8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 2)

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 21, 2021

UWM HOLDINGS CORPORATION

(Exact name of registrant as specified in its Charter)

Delaware	001-39189	84-2124167
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

585 South Boulevard E. Pontiac, MI	48341
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (800) 981-8898

(Former name or former address, if changed since last report): Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	UWMC	New York Stock Exchange
Warrants, each warrant exercisable for one share of Class A Common Stock	UWMCWS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Introductory Note

This Amendment No. 2 on Form 8-K/A (“Amendment No. 2”) further amends the Current Report on Form 8-K of UWM Holdings Corporation, a Delaware corporation (the “Company”), filed on January 22, 2021 (the “Original Report”), in which the Company reported, among other events, the completion of the Business Combination (as defined in the Original Report).

This Amendment No. 2 (i) amends the financial statements provided under Item 9.01(a) in the Original Report to include the audited financial statements of United Wholesale Mortgage, LLC, a Michigan limited liability company (f/k/a United Shore Financial Services) (“United Wholesale Mortgage”) as of and for the year ended December 31, 2020, and (ii) includes the Management’s Discussion and Analysis of Financial Condition and Results of Operations of United Wholesale Mortgage for the year ended December 31, 2020.

This Amendment No. 2 does not amend any other item of the Original Report or purport to provide an update or a discussion of any developments at the Company or its subsidiaries, including United Wholesale Mortgage, subsequent to the filing date of the Original Report. The information previously reported in or filed with the Original Report is hereby incorporated by reference to this Form 8-K/A.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired

The audited consolidated financial statements of United Wholesale Mortgage as of and for the years ended December 31, 2020 and 2019 are attached hereto as Exhibit 99.1 and are incorporated by reference herein.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of United Wholesale Mortgage for the years ended December 31, 2020, 2019 and 2018 is attached hereto as Exhibit 99.2 and incorporated herein by reference.

(d) Exhibits

Exhibit No.	Description
99.1	Audited consolidated financial statements of United Wholesale Mortgage for the years ended December 31, 2020 and 2019.
99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company for the years ended December 31, 2020, 2019 and 2018.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

UWM HOLDINGS CORPORATION
By:	/s/ Timothy Forrester
	Timothy Forrester
	Chief Financial Officer

Date: March 22, 2021

EX-99.1

Exhibit 99.1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Member of United Wholesale Mortgage, LLC

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of United Wholesale Mortgage, LLC (the “Company”) as of December 31, 2020, the related consolidated statements of operations, changes in member’s equity, and cash flows, for the year ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Mortgage Servicing Rights, Net — Refer to Notes 1 and 5 to the financial statements

Critical Audit Matter Description

The Company initially records its mortgage servicing rights (“MSRs”) at estimated fair value, and subsequently evaluates its MSRs for impairment. Subsequent fair value (measured for subsequent impairment purposes) is estimated with the assistance of an independent third party broker based upon a valuation model that calculates the estimated present value of future cash flows. The valuation model incorporates market estimates of the estimated market prepayment speeds, discount rate, and other assumptions. The Company’s MSRs balance was $1.757 billion at December 31, 2020.

We identified the valuation of MSRs as a critical audit matter because of (i) the significant judgments made by management in determining the prepayment speeds and discount rate assumptions (“significant valuation assumptions”) given the limited market observability of these assumptions, and (ii) the high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the appropriateness of these significant valuation assumptions.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the significant valuation assumptions used by management to estimate the fair value of the Company’s MSRs included the following, among others:

• We tested the design and implementation of controls over management’s valuation of MSRs and management’s evaluation of the reasonableness of the significant valuation assumptions, including those related to the supervision of their third party broker, data utilized in the third party broker’s model, and the determination of prepayment speed and discount rate assumptions.

• We inquired of the Company’s third-party valuation specialists regarding the reasonableness of the significant valuation assumptions and the appropriateness of the valuation model.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the significant valuation assumptions used within the valuation model by:

– Comparing the Company’s significant valuation assumptions to other estimates obtained from third party brokers and selected companies in its peer group.

– Considering the impact of changes in management’s significant valuation assumptions throughout the year ended December 31, 2020.

• We assessed the consistency by which management has applied significant valuation assumptions.

/s/ Deloitte & Touche LLP

Detroit, Michigan

March 22, 2021

We have served as the Company’s auditor since 2020.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Owner

United Shore Financial Services, LLC

Pontiac, Michigan

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of United Shore Financial Services, LLC (the “Company”), as of December 31, 2019, and the related consolidated statements of operations, changes in member’s equity and cash flows for the year then ended, and the related notes (collectively, referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and the results of its operations and its cash flow for the year than ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

The consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatements, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. According, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Richey, May and Co., LLP

We have served as the Company’s auditor from 2012 to 2020.

Englewood, Colorado

September 25, 2020

F-2

UNITED WHOLESALE MORTGAGE, LLC

CONSOLIDATED BALANCE SHEETS

(in thousands)

	December 31,		December 31,
	2020		2019
Assets
Cash and cash equivalents	$	1,223,837	$	133,283
Mortgage loans at fair value		7,916,515		5,446,310
Derivative assets		61,072		24,689
Accounts receivable, net		253,600		163,473
Mortgage servicing rights, net		1,756,864		731,353
Premises and equipment, net		107,572		61,365
Operating lease right-of-use asset, net (includes $92,571 and $73,185 with related parties)		93,098		79,485
Finance lease right-of-use asset		22,929		—
Other assets		57,989		14,136
Total assets	$	11,493,476	$	6,654,094
Liabilities and Member’s Equity
Warehouse lines of credit	$	6,941,397	$	5,189,587
Accounts payable and accrued expenses		847,745		282,995
Derivative liabilities		66,237		22,409
Equipment note payable		26,528		30,000
Operating lines of credit		320,300		376,000
Senior notes		789,323		—
Operating lease liability (includes $104,006 and $85,480 with related parties)		104,534		91,780
Finance lease liability		23,132		—
Total liabilities		9,119,196		5,992,771
Member’s Equity:
Membership units (no par); one unit authorized, issued and outstanding at December 31, 2020 and December 31, 2019		—		—
Additional paid-in capital		24,839		24,839
Retained earnings		2,349,441		636,484
Total member’s equity		2,374,280		661,323
Total liabilities and member’s equity	$	11,493,476	$	6,654,094

The accompanying notes are an integral part of these consolidated financial statements.

F-3

UNITED WHOLESALE MORTGAGE, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

	For the year ended December 31,
	2020			2019
Revenue
Loan production income	$	4,551,415		$	1,043,483
Loan servicing income		288,304			102,288
Loss on sale of mortgage servicing rights		(62,285	)		(22,480	)
Interest income		161,160			155,129
Total revenue, net		4,938,594			1,278,420
Expenses
Salaries, commissions and benefits		552,143			372,172
Direct loan production costs		54,459			34,434
Professional services		12,115			37,785
Occupancy and equipment		58,890			40,095
Marketing, travel, and entertainment		20,278			23,433
Depreciation and amortization		16,820			9,405
Servicing costs		70,835			30,936
Amortization, impairment and pay-offs of mortgage servicing rights		573,118			137,776
Interest expense		167,036			164,131
Other general and administrative		27,940			13,196
Total expenses		1,553,634			863,363
Earnings before income taxes		3,384,960			415,057
Provision for income taxes		2,450			—
Net income	$	3,382,510		$	415,057

The accompanying notes are an integral part of these consolidated financial statements.

F-4

UNITED WHOLESALE MORTGAGE, LLC

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER’S EQUITY

(in thousands)

	Member’s Equity		Additional Paid- in Capital		Retained Earnings			Total
Balance, January 1, 2019	$	—	$	24,839	$	294,212		$	319,051
Member distributions		—		—		(72,785	)		(72,785	)
Net income		—		—		415,057			415,057
Balance, December 31, 2019		—		24,839		636,484			661,323
Member contributions		—		—		300,000			300,000
Member distributions		—		—		(1,969,553	)		(1,969,553	)
Net income		—		—		3,382,510			3,382,510
Balance, December 31, 2020	$	—	$	24,839	$	2,349,441		$	2,374,280

The accompanying notes are an integral part of these consolidated financial statements.

F-5

UNITED WHOLESALE MORTGAGE, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	For the year ended December 31,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	3,382,510		$	415,057
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Loss on sale of mortgage servicing rights		62,285			22,480
Reserve for representations and warranties		36,510			19,153
Capitalization of mortgage servicing rights		(1,896,638	)		(1,126,965	)
Amortization and pay-offs of mortgage servicing rights		553,534			117,217
Impairment on mortgage servicing rights, net		19,584			20,559
Depreciation and amortization of premises and equipment		11,581			9,405
Senior notes issuance cost amortization		353			—
Amortization of finance lease right-of-use assets		5,238			2,520
(Increase) decrease in:
Mortgage loans at fair value		(2,470,205	)		(2,928,550	)
Accounts receivable, net		(138,059	)		(4,907	)
Derivative assets		(36,384	)		(7,094	)
Other assets		(43,853	)		(9,051	)
Increase (decrease) in:
Accounts payable and accrued expenses		526,128			(19,291	)
Derivative liabilities		43,828			(6,545	)
Net cash provided by (used in) operating activities		56,412			(3,496,012	)
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of premises and equipment		(57,288	)		(16,775	)
Proceeds from sale of mortgage servicing rights		289,170			594,150
Net cash provided by investing activities		231,882			577,375
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under warehouse lines of credit		1,751,810			2,836,688
Repayments of finance lease liabilities		(5,049	)		—
Payments for deferred offering costs		(4,745	)		—
Borrowings under equipment notes payable		2,165			30,000
Repayments under equipment notes payable		(5,637	)		—
Borrowings under operating lines of credit		412,295			798,321
Repayments under operating lines of credit		(467,995	)		(582,417	)
Proceeds from issuance of senior notes		800,000			—
Discount and direct issuance costs on senior notes		(11,030	)		—
Member contributions		300,000			—
Member distributions		(1,969,554	)		(72,785	)
Net cash provided by financing activities		802,260			3,009,807
INCREASE IN CASH AND CASH EQUIVALENTS		1,090,554			91,170
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR		133,283			42,113
CASH AND CASH EQUIVALENTS, END OF YEAR	$	1,223,837		$	133,283
SUPPLEMENTAL INFORMATION
Cash paid for interest	$	161,803		$	157,813

The accompanying notes are an integral part of these consolidated financial statements.

F-6

UNITED WHOLESALE MORTGAGE, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

United Wholesale Mortgage, LLC (f/k/a United Shore Financial Services, LLC) (the “Company”) was organized under the laws of the State of Michigan. United Shore Financial Services, LLC, the Company’s predecessor, was incorporated on July 16, 1986, primarily doing business as United Wholesale Mortgage. The Company engages in the origination, sale and servicing of residential mortgage loans. The Company is based in Michigan but originates and services loans throughout the United States. The Company is approved as a Title II, non-supervised direct endorsement mortgagee with the United States Department of Housing and Urban Development (or “HUD”). In addition, the Company is an approved issuer with the Government National Mortgage Association (or “Ginnie Mae”), as well as an approved seller and servicer with the Federal National Mortgage Association (or “Fannie Mae”) and Federal Home Loan Mortgage Corporation (or “Freddie Mac”).

On September 15, 2020, the Company amended and restated its operating agreement to reflect SFS Holding Corp. as the sole member of the Company with one unit authorized, issued and outstanding. Historical unit amounts have been retrospectively adjusted to give effect to this change from 80,000 units authorized, issued and outstanding to the single unit.    

On September 22, 2020, the Company and Gores Holdings IV, Inc., a special purpose acquisition company sponsored by an affiliate of The Gores Group, LLC, entered into a definitive agreement with respect to a business combination, which was consummated on January 21, 2021. Upon completion of the proposed transaction, the Company’s current owner retained an approximate 94% economic ownership interest of the Company, and the Company became a consolidated subsidiary of UWM Holdings Corporation (f/k/a Gores Holdings IV, Inc.). Class A common stock of UWM Holdings Corporation was listed on the New York Stock Exchange (“NYSE”) under the new ticker symbol “UWMC” on January 22, 2021. Refer to the subsequent events footnote for further discussion.

