Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 22, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 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, $0.01 par value per share | |
Trading Symbol | COOP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 75,122,633 | |
Entity Central Index Key | 0000933136 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 731 | $ 695 |
Restricted cash | 118 | 135 |
Mortgage servicing rights at fair value | 3,666 | 2,703 |
Advances and other receivables, net of reserves of $172 and $208, respectively | 909 | 940 |
Mortgage loans held for sale at fair value | 7,939 | 5,720 |
Property and equipment, net of accumulated depreciation of $115 and $92, respectively | 103 | 113 |
Deferred tax assets, net | 1,011 | 1,339 |
Other assets | 3,462 | 7,173 |
Assets of discontinued operations | 3,722 | 5,347 |
Total assets | 21,661 | 24,165 |
Liabilities and Stockholders’ Equity | ||
Unsecured senior notes, net | 2,076 | 2,074 |
Advance and warehouse facilities, net | 8,206 | 6,258 |
Payables and other liabilities | 3,537 | 7,159 |
MSR related liabilities - nonrecourse at fair value | 842 | 967 |
Liabilities of discontinued operations | 3,740 | 5,203 |
Total liabilities | 18,401 | 21,661 |
Commitments and contingencies (Note 15) | ||
Preferred stock at $0.00001 - 10 million shares authorized, zero and 1.0 million shares issued, zero and 1.0 million shares outstanding, respectively; aggregate liquidation preference of zero and 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 | 1,108 | 1,126 |
Retained earnings | 2,724 | 1,434 |
Treasury shares at cost - 18.1 million and 2.6 million shares, respectively | (574) | (58) |
Total Mr. Cooper stockholders’ equity | 3,259 | 2,503 |
Non-controlling interests | 1 | 1 |
Total stockholders’ equity | 3,260 | 2,504 |
Total liabilities and stockholders’ equity | $ 21,661 | $ 24,165 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Advances and other receivables, reserves | $ 172,000,000 | $ 208,000,000 |
Accumulated depreciation | $ 115,000,000 | $ 92,000,000 |
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) | 0 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 1,000,000 |
Preferred stock, liquidation preference | $ 0 | $ 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) | 18,100,000 | 2,600,000 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Service related, net | $ 288 | $ 218 | $ 860 | $ 151 |
Net gain on mortgage loans held for sale | 572 | 645 | 1,833 | 1,594 |
Total revenues | 860 | 863 | 2,693 | 1,745 |
Expenses: | ||||
Salaries, wages and benefits | 251 | 265 | 805 | 737 |
General and administrative | 151 | 190 | 476 | 540 |
Total expenses | 402 | 455 | 1,281 | 1,277 |
Interest income | 66 | 17 | 163 | 114 |
Interest expense | (118) | (128) | (363) | (394) |
Other income (expense), net | 8 | (51) | 494 | (50) |
Total other (expense) income, net | (44) | (162) | 294 | (330) |
Income (loss) from continuing operations before income tax expense (benefit) | 414 | 246 | 1,706 | 138 |
Less: Income tax expense | 104 | 59 | 410 | 33 |
Net income from continuing operations | 310 | 187 | 1,296 | 105 |
Net (loss) income from discontinued operations | (11) | 27 | 3 | 11 |
Net income | 299 | 214 | 1,299 | 116 |
Less: Net earnings attributable to non-controlling interests | 0 | 5 | 0 | 2 |
Net income attributable to Mr. Cooper | 299 | 209 | 1,299 | 114 |
Less: Undistributed earnings attributable to participating stockholders | 1 | 2 | 9 | 1 |
Less: Premium on retirement of preferred stock | 28 | 0 | 28 | 0 |
Net income attributable to common stockholders | $ 270 | $ 207 | $ 1,262 | $ 113 |
Earnings Per Share [Abstract] | ||||
Income (Loss) from Continuing Operations, Per Basic Share | $ 3.56 | $ 1.98 | $ 14.85 | $ 1.12 |
Income (Loss) from Continuing Operations, Per Diluted Share | 3.42 | 1.91 | 14.20 | 1.09 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | (0.14) | 0.28 | 0.04 | 0.11 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | (0.13) | 0.27 | 0.03 | 0.11 |
Basic (in dollars per share) | 3.42 | 2.26 | 14.89 | 1.23 |
Diluted (in dollars per share) | $ 3.29 | $ 2.18 | $ 14.23 | $ 1.20 |
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 | $ 0 | $ 1 | $ 1,109 | $ 1,122 | $ 0 | $ 2,232 | $ (1) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 923 | ||||||||||
Shares issued / (surrendered) under incentive compensation plan | (5) | (5) | (5) | ||||||||
Share-based compensation | 16 | 16 | 16 | ||||||||
Repurchase of common stock (in shares) | (1,187) | ||||||||||
Repurchase of common stock | (24) | (24) | (24) | ||||||||
Net income | 116 | 114 | 114 | 2 | |||||||
Shares outstanding, ending balance (in shares) at Sep. 30, 2020 | 1,000 | 90,854 | |||||||||
Stockholders' equity, ending balance at Sep. 30, 2020 | 2,341 | $ 7 | $ 0 | $ 1 | 1,120 | 1,243 | $ 7 | (24) | 2,340 | $ 7 | 1 |
Shares outstanding, beginning balance (in shares) at Jun. 30, 2020 | 1,000 | 92,022 | |||||||||
Stockholders' equity, beginning balance at Jun. 30, 2020 | 2,145 | $ 0 | $ 1 | 1,114 | 1,034 | 0 | 2,149 | (4) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 19 | ||||||||||
Shares issued / (surrendered) under incentive compensation plan | 0 | 0 | 0 | ||||||||
Share-based compensation | 6 | 6 | 6 | ||||||||
Repurchase of common stock (in shares) | (1,187) | ||||||||||
Repurchase of common stock | (24) | (24) | (24) | ||||||||
Net income | 214 | 209 | 209 | 5 | |||||||
Shares outstanding, ending balance (in shares) at Sep. 30, 2020 | 1,000 | 90,854 | |||||||||
Stockholders' equity, ending balance at Sep. 30, 2020 | 2,341 | $ 7 | $ 0 | $ 1 | 1,120 | 1,243 | $ 7 | (24) | 2,340 | $ 7 | 1 |
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) | 1,242 | ||||||||||
Shares issued / (surrendered) under incentive compensation plan | (20) | (20) | (20) | ||||||||
Share-based compensation | 21 | 21 | 21 | ||||||||
Repurchase of common stock (in shares) | (15,578) | ||||||||||
Repurchase of common stock | (516) | (516) | (516) | ||||||||
Stock Repurchased and Retired During Period, Shares | (1,000) | ||||||||||
Stock Repurchased and Retired During Period, Value | (28) | (19) | (9) | (28) | |||||||
Net income | 1,299 | 1,299 | 1,299 | 0 | |||||||
Shares outstanding, ending balance (in shares) at Sep. 30, 2021 | 0 | 75,121 | |||||||||
Stockholders' equity, ending balance at Sep. 30, 2021 | 3,260 | $ 0 | $ 1 | 1,108 | 2,724 | (574) | 3,259 | 1 | |||
Shares outstanding, beginning balance (in shares) at Jun. 30, 2021 | 1,000 | 86,149 | |||||||||
Stockholders' equity, beginning balance at Jun. 30, 2021 | 3,350 | $ 0 | $ 1 | 1,120 | 2,434 | (206) | 3,349 | 1 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 45 | ||||||||||
Shares issued / (surrendered) under incentive compensation plan | 0 | 0 | 0 | ||||||||
Share-based compensation | 7 | 7 | 7 | ||||||||
Repurchase of common stock (in shares) | (11,073) | ||||||||||
Repurchase of common stock | (368) | (368) | (368) | ||||||||
Stock Repurchased and Retired During Period, Shares | (1,000) | ||||||||||
Stock Repurchased and Retired During Period, Value | (28) | (19) | (9) | (28) | |||||||
Net income | 299 | 299 | 299 | 0 | |||||||
Shares outstanding, ending balance (in shares) at Sep. 30, 2021 | 0 | 75,121 | |||||||||
Stockholders' equity, ending balance at Sep. 30, 2021 | $ 3,260 | $ 0 | $ 1 | $ 1,108 | $ 2,724 | $ (574) | $ 3,259 | $ 1 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
Operating Activities | |||
Net income | $ 1,299 | $ 116 | |
Net (loss) income from discontinued operations | 3 | 11 | |
Net income from continuing operations | 1,296 | 105 | |
Adjustments to reconcile net income from continuing operations to net cash attributable to operating activities: | |||
Deferred tax expense (benefit) | 327 | (1) | |
Net gain on mortgage loans held for sale | (1,833) | (1,594) | |
Provision for servicing and non-servicing reserves | 28 | 18 | |
Fair value changes and amortization of mortgage servicing rights | 296 | 1,332 | |
Fair value changes in MSR related liabilities | (7) | (122) | |
Depreciation and amortization for property and equipment and intangible assets | 45 | 55 | |
Gain on sale of business | (494) | 0 | |
Loss on redemption of unsecured senior notes | 0 | 52 | |
Other operating activities | 36 | 45 | |
Repurchases of forward loan assets out of Ginnie Mae securitizations | (8,530) | (3,173) | |
Mortgage loans originated and purchased for sale, net of fees | (67,507) | (38,709) | |
Sales proceeds and loan payment proceeds for mortgage loans held for sale | 74,948 | 43,046 | |
Changes in assets and liabilities: | |||
Advances and other receivables | (41) | 172 | |
Other assets | 46 | 31 | |
Payables and other liabilities | 7 | (157) | |
Net cash attributable to operating activities - continuing operations | (1,383) | 1,100 | |
Net cash attributable to operating activities - discontinued operations | 613 | 778 | |
Net cash attributable to operating activities | (770) | 1,878 | |
Investing Activities | |||
Sale of business, net of cash divested | 432 | 0 | |
Property and equipment additions, net of disposals | (33) | (43) | |
Purchase of forward mortgage servicing rights | (431) | (39) | |
Proceeds on sale of forward mortgage servicing rights | 13 | 44 | |
Other investing activities | 1 | 0 | |
Net cash attributable to investing activities - continuing operations | (18) | (38) | |
Net cash attributable to investing activities - discontinued operations | 1,029 | 0 | |
Net cash attributable to investing activities | 1,011 | (38) | |
Financing Activities | |||
Increase (decrease) in advance and warehouse facilities | 1,950 | (14) | |
Settlements and repayments of excess spread financing | (118) | (159) | |
Issuance of unsecured senior notes | 0 | 1,450 | |
Redemption and repayment of unsecured senior notes | 0 | (1,686) | |
Repurchase of common stock | (516) | (24) | |
Retirement of preferred stock | (28) | 0 | |
Other financing activities | (33) | (21) | |
Net cash attributable to financing activities - continuing operations | 1,255 | (454) | |
Net cash attributable to financing activities - discontinued operations | (1,495) | (823) | |
Net cash attributable to financing activities | (240) | (1,277) | |
Net increase in cash, cash equivalents, and restricted cash | 1 | 563 | |
Cash, cash equivalents, and restricted cash - beginning of period | 913 | 612 | |
Cash, cash equivalents, and restricted cash - end of period(1) | [1] | 914 | 1,175 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |||
Equity consideration received from sale of business | 53 | 0 | |
Purchase of forward mortgage servicing rights | 12 | 0 | |
Forward mortgage servicing rights sales price holdback | $ 2 | $ 0 | |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets. September 30, 2021 September 30, 2020 Cash and cash equivalents $ 731 $ 946 Restricted cash 118 152 Restricted cash within assets of discontinued operations 65 77 Total cash, cash equivalents, and restricted cash $ 914 $ 1,175 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Cash Flows [Abstract] | |||
Cash and cash equivalents | $ 731 | $ 946 | |
Restricted cash | 118 | 152 | |
Restricted cash within assets of discontinued operations | 65 | 77 | |
Total cash, cash equivalents, and restricted cash | [1] | $ 914 | $ 1,175 |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets. September 30, 2021 September 30, 2020 Cash and cash equivalents $ 731 $ 946 Restricted cash 118 152 Restricted cash within assets of discontinued operations 65 77 Total cash, cash equivalents, and restricted cash $ 914 $ 1,175 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 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 to sell its Xome Title business to Blend Labs, Inc. (“Blend Labs”) for a total consideration of approximately $500, consisting of approximately $450 in cash, subject to certain adjustments specified therein, and a retained interest of 9.9% for the Company (the “Title Transaction”). The Title Transaction was completed on June 30, 2021. Pursuant to the Stock Purchase Agreement, all cash generated, subject to certain adjustments, between March 13, 2021 and the closing date of the Title Transaction, were held for the benefit of Blend Labs. A $487 gain was recorded in the second quarter of 2021 upon closing of the Title Transaction, which was included in other income, net within the condensed consolidated statements of operations. In addition, the Company recorded total transaction costs of $2 and $7 for the three and nine months ended September 30, 2021, respectively . The results of the Title business are reported under Corporate/Other in Note 16, Segment Information . The carrying amounts of assets and liabilities associated with the Title business were not material to the condensed consolidated balance sheets as of December 31, 2020. On July 1, 2021, the Company entered into a definitive agreement for the sale of its reverse servicing portfolio, operating under the Champion Mortgage brand (“Champion”), to Mortgage Assets Management, LLC and its affiliates (“MAM”). The reverse servicing operation was previously reported in the Company’s Servicing segment. The Company determined t he sale of the reverse servicing portfolio qualified for reporting as discontinued operations as of June 30, 2021, and for the unsold portion, the operations continue to meet the criteria. As a result, t he reverse servicing operation is presented as discontinued operations in the Company’s condensed consolidated statements of operations and the assets and liabilities of the reverse servicing operation are presented as discontinued operations in the Company’s condensed consolidated balance sheets for all periods presented. Unless otherwise indicated, information in this report relates to the Company’s continuing operations. Refer to Note 2, Discontinued Operations for further details. On August 31, 2021, the Company completed the sale of its Xome Valuations business (the “Valuations Transaction”) to Voxtur Analytics Corp. (“Voxtur”) for a total consideration of approximately $16, consisting of approximately $9 in cash and a number of Voxtur common stock with an aggregate value of $7. A $7 gain was recorded in the third quarter of 2021 upon the closing of the Valuations Transaction and was included in other income, net within the condensed consolidated statements of operations. There were no transaction costs recorded for the three and nine months ended September 30, 2021. The results of the Valuations business are reported under Corporate/Other in Note 16, Segment Information . The carrying amounts of assets and liabilities associated with the Valuations business were not material to the condensed consolidated balance sheets as of December 31, 2020. On October 22, 2021, the Company completed the sale of its Xome Field Services business (the “Field Services Transaction”) to Cyprexx Services LLC for a total consideration of approximately $41, consisting of $36 in cash and a retained interest of 10% for the Company. The sale is expected to generate a $33 gain. There were no transaction costs recorded for the three and nine months ended September 30, 2021. The results of the Field Services business are reported under Corporate/Other in Note 16, Segment Information . The carrying amounts of assets and liabilities associated with the Field Services business were not material to the condensed consolidated balance sheets as of December 31, 2020. Basis of Presentation The interim condensed consolidated 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. Reclassifications Certain reclassifications have been made in the 2020 condensed consolidated financial statements to conform to 2021 presentation. Such reclassifications did not affect total revenues or net income. Recent Accounting Guidance Adopted Accounting Standards Update 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes |
