##### Table of Contents





As filed with the
    Securities and Exchange Commission on July 6,
    2011
 
 
 Registration
    No. 333-174246
 
       Washington, D.C. 20549
    
   Amendment No. 1
 
 
 to
 
 FORM S-1
 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
      NATIONSTAR
    MORTGAGE HOLDINGS INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

6162

45-2156869(State or Other Jurisdiction of Incorporation or Organization)

(Primary Standard Industrial Classification Code Number)

(I.R.S. Employer
    Identification No.)   350 Highland Drive
 Lewisville, Texas
    75067
 (469) 549-2000
 (Address, Including Zip Code, and
    Telephone Number, Including Area Code, of Registrants
    Principal Executive Offices)
      Anne Sutherland, Esq.
    Executive Vice President and General Counsel
    Nationstar Mortgage Holdings Inc.
    350 Highland Drive
    Lewisville, Texas, 75067(469) 549-2000(Name, address, including zip code, and telephone
    number, including area code, of agent for service)

Duane McLaughlin, Esq.
    Cleary Gottlieb Steen & Hamilton LLP
    One Liberty Plaza
    New York, New York 10006
    (212) 225-2000(Copies of all communications, including
    communications sent
    to agent for service)       Approximate date of commencement of proposed sale to the
    public:
  o
  o
  o
  o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller reporting
    company o (Do not check if a smaller
    reporting company)
  CALCULATION OF
    REGISTRATION FEE
  Amount



Proposed Maximum



Proposed Maximum



Amount ofTitle of Each Class of


to be



Offering



Aggregate



RegistrationSecurities to be Registered


Registered



Price Per Unit



Offering
    Price(1)



Fee(2)Common stock, $0.01 par value per share







$




$
400,000,000.00



$
46,440.00    (1)
    
    Estimated solely for the purpose of
    calculating the registration fee pursuant to Rule 457(o)
    under the Securities Act of 1933, as amended (the
    Securities Act).(2)
    
    Calculated pursuant to
    Rule 457 under the Securities Act.  The registrant hereby amends this registration statement on
    such date or dates as may be necessary to delay its effective
    date until the registrant shall file a further amendment which
    specifically states that this registration statement shall
    thereafter become effective in accordance with Section 8(a)
    of the Securities Act or until the registration statement shall
    become effective on such date as the Securities and Exchange
    Commission, acting pursuant to said Section 8(a), may
    determine.




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##### Table of Contents



The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not
permitted.


SUBJECT TO COMPLETION, DATED
    JULY 6, 2011
 
  PROSPECTUS
  Shares
  
  Nationstar Mortgage
    Holdings Inc.
  Common Stock
 
    
    Investing in our common stock involves risks. See Risk
    Factors beginning on page 15.
      Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.
      Per Share

TotalPublic offering price

$



$Underwriting discount

$



$Proceeds to us (before expenses)

$



$Proceeds to the Initial Stockholder (before expenses)

$



$




---



##### 



You should rely only on the information contained in this
    prospectus or in any free writing prospectus we may authorize to
    be delivered to you. We have not, and the Initial Stockholder
    and underwriters have not, authorized anyone to provide you with
    different information. If anyone provides you with different
    information, you should not rely on it. We are not, and the
    Initial Stockholder and underwriters are not, making an offer of
    these securities in any jurisdiction where the offer is not
    permitted. You should not assume that the information contained
    in this prospectus is accurate as of any date other than the
    date on the front of this prospectus.
    TABLE OF
    CONTENTS
   
 
 Prospectus Summary


1Risk Factors


15Special Note Regarding Forward-looking
    statements


36Use of Proceeds


38Dividend Policy


39Capitalization


40Dilution


41Selected Historical Consolidated Financial
    data


43Managements Discussion and Analysis of
    Financial Condition and Results of Operations


46Quantitative and Qualitative Disclosures About
    Market Risk


87Glossary of Industry Terms


90Industry


93Business


100Management


121Compensation Discussion and Analysis


125Certain Relationships and Related Party
    Transactions


138Principal and Selling Stockholders


141Description of Capital Stock


143Shares Eligible for Future Sale


148Certain U.S. Federal Income and Estate Tax
    Considerations to
    Non-U.S.
    Holders


150Underwriting


152Legal Matters


157Experts


157Market and Industry Data and Forecasts


158Where You Can Find More Information


159Index to Consolidated Financial Statements


F-1EX-4.1EX-23.1




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##### Table of Contents



PROSPECTUS
    SUMMARY  This summary highlights information contained elsewhere in
    this prospectus. You should read the entire prospectus
    carefully, including the section entitled Risk
    Factors and our financial statements and the related notes
    included elsewhere in this prospectus, before making an
    investment decision to purchase shares of our common stock.
  Nationstar Mortgage Holdings Inc. is a newly formed Delaware
    corporation that has not, to date, conducted any activities
    other than those incident to its formation and the preparation
    of this registration statement. Unless the context suggests
    otherwise, references in this prospectus to
    Nationstar, the Company, we,
    us, and our refer to Nationstar Mortgage
    LLC and its consolidated subsidiaries prior to the consummation
    of the Restructuring (as defined below), and to Nationstar
    Mortgage Holdings Inc. and its consolidated subsidiaries after
    the consummation of the Restructuring. References in this
    prospectus to Fortress refer to Fortress Investment
    Group LLC. All amounts in this prospectus are expressed in
    U.S. dollars and the financial statements have been
    prepared in accordance with generally accepted accounting
    principles in the Unites States (GAAP).
  COMPANY
    OVERVIEW
 
  and/or
 
    Loan
    Servicing
 
  Servicing:
 1




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##### Table of Contents



Adjacent Businesses: and/or
  
    REO management involves comprehensive management of foreclosed
    properties from property inspection and listing to property
    preservation and sale. Our proven ability to shorten the REO
    disposition timeline lowers costs for our REO clients and leads
    to increased REO assets being awarded to us over time.
    Recovery services involve collecting charged-off mortgage
    deficiencies and other losses incurred by the investor. Our
    ability to successfully increase borrower contact rates and
    obtain payment in full, negotiate discounted payoffs or arrange
    repayment plans enables us to collect more money in less time
    for our clients.
    National Real Estate Information Services (NREIS),
    an ancillary real estate services and vendor management company
    in which we purchased a non-controlling interest on
    March 31, 2011, offers comprehensive settlement and
    property valuation services for both origination and default
    management channels. Direct or indirect product offerings
    include title insurance agency, tax searches, flood
    certifications, default valuations, full appraisals and broker
    price opinions.  Loan
    Originations
   
  direct-to-consumer
 2




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MARKET
    OPPORTUNITY
  Loan
    Servicing
 
   
      
    Elevated delinquencies and foreclosures favoring servicers with
    strong capabilities in asset performance and loss mitigation;
    Regulatory and legislative actions such as Basel III and
    other factors leading bank-owned servicers to divest mortgage
    servicing rights or outsource significant segments of their
    mortgage operations;
    Numerous industry reforms including the Qualified Residential
    Mortgage (QRM) provision in the Dodd-Frank Wall
    Street Reform and Consumer Protection Act; the negotiations
    involving the 50 State Attorneys General, certain federal
    regulators and servicers; the enforcement consent orders entered
    into by 14 of the largest mortgage servicers and four federal
    agencies; and the initiative of the Federal Housing Finance
    Agency to align the servicing requirements related to delinquent
    mortgages and to modify the servicing compensation related to
    Fannie Mae and Freddie Mac loans; and
    Anticipated reduced participation of the GSEs and other
    regulated entities in the residential mortgage market, which we
    believe is incentivizing these entities to accelerate the
    facilitation of servicing transfers to existing strong servicers.
 3




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##### Table of Contents



Adjacent
    Businesses
    Loan
    Originations
      OUR COMPETITIVE
    STRENGTHS
    Market Leading
    Residential Mortgage Loan Servicer
 4




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Attractive
    Business Model with Strong Cash Flow
 
   
      Scalable,
    Proven Platform Coupled with Asset Evaluation and Acquisition
    Expertise
 5




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Culture of
    Credit Loss Ownership and Accountability
  06-1 07-2
    Strong and
    Seasoned Management Team
    OUR GROWTH
    STRATEGY
    Capitalize on
    Industry Opportunities
 6




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##### Table of Contents



and/or
  Maintain and
    Grow Our Fee-Based Servicing Portfolio
      Engage in
    Opportunistic Acquisitions and New Business
    Opportunities
    and/or
 7




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Continue To
    Expand Our Adjacent Businesses and Originations
    Platform
        Corporate and
    Other Information
    (469) 549-2000. www.nationstarmtg.com
 8




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Our Principal
    Stockholders
    Ownership
    Structure
 9




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The
    Offering
  Common stock we are offering
    
    sharesCommon stock offered by the Initial Stockholder
    
    sharesCommon stock to be issued and outstanding after this offering
    
    sharesUse of proceeds by us
    
    We estimate that the net proceeds to us from the sale of shares
    in this offering, after deducting offering expenses, will be
    approximately $      million,
    assuming the shares are offered at
    $      per share, which is the midpoint
    of the estimated initial public offering price range set forth
    on the cover page of this prospectus. We intend to use the net
    proceeds from this offering for working capital and other
    general corporate purposes. See Use of Proceeds. We
    will not receive any proceeds from the sale of our common stock
    by the Initial Stockholder, including any proceeds the Initial
    Stockholder may receive from the exercise by the underwriters of
    their over-allotment option.Dividend policy
    
    We do not expect to pay dividends on our common stock for the
    foreseeable future. Instead, we anticipate that all of our
    earnings in the foreseeable future will be used for the
    operation and growth of our business.Any future determination to pay dividends on our common stock
    will be at the discretion of our board of directors and will
    depend upon many factors, including our financial position,
    results of operations, liquidity, legal requirements and
    restrictions that may be imposed by the indenture for our
    10.875% senior notes due 2015. See Dividend
    Policy.Risk factors
    
    Please read the section entitled Risk Factors
    beginning on page 15 for a discussion of some of the
    factors you should carefully consider before deciding to invest
    in our common stock.Proposed New York Stock Exchange symbol      
    assumes an initial public offering price of
    $      per share, the midpoint of the
    price range set forth on the cover page of this prospectus;
    assumes no exercise by the underwriters of their option to
    purchase an
    additional           shares
    of common stock from the Initial Stockholder to cover
    over-allotments; and
    assumes           shares
    will be issued to certain of our directors
    after          ,
    2011 but prior to completion of this offering.
 10




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SUMMARY
    CONSOLIDATED FINANCIAL DATA
      
 Three Months EndedYear Ended December 31,


March 31,2008


2009


2010


2010


2011(dollars in thousands, except for per share amounts)Statement of Operations Data:Revenues:Total fee income

$
74,007


$
100,218


$
184,084


$
38,750


$
64,686Gain (loss) on mortgage loans held for sale


(86,663
)


(21,349
)


77,344



12,429



20,506Total revenues


(12,656
)


78,869



261,428



51,179



85,192Total expenses and impairments


147,777



142,367



220,976



40,089



68,121Other income (expense):Interest income


92,060



52,518



98,895



31,333



18,318Interest expense


(65,548
)


(69,883
)


(116,163
)


(29,135
)


(25,368
)Loss on interest rate swaps and caps


(23,689
)


(14
)


(9,801
)


(2,779
)


Fair value changes in ABS securitizations










(23,297
)


(9,777
)


(2,652
)Total other income (expense)


2,823



(17,379
)


(50,366
)


(10,358
)


(9,702
)Net income (loss)

$
(157,610
)

$
(80,877
)

$
(9,914
)

$
732


$
7,369Pro Forma Information (unaudited):Historical net (loss) income before taxes









$
(9,914
)





$
7,369Pro forma adjustment for
    taxes(1)


















Pro forma net (loss) income









$
(9,914
)





$
7,369Net income (loss) per share:BasicDilutedNumber of shares
    outstanding(2):BasicDiluted
 11




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As ofAs of December 31,

March 31,2008

2009

2010

2011(in thousands)Balance Sheet Data:Cash and cash
    equivalents(3)

$
9,357


$
41,645


$
21,223


$
48,420Mortgage servicing rights


110,808



114,605



145,062



151,159Total assets


1,122,001



1,280,185



1,947,181



1,868,255Unsecured senior notes










244,061



244,410Notes payable


810,041



771,857



709,758



608,451Nonrecourse debtLegacy Assets






177,675



138,662



133,592ABS nonrecourse debt










496,692



489,321Total liabilities


866,079



1,016,362



1,690,809



1,603,012Total members equity


255,922



263,823



256,372



265,243  
  
 Three Months EndedYear Ended December 31,

March 31,2008

2009

2010

2010

2011(in thousands)Other Data:Net cash provided by (used in):Operating activities

$
40,212


$
(83,641
)

$
(101,653
)

$
(82,639
)

$
131,586Investing activities


(34,643
)


29,983



101,197



30,741



5,278Financing activities


(37,463
)


85,946



(19,966
)


33,804



(109,667
)Adjusted
    EBITDA(4)

    (non-GAAP measure)


23,141



48,644



65,306



11,159



27,953Operating Segments:Interest expense from unsecured senior notes










24,628



1,719



7,548Change in fair value of mortgage servicing rights


11,701



27,915



6,043



4,600



3,784Depreciation and amortization


1,172



1,542



1,873



355



641Share-based compensation


1,633



579



8,999



147



5,238  
    Notes
  (1)
    
    Our pro forma effective tax rate for 2010 is 0%. The pro forma
    tax provision (benefit), before valuation allowance, is ($3,612)
    on pre-tax loss of ($9,914). We have determined that recognizing
    a tax benefit and corresponding deferred tax asset is not
    appropriate as management believes it is more likely the
    deferred tax asset will not be realized. We will also assume
    certain tax attributes of certain parent entities of FIF HE
    Holdings LLC as a result of the Restructuring, including
    approximately $200 million of net operating loss carry
    forwards as of December 31, 2010. We expect that the
    utilization of these tax attributes will be limited pursuant to
    Sections 382 and 383 of the Internal Revenue Code. 
  Our pro forma effective tax rate for the quarter ended March 31,
    2011 is 0%. The pro forma tax provision, before any valuation
    adjustments, is $2,782 on pre-tax income of $7,369. Nationstar
    assumes for pro forma purposes that the previously recorded
    valuation allowance will be released to the extent necessary to
    eliminate any tax provision. 
  (2)
    
    Represents number of shares issued and outstanding after giving
    effect to our sale of common stock in this offering and does not
    include common stock that may be issued and sold upon exercise
    of the underwriters overallotment option.
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(3)
    
    Cash and cash equivalents is one component of our overall
    liquidity position. Our liquidity position is a combination of
    cash and cash equivalents and unencumbered assets. We follow a
    disciplined cash management approach that uses our excess
    liquidity or cash available to deploy for investments to
    temporarily paydown existing borrowings on mortgage loans held
    for sale and accounts receivables. At the time we identify
    investment opportunities, we will leverage these unencumbered
    assets to fulfill the purchase price.(4)
    
    Adjusted EBITDA is a key performance measure used by management
    in evaluating the performance of our segments. Adjusted EBITDA
    represents our Operating Segments income (loss), and
    excludes income and expenses that relate to the financing of the
    unsecured senior notes, depreciable (or amortizable) asset base
    of the business, income taxes (if any), exit costs from our 2007
    restructuring and certain non-cash items. Adjusted EBITDA
    excludes results from our legacy asset portfolio and certain
    securitization trusts that were consolidated upon adoption of
    the new accounting guidance eliminating the concept of QSPE.Adjusted EBITDA provides us with a key measure of our Operating
    Segments performance as it assists us in comparing our
    Operating Segments performance on a consistent basis.
    Management believes Adjusted EBITDA is useful in assessing the
    profitability of our core business and uses Adjusted EBITDA in
    evaluating our operating performance as follows:    Financing arrangements for our Operating
    Segments are secured by assets that are allocated to these
    segments. Interest expense that relate to the financing of the
    unsecured senior notes is not considered in evaluating our
    operating performance because this obligation is serviced by the
    excess earnings from our Operating Segments after the debt
    obligations that are secured by their assets.  To monitor operating costs of each Operating
    Segment excluding the impact from depreciation, amortization and
    fair value change of the asset base, exit costs from our 2007
    restructuring and non-cash operating expense, such as
    share-based compensation. Operating costs are analyzed to manage
    costs per our operating plan and to assess staffing level,
    implementation of technology based solutions, rent and other
    general and administrative costs.  Management does not assess the growth prospect and profitability
    of our legacy asset portfolio and certain securitization trusts
    that were consolidated upon adoption of the new accounting
    guidance, except to the extent to assess cash flows from the
    assets in the legacy asset portfolio are sufficient to service
    its debt obligations.We also use Adjusted EBITDA (with additional adjustments) to
    measure our compliance with covenants such as leverage coverage
    ratios for our unsecured senior notes.Adjusted EBITDA has limitations as an analytical tool, and
    should not be considered in isolation, or as a substitute for
    analysis of our results as reported under generally accepted
    accounting principles in the United States (GAAP).
    Some of these limitations are:    Adjusted EBITDA does not reflect our cash
    expenditures, or future requirements for capital expenditures or
    contractual commitments;  Adjusted EBITDA does not reflect changes in,
    or cash requirements for, our working capital needs;  Adjusted EBITDA does not reflect the cash
    requirements necessary to service principal payments related to
    the financing of the business;  Adjusted EBITDA does not reflect the interest
    expense, or the cash requirements necessary to service interest
    or principal payments, on our corporate debt;  although depreciation and amortization and
    changes in fair value of mortgage servicing rights are non-cash
    charges, the assets being depreciated and amortized will often
    have to
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be replaced in the future, and Adjusted EBITDA does not reflect
    any cash requirements for such replacements; and  other companies in our industry may calculate
    Adjusted EBITDA differently than we do, limiting their
    usefulness as comparative measures.  Because of these and other limitations, Adjusted EBITDA should
    not be considered as measures of discretionary cash available to
    us to invest in the growth of our business. Adjusted EBITDA is
    presented to provide additional information about our
    operations. Adjusted EBITDA is a non-GAAP measure and should be
    considered in addition to, but not as a substitute for or
    superior to, operating income, net income, operating cash flow
    and other measures of financial performance prepared in
    accordance with GAAP. We compensate for these limitations by
    relying primarily on our GAAP results and using Adjusted EBITDA
    only supplementally.  
 Three Months EndedYear Ended December 31,


March 31,2008


2009


2010


2010


2011(in thousands)Net Income (Loss) to Adjusted EBITDA ReconciliationNet income (loss)

$
(157,610
)

$
(80,877
)

$
(9,914
)

$
732


$
7,369Add:Net (income) loss from Legacy Portfolio and Other


164,738



97,263



24,806



827



4,275Net income from Operating Segments


7,128



16,386



14,892



1,559



11,644Adjust for:Interest expense from unsecured senior notes










24,628



1,719



7,548Depreciation and amortization


1,172



1,542



1,873



355



641Change in fair value of mortgage servicing rights


11,701



27,915



6,043



4,600



3,784Exit
    costs(a)


1,507



2,222











Share-based compensation


1,633



579



8,999



147



5,238Fair value changes on interest rate
    swap(b)










9,801



2,779



Ineffective portion of cash flow hedge










(930
)






(902
)Adjusted EBITDA

$
23,141


$
48,644


$
65,306


$
11,159


$
27,953  
    (a)
    
    Relates to restructuring program initiated in 2007, which
    included closing several offices and the termination of a
    portion of our workforce. Restructuring charges for the years
    ended December 31, 2008 and 2009, are primarily due to
    reserves on future lease payments.(b)
    
    Relates to an interest rate swap agreement which was treated as
    an economic hedge under ASC 815 since inception to
    September 30, 2010.
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RISK
    FACTORS  Investing in our common stock involves a high degree of risk.
    You should carefully consider the following risk factors, as
    well as other information contained in this prospectus, before
    deciding to invest in our common stock. The occurrence of any of
    the following risks could materially and adversely affect our
    business, prospects, financial condition, results of operations
    and cash flow, in which case, the trading price of our common
    stock could decline and you could lose all or part of your
    investment.
  Risks Related to
    Our Business and Industry
  Our
    foreclosure proceedings in certain states have been delayed due
    to inquiries by certain state Attorneys General, court
    administrators and state and federal governmental agencies, the
    outcome of which could have a negative effect on our operations
    or liquidity.
   
   
    The Dodd-Frank
    Act could increase our regulatory compliance burden and
    associated costs, limit our future capital raising strategies,
    and place restrictions on certain origination and servicing
    operations.
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The
    enforcement consent orders by certain federal agencies against
    the largest servicers related to foreclosure practices could
    impose additional compliance costs on our servicing
    business.
   
   
  The continued
    deterioration of the residential mortgage market may adversely
    affect our business, financial condition or results of
    operations.
  loan-to-value loan-to-value loan-to-value
 16




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loan-to-value
 
    We may
    experience serious financial difficulties as some servicers and
    originators have experienced.
    Borrowers with
    adjustable rate mortgage loans are especially exposed to
    increases in monthly payments and they may not be able to
    refinance, which could cause delinquency, default and
    foreclosure and therefore adversely affect our
    business.
 
   
 
  We principally
    service higher risk loans, which exposes us to a number of
    different risks.
 
 
   
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A significant
    change in delinquencies for the loans we service could adversely
    affect our financial results.
    
    Revenue.  An increase in delinquencies will
    result in lower revenue for loans that we service for GSEs
    because we only collect servicing fees from GSEs for performing
    loans. Additionally, while increased delinquencies generate
    higher ancillary fees, including late fees, these fees are not
    likely to be recoverable in the event that the related loan is
    liquidated. In addition, an increase in delinquencies lowers the
    interest income we receive on cash held in collection and other
    accounts.
    Expenses.  An increase in delinquencies will
    result in a higher cost of service due to the increased time and
    effort required to collect payments from delinquent borrowers.
    It may also result in an increase in interest expense as a
    result of an increase in our advancing obligations.
    Liquidity.  An increase in delinquencies also
    could negatively impact our liquidity because of an increase in
    borrowing under our advance facilities.
    Valuation of mortgage servicing rights.  We
    base the price we pay for mortgage servicing rights on, among
    other things, our projections of the cash flows from the related
    pool of mortgage loans. Our expectation of delinquencies is a
    significant assumption underlying those cash flow projections.
    If delinquencies were significantly greater than expected, the
    estimated fair value of our mortgage servicing rights could be
    diminished. When the estimated fair value of mortgage servicing
    rights is reduced, we would suffer a loss, which has a negative
    impact on our financial results.    Decreasing
    property values have caused an increase in
    loan-to-value
    ratios, resulting in borrowers having little or negative equity
    in their property, which may reduce new loan originations and
    provide incentive to borrowers to strategically default on their
    loans.
  loan-to-value loan-to-value
  The industry
    in which we operate is highly competitive.
   18




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e-commerce
 
  We might not
    be able to maintain or grow our business if we cannot identify
    and acquire mortgage servicing rights or enter into additional
    subservicing agreements on favorable terms.
 
 
  run-off, deed-in-lieu
 
  
    the rates of prepayment and repayment within the underlying
    pools of mortgage loans;
    projected rates of delinquencies, defaults and liquidations;
    future interest rates;
    our cost to service the loans;
    ancillary fee income; and
    amounts of future servicing advances.  We may not be
    able to realize our significant investments in personnel and our
    technology platform if we cannot identify and acquire mortgage
    servicing rights or enter into additional subservicing
    agreements on favorable terms.
    We may not
    realize all of the anticipated benefits of potential future
    acquisitions.
  and/or scale-up and/or
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and/or
  
    coordinating market functions;
    unanticipated issues in integrating information, communications
    and other systems;
    unanticipated incompatibility of purchasing, logistics,
    marketing and administration methods;
    retaining key employees; and
    the diversion of managements attention from ongoing
    business concerns.    We may be
    unable to obtain sufficient capital to meet the financing
    requirements of our business.
    
    limitations imposed on us under the indenture for our
    10.875% senior notes due 2015 and other financing
    agreements that contain restrictive covenants and borrowing
    conditions that may limit our ability to raise additional debt;
    the decline in liquidity in the credit markets;
    prevailing interest rates;
    the strength of the lenders from whom we borrow;
    borrowing on advance facilities is limited by the amount of
    eligible collateral pledged and may be less than the borrowing
    capacity of the facility; and
    accounting changes that may impact calculations of covenants in
    our debt agreements.    and/or and/or
 20




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##### Table of Contents



We may not be
    able to continue to grow our loan origination
    volume.
      and/or
  Our
    counterparties may terminate our servicing rights and
    subservicing contracts.
       21




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##### Table of Contents



Federal, state
    and local laws and regulations may materially adversely affect
    our business.
  and/or
        Unlike
    competitors that are banks, we are subject to state licensing
    requirements and substantial compliance costs.
    Federal and
    state legislative and agency initiatives in mortgage-backed
    securities and securitization may adversely affect our
    business.
   22




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##### Table of Contents



Our business
    would be adversely affected if we lost our
    licenses.
     
  We may be
    required to indemnify or repurchase loans we originated, or will
    originate, if our loans fail to meet certain criteria or
    characteristics or under other circumstances.
 
 
   
 
  
    our representations and warranties concerning loan quality and
    loan circumstances are inaccurate, including representations
    concerning the licensing of a mortgage broker; 
 
  
    we fail to secure adequate mortgage insurance within a certain
    period after closing; 
 
  
    a mortgage insurance provider denies coverage; and 
 
  
    we fail to comply, at the individual loan level or otherwise,
    with regulatory requirements in the current dynamic regulatory
    environment. 
 
   
 23




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##### Table of Contents



We may incur
    litigation costs and related losses if the validity of a
    foreclosure action is challenged by a borrower or if a court
    overturns a foreclosure.
    We are
    required to follow the guidelines of the GSEs with which we do
    business, and we are not able to negotiate our fees with these
    entities for the purchase of our loans. Our competitors may be
    able to sell their loans to these entities on more favorable
    terms.
      
    our staffing levels and other servicing practices;
    the servicing and ancillary fees that we may charge;
    our modification standards and procedures; and
    the amount of advances reimbursable.    We are
    required to make servicing advances that can be subject to
    delays in recovery or may not be recoverable in certain
    circumstances.
   24




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##### Table of Contents



Changes to
    government mortgage modification programs may adversely affect
    future incremental revenues.
    loan-to-value
  We are highly
    dependent upon programs administered by GSEs such as Fannie Mae
    and Freddie Mac to generate revenues through mortgage loan sales
    to institutional investors. Any changes in existing U.S.
    government-sponsored mortgage programs could materially and
    adversely affect our business, financial position, results of
    operations or cash flows.
      The
    conservatorship of Fannie Mae and Freddie Mac and related
    efforts, along with any changes in laws and regulations
    affecting the relationship between Fannie Mae and Freddie Mac
    and the U.S. federal government, may adversely affect our
    business and prospects.
   25




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##### Table of Contents



The geographic
    concentration of our servicing portfolio may result in a higher
    rate of delinquencies and may affect our financial
    condition.
 
   
  We use
    financial models and estimates in determining the fair value of
    certain assets, such as mortgage servicing rights and
    investments in debt securities. If our estimates or assumptions
    prove to be incorrect, we may be required to record impairment
    charges, which could adversely affect our
    earnings.
   26




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##### Table of Contents



Our earnings
    may decrease because of changes in prevailing interest
    rates.
    
    an increase in prevailing interest rates could generate an
    increase in delinquency, default and foreclosure rates resulting
    in an increase in both operating expenses and interest expense
    and could cause a reduction in the value of our assets;
    a substantial and sustained increase in prevailing interest
    rates could adversely affect our loan origination volume because
    refinancing an existing loan would be less attractive for
    homeowners and qualifying for a loan may be more difficult for
    consumers;
    an increase in prevailing interest rates would increase the cost
    of servicing our outstanding debt, including our ability to
    finance servicing advances and loan originations;
    a decrease in prevailing interest rates may require us to record
    a decrease in the value of our mortgage servicing
    rights; and
    a change in prevailing interest rates could impact our earnings
    from our custodial deposit accounts.    Our hedging
    strategies may not be successful in mitigating our risks
    associated with interest rates.
    A downgrade in
    our servicer ratings could have an adverse effect on our
    business, financial condition or results of
    operations.
    We depend on
    the accuracy and completeness of information about borrowers and
    counterparties.
   27




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##### Table of Contents



and/or
  Technology
    failures could damage our business operations and increase our
    costs.
    The success
    and growth of our business will depend upon our ability to adapt
    to and implement technological changes.
    Any failure of
    our internal security measures or breach of our privacy
    protections could cause harm to our reputation and subject us to
    liability.
    Our vendor
    relationships subject us to a variety of risks.
   28




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##### Table of Contents



The loss of
    the services of our senior managers could have an adverse effect
    on our business.
 
