Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 22, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-14667 | |
Entity Registrant Name | Mr. Cooper Group Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 91-1653725 | |
Entity Address, Address Line One | 8950 Cypress Waters Blvd | |
Entity Address, City or Town | Coppell | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75019 | |
City Area Code | 469 | |
Local Phone Number | 549-2000 | |
Title of 12(b) Security | Common stock, $0.01 par value per share | |
Trading Symbol | COOP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 86,135,281 | |
Entity Central Index Key | 0000933136 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 674 | $ 695 |
Restricted cash | 261 | 218 |
Mortgage servicing rights, $3,354 and $2,703 at fair value, respectively | 3,359 | 2,708 |
Advances and other receivables, net of reserves of $206 and $208, respectively | 838 | 940 |
Reverse mortgage interests, net of purchase discount of $93 and $127, respectively | 5,091 | 5,253 |
Mortgage loans held for sale at fair value | 6,351 | 5,720 |
Property and equipment, net of accumulated depreciation of $107 and $96, respectively | 118 | 116 |
Deferred tax assets, net | 1,228 | 1,340 |
Other assets | 6,793 | 7,175 |
Total assets | 24,713 | 24,165 |
Liabilities and Stockholders’ Equity | ||
Unsecured senior notes, net | 2,074 | 2,074 |
Advance and warehouse facilities, net | 7,379 | 6,763 |
Payables and other liabilities | 7,140 | 7,392 |
MSR related liabilities - nonrecourse at fair value | 957 | 967 |
Mortgage servicing liabilities | 38 | 41 |
Other nonrecourse debt, net | 4,221 | 4,424 |
Total liabilities | 21,809 | 21,661 |
Commitments and contingencies (Note 15) | ||
Preferred stock at $0.00001 - 10 million shares authorized, 1.0 million shares issued and outstanding, respectively; aggregate liquidation preference of ten dollars, respectively | 0 | 0 |
Common stock at $0.01 par value - 300 million shares authorized, 93.2 million and 92.0 million shares issued, respectively | 1 | 1 |
Additional paid-in-capital | 1,113 | 1,126 |
Retained earnings | 1,995 | 1,434 |
Treasury shares at cost - 7.1 million and 2.6 million shares, respectively | (206) | (58) |
Total Mr. Cooper stockholders’ equity | 2,903 | 2,503 |
Non-controlling interests | 1 | 1 |
Total stockholders’ equity | 2,904 | 2,504 |
Total liabilities and stockholders’ equity | $ 24,713 | $ 24,165 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Forward MSRs - fair value | $ 3,354,000,000 | $ 2,703,000,000 |
Advances and other receivables, reserves | 206,000,000 | 208,000,000 |
Purchase discount, net | 93,000,000 | 127,000,000 |
Accumulated depreciation | $ 107,000,000 | $ 96,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, liquidation preference | $ 10 | $ 10 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares, issued (in shares) | 93,200,000 | 92,000,000 |
Treasury stock (in shares) | 7,100,000 | 2,600,000 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Service related, net | $ 588 | $ (53) |
Net gain on mortgage loans held for sale | 679 | 331 |
Total revenues | 1,267 | 278 |
Expenses: | ||
Salaries, wages and benefits | 285 | 246 |
General and administrative | 184 | 198 |
Total expenses | 469 | 444 |
Interest income | 89 | 118 |
Interest expense | (159) | (192) |
Other income, net | 0 | 1 |
Total other expenses, net | (70) | (73) |
Income (loss) before income tax expense (benefit) | 728 | (239) |
Less: Income tax expense (benefit) | 167 | (68) |
Net income (loss) | 561 | (171) |
Less: Net loss attributable to non-controlling interests | 0 | (3) |
Net income (loss) attributable to Mr. Cooper | 561 | (168) |
Less: Undistributed earnings attributable to participating stockholders | 5 | 0 |
Net income (loss) attributable to common stockholders | $ 556 | $ (168) |
Net income (loss) per common share attributable to Mr. Cooper: | ||
Basic (in dollars per share) | $ 6.22 | $ (1.84) |
Diluted (in dollars per share) | $ 5.92 | $ (1.84) |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Cumulative effect, period of adoption, adjustment | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative effect, period of adoption, adjustment | Treasury Share Amount | Total Mr. Cooper Stockholders’ Equity | Total Mr. Cooper Stockholders’ EquityCumulative effect, period of adoption, adjustment | Non-controlling Interests |
Shares outstanding, beginning balance (in shares) at Dec. 31, 2019 | 1,000 | 91,118 | |||||||||
Stockholders' equity, beginning balance at Dec. 31, 2019 | $ 2,231 | $ 7 | $ 0 | $ 1 | $ 1,109 | $ 1,122 | $ 7 | $ 0 | $ 2,232 | $ 7 | $ (1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 852 | ||||||||||
Shares issued / (surrendered) under incentive compensation plan | (5) | (5) | (5) | ||||||||
Share-based compensation | 4 | 4 | 4 | ||||||||
Net income (loss) | (171) | (168) | (168) | (3) | |||||||
Shares outstanding, ending balance (in shares) at Mar. 31, 2020 | 1,000 | 91,970 | |||||||||
Stockholders' equity, ending balance at Mar. 31, 2020 | 2,066 | $ 0 | $ 1 | 1,108 | 961 | 0 | 2,070 | (4) | |||
Shares outstanding, beginning balance (in shares) at Dec. 31, 2020 | 1,000 | 89,457 | |||||||||
Stockholders' equity, beginning balance at Dec. 31, 2020 | 2,504 | $ 0 | $ 1 | 1,126 | 1,434 | (58) | 2,503 | 1 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 1,183 | ||||||||||
Shares issued / (surrendered) under incentive compensation plan | (19) | (19) | (19) | ||||||||
Share-based compensation | 6 | 6 | 6 | ||||||||
Repurchase of common stock (in shares) | (4,505) | ||||||||||
Repurchase of common stock | (148) | (148) | (148) | ||||||||
Net income (loss) | 561 | 561 | 561 | 0 | |||||||
Shares outstanding, ending balance (in shares) at Mar. 31, 2021 | 1,000 | 86,135 | |||||||||
Stockholders' equity, ending balance at Mar. 31, 2021 | $ 2,904 | $ 0 | $ 1 | $ 1,113 | $ 1,995 | $ (206) | $ 2,903 | $ 1 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Operating Activities | |||
Net income (loss) | $ 561 | $ (171) | |
Adjustments to reconcile net income (loss) to net cash attributable to operating activities: | |||
Deferred tax expense (benefit) | 112 | (68) | |
Net gain on mortgage loans held for sale | (679) | (331) | |
Interest income on participating interests in reverse mortgages | (40) | (62) | |
Provision for servicing and non-servicing reserves | 13 | 8 | |
Fair value changes and amortization/accretion of mortgage servicing rights/liabilities | (301) | 526 | |
Fair value changes in MSR related liabilities | 31 | (29) | |
Depreciation and amortization for property and equipment and intangible assets | 16 | 19 | |
Other operating activities | 13 | 34 | |
Repurchases of forward loan assets out of Ginnie Mae securitizations | (2,255) | (919) | |
Mortgage loans originated and purchased for sale, net of fees | (25,214) | (12,375) | |
Sales proceeds and loan payment proceeds for mortgage loans held for sale | 27,152 | 13,724 | |
Changes in assets and liabilities: | |||
Advances and other receivables | 91 | 300 | |
Reverse mortgage interests | 220 | 400 | |
Other assets | 70 | 111 | |
Payables and other liabilities | 134 | (457) | |
Net cash attributable to operating activities | (76) | 710 | |
Investing Activities | |||
Property and equipment additions, net of disposals | (14) | (12) | |
Purchase of forward mortgage servicing rights | (69) | (27) | |
Proceeds on sale of forward mortgage servicing rights | 1 | 43 | |
Net cash attributable to investing activities | (82) | 4 | |
Financing Activities | |||
Increase in advance and warehouse facilities | 613 | 43 | |
Repayment of HECM securitizations | (37) | (99) | |
Proceeds from issuance of participating interest financing in reverse mortgage interests | 34 | 55 | |
Repayment of participating interest financing in reverse mortgage interests | (219) | (330) | |
Proceeds from the issuance of excess spread financing | 0 | 24 | |
Settlements and repayments of excess spread financing | (41) | (58) | |
Issuance of unsecured senior notes | 0 | 600 | |
Redemption and repayment of unsecured senior notes | 0 | (698) | |
Repurchase of common stock | (148) | 0 | |
Other financing activities | (22) | (18) | |
Net cash attributable to financing activities | 180 | (481) | |
Net increase in cash, cash equivalents, and restricted cash | 22 | 233 | |
Cash, cash equivalents, and restricted cash - beginning of period | 913 | 612 | |
Cash, cash equivalents, and restricted cash - end of period | [1] | $ 935 | $ 845 |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets. March 31, 2021 March 31, 2020 Cash and cash equivalents $ 674 $ 579 Restricted cash 261 266 Total cash, cash equivalents, and restricted cash $ 935 $ 845 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | ||
Statement of Cash Flows [Abstract] | ||||||
Cash and cash equivalents | $ 674 | $ 695 | $ 579 | |||
Restricted cash | 261 | 218 | 266 | |||
Total cash, cash equivalents, and restricted cash | $ 935 | [1] | $ 913 | $ 845 | [1] | $ 612 |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets. March 31, 2021 March 31, 2020 Cash and cash equivalents $ 674 $ 579 Restricted cash 261 266 Total cash, cash equivalents, and restricted cash $ 935 $ 845 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Basis of Presentation | 1. Nature of Business and Basis of Presentation Nature of Business Mr. Cooper Group Inc., collectively with its consolidated subsidiaries, (“Mr. Cooper,” the “Company,” “we,” “us” or “our”) provides servicing, origination and transaction-based services related to single family residences throughout the United States with operations under its primary brands: Mr. Cooper® and Xome®. Mr. Cooper is one of the largest home loan originators and servicers in the country focused on delivering a variety of servicing and lending products, services and technologies. Xome provides technology and data enhanced solutions to homebuyers, home sellers, real estate agents and mortgage companies. The Company’s corporate website is located at www.mrcoopergroup.com . The Company has provided a glossary of terms, which defines certain industry-specific and other terms that are used herein, in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations , of this Form 10-Q. On March 12, 2021, the Company entered into a Stock Purchase Agreement with Blend Labs, Inc. (“Blend Labs”), a Delaware corporation, pursuant to which Blend Labs will acquire the title business of the Company for a purchase price of $500, consisting of $450 in cash, subject to certain adjustments specified therein, and a retained interest of 9.9% for the Company (the “Title Transaction”). Pursuant the Stock Purchase Agreement, all cash generated, subject to certain adjustments, between March 13, 2021 and the closing date of the Title Transaction will be held for the benefit of Blend Labs. No gain or loss on the Title Transaction has been or will be recorded until the closing date, which is anticipated to be in the second quarter of 2021. The carrying amounts of assets and liabilities associated with the title business are not material to the condensed consolidated balance sheets and are reported under the Xome segment. Basis of Presentation The consolidated interim financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Reports on Form 10-K for the year ended December 31, 2020. The interim condensed consolidated financial statements are unaudited; however, in the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation of the results of the interim periods have been included. Dollar amounts are reported in millions, except per share data and other key metrics, unless otherwise noted. Basis of Consolidation The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, other entities in which the Company has a controlling financial interest and those variable interest entities (“VIE”) where the Company’s wholly-owned subsidiaries are the primary beneficiaries. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that the Company became the primary beneficiary through the date the Company ceases to be the primary beneficiary. The Company applies the equity method of accounting to investments where it is able to exercise significant influence, but not control, over the policies and procedures of the entity and owns less than 50% of the voting interests. Investments in certain companies over which the Company does not exert significant influence are accounted for as cost method investments. Intercompany balances and transactions on consolidated entities have been eliminated. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates due to factors such as adverse changes in the economy, changes in interest rates, secondary market pricing for loans held for sale and derivatives, strength of underwriting and servicing practices, changes in prepayment assumptions, declines in home prices or discrete events adversely affecting specific borrowers, uncertainties in the economy from the COVID-19 pandemic, and such differences could be material. Accounting Standards Update 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes |
Mortgage Servicing Rights and R
Mortgage Servicing Rights and Related Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing Rights and Related Liabilities | 2. Mortgage Servicing Rights and Related Liabilities The following table sets forth the carrying value of the Company’s mortgage servicing rights (“MSRs”) and the related liabilities. In estimating the fair value of all mortgage servicing rights and related liabilities, the impact of the COVID-19 pandemic was considered in the determination of key assumptions. MSRs and Related Liabilities March 31, 2021 December 31, 2020 Forward MSRs - fair value $ 3,354 $ 2,703 Reverse MSRs - amortized cost 5 5 Mortgage servicing rights $ 3,359 $ 2,708 Mortgage servicing liabilities - amortized cost $ 38 $ 41 Excess spread financing - fair value $ 934 $ 934 Mortgage servicing rights financing - fair value 23 33 MSR related liabilities - nonrecourse at fair value $ 957 $ 967 Forward Mortgage Servicing Rights The following table sets forth the activities of forward MSRs: Three Months Ended March 31, Forward MSRs - Fair Value 2021 2020 Fair value - beginning of period $ 2,703 $ 3,496 Additions: Servicing retained from mortgage loans sold 288 123 Purchases of servicing rights 67 24 Dispositions: Sales of servicing assets (2) — Changes in fair value: Changes in valuation inputs or assumptions used in the valuation model 510 (401) Other changes in fair value (212) (133) Fair value - end of period $ 3,354 $ 3,109 During the three months ended March 31, 2021 and 2020, the Company sold $50 and $40 in unpaid principal balance (“UPB”) of forward MSRs, of which none were retained by the Company as subservicer, respectively. MSRs measured at fair value are segregated between investor type into agency and non-agency pools (referred to herein as “investor pools”) based upon contractual servicing agreements with investors at the respective balance sheet date to evaluate the MSR portfolio and fair value of the portfolio. Agency investors primarily consist of government sponsored enterprises (“GSE”), such as the Federal National Mortgage Association (“Fannie Mae” or “FNMA”) and the Federal Home Loan Mortgage Corp (“Freddie Mac” or “FHLMC”), and the Government National Mortgage Association (“Ginnie Mae” or “GNMA”). Non-agency investors consist of investors in private-label securitizations. The following table provides a breakdown of UPB and fair value for the Company’s forward MSRs: March 31, 2021 December 31, 2020 Forward MSRs - UPB and Fair Value Breakdown UPB Fair Value UPB Fair Value Investor Pools Agency $ 234,589 $ 2,965 $ 227,136 $ 2,305 Non-agency 41,439 389 44,053 398 Total $ 276,028 $ 3,354 $ 271,189 $ 2,703 Refer to Note 13, Fair Value Measurements , for further discussion on key weighted-average inputs and assumptions used in estimating the fair value of forward MSRs. The following table shows the hypothetical effect on the fair value of the Company’s forward MSRs when applying certain unfavorable variations of key assumptions to these assets for the dates indicated: Discount Rate Total Prepayment Speeds Cost to Service per Loan Forward MSRs - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change 10% Adverse Change 20% Adverse Change March 31, 2021 Mortgage servicing rights $ (142) $ (273) $ (187) $ (360) $ (49) $ (99) December 31, 2020 Mortgage servicing rights $ (100) $ (192) $ (181) $ (347) $ (45) $ (89) These hypothetical sensitivities should be evaluated with care. The effect on fair value of an adverse change in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Reverse Mortgage Servicing Rights and Liabilities - Amortized Cost The Company services certain Home Equity Conversion Mortgage (“HECM”) reverse mortgage loans with an unpaid principal balance of $17,269 and $18,091 as of March 31, 2021 and December 31, 2020, respectively. The following table sets forth the activities of reverse MSRs and mortgage servicing liabilities (“MSL”): Three Months Ended March 31, 2021 2020 Reverse MSRs and MSLs - Amortized Cost Reverse MSRs Reverse MSLs Reverse MSRs Reverse MSLs Balance - beginning of period $ 5 $ 41 $ 6 $ 61 Amortization/accretion — (3) — (8) Balance - end of the period $ 5 $ 38 $ 6 $ 53 Fair value - end of period $ 5 $ 38 $ 6 $ 27 Management evaluates reverse MSRs and MSLs each reporting period for impairment. Based on management’s assessment at March 31, 2021, no impairment or increased obligation was recorded. Excess Spread Financing - Fair Value The Company had excess spread financing liability of $934 as of March 31, 2021 and December 31, 2020. Refer to Note 13, Fair Value Measurements , for further discussion on key weighted-average inputs and assumptions used in the valuation of excess spread financing. The following table shows the hypothetical effect on the Company’s excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities for the dates indicated: Discount Rate Prepayment Speeds Excess