Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 21, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
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, $0.01 par value per share | |
Trading Symbol | COOP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 73,906,095 | |
Entity Central Index Key | 0000933136 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 579 | $ 895 |
Restricted cash | 130 | 146 |
Mortgage servicing rights at fair value | 6,006 | 4,223 |
Advances and other receivables, net of reserves of $152 and $167, respectively | 1,044 | 1,228 |
Mortgage loans held for sale at fair value | 3,593 | 4,381 |
Property and equipment, net of accumulated depreciation of $107 and $122, respectively | 75 | 98 |
Deferred tax assets, net | 794 | 991 |
Other assets | 2,269 | 2,242 |
Total assets | 14,490 | 14,204 |
Liabilities and Stockholders’ Equity | ||
Unsecured senior notes, net | 2,670 | 2,670 |
Advance and warehouse facilities, net | 4,795 | 4,997 |
Payables and other liabilities | 2,203 | 2,392 |
MSR related liabilities - nonrecourse at fair value | 845 | 778 |
Total liabilities | 10,513 | 10,837 |
Commitments and contingencies (Note 15) | ||
Preferred stock at $0.00001 - 10 million shares authorized, zero shares issued, zero shares outstanding; aggregate liquidation preference of zero | 0 | 0 |
Common stock at $0.01 par value - 300 million shares authorized, 93.2 million shares issued | 1 | 1 |
Additional paid-in-capital | 1,085 | 1,116 |
Retained earnings | 3,537 | 2,879 |
Treasury shares at cost - 19.3 million and 19.4 million shares, respectively | (647) | (630) |
Total Mr. Cooper stockholders’ equity | 3,976 | 3,366 |
Non-controlling interests | 1 | 1 |
Total stockholders’ equity | 3,977 | 3,367 |
Total liabilities and stockholders’ equity | $ 14,490 | $ 14,204 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Advances and other receivables, reserves | $ 152,000,000 | $ 167,000,000 |
Accumulated depreciation | $ 107,000,000 | $ 122,000,000 |
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 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, liquidation preference | $ 0 | $ 0 |
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 | 93,200,000 |
Treasury stock (in shares) | 19,300,000 | 19,400,000 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Service related, net | $ 755 | $ 580 |
Net gain on mortgage loans held for sale | 297 | 679 |
Total revenues | 1,052 | 1,259 |
Expenses: | ||
Salaries, wages and benefits | 228 | 277 |
General and administrative | 110 | 177 |
Total expenses | 338 | 454 |
Interest income | 36 | 46 |
Interest expense | (106) | (126) |
Other income, net | 222 | 0 |
Total other income (expense), net | 152 | (80) |
Income from continuing operations before income tax expense | 866 | 725 |
Less: Income tax expense | 208 | 166 |
Net income from continuing operations | 658 | 559 |
Net income from discontinued operations | 0 | 2 |
Net income | 658 | 561 |
Less: Undistributed earnings attributable to participating stockholders | 0 | 5 |
Net income attributable to common stockholders | $ 658 | $ 556 |
Earnings Per Share [Abstract] | ||
Income (Loss) from Continuing Operations, Per Basic Share | $ 8.91 | $ 6.20 |
Income (Loss) from Continuing Operations, Per Diluted Share | 8.59 | 5.90 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | 0 | 0.02 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | 0 | 0.02 |
Basic (in dollars per share) | 8.91 | 6.22 |
Diluted (in dollars per share) | $ 8.59 | $ 5.92 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Share Amount | Total Mr. Cooper Stockholders’ Equity | Non-controlling Interests |
Shares outstanding, beginning balance (in shares) at Dec. 31, 2020 | 1,000 | 89,457 | ||||||
Stockholders' equity, beginning balance at Dec. 31, 2020 | $ 2,504 | $ 0 | $ 1 | $ 1,126 | $ 1,434 | $ (58) | $ 2,503 | $ 1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 1,183 | |||||||
Shares issued / (surrendered) under incentive compensation plan | (19) | (19) | (19) | |||||
Share-based compensation | 6 | 6 | 6 | |||||
Repurchase of common stock (in shares) | (4,505) | |||||||
Repurchase of common stock | (148) | (148) | (148) | |||||
Net income | 561 | 561 | 561 | 0 | ||||
Shares outstanding, ending balance (in shares) at Mar. 31, 2021 | 1,000 | 86,135 | ||||||
Stockholders' equity, ending balance at Mar. 31, 2021 | 2,904 | $ 0 | $ 1 | 1,113 | 1,995 | (206) | 2,903 | 1 |
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] | ||||||||
Repurchase of common stock (in shares) | 14,773 | |||||||
Shares outstanding, ending balance (in shares) at Dec. 31, 2021 | 0 | 73,777 | ||||||
Stockholders' equity, ending balance at Dec. 31, 2021 | 3,367 | $ 0 | $ 1 | 1,116 | 2,879 | (630) | 3,366 | 1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 850 | |||||||
Shares issued / (surrendered) under incentive compensation plan | (21) | (39) | 18 | (21) | ||||
Share-based compensation | 8 | 8 | 8 | |||||
Repurchase of common stock (in shares) | (721) | |||||||
Repurchase of common stock | (35) | (35) | (35) | |||||
Net income | 658 | 658 | 658 | 0 | ||||
Shares outstanding, ending balance (in shares) at Mar. 31, 2022 | 0 | 73,906 | ||||||
Stockholders' equity, ending balance at Mar. 31, 2022 | $ 3,977 | $ 0 | $ 1 | $ 1,085 | $ 3,537 | $ (647) | $ 3,976 | $ 1 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Operating Activities | |||
Net income | $ 658 | $ 561 | |
Net income from discontinued operations | 0 | 2 | |
Net income from continuing operations | 658 | 559 | |
Adjustments to reconcile net income from continuing operations to net cash attributable to operating activities: | |||
Deferred tax expense | 197 | 111 | |
Net gain on mortgage loans held for sale | (297) | (679) | |
Provision for servicing and non-servicing reserves | 6 | 13 | |
Fair value changes and amortization of mortgage servicing rights | (563) | (278) | |
Fair value changes in MSR related liabilities | 99 | 31 | |
Depreciation and amortization for property and equipment and intangible assets | 11 | 15 | |
Gain on disposition of assets | (223) | 0 | |
Other operating activities | 21 | 20 | |
Repurchases of forward loan assets out of Ginnie Mae securitizations | (2,249) | (2,255) | |
Mortgage loans originated and purchased for sale, net of fees | (11,598) | (25,214) | |
Sales proceeds and loan payment proceeds for mortgage loans held for sale | 14,727 | 27,048 | |
Changes in assets and liabilities: | |||
Advances and other receivables | 169 | 71 | |
Other assets | (99) | 106 | |
Payables and other liabilities | 67 | 194 | |
Net cash attributable to operating activities - continuing operations | 926 | (258) | |
Net cash attributable to operating activities - discontinued operations | 0 | 182 | |
Net cash attributable to operating activities | 926 | (76) | |
Investing Activities | |||
Property and equipment additions, net of disposals | (3) | (14) | |
Purchase of mortgage servicing rights | (965) | (69) | |
Proceeds on sale of mortgage servicing rights | 4 | 0 | |
Other investing activities | 0 | 1 | |
Net cash attributable to investing activities - continuing operations | (964) | (82) | |
Net cash attributable to investing activities - discontinued operations | 0 | 0 | |
Net cash attributable to investing activities | (964) | (82) | |
Financing Activities | |||
(Decrease) increase in advance and warehouse facilities | (204) | 608 | |
Settlements and repayments of excess spread financing | (32) | (41) | |
Repurchase of common stock | (35) | (148) | |
Other financing activities | (23) | (22) | |
Net cash attributable to financing activities - continuing operations | (294) | 397 | |
Net cash attributable to financing activities - discontinued operations | 0 | (217) | |
Net cash attributable to financing activities | (294) | 180 | |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (332) | 22 | |
Cash, cash equivalents, and restricted cash - beginning of period | 1,041 | 913 | |
Cash, cash equivalents, and restricted cash - end of period(1) | [1] | 709 | 935 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |||
Equity consideration received from disposition of assets | 250 | 0 | |
Purchase of mortgage servicing rights | $ 64 | $ 0 | |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets. March 31, 2022 March 31, 2021 Cash and cash equivalents $ 579 $ 674 Restricted cash 130 176 Restricted cash within assets of discontinued operations — 85 Total cash, cash equivalents, and restricted cash $ 709 $ 935 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Cash Flows [Abstract] | |||
Cash and cash equivalents | $ 579 | $ 674 | |
Restricted cash | 130 | 176 | |
Restricted cash within assets of discontinued operations | 0 | 85 | |
Total cash, cash equivalents, and restricted cash | [1] | $ 709 | $ 935 |
[1] | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets. March 31, 2022 March 31, 2021 Cash and cash equivalents $ 579 $ 674 Restricted cash 130 176 Restricted cash within assets of discontinued operations — 85 Total cash, cash equivalents, and restricted cash $ 709 $ 935 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
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. 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. 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, 2021. 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. Share-based compensation for restricted stock units granted to employees of the Company, consultants, and non-employee directors is based on the fair market value of the Company’s common stock on the grant date and recognized as an expense over the requisite employee service period on a straight-line basis using an accelerated attribution model. Shares for these awards are issued to employees from treasury stock. 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. These investments are initially measured at cost and subsequently adjusted for Company’s proportionate share of earnings and losses in the investee. Investments in certain companies over which the Company does not exert significant influence are recorded at fair value, or at cost upon election of measurement alternative, at the end of each reporting period. 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 2021 condensed consolidated financial statements to conform to 2022 presentation. Such reclassifications did not affect total revenues or net income. |
Discontinued Operations and Dis