On January 21, 2021, SFS contributed all of its equity interest in the Company to UWM Holdings, LLC (a wholly-owned subsidiary of SFS) and adopted the Second Amended and Restated Operating Agreement to reflect that UWM Holdings, LLC as its sole member and its manager. Upon completion of the proposed transaction, (i) UWM Holdings, LLC issued approximately 6% of its units to UWM Holdings Corporation, (ii) SFS retained approximate 94% of its units in UWM Holdings LLC and SFS retained approximately 94% of the economic ownership interest of the combined company and (iii) the Company became a consolidated subsidiary of UWM Holdings Corporation (f/k/a Gores Holdings IV, Inc.). Class A common stock of UWM Holdings Corporation was listed on the New York Stock Exchange (under the new ticker symbol “UWMC”) on January 22, 2021. Refer to the subsequent events footnote for further discussion.

Basis of Presentation

The consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (or “GAAP”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. As of December 31, 2020 and 2019, the Company had two subsidiaries both of which were special purpose entities that were formed and operate solely in connection with securitized warehouse facilities used by the Company in its operations. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The most sensitive accounting estimates affecting the consolidated financial statements are the valuations of mortgage loans at fair value, mortgage servicing rights (or “MSRs”), derivative assets and liabilities, and the measurement of the representations and warranties reserve.

F-7

Operating Segments

The Company operates as one segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (or “CODM”), which is the Company’s chief executive officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information on a consolidated basis.

Cash and Cash Equivalents

The Company considers cash and temporary investments with original maturities of three months or less to be cash and cash equivalents. The Company typically maintains cash balances in financial institutions in excess of Federal Deposit Insurance Corporation limits. The Company evaluates the creditworthiness of these financial institutions in determining the risk associated with these balances.

Mortgage Loans at Fair Value and Revenue Recognition

Mortgage loans are recorded at estimated fair value. Fair value of mortgage loans is estimated using observable market information including pricing from current cash commitments from government sponsored enterprises, recent market commitment prices, or broker quotes, as if the loans were to be sold currently into the secondary market.

A majority of the revenues from mortgage loan originations are recognized when the loan is originated which is the primary revenue recognition event as the loans are recorded at fair value upon origination. Loan origination fees are recognized as income at the time the loans are originated. Interest income is accrued at the contractual rate, unless collectability is uncertain. Loan production income also includes the unrealized gains and losses associated with the changes in the fair value of mortgage loans at fair value, the realized and unrealized gains and losses from derivative assets and liabilities and the capitalization of MSRs.

Loans are considered to be sold when the Company surrenders control over the financial assets. Control is considered to have been surrendered when the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; the purchaser obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets; and the Company does not maintain effective control over the transferred assets through an agreement that entitles or obligates the Company to repurchase or redeem the transferred assets before their maturity. The Company typically considers the above criteria to have been met when transferring title to another party where no substantive repurchase rights or obligations exist.

Derivatives

Derivatives are recognized as assets or liabilities on the consolidated balance sheets and measured at fair value with changes in fair value recorded within the consolidated statements of operations in the period in which they occur. The Company enters into derivative instruments to reduce its risk exposure to fluctuations in interest rates. The Company accounts for derivative instruments as free-standing derivative instruments and does not designate any for hedge accounting. Interest rate lock commitments (or “IRLCs”) on mortgage loans to be originated or purchased which are intended to be sold are considered to be derivatives with changes in fair value recorded in the consolidated statements of operations as part of loan production income. Fair value is estimated primarily based on relative changes in interest rates for the underlying mortgages to be originated or purchased. Fair value estimates also take into account the probability that loan commitments may not be exercised by customers. The Company uses forward mortgage backed security contracts, which are known as forward loan sale commitments (or “FLSCs”), to economically hedge the IRLCs. Refer to Note 3 – Derivatives for further details.

Mortgage Servicing Rights and Revenue Recognition - Sale of MSRs

MSRs are initially recorded at estimated fair value. To determine the fair value of the servicing right created, the Company uses third party estimates of fair value at the time of initial recognition. Subsequent fair value (measured for subsequent impairment purposes) is estimated with the assistance of an third party broker based upon a valuation model that calculates the estimated present value of future cash flows. The valuation model incorporates market estimates of the estimated market prepayment speeds, discount rate, cost to service, float value, ancillary income, inflation, and delinquency and default rates.

F-8

MSRs are amortized in proportion to the estimated future net servicing revenue. MSRs are periodically evaluated for impairment. For this purpose, the Company stratifies its MSRs based on interest rate. Changes in the estimates used to value MSRs could materially change the estimated fair value and any valuation allowances required. Management records a valuation allowance when the fair value of the mortgage servicing asset strata is less than its amortized book value. Valuation allowances are recorded as a temporary impairment to the affected strata effectively reducing recorded MSRs and incurring a charge to operations. Valuation recoveries are recorded in subsequent periods. When a mortgage prepays, the Company permanently reduces the associated MSR in the period of prepayment with a charge to operations.

Sales of MSRs are recognized when the risks and rewards of ownership have been transferred to a buyer, and a substantive non-refundable down payment is received. Also, any risks retained by the Company must be reasonably quantifiable to be eligible for sale accounting.

Premises and equipment, net

Premises and equipment is recorded at cost and depreciated or amortized using the straight line method over the estimated useful lives of the assets. The following is a summary of premises and equipment, net at December 31 (in thousands):

	Useful lives (years)	2020			2019
Furniture and equipment	3-10	$	24,325		$	17,976
Computer software	1-3		3,644			1,480
Leasehold improvements	(a)		104,074			50,633
Construction in process			1,249			5,415
Accumulated depreciation and amortization			(25,720	)		(14,139	)
Premises and equipment, net		$	107,572		$	61,365

(a) Amortized over the shorter of the related lease term or the estimated useful life of the assets.

Leases

The Company enters into contracts to lease real estate, furniture and fixtures, and information technology equipment. Leases that meet one of the finance lease criteria are classified as finance leases, while all others are classified as operating leases. The Company determines if an arrangement is a lease at inception and has made on accounting policy election to capitalize leases with initial terms in excess of 12 months. At lease commencement, a lease liability and right-of-use asset are calculated and recognized for operating and finance leases. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease and lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term. The lease term used in the calculation includes any options to extend that the Company is reasonably certain to exercise. The lease liability is equal to the present value of future lease payments. The right-of-use asset is equal to the lease liability, plus any initial direct costs and prepaid lease payments, less any lease incentives received. Operating and finance lease right-of-use assets and liabilities are recorded separately on the consolidated balance sheets. In determining the present value of future lease payments, the Company uses estimated incremental borrowing rates based on information available at the lease commencement date when an implicit rate is not readily determinable for a given lease. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company uses an incremental borrowing rate estimated by referencing the Company’s collateralized borrowings.

F-9

The Company’s leases do not contain any material residual value guarantees or material restrictive covenants. The Company’s lease agreements include both lease and non-lease components which are generally accounted for as a single component to the extent that the costs are fixed. If the non-lease components are not fixed, the costs are treated as variable lease costs. Subsequent to lease commencement, lease liabilities recorded for finance leases are measured using the effective interest method and the related right-of-use assets are amortized on a straight-line basis over the lease term. For finance leases, interest expense and amortization expense are recorded separately in the consolidated statements of operations in interest expense and depreciation and amortization, respectively. For operating leases, total lease cost is comprised of lease expense and variable lease cost. Lease expense includes lease payments, which are recognized on a straight-line basis over the lease term. Variable lease cost includes common area maintenance charges, real estate taxes, insurance and other expenses, where applicable, which are expensed as incurred. Total lease cost for operating leases is recorded in occupancy and equipment expense on the consolidated statements of operations. See “Note 6 - Leases” for further information.

Representations and Warranties Reserve

Loans sold to investors which the Company believes met investor and agency underwriting guidelines at the time of sale may be subject to repurchase in the event of specific default by the borrower or subsequent discovery that underwriting or documentation standards were not explicitly satisfied. The Company may, upon mutual agreement, indemnify the investor against future losses on such loans or be subject to other guaranty requirements and subject to loss. The Company initially records its exposure under such guarantees at estimated fair value upon the sale of the related loan, within accounts payable and accrued expenses, as well as within loan production income, and continues to evaluate its on-going exposures in subsequent periods. The reserve is estimated based on the Company’s assessment of its contingent and non-contingent obligations, including expected losses, expected frequency, the overall potential remaining exposure, as well as an estimate for a market participant’s potential readiness to stand by to perform on such obligations. The Company repurchased $53.1 million and $31.1 million of loans during the years ended December 31, 2020 and 2019, respectively, related to the representations and warranties provisions.

The activity of the representations and warranties reserve was as follows (in thousands):

	December 31,
	2020			2019
Balance, beginning of period	$	46,322		$	32,999
Reserve charged to operations		36,510			19,153
Losses realized, net		(13,290	)		(5,830	)
Balance, end of period	$	69,542		$	46,322

Loans Eligible for Repurchase from Ginnie Mae

When the Company has the unilateral right to repurchase Ginnie Mae pool loans it has previously sold (generally loans that are more than 90 days past due) and the call option results in a more than trivial benefit to the Company, the previously sold assets are required to be re-recognized on the consolidated balance sheets. The recognition of previously sold loans does not impact the accounting for the previously recognized MSRs. At December 31, 2020 and December 31, 2019, the Company had recorded such Ginnie Mae pool loans in mortgage loans at fair value totaling $451.1 million and $21.7 million, respectively, with related purchase liabilities equal to the gross amount of the loan recorded in accounts payable and accrued expenses. At December 31, 2020 and December 31, 2019, the fair values of the Ginnie Mae pool loans were $448.5 million and $18.4 million, respectively.

Loan Origination Fees and Expenses

Loan origination fees represent revenue earned from loan production and are included in loan production income on the consolidated statements of operations. Loan origination fees generally

F-10

represent flat, per-loan fee amounts and are recognized as revenue at the time the loans are originated. Loan origination expenses are charged to operations as incurred and are included in direct loan production costs on the consolidated statements of operations.

Loan Servicing Income

Loan servicing income represents revenue earned for servicing loans for various investors. The loan servicing income is based on a contractual percentage of the outstanding principal balance and is recognized into revenue as the related mortgage payments are received by the Company’s subservicer. Loan servicing expenses are charged to operations as incurred.

Servicing Advances

Servicing advances represent advances on behalf of customers and investors to cover delinquent balances for property taxes, insurance premiums and other out-of-pocket costs. Advances are made in accordance with the servicing agreements and are recoverable upon liquidation. The Company periodically evaluates the advances for collectability and amounts are written-off when they are deemed uncollectible. Management has determined that certain amounts are not fully collectible and has recorded an allowance for expected credit losses of approximately $264 thousand and $125 thousand at December 31, 2020 and 2019, respectively. Servicing advances are included in accounts receivable, net on the consolidated balance sheets.

Interest Income

Interest income on mortgage loans at fair value is accrued based upon the principal amount outstanding and contractual interest rates. Income recognition is discontinued when loans become 90 days delinquent or when, in management’s opinion, the collectability of principal and interest becomes doubtful and the specific loan is put on nonaccrual status.

Advertising and Marketing

Advertising and marketing is expensed as incurred and amounted to $7.9 million and $5.6 million for the years ended December 31, 2020 and 2019, respectively, and is included in marketing, travel, and entertainment expenses on the consolidated statements of operations.

Escrow and Fiduciary Funds

The Company maintains segregated bank accounts in trust for investors and escrow balances for mortgagors. The balances of these accounts amounted to $955.2 million and $374.3 million at December 31, 2020 and 2019, respectively, and are excluded from the consolidated balance sheets.

Income Taxes

The Company has elected to be taxed as a partnership for income tax purposes. Accordingly, taxable income or loss of the Company is reported on the income tax returns of the member and no provision for federal income taxes has been recorded in the accompanying consolidated financial statements. The Company is subject to certain state income taxes which are included on the consolidated statements of operations.

Contingencies

The Company evaluates contingencies based on information currently available and establishes an accrual for those matters when a loss contingency is considered probable and the related amount is reasonably estimable. For matters where a loss is believed to be reasonably possible but not probable, no accrual is established by the nature of the loss contingency and an estimate of the reasonably possible range of loss in excess of amount accrued, when such estimate can be made, is disclosed. In deriving an estimate, the Company is required to make assumptions about matters that are, by their nature, highly uncertain. The assessment of loss contingencies involves the use of critical estimates, assumptions and judgments. It is not possible to predict or determine the outcome of all loss contingences. Accruals are periodically reviewed and may be adjusted as circumstances change.