Spread Financing - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change March 31, 2021 Excess spread financing $ 33 $ 68 $ 36 $ 75 December 31, 2020 Excess spread financing $ 30 $ 62 $ 41 $ 84 These hypothetical sensitivities should be evaluated with care. The effect on fair value of an adverse change in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Also, a positive change in the above assumptions would not necessarily correlate with the corresponding decrease in the net carrying amount of the excess spread financing. Excess spread financing’s cash flow assumptions that are utilized in determining fair value are based on the related cash flow assumptions used in the financed MSRs. Any fair value change recognized in the financed MSRs attributable to related cash flows assumptions would inherently have an inverse impact on the carrying amount of the related excess spread financing. Mortgage Servicing Rights Financing - Fair Value The Company had MSR financing liability of $23 and $33 as of March 31, 2021 and December 31, 2020, respectively. Refer to Note 13, Fair Value Measurements , for further discussion on key weighted-average inputs and assumptions used in the valuation of the MSR financing liability. Servicing Segment Revenues The following table sets forth the items comprising total revenues for the Servicing segment: Three Months Ended March 31, Total Revenues - Servicing 2021 2020 Contractually specified servicing fees (1) $ 276 $ 297 Other service-related income (1) 145 49 Incentive and modification income (1) 14 10 Late fees (1) 18 27 Reverse servicing fees 5 6 Mark-to-market adjustments (2) 354 (383) Counterparty revenue share (3) (83) (76) Amortization, net of accretion (4) (153) (76) Total revenues - Servicing $ 576 $ (146) (1) The Company recognizes revenue on an earned basis for services performed. Amounts include subservicing related revenues. (2) Mark-to-market (“MTM”) adjustments include fair value adjustments on MSR, excess spread financing and MSR financing liabilities. The amount of MSR MTM includes the impact of negative modeled cash flows which have been transferred to reserves on advances and other receivables. The negative modeled cash flows relate to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio. The impact of negative modeled cash flows was $12 and $10 during the three months ended March 31, 2021 and 2020, respectively. (3) Counterparty revenue share represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements and the payments made associated with MSR financing arrangements. (4) Amortization is net of excess spread accretion of $76 and $68 and MSL accretion of $3 and $8 during the three months ended March 31, 2021 and 2020, respectively. |
Advances and Other Receivables
Advances and Other Receivables | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Advances and Other Receivables | 3. Advances and Other Receivables Advances and other receivables, net, consists of the following: Advances and Other Receivables, Net March 31, 2021 December 31, 2020 Servicing advances, net of $63 and $72 purchase discount, respectively $ 882 $ 975 Receivables from agencies, investors and prior servicers, net of $20 and $21 purchase discount, respectively 162 173 Reserves (206) (208) Total advances and other receivables, net $ 838 $ 940 The following table sets forth the activities of the servicing reserves for advances and other receivables: Three Months Ended March 31, Reserves for Advances and Other Receivables 2021 2020 Balance - beginning of period $ 208 $ 168 Provision and other additions (1) 15 30 Write-offs (17) (5) Balance - end of period $ 206 $ 193 (1) The Company recorded a provision of $12 and $10 through the MTM adjustments in revenues - service related, net, in the unaudited condensed consolidated statements of operations during the three months ended March 31, 2021 and 2020, respectively, for inactive and liquidated l oans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate. Purchase Discount for Advances and Other Receivables The following tables set forth the activities of the purchase discounts for advances and other receivables: Three Months Ended March 31, 2021 2020 Purchase Discount for Advances and Other Receivables Servicing Advances Receivables from Agencies, Investors and Prior Servicers Servicing Advances Receivables from Agencies, Investors and Prior Servicers Balance - beginning of period $ 72 $ 21 $ 131 $ 21 Utilization of purchase discounts (9) (1) (6) — Balance - end of period $ 63 $ 20 $ 125 $ 21 Credit Loss for Advances and Other Receivables During the three months ended March 31, 2021 and 2020, the Company increased the current expected credit loss (“CECL”) reserve by $1 and $6, respectively. As of March 31, 2021, the total CECL reserve was $39, of which $22 and $17 were recorded in reserves and purchase discount for advances and other receivables, respectively. As of March 31, 2020, the total CECL reserve was $23, of which $6 and $17 were recorded in reserves and purchase discount for advances and other receivables, respectively. The Company determined that the credit-related risk associated with applicable financial instruments typically increase with the passage of time. The CECL reserve methodology considers these financial instruments collectible to a point in time o f 39 months. An y projected remaining balance at the end of the collection period is considered a loss and factors into the overall CECL loss rate required. |
Reverse Mortgage Interests
Reverse Mortgage Interests | 3 Months Ended |
Mar. 31, 2021 | |
Reverse Mortgage Interests [Abstract] | |
Reverse Mortgage Interests | 4. Reverse Mortgage Interests Reverse mortgage interests, net, consists of the following: Reverse Mortgage Interests, Net March 31, 2021 December 31, 2020 Participating interests in HECM mortgage-backed securities (“HMBS”) $ 3,304 $ 3,471 Unsecuritized interests 972 964 Other interests securitized 908 945 Purchase discount, net (93) (127) Total reverse mortgage interests, net $ 5,091 $ 5,253 Participating Interests in HMBS The Company does not originate reverse mortgages, but during the three months ended March 31, 2021 and 2020, a total of $33 and $52 in UPB associated with new draws on existing loans was transferred to GNMA and securitized by the Company, respectively. Other Interests Securitized The reverse mortgage interests under other interest securitized have been transferred to private securitization trusts and are accounted for as a secured borrowing. No such securitization occurred during the three months ended March 31, 2021 and 2020. Unsecuritized Interests Unsecuritized interests in reverse mortgages consist of the following: Unsecuritized Interests March 31, 2021 December 31, 2020 Repurchased HECM loans (exceeds 98% of their Max Claim Amount (“MCA”)) $ 699 $ 665 HECM related receivables (1) 180 208 Funded borrower draws not yet securitized 77 72 Real estate owned (“REO”) related receivables 16 19 Total unsecuritized interests $ 972 $ 964 (1) HECM related receivables consist primarily of receivables from FNMA for corporate advances and service fees and claims receivables from the U.S. Department of Housing and Urban Development (“HUD”) on reverse mortgage interests. The Company repurchased a total of $216 and $383 of HECM loans out of GNMA HMBS securitizations during the three months ended March 31, 2021 and 2020, respectively, of which $66 and $103 were subsequently assigned to a third party in accordance with applicable servicing agreements, respectively. To the extent a loan is not subject to applicable servicing agreements and assigned to a third party, the loan is either subject to assignment to HUD, per contractual obligations with GNMA, liquidated via a payoff from the borrower or liquidated via a foreclosure according to the terms of the underlying mortgage. The Company assigned a total of $137 and $266 of HECM loans to HUD during the three months ended March 31, 2021 and 2020, respectively. Purchase Discount, net, for Reverse Mortgage Interests The following table sets forth the activities of the purchase discounts, net, for reverse mortgage interests: Three Months Ended March 31, Purchase Discount, Net, for Reverse Mortgage Interests (1) 2021 2020 Balance - beginning of period $ (127) $ (114) Utilization of purchase discounts (2) 35 10 Amortization, net of accretion (1) (25) Balance - end of period $ (93) $ (129) (1) Net position as certain items are in a premium/(discount) position, based on the characteristics of underlying tranches of loans. (2) Utilization of purchase discounts on liquidated loans, for which the remaining receivable was written off. Credit Loss for Reverse Mortgage Interests The Company determined that credit-related losses are immaterial given the government insured nature of the HECM loan product. Any expected credit-related losses are contemplated in the Company’s existing reserve methodology due to the nature of this financial instrument. Accordingly, no cumulative effect adjustment was required upon adoption of CECL related accounting guidance on January 1, 2020 and no additional CECL reserve was recorded as of March 31, 2021 and 2020. The credit-risk characteristics of reverse mortgage interests do not vary with time as the financial instruments have no contractual life or financial profile as the primary counterparty is the government agency insuring the loans. Reverse Mortgage Interest Income Total interest earned on the Company’s participating interest in reverse mortgages wa s $40 a nd $62 during the three months ended March 31, 2021 and 2020, respectively. |
Mortgage Loans Held for Sale
Mortgage Loans Held for Sale | 3 Months Ended |
Mar. 31, 2021 | |
Mortgage Loans Held for Sale and Investment [Abstract] | |
Mortgage Loans Held for Sale | 5. Mortgage Loans Held for Sale Mortgage loans held for sale are recorded at fair value as set forth below: Mortgage Loans Held for Sale March 31, 2021 December 31, 2020 Mortgage loans held for sale – UPB $ 6,204 $ 5,438 Mark-to-market adjustment (1) 147 282 Total mortgage loans held for sale $ 6,351 $ 5,720 (1) The mark-to-market adjustment includes net change in unrealized gain/loss, premium on correspondent loans and fees on direct-to-consumer loans. The mark-to-market adjustment is recorded in net gain on mortgage loans held for sale in the unaudited condensed consolidated statements of operations . The following table sets forth the activities of mortgage loans held for sale: Three Months Ended March 31, Mortgage Loans Held for Sale 2021 2020 Balance - beginning of period $ 5,720 $ 4,077 Loans sold (26,734) (13,510) Mortgage loans originated and purchased, net of fees 25,214 12,375 Repurchase of loans out of Ginnie Mae securitizations 2,255 919 Net change in unrealized (loss) gain on loans held for sale (105) 61 Net transfers of mortgage loans held for sale (1) 1 — Balance - end of period $ 6,351 $ 3,922 (1) Amount reflects transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net, for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing. During the three months ended March 31, 2021 and 2020, the Company received proceeds of $27,152 and $13,724, respectively, on the sale of mortgage loans held for sale, resulting in gains of $418 and $214, respectively. The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows: March 31, 2021 December 31, 2020 Mortgage Loans Held for Sale UPB Fair Value UPB Fair Value Non-accrual (1) $ 67 $ 54 $ 64 $ 54 (1) Non-accrual UPB includes $48 of UPB related to Ginnie Mae repurchased loans as of March 31, 2021 and December 31, 2020. The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $18 and $20 as of March 31, 2021 and December 31, 2020, respectively. |
Loans Subject to Repurchase fro
Loans Subject to Repurchase from Ginnie Mae | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Loans Subject to Repurchase from Ginnie Mae | 6. Loans Subject to Repurchase from Ginnie Mae Forward loans are sold to Ginnie Mae in conjunction with the issuance of mortgage backed securities. The Company, as the issuer of the mortgage backed securities, has the unilateral right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including payments not being received from borrowers for greater than 90 days. Once the Company has the unilateral right to repurchase a delinquent loan, it has effectively regained control over the loan and recognizes these rights to the loan on its condensed consolidated balance sheets and establishes a corresponding repur chase liability regardless of the Company’s intention to repurchase the loan. The Company had loans subject to repurchase from Ginnie Mae of $5,816 and $6,159 as of March 31, 2021 and December 31, 2020, respectively, which are included in both other assets and payables and other liabilities in the condensed consolidated balance sheets . Loans subject to repurchase from Ginnie Mae as of March 31, 2021 and December 31, 2020 include $5,557 and $5,879 loans in forbearance related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), respectively, whereby no payments have been received from borrowers for greater than 90 days. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 8. Derivative Financial Instruments Derivative instruments are used as part of the overall strategy to manage exposure to market risks primarily associated with fluctuations in interest rates related to originations. Derivative instruments utilized by the Company primarily include interest rate lock commitments (“IRLCs”), loan purchase commitments (“LPCs”), forward Mortgage Backed Securities (“MBS”) purchase commitments, Eurodollar and Treasury futures and interest rate swap agreements. The following tables provide the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses) for the derivative financial instruments: March 31, 2021 Three Months Ended March 31, 2021 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2021 $ 2,341 $ 42 $ (60) Derivative financial instruments IRLCs 2021 8,950 232 (182) LPCs 2021 1,165 8 (30) Forward MBS trades 2021 22,566 286 249 Total derivative financial instruments - assets $ 32,681 $ 526 $ 37 Liabilities Derivative financial instruments IRLCs 2021 $ 240 $ 1 $ 1 LPCs 2021 3,974 38 37 Forward MBS trades 2021 6,341 76 (80) Swap futures 2021 60 1 1 Total derivative financial instruments - liabilities $ 10,615 $ 116 $ (41) March 31, 2020 Three Months Ended March 31, 2020 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2020 $ 2,598 $ 111 $ 79 Derivative financial instruments IRLCs 2020 6,923 263 128 LPCs 2020 834 25 13 Forward MBS trades 2020 886 6 — Eurodollar futures 2020-2021 6 — — Total derivative financial instruments - assets $ 8,649 $ 294 $ 141 Liabilities Derivative financial instruments IRLCs 2020 $ 22 $ — $ — LPCs 2020 10 — (3) Forward MBS trades 2020 10,229 223 211 Eurodollar futures 2020-2021 6 — — Total derivative financial instruments - liabilities $ 10,267 $ 223 $ 208 As of March 31, 2021, the Company held $2 a |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Indebtedness | 9. Indebtedness Advance and Warehouse Facilities March 31, 2021 December 31, 2020 Interest Rate Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral Pledged Advance Facilities $875 advance facility CP+2.0% to 6.5% January 2022 Servicing advance receivables $ 875 $ 140 $ 165 $ 168 $ 195 $640 advance facility (1) LIBOR+3.9% August 2022 Servicing advance receivables 640 231 299 235 305 $425 advance facility LIBOR+1.6% to 6.5% October 2021 Servicing advance receivables 425 197 250 192 246 $100 advance facility LIBOR+2.5% January 2022 Servicing advance receivables 100 70 92 74 98 Advance facilities principal amount 638 806 669 844 Warehouse Facilities $2,500 warehouse facility (2) LIBOR+1.6% to 1.9% October 2021 Mortgage loans or MBS 2,500 1,442 1,495 1,003 1,037 $2,000 warehouse facility LIBOR+1.6% to 2.0% February 2023 Mortgage loans or MBS 2,000 940 1,055 339 392 $1,500 warehouse facility LIBOR+1.5% June 2021 Mortgage loans or MBS 1,500 867 838 1,081 1,028 $1,350 warehouse facility (3) LIBOR+1.7% to 3.9% September 2022 Mortgage loans or MBS 1,350 918 990 1,067 1,128 March 31, 2021 December 31, 2020 Interest Rate Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral Pledged $1,200 warehouse facility LIBOR+1.8% to 3.0% November 2021 Mortgage loans or MBS 1,200 497 543 787 839 $750 warehouse facility LIBOR+1.8% to 2.3% August 2021 Mortgage loans or MBS 750 612 631 477 492 $750 warehouse facility LIBOR+1.7% to 2.8% October 2021 Mortgage loans or MBS 750 535 549 562 574 $600 warehouse facility LIBOR+2.5% February 2022 Mortgage loans or MBS 600 332 374 187 222 $500 warehouse facility LIBOR+2.5% to 4.0% May 2021 Mortgage loans or MBS 500 — — — — $300 warehouse facility LIBOR+1.4% January 2022 Mortgage loans or MBS 300 129 130 163 164 $250 warehouse facility LIBOR+1.4% to 2.3% May 2021 Mortgage loans or MBS 250 1 1 — — $200 warehouse facility LIBOR+1.8% July 2021 Mortgage loans or MBS 200 169 173 131 134 $50 warehouse facility LIBOR+1.8% to 4.8% June 2021 Mortgage loans or MBS 50 36 43 37 42 $30 warehouse facility (4) LIBOR+3.3% January 2022 Mortgage loans or MBS 30 2 2 1 1 Warehouse facilities principal amount 6,480 6,824 5,835 6,053 MSR Facilities $260 warehouse facility (1) LIBOR+3.9% August 2022 MSR 260 260 838 260 668 $200 warehouse facility LIBOR+3.5% August 2021 MSR 200 — 471 — 247 $150 warehouse facility (3) LIBOR+3.8% September 2022 MSR 150 — 438 — 228 $50 warehouse facility LIBOR+3.3% November 2022 MSR 50 10 80 10 74 MSR facilities principal amount 270 1,827 270 1,217 Advance, warehouse and MSR facilities principal amount 7,388 $ 9,457 6,774 $ 8,114 Unamortized debt issuance costs (9) (11) Advance and warehouse facilities, net $ 7,379 $ 6,763 Pledged Collateral for warehouse and MSR facilities: Mortgage loans held for sale $ 5,970 $ 6,210 $ 5,330 $ 5,447 Reverse mortgage interests 510 614 505 606 MSR 270 1,827 270 1,217 (1) Total capacity for this facility is $900, of which $640 is internally allocated for advance