Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 20, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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, $0.01 par value per share | |
Trading Symbol | COOP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 66,848,546 | |
Entity Central Index Key | 0000933136 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 517 | $ 527 |
Restricted cash | 170 | 175 |
Mortgage servicing rights at fair value | 7,149 | 6,654 |
Advances and other receivables, net of reserves of $156 and $137, respectively | 802 | 1,019 |
Mortgage loans held for sale at fair value | 1,187 | 893 |
Property and equipment, net of accumulated depreciation of $141 and $122, respectively | 61 | 65 |
Deferred tax assets, net | 657 | 703 |
Other assets | 2,601 | 2,740 |
Total assets | 13,144 | 12,776 |
Liabilities and Stockholders’ Equity | ||
Unsecured senior notes, net | 2,676 | 2,673 |
Advance, warehouse and MSR facilities, net | 3,512 | 2,885 |
Payables and other liabilities | 2,395 | 2,633 |
MSR related liabilities - nonrecourse at fair value | 482 | 528 |
Total liabilities | 9,065 | 8,719 |
Commitments and contingencies (Note 15) | ||
Common stock at $0.01 par value - 300 million shares authorized, 93.2 million shares issued | 1 | 1 |
Additional paid-in-capital | 1,074 | 1,104 |
Retained earnings | 3,981 | 3,802 |
Treasury shares at cost - 26.4 million and 24.0 million shares, respectively | (977) | (850) |
Total stockholders’ equity | 4,079 | 4,057 |
Total liabilities and stockholders’ equity | $ 13,144 | $ 12,776 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Advances and other receivables, reserves | $ 156 | $ 137 |
Accumulated depreciation | $ 141 | $ 122 |
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, Common, Shares | 26,400,000 | 24,000,000 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Service related, net | $ 402 | $ 460 | $ 663 | $ 1,215 |
Net gain on mortgage loans held for sale | 84 | 139 | 153 | 436 |
Total revenues | 486 | 599 | 816 | 1,651 |
Expenses: | ||||
Salaries, wages and benefits | 156 | 203 | 304 | 431 |
General and administrative | 122 | 125 | 235 | 235 |
Total expenses | 278 | 328 | 539 | 666 |
Interest income | 117 | 50 | 202 | 86 |
Interest expense | (122) | (111) | (232) | (217) |
Other (expense) income, net | (5) | (5) | (14) | 217 |
Total other (expense) income, net | (10) | (66) | (44) | 86 |
Income before income tax expense | 198 | 205 | 233 | 1,071 |
Less: Income tax expense | 56 | 54 | 54 | 262 |
Net income | $ 142 | $ 151 | $ 179 | $ 809 |
Earnings per share | ||||
Basic | $ 2.10 | $ 2.08 | $ 2.62 | $ 11.04 |
Diluted | $ 2.07 | $ 2.03 | $ 2.57 | $ 10.74 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Total Mr. Cooper Stockholders’ Equity | Non-controlling Interests | Treasury Share Amount |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Total stockholders’ equity | $ 3,367 | $ 1 | $ 1,116 | $ 2,879 | $ 3,366 | $ 1 | $ (630) |
Shares outstanding, beginning balance (in shares) at Dec. 31, 2021 | 73,777 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 856 | ||||||
Shares issued / (surrendered) under incentive compensation plan | (21) | (39) | (21) | 18 | |||
Share-based compensation | 17 | 17 | 17 | ||||
Repurchase of common stock (in shares) | (2,982) | ||||||
Repurchase of common stock | (135) | (135) | (135) | ||||
Net income | 809 | 809 | 809 | 0 | |||
Shares outstanding, ending balance (in shares) at Jun. 30, 2022 | 71,651 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Total stockholders’ equity | 3,977 | $ 1 | 1,085 | 3,537 | 3,976 | 1 | (647) |
Shares outstanding, beginning balance (in shares) at Mar. 31, 2022 | 73,906 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 6 | ||||||
Shares issued / (surrendered) under incentive compensation plan | 0 | 0 | 0 | 0 | |||
Share-based compensation | 9 | 9 | 9 | ||||
Repurchase of common stock (in shares) | (2,261) | ||||||
Repurchase of common stock | (100) | (100) | (100) | ||||
Net income | 151 | 151 | 151 | 0 | |||
Shares outstanding, ending balance (in shares) at Jun. 30, 2022 | 71,651 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Total stockholders’ equity | 4,037 | $ 1 | 1,094 | 3,688 | 4,036 | 1 | (747) |
Total stockholders’ equity | 4,057 | $ 1 | 1,104 | 3,802 | 4,057 | 0 | (850) |
Shares outstanding, beginning balance (in shares) at Dec. 31, 2022 | 69,266 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 877 | ||||||
Shares issued / (surrendered) under incentive compensation plan | (24) | (43) | (24) | 19 | |||
Share-based compensation | 13 | 13 | 13 | ||||
Repurchase of common stock (in shares) | (3,295) | ||||||
Repurchase of common stock | (146) | (146) | (146) | ||||
Net income | 179 | 179 | 179 | 0 | |||
Shares outstanding, ending balance (in shares) at Jun. 30, 2023 | 66,848 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Total stockholders’ equity | 3,986 | $ 1 | 1,066 | 3,839 | 3,986 | 0 | (920) |
Shares outstanding, beginning balance (in shares) at Mar. 31, 2023 | 68,053 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Shares issued / (surrendered) under incentive compensation plan (in shares) | 7 | ||||||
Shares issued / (surrendered) under incentive compensation plan | 0 | 0 | 0 | 0 | |||
Share-based compensation | 8 | 8 | 8 | ||||
Repurchase of common stock (in shares) | (1,212) | ||||||
Repurchase of common stock | (57) | (57) | (57) | ||||
Net income | 142 | 142 | 142 | 0 | |||
Shares outstanding, ending balance (in shares) at Jun. 30, 2023 | 66,848 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Total stockholders’ equity | $ 4,079 | $ 1 | $ 1,074 | $ 3,981 | $ 4,079 | $ 0 | $ (977) |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | ||
Operating Activities | |||
Net income | $ 179 | $ 809 | |
Adjustments to reconcile net income to net cash attributable to operating activities: | |||
Deferred tax expense | 46 | 241 | |
Net gain on mortgage loans held for sale | (153) | (436) | |
Provision for servicing and non-servicing reserves | 18 | 11 | |
Fair value changes in mortgage servicing rights | 239 | (663) | |
Fair value changes in MSR related liabilities | (6) | 131 | |
Depreciation and amortization for property and equipment and intangible assets | 18 | 20 | |
Gain on disposition of assets | 0 | 223 | |
Loss on MSR hedging activities | 52 | 229 | |
Gain on MSR sales | (32) | (1) | |
Other operating activities | 34 | 39 | |
Repurchases of loan assets out of Ginnie Mae securitizations | (547) | (2,686) | |
Mortgage loans originated and purchased for sale, net of fees | (6,593) | (19,370) | |
Sales proceeds and loan payment proceeds for mortgage loans held for sale | 6,842 | 24,056 | |
Changes in assets and liabilities: | |||
Advances and other receivables | 197 | 311 | |
Other assets | (39) | 256 | |
Payables and other liabilities | (106) | (142) | |
Net cash attributable to operating activities | 149 | 2,582 | |
Investing Activities | |||
Acquisition of assets | (34) | 0 | |
Property and equipment additions, net of disposals | (10) | (9) | |
Purchase of mortgage servicing rights | (841) | (1,151) | |
Proceeds on sale of mortgage servicing rights and excess yield | 312 | 275 | |
Other investing activities | (3) | 0 | |
Net cash attributable to investing activities | (576) | (885) | |
Financing Activities | |||
Increase (decrease) in advance, warehouse and MSR facilities | 630 | (1,597) | |
Settlements and repayment of excess spread financing | (40) | (353) | |
Repurchase of common stock | (146) | (135) | |
Other financing activities | (32) | (24) | |
Net cash attributable to financing activities | 412 | (2,109) | |
Net decrease in cash, cash equivalents, and restricted cash | (15) | (412) | |
Cash, cash equivalents, and restricted cash - beginning of period | 702 | 1,041 | |
Cash, cash equivalents, and restricted cash - end of period(1) | [1] | 687 | 629 |
Supplemental Disclosures of Non-cash Investing Activities | |||
Equity consideration received from disposition of assets | 0 | 250 | |
Purchase of mortgage servicing rights | 57 | 45 | |
Mortgage servicing rights sales price holdback | $ 0 | $ 15 | |
[1]The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets. June 30, 2023 June 30, 2022 Cash and cash equivalents $ 517 $ 514 Restricted cash 170 115 Total cash, cash equivalents, and restricted cash $ 687 $ 629 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | ||
Statement of Cash Flows [Abstract] | ||||||
Cash and cash equivalents | $ 517 | $ 527 | $ 514 | |||
Restricted cash | 170 | 175 | 115 | |||
Total cash, cash equivalents, and restricted cash | $ 687 | [1] | $ 702 | $ 629 | [1] | $ 1,041 |
[1]The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets. June 30, 2023 June 30, 2022 Cash and cash equivalents $ 517 $ 514 Restricted cash 170 115 Total cash, cash equivalents, and restricted cash $ 687 $ 629 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
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 servicers and originators 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. During the second quarter of 2023, the Company entered into a transaction with Rushmore Loan Management Services, LLC (“Rushmore”) to acquire certain assets and assume certain liabilities for a total purchase price of $34 (the “Rushmore Transaction”). Assets acquired were recorded in the Servicing segment and primarily included subservicing contracts and related servicing advances and receivables. The Company accounted for the transaction as an asset acquisition in accordance with Accounting Standard Codification Topic 805, Business Combinations , whereby the purchase price represents relative fair value of assets and liabilities acquired. In May 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Home Point Capital Inc., a Delaware corporation (“Home Point”). Per the Merger Agreement, the Company has agreed to commence a tender offer to acquire all of the outstanding shares of common stock of Home Point, other than certain excluded shares, for $2.33 per share. The transaction is expected to close in the third quarter of 2023, subject to customary conditions including receipt of regulatory approvals. 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, 2022. The interim condensed consolidated financial statements are unaudited; however, in the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation of the results of the interim periods have been included. Dollar amounts are reported in millions, except per share data and other key metrics, unless otherwise noted. Basis of Consolidation The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, other entities in which the Company has a controlling financial interest and those variable interest entities (“VIE”) where the Company’s wholly-owned subsidiaries are the primary beneficiaries. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that the Company became the primary beneficiary through the date the Company ceases to be the primary beneficiary. The Company applies the equity method of accounting to investments where it is able to exercise significant influence, but not control, over the policies and procedures of the entity and owns less than 50% of the voting interests. These investments are initially measured at cost and subsequently adjusted for the 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 and updated for observable price changes 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, macro-economic uncertainty, 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 and such differences could be material. Reclassifications Certain reclassifications have been made in the 2022 condensed consolidated statement of cash flows to conform to 2023 presentation. Such reclassifications were not material and did not affect total revenues or net income. Recent Accounting Guidance Adopted |
Discontinued Operations and Dis
Discontinued Operations and Disposal Groups | 6 Months Ended |
Jun. 30, 2023 | |
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 (expense) income, net” within the condensed consolidated statements of operations, and recorded $4 transaction costs during the six months ended June 30, 2022. No transaction costs were recorded in the three months ended June 30, 2022. The net carrying amount of assets and liabilities transferred in connection with the Sagent Transaction was $31 and reported under Corporate/Other. The Company accounts 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. The Company recorded a loss of $4 and $11 during the three and six months ended June 30, 2023, respectively, related to the Company's proportionate share of net loss of Sagent. The Company’s investment in Sagent was $226 as of June 30, 2023. |