F-11

Risks and Uncertainties

The Company encounters certain economic and regulatory risks inherent in the consumer finance business. Economic risks include interest rate risk and credit risks. The Company is subject to interest rate risk to the extent that in a rising interest rate environment, the Company may experience a decrease in loan production, as well as decreases in the value of mortgage loans at fair value and in commitments to originate loans, which may negatively impact the Company’s operations. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which mortgage loans are being held at fair value or subsequently under any representation and warranty provisions within the Company’s sale agreements. The Company is subject to substantial regulation as it directly provides financing to consumers acquiring residential real estate.

The Company sells loans to investors without specific recourse. As such, the investors have assumed the risk of loss of default by the borrower. However, the Company is usually required by these investors to make certain standard representations and warranties relating to credit information, loan documentation and collateral. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these investors for any losses from borrower defaults. In addition, if loans pay-off within a specified time frame, the Company may be required to refund a portion of the sales proceeds to the investors.

Reclassifications

Some reclassifications have been made to prior year balances to conform to the current year financial statement presentation.

Related Party Transactions

The Company enters into various transactions with related parties. See “Note 15 – Related Party Transactions” for additional information.

Recently Adopted Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which was subsequently amended by ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, which was issued in January 2021. This guidance provides practical expedients to address existing guidance on contract modifications due to the expected market transition from the London Inter-bank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The ASU was effective upon issuance on a prospective basis beginning January 1, 2020 and the Company may elect certain practical expedients as reference rate activities occur. The Company will evaluate its debt and other applicable contracts that are modified in the future to ensure they are eligible for modification relief and apply the practical expedients as needed.

In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (or “ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics to increase stakeholder awareness and make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The Company adopted ASU 2020-03 upon issuance, with no material effect on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. The amendments to Topic 740 include the removal of certain exceptions to the general principles of ASC 740 in such areas as intraperiod tax allocation, year to date losses in interim periods and deferred tax liabilities related to outside basis differences. Amendments also include simplification in other areas such as interim recognition of enactment of tax laws or rate changes and accounting for a franchise tax (or similar tax) that is partially based on income. The guidance further clarifies that single-member limited liability companies and similar disregarded entities that are not subject to income tax are not required to recognize an allocation of consolidated income tax expense in their separate financial statements, but they could elect to do so. This ASU is effective for public business entities for fiscal years and interim periods beginning after December 15, 2020, with early adoption permitted. The adoption of this guidance on January 1, 2020 did not have a significant effect on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which removes, modifies or adds certain disclosure requirements for fair value measurements. The guidance was effective January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

F-12

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which amends the guidance for recognizing credit losses on financial instruments measured at amortized cost including receivables. The ASU requires measurement and recognition of expected versus incurred credit losses using a lifetime credit loss measurement approach. Substantially all of the Company’s financial assets are measured at fair value and are therefore not subject to the guidance; however, the Company determined that certain receivables are within the scope of the ASU. The expected credit-related losses of the Company’s receivables are immaterial based on historical experience and due to the short-term nature of the assets. Servicing advances are generally expected to be fully reimbursed under the terms of the servicing agreements. The guidance was effective January 1, 2020. The adoption of this guidance, including the subsequent amendments to the initial guidance, ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2019-11, did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, which is intended to clarify or correct the unintended application of the Codification of accounting guidance for a wide variety of topics. The adoption of this ASU will be required effective January 1, 2021. Early adoption is allowed. The adoption of this guidance will not have a material impact on the consolidated financial statements and related disclosures.

NOTE 2 – MORTGAGE LOANS AT FAIR VALUE

The table below includes the estimated fair value and unpaid principal balance (“UPB”) of mortgage loans held for sale that have contractual principal amounts and for which the Company has elected the fair value option. The fair value option has been elected for mortgage loans, as this accounting treatment best reflects the economic consequences of the Company’s mortgage origination and related hedging and risk management activities. The difference between the UPB and estimated fair value is made up of the premiums paid on mortgage loans, as well as the fair value adjustment as of the balance sheet date. The change in fair value adjustment is recorded in the “Loan production income” line item of the consolidated statement of operations.

(In thousands)	December 31, 2020		December 31, 2019
Mortgage loans, unpaid principal balance	$	7,620,014	$	5,309,394
Premiums paid on mortgage loans		101,949		88,913
Fair value adjustment		194,552		48,003
Mortgage loans at fair value	$	7,916,515	$	5,446,310

NOTE 3 – DERIVATIVES

The Company enters into interest rate lock commitments (“IRLCs”) to originate residential mortgage loans, at specified interest rates and terms within a specified period of time, with customers who have applied for a loan and may meet certain credit and underwriting criteria. To determine the fair value of the IRLCs, each contract is evaluated based upon its stage in the application, approval and origination process for its likelihood of consummating the transaction (or “pullthrough”). Pullthrough is estimated based on changes in market conditions, loan stage, and actual borrower behavior using a historical analysis of IRLC closing rates. Generally, the further into the process the more likely the IRLC is to become a loan. The blended average pullthrough rate was 92% and 81%, as of December 31, 2020 and 2019, respectively. The Company uses forward mortgage backed security contracts, which are known as forward loan sale commitments (or “FLSCs”), to economically hedge the IRLCs.

F-13

The following summarizes derivative instruments (in thousands):

	December 31, 2020						December 31, 2019
	Fair Value			Notional Amount			Fair Value			Notional Amount
IRLCs, net	$	59,579		$	10,594,329	(a)	$	16,786		$	6,727,739	(a)
FLSCs, net		(64,743	)		16,602,739			(14,506	)		10,674,680
Total	$	(5,164	)				$	2,280

(a) Adjusted for pullthrough rates of 92% and 81%, respectively.

NOTE 4 – ACCOUNTS RECEIVABLE, NET

The following summarizes accounts receivable, net at December 31 (in thousands):

	December 31, 2020
	2020			2019
Investor receivables	$	100,478		$	104,303
Servicing advances		60,053			9,004
Servicing fees		55,838			23,113
Due from title companies		33,663			16,729
Warehouse - after deadline funding		3,642			4,020
Pair-offs receivable		438			6,317
Receivable - related party		28			245
Allowance for doubtful accounts		(540	)		(258	)
Total Accounts Receivable, Net	$	253,600		$	163,473

The Company periodically evaluates the carrying value of accounts receivable balances with delinquent receivables being written-off based on specific credit evaluations and circumstances of the debtor.

NOTE 5 – MORTGAGE SERVICING RIGHTS, NET

The following summarizes the activity of MSRs (in thousands):

	For the year ended December 31,
	2020			2019
Balance, beginning of period	$	731,353		$	368,117
Additions		1,896,638			1,126,965
Amortization		(252,421	)		(80,280	)
Loans paid in full		(301,113	)		(36,937	)
Sales		(298,009	)		(625,953	)
Impairment		(19,584	)		(20,559	)
Balance, end of period	$	1,756,864		$	731,353

The unpaid principal balance of mortgage loans serviced approximated $188.3 billion and $72.6 billion at December 31, 2020 and 2019, respectively. Conforming conventional loans serviced by the Company have previously been sold to Fannie Mae and Freddie Mac on a non-recourse basis, whereby foreclosure losses are generally the responsibility of Fannie Mae and Freddie Mac, and not the Company. Loans serviced for Ginnie Mae are insured by the FHA, guaranteed by the VA, or insured by other applicable government programs. While the above guarantees and insurance are the responsibility of those parties, the Company is still subject to potential losses related to its servicing of these loans. Those estimated losses are incorporated into the valuation of MSRs.

F-14

The key unobservable inputs used in determining the fair value of the Company’s MSRs were as follows at December 31, 2020 and 2019, respectively:

	December 31,			December 31,
	2020			2019
Discount rates		9.0% - 14.5	%		9.0% - 14.5	%
Annual prepayment speeds		8.8% - 42.2	%		8.2% - 30.8	%
Cost of servicing		$75 - $126			$90 - $138

The Company views these unobservable inputs as the most critical in assessing the fair value of its MSRs, which had an estimated fair value of approximately $1.76 billion and $744 million at December 31, 2020 and 2019, respectively.

The hypothetical effect of an adverse change in these key assumptions would result in a decrease in fair values as follows at December 31, 2020 and 2019, respectively, (in thousands):

	December 31,			December 31,
	2020			2019
Discount rate:
+ 10% adverse change – effect on value	$	(56,889	)	$	(25,580	)
+ 20% adverse change – effect on value	$	(110,040	)	$	(49,396	)
Prepayment speeds:
+ 10% adverse change – effect on value	$	(87,752	)	$	(34,208	)
+ 20% adverse change – effect on value	$	(169,230	)	$	(65,744	)
Cost of servicing:
+ 10% adverse change – effect on value	$	(21,643	)	$	(8,879	)
+ 20% adverse change – effect on value	$	(43,285	)	$	(17,759	)

These sensitivities are hypothetical and should be used with caution. As the table demonstrates, the Company’s methodology for estimating the fair value of MSRs is highly sensitive to changes in assumptions. For example, actual prepayment experience may differ and any difference may have a material effect on MSR fair value. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption of the fair value of the MSRs is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may indicate higher prepayments; however, this may be partially offset by lower prepayments due to other factors such as a borrower’s diminished opportunity to refinance), which may magnify or counteract the sensitivities. Thus, any measurement of MSR fair value is limited by the conditions existing and assumptions made as of a particular point in time. Those assumptions may not be appropriate if they are applied to a different point in time.

The following table summarizes the Company’s estimated future MSR amortization expense (in thousands) based upon the existing MSR asset. These estimates are based on existing asset balances, the current interest rate environment, and prepayment speeds as of December 31, 2020. The actual amortization expense the Company recognizes in any given period may be significantly different depending upon retention or sale activities, changes in interest rates, prepayment speeds, market conditions, or circumstances that indicate the carrying amount of an asset may not be recoverable.

F-15

Year ending December 31,	Amounts
2021	$	293,647
2022		249,591
2023		211,575
2024		179,066
2025		151,176
Thereafter		691,393
Total	$	1,776,448

NOTE 6 – LEASES

Lease Right-of-Use Assets and Liabilities

The Company has operating and finance lease arrangements related to its facilities, furniture and fixtures, and information technology equipment. A substantial portion of the Company’s operating lease arrangements are with related party entities. See “Note 15 - Related Party Transactions” for further information.

Finance lease right-of-use assets were $22.9 million and $0.0 million at December 31, 2020 and 2019 respectively. Finance lease liabilities were $23.1 million and $0.0 million at December 31, 2020 and 2019, respectively. The Company’s financing lease agreements have remaining terms ranging from two to three years. For the year ended December 31, 2020, total interest expense and amortization expense under finance leases amounted to $0.8 million and $5.2 million, respectively.

Operating lease right-of-use assets were $93.1 million, including $92.6 million with related parties, and $79.5 million, including $73.2 million with related parties, at December 31, 2020 and 2019, respectively. Operating lease liabilities were $104.5 million, including $104.0 million with related parties, and $91.8 million, including $85.5 million with related parties, at December 31, 2020 and 2019, respectively. The Company’s operating lease agreements have remaining terms ranging from 2 years to 17 years. Certain lease agreements have renewal options. Total lease expense under all operating leases amounted to $10.9 million and $9.5 million for the years ended December 31, 2020 and 2019, respectively. Lease expense for related party leases was $10.6 million and $8.6 million for years ended December 31, 2020 and 2019, respectively. Variable lease expense amounted to $0.6 million and $0.0 million for the years ended December 31, 2020 and 2019, respectively.

