Consolidated Balance Sheets (Parenthetical) - USD ($) |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Statement of Financial Position [Abstract] | ||
Servicing asset at fair value, amount | $ 2,703,000,000 | $ 3,496,000,000 |
Advances and other receivables, reserves | 208,000,000 | 175,000,000 |
Purchase discount, net | 127,000,000 | 114,000,000 |
Accumulated depreciation, depletion and amortization, property, plant, and equipment | $ 96,000,000 | $ 55,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (shares) | 1,000,000 | 1,000,000 |
Liquidation preference | $ 10 | $ 10 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (shares) | 92,000,000.0 | 91,100,000 |
Treasury stock (in shares) | 2,600,000 | 0 |
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Aug. 01, 2018 |
Jul. 31, 2018 |
Dec. 31, 2017 |
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Statement of Cash Flows [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ 695 | $ 329 | $ 242 | $ 166 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted cash | 218 | 283 | 319 | 430 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cash, cash equivalents and restricted cash | $ 913 | [1] | $ 612 | [1] | $ 561 | [1] | $ 1,623 | $ 596 | [1] | $ 575 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nature of Business and Basis of Presentation |
12 Months Ended |
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Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | 1. Nature of Business and Basis of Presentation Nature of Business Mr. Cooper Group Inc. collectively with its consolidated subsidiaries, (“Mr. Cooper,” the “Company,” “we,” “us” or “our”) provides servicing, origination and transaction-based services related to single family residences throughout the United States with operations under its primary brands: Mr. Cooper® and Xome®. Mr. Cooper is one of the largest home loan servicers in the country focused on delivering a variety of servicing and lending products, services and technologies. Xome provides technology and data enhanced solutions to homebuyers, home sellers, real estate agents and mortgage companies. The Company has provided a glossary of terms, which defines certain industry-specific and other terms that are used herein, in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Form 10-K. Mr. Cooper, which was previously known as WMIH Corp. (“WMIH”), is a corporation duly organized and existing under the laws of the State of Delaware since May 11, 2015. On July 31, 2018, Wand Merger Corporation, a wholly owned subsidiary of WMIH merged with and into Nationstar Mortgage Holdings Inc. (“Nationstar”), with Nationstar continuing as a wholly owned subsidiary of WMIH (the “Merger”). Prior to the Merger, WMIH had limited operations other than its reinsurance business that operated in runoff mode and focused on identifying and consummating an accretive acquisition transaction across a broad array of industries, with a primary focus on the financial institutions sector. As a result of the Merger, shares of Nationstar common stock were delisted from the New York Stock Exchange. Following the Merger closing, the combined Company traded on NASDAQ under the ticker symbol “WMIH” until October 10, 2018, when WMIH changed its name to “Mr. Cooper Group Inc.” and its ticker symbol to “COOP”. On February 1, 2019, the Company completed the acquisition of all the limited liability units of Pacific Union Financial, LLC (“Pacific Union”), a California limited liability company. The final purchase price was $116, paid in cash, and the purchase price allocation was finalized as of December 31, 2019. Pacific Union was a privately held Company that was engaged in the origination, as well as servicing of residential mortgage loans, and operated throughout the United States. The acquisition allows the Company to expand its servicing portfolio and increase its mortgage lending volume and capabilities. Basis of Presentation For the purpose of financial statement presentation, Mr. Cooper was determined to be the accounting acquirer in the Merger, and Nationstar’s assets and liabilities were recorded at estimated fair value as of the acquisition date. Mr. Cooper’s interim consolidated financial statements for periods following the Merger closing are labeled “Successor” and reflect the acquired assets and assumed liabilities from Nationstar. Under Securities and Exchange Commission (“SEC”) rules, when a registrant succeeds to acquire substantially all of the business of another entity and the registrant’s own operations before the succession appear insignificant relative to the operations assumed or acquired, the registrant is required to present financial information for the acquired entity (the “Predecessor”) for all comparable periods being presented before the acquisition. Due to the acquisition, the Predecessor and Successor financial statements have been prepared on different basis of accounting and are therefore not comparable. Pursuant to the Merger, Nationstar is considered the predecessor Company. Therefore, the Company is providing additional information in the accompanying consolidated financial statements regarding Nationstar’s business for the period prior to July 31, 2018. The predecessor Company’s financial information is labeled “Predecessor” in these consolidated financial statements. The consolidated financial statements of the Company and Predecessor have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The significant accounting policies described below, together with the other notes that follow, are an integral part of the consolidated financial statements. Basis of Consolidation The basis of consolidation described below was adopted by Nationstar and applied to the Predecessor financial statements for the periods impacted by the adoption. The Successor’s financial statements reflect the adoption of such standards. The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, other entities in which the Company has a controlling financial interest, and those variable interest entities (“VIE”) where the Company’s wholly owned subsidiaries are the primary beneficiaries. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that the Company became the primary beneficiary through the date the Company ceases to be the primary beneficiary. The Company applies the equity method of accounting to investments where it is able to exercise significant influence, but not control, over the policies and procedures of the entity and owns less than 50% of the voting interests. Investments in certain companies over which the Company does not exert significant influence are accounted for as cost method investments. Intercompany balances and transactions on consolidated entities have been eliminated. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates due to factors such as adverse changes in the economy, increases in interest rates, secondary market pricing for loans held for sale and derivatives, strength of underwriting and servicing practices, changes in prepayment assumptions, declines in home prices or discrete events adversely affecting specific borrowers, uncertainties in the economy from the COVID-19 pandemic, and such differences could be material. Recent Accounting Guidance Adopted Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326), (“ASU 2016-13”) requires expected credit losses for financial instruments held at the reporting date to be measured based on historical experience, current conditions and reasonable and supportable forecasts, which is referred to as the current expected credit loss (“CECL”) methodology. The update eliminates the initial recognition of credit losses on an incurred basis in current GAAP and instead reflects an entity’s current estimate of all expected credit losses over the life of the asset. Previously, when credit losses were measured under GAAP, an entity generally only considered past events and current conditions in measuring the incurred loss. The new standard will reflect management’s best estimate of all expected credit losses for the Company’s financial assets that are recognized at amortized cost. The guidance was effective for the Company as of January 1, 2020, with a cumulative-effect adjustment to retained earnings as of that date. Based upon management’s scoping analysis, the Company determined that reverse mortgage interests, net of reserves, advances and other receivables, net of reserves, and certain financial instruments included in other assets are within the scope of ASU 2016-13. Certain financial instruments within these respective line items have been determined to have limited expected credit-related losses due to the contractual servicing agreements with agencies and loan product guarantees. For advances and other receivables, net, the Company determined that the majority of estimated losses are due to servicing operational errors and credit-related losses are not significant because of the contractual relationships with the agencies. For reverse mortgage interests, the Company determined that the guarantee from Federal Housing Administration (“FHA”) on Home Equity Conversion Mortgage (“HECM”) loan products limits credit-related losses to an immaterial amount with substantially all losses related to servicing operational errors. For other assets, primarily trade receivables, the Company determined that these are short-term in nature (less than one year), and the estimated credit-related losses over the life of these receivables are similar to those resulting from the Company’s existing loss reserve process. For each of the aforementioned financial instruments carried at amortized cost, the Company enhanced its processes to consider and include the requirements of ASU 2016-13, as applicable, into the determination of credit-related losses. On January 1, 2020, the Company adopted ASU 2016-13 using the modified retrospective method for the above-mentioned financial assets. Results for reporting periods after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recorded transition adjustments aggregating to a net increase of $9, or $7 after tax, to retained earnings and a reduction of $7 to the advances and other receivables reserve and a $2 reduction in the other assets reserves, as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13. In connection with adoption of ASU 2016-13, the Company updated its accounting policies as follows: For certain financial instruments included in advances and other receivables, net, and certain trade receivables and accrued revenues included in other assets that are within the scope of ASU 2016-13, the reserve methodology was revised to consider CECL losses. The revised CECL methodology considers expected lifetime loss rates calculated from historical data using a weighted average life to determine the current expected credit loss required. Due to the nature of the financial instrument, reverse mortgage interests, net of reserves, and advances and other receivables had limited impact from the adoption of CECL to the reserve methodology. See Note 4, Advances and Other Receivables, and Note 5, Reverse Mortgage Interests for additional information. Factors that influenced management’s current estimate of expected credit losses for certain advances and other receivables and certain trade receivables and accrued revenues included the following: historical collection and loss rates, passage of time, weighted average life of receivables, and various qualitative factors including current economic conditions. Factors that influenced management’s current estimate of expected credit related losses for certain reverse mortgage interests included the following: historical collection and loss rates, foreclosure timelines, and values of underlying collateral. Accounting Standards Update No. 2018-13, Fair Value Measurement (Topic 820) - Changes to the Disclosure Requirements for Fair Value Measurement, (“ASU 2018-13”) removes the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 fair value measurement methodologies, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. It also adds a requirement to disclose changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. For certain unobservable inputs, entities may disclose other quantitative information in lieu of the weighted average if the other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The Company adopted ASU 2018-13 on January 1, 2020. The guidance does not have a material impact to the disclosures currently provided by the Company.
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Significant Accounting Policies |
12 Months Ended |
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Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies The significant accounting policies described below were implemented by Nationstar and applied to the Predecessor’s financial statements, unless otherwise noted. Upon the consummation of the Merger, the Company adopted these significant accounting policies, which are applicable to the Successor’s financial statements. Cash and Cash Equivalents Cash and cash equivalents include unrestricted cash on hand and other interest-bearing investments with original maturity dates of 90 days or less. Restricted Cash Restricted cash includes collected funds pledged to certain advance and warehouse facilities, collected fees payable to third parties, and contractual escrow funds. Mortgage Servicing Rights (“MSR”) The Company recognizes the rights to service mortgage loans for others, or MSRs, whether acquired or as a result of the sale of loans the Company originates with servicing retained, as assets. The Company initially records all MSRs at fair value. MSRs related to reverse mortgages are subsequently recorded at amortized cost. The Company has elected to subsequently measure forward MSRs at fair value. For MSRs initially recorded and subsequently measured at fair value, the fair value of the MSRs is based upon the present value of the expected future net cash flows related to servicing the underlying loans. The Company determines the fair value of the MSRs by the use of a discounted cash flow model which incorporates prepayment speeds, delinquencies, discount rate, ancillary revenues, float earnings and other assumptions (including costs to service and forbearance rates) that management believes are consistent with the assumptions that other similar market participants use in valuing the MSRs. The key assumptions to determine fair value include prepayment speed, discount rate and cost to service. The credit quality and stated interest rates of the forward loans underlying the MSRs affects the assumptions used in the cash flow models. The Company obtains third-party valuations quarterly to assess the reasonableness of the fair value calculated by the cash flow model. Fair value adjustments are recorded within revenues - service related, net in the consolidated statements of operations. Additionally, the Company owns servicing rights for certain reverse mortgage loans. For this separate class of servicing rights, the Company initially records an MSR or mortgage servicing liability (“MSL”) on the acquisition date based on the fair value of the future cash flows associated with the pool and whether adequate compensation is to be received for servicing. The Company applies the amortized cost method for subsequent measurement of the loan pools with the capitalized cost of the MSRs amortized in proportion and over the period of the estimated net future servicing income and the MSL accreted ratably over the expected life of the portfolio. The expected period of the estimated net servicing income is based, in part, on the expected prepayment period of the underlying mortgages. The Company adjusts MSR amortization and MSL accretion prospectively in response to changes in estimated projections of future cash flows. Reverse MSRs and MSLs are stratified and evaluated each reporting period for impairment or increased obligation, as applicable, based on predominant risk characteristics of the underlying serviced loans. The Company has determined that the predominant characteristic inherent in the reverse mortgage servicing portfolios is the product type (i.e. GNMA vs FNMA). Impairment of the reverse MSR or additional obligation associated with the MSL is recorded through a valuation allowance, unless considered other-than-temporary, and is recognized as a charge to general and administrative expense. Amounts amortized or accreted are recognized as an adjustment to revenues - service related, net, along with monthly servicing fees received, generally stated at a fixed rate per loan. Advances and Other Receivables, Net The Company advances funds to or on behalf of the investors when the borrower fails to meet contractual payments (e.g., principal, interest, property taxes, insurance) in accordance with terms of its servicing agreements. Other receivables consist of advances funded to maintain and market underlying loan collateral through foreclosure and ultimate liquidation on behalf of the investors. Advances are recovered from borrowers for performing loans and from the investors and loan proceeds for non-performing loans. The Company may also acquire servicer advances in connection with the acquisition of MSRs through asset acquisitions or business combinations. These advances are recorded at their relative fair value amounts upon acquisition. The Company records receivables upon determining that collection of amounts due from loan proceeds, investors, mortgage insurers, or prior servicers is probable. Reserves related to recoverability of advances and other receivables are discussed below in Reserves for Forward Servicing Activity. As a result of the Merger and the acquisition of Pacific Union, the Advances and Other Receivables assets were recorded at their estimated fair value as of the acquisition date. In both transactions, recording the estimated fair value resulted in a discount within Advances and Other Receivables. Subsequently, this discount will be utilized as the advance balances associated with the discount are recovered or written off. Reverse Mortgage Interests, Net Reverse mortgage interests are comprised of the Company’s interest in reverse mortgage loans that consists of participating interests in Home Equity Conversion Mortgages (“HECMs”) mortgage-backed securities (“HMBS”), other interests securitized and unsecuritized interests, as well as related claims receivables and real estate owned (“REO”) related receivables. The Company services previously acquired interests in reverse mortgage loans insured by the Federal Housing Administration (“FHA”) known as HECMs. HECMs provide seniors aged 62 and older with a loan secured by their home which can be taken as a lump sum, line of credit, or scheduled payments. HECM loan balances grow over the loan term through borrower draws of scheduled payments or line of credit draws, as well as through the accrual of interest, servicing fees and FHA mortgage insurance premiums. Growth in the loan balances are capitalized and recorded as reverse mortgage interests within the Company’s consolidated balance sheet. Additionally, loan balances including borrower draws, mortgage insurance premiums, and servicing fees may be eligible for securitization through Ginnie Mae’s HMBS program. In accordance with FHA guidelines, HECMs are designed to repay through foreclosure and subsequent liquidation of loan collateral after the loan becomes due and payable. Any shortfalls experienced by the servicer of the HECM through the foreclosure and liquidation process can be claimed to FHA in accordance with applicable guidelines. Other interests securitized consist of reverse mortgage interests that no longer meet HMBS program eligibility criteria and have been repurchased out of HMBS. These reverse mortgage interests have subsequently been transferred to private securitization trusts and are accounted for as a secured borrowing. Unsecuritized interests include repurchased HECM loans for which the Company is required to repurchase from the HMBS pool when the outstanding principal balance of the HECM loan is equal to or greater than 98% of the maximum claim amount (“MCA”) established at origination in accordance with HMBS program guidelines. As the HECM loan moves through the foreclosure and claims process, the Company classifies reverse mortgage interests as REO related receivables and HECM related receivables, respectively. Interest income is accrued monthly based upon the borrower interest rates within interest income on the consolidated statements of operations. The Company includes the cash outflow from funding these amounts as operating activities in the consolidated statements of cash flows as a component of reverse mortgage interests. The Company is an authorized Ginnie Mae (“GNMA”) HMBS program issuer and servicer. In accordance with GNMA HMBS program guidelines, borrower draws of scheduled payments or line of credit draws, servicing fee and interest accruals and mortgage insurance premium accruals are eligible for HMBS participation securitizations as each of these items increases underlying HECM loan balances. The Company pools and securitizes such eligible items into GNMA HMBS as issuer and servicer. In accordance with the HMBS program, issuers are responsible for purchasing HECM loans out of the HMBS pool when the outstanding principal balance of the related HECM loan is equal or greater than 98% of the maximum claim amount at which point the HECM loans are no longer eligible to remain in the HMBS pool. Upon purchase from the HMBS pool, the Company will assign active HECM loans to the U.S. Department of Housing and Urban Development (“HUD”) or a prior servicer (as applicable and permitted by acquisition agreements) or service inactive HECM loans through foreclosure and liquidation. Based upon the structure of the GNMA HMBS program, the Company has determined that the securitizations of the HECM loans into HMBS pools do not meet all requirements for sale accounting. Accordingly, these transactions are accounted for as secured borrowings. If the Company has repurchased an inactive HECM loan that cannot be assigned to HUD, the Company may pool and securitize these loans into a private HECM securitization. These securitizations are also recorded as secured borrowings in the consolidated balance sheets. Interest expense on the participating interest financing is accrued monthly based upon the underlying HMBS rates and is recorded to interest expense in the consolidated statements of operations. Both the acquisition and assumption of HECM loans and related GNMA HMBS debt are presented as investing and financing activities, respectively, in the consolidated statements of cash flows. Subsequent proceeds received from securitizations, and subsequent repayments on the securitized debt are presented as financing activities in the consolidated statements of cash flows. Reserves related to recoverability of reverse mortgage interests are discussed below in Reserves for Reverse Mortgage Interests. In connection with the Merger, the Company recorded the acquired reverse mortgage interests at estimated fair value as of the acquisition date, which resulted in a net purchase discount associated with financial and operational losses on reverse mortgage interests associated with servicing the loans through foreclosure and collateral liquidation. The premium and discount are amortized and accreted, respectively, based on the effective yield method, whereby the Company updates its prepayment assumptions for actual prepayments on a quarterly basis. Consistent with the Company’s accounting policy, the Company calculates reserve requirements on the reverse mortgage interests portfolio each reporting period and compares such calculated reserve requirements against the remaining net purchase discount. If the calculated reserve requirements exceed the remaining net purchase discount, the Company will record an additional reserve and associated provision to general and administrative expense. Mortgage Loans Held for Sale The Company originates prime residential mortgage loans with the intention of selling such loans on a servicing-retained basis in the secondary market. As these loans are originated with intent to sell, the loans are classified as held for sale and the Company has elected to measure these loans held for sale at fair value. The Company estimates fair value of mortgage loans held for sale by using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. In connection with the Company’s election to measure originated mortgage loans held for sale at fair value, the Company records the loan originations fees when earned, net of direct loan originations costs associated with these loans. Loan origination fees, gains or losses recognized upon sale of loans, and fair value adjustments are recorded in net gain on sale of mortgage loans held for sale in the consolidated statements of operations. From time to time, the Company exercises its right to repurchase individual delinquent loans in GNMA securitization pools to minimize interest spread losses, to re-pool into new GNMA securitizations or to otherwise sell to third-party investors. The Company has the right to repurchase any individual loan in a GNMA securitization pool if that loan meets certain criteria, including payments not being received from borrowers for greater than 90 days. It is the Company’s intention to re-pool into new GNMA securitizations upon re-performance of the loan or to otherwise sell to third-party investors; therefore, the Company classifies such loans as loans held for sale and has elected to measure these repurchased loans at fair value. MSR Related Liabilities - Nonrecourse Excess Spread Financing In conjunction with the acquisition of certain MSRs on various pools of residential mortgage loans (the “Portfolios”), the Company entered into sale and assignment agreements related to its right to servicing fees, under which the Company sells to third parties the right to receive a portion of the excess cash flow generated from the Portfolios after receipt of a fixed base servicing fee per loan. The excess cash flow payments made to third parties are considered counterparty payments, which are recorded as an adjustment to the Company’s revenues - service related, net in the consolidated statement of operations. The agreements consist of two components - current excess spread, or remittance of a percentage of excess spread on currently serviced loans, and future excess spread, or the obligation to transfer currently serviced loans that have been refinanced into current excess spread or a replacement loan of similar economic characteristics into the portfolios. The new or replacement loan will be governed by the same terms set forth in the sale and assignment agreement described above. The sale of these rights is accounted for as secured borrowings, with the total proceeds received being recorded as a component of MSR related liabilities - nonrecourse at fair value in the consolidated balance sheets. The Company determines the effective interest rate on these liabilities and allocates total repayments between interest expense and the outstanding liability. The Company has elected to measure the outstanding financings related to the excess spread financing agreements at fair value with all changes in fair value recorded to revenues - service related, net in the consolidated statements of operations. The fair value on excess spread financing is based on the present value of future expected discounted cash flows with the discount rate approximating current market value. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, recapture rates and discount rate. Mortgage Servicing Rights Financing From December 2013 through June 2014, the Predecessor entered into agreements to sell a contractually specified base servicing fee component of certain MSRs and servicing advances under specified terms to a joint venture capitalized by third-party investors. The purpose of this transaction was to facilitate the financing of advances for private label mortgages. The Company continues to be the named servicer and, for accounting purposes, ownership of the mortgage servicing rights continues to reside with the Company. Accordingly, the Company records the MSR and an MSR financing liability associated with this transaction in its consolidated balance sheets. The MSR financing liability reflects the incremental costs of this transaction relative to the market participant assumptions contained in the MSR valuation. The Company had MSR financing liability of $33 and $37 as of December 31, 2020 and 2019, respectively. Counterparty payments related to this financing arrangement are recorded as an adjustment to the Company’s revenues - service related, net in the consolidated statement of operations. The Company has elected to measure the mortgage servicing rights financing liabilities at fair value with all changes in fair value recorded to revenues - service related, net in the consolidated statements of operations. The fair value on mortgage servicing right financings is based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being advance financing rates and advance recovery rates. Property and Equipment, Net Property and equipment is comprised of building, furniture, fixtures, leasehold improvements, computer software, and computer hardware. These assets are stated at cost less accumulated depreciation. Repairs and maintenance are expensed as incurred which is included in general and administrative expenses in the consolidated statements of operations. Depreciation, which includes depreciation and amortization on capital leases, is recorded using the straight-line method over the estimated useful lives of the related assets. Cost and accumulated depreciation applicable to assets retired or sold are eliminated from the accounts, and any resulting gains or losses are recognized at such time through a charge or credit to general and administrative expenses. Costs to internally developed computer software are capitalized during the development stage and include external direct costs of materials and services as well as employee costs related to time spent on the project. Long-lived assets shall be tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of its property and equipment might not be recoverable. The Company will perform a quarterly evaluation to determine whether such events have occurred. If events and circumstances indicate the carrying values exceed the fair value of the fixed assets, the Company will proceed with an impairment testing. Impairment loss shall be recognized only if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. The impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. Leases If the Company determines an arrangement contains a lease or lease components, then the lease will be accounted for under Accounting Standards Codification (“ASC”) 842 and classified as either a finance or operating lease. At the lease commencement date, the Company recognizes a leased right-of-use (“ROU”) asset and corresponding lease liability based on the present value of the lease payments over the lease term. Leased ROU assets are tested for impairment in accordance with ASC 360, Property, Plant, and Equipment. ASC 842 provides for two policy elections. The first refers to leases with a term of 12 months or less and the second relates to separating lease components from nonlease components. The Company elected not to recognize lease assets and lease liabilities for leases with a term of 12 months or less and not to separate lease components from nonlease components. Leases primarily consist of various corporate and other office facilities. Operating leases in which the Company is the lessee are recorded as operating lease ROU assets and operating lease liabilities, which are included in other assets and payables and other liabilities, respectively, on the consolidated balance sheets. Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commencement date, as most of the Company’s leases do not provide an implicit rate. ROU assets are further adjusted for lease incentives. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in general and administrative expenses in the consolidated statements of operations. Operating lease activity is included in operating activities within the consolidated statements of cash flows. A finance lease is recorded as a leased property or equipment asset with a corresponding finance lease liability at an amount equal to the present value of minimum lease payments at the commencement date. Assets acquired under a finance lease are depreciated on a straight-line basis based on the shorter of the Company’s depreciation policy for owned assets (i.e. useful life) or the lease term. Lease payments are allocated between a reduction of the lease liability and interest expense to produce a constant periodic interest rate on the remaining balance of the lease liability. Interest expense on the lease liability is recognized separately from the amortization of the leased ROU asset in the consolidated statements of operations. Finance lease assets and liabilities are included in property and equipment, net, and payables and other liabilities on the consolidated balance sheets, respectively. Finance lease activity is included in financing activities within the consolidated statements of cash flows. Derivative Financial Instruments Derivative instruments are used as part of the overall strategy to manage exposure to market risks primarily associated with fluctuations in interest rates related to originations. The Company recognizes all derivatives at fair value on a recurring basis in other assets and payables and other liabilities on its consolidated balance sheets. The Company treats all of its derivative instruments as economic hedges, therefore none of its derivative instruments are designated as accounting hedges. Derivative instruments utilized by the Company primarily include interest rate lock commitments (“IRLCs”), loan purchase commitments (“LPCs”), forward Mortgage Backed Securities (“MBS”) purchase commitments, Eurodollar futures, Treasury futures, interest rate swap agreements and interest rate caps. IRLCs represent an agreement to extend credit to a mortgage loan applicant, or an agreement to purchase a loan from a third-party originator, whereby the interest rate on the loan is set prior to funding. The fair values of mortgage loans held for sale, which are held in inventory awaiting sale into the secondary market, and interest rate lock commitments, are subject to changes in mortgage interest rates from the date of the commitment through the sale of the loan into the secondary market. As a result, the Company is exposed to interest rate risk during the period from the date of the lock commitment through (i) the lock commitment cancellation or expiration date; or (ii) the date of sale into the secondary mortgage market. IRLCs are considered freestanding derivatives and are recorded at fair value at inception. Loan commitments generally range between 30 days and 90 days, and the Company typically sells mortgage loans within 30 days of origination. Changes in fair value subsequent to inception are based on changes in the fair value of the underlying loan, and changes in the probability that the loan will fund within the terms of the commitment. Any changes in fair value are recorded in earnings as a component of net gain on mortgage loans held for sale on the consolidated statement of operations and consolidated statement of cash flows. The Company uses other derivative financial instruments, primarily forward sales commitments, to manage exposure to interest rate risk and changes in the fair value of IRLCs and mortgage loans held for sale. These commitments are recorded at fair value based on the dealer’s market. The forward sales commitments fix the forward sales price that will be realized in the secondary market and thereby reduce the interest rate and price risk to the Company. The Company’s expectation of the amount of its interest rate lock commitments that will ultimately close is a key factor in determining the notional amount of derivatives used in economically hedging the position. The Company may also enter into commitments to purchase MBS as part of its overall hedging strategy. The estimated fair values of forward MBS are based on the exchange prices. The changes in value on the forward sales commitments and forward sales of MBS are recorded as a charge or credit to net gain on mortgage loans held for sale on the consolidated statement of operations and consolidated statement of cash flows. The Company also purchases interest rate swaps, Eurodollar futures and Treasury futures to mitigate exposure to interest rate risk related to cash flows on securitized mortgage borrowings. Intangible Assets Intangible assets primarily consist of customer relationships and technology acquired through business combinations. Those intangible assets are deemed to have finite useful lives and are amortized either on a straight-line basis over their estimated useful lives (trade name, technology and internally developed software), or on a basis more representative of the time pattern over which the benefit is derived (customer relationships). Intangible assets are recorded at their estimated fair value at the date of acquisition. Intangible assets with finite useful lives are tested for impairment whenever events or circumstances indicate that their carrying amount may not be recoverable by comparing the carrying value of the assets to the estimated future undiscounted cash flows to be generated by the asset. If an impairment is determined to exist for intangible assets, the carrying value of the asset is reduced to the estimated fair value. Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations and is assigned to the reporting unit in which the acquired business will operate. Goodwill is not amortized but is instead subject to impairment testing. The Company evaluates its goodwill for impairment annually as of October 1 of each year or more frequently if impairment indicators arise in accordance with ASC 350, Intangibles - Goodwill and Other. When testing goodwill for impairment, the Company may elect to perform either a qualitative test or a quantitative test to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. During a qualitative analysis, the Company considers the impact of any changes to the following factors: macroeconomic, industry and market factors, cost factors, and changes in overall financial performance, as well as any other relevant events and uncertainties impacting a reporting unit. If the qualitative assessment does not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, the Company performs a quantitative analysis. In a quantitative test, the carrying value of the reporting unit is compared to its estimated fair value. In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash flow analysis and further analyzed using other methods of valuation. A discounted cash flow analysis requires the Company to make various assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s long-term projections by reporting unit. In addition, an assumed terminal value is used to project future cash flows beyond base years. Assumptions used in the Company’s impairment testing are consistent with its internal forecasts and operating plans. The discount rate is based on the Company’s debt and equity balances, adjusted for current market conditions and investor expectations of return on the Company’s equity. If the fair value of a reporting unit exceeds its carrying amount, there is no impairment. If not, the Company compares the fair value of the reporting unit with its carrying amount. To the extent the carrying amount of the reporting unit exceeds its fair value, a write-down of the reporting unit’s goodwill would be necessary. Revenue Recognition ASC 606, Revenue from Contracts with Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers as performance obligations are satisfied in an amount that reflects the consideration that the entity expects to be entitled to receive in exchange for those goods or services. The majority of the Company’s revenue-generating transactions in the Servicing and Originations segments, including revenue generated from financial instruments, such as the Company’s loans and derivatives, as well as revenue related to the Company’s mortgage servicing activities, are not within the scope of ASC 606 as these activities are subject to other GAAP discussed elsewhere within the Company’s disclosures. All revenues from Xome fall within the scope of ASC 606. Revenues from Servicing Activities •Revenues from Forward Servicing Activities - Service related revenues primarily include contractually specified servicing fees, late charges, prepayment penalties, fair value adjustments, and other ancillary revenues. The servicing fees are based on a contractual percentage of the outstanding principal balance and recognized as revenue as earned during the life of the loan. Corresponding loan servicing costs are charged to expense as incurred. The Company recognizes ancillary revenues and earnings on float as they are earned. In addition, the Company receives various fees in the course of providing servicing on its various portfolios. These fees include modification fees for modifications performed outside of government programs, modification fees for modifications pursuant to various government programs, and incentive fees for servicing performance on specific government-sponsored entities (“GSE”) portfolios. Fees recorded on modifications of mortgage loans serviced by the Company for others are recognized on collection and are recorded as a component of revenues - service related, net. Fees recorded on modifications pursuant to various government programs are recognized based upon completion of all necessary steps by the Company and the minimum loan performance time frame to establish eligibility for the fee. Revenue earned on modifications pursuant to various government programs is included as a component of revenues - service related, net. Incentive fees for servicing performance on specific GSE portfolios are recognized as various incentive standards are achieved and are recorded as a component of revenues - service related, net. Fair value adjustments related to MSRs, excess spread financing and MSRs financing are recorded as component of revenue – service related, net. The Company also acts as a subservicer for certain parties that own the underlying servicing rights and receives subservicing fees, which are typically a stated monthly fee per loan that varies based on types of loans. Fees related to the subserviced portfolio are accrued in the period the services are performed. Net gain on mortgage loans held for sale includes the realized and unrealized gains and losses on sales of mortgage loans and the fair market value adjustments related to mortgage loans held for sale. •Revenues from Reverse Mortgage Servicing and Reverse Mortgage Interests - The Company performs servicing of reverse mortgage loans, similar to its forward servicing business, and receives servicing fees from investors, which are recorded in revenues - service related, net in the consolidated statements of operations. For reverse mortgage interests, where the Company records entire participating interest in HECM loans, the Company accrues interest in accordance with FHA guidelines and records interest income on the consolidated statements of operations. Revenues from Origination Activities •Revenues from Origination and other loan fees - Loan origination and other loan fees generally represent flat, per-loan fee amounts and are recognized as revenue, net of loan origination costs, at the time the loans are funded. •Net gain on mortgage loans held for sale - Net gain on loans held for sale includes the realized and unrealized gains and losses on sales of mortgage loans, as well as the changes in fair value of all loan-related derivatives, including interest rate lock commitments. Revenues from Xome Xome’s operations are comprised of Exchange, Title and Solutions, as follows: •Exchange is a national technology-enabled platform that manages and sells residential properties through its Xome.com platform. Revenue-generating activities include commission and buyer’s premium of winning bids on auctioned real estate owned (“REO”) and short sale properties. Revenue is recognized when the performance obligation is completed, which is at the closing of real estate transactions and there is transfer of ownership to the buyer. •Title and Solutions connect the major touch points of the real estate transactions process by providing title, escrow, collateral valuation and field services for purchase, refinance and default transactions. Major revenue-generating activities include title and escrow services and valuation services. Revenue is recognized when the performance obligation is completed, which is when services are rendered to customers. Reserves for Origination Activity The Company provides for reserves, included within payables and accrued liabilities, in connection with loan origination activities. Reserves on loan origination activities primarily include reserves for the repurchase of loans from GSEs, GNMA, and third-party investors primarily due to delinquency or foreclosure and are initially recorded upon sale of the loan to a third party with subsequent reserves recorded based on repurchase demands. The provision for reserves associated with loan origination activities is a component of net gain on mortgage loans held for sale in the consolidated statements of operations. The Company utilizes internal models to estimate reserves for loan origination activities based upon its expectation of future defaults and the historical defect rate for government insured loans and is based upon judgments and assumptions which can be influenced by many factors and may change over the life of the underlying loans, including: (i) historical loss rate, (ii) secondary market pricing of loans; (iii) home prices and the levels of home equity; (iv) the quality of Company’s underwriting procedures; (v) borrower delinquency and default patterns; and (vi) other Company-specific and macro-economic factors. On a quarterly basis, management corroborates these assumptions using third-party data, where applicable. Reserves for Forward Servicing Activity In connection with forward loan servicing activities, the Company records reserves primarily for the recoverability of advances, interest claims, and mortgage insurance claims. Reserves for advances and other receivables associated with loans in the MSR portfolio are considered within the MSR valuation, and the provision expense for such advances is recorded in the mark-to-market adjustment in revenues - service related, net in the consolidated statement of operations. Such valuation gives consideration to the expected cash outflows and inflows for advances and other receivables in accordance with the fair value framework. Reserves for advances and other receivables on loans transferred out of the MSR portfolio are established within advances and other receivables, net. As loans serviced transfer out of the MSR portfolio, any negative MSR value associated with the loans transferred is reclassified from the MSR to the reserve within advances and other receivables, net, to the extent such reserves continue to be required for balances remaining on the consolidated balance sheets. Management evaluates reserves for sufficiency each reporting period and any additional reserve requirements are recorded as a provision in general and administrative expense, as needed. The Company records reserves for advances and other receivables and evaluates the sufficiency of such reserves through internal models considering both historical and expected recovery rates on claims filed with government agencies, government sponsored enterprises, vendors, prior servicer and other counterparties. Key assumptions used in the model include but are not limited to expected recovery rates by loan types and aging of the receivable. Recovery of advances and other receivables is subject to judgment based on the Company’s assessment of its compliance with servicing guidelines, its ability to produce the necessary documentation to support claims, its ability to support amounts from prior servicers and to effectively negotiate settlements, as needed. Management reviews recorded advances and other receivables and upon determination that no further recourse for recovery is available from all means known to management, the recorded balances associated with these receivables are written-off against the reserve. Reserves for Reverse Mortgage Interests The Company records a reserve for reverse mortgage interests based on unrecoverable costs and estimates of probable loss exposures. The Company estimates reserve requirements upon the realization of a triggering event indicating a probable loss exposure. Internal models are utilized to estimate loss exposures at the loan level associated with the Company’s ability to meet servicing guidelines set forth by regulatory agencies and GSEs. Key assumptions within the models include but are not limited to expected recovery rates by loan and borrower characteristics, foreclosure timelines, value of underlying collateral, future carrying and foreclosure costs, and other macro-economic factors. If the calculated reserve requirements exceed the recorded allowance for reserves and discounts, a provision is recorded to general and administrative expense, as needed. Releases to reserves are also recorded against provision in general and administrative expenses. Reserve requirements are subject to significant judgment and estimates based on the Company’s assessment of its compliance with servicing guidelines and its ability to produce the necessary documentation to support claims, support amounts from prior servicers and to effectively negotiate settlements, as needed. Each period, management reviews recorded reverse mortgage interests and upon determination that no further recourse for recovery is available from all means known to management, the recorded balances associated with these receivables are written-off against the reserve at the loan level. Credit Loss Reserves ASC 326 – Financial Instruments – Credit Losses requires expected credit losses for financial instruments held at the reporting date to be measured based on historical experience, current conditions and reasonable and supportable forecasts, which is referred to as the current expected credit loss, or CECL, methodology. The new standard reflects management’s best estimate of all expected credit losses for the Company’s financial assets that are recognized at amortized cost. The revised CECL methodology considers expected lifetime loss rates calculated from historical data using a weighted average life and considering reasonable and supportable forecasts to determine the current expected credit loss required. The Company determined that reverse mortgage interests, net of reserves, advances and other receivables, net of reserves, and certain financial instruments included in other assets are within the scope of ASU 2016-13. Certain financial instruments within these respective line items have been determined to have limited expected credit-related losses due to the contractual servicing agreements with agencies and loan product guarantees. For advances and other receivables, net, the Company determined that the majority of estimated losses are due to servicing operational errors, and credit-related losses are not significant because of the contractual relationships with the agencies. The Company determined that the credit-related risk associated with certain applicable financial instruments can increase with the passage of time. The CECL reserve methodology considers these financial instruments collectible to a point in time of 39 months. Any projected remaining balance at the end of the collection period is considered a loss and factors into the overall CECL loss rate required. For reverse mortgage interests, net, the Company determined that the guarantee from the FHA on HECM loan products limits credit-related losses to an immaterial amount with substantially all losses related to servicing operational errors. Any expected credit-related losses are contemplated in the Company’s existing reserve methodology due to the nature of this financial instrument. The credit-risk characteristics of reverse mortgage interests do not vary with time as the financial instruments have no contractual life or financial profile as the primary counterparty is the government agency insuring the loans. For other assets, primarily trade receivables and service fees earned but not received, the Company determined that these are short-term in nature (less than one year), and the estimated credit-related losses over the life of these receivables are similar to those resulting from the Company’s existing loss reserve process. The Company monitors the financial status of customers to determine if any specific loss considerations are required. Variable Interest Entities In the normal course of business, the Company enters into various types of on- and off-balance sheet transactions with special purpose entities (“SPEs”), which primarily consist of securitization trusts established for a limited purpose. Generally, these SPEs are formed for the purpose of securitization transactions in which the Company transfers assets to an SPE, which then issues to investors various forms of debt obligations supported by those assets. In these securitization transactions, the Company typically receives cash and/or other interests in the SPE as proceeds for the transferred assets. The Company will typically retain the right to service the transferred receivables and to repurchase the transferred receivables from the SPE if the outstanding balance of the receivables falls to a level where the cost exceeds the benefits of servicing the transferred receivables. The Company evaluates its interests in each SPE for classification as a Variable Interest Entity (“VIE”). When an SPE meets the definition of a VIE and the Company determines that the Company is the primary beneficiary, the Company includes the SPE in its consolidated financial statements. The Company consolidates SPEs connected with both forward and reverse mortgage activities. See Note 13, Securitizations and Financings, for more information on Company SPEs, and Note 12, Indebtedness, for certain debt activity connected with SPEs. Securitizations and Asset-Backed Financing Arrangements The Company and its subsidiaries have been a transferor in connection with a number of securitizations and asset-backed financing arrangements. The Company has continuing involvement with the financial assets of the securitizations and the asset-backed financing arrangements. The Company has aggregated these transactions into two groups: (1) securitizations of residential mortgage loans accounted for as sales and (2) financings of advances on loans serviced for others accounted for as secured borrowings. Securitizations Treated as Sales The Company’s continuing involvement typically includes acting as servicer for the mortgage loans held by the trust and holding beneficial interests in the trust. The Company’s responsibilities as servicer include, among other things, collecting monthly payments, maintaining escrow accounts, providing periodic reports and managing insurance in exchange for a contractually specified servicing fee. The beneficial interests held consist of both subordinate and residual securities that were retained at the time of securitization. These securitizations generally do not result in consolidation of the VIE as the beneficial interests that are held in the unconsolidated securitization trusts have no value and no potential for significant cash flows in the future. In addition, at December 31, 2020, the Company had no other significant assets in its consolidated financial statements related to these trusts. The Company has no obligation to provide financial support to unconsolidated securitization trusts and has provided no such support. The creditors of the trusts can look only to the assets of the trusts themselves for satisfaction of the debt issued by the trusts and have no recourse against the assets of the Company. The general creditors of the Company have no claim on the assets of the trusts. The Company’s exposure to loss as a result of its continuing involvement with the trusts is limited to the carrying values, if any, of its investments in the residual and subordinate securities of the trusts, the MSRs that are related to the trusts and the advances to the trusts. The Company considers the probability of loss arising from its advances to be remote because of their position ahead of most of the other liabilities of the trusts. See Note 4, Advances and Other Receivables, and Note 3, Mortgage Servicing Rights and Related Liabilities, for additional information regarding advances and MSRs. Financings The Company transfers advances on loans serviced for others to SPEs in exchange for cash. The Company consolidates these SPEs because the Company is the primary beneficiary of the VIE. These VIEs issue debt supported by collections on the transferred advances. The Company made these transfers under the terms of its advance facility agreements. The Company classifies the transferred advances on its consolidated balance sheets as advances and classifies the related liabilities as advance facilities and other nonrecourse debt. The SPEs use collections of the pledged advances to repay principal and interest and to pay the expenses of the entity. Holders of the debt issued by these entities can look only to the assets of the entities themselves for satisfaction of the debt and have no recourse against the Company. Financings include the HMBS and private securitization trusts as previously discussed. Loans Subject to Repurchase Rights from Ginnie Mae For certain forward loans sold to GNMA, the Company as the issuer has the unilateral right to repurchase, without GNMA’s prior authorization, any individual loan in a GNMA securitization pool if that loan meets certain criteria, including payments not being received from borrowers for greater than 90 days. Once the Company has the unilateral right to repurchase a delinquent loan, the Company has effectively regained control over the loan, and under GAAP, must recognize the right to the loan in its consolidated balance sheets and establish a corresponding repurchase liability regardless of the Company’s intention to repurchase the loan. The Company records the right to purchase these mortgage loans in other assets at their unpaid principal balances, which approximate fair value, and records a corresponding liability in payables and other liabilities for mortgage loans eligible for repurchase in its consolidated balance sheets. Interest Income Interest income is recognized on loans held for sale for the period from loan funding to sale, which is typically within 30 days. Loans are placed on non-accrual status when any portion of the principal or interest is greater than 90 days past due. Loans return to accrual status when the principal and interest become current and it is probable that the amounts are fully collectible. For individual loans that have been modified, a period of six timely payments is required before the loan is returned to an accrual basis. Interest income also includes interest earned on custodial cash deposits associated with the mortgage loans serviced, and interest earned on reverse mortgage interests. Reverse mortgage interests accrue interest income in accordance with FHA guidelines. Share-Based Compensation Share-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period of the grant) on a straight-line basis in salaries, wages and benefits within the consolidated statements of operations. Advertising Costs Advertising costs are expensed as incurred and are included as part of general and administrative expenses. The Company incurred advertising costs of $38, $33 and $17 for the years ended December 31, 2020 and 2019 and five months ended December 31, 2018, respectively. The Predecessor incurred advertising costs of $33 for the seven months ended July 31, 2018. Income Taxes The Company is subject to the income tax laws of the U.S., its states and municipalities and several U.S. territories. These tax laws are complex and subject to different interpretations by the taxpayer and the relevant governmental taxing authorities. Deferred income taxes are determined using the balance sheet method. Deferred taxes are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period that includes the enactment date. The Company regularly reviews the carrying amount of its deferred tax assets to determine if the establishment of a valuation allowance is necessary. If based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized in future periods, a deferred tax valuation allowance is established. Consideration is given to various positive and negative evidence that could affect the realization of the deferred tax assets. In evaluating this available evidence, management considers, among other things, historical financial performance, expectation of future earnings, length of statutory carryforward periods, experience with operating tax loss and tax credit carryforwards which may expire unused, the use of tax planning strategies and the timing of reversals of temporary differences. The Company’s evaluation is based on current tax laws as well as management’s expectations of future performance. The Company initially recognizes tax positions in the consolidated financial statements when it is more likely than not that the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority, assuming the tax authority has full knowledge of the position and all relevant facts. In establishing a provision for income tax expense, the Company makes judgments and interpretations about the application of these inherently complex tax laws. The Company recognizes interest and penalties related to uncertain tax positions as a component of provisions for income taxes in accordance with ASC 740. Earnings Per Share The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. The Series A Preferred Stock is considered participating securities because it has dividend rights determined on an as-converted basis in the event of Company’s declaration of a dividend or distribution for common shares. Basic net income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income per common share is computed by dividing net income available to common stockholders by the sum of the weighted average number of common shares outstanding and any dilutive securities for the period.
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Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Servicing Rights and Related Liabilities | 3. Mortgage Servicing Rights and Related Liabilities The following table sets forth the carrying value of the Company’s MSRs and the related liabilities. In estimating the fair value of certain servicing rights and related liabilities, the impact of forbearance due to the COVID-19 pandemic was considered in the determination of key assumptions.
Mortgage Servicing Rights The Company owns and records at fair value the rights to service traditional residential mortgage (“forward”) loans for others either as a result of purchase transactions or from the retained servicing associated with the sales and securitizations of loans originated. MSRs are comprised of servicing rights of both agency and non-agency loans. The following table sets forth the activities of forward MSRs:
(1)Purchases of servicing rights during the year ended December 31, 2019 include $271 of mortgage servicing rights that were acquired from Pacific Union. See Note 1, Nature of Business and Basis of Presentation, for further discussion. In addition, in 2019, the Company entered into a subservicing contract, resulting in additional $253 servicing rights during the second quarter of 2019. From time to time, the Company sells its ownership interest in certain MSRs and is retained as the subservicer for the sold assets. The Company has evaluated the sale accounting requirements related to these transactions, including the Company’s continued involvement as the subservicer, and concluded that these transactions qualify for sale accounting treatment. During the years ended December 31, 2020 and 2019, the Company sold $1,070 and $35,152 in unpaid principal balance of forward MSRs, of which $960 and $20,560 was retained by the Company as subservicer, respectively. MSRs measured at fair value are segregated between investor type into agency and non-agency pools (referred to herein as “investor pools”) based upon contractual servicing agreements with investors at the respective balance sheet date to evaluate the MSR portfolio and fair value of the portfolio. Agency investors primarily consist of GSEs, such as the Federal National Mortgage Association (“Fannie Mae” or “FNMA”) and the Federal Home Loan Mortgage Corp (“Freddie Mac” or “FHLMC”), and the Government National Mortgage Association (“Ginnie Mae” or “GNMA”). Non-agency investors consist of investors in private-label securitizations. The following table provides a breakdown of UPB and fair value for the Company’s forward MSRs:
Refer to Note 17, Fair Value Measurements, for further discussion on key weighted-average inputs and assumptions used in estimating the fair value of forward MSRs. The following table shows the hypothetical effect on the fair value of the Company’s forward MSRs when applying certain unfavorable variations of key assumptions to these assets for the dates indicated:
These hypothetical sensitivities should be evaluated with care. The effect on fair value of a 10% adverse change in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Reverse Mortgage Servicing Rights and Liabilities - Amortized Cost The Company services certain HECM reverse mortgage loans with an unpaid principal balance of $18,091 and $22,725 as of December 31, 2020 and 2019, respectively. The following table sets forth the activities of reverse MSRs and mortgage servicing liabilities (“MSL”):
(1)Reverse MSR and MSL net adjustments recorded by the Company during the year ended December 31, 2019 primarily relate to the finalization of the preliminary fair value estimates recorded in connection with the Merger. Management evaluates reverse MSRs and MSLs each reporting period for impairment. Based on management’s assessment at December 31, 2020 and 2019, no impairment or increased obligation was needed. Excess Spread Financing - Fair Value In order to finance the acquisition of certain MSRs on various portfolios, the Company previously entered into sale and assignment agreements with third parties and sold to these entities the right to receive a specified percentage of the excess cash flow generated from the portfolios in excess of a fixed base servicing fee per loan. The Company retains all the base servicing fee, ancillary income and interest float earnings on principal along with interest payments and escrow, and also incurs costs to service the specified pool. The Company is the legal owner and the servicer of the portfolios and provides all servicing and advancing functions. In connection with the above transactions, the Company entered into refinanced loan obligations with third parties that require the Company to transfer the new loan or a replacement loan of similar economic characteristics into the respective portfolio if the Company refinances any loan in the portfolio. The new or replacement loan will be governed by the same terms set forth in the sale and assignment agreement described above. The Company had excess spread financing liability of $934 and $1,311 as of December 31, 2020 and 2019, respectively. Refer to Note 17, Fair Value Measurements, for further discussion on key weighted-average inputs and assumptions used in the valuation of excess spread financing. The following table shows the hypothetical effect on the Company’s excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities for the dates indicated:
These hypothetical sensitivities should be evaluated with care. The effect on fair value of a 10% variation in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Also, a positive change in the above assumptions would not necessarily correlate with the corresponding decrease in the net carrying amount of the excess spread financing. Excess spread financing’s cash flow assumptions that are utilized in determining fair value are based on the related cash flow assumptions used in the financed MSRs. Any fair value change recognized in the financed MSRs attributable to related cash flows assumptions would inherently have an inverse impact on the carrying amount of the related excess spread financing. Mortgage Servicing Rights Financing - Fair Value The Company had MSR financing liability of $33 and $37 as of December 31, 2020 and 2019, respectively. Refer to Note 2, Significant Accounting Policies, for further discussion on MSR financing, and Note 17, Fair Value Measurements, for further discussion on key weighted-average inputs and assumptions used in the valuation of the MSR financing liability. Servicing Segment Revenues The following table sets forth the items comprising total revenues for the Servicing segment:
(1)The Company recognizes revenue on an earned basis for services performed. Amounts include subservicing related revenues. (2)Mark-to-market (“MTM”) adjustments include fair value adjustments on MSR, excess spread financing and MSR financing liabilities. The amount of MSR MTM includes the impact of negative modeled cash flows which have been transferred to reserves on advances and other receivables. The negative modeled cash flows relate to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio. The impact of negative modeled cash flows was $28 and $62 for the years ended December 31, 2020 and 2019, respectively. (3)Counterparty revenue share represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements and the payments made associated with MSR financing arrangements. (4)Amortization for the Company is net of excess spread accretion of $338 and $243 and MSL accretion of $20 and $47 for the years ended December 31, 2020 and 2019, respectively.
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Advances and Other Receivables |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advances and Other Receivables | 4. Advances and Other Receivables Advances and other receivables, net consists of the following:
The Company, as loan servicer, is contractually responsible to advance funds on behalf of the borrower and investor primarily for loan principal and interest, property taxes, hazard insurance, and foreclosure costs. Advances are primarily recovered through reimbursement from the investor, proceeds from sale of loan collateral, or mortgage insurance claims. Reserves for advances and other receivables on loans transferred out of the MSR portfolio are established within advances and other receivables. The following table sets forth the activities of the servicing reserves for advances and other receivables:
(1)As described in Note 1, Nature of Business and Basis of Presentation, the Company recorded a transition adjustment of $7 to the advances and other receivables reserve as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13. (2)The Company recorded a provision of $28 and $62 through the MTM adjustments in revenues - service related, net, in the consolidated statements of operations during the years ended December 31, 2020 and 2019, respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate. Purchase Discount for Advances and Other Receivables In connection with previous acquisitions, the Company recorded the acquired advances and other receivables at estimated fair value as of the acquisition date, which resulted in a purchase discount. As of December 31, 2020, a total of $228 purchase discount has been utilized, with $93 purchase discount remaining. The following table sets forth the activities of the purchase discount for advances and other receivables:
Credit Loss for Advances and Other Receivables As described in Note 1, Nature of Business and Basis of Presentation, advances and other receivables are within the scope of ASU 2016-13, and the Company modified its accounting policy regarding its assessment of reserves for credit-related losses in accordance with CECL framework. During the year ended December 31, 2020, the Company increased the CECL reserve by $21. As of December 31, 2020, the total CECL reserve was $38, of which $21 and $17 was recorded in reserves and purchase discount for advances and other receivables, respectively. Based upon the Company’s application of ASU 2016-13, the Company determined that the credit-related risk associated with applicable financial instruments typically increase with the passage of time. The CECL reserve methodology considers these financial instruments collectible to a point in time of 39 months. Any projected remaining balance at the end of the collection period is considered a loss and factors into the overall CECL loss rate required.
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Reverse Mortgage Interests |
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Reverse Mortgage Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse Mortgage Interests | 5. Reverse Mortgage Interests Reverse mortgage interests, net, consists of the following:
Participating Interests in HMBS Participating interests in HMBS consist of the Company’s reverse mortgage interests in HECM loans which have been transferred to GNMA and subsequently securitized through the issuance of HMBS. The Company does not own these loans, but due to HMBS program buyout requirements, such interests are consolidated in the Company’s consolidated balance sheets. The Company does not originate reverse mortgages, but during the years ended December 31, 2020 and 2019, a total of $173 and $265 in UPB associated with new draws on existing loans were transferred to GNMA and securitized by the Company, respectively. In March 2019, the Company entered into an agreement with Fannie Mae for the transfer of reverse mortgage loans. As a result, $61 was transferred from Fannie Mae and securitized into GNMA HMBS during the year ended December 31, 2019. There was no such activity during the year ended December 31, 2020. Other Interests Securitized Other interests securitized consist of reverse mortgage interests that no longer meet HMBS program eligibility criteria primarily because they are equal to or greater than 98% of their MCA, which is established at origination and in accordance with HMBS program guidelines, requiring a repurchase of loans from the respective HMBS trust. These reverse mortgage interests have subsequently been transferred to private securitization trusts and are accounted for as a secured borrowing. During the year ended December 31, 2020, the Company securitized a total of $516 UPB through Trust 2020-1 and called a total of $337 UPB from Trust 2018-2 and Trust 2018-3 with the related debt being extinguished. During the year ended December 31, 2019, the Company securitized a total of $751 UPB through Trust 2019-1 and Trust 2019-2 and called a total of $476 UPB from Trust 2017-2 and Trust 2018-1 with the related debt being extinguished. The Company sold $20 UPB of Trust 2018-3 retained bonds during the year ended December 31, 2019. Refer to Other Nonrecourse Debt in Note 12, Indebtedness, for additional information. Unsecuritized Interests Unsecuritized interests in reverse mortgages consists of the following:
(1)HECM related receivables consist primarily of receivables from FNMA for corporate advances and service fees and claims receivables from HUD on reverse mortgage interests. Unsecuritized interests include repurchased HECM loans for which the Company is required to repurchase from the HMBS pool when the outstanding principal balance of the HECM loan is equal to or greater than 98% of the MCA established at origination in accordance with HMBS program guidelines. These unsecuritized interests are primarily financed through available warehouse lines. The Company repurchased a total of $1,153 and $2,333 of HECM loans out of GNMA HMBS securitizations during the years ended December 31, 2020 and 2019, respectively, of which $306 and $616 were subsequently assigned to a third party in accordance with applicable servicing agreements, respectively. To the extent a loan is not subject to applicable servicing agreements and assigned to a third party, the loan is either subject to assignment to HUD, per contractual obligations with GNMA, liquidated via a payoff from the borrower or liquidated via a foreclosure according to the terms of the underlying mortgage. The Company assigned a total of $771 and $1,819 of HECM loans to HUD during the years ended December 31, 2020 and 2019, respectively. Purchase Discount, net, for Reverse Mortgage Interests In connection with the Merger, the Company recorded the acquired reverse mortgage interests at estimated fair value as of the acquisition date, which resulted in a net purchase discount of $256 associated with financial and operational losses on reverse mortgage interests associated with servicing the loans through foreclosure and collateral liquidation. The premium and discount are amortized and accreted, respectively, based on the effective yield method, whereby the Company updates its prepayment assumptions for actual prepayments on a quarterly basis. Consistent with the Company’s accounting policy, the Company calculates reserve requirements on the reverse mortgage interests portfolio each reporting period and compares such calculated reserve requirements against the remaining net purchase discount. If the calculated reserve requirements exceed the remaining net purchase discount, the Company will record an additional reserve and associated provision to general and administrative expense. No additional reserves were required to be recorded as of December 31, 2020. The following table sets forth the activities of the purchase discounts, net, for reverse mortgage interests:
(1)Net position as certain items are in a premium/(discount) position, based on the characteristics of underlying tranches of loans. (2)Utilization of purchase discounts to mitigate loss on liquidated loans, for which the remaining receivable was written-off. (3)Adjustments during the year ended December 31, 2019 is due to revised cost to service assumption utilized in the valuation of reverse mortgage assets and liabilities acquired from the Merger. Credit Loss for Reverse Mortgage Interests As described in Note 1, Nature of Business and Basis of Presentation, reverse mortgage interests are within the scope of ASU 2016-13, requiring an assessment of reserves regarding credit-related losses in accordance with the CECL framework. Upon applying ASU 2016-13, the Company determined that credit-related losses are immaterial given the government insured nature of the HECM loan product. Any expected credit-related losses are contemplated in the Company’s existing reserve methodology due to the nature of this financial instrument. Accordingly, no cumulative effect adjustment was required upon adoption of ASU 2016-13 on January 1, 2020 and no additional CECL reserve was recorded as of December 31, 2020. The credit-risk characteristics of reverse mortgage interests do not vary with time as the financial instruments have no contractual life or financial profile as the primary counterparty is the government agency insuring the loans. Reverse Mortgage Interests Income The Company accrues interest income for its participating interest in reverse mortgages based on the stated rates underlying HECM loans and FHA guidelines. Total interest earned on the Company’s reverse mortgage interests was $200 and $307 for the years ended December 31, 2020 and 2019, respectively.