Discontinued Operations and Dis
Discontinued Operations and Disposal Groups | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure | 2. Discontinued Operations On July 1, 2021, the Company entered into a definitive agreement for the sale of its reverse servicing portfolio, operating under Champion, to MAM. Pursuant to the agreement, total consideration for the sale is dependent on the value of the respective assets and liabilities sold on the closing date. Upon close of the transaction, which is subject to regulatory approvals and other closing conditions, MAM will assume Champion’s reverse portfolio and related operations. The sale is expected to close in the fourth quarter of 2021. The Company recorded total transaction costs of $5 for the nine months ended September 30, 2021 . There were no transaction costs for the three months ended September 30, 2021. The carrying amounts of assets and liabilities associated with the reverse servicing operation are reported under the Servicing segment. The Company determined the reverse servicing operations met the criteria for classification as held for sale as of June 30, 2021, and for the unsold portion, the operations continue to meet the criteria. The sale of business represents a strategic shift in the Company’s operations. Therefore, the sale of the reverse servicing portfolio qualifies for reporting as discontinued operations, and the assets and liabilities of the reverse servicing portfolio are reported as discontinued operations in the condensed consolidated balance sheets and related results of operations are reported as discontinued operations in the condensed consolidated statements of operations for all periods presented. In August 2021, net assets of $1,039 were transferred to MAM. The balances as of September 30, 2021 represent the remaining balances to be transferred. As part of the transaction, the Company entered into a servicing agreement with MAM, under which the Company will be compensated for continuing to service these reverse loans through the date that the loans are transferred out of Company’s servicing system, which will be the date of transfer. In addition, the Company will retain certain loans related to the reverse servicing portfolio, primarily related to previously liquidated loans, with total assets of $95 and total liabilities of $91 as of September 30, 2021. The following table sets forth the assets and liabilities included in discontinued operations: September 30, 2021 December 31, 2020 Carrying amounts of assets of discontinued operations Restricted cash $ 65 $ 83 Reverse mortgage interests, net 3,705 5,253 Other 5 11 Loss recognized on classification as discontinued operations (53) — Total assets of discontinued operations $ 3,722 $ 5,347 Carrying amounts of liabilities of discontinued operations Advances and warehouse facilities, net $ 98 $ 505 Payables and other liabilities 208 233 Mortgage servicing liabilities 41 41 Other nonrecourse debt, net 3,393 4,424 Total liabilities of discontinued operations $ 3,740 $ 5,203 The following table sets forth the condensed consolidated statements of operations data for discontinued operations: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue - service related, net $ 4 $ 9 $ 13 $ 35 Salaries, wages and benefits expense (7) (10) (23) (32) General and administrative expense (14) 33 50 15 Interest income 31 40 118 136 Interest expense (26) (37) (90) (140) Loss on classification as discontinued operations (3) — (64) — (Loss) income from discontinued operations before income tax (benefit) expense (15) 35 4 14 Less: Income tax (benefit) expense (4) 8 1 3 Net (loss) income from discontinued operations $ (11) $ 27 $ 3 $ 11 |
Mortgage Servicing Rights and R
Mortgage Servicing Rights and Related Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing Rights and Related Liabilities | 3. Mortgage Servicing Rights and Related Liabilities The following table sets forth the carrying value of the Company’s 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 current environment was considered in the determination of key assumptions. MSRs and Related Liabilities September 30, 2021 December 31, 2020 Forward MSRs - fair value $ 3,666 $ 2,703 Excess spread financing - fair value $ 822 $ 934 Mortgage servicing rights financing - fair value 20 33 MSR related liabilities - nonrecourse at fair value $ 842 $ 967 Forward Mortgage Servicing Rights The following table sets forth the activities of forward MSRs: Nine Months Ended September 30, Forward MSRs - Fair Value 2021 2020 Fair value - beginning of period $ 2,703 $ 3,496 Additions: Servicing retained from mortgage loans sold 790 412 Purchases of servicing rights 438 30 Dispositions: Sales of servicing assets (13) — Changes in fair value: Changes in valuation inputs or assumptions used in the valuation model (MSR MTM) 476 (727) Changes in valuation due to amortization (772) (605) Other changes 44 57 Fair value - end of period $ 3,666 $ 2,663 During the nine months ended September 30, 2021 and 2020, the Company sold $1,226 and $94 in unpaid principal balance (“UPB”) of forward MSRs, of which $1,144 and none were retained by the Company as subservicer, respectively. Forward MSRs 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: September 30, 2021 December 31, 2020 Forward MSRs - UPB and Fair Value Breakdown UPB Fair Value UPB Fair Value Investor Pools Agency $ 266,588 $ 3,329 $ 227,136 $ 2,305 Non-agency 36,503 337 44,053 398 Total $ 303,091 $ 3,666 $ 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 September 30, 2021 Mortgage servicing rights $ (133) $ (257) $ (145) $ (279) $ (45) $ (89) 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. Excess Spread Financing - Fair Value The Company had excess spread financing liability of $822 and $934 as of September 30, 2021 and December 31, 2020, respectively. Refer to Note 13, Fair Value Measurements , for 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 September 30, 2021 Excess spread financing $ 28 $ 58 $ 30 $ 63 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 $20 and $33 as of September 30, 2021 and December 31, 2020, respectively. Refer to Note 13, Fair Value Measurements , for 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 September 30, Nine Months Ended September 30, Total Revenues - Servicing 2021 2020 2021 2020 Contractually specified servicing fees (1) $ 280 $ 282 $ 831 $ 864 Other service-related income (1) 158 60 517 171 Incentive and modification income (1) 10 12 38 30 Late fees (1) 19 18 53 65 Mark-to-market adjustments (2) 151 (16) 376 (618) Amortization, net of accretion (3) (202) (129) (567) (362) Other (4) (65) (104) (224) (268) Total revenues - Servicing $ 351 $ 123 $ 1,024 $ (118) (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 $8 and $7 for the three months ended September 30, 2021 and 2020 and $28 and $20 for the nine months ended September 30, 2021 and 2020, respectively. (3) Amortization is net of excess spread accretion of $59 and $96 during the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, amortization is net of excess spread accretion of $205 and $243, respectively. (4) Other represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements, portfolio runoff and the payments made associated with MSR financing arrangements. |
Advances and Other Receivables
Advances and Other Receivables | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Advances and Other Receivables | 4. Advances and Other Receivables Advances and other receivables, net, consists of the following: Advances and Other Receivables, Net September 30, 2021 December 31, 2020 Servicing advances, net of $30 and $72 purchase discount, respectively $ 893 $ 975 Receivables from agencies, investors and prior servicers, net of $13 and $21 purchase discount, respectively 188 173 Reserves (172) (208) Total advances and other receivables, net $ 909 $ 940 The following table sets forth the activities of the servicing reserves for advances and other receivables: Three Months Ended September 30, Nine Months Ended September 30, Reserves for Advances and Other Receivables 2021 2020 2021 2020 Balance - beginning of period $ 191 $ 216 $ 208 $ 168 Provision and other additions (1) 18 13 59 72 Write-offs (37) (38) (95) (49) Balance - end of period $ 172 $ 191 $ 172 $ 191 (1) The Company recorded a provis ion of $8 and $7 through the MTM adjustments in revenues - service related, net, in the condensed consolidated statements of operations during the three months ended September 30, 2021 and 2020, and $28 and $20 during the nine months ended September 30, 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 September 30, 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 $ 31 $ 20 $ 117 $ 21 Utilization of purchase discounts (1) (7) (25) — Balance - end of period $ 30 $ 13 $ 92 $ 21 Nine Months Ended September 30, 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 (42) (8) (39) — Balance - end of period $ 30 $ 13 $ 92 $ 21 Credit Loss for Advances and Other Receivables During the three and nine months ended September 30, 2021, the Company increased the current expected credit loss (“CECL”) reserve by $3 and $7, respectively. In addition, the Company wrote off $16 of the CECL reserve during the three months and nine months ended September 30, 2021. During the three and nine months ended September 30, 2020, the Company increased the CECL reserve by $13 and $27, respectively. As of September 30, 2021, the total CECL reserve was $29, of which $19 and $10 were recorded in reserves and purchase discount for advances and other receivables, respectively. As of September 30, 2020 , the total CECL reserve was $44, of which $27 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 of 39 months. Any projected remaining balance at the end of the collection period is considered a loss and factors into the overall CECL loss rate required. |
Mortgage Loans Held for Sale
Mortgage Loans Held for Sale | 9 Months Ended |
Sep. 30, 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 September 30, 2021 December 31, 2020 Mortgage loans held for sale – UPB $ 7,664 $ 5,438 Mark-to-market adjustment (1) 275 282 Total mortgage loans held for sale $ 7,939 $ 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 condensed consolidated statements of operations. The following table sets forth the activities of mortgage loans held for sale: Nine Months Ended September 30, Mortgage Loans Held for Sale 2021 2020 Balance - beginning of period $ 5,720 $ 4,077 Loans sold (73,822) (42,185) Mortgage loans originated and purchased, net of fees 67,507 38,709 Repurchase of loans out of Ginnie Mae securitizations 8,530 3,173 Net change in unrealized gain on retained loans held for sale 1 36 Net transfers of mortgage loans held for sale (1) 3 7 Balance - end of period $ 7,939 $ 3,817 (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 nine months ended September 30, 2021 and 2020, the Company received proceeds of $74,948 and $43,040, respectively, on the sale of mortgage loans held for sale, resulting in gains of $1,126 and $855, respectively. The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows: September 30, 2021 December 31, 2020 Mortgage Loans Held for Sale UPB Fair Value UPB Fair Value Non-accrual (1) $ 1,924 $ 2,002 $ 64 $ 54 (1) Non-accrual UPB includes $1,906 and $48 of UPB related to Ginnie Mae repurchased loans as of September 30, 2021 and December 31, 2020, respectively. The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $17 and $20 as of September 30, 2021 and December 31, 2020, respectively. |
Loans Subject to Repurchase fro
Loans Subject to Repurchase from Ginnie Mae | 9 Months Ended |
Sep. 30, 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 $2,703 and $6,159 as of September 30, 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 September 30, 2021 and December 31, 2020 include $2,486 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 | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The Company had goodwill of $120 as of September 30, 2021 and December 31, 2020. The Company had intangible assets of $18 and $31 |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 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 changes in value on the derivative instruments are recorded in earnings as a component of net gain on mortgage loans held for sale on the condensed consolidated statements of operations and condensed consolidated statement of cash flows, except for a portion of forward MBS trades to hedge MSR pipelines and related fair value changes, which is recorded in service related, net on the condensed consolidated statements of operations and in changes in other assets or other liabilities on the condensed consolidated statements of cash flows. The following tables provide the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses) for the derivative financial instruments: September 30, 2021 Nine Months Ended September 30, 2021 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2021 $ 1,435 $ 29 $ (73) Derivative financial instruments IRLCs 2021 6,167 167 (247) LPCs 2021 887 6 (32) Forward MBS trades 2021 12,770 61 24 Total derivative financial instruments - assets $ 19,824 $ 234 $ (255) Liabilities Derivative financial instruments IRLCs 2021 $ 25 $ — $ — LPCs 2021 2,208 13 12 Forward MBS trades 2021 6,553 23 (133) Swap futures 2021 700 12 12 Total derivative financial instruments - liabilities $ 9,486 $ 48 $ (109) September 30, 2020 Nine Months Ended September 30, 2020 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2020 $ 1,908 $ 75 $ 43 Derivative financial instruments IRLCs 2020-2021 10,967 414 279 LPCs 2020 5,217 38 26 Forward MBS trades 2020-2021 11,452 23 17 Total derivative financial instruments - assets $ 27,636 $ 475 $ 322 Liabilities Derivative financial instruments IRLCs 2020 $ 2 $ — $ — LPCs 2020 598 2 (1) Forward MBS trades 2020-2021 15,974 42 30 Total derivative financial instruments - liabilities $ 16,574 $ 44 $ 29 |