Supplemental cash flow information related to leases is as follows (in thousands):

	December 31, 2020		December 31, 2019
Cash paid for the amounts included in the measurement of leases liabilities – operating	$	12,551	$	8,000
Cash paid for amounts included in the measurement of lease liabilities - financing	$	5,049	$	—
Operating lease right-of-use assets obtained in exchange for operating leases liabilities1	$	27,630	$	82,300
Financing lease right-of-use assets obtained in exchange for finance lease liabilities	$	20,120	$	—

1  Of the $82.3 million obtained as of December 31, 2019, $76.0 million is related to the adoption of ASU 2016-02.

F-16

Additional supplemental information related to leases was as follows:

	December 31, 2020			December 31, 2019
Weighted average remaining lease term – operating leases		15.9 years			16 years
Weighted average remaining lease term – finance leases		2.4 years			—
Weighted average discount rate – operating leases		7.8	%		6	%
Weighted average discount rate – finance leases		6.2	%		—

The maturities of the Company’s operating lease liabilities are summarized below (in thousands):

December 31, 2020	Amounts
2021	$	11,493
2022		11,414
2023		11,175
2024		11,175
2025		11,246
Thereafter		124,684
Total lease payments		181,187
Less imputed interest		(76,653	)
Total	$	104,534

The maturities of the Company’s financing lease liabilities are summarized below (in thousands):

December 31, 2020	Amounts
2021	$	10,322
2022		10,083
2023		4,505
Total lease payments		24,910
Less imputed interest		(1,778	)
Total	$	23,132

NOTE 7 – LINES OF CREDIT

The Company had the following lines of credit with financial institutions at December 31, 2020 and 2019, respectively, (in thousands):

	December 31, 2020		December 31, 2019
$400 million line of credit agreement expiring December 31, 2022. Interest at variable rates based on a spread to the one month LIBOR rate. Line is collateralized by $989.5 million of MSRs (based on estimated fair value as of December 31, 2020).	$	320,300	$	251,000
$125 million line of credit agreement expired on September 14, 2020. Interest at variable rates based on a spread to the one month LIBOR rate. This line was closed during 2020.		—		125,000
	$	320,300	$	376,000

F-17

NOTE 8 – WAREHOUSE LINES OF CREDIT

The Company had the following warehouse lines of credit with financial institutions as of December 31, 2020 and 2019, respectively, (in thousands):

As of December 31, 2020 Warehouse Lines of Credit	Expiration Date		December 31, 2020		December 31, 2019
$1.5 Billion		2/10/2021	$	1,344,851	$	510,954
$800 Million		3/5/2021		666,891		314,728
$200 Million		3/24/2021		86,928		150,229
$150 Million		5/25/2021		140,237		133,196
$400 Million		6/23/2021		287,073		436,437
$2 Billion		7/1/2021		499,841		800,764
$200 Million		7/7/2021		198,705		156,632
$750 Million		9/7/2021		209,138		—
$150 Million		9/19/2021		112,429		106,256
$400 Million		9/23/2021		248,947		240,620
$925 Million		10/29/2021		1,179		—
$3 Billion		10/29/2021		1,685,138		1,384,903
$250 Million		11/16/2021		249,006		355,540
$500 Million		12/28/2021		365,577		—
$1 Billion		1/10/2022		769,510		513,645
$250 Million (ASAP + - see below)		No expiration		75,947		85,683
$150 Million (gestation line - see below)		No expiration		—		—
All interest rates are variable based on a spread to the one-month LIBOR rate.			$	6,941,397	$	5,189,587

In addition to warehouse facilities, we are an approved lender for loan early funding facilities with Fannie Mae through its As Soon As Pooled Plus (“ASAP+”) program and Freddie Mac through its Early Funding (“EF”) program. As an approved lender for these early funding programs, we enter into an agreement to deliver closed and funded one-to-four family residential mortgage loans, each secured by related mortgages and deeds of trust, and receive funding in exchange for such mortgage loans in some cases before the lender has grouped them into pools to be securitized by Fannie Mae or Freddie Mac. All such mortgage loans must adhere to a set of eligibility criteria to be acceptable. As of December 31, 2020, the amount outstanding through the ASAP+ program was approximately $75.9 million and no amounts were outstanding under the EF program.

In addition to the arrangements with Fannie Mae and Freddie Mac, we are also party to one early funding (or “gestation”) lines with a financial institution. Through this arrangement, we enter into agreements to deliver certified pools consisting of mortgage loans securitized by Ginnie Mae, Fannie Mae, and/or Freddie Mac, as applicable, for the gestation line. As with the ASAP+ and EF programs, all mortgage loans under this gestation line must adhere to a set of eligibility criteria.

F-18

The gestation line has a transaction limit of $150.0 million, and it is an evergreen agreement with no stated termination or expiration date that can be terminated by either party upon written notice. As of December 31, 2020, no amount was outstanding under this line.

As of December 31, 2020, the Company had pledged mortgage loans at fair value as collateral under the above warehouse lines of credit. The above agreements also contain covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquidity, maximum debt to net worth ratio, net income, and limitations on additional debt, as defined in the agreements. The Company was in compliance with all debt covenants as of December 31, 2020.

NOTE 9 – SENIOR NOTES

On November 3, 2020, the Company issued $800.0 million in aggregate principal amount of senior unsecured notes due November 15, 2025 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 5.500% per annum. Interest on the Senior Notes is due semi-annually on May 15 and November 15 of each year, beginning on May 15, 2021. As of December 31, 2020, the Senior Notes balance was $789.3 million, net of discounts and issuance costs.

On or after November 15, 2022, the Company may, at its option, redeem the Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: November 15, 2022 at 102.750%; November 15, 2023 at 101.375%; or November 15, 2024 until maturity at 100.000%, of the principal amount of the Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest. Prior to November 15, 2022, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the Senior Notes originally issued at a redemption price of 105.500% of the principal amount of the Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. In addition, the Company may, at its option, redeem the Senior Notes prior to November 15, 2022 at a price equal to 100% of the principal amount redeemed plus a “make-whole” premium, plus accrued and unpaid interest.

The indenture governing the Senior Notes contains customary terms and restrictions, subject to a number of exceptions and qualifications. The Company was in compliance with the terms of the indenture as of December 31, 2020.

On May 15, 2020, SFS Holding Corp., the Company’s member, issued and sold $200 million in aggregate principal amount of senior secured notes and on June 15, 2020 and July 15, 2020, SFS Holding Corp. issued and sold an additional aggregate $100 million in principal amount of senior secured notes (collectively, the “SFS Notes”) and had the ability to issue up to an additional $200 million in principal amount of senior secured notes on the same terms. The Company guaranteed the SFS Notes.

The gross proceeds from the SFS Notes of $300 million were contributed to the Company by SFS Holding Corp., and the Company distributed $449.5 million to SFS Holding Corp., which was used by SFS Holdings Corp. to repay in full, including accrued interest, and terminate the SFS Notes on September 16, 2020.

NOTE 10 – EQUIPMENT NOTE PAYABLE

During 2019, the Company entered into a $30.0 million note payable, secured by equipment, with a financial institution. The note required monthly payments of $0.58 million beginning January 1, 2020 and interest accruing at 5.99% per annum. The note matures December 2024.

In 2020, the Company entered into two additional equipment notes payable of $2.1 million and $0.9 million, respectively. The notes require quarterly payments of $0.1 million and $80 thousand beginning July 1, 2020 and January 1, 2021, respectively, and interest accruing at 6.1% and 4.69% per annum, respectively. The notes mature on April 2023 and October 2023, respectively.

F-19

The principal balance outstanding for the three notes payable was $26.5 million as of December 31, 2020. Annual principal maturities of the equipment notes payable are as follows as of December 31, 2020 (in thousands):

Year ending December 31,	Amounts
2021	$	6,299
2022		6,673
2023		6,851
2024		6,705
2025 and thereafter		—
Total	$	26,528

NOTE 11 – SELF INSURANCE PLAN

The Company has engaged an insurance company to provide administrative services for the Company’s self-funded insurance plan. The Company has a stop loss policy with the insurance company which limits the Company’s exposure both in the aggregate and on an individual basis.

NOTE 12 – EMPLOYEE BENEFIT PLAN

The Company has a 401(k) plan covering substantially all employees. Employees may contribute amounts as allowable by Internal Revenue Service and plan limitations. The Company may make discretionary matching and non-elective contributions.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Commitments to Originate Loans

As of December 31, 2020, the Company had approximately $11.5 billion in notional amounts of IRLCs, whereby a potential borrower has agreed to interest rates and pricing of a potential loan. These contracts potentially expose the Company to interest rate or pricing risk and are economically hedged with forward mortgage backed security contracts. Furthermore, as of December 31, 2020, the Company had agreed to extend credit to potential borrowers for approximately $19.2 billion. These contracts represent off balance sheet credit risk where the Company may be required to extend credit to these borrowers based on the prevailing interest rates and prices at the time of execution.

Regulatory Net Worth Requirements

Certain secondary market agencies and state regulators require the Company to maintain minimum net worth and capital requirements in order to remain in good standing with the agencies. Noncompliance with an agency’s requirements can result in such agency taking various remedial actions up to and including terminating the Company’s ability to sell loans to and service loans on behalf of the respective agency.

In accordance with the regulatory requirements of HUD, governing non-supervised, direct endorsement mortgagees, the Company is required to maintain a minimum net worth (as defined by HUD) of $2.5 million. At December 31, 2020, the Company exceeded the regulatory net worth requirement and had a net worth (as defined by HUD) of $2.37 billion.

We are required to maintain a minimum net worth and liquidity by Ginnie Mae, Freddie Mac and Fannie Mae. The most restrictive of the minimum net worth and liquidity requirements, requires the Company to maintain a minimum net worth of $491.1 million and liquidity of $78.2 million as of December 31, 2020. At December 31, 2020 we exceed the net worth and liquidity requirement for all three government sponsored entities.

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NOTE 14 – FAIR VALUE MEASUREMENTS

Fair value is the price that would be received if an asset were sold or the price that would be paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. Required disclosures include classification of fair value measurements within a three-level hierarchy (Level 1, Level 2, and Level 3). Classification of a fair value measurement within the hierarchy is dependent on the classification and significance of the inputs used to determine the fair value measurement. Observable inputs are those that are observed, implied from, or corroborated with externally available market information. Unobservable inputs represent the Company’s estimates of market participants’ assumptions.

Fair value measurements are classified in the following manner:

Level 1—Valuation is based on quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Valuation is based on either observable prices for identical assets or liabilities in inactive markets, observable prices for similar assets or liabilities, or other inputs that are derived directly from, or through correlation to, observable market data at the measurement date.

Level 3—Valuation is based on the Company’s or others’ models using assumptions at the measurement date that a market participant would use.

In determining fair value measurements, the Company uses observable inputs whenever possible. The level of a fair value measurement within the hierarchy is dependent on the lowest level of input that has a significant impact on the measurement as a whole. If quoted market prices are available at the measurement date or are available for similar instruments, such prices are used in the measurements. If observable market data is not available at the measurement date, judgment is required to measure fair value.

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Financial Instruments - Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following are the major categories of financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	December 31, 2020
Description	Level 1		Level 2			Level 3		Total
Mortgage loans at fair value	$	—	$	7,916,515		$	—	$	7,916,515
IRLCs		—		—			59,579		59,579
FLSCs		—		(64,743	)		—		(64,743	)
Total	$	—	$	7,851,772		$	59,579	$	7,911,351
	December 31, 2019
Description	Level 1		Level 2			Level 3		Total
Mortgage loans at fair value	$	—	$	5,446,310		$	—	$	5,446,310
IRLCs		—		—			16,786		16,786
FLSCs		—		(14,506	)		—		(14,506	)
Total	$	—	$	5,431,804		$	16,786	$	5,448,590

As of December 31, 2020 and 2019, mortgage loans at fair value included fair value adjustments of $194.6 million and $48.0 million, respectively. These fair value adjustments include the relative changes in the values of closed loans from the original pricing of the prospective loan (while it was an IRLC) to period end, subsequent market interest rate movements, and includes gain margin for the recorded loans based on external market indications of fair value.

Derivative assets and liabilities solely represent fair value of adjustments for the contracts based upon their original contract dates relative to the period end pricing for the contracts. The derivative contracts that the Company enters into are initially recorded at zero value as they are entered into at market prices on the date of execution. Subsequent changes in market conditions, primarily interest rates, drive the value of the Company’s derivative contracts and such fair value adjustments represent the respective derivative assets and liabilities.

Level 3 Issuances and Transfers

The Company issues IRLCs which are considered derivatives. If the contract converts to a loan, the implied value, which is solely based upon interest rate changes, is incorporated in the basis of the fair value of the loan. If the IRLC does not convert to a loan, the basis is reduced to zero as the contract has no continuing value. The Company does not track the basis of the individual IRLCs that convert to a loan, as that amount has no relevance to the presented consolidated financial statements.