Discontinued Operations and Disposal Groups | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure | 2. Dispositions Sale of Mortgage Servicing Platform On March 31, 2022, the Company completed the sale of certain assets and liabilities of its servicing and subservicing technology platform for performing and non-performing mortgage loans (the “Mortgage Servicing Platform”) to Sagent M&C, LLC (“Sagent”), in exchange for Class A-1 Common Units equal to 19.9% ownership of Sagent, and the sale of certain tangible personal property of the Company used in the conduct of the Mortgage Servicing Platform in exchange for $9.9 in cash, for total consideration of $260 (the “Sagent Transaction”). In connection with the Sagent Transaction, the Company recorded a gain of $223, which was included in other income, net within the condensed consolidated statements of operations, and recorded $4 transaction costs during the three months ended March 31, 2022. The net carrying amount of assets and liabilities associated with the Sagent Transaction was $31 and reported under Corporate/Other. The Company accounted for the equity interest under the equity method of accounting, as the Company has the ability to exercise significant influence over Sagent’s operating and financial decisions but does not own a majority equity interest or otherwise control the respective entity. Under the equity method of accounting, the investment is initially stated at cost and subsequently adjusted for additional investments and the Company’s proportionate share of Sagent’s earnings or losses and distributions. The initial cost of the equity interest recorded was $250, which represented the fair value as of March 31, 2022. Sale of Reverse Servicing Portfolio On December 1, 2021, the Company completed the sale of its reverse servicing portfolio, operating under Champion Mortgage brand (“Champion”), to Mortgage Assets Management, LLC and its affiliates (“MAM”) for total consideration of $1,640. Upon close of the transaction, MAM assumed Champion’s reverse portfolio and related operations. The Company recorded no transaction costs during the three months ended March 31, 2022 and 2021. The carrying amounts of assets and liabilities associated with the reverse servicing operation were reported under the Servicing segment. 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 related results of operations are reported as discontinued operations in the condensed consolidated statements of operations for prior periods presented. As part of the transaction, the Company entered into a transitional servicing agreement with MAM, under which the Company was compensated for continuing to subservice the reverse loans through the date that the loans are transferred out of Company’s servicing system. The transfer of the loans out of the Company’s servicing system was completed on April 1, 2022. In addition, the Company retained certain loans related to the reverse servicing portfolio, primarily related to previously liquidated loans. As of March 31, 2022, the retained total assets and total liabilities were $48 and $39, respectively. As of December 31, 2021, the retained total assets and total liabilities were $55 and $39, respectively. The retained assets and liabilities are included in other assets, and payables and other liabilities, respectively, on the condensed consolidated balance sheets. The following table sets forth the condensed consolidated statements of operations data for discontinued operations for the three months ended March 31, 2021: Revenue - service related, net $ 8 Salaries, wages and benefits expense (8) General and administrative expense (7) Interest income 43 Interest expense (33) Income from discontinued operations before income tax expense 3 Less: Income tax expense 1 Net income from discontinued operations $ 2 |
Mortgage Servicing Rights and R
Mortgage Servicing Rights and Related Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 December 31, 2021 MSRs - fair value $ 6,006 $ 4,223 Excess spread financing - fair value $ 815 $ 768 Mortgage servicing rights financing - fair value 30 10 MSR related liabilities - nonrecourse at fair value $ 845 $ 778 Mortgage Servicing Rights The following table sets forth the activities of MSRs: Three Months Ended March 31, MSRs - Fair Value 2022 2021 Fair value - beginning of period $ 4,223 $ 2,703 Additions: Servicing retained from mortgage loans sold 200 288 Purchases of servicing rights 1,015 67 Dispositions: Sales of servicing assets (4) (2) Changes in fair value: Changes in valuation inputs or assumptions used in the valuation model (MSR MTM) 798 521 Changes in valuation due to amortization (235) (243) Other changes 9 20 Fair value - end of period $ 6,006 $ 3,354 During the three months ended March 31, 2022 and 2021, the Company sold $361 and $50 in unpaid principal balance (“UPB”) of MSRs, of which $342 and none were retained by the Company as subservicer, respectively. 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 MSRs: March 31, 2022 December 31, 2021 MSRs - UPB and Fair Value Breakdown UPB Fair Value UPB Fair Value Investor Pools Agency $ 377,225 $ 5,635 $ 302,851 $ 3,859 Non-agency 34,615 371 36,357 364 Total $ 411,840 $ 6,006 $ 339,208 $ 4,223 Refer to Note 13, Fair Value Measurements , for further discussion on key weighted-average inputs and assumptions used in estimating the fair value of MSRs. The following table shows the hypothetical effect on the fair value of the Company’s 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 MSRs - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change 10% Adverse Change 20% Adverse Change March 31, 2022 Mortgage servicing rights $ (207) $ (399) $ (134) $ (259) $ (56) $ (113) December 31, 2021 Mortgage servicing rights $ (141) $ (272) $ (148) $ (286) $ (46) $ (93) 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 $815 and $768 as of March 31, 2022 and December 31, 2021, respectively. Refer to Note 13, Fair Value Measurements , for key weighted-average inputs and assumptions used in the valuation of excess spread financing liability. The following table shows the hypothetical effect on the Company’s excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities for the dates indicated: Discount Rate Prepayment Speeds Excess Spread Financing - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change March 31, 2022 Excess spread financing $ 31 $ 64 $ 23 $ 47 December 31, 2021 Excess spread financing $ 26 $ 54 $ 28 $ 58 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 $30 and $10 as of March 31, 2022 and December 31, 2021, 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 March 31, Total Revenues - Servicing 2022 2021 Contractually specified servicing fees (1) $ 327 $ 276 Other service-related income (1) 48 145 Incentive and modification income (1) 9 14 Late fees (1) 19 18 Mark-to-market adjustments (2) 553 365 Amortization, net of accretion (3) (202) (167) Other (4) (38) (83) Total revenues - Servicing $ 716 $ 568 (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 $6 and $12 for the three months ended March 31, 2022 and 2021. (3) Amortization is net of excess spread accretion of $33 and $76 during the three months ended March 31, 2022 and 2021, 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 | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 December 31, 2021 Servicing advances, net of $16 and $19 purchase discount, respectively $ 1,075 $ 1,263 Receivables from agencies, investors and prior servicers, net of $8 and $12 purchase discount, respectively 121 132 Reserves (152) (167) Total advances and other receivables, net $ 1,044 $ 1,228 The following table sets forth the activities of the servicing reserves for advances and other receivables: Three Months Ended March 31, Reserves for Advances and Other Receivables 2022 2021 Balance - beginning of period $ 167 $ 208 Provision and other additions (1) 16 15 Write-offs (31) (17) Balance - end of period $ 152 $ 206 (1) The Company recorded a provis ion of $6 and $12 through the MTM adjustments in revenues - service related, net, in the condensed consolidated statements of operations during the three months ended March 31, 2022 and 2021, respectively, for inactive and liquidated l oans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate. Purchase Discount for Advances and Other Receivables The following tables set forth the activities of the purchase discounts for advances and other receivables: Three Months Ended March 31, 2022 2021 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 $ 19 $ 12 $ 72 $ 21 Utilization of purchase discounts (3) (4) (9) (1) Balance - end of period $ 16 $ 8 $ 63 $ 20 Credit Loss for Advances and Other Receivables During the three months ended March 31, 2022 and 2021, the Company increased the current expected credit loss (“CECL”) reserve by $4 and $1, respectively. In addition, the Company wrote off $5 of the CECL reserve during the three months ended March 31, 2022. As of March 31, 2022, the total CECL reserve was $30, of which $22 and $8 were recorded in reserves and purchase discount for advances and other receivables, respectively. As of March 31, 2021 , the total CECL reserve was $39, of which $22 and $17 were recorded in reserves and purchase discount for advances and other receivables, respectively. 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 | 3 Months Ended |
Mar. 31, 2022 | |
Mortgage Loans Held for Sale and Investment [Abstract] | |
Mortgage Loans Held for Sale | 5. Mortgage Loans Held for Sale Mortgage loans held for sale are recorded at fair value as set forth below: Mortgage Loans Held for Sale March 31, 2022 December 31, 2021 Mortgage loans held for sale – UPB $ 3,607 $ 4,257 Mark-to-market adjustment (1) (14) 124 Total mortgage loans held for sale $ 3,593 $ 4,381 (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: Three Months Ended March 31, Mortgage Loans Held for Sale 2022 2021 Balance - beginning of period $ 4,381 $ 5,720 Loans sold (14,527) (26,734) Mortgage loans originated and purchased, net of fees 11,598 25,214 Repurchase of loans out of Ginnie Mae securitizations 2,249 2,255 Net change in unrealized loss on retained loans held for sale (109) (105) Net transfers of mortgage loans held for sale (1) 1 1 Balance - end of period $ 3,593 $ 6,351 (1) Amount reflects transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net, for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing. During the three months ended March 31, 2022 and 2021, the Company rece ived proceeds of $14,727 and $27,048, respectively, on the sale of mortgage loans held for sale, resulting in gains of $200 and $314, respectively. The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows: March 31, 2022 December 31, 2021 Mortgage Loans Held for Sale UPB Fair Value UPB Fair Value Non-accrual (1) $ 230 $ 224 $ 104 $ 94 (1) Non-accrual UPB includes $221 and $94 of UPB related to Ginnie Mae repurchased loans as of March 31, 2022 and December 31, 2021, respectively. The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $37 an d $16 as of March 31, 2022 and December 31, 2021, respectively. |
Loans Subject to Repurchase fro
Loans Subject to Repurchase from Ginnie Mae | 3 Months Ended |
Mar. 31, 2022 | |
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 $1,175 and $1,496 as of March 31, 2022 and December 31, 2021, respectively, which are included in both other assets and payables and other liabilities in the condensed consolidated balance sheets . Loans subject to repurchase from Ginnie Mae as of March 31, 2022 and December 31, 2021 includ e $1,003 and $1,301 loans in forbearance related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), respectively, whereby no payments have been received from borrowers for greater than 90 days. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The Company had goodwill of $120 as of March 31, 2022 and December 31, 2021, and intangible assets of $13 and $14 |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
