PennyMac Financial Services (PFSI) 10-K 5 Mar 19 2018 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2018	Feb. 28, 2019	Jun. 30, 2018
Document and Entity Information
Entity Registrant Name	PENNYMAC FINANCIAL SERVICES, INC.
Entity Central Index Key	1,745,916
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 412,801,482
Entity Common Stock, Shares Outstanding		77,534,715
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
ASSETS
Cash (includes $108,174 and $20,765 pledged to creditors)	$ 155,289	$ 37,725
Short-term investments at fair value	117,824	170,080
Mortgage loans held for sale at fair value (includes $2,478,858 and $3,081,987 pledged to creditors)	2,521,647	3,099,103
Derivative assets	96,347	78,179
Servicing advances, net (includes valuation allowance of $70,582 and $59,958; $162,895 and $114,643 pledged to creditors)	313,197	318,066
Mortgage servicing rights (includes $2,820,612 and $638,010 at fair value; $2,807,333 and $2,098,067 pledged to creditors)	2,820,612	2,119,588
Real estate acquired in settlement of loans	2,250	2,447
Furniture, fixtures, equipment and building improvements, net (includes $16,281 and $23,915 pledged to creditors)	33,374	29,453
Capitalized software, net (includes $1,017 and $1,568 pledged to creditors)	39,748	25,729
Mortgage loans eligible for repurchase	1,102,840	1,208,195
Other	109,559	107,076
Total assets	7,478,573	7,368,093
LIABILITIES
Assets sold under agreements to repurchase	1,933,859	2,381,538
Mortgage loans participation purchase and sale agreements	532,251	527,395
Notes payable	1,292,291	891,505
Obligations under capital lease	6,605	20,971
Derivative liabilities	3,064	5,796
Accounts payable and accrued expenses	156,212	109,143
Mortgage servicing liabilities at fair value	8,681	14,120
Income taxes payable	400,546	52,160
Liability for mortgage loans eligible for repurchase	1,102,840	1,208,195
Liability for losses under representations and warranties	21,155	20,053
Total liabilities	5,824,782	5,648,419
Commitments and contingencies - Note 16
STOCKHOLDERS' EQUITY
Additional paid-in capital	1,310,648	204,103
Retained earnings	343,135	265,306
Total stockholders' equity attributable to PennyMac Financial Services, Inc. common stockholders	1,653,791	469,411
Noncontrolling interest in Private National Mortgage Acceptance Company, LLC		1,250,263
Total stockholders' equity	1,653,791	1,719,674
Total liabilities and stockholders' equity	7,478,573	7,368,093
Common Stock
STOCKHOLDERS' EQUITY
Common stock	8	2
Class B Common Stock
STOCKHOLDERS' EQUITY
Common stock
PMT
ASSETS
Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell pledged to creditors	131,025	144,128
Investment in PennyMac Mortgage Investment Trust at fair value	1,397	1,205
Receivable, from affiliates	33,464	27,119
LIABILITIES
Excess servicing spread financing payable to PennyMac Mortgage Investment Trust at fair value	216,110	236,534
Payable to affiliates	104,631	136,998
Private National Mortgage Acceptance Company, LLC
LIABILITIES
Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement	$ 46,537	$ 44,011

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Cash pledged to creditors	$ 108,174	$ 20,765
Mortgage loans held for sale, pledged to creditors	2,478,858	3,081,987
Servicing advances, net, valuation allowance	70,582	59,958
Servicing advances pledged to creditors	162,895	114,643
Mortgage servicing rights, at fair value	2,820,612	638,010
Mortgage servicing rights pledged to creditors	2,807,333	2,098,067
Furniture, fixtures, equipment and building improvements pledged to creditors	16,281	23,915
Capitalized software pledged to creditors	$ 1,017	$ 1,568
Common Stock
Common stock, shares authorized	200,000,000	200,000,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares issued	77,494,332	23,529,970
Common stock, shares outstanding	77,494,332	23,529,970
Class B Common Stock
Common stock, shares authorized	1,000	1,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares issued	0	46
Common stock, shares outstanding	0	46

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Mortgage loan servicing fees
From non-affiliates and affiliates	$ 585,101	$ 475,848	$ 385,633
Ancillary and other fees	64,133	58,924	46,910
Mortgage loan servicing fees	691,282	579,297	485,741
Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities	(237,389)	(292,588)	(324,198)
Change in fair value of excess servicing spread payable to PennyMac Mortgage Investment Trust	(245,889)	(273,238)	(300,275)
Net mortgage loan servicing fees	445,393	306,059	185,466
Net gains on mortgage loans held for sale at fair value:
From non-affiliates	184,439	369,815	539,872
Net gains on mortgage loans held for sale at fair value	249,022	391,804	531,780
Mortgage loan origination fees from non-affiliates	94,208	112,124	118,844
Mortgage loan origination fees	101,641	119,202	125,534
Fulfillment fees from PennyMac Mortgage Investment Trust			86,465
Interest income:
From non-affiliates	208,954	135,141	73,297
Interest income	216,416	143,179	81,127
Interest expense:
To non-affiliates	129,459	127,569	83,605
Interest expense	144,597	144,520	106,206
Net interest income (expense):	71,819	(1,341)	(25,079)
Management fees, net:
Management fees	24,469	23,585	22,746
Carried Interest from Investment Funds	(365)	(1,040)	980
Result of real estate acquired in settlement of loans	589	94	(82)
Revaluation of payable to exchanged Private National Mortgage Acceptance Company , LLC unitholders under tax receivable agreement	1,126	32,940	551
Other	9,253	3,683	3,302
Total net revenue	984,629	955,463	931,887
Expenses
Compensation	403,270	358,721	342,153
Servicing	137,104	117,696	85,857
Technology	60,103	52,013	35,322
Professional services	27,615	17,845	18,078
Loan origination	27,398	20,429	22,528
Occupancy and equipment	27,152	22,615	17,140
Marketing	8,207	9,118	5,264
Other	26,083	21,117	22,462
Total expenses	716,932	619,554	548,804
Income before provision for income taxes	267,697	335,909	383,083
Provision for income taxes	23,254	24,387	46,103
Net income	244,443	311,522	336,980
Less: Net income attributable to noncontrolling interest	156,749	210,765	270,901
Net income attributable to PennyMac Financial Services, Inc. common stockholders	$ 87,694	$ 100,757	$ 66,079
Earnings per share
Basic (in dollars per share)	$ 2.62	$ 4.34	$ 2.98
Diluted (in dollars per share)	$ 2.59	$ 4.03	$ 2.94
Weighted-average shares outstanding
Basic (in shares)	33,524	23,199	22,161
Diluted (in shares)	35,322	24,999	76,629
PMT
Mortgage loan servicing fees
From non-affiliates and affiliates	$ 42,045	$ 43,064	$ 50,615
Change in fair value of excess servicing spread payable to PennyMac Mortgage Investment Trust	(8,500)	19,350	23,923
Net mortgage loan servicing fees			185,466
Net gains on mortgage loans held for sale at fair value:
Recapture payable to PennyMac Mortgage Investment Trust	64,583	21,989	(8,092)
Mortgage loan origination fees from PennyMac Mortgage Investment Trust	7,433	7,078	6,690
Fulfillment fees from PennyMac Mortgage Investment Trust	81,350	80,359	86,465
Interest income:
From PennyMac Mortgage Investment Trust	7,462	8,038	7,830
Interest expense:
To PennyMac Mortgage Investment Trust	15,138	16,951	22,601
Management fees, net:
Management fees	24,465	22,584	20,657
Change in fair value of investment in and dividends received from affiliate	332	118	224
Investment Funds
Mortgage loan servicing fees
From non-affiliates and affiliates	3	1,461	2,583
Management fees, net:
Management fees	4	1,001	2,089
Carried Interest from Investment Funds	$ (365)	$ (1,040)	$ 980

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock.Common Stock	Common Stock.	Additional paid-in capital	Retained earnings	Noncontrolling interest	Common Stock	Total
Balance at Dec. 31, 2015	$ 2		$ 172,354	$ 98,470	$ 791,524		$ 1,062,350
Balance (in shares) at Dec. 31, 2015	21,991
Changes in stockholders' equity
Net income				66,079	270,901		336,980
Stock and unit-based compensation			4,646		11,701		16,347
Stock and unit-based compensation (in shares)	111
Distributions					(15,216)		(15,216)
Issuance of Class A common stock in settlement of director fees			313				$ 313
Issuance of Class A common stock in settlement of director fees (in shares)	24
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc.			6,877		(6,877)
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc. (in shares)	301						301
Tax effect of exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc.			(1,418)				$ (1,418)
Balance at Dec. 31, 2016	$ 2		182,772	164,549	1,052,033		1,399,356
Balance (in shares) at Dec. 31, 2016	22,427
Changes in stockholders' equity
Net income							54,386
Balance at Mar. 31, 2017							1,457,595
Balance at Dec. 31, 2016	$ 2		182,772	164,549	1,052,033		1,399,356
Balance (in shares) at Dec. 31, 2016	22,427
Changes in stockholders' equity
Net income				100,757	210,765		311,522
Stock and unit-based compensation			7,545		14,406		21,951
Issuance of Class A common stock in settlement of director fees			160		178		338
Repurchase of common stock			(8,599)			$ (8,599)	$ (8,599)
Repurchase of common stock (in shares)	(505)					(505)
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc.			27,119		(27,119)
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc. (in shares)	1,608						1,608
Tax effect of exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc.			(4,894)				$ (4,894)
Balance at Dec. 31, 2017	$ 2		204,103	265,306	1,250,263		1,719,674
Balance (in shares) at Dec. 31, 2017	23,530
Balance at Mar. 31, 2017							1,457,595
Changes in stockholders' equity
Net income							50,746
Balance at Jun. 30, 2017							1,511,252
Changes in stockholders' equity
Net income							82,492
Balance at Sep. 30, 2017							1,590,291
Changes in stockholders' equity
Net income							123,898
Balance at Dec. 31, 2017	$ 2		204,103	265,306	1,250,263		1,719,674
Balance (in shares) at Dec. 31, 2017	23,530
Changes in stockholders' equity
Balance after adjustment (in shares)	23,530
Balance at Dec. 31, 2017	$ 2		204,103	265,306	1,250,263		1,719,674
Balance (in shares) at Dec. 31, 2017	23,530
Changes in stockholders' equity
Net income							66,926
Balance at Mar. 31, 2018							1,794,199
Balance at Dec. 31, 2017	$ 2		204,103	265,306	1,250,263		1,719,674
Balance (in shares) at Dec. 31, 2017	23,530
Changes in stockholders' equity
Net income				87,694	156,749		244,443
Stock and unit-based compensation			10,932		19,636		30,568
Stock and unit-based compensation (in shares)	299	23
Class A common stock dividends ($0.40 per share)				(10,054)			(10,054)
Issuance of Class A common stock in settlement of director fees			79		166		245
Repurchase of common stock			(467)			$ (5,293)	(467)
Repurchase of common stock (in shares)		(24)				(260)
Repurchase of Class A common stock			(1,554)		(3,272)		$ (4,826)
Repurchase of Class A common stock (in shares)	(236)
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc.	$ 1		33,155		(33,156)
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc. (in shares)	1,635						1,635
Exchange of Class A common stock of subsidiary for common stock of PennyMac Financial Services, Inc. pursuant to a reorganization	$ (3)	$ 3
Exchange of Class A common stock of subsidiary for common stock of PennyMac Financial Services, Inc. pursuant to a reorganization (in shares)	(25,228)	25,228
Exchange of Class A unit of Private National Mortgage Acceptance Company, LLC for common stock of PennyMac Financial Services, Inc. pursuant to a reorganization, net of income tax effect		$ 5	1,064,315		(1,390,973)		$ (326,653)
Exchange of Class A unit of Private National Mortgage Acceptance Company, LLC for common stock of PennyMac Financial Services, Inc. pursuant to a reorganization, net of income tax effect (in shares)		52,263					52,263
Issuance of common stock in settlement of directors' fees			85				$ 85
Issuance of common stock in settlement of directors' fees (in shares)		4
Balance at Dec. 31, 2018		$ 8	1,310,648	343,135			1,653,791
Balance (in shares) at Dec. 31, 2018		77,494
Changes in stockholders' equity
Cumulative effect of change in accounting principle - Adoption of fair value accounting for all existing classes of mortgage servicing rights at fair value				189	587		776
Balance after adjustment	$ 2		204,103	265,495	$ 1,250,850		1,720,450
Balance at Mar. 31, 2018							1,794,199
Changes in stockholders' equity
Net income							68,405
Balance at Jun. 30, 2018							1,861,944
Changes in stockholders' equity
Net income							56,152
Balance at Sep. 30, 2018							1,916,710
Changes in stockholders' equity
Net income							52,960
Balance at Dec. 31, 2018		$ 8	$ 1,310,648	$ 343,135			$ 1,653,791
Balance (in shares) at Dec. 31, 2018		77,494

CONSOLIDATED STATEMENTS OF CH_2

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical)	12 Months Ended
	Dec. 31, 2018$ / shares
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Cash dividends declared (in dollars per share)	$ 0.40

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands	12 Months Ended
	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Cash flow from operating activities
Net income	$ 244,443	$ 311,522	$ 336,980
Adjustments to reconcile net income to net cash used in operating activities:
Amortization, impairment and change in fair value of mortgage servicing rights, mortgage servicing liabilities and excess servicing spread	245,889	273,238	300,275
Net gains on mortgage loans held for sale at fair value	(249,022)	(391,804)	(531,780)
Capitalization of interest on mortgage loans held for sale at fair value	(79,317)	(44,922)	(29,234)
Amortization of net (premiums) and debt issuance costs	(29,170)	6,348	11,052
Carried Interest from Investment Funds	365	1,040	(980)
Results of real estate acquired in settlement of loans	(589)	(94)	82
Stock based compensation expense	25,251	20,697	16,198
Provision for servicing advance losses	40,306	43,249	35,503
Depreciation and amortization	12,925	8,395	5,849
Loss from disposition of fixed assets and impairment of capitalized software		1,336
Originations of mortgage loans held for sale	(5,531,858)	(5,557,244)	(6,491,107)
Purchase of mortgage loans from Ginnie Mae securities and early buyout investors for modification and subsequent sale	(4,036,147)	(3,957,384)	(2,168,685)
Sale and principal payments of mortgage loans held for sale to non-affiliates	44,557,560	50,235,245	49,633,909
Repurchase of mortgage loans subject to representations and warranties	(26,021)	(20,324)	(19,248)
Collection of repurchase agreement derivative	31,907
Increase in servicing advances	(33,415)	(15,675)	(85,955)
Sale of real estate acquired in settlement of loans	4,037	4,655
Decrease in deferred tax asset			18,668
(Increase) decrease in other assets	(7,791)	16,092	(19,294)
Increase (decrease) in accounts payable and accrued expenses	32,750	(59,378)	23,005
Increase in income taxes payable	25,313	29,901	25,570
Net cash provided by (used in) operating activities	572,396	(883,412)	(938,325)
Cash flow from investing activities
Decrease (increase) in short-term investments	52,256	(84,116)	(39,645)
Net change in assets purchased from PMT under agreement to resell	13,103	5,872
Net settlement of derivative financial instruments used for hedging	(122,227)	(36,618)	(27,315)
Purchase of mortgage servicing rights	(227,664)	(178,531)	(146)
Purchase of furniture, fixtures, equipment and leasehold improvements	(13,421)	(6,791)	(21,852)
Acquisition of capitalized software	(17,444)	(16,992)	(8,537)
(Increase) decrease in margin deposits	(7,214)	(22,055)	62,756
Net cash used in investing activities	(322,611)	(339,231)	(34,739)
Cash flow from financing activities
Sale of assets under agreements to repurchase	41,375,177	35,698,381	45,925,047
Repurchase of assets sold under agreements to repurchase	(41,820,843)	(35,054,437)	(45,355,531)
Issuance of mortgage loan participation certificates	25,284,270	23,011,607	32,336,793
Repayment of mortgage loan participation certificates	(25,279,510)	(23,155,463)	(31,900,130)
Advances on notes payable	1,300,000	935,000	122,920
Repayments of notes payable	(900,000)	(186,935)	(33,661)
Advances of obligations under capital lease		10,298	16,952
Repayments of obligations under capital lease	(14,366)	(12,751)	(7,107)
Settlement of excess servicing spread financing			(59,045)
Payment of debt issuance costs	(19,982)	(22,201)	(11,747)
Acceptance of mortgage servicing liability			10,139
Payment of dividend to Class A common stockholders	(10,054)
Distributions to Private National Mortgage Acceptance Company, LLC members			(7,631)
Issuance of common stock pursuant to exercise of stock options	5,317	1,254	149
Repurchase of common stock	(5,293)	(8,599)
Net cash (used in) provided by financing activities	(132,034)	1,161,174	967,156
Net increase (decrease) in cash and restricted cash	117,751	(61,469)	(5,908)
Cash and restricted cash at beginning of year	38,173	99,642	105,550
Cash and restricted cash at end of year	155,924	38,173	99,642
Cash	155,289	37,725	99,367
Restricted cash included in Other assets	635	448	275
Investment Funds
Adjustments to reconcile net income to net cash used in operating activities:
Accrual of servicing rebate payable to Investment Funds		129	306
Carried Interest from Investment Funds	365	1,040	(980)
Collection of Carried Interest	8,187	61,314
PMT
Adjustments to reconcile net income to net cash used in operating activities:
Amortization, impairment and change in fair value of mortgage servicing rights, mortgage servicing liabilities and excess servicing spread	8,500	(19,350)	(23,923)
Accrual of interest on excess servicing spread financing	15,138	16,951	22,601
Change in fair value of investment in common shares of PennyMac Mortgage Investment Trust	(192)	23	(83)
Purchase of mortgage loans held for sale from PennyMac Mortgage Investment Trust	(37,967,724)	(42,624,288)	(42,051,505)
Sale of mortgage loans held for sale to Penny Mac Mortgage Investment Trust	3,343,028	904,097	21,541
(Increase) decrease in receivable from affiliates	(9,672)	(11,475)	2,969
(Decrease) increase in payable to affiliate	(34,472)	(34,076)	5,589
Cash flow from financing activities
Repayment of excess servicing spread financing	(46,750)	(54,980)	(69,992)
Exchanged Unit Holders
Adjustments to reconcile net income to net cash used in operating activities:
Repricing of payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement	$ (1,126)	(32,940)	$ (551)
Payments to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement		$ (6,726)

Organization

Organization	12 Months Ended
	Dec. 31, 2018
Organization
Organization	Note 1—Organization PennyMac Financial Services, Inc. (formerly known as New PennyMac Financial Services, Inc.) (“PFSI” or the “Company”) is a holding corporation and its primary assets are direct and indirect equity interests in Private National Mortgage Acceptance Company, LLC (“PennyMac”). The Company is the managing member of PennyMac, and it operates and controls all of the businesses and affairs of PennyMac, subject to the consent rights of other members under certain circumstances, and consolidates the financial results of PennyMac and its subsidiaries. PennyMac is a Delaware limited liability company which, through its subsidiaries, engages in mortgage banking and investment management activities. PennyMac’s mortgage banking activities consist of residential mortgage loan production and mortgage loan servicing. PennyMac’s investment management activities and a portion of its mortgage loan servicing activities are conducted on behalf of investment vehicles that invest in residential mortgage loans and related assets. PennyMac’s primary wholly owned subsidiaries are: · PNMAC Capital Management, LLC (“PCM”) —a Delaware limited liability company registered with the Securities and Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended. PCM enters into investment management agreements with entities that invest in residential mortgage loans and related assets. Presently, PCM has a management agreement with PennyMac Mortgage Investment Trust (“PMT”), a publicly held real estate investment trust (“REIT”). Previously, PCM had management agreements with PNMAC Mortgage Opportunity Fund, LLC and PNMAC Mortgage Opportunity Fund, L.P. an affiliate of these registered funds, and PNMAC Mortgage Opportunity Fund Investors, LLC (the “Private Fund”) (collectively, the “Investment Funds”). All of the Investment Funds were dissolved during 2018. · PennyMac Loan Services, LLC (“PLS”) —a Delaware limited liability company that services portfolios of residential mortgage loans on behalf of non-affiliates and the Advised Entities, purchases, originates and sells new prime credit quality residential mortgage loans and engages in other mortgage banking activities for its own account and the account of PMT . PLS is approved as a seller/servicer of mortgage loans by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and as an issuer of securities guaranteed by the Government National Mortgage Association (“Ginnie Mae”). PLS is a licensed Federal Housing Administration Nonsupervised Title II Lender with the U.S. Department of Housing and Urban Development (“HUD”) and a lender/servicer with the Veterans Administration (“VA”) and U.S. Department of Agriculture (“USDA”) (each an “Agency” and collectively the “Agencies”). On November 1, 2018, PNMAC Holdings, Inc. (formerly known as PennyMac Financial Services, Inc.) (“PNMAC Holdings” or “Old PFSI”) completed a corporate reorganization (the “Reorganization”) by which it changed its equity structure to create a single class of common stock held by all stockholders at a new top-level publicly traded parent holding corporation, as opposed to the two classes of common stock, Class A and Class B, that were in place at Old PFSI before the Reorganization. As part of the Reorganization, the Company replaced Old PFSI as the top-level parent holding corporation of the consolidated PennyMac business and changed its name from New PennyMac Financial Services, Inc. (“New PFSI”). As the result of the reorganization: · Each outstanding share of Class A common stock of Old PFSI was converted on a one-for-one basis into shares of New PFSI common stock. · Each outstanding share of Class B common stock of Old PFSI was cancelled for no consideration. · Each Class A unit of PennyMac not held by Old PFSI was contributed to New PFSI and exchanged on a one-for-one basis for shares of New PFSI common stock. · New PFSI replaced Old PFSI as the publicly-held entity and, through its subsidiaries, conducts all of the operations previously conducted by Old PFSI. · Old PFSI changed its name to PNMAC Holdings, Inc. and New PFSI changed its name to PennyMac Financial Services, Inc. · New PFSI assumed Old PFSI’s existing equity incentive plan—including all performance share awards, restricted share awards, common stock options and other incentive awards covering shares of Old PFSI’s Class A common stock, whether vested or not vested, that were outstanding at the effective time of the Reorganization. New PFSI reserved the same number of shares of its common stock as was reserved by Old PFSI before the effective time of the Reorganization, and the terms and conditions that were in effect immediately before the Reorganization under each outstanding incentive award assumed by New PFSI continue in full force and effect after the Reorganization, except that the shares of Class A common stock reserved under Old PFSI’s plans and issuable under each such award will be replaced by shares of common stock of New PFSI. · Old PFSI’s existing directors and executive officers hold the same positions with New PFSI. · After the completion of the Reorganization, PNMAC Holdings became a consolidated subsidiary of the Company and is considered the predecessor of the Company for accounting purposes. Accordingly, PNMAC Holdings’ historical consolidated financial statements will be the Company’s historical financial statements. · The Reorganization is to be treated as an integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code and/or a transfer described in Section 351(a) of the Internal Revenue Code.

Concentration of Risk

Concentration of Risk	12 Months Ended
	Dec. 31, 2018
Concentration of Risk
Concentration of Risk	Note 2—Concentration of Risk A substantial portion of the Company’s activities relate to the Advised Entities. Revenues generated from these entities (generally comprised of gains on mortgage loans held for sale, mortgage loan origination fees, fulfillment fees, mortgage loan servicing fees, management fees, carried interest, less net interest paid to these entities) totaled 21%, 20%, and 18% of total net revenues for the years ended December 31, 2018, 2017 and 2016, respectively.

Significant Accounting Policies

Significant Accounting Policies and Recently Issued Accounting Pronouncement	12 Months Ended
	Dec. 31, 2018
Significant Accounting Policies and Recently Issued Accounting Pronouncement
Significant Accounting Policies and Recently Issued Accounting Pronouncement	Note 3—Significant Accounting Policies and Recently Issued Accounting Pronouncement A description of the Company’s significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows. Basis of Presentation The Company’s consolidated financial statements have been prepared in compliance with accounting principles generally accepted in the United States (“GAAP”) as codified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (the “ASC” or the “Codification”). Principles of Consolidation The consolidated financial statements include the accounts of PFSI and its wholly‑owned subsidiaries, including PennyMac. Intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments and estimates that affect the reported amounts of assets and liabilities and 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. Actual results will likely differ from those estimates. Fair Value Most of the Company’s assets and certain of its liabilities are measured at or based on their fair values. The Company groups its assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the observability of the inputs used to determine fair value. These levels are: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Prices determined or determinable using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing an asset or liability and are developed based on market data obtained from sources independent of the Company. · Level 3— Prices determined using significant unobservable inputs. In situations where observable inputs are unavailable, unobservable inputs may be used. Unobservable inputs reflect the Company’s own judgments about the factors that market participants use in pricing an asset or liability, and are based on the best information available in the circumstances. As a result of the difficulty in observing certain significant valuation inputs affecting “Level 3” fair value assets and liabilities, the Company is required to make judgments regarding these items’ fair values. Different persons in possession of the same facts may reasonably arrive at different conclusions as to the inputs to be applied in valuing these assets and liabilities and their fair values. Such differences may result in significantly different fair value measurements. Likewise, due to the general illiquidity of some of these assets and liabilities, subsequent transactions may be at values significantly different from those reported. Cash Flows During the year ended December 31, 2018, the Company adopted Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows. Accordingly, the Company retrospectively changed the presentation of its consolidated statements of cash flows to conform to the requirements of ASU 2016-18. For the purpose of presentation in the statement of cash flows, the Company has identified tenant security deposits relating to rental properties owned by PMT and managed by the Company as restricted cash. The tenant security deposits are included in Other assets on the Company’s consolidated balance sheets. As the result of adoption of ASU 2016-18, the Company’s consolidated statements of cash flows for the years ended December 31, 2017 and 2016 changed as follows: Year ended December 31, 2017 2016 Cash flow Cash and Cash flow Cash and from operating restricted cash from operating restricted cash activities at year end activities at year end (in thousands) As previously reported $ (883,585) $ 37,725 $ (938,522) $ 99,367 Effect of adoption of ASU 2016-18 173 448 197 275 As reported $ (883,412) $ 38,173 $ (938,325) $ 99,642 Short‑Term Investments Short‑term investments, which represent investments in accounts with a depository institution such as money market funds, are carried at fair value. Changes in fair value are recognized in current period income. The Company classifies its short‑term investments as “Level 1” fair value assets. Mortgage Loans Held for Sale at Fair Value Management has elected to account for mortgage loans held for sale at fair value, with changes in fair value recognized in current period income, to more timely reflect the Company’s performance. All changes in fair value are recognized as a component of Net gains on mortgage loans held for sale at fair value . The Company classifies most of the mortgage loans held for sale at fair value as “Level 2” fair value assets. Certain of the Company’s mortgage loans held for sale may not be saleable into active markets due to identified defects or delinquency. Such mortgage loans are classified as “Level 3” fair value assets. Sale Recognition The Company recognizes transfers of mortgage loans as sales when it surrenders control over the mortgage loans. Control over transferred mortgage loans is deemed to be surrendered when (i) the mortgage loans have been isolated from the Company, (ii) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred mortgage loans, and (iii) the Company does not maintain effective control over the transferred mortgage loans through either (a) an agreement that entitles and obligates the Company to repurchase or redeem them before their maturity or (b) the ability to unilaterally cause the holder to return the specific mortgage loans. Interest Income Recognition Interest income on mortgage loans held for sale at fair value is recognized over the life of the mortgage loans using their contractual interest rates. Income recognition is suspended and the unpaid interest receivable is reversed against interest income when mortgage loans become 90 days delinquent, or when, in management’s opinion, a full recovery of interest and principal becomes doubtful. Income recognition is resumed when the mortgage loan becomes contractually current. Derivative Financial Instruments The Company holds and issues derivative financial instruments in connection with its operating activities. Derivative financial instruments are created as a result of certain of the Company’s operations and the Company also enters into derivative transactions as part of its interest rate risk management activities. Derivative financial instruments created as a result of the Company’s operations include: · Interest rate lock commitments (“IRLCs”) that are created when the Company commits to purchase or originate a mortgage loan acquired for sale at specified interest rates. · Derivatives that are embedded in a master repurchase agreement with a non-affiliate that provides for the Company to receive incentives for financing mortgage loans that satisfy certain consumer relief characteristics as provided in the master repurchase agreement. The Company is exposed to price risk relative to its mortgage loans held for sale as well as to IRLCs. The Company bears price risk from the time a commitment to fund a mortgage loan is made to a borrower or to purchase a mortgage loan from PMT, to the time either the prospective transaction is cancelled or the mortgage loan is sold. During this period, the Company is exposed to losses if mortgage market interest rates increase, because the fair value of the purchase commitment or prospective mortgage loan decreases. The Company also is exposed to risk relative to the fair value of its mortgage servicing rights (“MSRs”) when interest rates decrease. MSRs and mortgage servicing liabilities (“MSLs”) are generally subject to reduction in fair value when mortgage interest rates decrease. Decreasing mortgage interest rates normally encourage increased mortgage refinancing activity. Increased refinancing activity reduces the expected life of the mortgage loans underlying the MSRs and MSLs, thereby reducing their fair value. Reductions in the fair value of MSRs and MSLs affect earnings primarily through change in fair value and impairment charges. The Company engages in interest rate risk management activities in an effort to mitigate the effect of changes in market interest rates on the fair value of the Company’s assets. To manage this fair value risk resulting from interest rate risk, the Company uses derivative financial instruments acquired with the intention of reducing the risk that changes in market interest rates will result in unfavorable changes in the fair value of the Company’s IRLCs, inventory of mortgage loans held for sale and MSRs. IRLCs are accounted for as derivative financial instruments. The Company manages the risk created by IRLCs relating to mortgage loans held for sale by entering into forward sale agreements to sell the mortgage loans and by the purchase and sale of options and futures on mortgage‑backed securities (“MBS”). Such agreements are also accounted for as derivative financial instruments. These and other interest-rate derivatives are also used to manage the fair value risk created by changes in prepayment speeds on certain of the MSRs the Company holds. The Company classifies its IRLCs as “Level 3” fair value assets and liabilities. Fair value of exchange-traded hedging derivative financial instruments are categorized by the Company as “Level 1” fair value assets and liabilities. Fair value of hedging derivative financial instruments based on observable MBS prices or interest rate volatilities in the MBS market are categorized as “Level 2” fair value assets and liabilities. The Company does not designate its derivative financial instruments for hedge accounting. Therefore, the Company accounts for its derivative financial instruments as free‑standing derivatives. All derivative financial instruments are recognized on the consolidated balance sheet at fair value with changes in the fair values being reported in current period income. Changes in fair value of derivative financial instruments hedging IRLCs, mortgage loans held for sale at fair value and MSRs are included in Net gains on mortgage loans held for sale at fair value or in Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities, as applicable, in the Company’s consolidated statements of income. Changes in fair value of derivative assets relating to a master repurchase agreement are included in Interest expense . When the Company has multiple derivative financial instruments with the same counterparty subject to a master netting arrangement, it offsets the amounts recorded as assets and liabilities and amounts recognized for the right to reclaim cash collateral it has deposited with the counterparty or the obligation to return cash collateral it has collected from the counterparty arising from that master netting arrangement. Such offset amounts are presented as either a net asset or liability by counterparty on the Company’s consolidated balance sheets. Servicing Advances Servicing advances represent advances made on behalf of borrowers and the mortgage loans’ investors to fund property taxes, insurance premiums and out-of-pocket collection costs (e.g., preservation and restoration of mortgaged or real estate acquired in the settlement of loans (“REO”), legal fees, and appraisals). Servicing advances are made in accordance with the Company’s servicing agreements and, when made, are deemed recoverable. The Company periodically reviews servicing advances for collectability and provides a valuation allowance for amounts estimated to be uncollectable. Servicing advances are written off when they are deemed uncollectable. Mortgage Servicing Rights and Mortgage Servicing Liabilities MSRs and MSLs arise from contractual agreements between the Company and investors (or their agents) in mortgage securities and mortgage loans. Under these contracts, the Company performs mortgage loan servicing functions in exchange for fees and other remuneration. The servicing functions typically performed include, among other responsibilities, collecting and remitting loan payments; responding to borrower inquiries; accounting for principal and interest; holding custodial (impound) funds for payment of property taxes and insurance premiums; counseling delinquent mortgagors; and supervising the acquisition and disposition of REO. The fair value of MSRs and MSLs is derived from the net positive or negative, respectively, cash flows associated with the servicing contracts. The Company receives a servicing fee, net of related guarantee fees based on the remaining outstanding principal balances of the mortgage loans subject to the servicing contracts. The servicing fees are collected from the monthly payments made by the mortgagors. The Company is contractually entitled to receive other remuneration including various mortgagor‑contracted fees such as late charges and collateral reconveyance charges, and the Company is generally entitled to retain the interest earned on funds held pending remittance related to its collection of mortgagor payments. The Company also generally has the right to solicit the mortgagors for other products and services as well as for new mortgages for those considering refinancing or purchasing a new home. The Company recognizes MSRs and MSLs initially at fair value, either as proceeds from or liabilities incurred in, sales of mortgage loans where the Company assumes the obligation to service the mortgage loan in the sale transaction, or from the purchase of MSRs or receipt of cash for acceptance of MSLs. Through December 31, 2017, the Company’s subsequent accounting for MSRs and MSLs was based on the class of MSR or MSL. The Company identified three classes of MSRs: originated MSRs backed by mortgage loans with initial interest rates of less than or equal to 4.5%, MSRs backed by mortgage loans with initial interest rates of more than 4.5%, and purchased MSRs financed in part through the transfer of the right to receive excess servicing spread (“ESS”) cash flows. · Originated MSRs backed by mortgage loans with initial interest rates of less than or equal to 4.5% were accounted for using the amortization method (discussed below). · Originated MSRs backed by loans with initial interest rates of more than 4.5% and purchased MSRs financed in part by ESS were accounted for at fair value with changes in fair value recorded in current period income. MSLs were and continue to be carried at fair value with changes in fair value recorded in current period income. Effective January 1, 2018, the Company elected to change the accounting for MSRs it had accounted for using the amortization method through December 31, 2017, to the fair value method as allowed in the Transfers and Servicing topic of the FASB’s ASC. The Company determined that a single accounting treatment across all currently existing classes of MSRs is consistent with lender valuation under its financing arrangements and simplifies that Company’s hedging activities. As a result of this change, the Company recorded an adjustment to increase its investment in MSRs by $848,000, increase its liability for income taxes payable by $72,000 and increase its stockholders’ equity by $776,000. The fair value of MSRs and MSLs is difficult to determine because MSRs and MSLs are not actively traded in observable stand‑alone markets. Considerable judgment is required to estimate the fair values of MSRs and MSLs and the exercise of such judgment can significantly affect the Company’s income. Therefore, the Company classifies its MSRs and MSLs as “Level 3” fair value assets and liabilities. MSRs and MSLs Accounted for at Fair Value Changes in fair value of MSLs and MSRs accounted for at fair value are recognized in current period income in Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities in the consolidated statements of income. MSRs Accounted for Using the Amortization Method Through December 2017, the Company amortized MSRs that were accounted for using the amortization method. MSR amortization was determined by applying the ratio of the net MSR cash flows projected for the current period to the estimated total remaining projected net MSR cash flows. The estimated total net MSR cash flows were determined at the beginning of each month using prepayment inputs applicable at that time. MSRs accounted for using the amortization method were periodically evaluated for impairment. Impairment occurs when the current fair value of the MSRs decreases below the asset’s amortized cost. If MSRs were impaired, the impairment was recognized in current‑period income and the carrying value (carrying value is the MSR’s amortized cost reduced by any related valuation allowance) of the MSRs was adjusted through a valuation allowance. If the fair value of impaired MSRs subsequently increased, the increase in fair value was recognized in current‑period income. When an increase in fair value of MSR was recognized, the valuation allowance was adjusted to increase the carrying value of the MSRs only to the extent of the valuation allowance. For impairment evaluation purposes, the Company stratified its MSRs by predominant risk characteristic when evaluating for impairment. For purposes of performing its MSR impairment evaluation, the Company stratified its servicing portfolio on the basis of certain risk characteristics including mortgage loan type (fixed‑rate or adjustable‑rate) and note interest rate. Fixed‑rate mortgage loans were stratified into note rate pools of 50 basis points for note rates between 3.0% and 4.5% and a single pool for note rates of less than or equal to 3.0%. If the fair value of MSRs in any of the note interest rate pools was below the carrying value of the MSRs for that pool, impairment was recognized to the extent of the difference between the fair value and the carrying value of that pool. Management periodically reviewed the various impairment strata to determine whether the fair value of the impaired MSRs in a given stratum was likely to recover. When management deemed recovery of the fair value to be unlikely in the foreseeable future, a write‑down of the cost of the MSRs for that stratum to its estimated recoverable value was charged to the valuation allowance. Both amortization and changes in the amount of the MSR valuation allowance were recorded in current period income in Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities in the consolidated statements of income. Furniture, Fixtures, Equipment and Building Improvements Furniture, fixtures, equipment and building improvements are stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight‑line method over the estimated useful lives of the various classes of assets, which range from five to seven years for furniture and equipment and the lesser of the asset’s estimated useful life or the remaining lease term for fixtures and building improvements. Capitalized Software The Company capitalizes certain consulting, payroll, and payroll‑related costs related to computer software developed for internal use. Once development is complete and the software is placed in service, the Company amortizes the capitalized costs over three to seven years using the straight‑line method. The Company also periodically assesses capitalized software for recoverability when events or changes in circumstances indicate that its carrying amount may not be recoverable. If management identifies an indicator of impairment, it assesses recoverability by comparing the carrying amount of the asset to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset. An impairment loss is recognized when the carrying amount is not recoverable and is measured as the excess of carrying value over fair value. Investment in PennyMac Mortgage Investment Trust at Fair Value Common shares of beneficial interest in PMT are carried at their fair value with changes in fair value recognized in current period income. Fair value for purposes of the Company’s holdings in PMT is based on the published closing price of the shares as of period end. The Company classifies its investment in common shares of PMT as a “Level 1” fair value asset. Mortgage Loans Eligible for Repurchase 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 the three consecutive months preceding the month of repurchase. As a result of this right, the Company recognizes the mortgage loans in Mortgage loans eligible for repurchase at their unpaid principal balances and records a corresponding liability in Liability for mortgage loans eligible for repurchase on its consolidated balance sheets. Carried Interest Due from Investment Funds Carried Interest, in general terms, is the share of any profits in excess of specified levels that the general partners receive as compensation. The Company had a general partnership interest or other Carried Interest arrangement with the Investment Funds, and earned Carried Interest thereunder. The amount of Carried Interest to be recorded each period was based on the cash flows that would be realized by all partners assuming liquidation of the Investment Funds’ remaining investments as of the measurement date. The Company received Carried Interest in the priority of distribution as provided in the charter documents relating to the respective Investment Funds. The Company included its Carried Interest in Other assets. Borrowings The carrying values of borrowings other than ESS are based on the accrued cost of the agreements. The costs of creating the facilities underlying the agreements are included in the carrying value of the agreements and are amortized to Interest expense over the terms of the respective borrowing facilities: · Debt issuance costs relating to revolving facilities, such as repurchase agreement and mortgage loan participation purchase and sale facilities are amortized on the straight line basis over the term of the facility; · Debt issuance cost relating to non-revolving debts, such as certain of the Company’s Notes payable, are amortized over the contractual term of the non-revolving debt using the interest method; · Debt issuance premiums recorded as the results of recognition of repurchase agreement derivatives are amortized to Interest expense over the contractual term of the repurchase agreement. Unamortized premiums relating to repurchase agreements repaid before the transaction’s contractual maturity are credited to Interest expense . Excess Servicing Spread Financing at Fair Value The Company finances certain of its purchases of Agency MSRs through the sale to PMT of the right to receive the excess of the servicing fee rate over a specified rate of the underlying MSRs. This excess is referred to as the ESS. ESS is carried at its fair value. Changes in fair value are recognized in current period income in Change in fair value of excess servicing spread payable to PennyMac Mortgage Investment Trust . Interest expense for ESS is accrued using the interest method based upon the expected cash flows from the ESS through the expected life of the underlying mortgage loans. Liability for Losses Under Representations and Warranties The Company’s agreements with the Agencies and other investors include representations and warranties related to the mortgage loans the Company sells to the Agencies and other investors. The representations and warranties require adherence to Agency and other investor origination and underwriting guidelines, including but not limited to the validity of the lien securing the mortgage loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. In the event of a breach of its representations and warranties, the Company may be required to either repurchase the mortgage loans with the identified defects or indemnify the investor or insurer. In such cases, the Company bears any subsequent credit loss on the mortgage loans. The Company’s credit loss may be reduced by any recourse it may have to correspondent mortgage loan sellers that, in turn, had sold such mortgage loans to PMT and breached similar or other representations and warranties. In such event, the Company has the right to seek a recovery of related repurchase losses from that correspondent mortgage loan seller, through PMT. As a result of providing representations and warranties to investors and insurers, the Company records a provision for losses relating to representations and warranties as part of its mortgage loan sale transactions. The method used to estimate the liability for representations and warranties is a function of the representations and warranties given and considers a combination of factors, including, but not limited to, estimated future defaults and mortgage loan repurchase rates, the estimated severity of loss in the event of default and the probability of reimbursement by the correspondent mortgage loan seller. The Company establishes a liability at the time mortgage loans are sold and periodically updates its liability estimate. The level of the liability for representations and warranties is reviewed and approved by the Company’s management credit committee. The level of the liability for representations and warranties is difficult to estimate and requires considerable management judgment. The level of mortgage loan repurchase losses is dependent on economic factors, investor repurchase demand or insurer claim denial strategies, and other external conditions that may change over the lives of the underlying mortgage loans. The Company’s representations and warranties are generally not subject to stated limits of exposure. However, the Company believes that the current unpaid principal balance of mortgage loans sold to date represents the maximum exposure to repurchases related to representations and warranties. Mortgage Loan Servicing Fees Mortgage loan servicing fees are received by the Company for servicing residential mortgage loans. Mortgage loan servicing activities include loan administration, collection, and default management, including the collection and remittance of loan payments; response to customer inquiries; accounting for principal and interest; holding custodial (impounded) funds for the payment of property taxes and insurance premiums; counseling delinquent mortgagors; and supervising foreclosures and REO property dispositions. Mortgage loan servicing fee amounts are based upon fee schedules established by the applicable investor and depend on whether the Company is directly servicing loans, where it holds the MSRs, subservicing MSRs or loans held by PMT or another third party or subservicing distressed mortgage loans for the Advised Entities. The Company’s obligations under its mortgage loan servicing agreements are fulfilled as the Company services the mortgage loans. Fees are collected when the mortgage loan payments are received from the borrowers in the case of MSRs held by the Company or within 30 days of the applicable month-end from the Advised Entities. Owned mortgage loan servicing fees are recorded net of Agency guarantee fees paid by the Company and are recognized when the mortgage loan payments are received from the borrowers. Mortgage loan servicing fees relating to mortgage loans serviced for the Advised Entities are recognized in the month in which the mortgage loans are serviced. Fulfillment Fees Fulfillment fees represent fees the Company collects for services it performs on behalf of PMT in connection with the acquisition, packaging and sale of mortgage loans. Fulfillment fee amounts are based upon a negotiated fee schedule and the unpaid principal balance of the mortgage loans purchased by PMT. The Company’s obligation under the agreement is fulfilled when PMT completes the sale or securitization of a mortgage loan it purchases. Fulfillment fee revenue is recognized in the month the mortgage loan is purchased by PMT. Fulfillment fees are generally collected within 30 days of purchase by PMT, although a portion of the fulfillment fees may not be collected until 30 days following sale or securitization to the extent such sale or securitization does not occur in the month of purchase. Management fees Management fees represent compensation to the Company for its management services provided to the Advised Entities. Management fees were earned based on the Investment Funds’ net assets and are based on PMT’s shareholders’ equity amounts and profitability in excess of specified thresholds. Management fees are recognized as services are provided and are paid to the Company on a quarterly basis within 30 days of the end of the quarter. Stock‑Based Compensation The Company’s 2013 Equity Incentive Plan provides for awards of nonstatutory and incentive stock options, time‑based restricted stock units, performance‑based restricted stock units, stock appreciation rights, performance units and stock grants. The Company establishes the cost of its share-based awards at the awards’ fair values at the grant date of the awards. The Company estimates the fair value of time‑based restricted stock units and performance‑based restricted stock units awarded with reference to the fair value of its underlying common stock and expected forfeiture rates on the date of the award. The Company estimates the fair value of its stock option awards with reference to the expected price volatility of its shares of common stock and risk-free interest rate for the period that exercisable stock options are expected to be outstanding. Compensation costs are fixed, except for performance‑based restricted stock units, as of the award date as all grantees are employees of PennyMac or directors of the Company. The cost of performance‑based restricted stock units is adjusted in each reporting period after the grant for changes in expected performance attainment until the performance share units vest. The Company amortizes the cost of stock based awards to compensation expense over the vesting period using the graded vesting method. Expense relating to awards is included in Compensation expense in the consolidated statements of income. Income Taxes The Company is subject to federal and state income taxes. Income taxes are provided using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period in which the change occurs. A valuation allowance is established if, in management’s judgment, it is not more likely than not that a deferred tax asset will be realized. The Company recognizes tax benefits relating to its tax positions only if, in the opinion of management, it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority. A tax position that meets this standard is recognized as the largest amount that is greater than 50% likely to be realized upon ultimate settlement with the appropriate taxing authority. The Company will classify any penalties and interest as a component of provision for income taxes. As a result of the PennyMac recapitalization and reorganization in 2013, the Company expects to benefit from amortization and other tax deductions resu