   
  Our business
    could suffer if we fail to attract and retain a highly skilled
    workforce.
    Legal
    proceedings and related costs could adversely affect our
    financial results.
    Negative
    public opinion could damage our reputation and adversely affect
    our earnings.
   29




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##### Table of Contents



Risks Related to
    Our Organization and Structure
  If the
    ownership of our common stock continues to be highly
    concentrated, it may prevent you and other minority stockholders
    from influencing significant corporate decisions and may result
    in conflicts of interest.
    We are a
    holding company with no operations and rely on our operating
    subsidiaries to provide us with funds necessary to meet our
    financial obligations and to pay dividends.
    We do not
    anticipate paying any dividends on our common stock in the
    foreseeable future.
    Certain
    provisions of the Stockholders Agreement, our amended and
    restated certificate of incorporation and our bylaws could
    hinder, delay or prevent a change in control of our company,
    which could adversely affect the price of our common
    stock.
    
    a classified board of directors with staggered three-year terms; 30




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##### Table of Contents




    removal of directors only for cause and only with the
    affirmative vote of at least 80% of the voting interest of
    stockholders entitled to vote (provided, however, that for so
    long as the Fortress Stockholders (as defined below) own at
    least 40% of our issued and outstanding common stock, directors
    may be removed with or without cause with the affirmative vote
    of a majority of the voting interest of stockholders entitled to
    vote);
    provisions in our amended and restated certificate of
    incorporation and bylaws will prevent stockholders from calling
    special meetings of our stockholders (provided, however, that
    for so long as the Fortress Stockholders beneficially own at
    least 25% of our issued and outstanding common stock, any
    stockholders that collectively beneficially own at least 25% of
    our issued and outstanding common stock may call special
    meetings of our stockholders);
    advance notice requirements by stockholders with respect to
    director nominations and actions to be taken at annual meetings;
    the Stockholders Agreement will provide certain rights to the
    Fortress Stockholders with respect to the designation of
    directors for nomination and election to our board of directors,
    including the ability to appoint a majority of the members of
    our board of directors for so long as the Fortress Stockholders
    continue to hold at least 40% of the outstanding shares of our
    common stock. See Certain Relationships and Related Party
    TransactionsStockholders Agreement;
    no provision in our amended and restated certificate of
    incorporation for cumulative voting in the election of
    directors, which means that the holders of a majority of the
    outstanding shares of our common stock can elect all the
    directors standing for election;
    our amended and restated certificate of incorporation and bylaws
    will only permit action by our stockholders outside a meeting by
    unanimous written consent, provided, however, that for so long
    as the Fortress Stockholders beneficially own at least 25% of
    our issued and outstanding common stock, our stockholders may
    act without a meeting by written consent of a majority of our
    stockholders; and
    under our amended and restated certificate of incorporation, our
    board of directors has authority to cause the issuance of
    preferred stock from time to time in one or more series and to
    establish the terms, preferences and rights of any such series
    of preferred stock, all without approval of our stockholders.
    Nothing in our amended and restated certificate of incorporation
    precludes future issuances without stockholder approval of the
    authorized but unissued shares of our common stock.  and/or
  Certain of our
    stockholders have the right to engage or invest in the same or
    similar businesses as us.
   31




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Risks Related to
    this Offering
  An active
    trading market for our common stock may never develop or be
    sustained.
 
   
  The market
    price and trading volume of our common stock may be volatile,
    which could result in rapid and substantial losses for our
    stockholders.
 
   
  
    variations in our quarterly or annual operating results;
    changes in our earnings estimates (if provided) or differences
    between our actual financial and operating results and those
    expected by investors and analysts;
    the contents of published research reports about us or our
    industry or the failure of securities analysts to cover our
    common stock after this offering;
    additions or departures of key management personnel;
    any increased indebtedness we may incur in the future;
    announcements by us or others and developments affecting us;
    actions by institutional stockholders;
    litigation and governmental investigations;
    changes in market valuations of similar companies;
    speculation or reports by the press or investment community with
    respect to us or our industry in general;
    increases in market interest rates that may lead purchasers of
    our shares to demand a higher yield; 32




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##### Table of Contents




    announcements by us or our competitors of significant contracts,
    acquisitions, dispositions, strategic relationships, joint
    ventures or capital commitments; and
    general market, political and economic conditions, including any
    such conditions and local conditions in the markets in which our
    customers are located.    Future
    offerings of debt or equity securities by us may adversely
    affect the market price of our common stock.
 
   
  The market
    price of our common stock could be negatively affected by sales
    of substantial amounts of our common stock in the public
    markets.
     33




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##### Table of Contents



The future
    issuance of additional common stock in connection with our
    incentive plans, acquisitions or otherwise will dilute all other
    shareholdings.
    Investors in
    this offering will suffer immediate and substantial
    dilution.
 
   
  We will have
    broad discretion in the use of a significant part of the net
    proceeds from this offering and may not use them
    effectively.
    As a public
    company, we will incur additional costs and face increased
    demands on our management.
   34




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##### Table of Contents



We will be
    required by Section 404 of the Sarbanes-Oxley Act to
    evaluate the effectiveness of our internal controls by the end
    of fiscal 2012, and the outcome of that effort may adversely
    affect our business, financial condition or results of
    operations.
 
 
  U.S.-listed
 
  Risks Related to
    Taxation
  Our ability to
    use net operating loss and tax credit carryovers and certain
    built-in losses to reduce future tax payments is limited by
    provisions of the Internal Revenue Code, and may be subject to
    further limitation as a result of the transactions contemplated
    by this offering.
     35




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##### Table of Contents



SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS    
    the impact of the ongoing implementation of the Dodd-Frank Wall
    Street Reform and Consumer Protection Act of 2010 on our
    business activities and practices, costs of operations and
    overall results of operations;
    the impact of enforcement consent orders entered into by 14 of
    the largest servicers and four federal agencies on our servicing
    practices;
    the continued deterioration of the residential mortgage market,
    increase in monthly payments on adjustable rate mortgage loans,
    adverse economic conditions, decrease in property values or
    increase in delinquencies and defaults;
    our ability to compete successfully in the mortgage loan
    servicing and mortgage loan originations industry;
    our ability to maintain the size of our servicing portfolio by
    successfully identifying attractive acquisition opportunities,
    including mortgage servicing rights, subservicing contracts,
    servicing platforms and origination platforms;
    our ability to
    scale-up
    appropriately and integrate our acquisitions to realize the
    anticipated benefits of any such potential future acquisitions;
    our ability to obtain sufficient capital to meet our financing
    requirements;
    our ability to grow our loan origination volume and develop a
    distributed retail sales channel;
    the termination of our servicing rights and subservicing
    contracts;
    changes to federal, state and local laws and regulations
    concerning loan servicing, loan origination, loan modification
    or the licensing of entities that engage in these activities;
    changes in accounting standards;
    our ability to meet certain criteria or characteristics under
    the indentures governing our securitized pools of loans;
    our ability to follow the specific guidelines of GSEs or a
    significant change in such guidelines;
    delays in our ability to collect or be reimbursed for servicing
    advances; 
  
    changes to HAMP, MHA or other similar government programs; 
 36




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
    loss of our licenses;
    changes in our business relationships with Fannie Mae, Freddie
    Mac, Ginnie Mae and others that facilitate the issuance of
    mortgage-backed securities;
    changes to the nature of the guarantees of Fannie Mae and
    Freddie Mac and the market implications of such changes;
    errors in our financial models or changes in assumptions;
    requirement to write down the value of certain assets;
    changes in prevailing interest rates;
    our ability to successfully mitigate our risks through hedging
    strategies;
    changes in our servicer ratings;
    the accuracy and completeness of information about borrowers and
    counterparties;
    our ability to maintain our technology systems and our ability
    to adapt such systems for future operating environments;
    failure of our internal security measures or breach of our
    privacy protections;
    failure of our vendors to comply with servicing criteria;
    the loss of the services of our senior managers;
    expected changes to our income tax status;
    failure to attract and retain a highly skilled workforce;
    increase in legal proceedings and related costs;
    changes in public opinion concerning mortgage originators or
    default specialists;
    conflicts of interest with Fortress and our Initial
    Stockholder; and
    other risks described in the Risk Factors section of
    this prospectus beginning on page 15.     37




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USE OF
    PROCEEDS     38




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DIVIDEND
    POLICY     39




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##### Table of Contents



CAPITALIZATION   
  
    on an actual basis; and
    on an as adjusted basis to give effect to the Restructuring and
    sale
    of           shares
    of common stock by us in this offering, at an assumed initial
    public offering price of $      per
    share, the midpoint of the price range set forth on the cover
    page of this prospectus, after deducting the underwriting
    discount and estimated offering expenses payable by us.    
 As of March 31, 2011Actual


As Adjusted(in thousands)Cash and cash
    equivalents(1)

$
48,420


$Debt:10.875% Senior Notes Due 2015


244,410Notes payable:Servicing:MBS Advance Financing Facility


136,795ABS Advance Financing Facility


219,146MSR Notes


14,345Originations:$300 Million Warehouse Facility


177,648$100 Million Warehouse Facility


27,942$75 Million Warehouse Facility


27,063$50 Million Warehouse Facility


GSE ASAP+ Short-Term Financing Facility


5,512Total notes payable


608,451Non-recourse debtLegacy Assets


133,592ABS non-recourse debt (at fair value)


489,321Total debt


1,475,774Stockholders and members equity:Members equity


265,243Common stock, par value $     per
    share;          shares
    authorized
    and          shares
    issued and outstanding on a pro forma basis


Additional paid-in capital


Total stockholders and members equity


265,243Total capitalization

$
1,741,017  
 
 
   
  Notes
 
 
  (1)
    
    We utilize a cash management approach that uses our excess cash
    to temporarily pay down existing borrowings. By re-leveraging
    our unencumbered assets, our total liquidity position was
    $114.9 million as of March 31, 2011. Total liquidity
    is a measure that management uses to determine amounts expected
    to be available to fund our business and consists of cash and
    cash equivalents ($48.4 million as of March 31, 2011)
    as well as amounts we believe we would receive in respect of
    unencumbered assets ($66.7 million as of March 31,
    2011). Unencumbered assets for this purpose consist of servicing
    advances that we expect to be converted into cash within a short
    period of time and new loans that are eligible to be financed
    under available committed warehouse lines. 
 40




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DILUTION   
   
  
 Assumed initial public offering price per share

$Net tangible book value per share as of March 31, 2011Increase in net tangible book value per share attributable to
    this offeringPro forma as adjusted net tangible book value per share after
    giving effect to this offeringDilution per share to new investors in this offering

$  
   
   
  AverageShares Purchased

Total Contribution

price perNumber

Percent

Amount

Percent

Share(in thousands)

(in thousands)Existing StockholdersNew investorsTotal      41




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##### Table of Contents



42




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##### Table of Contents



SELECTED
    HISTORICAL CONSOLIDATED FINANCIAL DATA         
   
 43




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##### Table of Contents



July 11, 2006














Three Months Endedto December


Year Ended December 31,


March 31,31, 2006


2007


2008


2009


2010


2010


2011(Dollars in thousands, except for per share amounts)Statement of Operations Data:Revenues:Total fee income

$
14,161


$
46,301


$
74,007


$
100,218


$
184,084


$
38,750


$
64,686Gain (loss) on mortgage loans held for sale


4,476



(94,673
)


(86,663
)


(21,349
)


77,344



12,429



20,506Total revenues


18,637



(48,372
)


(12,656
)


78,869



261,428



51,179



85,192Total expenses and impairments


98,837



259,222



147,777



142,367



220,976



40,089



68,121Other income (expense):Interest income


75,114



163,022



92,060



52,518



98,895



31,333



18,318Interest expense


(55,172
)


(118,553
)


(65,548
)


(69,883
)


(116,163
)


(29,135
)


(25,368
)Loss on interest rate swaps and caps






(21,353
)


(23,689
)


(14
)


(9,801
)


(2,779
)


Fair value changes in ABS securitizations


















(23,297
)


(9,777
)


(2,652
)Total other income (expense)


19,942



23,116



2,823



(17,379
)


(50,366
)


(10,358
)


(9,702
)Net loss

$
(60,258
)

$
(284,478
)

$
(157,610
)

$
(80,877
)

$
(9,914
)

$
732


$
7,369Pro Forma Information (unaudited):Historical net (loss) income before taxes

















$
(9,914
)





$
7,369Pro forma adjustment for
    taxes(1)


























Pro forma net (loss) income

















$
(9,914
)






7,369Net income (loss) per share:BasicDilutedNumber of shares
    outstanding(2):BasicDiluted  
    Notes
  (1)
    
    Our pro forma effective tax rate for 2010 is 0%. The pro forma
    tax provision (benefit), before valuation allowance, is ($3,612)
    on pre-tax loss of ($9,914). We have determined that recognizing
    a tax benefit and corresponding deferred tax asset is not
    appropriate as management believes it is more likely than not
    the deferred tax asset will not be realized. We will also assume
    certain tax attributes of certain parent entities of FIF HE
    Holdings LLC as a result of the Restructuring, including
    approximately $200 million of net operating loss carry forwards
    as of December 31, 2010. We expect to record a full valuation
    allowance against any resulting deferred tax asset. The
    utilization of these tax attributes will be limited pursuant to
    Sections 382 and 383 of the Internal Revenue Code. 
  Our pro forma effective tax rate for the quarter ended
    March 31, 2011 is 0%. The pro forma tax provision, before
    any valuation adjustments, is $2,782 on pre-tax income of
    $7,369. Nationstar assumes for pro forma purposes that the
    previously recorded valuation allowance will be released to the
    extent necessary to eliminate any tax provision. 
 
 
 44




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(2)
    
    Represents number of shares issued and outstanding after giving
    effect to our sale of common stock in this offering and does not
    include common stock that may be issued and sold upon exercise
    of the underwriters overallotment option.  
 As ofAs of December 31,


March 31,2006


2007


2008


2009


2010


2010


2011(in thousands)Balance Sheet Data:Cash and cash equivalents

$
10,335


$
41,251


$
9,357


$
41,645


$
21,223


$
21,223


$
48,420Mortgage servicing rights


49,783



82,634



110,808



114,605



145,062



145,062



151,159Total assets


2,145,007



1,303,221



1,122,001



1,280,185



1,947,181



1,947,181



1,868,255Unsecured senior notes


















244,061



244,061



244,410Notes payable


1,966,368



967,307



810,041



771,857



709,758



709,758



608,451Nonrecourse debtLegacy Assets














177,675



138,662



138,662



133,592ABS nonrecourse debt


















496,692



496,692



489,321Total liabilities


2,005,213



1,041,525



866,079



1,016,362



1,690,809



1,690,809



1,603,012Total members equity


139,794



261,696



255,922



263,823



256,372



256,372



265,243  
 45




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##### Table of Contents



MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS  Nationstar Mortgage Holdings Inc. is a newly formed Delaware
    corporation that has not, to date, conducted any activities
    other than those incident to its formation and the preparation
    of this registration statement. Upon the completion of the
    Restructuring, we will conduct our business through Nationstar
    Mortgage LLC and its consolidated subsidiaries. The following
    discussion and analysis of our financial condition and results
    of operations should be read together with our financial
    statements and related notes and other financial information
    appearing elsewhere in this prospectus. This discussion and
    analysis contains forward-looking statements that involve risk,
    uncertainties and assumptions. See Cautionary Statement
    Regarding Forward-Looking Statements. Our actual results
    could differ materially from those anticipated in the forward
    looking statements as a result of many factors, including those
    discussed in Risk Factors and elsewhere in this
    prospectus. Except where the context otherwise requires, the
    terms we, us, or our refer
    to the business of Nationstar Mortgage LLC and its consolidated
    subsidiaries.
  General
  Our
    Business
 
  and/or
 
        Managing
    Business Performance
   46




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##### Table of Contents



non-controlling
          Market
    Considerations
   47




---



##### Table of Contents



Servicing
        Dodd-Frank
    Originations
    loan-to-value
    Critical
    Accounting Policies
   48




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##### Table of Contents



Fair Value
    Measurements
  Mortgage Loans
    Held for Sale
    Mortgage Loans
    Held for Investment, subject to ABS nonrecourse debt
    Investment in
    Debt Securities
  available-for-sale
    Mortgage
    Servicing Rights
   49




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##### Table of Contents



Derivative
    Financial Instruments
 
   
  ABS Nonrecourse
    Debt
     50




---



##### Table of Contents



Sale of Mortgage
    Loans
 
   
  Recent
    Developments
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 51




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##### Table of Contents



Results of
    Operations
  Consolidated
    Results
    
 Three Months EndedMarch 31,


Year Ended December 31,2011


2010


2010


2009


2008Revenues:Total fee income

$
64,686


$
38,750


$
184,084


$
100,218


$
74,007Gain (loss) on mortgage loans held for sale


20,506



12,429



77,344



(21,349
)


(86,663
)Total revenues


85,192



51,179



261,428



78,869



(12,656
)Total expenses and impairments


68,121



40,089



220,976



142,367



147,777Other income (expense):Interest income


18,318



31,333



98,895



52,518



92,060Interest expense


(25,368
)


(29,135
)


(116,163
)


(69,883
)


(65,548
)Loss on interest rate swaps and caps






(2,779
)


(9,801
)


(14
)


(23,689
)Fair value changes in ABS securitizations


(2,652
)


(9,777
)


(23,297
)






Total other income (expense)


(9,702
)


(10,358
)


(50,366
)


(17,379
)


2,823Net loss

$
7,369


$
732


$
(9,914
)

$
(80,877
)

$
(157,610
)  
  Note 22-
    Business Segment Reporting
 
  Comparison of
    Consolidated Results for the Three Months Ended March 31,
    2011 and 2010
 
 
   
 52




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Comparison of
    Consolidated Results for the Years Ended December 31, 2010
    and 2009
   
   
    Comparison of
    Consolidated Results for the Years Ended December 31, 2009
    and 2008
      other-than-temporary
   53




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Segment
    Results
  sub-prime
    Servicing
    Segment
      
 Three Months EndedMarch 31,


Year Ended December 31,2011


2010


2010


2009


2008Revenues:Servicing fee income

$
58,724


$
35,766


$
175,569


$
91,266


$
69,235Other fee income


2,394



1,784



7,273



8,867



5,366Total fee income


61,118



37,550



182,842



100,133



74,601Gain (loss) on mortgage loans held for sale


















Total revenues


61,118



37,550



182,842



100,133



74,601Expenses and impairments:Salaries, wages, and benefits


29,410



16,673



78,269



56,726



41,755General and administrative


9,621



3,576



24,664



10,669



9,878Occupancy


1,376



1,033



4,350



3,502



3,404Total expenses and impairments


40,407



21,282



107,283



70,897



55,037Other income (expense):Interest income


967



220



263



4,143



10,872Interest expense


(13,457
)


(10,646
)


(51,791
)


(25,877
)


(15,718
)Loss on interest rate swaps and caps






(2,779
)


(9,801
)






Total other income (expense)


(12,490
)


(13,205
)


(61,329
)


(21,734
)


(4,846
)Net income from Servicing Segment

$
8,221


$
3,063


$
14,230


$
7,502


$
14,718  
   54




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##### Table of Contents



Three Months EndedMarch 31,


Year Ended December 31,2011


2010


2010


2009


2008(dollars in millions, except for average loan amount)Unpaid principal balance (by investor):Special Servicing

$
8,692


$
1,889


$
4,893


$
1,554


$
1,218Government-sponsored enterprises


51,425



23,737



52,194



24,235



10,709ABS


6,927



7,656



7,089



7,875



9,415Total unpaid principal balance

$
67,044


$
33,282


$
64,176


$
33,664


$
21,342Loan countservicing


404,734



228,365



389,172



230,615



159,336Average Servicing Portfolio

$
65,929


$
33,277


$
38,653


$
25,799


$
12,775Average loan amount

$
165,648


$
145,739


$
164,904


$
145,977


$
133,943Average coupon


5.67
%


6.53
%


5.74
%


6.76
%


7.49
%Average FICO


627



627



631



644



58860+ delinquent (% of
    loans)(1)


16.8
%


18.1
%


17.0
%


19.9
%


13.1
%Total prepayment speed (12 month CPR)


13.0
%


13.2
%


13.3
%


16.3
%


16.2
%  
    (1)
    
    Loan delinquency is based on the current contractual due date of
    the loan. In the case of a completed loan modification,
    delinquency is based on the modified due date of the loan. 
  Revenues
 
 
  For the Three
    Months Ended March 31, 2011 and 2010
 
 
   
 
  
    Servicing fee income increased $23.0 million period over
    period primarily from: 
 
  (a)
    Increase of $21.7 million due to higher average unpaid
    principal balance of $65.9 billion in the 2011 period
    compared to $33.3 billion in the comparable 2010 period.
    The increase in our servicing portfolio was primarily driven by
    an increase in average unpaid principal balance for loans
    serviced for government-sponsored enterprises and other
    subservicing contracts for third party investors of
    $51.7 billion in the 2011 period compared to
    $23.9 billion in the comparable 2010 period. This increase
    was offset by a decrease in average unpaid principal balance for
    our private asset-backed securitizations portfolio, which
    decreased to $7.0 billion in the 2011 period compared to
    $7.7 billion in the comparable 2010 period. 
 
  (b)
    Increase of $1.0 million due to higher modification fees
    earned from HAMP and from modification fees earned on non-HAMP
    modifications. As a high-touch servicer, we use modifications as
    a key loss mitigation tool. Under HAMP, subject to a program
    participation cap, we, as a servicer, will receive an initial
    incentive payment of up to $1,500 for each loan modified in
    accordance with HAMP subject to the condition that the borrower
    successfully completes a trial modification period. With this
    program, the servicer must forego any late fees and may not
    charge any other fees. In addition, provided that a HAMP
    modification does not become 90 days or more delinquent, we
    will receive an incentive of up to $1,000. Initial redefault
    rates have been favorable, averaging 10% to 20%. The HAMP
    program has an expiration date of December 31, 2012 and is
    only eligible for first lien mortgages that were originated on
    or before January 1, 2009. For non-HAMP modifications, we
    generally do not waive late fees, and we charge a modification
    fee. These amounts are collected at the time of the modification. 
 55




---



##### Table of Contents



(c)
    Increase of $1.0 million from change in fair value on
    mortgage servicing rights which was recognized in servicing fee
    income. The fair value of our mortgage servicing rights (MSRs)
    is based upon the present value of the expected future cash
    flows related to servicing these loans. The revenue components
    of the cash flows are servicing fees, interest earned on
    custodial accounts, and other ancillary income. The expense
    components include operating costs related to servicing the
    loans (including delinquency and foreclosure cost) and interest
    expenses on servicing advances. The expected future cash flows
    are primarily impacted by prepayment estimates, delinquencies,
    and market discount rates. Generally, the value of MSRs
    increases when interest rates increase and decreases when
    interest rates decline due to the effect those changes in
    interest rates have on prepayment estimates. Other factors
    affecting the MSR value includes the estimated effects of loan
    modifications on expected cash flows. Such modifications tend to
    positively impact cash flows by extending the expected life of
    the affected MSR and potentially producing additional revenue
    opportunities depending on the type of modification. In valuing
    the MSRs, we believe our assumptions are consistent with the
    assumptions other major market participants use. These
    assumptions include a level of future modification activity that
    we believe major market participants would use in their
    valuation of MSRs. Internally, we have modification goals that
    exceed the assumptions utilized in our valuation model.
    Nevertheless, were we to utilize an assumption of a level of
    future modifications consistent with our internal goals to our
    MSR valuation, we do not believe the resulting increase in value
    would be material. Additionally, as disclosed under
    BusinessLegal Proceedings on page 120, we
    delayed certain foreclosure activities temporarily. Although we
    have resumed those previously delayed proceedings, changes in
    the foreclosure process that may be required by governments or
    regulatory bodies could increase the cost of servicing and
    diminish the value of our MSRs. We utilize assumptions of
    servicing costs that include delinquency and foreclosure costs
    that we believe major market participants would use to value
    their MSRs. We periodically compare our internal MSR valuation
    to third party valuation of our MSRs to help substantiate our
    market assumptions. We have considered the costs related to the
    delayed proceedings into our assumptions and we do not believe
    that any resulting decrease in the MSR was material given the
    expected short-term nature of the issue. 
 
  (d)
    Decrease of $0.8 million due to decreased loss mitigation
    and performance-based incentive fees earned from a
    government-sponsored enterprise. 
 
  
    Other fee income was $2.4 million for the three months
    ended March 31, 2011 compared to $1.8 million for the
    three months ended March 31, 2010, a decrease of
    $0.6 million, or 33.3%, due to lower REO sales commissions
    resulting from a decline in REO sales managed by our internal
    REO sales group. 
 
  For the Years
    Ended December 31, 2010 and 2009
 
    
    Servicing fee income increased $84.3 million period over
    period primarily from:  (a)
    Increase of $34.8 million due to higher average unpaid
    principal balance of $38.7 billion in 2010 compared to
    $25.8 billion in 2009. The increase in our servicing
    portfolio was primarily driven by an increase in average unpaid
    principal balance for loans serviced for GSEs and other
    subservicing contracts for third party investors of
    $31.2 billion in 2010 compared to $17.2 billion in
    2009. This increase was partially offset by a decrease in
    average unpaid principal balance for our asset-backed
    securitizations portfolio, which decreased to $7.4 billion
    in 2010 compared to $8.6 billion in 2009. 56




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##### Table of Contents



(b)
    Increase of $8.9 million due to increased loss mitigation
    and performance-based incentive fees earned from a GSE.(c)
    Increase of $17.9 million due to higher fees earned from
    HAMP and from modification fees earned on non-HAMP
    modifications. As a high-touch servicer, we use modifications as
    a key loss mitigation tool. Under HAMP, subject to a program
    participation cap, we, as a servicer, will receive an initial
    incentive payment of up to $1,500 for each loan modified in
    accordance with HAMP subject to the condition that the borrower
    successfully completes a trial modification period. With this
    program, the servicer must forego any late fees and may not
    charge any other fees. In addition, provided that a HAMP
    modification does not become 90 days or more delinquent, we
    will receive an additional incentive fee of up to $1,000.
    Initial redefault rates have been favorable, averaging 10% to
    20%. The HAMP program has an expiration date of
    December 31, 2012 and is only applicable to first lien
    mortgages that were originated on or before January 1,
    2009. For non-HAMP modifications, we generally do not waive late
    fees, and we charge a modification fee. These amounts are
    collected at the time of the modification. 
  (d)
    Increase of $21.9 million from change in fair value on
    mortgage servicing rights which was recognized in servicing fee
    income. The fair value of our mortgage servicing rights (MSRs)
    is based upon the present value of the expected future cash
    flows related to servicing these loans. The revenue components
    of the cash flows are servicing fees, interest earned on
    custodial accounts, and other ancillary income. The expense
    components include operating costs related to servicing the
    loans (including delinquency and foreclosure costs) and interest
    expenses on servicing advances. The expected future cash flows
    are primarily impacted by prepayment estimates, delinquencies,
    and market discount rates. Generally, the value of MSRs
    increases when interest rates increase and decreases when
    interest rates decline due to the effect those changes in
    interest rates have on prepayment estimates. Other factors
    affecting the MSR value includes the estimated effects of loan
    modifications on expected cash flows. Such modifications tend to
    positively impact cash flows by extending the expected life of
    the affected MSR and potentially producing additional revenue
    opportunities depending on the type of modification. 
    (e)
    Increase of $1.0 million due to an increase in ancillary
    and late fees arising from growth in the servicing portfolio.
    Late fees are recognized as revenue at collection.  
    Other fee income decreased $1.6 million for the year ended
    December 31, 2010 due to lower lender-placed insurance
    commissions and lower REO sales commissions resulting from a
    decline in REO sales managed by our internal REO sales group.  For the Years
    Ended December 31, 2009 and 2008
    
    Servicing fee income increased $22.1 million year over year
    primarily from:  (a)
    Increase of $20.8 million due to higher average unpaid
    principal balance of $25.8 billion in 2009 compared to
    $12.8 billion in 2008. The increase in our servicing
    portfolio was primarily driven by an increase in average unpaid
    principal balance for loans serviced for 57




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##### Table of Contents



GSEs and other subservicing contracts for third party investors
    in 2009 compared to 2008. This increase was partially offset by
    a decrease in average unpaid principal balance for our
    asset-backed securitizations portfolio, which decreased in 2009
    compared to 2008.  (b)
    Increase of $7.7 million due to increased loss mitigation
    and performance-based incentive fees earned from a GSE.(c)
    Increase of $3.3 million due to higher modification fees
    earned from HAMP and from modification fees earned on non-HAMP
    modifications.(d)
    Increase of $7.0 million due to increased collection of
    late fees, primarily due to higher average unpaid principal
    balance of our servicing portfolio. Late fees are recognized as
    revenue at collection.(e)
    Decrease of $16.2 million from change in fair value on
    mortgage servicing rights which was recognized in servicing fee
    income.  
    Other fee income increased $3.5 million for the year ended
    December 31, 2009 from higher lender-placed insurance
    commissions, which is primarily due to higher delinquency rates
    in 2009 compared to 2008.  Expenses and
    Impairments
 
  For the Three
    Months Ended March 31, 2011 and 2010
 
 
   
  For the Years
    Ended December 31, 2010 and 2009
 
   
  For the Years
    Ended December 31, 2009 and 2008
   58




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##### Table of Contents



Other Income
    (Expense)
 
  For the Three
    Months Ended March 31, 2011 and 2010
 
 
   
 
  
    Interest income increased $0.7 million due to higher
    average outstanding custodial cash deposit balances as a result
    of our increased servicing portfolio. 
 
  
    Interest expense was $13.5 million for the three months
    ended March 31, 2011 compared to $10.6 million for the
    three months ended March 31, 2010, an increase of
    $2.9 million, or 27.4%, primarily due to the senior
    unsecured notes, paying 10.875% interest expense. This increase
    was partially offset by lower interest expense on the remaining
    debt. Excluding the senior unsecured notes, the average
    outstanding debt was $373.8 million in 2011 compared to
    $630.1 million for the same period in 2010. 
 