financing and $260 is internally allocated for MSR financing; capacity is fully fungible and is not restricted by these allocations. (2) The capacity amount for this warehouse facility increased from $1,500 to $2,500 in 2021. (3) Total capacity amount for this facility is $1,500, of which $150 is a sublimit for MSR financing. (4) The capacity amount for this warehouse facility decreased from $40 to $30 in 2021. Unsecured Senior Notes Unsecured senior notes consist of the following: Unsecured Senior Notes March 31, 2021 December 31, 2020 $850 face value, 5.500% interest rate payable semi-annually, due August 2028 $ 850 $ 850 $650 face value, 5.125% interest rate payable semi-annually, due December 2030 650 650 $600 face value, 6.000% interest rate payable semi-annually, due January 2027 600 600 Unsecured senior notes principal amount 2,100 2,100 Unamortized debt issuance costs (26) (26) Unsecured senior notes, net $ 2,074 $ 2,074 The indentures provide that on or before certain fixed dates, the Company may redeem up to 40% of the aggregate principal amount of the unsecured senior notes with the net proceeds of certain equity offerings at fixed redemption prices, plus accrued and unpaid interest, to the redemption dates, subject to compliance with certain conditions. In addition, the Company may redeem all or a portion of the unsecured senior notes at any time on or after certain fixed dates at the applicable redemption prices set forth in the indentures plus accrued and unpaid interest, to the redemption dates. No notes were repurchased or redeemed during the three months ended March 31, 2021 . During the three months ended March 31, 2020, the Company repaid $100 in principal of outstanding notes. Additionally, the Company redeemed $598 in principal of outstanding notes during the three months ended March 31, 2020, resulting in a gain of $1. As of March 31, 2021, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows: Year Ending December 31, Amount 2021 through 2025 $ — Thereafter 2,100 Total unsecured senior notes principal amount $ 2,100 Other Nonrecourse Debt Other nonrecourse debt consists of the following: March 31, 2021 December 31, 2020 Other Nonrecourse Debt Issue Date Maturity Date Interest Rate Class of Note Collateral Amount Outstanding Outstanding Participating interest financing (1) — — 0.3%-5.6% — $ — $ 3,306 $ 3,473 Securitization of nonperforming HECM loans Trust 2020-1 September 2020 September 2030 1.3%-7.5% A, M1, M2, M3, M4, M5 489 471 490 Trust 2019-2 November 2019 November 2029 2.3%-6.0% A, M1, M2, M3, M4, M5 254 232 241 Trust 2019-1 June 2019 June 2029 2.7%-6.0% A, M1, M2, M3, M4, M5 231 203 212 Other nonrecourse debt principal amount 4,212 4,416 Unamortized premium, net of debt issuance costs and discount 9 8 Other nonrecourse debt, net $ 4,221 $ 4,424 (1) Amounts represent the Company’s participating interest in GNMA HMBS securitized portfolios. Financial Covenants The Company’s credit facilities contain various financial covenants which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements, which are measured at the Company’s operating subsidiary, Nationstar Mortgage LLC. The Company was in compliance with its required financial covenants as of March 31, 2021. |
Securitizations and Financings
Securitizations and Financings | 3 Months Ended |
Mar. 31, 2021 | |
Variable Interest Entities and Securitizations [Abstract] | |
Securitizations and Financings | 10. Securitizations and Financings Variable Interest Entities In the normal course of business, the Company enters into various types of on- and off-balance sheet transactions with special purpose entities (“SPEs”) determined to be VIEs, which primarily consist of securitization trusts established for a limited purpose. Generally, these SPEs are formed for the purpose of securitization transactions in which the Company transfers assets to an SPE, which then issues to investors various forms of debt obligations supported by those assets. The Company has determined that the SPEs created in connection with certain advance facilities trusts should be consolidated as the Company is the primary beneficiary of each of these entities. Also, the Company consolidated certain reverse mortgage SPEs as it is the primary beneficiary of each of these entities. These SPEs include the Nationstar HECM Loan Trusts. A summary of the assets and liabilities of the Company’s transactions with VIEs included in the Company’s condensed consolidated balance sheets is presented below: March 31, 2021 December 31, 2020 Consolidated Transactions with VIEs Transfers Reverse Secured Borrowings Transfers Reverse Secured Borrowings Assets Restricted cash $ 80 $ 27 $ 47 $ 23 Advances and other receivables, net 415 — 441 — Reverse mortgage interests, net (1) — 4,159 — 4,356 Total assets $ 495 $ 4,186 $ 488 $ 4,379 Liabilities Advance facilities (2) $ 337 $ — $ 358 $ — Payables and other liabilities — — 1 — Participating interest financing — 3,306 — 3,473 HECM Securitizations (HMBS) Trust 2020-1 — 471 — 490 Trust 2019-2 — 232 — 241 Trust 2019-1 — 203 — 212 Total liabilities $ 337 $ 4,212 $ 359 $ 4,416 (1) Amounts include net purchase discount of $53 a nd $61 as of March 31, 2021 and December 31, 2020, respectively. (2) Refer to advance facilities in Note 9, Indebtedness , for additional information. The following table shows a summary of the outstanding collateral and certificate balances for securitization trusts for which the Company was the transferor, including any retained beneficial interests and MSRs, that were not consolidated by the Company: Unconsolidated Securitization Trusts March 31, 2021 December 31, 2020 Total collateral balances - UPB $ 1,283 $ 1,326 Total certificate balances $ 1,281 $ 1,329 The Company has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of March 31, 2021 and December 31, 2020 and therefore does not have a significant maximum exposure to loss related to these unconsolidated VIEs. A summary of mortgage loans transferred by the Company to unconsolidated securitization trusts that are 60 days or more past due are presented below: Principal Amount of Transferred Loans 60 Days or More Past Due March 31, 2021 December 31, 2020 Unconsolidated securitization trusts $ 147 $ 154 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 11. Earnings Per Share The Company computes earnings per share using the two-class method, which is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. The Series A Preferred Stock is considered participating securities because it has dividend rights determined on an as-converted basis in the event of Company’s declaration of a dividend or distribution for common shares. On March 26, 2021, the Company repurchased 3,700 thousand shares of its common stock from affiliates of Kohlberg Kravis Roberts & Co. L.P., a related party of the Company, for a total cost of $119 or $32.25 per share. The following table sets forth the computation of basic and diluted net income (loss) per common share (amounts in millions, except per share amounts): Three Months Ended March 31, Computation of Earnings Per Share 2021 2020 Net income (loss) attributable to Mr. Cooper $ 561 $ (168) Less: Undistributed earnings attributable to participating stockholders 5 — Net income (loss) attributable to common stockholders $ 556 $ (168) Net income (loss) per common share attributable to Mr. Cooper: Basic $ 6.22 $ (1.84) Diluted $ 5.92 $ (1.84) Weighted average shares of common stock outstanding (in thousands): Basic 89,458 91,385 Dilutive effect of stock awards (1) 3,590 — Dilutive effect of participating securities (1) 839 — Diluted 93,887 91,385 (1) For periods with net loss, the Company excluded potential common shares from the computation of diluted EPS because inclusion would be antidilutive. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes For the three months ended March 31, 2021, the effective tax rate, based on whole numbers, was 22.9% whic h differed from the statutory federal rate of 21% primarily due to state income taxes, as well as unfavorable permanent differences including executive compensation disallowed under Internal Revenue Code Section 162(m). The effective tax rate decreased during the three months ended March 31, 2021 compared to the same period in 2020, primarily due to quarterly discrete tax items related to the excess tax benefit from stock-based compensation and the recognition of a deferred tax asset for the investment in subsidiaries as it relates to the Title Transaction. For the three months ended March 31, 2020, the effective tax rate, based on whole numbers, was 28.4% which differed from the statutory federal rate of 21% primarily due to permanent differences including executive compensation disallowed under Internal Revenue Code Section 162(m) and nondeductible meals and entertainment expenses, as well as other recurring items such as the state tax benefit. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 13. Fair Value Measurements Fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a three-tiered fair value hierarchy has been established based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs). There have been no significant changes to the valuation techniques and inputs used by the Company in estimating fair values of Level 2 and Level 3 assets and liabilities as disclosed in the Company’s Annual Reports on Form 10-K for the year ended December 31, 2020. The following tables present the estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured at fair value on a recurring basis: March 31, 2021 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 6,351 $ — $ 6,351 $ — Forward mortgage servicing rights 3,354 — — 3,354 Derivative financial instruments IRLCs 232 — — 232 Forward MBS trades 286 — 286 — LPCs 8 — — 8 Liabilities Derivative financial instruments IRLCs 1 — — 1 Forward MBS trades 76 — 76 — LPCs 38 — — 38 Swap futures 1 — 1 — Mortgage servicing rights financing 23 — — 23 Excess spread financing 934 — — 934 December 31, 2020 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 5,720 $ — $ 5,720 $ — Forward mortgage servicing rights 2,703 — — 2,703 Derivative financial instruments IRLCs 414 — — 414 Forward MBS trades 37 — 37 — LPCs 38 — — 38 Liabilities Derivative financial instruments Forward MBS trades 156 — 156 — LPCs 1 — — 1 Mortgage servicing rights financing 33 — — 33 Excess spread financing 934 — — 934 The tables below present a reconciliation for all of the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis: Three Months Ended March 31, 2021 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Forward mortgage servicing rights IRLCs LPCs Excess spread financing Mortgage servicing rights financing LPCs Balance - beginning of period $ 2,703 $ 414 $ 38 $ 934 $ 33 $ 1 Total gains or losses included in earnings 298 (182) (30) 41 (10) 37 Purchases, issuances, sales, repayments and settlements Purchases 67 — — — — — Issuances 288 — — — — — Sales (2) — — — — — Settlements and repayments — — — (41) — — Balance - end of period $ 3,354 $ 232 $ 8 $ 934 $ 23 $ 38 Three Months Ended March 31, 2020 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Forward mortgage servicing rights Excess spread financing Mortgage servicing rights financing Balance - beginning of period $ 3,496 $ 1,311 $ 37 Total gains or losses included in earnings (534) (35) 6 Purchases, issuances, sales, repayments and settlements Purchases 24 — — Issuances 123 24 — Settlements and repayments — (58) — Balance - end of period $ 3,109 $ 1,242 $ 43 No transfers were made in or out of Level 3 fair value assets and liabilities for the Company during the three months ended March 31, 2021 and 2020. The tables below present the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities: March 31, 2021 December 31, 2020 Range Weighted Average Range Weighted Average Level 3 Inputs Min Max Min Max Forward MSR Discount rate 8.2 % 12.0 % 9.3 % 8.2 % 12.0 % 9.4 % Prepayment speed 10.5 % 17.7 % 12.4 % 14.2 % 21.3 % 15.4 % Cost to service per loan (1) $ 64 $ 226 $ 92 $ 66 $ 257 $ 98 Average life (2) 5.9 years 5.0 years IRLCs Value of servicing (basis points per loan) (1.3) 2.2 1.2 (1.0) 2.2 1.2 Excess spread financing Discount rate 9.6 % 15.7 % 11.9 % 9.9 % 15.7 % 12.2 % Prepayment speed 11.3 % 14.6 % 12.5 % 13.9 % 15.0 % 14.4 % Recapture rate 17.1 % 23.1 % 19.0 % 17.7 % 24.2 % 19.5 % Average life (2) 5.7 years 5.1 years Mortgage servicing rights financing Advance financing and counterparty fee rates 4.1 % 8.4 % 7.4 % 4.6 % 8.5 % 7.5 % Annual advance recovery rates 18.1 % 22.0 % 19.9 % 18.3 % 22.0 % 19.9 % (1) Presented in whole dollar amounts. (2) Average life is included for informational purposes. The tables below present a summary of the estimated carrying amount and fair value of the Company’s financial instruments not carried at fair value: March 31, 2021 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 674 $ 674 $ — $ — Restricted cash 261 261 — — Advances and other receivables, net 838 — — 838 Reverse mortgage interests, net 5,091 — — 5,166 Loans subject to repurchase from Ginnie Mae 5,816 — 5,816 — Financial liabilities Unsecured senior notes, net 2,074 2,120 — — Advance and warehouse facilities, net 7,379 — 7,388 — Liability for loans subject to repurchase from Ginnie Mae 5,816 — 5,816 — Participating interest financing, net 3,318 — — 3,319 HECM Securitization (HMBS), net Trust 2020-1 469 — — 471 Trust 2019-2 231 — — 231 Trust 2019-1 203 — — 203 December 31, 2020 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 695 $ 695 $ — $ — Restricted cash 218 218 — — Advances and other receivables, net 940 — — 940 Reverse mortgage interests, net 5,253 — — 5,383 Loans subject to repurchase from Ginnie Mae 6,159 — 6,159 — Financial liabilities Unsecured senior notes, net 2,074 2,208 — — Advance and warehouse facilities, net 6,763 — 6,774 — Liability for loans subject to repurchase from Ginnie Mae 6,159 — 6,159 — Participating interest financing, net 3,485 — — 3,496 HECM Securitization (HMBS), net Trust 2020-1 488 — — 490 Trust 2019-2 240 — — 241 Trust 2019-1 211 — — 212 |
Capital Requirements
Capital Requirements | 3 Months Ended |
Mar. 31, 2021 | |
Mortgage Banking [Abstract] | |
Capital Requirements | 14. Capital Requirements Certain of the Company’s secondary market investors require minimum net worth (“capital”) requirements, as specified in the respective selling and servicing agreements. In addition, these investors may require capital ratios in excess of the stated requirements to approve large servicing transfers. To the extent that these requirements are not met, the Company’s secondary market investors may utilize a range of remedies ranging from sanctions, suspension or ultimately termination of the Company’s selling and servicing agreements, which would prohibit the Company from further originating or securitizing these specific types of mortgage loans or being an approved servicer. The Company’s various capital requirements related to its outstanding selling and servicing agreements are measured based on the Company’s operating subsidiary, Nationstar Mortgage LLC. As of March 31, 2021, the Company was in compliance with its selling and servicing capital requirements. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies Litigation and Regulatory The Company and its subsidiaries are routinely and currently involved in a significant number of legal proceedings, including, but not limited to, judicial, arbitration, regulatory and governmental proceedings related to matters that arise in connection with the conduct of the Company’s business. The legal proceedings are at varying stages of adjudication, arbitration or investigation and are generally based on alleged violations of consumer protection, securities, employment, contract, tort, common law fraud and other numerous laws, including, without limitation, the Equal Credit Opportunity Act, Fair Debt Collection Practices Act, Fair Credit Reporting Act, Real Estate Settlement Procedures Act, National Housing Act, Homeowners Protection Act, Service Member’s Civil Relief Act, Telephone Consumer Protection Act, Truth in Lending Act, Financial Institutions Reform, Recovery, and Enforcement Act of 1989, unfair, deceptive or abusive acts or practices in violation of the Dodd-Frank Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Home Mortgage Disclosure Act, Title 11 of the United States Code (aka the “Bankruptcy Code”), False Claims Act and Making Home Affordable loan modification programs. In addition, along with others in its industry, the Company is subject to repurchase and indemnification claims and may continue to receive claims in the future, regarding alleged breaches of representations and warranties relating to the sale of mortgage loans, the placement of mortgage loans into securitization trusts or the servicing of mortgage loans securitizations. The Company is also subject to legal actions or proceedings related to loss sharing and indemnification provisions of its various acquisitions. Certain of the pending or threatened legal proceedings include claims for substantial compensatory, punitive and/ or statutory damages or claims for an indeterminate amount of damages. The Company operates within highly regulated industries on a federal, state and local level. In the normal and ordinary course of its business, the Company is routinely subject to extensive examinations, investigations, subpoenas, inquiries and reviews by various federal, state and local governmental, regulatory and enforcement agencies, including the Consumer Financial Protection Bureau, the Securities and Exchange Commission, the Department of Justice, the Office of the Special Inspector General for the Troubled Asset Relief Program, the U.S. Department of Housing and Urban Development, various State mortgage banking regulators and various State Attorneys General, related to the Company’s residential loan servicing and origination practices, its financial reporting and other aspects of its businesses. Any pending