Transactions with Affiliates

Transactions with Affiliates	12 Months Ended
	Dec. 31, 2018
Transactions with Affiliates
Transactions with Affiliates	Note 4—Transactions with Affiliates Transactions with PMT Operating Activities Mortgage Loan Production Activities and MSR Recapture The Company sells newly originated loans to PMT under a mortgage loan purchase agreement. Historically, the Company has used the mortgage loan purchase agreement for the purpose of selling to PMT prime jumbo residential mortgage loans. Beginning in the third quarter of 2017, the Company also sells conventional, conforming balance mortgage loans to PMT under the agreement. Pursuant to the terms of an amended and restated MSR recapture agreement, effective September 12, 2016, if the Company refinances mortgage loans for which PMT previously held the MSRs, the Company is generally required to transfer and convey cash in an amount equal to 30% of the fair market value of the MSRs related to all the mortgage loans so originated. The MSR recapture agreement expires on September 12, 2020, subject to automatic renewal for additional 18-month periods, unless terminated earlier in accordance with the terms of the agreement. The Company provides fulfillment and other services to PMT under an amended and restated mortgage banking services agreement for which it receives a fulfillment fee. Pursuant to the terms of the mortgage banking services agreement, the monthly fulfillment fee is an amount that shall equal (a) no greater than the product of (i) 0.35% and (ii) the aggregate initial unpaid principal balance (the “Initial UPB”) of all mortgage loans purchased in such month, plus (b) in the case of all mortgage loans other than mortgage loans sold to or securitized through Fannie Mae or Freddie Mac, no greater than the product of (i) 0.50% and (ii) the aggregate Initial UPB of all such mortgage loans sold and securitized in such month; provided, however, that no fulfillment fee shall be due or payable to the Company with respect to any mortgage loans underwritten to the Ginnie Mae Mortgage Backed Securities (“MBS”) Guide. PMT does not hold the Ginnie Mae approval required to issue Ginnie Mae MBS and act as a servicer. Accordingly, under the agreement, the Company currently purchases mortgage loans underwritten in accordance with the Ginnie Mae MBS Guide “as is” and without recourse of any kind from PMT at PMT’s cost less an administrative fee plus accrued interest and a sourcing fee ranging from two to three and one-half basis points, generally based on the average number of calendar days mortgage loans are held by PMT before being purchased by the Company. In consideration for the mortgage banking services provided by the Company with respect to PMT’s acquisition of mortgage loans under the Company’s early purchase program, the Company is entitled to fees accruing (i) at a rate equal to $1,500 per year per early purchase facility administered by the Company, and (ii) in the amount of $35 for each mortgage loan that PMT acquires thereunder. The mortgage banking services agreement expires, unless terminated earlier in accordance with the agreement, on September 12, 2020, subject to automatic renewal for additional 18-month periods. Following is a summary of loan production activities, including MSR recapture, between the Company and PMT: Year ended December 31, 2018 2017 2016 (in thousands) Net gains (loss) on mortgage loans held for sale at fair value: Net gains on mortgage loans held for sale to PMT $ 69,359 $ 28,238 $ — Mortgage servicing rights and excess servicing spread recapture incurred (4,776) (6,249) (8,092) $ 64,583 $ 21,989 $ (8,092) Sale of mortgage loans held for sale to PMT $ 3,343,028 $ 904,097 $ 21,541 Fulfillment fee revenue $ 81,350 $ 80,359 $ 86,465 Unpaid principal balance of mortgage loans fulfilled for PMT subject to fulfillment fees $ 26,194,303 $ 22,971,119 $ 23,188,386 Sourcing fees paid to PMT $ 10,925 $ 12,084 $ 11,976 Unpaid principal balance of mortgage loans purchased from PMT $ 36,415,933 $ 40,561,241 $ 39,908,163 Tax service fees earned from PMT included in Mortgage loan origination fees $ 7,433 $ 7,078 $ 6,690 Early purchase program fees earned from PMT included in Mortgage loan servicing fees $ — $ 7 $ 30 Mortgage Loan Servicing The Company has a mortgage loan servicing agreement with PMT (“Servicing Agreement”). The Servicing Agreement provides for servicing fees of per‑loan monthly amounts based on the delinquency, bankruptcy and/or foreclosure status of the serviced mortgage loan or REO. The Company also remains entitled to customary ancillary income and market-based fees and charges relating to mortgage loans it services for PMT. These include boarding and deboarding fees, liquidation and disposition fees, assumption, modification and origination fees and a percentage of late charges. · The base servicing fee rates for distressed whole mortgage loans range from $30 per month for current loans up to $85 per month for loans where the borrower has declared bankruptcy. The base servicing fee rate for REO is $75 per month. · To the extent the Company facilitates rentals of PMT's REO under its REO rental program, the Company collects an REO rental fee of $30 per month per REO, an REO property lease renewal fee of $100 per lease renewal, and a property management fee in an amount equal to the Company’s cost if property management services and/or any related software costs are outsourced to a third-party property management firm or 9% of gross rental income if the Company provides property management services directly. The Company is also entitled to retain any tenant paid application fees and late rent fees and seek reimbursement for certain third-party vendor fees. · Except as otherwise provided in the MSR recapture agreement, when the Company effects a refinancing of a mortgage loan on behalf of PMT and not through a third-party lender and the resulting mortgage loan is readily saleable, or the Company originates a loan to facilitate the disposition of a REO, the Company is entitled to receive from PMT market-based fees and compensation consistent with pricing and terms the Company offers unaffiliated parties on a retail basis. · Because PMT has a small number of employees and limited infrastructure, the Company is required to provide a range of services and activities significantly greater in scope than the services provided in connection with a customary servicing arrangement. For these services, the Company receives a supplemental servicing fee of $25 per month for each distressed mortgage loan. The Company is entitled to reimbursement for all customary, good faith reasonable and necessary out-of-pocket expenses incurred by the Company in performance of its servicing obligations. · The Company is entitled to retain any incentive payments made to it and to which it is entitled under the U.S. Department of Treasury’s Home Affordable Modification Plan; provided, however, that with respect to any such incentive payments paid to the Company in connection with a mortgage loan modification for which PMT previously paid the Company a modification fee, the Company is required to reimburse PMT an amount equal to the incentive payments. · The Company is also entitled to certain activity-based fees for distressed whole mortgage loans that are charged based on the achievement of certain events. These fees range from $750 for a streamline modification to $1,750 for a full modification or liquidation and $500 for a deed-in-lieu of foreclosure. The Company is not entitled to earn more than one liquidation fee, reperformance fee or modification fee per mortgage loan in any 18-month period. · The base servicing fees for non-distressed mortgage loans are calculated through a monthly per-loan dollar amount, with the actual dollar amount for each loan based on whether the mortgage loan is a fixed-rate or adjustable-rate loan. The base servicing fee rates are $7.50 per month and $8.50 per month for fixed-rate loans and adjustable-rate loans, respectively. The Servicing Agreement expires on September 12, 2020, subject to automatic renewal for additional 18-month periods, unless terminated earlier in accordance with the terms of the agreement. Following is a summary of mortgage loan servicing fees earned from PMT: Year ended December 31, 2018 2017 2016 (in thousands) Mortgage loans acquired for sale at fair value: Base and supplemental $ 347 $ 305 $ 330 Activity-based 690 649 733 1,037 954 1,063 Mortgage loans at fair value: Base and supplemental 2,771 6,650 11,078 Activity-based 4,784 8,960 18,521 7,555 15,610 29,599 Mortgage servicing rights: Base and supplemental 32,854 25,991 19,461 Activity-based 599 509 492 33,453 26,500 19,953 $ 42,045 $ 43,064 $ 50,615 Property management fees received from PMT included in Other income $ 442 $ 350 $ 138 Investment Management Activities The Company has a management agreement with PMT (“Management Agreement”). The Management Agreement provides that: The base management fee is calculated quarterly and is equal to the sum of (i) 1.5% per year of PMT’s average shareholders’ equity up to $2 billion, (ii) 1.375% per year of PMT’s average shareholders’ equity in excess of $2 billion and up to $5 billion, and (iii) 1.25% per year of PMT’s average shareholders’ equity in excess of $5 billion. The performance incentive fee is calculated quarterly at a defined annualized percentage of the amount by which PMT’s “net income,” on a rolling four‑quarter basis and before deducting the incentive fee, exceeds certain levels of return on “equity.” The performance incentive fee is equal to the sum of: (a) 10% of the amount by which PMT’s “net income” for the quarter exceeds (i) an 8% return on equity plus the “high watermark,” up to (ii) a 12% return on PMT’s equity; plus (b) 15% of the amount by which PMT’s “net income” for the quarter exceeds (i) a 12% return on PMT’s equity plus the “high watermark,” up to (ii) a 16% return on PMT’s equity; plus (c) 20% of the amount by which PMT’s “net income” for the quarter exceeds a 16% return on equity plus the “high watermark.” For the purpose of determining the amount of the performance incentive fee: “Net income” is defined as net income or loss attributable to PMT’s common shares of beneficial interest computed in accordance with GAAP adjusted for certain other non‑cash charges determined after discussions between the Company and PMT’s independent trustees and approval by a majority of PMT’s independent trustees. “Equity” is the weighted average of the issue price per common share of all of PMT’s public offerings, multiplied by the weighted average number of common shares outstanding (including restricted share units) in the rolling four‑quarter period. The “high watermark” is the quarterly adjustment that reflects the amount by which the “net income” (stated as a percentage of return on equity) in that quarter exceeds or falls short of the lesser of 8% and the average Fannie Mae 30‑year MBS yield (the “Target Yield”) for the four quarters then ended. If the “net income” is lower than the Target Yield, the high watermark is increased by the difference. If the “net income” is higher than the Target Yield, the high watermark is reduced by the difference. Each time a performance incentive fee is earned, the high watermark returns to zero. As a result, the threshold amounts required for the Company to earn a performance incentive fee are adjusted cumulatively based on the performance of PMT’s “net income” over (or under) the Target Yield, until the “net income” in excess of the Target Yield exceeds the then‑current cumulative high watermark amount, and a performance incentive fee is earned. The base management fee and the performance incentive fee are both receivable quarterly in arrears. The performance incentive fee may be paid in cash or a combination of cash and PMT’s common shares (subject to a limit of no more than 50% paid in common shares), at PMT’s option. The Management Agreement expires on September 12, 2020, subject to automatic renewal for additional Following is a summary of the base management and performance incentive fees earned from PMT: Year ended December 31, 2018 2017 2016 (in thousands) Base management $ 23,033 $ 22,280 $ 20,657 Performance incentive 1,432 304 — $ 24,465 $ 22,584 $ 20,657 Expense Reimbursement Under the Management Agreement, PMT reimburses the Company for its organizational and operating expenses, including third-party expenses, incurred on PMT’s behalf, it being understood that the Company and its affiliates shall allocate a portion of their personnel’s time to provide certain legal, tax and investor relations services for the direct benefit of PMT. With respect to the allocation of the Company’s and its affiliates’ personnel compensation, from and after September 12, 2016, the Company shall be reimbursed $120,000 per fiscal quarter, such amount to be reviewed annually and not preclude reimbursement for any other services performed by the Company or its affiliates. PMT is also required to pay its pro rata portion of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of the Company and its affiliates required for PMT’s and its subsidiaries’ operations. These expenses will be allocated based on the ratio of PMT’s proportion of gross assets compared to all remaining gross assets managed by the Company as calculated at each fiscal quarter end. The Company received reimbursements from PMT for expenses as follows: Year ended December 31, 2018 2017 2016 (in thousands) Reimbursement of: Common overhead incurred by the Company (1) $ 4,640 $ 5,306 $ 7,898 Compensation (1) 480 — — Expenses incurred on (the Company's) PMT's behalf, net 1,113 2,257 (163) $ 6,233 $ 7,563 $ 7,735 Payments and settlements during the year (2) $ 71,943 $ 64,945 $ 143,542 (1) The Company adopted Accounting Standards Update 2014-09 Revenues from Contracts with Customers (“ASU 2014-09”) using the modified retrospective method effective January 1, 2018. Adoption of ASU 2014-09 using the modified retrospective method required the Company to include those reimbursements from PMT in Other revenue starting January 1, 2018. Before adoption of ASU 2014-09, the Company included such reimbursements in the respective expense line items. (2) Payments and settlements include payments for management fees and correspondent production activities itemized in the preceding tables and netting settlements made pursuant to master netting agreements between the Company and PMT. Conditional Reimbursement of Underwriting Fees In connection with its initial public offering of common shares of beneficial interest on August 4, 2009 (“IPO”), PMT conditionally agreed to reimburse the Company up to $2.9 million for underwriting fees paid to the IPO underwriters by the Company on PMT’s behalf. In the event a termination fee is payable to the Company under the Management Agreement, and the Company has not received the full amount of the reimbursements and payments under the reimbursement agreement, such amount will be paid in full. On February 1, 2019, the term of the reimbursement agreement was extended, and it now expires on February 1, 2023. The Company received $69,000, $30,000, and $0 in reimbursement from PMT during the years ended December 31, 2018, 2017, and 2016, respectively. Investing Activities Master Repurchase Agreement On December 19, 2016, the Company, through PLS, entered into a master repurchase agreement with one of PMT’s wholly-owned subsidiaries, PennyMac Holdings, LLC (“PMH”) (the “PMH Repurchase Agreement”), pursuant to which PMH may borrow from the Company for the purpose of financing PMH’s participation certificates representing beneficial ownership in ESS. PLS then re-pledges such participation certificates to PNMAC GMSR ISSUER TRUST (the “Issuer Trust”) under a master repurchase agreement by and among PLS, the Issuer Trust and PennyMac, as guarantor (the “PC Repurchase Agreement”). The Issuer Trust was formed for the purpose of allowing PLS to finance MSRs and ESS relating to such MSRs (the “GNMA MSR Facility”). In connection with the GNMA MSR Facility, PLS pledges and/or sells to the Issuer Trust participation certificates representing beneficial interests in MSRs and ESS pursuant to the terms of the PC Repurchase Agreement. In return, the Issuer Trust (a) has issued to PLS, pursuant to the terms of an indenture, the Series 2016-MSRVF1 Variable Funding Note, dated December 19, 2016, known as the “PNMAC GMSR ISSUER TRUST MSR Collateralized Notes, Series 2016-MSRVF1” (the “VFN”), and (b) has issued and may, from time to time pursuant to the terms of any supplemental indenture, issue to institutional investors additional term notes (“Term Notes”), in each case secured on a pari passu basis by the participation certificates relating to the MSRs and ESS. The maximum principal balance of the VFN is $1,000,000,000. The principal amount paid by PLS for the participation certificates under the PMH Repurchase Agreement is based upon a percentage of the market value of the underlying ESS. Upon PMH’s repurchase of the participation certificates, PMH is required to repay PLS the principal amount relating thereto plus accrued interest (at a rate reflective of the current market and consistent with the weighted average note rate of the VFN and any outstanding Term Notes) to the date of such repurchase. PLS is then required to repay the Issuer Trust the corresponding amount under the PC Repurchase Agreement. The Company holds an investment in PMT in the form of 75,000 common shares of beneficial interest. Following is a summary of investing activities between the Company and PMT: Year ended December 31, 2018 2017 2016 (in thousands) Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell: Activity during the year: Refinancing of note receivable from PennyMac Mortgage Investment Trust $ — $ — $ 150,000 Sale of assets purchased from PMT under agreement to resell $ 13,103 $ 5,872 $ — Interest income $ 7,462 $ 8,038 $ 253 Balance at end of year $ 131,025 $ 144,128 $ 150,000 Note receivable from PennyMac Mortgage Investment Trust: Activity during the year: Refinancing with repurchase agreement from PennyMac Mortgage Investment Trust $ — $ — $ 150,000 Interest income $ — $ — $ 7,577 Balance at end of year $ — $ — $ — Common shares of beneficial interest of PennyMac Mortgage Investment Trust: Activity during the year: Dividends earned from PennyMac Mortgage Investment Trust $ 140 $ 141 $ 141 Change in fair value of investment in common shares of PennyMac Mortgage Investment Trust 192 (23) 83 $ 332 $ 118 $ 224 Balance at end of year: Fair value $ 1,397 $ 1,205 Number of shares 75 75 Financing Activities Spread Acquisition and MSR Servicing Agreements On December 19, 2016, the Company amended and restated a master spread acquisition and MSR servicing agreement with PMT (the “Spread Acquisition Agreement”), pursuant to which the Company may sell to PMT, from time to time, the right to receive participation certificates representing beneficial ownership in ESS arising from Ginnie Mae MSRs acquired by the Company, in which case the Company generally would be required to service or subservice the related mortgage loans for Ginnie Mae. The primary purpose of the amendment and restatement was to facilitate the continued financing of the ESS owned by PMT in connection with the parties’ participation in the GNMA MSR Facility. To the extent the Company refinances any of the mortgage loans relating to the ESS it has acquired, the Spread Acquisition Agreement also contains recapture provisions requiring that the Company transfer to PMT, at no cost, the ESS relating to a certain percentage of the unpaid principal balance of the newly originated mortgage loans. However, under the Spread Acquisition Agreement, in any month where the transferred ESS relating to newly originated Ginnie Mae mortgage loans is not equivalent to at least 90% of the product of the excess servicing fee rate and the unpaid principal balance of the refinanced mortgage loans, the Company is also required to transfer additional ESS or cash in the amount of such shortfall. Similarly, in any month where the transferred ESS relating to modified Ginnie Mae mortgage loans is not equivalent to at least 90% of the product of the excess servicing fee rate and the unpaid principal balance of the modified mortgage loans, the Spread Acquisition Agreement contains provisions that require the Company to transfer additional ESS or cash in the amount of such shortfall. To the extent the fair market value of the aggregate ESS to be transferred for the applicable month is less than $200,000, the Company may, at its option, wire cash to PMT in an amount equal to such fair market value in lieu of transferring such ESS. Following is a summary of financing activities between the Company and PMT: Year ended December 31, 2018 2017 2016 (in thousands) Excess servicing spread financing: Issuance pursuant to recapture agreement $ 2,688 $ 5,244 $ 6,603 Repayment $ 46,750 $ 54,980 $ 69,992 Settlement $ — $ — $ 59,045 Change in fair value $ 8,500 $ (19,350) $ (23,923) Interest expense $ 15,138 $ 16,951 $ 22,601 Recapture incurred pursuant to refinancings by the Company of mortgage loans subject to excess servicing spread financing included in Net gains on mortgage loans held for sale at fair value $ 2,584 $ 4,820 $ 6,529 December 31, 2018 2017 (in thousands) Excess servicing spread financing at fair value $ 216,110 $ 236,534 Receivable from and Payable to PMT Amounts due from and payable to PMT are summarized below: December 31, December 31, 2018 2017 (in thousands) Receivable from PMT: Fulfillment fees $ 10,006 $ 346 Allocated expenses and expenses incurred on PMT's behalf 9,066 11,542 Management fees 6,559 5,901 Servicing fees 4,841 6,583 Correspondent production fees 2,071 1,735 Conditional Reimbursement 801 870 Interest on assets purchased under agreements to resell 120 142 $ 33,464 $ 27,119 Payable to PMT: Deposits made by PMT to fund servicing advances $ 100,554 $ 132,844 Mortgage servicing rights recapture payable 179 282 Other 3,898 3,872 $ 104,631 $ 136,998 Investment Funds The Investment Funds were dissolved during 2018. Before their dissolution, the Company had investment management agreements with the Investment Funds pursuant to which it received management fees consisting of base management fees and Carried Interest. The management fees were based on the lesser of the funds’ net asset values or aggregate capital contributions. The base management fees accrued at annual rates ranging from 1.5% to 2.0% of the applicable amounts on which they were based. The Company recognized Carried Interest as a participation in the profits in the Investment Funds after the investors in the Investment Funds had achieved a preferred return as defined in the fund agreements. The Carried Interest that the Company recognized from the Investment Funds was determined by the Investment Funds’ performance and its contractual rights to share in the Investments Funds’ returns in excess of the preferred returns, if any, accruing to the funds’ investors. After the investors achieved the preferred returns specified in the respective fund agreements, a “catch up” return accrued to the Company until it received a specified percentage of the preferred return. Thereafter, the Company participated in returns in excess of the preferred return at the rates specified in the fund agreements. The Company also had loan servicing agreements with the Investment Funds. The loan servicing provided by the Company under the loan servicing agreements with the Investment Funds included collecting principal, interest and escrow account payments, if any, with respect to mortgage loans, as well as managing loss mitigation, which included, among other things, collection activities, loan workouts, modifications, foreclosures and short sales. The Company also engaged in certain loan origination activities that included refinancing Investment Fund mortgage loans and arranging financings that facilitated sales of REOs. The loan servicing agreements with the Investment Funds generally provided for fee revenue, which varied depending on the type and quality of the loans being serviced. The Company was also entitled to certain customary market-based fees and charges. Carried interest and amounts due from the Investment Funds are included in Other assets, and amounts payable to the Investment Funds are included in Accounts payable and accrued expenses , respectively, as of December 31, 2017 and are summarized below: December 31, 2017 (in thousands) Carried Interest due from Investment Funds: PNMAC Mortgage Opportunity Fund, LLC $ 6,389 PNMAC Mortgage Opportunity Fund Investors, LLC 2,163 $ 8,552 Receivable from Investment Funds: Mortgage loan servicing fee rebate deposit $ 300 Management fees 88 Expense reimbursements 27 Mortgage loan servicing fees 2 $ 417 Payable to Investment Funds: Deposits received to fund servicing advances $ 2,329 Other 98 $ 2,427 Exchanged Private National Mortgage Acceptance Company, LLC Unitholders The Company assumed a tax receivable agreement with certain former owners of PennyMac that provides for the payment from time to time by the Company to PennyMac’s exchanged unitholders an amount equal to 85% of the amount of the net tax benefits, if any, that the Company is deemed to realize as a result of (i) increases in tax basis of PennyMac’s assets resulting from such unitholders’ exchanges and (ii) certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. Although the Company’s Reorganization in 2018 eliminated the potential for unitholders to exchange any additional units subject to this tax receivable agreement, the Company continues to be subject to the agreement and will be required to make payments when applicable for units exchanged before the Reorganization. Following is a summary of activity in Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement : Year ended December 31, 2018 2017 2016 (in thousands) Activity during the year: Liability resulting from unit exchanges $ 3,652 $ 7,723 $ 2,190 Payments under tax receivable agreement $ — $ (6,726) $ — Repricing of liability (1) $ (1,126) $ (32,940) $ (551) Balance at end of year $ 46,537 $ 44,011 $ 75,954 (1) A reduction of $32.0 million in the payable to exchanged PennyMac unitholders under the tax receivable agreement in 2017 was the result of the change in the federal corporate tax rate to 21% from the previous maximum of 35% under Tax Cuts and Jobs Act of 2017 (“the Tax Act”).

Loan Sales and Servicing Activi

Loan Sales and Servicing Activities	12 Months Ended
	Dec. 31, 2018
Loan Sales and Servicing Activities
Loan Sales and Servicing Activities	Note 5—Loan Sales and Servicing Activities The Company originates or purchases and sells mortgage loans in the secondary mortgage market without recourse for credit losses. However, the Company maintains continuing involvement with the mortgage loans in the form of servicing arrangements and the liability under representations and warranties it makes to purchasers and insurers of the mortgage loans. The following table summarizes cash flows between the Company and transferees as a result of the sale of mortgage loans in transactions where the Company maintains continuing involvement as servicer with the mortgage loans: Year ended December 31, 2018 2017 2016 (in thousands) Cash flows: Sales proceeds $ 44,557,560 $ 50,235,245 $ 49,633,909 Servicing fees received (1) $ 488,483 $ 376,160 $ 261,163 Net servicing advances $ 28,557 $ 52,353 $ 8,274 (1) Net of guarantee fees paid to the Agencies The following table summarizes the UPB of the mortgage loans sold by the Company in which it maintains continuing involvement: December 31, 2018 2017 (in thousands) Unpaid principal balance of mortgage loans outstanding $ 145,224,596 $ 120,853,138 Delinquencies: 30-89 days $ 6,222,864 $ 5,097,688 90 days or more: Not in foreclosure $ 2,208,083 $ 2,303,114 In foreclosure $ 720,894 $ 606,744 Foreclosed $ 24,243 $ 30,310 Bankruptcy $ 970,329 $ 657,368 The following tables summarize the UPB of the Company’s mortgage loan servicing portfolio: December 31, 2018 Contract Total Servicing servicing and mortgage rights owned subservicing loans serviced (in thousands) Investor: Non-affiliated entities: Originated $ 145,224,596 $ — $ 145,224,596 Purchased 56,990,486 — 56,990,486 202,215,082 — 202,215,082 PennyMac Mortgage Investment Trust — 94,658,154 94,658,154 Mortgage loans held for sale 2,420,636 — 2,420,636 $ 204,635,718 $ 94,658,154 $ 299,293,872 Subserviced for the Company (1) $ 414,219 $ — $ 414,219 Delinquent mortgage loans: 30 days $ 6,677,179 $ 525,989 $ 7,203,168 60 days 1,983,381 113,238 2,096,619 90 days or more: Not in foreclosure 3,102,492 217,115 3,319,607 In foreclosure 1,027,493 127,025 1,154,518 Foreclosed 33,493 176,377 209,870 $ 12,824,038 $ 1,159,744 $ 13,983,782 Bankruptcy $ 1,415,106 $ 107,083 $ 1,522,189 Custodial funds managed by the Company (2) $ 3,033,658 $ 970,328 $ 4,003,986 (1) Certain of the mortgage loans for which the Company has purchased the MSRs are subserviced on the Company’s behalf by other mortgage loan servicers on an interim basis when servicing of the loans has not yet been transferred to the Company’s operating platform. (2) Custodial funds include cash accounts holding funds on behalf of borrowers and investors relating to mortgage loans serviced under servicing agreements and are not recorded on the Company’s consolidated balance sheets. The Company earns placement fees on certain of the custodial funds it manages on behalf of the mortgage loans’ investors, which are included in Interest income in the Company’s consolidated statements of income. December 31, 2017 Contract Total Servicing servicing and mortgage rights owned subservicing loans serviced (in thousands) Investor: Non-affiliated entities: Originated $ 120,853,138 $ — $ 120,853,138 Purchased 47,016,708 — 47,016,708 167,869,846 — 167,869,846 Advised Entities — 74,980,268 74,980,268 Mortgage loans held for sale 2,998,377 — 2,998,377 $ 170,868,223 $ 74,980,268 $ 245,848,491 Delinquent mortgage loans: 30 days $ 5,326,710 $ 515,922 $ 5,842,632 60 days 1,935,216 215,957 2,151,173 90 days or more: Not in foreclosure 3,690,159 541,945 4,232,104 In foreclosure 916,614 293,835 1,210,449 Foreclosed 41,244 278,890 320,134 $ 11,909,943 $ 1,846,549 $ 13,756,492 Bankruptcy $ 1,046,969 $ 176,324 $ 1,223,293 Custodial funds managed by the Company (1) $ 3,267,279 $ 901,041 $ 4,168,320 (1) Custodial funds include cash accounts holding funds on behalf of borrowers and investors relating to mortgage loans serviced under servicing agreements and are not recorded on the Company’s consolidated balance sheets. The Company earns placement fees on certain of the custodial funds it manages on behalf of the mortgage loans’ investors, which are included in Interest income in the Company’s consolidated statements of income. Following is a summary of the geographical distribution of mortgage loans included in the Company’s servicing portfolio for the top five and all other states as measured by UPB: December 31, December 31, State 2018 2017 (in thousands) California $ 51,377,441 $ 45,621,369 Texas 23,648,042 19,741,970 Florida 22,650,926 17,490,194 Virginia 19,011,950 16,210,673 Maryland 13,774,011 11,350,939 All other states 168,831,502 135,433,346 $ 299,293,872 $ 245,848,491

Fair Value

Fair Value	12 Months Ended
	Dec. 31, 2018
Fair Value
Fair Value	Note 6—Fair Value Most of the Company’s assets and certain of its liabilities are measured at or based on their fair values. The application of fair value may be on a recurring or nonrecurring basis depending on the accounting principles applicable to the specific asset or liability and whether the Company has elected to carry the item at its fair value as discussed in the following paragraphs. Fair Value Accounting Elections The Company identified its MSLs and all of its non-cash financial assets other than Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell , and, beginning January 1, 2018, all of it MSRs to be accounted for at fair value so changes in fair value will be reflected in income as they occur and more timely reflect the results of the Company’s performance. Management has also identified its ESS financing to be accounted for at fair value as a means of hedging the related MSRs’ fair value risk. Before January 1, 2018, originated MSRs backed by mortgage loans with initial interest rates of less than or equal to 4.5% were accounted for using the amortization method. Effective January 1, 2018, the Company elected to change the accounting for the classes of MSRs it had accounted for using the amortization method through December 31, 2017, to the fair value method as allowed in the Transfers and Servicing topic of the FASB’s ASC. The Company determined that a single accounting treatment across all currently existing classes of MSRs is consistent with lender valuation under its financing arrangements and simplifies the Company’s hedging activities. Assets and Liabilities Measured at Fair Value on a Recurring Basis Following is a summary of assets and liabilities that are measured at fair value on a recurring basis: December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Assets: Short-term investments $ 117,824 $ — $ — $ 117,824 Mortgage loans held for sale at fair value — 2,261,639 260,008 2,521,647 Derivative assets: Interest rate lock commitments — — 50,507 50,507 Repurchase agreement derivatives — — 26,770 26,770 Forward purchase contracts — 35,916 — 35,916 Forward sales contracts — 437 — 437 MBS put options — 720 — 720 MBS call options — 2,135 — 2,135 Put options on interest rate futures purchase contracts 866 — — 866 Call options on interest rate futures purchase contracts 5,965 — — 5,965 Total derivative assets before netting 6,831 39,208 77,277 123,316 Netting — — — (26,969) Total derivative assets 6,831 39,208 77,277 96,347 Investment in PennyMac Mortgage Investment Trust 1,397 — — 1,397 Mortgage servicing rights at fair value — — 2,820,612 2,820,612 $ 126,052 $ 2,300,847 $ 3,157,897 $ 5,557,827 Liabilities: Excess servicing spread financing payable to PennyMac Mortgage Investment Trust at fair value $ — $ — $ 216,110 $ 216,110 Derivative liabilities: Interest rate lock commitments — — 1,169 1,169 Forward purchase contracts — 215 — 215 Forward sales contracts — 26,762 — 26,762 Total derivative liabilities before netting — 26,977 1,169 28,146 Netting — — — (25,082) Total derivative liabilities — 26,977 1,169 3,064 Mortgage servicing liabilities at fair value — — 8,681 8,681 $ — $ 26,977 $ 225,960 $ 227,855 December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Assets: Short-term investments $ 170,080 $ — $ — $ 170,080 Mortgage loans held for sale at fair value — 2,316,892 782,211 3,099,103 Derivative assets: Interest rate lock commitments — — 60,012 60,012 Repurchase agreement derivatives — — 10,656 10,656 Forward purchase contracts — 4,288 — 4,288 Forward sales contracts — 2,101 — 2,101 MBS put options — 3,481 — 3,481 Put options on interest rate futures purchase contracts 3,570 — — 3,570 Call options on interest rate futures purchase contracts 938 — — 938 Total derivative assets before netting 4,508 9,870 70,668 85,046 Netting — — — (6,867) Total derivative assets 4,508 9,870 70,668 78,179 Investment in PennyMac Mortgage Investment Trust 1,205 — — 1,205 Mortgage servicing rights at fair value — — 638,010 638,010 $ 175,793 $ 2,326,762 $ 1,490,889 $ 3,986,577 Liabilities: Excess servicing spread financing payable to PennyMac Mortgage Investment Trust at fair value $ — $ — $ 236,534 $ 236,534 Derivative liabilities: Interest rate lock commitments — — 1,740 1,740 Forward purchase contracts — 1,272 — 1,272 Forward sales contracts — 7,031 — 7,031 Total derivative liabilities before netting — 8,303 1,740 10,043 Netting — — — (4,247) Total derivative liabilities — 8,303 1,740 5,796 Mortgage servicing liabilities at fair value — — 14,120 14,120 $ — $ 8,303 $ 252,394 $ 256,450 As shown above, certain of the Company’s mortgage loans held for sale, IRLCs, repurchase agreement derivatives, MSRs at fair value, ESS and MSLs are measured using Level 3 fair value inputs. Following are roll forwards of these items for each of the three years ended December 31, 2018 where significant Level 3 fair value inputs were used: Year ended December 31, 2018 Mortgage Net interest Repurchase Mortgage loans held rate lock agreement servicing for sale commitments (1) derivatives rights Total (in thousands) Assets: Balance, December 31, 2017 $ 782,211 $ 58,272 $ 10,656 $ 638,010 $ 1,489,149 Reclassification of mortgage servicing rights previously accounted for under the amortization method pursuant to adoption of the fair value method of accounting — — — 1,482,426 1,482,426 Balance, January 1, 2018 782,211 58,272 10,656 2,120,436 2,971,575 Purchases and issuances, net 2,972,042 195,974 49,725 237,803 3,455,544 Sales and repayments (1,360,667) — (31,907) — (1,392,574) Mortgage servicing rights resulting from mortgage loan sales — — — 591,757 591,757 Changes in fair value included in income arising from: Changes in instrument-specific credit risk 158 — — — 158 Other factors — 1,285 (1,704) (129,384) (129,803) 158 1,285 (1,704) (129,384) (129,645) Transfers from Level 3 to Level 2 (2,128,551) — — — (2,128,551) Transfers to real estate acquired in settlement of loans (5,185) — — — (5,185) Transfers of interest rate lock commitments to mortgage loans held for sale — (206,193) — — (206,193) Balance, December 31, 2018 $ 260,008 $ 49,338 $ 26,770 $ 2,820,612 $ 3,156,728 Changes in fair value recognized during the year relating to assets still held at December 31, 2018 $ (263) $ 49,338 $ — $ (129,384) $ (80,309) (1) For the purpose of this table, the IRLC asset and liability positions are shown net. Year ended December 31, 2018 Excess servicing Mortgage spread servicing financing liabilities Total (in thousands) Liabilities: Balance, December 31, 2017 $ 236,534 $ 14,120 $ 250,654 Issuance of excess servicing spread financing pursuant to a recapture agreement with PennyMac Mortgage Investment Trust 2,688 — 2,688 Accrual of interest 15,138 — 15,138 Repayments (46,750) — (46,750) Mortgage servicing liabilities resulting from mortgage loan sales — 7,601 7,601 Changes in fair value included in income 8,500 (13,040) (4,540) Balance, December 31, 2018 $ 216,110 $ 8,681 $ 224,791 Changes in fair value recognized during the year relating to liabilities still outstanding at December 31, 2018 $ 8,500 $ (13,040) $ (4,540) Year ended December 31, 2017 Mortgage Net interest Repurchase Mortgage loans held rate lock agreement servicing for sale commitments (1) derivatives rights Total (in thousands) Assets: Balance, December 31, 2016 $ 47,271 $ 59,391 $ — $ 515,925 $ 622,587 Purchases and issuances, net 2,928,249 302,389 10,986 183,850 3,425,474 Sales and repayments (1,339,580) — — — (1,339,580) Mortgage servicing rights resulting from mortgage loan sales — — — 24,471 24,471 Changes in fair value included in income arising from: Changes in instrument-specific credit risk (1,794) — — — (1,794) Other factors — 115,434 (330) (86,236) 28,868 (1,794) 115,434 (330) (86,236) 27,074 Transfers from Level 3 to Level 2 (851,935) — — — (851,935) Transfers of interest rate lock commitments to mortgage loans held for sale — (418,942) — — (418,942) Balance, December 31, 2017 $ 782,211 $ 58,272 $ 10,656 $ 638,010 $ 1,489,149 Changes in fair value recognized during the year relating to assets still held at December 31, 2017 $ (556) $ 58,272 $ (330) $ (86,236) $ (28,850) (1) For the purpose of this table, the IRLC asset and liability positions are shown net. Year ended December 31, 2017 Excess servicing Mortgage spread servicing financing liabilities Total (in thousands) Liabilities: Balance, December 31, 2016 $ 288,669 $ 15,192 $ 303,861 Issuance of excess servicing spread financing pursuant to a recapture agreement with PennyMac Mortgage Investment Trust 5,244 — 5,244 Accrual of interest 16,951 — 16,951 Repayments (54,980) — (54,980) Mortgage servicing liabilities resulting from mortgage loan sales — 17,229 17,229 Changes in fair value included in income (19,350) (18,301) (37,651) Balance, December 31, 2017 $ 236,534 $ 14,120 $ 250,654 Changes in fair value recognized during the year relating to liabilities still outstanding at December 31, 2017 $ (19,350) $ (18,301) $ (37,651) Year ended December 31, 2016 Mortgage Net interest Mortgage loans held rate lock servicing for sale commitments (1) rights Total (in thousands) Assets: Balance December 31, 2015 $ 48,531 $ 43,773 $ 660,247 $ 752,551 Purchases 1,608,627 — 146 1,608,773 Sales and repayments (1,202,621) — — (1,202,621) Interest rate lock commitments issued, net — 429,598 — 429,598 Mortgage servicing rights resulting from mortgage loan sales — — 17,319 17,319 Changes in fair value included in income arising from: Changes in instrument-specific credit risk 3,469 — — 3,469 Other factors — 143,867 (161,787) (17,920) 3,469 143,867 (161,787) (14,451) Transfers from Level 3 to Level 2 (410,735) — — (410,735) Transfers of interest rate lock commitments to mortgage loans held for sale — (557,847) — (557,847) Balance, December 31, 2016 $ 47,271 $ 59,391 $ 515,925 $ 622,587 Changes in fair value recognized during the year relating to assets still held at December 31, 2016 $ 936 $ 59,391 $ (161,787) $ (101,460) (1) For the purpose of this table, the IRLC asset and liability positions are shown net. Year ended December 31, 2016 Excess servicing Mortgage spread servicing financing liabilities Total (in thousands) Liabilities: Balance December 31, 2015 $ 412,425 $ 1,399 $ 413,824 Issuance of excess servicing spread financing pursuant to a recapture agreement with PennyMac Mortgage Investment Trust 6,603 — 6,603 Accrual of interest 22,601 — 22,601 Repayments (69,992) — (69,992) Settlement (59,045) — (59,045) Mortgage servicing liabilities resulting from mortgage loan sales — 14,991 14,991 Mortgage servicing liabilities assumed — 10,139 10,139 Changes in fair value included in income (23,923) (11,337) (35,260) Balance, December 31, 2016 $ 288,669 $ 15,192 $ 303,861 Changes in fair value recognized during the year relating to liabilities still outstanding at December 31, 2016 $ (16,713) $ (11,337) $ (28,050) The information used in the preceding roll forwards represents activity for any assets and liabilities measured at fair value on a recurring basis and identified as using “Level 3” significant fair value inputs at either the beginning or the end of the years presented. The Company had transfers among the fair value levels arising from transfers of IRLCs to mortgage loans held for sale at fair value upon purchase or funding of the respective mortgage loans and from the return to salability in the active secondary market of certain mortgage loans held for sale. Assets and Liabilities Measured at Fair Value under the Fair Value Option Net changes in fair values included in income for assets and liabilities carried at fair value as a result of management’s election of the fair value option by income statement line item are summarized below: Year ended December 31, 2018 2017 2016 Net Net gains on Net Net gains on Net Net gains on mortgage mortgage mortgage mortgage mortgage mortgage loan loans held loan loans held loan loans held servicing for sale at servicing for sale at servicing for sale at fees fair value Total fees fair value Total fees fair value Total (in thousands) Assets: Mortgage loans held for sale $ — $ 188,611 $ 188,611 $ — $ 426,092 $ 426,092 $ — $ 513,331 $ 513,331 Mortgage servicing rights (129,384) — (129,384) (86,236) — (86,236) (161,787) — (161,787) $ (129,384) $ 188,611 $ 59,227 $ (86,236) $ 426,092 $ 339,856 $ (161,787) $ 513,331 $ 351,544 Liabilities: Excess servicing spread financing at fair value payable to PennyMac Mortgage Investment Trust $ (8,500) $ — $ (8,500) $ 19,350 $ — $ 19,350 $ 23,923 $ — $ 23,923 Mortgage servicing liabilities 13,040 — 13,040 18,301 — 18,301 11,337 — 11,337 $ 4,540 $ — $ 4,540 $ 37,651 $ — $ 37,651 $ 35,260 $ — $ 35,260 Following are the fair value and related principal amounts due upon maturity of assets accounted for under the fair value option: December 31, 2018 December 31, 2017 Principal Principal amount amount Fair due upon Fair due upon value maturity Difference value maturity Difference (in thousands) Mortgage loans held for sale: Current through 89 days delinquent $ 2,324,203 $ 2,220,371 $ 103,832 $ 2,430,517 $ 2,326,772 $ 103,745 90 days or more delinquent: Not in foreclosure 143,631 144,011 (380) 614,329 614,357 (28) In foreclosure 53,813 56,254 (2,441) 54,257 57,248 (2,991) $ 2,521,647 $ 2,420,636 $ 101,011 $ 3,099,103 $ 2,998,377 $ 100,726 Assets Measured at Fair Value on a Nonrecurring Basis Following is a summary of assets that are measured at fair value on a nonrecurring basis: December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Real estate acquired in settlement of loans $ — $ — $ 2,150 $ 2,150 December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Mortgage servicing rights at lower of amortized cost or fair value $ — $ — $ 1,463,552 $ 1,463,552 Real estate acquired in settlement of loans — — 2,355 2,355 $ — $ — $ 1,465,907 $ 1,465,907 The following table summarizes the total net losses on assets measured at fair values on a nonrecurring basis: Year ended December 31, 2018 2017 2016 (in thousands) Mortgage servicing rights at lower of amortized cost or fair value $ — $ (6,853) $ (60,487) Real estate acquired in settlement of loans (75) (125) (86) $ (75) $ (6,978) $ (60,487) Fair Value of Financial Instruments Carried at Amortized Cost The Company’s Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell , Assets sold under agreements to repurchase , Mortgage loan participation purchase and sale agreements , Notes payable and Obligations under capital lease are carried at amortized cost. These assets and liabilities are classified as “Level 3” fair value items due to the Company’s reliance on unobservable inputs to estimate these instruments’ fair values. The Company has concluded that these assets and liabilities’ fair values approximate the carrying value other than the term notes due to their short terms and/or variable interest rates. The fair value of the term notes at December 31, 2018 and 2017, was $1.3 billion and $903.9 million, respectively. The fair value of term notes is estimated using a discounted cash flow approach using indications of market pricing spreads provided by non-affiliated brokers to develop an appropriate discount rate. Valuation Governance Most of the Company’s financial assets, and all of its MSRs, ESS, derivative liabilities and MSLs, are carried at fair value with changes in fair value recognized in current period income. Certain of the Company’s financial assets and all of its MSRs, ESS and MSLs are “Level 3” fair value assets and liabilities which require the use of unobservable inputs that are significant to the estimation of the items’ fair values. Unobservable inputs reflect the Company’s own judgments about the factors that market participants use in pricing an asset or liability, and are based on the best information available under the circumstances. Due to the difficulty in estimating the fair values of “Level 3” fair value assets and liabilities, management has assigned the responsibility for estimating the fair value of these items to specialized staff and subjects the valuation process to significant senior management oversight. The Company’s Financial Analysis and Valuation group (the “FAV group”) is the Company’s specialized staff responsible for estimating the fair values of “Level 3” fair value assets and liabilities other than IRLCs. With respect to the non-IRLC “Level 3” valuations, the FAV group reports to the Company’s senior management valuation committee, which oversees the valuations. The FAV group monitors the models used for valuation of the Company’s “Level 3” fair value assets and liabilities, including the models’ performance versus actual results, and reports those results to the Company’s senior management valuation committee. The Company’s senior management valuation committee includes the Company’s executive chairman, chief executive, chief financial, chief risk and deputy chief financial officers. The FAV group is responsible for reporting to the Company’s senior management valuation committee on the changes in the valuation of the non-IRLC “Level 3” fair value assets and liabilities, including major factors affecting the valuation and any changes in model methods and inputs. To assess the reasonableness of its valuations, the FAV group presents an analysis of the effect on the valuation of changes to the significant inputs to the models. The Company has assigned responsibility for developing IRLCs fair values to its Capital Markets Risk Management staff. The fair values developed by the Capital Markets Risk Management staff are reviewed by the Company’s Capital Markets Operations group. Valuation Techniques and Inputs Following is a description of the techniques and inputs used in estimating the fair values of “Level 2” and “Level 3” fair value assets and liabilities: Mortgage Loans Held for Sale Most of the Company’s mortgage loans held for sale at fair value are saleable into active markets and are therefore categorized as “Level 2” fair value assets. The fair values of “Level 2” fair value mortgage loans are determined using their quoted market or contracted selling price or market price equivalent. Certain of the Company’s mortgage loans held for sale are not saleable into active markets and are therefore categorized as “Level 3” fair value assets. Mortgage loans held for sale categorized as “Level 3” fair value assets include: · Certain delinquent government guaranteed or insured mortgage loans purchased by the Company from Ginnie Mae guaranteed pools in its mortgage loan servicing portfolio. The Company’s right to purchase delinquent government guaranteed or insured mortgage loans arises as the result of the borrower’s failure to make payments for at least three consecutive months preceding the month of repurchase by the Company and provides an alternative to the Company’s obligation to continue advancing principal and interest at the coupon rate of the related Ginnie Mae security. Such repurchased mortgage loans may be resold to investors and thereafter may be repurchased to the extent eligible for resale into a new Ginnie Mae guaranteed pool. Such eligibility for resale generally occurs when the repurchased mortgage loans become current either through the borrower’s reperformance or through completion of a modification of the mortgage loan’s terms. · Certain of the Company’s mortgage loans held for sale that become non-saleable into active markets due to identification of a defect by the Company or to the repurchase by the Company of a mortgage loan with an identified defect. The Company uses a discounted cash flow model to estimate the fair value of its “Level 3” fair value mortgage loans held for sale. The significant unobservable inputs used in the fair value measurement of the Company’s “Level 3” fair value mortgage loans held for sale are discount rates, home price projections, voluntary prepayment/resale speeds and total prepayment speeds. Significant changes in any of those inputs in isolation could result in a significant change to the mortgage loans’ fair value measurement. Increases in home price projections are generally accompanied by an increase in voluntary prepayment speeds. Following is a quantitative summary of key “Level 3” fair value inputs used in the valuation of mortgage loans held for sale at fair value: Key inputs (1) December 31, 2018 December 31, 2017 Discount rate: Range 2.8% – 9.2% 2.9% – 10.0% Weighted average 2.9% 2.9% Twelve-month projected housing price index change: Range 2.2% – 5.0% 3.1% – 5.6% Weighted average 3.5% 3.6% Voluntary prepayment / resale speed (2): Range 0.1% – 21.8% 0.2% – 72.2% Weighted average 20.1% 44.6% Total prepayment speed (3): Range 0.1% – 40.5% 0.2% – 75.2% Weighted average 37.7% 55.8% (1) Weighted average inputs are based on fair value of mortgage loans. (2) Voluntary prepayment/resale speed is measured using Life Voluntary Conditional Prepayment Rate (“CPR”). (3) Total prepayment speed is measured using Life Total CPR. Changes in fair value attributable to changes in instrument specific credit risk are measured by reference to the change in the respective mortgage loan’s delinquency status and performance history at year end from the later of the beginning of the year or acquisition date. Changes in fair value of mortgage loans held for sale are included in Net gains on mortgage loans held for sale at fair value in the Company’s consolidated statements of income. Derivative Financial Instruments Interest Rate Lock Commitments The Company categorizes IRLCs as a “Level 3” fair value asset or liability. The Company estimates the fair value of an IRLC based on quoted Agency MBS prices, its estimate of the fair value of the MSRs it expects to receive in the sale of the mortgage loans and the probability that the mortgage loan will fund or be purchased (the “pull-through rate”). The significant unobservable inputs used in the fair value measurement of the Company’s IRLCs are the pull-through rate and the MSR component of the Company’s estimate of the fair value of the mortgage loans it has committed to purchase. Significant changes in the pull-through rate or the MSR component of the IRLCs, in isolation, could result in significant changes in the IRLCs’ fair value measurement. The financial effects of changes in these inputs are generally inversely correlated as increasing interest rates have a positive effect on the fair value of the MSR component of IRLC fair value, but increase the pull-through rate for the mortgage loan principal and interest payment cash flow component, which has decreased in fair value. Changes in fair value of IRLCs are included in Net gains on mortgage loans acquired for sale at fair value and may be allocated to Net mortgage loan servicing fees – Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities as an economic hedge of the fair value of MSRs in the consolidated statements of income when IRLCs are included as a component of the Company’s MSR hedging strategy. Following is a quantitative summary of key unobservable inputs used in the valuation of IRLCs: Key inputs (1) December 31, 2018 December 31, 2017 Pull-through rate: Range 16.6% – 100% 25.0% – 100% Weighted average 84.1% 85.6% Mortgage servicing rights value expressed as: Servicing fee multiple: Range 1.5 – 5.5 1.4 – 5.8 Weighted average 3.8 4.0 Percentage of unpaid principal balance: Range 0.4% – 3.2% 0.3% – 3.0% Weighted average 1.5% 1.4% (1) Weighted average inputs are based on the committed amounts. Hedging Derivatives Fair value of exchange-traded hedging derivative financial instruments are categorized by the Company as “Level 1” fair value assets and liabilities. Fair value of hedging derivative financial instruments based on observable MBS prices or interest rate volatilities in the MBS market are categorized as “Level 2” fair value assets and liabilities. Changes in the fair value of hedging derivatives are included in Net gains on mortgage loans acquired for sale at fair value, or Net mortgage loan servicing fees – Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities , as applicable, in the consolidated statements of income. Repurchase Agreement Derivatives The Company has a master repurchase agreement that includes incentives for financing mortgage loans approved for satisfying certain consumer relief characteristics. These incentives are classified for financial reporting purposes as embedded derivatives and are accounted for separate from the master repurchase agreement. The Company classifies these derivatives as “Level 3” fair value assets. The significant unobservable inputs into the valuation of these derivative assets are the discount rate and the Company’s expected approval rate of the mortgage loans financed under the master repurchase agreement. The resulting ratio included in the Company’s fair value estimate was 97% at December 31, 2018. Mortgage Servicing Rights MSRs are categorized as “Level 3” fair value assets. The Company uses a discounted cash flow approach to estimate the fair value of MSRs. The key inputs used in the estimation of the fair value of MSRs include prepayment and default rates of the underlying mortgage loans, the applicable pricing spread (discount rate) and annual per-loan cost to service mortgage loans, all of which are unobservable. Significant changes to any of those inputs in isolation could result in a significant change in the MSR fair value measurement. Changes in these key inputs are not necessarily directly related. Recognized changes in the fair value of MSRs are included in Net mortgage loan servicing fees — Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities in the consolidated statements of income. Following are the key inputs, separated by the Company’s basis of accounting for the respective asset, used in determining the fair value of MSRs at the time of initial recognition, excluding MSR purchases: Year ended December 31, 2018 2017 2016 Fair Fair Amortized Fair Amortized value value cost value cost (Amount recognized and unpaid principal balance of underlying mortgage loans amounts in thousands) MSR and pool characteristics: Amount recognized $591,757 $24,471 $556,630 $17,319 $560,212 Unpaid principal balance of underlying mortgage loans $42,008,585 $2,316,539 $44,664,551 $1,452,779 $44,827,516 Weighted average servicing fee rate (in basis points) 36 31 31 33 30 Key inputs (1): Pricing spread (2): Range 5.8% – 16.4% 7.6% – 11.2% 7.6% – 15.2% 7.2% – 10.5% 7.2% – 14.4% Weighted average 9.9% 10.5% 10.7% 9.2% 9.5% Annual total prepayment speed (3): Range 3.9% – 61.8% 3.9% – 71.8% 3.4% – 47.6% 3.3% – 53.8% 2.8% – 50.9% Weighted average 10.8% 12.6% 9.1% 11.8% 9.0% Life (in years): Range 0.5 – 11.6 0.8 – 11.7 1.5 – 12.2 0.5 – 11.9 1.3 – 12.9 Weighted average 7.3 6.6 8.1 6.8 8.1 Per-loan annual cost of servicing: Range $78 – $99 $78 – $101 $79 – $101 $68 – $105 $68 – $106 Weighted average $91 $89 $89 $88 $89 (1) Weighted average inputs are based on UPB of the underlying mortgage loans. (2) Pricing spread represents a margin that is applied to a reference interest rate’s forward rate curve to develop periodic discount rates. The Company applies a pricing spread to the United States Dollar London Interbank Offered Rate (“LIBOR”) curve for purposes of discounting cash flows relating to MSRs. (3) Prepayment speed is measured using Life Total CPR. Following is a quantitative summary of key inputs, separated by the Company’s basis of accounting for the respective asset, used in the valuation and assessment for impairment of the Company’s MSRs at year end and the effect on the fair value from adverse changes in those inputs: December 31, 2018 December 31, 2017 Fair Fair Amortized value value cost (Carrying value, unpaid principal balance of underlying mortgage loans and effect on fair value amounts in thousands) MSR and pool characteristics: Carrying value $2,820,612 $638,010 $1,481,578 Unpaid principal balance of underlying mortgage loans $201,054,144 $51,883,539 $114,365,698 Weighted average note interest rate 4.0% 4.0% 3.8% Weighted average servicing fee rate (in basis points) 33 32 31 Key inputs (1): Pricing spread (2): Range 5.8% – 16.1% 7.6% – 14.1% 7.6% – 14.1% Weighted average 8.7% 9.8% 10.3% Effect on fair value of (3): 5% adverse change ($45,268) ($10,760) ($27,700) 10% adverse change ($89,073) ($21,155) ($54,376) 20% adverse change ($172,556) ($40,916) ($104,869) Prepayment speed (4): Range 8.4% – 32.6% 7.9% – 46.2% 7.4% – 44.1% Weighted average 9.9% 10.5% 9.7% Average life (in years): Range 1.5 – 7.9 1.2 – 7.8 2.0 – 8.3 Weighted average 7.2 6.6 7.5 Effect on fair value of (3): 5% adverse change ($47,687) ($10,809) ($23,544) 10% adverse change ($93,626) ($21,239) ($46,284) 20% adverse change ($180,623) ($41,038) ($89,514) Annual per-loan cost of servicing: Range $78 – $99 $78 – $97 $79 – $97 Weighted average $93 $89 $89 Effect on fair value of (3): 5% adverse change ($22,944) ($6,247) ($11,216) 10% adverse change ($45,888) ($12,494) ($22,431) 20% adverse change ($91,775) ($24,987) ($44,863) (1) Weighted average inputs are based on UPB of the underlying mortgage loans. (2) The Company applies a pricing spread to the United States Dollar LIBOR curve for purposes of discounting cash flows relating to MSRs. (3) For MSRs carried at fair value, an adverse change in one of the above-mentioned key inputs is expected to result in a reduction in fair value which would be recognized in income. For MSRs carried at lower of amortized cost or fair value, an adverse change in one of the above-mentioned key inputs may have resulted in recognition of MSR impairment. The extent of the recognized MSR impairment depended on the relationship of fair value to the carrying value of such MSRs immediately before the adverse change event. (4) Prepayment speed is measured using Life Total CPR. The preceding sensitivity analyses are limited in that they were performed as of a particular date; only contemplate the movements in the indicated inputs; do not incorporate changes to other inputs; are subject to the accuracy of the models and inputs used; and do not incorporate other factors that would affect the Company’s overall financial performance in such events, including operational adjustments made by management to account for changing circumstances. For these reasons, the preceding estimates should not be viewed as earnings forecasts. Excess Servicing Spread Financing at Fair Value The Company categorizes ESS as a “Level 3” fair value liability. Because the ESS is a claim to a portion of the cash flows from MSRs, the fair value measurement of the ESS is similar to that of MSRs. The Company uses the same discounted cash flow approach to measuring the ESS as it uses to measure MSRs except that certain inputs relating to the cost to service the mortgage loans underlying the MSR and certain ancillary income are not included as these cash flows do not accrue to the holder of the ESS. The key inputs used in the estimation of ESS fair value include pricing spread (discount rate) and prepayment speed. Significant changes to either of those inputs in isolation could result in a significant change in the fair value of ESS. Changes in these key inputs are not necessarily directly related. ESS is generally subject to fair value increases when mortgage interest rates increase. Increasing mortgage interest rates normally discourage mortgage refinancing activity. Decreased refinancing activity increases the life of the mortgage loans underlying the ESS, thereby increasing its fair value. Changes in the fair value of ESS are included in Net mortgage loan servicing fees—Change in fair value of excess servicing spread payable to PennyMac Mortgage Investment Trust. Following are the key inputs used in determining the fair value of ESS financing: December 31, December 31, 2018 2017 Carrying value (in thousands) $216,110 $236,534 ESS and pool characteristics: Unpaid principal balance of underlying mortgage loans (in thousands) $23,196,033 $27,217,199 Average servicing fee rate (in basis points) 34 34 Average excess servicing spread (in basis points) 19 19 Key inputs (1): Pricing spread (2): Range 2.8% – 3.2% 3.8% – 4.3% Weighted average 3.1% 4.1% Annualized prepayment speed (3): Range 8.2% – 29.5% 8.4% – 41.4% Weighted average 9.7% 10.8% Average life (in years): Range 1.6 – 7.6 1.4 – 7.7 Weighted average 6.8 6.5 (1) Weighted average inputs are based on UPB of the underlying mortgage loans. (2

Mortgage Loans Held for Sale at

Mortgage Loans Held for Sale at Fair Value	12 Months Ended
	Dec. 31, 2018
Mortgage Loans Held for Sale at Fair Value
Mortgage Loans Held for Sale at Fair Value	Note 7—Mortgage Loans Held for Sale at Fair Value Mortgage loans held for sale at fair value include the following: December 31, December 31, 2018 2017 (in thousands) Government-insured or guaranteed $ 2,116,126 $ 2,085,764 Conventional conforming 145,513 231,128 Purchased from Ginnie Mae pools serviced by the Company 250,585 777,300 Repurchased pursuant to representations and warranties 9,423 4,911 $ 2,521,647 $ 3,099,103 Fair value of mortgage loans pledged to secure: Assets sold under agreements to repurchase $ 1,923,857 $ 2,530,299 Mortgage loan participation purchase and sale agreements 555,001 551,688 $ 2,478,858 $ 3,081,987