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Mortgage Loans Held for Sale |
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Mortgage Loans Held for Sale [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Loans Held for Sale | 6. Mortgage Loans Held for Sale Mortgage Loans Held for Sale The Company maintains a strategy of originating and purchasing residential mortgage loan products primarily for the purpose of selling to GSEs or other third-party investors in the secondary market on a servicing-retained basis. The Company purchases closed loans through its correspondent channel and assists customers currently in the Company’s servicing portfolio with refinancing of loans or new home purchases through its Direct to Consumer channel. Generally, all newly originated mortgage loans held for sale are securitized and transferred to GSEs or delivered to third-party purchasers shortly after origination on a servicing-retained basis. Mortgage loans held for sale are recorded at fair value as set forth below:
(1)The mark-to-market adjustment includes net change in unrealized gain/loss, premium on correspondent loans and fees on direct-to-consumer loans. The mark-to-market adjustment is recorded in net gain on mortgage loans held for sale in the consolidated statements of operations. The following table sets forth the activities of mortgage loans held for sale:
(1)The Company has the right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased in connection with loan modifications and loan resolution activity, with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. Therefore, these loans are classified as held for sale. (2)Amount reflects transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net, for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing. For the years ended December 31, 2020 and 2019, the Company received proceeds of $67,855 and $41,809, respectively, on the sale of mortgage loans held for sale, resulting in gains of $1,310 and $540, respectively. The Company accrues interest income as earned and places loans on non-accrual status after any portion of principal or interest has been delinquent for more than 90 days. Accrued interest is recorded as interest income in the consolidated statements of operations. The total UPB of mortgage loans held for sale on non-accrual status was as follows:
(1)Non-accrual includes $44 and $25 of UPB related to Ginnie Mae repurchased loans as of December 31, 2020 and 2019, respectively. The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $20 and $21 as of December 31, 2020 and 2019, respectively.
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Property and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | 7. Property and Equipment The composition of property and equipment, net, and the corresponding ranges of estimated useful lives were as follows:
The Company recorded depreciation expense on property and equipment of $42 and $41 for the years ended December 31, 2020 and 2019, respectively. The Company has entered into various lease agreements for computer equipment, which are classified as finance leases. See Note 8, Leases, for more information. The Company recorded impairment charges of $12 and $4 during the years ended December 31, 2020 and 2019 respectively. The impairment charges were included in the general and administrative expenses in the consolidated statements of operations.
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | 8. Leases The Company’s leases primarily relate to office space and equipment, with remaining lease terms of generally 1 to 8 years. Certain lease arrangements contain extension options, which typically range from 3 to 5 years, at the then fair market rental rates. As of December 31, 2020 and 2019, operating lease ROU assets were $97 and $121, respectively, and liabilities were $108 and $135, respectively, which were included in and , respectively, on the consolidated balance sheets. The Company does not currently have any significant finance leases in which it is the lessee. The table below summarizes the Company’s net lease cost:
The table below summarizes other information related to the Company’s operating leases:
Maturities of operating lease liabilities as of December 31, 2020 are as follows:
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Loans Subject to Repurchase from Ginnie Mae |
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Dec. 31, 2020 | |
Receivables [Abstract] | |
Loans Subject to Repurchase from Ginnie Mae | 9. Loans Subject to Repurchase from Ginnie Mae Forward loans are sold to Ginnie Mae in conjunction with the issuance of mortgage backed securities. The Company, as the issuer of the mortgage backed securities, has the unilateral right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including payments not being received from borrowers for greater than 90 days. Once the Company has the unilateral right to repurchase a delinquent loan, it has effectively regained control over the loan and recognizes these rights to the loan on its consolidated balance sheets and establishes a corresponding repurchase liability regardless of the Company’s intention to repurchase the loan. The Company had loans subject to repurchase from Ginnie Mae of $6,159 and $560 as of December 31, 2020 and 2019, respectively, which are included in both other assets and payables and other liabilities in the consolidated balance sheets. Loans subject to repurchase from Ginnie Mae as of December 31, 2020 included $5,879 of loans in forbearance related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) whereby no payments have been received from borrowers for greater than 90 days. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | 10. Goodwill and Intangible Assets Goodwill The table below presents changes in the carrying amount of goodwill:
During the years ended December 31, 2020 and 2019, the Company performed a quantitative and qualitative assessment, respectively, of its reporting units and determined that no impairment of goodwill existed. As of December 31, 2020 and 2019, $80, $28 and $12 of the goodwill is assigned to the Servicing, Originations and Xome segments, respectively. Goodwill is recorded in other assets within the consolidated balance sheets. Intangible Assets The following tables present the composition of intangible assets:
Intangible assets are recorded in other assets within the consolidated balance sheets. The Company recognized $32 and $50 of amortization expense related to intangible assets during the years ended December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, in connection with an ancillary business, the Company recorded a $10 and $7 impairment of technology and other intangible assets within Corporate/Other, respectively. The impairment charges were included in the general and administrative expenses in the consolidated statements of operations. The following table presents the estimated aggregate amortization expense for existing amortizable intangible assets for the years indicated:
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | 11. Derivative Financial Instruments Derivative instruments are used as part of the overall strategy to manage exposure to market risks primarily associated with fluctuations in interest rates related to originations. Derivative instruments utilized by the Company primarily include IRLCs, LPCs, forward MBS purchase commitments, Eurodollar and Treasury futures and interest rate swap agreements. The following table provides the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses) for the derivative financial instruments:
Associated with the Company’s derivatives are $61 and $6 in collateral deposits on derivative instruments recorded in other assets on the Company’s consolidated balance sheets as of December 31, 2020 and 2019, respectively. The Company does not offset fair value amounts recognized for derivative instruments with amounts collected or deposited on derivative instruments in the consolidated balance sheets.
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indebtedness | 12. Indebtedness Advance and Warehouse Facilities
(1)The capacity amount for this advance facility increased from $125 to $875 in 2020. (2)Total capacity for this facility is $900, of which $640 is internally allocated for advance financing and $260 is internally allocated for MSR financing; capacity is fully fungible and is not restricted by these allocations. (3)The capacity amount for this advance facility increased from $325 to $425 in 2020. (4)This advance facility was terminated and transferred to another advance facility in 2020. (5)The capacity amount for this warehouse facility increased from $200 to $2,000 in 2020. (6)The capacity amount for this warehouse facility was increased from $700 to $1,500 in 2020. (7)Total capacity amount for this facility is $1,500, of which $150 is a sublimit for MSR financing. The capacity amount increased from $800 to $1,500 in 2020. (8)The capacity amount for this warehouse facility decreased from $1,000 to $250 in 2020. (9)This warehouse facility was terminated in 2020. (10)This MSR facility was terminated in 2020. (11)The capacity amount for this MSR facility decreased from $400 to $200 in 2020. Unsecured Senior Notes Unsecured senior notes consist of the following:
(1)In August 2020, the Company completed the offering of the unsecured senior notes due 2028 and used the net proceeds from the offering, together with cash on hand, to redeem the unsecured senior notes due 2023. (2)In December 2020, the Company completed the offering of the unsecured senior notes due 2030 and used the net proceeds from the offering, together with cash on hand, to redeem the unsecured senior notes due 2026. (3)In January 2020, the Company completed the offering of the unsecured senior notes due 2027 and, in February 2020, used the net proceeds from the offering, together with cash on hand, to redeem the unsecured senior notes due 2021 and 2022. The ratios included in the indentures for the unsecured senior notes are incurrence-based compared to the customary ratio covenants that are often found in credit agreements that require a company to maintain a certain ratio. The incurrence-based covenants limit the issuer(s) and restricted subsidiaries ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all of their assets or enter into certain transactions with affiliates. The indentures contain certain events of default, including (subject, in some cases, to customary cure periods and materiality thresholds) defaults based on (i) the failure to make payments under the applicable indenture when due, (ii) breach of covenants, (iii) cross-defaults to certain other indebtedness, (iv) certain bankruptcy or insolvency events, (v) material judgments and (vi) invalidity of material guarantees. The indentures provide that on or before certain fixed dates, the Company may redeem up to 40% of the aggregate principal amount of the unsecured senior notes with the net proceeds of certain equity offerings at fixed redemption prices, plus accrued and unpaid interest, to the redemption dates, subject to compliance with certain conditions. In addition, the Company may redeem all or a portion of the unsecured senior notes at any time on or after certain fixed dates at the applicable redemption prices set forth in the indentures plus accrued and unpaid interest, to the redemption dates. During the years ended December 31, 2020 and 2019, the Company repaid $100 in principal of outstanding notes. Additionally, the Company redeemed $2,298 in principal of outstanding notes during the year ended December 31, 2020, resulting in a net loss of $138. No notes were repurchased or redeemed during the year ended December 31, 2019. As of December 31, 2020, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows:
Other Nonrecourse Debt Other nonrecourse debt consists of the following:
(1)Amounts represent the Company’s participating interest in GNMA HMBS securitized portfolios. (2)As discussed in Note 5, Reverse Mortgage Interests, Trust 2018-3 and Trust 2018-2 were collapsed and the related debt extinguished during the year ended December 31, 2020. Participating Interest Financing Participating interest financing represents the obligation of HMBS pools to third-party security holders. The Company issues HMBS in connection with the securitization of borrower draws and accrued interest on HECM loans. Proceeds are received in exchange for securitized advances on the HECM loan amounts transferred to GNMA, and the Company retains a beneficial interest (referred to as a “participating interest”) in the securitization trust in which the HECM loans and HMBS obligations are held and assume both issuer and servicer responsibilities in accordance with GNMA HMBS program guidelines. Monthly cash flows generated from the HECM loans are used to service the HMBS obligations. Securitizations of Nonperforming HECM Loans From time to time, the Company securitizes its interests in non-performing reverse mortgages. The transactions provide investors with the ability to invest in a pool of both non-performing HECM loans secured by one-to-four-family residential properties and a pool of REO properties acquired through foreclosure of a deed in lieu of foreclosure in connection with HECM loans that are covered by FHA insurance. The transactions provide the Company with access to liquidity for the non-performing HECM loan portfolio, ongoing servicing fees, and potential residual returns. The transactions are structured as secured borrowings with the reverse mortgage loans included in the consolidated balance sheets as reverse mortgage interests and the related financing included in other nonrecourse debt. Interest is accrued on the outstanding securitized notes and recorded as interest expense in consolidated statements of operations. The HECM securitizations are callable with expected weighted average lives of less than to three years. The Company may re-securitize the previously called loans from earlier HECM securitizations to achieve a lower cost of funds. Financial Covenants The Company’s credit facilities contain various financial covenants which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements, which are measured at the Company’s operating subsidiary, Nationstar Mortgage LLC. The Company was in compliance with its required financial covenants as of December 31, 2020.
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Securitizations and Financings |
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Variable Interest Entities and Securitizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securitizations and Financings | 13. Securitizations and Financings Variable Interest Entities In the normal course of business, the Company enters into various types of on- and off-balance sheet transactions with SPEs determined to be VIEs, which primarily consist of securitization trusts established for a limited purpose. Generally, these SPEs are formed for the purpose of securitization transactions in which the Company transfers assets to an SPE, which then issues to investors various forms of debt obligations supported by those assets. The Company has determined that the SPEs created in connection with certain advance facilities trusts should be consolidated as the Company is the primary beneficiary of each of these entities. Also, the Company consolidated certain reverse mortgage SPEs as it is the primary beneficiary of each of these entities. These SPEs include the Nationstar HECM Loan Trusts. A summary of the assets and liabilities of the Company’s transactions with VIEs included in the Company’s consolidated financial statements is presented below:
(1)Amounts include net purchase discount of $61 and $46 as of December 31, 2020 and 2019, respectively. (2)Refer to advance facilities in Note 12, Indebtedness, for additional information. The following table shows a summary of the outstanding collateral and certificate balances for securitization trusts for which the Company was the transferor, including any retained beneficial interests and MSRs, that were not consolidated by the Company:
The Company has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of December 31, 2020, and 2019, and therefore does not have a significant maximum exposure to loss related to these unconsolidated VIEs. A summary of mortgage loans transferred by the Company to unconsolidated securitization trusts that are 60 days or more past due are presented below:
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Stockholders' Equity and Employee Benefit Plans |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity and Employee Benefit Plans | 14. Stockholders' Equity and Employee Benefit Plans Share-based awards under the 2019 Omnibus Incentive Plan (the “2019 Plan”) include (i) restricted stock units (“RSUs”) granted to employees of the Company, consultants, and non-employee directors and (ii) performance stock units (“PSUs”) granted to certain executive officers. Restricted Stock Units The RSUs are valued at the fair market value of the Company’s common stock on the grant date as defined in the 2019 Plan. The stock awards for employees generally vest in equal installments on each of the first three anniversaries of the awards, provided that (i) the participant remains continuously employed with the Company during that time or (ii) the participant’s employment has terminated by reason of retirement. The stock awards for non-employee directors generally vest the earlier of (a) the first anniversary of the grant date or (b) the date of the next annual stockholders meeting following the grant date. In addition, upon death or disability, the unvested shares of an award will vest. Any forfeiture of restricted stock awards before vesting has been achieved, results in a reduction in the balance of outstanding common shares. Performance Stock Units The PSUs are valued at the fair market value of the Company’s common stock on the grant date as defined in the 2019 Plan and a Monte Carlo simulation model. In March 2020, certain executives of the Company were granted 0.5 million PSUs (the “2020 PSUs”). The 2020 PSUs are eligible to vest and be settled into shares of common stock in an amount between 0% and 200% of a target award based on achievement of total shareholder return performance vesting criteria over a period of three years beginning March 1, 2020, with one-third of the units also eligible to vest based on performance through March 1, 2021. Share-Based Award Activities The following table summarizes the Company’s share-based awards:
The Company recorded $22 and $18 of expenses related to share-based awards during the years ended December 31, 2020 and 2019, respectively. During the five months ended December 31, 2018, the Company recorded $2 of expenses related to share-based awards. In addition, the Predecessor recorded $17 of expenses related to share-based awards during the seven months ended July 31, 2018. As of December 31, 2020, unrecognized compensation expense totaled $42 related to non-vested stock award payments that are expected to be recognized over a weighted average period of 1.24 years. The Company is eligible to receive a tax benefit when the vesting date fair value of an award exceeds the value used to recognize compensation expense at the date of grant. The excess tax benefits recognized by the Company are not material. As of December 31, 2020, approximately 72 thousand Xome stock appreciation rights (“SARs”) were outstanding and can be settled in cash or units of Xome Holdings LLC (at the election of Xome). The SARs generally vest over three years and have a ten-year term. The SARs become exercisable and are recognized to expense upon a liquidity event at Xome, which includes a change in control or an initial public offering of Xome. No expense was recorded for outstanding SARs in 2020, 2019 and 2018 as a liquidity event has not occurred. Employee Benefit Plans The Company sponsors a defined contribution plan (401(k) plan) that covers all full-time employees. The Company matches 100% of participant contributions up to 2% of their total eligible annual base compensation and matches 50% of contributions for the next 4% of each participant’s total eligible annual base compensation. Matching contributions by the Company totaled approximately $25 and $20 for the years ended December 31, 2020 and 2019, respectively.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | 15. Earnings per Share The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. The Series A Preferred Stock is considered participating securities because it has dividend rights determined on an as-converted basis in the event of Company’s declaration of a dividend or distribution for common shares. On October 10, 2018, the Company completed its previously announced 1-for-12 reverse stock split. The Successor period presented has been retrospectively revised to reflect this change. The following table sets forth the computation of basic and diluted net income per common share (amounts in millions, except per share amounts):
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | 16. Income Taxes The components of income tax expense (benefit) were as follows:
The following table presents a reconciliation of the income tax provision computed at the U.S. federal statutory tax rate to the actual effective tax rate:
In 2020, the effective tax rate differed from the statutory tax rate primarily due to state tax adjustments and permanent differences such as nondeductible executive compensation and nondeductible penalties. In 2019, the effective tax rate differed from the statutory tax rate primarily due to the release of the valuation allowance associated with the net operating loss (“NOL”) carryforwards of WMIH and state tax adjustments. The effective tax rate for the five months ended December 31, 2018 differed from the statutory tax rate primarily due to the reversal of the valuation allowance associated with the NOL carryforwards of WMIH, permanent differences including executive compensation disallowed under Internal Revenue Code Section 162(m), penalties and nondeductible meals and entertainment expenses. In the assessment of whether a valuation allowance was required as of December 31, 2020, the Company considered the four sources of taxable income, as follows, under ASC 740-10-30-18: 1.Taxable income in prior carryback year(s) if carryback is permitted under the tax law; 2.Future reversals of existing taxable temporary differences; 3.Tax-planning strategies; and 4.Future taxable income exclusive of reversing temporary differences and carryforwards. As part of the CARES Act enacted on March 27, 2020, the Company noted provisions allowing certain NOLs to be carried back and determined it does not have NOLs available for carryback as a result of this change in law. In determining the appropriate deferred tax asset valuation allowance as of December 31, 2020, the Company considered and evaluated the remaining three sources of income. The Company considered the future reversals of existing taxable temporary differences and identified tax-planning strategies that were considered prudent and feasible. In addition, the Company considered: 1.Internal forecasts of future pre-tax income exclusive of reversing temporary differences and carryforwards; 2.The nature and timing of future reversals of existing temporary differences; 3.Future originating temporary and permanent differences; and 4.NOL carryforward expiration dates. Consistent with the prior year analysis, the Company based its projection of future taxable income on historical pre-tax income and assumed a steady state of operations that would generate cash flows and liquidity sufficient to maintain current operations. The Company considered other factors in its determination of future taxable income that was demonstrated by historical performance. As a result, the Company still believes it is more likely than not that its deferred tax assets will be realized prior to its expiration except for federal 382 limited NOLs and immaterial state NOL carryforwards that begin to expire with the 2020 tax year if unused. A federal and state valuation allowance of $7 and $2, respectively, was recorded as of December 31, 2020 and 2019 related to these NOL carryforwards. The Company does not expect any future tax loss limitations under Sections 382 and 384 that would impact its utilization of remaining federal NOL carryforwards. Accordingly, the Company has federal NOL carryforwards (pre-tax) of approximately $2.6 billion and $4.7 billion as of December 31, 2020 and 2019, respectively. It is expected that the federal NOL carryforwards will begin to expire beginning with the 2026 tax year, if unused. The Company also has immaterial state NOL carryforwards that begin to expire with the 2020 tax year, if unused. Temporary differences and carryforwards that give rise to deferred tax assets and liabilities are comprised of the following:
The Company elected to account for the Global Intangible Low-Taxed Income (“GILTI”) tax expense in the period in which it is incurred. As a result, no deferred tax impact of GILTI has been provided in the consolidated financial statements. The Company files income tax returns in the U.S. federal jurisdiction and numerous U.S. state jurisdictions. With few exceptions, as of December 31, 2020, the Company is no longer subject to U.S. federal and state income tax examinations for tax years prior to 2017. As of December 31, 2020 and 2019, the Company had no unrecognized tax benefits recorded related to uncertain tax positions. The following is a tabular reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits, excluding interest and penalties, for the Predecessor:
As of December 31, 2017, the Predecessor recorded $19 of unrecognized tax benefits related to uncertain tax positions, including $2 in interest and penalties. In the period ended March 31, 2018 the Predecessor took certain actions to remediate the uncertain tax position that existed as of the prior period. As a result, the Predecessor recognized all of the unrecognized tax benefits and recorded an income tax benefit of approximately $6, exclusive of any benefits related to interest and penalties in the period ended March 31, 2018.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | 17. Fair Value Measurements Fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a three-tiered fair value hierarchy has been established based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs). The following describes the methods and assumptions used by the Company in estimating fair values: Cash and Cash Equivalents, Restricted Cash (Level 1) – The carrying amount reported in the consolidated balance sheets approximates fair value. Mortgage Loans Held for Sale (Level 2) – The Company originates mortgage loans in the U.S. that it intends to sell into Fannie Mae, Freddie Mac, and Ginnie Mae (collectively, the “Agencies”) MBS. Additionally, the Company holds mortgage loans that it intends to sell into the secondary markets via whole loan sales or securitizations. The Company measures newly originated prime residential mortgage loans held for sale at fair value. Mortgage loans held for sale are typically pooled together and sold into certain exit markets, depending upon underlying attributes of the loan, such as agency eligibility, product type, interest rate, and credit quality. Mortgage loans held for sale, except for those carried at lower cost or market as described below, are valued on a recurring basis using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. As these prices are derived from market observable inputs, the Company classifies these valuations as Level 2 in the fair value disclosures. The Company may acquire mortgage loans held for sale from various securitization trusts for which it acts as servicer through the exercise of various clean-up call options as permitted through the respective pooling and servicing agreements. The Company has elected to account for these loans at the lower of cost or market. The Company classifies these valuations as Level 2 in the fair value disclosures. The Company may also purchase loans out of a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The Company has elected to carry these loans at fair value. See Note 6, Mortgage Loans Held for Sale, for more information. Mortgage Servicing Rights – Fair Value (Level 3) – The Company estimates the fair value of its forward MSRs on a recurring basis using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on a discounted cash flow model which incorporates prepayment speeds, delinquencies, discount rate, ancillary revenues, float earnings and other assumptions (including costs to service and forbearance rates), with the key assumptions being mortgage prepayment speeds, discount rates, and cost to service. These assumptions are generated and applied based on collateral stratifications including product type, remittance type, geography, delinquency and coupon dispersion. These assumptions require the use of judgment by the Company and can have a significant impact on the fair value of the MSRs. Quarterly, management obtains third-party valuations to assess the reasonableness of the fair value calculations provided by the internal cash flow model. Because of the nature of the valuation inputs, the Company classifies these valuations as Level 3 in the fair value disclosures. See Note 3, Mortgage Servicing Rights and Related Liabilities, for more information. Advances and Other Receivables, Net (Level 3) - Advances and other receivables, net are valued at their net realizable value after taking into consideration the reserves. Advances have no stated maturity. Their net realizable value approximates fair value as the net present value based on discounted cash flow is not materially different from the net realizable value. See Note 4, Advances and Other Receivables, for more information. Reverse Mortgage Interests, Net (Level 3) – The Company’s reverse mortgage interests are primarily comprised of HECM loans that are insured by FHA and guaranteed by Ginnie Mae upon securitization. Quarterly, the Company estimates fair value using discounted cash flows, obtained from a third-party and supplemented with historical loss experience on similar assets, with the discount rate approximating that of similar financial instruments, as observed from recent trades with the HMBS. Key assumptions within the model are based on market participant benchmarks and include discount rates, cost to service, weighted average life of the portfolio, and estimated participating income. Discounted cash flows are applied based on collateral stratifications and include loan rate type, loan status (active vs. inactive), and securitization. Prices are also influenced from both internal models and other observable inputs. The Company determined fair value for all loans based on the applicable tranches established during the Merger valuation. Tranches are segregated based on participation percentages, original loan status as of the Merger date, and interest rate types, and loan status (active vs inactive). Prices are also influenced from both internal models and other observable inputs, including applicable forward interest rate curves. Additionally, historical loss factors are considered within the overall valuation. Because of the unobservable nature of the valuation inputs, the Company classifies these valuations as Level 3 in the fair value disclosures. See Note 5, Reverse Mortgage Interests, for more information. Derivative Financial Instruments (Level 2 and Level 3) – The Company enters into a variety of derivative financial instruments as part of its hedging strategy and measures these instruments at fair value on a recurring basis in the consolidated balance sheets. These derivatives are exchange-traded or traded within highly active dealer markets. In order to determine the fair value of these instruments, the Company utilizes the exchange price or dealer market price for the particular derivative contract; therefore, these contracts are classified as Level 2. In addition, the Company enters into IRLCs and LPCs with prospective borrowers and other loan originators. During the three months ended June 30, 2020, the Company changed the fair value classification of its IRLCs and LPCs derivatives from Level 2 to Level 3. IRLCs and LPCs are carried at fair value primarily based on secondary market prices for underlying mortgage loans, which is observable data, with adjustments made to such observable data for the inherent value of servicing, which is an unobservable input. The fair value is also subject to adjustments for the estimated pull-through rate. The impact of the unobservable input to the overall valuation of IRLCs and LPCs was previously much less significant, resulting in a classification of Level 2 in the fair value hierarchy as of December 31, 2019. During the three months ended June 30,2020, market interest rates continued to decline and fell to record lows, which drove an increase in the volume of the Company’s IRLCs and LPCs and increased the impact of the unobservable input on the overall valuation of IRLCs and LPCs. Such increased impact of the unobservable input on the overall valuation resulted in a classification of Level 3 in the fair value hierarchy as of June 30, 2020. The Company adjusts the outstanding IRLCs with prospective borrowers based on an expectation that it will be exercised, and the loan will be funded. IRLCs and LPCs are recorded in derivative financial instruments in the consolidated balance sheets. The Company has entered into Eurodollar futures contracts as part of its hedging strategy. The futures contracts are measured at fair value on a recurring basis and classified as Level 2 in the fair value disclosures as the valuation is based on market observable data. Derivative financial instruments are recorded in other assets and payables and other liabilities within the consolidated balance sheets. See Note 11, Derivative Financial Instruments, for more information. Loans Subject to Repurchase from Ginnie Mae (Level 2) – As the Company has the unilateral right to repurchase these loans at the unpaid principal balance, the carrying amount, which is based on the unpaid principal balance, approximates fair value. See Note 9, Loans Subject to Repurchase from Ginnie Mae, for more information. Advance Facilities and Warehouse Facilities (Level 2) – As the underlying warehouse and advance finance facilities bear interest at a rate that is periodically adjusted based on a market index, the carrying amount reported on the consolidated balance sheets approximates fair value. See Note 12, Indebtedness, for more information. Unsecured Senior Notes (Level 1) – The fair value of unsecured senior notes, which are carried at amortized cost, is based on quoted market prices and is considered Level 1 from the market observable inputs used to determine fair value. See Note 12, Indebtedness, for more information. Excess Spread Financing (Level 3) – The Company estimates fair value on a recurring basis based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, recapture rates and discount rate. As these prices are derived from a combination of internally developed valuation models and quoted market prices based on the value of the underlying MSRs, the Company classifies these valuations as Level 3 in the fair value disclosures. Excess spread financing is recorded in MSR related liabilities within the consolidated balance sheets. See Note 2, Significant Accounting Policies, for more information. Mortgage Servicing Rights Financing Liability (Level 3) - The Company estimates fair value on a recurring basis based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being advance financing rates and annual advance recovery rates. As these assumptions are derived from internally developed valuation models based on the value of the underlying MSRs, the Company classifies these valuations as Level 3 in the fair value disclosures. Mortgage servicing rights financing liability is recorded in MSR related liabilities within the consolidated balance sheets. See Note 3, Mortgage Servicing Rights and Related Liabilities, for more information. Participating Interest Financing (Level 3) – The Company estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating that of similar financial instruments. As the prices are derived from both internal models and other observable inputs, the Company classifies these valuations as Level 3 in the fair value disclosures. Participating interest financing is recorded in other nonrecourse debt within the consolidated balance sheets. See Note 5, Reverse Mortgage Interests, and Note 12, Indebtedness, for more information. HECM Securitizations (Level 3) – The Company estimates fair value using a market approach by utilizing the fair value of executed HECM securitizations. Since the executed HECM securitizations are private placements, the Company classifies these valuations as Level 3 in the fair value disclosures. HECM securitizations are recorded in other nonrecourse debt within the consolidated balance sheets. See Note 12, Indebtedness, for more information. The following table presents the estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured at fair value on a recurring basis:
The tables below present a reconciliation for all of the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis:
No transfers were made in or out of Level 3 fair value assets and liabilities for the year ended December 31, 2020, with the exception of the change in classification for IRLCs and LPCs from Level 2 fair value assets to Level 3 fair value assets as discussed above. No transfers were made into Level 3 fair value assets and liabilities for the Company during the year ended December 31, 2019. During the year ended December 31, 2019, $12 was transferred from mortgage loans held for investment, a Level 3 fair value asset, to mortgage loans held for sale, a Level 2 fair value asset, in connection with the collapse of Trust 2009-A, the Company’s legacy portfolio, and sale of the loans held in the trust. The tables below present the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities:
(1)Presented in whole dollar amounts. (2)Average life is included for informational purposes. The tables below present a summary of the carrying amount and estimated fair value of the Company’s financial instruments not carried at fair value:
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Capital Requirements |
12 Months Ended |
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Dec. 31, 2020 | |
Mortgage Banking [Abstract] | |
Capital Requirements | 18. Capital Requirements Fannie Mae, Freddie Mac, Ginnie Mae and certain private label mortgage investors require the Company to maintain minimum net worth (“capital”) requirements, as specified in the respective selling and servicing agreements. In addition, these investors may require capital ratios in excess of the stated requirements to approve large servicing transfers. To the extent that these requirements are not met, the Company’s secondary market investors may utilize a range of remedies ranging from sanctions, suspension or ultimately termination of the Company’s selling and servicing agreements, which would prohibit the Company from further originating or securitizing these specific types of mortgage loans or being an approved servicer. The Company’s various capital requirements related to its outstanding selling and servicing agreements are measured based on the Company’s operating subsidiary, Nationstar Mortgage LLC. As of December 31, 2020, the Company was in compliance with its selling and servicing capital requirements.