or potential future investigations, subpoenas, examinations or inquiries may lead to administrative, civil or criminal proceedings or settlements, and possibly result in remedies including fines, penalties, restitution, or alterations in the Company’s business practices, and additional expenses and collateral costs. The Company is cooperating fully in these matters. Responding to these matters requires the Company to devote substantial resources, resulting in higher costs and lower net cash flows. Adverse results in any of these matters could further increase the Company’s operating expenses and reduce its revenues, require it to change business practices and limit its ability to grow and otherwise materially and adversely affect its business, reputation, financial condition and results of operation. The Company seeks to resolve all legal proceedings and other matters in the manner management believes is in the best interest of the Company and contests liability, allegations of wrongdoing and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter. The Company has entered into agreements with a number of entities and regulatory agencies that toll applicable limitations periods with respect to their claims. On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with outstanding legal and regulatory and governmental proceedings utilizing the latest information available. Where available information indicates that it is probable, a liability has been incurred, and the Company can reasonably estimate the amount of the loss, an accrued liability is established. The actual costs of resolving these proceedings may be substantially higher or lower than the amounts accrued. As a legal matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is both probable and estimable. If, at the time of evaluation, the loss contingency is not both probable and reasonably estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and reasonably estimable. Once the matter is deemed to be both probable and reasonably estimable, the Company will establish an accrued liability and record a corresponding amount to legal-related expense. The Company will continue to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Legal-related expense for the Company, which includes legal settlements and the fees paid to external legal service providers, of $13 and $15 for three months ended March 31, 2021 and 2020, respectively, and was included in general and administrative expenses on the unaudited condensed consolidated statements of operations . For matters for which a loss is probable or reasonably possible in future periods, whether in excess of a related accrued liability or where there is no accrued liability, the Company may be able to estimate a range of possible loss. In determining whether it is possible to provide an estimate of loss or range of possible loss, the Company reviews and evaluates its material legal matters on an ongoing basis, in conjunction with any outside counsel handling the matter. Management currently believes the aggregate range of reasonably possible loss is $2 to $18 in excess of the accrued liability (if any) related to those matters as of March 31, 2021. This estimated range of possible loss i s based upon currently available information and is subject to significant judgment, numerous assumptions and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary substantially from the current estimate. Those matters for which an estimate is not possible are not included within the estimated range. Therefore, this estimated range of possible loss represents what management believes to be an estimate of possible loss only for certain matters meeting these criteria. It does not represent the Company’s maximum loss exposure and the Company cannot provide assurance that its litigations reserves will not need to be adjusted in the future. Thus, the Company’s exposure and ultimate losses may be higher, possibly significantly so, than the amounts accrued or this aggregate amount. In the Company’s experience, legal proceedings are inherently unpredictable. One or more of the following factors frequently contribute to this inherent unpredictability: the proceeding is in its early stages; the damages sought are unspecified, unsupported or uncertain; it is unclear whether a case brought as a class action will be allowed to proceed on that basis or, if permitted to proceed as a class action, how the class will be defined; the other party is seeking relief other than or in addition to compensatory damages (including, in the case of regulatory and governmental investigations and inquiries, the possibility of fines and penalties); the matter presents meaningful legal uncertainties, including novel issues of law; the Company has not engaged in meaningful settlement discussions; discovery has not started or is not complete; there are significant facts in dispute; predicting possible outcomes depends on making assumptions about future decisions of courts or governmental or regulatory bodies or the behavior of other parties; and there are a large number of parties named as defendants (including where it is uncertain how damages or liability, if any, will be shared among multiple defendants). Generally, the less progress that has been made in the proceedings or the broader the range of potential results, the harder it is for the Company to estimate losses or ranges of losses that is reasonably possible the Company could incur. Based on current knowledge, and after consultation with counsel, management believes that the current legal accrued liability within payables and accrued liabilities, is appropriate, and the amount of any incremental liability arising from these matters is not expected to have a material adverse effect on the consolidated financial condition of the Company, although the outcome of such proceedings could be material to the Company’s operating results and cash flows for a particular period depending, on among other things, the level of the Company’s revenues or income for such period. However, in the event of significant developments on existing cases, it is possible that the ultimate resolution, if unfavorable, may be material to the Company’s condensed consolidated financial statements. Other Loss Contingencies As part of the Company’s ongoing operations, it acquires servicing rights of forward and reverse mortgage loan portfolios that are subject to indemnification based on the representations and warranties of the seller. From time to time, the Company will seek recovery under these representations and warranties for incurred costs. The Company believes all balances sought from sellers recorded in advances and other receivables and reverse mortgage interests represent valid claims. However, the Company acknowledges that the claims process can be prolonged due to the required time to perfect claims at the loan level. Because of the required time to perfect or remediate these claims, management relies on the sufficiency of documentation supporting the claim, current negotiations with the counterparty and other evidence to evaluate whether a reserve is required for non-recoverable balances. In the absence of successful negotiations with the seller, all amounts claimed may not be recovered. Balances may be written-off and charged against earnings when management identifies amounts where recoverability from the seller is not likely. As of March 31, 2021, the Company believes all recorded balances for which recovery is sought from the seller are valid claims, and no evidence suggests additional reserves are warranted. Loan and Other Commitments The Company enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. The Company also enters into LPCs with prospective sellers. These loan commitments are treated as derivatives and are carried at fair value. See Note 8, Derivative Financial Instruments , for more information. The Company had certain reverse MSRs, reverse MSLs and reverse mortgage loans related to approximately $17,269 and $18,091 of UPB in reverse mortgage loans as of March 31, 2021 and December 31, 2020, respectively. As a servicer for these reverse mortgage loans, among other things, the Company is obligated to fund borrowers’ draws to the loan customers as required in accordance with the loan agreement. As of March 31, 2021 and December 31, 2020, the Company’s maximum unfunded advance obligation to fund borrower draws related to these reverse MSRs and loans was approximately $2,113 and $2,202, respectively. Upon funding any portion of these draws, the Company expects to securitize and sell the advances in transactions that will be accounted for as secured borrowings. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | 16. Segment Information The Company’s segments are based upon the Company’s organizational structure, which focuses primarily on the services offered. Corporate functional expenses are allocated to individual segments based on the actual cost of services performed, direct resource utilization, estimate of percentage use for shared services or headcount percentage for certain functions. Facility costs are allocated to individual segments based on cost per headcount for specific facilities utilized. Group insurance costs are allocated to individual segments based on global cost per headcount. Non-allocated corporate expenses include the administrative costs of executive management and other corporate functions that are not directly attributable to Company’s operating segments. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties. In the second quarter of 2020, the Company updated its presentation of segment assets to be aligned with a change in the reporting package provided to the Chief Operating Decision Maker. The presentation change had no impact on the segments' operations. Assets allocated to the Servicing segment include MSRs; advances and other receivables, except for co-issue MSR holdback; Servicing related mortgage loans held for sale; and other assets including property, plant and equipment, lease-related assets, prepaid assets, and goodwill. Assets allocated to Originations segment include co-issue MSR holdback in advances and other receivables; Originations related mortgage loans held for sale; derivative assets; and other assets including property, plant and equipment, lease-related assets, prepaid assets, and goodwill. Assets allocated to the Xome segment include cash and cash equivalents; tax-related assets; receivables; and other assets including property, plant and equipment, lease-related assets, prepaid assets, goodwill, and other intangible assets. All assets that are not specifically identified or allocated to a reporting segment are reported as part of Corporate/Other and include cash and cash equivalents; tax-related assets; and intangibles assets excluding goodwill and assets allocated to Xome. Eliminations are also included in Corporate/Other. Prior year financial information has been adjusted retrospectively to reflect the updated presentation. The following tables present financial information by segment: Three Months Ended March 31, 2021 Financial Information by Segment Servicing Originations Xome Corporate/Other Consolidated Revenues Service related, net $ 449 $ 43 $ 96 $ — $ 588 Net gain on mortgage loans held for sale 127 552 — — 679 Total revenues 576 595 96 — 1,267 Total expenses 125 231 87 26 469 Interest income 66 23 — — 89 Interest expense (104) (25) — (30) (159) Total other expenses, net (38) (2) — (30) (70) Income (loss) before income tax expense (benefit) $ 413 $ 362 $ 9 $ (56) $ 728 Depreciation and amortization for property and equipment and intangible assets $ 5 $ 4 $ 3 $ 4 $ 16 Total assets $ 16,696 $ 5,559 $ 120 $ 2,338 $ 24,713 Three Months Ended March 31, 2020 Financial Information by Segment Servicing Originations Xome Corporate/Other Consolidated Revenues Service related, net $ (180) $ 20 $ 106 $ 1 $ (53) Net gain on mortgage loans held for sale 34 297 — — 331 Total revenues (146) 317 106 1 278 Total expenses 149 166 96 33 444 Interest income 83 34 — 1 118 Interest expense (113) (27) — (52) (192) Other income, net — — 1 — 1 Total other (expenses) income, net (30) 7 1 (51) (73) (Loss) income before income tax (benefit) expense $ (325) $ 158 $ 11 $ (83) $ (239) Depreciation and amortization for property and equipment and intangible assets $ 3 $ 3 $ 3 $ 10 $ 19 Total assets $ 10,619 $ 4,459 $ 135 $ 2,400 $ 17,613 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of Presentation The consolidated interim financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Reports on Form 10-K for the year ended December 31, 2020. |
Basis of consolidation | Basis of ConsolidationThe condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, other entities in which the Company has a controlling financial interest and those variable interest entities (“VIE”) where the Company’s wholly-owned subsidiaries are the primary beneficiaries. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that the Company became the primary beneficiary through the date the Company ceases to be the primary beneficiary. The Company applies the equity method of accounting to investments where it is able to exercise significant influence, but not control, over the policies and procedures of the entity and owns less than 50% of the voting interests. Investments in certain companies over which the Company does not exert significant influence are accounted for as cost method investments. Intercompany balances and transactions on consolidated entities have been eliminated. |
Use of estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates due to factors such as adverse changes in the economy, changes in interest rates, secondary market pricing for loans held for sale and derivatives, strength of underwriting and servicing practices, changes in prepayment assumptions, declines in home prices or discrete events adversely affecting specific borrowers, uncertainties in the economy from the COVID-19 pandemic, and such differences could be material. |
Recent accounting guidance adopted | Recent Accounting Guidance Adopted Accounting Standards Update 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes |
Fair value measurement | Fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a three-tiered fair value hierarchy has been established based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs). There have been no significant changes to the valuation techniques and inputs used by the Company in estimating fair values of Level 2 and Level 3 assets and liabilities as disclosed in the Company’s Annual Reports on Form 10-K for the year ended December 31, 2020. |
Segment information | In the second quarter of 2020, the Company updated its presentation of segment assets to be aligned with a change in the reporting package provided to the Chief Operating Decision Maker. The presentation change had no impact on the segments' operations. Assets allocated to the Servicing segment include MSRs; advances and other receivables, except for co-issue MSR holdback; Servicing related mortgage loans held for sale; and other assets including property, plant and equipment, lease-related assets, prepaid assets, and goodwill. Assets allocated to Originations segment include co-issue MSR holdback in advances and other receivables; Originations related mortgage loans held for sale; derivative assets; and other assets including property, plant and equipment, lease-related assets, prepaid assets, and goodwill. Assets allocated to the Xome segment include cash and cash equivalents; tax-related assets; receivables; and other assets including property, plant and equipment, lease-related assets, prepaid assets, goodwill, and other intangible assets. All assets that are not specifically identified or allocated to a reporting segment are reported as part of Corporate/Other and include cash and cash equivalents; tax-related assets; and intangibles assets excluding goodwill and assets allocated to Xome. Eliminations are also included in Corporate/Other. Prior year financial information has been adjusted retrospectively to reflect the updated presentation. |
Mortgage Servicing Rights and_2
Mortgage Servicing Rights and Related Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Transfers and Servicing [Abstract] | |
Schedule of servicing assets at fair value | The following table sets forth the carrying value of the Company’s mortgage servicing rights (“MSRs”) and the related liabilities. In estimating the fair value of all mortgage servicing rights and related liabilities, the impact of the COVID-19 pandemic was considered in the determination of key assumptions. MSRs and Related Liabilities March 31, 2021 December 31, 2020 Forward MSRs - fair value $ 3,354 $ 2,703 Reverse MSRs - amortized cost 5 5 Mortgage servicing rights $ 3,359 $ 2,708 Mortgage servicing liabilities - amortized cost $ 38 $ 41 Excess spread financing - fair value $ 934 $ 934 Mortgage servicing rights financing - fair value 23 33 MSR related liabilities - nonrecourse at fair value $ 957 $ 967 The following table sets forth the activities of forward MSRs: Three Months Ended March 31, Forward MSRs - Fair Value 2021 2020 Fair value - beginning of period $ 2,703 $ 3,496 Additions: Servicing retained from mortgage loans sold 288 123 Purchases of servicing rights 67 24 Dispositions: Sales of servicing assets (2) — Changes in fair value: Changes in valuation inputs or assumptions used in the valuation model 510 (401) Other changes in fair value (212) (133) Fair value - end of period $ 3,354 $ 3,109 The following table provides a breakdown of UPB and fair value for the Company’s forward MSRs: March 31, 2021 December 31, 2020 Forward MSRs - UPB and Fair Value Breakdown UPB Fair Value UPB Fair Value Investor Pools Agency $ 234,589 $ 2,965 $ 227,136 $ 2,305 Non-agency 41,439 389 44,053 398 Total $ 276,028 $ 3,354 $ 271,189 $ 2,703 |