Derivative Activities

Derivative Activities	12 Months Ended
	Dec. 31, 2018
Derivative Activities
Derivative Activities	Note 8—Derivative Activities Derivative Notional Amounts and Fair Value of Derivatives The Company had the following derivative financial instruments recorded on its consolidated balance sheets: December 31, 2018 December 31, 2017 Fair value Fair value Notional Derivative Derivative Notional Derivative Derivative Instrument amount assets liabilities amount assets liabilities (in thousands) Derivatives not designated as hedging instruments: Not subject to master netting arrangements: Interest rate lock commitments 2,805,400 $ 50,507 $ 1,169 3,654,955 $ 60,012 $ 1,740 Repurchase agreement derivatives 26,770 — 10,656 — Used for hedging purposes: Forward purchase contracts 6,657,026 35,916 215 4,920,883 4,288 1,272 Forward sales contracts 6,890,046 437 26,762 5,204,796 2,101 7,031 MBS put options 4,635,000 720 — 4,925,000 3,481 — MBS call options 1,450,000 2,135 — — — — Put options on interest rate futures purchase contracts 3,085,000 866 — 2,125,000 3,570 — Call options on interest rate futures purchase contracts 1,512,500 5,965 — 100,000 938 — Treasury futures purchase contracts 835,000 — — 100,000 — — Treasury futures sale contracts 1,450,000 — — — — — Interest rate swap futures purchase contracts 625,000 — — 1,400,000 — — Total derivatives before netting 123,316 28,146 85,046 10,043 Netting (26,969) (25,082) (6,867) (4,247) $ 96,347 $ 3,064 $ 78,179 $ 5,796 Deposits placed with derivative counterparties $ 1,887 $ 2,620 The following table summarizes notional amount activity for derivative contracts used in the Company’s hedging activities: Year ended December 31, 2018 Amount Amount beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts 4,920,883 184,780,152 (183,044,009) 6,657,026 Forward sale contracts 5,204,796 230,735,936 (229,050,686) 6,890,046 MBS put options 4,925,000 31,085,000 (31,375,000) 4,635,000 MBS call options — 14,325,000 (12,875,000) 1,450,000 Put options on interest rate futures purchase contracts 2,125,000 20,559,800 (19,599,800) 3,085,000 Call options on interest rate futures purchase contracts 100,000 4,387,500 (2,975,000) 1,512,500 Put options on interest rate futures sale contracts — 20,474,800 (20,474,800) — Call options on interest rate futures sale contracts — 2,100,000 (2,100,000) — Treasury futures purchase contracts 100,000 9,837,500 (9,102,500) 835,000 Treasury futures sale contracts — 11,213,800 (9,763,800) 1,450,000 Interest rate swap futures purchase contracts 1,400,000 1,510,000 (2,285,000) 625,000 Interest rate swap futures sales contracts — 2,285,000 (2,285,000) — Year ended December 31, 2017 Amount Amount beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts 12,746,191 181,761,564 (189,586,872) 4,920,883 Forward sale contracts 16,577,942 226,000,107 (237,373,253) 5,204,796 MBS put options 1,175,000 25,050,000 (21,300,000) 4,925,000 MBS call options 1,600,000 17,700,000 (19,300,000) — Put options on interest rate futures purchase contracts 1,125,000 11,360,000 (10,360,000) 2,125,000 Call options on interest rate futures purchase contracts 900,000 1,939,300 (2,739,300) 100,000 Put options on interest rate futures sale contracts — 10,010,000 (10,010,000) — Call options on interest rate futures sale contracts — 2,739,300 (2,739,300) — Treasury futures purchase contracts — 544,900 (444,900) 100,000 Treasury futures sale contracts — 444,900 (444,900) — Interest rate swap futures purchase contracts 200,000 2,100,000 (900,000) 1,400,000 Interest rate swap futures sales contracts — 900,000 (900,000) — Year ended December 31, 2016 Amount Amount beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts 5,254,293 210,412,697 (202,920,799) 12,746,191 Forward sale contracts 6,230,811 262,202,884 (251,855,753) 16,577,942 MBS put options 1,275,000 19,225,000 (19,325,000) 1,175,000 MBS call options — 1,600,000 — 1,600,000 Put options on interest rate futures purchase contracts 1,650,000 15,331,000 (15,856,000) 1,125,000 Call options on interest rate futures purchase contracts 600,000 5,687,500 (5,387,500) 900,000 Put options on interest rate futures sale contracts — 9,436,000 (9,436,000) — Call options on interest rate futures sale contracts — 550,000 (550,000) — Treasury futures purchase contracts — 585,800 (585,800) — Treasury futures sale contracts — 585,800 (585,800) — Interest rate swap futures purchase contracts — 400,000 (200,000) 200,000 Interest rate swap futures sales contracts — 200,000 (200,000) — Derivative Balances and Netting of Financial Instruments The Company has elected to present net derivative asset and liability positions, and cash collateral obtained from (or posted to) its counterparties when subject to a master netting arrangement that is legally enforceable on all counterparties in the event of default. The derivatives that are not subject to a master netting arrangement are IRLCs and repurchase agreement derivatives. Offsetting of Derivative Assets Following are summaries of derivative assets and related netting amounts. December 31, 2018 December 31, 2017 Gross Gross amount Net amount Gross Gross amount Net amount amount of offset in the of assets in the amount of offset in the of assets in the recognized consolidated consolidated recognized consolidated consolidated assets balance sheet balance sheet assets balance sheet balance sheet (in thousands) Derivatives not subject to master netting arrangements: Interest rate lock commitments $ 50,507 $ — $ 50,507 $ 60,012 $ — $ 60,012 Repurchase agreement derivatives 26,770 — 26,770 10,656 — 10,656 77,277 — 77,277 70,668 — 70,668 Derivatives subject to master netting arrangements: Forward purchase contracts 35,916 — 35,916 4,288 — 4,288 Forward sale contracts 437 — 437 2,101 — 2,101 MBS put options 720 — 720 3,481 — 3,481 MBS call options 2,135 — 2,135 — — — Put options on interest rate futures purchase contracts 866 — 866 3,570 — 3,570 Call options on interest rate futures purchase contracts 5,965 — 5,965 938 — 938 Netting (26,969) (26,969) — (6,867) (6,867) 46,039 (26,969) 19,070 14,378 (6,867) 7,511 $ 123,316 $ (26,969) $ 96,347 $ 85,046 $ (6,867) $ 78,179 Derivative Assets, Financial Instruments, and Cash Collateral Held by Counterparty The following table summarizes by significant counterparty the amount of derivative asset positions after considering master netting arrangements and financial instruments or cash pledged that do not meet the accounting guidance qualifying for netting. December 31, 2018 December 31, 2017 Gross amount not Gross amount not offset in the offset in the consolidated consolidated Net amount balance sheet Net amount balance sheet of assets in the Cash of assets in the Cash consolidated Financial collateral Net consolidated Financial collateral Net balance sheet instruments received amount balance sheet instruments received amount (in thousands) Interest rate lock commitments $ 50,507 $ — $ — $ 50,507 $ 60,012 $ — $ — $ 60,012 Deutsche Bank 26,770 — — 26,770 10,656 — — 10,656 RJ O'Brien 6,831 — — 6,831 4,508 — — 4,508 Wells Fargo Bank, N.A. 3,707 — — 3,707 — — — — Bank of America, N.A. 2,781 — — 2,781 — — — — Citibank, N.A. 2,488 — — 2,488 472 — — 472 JPMorgan Chase Bank, N.A. 1,399 — — 1,399 267 — — 267 Federal National Mortgage Association 456 — — 456 1,092 — — 1,092 Others 1,408 — — 1,408 1,172 — — 1,172 $ 96,347 $ — $ — $ 96,347 $ 78,179 $ — $ — $ 78,179 Offsetting of Derivative Liabilities and Financial Liabilities Following is a summary of net derivative liabilities and assets sold under agreements to repurchase and related netting amounts. Assets sold under agreements to repurchase do not qualify for netting. December 31, 2018 December 31, 2017 Net Net amount amount Gross Gross amount of liabilities Gross Gross amount of liabilities amount of offset in the in the amount of offset in the in the recognized consolidated consolidated recognized consolidated consolidated liabilities balance sheet balance sheet liabilities balance sheet balance sheet (in thousands) Derivatives not subject to master netting arrangements – Interest rate lock commitments $ 1,169 $ — $ 1,169 $ 1,740 $ — $ 1,740 Derivatives subject to a master netting arrangement: Forward purchase contracts 215 — 215 1,272 — 1,272 Forward sale contracts 26,762 — 26,762 7,031 — 7,031 Netting — (25,082) (25,082) — (4,247) (4,247) 26,977 (25,082) 1,895 8,303 (4,247) 4,056 Total derivatives 28,146 (25,082) 3,064 10,043 (4,247) 5,796 Assets sold under agreements to repurchase: Amount outstanding 1,935,200 — 1,935,200 2,380,866 — 2,380,866 Unamortized premiums and debt issuance costs, net (1,341) — (1,341) 672 — 672 1,933,859 — 1,933,859 2,381,538 — 2,381,538 $ 1,962,005 $ (25,082) $ 1,936,923 $ 2,391,581 $ (4,247) $ 2,387,334 Derivative Liabilities, Financial Instruments, and Collateral Held by Counterparty The following table summarizes by significant counterparty the amount of derivative liabilities and assets sold under agreements to repurchase after considering master netting arrangements and financial instruments or cash pledged that do not qualify under the accounting guidance for netting. All assets sold under agreements to repurchase are secured by sufficient collateral or have fair value that exceeds the liability amount recorded on the consolidated balance sheets. December 31, 2018 December 31, 2017 Gross amounts Gross amounts not offset in the not offset in the Net amount consolidated Net amount consolidated of liabilities balance sheet of liabilities balance sheet in the Cash in the Cash consolidated Financial collateral Net consolidated Financial collateral Net balance sheet instruments pledged amount balance sheet instruments pledged amount (in thousands) Interest rate lock commitments $ 1,169 $ — $ — $ 1,169 $ 1,740 $ — $ — $ 1,740 Credit Suisse First Boston Mortgage Capital LLC 691,030 (690,766) — 264 1,010,562 (1,010,320) — 242 Deutsche Bank 741,978 (741,978) — — 593,864 (593,864) — — Bank of America, N.A. 170,820 (170,820) — — 406,787 (406,355) — 432 BNP Paribas 149,675 (149,482) — 193 87,753 (87,753) — — Morgan Stanley Bank, N.A. 77,687 (77,687) — — 139,491 (138,983) — 508 JPMorgan Chase Bank, N.A. 54,326 (54,326) — — 90,442 (90,442) — — Royal Bank of Canada 35,181 (35,181) — — 24,835 (23,752) — 1,083 Citibank, N.A. 14,960 (14,960) — — 23,010 (23,010) — — Barclays Capital — — — — 6,387 (6,387) — — Others 1,438 — — 1,438 1,791 — — 1,791 $ 1,938,264 $ (1,935,200) $ — $ 3,064 $ 2,386,662 $ (2,380,866) $ — $ 5,796 Following are the gains (losses) recognized by the Company on derivative financial instruments and the income statement line items where such gains and losses are included: Year ended December 31, Derivative activity Income statement line 2018 2017 2016 (in thousands) Interest rate lock commitments Net gains on mortgage loans held for sale at fair value $ (8,934) $ (1,120) $ 15,618 Repurchase agreement derivatives Interest expense $ (1,704) $ (330) $ — Hedged item: Interest rate lock commitments and mortgage loans held for sale Net gains on mortgage loans held for sale at fair value $ 81,522 $ (21,255) $ 20,619 Mortgage servicing rights Net mortgage loan servicing fees – Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities $ (121,045) $ (37,855) $ 26,405

Mortgage Servicing Rights and M

Mortgage Servicing Rights and Mortgage Servicing Liabilities	12 Months Ended
	Dec. 31, 2018
Mortgage Servicing Rights and Mortgage Servicing Liabilities
Mortgage Servicing Rights and Mortgage Servicing Liabilities	Note 9—Mortgage Servicing Rights and Mortgage Servicing Liabilties Mortgage Servicing Rights Carried at Fair Value: The activity in MSRs carried at fair value is as follows: Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 638,010 $ 515,925 $ 660,247 Reclassification of mortgage servicing rights previously accounted for under the amortization method pursuant to adoption of the fair value method of accounting 1,482,426 — — Balance after reclassification 2,120,436 515,925 660,247 Additions: Purchases 237,803 183,850 146 Resulting from mortgage loan sales 591,757 24,471 17,319 829,560 208,321 17,465 Change in fair value due to: Changes in inputs used in valuation model (1) 174,458 (4,771) (80,244) Other changes in fair value (2) (303,842) (81,465) (81,543) Total change in fair value (129,384) (86,236) (161,787) Balance at end of year $ 2,820,612 $ 638,010 $ 515,925 December 31, 2018 2017 (in thousands) Fair value of mortgage servicing rights pledged to secure Assets sold under agreements to repurchase and Notes payable $ 2,807,333 $ 630,711 (1) Principally reflects changes in discount rate and prepayment speed inputs, primarily due to changes in market interest rates, and changes in expected borrower performance and servicer losses given default. (2) Represents changes due to realization of cash flows. Mortgage Servicing Rights Carried at Lower of Amortized Cost or Fair Value: The activity in MSRs carried at the lower of amortized cost or fair value is summarized below: Year ended December 31, 2018 2017 2016 (in thousands) Amortized cost: Balance at beginning of year $ 1,583,378 $ 1,206,694 $ 798,925 Transfer of mortgage servicing rights to mortgage servicing rights carried at fair value pursuant to adoption of the fair value method of accounting (1,583,378) — — Balance after reclassification — 1,206,694 798,925 Mortgage servicing rights resulting from mortgage loan sales — 556,630 560,212 Amortization — (179,946) (139,666) Application of valuation allowance to recognize other-than-temporary impairment — (12,777) Balance at end of year — 1,583,378 1,206,694 Valuation allowance: Balance at beginning of year (101,800) (94,947) (47,237) Reduction resulting from transfer of mortgage servicing rights to mortgage servicing rights carried at fair value pursuant to adoption of the fair value method of accounting 101,800 — — Balance after reclassification — (94,947) (47,237) Increase in valuation allowance — (6,853) (60,487) Application of valuation allowance to recognize other-than-temporary impairment — — 12,777 Balance at end of year — (101,800) (94,947) Mortgage servicing rights, net at end of year $ — $ 1,481,578 $ 1,111,747 Fair value of mortgage servicing rights at: Beginning of year $ 1,112,302 $ 766,345 End of year $ 1,482,426 $ 1,112,302 December 31, 2017 (in thousands) Fair value of mortgage servicing rights pledged to secure assets sold under agreements to repurchase and note payable $ 1,467,356 Mortgage Servicing Liabilities Carried at Fair Value: The activity in mortgage servicing liability carried at fair value is summarized below: Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 14,120 $ 15,192 $ 1,399 Mortgage servicing liabilities resulting from mortgage loan sales 7,601 17,229 14,991 Mortgage servicing liabilities assumed — — 10,139 Changes in fair value due to: Changes in valuation inputs used in valuation model (1) 10,787 6,526 5,264 Other changes in fair value (2) (23,827) (24,827) (16,601) Total change in fair value (13,040) (18,301) (11,337) Balance at end of year $ 8,681 $ 14,120 $ 15,192 (1) Principally reflects changes in expected borrower performance and servicer losses given default. (2) Represents changes due to realization of cash flows. Servicing fees relating to MSRs and MSLs are recorded in Net mortgage loan servicing fees—Loan servicing fees—From non-affiliates on the consolidated statements of income; late charges and other ancillary fees relating to MSRs and MSLs are recorded in Net mortgage loan servicing fees—Mortgage loan servicing fees—Ancillary and other fees on the Company’s consolidated statements of income. Such amounts are summarized below: Year ended December 31, 2018 2017 2016 (in thousands) Contractual servicing fees $ 585,101 $ 475,848 $ 385,633 Ancillary and other fees: Late charges 27,940 25,097 19,341 Other 6,276 4,603 4,706 $ 619,317 $ 505,548 $ 409,680

Furniture, Fixtures, Equipment

Furniture, Fixtures, Equipment and Building Improvements	12 Months Ended
	Dec. 31, 2018
Furniture, Fixtures, Equipment and Building Improvements
Furniture, fixtures, equipment and building improvements
Furniture, Fixtures, Equipment and Building Improvements	Note 10—Furniture, Fixtures, Equipment and Building Improvements Furniture, fixtures, equipment and building improvements is summarized below: December 31, 2018 2017 (in thousands) Furniture, fixtures, equipment and building improvements $ 55,251 $ 54,186 Less: Accumulated depreciation and amortization (21,877) (24,733) $ 33,374 $ 29,453 Fixed assets pledged to secure obligations under capital lease $ 16,281 $ 23,915 Depreciation and amortization expenses are summarized below: Year ended December 31, 2018 2017 2016 (in thousands) Depreciation and amortization expenses $ 9,500 $ 8,150 $ 6,842 Less: Depreciation and amortization allocated to PMT (1) — (1,396) (1,350) Depreciation and amortization expenses included in Occupancy and equipment $ 9,500 $ 6,754 $ 5,492 (1) The Company’s management agreement with PMT provides for allocation by the Company of certain common overhead costs to PMT. The Company adopted ASU 2014-09 using the modified retrospective method effective January 1, 2018, Adoption of ASU 2014-09 required the Company to include those reimbursements from PMT of $1.2 million in Other revenue starting January 1, 2018. Before adoption of ASU 2014-09, the Company included such reimbursements in the respective expense line items.

Capitalized Software

Capitalized Software	12 Months Ended
	Dec. 31, 2018
Capitalized Software
Long-lived asset disclosures
Capitalized Software	Note 11—Capitalized Software Capitalized software is summarized below: December 31, 2018 2017 (in thousands) Cost $ 45,039 $ 29,621 Less: Accumulated amortization (5,291) (3,892) $ 39,748 $ 25,729 Capitalized software pledged to secure obligation under capital lease $ 1,017 $ 1,568 Software amortization expense totaled $3.4 million, $1.6 million and $357,000 for the years ended December 31, 2018, 2017 and 2016, respectively. The Company recorded $0, $827,000 and $0 of impairment of capitalized software during the year ended December 31, 2018, 2017 and 2016, respectively.

Carried Interest Due from Inves

Carried Interest Due from Investment Funds	12 Months Ended
	Dec. 31, 2018
Carried Interest Due from Investment Funds
Carried Interest Due from Investment Funds	Note 12—Carried Interest Due from Investment Funds The activity in the Company’s Carried Interest due from Investment Funds, which were dissolved during the year ended December 31, 2018, is included in Other assets, and is summarized as follows: Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 8,552 $ 70,906 $ 69,926 Carried Interest recognized during the year (365) (1,040) 980 Cash received during the year (8,187) (61,314) — Balance at end of year $ — $ 8,552 $ 70,906 The Carried Interest that the Company recognized from the Investment Funds was determined by the Investment Funds’ performance and its contractual rights to share in the Investments Funds’ returns in excess of the preferred returns, if any, that accrued to the funds’ investors. The Company recognized Carried Interest as a participation in the profits in the Investment Funds after the investors in the Investment Funds achieved a preferred return as defined in the fund agreements. After the investors achieved the preferred returns specified in the respective fund agreements, a “catch up” return accrued to the Company until it received a specified percentage of the preferred return. Thereafter, the Company participated in future returns in excess of the preferred return at the rates specified in the fund agreements.

Borrowings

Borrowings	12 Months Ended
	Dec. 31, 2018
Borrowings
Borrowings	Note 13—Borrowings The borrowing facilities described throughout this Note 13 contain various covenants, including financial covenants governing the Company’s net worth, debt-to-equity ratio, profitability and liquidity. Management believes that the Company was in compliance with these covenants as of December 31, 2018. Assets Sold Under Agreements to Repurchase The Company has multiple borrowing facilities in the form of asset sales under agreements to repurchase. These borrowing facilities are secured by mortgage loans held for sale at fair value or participation certificates backed by MSRs. Eligible mortgage loans and participation certificates backed by MSRs are sold at advance rates based on the fair value (as determined by the lender) of the assets sold. Interest is charged at a rate based on the lender’s overnight cost of funds rate or on LIBOR depending on the terms of the respective agreements. Mortgage loans and MSRs financed under these agreements may be re-pledged by the lenders. Assets sold under agreements to repurchase are summarized below: Year ended December 31, 2018 2017 2016 (dollars in thousands) Average balance of assets sold under agreements to repurchase $ 1,626,729 $ 1,829,257 $ 1,438,181 Weighted average interest rate (1) 3.87 % 3.18 % 2.91 % Total interest expense (2) $ 22,463 $ 60,286 $ 49,791 Maximum daily amount outstanding $ 2,380,121 $ 3,022,656 $ 2,661,746 December 31, 2018 2017 (dollars in thousands) Carrying value: Unpaid principal balance $ 1,935,200 $ 2,380,866 Unamortized debt issuance premiums and costs, net (1,341) 672 $ 1,933,859 $ 2,381,538 Weighted average interest rate 4.22 % 3.24 % Available borrowing capacity (3): Committed $ 695,767 $ 316,503 Uncommitted 2,354,033 2,257,631 $ 3,049,800 $ 2,574,134 Fair value of assets securing repurchase agreements: Mortgage loans held for sale $ 1,923,857 $ 2,530,299 Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell $ 131,025 $ 144,128 Servicing advances (4) $ 162,895 $ 114,643 Mortgage servicing rights (4) $ 2,807,333 $ 2,098,067 Margin deposits placed with counterparties (5) $ 3,750 $ 3,750 (1) Excludes the effect of amortization of net premiums totaling $4 0.5 million and $1 .3 million, for the years ended December 31, 2018 and 2017, respectively; and debt issuance costs of $7.3 million for the year ended December 31, 2016. (2) In 2017, PFSI entered into a master repurchase agreement that provides the Company with incentives to finance mortgage loans approved for satisfying certain consumer relief characteristics as provided in the agreement. The Company included $48.1 million and $9.2 million of such incentives as a reduction in Interest expense during the year ended December 31, 2018 and 2017, respectively. The master repurchase agreement is subject to a rolling six-month term through August 21, 2019, unless terminated earlier at the option of the lender. The Company expects that it will cease to accrue the incentives under the repurchase agreement in the second quarter of 2019. (3) The amount the Company is able to borrow under asset repurchase agreements is tied to the fair value of unencumbered assets eligible to secure those agreements and the Company’s ability to fund the agreements’ margin requirements relating to the assets financed. (4) Beneficial interests in the Ginnie Mae MSRs and servicing advances are pledged to the Issuer Trust and together serve as the collateral backing the VFN, 2018-GT1 Notes and 2018-GT2 Notes described in Notes Payable . The VFN financing is included in Assets sold under agreements to repurchase and 2018-GT1 Notes and 2018-GT2 Notes are included in Notes payable on the Company's consolidated balance sheet. (5) Margin deposits are included in Other assets on the Company’s consolidated balance sheets. Following is a summary of maturities of outstanding advances under repurchase agreements by maturity date: Remaining maturity at December 31, 2018 Balance (dollars in thousands) Within 30 days $ 397,374 Over 30 to 90 days 1,397,080 Over 90 to 180 days 746 Over one to two years 140,000 Total assets sold under agreements to repurchase $ 1,935,200 Weighted average maturity (in months) 2.9 The amount at risk (the fair value of the assets pledged plus the related margin deposit, less the amount advanced by the counterparty and interest payable) relating to the Company’s assets sold under agreements to repurchase is summarized by counterparty below as of December 31, 2018: Weighted average maturity of advances under repurchase Counterparty Amount at risk agreement Facility maturity (in thousands) Credit Suisse First Boston Mortgage Capital LLC $ 1,416,794 April 26, 2020 April 26, 2020 Credit Suisse First Boston Mortgage Capital LLC $ 33,906 February 2, 2019 April 26, 2019 Deutsche Bank AG $ 53,901 March 16, 2019 June 30, 2019 Bank of America, N.A. $ 15,863 January 30, 2019 October 28, 2019 BNP Paribas $ 9,222 March 18, 2019 August 2, 2019 Morgan Stanley Bank, N.A. $ 5,825 March 7, 2019 August 23, 2019 JP Morgan Chase Bank, N.A. $ 5,286 March 3, 2019 October 11, 2019 Royal Bank of Canada $ 2,129 January 25, 2019 March 29, 2019 Citibank, N.A. $ 586 February 28, 2019 June 7, 2019 The Company is subject to margin calls during the period the agreements are outstanding and therefore may be required to repay a portion of the borrowings before the respective agreements mature if the fair value (as determined by the applicable lender) of the assets securing those agreements decreases. Mortgage Loan Participation Purchase and Sale Agreements Certain of the borrowing facilities secured by mortgage loans held for sale are in the form of mortgage loan participation purchase and sale agreements. Participation certificates, each of which represents an undivided beneficial ownership interest in mortgage loans that have been pooled with Fannie Mae, Freddie Mac or Ginnie Mae, are sold to a lender pending the securitization of the mortgage loans and sale of the resulting securities. A commitment to sell the securities resulting from the pending securitization between the Company and a non-affiliate is also assigned to the lender at the time a participation certificate is sold. The purchase price paid by the lender for each participation certificate is based on the trade price of the security, plus an amount of interest expected to accrue on the security to its anticipated delivery date, minus a present value adjustment, any related hedging costs and a holdback amount that is based on a percentage of the purchase price. The holdback amount is not required to be paid to the Company until the settlement of the security and its delivery to the lender. The mortgage loan participation and sale agreements are summarized below: Year ended December 31, 2018 2017 2016 (dollars in thousands) Average balance $ 248,539 $ 208,613 $ 268,416 Weighted average interest rate (1) 3.29 % 2.34 % 1.75 % Total interest expense $ 8,754 $ 5,496 $ 5,523 Maximum daily amount outstanding $ 722,611 $ 532,266 $ 1,268,871 (1) Excludes the effect of amortization of debt issuance costs totaling $588,000, $ 545,000 and $ 740,000 for the years ended December 31, 2018, 2017 and 2016, respectively. December 31, 2018 2017 (dollars in thousands) Carrying value: Unpaid principal balance $ 532,466 $ 527,706 Unamortized debt issuance costs (215) (311) $ 532,251 $ 527,395 Weighted average interest rate 3.77 % 2.81 % Fair value of mortgage loans pledged to secure mortgage loan participation purchase and sale agreements $ 555,001 $ 551,688 Notes Payable Term Notes On February 16, 2017, the Company, through the Issuer Trust, issued an aggregate principal amount of $400 million in Term Notes (the “2017-GT1 Notes”) to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). The 2017-GT1 Notes bore interest at a rate equal to one-month LIBOR plus 4.75% per annum. The 2017-GT1 Notes were scheduled to mature on February 25, 2020 or, if extended pursuant to the terms of the related indenture supplement, February 25, 2021 (unless earlier redeemed in accordance with their terms). On August 10, 2017, the Company, through the Issuer Trust, issued an aggregate principal amount of $500 million in Term Notes (the “2017-GT2 Notes”) to qualified institutional buyers under Rule 144A of the Securities Act. The 2017-GT2 Notes bore interest at a rate equal to one-month LIBOR plus 4.0% per annum. The 2017-GT2 Notes were scheduled to mature on August 25, 2022 or, if extended pursuant to the terms of the related indenture supplement, August 25, 2023 (unless earlier redeemed in accordance with their terms). On February 28, 2018, the Company, through the Issuer Trust, issued an aggregate principal amount of $650 million in Term Notes (the “2018-GT1 Notes”) to qualified institutional buyers under Rule 144A of the Securities Act. The 2018-GT1 Notes bear interest at a rate equal to one-month LIBOR plus 2.85% per annum. The 2018-GT1 Notes will mature on February 25, 2023 or, if extended pursuant to the terms of the related indenture supplement, February 25, 2025 (unless earlier redeemed in accordance with their terms). On February 28, 2018, in connection with its issuance of the 2018-GT1 Notes, the Company also redeemed all of the 2017-GT1 Notes previously issued by the Issuer Trust. The redemption amount for the 2017-GT1 Notes was $400 million plus all accrued and unpaid interest. As a result, the Company recognized the unamortized debt issuance cost of $3.4 million in Interest Expense . On August 10, 2018, the Company, through the Issuer Trust, issued an aggregate principal amount of $650 million in Term Notes (the “2018-GT2 Notes”) to qualified institutional buyers under Rule 144A of the Securities Act. The 2018-GT2 Notes bear interest at a rate equal to one-month LIBOR plus 2.65% per annum. The 2018-GT2 Notes will mature on August 25, 2023 or, if extended pursuant to the terms of the related indenture supplement, August 25, 2025 (unless earlier redeemed in accordance with their terms). On August 10, 2018, in connection with its issuance of the 2018-GT2 Notes, the Company also redeemed all of the 2017-GT2 Notes previously issued by the Issuer Trust. The redemption amount for the 2017-GT2 Notes was $500 million plus all accrued and unpaid interest. As a result, the Company recognized the unamortized debt issuance cost of $4.6 million in Interest Expense . All the Term Notes rank pari passu with each other and with the VFN issued by Issuer Trust to PLS and are secured by certain participation certificates relating to Ginnie Mae MSRs and ESS that are financed pursuant to the GNMA MSR Facility. Corporate Revolving Line of Credit On November 1, 2018, the Company, through its subsidiary, PennyMac (the “Borrower”), entered into amendments (the "Amendments") to that certain (i) amended and restated credit agreement, dated as of November 18, 2016, by and among the Borrower, the lenders that are parties thereto and Credit Suisse AG, as administrative agent and collateral agent, and Credit Suisse Securities (USA) LLC, as sole bookrunner and sole lead arranger (the “Credit Agreement”); and (ii) amended and restated collateral and guaranty agreement, dated as of November 18, 2016, by and among the Borrower, as grantor, Credit Suisse AG, Cayman Islands Branch (“CS Cayman”), as collateral agent, and PNMAC Holdings, Inc. (formerly known as PennyMac Financial Services, Inc.) and certain of its subsidiaries, PCM, PLS and PNMAC Opportunity Fund Associates, LLC (Associates), as guarantors and grantors (“the “Guaranty”). Pursuant to the Credit Agreement, the lenders have agreed to make revolving loans to the Borrower in an amount not to exceed $150 million. Interest on the loans shall accrue at a per annum rate of interest equal to, at the election of the Borrower, either LIBOR plus the applicable margin or an alternate base rate (as defined in the Credit Agreement). During the existence of certain events of default, interest shall accrue at a higher default rate. The proceeds of the loans are to be used solely for working capital and general corporate purposes of the Borrower and its subsidiaries. The primary purposes of the Amendments are to (i) extend the maturity date of the Credit Agreement to October 31, 2019; (ii) name the Company as an additional guarantor under the Credit Agreement; and (iii) release Associates from its obligations as a guarantor under the Credit Agreement. Accordingly, the obligations of the Borrower under the Credit Agreement are now guaranteed by PFSI, PNMAC Holdings, Inc., PCM and PLS, and secured by a grant by each of the referenced grantors of its respective right, title and interest in and to limited and otherwise unencumbered (other than specified permitted encumbrances) specified contract rights, specified deposit accounts, all documents and instruments related to such specified contract rights and specified deposit accounts, and any and all proceeds and products thereof. All other terms and conditions of the Credit Agreement and Guaranty remain the same in all material respects. MSR Note Payable During December 2015, the Company issued a note payable in favor of Barclays Bank PLC that was secured by Fannie Mae and Freddie Mac MSRs. Interest was charged at a rate based on LIBOR plus the applicable contract margin. The facility expired on February 1, 2018. On February 1, 2018, the Company issued a note payable in favor of CS Cayman that is secured by Fannie Mae and Freddie Mac MSRs. Interest is charged at a rate based on LIBOR plus the applicable contract margin. The facility expires on February 1, 2020. The maximum amount that the Company may borrow under the note payable is $400 million, less any amount outstanding under the agreement to repurchase pursuant to which the Company finances the VFN. The Company did not borrow under this note payable during the year ended December 31, 2018. Notes payable are summarized below: Year ended December 31, 2018 2017 2016 (dollars in thousands) Average balance $ 1,169,452 $ 586,135 $ 108,475 Weighted average interest rate (1) 5.29 % 5.86 % 5.13 % Total interest expense $ 73,610 $ 39,369 $ 8,688 Maximum daily amount outstanding $ 1,300,000 $ 900,006 $ 153,849 (1) Excluding the effect of amortization of debt issuance costs and non-utilization fees totaling $11. 7 million, $ 4.5 million and $ 3.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. December 31, 2018 2017 (dollars in thousands) Carrying value: Unpaid principal balance $ 1,300,000 $ 900,006 Unamortized debt issuance costs (7,709) (8,501) $ 1,292,291 $ 891,505 Weighted average interest rate 5.07 % 5.66 % Unused amount $ 150,000 $ 280,000 Assets pledged to secure notes payable: Cash $ 108,174 $ 20,765 Servicing advances (1) $ 162,895 $ 114,643 Mortgage servicing rights (1) $ 2,807,333 $ 2,098,067 Other assets ‒ Carried Interest $ — $ 8,552 (1) Beneficial interests in the Ginnie Mae MSRs and servicing advances are pledged to the Issuer Trust and together serve as the collateral backing the VFN, 2018-GT1 Notes and 2018-GT2 Notes. The VFN financing is included in Assets sold under agreements to repurchase and 2018-GT1 Notes and 2018-GT2 Notes are included in Notes payable on the Company's consolidated balance sheet. Obligations Under Capital Lease In December 2015, the Company entered into a capital lease transaction secured by certain fixed assets and capitalized software. The capital lease matures on March 23, 2020 and bears interest at a spread over one-month LIBOR. Obligations under capital lease are summarized below: Year ended December 31, 2018 2017 2016 (dollars in thousands) Average balance $ 13,498 $ 24,830 $ 18,620 Weighted average interest rate 3.96 % 3.07 % 2.47 % Total interest expense $ 536 $ 769 $ 510 Maximum daily amount outstanding $ 20,971 $ 30,044 $ 24,242 December 31, December 31, 2018 2017 (in thousands) Unpaid principal balance $ 6,605 $ 20,971 Weighted average interest rate 4.46 % 3.26 % Assets pledged to secure obligations under capital lease: Furniture, fixtures and equipment $ 16,281 $ 23,915 Capitalized software $ 1,017 $ 1,568 Excess Servicing Spread Financing at Fair Value In conjunction with the Company’s purchase from non-affiliates of certain MSRs on pools of Agency-backed residential mortgage loans, the Company has entered into sale and assignment agreements with PMT. Under these agreements, the Company sold to PMT the right to receive ESS cash flows relating to certain MSRs. The Company retained a fixed base servicing fee and all ancillary income associated with servicing the loans. The Company continues to be the servicer of the mortgage loans and retains all servicing obligations, including responsibility to make servicing advances. Following is a summary of ESS: Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 236,534 $ 288,669 $ 412,425 Issuances of excess servicing spread to PennyMac Mortgage Investment Trust pursuant to recapture agreement 2,688 5,244 6,603 Accrual of interest 15,138 16,951 22,601 Repayment (46,750) (54,980) (69,992) Settlement (1) — — (59,045) Change in fair value 8,500 (19,350) (23,923) Balance at end of year $ 216,110 $ 236,534 $ 288,669 (1) On February 29, 2016, the Company and PMT terminated that certain master spread acquisition and MSR servicing agreement that the parties entered into effective February 1, 2013 (the “2/1/2013 Spread Acquisition Agreement”) and all amendments thereto. In connection with the termination of 2/1/2013 Spread Acquisition Agreement, the Company reacquired from PMT all of its right, title and interest in and to all of the Fannie Mae ESS previously sold by the Company to PMT under the 2/1/2013 Spread Acquisition Agreement and then subject to such 2/1/2013 Spread Acquisition Agreement. On February 29, 2016, the Company also reacquired from PMT all of its right, title and interest in and to all of the Freddie Mac ESS previously sold to PMT by the Company.

Liability for Losses Under Repr

Liability for Losses Under Representations and Warranties	12 Months Ended
	Dec. 31, 2018
Liability for Losses Under Representations and Warranties
Liability for Losses Under Representations and Warranties	Note 14—Liability for Losses Under Representations and Warranties Following is a summary of the Company’s liability for losses under representations and warranties: Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 20,053 $ 19,067 $ 20,611 Provision for losses on mortgage loans sold: Resulting from sales of mortgage loans 5,824 5,890 7,090 Reduction in liability due to change in estimate (4,672) (4,301) (7,672) Incurred losses, net (50) (603) (962) Balance at end of year $ 21,155 $ 20,053 $ 19,067 Unpaid principal balance of mortgage loans subject to representations and warranties at end of year $ 137,849,704 $ 120,855,101

Income Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2018
Income Taxes
Income Taxes	Note 15—Income Taxes The Company files U.S. federal and state corporate income tax returns for PFSI and partnership returns for PennyMac. The Company’s federal tax returns are subject to examination for 2015 and forward and its state tax returns are generally subject to examination for 2014 and forward. PennyMac’s federal partnership returns are subject to examination for 2015 and forward, and its state tax returns are generally subject to examination for 2014 and forward. No returns are currently under examination. As a result of the Reorganization, the Company recorded through equity a net deferred tax liability attributable to the noncontrolling interest in the amount of $320.5 million. Beginning from November 1, 2018, the Company’s income subject to the corporate federal and state statutory rates will include the portion of its income formerly attributed to the conversion of the noncontrolling interest. As a result, the Company expects an increase in the effective tax rate. The Reorganization is to be treated as an integrated transaction that qualifies as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code and/or a transfer described in Section 351(a) of the Internal Revenue Code. PFSI received a ruling from the California Franchise Tax Board in November 2018 which allows the Company to apply a reduced California statutory rate of 8.84% compared to the 10.84% rate previously applied by the Company. As a result, the Company recorded a tax benefit of $8.5 million due to remeasurement of deferred tax assets and tax liabilities. The Company’s tax expense for the year ended December 31, 2017 was significantly impacted by the Tax Act. The Tax Act reduces the U.S. federal corporate tax rate to 21% from the previous maximum rate of 35%, effective January 1, 2018. Other than the change in the applicable federal rate, the changes introduced by the Tax Act did not have a significant impact on the 2018 tax expense. In the fourth quarter of 2017, the Company recorded a tax benefit of $13.7 million due to a re-measurement of deferred tax assets and liabilities resulting from a decrease in the federal tax rate . The re-measurement of the deferred tax assets and liabilities is predominantly based on a reduction to the federal rate as described above which will result in lower tax expense when these deferred tax assets and liabilities are realized. Revaluation of the deferred tax asset resulting from PennyMac unitholder exchanges under the tax receivable agreement resulted in the repricing of the Company’s corresponding liability under the tax receivable agreement. The Company recorded a reduction of $32.0 million in the Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under the tax receivable agreement for the year ended December 31, 2017 as a result of the Tax Act. The following table details the Company’s income tax expense: Year ended December 31, 2018 2017 2016 (in thousands) Current expense: Federal $ 12 $ (81) $ (1,622) State 274 56 (244) Total current expense 286 (25) (1,866) Deferred expense: Federal 23,395 14,674 38,082 State (427) 9,738 9,887 Total deferred expense 22,968 24,412 47,969 Total provision for income taxes $ 23,254 $ 24,387 $ 46,103 As the result of the Company’s reclassification of the noncontrolling interest to paid-in capital pursuant to the Reorganization on November 1, 2018, the liability for deferred taxes for the year ended December 31, 2018 reflects each individual adjustment item in the underlying investment in PennyMac. The provision for deferred income taxes for the years ended December 31, 2017, and 2016 primarily relates to the Company’s investment in PennyMac partially offset by the Company’s generation and utilization of a net operating loss and generation of tax credits. The portion attributable to its investment in PennyMac primarily relates to MSRs that PennyMac received pursuant to sales of mortgage loans held for sale at fair value and Carried Interest from the Investment Funds. The following table is a reconciliation of the Company’s provision for income taxes at statutory rates to the provision for income taxes at the Company’s effective tax rate: Year ended December 31, 2018 2017 2016 Federal income tax statutory rate % % 35.0 % Less: Income attributable to noncontrolling interest (12.3) % (22.0) % (24.8) % State income taxes, net of federal benefit % % 1.6 % Tax rate revaluation (2.2) % (8.0) % % Other (0.1) % % 0.2 % Effective tax rate % % % The components of the Company’s provision for deferred income taxes are as follows: Year ended December 31, 2018 2017 2016 (in thousands) Mortgage servicing rights $ 46,064 $ — $ — Investment in PennyMac — 34,011 40,493 Net operating loss (14,902) (9,675) 8,110 Compensation accruals (3,596) — — Reserves and losses (1,848) — — Additional tax basis in partnership from exchanges of partnership units into the Company's common stock (1,391) — — Other (1,302) — — Tax credits (57) 76 (634) Total provision for deferred income taxes $ 22,968 $ 24,412 $ 47,969 The components of Income taxes payable are as follows: December 31, 2018 2017 (in thousands) Taxes currently payable (receivable) $ 218 $ (2,126) Deferred income tax liability, net 400,328 54,286 Income taxes payable $ 400,546 $ 52,160 The tax effects of temporary differences that gave rise to deferred income tax assets and liabilities are presented below: December 31, 2018 2017 (in thousands) Deferred income tax assets: Additional tax basis in partnership from exchanges of partnership units into the Company's common stock $ 44,165 $ — Compensation accruals 28,752 — Reserves and losses 26,589 — Net operating loss carryforward 25,104 10,202 Tax credits carryforward 616 558 Gross deferred tax assets 125,226 10,760 Deferred income tax liabilities: Mortgage servicing rights 517,042 — Investment in PennyMac — 65,046 Other 8,512 — Gross deferred tax liabilities 525,554 65,046 Net deferred income tax liability $ 400,328 $ 54,286 The Company recorded a deferred tax asset of $25.1 million related to a net operating loss of approximately $93.5 million. For federal income tax purposes, as it relates to net operating loss carryforwards, $1.3 million arising in 2015 expires in 2035, $35.2 million arising in 2017 expires in 2037, and $57.0 million arising in 2018 has no expiration date. Net operating losses arising in tax years beginning after December 31, 2017 are limited in annual use to 80% of taxable income (without regard to net operating loss deduction) but can be carried forward indefinitely. For state income tax purposes, net operating losses arising in years 2015, 2017, and 2018 generally expire in 2035, 2037, and 2038, respectively. The Company has tax credits of $0.6 million, which generally have no expiration date. At December 31, 2018 and 2017, the Company had no unrecognized tax benefits and does not anticipate any unrecognized tax benefits. Should the recognition of any interest or penalties relative to unrecognized tax benefits be necessary, it is the Company’s policy to record such expenses in the Company’s income tax accounts. No such accruals existed at December 31, 2018 and 2017.

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Dec. 31, 2018
Commitments and Contingencies.
Commitments and Contingencies	Note 16—Commitments and Contingencies Litigation The Company is a party to legal proceedings and potential claims arising in the ordinary course of our business. The amount, if any, of ultimate liability with respect to such matters cannot be determined, but despite the inherent uncertainties of litigation, management believes that the ultimate disposition of such proceedings and exposure will not have a material adverse impact on the financial condition, results of operations, or cash flows of the Company. Regulatory Matters The Company and/or its subsidiaries are subject to various state and federal regulations related to its loan production and servicing operations by the various states it operates in as well as federal agencies such as the Consumer Financial Protection Bureau, HUD, the Federal Housing Administration as well as subject to the requirements of the Agencies it sells loans to and performs loan servicing for. As the result, the Company may become involved in information-gathering requests, reviews, investigations and proceedings (both formal and informal) by the various federal, state and local regulatory bodies. Commitments to Purchase and Fund Mortgage Loans The Company’s commitments to purchase and fund mortgage loans totaled $2.8 billion as of December 31, 2018. Leases The Company leases office facilities. Rent expense during the years ended December 31, 2018, 2017 and 2016 was $12.3 million, $12.3 million and $9.1 million, respectively. The following table provides a summary of future minimum lease payments required under lease agreements, which may also contain renewal options as of December 31, 2018: Year ended December 31, Future minimum lease payments (in thousands) 2019 $ 15,586 2020 15,664 2021 14,693 2022 12,107 2023 11,155 Thereafter 24,495 $ 93,700

Stockholders' Equity

Stockholders' Equity	12 Months Ended
	Dec. 31, 2018
Stockholders' Equity.
Stockholders' Equity	Note 17—Stockholders’ Equity In June 2017, the Company’s board of directors authorized a stock repurchase program under which the Company may repurchase up to $50 million of its outstanding common stock. The following table summarizes the Company’s stock repurchase activity: Year ended December 31, Cumulative 2018 2017 total (1) (in thousands) Shares of common repurchased 260 505 765 Cost of shares of common stock repurchased $ 5,293 $ 8,599 $ 13,892 (1) Amounts represent the total shares common stock repurchased under the stock repurchase program through December 31, 2018. The shares of repurchased common stock were canceled upon settlement of the repurchase transactions and returned to the authorized but unissued common stock pool.

Noncontrolling Interest

Noncontrolling Interest	12 Months Ended
	Dec. 31, 2018
Noncontrolling Interest.
Noncontrolling Interest	Note 18—Noncontrolling Interest As a result of the Reorganization on November 1, 2018, noncontrolling interest unitholders contributed their Class A units of PNMAC for shares of PFSI common stock without any cash considerations on a one-for-one basis and became stockholders of the Company. Consequently, the noncontrolling interest was reclassified to the Company’s paid-in capital accounts. Net income attributable to the Company’s common stockholders and the effects of changes in noncontrolling ownership interest in PennyMac for each of the three years ended December 31, 2018 is summarized below: Year ended December 31, 2018 2017 2016 (in thousands) Net income attributable to PennyMac Financial Services, Inc. common stockholders $ 87,694 $ 100,757 $ 66,079 Increase in the Company's paid-in capital accounts for exchanges of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc. $ 33,156 $ 27,119 $ 6,877 Shares of Class A common stock of PennyMac Financial Services, Inc. issued pursuant to exchange of Class A units of Private National Mortgage Acceptance Company, LLC by noncontrolling interest unitholders and issued as equity compensation 1,635 1,608 301 Increase in the Company's paid-in capital for exchanges of Class A units of Private National Mortgage Acceptance Company, LLC to common stock of PennyMac Financial Services, Inc. pursuant to the Reorganization $ 1,064,320 $ — $ — Shares of common stock of PennyMac Financial Services, Inc. issued for exchange of Class A units of Private National Mortgage Acceptance Company, LLC by noncontrolling interest unitholders pursuant to the Reorganization 52,263 — — December 31, 2018 2017 Percentage of Private National Mortgage Acceptance Company, LLC held by noncontrolling interest — % 69.2 %

Net Gains on Mortgage Loans Hel

Net Gains on Mortgage Loans Held for Sale	12 Months Ended
	Dec. 31, 2018
Net Gains on Mortgage Loans Held for Sale
Net Gains on Mortgage Loans Held for Sale	Note 19—Net Gains on Mortgage Loans Held for Sale Net gains on mortgage loans held for sale at fair value is summarized below: Year ended December 31, 2018 2017 2016 (in thousands) From non-affiliates: Cash loss: Mortgage loans $ (469,647) $ (174,669) $ (62,283) Hedging activities 93,288 (16,866) 10,275 (376,359) (191,535) (52,008) Non-cash gain: Mortgage servicing rights and mortgage servicing liabilities resulting from mortgage loan sales 584,156 563,872 562,540 Provision for losses relating to representations and warranties: Pursuant to mortgage loan sales (5,824) (5,890) (7,090) Reduction in liability due to change in estimate 4,672 4,301 7,672 Change in fair value relating to mortgage loans and derivatives held at year end: Interest rate lock commitments (8,934) (1,120) 15,618 Mortgage loans (1,506) 4,576 2,796 Hedging derivatives (11,766) (4,389) 10,344 184,439 369,815 539,872 From PennyMac Mortgage Investment Trust 64,583 21,989 (8,092) $ 249,022 $ 391,804 $ 531,780

Net Interest Income (Expense)

Net Interest Income (Expense)	12 Months Ended
	Dec. 31, 2018
Net Interest Income (Expense)
Net Interest Income (Expense)	Note 20—Net Interest Income (Expense) Net interest income (expense) is summarized below: Year ended December 31, 2018 2017 2016 (in thousands) Interest income: From non-affiliates: Short-term investments $ 2,038 $ 2,356 $ 2,558 Mortgage loans held for sale at fair value 128,732 91,972 54,584 Placement fees relating to custodial funds 78,184 40,813 16,155 208,954 135,141 73,297 From PennyMac Mortgage Investment Trust—Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell 7,462 8,038 7,830 216,416 143,179 81,127 Interest expense: To non-affiliates: Assets sold under agreements to repurchase (1) 22,463 60,286 49,791 Mortgage loan participation purchase and sale agreements 8,754 5,496 5,523 Notes payable 73,610 39,369 8,688 Obligations under capital lease 536 769 510 Interest shortfall on repayments of mortgage loans serviced for Agency securitizations 18,777 16,933 15,102 Interest on mortgage loan impound deposits 5,319 4,716 3,991 129,459 127,569 83,605 To PennyMac Mortgage Investment Trust—Excess servicing spread financing at fair value 15,138 16,951 22,601 144,597 144,520 106,206 $ 71,819 $ (1,341) $ (25,079) (1) In 2017, the Company entered a master repurchase agreement that provides the Company with incentives to finance mortgage loans approved for satisfying certain consumer relief characteristics as provided in the agreement. During the years ended December 31, 2018 and 2017, the Company included $48.1 million and $9.2 million, respectively of such incentives as a reduction in Interest expense . The master repurchase agreement is subject to a rolling six-month term through August 21, 2019, unless terminated earlier at the option of the lender. The Company expects that it will cease to accrue the incentives under the repurchase agreement in the second quarter of 2019.

Stock-based Compensation

Stock-based Compensation	12 Months Ended
	Dec. 31, 2018
Stock-based Compensation
Stock-based Compensation	Note 21—Stock‑based Compensation The Company’s 2013 Equity Incentive Plan provides for grants of stock options, time-based and performance-based restricted stock units (“RSUs”), stock appreciation rights, performance units and stock grants. As of December 31, 2018, the Company has 3.9 million units available for future awards. Following is a summary of the stock-based compensation expense by instrument awarded: Year ended December 31, 2018 2017 2016 (in thousands) Performance-based RSUs $ 12,425 $ 11,020 $ 9,475 Time-based RSUs 6,608 4,768 2,494 Stock options 6,218 4,909 4,464 Exchangeable PNMAC units — — 72 $ 25,251 $ 20,697 $ 16,505 Performance‑Based RSUs The performance‑based RSUs provide for the issuance of shares of the Company’s common stock based on the attainment of earnings per share and/or return on equity and are generally adjusted for grantee job performance ratings. The satisfaction of the performance goals and issuance of shares will be approved by a committee of the Company’s board of directors. Approximately 649,000 shares vested under the grants with a performance period ended December 31, 2018 will be issued to the grantees in March 2019. The fair value of the performance‑based RSUs is measured based on the fair value of the Company’s common stock at the grant date, taking into consideration management’s estimate of the expected outcome of the performance goal, and the number of shares to be forfeited during the vesting period. The Company assumes forfeiture rates of 0 ‑ 23.2% per year based on the grantees’ employee classification. The actual number of shares that vest could vary from zero, if the performance goals are not met, to as much as 130% of the units granted, if the performance goals are meaningfully exceeded. The table below summarizes performance‑based RSU activity: Year ended December 31, 2018 2017 2016 (in thousands, except per unit amounts) Number of units: Outstanding at beginning of year 2,389 2,475 2,350 Granted 524 694 813 Vested (1) (730) (446) — Forfeited or cancelled (291) (334) (688) Outstanding at end of year 1,892 2,389 2,475 Weighted average grant date fair value per unit: Outstanding at beginning of year $ 15.57 $ 14.24 $ 16.30 Granted $ 24.40 $ 18.04 $ 11.28 Vested $ 12.86 $ 13.65 $ — Forfeited $ 16.17 $ 14.45 $ 16.87 Outstanding at end of year $ 14.48 $ 15.57 $ 14.24 Compensation expense recorded during the year $ 12,425 $ 11,020 $ 9,475 (1) The actual number of performance-based RSUs vested during the year ended December 31, 2018 was 774,000 shares, which is approximately 106% of the 730,000 originally granted units due to the performance goals exceeding the established target. Following is a summary of performance-based RSUs as of December 31, 2018: Unamortized compensation cost (in thousands) $ 5,805 Number of shares expected to vest (in thousands) 1,784 Weighted average remaining vesting period (in months) 11 Time‑Based RSUs The RSU grant agreements provide for the award of time‑based RSUs, entitling the award recipient to one share of the Company’s common stock for each RSU. One‑third of the time‑based RSUs vest on each of the first, second, and third anniversaries of the grant date, subject to the recipient’s continued service through each anniversary. Compensation cost relating to time‑based RSUs is based on the grant date fair value of the Company’s common stock and the number of shares expected to vest. For purposes of estimating the cost of the time‑based RSUs granted, the Company assumes forfeiture rates of 0 ‑ 23.2% per year based on the grantees’ employee classification. The table below summarizes time‑based RSU activity: Year ended December 31, 2018 2017 2016 (in thousands, except per unit amounts) Number of units: Outstanding at beginning of year 600 382 271 Granted 328 408 261 Vested (254) (173) (127) Forfeited (47) (17) (23) Outstanding at end of year 627 600 382 Weighted average grant date fair value per unit: Outstanding at beginning of year $ 16.37 $ 13.71 $ 17.81 Granted $ 24.25 $ 18.02 $ 11.77 Vested $ 16.08 $ 14.66 $ 17.99 Forfeited $ 19.40 $ 14.87 $ 15.55 Outstanding at end of year $ 20.39 $ 16.37 $ 13.71 Compensation expense recorded during the year $ 6,608 $ 4,768 $ 2,494 Following is a summary of RSUs as of December 31, 2018: Unamortized compensation cost (in thousands) $ 4,158 Number of units expected to vest (in thousands) 579 Weighted average remaining vesting period (in months) 11 Stock Options The stock option award agreements provide for the award of stock options to purchase the optioned common stock. In general, and except as otherwise provided by the agreement, one‑third of the stock option awards vests on each of the first, second, and third anniversaries of the grant date, subject to the recipient’s continued service through each anniversary. Each stock option has a term of ten years from the date of grant but expires (1) immediately upon termination of the holder’s employment or other association with the Company for cause, (2) one year after the holder’s employment or other association is terminated due to death or disability and (3) three months after the holder’s employment or other association is terminated for any other reason. The fair value of each stock option award is estimated on the date of grant using a variant of the Black Scholes model based on the following inputs: Year ended December 31, 2018 2017 2016 Expected volatility (1) 30% 31% 28% Expected dividends 0% 0% 0% Risk-free interest rate 1.7% - 3.0% 0.8% - 2.7% 0.3% - 2.1% Expected grantee forfeiture rate 0.0% - 23.2% 0.0% - 21.1% 0.0% - 20.2% (1) Based on historical volatilities of the Company’s common stock. The Company uses its historical employee departure behavior to estimate the grantee forfeiture rates used in its option‑pricing model. The expected term of common stock options granted is derived from the Company’s option pricing model and represents the period that common stock options granted are expected to be outstanding. The risk‑free interest rate for periods within the contractual term of the common stock option is based on the U.S. Treasury yield curve in effect at the time of grant. The table below summarizes stock option award activity: Year ended December 31, 2018 2017 2016 (in thousands, except per option amounts) Number of stock options: Outstanding at beginning of year 3,457 2,738 1,845 Granted 674 861 962 Exercised (322) (90) (9) Forfeited (116) (52) (60) Outstanding at end of year 3,693 3,457 2,738 Weighted average exercise price per option: Outstanding at beginning of year $ 16.40 $ 15.81 $ 18.17 Granted $ 24.40 $ 18.05 $ 11.29 Exercised $ 16.24 $ 15.04 $ 17.33 Forfeited $ 18.46 $ 15.58 $ 15.66 Outstanding at end of year $ 17.81 $ 16.40 $ 15.81 Compensation expense recorded during the year $ 6,218 $ 4,909 $ 4,464 Following is a summary of stock options as of December 31, 2018: Number of options exercisable at end of year (in thousands) 2,235 Weighted average exercise price per exercisable option $ 16.69 Weighted average remaining contractual term (in years): Outstanding 7.0 Exercisable 6.0 Aggregate intrinsic value: Outstanding (in thousands) $ 14,764 Exercisable (in thousands) $ 10,207 Expected vesting amounts: Number of options expected to vest (in thousands) 1,368 Weighted average vesting period (in months) 10

Earnings Per Share of Common St

Earnings Per Share of Common Stock	12 Months Ended
	Dec. 31, 2018
Earnings Per Share of Common Stock
Earnings Per Share of Common Stock	Note 22—Earnings Per Share of Common Stock Basic earnings per share of common stock is determined using net income attributable to the Company’s common stockholders divided by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share of common stock is determined by dividing net income attributable to the Company’s common stockholders by the weighted average number of shares of common stock outstanding, assuming all dilutive shares of common stock were issued. Potentially dilutive shares of common stock include non-vested stock-based compensation awards and PennyMac Class A units. The Company applies the treasury stock method to determine the diluted weighted average shares of common stock outstanding based on the outstanding non-vested stock-based compensation awards. As a result of the Reorganization on November 1, 2018, all Class A units of PNMAC converted for shares of PFSI common stock on a one-for-one basis. The following table summarizes the basic and diluted earnings per share calculations: Year ended December 31, 2018 2017 2016 (in thousands, except per share data) Basic earnings per share of common stock: Net income attributable to common stockholders $ 87,694 $ 100,757 $ 66,079 Weighted average shares of common stock outstanding 33,524 23,199 22,161 Basic earnings per share of common stock $ 2.62 $ 4.34 $ 2.98 Diluted earnings per share of common stock: Net income attributable to common stockholders $ 87,694 $ 100,757 $ 66,079 Net income attributable to dilutive stock-based compensation units 3,868 — — Net income attributable to PennyMac Class A units exchangeable to Class A common stock, net of income taxes — — 159,570 Net income attributable to common stockholders for diluted earnings per share $ 91,562 $ 100,757 $ 225,649 Weighted average shares of common stock outstanding applicable to basic earnings per share 33,524 23,199 22,161 Effect of dilutive shares: Common shares issuable under stock-based compensation plan 1,798 1,800 517 PennyMac Class A units exchangeable to Class A common stock — — 53,951 Weighted average shares of common stock applicable to diluted earnings per share 35,322 24,999 76,629 Diluted earnings per share of common stock $ 2.59 $ 4.03 $ 2.94 Calculations of diluted earnings per share require certain potentially dilutive shares to be excluded when their inclusion in the diluted earnings per share calculation would be anti-dilutive. The following table summarizes the anti-dilutive weighted-average number of outstanding performance-based RSUs, time-based RSUs, stock options and Exchangeable PNMAC Class A units excluded from the calculation of diluted earnings per share: Year ended December 31, 2018 2017 2016 (in thousands, except exercise price data) Performance-based RSUs (1) 1,084 497 2,054 Time-based RSUs 3 — — Stock options (2) 740 1,323 1,829 Exchangeable PNMAC Class A units (3) 43,700 53,299 — Total anti-dilutive stock-based compensation and PNMAC Class A units 45,527 55,119 3,883 Weighted average exercise price of anti-dilutive stock options (2) $ 17.81 $ $ (1) Certain performance-based RSUs were outstanding but not included in the computation of earnings per share because the performance thresholds included in such RSUs have not been achieved. (2) Certain stock options were outstanding but not included in the computation of diluted earnings per share because the weighted-average exercise prices were above the average stock prices during the year. (3) Exchangeable PNMAC units were anti-dilutive during 2017 primarily due to the effect of adoption of the Tax Act on earnings attributable to PNMAC unitholders.

