Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 05, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-14100 | |
Entity Registrant Name | IMPAC MORTGAGE HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 33-0675505 | |
Entity Address, Address Line One | 19500 Jamboree Road | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92612 | |
City Area Code | 949 | |
Local Phone Number | 475-3600 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,500,935 | |
Entity Central Index Key | 0001000298 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | IMH | |
Security Exchange Name | NYSEAMER | |
Preferred Stock Purchase Rights | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Trading Symbol | IMH | |
Security Exchange Name | NYSEAMER |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 61,173 | $ 29,555 |
Restricted cash | 5,196 | 5,657 |
Mortgage loans held-for-sale | 37,035 | 308,477 |
Mortgage servicing rights | 850 | 749 |
Securitized mortgage trust assets | 1,642,730 | |
Other assets | 29,404 | 35,603 |
Total assets | 133,658 | 2,022,771 |
LIABILITIES | ||
Warehouse borrowings | 37,795 | 285,539 |
Convertible notes | 15,000 | 20,000 |
Long-term debt | 35,889 | 46,536 |
Securitized mortgage trust liabilities | 1,614,862 | |
Other liabilities | 41,522 | 45,898 |
Total liabilities | 130,206 | 2,012,835 |
Commitments and contingencies (See Note 11) | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.01 par value; 200,000,000 shares authorized; 21,500,935 and 21,332,684 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 215 | 213 |
Additional paid-in capital | 1,238,383 | 1,237,986 |
Accumulated other comprehensive earnings, net of tax | 29,812 | 22,044 |
Total accumulated deficit: | ||
Cumulative dividends declared | (822,520) | (822,520) |
Accumulated deficit | (442,459) | (427,808) |
Total accumulated deficit | (1,264,979) | (1,250,328) |
Total stockholders' equity | 3,452 | 9,936 |
Total liabilities and stockholders' equity | 133,658 | 2,022,771 |
Series A-1 junior participating preferred stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | ||
Series B 9.375% redeemable preferred stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | 7 | 7 |
Series C 9.125% redeemable preferred stock | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock | $ 14 | $ 14 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 21,500,935 | 21,332,684 |
Common stock, shares outstanding | 21,500,935 | 21,332,684 |
Series A-1 junior participating preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series B 9.375% redeemable preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% |
Preferred stock, liquidation value (in dollars) | $ 36,530 | $ 36,530 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 665,592 | 665,592 |
Preferred stock, shares outstanding | 665,592 | 665,592 |
Series C 9.125% redeemable preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, dividend rate (as a percent) | 9.125% | 9.125% |
Preferred stock, liquidation value (in dollars) | $ 35,127 | $ 35,127 |
Preferred stock, shares authorized | 5,500,000 | 5,500,000 |
Preferred stock, shares issued | 1,405,086 | 1,405,086 |
Preferred stock, shares outstanding | 1,405,086 | 1,405,086 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues | ||||
Gain on sale of loans, net | $ 179 | $ 10,693 | $ 6,134 | $ 30,824 |
Real estate services fees, net | 257 | 478 | 442 | 688 |
Gain (loss) on mortgage servicing rights, net | 45 | (37) | 155 | 1 |
Servicing fees (expense), net | 7 | (150) | (5) | (269) |
Other | 7 | (4) | 959 | 320 |
Total revenues, net | 495 | 10,980 | 7,685 | 31,564 |
Expenses | ||||
Personnel | 8,024 | 11,964 | 19,945 | 26,888 |
General, administrative and other | 5,323 | 5,882 | 10,458 | 11,063 |
Business promotion | 1,319 | 1,770 | 3,620 | 2,963 |
Total expenses | 14,666 | 19,616 | 34,023 | 40,914 |
Operating loss | (14,171) | (8,636) | (26,338) | (9,350) |
Other income (expense) | ||||
Interest income | 943 | 15,707 | 14,048 | 32,231 |
Interest expense | (2,203) | (15,149) | (15,192) | (31,013) |
Change in fair value of long-term debt | 1,980 | 1,417 | 3,622 | 2,442 |
Change in fair value of net trust assets, including trust REO gains | (2,141) | 9,248 | (3,814) | |
Total other income (expense), net | 720 | (166) | 11,726 | (154) |
Net (loss) earnings before income taxes | (13,451) | (8,802) | (14,612) | (9,504) |
Income tax expense | 16 | 62 | 39 | 43 |
Net loss | (13,467) | (8,864) | (14,651) | (9,547) |
Other comprehensive loss | ||||
Change in fair value of instrument specific credit risk of long-term debt | 10,037 | (538) | 7,768 | (2,205) |
Total comprehensive loss | $ (3,430) | $ (9,402) | $ (6,883) | $ (11,752) |
Net loss per common share: | ||||
Basic (in dollars per share) | $ (0.64) | $ (0.42) | $ (0.72) | $ (0.45) |
Diluted (in dollars per share) | $ (0.64) | $ (0.42) | $ (0.72) | $ (0.45) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock | Common Stock | Additional Paid-In Capital | Cumulative Dividends Declared | Accumulated Deficit | Accumulated Other Comprehensive Earnings, net of tax | Total |
Balance at Dec. 31, 2020 | $ 21 | $ 212 | $ 1,237,102 | $ (822,520) | $ (423,930) | $ 24,766 | $ 15,651 |
Balance (in shares) at Dec. 31, 2020 | 2,070,678 | 21,238,191 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of restricted stock units | $ 1 | 1 | |||||
Issuance of restricted stock units (in shares) | 94,493 | ||||||
Stock based compensation | 218 | 218 | |||||
Other comprehensive loss | (1,667) | (1,667) | |||||
Net loss | (683) | (683) | |||||
Balance at Mar. 31, 2021 | $ 21 | $ 213 | 1,237,320 | (822,520) | (424,613) | 23,099 | 13,520 |
Balance (in shares) at Mar. 31, 2021 | 2,070,678 | 21,332,684 | |||||
Balance at Dec. 31, 2020 | $ 21 | $ 212 | 1,237,102 | (822,520) | (423,930) | 24,766 | 15,651 |
Balance (in shares) at Dec. 31, 2020 | 2,070,678 | 21,238,191 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net loss | (9,547) | ||||||
Balance at Jun. 30, 2021 | $ 21 | $ 213 | 1,237,544 | (822,520) | (433,477) | 22,561 | 4,342 |
Balance (in shares) at Jun. 30, 2021 | 2,070,678 | 21,332,684 | |||||
Balance at Mar. 31, 2021 | $ 21 | $ 213 | 1,237,320 | (822,520) | (424,613) | 23,099 | 13,520 |
Balance (in shares) at Mar. 31, 2021 | 2,070,678 | 21,332,684 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Stock based compensation | 224 | 224 | |||||
Other comprehensive loss | (538) | (538) | |||||
Net loss | (8,864) | (8,864) | |||||
Balance at Jun. 30, 2021 | $ 21 | $ 213 | 1,237,544 | (822,520) | (433,477) | 22,561 | 4,342 |
Balance (in shares) at Jun. 30, 2021 | 2,070,678 | 21,332,684 | |||||
Balance at Dec. 31, 2021 | $ 21 | $ 213 | 1,237,986 | (822,520) | (427,808) | 22,044 | 9,936 |
Balance (in shares) at Dec. 31, 2021 | 2,070,678 | 21,332,684 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of restricted stock units | $ 2 | 2 | |||||
Issuance of restricted stock units (in shares) | 122,486 | ||||||
Stock based compensation | 260 | 260 | |||||
Other comprehensive loss | (2,269) | (2,269) | |||||
Net loss | (1,184) | (1,184) | |||||
Balance at Mar. 31, 2022 | $ 21 | $ 215 | 1,238,246 | (822,520) | (428,992) | 19,775 | 6,745 |
Balance (in shares) at Mar. 31, 2022 | 2,070,678 | 21,455,170 | |||||
Balance at Dec. 31, 2021 | $ 21 | $ 213 | 1,237,986 | (822,520) | (427,808) | 22,044 | 9,936 |
Balance (in shares) at Dec. 31, 2021 | 2,070,678 | 21,332,684 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net loss | (14,651) | ||||||
Balance at Jun. 30, 2022 | $ 21 | $ 215 | 1,238,383 | (822,520) | (442,459) | 29,812 | 3,452 |
Balance (in shares) at Jun. 30, 2022 | 2,070,678 | 21,500,935 | |||||
Balance at Mar. 31, 2022 | $ 21 | $ 215 | 1,238,246 | (822,520) | (428,992) | 19,775 | 6,745 |
Balance (in shares) at Mar. 31, 2022 | 2,070,678 | 21,455,170 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of deferred stock units (in shares) | 15,000 | ||||||
Issuance of restricted stock units (in shares) | 30,765 | ||||||
Stock based compensation | 137 | 137 | |||||
Other comprehensive loss | 10,037 | 10,037 | |||||
Net loss | (13,467) | (13,467) | |||||
Balance at Jun. 30, 2022 | $ 21 | $ 215 | $ 1,238,383 | $ (822,520) | $ (442,459) | $ 29,812 | $ 3,452 |
Balance (in shares) at Jun. 30, 2022 | 2,070,678 | 21,500,935 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (14,651) | $ (9,547) |
Gain on sale of mortgage servicing rights | (100) | |
Change in fair value of mortgage servicing rights | (55) | (1) |
Gain on sale of mortgage loans | (18,607) | (34,304) |
Change in fair value of mortgage loans held-for-sale | 7,482 | 597 |
Change in fair value of derivatives lending, net | 2,558 | 3,095 |
Change in provision for repurchases | 2,433 | (212) |
Origination of mortgage loans held-for-sale | (610,189) | (1,461,444) |
Sale and principal reduction on mortgage loans held-for-sale | 892,710 | 1,506,802 |
Gain from trust REO | (1,559) | |
Change in fair value of net trust assets, excluding trust REO | (9,248) | 5,373 |
Change in fair value of long-term debt | (3,622) | (2,442) |
Accretion of interest income and expense | 6,288 | 28,221 |
Stock-based compensation | 397 | 442 |
ROU asset impairment | 123 | |
Loss on disposal of premises and equipment | 102 | |
Net change in other assets | 4,569 | 77 |
Net change in other liabilities | (7,209) | (5,126) |
Net cash provided by (used in) operating activities | 252,879 | 30,074 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net change in securitized mortgage collateral | 72,889 | 308,189 |
Proceeds from transfer of trust assets and liabilities | 37,500 | |
Investment in corporate-owned life insurance | 108 | (224) |
Purchase of premises and equipment | (893) | (23) |
Proceeds from the sale of trust REO | 4,421 | |
Net cash provided by investing activities | 109,604 | 312,363 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayment of warehouse borrowings | (833,320) | (1,436,116) |
Borrowings under warehouse agreements | 585,576 | 1,432,348 |
Repayment of securitized mortgage borrowings | (78,818) | (342,581) |
Repayment of convertible notes | (5,000) | |
Net change in liabilities related to corporate-owned life insurance | 234 | 225 |
Issuance of restricted stock | 2 | 1 |
Net cash used in financing activities | (331,326) | (346,123) |
Net change in cash, cash equivalents and restricted cash | 31,157 | (3,686) |
Cash, cash equivalents and restricted cash at beginning of year | 35,212 | 59,752 |
Cash, cash equivalents and restricted cash at end of period | 66,369 | 56,066 |
NON-CASH TRANSACTIONS | ||
Transfer of securitized mortgage collateral to trust REO | 467 | 3,940 |
Transfer and deconsolidation of trust assets | 1,543,608 | |
Transfer and deconsolidation of trust liabilities | (1,543,608) | |
Mortgage servicing rights retained from issuance of mortgage backed securities and loan sales | $ 46 | $ 213 |
Summary of Business and Financi
Summary of Business and Financial Statement Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Business and Financial Statement Presentation | |
Summary of Business and Financial Statement Presentation | Note 1.—Summary of Business and Financial Statement Presentation Business Summary Impac Mortgage Holdings, Inc. (the Company or IMH) is a financial services company incorporated in Maryland with the following direct and indirect wholly-owned operating subsidiaries: Integrated Real Estate Service Corp. (IRES), Impac Mortgage Corp. (IMC), IMH Assets Corp. (IMH Assets), Impac Funding Corporation (IFC) and Copperfield Capital Corporation (CCC). The Company’s operations include the mortgage lending operations and real estate services conducted by IRES, IMC and CCC and the long-term mortgage portfolio (residual interests in securitizations reflected as securitized mortgage trust assets and liabilities in the consolidated balance sheets) conducted by IMH prior to the sale in the first quarter of 2022. The long-term mortgage portfolio was deconsolidated in March 2022 as the Company sold its residual interests in the consolidated securitized mortgage trusts (see Note. 6 — ). Financial Statement Presentation The accompanying unaudited consolidated financial statements of IMH and its subsidiaries (as defined above) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. These interim period condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the United States Securities and Exchange Commission. All significant intercompany balances and transactions have been eliminated in consolidation. In addition, certain amounts in the prior periods’ consolidated financial statements have been reclassified to conform to the current period presentation. Management has made a number of material estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. Additionally, other items affected by such estimates and assumptions include the valuation of trust assets and trust liabilities prior to the sale in March 2022, contingencies, the estimated obligation of repurchase reserves related to sold loans, the valuation of long-term debt, mortgage servicing rights (MSR), mortgage loans held-for-sale (LHFS) and derivative instruments, including interest rate lock commitments (IRLC). Actual results could differ from those estimates and assumptions. Recent Accounting Pronouncements Not Yet Effective There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s consolidated financial statements and footnote disclosures, from those disclosed in the 2021 Annual Report on Form 10-K, except for the following: In March 2020 and January 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04 and ASU 2021-01, “ Reference Rate Reform (Topic 848)” is currently evaluating the impact the adoption of this ASU would have on the Company’s consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, “ Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force) |
Mortgage Loans Held-for-Sale
Mortgage Loans Held-for-Sale | 6 Months Ended |
Jun. 30, 2022 | |
Mortgage Loans Held-for-Sale | |
Mortgage Loans Held-for-Sale | Note 2.—Mortgage Loans Held-for-Sale A summary of the unpaid principal balance (UPB) of mortgage LHFS by type is presented below: June 30, December 31, 2022 2021 Government (1) $ 613 $ 6,886 Conventional (2) 7,375 62,759 Jumbo & Non-qualified mortgages (NonQM) 28,839 231,142 Fair value adjustment (3) 208 7,690 Total mortgage loans held-for-sale $ 37,035 $ 308,477 (1) Includes all government-insured loans including Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA). (2) Includes loans eligible for sale to Federal National Mortgage Association (Fannie Mae or FNMA) and Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC). (3) Changes in fair value are included in gain on sale of loans, net in the accompanying consolidated statements of operations and comprehensive loss. At June 30, 2022 and December 31, 2021, the Company had no mortgage loans that were 90 days or more delinquent. Gain on sale of loans, net in the consolidated statements of operations and comprehensive loss, is comprised of the following for the three and six months ended June 30, 2022 and 2021: For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Gain on sale of mortgage loans $ 2,562 $ 17,852 $ 16,587 $ 39,115 Premium from servicing retained loan sales — 92 46 213 Unrealized loss from derivative financial instruments (1,244) (2,880) (2,558) (3,095) Gain (loss) from derivative financial instruments 1,862 (315) 6,005 2,914 Mark to market (loss) gain on LHFS (217) 271 (7,482) (597) Direct origination expenses, net (925) (3,737) (4,031) (7,938) Change in provision for repurchases (1,859) (590) (2,433) 212 Gain on sale of loans, net $ 179 $ 10,693 $ 6,134 $ 30,824 |
Mortgage Servicing Rights
Mortgage Servicing Rights | 6 Months Ended |
