Note 18  Business Segment Reporting Our business segments reflect the internal reporting that we use to evaluate operating performance of services and to assess the allocation of our resources. A brief description of our current business segments is as follows: Servicing. This segment is primarily comprised of our core residential mortgage servicing business and currently accounts for most of our total revenues. We provide residential and commercial mortgage loan servicing, special servicing and asset management services. We earn fees for providing these services to owners of the mortgage loans and foreclosed real estate. In most cases, we provide these services either because we purchased the MSRs from the owner of the mortgage, retained the MSRs on the sale or securitization of residential mortgage loans or because we entered into a subservicing or special servicing agreement with the entity that owns the MSR. Our residential servicing portfolio includes conventional, government-insured and non-Agency loans. Non-Agency loans include subprime loans, which represent residential loans that generally did not qualify under GSE guidelines or have subsequently become delinquent. Originations. The Originations segment (previously labeled as Lending) purchases and originates conventional and government-insured residential forward and reverse mortgage loans through multiple channels. The loans are typically sold shortly after origination into a liquid market on a servicing retained (securitization) or servicing released (sale to a third party) basis. We originate forward mortgage loans directly with customers (recapture channel) as well as through correspondent lending arrangements since the second quarter of 2019. We originate reverse mortgage loans in all three channels, through our correspondent lending arrangements, broker relationships (wholesale) and retail channels. In addition to our originated MSRs, we acquire MSRs through multiple channels, including flow purchase agreements, the GSE Co-issue and Cash Window programs and bulk MSR purchases, and we acquire new subservicing through our enterprise sales. The pricing and acquisition decisions are made relative to other originated MSR channels. Accordingly, as part of our internal management reporting we renamed the Lending segment as Originations effective in the first quarter 2020, without any other changes to our operating and reporting segments. Corporate Items and Other. Corporate Items and Other includes revenues and expenses of corporate support services, CR Limited (CRL), our wholly-owned captive reinsurance subsidiary, discontinued operations and inactive entities, business activities that are individually insignificant, revenues and expenses that are not directly related to other reportable segments, interest income on short-term investments of cash and interest expense on corporate debt. Corporate Items and Other also includes severance, retention, facility-related and other expenses incurred in 2019 and 2020 related to our cost re-engineering plan and initiatives. Our cash balances are included in Corporate Items and Other. CRL provides re-insurance related to coverage on foreclosed real estate properties owned or serviced by us. We allocate a portion of interest income to each business segment, including interest earned on cash balances. We also allocate certain expenses incurred by corporate support services that are not directly attributable to a segment to each business segment. Beginning in 2020, we updated our methodology to allocate overhead costs incurred by corporate support services to the Servicing and Originations segments which now incorporates the utilization of various measurements primarily based on time studies, personnel volumes and service consumption levels. In 2019, corporate support services costs were primarily allocated based on relative segment size. Support services costs not allocated to the Servicing and Originations segments are retained in the Corporate Items and Other segment along with certain other costs including certain litigation and settlement related expenses or recoveries, costs related to our re-engineering plan, and other costs related to operating as a public company. Interest expense on direct asset-backed financings are recorded in the