Mortgage Servicing Rights and R
Mortgage Servicing Rights and Related Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 December 31, 2022 MSRs - fair value $ 7,149 $ 6,654 Excess spread financing at fair value $ 459 $ 509 Mortgage servicing rights financing at fair value 23 19 MSR related liabilities - nonrecourse at fair value $ 482 $ 528 Mortgage Servicing Rights The following table sets forth the activities of MSRs: Six Months Ended June 30, MSRs - Fair Value 2023 2022 Fair value - beginning of period $ 6,654 $ 4,223 Additions: Servicing retained from mortgage loans sold 133 360 Purchases of servicing rights 870 1,178 Dispositions: Sales of servicing assets and excess yield (280) (289) Changes in fair value: Changes in valuation inputs or assumptions used in the valuation model (MSR MTM) 34 1,124 Changes in valuation due to amortization (273) (461) Other changes (1) 11 16 Fair value - end of period $ 7,149 $ 6,151 (1) Amounts primarily represent negative fair values reclassified from the MSR asset to reserves as underlying loans are removed from the MSR and other reclassification adjustments. During the six months ended June 30, 2023 and 2022, the Company sold $1,605 and $20,052 in unpaid principal balance (“UPB”) of MSRs, of which $590 and $19,367 were retained by the Company as subservicer, respectively. During the three months ended June 30, 2023, certain agencies entered into agreements with the Company to purchase excess servicing cash flows (“excess yield”) on certain agency loans with a total UPB of approximately $41,958 for total proceeds of $294. The Company recorded a gain of $33 through the mark-to-market adjustments within “revenues - service related, net” in the condensed consolidated statements of operations. 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 Home Loan Mortgage Corp (“Freddie Mac” or “FHLMC”), the Federal National Mortgage Association (“Fannie Mae” or “FNMA”), 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: June 30, 2023 December 31, 2022 MSRs - UPB and Fair Value Breakdown by Investor Pools UPB Fair Value UPB Fair Value Agency $ 431,876 $ 6,848 $ 380,502 $ 6,322 Non-agency 27,600 301 30,880 332 Total $ 459,476 $ 7,149 $ 411,382 $ 6,654 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: Option Adjusted Spread (1) 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 June 30, 2023 Mortgage servicing rights $ (286) $ (549) $ (157) $ (305) $ (69) $ (139) 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 December 31, 2022 Mortgage servicing rights $ (266) $ (511) $ (136) $ (264) $ (61) $ (122) (1) Beginning in the second quarter of 2023, the Company valued MSRs using a stochastic option adjusted spread (“OAS”) instead of a static discount rate. Refer to Note 13, Fair Value Measurements , for further discussion. 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 $459 and $509, with UPB of $78,838 and $83,706 as of June 30, 2023 and December 31, 2022, 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: Option Adjusted Spread (1) Prepayment Speeds Excess Spread Financing - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change June 30, 2023 Excess spread financing $ 16 $ 34 $ 6 $ 18 Discount Rate Prepayment Speeds Excess Spread Financing - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change December 31, 2022 Excess spread financing $ 19 $ 40 $ 11 $ 22 (1) Beginning in the second quarter of 2023, the Company valued excess spread financing using a stochastic OAS instead of a static discount rate. Refer to Note 13, Fair Value Measurements , for further discussion. These hypothetical sensitivities should be evaluated with care. The effect on fair value of an adverse change in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Also, a positive change in the above assumptions would not necessarily correlate with the corresponding decrease in the net carrying amount of the excess spread financing. Excess spread financing’s cash flow assumptions that are utilized in determining fair value are based on the related cash flow assumptions used in the financed MSRs. Any fair value change recognized in the financed MSRs attributable to related cash flows assumptions would inherently have an inverse impact on the carrying amount of the related excess spread financing. Mortgage Servicing Rights Financing - Fair Value The Company had MSR financing liability of $23 and $19 as of June 30, 2023 and December 31, 2022, respectively. Refer to Note 13, Fair Value Measurements , for key weighted-average inputs and assumptions used in the valuation of the MSR financing liability. Revenues - Service Related, net The following table sets forth the items comprising total “revenues - service related, net”: Three Months Ended June 30, Six Months Ended June 30, Revenues - Service Related, net 2023 2022 2023 2022 Contractually specified servicing fees (1) $ 407 $ 378 $ 791 $ 705 Other service-related income (1) 19 39 33 72 Incentive and modification income (1) 8 9 14 18 Servicing late fees (1) 23 19 44 38 Mark-to-market adjustments - Servicing MSR MTM 139 326 34 1,124 Loss on MSR hedging activities (111) (89) (52) (229) Gain on MSR sales 32 1 32 1 Reclassifications (2) (9) (6) (18) (12) Excess spread /MSR financing MTM 12 (32) 6 (131) Total mark-to-market adjustments - Servicing 63 200 2 753 Amortization, net of accretion MSR amortization (148) (226) (273) (461) Excess spread accretion 11 27 21 60 Total amortization, net of accretion (137) (199) (252) (401) Originations service fees (3) 16 24 27 66 Corporate/Xome related service fees 21 22 40 34 Other (4) (18) (32) (36) (70) Total revenues - Service Related, net $ 402 $ 460 $ 663 $ 1,215 (1) The Company recognizes revenue on an earned basis for services performed. Amounts include subservicing related revenues. Amounts also include servicing fees from loans sold with servicing retained of $176 and $170 for the three months ended June 30, 2023 and 2022, respectively, and $353 and $316 for the six months ended June 30, 2023 and 2022, respectively. (2) Reclassifications include 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. (3) Amounts include fees collected from customers for originated loans and from other lenders for loans purchased through the correspondent channel, and include loan application, underwriting, and other similar fees. (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 | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 December 31, 2022 Servicing advances, net of $9 and $12 purchase discount, respectively $ 849 $ 1,053 Receivables from agencies, investors and prior servicers, net of $7 purchase discount 109 103 Reserves (156) (137) Total advances and other receivables, net $ 802 $ 1,019 The following table sets forth the activities of the servicing reserves for advances and other receivables: Three Months Ended June 30, Six Months Ended June 30, Reserves for Advances and Other Receivables 2023 2022 2023 2022 Balance - beginning of period $ 148 $ 152 $ 137 $ 167 Provision 9 6 18 12 Reclassifications (1) 9 12 16 22 Write-offs (10) (20) (15) (51) Balance - end of period $ 156 $ 150 $ 156 $ 150 (1) Reclassifications represent 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 June 30, 2023 2022 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 $ 9 $ 7 $ 16 $ 8 Utilization of purchase discounts — — (2) — Balance - end of period $ 9 $ 7 $ 14 $ 8 Six Months Ended June 30, 2023 2022 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 $ 12 $ 7 $ 19 $ 12 Utilization of purchase discounts (3) — (5) (4) Balance - end of period $ 9 $ 7 $ 14 $ 8 Credit Loss for Advances and Other Receivables During the three and six months ended June 30, 2023 , the Company decreased and increased the current expected credit loss (“CECL”) reserve by $1, respectively. During the three and six months ended June 30, 2022, the Company increased the CECL reserve by $3 and $7, respectively. As of June 30, 2023, the total CECL reserve was $37, of which $30 and $7 were recorded in reserves and purchase discount for advances and other receivables, respectively. As of June 30, 2022 , the total CECL reserve was $33, of which $25 and $8 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 increases 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 | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 December 31, 2022 Mortgage loans held for sale – UPB $ 1,211 $ 921 Mark-to-market adjustment (1) (24) (28) Total mortgage loans held for sale $ 1,187 $ 893 (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 “revenues - 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: Six Months Ended June 30, Mortgage Loans Held for Sale 2023 2022 Balance - beginning of period $ 893 $ 4,381 Loans sold and loan payments received (6,845) (24,251) Mortgage loans originated and purchased, net of fees 6,593 19,370 Repurchase of loans out of Ginnie Mae securitizations (1) 547 2,686 Net change in unrealized gain (loss) on retained loans held for sale 5 (115) Net transfers of mortgage loans held for sale (2) (6) 1 Balance - end of period $ 1,187 $ 2,072 (1) The Company has the optional right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased in connection with loan modifications and loan resolution activity, with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. Therefore, these loans are classified as held for sale. (2) Amounts reflect 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. For the six months ended June 30, 2023 and 2022, total realized loss was $3 and $195 from total sales proceeds of $6,722 and $23,863, respectively, on the sale of mortgage loans held for sale. The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows: June 30, 2023 December 31, 2022 Mortgage Loans Held for Sale UPB Fair Value UPB Fair Value Non-accrual (1) $ 80 $ 68 $ 102 $ 87 (1) Non-accrual UPB includes $67 and $90 of UPB related to Ginnie Mae repurchased loans as of June 30, 2023 and December 31, 2022, respectively. The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $48 an d $65 as of June 30, 2023 and December 31, 2022, respectively. |
Loans Subject to Repurchase fro
Loans Subject to Repurchase from Ginnie Mae | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Loans Subject to Repurchase from Ginnie Mae | 6. Loans Subject to Repurchase from Ginnie Mae 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 $1,650 and $1,865 as of June 30, 2023 and December 31, 2022, respectively, which are included in both “other assets” and “payables and other liabilities” in the condensed consolidated balance sheets |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 7. Goodwill and Intangible Assets The Company had goodwill of $120 as of June 30, 2023 and December 31, 2022, and intangible assets of $28 and $8 as of June 30, 2023 and December 31, 2022, respectively. In connection with the Rushmore Transaction, the Company recorded $23 intangible assets in 2023, which primarily consist of subservicing customer relationships. See Note 1, Nature of Business and Basis of Presentation |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
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 interest rate risks related to mortgage loans held for sale and IRLCs (“the pipeline”) and the MSR portfolio. The Company economically hedges the pipeline separately from the MSR portfolio primarily using third-party derivative instruments. Such derivative instruments utilized by the Company include IRLCs, LPCs, forward MBS and Treasury futures. The changes in value on the derivative instruments associated with pipeline hedging are recorded in earnings as a component of “revenues - net gain on mortgage loans held for sale” on the condensed consolidated statements of operations and condensed consolidated statement of cash flows, while changes in the value of derivative instruments associated with the MSR portfolio fair value are recorded in “revenues - service related, net” on the condensed consolidated statements of operations and in “(gain) loss on MSR hedging activities” 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. Gains/(losses) include both realized and unrealized gains/(losses) of each derivative financial instrument. June 30, 2023 Six Months Ended June 30, 2023 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2023 $ 556 $ 8 $ (1) Derivative financial instruments IRLCs 2023 $ 1,041 $ 30 $ 8 LPCs 2023 200 1 — Forward MBS trades 2023 1,712 10 43 Treasury futures 2023 72 — — Total derivative financial instruments - assets $ 3,025 $ 41 $ 51 Liabilities Derivative financial instruments IRLCs 2023 $ 18 $ — $ — LPCs 2023 234 1 — Forward MBS trades 2023 1,175 3 (50) Treasury futures 2023 2,510 20 (44) Total derivative financial instruments - liabilities $ 3,937 $ 24 $ (94) June 30, 2022 Six Months Ended June 30, 2022 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2022 $ 246 $ 8 $ (17) Derivative financial instruments IRLCs 2022 $ 2,103 $ 62 $ (72) LPCs 2022 325 3 — Forward MBS trades 2022 1,798 12 429 Treasury futures 2022 30 — 3 Total derivative financial instruments - assets $ 4,256 $ 77 $ 360 Liabilities Derivative financial instruments IRLCs 2022 $ 56 $ 1 $ (1) LPCs 2022 186 1 1 Forward MBS trades 2022 1,716 13 (31) Treasury futures 2022 902 18 (185) Total derivative financial instruments - liabilities $ 2,860 $ 33 $ (216) |