Jun. 30, 2022 | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | Note 3.—Mortgage Servicing Rights mortgagors, or if delinquent, when the underlying real estate is foreclosed upon and liquidated. The Company may receive other remuneration from rights to various mortgagor-contracted fees, such as late charges, collateral reconveyance charges and nonsufficient fund fees, and the Company is generally entitled to retain the interest earned on funds held pending remittance (or float) related to its collection of mortgagor principal, interest, tax and insurance payments. June 30, December 31, 2022 2021 Balance at beginning of year $ 749 $ 339 Additions from servicing retained loan sales 46 536 Changes in fair value 55 (126) Fair value of MSRs at end of period $ 850 $ 749 (1) Changes in fair value are included within gain on mortgage servicing rights, net in the accompanying consolidated statements of operations and comprehensive loss. At June 30, 2022 and December 31, 2021, the UPB of the mortgage servicing portfolio was comprised of the following: June 30, December 31, 2022 2021 Government insured $ 71,381 $ 71,841 Conventional — — Total loans serviced $ 71,381 $ 71,841 June 30, December 31, Mortgage Servicing Rights Sensitivity Analysis 2022 2021 Fair value of MSRs $ 850 $ 749 Prepayment Speed: Decrease in fair value from 10% adverse change (18) (24) Decrease in fair value from 20% adverse change (37) (48) Decrease in fair value from 30% adverse change (56) (70) Discount Rate: Decrease in fair value from 10% adverse change (38) (31) Decrease in fair value from 20% adverse change (72) (59) Decrease in fair value from 30% adverse change (104) (85) Sensitivities are hypothetical changes in fair value and cannot be extrapolated because the relationship of changes in assumptions to changes in fair value may not be linear. Also, the effect of a variation in a particular assumption is calculated without changing any other assumption, whereas a change in one factor may result in changes to another. Accordingly, no assurance can be given that actual results would be consistent with the results of these estimates. As a result, actual future changes in MSR values may differ significantly from those displayed above. Gain (loss) on mortgage servicing rights, net is comprised of the following for the three and six months ended June 30, 2022 and 2021: For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Change in fair value of mortgage servicing rights $ (6) $ (37) $ 55 $ 1 Gain on sale of mortgage servicing rights 51 — 100 — Gain (loss) on mortgage servicing rights, net $ 45 $ (37) $ 155 $ 1 For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Contractual servicing fees $ 64 $ 41 $ 134 $ 73 Subservicing and other costs (57) (191) (139) (342) Servicing fees (expense), net $ 7 $ (150) $ (5) $ (269) Loans Eligible for Repurchase from Government National Mortgage Association (GNMA or Ginnie Mae) The Company sells loans in Ginnie Mae guaranteed mortgage-backed securities (MBS) by pooling eligible loans through a pool custodian and assigning rights to the loans to Ginnie Mae. When these Ginnie Mae loans are initially pooled and securitized, the Company meets the criteria for sale treatment and de-recognizes the loans. The terms of the Ginnie Mae MBS program allow, but do not require, the Company to repurchase mortgage loans when the borrower has made no payments for three consecutive months. When the Company has the unconditional right, as servicer, to repurchase Ginnie Mae pool loans it has previously sold and are more than 90 days past due, and the repurchase will provide a “more than trivial benefit”, the Company then re-recognizes the loans on its consolidated balance sheets in other assets, at their UPB and records a corresponding liability in other liabilities in the consolidated balance sheets. At June 30, 2022 and December 31, 2021, loans eligible for repurchase from GNMA totaled $608 thousand and $337 thousand, respectively, in UPB. As part of the Company’s repurchase reserve, the Company records a repurchase provision to provide for estimated losses from the sale or securitization of all mortgage loans, including these loans. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | Note 4.—Leases The Company has three operating leases for office space expiring at various dates through 2024 and one financing lease which concludes in 2023. During the three and six months ended June 30, 2022, cash paid for operating leases was $1.2 million and $2.4 million, respectively, while total operating lease expense was $1.1 million and $2.1 million, respectively. During the three and six months ended June 30, 2021, cash paid for operating leases was $1.1 million and $2.3 million, respectively, while total operating lease expense was $984 thousand and $2.0 million, respectively. Operating lease expense includes short-term leases and sublease income, both of which are immaterial. Additionally, during the three and six months ended June 30, 2022, the Company recorded The following table presents the operating and finance lease balances within the consolidated balance sheets, weighted average remaining lease term, and weighted average discount rates related to the Company’s operating and finance leases as of June 30, 2022: June 30, Lease Assets and Liabilities Classification 2022 Assets Lease ROU assets Other assets $ 8,366 Liabilities Lease liabilities Other liabilities $ 10,481 Weighted average remaining lease term (in years) 2.2 Weighted average discount rate 4.8 % The following table presents the maturity of the Company’s operating and financing lease liabilities as of June 30, 2022: Year remaining 2022 $ 2,415 Year 2023 4,909 Year 2024 3,729 Total lease commitments $ 11,053 Less: imputed interest (572) Total lease liability $ 10,481 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Debt | Note 5.—Debt Warehouse Borrowings The Company, through its subsidiaries, enters into Master Repurchase Agreements with lenders providing warehouse facilities. The warehouse facilities are used to fund, and are secured by, residential mortgage loans that are held for sale. The warehouse and revolving lines of credit are repaid using proceeds from the sale of loans. The base interest rates on the Company’s warehouse lines bear interest at 1-month LIBOR plus a margin or note rate minus a margin. Some of the lines carry additional fees in the form of annual facility fees charged on the total line amount, commitment fees charged on the committed portion of the line and non-usage fees charged when monthly usage falls below a certain utilization percentage. The base interest rates for all warehouse lines of credit are subject to increase based upon the characteristics of the underlying loans collateralizing the lines of credit, including, but not limited to product type and number of days held for sale. Certain of the warehouse line lenders require the Company, at all times, to maintain cash accounts with minimum required balances. Under the terms of these warehouse lines, the Company is required to maintain various financial and other covenants. At June 30, 2022, the Company was not in compliance with certain financial covenants from its lenders and received the necessary waivers. The following table presents certain information on warehouse borrowings for the periods indicated: Maximum Balance Outstanding at Borrowing June 30, December 31, Capacity 2022 2021 Maturity Date Short-term borrowings: Repurchase agreement 1 (1) $ — $ — $ 30,009 May 24, 2022 Repurchase agreement 2 (2) 200,000 19,838 153,006 September 13, 2022 Repurchase agreement 3 300,000 6,136 56,794 September 23, 2022 Repurchase agreement 4 50,000 11,821 45,730 March 31, 2023 Total warehouse borrowings $ 550,000 $ 37,795 $ 285,539 ___________________________ (1) Repurchase agreement 1 was not renewed. (2) In July 2022, the maximum borrowing capacity was reduced to $50.0 million and the Company does not anticipate renewing the line upon expiration. Convertible Notes In May 2015, the Company issued $25.0 million Convertible Promissory Notes (Notes) to purchasers, some of which are related parties. The Notes were originally due to mature on or before May 9, 2020 and accrued interest at a rate of 7.5% per annum, to be paid quarterly. Noteholders may convert all or a portion of the outstanding principal amount of the Notes into shares of the Company’s common stock (Conversion Shares) at a rate of $21.50 per share, subject to adjustment for stock splits and dividends (Conversion Price). The Company has the right to convert the entire outstanding principal of the Notes into Conversion Shares at the Conversion Price if the market price per share of the common stock, as measured by the average volume-weighted closing stock price per share of the common stock on the NYSE AMERICAN (or any other U.S. national securities exchange then serving as the principal such exchange on which the shares of common stock are listed), reaches the level of $30.10 for any twenty (20) trading days in any period of thirty (30) consecutive trading days after the Closing Date (as defined in the Notes). Upon conversion of the Notes by the Company, the entire amount of accrued and unpaid interest (and all other amounts owing) under the Notes are immediately due and payable. To the extent the Company pays any cash dividends on its shares of common stock prior to conversion of the Notes, upon conversion of the Notes, the noteholders will also receive such dividends on an as-converted basis of the Notes less the amount of interest paid by the Company prior to such dividend. On April 15, 2020, the Company and the noteholders agreed to extend the outstanding Notes in the principal amount of $25.0 million originally issued in May 2015, at the conclusion of the original note term (First Amendment). The new Notes were issued with a six month term (November 9, 2020) and reduced the interest rate on such Notes to 7.0% per annum. In connection with the issuance of the First Amendment, the Company issued to the noteholders of the Notes, warrants to purchase up to an aggregate of 212,649 shares of the Company’s common stock at a cash exercise price of $2.97 per share. The relative fair value of the warrants was $242 thousand and recorded as debt discounts, which was accreted over the term of the warrants (October 2020), using an effective interest rate of 8.9%. The warrants are exercisable commencing on October 16, 2020 and expire on April 15, 2025. The First Amendment was accounted for as an extinguishment of debt. On October 28, 2020, the Company and certain holders of its Notes due November 9, 2020 in the aggregate principal amount of $25.0 million agreed to extend the maturity date of the Notes to May 9, 2022 and the Company decreased the aggregate principal amount of the Notes to $20.0 million, following the pay-down of $5.0 million in principal of the Notes on November 9, 2020 (Second Amendment). The interest rate on the Notes remained at 7.0% per annum. The Second Amendment was accounted for as an extinguishment of debt. On April 29, 2022, the Company and holders of its Notes agreed to extend the maturity date of the Notes upon conclusion of the term on May 9, 2022. The Company decreased the aggregate principal amount of the new Notes to $15.0 million, following the pay-down of $5.0 million in principal of the Notes on May 9, 2022 (Third Amendment). The new Notes are due and payable in three equal installments of $5.0 million on each of May 9, 2023, May 9, 2024 and the stated maturity date of May 9, 2025. If the Company has not received by October 31, 2022 approval of its stockholders for the exchange of its 9.375% Cumulative Redeemable Series B Preferred Stock (Series B Preferred Stock) and 9.125% Redeemable Series C Preferred Stock (Series C Preferred Stock) for cash or new proposed preferred stock and shares of Company Common Stock and, in the case of the Series C Preferred Stock, a warrant to purchase 1.5 shares of Common Stock, on terms agreed to by the requisite percentage of holders of Series B Preferred Stock and Series C Preferred Stock and provided notice of the subsequent redemption of any remaining outstanding Series B Preferred Stock and its Series C Preferred Stock for Common Stock (other than any failure to receive such approvals and to provide such notice of redemption arising from (i) any breach of any covenant or agreement with the Company by any holder(s) of its capital stock or (ii) the institution of any legal or similar proceedings by any holder(s) of its capital stock or any Governmental Authority, see Redeemable Preferred Stock Long-term Debt The Company carries its Junior Subordinated Notes at estimated fair value as more fully described in Note 7.—Fair Value of Financial Instruments. The following table shows the remaining principal balance and fair value of Junior Subordinated Notes issued as of June 30, 2022 and December 31, 2021: June 30, December 31, 2022 2021 Junior Subordinated Notes (1) $ 62,000 $ 62,000 Fair value adjustment (26,111) (15,464) Total Junior Subordinated Notes $ 35,889 $ 46,536 (1) Stated maturity of March 2034; requires quarterly interest payments at a variable rate of 3-month LIBOR plus 3.75% per annum. |
Securitized Mortgage Trusts
Securitized Mortgage Trusts | 6 Months Ended |
Jun. 30, 2022 | |
Securitized Mortgage Trusts | |
Securitized Mortgage Trusts | Note 6.—Securitized Mortgage Trusts Securitized Mortgage Trust Assets Securitized mortgage trust assets, which are recorded at their estimated fair value, were comprised of the following at June 30, 2022 and December 31, 2021: June 30, December 31, 2022 2021 Securitized mortgage collateral, at fair value $ — $ 1,639,251 REO, at net realizable value (NRV) — 3,479 Total securitized mortgage trust assets $ — $ 1,642,730 Securitized Mortgage Trust Liabilities Securitized mortgage trust liabilities, which are recorded at their estimated fair value, were comprised of the following at June 30, 2022 and December 31, 2021: June 30, December 31, 2022 2021 Securitized mortgage borrowings $ — $ 1,614,862 Changes in fair value of net trust assets, including trust REO gains (losses), were comprised of the following for the three and six months ended June 30, 2022 and 2021: For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Change in fair value of net trust assets, excluding REO $ — $ (1,828) $ 9,248 $ (5,373) (Losses) gains from trust REO — (313) — 1,559 Change in fair value of net trust assets, including trust REO gains (losses) $ — $ (2,141) $ 9,248 $ (3,814) |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | Note 7.—Fair Value of Financial Instruments The use of fair value to measure the Company’s financial instruments is fundamental to its consolidated financial statements and is a critical accounting estimate because a substantial portion of its assets and liabilities are recorded at estimated fair value. The following table presents the estimated fair value of financial instruments included in the consolidated financial statements as of the dates indicated: June 30, 2022 December 31, 2021 Carrying Estimated Fair Value Carrying Estimated Fair Value Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 61,173 $ 61,173 $ — $ — $ 29,555 $ 29,555 $ — $ — Restricted cash 5,196 5,196 — — 5,657 5,657 — — Mortgage loans held-for-sale 37,035 — 37,035 — 308,477 — 308,477 — Mortgage servicing rights 850 — — 850 749 — — 749 Derivative assets, lending, net (1) 510 — 12 498 3,111 — — 3,111 Securitized mortgage collateral — — — — 1,639,251 — — 1,639,251 Liabilities Warehouse borrowings $ 37,795 $ — $ 37,795 $ — $ 285,539 $ — $ 285,539 $ — Convertible notes 15,000 — — 15,000 20,000 — — 20,000 Long-term debt 35,889 — — 35,889 46,536 — — 46,536 Securitized mortgage borrowings — — — — 1,614,862 — — 1,614,862 Derivative liabilities, lending, net (2) 12 — 12 — 55 — 55 — (1) Represents IRLCs and Hedging Instruments and are included in other assets in the accompanying consolidated balance sheets. (2) Represents Hedging Instruments and are included in other liabilities in the accompanying consolidated balance sheets. The fair value amounts above have been estimated by management using available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop the estimates of fair value in both inactive and orderly markets. Accordingly, the estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. For securitized mortgage collateral and securitized mortgage borrowings, the underlying bonds were collateralized by Alt-A (non-conforming) residential and commercial loans and had limited or no market activity. The Company’s methodology to estimate fair value of these assets and liabilities included the use of internal pricing techniques such as the net present value of future expected cash flows (with observable market participant assumptions, where available) discounted at a rate of return based on the Company’s estimates of market participant requirements. The significant assumptions utilized in these internal pricing techniques, which were based on the characteristics of the underlying collateral, include estimated credit losses, estimated prepayment speeds and appropriate discount rates. Fair Value Hierarchy The application of fair value measurements may be on a recurring or nonrecurring basis depending on the accounting principles applicable to the specific asset or liability or whether management has elected to carry the item at its estimated fair value. FASB ASC 820-10-35 specifies a hierarchy of valuation techniques based on whether the inputs to those techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy: ● ● ● This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when estimating fair value. As a result of the lack of observable market data resulting from inactive markets, the Company has classified its MSRs, securitized mortgage collateral and borrowings, derivative assets and liabilities (IRLCs), Notes and long-term debt as Level 3 fair value measurements. Level 3 assets and liabilities measured at fair value on a recurring basis were approximately 1% and 40% and 83% and 84%, respectively, of total assets and total liabilities measured at estimated fair value at June 30, 2022 and December 31, 2021. Recurring Fair Value Measurements The Company assesses its financial instruments on a quarterly basis to determine the appropriate classification within the fair value hierarchy, as defined by ASC Topic 810. Transfers between fair value classifications occur when there are changes in pricing observability levels. Transfers of financial instruments among the levels occur at the beginning of the reporting period. There were no material transfers into Level 3 classified instruments during the six months ended June 30, 2022. The following tables present the Company’s assets and liabilities that are measured at estimated fair value on a recurring basis, including financial instruments for which the Company has elected the fair value option at June 30, 2022 and December 31, 2021, based on the fair value hierarchy: Recurring Fair Value Measurements June 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Mortgage loans held-for-sale $ — $ 37,035 $ — $ — $ 308,477 $ — Derivative assets, lending, net (1) — 12 498 — — 3,111 Mortgage servicing rights — — 850 — — 749 Securitized mortgage collateral — — — — — 1,639,251 Total assets at fair value $ — $ 37,047 $ 1,348 $ — $ 308,477 $ 1,643,111 Liabilities Securitized mortgage borrowings $ — $ — $ — $ — $ — $ 1,614,862 Long-term debt — — 35,889 — — 46,536 Derivative liabilities, lending, net (2) — 12 — — 55 — Total liabilities at fair value $ — $ 12 $ 35,889 $ — $ 55 $ 1,661,398 (1) At June 30, 2022, derivative assets, lending, net included $498 thousand in IRLCs and $12 thousand in Hedging Instruments included in other assets in the accompanying consolidated balance sheets. At December 31, 2021, derivative assets, lending, net included $3.1 million in IRLCs and is included in other assets in the accompanying consolidated balance sheets. (2) At December 31, 2021, derivative liabilities, lending, net are included in other liabilities in the accompanying consolidated balance sheets. The following tables present reconciliations for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended June 30, 2022 and 2021: Level 3 Recurring Fair Value Measurements For the Three Months Ended June 30, 2022 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, March 31, 2022 $ — $ — $ 856 $ 846 $ (47,549) Total gains (losses) included in earnings: Interest income — — — — — Interest expense — — — — (357) Change in fair value — — (6) (348) 1,980 Change in instrument specific credit risk — — — — 10,037 (1) Total gains (losses) included in earnings — — (6) (348) 11,660 Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — — — — Settlements — — — — — Fair value, June 30, 2022 $ — $ — $ 850 $ 498 $ (35,889) (1) Amount represents the change in instrument specific credit risk in other comprehensive gain (loss) in the consolidated statements of operations and comprehensive loss. Level 3 Recurring Fair Value Measurements For the Three Months Ended June 30, 2021 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, March 31, 2021 $ 2,038,545 $ (2,028,210) $ 498 $ 5,078 $ (45,361) Total gains (losses) included in earnings: Interest income (1) (4,722) — — — — Interest expense (1) — (8,909) — — (418) Change in fair value (2,550) 722 (37) (816) 1,417 Change in instrument specific credit risk — — — — (538) (2) Total gains (losses) included in earnings (7,272) (8,187) (37) (816) 461 Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — 92 — — Settlements (172,850) 189,173 — — — Fair value, June 30, 2021 $ 1,858,423 $ (1,847,224) $ 553 $ 4,262 $ (44,900) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $2.1 million for the three months ended June 30, 2021. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations and comprehensive loss is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Amount represents the change in instrument specific credit risk in other comprehensive gain (loss) in the consolidated statements of operations and comprehensive loss. The following tables present reconciliations for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2022 and 2021: Level 3 Recurring Fair Value Measurements For the Six Months Ended June 30, 2022 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, December 31, 2021 $ 1,639,251 $ (1,614,862) $ 749 $ 3,111 $ (46,536) Total gains (losses) included in earnings: Interest income (1) 2,019 — — — — Interest expense (1) — (7,564) — — (743) Change in fair value 9,248 — 55 (2,613) 3,622 Change in instrument specific credit risk — — — — 7,768 (2) Total gains (losses) included in earnings 11,267 (7,564) 55 (2,613) 10,647 Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — 46 — — Settlements (1,650,518) 1,622,426 — — — Fair value, June 30, 2022 $ — $ — $ 850 $ 498 $ (35,889) Unrealized gains (losses) still held (3) $ — $ — $ 850 $ 498 $ 26,111 (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities prior to the sale in March 2022. Net interest income, including cash received and paid, was $1.2 million for the six months ended June 30, 2022. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations and comprehensive loss is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Amount represents the change in instrument specific credit risk in other comprehensive gain (loss) in the consolidated statements of operations and comprehensive loss. (3) Represents the amount of unrealized gains relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2022. Level 3 Recurring Fair Value Measurements For the Six Months Ended June 30, 2021 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, December 31, 2020 $ 2,100,175 $ (2,086,557) $ 339 $ 7,275 $ (44,413) Total (losses) gains included in earnings: Interest income (1) (9,479) — — — — Interest expense (1) — (18,018) — — (724) Change in fair value 79,857 (85,230) 1 (3,013) 2,442 Change in instrument specific credit risk — — — — (2,205) (2) Total gains (losses) included in earnings 70,378 (103,248) 1 (3,013) (487) Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — 213 — — Settlements (312,130) 342,581 — — — Fair value, June 30, 2021 $ 1,858,423 $ (1,847,224) $ 553 $ 4,262 $ (44,900) Unrealized (losses) gains still held (3) $ (186,507) $ 2,397,426 $ 553 $ 4,262 $ 17,100 (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $4.3 million for the three and six months ended June 30, 2021. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations and comprehensive gain (loss) is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Amount represents the change in instrument specific credit risk in other comprehensive loss in the consolidated statements of operations and comprehensive loss. (3) Represents the amount of unrealized (losses) gains relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2021 The following table presents quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and nonrecurring basis at June 30, 2022 and December 31, 2021: June 30, 2022 December 31, 2021 Unobservable Range of Weighted Range of Weighted Financial Instrument Input Inputs Average Inputs Average Assets and liabilities backed by real estate Securitized mortgage collateral, and Prepayment rates - % - % 2.9 - 46.3 % 10.7 % Securitized mortgage borrowings Default rates - % - % 0.06 - 4.3 % 1.7 % Loss severities - % - % 0.01 - 97.6 % 70.1 % Discount rates - % - % 2.1 - 13.0 % 3.6 % Other assets and liabilities Mortgage servicing rights Discount rates 12.5 - 15.0 % 12.8 % 12.5 - 15.0 % 12.8 % Prepayment rates 7.5 - 12.5 % 8.5 % 8.01 - 29.1 % 10.3 % Derivative assets - IRLCs, net Pull-through rates 40.0 - 99.0 % 69.5 % 50.0 - 98.0 % 79.0 % Long-term debt Discount rates 14.2 % 14.2 % 8.6 % 8.6 % Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Three Months Ended June 30, 2022 Change in Fair Value of Interest Interest Net Trust Long-term Other Revenue Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ — $ — $ — $ — $ — $ — $ — Securitized mortgage borrowings — — — — — — — Long-term debt — (357) — 1,980 — — 1,623 Mortgage servicing rights (2) — — — — (6) — (6) Mortgage loans held-for-sale — — — — — (217) (217) Derivative assets — IRLCs — — — — — (348) (348) Derivative liabilities — Hedging Instruments — — — — — (896) (896) Total $ — $ (357) $ — $ 1,980 $ (6) $ (1,461) $ 156 (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain (loss) on MSRs, net in the consolidated statements of operations and comprehensive loss. Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Three Months Ended June 30, 2021 Change in Fair Value of Interest Interest Net Trust Long-term Other Revenue Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ (4,722) $ — $ (2,550) $ — $ — $ — $ (7,272) Securitized mortgage borrowings — (8,909) 722 — — — (8,187) Long-term debt — (418) — 1,417 — — 999 Mortgage servicing rights (2) — — — — (37) — (37) Mortgage loans held-for-sale — — — — — 271 271 Derivative assets — IRLCs — — — — — (816) (816) Derivative liabilities — Hedging Instruments — — — — — (2,064) (2,064) Total $ (4,722) $ (9,327) $ (1,828) (3) $ 1,417 $ (37) $ (2,609) $ (17,106) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain (loss) on MSRs, net in the consolidated statements of operations and comprehensive loss. (3) For the three months ended June 30, 2021, change in the fair value of net trust assets, excluding REO was $1.8 million. Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Six Months Ended June 30, 2022 Change in Fair Value of Interest Interest Net Trust Long-term Other Income Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ 2,019 $ — $ 9,248 $ — $ — $ — $ 11,267 Securitized mortgage borrowings — (7,564) — — — — (7,564) Long-term debt — (743) — 3,622 — — 2,879 Mortgage servicing rights (2) — — — — 55 — 55 Mortgage loans held-for-sale — — — — — (7,482) (7,482) Derivative assets — IRLCs — — — — — (2,613) (2,613) Derivative liabilities — Hedging Instruments — — — — — 55 55 Total $ 2,019 $ (8,307) $ 9,248 (3) $ 3,622 $ 55 $ (10,040) $ (3,403) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain (loss) on MSRs, net in the consolidated statements of operations and comprehensive loss. (3) For the six months ended June 30, 2022, change in the fair value of net trust assets, excluding REO was $9.2 million. Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Six Months Ended June 30, 2021 Change in Fair Value of Interest Interest Net Trust Long-term Other Income Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ (9,479) $ — 79,857 $ — $ — $ — $ 70,378 Securitized mortgage borrowings — (18,018) (85,230) — — — (103,248) Long-term debt — (724) — 2,442 — — 1,718 Mortgage servicing rights (2) — — — — 1 — 1 Mortgage loans held-for-sale — — — — — (597) (597) Derivative assets — IRLCs — — — — — (3,013) (3,013) Derivative liabilities — Hedging Instruments — — — — — (82) (82) Total $ (9,479) $ (18,742) $ (5,373) (3) $ 2,442 $ 1 $ (3,692) $ (34,843) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain (loss) on MSRs, net in the consolidated statements of operations and comprehensive loss. (3) For the six months ended June 30, 2021, change in the fair value of net trust assets, excluding REO was $5.4 million. Mortgage servicing rights Mortgage loans held-for-sale accordingly, the Company classifies its mortgage LHFS as a Level 2 measurement at June 30, 2022 and December 31, 2021. Securitized mortgage collateral Securitized mortgage borrowings Long-term debt Derivative assets and liabilities, lending The following table includes information for the derivative assets and liabilities related to lending for the periods presented: Total Gains (Losses) Total Gains (Losses) Notional Amount For the Three Months Ended For the Six Months Ended June 30, December 31, June 30, June 30, 2022 2021 2022 2021 2022 2021 Derivative – IRLC's $ 55,175 $ 255,150 $ (348) $ (816) $ (2,613) $ (3,013) Derivative – TBA MBS 12,500 102,000 1,072 (2,379) 4,760 2,832 Derivative – Swap Futures 3,300 — (106) — 1,300 — (1) Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations and comprehensive loss. Nonrecurring Fair Value Measurements The Company is required to measure certain assets and liabilities at estimated fair value from time to time. These fair value measurements typically result from the application of specific accounting pronouncements under GAAP. The fair value measurements are considered nonrecurring fair value measurements under FASB ASC 820-10. There were no financial or non-financial assets measured using nonrecurring fair value measurements at June 30, 2022. The following tables present financial and non-financial assets measured using nonrecurring fair value measurements at June 30, 2022 and 2021, and total (losses) gains for the three and six months ended June 30, 2022 and 2021, respectively: Nonrecurring Fair Value Measurements Total Losses (1) June 30, 2022 For the Three Months Ended For the Six Months Ended Level 1 Level 2 Level 3 June 30, 2022 June 30, 2022 ROU asset impairment — — 8,366 (123) (123) (1) Total losses reflect losses from all nonrecurring measurements during the period. Nonrecurring Fair Value Measurements Total (Losses) Gains (1) June 30, 2021 For the Three Months Ended For the Six Months Ended Level 1 Level 2 Level 3 June 30, 2021 June 30, 2021 REO (2) $ — $ 4,251 $ — $ (313) $ 1,559 (1) Total gains (losses) reflect gains (losses) from all nonrecurring measurements during the period. (2) For the three and six months ended June 30, 2021, the Company recorded $( 313) thousand and $1.6 million, respectively, in (losses) gains related to changes in NRV of properties. Losses represent impairment of the NRV attributable to an increase in state specific loss severities on properties held during the period which resulted in a decrease to NRV. Gains represent recovery of the NRV attributable to an improvement in state specific loss severities on properties held during the period which resulted in an increase to NRV. Real estate owned ROU asset impairment |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Income Taxes | Note 8.—Income Taxes The Company calculates its quarterly tax provision pursuant to the guidelines in ASC 740 Income Taxes For the three and six months ended June 30, 2022, the Company recorded income tax expense was approximately $16 thousand and $39 thousand, respectively, which was the result of state income taxes from states where the Company does not have net operating loss (NOL) carryforwards or state minimum taxes. For the three and six months ended June 30, 2021, the Company recorded income tax expense of approximately $62 thousand and $43 thousand, respectively, which was the result of applying 1) the calculated annual effective tax rate (ETR) against the year to date net loss, and 2) the discrete method in jurisdictions where the Company meets an exception to using ETR. The net deferred tax assets (DTA) were fully reserved for at June 30, 2022, consistent with December 31, 2021. As of December 31, 2021, the Company had estimated NOL carryforwards of approximately $623.5 million. Federal NOL carryforwards begin to expire in 2027. Included in the estimated NOL carryforward is $65.9 million of NOLs with an indefinite carryover period. As of December 31, 2021, the Company had estimated California NOL carryforwards of approximately $435.2 million, which begin to expire in 2028. The Company may not be able to realize the maximum benefit due to the nature and tax entities that hold the NOL. |
Reconciliation of Loss Per Comm
Reconciliation of Loss Per Common Share | 6 Months Ended |
Jun. 30, 2022 | |
Reconciliation of Loss Per Common Share | |
Reconciliation of Loss Per Common Share | Note 9.—Reconciliation of Loss Per Common Share effect of stock options, restricted stock awards (RSAs), restricted stock units (RSUs) and deferred stock units (DSUs), For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Numerator for basic loss per share: Net loss $ (13,467) $ (8,864) $ (14,651) $ (9,547) Less: cumulative non-declared dividends on preferred stock (1) (390) — (780) — Net loss attributable to common stockholders $ (13,857) $ (8,864) $ (15,431) $ (9,547) Numerator for diluted loss per share: Net loss $ (13,857) $ (8,864) $ (15,431) $ (9,547) Interest expense attributable to convertible notes (2) — — — — Net loss plus interest expense attributable to convertible notes $ (13,857) $ (8,864) $ (15,431) $ (9,547) Denominator for basic loss per share (3): Basic weighted average common shares outstanding during the period 21,509 21,344 21,463 21,319 Denominator for diluted loss per share (3): Basic weighted average common shares outstanding during the period 21,509 21,344 21,463 21,319 Net effect of dilutive convertible notes and warrants (2) — — — — Net effect of dilutive stock options, DSU’s, RSA's and RSU's (2) — — — — Diluted weighted average common shares 21,509 21,344 21,463 21,319 Net loss per common share: Basic $ (0.64) $ (0.42) $ (0.72) $ (0.45) Diluted $ (0.64) $ (0.42) $ (0.72) $ (0.45) (1) Cumulative non-declared dividends in arrears are included beginning July 15, 2021, which was the date the Maryland Court of Appeals affirmed the decision in granting summary judgment in favor of the plaintiffs on the Preferred B voting rights (see Note 12. – Equity and Share Based Payments). (2) Adjustments to diluted loss per share for the three and six months ended June 30, 2022 and 2021, were excluded from the calculation, as they were anti-dilutive. (3) Number of shares presented in thousands. At June 30, 2022 and 2021, there were 804 thousand and 1.0 million shares, respectively, of stock options, RSUs and DSUs outstanding in the aggregate. For the three and six months ended June 30, 2022, there were 698 thousand and 930 thousand shares, respectively, attributable to the Notes that were anti-dilutive. For the three and six months ended June 30, 2021, there were 930 thousand shares attributable to the Notes that were anti-dilutive. Additionally, for the three and six months ended June 30, 2022 and 2021, there were 213 thousand warrants that were anti-dilutive. In addition to the potential dilutive effects of stock options, RSAs, RSUs, DSUs, warrants and Notes listed above, see Note 12.—Equity and Share Based Payments, Redeemable Preferred Stock Common and preferred dividends are included in the reconciliation of earnings per share beginning July 15, 2021, which was the date the Maryland Court of Appeals affirmed the decision in granting summary judgment in favor of the plaintiffs on the Preferred B voting rights. Cumulative preferred dividends, whether or not declared, are reflected in basic and diluted earnings per share in accordance with ASC 260-10-45-11, despite not being accrued for on the consolidated balance sheets. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting | |
