Financial Instruments (Tables)
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9 Months Ended |
Sep. 30, 2022 |
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| Fair Value Disclosures [Abstract] |
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| Schedule of Notional Amounts of Outstanding Derivative Positions |
We review our commitment-to-closing ratio ("pull-through rate") as part of an estimate of the number of mortgage loans that will fund according to the IRLCs. | | | | | | | | | | | | | | | | Notional Amounts | | September 30, 2022 | | December 31, 2021 | | Forward sales commitments | | $ | 476,903 | | | $ | 70,550 | | | IRLCs | | 390,091 | | | 67,485 | |
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| Derivative Instruments, Gain (Loss) |
The locations and amounts of gains (losses) recognized in income related to our derivatives are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | Instrument | | Classification | | 2022 | | 2021 | | 2022 | | 2021 | | Forward sales commitments | | Service revenue | | $ | 11,602 | | | $ | 859 | | | $ | 1,757 | | | $ | 938 | | | IRLCs | | Service revenue | | (8,462) | | | (888) | | | (4,433) | | | (687) | |
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| Schedule of Assets, Liabilities, and Equity Measured at Fair Value on a Recurring Basis |
A summary of assets and liabilities related to our financial instruments, measured at fair value on a recurring basis and as reflected in our consolidated balance sheets, is set forth below:
| | | | | | | | | | | | | | | | | | | | | | | | | Balance at September 30, 2022 | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Assets | | | | | | | | | Cash equivalents | | | | | | | | | Money market funds | $ | 294,396 | | | $ | 294,396 | | | $ | — | | | $ | — | | | | | | | | | | | | | | | | | | | Total cash equivalents | 294,396 | | | 294,396 | | | — | | | — | | | Short-term investments | | | | | | | | | U.S. treasury securities | 87,313 | | | 87,313 | | | — | | | — | | | Agency bonds | 23,003 | | | 23,003 | | | — | | | — | | | Total short-term investments | 110,316 | | | 110,316 | | | — | | | — | | | Loans held for sale | 256,339 | | | — | | | 256,339 | | | — | | | Other current assets | | | | | | | | | Forward sales commitments | 13,153 | | | — | | | 13,153 | | | — | | | IRLCs | 5,764 | | | — | | | — | | | 5,764 | | | Total other current assets | 18,917 | | | — | | | 13,153 | | | 5,764 | | | Mortgage servicing rights, at fair value | 36,914 | | | — | | | — | | | 36,914 | | | Long-term investments | | | | | | | | | U.S. treasury securities | 41,677 | | | 41,677 | | | — | | | — | | | | | | | | | | | Total assets | $ | 758,559 | | | $ | 446,389 | | | $ | 269,492 | | | $ | 42,678 | | | Liabilities | | | | | | | | | Accrued and other liabilities | | | | | | | | | Forward sales commitments | $ | 263 | | | $ | — | | | $ | 263 | | | $ | — | | | IRLCs | 4,716 | | | — | | | — | | | 4,716 | | | Total liabilities | $ | 4,979 | | | $ | — | | | $ | 263 | | | $ | 4,716 | |
| | | | | | | | | | | | | | | | | | | | | | | | | Balance at December 31, 2021 | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Assets | | | | | | | | | Cash equivalents | | | | | | | | | Money market funds | $ | 509,971 | | | $ | 509,971 | | | $ | — | | | $ | — | | | | | | | | | | | Total cash equivalents | 509,971 | | | 509,971 | | | — | | | — | | | Short-term investments | | | | | | | | | U.S. treasury securities | 16,718 | | | 16,718 | | | — | | | — | | | Agency bonds | 11,906 | | | 11,906 | | | — | | | — | | | Equity securities | 5,113 | | | 5,113 | | | — | | | — | | | Loans held for sale | 35,759 | | | — | | | 35,759 | | | — | | | Other current assets | | | | | | | | | Forward sales commitments | 138 | | | — | | | 138 | | | — | | | IRLCs | 1,191 | | | — | | | — | | | 1,191 | | | Total other current assets | 1,329 | | | — | | | 138 | | | 1,191 | | | Long-term investments | | | | | | | | | U.S. treasury securities | 54,828 | | | 54,828 | | | — | | | — | | | Total assets | $ | 635,624 | | | $ | 598,536 | | | $ | 35,897 | | | $ | 1,191 | | | Liabilities | | | | | | | | | Accrued liabilities | | | | | | | | | Forward sales commitments | $ | 93 | | | $ | — | | | $ | 93 | | | $ | — | | | IRLCs | 60 | | | — | | | — | | | 60 | | | Total liabilities | $ | 153 | | | $ | — | | | $ | 93 | | | $ | 60 | |
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| Summary of Fair Value Measurement Inputs and Valuation Techniques |
The significant unobservable inputs used to determine the fair value of IRLCs and MSRs that could result in a significant change in fair value measurement were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2022 | | December 31, 2021 | | Key Inputs | | Valuation Technique | | Range | | Weighted-Average | | Range | | Weighted-Average | | IRLCs | | | | | | | | | | | Pull-through rate | | Market pricing | | 58.0% - 100.0% | | 91.7% | | 71.1% | | 71.1% | | MSRs | | | | | | | | | | | | Prepayment speed | | Discounted cash flow | | 6.0% - 14.2% | | 6.5% | | N/A | | N/A | | Default rates | | Discounted cash flow | | 0.0% - 0.5% | | 0.1% | | N/A | | N/A | | Discount rate | | Discounted cash flow | | 9.5% - 12.4% | | 9.6% | | N/A | | N/A |
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| Summary of Changes Fair Value Of Interest Rate Derivatives |
The following is a summary of changes in the fair value of IRLCs for the three and nine months ended September 30, 2022 and 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2022 | | 2021 | | 2022 | | 2021 | | Balance, net—beginning of period | $ | 9,510 | | | $ | 1,972 | | | $ | 1,155 | | | $ | 1,771 | | | IRLCs acquired in business combination | — | | | — | | | 4,326 | | | — | | | Issuances of IRLCs | 20,440 | | | 3,849 | | | 40,740 | | | 14,523 | | | Settlements of IRLCs | (23,494) | | | (4,248) | | | (40,762) | | | (14,956) | | | Fair value changes recognized in earnings | (5,408) | | | (489) | | | (4,411) | | | (254) | | | Balance, net—end of period | $ | 1,048 | | | $ | 1,084 | | | $ | 1,048 | | | $ | 1,084 | |
The following is a summary of changes in the fair value of MSRs for the three and nine months ended September 30, 2022 and 2021:
| | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2022 | | 2021 | | 2022 | | 2021 | | Balance—beginning of period | $ | 35,050 | | | $ | — | | | $ | — | | | $ | — | | | MSRs acquired in business combination | — | | | — | | | 33,982 | | | — | | | MSRs originated | 1,811 | | | — | | | 2,774 | | | — | | | MSRs sales | (541) | | | — | | | (1,314) | | | — | | | Fair value changes recognized in earnings | 594 | | | — | | | 1,472 | | | — | | | Balance, net—end of period | $ | 36,914 | | | $ | — | | | $ | 36,914 | | | $ | — | |
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| Schedule of Long-term Debt |
The following table presents the carrying amounts and estimated fair values of our convertible senior notes that are not recorded at fair value on our consolidated balance sheets:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2022 | | December 31, 2021 | | Issuance | | Net Carrying Amount | | Estimated Fair Value | | Net Carrying Amount | | Estimated Fair Value | | 2023 notes | | $ | 23,393 | | | $ | 21,634 | | | $ | 23,280 | | | $ | 34,487 | | | 2025 notes | | 652,854 | | | 385,985 | | | 650,783 | | | 593,366 | | | 2027 notes | | 564,914 | | | 285,511 | | | 563,234 | | | 467,814 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2022 | | Lender | | Borrowing Capacity | | Outstanding Borrowings | | Weighted-Average Interest