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: March 31, 2022 Three Months Ended March 31, 2022 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2022 $ 543 $ 1 $ (24) Derivative financial instruments IRLCs 2022 3,122 72 (62) LPCs 2022 203 2 (1) Forward MBS trades 2022 4,653 79 72 Total derivative financial instruments - assets $ 7,978 $ 153 $ 9 Liabilities Derivative financial instruments IRLCs 2022 $ 551 $ 5 $ 5 LPCs 2022 658 8 6 Forward MBS trades 2022 695 6 (2) Swap futures 2022 1,097 49 43 Total derivative financial instruments - liabilities $ 3,001 $ 68 $ 52 March 31, 2021 Three Months Ended March 31, 2021 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2021 $ 2,341 $ 42 $ (60) Derivative financial instruments IRLCs 2021 8,950 232 (182) LPCs 2021 1,165 8 (30) Forward MBS trades 2021 22,566 286 249 Total derivative financial instruments - assets $ 32,681 $ 526 $ 37 Liabilities Derivative financial instruments IRLCs 2021 $ 240 $ 1 $ 1 LPCs 2021 3,974 38 37 Forward MBS trades 2021 6,341 76 (80) Swap futures 2021 60 1 1 Total derivative financial instruments - liabilities $ 10,615 $ 116 $ (41) As of March 31, 2022, the Company held $80 and $108 in collateral depo |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Indebtedness | 9. Indebtedness Advance and Warehouse Facilities March 31, 2022 December 31, 2021 Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral Pledged Advance Facilities $400 advance facility (1) August 2023 Servicing advance receivables $ 400 $ 219 $ 312 $ 234 $ 318 $350 advance facility October 2022 Servicing advance receivables 350 156 189 160 197 $350 advance facility January 2023 Servicing advance receivables 350 158 186 162 190 $75 advance facility December 2022 Servicing advance receivables 75 53 79 58 89 Advance facilities principal amount 586 766 614 794 Warehouse Facilities $4,000 warehouse facility February 2023 Mortgage loans or MBS 4,000 987 1,118 1,224 1,341 $2,500 warehouse facility October 2022 Mortgage loans or MBS 2,500 746 772 991 1,024 $1,600 warehouse facility (2) September 2023 Mortgage loans or MBS 1,600 148 161 409 425 $1,500 warehouse facility June 2022 Mortgage loans or MBS 1,500 349 352 356 345 $750 warehouse facility October 2022 Mortgage loans or MBS 750 256 272 256 270 $550 warehouse facility August 2022 Mortgage loans or MBS 550 48 49 87 89 $500 warehouse facility June 2023 Mortgage loans or MBS 500 216 224 188 194 $500 warehouse facility September 2022 Mortgage loans or MBS 500 284 293 419 430 $500 warehouse facility June 2022 Mortgage loans or MBS 500 137 163 39 39 $500 warehouse facility August 2023 Mortgage loans or MBS 500 178 184 38 39 $325 warehouse facility December 2022 Mortgage loans or MBS 325 38 38 67 67 $250 warehouse facility (3) May 2022 Mortgage loans or MBS 250 1 2 5 6 $200 warehouse facility June 2022 Mortgage loans or MBS 200 31 39 46 58 $30 warehouse facility (4) January 2022 Mortgage loans or MBS 30 — — — — Warehouse facilities principal amount 3,419 3,667 4,125 4,327 MSR Facilities $800 warehouse facility (1)(5) August 2023 MSR 800 260 1,345 260 1,107 $400 warehouse facility August 2022 MSR 400 300 1,246 — 838 $400 warehouse facility (2) September 2023 MSR 400 215 1,114 — 745 $50 warehouse facility November 2023 MSR 50 25 84 10 124 MSR facilities principal amount 800 3,789 270 2,814 Advance, warehouse and MSR facilities principal amount 4,805 $ 8,222 5,009 $ 7,935 Unamortized debt issuance costs (10) (12) Advance and warehouse facilities, net $ 4,795 $ 4,997 (1) Total capacity for this facility is $1,200, of which $400 is internally allocated for advance financing and $800 is internally allocated for MSR financing; capacity is fully fungible and is not restricted by these allocations, in comparison to $1,200, $940, and $260 respectively in 2021. (2) The capacity amount for this facility is $2,000, of which $400 is a sublimit for MSR financing. (3) The capacity amount for this warehouse facility decreased from $600 to $250 in 2022. (4) This facility was terminated in January 2022. (5) The capacity amount for this warehouse facility increased from $260 to $800 in 2022. The weighted average interest rate for advance facilities was 2.4% and 3.0% for three months ended March 31, 2022 and 2021, respectively. The weighted average interest rate for warehouse and MSR facilities was 2.1% and 2.2% for three months ended March 31, 2022 and 2021, respectively. Unsecured Senior Notes Unsecured senior notes consist of the following: Unsecured Senior Notes March 31, 2022 December 31, 2021 $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 $600 face value, 5.750% interest rate payable semi-annually, due November 2031 600 600 Unsecured senior notes principal amount 2,700 2,700 Unamortized debt issuance costs (30) (30) Unsecured senior notes, net $ 2,670 $ 2,670 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 three months ended March 31, 2022 and 2021. As of March 31, 2022, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows: Year Ending December 31, Amount 2022 through 2026 $ — Thereafter 2,700 Total unsecured senior notes principal amount $ 2,700 Interest Expense Interest expense primarily includes interest incurred on advance and warehouse facilities, unsecured senior notes, excess spread financing and compensating bank balances, as well as bank fees. The Company incurred interest expense related to advance and warehouse facilities, unsecured senior notes and excess spread financing o f $86 and $93 f or the three months ended March 31, 2022 and 2021 , respectively. Financial Covenants The Company’s credit facilities contain various financial covenants which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements, which are measured at the Company’s operating subsidiary, Nationstar Mortgage LLC. The Company was in compliance with its required financial covenants as of March 31, 2022. |
Securitizations and Financings
Securitizations and Financings | 3 Months Ended |
Mar. 31, 2022 | |
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: March 31, 2022 December 31, 2021 Consolidated Transactions with VIEs Transfers Transfers Assets Restricted cash $ 47 $ 50 Advances and other receivables, net 375 387 Total assets $ 422 $ 437 Liabilities Advance facilities, net (1) $ 314 $ 322 Payables and other liabilities — 1 Total liabilities $ 314 $ 323 (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 March 31, 2022 December 31, 2021 Total collateral balances - UPB $ 1,074 $ 1,122 Total certificate balances $ 1,061 $ 1,112 The Company has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of March 31, 2022 and December 31, 2021. 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 March 31, 2022 December 31, 2021 Unconsolidated securitization trusts $ 134 $ 138 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
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. I n 2021, the Company repurchased a total of 14,773 thousand shares of its common stock from affiliates of Kohlberg Kravis Roberts & Co. L.P. (“KKR”), a related party of the Company. In addition, in August 2021, the Company repurchased 1,000 thousand shares of its preferred stock from affiliates of KKR. After giving effect to these transactions, KKR no longer held any equity interests in the Company. The following table sets forth the computation of basic and diluted net income per common share (amounts in millions, except per share amounts): Three Months Ended March 31, Computation of Earnings Per Share 2022 2021 Net income from continuing operations $ 658 $ 559 Less: Undistributed earnings from continuing operations attributable to participating stockholders — 5 Net income from continuing operations attributable to Mr. Cooper common stockholders $ 658 $ 554 Net income from discontinued operations $ — $ 2 Less: Undistributed earnings from discontinued operations attributable to participating stockholders — — Net income from discontinued operations attributable to Mr. Cooper common stockholders $ — $ 2 Net income $ 658 $ 561 Less: Undistributed earnings attributable to participating stockholders — 5 Net income attributable to common stockholders $ 658 $ 556 Earnings from continuing operations per common share attributable to Mr. Cooper: Basic $ 8.91 $ 6.20 Diluted $ 8.59 $ 5.90 Earnings from discontinued operations per common share attributable to Mr. Cooper: Basic $ — $ 0.02 Diluted $ — $ 0.02 Earnings per common share attributable to Mr. Cooper: Basic $ 8.91 $ 6.22 Diluted $ 8.59 $ 5.92 Weighted average shares of common stock outstanding (in thousands): Basic 73,864 89,458 Dilutive effect of stock awards 2,704 3,590 Dilutive effect of participating securities — 839 Diluted 76,568 93,887 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes For the three months ended March 31, 2022, the effective tax rate for continuing operations was 24.0%, which differed from the statutory federal rate of 21% primarily due to state income taxes and permanent differences including nondeductible executive compensation. The effective tax rate increased during the three months ended March 31, 2022 compared to the same period in 2021, primarily due to the impact of quarterly discrete tax items relative to the income before taxes for the respective period, including the excess tax benefit from stock-based compensation and prior period tax credits. For the three months ended March 31, 2021, the effective tax rate for continuing operations was 22.8% which differed from the statutory federal rate of 21% primarily due to state income taxes, as well as unfavorable permanent differences including executive compensation disallowed under Internal Revenue Code Section 162(m). |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
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, 2021. The following tables present the estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured at fair value on a recurring basis: March 31, 2022 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 3,593 $ — $ 3,593 $ — Mortgage servicing rights 6,006 — — 6,006 Equity securities 62 8 — 54 Derivative financial instruments IRLCs 72 — — 72 LPCs 2 — — 2 Forward MBS trades 79 — 79 — Liabilities Derivative financial instruments IRLCs 5 — — 5 LPCs 8 — — 8 Forward MBS trades 6 — 6 — Swap futures 49 — 49 — Mortgage servicing rights financing 30 — — 30 Excess spread financing 815 — — 815 December 31, 2021 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 4,381 $ — $ 4,381 $ — Mortgage servicing rights 4,223 — — 4,223 Equity securities 63 9 — 54 Derivative financial instruments IRLCs 134 — — 134 Forward MBS trades 7 — 7 — LPCs 3 — — 3 Liabilities Derivative financial instruments Forward MBS trades 8 — 8 — LPCs 2 — — 2 Swap futures 6 — 6 — Mortgage servicing rights financing 10 — — 10 Excess spread financing 768 — — 768 The tables below present a reconciliation for all of the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis: Three Months Ended March 31, 2022 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Mortgage servicing rights Equity securities IRLCs Excess spread financing Mortgage servicing rights financing Balance - beginning of period $ 4,223 $ 54 $ 134 $ 768 $ 10 Changes in fair value included in earnings 563 — (62) 79 20 Purchases 1,015 — — — — Issuances 200 — — — — Sales (4) — — — — Settlements and repayments — — — (32) — Other changes 9 — — — — Balance - end of period $ 6,006 $ 54 $ 72 $ 815 $ 30 Three Months Ended March 31, 2021 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Mortgage servicing rights IRLCs Excess spread financing Mortgage servicing rights financing Balance - beginning of period $ 2,703 $ 414 $ 934 $ 33 Changes in fair value included in earnings 278 (182) 41 (10) Purchases 67 — — — Issuances 288 — — — Sales (2) — — — Settlements and repayments — — (41) — Other changes 20 — — — Balance - end of period $ 3,354 $ 232 $ 934 $ 23 The Company had LPCs assets and liabilities of $2 and $8 as of March 31, 2022, respectively. During the three months ended March 31, 2022, the Company had an immaterial change in LPCs assets and liabilities. The Company had LPCs assets and liabilities of $8 and $38 as of March 31, 2021, respectively. During the three months ended March 31, 2021, LPCs assets decreased by $30 and LPCs liabilities increased by $37 due to fair value changes, which are included in earnings. The Company had IRLCs liabilities of $5 and $1 as of March 31, 2022 and 2021, respectively. During the three months ended March 31, 2022 and 2021, the Company had an immaterial change in IRLCs liabilities. No transfers were made in or out of Level 3 fair value assets and liabilities for the Company during the three months ended March 31, 2022 and 2021. The tables below present the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities: March 31, 2022 December 31, 2021 Range Weighted Average Range Weighted Average Level 3 Inputs Min Max Min Max MSR Discount rate 9.5 % 13.7 % 10.7 % 9.5 % 13.7 % 10.9 % Prepayment speed 7.2 % 14.8 % 8.9 % 11.7 % 16.4 % 13.0 % Cost to service per loan (1) $ 57 $ 128 $ 74 $ 59 $ 168 $ 77 Average life (2) 7.4 years 5.8 years IRLCs Value of servicing (basis points per loan) (0.4) 2.6 1.9 (0.7) 2.4 1.4 Excess spread financing Discount rate 9.5 % 13.8 % 11.2 % 9.5 % 13.8 % 11.2 % Prepayment speed 9.1 % 15.1 % 10.4 % 12.8 % 15.2 % 13.4 % Average life (2) 6.4 years 5.4 years Mortgage servicing rights financing Advance financing and counterparty fee rates 4.6 % 8.6 % 6.9 % 4.5 % 7.9 % 6.5 % Annual advance recovery rates 18.9 % 26.4 % 20.7 % 19.2 % 23.0 % 21.3 % (1) Presented in whole dollar amounts. (2) Average life is included for informational purposes. The tables below present a summary of the estimated carrying amount and fair value of the Company’s financial instruments not carried at fair value: March 31, 2022 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 579 $ 579 $ — $ — Restricted cash 130 130 — — Advances and other receivables, net 1,044 — — 1,044 Loans subject to repurchase from Ginnie Mae 1,175 — 1,175 — Financial liabilities Unsecured senior notes, net 2,670 2,605 — — Advance and warehouse facilities, net 4,795 — 4,805 — Liability for loans subject to repurchase from Ginnie Mae 1,175 — 1,175 — December 31, 2021 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 895 $ 895 $ — $ — Restricted cash 146 146 — — Advances and other receivables, net 1,228 — — 1,228 Loans subject to repurchase from Ginnie Mae 1,496 — 1,496 — Financial liabilities Unsecured senior notes, net 2,670 2,737 — — Advance and warehouse facilities, net 4,997 — 5,009 — Liability for loans subject to repurchase from Ginnie Mae 1,496 — 1,496 — |