Segment Reporting | Note 10.—Segment Reporting The Company has three primary reporting segments which include mortgage lending, real estate services and long-term mortgage portfolio. Unallocated corporate and other administrative costs, including the costs associated with being a public company, are presented in Corporate and other. Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Three Months Ended June 30, 2022: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 179 $ — $ — $ — $ 179 Servicing income, net 7 — — — 7 Gain on mortgage servicing rights, net 45 — — — 45 Real estate services fees, net — 257 — — 257 Other revenue (expense) 1 — 28 (22) 7 Other operating expense (9,378) (359) (129) (4,800) (14,666) Other income (expense) 261 — 877 (418) 720 Net (loss) earnings before income tax expense $ (8,885) $ (102) $ 776 $ (5,240) (13,451) Income tax expense 16 Net loss $ (13,467) Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Three Months Ended June 30, 2021: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 10,693 $ — $ — $ — $ 10,693 Servicing expenses, net (150) — — — (150) Loss on mortgage servicing rights, net (37) — — — (37) Real estate services fees, net — 478 — — 478 Other revenue (expense) — — 42 (46) (4) Other operating expense (15,288) (356) (135) (3,837) (19,616) Other (expense) income (16) — 314 (464) (166) Net (loss) earnings before income tax expense $ (4,798) $ 122 $ 221 $ (4,347) $ (8,802) Income tax expense 62 Net loss $ (8,864) Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Six Months Ended June 30, 2022: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 6,134 $ — $ — $ — $ 6,134 Servicing expense, net (5) — — — (5) Gain on mortgage servicing rights, net 155 — — — 155 Real estate services fees, net — 442 — — 442 Other revenue 4 — 43 912 959 Other operating expense (23,880) (718) (141) (9,284) (34,023) Other income (expense) 649 — 11,959 (882) 11,726 Net (loss) earnings before income tax expense $ (16,943) $ (276) $ 11,861 $ (9,254) (14,612) Income tax expense 39 Net loss $ (14,651) Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Six Months Ended June 30, 2021: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 30,824 $ — $ — $ — $ 30,824 Servicing expense, net (269) — — — (269) Gain on mortgage servicing rights, net 1 — — — 1 Real estate services fees, net — 688 — — 688 Other revenue 23 — 69 228 320 Other operating expense (31,516) (725) (256) (8,417) (40,914) Other (expense) income (199) — 969 (924) (154) Net (loss) earnings before income tax expense $ (1,136) $ (37) $ 782 $ (9,113) $ (9,504) Income tax expense 43 Net loss $ (9,547) Mortgage Real Estate Long-term Corporate Balance Sheet Items as of: Lending Services Portfolio and other Consolidated Total Assets at June 30, 2022 (1) $ 108,870 $ 502 $ 63 $ 24,223 $ 133,658 Total Assets at December 31, 2021 (1) $ 351,173 $ 502 $ 1,642,871 $ 28,225 $ 2,022,771 (1) All segment asset balances exclude intercompany balances. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 11.—Commitments and Contingencies Legal Proceedings The Company is a defendant in or a party to a number of legal actions or proceedings that arise in the ordinary course of business. In some of these actions and proceedings, claims for monetary damages are asserted against the Company. In view of the inherent difficulty of predicting the outcome of such legal actions and proceedings, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss related to each pending matter may be, if any. The legal matter updates summarized below are ongoing and may have an effect on the Company’s business and future financial condition and results of operations: Timm, et al v. Impac Mortgage Holdings, Inc., et al. On December 7, 2011, a purported class action was filed in the Circuit Court of Baltimore City (Circuit Court) entitled Timm, et al v. Impac Mortgage Holdings, Inc., et al. (Maryland Action) on behalf of holders of the Company’s 9.375% Series B Cumulative Redeemable Preferred Stock (Preferred B) and 9.125% Series C Cumulative Redeemable Preferred Stock (Preferred C) who did not tender their stock in connection with the Company’s 2009 Offer to Purchase and Consent Solicitation (2009 Offer), including that the Company failed to achieve the requisite number of votes to amend the 2004 Series B Articles Supplementary, that the consents of the holders of Preferred B and Preferred C stock to amend the 2004 Series B Articles Supplementary and 2004 Series C Articles Supplementary (together, the 2004 Articles Supplementary) were not effective, and that the Company’s Board of Directors breached their fiduciary duties by recommending and approving the 2009 Offer. The Maryland Action sought a judicial declaration that the Article Amendments related to the 2009 Offer (the 2009 Article Amendments) were ineffective, reinstatement of cumulative dividends on the Preferred B and Preferred C, payment of additional dividends that would have been required if the 2004 Articles Supplementary had remained in effect after June 29, 2009 (due to the Company’s purchase of certain Preferred Stock before year end 2009), the election of two directors by the holders of Preferred B and Preferred C stock, punitive damages and legal expenses. In 2013, the Company and the individual defendants in the Maryland Action prevailed on a motion to dismiss all claims, except the claim that the Company had failed to receive the requisite number of votes to amend the 2004 Series B Articles Supplementary and related remedies. All claims made on behalf of the holders of Preferred C and all claims against individual defendants were dismissed. The case proceeded to discovery and cross-motions for summary judgment on the remaining primary dispute as to whether the 2004 Series B Articles Supplementary required the approval of the holders of two-thirds two-thirds The Circuit Court entered a Judgment Order (Judgment Order) on July 16, 2018 (amended on July 24, 2018), whereby it entered a partial final judgment: (1) in favor of the Company and all other defendants on all claims on behalf of the holders of Preferred C and all claims against all individual defendants, thereby affirming the validity of the 2009 Article Amendments to the 2004 Series C Articles Supplementary; (2) declaring its interpretation of the voting provision language in the 2004 Series B Articles Supplementary to mean that consent of the holders of two-thirds sixty The Company appealed from the Judgment Order and one co-Plaintiff cross-appealed to the Court of Special Appeals (CSA). After briefing and argument, the CSA issued an opinion on April 1, 2020, affirming the Circuit Court’s judgments. Specifically, the CSA affirmed judgment in favor of the Company and other defendants on all claims involving Preferred C and affirmed judgment in favor of plaintiffs on the Preferred B voting rights interpretation, finding that the voting rights language in the 2004 Series B Articles Supplementary required consent of the holders of two-thirds The Company filed a petition for a writ of certiorari to the Maryland Court of Appeals (Court of Appeals) seeking review of the voting rights decision, which was granted. Neither of the two co-Plaintiffs sought further review. The Court of Appeals issued its decision on July 15, 2021, affirming the decisions of the Circuit Court and the Court of Special Appeals granting summary judgment in favor of the plaintiffs on the Preferred B voting rights language interpretation. Accordingly, the 2009 Article Amendments to the 2004 Series B Articles Supplementary were not validly adopted and the 2004 Series B Articles Supplementary remained in effect. On August 17, 2021, the Court of Appeals issued its mandate returning the case to the Circuit Court for final proceedings on certain open issues, discussed below. On October 25, 2021, the case was assigned to a judge of the Circuit Court to oversee final disposition of outstanding issues. On remand, the Circuit Court directed the parties to submit briefs on any outstanding issues. The two co-Plaintiffs filed motions taking differing positions regarding certification of a Preferred B (the Class), appointment of a Class representative and Class counsel, notice to the Class regarding payment of the Outstanding 2009 Dividends and any award of attorney’s fees to Plaintiffs’ counsel from future dividends. After a hearing on February 18, 2022, the Circuit Court took all such matters under submission. On July 22, 2022, the Circuit Court issued an Order Certifying Class and Providing for Class Notice and Final Hearing, accompanied by a Memorandum Opinion explaining the Circuit Court’s rulings on the matters under submission. The Circuit Court denied plaintiff Curtis Timm’s Motion for Class Certification and Other Relief and granted plaintiff Camac Fund LP’s Motion to Certify Class, Appoint Class Representative and Lead Counsel, Preliminarily Determine Right to Receive Dividends, and Set Final Judgment Hearing. The Circuit Court certified a non-opt out class of owners of Preferred B stock from the close of the tender offer on June 29, 2009 to the date of the class certification order, appointed plaintiff Camac Fund as Lead Class Plaintiff and its counsel, Tydings & Rosenberg LLP, as Lead Class Counsel, ordered the co-plaintiffs to file any petitions for award of attorneys’ fees and expenses or other form of monetary award no later than August 12, 2022, and directed Impac to provide shareholder information to the parties’ class notice administrator by August 12, 2022. In addition, the Circuit Court made a preliminary determination that the Outstanding 2009 Dividends should be paid to current Preferred B stockholders, as of a record date to be established. The Circuit Court stated that it anticipates entering final injunctive relief, prior to a final class hearing date, directing the Company to declare a record date for payment to then current Preferred B stockholders of the dividends previously determined to be due for three quarters in 2009 and to deposit such funds in escrow until after the proper recipients of the funds are determined following the final hearing. The Circuit Court specified the method by which the Company and the notice administrator are to give notice to the Class of the final hearing date and the opportunity to file objections to the proposed final injunctive relief and to the petitions for attorney’s fees and awards. Any awards of attorney’s fees and other monetary awards would be withheld from payment of the Outstanding 2009 Dividends and potentially withheld or deducted from future distributions to the Preferred B holders, including in connection with the Company’s recently filed Form S-4 for an Exchange Offer and Consent Solicitation, and distributed in accordance with the final rulings of the court. The Circuit Court held a further conference on July 27, 2022, during which the parties discussed proposed revisions to the Class definition to include all Preferred B stockholders through the date of finality of final orders to be issued in the case, the method for the establishing a record date for the Company’s satisfaction of its obligations to distribute the adjudicated amount of the Outstanding 2009 Dividends, the final hearing date and other matters. The Circuit Court took the matters under further submission. On August 8, 2022, the Circuit Court issued an Amended Class Certification Order, which amends the definition of the class to include all Preferred B stockholders through the date of finality of final orders to be issued in the case, directs the Company to establish a record date of August 15, 2022 for distribution of the Outstanding 2009 Dividends in the amount of $1.2 million, and to pay that amount into the registry of the Circuit Court no later than August 19, 2022, to be held pending final resolution of all issues and final determination by the Court of the appropriate distribution of those funds. The Amended Class Certification Order states that the Company shall have no further right or obligation with respect to the funds deposited in the registry, except as necessary to effectual the final determination of the Court. The Company can take no action with respect to the Outstanding 2009 Dividends until the Circuit Court makes further orders. McNair v Impac Mortgage Corp. On September 18, 2018, a purported class action was filed in the Superior Court of California, Orange County, entitled McNair v. Impac Mortgage Corp. dba CashCall Mortgage. The plaintiff contends the defendant did not pay the plaintiff and purported class members overtime compensation, provide required meal and rest breaks, or provide accurate wage statements. The action seeks damages, restitution, penalties, interest, attorney’s fees, and all other appropriate injunctive, declaratory, and equitable relief. On March 8, 2019, a First Amended Complaint was filed, which added a claim alleging PAGA violations. On March 12, 2019, the parties filed a stipulation with the court stating (1) the plaintiff’s individual claims should be arbitrated pursuant to the parties’ arbitration agreement, (2) the class claims should be struck from the First Amended Complaint, and (3) the plaintiff will proceed solely with regard to her PAGA claims. This case was consolidated with the Batres v. Impac Mortgage Corp. dba CashCall Mortgage case discussed below with a rescheduled trial date of January 18, 2022. On October 28, 2021, the Company entered into a settlement agreement, which was amended and restated on February 17, 2022. On March 14, 2022, the court issued an order granting preliminary approval of the settlement. No assurances can be given that such settlement will receive final approval by the court. Batres v. Impac Mortgage Corp. On December 27, 2018, a purported class action was filed in the Superior Court of California, Orange County, entitled Batres v. Impac Mortgage Corp. dba CashCall Mortgage. The plaintiff contends the defendant did not pay the plaintiff and purported class members overtime compensation, provide required meal and rest breaks, or provide accurate wage statements. The action seeks damages, restitution, penalties, interest, attorney’s fees, and all other appropriate injunctive, declaratory, and equitable relief. On March 14, 2019, the plaintiff filed an amended complaint alleging only PAGA violations and seeking penalties, attorneys’ fees, and such other appropriate relief. This case was consolidated with the McNair v. Impac Mortgage Corp. dba CashCall Mortgage discussed above with a rescheduled trial date of January 18, 2022. On October 28, 2021, the Company entered into a settlement agreement, which was amended and restated on February 17, 2022. On March 14, 2022, the court issued an order granting preliminary approval of the settlement. No assurances can be given that such settlement will receive final approval by the court. UBS Americas Inc., et al. v. Impac Funding Corporation et al. On December 17, 2021, a summons with notice was filed in the Supreme Court of the State of New York, County of New York (NY Court), initiating a lawsuit entitled UBS Americas Inc., et al. v. Impac Funding Corporation et al. The plaintiffs contend that the defendants are required to indemnify payments that plaintiffs made to resolve claims asserted by the Federal Home Loan Bank of San Francisco and HSH Nordbank AG related to certain residential mortgage-backed securities (RMBS). Plaintiffs contend that the RMBS included loans that the defendants allegedly sold to certain UBS entities in breach of contractual representations and warranties. Plaintiffs further contend that they settled the cases for which plaintiffs are demanding indemnification in December 2015 and March 2016. On April 18, 2022, the Company accepted service of the summons with notice on behalf of Impac Funding Corp. and Impac Mortgage Holdings, Inc. On June 2, 2022, a complaint was filed with the NY Court related to the summons with notice, however Impac Mortgage Holdings, Inc. was no longer listed as a defendant in the matter. On July 25, 2022, Impac Funding Corporation filed a motion to dismiss the complaint. The Company believes the claims are without merit and intends to defend itself vigorously. CrossCountry Mortgage, LLC v Impac Mortgage Holdings, Inc. and Impac Mortgage Corp. On August 4, 2022, a complaint was filed in the United States District Court for the Northern District of Ohio – Eastern Division by CrossCountry Mortgage, LLC (Plaintiff) against the Company and its wholly-owned subsidiary Impac Mortgage Corp. dba CashCall Mortgage (IMC). The Plaintiff alleges infringement of Plaintiff’s federally-registered trademark, unfair competition and false designation of origin and for substantial and related claims of deceptive trade practice under the statutory and common laws of the State of Ohio. Plaintiff is seeking injunctive and monetary relief. The Company and IMC were served with the complaint on August 8, 2022. The Company and IMC believe the claims are without merit and we intend to defend ourselves vigorously. The Company is a party to other litigation and claims which are in the course of the Company’s operations. While the results of such other litigation and claims cannot be predicted with certainty, the Company believes the final outcome of such matters will not have a material adverse effect on the Company’s financial condition or results of operations. The Company believes that it has meritorious defenses to the claims and intends to defend these claims vigorously and as such the Company believes the final outcome of such matters will not have a material adverse effect on its financial condition or results of operations. Nevertheless, litigation is uncertain and the Company may not prevail in the lawsuits and can express no opinion as to their ultimate resolution. An adverse judgment in any of these matters could have a material adverse effect on the Company’s financial position and results of operations. Please refer to IMH’s report on Form 10-K for the year ended December 31, 2021 for additional information regarding litigation and claims. Repurchase Reserve When the Company sells mortgage loans, it makes customary representations and warranties to the purchasers about various characteristics of each loan such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. The Company’s whole loan sale agreements generally require it to repurchase loans if the Company breached a representation or warranty given to the loan purchaser as well as refunds of premiums to investors for early payoffs on loans sold. The following table summarizes the repurchase reserve activity, within other liabilities on the consolidated balance sheets, related to previously sold loans as of and for the six months ended June 30, 2022 and year ended December 31, 2021: June 30, December 31, 2022 2021 Beginning balance $ 4,744 $ 7,054 Provision for repurchases (1) 2,433 111 Settlements (1,178) (2,421) Total repurchase reserve $ 5,999 $ 4,744 (1) The provision for repurchases is included in gain on sale of loans, net in the accompanying consolidated statements of operations and comprehensive loss. Corporate-owned Life Insurance Trusts During the first quarter of 2020, there was a triggering event that caused the Company to reevaluate the consolidation of certain corporate-owned life insurance trusts. As a result, the Company has consolidated life insurance trusts for three former executive officers. The corporate-owned life insurance contracts are recorded at cash surrender value, which is provided by a third party and held within trusts. At June 30, 2022, the cash surrender value of the policies was $11.7 million and were recorded within other assets on the consolidated balance sheets. At June 30, 2022, the liability associated with the corporate-owned life insurance trusts was $13.3 million and is recorded in other liabilities on the consolidated balance sheets. At June 30, 2022 Corporate-owned life insurance trusts: Trust #1 Trust #2 Trust #3 Total Corporate-owned life insurance cash surrender value $ 5,345 $ 4,148 $ 2,188 $ 11,681 Corporate-owned life insurance liability 6,123 4,800 2,338 13,261 Corporate-owned life insurance shortfall (1) $ (778) $ (652) $ (150) $ (1,580) (1) The initial $1.3 million of shortfall was recorded as a change in retained deficit at the time of the consolidation of the trusts in 2020. The additional shortfall was recognized in the accompanying consolidated statements of operations and comprehensive loss. Commitments to Extend Credit The Company enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. These loan commitments are treated as derivatives and are carried at fair value. See Note 7. — Fair Value of Financial Instruments for more information. |
Equity and Share Based Payments
Equity and Share Based Payments | 6 Months Ended |
Jun. 30, 2022 | |
Equity and Share Based Payments | |