Indebtedness
Indebtedness | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Indebtedness | 9. Indebtedness Advance, Warehouse and MSR Facilities June 30, 2023 December 31, 2022 Maturity Date Collateral Capacity Amount Outstanding Collateral Pledged Outstanding Collateral Pledged Advance Facilities $350 advance facility October 2024 Servicing advance receivables $ 350 $ 134 $ 169 $ 150 $ 189 $300 advance facility (1) November 2024 Servicing advance receivables 300 259 354 308 410 $250 advance facility January 2024 Servicing advance receivables 250 183 210 171 209 $75 advance facility December 2023 Servicing advance receivables 75 34 65 40 45 Advance facilities principal amount 610 798 669 853 Warehouse Facilities $1500 Warehouse Facility June 2024 Mortgage loans or MBS 1,500 251 252 206 272 $750 Warehouse Facility June 2024 Mortgage loans or MBS 750 186 239 135 133 $750 Warehouse Facility October 2023 Mortgage loans or MBS 750 155 161 202 209 $500 Warehouse Facility June 2024 Mortgage loans or MBS 500 78 84 76 80 $500 Warehouse Facility August 2023 Mortgage loans or MBS 500 101 103 31 32 $300 Warehouse Facility August 2023 Mortgage loans or MBS 300 183 188 115 117 $250 Warehouse Facility (2) September 2024 Mortgage loans or MBS 250 47 52 14 17 $200 Warehouse Facility December 2024 Mortgage loans or MBS 200 59 61 18 21 $100 Warehouse Facility April 2024 Mortgage loans or MBS 100 29 39 19 28 $100 Warehouse Facility April 2024 Mortgage loans or MBS 100 — — — — $75 Warehouse Facility December 2023 Mortgage loans or MBS 75 18 18 1 1 Warehouse facilities principal amount 1,107 1,197 817 910 MSR Facilities $1,450 warehouse facility (1) November 2024 MSR 1,450 250 2,185 260 2,284 $1,000 warehouse facility April 2025 MSR 1,000 550 1,235 380 927 $750 warehouse facility (2) September 2024 MSR 750 320 1,141 380 1,482 $500 warehouse facility June 2024 MSR 500 265 713 365 732 $500 warehouse facility April 2025 MSR 500 199 383 — — $500 warehouse facility June 2025 MSR 500 200 424 — — $50 warehouse facility November 2023 MSR 50 25 66 25 74 MSR facilities principal amount 1,809 6,147 1,410 5,499 Advance, warehouse and MSR facilities principal amount 3,526 8,142 2,896 7,262 Unamortized debt issuance costs (14) (11) Advance, warehouse and MSR facilities, net $ 3,512 $ 2,885 (1) Total capacity for this facility is $1,750, of which $300 is internally allocated for advance financing and $1,450 is internally allocated for MSR financing; capacity is fully fungible and is not restricted by these allocations. (2) The capacity amount for this facility is $1,000, of which $750 is a sublimit for MSR financing. The weighted average interest rate for advance facilities was 7.5% and 3.1% for the three months ended June 30, 2023 and 2022, respectively, and 7.4% and 2.8% for the six months ended June 30, 2023 and 2022, respectively. The weighted average interest rate for warehouse and MSR facilities was 7.4% and 3.1% for the three months ended June 30, 2023 and 2022, respectively, and 7.2% and 2.6% for the six months ended June 30, 2023 and 2022, respectively. Unsecured Senior Notes Unsecured senior notes consist of the following: Unsecured Senior Notes June 30, 2023 December 31, 2022 $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 (24) (27) Unsecured senior notes, net $ 2,676 $ 2,673 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 six months ended June 30, 2023 and 2022. As of June 30, 2023, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows: Year Ending December 31, Amount 2023 through 2026 $ — 2027 600 Thereafter 2,100 Total unsecured senior notes principal amount $ 2,700 Interest Expense Interest expense primarily includes interest incurred on advance, warehouse and MSR facilities, unsecured senior notes, excess spread financing and compensating bank balances, as well as bank fees. The Company incurred interest expense related to advance, warehouse and MSR facilities, unsecured senior notes and excess spread financing of $112 and $211 for the three and six months ended June 30, 2023, respectively, and $90 and $176 for the three and six months ended June 30, 2022, 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 June 30, 2023. |
Securitizations and Financings
Securitizations and Financings | 6 Months Ended |
Jun. 30, 2023 | |
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: June 30, 2023 December 31, 2022 Consolidated Transactions with VIEs Transfers Transfers Assets Restricted cash $ 86 $ 78 Advances and other receivables, net 379 398 Total assets $ 465 $ 476 Liabilities Advance facilities, net (1) $ 317 $ 321 Payables and other liabilities 1 1 Total liabilities $ 318 $ 322 (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 June 30, 2023 December 31, 2022 Total collateral balances - UPB $ 925 $ 976 Total certificate balances $ 901 $ 949 The Company has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of June 30, 2023 and December 31, 2022. 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 June 30, 2023 December 31, 2022 Unconsolidated securitization trusts $ 99 $ 119 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 11. Earnings Per Share Basic earnings per share of common stock is computed by dividing net income by the weighted average number of common stock outstanding during the period. Diluted earnings per share of common stock is computed by dividing net income by the sum of the weighted average number of shares of common stock and any dilutive securities outstanding during the period. The Company’s potentially dilutive securities are share-based awards. The Company applies the treasury stock method to determine the dilutive weighted average number of shares of common stock outstanding based on the outstanding share-based awards. As of June 30, 2023 and December 31, 2022, the Company had 10 million preferred shares authorized at $0.00001, with zero shares issued and outstanding and aggregate liquidation preference of zero dollars. 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 June 30, Six Months Ended June 30, Computation of Earnings Per Share 2023 2022 2023 2022 Net income $ 142 $ 151 $ 179 $ 809 Weighted average shares of common stock outstanding (in thousands): Basic 67,649 72,709 68,325 73,278 Dilutive effect of stock awards 957 1,618 1,316 2,052 Diluted 68,606 74,327 69,641 75,330 Earnings per common share Basic $ 2.10 $ 2.08 $ 2.62 $ 11.04 Diluted $ 2.07 $ 2.03 $ 2.57 $ 10.74 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes For the three and six months ended June 30, 2023, the effective tax rate for operations was 28.4% and 23.3%, respectively, which differed from the statutory federal rate of 21% primarily due to state income taxes and nondeductible executive compensation. For the three and six months ended June 30, 2022, the effective tax rate for operations was 26.0% and 24.4% respectively, which differed from the statutory federal rate of 21% primarily due to state income taxes and nondeductible executive compensation. The change in effective rate during the three and six months ended June 30, 2023 as compared to 2022 is primarily attributable to the impact of quarterly discrete tax items relative to income before taxes for the respective period, including the excess tax benefit from stock-based compensation. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2023 | |
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, 2022, with the exception of the following: Mortgage Servicing Rights – Fair Value (Level 3) – The Company estimates the fair value of its MSRs on a recurring basis using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. Beginning in the second quarter of 2023, the Company valued MSRs using a stochastic option adjusted spread (OAS) instead of a static discount rate. OAS is the incremental spread added to the risk-free rate to reflect embedded (prepayment) optionality and other risk inherent in the MSRs to discount cash flows. The cash flow assumptions used in the discounted cash flow model incorporate prepayment speeds, OAS, costs to service, delinquencies, ancillary revenues, recapture rates and other assumptions, with the key assumptions being mortgage prepayment speeds, OAS, and cost to service. The cash flow assumptions are generated and applied based on collateral stratifications including product type, remittance type, geography, delinquency and coupon dispersion. These assumptions require the use of judgment by the Company and can have a significant impact on the fair value of the MSRs. Quarterly, management obtains third-party valuations to assess the reasonableness of the fair value calculations provided by the internal cash flow model. Because of the nature of the valuation inputs, the Company classifies these valuations as Level 3 in the fair value disclosures. See Note 3, Mortgage Servicing Rights and Related Liabilities , for more information. Excess Spread Financing (Level 3) – The Company estimates fair value on a recurring basis based on the present value of future expected discounted cash flows with the discount rate approximating current market value for similar financial instruments. Beginning in the second quarter of 2023, the Company valued excess spread financing using a stochastic OAS instead of a static discount rate. The cash flow assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds and OAS. Quarterly, management obtains a third-party valuation to assess the reasonableness of the fair value calculations provided by the internal cash flow model. As these prices are derived from a combination of internally developed valuation models and quoted market prices based on the value of the underlying MSRs, the Company classifies these valuations as Level 3 in the fair value disclosures. Excess spread financing is recorded in MSR related liabilities within the condensed consolidated balance sheets. 