Loans Held for Sale and Loans Sold

6 Months Ended

Jun. 30, 2022

Transfers and Servicing [Abstract]

Loans Held for Sale and Loans Sold

Loans Held for Sale and Loans Sold

Structured Loan Sales - On March 31, 2022, the Company participated in a securitization whereby the Company and funds managed by Ellington Management Group both contributed collateral and were co-sponsors of the transaction, which totaled $400.0 million in issued asset-backed notes. As part of the securitization, the Company sold loans to OPTN Funding Grantor Trust 2022-1 ("Grantor Trust") through the issuance of amortizing asset-backed notes secured by a pool of its unsecured and secured personal installment loans. The Company also sold its share of the residual interest in the pool (collectively referred to as the "2022-1 transaction"). The Company's continued involvement in the unconsolidated VIEs is in the form of servicer of these loans. The Company does not have variable interest in the Grantor Trust or the issuer established for this transaction. The sold loans were accounted for under the fair value option and had an aggregate unpaid principal balance of approximately $227.6 million, a cumulative fair value mark of $15.9 million and unpaid interest of $1.5 million. The Company received $245.0 million of net proceeds and by selling both its notes and residual interest, the Company derecognized these loans from its Consolidated Balance Sheets.

Other Loan Sales - In April 2022, the Company entered into an agreement with an institutional investor to sell a population of loans ("Q2 2022 Loan Sale"). The sold loans were accounted for under the fair value option and had an aggregate unpaid principal balance of approximately $14.7 million, a cumulative fair value mark of $(14.1) million and unpaid interest and fees of $1.6 million. The Company received $2.2 million of net proceeds. The Q2 2022 Loan Sale qualified for sale accounting treatment and the Company derecognized these loans from its Consolidated Balance Sheets.

Whole Loan Sale Program ‑ In November 2014, the Company entered into a whole loan sale agreement with an institutional investor. Pursuant to the agreement, the Company sold at least 10% of its unsecured loan originations, with an option to sell an additional 5%, subject to certain eligibility criteria and minimum and maximum volumes. The Company chose not to renew the arrangement and allowed the agreement to expire on its terms on March 4, 2022.The originations of loans sold and held for sale during the three months ended June 30, 2022 was insignificant. Servicing revenue during the same time period was $6.3 million. The gain on sale recorded during the three months ended June 30, 2022 was insignificant as a result of our whole loan sale agreement expiring on March 4, 2022. The originations of loans sold and held for sale during the three months ended June 30, 2021 was $41.6 million and the Company recorded a gain on sale of $5.3 million and servicing revenue of $3.0 million.The originations of loans sold and held for sale during the six months ended June 30, 2022 related to our loan sale program was $49.0 million and the Company recorded a gain on sale of $5.7 million and servicing revenue of $10.3 million. The originations of loans sold and held for sale during the six months ended June 30, 2021 was $75.0 million and the Company recorded a gain on sale of $9.8 million and servicing revenue of $6.0 million.