respective Servicing and Originations segments, while interest expense on the SSTL and Senior Notes is recorded in Corporate Items and Other and is not allocated. Financial information for our segments is as follows: Three Months Ended June 30, 2020 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 180,436 $ 45,545 $ 1,043 $ 227,024 MSR valuation adjustments, net (36,604 ) 13,170  (23,434 ) Operating expenses (1) 82,740 28,750 33,319 144,809 Other (expense) income: Interest income 1,438 1,874 254 3,566 Interest expense (12,890 ) (2,399 ) (11,471 ) (26,760 ) Pledged MSR liability expense (41,714 )  28 (41,686 ) Other 2,459 (1 ) (2,515 ) (57 ) Other expense, net (50,707 ) (526 ) (13,704 ) (64,937 ) Income (loss) before income taxes $ 10,385 $ 29,439 $ (45,980 ) $ (6,156 ) Three Months Ended June 30, 2019 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 242,510 $ 28,794 $ 3,034 $ 274,338 MSR valuation adjustments, net (147,199 ) (69 )  (147,268 ) Operating expenses (1) 142,888 20,957 20,381 184,226 Other (expense) income: Interest income 1,872 1,546 419 3,837 Interest expense (11,261 ) (1,399 ) (15,981 ) (28,641 ) Pledged MSR liability expense (2,930 )   (2,930 ) Other 890 444 (777 ) 557 Other (expense) income, net (11,429 ) 591 (16,339 ) (27,177 ) Income (loss) before income taxes $ (59,006 ) $ 8,359 $ (33,686 ) $ (84,333 ) Six Months Ended June 30, 2020 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 393,991 $ 83,192 $ 3,683 $ 480,866 MSR valuation adjustments, net (211,040 ) 13,486  (197,554 ) Expenses (1) 163,213 55,708 63,102 282,023 Other (expense) income: Interest income 3,324 4,140 1,497 8,961 Interest expense (26,557 ) (5,260 ) (24,925 ) (56,742 ) Pledged MSR liability expense (48,337 )  57 (48,280 ) Other 6,121 (30 ) (4,820 ) 1,271 Other expense, net (65,449 ) (1,150 ) (28,191 ) (94,790 ) Income (loss) before income taxes $ (45,711 ) $ 39,820 $ (87,610 ) $ (93,501 ) Six months ended June 30, 2019 Results of Operations Servicing Originations Corporate Items and Other Business Segments Consolidated Revenue $ 501,784 $ 69,885 $ 6,557 578,226 MSR valuation adjustments, net (256,113 ) (153 )  (256,266 ) Expenses (1) (2) 299,871 42,204 13,258 355,333 Other (expense) income: Interest income 4,165 3,095 1,135 8,395 Interest expense (22,003 ) (3,067 ) (30,060 ) (55,130 ) Pledged MSR liability expense (46,886 )   (46,886 ) Other 2,416 663 (1,502 ) 1,577 Other (expense) income, net (62,308 ) 691 (30,427 ) (92,044 ) Income (loss) before income taxes $ (116,508 ) $ 28,219 $ (37,128 ) $ (125,417 ) (1) Compensation and benefits expense in the Corporate Items and Other segment for the three and six months ended June 30, 2020 and 2019 includes $1.3 million and $1.5 million , and $0.8 million and $19.2 million , respectively, of severance expense attributable to PHH integration-related headcount reductions of primarily U.S.-based employees in 2019, as well as our overall efforts to reduce costs. (2) Included in the Corporate Items and Other segment for the six months ended June 30, 2019 , we recorded in Professional services expense a recovery from a service provider of $30.7 million during the first quarter of 2019 of amounts previously recognized as expense. Total Assets Servicing Originations Corporate Items and Other Business Segments Consolidated June 30, 2020 $ 2,835,486 $ 6,965,683 $ 509,269 $ 10,310,438 December 31, 2019 $ 3,378,515 $ 6,459,367 $ 568,317 $ 10,406,199 June 30, 2019 $ 3,195,218 $ 5,978,325 $ 454,250 $ 9,627,793 Depreciation and Amortization Expense Servicing Originations Corporate Items and Other Business Segments Consolidated Three months ended June 30, 2020 Depreciation expense $ 218 $ 34 $ 6,844 $ 7,096 Amortization of debt discount   (286 ) (286 ) Amortization of debt issuance costs 116  1,689 1,805 Three months ended June 30, 2019 Depreciation expense $ 761 $ 46 $ 10,205 $ 11,012 Amortization of debt discount   350 350 Amortization of debt issuance costs   751 751 Six Months Ended June 30, 2020 Depreciation expense $ 433 $ 71 $ 10,589 $ 11,093 Amortization of debt discount   643 643 Amortization of debt issuance costs 228  3,310 3,538 Six months ended June 30, 2019 Depreciation expense $ 1,569 $ 81 $ 17,913 $ 19,563 Amortization of debt discount   701 701 Amortization of debt issuance costs   1,451 1,451