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Commitments and Contingencies |
12 Months Ended |
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Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 19. Commitments and Contingencies Litigation and Regulatory The Company and its subsidiaries are routinely and currently involved in a significant number of legal proceedings, including, but not limited to, judicial, arbitration, regulatory and governmental proceedings related to matters that arise in connection with the conduct of the Company’s business. The legal proceedings are at varying stages of adjudication, arbitration or investigation and are generally based on alleged violations of consumer protection, securities, employment, contract, tort, common law fraud and other numerous laws, including, without limitation, the Equal Credit Opportunity Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act, Real Estate Settlement Procedures Act, National Housing Act, Homeowners Protection Act, Service Member’s Civil Relief Act, Telephone Consumer Protection Act, Truth in Lending Act, Financial Institutions Reform, Recovery, and Enforcement Act of 1989, unfair, deceptive or abusive acts or practices in violation of the Dodd-Frank Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Home Mortgage Disclosure Act, Title 11 of the United States Code (aka the “Bankruptcy Code”), False Claims Act and Making Home Affordable loan modification programs. In addition, along with others in its industry, the Company is subject to repurchase and indemnification claims and may continue to receive claims in the future, regarding alleged breaches of representations and warranties relating to the sale of mortgage loans, the placement of mortgage loans into securitization trusts or the servicing of mortgage loans securitizations. The Company is also subject to legal actions or proceedings related to loss sharing and indemnification provisions of its various acquisitions. Certain of the pending or threatened legal proceedings include claims for substantial compensatory, punitive and/ or statutory damages or claims for an indeterminate amount of damages. The Company operates within highly regulated industries on a federal, state and local level. In the normal and ordinary course of its business, the Company is routinely subject to extensive examinations, investigations, subpoenas, inquiries and reviews by various federal, state and local governmental, regulatory and enforcement agencies, including the Consumer Financial Protection Bureau, the Securities and Exchange Commission, the Department of Justice, the Office of the Special Inspector General for the Troubled Asset Relief Program, the U.S. Department of Housing and Urban Development, various State mortgage banking regulators and various State Attorneys General, related to the Company’s residential loan servicing and origination practices, its financial reporting and other aspects of its businesses. Any pending or potential future investigations, subpoenas, examinations or inquiries may lead to administrative, civil or criminal proceedings or settlements, and possibly result in remedies including fines, penalties, restitution, or alterations in the Company’s business practices, and additional expenses and collateral costs. The Company is cooperating fully in these matters. Responding to these matters requires the Company to devote substantial resources, resulting in higher costs and lower net cash flows. Adverse results in any of these matters could further increase the Company’s operating expenses and reduce its revenues, require it to change business practices and limit its ability to grow and otherwise materially and adversely affect its business, reputation, financial condition and results of operation. The Company seeks to resolve all legal proceedings and other matters in the manner management believes is in the best interest of the Company and contests liability, allegations of wrongdoing and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter. The Company has entered into agreements with a number of entities and regulatory agencies that toll applicable limitations periods with respect to their claims. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with outstanding legal and regulatory and governmental proceedings utilizing the latest information available. Where available information indicates that it is probable, a liability has been incurred, and the Company can reasonably estimate the amount of the loss, an accrued liability is established. The actual costs of resolving these proceedings may be substantially higher or lower than the amounts accrued. As a legal matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is both probable and estimable. If, at the time of evaluation, the loss contingency is not both probable and reasonably estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and reasonably estimable. Once the matter is deemed to be both probable and reasonably estimable, the Company will establish an accrued liability and record a corresponding amount to legal-related expense. The Company will continue to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Legal-related expense for the Company, which includes legal settlements and the fees paid to external legal service providers, of $51 and $64 for the years ended December 31, 2020 and the December 31, 2019, respectively, was included in general and administrative expenses on the consolidated statements of operations. For matters for which a loss is probable or reasonably possible in future periods, whether in excess of a related accrued liability or where there is no accrued liability, the Company may be able to estimate a range of possible loss. In determining whether it is possible to provide an estimate of loss or range of possible loss, the Company reviews and evaluates its material legal matters on an ongoing basis, in conjunction with any outside counsel handling the matter. Management currently believes the aggregate range of reasonably possible loss is $3 to $16 in excess of the accrued liability (if any) related to those matters as of December 31, 2020. This estimated range of possible loss is based upon currently available information and is subject to significant judgment, numerous assumptions and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary substantially from the current estimate. Those matters for which an estimate is not possible are not included within the estimated range. Therefore, this estimated range of possible loss represents what management believes to be an estimate of possible loss only for certain matters meeting these criteria. It does not represent the Company’s maximum loss exposure and the Company cannot provide assurance that its litigations reserves will not need to be adjusted in the future. Thus, the Company’s exposure and ultimate losses may be higher, possibly significantly so, than the amounts accrued or this aggregate amount. In the Company’s experience, legal proceedings are inherently unpredictable. One or more of the following factors frequently contribute to this inherent unpredictability: the proceeding is in its early stages; the damages sought are unspecified, unsupported or uncertain; it is unclear whether a case brought as a class action will be allowed to proceed on that basis or, if permitted to proceed as a class action, how the class will be defined; the other party is seeking relief other than or in addition to compensatory damages (including, in the case of regulatory and governmental investigations and inquiries, the possibility of fines and penalties); the matter presents meaningful legal uncertainties, including novel issues of law; the Company has not engaged in meaningful settlement discussions; discovery has not started or is not complete; there are significant facts in dispute; predicting possible outcomes depends on making assumptions about future decisions of courts or governmental or regulatory bodies or the behavior of other parties; and there are a large number of parties named as defendants (including where it is uncertain how damages or liability, if any, will be shared among multiple defendants). Generally, the less progress that has been made in the proceedings or the broader the range of potential results, the harder it is for the Company to estimate losses or ranges of losses that is reasonably possible the Company could incur. Based on current knowledge, and after consultation with counsel, management believes that the current legal accrued liability within payables and accrued liabilities, is appropriate, and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the consolidated financial condition of the Company, although the outcome of such proceedings could be material to the Company’s operating results and cash flows for a particular period depending, on among other things, the level of the Company’s revenues or income for such period. However, in the event of significant developments on existing cases, it is possible that the ultimate resolution, if unfavorable, may be material to the Company’s consolidated financial statements. Other Loss Contingencies As part of the Company’s ongoing operations, it acquires servicing rights of forward and reverse mortgage loan portfolios that are subject to indemnification based on the representations and warranties of the seller. From time to time, the Company will seek recovery under these representations and warranties for incurred costs. The Company believes all balances sought from sellers recorded in advances and other receivables and reverse mortgage interests represent valid claims. However, the Company acknowledges that the claims process can be prolonged due to the required time to perfect claims at the loan level. Because of the required time to perfect or remediate these claims, management relies on the sufficiency of documentation supporting the claim, current negotiations with the counterparty and other evidence to evaluate whether a reserve is required for non-recoverable balances. In the absence of successful negotiations with the seller, all amounts claimed may not be recovered. Balances may be written-off and charged against earnings when management identifies amounts where recoverability from the seller is not likely. As of December 31, 2020, the Company believes all recorded balances for which recovery is sought from the seller are valid claims, and no evidence suggests additional reserves are warranted. Loan and Other Commitments The Company enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. The Company also enters into LPCs with prospective sellers. These loan commitments are treated as derivatives and are carried at fair value. See Note 11, Derivative Financial Instruments, for more information. The Company had certain reverse MSRs, reverse MSLs and reverse mortgage loans related to approximately $18,091 and $22,725 of UPB in reverse mortgage loans as of December 31, 2020 and 2019, respectively. As a servicer for these reverse mortgage loans, among other things, the Company is obligated to fund borrowers’ draws to the loan customers as required in accordance with the loan agreement. As of December 31, 2020 and 2019, the Company’s maximum unfunded advance obligation to fund borrower draws related to these MSRs and loans was approximately $2,202 and $2,617, respectively. Upon funding any portion of these draws, the Company expects to securitize and sell the advances in transactions that will be accounted for as secured borrowings.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | 20. Segment Information The Company’s segments are based upon the Company’s organizational structure, which focuses primarily on the services offered. Corporate functional expenses are allocated to individual segments based on the actual cost of services performed, direct resource utilization, estimate of percentage use for shared services or headcount percentage for certain functions. Facility costs are allocated to individual segments based on cost per headcount for specific facilities utilized. Group insurance costs are allocated to individual segments based on global cost per headcount. Non-allocated corporate expenses include the administrative costs of executive management and other corporate functions that are not directly attributable to Company’s operating segments. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties. In the second quarter of 2020, the Company updated its presentation of segment assets to be aligned with a change in the reporting package provided to the Chief Operating Decision Maker. The presentation change had no impact on the segments' operations. Assets allocated to the Servicing segment include MSRs; advances and other receivables, except for co-issue MSR holdback; Servicing related mortgage loans held for sale; and other assets including property, plant and equipment, lease-related assets, prepaid assets, and goodwill. Assets allocated to Originations segment include co-issue MSR holdback in advances and other receivables; Originations related mortgage loans held for sale; derivative assets; and other assets including property, plant and equipment, lease-related assets, prepaid assets, and goodwill. Assets allocated to the Xome segment include cash and cash equivalents; tax-related assets; receivables; and other assets including property, plant and equipment, lease-related assets, prepaid assets, goodwill, and other intangible assets. All assets that are not specifically identified or allocated to a reporting segment are reported as part of Corporate/Other and include cash and cash equivalents; tax-related assets; and intangibles assets excluding goodwill and assets allocated to Xome. Eliminations are also included in Corporate/Other. Prior year financial information has been adjusted retrospectively to reflect the updated presentation. The following tables present financial information by segment:
(1)For the Predecessor’s Servicing segment results purposes, all revenue is attributable to servicing the portfolio. Therefore, $25 of net gain on mortgage loans was moved to revenues - service related, net during the seven months ended July 31, 2018. For consolidated results purposes, these amounts were reclassed to net gain on mortgage loans held for sale.
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Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation For the purpose of financial statement presentation, Mr. Cooper was determined to be the accounting acquirer in the Merger, and Nationstar’s assets and liabilities were recorded at estimated fair value as of the acquisition date. Mr. Cooper’s interim consolidated financial statements for periods following the Merger closing are labeled “Successor” and reflect the acquired assets and assumed liabilities from Nationstar. Under Securities and Exchange Commission (“SEC”) rules, when a registrant succeeds to acquire substantially all of the business of another entity and the registrant’s own operations before the succession appear insignificant relative to the operations assumed or acquired, the registrant is required to present financial information for the acquired entity (the “Predecessor”) for all comparable periods being presented before the acquisition. Due to the acquisition, the Predecessor and Successor financial statements have been prepared on different basis of accounting and are therefore not comparable. Pursuant to the Merger, Nationstar is considered the predecessor Company. Therefore, the Company is providing additional information in the accompanying consolidated financial statements regarding Nationstar’s business for the period prior to July 31, 2018. The predecessor Company’s financial information is labeled “Predecessor” in these consolidated financial statements. The consolidated financial statements of the Company and Predecessor have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The significant accounting policies described below, together with the other notes that follow, are an integral part of the consolidated financial statements.
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Basis of Consolidation | Basis of Consolidation The basis of consolidation described below was adopted by Nationstar and applied to the Predecessor financial statements for the periods impacted by the adoption. The Successor’s financial statements reflect the adoption of such standards. The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, other entities in which the Company has a controlling financial interest, and those variable interest entities (“VIE”) where the Company’s wholly owned subsidiaries are the primary beneficiaries. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that the Company became the primary beneficiary through the date the Company ceases to be the primary beneficiary. The Company applies the equity method of accounting to investments where it is able to exercise significant influence, but not control, over the policies and procedures of the entity and owns less than 50% of the voting interests. Investments in certain companies over which the Company does not exert significant influence are accounted for as cost method investments. Intercompany balances and transactions on consolidated entities have been eliminated.
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Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates due to factors such as adverse changes in the economy, increases in interest rates, secondary market pricing for loans held for sale and derivatives, strength of underwriting and servicing practices, changes in prepayment assumptions, declines in home prices or discrete events adversely affecting specific borrowers, uncertainties in the economy from the COVID-19 pandemic, and such differences could be material.
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Recent Accounting Guidance Adopted | Recent Accounting Guidance Adopted Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326), (“ASU 2016-13”) requires expected credit losses for financial instruments held at the reporting date to be measured based on historical experience, current conditions and reasonable and supportable forecasts, which is referred to as the current expected credit loss (“CECL”) methodology. The update eliminates the initial recognition of credit losses on an incurred basis in current GAAP and instead reflects an entity’s current estimate of all expected credit losses over the life of the asset. Previously, when credit losses were measured under GAAP, an entity generally only considered past events and current conditions in measuring the incurred loss. The new standard will reflect management’s best estimate of all expected credit losses for the Company’s financial assets that are recognized at amortized cost. The guidance was effective for the Company as of January 1, 2020, with a cumulative-effect adjustment to retained earnings as of that date. Based upon management’s scoping analysis, the Company determined that reverse mortgage interests, net of reserves, advances and other receivables, net of reserves, and certain financial instruments included in other assets are within the scope of ASU 2016-13. Certain financial instruments within these respective line items have been determined to have limited expected credit-related losses due to the contractual servicing agreements with agencies and loan product guarantees. For advances and other receivables, net, the Company determined that the majority of estimated losses are due to servicing operational errors and credit-related losses are not significant because of the contractual relationships with the agencies. For reverse mortgage interests, the Company determined that the guarantee from Federal Housing Administration (“FHA”) on Home Equity Conversion Mortgage (“HECM”) loan products limits credit-related losses to an immaterial amount with substantially all losses related to servicing operational errors. For other assets, primarily trade receivables, the Company determined that these are short-term in nature (less than one year), and the estimated credit-related losses over the life of these receivables are similar to those resulting from the Company’s existing loss reserve process. For each of the aforementioned financial instruments carried at amortized cost, the Company enhanced its processes to consider and include the requirements of ASU 2016-13, as applicable, into the determination of credit-related losses. On January 1, 2020, the Company adopted ASU 2016-13 using the modified retrospective method for the above-mentioned financial assets. Results for reporting periods after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recorded transition adjustments aggregating to a net increase of $9, or $7 after tax, to retained earnings and a reduction of $7 to the advances and other receivables reserve and a $2 reduction in the other assets reserves, as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13. In connection with adoption of ASU 2016-13, the Company updated its accounting policies as follows: For certain financial instruments included in advances and other receivables, net, and certain trade receivables and accrued revenues included in other assets that are within the scope of ASU 2016-13, the reserve methodology was revised to consider CECL losses. The revised CECL methodology considers expected lifetime loss rates calculated from historical data using a weighted average life to determine the current expected credit loss required. Due to the nature of the financial instrument, reverse mortgage interests, net of reserves, and advances and other receivables had limited impact from the adoption of CECL to the reserve methodology. See Note 4, Advances and Other Receivables, and Note 5, Reverse Mortgage Interests for additional information. Factors that influenced management’s current estimate of expected credit losses for certain advances and other receivables and certain trade receivables and accrued revenues included the following: historical collection and loss rates, passage of time, weighted average life of receivables, and various qualitative factors including current economic conditions. Factors that influenced management’s current estimate of expected credit related losses for certain reverse mortgage interests included the following: historical collection and loss rates, foreclosure timelines, and values of underlying collateral. Accounting Standards Update No. 2018-13, Fair Value Measurement (Topic 820) - Changes to the Disclosure Requirements for Fair Value Measurement, (“ASU 2018-13”) removes the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 fair value measurement methodologies, the policy for timing of transfers between levels and the valuation processes for Level 3 fair value measurements. It also adds a requirement to disclose changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 measurements. For certain unobservable inputs, entities may disclose other quantitative information in lieu of the weighted average if the other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The Company adopted ASU 2018-13 on January 1, 2020. The guidance does not have a material impact to the disclosures currently provided by the Company.
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Cash, Cash Equivalents and Restricted Cash | Cash and Cash Equivalents Cash and cash equivalents include unrestricted cash on hand and other interest-bearing investments with original maturity dates of 90 days or less. Restricted Cash Restricted cash includes collected funds pledged to certain advance and warehouse facilities, collected fees payable to third parties, and contractual escrow funds.
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Mortgage Servicing Rights (MSRs) | Mortgage Servicing Rights (“MSR”) The Company recognizes the rights to service mortgage loans for others, or MSRs, whether acquired or as a result of the sale of loans the Company originates with servicing retained, as assets. The Company initially records all MSRs at fair value. MSRs related to reverse mortgages are subsequently recorded at amortized cost. The Company has elected to subsequently measure forward MSRs at fair value. For MSRs initially recorded and subsequently measured at fair value, the fair value of the MSRs is based upon the present value of the expected future net cash flows related to servicing the underlying loans. The Company determines the fair value of the MSRs by the use of a discounted cash flow model which incorporates prepayment speeds, delinquencies, discount rate, ancillary revenues, float earnings and other assumptions (including costs to service and forbearance rates) that management believes are consistent with the assumptions that other similar market participants use in valuing the MSRs. The key assumptions to determine fair value include prepayment speed, discount rate and cost to service. The credit quality and stated interest rates of the forward loans underlying the MSRs affects the assumptions used in the cash flow models. The Company obtains third-party valuations quarterly to assess the reasonableness of the fair value calculated by the cash flow model. Fair value adjustments are recorded within revenues - service related, net in the consolidated statements of operations. Additionally, the Company owns servicing rights for certain reverse mortgage loans. For this separate class of servicing rights, the Company initially records an MSR or mortgage servicing liability (“MSL”) on the acquisition date based on the fair value of the future cash flows associated with the pool and whether adequate compensation is to be received for servicing. The Company applies the amortized cost method for subsequent measurement of the loan pools with the capitalized cost of the MSRs amortized in proportion and over the period of the estimated net future servicing income and the MSL accreted ratably over the expected life of the portfolio. The expected period of the estimated net servicing income is based, in part, on the expected prepayment period of the underlying mortgages. The Company adjusts MSR amortization and MSL accretion prospectively in response to changes in estimated projections of future cash flows. Reverse MSRs and MSLs are stratified and evaluated each reporting period for impairment or increased obligation, as applicable, based on predominant risk characteristics of the underlying serviced loans. The Company has determined that the predominant characteristic inherent in the reverse mortgage servicing portfolios is the product type (i.e. GNMA vs FNMA). Impairment of the reverse MSR or additional obligation associated with the MSL is recorded through a valuation allowance, unless considered other-than-temporary, and is recognized as a charge to general and administrative expense. Amounts amortized or accreted are recognized as an adjustment to revenues - service related, net, along with monthly servicing fees received, generally stated at a fixed rate per loan.
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Advances and Other Receivables, Net | Advances and Other Receivables, Net The Company advances funds to or on behalf of the investors when the borrower fails to meet contractual payments (e.g., principal, interest, property taxes, insurance) in accordance with terms of its servicing agreements. Other receivables consist of advances funded to maintain and market underlying loan collateral through foreclosure and ultimate liquidation on behalf of the investors. Advances are recovered from borrowers for performing loans and from the investors and loan proceeds for non-performing loans. The Company may also acquire servicer advances in connection with the acquisition of MSRs through asset acquisitions or business combinations. These advances are recorded at their relative fair value amounts upon acquisition. The Company records receivables upon determining that collection of amounts due from loan proceeds, investors, mortgage insurers, or prior servicers is probable. Reserves related to recoverability of advances and other receivables are discussed below in Reserves for Forward Servicing Activity. As a result of the Merger and the acquisition of Pacific Union, the Advances and Other Receivables assets were recorded at their estimated fair value as of the acquisition date. In both transactions, recording the estimated fair value resulted in a discount within Advances and Other Receivables. Subsequently, this discount will be utilized as the advance balances associated with the discount are recovered or written off.
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Reverse Mortgage Interests, Net | Reverse Mortgage Interests, Net Reverse mortgage interests are comprised of the Company’s interest in reverse mortgage loans that consists of participating interests in Home Equity Conversion Mortgages (“HECMs”) mortgage-backed securities (“HMBS”), other interests securitized and unsecuritized interests, as well as related claims receivables and real estate owned (“REO”) related receivables. The Company services previously acquired interests in reverse mortgage loans insured by the Federal Housing Administration (“FHA”) known as HECMs. HECMs provide seniors aged 62 and older with a loan secured by their home which can be taken as a lump sum, line of credit, or scheduled payments. HECM loan balances grow over the loan term through borrower draws of scheduled payments or line of credit draws, as well as through the accrual of interest, servicing fees and FHA mortgage insurance premiums. Growth in the loan balances are capitalized and recorded as reverse mortgage interests within the Company’s consolidated balance sheet. Additionally, loan balances including borrower draws, mortgage insurance premiums, and servicing fees may be eligible for securitization through Ginnie Mae’s HMBS program. In accordance with FHA guidelines, HECMs are designed to repay through foreclosure and subsequent liquidation of loan collateral after the loan becomes due and payable. Any shortfalls experienced by the servicer of the HECM through the foreclosure and liquidation process can be claimed to FHA in accordance with applicable guidelines. Other interests securitized consist of reverse mortgage interests that no longer meet HMBS program eligibility criteria and have been repurchased out of HMBS. These reverse mortgage interests have subsequently been transferred to private securitization trusts and are accounted for as a secured borrowing. Unsecuritized interests include repurchased HECM loans for which the Company is required to repurchase from the HMBS pool when the outstanding principal balance of the HECM loan is equal to or greater than 98% of the maximum claim amount (“MCA”) established at origination in accordance with HMBS program guidelines. As the HECM loan moves through the foreclosure and claims process, the Company classifies reverse mortgage interests as REO related receivables and HECM related receivables, respectively. Interest income is accrued monthly based upon the borrower interest rates within interest income on the consolidated statements of operations. The Company includes the cash outflow from funding these amounts as operating activities in the consolidated statements of cash flows as a component of reverse mortgage interests. The Company is an authorized Ginnie Mae (“GNMA”) HMBS program issuer and servicer. In accordance with GNMA HMBS program guidelines, borrower draws of scheduled payments or line of credit draws, servicing fee and interest accruals and mortgage insurance premium accruals are eligible for HMBS participation securitizations as each of these items increases underlying HECM loan balances. The Company pools and securitizes such eligible items into GNMA HMBS as issuer and servicer. In accordance with the HMBS program, issuers are responsible for purchasing HECM loans out of the HMBS pool when the outstanding principal balance of the related HECM loan is equal or greater than 98% of the maximum claim amount at which point the HECM loans are no longer eligible to remain in the HMBS pool. Upon purchase from the HMBS pool, the Company will assign active HECM loans to the U.S. Department of Housing and Urban Development (“HUD”) or a prior servicer (as applicable and permitted by acquisition agreements) or service inactive HECM loans through foreclosure and liquidation. Based upon the structure of the GNMA HMBS program, the Company has determined that the securitizations of the HECM loans into HMBS pools do not meet all requirements for sale accounting. Accordingly, these transactions are accounted for as secured borrowings. If the Company has repurchased an inactive HECM loan that cannot be assigned to HUD, the Company may pool and securitize these loans into a private HECM securitization. These securitizations are also recorded as secured borrowings in the consolidated balance sheets. Interest expense on the participating interest financing is accrued monthly based upon the underlying HMBS rates and is recorded to interest expense in the consolidated statements of operations. Both the acquisition and assumption of HECM loans and related GNMA HMBS debt are presented as investing and financing activities, respectively, in the consolidated statements of cash flows. Subsequent proceeds received from securitizations, and subsequent repayments on the securitized debt are presented as financing activities in the consolidated statements of cash flows. Reserves related to recoverability of reverse mortgage interests are discussed below in Reserves for Reverse Mortgage Interests. In connection with the Merger, the Company recorded the acquired reverse mortgage interests at estimated fair value as of the acquisition date, which resulted in a net purchase discount associated with financial and operational losses on reverse mortgage interests associated with servicing the loans through foreclosure and collateral liquidation. The premium and discount are amortized and accreted, respectively, based on the effective yield method, whereby the Company updates its prepayment assumptions for actual prepayments on a quarterly basis. Consistent with the Company’s accounting policy, the Company calculates reserve requirements on the reverse mortgage interests portfolio each reporting period and compares such calculated reserve requirements against the remaining net purchase discount. If the calculated reserve requirements exceed the remaining net purchase discount, the Company will record an additional reserve and associated provision to general and administrative expense.