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: June 30, 2023 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 1,187 $ — $ 1,120 $ 67 Mortgage servicing rights 7,149 — — 7,149 Equity investments 43 1 — 42 Derivative financial instruments IRLCs 30 — — 30 LPCs 1 — — 1 Forward MBS trades 10 — 10 — Liabilities Derivative financial instruments LPCs 1 — — 1 Forward MBS trades 3 — 3 — Treasury futures 20 — 20 — Mortgage servicing rights financing 23 — — 23 Excess spread financing 459 — — 459 December 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 $ 893 $ — $ 819 $ 74 Mortgage servicing rights 6,654 — — 6,654 Equity investments 47 2 — 45 Derivative financial instruments IRLCs 22 — — 22 Forward MBS trades 8 — 8 — LPCs 1 — — 1 Liabilities Derivative financial instruments Forward MBS trades 9 — 9 — LPCs 1 — — 1 Treasury futures 14 — 14 — Mortgage servicing rights financing 19 — — 19 Excess spread financing 509 — — 509 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: Six Months Ended June 30, 2023 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Mortgage servicing rights Mortgage loans held for sale Equity investments IRLCs Excess spread financing Mortgage servicing rights financing Balance - beginning of period $ 6,654 $ 74 $ 45 $ 22 $ 509 $ 19 Changes in fair value included in earnings (239) 2 (3) 8 (10) 4 Purchases/additions (1) 870 47 — — — — Issuances 133 — — — — — Sales/dispositions (2) (280) (54) — — — — Repayments — (2) — — (4) — Settlements — — — — (36) — Other changes 11 — — — — — Balance - end of period $ 7,149 $ 67 $ 42 $ 30 $ 459 $ 23 Six Months Ended June 30, 2022 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Mortgage servicing rights Equity investments 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 663 — (72) 117 14 Purchases 1,178 — — — — Issuances 360 — — — — Sales (289) — — — — Repayments — — — (292) — Settlements — — — (61) — Other changes 16 — — — — Balance - end of period $ 6,151 $ 54 $ 62 $ 532 $ 24 (1) Additions for mortgages loans held for sale include loans that are purchased or transferred in. (2) Dispositions for mortgage loans held for sales include loans that are sold or transferred out. The Company had immaterial LPCs assets and liabilities as of June 30, 2023 and 2022. No transfers were made in or out of Level 3 fair value assets and liabilities for the Company during the six months ended June 30, 2023 and 2022. The table below presents the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities. June 30, 2023 December 31, 2022 Range Weighted Average Range Weighted Average Level 3 Inputs Min Max Min Max MSRs (1) Option adjusted spread (2) 6.8 % 12.0 % 8.0 % N/A N/A N/A Discount rate N/A N/A N/A 10.4 % 13.7 % 11.4 % Prepayment speed 6.5 % 12.7 % 7.6 % 6.3 % 12.2 % 7.2 % Cost to service per loan (3) $ 56 $ 157 $ 83 $ 54 $ 155 $ 80 Average life (4) 7.9 years 8.1 years Mortgage loans held for sale Market pricing 45.0 % 102.1 % 77.5 % 37.3 % 114.7 % 77.4 % IRLCs Value of servicing (reflected as a percentage of loan commitment) — % 4.0 % 2.0 % (0.6) % 3.9 % 2.3 % Excess spread financing (1) Option adjusted spread (2) 6.8 % 12.0 % 8.5 % N/A N/A N/A Discount rate N/A N/A N/A 10.0 % 13.8 % 11.3 % Prepayment speed 7.3 % 13.7 % 9.7 % 6.9 % 13.3 % 9.2 % Average life (4) 6.4 years 6.6 years Mortgage servicing rights financing Advance financing and counterparty fee rates 5.6 % 8.8 % 7.0 % 5.2 % 8.6 % 7.1 % Annual advance recovery rates 14.0 % 17.2 % 15.0 % 15.9 % 20.6 % 17.3 % (1) The inputs are weighted by investor. (2) OAS represents incremental spread above a risk-free rate (one-month SOFR), which is an observable input. See discussion on methodology above. (3) Presented in whole dollar amounts. (4) 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: June 30, 2023 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 517 $ 517 $ — $ — Restricted cash 170 170 — — Advances and other receivables, net 802 — — 802 Loans subject to repurchase from Ginnie Mae 1,650 — 1,650 — Financial liabilities Unsecured senior notes, net 2,676 — 2,322 — Advance, warehouse and MSR facilities, net 3,512 — 3,526 — Liability for loans subject to repurchase from Ginnie Mae 1,650 — 1,650 — December 31, 2022 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 527 $ 527 $ — $ — Restricted cash 175 175 — — Advances and other receivables, net 1,019 — — 1,019 Loans subject to repurchase from Ginnie Mae 1,865 — 1,865 — Financial liabilities Unsecured senior notes, net 2,673 — 2,209 — Advance, warehouse and MSR facilities, net 2,885 — 2,896 — Liability for loans subject to repurchase from Ginnie Mae 1,865 — 1,865 — |
Capital Requirements
Capital Requirements | 6 Months Ended |
Jun. 30, 2023 | |
Mortgage Banking [Abstract] | |
Capital Requirements | 14. Capital Requirements Fannie Mae, Freddie Mac, Ginnie Mae and certain private label mortgage investors require the Company to maintain 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 June 30, 2023, the Company was in compliance with its selling and servicing capital requirements. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
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 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. While it is not possible to predict the outcome of any of these matters, based on the Company’s assessment of the facts and circumstances, it does not believe any of these matters, individually or in the aggregate, will have a material adverse effect on the financial position, results of operations or cash flows of the Company. However, actual outcomes may differ from those expected and could have a material effect on our financial position, results of operations, or cash flows in a future period. The Company will continue to monitor legal matters for further developments that could affect the amount of the accrued liability that has been previously established. Legal-related expenses 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. The Company recorded legal-related expenses, net of recoveries, which includes legal settlements and the fees paid to external legal service providers, of $12 and $21 during the three and six months ended June 30, 2023, respectively, and $10 and $8 for the three and six months ended June 30, 2022, respectively, which are included in “expenses - general and administrative” on the unaudited condensed consolidated statements of operations. Management currently believes the aggregate range of reasonably possible loss is $2 to $4 in exce ss of the accrued liability (if any) related to those matters as of June 30, 2023. 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. 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. As of June 30, 2023, 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 | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | 16. Segment Information The Company’s segments reflect the internal reporting the chief operating decision maker uses to evaluate operating performance and are based upon the Company’s organizational structure, which focuses primarily on the services offered. A brief description of our current business segments is as follows: Servicing: This segment performs operational activities on behalf of investors or owners of the underlying mortgages and mortgage servicing rights, including collecting and disbursing borrower payments, investor reporting, customer service, modifying loans where appropriate to help borrowers stay current, and when necessary performing collections, foreclosures, and the sale of REO. Originations : This segment originates residential mortgage loans through our direct-to-consumer channel, which provides refinance options for our existing customers, and through our correspondent channel, which purchases or originates loans from mortgage bankers. Corporate/Other : Functional expenses are allocated to individual segments based on the actual cost of services performed, direct resource utilization, or headcount percentage for shared services. During the fourth quarter of 2022, the Company began allocating shared services based on headcount instead of an estimate of percentage use as it changed its segment measures provided to and used by the chief operating decision maker. As a result, all costs for shared services are allocated to individual segments based on headcount. The Company recast segment information for the historical periods presented herein to reflect the allocation method change and to conform to the current presentation. The change affects total expenses for Servicing and Originations segments and Corporate/Other, but had no effect on condensed consolidated statements of operations. Non-allocated corporate expenses include the administrative costs of executive management and other corporate functions that are not directly attributable to the Company’s operating segments. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties. Eliminations are included in Corporate/Other. The following tables present financial information by segment: Three Months Ended June 30, 2023 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 365 $ 16 $ 21 $ 402 Net gain on mortgage loans held for sale 3 81 — 84 Total revenues 368 97 21 486 Total expenses 159 59 60 278 Interest income 107 10 — 117 Interest expense (73) (10) (39) (122) Other expense, net — — (5) (5) Total other income (expenses), net 34 — (44) (10) Income (loss) before income tax expense (benefit) $ 243 $ 38 $ (83) $ 198 Depreciation and amortization for property and equipment and intangible assets $ 3 $ 2 $ 4 $ 9 Total assets $ 10,231 $ 1,086 $ 1,827 $ 13,144 Three Months Ended June 30, 2022 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 414 $ 24 $ 22 $ 460 Net (loss) gain on mortgage loans held for sale (19) 158 — 139 Total revenues 395 182 22 599 Total expenses 143 125 60 328 Interest income 35 15 — 50 Interest expense (61) (10) (40) (111) Other expense, net — — (5) (5) Total other (expenses) income, net (26) 5 (45) (66) Income (loss) before income tax expense (benefit) $ 226 $ 62 $ (83) $ 205 Depreciation and amortization for property and equipment and intangible assets $ 5 $ 5 $ (1) $ 9 Total assets $ 9,645 $ 1,381 $ 1,869 $ 12,895 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 142 | $ 151 | $ 179 | $ 809 |
Insider Trading Arrangements
Insider Trading Arrangements - Jay Bray [Member] shares in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 shares | Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | Jay Bray, Chairman and Chief Executive Officer, entered into a pre-arranged stock trading plan (the “10b5-1 Plan”) with a brokerage firm to sell up to a maximum of 300,000 shares of the Company’s common stock between September 29, 2023 and September 30, 2024. The 10b5-1 Plan was designed to comply with the guidelines specified in Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended, and is intended to satisfy the affirmative defense of Rule 10b5–1(c). | |
Name | Jay Bray | |
Title | Chairman and Chief Executive Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 14, 2023 | |
Jay Bray Trading Arrangement Maximum [Member] | ||
Trading Arrangements, by Individual | ||
Aggregate Available | 300 | 300 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
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, 2022. |
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 the 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 and updated for observable price changes 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, macro-economic uncertainty, 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 and such differences could be material. |
Reclassification | Reclassifications Certain reclassifications have been made in the 2022 condensed consolidated statement of cash flows to conform to 2023 presentation. Such reclassifications were not material and 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 six months ended June 30, 2023 that had a material impact on its condensed consolidated financial statements or disclosures. |
Mortgage Servicing Rights and_2
Mortgage Servicing Rights and Related Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 December 31, 2022 MSRs - fair value $ 7,149 $ 6,654 Excess spread financing at fair value $ 459 $ 509 Mortgage servicing rights financing at fair value 23 19 MSR related liabilities - nonrecourse at fair value $ 482 $ 528 The following table sets forth the activities of MSRs: Six Months Ended June 30, MSRs - Fair Value 2023 2022 Fair value - beginning of period $ 6,654 $ 4,223 Additions: Servicing retained from mortgage loans sold 133 360 Purchases of servicing rights 870 1,178 Dispositions: Sales of servicing assets and excess yield (280) (289) Changes in fair value: Changes in valuation inputs or assumptions used in the valuation model (MSR MTM) 34 1,124 Changes in valuation due to amortization (273) (461) Other changes (1) 11 16 Fair value - end of period $ 7,149 $ 6,151 (1) Amounts primarily represent negative fair values reclassified from the MSR asset to reserves as underlying loans are removed from the MSR and other reclassification adjustments. The following table provides a breakdown of UPB and fair value for the Company’s MSRs: June 30, 2023 December 31, 2022 MSRs - UPB and Fair Value Breakdown by Investor Pools UPB Fair Value UPB Fair Value Agency $ 431,876 $ 6,848 $ 380,502 $ 6,322 Non-agency 27,600 301 30,880 332 Total $ 459,476 $ 7,149 $ 411,382 $ 6,654 |
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: Option Adjusted Spread (1) 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 June 30, 2023 Mortgage servicing rights $ (286) $ (549) $ (157) $ (305) $ (69) $ (139) 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 December 31, 2022 Mortgage servicing rights $ (266) $ (511) $ (136) $ (264) $ (61) $ (122) 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: Option Adjusted Spread (1) Prepayment Speeds Excess Spread Financing - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change June 30, 2023 Excess spread financing $ 16 $ 34 $ 6 $ 18 Discount Rate Prepayment Speeds Excess Spread Financing - Hypothetical Sensitivities 100 bps Adverse Change 200 bps Adverse Change 10% Adverse Change 20% Adverse Change December 31, 2022 Excess spread financing $ 19 $ 40 $ 11 $ 22 |