Equity and Share Based Payments | Note 12.—Equity and Share Based Payments Redeemable Preferred Stock share of New Preferred Stock; (b) 1.25 shares of Common Stock and (c) 1.5 warrants to purchase 1.5 shares of Common Stock at a purchase price of $5.00 per share of Common Stock. 60 sixty 66 2/3% 66 2/3% basic and diluted earnings per share in accordance with FASB ASC 260-10-45-11, despite not being accrued for on the consolidated balance sheets. Share Based Payments The following table summarizes activity, pricing and other information for the Company’s stock options for the six months ended June 30, 2022: Weighted- Average Number of Exercise Shares Price Options outstanding at the beginning of the year 570,228 $ 7.89 Options granted — — Options exercised — — Options forfeited/cancelled (10,000) 3.39 Options outstanding at the end of the period 560,228 7.97 Options exercisable at the end of the period 518,874 $ 8.34 As of June 30, 2022, there was approximately $54 thousand of total unrecognized compensation cost related to stock option compensation arrangements granted under the plan, net of estimated forfeitures. That cost is expected to be recognized over the remaining weighted average period of 1.6 years. The following table summarizes activity, pricing and other information for the Company’s RSU’s for the six months ended June 30, 2022: Weighted- Average Number of Grant Date Shares Fair Value RSUs outstanding at beginning of the year 397,829 $ 4.11 RSUs granted — — RSUs issued (153,251) 4.32 RSUs forfeited/cancelled (18,333) 3.85 RSUs outstanding at end of the period 226,245 $ 3.99 As of June 30, 2022, there was approximately $604 thousand of total unrecognized compensation cost related to the RSU compensation arrangements granted under the plan. That cost is expected to be recognized over the remaining weighted average period of 1.3 years. The following table summarizes activity, pricing and other information for the Company’s DSU’s for the six months ended June 30, 2022: Weighted- Average Number of Grant Date Shares Fair Value DSUs outstanding at the beginning of the year 54,500 $ 6.61 DSUs granted — — DSUs issued (15,000) 3.75 DSUs forfeited/cancelled — — DSUs outstanding at the end of the period 39,500 $ 7.70 As of June 30, 2022, there was no unrecognized compensation cost related to the DSU compensation arrangements granted under the plan. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events | |
Subsequent Events | Note 13.—Subsequent Events Subsequent events have been evaluated through the date of this filing. |
Summary of Business and Finan_2
Summary of Business and Financial Statement Presentation (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Business and Financial Statement Presentation | |
Financial Statement Presentation | Financial Statement Presentation The accompanying unaudited consolidated financial statements of IMH and its subsidiaries (as defined above) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included. Operating results for the six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. These interim period condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the United States Securities and Exchange Commission. All significant intercompany balances and transactions have been eliminated in consolidation. In addition, certain amounts in the prior periods’ consolidated financial statements have been reclassified to conform to the current period presentation. Management has made a number of material estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. Additionally, other items affected by such estimates and assumptions include the valuation of trust assets and trust liabilities prior to the sale in March 2022, contingencies, the estimated obligation of repurchase reserves related to sold loans, the valuation of long-term debt, mortgage servicing rights (MSR), mortgage loans held-for-sale (LHFS) and derivative instruments, including interest rate lock commitments (IRLC). Actual results could differ from those estimates and assumptions. |
Recent Accounting Pronouncements Not Yet Effective | Recent Accounting Pronouncements Not Yet Effective There have been no developments to recently issued accounting standards, including the expected dates of adoption and estimated effects on the Company’s consolidated financial statements and footnote disclosures, from those disclosed in the 2021 Annual Report on Form 10-K, except for the following: In March 2020 and January 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04 and ASU 2021-01, “ Reference Rate Reform (Topic 848)” is currently evaluating the impact the adoption of this ASU would have on the Company’s consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, “ Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force) |
Mortgage Loans Held-for-Sale (T
Mortgage Loans Held-for-Sale (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Mortgage Loans Held-for-Sale | |
Summary of the unpaid principal balance (UPB ) of mortgage loans held-for-sale by type | June 30, December 31, 2022 2021 Government (1) $ 613 $ 6,886 Conventional (2) 7,375 62,759 Jumbo & Non-qualified mortgages (NonQM) 28,839 231,142 Fair value adjustment (3) 208 7,690 Total mortgage loans held-for-sale $ 37,035 $ 308,477 (1) Includes all government-insured loans including Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA). (2) Includes loans eligible for sale to Federal National Mortgage Association (Fannie Mae or FNMA) and Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC). (3) Changes in fair value are included in gain on sale of loans, net in the accompanying consolidated statements of operations and comprehensive loss. |
Schedule of gain on sale of loans, net | For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Gain on sale of mortgage loans $ 2,562 $ 17,852 $ 16,587 $ 39,115 Premium from servicing retained loan sales — 92 46 213 Unrealized loss from derivative financial instruments (1,244) (2,880) (2,558) (3,095) Gain (loss) from derivative financial instruments 1,862 (315) 6,005 2,914 Mark to market (loss) gain on LHFS (217) 271 (7,482) (597) Direct origination expenses, net (925) (3,737) (4,031) (7,938) Change in provision for repurchases (1,859) (590) (2,433) 212 Gain on sale of loans, net $ 179 $ 10,693 $ 6,134 $ 30,824 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Mortgage Servicing Rights | |
Schedule of changes in the fair value of MSRs | June 30, December 31, 2022 2021 Balance at beginning of year $ 749 $ 339 Additions from servicing retained loan sales 46 536 Changes in fair value 55 (126) Fair value of MSRs at end of period $ 850 $ 749 (1) Changes in fair value are included within gain on mortgage servicing rights, net in the accompanying consolidated statements of operations and comprehensive loss. |
Schedule of the outstanding loans serviced by entity | June 30, December 31, 2022 2021 Government insured $ 71,381 $ 71,841 Conventional — — Total loans serviced $ 71,381 $ 71,841 |
Schedule of hypothetical changes in the fair values of MSRs | June 30, December 31, Mortgage Servicing Rights Sensitivity Analysis 2022 2021 Fair value of MSRs $ 850 $ 749 Prepayment Speed: Decrease in fair value from 10% adverse change (18) (24) Decrease in fair value from 20% adverse change (37) (48) Decrease in fair value from 30% adverse change (56) (70) Discount Rate: Decrease in fair value from 10% adverse change (38) (31) Decrease in fair value from 20% adverse change (72) (59) Decrease in fair value from 30% adverse change (104) (85) |
Schedule of gain on mortgage servicing rights | For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Change in fair value of mortgage servicing rights $ (6) $ (37) $ 55 $ 1 Gain on sale of mortgage servicing rights 51 — 100 — Gain (loss) on mortgage servicing rights, net $ 45 $ (37) $ 155 $ 1 |
Schedule of components of servicing (expense) fees, net | For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Contractual servicing fees $ 64 $ 41 $ 134 $ 73 Subservicing and other costs (57) (191) (139) (342) Servicing fees (expense), net $ 7 $ (150) $ (5) $ (269) |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases | |
Schedule of balance sheets, weighted average remaining lease term and weighted average discount rates | June 30, Lease Assets and Liabilities Classification 2022 Assets Lease ROU assets Other assets $ 8,366 Liabilities Lease liabilities Other liabilities $ 10,481 Weighted average remaining lease term (in years) 2.2 Weighted average discount rate 4.8 % |
Schedule of maturities of operating and finance leases | The following table presents the maturity of the Company’s operating and financing lease liabilities as of June 30, 2022: Year remaining 2022 $ 2,415 Year 2023 4,909 Year 2024 3,729 Total lease commitments $ 11,053 Less: imputed interest (572) Total lease liability $ 10,481 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Long-term Debt | |
Schedule of information on warehouse borrowings | Maximum Balance Outstanding at Borrowing June 30, December 31, Capacity 2022 2021 Maturity Date Short-term borrowings: Repurchase agreement 1 (1) $ — $ — $ 30,009 May 24, 2022 Repurchase agreement 2 (2) 200,000 19,838 153,006 September 13, 2022 Repurchase agreement 3 300,000 6,136 56,794 September 23, 2022 Repurchase agreement 4 50,000 11,821 45,730 March 31, 2023 Total warehouse borrowings $ 550,000 $ 37,795 $ 285,539 |
Junior subordinated notes | |
Long-term Debt | |
Schedule of remaining principal balance and fair value | June 30, December 31, 2022 2021 Junior Subordinated Notes (1) $ 62,000 $ 62,000 Fair value adjustment (26,111) (15,464) Total Junior Subordinated Notes $ 35,889 $ 46,536 (1) Stated maturity of March 2034; requires quarterly interest payments at a variable rate of 3-month LIBOR plus 3.75% per annum. |
Securitized Mortgage Trusts (Ta
Securitized Mortgage Trusts (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Securitized Mortgage Trusts | |
Schedule of securitized mortgage trust assets | June 30, December 31, 2022 2021 Securitized mortgage collateral, at fair value $ — $ 1,639,251 REO, at net realizable value (NRV) — 3,479 Total securitized mortgage trust assets $ — $ 1,642,730 |
Schedule of securitized mortgage trust liabilities | June 30, December 31, 2022 2021 Securitized mortgage borrowings $ — $ 1,614,862 |
Schedule of changes in fair value of net trust assets, including trust REO gains | For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Change in fair value of net trust assets, excluding REO $ — $ (1,828) $ 9,248 $ (5,373) (Losses) gains from trust REO — (313) — 1,559 Change in fair value of net trust assets, including trust REO gains (losses) $ — $ (2,141) $ 9,248 $ (3,814) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value of Financial Instruments | |
Schedule of estimated fair value of financial instruments included in consolidated financial statements | June 30, 2022 December 31, 2021 Carrying Estimated Fair Value Carrying Estimated Fair Value Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 61,173 $ 61,173 $ — $ — $ 29,555 $ 29,555 $ — $ — Restricted cash 5,196 5,196 — — 5,657 5,657 — — Mortgage loans held-for-sale 37,035 — 37,035 — 308,477 — 308,477 — Mortgage servicing rights 850 — — 850 749 — — 749 Derivative assets, lending, net (1) 510 — 12 498 3,111 — — 3,111 Securitized mortgage collateral — — — — 1,639,251 — — 1,639,251 Liabilities Warehouse borrowings $ 37,795 $ — $ 37,795 $ — $ 285,539 $ — $ 285,539 $ — Convertible notes 15,000 — — 15,000 20,000 — — 20,000 Long-term debt 35,889 — — 35,889 46,536 — — 46,536 Securitized mortgage borrowings — — — — 1,614,862 — — 1,614,862 Derivative liabilities, lending, net (2) 12 — 12 — 55 — 55 — (1) Represents IRLCs and Hedging Instruments and are included in other assets in the accompanying consolidated balance sheets. (2) Represents Hedging Instruments and are included in other liabilities in the accompanying consolidated balance sheets. |
Schedule of assets and liabilities that are measured at estimated fair value on recurring basis | Recurring Fair Value Measurements June 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Mortgage loans held-for-sale $ — $ 37,035 $ — $ — $ 308,477 $ — Derivative assets, lending, net (1) — 12 498 — — 3,111 Mortgage servicing rights — — 850 — — 749 Securitized mortgage collateral — — — — — 1,639,251 Total assets at fair value $ — $ 37,047 $ 1,348 $ — $ 308,477 $ 1,643,111 Liabilities Securitized mortgage borrowings $ — $ — $ — $ — $ — $ 1,614,862 Long-term debt — — 35,889 — — 46,536 Derivative liabilities, lending, net (2) — 12 — — 55 — Total liabilities at fair value $ — $ 12 $ 35,889 $ — $ 55 $ 1,661,398 (1) At June 30, 2022, derivative assets, lending, net included $498 thousand in IRLCs and $12 thousand in Hedging Instruments included in other assets in the accompanying consolidated balance sheets. At December 31, 2021, derivative assets, lending, net included $3.1 million in IRLCs and is included in other assets in the accompanying consolidated balance sheets. (2) At December 31, 2021, derivative liabilities, lending, net are included in other liabilities in the accompanying consolidated balance sheets. |
Schedule of reconciliation for all assets and liabilities measured at estimated fair value on recurring basis using significant unobservable inputs (Level 3) | Level 3 Recurring Fair Value Measurements For the Three Months Ended June 30, 2022 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, March 31, 2022 $ — $ — $ 856 $ 846 $ (47,549) Total gains (losses) included in earnings: Interest income — — — — — Interest expense — — — — (357) Change in fair value — — (6) (348) 1,980 Change in instrument specific credit risk — — — — 10,037 (1) Total gains (losses) included in earnings — — (6) (348) 11,660 Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — — — — Settlements — — — — — Fair value, June 30, 2022 $ — $ — $ 850 $ 498 $ (35,889) (1) Amount represents the change in instrument specific credit risk in other comprehensive gain (loss) in the consolidated statements of operations and comprehensive loss. Level 3 Recurring Fair Value Measurements For the Three Months Ended June 30, 2021 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, March 31, 2021 $ 2,038,545 $ (2,028,210) $ 498 $ 5,078 $ (45,361) Total gains (losses) included in earnings: Interest income (1) (4,722) — — — — Interest expense (1) — (8,909) — — (418) Change in fair value (2,550) 722 (37) (816) 1,417 Change in instrument specific credit risk — — — — (538) (2) Total gains (losses) included in earnings (7,272) (8,187) (37) (816) 461 Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — 92 — — Settlements (172,850) 189,173 — — — Fair value, June 30, 2021 $ 1,858,423 $ (1,847,224) $ 553 $ 4,262 $ (44,900) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $2.1 million for the three months ended June 30, 2021. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations and comprehensive loss is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Amount represents the change in instrument specific credit risk in other comprehensive gain (loss) in the consolidated statements of operations and comprehensive loss. Level 3 Recurring Fair Value Measurements For the Six Months Ended June 30, 2022 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, December 31, 2021 $ 1,639,251 $ (1,614,862) $ 749 $ 3,111 $ (46,536) Total gains (losses) included in earnings: Interest income (1) 2,019 — — — — Interest expense (1) — (7,564) — — (743) Change in fair value 9,248 — 55 (2,613) 3,622 Change in instrument specific credit risk — — — — 7,768 (2) Total gains (losses) included in earnings 11,267 (7,564) 55 (2,613) 10,647 Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — 46 — — Settlements (1,650,518) 1,622,426 — — — Fair value, June 30, 2022 $ — $ — $ 850 $ 498 $ (35,889) Unrealized gains (losses) still held (3) $ — $ — $ 850 $ 498 $ 26,111 (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities prior to the sale in March 2022. Net interest income, including cash received and paid, was $1.2 million for the six months ended June 30, 2022. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations and comprehensive loss is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Amount represents the change in instrument specific credit risk in other comprehensive gain (loss) in the consolidated statements of operations and comprehensive loss. (3) Represents the amount of unrealized gains relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2022. Level 3 Recurring Fair Value Measurements For the Six Months Ended June 30, 2021 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, December 31, 2020 $ 2,100,175 $ (2,086,557) $ 339 $ 7,275 $ (44,413) Total (losses) gains included in earnings: Interest income (1) (9,479) — — — — Interest expense (1) — (18,018) — — (724) Change in fair value 79,857 (85,230) 1 (3,013) 2,442 Change in instrument specific credit risk — — — — (2,205) (2) Total gains (losses) included in earnings 70,378 (103,248) 1 (3,013) (487) Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — 213 — — Settlements (312,130) 342,581 — — — Fair value, June 30, 2021 $ 1,858,423 $ (1,847,224) $ 553 $ 4,262 $ (44,900) Unrealized (losses) gains still held (3) $ (186,507) $ 2,397,426 $ 553 $ 4,262 $ 17,100 (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. Net interest income, including cash received and paid, was $4.3 million for the three and six months ended June 30, 2021. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations and comprehensive gain (loss) is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Amount represents the change in instrument specific credit risk in other comprehensive loss in the consolidated statements of operations and comprehensive loss. (3) Represents the amount of unrealized (losses) gains relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at June 30, 2021 |
