Measurements
Deferred charge		$ 8,165		$ 8,165
Intangible assets	6,033		6,033
Goodwill	$ 29,925		$ 29,925

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Reconciliation of income taxes to the expected statutory federal corporate income tax rates
Income tax expense (benefit)	$ 3,706	$ 1,045	$ 4,316	$ 1,471
Federal
Reconciliation of income taxes to the expected statutory federal corporate income tax rates
Net operating loss carryforwards					$ 619,900
California
Reconciliation of income taxes to the expected statutory federal corporate income tax rates
Operating loss carryforwards expired					$ 431,000

Reconciliation of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerator for basic (loss) earnings per share:
Net (loss) earnings	$ (97,398)	$ 6,440	$ (93,525)	$ 11,067
Numerator for diluted (loss) earnings per share:
Net (loss) earnings	(97,398)	6,440	(93,525)	11,067
Interest expense attributable to convertible notes		437		875
Net (loss) earnings plus interest expense attributable to convertible notes	$ (97,398)	$ 6,877	$ (93,525)	$ 11,942
Denominator for basic (loss) earnings per share:
Basic weighted average common shares outstanding during the period	20,964	19,791	20,958	17,918
Denominator for diluted (loss) earnings per share:
Basic weighted average common shares outstanding during the period	20,964	19,791	20,958	17,918
Net effect of dilutive convertible notes		1,163		1,163
Net effect of dilutive stock options and DSU's		304		296
Diluted weighted average common shares	20,964	21,258	20,958	19,377
Basic (in dollars per share)	$ (4.65)	$ 0.33	$ (4.46)	$ 0.62
Diluted (in dollars per share)	$ (4.65)	$ 0.32	$ (4.46)	$ 0.62
Stock options
Denominator for diluted (loss) earnings per share:
Antidilutive stock options excluded from weighted average share calculations (in shares)		683	1,300	683
Convertible Debt Notes
Denominator for diluted (loss) earnings per share:
Antidilutive stock options excluded from weighted average share calculations (in shares)			1,200

Segment Reporting - Statement of Operations Items (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) item	Jun. 30, 2017 USD ($)
Segment Reporting
Number of reportable segments \| item			3
Gain on sale of loans, net	$ 18,741	$ 36,806	$ 40,223	$ 74,126
Real estate services fees, net	1,038	1,504	2,423	3,137
Servicing fees, net	9,861	7,764	19,324	15,083
Gain (loss) on mortgage servicing rights, net	167	(6,669)	7,872	(7,646)
Other revenue	116	228	207	275
Accretion of contingent consideration		(707)		(1,552)
Change in fair value of contingent consideration		6,793		6,254
Loss on extinguishment of debt		(1,265)		(1,265)
Intangible asset impairment	(13,450)		(13,450)
Goodwill impairment	(74,662)		(74,662)
Other operating expense	(36,524)	(39,807)	(72,273)	(82,980)
Other income (expense)	1,021	2,838	1,127	7,106
(Loss) earnings before income taxes	(93,692)	7,485	(89,209)	12,538
Income tax expense	3,706	1,045	4,316	1,471
Net (loss) earnings	(97,398)	6,440	(93,525)	11,067
Corporate and Other.
Segment Reporting
Other revenue	15	157	21	129
Other operating expense	(6,837)	(3,734)	(10,335)	(7,742)
Other income (expense)	(461)	(427)	(884)	(1,278)
(Loss) earnings before income taxes	(7,283)	(4,004)	(11,198)	(8,891)
Mortgage Lending \| Operating segments
Segment Reporting
Gain on sale of loans, net	18,741	36,806	40,223	74,126
Servicing fees, net	9,861	7,764	19,324	15,083
Gain (loss) on mortgage servicing rights, net	167	(6,669)	7,872	(7,646)
Other revenue		5		19
Accretion of contingent consideration		(707)		(1,552)
Change in fair value of contingent consideration		6,793		6,254
Intangible asset impairment	(13,450)		(13,450)
Goodwill impairment	(74,662)		(74,662)
Other operating expense	(28,985)	(35,230)	(60,533)	(73,315)
Other income (expense)	305	582	638	988
(Loss) earnings before income taxes	(88,023)	9,344	(80,588)	13,957
Real Estate Services \| Operating segments
Segment Reporting
Real estate services fees, net	1,038	1,504	2,423	3,137
Other operating expense	(591)	(743)	(1,229)	(1,737)
(Loss) earnings before income taxes	447	761	1,194	1,400
Long-term Portfolio \| Operating segments
Segment Reporting
Other revenue	101	66	186	127
Loss on extinguishment of debt		(1,265)		(1,265)
Other operating expense	(111)	(100)	(176)	(186)
Other income (expense)	1,177	2,683	1,373	7,396
(Loss) earnings before income taxes	$ 1,167	$ 1,384	$ 1,383	$ 6,072

Segment Reporting - Balance Sheet Items (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Segment Reporting
Total assets	$ 4,266,222	$ 4,681,700
Operating segments
Segment Reporting
Total assets	5,177	10,089
Mortgage Lending \| Operating segments
Segment Reporting
Total assets	851,509	992,983
Real Estate Services \| Operating segments
Segment Reporting
Total assets		251
Long-term Portfolio \| Operating segments
Segment Reporting
Total assets	$ 3,409,536	$ 3,678,377