Capital Requirements
Capital Requirements | 3 Months Ended |
Mar. 31, 2022 | |
Mortgage Banking [Abstract] | |
Capital Requirements | 14. Capital Requirements Certain of the Company’s secondary market investors require minimum net worth (“capital”) requirements, as specified in the respective selling and servicing agreements. In addition, these investors may require capital ratios in excess of the stated requirements to approve large servicing transfers. To the extent that these requirements are not met, the Company’s secondary market investors may utilize a range of remedies ranging from sanctions, suspension or ultimately termination of the Company’s selling and servicing agreements, which would prohibit the Company from further originating or securitizing these specific types of mortgage loans or being an approved servicer. The Company’s various capital requirements related to its outstanding selling and servicing agreements are measured based on the Company’s operating subsidiary, Nationstar Mortgage LLC. As of March 31, 2022, the Company was in compliance with its selling and servicing capital requirements. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
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 include legal settlements and the fees paid to external legal service providers and are included in general and administrative expenses on the condensed consolidated statements of operations. During the three months ended March 31, 2022 and 2021, the Company recorded $2 of legal-related recoveries, net of legal-related expenses, and $13 of legal-related expense, respectively. 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 $10 to $18 in exce ss of the accrued liability (if any) related to those matters as of March 31, 2022. 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 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 March 31, 2022, 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 | 3 Months Ended |
Mar. 31, 2022 | |
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 its Title business, Valuations business and Field Services business. The Title, Valuations and Field Services businesses were previously reported under the Xome segment. With the sale of the majority of Xome’s operations and the related changes to business structure and internal reporting, the Xome segment is no longer 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 December 1, 2021, the Company completed the sale of its reverse servicing portfolio, operating under the Champion Mortgage brand, to MAM 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 financial statements for all periods presented and, as such, is not included in the continuing operations of the Servicing segment. On March 31, 2022 , the Company c ompleted the sale of its Mortgage Servicing Platform to Sagent and recorded a gain of $223, which was included in other income, net within the condensed statements of operations and reported under Corporate/Other. Refer to Note 2, Dispositions for further details. The following tables present financial information by segment: Three Months Ended March 31, 2022 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 701 $ 42 $ 12 $ 755 Net gain on mortgage loans held for sale 15 282 — 297 Total revenues 716 324 12 1,052 Total expenses 123 174 41 338 Interest income 19 17 — 36 Interest expense (54) (12) (40) (106) Other income, net — — 222 222 Total other (expenses) income, net (35) 5 182 152 Income from continuing operations before income tax expense $ 558 $ 155 $ 153 $ 866 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 5 $ 4 $ 2 $ 11 Total assets $ 9,825 $ 2,666 $ 1,999 $ 14,490 Three Months Ended March 31, 2021 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 441 $ 43 $ 96 $ 580 Net gain on mortgage loans held for sale 127 552 — 679 Total revenues 568 595 96 1,259 Total expenses 110 231 113 454 Interest income 23 23 — 46 Interest expense (71) (25) (30) (126) Total other expenses, net (48) (2) (30) (80) Income (loss) from continuing operations before income tax expense (benefit) $ 410 $ 362 $ (47) $ 725 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 5 $ 4 $ 6 $ 15 Total assets $ 16,696 $ 5,559 $ 2,458 $ 24,713 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
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, 2021. |
Share-based Payment Arrangement | Share-based compensation for restricted stock units granted to employees of the Company, consultants, and non-employee directors is based on the fair market value of the Company’s common stock on the grant date and recognized as an expense over the requisite employee service period on a straight-line basis using an accelerated attribution model. Shares for these awards are issued to employees from treasury stock. |
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. These investments are initially measured at cost and subsequently adjusted for Company’s proportionate share of earnings and losses in the investee. Investments in certain companies over which the Company does not exert significant influence are recorded at fair value, or at cost upon election of measurement alternative, at the end of each reporting period. 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. |
Reclassification | Reclassifications Certain reclassifications have been made in the 2021 condensed consolidated financial statements to conform to 2022 presentation. Such reclassifications did not affect total revenues or net income. |
Recent accounting guidance adopted | Recent Accounting Guidance AdoptedThe Company did not adopt any accounting guidance during the three months ended March 31, 2022 that had a material impact on its condensed consolidated financial statements or disclosures. |
Discontinued Operations and D_2
Discontinued Operations and Disposal Groups (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table sets forth the condensed consolidated statements of operations data for discontinued operations for the three months ended March 31, 2021: Revenue - service related, net $ 8 Salaries, wages and benefits expense (8) General and administrative expense (7) Interest income 43 Interest expense (33) Income from discontinued operations before income tax expense 3 Less: Income tax expense 1 Net income from discontinued operations $ 2 |
Mortgage Servicing Rights and_2
Mortgage Servicing Rights and Related Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 December 31, 2021 MSRs - fair value $ 6,006 $ 4,223 Excess spread financing - fair value $ 815 $ 768 Mortgage servicing rights financing - fair value 30 10 MSR related liabilities - nonrecourse at fair value $ 845 $ 778 The following table sets forth the activities of MSRs: Three Months Ended March 31, MSRs - Fair Value 2022 2021 Fair value - beginning of period $ 4,223 $ 2,703 Additions: Servicing retained from mortgage loans sold 200 288 Purchases of servicing rights 1,015 67 Dispositions: Sales of servicing assets (4) (2) Changes in fair value: Changes in valuation inputs or assumptions used in the valuation model (MSR MTM) 798 521 Changes in valuation due to amortization (235) (243) Other changes 9 20 Fair value - end of period $ 6,006 $ 3,354 The following table provides a breakdown of UPB and fair value for the Company’s MSRs: March 31, 2022 December 31, 2021 MSRs - UPB and Fair Value Breakdown UPB Fair Value UPB Fair Value Investor Pools Agency $ 377,225 $ 5,635 $ 302,851 $ 3,859 Non-agency 34,615 371 36,357 364 Total $ 411,840 $ 6,006 $ 339,208 $ 4,223 |
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 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 MSRs - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change 10% Adverse Change 20% Adverse Change March 31, 2022 Mortgage servicing rights $ (207) $ (399) $ (134) $ (259) $ (56) $ (113) December 31, 2021 Mortgage servicing rights $ (141) $ (272) $ (148) $ (286) $ (46) $ (93) The following table shows the hypothetical effect on the Company’s excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities for the dates indicated: Discount Rate Prepayment Speeds Excess Spread Financing - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change March 31, 2022 Excess spread financing $ 31 $ 64 $ 23 $ 47 December 31, 2021 Excess spread financing $ 26 $ 54 $ 28 $ 58 |
Schedule of fees earned in exchange for servicing financial assets | The following table sets forth the items comprising total revenues for the Servicing segment: Three Months Ended March 31, Total Revenues - Servicing 2022 2021 Contractually specified servicing fees (1) $ 327 $ 276 Other service-related income (1) 48 145 Incentive and modification income (1) 9 14 Late fees (1) 19 18 Mark-to-market adjustments (2) 553 365 Amortization, net of accretion (3) (202) (167) Other (4) (38) (83) Total revenues - Servicing $ 716 $ 568 (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 $6 and $12 for the three months ended March 31, 2022 and 2021. (3) Amortization is net of excess spread accretion of $33 and $76 during the three months ended March 31, 2022 and 2021, 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) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Advances and other receivables, net, consists of the following: Advances and Other Receivables, Net March 31, 2022 December 31, 2021 Servicing advances, net of $16 and $19 purchase discount, respectively $ 1,075 $ 1,263 Receivables from agencies, investors and prior servicers, net of $8 and $12 purchase discount, respectively 121 132 Reserves (152) (167) Total advances and other receivables, net $ 1,044 $ 1,228 The following table sets forth the activities of the servicing reserves for advances and other receivables: Three Months Ended March 31, Reserves for Advances and Other Receivables 2022 2021 Balance - beginning of period $ 167 $ 208 Provision and other additions (1) 16 15 Write-offs (31) (17) Balance - end of period $ 152 $ 206 (1) The Company recorded a provis ion of $6 and $12 through the MTM adjustments in revenues - service related, net, in the condensed consolidated statements of operations during the three months ended March 31, 2022 and 2021, respectively, for inactive and liquidated l oans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate. The following tables set forth the activities of the purchase discounts for advances and other receivables: Three Months Ended March 31, 2022 2021 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 $ 19 $ 12 $ 72 $ 21 Utilization of purchase discounts (3) (4) (9) (1) Balance - end of period $ 16 $ 8 $ 63 $ 20 |
Mortgage Loans Held for Sale (T
Mortgage Loans Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Mortgage Loans Held for Sale and Investment [Abstract] | |