Schedule of quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and non-recurring basis | The following table presents quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and nonrecurring basis at June 30, 2022 and December 31, 2021: June 30, 2022 December 31, 2021 Unobservable Range of Weighted Range of Weighted Financial Instrument Input Inputs Average Inputs Average Assets and liabilities backed by real estate Securitized mortgage collateral, and Prepayment rates - % - % 2.9 - 46.3 % 10.7 % Securitized mortgage borrowings Default rates - % - % 0.06 - 4.3 % 1.7 % Loss severities - % - % 0.01 - 97.6 % 70.1 % Discount rates - % - % 2.1 - 13.0 % 3.6 % Other assets and liabilities Mortgage servicing rights Discount rates 12.5 - 15.0 % 12.8 % 12.5 - 15.0 % 12.8 % Prepayment rates 7.5 - 12.5 % 8.5 % 8.01 - 29.1 % 10.3 % Derivative assets - IRLCs, net Pull-through rates 40.0 - 99.0 % 69.5 % 50.0 - 98.0 % 79.0 % Long-term debt Discount rates 14.2 % 14.2 % 8.6 % 8.6 % |
Schedule of changes in recurring fair value measurements included in net loss | Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Three Months Ended June 30, 2022 Change in Fair Value of Interest Interest Net Trust Long-term Other Revenue Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ — $ — $ — $ — $ — $ — $ — Securitized mortgage borrowings — — — — — — — Long-term debt — (357) — 1,980 — — 1,623 Mortgage servicing rights (2) — — — — (6) — (6) Mortgage loans held-for-sale — — — — — (217) (217) Derivative assets — IRLCs — — — — — (348) (348) Derivative liabilities — Hedging Instruments — — — — — (896) (896) Total $ — $ (357) $ — $ 1,980 $ (6) $ (1,461) $ 156 (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain (loss) on MSRs, net in the consolidated statements of operations and comprehensive loss. Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Three Months Ended June 30, 2021 Change in Fair Value of Interest Interest Net Trust Long-term Other Revenue Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ (4,722) $ — $ (2,550) $ — $ — $ — $ (7,272) Securitized mortgage borrowings — (8,909) 722 — — — (8,187) Long-term debt — (418) — 1,417 — — 999 Mortgage servicing rights (2) — — — — (37) — (37) Mortgage loans held-for-sale — — — — — 271 271 Derivative assets — IRLCs — — — — — (816) (816) Derivative liabilities — Hedging Instruments — — — — — (2,064) (2,064) Total $ (4,722) $ (9,327) $ (1,828) (3) $ 1,417 $ (37) $ (2,609) $ (17,106) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain (loss) on MSRs, net in the consolidated statements of operations and comprehensive loss. (3) For the three months ended June 30, 2021, change in the fair value of net trust assets, excluding REO was $1.8 million. Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Six Months Ended June 30, 2022 Change in Fair Value of Interest Interest Net Trust Long-term Other Income Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ 2,019 $ — $ 9,248 $ — $ — $ — $ 11,267 Securitized mortgage borrowings — (7,564) — — — — (7,564) Long-term debt — (743) — 3,622 — — 2,879 Mortgage servicing rights (2) — — — — 55 — 55 Mortgage loans held-for-sale — — — — — (7,482) (7,482) Derivative assets — IRLCs — — — — — (2,613) (2,613) Derivative liabilities — Hedging Instruments — — — — — 55 55 Total $ 2,019 $ (8,307) $ 9,248 (3) $ 3,622 $ 55 $ (10,040) $ (3,403) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain (loss) on MSRs, net in the consolidated statements of operations and comprehensive loss. (3) For the six months ended June 30, 2022, change in the fair value of net trust assets, excluding REO was $9.2 million. Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Six Months Ended June 30, 2021 Change in Fair Value of Interest Interest Net Trust Long-term Other Income Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ (9,479) $ — 79,857 $ — $ — $ — $ 70,378 Securitized mortgage borrowings — (18,018) (85,230) — — — (103,248) Long-term debt — (724) — 2,442 — — 1,718 Mortgage servicing rights (2) — — — — 1 — 1 Mortgage loans held-for-sale — — — — — (597) (597) Derivative assets — IRLCs — — — — — (3,013) (3,013) Derivative liabilities — Hedging Instruments — — — — — (82) (82) Total $ (9,479) $ (18,742) $ (5,373) (3) $ 2,442 $ 1 $ (3,692) $ (34,843) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain (loss) on MSRs, net in the consolidated statements of operations and comprehensive loss. (3) For the six months ended June 30, 2021, change in the fair value of net trust assets, excluding REO was $5.4 million. |
Schedule of derivative assets and liabilities | Total Gains (Losses) Total Gains (Losses) Notional Amount For the Three Months Ended For the Six Months Ended June 30, December 31, June 30, June 30, 2022 2021 2022 2021 2022 2021 Derivative – IRLC's $ 55,175 $ 255,150 $ (348) $ (816) $ (2,613) $ (3,013) Derivative – TBA MBS 12,500 102,000 1,072 (2,379) 4,760 2,832 Derivative – Swap Futures 3,300 — (106) — 1,300 — (1) Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations and comprehensive loss. |
Schedule of financial and non-financial assets and liabilities measured using nonrecurring fair value measurements | Nonrecurring Fair Value Measurements Total Losses (1) June 30, 2022 For the Three Months Ended For the Six Months Ended Level 1 Level 2 Level 3 June 30, 2022 June 30, 2022 ROU asset impairment — — 8,366 (123) (123) (1) Total losses reflect losses from all nonrecurring measurements during the period. Nonrecurring Fair Value Measurements Total (Losses) Gains (1) June 30, 2021 For the Three Months Ended For the Six Months Ended Level 1 Level 2 Level 3 June 30, 2021 June 30, 2021 REO (2) $ — $ 4,251 $ — $ (313) $ 1,559 (1) Total gains (losses) reflect gains (losses) from all nonrecurring measurements during the period. (2) For the three and six months ended June 30, 2021, the Company recorded $( 313) thousand and $1.6 million, respectively, in (losses) gains related to changes in NRV of properties. Losses represent impairment of the NRV attributable to an increase in state specific loss severities on properties held during the period which resulted in a decrease to NRV. Gains represent recovery of the NRV attributable to an improvement in state specific loss severities on properties held during the period which resulted in an increase to NRV. |
Reconciliation of Loss Per Co_2
Reconciliation of Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Reconciliation of Loss Per Common Share | |
Schedule of computation of basic and diluted earnings per common share | For the Three Months Ended For the Six Months Ended June 30, June 30, 2022 2021 2022 2021 Numerator for basic loss per share: Net loss $ (13,467) $ (8,864) $ (14,651) $ (9,547) Less: cumulative non-declared dividends on preferred stock (1) (390) — (780) — Net loss attributable to common stockholders $ (13,857) $ (8,864) $ (15,431) $ (9,547) Numerator for diluted loss per share: Net loss $ (13,857) $ (8,864) $ (15,431) $ (9,547) Interest expense attributable to convertible notes (2) — — — — Net loss plus interest expense attributable to convertible notes $ (13,857) $ (8,864) $ (15,431) $ (9,547) Denominator for basic loss per share (3): Basic weighted average common shares outstanding during the period 21,509 21,344 21,463 21,319 Denominator for diluted loss per share (3): Basic weighted average common shares outstanding during the period 21,509 21,344 21,463 21,319 Net effect of dilutive convertible notes and warrants (2) — — — — Net effect of dilutive stock options, DSU’s, RSA's and RSU's (2) — — — — Diluted weighted average common shares 21,509 21,344 21,463 21,319 Net loss per common share: Basic $ (0.64) $ (0.42) $ (0.72) $ (0.45) Diluted $ (0.64) $ (0.42) $ (0.72) $ (0.45) (1) Cumulative non-declared dividends in arrears are included beginning July 15, 2021, which was the date the Maryland Court of Appeals affirmed the decision in granting summary judgment in favor of the plaintiffs on the Preferred B voting rights (see Note 12. – Equity and Share Based Payments). (2) Adjustments to diluted loss per share for the three and six months ended June 30, 2022 and 2021, were excluded from the calculation, as they were anti-dilutive. (3) Number of shares presented in thousands. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting | |
Reconciliation of assets from segment to consolidated | Mortgage Real Estate Long-term Corporate Balance Sheet Items as of: Lending Services Portfolio and other Consolidated Total Assets at June 30, 2022 (1) $ 108,870 $ 502 $ 63 $ 24,223 $ 133,658 Total Assets at December 31, 2021 (1) $ 351,173 $ 502 $ 1,642,871 $ 28,225 $ 2,022,771 (1) All segment asset balances exclude intercompany balances. |
Reconciliation of earnings from segment to consolidated | Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Three Months Ended June 30, 2022: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 179 $ — $ — $ — $ 179 Servicing income, net 7 — — — 7 Gain on mortgage servicing rights, net 45 — — — 45 Real estate services fees, net — 257 — — 257 Other revenue (expense) 1 — 28 (22) 7 Other operating expense (9,378) (359) (129) (4,800) (14,666) Other income (expense) 261 — 877 (418) 720 Net (loss) earnings before income tax expense $ (8,885) $ (102) $ 776 $ (5,240) (13,451) Income tax expense 16 Net loss $ (13,467) Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Three Months Ended June 30, 2021: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 10,693 $ — $ — $ — $ 10,693 Servicing expenses, net (150) — — — (150) Loss on mortgage servicing rights, net (37) — — — (37) Real estate services fees, net — 478 — — 478 Other revenue (expense) — — 42 (46) (4) Other operating expense (15,288) (356) (135) (3,837) (19,616) Other (expense) income (16) — 314 (464) (166) Net (loss) earnings before income tax expense $ (4,798) $ 122 $ 221 $ (4,347) $ (8,802) Income tax expense 62 Net loss $ (8,864) Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Six Months Ended June 30, 2022: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 6,134 $ — $ — $ — $ 6,134 Servicing expense, net (5) — — — (5) Gain on mortgage servicing rights, net 155 — — — 155 Real estate services fees, net — 442 — — 442 Other revenue 4 — 43 912 959 Other operating expense (23,880) (718) (141) (9,284) (34,023) Other income (expense) 649 — 11,959 (882) 11,726 Net (loss) earnings before income tax expense $ (16,943) $ (276) $ 11,861 $ (9,254) (14,612) Income tax expense 39 Net loss $ (14,651) Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Six Months Ended June 30, 2021: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 30,824 $ — $ — $ — $ 30,824 Servicing expense, net (269) — — — (269) Gain on mortgage servicing rights, net 1 — — — 1 Real estate services fees, net — 688 — — 688 Other revenue 23 — 69 228 320 Other operating expense (31,516) (725) (256) (8,417) (40,914) Other (expense) income (199) — 969 (924) (154) Net (loss) earnings before income tax expense $ (1,136) $ (37) $ 782 $ (9,113) $ (9,504) Income tax expense 43 Net loss $ (9,547) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Schedule of the activity related to the repurchase reserve for previously sold loans | June 30, December 31, 2022 2021 Beginning balance $ 4,744 $ 7,054 Provision for repurchases (1) 2,433 111 Settlements (1,178) (2,421) Total repurchase reserve $ 5,999 $ 4,744 (1) The provision for repurchases is included in gain on sale of loans, net in the accompanying consolidated statements of operations and comprehensive loss. |
Schedule of corporate-owned life insurance trusts | At June 30, 2022 Corporate-owned life insurance trusts: Trust #1 Trust #2 Trust #3 Total Corporate-owned life insurance cash surrender value $ 5,345 $ 4,148 $ 2,188 $ 11,681 Corporate-owned life insurance liability 6,123 4,800 2,338 13,261 Corporate-owned life insurance shortfall (1) $ (778) $ (652) $ (150) $ (1,580) (1) The initial $1.3 million of shortfall was recorded as a change in retained deficit at the time of the consolidation of the trusts in 2020. The additional shortfall was recognized in the accompanying consolidated statements of operations and comprehensive loss. |
Equity and Share Based Paymen_2
Equity and Share Based Payments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of activity, pricing and other information for the Company's stock options | Weighted- Average Number of Exercise Shares Price Options outstanding at the beginning of the year 570,228 $ 7.89 Options granted — — Options exercised — — Options forfeited/cancelled (10,000) 3.39 Options outstanding at the end of the period 560,228 7.97 Options exercisable at the end of the period 518,874 $ 8.34 |
Restricted stock units (RSU's) | |
Summary of activity, pricing and other information for the Company's | Weighted- Average Number of Grant Date Shares Fair Value RSUs outstanding at beginning of the year 397,829 $ 4.11 RSUs granted — — RSUs issued (153,251) 4.32 RSUs forfeited/cancelled (18,333) 3.85 RSUs outstanding at end of the period 226,245 $ 3.99 |
Deferred stock units | |
Summary of activity, pricing and other information for the Company's | Weighted- Average Number of Grant Date Shares Fair Value DSUs outstanding at the beginning of the year 54,500 $ 6.61 DSUs granted — — DSUs issued (15,000) 3.75 DSUs forfeited/cancelled — — DSUs outstanding at the end of the period 39,500 $ 7.70 |
Mortgage Loans Held-for-Sale (D
Mortgage Loans Held-for-Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Mortgage loans held-for-Sale | |||||
Total mortgage loans held-for-sale | $ 37,035 | $ 37,035 | $ 308,477 | ||
Gain on LHFS | |||||
Change in provision for repurchases | (2,433) | $ 212 | |||
Gain on sale of loans, net | 18,607 | 34,304 | |||
Government | |||||
Mortgage loans held-for-Sale | |||||
Total mortgage loans held-for-sale | 613 | 613 | 6,886 | ||
Conventional | |||||
Mortgage loans held-for-Sale | |||||
Total mortgage loans held-for-sale | 7,375 | 7,375 | 62,759 | ||
Jumbo & Non-qualified mortgages (NonQM) | |||||
Mortgage loans held-for-Sale | |||||
Total mortgage loans held-for-sale | 28,839 | 28,839 | 231,142 | ||
Mortgage loans, held-for-sale | |||||
Mortgage loans held-for-Sale | |||||
Fair value adjustment | 208 | 208 | 7,690 | ||
Gain on LHFS | |||||
Gain on sale of mortgage loans | 2,562 | $ 17,852 | 16,587 | 39,115 | |
Premium from servicing retained loan sales | 92 | 46 | 213 | ||
Unrealized loss from derivative financial instruments | (1,244) | (2,880) | (2,558) | (3,095) | |
Gain (loss) from derivative financial instruments | 1,862 | (315) | 6,005 | 2,914 | |
Mark to market (loss) gain on LHFS | (217) | 271 | (7,482) | (597) | |
Direct origination expenses, net | (925) | (3,737) | (4,031) | (7,938) | |
Change in provision for repurchases | (1,859) | (590) | (2,433) | 212 | |
Gain on sale of loans, net | 179 | $ 10,693 | 6,134 | $ 30,824 | |
Mortgage loans, held-for-sale | 90 days or more past due | |||||
Mortgage loans held-for-Sale | |||||
Carrying value of nonaccrual loans | $ 0 | $ 0 | $ 0 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Changes in the fair value of MSRs | |||||
Balance at beginning of year | $ 749 | ||||
Fair value of MSRs at end of period | $ 850 | 850 | $ 749 | ||
Total loans serviced | 71,381 | 71,381 | 71,841 | ||
Mortgage Servicing Rights Sensitivity Analysis | |||||
Change in fair value of mortgage servicing rights | (6) | $ (37) | 55 | $ 1 | |
Gain on sale of mortgage servicing rights | 51 | 100 | |||
Gain (loss) on mortgage servicing rights, net | 45 | (37) | 155 | 1 | |
Servicing (expense) fees, net: | |||||
Contractual servicing fees | 64 | 41 | 134 | 73 | |
Subservicing and other costs | (57) | (191) | (139) | (342) | |
Servicing (expenses) fees, net | 7 | $ (150) | (5) | (269) | |
Loans eligible for repurchase from GNMA | 608 | 608 | 337 | ||
Government | |||||
Changes in the fair value of MSRs | |||||
Total loans serviced | 71,381 | 71,381 | 71,841 | ||
Mortgage servicing rights | |||||
Changes in the fair value of MSRs | |||||
Balance at beginning of year | 749 | $ 339 | 339 | ||
Additions from servicing retained loan sales | 46 | 536 | |||
Changes in fair value | 55 | (126) | |||
Fair value of MSRs at end of period | 850 | 850 | 749 | ||
Mortgage Servicing Rights Sensitivity Analysis | |||||
Fair value of MSRs | 850 | 850 | 749 | ||
Prepayment Speed, Decrease in fair value from 10% adverse change | (18) | (18) | (24) | ||
Prepayment Speed, Decrease in fair value from 20% adverse change | (37) | (37) | (48) | ||
Prepayment Speed, Decrease in fair value from 30% adverse change | (56) | (56) | (70) | ||
Discount Rate, Decrease in fair value from 10% adverse change | (38) | (38) | (31) | ||
Discount Rate, Decrease in fair value from 20% adverse change | (72) | (72) | (59) | ||
Discount Rate, Decrease in fair value from 30% adverse change | $ (104) | $ (104) | $ (85) |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) ft² | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) ft² lease | Jun. 30, 2021 USD ($) | |
Leases | ||||
Number of operating leases | lease | 3 | |||
Number of finance leases | lease | 1 | |||
Cash paid for operating leases | $ 1,200 | $ 1,100 | $ 2,400 | $ 2,300 |
Total operating lease expense | 1,100 | $ 984 | 2,100 | $ 2,000 |
ROU asset impairment | $ 123 | $ 123 | ||
Sublease square footage | ft² | 29,000 | 29,000 |
Leases - Lease Information (Det
Leases - Lease Information (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Lease Assets and Liabilities | |
Lease liabilities | $ 10,481 |
Weighted average remaining lease term (in years) | 2 years 2 months 12 days |
Weighted average discount rate | 4.80% |
Other assets | |
Lease Assets and Liabilities | |
Lease ROU assets | $ 8,366 |
Other liabilities | |
Lease Assets and Liabilities | |
Lease liabilities | $ 10,481 |
Leases - Maturities (Details)
Leases - Maturities (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Total lease liabilities: | |
Year remaining 2022 | $ 2,415 |
Year 2023 | 4,909 |
Year 2024 | 3,729 |
Total lease commitments | 11,053 |
Less: imputed interest | (572) |
Lease Liability | $ 10,481 |
Debt - Warehouse Borrowings (De
Debt - Warehouse Borrowings (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Warehouse Borrowings | |||
Maximum Borrowing Capacity | $ 550,000 | ||
Balance Outstanding | 37,795 | $ 285,539 | |
Repurchase agreement 1 | |||
Warehouse Borrowings | |||
Balance Outstanding | 30,009 | ||
Repurchase agreement 2 | |||
Warehouse Borrowings | |||
Maximum Borrowing Capacity | $ 50,000 | 200,000 | |
Balance Outstanding | 19,838 | 153,006 | |
Repurchase agreement 3 | |||
Warehouse Borrowings | |||
Maximum Borrowing Capacity | 300,000 | ||
Balance Outstanding | 6,136 | 56,794 | |
Repurchase agreement 4 | |||
Warehouse Borrowings | |||
Maximum Borrowing Capacity | 50,000 | ||
Balance Outstanding | $ 11,821 | $ 45,730 |
Debt - Convertible Notes (Detai