Schedule of sensitivity analysis of fair value, transferor's interests in transferred financial assets | The following table shows the hypothetical effect on the fair value of the Company’s forward MSRs when applying certain unfavorable variations of key assumptions to these assets for the dates indicated: Discount Rate Total Prepayment Speeds Cost to Service per Loan Forward MSRs - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change 10% Adverse Change 20% Adverse Change March 31, 2021 Mortgage servicing rights $ (142) $ (273) $ (187) $ (360) $ (49) $ (99) December 31, 2020 Mortgage servicing rights $ (100) $ (192) $ (181) $ (347) $ (45) $ (89) The following table shows the hypothetical effect on the Company’s excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities for the dates indicated: Discount Rate Prepayment Speeds Excess Spread Financing - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change March 31, 2021 Excess spread financing $ 33 $ 68 $ 36 $ 75 December 31, 2020 Excess spread financing $ 30 $ 62 $ 41 $ 84 |
Schedule of reverse mortgage servicing rights and liabilities - amortized cost | The following table sets forth the activities of reverse MSRs and mortgage servicing liabilities (“MSL”): Three Months Ended March 31, 2021 2020 Reverse MSRs and MSLs - Amortized Cost Reverse MSRs Reverse MSLs Reverse MSRs Reverse MSLs Balance - beginning of period $ 5 $ 41 $ 6 $ 61 Amortization/accretion — (3) — (8) Balance - end of the period $ 5 $ 38 $ 6 $ 53 Fair value - end of period $ 5 $ 38 $ 6 $ 27 |
Schedule of fees earned in exchange for servicing financial assets | The following table sets forth the items comprising total revenues for the Servicing segment: Three Months Ended March 31, Total Revenues - Servicing 2021 2020 Contractually specified servicing fees (1) $ 276 $ 297 Other service-related income (1) 145 49 Incentive and modification income (1) 14 10 Late fees (1) 18 27 Reverse servicing fees 5 6 Mark-to-market adjustments (2) 354 (383) Counterparty revenue share (3) (83) (76) Amortization, net of accretion (4) (153) (76) Total revenues - Servicing $ 576 $ (146) (1) The Company recognizes revenue on an earned basis for services performed. Amounts include subservicing related revenues. (2) Mark-to-market (“MTM”) adjustments include fair value adjustments on MSR, excess spread financing and MSR financing liabilities. The amount of MSR MTM includes the impact of negative modeled cash flows which have been transferred to reserves on advances and other receivables. The negative modeled cash flows relate to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio. The impact of negative modeled cash flows was $12 and $10 during the three months ended March 31, 2021 and 2020, respectively. (3) Counterparty revenue share represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements and the payments made associated with MSR financing arrangements. (4) Amortization is net of excess spread accretion of $76 and $68 and MSL accretion of $3 and $8 during the three months ended March 31, 2021 and 2020, respectively. |
Advances and Other Receivables
Advances and Other Receivables (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Advances and other receivables, net, consists of the following: Advances and Other Receivables, Net March 31, 2021 December 31, 2020 Servicing advances, net of $63 and $72 purchase discount, respectively $ 882 $ 975 Receivables from agencies, investors and prior servicers, net of $20 and $21 purchase discount, respectively 162 173 Reserves (206) (208) Total advances and other receivables, net $ 838 $ 940 The following table sets forth the activities of the servicing reserves for advances and other receivables: Three Months Ended March 31, Reserves for Advances and Other Receivables 2021 2020 Balance - beginning of period $ 208 $ 168 Provision and other additions (1) 15 30 Write-offs (17) (5) Balance - end of period $ 206 $ 193 (1) The Company recorded a provision of $12 and $10 through the MTM adjustments in revenues - service related, net, in the unaudited condensed consolidated statements of operations during the three months ended March 31, 2021 and 2020, respectively, for inactive and liquidated l oans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate. The following tables set forth the activities of the purchase discounts for advances and other receivables: Three Months Ended March 31, 2021 2020 Purchase Discount for Advances and Other Receivables Servicing Advances Receivables from Agencies, Investors and Prior Servicers Servicing Advances Receivables from Agencies, Investors and Prior Servicers Balance - beginning of period $ 72 $ 21 $ 131 $ 21 Utilization of purchase discounts (9) (1) (6) — Balance - end of period $ 63 $ 20 $ 125 $ 21 |
Reverse Mortgage Interests (Tab
Reverse Mortgage Interests (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Reverse Mortgage Interests [Abstract] | |
Schedule of reverse mortgage interest | Reverse mortgage interests, net, consists of the following: Reverse Mortgage Interests, Net March 31, 2021 December 31, 2020 Participating interests in HECM mortgage-backed securities (“HMBS”) $ 3,304 $ 3,471 Unsecuritized interests 972 964 Other interests securitized 908 945 Purchase discount, net (93) (127) Total reverse mortgage interests, net $ 5,091 $ 5,253 Unsecuritized interests in reverse mortgages consist of the following: Unsecuritized Interests March 31, 2021 December 31, 2020 Repurchased HECM loans (exceeds 98% of their Max Claim Amount (“MCA”)) $ 699 $ 665 HECM related receivables (1) 180 208 Funded borrower draws not yet securitized 77 72 Real estate owned (“REO”) related receivables 16 19 Total unsecuritized interests $ 972 $ 964 (1) HECM related receivables consist primarily of receivables from FNMA for corporate advances and service fees and claims receivables from the U.S. Department of Housing and Urban Development (“HUD”) on reverse mortgage interests. The following table sets forth the activities of the purchase discounts, net, for reverse mortgage interests: Three Months Ended March 31, Purchase Discount, Net, for Reverse Mortgage Interests (1) 2021 2020 Balance - beginning of period $ (127) $ (114) Utilization of purchase discounts (2) 35 10 Amortization, net of accretion (1) (25) Balance - end of period $ (93) $ (129) (1) Net position as certain items are in a premium/(discount) position, based on the characteristics of underlying tranches of loans. (2) Utilization of purchase discounts on liquidated loans, for which the remaining receivable was written off. |
Mortgage Loans Held for Sale (T
Mortgage Loans Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Mortgage Loans Held for Sale and Investment [Abstract] | |
Schedule of mortgage loans held-for-sale | Mortgage loans held for sale are recorded at fair value as set forth below: Mortgage Loans Held for Sale March 31, 2021 December 31, 2020 Mortgage loans held for sale – UPB $ 6,204 $ 5,438 Mark-to-market adjustment (1) 147 282 Total mortgage loans held for sale $ 6,351 $ 5,720 (1) The mark-to-market adjustment includes net change in unrealized gain/loss, premium on correspondent loans and fees on direct-to-consumer loans. The mark-to-market adjustment is recorded in net gain on mortgage loans held for sale in the unaudited condensed consolidated statements of operations . The following table sets forth the activities of mortgage loans held for sale: Three Months Ended March 31, Mortgage Loans Held for Sale 2021 2020 Balance - beginning of period $ 5,720 $ 4,077 Loans sold (26,734) (13,510) Mortgage loans originated and purchased, net of fees 25,214 12,375 Repurchase of loans out of Ginnie Mae securitizations 2,255 919 Net change in unrealized (loss) gain on loans held for sale (105) 61 Net transfers of mortgage loans held for sale (1) 1 — Balance - end of period $ 6,351 $ 3,922 (1) Amount reflects transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net, for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing. The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows: March 31, 2021 December 31, 2020 Mortgage Loans Held for Sale UPB Fair Value UPB Fair Value Non-accrual (1) $ 67 $ 54 $ 64 $ 54 (1) Non-accrual UPB includes $48 of UPB related to Ginnie Mae repurchased loans as of March 31, 2021 and December 31, 2020. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments | The following tables provide the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses) for the derivative financial instruments: March 31, 2021 Three Months Ended March 31, 2021 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2021 $ 2,341 $ 42 $ (60) Derivative financial instruments IRLCs 2021 8,950 232 (182) LPCs 2021 1,165 8 (30) Forward MBS trades 2021 22,566 286 249 Total derivative financial instruments - assets $ 32,681 $ 526 $ 37 Liabilities Derivative financial instruments IRLCs 2021 $ 240 $ 1 $ 1 LPCs 2021 3,974 38 37 Forward MBS trades 2021 6,341 76 (80) Swap futures 2021 60 1 1 Total derivative financial instruments - liabilities $ 10,615 $ 116 $ (41) March 31, 2020 Three Months Ended March 31, 2020 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2020 $ 2,598 $ 111 $ 79 Derivative financial instruments IRLCs 2020 6,923 263 128 LPCs 2020 834 25 13 Forward MBS trades 2020 886 6 — Eurodollar futures 2020-2021 6 — — Total derivative financial instruments - assets $ 8,649 $ 294 $ 141 Liabilities Derivative financial instruments IRLCs 2020 $ 22 $ — $ — LPCs 2020 10 — (3) Forward MBS trades 2020 10,229 223 211 Eurodollar futures 2020-2021 6 — — Total derivative financial instruments - liabilities $ 10,267 $ 223 $ 208 |
Indebtedness (Tables)
Indebtedness (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of advance and warehouse facilities | Advance and Warehouse Facilities March 31, 2021 December 31, 2020 Interest Rate Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral Pledged Advance Facilities $875 advance facility CP+2.0% to 6.5% January 2022 Servicing advance receivables $ 875 $ 140 $ 165 $ 168 $ 195 $640 advance facility (1) LIBOR+3.9% August 2022 Servicing advance receivables 640 231 299 235 305 $425 advance facility LIBOR+1.6% to 6.5% October 2021 Servicing advance receivables 425 197 250 192 246 $100 advance facility LIBOR+2.5% January 2022 Servicing advance receivables 100 70 92 74 98 Advance facilities principal amount 638 806 669 844 Warehouse Facilities $2,500 warehouse facility (2) LIBOR+1.6% to 1.9% October 2021 Mortgage loans or MBS 2,500 1,442 1,495 1,003 1,037 $2,000 warehouse facility LIBOR+1.6% to 2.0% February 2023 Mortgage loans or MBS 2,000 940 1,055 339 392 $1,500 warehouse facility LIBOR+1.5% June 2021 Mortgage loans or MBS 1,500 867 838 1,081 1,028 $1,350 warehouse facility (3) LIBOR+1.7% to 3.9% September 2022 Mortgage loans or MBS 1,350 918 990 1,067 1,128 March 31, 2021 December 31, 2020 Interest Rate Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral Pledged $1,200 warehouse facility LIBOR+1.8% to 3.0% November 2021 Mortgage loans or MBS 1,200 497 543 787 839 $750 warehouse facility LIBOR+1.8% to 2.3% August 2021 Mortgage loans or MBS 750 612 631 477 492 $750 warehouse facility LIBOR+1.7% to 2.8% October 2021 Mortgage loans or MBS 750 535 549 562 574 $600 warehouse facility LIBOR+2.5% February 2022 Mortgage loans or MBS 600 332 374 187 222 $500 warehouse facility LIBOR+2.5% to 4.0% May 2021 Mortgage loans or MBS 500 — — — — $300 warehouse facility LIBOR+1.4% January 2022 Mortgage loans or MBS 300 129 130 163 164 $250 warehouse facility LIBOR+1.4% to 2.3% May 2021 Mortgage loans or MBS 250 1 1 — — $200 warehouse facility LIBOR+1.8% July 2021 Mortgage loans or MBS 200 169 173 131 134 $50 warehouse facility LIBOR+1.8% to 4.8% June 2021 Mortgage loans or MBS 50 36 43 37 42 $30 warehouse facility (4) LIBOR+3.3% January 2022 Mortgage loans or MBS 30 2 2 1 1 Warehouse facilities principal amount 6,480 6,824 5,835 6,053 MSR Facilities $260 warehouse facility (1) LIBOR+3.9% August 2022 MSR 260 260 838 260 668 $200 warehouse facility LIBOR+3.5% August 2021 MSR 200 — 471 — 247 $150 warehouse facility (3) LIBOR+3.8% September 2022 MSR 150 — 438 — 228 $50 warehouse facility LIBOR+3.3% November 2022 MSR 50 10 80 10 74 MSR facilities principal amount 270 1,827 270 1,217 Advance, warehouse and MSR facilities principal amount 7,388 $ 9,457 6,774 $ 8,114 Unamortized debt issuance costs (9) (11) Advance and warehouse facilities, net $ 7,379 $ 6,763 Pledged Collateral for warehouse and MSR facilities: Mortgage loans held for sale $ 5,970 $ 6,210 $ 5,330 $ 5,447 Reverse mortgage interests 510 614 505 606 MSR 270 1,827 270 1,217 (1) Total capacity for this facility is $900, of which $640 is internally allocated for advance financing and $260 is internally allocated for MSR financing; capacity is fully fungible and is not restricted by these allocations. (2) The capacity amount for this warehouse facility increased from $1,500 to $2,500 in 2021. (3) Total capacity amount for this facility is $1,500, of which $150 is a sublimit for MSR financing. (4) The capacity amount for this warehouse facility decreased from $40 to $30 in 2021. |
Schedule of unsecured senior notes | Unsecured senior notes consist of the following: Unsecured Senior Notes March 31, 2021 December 31, 2020 $850 face value, 5.500% interest rate payable semi-annually, due August 2028 $ 850 $ 850 $650 face value, 5.125% interest rate payable semi-annually, due December 2030 650 650 $600 face value, 6.000% interest rate payable semi-annually, due January 2027 600 600 Unsecured senior notes principal amount 2,100 2,100 Unamortized debt issuance costs (26) (26) Unsecured senior notes, net $ 2,074 $ 2,074 |
Schedule of maturities of long-term debt | As of March 31, 2021, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows: Year Ending December 31, Amount 2021 through 2025 $ — Thereafter 2,100 Total unsecured senior notes principal amount $ 2,100 |
Schedule of other nonrecourse debt | Other nonrecourse debt consists of the following: March 31, 2021 December 31, 2020 Other Nonrecourse Debt Issue Date Maturity Date Interest Rate Class of Note Collateral Amount Outstanding Outstanding Participating interest financing (1) — — 0.3%-5.6% — $ — $ 3,306 $ 3,473 Securitization of nonperforming HECM loans Trust 2020-1 September 2020 September 2030 1.3%-7.5% A, M1, M2, M3, M4, M5 489 471 490 Trust 2019-2 November 2019 November 2029 2.3%-6.0% A, M1, M2, M3, M4, M5 254 232 241 Trust 2019-1 June 2019 June 2029 2.7%-6.0% A, M1, M2, M3, M4, M5 231 203 212 Other nonrecourse debt principal amount 4,212 4,416 Unamortized premium, net of debt issuance costs and discount 9 8 Other nonrecourse debt, net $ 4,221 $ 4,424 (1) Amounts represent the Company’s participating interest in GNMA HMBS securitized portfolios. |
Securitizations and Financings
Securitizations and Financings (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Variable Interest Entities and Securitizations [Abstract] | |
Schedule of assets and liabilities of VIEs included in financial statements | A summary of the assets and liabilities of the Company’s transactions with VIEs included in the Company’s condensed consolidated balance sheets is presented below: March 31, 2021 December 31, 2020 Consolidated Transactions with VIEs Transfers Reverse Secured Borrowings Transfers Reverse Secured Borrowings Assets Restricted cash $ 80 $ 27 $ 47 $ 23 Advances and other receivables, net 415 — 441 — Reverse mortgage interests, net (1) — 4,159 — 4,356 Total assets $ 495 $ 4,186 $ 488 $ 4,379 Liabilities Advance facilities (2) $ 337 $ — $ 358 $ — Payables and other liabilities — — 1 — Participating interest financing — 3,306 — 3,473 HECM Securitizations (HMBS) Trust 2020-1 — 471 — 490 Trust 2019-2 — 232 — 241 Trust 2019-1 — 203 — 212 Total liabilities $ 337 $ 4,212 $ 359 $ 4,416 (1) Amounts include net purchase discount of $53 a nd $61 as of March 31, 2021 and December 31, 2020, respectively. (2) Refer to advance facilities in Note 9, Indebtedness , for additional information. The following table shows a summary of the outstanding collateral and certificate balances for securitization trusts for which the Company was the transferor, including any retained beneficial interests and MSRs, that were not consolidated by the Company: Unconsolidated Securitization Trusts March 31, 2021 December 31, 2020 Total collateral balances - UPB $ 1,283 $ 1,326 Total certificate balances $ 1,281 $ 1,329 A summary of mortgage loans transferred by the Company to unconsolidated securitization trusts that are 60 days or more past due are presented below: Principal Amount of Transferred Loans 60 Days or More Past Due March 31, 2021 December 31, 2020 Unconsolidated securitization trusts $ 147 $ 154 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The following table sets forth the computation of basic and diluted net income (loss) per common share (amounts in millions, except per share amounts): Three Months Ended March 31, Computation of Earnings Per Share 2021 2020 Net income (loss) attributable to Mr. Cooper $ 561 $ (168) Less: Undistributed earnings attributable to participating stockholders 5 — Net income (loss) attributable to common stockholders $ 556 $ (168) Net income (loss) per common share attributable to Mr. Cooper: Basic $ 6.22 $ (1.84) Diluted $ 5.92 $ (1.84) Weighted average shares of common stock outstanding (in thousands): Basic 89,458 91,385 Dilutive effect of stock awards (1) 3,590 — Dilutive effect of participating securities (1) 839 — Diluted 93,887 91,385 (1) For periods with net loss, the Company excluded potential common shares from the computation of diluted EPS because inclusion would be antidilutive. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value, assets and liabilities measured on recurring basis | The following tables present the estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured at fair value on a recurring basis: March 31, 2021 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 6,351 $ — $ 6,351 $ — Forward mortgage servicing rights 3,354 — — 3,354 Derivative financial instruments IRLCs 232 — — 232 Forward MBS trades 286 — 286 — LPCs 8 — — 8 Liabilities Derivative financial instruments IRLCs 1 — — 1 Forward MBS trades 76 — 76 — LPCs 38 — — 38 Swap futures 1 — 1 — Mortgage servicing rights financing 23 — — 23 Excess spread financing 934 — — 934 December 31, 2020 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 5,720 $ — $ 5,720 $ — Forward mortgage servicing rights 2,703 — — 2,703 Derivative financial instruments IRLCs 414 — — 414 Forward MBS trades 37 — 37 — LPCs 38 — — 38 Liabilities Derivative financial instruments Forward MBS trades 156 — 156 — LPCs 1 — — 1 Mortgage servicing rights financing 33 — — 33 Excess spread financing 934 — — 934 |