Schedule of fees earned in exchange for servicing financial assets | The following table sets forth the items comprising total “revenues - service related, net”: Three Months Ended June 30, Six Months Ended June 30, Revenues - Service Related, net 2023 2022 2023 2022 Contractually specified servicing fees (1) $ 407 $ 378 $ 791 $ 705 Other service-related income (1) 19 39 33 72 Incentive and modification income (1) 8 9 14 18 Servicing late fees (1) 23 19 44 38 Mark-to-market adjustments - Servicing MSR MTM 139 326 34 1,124 Loss on MSR hedging activities (111) (89) (52) (229) Gain on MSR sales 32 1 32 1 Reclassifications (2) (9) (6) (18) (12) Excess spread /MSR financing MTM 12 (32) 6 (131) Total mark-to-market adjustments - Servicing 63 200 2 753 Amortization, net of accretion MSR amortization (148) (226) (273) (461) Excess spread accretion 11 27 21 60 Total amortization, net of accretion (137) (199) (252) (401) Originations service fees (3) 16 24 27 66 Corporate/Xome related service fees 21 22 40 34 Other (4) (18) (32) (36) (70) Total revenues - Service Related, net $ 402 $ 460 $ 663 $ 1,215 (1) The Company recognizes revenue on an earned basis for services performed. Amounts include subservicing related revenues. Amounts also include servicing fees from loans sold with servicing retained of $176 and $170 for the three months ended June 30, 2023 and 2022, respectively, and $353 and $316 for the six months ended June 30, 2023 and 2022, respectively. (2) Reclassifications include 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. (3) Amounts include fees collected from customers for originated loans and from other lenders for loans purchased through the correspondent channel, and include loan application, underwriting, and other similar fees. (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) | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Advances and other receivables, net, consists of the following: Advances and Other Receivables, Net June 30, 2023 December 31, 2022 Servicing advances, net of $9 and $12 purchase discount, respectively $ 849 $ 1,053 Receivables from agencies, investors and prior servicers, net of $7 purchase discount 109 103 Reserves (156) (137) Total advances and other receivables, net $ 802 $ 1,019 The following table sets forth the activities of the servicing reserves for advances and other receivables: Three Months Ended June 30, Six Months Ended June 30, Reserves for Advances and Other Receivables 2023 2022 2023 2022 Balance - beginning of period $ 148 $ 152 $ 137 $ 167 Provision 9 6 18 12 Reclassifications (1) 9 12 16 22 Write-offs (10) (20) (15) (51) Balance - end of period $ 156 $ 150 $ 156 $ 150 (1) Reclassifications represent 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 June 30, 2023 2022 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 $ 9 $ 7 $ 16 $ 8 Utilization of purchase discounts — — (2) — Balance - end of period $ 9 $ 7 $ 14 $ 8 Six Months Ended June 30, 2023 2022 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 $ 12 $ 7 $ 19 $ 12 Utilization of purchase discounts (3) — (5) (4) Balance - end of period $ 9 $ 7 $ 14 $ 8 |
Mortgage Loans Held for Sale (T
Mortgage Loans Held for Sale (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 December 31, 2022 Mortgage loans held for sale – UPB $ 1,211 $ 921 Mark-to-market adjustment (1) (24) (28) Total mortgage loans held for sale $ 1,187 $ 893 (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 “revenues - 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: Six Months Ended June 30, Mortgage Loans Held for Sale 2023 2022 Balance - beginning of period $ 893 $ 4,381 Loans sold and loan payments received (6,845) (24,251) Mortgage loans originated and purchased, net of fees 6,593 19,370 Repurchase of loans out of Ginnie Mae securitizations (1) 547 2,686 Net change in unrealized gain (loss) on retained loans held for sale 5 (115) Net transfers of mortgage loans held for sale (2) (6) 1 Balance - end of period $ 1,187 $ 2,072 (1) The Company has the optional right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased in connection with loan modifications and loan resolution activity, with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. Therefore, these loans are classified as held for sale. (2) Amounts reflect 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: June 30, 2023 December 31, 2022 Mortgage Loans Held for Sale UPB Fair Value UPB Fair Value Non-accrual (1) $ 80 $ 68 $ 102 $ 87 (1) Non-accrual UPB includes $67 and $90 of UPB related to Ginnie Mae repurchased loans as of June 30, 2023 and December 31, 2022, respectively. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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. Gains/(losses) include both realized and unrealized gains/(losses) of each derivative financial instrument. June 30, 2023 Six Months Ended June 30, 2023 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2023 $ 556 $ 8 $ (1) Derivative financial instruments IRLCs 2023 $ 1,041 $ 30 $ 8 LPCs 2023 200 1 — Forward MBS trades 2023 1,712 10 43 Treasury futures 2023 72 — — Total derivative financial instruments - assets $ 3,025 $ 41 $ 51 Liabilities Derivative financial instruments IRLCs 2023 $ 18 $ — $ — LPCs 2023 234 1 — Forward MBS trades 2023 1,175 3 (50) Treasury futures 2023 2,510 20 (44) Total derivative financial instruments - liabilities $ 3,937 $ 24 $ (94) June 30, 2022 Six Months Ended June 30, 2022 Derivative Financial Instruments Expiration Outstanding Fair Gains/(Losses) Assets Mortgage loans held for sale Loan sale commitments 2022 $ 246 $ 8 $ (17) Derivative financial instruments IRLCs 2022 $ 2,103 $ 62 $ (72) LPCs 2022 325 3 — Forward MBS trades 2022 1,798 12 429 Treasury futures 2022 30 — 3 Total derivative financial instruments - assets $ 4,256 $ 77 $ 360 Liabilities Derivative financial instruments IRLCs 2022 $ 56 $ 1 $ (1) LPCs 2022 186 1 1 Forward MBS trades 2022 1,716 13 (31) Treasury futures 2022 902 18 (185) Total derivative financial instruments - liabilities $ 2,860 $ 33 $ (216) |
Indebtedness (Tables)
Indebtedness (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of unsecured senior notes | Unsecured senior notes consist of the following: Unsecured Senior Notes June 30, 2023 December 31, 2022 $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 (24) (27) Unsecured senior notes, net $ 2,676 $ 2,673 |
Schedule of maturities of long-term debt | As of June 30, 2023, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows: Year Ending December 31, Amount 2023 through 2026 $ — 2027 600 Thereafter 2,100 Total unsecured senior notes principal amount $ 2,700 |
Securitizations and Financings
Securitizations and Financings (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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: June 30, 2023 December 31, 2022 Consolidated Transactions with VIEs Transfers Transfers Assets Restricted cash $ 86 $ 78 Advances and other receivables, net 379 398 Total assets $ 465 $ 476 Liabilities Advance facilities, net (1) $ 317 $ 321 Payables and other liabilities 1 1 Total liabilities $ 318 $ 322 (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 June 30, 2023 December 31, 2022 Total collateral balances - UPB $ 925 $ 976 Total certificate balances $ 901 $ 949 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 June 30, 2023 December 31, 2022 Unconsolidated securitization trusts $ 99 $ 119 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, Six Months Ended June 30, Computation of Earnings Per Share 2023 2022 2023 2022 Net income $ 142 $ 151 $ 179 $ 809 Weighted average shares of common stock outstanding (in thousands): Basic 67,649 72,709 68,325 73,278 Dilutive effect of stock awards 957 1,618 1,316 2,052 Diluted 68,606 74,327 69,641 75,330 Earnings per common share Basic $ 2.10 $ 2.08 $ 2.62 $ 11.04 Diluted $ 2.07 $ 2.03 $ 2.57 $ 10.74 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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: June 30, 2023 Recurring Fair Value Measurements Fair Value - Recurring Basis Total Fair Value Level 1 Level 2 Level 3 Assets Mortgage loans held for sale $ 1,187 $ — $ 1,120 $ 67 Mortgage servicing rights 7,149 — — 7,149 Equity investments 43 1 — 42 Derivative financial instruments IRLCs 30 — — 30 LPCs 1 — — 1 Forward MBS trades 10 — 10 — Liabilities Derivative financial instruments LPCs 1 — — 1 Forward MBS trades 3 — 3 — Treasury futures 20 — 20 — Mortgage servicing rights financing 23 — — 23 Excess spread financing 459 — — 459 December 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 $ 893 $ — $ 819 $ 74 Mortgage servicing rights 6,654 — — 6,654 Equity investments 47 2 — 45 Derivative financial instruments IRLCs 22 — — 22 Forward MBS trades 8 — 8 — LPCs 1 — — 1 Liabilities Derivative financial instruments Forward MBS trades 9 — 9 — LPCs 1 — — 1 Treasury futures 14 — 14 — Mortgage servicing rights financing 19 — — 19 Excess spread financing 509 — — 509 |
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: Six Months Ended June 30, 2023 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Mortgage servicing rights Mortgage loans held for sale Equity investments IRLCs Excess spread financing Mortgage servicing rights financing Balance - beginning of period $ 6,654 $ 74 $ 45 $ 22 $ 509 $ 19 Changes in fair value included in earnings (239) 2 (3) 8 (10) 4 Purchases/additions (1) 870 47 — — — — Issuances 133 — — — — — Sales/dispositions (2) (280) (54) — — — — Repayments — (2) — — (4) — Settlements — — — — (36) — Other changes 11 — — — — — Balance - end of period $ 7,149 $ 67 $ 42 $ 30 $ 459 $ 23 Six Months Ended June 30, 2022 Assets Liabilities Fair Value - Level 3 Assets and Liabilities Mortgage servicing rights Equity investments 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 663 — (72) 117 14 Purchases 1,178 — — — — Issuances 360 — — — — Sales (289) — — — — Repayments — — — (292) — Settlements — — — (61) — Other changes 16 — — — — Balance - end of period $ 6,151 $ 54 $ 62 $ 532 $ 24 |
Fair value measurement inputs and valuation techniques | The table below presents the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities. June 30, 2023 December 31, 2022 Range Weighted Average Range Weighted Average Level 3 Inputs Min Max Min Max MSRs (1) Option adjusted spread (2) 6.8 % 12.0 % 8.0 % N/A N/A N/A Discount rate N/A N/A N/A 10.4 % 13.7 % 11.4 % Prepayment speed 6.5 % 12.7 % 7.6 % 6.3 % 12.2 % 7.2 % Cost to service per loan (3) $ 56 $ 157 $ 83 $ 54 $ 155 $ 80 Average life (4) 7.9 years 8.1 years Mortgage loans held for sale Market pricing 45.0 % 102.1 % 77.5 % 37.3 % 114.7 % 77.4 % IRLCs Value of servicing (reflected as a percentage of loan commitment) — % 4.0 % 2.0 % (0.6) % 3.9 % 2.3 % Excess spread financing (1) Option adjusted spread (2) 6.8 % 12.0 % 8.5 % N/A N/A N/A Discount rate N/A N/A N/A 10.0 % 13.8 % 11.3 % Prepayment speed 7.3 % 13.7 % 9.7 % 6.9 % 13.3 % 9.2 % Average life (4) 6.4 years 6.6 years Mortgage servicing rights financing Advance financing and counterparty fee rates 5.6 % 8.8 % 7.0 % 5.2 % 8.6 % 7.1 % Annual advance recovery rates 14.0 % 17.2 % 15.0 % 15.9 % 20.6 % 17.3 % (1) The inputs are weighted by investor. (2) OAS represents incremental spread above a risk-free rate (one-month SOFR), which is an observable input. See discussion on methodology above. (3) Presented in whole dollar amounts. (4) 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: June 30, 2023 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 517 $ 517 $ — $ — Restricted cash 170 170 — — Advances and other receivables, net 802 — — 802 Loans subject to repurchase from Ginnie Mae 1,650 — 1,650 — Financial liabilities Unsecured senior notes, net 2,676 — 2,322 — Advance, warehouse and MSR facilities, net 3,512 — 3,526 — Liability for loans subject to repurchase from Ginnie Mae 1,650 — 1,650 — December 31, 2022 Carrying Fair Value Financial Instruments Level 1 Level 2 Level 3 Financial assets Cash and cash equivalents $ 527 $ 527 $ — $ — Restricted cash 175 175 — — Advances and other receivables, net 1,019 — — 1,019 Loans subject to repurchase from Ginnie Mae 1,865 — 1,865 — Financial liabilities Unsecured senior notes, net 2,673 — 2,209 — Advance, warehouse and MSR facilities, net 2,885 — 2,896 — Liability for loans subject to repurchase from Ginnie Mae 1,865 — 1,865 — |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The following tables present financial information by segment: Three Months Ended June 30, 2023 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 365 $ 16 $ 21 $ 402 Net gain on mortgage loans held for sale 3 81 — 84 Total revenues 368 97 21 486 Total expenses 159 59 60 278 Interest income 107 10 — 117 Interest expense (73) (10) (39) (122) Other expense, net — — (5) (5) Total other income (expenses), net 34 — (44) (10) Income (loss) before income tax expense (benefit) $ 243 $ 38 $ (83) $ 198 Depreciation and amortization for property and equipment and intangible assets $ 3 $ 2 $ 4 $ 9 Total assets $ 10,231 $ 1,086 $ 1,827 $ 13,144 Three Months Ended June 30, 2022 Financial Information by Segment Servicing Originations Corporate/Other Consolidated Revenues Service related, net $ 414 $ 24 $ 22 $ 460 Net (loss) gain on mortgage loans held for sale (19) 158 — 139 Total revenues 395 182 22 599 Total expenses 143 125 60 328 Interest income 35 15 — 50 Interest expense (61) (10) (40) (111) Other expense, net — — (5) (5) Total other (expenses) income, net (26) 5 (45) (66) Income (loss) before income tax expense (benefit) $ 226 $ 62 $ (83) $ 205 Depreciation and amortization for property and equipment and intangible assets $ 5 $ 5 $ (1) $ 9 Total assets $ 9,645 $ 1,381 $ 1,869 $ 12,895 |