Schedule of mortgage loans held-for-sale | Mortgage loans held for sale are recorded at fair value as set forth below: Mortgage Loans Held for Sale March 31, 2022 December 31, 2021 Mortgage loans held for sale – UPB $ 3,607 $ 4,257 Mark-to-market adjustment (1) (14) 124 Total mortgage loans held for sale $ 3,593 $ 4,381 (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: Three Months Ended March 31, Mortgage Loans Held for Sale 2022 2021 Balance - beginning of period $ 4,381 $ 5,720 Loans sold (14,527) (26,734) Mortgage loans originated and purchased, net of fees 11,598 25,214 Repurchase of loans out of Ginnie Mae securitizations 2,249 2,255 Net change in unrealized loss on retained loans held for sale (109) (105) Net transfers of mortgage loans held for sale (1) 1 1 Balance - end of period $ 3,593 $ 6,351 (1) Amount reflects transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net, for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing. The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows: March 31, 2022 December 31, 2021 Mortgage Loans Held for Sale UPB Fair Value UPB Fair Value Non-accrual (1) $ 230 $ 224 $ 104 $ 94 (1) Non-accrual UPB includes $221 and $94 of UPB related to Ginnie Mae repurchased loans as of March 31, 2022 and December 31, 2021, respectively. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments | The following tables provide the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses) for the derivative financial instruments: March 31, 2022 Three Months Ended March 31, 2022 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2022 $ 543 $ 1 $ (24) Derivative financial instruments IRLCs 2022 3,122 72 (62) LPCs 2022 203 2 (1) Forward MBS trades 2022 4,653 79 72 Total derivative financial instruments - assets $ 7,978 $ 153 $ 9 Liabilities Derivative financial instruments IRLCs 2022 $ 551 $ 5 $ 5 LPCs 2022 658 8 6 Forward MBS trades 2022 695 6 (2) Swap futures 2022 1,097 49 43 Total derivative financial instruments - liabilities $ 3,001 $ 68 $ 52 March 31, 2021 Three Months Ended March 31, 2021 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2021 $ 2,341 $ 42 $ (60) Derivative financial instruments IRLCs 2021 8,950 232 (182) LPCs 2021 1,165 8 (30) Forward MBS trades 2021 22,566 286 249 Total derivative financial instruments - assets $ 32,681 $ 526 $ 37 Liabilities Derivative financial instruments IRLCs 2021 $ 240 $ 1 $ 1 LPCs 2021 3,974 38 37 Forward MBS trades 2021 6,341 76 (80) Swap futures 2021 60 1 1 Total derivative financial instruments - liabilities $ 10,615 $ 116 $ (41) |
Indebtedness (Tables)
Indebtedness (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | March 31, 2022 December 31, 2021 Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral Pledged Advance Facilities $400 advance facility (1) August 2023 Servicing advance receivables $ 400 $ 219 $ 312 $ 234 $ 318 $350 advance facility October 2022 Servicing advance receivables 350 156 189 160 197 $350 advance facility January 2023 Servicing advance receivables 350 158 186 162 190 $75 advance facility December 2022 Servicing advance receivables 75 53 79 58 89 Advance facilities principal amount 586 766 614 794 Warehouse Facilities $4,000 warehouse facility February 2023 Mortgage loans or MBS 4,000 987 1,118 1,224 1,341 $2,500 warehouse facility October 2022 Mortgage loans or MBS 2,500 746 772 991 1,024 $1,600 warehouse facility (2) September 2023 Mortgage loans or MBS 1,600 148 161 409 425 $1,500 warehouse facility June 2022 Mortgage loans or MBS 1,500 349 352 356 345 $750 warehouse facility October 2022 Mortgage loans or MBS 750 256 272 256 270 $550 warehouse facility August 2022 Mortgage loans or MBS 550 48 49 87 89 $500 warehouse facility June 2023 Mortgage loans or MBS 500 216 224 188 194 $500 warehouse facility September 2022 Mortgage loans or MBS 500 284 293 419 430 $500 warehouse facility June 2022 Mortgage loans or MBS 500 137 163 39 39 $500 warehouse facility August 2023 Mortgage loans or MBS 500 178 184 38 39 $325 warehouse facility December 2022 Mortgage loans or MBS 325 38 38 67 67 $250 warehouse facility (3) May 2022 Mortgage loans or MBS 250 1 2 5 6 $200 warehouse facility June 2022 Mortgage loans or MBS 200 31 39 46 58 $30 warehouse facility (4) January 2022 Mortgage loans or MBS 30 — — — — Warehouse facilities principal amount 3,419 3,667 4,125 4,327 MSR Facilities $800 warehouse facility (1)(5) August 2023 MSR 800 260 1,345 260 1,107 $400 warehouse facility August 2022 MSR 400 300 1,246 — 838 $400 warehouse facility (2) September 2023 MSR 400 215 1,114 — 745 $50 warehouse facility November 2023 MSR 50 25 84 10 124 MSR facilities principal amount 800 3,789 270 2,814 Advance, warehouse and MSR facilities principal amount 4,805 $ 8,222 5,009 $ 7,935 Unamortized debt issuance costs (10) (12) Advance and warehouse facilities, net $ 4,795 $ 4,997 (1) Total capacity for this facility is $1,200, of which $400 is internally allocated for advance financing and $800 is internally allocated for MSR financing; capacity is fully fungible and is not restricted by these allocations, in comparison to $1,200, $940, and $260 respectively in 2021. (2) The capacity amount for this facility is $2,000, of which $400 is a sublimit for MSR financing. (3) The capacity amount for this warehouse facility decreased from $600 to $250 in 2022. (4) This facility was terminated in January 2022. (5) The capacity amount for this warehouse facility increased from $260 to $800 in 2022. The weighted average interest rate for advance facilities was 2.4% and 3.0% for three months ended March 31, 2022 and 2021, respectively. The weighted average interest rate for warehouse and MSR facilities was 2.1% and 2.2% for three months ended March 31, 2022 and 2021, respectively. |
Schedule of unsecured senior notes | Unsecured senior notes consist of the following: Unsecured Senior Notes March 31, 2022 December 31, 2021 $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 $600 face value, 5.750% interest rate payable semi-annually, due November 2031 600 600 Unsecured senior notes principal amount 2,700 2,700 Unamortized debt issuance costs (30) (30) Unsecured senior notes, net $ 2,670 $ 2,670 |
Schedule of maturities of long-term debt | As of March 31, 2022, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows: Year Ending December 31, Amount 2022 through 2026 $ — Thereafter 2,700 Total unsecured senior notes principal amount $ 2,700 |
Securitizations and Financings
Securitizations and Financings (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Variable Interest Entities and Securitizations [Abstract] | |
Schedule of assets and liabilities of VIEs included in financial statements | A summary of the assets and liabilities of the Company’s transactions with VIEs included in the Company’s condensed consolidated balance sheets is presented below: March 31, 2022 December 31, 2021 Consolidated Transactions with VIEs Transfers Transfers Assets Restricted cash $ 47 $ 50 Advances and other receivables, net 375 387 Total assets $ 422 $ 437 Liabilities Advance facilities, net (1) $ 314 $ 322 Payables and other liabilities — 1 Total liabilities $ 314 $ 323 (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 March 31, 2022 December 31, 2021 Total collateral balances - UPB $ 1,074 $ 1,122 Total certificate balances $ 1,061 $ 1,112 A summary of mortgage loans transferred by the Company to unconsolidated securitization trusts that are 60 days or more past due are presented below: Principal Amount of Transferred Loans 60 Days or More Past Due March 31, 2022 December 31, 2021 Unconsolidated securitization trusts $ 134 $ 138 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The following table sets forth the computation of basic and diluted net income per common share (amounts in millions, except per share amounts): Three Months Ended March 31, Computation of Earnings Per Share 2022 2021 Net income from continuing operations $ 658 $ 559 Less: Undistributed earnings from continuing operations attributable to participating stockholders — 5 Net income from continuing operations attributable to Mr. Cooper common stockholders $ 658 $ 554 Net income from discontinued operations $ — $ 2 Less: Undistributed earnings from discontinued operations attributable to participating stockholders — — Net income from discontinued operations attributable to Mr. Cooper common stockholders $ — $ 2 Net income $ 658 $ 561 Less: Undistributed earnings attributable to participating stockholders — 5 Net income attributable to common stockholders $ 658 $ 556 Earnings from continuing operations per common share attributable to Mr. Cooper: Basic $ 8.91 $ 6.20 Diluted $ 8.59 $ 5.90 Earnings from discontinued operations per common share attributable to Mr. Cooper: Basic $ — $ 0.02 Diluted $ — $ 0.02 Earnings per common share attributable to Mr. Cooper: Basic $ 8.91 $ 6.22 Diluted $ 8.59 $ 5.92 Weighted average shares of common stock outstanding (in thousands): Basic 73,864 89,458 Dilutive effect of stock awards 2,704 3,590 Dilutive effect of participating securities — 839 Diluted 76,568 93,887 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value, assets and liabilities measured on recurring basis | The following tables present the estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured at fair value on a recurring basis: March 31, 2022 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 3,593 $ — $ 3,593 $ — Mortgage servicing rights 6,006 — — 6,006 Equity securities 62 8 — 54 Derivative financial instruments IRLCs 72 — — 72 LPCs 2 — — 2 Forward MBS trades 79 — 79 — Liabilities Derivative financial instruments IRLCs 5 — — 5 LPCs 8 — — 8 Forward MBS trades 6 — 6 — Swap futures 49 — 49 — Mortgage servicing rights financing 30 — — 30 Excess spread financing 815 — — 815 December 31, 2021 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 4,381 $ — $ 4,381 $ — Mortgage servicing rights 4,223 — — 4,223 Equity securities 63 9 — 54 Derivative financial instruments IRLCs 134 — — 134 Forward MBS trades 7 — 7 — LPCs 3 — — 3 Liabilities Derivative financial instruments Forward MBS trades 8 — 8 — LPCs 2 — — 2 Swap futures 6 — 6 — Mortgage servicing rights financing 10 — — 10 Excess spread financing 768 — — 768 |
Schedule of fair value, assets and liabilities measured on recurring basis, unobservable input reconciliation | The tables below present a reconciliation for all of the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis: Three Months Ended March 31, 2022 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Mortgage servicing rights Equity securities IRLCs Excess spread financing Mortgage servicing rights financing Balance - beginning of period $ 4,223 $ 54 $ 134 $ 768 $ 10 Changes in fair value included in earnings 563 — (62) 79 20 Purchases 1,015 — — — — Issuances 200 — — — — Sales (4) — — — — Settlements and repayments — — — (32) — Other changes 9 — — — — Balance - end of period $ 6,006 $ 54 $ 72 $ 815 $ 30 Three Months Ended March 31, 2021 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Mortgage servicing rights IRLCs Excess spread financing Mortgage servicing rights financing Balance - beginning of period $ 2,703 $ 414 $ 934 $ 33 Changes in fair value included in earnings 278 (182) 41 (10) Purchases 67 — — — Issuances 288 — — — Sales (2) — — — Settlements and repayments — — (41) — Other changes 20 — — — Balance - end of period $ 3,354 $ 232 $ 934 $ 23 |
Fair value measurement inputs and valuation techniques | The tables below present the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities: March 31, 2022 December 31, 2021 Range Weighted Average Range Weighted Average Level 3 Inputs Min Max Min Max MSR Discount rate 9.5 % 13.7 % 10.7 % 9.5 % 13.7 % 10.9 % Prepayment speed 7.2 % 14.8 % 8.9 % 11.7 % 16.4 % 13.0 % Cost to service per loan (1) $ 57 $ 128 $ 74 $ 59 $ 168 $ 77 Average life (2) 7.4 years 5.8 years IRLCs Value of servicing (basis points per loan) (0.4) 2.6 1.9 (0.7) 2.4 1.4 Excess spread financing Discount rate 9.5 % 13.8 % 11.2 % 9.5 % 13.8 % 11.2 % Prepayment speed 9.1 % 15.1 % 10.4 % 12.8 % 15.2 % 13.4 % Average life (2) 6.4 years 5.4 years Mortgage servicing rights financing Advance financing and counterparty fee rates 4.6 % 8.6 % 6.9 % 4.5 % 7.9 % 6.5 % Annual advance recovery rates 18.9 % 26.4 % 20.7 % 19.2 % 23.0 % 21.3 % (1) Presented in whole dollar amounts. (2) Average life is included for informational purposes. |