Transfers into and out of Level 3 specific to the Company’s IRLC asset are equivalent to the net change in unrealized gain of approximately $42.8 million and $30 thousand for the years ended December 31, 2020 and 2019, respectively.

Other Financial Instruments

During the fourth quarter of 2020, the Company issued $800.0 million of Senior Notes. The fair value of the Senior Notes approximated $841.3 million as of December 31, 2021. The fair value of the Senior Notes was estimated using Level 2 inputs, including observable trading information in inactive markets.

Due to their nature and respective terms (including the variable interest rates on warehouse and operating lines of credit), the carrying value of cash and cash equivalents, receivables, payables, notes payable and warehouse and operating lines of credit approximate their fair value as of December 31, 2020 and 2019, respectively.

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NOTE 15– RELATED PARTY TRANSACTIONS

The Company has engaged in the following significant related party transactions in 2020 and 2019:

• The Company’s corporate campus is located in buildings that are owned by entities controlled by the Company’s founder and its CEO and leased by the Company from these entities;

• Legal services are provided to the Company by a law firm in which the Company’s founder is a partner;

• The Company leases an aircraft owned by an entity controlled by the Company’s CEO to facilitate travel of Company executives for business purposes;

• Home appraisal contracting and review services are provided by home appraisal management companies partially owned by the Company’s CEO and his brother; an executive of the Company and a member of the board of directors of UWM Holdings Corporation is also on the board of directors of one of these home appraisal management companies.

For the years ended December 31, 2020 and 2019, the Company incurred approximately $15.0 million and $11.2 million, respectively, in operating expenses with various companies related through common ownership. The Company incurred expenses of approximately $13.4 million in rent and other occupancy related expenses, $0.6 million in legal fees, $0.4 million primarily related to direct origination costs and $0.6 million in other general and administrative expenses for the year ended December 31, 2020. The Company incurred expenses of approximately $10.0 million in rent and other occupancy related expenses, $0.6 million in legal fees, $0.4 million primarily related to direct origination costs and $0.2 million in other general and administrative expenses for the year ended December 31, 2019.

Pursuant to line of credit agreements entered into, primarily in 2020, between the Company, its founder, its CEO, and the CEO’s brother and certain entities controlled by these individuals, the Company borrowed and repaid $297.0 million in the first half of 2020. These borrowings and repayments are reflected in the “Borrowings under operating lines of credit” and “Repayments under operating lines of credit” line items within the financing section of the 2020 consolidated statement of cash flows. The Company also incurred approximately $1.0 million of interest expense in 2020 related to these lines of credit. As of December 31, 2020, no amount was outstanding under these line of credit agreements, as they were terminated in the second quarter of 2020.

NOTE 16– SUBSEQUENT EVENTS

UWM Business Combination

As described in Note 1, the Company completed the business combination transaction with Gores Holdings IV, Inc. on January 21, 2021, following approval by the stockholders of Gores Holdings IV, Inc. Following this transaction, the Company became an indirect consolidated subsidiary of Gores Holdings IV, Inc., which was renamed UWM Holdings Corporation, shares of which listed for trading on the New York Stock Exchange under the symbol “UWMC” on January 22, 2021.

Subsequent to December 31, 2020, the Company entered into the following additional related party transactions:

• A lease for an additional building that is part of the Company’s corporate campus, which is owned by entities controlled by the Company’s CEO. The lease agreement includes undiscounted future lease payments of approximately $38.3 million through 2035.

• The modification of the lease agreement for an aircraft owned by an entity controlled by the Company’s CEO as well as a lease for an additional aircraft owned by an entity controlled by the Company’s CEO, to facilitate travel of Company executives for business purposes. The Company will pay an agreed-upon hourly rate for its usage of these aircraft, with no fixed minimum commitments.

• Employee lease agreements, pursuant to which the Company’s team members provide certain administrative services to entities controlled by the Company’s founder and its CEO. Under these agreements, these entities will pay the Company approximately $25 thousand per month for the administrative services provided to these entities by the Company’s team members.

The Company has evaluated subsequent events through March 22, 2021, which is the date the financial statements were issued.

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EX-99.2

Exhibit 99.2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion together with (1) Part I, Item 1 “Business” of the Annual Report on Form 10-K for the year ended December 31, 2020 (our “2020 Annual Report”), (2) UWM’s audited Consolidated Financial Statements as of and for the years ended December 31, 2019 and 2020 and the related notes thereto, included in Exhibit 99.1 to the Current Report filed March 22, 2021 and (3) UWM’s audited Consolidated Financial Statements as of and for the year ended December 31, 2018 which were included in the Definitive Proxy Statement on Schedule 14A filed December 16, 2020.

The following discussion includes information regarding future financial performance and plans, targets, beliefs, expectations, and objectives of management, which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as described in further detail under “Cautionary Note Regarding Forward-Looking Statements” that is set forth in our 2020 Annual Report. Actual results may differ materially from the results discussed in the forward-looking statements because of a number of risks and uncertainties, including the matters discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements; Risk Factor Summary” in our 2020 Annual Report as well as the risks set forth under the caption “Risk Factors” included in our 2020 Annual Report. Historical trends should not be taken as indicative of future operations and financial results.

Unless the context otherwise requires, all references in this subsection to “UWM”, “we”, “us” and “our” refer to the business of United Wholesale Mortgage, LLC (f/k/a United Shore Financial Services, LLC) and its consolidated subsidiaries prior to the Business Combination, and to the Company and its consolidated subsidiaries after the Business Combination.

Overview

UWM Holdings, LLC was recently formed as a Delaware limited liability company to become the holding company for UWM upon the completion of the Business Combination. UWM Holdings, LLC has no business operations of its own. The following discussion relates to the financial condition and financial results of UWM as of and for the years ended December 31, 2020, 2019 and 2018.

We are the second largest direct residential mortgage lender and the largest wholesale mortgage lender in the United States, originating mortgage loans exclusively through the wholesale channel. With over 8,000 team members and a culture of continuous innovation of technology and enhanced client experience, we lead our market by building upon our proprietary and exclusively licensed technology platforms, superior service and focused partnership with the independent mortgage advisor community. We originate primarily conforming and government loans across all 50 states and the District of Columbia. For the last six years including the year ended December 31, 2020, we have been the largest wholesale mortgage lender in the United States by closed loan volume, with approximately 34% market share of the wholesale channel. For the year ended December 31, 2020, we originated $182.5 billion in residential mortgage loans and generated $3.38 billion of net income. For the year ended December 31, 2020, our mortgage production marked a 69% increase year-over-year, closing approximately 561,000 home loans. Our mortgage production of $182.5 billion for the year ended December 31, 2020 represented a 4.5% market share of all direct residential mortgage loans originated in the United States.

Our mortgage origination business derives revenue from originating, processing and underwriting primarily GSE-conforming mortgage loans, along with FHA, USDA and VA mortgage loans, which are subsequently pooled and sold in the secondary market. The mortgage origination process generally begins with a borrower entering into an IRLC with us pursuant to which it has committed to enter into a mortgage at specified interest rates and terms within a specified period of time, with a borrower who has applied for a loan and met certain credit and underwriting criteria. As we have committed to providing a mortgage loan at a specific interest rate, we hedge that risk by selling forward-settling mortgage-backed securities and FLSCs in the To Be Announced (TBA) market. When the mortgage loan is closed, we fund the loan with approximately 2-3% of our own funds and the remainder with funds drawn under one of our warehouse facilities. At that point, the mortgage loan is “owned” by our warehouse facility lender and is subject to our repurchase right. When we have identified a pool of mortgage loans to sell to the agencies or non-governmental entities, we repurchase such loans from our warehouse lender and sell the pool of mortgage loans into the secondary market, but retain the mortgage servicing rights, or MSRs, associated with those loans. We retain MSRs for a period of time depending on business and liquidity considerations. When we sell MSRs, we typically sell them in the bulk MSR secondary market.

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Our unique model of complete alignment with our clients and superior customer service arising from our investments in people and technology has driven demand for our services from our clients. This has resulted in significant increases in our loan origination volume and market share as our loan production income has materially exceeded our volume increases due to improved market margins. During the year ended December 31, 2020, loan origination volume increased by 69% as compared to 2019, while our loan production income increased 336% as compared to 2019. During the year ended December 31, 2019, loan origination volume increased by 159% as compared to 2018, while our loan production income increased 212% as compared to 2018. Furthermore, our mortgage loan origination business has been scalable as our investment in technology, marketing and our team members permits us to handle significant loan origination growth without a proportionate increase in overall expenses.

In May 2020, despite the COVID-19 pandemic, we introduced the Conquest program, which is designed to capitalize on our technology advantages and to highlight the UWM value model of speed, service, and competitive pricing. Conquest is available for purchases and refinances to borrowers who have not refinanced with us for a period of time. We believe that the Conquest program exemplifies how the wholesale channel provides a win-win-win scenario to borrowers, Independent Mortgage Advisors, and us, as well as our unique ability to utilize technology as a differentiator. The Conquest program offers enhanced pricing on shorter duration rate lock periods (8 to 22 days), which provides an incentive to our clients to work efficiently, utilizing our proprietary tools, so that they can offer the best combination of rate and term to borrowers.

With a maximum rate lock period of 22 days, the Conquest program also allows us to close and sell loans faster, which mitigates against hedging and interest rate risk. We further believe that this speed to close results in greater advocacy of our Independent Mortgage Advisors in the realtor community and supports the creation of additional referral business.

Components of revenue

We generate revenue from the following four components of the loan origination business: (i) loan production income, (ii) loan servicing income, (iii) gain (loss) on sale of MSRs and (iv) interest income.

Loan production income. Loan production income includes all components related to the origination and sale of mortgage loans, including:

• primary gain, which represents the premium we receive in excess of the loan principal amount adjusted for previous fair value adjustments, and certain fees charged by investors upon sale of loans into the secondary market. When the mortgage loan is sold into the secondary market, any difference between the proceeds received and the current fair value of the loan is recognized in current period earnings;

• loan origination fees we charge to originate a loan, which generally represent flat, per-loan fee amounts;

• provision for representation and warranty obligations, which represent the reserves established for our estimated liabilities associated with the potential repurchase or indemnity of purchasers of loans previously sold due to representation and warranty claims by investors. Included within these reserves are amounts for estimated liabilities for requirements to repay a portion of any premium received from investors on the sale of certain loans if such loans are repaid in their entirety within a specified time period after the sale of the loans;

• the change in fair value of IRLCs and FLSCs as well as recorded loans on the balance sheet, due to changes in estimated fair value, driven primarily by interest rates but can also be influenced by other assumptions; and

• capitalization of MSRs, representing the estimated fair value of newly originated MSRs when loans are sold and the associated servicing rights are retained.

Compensation earned by Independent Mortgage Advisors is included in the cost of the loans we originate, and therefore netted within loan production income.

Loan servicing income. Loan servicing income consists of the contractual fees earned for servicing the loans and includes ancillary revenue such as late fees and modification incentives. Loan servicing income is recorded upon collection of payments from borrowers.

Gain/loss on sale of mortgage service rights. Gain/loss on sale of MSRs represent the transactional outcome from the sales of MSRs. Periodically, we may sell MSRs in the bulk market, which is selling a portfolio package often through a bidding process, as opposed to the programmatic sale of individual rights through flow

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transactions. These amounts include the cash proceeds from the transaction offset by the recorded basis in the individual associated MSR assets (excluding any valuation allowances), transaction expenses, and accruals relating to contractual obligations incurred as a result of the transaction.

Interest income. Interest income is interest earned on mortgage loans at fair value.

Components of operating expenses

Our operating expenses include salaries, commissions and benefits, direct loan production costs, professional services, occupancy and equipment, marketing, travel and entertainment, depreciation and amortization, other general and administrative, servicing costs, amortization, impairment and pay-offs of MSRs and interest expense.

Key Factors Affecting Comparability

Interest rates

Loan origination volumes and refinance volumes in particular are impacted by interest rates. As interest rates decline, refinance volume tends to increase, while in an increasing interest rate environment, the refinancing volume tends to decrease. The volume of loan originations associated with home purchases is generally less affected by rate fluctuations and more affected by broader economic factors such as the strength and stability of the overall economy, including the unemployment level and real estate values.