Schedule of fair value, assets and liabilities measured on recurring basis, unobservable input reconciliation | The tables below present a reconciliation for all of the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis: Three Months Ended March 31, 2021 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Forward mortgage servicing rights IRLCs LPCs Excess spread financing Mortgage servicing rights financing LPCs Balance - beginning of period $ 2,703 $ 414 $ 38 $ 934 $ 33 $ 1 Total gains or losses included in earnings 298 (182) (30) 41 (10) 37 Purchases, issuances, sales, repayments and settlements Purchases 67 — — — — — Issuances 288 — — — — — Sales (2) — — — — — Settlements and repayments — — — (41) — — Balance - end of period $ 3,354 $ 232 $ 8 $ 934 $ 23 $ 38 Three Months Ended March 31, 2020 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Forward mortgage servicing rights Excess spread financing Mortgage servicing rights financing Balance - beginning of period $ 3,496 $ 1,311 $ 37 Total gains or losses included in earnings (534) (35) 6 Purchases, issuances, sales, repayments and settlements Purchases 24 — — Issuances 123 24 — Settlements and repayments — (58) — Balance - end of period $ 3,109 $ 1,242 $ 43 |
Fair value measurement inputs and valuation techniques | The tables below present the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities: March 31, 2021 December 31, 2020 Range Weighted Average Range Weighted Average Level 3 Inputs Min Max Min Max Forward MSR Discount rate 8.2 % 12.0 % 9.3 % 8.2 % 12.0 % 9.4 % Prepayment speed 10.5 % 17.7 % 12.4 % 14.2 % 21.3 % 15.4 % Cost to service per loan (1) $ 64 $ 226 $ 92 $ 66 $ 257 $ 98 Average life (2) 5.9 years 5.0 years IRLCs Value of servicing (basis points per loan) (1.3) 2.2 1.2 (1.0) 2.2 1.2 Excess spread financing Discount rate 9.6 % 15.7 % 11.9 % 9.9 % 15.7 % 12.2 % Prepayment speed 11.3 % 14.6 % 12.5 % 13.9 % 15.0 % 14.4 % Recapture rate 17.1 % 23.1 % 19.0 % 17.7 % 24.2 % 19.5 % Average life (2) 5.7 years 5.1 years Mortgage servicing rights financing Advance financing and counterparty fee rates 4.1 % 8.4 % 7.4 % 4.6 % 8.5 % 7.5 % Annual advance recovery rates 18.1 % 22.0 % 19.9 % 18.3 % 22.0 % 19.9 % (1) Presented in whole dollar amounts. (2) Average life is included for informational purposes. |
Schedule of fair value, by balance sheet grouping | The tables below present a summary of the estimated carrying amount and fair value of the Company’s financial instruments not carried at fair value: March 31, 2021 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 674 $ 674 $ — $ — Restricted cash 261 261 — — Advances and other receivables, net 838 — — 838 Reverse mortgage interests, net 5,091 — — 5,166 Loans subject to repurchase from Ginnie Mae 5,816 — 5,816 — Financial liabilities Unsecured senior notes, net 2,074 2,120 — — Advance and warehouse facilities, net 7,379 — 7,388 — Liability for loans subject to repurchase from Ginnie Mae 5,816 — 5,816 — Participating interest financing, net 3,318 — — 3,319 HECM Securitization (HMBS), net Trust 2020-1 469 — — 471 Trust 2019-2 231 — — 231 Trust 2019-1 203 — — 203 December 31, 2020 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 695 $ 695 $ — $ — Restricted cash 218 218 — — Advances and other receivables, net 940 — — 940 Reverse mortgage interests, net 5,253 — — 5,383 Loans subject to repurchase from Ginnie Mae 6,159 — 6,159 — Financial liabilities Unsecured senior notes, net 2,074 2,208 — — Advance and warehouse facilities, net 6,763 — 6,774 — Liability for loans subject to repurchase from Ginnie Mae 6,159 — 6,159 — Participating interest financing, net 3,485 — — 3,496 HECM Securitization (HMBS), net Trust 2020-1 488 — — 490 Trust 2019-2 240 — — 241 Trust 2019-1 211 — — 212 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The following tables present financial information by segment: Three Months Ended March 31, 2021 Financial Information by Segment Servicing Originations Xome Corporate/Other Consolidated Revenues Service related, net $ 449 $ 43 $ 96 $ — $ 588 Net gain on mortgage loans held for sale 127 552 — — 679 Total revenues 576 595 96 — 1,267 Total expenses 125 231 87 26 469 Interest income 66 23 — — 89 Interest expense (104) (25) — (30) (159) Total other expenses, net (38) (2) — (30) (70) Income (loss) before income tax expense (benefit) $ 413 $ 362 $ 9 $ (56) $ 728 Depreciation and amortization for property and equipment and intangible assets $ 5 $ 4 $ 3 $ 4 $ 16 Total assets $ 16,696 $ 5,559 $ 120 $ 2,338 $ 24,713 Three Months Ended March 31, 2020 Financial Information by Segment Servicing Originations Xome Corporate/Other Consolidated Revenues Service related, net $ (180) $ 20 $ 106 $ 1 $ (53) Net gain on mortgage loans held for sale 34 297 — — 331 Total revenues (146) 317 106 1 278 Total expenses 149 166 96 33 444 Interest income 83 34 — 1 118 Interest expense (113) (27) — (52) (192) Other income, net — — 1 — 1 Total other (expenses) income, net (30) 7 1 (51) (73) (Loss) income before income tax (benefit) expense $ (325) $ 158 $ 11 $ (83) $ (239) Depreciation and amortization for property and equipment and intangible assets $ 3 $ 3 $ 3 $ 10 $ 19 Total assets $ 10,619 $ 4,459 $ 135 $ 2,400 $ 17,613 |
Nature of Business and Basis _3
Nature of Business and Basis of Presentation - Additional Information (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - Title Business $ in Millions | Mar. 12, 2021USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Purchase price | $ 500 |
Cash received from disposal | $ 450 |
Mr. Cooper Group Inc. | Blend Labs, Inc. | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Ownership interest percentage | 9.90% |
Mortgage Servicing Rights and_3
Mortgage Servicing Rights and Related Liabilities - MSRs and Related Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Mortgage Servicing Rights [Line Items] | ||
Forward MSRs - fair value | $ 3,354 | $ 2,703 |
Mortgage servicing rights | 3,359 | 2,708 |
Mortgage servicing liabilities - amortized cost | 38 | 41 |
Excess spread financing - fair value | 934 | 934 |
Mortgage servicing rights financing - fair value | 23 | 33 |
MSR related liabilities - nonrecourse at fair value | 957 | 967 |
Mortgage servicing rights | ||
Mortgage Servicing Rights [Line Items] | ||
Forward MSRs - fair value | 3,354 | 2,703 |
Reverse MSRs - amortized cost | 5 | 5 |
Mortgage servicing liabilities - amortized cost | $ 38 | $ 41 |
Mortgage Servicing Rights and_4
Mortgage Servicing Rights and Related Liabilities - MSR's at Fair Value (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Fair value - beginning of period | $ 2,703 | |
Fair value - end of period | 3,354 | |
Mortgage servicing rights | ||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Fair value - beginning of period | 2,703 | $ 3,496 |
Servicing retained from mortgage loans sold | 288 | 123 |
Purchases of servicing rights | 67 | 24 |
Sales of servicing assets | (2) | 0 |
Changes in valuation inputs or assumptions used in the valuation model | 510 | (401) |
Other changes in fair value | (212) | (133) |
Fair value - end of period | $ 3,354 | $ 3,109 |
Mortgage Servicing Rights and_5
Mortgage Servicing Rights and Related Liabilities - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | |
Servicing Asset at Amortized Cost [Line Items] | |||
Excess spread financing - fair value | $ 934 | $ 934 | |
Mortgage servicing rights financing - fair value | 23 | 33 | |
Forward MSRs Sold | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB | 50 | $ 40 | |
Forward MSRs Sold, Subservicing Retained | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB | 0 | $ 0 | |
Reverse Mortgage Servicing Rights | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Impairment | 0 | ||
HECM | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB | $ 17,269 | $ 18,091 |
Mortgage Servicing Rights and_6
Mortgage Servicing Rights and Related Liabilities - UPB related to owned MSRs (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Owned Service Loans [Line Items] | ||
Fair Value | $ 3,354 | $ 2,703 |
Mortgage servicing rights | ||
Owned Service Loans [Line Items] | ||
UPB | 276,028 | 271,189 |
Fair Value | 3,354 | 2,703 |
Agency | Mortgage servicing rights | ||
Owned Service Loans [Line Items] | ||
UPB | 234,589 | 227,136 |
Fair Value | 2,965 | 2,305 |
Non-agency | Mortgage servicing rights | ||
Owned Service Loans [Line Items] | ||
UPB | 41,439 | 44,053 |
Fair Value | $ 389 | $ 398 |
Mortgage Servicing Rights and_7
Mortgage Servicing Rights and Related Liabilities - Fair Value Sensitivity Analysis (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Mortgage servicing rights | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Total prepayment speeds, 10% Adverse Change | $ (187) | $ (181) |
Total prepayment speeds, 20% Adverse Change | (360) | (347) |
Cost to Service per Loan, 10% Adverse Change | (49) | (45) |
Cost to Service per Loan, 20% Adverse Change | (99) | (89) |
Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Total prepayment speeds, 10% Adverse Change | 36 | 41 |
Total prepayment speeds, 20% Adverse Change | 75 | 84 |
100 bps Adverse Change | Mortgage servicing rights | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | (142) | (100) |
100 bps Adverse Change | Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | 33 | 30 |
200 bps Adverse Change | Mortgage servicing rights | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | (273) | (192) |
200 bps Adverse Change | Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | $ 68 | $ 62 |
Mortgage Servicing Rights and_8
Mortgage Servicing Rights and Related Liabilities - Reverse MSRs and Liabilities - Amortized Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||
Fair value - end of period | $ 3,354 | |
Servicing Liability at Amortized Cost [Roll Forward] | ||
Balance - beginning of period | 41 | |
Balance - end of the period | 38 | |
Reverse MSRs | ||
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||
Balance - beginning of period | 5 | $ 6 |
Amortization/accretion | 0 | 0 |
Balance - end of the period | 5 | 6 |
Fair value - end of period | 5 | 6 |
Reverse MSLs | ||
Servicing Liability at Amortized Cost [Roll Forward] | ||
Balance - beginning of period | 41 | 61 |
Amortization/accretion | (3) | (8) |
Balance - end of the period | 38 | 53 |
Fair value - end of period | $ 38 | $ 27 |
Mortgage Servicing Rights and_9
Mortgage Servicing Rights and Related Liabilities - Servicing Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Transfers and Servicing [Abstract] | ||
Contractually specified servicing fees | $ 276 | $ 297 |
Other service-related income | 145 | 49 |
Incentive and modification income | 14 | 10 |
Late fees | 18 | 27 |
Reverse servicing fees | 5 | 6 |
Mark-to-market adjustments | 354 | (383) |
Counterparty revenue share | (83) | (76) |
Amortization, net of accretion | (153) | (76) |
Total revenues - Servicing | 576 | (146) |
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans | 12 | 10 |
Servicing fee income accretion expense | 76 | 68 |
Accretion of MSL | $ 3 | $ 8 |
Advances and Other Receivable_2
Advances and Other Receivables - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||||
Servicing advances, net of $63 and $72 purchase discount, respectively | $ 882 | $ 975 | ||
Receivables from agencies, investors and prior servicers, net of $20 and $21 purchase discount, respectively | 162 | 173 | ||
Reserves | (206) | (208) | ||
Total advances and other receivables, net | 838 | 940 | ||
Servicing advances discount | 63 | 72 | $ 125 | $ 131 |
Receivables discount | $ 20 | $ 21 | $ 21 | $ 21 |
Advances and Other Receivable_3
Advances and Other Receivables - Advances and Other Receivables Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Advances And Other Receivables, Reserves [Roll Forward] | ||
Balance - beginning of period | $ 208 | $ 168 |
Provision and other additions | 15 | 30 |
Write-offs | (17) | (5) |
Balance - end of period | 206 | 193 |
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans | $ 12 | $ 10 |
Advances and Other Receivable_4
Advances and Other Receivables - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivable, allowance for credit loss | $ 39 | $ 23 |
Financial instruments collection period | 39 months | |
Advances and other receivables reserve | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Provision for credit loss | $ 1 | 6 |
Financing receivable, allowance for credit loss | 22 | 6 |
Purchase Discount | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivable, allowance for credit loss | $ 17 | $ 17 |
Advances and Other Receivable_5
Advances and Other Receivables - Purchase Discount (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Servicing Advances | ||
Balance - beginning of period | $ 72 | $ 131 |
Utilization of purchase discounts | (9) | (6) |
Balance - end of period | 63 | 125 |
Receivables from Agencies, Investors and Prior Servicers | ||
Balance - beginning of period | 20 | 21 |
Utilization of purchase discounts | (1) | 0 |
Balance - end of period | $ 21 | $ 21 |
Reverse Mortgage Interests - Sc
Reverse Mortgage Interests - Schedule of Reverse Mortgage Interest (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Reverse Mortgage Interests [Abstract] | ||||
Participating interests in HECM mortgage-backed securities (“HMBS”) | $ 3,304 | $ 3,471 | ||
Unsecuritized interests | 972 | 964 | ||
Other interests securitized | 908 | 945 | ||
Purchase discount, net | (93) | (127) | $ (129) | $ (114) |
Total reverse mortgage interests, net | $ 5,091 | $ 5,253 |
Reverse Mortgage Interests - Na
Reverse Mortgage Interests - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Interest income on reverse mortgages | $ 40 | $ 62 |
Participating Interests in HMBS | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
UPB securitized | 33 | 52 |
Reverse mortgage interests, unsecuritized | HECM | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Repurchase of HECM loans | 216 | 383 |
Repurchase of HECM loans funded by prior servicer | 66 | 103 |
Housing and urban development, home equity conversion mortgage loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unsecuritized interests | $ 137 | $ 266 |
Reverse Mortgage Interests - Un
Reverse Mortgage Interests - Unsecuritized Interest (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Reverse Mortgage Interest [Abstract] | ||
Repurchased HECM loans (exceeds 98% of their Max Claim Amount (“MCA”)) | $ 699 | $ 665 |
HECM related receivables | 180 | 208 |
Funded borrower draws not yet securitized | 77 | 72 |
Real estate owned (“REO”) related receivables | 16 | 19 |
Total unsecuritized interests | $ 972 | $ 964 |
Reverse Mortgage Interests - Pu
Reverse Mortgage Interests - Purchase Discount Rollforward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Purchase discount, net, for reverse mortgage interests | ||
Balance - beginning of period | $ (127) | $ (114) |
Utilization of purchase discounts | 35 | 10 |
Amortization, net of accretion | (1) | (25) |
Balance - end of period | $ (93) | $ (129) |
Mortgage Loans Held for Sale -
Mortgage Loans Held for Sale - Mortgage Loans Held for Sale (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Mortgage loans held for sale – UPB | $ 6,204 | $ 5,438 |
Mark-to-market adjustment | 147 | 282 |
Total mortgage loans held for sale | 6,351 | 5,720 |
UPB | 67 | 64 |
Fair Value | 54 | 54 |
Ginnie mae repurchased loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
UPB | $ 48 | $ 48 |
Mortgage Loans Held for Sale _2
Mortgage Loans Held for Sale - Reconciliation to Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward] | ||
Balance - beginning of period | $ 5,720 | $ 4,077 |
Loans sold | (26,734) | (13,510) |
Mortgage loans originated and purchased, net of fees | 25,214 | 12,375 |
Repurchase of loans out of Ginnie Mae securitizations | 2,255 | 919 |
Net change in unrealized (loss) gain on loans held for sale | (105) | 61 |
Net transfers of mortgage loans held for sale | 1 | 0 |
Balance - end of period | $ 6,351 | $ 3,922 |
Mortgage Loans Held for Sale _3
Mortgage Loans Held for Sale - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Mortgage Loans Held for Sale and Investment [Abstract] | |||
Sale of mortgage loans held for sale | $ 27,152 | $ 13,724 | |
Gain on sale of mortgage loans held for sale | 418 | $ 214 | |
Mortgage loans held for sale in foreclosure | $ 18 | $ 20 |
Loans Subject to Repurchase f_2
Loans Subject to Repurchase from Ginnie Mae (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans subject to repurchase from Ginnie Mae | $ 5,816 | $ 6,159 |
Financial Asset, Equal to or Greater than 90 Days Past Due | Payment Deferral | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans subject to repurchase from Ginnie Mae | $ 5,557 | $ 5,879 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 120 | $ 120 |
Intangible assets | $ 30 | $ 34 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Assets | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | $ 32,681 | $ 8,649 |
Fair Value | 526 | 294 |
Gains/(Losses) | 37 | 141 |
Assets | Loan sale commitments | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 2,341 | 2,598 |
Fair Value | 42 | 111 |
Gains/(Losses) | (60) | 79 |
Assets | IRLCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 8,950 | 6,923 |
Fair Value | 232 | 263 |