Schedule of fair value, by balance sheet grouping | The tables below present a summary of the estimated carrying amount and fair value of the Company’s financial instruments not carried at fair value: March 31, 2022 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 579 $ 579 $ — $ — Restricted cash 130 130 — — Advances and other receivables, net 1,044 — — 1,044 Loans subject to repurchase from Ginnie Mae 1,175 — 1,175 — Financial liabilities Unsecured senior notes, net 2,670 2,605 — — Advance and warehouse facilities, net 4,795 — 4,805 — Liability for loans subject to repurchase from Ginnie Mae 1,175 — 1,175 — December 31, 2021 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 895 $ 895 $ — $ — Restricted cash 146 146 — — Advances and other receivables, net 1,228 — — 1,228 Loans subject to repurchase from Ginnie Mae 1,496 — 1,496 — Financial liabilities Unsecured senior notes, net 2,670 2,737 — — Advance and warehouse facilities, net 4,997 — 5,009 — Liability for loans subject to repurchase from Ginnie Mae 1,496 — 1,496 — |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The following tables present financial information by segment: Three Months Ended March 31, 2022 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 701 $ 42 $ 12 $ 755 Net gain on mortgage loans held for sale 15 282 — 297 Total revenues 716 324 12 1,052 Total expenses 123 174 41 338 Interest income 19 17 — 36 Interest expense (54) (12) (40) (106) Other income, net — — 222 222 Total other (expenses) income, net (35) 5 182 152 Income from continuing operations before income tax expense $ 558 $ 155 $ 153 $ 866 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 5 $ 4 $ 2 $ 11 Total assets $ 9,825 $ 2,666 $ 1,999 $ 14,490 Three Months Ended March 31, 2021 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 441 $ 43 $ 96 $ 580 Net gain on mortgage loans held for sale 127 552 — 679 Total revenues 568 595 96 1,259 Total expenses 110 231 113 454 Interest income 23 23 — 46 Interest expense (71) (25) (30) (126) Total other expenses, net (48) (2) (30) (80) Income (loss) from continuing operations before income tax expense (benefit) $ 410 $ 362 $ (47) $ 725 Depreciation and amortization for property and equipment and intangible assets from continuing operations $ 5 $ 4 $ 6 $ 15 Total assets $ 16,696 $ 5,559 $ 2,458 $ 24,713 |
Discontinued Operations and D_3
Discontinued Operations and Disposal Groups (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 01, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net income from discontinued operations | $ 0 | $ 2 | ||
Discontinued Operation, Loan Asset Retained | 48 | $ 55 | ||
Discontinued Operation, Loan Liability Retained | 39 | $ 39 | ||
Sagent M&C, LLC | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Equity Method Investments | 250 | |||
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] | ||||
Revenue - service related, net | 8 | |||
Salaries, wages and benefits expense | (8) | |||
General and administrative expense | (7) | |||
Interest income | 43 | |||
Interest expense | (33) | |||
Income from discontinued operations before income tax expense | 3 | |||
Less: Income tax expense | 1 | |||
Net income from discontinued operations | $ 2 | |||
Disposal Group, Discontinued Operation, Transaction Cost | 0 | |||
Purchase price | $ 1,640 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Mortgage Servicing Platform | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal Group, Discontinued Operation, Transaction Cost | 4 | |||
Purchase price | 260 | |||
Disposal Group, Including Discontinued Operation, Assets, Noncurrent | 31 | |||
Cash received from disposal | 9.9 | |||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 223 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Mortgage Servicing Platform | Sagent M&C, LLC | Mr. Cooper Group Inc. | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Ownership interest percentage | 19.90% |
Mortgage Servicing Rights and_3
Mortgage Servicing Rights and Related Liabilities - MSRs and Related Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Mortgage Servicing Rights [Line Items] | ||
Excess spread financing - fair value | $ 815 | $ 768 |
Mortgage servicing rights financing - fair value | 30 | 10 |
MSR related liabilities - nonrecourse at fair value | 845 | 778 |
Mortgage servicing rights | ||
Mortgage Servicing Rights [Line Items] | ||
MSRs - fair value | $ 6,006 | $ 4,223 |
Mortgage Servicing Rights and_4
Mortgage Servicing Rights and Related Liabilities - MSR's at Fair Value (Details) - Mortgage servicing rights - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Fair value - beginning of period | $ 4,223 | $ 2,703 |
Servicing retained from mortgage loans sold | 200 | 288 |
Purchases of servicing rights | 1,015 | 67 |
Sales of servicing assets | (4) | (2) |
Changes in valuation inputs or assumptions used in the valuation model (MSR MTM) | 798 | 521 |
Changes in valuation due to amortization | (235) | (243) |
Other changes | 9 | 20 |
Fair value - end of period | $ 6,006 | $ 3,354 |
Mortgage Servicing Rights and_5
Mortgage Servicing Rights and Related Liabilities - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Servicing Asset at Amortized Cost [Line Items] | |||
Excess spread financing - fair value | $ 815 | $ 768 | |
Mortgage servicing rights financing - fair value | 30 | $ 10 | |
Forward MSRs Sold | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB | 361 | $ 50 | |
Forward MSRs Sold, Subservicing Retained | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB | $ 342 | $ 0 |
Mortgage Servicing Rights and_6
Mortgage Servicing Rights and Related Liabilities - UPB related to owned MSRs (Details) - Mortgage servicing rights - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Owned Service Loans [Line Items] | ||
UPB | $ 411,840 | $ 339,208 |
Fair Value | 6,006 | 4,223 |
Agency | ||
Owned Service Loans [Line Items] | ||
UPB | 377,225 | 302,851 |
Fair Value | 5,635 | 3,859 |
Non-agency | ||
Owned Service Loans [Line Items] | ||
UPB | 34,615 | 36,357 |
Fair Value | $ 371 | $ 364 |
Mortgage Servicing Rights and_7
Mortgage Servicing Rights and Related Liabilities - Fair Value Sensitivity Analysis (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Mortgage servicing rights | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Total prepayment speeds, 10% Adverse Change | $ (134) | $ (148) |
Total prepayment speeds, 20% Adverse Change | (259) | (286) |
Cost to Service per Loan, 10% Adverse Change | (56) | (46) |
Cost to Service per Loan, 20% Adverse Change | (113) | (93) |
Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Total prepayment speeds, 10% Adverse Change | 23 | 28 |
Total prepayment speeds, 20% Adverse Change | 47 | 58 |
100 bps Adverse Change | Mortgage servicing rights | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | (207) | (141) |
100 bps Adverse Change | Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | 31 | 26 |
200 bps Adverse Change | Mortgage servicing rights | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | (399) | (272) |
200 bps Adverse Change | Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Discount Rate | $ 64 | $ 54 |
Mortgage Servicing Rights and_8
Mortgage Servicing Rights and Related Liabilities - Servicing Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Transfers and Servicing [Abstract] | ||
Contractually specified servicing fees(1) | $ 327 | $ 276 |
Other service-related income(1) | 48 | 145 |
Incentive and modification income(1) | 9 | 14 |
Late fees(1) | 19 | 18 |
Mark-to-market adjustments(2) | 553 | 365 |
Amortization, net of accretion(3) | (202) | (167) |
Other(4) | (38) | (83) |
Total revenues - Servicing | 716 | 568 |
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans | 6 | 12 |
Servicing fee income accretion expense | $ 33 | $ 76 |
Advances and Other Receivable_2
Advances and Other Receivables - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||||
Servicing advances, net of $16 and $19 purchase discount, respectively | $ 1,075 | $ 1,263 | ||
Receivables from agencies, investors and prior servicers, net of $8 and $12 purchase discount, respectively | 121 | 132 | ||
Reserves | (152) | (167) | ||
Total advances and other receivables, net | 1,044 | 1,228 | ||
Servicing advances discount | 16 | 19 | $ 63 | $ 72 |
Receivables discount | $ 8 | $ 12 | $ 20 | $ 21 |
Advances and Other Receivable_3
Advances and Other Receivables - Advances and Other Receivables Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Advances And Other Receivables, Reserves [Roll Forward] | ||
Balance - beginning of period | $ 167 | $ 208 |
Provision and other additions(1) | 16 | 15 |
Write-offs | (31) | (17) |
Balance - end of period | 152 | 206 |
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans | $ 6 | $ 12 |
Advances and Other Receivable_4
Advances and Other Receivables - Purchase Discount (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Servicing Advances | ||
Servicing Advances, Discount | $ 19 | $ 72 |
Accretion of Service Advances Discount | (3) | (9) |
Servicing Advances, Discount | 16 | 63 |
Receivables from Agencies, Investors and Prior Servicers | ||
Receivable with Imputed Interest, Discount | 8 | 20 |
Receivable Discount, Accretion Expense | (4) | (1) |
Receivable with Imputed Interest, Discount | $ 12 | $ 21 |
Advances and Other Receivable_5
Advances and Other Receivables - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivable, allowance for credit loss | $ 30 | $ 39 |
Financial instruments collection period | 39 months | |
Advances and other receivables reserve | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Provision for credit loss | $ 4 | 1 |
Other Credit Losses, Write-off | 5 | |
Financing receivable, allowance for credit loss | 8 | 17 |
Purchase Discount | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing receivable, allowance for credit loss | $ 22 | $ 22 |
Mortgage Loans Held for Sale -
Mortgage Loans Held for Sale - Mortgage Loans Held for Sale (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Mortgage loans held for sale – UPB | $ 3,607 | $ 4,257 |
Mark-to-market adjustment(1) | (14) | 124 |
Total mortgage loans held for sale | 3,593 | 4,381 |
Mortgage Loans Held for Sale, Nonaccrual Basis Unpaid Principal Balance | 230 | 104 |
Fair Value, Mortgage Loans Held for Sale non-accrual status | 224 | 94 |
Ginnie mae repurchased loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Mortgage Loans Held for Sale, Nonaccrual Basis Unpaid Principal Balance | $ 221 | $ 94 |
Mortgage Loans Held for Sale _2
Mortgage Loans Held for Sale - Reconciliation to Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward] | ||
Balance - beginning of period | $ 4,381 | $ 5,720 |
Loans sold | (14,527) | (26,734) |
Mortgage loans originated and purchased, net of fees | 11,598 | 25,214 |
Repurchase of loans out of Ginnie Mae securitizations | 2,249 | 2,255 |
Net change in unrealized loss on retained loans held for sale | (109) | (105) |
Net transfers of mortgage loans held for sale(1) | 1 | 1 |
Balance - end of period | $ 3,593 | $ 6,351 |
Mortgage Loans Held for Sale _3
Mortgage Loans Held for Sale - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Mortgage Loans Held for Sale and Investment [Abstract] | |||
Sale of mortgage loans held for sale | $ 14,727 | $ 27,048 | |
Gain on sale of mortgage loans held for sale | 200 | $ 314 | |
Mortgage loans held for sale in foreclosure | $ 37 | $ 16 |
Loans Subject to Repurchase f_2
Loans Subject to Repurchase from Ginnie Mae (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans subject to repurchase from Ginnie Mae | $ 1,175 | $ 1,496 |
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 | $ 1,003 | $ 1,301 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 120 | $ 120 |
Intangible assets | $ 13 | $ 14 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Notional Amount | $ 7,978 | $ 32,681 |
Derivative Asset, Fair Value, Gross Asset | 153 | 526 |
Gains/(Losses) | 9 | 37 |
Assets | Loan sale commitments | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Notional Amount | 543 | 2,341 |
Derivative Asset, Fair Value, Gross Asset | 1 | 42 |