Debt - Convertible Notes (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Apr. 29, 2022 USD ($) installment $ / shares shares | Oct. 28, 2020 USD ($) | Apr. 15, 2020 USD ($) $ / shares shares | Dec. 07, 2011 | May 31, 2015 USD ($) D $ / shares | Jun. 30, 2022 | Dec. 31, 2021 | |
Convertible Notes | |||||||
Amount of debt | $ 25,000 | $ 25,000 | $ 25,000 | ||||
Debt principal after scheduled paydown | $ 15,000 | 20,000 | |||||
Scheduled decrease in the aggregate principal amount | $ 5,000 | $ 5,000 | |||||
Interest rate of debt (as a percent) | 7% | 7% | 7% | 7.50% | |||
Conversion price (in dollars per share) | $ / shares | $ 21.50 | ||||||
Conditional conversion price (in dollars per share) | $ / shares | $ 30.10 | ||||||
Number of trading days for which stock price must exceed specified price | D | 20 | ||||||
Number of consecutive trading days during which stock price must exceed specified price | D | 30 | ||||||
Agreement term | 6 months | ||||||
Warrant cash exercise price | $ / shares | $ 2.97 | ||||||
Relative fair value of warrants recorded as debt discount | $ 242 | ||||||
Effective interest rate | 8.90% | ||||||
Number of installments | installment | 3 | ||||||
Principal payment | $ 5,000 | ||||||
Maximum | |||||||
Convertible Notes | |||||||
Aggregate number of common shares which can be purchased with warrants issued | shares | 212,649 | ||||||
Series B 9.375% redeemable preferred stock | |||||||
Convertible Notes | |||||||
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% | 9.375% | 9.375% | |||
Series C 9.125% redeemable preferred stock | |||||||
Convertible Notes | |||||||
Number of common shares that can be purchased with each warrant | shares | 1.5 | ||||||
Warrant cash exercise price | $ / shares | $ 5 | ||||||
Preferred stock, dividend rate (as a percent) | 9.125% | 9.125% | 9.125% | 9.125% |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - Junior subordinated notes - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Junior Subordinated Notes, Fair Value | ||
Long-term debt | $ 62,000 | $ 62,000 |
Fair value adjustment | (26,111) | (15,464) |
Total | $ 35,889 | $ 46,536 |
London Interbank Offered Rate (LIBOR) | ||
Long-term Debt | ||
Applicable margin (as a percent) | 3.75% |
Securitized Mortgage Trusts - A
Securitized Mortgage Trusts - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 16, 2022 USD ($) | Mar. 31, 2022 USD ($) item | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | |
Securitized Mortgage Trusts | |||||
Number of securitization | item | 37 | ||||
Aggregate sales price for sale of consolidated securitization trusts | $ 37,500 | $ 37,500 | |||
Payment received on sale of consolidated securitization trusts | $ 20,000 | ||||
Increase in fair value of securitization trust assets | 9,200 | $ (1,828) | $ 9,248 | $ (5,373) | |
Transaction costs related to sale of consolidated securitization trusts | 277 | ||||
Securitized mortgage trust assets deconsolidated | 1,600,000 | ||||
Securitized mortgage trust liabilities deconsolidated | $ 1,600,000 |
Securitized Mortgage Trusts - S
Securitized Mortgage Trusts - Securitized Mortgage Trust Assets (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Trust Assets | |
Total securitized mortgage trust assets | $ 1,642,730 |
Securitized mortgage collateral | |
Trust Assets | |
Securitized mortgage collateral, at fair value | 1,639,251 |
REO inside trusts | |
Trust Assets | |
REO, at net realizable value (NRV) | $ 3,479 |
Securitized Mortgage Trusts -_2
Securitized Mortgage Trusts - Securitized Mortgage Trust Liabilities (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Securitized Mortgage Trust Liabilities | |
Securitized mortgage borrowings | $ 1,614,862 |
Securitized Mortgage Trusts - C
Securitized Mortgage Trusts - Change in Fair Value of Net Trust Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Change in fair value of net trust assets, including trust REO gains: | ||||
Change in fair value of net trust assets, excluding REO | $ 9,200 | $ (1,828) | $ 9,248 | $ (5,373) |
(Losses) gains from trust REO | (313) | 1,559 | ||
Change in fair value of net trust assets, including trust REO gains (losses) | $ (2,141) | $ 9,248 | $ (3,814) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Fair value of Financial Instruments Included in the Consolidated Financial Statements (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Mortgage servicing rights | $ 850 | $ 749 |
Carrying Amount | ||
Assets | ||
Cash and cash equivalents | 61,173 | 29,555 |
Restricted cash | 5,196 | 5,657 |
Mortgage loans held for-for-sale | 37,035 | 308,477 |
Mortgage servicing rights | 850 | 749 |
Derivatives assets, lending, net | 510 | 3,111 |
Securitized mortgage collateral | 1,639,251 | |
Liabilities | ||
Warehouse borrowings | 37,795 | 285,539 |
Convertible notes | 15,000 | 20,000 |
Long-term debt | 35,889 | 46,536 |
Securitized mortgage borrowings | 1,614,862 | |
Derivative liabilities, lending, net | 12 | 55 |
Estimated Fair Value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 61,173 | 29,555 |
Restricted cash | 5,196 | 5,657 |
Estimated Fair Value | Level 2 | ||
Assets | ||
Mortgage loans held for-for-sale | 37,035 | 308,477 |
Derivatives assets, lending, net | 12 | |
Liabilities | ||
Warehouse borrowings | 37,795 | 285,539 |
Derivative liabilities, lending, net | 12 | 55 |
Estimated Fair Value | Level 3 | ||
Assets | ||
Mortgage servicing rights | 850 | 749 |
Derivatives assets, lending, net | 498 | 3,111 |
Securitized mortgage collateral | 1,639,251 | |
Liabilities | ||
Convertible notes | 15,000 | 20,000 |
Long-term debt | $ 35,889 | 46,536 |
Securitized mortgage borrowings | $ 1,614,862 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Mortgage servicing rights | $ 850 | $ 749 |
Level 3 | ||
Fair Value Measurements | ||
Percentage of level three assets to total assets measured at fair value | 1% | 83% |
Percentage of level three liabilities to total liabilities measured at fair value | 40% | 84% |
Recurring basis | Level 2 | ||
Assets | ||
Mortgage loans held for-for-sale | $ 37,035 | $ 308,477 |
Derivatives assets, lending, net | 12 | |
Total assets at fair value | 37,047 | 308,477 |
Liabilities | ||
Derivative liabilities, lending, net | 12 | 55 |
Total liabilities at fair value | 12 | 55 |
Recurring basis | Level 3 | ||
Assets | ||
Derivatives assets, lending, net | 498 | 3,111 |
Mortgage servicing rights | 850 | 749 |
Securitized mortgage collateral | 1,639,251 | |
Total assets at fair value | 1,348 | 1,643,111 |
Liabilities | ||
Securitized mortgage borrowings | 1,614,862 | |
Long-term debt | 35,889 | 46,536 |
Total liabilities at fair value | 35,889 | 1,661,398 |
Recurring basis | Interest rate lock commitments (IRLCs) | Level 3 | ||
Assets | ||
Derivatives assets, lending, net | 498 | $ 3,100 |
Recurring basis | Hedging Instruments | Level 2 | ||
Assets | ||
Derivatives assets, lending, net | $ 12 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Reconciliation of All Assets and Liabilities Measured Using Level 3 Input (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Purchases, issuances and settlements: | ||||
Net interest income including cash received and paid | $ 2,100 | $ 1,200 | $ 4,300 | |
Recurring basis | Securitized mortgage borrowings | Level 3 | ||||
Changes in fair value of liabilities during the period | ||||
Fair value in the beginning of the period | (2,028,210) | (1,614,862) | (2,086,557) | |
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (8,187) | $ (7,564) | (103,248) | |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense, amount | |||
Purchases, issuances and settlements: | ||||
Settlements | 189,173 | $ 1,622,426 | 342,581 | |
Fair value at the end of the period | (1,847,224) | (1,847,224) | ||
Unrealized gains (losses) still held | 2,397,426 | |||
Recurring basis | Securitized mortgage borrowings | Interest expense | Level 3 | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (8,909) | (18,018) | ||
Recurring basis | Securitized mortgage borrowings | Change in fair value | Level 3 | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | 722 | (85,230) | ||
Recurring basis | Long-term debt | Level 3 | ||||
Changes in fair value of liabilities during the period | ||||
Fair value in the beginning of the period | $ (47,549) | (45,361) | (46,536) | (44,413) |
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | 11,660 | 461 | 10,647 | (487) |
Purchases, issuances and settlements: | ||||
Fair value at the end of the period | (35,889) | (44,900) | (35,889) | (44,900) |
Unrealized gains (losses) still held | 26,111 | 17,100 | ||
Recurring basis | Long-term debt | Interest expense | Level 3 | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | (357) | (418) | (743) | (724) |
Recurring basis | Long-term debt | Change in fair value | Level 3 | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | 1,980 | 1,417 | 3,622 | 2,442 |
Recurring basis | Long-term debt | Change in instrument specific credit risk | Level 3 | ||||
Total gains (losses) included in earnings: | ||||
Total (losses) gains included in earnings | 10,037 | (538) | 7,768 | (2,205) |
Recurring basis | Securitized mortgage collateral | Level 3 | ||||
Changes in fair value of assets during the period | ||||
Fair value at the beginning of the period | 2,038,545 | 1,639,251 | 2,100,175 | |
Total (losses) gains included in earnings: | ||||
Total (losses) gains included in earnings | (7,272) | 11,267 | 70,378 | |
Purchases, issuances and settlements | ||||
Settlements | (172,850) | (1,650,518) | (312,130) | |
Fair value at the end of the period | 1,858,423 | 1,858,423 | ||
Unrealized gains (losses) still held | (186,507) | |||
Recurring basis | Securitized mortgage collateral | Interest income | Level 3 | ||||
Total (losses) gains included in earnings: | ||||
Total (losses) gains included in earnings | (4,722) | 2,019 | (9,479) | |
Recurring basis | Securitized mortgage collateral | Change in fair value | Level 3 | ||||
Total (losses) gains included in earnings: | ||||
Total (losses) gains included in earnings | (2,550) | 9,248 | 79,857 | |
Recurring basis | Mortgage servicing rights | Level 3 | ||||
Changes in fair value of assets during the period | ||||
Fair value at the beginning of the period | 856 | 498 | 749 | 339 |
Total (losses) gains included in earnings: | ||||
Total (losses) gains included in earnings | $ (6) | $ (37) | $ 55 | $ 1 |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) |
Purchases, issuances and settlements | ||||
Issuances | $ 92 | $ 46 | $ 213 | |
Fair value at the end of the period | $ 850 | 553 | 850 | 553 |
Unrealized gains (losses) still held | 850 | 553 | ||
Recurring basis | Interest rate lock commitments (IRLCs) | Level 3 | ||||
Changes in fair value of assets during the period | ||||
Fair value at the beginning of the period | 846 | 5,078 | 3,111 | 7,275 |
Total (losses) gains included in earnings: | ||||
Total (losses) gains included in earnings | $ (348) | $ (816) | $ (2,613) | $ (3,013) |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) |
Purchases, issuances and settlements | ||||
Fair value at the end of the period | $ 498 | $ 4,262 | $ 498 | $ 4,262 |
Unrealized gains (losses) still held | $ 498 | $ 4,262 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Valuation Techniques And Unobservable Inputs Applied (Details) - Level 3 | Jun. 30, 2022 | Dec. 31, 2021 USD ($) |
Securitized mortgage borrowings | Measurement Input, Default Rate | Minimum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.0006 | |
Securitized mortgage borrowings | Measurement Input, Default Rate | Maximum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.043 | |
Securitized mortgage borrowings | Measurement Input, Default Rate | Weighted Average | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.017 | |
Securitized mortgage borrowings | Measurement Input, Loss Severity | Minimum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.0001 | |
Securitized mortgage borrowings | Measurement Input, Loss Severity | Maximum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.976 | |
Securitized mortgage borrowings | Measurement Input, Loss Severity | Weighted Average | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.701 | |
Securitized mortgage borrowings | Measurement Input, Discount Rate | Minimum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.021 | |
Securitized mortgage borrowings | Measurement Input, Discount Rate | Maximum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.130 | |
Securitized mortgage borrowings | Measurement Input, Discount Rate | Weighted Average | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.036 | |
Long-term debt | Measurement Input, Discount Rate | ||
Unobservable input | ||
Measurement input, long-term debt | 0.142 | 0.086 |
Long-term debt | Measurement Input, Discount Rate | Weighted Average | ||
Unobservable input | ||
Measurement input, long-term debt | 0.142 | 0.086 |
Securitized mortgage collateral | Measurement Input, Prepayment Rate | Minimum | ||
Unobservable input | ||
Measurement input, securitized mortgage collateral | 0.029 | |
Securitized mortgage collateral | Measurement Input, Prepayment Rate | Maximum | ||
Unobservable input | ||
Measurement input, securitized mortgage collateral | 0.463 | |
Securitized mortgage collateral | Measurement Input, Prepayment Rate | Weighted Average | ||
Unobservable input | ||
Measurement input, securitized mortgage collateral | 0.107 | |
Mortgage servicing rights | Measurement Input, Prepayment Rate | Minimum | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.075 | 0.0801 |
Mortgage servicing rights | Measurement Input, Prepayment Rate | Maximum | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.125 | 0.291 |
Mortgage servicing rights | Measurement Input, Prepayment Rate | Weighted Average | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.085 | 0.103 |
Mortgage servicing rights | Measurement Input, Discount Rate | Minimum | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.125 | 0.125 |
Mortgage servicing rights | Measurement Input, Discount Rate | Maximum | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.150 | 0.150 |
Mortgage servicing rights | Measurement Input, Discount Rate | Weighted Average | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.128 | 0.128 |
Interest rate lock commitments (IRLCs) | Measurement Input, Pull-through Rate | Minimum | ||
Unobservable input | ||
Measurement input, derivative assets - IRLCs, net | 0.400 | 0.500 |
Interest rate lock commitments (IRLCs) | Measurement Input, Pull-through Rate | Maximum | ||
Unobservable input | ||
Measurement input, derivative assets - IRLCs, net | 0.990 | 0.980 |
Interest rate lock commitments (IRLCs) | Measurement Input, Pull-through Rate | Weighted Average | ||
Unobservable input | ||
Measurement input, derivative assets - IRLCs, net | 0.695 | 0.790 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Changes in Recurring Fair Value Measurements Included in Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Change in Fair Value Included in Net Loss | |||||
Change in fair value of net trust assets, excluding trust REO | $ (9,248) | $ 5,373 | |||
Derivative liabilities, net | TBA's | |||||
Derivative assets and liabilities | |||||
Derivative Liability, Notional Amount | $ 12,500 | 12,500 | $ 102,000 | ||
Gain (loss) from derivative financial instruments | 1,072 | $ (2,379) | 4,760 | 2,832 | |
Derivative assets, net | Interest rate lock commitments (IRLCs) | |||||
Derivative assets and liabilities | |||||
Derivative Assets, Notional Balance | 55,175 | 55,175 | 255,150 | ||
Gain (loss) from derivative financial instruments | (348) | (816) | (2,613) | (3,013) | |
Mortgage loans held-for-sale | Forward delivery loan commitment | |||||
Derivative assets and liabilities | |||||
Derivative Assets, Notional Balance | 3,300 | 3,300 | |||
Gain (loss) from derivative financial instruments | (106) | 1,300 | |||
Recurring basis | |||||
Change in Fair Value Included in Net Loss | |||||
Total | 156 | (17,106) | (3,403) | (34,843) | |
Recurring basis | Interest income | |||||
Change in Fair Value Included in Net Loss | |||||
Total | (4,722) | 2,019 | (9,479) | ||
Recurring basis | Interest expense | |||||
Change in Fair Value Included in Net Loss | |||||
Total | (357) | (9,327) | (8,307) | (18,742) | |
Recurring basis | Change in Fair Value of Net Trust Assets | |||||
Change in Fair Value Included in Net Loss | |||||
Total | (1,828) | 9,248 | (5,373) | ||
Change in fair value of net trust assets, excluding trust REO | 1,800 | 9,200 | (5,400) | ||
Recurring basis | Change in Fair Value of Long-term Debt | |||||
Change in Fair Value Included in Net Loss | |||||
Total | 1,980 | 1,417 | 3,622 | 2,442 | |
Recurring basis | Other revenue | |||||
Change in Fair Value Included in Net Loss | |||||
Total | (6) | (37) | 55 | 1 | |
Recurring basis | Gain on sale of loans, net | |||||
Change in Fair Value Included in Net Loss | |||||
Total | (1,461) | (2,609) | (10,040) | (3,692) | |
Recurring basis | Level 3 | |||||
Long-term debt | |||||
Estimated fair value of long-term debt | 35,889 | 35,889 | $ 46,536 | ||
Recurring basis | Securitized mortgage borrowings | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of liabilities | (8,187) | (7,564) | (103,248) | ||
Recurring basis | Securitized mortgage borrowings | Interest expense | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of liabilities | (8,909) | (7,564) | (18,018) | ||
Recurring basis | Securitized mortgage borrowings | Change in Fair Value of Net Trust Assets | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of liabilities | 722 | (85,230) | |||
Recurring basis | Derivative liabilities, net | Hedging Instruments | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of liabilities | (896) | (2,064) | 55 | (82) | |
Recurring basis | Derivative liabilities, net | Hedging Instruments | Gain on sale of loans, net | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of liabilities | (896) | (2,064) | 55 | (82) | |
Recurring basis | Long-term debt | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of liabilities | 1,623 | 999 | 2,879 | 1,718 | |
Recurring basis | Long-term debt | Interest expense | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of liabilities | (357) | (418) | (743) | (724) | |
Recurring basis | Long-term debt | Change in Fair Value of Long-term Debt | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of liabilities | 1,980 | 1,417 | 3,622 | 2,442 | |