Rate on Outstanding Borrowings | | Maturity Date | | City National Bank | | $ | 100,000 | | | $ | 36,010 | | | 4.43 | % | | 11/24/2022 | | Comerica Bank | | 75,000 | | | 29,599 | | | 5.14 | | | Upon lender demand | | Origin Bank | | 75,000 | | | 33,572 | | | 4.82 | | | 9/29/2023 | | M&T Bank | | 50,000 | | | 21,068 | | | 4.91 | | | 10/13/2023 | | Prosperity Bank | | 150,000 | | | 59,578 | | | 4.93 | | | 10/30/2023 | | Republic Bank & Trust Company | | 75,000 | | | 29,171 | | | 4.38 | | | 8/16/2023 | | Wells Fargo Bank, N.A. | | 100,000 | | | 43,531 | | | 5.12 | | | As determined by lender | | Total | | $ | 625,000 | | | $ | 252,529 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | December 31, 2021 | | Lender | | Borrowing Capacity | | Outstanding Borrowings | | Weighted-Average Interest Rate on Outstanding Borrowings | | Western Alliance Bank | | $ | 50,000 | | | $ | 17,089 | | | 3.00 | % | | Texas Capital Bank, N.A. | | 40,000 | | | 11,852 | | | 3.01 | | Flagstar Bank, FSB | | 25,000 | | | 4,102 | | | 3.00 | | | Total | | $ | 115,000 | | | $ | 33,043 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2022 | | December 31, 2021 | | Lender | | Borrowing Capacity | | Outstanding Borrowings | | Weighted-Average Interest Rate on Outstanding Borrowings | | Borrowing Capacity | | Outstanding Borrowings | | Weighted-Average Interest Rate on Outstanding Borrowings | | Goldman Sachs Bank USA | | $ | 400,000 | | | $ | 202,416 | | | 6.10 | % | | $ | 200,000 | | | $ | 199,781 | | | 3.30 | % |
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| Marketable Securities |
The cost or amortized cost, gross unrealized gains and losses, and estimated fair market value of our cash, money market funds, restricted cash, available-for-sale investments, and equity securities were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2022 | | | | Cost or Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Estimated Fair Value | | Cash, Cash Equivalents, and Restricted Cash | | Short-term Investments | | Long-term Investments | | Cash | | | $ | 65,328 | | | $ | — | | | $ | — | | | $ | 65,328 | | | $ | 65,328 | | | $ | — | | | $ | — | | | Money markets funds | | | 294,396 | | | — | | | — | | | 294,396 | | | 294,396 | | | — | | | — | | | Restricted cash | | | 43,992 | | | — | | | — | | | 43,992 | | | 43,992 | | | — | | | — | | | U.S. treasury securities | | | 130,002 | | | 26 | | | (1,038) | | | 128,990 | | | — | | | 87,313 | | | 41,677 | | | Agency bonds | | | 23,000 | | | 3 | | | — | | | 23,003 | | | — | | | 23,003 | | | — | | | | | | | | | | | | | | | | | | | Total | | | $ | 556,718 | | | $ | 29 | | | $ | (1,038) | | | $ | 555,709 | | | $ | 403,716 | | | $ | 110,316 | | | $ | 41,677 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2021 | | | | | Cost or Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Estimated Fair Value | | Cash, Cash Equivalents, and Restricted Cash | | Short-term Investments | | Long-term Investments | | Cash | | | | $ | 81,032 | | | $ | — | | | $ | — | | | $ | 81,032 | | | $ | 81,032 | | | $ | — | | | $ | — | | | Money markets funds | | | | 509,971 | | | — | | | — | | | 509,971 | | | 509,971 | | | — | | | — | | | Restricted cash | | | | 127,278 | | | — | | | — | | | 127,278 | | | 127,278 | | | — | | | — | | | U.S. treasury securities | | | | 71,749 | | | 1 | | | (204) | | | 71,546 | | | — | | | 16,718 | | | 54,828 | | | Agency bonds | | | | 11,900 | | | 6 | | | — | | | 11,906 | | | — | | | 11,906 | | | — | | | Equity securities | | | | 500 | | | 4,613 | | | — | | | 5,113 | | | — | | | 5,113 | | | — | | | Total | | | | $ | 802,430 | | | $ | 4,620 | | | $ | (204) | | | $ | 806,846 | | | $ | 718,281 | | | $ | 33,737 | | | $ | 54,828 | |
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