Gains/(Losses) | (182) | 128 |
Assets | LPCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 1,165 | 834 |
Fair Value | 8 | 25 |
Gains/(Losses) | (30) | 13 |
Assets | Forward MBS trades | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 22,566 | 886 |
Fair Value | 286 | 6 |
Gains/(Losses) | 249 | 0 |
Assets | Eurodollar futures | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 6 | |
Fair Value | 0 | |
Gains/(Losses) | 0 | |
Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 10,615 | 10,267 |
Derivative financial instruments | 116 | 223 |
Gains/(Losses) | (41) | 208 |
Liabilities | IRLCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 240 | 22 |
Derivative financial instruments | 1 | 0 |
Gains/(Losses) | 1 | 0 |
Liabilities | LPCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 3,974 | 10 |
Derivative financial instruments | 38 | 0 |
Gains/(Losses) | 37 | (3) |
Liabilities | Forward MBS trades | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 6,341 | 10,229 |
Derivative financial instruments | 76 | 223 |
Gains/(Losses) | (80) | 211 |
Liabilities | Swap futures | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 60 | |
Derivative financial instruments | 1 | |
Gains/(Losses) | $ 1 | |
Liabilities | Eurodollar futures | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 6 | |
Derivative financial instruments | 0 | |
Gains/(Losses) | $ 0 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Other assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Collateral deposit assets (liabilities) | $ 2 | $ 61 |
Payables and other liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Collateral deposit assets (liabilities) | $ (113) |
Indebtedness - Advance and Ware
Indebtedness - Advance and Warehouse Facilities Summary (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Debt Outstanding | $ 7,379,000,000 | $ 6,763,000,000 |
Originations | Mortgage loans held for sale | ||
Debt Instrument [Line Items] | ||
Collateral Pledged | 6,210,000,000 | 5,447,000,000 |
Debt Outstanding | 5,970,000,000 | 5,330,000,000 |
Originations | Reverse mortgage interests | ||
Debt Instrument [Line Items] | ||
Collateral Pledged | 614,000,000 | 606,000,000 |
Debt Outstanding | 510,000,000 | 505,000,000 |
Originations | MSR | ||
Debt Instrument [Line Items] | ||
Collateral Pledged | 1,827,000,000 | 1,217,000,000 |
Debt Outstanding | 270,000,000 | 270,000,000 |
Advance Facilities | Servicing | Loans payable | $875 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 875,000,000 | |
Debt outstanding, gross | 140,000,000 | 168,000,000 |
Collateral Pledged | $ 165,000,000 | 195,000,000 |
Advance Facilities | Servicing | Loans payable | $875 advance facility | CP rate | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.00% | |
Advance Facilities | Servicing | Loans payable | $875 advance facility | CP rate | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 6.50% | |
Advance Facilities | Servicing | Loans payable | $425 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 425,000,000 | |
Debt outstanding, gross | 197,000,000 | 192,000,000 |
Collateral Pledged | $ 250,000,000 | 246,000,000 |
Advance Facilities | Servicing | Loans payable | $425 advance facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.60% | |
Advance Facilities | Servicing | Loans payable | $425 advance facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 6.50% | |
Advance Facilities | Servicing | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | $ 638,000,000 | 669,000,000 |
Collateral Pledged | 806,000,000 | 844,000,000 |
Advance Facilities | Servicing | Notes payable to banks | $100 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 100,000,000 | |
Debt outstanding, gross | 70,000,000 | 74,000,000 |
Collateral Pledged | $ 92,000,000 | 98,000,000 |
Advance Facilities | Servicing | Notes payable to banks | $100 advance facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.50% | |
Warehouse Facilities | Originations | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | $ 6,480,000,000 | 5,835,000,000 |
Collateral Pledged | 6,824,000,000 | 6,053,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $2,000 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 2,000,000,000 | |
Debt outstanding, gross | 940,000,000 | 339,000,000 |
Collateral Pledged | $ 1,055,000,000 | 392,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $2,000 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.60% | |
Warehouse Facilities | Originations | Notes payable to banks | $2,000 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.00% | |
Warehouse Facilities | Originations | Notes payable to banks | $1,500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 1,500,000,000 | |
Debt outstanding, gross | 867,000,000 | 1,081,000,000 |
Collateral Pledged | $ 838,000,000 | 1,028,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $1,500 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.50% | |
Warehouse Facilities | Originations | Notes payable to banks | $2,500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 2,500,000,000 | 1,500,000,000 |
Debt outstanding, gross | 1,442,000,000 | 1,003,000,000 |
Collateral Pledged | $ 1,495,000,000 | 1,037,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $2,500 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.60% | |
Warehouse Facilities | Originations | Notes payable to banks | $2,500 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.90% | |
Warehouse Facilities | Originations | Notes payable to banks | $1,350 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 1,350,000,000 | |
Debt outstanding, gross | 918,000,000 | 1,067,000,000 |
Collateral Pledged | $ 990,000,000 | 1,128,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $1,350 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.70% | |
Warehouse Facilities | Originations | Notes payable to banks | $1,350 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.90% | |
Warehouse Facilities | Originations | Notes payable to banks | $1,200 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 1,200,000,000 | |
Debt outstanding, gross | 497,000,000 | 787,000,000 |
Collateral Pledged | $ 543,000,000 | 839,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $1,200 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.80% | |
Warehouse Facilities | Originations | Notes payable to banks | $1,200 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.00% | |
Warehouse Facilities | Originations | Notes payable to banks | $750 million warehouse | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 750,000,000 | |
Debt outstanding, gross | 535,000,000 | 562,000,000 |
Collateral Pledged | $ 549,000,000 | 574,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $750 million warehouse | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.70% | |
Warehouse Facilities | Originations | Notes payable to banks | $750 million warehouse | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.80% | |
Warehouse Facilities | Originations | Notes payable to banks | $750 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 750,000,000 | |
Debt outstanding, gross | 612,000,000 | 477,000,000 |
Collateral Pledged | $ 631,000,000 | 492,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $750 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.80% | |
Warehouse Facilities | Originations | Notes payable to banks | $750 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.30% | |
Warehouse Facilities | Originations | Notes payable to banks | $600 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 600,000,000 | |
Debt outstanding, gross | 332,000,000 | 187,000,000 |
Collateral Pledged | $ 374,000,000 | 222,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $600 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.50% | |
Warehouse Facilities | Originations | Notes payable to banks | $500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 500,000,000 | |
Debt outstanding, gross | 0 | 0 |
Collateral Pledged | $ 0 | 0 |
Warehouse Facilities | Originations | Notes payable to banks | $500 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.50% | |
Warehouse Facilities | Originations | Notes payable to banks | $500 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 4.00% | |
Warehouse Facilities | Originations | Notes payable to banks | $300 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 300,000,000 | |
Debt outstanding, gross | 129,000,000 | 163,000,000 |
Collateral Pledged | $ 130,000,000 | 164,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $300 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.40% | |
Warehouse Facilities | Originations | Notes payable to banks | $250 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 250,000,000 | |
Debt outstanding, gross | 1,000,000 | 0 |
Collateral Pledged | $ 1,000,000 | 0 |
Warehouse Facilities | Originations | Notes payable to banks | $250 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.40% | |
Warehouse Facilities | Originations | Notes payable to banks | $250 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.30% | |
Warehouse Facilities | Originations | Notes payable to banks | $200 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 200,000,000 | |
Debt outstanding, gross | 169,000,000 | 131,000,000 |
Collateral Pledged | $ 173,000,000 | 134,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $200 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.80% | |
Warehouse Facilities | Originations | Notes payable to banks | $50 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 50,000,000 | |
Debt outstanding, gross | 36,000,000 | 37,000,000 |
Collateral Pledged | $ 43,000,000 | 42,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $50 warehouse facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.80% | |
Warehouse Facilities | Originations | Notes payable to banks | $50 warehouse facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 4.80% | |
Warehouse Facilities | Originations | Notes payable to banks | $30 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 30,000,000 | 40,000,000 |
Debt outstanding, gross | 2,000,000 | 1,000,000 |
Collateral Pledged | $ 2,000,000 | 1,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $30 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.30% | |
Warehouse Facilities | Originations | Notes payable to banks | $1,500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 1,500,000,000 | |
MSR Facilities | Originations | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | 270,000,000 | 270,000,000 |
Collateral Pledged | 1,827,000,000 | 1,217,000,000 |
MSR Facilities | Originations | Notes payable to banks | $200 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 200,000,000 | |
Debt outstanding, gross | 0 | 0 |
Collateral Pledged | $ 471,000,000 | 247,000,000 |
MSR Facilities | Originations | Notes payable to banks | $200 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.50% | |
MSR Facilities | Originations | Notes payable to banks | $150 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 150,000,000 | |
Debt outstanding, gross | 0 | 0 |
Collateral Pledged | $ 438,000,000 | 228,000,000 |
MSR Facilities | Originations | Notes payable to banks | $150 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.80% | |
MSR Facilities | Originations | Notes payable to banks | $50 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 50,000,000 | |
Debt outstanding, gross | 10,000,000 | 10,000,000 |
Collateral Pledged | $ 80,000,000 | 74,000,000 |
MSR Facilities | Originations | Notes payable to banks | $50 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.30% | |
MSR Facilities | Originations | Notes payable to banks | $900 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 900,000,000 | |
Advance Financing, Internally Allocated | Servicing | Loans payable | $640 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 640,000,000 | |
Debt outstanding, gross | 231,000,000 | 235,000,000 |
Collateral Pledged | $ 299,000,000 | 305,000,000 |
Advance Financing, Internally Allocated | Servicing | Loans payable | $640 advance facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.90% | |
MSR Financing, Internally Allocated | Originations | Notes payable to banks | $260 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 260,000,000 | |
Debt outstanding, gross | 260,000,000 | 260,000,000 |
Collateral Pledged | $ 838,000,000 | 668,000,000 |
MSR Financing, Internally Allocated | Originations | Notes payable to banks | $260 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.90% | |
Advance, Warehouse and MSR Facilities | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (9,000,000) | (11,000,000) |
Debt Outstanding | 7,379,000,000 | 6,763,000,000 |
Advance, Warehouse and MSR Facilities | Originations | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | 7,388,000,000 | 6,774,000,000 |
Collateral Pledged | $ 9,457,000,000 | $ 8,114,000,000 |
Indebtedness - Summary of Unsec
Indebtedness - Summary of Unsecured Senior Notes (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Unsecured senior notes, net | $ 2,074,000,000 | $ 2,074,000,000 |
Unsecured Senior Notes | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | 2,100,000,000 | 2,100,000,000 |
Unamortized debt issuance costs | (26,000,000) | (26,000,000) |
Unsecured senior notes, net | 2,074,000,000 | 2,074,000,000 |
Unsecured Senior Notes | $850 Face Value, 5.500% interest payable semi-annually, due August 2028 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | 850,000,000 | 850,000,000 |
Face value | $ 850,000,000 | |
Interest Rate | 5.50% | |
Unsecured Senior Notes | $650 face value, 5.125% interest rate payable semi-annually, due December 2030 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 650,000,000 | 650,000,000 |
Face value | $ 650,000,000 | |
Interest Rate | 5.125% | |
Unsecured Senior Notes | $600 face value, 6.000% interest rate payable semi-annually, due January 2027 | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | $ 600,000,000 | $ 600,000,000 |
Face value | $ 600,000,000 | |
Interest Rate | 6.00% |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) - Unsecured Senior Notes - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Maximum percentage redeemable on unsecured debt | 40.00% | |
Repayments of debt | $ 100 | |
Amount of principal amount outstanding repaid | 598 | |
Gain on redemption of unsecured senior notes | $ 1 |
Indebtedness - Schedule of Note
Indebtedness - Schedule of Notes Maturity (Details) - Unsecured Senior Notes - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
2021 through 2025 | $ 0 | |
Thereafter | 2,100 | |
Total unsecured senior notes principal amount | $ 2,100 | $ 2,100 |
Indebtedness - Summary of Other
Indebtedness - Summary of Other Non-Recourse Debt (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Other nonrecourse debt principal amount | $ 4,221 | $ 4,424 |
Participating interest financing | Minimum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 0.30% | |
Participating interest financing | Maximum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 5.60% | |
Trust 2020-1 | Minimum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 1.30% | |
Trust 2020-1 | Maximum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 7.50% | |
Trust 2019-2 | Minimum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.30% | |
Trust 2019-2 | Maximum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 6.00% | |
Trust 2019-1 | Minimum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 2.70% | |
Trust 2019-1 | Maximum | ||
Debt Instrument [Line Items] | ||
Interest Rate | 6.00% | |
Nonrecourse debt–legacy assets | ||
Debt Instrument [Line Items] | ||
Other nonrecourse debt principal amount | $ 4,221 | 4,424 |
Unamortized premium, net of debt issuance costs and discount | 9 | 8 |
Nonrecourse debt–legacy assets | Participating interest financing | ||
Debt Instrument [Line Items] | ||
Collateral Amount | 0 | |
Other nonrecourse debt principal amount | 3,306 | 3,473 |
Nonrecourse debt–legacy assets | Trust 2020-1 | ||
Debt Instrument [Line Items] | ||
Collateral Amount | 489 | |
Other nonrecourse debt principal amount | 471 | 490 |
Nonrecourse debt–legacy assets | Trust 2019-2 | ||
Debt Instrument [Line Items] | ||
Collateral Amount | 254 | |
Other nonrecourse debt principal amount | 232 | 241 |
Nonrecourse debt–legacy assets | Trust 2019-1 | ||
Debt Instrument [Line Items] | ||
Collateral Amount | 231 | |
Other nonrecourse debt principal amount | 203 | 212 |
Nonrecourse debt–legacy assets | Other nonrecourse debt | ||
Debt Instrument [Line Items] | ||
Other nonrecourse debt principal amount | $ 4,212 | $ 4,416 |
Securitizations and Financing_2
Securitizations and Financings - Assets and Liabilities of Consolidated VIEs (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Purchase discount | $ 53 | $ 61 |
Residential mortgage | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets - transfers accounted for as secured borrowings | 495 | 488 |
Assets - reverse secured borrowings | 4,186 | 4,379 |
Liabilities - transfers accounted for as secured borrowings | 337 | 359 |
Liabilities - reverse secured borrowings | 4,212 | 4,416 |
Residential mortgage | Restricted cash | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets - transfers accounted for as secured borrowings | 80 | 47 |
Assets - reverse secured borrowings | 27 | 23 |
Residential mortgage | Advances and other receivables, net | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets - transfers accounted for as secured borrowings | 415 | 441 |
Assets - reverse secured borrowings | 0 | 0 |
Residential mortgage | Reverse mortgage interests | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets - transfers accounted for as secured borrowings | 0 | 0 |
Assets - reverse secured borrowings | 4,159 | 4,356 |
Residential mortgage | Advance facilities | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities - transfers accounted for as secured borrowings | 337 | 358 |