Gains/(Losses) | (24) | (60) |
Assets | IRLCs | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Notional Amount | 3,122 | 8,950 |
Derivative Asset, Fair Value, Gross Asset | 72 | 232 |
Gains/(Losses) | (62) | (182) |
Assets | LPCs | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Notional Amount | 203 | 1,165 |
Derivative Asset, Fair Value, Gross Asset | 2 | 8 |
Gains/(Losses) | (1) | (30) |
Assets | Forward MBS trades | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Asset, Notional Amount | 4,653 | 22,566 |
Derivative Asset, Fair Value, Gross Asset | 79 | 286 |
Gains/(Losses) | 72 | 249 |
Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Notional Amount | 3,001 | 10,615 |
Derivative financial instruments | 68 | 116 |
Gains/(Losses) | 52 | (41) |
Liabilities | IRLCs | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Notional Amount | 551 | 240 |
Derivative financial instruments | 5 | 1 |
Gains/(Losses) | 5 | 1 |
Liabilities | LPCs | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Notional Amount | 658 | 3,974 |
Derivative financial instruments | 8 | 38 |
Gains/(Losses) | 6 | 37 |
Liabilities | Forward MBS trades | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Notional Amount | 695 | 6,341 |
Derivative financial instruments | 6 | 76 |
Gains/(Losses) | (2) | (80) |
Liabilities | Swap futures | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Notional Amount | 1,097 | 60 |
Derivative financial instruments | 49 | 1 |
Gains/(Losses) | $ 43 | $ 1 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Other assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Collateral deposit assets (liabilities) | $ (80) | $ (27) |
Payables and other liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Collateral deposit assets (liabilities) | $ 108 |
Indebtedness - Advance and Ware
Indebtedness - Advance and Warehouse Facilities Summary (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Advance and warehouse facilities, net | $ 4,795,000,000 | $ 4,997,000,000 |
Advance Facilities | Servicing | Loans payable | $350 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 350,000,000 | |
Debt outstanding, gross | 156,000,000 | 160,000,000 |
Collateral Pledged | 189,000,000 | 197,000,000 |
Advance Facilities | Servicing | Loans payable | $350 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 350,000,000 | |
Debt outstanding, gross | 158,000,000 | 162,000,000 |
Collateral Pledged | 186,000,000 | 190,000,000 |
Advance Facilities | Servicing | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | 586,000,000 | 614,000,000 |
Collateral Pledged | 766,000,000 | 794,000,000 |
Advance Facilities | Servicing | Notes payable to banks | $75 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 75,000,000 | |
Debt outstanding, gross | 53,000,000 | 58,000,000 |
Collateral Pledged | 79,000,000 | 89,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | 3,419,000,000 | 4,125,000,000 |
Collateral Pledged | 3,667,000,000 | 4,327,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $4,000 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 4,000,000,000 | |
Debt outstanding, gross | 987,000,000 | 1,224,000,000 |
Collateral Pledged | 1,118,000,000 | 1,341,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $2,500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 2,500,000,000 | |
Debt outstanding, gross | 746,000,000 | 991,000,000 |
Collateral Pledged | 772,000,000 | 1,024,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $1,600 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,600,000,000 | |
Debt outstanding, gross | 148,000,000 | 409,000,000 |
Collateral Pledged | 161,000,000 | 425,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $1,500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,500,000,000 | |
Debt outstanding, gross | 349,000,000 | 356,000,000 |
Collateral Pledged | 352,000,000 | 345,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $750 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 750,000,000 | |
Debt outstanding, gross | 256,000,000 | 256,000,000 |
Collateral Pledged | 272,000,000 | 270,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $550 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 550,000,000 | |
Debt outstanding, gross | 48,000,000 | 87,000,000 |
Collateral Pledged | 49,000,000 | 89,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $500 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 500,000,000 | |
Debt outstanding, gross | 216,000,000 | 188,000,000 |
Collateral Pledged | 224,000,000 | 194,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 500,000,000 | |
Debt outstanding, gross | 284,000,000 | 419,000,000 |
Collateral Pledged | 293,000,000 | 430,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 500,000,000 | |
Debt outstanding, gross | 137,000,000 | 39,000,000 |
Collateral Pledged | 163,000,000 | 39,000,000 |
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 | 178,000,000 | 38,000,000 |
Collateral Pledged | 184,000,000 | 39,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $325 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 325,000,000 | |
Debt outstanding, gross | 38,000,000 | 67,000,000 |
Collateral Pledged | 38,000,000 | 67,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $250 warehouse facility(3) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 250,000,000 | 600 |
Debt outstanding, gross | 1,000,000 | 5,000,000 |
Collateral Pledged | 2,000,000 | 6,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $200 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 200,000,000 | |
Debt outstanding, gross | 31,000,000 | 46,000,000 |
Collateral Pledged | 39,000,000 | 58,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $30 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 30,000,000 | |
Debt outstanding, gross | 0 | 0 |
Collateral Pledged | 0 | 0 |
Warehouse Facilities | Originations | Notes payable to banks | $2,000 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 2,000,000,000 | |
MSR Facilities | Servicing | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | 800,000,000 | 270,000,000 |
Collateral Pledged | 3,789,000,000 | 2,814,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $800 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 800,000,000 | |
Debt outstanding, gross | 260,000,000 | 260,000,000 |
Collateral Pledged | 1,345,000,000 | 1,107,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $400 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 400,000,000 | |
Debt outstanding, gross | 300,000,000 | 0 |
Collateral Pledged | 1,246,000,000 | 838,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $400 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 400,000,000 | |
Debt outstanding, gross | 215,000,000 | 0 |
Collateral Pledged | 1,114,000,000 | 745,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $50 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 50,000,000 | |
Debt outstanding, gross | 25,000,000 | 10,000,000 |
Collateral Pledged | 84,000,000 | 124,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $1,200 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,200,000,000 | 1,200,000,000 |
Advance Financing, Internally Allocated | Servicing | Loans payable | $400 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 400,000,000 | 940,000,000 |
Debt outstanding, gross | 219,000,000 | 234,000,000 |
Collateral Pledged | 312,000,000 | 318,000,000 |
MSR Financing, Internally Allocated | Servicing | Notes payable to banks | $800 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 800,000,000 | 260,000,000 |
MSR Financing, Internally Allocated | Servicing | Notes payable to banks | $400 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 400,000,000 | |
Advance, Warehouse and MSR Facilities | ||
Debt Instrument [Line Items] | ||
Debt outstanding, gross | 4,805,000,000 | 5,009,000,000 |
Collateral Pledged | 8,222,000,000 | 7,935,000,000 |
Unamortized debt issuance costs | (10,000,000) | (12,000,000) |
Advance and warehouse facilities, net | $ 4,795,000,000 | $ 4,997,000,000 |
Indebtedness - Summary of Unsec
Indebtedness - Summary of Unsecured Senior Notes (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Unsecured senior notes, net | $ 2,670,000,000 | $ 2,670,000,000 |
Unsecured Senior Notes | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | 2,700,000,000 | 2,700,000,000 |
Unamortized debt issuance costs | (30,000,000) | (30,000,000) |
Unsecured senior notes, net | 2,670,000,000 | 2,670,000,000 |
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% | |
Unsecured Senior Notes | $600 face value, 5.750% interest rate payable semi-annually, due November 2031 | ||
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 | 5.75% |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Debt Instrument [Line Items] | ||
Interest Expense | $ 106 | $ 126 |
Advance Facilities | Servicing | ||
Debt Instrument [Line Items] | ||
Debt, Weighted Average Interest Rate | 2.40% | 3.00% |
Warehouse & MSR Facilities | ||
Debt Instrument [Line Items] | ||
Debt, Weighted Average Interest Rate | 2.10% | 2.20% |
Debt | ||
Debt Instrument [Line Items] | ||
Interest Expense | $ 86 | $ 93 |
Unsecured Senior Notes | ||
Debt Instrument [Line Items] | ||
Maximum percentage redeemable on unsecured debt | 40.00% | |
Repayments of debt | $ 0 | 0 |
Amount of principal amount outstanding repaid | $ 0 | $ 0 |
Indebtedness - Schedule of Note
Indebtedness - Schedule of Notes Maturity (Details) - Unsecured Senior Notes - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total unsecured senior notes principal amount | $ 2,700 | $ 2,700 |
2022 through 2026 | 0 | |
Thereafter | $ 2,700 |
Securitizations and Financing_2
Securitizations and Financings - Assets and Liabilities of Consolidated VIEs (Details) - Residential mortgage - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets - transfers accounted for as secured borrowings | $ 422 | $ 437 |
Liabilities - transfers accounted for as secured borrowings | 314 | 323 |
Restricted cash | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets - transfers accounted for as secured borrowings | 47 | 50 |
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 | 375 | 387 |
Advance facilities, net(1) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities - transfers accounted for as secured borrowings | 314 | 322 |
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 | Mar. 31, 2022 | Dec. 31, 2021 |
Variable Interest Entities and Securitizations [Abstract] | ||
Total collateral balances - UPB | $ 1,074 | $ 1,122 |
Total certificate balances | 1,061 | 1,112 |
Financial Asset, Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Unconsolidated securitization trusts | $ 134 | $ 138 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Sep. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2021 | |
Common Stock | ||||
Stock Repurchased and Retired [Line Items] | ||||
Repurchase of common stock (in shares) | 721 | 4,505 | (14,773) | |
Preferred Stock | ||||
Stock Repurchased and Retired [Line Items] | ||||
Stock Repurchased and Retired During Period, Shares | 1,000 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income from continuing operations | $ 658 | $ 559 |
Less: Undistributed earnings from continuing operations attributable to participating stockholders | 0 | 5 |
Net income from continuing operations attributable to Mr. Cooper common stockholders | 658 | 554 |
Net income from discontinued operations | 0 | 2 |
Less: Undistributed earnings from discontinued operations attributable to participating stockholders | 0 | 0 |
Net income from discontinued operations attributable to Mr. Cooper common stockholders | 0 | 2 |
Net income | 658 | 561 |
Less: Undistributed earnings attributable to participating stockholders | 0 | 5 |
Net income attributable to common stockholders | $ 658 | $ 556 |
Earnings Per Share, Basic [Abstract] | ||
Income (Loss) from Continuing Operations, Per Basic Share | $ 8.91 | $ 6.20 |