Nature of Business and Basis _3
Nature of Business and Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Jun. 30, 2023 | May 01, 2023 | |
Business Combination, Description [Abstract] | ||
Asset Acquisition, Consideration Transferred | $ 34 | |
Home Point Capital Inc [Member] | ||
Business Combination, Description [Abstract] | ||
Price per share (in dollars per share) | $ 2.33 |
Discontinued Operations and D_2
Discontinued Operations and Disposal Groups (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Sagent M&C, LLC | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income (Loss) from Equity Method Investments | $ 4 | $ 11 | ||
Equity Method Investments | $ 226 | 226 | $ 250 | |
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 | $ 0 | $ 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 | Jun. 30, 2023 | Dec. 31, 2022 |
Mortgage Servicing Rights [Line Items] | ||
Excess spread financing at fair value | $ 459 | $ 509 |
Mortgage servicing rights financing at fair value | 23 | 19 |
MSR related liabilities - nonrecourse at fair value | 482 | 528 |
Mortgage servicing rights | ||
Mortgage Servicing Rights [Line Items] | ||
MSRs - fair value | $ 7,149 | $ 6,654 |
Mortgage Servicing Rights and_4
Mortgage Servicing Rights and Related Liabilities - MSR's at Fair Value (Details) - Mortgage servicing rights - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Fair value - beginning of period | $ 6,654 | $ 4,223 |
Servicing retained from mortgage loans sold | 133 | 360 |
Purchases of servicing rights | 870 | 1,178 |
Sales of servicing assets and excess yield | (280) | (289) |
Changes in valuation inputs or assumptions used in the valuation model (MSR MTM) | 34 | 1,124 |
Changes in valuation due to amortization | (273) | (461) |
Other changes(1) | 11 | 16 |
Fair value - end of period | $ 7,149 | $ 6,151 |
Mortgage Servicing Rights and_5
Mortgage Servicing Rights and Related Liabilities - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Servicing Asset at Amortized Cost [Line Items] | |||
Excess spread financing - fair value | $ 459 | $ 509 | |
Forward MSRs Sold | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB | 1,605 | $ 20,052 | |
Forward MSRs Sold, Subservicing Retained | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB | 590 | $ 19,367 | |
Excess spread financing | |||
Servicing Asset at Amortized Cost [Line Items] | |||
UPB | $ 78,838 | $ 83,706 |
Mortgage Servicing Rights and_6
Mortgage Servicing Rights and Related Liabilities - UPB related to owned MSRs (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | |
Owned Service Loans [Line Items] | |||
Gain on Sale of Excess Yield | $ 33 | ||
Sale of Excess Yield, Total Proceeds | 294 | ||
Sale of Excess Yield, UPB | 41,958 | ||
Mortgage servicing rights | |||
Owned Service Loans [Line Items] | |||
UPB | 459,476 | $ 411,382 | |
Fair Value | 7,149 | 6,654 | |
Forward MSRs Sold | |||
Owned Service Loans [Line Items] | |||
UPB | 1,605 | $ 20,052 | |
Forward MSRs Sold, Subservicing Retained | |||
Owned Service Loans [Line Items] | |||
UPB | 590 | $ 19,367 | |
Agency | Mortgage servicing rights | |||
Owned Service Loans [Line Items] | |||
UPB | 431,876 | 380,502 | |
Fair Value | 6,848 | 6,322 | |
Non-agency | Mortgage servicing rights | |||
Owned Service Loans [Line Items] | |||
UPB | 27,600 | 30,880 | |
Fair Value | $ 301 | $ 332 |
Mortgage Servicing Rights and_7
Mortgage Servicing Rights and Related Liabilities - Fair Value Sensitivity Analysis (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Mortgage servicing rights | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Total prepayment speeds, 10% Adverse Change | $ (157) | $ (136) |
Total prepayment speeds, 20% Adverse Change | (305) | (264) |
Cost to Service per Loan, 10% Adverse Change | (69) | (61) |
Cost to Service per Loan, 20% Adverse Change | (139) | (122) |
Mortgage servicing rights | 100 bps Adverse Change | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Option Adjusted Spread(1) | (286) | |
Mortgage servicing rights | 200 bps Adverse Change | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Option Adjusted Spread(1) | (549) | |
Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Total prepayment speeds, 10% Adverse Change | 6 | 11 |
Total prepayment speeds, 20% Adverse Change | 18 | 22 |
Excess spread financing | 100 bps Adverse Change | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Option Adjusted Spread(1) | 16 | |
Excess spread financing | 200 bps Adverse Change | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Option Adjusted Spread(1) | $ 34 | |
100 bps Adverse Change | Mortgage servicing rights | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Option Adjusted Spread(1) | (266) | |
100 bps Adverse Change | Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Option Adjusted Spread(1) | 19 | |
200 bps Adverse Change | Mortgage servicing rights | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Option Adjusted Spread(1) | (511) | |
200 bps Adverse Change | Excess spread financing | ||
Excess Spread Financing - Hypothetical Sensitivities | ||
Option Adjusted Spread(1) | $ 40 |
Mortgage Servicing Rights and_8
Mortgage Servicing Rights and Related Liabilities - Servicing Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Transfers and Servicing [Abstract] | ||||
Contractually specified servicing fees(1) | $ 407,000,000 | $ 378,000,000 | $ 791,000,000 | $ 705,000,000 |
Other service-related income(1) | 19,000,000 | 39,000,000 | 33,000,000 | 72,000,000 |
Incentive and modification income(1) | 8,000,000 | 9,000,000 | 14,000,000 | 18,000,000 |
Servicing late fees(1) | 23,000,000 | 19,000,000 | 44,000,000 | 38,000,000 |
MSR MTM | (139,000,000) | (326,000,000) | (34,000,000) | (1,124,000,000) |
Loss on MSR hedging activities | (111,000,000) | (89,000,000) | (52,000,000) | (229,000,000) |
Gain on MSR sales | 32,000,000 | 1,000,000 | 32,000,000 | 1,000,000 |
Reclassifications(2) | (9,000,000) | (6,000,000) | (18,000,000) | (12,000,000) |
Excess spread /MSR financing MTM | 12,000,000 | (32,000,000) | 6,000,000 | (131,000,000) |
Total mark-to-market adjustments - Servicing | (63,000,000) | (200,000,000) | (2,000,000) | (753,000,000) |
MSR amortization | 148,000,000 | 226,000,000 | 273,000,000 | 461,000,000 |
Excess spread accretion | (11,000,000) | (27,000,000) | (21,000,000) | (60,000,000) |
Total amortization, net of accretion | 137,000,000 | 199,000,000 | 252,000,000 | 401,000,000 |
Originations service fees(3) | 16,000,000 | 24,000,000 | 27,000,000 | 66,000,000 |
Corporate/Xome related service fees | 21,000,000 | 22,000,000 | 40,000,000 | 34,000,000 |
Other(4) | 18,000,000 | 32,000,000 | 36,000,000 | 70,000,000 |
Total revenues - Service Related, net | 402,000,000 | 460,000,000 | 663,000,000 | 1,215,000,000 |
Cash Flows Between Transferor and Transferee, Servicing Fees | $ 176,000,000 | $ 170,000,000 | $ 353,000,000 | $ 316,000,000 |
Advances and Other Receivable_2
Advances and Other Receivables - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||||||
Servicing advances, net of $9 and $12 purchase discount, respectively | $ 849 | $ 1,053 | ||||
Receivables from agencies, investors and prior servicers, net of $7 purchase discount | 109 | 103 | ||||
Reserves | (156) | (137) | ||||
Total advances and other receivables, net | 802 | 1,019 | ||||
Servicing advances discount | 9 | $ 9 | 12 | $ 14 | $ 16 | $ 19 |
Receivables discount | $ 7 | $ 7 | $ 7 | $ 8 | $ 8 | $ 12 |
Advances and Other Receivable_3
Advances and Other Receivables - Advances and Other Receivables Roll Forward (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Reserves for Advances and Other Receivables | ||||
Advances and Other Receivables, Servicing Reserves | $ 148 | $ 152 | $ 137 | $ 167 |
Provision | 9 | 6 | 18 | 12 |
Reclassifications(1) | 9 | 12 | 16 | 22 |
Write-offs | (10) | (20) | (15) | (51) |
Advances and Other Receivables, Servicing Reserves | $ 156 | $ 150 | $ 156 | $ 150 |
Advances and Other Receivable_4
Advances and Other Receivables - Purchase Discount (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Servicing Advances | ||||
Servicing Advances, Discount | $ 9 | $ 16 | $ 12 | $ 19 |
Utilization of purchase discounts | 0 | (2) | (3) | (5) |
Servicing Advances, Discount | 9 | 14 | 9 | 14 |
Receivables from Agencies, Investors and Prior Servicers | ||||
Receivable with Imputed Interest, Discount | 7 | 8 | 7 | 8 |
Utilization of purchase discounts | 0 | 0 | 0 | (4) |
Receivable with Imputed Interest, Discount | $ 7 | $ 8 | $ 7 | $ 12 |
Advances and Other Receivable_5
Advances and Other Receivables - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing receivable, allowance for credit loss | $ 37 | $ 33 | $ 37 | $ 33 |
Financial instruments collection period | 39 months | |||
Advances and other receivables reserve | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Provision | 1 | (3) | $ (1) | (7) |
Financing receivable, allowance for credit loss | 30 | 25 | 30 | 25 |
Purchase Discount | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Financing receivable, allowance for credit loss | $ 7 | $ 8 | $ 7 | $ 8 |
Mortgage Loans Held for Sale -
Mortgage Loans Held for Sale - Mortgage Loans Held for Sale (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Mortgage loans held for sale – UPB | $ 1,211 | $ 921 |
Mark-to-market adjustment(1) | (24) | (28) |
Total mortgage loans held for sale | 1,187 | 893 |
UPB | 80 | 102 |
Fair Value | 68 | 87 |
Ginnie mae repurchased loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
UPB | $ 67 | $ 90 |
Mortgage Loans Held for Sale _2
Mortgage Loans Held for Sale - Reconciliation to Cash Flow (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Mortgage Loans Held for Sale | ||
Balance - beginning of period | $ 893 | $ 4,381 |
Loans sold and loan payments received | (6,845) | (24,251) |
Mortgage loans originated and purchased, net of fees | 6,593 | 19,370 |
Repurchase of loans out of Ginnie Mae securitizations(1) | 547 | 2,686 |
Net change in unrealized gain (loss) on retained loans held for sale | 5 | (115) |
Net transfers of mortgage loans held for sale(2) | (6) | 1 |
Balance - end of period | $ 1,187 | $ 2,072 |
Mortgage Loans Held for Sale _3
Mortgage Loans Held for Sale - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Mortgage Loans Held for Sale and Investment [Abstract] | |||
Gain (Loss) on Sale of Mortgage Loans | $ (3) | $ (195) | |
Sale of mortgage loans held for sale | 6,722 | $ 23,863 | |
Mortgage loans held for sale in foreclosure | $ 48 | $ 65 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 120 | $ 120 |
Intangible assets | 28 | $ 8 |
Intangible assets acquired | $ 23 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Derivative Instruments (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Treasury futures | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value | $ (18) | |
Assets | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | $ 3,025 | 4,256 |
Fair Value | 41 | 77 |
Gains/(Losses) | 51 | 360 |
Assets | Loan sale commitments | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 556 | 246 |
Fair Value | 8 | 8 |
Gains/(Losses) | (1) | (17) |