  
    Loss on interest rate swaps and caps was $0.0 million for
    the three months ended March 31, 2011 compared to
    $2.8 million for the three months ended March 31,
    2010. Effective October 1, 2010, we designated an existing
    interest rate swap as a cash flow hedge against outstanding
    floating rate financing associated with one of our outstanding
    servicer advance facilities. This interest rate swap is recorded
    at fair value, with any changes in fair value being recorded as
    an adjustment to other comprehensive income. Prior to this
    designation, any changes in fair value were being recorded as a
    loss on interest rate swaps and caps on our statement of
    operations. 
  For the Years
    Ended December 31, 2010 and 2009
    
    Interest income decreased $3.8 million due to lower average
    index rates received on custodial cash deposits associated with
    mortgage loans serviced combined with lower average outstanding
    custodial cash deposit balances.
    Interest expense increased $25.9 million primarily due to
    higher average outstanding debt of $638.6 million in 2010
    compared to $313.3 million in 2009, offset by lower
    interest rates due to declines in the base LIBOR and decreases
    in the overall index margin on outstanding servicer advance
    facilities. Additionally, in 2010, we have included the balances
    related to our outstanding corporate note and senior unsecured
    debt balances, and the related interest expense thereon, as a
    component of our Servicing Segment. As a result of the weakening
    housing market, we continued to carry approximately
    $530.9 million in residential mortgage loans that we were
    unable to securitize as mortgage loans held for sale on our
    balance sheet throughout most of 2009. During this time period,
    we allocated a portion of our outstanding corporate note balance
    to Legacy Portfolio and Other to account for the increased
    capacity and financing costs we incurred while these loans were
    retained on our balance sheet. For the year ended
    December 31, 2010, we recorded $21.7 million in
    interest expense related to our outstanding corporate and
    10.875% senior notes.
    Loss on interest rate swaps and caps was $9.8 million for
    the year ended December 31, 2010, with no corresponding
    gain or loss recognized for the year ended December 31,
    2009. The loss for the period was a result of a decline in fair
    value recognized during the period on outstanding interest rate
    swaps designed to economically hedge the interest rate risk
    associated with our
    2009-ADV1
    Servicer Advance Facility. This facility was not executed until
    the end of the fourth quarter of 2009, so we did not recognize
    any corresponding fair value adjustments during the year ended
    December 31, 2009. 59




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##### Table of Contents



For the Years
    Ended December 31, 2009 and 2008
    
    Increase of $7.7 million from additional amortization of
    deferred financing costs resulting from refinancing or renewal
    of our advance financing facilities.
    Increase of $6.7 million from decline in interest income
    earned on custodial cash deposits associated with mortgage loans
    serviced primarily due to lower average deposits and index rates.
    Increase of $1.4 million from compensating interest due to
    increased average unpaid principal balance.
    Increase of $1.1 million from higher average outstanding
    debt of $313.3 million in 2009 compared to
    $259.1 million in 2008, offset by lower interest rates due
    to declines in the base LIBOR.  Originations
    Segment
      
 Three Months EndedMarch 31,


Year Ended December 31,2011


2010


2010


2009


2008Revenues:Servicing fee income

$



$



$



$



$
Other fee income


4,044



1,666



7,042



1,156



589Total fee income


4,044



1,666



7,042



1,156



589Gain on mortgage loans held for sale


20,569



12,446



77,498



54,437



21,985Total revenues


24,613



14,112



84,540



55,593



22,574Expenses and impairments:Salaries, wages, and benefits


16,293



10,732



57,852



31,497



18,357General and administrative


4,893



4,801



26,761



14,586



10,864Occupancy


626



404



2,307



1,449



1,574Total expenses and impairments


21,812



15,937



86,920



47,532



30,795Other income (expense):Interest income


2,603



1,629



11,848



4,261



1,920Interest expense


(1,981
)


(1,308
)


(8,806
)


(3,438
)


(1,289
)Total other income (expense)


622



321



3,042



823



631Net income (loss) from Originations Segment

$
3,423


$
(1,504
)

$
662


$
8,884


$
(7,590
)  
    60




---



##### Table of Contents



Three Months EndedMarch 31,


Year Ended December 31,2011


2010


2010


2009


2008Origination Volume (in millions):Retail

$
425


$
306


$
1,608


$
1,093


$
538Wholesale


229



207



1,184



386



4Total Originations

$
654


$
513


$
2,792


$
1,479


$
542  
  Revenues
 
  For the Three
    Months Ended March 31, 2011 and 2010
 
 
   
 
  
    Other fee income was $4.0 million for the three months
    ended March 31, 2011 compared to $1.7 million for the
    three months ended March 31, 2010, an increase of
    $2.3 million, or 135.3%. The increase is primarily due to
    higher points and fees collected on originated loans as a result
    of higher originations volume. 
 
  
    Gain on mortgage loans held for sale was $20.6 million for
    the three months ended March 31, 2011 compared to
    $12.4 million for the three months ended March 31,
    2010, an increase of $8.2 million, or 66.1%, primarily due
    to the net effect of the following: 
 
  (a)
    Increase of $5.9 million from larger volume of
    originations, which increased from $512.6 million in the
    2010 period to $654.1 million in the comparable 2011 period. 
 
  (b)
    Increase of $3.5 million from capitalized mortgage
    servicing rights due to the larger volume of originations and
    subsequent retention of servicing rights. 
 
  (c)
    Decrease of $1.3 million from change in unrealized
    gains/losses on derivative financial instruments. These include
    interest rate lock commitments and forward sales of
    mortgage-backed securities. 
  For the Years
    Ended December 31, 2010 and 2009
    
    Other fee income increased $5.8 million primarily due to
    our election to measure newly originated conventional
    residential mortgage loans held for sale at fair value,
    effective October 1, 2009. Subsequent to this election, any
    collected points and fees related to originated mortgage loans
    held for sale are included in other fee income. Prior to this
    election, points and fees were recorded as deferred origination
    income and recognized over the life of the mortgage loan as an
    adjustment to our interest income yield or, when the related
    loan was sold to a third-party purchaser, included as a
    component of gain on mortgage loans held for sale.
    Gain on mortgage loans held for sale increased
    $23.1 million primarily from:  (a)
    Increase of $22.4 million from improved margins and larger
    volume of originations, which increased from $1.5 billion
    for the year ended December 31, 2009 to $2.8 billion
    in originations for the year December 31, 2010.(b)
    Increase of $17.9 million from capitalized mortgage
    servicing rights due to the larger volume of originations and
    subsequent retention of servicing rights. 61




---



##### Table of Contents



(c)
    Decrease of $0.7 million from change in unrealized
    gains/(losses) on derivative financial instruments. These
    include interest rate lock commitments and forward sales of
    mortgage-backed securities.  (d)
    Decrease of $20.2 million from recognition of points and
    fees earned on mortgage loans held for sale for the year ended
    December 31, 2009. Effective October 1, 2009, all
    points and fees are recognized at origination upon the election
    to apply fair value accounting to newly-originated loans and are
    recognized as a component of other fee income.  For the Years
    Ended December 31, 2009 and 2008
    
    Gain on mortgage loans held for sale increased
    $32.4 million primarily from:  (a)
    Increase of $24.8 million from larger volume of
    originations, which increased from $0.5 billion in 2008 to
    $1.5 billion in 2009.(b)
    Increase of $3.8 million from capitalized mortgage
    servicing rights due to larger volume of origination and
    subsequent retention of servicing rights.  (c)
    Increase of $3.8 million from change in unrealized
    gains/(losses) on derivative financial instruments. These
    include interest rate lock commitments and forward sales of
    mortgage-backed securities.  Expenses and
    Impairments
 
  For the Three
    Months Ended March 31, 2011 and 2010
 
 
   
 
  
    Increase of $5.6 million in salaries, wages and benefits
    expense from increase in headcount of 450 in 2010 to 742 in 2011
    and increases in performance-based compensation. Additionally,
    we recognized $0.5 million in share-based compensation
    expense from revised compensation arrangements with certain of
    our executives. 
 
  
    Increase of $0.3 million in general and administrative and
    occupancy expense primarily due to increase in overhead expenses
    from the larger volume of originations in 2011. 
  For the Years
    Ended December 31, 2010 and 2009
   
  
    Increase of $26.4 million in salaries, wages and benefits
    expense from increase in headcount of 452 in 2009 to 688 in 2010
    and increases in performance based compensation. Additionally,
    we recognized $3.6 million in share-based compensation
    expense from revised compensation arrangements with certain of
    our executives. 
  
    Increase of $13.1 million in general and administrative and
    occupancy expense primarily due to increase in overhead expenses
    from the larger volume of originations in 2010 and expenses
    associated with the settlement of certain claims. 62




---



##### Table of Contents



For the Years
    Ended December 31, 2009 and 2008
    
    Increase of $13.1 million in salaries, wages and benefits
    expense from increase in headcount of 311 in 2008 to 452 in 2009
    and increases in performance based compensation.
    Increase of $3.7 million in general and administrative
    expense primarily due to increase in overhead expenses from
    larger volume of origination in 2009.  Other Income
    (Expense)
 
  For the Three
    Months Ended March 31, 2011 and 2010
 
 
   
 
  
    Interest income increased $1.0 million, or 62.5%,
    representing interest earned from originated loans prior to sale
    or securitization. The increase is primarily due to the increase
    in the volume of originations. Loans are typically sold within
    30 days of origination. 
 
  
    Interest expense increased $0.7 million, or 53.8%,
    primarily due to an increase in origination volume in 2011 and
    associated financing required to originate these loans. 
  For the Years
    Ended December 31, 2010 and 2009
    
    Interest income increased $7.5 million from interest earned
    from originated loans prior to sale or securitization. The
    increase is primarily due to the increase in the volume of
    originations. Loans are typically sold within 30 days of
    origination.
    Interest expense increased $5.4 million primarily due to an
    increase in origination volume in 2010 and associated financing
    required to originate these loans combined with a slight
    increase in outstanding average days in warehouse on newly
    originated loans.  For the Years
    Ended December 31, 2009 and 2008
    
    Interest income increased $2.4 million primarily due to
    interest earned from originated loans prior to sale or
    securitization. Loans are typically sold within 30 days of
    origination.
    Interest expense increased $2.1 million primarily due to
    interest expense from warehouse facilities that finance the
    origination of loans.  Legacy Portfolio
    and Other
   63




---



##### Table of Contents



held-for-investment
  ASC 825-10.
    
 Three Months Ended March 31,


Year Ended December 31,2011


2010


2010


2009


2008Revenues:Servicing fee income

$
567


$
458


$
820


$



$
Other fee income


781



1,210



2,643







Total fee income


1,348



1,668



3,463







Gain (loss) on mortgage loans held for sale














(75,786
)


(108,648
)Total revenues


1,348



1,668



3,463



(75,786
)


(108,648
)Expenses and impairments:Salaries, wages, and benefits


1,283



2,101



13,148



3,537



2,854General and administrative


1,050



343



7,488



5,239



1,452Provision for loan losses


1,128







3,298







Loss on foreclosed real estate


2,247



(21
)


205



7,512



2,567Occupancy


257



464



2,788



1,912



1,043Loss on
    available-for-sale
    securities-other-than- temporary














6,809



55,212Total expenses and impairments


5,965



2,887



26,927



25,009



63,128Other income (expense):Interest income


12,924



27,350



77,521



44,114



79,268Interest expense


(9,930
)


(17,181
)


(55,566
)


(40,568
)


(48,541
)Gain (loss) on interest rate swaps and caps














(14
)


(23,689
)Fair value changes in ABS securitizations


(2,652
)


(9,777
)


(23,297
)






Total other income (expense)


342



392



(1,342
)


3,532



7,038Net loss from Legacy Portfolio & Other

$
(4,275
)

$
(827
)

$
(24,806
)

$
(97,263
)

$
(164,738
)  
 64




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##### Table of Contents



Three Months Ended March 31,


Year Ended December 31,2011(1)


2010(1)


2010(1)


2009


2008Legacy Portfolio and Other Performance:PerformingUPB

$
1,050,676


$
1,446,085


$
1,037,201


$
345,516


$
627,368Nonperforming (90+ Delinquency)UPB


318,881



628,576



337,779



141,602



100,452Real Estate OwnedEstimated Fair Value


24,417



28,917



27,337



10,262



21,822Total Legacy Portfolio and OtherUPB

$
1,393,974


$
2,103,578


$
1,402,317


$
497,380


$
749,642  
    (1)
    
    Amounts include one previously off-balance sheet securitization
    which was consolidated upon adoption of ASC 810 related to
    consolidation of certain VIEs. 
  For the Three
    Months Ended March 31, 2011 and 2010
 
 
   
 
   
 
   
 
   
  For the Years
    Ended December 31, 2010 and 2009
   
   
 65




---



##### Table of Contents



other-than-temporary
 
    For the Years
    Ended December 31, 2009 and 2008
  mark-to-market
  other-than-temporary
  other-than-temporary
     66




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##### Table of Contents



Analysis of Items
    on Consolidated Balance Sheet
 
   
  
 March 31,


December 31,


December 31,2011


2010


2009(unaudited)AssetsCash and cash equivalents

$
48,420


$
21,223


$
41,645Restricted cash


73,100



91,125



52,795Accounts receivable


454,235



439,071



509,974Mortgage loans held for sale


268,950



371,160



203,131Mortgage loans held for investment, subject to nonrecourse
    debtLegacy Assets


262,268



266,840



301,910Mortgage loans held for investment, subject to ABS nonrecourse
    debt (at fair value)


530,681



538,440



Investment in debt
    securitiesavailable-for-sale










2,486Receivables from affiliates


7,542



8,993



12,574Mortgage servicing rights


151,159



145,062



114,605Property and equipment, net


11,255



8,394



6,575Real estate owned, net (includes $17,509 and $0, respectively,
    of real estate owned, subject to ABS nonrecourse debt)


24,417



27,337



10,262Other assets


36,228



29,536



24,228Total assets

$
1,868,255


$
1,947,181


$
1,280,185Liabilities and members equityNotes payable

$
608,451


$
709,758


$
771,857Unsecured senior notes


244,410



244,061



Payables and accrued liabilities


103,899



75,054



66,830Derivative financial instruments


7,724



7,801



Derivative financial instruments, subject to ABS nonrecourse debt


15,615



18,781



Nonrecourse debtLegacy Assets


133,592



138,662



177,675ABS nonrecourse debt (at fair value)


489,321



496,692



Total liabilities


1,603,012



1,690,809



1,016,362Total members equity


265,243



256,372



263,823Total liabilities and members equity

$
1,868,255


$
1,947,181


$
1,280,185  
 67




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##### Table of Contents



Comparison of
    Consolidated Balance Sheet ItemsMarch 31, 2011 to
    December 31, 2010
 
 
  Assets
 
 
   
 
   
 
  Financial Instruments
 
 
   
 
  ASC 825-10 Financial Instruments-Overall
 
 
   
 
   
 
   
 68




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##### Table of Contents



Liabilities and
    Members Equity
 
 
   
 
   
 
   
  
 Three monthsYear ended


endedDecember 31,


March 31,2010


2011Repurchase reserves, beginning of period

$
3,648


$
7,321Additions


4,649



929Charge-offs


(976
)


(271
)Repurchase reserves, end of period

$
7,321


$
7,979  
 69




---



##### Table of Contents



Three MonthsEndedYears Ended December 31,


March 31,2009


2010


2011Count


$


Count


$


Count


$$ amounts in millionsBeginning balance


3


$
0.3



8


$
1.3



21


$
4.3Repurchases & indemnifications


(17
)


(2.7
)


(8
)


(1.9
)


(3
)


(0.6
)Claims initiated


28



4.6



53



10.8



37



7.9Rescinded


(6
)


(0.9
)


(32
)


(5.9
)


(17
)


(4.2
)Ending Balance


8


$
1.3



21


$
4.3



38


$
7.4  
  
   
  
 Year Ended December 31,

Three Months Ended2008

2009

2010

March 31, 2011

TotalCount

$

Count

$

Count

$

Count

$

Count

$$ amounts in billionsLoan sales


3,412


$
0.5



5,344


$
1.0



13,090


$
2.6



3,832


$
0.8



25,678


$
4.9  
 
   
 
   
  Comparison of
    Consolidated Balance Sheet ItemsDecember 31, 2010 to
    December 31, 2009
  Assets
     70




---



##### Table of Contents



Financial Instruments
    ASC 825-10 Financial Instruments-Overall
  securitiesavailable-for-sale
     71




---



##### Table of Contents



Liabilities and
    Members Equity
   
   
 
   
    Recent Accounting
    Developments
   72




---



##### Table of Contents



No. 2010-06, Fair Value Measurements and Disclosures (Topic 820):
    Improving Disclosures about Fair Value Measurements No. 2010-06). No. 2010-06 No. 2010-06 No. 2010-06
  No. 2010-18, Effect of a Loan Modification When the Loan Is Part of a Pool
    That Is Accounted for as a Single Asset No. 2010-18). No. 2010-18 310-30, ReceivablesLoans and Debt Securities Acquired with
    Deteriorated Credit Quality 310-30), 310-30 310-40, ReceivablesTroubled Debt Restructurings by
    Creditors 310-30 No. 2010-18
 
  No. 2010-20, Disclosures about the Credit Quality of Financing Receivables
    and the Allowance for Credit Losses No. 2010-20). No. 2010-20 No. 2010-20
 
  No. 2011-02, A Creditors Determination of Whether a Restructuring is
    a Troubled Debt Restructuring No. 2011-02). No. 2011-02
 73




---



##### Table of Contents



No. 2011-02
 
 
  No. 2011-03, Reconsideration of Effective Control for Repurchase
    Agreements No. 2011-03). No. 2011-03 2011-03
 
 
  2011-04, Amendments to Achieve Common Fair Value Measurement and
    Disclosure Requirements in U.S. GAAP and IFRSs No. 2011-04). No. 2011-04 No. 2011-04
 
  Liquidity and
    Capital Resources
 
   
 
   
   74




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##### Table of Contents



and/or and/or and/or
  Operating
    Activities
 
   
 
  
    $80.3 million improvement in working capital, which
    provided $12.5 million cash for the three months ended
    March 31, 2011 and used $67.8 million during the same
    period in the prior year. 
 
  
    $273.4 million improvement in proceeds received from sale
    of originated loans, which provided $765.7 million and
    $492.3 million for the three month period ending
    March 31, 2011 and 2010, partially offset by
    $141.5 million increase in cash used to originate loans.
    Mortgage loans 
 75




---



##### Table of Contents



originated and purchased, net of fees, used $654.1 million
    and $512.6 million in the three month period ending
    March 31, 2011 and 2010, respectively. 
    
    Increase of $1,613.9 million attributable to increased
    proceeds received from sale of loans, offset by decrease in cash
    attributable to $1,311.1 million increase in origination
    volume.
    Decrease in principal payments/prepayments received and other
    changes in mortgages loans held for sale of $437.7 million.
    Increase of $130.4 million primarily due to decreased
    delinquency advances to investors to cover scheduled payments of
    principal and interest that are required to be remitted to
    securitization trusts.
    Increase of $71.0 million attributable to decrease in net
    loss period over period, primarily a result of increased
    revenues from our higher servicing portfolio and increased
    volume in loan originations.    Investing
    Activities
 
   
    Financing
    Activities
 
   
 76




---



##### Table of Contents



Contractual
    Obligations
    2012


2014


After2011


to 2013


to 2015


2015


TotalSenior Unsecured Notes

$



$



$
250,000


$



$
250,000Interest expense from Senior Unsecured Notes


27,188



54,375



33,985







115,548MBS Advance Financing Facility


114,562















114,562ABS Advance Financing Facility


236,808















236,808MSR Notes


5,552



10,181











15,733$300 Million Warehouse
    Facility(1)


209,477















209,477$100 Million Warehouse Facility


39,014















39,014$75 Million Warehouse Facility


43,059















43,059GSE ASAP+ Short-Term Financing Facility


51,105















51,105Operating leases


7,015



13,299



7,972



1,243



29,529$
733,780


$
77,855


$
291,957


$
1,243


$
1,104,835     Notes
  (1)
    
    Amended in February 2011 to expire in February 2012.   
   
  Description of
    Certain Indebtedness
  10.875% Senior
    Notes
   77




---



##### Table of Contents



12-month
  Year

Percentage2013


105.438
%2014 and thereafter


100.00
%       pari passu
    
    incur additional indebtedness;
    issue preferred and disqualified stock;
    purchase or redeem capital stock;
    make certain investments;
    pay dividends or make other payments or loans or transfer
    property;
    sell assets;
    enter into certain types of transactions with affiliates
    involving consideration in excess of $5.0 million;
    sell all or substantially all of Nationstar Mortgage LLC or a
    guarantors assets or merge with or into another company.   78




---



##### Table of Contents



79




---



##### Table of Contents



Twelve Months EndedMarch 31, 2010Net income (loss)

$
(3,277
)Adjust for:Impact from consolidation of securitization
    trusts(1)


(6,499
)Interest expense from Corporate
    Indebtedness(2)


30,456Depreciation and amortization


2,470Change in fair value of mortgage servicing
    rights(3)


4,977Exit costs


2,159Share-based compensation


17,909Fair value changes on interest rate swap


7,022Ineffective portion of cash flow hedge


(1,832
)(Gain) loss from asset sales and other than temporary impairment
    of assets


8,609Amortization/write-off of deferred financing cost for debt
    obligations in existence prior to issuance of unsecured senior
    notes


12,071Servicing resulting from transfers of financial assets


(32,409
)Other


46Consolidated EBITDA

$
41,702  
    (1)
    
    Represents impact to net income from the consolidation of
    certain securitization trusts. Net income, as defined in the
    Indenture, is based on generally accepted accounting principles
    in effect as of December 31, 2009, and does not include the
    impact of the consolidation of identified VIEs where we have
    both the power to direct the activities that most significantly
    impact the VIEs economic performance and the obligation to
    absorb losses or the right to receive benefits that could
    potentially be significant to the VIE.(2)
    
    Includes interest expense from the unsecured senior notes and an
    unsecured line of credit that was paid down with the proceeds
    from the unsecured senior notes.(3)
    
    Represents change in fair value of mortgage servicing rights
    after deconsolidation of the securitization trusts as discussed
    in note (1) above.  Servicing
 
   
  MBS Advance
    Financing Facility
     80




---



##### Table of Contents



ABS Advance
    Financing Facility
   
   
 
  2010-ABS
 
  MSR
    Notes
   
   
  Originations
 
   
 81




---



##### Table of Contents



$300 Million
    Warehouse Facility
   
   
 
   
    $100 Million
    Warehouse Facility
   
   
  $75 Million
    Warehouse Facility
   82




---



##### Table of Contents



$50 Million
    Warehouse Facility
    GSE ASAP+
    Short-Term Financing Facility
 
   
  Legacy Assets
    and Other
  Legacy Asset
    Term-Funded Notes
 
   
  ABS Nonrecourse
    Debt
 
   
 83




---



##### Table of Contents



ASC 825-10.
 
  Variable Interest
    Entities
      and/or and/or and/or
   84




---



##### Table of Contents



TransfersAccounted forasSecuritization


SecuredTrusts


Borrowings


TotalAssetsRestricted cash

$
694


$
20,015


$
20,709Accounts receivable


3,138



265,498



268,636Mortgage loans held for investment, subject to nonrecourse debt






256,108



256,108Mortgage loans held for investment, subject to ABS nonrecourse
    debt


530,681







530,681Real estate owned


16,142



7,808



23,950Total Assets

$
550,655


$
549,429


$
1,100,084LiabilitiesNotes payable

$



$
219,146


$
219,146Payables and accrued liabilities


123



1,187



1,310Outstanding servicer
    advances(1)


32,810







32,810Derivative financial instruments






6,760



6,760Derivative financial instruments, subject to ABS nonrecourse debt


15,615







15,615Nonrecourse debtLegacy Assets






133,592



133,592ABS nonrecourse debt


490,171







490,171Total Liabilities

$
538,719


$
360,685


$
899,404  
    (1)
    
    Outstanding servicer advances consists of principal and interest
    advances paid by Nationstar to cover scheduled payments and
    interest that have not been timely paid by borrowers. These
    outstanding servicer advances are eliminated upon the
    consolidation of the securitization trusts.  Off Balance Sheet
    Arrangements
 
   
  
 March 31,


December 31,


December 31,2011(1)


2010(1)


2009(2)Total collateral balance

$
3,950,854


$
4,038,978


$
3,240,879Total certificate balance


3,944,442



4,026,844



3,262,995Total beneficial interests held at fair value










2,486Total mortgage servicing rights at fair value


25,847



26,419



20,505  
   
  (1)
    
    Unconsolidated securitization trusts as of March 31, 2011
    and December 31, 2010 consist of VIEs where we lack
    (i) the power to direct the activities that most
    significantly impact the VIEs economic performance or
    (ii) the obligation to absorb losses or the right to
    receive benefits that could potentially be significant to the
    VIE. 
  (2)
    
    Unconsolidated securitization trusts as of December 31,
    2009 consists of those qualifying for sale treatment under
    ASC 860. 85




---



##### Table of Contents



Derivatives
     
   
     86




---



##### Table of Contents



QUANTITATIVE AND
    QUALITATIVE DISCLOSURES ABOUT MARKET RISK    Interest Rate
    Risk
    Servicing
    Segment
  
    an increase in interest rates would increase our costs of
    servicing our outstanding debt, including our ability to finance
    servicing advances;
    a decrease (increase) in interest rates would generally increase
    (decrease) prepayment rates and may require us to report a
    decrease (increase) in the value of our mortgage servicing
    rights;
    a change in prevailing interest rates could impact our earnings
    from our custodial deposit accounts; and
    an increase in interest rates could generate an increase in
    delinquency, default and foreclosure rates resulting in an
    increase in both operating expenses and interest expense and
    could cause a reduction in the value of our assets.  Originations
    Segment
  
    a substantial and sustained increase in prevailing interest
    rates could adversely affect our loan origination volume because
    refinancing an existing loan would be less attractive and
    qualifying for a loan may be more difficult; and
    an increase in interest rates would increase our costs of
    servicing our outstanding debt, including our ability to finance
    loan originations;    Consumer Credit
    Risk
     87




---



##### Table of Contents



Counterparty
    Credit Risk
    Sensitivity
    Analysis
         
   
 88




---



##### Table of Contents



Change in Fair ValueDown


Up25 bps


25 bps(in thousands)Increase (decrease) in assetsMortgage loans held for sale


$2,506



$(2,736
)Mortgage loans held for investment, subject to ABS nonrecourse
    debt


(1,281
)


1,350Mortgage servicing rights


(2,605
)


2,775Other assets (derivatives)IRLCs


2,209



(3,089
)Total change in assets


829



(1,700
)Increase (decrease) in liabilitiesDerivative financial instrumentsInterest rate swaps and caps


1,342



(1,162
)Forward MBS trades


5,248



(5,737
)Derivative financial instruments, subject to ABS nonrecourse debt


881



(883
)ABS nonrecourse debt


(2,067
)


2,138Total change in liabilities


5,404



(5,644
)Total, net change


$(4,575
)


$3,944  
 89




---



##### Table of Contents



GLOSSARY OF
    INDUSTRY TERMS  Adjustable Rate Mortgage.
  Agency and Government Conforming Loan. loan-to-value
  Compensating Interest.
  Consumer Direct Retail Origination.
  Conventional Mortgage Loans.
  Corporate Advance.
  Credit-Sensitive Loan. loan-to-value
  Delinquent Loan.
  Department of Veterans Affairs
    (VA).  The
  Distributed Retail Originations.
  Fannie Mae.  The
  Federal Housing Administration
    (FHA).  The
  Float Income.  Interest
  Freddie Mac.  The
  Ginnie Mae.  The
 
  GSE.
 
 90




---



##### Table of Contents



High-Touch Servicing.
  Home Affordable Modification Program
    (HAMP).
  Independent Loan Servicer.
  Loan Modification.
  Loan-to-Value
    Ratio (LTV).  The
  Loss Mitigation.  The deed-in-lieu
  Making Home Affordable Plan
    (MHA). loan-to-value
  Mortgage Servicing Right.  The
  Non-Conforming Mortgage Loan.
  Non-Recoverable Advance.
  Origination.  The
  P&I Advance.
  Prepayment Speed.  The
  Primary Servicer.  The
  Conventional Mortgage Loan.
 91




---



##### Table of Contents



Real Estate Owned. deed-in-lieu
  Residential Mortgage-Backed Security.
  Servicing.  The
  Servicing Advance.
  Servicing Advance Facility.
  Special Servicers.
  Subservicing.
  T&I Advance.
  Unpaid Principal Balance.  The
  Warehouse Facility.
  Wholesale Origination.
 92




---



##### Table of Contents



INDUSTRY    Servicing
    Industry Overview
 
   
      Mortgage
    Servicing Functions
       93




---



##### Table of Contents



Loan Servicing
    Landscape
 
   
  
  Servicer
    Compensation
   94




---



##### Table of Contents



Advances
      P&I Advances:
  T&I Advances:
  Corporate Advances:
          Industry
    Dynamics
    Elevated
    delinquencies, defaults, foreclosures and real estate
    owned:
   95




---



##### Table of Contents



Regulatory and
    legislative factors:
  and/or
  Reform of
    government sponsored enterprises:
   96




---



##### Table of Contents



Opportunities
    under HAMP
  Pay-for-Success
  Adjacent
    Businesses
    Originations
    Industry Overview
   97




---



##### Table of Contents



Loan
    Origination Process
    and/or
      Types of
    Mortgage Loans
   98




---



##### Table of Contents



Prime Conforming Mortgage Loans:
  Prime Non-Conforming Mortgage Loans: loan-to-value debt-to-income
  Government Mortgage Loans:
  Non-prime Mortgage Loans:
  Prime Second-Lien Mortgage Loans:
  loan-to-value
 99




---



##### Table of Contents



BUSINESS  Overview
 
  and/or
 
        Loan
    Servicing
 
  Servicing:
 
 
   
 100




---



##### Table of Contents



Adjacent Businesses: and/or
  
    REO management involves comprehensive management of foreclosed
    properties from property inspection and listing to property
    preservation and sale. Our proven ability to shorten the REO
    disposition timeline lowers costs for our REO clients and leads
    to increased REO assets being awarded to us over time.
    Recovery services involve collecting charged-off mortgage
    deficiencies and other losses incurred by the investor. Our
    ability to successfully increase borrower contact rates and
    obtain payment in full, negotiate discounted payoffs or arrange
    repayment plans enables us to collect more money in less time
    for our clients.   
    National Real Estate Information Services (NREIS),
    an ancillary real estate services and vendor management company
    in which we purchased a non-controlling interest on
    March 31, 2011, offers comprehensive settlement and
    property valuation services for both origination and default
    management channels. Direct or indirect product offerings
    include title insurance agency, tax searches, flood
    certifications, default valuations, full appraisals and broker
    price opinions.  Loan
    Originations
   
  direct-to-consumer
 
   101




---



##### Table of Contents



Market
    Opportunity
  Loan
    Servicing
 
   
      
    Elevated delinquencies and foreclosures favoring servicers with
    strong capabilities in asset performance and loss mitigation;
    Regulatory and legislative actions such as Basel III and
    other factors leading bank-owned servicers to divest mortgage
    servicing rights or outsource significant segments of their
    mortgage operations;
    Numerous industry reforms including the Qualified Residential
    Mortgage (QRM) provision in the Dodd-Frank Wall
    Street Reform and Consumer Protection Act; the negotiations
    involving the 50 State Attorneys General, certain federal
    regulators and servicers; the enforcement consent orders entered
    into by 14 of the largest mortgage servicers and four federal
    agencies; and the initiative of the Federal Housing Finance
    Agency to align the servicing requirements related to delinquent
    mortgages and to modify the servicing compensation related to
    Fannie Mae and Freddie Mac loans; and
    Anticipated reduced participation of the GSEs and other
    regulated entities in the residential mortgage market, which we
    believe is incentivizing these entities to accelerate the
    facilitation of servicing transfers to existing strong servicers.   
   