Indebtedness
Indebtedness | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Indebtedness | 9. Indebtedness Advance and Warehouse Facilities September 30, 2021 December 31, 2020 Interest Rate Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral Pledged Advance Facilities $940 advance facility (1) LIBOR+3.5% August 2023 Servicing advance receivables $ 940 $ 170 $ 228 $ 235 $ 305 $350 advance facility (2) LIBOR+1.1% to 6.5% October 2022 Servicing advance receivables 350 168 211 192 246 $350 advance facility (3) CP+2.0% to 6.5% January 2022 Servicing advance receivables 350 136 159 168 195 $100 advance facility LIBOR+2.5% January 2022 Servicing advance receivables 100 65 86 74 98 Advance facilities principal amount 539 684 669 844 Warehouse Facilities $4,000 warehouse facility (4) LIBOR+1.6% to 2.2% February 2023 Mortgage loans or MBS 4,000 3,117 3,352 339 392 $2,500 warehouse facility (5) LIBOR+1.6% to 1.9% October 2022 Mortgage loans or MBS 2,500 1,225 1,276 1,003 1,037 $1,600 warehouse facility (6)(7) LIBOR+1.5% to 3.0% September 2023 Mortgage loans or MBS 1,600 906 945 951 977 $1,500 warehouse facility LIBOR+1.5% June 2022 Mortgage loans or MBS 1,500 546 529 1,081 1,028 $1,200 warehouse facility (6) LIBOR+1.8% to 3.0% November 2021 Mortgage loans or MBS 1,200 473 492 586 607 $600 warehouse facility (6) LIBOR+2.5% February 2022 Mortgage loans or MBS 600 37 38 — — $550 warehouse facility (8) LIBOR+1.5% August 2022 Mortgage loans or MBS 550 84 86 477 492 $500 warehouse facility LIBOR+1.5% to 3.0% June 2023 Mortgage loans or MBS 500 439 452 — — $500 warehouse facility (9) LIBOR+1.5% to 1.8% September 2022 Mortgage loans or MBS 500 231 238 562 574 $500 warehouse facility (6) LIBOR+1.5% to 4.0% June 2022 Mortgage loans or MBS 500 125 125 — — $500 warehouse facility LIBOR+1.7% August 2023 Mortgage loans or MBS 500 48 49 — — $300 warehouse facility LIBOR+1.4% January 2022 Mortgage loans or MBS 300 94 96 163 164 $200 warehouse facility (10) LIBOR+1.8% October 2021 Mortgage loans or MBS 200 3 3 131 134 $200 warehouse facility (11) LIBOR+1.6% to 4.9% April 2022 Mortgage loans or MBS 200 47 54 37 42 $30 warehouse facility (6)(12) LIBOR+3.3% January 2022 Mortgage loans or MBS 30 — — — — Warehouse facilities principal amount 7,375 7,735 5,330 5,447 MSR Facilities $400 warehouse facility (13) LIBOR+3.0% August 2022 MSR 400 35 685 — 247 $400 warehouse facility (7) LIBOR+3.0% September 2023 MSR 400 — 601 — 228 $260 warehouse facility (1) LIBOR+3.5% August 2023 MSR 260 260 940 260 668 $50 warehouse facility LIBOR+3.3% November 2022 MSR 50 10 69 10 74 MSR facilities principal amount 305 2,295 270 1,217 Advance, warehouse and MSR facilities principal amount 8,219 $ 10,714 6,269 $ 7,508 Unamortized debt issuance costs (13) (11) Advance and warehouse facilities, net $ 8,206 $ 6,258 (1) Total capacity for this facility is $1,200, of which $940 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, in comparison to $900, $640, and $260 respectively in 2020. (2) The capacity amount for this advance facility decreased from $425 to $350 in 2021. (3) The capacity amount for this advance facility decreased from $875 to $350 in 2021. (4) The capacity amount for this warehouse facility increased from $2,000 to $4,000 in 2021. (5) The capacity amount for this warehouse facility increased from $1,500 to $2,500 in 2021. (6) The outstanding and collateral pledged amounts excluded balances related to reverse mortgage interests, which are included in liabilities of discontinued operations. Refer to Note 2, Discontinued Operations for further details on liabilities of discontinued operations. (7) The capacity amount for this facility increased from $1,500 to $2,000, and its related sublimit for MSR financing has increased from $150 to $400 in 2021. (8) The capacity amount for this warehouse facility decreased from $750 to $550 in 2021. (9) The capacity amount for this warehouse facility decreased from $750 to $500 in 2021. (10) This facility was subsequently terminated in October 2021. (11) The capacity amount for this warehouse facility increased from $50 to $200 in 2021 (12) The capacity amount for this warehouse facility decreased from $40 to $30 in 2021. (13) The capacity amount for this warehouse facility increased from $200 to $400 in 2021. Unsecured Senior Notes Unsecured senior notes consist of the following: Unsecured Senior Notes September 30, 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 (24) (26) Unsecured senior notes, net $ 2,076 $ 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 n otes were repurchased or redeemed during th e nine months ended September 30, 2021. During the nine months ended September 30, 2020, the Company repaid $100 in principal of outstanding notes. Additionally, the Company redeemed $950 and $1,548 in principal of outstanding notes during the three and nine months ended September 30, 2020, resulting in a net loss of $53 and $52, respectively. As of September 30, 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 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 September 30, 2021. |
Securitizations and Financings
Securitizations and Financings | 9 Months Ended |
Sep. 30, 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. 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: September 30, 2021 December 31, 2020 Consolidated Transactions with VIEs Transfers Transfers Assets Restricted cash $ 40 $ 47 Advances and other receivables, net 370 441 Total assets $ 410 $ 488 Liabilities Advance facilities, net (1) $ 304 $ 358 Payables and other liabilities — 1 Total liabilities $ 304 $ 359 (1) 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 September 30, 2021 December 31, 2020 Total collateral balances - UPB $ 1,171 $ 1,326 Total certificate balances $ 1,172 $ 1,329 The Company has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of September 30, 2021 and December 31, 2020. Therefore, it 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 September 30, 2021 December 31, 2020 Unconsolidated securitization trusts $ 140 $ 154 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 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., (“KKR”) a related party of the Company, for a total cost of $119. In August 2021, the Company repurchased 11,073 thousand shares of its common stock and 1,000 thousand shares of its preferred stock from affiliates of KKR for a total cost of $396. After giving effect to the transaction, KKR no longer held any equity interests in the Company. 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 September 30, Nine Months Ended September 30, Computation of Earnings Per Share 2021 2020 2021 2020 Net income from continuing operations $ 310 $ 187 $ 1,296 $ 105 Less: Net income attributable to non-controlling interests — 5 — 2 Less: Undistributed earnings from continuing operations attributable to participating stockholders 1 2 9 1 Less: Premium on retirement of preferred stock 28 — 28 — Net income from continuing operations attributable to Mr. Cooper common stockholders $ 281 $ 180 $ 1,259 $ 102 Net (loss) income from discontinued operations $ (11) $ 27 $ 3 $ 11 Less: Undistributed earnings from discontinued operations attributable to participating stockholders — — — — Net (loss) income from discontinued operations attributable to Mr. Cooper common stockholders $ (11) $ 27 $ 3 $ 11 Net income $ 299 $ 214 $ 1,299 $ 116 Less: Net income attributable to non-controlling interests — 5 — 2 Net income attributable to Mr. Cooper 299 209 1,299 114 Less: Undistributed earnings attributable to participating stockholders 1 2 9 1 Less: Premium on retirement of preferred stock 28 — 28 — Net income attributable to common stockholders $ 270 $ 207 $ 1,262 $ 113 Earnings from continuing operations per common share attributable to Mr. Cooper: Basic $ 3.56 $ 1.98 $ 14.85 $ 1.12 Diluted $ 3.42 $ 1.91 $ 14.20 $ 1.09 Earnings from discontinued operations per common share attributable to Mr. Cooper: Basic $ (0.14) $ 0.28 $ 0.04 $ 0.11 Diluted $ (0.13) $ 0.27 $ 0.03 $ 0.11 Earnings per common share attributable to Mr. Cooper: Basic $ 3.42 $ 2.26 $ 14.89 $ 1.23 Diluted $ 3.29 $ 2.18 $ 14.23 $ 1.20 Weighted average shares of common stock outstanding (in thousands): Basic 78,944 91,682 84,809 91,688 Dilutive effect of stock awards 2,826 2,563 3,176 1,529 Dilutive effect of participating securities 301 839 658 839 Diluted 82,071 95,084 88,643 94,056 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes For the three and nine months ended September 30, 2021, the effective tax rate for continuing operations was 25.0% and 24.0%, respectively, which differed from the statutory federal rate of 21% primarily due to state income taxes and nondeductible executive compensation. The effective tax rate increased during the nine months ended September 30, 2021 compared to the same period in 2020, primarily due to quarterly discrete tax items related to the completion of the Title Transaction and excess tax benefit from stock-based compensation. For the three and nine months ended September 30, 2020, the effective tax rate for continuing operations was 23.9% and 23.8%, respectively, which differed from the statutory federal rate of 21% primarily due to state income taxes and nondeductible executive compensation. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 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, with the exception of the following: Mortgage Servicing Rights – Fair Value (Level 3) – The Company estimates the fair value of its forward MSRs on a recurring basis using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on a discounted cash flow model which incorporates prepayment speeds, delinquencies, discount rate, ancillary revenues, float earnings and other assumptions (including costs to service, recapture rates and forbearance rates), with the key assumptions being mortgage prepayment speeds, discount rates, and cost to service. In the second quarter of 2021, the Company refined its estimate of the fair value of forward MSRs by incorporating an estimate of future cash flows from loans that are expected to be recaptured. The estimate of future cash flows related to recapture is consistent with recent pricing observed from various market participants, including the Company’s independent third-party valuation firms. As a result of considering the recapture rate, the Company adjusted its discount rate assumption in order to ensure that the fair value of forward MSRs remains consistent with current market participant pricing and is reflective of an exit price. The estimated fair value was also corroborated with valuations provided by independent third parties. The net impact on the overall forward MSRs fair value was not significant during the three and six months ended June 30, 2021. These assumptions are generated and applied based on collateral stratifications including product type, remittance type, geography, delinquency and coupon dispersion. These assumptions require the use of judgment by the Company and can have a significant impact on the fair value of the MSRs. Quarterly, management obtains third-party valuations to assess the reasonableness of the fair value calculations provided by the internal cash flow model. Because of the nature of the valuation inputs, the Company classifies these valuations as Level 3 in the fair value disclosures. See Note 3, Mortgage Servicing Rights and Related Liabilities , for more information. Equity Securities (Level 1 and Level 3) – In the second quarter of 2021, the Company sold its Xome Title business and retained 9.9% interest in the form of common stock. The fair value of these common stock is measured quarterly based on an independent third-party valuation, which utilizes unobservable inputs, in addition to observable market indicators. Because of the nature of the unobservable inputs, the Company classifies these valuations as Level 3 in the fair value disclosures. In the third quarter of 2021, the Company received equity securities in the form of common stock in connection with the sale of Xome Valuations business. The fair value of these common stock is measured using the closing price reported on an active market in which the securities are traded. As the fair value is based on market observable inputs, the Company classifies these valuations as Level 1 in the fair value disclosures. See Note 1, Nature of Business and Basis of Presentation for further details on sale of businesses. 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: September 30, 2021 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 7,939 $ — $ 7,939 $ — Forward mortgage servicing rights 3,666 — — 3,666 Equity securities 58 8 — 50 Derivative financial instruments IRLCs 167 — — 167 LPCs 6 — — 6 Forward MBS trades 61 — 61 — Liabilities Derivative financial instruments LPCs 13 — — 13 Forward MBS trades 23 — 23 — Swap futures 12 — 12 — Mortgage servicing rights financing 20 — — 20 Excess spread financing 822 — — 822 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 LPCs 38 — — 38 Forward MBS trades 37 — 37 — Liabilities Derivative financial instruments LPCs 1 — — 1 Forward MBS trades 156 — 156 — 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: Nine Months Ended September 30, 2021 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Forward mortgage servicing rights Equity securities IRLCs LPCs Excess spread financing Mortgage servicing rights financing LPCs Balance - beginning of period $ 2,703 $ — $ 414 $ 38 $ 934 $ 33 $ 1 Changes in fair value included in earnings (296) — (247) (32) 6 (13) 12 Other changes 44 — — — — — — Purchases, issuances, sales, repayments and settlements Purchases/Additions 438 50 — — — — — Issuances 790 — — — — — — Sales (13) — — — — — — Settlements and repayments — — — — (118) — — Balance - end of period $ 3,666 $ 50 $ 167 $ 6 $ 822 $ 20 $ 13 Nine Months Ended September 30, 2020 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Forward mortgage servicing rights IRLCs LPCs Excess spread financing Mortgage servicing rights financing Balance - beginning of period $ 3,496 $ 135 $ 12 $ 1,311 $ 37 Changes in fair value included in earnings (1,332) 279 26 (132) 10 Other changes 57 — — — — Purchases, issuances, sales, repayments and settlements Purchases 30 — — — — Issuances 412 — — 24 — Settlements and repayments — — — (159) — Balance - end of period $ 2,663 $ 414 $ 38 $ 1,044 $ 47 No transfers were made in or out of Level 3 fair value assets and liabilities for the Company during the nine months ended September 30, 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: September 30, 2021 December 31, 2020 Range Weighted Average Range Weighted Average Level 3 Inputs Min Max Min Max Forward MSR Discount rate 9.5 % 13.8 % 10.9 % 8.2 % 12.0 % 9.4 % Prepayment speed 11.8 % 16.5 % 12.9 % 14.2 % 21.3 % 15.4 % Cost to service per loan (1) $ 61 $ 180 $ 79 $ 66 $ 257 $ 98 Average life (2) 5.8 years 5.0 years IRLCs Value of servicing (basis points per loan) (1.3) 2.4 1.3 (1.0) 2.2 1.2 Excess spread financing Discount rate 9.5 % 13.8 % 11.2 % 9.9 % 15.7 % 12.2 % Prepayment speed 12.8 % 15.1 % 13.4 % 13.9 % 15.0 % 14.4 % Recapture rate 17.3 % 28.9 % 23.1 % 17.7 % 24.2 % 19.5 % Average life (2) 5.4 years 5.1 years Mortgage servicing rights financing Advance financing and counterparty fee rates 5.2 % 8.0 % 6.7 % 4.6 % 8.5 % 7.5 % Annual advance recovery rates 18.8 % 22.6 % 20.7 % 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: September 30, 2021 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 731 $ 731 $ — $ — Restricted cash 118 118 — — Advances and other receivables, net 909 — — 909 Loans subject to repurchase from Ginnie Mae 2,703 — 2,703 — Financial liabilities Unsecured senior notes, net 2,076 2,168 — — Advance and warehouse facilities, net 8,206 — 8,219 — Liability for loans subject to repurchase from Ginnie Mae 2,703 — 2,703 — December 31, 2020 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 695 $ 695 $ — $ — Restricted cash 135 135 — — Advances and other receivables, net 940 — — 940 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 6,258 — 6,269 — Liability for loans subject to repurchase from Ginnie Mae 6,159 — 6,159 — |