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Mortgage Loans Held for Sale | Mortgage Loans Held for Sale The Company originates prime residential mortgage loans with the intention of selling such loans on a servicing-retained basis in the secondary market. As these loans are originated with intent to sell, the loans are classified as held for sale and the Company has elected to measure these loans held for sale at fair value. The Company estimates fair value of mortgage loans held for sale by using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. In connection with the Company’s election to measure originated mortgage loans held for sale at fair value, the Company records the loan originations fees when earned, net of direct loan originations costs associated with these loans. Loan origination fees, gains or losses recognized upon sale of loans, and fair value adjustments are recorded in net gain on sale of mortgage loans held for sale in the consolidated statements of operations. From time to time, the Company exercises its right to repurchase individual delinquent loans in GNMA securitization pools to minimize interest spread losses, to re-pool into new GNMA securitizations or to otherwise sell to third-party investors. The Company has the right to repurchase any individual loan in a GNMA securitization pool if that loan meets certain criteria, including payments not being received from borrowers for greater than 90 days. It is the Company’s intention to re-pool into new GNMA securitizations upon re-performance of the loan or to otherwise sell to third-party investors; therefore, the Company classifies such loans as loans held for sale and has elected to measure these repurchased loans at fair value.
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MSR Related Liabilities - Nonrecourse | MSR Related Liabilities - Nonrecourse Excess Spread Financing In conjunction with the acquisition of certain MSRs on various pools of residential mortgage loans (the “Portfolios”), the Company entered into sale and assignment agreements related to its right to servicing fees, under which the Company sells to third parties the right to receive a portion of the excess cash flow generated from the Portfolios after receipt of a fixed base servicing fee per loan. The excess cash flow payments made to third parties are considered counterparty payments, which are recorded as an adjustment to the Company’s revenues - service related, net in the consolidated statement of operations. The agreements consist of two components - current excess spread, or remittance of a percentage of excess spread on currently serviced loans, and future excess spread, or the obligation to transfer currently serviced loans that have been refinanced into current excess spread or a replacement loan of similar economic characteristics into the portfolios. The new or replacement loan will be governed by the same terms set forth in the sale and assignment agreement described above. The sale of these rights is accounted for as secured borrowings, with the total proceeds received being recorded as a component of MSR related liabilities - nonrecourse at fair value in the consolidated balance sheets. The Company determines the effective interest rate on these liabilities and allocates total repayments between interest expense and the outstanding liability. The Company has elected to measure the outstanding financings related to the excess spread financing agreements at fair value with all changes in fair value recorded to revenues - service related, net in the consolidated statements of operations. The fair value on excess spread financing is based on the present value of future expected discounted cash flows with the discount rate approximating current market value. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, recapture rates and discount rate. Mortgage Servicing Rights Financing From December 2013 through June 2014, the Predecessor entered into agreements to sell a contractually specified base servicing fee component of certain MSRs and servicing advances under specified terms to a joint venture capitalized by third-party investors. The purpose of this transaction was to facilitate the financing of advances for private label mortgages. The Company continues to be the named servicer and, for accounting purposes, ownership of the mortgage servicing rights continues to reside with the Company. Accordingly, the Company records the MSR and an MSR financing liability associated with this transaction in its consolidated balance sheets. The MSR financing liability reflects the incremental costs of this transaction relative to the market participant assumptions contained in the MSR valuation. The Company had MSR financing liability of $33 and $37 as of December 31, 2020 and 2019, respectively. Counterparty payments related to this financing arrangement are recorded as an adjustment to the Company’s revenues - service related, net in the consolidated statement of operations. The Company has elected to measure the mortgage servicing rights financing liabilities at fair value with all changes in fair value recorded to revenues - service related, net in the consolidated statements of operations. The fair value on mortgage servicing right financings is based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being advance financing rates and advance recovery rates.
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Property and Equipment, Net | Property and Equipment, Net Property and equipment is comprised of building, furniture, fixtures, leasehold improvements, computer software, and computer hardware. These assets are stated at cost less accumulated depreciation. Repairs and maintenance are expensed as incurred which is included in general and administrative expenses in the consolidated statements of operations. Depreciation, which includes depreciation and amortization on capital leases, is recorded using the straight-line method over the estimated useful lives of the related assets. Cost and accumulated depreciation applicable to assets retired or sold are eliminated from the accounts, and any resulting gains or losses are recognized at such time through a charge or credit to general and administrative expenses. Costs to internally developed computer software are capitalized during the development stage and include external direct costs of materials and services as well as employee costs related to time spent on the project. Long-lived assets shall be tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of its property and equipment might not be recoverable. The Company will perform a quarterly evaluation to determine whether such events have occurred. If events and circumstances indicate the carrying values exceed the fair value of the fixed assets, the Company will proceed with an impairment testing. Impairment loss shall be recognized only if the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. The impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value.
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Leases | Leases If the Company determines an arrangement contains a lease or lease components, then the lease will be accounted for under Accounting Standards Codification (“ASC”) 842 and classified as either a finance or operating lease. At the lease commencement date, the Company recognizes a leased right-of-use (“ROU”) asset and corresponding lease liability based on the present value of the lease payments over the lease term. Leased ROU assets are tested for impairment in accordance with ASC 360, Property, Plant, and Equipment. ASC 842 provides for two policy elections. The first refers to leases with a term of 12 months or less and the second relates to separating lease components from nonlease components. The Company elected not to recognize lease assets and lease liabilities for leases with a term of 12 months or less and not to separate lease components from nonlease components. Leases primarily consist of various corporate and other office facilities. Operating leases in which the Company is the lessee are recorded as operating lease ROU assets and operating lease liabilities, which are included in other assets and payables and other liabilities, respectively, on the consolidated balance sheets. Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental borrowing rate at the lease commencement date, as most of the Company’s leases do not provide an implicit rate. ROU assets are further adjusted for lease incentives. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term and is recorded in general and administrative expenses in the consolidated statements of operations. Operating lease activity is included in operating activities within the consolidated statements of cash flows. A finance lease is recorded as a leased property or equipment asset with a corresponding finance lease liability at an amount equal to the present value of minimum lease payments at the commencement date. Assets acquired under a finance lease are depreciated on a straight-line basis based on the shorter of the Company’s depreciation policy for owned assets (i.e. useful life) or the lease term. Lease payments are allocated between a reduction of the lease liability and interest expense to produce a constant periodic interest rate on the remaining balance of the lease liability. Interest expense on the lease liability is recognized separately from the amortization of the leased ROU asset in the consolidated statements of operations. Finance lease assets and liabilities are included in property and equipment, net, and payables and other liabilities on the consolidated balance sheets, respectively. Finance lease activity is included in financing activities within the consolidated statements of cash flows.
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Derivative Financial Instruments | Derivative Financial Instruments Derivative instruments are used as part of the overall strategy to manage exposure to market risks primarily associated with fluctuations in interest rates related to originations. The Company recognizes all derivatives at fair value on a recurring basis in other assets and payables and other liabilities on its consolidated balance sheets. The Company treats all of its derivative instruments as economic hedges, therefore none of its derivative instruments are designated as accounting hedges. Derivative instruments utilized by the Company primarily include interest rate lock commitments (“IRLCs”), loan purchase commitments (“LPCs”), forward Mortgage Backed Securities (“MBS”) purchase commitments, Eurodollar futures, Treasury futures, interest rate swap agreements and interest rate caps. IRLCs represent an agreement to extend credit to a mortgage loan applicant, or an agreement to purchase a loan from a third-party originator, whereby the interest rate on the loan is set prior to funding. The fair values of mortgage loans held for sale, which are held in inventory awaiting sale into the secondary market, and interest rate lock commitments, are subject to changes in mortgage interest rates from the date of the commitment through the sale of the loan into the secondary market. As a result, the Company is exposed to interest rate risk during the period from the date of the lock commitment through (i) the lock commitment cancellation or expiration date; or (ii) the date of sale into the secondary mortgage market. IRLCs are considered freestanding derivatives and are recorded at fair value at inception. Loan commitments generally range between 30 days and 90 days, and the Company typically sells mortgage loans within 30 days of origination. Changes in fair value subsequent to inception are based on changes in the fair value of the underlying loan, and changes in the probability that the loan will fund within the terms of the commitment. Any changes in fair value are recorded in earnings as a component of net gain on mortgage loans held for sale on the consolidated statement of operations and consolidated statement of cash flows. The Company uses other derivative financial instruments, primarily forward sales commitments, to manage exposure to interest rate risk and changes in the fair value of IRLCs and mortgage loans held for sale. These commitments are recorded at fair value based on the dealer’s market. The forward sales commitments fix the forward sales price that will be realized in the secondary market and thereby reduce the interest rate and price risk to the Company. The Company’s expectation of the amount of its interest rate lock commitments that will ultimately close is a key factor in determining the notional amount of derivatives used in economically hedging the position. The Company may also enter into commitments to purchase MBS as part of its overall hedging strategy. The estimated fair values of forward MBS are based on the exchange prices. The changes in value on the forward sales commitments and forward sales of MBS are recorded as a charge or credit to net gain on mortgage loans held for sale on the consolidated statement of operations and consolidated statement of cash flows. The Company also purchases interest rate swaps, Eurodollar futures and Treasury futures to mitigate exposure to interest rate risk related to cash flows on securitized mortgage borrowings.
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Intangible Assets and Goodwill | Intangible Assets Intangible assets primarily consist of customer relationships and technology acquired through business combinations. Those intangible assets are deemed to have finite useful lives and are amortized either on a straight-line basis over their estimated useful lives (trade name, technology and internally developed software), or on a basis more representative of the time pattern over which the benefit is derived (customer relationships). Intangible assets are recorded at their estimated fair value at the date of acquisition. Intangible assets with finite useful lives are tested for impairment whenever events or circumstances indicate that their carrying amount may not be recoverable by comparing the carrying value of the assets to the estimated future undiscounted cash flows to be generated by the asset. If an impairment is determined to exist for intangible assets, the carrying value of the asset is reduced to the estimated fair value. Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations and is assigned to the reporting unit in which the acquired business will operate. Goodwill is not amortized but is instead subject to impairment testing. The Company evaluates its goodwill for impairment annually as of October 1 of each year or more frequently if impairment indicators arise in accordance with ASC 350, Intangibles - Goodwill and Other. When testing goodwill for impairment, the Company may elect to perform either a qualitative test or a quantitative test to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. During a qualitative analysis, the Company considers the impact of any changes to the following factors: macroeconomic, industry and market factors, cost factors, and changes in overall financial performance, as well as any other relevant events and uncertainties impacting a reporting unit. If the qualitative assessment does not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, the Company performs a quantitative analysis. In a quantitative test, the carrying value of the reporting unit is compared to its estimated fair value. In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash flow analysis and further analyzed using other methods of valuation. A discounted cash flow analysis requires the Company to make various assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s long-term projections by reporting unit. In addition, an assumed terminal value is used to project future cash flows beyond base years. Assumptions used in the Company’s impairment testing are consistent with its internal forecasts and operating plans. The discount rate is based on the Company’s debt and equity balances, adjusted for current market conditions and investor expectations of return on the Company’s equity. If the fair value of a reporting unit exceeds its carrying amount, there is no impairment. If not, the Company compares the fair value of the reporting unit with its carrying amount. To the extent the carrying amount of the reporting unit exceeds its fair value, a write-down of the reporting unit’s goodwill would be necessary.
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Revenue Recognition | Revenue Recognition ASC 606, Revenue from Contracts with Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers as performance obligations are satisfied in an amount that reflects the consideration that the entity expects to be entitled to receive in exchange for those goods or services. The majority of the Company’s revenue-generating transactions in the Servicing and Originations segments, including revenue generated from financial instruments, such as the Company’s loans and derivatives, as well as revenue related to the Company’s mortgage servicing activities, are not within the scope of ASC 606 as these activities are subject to other GAAP discussed elsewhere within the Company’s disclosures. All revenues from Xome fall within the scope of ASC 606. Revenues from Servicing Activities •Revenues from Forward Servicing Activities - Service related revenues primarily include contractually specified servicing fees, late charges, prepayment penalties, fair value adjustments, and other ancillary revenues. The servicing fees are based on a contractual percentage of the outstanding principal balance and recognized as revenue as earned during the life of the loan. Corresponding loan servicing costs are charged to expense as incurred. The Company recognizes ancillary revenues and earnings on float as they are earned. In addition, the Company receives various fees in the course of providing servicing on its various portfolios. These fees include modification fees for modifications performed outside of government programs, modification fees for modifications pursuant to various government programs, and incentive fees for servicing performance on specific government-sponsored entities (“GSE”) portfolios. Fees recorded on modifications of mortgage loans serviced by the Company for others are recognized on collection and are recorded as a component of revenues - service related, net. Fees recorded on modifications pursuant to various government programs are recognized based upon completion of all necessary steps by the Company and the minimum loan performance time frame to establish eligibility for the fee. Revenue earned on modifications pursuant to various government programs is included as a component of revenues - service related, net. Incentive fees for servicing performance on specific GSE portfolios are recognized as various incentive standards are achieved and are recorded as a component of revenues - service related, net. Fair value adjustments related to MSRs, excess spread financing and MSRs financing are recorded as component of revenue – service related, net. The Company also acts as a subservicer for certain parties that own the underlying servicing rights and receives subservicing fees, which are typically a stated monthly fee per loan that varies based on types of loans. Fees related to the subserviced portfolio are accrued in the period the services are performed. Net gain on mortgage loans held for sale includes the realized and unrealized gains and losses on sales of mortgage loans and the fair market value adjustments related to mortgage loans held for sale. •Revenues from Reverse Mortgage Servicing and Reverse Mortgage Interests - The Company performs servicing of reverse mortgage loans, similar to its forward servicing business, and receives servicing fees from investors, which are recorded in revenues - service related, net in the consolidated statements of operations. For reverse mortgage interests, where the Company records entire participating interest in HECM loans, the Company accrues interest in accordance with FHA guidelines and records interest income on the consolidated statements of operations. Revenues from Origination Activities •Revenues from Origination and other loan fees - Loan origination and other loan fees generally represent flat, per-loan fee amounts and are recognized as revenue, net of loan origination costs, at the time the loans are funded. •Net gain on mortgage loans held for sale - Net gain on loans held for sale includes the realized and unrealized gains and losses on sales of mortgage loans, as well as the changes in fair value of all loan-related derivatives, including interest rate lock commitments. Revenues from Xome Xome’s operations are comprised of Exchange, Title and Solutions, as follows: •Exchange is a national technology-enabled platform that manages and sells residential properties through its Xome.com platform. Revenue-generating activities include commission and buyer’s premium of winning bids on auctioned real estate owned (“REO”) and short sale properties. Revenue is recognized when the performance obligation is completed, which is at the closing of real estate transactions and there is transfer of ownership to the buyer. •Title and Solutions connect the major touch points of the real estate transactions process by providing title, escrow, collateral valuation and field services for purchase, refinance and default transactions. Major revenue-generating activities include title and escrow services and valuation services. Revenue is recognized when the performance obligation is completed, which is when services are rendered to customers.
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Reserves for Origination Activity, Forward Servicing Activity and Reverse Mortgage Interests | Reserves for Origination Activity The Company provides for reserves, included within payables and accrued liabilities, in connection with loan origination activities. Reserves on loan origination activities primarily include reserves for the repurchase of loans from GSEs, GNMA, and third-party investors primarily due to delinquency or foreclosure and are initially recorded upon sale of the loan to a third party with subsequent reserves recorded based on repurchase demands. The provision for reserves associated with loan origination activities is a component of net gain on mortgage loans held for sale in the consolidated statements of operations. The Company utilizes internal models to estimate reserves for loan origination activities based upon its expectation of future defaults and the historical defect rate for government insured loans and is based upon judgments and assumptions which can be influenced by many factors and may change over the life of the underlying loans, including: (i) historical loss rate, (ii) secondary market pricing of loans; (iii) home prices and the levels of home equity; (iv) the quality of Company’s underwriting procedures; (v) borrower delinquency and default patterns; and (vi) other Company-specific and macro-economic factors. On a quarterly basis, management corroborates these assumptions using third-party data, where applicable. Reserves for Forward Servicing Activity In connection with forward loan servicing activities, the Company records reserves primarily for the recoverability of advances, interest claims, and mortgage insurance claims. Reserves for advances and other receivables associated with loans in the MSR portfolio are considered within the MSR valuation, and the provision expense for such advances is recorded in the mark-to-market adjustment in revenues - service related, net in the consolidated statement of operations. Such valuation gives consideration to the expected cash outflows and inflows for advances and other receivables in accordance with the fair value framework. Reserves for advances and other receivables on loans transferred out of the MSR portfolio are established within advances and other receivables, net. As loans serviced transfer out of the MSR portfolio, any negative MSR value associated with the loans transferred is reclassified from the MSR to the reserve within advances and other receivables, net, to the extent such reserves continue to be required for balances remaining on the consolidated balance sheets. Management evaluates reserves for sufficiency each reporting period and any additional reserve requirements are recorded as a provision in general and administrative expense, as needed. The Company records reserves for advances and other receivables and evaluates the sufficiency of such reserves through internal models considering both historical and expected recovery rates on claims filed with government agencies, government sponsored enterprises, vendors, prior servicer and other counterparties. Key assumptions used in the model include but are not limited to expected recovery rates by loan types and aging of the receivable. Recovery of advances and other receivables is subject to judgment based on the Company’s assessment of its compliance with servicing guidelines, its ability to produce the necessary documentation to support claims, its ability to support amounts from prior servicers and to effectively negotiate settlements, as needed. Management reviews recorded advances and other receivables and upon determination that no further recourse for recovery is available from all means known to management, the recorded balances associated with these receivables are written-off against the reserve. Reserves for Reverse Mortgage Interests The Company records a reserve for reverse mortgage interests based on unrecoverable costs and estimates of probable loss exposures. The Company estimates reserve requirements upon the realization of a triggering event indicating a probable loss exposure. Internal models are utilized to estimate loss exposures at the loan level associated with the Company’s ability to meet servicing guidelines set forth by regulatory agencies and GSEs. Key assumptions within the models include but are not limited to expected recovery rates by loan and borrower characteristics, foreclosure timelines, value of underlying collateral, future carrying and foreclosure costs, and other macro-economic factors. If the calculated reserve requirements exceed the recorded allowance for reserves and discounts, a provision is recorded to general and administrative expense, as needed. Releases to reserves are also recorded against provision in general and administrative expenses. Reserve requirements are subject to significant judgment and estimates based on the Company’s assessment of its compliance with servicing guidelines and its ability to produce the necessary documentation to support claims, support amounts from prior servicers and to effectively negotiate settlements, as needed. Each period, management reviews recorded reverse mortgage interests and upon determination that no further recourse for recovery is available from all means known to management, the recorded balances associated with these receivables are written-off against the reserve at the loan level.
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Credit Loss Reserves | Credit Loss Reserves ASC 326 – Financial Instruments – Credit Losses requires expected credit losses for financial instruments held at the reporting date to be measured based on historical experience, current conditions and reasonable and supportable forecasts, which is referred to as the current expected credit loss, or CECL, methodology. The new standard reflects management’s best estimate of all expected credit losses for the Company’s financial assets that are recognized at amortized cost. The revised CECL methodology considers expected lifetime loss rates calculated from historical data using a weighted average life and considering reasonable and supportable forecasts to determine the current expected credit loss required. The Company determined that reverse mortgage interests, net of reserves, advances and other receivables, net of reserves, and certain financial instruments included in other assets are within the scope of ASU 2016-13. Certain financial instruments within these respective line items have been determined to have limited expected credit-related losses due to the contractual servicing agreements with agencies and loan product guarantees. For advances and other receivables, net, the Company determined that the majority of estimated losses are due to servicing operational errors, and credit-related losses are not significant because of the contractual relationships with the agencies. The Company determined that the credit-related risk associated with certain applicable financial instruments can increase with the passage of time. The CECL reserve methodology considers these financial instruments collectible to a point in time of 39 months. Any projected remaining balance at the end of the collection period is considered a loss and factors into the overall CECL loss rate required. For reverse mortgage interests, net, the Company determined that the guarantee from the FHA on HECM loan products limits credit-related losses to an immaterial amount with substantially all losses related to servicing operational errors. Any expected credit-related losses are contemplated in the Company’s existing reserve methodology due to the nature of this financial instrument. The credit-risk characteristics of reverse mortgage interests do not vary with time as the financial instruments have no contractual life or financial profile as the primary counterparty is the government agency insuring the loans. For other assets, primarily trade receivables and service fees earned but not received, the Company determined that these are short-term in nature (less than one year), and the estimated credit-related losses over the life of these receivables are similar to those resulting from the Company’s existing loss reserve process. The Company monitors the financial status of customers to determine if any specific loss considerations are required.
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Variable Interest Entities | Variable Interest Entities In the normal course of business, the Company enters into various types of on- and off-balance sheet transactions with special purpose entities (“SPEs”), which primarily consist of securitization trusts established for a limited purpose. Generally, these SPEs are formed for the purpose of securitization transactions in which the Company transfers assets to an SPE, which then issues to investors various forms of debt obligations supported by those assets. In these securitization transactions, the Company typically receives cash and/or other interests in the SPE as proceeds for the transferred assets. The Company will typically retain the right to service the transferred receivables and to repurchase the transferred receivables from the SPE if the outstanding balance of the receivables falls to a level where the cost exceeds the benefits of servicing the transferred receivables. The Company evaluates its interests in each SPE for classification as a Variable Interest Entity (“VIE”). When an SPE meets the definition of a VIE and the Company determines that the Company is the primary beneficiary, the Company includes the SPE in its consolidated financial statements. The Company consolidates SPEs connected with both forward and reverse mortgage activities. See Note 13, Securitizations and Financings, for more information on Company SPEs, and Note 12, Indebtedness, for certain debt activity connected with SPEs. Securitizations and Asset-Backed Financing Arrangements The Company and its subsidiaries have been a transferor in connection with a number of securitizations and asset-backed financing arrangements. The Company has continuing involvement with the financial assets of the securitizations and the asset-backed financing arrangements. The Company has aggregated these transactions into two groups: (1) securitizations of residential mortgage loans accounted for as sales and (2) financings of advances on loans serviced for others accounted for as secured borrowings. Securitizations Treated as Sales The Company’s continuing involvement typically includes acting as servicer for the mortgage loans held by the trust and holding beneficial interests in the trust. The Company’s responsibilities as servicer include, among other things, collecting monthly payments, maintaining escrow accounts, providing periodic reports and managing insurance in exchange for a contractually specified servicing fee. The beneficial interests held consist of both subordinate and residual securities that were retained at the time of securitization. These securitizations generally do not result in consolidation of the VIE as the beneficial interests that are held in the unconsolidated securitization trusts have no value and no potential for significant cash flows in the future. In addition, at December 31, 2020, the Company had no other significant assets in its consolidated financial statements related to these trusts. The Company has no obligation to provide financial support to unconsolidated securitization trusts and has provided no such support. The creditors of the trusts can look only to the assets of the trusts themselves for satisfaction of the debt issued by the trusts and have no recourse against the assets of the Company. The general creditors of the Company have no claim on the assets of the trusts. The Company’s exposure to loss as a result of its continuing involvement with the trusts is limited to the carrying values, if any, of its investments in the residual and subordinate securities of the trusts, the MSRs that are related to the trusts and the advances to the trusts. The Company considers the probability of loss arising from its advances to be remote because of their position ahead of most of the other liabilities of the trusts. See Note 4, Advances and Other Receivables, and Note 3, Mortgage Servicing Rights and Related Liabilities, for additional information regarding advances and MSRs. Financings The Company transfers advances on loans serviced for others to SPEs in exchange for cash. The Company consolidates these SPEs because the Company is the primary beneficiary of the VIE. These VIEs issue debt supported by collections on the transferred advances. The Company made these transfers under the terms of its advance facility agreements. The Company classifies the transferred advances on its consolidated balance sheets as advances and classifies the related liabilities as advance facilities and other nonrecourse debt. The SPEs use collections of the pledged advances to repay principal and interest and to pay the expenses of the entity. Holders of the debt issued by these entities can look only to the assets of the entities themselves for satisfaction of the debt and have no recourse against the Company. Financings include the HMBS and private securitization trusts as previously discussed.
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Loans Subject to Repurchase Rights from Ginnie Mae | Loans Subject to Repurchase Rights from Ginnie Mae For certain forward loans sold to GNMA, the Company as the issuer has the unilateral right to repurchase, without GNMA’s prior authorization, any individual loan in a GNMA securitization pool if that loan meets certain criteria, including payments not being received from borrowers for greater than 90 days. Once the Company has the unilateral right to repurchase a delinquent loan, the Company has effectively regained control over the loan, and under GAAP, must recognize the right to the loan in its consolidated balance sheets and establish a corresponding repurchase liability regardless of the Company’s intention to repurchase the loan. The Company records the right to purchase these mortgage loans in other assets at their unpaid principal balances, which approximate fair value, and records a corresponding liability in payables and other liabilities for mortgage loans eligible for repurchase in its consolidated balance sheets.
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Interest Income | Interest Income Interest income is recognized on loans held for sale for the period from loan funding to sale, which is typically within 30 days. Loans are placed on non-accrual status when any portion of the principal or interest is greater than 90 days past due. Loans return to accrual status when the principal and interest become current and it is probable that the amounts are fully collectible. For individual loans that have been modified, a period of six timely payments is required before the loan is returned to an accrual basis. Interest income also includes interest earned on custodial cash deposits associated with the mortgage loans serviced, and interest earned on reverse mortgage interests. Reverse mortgage interests accrue interest income in accordance with FHA guidelines.
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Share-Based Compensation Expense | Share-Based Compensation Share-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period of the grant) on a straight-line basis in salaries, wages and benefits within the consolidated statements of operations.
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Advertising Costs | Advertising CostsAdvertising costs are expensed as incurred and are included as part of general and administrative expenses. |
Income Taxes | Income Taxes The Company is subject to the income tax laws of the U.S., its states and municipalities and several U.S. territories. These tax laws are complex and subject to different interpretations by the taxpayer and the relevant governmental taxing authorities. Deferred income taxes are determined using the balance sheet method. Deferred taxes are recognized for the future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period that includes the enactment date. The Company regularly reviews the carrying amount of its deferred tax assets to determine if the establishment of a valuation allowance is necessary. If based on the available evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized in future periods, a deferred tax valuation allowance is established. Consideration is given to various positive and negative evidence that could affect the realization of the deferred tax assets. In evaluating this available evidence, management considers, among other things, historical financial performance, expectation of future earnings, length of statutory carryforward periods, experience with operating tax loss and tax credit carryforwards which may expire unused, the use of tax planning strategies and the timing of reversals of temporary differences. The Company’s evaluation is based on current tax laws as well as management’s expectations of future performance. The Company initially recognizes tax positions in the consolidated financial statements when it is more likely than not that the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with the tax authority, assuming the tax authority has full knowledge of the position and all relevant facts. In establishing a provision for income tax expense, the Company makes judgments and interpretations about the application of these inherently complex tax laws. The Company recognizes interest and penalties related to uncertain tax positions as a component of provisions for income taxes in accordance with ASC 740.
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Earnings Per Share | Earnings Per Share The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. The Series A Preferred Stock is considered participating securities because it has dividend rights determined on an as-converted basis in the event of Company’s declaration of a dividend or distribution for common shares. Basic net income per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted net income per common share is computed by dividing net income available to common stockholders by the sum of the weighted average number of common shares outstanding and any dilutive securities for the period.