Supplemental Cash Flow Informat

Supplemental Cash Flow Information	12 Months Ended
	Dec. 31, 2018
Supplemental Cash Flow Information
Supplemental Cash Flow Information	Note 23—Supplemental Cash Flow Information Year ended December 31, 2018 2017 2016 (in thousands) Cash paid for interest $ 161,001 $ 158,147 $ 104,938 (Refunds received) cash paid for income taxes, net $ (2,059) $ (5,513) $ 1,866 Non-cash investing activity: Mortgage servicing rights resulting from mortgage loan sales $ 591,757 $ 581,101 $ 577,531 Mortgage servicing liabilities resulting from mortgage loan sales $ 7,601 $ 17,229 $ 14,991 Unsettled portion of MSR acquisitions $ 10,139 $ 5,319 $ — Refinancing of Note receivable from PennyMac Mortgage Investment Trust as Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell pledged to creditors $ — $ — $ 150,000 Non-cash financing activity: Issuance of Excess servicing spread payable to PennyMac Mortgage Investment Trust pursuant to a recapture agreement $ 2,688 $ 5,244 $ 6,603 Unpaid distribution to Private National Mortgage Acceptance Company, LLC members $ — $ — $ 7,585 Issuance of Class A common stock and common stock in settlement of director fees $ 330 $ 338 $ 313

Regulatory Capital and Liquidit

Regulatory Capital and Liquidity Requirements	12 Months Ended
	Dec. 31, 2018
Regulatory Capital and Liquidity Requirements
Regulatory Capital and Liquidity Requirements	Note 24—Regulatory Capital and Liquidity Requirements The Company, through PLS and PennyMac, is required to maintain specified levels of “Capital” to remain a seller/servicer in good standing with the Agencies. Such “Capital” requirements generally are tied to the size of the Company’s loan servicing portfolio or loan origination volume. The Company is subject to financial eligibility requirements for sellers/servicers eligible to sell or service mortgage loans with Fannie Mae and Freddie Mac. The eligibility requirements include tangible net worth of $2.5 million plus 25 basis points of the Company’s total 1-4 unit servicing portfolio, excluding mortgage loans subserviced for others and a liquidity requirement equal to 3.5 basis points of the aggregate UPB serviced for the Agencies plus 200 basis points of total nonperforming Agency servicing UPB in excess of 600 basis points. The Company is also subject to financial eligibility requirements for Ginnie Mae single-family issuers. The eligibility requirements include net worth of $2.5 million plus 35 basis points of PLS' outstanding Ginnie Mae single-family obligations and a liquidity requirement equal to the greater of $1.0 million or 10 basis points of PLS' outstanding Ginnie Mae single-family securities. The Agencies’ capital and liquidity requirements, the calculations of which are specified by each Agency, are summarized below: December 31, 2018 December 31, 2017 Agency–company subject to requirement Actual (1) Requirement (1) Actual (1) Requirement (1) (dollars in thousands) Capital Fannie Mae & Freddie Mac – PLS $ 1,788,430 $ 514,089 $ 1,561,977 $ 429,671 Ginnie Mae – PLS $ 1,535,826 $ 733,342 $ 1,307,580 $ 674,133 Ginnie Mae – PennyMac $ 1,786,430 $ 806,676 $ 1,511,201 $ 741,574 HUD – PLS $ 1,535,826 $ 2,500 $ 1,307,580 $ 2,500 Liquidity Fannie Mae & Freddie Mac – PLS $ 271,802 $ 70,775 $ 196,415 $ 58,754 Ginnie Mae – PLS $ 271,802 $ 189,592 $ 196,415 $ 153,431 Tangible net worth / Total assets ratio Fannie Mae & Freddie Mac – PLS 21 % 6 % % % (1) Calculated in compliance with the respective Agency’s requirements. Noncompliance with an Agency’s requirements can result in such Agency taking various remedial actions up to and including terminating PennyMac’s ability to sell loans to and service loans on behalf of the respective Agency.

Segments

Segments	12 Months Ended
	Dec. 31, 2018
Segments
Segments	Note 25—Segments The Company operates in three segments: production, servicing and investment management. Two of the segments are in the mortgage banking business: production and servicing. The production segment performs mortgage loan origination, acquisition and sale activities. The servicing segment performs servicing of newly originated mortgage loans, execution and management of early buyout transactions and servicing of mortgage loans sourced and managed by the investment management segment for PMT, including executing the loan resolution strategy identified by the investment management segment relating to distressed mortgage loans. The investment management segment represents the activities of the Company’s investment manager, which include sourcing, performing diligence, bidding and closing investment asset acquisitions, managing correspondent production activities for PMT and managing the acquired assets for PMT. Financial performance and results by segment are as follows: Year ended December 31, 2018 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenue: (1) Net mortgage loan servicing fees $ — $ 445,393 $ 445,393 $ — $ 445,393 Net gains on mortgage loans held for sale at fair value 141,959 107,063 249,022 — 249,022 Mortgage loan origination fees 101,641 — 101,641 — 101,641 Fulfillment fees from PennyMac Mortgage Investment Trust 81,350 — 81,350 — 81,350 Net interest income (expense): Interest income 66,408 149,992 216,400 16 216,416 Interest expense 7,371 137,177 144,548 49 144,597 59,037 12,815 71,852 (33) 71,819 Management fees — — — 24,469 24,469 Carried Interest from Investment Funds — — — (365) (365) Other 2,008 2,650 4,658 5,516 10,174 Total net revenue 385,995 567,921 953,916 29,587 983,503 Expenses 298,729 395,619 694,348 22,584 716,932 Income before provision for income taxes and non-segment activities 87,266 172,302 259,568 7,003 266,571 Non-segment activities (2) — — — — 1,126 Income before provision for income taxes $ 87,266 $ 172,302 $ 259,568 $ 7,003 $ 267,697 Segment assets at year end (3) $ 2,434,897 $ 5,031,920 $ 7,466,817 $ 11,681 $ 7,478,498 (1) All revenues are from external customers. (2) Represents repricing of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement . (3) Excludes non-segment assets, which consist of working capital of $75,000. Year ended December 31, 2017 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenue: (1) Net mortgage loan servicing fees $ — $ 306,059 $ 306,059 $ — $ 306,059 Net gains on mortgage loans held for sale at fair value 286,242 105,562 391,804 — 391,804 Mortgage loan origination fees 119,202 — 119,202 — 119,202 Fulfillment fees from PennyMac Mortgage Investment Trust 80,359 — 80,359 — 80,359 Net interest income (expense): Interest income 61,195 81,984 143,179 — 143,179 Interest expense 35,359 109,112 144,471 49 144,520 25,836 (27,128) (1,292) (49) (1,341) Management fees — — — 23,585 23,585 Carried Interest from Investment Funds — — — (1,040) (1,040) Other 2,002 1,710 3,712 183 3,895 Total net revenue 513,641 386,203 899,844 22,679 922,523 Expenses 275,133 327,531 602,664 16,890 619,554 Income before provision for income taxes and non-segment activities 238,508 58,672 297,180 5,789 302,969 Non-segment activities (2) — — — — 32,940 Income before provision for income taxes $ 238,508 $ 58,672 $ 297,180 $ 5,789 $ 335,909 Segment assets at year end (3) $ 2,459,014 $ 4,886,594 $ 7,345,608 $ 19,880 $ 7,365,488 (1) All revenues are from external customers (2) Primarily represents repricing of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement , of which $32.0 million is the result of the change in the federal tax rate under the Tax Act. (3) Excludes parent company assets, which consist primarily of working capital of $2.6 million. Year ended December 31, 2016 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenues: (1) Net mortgage loan servicing fees $ — $ 185,466 $ 185,466 $ — $ 185,466 Net gains on mortgage loans held for sale at fair value 464,027 67,753 531,780 — 531,780 Mortgage loan origination fees 125,534 — 125,534 — 125,534 Fulfillment fees from PennyMac Mortgage Investment Trust 86,465 — 86,465 — 86,465 Net interest income (expense): Interest income 48,944 32,182 81,126 1 81,127 Interest expense 32,669 73,537 106,206 50 106,256 16,275 (41,355) (25,080) (49) (25,129) Management fees — — — 22,746 22,746 Carried Interest from Investment Funds — — — 980 980 Other 2,104 1,022 3,126 319 3,445 Total net revenue 694,405 212,886 907,291 23,996 931,287 Expenses 278,309 248,985 527,294 21,510 548,804 Income before provision for income taxes and non-segment activities 416,096 (36,099) 379,997 2,486 382,483 Non-segment activities (2) — — — — 600 Income before provision for income taxes $ 416,096 $ (36,099) $ 379,997 $ 2,486 $ 383,083 Segment assets at year end (3) $ 2,195,330 $ 2,841,551 $ 5,036,881 $ 91,517 $ 5,128,398 (1) All revenues are from external customers. (2) Represents Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement . (3) Excludes parent Company assets, which consist primarily of working capital of $5.5 million

Selected Quarterly Data (Unaudi

Selected Quarterly Data (Unaudited)	12 Months Ended
	Dec. 31, 2018
Selected Quarterly Data (Unaudited)
Selected Quarterly Data (Unaudited)	Note 26—Selected Quarterly Data (Unaudited) Following is a presentation of selected quarterly financial data: Quarter ended 2018 2017 Dec. 31 Sept. 30 June. 30 Mar. 31 Dec. 31 Sept. 30 June. 30 Mar. 31 (in thousands, except per share data) During the quarter: Net mortgage loan servicing fees $ 105,212 $ 109,703 113,689 $ 116,789 $ 106,902 $ 78,081 $ 46,913 $ 74,163 Net gains on mortgage loans held for sale at fair value 59,748 56,914 60,946 71,414 98,621 108,136 98,091 86,956 Mortgage loan origination fees 26,165 26,485 24,428 24,563 30,267 33,168 30,193 25,574 Fulfillment fees from PennyMac Mortgage Investment Trust 28,591 26,256 14,559 11,944 19,175 23,507 21,107 16,570 Other income 31,485 31,571 30,676 13,491 43,669 7,743 5,417 1,210 251,201 250,929 244,298 238,201 298,634 250,635 201,721 204,473 Expenses 192,895 189,232 169,600 165,205 176,861 156,491 143,761 142,441 Income before provision for income taxes 58,306 61,697 74,698 72,996 121,773 94,144 57,960 62,032 Provision for income taxes 5,346 5,545 6,293 6,070 (2,125) 11,652 7,214 7,646 Net income 52,960 56,152 68,405 66,926 123,898 82,492 50,746 54,386 Less: Net income attributable to noncontrolling interest 14,211 41,663 50,568 50,307 61,580 65,411 40,267 43,507 Net income attributable to PennyMac Financial Services, Inc. common stockholders $ 38,749 $ 14,489 $ 17,837 $ 16,619 $ 62,318 $ 17,081 $ 10,479 $ 10,879 Earnings per share of common stock: Basic $ 0.65 $ 0.58 $ 0.71 $ 0.70 $ 2.67 $ 0.73 $ 0.45 $ 0.48 Diluted $ 0.63 $ 0.57 $ 0.70 $ 0.67 $ 2.44 $ 0.71 $ 0.44 $ 0.47 At quarter end: Mortgage loans held for sale $ 2,521,647 $ 2,416,955 $ 2,527,231 $ 2,584,236 $ 3,099,103 $ 2,935,593 $ 3,037,602 $ 2,277,751 Mortgage servicing rights 2,820,612 2,785,964 2,486,157 2,354,489 2,119,588 2,016,485 1,951,599 1,725,061 Servicing advances, net 313,197 259,609 258,900 284,145 318,066 262,650 291,907 317,513 Mortgage loans eligible for repurchase 1,102,840 889,335 879,621 1,018,488 1,208,195 584,394 462,487 318,378 Other assets 720,277 640,667 689,797 661,533 623,141 589,247 661,143 612,674 Total assets $ 7,478,573 $ 6,992,530 $ 6,841,706 $ 6,902,891 $ 7,368,093 $ 6,388,369 $ 6,404,738 $ 5,251,377 Short-term debt $ 2,332,143 $ 2,222,385 $ 2,264,041 $ 2,336,826 $ 2,922,542 $ 2,640,743 $ 3,311,029 $ 2,331,357 Long-term debt 1,648,973 1,566,672 1,473,188 1,380,358 1,135,401 1,151,545 671,789 690,476 Liability for mortgage loans eligible for repurchase 1,102,840 889,335 879,621 1,018,488 1,208,195 584,394 462,487 318,378 Other liabilities 740,826 397,428 362,912 373,020 382,281 421,396 448,181 453,571 Total liabilities 5,824,782 5,075,820 4,979,762 5,108,692 5,648,419 4,798,078 4,893,486 3,793,782 Total equity 1,653,791 1,916,710 1,861,944 1,794,199 1,719,674 1,590,291 1,511,252 1,457,595 Total liabilities and equity $ 7,478,573 $ 6,992,530 $ 6,841,706 $ 6,902,891 $ 7,368,093 $ 6,388,369 $ 6,404,738 $ 5,251,377

Parent Company Information

Parent Company Information	12 Months Ended
	Dec. 31, 2018
Parent Company Information
Parent Company Information	Note 27—Parent Company Information The Company’s debt financing agreements require PLS, the Company’s indirect controlled subsidiary, to comply with financial covenants that include a minimum tangible net worth of $500 million. PLS is limited from transferring funds to the Parent by this minimum tangible net worth requirement. As a result of the Reorganization, the parent company financial statements include amounts from both Old PFSI and New PFSI. The parent company’s condensed statement of income and cash flows for the year ended December 31, 2018 includes the balances from Old PFSI for ten month period ended October 31, 2018 and the balances from New PFSI for two month period ended December 31, 2018. PENNYMAC FINANCIAL SERVICES, INC. CONDENSED BALANCE SHEETS December 31, 2018 2017 (in thousands) ASSETS Cash $ — $ 2,605 Investments in subsidiaries 1,975,231 556,439 Due from subsidiaries 582 6,538 Total assets $ 1,975,813 $ 565,582 LIABILITIES AND STOCKHOLDERS' EQUITY Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement $ — $ 44,011 Payable to subsidiaries 575 — Income taxes payable 321,447 52,160 Total liabilities 322,022 96,171 Stockholders' equity 1,653,791 469,411 Total liabilities and stockholders' equity $ 1,975,813 $ 565,582 PENNYMAC FINANCIAL SERVICES, INC. CONDENSED STATEMENTS OF INCOME Year ended December 31, 2018 2017 2016 (in thousands) Revenues Dividends from subsidiary $ 10,054 $ — $ 6,418 Interest — — 49 Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — 32,940 551 Total revenue 10,054 32,940 7,018 Expenses Interest 32 — — Total expenses 32 — — Income before provision for income taxes and equity in undistributed earnings in subsidiaries 10,022 32,940 7,018 Provision for income taxes 20,897 24,387 46,103 Income (loss) before equity in undistributed earnings of subsidiaries (10,875) 8,553 (39,085) Equity in undistributed earnings of subsidiaries 98,569 92,204 105,164 Net income $ 87,694 $ 100,757 $ 66,079 PENNYMAC FINANCIAL SERVICES, INC. CONDENSED STATEMENTS OF CASH FLOWS Year ended December 31, 2018 2017 2016 (in thousands) Cash flows from operating activities Net income $ 87,694 $ 100,757 $ 66,079 Adjustments to reconcile net income to net cash provided by operating activities Equity in undistributed earnings of subsidiaries (98,569) (92,204) (105,164) Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — (32,940) (551) Decrease in deferred tax asset — — 18,668 Decrease (increase) in intercompany receivable (3,737) 5,646 (76) Payments to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — (6,726) — Increase in income taxes payable 22,889 29,912 25,559 Net cash provided by operating activities 8,277 4,445 4,515 Cash flows from investing activities Increase in investments in subsidiaries (77) — — Net cash used by investing activities (77) — — Cash flows from financing activities Payment of dividend to Class A common stockholders (10,054) — — Exercise of from Class A common stock options 803 1,254 149 Repurchase of Class A common stock (1,554) (8,599) — Net cash (used in) provided by financing activities (10,805) (7,345) 149 Net change in cash and restricted cash (2,605) (2,900) 4,664 Cash and restricted cash at beginning of year 2,605 5,505 841 Cash and restricted cash at end of year $ — $ 2,605 $ 5,505

Subsequent Events

Subsequent Events	12 Months Ended
	Dec. 31, 2018
Subsequent Events
Subsequent Events	Note 28—Subsequent Events Management has evaluated all events and transactions through the date of the Company issued these consolidated financial statements. During this period: · During March 2019, the Company acquired from a non-affiliate seller Ginnie Mae MSRs with a total UPB of approximately $11.9 billion. · During February 2019, the Company entered into an agreement with a non-affiliate seller to acquire approximately $4.5 billion in UPB of Ginnie Mae MSRs. The MSR acquisition by the Company is subject to the negotiation and execution of definitive documentation, continuing due diligence and customary closing conditions. There can be no assurance that the committed amounts will ultimately be acquired or that the transaction will be completed at all.

Significant Accounting Polici_2

Significant Accounting Policies and Recently Issued Accounting Pronouncement (Policies)	12 Months Ended
	Dec. 31, 2018
Significant Accounting Policies and Recently Issued Accounting Pronouncement
Basis of Presentation	Basis of Presentation The Company’s consolidated financial statements have been prepared in compliance with accounting principles generally accepted in the United States (“GAAP”) as codified in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (the “ASC” or the “Codification”).
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of PFSI and its wholly‑owned subsidiaries, including PennyMac. Intercompany accounts and transactions have been eliminated.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make judgments and estimates that affect the reported amounts of assets and liabilities and 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. Actual results will likely differ from those estimates.
Fair Value	Fair Value Most of the Company’s assets and certain of its liabilities are measured at or based on their fair values. The Company groups its assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the observability of the inputs used to determine fair value. These levels are: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Prices determined or determinable using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing an asset or liability and are developed based on market data obtained from sources independent of the Company. · Level 3— Prices determined using significant unobservable inputs. In situations where observable inputs are unavailable, unobservable inputs may be used. Unobservable inputs reflect the Company’s own judgments about the factors that market participants use in pricing an asset or liability, and are based on the best information available in the circumstances. As a result of the difficulty in observing certain significant valuation inputs affecting “Level 3” fair value assets and liabilities, the Company is required to make judgments regarding these items’ fair values. Different persons in possession of the same facts may reasonably arrive at different conclusions as to the inputs to be applied in valuing these assets and liabilities and their fair values. Such differences may result in significantly different fair value measurements. Likewise, due to the general illiquidity of some of these assets and liabilities, subsequent transactions may be at values significantly different from those reported.
Cash Flows	Cash Flows During the year ended December 31, 2018, the Company adopted Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230) – Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows. Accordingly, the Company retrospectively changed the presentation of its consolidated statements of cash flows to conform to the requirements of ASU 2016-18. For the purpose of presentation in the statement of cash flows, the Company has identified tenant security deposits relating to rental properties owned by PMT and managed by the Company as restricted cash. The tenant security deposits are included in Other assets on the Company’s consolidated balance sheets. As the result of adoption of ASU 2016-18, the Company’s consolidated statements of cash flows for the years ended December 31, 2017 and 2016 changed as follows: Year ended December 31, 2017 2016 Cash flow Cash and Cash flow Cash and from operating restricted cash from operating restricted cash activities at year end activities at year end (in thousands) As previously reported $ (883,585) $ 37,725 $ (938,522) $ 99,367 Effect of adoption of ASU 2016-18 173 448 197 275 As reported $ (883,412) $ 38,173 $ (938,325) $ 99,642
Short-Term Investments	Short‑Term Investments Short‑term investments, which represent investments in accounts with a depository institution such as money market funds, are carried at fair value. Changes in fair value are recognized in current period income. The Company classifies its short‑term investments as “Level 1” fair value assets.
Mortgage Loans Held for Sale at Fair Value	Mortgage Loans Held for Sale at Fair Value Management has elected to account for mortgage loans held for sale at fair value, with changes in fair value recognized in current period income, to more timely reflect the Company’s performance. All changes in fair value are recognized as a component of Net gains on mortgage loans held for sale at fair value . The Company classifies most of the mortgage loans held for sale at fair value as “Level 2” fair value assets. Certain of the Company’s mortgage loans held for sale may not be saleable into active markets due to identified defects or delinquency. Such mortgage loans are classified as “Level 3” fair value assets. Sale Recognition The Company recognizes transfers of mortgage loans as sales when it surrenders control over the mortgage loans. Control over transferred mortgage loans is deemed to be surrendered when (i) the mortgage loans have been isolated from the Company, (ii) the transferee has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred mortgage loans, and (iii) the Company does not maintain effective control over the transferred mortgage loans through either (a) an agreement that entitles and obligates the Company to repurchase or redeem them before their maturity or (b) the ability to unilaterally cause the holder to return the specific mortgage loans.
Interest Income Recognition	Interest Income Recognition Interest income on mortgage loans held for sale at fair value is recognized over the life of the mortgage loans using their contractual interest rates. Income recognition is suspended and the unpaid interest receivable is reversed against interest income when mortgage loans become 90 days delinquent, or when, in management’s opinion, a full recovery of interest and principal becomes doubtful. Income recognition is resumed when the mortgage loan becomes contractually current.
Derivative Financial Instruments	Derivative Financial Instruments The Company holds and issues derivative financial instruments in connection with its operating activities. Derivative financial instruments are created as a result of certain of the Company’s operations and the Company also enters into derivative transactions as part of its interest rate risk management activities. Derivative financial instruments created as a result of the Company’s operations include: · Interest rate lock commitments (“IRLCs”) that are created when the Company commits to purchase or originate a mortgage loan acquired for sale at specified interest rates. · Derivatives that are embedded in a master repurchase agreement with a non-affiliate that provides for the Company to receive incentives for financing mortgage loans that satisfy certain consumer relief characteristics as provided in the master repurchase agreement. The Company is exposed to price risk relative to its mortgage loans held for sale as well as to IRLCs. The Company bears price risk from the time a commitment to fund a mortgage loan is made to a borrower or to purchase a mortgage loan from PMT, to the time either the prospective transaction is cancelled or the mortgage loan is sold. During this period, the Company is exposed to losses if mortgage market interest rates increase, because the fair value of the purchase commitment or prospective mortgage loan decreases. The Company also is exposed to risk relative to the fair value of its mortgage servicing rights (“MSRs”) when interest rates decrease. MSRs and mortgage servicing liabilities (“MSLs”) are generally subject to reduction in fair value when mortgage interest rates decrease. Decreasing mortgage interest rates normally encourage increased mortgage refinancing activity. Increased refinancing activity reduces the expected life of the mortgage loans underlying the MSRs and MSLs, thereby reducing their fair value. Reductions in the fair value of MSRs and MSLs affect earnings primarily through change in fair value and impairment charges. The Company engages in interest rate risk management activities in an effort to mitigate the effect of changes in market interest rates on the fair value of the Company’s assets. To manage this fair value risk resulting from interest rate risk, the Company uses derivative financial instruments acquired with the intention of reducing the risk that changes in market interest rates will result in unfavorable changes in the fair value of the Company’s IRLCs, inventory of mortgage loans held for sale and MSRs. IRLCs are accounted for as derivative financial instruments. The Company manages the risk created by IRLCs relating to mortgage loans held for sale by entering into forward sale agreements to sell the mortgage loans and by the purchase and sale of options and futures on mortgage‑backed securities (“MBS”). Such agreements are also accounted for as derivative financial instruments. These and other interest-rate derivatives are also used to manage the fair value risk created by changes in prepayment speeds on certain of the MSRs the Company holds. The Company classifies its IRLCs as “Level 3” fair value assets and liabilities. Fair value of exchange-traded hedging derivative financial instruments are categorized by the Company as “Level 1” fair value assets and liabilities. Fair value of hedging derivative financial instruments based on observable MBS prices or interest rate volatilities in the MBS market are categorized as “Level 2” fair value assets and liabilities. The Company does not designate its derivative financial instruments for hedge accounting. Therefore, the Company accounts for its derivative financial instruments as free‑standing derivatives. All derivative financial instruments are recognized on the consolidated balance sheet at fair value with changes in the fair values being reported in current period income. Changes in fair value of derivative financial instruments hedging IRLCs, mortgage loans held for sale at fair value and MSRs are included in Net gains on mortgage loans held for sale at fair value or in Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities, as applicable, in the Company’s consolidated statements of income. Changes in fair value of derivative assets relating to a master repurchase agreement are included in Interest expense . When the Company has multiple derivative financial instruments with the same counterparty subject to a master netting arrangement, it offsets the amounts recorded as assets and liabilities and amounts recognized for the right to reclaim cash collateral it has deposited with the counterparty or the obligation to return cash collateral it has collected from the counterparty arising from that master netting arrangement. Such offset amounts are presented as either a net asset or liability by counterparty on the Company’s consolidated balance sheets.
Servicing Advances	Servicing Advances Servicing advances represent advances made on behalf of borrowers and the mortgage loans’ investors to fund property taxes, insurance premiums and out-of-pocket collection costs (e.g., preservation and restoration of mortgaged or real estate acquired in the settlement of loans (“REO”), legal fees, and appraisals). Servicing advances are made in accordance with the Company’s servicing agreements and, when made, are deemed recoverable. The Company periodically reviews servicing advances for collectability and provides a valuation allowance for amounts estimated to be uncollectable. Servicing advances are written off when they are deemed uncollectable.
Mortgage Servicing Rights and Mortgage Servicing Liabilities	Mortgage Servicing Rights and Mortgage Servicing Liabilities MSRs and MSLs arise from contractual agreements between the Company and investors (or their agents) in mortgage securities and mortgage loans. Under these contracts, the Company performs mortgage loan servicing functions in exchange for fees and other remuneration. The servicing functions typically performed include, among other responsibilities, collecting and remitting loan payments; responding to borrower inquiries; accounting for principal and interest; holding custodial (impound) funds for payment of property taxes and insurance premiums; counseling delinquent mortgagors; and supervising the acquisition and disposition of REO. The fair value of MSRs and MSLs is derived from the net positive or negative, respectively, cash flows associated with the servicing contracts. The Company receives a servicing fee, net of related guarantee fees based on the remaining outstanding principal balances of the mortgage loans subject to the servicing contracts. The servicing fees are collected from the monthly payments made by the mortgagors. The Company is contractually entitled to receive other remuneration including various mortgagor‑contracted fees such as late charges and collateral reconveyance charges, and the Company is generally entitled to retain the interest earned on funds held pending remittance related to its collection of mortgagor payments. The Company also generally has the right to solicit the mortgagors for other products and services as well as for new mortgages for those considering refinancing or purchasing a new home. The Company recognizes MSRs and MSLs initially at fair value, either as proceeds from or liabilities incurred in, sales of mortgage loans where the Company assumes the obligation to service the mortgage loan in the sale transaction, or from the purchase of MSRs or receipt of cash for acceptance of MSLs. Through December 31, 2017, the Company’s subsequent accounting for MSRs and MSLs was based on the class of MSR or MSL. The Company identified three classes of MSRs: originated MSRs backed by mortgage loans with initial interest rates of less than or equal to 4.5%, MSRs backed by mortgage loans with initial interest rates of more than 4.5%, and purchased MSRs financed in part through the transfer of the right to receive excess servicing spread (“ESS”) cash flows. · Originated MSRs backed by mortgage loans with initial interest rates of less than or equal to 4.5% were accounted for using the amortization method (discussed below). · Originated MSRs backed by loans with initial interest rates of more than 4.5% and purchased MSRs financed in part by ESS were accounted for at fair value with changes in fair value recorded in current period income. MSLs were and continue to be carried at fair value with changes in fair value recorded in current period income. Effective January 1, 2018, the Company elected to change the accounting for MSRs it had accounted for using the amortization method through December 31, 2017, to the fair value method as allowed in the Transfers and Servicing topic of the FASB’s ASC. The Company determined that a single accounting treatment across all currently existing classes of MSRs is consistent with lender valuation under its financing arrangements and simplifies that Company’s hedging activities. As a result of this change, the Company recorded an adjustment to increase its investment in MSRs by $848,000, increase its liability for income taxes payable by $72,000 and increase its stockholders’ equity by $776,000. The fair value of MSRs and MSLs is difficult to determine because MSRs and MSLs are not actively traded in observable stand‑alone markets. Considerable judgment is required to estimate the fair values of MSRs and MSLs and the exercise of such judgment can significantly affect the Company’s income. Therefore, the Company classifies its MSRs and MSLs as “Level 3” fair value assets and liabilities. MSRs and MSLs Accounted for at Fair Value Changes in fair value of MSLs and MSRs accounted for at fair value are recognized in current period income in Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities in the consolidated statements of income. MSRs Accounted for Using the Amortization Method Through December 2017, the Company amortized MSRs that were accounted for using the amortization method. MSR amortization was determined by applying the ratio of the net MSR cash flows projected for the current period to the estimated total remaining projected net MSR cash flows. The estimated total net MSR cash flows were determined at the beginning of each month using prepayment inputs applicable at that time. MSRs accounted for using the amortization method were periodically evaluated for impairment. Impairment occurs when the current fair value of the MSRs decreases below the asset’s amortized cost. If MSRs were impaired, the impairment was recognized in current‑period income and the carrying value (carrying value is the MSR’s amortized cost reduced by any related valuation allowance) of the MSRs was adjusted through a valuation allowance. If the fair value of impaired MSRs subsequently increased, the increase in fair value was recognized in current‑period income. When an increase in fair value of MSR was recognized, the valuation allowance was adjusted to increase the carrying value of the MSRs only to the extent of the valuation allowance. For impairment evaluation purposes, the Company stratified its MSRs by predominant risk characteristic when evaluating for impairment. For purposes of performing its MSR impairment evaluation, the Company stratified its servicing portfolio on the basis of certain risk characteristics including mortgage loan type (fixed‑rate or adjustable‑rate) and note interest rate. Fixed‑rate mortgage loans were stratified into note rate pools of 50 basis points for note rates between 3.0% and 4.5% and a single pool for note rates of less than or equal to 3.0%. If the fair value of MSRs in any of the note interest rate pools was below the carrying value of the MSRs for that pool, impairment was recognized to the extent of the difference between the fair value and the carrying value of that pool. Management periodically reviewed the various impairment strata to determine whether the fair value of the impaired MSRs in a given stratum was likely to recover. When management deemed recovery of the fair value to be unlikely in the foreseeable future, a write‑down of the cost of the MSRs for that stratum to its estimated recoverable value was charged to the valuation allowance. Both amortization and changes in the amount of the MSR valuation allowance were recorded in current period income in Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities in the consolidated statements of income.
Furniture, Fixtures, Equipment and Building Improvements	Furniture, Fixtures, Equipment and Building Improvements Furniture, fixtures, equipment and building improvements are stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight‑line method over the estimated useful lives of the various classes of assets, which range from five to seven years for furniture and equipment and the lesser of the asset’s estimated useful life or the remaining lease term for fixtures and building improvements.
Capitalized Software	Capitalized Software The Company capitalizes certain consulting, payroll, and payroll‑related costs related to computer software developed for internal use. Once development is complete and the software is placed in service, the Company amortizes the capitalized costs over three to seven years using the straight‑line method. The Company also periodically assesses capitalized software for recoverability when events or changes in circumstances indicate that its carrying amount may not be recoverable. If management identifies an indicator of impairment, it assesses recoverability by comparing the carrying amount of the asset to the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset. An impairment loss is recognized when the carrying amount is not recoverable and is measured as the excess of carrying value over fair value.
Investment in PennyMac Mortgage Investment Trust at Fair Value	Investment in PennyMac Mortgage Investment Trust at Fair Value Common shares of beneficial interest in PMT are carried at their fair value with changes in fair value recognized in current period income. Fair value for purposes of the Company’s holdings in PMT is based on the published closing price of the shares as of period end. The Company classifies its investment in common shares of PMT as a “Level 1” fair value asset.
Mortgage Loans Eligible for Repurchase	Mortgage Loans Eligible for Repurchase 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 the three consecutive months preceding the month of repurchase. As a result of this right, the Company recognizes the mortgage loans in Mortgage loans eligible for repurchase at their unpaid principal balances and records a corresponding liability in Liability for mortgage loans eligible for repurchase on its consolidated balance sheets.
Carried Interest Due from Investment Funds	Carried Interest Due from Investment Funds Carried Interest, in general terms, is the share of any profits in excess of specified levels that the general partners receive as compensation. The Company had a general partnership interest or other Carried Interest arrangement with the Investment Funds, and earned Carried Interest thereunder. The amount of Carried Interest to be recorded each period was based on the cash flows that would be realized by all partners assuming liquidation of the Investment Funds’ remaining investments as of the measurement date. The Company received Carried Interest in the priority of distribution as provided in the charter documents relating to the respective Investment Funds. The Company included its Carried Interest in Other assets.
Borrowings	Borrowings The carrying values of borrowings other than ESS are based on the accrued cost of the agreements. The costs of creating the facilities underlying the agreements are included in the carrying value of the agreements and are amortized to Interest expense over the terms of the respective borrowing facilities: · Debt issuance costs relating to revolving facilities, such as repurchase agreement and mortgage loan participation purchase and sale facilities are amortized on the straight line basis over the term of the facility; · Debt issuance cost relating to non-revolving debts, such as certain of the Company’s Notes payable, are amortized over the contractual term of the non-revolving debt using the interest method; · Debt issuance premiums recorded as the results of recognition of repurchase agreement derivatives are amortized to Interest expense over the contractual term of the repurchase agreement. Unamortized premiums relating to repurchase agreements repaid before the transaction’s contractual maturity are credited to Interest expense .
Excess Servicing Spread Financing at Fair Value	Excess Servicing Spread Financing at Fair Value The Company finances certain of its purchases of Agency MSRs through the sale to PMT of the right to receive the excess of the servicing fee rate over a specified rate of the underlying MSRs. This excess is referred to as the ESS. ESS is carried at its fair value. Changes in fair value are recognized in current period income in Change in fair value of excess servicing spread payable to PennyMac Mortgage Investment Trust . Interest expense for ESS is accrued using the interest method based upon the expected cash flows from the ESS through the expected life of the underlying mortgage loans.
Liability for Losses Under Representations and Warranties	Liability for Losses Under Representations and Warranties The Company’s agreements with the Agencies and other investors include representations and warranties related to the mortgage loans the Company sells to the Agencies and other investors. The representations and warranties require adherence to Agency and other investor origination and underwriting guidelines, including but not limited to the validity of the lien securing the mortgage loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. In the event of a breach of its representations and warranties, the Company may be required to either repurchase the mortgage loans with the identified defects or indemnify the investor or insurer. In such cases, the Company bears any subsequent credit loss on the mortgage loans. The Company’s credit loss may be reduced by any recourse it may have to correspondent mortgage loan sellers that, in turn, had sold such mortgage loans to PMT and breached similar or other representations and warranties. In such event, the Company has the right to seek a recovery of related repurchase losses from that correspondent mortgage loan seller, through PMT. As a result of providing representations and warranties to investors and insurers, the Company records a provision for losses relating to representations and warranties as part of its mortgage loan sale transactions. The method used to estimate the liability for representations and warranties is a function of the representations and warranties given and considers a combination of factors, including, but not limited to, estimated future defaults and mortgage loan repurchase rates, the estimated severity of loss in the event of default and the probability of reimbursement by the correspondent mortgage loan seller. The Company establishes a liability at the time mortgage loans are sold and periodically updates its liability estimate. The level of the liability for representations and warranties is reviewed and approved by the Company’s management credit committee. The level of the liability for representations and warranties is difficult to estimate and requires considerable management judgment. The level of mortgage loan repurchase losses is dependent on economic factors, investor repurchase demand or insurer claim denial strategies, and other external conditions that may change over the lives of the underlying mortgage loans. The Company’s representations and warranties are generally not subject to stated limits of exposure. However, the Company believes that the current unpaid principal balance of mortgage loans sold to date represents the maximum exposure to repurchases related to representations and warranties.
Mortgage Loan Servicing Fees	Mortgage Loan Servicing Fees Mortgage loan servicing fees are received by the Company for servicing residential mortgage loans. Mortgage loan servicing activities include loan administration, collection, and default management, including the collection and remittance of loan payments; response to customer inquiries; accounting for principal and interest; holding custodial (impounded) funds for the payment of property taxes and insurance premiums; counseling delinquent mortgagors; and supervising foreclosures and REO property dispositions. Mortgage loan servicing fee amounts are based upon fee schedules established by the applicable investor and depend on whether the Company is directly servicing loans, where it holds the MSRs, subservicing MSRs or loans held by PMT or another third party or subservicing distressed mortgage loans for the Advised Entities. The Company’s obligations under its mortgage loan servicing agreements are fulfilled as the Company services the mortgage loans. Fees are collected when the mortgage loan payments are received from the borrowers in the case of MSRs held by the Company or within 30 days of the applicable month-end from the Advised Entities. Owned mortgage loan servicing fees are recorded net of Agency guarantee fees paid by the Company and are recognized when the mortgage loan payments are received from the borrowers. Mortgage loan servicing fees relating to mortgage loans serviced for the Advised Entities are recognized in the month in which the mortgage loans are serviced.
Fulfillment Fees	Fulfillment Fees Fulfillment fees represent fees the Company collects for services it performs on behalf of PMT in connection with the acquisition, packaging and sale of mortgage loans. Fulfillment fee amounts are based upon a negotiated fee schedule and the unpaid principal balance of the mortgage loans purchased by PMT. The Company’s obligation under the agreement is fulfilled when PMT completes the sale or securitization of a mortgage loan it purchases. Fulfillment fee revenue is recognized in the month the mortgage loan is purchased by PMT. Fulfillment fees are generally collected within 30 days of purchase by PMT, although a portion of the fulfillment fees may not be collected until 30 days following sale or securitization to the extent such sale or securitization does not occur in the month of purchase.
Management fees	Management fees Management fees represent compensation to the Company for its management services provided to the Advised Entities. Management fees were earned based on the Investment Funds’ net assets and are based on PMT’s shareholders’ equity amounts and profitability in excess of specified thresholds. Management fees are recognized as services are provided and are paid to the Company on a quarterly basis within 30 days of the end of the quarter.
Stock-Based Compensation	Stock‑Based Compensation The Company’s 2013 Equity Incentive Plan provides for awards of nonstatutory and incentive stock options, time‑based restricted stock units, performance‑based restricted stock units, stock appreciation rights, performance units and stock grants. The Company establishes the cost of its share-based awards at the awards’ fair values at the grant date of the awards. The Company estimates the fair value of time‑based restricted stock units and performance‑based restricted stock units awarded with reference to the fair value of its underlying common stock and expected forfeiture rates on the date of the award. The Company estimates the fair value of its stock option awards with reference to the expected price volatility of its shares of common stock and risk-free interest rate for the period that exercisable stock options are expected to be outstanding. Compensation costs are fixed, except for performance‑based restricted stock units, as of the award date as all grantees are employees of PennyMac or directors of the Company. The cost of performance‑based restricted stock units is adjusted in each reporting period after the grant for changes in expected performance attainment until the performance share units vest. The Company amortizes the cost of stock based awards to compensation expense over the vesting period using the graded vesting method. Expense relating to awards is included in Compensation expense in the consolidated statements of income.
Income Taxes	Income Taxes The Company is subject to federal and state income taxes. Income taxes are provided using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period in which the change occurs. A valuation allowance is established if, in management’s judgment, it is not more likely than not that a deferred tax asset will be realized. The Company recognizes tax benefits relating to its tax positions only if, in the opinion of management, it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority. A tax position that meets this standard is recognized as the largest amount that is greater than 50% likely to be realized upon ultimate settlement with the appropriate taxing authority. The Company will classify any penalties and interest as a component of provision for income taxes. As a result of the PennyMac recapitalization and reorganization in 2013, the Company expects to benefit from amortization and other tax deductions resulting from increases in the tax basis of PennyMac’s assets from the exchange of PennyMac Class A units to the shares of the Company’s common stock. Those deductions will be allocated to the Company and will be taken into account in reporting the Company’s taxable income. The Company assumed an agreement with certain of the former unitholders of PennyMac that provides for the additional payment by the Company to exchanging unitholders of PennyMac equal to 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that PFSI realizes due to (i) increases in tax basis resulting from exchanges of the then existing unitholders and (ii) certain other tax benefits related to PFSI entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. Although the Company’s Reorganization in 2018 eliminated the potential for unitholders to exchange any additional units subject to this tax receivable agreement, the Company continues to be subject to the agreement and provide payment when applicable for units exchanged before the Reorganization.
Recently Issued Accounting Pronouncement	. Recently Issued Accounting Pronouncement In February 2016, the FASB issued Accounting Standard Update No. 2016-02, Leases ( Topic 842 ) (“ASU 2016-02”). ASU 2016-02 changes the standards for the recognition, measurement, presentation and disclosure of leases. ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether the lease is effectively a financed purchase of the leased asset by the lessee. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoptions permitted. The Company will adopt the new standard effective January 1, 2019. The Company will adopt ASU 2016-02 using the required modified retrospective approach and will not adjust prior comparative periods. As part of the adoption of ASU 2016-02, the Company will make accounting policy elections that will: · Retain current classification of leases; and · Not recognizing leases with an initial term of 12 months or less on the consolidated balance sheet. At January 1, 2019, upon adoption of ASU 2016-02, the Company will recognize approximately $79.3 million of lease liability and approximately $58.6 million of right-of-use asset based on the present value of remaining lease payments. The Company does not expect the adoption of ASU 2016-02 to have a significant effect on the amount or timing of its lease expense. The effect of ASU 2016-02 is non-cash in nature, and, as such, it will not affect the Company’s cash flows.

Significant Accounting Polici_3

Significant Accounting Policies and Recently Issued Accounting Pronouncement (Tables)	12 Months Ended
	Dec. 31, 2018
Significant Accounting Policies and Recently Issued Accounting Pronouncement
Summary of the reclassifications	Year ended December 31, 2017 2016 Cash flow Cash and Cash flow Cash and from operating restricted cash from operating restricted cash activities at year end activities at year end (in thousands) As previously reported $ (883,585) $ 37,725 $ (938,522) $ 99,367 Effect of adoption of ASU 2016-18 173 448 197 275 As reported $ (883,412) $ 38,173 $ (938,325) $ 99,642

Transactions with Affiliates (T

Transactions with Affiliates (Tables)	12 Months Ended
	Dec. 31, 2018
Transactions with Affiliates
Summary of activity in Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement	Year ended December 31, 2018 2017 2016 (in thousands) Activity during the year: Liability resulting from unit exchanges $ 3,652 $ 7,723 $ 2,190 Payments under tax receivable agreement $ — $ (6,726) $ — Repricing of liability (1) $ (1,126) $ (32,940) $ (551) Balance at end of year $ 46,537 $ 44,011 $ 75,954 A reduction of $32.0 million in the payable to exchanged PennyMac unitholders under the tax receivable agreement in 2017 was the result of the change in the federal corporate tax rate to 21% from the previous maximum of 35% under Tax Cuts and Jobs Act of 2017 (“the Tax Act”).
PMT
Transactions with Affiliates
Summary of lending activity between the Company and affiliate	Year ended December 31, 2018 2017 2016 (in thousands) Net gains (loss) on mortgage loans held for sale at fair value: Net gains on mortgage loans held for sale to PMT $ 69,359 $ 28,238 $ — Mortgage servicing rights and excess servicing spread recapture incurred (4,776) (6,249) (8,092) $ 64,583 $ 21,989 $ (8,092) Sale of mortgage loans held for sale to PMT $ 3,343,028 $ 904,097 $ 21,541 Fulfillment fee revenue $ 81,350 $ 80,359 $ 86,465 Unpaid principal balance of mortgage loans fulfilled for PMT subject to fulfillment fees $ 26,194,303 $ 22,971,119 $ 23,188,386 Sourcing fees paid to PMT $ 10,925 $ 12,084 $ 11,976 Unpaid principal balance of mortgage loans purchased from PMT $ 36,415,933 $ 40,561,241 $ 39,908,163 Tax service fees earned from PMT included in Mortgage loan origination fees $ 7,433 $ 7,078 $ 6,690 Early purchase program fees earned from PMT included in Mortgage loan servicing fees $ — $ 7 $ 30
Summary of mortgage loan servicing fees earned from PMT	Year ended December 31, 2018 2017 2016 (in thousands) Mortgage loans acquired for sale at fair value: Base and supplemental $ 347 $ 305 $ 330 Activity-based 690 649 733 1,037 954 1,063 Mortgage loans at fair value: Base and supplemental 2,771 6,650 11,078 Activity-based 4,784 8,960 18,521 7,555 15,610 29,599 Mortgage servicing rights: Base and supplemental 32,854 25,991 19,461 Activity-based 599 509 492 33,453 26,500 19,953 $ 42,045 $ 43,064 $ 50,615 Property management fees received from PMT included in Other income $ 442 $ 350 $ 138
Summary of management fees earned	Year ended December 31, 2018 2017 2016 (in thousands) Base management $ 23,033 $ 22,280 $ 20,657 Performance incentive 1,432 304 — $ 24,465 $ 22,584 $ 20,657
Summary of reimbursement of expenses	Year ended December 31, 2018 2017 2016 (in thousands) Reimbursement of: Common overhead incurred by the Company (1) $ 4,640 $ 5,306 $ 7,898 Compensation (1) 480 — — Expenses incurred on (the Company's) PMT's behalf, net 1,113 2,257 (163) $ 6,233 $ 7,563 $ 7,735 Payments and settlements during the year (2) $ 71,943 $ 64,945 $ 143,542 (1) The Company adopted Accounting Standards Update 2014-09 Revenues from Contracts with Customers (“ASU 2014-09”) using the modified retrospective method effective January 1, 2018. Adoption of ASU 2014-09 using the modified retrospective method required the Company to include those reimbursements from PMT in Other revenue starting January 1, 2018. Before adoption of ASU 2014-09, the Company included such reimbursements in the respective expense line items. Payments and settlements include payments for management fees and correspondent production activities itemized in the preceding tables and netting settlements made pursuant to master netting agreements between the Company and PMT.
Summary of investing activity between the Company and affiliate	Year ended December 31, 2018 2017 2016 (in thousands) Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell: Activity during the year: Refinancing of note receivable from PennyMac Mortgage Investment Trust $ — $ — $ 150,000 Sale of assets purchased from PMT under agreement to resell $ 13,103 $ 5,872 $ — Interest income $ 7,462 $ 8,038 $ 253 Balance at end of year $ 131,025 $ 144,128 $ 150,000 Note receivable from PennyMac Mortgage Investment Trust: Activity during the year: Refinancing with repurchase agreement from PennyMac Mortgage Investment Trust $ — $ — $ 150,000 Interest income $ — $ — $ 7,577 Balance at end of year $ — $ — $ — Common shares of beneficial interest of PennyMac Mortgage Investment Trust: Activity during the year: Dividends earned from PennyMac Mortgage Investment Trust $ 140 $ 141 $ 141 Change in fair value of investment in common shares of PennyMac Mortgage Investment Trust 192 (23) 83 $ 332 $ 118 $ 224 Balance at end of year: Fair value $ 1,397 $ 1,205 Number of shares 75 75
Summary of financing activity between the Company and affiliate	Year ended December 31, 2018 2017 2016 (in thousands) Excess servicing spread financing: Issuance pursuant to recapture agreement $ 2,688 $ 5,244 $ 6,603 Repayment $ 46,750 $ 54,980 $ 69,992 Settlement $ — $ — $ 59,045 Change in fair value $ 8,500 $ (19,350) $ (23,923) Interest expense $ 15,138 $ 16,951 $ 22,601 Recapture incurred pursuant to refinancings by the Company of mortgage loans subject to excess servicing spread financing included in Net gains on mortgage loans held for sale at fair value $ 2,584 $ 4,820 $ 6,529 December 31, 2018 2017 (in thousands) Excess servicing spread financing at fair value $ 216,110 $ 236,534
Summary of amounts due from and payable to affiliate	December 31, December 31, 2018 2017 (in thousands) Receivable from PMT: Fulfillment fees $ 10,006 $ 346 Allocated expenses and expenses incurred on PMT's behalf 9,066 11,542 Management fees 6,559 5,901 Servicing fees 4,841 6,583 Correspondent production fees 2,071 1,735 Conditional Reimbursement 801 870 Interest on assets purchased under agreements to resell 120 142 $ 33,464 $ 27,119 Payable to PMT: Deposits made by PMT to fund servicing advances $ 100,554 $ 132,844 Mortgage servicing rights recapture payable 179 282 Other 3,898 3,872 $ 104,631 $ 136,998
Investment Funds
Transactions with Affiliates
Summary of amounts due from and payable to affiliate	December 31, 2017 (in thousands) Carried Interest due from Investment Funds: PNMAC Mortgage Opportunity Fund, LLC $ 6,389 PNMAC Mortgage Opportunity Fund Investors, LLC 2,163 $ 8,552 Receivable from Investment Funds: Mortgage loan servicing fee rebate deposit $ 300 Management fees 88 Expense reimbursements 27 Mortgage loan servicing fees 2 $ 417 Payable to Investment Funds: Deposits received to fund servicing advances $ 2,329 Other 98 $ 2,427