Capital Requirements
Capital Requirements | 9 Months Ended |
Sep. 30, 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 September 30, 2021, the Company was in compliance with its selling and servicing capital requirements. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 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 $10 and $31 for three and nine months ended September 30, 2021, respectively, and $9 and $36 for three and nine months ended September 30, 2020, respectively, was included in general and administrative expenses on the 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 $8 to $15 in exce ss of the accrued liability (if any) related to those matters as of September 30, 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 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 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 September 30, 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. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 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 third quarter of 2021, the Company updated its presentation of segments to align with a change in the reporting package provided to the Chief Operating Decision Maker. In 2021, the Company sold the Xome Title business and Valuations business and entered into a definitive agreement to sell the Xome Field Services business. See Note 1, Nature of Business and Basis of Presentation for further details. The Title, Valuations and Field Services businesses were previously reported under the Xome segment. With the sale of majority of Xome’s operations and the related changes to business structure and internal reporting, the Xome segment will no longer be considered a reportable segment. Accordingly, beginning in the third quarter of 2021, the Company began reporting Xome’s financial results within Corporate/Other. Prior year financial information has been adjusted retrospectively to reflect the updated presentation. On July 1, 2021, the Company entered into a definitive agreement for the sale of its reverse servicing portfolio, operating under the Champion Mortgage brand, to Mortgage Assets Management, LLC and its affiliates. The reverse servicing operation was previously reported in the Company’s Servicing segment. The reverse servicing operation is presented as discontinued operations in Company’s condensed consolidated financial statements for all periods presented and as such is not included in the continuing operations of the Servicing segment. Refer to Note 2, Discontinued Operations for further details. As of September 30, 2021 and December 31, 2020 , total assets of discontinued operations was $3,722 an d $5,347, respectively. In June and August 2021, the Company closed the sale of Xome Title and Valuations businesses, respectively. The Xome Title and Valuations businesses were reported within Corporate/Other. The Company recorded a $487 and $7 gain in the second and third quarter of 2021 upon closing of the Title Transaction and Valuations Transaction, respectively. The gain was included in other income, net in the condensed statements of operations and reported under Corporate/Other. The following tables present financial information by segment: Three Months Ended September 30, 2021 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 209 $ 44 $ 35 $ 288 Net gain on mortgage loans held for sale 142 430 — 572 Total revenues 351 474 35 860 Total expenses 128 208 66 402 Interest income 39 27 — 66 Interest expense (65) (22) (31) (118) Other income, net — — 8 8 Total other (expenses) income, net (26) 5 (23) (44) Income (loss) from continuing operations before income tax expense (benefit) $ 197 $ 271 $ (54) $ 414 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 11 $ 8 $ (5) $ 14 Total assets $ 14,560 $ 4,949 $ 2,152 $ 21,661 Three Months Ended September 30, 2020 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 83 $ 27 $ 108 $ 218 Net gain on mortgage loans held for sale 40 605 — 645 Total revenues 123 632 108 863 Total expenses 123 195 137 455 Interest income 1 16 — 17 Interest expense (68) (15) (45) (128) Other (expense), net — — (51) (51) Total other (expenses) income, net (67) 1 (96) (162) (Loss) income from continuing operations before income tax (benefit) expense $ (67) $ 438 $ (125) $ 246 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 6 $ 5 $ 8 $ 19 Total assets $ 14,707 $ 4,250 $ 2,798 $ 21,755 Nine Months Ended September 30, 2021 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 558 $ 132 $ 170 $ 860 Net gain on mortgage loans held for sale 466 1,367 — 1,833 Total revenues 1,024 1,499 170 2,693 Total expenses 359 665 257 1,281 Interest income 87 76 — 163 Interest expense (201) (70) (92) (363) Other income, net — — 494 494 Total other (expenses) income, net (114) 6 402 294 Income from continuing operations before income tax expense $ 551 $ 840 $ 315 $ 1,706 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 23 $ 18 $ 4 $ 45 Total assets $ 14,560 $ 4,949 $ 2,152 $ 21,661 Nine Months Ended September 30, 2020 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ (237) $ 68 $ 320 $ 151 Net gain on mortgage loans held for sale 119 1,475 — 1,594 Total revenues (118) 1,543 320 1,745 Total expenses 354 528 395 1,277 Interest income 44 69 1 114 Interest expense (195) (55) (144) (394) Other (expense), net — — (50) (50) Total other (expenses) income, net (151) 14 (193) (330) (Loss) income from continuing operations before income tax (benefit) expenses $ (623) $ 1,029 $ (268) $ 138 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 14 $ 12 $ 29 $ 55 Total assets $ 14,707 $ 4,250 $ 2,798 $ 21,755 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of Presentation The interim condensed consolidated 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 |
Reclassification | Reclassifications Certain reclassifications have been made in the 2020 condensed consolidated financial statements to conform to 2021 presentation. Such reclassifications did not affect total revenues or net income. |
Discontinued Operations and D_2
Discontinued Operations and Disposal Groups (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table sets forth the assets and liabilities included in discontinued operations: September 30, 2021 December 31, 2020 Carrying amounts of assets of discontinued operations Restricted cash $ 65 $ 83 Reverse mortgage interests, net 3,705 5,253 Other 5 11 Loss recognized on classification as discontinued operations (53) — Total assets of discontinued operations $ 3,722 $ 5,347 Carrying amounts of liabilities of discontinued operations Advances and warehouse facilities, net $ 98 $ 505 Payables and other liabilities 208 233 Mortgage servicing liabilities 41 41 Other nonrecourse debt, net 3,393 4,424 Total liabilities of discontinued operations $ 3,740 $ 5,203 The following table sets forth the condensed consolidated statements of operations data for discontinued operations: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue - service related, net $ 4 $ 9 $ 13 $ 35 Salaries, wages and benefits expense (7) (10) (23) (32) General and administrative expense (14) 33 50 15 Interest income 31 40 118 136 Interest expense (26) (37) (90) (140) Loss on classification as discontinued operations (3) — (64) — (Loss) income from discontinued operations before income tax (benefit) expense (15) 35 4 14 Less: Income tax (benefit) expense (4) 8 1 3 Net (loss) income from discontinued operations $ (11) $ 27 $ 3 $ 11 |
Mortgage Servicing Rights and_2
Mortgage Servicing Rights and Related Liabilities (Tables) | 9 Months Ended |
Sep. 30, 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 current environment was considered in the determination of key assumptions. MSRs and Related Liabilities September 30, 2021 December 31, 2020 Forward MSRs - fair value $ 3,666 $ 2,703 Excess spread financing - fair value $ 822 $ 934 Mortgage servicing rights financing - fair value 20 33 MSR related liabilities - nonrecourse at fair value $ 842 $ 967 The following table sets forth the activities of forward MSRs: Nine Months Ended September 30, Forward MSRs - Fair Value 2021 2020 Fair value - beginning of period $ 2,703 $ 3,496 Additions: Servicing retained from mortgage loans sold 790 412 Purchases of servicing rights 438 30 Dispositions: Sales of servicing assets (13) — Changes in fair value: Changes in valuation inputs or assumptions used in the valuation model (MSR MTM) 476 (727) Changes in valuation due to amortization (772) (605) Other changes 44 57 Fair value - end of period $ 3,666 $ 2,663 The following table provides a breakdown of UPB and fair value for the Company’s forward MSRs: September 30, 2021 December 31, 2020 Forward MSRs - UPB and Fair Value Breakdown UPB Fair Value UPB Fair Value Investor Pools Agency $ 266,588 $ 3,329 $ 227,136 $ 2,305 Non-agency 36,503 337 44,053 398 Total $ 303,091 $ 3,666 $ 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 September 30, 2021 Mortgage servicing rights $ (133) $ (257) $ (145) $ (279) $ (45) $ (89) 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 September 30, 2021 Excess spread financing $ 28 $ 58 $ 30 $ 63 December 31, 2020 Excess spread financing $ 30 $ 62 $ 41 $ 84 |
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 September 30, Nine Months Ended September 30, Total Revenues - Servicing 2021 2020 2021 2020 Contractually specified servicing fees (1) $ 280 $ 282 $ 831 $ 864 Other service-related income (1) 158 60 517 171 Incentive and modification income (1) 10 12 38 30 Late fees (1) 19 18 53 65 Mark-to-market adjustments (2) 151 (16) 376 (618) Amortization, net of accretion (3) (202) (129) (567) (362) Other (4) (65) (104) (224) (268) Total revenues - Servicing $ 351 $ 123 $ 1,024 $ (118) (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 $8 and $7 for the three months ended September 30, 2021 and 2020 and $28 and $20 for the nine months ended September 30, 2021 and 2020, respectively. (3) Amortization is net of excess spread accretion of $59 and $96 during the three months ended September 30, 2021 and 2020, respectively. For the nine months ended September 30, 2021 and 2020, amortization is net of excess spread accretion of $205 and $243, respectively. (4) Other represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements, portfolio runoff and the payments made associated with MSR financing arrangements. |
Advances and Other Receivables
Advances and Other Receivables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Advances and other receivables, net, consists of the following: Advances and Other Receivables, Net September 30, 2021 December 31, 2020 Servicing advances, net of $30 and $72 purchase discount, respectively $ 893 $ 975 Receivables from agencies, investors and prior servicers, net of $13 and $21 purchase discount, respectively 188 173 Reserves (172) (208) Total advances and other receivables, net $ 909 $ 940 The following table sets forth the activities of the servicing reserves for advances and other receivables: Three Months Ended September 30, Nine Months Ended September 30, Reserves for Advances and Other Receivables 2021 2020 2021 2020 Balance - beginning of period $ 191 $ 216 $ 208 $ 168 Provision and other additions (1) 18 13 59 72 Write-offs (37) (38) (95) (49) Balance - end of period $ 172 $ 191 $ 172 $ 191 (1) The Company recorded a provis ion of $8 and $7 through the MTM adjustments in revenues - service related, net, in the condensed consolidated statements of operations during the three months ended September 30, 2021 and 2020, and $28 and $20 during the nine months ended September 30, 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 September 30, 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 $ 31 $ 20 $ 117 $ 21 Utilization of purchase discounts (1) (7) (25) — Balance - end of period $ 30 $ 13 $ 92 $ 21 Nine Months Ended September 30, 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 (42) (8) (39) — Balance - end of period $ 30 $ 13 $ 92 $ 21 |
Mortgage Loans Held for Sale (T