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Fair Value Measurements | Fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a three-tiered fair value hierarchy has been established based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs). The following describes the methods and assumptions used by the Company in estimating fair values: Cash and Cash Equivalents, Restricted Cash (Level 1) – The carrying amount reported in the consolidated balance sheets approximates fair value. Mortgage Loans Held for Sale (Level 2) – The Company originates mortgage loans in the U.S. that it intends to sell into Fannie Mae, Freddie Mac, and Ginnie Mae (collectively, the “Agencies”) MBS. Additionally, the Company holds mortgage loans that it intends to sell into the secondary markets via whole loan sales or securitizations. The Company measures newly originated prime residential mortgage loans held for sale at fair value. Mortgage loans held for sale are typically pooled together and sold into certain exit markets, depending upon underlying attributes of the loan, such as agency eligibility, product type, interest rate, and credit quality. Mortgage loans held for sale, except for those carried at lower cost or market as described below, are valued on a recurring basis using a market approach by utilizing either: (i) the fair value of securities backed by similar mortgage loans, adjusted for certain factors to approximate the fair value of a whole mortgage loan, including the value attributable to mortgage servicing and credit risk, (ii) current commitments to purchase loans or (iii) recent observable market trades for similar loans, adjusted for credit risk and other individual loan characteristics. As these prices are derived from market observable inputs, the Company classifies these valuations as Level 2 in the fair value disclosures. The Company may acquire mortgage loans held for sale from various securitization trusts for which it acts as servicer through the exercise of various clean-up call options as permitted through the respective pooling and servicing agreements. The Company has elected to account for these loans at the lower of cost or market. The Company classifies these valuations as Level 2 in the fair value disclosures. The Company may also purchase loans out of a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The Company has elected to carry these loans at fair value. See Note 6, Mortgage Loans Held for Sale, for more information. Mortgage Servicing Rights – Fair Value (Level 3) – The Company estimates the fair value of its forward MSRs on a recurring basis using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on a discounted cash flow model which incorporates prepayment speeds, delinquencies, discount rate, ancillary revenues, float earnings and other assumptions (including costs to service and forbearance rates), with the key assumptions being mortgage prepayment speeds, discount rates, and cost to service. These assumptions are generated and applied based on collateral stratifications including product type, remittance type, geography, delinquency and coupon dispersion. These assumptions require the use of judgment by the Company and can have a significant impact on the fair value of the MSRs. Quarterly, management obtains third-party valuations to assess the reasonableness of the fair value calculations provided by the internal cash flow model. Because of the nature of the valuation inputs, the Company classifies these valuations as Level 3 in the fair value disclosures. See Note 3, Mortgage Servicing Rights and Related Liabilities, for more information. Advances and Other Receivables, Net (Level 3) - Advances and other receivables, net are valued at their net realizable value after taking into consideration the reserves. Advances have no stated maturity. Their net realizable value approximates fair value as the net present value based on discounted cash flow is not materially different from the net realizable value. See Note 4, Advances and Other Receivables, for more information. Reverse Mortgage Interests, Net (Level 3) – The Company’s reverse mortgage interests are primarily comprised of HECM loans that are insured by FHA and guaranteed by Ginnie Mae upon securitization. Quarterly, the Company estimates fair value using discounted cash flows, obtained from a third-party and supplemented with historical loss experience on similar assets, with the discount rate approximating that of similar financial instruments, as observed from recent trades with the HMBS. Key assumptions within the model are based on market participant benchmarks and include discount rates, cost to service, weighted average life of the portfolio, and estimated participating income. Discounted cash flows are applied based on collateral stratifications and include loan rate type, loan status (active vs. inactive), and securitization. Prices are also influenced from both internal models and other observable inputs. The Company determined fair value for all loans based on the applicable tranches established during the Merger valuation. Tranches are segregated based on participation percentages, original loan status as of the Merger date, and interest rate types, and loan status (active vs inactive). Prices are also influenced from both internal models and other observable inputs, including applicable forward interest rate curves. Additionally, historical loss factors are considered within the overall valuation. Because of the unobservable nature of the valuation inputs, the Company classifies these valuations as Level 3 in the fair value disclosures. See Note 5, Reverse Mortgage Interests, for more information. Derivative Financial Instruments (Level 2 and Level 3) – The Company enters into a variety of derivative financial instruments as part of its hedging strategy and measures these instruments at fair value on a recurring basis in the consolidated balance sheets. These derivatives are exchange-traded or traded within highly active dealer markets. In order to determine the fair value of these instruments, the Company utilizes the exchange price or dealer market price for the particular derivative contract; therefore, these contracts are classified as Level 2. In addition, the Company enters into IRLCs and LPCs with prospective borrowers and other loan originators. During the three months ended June 30, 2020, the Company changed the fair value classification of its IRLCs and LPCs derivatives from Level 2 to Level 3. IRLCs and LPCs are carried at fair value primarily based on secondary market prices for underlying mortgage loans, which is observable data, with adjustments made to such observable data for the inherent value of servicing, which is an unobservable input. The fair value is also subject to adjustments for the estimated pull-through rate. The impact of the unobservable input to the overall valuation of IRLCs and LPCs was previously much less significant, resulting in a classification of Level 2 in the fair value hierarchy as of December 31, 2019. During the three months ended June 30,2020, market interest rates continued to decline and fell to record lows, which drove an increase in the volume of the Company’s IRLCs and LPCs and increased the impact of the unobservable input on the overall valuation of IRLCs and LPCs. Such increased impact of the unobservable input on the overall valuation resulted in a classification of Level 3 in the fair value hierarchy as of June 30, 2020. The Company adjusts the outstanding IRLCs with prospective borrowers based on an expectation that it will be exercised, and the loan will be funded. IRLCs and LPCs are recorded in derivative financial instruments in the consolidated balance sheets. The Company has entered into Eurodollar futures contracts as part of its hedging strategy. The futures contracts are measured at fair value on a recurring basis and classified as Level 2 in the fair value disclosures as the valuation is based on market observable data. Derivative financial instruments are recorded in other assets and payables and other liabilities within the consolidated balance sheets. See Note 11, Derivative Financial Instruments, for more information. Loans Subject to Repurchase from Ginnie Mae (Level 2) – As the Company has the unilateral right to repurchase these loans at the unpaid principal balance, the carrying amount, which is based on the unpaid principal balance, approximates fair value. See Note 9, Loans Subject to Repurchase from Ginnie Mae, for more information. Advance Facilities and Warehouse Facilities (Level 2) – As the underlying warehouse and advance finance facilities bear interest at a rate that is periodically adjusted based on a market index, the carrying amount reported on the consolidated balance sheets approximates fair value. See Note 12, Indebtedness, for more information. Unsecured Senior Notes (Level 1) – The fair value of unsecured senior notes, which are carried at amortized cost, is based on quoted market prices and is considered Level 1 from the market observable inputs used to determine fair value. See Note 12, Indebtedness, for more information. Excess Spread Financing (Level 3) – The Company estimates fair value on a recurring basis based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, recapture rates and discount rate. As these prices are derived from a combination of internally developed valuation models and quoted market prices based on the value of the underlying MSRs, the Company classifies these valuations as Level 3 in the fair value disclosures. Excess spread financing is recorded in MSR related liabilities within the consolidated balance sheets. See Note 2, Significant Accounting Policies, for more information. Mortgage Servicing Rights Financing Liability (Level 3) - The Company estimates fair value on a recurring basis based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being advance financing rates and annual advance recovery rates. As these assumptions are derived from internally developed valuation models based on the value of the underlying MSRs, the Company classifies these valuations as Level 3 in the fair value disclosures. Mortgage servicing rights financing liability is recorded in MSR related liabilities within the consolidated balance sheets. See Note 3, Mortgage Servicing Rights and Related Liabilities, for more information. Participating Interest Financing (Level 3) – The Company estimates fair value based on the present value of future expected discounted cash flows with the discount rate approximating that of similar financial instruments. As the prices are derived from both internal models and other observable inputs, the Company classifies these valuations as Level 3 in the fair value disclosures. Participating interest financing is recorded in other nonrecourse debt within the consolidated balance sheets. See Note 5, Reverse Mortgage Interests, and Note 12, Indebtedness, for more information. HECM Securitizations (Level 3) – The Company estimates fair value using a market approach by utilizing the fair value of executed HECM securitizations. Since the executed HECM securitizations are private placements, the Company classifies these valuations as Level 3 in the fair value disclosures. HECM securitizations are recorded in other nonrecourse debt within the consolidated balance sheets. See Note 12, Indebtedness, for more information.
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Mortgage Servicing Rights and Related Liabilities (Tables) |
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Schedule of Servicing Assets at Fair Value | The following table sets forth the carrying value of the Company’s MSRs and the related liabilities. In estimating the fair value of certain servicing rights and related liabilities, the impact of forbearance due to the COVID-19 pandemic was considered in the determination of key assumptions.
The following table sets forth the activities of forward MSRs:
(1)Purchases of servicing rights during the year ended December 31, 2019 include $271 of mortgage servicing rights that were acquired from Pacific Union. See Note 1, Nature of Business and Basis of Presentation, for further discussion. In addition, in 2019, the Company entered into a subservicing contract, resulting in additional $253 servicing rights during the second quarter of 2019. The following table provides a breakdown of UPB and fair value for the Company’s forward MSRs:
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Schedule of Servicing Liabilities at Fair Value | The following table sets forth the carrying value of the Company’s MSRs and the related liabilities. In estimating the fair value of certain servicing rights and related liabilities, the impact of forbearance due to the COVID-19 pandemic was considered in the determination of key assumptions.
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Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets | The following table shows the hypothetical effect on the fair value of the Company’s forward MSRs when applying certain unfavorable variations of key assumptions to these assets for the dates indicated:
The following table shows the hypothetical effect on the Company’s excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities for the dates indicated:
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Schedule of Reverse Mortgage Servicing Rights and Liabilities - Amortized Cost | The following table sets forth the activities of reverse MSRs and mortgage servicing liabilities (“MSL”):
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Schedule of Fees Earned in Exchange for Servicing Financial Assets | The following table sets forth the items comprising total revenues for the Servicing segment:
(1)The Company recognizes revenue on an earned basis for services performed. Amounts include subservicing related revenues. (2)Mark-to-market (“MTM”) adjustments include fair value adjustments on MSR, excess spread financing and MSR financing liabilities. The amount of MSR MTM includes the impact of negative modeled cash flows which have been transferred to reserves on advances and other receivables. The negative modeled cash flows relate to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio. The impact of negative modeled cash flows was $28 and $62 for the years ended December 31, 2020 and 2019, respectively. (3)Counterparty revenue share represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements and the payments made associated with MSR financing arrangements. (4)Amortization for the Company is net of excess spread accretion of $338 and $243 and MSL accretion of $20 and $47 for the years ended December 31, 2020 and 2019, respectively.
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Advances and Other Receivables, Net (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Advances, Net | Advances and other receivables, net consists of the following:
The following table sets forth the activities of the servicing reserves for advances and other receivables:
(1)As described in Note 1, Nature of Business and Basis of Presentation, the Company recorded a transition adjustment of $7 to the advances and other receivables reserve as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13. (2)The Company recorded a provision of $28 and $62 through the MTM adjustments in revenues - service related, net, in the consolidated statements of operations during the years ended December 31, 2020 and 2019, respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate. The following table sets forth the activities of the purchase discount for advances and other receivables:
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Reverse Mortgage Interests (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse Mortgage Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Reverse Mortgage Interests | Reverse mortgage interests, net, consists of the following:
Unsecuritized interests in reverse mortgages consists of the following:
(1)HECM related receivables consist primarily of receivables from FNMA for corporate advances and service fees and claims receivables from HUD on reverse mortgage interests. The following table sets forth the activities of the purchase discounts, net, for reverse mortgage interests:
(1)Net position as certain items are in a premium/(discount) position, based on the characteristics of underlying tranches of loans. (2)Utilization of purchase discounts to mitigate loss on liquidated loans, for which the remaining receivable was written-off. (3)Adjustments during the year ended December 31, 2019 is due to revised cost to service assumption utilized in the valuation of reverse mortgage assets and liabilities acquired from the Merger.
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Mortgage Loans Held for Sale (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage Loans Held for Sale [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Mortgage Loans Held-for-Sale | Mortgage loans held for sale are recorded at fair value as set forth below:
(1)The mark-to-market adjustment includes net change in unrealized gain/loss, premium on correspondent loans and fees on direct-to-consumer loans. The mark-to-market adjustment is recorded in net gain on mortgage loans held for sale in the consolidated statements of operations. The following table sets forth the activities of mortgage loans held for sale:
(1)The Company has the right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased in connection with loan modifications and loan resolution activity, with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. Therefore, these loans are classified as held for sale. (2)Amount reflects transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net, for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing. The total UPB of mortgage loans held for sale on non-accrual status was as follows:
(1)Non-accrual includes $44 and $25 of UPB related to Ginnie Mae repurchased loans as of December 31, 2020 and 2019, respectively.
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Property and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Property and Equipment, Net | The composition of property and equipment, net, and the corresponding ranges of estimated useful lives were as follows:
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Cost | The table below summarizes the Company’s net lease cost:
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Schedule of Operating Leases, Other Information | The table below summarizes other information related to the Company’s operating leases:
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Schedule of Operating Leases, Maturities | Maturities of operating lease liabilities as of December 31, 2020 are as follows:
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Goodwill and Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The table below presents changes in the carrying amount of goodwill:
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Schedule of Intangible Assets | The following tables present the composition of intangible assets:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table presents the estimated aggregate amortization expense for existing amortizable intangible assets for the years indicated:
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Derivative Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following table provides the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses) for the derivative financial instruments:
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Indebtedness (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments |
(1)The capacity amount for this advance facility increased from $125 to $875 in 2020. (2)Total capacity for this facility is $900, of which $640 is internally allocated for advance financing and $260 is internally allocated for MSR financing; capacity is fully fungible and is not restricted by these allocations. (3)The capacity amount for this advance facility increased from $325 to $425 in 2020. (4)This advance facility was terminated and transferred to another advance facility in 2020. (5)The capacity amount for this warehouse facility increased from $200 to $2,000 in 2020. (6)The capacity amount for this warehouse facility was increased from $700 to $1,500 in 2020. (7)Total capacity amount for this facility is $1,500, of which $150 is a sublimit for MSR financing. The capacity amount increased from $800 to $1,500 in 2020. (8)The capacity amount for this warehouse facility decreased from $1,000 to $250 in 2020. (9)This warehouse facility was terminated in 2020. (10)This MSR facility was terminated in 2020. (11)The capacity amount for this MSR facility decreased from $400 to $200 in 2020.
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Schedule of Unsecured Senior Notes | Unsecured senior notes consist of the following:
(1)In August 2020, the Company completed the offering of the unsecured senior notes due 2028 and used the net proceeds from the offering, together with cash on hand, to redeem the unsecured senior notes due 2023. (2)In December 2020, the Company completed the offering of the unsecured senior notes due 2030 and used the net proceeds from the offering, together with cash on hand, to redeem the unsecured senior notes due 2026. (3)In January 2020, the Company completed the offering of the unsecured senior notes due 2027 and, in February 2020, used the net proceeds from the offering, together with cash on hand, to redeem the unsecured senior notes due 2021 and 2022.
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Schedule of Maturities of Long-term Debt | As of December 31, 2020, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows:
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Schedule of Other Nonrecourse Debt | Other nonrecourse debt consists of the following:
(1)Amounts represent the Company’s participating interest in GNMA HMBS securitized portfolios. (2)As discussed in Note 5, Reverse Mortgage Interests, Trust 2018-3 and Trust 2018-2 were collapsed and the related debt extinguished during the year ended December 31, 2020.
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Securitizations and Financings (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities and Securitizations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities of VIEs Included in Financial Statements | A summary of the assets and liabilities of the Company’s transactions with VIEs included in the Company’s consolidated financial statements is presented below:
(1)Amounts include net purchase discount of $61 and $46 as of December 31, 2020 and 2019, respectively. (2)Refer to advance facilities in Note 12, Indebtedness, for additional information. The following table shows a summary of the outstanding collateral and certificate balances for securitization trusts for which the Company was the transferor, including any retained beneficial interests and MSRs, that were not consolidated by the Company:
A summary of mortgage loans transferred by the Company to unconsolidated securitization trusts that are 60 days or more past due are presented below:
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Stockholders' Equity and Employee Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-Based Award Activities | The following table summarizes the Company’s share-based awards:
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Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share | The following table sets forth the computation of basic and diluted net income per common share (amounts in millions, except per share amounts):
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) were as follows:
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Schedule of Effective Income Tax Rate Reconciliation | The following table presents a reconciliation of the income tax provision computed at the U.S. federal statutory tax rate to the actual effective tax rate:
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Schedule of Deferred Tax Assets and Liabilities | Temporary differences and carryforwards that give rise to deferred tax assets and liabilities are comprised of the following:
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Schedule of Unrecognized Tax Benefits Roll Forward | The following is a tabular reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits, excluding interest and penalties, for the Predecessor:
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Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured at fair value on a recurring basis:
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Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The tables below present a reconciliation for all of the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis:
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Fair Value Measurement Inputs and Valuation Techniques | The tables below present the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities:
(1)Presented in whole dollar amounts. (2)Average life is included for informational purposes.
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Fair Value, by Balance Sheet Grouping | The tables below present a summary of the carrying amount and estimated fair value of the Company’s financial instruments not carried at fair value:
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information | The following tables present financial information by segment:
(1)For the Predecessor’s Servicing segment results purposes, all revenue is attributable to servicing the portfolio. Therefore, $25 of net gain on mortgage loans was moved to revenues - service related, net during the seven months ended July 31, 2018. For consolidated results purposes, these amounts were reclassed to net gain on mortgage loans held for sale.
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Nature of Business and Basis of Presentation - Narrative (Details) - USD ($) $ in Millions |
Feb. 01, 2019 |
Dec. 31, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Aug. 01, 2018 |
Jul. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Total stockholders’ equity | $ 2,504 | $ 2,231 | $ 1,945 | $ 1,056 | $ 1,883 | $ 1,722 | ||
Pacific Union Financial, LLC | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Cash consideration | $ 116 | |||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Total stockholders’ equity | 7 | |||||||
Cumulative Effect, Period of Adoption, Adjustment | Advances and Other Receivables Reserve | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Allowance for credit losses | $ 7 | |||||||
Cumulative Effect, Period of Adoption, Adjustment | Other Assets | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Allowance for credit losses | 2 | |||||||
Retained Earnings | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Total stockholders’ equity | $ 1,434 | 1,122 | $ 848 | $ (36) | $ 885 | $ 731 | ||
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Total stockholders’ equity | 9 | $ 7 | ||||||
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment After Tax | ||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||
Total stockholders’ equity | $ 7 |
Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 31, 2018 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Derivative [Line Items] | ||||
Mortgage loan sale period | 30 days | |||
Advertising costs | $ 17 | $ 33 | $ 38 | $ 33 |
Mortgage Servicing Rights Financing | ||||
Derivative [Line Items] | ||||
Mortgage servicing rights financing - fair value | $ 33 | $ 37 | ||
Minimum | ||||
Derivative [Line Items] | ||||
Loan commitment period | 30 days | |||
Maximum | ||||
Derivative [Line Items] | ||||
Loan commitment period | 90 days |
Mortgage Servicing Rights and Related Liabilities - MSRs and Related Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Mortgage Servicing Rights [Line Items] | |||
Forward MSRs - fair value | $ 2,703 | $ 3,496 | |
Mortgage servicing rights | 2,708 | 3,502 | |
Mortgage servicing liabilities - amortized cost | 41 | 61 | |
MSR related liabilities - nonrecourse at fair value | 967 | 1,348 | |
Mortgage Servicing Rights | |||
Mortgage Servicing Rights [Line Items] | |||
Forward MSRs - fair value | 2,703 | 3,496 | |
Reverse MSRs - amortized cost | 5 | 6 | |
Mortgage servicing rights | 2,708 | 3,502 | |
Mortgage servicing liabilities - amortized cost | 41 | 61 | |
Mortgage Servicing Right Liability | |||
Mortgage Servicing Rights [Line Items] | |||
Mortgage servicing liabilities - amortized cost | 41 | 61 | $ 71 |
Excess spread financing - fair value | 934 | 1,311 | |
Mortgage servicing rights financing - fair value | 33 | 37 | |
MSR related liabilities - nonrecourse at fair value | $ 967 | $ 1,348 |
Mortgage Servicing Rights and Related Liabilities - MSR's at Fair Value (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Fair value - beginning of year | $ 3,496 | ||
Fair value - end of year | 2,703 | $ 3,496 | |
Mortgage Servicing Rights | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Fair value - beginning of year | 3,496 | 3,665 | |
Servicing retained from mortgage loans sold | 687 | 434 | |
Purchases of servicing rights | $ 253 | 124 | 858 |
Sales of servicing assets | (9) | (408) | |
Changes in valuation inputs or assumptions used in the valuation model | (889) | (589) | |
Other changes in fair value | (706) | (464) | |
Fair value - end of year | $ 2,703 | 3,496 | |
Pacific Union Financial, LLC | Mortgage Servicing Rights | |||
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Mortgage servicing rights acquired | $ 271 |
Mortgage Servicing Rights and Related Liabilities - Narrative (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Forward MSRs Sold | ||
Servicing Assets at Fair Value [Line Items] | ||
Unpaid principal balance sold | $ 1,070,000,000 | $ 35,152,000,000 |
Forward MSRs Sold, Subservicing Retained | ||
Servicing Assets at Fair Value [Line Items] | ||
Principal amount outstanding on mortgage servicing rights | 960,000,000 | 20,560,000,000 |
Reverse mortgage interests, net | ||
Servicing Assets at Fair Value [Line Items] | ||
Principal amount outstanding on mortgage servicing rights | 18,091,000,000 | 22,725,000,000 |
Mortgage Servicing Right Liability | ||
Servicing Assets at Fair Value [Line Items] | ||
Excess spread financing - fair value | 934,000,000 | 1,311,000,000 |
Mortgage servicing rights financing - fair value | 33,000,000 | 37,000,000 |
Mortgage Servicing Rights | ||
Servicing Assets at Fair Value [Line Items] | ||
Principal amount outstanding on mortgage servicing rights | 271,189,000,000 | 296,782,000,000 |
Impairment | $ 0 | $ 0 |
Mortgage Servicing Rights and Related Liabilities - UPB and Fair Value of Forward MSR's (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Owned Service Loans [Line Items] | ||
Fair Value | $ 2,703 | $ 3,496 |
Forward mortgage servicing rights | ||
Owned Service Loans [Line Items] | ||
UPB | 271,189 | 296,782 |
Fair Value | 2,703 | 3,496 |
Agency | Forward mortgage servicing rights | ||
Owned Service Loans [Line Items] | ||
UPB | 227,136 | 240,688 |
Fair Value | 2,305 | 2,944 |
Non-agency | Forward mortgage servicing rights | ||