 102




---



##### Table of Contents



Adjacent
    Businesses
  non-controlling
  Loan
    Originations
      Our Competitive
    Strengths
    Market Leading
    Residential Mortgage Loan Servicer
     103




---



##### Table of Contents



Attractive
    Business Model with Strong Cash Flow
 
   
      Scalable,
    Proven Platform Coupled with Asset Evaluation and Acquisition
    Expertise
 
   
    Culture of
    Credit Loss Ownership and Accountability
   104




---



##### Table of Contents



06-1 07-2
    Strong and
    Seasoned Management Team
    Our Growth
    Strategy
    Capitalize on
    Industry Opportunities
    and/or
 105




---



##### Table of Contents



Maintain and
    Grow Our Fee-Based Servicing Portfolio
      Engage in
    Opportunistic Acquisitions and New Business
    Opportunities
    and/or
  Continue To
    Expand Our Adjacent Businesses and Originations
    Platform
     106




---



##### Table of Contents



Our
    Operations
    Servicing
 
   
  
 Year Ended December 31,


Three Months Ended March 31,2008


2009


2010


2011(unaudited)Servicing Portfolio (dollars in millions):Unpaid principal balance (by investor):Special Servicing

$
1,218


$
1,554


$
4,893


$
8,692Government-sponsored enterprises


10,709



24,235



52,194



51,425ABS


9,415



7,875



7,089



6,927Total unpaid principal balance

$
21,342


$
33,664


$
64,176


$
67,044Summary Financial Data (dollars in thousands):Total revenue

$
74,601


$
100,133


$
182,842


$
61,118Net income


14,718



7,502



14,230



8,221  
 
   
  
 December 31,

March 31,2008

2009

2010

2011(dollars in millions, except for average loan amount)Loan countservicing


159,336



230,615



389,172



404,734Ending unpaid principal balance

$
21,342


$
33,664


$
64,176


$
67,044Average unpaid principal balance

$
12,775


$
25,799


$
38,653


$
65,929Average loan amount

$
133,943


$
145,977


$
164,904


$
165,648Average coupon


7.49
%


6.76
%


5.74
%


5.67
%Average FICO


588



644



631



62760+ DQ (% of loans)


13.1
%


19.9
%


17.0
%


16.8
%Total prepayment speed (12 month CPR)


16.2
%


16.3
%


13.3
%


13.0
%  
 107




---



##### Table of Contents



Our Servicing
    Model
                
    our staffing levels and other servicing practices;
    the servicing and ancillary fees that we may charge;
    our modification standards and procedures; and
    the amount of advances reimbursable.   108




---



##### Table of Contents



Our Servicing
    Portfolio
   
   
  
   109




---



##### Table of Contents



Servicing
    Portfolio by Geography
  Key Drivers of
    Revenue
    Aggregate Unpaid Principal Balance:
  Delinquency Rates:
   110




---



##### Table of Contents



Prepayment Speed:
    Servicing
    Organization
    Loan Administration:
  Account Resolution:
  Foreclosure Prevention:
 111




---



##### Table of Contents



Default Management:
  Originations
 
   
  
 Year Ended December 31,


Three Months Ended March 31,2008


2009


2010


2011(unaudited)Origination Volume ($ in millions):Retail

$
538


$
1,093


$
1,608


$
425Wholesale


4



386



1,184



229Total Originations

$
542


$
1,479


$
2,792


$
654Summary Financial Data ($ in thousands):Total revenue

$
22,574


$
55,593


$
84,540


$
24,613Net income (loss)


(7,590
)


8,884



662



3,423  
  Our Originations
    Platform
   112




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##### Table of Contents




    providing us with an organic source of new loans to service as
    existing loans are repaid or otherwise
    liquidatedoriginated loans serviced by us generate higher
    returns than comparable mortgage servicing rights that we would
    acquire from a third party;
    providing an attractive complement to servicing by allowing us
    to modify and refinance mortgage loans, including loans that we
    service;
    creating a diversified source of revenue that we believe will
    remain stable in a variety of interest rate
    environments; and
    building brand recognition.  Originations
    Organization
    Retail
    OriginationsConsumer Direct
      Renewal:
  New Customer Acquisition:
  Purchase:
 113




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##### Table of Contents



e-mail
  Strategic Alliances (Partner Plus):
  Wholesale
    Originations
        one-on-one
  Retail
    OriginationsDistributed Retail
   114




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##### Table of Contents



business-to-business
    Technology
    Servicing
    Originations
    
    MLS (Marketing Lead System), our proprietary
    marketing lead system which routes, tracks and delivers leads to
    our loan officers, who we refer to as our mortgage professionals;
    OPUS, a web-based
    point-of-sale
    system that provides product eligibility and pricing to our
    retail sales force;
    TMO, our loan origination system used for loan processing,
    underwriting and closing;
    XpressQual, a web-based
    point-of-sale
    system that provides product eligibility and pricing to our
    wholesale brokers and allows them to submit loans to us online;
    www.NationstarBroker com, our website for wholesale brokers to
    receive information on our products and services; 115




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##### Table of Contents




    CLASS, our proprietary system used to manage our sales
    relationships and licensing of our wholesale brokers;
    ODE, a rules-based pricing and eligibility engine that is
    integrated with OPUS, XpressQual and TMO;
    High Cost Fee Engine, our proprietary compliance fee engine that
    enforces both federal and local high cost and fee limits
    throughout the loan originations process; and
    CLT (Compliance License Tracker), our proprietary
    system that maintains and tracks all mortgage professionals
    locational licensing to ensure that leads and applications are
    only processed by properly licensed mortgage professionals.  point-of-sale
  up-to-date
    Employees
    
    55% are in Servicing;
    32% are in Originations;
    13% are in support functions, including Human Resources,
    Accounting and other corporate functions.   116




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##### Table of Contents



Regulation
  and/or
      
    the Gramm-Leach-Bliley Act, which requires us to maintain
    privacy with respect to certain consumer data in our possession
    and to periodically communicate with consumers on privacy
    matters;
    the Fair Debt Collection Practices Act, which regulates the
    timing and content of debt collection communications;
    the Truth in Lending Act and Regulation Z thereunder, which
    require certain disclosures to the mortgagors regarding the
    terms of the mortgage loans;
    the Fair Credit Reporting Act, which regulates the use and
    reporting of information related to the credit history of
    consumers;
    the Equal Credit Opportunity Act and Regulation B
    thereunder, which prohibit discrimination on the basis of age,
    race and certain other characteristics, in the extension of
    credit;
    the Homeowners Protection Act, which requires the cancellation
    of mortgage insurance once certain equity levels are reached;
    the Home Mortgage Disclosure Act and Regulation C
    thereunder, which require financial institutions to report
    certain public loan data;
    the Fair Housing Act, which prohibits discrimination in housing
    on the basis of race, sex, national origin, and certain other
    characteristics; and
    Regulation AB under the Securities Act, which requires
    certain registration, disclosure and reporting for
    mortgage-backed securities. 117




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##### Table of Contents



118




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##### Table of Contents



Competition
      Seasonality
    Intellectual
    Property
    Properties
           119




---



##### Table of Contents



Legal
    Proceedings
 
   
 120




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##### Table of Contents



MANAGEMENT  Directors and
    Executive Officers
    Name

Age

PositionPeter Smith


43


DirectorAnthony H. Barone


53


Director, President and Chief Executive OfficerJay Bray


44


Executive Vice President and Chief Financial OfficerRobert Appel


49


Executive Vice President of ServicingAmar Patel


39


Executive Vice President of Portfolio InvestmentsDouglas Krueger


42


Executive Vice President of Capital MarketsAnne E. Sutherland


50


Executive Vice President and General CounselSteven L. Hess


54


Executive Vice President of MarketingMark OBrien


59


Executive Vice President of Organizational Development   Peter Smith
  Anthony H. Barone
  Jay Bray
  Robert Appel
 121




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##### Table of Contents



cum
    laude
  Amar Patel
  Douglas Krueger
  Anne E. Sutherland
  Steven L. Hess
  Mark OBrien
 122




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##### Table of Contents



Board of
    Directors
      Committees of the
    Board of Directors
    Audit
    Committee
    
    reviews the audit plans and findings of our independent
    registered public accounting firm and our internal audit and
    risk review staff, as well as the results of regulatory
    examinations, and tracks managements corrective action
    plans where necessary;
    reviews our financial statements, including any significant
    financial items
    and/or
    changes in accounting policies, with our senior management and
    independent registered public accounting firm;
    reviews our financial risk and control procedures, compliance
    programs and significant tax, legal and regulatory
    matters; and
    has the sole discretion to appoint annually our independent
    registered public accounting firm, evaluate its independence and
    performance and set clear hiring policies for employees or
    former employees of the independent registered public accounting
    firm.  90-day
 123




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##### Table of Contents



Rule 10A-3
  Nominating,
    Corporate Governance and Conflicts Committee
    
    reviews the performance of our board of directors and makes
    recommendations to the board regarding the selection of
    candidates, qualification and competency requirements for
    service on the board and the suitability of proposed nominees as
    directors;
    advises the board with respect to the corporate governance
    principles applicable to us;
    oversees the evaluation of the board and management;
    reviews and approves in advance any related party transaction,
    other than those that are pre-approved pursuant to pre-approval
    guidelines or rules established by the committee; and
    established guidelines or rules to cover specific categories of
    transactions.    Compensation
    Committee
    
    reviews and recommends to the board the salaries, benefits and
    equity incentive grants for all employees, consultants,
    officers, directors and other individuals we compensate;
    reviews and approves corporate goals and objectives relevant to
    Chief Executive Officer compensation, evaluates the Chief
    Executive Officers performance in light of those goals and
    objectives, and determines the Chief Executive Officers
    compensation based on that evaluation; and
    oversees our compensation and employee benefit plans.  Rule 16b-3(b)(3)
 124




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##### Table of Contents



COMPENSATION
    DISCUSSION AND ANALYSIS    Compensation
    Philosophy and Objectives
    
    Deliver a mix of fixed and at-risk compensation, including
    through the grants of restricted units and restricted preferred
    units.
    Through dividend equivalents on grants of restricted units and
    restricted preferred units, tie a portion of the overall
    compensation of executive officers to the dividends we pay to
    our unitholders.
    Encourage the achievement of our short- and long-term goals on
    both the individual and company levels.  Process for
    Setting Executive Officer Compensation
      Participation of Management.
 125




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##### Table of Contents



Compensation Consultant.
  Risk considerations.
  Elements of
    Compensation
    Base
    Salary
      Annual Bonus
    Plans
    The Incentive Plan for Messrs. Barone, Bray, Appel and
    Patel.
 126




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##### Table of Contents



Annual Incentive Program for
    Mr. Krueger.
    Allocable

Target BonusPercentage of the

As Percent OfName

Bonus Pool

SalaryAnthony H. Barone


35.6%



N/AJay Bray


31.7%



N/ARobert L. Appel


17.2%



N/AAmar Patel


15.5%



N/ADouglas Krueger


N/A



90.0%   Long-Term
    Incentive Plans
 
  Equity Incentive Plan.
 
 127




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##### Table of Contents



Equity Plan Adopted in Connection with our Initial Public
    Offering. Form S-8
 
 128




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##### Table of Contents



Description of
    the Plan
  Plan Administration.
  Stock Options and Stock Appreciation Rights.
  
    The Exercise Price for each Share subject to a Stock Option or
    Stock Appreciation Right will be not less than the Fair Market
    Value of a Share on the date of grant.  Restricted Units, Restricted Stock, Deferred Shares and
    Performance Shares.
  
    The Committee will determine the purchase price, the vesting
    schedule and performance objectives, if any, with respect to the
    grant of Restricted Shares, Restricted Units, Deferred Shares
    and Performance Shares.  Other Stock-Based Awards.
  Transfer.
  Adjustments.
  Change in Control. and/or
  Amendment and Termination.
 129




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##### Table of Contents



Summary of
    Federal Income Tax Consequences of Awards
    Nonqualified Stock Options and Stock Appreciation
    Rights.
  Restricted Units, Restricted Stock and Performance
    Awards. i.e.
  Deferred Shares.
  Cash-Based Awards.
 130




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##### Table of Contents



Long-Term
    Incentive Plan
 
   
  Severance
    Benefits
  Employment Agreements.
  Other
    Compensation Components
  All Other Compensation
 131




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##### Table of Contents



Summary
    Compensation Table
    
 Non-StockStock


Incentive Plan


All OtherSalary


Bonus


Awards


Compensation


Compensation


TotalName

Year


($)


($)


($)(1)


($)


($)


($)Anthony H. Barone


2010



424,350







9,584,458



907,862
(2)


16,116
(3)


10,932,7862009



424,350











706,872
(4)


16,116
(3)


1,147,338Jay Bray


2010



320,000







9,918,148



809,434
(2)


11,048
(5)


11,058,6302009



289,800











630,235
(4)


11,069
(6)


931,104Robert L. Appel


2010



275,000







6,467,985



439,288
(2)


5,500
(7)


7,187,7462009



274,999











342,035
(4)


5,500
(7)


622,534Amar Patel


2010



255,000







4,147,863



395,415
(2)


6,231
(7)


4,804,5092009



255,000











307,875
(4)


6,231
(7)


569,106Douglas Krueger


2010



250,000











425,000
(8)


3,125
(7)


678,1252009



215,064



50,000
(9)






350,000
(10)


41,239
(11)


706,303  
    (1)
    
    Represents the aggregate grant date fair value, as computed in
    accordance with FASB ASC Topic 718. Assumptions used in the
    calculations of these amounts for awards granted in 2009 and
    2010 are included in Note 2 to Nationstars audited
    financial statements for the fiscal year ended December 31,
    2010. Information with respect to vesting of these awards is
    disclosed in the Grant of Plan Based Awards table and the
    accompanying notes.(2)
    
    These amounts were paid in the first quarter of fiscal year
    2011, but represent awards with respect to the Companys
    and individual performance in fiscal year 2010.(3)
    
    Represents payment of a life insurance premium equal to $9,216
    and a $6,900 contribution to Mr. Barones 401(k)
    account.(4)
    
    These amounts were paid in the first quarter of fiscal 2010, but
    represent awards with respect to the Companys and
    individual performance in fiscal year 2009.(5)
    
    Represents payment of a life insurance premium equal to $5,998
    and a $5,050 contribution to Mr. Brays 401(k) account.(6)
    
    Represents payment of a life insurance premium equal to $5,998
    and a $5,071 contribution to Mr. Brays 401(k) account.(7)
    
    Represents a contribution to the named executive officers
    401(k) account.(8)
    
    Of this amount, $300,000 was paid in the first quarter of fiscal
    year 2011, although it represents an award with respect to the
    Companys and Mr. Kruegers individual
    performance in fiscal year 2010, as described in Annual
    Incentive Program for Mr. Krueger.The remaining
    $125,000 is pursuant to the Long-Term Incentive Plan, described
    above, and is subject to three-year time-based cliff vesting;
    this amount will become vested on December 31, 2013 as long
    as Mr. Krueger remains employed with the Company.(9)
    
    Represents a sign-on bonus Mr. Krueger received pursuant to
    his employment agreement when he joined the Company. 
  (10)
    
    Of this amount, $225,000 was paid in the first quarter of fiscal
    year 2010, although it represents an award with respect to the
    Companys and Mr. Kruegers individual
    performance in fiscal year 2009, as described in Annual
    Incentive Program for Mr. Krueger.The remaining
    $125,000 is pursuant to the Long-Term Incentive Plan, described
    above, and is subject to three-year time-based cliff vesting;
    this amount will become vested on December 31, 2012 as long
    as Mr. Krueger remains employed with the Company. 
  (11)
    
    Represents payment of a relocation expenses equal to $39,469 and
    a $1,770 contribution to Mr. Kruegers 401(k) account. 132




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##### Table of Contents



Grants of
    Plan-Based Awards
    EstimatedFuturePayoutsUnderNon-EquityIncentive Plan

All Other Stock Awards:

Grant Date Fair Value ofAwards

Number of Units (#)

Equity Awards ($)Name

Grant Date

Target ($)

1A

2A

C&D

1A

2A

C&DAnthony H. Barone


9/17/2010
(1)


907,862



136,993



25,607



2,494,500



6,752,295



22,088



2,810,075Jay Bray


9/17/2010
(2)


809,434



153,212



28,637



2,078,750



7,551,718



24,701



2,341,729Robert L. Appel


9/17/2010
(3)


439,288



102,384



19,137



1,247,250



5,046,440



16,507



1,405,038Amar Patel


9/17/2010
(4)


395,415



64,937



12,137



831,500



3,200,702



10,469



936,692Douglas Krueger






125,000
(5)     (1)
    
    This award is subject to vesting. With respect to the
    Series 1 Class A, the award vested with respect to 481
    Series 1 Class A units on September 17, 2010, and
    will vest with respect to 68,256 Series 1 Class A
    units on each of June 30, 2011 and 2012. With respect to
    the Series 2 Class A, the award vested with respect to
    91 Series 2 Class A units on September 17, 2010,
    and will vest with respect to 12,758 on each of June 30,
    2011 and 2012. With respect to the Series 1 Class C
    and D preferred units, the award vests in equal tranches with
    respect to 831,500 units on each of September 17,
    2010, June 30, 2011 and June 30, 2012.(2)
    
    This award is subject to vesting. With respect to the
    Series 1 Class A, the award vested with respect to
    39,452 Series 1 Class A units on September 17,
    2010, and will vest with respect to 56,880 Series 1
    Class A units on each of June 30, 2011 and 2012. With
    respect to the Series 2 Class A, the award vested with
    respect to 7,373 Series 2 Class A units on
    September 17, 2010, and will vest with respect to 10,631 on
    June 30, 2011 and with respect to 10,633 on June 30,
    2012. With respect to the Series 1 Class C and D
    preferred units, the award vests in equal tranches with respect
    to 692,916 units on September 17, 2010 and
    692,917 units on each of June 30, 2011 and
    June 30, 2012.(3)
    
    This award is subject to vesting. With respect to the
    Series 1 Class A, the award vests in equal tranches
    with respect to 34,128 units on each of September 17,
    2010, June 30, 2011 and June 30, 2012. With respect to
    the Series 2 Class A, the award vests in equal
    tranches with respect to 6,379 units on each of
    September 17, 2010, June 30, 2011 and June 30,
    2012. With respect to the Series 1 Class C and D
    preferred units, the award vests in equal tranches with respect
    to 415,750 units on each of September 17, 2010,
    June 30, 2011 and June 30, 2012.(4)
    
    This award is subject to vesting. With respect to the
    Series 1 Class A, the award vested with respect to
    19,433 Series 1 Class A units on September 17,
    2010, and will vest with respect to 22,752 Series 1
    Class A units on each of June 30, 2011 and 2012. With
    respect to the Series 2 Class A, the award vested with
    respect to 3,631 Series 2 Class A units on
    September 17, 2010, and will vest with respect to 4,252 on
    June 30, 2011 and 4,254 on June 30, 2012. With respect
    to the Series 1 Class C and D preferred units, the
    award vests in equal tranches with respect to 277,166 units
    on September 17, 2010 and 277,167 units on each of
    June 30, 2011 and June 30, 2012.(5)
    
    This bonus under the Long-Term Incentive Plan, described above,
    is subject to three-year time-based cliff vesting, which will
    become vested on December 31, 2013 as long as
    Mr. Krueger remains employed with the Company. 133




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##### Table of Contents



Outstanding
    Equity Awards at Fiscal Year End
    Stock AwardsNumber of Units That Have

Market Value of Units That HaveNot Vested (#)

Not Vested ($)Name

1A

2A

C&D

1A

2A

C&DAnthony H. Barone(1)


136,512



25,516



1,663,000



6,715,749



22,009



1,886,089Jay Bray(2)


113,760



21,264



1,385,834



5,596,458



18,342



1,571,741Robert L. Appel(3)


68,256



12,758



831,500



3,357,875



11,005



943,045Amar Patel(4)


45,504



8,506



554,334



2,238,583



7,337



628,696Douglas Krueger






















     (1)
    
    This award is subject to vesting. With respect to the
    Series 1 Class A, the award will vest with respect to
    68,256 Series 1 Class A units on each of June 30,
    2011 and 2012. With respect to the Series 2 Class A,
    the award will vest with respect to 12,758 on each of
    June 30, 2011 and 2012. With respect to the Series 1
    Class C and D preferred units, the award vests in equal
    tranches with respect to 831,500 units on each of
    June 30, 2011 and 2012.(2)
    
    This award is subject to vesting. With respect to the
    Series 1 Class A, the award will vest with respect to
    56,880 Series 1 Class A units on each of June 30,
    2011 and 2012. With respect to the Series 2 Class A,
    the award will vest with respect to 10,631 on June 30, 2011
    and with respect to 10,633 on June 30, 2012. With respect
    to the Series 1 Class C and D preferred units, the
    award vests in equal tranches with respect to 692,917 units
    on each of June 30, 2011 and 2012.(3)
    
    This award is subject to vesting. With respect to the
    Series 1 Class A, the award vests in equal tranches
    with respect to 34,128 units on each of June 30, 2011
    and 2012. With respect to the Series 2 Class A, the
    award vests in equal tranches with respect to 6,379 units
    on each of June 30, 2011 and 2012. With respect to the
    Series 1 Class C and D preferred units, the award
    vests in equal tranches with respect to 415,750 units on
    each of June 30, 2011 and 2012.(4)
    
    This award is subject to vesting. With respect to the
    Series 1 Class A, the award will vest with respect to
    22,752 Series 1 Class A units on each of June 30,
    2011 and 2012. With respect to the Series 2 Class A,
    the award will vest with respect to 4,252 on June 30, 2011
    and 4,254 on June 30, 2012. With respect to the
    Series 1 Class C and D preferred units, the award
    vests in equal tranches with respect to 277,167 units on
    each of June 30, 2011 and 2012.  Stock
    Vested
    Stock AwardsNumber of SharesAcquired on Vesting (#)

Value Realized on Vesting ($)Name

1A

2A

C&D

1A

2A

C&DAnthony H. Barone


19,845



3,710



831,500



1,021,205



3,386



936,692Jay Bray


44,432



8,304



692,916



2,201,098



7,210



780,576Robert L. Appel


34,128



6,379



415,750



1,682,147



5,502



468,346Amar Patel


19,433



3,631



277,166



957,840



3,132



312,230Douglas Krueger






















  134




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##### Table of Contents



Employment
    Agreements
    Employment
    Agreements of Messrs. Barone and Bray
      Employment
    Agreement of Mr. Appel
     135




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##### Table of Contents



Employment
    Agreement of Mr. Patel
      Employment
    Agreement of Mr. Krueger
      Potential
    Payments Upon Termination or Change in Control
    AfterTermination without

Change inCause Other than

Control,After A Change in

TerminationVoluntary

Control or for Good

withoutDeath(1)

Disability(1)

Termination

Reason(1)

Cause(2)($)

($)

($)

($)

($)Anthony H. Barone


4,311,924



4,311,924



564,630



6,015,435



10,327,358Jay Bray


3,593,269



3,593,269



483,278



5,052,723



8,645,995Robert L. Appel


2,155,962



2,155,962



0



3,454,870



5,610,833Amar Patel


1,437,307



1,437,307



0



1,767,324



3,204,634Douglas Krueger


0



0



0



33,656



33,656  136




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##### Table of Contents



(1)
    
    Pursuant to the equity grant agreements granting each of
    Messrs. Barone, Bray, Appel and Patel Series 1
    Class A units, Series 2 Class A units, and RSUs
    with respect to Series 1 Class C and D preferred units, in
    the event the named executive officers employment
    terminates as a result of the named executive officers
    death, disability or voluntary resignation for good reason or as
    a result of the Company terminating the named executive
    officers employment without cause other than in connection
    with a change in control, an additional tranche of any
    outstanding and unvested equity awards will become vested.(2)
    
    Pursuant to the equity grant agreements granting each of
    Messrs. Barone, Bray, Appel and Patel Series 1
    Class A units, Series 2 Class A units, and RSUs
    with respect to Series 1 Class C and D preferred units, in
    the event the named executive officers employment
    terminates as a result the Company terminating the named
    executive officers employment without cause within
    6 months following a change in control, all of the named
    executive officers outstanding and unvested equity awards
    will become vested.  Director
    Compensation
     137




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##### Table of Contents



CERTAIN
    RELATIONSHIPS AND RELATED PARTY TRANSACTIONS   
   
 
  sub-servicer 2008-1 2008-1 sub-servicing sub-servicing
 
 
  sub-servicer sub-servicing
 
 138




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##### Table of Contents



Stockholders
    Agreement
  General
        Designation
    and Election of Directors
    
    at least a majority of such directors shall be individuals
    designated by FIF HE Holdings LLC, for so long as the Fortress
    Stockholders beneficially own at least 40% of the voting power
    of the Company;
    at least      directors
    (      if the board consists of more
    than      directors) shall be
    individuals designated by FIF HE Holdings LLC, for so long as
    the Fortress Stockholders beneficially own less than 40% but at
    least 20% of the voting power of the Company;
    at least      directors shall be
    individuals designated by FIF HE Holdings LLC, for so long as
    the Fortress Stockholders beneficially own less than 20% but at
    least 10% of the voting power of the Company; and
    at least      director shall be an
    individual designated by FIF HE Holdings LLC, for so long as the
    Fortress Stockholders has beneficially own less than 10% but at
    least 5% of the voting power of the Company.   139




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##### Table of Contents



Registration
    Rights
  Demand Rights.
  Piggyback Rights. Forms S-4 S-8)
  Shelf Registration. Form S-3
  Indemnification; Expenses; Lock-ups.
 140




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##### Table of Contents



PRINCIPAL AND
    SELLING STOCKHOLDERS      Number of Shares





Number of SharesBeneficially Owned


Number


Beneficially OwnedPrior to the Offering


of Shares


After the OfferingNumber


Percentage


Being


Number


PercentageName

of Shares


of Shares


Offered


of Shares


of SharesInitial Stockholder(1)






100
%     (1)
    
    FIF HE Holdings LLC. The address of the Initial Stockholder is
    c/o Fortress
    Investment Group LLC, 1345 Avenue of the Americas, 46th Floor,
    New York, New York 10105. The text below contains information
    with respect to the beneficial ownership the Initial Stockholder.    
    each person or group who is known by us to own beneficially more
    than 5% of the Initial Stockholders issued and outstanding
    Series 1 Class A units;
    each of our directors;
    each of our named executive officers; and
    all of our directors and executive officers as a group.  c/o Nationstar
   141




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##### Table of Contents



Number of Shares BeneficiallyOwnedNumber of


Percentage ofName of Beneficial Owner

Series 1
    Units(2)


Series 1
    Units(2)Executive Officers and DirectorsPeter Smith


0



*Anthony H. Barone


601,784



*Jay Bray


491,722



*Robert Appel


292,420



*Amar Patel


196,107



*Douglas Krueger


0



*All executive officers, managers and directors as a group
    (6 persons)


1,582,033



0.9%5% Interest holdersFortress Fund III
    Funds(1)


6,434,408



49.2%Fortress Fund IV
    Funds(1)


6,434,411



49.2%    *
    
    Less than 1% 
  (1)
    
    Fortress Fund III Funds represent Fortress Investment
    Fund III LP, Fortress Investment Fund III
    (Fund B) LP, Fortress Investment Fund III
    (Fund C) LP, Fortress Investment Fund III (Fund
    D) L.P., Fortress Investment Fund III
    (Fund E) L.P., FIF III B HE BLKR LLC, and FIF III C HE
    BLKR LLC. Fortress Fund IV Funds represent Fortress
    Investment Fund IV (Fund A) L.P., Fortress
    Investment Fund IV (Fund B) L.P., Fortress
    Investment Fund IV (Fund C) L.P., Fortress
    Investment Fund IV (Fund D) L.P., Fortress
    Investment Fund IV (Fund E) L.P., Fortress
    Investment Fund IV (Fund F) L.P. and Fortress
    Investment Fund IV (Fund G) L.P., FIF IV B HE
    BLKR LLC and FIF IV CFG HE BLKR LLC. Fortress Fund III GP
    LLC is the general partner of each of the Fortress Fund III
    Funds (excluding FIF III B HE BLKR LLC and FIF III C HE BLKR
    LLC, which are wholly owned by Fortress Investment Fund III
    (Fund B) L.P. and Fortress Investment Fund III
    (Fund C) L.P., respectively). The sole managing member
    of Fortress Fund III GP LLC is Fortress Investment
    Fund GP (Holdings) LLC. The sole managing member of
    Fortress Investment Fund III GP (Holdings) LLC is Fortress
    Operating Entity I LP (FOE I). FIG Corp. is the
    general partner of FOE I, and FIG Corp. is wholly owned by
    Fortress Investment Group LLC. Fortress Fund IV GP L.P. is
    the general partner of each of the Fortress Fund IV Funds
    (excluding FIF IV HE BLKR LLC and FIF IV CFG HE BLKR LLC, which
    are wholly owned by Fortress Investment Fund IV
    (Fund B) L.P., and Fortress Investment Fund IV
    (Fund C) L.P., Fortress Investment Fund IV
    (Fund F) L.P. and Fortress Investment Fund IV
    (Fund G) L.P., respectively). Fortress Fund IV GP
    Holdings Ltd. is the general partner of Fortress Fund IV GP
    L.P. Fortress Fund IV GP Holdings Ltd. is wholly owned by
    FOE I. FIG Corp. is the general partner of FOE I. FIG Corp. is
    wholly owned by Fortress Investment Group LLC. By virtue of his
    ownership interest in Fortress Investment Group LLC and certain
    of its affiliates, as well as his role in advising certain
    investment funds, Wesley R. Edens may be deemed to be the
    natural person that has sole or shared voting and investment
    control over the shares listed as beneficially owned by
    Holdings. Mr. Edens disclaims beneficial ownership of such
    shares. The address of all persons listed above is
    c/o Fortress
    Investment Group LLC, 1345 Avenue of the Americas, 46th Floor,
    New York, New York 10105. 
  (2)
    
    The Initial Stockholder issues its equity interests in two
    series, each of which relate to certain specified assets of the
    LLC: Series 1 units, which relate to all the issued
    and outstanding membership interests in Nationstar Mortgage LLC;
    and Series 2 units, which relate to equity interests
    in a separate entity, which is not a subsidiary of Nationstar
    Mortgage LLC. Certain executive compensation arrangements
    include equity grants of the Series 2 units of our
    Initial Stockholder. See Compensation Discussion and
    Analysis. 142




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DESCRIPTION OF
    CAPITAL STOCK  The following descriptions are summaries of the material
    terms of our amended and restated certificate of incorporation
    and bylaws as will be in effect upon the consummation of this
    offering. These descriptions contain all information which we
    consider to be material, but may not contain all of the
    information that is important to you. To understand them fully,
    you should read our amended and restated certificate of
    incorporation and bylaws, copies of which are filed with the SEC
    as exhibits to the registration statement of which this
    prospectus is a part.
 