Mortgage Loans Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2021 December 31, 2020 Mortgage loans held for sale – UPB $ 7,664 $ 5,438 Mark-to-market adjustment (1) 275 282 Total mortgage loans held for sale $ 7,939 $ 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 condensed consolidated statements of operations. The following table sets forth the activities of mortgage loans held for sale: Nine Months Ended September 30, Mortgage Loans Held for Sale 2021 2020 Balance - beginning of period $ 5,720 $ 4,077 Loans sold (73,822) (42,185) Mortgage loans originated and purchased, net of fees 67,507 38,709 Repurchase of loans out of Ginnie Mae securitizations 8,530 3,173 Net change in unrealized gain on retained loans held for sale 1 36 Net transfers of mortgage loans held for sale (1) 3 7 Balance - end of period $ 7,939 $ 3,817 (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: September 30, 2021 December 31, 2020 Mortgage Loans Held for Sale UPB Fair Value UPB Fair Value Non-accrual (1) $ 1,924 $ 2,002 $ 64 $ 54 (1) Non-accrual UPB includes $1,906 and $48 of UPB related to Ginnie Mae repurchased loans as of September 30, 2021 and December 31, 2020, respectively. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2021 Nine Months Ended September 30, 2021 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2021 $ 1,435 $ 29 $ (73) Derivative financial instruments IRLCs 2021 6,167 167 (247) LPCs 2021 887 6 (32) Forward MBS trades 2021 12,770 61 24 Total derivative financial instruments - assets $ 19,824 $ 234 $ (255) Liabilities Derivative financial instruments IRLCs 2021 $ 25 $ — $ — LPCs 2021 2,208 13 12 Forward MBS trades 2021 6,553 23 (133) Swap futures 2021 700 12 12 Total derivative financial instruments - liabilities $ 9,486 $ 48 $ (109) September 30, 2020 Nine Months Ended September 30, 2020 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2020 $ 1,908 $ 75 $ 43 Derivative financial instruments IRLCs 2020-2021 10,967 414 279 LPCs 2020 5,217 38 26 Forward MBS trades 2020-2021 11,452 23 17 Total derivative financial instruments - assets $ 27,636 $ 475 $ 322 Liabilities Derivative financial instruments IRLCs 2020 $ 2 $ — $ — LPCs 2020 598 2 (1) Forward MBS trades 2020-2021 15,974 42 30 Total derivative financial instruments - liabilities $ 16,574 $ 44 $ 29 |
Indebtedness (Tables)
Indebtedness (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of advance and warehouse facilities | Advance and Warehouse Facilities September 30, 2021 December 31, 2020 Interest Rate Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral Pledged Advance Facilities $940 advance facility (1) LIBOR+3.5% August 2023 Servicing advance receivables $ 940 $ 170 $ 228 $ 235 $ 305 $350 advance facility (2) LIBOR+1.1% to 6.5% October 2022 Servicing advance receivables 350 168 211 192 246 $350 advance facility (3) CP+2.0% to 6.5% January 2022 Servicing advance receivables 350 136 159 168 195 $100 advance facility LIBOR+2.5% January 2022 Servicing advance receivables 100 65 86 74 98 Advance facilities principal amount 539 684 669 844 Warehouse Facilities $4,000 warehouse facility (4) LIBOR+1.6% to 2.2% February 2023 Mortgage loans or MBS 4,000 3,117 3,352 339 392 $2,500 warehouse facility (5) LIBOR+1.6% to 1.9% October 2022 Mortgage loans or MBS 2,500 1,225 1,276 1,003 1,037 $1,600 warehouse facility (6)(7) LIBOR+1.5% to 3.0% September 2023 Mortgage loans or MBS 1,600 906 945 951 977 $1,500 warehouse facility LIBOR+1.5% June 2022 Mortgage loans or MBS 1,500 546 529 1,081 1,028 $1,200 warehouse facility (6) LIBOR+1.8% to 3.0% November 2021 Mortgage loans or MBS 1,200 473 492 586 607 $600 warehouse facility (6) LIBOR+2.5% February 2022 Mortgage loans or MBS 600 37 38 — — $550 warehouse facility (8) LIBOR+1.5% August 2022 Mortgage loans or MBS 550 84 86 477 492 $500 warehouse facility LIBOR+1.5% to 3.0% June 2023 Mortgage loans or MBS 500 439 452 — — $500 warehouse facility (9) LIBOR+1.5% to 1.8% September 2022 Mortgage loans or MBS 500 231 238 562 574 $500 warehouse facility (6) LIBOR+1.5% to 4.0% June 2022 Mortgage loans or MBS 500 125 125 — — $500 warehouse facility LIBOR+1.7% August 2023 Mortgage loans or MBS 500 48 49 — — $300 warehouse facility LIBOR+1.4% January 2022 Mortgage loans or MBS 300 94 96 163 164 $200 warehouse facility (10) LIBOR+1.8% October 2021 Mortgage loans or MBS 200 3 3 131 134 $200 warehouse facility (11) LIBOR+1.6% to 4.9% April 2022 Mortgage loans or MBS 200 47 54 37 42 $30 warehouse facility (6)(12) LIBOR+3.3% January 2022 Mortgage loans or MBS 30 — — — — Warehouse facilities principal amount 7,375 7,735 5,330 5,447 MSR Facilities $400 warehouse facility (13) LIBOR+3.0% August 2022 MSR 400 35 685 — 247 $400 warehouse facility (7) LIBOR+3.0% September 2023 MSR 400 — 601 — 228 $260 warehouse facility (1) LIBOR+3.5% August 2023 MSR 260 260 940 260 668 $50 warehouse facility LIBOR+3.3% November 2022 MSR 50 10 69 10 74 MSR facilities principal amount 305 2,295 270 1,217 Advance, warehouse and MSR facilities principal amount 8,219 $ 10,714 6,269 $ 7,508 Unamortized debt issuance costs (13) (11) Advance and warehouse facilities, net $ 8,206 $ 6,258 (1) Total capacity for this facility is $1,200, of which $940 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, in comparison to $900, $640, and $260 respectively in 2020. (2) The capacity amount for this advance facility decreased from $425 to $350 in 2021. (3) The capacity amount for this advance facility decreased from $875 to $350 in 2021. (4) The capacity amount for this warehouse facility increased from $2,000 to $4,000 in 2021. (5) The capacity amount for this warehouse facility increased from $1,500 to $2,500 in 2021. (6) The outstanding and collateral pledged amounts excluded balances related to reverse mortgage interests, which are included in liabilities of discontinued operations. Refer to Note 2, Discontinued Operations for further details on liabilities of discontinued operations. (7) The capacity amount for this facility increased from $1,500 to $2,000, and its related sublimit for MSR financing has increased from $150 to $400 in 2021. (8) The capacity amount for this warehouse facility decreased from $750 to $550 in 2021. (9) The capacity amount for this warehouse facility decreased from $750 to $500 in 2021. (10) This facility was subsequently terminated in October 2021. (11) The capacity amount for this warehouse facility increased from $50 to $200 in 2021 (12) The capacity amount for this warehouse facility decreased from $40 to $30 in 2021. (13) The capacity amount for this warehouse facility increased from $200 to $400 in 2021. |
Schedule of unsecured senior notes | Unsecured senior notes consist of the following: Unsecured Senior Notes September 30, 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 (24) (26) Unsecured senior notes, net $ 2,076 $ 2,074 |
Schedule of maturities of long-term debt | As of September 30, 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 |
Securitizations and Financings
Securitizations and Financings (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2021 December 31, 2020 Consolidated Transactions with VIEs Transfers Transfers Assets Restricted cash $ 40 $ 47 Advances and other receivables, net 370 441 Total assets $ 410 $ 488 Liabilities Advance facilities, net (1) $ 304 $ 358 Payables and other liabilities — 1 Total liabilities $ 304 $ 359 (1) 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 September 30, 2021 December 31, 2020 Total collateral balances - UPB $ 1,171 $ 1,326 Total certificate balances $ 1,172 $ 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 September 30, 2021 December 31, 2020 Unconsolidated securitization trusts $ 140 $ 154 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended September 30, Computation of Earnings Per Share 2021 2020 2021 2020 Net income from continuing operations $ 310 $ 187 $ 1,296 $ 105 Less: Net income attributable to non-controlling interests — 5 — 2 Less: Undistributed earnings from continuing operations attributable to participating stockholders 1 2 9 1 Less: Premium on retirement of preferred stock 28 — 28 — Net income from continuing operations attributable to Mr. Cooper common stockholders $ 281 $ 180 $ 1,259 $ 102 Net (loss) income from discontinued operations $ (11) $ 27 $ 3 $ 11 Less: Undistributed earnings from discontinued operations attributable to participating stockholders — — — — Net (loss) income from discontinued operations attributable to Mr. Cooper common stockholders $ (11) $ 27 $ 3 $ 11 Net income $ 299 $ 214 $ 1,299 $ 116 Less: Net income attributable to non-controlling interests — 5 — 2 Net income attributable to Mr. Cooper 299 209 1,299 114 Less: Undistributed earnings attributable to participating stockholders 1 2 9 1 Less: Premium on retirement of preferred stock 28 — 28 — Net income attributable to common stockholders $ 270 $ 207 $ 1,262 $ 113 Earnings from continuing operations per common share attributable to Mr. Cooper: Basic $ 3.56 $ 1.98 $ 14.85 $ 1.12 Diluted $ 3.42 $ 1.91 $ 14.20 $ 1.09 Earnings from discontinued operations per common share attributable to Mr. Cooper: Basic $ (0.14) $ 0.28 $ 0.04 $ 0.11 Diluted $ (0.13) $ 0.27 $ 0.03 $ 0.11 Earnings per common share attributable to Mr. Cooper: Basic $ 3.42 $ 2.26 $ 14.89 $ 1.23 Diluted $ 3.29 $ 2.18 $ 14.23 $ 1.20 Weighted average shares of common stock outstanding (in thousands): Basic 78,944 91,682 84,809 91,688 Dilutive effect of stock awards 2,826 2,563 3,176 1,529 Dilutive effect of participating securities 301 839 658 839 Diluted 82,071 95,084 88,643 94,056 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2021 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 7,939 $ — $ 7,939 $ — Forward mortgage servicing rights 3,666 — — 3,666 Equity securities 58 8 — 50 Derivative financial instruments IRLCs 167 — — 167 LPCs 6 — — 6 Forward MBS trades 61 — 61 — Liabilities Derivative financial instruments LPCs 13 — — 13 Forward MBS trades 23 — 23 — Swap futures 12 — 12 — Mortgage servicing rights financing 20 — — 20 Excess spread financing 822 — — 822 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 LPCs 38 — — 38 Forward MBS trades 37 — 37 — Liabilities Derivative financial instruments LPCs 1 — — 1 Forward MBS trades 156 — 156 — 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: Nine Months Ended September 30, 2021 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Forward mortgage servicing rights Equity securities IRLCs LPCs Excess spread financing Mortgage servicing rights financing LPCs Balance - beginning of period $ 2,703 $ — $ 414 $ 38 $ 934 $ 33 $ 1 Changes in fair value included in earnings (296) — (247) (32) 6 (13) 12 Other changes 44 — — — — — — Purchases, issuances, sales, repayments and settlements Purchases/Additions 438 50 — — — — — Issuances 790 — — — — — — Sales (13) — — — — — — Settlements and repayments — — — — (118) — — Balance - end of period $ 3,666 $ 50 $ 167 $ 6 $ 822 $ 20 $ 13 Nine Months Ended September 30, 2020 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Forward mortgage servicing rights IRLCs LPCs Excess spread financing Mortgage servicing rights financing Balance - beginning of period $ 3,496 $ 135 $ 12 $ 1,311 $ 37 Changes in fair value included in earnings (1,332) 279 26 (132) 10 Other changes 57 — — — — Purchases, issuances, sales, repayments and settlements Purchases 30 — — — — Issuances 412 — — 24 — Settlements and repayments — — — (159) — Balance - end of period $ 2,663 $ 414 $ 38 $ 1,044 $ 47 |
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: September 30, 2021 December 31, 2020 Range Weighted Average Range Weighted Average Level 3 Inputs Min Max Min Max Forward MSR Discount rate 9.5 % 13.8 % 10.9 % 8.2 % 12.0 % 9.4 % Prepayment speed 11.8 % 16.5 % 12.9 % 14.2 % 21.3 % 15.4 % Cost to service per loan (1) $ 61 $ 180 $ 79 $ 66 $ 257 $ 98 Average life (2) 5.8 years 5.0 years IRLCs Value of servicing (basis points per loan) (1.3) 2.4 1.3 (1.0) 2.2 1.2 Excess spread financing Discount rate 9.5 % 13.8 % 11.2 % 9.9 % 15.7 % 12.2 % Prepayment speed 12.8 % 15.1 % 13.4 % 13.9 % 15.0 % 14.4 % Recapture rate 17.3 % 28.9 % 23.1 % 17.7 % 24.2 % 19.5 % Average life (2) 5.4 years 5.1 years Mortgage servicing rights financing Advance financing and counterparty fee rates 5.2 % 8.0 % 6.7 % 4.6 % 8.5 % 7.5 % Annual advance recovery rates 18.8 % 22.6 % 20.7 % 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: September 30, 2021 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 731 $ 731 $ — $ — Restricted cash 118 118 — — Advances and other receivables, net 909 — — 909 Loans subject to repurchase from Ginnie Mae 2,703 — 2,703 — Financial liabilities Unsecured senior notes, net 2,076 2,168 — — Advance and warehouse facilities, net 8,206 — 8,219 — Liability for loans subject to repurchase from Ginnie Mae 2,703 — 2,703 — December 31, 2020 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 695 $ 695 $ — $ — Restricted cash 135 135 — — Advances and other receivables, net 940 — — 940 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 6,258 — 6,269 — Liability for loans subject to repurchase from Ginnie Mae 6,159 — 6,159 — |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The following tables present financial information by segment: Three Months Ended September 30, 2021 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 209 $ 44 $ 35 $ 288 Net gain on mortgage loans held for sale 142 430 — 572 Total revenues 351 474 35 860 Total expenses 128 208 66 402 Interest income 39 27 — 66 Interest expense (65) (22) (31) (118) Other income, net — — 8 8 Total other (expenses) income, net (26) 5 (23) (44) Income (loss) from continuing operations before income tax expense (benefit) $ 197 $ 271 $ (54) $ 414 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 11 $ 8 $ (5) $ 14 Total assets $ 14,560 $ 4,949 $ 2,152 $ 21,661 Three Months Ended September 30, 2020 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 83 $ 27 $ 108 $ 218 Net gain on mortgage loans held for sale 40 605 — 645 Total revenues 123 632 108 863 Total expenses 123 195 137 455 Interest income 1 16 — 17 Interest expense (68) (15) (45) (128) Other (expense), net — — (51) (51) Total other (expenses) income, net (67) 1 (96) (162) (Loss) income from continuing operations before income tax (benefit) expense $ (67) $ 438 $ (125) $ 246 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 6 $ 5 $ 8 $ 19 Total assets $ 14,707 $ 4,250 $ 2,798 $ 21,755 Nine Months Ended September 30, 2021 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 558 $ 132 $ 170 $ 860 Net gain on mortgage loans held for sale 466 1,367 — 1,833 Total revenues 1,024 1,499 170 2,693 Total expenses 359 665 257 1,281 Interest income 87 76 — 163 Interest expense (201) (70) (92) (363) Other income, net — — 494 494 Total other (expenses) income, net (114) 6 402 294 Income from continuing operations before income tax expense $ 551 $ 840 $ 315 $ 1,706 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 23 $ 18 $ 4 $ 45 Total assets $ 14,560 $ 4,949 $ 2,152 $ 21,661 Nine Months Ended September 30, 2020 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ (237) $ 68 $ 320 $ 151 Net gain on mortgage loans held for sale 119 1,475 — 1,594 Total revenues (118) 1,543 320 1,745 Total expenses 354 528 395 1,277 Interest income 44 69 1 114 Interest expense (195) (55) (144) (394) Other (expense), net — — (50) (50) Total other (expenses) income, net (151) 14 (193) (330) (Loss) income from continuing operations before income tax (benefit) expenses $ (623) $ 1,029 $ (268) $ 138 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 14 $ 12 $ 29 $ 55 Total assets $ 14,707 $ 4,250 $ 2,798 $ 21,755 |