Owned Service Loans [Line Items] | ||
UPB | 44,053 | 56,094 |
Fair Value | $ 398 | $ 552 |
Mortgage Servicing Rights and Related Liabilities - Fair Value Sensitivity Analysis (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Excess Spread Financing | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Total prepayment speeds, 10% adverse change | $ 41 | $ 46 |
Total prepayment speeds, 20% adverse change | 84 | 96 |
Excess Spread Financing | 100 bps Adverse Change | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Discount rate, adverse change | 30 | 46 |
Excess Spread Financing | 200 bps Adverse Change | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Discount rate, adverse change | 62 | 95 |
Forward mortgage servicing rights | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Total prepayment speeds, 10% adverse change | (181) | (165) |
Total prepayment speeds, 20% adverse change | (347) | (317) |
Cost to service loan, 10% adverse change | (45) | |
Cost to service loan, 20% adverse change | (89) | |
Forward mortgage servicing rights | 100 bps Adverse Change | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Discount rate, adverse change | (100) | (127) |
Forward mortgage servicing rights | 200 bps Adverse Change | ||
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items] | ||
Discount rate, adverse change | $ (192) | $ (245) |
Mortgage Servicing Rights and Related Liabilities - Amortized Cost of Reverse MSRs and Liabilities (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||
Fair value - end of year | $ 2,703 | $ 3,496 |
Servicing Liability at Amortized Cost [Roll Forward] | ||
Balance - beginning of year | 61 | |
Balance - end of year | 41 | 61 |
Reverse Mortgage Servicing Rights | ||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||
Balance - beginning of year | 6 | 11 |
Amortization/accretion | (1) | (1) |
Adjustments | 0 | (4) |
Balance - end of year | 5 | 6 |
Fair value - end of year | 6 | 6 |
Mortgage Servicing Right Liability | ||
Servicing Liability at Amortized Cost [Roll Forward] | ||
Balance - beginning of year | 61 | 71 |
Amortization/accretion | (20) | (47) |
Adjustments | 0 | 37 |
Balance - end of year | 41 | 61 |
Fair value - end of year | $ 37 | $ 28 |
Mortgage Servicing Rights and Related Liabilities - Revenues for Services Segment (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Transfers and Servicing [Abstract] | ||
Contractually specified servicing fees | $ 1,141 | $ 1,194 |
Other service-related income | 290 | 182 |
Incentive and modification income | 39 | 40 |
Late fees | 83 | 110 |
Reverse servicing fees | 24 | 31 |
Mark-to-market adjustments | (679) | (505) |
Counterparty revenue share | (371) | (284) |
Amortization, net of accretion | (420) | (236) |
Total revenues - Servicing | 107 | 532 |
Losses for inactive and liquidated loans that are no longer part of the MSR portfolio | 28 | 62 |
Accretion expense | $ 338 | $ 243 |
Advances and Other Receivables - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Receivables [Abstract] | |||
Servicing advances, net of $72 and $131 purchase discount, respectively | $ 975 | $ 970 | |
Receivables from agencies, investors and prior servicers, net of $21 and $21 purchase discount, respectively | 173 | 193 | |
Reserves | (208) | (175) | |
Total advances and other receivables, net | 940 | 988 | |
Servicing advances discount | 72 | 131 | $ 205 |
Receivable discount | $ 21 | $ 21 | $ 48 |
Advances and Other Receivables - Advances and Other Receivables Roll Forward (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Jan. 01, 2020 |
|
Advances And Other Receivables, Reserves [Roll Forward] | ||||
Balance - beginning of year | $ 168 | $ 175 | $ 47 | |
Provision and other additions | 108 | 160 | ||
Write-offs | (68) | (32) | ||
Balance - end of year | $ 208 | 208 | 175 | |
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans | $ (28) | $ (62) | ||
Cumulative Effect, Period of Adoption, Adjustment | Reserves for Advances and Other Receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Allowance for credit losses | $ 7 |
Advances and Other Receivables - Narrative (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Purchase discount utilized | $ 228 |
Purchase discount remaining | 93 |
Allowance for credit loss | $ 38 |
Financial instruments, collection period | 39 months |
Reserves for Advances and Other Receivables | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Provision for credit loss | $ 21 |
Allowance for credit loss | 21 |
Purchase Discount | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Allowance for credit loss | $ 17 |
Advances and Other Receivables - Purchase Discount (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Servicing Advances | ||
Balance - beginning of year | $ 131 | $ 205 |
Addition from acquisition | 0 | 19 |
Utilization of purchase discounts | (59) | (93) |
Balance - end of year | 72 | 131 |
Receivables from Agencies, Investors and Prior Servicers | ||
Balance - beginning of year | 21 | 48 |
Addition from acquisition | 0 | 0 |
Utilization of purchase discounts | 0 | (27) |
Balance - end of year | $ 21 | $ 21 |
Reverse Mortgage Interests - Schedule of Revers Mortgage Interests, Net (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Aug. 01, 2018 |
---|---|---|---|---|
Reverse Mortgage Interest [Abstract] | ||||
Participating interests in HECM mortgage-backed securities | $ 3,471 | $ 4,282 | ||
Unsecuritized interests | 964 | 1,117 | ||
Other interests securitized | 945 | 994 | ||
Purchase discount, net | (127) | (114) | $ (164) | $ (256) |
Total reverse mortgage interests, net | $ 5,253 | $ 6,279 |
Reverse Mortgage Interests - Narrative (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Aug. 01, 2018 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Purchase discount, net | $ 127,000,000 | $ 114,000,000 | $ 164,000,000 | $ 256,000,000 |
Interest earned on HECM loans | 200,000,000 | 307,000,000 | ||
Participating Interests in HMBS | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
UPB securitized | 173,000,000 | 265,000,000 | ||
Government National Mortgage Association (GNMA) Insured Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
UPB securitized | 0 | 61,000,000 | ||
Trust 2020-1 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
UPB securitized | 516,000,000 | |||
Trust 2018-2 and Trust 2018-3 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
UPB securitized | 337,000,000 | |||
Trust 2019-1 and Trust 2019-2 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
UPB securitized | 751,000,000 | |||
Trust 2017-2 and Trust 2018-1 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
UPB securitized | 476,000,000 | |||
Trust 2018-3 | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Unpaid principal balance sold | 20,000,000 | |||
Reverse Mortgage Interests, Unsecuritized | HECM | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Repurchase of HECM loans | 1,153,000,000 | 2,333,000,000 | ||
Repurchase of HECM loans funded by prior servicer | 306,000,000 | 616,000,000 | ||
Housing And Urban Development, Home Equity Conversion Mortgage Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
HECM loans assigned to HUD | $ 771,000,000 | $ 1,819,000,000 |
Reverse Mortgage Interests - Unsecurtized Interests (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Reverse Mortgage Interest [Abstract] | ||
Repurchased HECM loans (exceeds 98% MCA) | $ 665 | $ 789 |
HECM related receivables | 208 | 250 |
Funded borrower draws not yet securitized | 72 | 64 |
REO related receivables | 19 | 14 |
Total unsecuritized interests | $ 964 | $ 1,117 |
Reverse Mortgage Interests - Purchase Discount Rollforward (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Purchase discount, net, for reverse mortgage interests | ||
Balance - beginning of year | $ (114) | $ (164) |
Amortization, net of accretion | (44) | (22) |
Utilization of purchase discounts | 31 | 96 |
Adjustments | 0 | (24) |
Balance - end of year | $ (127) | $ (114) |
Mortgage Loans Held for Sale - Held For Sale (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Mortgage loans held for sale - UPB | $ 5,438 | $ 3,949 | |
Mark-to-market adjustment | 282 | 128 | |
Total mortgage loans held for sale | 5,720 | 4,077 | $ 1,631 |
UPB | 64 | 29 | |
Fair Value | 54 | 22 | |
Ginnie Mae Repurchased Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
UPB | $ 44 | $ 25 |
Mortgage Loans Held for Sale - Activities of Mortgage Loans Held for Sale (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward] | ||
Balance - beginning of year | $ 4,077 | $ 1,631 |
Loans sold | (66,545) | (41,269) |
Mortgage loans originated and purchased, net of fees | 63,233 | 40,793 |
Repurchase of loans out of Ginnie Mae securitizations | 4,822 | 2,895 |
Net change in unrealized gain on loans held for sale | 123 | 9 |
Net transfer of mortgage loans held for sale | 10 | 18 |
Balance - end of year | $ 5,720 | $ 4,077 |
Mortgage Loans Held for Sale - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Mortgage Loans Held for Sale [Abstract] | ||
Sale of mortgage loans held for sale | $ 67,855 | $ 41,809 |
Gain on sale of mortgage loans held for sale | 1,310 | 540 |
Mortgage loans held for sale in foreclosure | $ 20 | $ 21 |
Property and Equipment - Schedule of PPE (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 212 | $ 167 |
Less: Accumulated depreciation | (96) | (55) |
Total property and equipment, net | 116 | 112 |
Furniture, fixtures, and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 55 | 50 |
Furniture, fixtures, and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Furniture, fixtures, and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Capitalized software costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 87 | 54 |
Capitalized software costs | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Capitalized software costs | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Software in development and other | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 29 | 31 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 33 | 24 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Long-term finance leases - computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Long-term finance leases | $ 8 | $ 8 |
Estimated Useful Life | 5 years |
Property and Equipment - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 42 | $ 41 |
Impairment charges | $ 12 | $ 4 |
Leases - Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Lessee, Lease, Description [Line Items] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssets | us-gaap:OtherAssets |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent | us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent |
Operating lease, right-of-use assets | $ 97 | $ 121 |
Lease liabilities | $ 108 | $ 135 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, contract term | 1 year | |
Operating lease, renewal term | 3 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, contract term | 8 years | |
Operating lease, renewal term | 5 years |
Leases - Lease Cost (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 37 | $ 40 |
Sublease income | (6) | (3) |
Short-term lease cost | 0 | 1 |
Total net lease cost | $ 31 | $ 38 |
Leases - Other Information (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 35 | $ 30 |
Leased assets obtained in exchange for new operating lease liabilities | $ 14 | $ 154 |
Weighted average remaining lease term - operating leases, in years | 5 years 3 months 18 days | 5 years 6 months |
Weighted average discount rate - operating leases | 4.90% | 5.00% |
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
2021 | $ 33 | |
2022 | 25 | |
2023 | 19 | |
2024 | 13 | |
2025 | 9 | |
Thereafter | 24 | |
Total future minimum lease payments | 123 | |
Less: imputed interest | 15 | |
Total operating lease liabilities | $ 108 | $ 135 |
Loans Subject to Repurchase from Ginnie Mae (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value, Recurring | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans subject to repurchase from Ginnie Mae | $ 6,159 | $ 560 |
Financial Asset, Equal to or Greater than 90 Days Past Due | Payment Deferral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans subject to repurchase from Ginnie Mae | $ 5,879 |
Goodwill and Intangible Assets - Changes in the Carrying Amount of Goodwill (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 120 | $ 23 |
Addition from acquisitions | 0 | 42 |
Measurement period adjustment related to merger | 0 | 55 |
Goodwill, ending balance | $ 120 | $ 120 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of goodwill | $ 0 | $ 0 | |
Goodwill [Line Items] | |||
Goodwill | 120,000,000 | 120,000,000 | $ 23,000,000 |
Amortization expense | 32,000,000 | 50,000,000 | |
Corporate/ Other | |||
Goodwill [Line Items] | |||
Impairment of technology and intangible assets | 10,000,000 | 7,000,000 | |
Servicing | |||
Goodwill [Line Items] | |||
Goodwill | 80,000,000 | 80,000,000 | |
Originations | |||
Goodwill [Line Items] | |||
Goodwill | 28,000,000 | 28,000,000 | |
Xome | |||
Goodwill [Line Items] | |||
Goodwill | $ 12,000,000 | $ 12,000,000 |
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 133 | $ 145 |
Accumulated amortization | (99) | (71) |
Net carrying amount | $ 34 | $ 74 |
Weighted average remaining life (in years) | 4 years 2 months 12 days | 4 years 8 months 12 days |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 86 | $ 90 |
Accumulated amortization | (65) | (45) |
Net carrying amount | $ 21 | $ 45 |
Weighted average remaining life (in years) | 5 years 6 months | 5 years 10 months 24 days |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 39 | $ 46 |
Accumulated amortization | (30) | (23) |
Net carrying amount | $ 9 | $ 23 |
Weighted average remaining life (in years) | 1 year 9 months 18 days | 2 years 10 months 24 days |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 8 | $ 8 |
Accumulated amortization | (4) | (2) |
Net carrying amount | $ 4 | $ 6 |
Weighted average remaining life (in years) | 2 years 7 months 6 days | 3 years 7 months 6 days |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 1 | |
Accumulated amortization | (1) | |
Net carrying amount | $ 0 | |
Weighted average remaining life (in years) | 2 years 9 months 18 days |
Goodwill and Intangible Assets - Future Amortization (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 14 | |
2022 | 10 | |
2023 | 6 | |
2024 | 1 | |
2025 | 1 | |
Thereafter | 2 | |
Net carrying amount | $ 34 | $ 74 |
Derivative Financial Instruments - Outstanding Balances (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, notional amount | $ 21,438 | $ 9,058 |
Derivative asset, fair value | 489 | 154 |
Recorded gains / (losses) | 336 | 90 |
Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, notional amount | 25,498 | 6,595 |
Derivative liability, fair value | 157 | 15 |
Recorded gains / (losses) | 142 | (10) |
Loan sale commitments | Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, notional amount | 2,710 | 1,202 |
Derivative asset, fair value | 102 | 32 |
Recorded gains / (losses) | 70 | 7 |
IRLCs | Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, notional amount | 10,179 | 4,838 |
Derivative asset, fair value | 414 | 135 |
Recorded gains / (losses) | 279 | 75 |
IRLCs | Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, notional amount | 2 | 12 |
Derivative liability, fair value | 0 | 0 |
Recorded gains / (losses) | 0 | 0 |
LPCs | Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, notional amount | 5,406 | 1,094 |
Derivative asset, fair value | 38 | 12 |
Recorded gains / (losses) | 26 | 10 |
LPCs | Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, notional amount | 280 | 540 |
Derivative liability, fair value | 1 | 3 |
Recorded gains / (losses) | (2) | 2 |
Forward sales of MBS | Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, notional amount | 5,853 | 3,120 |
Derivative asset, fair value | 37 | 7 |
Recorded gains / (losses) | 31 | 5 |
Forward sales of MBS | Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, notional amount | 25,156 | 6,036 |
Derivative liability, fair value | 156 | 12 |
Recorded gains / (losses) | 144 | (12) |
Eurodollar futures | Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, notional amount | 6 | |
Derivative asset, fair value | 0 | |
Recorded gains / (losses) | 0 | |
Eurodollar futures | Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, notional amount | 7 | |
Derivative liability, fair value | 0 | |
Recorded gains / (losses) | $ 0 | |
Swap futures | Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, notional amount | 60 | |
Derivative liability, fair value | 0 | |
Recorded gains / (losses) | $ 0 |
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Margin deposit assets | $ 61 | $ 6 |
Indebtedness - Notes Payable (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | ||
Outstanding debt | $ 6,763,000,000 | $ 4,997,000,000 |
Advance, Warehouse and MSR Facilities | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | (11,000,000) | (1,000,000) |
Outstanding debt | 6,763,000,000 | 4,997,000,000 |
Servicing | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Outstanding | 669,000,000 | 422,000,000 |
Collateral Pledged | 844,000,000 | 665,000,000 |
Originations | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Outstanding | 5,835,000,000 | 4,416,000,000 |
Collateral Pledged | 6,053,000,000 | 4,622,000,000 |
Originations | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Outstanding | 270,000,000 | 160,000,000 |
Collateral Pledged | 1,217,000,000 | 1,359,000,000 |
Originations | Advance, Warehouse and MSR Facilities | ||
Debt Instrument [Line Items] | ||
Outstanding | 6,774,000,000 | 4,998,000,000 |
Collateral Pledged | 8,114,000,000 | 6,646,000,000 |
Mortgage loans held for sale | Originations | ||
Debt Instrument [Line Items] | ||
Collateral Pledged | 5,447,000,000 | 3,931,000,000 |
Outstanding debt | 5,330,000,000 | 3,826,000,000 |
Reverse mortgage interests, net | Originations | ||
Debt Instrument [Line Items] | ||
Collateral Pledged | 606,000,000 | 691,000,000 |
Outstanding debt | 505,000,000 | 590,000,000 |
MSR | Originations | ||
Debt Instrument [Line Items] | ||
Collateral Pledged | 1,217,000,000 | 1,359,000,000 |
Outstanding debt | 270,000,000 | 160,000,000 |
Loans Payable | Servicing | $875 advance facility | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 875,000,000 | 125,000,000 |
Outstanding | 168,000,000 | 37,000,000 |
Collateral Pledged | 195,000,000 | 88,000,000 |
Loans Payable | Servicing | $640 advance facility | Advance Financing, Internally Allocated | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 640,000,000 | |
Outstanding | 235,000,000 | 0 |
Collateral Pledged | 305,000,000 | 0 |
Loans Payable | Servicing | $425 advance facility | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 425,000,000 | 325,000,000 |
Outstanding | 192,000,000 | 224,000,000 |
Collateral Pledged | 246,000,000 | 285,000,000 |
Loans Payable | Servicing | $250 advance facility | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 250,000,000 | |
Outstanding | 0 | 98,000,000 |
Collateral Pledged | $ 0 | 167,000,000 |
Loans Payable | LIBOR | Servicing | $640 advance facility | Advance Financing, Internally Allocated | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.90% | |
Loans Payable | Minimum | LIBOR | Servicing | $425 advance facility | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.60% | |
Loans Payable | Minimum | LIBOR | Servicing | $250 advance facility | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.50% | |
Loans Payable | Minimum | CPRATE | Servicing | $875 advance facility | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.50% | |
Loans Payable | Maximum | LIBOR | Servicing | $250 advance facility | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.60% | |
Loans Payable | Maximum | CPRATE | Servicing | $875 advance facility | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 6.50% | |
Notes Payable to Banks | Servicing | $100 advance facility | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 100,000,000 | |
Outstanding | 74,000,000 | 63,000,000 |
Collateral Pledged | 98,000,000 | 125,000,000 |
Notes Payable to Banks | Originations | $2,000 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 2,000,000,000 | 200,000,000 |
Outstanding | 339,000,000 | 54,000,000 |
Collateral Pledged | 392,000,000 | 78,000,000 |
Notes Payable to Banks | Originations | $1,500 warehouse facility due June 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,500,000,000 | |
Outstanding | 1,081,000,000 | 759,000,000 |
Collateral Pledged | 1,028,000,000 | 733,000,000 |
Notes Payable to Banks | Originations | $1,500 warehouse facility due October 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,500,000,000 | 700,000,000 |
Outstanding | 1,003,000,000 | 469,000,000 |
Collateral Pledged | 1,037,000,000 | 488,000,000 |
Notes Payable to Banks | Originations | $1,350 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,350,000,000 | |
Outstanding | 1,067,000,000 | 589,000,000 |
Collateral Pledged | 1,128,000,000 | 656,000,000 |
Notes Payable to Banks | Originations | $1,200 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,200,000,000 | |
Outstanding | 787,000,000 | 683,000,000 |
Collateral Pledged | 839,000,000 | 724,000,000 |
Notes Payable to Banks | Originations | $750 warehouse facility due October 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 750,000,000 | |
Outstanding | 562,000,000 | 411,000,000 |
Collateral Pledged | 574,000,000 | 425,000,000 |
Notes Payable to Banks | Originations | $750 warehouse facility due August 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 750,000,000 | |
Outstanding | 477,000,000 | 0 |
Collateral Pledged | 492,000,000 | 0 |
Notes Payable to Banks | Originations | $600 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 600,000,000 | |
Outstanding | 187,000,000 | 174,000,000 |
Collateral Pledged | 222,000,000 | 202,000,000 |
Notes Payable to Banks | Originations | $500 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 500,000,000 | |
Outstanding | 0 | 336,000,000 |
Collateral Pledged | 0 | 349,000,000 |
Notes Payable to Banks | Originations | $300 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 300,000,000 | |
Outstanding | 163,000,000 | 136,000,000 |
Collateral Pledged | 164,000,000 | 136,000,000 |
Notes Payable to Banks | Originations | $250 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 250,000,000 | 1,000,000,000 |
Outstanding | 0 | 762,000,000 |
Collateral Pledged | 0 | 783,000,000 |
Notes Payable to Banks | Originations | $200 warehouse facility due April 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 200,000,000 | |
Outstanding | 131,000,000 | 27,000,000 |
Collateral Pledged | 134,000,000 | 27,000,000 |
Notes Payable to Banks | Originations | $200 warehouse facility due November 2020 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 200,000,000 | |
Outstanding | 0 | 0 |
Collateral Pledged | 0 | 0 |
Notes Payable to Banks | Originations | $50 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 50,000,000 | |
Outstanding | 37,000,000 | 11,000,000 |
Collateral Pledged | 42,000,000 | 15,000,000 |
Notes Payable to Banks | Originations | $40 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 40,000,000 | |
Outstanding | 1,000,000 | 5,000,000 |
Collateral Pledged | 1,000,000 | 6,000,000 |
Notes Payable to Banks | Originations | $450 warehouse facility | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 450,000,000 | |
Outstanding | 0 | 150,000,000 |
Collateral Pledged | 0 | 945,000,000 |
Notes Payable to Banks | Originations | $260 warehouse facility | MSR Financing, Internally Allocated | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 260,000,000 | |
Outstanding | 260,000,000 | 0 |
Collateral Pledged | 668,000,000 | 0 |
Notes Payable to Banks | Originations | $200 warehouse facility due August 2021 | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 200,000,000 | 400,000,000 |
Outstanding | 0 | 0 |
Collateral Pledged | 247,000,000 | 200,000,000 |
Notes Payable to Banks | Originations | $150 warehouse facility | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 150,000,000 | |
Outstanding | 0 | 0 |
Collateral Pledged | 228,000,000 | 130,000,000 |
Notes Payable to Banks | Originations | $50 warehouse facility due November 2022 | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 50,000,000 | |
Outstanding | 10,000,000 | 10,000,000 |
Collateral Pledged | 74,000,000 | 84,000,000 |
Notes Payable to Banks | Originations | $900 warehouse facility | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 900,000,000 | |
Notes Payable to Banks | Originations | $1,500 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 1,500,000,000 | $ 800,000,000 |
Notes Payable to Banks | LIBOR | Servicing | $100 advance facility | Advance Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.50% | |
Notes Payable to Banks | LIBOR | Originations | $2,000 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.30% | |
Notes Payable to Banks | LIBOR | Originations | $1,500 warehouse facility due June 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.70% | |
Notes Payable to Banks | LIBOR | Originations | $750 warehouse facility due August 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.80% | |
Notes Payable to Banks | LIBOR | Originations | $600 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.20% | |
Notes Payable to Banks | LIBOR | Originations | $300 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.40% | |
Notes Payable to Banks | LIBOR | Originations | $200 warehouse facility due April 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.80% | |
Notes Payable to Banks | LIBOR | Originations | $200 warehouse facility due November 2020 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.30% | |
Notes Payable to Banks | LIBOR | Originations | $40 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.30% | |
Notes Payable to Banks | LIBOR | Originations | $450 warehouse facility | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 5.10% | |
Notes Payable to Banks | LIBOR | Originations | $260 warehouse facility | MSR Financing, Internally Allocated | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.90% | |
Notes Payable to Banks | LIBOR | Originations | $200 warehouse facility due August 2021 | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.50% | |
Notes Payable to Banks | LIBOR | Originations | $150 warehouse facility | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.80% | |
Notes Payable to Banks | LIBOR | Originations | $50 warehouse facility due November 2022 | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.30% | |
Notes Payable to Banks | Minimum | LIBOR | Originations | $1,500 warehouse facility due October 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.60% | |
Notes Payable to Banks | Minimum | LIBOR | Originations | $1,350 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.80% | |
Notes Payable to Banks | Minimum | LIBOR | Originations | $1,200 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.80% | |
Notes Payable to Banks | Minimum | LIBOR | Originations | $750 warehouse facility due October 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.70% | |
Notes Payable to Banks | Minimum | LIBOR | Originations | $500 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.50% | |
Notes Payable to Banks | Minimum | LIBOR | Originations | $250 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.40% | |
Notes Payable to Banks | Minimum | LIBOR | Originations | $50 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.80% | |
Notes Payable to Banks | Maximum | LIBOR | Originations | $1,500 warehouse facility due October 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.90% | |
Notes Payable to Banks | Maximum | LIBOR | Originations | $1,350 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.90% | |
Notes Payable to Banks | Maximum | LIBOR | Originations | $1,200 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 3.00% | |
Notes Payable to Banks | Maximum | LIBOR | Originations | $750 warehouse facility due October 2021 | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.80% | |
Notes Payable to Banks | Maximum | LIBOR | Originations | $500 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.00% | |
Notes Payable to Banks | Maximum | LIBOR | Originations | $250 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.30% | |
Notes Payable to Banks | Maximum | LIBOR | Originations | $50 warehouse facility | Warehouse Facilities | ||
Debt Instrument [Line Items] | ||
Interest Rate | 4.80% |
Indebtedness - Summary of Unsecured Senior Notes (Details) - USD ($) |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Unsecured senior notes, net | $ 2,074,000,000 | $ 2,366,000,000 |
Unsecured Senior Notes | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | 2,100,000,000 | 2,398,000,000 |
Unamortized debt issuance costs and discount, net of premium | (26,000,000) | (32,000,000) |
Unsecured senior notes, net | 2,074,000,000 | 2,366,000,000 |
Unsecured Senior Notes | $850 Face Value, 5.500% interest payable semi-annually, due August 2028 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | 850,000,000 | 0 |
Face amount | $ 850,000,000 | |
Interest rate | 5.50% | |
Unsecured Senior Notes | $650 Face Value, 5.125% Interest Rate Payable Semi Annually, Due December 2030 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 650,000,000 | 0 |
Face amount | $ 650,000,000 | |
Interest rate | 5.125% | |
Unsecured Senior Notes | $600 face value, 6.000% interest rate payable semi-annually, due January 2027 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 600,000,000 | 0 |
Face amount | $ 600,000,000 | |
Interest rate | 6.00% | |
Unsecured Senior Notes | $950 face value, 8.125% interest rate payable semi-annually, due July 2023 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 0 | 950,000,000 |
Face amount | $ 950,000,000 | |
Interest rate | 8.125% | |
Unsecured Senior Notes | $750 face value, 9.125% interest rate payable semi-annually, due July 2026 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 0 | 750,000,000 |
Face amount | $ 750,000,000 | |
Interest rate | 9.125% | |
Unsecured Senior Notes | $600 face value, 6.500% interest rate payable semi-annually, due July 2021 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 0 | 492,000,000 |
Face amount | $ 600,000,000 | |
Interest rate | 6.50% | |
Unsecured Senior Notes | $300 face value, 6.500% interest rate payable semi-annually, due June 2022 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 0 | $ 206,000,000 |
Face amount | $ 300,000,000 | |
Interest rate | 6.50% |
Indebtedness - Narrative (Details) - USD ($) $ in Millions |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 31, 2018 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | ||||
Loss on repurchase of debt | $ 0 | $ 0 | $ 138 | $ 0 |
Unsecured Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Maximum percentage redeemable on secured debt | 40.00% | |||
Unsecured Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Repayments of debt | $ 100 | $ 100 | ||
Amount of principal redeemed | 2,298 | |||
Loss on repurchase of debt | $ 138 | |||