The fair value of MSRs is also driven primarily by interest rates, which impact the likelihood of loan prepayments through refinancing. There has been a long-term trend of falling interest rates, with intermittent periods of rate increases. More recently, there was a rising interest rate environment for the majority of 2018 and a falling interest rate environment in 2019 and 2020. In periods of rising interest rates, the fair value of the MSRs generally increases as prepayment expectations decrease, consequently extending the estimated life of the MSRs resulting in expected increases in cash flows. In a declining interest rate environment, the fair value of MSRs generally decreases as prepayment expectations increase consequently truncating the estimated life of the MSRs resulting in expected decreases in cash flows. Because origination volumes tend to increase in declining interest rate environments and decrease in increasing rate environments, we believe that servicing partially offsets the impact that changes in interest rate environments have on our origination business.

COVID-19 pandemic

We are closely monitoring the public health response and economic impacts of COVID-19. There is significant uncertainty related to the economic outcomes from this global pandemic, including the response of the federal, state and local governments as well as regulators such as the FHFA. Despite this uncertainty, we believe we are well positioned to continue serving our clients in the same manner as they have come to expect from us.

The COVID-19 pandemic has had, and continues to have, a significant impact on the national economy and the communities in which we operate. While the pandemic’s long-term effects on the macroeconomic environment has yet to be fully determined and could continue for months or years, we expect that the pandemic and governmental programs created as a response to the pandemic, will affect the core aspects of our business, including the origination of mortgages, our servicing operations, our liquidity and our employees. Such effects, if they continue for a prolonged period, may have a material adverse effect on our business and results of operations. For additional discussion on these risks please refer to “Risk Factors—Risks Related to our Business—The COVID-19 pandemic and the actions taken by local, state and federal governments have and are expected to continue to adversely affect the national economy and the macroeconomic environment which could adversely affect our current operations and our ability to continue to grow” and “—The COVID-19 pandemic has negatively impacted financial markets, which may adversely affect our ability to continue to access sources of capital.”

Non-GAAP Financial Measures

To provide investors with information in addition to our results as determined by GAAP, we disclose Adjusted EBITDA as a non-GAAP measure, which our management believes provides useful information on performance to investors. Adjusted EBITDA is not a measurement of our financial performance under GAAP and it may not be comparable to a similarly titled measure reported by other companies. Adjusted EBITDA has limitations as an analytical tool and it should not be considered in isolation or as an alternative to revenue, net income or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity.

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We define Adjusted EBITDA as earnings before interest expense on non-funding debt, income tax, and depreciation and amortization of premises and equipment, net of the impairment or recovery of MSRs and the impact of deferred compensation. We exclude the impairment or recovery of MSRs as these represent non-cash, non-realized adjustments to our total revenues, which is not indicative of our performance or results of operations. Adjusted EBITDA includes interest expense on funding facilities, which are recorded as a component of interest expense, as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA.

We use Adjusted EBITDA to evaluate our operating performance and is one of the measures used by our management for planning and forecasting future periods. We believe the presentation of Adjusted EBITDA is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by our management and may make it easier to compare our results with other companies that have different financing and capital structures.

The following table presents a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure.

	For the year ended December 31,
Reconciliation of net income to Adjusted EBITDA:	2020		2019		2018
($ in thousands)
Net income	$	3,382,510	$	415,057	$	91,316
Interest expense on non-funding debt		28,062		16,781		8,211
Provision for income taxes		2,450		—		57
Depreciation and amortization		16,820		9,405		5,456
Impairment of MSRs(1)		19,584		20,559		—
Deferred compensation, net(2)		4,665		11,000		—
Adjusted EBITDA	$	3,454,091	$	472,802	$	105,040

(1) Reflects temporary impairments recorded as valuation allowance against the value of MSRs, and corresponding subsequent recoveries.

(2) Reflects management incentive bonuses under our long-term incentive plan that are accrued when earned net of cash payments.

Results of Operations for the Year Ended December 31, 2020 and 2019

Summary of Operations

($ in thousands)	For the year ended December 31,
	2020			2019
Revenue
Loan production income	$	4,551,415		$	1,043,483
Loan servicing income		288,304			102,288
Loss on sale of mortgage servicing rights		(62,285	)		(22,480	)
Interest income		161,160			155,129
Total revenue, net		4,938,594			1,278,420
Expenses
Salaries, commissions and benefits		552,143			372,172
Direct loan production costs		54,459			34,434
Professional services		12,115			37,785
Occupancy and equipment		58,890			40,095
Marketing, travel, and entertainment		20,278			23,433
Depreciation and amortization		16,820			9,405
Servicing costs		70,835			30,936
Amortization, impairment and pay-offs of mortgage servicing rights		573,118			137,776
Interest expense		167,036			164,131
Other general and administrative		27,940			13,196
Total expenses		1,553,634			863,363
Earnings before income taxes		3,384,960			415,057
Provision for income taxes		2,450			—
Net income	$	3,382,510		$	415,057

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Loan production income

The table below provides details of the characteristics of our loan production for each of the periods presented:

Loan Production Data: ($ in thousands)	For the year ended December 31,
	2020			2019
Loan origination volume by type
Conventional conforming	$	153,525,586		$	76,207,713
FHA/VA/USDA		27,541,347			25,563,260
Non-agency		1,480,708			5,996,199
Total loan origination volume	$	182,547,641		$	107,767,172
Portfolio metrics
Average loan amount	$	325		$	318
Weighted average loan-to-value ratio		71.01	%		78.69	%
Weighted average credit score		758			741
Weighted average note rate		3.01	%		4.04	%
Percentage of loans sold
To GSEs		99	%		93	%
To other counterparties		1	%		7	%
Servicing-retained		100	%		96	%
Servicing-released		0	%		4	%

The components of loan production income for the periods presented were as follows:

($ in thousands)	For the year ended December 31, 2020			For the year ended December 31, 2019
Primary gain (loss)	$	2,291,731		$	(277,917	)
Loan origination fees		399,996			213,673
Provision for representation and warranty obligations		(36,510	)		(19,153	)
Capitalization of MSRs		1,896,198			1,126,880
Loan production income	$	4,551,415		$	1,043,483

Loan production income was $4,551.4 million for the year ended December 31, 2020, an increase of $3,507.9 million, or 336%, as compared to $1,043.5 million for the year ended December 31, 2019. The increase in loan production income was primarily driven by $74,780.5 million or 69% increase in mortgage loan origination volume to $182,547.6 million and an increase in loan production income stemming from low interest rates.

Loan servicing income

For the periods presented, our loan servicing portfolio consisted of the following:

	As of December 31,
($ in thousands, except number of loans)	2020			2019
MSR UPB of loans serviced	$	188,268,883		$	72,589,639
Number of MSR loans serviced		606,688			234,971
Average MSR delinquency count (60+ days) as % of total		1.93	%		0.15	%
Weighted average note rate		3.13	%		3.97	%
Weighted average service fee		0.2738	%		0.2877	%

Loan servicing income was $288.3 million for the year ended December 31, 2020, an increase of $186.0 million, or 181.9%, as compared to the year ended December 31, 2019. The increase in loan servicing income was primarily driven by the growing servicing portfolio size as a result of the additional origination volume.

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Loss on sale of mortgage servicing rights

Loss on sale of MSRs was $(62.3) million for the year ended December 31, 2020, as compared to a loss of $(22.5) million for the year ended December 31, 2019. The difference was primarily driven by decreasing interest rates that adversely impacted fair values, or the amounts a buyer is willing to pay for MSRs.

Interest income

Interest income was $161.2 million for the year ended December 31, 2020, an increase of $6.1 million, or 3.9%, as compared to $155.1 million for the year ended December 31, 2019. The increase was primarily driven by increased loan production which increased our average loans balances, offset by a decline in interest rates and shorter hold period on loans produced.

Expenses

Expenses for the periods presented were as follows:

	For the year ended December 31,
	2020		2019
Salaries, commissions and benefits	$	552,143	$	372,172
Direct loan production costs		54,459		34,434
Professional services		12,115		37,785
Occupancy and equipment		58,890		40,095
Marketing, travel, and entertainment		20,278		23,433
Depreciation and amortization		16,820		9,405
Servicing costs		70,835		30,936
Amortization, impairment and pay-offs of mortgage servicing rights		573,118		137,776
Interest expense		167,036		164,131
Other general and administrative		27,940		13,196
Total expenses	$	1,553,634	$	863,363

Total expenses

Total expenses were $1,553.6 million for the year ended December 31, 2020, an increase of $690.2 million, or 79.9%, as compared to $863.4 million for the year ended December 31, 2019. The increase in expenses was primarily due to an increase in amortization, impairment and pay-offs of MSRs, as well as increased salaries, commissions and benefits due to significant increases in headcount. Amortization, impairment and pay-offs increased by $435.3 million or 316.0% due to an increase in overall size of the MSR portfolio and impairment related to MSRs.

In addition, there was an increase in salaries, commissions and benefits of $180.0 million or 48.4% in the year ended December 31, 2020 as compared to the year ended December 31, 2019, primarily resulting from an increase in headcount to support increased loan volume. Headcount increased by approximately 2,600 team members from approximately 4,900 at December 31, 2019 to approximately 7,500 at December 31, 2020. Servicing costs also increased by $39.9 million or 129.0% as compared to the year ended December 31, 2019 primarily due to the growing portfolio size as a result of the increased origination volume.

Net income

Net income was $3,382.5 million for the year ended December 31, 2020, an increase of $2,967.4 million, as compared to $415.1 million for the year ended December 31, 2019. The increase was primarily the result of the increase in loan production income of $3,507.9 million and an increase in loan servicing income of $186.0 million, partially offset by an increase in amortization, impairment and pay-offs of mortgage servicing rights of $435.3 million and an increase in salaries, compensation and benefits of $180.0 million.

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Results of Operations for the Year Ended December 31, 2019 and 2018

Summary of Operations

Statement of Operations Data: ($ in thousands)	For the year ended December 31,
	2019			2018
Revenue
Loan production income	$	1,043,483		$	334,197
Loan servicing income		102,288			82,952
(Loss) gain on sale of mortgage servicing rights		(22,480	)		91,130
Interest income		155,129			85,018
Total revenue, net	$	1,278,420		$	593,297
Expenses
Salaries, commissions and benefits	$	372,172		$	233,125
Direct loan production costs		34,434			24,817
Professional services		37,785			13,943
Occupancy and equipment		40,095			27,018
Marketing, travel, and entertainment		23,433			14,742
Depreciation and amortization of premises and equipment		9,405			5,456
Other general and administrative		13,196			21,372
Servicing costs		30,936			18,458
Amortization, impairment and pay-offs of mortgage servicing rights		137,776			57,406
Interest expense		164,131			85,587
Total expenses		863,363			501,924
Earnings before income taxes		415,057			91,373
Provision for income taxes		—			57
Net income	$	415,057		$	91,316

Loan production income

The table below provides details of the characteristics of our loan production for each of the periods presented:

Loan Production Data: ($ in thousands)	For the year ended December 31,
	2019			2018
Loan origination volume by type
Conventional conforming	$	76,207,713		$	33,062,045
FHA/VA/USDA		25,563,260			7,683,734
Non-agency		5,996,199			814,367
Total loan origination volume	$	107,767,172		$	41,560,146
Portfolio metrics
Average loan amount	$	318		$	285
Weighted average loan-to-value ratio		78.69	%		80.23	%
Weighted average credit score		741			741
Weighted average note rate		4.04	%		4.68	%
Percentage of loans sold
To GSEs		93	%		92	%
To other counterparties		7	%		8	%
Servicing-retained		96	%		92	%
Servicing-released		4	%		8	%

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The components of loan production income for the periods presented were as follows:

($ in thousands)	December 31, 2019			December 31, 2018
Primary gain (loss)	$	(277,917	)	$	(90,304	)
Loan origination fees		213,673			85,416
Provision for representation and warranty obligations		(19,153	)		(10,327	)
Capitalization of MSRs		1,126,880			349,412
Loan production income	$	1,043,483		$	334,197

Loan production income was $1,043.5 million for the year ended December 31, 2019, an increase of $709.3 million, or 212%, as compared to $334.2 million for the year ended December 31, 2018. The increase in loan production income was primarily driven by a 159% increase in mortgage loan origination volume to $107.8 billion and an increase in the market in loan margins.