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 - USD ($) $ in Millions | Oct. 22, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Aug. 31, 2021 | Mar. 12, 2021 |
Title Business | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Purchase price | $ 500 | |||||
Cash received from disposal | $ 450 | |||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 487 | |||||
Disposal Group, Not Discontinued Operation, Transaction Cost | $ 2 | $ 7 | ||||
Title Business | Mr. Cooper Group Inc. | Blend Labs, Inc. | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Ownership interest percentage | 9.90% | |||||
Valuations Business | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Purchase price | $ 16 | |||||
Cash received from disposal | 9 | |||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | 7 | |||||
Disposal Group, Not Discontinued Operation, Transaction Cost | 0 | 0 | ||||
Disposal Group, Including Discontinued Operation, Common Stock | $ 7 | |||||
Field Services Business | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Disposal Group, Not Discontinued Operation, Transaction Cost | $ 0 | $ 0 | ||||
Field Services Business | Subsequent Event | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Purchase price | $ 41 | |||||
Cash received from disposal | 36 | |||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 33 | |||||
Field Services Business | Mr. Cooper Group Inc. | Cyprexx Services LLC | Subsequent Event | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Ownership interest percentage | 10.00% |
Discontinued Operations and D_3
Discontinued Operations and Disposal Groups (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Aug. 02, 2021 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Assets of discontinued operations | $ 3,722 | $ 3,722 | $ 5,347 | |||
Liabilities of discontinued operations | 3,740 | 3,740 | 5,203 | |||
Net (loss) income from discontinued operations | (11) | $ 27 | 3 | $ 11 | ||
Discontinued Operation, Loan Asset Retained | 95 | 95 | ||||
Discontinued Operation, Loan Liability Retained | 91 | 91 | ||||
Discontinued Operations, Held-for-sale or Disposed of by Sale [Member] | Champion Mortgage [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Restricted cash | 65 | 65 | 83 | |||
Reverse mortgage interests, net | 3,705 | 3,705 | 5,253 | |||
Other | 5 | 5 | 11 | |||
Loss recognized on classification as discontinued operations | (53) | (53) | 0 | |||
Assets of discontinued operations | 3,722 | 3,722 | 5,347 | |||
Advances and warehouse facilities, net | 98 | 98 | 505 | |||
Payables and other liabilities | 208 | 208 | 233 | |||
Mortgage servicing liabilities | 41 | 41 | 41 | |||
Other nonrecourse debt, net | 3,393 | 3,393 | 4,424 | |||
Liabilities of discontinued operations | 3,740 | 3,740 | $ 5,203 | |||
Revenue - service related, net | 4 | 9 | 13 | 35 | ||
Salaries, wages and benefits expense | (7) | (10) | (23) | (32) | ||
General and administrative expense | (14) | 33 | 50 | 15 | ||
Interest income | 31 | 40 | 118 | 136 | ||
Interest expense | (26) | (37) | (90) | (140) | ||
Loss on classification as discontinued operations | (3) | 0 | (64) | 0 | ||
(Loss) income from discontinued operations before income tax (benefit) expense | (15) | 35 | 4 | 14 | ||
Less: Income tax (benefit) expense | (4) | 8 | 1 | 3 | ||
Net (loss) income from discontinued operations | (11) | $ 27 | 3 | $ 11 | ||
Disposal Group, Discontinued Operation, Transaction Cost | $ 0 | $ 5 | ||||
Disposal Group, Including Discontinued Operation, Net Assets Transferred | $ 1,039 |
Mortgage Servicing Rights and_3
Mortgage Servicing Rights and Related Liabilities - MSRs and Related Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Mortgage Servicing Rights [Line Items] | ||
Excess spread financing - fair value | $ 822 | $ 934 |
Mortgage servicing rights financing - fair value | 20 | 33 |
MSR related liabilities - nonrecourse at fair value | 842 | 967 |
Mortgage Servicing Right [Member] | ||
Mortgage Servicing Rights [Line Items] | ||
Forward MSRs - fair value | $ 3,666 | $ 2,703 |
Mortgage Servicing Rights and_4
Mortgage Servicing Rights and Related Liabilities - MSR's at Fair Value (Details) - Mortgage Servicing Right [Member] - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Fair value - beginning of period | $ 2,703 | $ 3,496 |
Servicing retained from mortgage loans sold | 790 | 412 |
Purchases of servicing rights | 438 | 30 |
Sales of servicing assets | (13) | 0 |
Changes in valuation inputs or assumptions used in the valuation model (MSR MTM) | 476 | (727) |
Changes in valuation due to amortization | (772) | (605) |
Other changes | 44 | 57 |
Fair value - end of period | $ 3,666 | $ 2,663 |
Mortgage Servicing Rights and_5
Mortgage Servicing Rights and Related Liabilities - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Servicing Asset at Amortized Cost [Line Items] | |||
Excess spread financing - fair value | $ 822 | $ 934 | |
Mortgage servicing rights financing - fair value | 20 | $ 33 | |
Forward MSRs Sold | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement | 1,226 | $ 94 | |
Forward MSRs Sold, Subservicing Retained | |||
Servicing Asset at Amortized Cost [Line Items] | |||
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement | $ 1,144 | $ 0 |
Mortgage Servicing Rights and_6
Mortgage Servicing Rights and Related Liabilities - UPB related to owned MSRs (Details) - Mortgage Servicing Right [Member] - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Owned Service Loans [Line Items] | ||
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement | $ 303,091 | $ 271,189 |
Fair Value | 3,666 | 2,703 |
Agency | ||
Owned Service Loans [Line Items] | ||
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement | 266,588 | 227,136 |
Fair Value | 3,329 | 2,305 |
Non-agency | ||
Owned Service Loans [Line Items] | ||
Principal Amount Outstanding on Loans Managed and Securitized or Asset-backed Financing Arrangement | 36,503 | 44,053 |
Fair Value | $ 337 | $ 398 |
Mortgage Servicing Rights and_7
Mortgage Servicing Rights and Related Liabilities - Fair Value Sensitivity Analysis (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Mortgage Servicing Right [Member] | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Total prepayment speeds, 10% Adverse Change | $ (145) | $ (181) |
Total prepayment speeds, 20% Adverse Change | (279) | (347) |
Cost to Service per Loan, 10% Adverse Change | (45) | (45) |
Cost to Service per Loan, 20% Adverse Change | (89) | (89) |
Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Total prepayment speeds, 10% Adverse Change | 30 | 41 |
Total prepayment speeds, 20% Adverse Change | 63 | 84 |
100 bps Adverse Change | Mortgage Servicing Right [Member] | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | (133) | (100) |
100 bps Adverse Change | Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | 28 | 30 |
200 bps Adverse Change | Mortgage Servicing Right [Member] | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | (257) | (192) |
200 bps Adverse Change | Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | $ 58 | $ 62 |
Mortgage Servicing Rights and_8
Mortgage Servicing Rights and Related Liabilities - Servicing Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Transfers and Servicing [Abstract] | ||||
Contractually specified servicing fees(1) | $ 280 | $ 282 | $ 831 | $ 864 |
Other service-related income(1) | 158 | 60 | 517 | 171 |
Incentive and modification income(1) | 10 | 12 | 38 | 30 |
Late fees(1) | 19 | 18 | 53 | 65 |
Mark-to-market adjustments(2) | 151 | (16) | 376 | (618) |
Amortization, net of accretion(3) | (202) | (129) | (567) | (362) |
Other(4) | (65) | (104) | (224) | (268) |
Total revenues - Servicing | 351 | 123 | 1,024 | (118) |
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans | 8 | 7 | 28 | 20 |
Servicing fee income accretion expense | $ 59 | $ 96 | $ 205 | $ 243 |
Advances and Other Receivable_2
Advances and Other Receivables - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||||||
Servicing advances, net of $30 and $72 purchase discount, respectively | $ 893 | $ 975 | ||||
Receivables from agencies, investors and prior servicers, net of $13 and $21 purchase discount, respectively | 188 | 173 | ||||
Reserves | (172) | (208) | ||||
Total advances and other receivables, net | 909 | 940 | ||||
Servicing advances discount | 30 | $ 31 | 72 | $ 92 | $ 117 | $ 131 |
Receivables discount | $ 13 | $ 20 | $ 21 | $ 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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Advances And Other Receivables, Reserves [Roll Forward] | ||||
Balance - beginning of period | $ 191 | $ 216 | $ 208 | $ 168 |
Provision and other additions(1) | 18 | 13 | 59 | 72 |
Write-offs | (37) | (38) | (95) | (49) |
Balance - end of period | 172 | 191 | 172 | 191 |
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans | $ 8 | $ 7 | $ 28 | $ 20 |
Advances and Other Receivable_4
Advances and Other Receivables - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing receivable, allowance for credit loss | $ 29 | $ 44 | $ 29 | $ 44 |
Financial instruments collection period | 39 months | |||
Advances and other receivables reserve | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Provision for credit loss | 3 | 13 | $ 7 | 27 |
Financing receivable, allowance for credit loss | 19 | 27 | 19 | 27 |
Other Credit Losses, Write-off | 16 | 16 | ||
Purchase Discount | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing receivable, allowance for credit loss | $ 10 | $ 17 | $ 10 | $ 17 |
Advances and Other Receivable_5
Advances and Other Receivables - Purchase Discount (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Servicing Advances | ||||
Balance - beginning of period | $ 31 | $ 117 | $ 72 | $ 131 |
Utilization of purchase discounts | (1) | (25) | (42) | (39) |
Balance - end of period | 30 | 92 | 30 | 92 |
Receivables from Agencies, Investors and Prior Servicers | ||||
Balance - beginning of period | 13 | 21 | 13 | 21 |
Utilization of purchase discounts | (7) | 0 | (8) | 0 |
Balance - end of period | 20 | 21 | 21 | 21 |
Advances And Other Receivables, Servicing Reserves, Write-Offs | $ 37 | $ 38 | $ 95 | $ 49 |
Document Quarterly Report | true |
Mortgage Loans Held for Sale -
Mortgage Loans Held for Sale - Mortgage Loans Held for Sale (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Mortgage loans held for sale – UPB | $ 7,664 | $ 5,438 |
Mark-to-market adjustment(1) | 275 | 282 |
Total mortgage loans held for sale | 7,939 | 5,720 |
Mortgage Loans Held for Sale, Nonaccrual Basis Unpaid Principal Balance | 1,924 | 64 |
Fair Value, Mortgage Loans Held for Sale non-accrual status | 2,002 | 54 |
Ginnie mae repurchased loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Mortgage Loans Held for Sale, Nonaccrual Basis Unpaid Principal Balance | $ 1,906 | $ 48 |
Mortgage Loans Held for Sale _2
Mortgage Loans Held for Sale - Reconciliation to Cash Flow (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward] | ||
Balance - beginning of period | $ 5,720 | $ 4,077 |
Loans sold | (73,822) | (42,185) |
Mortgage loans originated and purchased, net of fees | 67,507 | 38,709 |
Repurchase of loans out of Ginnie Mae securitizations | 8,530 | 3,173 |
Net change in unrealized gain on retained loans held for sale | 1 | 36 |
Net transfers of mortgage loans held for sale(1) | 3 | 7 |
Balance - end of period | $ 7,939 | $ 3,817 |
Mortgage Loans Held for Sale _3
Mortgage Loans Held for Sale - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Mortgage Loans Held for Sale and Investment [Abstract] | |||
Sale of mortgage loans held for sale | $ 74,948 | $ 43,040 | |
Gain on sale of mortgage loans held for sale | 1,126 | $ 855 | |
Mortgage loans held for sale in foreclosure | $ 17 | $ 20 |
Loans Subject to Repurchase f_2
Loans Subject to Repurchase from Ginnie Mae (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans subject to repurchase from Ginnie Mae | $ 2,703 | $ 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 | $ 2,486 | $ 5,879 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 120 | $ 120 |
Intangible assets | $ 18 | $ 31 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Derivative Instruments (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Assets | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | $ 19,824 | $ 27,636 |
Fair Value | 234 | 475 |
Gains/(Losses) | (255) | 322 |
Assets | Loan sale commitments | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 1,435 | 1,908 |
Fair Value | 29 | 75 |
Gains/(Losses) | (73) | 43 |
Assets | IRLCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 6,167 | 10,967 |
Fair Value | 167 | 414 |
Gains/(Losses) | (247) | 279 |
Assets | LPCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 887 | 5,217 |
Fair Value | 6 | 38 |
Gains/(Losses) | (32) | 26 |
Assets | Forward MBS trades | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 12,770 | 11,452 |
Fair Value | 61 | 23 |
Gains/(Losses) | 24 | 17 |
Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 9,486 | 16,574 |
Derivative financial instruments | 48 | 44 |
Gains/(Losses) | (109) | 29 |
Liabilities | IRLCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 25 | 2 |
Derivative financial instruments | 0 | 0 |
Gains/(Losses) | 0 | 0 |
Liabilities | LPCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 2,208 | 598 |
Derivative financial instruments | 13 | 2 |
Gains/(Losses) | 12 | (1) |
Liabilities | Forward MBS trades | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 6,553 | 15,974 |
Derivative financial instruments | 23 | 42 |
Gains/(Losses) | (133) | $ 30 |
Liabilities | Swap futures | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 700 | |
Derivative financial instruments | 12 | |
Gains/(Losses) | $ 12 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Other assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Collateral deposit assets (liabilities) | $ 23 | $ 61 |
Payables and other liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Collateral deposit assets (liabilities) | $ 36 |