  Please note that, with respect to any of our shares held in
    book-entry form through The Depository Trust Company or any
    other share depository, the depository or its nominee will be
    the sole registered and legal owner of those shares, and
    references in this prospectus to any stockholder or
    holder of those shares means only the depository or
    its nominee. Persons who hold beneficial interests in our shares
    through a depository will not be registered or legal owners of
    those shares and will not be recognized as such for any purpose.
    For example, only the depository or its nominee will be entitled
    to vote the shares held through it, and any dividends or other
    distributions to be paid, and any notices to be given, in
    respect of those shares will be paid or given only to the
    depository or its nominee. Owners of beneficial interests in
    those shares will have to look solely to the depository with
    respect to any benefits of share ownership, and any rights they
    may have with respect to those shares will be governed by the
    rules of the depository, which are subject to change from time
    to time. We have no responsibility for those rules or their
    application to any interests held through the depository.
    
    shares
    of common stock, par value $0.01 per share; and
    preferred
    shares, par value $0.01 per share.      Common
    Stock
     143




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Preferred
    Stock
    
    restricting dividends in respect of our common stock;
    diluting the voting power of our common stock or providing that
    holders of preferred stock have the right to vote on matters as
    a class;
    impairing the liquidation rights of our common stock; or
    delaying or preventing a change of control of us.  Stockholders
    Agreement
    Anti-Takeover
    Effects of Delaware Law, Our Amended and Restated Certificate of
    Incorporation and Bylaws
    Authorized but
    Unissued Shares
    Delaware
    Business Combination Statute
   144




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Other
    Provisions of Our Amended and Restated Certificate of
    Incorporation and Bylaws
      Ability of our
    Stockholders to Act
     145




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Limitations on
    Liability and Indemnification of Directors and
    Officers
    
    any breach of the directors duty of loyalty to us or our
    stockholders;
    intentional misconduct or a knowing violation of law;
    liability under Delaware corporate law for an unlawful payment
    of dividends or an unlawful stock purchase or redemption of
    stock; or
    any transaction from which the director derives an improper
    personal benefit.   146




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Corporate
    Opportunity
    
    the Fortress Stockholders have the right to, and have no duty to
    abstain from, exercising such right to, engage or invest in the
    same or similar business as us, do business with any of our
    clients, customers or vendors or employ or otherwise engage any
    of our officers, directors or employees;
    if the Fortress Stockholders or any of their officers, directors
    or employees acquire knowledge of a potential transaction that
    could be a corporate opportunity, they have no duty to offer
    such corporate opportunity to us, our stockholders or affiliates;
    we have renounced any interest or expectancy in, or in being
    offered an opportunity to participate in, such corporate
    opportunities; and
    in the event that any of our directors and officers who is also
    a director, officer or employee of any of the Fortress
    Stockholders acquires knowledge of a corporate opportunity or is
    offered a corporate opportunity, provided that this knowledge
    was not acquired solely in such persons capacity as our
    director or officer and such person acted in good faith, then
    such person is deemed to have fully satisfied such persons
    fiduciary duty and is not liable to us if any of the Fortress
    Stockholders pursues or acquires such corporate opportunity or
    if such person did not present the corporate opportunity to us.  Transfer
    Agent
    Listing
   147




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SHARES ELIGIBLE
    FOR FUTURE SALE    lock-up lock-up
  Lock-Up
    Agreements
    16-day 18-day lock-up lock-up lock-up
  Rule 144
   148




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Rule 701
    Registration
    Rights
  the  -day lock-up
 149




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CERTAIN U.S.
    FEDERAL INCOME AND ESTATE TAX CONSIDERATIONS TO
    NON-U.S.
    HOLDERS  Non-U.S. Holders. Non-U.S. Holder
  non-U.S. tax
  Dividends
  Non-U.S. Holders
    
    you have furnished to us or such other payor a valid IRS
    Form W-8BEN
    or other documentary evidence establishing your entitlement to
    the lower treaty rate with respect to such payments, and
    in the case of actual or constructive dividends paid to a
    foreign entity after December 31, 2012, you hold the common
    stock through a foreign financial institution or entity that has
    entered into an agreement with the U.S. government to
    collect and provide to the U.S. tax authorities information
    about its accountholders (including certain investors in such
    institution or entity) and, if required, you have provided the
    withholding agent with a certification identifying your direct
    and indirect U.S. owners.   150




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##### Table of Contents



Sale, Exchange or
    Other Taxable Disposition of Common Stock
      Information
    Reporting and Backup Withholding
  Non-U.S. holder Non-U.S. holder
  Non-U.S. holder Non-U.S. holder Non-U.S. holders
  U.S. Federal
    Estate Tax
  Non-U.S. Holder Non-U.S. Holders
 151




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UNDERWRITING    Underwriters

Number of SharesTotal    
   
    lock-up 16-day 18-day
   152




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##### Table of Contents



lock-up lock-up lock-up
        Paid by Us

Paid by Initial StockholderNo Exercise

Full Exercise

No Exercise

Full ExercisePer shareTotal       
    Short sales involve secondary market sales by the underwriters
    of a greater number of shares than they are required to purchase
    in the offering.  
    Covered short sales are sales of shares in an amount
    up to the number of shares represented by the underwriters
    over-allotment option.
    Naked short sales are sales of shares in an amount
    in excess of the number of shares represented by the
    underwriters over-allotment option. 153




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##### Table of Contents




    Covering transactions involve purchases of shares either
    pursuant to the over-allotment option or in the open market
    after the distribution has been completed in order to cover
    short positions.  
    To close a naked short position, the underwriters must purchase
    shares in the open market after the distribution has been
    completed. A naked short position is more likely to be created
    if the underwriters are concerned that there may be downward
    pressure on the price of the shares in the open market after
    pricing that could adversely affect investors who purchase in
    the offering.
    To close a covered short position, the underwriters must
    purchase shares in the open market after the distribution has
    been completed or must exercise the over-allotment option. In
    determining the source of shares to close the covered short
    position, the underwriters will consider, among other things,
    the price of shares available for purchase in the open market as
    compared to the price at which they may purchase shares through
    the over-allotment option.  
    Stabilizing transactions involve bids to purchase shares so long
    as the stabilizing bids do not exceed a specified maximum.    over-the-counter
        Notice to
    Prospective Investors in the European Economic Area
    (1)
    to legal entities which are authorized or regulated to operate
    in the financial markets or, if not so authorized or regulated,
    whose corporate purpose is solely to invest in securities; 154




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(2)
    to any legal entity which has two or more of (i) an average
    of at least 250 employees during the last financial year,
    (ii) a total balance sheet of more than 43,000,000
    and (iii) an annual net turnover of more than
    50,000,000, as shown in its last annual or consolidated
    accounts;(3)
    to fewer than 100 natural or legal persons (other than qualified
    investors as defined in the Prospectus Directive) subject to
    obtaining the prior consent of the representatives for any such
    offer; or(4)
    in any other circumstances which do not require the publication
    by the company of a prospectus pursuant to Article 3
    of the Prospectus Directive.        Notice to
    Prospective Investors in the United Kingdom
    Notice to
    Prospective Investors in France
  Autorité des
    Marchés Financiers Autorité des Marchés Financiers
  
    released, issued, distributed or caused to be released, issued
    or distributed to the public in France; or
    used in connection with any offer for subscription or sale of
    the shares to the public in France. 155




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investisseurs
    qualifiés and/or cercle restreint
    dinvestisseurs articles L.411-2, Code monétaire et financier
  
    to investment services providers authorized to engage in
    portfolio management on behalf of third parties; or
    in a transaction that, in accordance with
    article L.411-2-II-1°-or-2°-or
    3° of the French Code monétaire et financierand
    article 211-2
    of the General Regulations (Règlement
    Général) of the Autorité des Marchés
    Financiers, does not constitute a public offer (appel
    public à lépargne).  articles L.411-1, Code monétaire et financier
  Notice to
    Prospective Investors in Switzerland
  and/or
  Notice to
    Prospective Investors in Hong Kong
    Notice to
    Prospective Investors in Japan
   156




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Notice to
    Prospective Investors in Singapore
      
    a corporation (which is not an accredited investor (as defined
    in Section 4A of the SFA)) the sole business of which is to
    hold investments and the entire share capital of which is owned
    by one or more individuals, each of whom is an accredited
    investor; or
    a trust (where the trustee is not an accredited investor) whose
    sole purpose is to hold investments and each beneficiary of the
    trust is an individual who is an accredited investor,    
    to an institutional investor (for corporations, under
    Section 274 of the SFA) or to a relevant person defined in
    Section 275(2) of the SFA, or to any person pursuant to an
    offer that is made on terms that such shares, debentures and
    units of shares and debentures of that corporation or such
    rights and interest in that trust are acquired at a
    consideration of not less than S$200,000 (or its equivalent in a
    foreign currency) for each transaction, whether such amount is
    to be paid for in cash or by exchange of securities or other
    assets, and further for corporations, in accordance with the
    conditions specified in Section 275 of the SFA;
    where no consideration is or will be given for the
    transfer; or   LEGAL
    MATTERS   EXPERTS   157




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MARKET AND
    INDUSTRY DATA AND FORECASTS   158




---



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WHERE YOU CAN
    FIND MORE INFORMATION  Form S-1 1-800-SEC-0330 http://www.sec.gov.
   159




---



##### 



Nationstar
    Mortgage LLCINDEX TO CONSOLIDATED FINANCIAL STATEMENTS 
    CONTENTS
   
 
 Audited Financial StatementsReport of Independent Auditors


F-2Consolidated Balance
    SheetsDecember 31, 2010 and 2009


F-3Consolidated Statements of OperationsFor
    the years ended December 31, 2010, 2009, and 2008


F-4Consolidated Statements of Members
    EquityFor the years ended December 31, 2010, 2009,
    and 2008


F-5Consolidated Statements of Cash FlowsFor
    the years ended December 31, 2010, 2009, and 2008


F-6Notes to Consolidated Financial Statements


F-8Unaudited Consolidated Financial StatementsConsolidated Balance SheetsMarch 31,
    2011 (unaudited) and December 31, 2010


F-57Unaudited Consolidated Statements of
    OperationsFor the three months ended March 31, 2011
    and 2010


F-58Consolidated Statements of Members
    EquityFor the three months ended March 31, 2011
    (unaudited) and for the year ended December 31, 2010


F-59Unaudited Consolidated Statements of Cash
    FlowsFor the three months ended March 31, 2011 and
    2010


F-60Unaudited Notes to Consolidated Financial
    Statements


F-62  
  F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT AUDITORS             
    F-2




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##### Table of Contents



NATIONSTAR
    MORTGAGE LLC AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
  
 December 31,2010


2009(in thousands)AssetsCash and cash equivalents

$
21,223


$
41,645Restricted cash (includes $1,472 and $0, respectively, of
    restricted cash, subject to ABS nonrecourse debt)


91,125



52,795Accounts receivable, net (includes $2,392 and $0, respectively,
    of accrued interest, subject to ABS nonrecourse debt)


439,071



509,974Mortgage loans held for sale


371,160



203,131Mortgage loans held for investment, subject to nonrecourse
    debtLegacy Assets, net of allowance for loan losses of
    $3,298 and $0, respectively


266,840



301,910Mortgage loans held for investment, subject to ABS nonrecourse
    debt (at fair value)


538,440



Investment in debt
    securitiesavailable-for-sale






2,486Receivables from affiliates


8,993



12,574Mortgage servicing rights


145,062



114,605Property and equipment, net


8,394



6,575Real estate owned, net (includes $17,509 and $0, respectively,
    of real estate owned, subject to ABS nonrecourse debt)


27,337



10,262Other assets


29,536



24,228Total assets

$
1,947,181


$
1,280,185Liabilities and members equityNotes payable

$
709,758


$
771,857Unsecured senior notes


244,061



Payables and accrued liabilities (includes $95 and $0,
    respectively, of accrued interest payable, subject to ABS
    nonrecourse debt)


75,054



66,830Derivative financial instruments


7,801



Derivative financial instruments, subject to ABS nonrecourse debt


18,781



Nonrecourse debtLegacy Assets


138,662



177,675ABS nonrecourse debt (at fair value)


496,692



Total liabilities


1,690,809



1,016,362Commitments and contingencies (Note 14)Total members equity


256,372



263,823Total liabilities and members equity

$
1,947,181


$
1,280,185  
  See accompanying notes.
 F-3




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##### Table of Contents



NATIONSTAR
    MORTGAGE LLC AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF OPERATIONS
  
 Year Ended December 312010


2009


2008(in thousands)Revenues:Servicing fee income

$
167,126


$
90,195


$
68,052Other fee income


16,958



10,023



5,955Total fee income


184,084



100,218



74,007Gain/(loss) on mortgage loans held for sale


77,344



(21,349
)


(86,663
)Total revenues


261,428



78,869



(12,656
)Expenses and impairments:Salaries, wages, and benefits


149,115



90,689



61,783General and administrative


58,913



30,494



22,194Provision for loan losses


3,298







Loss on foreclosed real estate


205



7,512



2,567Occupancy


9,445



6,863



6,021Loss on
    available-for-sale
    securitiesother-than-temporary






6,809



55,212Total expenses and impairments


220,976



142,367



147,777Other income (expense):Interest income


98,895



52,518



92,060Interest expense


(116,163
)


(69,883
)


(65,548
)Loss on interest rate swaps and caps


(9,801
)


(14
)


(23,689
)Fair value changes in ABS securitizations


(23,297
)






Total other income (expense)


(50,366
)


(17,379
)


2,823Net loss

$
(9,914
)

$
(80,877
)

$
(157,610
)Unaudited pro forma information (Note 25):Historical net loss before taxes

$
(9,914
)Pro forma adjustment for taxes


Pro forma net loss

$
(9,914
)  
  See accompanying notes.
 F-4




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NATIONSTAR
    MORTGAGE LLC AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF MEMBERS EQUITY
 Years
    Ended December 31, 2010, 2009 and 2008
 
 
  
 AccumulatedOther


TotalMember


Comprehensive


MembersUnits


Loss


Equity(in thousands)Balance at January 1, 2008

$
265,599


$
(3,903
)

$
261,696Capital contributions


145,600







145,600Share-based compensation


2,333







2,333Comprehensive loss:Net loss


(157,610
)






(157,610
)Reclassification of loss on investment in debt securities due to
    other-than-temporary
    impairments






3,903



3,903Total comprehensive loss










(153,707
)Balance at December 31, 2008


255,922







255,922Capital contributions


87,951







87,951Share-based compensation


827







827Net loss and comprehensive loss


(80,877
)






(80,877
)Balance at December 31, 2009


263,823







263,823Cumulative effect of change in accounting principles as of
    January 1, 2010 related to adoption of new accounting
    guidance on consolidation of variable interest entities


(8,068
)






(8,068
)Share-based compensation


12,856







12,856Tax related share-based settlement of units by members


(3,396
)






(3,396
)Comprehensive loss:Net loss


(9,914
)






(9,914
)Change in value of cash flow hedge






1,071



1,071Total comprehensive loss










(8,843
)Balance at December 31, 2010

$
255,301


$
1,071


$
256,372   See accompanying notes.
 F-5




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NATIONSTAR
    MORTGAGE LLC AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  
 Year Ended December 312010


2009


2008(in thousands)Operating activitiesNet loss

$
(9,914
)

$
(80,877
)


(157,610
)Adjustments to reconcile net loss to net cash provided
    by (used in) operating activities:Share-based compensation


12,856



827



2,333Loss/(gain) on mortgage loans held for sale


(77,344
)


21,349



86,663Provision for loan losses


3,298







Loss on foreclosed real estate


205



7,512



2,567Depreciation and amortization


2,117



1,767



1,309Accretion of discount on securities










(4,422
)Impairment of investments in debt securities






6,809



55,212Fair value changes in ABS securitizations


23,297







Loss on interest rate swaps and caps


8,872



14



23,689Unrealized gains/losses on derivative financial instruments






(2,436
)


2,077Change in fair value of mortgage servicing rights


6,043



27,915



11,701Amortization of debt discount


18,731



21,287



8,879Amortization of premiums/discounts


(4,526
)


(1,394
)


(85
)Mortgage loans originated and purchased, net of fees


(2,791,639
)


(1,480,549
)


(545,860
)Cost of loans sold, net of fees


2,621,275



1,007,369



513,924Principal payments/prepayments received and other changes in
    mortgage loans originated as held for sale


32,415



470,072



201,184Changes in assets and liabilities:Accounts receivable, net


39,388



(154,000
)


(165,566
)Receivables from affiliates


3,958



66,940



2,452Other assets


1,152



(9,115
)


38,363Payables and accrued liabilities


8,163



12,869



(36,598
)Net cash provided by (used in) operating activities


(101,653
)


(83,641
)


40,212  
  Continued on following page
 F-6




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##### Table of Contents



NATIONSTAR
    MORTGAGE LLC AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS (continued)
  
 Year Ended December 312010


2009


2008(in thousands)Investing activitiesPrincipal payments received and other changes on mortgage loans
    held for investment, subject to ABS nonrecourse debt

$
48,838


$



$
Proceeds from sales of real estate owned


74,107



34,181



29,276Purchase of mortgage servicing rights, net of liabilities
    incurred


(17,812
)


(1,169
)


(19,013
)Interest rate swap settlements










(51,570
)Property and equipment additions, net of disposals


(3,936
)


(3,029
)


(1,772
)Principal payments received on debt securities










8,436Net cash provided by (used in) investing activities


101,197



29,983



(34,643
)Financing activitiesTransfers to restricted cash, net


(33,731
)


(31,763
)


(9,871
)Issuance of non-recourse debt, net






191,272



Issuance of unsecured notes, net of issue discount


243,013







Repayment of nonrecourse debtLegacy assets


(45,364
)


(15,809
)


Repayment of ABS nonrecourse debt


(103,466
)






Decrease in notes payable, net


(62,099
)


(60,395
)


(157,266
)Debt financing costs


(14,923
)


(18,059
)


(15,926
)Tax related share-based settlement of units by members


(3,396
)






Capital contributions from members






20,700



145,600Net cash provided by (used in) financing activities


(19,966
)


85,946



(37,463
)Net increase (decrease) in cash and cash equivalents


(20,422
)


32,288



(31,894
)Cash and cash equivalents at beginning of year


41,645



9,357



41,251Cash and cash equivalents at end of year

$
21,223


$
41,645


$
9,357Supplemental disclosures of noncash activitiesTransfer of mortgage loans held for sale to real estate owned

$
827


$
73,264


$
65,304Mortgage servicing rights resulting from sale or securitization
    of mortgage loans


26,253



8,332



4,522Transfer of mortgage loans held for investment to real estate
    owned


53,408



12,990



Transfer of mortgage loans held for investment, subject to ABS
    nonrecourse debt, to real estate owned


111,865







Transfer of mortgage loans held for sale to mortgage loans held
    for investment






319,183



Contribution of intercompany payable from parent






67,251



Financing of acquisition of mortgage servicing rights






22,211



Change in value of cash flow hedgeaccumulated other
    comprehensive income


1,071







See accompanying notes.  
 F-7




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Nationstar
    Mortgage LLC and Subsidiaries
  Notes
    to Consolidated Financial Statements
  1.
    Description of
    the Companies and Basis of Presentation  General
 
   
  Nature of
    Business
 
   
    2.
    Significant
    Accounting Policies  Use of
    Estimates in Preparation of Consolidated Financial
    Statements
 
   
    Reclassification
    Adjustments
    Cash and Cash
    Equivalents
    Restricted
    Cash
 
   
 F-8




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   2.
    Significant
    Accounting Policies (continued)  Mortgage Loans
    Held for Sale
 
   
   
  Financial Instruments
 
  Receivables
  Mortgage Loans
    Held for Investment, Net
    Allowance for
    Loan Losses on Mortgage Loans Held for Investment
    ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit
    Quality
 F-9




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   2.
    Significant
    Accounting Policies (continued)      ASC 450-20,
    Investment in
    Debt Securities
 
  Transfers and
    Servicing available-for-sale InvestmentsDebt and Equity Securities
 
  Receivables
    from Affiliates
   F-10




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   2.
    Significant
    Accounting Policies (continued)   
  Mortgage
    Servicing Rights (MSRs)
 
    Property and
    Equipment, Net
    Real Estate
    Owned, Net
    Variable
    Interest Entities
     
  and/or and/or
 
 F-11




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   2.
    Significant
    Accounting Policies (continued)  and/or
 
   
  and/or
 
   
  Derivative
    Financial Instruments
 
  Derivatives and
    Hedging
 
 
   
 F-12




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   2.
    Significant
    Accounting Policies (continued)      Trust 2009-ADV1
    Interest
    Income
 
   
 F-13




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   2.
    Significant
    Accounting Policies (continued)    Servicing Fee
    Income
        Sale of
    Mortgage Loans
 
   
    Share-Based
    Compensation Expense
  CompensationStock Compensation
 F-14




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   2.
    Significant
    Accounting Policies (continued)    Advertising
    Costs
    Income
    Taxes
    Consolidated
    Statement of Cash FlowsSupplemental
    Disclosure
    New Accounting
    Standards
 
   
  No. 2010-06, Fair Value Measurements and Disclosures (Topic 820):
    Improving Disclosures about Fair Value Measurements No. 2010-06). No. 2010-06 No. 2010-06 No. 2010-06
 F-15




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   2.
    Significant
    Accounting Policies (continued)    No. 2010-18, Effect of a Loan Modification When the Loan Is Part of a Pool
    That Is Accounted for as a Single Asset No. 2010-18). No. 2010-18 310-30, ReceivablesLoans and Debt Securities Acquired with
    Deteriorated Credit Quality 310-30), 310-30 310-40, ReceivablesTroubled Debt Restructurings by
    Creditors 310-30 No. 2010-18
  No. 2010-20, Disclosures about the Credit Quality of Financing Receivables
    and the Allowance for Credit Losses No. 2010-20). No. 2010-20 No. 2011-01, Deferral of the Effective Date of Disclosures about Troubled
    Debt Restructurings in Update
    No. 2010-20 No. 2010-20
  3.
    Variable Interest
    Entities and Securitizations     F-16




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   3.
    Variable Interest
    Entities and Securitizations (continued)    Ending Balance





Beginning BalanceSheet


Net Increase/


SheetDecember 31, 2009


(Decrease)


January 1, 2010AssetsCash and cash equivalents

$
41,645


$



$
41,645Restricted cash


52,795



6,183



58,978Accounts receivable


509,974



(39,612
)


470,362Mortgage loans held for sale


203,131







203,131Mortgage loans held for investment, subject to nonrecourse
    debtLegacy Assets


301,910







301,910Mortgage loans held for investment, subject to ABS nonrecourse
    debt






928,891



928,891Investment in debt
    securitiesavailable-for-sale


2,486



(2,486
)


Receivables from affiliates


12,574







12,574Mortgage servicing rights


114,605



(10,431
)


104,174Property and equipment, net


6,575







6,575Real estate owned, net


10,262



22,970



33,232Other assets


24,228







24,228Total assets

$
1,280,185


$
905,515


$
2,185,700Liabilities and members equityNotes payable

$
771,857


$



$
771,857Payables and accrued liabilities


66,830



123



66,953Derivative financial instruments, subject to ABS nonrecourse debt






28,614



28,614Nonrecourse debtLegacy Assets


177,675







177,675ABS nonrecourse debt






884,846



884,846Total liabilities


1,016,362



913,583



1,929,945Total members equity


263,823



(8,068
)


255,755Total liabilities and members equity

$
1,280,185


$
905,515


$
2,185,700     ASC 825-10,
 F-17




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   3.
    Variable Interest
    Entities and Securitizations (continued)  Financial Instruments-Overall
         F-18




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   3.
    Variable Interest
    Entities and Securitizations (continued)    TransfersAccounted for asSecuritization


SecuredTrusts


Borrowings


TotalAssetsRestricted cash

$
1,472


$
32,075


$
33,547Accounts receivable


2,392



286,808



289,200Mortgage loans held for investment, subject to nonrecourse debt






261,305



261,305Mortgage loans held for investment, subject to ABS nonrecourse
    debt


538,440







538,440Real estate owned


17,509



9,505



27,014Total Assets

$
559,813


$
589,693


$
1,149,506LiabilitiesNotes payable

$



$
236,808


$
236,808Payables and accrued liabilities


95



1,173



1,268Outstanding servicer
    advances(1)


32,284







32,284Derivative financial instruments






7,801



7,801Derivative financial instruments, subject to ABS nonrecourse debt


18,781







18,781Nonrecourse debtLegacy Assets






138,662



138,662ABS nonrecourse debt


497,289







497,289Total Liabilities

$
548,449


$
384,444


$
932,893     (1)
    
    Outstanding servicer advances consists of principal and interest
    advances paid by Nationstar to cover scheduled payments and
    interest that have not been timely paid by borrowers. These
    outstanding servicer advances are eliminated upon the
    consolidation of the securitization trusts. F-19




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   3.
    Variable Interest
    Entities and Securitizations (continued)     TransfersAccounted for asSecuredBorrowingsAssetsRestricted cash

$
11,318Accounts receivable


294,973Mortgage loans held for investment, subject to nonrecourse debt


297,737Real estate owned


10,262Total Assets

$
614,290LiabilitiesNotes payable

$
240,935Payables and accrued liabilities


1,393Nonrecourse debtLegacy Assets


177,675Total Liabilities

$
420,003       December 312010(1)


2009Total collateral balance

$
4,038,978


$
3,240,879Total certificate balance


4,026,844



3,262,995Total beneficial interests held at fair value






2,486Total mortgage servicing rights at fair value


26,419



20,505     (1)
    
    Unconsolidated securitization trusts as of December 31,
    2010 consist of VIEs where Nationstar does not have both
    the power to direct the activities that most significantly
    impact the VIEs economic performance and the obligation to
    absorb losses or the right to receive benefits that could
    potentially be significant to the VIE. F-20




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   3.
    Variable Interest
    Entities and Securitizations (continued)       Year Ended

Year Ended

Year EndedDecember 31, 2010

December 31, 2009

December 31, 2008Principal Amount of



Principal Amount of



Principal Amount ofLoans 60 Days or

Credit

Loans 60 Days or

Credit

Loans 60 Days or

CreditMore Past Due

Losses

More Past Due

Losses

More Past Due

LossesTotal securitization Trusts

$
830,953


$
18,341


$
1,172,822


$
27,734


$
979,556


$
16,708     December 31, 2010


December 31, 2009


December 31, 2008Servicing





Servicing





ServicingFees


Loan


Fees


Loan


Fees


LoanReceived


Repurchases


Received


Repurchases


Received


RepurchasesTotal securitization trusts

$
29,129


$



$
32,593


$



$
25,535


$
   4.
    Accounts
    Receivable      December 312010


2009Delinquency advances

$
148,752


$
206,446Corporate and escrow advances


233,432



275,001Insurance deposits


6,390



6,025Accrued interest (includes $2,392 and $0, respectively, subject
    to ABS nonrecourse debt)


4,302



3,353Receivable from trusts


30,095



1,779Other


16,100



17,370Total accounts receivable

$
439,071


$
509,974   F-21




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
  5.
    Mortgage Loans
    Held for Sale and Investment  Mortgage loans
    held for sale
    December 312010


2009Mortgage loans held for saleunpaid principal balance

$
366,880


$
201,121Mark-to-market
    adjustment


4,280



2,010Total mortgage loans held for sale

$
371,160


$
203,131     December 31,2010


2009


2008Mortgage loans held for sale

$
2,016


$
920


$
101,418     December 312010


2009Mortgage loans held for salebeginning balance

$
203,131


$
560,354Mortgage loans originated and purchased, net of fees


2,791,639



1,480,549Cost of loans sold, net of fees


(2,621,275
)


(1,007,369
)Principal payments/prepayments received on mortgage loans held
    for sale and other changes (including fair value
    mark-to-market
    adjustments from adoption of ASC 825 and other lower of
    cost or market valuation adjustments)


(1,508
)


(437,956
)Transfer of mortgage loans held for sale to mortgage loans held
    for investment






(319,183
)Transfer of mortgage loans held for sale to real estate owned


(827
)


(73,264
)Mortgage loans held for saleending balance

$
371,160


$
203,131   Mortgage loans
    held for investment, subject to nonrecourse debtLegacy
    Assets, net
   F-22




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   5.
    Mortgage Loans
    Held for Sale and Investment (continued)    December 312010


2009Mortgage loans held for investment, subject to nonrecourse
    debtLegacy Assets, netunpaid principal balance

$
412,398


$
490,610Transfer discountAccretable


(25,219
)


(22,040
)Non-accretable


(117,041
)


(166,660
)Allowance for loan losses


(3,298
)


Total mortgage loans held for investment, subject to nonrecourse
    debtLegacy Assets, net