Loan servicing income

For the periods presented, our loan servicing portfolio consisted of the following:

	As of December 31,
($ in thousands, except number of loans)	2019			2018
MSR UPB of loans serviced	$	72,589,639		$	42,957,005
Number of MSR loans serviced		234,971			160,401
Average MSR delinquency count (60+ days) as % of total		0.15	%		0.39	%
Weighted average note rate		3.97	%		4.56	%
Weighted average service fee		0.2877	%		0.2665	%

Loan servicing income was $102.3 million for the year ended December 31, 2019, an increase of $19.3 million, or 23%, as compared to the year ended December 31, 2018. The increase in loan servicing income was primarily driven by the growing portfolio size driven by additional origination volume.

MSR fair value declined significantly on a relative basis from December 31, 2018 to December 31, 2019 due to market interest rates declining, significantly impacting actual and expected prepayments. Our recorded valuation allowance increased from $0 to $20.6 million and reflected a change from a $62.9 million cushion (fair value exceeded recorded basis) to a $20.6 million impairment.

(Loss) gain on sale of mortgage servicing rights

Loss on sale of mortgage servicing rights was $(22.5) million for the year ended December 31, 2019, as compared to a gain on sale of mortgage servicing rights of $91.1 million for the year ended December 31, 2018. The difference was primarily driven by decreasing interest rates that adversely impacted fair values in 2019, or the amounts a buyer is willing to pay for MSRs. In 2018, interest rates were generally increasing which caused MSR sales to result in gains. In 2019, interest rates were declining, which caused MSR sales to result in losses.

Interest income

Interest income was $155.1 million for the year ended December 31, 2019, an increase of $70.1 million, or 82%, as compared to $85.0 million for the year ended December 31, 2018. The increase was primarily driven by increased loan production which increased our average loans balances.

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Expenses

Expenses for the periods presented were as follows:

	For the year ended December 31,
($ in thousands)	2019		2018
Salaries, commissions and benefits	$	372,172	$	233,125
Direct loan production costs		34,434		24,817
Professional services		37,785		13,943
Occupancy and equipment		40,095		27,018
Marketing, travel, and entertainment		23,433		14,742
Depreciation and amortization of premises and equipment		9,405		5,456
Other general and administrative		13,196		21,372
Servicing costs		30,936		18,458
Amortization, impairment and pay-offs of mortgage servicing rights		137,776		57,406
Interest expense		164,131		85,587
Total expenses	$	863,363	$	501,924

Total expenses were $863.4 million for the year ended December 31, 2019, an increase of $361.4 million, or 72%, as compared to $502.0 million for the year ended December 31, 2018. The increase in expense was primarily due to an increase in salaries, commissions and benefits of $139.0 million or 60% primarily resulting from an increase in headcount to support increased loan volume. Headcount increased by approximately 2,100 team members from approximately 2,800 at December 31, 2018 to approximately 4,900 at December 31, 2019. Interest expense increased by $78.5 million or 92% as compared to the year ended December 31, 2018 primarily due to the increase in warehouse funding balances to support our loan production. Amortization, impairment and pay-offs increased by $80.4 million or 140% due to greater actual and expected prepayments of $59.8 million and impairment of $20.6 million.

Net income

Net income was $415.1 million for the year ended December 31, 2019, an increase of $323.8 million, as compared to $91.3 million for the year ended December 31, 2018. The increase was primarily the result of an increase in loan production income of $709.3 million, an increase in loan servicing income of $19.3 million, and an increase in interest income of $70.1 million, partially offset by a decrease in gain on sale of mortgage servicing rights of $113.6 million, an increase in salaries, compensation and benefits of $139.0 million, an increase in amortization, impairment and pay-offs of mortgage servicing rights of $80.4 million, an increase in interest expense of $78.5 million, an increase in professional services of $23.8 million, an increase in occupancy and equipment expenses of $13.1 million, an increase in servicing costs of $12.5 million, and an increase in direct loan production costs of $9.6 million.

Liquidity and Capital Resources

Overview

Historically, our primary sources of liquidity have included:

• borrowings including under our warehouse facilities and other financing facilities;

• cash flow from operations, including:

• sale of loans into the secondary market;

• loan origination fees;

• servicing fee income;

• interest income on mortgage loans; and

• sales of MSRs.

Historically, our primary uses of funds have included:

• origination of loans;

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• retention of MSRs from our loan sales

• payment of interest expense;

• payment of operating expenses; and

• distributions to our member.

We are also subject to contingencies which may have a significant impact on the use of our cash.

To originate and aggregate loans for sale into the secondary market, we use our own working capital and borrow or obtain money on a short-term basis primarily through uncommitted and committed warehouse facilities that we have established with large global banks and certain agencies.

Loan Funding Facilities

Warehouse facilities

Our warehouse facilities, which are our primary loan funding facilities used to fund the origination of our mortgage loans, are primarily in the form of master repurchase agreements. Loans financed under these facilities are generally financed at approximately 97% to 98% of the principal balance of the loan, which requires us to fund the balance from cash generated from our operations. Once closed, the underlying residential mortgage loan is pledged as collateral for the borrowing or advance that was made under these loan funding facilities. In most cases, the loans we originate will remain in one of our warehouse facilities for less than one month, until the loans are pooled and sold. During the time we hold the loans pending sale, we earn interest income from the borrower on the underlying mortgage loan note. This income is partially offset by the interest and fees we have to pay under the warehouse facilities. Interest rates under the warehouse facilities are typically based on one-month LIBOR plus a spread.

When we sell a pool of loans, the proceeds we receive from the sale of the loans are used to pay back the amounts we owe on the warehouse facilities. The funds received then become available to be re-advanced to originate additional loans. We are dependent on the cash generated from the sale of loans to fund future loans and repay borrowings under our warehouse facilities. Delays or failures to sell loans in the secondary market could have an adverse effect on our liquidity position.

From a cash flow perspective, the vast majority of cash received from mortgage originations occurs at the point the loans are sold into the secondary market. The vast majority of servicing fee income relates to the retained servicing fee on the loans, where cash is received monthly over the life of the loan and is a product of the borrowers’ current unpaid principal balance multiplied by the weighted average service fee. For a given mortgage loan, servicing revenue from the retained servicing fee declines over time.

The amount of financing advanced to us under our warehouse facilities, as determined by agreed upon advance rates, may be less than the stated advance rate depending, in part, on the fair value of the mortgage loans securing the financings. Each of our warehouse facilities allows the bank extending the advances to evaluate regularly the market value of the underlying loans that are serving as collateral. If a bank determines that the value of the collateral has decreased, the bank can require us to provide additional collateral or reduce the amount outstanding with respect to the corresponding loan (e.g., initiate a margin call). Our inability to satisfy the request could result in the termination of the facility and, depending on the terms of our agreements, possibly result in a default being declared under our other warehouse facilities.

Warehouse lenders generally conduct daily evaluations of the adequacy of the underlying collateral for the warehouse loans based on the fair value the mortgage loans. As the loans are generally financed at 97% to 98% of principal balance and our loans are typically outstanding on warehouse lines for short periods (e.g., 15 days), significant increases in market interest rates would be required for us to experience margin calls from a majority of our warehouse lenders. When considering the full fair value of the loans, the required decline is even more significant. Typically, we do not receive margin calls on a majority of our warehouse lines. Four of our warehouse lines advance based on the fair value of the loans, rather than principal balance. For those lines, we exchange collateral for modest changes in value. At December 31, 2020, there were no exchanges of collateral.

The amount owed and outstanding on our warehouse facilities fluctuates based on our origination volume, the amount of time it takes us to sell the loans we originate, our cash on hand, and our ability to obtain additional financing. We reserve the right to arrange for the early payment of outstanding loans and advances from time to

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time. As we accumulate loans, a significant portion of our total warehouse facilities may be utilized to fund loans. We may from time to time use surplus cash to “buy-down” the effective advance rate of certain warehouse facilities or to prepay the repurchase price under those warehouse facilities. As of December 31, 2020, the self-warehouse amount was insignificant.

For additional information regarding our loan production by loan type and certain additional loan portfolio metrics for the years ended December 31, 2018, 2019 and 2020, see “UWM’s Management Discussion and Analysis of Financial Condition and Results of Operations” above.

The table below reflects the current line amounts of our principal warehouse facilities and the amounts advanced against those lines

Facility Type	Collateral	Line Amount as of December 31, 2020(1)	Expiration Date		Total Advanced Against Line as of December 31, 2020 (in thousands)
Master Repurchase Agreement	Mortgage Loans	$1.5 Billion		2/10/2021	$	1,344,851
Master Repurchase Agreement	Mortgage Loans	$800 Million		3/5/2021		666,891
Master Repurchase Agreement	Mortgage Loans	$200 Million		3/24/2021		86,928
Master Repurchase Agreement	Mortgage Loans	$150 Million		5/25/2021		140,237
Master Repurchase Agreement	Mortgage Loans	$400 Million		6/23/2021		287,073
Master Repurchase Agreement	Mortgage Loans	$2 Billion		7/1/2021		499,841
Master Repurchase Agreement	Mortgage Loans	$200 Million		7/7/2021		198,705
Master Repurchase Agreement	Mortgage Loans	$750 Million		9/7/2021		209,138
Master Repurchase Agreement	Mortgage Loans	$150 Million		9/19/2021		112,429
Master Repurchase Agreement	Mortgage Loans	$400 Million		9/23/2021		248,947
Master Repurchase Agreement	Mortgage Loans	$925 Million		10/29/2021		1,179
Master Repurchase Agreement	Mortgage Loans	$3 Billon		10/29/2021		1,685,138
Master Repurchase Agreement	Mortgage Loans	$250 Million		11/16/2021		249,006
Master Repurchase Agreement	Mortgage Loans	$500 Million		12/28/2021		365,577
Master Repurchase Agreement	Mortgage Loans	$1 Billon		1/10/2022		769,510
Master Repurchase Agreement	Mortgage Loans	$250 Million (ASAP+ see below)		No expiration		75,947
Master Repurchase Agreement	Mortgage Loans	$150 Million (gestation line - see below)		No expiration		—
					$	6,941,397

(1) An aggregate of $2,301.0 million of these line amounts is committed as of December 31, 2020.

Early Funding Programs

In addition to warehouse facilities, we are an approved lender for loan early funding facilities with Fannie Mae through its As Soon As Pooled Plus (“ASAP+”) program and Freddie Mac through its Early Funding (“EF”) program. As an approved lender for these early funding programs, we enter into an agreement to deliver closed and funded one-to-four family residential mortgage loans, each secured by related mortgages and deeds of trust, and receive funding in exchange for such mortgage loans in some cases before the lender has grouped them into pools to be securitized by Fannie Mae or Freddie Mac. All such mortgage loans must adhere to a set of eligibility criteria to be acceptable. As of December 31, 2020, the amount outstanding through the ASAP+ program was approximately $75.9 million and no amounts were outstanding under the EF program.

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In addition to the arrangements with Fannie Mae and Freddie Mac, we are also party to one early funding (or “gestation”) line with a financial institution. Through this arrangement, we enter into agreements to deliver certified pools consisting of mortgage loans securitized by Ginnie Mae, Fannie Mae, and/or Freddie Mac, as applicable, for the gestation line. As with the ASAP+ and EF programs, all mortgage loans under this gestation line must adhere to a set of eligibility criteria.

The gestation line has a transaction limit of $150.0 million, and it is an evergreen agreement with no stated termination or expiration date that can be terminated by either party upon written notice. As of December 31, 2020, no amount was outstanding under this line.

Lines of Credit

We are also party to an additional line of credit that provides us general working capital funding to utilize in our operations. As of December 31, 2020, the amount available on this line was $400,000 and the total amount advanced against line was $320,300. We currently have a MSR facility that has a revolving line of credit secured by the MSRs associated with mortgage loans that it owns, or that have been securitized in mortgage-backed securitization transactions guaranteed by certain agencies. Advances are limited by the value of the underlying MSRs. The interest rate for each advance on the MSR facility is based on three-month LIBOR and has a LIBOR floor of 0.5%.