Indebtedness - Advance and Ware
Indebtedness - Advance and Warehouse Facilities Summary (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Advance and warehouse facilities, net | $ 8,206,000,000 | $ 6,258,000,000 |
Document Quarterly Report | true | |
Advance Facilities | Servicing | Loans payable | $350 advance facility(3) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 350,000,000 | 875,000,000 |
Debt outstanding, gross | 136,000,000 | 168,000,000 |
Collateral Pledged | $ 159,000,000 | 195,000,000 |
Advance Facilities | Servicing | Loans payable | $350 advance facility(3) | CP rate | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.00% | |
Advance Facilities | Servicing | Loans payable | $350 advance facility(3) | CP rate | Max | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 6.50% | |
Advance Facilities | Servicing | Loans payable | $640 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 350,000,000 | 425,000,000 |
Debt outstanding, gross | 168,000,000 | 192,000,000 |
Collateral Pledged | $ 211,000,000 | 246,000,000 |
Advance Facilities | Servicing | Loans payable | $640 advance facility | LIBOR | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.10% | |
Advance Facilities | Servicing | Loans payable | $640 advance facility | LIBOR | Max | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 6.50% | |
Advance Facilities | Servicing | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | $ 539,000,000 | 669,000,000 |
Collateral Pledged | 684,000,000 | 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 | 65,000,000 | 74,000,000 |
Collateral Pledged | $ 86,000,000 | 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 | $ 7,375,000,000 | 5,330,000,000 |
Collateral Pledged | 7,735,000,000 | 5,447,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $4,000 warehouse facility(4) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 4,000,000,000 | 2,000,000,000 |
Debt outstanding, gross | 3,117,000,000 | 339,000,000 |
Collateral Pledged | $ 3,352,000,000 | 392,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $4,000 warehouse facility(4) | LIBOR | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.60% | |
Warehouse Facilities | Originations | Notes payable to banks | $4,000 warehouse facility(4) | LIBOR | Max | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.20% | |
Warehouse Facilities | Originations | Notes payable to banks | $1,500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 1,500,000,000 | |
Debt outstanding, gross | 546,000,000 | 1,081,000,000 |
Collateral Pledged | $ 529,000,000 | 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 | 1,225,000,000 | 1,003,000,000 |
Collateral Pledged | $ 1,276,000,000 | 1,037,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $2,500 warehouse facility | LIBOR | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.60% | |
Warehouse Facilities | Originations | Notes payable to banks | $2,500 warehouse facility | LIBOR | Max | ||
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 | $ 1,600,000,000 | |
Debt outstanding, gross | 906,000,000 | 951,000,000 |
Collateral Pledged | $ 945,000,000 | 977,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $1,350 warehouse facility | LIBOR | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.50% | |
Warehouse Facilities | Originations | Notes payable to banks | $1,350 warehouse facility | LIBOR | Max | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.00% | |
Warehouse Facilities | Originations | Notes payable to banks | $1,200 warehouse facility(6) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 1,200,000,000 | |
Debt outstanding, gross | 473,000,000 | 586,000,000 |
Collateral Pledged | $ 492,000,000 | 607,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $1,200 warehouse facility(6) | LIBOR | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.80% | |
Warehouse Facilities | Originations | Notes payable to banks | $1,200 warehouse facility(6) | LIBOR | Max | ||
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 | $ 500,000,000 | 750,000,000 |
Debt outstanding, gross | 231,000,000 | 562,000,000 |
Collateral Pledged | $ 238,000,000 | 574,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $750 million warehouse | LIBOR | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.50% | |
Warehouse Facilities | Originations | Notes payable to banks | $750 million warehouse | LIBOR | Max | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.80% | |
Warehouse Facilities | Originations | Notes payable to banks | $750 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 550,000,000 | 750,000,000 |
Debt outstanding, gross | 84,000,000 | 477,000,000 |
Collateral Pledged | $ 86,000,000 | 492,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $750 warehouse facility | LIBOR | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.50% | |
Warehouse Facilities | Originations | Notes payable to banks | $600 warehouse facility(6) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 600,000,000 | |
Debt outstanding, gross | 37,000,000 | 0 |
Collateral Pledged | $ 38,000,000 | 0 |
Warehouse Facilities | Originations | Notes payable to banks | $600 warehouse facility(6) | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 2.50% | |
Warehouse Facilities | Originations | Notes payable to banks | $500 warehouse facility(6) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 500,000,000 | |
Debt outstanding, gross | 125,000,000 | 0 |
Collateral Pledged | $ 125,000,000 | 0 |
Warehouse Facilities | Originations | Notes payable to banks | $500 warehouse facility(6) | LIBOR | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.50% | |
Warehouse Facilities | Originations | Notes payable to banks | $500 warehouse facility(6) | LIBOR | Max | ||
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 | 94,000,000 | 163,000,000 |
Collateral Pledged | $ 96,000,000 | 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 | $200 warehouse facility(10) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 200,000,000 | |
Debt outstanding, gross | 3,000,000 | 131,000,000 |
Collateral Pledged | $ 3,000,000 | 134,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $200 warehouse facility(10) | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.80% | |
Warehouse Facilities | Originations | Notes payable to banks | $200 warehouse facility(11) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 200,000,000 | 50,000,000 |
Debt outstanding, gross | 47,000,000 | 37,000,000 |
Collateral Pledged | $ 54,000,000 | 42,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $200 warehouse facility(11) | LIBOR | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.60% | |
Warehouse Facilities | Originations | Notes payable to banks | $200 warehouse facility(11) | LIBOR | Max | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 4.90% | |
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 | 0 | 0 |
Collateral Pledged | $ 0 | 0 |
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 | $ 2,000,000,000 | 1,500,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $500 Million Warehouse Facility Due June 2023 | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 500,000,000 | |
Debt outstanding, gross | 439,000,000 | 0 |
Collateral Pledged | $ 452,000,000 | 0 |
Warehouse Facilities | Originations | Notes payable to banks | $500 Million Warehouse Facility Due June 2023 | LIBOR | Min | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.50% | |
Warehouse Facilities | Originations | Notes payable to banks | $500 Million Warehouse Facility Due June 2023 | LIBOR | Max | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.00% | |
Warehouse Facilities | Originations | Notes payable to banks | $500 Million Warehouse Facility Due August 2023 | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 500,000,000 | |
Debt outstanding, gross | 48,000,000 | 0 |
Collateral Pledged | $ 49,000,000 | 0 |
Warehouse Facilities | Originations | Notes payable to banks | $500 Million Warehouse Facility Due August 2023 | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 1.70% | |
MSR Facilities | Servicing | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | $ 305,000,000 | 270,000,000 |
Collateral Pledged | 2,295,000,000 | 1,217,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $200 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 400,000,000 | 200,000,000 |
Debt outstanding, gross | 35,000,000 | 0 |
Collateral Pledged | $ 685,000,000 | 247,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $200 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.00% | |
MSR Facilities | Servicing | Notes payable to banks | $150 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 400,000,000 | 150,000,000 |
Debt outstanding, gross | 0 | 0 |
Collateral Pledged | $ 601,000,000 | 228,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $150 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.00% | |
MSR Facilities | Servicing | 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 | $ 69,000,000 | 74,000,000 |
MSR Facilities | Servicing | 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 | $ 1,200,000,000 | 900,000,000 |
Advance Financing, Internally Allocated | Servicing | Loans payable | $425 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 940,000,000 | 640,000,000 |
Debt outstanding, gross | 170,000,000 | 235,000,000 |
Collateral Pledged | $ 228,000,000 | 305,000,000 |
Advance Financing, Internally Allocated | Servicing | Loans payable | $425 advance facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.50% | |
MSR Financing, Internally Allocated | Servicing | 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 | $ 940,000,000 | 668,000,000 |
MSR Financing, Internally Allocated | Servicing | Notes payable to banks | $260 warehouse facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on rate | 3.50% | |
MSR Financing, Internally Allocated | Originations | Notes payable to banks | $260 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | $ 260,000,000 | 260,000,000 |
Advance, Warehouse and MSR Facilities | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | 8,219,000,000 | 6,269,000,000 |
Collateral Pledged | 10,714,000,000 | 7,508,000,000 |
Unamortized debt issuance costs | (13,000,000) | (11,000,000) |
Advance and warehouse facilities, net | $ 8,206,000,000 | $ 6,258,000,000 |
Indebtedness - Summary of Unsec
Indebtedness - Summary of Unsecured Senior Notes (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Unsecured senior notes, net | $ 2,076,000,000 | $ 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 | (24,000,000) | (26,000,000) |
Unsecured senior notes, net | 2,076,000,000 | 2,074,000,000 |
Unsecured Senior Notes | $850 face value, 5.500% interest rate 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 | |
Debt Instrument, Interest Rate, Stated Percentage | 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 | |
Debt Instrument, Interest Rate, Stated Percentage | 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 | |
Debt Instrument, Interest Rate, Stated Percentage | 6.00% |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | |||
Gain on redemption of unsecured senior notes | $ 0 | $ (52) | |
Unsecured Senior Notes | |||
Debt Instrument [Line Items] | |||
Maximum percentage redeemable on unsecured debt | 40.00% | ||
Repayments of debt | $ 0 | 100 | |
Amount of principal amount outstanding repaid | $ 950 | $ 0 | 1,548 |
Gain on redemption of unsecured senior notes | $ 53 | $ 52 |
Indebtedness - Schedule of Note
Indebtedness - Schedule of Notes Maturity (Details) - Unsecured Senior Notes - USD ($) $ in Millions | Sep. 30, 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 |
Securitizations and Financing_2
Securitizations and Financings - Assets and Liabilities of Consolidated VIEs (Details) - Residential mortgage - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets - transfers accounted for as secured borrowings | $ 410 | $ 488 |
Liabilities - transfers accounted for as secured borrowings | 304 | 359 |
Restricted cash | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets - transfers accounted for as secured borrowings | 40 | 47 |
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 | 370 | 441 |
Advance facilities, net(1) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities - transfers accounted for as secured borrowings | 304 | 358 |
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 |
Securitizations and Financing_3
Securitizations and Financings - Securitization Trusts (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Variable Interest Entities and Securitizations [Abstract] | ||
Total collateral balances - UPB | $ 1,171 | $ 1,326 |
Total certificate balances | 1,172 | 1,329 |
Financial Asset, Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Unconsolidated securitization trusts | $ 140 | $ 154 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock Repurchased and Retired [Line Items] | |||||
Stock Repurchased During Period, Value | $ 368 | $ 24 | $ 516 | $ 24 | |
Common Stock | |||||
Stock Repurchased and Retired [Line Items] | |||||
Repurchase of common stock (in shares) | 11,073 | (3,700) | 1,187 | 15,578 | 1,187 |
Stock Repurchased During Period, Value | $ 119 | ||||
Parent | |||||
Stock Repurchased and Retired [Line Items] | |||||
Stock Repurchased During Period, Value | $ 368 | $ 24 | $ 516 | $ 24 | |
Preferred Stock | |||||
Stock Repurchased and Retired [Line Items] | |||||
Stock Repurchased and Retired During Period, Shares | 1,000 | 1,000 | |||
Common Stock and Preferred Stock | |||||
Stock Repurchased and Retired [Line Items] | |||||
Stock Repurchased During Period, Value | $ (396) |
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net income from continuing operations | $ 310 | $ 187 | $ 1,296 | $ 105 |
Less: Net income attributable to non-controlling interests | 0 | 5 | 0 | 2 |
Less: Undistributed earnings from continuing operations attributable to participating stockholders | 1 | 2 | 9 | 1 |
Less: Premium on retirement of preferred stock | 28 | 0 | 28 | 0 |
Net income from continuing operations attributable to Mr. Cooper common stockholders | 281 | 180 | 1,259 | 102 |
Net (loss) income from discontinued operations | (11) | 27 | 3 | 11 |
Less: Undistributed earnings from discontinued operations attributable to participating stockholders | 0 | 0 | 0 | 0 |
Net (loss) income from discontinued operations attributable to Mr. Cooper common stockholders | (11) | 27 | 3 | 11 |
Net income | 299 | 214 | 1,299 | 116 |
Less: Net earnings attributable to non-controlling interests | 0 | 5 | 0 | 2 |
Net income attributable to Mr. Cooper | 299 | 209 | 1,299 | 114 |