Minimum | Secured Debt | HECM Securitizations | ||||
Debt Instrument [Line Items] | ||||
Weighted average useful life | 1 year | |||
Maximum | Secured Debt | HECM Securitizations | ||||
Debt Instrument [Line Items] | ||||
Weighted average useful life | 3 years |
Indebtedness - Schedule of Notes Maturity (Details) - Unsecured Senior Notes - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
2021 through 2025 | $ 0 | |
Thereafter | 2,100 | |
Total unsecured senior notes principal amount | $ 2,100 | $ 2,398 |
Indebtedness - Summary of Other Non-Recourse Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Other nonrecourse debt, net | $ 4,424 | $ 5,286 |
Participating interest financing | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.30% | |
Participating interest financing | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.60% | |
Trust 2020-1 | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.30% | |
Trust 2020-1 | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 7.50% | |
Trust 2019-2 | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.30% | |
Trust 2019-2 | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.00% | |
Trust 2019-1 | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 2.70% | |
Trust 2019-1 | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.00% | |
Trust 2018-3 | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.60% | |
Trust 2018-3 | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.00% | |
Trust 2018-2 | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.20% | |
Trust 2018-2 | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.00% | |
Other nonrecourse debt | ||
Debt Instrument [Line Items] | ||
Other nonrecourse debt, net | $ 4,424 | 5,286 |
Unamortized premium, net of debt issuance costs and discount | 8 | 10 |
Other nonrecourse debt | Participating interest financing | ||
Debt Instrument [Line Items] | ||
Collateral amount | 0 | |
Other nonrecourse debt, net | 3,473 | 4,284 |
Other nonrecourse debt | Trust 2020-1 | ||
Debt Instrument [Line Items] | ||
Collateral amount | 501 | |
Other nonrecourse debt, net | 490 | 0 |
Other nonrecourse debt | Trust 2019-2 | ||
Debt Instrument [Line Items] | ||
Collateral amount | 260 | |
Other nonrecourse debt, net | 241 | 333 |
Other nonrecourse debt | Trust 2019-1 | ||
Debt Instrument [Line Items] | ||
Collateral amount | 236 | |
Other nonrecourse debt, net | 212 | 302 |
Other nonrecourse debt | Trust 2018-3 | ||
Debt Instrument [Line Items] | ||
Collateral amount | 0 | |
Other nonrecourse debt, net | 0 | 209 |
Other nonrecourse debt | Trust 2018-2 | ||
Debt Instrument [Line Items] | ||
Collateral amount | 0 | |
Other nonrecourse debt, net | 0 | 148 |
Other nonrecourse debt | Other | ||
Debt Instrument [Line Items] | ||
Other nonrecourse debt, net | $ 4,416 | $ 5,276 |
Securitizations and Financings - Assets and Liabilities of Consolidated VIEs (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
UPB, purchase discount | $ 61 | $ 46 |
Residential Mortgage | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, assets | 488 | 606 |
Reverse secured borrowings, assets | 4,379 | 5,272 |
Transfers accounted for as secured borrowings, liabilities | 359 | 360 |
Reverse secured borrowings, liabilities | 4,416 | 5,277 |
Residential Mortgage | Restricted cash | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, assets | 47 | 66 |
Reverse secured borrowings, assets | 23 | 42 |
Residential Mortgage | Advances and other receivables, net | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, assets | 441 | 540 |
Reverse secured borrowings, assets | 0 | 0 |
Residential Mortgage | Reverse mortgage interests, net | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, assets | 0 | 0 |
Reverse secured borrowings, assets | 4,356 | 5,230 |
Residential Mortgage | Advance facilities | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, liabilities | 358 | 359 |
Reverse secured borrowings, liabilities | 0 | 0 |
Residential Mortgage | Payables and other liabilities | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, liabilities | 1 | 1 |
Reverse secured borrowings, liabilities | 0 | 1 |
Residential Mortgage | Participating interest financing | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, liabilities | 0 | 0 |
Reverse secured borrowings, liabilities | 3,473 | 4,284 |
Residential Mortgage | Trust 2020-1 | HECM Securitizations (HMBS) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, liabilities | 0 | 0 |
Reverse secured borrowings, liabilities | 490 | 0 |
Residential Mortgage | Trust 2019-2 | HECM Securitizations (HMBS) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, liabilities | 0 | 0 |
Reverse secured borrowings, liabilities | 241 | 333 |
Residential Mortgage | Trust 2019-1 | HECM Securitizations (HMBS) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, liabilities | 0 | 0 |
Reverse secured borrowings, liabilities | 212 | 302 |
Residential Mortgage | Trust 2018-3 | HECM Securitizations (HMBS) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, liabilities | 0 | 0 |
Reverse secured borrowings, liabilities | 0 | 209 |
Residential Mortgage | Trust 2018-2 | HECM Securitizations (HMBS) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Transfers accounted for as secured borrowings, liabilities | 0 | 0 |
Reverse secured borrowings, liabilities | $ 0 | $ 148 |
Securitizations and Financings - Securitization Trusts (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Variable Interest Entities and Securitizations [Abstract] | ||
Total collateral balances - UPB | $ 1,326 | $ 1,503 |
Total certificate balances | 1,329 | 1,512 |
Unconsolidated securitization trusts | $ 154 | $ 193 |
Stockholders' Equity and Employee Benefit Plans - Narrative (Details) shares in Thousands |
1 Months Ended | 5 Months Ended | 7 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|
Mar. 31, 2020
shares
|
Dec. 31, 2018
USD ($)
|
Jul. 31, 2018
USD ($)
|
Dec. 31, 2020
USD ($)
installmentAnniversary
shares
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of installment anniversaries | installmentAnniversary | 3 | |||||
Granted (shares) | shares | 1,847 | |||||
Share-based compensation | $ 2,000,000 | $ 17,000,000 | $ 22,000,000 | $ 18,000,000 | ||
Unrecognized compensation expense | $ 42,000,000 | |||||
Unrecognized compensation expense, weighted average period | 1 year 2 months 26 days | |||||
Matching contributions amount | $ 25,000,000 | 20,000,000 | ||||
Tranche One | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Employer percent match of contribution | 100.00% | |||||
Percent match of gross pay | 2.00% | |||||
Tranche Two | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Employer percent match of contribution | 50.00% | |||||
Percent match of gross pay | 4.00% | |||||
Performance Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (shares) | shares | 500 | |||||
Vesting period | 3 years | |||||
Performance Stock Units | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage of target awards | 0.00% | |||||
Performance Stock Units | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting percentage of target awards | 200.00% | |||||
Stock Appreciation Rights (SARs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Share-based compensation | $ 0 | $ 0 | $ 0 | |||
Number of equity awards granted (in shares) | shares | 72 | |||||
Expiration term | 10 years |
Stockholders' Equity and Employee Benefit Plans - Share-Based Award Activities (Details) shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2020
$ / shares
shares
| |
Units | |
Beginning balance (shares) | shares | 5,235 |
Granted (shares) | shares | 1,847 |
Vested (shares) | shares | (1,312) |
Forfeited (shares) | shares | (941) |
Ending balance (shares) | shares | 4,829 |
Grant Date Fair Value | |
Beginning of Period (in dollars per share) | $ / shares | $ 14.00 |
Grants issued (in dollars per share) | $ / shares | 10.86 |
Vested (in dollars per share) | $ / shares | 14.03 |
Forfeited (in dollars per share) | $ / shares | 14.23 |
Ending of Period (in dollars per share) | $ / shares | $ 12.74 |
Earnings Per Share - Basic and Diluted EPS (Details) $ / shares in Units, shares in Thousands, $ in Millions |
5 Months Ended | 7 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Oct. 10, 2018 |
Dec. 31, 2018
USD ($)
$ / shares
shares
|
Jul. 31, 2018
USD ($)
$ / shares
shares
|
Dec. 31, 2020
USD ($)
$ / shares
shares
|
Dec. 31, 2019
USD ($)
$ / shares
shares
|
|
Earnings Per Share [Abstract] | |||||
Reverse stock split ratio | 0.083333 | ||||
Net income attributable to Successor/Predecessor | $ | $ 884 | $ 154 | $ 305 | $ 274 | |
Less: Undistributed earnings attributable to participating stockholders | $ | 8 | 0 | 3 | 2 | |
Net income attributable to Successor/Predecessor common stockholders | $ | $ 876 | $ 154 | $ 302 | $ 272 | |
Net income per common share attributable to Successor/Predecessor common stockholders: | |||||
Basic (in dollars per share) | $ / shares | $ 9.65 | $ 1.57 | $ 3.31 | $ 2.99 | |
Diluted (in dollars per share) | $ / shares | $ 9.54 | $ 1.55 | $ 3.20 | $ 2.95 | |
Weighted average shares of common stock outstanding (in thousands): | |||||
Basic (in shares) | 90,813 | 98,046 | 91,312 | 91,035 | |
Dilutive effect of stock awards (in shares) | 178 | 1,091 | 2,343 | 270 | |
Dilutive effect of participating securities (in shares) | 839 | 0 | 839 | 839 | |
Diluted (in shares) | 91,830 | 99,137 | 94,494 | 92,144 |
Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 31, 2018 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Current Income Taxes | ||||
Federal | $ 0 | $ (14) | $ (3) | $ 19 |
State | 0 | (1) | 92 | 74 |
Total current income taxes | 0 | (15) | 89 | 93 |
Deferred Income Taxes | ||||
Federal | (1,015) | 54 | 86 | (298) |
State | (6) | 9 | (83) | (68) |
Total deferred income taxes | (1,021) | 63 | 3 | (366) |
Total income tax expense (benefit) | $ (1,021) | $ 48 | $ 92 | $ (273) |
Income Taxes - Income Taxes at Federal Statutory Rate (Details) - USD ($) $ in Millions |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 31, 2018 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Amount | ||||
Tax Expense (Benefit) at Federal Statutory Rate | $ (29) | $ 42 | $ 84 | $ (1) |
State taxes, net of federal benefit | (6) | 8 | 7 | 5 |
Non-controlling interests | 0 | 0 | 0 | 1 |
Change in valuation allowance | (990) | 0 | 0 | (285) |
Deferred adjustments | 3 | (1) | (5) | 2 |
Nondeductible items | 1 | 7 | 7 | 4 |
Other, net | 0 | (8) | (1) | 1 |
Total income tax expense (benefit) | $ (1,021) | $ 48 | $ 92 | $ (273) |
Percent | ||||
Tax Expense (Benefit) at Federal Statutory Rate | 21.00% | 21.00% | 21.00% | 21.00% |
State taxes, net of federal benefit | 4.20% | 3.80% | 1.60% | (141.20%) |
Non-controlling interests | 0.00% | 0.00% | 0.00% | (21.10%) |
Change in valuation allowance | 720.00% | 0.00% | 0.00% | 8066.40% |
Deferred adjustments | (1.80%) | (0.50%) | (1.10%) | (64.10%) |
Nondeductible items | (1.00%) | 3.30% | 1.70% | (136.50%) |
Other, net | 0.00% | (3.80%) | (0.20%) | (5.70%) |
Total income tax expense (benefit) | 742.40% | 23.80% | 23.00% | 7718.80% |
Income Taxes - Narrative (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Jul. 31, 2018 |
Mar. 31, 2018 |
|
Tax Credit Carryforward [Line Items] | |||||
Unrecognized tax benefits | $ 17,000,000 | $ 0 | $ 0 | $ 0 | |
Unrecognized tax benefits, uncertain tax positions | 19,000,000 | ||||
Interest and penalties expense | $ 2,000,000 | ||||
Unrecognized tax benefits, net effect | $ 6,000,000 | ||||
Federal | |||||
Tax Credit Carryforward [Line Items] | |||||
Operating loss carryforwards, valuation allowance | 7,000,000 | ||||
Operating loss carryforwards | 2,600,000,000 | $ 4,700,000,000 | |||
State | |||||
Tax Credit Carryforward [Line Items] | |||||
Operating loss carryforwards, valuation allowance | $ 2,000,000 |
Income Taxes - Carryforward and Temporary Differences (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred Tax Assets | ||
Goodwill and intangible assets | $ 728 | $ 364 |
Loss carryforwards (federal, state & capital) | 558 | 998 |
Loss reserves | 115 | 108 |
Reverse mortgage interests | 38 | 44 |
Lease liability | 26 | 32 |
Accruals | 24 | 16 |
Other, net | 15 | 16 |
Total deferred tax assets | 1,504 | 1,578 |
Deferred Tax Liabilities | ||
MSR amortization and mark-to-market, net | (117) | (181) |
Right-of-use assets | (23) | (29) |
Depreciation and amortization, net | (13) | (12) |
Prepaid assets | (2) | (2) |
Total deferred tax liabilities | (155) | (224) |
Valuation allowance | (9) | (9) |
Deferred tax assets, net | $ 1,340 | $ 1,345 |
Income Taxes - Unrecognized Tax Benefits Rollforward (Details) $ in Millions |
7 Months Ended |
---|---|
Jul. 31, 2018
USD ($)
| |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Balance - beginning of period | $ 17 |
Decreases in tax positions of prior years | (17) |
Balance - end of period | $ 0 |
Fair Value Measurements - Narrative (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Mortgage Loans Held for Investment | Fair Value, Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Transfers from mortgage loans held for investment to held for sale | $ (12) |
Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
ASSETS | ||
Mortgage loans held for sale | $ 5,720 | $ 4,077 |
Forward MSRs - fair value | 2,703 | 3,496 |
Fair Value, Recurring | ||
ASSETS | ||
Mortgage loans held for sale | 5,720 | 4,077 |
Forward MSRs - fair value | 2,703 | 3,496 |
LIABILITIES | ||
Mortgage servicing rights financing | 33 | 37 |
Excess spread financing | 934 | 1,311 |
Fair Value, Recurring | Level 1 | ||
ASSETS | ||
Mortgage loans held for sale | 0 | 0 |
Forward MSRs - fair value | 0 | 0 |
LIABILITIES | ||
Mortgage servicing rights financing | 0 | 0 |
Excess spread financing | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
ASSETS | ||
Mortgage loans held for sale | 5,720 | 4,077 |
Forward MSRs - fair value | 0 | 0 |
LIABILITIES | ||
Mortgage servicing rights financing | 0 | 0 |
Excess spread financing | 0 | 0 |
Fair Value, Recurring | Level 3 | ||
ASSETS | ||
Mortgage loans held for sale | 0 | 0 |
Forward MSRs - fair value | 2,703 | 3,496 |
LIABILITIES | ||
Mortgage servicing rights financing | 33 | 37 |
Excess spread financing | 934 | 1,311 |
IRLCs | Fair Value, Recurring | ||
ASSETS | ||
Derivative financial instruments | 414 | 135 |
IRLCs | Fair Value, Recurring | Level 1 | ||
ASSETS | ||
Derivative financial instruments | 0 | 0 |
IRLCs | Fair Value, Recurring | Level 2 | ||
ASSETS | ||
Derivative financial instruments | 0 | 135 |
IRLCs | Fair Value, Recurring | Level 3 | ||
ASSETS | ||
Derivative financial instruments | 414 | 0 |
Forward MBS trades | Fair Value, Recurring | ||
ASSETS | ||
Derivative financial instruments | 37 | 7 |
LIABILITIES | ||
Derivative financial instruments | 156 | 12 |
Forward MBS trades | Fair Value, Recurring | Level 1 | ||
ASSETS | ||
Derivative financial instruments | 0 | 0 |
LIABILITIES | ||
Derivative financial instruments | 0 | 0 |
Forward MBS trades | Fair Value, Recurring | Level 2 | ||
ASSETS | ||
Derivative financial instruments | 37 | 7 |
LIABILITIES | ||
Derivative financial instruments | 156 | 12 |
Forward MBS trades | Fair Value, Recurring | Level 3 | ||
ASSETS | ||
Derivative financial instruments | 0 | 0 |
LIABILITIES | ||
Derivative financial instruments | 0 | 0 |
LPCs | Fair Value, Recurring | ||
ASSETS | ||
Derivative financial instruments | 38 | 12 |
LIABILITIES | ||
Derivative financial instruments | 1 | 3 |
LPCs | Fair Value, Recurring | Level 1 | ||
ASSETS | ||
Derivative financial instruments | 0 | 0 |
LIABILITIES | ||
Derivative financial instruments | 0 | 0 |
LPCs | Fair Value, Recurring | Level 2 | ||
ASSETS | ||
Derivative financial instruments | 0 | 12 |
LIABILITIES | ||
Derivative financial instruments | 0 | 3 |
LPCs | Fair Value, Recurring | Level 3 | ||
ASSETS | ||
Derivative financial instruments | 38 | 0 |
LIABILITIES | ||
Derivative financial instruments | $ 1 | $ 0 |
Fair Value Measurements - Reconciliation of Level 3 (Details) - Fair Value, Recurring - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Excess Spread Financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of year | $ 1,311 | $ 1,184 |
Total gains or losses included in earnings | (194) | (169) |
Payments received from borrowers | 0 | |
Purchases, issuances, sales, repayments and settlements | ||
Purchases | 0 | 0 |
Issuances | 24 | 542 |
Sales | 0 | 0 |
Settlements and repayments | (207) | (246) |
Transfers to mortgage loans held for sale | 0 | |
Transfers to real estate owned | 0 | |
Balance - end of year | 934 | 1,311 |
Mortgage Servicing Rights Financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of year | 37 | 32 |
Total gains or losses included in earnings | (4) | 5 |
Payments received from borrowers | 0 | |
Purchases, issuances, sales, repayments and settlements | ||
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements and repayments | 0 | 0 |
Transfers to mortgage loans held for sale | 0 | |
Transfers to real estate owned | 0 | |
Balance - end of year | 33 | 37 |
Forward Mortgage Servicing Rights | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of year | 3,496 | 3,665 |
Total gains or losses included in earnings | (1,595) | (1,053) |
Payments received from borrowers | 0 | |
Purchases, issuances, sales, repayments and settlements | ||
Purchases | 124 | 858 |
Issuances | 687 | 434 |
Sales | (9) | (408) |
Settlements and repayments | 0 | 0 |
Transfers to mortgage loans held for sale | 0 | |
Transfers to real estate owned | 0 | |
Balance - end of year | 2,703 | 3,496 |
IRLCs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of year | 135 | |
Total gains or losses included in earnings | 279 | |
Purchases, issuances, sales, repayments and settlements | ||
Purchases | 0 | |
Issuances | 0 | |
Sales | 0 | |
Settlements and repayments | 0 | |
Balance - end of year | 414 | 135 |
LPCs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of year | 12 | |
Total gains or losses included in earnings | 26 | |
Purchases, issuances, sales, repayments and settlements | ||
Purchases | 0 | |
Issuances | 0 | |
Sales | 0 | |
Settlements and repayments | 0 | |
Balance - end of year | 38 | 12 |
Mortgage Loans Held for Investment | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of year | $ 0 | 119 |
Total gains or losses included in earnings | 3 | |
Payments received from borrowers | (11) | |
Purchases, issuances, sales, repayments and settlements | ||
Purchases | 0 | |
Issuances | 0 | |
Sales | (94) | |
Settlements and repayments | 0 | |
Transfers to mortgage loans held for sale | (12) | |
Transfers to real estate owned | (5) | |
Balance - end of year | $ 0 |
Fair Value Measurements - Unobservable Inputs (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Minimum | Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 8.20% | |
Prepayment speed | 14.20% | |
Cost to service per loan | $ 66 | |
Minimum | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | (0.00010) | |
Minimum | Excess Spread Financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 9.90% | |
Prepayment speed | 13.90% | |
Recapture rate | 17.70% | |
Minimum | MSR financing liability | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 4.60% | |
Annual advance recovery rates | 18.30% | |
Maximum | Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 12.00% | |
Prepayment speed | 21.30% | |
Cost to service per loan | $ 257 | |
Maximum | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | 0.00022 | |
Maximum | Excess Spread Financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 15.70% | |
Prepayment speed | 15.00% | |
Recapture rate | 24.20% | |
Maximum | MSR financing liability | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 8.50% | |
Annual advance recovery rates | 22.00% | |
Weighted-average | Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 9.40% | 9.70% |
Prepayment speed | 15.40% | 13.10% |
Cost to service per loan | $ 98 | |
Weighted average life | 5 years | 5 years 9 months 18 days |
Weighted-average | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | 0.00012 | |
Weighted-average | Excess Spread Financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 12.20% | 11.60% |
Prepayment speed | 14.40% | 12.60% |
Weighted average life | 5 years 1 month 6 days | 5 years 9 months 18 days |
Recapture rate | 19.50% | 20.10% |
Weighted-average | MSR financing liability | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 7.50% | 8.90% |
Annual advance recovery rates | 19.90% | 18.80% |
Fair Value Measurements - Fair Value by Balance Sheet Line Item (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Financial assets | ||
Reverse mortgage interests, net | $ 5,253 | $ 6,279 |
Financial liabilities | ||
Unsecured senior notes, net | 2,074 | 2,366 |
Advance and warehouse facilities, net | 6,763 | 4,997 |
Non-recourse debt | 4,424 | 5,286 |
Fair Value, Recurring | ||
Financial assets | ||
Cash and cash equivalents | 695 | 329 |
Restricted cash | 218 | 283 |
Advances and other receivables, net | 988 | |
Loans subject to repurchase from Ginnie Mae | 6,159 | 560 |
Financial liabilities | ||
Unsecured senior notes, net | 2,074 | 2,366 |
Advance and warehouse facilities, net | 6,763 | 4,997 |
Liability for loans subject to repurchase from Ginnie Mae | 6,159 | 560 |
Fair Value, Recurring | Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 695 | 329 |
Restricted cash | 218 | 283 |
Advances and other receivables, net | 0 | |
Loans subject to repurchase from Ginnie Mae | 0 | 0 |
Financial liabilities | ||
Unsecured senior notes, net | 2,208 | 2,505 |
Advance and warehouse facilities, net | 0 | 0 |
Liability for loans subject to repurchase from Ginnie Mae | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Advances and other receivables, net | 0 | |
Loans subject to repurchase from Ginnie Mae | 6,159 | 560 |
Financial liabilities | ||
Unsecured senior notes, net | 0 | 0 |
Advance and warehouse facilities, net | 6,774 | 4,997 |
Liability for loans subject to repurchase from Ginnie Mae | 6,159 | 560 |
Fair Value, Recurring | Level 3 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Advances and other receivables, net | 988 | |
Loans subject to repurchase from Ginnie Mae | 0 | 0 |
Financial liabilities | ||
Unsecured senior notes, net | 0 | 0 |
Advance and warehouse facilities, net | 0 | 0 |
Liability for loans subject to repurchase from Ginnie Mae | 0 | 0 |
Fair Value, Nonrecurring | ||
Financial assets | ||
Advances and other receivables, net | 940 | |
Reverse mortgage interests, net | 5,253 | 6,279 |
Fair Value, Nonrecurring | Participating interest financing | ||
Financial liabilities | ||
Non-recourse debt | 3,485 | 4,299 |
Fair Value, Nonrecurring | Trust 2020-1 | ||
Financial liabilities | ||
Non-recourse debt | 488 | |
Fair Value, Nonrecurring | Trust 2019-2 | ||
Financial liabilities | ||
Non-recourse debt | 331 | |
Fair Value, Nonrecurring | Trust 2019-1 | ||
Financial liabilities | ||
Non-recourse debt | 240 | 300 |
Fair Value, Nonrecurring | Trust 2018-3 | ||
Financial liabilities | ||
Non-recourse debt | 211 | 208 |
Fair Value, Nonrecurring | Trust 2018-2 | ||
Financial liabilities | ||
Non-recourse debt | 148 | |
Fair Value, Nonrecurring | Level 1 | ||
Financial assets | ||
Advances and other receivables, net | 0 | |
Reverse mortgage interests, net | 0 | 0 |
Fair Value, Nonrecurring | Level 1 | Participating interest financing | ||
Financial liabilities | ||
Non-recourse debt | 0 | 0 |
Fair Value, Nonrecurring | Level 1 | Trust 2020-1 | ||
Financial liabilities | ||
Non-recourse debt | ||
Fair Value, Nonrecurring | Level 1 | Trust 2019-2 | ||
Financial liabilities | ||
Non-recourse debt | 0 | |
Fair Value, Nonrecurring | Level 1 | Trust 2019-1 | ||
Financial liabilities | ||
Non-recourse debt | 0 | 0 |
Fair Value, Nonrecurring | Level 1 | Trust 2018-3 | ||
Financial liabilities | ||
Non-recourse debt | 0 | 0 |
Fair Value, Nonrecurring | Level 1 | Trust 2018-2 | ||
Financial liabilities | ||
Non-recourse debt | 0 | |
Fair Value, Nonrecurring | Level 2 | ||
Financial assets | ||
Advances and other receivables, net | 0 | |
Reverse mortgage interests, net | 0 | 0 |
Fair Value, Nonrecurring | Level 2 | Participating interest financing | ||
Financial liabilities | ||
Non-recourse debt | 0 | 0 |
Fair Value, Nonrecurring | Level 2 | Trust 2020-1 | ||
Financial liabilities | ||
Non-recourse debt | ||
Fair Value, Nonrecurring | Level 2 | Trust 2019-2 | ||
Financial liabilities | ||
Non-recourse debt | 0 | |
Fair Value, Nonrecurring | Level 2 | Trust 2019-1 | ||
Financial liabilities | ||
Non-recourse debt | 0 | 0 |
Fair Value, Nonrecurring | Level 2 | Trust 2018-3 | ||
Financial liabilities | ||
Non-recourse debt | 0 | 0 |
Fair Value, Nonrecurring | Level 2 | Trust 2018-2 | ||
Financial liabilities | ||
Non-recourse debt | 0 | |
Fair Value, Nonrecurring | Level 3 | ||
Financial assets | ||
Advances and other receivables, net | 940 | |
Reverse mortgage interests, net | 5,383 | 6,318 |
Fair Value, Nonrecurring | Level 3 | Participating interest financing | ||
Financial liabilities | ||
Non-recourse debt | 3,496 | 4,299 |
Fair Value, Nonrecurring | Level 3 | Trust 2020-1 | ||
Financial liabilities | ||
Non-recourse debt | 490 | |
Fair Value, Nonrecurring | Level 3 | Trust 2019-2 | ||
Financial liabilities | ||
Non-recourse debt | 331 | |
Fair Value, Nonrecurring | Level 3 | Trust 2019-1 | ||
Financial liabilities | ||
Non-recourse debt | 241 | 300 |
Fair Value, Nonrecurring | Level 3 | Trust 2018-3 | ||
Financial liabilities | ||
Non-recourse debt | $ 212 | 208 |
Fair Value, Nonrecurring | Level 3 | Trust 2018-2 | ||
Financial liabilities | ||
Non-recourse debt | $ 148 |
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Litigation and Regulatory Matters | ||
Mortgage Servicing Rights [Line Items] | ||
Legal fees | $ 51 | $ 64 |
Reverse Mortgage Servicing Rights, Excluding Subservicing | ||
Mortgage Servicing Rights [Line Items] | ||
Principal amount outstanding on mortgage servicing rights | 18,091 | 22,725 |
Reverse mortgage interests, net | ||
Mortgage Servicing Rights [Line Items] | ||
Principal amount outstanding on mortgage servicing rights | 18,091 | 22,725 |
Maximum unfunded advance obligation | 2,202 | $ 2,617 |
Minimum | Litigation and Regulatory Matters | ||
Mortgage Servicing Rights [Line Items] | ||
Reasonably possible loss | 3 | |
Maximum | Litigation and Regulatory Matters | ||
Mortgage Servicing Rights [Line Items] | ||
Reasonably possible loss | $ 16 |
Segment Information - Financial Information (Details) - USD ($) $ in Millions |
5 Months Ended | 7 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Dec. 31, 2018 |
Jul. 31, 2018 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Revenues: | ||||
Service related, net | $ 418 | $ 901 | $ 423 | $ 909 |
Net gain on mortgage loans held for sale | 176 | 295 | 2,310 | 1,098 |
Total revenues | 594 | 1,196 | 2,733 | 2,007 |
Total expenses | 707 | 945 | 1,831 | 1,851 |
Other income (expenses), net: | ||||
Interest income | 256 | 333 | 334 | 605 |
Interest expense | (293) | (388) | (702) | (779) |
Other income (expenses), net | 13 | 6 | (135) | 15 |
Total other income (expenses), net | (24) | (49) | (503) | (159) |
Income (loss) before income tax expense (benefit) | (137) | 202 | 399 | (3) |
Depreciation and amortization for property and equipment and intangible assets | 39 | 33 | 74 | 91 |
Total assets | 16,973 | 17,026 | 24,165 | 18,305 |
Eliminations/ Reclassifications | ||||
Revenues: | ||||
Service related, net | (25) | |||
Net gain on mortgage loans held for sale | 25 | |||
Total revenues | 0 | |||
Total expenses | 0 | |||
Other income (expenses), net: | ||||
Interest income | 0 | |||
Interest expense | 0 | |||
Other income (expenses), net | 0 | |||
Total other income (expenses), net | 0 | |||
Income (loss) before income tax expense (benefit) | 0 | |||
Depreciation and amortization for property and equipment and intangible assets | 0 | |||
Total assets | (3,591) | |||
Operating Segments | ||||
Revenues: | ||||
Service related, net | 900 | |||
Net gain on mortgage loans held for sale | 295 | |||
Total revenues | 1,195 | |||
Total expenses | 842 | |||
Other income (expenses), net: | ||||
Interest income | 326 | |||
Interest expense | (305) | |||
Other income (expenses), net | 8 | |||
Total other income (expenses), net | 29 | |||
Income (loss) before income tax expense (benefit) | 382 | |||
Depreciation and amortization for property and equipment and intangible assets | 29 | |||
Total assets | 16,113 | |||
Operating Segments | Servicing | ||||
Revenues: | ||||
Service related, net | 217 | 740 | (115) | 408 |
Net gain on mortgage loans held for sale | 19 | 0 | 222 | 124 |
Total revenues | 236 | 740 | 107 | 532 |
Total expenses | 303 | 474 | 539 | 690 |
Other income (expenses), net: | ||||
Interest income | 222 | 288 | 237 | 500 |
Interest expense | (173) | (268) | (442) | (469) |
Other income (expenses), net | 6 | (1) | 0 | 4 |
Total other income (expenses), net | 55 | 19 | (205) | 35 |
Income (loss) before income tax expense (benefit) | (12) | 285 | (637) | (123) |
Depreciation and amortization for property and equipment and intangible assets | 9 | 15 | 20 | 19 |
Total assets | 13,460 | 14,578 | 16,173 | 11,743 |
Operating Segments | Originations | ||||
Revenues: | ||||
Service related, net | 24 | 36 | 105 | 80 |
Net gain on mortgage loans held for sale | 157 | 270 | 2,088 | 963 |
Total revenues | 181 | 306 | 2,193 | 1,043 |
Total expenses | 155 | 245 | 746 | 568 |
Other income (expenses), net: | ||||
Interest income | 27 | 38 | 95 | 98 |
Interest expense | (26) | (37) | (78) | (98) |
Other income (expenses), net | 5 | 0 | 0 | 4 |
Total other income (expenses), net | 6 | 1 | 17 | 4 |
Income (loss) before income tax expense (benefit) | 32 | 62 | 1,464 | 479 |
Depreciation and amortization for property and equipment and intangible assets | 5 | 7 | 18 | 18 |
Total assets | 1,498 | 4,701 | 5,447 | 4,313 |
Operating Segments | Xome | ||||
Revenues: | ||||
Service related, net | 177 | 149 | 433 | 422 |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 |
Total revenues | 177 | 149 | 433 | 422 |
Total expenses | 178 | 123 | 389 | 398 |
Other income (expenses), net: | ||||
Interest income | 0 | 0 | 0 | 0 |
Interest expense | (1) | 0 | 0 | 0 |
Other income (expenses), net | 1 | 9 | 4 | 14 |
Total other income (expenses), net | 0 | 9 | 4 | 14 |
Income (loss) before income tax expense (benefit) | (1) | 35 | 48 | 38 |
Depreciation and amortization for property and equipment and intangible assets | 5 | 7 | 15 | 14 |
Total assets | 167 | 425 | 128 | 139 |
Corporate/ Other | ||||
Revenues: | ||||
Service related, net | 0 | 1 | 0 | (1) |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 11 |
Total revenues | 0 | 1 | 0 | 10 |
Total expenses | 71 | 103 | 157 | 195 |
Other income (expenses), net: | ||||
Interest income | 7 | 7 | 2 | 7 |
Interest expense | (93) | (83) | (182) | (212) |
Other income (expenses), net | 1 | (2) | (139) | (7) |
Total other income (expenses), net | (85) | (78) | (319) | (212) |
Income (loss) before income tax expense (benefit) | (156) | (180) | (476) | (397) |
Depreciation and amortization for property and equipment and intangible assets | 20 | 4 | 21 | 40 |
Total assets | $ 1,848 | $ 913 | $ 2,417 | $ 2,110 |