Commitments and Contingencies - Legal Proceedings (Details) $ in Millions			6 Months Ended	12 Months Ended
	Jul. 16, 2018 USD ($)	Dec. 07, 2011 director	Jun. 30, 2018	Dec. 31, 2017
Commitments and Contingencies
Number of directors elected by Preferred holders \| director		2
Series B 9.375% redeemable preferred stock
Commitments and Contingencies
Preferred stock, dividend rate (as a percent)			9.375%	9.375%
Series C 9.125% redeemable preferred stock
Commitments and Contingencies
Preferred stock, dividend rate (as a percent)			9.125%	9.125%
Curtis J. Timm \| Series B 9.375% redeemable preferred stock
Commitments and Contingencies
Preferred stock, dividend rate (as a percent)		9.375%
Curtis J. Timm \| Series C 9.125% redeemable preferred stock
Commitments and Contingencies
Preferred stock, dividend rate (as a percent)		9.125%
Subsequent Event \| Curtis J. Timm
Commitments and Contingencies
Preferred B stock approval percentage	67.00%
Subsequent Event \| Curtis J. Timm \| Series B 9.375% redeemable preferred stock
Commitments and Contingencies
Number of days within which special election for election of directors to be held	60 days
Dividend amount required to be paid by company in three quartely payment \| $	$ 1.2
Preferred B stock approval percentage	67.00%

Commitments and Contingencies (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Continuing operations repurchase reserve activity
Beginning balance	$ 6,020	$ 5,408
Provision for repurchases	1,594	1,557
Settlements	(1,419)	(945)
Total repurchase reserve	6,195	6,020
Approved warehouse lines	985,000
Outstanding balance	37,215	$ 41,777
Non-affiliated customers \| Warehouse Borrowings
Continuing operations repurchase reserve activity
Approved warehouse lines	$ 112,000

Equity and Share Based Payments - Redeemable Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands			6 Months Ended	12 Months Ended
	Jul. 16, 2018	Dec. 07, 2011	Jun. 30, 2018	Dec. 31, 2017
Equity and Share Based Payments
Outstanding liquidation preference of Series B and Series C Preferred Stock				$ 51,800
Liquidation preference amount per share (in dollars per share)				$ 25.00
Series B 9.375% redeemable preferred stock
Equity and Share Based Payments
Outstanding liquidation preference of Series B and Series C Preferred Stock			$ 30,290	$ 30,290
Preferred stock, dividend rate (as a percent)			9.375%	9.375%
Series C 9.125% redeemable preferred stock
Equity and Share Based Payments
Outstanding liquidation preference of Series B and Series C Preferred Stock			$ 35,127	$ 35,127
Preferred stock, dividend rate (as a percent)			9.125%	9.125%
Curtis J. Timm \| Subsequent Event
Equity and Share Based Payments
Preferred B stock approval percentage	67.00%
Curtis J. Timm \| Series B 9.375% redeemable preferred stock
Equity and Share Based Payments
Preferred stock, dividend rate (as a percent)		9.375%
Curtis J. Timm \| Series B 9.375% redeemable preferred stock \| Subsequent Event
Equity and Share Based Payments
Liquidation preference amount per share (in dollars per share)	$ 45.51
Preferred B stock approval percentage	67.00%
Cumulative undeclared dividends in arrears	$ 13,600
Cumulative undeclared dividends in arrears (per share)	$ 20.51
Cumulative undeclared dividends in arrears, increase in every quarter (per share)	$ 0.5859
Amount of increase in cumulative undeclared dividends in arrears in each quarter	$ 390
Curtis J. Timm \| Series C 9.125% redeemable preferred stock
Equity and Share Based Payments
Preferred stock, dividend rate (as a percent)		9.125%

Equity and Share Based Payments - Stock Options (Details) - Stock options $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares
Number of Shares
Options outstanding at beginning of period (in shares) \| shares	1,582,754
Options granted (in shares) \| shares	30,000
Options exercised (in shares) \| shares	(76,713)
Options forfeited / cancelled (in shares) \| shares	(209,380)
Options outstanding at end of year (in shares) \| shares	1,326,661
Options exercisable at end of year (in shares) \| shares	811,834
Weighted-Average Exercise Price
Options outstanding at beginning of period (in dollars per share) \| $ / shares	$ 13.61
Options granted (in dollars per share) \| $ / shares	8.85
Options exercised (in dollars per share) \| $ / shares	4.17
Options forfeited / cancelled (in dollars per share) \| $ / shares	15.93
Options outstanding at end of year (in dollars per share) \| $ / shares	13.69
Options exercisable at end of year (in dollars per share) \| $ / shares	$ 12.63
Additional disclosure related to options
Unrecognized compensation cost \| $	$ 1.8
Weighted-average period over which compensation cost is expected to be recognized	1 year 8 months 12 days

Equity and Share Based Payments - Deferred Stock Units (Details) - Deferred stock units $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares
Number of Shares
DSU's outstanding at beginning of year (in shares) \| shares	100,750
DSU's outstanding at end of year (in shares) \| shares	100,750
Weighted-Average Grant Date Fair Value
DSU's outstanding at beginning of year (in dollars per share) \| $ / shares	$ 10.41
DSU's outstanding at end of year (in dollars per share) \| $ / shares	$ 10.41
Additional information regarding DSUs
Unrecognized compensation cost \| $	$ 179
Weighted-average period over which compensation cost is expected to be recognized	2 years

Subsequent Events (Details)	Jul. 17, 2018 shares
Subsequent Event \| 2010 Omnibus Incentive Plan
Subsequent Events
Number of shares available under the Plan	300,000

Securitized Mortgage Trusts - Securitized Mortgage Trust Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Securitized Mortgage Trust Liabilities [Abstract]
Securitized mortgage borrowings	$ 3,393,721	$ 3,653,265