$
266,840


$
301,910       December 31,2010


2009Balance at the beginning of the period

$
22,040


$
Additions






23,331Accretion


(4,082
)


(1,291
)Reclassifications from (to) nonaccretable discount


7,261



Disposals






Balance at the end of the period

$
25,219


$
22,040   and/or
 F-23




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   5.
    Mortgage Loans
    Held for Sale and Investment (continued)    December 31, 2010Non-Performing


Performing


TotalBalance at the beginning of the period

$



$



$
Provision for loan losses


829



2,469



3,298Recoveries on loans previously charged-off










Charge-offs










Balance at the end of the period

$
829


$
2,469


$
3,298Ending balance: Collectively evaluated for impairment

$
311,122


$
101,276


$
412,398  
   
    2010(In thousands)Credit Quality by Delinquency StatusPerforming

$
311,122Non-Performing


101,276Total

$
412,398Credit Quality by
    Loan-to-Value
    RatioLess than 60

$
47,627Less than 70 and more than 60


17,498Less than 80 and more than 70


26,805Less than 90 and more than 80


36,125Less than 100 and more than 90


37,599Greater than 100


246,744Total

$
412,398   Mortgage loans
    held for investment, subject to ABS nonrecourse debt
   F-24




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   5.
    Mortgage Loans
    Held for Sale and Investment (continued)  ASC 825-10.
    Mortgage loans held for investment, subject to ABS nonrecourse
    debtunpaid principal balance

$
983,106Fair value adjustment


(444,666
)Mortgage loans held for investment, subject to ABS nonrecourse
    debt, net

$
538,440     6.
    Investment in
    Debt Securities    available-for-sale
  December 31, 2009Outstanding


Accreted


FairFace


Cost


ValueRetained bonds security ratingBBs

$
68,432


$
2,486


$
2,486Bs










Total retained bonds


68,432



2,486



2,486Retained net interest margin securities


11,950







Total investment in debt securities

$
80,382


$
2,486


$
2,486  F-25




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   6.
    Investment in
    Debt Securities (continued)  other-than-temporary,
  Year Ended December 31, 2009


Year Ended December 31, 2008Unrealized





UnrealizedOther-than-


Gains


Other-than-


GainsTemporary


(Losses)(1)


Temporary(2)


(Losses)(1)Retained bonds security ratingBBs

$
(5,505
)

$



$
(40,901
)

$
Bs


(1,214
)






(3,670
)


Total retained bonds


(6,719
)






(44,571
)


Retained net interest margin securities


(90
)






(10,641
)


Total investment in debt securities

$
(6,809
)

$



$
(55,212
)

$
     (1)
    
    Unrealized gains (losses) are recorded as a component of other
    comprehensive income (loss).(2)
    
    As part of the 2008 impairment charges, Nationstar reclassified
    approximately $3.9 million in unrealized losses from other
    comprehensive income (loss).  7.
    Mortgage
    Servicing Rights   
   
    December 312010

2009Discount rate


9.7% to 30.0%



15.0%Total prepayment speeds


10.57% to 28.71%



12.89% to 25.40%Expected weighted-average life


3.49 to 6.75 years



3.50 to 6.37 yearsCredit losses


5.82% to 60.19%



12.50% to 64.62%  F-26




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   7.
    Mortgage
    Servicing Rights (continued)    December 312010


2009Fair value at the beginning of the period

$
114,605


$
110,808Additions:Servicing resulting from transfers of financial assets


26,253



8,332Recognition of MSRs from derecognition of variable interest
    entities


2,866



Purchases of servicing assets


17,812



23,380Deductions:Derecognition of servicing assets due to new accounting guidance
    on consolidation of variable interest entities


(10,431
)


Changes in fair value:Due to changes in valuation inputs or assumptions used in the
    valuation model


9,455



(9,355
)Other changes in fair value


(15,498
)


(18,560
)Fair value at the end of the period

$
145,062


$
114,605Unpaid principal balance of loans serviced for othersOriginated or purchased mortgage loans

$
31,686,641


$
32,109,547Subserviced for others


30,649,472



793,428Total unpaid principal balance of loans serviced for others

$
62,336,113


$
32,902,975     
 Total PrepaymentDiscount Rate

Speeds

Credit Losses100 bps

200 bps

10%

20%

10%

20%Adverse

Adverse

Adverse

Adverse

Adverse

AdverseChange

Change

Change

Change

Change

ChangeDecember 31, 2010Mortgage servicing rights

$
(3,828
)

$
(7,458
)

$
(8,175
)

$
(16,042
)

$
(4,310
)

$
(9,326
)  
     F-27




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   7.
    Mortgage
    Servicing Rights (continued)      For the Years EndedDecember 31,2010


2009


2008Servicing fees

$
103,690


$
89,893


$
60,021Ancillary fees


70,130



28,642



19,734Total servicing and ancillary fees

$
173,820


$
118,535


$
79,755   8.
    Other Assets    December 31,2010


2009Deferred financing costs

$
14,396


$
11,786Derivative financial instruments


8,666



7,236Prepaid expenses


3,379



2,791Other


3,095



2,415Total other assets

$
29,536


$
24,228   9.
    Derivative
    Financial Instruments  Trust 2009-ADV1
 F-28




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   9.
    Derivative
    Financial Instruments (continued)        
 RecordedExpiration

Outstanding


Fair


Gains /Dates

Notional


Value


LossesYear-ended December 31, 2010MORTGAGE LOANS HELD FOR SALELoan sale commitments

2011

$
28,641


$
42


$
(1,397
)Other AssetsIRLCs

2011


391,990



4,703



2,289Forward MBS trades

2011


546,500



3,963



580LIABILITIESInterest rate swaps and caps

2011-2013


429,000



7,801



8,872Interest rate swap,subject to ABS nonrecourse debt

2013


245,119



18,781



2,049Year-ended December 31, 2009Other AssetsIRLCs

2010

$
278,181


$
2,414


$
1,207Forward MBS trades

2010


292,553



3,383



(210
)Loan sale commitments

2010


56,131



1,439



1,439Interest rate cap agreements

2011


344,075







(14
)Interest rate swap

2013


220,000







  
  F-29




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
  10.
    Indebtedness  Notes
    Payable
    December 31, 2010


December 31, 2009Collateral





CollateralOutstanding


Pledged


Outstanding


PledgedFinancial institutions repurchase facility (2010)

$
43,059


$
45,429


$



$
Financial services company repurchase facility


209,477



223,119



149,449



159,281Financial services company unsecured line of credit






N/A



88,915



N/AFinancial institutions repurchase facility (2009)


39,014



40,640



31,582



33,245Financial services company
    2009-ADV1
    advance facility


236,808



285,226



240,935



291,462Financial institutions
    2010-ADV1
    advance facility














GSE MSR facility


15,733



18,951



21,286



23,185GSE ASAP+ facility


51,105



53,230



7,755



7,803GSE EAF facility


114,562



142,327



231,935



252,034Total notes payable

$
709,758


$
808,922


$
771,857


$
767,010  
   
      2009-ADV1
 F-30




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   10.
    Indebtedness
    (continued)    2010-ADV1
 
   
      Senior
    Unsecured Notes
      Nonrecourse
    DebtLegacy Assets
   F-31




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   10.
    Indebtedness
    (continued)    ABS
    Nonrecourse Debt
  ASC 825-10.
  Financial
    Covenants
    11.
    Repurchase
    Reserves   F-32




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   11.
    Repurchase
    Reserves (continued)    December 31,2010


2009


2008Repurchase reserves, beginning of period

$
3,648


$
3,965


$
4,196Additions


4,649



820



1,164Charge-offs


(976
)


(1,137
)


(1,395
)Repurchase reserves, end of period

$
7,321


$
3,648


$
3,965   12.
    General and
    Administrative    December 31,2010


2009


2008Depreciation and amortization

$
2,117


$
1,767


$
1,309Advertising


4,559



3,882



3,318Equipment


3,862



3,300



3,359Servicing


14,122



1,951



1,739Telecommunications


2,347



1,590



1,479Legal and professional fees


14,736



9,610



6,184Postage


4,220



2,315



1,057Stationary and supplies


2,594



1,500



903Travel


2,231



827



740Dues and fees


4,114



2,264



1,383Insurance and taxes


2,798



1,218



1,680Other


1,213



270



(957
)Total general and administrative expense

$
58,913


$
30,494


$
22,194   13.
    Members
    Equity 
   
   F-33




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   13.
    Members
    Equity (continued)   
   
      September 17, 2010

June 30, 2011

June 30, 2012

TotalClass A Units

93,494

182,016

182,016

457,526Class C Units

1,101,332

1,101,334

1,101,334

3,304,000Class D Units

1,116,000

1,116,000

1,116,000

3,348,000         December 31,2010

2009

2008Share-based compensation

$
12,856


$
827


$
2,333   14.
    Commitments and
    Contingencies   F-34




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   14.
    Commitments and
    Contingencies (continued)    2011

$
7,0152012


6,7562013


6,5432014


4,591Thereafter


4,624Total

$
29,529         15.
    Employee Benefits    16.
    Fair Value
    Measurements     F-35




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   16.
    Fair Value
    Measurements (continued)      Cash and Cash Equivalents, Restricted Cash, Notes
    Payable
 
  Mortgage Loans Held for Sale
 
     
  Mortgage Loans Held for Investment, subject to nonrecourse
    debt
 
 
  Mortgage Loans Held for Investment, subject to ABS
    nonrecourse debt
 
 F-36




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   16.
    Fair Value
    Measurements (continued)   
  Investment in Debt Securities
 
 
  Mortgage Servicing Rights
 
 
  Real Estate Owned
 
 
  Derivative Instruments
 
 
  Unsecured Senior Notes
 
 
  Nonrecourse Debt  Legacy
    Assets
 
 F-37




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   16.
    Fair Value
    Measurements (continued) 
  ABS Nonrecourse Debt
 
    December 31, 2010Total


Recurring Fair Value MeasurementsFair Value


Level 1


Level 2


Level 3AssetsMortgage loans held for
    sale(1)

$
371,160


$



$
371,160


$
Mortgage loans held for investment, subject to ABS nonrecourse
    debt(1)


538,440











538,440Mortgage servicing
    rights(1)


145,062











145,062Other assets:IRLCs


4,703







4,703



Forward MBS trades


3,963







3,963



Total assets

$
1,063,328


$



$
379,826


$
683,502LiabilitiesDerivative financial instrumentsInterest rate swaps

$
7,801


$



$
7,801


$
Derivative financial instruments, subject to ABS nonrecourse debt


18,781







18,781



ABS nonrecourse
    debt(1)


496,692











496,692Total liabilities

$
523,274


$



$
26,582


$
496,692     (1)
    
    Based on the nature and risks of these assets and liabilities,
    the Company has determined that presenting them as a single
    class is appropriate.  December 31, 2009Total


Recurring Fair Value MeasurementsFair Value


Level 1


Level 2


Level 3AssetsMortgage loans held for
    sale(1)

$
203,131


$



$
203,131


$
Investment in debt
    securities(1)


2,486











2,486Mortgage servicing
    rights(1)


114,605











114,605Other assets:IRLCs


2,414







2,414



Forward MBS trades


3,383







3,383



Loan sale commitments


1,439







1,439



Total assets

$
327,458


$



$
210,367


$
117,091     (1)
    
    Based on the nature and risks of these assets and liabilities,
    the Company has determined that presenting them as a single
    class is appropriate. F-38




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   16.
    Fair Value
    Measurements (continued)     
 Level 3 Recurring Fair Value MeasurementsTotal Gains (Losses) Included in


Purchases,Fair Value





Other


Sale,


TransfersBeginning of


Net Income


Comprehensive


Issuances, and


In/Out of


Fair ValuePeriod(1)


(Loss)


Income


Settlements


Level 3


End of PeriodYear-ended December 31, 2010AssetsMortgage loans held for investment, subject to ABS nonrecourse
    debt

$
928,891


$
71,239


$



$
(461,690
)

$



$
538,440Mortgage servicing rights


104,174



20,210







20,678







145,062Total assets

$
1,033,065


$
91,449


$



$
(441,012
)

$



$
683,502LIABILITIESABS nonrecourse debt

$
884,846


$
(16,937
)

$



$
(371,217
)

$



$
496,692Year-ended December 31, 2009AssetsInvestment in debt securities

$
9,294


$
(6,808
)

$



$



$



$
2,486Mortgage servicing rights


110,808



(19,583
)






23,380







114,605Total assets

$
120,102


$
(26,391
)

$



$
23,380


$



$
117,091  
    (1)
    
    Amounts include derecognition of previously retained beneficial
    interests and mortgage servicing rights upon adoption of
    ASC 810 related to consolidation of certain VIEs.    
 Total GainsNonrecurring Fair Value


Total


(Losses)Measurements


Estimated


Included inLevel 1


Level 2


Level 3


Fair Value


EarningsYear-ended December 31, 2010AssetsReal estate
    owned(1)

$



$



$
27,337


$
27,337


$
Total assets

$



$



$
27,337


$
27,337


$
Year-ended December 31, 2009AssetsReal estate
    owned(1)

$



$



$
10,262


$
10,262


$
(7,512
)Total assets

$



$



$
10,262


$
10,262


$
(7,512
)  
    (1)
    
    Based on the nature and risks of these assets and liabilities,
    the Company has determined that presenting them as a single
    class is appropriate.   F-39




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   16.
    Fair Value
    Measurements (continued) 
  825-10, Financial Instruments-Overall
 
    December 31, 2010


December 31, 2009Carrying





CarryingAmount


Fair Value


Amount


Fair ValueFinancial assets:Cash and cash equivalents

$
21,223


$
21,223


$
41,645


$
41,645Restricted cash


91,125



91,125



52,795



52,795Mortgage loans held for sale


371,160



371,160



203,131



203,131Mortgage loans held for investment, subject to nonrecourse
    debtLegacy assets


266,840



239,035



301,910



284,774Mortgage loans held for investment, subject to ABS nonrecourse
    debt


538,440



538,440







Investment in debt securities










2,486



2,486Derivative instruments


8,666



8,666



7,236



7,236Financial liabilities:Notes payable


709,758



709,758



771,857



771,857Unsecured senior notes


244,061



244,375







Derivative financial instruments


7,801



7,801







Derivative instruments, subject to ABS nonrecourse debt


18,781



18,781







Nonrecourse debt


138,662



140,197



177,675



178,161ABS nonrecourse debt


496,692



496,692







   17.
    Termination of
    the Company 
   
  18.
    Limited Liability
    of Members    19.
    Restructuring
    Charges   F-40




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   19.
    Restructuring
    Charges (continued)      Liability Balance


Restructuring


Restructuring


Liability Balanceat January 1


Adjustments


Settlements


at December 31Year-ended December 31, 2008Restructuring charges:Employee severance and other

$
1,048


$
270


$
(1,318
)

$
Lease terminations


18,310



1,237



(8,644
)


10,903Total

$
19,358


$
1,507


$
(9,962
)

$
10,903Year-ended December 31, 2009Restructuring charges:Lease terminations

$
10,903


$
2,222


$
(3,660
)

$
9,465Total

$
10,903


$
2,222


$
(3,660
)

$
9,465Year-ended December 31, 2010Restructuring charges:Lease terminations

$
9,465


$
2,287


$
(2,569
)

$
9,183Total

$
9,465


$
2,287


$
(2,569
)

$
9,183   20.
    Concentrations of
    Credit Risk      December 31, 2010


December 31, 2009Unpaid


% of


Unpaid


% ofPrincipal


Total


Principal


TotalState

Balance


Outstanding


Balance


OutstandingFlorida

$
62,775



14.4
%

$
78,331



15.1
%Texas


58,815



13.4
%


65,519



12.6
%California


41,019



9.4
%


55,785



10.7
%All other
    states(1)


274,235



62.8
%


320,010



61.6
%$
436,844



100.0
%

$
519,645



100.0
%     (1)
    
    No other state contains more than 5.0% of the total outstanding. F-41




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   20.
    Concentrations of
    Credit Risk (continued)       December 31,


December 31,2010


2009Interest only ARMs

$
43,687


$
57,745Amortizing ARMs:2/28


71,614



108,0523/27


5,608



9,900All other ARMs


11,173



5,617$
132,082


$
181,314   21.
    Capital
    Requirements        22.
    Business Segment
    Reporting  sub-prime
 F-42




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   22.
    Business Segment
    Reporting (continued)        Year Ended December 31, 2010Operating


Legacy PortfolioServicing


Originations


Segments


and Other


Eliminations


ConsolidatedREVENUES:Servicing fee income

$
175,569


$



$
175,569


$
820


$
(9,263
)

$
167,126Other fee income


7,273



7,042



14,315



2,643







16,958Total fee income


182,842



7,042



189,884



3,463



(9,263
)


184,084Gain (loss) on mortgage loans held for sale






77,498



77,498







(154
)


77,344Total revenues


182,842



84,540



267,382



3,463



(9,417
)


261,428Total expenses and impairments


107,283



86,920



194,203



26,927



(154
)


220,976Other income (expense):Interest income


263



11,848



12,111



77,521



9,263



98,895Interest expense


(51,791
)


(8,806
)


(60,597
)


(55,566
)






(116,163
)Loss on interest rate swaps and caps


(9,801
)






(9,801
)










(9,801
)Change in fair value on ABS nonrecourse debt














(23,297
)






(23,297
)Total other income (expense)


(61,329
)


3,042



(58,287
)


(1,342
)


9,263



(50,366
)NET INCOME (LOSS)

$
14,230


$
662


$
14,892


$
(24,806
)

$



$
(9,914
)Depreciation and amortization

$
1,092


$
781


$
1,873


$
244


$



$
2,117Total assets


689,923



402,627



1,092,550



854,631







1,947,181   F-43




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   22.
    Business Segment
    Reporting (continued)  Year Ended December 31, 2009Operating


Legacy PortfolioServicing


Originations


Segments


and Other


Eliminations


ConsolidatedREVENUES:Servicing fee income

$
91,266


$



$
91,266


$



$
(1,071
)

$
90,195Other fee income


8,867



1,156



10,023











10,023Total fee income


100,133



1,156



101,289







(1,071
)


100,218Gain (loss) on mortgage loans held for sale






54,437



54,437



(75,786
)






(21,349
)Total revenues


100,133



55,593



155,726



(75,786
)


(1,071
)


78,869Total expenses and impairments


70,897



47,532



118,429



25,009



(1,071
)


142,367Other income (expense):Interest income


4,143



4,261



8,404



44,114







52,518Interest expense


(25,877
)


(3,438
)


(29,315
)


(40,568
)






(69,883
)Loss on interest rate swaps and caps














(14
)






(14
)Total other income (expense)


(21,734
)


823



(20,911
)


3,532







(17,379
)NET INCOME (LOSS)

$
7,502


$
8,884


$
16,386


$
(97,263
)

$



$
(80,877
)Depreciation and amortization

$
1,004


$
538


$
1,542


$
225


$



$
1,767Total assets


681,543



239,202



920,745



359,440







1,280,185   Year Ended December 31, 2008Operating


Legacy PortfolioServicing


Originations


Segments


and Other


Eliminations


ConsolidatedREVENUES:Servicing fee income

$
69,235


$



$
69,235


$



$
(1,183
)

$
68,052Other fee income


5,366



589



5,955











5,955Total fee income


74,601



589



75,190







(1,183
)


74,007Gain (loss) on mortgage loans held for sale






21,985



21,985



(108,648
)






(86,663
)Total revenues


74,601



22,574



97,175



(108,648
)


(1,183
)


(12,656
)Total expenses and impairments


55,037



30,795



85,832



63,128



(1,183
)


147,777Other income (expense):Interest income


10,872



1,920



12,792



79,268







92,060Interest expense


(15,718
)


(1,289
)


(17,007
)


(48,541
)






(65,548
)Loss on interest rate swaps and caps














(23,689
)






(23,689
)Total other income (expense)


(4,846
)


631



(4,215
)


7,038







2,823NET INCOME (LOSS)

$
14,718


$
(7,590
)

$
7,128


$
(164,738
)





$
(157,610
)Depreciation and amortization

$
789


$
383


$
1,172


$
137






$
1,309Total assets


479,819



72,888



552,707



569,294







1,122,001   F-44




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
  23.
    Guarantor
    Financial Statement Information  Form S-4
 F-45




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING
    BALANCE SHEET
  DECEMBER 31,
    2010
  (In
    Thousands)
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedAssetsCash and cash equivalents

$
20,904


$
319


$



$



$
21,223Restricted cash


57,579







33,546







91,125Accounts receivable, net


435,096







3,975







439,071Mortgage loans held for sale


371,160















371,160Mortgage loans held for investment, subject to nonrecourse
    debt-Legacy Assets, net


5,536







261,304







266,840Mortgage loans held for investment, subject to ABS nonrecourse
    debt (at fair value)










538,440







538,440Investment in debt
    securitiesavailable-for-sale


597











(597
)


Investment in subsidiaries


158,276











(158,276
)


Receivables from affiliates






62,171



132,353



(185,531
)


8,993Mortgage servicing rights


145,062















145,062Property and equipment, net


7,559



835











8,394Real estate owned, net


323







27,014







27,337Other assets


29,536















29,536Total assets

$
1,231,628


$
63,325


$
996,632


$
(344,404
)

$
1,947,181Liabilities and members equityNotes payable

$
472,950


$



$
236,808


$



$
709,758Unsecured senior notes


244,061















244,061Payables and accrued liabilities


73,785







1,269







75,054Payables to affiliates


185,531











(185,531
)


Derivative financial instruments










7,801







7,801Derivative financial instruments, subject to ABS nonrecourse debt










18,781







18,781Nonrecourse debtLegacy Assets










138,662







138,662ABS nonrecourse debt (at fair value)










497,289



(597
)


496,692Total liabilities


976,327







900,610



(186,128
)


1,690,809Total members equity


255,301



63,325



96,022



(158,276
)


256,372Total liabilities and members equity

$
1,231,628


$
63,325


$
996,632


$
(344,404
)

$
1,947,181  
 F-46




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING
    STATEMENT OF OPERATIONS
  FOR THE YEAR
    ENDED DECEMBER 31, 2010
  (In
    Thousands)
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedRevenues:Servicing fee income

$
174,660


$
1,730


$



$
(9,264
)

$
167,126Other fee income


8,259



7,551



1,148







16,958Total fee income


182,919



9,281



1,148



(9,264
)


184,084Gain on mortgage loans held for sale


77,344















77,344Total revenues


260,263



9,281



1,148



(9,264
)


261,428Expenses and impairments:Salaries, wages, and benefits


146,746



2,369











149,115General and administrative


57,329



1,642



(58
)






58,913Provision for loan losses


1,558







1,740







3,298Loss on foreclosed real estate










205







205Occupancy


9,289



156











9,445Total expenses and impairments


214,922



4,167



1,887







220,976Other income (expense):Interest income


17,019



6



72,606



9,264



98,895Interest expense


(54,075
)






(62,088
)






(116,163
)Loss on interest rate swaps and caps










(9,801
)






(9,801
)Fair value changes in ABS securitizations










(23,748
)


451



(23,297
)Gain (loss) from subsidiaries


(18,650
)










18,650



Total other income (expense)


(55,706
)


6



(23,031
)


28,365



(50,366
)Net income (loss)

$
(10,365
)

$
5,120


$
(23,770
)

$
19,101


$
(9,914
)  
 F-47




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING
    STATEMENT OF CASH FLOWS
  FOR THE YEAR
    ENDED DECEMBER 31, 2010
  (In
    Thousands)
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedOperating activitiesNet income (loss)

$
(10,365
)

$
5,120


$
(23,770
)

$
19,101


$
(9,914
)Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Loss from subsidiaries


18,650











(18,650
)


Share-based compensation


12,856















12,856Gain on mortgage loans held for sale


(77,344
)














(77,344
)Provision for loan losses


1,558







1,740







3,298Loss on foreclosed real estate










205







205Depreciation and amortization


2,104



13











2,117Fair value changes in ABS securitization










23,297







23,297Loss on interest rate swaps and caps










8,872







8,872Change in fair value of mortgage servicing rights


6,043















6,043Amortization of debt discount


12,380







6,351







18,731Amortization of premiums/discounts










(4,526
)






(4,526
)Mortgage loans originated and purchased, net of fees


(2,791,639
)














(2,791,639
)Cost of loans sold, net of fees


2,621,275















2,621,275Principal payments/prepayments received and other changes in
    mortgage loans originated as held for sale


49,049







(16,634
)






32,415Changes in assets and liabilities:Accounts receivable, net


71,364



3



(31,979
)






39,388Payables to affiliates


(52,594
)


(5,110
)


61,662







3,958Other assets


1,152















1,152Payables and accrued liabilities


8,444



(96
)


(185
)






8,163Net cash provided by (used) in operating activities


(127,067
)


(70
)


25,033



451



(101,653
)Investing activitiesPrincipal payments received and other changes on mortgage loans
    held for investment, subject to ABS nonrecourse debt










48,838







48,838Proceeds from sales of real estate owned


504







73,603







74,107Purchase of mortgage servicing rights, net of liabilities
    incurred


(17,812
)














(17,812
)Property and equipment additions, net of disposals


(3,923
)


(13
)










(3,936
)Net cash provided by (used) in investing activities


(21,231
)


(13
)


122,441







101,197Financing activitiesTransfers to/from restricted cash, net


(38,617
)






4,886







(33,731
)Issuance of unsecured notes, net of issue discount


243,013















243,013 
 F-48




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedRepayment of non-recourse debtLegacy assets










(45,364
)






(45,364
)Repayment of ABS nonrecourse debt


(146
)






(102,869
)


(451
)


(103,466
)Decrease in notes payable, net


(57,972
)






(4,127
)






(62,099
)Debt financing costs


(14,923
)














(14,923
)Tax related share-based settlement of units by members


(3,396
)














(3,396
)Net cash provided by (used in) financing activities


127,959







(147,474
)


(451
)


(19,966
)Net increase (decrease) in cash and cash equivalents


(20,339
)


(83
)










(20,422
)Cash and cash equivalents at beginning of year


41,243



402











41,645Cash and cash equivalents at end of year

$
20,904


$
319


$



$



$
21,223  
 F-49




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING
    BALANCE SHEET
  DECEMBER 31,
    2009
  (In
    Thousands)
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedAssetsCash and cash equivalents

$
41,243


$
402


$



$



$
41,645Restricted cash


18,962







33,833







52,795Accounts receivable, net


506,460



3



3,511







509,974Mortgage loans held for sale


203,131















203,131Mortgage loans held for investment, subject to nonrecourse
    debtLegacy Assets, net


6,413







295,497







301,910Investment in debt
    securitiesavailable-for-sale


2,486















2,486Investment in subsidiaries


275,661











(275,661
)


Receivables from affiliates






160,645



190,772



(338,843
)


12,574Mortgage servicing rights


114,605















114,605Property and equipment, net


5,740



835











6,575Real estate owned, net










10,262







10,262Other assets


24,228















24,228Total assets

$
1,198,929


$
161,885


$
533,875


$
(614,504
)

$
1,280,185Liabilities and members equityNotes payable

$
530,922


$



$
240,935


$



$
771,857Payables and accrued liabilities


65,341



96



1,393







66,830Payables to affiliates


338,843











(338,843
)


Nonrecourse debtLegacy Assets










177,675







177,675Total liabilities


935,106



96



420,003



(338,843
)


1,016,362Total members equity


263,823



161,789



113,872



(275,661
)


263,823Total liabilities and members equity

$
1,198,929


$
161,885


$
533,875


$
(614,504
)

$
1,280,185  
 F-50




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING
    STATEMENT OF OPERATIONS
  FOR THE YEAR
    ENDED DECEMBER 31, 2009
  (In
    Thousands)
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedRevenues:Servicing fee income

$
89,151


$
1,044


$



$



$
90,195Other fee income


4,823



5,200











10,023Total fee income


93,974



6,244











100,218Loss on mortgage loans held for sale


(21,349
)














(21,349
)Total revenues


72,625



6,244











78,869Expenses and impairments:Salaries, wages, and benefits


88,075



2,614











90,689General and administrative


30,111



379



4







30,494Loss on foreclosed real estate


(1,352
)


(10,925
)


19,789







7,512Occupancy


6,621



242











6,863Loss on
    available-for-sale
    securities-other-than-temporary


6,809















6,809Total expenses and impairments


130,264



(7,690
)


19,793







142,367Other income (expense):Interest income


42,160



233



10,125







52,518Interest expense


(52,810
)


(2,694
)


(14,379
)






(69,883
)Loss on interest rate swaps and caps


(14
)














(14
)Gain (loss) from subsidiaries


(12,574
)










12,574



Total other income (expense)


(23,238
)


(2,461
)


(4,254
)


12,574



(17,379
)Net income/(loss)

$
(80,877
)

$
11,473


$
(24,047
)

$
12,574


$
(80,877
)  
 F-51




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  NATIONSTAR
    MORTGAGE LLC
    CONSOLIDATING STATEMENT OF CASH FLOWS
    FOR THE YEAR ENDED DECEMBER 31, 2009
    (In Thousands)
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedOperating activities:Net income (loss)

$
(80,877
)

$
11,473


$
(24,047
)

$
12,574


$
(80,877
)Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Loss from subsidiaries


12,574











(12,574
)


Share-based compensation


827















827Loss on mortgage loans held for sale


21,349















21,349Loss on foreclosed real estate


(1,352
)


(10,925
)


19,789







7,512Loss on interest rate swaps and caps


14















14Unrealized gain on derivative financial instruments


(2,436
)














(2,436
)Depreciation and amortization


1,728



39











1,767Impairment of investments in debt securities


6,809















6,809Change in fair value of mortgage servicing rights


27,915















27,915Amortization of debt discount


19,075







2,212







21,287Amortization of premiums/discounts


(1,394
)














(1,394
)Mortgage Loans originated and purchased, net of fees


(1,480,549
)














(1,480,549
)Cost of loans sold, net of fees


1,007,369















1,007,369Principal payments/prepayments received and other changes in
    mortgage loans originated as held for sale