Loan Sales and Servicing Acti_2

Loan Sales and Servicing Activities (Tables)	12 Months Ended
	Dec. 31, 2018
Loan Sales and Servicing Activities
Summary of cash flows between the Company and transferees upon sale of mortgage loans in transactions	Year ended December 31, 2018 2017 2016 (in thousands) Cash flows: Sales proceeds $ 44,557,560 $ 50,235,245 $ 49,633,909 Servicing fees received (1) $ 488,483 $ 376,160 $ 261,163 Net servicing advances $ 28,557 $ 52,353 $ 8,274 (1) Net of guarantee fees paid to the Agencies
Summary of sale of loans between the Company and transferees upon sale of mortgage loans in transactions	December 31, 2018 2017 (in thousands) Unpaid principal balance of mortgage loans outstanding $ 145,224,596 $ 120,853,138 Delinquencies: 30-89 days $ 6,222,864 $ 5,097,688 90 days or more: Not in foreclosure $ 2,208,083 $ 2,303,114 In foreclosure $ 720,894 $ 606,744 Foreclosed $ 24,243 $ 30,310 Bankruptcy $ 970,329 $ 657,368
Summary of mortgage servicing portfolio	December 31, 2018 Contract Total Servicing servicing and mortgage rights owned subservicing loans serviced (in thousands) Investor: Non-affiliated entities: Originated $ 145,224,596 $ — $ 145,224,596 Purchased 56,990,486 — 56,990,486 202,215,082 — 202,215,082 PennyMac Mortgage Investment Trust — 94,658,154 94,658,154 Mortgage loans held for sale 2,420,636 — 2,420,636 $ 204,635,718 $ 94,658,154 $ 299,293,872 Subserviced for the Company (1) $ 414,219 $ — $ 414,219 Delinquent mortgage loans: 30 days $ 6,677,179 $ 525,989 $ 7,203,168 60 days 1,983,381 113,238 2,096,619 90 days or more: Not in foreclosure 3,102,492 217,115 3,319,607 In foreclosure 1,027,493 127,025 1,154,518 Foreclosed 33,493 176,377 209,870 $ 12,824,038 $ 1,159,744 $ 13,983,782 Bankruptcy $ 1,415,106 $ 107,083 $ 1,522,189 Custodial funds managed by the Company (2) $ 3,033,658 $ 970,328 $ 4,003,986 (1) Certain of the mortgage loans for which the Company has purchased the MSRs are subserviced on the Company’s behalf by other mortgage loan servicers on an interim basis when servicing of the loans has not yet been transferred to the Company’s operating platform. (2) Custodial funds include cash accounts holding funds on behalf of borrowers and investors relating to mortgage loans serviced under servicing agreements and are not recorded on the Company’s consolidated balance sheets. The Company earns placement fees on certain of the custodial funds it manages on behalf of the mortgage loans’ investors, which are included in Interest income in the Company’s consolidated statements of income. December 31, 2017 Contract Total Servicing servicing and mortgage rights owned subservicing loans serviced (in thousands) Investor: Non-affiliated entities: Originated $ 120,853,138 $ — $ 120,853,138 Purchased 47,016,708 — 47,016,708 167,869,846 — 167,869,846 Advised Entities — 74,980,268 74,980,268 Mortgage loans held for sale 2,998,377 — 2,998,377 $ 170,868,223 $ 74,980,268 $ 245,848,491 Delinquent mortgage loans: 30 days $ 5,326,710 $ 515,922 $ 5,842,632 60 days 1,935,216 215,957 2,151,173 90 days or more: Not in foreclosure 3,690,159 541,945 4,232,104 In foreclosure 916,614 293,835 1,210,449 Foreclosed 41,244 278,890 320,134 $ 11,909,943 $ 1,846,549 $ 13,756,492 Bankruptcy $ 1,046,969 $ 176,324 $ 1,223,293 Custodial funds managed by the Company (1) $ 3,267,279 $ 901,041 $ 4,168,320 (1) Custodial funds include cash accounts holding funds on behalf of borrowers and investors relating to mortgage loans serviced under servicing agreements and are not recorded on the Company’s consolidated balance sheets. The Company earns placement fees on certain of the custodial funds it manages on behalf of the mortgage loans’ investors, which are included in Interest income in the Company’s consolidated statements of income.
Summary of the geographical distribution of loans for the top five and all other states as measured by the total unpaid principal balance (UPB)	December 31, December 31, State 2018 2017 (in thousands) California $ 51,377,441 $ 45,621,369 Texas 23,648,042 19,741,970 Florida 22,650,926 17,490,194 Virginia 19,011,950 16,210,673 Maryland 13,774,011 11,350,939 All other states 168,831,502 135,433,346 $ 299,293,872 $ 245,848,491

Fair Value (Tables)

Fair Value (Tables)	12 Months Ended
	Dec. 31, 2018
Fair Value
Summary of financial statement items measured at estimated fair value on a recurring basis	December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Assets: Short-term investments $ 117,824 $ — $ — $ 117,824 Mortgage loans held for sale at fair value — 2,261,639 260,008 2,521,647 Derivative assets: Interest rate lock commitments — — 50,507 50,507 Repurchase agreement derivatives — — 26,770 26,770 Forward purchase contracts — 35,916 — 35,916 Forward sales contracts — 437 — 437 MBS put options — 720 — 720 MBS call options — 2,135 — 2,135 Put options on interest rate futures purchase contracts 866 — — 866 Call options on interest rate futures purchase contracts 5,965 — — 5,965 Total derivative assets before netting 6,831 39,208 77,277 123,316 Netting — — — (26,969) Total derivative assets 6,831 39,208 77,277 96,347 Investment in PennyMac Mortgage Investment Trust 1,397 — — 1,397 Mortgage servicing rights at fair value — — 2,820,612 2,820,612 $ 126,052 $ 2,300,847 $ 3,157,897 $ 5,557,827 Liabilities: Excess servicing spread financing payable to PennyMac Mortgage Investment Trust at fair value $ — $ — $ 216,110 $ 216,110 Derivative liabilities: Interest rate lock commitments — — 1,169 1,169 Forward purchase contracts — 215 — 215 Forward sales contracts — 26,762 — 26,762 Total derivative liabilities before netting — 26,977 1,169 28,146 Netting — — — (25,082) Total derivative liabilities — 26,977 1,169 3,064 Mortgage servicing liabilities at fair value — — 8,681 8,681 $ — $ 26,977 $ 225,960 $ 227,855 December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Assets: Short-term investments $ 170,080 $ — $ — $ 170,080 Mortgage loans held for sale at fair value — 2,316,892 782,211 3,099,103 Derivative assets: Interest rate lock commitments — — 60,012 60,012 Repurchase agreement derivatives — — 10,656 10,656 Forward purchase contracts — 4,288 — 4,288 Forward sales contracts — 2,101 — 2,101 MBS put options — 3,481 — 3,481 Put options on interest rate futures purchase contracts 3,570 — — 3,570 Call options on interest rate futures purchase contracts 938 — — 938 Total derivative assets before netting 4,508 9,870 70,668 85,046 Netting — — — (6,867) Total derivative assets 4,508 9,870 70,668 78,179 Investment in PennyMac Mortgage Investment Trust 1,205 — — 1,205 Mortgage servicing rights at fair value — — 638,010 638,010 $ 175,793 $ 2,326,762 $ 1,490,889 $ 3,986,577 Liabilities: Excess servicing spread financing payable to PennyMac Mortgage Investment Trust at fair value $ — $ — $ 236,534 $ 236,534 Derivative liabilities: Interest rate lock commitments — — 1,740 1,740 Forward purchase contracts — 1,272 — 1,272 Forward sales contracts — 7,031 — 7,031 Total derivative liabilities before netting — 8,303 1,740 10,043 Netting — — — (4,247) Total derivative liabilities — 8,303 1,740 5,796 Mortgage servicing liabilities at fair value — — 14,120 14,120 $ — $ 8,303 $ 252,394 $ 256,450
Summary of roll forward of items measured using Level 3 inputs on a recurring basis	Year ended December 31, 2018 Mortgage Net interest Repurchase Mortgage loans held rate lock agreement servicing for sale commitments (1) derivatives rights Total (in thousands) Assets: Balance, December 31, 2017 $ 782,211 $ 58,272 $ 10,656 $ 638,010 $ 1,489,149 Reclassification of mortgage servicing rights previously accounted for under the amortization method pursuant to adoption of the fair value method of accounting — — — 1,482,426 1,482,426 Balance, January 1, 2018 782,211 58,272 10,656 2,120,436 2,971,575 Purchases and issuances, net 2,972,042 195,974 49,725 237,803 3,455,544 Sales and repayments (1,360,667) — (31,907) — (1,392,574) Mortgage servicing rights resulting from mortgage loan sales — — — 591,757 591,757 Changes in fair value included in income arising from: Changes in instrument-specific credit risk 158 — — — 158 Other factors — 1,285 (1,704) (129,384) (129,803) 158 1,285 (1,704) (129,384) (129,645) Transfers from Level 3 to Level 2 (2,128,551) — — — (2,128,551) Transfers to real estate acquired in settlement of loans (5,185) — — — (5,185) Transfers of interest rate lock commitments to mortgage loans held for sale — (206,193) — — (206,193) Balance, December 31, 2018 $ 260,008 $ 49,338 $ 26,770 $ 2,820,612 $ 3,156,728 Changes in fair value recognized during the year relating to assets still held at December 31, 2018 $ (263) $ 49,338 $ — $ (129,384) $ (80,309) (1) For the purpose of this table, the IRLC asset and liability positions are shown net. Year ended December 31, 2018 Excess servicing Mortgage spread servicing financing liabilities Total (in thousands) Liabilities: Balance, December 31, 2017 $ 236,534 $ 14,120 $ 250,654 Issuance of excess servicing spread financing pursuant to a recapture agreement with PennyMac Mortgage Investment Trust 2,688 — 2,688 Accrual of interest 15,138 — 15,138 Repayments (46,750) — (46,750) Mortgage servicing liabilities resulting from mortgage loan sales — 7,601 7,601 Changes in fair value included in income 8,500 (13,040) (4,540) Balance, December 31, 2018 $ 216,110 $ 8,681 $ 224,791 Changes in fair value recognized during the year relating to liabilities still outstanding at December 31, 2018 $ 8,500 $ (13,040) $ (4,540) Year ended December 31, 2017 Mortgage Net interest Repurchase Mortgage loans held rate lock agreement servicing for sale commitments (1) derivatives rights Total (in thousands) Assets: Balance, December 31, 2016 $ 47,271 $ 59,391 $ — $ 515,925 $ 622,587 Purchases and issuances, net 2,928,249 302,389 10,986 183,850 3,425,474 Sales and repayments (1,339,580) — — — (1,339,580) Mortgage servicing rights resulting from mortgage loan sales — — — 24,471 24,471 Changes in fair value included in income arising from: Changes in instrument-specific credit risk (1,794) — — — (1,794) Other factors — 115,434 (330) (86,236) 28,868 (1,794) 115,434 (330) (86,236) 27,074 Transfers from Level 3 to Level 2 (851,935) — — — (851,935) Transfers of interest rate lock commitments to mortgage loans held for sale — (418,942) — — (418,942) Balance, December 31, 2017 $ 782,211 $ 58,272 $ 10,656 $ 638,010 $ 1,489,149 Changes in fair value recognized during the year relating to assets still held at December 31, 2017 $ (556) $ 58,272 $ (330) $ (86,236) $ (28,850) (1) For the purpose of this table, the IRLC asset and liability positions are shown net. Year ended December 31, 2017 Excess servicing Mortgage spread servicing financing liabilities Total (in thousands) Liabilities: Balance, December 31, 2016 $ 288,669 $ 15,192 $ 303,861 Issuance of excess servicing spread financing pursuant to a recapture agreement with PennyMac Mortgage Investment Trust 5,244 — 5,244 Accrual of interest 16,951 — 16,951 Repayments (54,980) — (54,980) Mortgage servicing liabilities resulting from mortgage loan sales — 17,229 17,229 Changes in fair value included in income (19,350) (18,301) (37,651) Balance, December 31, 2017 $ 236,534 $ 14,120 $ 250,654 Changes in fair value recognized during the year relating to liabilities still outstanding at December 31, 2017 $ (19,350) $ (18,301) $ (37,651) Year ended December 31, 2016 Mortgage Net interest Mortgage loans held rate lock servicing for sale commitments (1) rights Total (in thousands) Assets: Balance December 31, 2015 $ 48,531 $ 43,773 $ 660,247 $ 752,551 Purchases 1,608,627 — 146 1,608,773 Sales and repayments (1,202,621) — — (1,202,621) Interest rate lock commitments issued, net — 429,598 — 429,598 Mortgage servicing rights resulting from mortgage loan sales — — 17,319 17,319 Changes in fair value included in income arising from: Changes in instrument-specific credit risk 3,469 — — 3,469 Other factors — 143,867 (161,787) (17,920) 3,469 143,867 (161,787) (14,451) Transfers from Level 3 to Level 2 (410,735) — — (410,735) Transfers of interest rate lock commitments to mortgage loans held for sale — (557,847) — (557,847) Balance, December 31, 2016 $ 47,271 $ 59,391 $ 515,925 $ 622,587 Changes in fair value recognized during the year relating to assets still held at December 31, 2016 $ 936 $ 59,391 $ (161,787) $ (101,460) (1) For the purpose of this table, the IRLC asset and liability positions are shown net. Year ended December 31, 2016 Excess servicing Mortgage spread servicing financing liabilities Total (in thousands) Liabilities: Balance December 31, 2015 $ 412,425 $ 1,399 $ 413,824 Issuance of excess servicing spread financing pursuant to a recapture agreement with PennyMac Mortgage Investment Trust 6,603 — 6,603 Accrual of interest 22,601 — 22,601 Repayments (69,992) — (69,992) Settlement (59,045) — (59,045) Mortgage servicing liabilities resulting from mortgage loan sales — 14,991 14,991 Mortgage servicing liabilities assumed — 10,139 10,139 Changes in fair value included in income (23,923) (11,337) (35,260) Balance, December 31, 2016 $ 288,669 $ 15,192 $ 303,861 Changes in fair value recognized during the year relating to liabilities still outstanding at December 31, 2016 $ (16,713) $ (11,337) $ (28,050)
Summary of net gains (losses) from changes in fair values included in earnings for financial statement items carried at fair value	Year ended December 31, 2018 2017 2016 Net Net gains on Net Net gains on Net Net gains on mortgage mortgage mortgage mortgage mortgage mortgage loan loans held loan loans held loan loans held servicing for sale at servicing for sale at servicing for sale at fees fair value Total fees fair value Total fees fair value Total (in thousands) Assets: Mortgage loans held for sale $ — $ 188,611 $ 188,611 $ — $ 426,092 $ 426,092 $ — $ 513,331 $ 513,331 Mortgage servicing rights (129,384) — (129,384) (86,236) — (86,236) (161,787) — (161,787) $ (129,384) $ 188,611 $ 59,227 $ (86,236) $ 426,092 $ 339,856 $ (161,787) $ 513,331 $ 351,544 Liabilities: Excess servicing spread financing at fair value payable to PennyMac Mortgage Investment Trust $ (8,500) $ — $ (8,500) $ 19,350 $ — $ 19,350 $ 23,923 $ — $ 23,923 Mortgage servicing liabilities 13,040 — 13,040 18,301 — 18,301 11,337 — 11,337 $ 4,540 $ — $ 4,540 $ 37,651 $ — $ 37,651 $ 35,260 $ — $ 35,260
Schedule of fair value and related principal amounts due upon maturity of assets and liabilities accounted for under the fair value option	December 31, 2018 December 31, 2017 Principal Principal amount amount Fair due upon Fair due upon value maturity Difference value maturity Difference (in thousands) Mortgage loans held for sale: Current through 89 days delinquent $ 2,324,203 $ 2,220,371 $ 103,832 $ 2,430,517 $ 2,326,772 $ 103,745 90 days or more delinquent: Not in foreclosure 143,631 144,011 (380) 614,329 614,357 (28) In foreclosure 53,813 56,254 (2,441) 54,257 57,248 (2,991) $ 2,521,647 $ 2,420,636 $ 101,011 $ 3,099,103 $ 2,998,377 $ 100,726
Summary of financial statement items measured at estimated fair value on a nonrecurring basis	December 31, 2018 Level 1 Level 2 Level 3 Total (in thousands) Real estate acquired in settlement of loans $ — $ — $ 2,150 $ 2,150 December 31, 2017 Level 1 Level 2 Level 3 Total (in thousands) Mortgage servicing rights at lower of amortized cost or fair value $ — $ — $ 1,463,552 $ 1,463,552 Real estate acquired in settlement of loans — — 2,355 2,355 $ — $ — $ 1,465,907 $ 1,465,907
Summary of total gains (losses) on assets measured at estimated fair values on a nonrecurring basis	Year ended December 31, 2018 2017 2016 (in thousands) Mortgage servicing rights at lower of amortized cost or fair value $ — $ (6,853) $ (60,487) Real estate acquired in settlement of loans (75) (125) (86) $ (75) $ (6,978) $ (60,487)
Quantitative summary of key inputs used in the valuation of the MSRs at year end and the effect on estimated fair value from adverse changes in those inputs	December 31, 2018 December 31, 2017 Fair Fair Amortized value value cost (Carrying value, unpaid principal balance of underlying mortgage loans and effect on fair value amounts in thousands) MSR and pool characteristics: Carrying value $2,820,612 $638,010 $1,481,578 Unpaid principal balance of underlying mortgage loans $201,054,144 $51,883,539 $114,365,698 Weighted average note interest rate 4.0% 4.0% 3.8% Weighted average servicing fee rate (in basis points) 33 32 31 Key inputs (1): Pricing spread (2): Range 5.8% – 16.1% 7.6% – 14.1% 7.6% – 14.1% Weighted average 8.7% 9.8% 10.3% Effect on fair value of (3): 5% adverse change ($45,268) ($10,760) ($27,700) 10% adverse change ($89,073) ($21,155) ($54,376) 20% adverse change ($172,556) ($40,916) ($104,869) Prepayment speed (4): Range 8.4% – 32.6% 7.9% – 46.2% 7.4% – 44.1% Weighted average 9.9% 10.5% 9.7% Average life (in years): Range 1.5 – 7.9 1.2 – 7.8 2.0 – 8.3 Weighted average 7.2 6.6 7.5 Effect on fair value of (3): 5% adverse change ($47,687) ($10,809) ($23,544) 10% adverse change ($93,626) ($21,239) ($46,284) 20% adverse change ($180,623) ($41,038) ($89,514) Annual per-loan cost of servicing: Range $78 – $99 $78 – $97 $79 – $97 Weighted average $93 $89 $89 Effect on fair value of (3): 5% adverse change ($22,944) ($6,247) ($11,216) 10% adverse change ($45,888) ($12,494) ($22,431) 20% adverse change ($91,775) ($24,987) ($44,863) (1) Weighted average inputs are based on UPB of the underlying mortgage loans. (2) The Company applies a pricing spread to the United States Dollar LIBOR curve for purposes of discounting cash flows relating to MSRs. (3) For MSRs carried at fair value, an adverse change in one of the above-mentioned key inputs is expected to result in a reduction in fair value which would be recognized in income. For MSRs carried at lower of amortized cost or fair value, an adverse change in one of the above-mentioned key inputs may have resulted in recognition of MSR impairment. The extent of the recognized MSR impairment depended on the relationship of fair value to the carrying value of such MSRs immediately before the adverse change event. (4) Prepayment speed is measured using Life Total CPR.
Mortgage servicing liabilities
Fair Value
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items	December 31, 2018 2017 MSL and pool characteristics: Carrying value (in thousands) $ $ Unpaid principal balance of underlying mortgage loans (in thousands) $ $ Servicing fee rate (in basis points) Key inputs: Pricing spread (1) Prepayment speed (2) Average life (in years) Annual per-loan cost of servicing $ $ (1) The Company applies a pricing spread to the United States Dollar LIBOR curve for purposes of discounting cash flows relating to MSLs. Prepayment speed is measured using Life Total CPR.
Excess servicing spread financing
Fair Value
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items	December 31, December 31, 2018 2017 Carrying value (in thousands) $216,110 $236,534 ESS and pool characteristics: Unpaid principal balance of underlying mortgage loans (in thousands) $23,196,033 $27,217,199 Average servicing fee rate (in basis points) 34 34 Average excess servicing spread (in basis points) 19 19 Key inputs (1): Pricing spread (2): Range 2.8% – 3.2% 3.8% – 4.3% Weighted average 3.1% 4.1% Annualized prepayment speed (3): Range 8.2% – 29.5% 8.4% – 41.4% Weighted average 9.7% 10.8% Average life (in years): Range 1.6 – 7.6 1.4 – 7.7 Weighted average 6.8 6.5 (1) Weighted average inputs are based on UPB of the underlying mortgage loans. (2) The Company applies a pricing spread to the United States Dollar LIBOR curve for purposes of discounting cash flows relating to ESS. (3) Prepayment speed is measured using Life Total CPR.
Interest rate lock commitments
Fair Value
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items	Key inputs (1) December 31, 2018 December 31, 2017 Pull-through rate: Range 16.6% – 100% 25.0% – 100% Weighted average 84.1% 85.6% Mortgage servicing rights value expressed as: Servicing fee multiple: Range 1.5 – 5.5 1.4 – 5.8 Weighted average 3.8 4.0 Percentage of unpaid principal balance: Range 0.4% – 3.2% 0.3% – 3.0% Weighted average 1.5% 1.4% (1) Weighted average inputs are based on the committed amounts.
Mortgage servicing rights
Fair Value
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items, excluding MSR purchases	Year ended December 31, 2018 2017 2016 Fair Fair Amortized Fair Amortized value value cost value cost (Amount recognized and unpaid principal balance of underlying mortgage loans amounts in thousands) MSR and pool characteristics: Amount recognized $591,757 $24,471 $556,630 $17,319 $560,212 Unpaid principal balance of underlying mortgage loans $42,008,585 $2,316,539 $44,664,551 $1,452,779 $44,827,516 Weighted average servicing fee rate (in basis points) 36 31 31 33 30 Key inputs (1): Pricing spread (2): Range 5.8% – 16.4% 7.6% – 11.2% 7.6% – 15.2% 7.2% – 10.5% 7.2% – 14.4% Weighted average 9.9% 10.5% 10.7% 9.2% 9.5% Annual total prepayment speed (3): Range 3.9% – 61.8% 3.9% – 71.8% 3.4% – 47.6% 3.3% – 53.8% 2.8% – 50.9% Weighted average 10.8% 12.6% 9.1% 11.8% 9.0% Life (in years): Range 0.5 – 11.6 0.8 – 11.7 1.5 – 12.2 0.5 – 11.9 1.3 – 12.9 Weighted average 7.3 6.6 8.1 6.8 8.1 Per-loan annual cost of servicing: Range $78 – $99 $78 – $101 $79 – $101 $68 – $105 $68 – $106 Weighted average $91 $89 $89 $88 $89 (1) Weighted average inputs are based on UPB of the underlying mortgage loans. (2) Pricing spread represents a margin that is applied to a reference interest rate’s forward rate curve to develop periodic discount rates. The Company applies a pricing spread to the United States Dollar London Interbank Offered Rate (“LIBOR”) curve for purposes of discounting cash flows relating to MSRs. (3) Prepayment speed is measured using Life Total CPR.
Mortgage loans held for sale
Fair Value
Quantitative summary of key inputs or assumptions used in the valuation of financial statement items	Key inputs (1) December 31, 2018 December 31, 2017 Discount rate: Range 2.8% – 9.2% 2.9% – 10.0% Weighted average 2.9% 2.9% Twelve-month projected housing price index change: Range 2.2% – 5.0% 3.1% – 5.6% Weighted average 3.5% 3.6% Voluntary prepayment / resale speed (2): Range 0.1% – 21.8% 0.2% – 72.2% Weighted average 20.1% 44.6% Total prepayment speed (3): Range 0.1% – 40.5% 0.2% – 75.2% Weighted average 37.7% 55.8% (1) Weighted average inputs are based on fair value of mortgage loans. (2) Voluntary prepayment/resale speed is measured using Life Voluntary Conditional Prepayment Rate (“CPR”). (3) Total prepayment speed is measured using Life Total CPR.

Mortgage Loans Held for Sale _2

Mortgage Loans Held for Sale at Fair Value (Tables)	12 Months Ended
	Dec. 31, 2018
Mortgage Loans Held for Sale at Fair Value
Summary of mortgage loans held for sale at fair value	December 31, December 31, 2018 2017 (in thousands) Government-insured or guaranteed $ 2,116,126 $ 2,085,764 Conventional conforming 145,513 231,128 Purchased from Ginnie Mae pools serviced by the Company 250,585 777,300 Repurchased pursuant to representations and warranties 9,423 4,911 $ 2,521,647 $ 3,099,103 Fair value of mortgage loans pledged to secure: Assets sold under agreements to repurchase $ 1,923,857 $ 2,530,299 Mortgage loan participation purchase and sale agreements 555,001 551,688 $ 2,478,858 $ 3,081,987

Derivative Activities (Tables)

Derivative Activities (Tables)	12 Months Ended
	Dec. 31, 2018
Derivative Activities
Summary of derivative financial instruments	December 31, 2018 December 31, 2017 Fair value Fair value Notional Derivative Derivative Notional Derivative Derivative Instrument amount assets liabilities amount assets liabilities (in thousands) Derivatives not designated as hedging instruments: Not subject to master netting arrangements: Interest rate lock commitments 2,805,400 $ 50,507 $ 1,169 3,654,955 $ 60,012 $ 1,740 Repurchase agreement derivatives 26,770 — 10,656 — Used for hedging purposes: Forward purchase contracts 6,657,026 35,916 215 4,920,883 4,288 1,272 Forward sales contracts 6,890,046 437 26,762 5,204,796 2,101 7,031 MBS put options 4,635,000 720 — 4,925,000 3,481 — MBS call options 1,450,000 2,135 — — — — Put options on interest rate futures purchase contracts 3,085,000 866 — 2,125,000 3,570 — Call options on interest rate futures purchase contracts 1,512,500 5,965 — 100,000 938 — Treasury futures purchase contracts 835,000 — — 100,000 — — Treasury futures sale contracts 1,450,000 — — — — — Interest rate swap futures purchase contracts 625,000 — — 1,400,000 — — Total derivatives before netting 123,316 28,146 85,046 10,043 Netting (26,969) (25,082) (6,867) (4,247) $ 96,347 $ 3,064 $ 78,179 $ 5,796 Deposits placed with derivative counterparties $ 1,887 $ 2,620
Summary of the notional value activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans held for sale at fair value and MSRs	Year ended December 31, 2018 Amount Amount beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts 4,920,883 184,780,152 (183,044,009) 6,657,026 Forward sale contracts 5,204,796 230,735,936 (229,050,686) 6,890,046 MBS put options 4,925,000 31,085,000 (31,375,000) 4,635,000 MBS call options — 14,325,000 (12,875,000) 1,450,000 Put options on interest rate futures purchase contracts 2,125,000 20,559,800 (19,599,800) 3,085,000 Call options on interest rate futures purchase contracts 100,000 4,387,500 (2,975,000) 1,512,500 Put options on interest rate futures sale contracts — 20,474,800 (20,474,800) — Call options on interest rate futures sale contracts — 2,100,000 (2,100,000) — Treasury futures purchase contracts 100,000 9,837,500 (9,102,500) 835,000 Treasury futures sale contracts — 11,213,800 (9,763,800) 1,450,000 Interest rate swap futures purchase contracts 1,400,000 1,510,000 (2,285,000) 625,000 Interest rate swap futures sales contracts — 2,285,000 (2,285,000) — Year ended December 31, 2017 Amount Amount beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts 12,746,191 181,761,564 (189,586,872) 4,920,883 Forward sale contracts 16,577,942 226,000,107 (237,373,253) 5,204,796 MBS put options 1,175,000 25,050,000 (21,300,000) 4,925,000 MBS call options 1,600,000 17,700,000 (19,300,000) — Put options on interest rate futures purchase contracts 1,125,000 11,360,000 (10,360,000) 2,125,000 Call options on interest rate futures purchase contracts 900,000 1,939,300 (2,739,300) 100,000 Put options on interest rate futures sale contracts — 10,010,000 (10,010,000) — Call options on interest rate futures sale contracts — 2,739,300 (2,739,300) — Treasury futures purchase contracts — 544,900 (444,900) 100,000 Treasury futures sale contracts — 444,900 (444,900) — Interest rate swap futures purchase contracts 200,000 2,100,000 (900,000) 1,400,000 Interest rate swap futures sales contracts — 900,000 (900,000) — Year ended December 31, 2016 Amount Amount beginning of Dispositions/ end of Instrument year Additions expirations year (in thousands) Forward purchase contracts 5,254,293 210,412,697 (202,920,799) 12,746,191 Forward sale contracts 6,230,811 262,202,884 (251,855,753) 16,577,942 MBS put options 1,275,000 19,225,000 (19,325,000) 1,175,000 MBS call options — 1,600,000 — 1,600,000 Put options on interest rate futures purchase contracts 1,650,000 15,331,000 (15,856,000) 1,125,000 Call options on interest rate futures purchase contracts 600,000 5,687,500 (5,387,500) 900,000 Put options on interest rate futures sale contracts — 9,436,000 (9,436,000) — Call options on interest rate futures sale contracts — 550,000 (550,000) — Treasury futures purchase contracts — 585,800 (585,800) — Treasury futures sale contracts — 585,800 (585,800) — Interest rate swap futures purchase contracts — 400,000 (200,000) 200,000 Interest rate swap futures sales contracts — 200,000 (200,000) —
Summaries of derivative assets and related netting amounts	December 31, 2018 December 31, 2017 Gross Gross amount Net amount Gross Gross amount Net amount amount of offset in the of assets in the amount of offset in the of assets in the recognized consolidated consolidated recognized consolidated consolidated assets balance sheet balance sheet assets balance sheet balance sheet (in thousands) Derivatives not subject to master netting arrangements: Interest rate lock commitments $ 50,507 $ — $ 50,507 $ 60,012 $ — $ 60,012 Repurchase agreement derivatives 26,770 — 26,770 10,656 — 10,656 77,277 — 77,277 70,668 — 70,668 Derivatives subject to master netting arrangements: Forward purchase contracts 35,916 — 35,916 4,288 — 4,288 Forward sale contracts 437 — 437 2,101 — 2,101 MBS put options 720 — 720 3,481 — 3,481 MBS call options 2,135 — 2,135 — — — Put options on interest rate futures purchase contracts 866 — 866 3,570 — 3,570 Call options on interest rate futures purchase contracts 5,965 — 5,965 938 — 938 Netting (26,969) (26,969) — (6,867) (6,867) 46,039 (26,969) 19,070 14,378 (6,867) 7,511 $ 123,316 $ (26,969) $ 96,347 $ 85,046 $ (6,867) $ 78,179
Summary of the amount of derivative asset positions by significant counterparty after considering master netting arrangements and financial instruments or cash pledged	December 31, 2018 December 31, 2017 Gross amount not Gross amount not offset in the offset in the consolidated consolidated Net amount balance sheet Net amount balance sheet of assets in the Cash of assets in the Cash consolidated Financial collateral Net consolidated Financial collateral Net balance sheet instruments received amount balance sheet instruments received amount (in thousands) Interest rate lock commitments $ 50,507 $ — $ — $ 50,507 $ 60,012 $ — $ — $ 60,012 Deutsche Bank 26,770 — — 26,770 10,656 — — 10,656 RJ O'Brien 6,831 — — 6,831 4,508 — — 4,508 Wells Fargo Bank, N.A. 3,707 — — 3,707 — — — — Bank of America, N.A. 2,781 — — 2,781 — — — — Citibank, N.A. 2,488 — — 2,488 472 — — 472 JPMorgan Chase Bank, N.A. 1,399 — — 1,399 267 — — 267 Federal National Mortgage Association 456 — — 456 1,092 — — 1,092 Others 1,408 — — 1,408 1,172 — — 1,172 $ 96,347 $ — $ — $ 96,347 $ 78,179 $ — $ — $ 78,179
Summary of net derivative liabilities and assets sold under agreements to repurchase and related netting amounts	December 31, 2018 December 31, 2017 Net Net amount amount Gross Gross amount of liabilities Gross Gross amount of liabilities amount of offset in the in the amount of offset in the in the recognized consolidated consolidated recognized consolidated consolidated liabilities balance sheet balance sheet liabilities balance sheet balance sheet (in thousands) Derivatives not subject to master netting arrangements – Interest rate lock commitments $ 1,169 $ — $ 1,169 $ 1,740 $ — $ 1,740 Derivatives subject to a master netting arrangement: Forward purchase contracts 215 — 215 1,272 — 1,272 Forward sale contracts 26,762 — 26,762 7,031 — 7,031 Netting — (25,082) (25,082) — (4,247) (4,247) 26,977 (25,082) 1,895 8,303 (4,247) 4,056 Total derivatives 28,146 (25,082) 3,064 10,043 (4,247) 5,796 Assets sold under agreements to repurchase: Amount outstanding 1,935,200 — 1,935,200 2,380,866 — 2,380,866 Unamortized premiums and debt issuance costs, net (1,341) — (1,341) 672 — 672 1,933,859 — 1,933,859 2,381,538 — 2,381,538 $ 1,962,005 $ (25,082) $ 1,936,923 $ 2,391,581 $ (4,247) $ 2,387,334
Summary of amount of derivative liabilities and assets sold under agreements to repurchase by significant counterparty after considering master netting arrangements and financial instruments or cash pledged	December 31, 2018 December 31, 2017 Gross amounts Gross amounts not offset in the not offset in the Net amount consolidated Net amount consolidated of liabilities balance sheet of liabilities balance sheet in the Cash in the Cash consolidated Financial collateral Net consolidated Financial collateral Net balance sheet instruments pledged amount balance sheet instruments pledged amount (in thousands) Interest rate lock commitments $ 1,169 $ — $ — $ 1,169 $ 1,740 $ — $ — $ 1,740 Credit Suisse First Boston Mortgage Capital LLC 691,030 (690,766) — 264 1,010,562 (1,010,320) — 242 Deutsche Bank 741,978 (741,978) — — 593,864 (593,864) — — Bank of America, N.A. 170,820 (170,820) — — 406,787 (406,355) — 432 BNP Paribas 149,675 (149,482) — 193 87,753 (87,753) — — Morgan Stanley Bank, N.A. 77,687 (77,687) — — 139,491 (138,983) — 508 JPMorgan Chase Bank, N.A. 54,326 (54,326) — — 90,442 (90,442) — — Royal Bank of Canada 35,181 (35,181) — — 24,835 (23,752) — 1,083 Citibank, N.A. 14,960 (14,960) — — 23,010 (23,010) — — Barclays Capital — — — — 6,387 (6,387) — — Others 1,438 — — 1,438 1,791 — — 1,791 $ 1,938,264 $ (1,935,200) $ — $ 3,064 $ 2,386,662 $ (2,380,866) $ — $ 5,796
Summary of gains (losses) recognized on derivative financial instruments and the respective income statement line items	Year ended December 31, Derivative activity Income statement line 2018 2017 2016 (in thousands) Interest rate lock commitments Net gains on mortgage loans held for sale at fair value $ (8,934) $ (1,120) $ 15,618 Repurchase agreement derivatives Interest expense $ (1,704) $ (330) $ — Hedged item: Interest rate lock commitments and mortgage loans held for sale Net gains on mortgage loans held for sale at fair value $ 81,522 $ (21,255) $ 20,619 Mortgage servicing rights Net mortgage loan servicing fees – Amortization, impairment and change in fair value of mortgage servicing rights and mortgage servicing liabilities $ (121,045) $ (37,855) $ 26,405

Mortgage Servicing Rights and_2

Mortgage Servicing Rights and Mortgage Servicing Liabilities (Tables)	12 Months Ended
	Dec. 31, 2018
Mortgage Servicing Rights and Mortgage Servicing Liabilities
Schedule of activity in MSRs carried at fair value	Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 638,010 $ 515,925 $ 660,247 Reclassification of mortgage servicing rights previously accounted for under the amortization method pursuant to adoption of the fair value method of accounting 1,482,426 — — Balance after reclassification 2,120,436 515,925 660,247 Additions: Purchases 237,803 183,850 146 Resulting from mortgage loan sales 591,757 24,471 17,319 829,560 208,321 17,465 Change in fair value due to: Changes in inputs used in valuation model (1) 174,458 (4,771) (80,244) Other changes in fair value (2) (303,842) (81,465) (81,543) Total change in fair value (129,384) (86,236) (161,787) Balance at end of year $ 2,820,612 $ 638,010 $ 515,925 December 31, 2018 2017 (in thousands) Fair value of mortgage servicing rights pledged to secure Assets sold under agreements to repurchase and Notes payable $ 2,807,333 $ 630,711 (1) Principally reflects changes in discount rate and prepayment speed inputs, primarily due to changes in market interest rates, and changes in expected borrower performance and servicer losses given default. (2) Represents changes due to realization of cash flows.
Schedule of activity in MSRs carried at lower of amortized cost or fair value	Year ended December 31, 2018 2017 2016 (in thousands) Amortized cost: Balance at beginning of year $ 1,583,378 $ 1,206,694 $ 798,925 Transfer of mortgage servicing rights to mortgage servicing rights carried at fair value pursuant to adoption of the fair value method of accounting (1,583,378) — — Balance after reclassification — 1,206,694 798,925 Mortgage servicing rights resulting from mortgage loan sales — 556,630 560,212 Amortization — (179,946) (139,666) Application of valuation allowance to recognize other-than-temporary impairment — (12,777) Balance at end of year — 1,583,378 1,206,694 Valuation allowance: Balance at beginning of year (101,800) (94,947) (47,237) Reduction resulting from transfer of mortgage servicing rights to mortgage servicing rights carried at fair value pursuant to adoption of the fair value method of accounting 101,800 — — Balance after reclassification — (94,947) (47,237) Increase in valuation allowance — (6,853) (60,487) Application of valuation allowance to recognize other-than-temporary impairment — — 12,777 Balance at end of year — (101,800) (94,947) Mortgage servicing rights, net at end of year $ — $ 1,481,578 $ 1,111,747 Fair value of mortgage servicing rights at: Beginning of year $ 1,112,302 $ 766,345 End of year $ 1,482,426 $ 1,112,302 December 31, 2017 (in thousands) Fair value of mortgage servicing rights pledged to secure assets sold under agreements to repurchase and note payable $ 1,467,356
Schedule of activity in mortgage servicing liability carried at fair value	Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 14,120 $ 15,192 $ 1,399 Mortgage servicing liabilities resulting from mortgage loan sales 7,601 17,229 14,991 Mortgage servicing liabilities assumed — — 10,139 Changes in fair value due to: Changes in valuation inputs used in valuation model (1) 10,787 6,526 5,264 Other changes in fair value (2) (23,827) (24,827) (16,601) Total change in fair value (13,040) (18,301) (11,337) Balance at end of year $ 8,681 $ 14,120 $ 15,192 (1) Principally reflects changes in expected borrower performance and servicer losses given default. (2) Represents changes due to realization of cash flows.
Summary of servicing fees, late fees and ancillary and other fees relating to MSRs recorded on the consolidated statements of income	Year ended December 31, 2018 2017 2016 (in thousands) Contractual servicing fees $ 585,101 $ 475,848 $ 385,633 Ancillary and other fees: Late charges 27,940 25,097 19,341 Other 6,276 4,603 4,706 $ 619,317 $ 505,548 $ 409,680

Furniture, Fixtures, Equipmen_2

Furniture, Fixtures, Equipment and Building Improvements (Tables)	12 Months Ended
	Dec. 31, 2018
Furniture, fixtures, equipment and building improvements
Summary of depreciation and amortization expenses	Year ended December 31, 2018 2017 2016 (in thousands) Depreciation and amortization expenses $ 9,500 $ 8,150 $ 6,842 Less: Depreciation and amortization allocated to PMT (1) — (1,396) (1,350) Depreciation and amortization expenses included in Occupancy and equipment $ 9,500 $ 6,754 $ 5,492 The Company’s management agreement with PMT provides for allocation by the Company of certain common overhead costs to PMT. The Company adopted ASU 2014-09 using the modified retrospective method effective January 1, 2018, Adoption of ASU 2014-09 required the Company to include those reimbursements from PMT of $1.2 million in Other revenue starting January 1, 2018. Before adoption of ASU 2014-09, the Company included such reimbursements in the respective expense line items.
Furniture, Fixtures, Equipment and Building Improvements
Furniture, fixtures, equipment and building improvements
Schedule of furniture, fixtures, equipment and building improvements	December 31, 2018 2017 (in thousands) Furniture, fixtures, equipment and building improvements $ 55,251 $ 54,186 Less: Accumulated depreciation and amortization (21,877) (24,733) $ 33,374 $ 29,453 Fixed assets pledged to secure obligations under capital lease $ 16,281 $ 23,915

Capitalized Software (Tables)

Capitalized Software (Tables)	12 Months Ended
	Dec. 31, 2018
Capitalized Software
Long-lived asset disclosures
Summary of capitalized software	December 31, 2018 2017 (in thousands) Cost $ 45,039 $ 29,621 Less: Accumulated amortization (5,291) (3,892) $ 39,748 $ 25,729 Capitalized software pledged to secure obligation under capital lease $ 1,017 $ 1,568

Carried Interest Due from Inv_2

Carried Interest Due from Investment Funds (Tables)	12 Months Ended
	Dec. 31, 2018
Carried Interest Due from Investment Funds
Summary of activity in the Company's Carried interest due from Investment Funds	Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 8,552 $ 70,906 $ 69,926 Carried Interest recognized during the year (365) (1,040) 980 Cash received during the year (8,187) (61,314) — Balance at end of year $ — $ 8,552 $ 70,906

Borrowings (Tables)

Borrowings (Tables)	12 Months Ended
	Dec. 31, 2018
Borrowings
Summary of financial data pertaining to assets sold under agreements to repurchase	Year ended December 31, 2018 2017 2016 (dollars in thousands) Average balance of assets sold under agreements to repurchase $ 1,626,729 $ 1,829,257 $ 1,438,181 Weighted average interest rate (1) 3.87 % 3.18 % 2.91 % Total interest expense (2) $ 22,463 $ 60,286 $ 49,791 Maximum daily amount outstanding $ 2,380,121 $ 3,022,656 $ 2,661,746 December 31, 2018 2017 (dollars in thousands) Carrying value: Unpaid principal balance $ 1,935,200 $ 2,380,866 Unamortized debt issuance premiums and costs, net (1,341) 672 $ 1,933,859 $ 2,381,538 Weighted average interest rate 4.22 % 3.24 % Available borrowing capacity (3): Committed $ 695,767 $ 316,503 Uncommitted 2,354,033 2,257,631 $ 3,049,800 $ 2,574,134 Fair value of assets securing repurchase agreements: Mortgage loans held for sale $ 1,923,857 $ 2,530,299 Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell $ 131,025 $ 144,128 Servicing advances (4) $ 162,895 $ 114,643 Mortgage servicing rights (4) $ 2,807,333 $ 2,098,067 Margin deposits placed with counterparties (5) $ 3,750 $ 3,750 (1) Excludes the effect of amortization of net premiums totaling $4 0.5 million and $1 .3 million, for the years ended December 31, 2018 and 2017, respectively; and debt issuance costs of $7.3 million for the year ended December 31, 2016. (2) In 2017, PFSI entered into a master repurchase agreement that provides the Company with incentives to finance mortgage loans approved for satisfying certain consumer relief characteristics as provided in the agreement. The Company included $48.1 million and $9.2 million of such incentives as a reduction in Interest expense during the year ended December 31, 2018 and 2017, respectively. The master repurchase agreement is subject to a rolling six-month term through August 21, 2019, unless terminated earlier at the option of the lender. The Company expects that it will cease to accrue the incentives under the repurchase agreement in the second quarter of 2019. (3) The amount the Company is able to borrow under asset repurchase agreements is tied to the fair value of unencumbered assets eligible to secure those agreements and the Company’s ability to fund the agreements’ margin requirements relating to the assets financed. (4) Beneficial interests in the Ginnie Mae MSRs and servicing advances are pledged to the Issuer Trust and together serve as the collateral backing the VFN, 2018-GT1 Notes and 2018-GT2 Notes described in Notes Payable . The VFN financing is included in Assets sold under agreements to repurchase and 2018-GT1 Notes and 2018-GT2 Notes are included in Notes payable on the Company's consolidated balance sheet. (5) Margin deposits are included in Other assets on the Company’s consolidated balance sheets.
Summary of maturities of outstanding advances under repurchase agreements by maturity date	Remaining maturity at December 31, 2018 Balance (dollars in thousands) Within 30 days $ 397,374 Over 30 to 90 days 1,397,080 Over 90 to 180 days 746 Over one to two years 140,000 Total assets sold under agreements to repurchase $ 1,935,200 Weighted average maturity (in months) 2.9
Summary of amount at risk relating to the assets sold under agreements to repurchase by counterparty	Weighted average maturity of advances under repurchase Counterparty Amount at risk agreement Facility maturity (in thousands) Credit Suisse First Boston Mortgage Capital LLC $ 1,416,794 April 26, 2020 April 26, 2020 Credit Suisse First Boston Mortgage Capital LLC $ 33,906 February 2, 2019 April 26, 2019 Deutsche Bank AG $ 53,901 March 16, 2019 June 30, 2019 Bank of America, N.A. $ 15,863 January 30, 2019 October 28, 2019 BNP Paribas $ 9,222 March 18, 2019 August 2, 2019 Morgan Stanley Bank, N.A. $ 5,825 March 7, 2019 August 23, 2019 JP Morgan Chase Bank, N.A. $ 5,286 March 3, 2019 October 11, 2019 Royal Bank of Canada $ 2,129 January 25, 2019 March 29, 2019 Citibank, N.A. $ 586 February 28, 2019 June 7, 2019
Summary of participating mortgage loans	Year ended December 31, 2018 2017 2016 (dollars in thousands) Average balance $ 248,539 $ 208,613 $ 268,416 Weighted average interest rate (1) 3.29 % 2.34 % 1.75 % Total interest expense $ 8,754 $ 5,496 $ 5,523 Maximum daily amount outstanding $ 722,611 $ 532,266 $ 1,268,871 (1) Excludes the effect of amortization of debt issuance costs totaling $588,000, $ 545,000 and $ 740,000 for the years ended December 31, 2018, 2017 and 2016, respectively. December 31, 2018 2017 (dollars in thousands) Carrying value: Unpaid principal balance $ 532,466 $ 527,706 Unamortized debt issuance costs (215) (311) $ 532,251 $ 527,395 Weighted average interest rate 3.77 % 2.81 % Fair value of mortgage loans pledged to secure mortgage loan participation purchase and sale agreements $ 555,001 $ 551,688
Summary of note payable	Year ended December 31, 2018 2017 2016 (dollars in thousands) Average balance $ 1,169,452 $ 586,135 $ 108,475 Weighted average interest rate (1) 5.29 % 5.86 % 5.13 % Total interest expense $ 73,610 $ 39,369 $ 8,688 Maximum daily amount outstanding $ 1,300,000 $ 900,006 $ 153,849 (1) Excluding the effect of amortization of debt issuance costs and non-utilization fees totaling $11. 7 million, $ 4.5 million and $ 3.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. December 31, 2018 2017 (dollars in thousands) Carrying value: Unpaid principal balance $ 1,300,000 $ 900,006 Unamortized debt issuance costs (7,709) (8,501) $ 1,292,291 $ 891,505 Weighted average interest rate 5.07 % 5.66 % Unused amount $ 150,000 $ 280,000 Assets pledged to secure notes payable: Cash $ 108,174 $ 20,765 Servicing advances (1) $ 162,895 $ 114,643 Mortgage servicing rights (1) $ 2,807,333 $ 2,098,067 Other assets ‒ Carried Interest $ — $ 8,552 (1) Beneficial interests in the Ginnie Mae MSRs and servicing advances are pledged to the Issuer Trust and together serve as the collateral backing the VFN, 2018-GT1 Notes and 2018-GT2 Notes. The VFN financing is included in Assets sold under agreements to repurchase and 2018-GT1 Notes and 2018-GT2 Notes are included in Notes payable on the Company's consolidated balance sheet.
Summary of obligations under capital lease	Year ended December 31, 2018 2017 2016 (dollars in thousands) Average balance $ 13,498 $ 24,830 $ 18,620 Weighted average interest rate 3.96 % 3.07 % 2.47 % Total interest expense $ 536 $ 769 $ 510 Maximum daily amount outstanding $ 20,971 $ 30,044 $ 24,242 December 31, December 31, 2018 2017 (in thousands) Unpaid principal balance $ 6,605 $ 20,971 Weighted average interest rate 4.46 % 3.26 % Assets pledged to secure obligations under capital lease: Furniture, fixtures and equipment $ 16,281 $ 23,915 Capitalized software $ 1,017 $ 1,568
Summary of roll forward of Excess Servicing Spread Financing	Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 236,534 $ 288,669 $ 412,425 Issuances of excess servicing spread to PennyMac Mortgage Investment Trust pursuant to recapture agreement 2,688 5,244 6,603 Accrual of interest 15,138 16,951 22,601 Repayment (46,750) (54,980) (69,992) Settlement (1) — — (59,045) Change in fair value 8,500 (19,350) (23,923) Balance at end of year $ 216,110 $ 236,534 $ 288,669 On February 29, 2016, the Company and PMT terminated that certain master spread acquisition and MSR servicing agreement that the parties entered into effective February 1, 2013 (the “2/1/2013 Spread Acquisition Agreement”) and all amendments thereto. In connection with the termination of 2/1/2013 Spread Acquisition Agreement, the Company reacquired from PMT all of its right, title and interest in and to all of the Fannie Mae ESS previously sold by the Company to PMT under the 2/1/2013 Spread Acquisition Agreement and then subject to such 2/1/2013 Spread Acquisition Agreement. On February 29, 2016, the Company also reacquired from PMT all of its right, title and interest in and to all of the Freddie Mac ESS previously sold to PMT by the Company.

Liability for Losses Under Re_2

Liability for Losses Under Representations and Warranties (Tables)	12 Months Ended
	Dec. 31, 2018
Liability for Losses Under Representations and Warranties
Summary of repurchase activity	Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 20,053 $ 19,067 $ 20,611 Provision for losses on mortgage loans sold: Resulting from sales of mortgage loans 5,824 5,890 7,090 Reduction in liability due to change in estimate (4,672) (4,301) (7,672) Incurred losses, net (50) (603) (962) Balance at end of year $ 21,155 $ 20,053 $ 19,067 Unpaid principal balance of mortgage loans subject to representations and warranties at end of year $ 137,849,704 $ 120,855,101

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2018
Income Taxes
Schedule of the Company's income tax expense (benefit)	Year ended December 31, 2018 2017 2016 (in thousands) Current expense: Federal $ 12 $ (81) $ (1,622) State 274 56 (244) Total current expense 286 (25) (1,866) Deferred expense: Federal 23,395 14,674 38,082 State (427) 9,738 9,887 Total deferred expense 22,968 24,412 47,969 Total provision for income taxes $ 23,254 $ 24,387 $ 46,103
Schedule of reconciliation of the Company's provision for income taxes at statutory rates to the provision for income taxes at the Company's effective tax rate	Year ended December 31, 2018 2017 2016 Federal income tax statutory rate % % 35.0 % Less: Income attributable to noncontrolling interest (12.3) % (22.0) % (24.8) % State income taxes, net of federal benefit % % 1.6 % Tax rate revaluation (2.2) % (8.0) % % Other (0.1) % % 0.2 % Effective tax rate % % %
Schedule of components of the Company's provision for deferred income taxes	Year ended December 31, 2018 2017 2016 (in thousands) Mortgage servicing rights $ 46,064 $ — $ — Investment in PennyMac — 34,011 40,493 Net operating loss (14,902) (9,675) 8,110 Compensation accruals (3,596) — — Reserves and losses (1,848) — — Additional tax basis in partnership from exchanges of partnership units into the Company's common stock (1,391) — — Other (1,302) — — Tax credits (57) 76 (634) Total provision for deferred income taxes $ 22,968 $ 24,412 $ 47,969
Schedule of components of income taxes payable, net	December 31, 2018 2017 (in thousands) Taxes currently payable (receivable) $ 218 $ (2,126) Deferred income tax liability, net 400,328 54,286 Income taxes payable $ 400,546 $ 52,160
Schedule of tax effects of temporary differences that gave rise to deferred income tax assets and liabilities	December 31, 2018 2017 (in thousands) Deferred income tax assets: Additional tax basis in partnership from exchanges of partnership units into the Company's common stock $ 44,165 $ — Compensation accruals 28,752 — Reserves and losses 26,589 — Net operating loss carryforward 25,104 10,202 Tax credits carryforward 616 558 Gross deferred tax assets 125,226 10,760 Deferred income tax liabilities: Mortgage servicing rights 517,042 — Investment in PennyMac — 65,046 Other 8,512 — Gross deferred tax liabilities 525,554 65,046 Net deferred income tax liability $ 400,328 $ 54,286

Commitments and Contingencies (

Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2018
Commitments and Contingencies.
Summary of future minimum lease payments	Year ended December 31, Future minimum lease payments (in thousands) 2019 $ 15,586 2020 15,664 2021 14,693 2022 12,107 2023 11,155 Thereafter 24,495 $ 93,700

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	12 Months Ended
	Dec. 31, 2018
Stockholders' Equity.
Summary of share repurchase activity	Year ended December 31, Cumulative 2018 2017 total (1) (in thousands) Shares of common repurchased 260 505 765 Cost of shares of common stock repurchased $ 5,293 $ 8,599 $ 13,892 (1) Amounts represent the total shares common stock repurchased under the stock repurchase program through December 31, 2018.