Assets | IRLCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 1,041 | 2,103 |
Fair Value | 30 | 62 |
Gains/(Losses) | 8 | (72) |
Assets | LPCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 200 | 325 |
Fair Value | 1 | 3 |
Gains/(Losses) | 0 | 0 |
Assets | Forward MBS trades | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 1,712 | 1,798 |
Fair Value | 10 | 12 |
Gains/(Losses) | 43 | 429 |
Assets | Treasury futures | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 72 | 30 |
Fair Value | 0 | 0 |
Gains/(Losses) | 0 | 3 |
Liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 3,937 | 2,860 |
Fair Value | (24) | (33) |
Gains/(Losses) | (94) | (216) |
Liabilities | IRLCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 18 | 56 |
Fair Value | 0 | (1) |
Gains/(Losses) | 0 | (1) |
Liabilities | LPCs | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 234 | 186 |
Fair Value | (1) | (1) |
Gains/(Losses) | 0 | 1 |
Liabilities | Forward MBS trades | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 1,175 | 1,716 |
Fair Value | (3) | (13) |
Gains/(Losses) | (50) | (31) |
Liabilities | Treasury futures | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding Notional | 2,510 | 902 |
Fair Value | (20) | |
Gains/(Losses) | $ (44) | $ (185) |
Derivative Financial Instrume_4
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Other assets | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Margin Deposit Assets | $ 93 | $ 49 |
Payables and other liabilities | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Margin Deposit Liability | $ 9 | $ 1 |
Indebtedness - Advance and Ware
Indebtedness - Advance and Warehouse Facilities Summary (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Advance, warehouse and MSR facilities, net | $ 3,512,000,000 | $ 2,885,000,000 |
Advance Facilities | Servicing | Loans payable | $350 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 350,000,000 | |
Outstanding | 134,000,000 | 150,000,000 |
Collateral Pledged | 169,000,000 | 189,000,000 |
Advance Facilities | Servicing | Loans payable | $300 advance facility(1) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 300,000,000 | |
Outstanding | 259,000,000 | 308,000,000 |
Collateral Pledged | 354,000,000 | 410,000,000 |
Advance Facilities | Servicing | Loans payable | $250 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 250,000,000 | |
Outstanding | 183,000,000 | 171,000,000 |
Collateral Pledged | 210,000,000 | 209,000,000 |
Advance Facilities | Servicing | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Outstanding | 610,000,000 | 669,000,000 |
Collateral Pledged | 798,000,000 | 853,000,000 |
Advance Facilities | Servicing | Notes payable to banks | $75 advance facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 75,000,000 | |
Outstanding | 34,000,000 | 40,000,000 |
Collateral Pledged | 65,000,000 | 45,000,000 |
Warehouse Facilities | Originations | ||
Debt Instrument [Line Items] | ||
Outstanding | 1,107,000,000 | 817,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Collateral Pledged | 1,197,000,000 | 910,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $1500 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,500,000,000 | |
Outstanding | 251,000,000 | 206,000,000 |
Collateral Pledged | 252,000,000 | 272,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $750 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 750,000,000 | |
Outstanding | 186,000,000 | 135,000,000 |
Collateral Pledged | 239,000,000 | 133,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $750 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 750,000,000 | |
Outstanding | 155,000,000 | 202,000,000 |
Collateral Pledged | 161,000,000 | 209,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $250 Warehouse Facility(2) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 250,000,000 | |
Outstanding | 47,000,000 | 14,000,000 |
Collateral Pledged | 52,000,000 | 17,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $500 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 500,000,000 | |
Outstanding | 78,000,000 | 76,000,000 |
Collateral Pledged | 84,000,000 | 80,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $500 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 500,000,000 | |
Outstanding | 101,000,000 | 31,000,000 |
Collateral Pledged | 103,000,000 | 32,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $300 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 300,000,000 | |
Outstanding | 183,000,000 | 115,000,000 |
Collateral Pledged | 188,000,000 | 117,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $200 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 200,000,000 | |
Outstanding | 59,000,000 | 18,000,000 |
Collateral Pledged | 61,000,000 | 21,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $100 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 100,000,000 | |
Outstanding | 29,000,000 | 19,000,000 |
Collateral Pledged | 39,000,000 | 28,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $100 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 100,000,000 | |
Outstanding | 0 | 0 |
Collateral Pledged | 0 | 0 |
Warehouse Facilities | Originations | Notes payable to banks | $75 Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 75,000,000 | |
Outstanding | 18,000,000 | 1,000,000 |
Collateral Pledged | 18,000,000 | 1,000,000 |
Warehouse Facilities | Originations | Notes payable to banks | $1,000 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,000,000,000 | |
MSR Facilities | Servicing | Notes payable to banks | ||
Debt Instrument [Line Items] | ||
Outstanding | 1,809,000,000 | 1,410,000,000 |
Collateral Pledged | 6,147,000,000 | 5,499,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $1,450 warehouse facility(1) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,450,000,000 | |
Outstanding | 250,000,000 | 260,000,000 |
Collateral Pledged | 2,185,000,000 | 2,284,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $1,000 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,000,000,000 | |
Outstanding | 550,000,000 | 380,000,000 |
Collateral Pledged | 1,235,000,000 | 927,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $750 warehouse facility(2) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 750,000,000 | |
Outstanding | 320,000,000 | 380,000,000 |
Collateral Pledged | 1,141,000,000 | 1,482,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 500,000,000 | |
Outstanding | 265,000,000 | 365,000,000 |
Collateral Pledged | 713,000,000 | 732,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 500,000,000 | |
Outstanding | 199,000,000 | 0 |
Collateral Pledged | 383,000,000 | 0 |
MSR Facilities | Servicing | Notes payable to banks | $500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 500,000,000 | |
Outstanding | 200,000,000 | 0 |
Collateral Pledged | 424,000,000 | 0 |
MSR Facilities | Servicing | Notes payable to banks | $50 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 50,000,000 | |
Outstanding | 25,000,000 | 25,000,000 |
Collateral Pledged | 66,000,000 | 74,000,000 |
MSR Facilities | Servicing | Notes payable to banks | $1750 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,750,000,000 | |
Advance Financing, Internally Allocated | Servicing | Loans payable | $300 advance facility(1) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 300,000,000 | |
MSR Financing, Internally Allocated | Servicing | Notes payable to banks | $1,450 warehouse facility(1) | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 1,450,000,000 | |
MSR Financing, Internally Allocated | Servicing | Notes payable to banks | $500 warehouse facility | ||
Debt Instrument [Line Items] | ||
Capacity Amount | 750,000,000 | |
Advance, Warehouse and MSR Facilities | ||
Debt Instrument [Line Items] | ||
Outstanding | 3,526,000,000 | 2,896,000,000 |
Collateral Pledged | 8,142,000,000 | 7,262,000,000 |
Unamortized debt issuance costs | (14,000,000) | (11,000,000) |
Advance, warehouse and MSR facilities, net | $ 3,512,000,000 | $ 2,885,000,000 |
Indebtedness - Summary of Unsec
Indebtedness - Summary of Unsecured Senior Notes (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Unsecured senior notes, net | $ 2,676,000,000 | $ 2,673,000,000 |
Unsecured Senior Notes | ||
Debt Instrument [Line Items] | ||
Unsecured senior notes principal amount | 2,700,000,000 | 2,700,000,000 |
Unamortized debt issuance costs | (24,000,000) | (27,000,000) |
Unsecured senior notes, net | 2,676,000,000 | 2,673,000,000 |
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% | |
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 | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Interest Expense | $ 122 | $ 111 | $ 232 | $ 217 |
Advance Facilities | ||||
Debt Instrument [Line Items] | ||||
Short-Term Debt, Weighted Average Interest Rate, over Time | 7.40% | 2.80% | ||
Advance Facilities | Servicing | ||||
Debt Instrument [Line Items] | ||||
Short-Term Debt, Weighted Average Interest Rate, over Time | 7.50% | 3.10% | ||
Warehouse & MSR Facilities | ||||
Debt Instrument [Line Items] | ||||
Short-Term Debt, Weighted Average Interest Rate, over Time | 7.40% | 3.10% | 7.20% | 2.60% |
Debt | ||||
Debt Instrument [Line Items] | ||||
Interest Expense | $ 112 | $ 90 | $ 211 | $ 176 |
Unsecured Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Maximum percentage redeemable on unsecured debt | 40% | |||
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 | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
2023 through 2026 | $ 0 | |
2027 | 600 | |
Thereafter | 2,100 | |
Total unsecured senior notes principal amount | $ 2,700 | $ 2,700 |
Securitizations and Financing_2
Securitizations and Financings - Assets and Liabilities of Consolidated VIEs (Details) - Residential mortgage - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets - transfers accounted for as secured borrowings | $ 465 | $ 476 |
Liabilities - transfers accounted for as secured borrowings | 318 | 322 |
Restricted cash | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Assets - transfers accounted for as secured borrowings | 86 | 78 |
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 | 379 | 398 |
Advance facilities, net(1) | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities - transfers accounted for as secured borrowings | 317 | 321 |
Payables and other liabilities | ||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items] | ||
Liabilities - transfers accounted for as secured borrowings | $ 1 | $ 1 |
Securitizations and Financing_3
Securitizations and Financings - Securitization Trusts (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Variable Interest Entities and Securitizations [Abstract] | ||
Total collateral balances - UPB | $ 925 | $ 976 |
Total certificate balances | 901 | 949 |
Financial Asset, Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Unconsolidated securitization trusts | $ 99 | $ 119 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Preferred Shares [Abstract] | ||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Preferred stock, liquidation preference | $ 0 | $ 0 |
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 | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 142 | $ 151 | $ 179 | $ 809 |
Earnings Per Share, Basic [Abstract] | ||||
Basic | $ 2.10 | $ 2.08 | $ 2.62 | $ 11.04 |
Diluted | $ 2.07 | $ 2.03 | $ 2.57 | $ 10.74 |
Weighted average shares of common stock outstanding (in thousands): | ||||
Basic | 67,649 | 72,709 | 68,325 | 73,278 |
Dilutive effect of stock awards | 957 | 1,618 | 1,316 | 2,052 |
Diluted | 68,606 | 74,327 | 69,641 | 75,330 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 28.40% | 26% | 23.30% | 24.40% |
Fair Value Measurements - Measu
Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Assets | |||
Mortgage loans held for sale | $ 1,187 | $ 893 | |
Liabilities | |||
Mortgage servicing rights financing | 23 | 19 | |
Treasury futures | |||
Assets | |||
Fair Value | $ 18 | ||
Recurring Fair Value Measurements | |||
Assets | |||
Mortgage loans held for sale | 1,187 | 893 | |
Mortgage servicing rights | 7,149 | 6,654 | |
Equity investments | 43 | 47 | |
Liabilities | |||
Mortgage servicing rights financing | 23 | 19 | |
Excess spread financing | 459 | 509 | |
Recurring Fair Value Measurements | IRLCs | |||
Assets | |||
Fair Value | 30 | 22 | |
Recurring Fair Value Measurements | LPCs | |||
Assets | |||
Fair Value | 1 | 1 | |
Fair Value | 1 | 1 | |
Recurring Fair Value Measurements | Forward MBS trades | |||