Recurring basis | Long-term debt | Level 3 | |||||
Long-term debt | |||||
Long-term debt unpaid principal balance | 62,000 | 62,000 | |||
Estimated fair value of long-term debt | 35,900 | 35,900 | |||
Difference between aggregate unpaid principal balances and fair value of long-term debt | 26,100 | 26,100 | |||
Recurring basis | Securitized mortgage collateral | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of assets | (7,272) | 11,267 | 70,378 | ||
Recurring basis | Securitized mortgage collateral | Interest income | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of assets | (4,722) | 2,019 | (9,479) | ||
Recurring basis | Securitized mortgage collateral | Change in Fair Value of Net Trust Assets | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of assets | (2,550) | 9,248 | 79,857 | ||
Recurring basis | Mortgage servicing rights | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of assets | (6) | (37) | 55 | 1 | |
Recurring basis | Mortgage servicing rights | Other revenue | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of assets | (6) | (37) | 55 | 1 | |
Recurring basis | Derivative assets, net | Interest rate lock commitments (IRLCs) | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of assets | (348) | (816) | (2,613) | (3,013) | |
Recurring basis | Derivative assets, net | Interest rate lock commitments (IRLCs) | Gain on sale of loans, net | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of assets | (348) | (816) | (2,613) | (3,013) | |
Recurring basis | Mortgage loans held-for-sale | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of assets | (217) | 271 | (7,482) | (597) | |
Recurring basis | Mortgage loans held-for-sale | Gain on sale of loans, net | |||||
Change in Fair Value Included in Net Loss | |||||
Change in fair value of assets | $ (217) | $ 271 | $ (7,482) | $ (597) |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Securitized mortgage collateral And mortgage borrowings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Mar. 16, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Fair Value of Financial Instruments | |||||
Aggregate sales price for sale of consolidated securitization trusts | $ 37,500 | $ 37,500 | |||
Increase in fair value of securitization trust assets | 9,200 | $ (1,828) | $ 9,248 | $ (5,373) | |
Transaction Costs Related To Transfer of Securitization Trust | $ 277 |
Fair Value of Financial Instr_9
Fair Value of Financial Instruments - Nonrecurring Fair Value Measurements (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) ft² | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) ft² | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Fair Value Measurements | |||||
Retained earnings | $ (1,264,979) | $ (1,264,979) | $ (1,250,328) | ||
Total Losses | |||||
ROU asset impairment | $ (123) | $ (123) | |||
Sublease square footage | ft² | 29,000 | 29,000 | |||
Nonrecurring Fair Value Measurements | |||||
Total Losses | |||||
REO | $ (313) | $ 1,559 | |||
ROU asset impairment | $ (123) | $ (123) | |||
Nonrecurring Fair Value Measurements | Level 2 | |||||
Fair Value Measurements | |||||
REO | $ 4,251 | $ 4,251 | |||
Nonrecurring Fair Value Measurements | Level 3 | |||||
Fair Value Measurements | |||||
ROU asset | $ 8,366 | $ 8,366 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Income taxes | |||||
Income tax expense | $ 16 | $ 62 | $ 39 | $ 43 | |
Federal | |||||
Income taxes | |||||
Net operating loss carryforwards | $ 623,500 | ||||
Net operating loss carryforwards with indefinite carryover period | 65,900 | ||||
California | |||||
Income taxes | |||||
Net operating loss carryforwards | $ 435,200 |
Reconciliation of Loss Per Co_3
Reconciliation of Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator for basic loss per share: | ||||||
Net loss | $ (13,467) | $ (1,184) | $ (8,864) | $ (683) | $ (14,651) | $ (9,547) |
Less: Cumulative non-declared dividends on preferred stock | (390) | (780) | ||||
Net earnings (loss) attributable to common stockholders | (13,857) | (8,864) | (15,431) | (9,547) | ||
Numerator for diluted loss per share: | ||||||
Net earnings (loss) attributable to common stockholders | (13,857) | (8,864) | (15,431) | (9,547) | ||
Net loss plus interest expense attributable to convertible notes | $ (13,857) | $ (8,864) | $ (15,431) | $ (9,547) | ||
Denominator for basic loss per share: | ||||||
Basic weighted average common shares outstanding during the period | 21,509 | 21,344 | 21,463 | 21,319 | ||
Denominator for diluted loss per share : | ||||||
Basic weighted average common shares outstanding during the period | 21,509 | 21,344 | 21,463 | 21,319 | ||
Diluted weighted average common shares | 21,509 | 21,344 | 21,463 | 21,319 | ||
Basic (in dollars per share) | $ (0.64) | $ (0.42) | $ (0.72) | $ (0.45) | ||
Diluted (in dollars per share) | $ (0.64) | $ (0.42) | $ (0.72) | $ (0.45) | ||
Stock options, RSUs and DSUs | ||||||
Denominator for diluted loss per share : | ||||||
Antidilutive securities excluded from weighted average share calculations (in shares) | 804 | 1,000 | ||||
Convertible Notes | ||||||
Denominator for diluted loss per share : | ||||||
Antidilutive securities excluded from weighted average share calculations (in shares) | 698 | 930 | 930 | 930 | ||
Warrants | ||||||
Denominator for diluted loss per share : | ||||||
Antidilutive securities excluded from weighted average share calculations (in shares) | 213 | 213 | 213 | 213 |
Segment Reporting - Statement o
Segment Reporting - Statement of Operations (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2022 USD ($) item | Mar. 31, 2022 USD ($) | Jun. 30, 2021 USD ($) item | Mar. 31, 2021 USD ($) | Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) item | Dec. 31, 2021 USD ($) | |
Segment Reporting | |||||||
Number of reportable segments | item | 3 | 3 | 3 | 3 | |||
Gain on sale of loans, net | $ 179 | $ 10,693 | $ 6,134 | $ 30,824 | |||
Servicing fees (expense), net | 7 | (150) | (5) | (269) | |||
Gain (loss) on mortgage servicing rights, net | 45 | (37) | 155 | 1 | |||
Real estate services fees, net | 257 | 478 | 442 | 688 | |||
Other revenue (expense) | 7 | (4) | 959 | 320 | |||
Other operating expense | (14,666) | (19,616) | (34,023) | (40,914) | |||
Other income (expense) | 720 | (166) | 11,726 | (154) | |||
Net (loss) earnings before income taxes | (13,451) | (8,802) | (14,612) | (9,504) | |||
Income tax expense | 16 | 62 | 39 | 43 | |||
Net loss | (13,467) | $ (1,184) | (8,864) | $ (683) | (14,651) | (9,547) | |
Total assets | 133,658 | 133,658 | $ 2,022,771 | ||||
Operating segments | Mortgage Lending | |||||||
Segment Reporting | |||||||
Gain on sale of loans, net | 179 | 10,693 | 6,134 | 30,824 | |||
Servicing fees (expense), net | 7 | (150) | (5) | (269) | |||
Gain (loss) on mortgage servicing rights, net | 45 | (37) | 155 | 1 | |||
Other revenue (expense) | 1 | 4 | 23 | ||||
Other operating expense | (9,378) | (15,288) | (23,880) | (31,516) | |||
Other income (expense) | 261 | (16) | 649 | (199) | |||
Net (loss) earnings before income taxes | (8,885) | (4,798) | (16,943) | (1,136) | |||
Total assets | 108,870 | 108,870 | 351,173 | ||||
Operating segments | Real Estate Services | |||||||
Segment Reporting | |||||||
Real estate services fees, net | 257 | 478 | 442 | 688 | |||
Other operating expense | (359) | (356) | (718) | (725) | |||
Net (loss) earnings before income taxes | (102) | 122 | (276) | (37) | |||
Total assets | 502 | 502 | 502 | ||||
Operating segments | Long-term Mortgage Portfolio | |||||||
Segment Reporting | |||||||
Other revenue (expense) | 28 | 42 | 43 | 69 | |||
Other operating expense | (129) | (135) | (141) | (256) | |||
Other income (expense) | 877 | 314 | 11,959 | 969 | |||
Net (loss) earnings before income taxes | 776 | 221 | 11,861 | 782 | |||
Total assets | 63 | 63 | 1,642,871 | ||||
Corporate and other | |||||||
Segment Reporting | |||||||
Other revenue (expense) | (22) | (46) | 912 | 228 | |||
Other operating expense | (4,800) | (3,837) | (9,284) | (8,417) | |||
Other income (expense) | (418) | (464) | (882) | (924) | |||
Net (loss) earnings before income taxes | (5,240) | $ (4,347) | (9,254) | $ (9,113) | |||
Total assets | $ 24,223 | $ 24,223 | $ 28,225 |
Commitments and Contingencies -
Commitments and Contingencies - Legal Proceedings (Details) $ in Millions | 6 Months Ended | 12 Months Ended | ||||||||
Apr. 29, 2022 | Apr. 01, 2020 item | Jul. 16, 2018 USD ($) director item | Dec. 07, 2011 director | Jun. 30, 2022 USD ($) item director | Dec. 31, 2021 | Aug. 08, 2022 USD ($) | Jul. 22, 2022 item | Jan. 06, 2022 director | Dec. 31, 2013 | |
Series B 9.375% redeemable preferred stock | ||||||||||
Repurchase reserve | ||||||||||
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% | 9.375% | 9.375% | ||||||
Number of directors elected by Preferred shareholders | director | 2 | 0 | ||||||||
Number of quarterly dividends payments granted under judgement for Preferred shareholders | 3 | |||||||||
Dividend amount required to be paid by company in three quarterly payments | $ | $ 1.2 | |||||||||
Percentage of shareholder approval required | 66.67% | |||||||||
Series C 9.125% redeemable preferred stock | ||||||||||
Repurchase reserve | ||||||||||
Preferred stock, dividend rate (as a percent) | 9.125% | 9.125% | 9.125% | 9.125% | ||||||
Percentage of shareholder approval required | 66.67% | |||||||||
Curtis J. Timm | Series B and C Preferred Stock | ||||||||||
Repurchase reserve | ||||||||||
Number of directors elected by Preferred shareholders | director | 2 | |||||||||
Percentage of shareholder approval required | 66.67% | |||||||||
Curtis J. Timm | Series B 9.375% redeemable preferred stock | ||||||||||
Repurchase reserve | ||||||||||
Number of additional directors to be elected by Preferred shareholders | director | 2 | |||||||||
Number of days within which special election for election of directors to be held | 60 days | |||||||||
Number of quarterly dividends payments granted under judgement for Preferred shareholders | 3 | 3 | ||||||||
Dividend amount required to be paid by company in three quarterly payments | $ | $ 1.2 | $ 1.2 | ||||||||
Percentage of shareholder approval required | 66.67% | 66.67% | 66.67% | |||||||
Number of co-plaintiffs appealing court ruling | 1 | |||||||||
Number of co-plaintiffs | 2 |
Commitments and Contingencies_2
Commitments and Contingencies - Repurchase Reserve (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies | ||
Beginning balance | $ 4,744 | $ 7,054 |
Provision for repurchases | (2,433) | (111) |
Settlements | (1,178) | (2,421) |
Total repurchase reserve | $ 5,999 | $ 4,744 |
Commitments and Contingencies_3
Commitments and Contingencies - Corporate-owned Life Insurance Trusts (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) item | |
Corporate-owned life insurance trusts | |
Number of life insurance trusts held for former executive officers | item | 3 |
Corporate-owned life insurance cash surrender value | $ 11,681 |
Corporate-owned life insurance liability | 13,261 |
Corporate-owned life insurance short-fall | (1,580) |
Accumulated Deficit | |
Corporate-owned life insurance trusts | |
Initial shortfall of corporate-owned life insurance trusts at consolidation of trusts | 1,300 |
Trust #1 | |
Corporate-owned life insurance trusts | |
Corporate-owned life insurance cash surrender value | 5,345 |
Corporate-owned life insurance liability | 6,123 |
Corporate-owned life insurance short-fall | (778) |
Trust #2 | |
Corporate-owned life insurance trusts | |
Corporate-owned life insurance cash surrender value | 4,148 |
Corporate-owned life insurance liability | 4,800 |
Corporate-owned life insurance short-fall | (652) |
Trust #3 | |
Corporate-owned life insurance trusts | |
Corporate-owned life insurance cash surrender value | 2,188 |
Corporate-owned life insurance liability | 2,338 |
Corporate-owned life insurance short-fall | $ (150) |
Equity and Share Based Paymen_3
Equity and Share Based Payments - Redeemable Preferred Stock (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended | |||||||||
Apr. 29, 2022 $ / shares shares | Dec. 07, 2011 director | Jun. 30, 2022 USD ($) item director $ / shares | Dec. 31, 2021 USD ($) $ / shares | Aug. 08, 2022 USD ($) | Jul. 22, 2022 item | Jan. 06, 2022 director | Apr. 15, 2020 $ / shares | Apr. 01, 2020 | Jul. 16, 2018 USD ($) item | Dec. 31, 2013 | |
Equity and Share Based Payments | |||||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||||||
Warrant cash exercise price | $ 2.97 | ||||||||||
Series B and C Preferred Stock | |||||||||||
Equity and Share Based Payments | |||||||||||
Outstanding liquidation preference | $ | $ 71,700 | ||||||||||
Liquidation preference amount per share | $ 25 | ||||||||||
Series B 9.375% redeemable preferred stock | |||||||||||
Equity and Share Based Payments | |||||||||||
Outstanding liquidation preference | $ | $ 36,530 | $ 36,530 | |||||||||
Liquidation value per share | $ 54.88 | ||||||||||
Cumulative undeclared dividends in arrears | $ | $ 19,900 | ||||||||||
Cumulative undeclared dividends in arrears (per share) | $ 29.88 | ||||||||||
Cumulative undeclared dividends in arrears, increase in every quarter (per share) | $ 0.5859 | ||||||||||
Amount of increase in cumulative undeclared dividends in arrears in each quarter | $ | $ 390 | ||||||||||
Number of quarterly dividends payments granted under judgement for Preferred shareholders | item | 3 | ||||||||||
Dividend amount required to be paid by company in three quarterly payments | $ | $ 1,200 | ||||||||||
Number of directors elected by Preferred shareholders | director | 2 | 0 | |||||||||
Percentage of shareholder approval required | 66.67% | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||||||
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% | 9.375% | 9.375% | |||||||
Cash payable per share | $ 5 | ||||||||||
Shares of common stock to be issued | shares | 20 | ||||||||||
New series preferred shares to be issued in lieu of cash payment | shares | 50 | ||||||||||
Series C 9.125% redeemable preferred stock | |||||||||||
Equity and Share Based Payments | |||||||||||
Outstanding liquidation preference | $ | $ 35,127 | $ 35,127 | |||||||||
Percentage of shareholder approval required | 66.67% | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||||||
Preferred stock, dividend rate (as a percent) | 9.125% | 9.125% | 9.125% | 9.125% | |||||||
Cash payable per share | $ 0.10 | ||||||||||
Warrants to be issued | shares | 1.5 | ||||||||||
Shares of common stock to be issued | shares | 1.25 | ||||||||||
New series preferred shares to be issued in lieu of cash payment | shares | 1 | ||||||||||
Number of common shares that can be purchased with each warrant | shares | 1.5 | ||||||||||
Warrant cash exercise price | $ 5 | ||||||||||
New Proposed Preferred Stock | |||||||||||
Equity and Share Based Payments | |||||||||||
Liquidation preference amount per share | $ 0.10 | ||||||||||
Preferred stock, dividend rate (as a percent) | 8.25% | ||||||||||
Preferred stock, fixed annual dividend rate per share | $ 0.00825 | ||||||||||
Preferred stock mandatory redemption period | 60 days | ||||||||||
New Proposed Preferred Stock | Maximum | |||||||||||
Equity and Share Based Payments | |||||||||||
Preferred stock mandatory redemption period | 60 days | ||||||||||
Curtis J. Timm | Series B and C Preferred Stock | |||||||||||
Equity and Share Based Payments | |||||||||||
Number of directors elected by Preferred shareholders | director | 2 | ||||||||||
Percentage of shareholder approval required | 66.67% | ||||||||||
Curtis J. Timm | Series B 9.375% redeemable preferred stock | |||||||||||
Equity and Share Based Payments | |||||||||||
Number of quarterly dividends payments granted under judgement for Preferred shareholders | item | 3 | 3 | |||||||||
Dividend amount required to be paid by company in three quarterly payments | $ | $ 1,200 | $ 1,200 | |||||||||
Percentage of shareholder approval required | 66.67% | 66.67% | 66.67% |
Equity and Share Based Paymen_4
Equity and Share Based Payments - Stock Options (Details) - Stock options $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Number of Shares | |
Options outstanding at beginning of period (in shares) | shares | 570,228 |
Options forfeited / cancelled (in shares) | shares | (10,000) |
Options outstanding at end of year (in shares) | shares | 560,228 |
Options exercisable at end of year (in shares) | shares | 518,874 |
Weighted-Average Exercise Price | |
Options outstanding at beginning of period (in dollars per share) | $ / shares | $ 7.89 |
Options forfeited / cancelled (in dollars per share) | $ / shares | 3.39 |
Options outstanding at end of year (in dollars per share) | $ / shares | 7.97 |
Options exercisable at end of year (in dollars per share) | $ / shares | $ 8.34 |
Additional disclosure related to options | |
Unrecognized compensation cost | $ | $ 54 |
Weighted-average period over which compensation cost is expected to be recognized | 1 year 7 months 6 days |
Equity and Share Based Paymen_5
Equity and Share Based Payments - Stock Units And Awards (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares shares | |
Restricted stock units (RSU's) | |
Number of Shares | |
Outstanding at beginning of year (in shares) | shares | 397,829 |
Issued (in shares) | shares | (153,251) |
Forfeited / cancelled (in shares) | shares | (18,333) |
Outstanding at end of period (in shares) | shares | 226,245 |
Weighted-Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 4.11 |
Issued (in dollars per share) | $ / shares | 4.32 |
Forfeited / cancelled (in dollars per share) | $ / shares | 3.85 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 3.99 |
Additional information | |
Unrecognized compensation cost | $ | $ 604 |
Weighted-average period over which compensation cost is expected to be recognized | 1 year 3 months 18 days |
Deferred stock units | |
Number of Shares | |
Outstanding at beginning of year (in shares) | shares | 54,500 |
Issued (in shares) | shares | (15,000) |
Outstanding at end of period (in shares) | shares | 39,500 |
Weighted-Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 6.61 |
Issued (in dollars per share) | $ / shares | 3.75 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 7.70 |
Additional information | |
Unrecognized compensation cost | $ | $ 0 |