Noncontrolling Interest (Tables

Noncontrolling Interest (Tables)	12 Months Ended
	Dec. 31, 2018
Noncontrolling Interest.
Noncontrolling Interest	Year ended December 31, 2018 2017 2016 (in thousands) Net income attributable to PennyMac Financial Services, Inc. common stockholders $ 87,694 $ 100,757 $ 66,079 Increase in the Company's paid-in capital accounts for exchanges of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc. $ 33,156 $ 27,119 $ 6,877 Shares of Class A common stock of PennyMac Financial Services, Inc. issued pursuant to exchange of Class A units of Private National Mortgage Acceptance Company, LLC by noncontrolling interest unitholders and issued as equity compensation 1,635 1,608 301 Increase in the Company's paid-in capital for exchanges of Class A units of Private National Mortgage Acceptance Company, LLC to common stock of PennyMac Financial Services, Inc. pursuant to the Reorganization $ 1,064,320 $ — $ — Shares of common stock of PennyMac Financial Services, Inc. issued for exchange of Class A units of Private National Mortgage Acceptance Company, LLC by noncontrolling interest unitholders pursuant to the Reorganization 52,263 — — December 31, 2018 2017 Percentage of Private National Mortgage Acceptance Company, LLC held by noncontrolling interest — % 69.2 %

Net Gains on Mortgage Loans H_2

Net Gains on Mortgage Loans Held for Sale (Tables)	12 Months Ended
	Dec. 31, 2018
Net Gains on Mortgage Loans Held for Sale
Net Gains on Mortgage Loans Held for Sale	Year ended December 31, 2018 2017 2016 (in thousands) From non-affiliates: Cash loss: Mortgage loans $ (469,647) $ (174,669) $ (62,283) Hedging activities 93,288 (16,866) 10,275 (376,359) (191,535) (52,008) Non-cash gain: Mortgage servicing rights and mortgage servicing liabilities resulting from mortgage loan sales 584,156 563,872 562,540 Provision for losses relating to representations and warranties: Pursuant to mortgage loan sales (5,824) (5,890) (7,090) Reduction in liability due to change in estimate 4,672 4,301 7,672 Change in fair value relating to mortgage loans and derivatives held at year end: Interest rate lock commitments (8,934) (1,120) 15,618 Mortgage loans (1,506) 4,576 2,796 Hedging derivatives (11,766) (4,389) 10,344 184,439 369,815 539,872 From PennyMac Mortgage Investment Trust 64,583 21,989 (8,092) $ 249,022 $ 391,804 $ 531,780

Net Interest Income (Expense) (

Net Interest Income (Expense) (Tables)	12 Months Ended
	Dec. 31, 2018
Net Interest Income (Expense)
Summary of net interest income (expense)	Year ended December 31, 2018 2017 2016 (in thousands) Interest income: From non-affiliates: Short-term investments $ 2,038 $ 2,356 $ 2,558 Mortgage loans held for sale at fair value 128,732 91,972 54,584 Placement fees relating to custodial funds 78,184 40,813 16,155 208,954 135,141 73,297 From PennyMac Mortgage Investment Trust—Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell 7,462 8,038 7,830 216,416 143,179 81,127 Interest expense: To non-affiliates: Assets sold under agreements to repurchase (1) 22,463 60,286 49,791 Mortgage loan participation purchase and sale agreements 8,754 5,496 5,523 Notes payable 73,610 39,369 8,688 Obligations under capital lease 536 769 510 Interest shortfall on repayments of mortgage loans serviced for Agency securitizations 18,777 16,933 15,102 Interest on mortgage loan impound deposits 5,319 4,716 3,991 129,459 127,569 83,605 To PennyMac Mortgage Investment Trust—Excess servicing spread financing at fair value 15,138 16,951 22,601 144,597 144,520 106,206 $ 71,819 $ (1,341) $ (25,079) In 2017, the Company entered a master repurchase agreement that provides the Company with incentives to finance mortgage loans approved for satisfying certain consumer relief characteristics as provided in the agreement. During the years ended December 31, 2018 and 2017, the Company included $48.1 million and $9.2 million, respectively of such incentives as a reduction in Interest expense . The master repurchase agreement is subject to a rolling six-month term through August 21, 2019, unless terminated earlier at the option of the lender. The Company expects that it will cease to accrue the incentives under the repurchase agreement in the second quarter of 2019.

Stock-based Compensation (Table

Stock-based Compensation (Tables)	12 Months Ended
	Dec. 31, 2018
Summary of the stock-based compensation expense by instrument awarded	Year ended December 31, 2018 2017 2016 (in thousands) Performance-based RSUs $ 12,425 $ 11,020 $ 9,475 Time-based RSUs 6,608 4,768 2,494 Stock options 6,218 4,909 4,464 Exchangeable PNMAC units — — 72 $ 25,251 $ 20,697 $ 16,505
Summary of valuation assumptions, stock options	Year ended December 31, 2018 2017 2016 Expected volatility (1) 30% 31% 28% Expected dividends 0% 0% 0% Risk-free interest rate 1.7% - 3.0% 0.8% - 2.7% 0.3% - 2.1% Expected grantee forfeiture rate 0.0% - 23.2% 0.0% - 21.1% 0.0% - 20.2% (1) Based on historical volatilities of the Company’s common stock.
Summary of Stock Option award activity	Note 21—Stock‑based Compensation The Company’s 2013 Equity Incentive Plan provides for grants of stock options, time-based and performance-based restricted stock units (“RSUs”), stock appreciation rights, performance units and stock grants. As of December 31, 2018, the Company has 3.9 million units available for future awards. Following is a summary of the stock-based compensation expense by instrument awarded: Year ended December 31, 2018 2017 2016 (in thousands) Performance-based RSUs $ 12,425 $ 11,020 $ 9,475 Time-based RSUs 6,608 4,768 2,494 Stock options 6,218 4,909 4,464 Exchangeable PNMAC units — — 72 $ 25,251 $ 20,697 $ 16,505 Performance‑Based RSUs The performance‑based RSUs provide for the issuance of shares of the Company’s common stock based on the attainment of earnings per share and/or return on equity and are generally adjusted for grantee job performance ratings. The satisfaction of the performance goals and issuance of shares will be approved by a committee of the Company’s board of directors. Approximately 649,000 shares vested under the grants with a performance period ended December 31, 2018 will be issued to the grantees in March 2019. The fair value of the performance‑based RSUs is measured based on the fair value of the Company’s common stock at the grant date, taking into consideration management’s estimate of the expected outcome of the performance goal, and the number of shares to be forfeited during the vesting period. The Company assumes forfeiture rates of 0 ‑ 23.2% per year based on the grantees’ employee classification. The actual number of shares that vest could vary from zero, if the performance goals are not met, to as much as 130% of the units granted, if the performance goals are meaningfully exceeded. The table below summarizes performance‑based RSU activity: Year ended December 31, 2018 2017 2016 (in thousands, except per unit amounts) Number of units: Outstanding at beginning of year 2,389 2,475 2,350 Granted 524 694 813 Vested (1) (730) (446) — Forfeited or cancelled (291) (334) (688) Outstanding at end of year 1,892 2,389 2,475 Weighted average grant date fair value per unit: Outstanding at beginning of year $ 15.57 $ 14.24 $ 16.30 Granted $ 24.40 $ 18.04 $ 11.28 Vested $ 12.86 $ 13.65 $ — Forfeited $ 16.17 $ 14.45 $ 16.87 Outstanding at end of year $ 14.48 $ 15.57 $ 14.24 Compensation expense recorded during the year $ 12,425 $ 11,020 $ 9,475 (1) The actual number of performance-based RSUs vested during the year ended December 31, 2018 was 774,000 shares, which is approximately 106% of the 730,000 originally granted units due to the performance goals exceeding the established target. Following is a summary of performance-based RSUs as of December 31, 2018: Unamortized compensation cost (in thousands) $ 5,805 Number of shares expected to vest (in thousands) 1,784 Weighted average remaining vesting period (in months) 11 Time‑Based RSUs The RSU grant agreements provide for the award of time‑based RSUs, entitling the award recipient to one share of the Company’s common stock for each RSU. One‑third of the time‑based RSUs vest on each of the first, second, and third anniversaries of the grant date, subject to the recipient’s continued service through each anniversary. Compensation cost relating to time‑based RSUs is based on the grant date fair value of the Company’s common stock and the number of shares expected to vest. For purposes of estimating the cost of the time‑based RSUs granted, the Company assumes forfeiture rates of 0 ‑ 23.2% per year based on the grantees’ employee classification. The table below summarizes time‑based RSU activity: Year ended December 31, 2018 2017 2016 (in thousands, except per unit amounts) Number of units: Outstanding at beginning of year 600 382 271 Granted 328 408 261 Vested (254) (173) (127) Forfeited (47) (17) (23) Outstanding at end of year 627 600 382 Weighted average grant date fair value per unit: Outstanding at beginning of year $ 16.37 $ 13.71 $ 17.81 Granted $ 24.25 $ 18.02 $ 11.77 Vested $ 16.08 $ 14.66 $ 17.99 Forfeited $ 19.40 $ 14.87 $ 15.55 Outstanding at end of year $ 20.39 $ 16.37 $ 13.71 Compensation expense recorded during the year $ 6,608 $ 4,768 $ 2,494 Following is a summary of RSUs as of December 31, 2018: Unamortized compensation cost (in thousands) $ 4,158 Number of units expected to vest (in thousands) 579 Weighted average remaining vesting period (in months) 11 Stock Options The stock option award agreements provide for the award of stock options to purchase the optioned common stock. In general, and except as otherwise provided by the agreement, one‑third of the stock option awards vests on each of the first, second, and third anniversaries of the grant date, subject to the recipient’s continued service through each anniversary. Each stock option has a term of ten years from the date of grant but expires (1) immediately upon termination of the holder’s employment or other association with the Company for cause, (2) one year after the holder’s employment or other association is terminated due to death or disability and (3) three months after the holder’s employment or other association is terminated for any other reason. The fair value of each stock option award is estimated on the date of grant using a variant of the Black Scholes model based on the following inputs: Year ended December 31, 2018 2017 2016 Expected volatility (1) 30% 31% 28% Expected dividends 0% 0% 0% Risk-free interest rate 1.7% - 3.0% 0.8% - 2.7% 0.3% - 2.1% Expected grantee forfeiture rate 0.0% - 23.2% 0.0% - 21.1% 0.0% - 20.2% (1) Based on historical volatilities of the Company’s common stock. The Company uses its historical employee departure behavior to estimate the grantee forfeiture rates used in its option‑pricing model. The expected term of common stock options granted is derived from the Company’s option pricing model and represents the period that common stock options granted are expected to be outstanding. The risk‑free interest rate for periods within the contractual term of the common stock option is based on the U.S. Treasury yield curve in effect at the time of grant. The table below summarizes stock option award activity: Year ended December 31, 2018 2017 2016 (in thousands, except per option amounts) Number of stock options: Outstanding at beginning of year 3,457 2,738 1,845 Granted 674 861 962 Exercised (322) (90) (9) Forfeited (116) (52) (60) Outstanding at end of year 3,693 3,457 2,738 Weighted average exercise price per option: Outstanding at beginning of year $ 16.40 $ 15.81 $ 18.17 Granted $ 24.40 $ 18.05 $ 11.29 Exercised $ 16.24 $ 15.04 $ 17.33 Forfeited $ 18.46 $ 15.58 $ 15.66 Outstanding at end of year $ 17.81 $ 16.40 $ 15.81 Compensation expense recorded during the year $ 6,218 $ 4,909 $ 4,464 Following is a summary of stock options as of December 31, 2018: Number of options exercisable at end of year (in thousands) 2,235 Weighted average exercise price per exercisable option $ 16.69 Weighted average remaining contractual term (in years): Outstanding 7.0 Exercisable 6.0 Aggregate intrinsic value: Outstanding (in thousands) $ 14,764 Exercisable (in thousands) $ 10,207 Expected vesting amounts: Number of options expected to vest (in thousands) 1,368 Weighted average vesting period (in months) 10
Performance-based RSUs
Summary of RSU activity and compensation expense	Year ended December 31, 2018 2017 2016 (in thousands, except per unit amounts) Number of units: Outstanding at beginning of year 2,389 2,475 2,350 Granted 524 694 813 Vested (1) (730) (446) — Forfeited or cancelled (291) (334) (688) Outstanding at end of year 1,892 2,389 2,475 Weighted average grant date fair value per unit: Outstanding at beginning of year $ 15.57 $ 14.24 $ 16.30 Granted $ 24.40 $ 18.04 $ 11.28 Vested $ 12.86 $ 13.65 $ — Forfeited $ 16.17 $ 14.45 $ 16.87 Outstanding at end of year $ 14.48 $ 15.57 $ 14.24 Compensation expense recorded during the year $ 12,425 $ 11,020 $ 9,475 (1) The actual number of performance-based RSUs vested during the year ended December 31, 2018 was 774,000 shares, which is approximately 106% of the 730,000 originally granted units due to the performance goals exceeding the established target. Following is a summary of performance-based RSUs as of December 31, 2018: Unamortized compensation cost (in thousands) $ 5,805 Number of shares expected to vest (in thousands) 1,784 Weighted average remaining vesting period (in months) 11
Time-based RSUs
Summary of RSU activity and compensation expense	Year ended December 31, 2018 2017 2016 (in thousands, except per unit amounts) Number of units: Outstanding at beginning of year 600 382 271 Granted 328 408 261 Vested (254) (173) (127) Forfeited (47) (17) (23) Outstanding at end of year 627 600 382 Weighted average grant date fair value per unit: Outstanding at beginning of year $ 16.37 $ 13.71 $ 17.81 Granted $ 24.25 $ 18.02 $ 11.77 Vested $ 16.08 $ 14.66 $ 17.99 Forfeited $ 19.40 $ 14.87 $ 15.55 Outstanding at end of year $ 20.39 $ 16.37 $ 13.71 Compensation expense recorded during the year $ 6,608 $ 4,768 $ 2,494 Following is a summary of RSUs as of December 31, 2018: Unamortized compensation cost (in thousands) $ 4,158 Number of units expected to vest (in thousands) 579 Weighted average remaining vesting period (in months) 11

Earnings Per Share of Common _2

Earnings Per Share of Common Stock (Tables)	12 Months Ended
	Dec. 31, 2018
Earnings Per Share of Common Stock
Summary of basic and diluted earnings per share calculations	Year ended December 31, 2018 2017 2016 (in thousands, except per share data) Basic earnings per share of common stock: Net income attributable to common stockholders $ 87,694 $ 100,757 $ 66,079 Weighted average shares of common stock outstanding 33,524 23,199 22,161 Basic earnings per share of common stock $ 2.62 $ 4.34 $ 2.98 Diluted earnings per share of common stock: Net income attributable to common stockholders $ 87,694 $ 100,757 $ 66,079 Net income attributable to dilutive stock-based compensation units 3,868 — — Net income attributable to PennyMac Class A units exchangeable to Class A common stock, net of income taxes — — 159,570 Net income attributable to common stockholders for diluted earnings per share $ 91,562 $ 100,757 $ 225,649 Weighted average shares of common stock outstanding applicable to basic earnings per share 33,524 23,199 22,161 Effect of dilutive shares: Common shares issuable under stock-based compensation plan 1,798 1,800 517 PennyMac Class A units exchangeable to Class A common stock — — 53,951 Weighted average shares of common stock applicable to diluted earnings per share 35,322 24,999 76,629 Diluted earnings per share of common stock $ 2.59 $ 4.03 $ 2.94
Schedule of anti-dilutive shares outstanding	Year ended December 31, 2018 2017 2016 (in thousands, except exercise price data) Performance-based RSUs (1) 1,084 497 2,054 Time-based RSUs 3 — — Stock options (2) 740 1,323 1,829 Exchangeable PNMAC Class A units (3) 43,700 53,299 — Total anti-dilutive stock-based compensation and PNMAC Class A units 45,527 55,119 3,883 Weighted average exercise price of anti-dilutive stock options (2) $ 17.81 $ $ (1) Certain performance-based RSUs were outstanding but not included in the computation of earnings per share because the performance thresholds included in such RSUs have not been achieved. (2) Certain stock options were outstanding but not included in the computation of diluted earnings per share because the weighted-average exercise prices were above the average stock prices during the year. Exchangeable PNMAC units were anti-dilutive during 2017 primarily due to the effect of adoption of the Tax Act on earnings attributable to PNMAC unitholders.

Supplemental Cash Flow Inform_2

Supplemental Cash Flow Information (Tables)	12 Months Ended
	Dec. 31, 2018
Supplemental Cash Flow Information
Schedule of supplemental cash flow information	Year ended December 31, 2018 2017 2016 (in thousands) Cash paid for interest $ 161,001 $ 158,147 $ 104,938 (Refunds received) cash paid for income taxes, net $ (2,059) $ (5,513) $ 1,866 Non-cash investing activity: Mortgage servicing rights resulting from mortgage loan sales $ 591,757 $ 581,101 $ 577,531 Mortgage servicing liabilities resulting from mortgage loan sales $ 7,601 $ 17,229 $ 14,991 Unsettled portion of MSR acquisitions $ 10,139 $ 5,319 $ — Refinancing of Note receivable from PennyMac Mortgage Investment Trust as Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell pledged to creditors $ — $ — $ 150,000 Non-cash financing activity: Issuance of Excess servicing spread payable to PennyMac Mortgage Investment Trust pursuant to a recapture agreement $ 2,688 $ 5,244 $ 6,603 Unpaid distribution to Private National Mortgage Acceptance Company, LLC members $ — $ — $ 7,585 Issuance of Class A common stock and common stock in settlement of director fees $ 330 $ 338 $ 313

Regulatory Capital and Liquid_2

Regulatory Capital and Liquidity Requirements (Tables)	12 Months Ended
	Dec. 31, 2018
Regulatory Capital and Liquidity Requirements
Summary of agencies' capital and liquidity requirements by each agency	December 31, 2018 December 31, 2017 Agency–company subject to requirement Actual (1) Requirement (1) Actual (1) Requirement (1) (dollars in thousands) Capital Fannie Mae & Freddie Mac – PLS $ 1,788,430 $ 514,089 $ 1,561,977 $ 429,671 Ginnie Mae – PLS $ 1,535,826 $ 733,342 $ 1,307,580 $ 674,133 Ginnie Mae – PennyMac $ 1,786,430 $ 806,676 $ 1,511,201 $ 741,574 HUD – PLS $ 1,535,826 $ 2,500 $ 1,307,580 $ 2,500 Liquidity Fannie Mae & Freddie Mac – PLS $ 271,802 $ 70,775 $ 196,415 $ 58,754 Ginnie Mae – PLS $ 271,802 $ 189,592 $ 196,415 $ 153,431 Tangible net worth / Total assets ratio Fannie Mae & Freddie Mac – PLS 21 % 6 % % % (1) Calculated in compliance with the respective Agency’s requirements.

Segments (Tables)

Segments (Tables)	12 Months Ended
	Dec. 31, 2018
Segments
Summary of financial highlights by segment	Year ended December 31, 2018 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenue: (1) Net mortgage loan servicing fees $ — $ 445,393 $ 445,393 $ — $ 445,393 Net gains on mortgage loans held for sale at fair value 141,959 107,063 249,022 — 249,022 Mortgage loan origination fees 101,641 — 101,641 — 101,641 Fulfillment fees from PennyMac Mortgage Investment Trust 81,350 — 81,350 — 81,350 Net interest income (expense): Interest income 66,408 149,992 216,400 16 216,416 Interest expense 7,371 137,177 144,548 49 144,597 59,037 12,815 71,852 (33) 71,819 Management fees — — — 24,469 24,469 Carried Interest from Investment Funds — — — (365) (365) Other 2,008 2,650 4,658 5,516 10,174 Total net revenue 385,995 567,921 953,916 29,587 983,503 Expenses 298,729 395,619 694,348 22,584 716,932 Income before provision for income taxes and non-segment activities 87,266 172,302 259,568 7,003 266,571 Non-segment activities (2) — — — — 1,126 Income before provision for income taxes $ 87,266 $ 172,302 $ 259,568 $ 7,003 $ 267,697 Segment assets at year end (3) $ 2,434,897 $ 5,031,920 $ 7,466,817 $ 11,681 $ 7,478,498 (1) All revenues are from external customers. (2) Represents repricing of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement . (3) Excludes non-segment assets, which consist of working capital of $75,000. Year ended December 31, 2017 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenue: (1) Net mortgage loan servicing fees $ — $ 306,059 $ 306,059 $ — $ 306,059 Net gains on mortgage loans held for sale at fair value 286,242 105,562 391,804 — 391,804 Mortgage loan origination fees 119,202 — 119,202 — 119,202 Fulfillment fees from PennyMac Mortgage Investment Trust 80,359 — 80,359 — 80,359 Net interest income (expense): Interest income 61,195 81,984 143,179 — 143,179 Interest expense 35,359 109,112 144,471 49 144,520 25,836 (27,128) (1,292) (49) (1,341) Management fees — — — 23,585 23,585 Carried Interest from Investment Funds — — — (1,040) (1,040) Other 2,002 1,710 3,712 183 3,895 Total net revenue 513,641 386,203 899,844 22,679 922,523 Expenses 275,133 327,531 602,664 16,890 619,554 Income before provision for income taxes and non-segment activities 238,508 58,672 297,180 5,789 302,969 Non-segment activities (2) — — — — 32,940 Income before provision for income taxes $ 238,508 $ 58,672 $ 297,180 $ 5,789 $ 335,909 Segment assets at year end (3) $ 2,459,014 $ 4,886,594 $ 7,345,608 $ 19,880 $ 7,365,488 (1) All revenues are from external customers (2) Primarily represents repricing of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement , of which $32.0 million is the result of the change in the federal tax rate under the Tax Act. (3) Excludes parent company assets, which consist primarily of working capital of $2.6 million. Year ended December 31, 2016 Mortgage Banking Investment Production Servicing Total Management Total (in thousands) Revenues: (1) Net mortgage loan servicing fees $ — $ 185,466 $ 185,466 $ — $ 185,466 Net gains on mortgage loans held for sale at fair value 464,027 67,753 531,780 — 531,780 Mortgage loan origination fees 125,534 — 125,534 — 125,534 Fulfillment fees from PennyMac Mortgage Investment Trust 86,465 — 86,465 — 86,465 Net interest income (expense): Interest income 48,944 32,182 81,126 1 81,127 Interest expense 32,669 73,537 106,206 50 106,256 16,275 (41,355) (25,080) (49) (25,129) Management fees — — — 22,746 22,746 Carried Interest from Investment Funds — — — 980 980 Other 2,104 1,022 3,126 319 3,445 Total net revenue 694,405 212,886 907,291 23,996 931,287 Expenses 278,309 248,985 527,294 21,510 548,804 Income before provision for income taxes and non-segment activities 416,096 (36,099) 379,997 2,486 382,483 Non-segment activities (2) — — — — 600 Income before provision for income taxes $ 416,096 $ (36,099) $ 379,997 $ 2,486 $ 383,083 Segment assets at year end (3) $ 2,195,330 $ 2,841,551 $ 5,036,881 $ 91,517 $ 5,128,398 (1) All revenues are from external customers. (2) Represents Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement . Excludes parent Company assets, which consist primarily of working capital of $5.5 million

Selected Quarterly Data (Unau_2

Selected Quarterly Data (Unaudited) (Tables)	12 Months Ended
	Dec. 31, 2018
Selected Quarterly Data (Unaudited)
Schedule of selected quarterly financial data	Quarter ended 2018 2017 Dec. 31 Sept. 30 June. 30 Mar. 31 Dec. 31 Sept. 30 June. 30 Mar. 31 (in thousands, except per share data) During the quarter: Net mortgage loan servicing fees $ 105,212 $ 109,703 113,689 $ 116,789 $ 106,902 $ 78,081 $ 46,913 $ 74,163 Net gains on mortgage loans held for sale at fair value 59,748 56,914 60,946 71,414 98,621 108,136 98,091 86,956 Mortgage loan origination fees 26,165 26,485 24,428 24,563 30,267 33,168 30,193 25,574 Fulfillment fees from PennyMac Mortgage Investment Trust 28,591 26,256 14,559 11,944 19,175 23,507 21,107 16,570 Other income 31,485 31,571 30,676 13,491 43,669 7,743 5,417 1,210 251,201 250,929 244,298 238,201 298,634 250,635 201,721 204,473 Expenses 192,895 189,232 169,600 165,205 176,861 156,491 143,761 142,441 Income before provision for income taxes 58,306 61,697 74,698 72,996 121,773 94,144 57,960 62,032 Provision for income taxes 5,346 5,545 6,293 6,070 (2,125) 11,652 7,214 7,646 Net income 52,960 56,152 68,405 66,926 123,898 82,492 50,746 54,386 Less: Net income attributable to noncontrolling interest 14,211 41,663 50,568 50,307 61,580 65,411 40,267 43,507 Net income attributable to PennyMac Financial Services, Inc. common stockholders $ 38,749 $ 14,489 $ 17,837 $ 16,619 $ 62,318 $ 17,081 $ 10,479 $ 10,879 Earnings per share of common stock: Basic $ 0.65 $ 0.58 $ 0.71 $ 0.70 $ 2.67 $ 0.73 $ 0.45 $ 0.48 Diluted $ 0.63 $ 0.57 $ 0.70 $ 0.67 $ 2.44 $ 0.71 $ 0.44 $ 0.47 At quarter end: Mortgage loans held for sale $ 2,521,647 $ 2,416,955 $ 2,527,231 $ 2,584,236 $ 3,099,103 $ 2,935,593 $ 3,037,602 $ 2,277,751 Mortgage servicing rights 2,820,612 2,785,964 2,486,157 2,354,489 2,119,588 2,016,485 1,951,599 1,725,061 Servicing advances, net 313,197 259,609 258,900 284,145 318,066 262,650 291,907 317,513 Mortgage loans eligible for repurchase 1,102,840 889,335 879,621 1,018,488 1,208,195 584,394 462,487 318,378 Other assets 720,277 640,667 689,797 661,533 623,141 589,247 661,143 612,674 Total assets $ 7,478,573 $ 6,992,530 $ 6,841,706 $ 6,902,891 $ 7,368,093 $ 6,388,369 $ 6,404,738 $ 5,251,377 Short-term debt $ 2,332,143 $ 2,222,385 $ 2,264,041 $ 2,336,826 $ 2,922,542 $ 2,640,743 $ 3,311,029 $ 2,331,357 Long-term debt 1,648,973 1,566,672 1,473,188 1,380,358 1,135,401 1,151,545 671,789 690,476 Liability for mortgage loans eligible for repurchase 1,102,840 889,335 879,621 1,018,488 1,208,195 584,394 462,487 318,378 Other liabilities 740,826 397,428 362,912 373,020 382,281 421,396 448,181 453,571 Total liabilities 5,824,782 5,075,820 4,979,762 5,108,692 5,648,419 4,798,078 4,893,486 3,793,782 Total equity 1,653,791 1,916,710 1,861,944 1,794,199 1,719,674 1,590,291 1,511,252 1,457,595 Total liabilities and equity $ 7,478,573 $ 6,992,530 $ 6,841,706 $ 6,902,891 $ 7,368,093 $ 6,388,369 $ 6,404,738 $ 5,251,377

Parent Company Information (Tab

Parent Company Information (Tables)	12 Months Ended
	Dec. 31, 2018
Parent Company Information
Schedule of condensed balance sheets	December 31, 2018 2017 (in thousands) ASSETS Cash $ — $ 2,605 Investments in subsidiaries 1,975,231 556,439 Due from subsidiaries 582 6,538 Total assets $ 1,975,813 $ 565,582 LIABILITIES AND STOCKHOLDERS' EQUITY Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement $ — $ 44,011 Payable to subsidiaries 575 — Income taxes payable 321,447 52,160 Total liabilities 322,022 96,171 Stockholders' equity 1,653,791 469,411 Total liabilities and stockholders' equity $ 1,975,813 $ 565,582
Schedule of condensed statements of income	Year ended December 31, 2018 2017 2016 (in thousands) Revenues Dividends from subsidiary $ 10,054 $ — $ 6,418 Interest — — 49 Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — 32,940 551 Total revenue 10,054 32,940 7,018 Expenses Interest 32 — — Total expenses 32 — — Income before provision for income taxes and equity in undistributed earnings in subsidiaries 10,022 32,940 7,018 Provision for income taxes 20,897 24,387 46,103 Income (loss) before equity in undistributed earnings of subsidiaries (10,875) 8,553 (39,085) Equity in undistributed earnings of subsidiaries 98,569 92,204 105,164 Net income $ 87,694 $ 100,757 $ 66,079
Schedule of condensed statements of cash flows	Year ended December 31, 2018 2017 2016 (in thousands) Cash flows from operating activities Net income $ 87,694 $ 100,757 $ 66,079 Adjustments to reconcile net income to net cash provided by operating activities Equity in undistributed earnings of subsidiaries (98,569) (92,204) (105,164) Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — (32,940) (551) Decrease in deferred tax asset — — 18,668 Decrease (increase) in intercompany receivable (3,737) 5,646 (76) Payments to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement — (6,726) — Increase in income taxes payable 22,889 29,912 25,559 Net cash provided by operating activities 8,277 4,445 4,515 Cash flows from investing activities Increase in investments in subsidiaries (77) — — Net cash used by investing activities (77) — — Cash flows from financing activities Payment of dividend to Class A common stockholders (10,054) — — Exercise of from Class A common stock options 803 1,254 149 Repurchase of Class A common stock (1,554) (8,599) — Net cash (used in) provided by financing activities (10,805) (7,345) 149 Net change in cash and restricted cash (2,605) (2,900) 4,664 Cash and restricted cash at beginning of year 2,605 5,505 841 Cash and restricted cash at end of year $ — $ 2,605 $ 5,505

Organization (Details)

Organization (Details) $ in Thousands	Nov. 01, 2018USD ($)	Oct. 31, 2018item
Number of classes of common stock	1	2
New PFSI | Common Stock
Common stock conversion ratio (as a percent)	1.00%
New PFSI | Class B Common Stock
Consideration received from conversion of stock	$ 0
New PFSI | Class A Unit
Common stock conversion ratio (as a percent)	100.00%

Concentration of Risk (Details)

Concentration of Risk (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Advised Entities | Sales Revenue, Services, Net [Member] | Customer Concentration Risk [Member]
Concentration of Risk
Percentage of total net revenue	21.00%	20.00%	18.00%

Significant Accounting Polici_4

Significant Accounting Policies and Recently Issued Accounting Pronouncement - Mortgage Servicing Rights and Mortgage Servicing Liabilities (Details)	12 Months Ended
	Dec. 31, 2018item
Mortgage servicing rights
Mortgage Servicing Rights
Number of classes of MSRs	3
Mortgage servicing rights | Fixed Rate Stratified Mortgage Pool
Mortgage Servicing Rights
Stratification range, as a percent	0.50%
Mortgage servicing rights | Fixed Rate Stratified Mortgage Pool | Minimum
Mortgage Servicing Rights
Note rates (as a percent)	3.00%
Mortgage servicing rights | Fixed Rate Stratified Mortgage Pool | Maximum
Mortgage Servicing Rights
Note rates (as a percent)	4.50%
Mortgage servicing rights | Fixed Rate Single Mortgage Pool | Maximum
Mortgage Servicing Rights
Note rates (as a percent)	3.00%
Mortgage Servicing Rights Class One [Member]
Mortgage Servicing Rights
Interest rate (as a percent)	4.50%
Mortgage Servicing Rights Class Two [Member]
Mortgage Servicing Rights
Interest rate (as a percent)	4.50%

Significant Accounting Polici_5

Significant Accounting Policies and Recently Issued Accounting Pronouncement - (Details) - USD ($)	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Jan. 02, 2018	Jan. 01, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Recently Issued Accounting Pronouncements
Mortgage servicing rights	$ 2,820,612,000	$ 2,785,964,000	$ 2,486,157,000	$ 2,354,489,000			$ 2,119,588,000	$ 2,016,485,000	$ 1,951,599,000	$ 1,725,061,000
Income taxes payable	400,546,000						52,160,000
Stockholders' equity	$ 1,653,791,000	$ 1,916,710,000	$ 1,861,944,000	$ 1,794,199,000			$ 1,719,674,000	$ 1,590,291,000	$ 1,511,252,000	$ 1,457,595,000	$ 1,399,356,000	$ 1,062,350,000
Adjustment | Accounting Standards Codification 250 Mortgage Servicing Rights Fair Value
Recently Issued Accounting Pronouncements
Mortgage servicing rights						$ 848,000
Income taxes payable					$ 72,000
Stockholders' equity					$ 776,000

Significant Accounting Polici_6

Significant Accounting Policies and Recently Issued Accounting Pronouncement - Long-lived Assets (Details)	12 Months Ended
	Dec. 31, 2018
Long-lived asset disclosures
Period of payment default	3 months
Furniture, Fixtures, Equipment and Building Improvements | Minimum
Long-lived asset disclosures
Estimated useful lives	5 years
Furniture, Fixtures, Equipment and Building Improvements | Maximum
Long-lived asset disclosures
Estimated useful lives	7 years
Capitalized Software | Minimum
Long-lived asset disclosures
Estimated useful lives	3 years
Capitalized Software | Maximum
Long-lived asset disclosures
Estimated useful lives	7 years

Significant Accounting Polici_7

Significant Accounting Policies and Recently Issued Accounting Pronouncement - Fulfillment Fees and Management Fees (Details)	12 Months Ended
	Dec. 31, 2018
Fulfillment Fees
Number of days from purchase fulfillment fees are collected	30 days
Management fees
The period from quarter end that management fees are collected	30 days

Significant Accounting Polici_8

Significant Accounting Policies and Recently Issued Accounting Pronouncement - Income Taxes (Details)	12 Months Ended
	Dec. 31, 2018
Income Taxes
Amount of tax benefits under the tax sharing agreement (as a percent)	85.00%

Significant Accounting Polici_9

Significant Accounting Policies and Recently Issued Accounting Pronouncement - Recently Issued Accounting Pronouncement (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Jan. 01, 2019	Dec. 31, 2015
Recently Issued Accounting Pronouncements
Cash flow from operations	$ 572,396	$ (883,412)	$ (938,325)
Cash and restricted cash at year end	155,924	38,173	99,642		$ 105,550
Future minimum lease payments	$ 93,700
Accounting Standards Update 2016-02: Leases | As adjusted
Recently Issued Accounting Pronouncements
right-of-use asset				$ 58,600
Lease liability				$ 79,300
ASU 2016-18 | Adjustment
Recently Issued Accounting Pronouncements
Cash flow from operations		173	197
Cash and restricted cash at year end		448	275
ASU 2016-18 | As previously reported
Recently Issued Accounting Pronouncements
Cash flow from operations		(883,585)	(938,522)
Cash and restricted cash at year end		$ 37,725	$ 99,367

Transactions with Affiliates -

Transactions with Affiliates - Correspondent Production (Details) - USD ($)	Sep. 12, 2016	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Lending activity between the entity and affiliate
Fulfillment fee revenue												$ 86,465,000
MBS Agreement
Transactions with Affiliates
Early purchase program facility fee per annum per early purchase facility	$ 1,500
Early purchase facility fee per loan	$ 35
The administrative fee plus accrued interest and sourcing fee percent	0.35%
Related party transaction, automatic renewal period	18 months
Fulfillment fee as a percent of UPB of all other mortgage loans, excluding Ginnie Mae mortgage loans	0.50%
MSR Recapture Agreement
Transactions with Affiliates
Related party transaction, automatic renewal period	18 months
Lending activity between the entity and affiliate
Minimum percent of total UPB of loans originated from refinancing of loans which a related party previously held the MSR required to be transferred	30.00%
PMT
Lending activity between the entity and affiliate
Total of gain on sale of loans and MSR recapture										$ 64,583,000	$ 21,989,000	(8,092,000)
Sale of mortgage loans held for sale to PMT										3,343,028,000	904,097,000	21,541,000
Fulfillment fee revenue		$ 28,591,000	$ 26,256,000	$ 14,559,000	$ 11,944,000	$ 19,175,000	$ 23,507,000	$ 21,107,000	$ 16,570,000	81,350,000	80,359,000	86,465,000
Proceeds from sale of mortgage loans held for sale to PennyMac Mortgage Investment Trust										3,343,028,000	904,097,000	21,541,000
PMT | MBS Agreement | Minimum
Transactions with Affiliates
The administrative fee plus accrued interest and sourcing fee percent	0.02%
PMT | MBS Agreement | Maximum
Transactions with Affiliates
The administrative fee plus accrued interest and sourcing fee percent	0.035%
PMT | Mortgage Lending
Lending activity between the entity and affiliate
Net gain (loss) on mortgage loans held for sale to PMT										69,359,000	28,238,000
Mortgage servicing rights and excess servicing spread recapture incurred										(4,776,000)	(6,249,000)	(8,092,000)
Total of gain on sale of loans and MSR recapture										64,583,000	21,989,000	(8,092,000)
Sale of mortgage loans held for sale to PMT										3,343,028,000	904,097,000	21,541,000
Fulfillment fee revenue										81,350,000	80,359,000	86,465,000
Unpaid principal balance of mortgage loans fulfilled for PMT										26,194,303,000	22,971,119,000	23,188,386,000
Sourcing fees paid										10,925,000	12,084,000	11,976,000
Unpaid principal balance of mortgage loans purchased from PMT										36,415,933,000	40,561,241,000	39,908,163,000
Proceeds from sale of mortgage loans held for sale to PennyMac Mortgage Investment Trust										3,343,028,000	904,097,000	21,541,000
Tax service fee										$ 7,433,000	7,078,000	6,690,000
Early purchase program fees earned from PMT											$ 7,000	$ 30,000

Transactions with Affiliates _2

Transactions with Affiliates - Mortgage Loan Servicing (Details)	Sep. 12, 2016USD ($)item	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Summary of mortgage loan servicing fees earned
Loan servicing fees		$ 585,101,000	$ 475,848,000	$ 385,633,000
Mortgage Loan Servicing Agreement
Transactions with Affiliates
Base servicing fees per month for REO	$ 75
Rental fee per month per REO	30
Renewal fee, per lease renewal, on REO property	$ 100
Property management fees on REOs, as a percent of gross rental income	9.00%
Base servicing fees per month for fixed-rate non-distressed loans subserviced	$ 7.50
Base servicing fees per month for adjustable rate non-distressed loans subserviced	8.50
Supplemental fee per month for each distressed whole loan	25
Activity-based fee, percent, due to a streamline modification	750
Activity-based fee, percent, due to a liquidation	1,750
Activity-based fee due to a deed-in-lieu of foreclosure	$ 500
Maximum number of liquidation, reperformance, or modification fees that can be earned during earnable period | item	1
Liquidation, reperformance, or modification fees earnable period	18 months
Related party transaction, automatic renewal period	18 months
Minimum | Mortgage Loan Servicing Agreement
Transactions with Affiliates
Servicing fees amount per month for current loans	$ 30
Maximum | Mortgage Loan Servicing Agreement
Transactions with Affiliates
Servicing fees amount per month for current loans	$ 85
PMT
Summary of mortgage loan servicing fees earned
Loan servicing fees		42,045,000	43,064,000	50,615,000
PMT | Mortgage loans acquired for sale at fair value
Summary of mortgage loan servicing fees earned
Base and supplemental		347,000	305,000	330,000
Activity-based		690,000	649,000	733,000
Loan servicing fees		1,037,000	954,000	1,063,000
PMT | Mortgage loans at fair value
Summary of mortgage loan servicing fees earned
Base and supplemental		2,771,000	6,650,000	11,078,000
Activity-based		4,784,000	8,960,000	18,521,000
Loan servicing fees		7,555,000	15,610,000	29,599,000
PMT | Mortgage servicing rights
Summary of mortgage loan servicing fees earned
Base and supplemental		32,854,000	25,991,000	19,461,000
Activity-based		599,000	509,000	492,000
Loan servicing fees		33,453,000	26,500,000	19,953,000
PMT | Other income.
Summary of mortgage loan servicing fees earned
Property management fees		$ 442,000	$ 350,000	$ 138,000

Transactions with Affiliates _3

Transactions with Affiliates - Management Fees (Details) - USD ($)	Sep. 12, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Management Fee Revenue Abstract
Management fees		$ 24,469,000	$ 23,585,000	$ 22,746,000
PMT
Management Fee Revenue Abstract
Management fees		24,465,000	22,584,000	20,657,000
PMT | Management Agreement
Transactions with Affiliates
Percentage of change in net income due to quarterly adjustments	8.00%
Related party transaction, automatic renewal period	18 months
Management Fee Revenue Abstract
Base management fee		23,033,000	22,280,000	20,657,000
Performance incentive		1,432,000	304,000
Management fees		$ 24,465,000	$ 22,584,000	$ 20,657,000
PMT | Management Agreement | Maximum
Transactions with Affiliates
Percentage of performance incentive fee payable by issuance of common shares	50.00%
PMT | Management Agreement | Minimum
Transactions with Affiliates
High watermark	$ 0
PMT | Shareholders Equity Up To 2 Billion Dollars | Maximum
Transactions with Affiliates
Base management fee annual rate (as a percent)	1.50%
Base management fee shareholders' equity limit	$ 2,000,000,000
PMT | Shareholders Equity In Excess Of 2 Billion Dollars And Upto 5 Billion Dollars
Transactions with Affiliates
Base management fee annual rate (as a percent)	1.375%
PMT | Shareholders Equity In Excess Of 2 Billion Dollars And Upto 5 Billion Dollars | Maximum
Transactions with Affiliates
Base management fee shareholders' equity limit	$ 5,000,000,000
PMT | Shareholders Equity In Excess Of 2 Billion Dollars And Upto 5 Billion Dollars | Minimum
Transactions with Affiliates
Base management fee shareholders' equity limit	$ 2,000,000,000
PMT | Shareholders Equity In Excess Of 5 Billion Dollars
Transactions with Affiliates
Base management fee annual rate (as a percent)	1.25%
PMT | Shareholders Equity In Excess Of 5 Billion Dollars | Minimum
Transactions with Affiliates
Base management fee shareholders' equity limit	$ 5,000,000,000
PMT | Return on Shareholders Equity 8 Percent
Transactions with Affiliates
Percentage of net income for calculation of performance incentive fees	10.00%
PMT | Return on Shareholders Equity 8 Percent | Maximum
Transactions with Affiliates
Percentage of return on affiliate's equity	12.00%
PMT | Return on Shareholders Equity 8 Percent | Minimum
Transactions with Affiliates
Percentage of return on affiliate's equity	8.00%
PMT | Return on Shareholders Equity 12 Percent
Transactions with Affiliates
Percentage of net income for calculation of performance incentive fees	15.00%
Percentage of return on affiliate's equity	12.00%
PMT | Return on Shareholders Equity 12 Percent | Maximum
Transactions with Affiliates
Percentage of return on affiliate's equity	16.00%
PMT | Return on Shareholders Equity in Excess of 16 Percent
Transactions with Affiliates
Percentage of net income for calculation of performance incentive fees	20.00%
Percentage of return on affiliate's equity	16.00%

Transactions with Affiliates _4

Transactions with Affiliates - Other Transactions, Reimbursement of Common Overhead Expenses (Details) - PMT - USD ($)	Sep. 12, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Transactions with Affiliates
Expense reimbursement amount, per quarter, relating to personnel	$ 120,000
Reimbursement of common overhead and expenses incurred on behalf of affiliates
Reimbursement of common overhead and expenses incurred by the Company		$ 6,233,000	$ 7,563,000	$ 7,735,000
Payments and settlements during the period		71,943,000	64,945,000	143,542,000
Common overhead incurred
Reimbursement of common overhead and expenses incurred on behalf of affiliates
Reimbursement of common overhead and expenses incurred by the Company		4,640,000	5,306,000	7,898,000
Compensation
Reimbursement of common overhead and expenses incurred on behalf of affiliates
Reimbursement of common overhead and expenses incurred by the Company		480,000
Expenses incurred by related party (reporting entity), net
Reimbursement of common overhead and expenses incurred on behalf of affiliates
Reimbursement of common overhead and expenses incurred by the Company		$ 1,113,000	$ 2,257,000	$ (163,000)

Transactions with Affiliates _5

Transactions with Affiliates - Other Transactions, Conditional Reimbursement (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Aug. 04, 2009
Maximum
Conditional reimbursement
Conditional reimbursement				$ 2,900,000
Conditional Reimbursement
Conditional reimbursement
Payments received	$ 69,000	$ 30,000	$ 0

Transactions with Affiliates _6

Transactions with Affiliates - Investing Activities (Details)	Dec. 19, 2016USD ($)item	Dec. 31, 2018USD ($)shares	Dec. 31, 2017USD ($)shares	Dec. 31, 2016USD ($)
PennyMac Holdings, L L C Repurchase Agreement
Transactions with Affiliates
Number of subsidiaries entered into master repurchase agreement | item	1
Maximum principal balance of VFN	$ 1,000,000,000
PMT
Transactions with Affiliates
Common shares of beneficial interest owned | shares		75,000
Repurchase agreement with PennyMac Mortgage Investment Trust:
Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell pledged to creditors		$ 131,025,000	$ 144,128,000
Activity during the year:
Interest income on receivable from PennyMac Mortgage Investment Trust		7,462,000	8,038,000	$ 7,830,000
Activity during the period:
Dividends received from PennyMac Mortgage Investment Trust		140,000	141,000	141,000
Change in fair value of investment in Common shares of PennyMac Mortgage Investment Trust		192,000	(23,000)	83,000
Balance at end of period		332,000	118,000	224,000
Fair value of PennyMac Mortgage Investment Trust shares		$ 1,397,000	$ 1,205,000
Number of shares | shares		75,000	75,000
PMT | PennyMac Holdings, L L C Repurchase Agreement
Repurchase agreement with PennyMac Mortgage Investment Trust:
Refinancing from PennyMac Mortgage Investment Trust				150,000,000
Sale of assets purchased from PMT under agreement to resell		$ 13,103,000	$ 5,872,000
Assets purchased from PennyMac Mortgage Investment Trust under agreements to resell pledged to creditors		131,025,000	144,128,000	150,000,000
Activity during the year:
Interest income on receivable from PennyMac Mortgage Investment Trust		$ 7,462,000	$ 8,038,000	253,000
PMT | Notes Receivable [Member]
Activity during the year:
Refinancing with repurchase agreement from PennyMac Mortgage Investment Trust				150,000,000
Interest income on receivable from PennyMac Mortgage Investment Trust				$ 7,577,000

Transactions with Affiliates _7

Transactions with Affiliates - Financing Activities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 19, 2016
PMT
Financing activities:
Issuance pursuant to recapture agreement	$ 2,688,000	$ 5,244,000	$ 6,603,000
Repayments	46,750,000	54,980,000	69,992,000
Interest expense	15,138,000	16,951,000	22,601,000
Excess servicing spread financing at fair value payable to affiliate	216,110,000	236,534,000
PMT | 2/1/13 Spread Acquisition Agreement
Financing activities:
Maximum ESS recapture obligation				$ 200,000
Excess servicing spread financing
Financing activities:
Changes in fair value included in income	8,500,000	(19,350,000)	(23,923,000)
Excess servicing spread financing | PMT
Financing activities:
Issuance pursuant to recapture agreement	2,688,000	5,244,000	6,603,000
Repayments	46,750,000	54,980,000	69,992,000
Settlement			59,045,000
Changes in fair value included in income	8,500,000	(19,350,000)	(23,923,000)
Interest expense	15,138,000	16,951,000	22,601,000
Excess servicing spread recapture recognized	2,584,000	4,820,000	$ 6,529,000
Excess servicing spread financing at fair value payable to affiliate	$ 216,110,000	$ 236,534,000

Transactions with Affiliates _8

Transactions with Affiliates - Amounts due from Affiliate (Details) - PMT - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Amounts due from affiliate
Fulfillment fees	$ 10,006	$ 346
Allocated expenses	9,066	11,542
Management fees	6,559	5,901
Servicing fees	4,841	6,583
Correspondent production fees	2,071	1,735
Conditional Reimbursement	801	870
Interest on assets purchased under agreements to resell	120	142
Total due from affiliate	33,464	27,119
Payable to affiliate
Deposits made by PMT	100,554	132,844
MSR Recapture Payable to PMT	179	282
Other expenses	3,898	3,872
Payable to affiliates	$ 104,631	$ 136,998

Transactions with Affiliates _9

Transactions with Affiliates - Amounts due from Investment Funds (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Investment Funds
Amounts due from affiliate
Cash received during the period	$ 8,187	$ 61,314
Carried Interest from Investment Funds		8,552	$ 70,906	$ 69,926
Mortgage loan servicing rebate deposit		300
Management fees		88
Expense reimbursements		27
Mortgage loan servicing fees		2
Total due from affiliate		417
Deposits received to fund servicing advances		2,329
Other		98
Payable to affiliates		2,427
Investment Funds | Minimum
Amounts due from affiliate
Base management fees, annual accrual rate	1.50%
Investment Funds | Maximum
Amounts due from affiliate
Base management fees, annual accrual rate	2.00%
PNMAC Mortgage Opportunity Fund, LLC
Amounts due from affiliate
Carried Interest from Investment Funds		6,389
PNMAC Mortgage Opportunity Fund Investors, LLC
Amounts due from affiliate
Carried Interest from Investment Funds		$ 2,163

Transactions with Affiliates_10

Transactions with Affiliates - Exchanged Private National Mortgage Acceptance Company, LLC Unitholders (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Transactions with Affiliates
Amount of tax benefits under the tax sharing agreement (as a percent)	85.00%
Federal income tax statutory rate (as a percent)	21.00%	35.00%	35.00%
Private National Mortgage Acceptance Company, LLC
Transactions with Affiliates
Reduction in payable to exchanged Private National Mortgage Acceptance Company, LLC		$ 32,000
Liability resulting from unit exchanges	$ 3,652	7,723	$ 2,190
Payments to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement		(6,726)
Repricing of payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement	(1,126)	(32,940)	(551)
Payable to exchanged PNMAC unitholders under tax receivable agreement	46,537	$ 44,011	$ 75,954
Payment of tax liability under the tax receivable agreement to Private National Mortgage Acceptance Company, LLC unitholders	$ 32,000

Loan Sales and Servicing Acti_3

Loan Sales and Servicing Activities - Summary of Cash Flows with Transferees (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows:
Sales proceeds	$ 44,557,560	$ 50,235,245	$ 49,633,909
Servicing fees received	488,483	376,160	261,163
Net servicing advances (recoveries)	28,557	52,353	$ 8,274
Period end information:
Unpaid principal balance of mortgage loans outstanding	145,224,596	120,853,138
30-89 days	6,222,864	5,097,688
90 days or more - Not in foreclosure	2,208,083	2,303,114
90 days or more - In foreclosure	720,894	606,744
90 days or more - Foreclosed	24,243	30,310
Bankruptcy	$ 970,329	$ 657,368

Loan Sales and Servicing Acti_4

Loan Sales and Servicing Activities - Summary of Mortgage Servicing Portfolio (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Mortgage servicing portfolio
Mortgage loans held for sale		$ 2,998,377
Total loans serviced	$ 299,293,872	245,848,491
Delinquent mortgage loans:
30 days		5,842,632
60 days		2,151,173
90 days or more - Not in foreclosure		4,232,104
90 days or more - In foreclosure		1,210,449
90 days or more - Foreclosed		320,134
Total delinquent mortgage loans		13,756,492
Bankruptcy		1,223,293
Custodial funds managed by the Company		4,168,320
Mortgage servicing rights
Mortgage servicing portfolio
Mortgage loans held for sale	2,420,636
Total loans serviced	299,293,872
Subserviced for the Company	414,219
Delinquent mortgage loans:
30 days	7,203,168
60 days	2,096,619
90 days or more - Not in foreclosure	3,319,607
90 days or more - In foreclosure	1,154,518
90 days or more - Foreclosed	209,870
Total delinquent mortgage loans	13,983,782
Bankruptcy	1,522,189
Custodial funds managed by the Company	4,003,986
Servicing rights owned
Mortgage servicing portfolio
Mortgage loans held for sale	2,420,636	2,998,377
Total loans serviced	204,635,718	170,868,223
Subserviced for the Company	414,219
Delinquent mortgage loans:
30 days	6,677,179	5,326,710
60 days	1,983,381	1,935,216
90 days or more - Not in foreclosure	3,102,492	3,690,159
90 days or more - In foreclosure	1,027,493	916,614
90 days or more - Foreclosed	33,493	41,244
Total delinquent mortgage loans	12,824,038	11,909,943
Bankruptcy	1,415,106	1,046,969
Custodial funds managed by the Company	3,033,658	3,267,279
Contract servicing and subservicing
Mortgage servicing portfolio
Total loans serviced	94,658,154	74,980,268
Delinquent mortgage loans:
30 days	525,989	515,922
60 days	113,238	215,957
90 days or more - Not in foreclosure	217,115	541,945
90 days or more - In foreclosure	127,025	293,835
90 days or more - Foreclosed	176,377	278,890
Total delinquent mortgage loans	1,159,744	1,846,549
Bankruptcy	107,083	176,324
Custodial funds managed by the Company	970,328	901,041
Non affiliated entities
Mortgage servicing portfolio
Originated		120,853,138
Purchased		47,016,708
Total loans serviced, excluding loans held for sale		167,869,846
Non affiliated entities | Mortgage servicing rights
Mortgage servicing portfolio
Originated	145,224,596
Purchased	56,990,486
Total loans serviced, excluding loans held for sale	202,215,082
Non affiliated entities | Servicing rights owned
Mortgage servicing portfolio
Originated	145,224,596	120,853,138
Purchased	56,990,486	47,016,708
Total loans serviced, excluding loans held for sale	202,215,082	167,869,846
Affiliated entities
Mortgage servicing portfolio
Advised entities		74,980,268
Affiliated entities | Mortgage servicing rights
Mortgage servicing portfolio
Advised entities	94,658,154
Affiliated entities | Contract servicing and subservicing
Mortgage servicing portfolio
Advised entities	$ 94,658,154	$ 74,980,268

