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Mortgage Loans Held-for-Sale
12 Months Ended
Dec. 31, 2021
Mortgage Loans Held-for-Sale  
Mortgage Loans Held-for-Sale

Note 2.—Mortgage Loans held-for-sale

A summary of the UPB of mortgage LHFS by type is presented below:

December 31, 

December 31, 

2021

2020

 

Government (1)

    

$

6,886

    

$

7,924

Conventional (2)

 

62,759

 

141,139

Jumbo & Non-qualified mortgages (NonQM)

231,142

11,064

Fair value adjustment (3)

 

7,690

 

4,295

Total mortgage loans held-for-sale

$

308,477

$

164,422

(1)Includes all government-insured loans including Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA).
(2)Includes loans eligible for sale to Fannie Mae and Federal home Loan Mortgage Corporation (Freddie Mac or FHLMC).
(3)Changes in fair value are included in gain on sale of loans, net on the accompanying consolidated statements of operations and comprehensive loss.

As of December 31, 2021, the Company had no mortgage LHFS that were 90 days or more delinquent.  As of December 31, 2020, there were $1.2 million in UPB of mortgage LHFS that were in nonaccrual status as the loans were 90 days or more delinquent. The carrying value of these nonaccrual loans as of December 31, 2020 was $1.1 million.  

Gain on sale of loans, net in the consolidated statements of operations and comprehensive loss is comprised of the following for the years ended December 31, 2021 and 2020:

For the Year Ended

December 31, 

2021

2020

Gain on sale of mortgage loans

    

$

81,362

    

$

59,330

Premium from servicing retained loan sales

 

536

 

2,094

Unrealized loss from derivative financial instruments

 

(4,076)

 

(7)

Gain (loss) from derivative financial instruments

 

1,934

 

(11,040)

Mark to market gain (loss) on LHFS

 

3,395

 

(15,955)

Direct origination expenses, net

 

(17,746)

 

(15,191)

Change in provision for repurchases

 

(111)

 

(5,227)

Gain on sale of loans, net

$

65,294

$

14,004

On July 7, 2020, the Company received notification from Freddie Mac that the Company’s eligibility to sell whole loans to Freddie Mac was suspended, without cause.  As noted in Freddie Mac’s Seller/Servicer Guide, Freddie Mac may elect, in its sole discretion, to suspend a Seller from eligibility, without cause, thereby restricting the Seller from obtaining new purchase commitments during the suspension period.