Assets | |||
Fair Value | 10 | 8 | |
Fair Value | 3 | 9 | |
Recurring Fair Value Measurements | Treasury futures | |||
Assets | |||
Fair Value | 20 | 14 | |
Recurring Fair Value Measurements | Level 1 | |||
Assets | |||
Mortgage loans held for sale | 0 | 0 | |
Mortgage servicing rights | 0 | 0 | |
Equity investments | 1 | 2 | |
Liabilities | |||
Mortgage servicing rights financing | 0 | 0 | |
Excess spread financing | 0 | 0 | |
Recurring Fair Value Measurements | Level 1 | IRLCs | |||
Assets | |||
Fair Value | 0 | 0 | |
Recurring Fair Value Measurements | Level 1 | LPCs | |||
Assets | |||
Fair Value | 0 | 0 | |
Fair Value | 0 | 0 | |
Recurring Fair Value Measurements | Level 1 | Forward MBS trades | |||
Assets | |||
Fair Value | 0 | 0 | |
Fair Value | 0 | 0 | |
Recurring Fair Value Measurements | Level 1 | Treasury futures | |||
Assets | |||
Fair Value | 0 | 0 | |
Recurring Fair Value Measurements | Level 2 | |||
Assets | |||
Mortgage loans held for sale | 1,120 | 819 | |
Mortgage servicing rights | 0 | 0 | |
Equity investments | 0 | 0 | |
Liabilities | |||
Mortgage servicing rights financing | 0 | 0 | |
Excess spread financing | 0 | 0 | |
Recurring Fair Value Measurements | Level 2 | IRLCs | |||
Assets | |||
Fair Value | 0 | 0 | |
Recurring Fair Value Measurements | Level 2 | LPCs | |||
Assets | |||
Fair Value | 0 | 0 | |
Fair Value | 0 | 0 | |
Recurring Fair Value Measurements | Level 2 | Forward MBS trades | |||
Assets | |||
Fair Value | 10 | 8 | |
Fair Value | 3 | 9 | |
Recurring Fair Value Measurements | Level 2 | Treasury futures | |||
Assets | |||
Fair Value | 20 | 14 | |
Recurring Fair Value Measurements | Level 3 | |||
Assets | |||
Mortgage loans held for sale | 67 | 74 | |
Mortgage servicing rights | 7,149 | 6,654 | |
Equity investments | 42 | 45 | |
Liabilities | |||
Mortgage servicing rights financing | 23 | 19 | |
Excess spread financing | 459 | 509 | |
Recurring Fair Value Measurements | Level 3 | IRLCs | |||
Assets | |||
Fair Value | 30 | 22 | |
Recurring Fair Value Measurements | Level 3 | LPCs | |||
Assets | |||
Fair Value | 1 | 1 | |
Fair Value | 1 | 1 | |
Recurring Fair Value Measurements | Level 3 | Forward MBS trades | |||
Assets | |||
Fair Value | 0 | 0 | |
Fair Value | 0 | 0 | |
Recurring Fair Value Measurements | Level 3 | Treasury futures | |||
Assets | |||
Fair Value | $ 0 | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Reconciliation (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Excess spread financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | $ 509 | $ 768 |
Changes in fair value included in earnings | (10) | 117 |
Purchases/additions (1) | 0 | 0 |
Issuances | 0 | 0 |
Sales/dispositions (2) | 0 | 0 |
Repayments | 4 | (292) |
Settlements | (36) | (61) |
Other changes | 0 | 0 |
Balance - end of period | 459 | 532 |
Mortgage servicing rights financing | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 19 | 10 |
Changes in fair value included in earnings | 4 | 14 |
Purchases/additions (1) | 0 | 0 |
Issuances | 0 | 0 |
Sales/dispositions (2) | 0 | 0 |
Repayments | 0 | 0 |
Settlements | 0 | 0 |
Other changes | 0 | 0 |
Balance - end of period | 23 | 24 |
Mortgage servicing rights | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 6,654 | 4,223 |
Changes in fair value included in earnings | (239) | 663 |
Purchases/additions (1) | 870 | 1,178 |
Issuances | 133 | 360 |
Sales/dispositions (2) | (280) | (289) |
Repayments | 0 | 0 |
Settlements | 0 | 0 |
Other changes | 11 | 16 |
Balance - end of period | 7,149 | 6,151 |
Mortgage loans held for sale | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 74 | |
Changes in fair value included in earnings | 2 | |
Purchases/additions (1) | 47 | |
Issuances | 0 | |
Sales/dispositions (2) | (54) | |
Repayments | 2 | |
Settlements | 0 | |
Other changes | 0 | |
Balance - end of period | 67 | |
Equity investments | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 45 | 54 |
Changes in fair value included in earnings | (3) | 0 |
Purchases/additions (1) | 0 | 0 |
Issuances | 0 | 0 |
Sales/dispositions (2) | 0 | 0 |
Repayments | 0 | 0 |
Settlements | 0 | 0 |
Other changes | 0 | 0 |
Balance - end of period | 42 | 54 |
IRLCs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance - beginning of period | 22 | 134 |
Changes in fair value included in earnings | 8 | (72) |
Purchases/additions (1) | 0 | 0 |
Issuances | 0 | 0 |
Sales/dispositions (2) | 0 | 0 |
Repayments | 0 | 0 |
Settlements | 0 | 0 |
Other changes | 0 | 0 |
Balance - end of period | $ 30 | $ 62 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable Inputs (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
MSRs(1) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Average life(4) | 7 years 10 months 24 days | 8 years 1 month 6 days |
Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Average life(4) | 6 years 4 months 24 days | 6 years 7 months 6 days |
Min | MSRs(1) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Option adjusted spread(2) | 6.80% | |
Discount rate | 10.40% | |
Prepayment speed | 6.50% | 6.30% |
Cost to service per loan(3) | $ 56 | $ 54 |
Min | Mortgage loans held for sale | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Market pricing | $ 0.450 | $ 0.373 |
Min | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (reflected as a percentage of loan commitment) | 0 | (0.006) |
Min | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Option adjusted spread(2) | 6.80% | |
Discount rate | 10% | |
Prepayment speed | 7.30% | 6.90% |
Min | Mortgage servicing rights financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 5.60% | 5.20% |
Annual advance recovery rates | 14% | 15.90% |
Max | MSRs(1) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Option adjusted spread(2) | 12% | |
Discount rate | 13.70% | |
Prepayment speed | 12.70% | 12.20% |
Cost to service per loan(3) | $ 157 | $ 155 |
Max | Mortgage loans held for sale | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Market pricing | $ 1.021 | $ 1.147 |
Max | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (reflected as a percentage of loan commitment) | 0.040 | 0.039 |
Max | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Option adjusted spread(2) | 12% | |
Discount rate | 13.80% | |
Prepayment speed | 13.70% | 13.30% |
Max | Mortgage servicing rights financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 8.80% | 8.60% |
Annual advance recovery rates | 17.20% | 20.60% |
Weighted Average | MSRs(1) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Option adjusted spread(2) | 8% | |
Discount rate | 11.40% | |
Prepayment speed | 7.60% | 7.20% |
Cost to service per loan(3) | $ 83 | $ 80 |
Weighted Average | Mortgage loans held for sale | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Market pricing | $ 0.775 | $ 0.774 |
Weighted Average | IRLCs | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Value of servicing (reflected as a percentage of loan commitment) | 0.020 | 0.023 |
Weighted Average | Excess spread financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Option adjusted spread(2) | 8.50% | |
Discount rate | 11.30% | |
Prepayment speed | 9.70% | 9.20% |
Weighted Average | Mortgage servicing rights financing | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Advance financing and counterparty fee rates | 7% | 7.10% |
Annual advance recovery rates | 15% | 17.30% |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Balance Sheet Line Item (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Financial assets | |||
Restricted cash | $ 170 | $ 175 | $ 115 |
Loans subject to repurchase from Ginnie Mae | 1,650 | 1,865 | |
Financial liabilities | |||
Unsecured senior notes, net | 2,676 | 2,673 | |
Advance, warehouse and MSR facilities, net | 3,512 | 2,885 | |
Nonrecurring Fair Value Measurements | |||
Financial assets | |||
Cash and cash equivalents | 517 | 527 | |
Restricted cash | 170 | 175 | |
Advances and other receivables, net | 802 | 1,019 | |
Loans subject to repurchase from Ginnie Mae | 1,650 | 1,865 | |
Financial liabilities | |||
Unsecured senior notes, net | 2,676 | 2,673 | |
Advance, warehouse and MSR facilities, net | 3,512 | 2,885 | |
Liability for loans subject to repurchase from Ginnie Mae | 1,650 | 1,865 | |
Nonrecurring Fair Value Measurements | Level 1 | |||
Financial assets | |||
Cash and cash equivalents | 517 | 527 | |
Restricted cash | 170 | 175 | |
Advances and other receivables, net | 0 | 0 | |
Loans subject to repurchase from Ginnie Mae | 0 | 0 | |
Financial liabilities | |||
Unsecured senior notes, net | 0 | 0 | |
Advance, warehouse and MSR 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 | 1,650 | 1,865 | |
Financial liabilities | |||
Unsecured senior notes, net | 2,322 | 2,209 | |
Advance, warehouse and MSR facilities, net | 3,526 | 2,896 | |
Liability for loans subject to repurchase from Ginnie Mae | 1,650 | 1,865 | |
Nonrecurring Fair Value Measurements | Level 3 | |||
Financial assets | |||
Cash and cash equivalents | 0 | 0 | |
Restricted cash | 0 | 0 | |
Advances and other receivables, net | 802 | 1,019 | |
Loans subject to repurchase from Ginnie Mae | 0 | 0 | |
Financial liabilities | |||
Unsecured senior notes, net | 0 | 0 | |
Advance, warehouse and MSR 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 | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Loss Contingencies [Line Items] | ||||
Legal Fees (Recoveries), net | $ 12 | $ 10 | $ 21 | $ 8 |
Litigation and regulatory matters | Min | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | 2 | 2 | ||
Litigation and regulatory matters | Max | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | $ 4 | $ 4 |
Segment Information - Financial
Segment Information - Financial Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Revenues: | |||||
Service related, net | $ 402 | $ 460 | $ 663 | $ 1,215 | |
Net gain on mortgage loans held for sale | 84 | 139 | 153 | 436 | |
Total revenues | 486 | 599 | 816 | 1,651 | |
Total expenses | 278 | 328 | 539 | 666 | |
Other income (expenses) | |||||
Interest income | 117 | 50 | 202 | 86 | |
Interest expense | (122) | (111) | (232) | (217) | |
Other expense, net | (5) | (5) | (14) | 217 | |
Total other income (expenses), net | (10) | (66) | (44) | 86 | |
Income before income tax expense | 198 | 205 | 233 | 1,071 | |
Depreciation and amortization for property and equipment and intangible assets | 9 | 9 | 18 | 20 | |
Total assets | 13,144 | 12,895 | 13,144 | 12,895 | $ 12,776 |
Operating Segments | Servicing | |||||
Revenues: | |||||
Service related, net | 365 | 414 | 596 | 1,115 | |
Net gain on mortgage loans held for sale | 3 | (19) | 3 | (4) | |
Total revenues | 368 | 395 | 599 | 1,111 | |
Total expenses | 159 | 143 | 312 | 265 | |
Other income (expenses) | |||||
Interest income | 107 | 35 | 186 | 54 | |
Interest expense | (73) | (61) | (136) | (115) | |
Other expense, net | 0 | 0 | 0 | 0 | |
Total other income (expenses), net | 34 | (26) | 50 | (61) | |
Income before income tax expense | 243 | 226 | 337 | 785 | |
Depreciation and amortization for property and equipment and intangible assets | 3 | 5 | 5 | 10 | |
Total assets | 10,231 | 9,645 | 10,231 | 9,645 | |
Operating Segments | Originations | |||||
Revenues: | |||||
Service related, net | 16 | 24 | 27 | 66 | |
Net gain on mortgage loans held for sale | 81 | 158 | 150 | 440 | |
Total revenues | 97 | 182 | 177 | 506 | |
Total expenses | 59 | 125 | 115 | 299 | |
Other income (expenses) | |||||
Interest income | 10 | 15 | 16 | 32 | |
Interest expense | (10) | (10) | (17) | (22) | |
Other expense, net | 0 | 0 | 0 | 0 | |
Total other income (expenses), net | 0 | 5 | (1) | 10 | |
Income before income tax expense | 38 | 62 | 61 | 217 | |
Depreciation and amortization for property and equipment and intangible assets | 2 | 5 | 4 | 9 | |
Total assets | 1,086 | 1,381 | 1,086 | 1,381 | |
Corporate/Other | |||||
Revenues: | |||||
Service related, net | 21 | 22 | 40 | 34 | |
Net gain on mortgage loans held for sale | 0 | 0 | 0 | 0 | |
Total revenues | 21 | 22 | 40 | 34 | |
Total expenses | 60 | 60 | 112 | 102 | |
Other income (expenses) | |||||
Interest income | 0 | 0 | 0 | 0 | |
Interest expense | (39) | (40) | (79) | (80) | |
Other expense, net | (5) | (5) | (14) | 217 | |
Total other income (expenses), net | (44) | (45) | (93) | 137 | |
Income before income tax expense | (83) | (83) | (165) | 69 | |
Depreciation and amortization for property and equipment and intangible assets | 4 | (1) | 9 | 1 | |
Total assets | $ 1,827 | $ 1,869 | $ 1,827 | $ 1,869 |