Loan Sales and Servicing Acti_5

Loan Sales and Servicing Activities - Geographical Distribution of Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Loan Sales and Servicing Activities
Total loans serviced	$ 299,293,872	$ 245,848,491
California
Loan Sales and Servicing Activities
Total loans serviced	51,377,441	45,621,369
Texas
Loan Sales and Servicing Activities
Total loans serviced	23,648,042	19,741,970
Florida
Loan Sales and Servicing Activities
Total loans serviced	22,650,926	17,490,194
Virginia
Loan Sales and Servicing Activities
Total loans serviced	19,011,950	16,210,673
Maryland
Loan Sales and Servicing Activities
Total loans serviced	13,774,011	11,350,939
All other states
Loan Sales and Servicing Activities
Total loans serviced	$ 168,831,502	$ 135,433,346

Fair Value - Financial Statemen

Fair Value - Financial Statement Items Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017
Fair value
Interest rate threshold used in determination of accounting for loans underlying mortgage servicing rights (as a percent)	4.50%
Assets:
Short-term investments at fair value	$ 170,080	$ 117,824
Mortgage loans held for sale	3,099,103	2,521,647	$ 2,416,955	$ 2,527,231	$ 2,584,236	$ 2,935,593	$ 3,037,602	$ 2,277,751
Derivative assets:
Derivative asset, before netting	85,046	123,316
Netting	(6,867)	(26,969)
Total derivative assets	78,179	96,347
Mortgage servicing rights at fair value	638,010	2,820,612
Derivative liabilities:
Derivative liability, before netting	10,043	28,146
Netting	(4,247)	(25,082)
Net amounts of liabilities presented in the consolidated balance sheet	5,796	3,064
Mortgage servicing liabilities	14,120	8,681
PMT
Derivative assets:
Investment in PennyMac Mortgage Investment Trust	1,205	1,397
Interest rate lock commitments
Derivative assets:
Total derivative assets	60,012	50,507
Recurring basis
Assets:
Short-term investments at fair value	170,080	117,824
Mortgage loans held for sale	3,099,103	2,521,647
Derivative assets:
Derivative asset, before netting	85,046	123,316
Netting	(6,867)	(26,969)
Total derivative assets	78,179	96,347
Mortgage servicing rights at fair value	638,010	2,820,612
Total assets	3,986,577	5,557,827
Derivative liabilities:
Derivative liability, before netting	10,043	28,146
Netting	(4,247)	(25,082)
Net amounts of liabilities presented in the consolidated balance sheet	5,796	3,064
Mortgage servicing liabilities	14,120	8,681
Total liabilities	256,450	227,855
Recurring basis | PMT
Derivative assets:
Investment in PennyMac Mortgage Investment Trust	1,205	1,397
Derivative liabilities:
Excess servicing spread financing at fair value to affiliate	236,534	216,110
Recurring basis | Repurchase agreement derivatives
Derivative assets:
Derivative asset, before netting	10,656
Recurring basis | MBS call options
Derivative assets:
Derivative asset, before netting		2,135
Recurring basis | Interest rate lock commitments
Derivative assets:
Derivative asset, before netting	60,012	50,507
Derivative liabilities:
Derivative liability, before netting	1,740	1,169
Recurring basis | Repurchase agreement derivatives
Derivative assets:
Derivative asset, before netting		26,770
Recurring basis | Forward contracts | Purchases
Derivative assets:
Derivative asset, before netting	4,288	35,916
Derivative liabilities:
Derivative liability, before netting	1,272	215
Recurring basis | Forward contracts | Sales
Derivative assets:
Derivative asset, before netting	2,101	437
Derivative liabilities:
Derivative liability, before netting	7,031	26,762
Recurring basis | MBS put options
Derivative assets:
Derivative asset, before netting	3,481	720
Recurring basis | Call options on interest rate futures | Purchases
Derivative assets:
Derivative asset, before netting	938	5,965
Recurring basis | Put options on interest rate futures | Purchases
Derivative assets:
Derivative asset, before netting	3,570	866
Recurring basis | Level 1
Assets:
Short-term investments at fair value	170,080	117,824
Derivative assets:
Derivative asset, before netting	4,508	6,831
Total derivative assets	4,508	6,831
Total assets	175,793	126,052
Recurring basis | Level 1 | PMT
Derivative assets:
Investment in PennyMac Mortgage Investment Trust	1,205	1,397
Recurring basis | Level 1 | Call options on interest rate futures | Purchases
Derivative assets:
Derivative asset, before netting	938	5,965
Recurring basis | Level 1 | Put options on interest rate futures | Purchases
Derivative assets:
Derivative asset, before netting	3,570	866
Recurring basis | Level 2
Assets:
Mortgage loans held for sale	2,316,892	2,261,639
Derivative assets:
Derivative asset, before netting	9,870	39,208
Total derivative assets	9,870	39,208
Total assets	2,326,762	2,300,847
Derivative liabilities:
Derivative liability, before netting	8,303	26,977
Net amounts of liabilities presented in the consolidated balance sheet	8,303	26,977
Total liabilities	8,303	26,977
Recurring basis | Level 2 | MBS call options
Derivative assets:
Derivative asset, before netting		2,135
Recurring basis | Level 2 | Forward contracts | Purchases
Derivative assets:
Derivative asset, before netting	4,288	35,916
Derivative liabilities:
Derivative liability, before netting	1,272	215
Recurring basis | Level 2 | Forward contracts | Sales
Derivative assets:
Derivative asset, before netting	2,101	437
Derivative liabilities:
Derivative liability, before netting	7,031	26,762
Recurring basis | Level 2 | MBS put options
Derivative assets:
Derivative asset, before netting	3,481	720
Recurring basis | Level 3
Assets:
Mortgage loans held for sale	782,211	260,008
Derivative assets:
Derivative asset, before netting	70,668	77,277
Total derivative assets	70,668	77,277
Mortgage servicing rights at fair value	638,010	2,820,612
Total assets	1,490,889	3,157,897
Derivative liabilities:
Derivative liability, before netting	1,740	1,169
Net amounts of liabilities presented in the consolidated balance sheet	1,740	1,169
Mortgage servicing liabilities	14,120	8,681
Total liabilities	252,394	225,960
Recurring basis | Level 3 | PMT
Derivative liabilities:
Excess servicing spread financing at fair value to affiliate	236,534	216,110
Recurring basis | Level 3 | Repurchase agreement derivatives
Derivative assets:
Derivative asset, before netting	10,656
Recurring basis | Level 3 | Interest rate lock commitments
Derivative assets:
Derivative asset, before netting	60,012	50,507
Derivative liabilities:
Derivative liability, before netting	$ 1,740	1,169
Recurring basis | Level 3 | Repurchase agreement derivatives
Derivative assets:
Derivative asset, before netting		$ 26,770

Fair Value - Level 3 Input Roll

Fair Value - Level 3 Input Roll Forward, Recurring Basis (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Roll forward of liabilities measured using Level 3 inputs on a recurring basis
Mortgage servicing liabilities resulting from mortgage loan sales	$ 7,601	$ 17,229	$ 14,991
Excess servicing spread financing
Roll forward of liabilities measured using Level 3 inputs on a recurring basis
Balance at the beginning of the year	236,534	288,669	412,425
Accrual of interest on excess servicing spread financing	15,138	16,951	22,601
Repayment	(46,750)	(54,980)	(69,992)
Changes in fair value included in income	8,500	(19,350)	(23,923)
Balance at the end of the year	216,110	236,534	288,669
Recurring basis
Roll forward of assets measured using Level 3 inputs on a recurring basis
Balance at the beginning of the quarter	1,489,149	622,587	752,551
Reclassification of mortgage servicing rights previously accounted for under the amortization method	1,482,426
Balance after reclassification	2,971,575
Purchases		3,425,474	1,608,773
Purchases and issuances, net	3,455,544
Sales		(1,339,580)	(1,202,621)
Sales and repayments	(1,392,574)
Interest rate lock commitments issued, net			429,598
Mortgage servicing rights resulting from mortgage loan sales	591,757	24,471	17,319
Changes in fair value included in income arising from:
Changes in instrument specific credit risk		(1,794)	3,469
Changes in instrument specific credit risk	158
Other factors	(129,803)	28,868	(17,920)
Total changes in fair value included in income	(129,645)	27,074	(14,451)
Transfers from mortgage loans held for sale from Level 3 to Level 2	(2,128,551)	(851,935)	(410,735)
Transfers to real estate acquired in settlement of loans	(5,185)
Transfers from interest rate lock commitments to mortgage loans held for sale	(206,193)	(418,942)	(557,847)
Balance at the end of the quarter	3,156,728	1,489,149	622,587
Changes in fair value recognized during the period relating to assets still held at the end of the period	(80,309)	(28,850)	(101,460)
Roll forward of liabilities measured using Level 3 inputs on a recurring basis
Balance at the beginning of the year	250,654	303,861	413,824
Issuances	2,688	5,244	6,603
Accrual of interest on excess servicing spread financing	15,138	16,951	22,601
Repayment	(46,750)	(54,980)	(69,992)
Settlement			(59,045)
Mortgage servicing liabilities resulting from mortgage loan sales	7,601	17,229	14,991
Mortgage servicing liability assumed			10,139
Changes in fair value included in income	(4,540)	(37,651)	(35,260)
Balance at the end of the year	224,791	250,654	303,861
Changes in fair value recognized during the period relating to liability still outstanding at the end of the period	(4,540)	(37,651)	(28,050)
Recurring basis | Excess servicing spread financing
Roll forward of liabilities measured using Level 3 inputs on a recurring basis
Balance at the beginning of the year	236,534	288,669	412,425
Issuances	2,688	5,244	6,603
Accrual of interest on excess servicing spread financing	15,138	16,951	22,601
Repayment	(46,750)	(54,980)	(69,992)
Settlement			(59,045)
Changes in fair value included in income	8,500	(19,350)	(23,923)
Balance at the end of the year	216,110	236,534	288,669
Changes in fair value recognized during the period relating to liability still outstanding at the end of the period	8,500	(19,350)	(16,713)
Recurring basis | Mortgage servicing liabilities
Roll forward of liabilities measured using Level 3 inputs on a recurring basis
Balance at the beginning of the year	14,120	15,192	1,399
Mortgage servicing liabilities resulting from mortgage loan sales	7,601	17,229	14,991
Mortgage servicing liability assumed			10,139
Changes in fair value included in income	(13,040)	(18,301)	(11,337)
Balance at the end of the year	8,681	14,120	15,192
Changes in fair value recognized during the period relating to liability still outstanding at the end of the period	(13,040)	(18,301)	(11,337)
Recurring basis | Mortgage loans held for sale
Roll forward of assets measured using Level 3 inputs on a recurring basis
Balance at the beginning of the quarter	782,211	47,271	48,531
Balance after reclassification	782,211
Purchases		2,928,249	1,608,627
Purchases and issuances, net	2,972,042
Sales		(1,339,580)	(1,202,621)
Sales and repayments	(1,360,667)
Changes in fair value included in income arising from:
Changes in instrument specific credit risk		(1,794)	3,469
Changes in instrument specific credit risk	158
Total changes in fair value included in income	158	(1,794)	3,469
Transfers from mortgage loans held for sale from Level 3 to Level 2	(2,128,551)	(851,935)	(410,735)
Transfers to real estate acquired in settlement of loans	(5,185)
Balance at the end of the quarter	260,008	782,211	47,271
Changes in fair value recognized during the period relating to assets still held at the end of the period	(263)	(556)	936
Recurring basis | Interest rate lock commitments
Roll forward of assets measured using Level 3 inputs on a recurring basis
Balance at the beginning of the quarter	58,272	59,391	43,773
Balance after reclassification	58,272
Purchases		302,389
Purchases and issuances, net	195,974
Interest rate lock commitments issued, net			429,598
Changes in fair value included in income arising from:
Other factors	1,285	115,434	143,867
Total changes in fair value included in income	1,285	115,434	143,867
Transfers from interest rate lock commitments to mortgage loans held for sale	(206,193)	(418,942)	(557,847)
Balance at the end of the quarter	49,338	58,272	59,391
Changes in fair value recognized during the period relating to assets still held at the end of the period	49,338	58,272	59,391
Recurring basis | Repurchase agreement derivatives
Roll forward of assets measured using Level 3 inputs on a recurring basis
Balance at the beginning of the quarter	10,656
Balance after reclassification	10,656
Purchases		10,986
Purchases and issuances, net	49,725
Sales and repayments	(31,907)
Changes in fair value included in income arising from:
Other factors	(1,704)	(330)
Total changes in fair value included in income	(1,704)	(330)
Balance at the end of the quarter	26,770	10,656
Changes in fair value recognized during the period relating to assets still held at the end of the period		(330)
Recurring basis | Mortgage servicing rights
Roll forward of assets measured using Level 3 inputs on a recurring basis
Balance at the beginning of the quarter	638,010	515,925	660,247
Reclassification of mortgage servicing rights previously accounted for under the amortization method	1,482,426
Balance after reclassification	2,120,436
Purchases		183,850	146
Purchases and issuances, net	237,803
Mortgage servicing rights resulting from mortgage loan sales	591,757	24,471	17,319
Changes in fair value included in income arising from:
Other factors	(129,384)	(86,236)	(161,787)
Total changes in fair value included in income	(129,384)	(86,236)	(161,787)
Balance at the end of the quarter	2,820,612	638,010	515,925
Changes in fair value recognized during the period relating to assets still held at the end of the period	$ (129,384)	$ (86,236)	$ (161,787)

Fair Value - Changes in Fair Va

Fair Value - Changes in Fair Value, Fair Value Option, Recurring Basis (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Liabilities.
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	$ 4,540	$ 37,651	$ 35,260
Liabilities. | Net loan servicing fees
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	4,540	37,651	35,260
Excess servicing spread financing
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	(8,500)	19,350	23,923
Excess servicing spread financing | Net loan servicing fees
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	(8,500)	19,350	23,923
Mortgage servicing liabilities
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	13,040	18,301	11,337
Mortgage servicing liabilities | Net loan servicing fees
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	13,040	18,301	11,337
Assets
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	59,227	339,856	351,544
Assets | Net gains on mortgage loans held for sale at fair value
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	188,611	426,092	513,331
Assets | Net loan servicing fees
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	(129,384)	(86,236)	(161,787)
Mortgage loans held for sale
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	188,611	426,092	513,331
Mortgage loans held for sale | Net gains on mortgage loans held for sale at fair value
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	188,611	426,092	513,331
Mortgage servicing rights at fair value
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	(129,384)	(86,236)	(161,787)
Mortgage servicing rights at fair value | Net loan servicing fees
Net gains (losses) from changes in estimated fair values included in earnings for financial statement items carried at estimated fair value
Total gains (losses) from changes in estimated fair values included in earnings	$ (129,384)	$ (86,236)	$ (161,787)

Fair Value - Fair Value Option

Fair Value - Fair Value Option Maturities, Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017
Fair value
Total fair value	$ 2,521,647	$ 2,416,955	$ 2,527,231	$ 2,584,236	$ 3,099,103	$ 2,935,593	$ 3,037,602	$ 2,277,751
Recurring basis
Fair value
Total fair value	2,521,647				3,099,103
Mortgage loans held for sale
Fair value
Current through 89 days delinquent	2,324,203				2,430,517
Not in foreclosure	143,631				614,329
In foreclosure	53,813				54,257
Total fair value	2,521,647				3,099,103
Principal amount due upon maturity
Current through 89 days delinquent	2,220,371				2,326,772
Not in foreclosure	144,011				614,357
In foreclosure	56,254				57,248
Total principal amount due upon maturity	2,420,636				2,998,377
Difference
Current through 89 days delinquent	103,832				103,745
Not in foreclosure	(380)				(28)
In foreclosure	(2,441)				(2,991)
Total difference	$ 101,011				$ 100,726

Fair Value - Measurement Basis,

Fair Value - Measurement Basis, Nonrecurring (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Total gains (losses) on assets measured at estimated fair values on a nonrecurring basis
Notes Payable	$ 1,292,291	$ 891,505
Nonrecurring basis
Financial statement items measured at fair value on a nonrecurring basis
Mortgage servicing rights at lower of amortized cost or fair value		1,463,552
Real estate acquired in settlement of loans	2,150	2,355
Total assets		1,465,907
Total gains (losses) on assets measured at estimated fair values on a nonrecurring basis
Mortgage servicing rights at lower of amortized cost or fair value		(6,853)	$ (60,487)
Real estate acquired in settlement of loans	(75)	(125)	(86)
Total gains on assets measured at estimated fair values on a nonrecurring basis	(75)	(6,978)	$ (60,487)
Nonrecurring basis | Level 3
Financial statement items measured at fair value on a nonrecurring basis
Mortgage servicing rights at lower of amortized cost or fair value		1,463,552
Real estate acquired in settlement of loans	2,150	2,355
Total assets		1,465,907
Fair Values
Total gains (losses) on assets measured at estimated fair values on a nonrecurring basis
Notes Payable	$ 1,300,000	$ 903,900

Fair Value - Level 3 Unobservab

Fair Value - Level 3 Unobservable Inputs, Mortgage Loans and IRLC (Details) - item	Dec. 31, 2018	Dec. 31, 2017
Mortgage loans held for sale | Discount rate | Level 3 | Minimum
Excess servicing spread financing
Input	2.8	2.9
Mortgage loans held for sale | Discount rate | Level 3 | Maximum
Excess servicing spread financing
Input	9.2	10
Mortgage loans held for sale | Discount rate | Level 3 | Weighted average
Excess servicing spread financing
Input	2.9	2.9
Mortgage loans held for sale | Twelve-month projected housing price index Change | Level 3 | Minimum
Excess servicing spread financing
Input	2.2	3.1
Mortgage loans held for sale | Twelve-month projected housing price index Change | Level 3 | Maximum
Excess servicing spread financing
Input	5	5.6
Mortgage loans held for sale | Twelve-month projected housing price index Change | Level 3 | Weighted average
Excess servicing spread financing
Input	3.5	3.6
Mortgage loans held for sale | Prepayment/resale speed | Level 3 | Minimum
Excess servicing spread financing
Input	0.1	0.2
Mortgage loans held for sale | Prepayment/resale speed | Level 3 | Maximum
Excess servicing spread financing
Input	21.8	72.2
Mortgage loans held for sale | Prepayment/resale speed | Level 3 | Weighted average
Excess servicing spread financing
Input	20.1	44.6
Mortgage loans held for sale | Total prepayment speed | Level 3 | Minimum
Excess servicing spread financing
Input	0.1	0.2
Mortgage loans held for sale | Total prepayment speed | Level 3 | Maximum
Excess servicing spread financing
Input	40.5	75.2
Mortgage loans held for sale | Total prepayment speed | Level 3 | Weighted average
Excess servicing spread financing
Input	37.7	55.8
Interest rate lock commitments | Pull-through rate | Level 3 | Minimum
Excess servicing spread financing
Input	16.6	25
Interest rate lock commitments | Pull-through rate | Level 3 | Maximum
Excess servicing spread financing
Input	100	100
Interest rate lock commitments | Pull-through rate | Level 3 | Weighted average
Excess servicing spread financing
Input	84.1	85.6
Interest rate lock commitments | Mortgage servicing rights value expressed as servicing fee multiple | Level 3 | Minimum
Excess servicing spread financing
Input	1.5	1.4
Interest rate lock commitments | Mortgage servicing rights value expressed as servicing fee multiple | Level 3 | Maximum
Excess servicing spread financing
Input	5.5	5.8
Interest rate lock commitments | Mortgage servicing rights value expressed as servicing fee multiple | Level 3 | Weighted average
Excess servicing spread financing
Input	3.8	4
Interest rate lock commitments | Percentage of unpaid principal balance | Level 3 | Minimum
Excess servicing spread financing
Input	0.4	0.3
Interest rate lock commitments | Percentage of unpaid principal balance | Level 3 | Maximum
Excess servicing spread financing
Input	3.2	3
Interest rate lock commitments | Percentage of unpaid principal balance | Level 3 | Weighted average
Excess servicing spread financing
Input	1.5	1.4
Repurchase agreement derivatives
Excess servicing spread financing
Acceptance rate (as a percent)	97.00%

Fair Value - Level 3 Unobserv_2

Fair Value - Level 3 Unobservable Inputs, Mortgage Servicing Rights - Initial Recognition (Details)	12 Months Ended
	Dec. 31, 2018USD ($)item	Dec. 31, 2017USD ($)item	Dec. 31, 2016USD ($)item
Mortgage servicing rights
Inputs
Amount recognized | $	$ 591,757,000	$ 24,471,000	$ 17,319,000
Fair Values | Mortgage servicing rights | Level 3 | Minimum
Inputs:
Annual per-loan cost of servicing | $	78	78
Fair Values | Mortgage servicing rights | Level 3 | Maximum
Inputs:
Annual per-loan cost of servicing | $	99	97
Fair Values | Mortgage servicing rights | Level 3 | Weighted average
Inputs:
Annual per-loan cost of servicing | $	$ 93	$ 89
Fair Values | Mortgage servicing rights | Pricing spread | Level 3 | Minimum
Inputs:
Input	5.8	7.6
Fair Values | Mortgage servicing rights | Pricing spread | Level 3 | Maximum
Inputs:
Input	16.1	14.1
Fair Values | Mortgage servicing rights | Pricing spread | Level 3 | Weighted average
Inputs:
Input	8.7	9.8
Fair Values | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Minimum
Inputs:
Input	8.4	7.9
Fair Values | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Maximum
Inputs:
Input	32.6	46.2
Fair Values | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Weighted average
Inputs:
Input	9.9	10.5
Fair Values | Mortgage servicing rights | Life | Level 3 | Minimum
Inputs:
Input	1.5	1.2
Fair Values | Mortgage servicing rights | Life | Level 3 | Maximum
Inputs:
Input	7.9	7.8
Fair Values | Mortgage servicing rights | Life | Level 3 | Weighted average
Inputs:
Input	7.2	6.6
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Level 3
Inputs
Amount recognized | $	$ 591,757,000	$ 24,471,000	17,319,000
Unpaid principal balance of underlying mortgage loans | $	$ 42,008,585,000	$ 2,316,539,000	$ 1,452,779,000
Weighted-average servicing fee rate (as a percent)	0.36%	0.31%	0.33%
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Level 3 | Minimum
Inputs:
Annual per-loan cost of servicing | $	$ 78	$ 78	$ 68
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Level 3 | Maximum
Inputs:
Annual per-loan cost of servicing | $	99	101	105
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Level 3 | Weighted average
Inputs:
Annual per-loan cost of servicing | $	$ 91	$ 89	$ 88
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Pricing spread | Level 3 | Minimum
Inputs:
Input	5.8	7.6	7.2
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Pricing spread | Level 3 | Maximum
Inputs:
Input	16.4	11.2	10.5
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Pricing spread | Level 3 | Weighted average
Inputs:
Input	9.9	10.5	9.2
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Annual total prepayment speed | Level 3 | Minimum
Inputs:
Input	3.9	3.9	3.3
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Annual total prepayment speed | Level 3 | Maximum
Inputs:
Input	61.8	71.8	53.8
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Annual total prepayment speed | Level 3 | Weighted average
Inputs:
Input	10.8	12.5	11.8
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Life | Level 3 | Minimum
Inputs:
Input	0.5	0.8	0.5
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Life | Level 3 | Maximum
Inputs:
Input	11.6	11.5	11.9
Fair Values | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Life | Level 3 | Weighted average
Inputs:
Input	7.3	6.6	6.8
Amortized cost | Mortgage servicing rights | Level 3 | Minimum
Inputs:
Annual per-loan cost of servicing | $		$ 79
Amortized cost | Mortgage servicing rights | Level 3 | Maximum
Inputs:
Annual per-loan cost of servicing | $		97
Amortized cost | Mortgage servicing rights | Level 3 | Weighted average
Inputs:
Annual per-loan cost of servicing | $		$ 89
Amortized cost | Mortgage servicing rights | Pricing spread | Level 3 | Minimum
Inputs:
Input		7.6
Amortized cost | Mortgage servicing rights | Pricing spread | Level 3 | Maximum
Inputs:
Input		14.1
Amortized cost | Mortgage servicing rights | Pricing spread | Level 3 | Weighted average
Inputs:
Input		10.3
Amortized cost | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Minimum
Inputs:
Input		7.4
Amortized cost | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Maximum
Inputs:
Input		44.1
Amortized cost | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Weighted average
Inputs:
Input		9.7
Amortized cost | Mortgage servicing rights | Life | Level 3 | Minimum
Inputs:
Input		2
Amortized cost | Mortgage servicing rights | Life | Level 3 | Maximum
Inputs:
Input		8.3
Amortized cost | Mortgage servicing rights | Life | Level 3 | Weighted average
Inputs:
Input		7.5
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Level 3
Inputs
Amount recognized | $		$ 556,630,000	$ 560,212,000
Unpaid principal balance of underlying mortgage loans | $		$ 44,664,551,000	$ 44,827,516,000
Weighted-average servicing fee rate (as a percent)		0.31%	0.30%
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Level 3 | Minimum
Inputs:
Annual per-loan cost of servicing | $		$ 79	$ 68
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Level 3 | Maximum
Inputs:
Annual per-loan cost of servicing | $		101	106
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Level 3 | Weighted average
Inputs:
Annual per-loan cost of servicing | $		$ 89	$ 89
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Pricing spread | Level 3 | Minimum
Inputs:
Input		7.6	7.2
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Pricing spread | Level 3 | Maximum
Inputs:
Input		15.2	14.4
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Pricing spread | Level 3 | Weighted average
Inputs:
Input		10.7	9.5
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Annual total prepayment speed | Level 3 | Minimum
Inputs:
Input		3.4	2.8
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Annual total prepayment speed | Level 3 | Maximum
Inputs:
Input		47.6	50.9
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Annual total prepayment speed | Level 3 | Weighted average
Inputs:
Input		9.1	9
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Life | Level 3 | Minimum
Inputs:
Input		1.5	1.3
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Life | Level 3 | Maximum
Inputs:
Input		12.2	12.9
Amortized cost | Mortgage servicing rights | MSRs at the time of initial recognition, excluding MSR purchases | Life | Level 3 | Weighted average
Inputs:
Input		8.1	8.1

Fair Value - Level 3 Unobserv_3

Fair Value - Level 3 Unobservable Inputs, Mortgage Servicing Rights, Effect of Change In Inputs on Fair Value (Details)	12 Months Ended
	Dec. 31, 2018USD ($)item	Dec. 31, 2017USD ($)item	Sep. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Mar. 31, 2018USD ($)	Sep. 30, 2017USD ($)	Jun. 30, 2017USD ($)	Mar. 31, 2017USD ($)
MSR and pool characteristics
Carrying value	$ 2,820,612,000	$ 2,119,588,000	$ 2,785,964,000	$ 2,486,157,000	$ 2,354,489,000	$ 2,016,485,000	$ 1,951,599,000	$ 1,725,061,000
Mortgage servicing liabilities | Level 3
Prepayment speed
Annual per-loan cost of servicing	373	404
Fair Values | Mortgage servicing rights | Level 3
MSR and pool characteristics
Carrying value	2,820,612,000	638,010,000
Unpaid principal balance of underlying mortgage loans	$ 201,054,144,000	$ 51,883,539,000
Weighted-average note interest rate (as a percent)	4	4
Weighted-average servicing fee rate (as a percent)	0.33%	0.32%
Pricing spread
Effect on fair value of 5% adverse change	$ (45,268,000)	$ (10,760,000)
Effect on fair value of 10% adverse change	(89,073,000)	(21,155,000)
Effect on fair value of 20% adverse change	(172,556,000)	(40,916,000)
Prepayment speed
Effect on fair value of 5% adverse change	(47,687,000)	(10,809,000)
Effect on fair value of 10% adverse change	(93,626,000)	(21,239,000)
Effect on fair value of 20% adverse change	(180,623,000)	(41,038,000)
Annual per-loan cost of servicing
Effect on fair value of 5% adverse change	(22,944,000)	(6,247,000)
Effect on fair value of 10% adverse change	(45,888,000)	(12,494,000)
Effect on fair value of 20% adverse change	(91,775,000)	(24,987,000)
Fair Values | Mortgage servicing rights | Level 3 | Minimum
Prepayment speed
Annual per-loan cost of servicing	78	78
Fair Values | Mortgage servicing rights | Level 3 | Maximum
Prepayment speed
Annual per-loan cost of servicing	99	97
Fair Values | Mortgage servicing rights | Level 3 | Weighted average
Prepayment speed
Annual per-loan cost of servicing	$ 93	$ 89
Fair Values | Mortgage servicing rights | Pricing spread | Level 3 | Minimum
Inputs
Input | item	5.8	7.6
Fair Values | Mortgage servicing rights | Pricing spread | Level 3 | Maximum
Inputs
Input | item	16.1	14.1
Fair Values | Mortgage servicing rights | Pricing spread | Level 3 | Weighted average
Inputs
Input | item	8.7	9.8
Fair Values | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Minimum
Inputs
Input | item	8.4	7.9
Fair Values | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Maximum
Inputs
Input | item	32.6	46.2
Fair Values | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Weighted average
Inputs
Input | item	9.9	10.5
Fair Values | Mortgage servicing rights | Life | Level 3 | Minimum
Inputs
Input | item	1.5	1.2
Fair Values | Mortgage servicing rights | Life | Level 3 | Maximum
Inputs
Input | item	7.9	7.8
Fair Values | Mortgage servicing rights | Life | Level 3 | Weighted average
Inputs
Input | item	7.2	6.6
Amortized cost | Mortgage servicing rights | Level 3
MSR and pool characteristics
Carrying value		$ 1,481,578,000
Unpaid principal balance of underlying mortgage loans		$ 114,365,698,000
Weighted-average note interest rate (as a percent)		3.80
Weighted-average servicing fee rate (as a percent)		0.31%
Pricing spread
Effect on fair value of 5% adverse change		$ (27,700,000)
Effect on fair value of 10% adverse change		(54,376,000)
Effect on fair value of 20% adverse change		(104,869,000)
Prepayment speed
Effect on fair value of 5% adverse change		(23,544,000)
Effect on fair value of 10% adverse change		(46,284,000)
Effect on fair value of 20% adverse change		(89,514,000)
Annual per-loan cost of servicing
Effect on fair value of 5% adverse change		(11,216,000)
Effect on fair value of 10% adverse change		(22,431,000)
Effect on fair value of 20% adverse change		(44,863,000)
Amortized cost | Mortgage servicing rights | Level 3 | Minimum
Prepayment speed
Annual per-loan cost of servicing		79
Amortized cost | Mortgage servicing rights | Level 3 | Maximum
Prepayment speed
Annual per-loan cost of servicing		97
Amortized cost | Mortgage servicing rights | Level 3 | Weighted average
Prepayment speed
Annual per-loan cost of servicing		$ 89
Amortized cost | Mortgage servicing rights | Pricing spread | Level 3 | Minimum
Inputs
Input | item		7.6
Amortized cost | Mortgage servicing rights | Pricing spread | Level 3 | Maximum
Inputs
Input | item		14.1
Amortized cost | Mortgage servicing rights | Pricing spread | Level 3 | Weighted average
Inputs
Input | item		10.3
Amortized cost | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Minimum
Inputs
Input | item		7.4
Amortized cost | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Maximum
Inputs
Input | item		44.1
Amortized cost | Mortgage servicing rights | Annual total prepayment speed | Level 3 | Weighted average
Inputs
Input | item		9.7
Amortized cost | Mortgage servicing rights | Life | Level 3 | Minimum
Inputs
Input | item		2
Amortized cost | Mortgage servicing rights | Life | Level 3 | Maximum
Inputs
Input | item		8.3
Amortized cost | Mortgage servicing rights | Life | Level 3 | Weighted average
Inputs
Input | item		7.5

Fair Value - Level 3 Unobserv_4

Fair Value - Level 3 Unobservable Inputs, ESS (Details) - Excess servicing spread financing - Level 3 $ in Thousands	12 Months Ended
	Dec. 31, 2018USD ($)item	Dec. 31, 2017USD ($)item
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Carrying value | $	$ 216,110	$ 236,534
Unpaid principal balance of underlying mortgage loans | $	$ 23,196,033	$ 27,217,199
Average servicing fee rate (as a percent)	0.34	0.34
Average excess servicing spread (as a percent)	0.19	0.19
Pricing spread | Minimum
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input	2.8	3.8
Pricing spread | Maximum
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input	3.2	4.3
Pricing spread | Weighted average
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input	3.1	4.1
Annual total prepayment speed | Minimum
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input	8.2	8.4
Annual total prepayment speed | Maximum
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input	29.5	41.4
Annual total prepayment speed | Weighted average
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input	9.7	10.8
Life | Minimum
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input	1.6	1.4
Life | Maximum
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input	7.6	7.7
Life | Weighted average
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input	6.8	6.5

Fair Value - Level 3 Unobserv_5

Fair Value - Level 3 Unobservable Inputs, Mortgage Servicing Liabilities (Details)	12 Months Ended
	Dec. 31, 2018USD ($)item	Dec. 31, 2017USD ($)item
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Carrying value	$ 8,681,000	$ 14,120,000
Mortgage servicing liabilities | Level 3
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Carrying value	8,681,000	14,120,000
Unpaid principal balance of underlying mortgage loans	$ 1,160,938,000	$ 1,620,609,000
Weighted-average note interest rate (as a percent)	0.25	0.25
Annual per-loan cost of servicing	$ 373	$ 404
Mortgage servicing liabilities | Pricing spread | Level 3
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input | item	7.3	7.7
Mortgage servicing liabilities | Annual total prepayment speed | Level 3
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input | item	32.2	32.9
Mortgage servicing liabilities | Life | Level 3
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
Input | item	3.8	3.5

Mortgage Loans Held for Sale _3

Mortgage Loans Held for Sale at Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017
Mortgage Loans Held for Sale at Fair Value
Mortgage loans held for sale	$ 2,521,647	$ 2,416,955	$ 2,527,231	$ 2,584,236	$ 3,099,103	$ 2,935,593	$ 3,037,602	$ 2,277,751
Fair value of mortgage loans pledged to secure mortgage loans sold under agreements to repurchase	1,923,857				2,530,299
Fair value of mortgage loans pledged to secure mortgage loan participation and sale agreement	555,001				551,688
Pledged Assets Separately Reported, Loans Pledged as Collateral, at Fair Value, Total	2,478,858				3,081,987
Government-insured or guaranteed
Mortgage Loans Held for Sale at Fair Value
Mortgage loans held for sale	2,116,126				2,085,764
Conventional mortgage loans
Mortgage Loans Held for Sale at Fair Value
Mortgage loans held for sale	145,513				231,128
Mortgage loans purchased from Ginnie Mae pools serviced by the entity
Mortgage Loans Held for Sale at Fair Value
Mortgage loans held for sale	250,585				777,300
Mortgage loans repurchased pursuant to representations and warranties
Mortgage Loans Held for Sale at Fair Value
Mortgage loans held for sale	$ 9,423				$ 4,911

Derivative Activities - Other I

Derivative Activities - Other Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2017
Derivative assets:
Derivative asset, before netting				$ 123,316	$ 85,046
Netting				(26,969)	(6,867)
Total derivative assets				96,347	78,179
Derivative liabilities:
Derivative liability, before netting				28,146	10,043
Netting				(25,082)	(4,247)
Net amounts of liabilities presented in the consolidated balance sheet				3,064	5,796
Interest Expense. | Repurchase agreement derivative
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Gains (losses) recognized on derivative financial instruments	$ (1,704)	$ (330)
Net gains on mortgage loans held for sale at fair value | Interest rate lock commitments and mortgage loans held for sale
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Gains (losses) recognized on derivative financial instruments	81,522	(21,255)	$ 20,619
Net loan servicing fees | Mortgage servicing rights
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Gains (losses) recognized on derivative financial instruments	(121,045)	(37,855)	26,405
Margin Deposits
Derivative assets:
Margin deposit assets				1,887	2,620
Interest rate lock commitments
Derivative assets:
Total derivative assets				50,507	60,012
Interest rate lock commitments | Net gains on mortgage loans held for sale at fair value
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Gains (losses) recognized on derivative financial instruments	(8,934)	(1,120)	15,618
Not designated as hedging instrument | Repurchase agreement derivatives
Derivative assets:
Derivative asset, before netting				26,770	10,656
Not designated as hedging instrument | Interest rate lock commitments
Derivative Instruments
Notional amount	3,654,955	3,654,955		2,805,400	3,654,955
Derivative assets:
Derivative asset, before netting				50,507	60,012
Derivative liabilities:
Derivative liability, before netting				1,169	1,740
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Balance at beginning of quarter	3,654,955
Balance end of quarter	2,805,400	3,654,955
Not designated as hedging instrument | Forward contracts | Purchases
Derivative Instruments
Notional amount	4,920,883	12,746,191	5,254,293	6,657,026	4,920,883
Derivative assets:
Derivative asset, before netting				35,916	4,288
Derivative liabilities:
Derivative liability, before netting				215	1,272
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Balance at beginning of quarter	4,920,883	12,746,191	5,254,293
Additions	184,780,152	181,761,564	210,412,697
Dispositions/expirations	(183,044,009)	(189,586,872)	(202,920,799)
Balance end of quarter	6,657,026	4,920,883	12,746,191
Not designated as hedging instrument | Forward contracts | Sales
Derivative Instruments
Notional amount	5,204,796	16,577,942	6,230,811	6,890,046	5,204,796
Derivative assets:
Derivative asset, before netting				437	2,101
Derivative liabilities:
Derivative liability, before netting				26,762	7,031
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Balance at beginning of quarter	5,204,796	16,577,942	6,230,811
Additions	230,735,936	226,000,107	262,202,884
Dispositions/expirations	(229,050,686)	(237,373,253)	(251,855,753)
Balance end of quarter	6,890,046	5,204,796	16,577,942
Not designated as hedging instrument | MBS put options
Derivative Instruments
Notional amount	4,925,000	1,175,000	1,275,000	4,635,000	4,925,000
Derivative assets:
Derivative asset, before netting				720	3,481
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Balance at beginning of quarter	4,925,000	1,175,000	1,275,000
Additions	31,085,000	25,050,000	19,225,000
Dispositions/expirations	(31,375,000)	(21,300,000)	(19,325,000)
Balance end of quarter	4,635,000	4,925,000	1,175,000
Not designated as hedging instrument | MBS call options
Derivative Instruments
Notional amount	1,450,000	1,600,000	1,600,000	1,450,000
Derivative assets:
Derivative asset, before netting				2,135
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Balance at beginning of quarter		1,600,000
Additions	14,325,000	17,700,000	1,600,000
Dispositions/expirations	(12,875,000)	(19,300,000)
Balance end of quarter	1,450,000		1,600,000
Not designated as hedging instrument | Put options on interest rate futures | Purchases
Derivative Instruments
Notional amount	2,125,000	1,125,000	1,650,000	3,085,000	2,125,000
Derivative assets:
Derivative asset, before netting				866	3,570
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Balance at beginning of quarter	2,125,000	1,125,000	1,650,000
Additions	20,559,800	11,360,000	15,331,000
Dispositions/expirations	(19,599,800)	(10,360,000)	(15,856,000)
Balance end of quarter	3,085,000	2,125,000	1,125,000
Not designated as hedging instrument | Put options on interest rate futures | Sales
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Additions	20,474,800	10,010,000	9,436,000
Dispositions/expirations	(20,474,800)	(10,010,000)	(9,436,000)
Not designated as hedging instrument | Call options on interest rate futures | Purchases
Derivative Instruments
Notional amount	100,000	900,000	600,000	1,512,500	100,000
Derivative assets:
Derivative asset, before netting				5,965	938
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Balance at beginning of quarter	100,000	900,000	600,000
Additions	4,387,500	1,939,300	5,687,500
Dispositions/expirations	(2,975,000)	(2,739,300)	(5,387,500)
Balance end of quarter	1,512,500	100,000	900,000
Not designated as hedging instrument | Call options on interest rate futures | Sales
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Additions	2,100,000	2,739,300	550,000
Dispositions/expirations	(2,100,000)	(2,739,300)	(550,000)
Not designated as hedging instrument | Treasury future | Purchases
Derivative Instruments
Notional amount	100,000	100,000		835,000	100,000
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Balance at beginning of quarter	100,000
Additions	9,837,500	544,900	585,800
Dispositions/expirations	(9,102,500)	(444,900)	(585,800)
Balance end of quarter	835,000	100,000
Not designated as hedging instrument | Treasury future | Sales
Derivative Instruments
Notional amount	1,450,000			1,450,000
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Additions	11,213,800	444,900	585,800
Dispositions/expirations	(9,763,800)	(444,900)	(585,800)
Balance end of quarter	1,450,000
Not designated as hedging instrument | Interest rate swap futures | Purchases
Derivative Instruments
Notional amount	1,400,000	200,000	200,000	$ 625,000	$ 1,400,000
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Balance at beginning of quarter	1,400,000	200,000
Additions	1,510,000	2,100,000	400,000
Dispositions/expirations	(2,285,000)	(900,000)	(200,000)
Balance end of quarter	625,000	1,400,000	200,000
Not designated as hedging instrument | Interest rate swap futures | Sales
Activity for derivative contracts used to hedge the IRLCs and inventory of mortgage loans at notional value
Additions	2,285,000	900,000	200,000
Dispositions/expirations	$ (2,285,000)	$ (900,000)	$ (200,000)

Derivative Activities - Offsett

Derivative Activities - Offsetting of Derivative Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Derivatives not subject to master netting arrangements
Gross amounts of recognized assets	$ 77,277	$ 70,668
Derivatives subject to master netting arrangements:
Gross amounts of recognized assets	46,039	14,378
Gross amounts offset in the consolidated balance sheet	(26,969)	(6,867)
Net amounts of assets presented in the consolidated balance sheet	19,070	7,511
Total
Gross amounts of recognized assets	123,316	85,046
Net amounts of assets presented in the balance sheet	96,347	78,179
Interest rate lock commitments
Derivatives not subject to master netting arrangements
Gross amounts of recognized assets	50,507	60,012
Total
Net amounts of assets presented in the balance sheet	50,507	60,012
Repurchase agreement derivatives
Derivatives not subject to master netting arrangements
Gross amounts of recognized assets	26,770	10,656
MBS put options
Derivatives subject to master netting arrangements:
Gross amounts of recognized assets	720	3,481
Net amounts of assets presented in the consolidated balance sheet	720	3,481
MBS call options
Derivatives subject to master netting arrangements:
Gross amounts of recognized assets	2,135
Net amounts of assets presented in the consolidated balance sheet	2,135
Forward contracts | Purchases
Derivatives subject to master netting arrangements:
Gross amounts of recognized assets	35,916	4,288
Net amounts of assets presented in the consolidated balance sheet	35,916	4,288
Forward contracts | Sales
Derivatives subject to master netting arrangements:
Gross amounts of recognized assets	437	2,101
Net amounts of assets presented in the consolidated balance sheet	437	2,101
Put options on interest rate futures | Purchases
Derivatives subject to master netting arrangements:
Gross amounts of recognized assets	866	3,570
Net amounts of assets presented in the consolidated balance sheet	866	3,570
Call options on interest rate futures | Purchases
Derivatives subject to master netting arrangements:
Gross amounts of recognized assets	5,965	938
Net amounts of assets presented in the consolidated balance sheet	$ 5,965	$ 938

Derivative Activities - Offse_2

Derivative Activities - Offsetting of Derivative Assets - Derivative Assets, Financial Assets, and Collateral Held by Counterparty (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Total
Net amounts of assets presented in the balance sheet	$ 96,347	$ 78,179
Net amount		78,179
Deutsche Bank AG
Total
Net amounts of assets presented in the balance sheet	26,770	10,656
Net amount		10,656
RJ O'Brien
Total
Net amounts of assets presented in the balance sheet	6,831	4,508
Net amount		4,508
Citibank, N.A.
Total
Net amounts of assets presented in the balance sheet	2,488	472
Net amount		472
JP Morgan
Total
Net amounts of assets presented in the balance sheet	1,399	267
Net amount		267
Bank of America, N.A.
Total
Net amounts of assets presented in the balance sheet	2,781
Federal National Mortgage Association
Total
Net amounts of assets presented in the balance sheet	456	1,092
Net amount		1,092
Other
Total
Net amounts of assets presented in the balance sheet	1,408	1,172
Net amount		1,172
Wells Fargo Bank, N.A.
Total
Net amounts of assets presented in the balance sheet	3,707
Interest rate lock commitments
Total
Net amounts of assets presented in the balance sheet	$ 50,507	60,012
Net amount		$ 60,012

Derivative Activities - Offse_3

Derivative Activities - Offsetting of Derivative Assets - Offsetting of Derivative and Financial Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Derivatives: Subject to master netting arrangements:
Gross amounts of recognized liabilities	$ 26,977	$ 8,303
Netting	(25,082)	(4,247)
Net amounts of liabilities presented in the balance sheet	1,895	4,056
Total
Gross amounts of recognized liabilities	28,146	10,043
Net amounts of liabilities presented in the consolidated balance sheet	3,064	5,796
Mortgage loans sold under agreements to repurchase
Net amounts of liabilities presented in the consolidated balance sheet	1,935,200
Debt Issuance Costs
Debt issuance costs, gross	(1,341)	672
Debt issuance costs	(1,341)	672
Net amount of liabilities in the consolidated balance sheet	1,933,859	2,381,538
Total
Gross amounts of recognized liabilities	1,962,005	2,391,581
Gross amounts offset in the consolidated balance sheet	(25,082)	(4,247)
Net amounts of liabilities presented in the consolidated balance sheet	1,938,264	2,386,662
Net amount of liabilities in the consolidated balance sheet	3,064	5,796
Receivable from Counterparties
Total
Net amounts of liabilities presented in the consolidated balance sheet	1,936,923	2,387,334
Assets sold under agreements to repurchase
Mortgage loans sold under agreements to repurchase
Gross amounts of recognized liabilities	1,935,200	2,380,866
Net amounts of liabilities presented in the consolidated balance sheet	1,935,200	2,380,866
Net amounts of liabilities presented in the consolidated balance sheet	1,935,200	2,380,866
Debt Issuance Costs
Debt issuance costs	(1,341)	672
Gross amounts of recognized liabilities	1,933,859	2,381,538
Net amount of liabilities in the consolidated balance sheet	1,933,859	2,381,538
Forward contracts | Purchases
Derivatives: Subject to master netting arrangements:
Gross amounts of recognized liabilities	215	1,272
Net amounts of liabilities presented in the balance sheet	215	1,272
Forward contracts | Sales
Derivatives: Subject to master netting arrangements:
Gross amounts of recognized liabilities	26,762	7,031
Net amounts of liabilities presented in the balance sheet	26,762	7,031
Interest rate lock commitments
Derivatives not subject to master netting arrangements
Gross amounts of recognized liabilities	$ 1,169	$ 1,740

Derivative Activities - Offse_4

Derivative Activities - Offsetting of Derivative Assets - Derivative Liabilities, Financial Liabilities, and Collateral Held by Counterparty (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	$ 1,938,264	$ 2,386,662
Financial instruments	(1,935,200)	(2,380,866)
Net amount of liabilities in the consolidated balance sheet	3,064	5,796
Credit Suisse First Boston Mortgage Capital LLC
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	691,030	1,010,562
Financial instruments	(690,766)	(1,010,320)
Net amount of liabilities in the consolidated balance sheet	264	242
Bank of America, N.A.
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	170,820	406,787
Financial instruments	(170,820)	(406,355)
Net amount of liabilities in the consolidated balance sheet		432
Deutsche Bank AG
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	741,978	593,864
Financial instruments	(741,978)	(593,864)
Barclays
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet		6,387
Financial instruments		(6,387)
Royal Bank of Canada
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	35,181	24,835
Financial instruments	(35,181)	(23,752)
Net amount of liabilities in the consolidated balance sheet		1,083
JP Morgan
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	54,326	90,442
Financial instruments	(54,326)	(90,442)
Morgan Stanley Bank
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	77,687	139,491
Financial instruments	(77,687)	(138,983)
Net amount of liabilities in the consolidated balance sheet		508
Citibank, N.A.
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	14,960	23,010
Financial instruments	(14,960)	(23,010)
BNP Paribas
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	149,675	87,753
Financial instruments	(149,482)	(87,753)
Net amount of liabilities in the consolidated balance sheet	193
Other
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	1,438	1,791
Net amount of liabilities in the consolidated balance sheet	1,438	1,791
Interest rate lock commitments | Credit Suisse First Boston Mortgage Capital LLC
Derivative liabilities:
Net amounts of liabilities presented in the consolidated balance sheet	1,169	1,740
Net amount of liabilities in the consolidated balance sheet	$ 1,169	$ 1,740

Mortgage Servicing Rights and_3

Mortgage Servicing Rights and Mortgage Servicing Liabilities - Activity in MSRs at Fair Value (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Jan. 01, 2018	Jan. 01, 2017	Jan. 01, 2016
Activity in MSRs carried at fair value
Balance at beginning of year	$ 638,010
Change in fair value:
Balance at end of year	2,820,612	$ 638,010
Mortgage servicing rights
Activity in MSRs carried at fair value
Balance at beginning of year	638,010	515,925	$ 660,247
Reclassification of mortgage servicing rights previously accounted for under the amortization method				$ 1,482,426
Balance after reclassification				$ 2,120,436	$ 515,925	$ 660,247
Additions - Purchases	237,803	183,850	146
Additions - Mortgage servicing rights resulting from mortgage loan sales	591,757	24,471	17,319
Additions	829,560	208,321	17,465
Change in fair value:
Changes in inputs used in valuation model	174,458	(4,771)	(80,244)
Other changes in fair value	(303,842)	(81,465)	(81,543)
Total change in fair value	(129,384)	(86,236)	(161,787)
Balance at end of year	2,820,612	638,010	$ 515,925
Total	$ 2,807,333	$ 630,711

Mortgage Servicing Rights and_4

Mortgage Servicing Rights and Mortgage Servicing Liabilities - Activity in MSRs Carried at Lower of Amortize Cost or FV (Details) - Mortgage servicing rights - USD ($) $ in Thousands	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2016	Jan. 01, 2017	Jan. 01, 2016	Dec. 31, 2015
Amortized cost:
Amortized cost at beginning of year	$ 1,583,378	$ 1,206,694	$ 798,925
Transfer of mortgage servicing rights resulting from change in method of accounting	(1,583,378)
Balance after reclassification				$ 1,206,694	$ 798,925
Mortgage servicing rights resulting from mortgage loan sales		556,630	560,212
Amortization		(179,946)	(139,666)
Application of valuation allowance to write down mortgage servicing rights with other-than-temporary impairment			(12,777)
Amortized cost at end of year		1,583,378	1,206,694
Valuation allowance:
Balance at beginning of year	(101,800)	(94,947)	(47,237)
Reduction resulting from change in method of accounting	$ 101,800
Balance after reclassification				$ (94,947)	$ (47,237)
Increase in valuation allowance		(6,853)	(60,487)
Application of valuation allowance to recognize other-than-temporary impairment			12,777
Balance at end of year		(101,800)	(94,947)
Additional disclosures
Mortgage servicing rights, net		1,481,578	1,111,747
Fair value of mortgage servicing rights at beginning of year		1,482,426	1,112,302			$ 766,345
Fair value of mortgage servicing rights at end of year		1,482,426	$ 1,112,302			$ 766,345
Fair value of mortgage servicing rights pledged to secure: Assets sold under agreements to repurchase		$ 1,467,356

Mortgage Servicing Rights and_5

Mortgage Servicing Rights and Mortgage Servicing Liabilities - Mortgage Servicing Liabilities Carried at FV (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Amortized cost:
Mortgage servicing liabilities resulting from mortgage loan sales	$ 7,601	$ 17,229	$ 14,991
Mortgage servicing liabilities
Amortized cost:
Balance at beginning of year	14,120	15,192	1,399
Mortgage servicing liabilities resulting from mortgage loan sales	7,601	17,229	14,991
Mortgage servicing liability assumed			10,139
Changes in valuation inputs used in valuation model	10,787	6,526	5,264
Other changes in fair value	(23,827)	(24,827)	(16,601)
Total change in fair value	(13,040)	(18,301)	(11,337)
Balance at end of year	$ 8,681	$ 14,120	$ 15,192

Mortgage Servicing Rights and_6

Mortgage Servicing Rights and Mortgage Servicing Liabilities - Servicing, Late, Ancillary and Other Fees Relating to MSRs (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Contractual servicing fees									$ 585,101	$ 475,848	$ 385,633
Ancillary and other fees
Other									64,133	58,924	46,910
Bank Servicing Fees	$ 105,212	$ 109,703	$ 113,689	$ 116,789	$ 106,902	$ 78,081	$ 46,913	$ 74,163	445,393	306,059	185,466
Mortgage servicing rights
Contractual servicing fees									585,101	475,848	385,633
Ancillary and other fees
Late charges									27,940	25,097	19,341
Other									6,276	4,603	4,706
Bank Servicing Fees									$ 619,317	$ 505,548	$ 409,680