Liabilities - reverse secured borrowings | 0 | 0 |
Residential mortgage | Payables and other liabilities | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities - transfers accounted for as secured borrowings | 0 | 1 |
Liabilities - reverse secured borrowings | 0 | 0 |
Residential mortgage | Participating interest financing | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities - transfers accounted for as secured borrowings | 0 | 0 |
Liabilities - reverse secured borrowings | 3,306 | 3,473 |
Residential mortgage | Trust 2020-1 | HECM Securitizations (HMBS) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities - transfers accounted for as secured borrowings | 0 | 0 |
Liabilities - reverse secured borrowings | 471 | 490 |
Residential mortgage | Trust 2019-2 | HECM Securitizations (HMBS) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities - transfers accounted for as secured borrowings | 0 | 0 |
Liabilities - reverse secured borrowings | 232 | 241 |
Residential mortgage | Trust 2019-1 | HECM Securitizations (HMBS) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities - transfers accounted for as secured borrowings | 0 | 0 |
Liabilities - reverse secured borrowings | $ 203 | $ 212 |
Securitizations and Financing_3
Securitizations and Financings - Securitization Trusts (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Variable Interest Entities and Securitizations [Abstract] | ||
Total collateral balances - UPB | $ 1,283 | $ 1,326 |
Total certificate balances | 1,281 | 1,329 |
Unconsolidated securitization trusts | $ 147 | $ 154 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) $ / shares in Units, shares in Thousands, $ in Millions | Mar. 26, 2021USD ($)$ / sharesshares |
Earnings Per Share [Abstract] | |
Shares repurchased (in shares) | shares | 3,700 |
Value of shares repurchased | $ | $ 119 |
Value of shares repurchased (in dollars per share) | $ / shares | $ 32.25 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to Mr. Cooper | $ 561 | $ (168) |
Less: Undistributed earnings attributable to participating stockholders | 5 | 0 |
Net income (loss) attributable to common stockholders | $ 556 | $ (168) |
Net income (loss) per common share attributable to Mr. Cooper: | ||
Basic (in dollars per share) | $ 6.22 | $ (1.84) |
Diluted (in dollars per share) | $ 5.92 | $ (1.84) |
Weighted average shares of common stock outstanding (in thousands): | ||
Basic (in shares) | 89,458 | 91,385 |
Dilutive effect of stock awards (in shares) | 3,590 | 0 |
Dilutive effect of participating securities (in shares) | 839 | 0 |
Diluted (in shares) | 93,887 | 91,385 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 22.90% | 28.40% |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Mortgage loans held for sale | $ 6,351 | $ 5,720 |
Forward mortgage servicing rights | 3,354 | 2,703 |
Liabilities | ||
Mortgage servicing rights financing | 23 | 33 |
Recurring Fair Value Measurements | ||
Assets | ||
Mortgage loans held for sale | 6,351 | 5,720 |
Forward mortgage servicing rights | 3,354 | 2,703 |
Liabilities | ||
Mortgage servicing rights financing | 23 | 33 |
Excess spread financing | 934 | 934 |
Recurring Fair Value Measurements | IRLCs | ||
Assets | ||
Derivative asset, fair value | 232 | 414 |
Liabilities | ||
Derivative financial instruments | 1 | |
Recurring Fair Value Measurements | Forward MBS trades | ||
Assets | ||
Derivative asset, fair value | 286 | 37 |
Liabilities | ||
Derivative financial instruments | 76 | 156 |
Recurring Fair Value Measurements | LPCs | ||
Assets | ||
Derivative asset, fair value | 8 | 38 |
Liabilities | ||
Derivative financial instruments | 38 | 1 |
Recurring Fair Value Measurements | Swap futures | ||
Liabilities | ||
Derivative financial instruments | 1 | |
Recurring Fair Value Measurements | Level 1 | ||
Assets | ||
Mortgage loans held for sale | 0 | 0 |
Forward mortgage servicing rights | 0 | 0 |
Liabilities | ||
Mortgage servicing rights financing | 0 | 0 |
Excess spread financing | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | IRLCs | ||
Assets | ||
Derivative asset, fair value | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | |
Recurring Fair Value Measurements | Level 1 | Forward MBS trades | ||
Assets | ||
Derivative asset, fair value | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | LPCs | ||
Assets | ||
Derivative asset, fair value | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | Swap futures | ||
Liabilities | ||
Derivative financial instruments | 0 | |
Recurring Fair Value Measurements | Level 2 | ||
Assets | ||
Mortgage loans held for sale | 6,351 | 5,720 |
Forward mortgage servicing rights | 0 | 0 |
Liabilities | ||
Mortgage servicing rights financing | 0 | 0 |
Excess spread financing | 0 | 0 |
Recurring Fair Value Measurements | Level 2 | IRLCs | ||
Assets | ||
Derivative asset, fair value | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | |
Recurring Fair Value Measurements | Level 2 | Forward MBS trades | ||
Assets | ||
Derivative asset, fair value | 286 | 37 |
Liabilities | ||
Derivative financial instruments | 76 | 156 |
Recurring Fair Value Measurements | Level 2 | LPCs | ||
Assets | ||
Derivative asset, fair value | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 2 | Swap futures | ||
Liabilities | ||
Derivative financial instruments | 1 | |
Recurring Fair Value Measurements | Level 3 | ||
Assets | ||
Mortgage loans held for sale | 0 | 0 |
Forward mortgage servicing rights | 3,354 | 2,703 |
Liabilities | ||
Mortgage servicing rights financing | 23 | 33 |
Excess spread financing | 934 | 934 |
Recurring Fair Value Measurements | Level 3 | IRLCs | ||
Assets | ||
Derivative asset, fair value | 232 | 414 |
Liabilities | ||
Derivative financial instruments | 1 | |
Recurring Fair Value Measurements | Level 3 | Forward MBS trades | ||
Assets | ||
Derivative asset, fair value | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 3 | LPCs | ||
Assets | ||
Derivative asset, fair value | 8 | 38 |
Liabilities | ||
Derivative financial instruments | 38 | $ 1 |
Recurring Fair Value Measurements | Level 3 | Swap futures | ||
Liabilities | ||
Derivative financial instruments | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Reconciliation (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Excess spread financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | $ 934 | $ 1,311 |
Total gains or losses included in earnings | 41 | (35) |
Purchases | 0 | 0 |
Issuances | 0 | 24 |
Sales | 0 | |
Settlements and repayments | (41) | (58) |
Balance - end of period | 934 | 1,242 |
Mortgage servicing rights financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 33 | 37 |
Total gains or losses included in earnings | (10) | 6 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | |
Settlements and repayments | 0 | 0 |
Balance - end of period | 23 | 43 |
LPCs | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 1 | |
Total gains or losses included in earnings | 37 | |
Purchases | 0 | |
Issuances | 0 | |
Sales | 0 | |
Settlements and repayments | 0 | |
Balance - end of period | 38 | |
Forward mortgage servicing rights | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 2,703 | 3,496 |
Total gains or losses included in earnings | 298 | (534) |
Purchases | 67 | 24 |
Issuances | 288 | 123 |
Sales | (2) | |
Settlements and repayments | 0 | 0 |
Balance - end of period | 3,354 | $ 3,109 |
IRLCs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 414 | |
Total gains or losses included in earnings | (182) | |
Purchases | 0 | |
Issuances | 0 | |
Sales | 0 | |
Settlements and repayments | 0 | |
Balance - end of period | 232 | |
LPCs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 38 | |
Total gains or losses included in earnings | (30) | |
Purchases | 0 | |
Issuances | 0 | |
Sales | 0 | |
Settlements and repayments | 0 | |
Balance - end of period | $ 8 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable Inputs (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted average life | 5 years 10 months 24 days | 5 years |
Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted average life | 5 years 8 months 12 days | 5 years 1 month 6 days |
Minimum | Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 8.20% | 8.20% |
Prepayment speed | 10.50% | 14.20% |
Cost to service per loan | $ 64 | $ 66 |
Minimum | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | (0.00013) | (0.00010) |
Minimum | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 9.60% | 9.90% |
Prepayment speed | 11.30% | 13.90% |
Recapture rate | 17.10% | 17.70% |
Minimum | MSR financing liability | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 4.10% | 4.60% |
Annual advance recovery rates | 18.10% | 18.30% |
Maximum | Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 12.00% | 12.00% |
Prepayment speed | 17.70% | 21.30% |
Cost to service per loan | $ 226 | $ 257 |
Maximum | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | 0.00022 | 0.00022 |
Maximum | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 15.70% | 15.70% |
Prepayment speed | 14.60% | 15.00% |
Recapture rate | 23.10% | 24.20% |
Maximum | MSR financing liability | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 8.40% | 8.50% |
Annual advance recovery rates | 22.00% | 22.00% |
Weighted-average | Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 9.30% | 9.40% |
Prepayment speed | 12.40% | 15.40% |
Cost to service per loan | $ 92 | $ 98 |
Weighted-average | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | 0.00012 | 0.00012 |
Weighted-average | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 11.90% | 12.20% |
Prepayment speed | 12.50% | 14.40% |
Recapture rate | 19.00% | 19.50% |
Weighted-average | MSR financing liability | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 7.40% | 7.50% |
Annual advance recovery rates | 19.90% | 19.90% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Balance Sheet Line Item (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Financial assets | ||
Reverse mortgage interests, net | $ 5,091 | $ 5,253 |
Loans subject to repurchase from Ginnie Mae | 5,816 | 6,159 |
Financial liabilities | ||
Unsecured senior notes, net | 2,074 | 2,074 |
Advance and warehouse facilities, net | 7,379 | 6,763 |
Other nonrecourse debt | 4,221 | 4,424 |
Recurring Fair Value Measurements | ||
Financial assets | ||
Cash and cash equivalents | 674 | 695 |
Restricted cash | 261 | 218 |
Loans subject to repurchase from Ginnie Mae | 5,816 | 6,159 |
Financial liabilities | ||
Unsecured senior notes, net | 2,074 | 2,074 |
Advance and warehouse facilities, net | 7,379 | 6,763 |
Liability for loans subject to repurchase from Ginnie Mae | 5,816 | 6,159 |
Recurring Fair Value Measurements | Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 674 | 695 |
Restricted cash | 261 | 218 |
Loans subject to repurchase from Ginnie Mae | 0 | 0 |
Financial liabilities | ||
Unsecured senior notes, net | 2,120 | 2,208 |
Advance and warehouse facilities, net | 0 | 0 |
Liability for loans subject to repurchase from Ginnie Mae | 0 | 0 |
Recurring Fair Value Measurements | Level 2 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Loans subject to repurchase from Ginnie Mae | 5,816 | 6,159 |
Financial liabilities | ||
Unsecured senior notes, net | 0 | 0 |
Advance and warehouse facilities, net | 7,388 | 6,774 |
Liability for loans subject to repurchase from Ginnie Mae | 5,816 | 6,159 |
Recurring Fair Value Measurements | Level 3 | ||
Financial assets | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash | 0 | 0 |
Loans subject to repurchase from Ginnie Mae | 0 | 0 |
Financial liabilities | ||
Unsecured senior notes, net | 0 | 0 |
Advance and warehouse facilities, net | 0 | 0 |
Liability for loans subject to repurchase from Ginnie Mae | 0 | 0 |
Nonrecurring Fair Value Measurements | ||
Financial assets | ||
Advances and other receivables, net | 838 | 940 |
Reverse mortgage interests, net | 5,091 | 5,253 |
Nonrecurring Fair Value Measurements | Participating interest financing | ||
Financial liabilities | ||
Other nonrecourse debt | 3,318 | 3,485 |
Nonrecurring Fair Value Measurements | Trust 2020-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 469 | 488 |
Nonrecurring Fair Value Measurements | Trust 2019-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 231 | 240 |
Nonrecurring Fair Value Measurements | Trust 2019-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 203 | 211 |
Nonrecurring Fair Value Measurements | Level 1 | ||
Financial assets | ||
Advances and other receivables, net | 0 | 0 |
Reverse mortgage interests, net | 0 | 0 |
Nonrecurring Fair Value Measurements | Level 1 | Participating interest financing | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Nonrecurring Fair Value Measurements | Level 1 | Trust 2020-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Nonrecurring Fair Value Measurements | Level 1 | Trust 2019-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Nonrecurring Fair Value Measurements | Level 1 | Trust 2019-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Nonrecurring Fair Value Measurements | Level 2 | ||
Financial assets | ||
Advances and other receivables, net | 0 | 0 |
Reverse mortgage interests, net | 0 | 0 |
Nonrecurring Fair Value Measurements | Level 2 | Participating interest financing | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Nonrecurring Fair Value Measurements | Level 2 | Trust 2020-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Nonrecurring Fair Value Measurements | Level 2 | Trust 2019-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Nonrecurring Fair Value Measurements | Level 2 | Trust 2019-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 0 | 0 |
Nonrecurring Fair Value Measurements | Level 3 | ||
Financial assets | ||
Advances and other receivables, net | 838 | 940 |
Reverse mortgage interests, net | 5,166 | 5,383 |
Nonrecurring Fair Value Measurements | Level 3 | Participating interest financing | ||
Financial liabilities | ||
Other nonrecourse debt | 3,319 | 3,496 |
Nonrecurring Fair Value Measurements | Level 3 | Trust 2020-1 | ||
Financial liabilities | ||
Other nonrecourse debt | 471 | 490 |
Nonrecurring Fair Value Measurements | Level 3 | Trust 2019-2 | ||
Financial liabilities | ||
Other nonrecourse debt | 231 | 241 |
Nonrecurring Fair Value Measurements | Level 3 | Trust 2019-1 | ||
Financial liabilities | ||
Other nonrecourse debt | $ 203 | $ 212 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Loss Contingencies [Line Items] | |||
Legal fees | $ 13 | $ 15 | |
Reverse mortgage servicing rights, excluding subservicing | |||
Loss Contingencies [Line Items] | |||
UPB | 17,269 | $ 18,091 | |
Warehouse facilities, net of unamortized debt issuance costs | |||
Loss Contingencies [Line Items] | |||
Unfunded advance obligations | 2,113 | $ 2,202 | |
Litigation and regulatory matters | Minimum | |||
Loss Contingencies [Line Items] | |||
Estimate of possible loss | 2 | ||
Litigation and regulatory matters | Maximum | |||
Loss Contingencies [Line Items] | |||
Estimate of possible loss | $ 18 |
Segment Information - Financial
Segment Information - Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Revenues: | |||
Service related, net | $ 588 | $ (53) | |
Net gain on mortgage loans held for sale | 679 | 331 | |
Total revenues | 1,267 | 278 | |
Total expenses | 469 | 444 | |
Other income (expenses) | |||
Interest income | 89 | 118 | |
Interest expense | (159) | (192) | |
Other income, net | 0 | 1 | |
Total other expenses, net | (70) | (73) | |
Income (loss) before income tax expense (benefit) | 728 | (239) | |
Depreciation and amortization for property and equipment and intangible assets | 16 | 19 | |
Total assets | 24,713 | 17,613 | $ 24,165 |
Operating Segments | Servicing | |||
Revenues: | |||
Service related, net | 449 | (180) | |
Net gain on mortgage loans held for sale | 127 | 34 | |
Total revenues | 576 | (146) | |
Total expenses | 125 | 149 | |
Other income (expenses) | |||
Interest income | 66 | 83 | |
Interest expense | (104) | (113) | |
Other income, net | 0 | ||
Total other expenses, net | (38) | (30) | |
Income (loss) before income tax expense (benefit) | 413 | (325) | |
Depreciation and amortization for property and equipment and intangible assets | 5 | 3 | |
Total assets | 16,696 | 10,619 | |
Operating Segments | Originations | |||
Revenues: | |||
Service related, net | 43 | 20 | |
Net gain on mortgage loans held for sale | 552 | 297 | |
Total revenues | 595 | 317 | |
Total expenses | 231 | 166 | |
Other income (expenses) | |||
Interest income | 23 | 34 | |
Interest expense | (25) | (27) | |
Other income, net | 0 | ||
Total other expenses, net | (2) | 7 | |
Income (loss) before income tax expense (benefit) | 362 | 158 | |
Depreciation and amortization for property and equipment and intangible assets | 4 | 3 | |
Total assets | 5,559 | 4,459 | |
Operating Segments | Xome | |||
Revenues: | |||
Service related, net | 96 | 106 | |
Net gain on mortgage loans held for sale | 0 | 0 | |
Total revenues | 96 | 106 | |
Total expenses | 87 | 96 | |
Other income (expenses) | |||
Interest income | 0 | 0 | |
Interest expense | 0 | 0 | |
Other income, net | 1 | ||
Total other expenses, net | 0 | 1 | |
Income (loss) before income tax expense (benefit) | 9 | 11 | |
Depreciation and amortization for property and equipment and intangible assets | 3 | 3 | |
Total assets | 120 | 135 | |
Corporate/Other | |||
Revenues: | |||
Service related, net | 0 | 1 | |
Net gain on mortgage loans held for sale | 0 | 0 | |
Total revenues | 0 | 1 | |
Total expenses | 26 | 33 | |
Other income (expenses) | |||
Interest income | 0 | 1 | |
Interest expense | (30) | (52) | |
Other income, net | 0 | ||
Total other expenses, net | (30) | (51) | |
Income (loss) before income tax expense (benefit) | (56) | (83) | |
Depreciation and amortization for property and equipment and intangible assets | 4 | 10 | |
Total assets | $ 2,338 | $ 2,400 |
Uncategorized Items - nsm-20210
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201613Member |