403,256







66,816







470,072Changes in assets and liabilities:Accounts receivable, net


(151,602
)


1,113



(3,511
)






(154,000
)Payables to affiliates


247,676



(47,397
)


(133,339
)






66,940Other assets


(9,115
)














(9,115
)Payables and accrued liabilities


11,550



(12
)


1,331







12,869Net cash provided by (used) in operating activities


32,817



(45,709
)


(70,749
)






(83,641
)Investing activities:Proceeds from sales of real estate owned


1,896



32,202



83







34,181Purchase of mortgage servicing rights, net of liabilities
    incurred


(1,169
)














(1,169
)Property and equipment additions, net of disposals


(2,990
)


(39
)










(3,029
)Net cash provided by (used) in investing activities


(2,263
)


32,163



83







29,983 
 F-52




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedFinancing activities:Transfers to/from restricted cash, net


(18,444
)


13,737



(27,056
)






(31,763
)Issuance of non-recourse debt, net










191,272







191,272(Decrease) increase in notes payable, net


17,346







(77,741
)






(60,395
)Repayment of non-recourse debtLegacy assets










(15,809
)






(15,809
)Debt financing costs


(18,059
)














(18,059
)Capital contributions from members


20,700















20,700Net cash provided by financing activities


1,543



13,737



70,666







85,946Net increase (decrease) in cash and cash equivalents


32,097



191











32,288Cash and cash equivalents at beginning of year


9,146



211











9,357Cash and cash equivalents at end of year

$
41,243


$
402


$



$



$
41,645  
 F-53




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING STATEMENT OF OPERATIONS
  FOR THE YEAR ENDED DECEMBER 31, 2008
  (In Thousands)
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedRevenuesServicing fee income

$
67,876


$
74


$
102


$



$
68,052Other fee income


1,304



4,651











5,955Total fee income


69,180



4,725



102







74,007Loss on mortgage loans held for sale


(86,663
)














(86,663
)Total revenues


(17,483
)


4,725



102







(12,656
)Expenses and impairmentsSalaries, wages, and benefits


60,808



975











61,783General and administrative


22,059



135











22,194Loss on foreclosed real estate


(1,011
)


3,578











2,567Occupancy


5,989



32











6,021Loss on
    available-for-sale
    securities- other-than-temporary


55,212















55,212Total expenses and impairments


143,057



4,720











147,777Other income (expense)Interest income


92,030



30











92,060Interest expense


(52,931
)


(45
)


(12,572
)






(65,548
)Loss on interest rate swaps and caps


(23,689
)














(23,689
)Gain (loss) from subsidiaries


(12,480
)










12,480



Total other income (expense)


2,930



(15
)


(12,572
)


12,480



2,823Net income (loss)

$
(157,610
)

$
(10
)

$
(12,470
)

$
12,480


$
(157,610
)  
 F-54




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING
    STATEMENT OF CASH FLOWS
  FOR THE YEAR
    ENDED DECEMBER 31, 2008
  (In
    Thousands)
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedOperating activitiesNet income (loss)

$
(157,610
)

$
(10
)

$
(12,470
)

$
12,480


$
(157,610
)Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Loss from subsidiaries


12,480











(12,480
)


Share-based compensation


2,333















2,333Loss on mortgage loans held for sale


86,663















86,663Loss on foreclosed real estate


(1,011
)


3,578











2,567Loss on interest rate swaps and caps


23,689















23,689Unrealized loss on derivative financial instruments


2,077















2,077Depreciation and amortization


1,301



8











1,309Accretion of discount on securities


(4,422
)














(4,422
)Impairment of investments in debt securities


55,212















55,212Change in fair value of mortgage servicing rights


11,701















11,701Amortization of debt discount


8,879















8,879Amortization of premiums/discounts


(85
)














(85
)Mortgage loans originated and purchased, net of fees


(545,860
)














(545,860
)Cost of loans sold, net of fees


513,924















513,924Principal payments/prepayments received and other changes in
    mortgage loans originated as held for sale


201,184















201,184Changes in assets and liabilities:Accounts receivable, net


(164,961
)


(605
)










(165,566
)Payables to affiliates


129,110



128,659



(255,317
)






2,452Other assets


38,363















38,363Payables and accrued liabilities


(36,363
)


(297
)


62







(36,598
)Net cash provided by (used) in operating activities


176,604



131,333



(267,725
)






40,212Investing activitiesProceeds from sales of real estate owned


52,764



(23,488
)










29,276Purchase of mortgage servicing rights, net of liabilities
    incurred


(19,013
)














(19,013
)Interest rate swap settlements


(51,570
)














(51,570
)Property and equipment additions, net of disposals


(1,764
)


(8
)










(1,772
)Principal payments received on debt securities


8,436















8,436Net cash used in investing activities


(11,147
)


(23,496
)










(34,643
)Financing activitiesTransfers to/from restricted cash, net


(517
)


(8,402
)


(952
)






(9,871
)(Decrease)/increase in notes payable, net


(325,943
)


(100,000
)


268,677







(157,266
)Debt financing costs


(15,926
)














(15,926
) 
 F-55




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
   23.
    Guarantor
    Financial Statement Information (continued)  Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedCapital contributions from members


145,600















145,600Net cash provided by (used in) financing activities


(196,786
)


(108,402
)


267,725







(37,463
)Net increase (decrease) in cash and cash equivalents


(31,329
)


(565
)










(31,894
)Cash and cash equivalents at beginning of year


40,475



776











41,251Cash and cash equivalents at end of year

$
9,146


$
211


$



$



$
9,357   24.
    Subsequent Events   
   
 
  25.
    Unaudited Pro
    Forma Tax Information 
 
   
 
   
 F-56




---



##### Table of Contents



NATIONSTAR
    MORTGAGE LLC AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 
 
  
 
 March 31,


December 31,2011


2010(unaudited)(Dollars in thousands)AssetsCash and cash equivalents

$
48,420


$
21,223Restricted cash (includes $694 and $1,472, respectively, of
    restricted cash, subject to ABS nonrecourse debt)


73,100



91,125Accounts receivable, net (includes $3,138 and $2,392,
    respectively, of accrued interest, subject to ABS nonrecourse
    debt)


454,235



439,071Mortgage loans held for sale


268,950



371,160Mortgage loans held for investment, subject to nonrecourse debt
    - Legacy Assets, net of allowance for loan losses of $4,426 and
    $3,298, respectively


262,268



266,840Mortgage loans held for investment, subject to ABS nonrecourse
    debt (at fair value)


530,681



538,440Receivables from affiliates


7,542



8,993Mortgage servicing rights


151,159



145,062Property and equipment, net


11,255



8,394Real estate owned, net (includes $16,142 and $17,509,
    respectively, of real estate owned, subject to ABS nonrecourse
    debt)


24,417



27,337Other assets


36,228



29,536Total assets

$
1,868,255


$
1,947,181Liabilities and members equityNotes payable

$
608,451


$
709,758Unsecured senior notes


244,410



244,061Payables and accrued liabilities (includes $123 and $95,
    respectively, of accrued interest payable, subject to ABS
    nonrecourse debt)


103,899



75,054Derivative financial instruments


7,724



7,801Derivative financial instruments, subject to ABS nonrecourse debt


15,615



18,781Nonrecourse debt  Legacy Assets


133,592



138,662ABS nonrecourse debt (at fair value)


489,321



496,692Total liabilities


1,603,012



1,690,809Commitments and contingenciesTotal members equity


265,243



256,372Total liabilities and members equity

$
1,868,255


$
1,947,181  
 
  See accompanying notes.
 
 F-57




---



##### Table of Contents



NATIONSTAR
    MORTGAGE LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS
 
 
  
 
 Three Months Ended March 31,2011


2010(Unaudited)(Dollars in thousands)Revenues:Servicing fee income

$
57,467


$
34,090Other fee income


7,219



4,660Total fee income


64,686



38,750Gain on mortgage loans held for sale


20,506



12,429Total revenues


85,192



51,179Expenses and impairments:Salaries, wages, and benefits


46,923



29,489General and administrative


15,564



8,720Provisions for loan losses


1,128



(Gain)/Loss on foreclosed real estate


2,247



(21
)Occupancy


2,259



1,901Total expenses and impairments


68,121



40,089Other income (expense):Interest income


18,318



31,333Interest expense


(25,368
)


(29,135
)Loss on interest rate swaps and caps






(2,779
)Fair value changes in ABS securitizations


(2,652
)


(9,777
)Total other income (expense)


(9,702
)


(10,358
)Net income

$
7,369


$
732Unaudited pro forma information (Note 18):Historical net income before taxes

$
7,369Pro forma adjustment for taxes


Pro forma net income

$
7,369  
 
  See accompanying notes.
 
 F-58




---



##### Table of Contents



NATIONSTAR
    MORTGAGE LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF MEMBERS
    EQUITY
 
  
 Accumulated Other


TotalMember


Comprehensive


MembersUnits


Income


Equity(Dollars in thousands)Balance at January 1, 2010

$
263,823


$



$
263,823Cumulative effect of change in accounting principles as of
    January 1, 2010 related to adoption of new accounting
    guidance on consolidation of variable interest entities


(8,068
)






(8,068
)Share-based compensation


12,856







12,856Tax related share-based settlement of units by members


(3,396
)






(3,396
)Comprehensive loss:Net loss


(9,914
)






(9,914
)Change in value of cash flow hedge






1,071



1,071Total comprehensive loss










(8,843
)Balance at December 31, 2010


255,301



1,071



256,372(unaudited)Share-based compensation


5,263







5,263Distribution to parent


(3,900
)






(3,900
)Comprehensive income:Net income


7,369







7,369Change in value of cash flow hedge






139



139Total comprehensive income










7,508Balance at March 31, 2011

$
264,033


$
1,210


$
265,243  
 
  See accompanying notes.
 
 F-59




---



##### Table of Contents



NATIONSTAR
    MORTGAGE LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS
 
  
 Three MonthsEnded March 31,2011


2010(Unaudited)(Dollars in thousands)Operating activitiesNet income

$
7,369


$
732Adjustments to reconcile net income to net cash provided
    by/(used in) operating activities:Share-based compensation


5,263



210Gain on mortgage loans held for sale


(20,506
)


(12,429
)Provisions for loan losses


1,128



(Gain)/Loss on foreclosed real estate


2,247



(21
)Fair value changes in ABS securitizations


2,652



9,777Depreciation and amortization


751



398(Gain)/loss or ineffectiveness on interest rate swaps and caps


(902
)


2,779Change in fair value on mortgage servicing rights


3,784



4,600Amortization of debt discount


3,066



5,564Amortization of premiums/discounts


(1,260
)


(1,466
)Mortgage loans originated and purchased, net of fees


(654,127
)


(512,615
)Cost of loans sold, net of fees


765,695



492,333Principal payments/prepayments received and other changes in
    mortgage loans originated as held for sale


2,943



(4,708
)Changes in assets and liabilities:Accounts receivable, net


(15,164
)


(68,510
)Receivables from affiliates


1,451



2,278Other assets


(1,649
)


(2,211
)Payables and accrued liabilities


28,845



650Net cash provided by/(used in) operating activities


131,586



(82,639
)  
 
  Continued on following page
 
 F-60




---



##### Table of Contents



NATIONSTAR
    MORTGAGE LLC AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS (continued)
 
  
 Three Months EndedMarch 31,2011


2010(Unaudited)(Dollars in thousands)Investing activitiesPrincipal payments received and other changes on mortgage loans
    held for investment, subject to ABS nonrecourse debt

$
2,987


$
713Property and equipment additions, net of disposals


(3,612
)


(367
)Acquisition of equity method investee


(6,600
)


Proceeds from sales of real estate owned


12,503



30,395Net cash provided by investing activities


5,278



30,741Financing activitiesTransfers from/(to) restricted cash, net


18,025



13,608Issuance of unsecured notes, net of issue discount






243,012Decrease in notes payable


(101,307
)


(164,639
)Repayment of non-recourse debt  Legacy assets


(5,895
)


(11,348
)Repayment of ABS nonrecourse debt


(14,288
)


(35,559
)Distribution to parent


(3,900
)


Debt financing costs


(2,302
)


(11,270
)Net cash provided by/(used in) financing activities


(109,667
)


33,804Net increase (decrease) in cash and cash equivalents


27,197



(18,094
)Cash and cash equivalents at beginning of period


21,223



41,645Cash and cash equivalents at end of period

$
48,420


$
23,551Supplemental disclosures of noncash activitiesTransfer of mortgage loans held for investment to real estate
    owned

$
5,830


$
16,252Transfer of mortgage loans held for investment, subject to ABS
    nonrecourse debt to real estate owned


16,244



33,740Transfer of mortgage loans held for sale to real estate owned


288



Mortgage servicing rights resulting from sale or securitization
    of mortgage loans


9,881



3,725See accompanying notes.  
 F-61




---



##### Table of Contents



Nationstar
    Mortgage LLC and SubsidiariesNotes to Consolidated Financial Statements
    March 31, 2011 (Unaudited)
 
 
  1.
    Basis of
    Presentation 
 
   
 
 
 
  Form 10-Q Regulation S-X
 
 
  2.
    Recent Accounting
    Developments 
 
  No. 2011-02, A Creditors Determination of Whether a Restructuring is
    a Troubled Debt Restructuring No. 2011-02). No. 2011-02 No. 2011-02
 
 
  No. 2011-03, Reconsideration of Effective Control for Repurchase
    Agreements No. 2011-03). No. 2011-03 No. 2011-03
 
 
  No. 2011-04, Amendments to Achieve Common Fair Value Measurement and
    Disclosure Requirements in U.S. GAAP and IFRSs No. 2011-04). No. 2011-04
 
 F-62




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   2.
    Recent Accounting
    Developments (continued) 
 
  No. 2011-04
 
 
  3.
    Variable Interest
    Entities and Securitizations 
 
   
  
 TransfersAccounted for asSecuritization


SecuredMarch 31, 2011

Trusts


Borrowings


TotalAssetsRestricted cash

$
694


$
20,015


$
20,709Accounts receivable


3,138



265,498



268,636Mortgage loans held for investment, subject to nonrecourse debt






256,108



256,108Mortgage loans held for investment, subject to ABS nonrecourse
    debt


530,681







530,681Real estate owned


16,142



7,808



23,950Total Assets

$
550,655


$
549,429


$
1,100,084LiabilitiesNotes payable

$



$
219,146


$
219,146Payables and accrued liabilities


123



1,187



1,310Outstanding servicer
    advances(1)


32,810







32,810Derivative financial instruments






6,760



6,760Derivative financial instruments, subject to ABS nonrecourse debt


15,615







15,615Nonrecourse debtLegacy Assets






133,592



133,592ABS nonrecourse debt


490,171







490,171Total Liabilities

$
538,719


$
360,685


$
899,404  
  F-63




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   3.
    Variable Interest
    Entities and Securitizations (continued) 
  
 TransfersAccounted for asSecuritization


SecuredDecember 31, 2010

Trusts


Borrowings


TotalAssetsRestricted cash

$
1,472


$
32,075


$
33,547Accounts receivable


2,392



286,808



289,200Mortgage loans held for investment, subject to nonrecourse debt






261,305



261,305Mortgage loans held for investment, subject to ABS nonrecourse
    debt


538,440







538,440Real estate owned


17,509



9,505



27,014Total Assets

$
559,813


$
589,693


$
1,149,506LiabilitiesNotes payable

$



$
236,808


$
236,808Payables and accrued liabilities


95



1,173



1,268Outstanding servicer
    advances(1)


32,284







32,284Derivative financial instruments






7,801



7,801Derivative financial instruments, subject to ABS nonrecourse debt


18,781







18,781Nonrecourse debtLegacy Assets






138,662



138,662ABS nonrecourse debt


497,289







497,289Total Liabilities

$
548,449


$
384,444


$
932,893  
   
  (1)
    
    Outstanding servicer advances consists of principal and interest
    advances paid by Nationstar to cover scheduled payments and
    interest that have not been timely paid by borrowers. These
    outstanding servicer advances are eliminated upon the
    consolidation of the securitization trusts. 
 
   
  
 March 31, 2011


December 31, 2010Total collateral balance

$
3,950,854


$
4,038,978Total certificate balance


3,944,442



4,026,844Total mortgage servicing rights at fair value


25,847



26,419  
 
   
 F-64




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   3.
    Variable Interest
    Entities and Securitizations (continued) 
 
   
  
 Three Months Ended

Three Months EndedMarch 31, 2011

March 31, 2010Principal Amount of



Principal Amount ofLoans 60 Days or

Credit

Loans 60 Days or

CreditMore Past Due

Losses

More Past Due

LossesTotal securitization Trusts

$
756,024


$
51,422


$
934,905


$
48,524  
 
   
  
 For the Three Months EndedMarch 31, 2011

March 31, 2010Servicing

Loan

Servicing

LoanFees Received

Repurchases

Fees Received

RepurchasesTotal securitization trusts

$
7,738


$



$
7,027


$
  
 
  4.
    Consolidated
    Statement of Cash Flows-Supplemental Disclosure 
 
   
 
  5.
    Accounts
    Receivable 
 
   
 
   
  
 March 31,


December 31,2011


2010Delinquency advances

$
147,262


$
148,752Corporate and escrow advances


243,642



233,432Insurance deposits


3,390



6,390Accrued interest (includes $3,138 and $2,392, respectively,
    subject to ABS nonrecourse debt)


5,047



4,302Receivable from trusts


38,401



30,095Other


16,493



16,100Total accounts receivable

$
454,235


$
439,071  
 F-65




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
  6.
    Mortgage Loans
    Held for Sale and Investment 
 
   
  
 March 31,


December 31,2011


2010Mortgage loans held for saleunpaid principal balance

$
261,562


$
366,880Mark-to-market
    adjustment


7,388



4,280Total mortgage loans held for sale

$
268,950


$
371,160  
 
   
  
 March 31,


December 31,2011


2010Mortgage loans held for saleNon-performing

$
1,971


$
2,016  
 
   
  
 For the Three Months EndedMarch 31,


March 31,2011


2010Mortgage loans held for salebeginning balance

$
371,160


$
203,131Mortgage loans originated and purchased, net of fees


654,127



512,615Cost of loans sold, net of fees


(765,695
)


(492,333
)Principal payments received on mortgage loans held for sale and
    other changes


9,646



4,172Transfer of mortgage loans held for sale to real estate owned


(288
)


Mortgage loans held for saleending balance

$
268,950


$
227,585  
 
   
  
 March 31,


December 31,2011


2010Mortgage loans held for investmentunpaid principal balance

$
405,682


$
412,398Transfer discountAccretable


(25,659
)


(25,219
)Non-accretable


(113,329
)


(117,041
)Allowance for loan losses


(4,426
)


(3,298
)Mortgage loans held for investment, net

$
262,268


$
266,840  
 
   
 F-66




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   6.
    Mortgage Loans
    Held for Sale and Investment (continued) 
 
   
 
   
  
 March 31,


December 31,2011


2010Balance at the beginning of the period

$
25,219


$
22,040Additions






Accretion


(1,103
)


(4,082
)Reclassifications from (to) nonaccretable discount


1,543



7,261Disposals






Balance at the end of the period

$
25,659


$
25,219  
 
  and/or
 
 
   
  
 March 31, 2011Non-Performing


Performing


TotalBalance at the beginning of the period

$
829


$
2,469


$
3,298Provision for loan losses


86



1,042



1,128Recoveries on loans previously charged-off










Charge-offs










Balance at the end of the period

$
915


$
3,511


$
4,426Ending balanceCollectively evaluated for impairment

$
304,421


$
101,261


$
405,682  
  F-67




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   6.
    Mortgage Loans
    Held for Sale and Investment (continued) 
  
 December 31, 2010Non-Performing


Performing


TotalBalance at the beginning of the period

$



$



$
Provision for loan losses


829



2,469



3,298Recoveries on loans previously charged-off










Charge-offs










Balance at the end of the period

$
829


$
2,469


$
3,298Ending balance  Collectively evaluated for impairment

$
311,122


$
101,276


$
412,398  
 
  Loan-to-Value
 
 
   
  
 March 31,


December 31,2011


2010(In thousands)Credit Quality by Delinquency StatusPerforming

$
304,421


$
311,122Non-Performing


101,261



101,276Total

$
405,682


$
412,398Credit Quality by
    Loan-to-Value
    RatioLess than 60

$
45,688


$
47,627Less than 70 and more than 60


18,018



17,498Less than 80 and more than 70


26,770



26,805Less than 90 and more than 80


35,567



36,125Less than 100 and more than 90


38,402



37,599Greater than 100


241,237



246,744Total

$
405,682


$
412,398  
 
   
 
   
 F-68




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   6.
    Mortgage Loans
    Held for Sale and Investment (continued) 
 
  ASC 825-10.
 
 
   
  
 March 31,


December 31,2011


2010(In thousands)Mortgage loans held for investment, subject to ABS nonrecourse
    debt  unpaid principal balance

$
963,875


$
983,106Fair value adjustment


(433,194
)


(444,666
)Mortgage loans held for investment, subject to ABS nonrecourse
    debt, net

$
530,681


$
538,440  
 
   
 
  7.
    Mortgage
    Servicing Rights 
 
   
 
   
 
   
  
 March 31, 2011


December 31, 2010Discount rate


9.7% to 30.0%



9.7% to 30.0%Total prepayment speeds


10.57% to 28.71%



10.57% to 28.71%Expected weighted-average life


3.49 to 6.75 years



3.49 to 6.75 yearsCredit losses


5.82% to 60.19%



5.82% to 60.19%  
 F-69




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   7.
    Mortgage
    Servicing Rights (continued) 
 
   
  
 March 31,


December 31,2011


2010Fair value at the beginning of the period

$
145,062


$
114,605Additions:Servicing resulting from transfers of financial assets


9,881



26,253Recognition of MSRs from derecognition of variable interest
    entities






2,866Purchases of servicing assets






17,812Deductions:Derecognition of servicing assets due to new accounting guidance
    on consolidation of variable interest entities






(10,431
)Changes in fair value:Due to changes in valuation inputs or assumptions used in the
    valuation model






9,455Other changes in fair value


(3,784
)


(15,498
)Fair value at the end of the period

$
151,159


$
145,062Unpaid principal balance of loans serviced for othersOriginated or purchased mortgage loans

$
31,297,199


$
31,686,641Subserviced for others


33,971,672



30,649,472Total unpaid principal balance of loans serviced for others

$
65,268,871


$
62,336,113  
 
   
  
 For the Three Months EndedMarch 31, 2011


March 31, 2010Servicing fees

$
43,138


$
22,498Ancillary fees


18,357



13,193Total servicing and ancillary fees

$
61,495


$
35,691  
  
  8.
    Other
    Assets 
 
   
  
 March 31,


December 31,2011


2010Deferred financing costs

$
14,639


$
14,396Derivative financial instruments


6,699



8,666Prepaid expenses


3,003



3,379Equity method investment


6,600



Other


5,287



3,095Total other assets

$
36,228


$
29,536  
 F-70




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   8.
    Other Assets
    (continued) 
 
   
 
  9.
    Derivative
    Financial Instruments 
 
  Trust 2009-ADV1
 
 
  The Effect of
    Derivative Instruments on the Statement of Operations
    for the three months ended March 31, 2011
    (in thousands)
 
  
 Location ofGain (Loss)RecognizedLocation of

Amount of

in Income onGain (Loss)

Gain (Loss)

DerivativeAmount of

Reclassified

Reclassified

(Ineffective

Amount ofDerivatives

Gain (Loss)

from

from

Portion and

Gain (Loss)in ASC815

Recognized

Accumulated

Accumulated

Amount

RecognizedCash Flow

in OCI on

OCI into

OCI into

Excluded from

in Income onHedging

Derivative

Income

Income

Effectiveness

DerivativeRelationships

(Effective Portion)

(Effective Portion)

(Effective Portion)

Testing)

(Ineffective Portion)Interest Rate Swap

$
139



Interest Expense


$
278



Interest
    Expense


$
902  
 
   
 F-71




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   9.
    Derivative
    Financial Instruments (continued) 
 
   
  
 RecordedExpiration


Outstanding





Gains /Dates


Notional


Fair Value


(Losses)THREE MONTHS ENDED MARCH 31, 2011MORTGAGE LOANS HELD FOR SALELoan sale commitments


2011


$
30,931


$
861


$
819OTHER ASSETSIRLCs


2011



509,882



6,699



1,997LIABILITIESInterest rate swaps and caps


2011-2013



395,500



6,760



902Forward MBS trades


2011



531,701



964



(4,928
)Interest rate swap, subject to ABS nonrecourse debt


2013



234,921



15,615



3,166YEAR ENDED DECEMBER 31, 2010MORTGAGE LOANS HELD FOR SALELoan sale commitments


2011


$
28,641


$
42


$
(1,397
)OTHER ASSETSIRLCs


2011



391,990



4,703



2,289Forward MBS trades


2011



546,500



3,963



580LIABILITIESInterest rate swaps and caps


2011-2013



429,000



7,801



8,872Interest rate swap, subject to ABS nonrecourse debt


2013



245,119



18,781



2,049  
  F-72




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
  10.
    Indebtedness 
 
  Notes
    Payable
 
 
   
  
 March 31, 2011


December 31, 2010Collateral





CollateralOutstanding


Pledged


Outstanding


PledgedFinancial institutions repurchase facility (2011)

$



$



$



$
Financial institutions repurchase facility (2010)


27,063



29,225



43,059



45,429Financial services company repurchase facility


177,648



185,184



209,477



223,119Financial institutions repurchase facility (2009)


27,942



29,106



39,014



40,640Financial services company
    2009-ADV1
    advance facility


219,146



263,898



236,808



285,226Financial institutions
    2010-ADV1
    advance facility














GSE MSR facility


14,345



18,272



15,733



18,951GSE ASAP+ facility


5,512



5,594



51,105



53,230GSE EAF facility


136,795



171,860



114,562



142,327Total notes payable

$
608,451


$
703,139


$
709,758


$
808,922  
 
   
 
   
 
   
 F-73




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   10.
    Indebtedness
    (continued) 
 
   
 
  2009-ADV1
 
 
  2010-ADV1
 
 
   
 
   
 
   
 
  Senior
    Unsecured Notes
 
 
   
 
   
 
  Nonrecourse
    DebtLegacy Assets
 
 
   
 F-74




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   10.
    Indebtedness
    (continued) 
 
   
 
  ABS
    Nonrecourse Debt
 
 
  ASC 825-10.
 
 
  Financial
    Covenants
 
 
   
 F-75




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
  11.
    General and
    Administrative 
 
   
  
 For the Three Months EndedMarch 31, 2011


March 31, 2010Depreciation and amortization

$
751


$
398Advertising


850



1,435Equipment


909



708Servicing


4,646



1,327Telecommunications


819



500Legal and professional fees


3,095



967Postage


1,517



1,031Stationary and supplies


1,002



483Travel


693



479Insurance and Other


1,282



1,392Total general and administrative expense

$
15,564


$
8,720  
 
  12.
    Fair Value
    Measurements 
 
   
 
   
 
   
 
  Cash and Cash Equivalents, Restricted Cash, Notes
    Payable
 
 
  Mortgage Loans Held for Sale
 
 F-76




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   12.
    Fair Value
    Measurements (continued) 
 
   
 
   
 
  Mortgage Loans Held for Investment, subject to nonrecourse
    debt
 
 
  Mortgage Loans Held for Investment, subject to ABS
    nonrecourse debt
 
 
  Mortgage Servicing Rights
 
 
  Real Estate Owned
 
 F-77




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   12.
    Fair Value
    Measurements (continued) 
 
   
 
  Derivative Instruments
 
 
  Unsecured Senior Notes
 
 
  Nonrecourse DebtLegacy Assets
 
 
  ABS Nonrecourse Debt
 
 
   
  
 March 31, 2011Recurring Fair Value MeasurementsTotal Fair Value


Level 1


Level 2


Level 3AssetsMortgage loans held for
    sale(1)

$
268,950


$



$
268,950


$
Mortgage loans held for investment, subject to ABS nonrecourse
    debt(1)


530,681











530,681Mortgage servicing
    rights(1)


151,159











151,159Other assets:IRLCs


6,699







6,699



Total assets

$
957,489


$



$
275,649


$
681,840LiabilitiesDerivative financial instrumentsInterest rate swaps

$
6,760


$



$
6,760


$
Forward MBS trades


964







964



Derivative financial instruments, subject to ABS nonrecourse debt


15,615







15,615



ABS nonrecourse
    debt(1)


489,321











489,321Total liabilities

$
512,660


$



$
23,339


$
489,321  
   
  (1)
    
    Based on the nature and risks of these assets and liabilities,
    the Company has determined that presenting them as a single
    class is appropriate. 
  F-78




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   12.
    Fair Value
    Measurements (continued) 
  
 December 31, 2010Total Fair


Recurring Fair Value MeasurementsValue


Level 1


Level 2


Level 3AssetsMortgage loans held for
    sale(1)

$
371,160


$



$
371,160


$
Mortgage loans held for investment, subject to ABS nonrecourse
    debt(1)


538,440











538,440Mortgage servicing
    rights(1)


145,062











145,062Other assets:IRLCs


4,703







4,703



Forward MBS trades


3,963







3,963



Total assets

$
1,063,328


$



$
379,826


$
683,502LiabilitiesDerivative financial instrumentsInterest rate swaps

$
7,801


$



$
7,801


$
Derivative financial instruments, subject to ABS nonrecourse debt


18,781







18,781



ABS nonrecourse
    debt(1)


496,692











496,692Total liabilities

$
523,274


$



$
26,582


$
496,692  
   
  (1)
    
    Based on the nature and risks of these assets and liabilities,
    the Company has determined that presenting them as a single
    class is appropriate. 
 F-79




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##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   12.
    Fair Value
    Measurements (continued) 
 
   
  
 ASSETSMortgage loansheld for investment,subject to ABS


Mortgage





ABS non-nonrecourse debt


servicing rights


Total assets


recourse debtTHREE MONTHS ENDED MARCH 31, 2011Beginning balance

$
538,440


$
145,062


$
683,502


$
496,692Transfers into Level 3














Transfers out of Level 3














Total gains or lossesIncluded in earnings (or changes in net assets)


11,472



(3,784
)


7,688



9,617Included in earnings (or changes in net assets)














Purchases, issuances, sales and settlementsPurchases














Issuances






9,881



9,881



Sales














Settlements


(19,231
)






(19,231
)


(16,988
)Ending balance

$
530,681


$
151,159


$
681,840


$
489,321YEAR ENDED DECEMBER 31, 2010Beginning
    balance(1)

$
928,891


$
104,174


$
1,033,065


$
884,846Transfers into Level 3














Transfers out of Level 3














Total gains or lossesIncluded in earnings (or changes in net assets)


71,239



(6,043
)


65,196



16,938Included in earnings (or changes in net assets)














Purchases, issuances, sales and settlementsPurchases






17,812



17,812



Issuances






26,253



26,253



Sales














Settlements


(461,690
)


2,866



(458,824
)


(405,092
)Ending balance

$
538,440


$
145,062


$
683,502


$
496,692  
   
  (1)
    
    Amounts include derecognition of previously retained beneficial
    interests and mortgage servicing rights upon adoption of
    ASC 810 related to consolidation of certain VIEs. 
 F-80




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   12.
    Fair Value
    Measurements (continued) 
 
   
  
 TotalNonrecurring Fair Value Measurements


Estimated


Total Gains (Losses)Level 1


Level 2


Level 3


Fair Value


Included in EarningsThree months ended March 31, 2011AssetsReal estate
    owned(1)

$



$



$
24,417


$
24,417


$
(2,651
)Total assets

$



$



$
24,417


$
24,417


$
(2,651
)Year ended December 31, 2010AssetsReal estate
    owned(1)

$



$



$
27,337


$
27,337


$
Total assets

$



$



$
27,337


$
27,337


$
  
   
  (1)
    
    Based on the nature and risks of these assets and liabilities,
    the Company has determined that presenting them as a single
    class is appropriate. 
 