Furniture, Fixtures, Equipmen_3

Furniture, Fixtures, Equipment and Building Improvements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Furniture, fixtures, equipment and building improvements
Furniture, Fixtures, Equipment and Building Improvements, net	$ 33,374	$ 29,453
Furniture, fixtures, equipment and building improvements pledged to creditors	16,281	23,915
Depreciation and amortization expense	12,925	8,395	$ 5,849
PMT
Furniture, fixtures, equipment and building improvements
Amount of cost reimbursement payments received	1,200
Furniture, Fixtures, Equipment and Building Improvements
Furniture, fixtures, equipment and building improvements
Furniture, fixtures, equipment and building improvements	55,251	54,186
Less: accumulated depreciation and amortization	(21,877)	(24,733)
Furniture, Fixtures, Equipment and Building Improvements, net	33,374	29,453
Depreciation and amortization expense	9,500	8,150	6,842
Furniture, Fixtures, Equipment and Building Improvements | Occupancy And Equipment
Furniture, fixtures, equipment and building improvements
Depreciation and amortization expense	$ 9,500	6,754	5,492
Furniture, Fixtures, Equipment and Building Improvements | PMT | Management Agreement
Furniture, fixtures, equipment and building improvements
Depreciation and amortization expense		$ 1,396	$ 1,350

Capitalized Software (Detail)

Capitalized Software (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Long-lived asset disclosures
Cost	$ 45,039,000	$ 29,621,000
Less: Accumulated amortization	(5,291,000)	(3,892,000)
Capitalized Computer Software, Net, Total	39,748,000	25,729,000
Capitalized software pledged to creditors	1,017,000	1,568,000
Software amortization expense	3,400,000	1,600,000	$ 357,000
Capitalized Software
Long-lived asset disclosures
Impairment of capitalized software	$ 0	$ 827,000	$ 0

Carried Interest Due from Inv_3

Carried Interest Due from Investment Funds (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Activity in the carried interest
Carried Interest recognized during the quarter	$ (365)	$ (1,040)	$ 980
Investment Funds
Activity in the carried interest
Balance at beginning of year	8,552	70,906	69,926
Carried Interest recognized during the quarter	(365)	(1,040)	980
Cash received during the quarter	$ (8,187)	(61,314)
Balance at end of year		$ 8,552	$ 70,906

Borrowings - Assets Sold Under

Borrowings - Assets Sold Under Agreement to Repurchase (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Carrying value:
Unpaid principal balance	$ 1,935,200
Unamortized debt issuance costs and premiums	(1,341)	$ 672
Total loans sold under agreements to repurchase	1,933,859	2,381,538
Fair value of assets pledged to secure	1,923,857	2,530,299
Servicing advances	162,895	114,643
Assets sold under agreements to repurchase
During the period:
Average balance of mortgage loans sold under agreements to repurchase	$ 1,626,729	$ 1,829,257	$ 1,438,181
Weighted-average interest rate (as a percent)	3.87%	3.18%	2.91%
Total interest expense	$ 22,463	$ 60,286	$ 49,791
Maximum daily amount outstanding	2,380,121	3,022,656	2,661,746
Carrying value:
Unpaid principal balance	1,935,200	2,380,866
Unamortized debt issuance costs and premiums	(1,341)	672
Total loans sold under agreements to repurchase	$ 1,933,859	$ 2,381,538
Weighted average interest rate (as a percent)	4.22%	3.24%
Available borrowing capacity committed	$ 695,767	$ 316,503
Available borrowing capacity uncommitted	2,354,033	2,257,631
Available borrowing capacity	3,049,800	2,574,134
Margin deposits placed with counterparties	3,750	3,750
Amortization of debt issuance costs	40,500	1,300	$ 7,300
Amount of Master Repurchase Agreement incentives to refinance include in interest expense	$ 48,100	9,200
Initial term of Master Repurchase Agreement	6 months
Assets sold under agreements to repurchase | Mortgage Loans held for sale
Carrying value:
Fair value of assets pledged to secure	$ 1,923,857	2,530,299
Assets sold under agreements to repurchase | Servicing advances
Carrying value:
Servicing advances	162,895	114,643
Assets sold under agreements to repurchase | Financing receivable | PMT
Carrying value:
Fair value of assets pledged to secure	131,025	144,128
Assets sold under agreements to repurchase | Mortgage servicing rights
Carrying value:
Fair value of assets pledged to secure	$ 2,807,333	$ 2,098,067

Borrowings - Maturities of Outs

Borrowings - Maturities of Outstanding Advances Under Repurchase Agreements (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018USD ($)
Mortgage loans sold under agreement to repurchase
Unpaid principal balance	$ 1,935,200
Weighted-average maturity (in months)	2 months 27 days
Within 30 days
Mortgage loans sold under agreement to repurchase
Unpaid principal balance	$ 397,374
Over 30 to 90 days
Mortgage loans sold under agreement to repurchase
Unpaid principal balance	1,397,080
Over 90 to 180 days
Mortgage loans sold under agreement to repurchase
Unpaid principal balance	746
Over one to two years
Mortgage loans sold under agreement to repurchase
Unpaid principal balance	$ 140,000

Borrowings - Mortgage Loans Sol

Borrowings - Mortgage Loans Sold Under Agreement to Repurchase by Counterparty (Details) - Assets sold under agreements to repurchase $ in Thousands	Dec. 31, 2018USD ($)
Credit Suisse First Boston Mortgage Capital LLC Tranche Two
Mortgage loans sold under agreement to repurchase
Amount at risk	$ 1,416,794
Credit Suisse First Boston Mortgage Capital LLC Tranche One
Mortgage loans sold under agreement to repurchase
Amount at risk	33,906
Deutsche Bank AG
Mortgage loans sold under agreement to repurchase
Amount at risk	53,901
Bank of America, N.A.
Mortgage loans sold under agreement to repurchase
Amount at risk	15,863
Morgan Stanley Bank
Mortgage loans sold under agreement to repurchase
Amount at risk	5,825
JP Morgan
Mortgage loans sold under agreement to repurchase
Amount at risk	5,286
BNP Paribas
Mortgage loans sold under agreement to repurchase
Amount at risk	9,222
Royal Bank of Canada
Mortgage loans sold under agreement to repurchase
Amount at risk	2,129
Citibank, N.A.
Mortgage loans sold under agreement to repurchase
Amount at risk	$ 586

Borrowings - Mortgage Loan Part

Borrowings - Mortgage Loan Participation and Sale Agreement (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
During the period:
Total interest expense	$ 8,754,000	$ 5,496,000	$ 5,523,000
Carrying value:
Mortgage loan participation and sale agreement secured by mortgage loan participation certificates	532,251,000	527,395,000
Fair value of mortgage loans pledged to secure	555,001,000	551,688,000
Mortgage Loan Participation and Sale Agreement member
During the period:
Average balance	$ 248,539,000	$ 208,613,000	$ 268,416,000
Short-term Debt, Weighted Average Interest Rate, over Time	3.29%	2.34%	1.75%
Total interest expense	$ 8,754,000	$ 5,496,000	$ 5,523,000
Maximum daily amount outstanding	722,611,000	532,266,000	1,268,871,000
Carrying value:
Unpaid principal balance of mortgage loan participation and sale agreement secured by mortgage loan participation certificates	532,466,000	527,706,000
Unamortized issuance costs	(215,000)	(311,000)
Mortgage loan participation and sale agreement secured by mortgage loan participation certificates	$ 532,251,000	$ 527,395,000
Weighted average interest rate (as a percent)	3.77%	2.81%
Fair value of mortgage loans pledged to secure	$ 555,001,000	$ 551,688,000
Amortization of debt issuance costs	$ 588,000	$ 545,000	$ 740,000

Borrowings - Note Payable (Deta

Borrowings - Note Payable (Details) - USD ($)	Aug. 10, 2018	Feb. 28, 2018	Aug. 10, 2017	Feb. 16, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Feb. 01, 2018
During the period:
Total interest expense					$ 73,610,000	$ 39,369,000	$ 8,688,000
Carrying value:
Notes payable					1,292,291,000	891,505,000
Notes payable
Repayments of notes payable					900,000,000	186,935,000	33,661,000
Note Payable
During the period:
Average balance					$ 1,169,452,000	$ 586,135,000	$ 108,475,000
Weighted-average interest rate (as a percent)					5.29%	5.86%	5.13%
Total interest expense					$ 73,610,000	$ 39,369,000	$ 8,688,000
Maximum daily amount outstanding					1,300,000,000	900,006,000	153,849,000
Carrying value:
Unpaid principal balance					1,300,000,000	900,006,000
Unamortized issuance costs					(7,709,000)	(8,501,000)
Notes payable					$ 1,292,291,000	$ 891,505,000
Weighted-average interest rate (as a percent)					5.07%	5.66%
Unused amount					$ 150,000,000	$ 280,000,000
Amortization of Financing Costs					11,700,000	4,500,000	$ 3,000,000
Notes payable
Repayments of notes payable	$ 500,000,000	$ 400,000,000
Debt issuance costs					4,600,000
Note Payable | Revolving credit agreement
Short-term Debt [Line Items]
Maximum loan amount					150,000,000
Note Payable | LIBOR
Notes payable
Maximum loan amount	$ 650,000,000	$ 650,000,000	$ 500,000,000	$ 400,000,000
Description of variable rate	one-month LIBOR	one-month LIBOR	one-month LIBOR	one-month LIBOR
Interest rate spread	2.65%	2.85%	4.00%	4.75%
Note Payable | Credit Suisse AG
Short-term Debt [Line Items]
Maximum loan amount								$ 400,000,000
Carrying value:
Notes payable					0
Note Payable | Mortgage servicing rights
Carrying value:
Assets pledged to secure					2,807,333,000	2,098,067,000
Note Payable | Cash.
Carrying value:
Assets pledged to secure					108,174,000	20,765,000
Note Payable | Carried interest
Carrying value:
Assets pledged to secure						8,552,000
Note Payable | Servicing advances
Carrying value:
Assets pledged to secure					162,895,000	$ 114,643,000
Loan and Security Agreement
Notes payable
Debt issuance costs					$ 3,400,000

Borrowings - Obligations Under

Borrowings - Obligations Under Capital Lease (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Borrowings
Average balance	$ 13,498	$ 24,830	$ 18,620
Weighted average interest rate	3.96%	3.07%	2.47%
Total interest expense	$ 536	$ 769	$ 510
Maximum daily amount outstanding	20,971	30,044	$ 24,242
Unpaid principal balance	$ 6,605	$ 20,971
Weighted average interest rate	4.46%	3.26%
Furniture, fixtures, equipment and building improvements pledged to creditors	$ 16,281	$ 23,915
Capitalized software pledged to creditors	$ 1,017	$ 1,568

Borrowings - ESS (Details)

Borrowings - ESS (Details) - Excess servicing spread financing - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Roll forward of liabilities measured using Level 3 inputs on a recurring basis
Balance at the beginning of the year	$ 236,534	$ 288,669	$ 412,425
Issuances of excess servicing spread to PennyMac Mortgage Investment Trust:
Accrual of interest	15,138	16,951	22,601
Repayment	(46,750)	(54,980)	(69,992)
Change in fair value	8,500	(19,350)	(23,923)
Balance at the end of the year	216,110	236,534	288,669
PMT
Issuances of excess servicing spread to PennyMac Mortgage Investment Trust:
Issuances	2,688	5,244	6,603
Settlement			(59,045)
Change in fair value	$ 8,500	$ (19,350)	$ (23,923)

Liability for Losses Under Re_3

Liability for Losses Under Representations and Warranties (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
During the year:
Balance at beginning of year	$ 20,053	$ 19,067	$ 20,611
Provision for losses on mortgage loans sold resulting from sales of mortgage loans	5,824	5,890	7,090
Provision for losses on mortgage loans sold reduction in liability due to change in estimate	(4,672)	(4,301)	(7,672)
(Incurred losses) recoveries, net	(50)	(603)	(962)
Balance at end of year	21,155	20,053	$ 19,067
Unpaid principal balance of mortgage loans subject to representations and warranties at end of year	$ 137,849,704	$ 120,855,101

Income Taxes - Returns Currentl

Income Taxes - Returns Currently Under Examination (Details) item in Millions, $ in Millions	1 Months Ended	3 Months Ended	12 Months Ended
	Nov. 30, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2018item	Dec. 31, 2017USD ($)	Dec. 31, 2016
Deferred tax liability attributable to noncontrolling interest, net	$ 320.5
Returns currently under examination | item			0
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent			21.00%	35.00%	35.00%
Amount of income tax benefit from change in stat statutory tax rate	$ 8.5
Amount of income tax benefit from effect of Tax Cuts and Jobs Act of 2017		$ 13.7
Private National Mortgage Acceptance Company, LLC
Reduction in payable to exchanged Private National Mortgage Acceptance Company, LLC		$ 32		$ 32
CA
Adjusted state statutory rate (as a percent)	8.84%
Previous state statutory rate (as a percent)	10.84%

Income Taxes - Income Tax Expen

Income Taxes - Income Tax Expense Details (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current expense:
Federal									$ 12	$ (81)	$ (1,622)
State									274	56	(244)
Total current expense									286	(25)	(1,866)
Deferred expense:
Federal									23,395	14,674	38,082
State									(427)	9,738	9,887
Total provision for deferred income taxes									22,968	24,412	47,969
Income Tax Expense (Benefit), Total	$ 5,346	$ 5,545	$ 6,293	$ 6,070	$ (2,125)	$ 11,652	$ 7,214	$ 7,646	$ 23,254	$ 24,387	$ 46,103

Income Taxes - General (Details

Income Taxes - General (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of the entity's provision for income taxes at statutory rates to the provision for income taxes at the entity's effective tax rate
Federal income tax statutory rate (as a percent)	21.00%	35.00%	35.00%
Less: Rate attributable to non-controlling interest members (as a percent)	(12.30%)	(22.00%)	(24.80%)
State income taxes, net of federal benefit (as a percent)	2.30%	2.20%	1.60%
Tax rate revaluation	(2.20%)	(8.00%)	0.00%
Other (as a percent)	(0.10%)	0.10%	0.20%
Effective tax rate (as a percent)	8.70%	7.30%	12.00%

Income Taxes - Deferred Tax Ass

Income Taxes - Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Deferred expense:
Mortgage servicing rights	$ 46,064
Investment in PennyMac		$ 34,011	$ 40,493
Net operating loss	(14,902)	(9,675)	8,110
Compensation accruals	(3,596)
Reserves and losses	(1,848)
Additional tax basis in partnership from exchanges of partnership units into the Company's common stock	(1,391)
Other	(1,302)
Tax credits	(57)	76	(634)
Total provision for deferred income taxes	22,968	24,412	$ 47,969
Components of Deferred tax asset:
Taxes currently receivable		(2,126)
Taxes currently payable	218
Components of income taxes payable:
Deferred income tax liabilities, net	400,328	54,286
Income taxes payable	400,546	52,160
Deferred income tax assets:
Additional tax basis in partnership from exchanges of partnership units into the Company's common stock	44,165
Compensation accruals	28,752
Reserves and losses	26,589
Net operating loss carryforward	25,104	10,202
Tax credits carryforward	616	558
Gross deferred tax assets	125,226	10,760
Deferred income tax liabilities:
Mortgage servicing rights	517,042
Investment in PennyMac		65,046
Other	8,512
Gross deferred tax liabilities	525,554	65,046
Deferred income tax liabilities, net	400,328	54,286
Net operating loss carryforward	93,500
Net operating loss carryforward, expiring 2035	1,300
Net operating loss carryforward, expiring 2037	35,200
Net operating loss carryforward, no expiration date	57,000
Tax credits with no expiration date	600
Unrecognized tax benefits	0	0
Accrual of interest or penalties related to unrecognized tax benefits	$ 0	$ 0

Commitments and Contingencies -

Commitments and Contingencies - Commitments to Fund and Sell Mortgage Loans (Details) $ in Billions	Dec. 31, 2018USD ($)
Commitments and Contingencies.
Total commitments to purchase and fund mortgage loans	$ 2.8

Commitments and Contingencies_2

Commitments and Contingencies - Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Commitments and Contingencies.
Rent expense	$ 12,300	$ 12,300	$ 9,100
Future minimum lease payments
2,019	15,586
2,020	15,664
2,021	14,693
2,022	12,107
2,023	11,155
Thereafter	24,495
Total future minimum lease payments	$ 93,700

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($) shares in Thousands, $ in Thousands	Nov. 01, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Jun. 30, 2017
Stockholders' Equity
Cost of shares of common stock repurchased		$ 467	$ 8,599
Common Stock
Stockholders' Equity
Authorized stock repurchase amount					$ 50,000
Shares of common stock repurchased		260	505	765
Cost of shares of common stock repurchased		$ 5,293	$ 8,599	$ 13,892
New PFSI | Class A Unit
Stockholders' Equity
Common stock conversion ratio (as a percent)	100.00%
New PFSI | Common Stock
Stockholders' Equity
Common stock conversion ratio (as a percent)	1.00%

Noncontrolling Interest (Detail

Noncontrolling Interest (Details) - USD ($) shares in Thousands, $ in Thousands	Nov. 01, 2018	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net income and the effects of changes in noncontrolling interest
Net income attributable to PennyMac Financial Services, Inc. common stockholders		$ 38,749	$ 14,489	$ 17,837	$ 16,619	$ 62,318	$ 17,081	$ 10,479	$ 10,879	$ 87,694	$ 100,757	$ 66,079
Shares of Class A common stock of PennyMac Financial Services, Inc. issued pursuant to exchange of Class A units of Private National Mortgage Acceptance Company, LLC by noncontrolling interest unitholders and issued as equity compensation (in shares)										1,635	1,608	301
Common stock issued for exchange of noncontrolling interest pursuant to a reorganization										$ (326,653)
Exchange of Class A unit of Private National Mortgage Acceptance Company, LLC for common stock of PennyMac Financial Services, Inc. pursuant to a reorganization, net of income tax effect (in shares)										52,263
New PFSI | Class A Unit
Noncontrolling Interest [Line Items]
Common stock conversion ratio (as a percent)	100.00%
New PFSI | Common Stock
Noncontrolling Interest [Line Items]
Common stock conversion ratio (as a percent)	1.00%
Private National Mortgage Acceptance Company, LLC
Net income and the effects of changes in noncontrolling interest
Noncontrolling interest in Private National Mortgage Acceptance Company, LLC (as a percent)						69.20%					69.20%
Noncontrolling interest
Net income and the effects of changes in noncontrolling interest
Exchange of Class A units of Private National Mortgage Acceptance Company, LLC to Class A common stock of PennyMac Financial Services, Inc.										$ 33,156	$ 27,119	$ 6,877
Common stock issued for exchange of noncontrolling interest pursuant to a reorganization										(1,390,973)
Additional paid-in-capital and Par
Net income and the effects of changes in noncontrolling interest
Common stock issued for exchange of noncontrolling interest pursuant to a reorganization										$ 1,064,320

Net Gains on Mortgage Loans H_3

Net Gains on Mortgage Loans Held for Sale (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash (loss) gain:
Mortgage Loans									$ (469,647)	$ (174,669)	$ (62,283)
Hedging activities									93,288	(16,866)	10,275
Cash gain (loss), net of effects of cash hedging, on sale of mortgage loans held for sale									(376,359)	(191,535)	(52,008)
Non-cash gain:
Mortgage servicing rights and mortgage servicing liabilities resulting from mortgage loan sales									584,156	563,872	562,540
Provision for losses relating to representations and warranties on loans sold pursuant to mortgage loan sales									(5,824)	(5,890)	(7,090)
Provision for losses relating to representations and warranties on loans sold reduction in liability due to change in estimate									4,672	4,301	7,672
Change in fair value relating to mortgage loans and derivatives held at year end:
Interest rate lock commitments									(8,934)	(1,120)	15,618
Mortgage loans									(1,506)	4,576	2,796
Hedging derivatives									(11,766)	(4,389)	10,344
From non-affiliates									184,439	369,815	539,872
Net gains on mortgage loans held for sale at fair value	$ 59,748	$ 56,914	$ 60,946	$ 71,414	$ 98,621	$ 108,136	$ 98,091	$ 86,956	249,022	391,804	531,780
PMT
Change in fair value relating to mortgage loans and derivatives held at year end:
Recapture payable to PennyMac Mortgage Investment Trust									$ 64,583	$ 21,989	$ (8,092)

Net Interest Income (Expense)_2

Net Interest Income (Expense) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Interest income:
Short-term investments	$ 2,038	$ 2,356	$ 2,558
Mortgage loans held for sale at fair value	128,732	91,972	54,584
Placement fees relating to custodial funds	78,184	40,813	16,155
Interest income, excluding related parties	208,954	135,141	73,297
Interest income	216,416	143,179	81,127
Interest expense:
Mortgage loan participation purchase and sale agreements	8,754	5,496	5,523
Notes payable	73,610	39,369	8,688
Obligations under capital lease	536	769	510
Interest shortfall on repayments of mortgage loans serviced for Agency securitizations	18,777	16,933	15,102
Interest on mortgage loan impound deposits	5,319	4,716	3,991
Interest expense, non-affiliates	129,459	127,569	83,605
Interest expense	144,597	144,520	106,206
Net interest income (expense):	71,819	(1,341)	(25,079)
PMT
Interest income:
From PennyMac Mortgage Investment Trust	7,462	8,038	7,830
Interest expense:
To PennyMac Mortgage Investment Trust Excess servicing spread financing at fair value	15,138	16,951	22,601
Assets sold under agreements to repurchase
Interest expense:
Assets sold under agreements to repurchase	22,463	60,286	$ 49,791
Incentives recorded	$ 48,100	$ 9,200

Stock-based Compensation - Comp

Stock-based Compensation - Compensation Expense by Award (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Apr. 30, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Stock-Based Compensation
Units available for future awards under 2013 Equity Incentive Plan (in units)		3,900,000
Stock-based compensation expense		$ 25,251	$ 20,697	$ 16,505
Stock Options
Stock-Based Compensation
Granted (in units)		674,000	861,000	962,000
Stock-based compensation expense		$ 6,218	$ 4,909	$ 4,464
Performance-based RSUs
Stock-Based Compensation
Granted (in units)		524,000	694,000	813,000
Vested (in units)	649,000	730,000	446,000
Stock-based compensation expense		$ 12,425	$ 11,020	$ 9,475
Time-based RSUs
Stock-Based Compensation
Granted (in units)		328,000	408,000	261,000
Vested (in units)		254,000	173,000	127,000
Stock-based compensation expense		$ 6,608	$ 4,768	$ 2,494
Exchangeable PNMAC Units
Stock-Based Compensation
Stock-based compensation expense				$ 72

Stock-based Compensation - Perf

Stock-based Compensation - Performance-Based RSUs (Details) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Apr. 30, 2019shares	Dec. 31, 2018USD ($)$ / sharesshares	Dec. 31, 2017USD ($)$ / sharesshares	Dec. 31, 2016USD ($)$ / sharesshares
Summary of equity award grants, RSUs
Compensation expense recorded during the year | $		$ 25,251	$ 20,697	$ 16,505
Performance-based RSUs
Summary of equity award grants, RSUs
Balance at beginning of period (in units)		2,389,000	2,475,000	2,350,000
Granted (in units)		524,000	694,000	813,000
Vested (in units)	(649,000)	(730,000)	(446,000)
Forfeited or canceled (in units)		(291,000)	(334,000)	(688,000)
Balance at end of period (in units)		1,892,000	2,389,000	2,475,000
Compensation expense recorded during the year | $		$ 12,425	$ 11,020	$ 9,475
Weighted-average grant date fair value per unit:
Outstanding at beginning of year (in dollars per share) | $ / shares		$ 15.57	$ 14.24	$ 16.30
Granted (in dollars per share) | $ / shares		24.40	18.04	11.28
Vested (in dollars per share) | $ / shares		12.86	13.65
Forfeited (in dollars per share) | $ / shares		16.17	14.45	16.87
Outstanding at end of year (in dollars per share) | $ / shares		$ 14.48	$ 15.57	$ 14.24
Unamortized compensation cost | $		$ 5,805
Number of shares expected to vest (in units)		1,784,000
Weighted average remaining vesting period (in months)		11 months
Actually vested (in shares)		774,000
Vesting percentage		106
Minimum | Performance-based RSUs
Stock-Based Compensation
Shares earned as a percent of performance goal achievement		0.00%
Fair Value Assumptions
Expected grantee forfeiture rate (as a percent)		0.00%
Maximum | Performance-based RSUs
Stock-Based Compensation
Shares earned as a percent of performance goal achievement		130.00%
Fair Value Assumptions
Expected grantee forfeiture rate (as a percent)		23.20%

Stock-based Compensation - Stoc

Stock-based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Weighted-average exercise price per share:
Compensation expense recorded during the year	$ 25,251	$ 20,697	$ 16,505
Stock Options
Stock-Based Compensation
Percentage of the award vesting at each of the three anniversaries	33.00%
Contractual term of the stock options	10 years
Fair Value Assumptions
Expected volatility (as a percent)	30.00%	31.00%	28.00%
Expected dividends (as a percent)	0.00%	0.00%	0.00%
Risk-free rate, Minimum (as a percent)	1.70%	0.80%	0.30%
Risk-free rate, Maximum (as a percent)	3.00%	2.70%	2.10%
Summary of equity awards, options
Balance at beginning of period (in units)	3,457	2,738	1,845
Granted (in units)	674	861	962
Exercised (in units)	(322)	(90)	(9)
Forfeited or canceled (in units)	(116)	(52)	(60)
Balance at end of period (in units)	3,693	3,457	2,738
Weighted-average exercise price per share:
Outstanding at beginning of year (in dollars per share)	$ 16.40	$ 15.81	$ 18.17
Granted (in dollars per share)	24.40	18.05	11.29
Exercised (in dollars per share)	16.24	15.04	17.33
Forfeited	18.46	15.58	15.66
Outstanding at end of year (in dollars per share)	$ 17.81	$ 16.40	$ 15.81
Compensation expense recorded during the year	$ 6,218	$ 4,909	$ 4,464
Number of options exercisable at end of year	2,235
Weighted average exercise price per exercisable option	$ 16.69
Weighted-average remaining contractual term:
Outstanding at end of year	7 years
Exercisable at end of year	6 years
Aggregate intrinsic value
Outstanding at end of year	$ 14,764
Exercisable at end of year	$ 10,207
Number of shares expected to vest	1,368
Weighted-average vesting period (in months)	10 months
Minimum | Stock Options
Fair Value Assumptions
Expected grantee forfeiture rate (as a percent)	0.00%	0.00%	0.00%
Maximum | Stock Options
Fair Value Assumptions
Expected grantee forfeiture rate (as a percent)	(23.20%)	(21.10%)	(20.20%)

Stock-based Compensation - Time

Stock-based Compensation - Time-Based RSUs (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018USD ($)$ / sharesshares	Dec. 31, 2017USD ($)$ / sharesshares	Dec. 31, 2016USD ($)$ / sharesshares
Summary of equity award grants, RSUs
Compensation expense recorded during the year | $	$ 25,251	$ 20,697	$ 16,505
Time-based RSUs
Stock-Based Compensation
Percentage of the award vesting at each of the three anniversaries	33.00%
Summary of equity award grants, RSUs
Balance at beginning of period (in units)	600,000	382,000	271,000
Granted (in units)	328,000	408,000	261,000
Vested (in units)	(254,000)	(173,000)	(127,000)
Forfeited or canceled (in units)	(47,000)	(17,000)	(23,000)
Balance at end of period (in units)	627,000	600,000	382,000
Compensation expense recorded during the year | $	$ 6,608	$ 4,768	$ 2,494
Weighted-average grant date fair value per unit:
Outstanding at beginning of year (in dollars per share) | $ / shares	$ 16.37	$ 13.71	$ 17.81
Granted (in dollars per share) | $ / shares	24.25	18.02	11.77
Vested (in dollars per share) | $ / shares	16.08	14.66	17.99
Forfeited (in dollars per share) | $ / shares	19.40	14.87	15.55
Outstanding at end of year (in dollars per share) | $ / shares	$ 20.39	$ 16.37	$ 13.71
Unamortized compensation cost | $	$ 4,158
Number of shares expected to vest (in units)	579,000
Weighted average remaining vesting period (in months)	11 months
Time-based RSUs | Minimum
Stock-Based Compensation
Turnover rates (as a percent)	0
Time-based RSUs | Maximum
Stock-Based Compensation
Turnover rates (as a percent)	23.2
Time-based RSUs | Common Stock
Stock-Based Compensation
Number of share awarded for each RSU (in shares)	1

Earnings Per Share of Common _3

Earnings Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	Nov. 01, 2018	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Basic earnings per share of common stock:
Net income attributable to common stockholders		$ 38,749	$ 14,489	$ 17,837	$ 16,619	$ 62,318	$ 17,081	$ 10,479	$ 10,879	$ 87,694	$ 100,757	$ 66,079
Weighted-average common stock outstanding										33,524,000	23,199,000	22,161,000
Basic earnings per share of common stock (in dollars per share)		$ 0.65	$ 0.58	$ 0.71	$ 0.70	$ 2.67	$ 0.73	$ 0.45	$ 0.48	$ 2.62	$ 4.34	$ 2.98
Diluted earnings per share of common stock:
Net income attributable to common stockholders		$ 38,749	$ 14,489	$ 17,837	$ 16,619	$ 62,318	$ 17,081	$ 10,479	$ 10,879	$ 87,694	$ 100,757	$ 66,079
Net income attributable to dilutive stock-based compensation units										3,868
Effect of net income attributable to noncontrolling interest, net of tax												159,570
Net income attributable to common stockholders for diluted earnings per share										$ 91,562	$ 100,757	$ 225,649
Weighted-average common stock outstanding applicable to basic earnings per share										33,524,000	23,199,000	22,161,000
Effect of dilutive shares:
PennyMac Class A units exchangeable to common stock												53,951,000
Shares issuable under stock-based compensation plans (in shares)										1,798,000	1,800,000	517,000
Weighted-average shares of common stock outstanding applicable to diluted earnings per share										35,322,000	24,999,000	76,629,000
Diluted earnings per share of common stock (in dollars per share)		$ 0.63	$ 0.57	$ 0.70	$ 0.67	$ 2.44	$ 0.71	$ 0.44	$ 0.47	$ 2.59	$ 4.03	$ 2.94
Total anti-dilutive stock-based compensation units										45,527	55,119	3,883
Weighted-average exercise price of anti-dilutive stock options										$ 17.81	$ 16.40	$ 15.81
Performance-based RSUs
Effect of dilutive shares:
Total anti-dilutive stock-based compensation units										1,084	497	2,054
Stock Options
Effect of dilutive shares:
Total anti-dilutive stock-based compensation units										740	1,323	1,829
Exchangeable PNMAC Units
Effect of dilutive shares:
Total anti-dilutive stock-based compensation units										43,700	53,299
Time-based RSUs
Effect of dilutive shares:
Total anti-dilutive stock-based compensation units										3
Class A Unit | New PFSI
Common stock conversion ratio (as a percent)	100.00%

Supplemental Cash Flow Inform_3

Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash paid for interest	$ 161,001	$ 158,147	$ 104,938
Cash paid for income taxes, net	(2,059)	(5,513)	1,866
Non-cash investing activity:
Mortgage servicing rights resulting from mortgage loan sales	591,757	581,101	577,531
Mortgage servicing liabilities resulting from mortgage loan sales	7,601	17,229	14,991
Unsettled portion of MSR acquisitions	10,139	5,319
Non-cash financing activity:
Issuance of Class A common stock in settlement of director fees	330	338	313
PMT
Non-cash investing activity:
Transfer of Note receivable from PennyMac Mortgage Investment Trust to Financing receivable from PennyMac Mortgage Investment Trust			150,000
Non-cash financing activity:
Transfer of excess servicing spread pursuant to recapture agreement with PennyMac Mortgage Investment Trust	$ 2,688	$ 5,244	6,603
Unpaid distribution			$ 7,585

Regulatory Capital and Liquid_3

Regulatory Capital and Liquidity Requirements (Details) - USD ($)	Dec. 31, 2015	Dec. 31, 2018	Dec. 31, 2017
Fannie Mae / Freddie Mac - PLS
Regulatory Net Worth and Agency Capital Requirements
Net worth		$ 1,788,430,000	$ 1,561,977,000
Capital Requirement		514,089,000	429,671,000
Liquidity		271,802,000	196,415,000
Liquidity requirement		$ 70,775,000	$ 58,754,000
Tangible net worth / Total assets ratio actual		21.00%	21.00%
Tangible net worth / Total assets ratio requirement		6.00%	6.00%
Ginnie Mae - PLS
Regulatory Net Worth and Agency Capital Requirements
Net worth		$ 1,535,826,000	$ 1,307,580,000
Capital Requirement		733,342,000	674,133,000
Liquidity		271,802,000	196,415,000
Liquidity requirement		189,592,000	153,431,000
Ginnie Mae - PennyMac
Regulatory Net Worth and Agency Capital Requirements
Net worth		1,786,430,000	1,511,201,000
Capital Requirement		806,676,000	741,574,000
Ginnie Mae - PennyMac | 1-4 unit servicing portfolio
Regulatory Net Worth and Agency Capital Requirements
Net worth		$ 2,500,000
FHFA net worth requirement spread		0.35%
FHFA liquidity spread of UPB serviced		0.10%
Liquidity requirement		$ 1,000,000
HUD - PLS
Regulatory Net Worth and Agency Capital Requirements
Net worth		1,535,826,000	1,307,580,000
Capital Requirement		$ 2,500,000	$ 2,500,000
Federal Housing Finance Agency
Regulatory Net Worth and Agency Capital Requirements
Net worth	$ 2,500,000
FHFA liquidity spread of UPB serviced	0.035%
FHFA additional liquidity spread of UPB in excess of 6%	$ 2
Federal Housing Finance Agency | 1-4 unit servicing portfolio
Regulatory Net Worth and Agency Capital Requirements
FHFA net worth requirement spread	0.25%

Segments (Details)

Segments (Details)	3 Months Ended								12 Months Ended
	Dec. 31, 2018USD ($)	Sep. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Sep. 30, 2017USD ($)	Jun. 30, 2017USD ($)	Mar. 31, 2017USD ($)	Dec. 31, 2018USD ($)item	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Segments and Related Information
Number of segments | item									3
Revenues:
Net mortgage loan servicing fees	$ 105,212,000	$ 109,703,000	$ 113,689,000	$ 116,789,000	$ 106,902,000	$ 78,081,000	$ 46,913,000	$ 74,163,000	$ 445,393,000	$ 306,059,000	$ 185,466,000
Net gains on mortgage loans held for sale at fair value	59,748,000	56,914,000	60,946,000	71,414,000	98,621,000	108,136,000	98,091,000	86,956,000	249,022,000	391,804,000	531,780,000
Mortgage loan origination fees	26,165,000	26,485,000	24,428,000	24,563,000	30,267,000	33,168,000	30,193,000	25,574,000	101,641,000	119,202,000	125,534,000
Fulfillment fees from PennyMac Mortgage Investment Trust											86,465,000
Net interest income (expense):
Interest income									216,416,000	143,179,000	81,127,000
Interest expense, before non-segment activities										144,520,000	106,256,000
Net interest expense, before non-segment activities										(1,341,000)
Management fees									24,469,000	23,585,000	22,746,000
Carried Interest from Investment Funds									(365,000)	(1,040,000)	980,000
Other									10,174,000	3,895,000	3,445,000
Total net revenues, before non-segment activities									983,503,000	922,523,000	931,287,000
Expenses	192,895,000	189,232,000	169,600,000	165,205,000	176,861,000	156,491,000	143,761,000	142,441,000	716,932,000	619,554,000	548,804,000
Income (loss) before provision for income taxes and non-segment activities									266,571,000	302,969,000	382,483,000
Non-segment activities									1,126,000	32,940,000	600,000
Income before provision for income taxes	58,306,000	61,697,000	74,698,000	72,996,000	121,773,000	94,144,000	57,960,000	62,032,000	267,697,000	335,909,000	383,083,000
Assets:
Segment assets at year end	7,478,573,000	6,992,530,000	6,841,706,000	6,902,891,000	7,368,093,000	6,388,369,000	6,404,738,000	5,251,377,000	7,478,573,000	7,368,093,000
PMT
Revenues:
Net mortgage loan servicing fees											185,466,000
Fulfillment fees from PennyMac Mortgage Investment Trust	28,591,000	$ 26,256,000	$ 14,559,000	$ 11,944,000	19,175,000	$ 23,507,000	$ 21,107,000	$ 16,570,000	81,350,000	80,359,000	86,465,000
Net interest income (expense):
Management fees									24,465,000	22,584,000	20,657,000
Assets:
Receivable	33,464,000				27,119,000				33,464,000	27,119,000
Investment Funds
Net interest income (expense):
Net interest expense, before non-segment activities											(25,129,000)
Management fees									4,000	1,001,000	2,089,000
Carried Interest from Investment Funds									$ (365,000)	(1,040,000)	980,000
Assets:
Receivable					417,000					417,000
Mortgage banking
Segments and Related Information
Number of segments | item									2
Revenues:
Net mortgage loan servicing fees									$ 445,393,000
Net gains on mortgage loans held for sale at fair value									249,022,000
Mortgage loan origination fees									101,641,000
Net interest income (expense):
Interest income									216,400,000
Interest expense, before non-segment activities									144,548,000
Net interest expense, before non-segment activities									71,852,000
Other									4,658,000
Total net revenues, before non-segment activities									953,916,000
Expenses									694,348,000
Income (loss) before provision for income taxes and non-segment activities									259,568,000
Income before provision for income taxes									259,568,000
Mortgage banking | PMT
Revenues:
Fulfillment fees from PennyMac Mortgage Investment Trust									81,350,000
Operating segment
Net interest income (expense):
Interest expense, before non-segment activities									144,597,000
Net interest expense, before non-segment activities									71,819,000
Assets:
Segment assets at year end	7,478,498,000				7,365,488,000				7,478,498,000	7,365,488,000	5,128,398,000
Non-segment activities change in federal tax rate under the Tax Act										32,000,000
Working capital	75,000				2,600,000				75,000	2,600,000	5,500,000
Operating segment | Investment management
Net interest income (expense):
Interest income									16,000		1,000
Interest expense, before non-segment activities									49,000	49,000	50,000
Net interest expense, before non-segment activities									(33,000)	(49,000)
Management fees									24,469,000	23,585,000	22,746,000
Carried Interest from Investment Funds											980,000
Other									5,516,000	183,000	319,000
Total net revenues, before non-segment activities									29,587,000	22,679,000	23,996,000
Expenses									22,584,000	16,890,000	21,510,000
Income (loss) before provision for income taxes and non-segment activities									7,003,000	5,789,000	2,486,000
Income before provision for income taxes									7,003,000	5,789,000	2,486,000
Assets:
Segment assets at year end	11,681,000				19,880,000				11,681,000	19,880,000	91,517,000
Operating segment | Investment management | Investment Funds
Net interest income (expense):
Net interest expense, before non-segment activities											(49,000)
Carried Interest from Investment Funds									(365,000)	(1,040,000)
Operating segment | Mortgage banking
Revenues:
Net mortgage loan servicing fees										306,059,000
Net gains on mortgage loans held for sale at fair value										391,804,000	531,780,000
Mortgage loan origination fees										119,202,000	125,534,000
Fulfillment fees from PennyMac Mortgage Investment Trust											86,465,000
Net interest income (expense):
Interest income										143,179,000	81,126,000
Interest expense, before non-segment activities										144,471,000	106,206,000
Net interest expense, before non-segment activities										(1,292,000)
Other										3,712,000	3,126,000
Total net revenues, before non-segment activities										899,844,000	907,291,000
Expenses										602,664,000	527,294,000
Income (loss) before provision for income taxes and non-segment activities										297,180,000	379,997,000
Income before provision for income taxes										297,180,000	379,997,000
Assets:
Segment assets at year end	7,466,817,000				7,345,608,000				7,466,817,000	7,345,608,000	5,036,881,000
Operating segment | Mortgage banking | PMT
Revenues:
Net mortgage loan servicing fees											185,466,000
Fulfillment fees from PennyMac Mortgage Investment Trust										80,359,000
Operating segment | Mortgage banking | Investment Funds
Net interest income (expense):
Net interest expense, before non-segment activities											(25,080,000)
Operating segment | Mortgage banking Production
Revenues:
Net gains on mortgage loans held for sale at fair value									141,959,000	286,242,000	464,027,000
Mortgage loan origination fees									101,641,000	119,202,000	125,534,000
Fulfillment fees from PennyMac Mortgage Investment Trust											86,465,000
Net interest income (expense):
Interest income									66,408,000	61,195,000	48,944,000
Interest expense, before non-segment activities									7,371,000	35,359,000	32,669,000
Net interest expense, before non-segment activities									59,037,000	25,836,000
Other									2,008,000	2,002,000	2,104,000
Total net revenues, before non-segment activities									385,995,000	513,641,000	694,405,000
Expenses									298,729,000	275,133,000	278,309,000
Income (loss) before provision for income taxes and non-segment activities									87,266,000	238,508,000	416,096,000
Income before provision for income taxes									87,266,000	238,508,000	416,096,000
Assets:
Segment assets at year end	2,434,897,000				2,459,014,000				2,434,897,000	2,459,014,000	2,195,330,000
Operating segment | Mortgage banking Production | PMT
Revenues:
Fulfillment fees from PennyMac Mortgage Investment Trust									81,350,000	80,359,000
Operating segment | Mortgage banking Production | Investment Funds
Net interest income (expense):
Net interest expense, before non-segment activities											16,275,000
Operating segment | Mortgage banking Servicing
Revenues:
Net mortgage loan servicing fees									445,393,000	306,059,000
Net gains on mortgage loans held for sale at fair value									107,063,000	105,562,000	67,753,000
Net interest income (expense):
Interest income									149,992,000	81,984,000	32,182,000
Interest expense, before non-segment activities									137,177,000	109,112,000	73,537,000
Net interest expense, before non-segment activities									12,815,000	(27,128,000)
Other									2,650,000	1,710,000	1,022,000
Total net revenues, before non-segment activities									567,921,000	386,203,000	212,886,000
Expenses									395,619,000	327,531,000	248,985,000
Income (loss) before provision for income taxes and non-segment activities									172,302,000	58,672,000	(36,099,000)
Income before provision for income taxes									172,302,000	58,672,000	(36,099,000)
Assets:
Segment assets at year end	$ 5,031,920,000				$ 4,886,594,000				$ 5,031,920,000	$ 4,886,594,000	2,841,551,000
Operating segment | Mortgage banking Servicing | PMT
Revenues:
Net mortgage loan servicing fees											185,466,000
Operating segment | Mortgage banking Servicing | Investment Funds
Net interest income (expense):
Net interest expense, before non-segment activities											$ (41,355,000)

Selected Quarterly Data (Unau_3

Selected Quarterly Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenue
Net mortgage loan servicing fees	$ 105,212	$ 109,703	$ 113,689	$ 116,789	$ 106,902	$ 78,081	$ 46,913	$ 74,163	$ 445,393	$ 306,059	$ 185,466
Net gains on mortgage loans held for sale at fair value	59,748	56,914	60,946	71,414	98,621	108,136	98,091	86,956	249,022	391,804	531,780
Mortgage loan origination fees	26,165	26,485	24,428	24,563	30,267	33,168	30,193	25,574	101,641	119,202	125,534
Fulfillment fees from affiliate											86,465
Other income	31,485	31,571	30,676	13,491	43,669	7,743	5,417	1,210
Total net revenue	251,201	250,929	244,298	238,201	298,634	250,635	201,721	204,473	984,629	955,463	931,887
Expenses	192,895	189,232	169,600	165,205	176,861	156,491	143,761	142,441	716,932	619,554	548,804
Income before provision for income taxes	58,306	61,697	74,698	72,996	121,773	94,144	57,960	62,032	267,697	335,909	383,083
(Benefit from) provision for income taxes	5,346	5,545	6,293	6,070	(2,125)	11,652	7,214	7,646	23,254	24,387	46,103
Net income	52,960	56,152	68,405	66,926	123,898	82,492	50,746	54,386	244,443	311,522	336,980
Less: Net income attributable to noncontrolling interest	14,211	41,663	50,568	50,307	61,580	65,411	40,267	43,507	156,749	210,765	270,901
Net income attributable to PennyMac Financial Services, Inc. common stockholders	$ 38,749	$ 14,489	$ 17,837	$ 16,619	$ 62,318	$ 17,081	$ 10,479	$ 10,879	$ 87,694	$ 100,757	$ 66,079
Earnings per share of Common Stock:
Basic (in dollars per share)	$ 0.65	$ 0.58	$ 0.71	$ 0.70	$ 2.67	$ 0.73	$ 0.45	$ 0.48	$ 2.62	$ 4.34	$ 2.98
Diluted (in dollars per share)	$ 0.63	$ 0.57	$ 0.70	$ 0.67	$ 2.44	$ 0.71	$ 0.44	$ 0.47	$ 2.59	$ 4.03	$ 2.94
Assets:
Mortgage loans held for sale	$ 2,521,647	$ 2,416,955	$ 2,527,231	$ 2,584,236	$ 3,099,103	$ 2,935,593	$ 3,037,602	$ 2,277,751	$ 2,521,647	$ 3,099,103
Mortgage servicing rights	2,820,612	2,785,964	2,486,157	2,354,489	2,119,588	2,016,485	1,951,599	1,725,061	2,820,612	2,119,588
Servicing advances, net	313,197	259,609	258,900	284,145	318,066	262,650	291,907	317,513	313,197	318,066
Mortgage loans eligible for repurchase	1,102,840	889,335	879,621	1,018,488	1,208,195	584,394	462,487	318,378	1,102,840	1,208,195
Other assets	720,277	640,667	689,797	661,533	623,141	589,247	661,143	612,674	720,277	623,141
Total assets	7,478,573	6,992,530	6,841,706	6,902,891	7,368,093	6,388,369	6,404,738	5,251,377	7,478,573	7,368,093
Liabilities:
Short-term debt	2,332,143	2,222,385	2,264,041	2,336,826	2,922,542	2,640,743	3,311,029	2,331,357	2,332,143	2,922,542
Long-term debt	1,648,973	1,566,672	1,473,188	1,380,358	1,135,401	1,151,545	671,789	690,476	1,648,973	1,135,401
Liability for mortgage loans eligible for repurchase	1,102,840	889,335	879,621	1,018,488	1,208,195	584,394	462,487	318,378	1,102,840	1,208,195
Other liabilities	740,826	397,428	362,912	373,020	382,281	421,396	448,181	453,571	740,826	382,281
Total liabilities	5,824,782	5,075,820	4,979,762	5,108,692	5,648,419	4,798,078	4,893,486	3,793,782	5,824,782	5,648,419
Total equity	1,653,791	1,916,710	1,861,944	1,794,199	1,719,674	1,590,291	1,511,252	1,457,595	1,653,791	1,719,674	$ 1,399,356	$ 1,062,350
Total liabilities and stockholders' equity	7,478,573	6,992,530	6,841,706	6,902,891	7,368,093	6,388,369	6,404,738	5,251,377	7,478,573	7,368,093
PMT
Revenue
Net mortgage loan servicing fees											185,466
Fulfillment fees from affiliate	$ 28,591	$ 26,256	$ 14,559	$ 11,944	$ 19,175	$ 23,507	$ 21,107	$ 16,570	$ 81,350	$ 80,359	$ 86,465

Parent Company Information - Mi

Parent Company Information - Minimum Tangible Net Worth (Details) $ in Millions	Dec. 31, 2018USD ($)
PLS
Parent Company Information
Minimum tangible net worth	$ 500

Parent Company Information - Co

Parent Company Information - Condensed Balance Sheets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016
ASSETS
Cash	$ 155,289				$ 37,725				$ 99,367
Total assets	7,478,573	$ 6,992,530	$ 6,841,706	$ 6,902,891	7,368,093	$ 6,388,369	$ 6,404,738	$ 5,251,377
LIABILITIES AND STOCKHOLDERS' EQUITY
Income taxes payable	400,546				52,160
Total liabilities	5,824,782	5,075,820	4,979,762	5,108,692	5,648,419	4,798,078	4,893,486	3,793,782
Stockholders' equity	1,653,791				469,411
Total liabilities and stockholders' equity	7,478,573	6,992,530	6,841,706	6,902,891	7,368,093	6,388,369	6,404,738	5,251,377
Long-term debt	1,648,973	$ 1,566,672	$ 1,473,188	$ 1,380,358	1,135,401	$ 1,151,545	$ 671,789	$ 690,476
PENNYMAC FINANCIAL SERVICES, INC. | Parent Company
ASSETS
Cash					2,605
Investment in subsidiaries	1,975,231				556,439
Due from subsidiaries	582				6,538
Total assets	1,975,813				565,582
LIABILITIES AND STOCKHOLDERS' EQUITY
Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement					44,011
Income taxes payable	321,447				52,160
Payables to subsidiaries	575
Total liabilities	322,022				96,171
Stockholders' equity	1,653,791				469,411
Total liabilities and stockholders' equity	$ 1,975,813				$ 565,582

Parent Company Information - _2

Parent Company Information - Condensed Statements of Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue
Interest									$ 216,416	$ 143,179	$ 81,127
Total net revenue	$ 251,201	$ 250,929	$ 244,298	$ 238,201	$ 298,634	$ 250,635	$ 201,721	$ 204,473	984,629	955,463	931,887
Expenses
Interest									144,597	144,520	106,206
Total expenses	192,895	189,232	169,600	165,205	176,861	156,491	143,761	142,441	716,932	619,554	548,804
Income before provision for income taxes	58,306	61,697	74,698	72,996	121,773	94,144	57,960	62,032	267,697	335,909	383,083
Provision for income taxes	5,346	5,545	6,293	6,070	(2,125)	11,652	7,214	7,646	23,254	24,387	46,103
Net income	$ 52,960	$ 56,152	$ 68,405	$ 66,926	$ 123,898	$ 82,492	$ 50,746	$ 54,386	244,443	311,522	336,980
Private National Mortgage Acceptance Company, LLC
Revenue
Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement									1,126	32,940	551
PENNYMAC FINANCIAL SERVICES, INC. | Parent Company
Revenue
Dividends from subsidiaries									10,054		6,418
Interest											49
Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement										32,940	551
Total net revenue									10,054	32,940	7,018
Expenses
Interest									32
Total expenses									32
Income before provision for income taxes									10,022	32,940	7,018
Provision for income taxes									20,897	24,387	46,103
Income before equity in undistributed earnings of subsidiaries									(10,875)	8,553	(39,085)
Equity in undistributed earnings of subsidiaries									98,569	92,204	105,164
Net income									$ 87,694	100,757	66,079
PENNYMAC FINANCIAL SERVICES, INC. | Parent Company | Private National Mortgage Acceptance Company, LLC
Revenue
Revaluation of Payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement										$ 32,940	$ 551

Parent Company Information - _3

Parent Company Information - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flow from operating activities
Net income	$ 52,960	$ 56,152	$ 68,405	$ 66,926	$ 123,898	$ 82,492	$ 50,746	$ 54,386	$ 244,443	$ 311,522	$ 336,980
Decrease in deferred tax asset											18,668
Increase in income taxes payable									25,313	29,901	25,570
Net cash provided by (used in) operating activities									572,396	(883,412)	(938,325)
Cash flow from investing activities
Net cash used in investing activities									(322,611)	(339,231)	(34,739)
Cash flow from financing activities
Payment of dividend to Class A common stockholders											(7,631)
Repurchase of Class A common stock									(5,293)	(8,599)
Proceeds from Class A common stock options exercised									5,317	1,254	149
Net cash (used in) provided by financing activities									(132,034)	1,161,174	967,156
Net change in cash and restricted cash									117,751	(61,469)	(5,908)
Cash and restricted cash at beginning of year				38,173				99,642	38,173	99,642	105,550
Cash and restricted cash at end of year	$ 155,924				38,173				155,924	38,173	99,642
PENNYMAC FINANCIAL SERVICES, INC.
Cash flow from investing activities
Increase in investments in subsidiaries									(77)
Net cash used in investing activities									(77)
Cash flow from financing activities
Payment of dividend to Class A common stockholders									(10,054)
Repurchase of Class A common stock									(1,554)	(8,599)
PENNYMAC FINANCIAL SERVICES, INC. | Parent Company
Cash flow from operating activities
Net income									87,694	100,757	66,079
Equity in undistributed earnings of subsidiaries									(98,569)	(92,204)	(105,164)
Repricing of payable to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement										(32,940)	(551)
Decrease in deferred tax asset											18,668
Decrease (increase) in intercompany receivable									(3,737)	5,646	(76)
Payments to exchanged Private National Mortgage Acceptance Company, LLC unitholders under tax receivable agreement										(6,726)
Increase in income taxes payable									22,889	29,912	25,559
Net cash provided by (used in) operating activities									8,277	4,445	4,515
Cash flow from financing activities
Proceeds from Class A common stock options exercised									803	1,254	149
Net cash (used in) provided by financing activities									(10,805)	(7,345)	149
Net change in cash and restricted cash									(2,605)	(2,900)	4,664
Cash and restricted cash at beginning of year				$ 2,605				$ 5,505	$ 2,605	5,505	841
Cash and restricted cash at end of year					$ 2,605					$ 2,605	$ 5,505

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent Event - USD ($) $ in Billions	1 Months Ended
	Mar. 31, 2019	Feb. 28, 2019
Subsequent Event
Purchase of UPB of Ginnie Mae MSRs	$ 11.9
Letter of Intent
Subsequent Event
Purchase of UPB of Ginnie Mae MSRs		$ 4.5