Less: Undistributed earnings attributable to participating stockholders | 1 | 2 | 9 | 1 |
Net income attributable to common stockholders | $ 270 | $ 207 | $ 1,262 | $ 113 |
Earnings Per Share, Basic [Abstract] | ||||
Income (Loss) from Continuing Operations, Per Basic Share | $ 3.56 | $ 1.98 | $ 14.85 | $ 1.12 |
Income (Loss) from Continuing Operations, Per Diluted Share | 3.42 | 1.91 | 14.20 | 1.09 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | (0.14) | 0.28 | 0.04 | 0.11 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | (0.13) | 0.27 | 0.03 | 0.11 |
Basic (in dollars per share) | 3.42 | 2.26 | 14.89 | 1.23 |
Diluted (in dollars per share) | $ 3.29 | $ 2.18 | $ 14.23 | $ 1.20 |
Weighted average shares of common stock outstanding (in thousands): | ||||
Basic (in shares) | 78,944 | 91,682 | 84,809 | 91,688 |
Dilutive effect of stock awards (in shares) | 2,826 | 2,563 | 3,176 | 1,529 |
Dilutive effect of participating securities (in shares) | 301 | 839 | 658 | 839 |
Diluted (in shares) | 82,071 | 95,084 | 88,643 | 94,056 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 25.00% | 23.90% | 24.00% | 23.80% |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures - Narrative (Details) | Mar. 12, 2021 |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Title Business | Mr. Cooper Group Inc. | Blend Labs, Inc. | |
Debt and Equity Securities, FV-NI [Line Items] | |
Ownership interest percentage | 9.90% |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Mortgage loans held for sale | $ 7,939 | $ 5,720 |
Liabilities | ||
Mortgage servicing rights financing | 20 | 33 |
Recurring Fair Value Measurements | ||
Assets | ||
Mortgage loans held for sale | 7,939 | 5,720 |
Forward mortgage servicing rights | 3,666 | 2,703 |
Equity securities | 58 | |
Liabilities | ||
Mortgage servicing rights financing | 20 | 33 |
Excess spread financing | 822 | 934 |
Recurring Fair Value Measurements | IRLCs | ||
Assets | ||
Derivative financial instruments | 167 | 414 |
Recurring Fair Value Measurements | LPCs | ||
Assets | ||
Derivative financial instruments | 6 | 38 |
Liabilities | ||
Derivative financial instruments | 13 | 1 |
Recurring Fair Value Measurements | Forward MBS trades | ||
Assets | ||
Derivative financial instruments | 61 | 37 |
Liabilities | ||
Derivative financial instruments | 23 | 156 |
Recurring Fair Value Measurements | Swap futures | ||
Liabilities | ||
Derivative financial instruments | 12 | |
Recurring Fair Value Measurements | Level 1 | ||
Assets | ||
Mortgage loans held for sale | 0 | 0 |
Forward mortgage servicing rights | 0 | 0 |
Equity securities | 8 | |
Liabilities | ||
Mortgage servicing rights financing | 0 | 0 |
Excess spread financing | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | IRLCs | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | LPCs | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | Forward MBS trades | ||
Assets | ||
Derivative financial instruments | 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 | 7,939 | 5,720 |
Forward mortgage servicing rights | 0 | 0 |
Equity securities | 0 | |
Liabilities | ||
Mortgage servicing rights financing | 0 | 0 |
Excess spread financing | 0 | 0 |
Recurring Fair Value Measurements | Level 2 | IRLCs | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 2 | LPCs | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | 0 |
Recurring Fair Value Measurements | Level 2 | Forward MBS trades | ||
Assets | ||
Derivative financial instruments | 61 | 37 |
Liabilities | ||
Derivative financial instruments | 23 | 156 |
Recurring Fair Value Measurements | Level 2 | Swap futures | ||
Liabilities | ||
Derivative financial instruments | 12 | |
Recurring Fair Value Measurements | Level 3 | ||
Assets | ||
Mortgage loans held for sale | 0 | 0 |
Forward mortgage servicing rights | 3,666 | 2,703 |
Equity securities | 50 | |
Liabilities | ||
Mortgage servicing rights financing | 20 | 33 |
Excess spread financing | 822 | 934 |
Recurring Fair Value Measurements | Level 3 | IRLCs | ||
Assets | ||
Derivative financial instruments | 167 | 414 |
Recurring Fair Value Measurements | Level 3 | LPCs | ||
Assets | ||
Derivative financial instruments | 6 | 38 |
Liabilities | ||
Derivative financial instruments | 13 | 1 |
Recurring Fair Value Measurements | Level 3 | Forward MBS trades | ||
Assets | ||
Derivative financial instruments | 0 | 0 |
Liabilities | ||
Derivative financial instruments | 0 | $ 0 |
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 | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Excess spread financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | $ 934 | $ 1,311 |
Changes in fair value included in earnings | 6 | (132) |
Other changes | 0 | 0 |
Purchases/Additions | 0 | 0 |
Issuances | 0 | 24 |
Sales | 0 | |
Settlements and repayments | (118) | (159) |
Balance - end of period | 822 | 1,044 |
Mortgage servicing rights financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 33 | 37 |
Changes in fair value included in earnings | (13) | 10 |
Other changes | 0 | 0 |
Purchases/Additions | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | |
Settlements and repayments | 0 | 0 |
Balance - end of period | 20 | 47 |
LPCs | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 1 | |
Changes in fair value included in earnings | 12 | |
Other changes | 0 | |
Purchases/Additions | 0 | |
Issuances | 0 | |
Sales | 0 | |
Settlements and repayments | 0 | |
Balance - end of period | 13 | |
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 |
Changes in fair value included in earnings | (296) | (1,332) |
Other changes | 44 | 57 |
Purchases/Additions | 438 | 30 |
Issuances | 790 | 412 |
Sales | (13) | |
Settlements and repayments | 0 | 0 |
Balance - end of period | 3,666 | 2,663 |
Equity securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 0 | |
Changes in fair value included in earnings | 0 | |
Other changes | 0 | |
Purchases/Additions | 50 | |
Issuances | 0 | |
Sales | 0 | |
Settlements and repayments | 0 | |
Balance - end of period | 50 | |
IRLCs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 414 | 135 |
Changes in fair value included in earnings | (247) | 279 |
Other changes | 0 | 0 |
Purchases/Additions | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | |
Settlements and repayments | 0 | 0 |
Balance - end of period | 167 | 414 |
LPCs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 38 | 12 |
Changes in fair value included in earnings | (32) | 26 |
Other changes | 0 | 0 |
Purchases/Additions | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | |
Settlements and repayments | 0 | 0 |
Balance - end of period | $ 6 | $ 38 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable Inputs (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2021 | Sep. 30, 2021 | |
Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Average life(2) | 5 years | 5 years 9 months 18 days |
Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Average life(2) | 5 years 1 month 6 days | 5 years 4 months 24 days |
Min | Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 8.20% | 9.50% |
Prepayment speed | 14.20% | 11.80% |
Cost to service per loan(1) | $ 66 | $ 61 |
Min | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | (0.00010) | (0.00013) |
Min | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 9.90% | 9.50% |
Prepayment speed | 13.90% | 12.80% |
Recapture rate | 17.70% | 17.30% |
Min | Mortgage servicing rights financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 4.60% | 5.20% |
Annual advance recovery rates | 18.30% | 18.80% |
Max | Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 12.00% | 13.80% |
Prepayment speed | 21.30% | 16.50% |
Cost to service per loan(1) | $ 257 | $ 180 |
Max | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | 0.00022 | 0.00024 |
Max | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 15.70% | 13.80% |
Prepayment speed | 15.00% | 15.10% |
Recapture rate | 24.20% | 28.90% |
Max | Mortgage servicing rights financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 8.50% | 8.00% |
Annual advance recovery rates | 22.00% | 22.60% |
Weighted Average | Forward MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 9.40% | 10.90% |
Prepayment speed | 15.40% | 12.90% |
Cost to service per loan(1) | $ 98 | $ 79 |
Weighted Average | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | 0.00012 | 0.00013 |
Weighted Average | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 12.20% | 11.20% |
Prepayment speed | 14.40% | 13.40% |
Recapture rate | 19.50% | 23.10% |
Weighted Average | Mortgage servicing rights financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 7.50% | 6.70% |
Annual advance recovery rates | 19.90% | 20.70% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Balance Sheet Line Item (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Financial assets | |||
Restricted cash | $ 118 | $ 135 | $ 152 |
Loans subject to repurchase from Ginnie Mae | 2,703 | 6,159 | |
Financial liabilities | |||
Unsecured senior notes, net | 2,076 | 2,074 | |
Advance and warehouse facilities, net | 8,206 | 6,258 | |
Recurring Fair Value Measurements | |||
Financial assets | |||
Cash and cash equivalents | 731 | 695 | |
Restricted cash | 118 | 135 | |
Loans subject to repurchase from Ginnie Mae | 2,703 | 6,159 | |
Financial liabilities | |||
Unsecured senior notes, net | 2,076 | 2,074 | |
Advance and warehouse facilities, net | 8,206 | 6,258 | |
Liability for loans subject to repurchase from Ginnie Mae | 2,703 | 6,159 | |
Recurring Fair Value Measurements | Level 1 | |||
Financial assets | |||
Cash and cash equivalents | 731 | 695 | |
Restricted cash | 118 | 135 | |
Loans subject to repurchase from Ginnie Mae | 0 | 0 | |
Financial liabilities | |||
Unsecured senior notes, net | 2,168 | 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 | 2,703 | 6,159 | |
Financial liabilities | |||
Unsecured senior notes, net | 0 | 0 | |
Advance and warehouse facilities, net | 8,219 | 6,269 | |
Liability for loans subject to repurchase from Ginnie Mae | 2,703 | 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 | 909 | 940 | |
Nonrecurring Fair Value Measurements | Level 1 | |||
Financial assets | |||
Advances and other receivables, net | 0 | 0 | |
Nonrecurring Fair Value Measurements | Level 2 | |||
Financial assets | |||
Advances and other receivables, net | 0 | 0 | |
Nonrecurring Fair Value Measurements | Level 3 | |||
Financial assets | |||
Advances and other receivables, net | $ 909 | $ 940 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Loss Contingencies [Line Items] | ||||
Legal fees | $ 10 | $ 9 | $ 31 | $ 36 |
Contractual Obligation | $ 83 | $ 83 | ||
Contractual Obligation, Term of Contract | 5 years | 5 years | ||
Litigation and regulatory matters | Min | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | $ 8 | $ 8 | ||
Litigation and regulatory matters | Max | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | $ 15 | $ 15 |
Segment Information - Financial
Segment Information - Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Revenues: | ||||||
Service related, net | $ 288 | $ 218 | $ 860 | $ 151 | ||
Net gain on mortgage loans held for sale | 572 | 645 | 1,833 | 1,594 | ||
Total revenues | 860 | 863 | 2,693 | 1,745 | ||
Total expenses | 402 | 455 | 1,281 | 1,277 | ||
Other income (expenses) | ||||||
Interest income | 66 | 17 | 163 | 114 | ||
Interest expense | (118) | (128) | (363) | (394) | ||
Other income, net | 8 | (51) | 494 | (50) | ||
Total other (expenses) income, net | (44) | (162) | 294 | (330) | ||
Income (loss) from continuing operations before income tax expense (benefit) | 414 | 246 | 1,706 | 138 | ||
Depreciation and amortization for property and equipment and intangible assets from continuing operations | 14 | 19 | 45 | 55 | ||
Total assets | 21,661 | 21,755 | 21,661 | 21,755 | $ 24,165 | |
Assets of discontinued operations | 3,722 | 3,722 | 5,347 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Title Business | ||||||
Other income (expenses) | ||||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 487 | |||||
Discontinued Operations, Held-for-sale or Disposed of by Sale [Member] | Champion Mortgage [Member] | ||||||
Other income (expenses) | ||||||
Assets of discontinued operations | 3,722 | 3,722 | $ 5,347 | |||
Operating Segments | Servicing | ||||||
Revenues: | ||||||
Service related, net | 209 | 83 | 558 | (237) | ||
Net gain on mortgage loans held for sale | 142 | 40 | 466 | 119 | ||
Total revenues | 351 | 123 | 1,024 | (118) | ||
Total expenses | 128 | 123 | 359 | 354 | ||
Other income (expenses) | ||||||
Interest income | 39 | 1 | 87 | 44 | ||
Interest expense | (65) | (68) | (201) | (195) | ||
Other income, net | 0 | 0 | 0 | 0 | ||
Total other (expenses) income, net | (26) | (67) | (114) | (151) | ||
Income (loss) from continuing operations before income tax expense (benefit) | 197 | (67) | 551 | (623) | ||
Depreciation and amortization for property and equipment and intangible assets from continuing operations | 11 | 6 | 23 | 14 | ||
Total assets | 14,560 | 14,707 | 14,560 | 14,707 | ||
Operating Segments | Originations | ||||||
Revenues: | ||||||
Service related, net | 44 | 27 | 132 | 68 | ||
Net gain on mortgage loans held for sale | 430 | 605 | 1,367 | 1,475 | ||
Total revenues | 474 | 632 | 1,499 | 1,543 | ||
Total expenses | 208 | 195 | 665 | 528 | ||
Other income (expenses) | ||||||
Interest income | 27 | 16 | 76 | 69 | ||
Interest expense | (22) | (15) | (70) | (55) | ||
Other income, net | 0 | 0 | 0 | 0 | ||
Total other (expenses) income, net | 5 | 1 | 6 | 14 | ||
Income (loss) from continuing operations before income tax expense (benefit) | 271 | 438 | 840 | 1,029 | ||
Depreciation and amortization for property and equipment and intangible assets from continuing operations | 8 | 5 | 18 | 12 | ||
Total assets | 4,949 | 4,250 | 4,949 | 4,250 | ||
Corporate/Other | ||||||
Revenues: | ||||||
Service related, net | 35 | 108 | 170 | 320 | ||
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 | ||
Total revenues | 35 | 108 | 170 | 320 | ||
Total expenses | 66 | 137 | 257 | 395 | ||
Other income (expenses) | ||||||
Interest income | 0 | 0 | 0 | 1 | ||
Interest expense | (31) | (45) | (92) | (144) | ||
Other income, net | 8 | (51) | 494 | (50) | ||
Total other (expenses) income, net | (23) | (96) | 402 | (193) | ||
Income (loss) from continuing operations before income tax expense (benefit) | (54) | (125) | 315 | (268) | ||
Depreciation and amortization for property and equipment and intangible assets from continuing operations | (5) | 8 | 4 | 29 | ||
Total assets | $ 2,152 | $ 2,798 | $ 2,152 | $ 2,798 |