   
  
 March 31, 2011

December 31 2010Carrying



CarryingAmount

Fair Value

Amount

Fair ValueFinancial assets:Cash and cash equivalents

$
48,420


$
48,420


$
21,223


$
21,223Restricted cash


73,100



73,100



91,125



91,125Mortgage loans held for sale


268,950



268,950



371,160



371,160Mortgage loans held for investment, subject to nonrecourse
    debtLegacy assets


262,268



242,416



266,840



239,035Mortgage loans held for investment, subject to ABS nonrecourse
    debt


530,681



530,681



538,440



538,440Derivative instruments


6,699



6,699



8,666



8,666Financial liabilities:Notes payable


608,451



608,451



709,758



709,758Unsecured senior notes


244,410



255,158



244,061



244,375Derivative financial instruments


7,724



7,724



7,801



7,801Derivative instruments, subject to ABS nonrecourse debt


15,615



15,615



18,781



18,781Nonrecourse debt


133,592



134,696



138,662



140,197ABS nonrecourse debt


489,321



489,321



496,692



496,692  
 
  13.
    Capital
    Requirements 
 
   
 F-81




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   13.
    Capital
    Requirements (continued) 
 
   
 
   
 
   
 
  14.
    Business Segment
    Reporting 
 
   
 
   
  
 Three Months Ended March 31, 2011Operating


Legacy PortfolioServicing


Originations


Segments


and Other


Eliminations


ConsolidatedREVENUES:Servicing fee income

$
58,724


$



$
58,724


$
567


$
(1,824
)

$
57,467Other fee income


2,394



4,044



6,438



781







7,219Total fee income


61,118



4,044



65,162



1,348



(1,824
)


64,686Gain on mortgage loans held for sale






20,569



20,569







(63
)


20,506Total revenues


61,118



24,613



85,731



1,348



(1,887
)


85,192Total expenses and impairments


40,407



21,812



62,219



5,965



(63
)


68,121Other income (expense):Interest income


967



2,603



3,570



12,924



1,824



18,318Interest expense


(13,457
)


(1,981
)


(15,438
)


(9,930
)






(25,368
)Fair value changes in ABS securitizations














(2,652
)






(2,652
)Total other income (expense)


(12,490
)


622



(11,868
)


342



1,824



(9,702
)NET INCOME

$
8,221


$
3,423


$
11,644


$
(4,275
)

$



$
7,369Depreciation and amortization

$
372


$
269


$
641


$
110


$



$
751Total assets


720,762



306,170



1,026,932



841,323







1,868,255  
  F-82




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   14.
    Business Segment
    Reporting (continued) 
  
 Three Months Ended March 31, 2010Operating


Legacy PortfolioServicing


Originations


Segments


and Other


Eliminations


ConsolidatedREVENUES:Servicing fee income

$
35,766


$



$
35,766


$
458


$
(2,134
)

$
34,090Other fee income


1,784



1,666



3,450



1,210







4,660Total fee income


37,550



1,666



39,216



1,668



(2,134
)


38,750Gain on mortgage loans held for sale






12,446



12,446







(17
)


12,429Total revenues


37,550



14,112



51,662



1,668



(2,151
)


51,179Total expenses and impairments


21,282



15,937



37,219



2,887



(17
)


40,089Other income (expense):Interest income


220



1,629



1,849



27,350



2,134



31,333Interest expense


(10,646
)


(1,308
)


(11,954
)


(17,181
)






(29,135
)Loss on interest rate swaps and caps


(2,779
)






(2,779
)










(2,779
)Fair value changes in ABS securitizations














(9,777
)






(9,777
)Total other income (expense)


(13,205
)


321



(12,884
)


392



2,134



(10,358
)NET INCOME (LOSS)

$
3,063


$
(1,504
)

$
1,559


$
(827
)

$



$
732Depreciation and amortization

$
214


$
141


$
355


$
43


$



$
398  
 
  15.
    Guarantor
    Financial Statement Information 
 
  Form S-4
 
 F-83




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   15.
    Guarantor
    Financial Statement Information (continued) 
 
  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING
    BALANCE SHEET
  MARCH 31, 2011
  (In
    Thousands)
 
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedAssetsCash and cash equivalents

$
47,843


$
577


$



$



$
48,420Restricted cash


52,391







20,709







73,100Accounts receivable, net


449,498







4,737







454,235Mortgage loans held for sale


268,950















268,950Mortgage loans held for investment, subject to nonrecourse
    debtLegacy Asset, net


6,160







256,108







262,268Mortgage loans held for investment, subject to ABS nonrecourse
    debt (at fair value)










530,681







530,681Investment in debt
    securitiesavailable-for-sale


850











(850
)


Investment in subsidiaries


161,172











(161,172
)


Receivables from affiliates






63,634



122,834



(178,926
)


7,542Mortgage servicing rights


151,159















151,159Property and equipment, net


10,420



835











11,255Real estate owned, net


466







23,951







24,417Other assets


36,227







1







36,228Total Assets

$
1,185,136


$
65,046


$
959,021


$
(340,948
)

$
1,868,255Liabilities and members equityNotes payable

$
389,305


$



$
219,146


$



$
608,451Unsecured senior notes


244,410















244,410Payables and accrued liabilities


102,589







1,310







103,899Payables to affiliates


178,926











(178,926
)


Derivative financial instruments


964







6,760







7,724Derivative financial instruments, subject to ABS nonrecourse debt










15,615







15,615Nonrecourse debt  Legacy Assets










133,592







133,592ABS nonrecourse debt (at fair value)










490,171



(850
)


489,321Total liabilities


916,194







866,594



(179,776
)


1,603,012Total members equity


268,942



65,046



92,427



(161,172
)


265,243Total liabilities and members equity

$
1,185,136


$
65,046


$
959,021


$
(340,948
)

$
1,868,255  
 F-84




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   15.
    Guarantor
    Financial Statement Information (continued) 
 
  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING
    STATEMENT OF OPERATIONS
  FOR THE THREE
    MONTHS ENDED MARCH 31, 2011
  (In
    Thousands)
 
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedRevenues:Servicing fee income

$
58,747


$
544


$



$
(1,824
)

$
57,467Other fee income


4,061



2,687



471







7,219Total fee income


62,808



3,231



471



(1,824
)


64,686Gain on mortgage loans held for sale


20,506















20,506Total Revenues


83,314



3,231



471



(1,824
)


85,192Expenses and impairments:Salaries, wages, and benefits


46,130



793











46,923General and administrative


14,940



621



3







15,564Provision for loan losses


724







404







1,128Loss on foreclosed real estate


245







2,002







2,247Occupancy


2,204



55











2,259Total expenses and impairments


64,243



1,469



2,409







68,121Other income (expense):Interest income


3,619



(5
)


12,880



1,824



18,318Interest expense


(13,595
)






(11,773
)






(25,368
)Loss on interest rate swaps and caps


















Fair value changes in ABS securitizations










(2,905
)


253



(2,652
)Gain/(loss) from subsidiaries


2,930











(2,930
)


Total other income (expense)


(7,046
)


(5
)


(1,798
)


(853
)


(9,702
)Net income/(loss)

$
12,025


$
1,757


$
(3,736
)

$
(2,677
)

$
7,369  
 F-85




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   15.
    Guarantor
    Financial Statement Information (continued) 
 
  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING
    STATEMENT OF CASH FLOWS
  FOR THE THREE
    MONTHS ENDED MARCH 31, 2011
  (In
    Thousands)
 
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedOperating activities:Net income/(loss)

$
12,025


$
1,757


$
(3,736
)

$
(2,677
)

$
7,369Adjustments to reconcile net income/(loss) to net cash provided
    by (used in) operating activities:Loss from subsidiaries


(2,930
)










2,930



Share-based compensation


5,263















5,263Gain on mortgage loans held for sale


(20,506
)














(20,506
)Fair value changes in ABS securitizations










2,905



(253
)


2,652Provision for loan losses


724







404







1,128Loss on foreclosed real estate


245







2,002







2,247Loss/(gain) on derivative financial instruments










(902
)






(902
)Depreciation and amortization


751















751Change in fair value of mortgage servicing rights


3,784















3,784Amortization of debt discount


2,241







825







3,066Amortization of premiums/discounts


(62
)






(1,198
)






(1,260
)Mortgage Loans originated and purchased, net of fees


(654,127
)














(654,127
)Cost of loans sold, net of fees


765,695















765,695Principal Payments/Prepayments Received and other changes in
    mortgage loans originated as held for sale


2,379







564







2,943Changes in assets and liabilities:Accounts receivable


(14,402
)






(762
)






(15,164
)Payables to affiliates


(6,569
)


(1,499
)


9,519







1,451Other assets


(1,649
)














(1,649
)Accounts payable and accrued liabilities


28,804







41







28,845Net cash provided by/(used) in operating activities


121,666



258



9,662







131,586Investing activities:Principal payments received and other changes on mortgage loans
    held for investment, subject to ABS nonrecourse debt










2,987







2,987Proceeds from sales of real estate owned


144







12,359







12,503Acquisition of equity method investment


(6,600
)














(6,600
)Property and equipment additions, net of disposals


(3,612
)














(3,612
)Net cash provided by/(used) in investing activities


(10,068
)






15,346







5,278 F-86




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
   15.
    Guarantor
    Financial Statement Information (continued)  Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedFinancing activities:Transfers to/from restricted cash


5,188







12,837







18,025Decrease in notes payable, net


(83,645
)






(17,662
)






(101,307
)Repayment of non-recourse debtLegacy assets










(5,895
)






(5,895
)Repayment of ABS non-recourse debt










(14,288
)






(14,288
)Debt financing costs


(2,302
)














(2,302
)Distribution to parent


(3,900
)














(3,900
)Net cash provided by financing activities


(84,659
)






(25,008
)






(109,667
)Net increase (decrease) in cash


26,939



258











27,197Cash and cash equivalents at beginning of period


20,904



319











21,223Cash and cash equivalents at end of period

$
47,843


$
577


$



$



$
48,420  
 F-87




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   15.
    Guarantor
    Financial Statement Information (continued) 
 
   NATIONSTAR
    MORTGAGE LLC CONSOLIDATING BALANCE SHEET
 
 
  DECEMBER 31,
    2010
  (In Thousands)
 
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedASSETSCash and cash equivalents

$
20,904


$
319


$



$



$
21,223Restricted cash


57,579







33,546







91,125Accounts receivable, net


435,096







3,975







439,071Mortgage loans held for sale


371,160















371,160Mortgage loans held for investment, subject to nonrecourse debt,
    Legacy Assets, net


5,536







261,304







266,840Mortgage loans held for investment, subject to ABS nonrecourse
    debt (at fair value)










538,440







538,440Investment in debt
    securitiesavailable-for-sale


597











(597
)


Investment in subsidiaries


158,276











(158,276
)


Receivables from affiliates






62,171



132,353



(185,531
)


8,993Mortgage servicing rights


145,062















145,062Property and equipment, net


7,559



835











8,394Real estate owned, net


323







27,014







27,337Other assets


29,536















29,536Total Assets

$
1,231,628


$
63,325


$
996,632


$
(344,404
)

$
1,947,181LIABILITIES AND MEMBERS EQUITYNotes payable

$
472,950


$



$
236,808


$



$
709,758Unsecured senior notes


244,061















244,061Payables and accrued liabilities


73,785







1,269







75,054Payables to affiliates


185,531











(185,531
)


Derivative financial instruments










7,801







7,801Derivative financial instruments, subject to ABS nonrecourse debt










18,781







18,781Nonrecourse debtLegacy Assets










138,662







138,662ABS nonrecourse debt (at fair value)










497,289



(597
)


496,692Total liabilities


976,327







900,610



(186,128
)


1,690,809Total members equity


255,301



63,325



96,022



(158,276
)


256,372Total liabilities and members equity

$
1,231,628


$
63,325


$
996,632


$
(344,404
)

$
1,947,181  
 F-88




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   15.
    Guarantor
    Financial Statement Information (continued) 
 
  NATIONSTAR
    MORTGAGE LLC
    CONSOLIDATING STATEMENT OF OPERATIONS
 
 
  FOR THE THREE
    MONTHS ENDED MARCH 31, 2010
  (In
    Thousands)
 
  
 Non-Issuer


Guarantor


Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedRevenues:Servicing fee income

$
35,687


$
536


$



$
(2,133
)

$
34,090Other fee income


2,850



1,810











4,660Total fee income


38,537



2,346







(2,133
)


38,750Gain on mortgage loans held for sale


12,429















12,429Total Revenues


50,966



2,346







(2,133
)


51,179Expenses and impairments:Salaries, wages, and benefits


28,955



534











29,489General and administrative


8,541



174



5







8,720Loss on foreclosed real estate


(21
)














(21
)Occupancy


1,866



35











1,901Total expenses and impairments


39,341



743



5







40,089Other income (expense):Interest income


3,899







25,301



2,133



31,333Interest expense


(11,233
)






(17,902
)






(29,135
)Loss on interest rate swaps and caps










(2,779
)






(2,779
)Fair value changes in ABS securitizations










(9,777
)






(9,777
)Gain/(loss) from subsidiaries


(3,559
)










3,559



Total other income (expense)


(10,893
)






(5,157
)


5,692



(10,358
)Net income/(loss)

$
732


$
1,603


$
(5,162
)

$
3,559


$
732  
 F-89




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
   15.
    Guarantor
    Financial Statement Information (continued) 
 
  NATIONSTAR
    MORTGAGE LLC
  CONSOLIDATING
    STATEMENT OF CASH FLOWS
  FOR THE THREE
    MONTHS ENDED MARCH 31, 2010
 
 
  (In Thousands)
 
   
 Issuer


Guarantor


Non-Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedOperating activities:Net income/(loss)

$
732


$
1,603


$
(5,162
)

$
3,559


$
732Adjustments to reconcile net income/(loss) to net cash provided
    by (used in) operating activities:Loss from subsidiaries


3,559











(3,559
)


Share-based compensation


210















210Gain on mortgage loans held for sale


(12,429
)














(12,429
)Fair value changes in ABS securitizations










9,777







9,777Loss on foreclosed real estate


(21
)














(21
)Loss on interest rate swaps and caps










2,779







2,779Depreciation and amortization


398















398Change in fair value of mortgage servicing rights


4,600















4,600Amortization of debt discount


3,975







1,589







5,564Amortization of premiums/discounts


(1,466
)














(1,466
)Mortgage Loans originated and purchased, net of fees


(512,615
)














(512,615
)Cost of loans sold, net of fees


492,333















492,333Principal Payments/Prepayments Received and other changes in
    mortgage loans originated as held for sale


5,319







(10,027
)






(4,708
)Changes in assets and liabilities:Accounts receivable


(22,267
)


5



(46,248
)






(68,510
)Payables to affiliates


(42,141
)


(1,563
)


45,982







2,278Other assets


(2,211
)














(2,211
)Accounts payable and accrued liabilities


659



15



(24
)






650Net cash provided by/(used) in operating activities


(81,365
)


60



(1,334
)






(82,639
)Investing activities:Principal payments received and other changes on mortgage loans
    held for investment, subject to ABS nonrecourse debt










713







713Proceeds from sales of real estate owned


762







29,633







30,395Property and equipment additions, net of disposals


(367
)














(367
)Net cash provided by/(used) in investing activities


395







30,346







30,741 
 F-90




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
   15.
    Guarantor
    Financial Statement Information (continued)  Issuer


Guarantor


Non-Guarantor(Parent)


(Subsidiaries)


(Subsidiaries)


Eliminations


ConsolidatedFinancing activities:Transfers to/from restricted cash


899







12,709







13,608Issuance of unsecured senior notes, net of issue discount


243,012















243,012Decrease in notes payable, net


(169,679
)






5,040







(164,639
)Repayment of non-recourse debt  Legacy assets










(11,348
)






(11,348
)Repayment of ABS non-recourse debt


(146
)






(35,413
)






(35,559
)Debt financing costs


(11,270
)














(11,270
)Net cash provided by financing activities


62,816







(29,012
)






33,804Net increase (decrease) in cash


(18,154
)


60











(18,094
)Cash and cash equivalents at beginning of period


41,243



402











41,645Cash and cash equivalents at end of period

$
23,089


$
462


$



$



$
23,551  
 
  16.
    Related Party
    Disclosures 
 
  sub-servicer sub-servicing
 
 
   
 F-91




---



##### Table of Contents



Nationstar
    Mortgage LLC and Subsidiaries
  Notes to
    Consolidated Financial Statements (continued)
 (Unaudited)
 
 
  17.
    Subsequent
    Event 
 
   
 
   
 
  18.
    Unaudited Pro
    Forma Tax Information 
 
   
 F-92




---



##### Table of Contents



PART II
  INFORMATION NOT
    REQUIRED IN PROSPECTUS
  Item 13.
    Other Expenses
    of Issuance and Distribution.    SEC registration fee

$FINRA filing feeNYSE listing feePrinting and engraving expensesLegal fees and expensesAccounting fees and expensesTransfer agent and registrar fees and expensesBlue Sky fees and expensesMiscellaneousTotal

$     Item 14.
    Indemnification
    of Directors and Officers.       II-1




---



##### Table of Contents



case-by-case
        Item 15.
    Recent Sales
    of Unregistered Securities.   II-2




---



##### Table of Contents



Item 16.
    Exhibits and
    Financial Statement Schedules.      Item 17.
    Undertakings.        
    For purposes of determining any liability under the Securities
    Act of 1933, the information omitted from the form of prospectus
    filed as part of this registration statement in reliance upon
    Rule 430A and contained in a form of prospectus filed by us
    pursuant to Rule 424(b)(1) or (4) or 497(h) under the
    Securities Act shall be deemed to be part of this registration
    statement as of the time it was declared effective.
    For the purpose of determining any liability under the
    Securities Act of 1933, each post-effective amendment that
    contains a form of prospectus shall be deemed to be a new
    registration statement relating to the securities offered
    therein, and the offering of such securities at that time shall
    be deemed to be the initial bona fide offering thereof.      *
    
    Paragraph references correspond to those of
    Regulation S-K,
    Item 512. II-3




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##### Table of Contents



SIGNATURES
 
   
    
  By:
    Anthony H. BaroneTitle:
    Chief Executive Officer    
 Name

Title

Date/s/  Anthony
    H. BaroneAnthony
    H. Barone

Chief Executive Officer, President and Director
    (principal executive officer)

July 6, 2011/s/  Jay
    BrayJay
    Bray

Chief Financial Officer
    (principal financial and accounting officer)

July 6, 2011/s/  Peter
    SmithPeter
    Smith

Director

July 6, 2011  
 II-4




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##### Table of Contents



EXHIBIT INDEX
  
 ExhibitNumber

Description1
.1*

Form of Underwriting Agreement3
.1*

Form of Amended and Restated Certificate of Incorporation of
    Nationstar Mortgage Holdings Inc.3
.2*

Form of Amended and Restated Bylaws of Nationstar Mortgage
    Holdings Inc.4
.1

Form of Stockholders Agreement by and among Nationstar Mortgage
    Holdings Inc and FIF HE Holdings LLC.5
.1*

Opinion of Cleary Gottlieb Steen & Hamilton LLP.10
.1

Amended and Restated Servicer Advance Early Reimbursement
    Addendum, dated as of August 16, 2010, between Nationstar
    Mortgage LLC and Fannie Mae (incorporated by reference to
    Exhibit 10.1 to Nationstar Mortgage LLCs Registration
    Statement on Form S-4 filed with the SEC on December 23, 2010).10
.2

Fifth Amended and Restated Master Repurchase Agreement, dated as
    of January 27, 2010, between The Royal Bank of Scotland plc, as
    buyer, and Nationstar Mortgage LLC, as seller (incorporated by
    reference to Exhibit 10.2 to Nationstar Mortgage LLCs
    Registration Statement on Form S-4 filed with the SEC on
    December 23, 2010).10
.3

Amendment Number One to Fifth Amended and Restated Master
    Repurchase Agreement, and Amendment Number One to Fifth Amended
    and Restated Pricing Side Letter, both dated as of April 6,
    2010, between The Royal Bank of Scotland Plc and Nationstar
    Mortgage LLC. (incorporated by reference to Exhibit 10.3 to
    Amendment No. 3 to Nationstar Mortgage LLCs Registration
    Statement on Form S-4 filed with the SEC on April 27, 2011).10
.4

Amendment Number Two to Fifth Amended and Restated Master
    Repurchase Agreement, and Amendment Number One to Fifth Amended
    and Restated Pricing Side Letter, both dated as of February 25,
    2011, between The Royal Bank of Scotland Plc and Nationstar
    Mortgage LLC. (incorporated by reference to Exhibit 10.4 to
    Amendment No. 3 to Nationstar Mortgage LLCs Registration
    Statement on Form S-4 filed with the SEC on April 27, 2011).10
.5

Subservicing Agreement, dated as of October 29, 2010, between
    Fannie Mae and Nationstar Mortgage LLC (incorporated by
    reference to Exhibit 10.3 to Amendment No. 1 to Nationstar
    Mortgage LLCs Registration Statement on Form S-4 filed
    with the SEC on February 9, 2011).10
.6

Strategic Relationship Agreement, dated as of December 16, 2009,
    between Fannie Mae and Nationstar Mortgage LLC (incorporated by
    reference to Exhibit 10.4 to Nationstar Mortgage LLCs
    Registration Statement on Form S-4 filed with the SEC on
    December 23, 2010).10
.7

Subservicing Agreement, dated as of February 1, 2011, among
    MorEquity, Inc., American General Financial Services of
    Arkansas, Inc. and American General Home Equity, Inc. as owners
    and as servicers, and Nationstar Mortgage LLC, as subservicer.
    (incorporated by reference to Exhibit 10.5 to Amendment No. 2 to
    Nationstar Mortgage LLCs Registration Statement on Form
    S-4 filed with the SEC on March 28, 2011).10
.8

Subservicing Agreement (American General Mortgage Loan Trust
    2006-1), dated as of February 1, 2011, between MorEquity, Inc.,
    as servicer, and Nationstar Mortgage LLC, as subservicer
    (incorporated by reference to Exhibit 10.6 to Amendment No. 2 to
    Nationstar Mortgage LLCs Registration Statement on Form
    S-4 filed with the SEC on March 28, 2011).10
.9

Subservicing Agreement (American General Mortgage Loan Trust
    2010-1), dated as of February 1, 2011, between MorEquity, Inc.,
    as servicer, and Nationstar Mortgage LLC, as subservicer.
    (incorporated by reference to Exhibit 10.7 to Amendment No. 2 to
    Nationstar Mortgage LLCs Registration Statement on Form
    S-4 filed with the SEC on March 28, 2011).10
.10

Sale and Servicing Agreement, dated as of April 6, 2010, between
    The Financial Asset Securities Corp., as Depositor, Centex Home
    Equity Company, LLC, as Originator and Servicer, Newcastle
    Mortgage Securities Trust 2006-1, as Issuer, and JPMorgan Chase
    Bank, N.A. (incorporated by reference to Exhibit 10.10 to
    Amendment No. 5 to Nationstar Mortgage LLCs Registration
    Statement on Form S-4 filed with the SEC on June 6, 2011). 
 II-5




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##### Table of Contents



ExhibitNumber

Description10
.11

Sale and Servicing Agreement, dated as of July 12, 2007, between
    Bear Stearns Asset-Backed Securities I LLC, as Depositor,
    Nationstar Mortgage LLC, as Servicer, Newcastle Mortgage
    Securities Trust 2007-1, as Issuing Entity, Wells Fargo Bank,
    N.A., as Master Servicer, Securities Administrator and
    Custodian, and The Bank of New York, as Indenture Trustee.
    (incorporated by reference to Exhibit 10.11 to Amendment No. 5
    to Nationstar Mortgage LLCs Registration Statement on Form
    S-4 filed with the SEC on June 6, 2011).10
.12

Subservicing Agreement, effective as of June 21, 2011, between
    First Tennessee Bank National Association, as Owner and Master
    Servicer, and Nationstar Mortgage LLC, as Servicer and
    Subservicer (incorporated by reference to Exhibit 10.12 to
    Amendment No. 6 to Nationstar Mortgage LLCs Registration
    Statement on Form S-4 filed with the SEC on June 30, 2011).10
.13

Employment Agreement, dated as of January 29, 2008, by and
    between Nationstar Mortgage LLC and Robert L. Appel
    (incorporated by reference to Exhibit 10.5 to Nationstar
    Mortgage LLCs Registration Statement on Form S-4 filed
    with the SEC on December 23, 2010).10
.14

Amendment, dated as of September 17, 2010, to Employment
    Agreement dated January 29, 2008 by and between Nationstar
    Mortgage LLC and Robert L. Appel (incorporated by reference to
    Exhibit 10.6 to Nationstar Mortgage LLCs Registration
    Statement on Form S-4 filed with the SEC on December 23, 2010).10
.15

Employment Agreement, dated as of February 19, 2009, by and
    between Nationstar Mortgage LLC and Douglas Krueger
    (incorporated by reference to Exhibit 10.7 to Nationstar
    Mortgage LLCs Registration Statement on Form S-4 filed
    with the SEC on December 23, 2010).10
.16

Employment Agreement, dated as of September 17, 2010, by and
    between Nationstar Mortgage LLC and Anthony H. Barone
    (incorporated by reference to Exhibit 10.8 to Nationstar
    Mortgage LLCs Registration Statement on Form S-4 filed
    with the SEC on December 23, 2010).10
.17

Employment Agreement, dated as of September 17, 2010, by and
    between the Company and Jesse K. Bray (incorporated by reference
    to Exhibit 10.9 to Nationstar Mortgage LLCs Registration
    Statement on Form S-4 filed with the SEC on December 23, 2010).10
.18

Employment Agreement, dated as of September 17, 2010, by and
    between Nationstar Mortgage LLC and Amar Patel (incorporated by
    reference to Exhibit 10.10 to Nationstar Mortgage LLCs
    Registration Statement on Form S-4 filed with the SEC on
    December 23, 2010).10
.19

Form of Restricted Series 1 Preferred Unit Award Agreement under
    FIF HE Holdings LLC Fifth Amended and Restated Limited Liability
    Company Agreement (incorporated by reference to Exhibit 10.11 to
    Nationstar Mortgage LLCs Registration Statement on Form
    S-4 filed with the SEC on December 23, 2010).10
.20

Form of Series 1 Class A Unit Award Agreement under FIF HE
    Holdings LLC Fifth Amended and Restated Limited Liability
    Company (incorporated by reference to Exhibit 10.12 to
    Nationstar Mortgage LLCs Registration Statement on Form
    S-4 filed with the SEC on December 23, 2010).10
.21

Form of Series 2 Class A Unit Award Agreement under FIF HE
    Holdings LLC Fifth Amended and Restated Limited Liability
    Company (incorporated by reference to Exhibit 10.13 to
    Nationstar Mortgage LLCs Registration Statement on Form
    S-4 filed with the SEC on December 23, 2010).10
.22

Nationstar Mortgage LLC Annual Incentive Compensation Plan
    (incorporated by reference to Exhibit 10.14 to Nationstar
    Mortgage LLCs Registration Statement on Form S-4 filed
    with the SEC on December 23, 2010).10
.23

Nationstar Mortgage LLC Incentive Program Summary (incorporated
    by reference to Exhibit 10.15 to Nationstar Mortgage
    LLCs Registration Statement on Form S-4 filed with the SEC
    on December 23, 2010).10
.24

Nationstar Mortgage LLC Long-Term Incentive Plan for Mr.
    Krueger. (incorporated by reference to Exhibit 10.16 to
    Nationstar Mortgage LLCs Registration Statement on Form
    S-4 filed with the SEC on December 23, 2010). 
 II-6




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##### Table of Contents



ExhibitNumber

Description10
.25

Fifth Amended and Restated Limited Liability Company Agreement
    of FIF HE HOLDINGS LLC (incorporated by reference to Exhibit
    10.25 to Amendment No. 6 to Nationstar Mortgage LLCs
    Registration Statement on Form S-4 filed with the SEC on June
    30, 2011).21
.1*

Subsidiaries of the Registrants.23
.1

Consent of Ernst & Young LLP, Independent Registered Public
    Accounting Firm.23
.2*

Consent of Cleary Gottlieb Steen & Hamilton LLP (included
    in Exhibit 5.1).  
    *
    
    To be filed by amendment II-7