Income (Loss) from Continuing Operations, Per Diluted Share | 8.59 | 5.90 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | 0 | 0.02 |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | 0 | 0.02 |
Basic (in dollars per share) | 8.91 | 6.22 |
Diluted (in dollars per share) | $ 8.59 | $ 5.92 |
Weighted average shares of common stock outstanding (in thousands): | ||
Basic (in shares) | 73,864 | 89,458 |
Dilutive effect of stock awards (in shares) | 2,704 | 3,590 |
Dilutive effect of participating securities (in shares) | 0 | 839 |
Diluted (in shares) | 76,568 | 93,887 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 24.00% | 22.80% |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Mortgage loans held for sale | $ 3,593 | $ 4,381 |
Liabilities | ||
Mortgage servicing rights financing | 30 | 10 |
Recurring Fair Value Measurements | ||
Assets | ||
Mortgage loans held for sale | 3,593 | 4,381 |
Mortgage servicing rights | 6,006 | 4,223 |
Equity securities | 62 | 63 |
Liabilities | ||
Mortgage servicing rights financing | 30 | 10 |
Excess spread financing | 815 | 768 |
Recurring Fair Value Measurements | IRLCs | ||
Assets | ||
Derivative financial instruments | 72 | 134 |
Liabilities | ||
Derivative financial instruments | 5 | |
Recurring Fair Value Measurements | LPCs | ||
Assets | ||
Derivative financial instruments | 2 | 3 |
Liabilities | ||
Derivative financial instruments | 8 | 2 |
Recurring Fair Value Measurements | Forward MBS trades | ||
Assets | ||
Derivative financial instruments | 79 | 7 |
Liabilities | ||
Derivative financial instruments | 6 | 8 |
Recurring Fair Value Measurements | Swap futures | ||
Liabilities | ||
Derivative financial instruments | 49 | 6 |
Recurring Fair Value Measurements | Level 1 | ||
Assets | ||
Mortgage loans held for sale | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Equity securities | 8 | 9 |
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 |
Liabilities | ||
Derivative financial instruments | 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 | 0 |
Recurring Fair Value Measurements | Level 2 | ||
Assets | ||
Mortgage loans held for sale | 3,593 | 4,381 |
Mortgage servicing rights | 0 | 0 |
Equity securities | 0 | 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 |
Liabilities | ||
Derivative financial instruments | 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 | 79 | 7 |
Liabilities | ||
Derivative financial instruments | 6 | 8 |
Recurring Fair Value Measurements | Level 2 | Swap futures | ||
Liabilities | ||
Derivative financial instruments | 49 | 6 |
Recurring Fair Value Measurements | Level 3 | ||
Assets | ||
Mortgage loans held for sale | 0 | 0 |
Mortgage servicing rights | 6,006 | 4,223 |
Equity securities | 54 | 54 |
Liabilities | ||
Mortgage servicing rights financing | 30 | 10 |
Excess spread financing | 815 | 768 |
Recurring Fair Value Measurements | Level 3 | IRLCs | ||
Assets | ||
Derivative financial instruments | 72 | 134 |
Liabilities | ||
Derivative financial instruments | 5 | |
Recurring Fair Value Measurements | Level 3 | LPCs | ||
Assets | ||
Derivative financial instruments | 2 | 3 |
Liabilities | ||
Derivative financial instruments | 8 | 2 |
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 | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Reconciliation (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Excess spread financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | $ 768 | $ 934 |
Changes in fair value included in earnings | 79 | 41 |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements and repayments | (32) | (41) |
Other changes | 0 | 0 |
Balance - end of period | 815 | 934 |
Mortgage servicing rights financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 10 | 33 |
Changes in fair value included in earnings | 20 | (10) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements and repayments | 0 | 0 |
Other changes | 0 | 0 |
Balance - end of period | 30 | 23 |
LPCs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Changes in fair value included in earnings | 37 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - end of period | 8 | 38 |
IRLCs | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - end of period | 5 | 1 |
Mortgage servicing rights | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 4,223 | 2,703 |
Changes in fair value included in earnings | 563 | 278 |
Purchases | 1,015 | 67 |
Issuances | 200 | 288 |
Sales | (4) | (2) |
Settlements and repayments | 0 | 0 |
Other changes | 9 | 20 |
Balance - end of period | 6,006 | 3,354 |
Equity securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 54 | |
Changes in fair value included in earnings | 0 | |
Purchases | 0 | |
Issuances | 0 | |
Sales | 0 | |
Settlements and repayments | 0 | |
Other changes | 0 | |
Balance - end of period | 54 | |
IRLCs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 134 | 414 |
Changes in fair value included in earnings | (62) | (182) |
Purchases | 0 | 0 |
Issuances | 0 | 0 |
Sales | 0 | 0 |
Settlements and repayments | 0 | 0 |
Other changes | 0 | 0 |
Balance - end of period | 72 | 232 |
LPCs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Changes in fair value included in earnings | (30) | |
Balance - end of period | $ 2 | $ 8 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable Inputs (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Average life(2) | 7 years 4 months 24 days | 5 years 9 months 18 days |
Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Average life(2) | 6 years 4 months 24 days | 5 years 4 months 24 days |
Min | MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 9.50% | 9.50% |
Prepayment speed | 7.20% | 11.70% |
Cost to service per loan(1) | $ 57 | $ 59 |
Min | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | (0.00004) | (0.00007) |
Min | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 9.50% | 9.50% |
Prepayment speed | 9.10% | 12.80% |
Min | Mortgage servicing rights financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 4.60% | 4.50% |
Annual advance recovery rates | 18.90% | 19.20% |
Max | MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 13.70% | 13.70% |
Prepayment speed | 14.80% | 16.40% |
Cost to service per loan(1) | $ 128 | $ 168 |
Max | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | 0.00026 | 0.00024 |
Max | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 13.80% | 13.80% |
Prepayment speed | 15.10% | 15.20% |
Max | Mortgage servicing rights financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 8.60% | 7.90% |
Annual advance recovery rates | 26.40% | 23.00% |
Weighted Average | MSR | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 10.70% | 10.90% |
Prepayment speed | 8.90% | 13.00% |
Cost to service per loan(1) | $ 74 | $ 77 |
Weighted Average | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (basis points per loan) | 0.00019 | 0.00014 |
Weighted Average | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Discount rate | 11.20% | 11.20% |
Prepayment speed | 10.40% | 13.40% |
Weighted Average | Mortgage servicing rights financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 6.90% | 6.50% |
Annual advance recovery rates | 20.70% | 21.30% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Balance Sheet Line Item (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 |
Financial assets | |||
Restricted cash | $ 130 | $ 146 | $ 176 |
Loans subject to repurchase from Ginnie Mae | 1,175 | 1,496 | |
Financial liabilities | |||
Unsecured senior notes, net | 2,670 | 2,670 | |
Advance and warehouse facilities, net | 4,795 | 4,997 | |
Nonrecurring Fair Value Measurements | |||
Financial assets | |||
Cash and cash equivalents | 579 | 895 | |
Restricted cash | 130 | 146 | |
Advances and other receivables, net | 1,044 | 1,228 | |
Loans subject to repurchase from Ginnie Mae | 1,175 | 1,496 | |
Financial liabilities | |||
Unsecured senior notes, net | 2,670 | 2,670 | |
Advance and warehouse facilities, net | 4,795 | 4,997 | |
Liability for loans subject to repurchase from Ginnie Mae | 1,175 | 1,496 | |
Nonrecurring Fair Value Measurements | Level 1 | |||
Financial assets | |||
Cash and cash equivalents | 579 | 895 | |
Restricted cash | 130 | 146 | |
Advances and other receivables, net | 0 | 0 | |
Loans subject to repurchase from Ginnie Mae | 0 | 0 | |
Financial liabilities | |||
Unsecured senior notes, net | 2,605 | 2,737 | |
Advance and warehouse facilities, net | 0 | 0 | |
Liability for loans subject to repurchase from Ginnie Mae | 0 | 0 | |
Nonrecurring Fair Value Measurements | Level 2 | |||
Financial assets | |||
Cash and cash equivalents | 0 | 0 | |
Restricted cash | 0 | 0 | |
Advances and other receivables, net | 0 | 0 | |
Loans subject to repurchase from Ginnie Mae | 1,175 | 1,496 | |
Financial liabilities | |||
Unsecured senior notes, net | 0 | 0 | |
Advance and warehouse facilities, net | 4,805 | 5,009 | |
Liability for loans subject to repurchase from Ginnie Mae | 1,175 | 1,496 | |
Nonrecurring Fair Value Measurements | Level 3 | |||
Financial assets | |||
Cash and cash equivalents | 0 | 0 | |
Restricted cash | 0 | 0 | |
Advances and other receivables, net | 1,044 | 1,228 | |
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 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Loss Contingencies [Line Items] | ||
Legal Fees (Recoveries), net | $ (2) | $ 13 |
Litigation and regulatory matters | Min | ||
Loss Contingencies [Line Items] | ||
Estimate of possible loss | 10 | |
Litigation and regulatory matters | Max | ||
Loss Contingencies [Line Items] | ||
Estimate of possible loss | $ 18 |
Segment Information - Financial
Segment Information - Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Revenues: | |||
Service related, net | $ 755 | $ 580 | |
Net gain on mortgage loans held for sale | 297 | 679 | |
Total revenues | 1,052 | 1,259 | |
Total expenses | 338 | 454 | |
Other income (expenses) | |||
Interest income | 36 | 46 | |
Interest expense | (106) | (126) | |
Other income, net | 222 | 0 | |
Total other (expenses) income, net | 152 | (80) | |
Income from continuing operations before income tax expense | 866 | 725 | |
Depreciation and amortization for property and equipment and intangible assets from continuing operations | 11 | 15 | |
Total assets | 14,490 | 24,713 | $ 14,204 |
Gain (Loss) on Disposition of Business | (223) | ||
Operating Segments | Servicing | |||
Revenues: | |||
Service related, net | 701 | 441 | |
Net gain on mortgage loans held for sale | 15 | 127 | |
Total revenues | 716 | 568 | |
Total expenses | 123 | 110 | |
Other income (expenses) | |||
Interest income | 19 | 23 | |
Interest expense | (54) | (71) | |
Other income, net | 0 | ||
Total other (expenses) income, net | (35) | (48) | |
Income from continuing operations before income tax expense | 558 | 410 | |
Depreciation and amortization for property and equipment and intangible assets from continuing operations | 5 | 5 | |
Total assets | 9,825 | 16,696 | |
Operating Segments | Originations | |||
Revenues: | |||
Service related, net | 42 | 43 | |
Net gain on mortgage loans held for sale | 282 | 552 | |
Total revenues | 324 | 595 | |
Total expenses | 174 | 231 | |
Other income (expenses) | |||
Interest income | 17 | 23 | |
Interest expense | (12) | (25) | |
Other income, net | 0 | ||
Total other (expenses) income, net | 5 | (2) | |
Income from continuing operations before income tax expense | 155 | 362 | |
Depreciation and amortization for property and equipment and intangible assets from continuing operations | 4 | 4 | |
Total assets | 2,666 | 5,559 | |
Corporate/Other | |||
Revenues: | |||
Service related, net | 12 | 96 | |
Net gain on mortgage loans held for sale | 0 | 0 | |
Total revenues | 12 | 96 | |
Total expenses | 41 | 113 | |
Other income (expenses) | |||
Interest income | 0 | 0 | |
Interest expense | (40) | (30) | |
Other income, net | 222 | ||
Total other (expenses) income, net | 182 | (30) | |
Income from continuing operations before income tax expense | 153 | (47) | |
Depreciation and amortization for property and equipment and intangible assets from continuing operations | 2 | 6 | |
Total assets | $ 1,999 | $ 2,458 |