Facility Type	Collateral		Maturity		Line Amount		Total Amount Advanced Against Line as of 12/31/2020
($ in thousands)
Credit Agreement		MSRs		12/31/2022	$	400,000		$320,300

Covenants

Our warehouse facilities and MSR facilities also generally require us to comply with certain operating and financial covenants and the availability of funds under these facilities is subject to, among other conditions, our continued compliance with these covenants. These financial covenants include, but are not limited to, maintaining (i) a certain minimum tangible net worth, (ii) minimum liquidity, (iii) a maximum ratio of total liabilities or total debt to tangible net worth, and (iv) pre-tax net income requirements. A breach of these covenants can result in an event of default under these facilities and as such would allow the lenders to pursue certain remedies. In addition, each of these facilities, as well as our unsecured lines of credit, includes cross default or cross acceleration provisions that could result in all facilities terminating if an event of default or acceleration of maturity occurs under any facility. We were in compliance with all covenants under these facilities as of December 31, 2020 and December 31, 2019.

Other Financing Facilities

Senior Notes

On November 3, 2020, we issued $800.0 million in aggregate principal amount of senior unsecured notes due November 15, 2025 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 5.500% per annum. Interest on the Senior Notes is due semi-annually on May 15 and November 15 of each year, beginning on May 15, 2021. We used approximately $500.0 million of the net proceeds from the offering of Senior Notes for general corporate purposes to fund future growth and distributed the remainder to SFS Corp. for tax distributions.

On or after November 15, 2022, we may, at our option, redeem the Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: November 15, 2022 at 102.750%; November 15, 2023 at 101.375%; or November 15, 2024 until maturity at 100.000%, of the principal amount of the Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest. Prior to November 15, 2022, we may, at our option, redeem up to 40% of the aggregate principal amount of the Senior Notes originally issued at a redemption price of 105.500% of the principal amount of the Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. In addition, we may, at our option, redeem the Senior Notes prior to November 15, 2022 at a price equal to 100% of the principal amount redeemed plus a “make-whole” premium, plus accrued and unpaid interest.

The indenture governing the Senior Notes contains customary terms and restrictions, subject to a number of exceptions and qualifications. The Company was in compliance with the terms of the agreement as of December 31, 2020.

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Equipment Note Payable

During 2019, the Company entered into a $30.0 million note payable, secured by equipment, with a financial institution. The note accrues interest at 5.99% per annum and matures December 2024.

In 2020, the Company entered into two additional equipment notes payable of $2.1 million and $0.9 million, respectively. The notes accrue interest at 6.1% and 4.69%, respectively, and mature on April 2023 and October 2023, respectively. As of December 31, 2020, we had $26.5 million outstanding under these three equipment finance term notes, which are primarily collateralized by computer-related hardware.

Finance Leases

As of December 31, 2020, our finance lease liabilities were $23.1 million. The Company’s financing lease agreements have remaining terms ranging from two to three years.

Cash flow data for the year ended December 31, 2020 compared to the year ended December 31, 2019

	For the year ended December 31,
($ in thousands)	2020		2019
Net cash provided by (used in) operating activities	$	56,412	$	(3,496,012	)
Net cash provided by investing activities		231,882		577,375
Net cash provided by financing activities		802,260		3,009,807
Net increase in cash and cash equivalents	$	1,090,554	$	91,170
Cash and cash equivalents at the end of the period	$	1,223,837	$	133,283

Net cash provided by (used in) operating activities

Net cash provided by operating activities was $56.4 million for the year ended December 31, 2020 compared to cash used in operating activities of $3,496.0 million for the same period in 2019. The increase in cash flows provided by operating activities was primarily driven by an increased net earnings for the period adjusted for non-cash items including a decrease in the non-cash adjustment for mortgage loans at fair value, an increase in the non-cash adjustment for capitalization of MSRs, and an increase in the non-cash adjustment for amortization and pay-offs of mortgage servicing rights.

Net cash provided by investing activities

Net cash provided by investing activities was $231.9 million for the year ended December 31, 2020 compared to $577.4 million for the same period in 2019. The decrease in cash flows provided by operating activities was primarily driven by a decrease in proceeds from the sale of MSRs, offset by an increase in purchases of premises and equipment.

Net cash provided by financing activities

Net cash provided by financing activities was $802.3 million for the year ended December 31, 2020 compared to cash provided by financing activities of $3,009.8 million for the same period in 2019. The decrease in cash flows provided by financing activities in 2020 was primarily driven by a decrease in net borrowings under warehouse and operating lines of credit, and an increase in member distributions, partially offset by the net proceeds from the issuance of the Senior Notes, and an increase in member contributions.

Balance sheet data at December 31, 2020 compared to December 31, 2019

Cash

Our cash was $1,223.8 million at December 31, 2020 compared to $133.3 million at December 31, 2019. The increase of $1,090.6 million in the cash balance was impacted by earnings for the period adjusted for non-cash items, member contributions, net proceeds from the issuance of $800 million of Senior Notes in the fourth quarter of 2020, the increase in net borrowings on funding facilities to fund the increase in mortgage loans originated, and proceeds from MSR sales. These increases were partially offset by member distributions.

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Mortgage loans at fair value

Mortgage loans at fair value were $7,916.5 million at December 31, 2020 compared to $5,446.3 million at December 31, 2019. The increase of $2,470.2 million was primarily as a result of the increase in mortgage loan production in 2020 due to the low interest rate environment throughout 2020.

Mortgage servicing rights, net

Mortgage servicing rights were $1,756.9 million at December 31, 2020 compared to $731.4 million at December 31, 2019. The increase of $1,025.5 million was primarily as a result of the increased origination volume, and consequently the sale of mortgage loans while retaining servicing rights.

Premises and equipment, net

Premises and equipment, net were $107.6 million at December 31, 2020 compared to $61.4 million at December 31, 2019. The increase of $46.2 million was primarily as a result of facilities improvements and furniture and computer equipment purchased to facilitate the growth of the company.

Other assets

Other assets were $58.0 million at December 31, 2020 compared to $14.1 million at December 31, 2019. The increase of $43.9 million was primarily as a result of increases of $34.1 million in prepaid insurance expenses.

Warehouse & Operating Lines of Credit

Warehouse lines of credit were $6,941.4 million and $5,189.6 million at December 31, 2020 and 2019, respectively. Operating lines of credit were $320.3 million and $376.0 million at December 31, 2020 and 2019, respectively. Warehouse lines of credit increased $1,751.8 million year over year, partially offset by a decrease of $55.7 million in operating lines of credit year over year. The increase in net borrowings on funding facilities was used to fund the significant increase in mortgage loans originated and held as of December 31, 2020.

Senior Notes

Senior notes increased $789.3 million year over year as a result of the $800 million principal of senior notes issued in November of 2020, net of discounts and direct issuance costs.

Accounts payable and other accrued expenses

Accounts payable and other accrued expenses were $847.8 million at December 31, 2020 compared to $283.0 million at December 31, 2019. The increase of $564.8 million was primarily as a result of an increase of $429.4 million in GNMA loans eligible for repurchase, the majority of which were impacted by the forbearance provisions of the CARES Act, and increases in accrued expenses including variable compensation associated with our growth in 2020.

Member’s equity

Member’s equity was $2,374.3 million as of December 31, 2020, an increase of $1,713.0 million, or 259.0%, as compared to $661.3 million as of December 31, 2019. The increase was primarily the result of net income of $3,382.5 million and member capital contributions of $300.0 million, partially offset by member distributions of $1,969.6 million, a portion of which related to the $449.5 million repayment of the SFS Corp. senior notes, as well as estimated member tax and other distributions.

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Contractual Obligations

The following table sets forth certain of our contractual obligations as of December 31, 2020.

			Payments Due by Period (As of December 31, 2020)
($ in thousands) Contractual Obligations	Total as of December 31, 2020		Less than 1 year		2 - 3 years		4 - 5 Years		More than 5 years
Equipment note payable	$	26,528	$	6,299	$	13,524	$	6,705	$	—
Senior notes		800,000		—		—		800,000		—
Operating lease commitments		181,187		11,493		22,589		22,421		124,684
Financing lease commitments		24,910		10,322		14,588		—		—

Repurchase and indemnification obligations

Loans sold to investors which we believe met investor and agency underwriting guidelines at the time of sale may be subject to repurchase in the event of specific default by the borrower or subsequent discovery that underwriting or documentation standards were not explicitly satisfied. We establish a reserve which is estimated based on our assessment of its contingent and non-contingent obligations, including expected losses, expected frequency, the overall potential remaining exposure, as well as an estimate for a market participant’s potential readiness to stand by to perform on such obligations.

Interest rate lock commitments, loan sale and forward commitments

In the normal course of business, we are party to financial instruments with off-balance sheet risk. These financial instruments include commitments to extend credit to borrowers at either fixed or floating interest rates. IRLCs are binding agreements to lend to a borrower at a specified interest rate within a specified period of time as long as there is no violation of conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses which may require payment of a fee. As many of the commitments expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. In addition, we have contracts to sell mortgage loans into the secondary market at specified future dates (commitments to sell loans), and forward commitments to sell MBS at specified future dates and interest rates.

Following is a summary of the notional amounts of commitments as of dates indicated:

($ in thousands)	December 31, 2020		December 31, 2019
Interest rate lock commitments—fixed rate	$	10,594,329	$	8,299,658
Interest rate lock commitments—variable rate		—		535
Commitments to sell loans		480,894		1,244,776
Forward commitments to sell mortgage-backed securities		16,121,845		9,429,904

See the notes to the UWM audited consolidated financial statements for further discussion.

Off Balance Sheet Arrangements

As of December 31, 2020, we had sold $1.2 billion of loans to a global insured depository institution and assigned the related trades to deliver the applicable loans into securities for end investors for settlement in January 2021.

New Accounting Pronouncements Not Yet Effective

See Note 1 – Organization, Basis of Presentation and Summary of Significant Accounting Policies, to the consolidated financial statements of UWM, LLC for details of recently issued accounting pronouncements and their expected impact on our consolidated financial statements.

Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business, we are subject to a variety of risks which can affect its operations and profitability. We broadly define these areas of risk as interest rate, credit and counterparty risk.

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Interest rate risk

We are subject to interest rate risk which may impact its origination volume and associated revenue, MSR valuations, IRLCs and mortgage loans at fair value valuations, and the net interest margin derived from our funding facilities. The fair value of MSRs is driven primarily by interest rates, which impact expected prepayments. In periods of rising interest rates, the fair value of the MSRs generally increases as expected prepayments decrease, consequently extending the estimated life of the MSRs resulting in expected increases in cash flows. In a declining interest rate environment, the fair value of MSRs generally decreases as expected prepayments increase consequently truncating the estimated life of the MSRs resulting in expected decreases in cash flows. Because origination volumes tend to increase in declining interest rate environments and decrease in increasing rate environments, we believe that servicing provides a natural hedge to our origination business. We do not hedge MSRs but manage the economic risk through partially offsetting impact of servicing and mortgaging originations.

MSRs generally increase as prepayment expectations decrease, consequently extending the estimated life of the MSRs resulting in expected increases in cash flows. In a declining interest rate environment, the fair value of MSRs generally decreases as prepayment expectations increase consequently truncating the estimated life of the MSRs resulting in expected decreases in cash flows.

Our IRLCs and mortgage loans at fair value are exposed to interest rate volatility. During the origination, pooling, and delivery process, this pipeline value rises and falls with changes in interest rates. To mitigate this exposure, we employ a hedge strategy designed to minimize basis risk. Basis risk in this case is the risk that the hedged instrument’s price does not move sufficiently similar to the increase or decrease in the market price of the hedged financial instrument. Because substantially all of our production is deliverable to Fannie Mae, Freddie Mac, and Ginnie Mae, we utilize forward agency or Ginnie Mae To Be Announced (“TBA”) securities as our primary hedge instrument. U.S. Treasury futures, Eurodollar futures or other non-mortgage instruments possess varying degrees of basis risk that TBAs typically do not have. By fixing the future sale price, we reduce our exposure to changes in loan values between interest rate lock and sale. Our non-agency, non-Ginnie Mae production (e.g., jumbo loans) is hedged with primarily whole loan forward commitments with our various buying counterparties. We occasionally use other instruments such as TBAs, as needed.

Interest rate risk also occurs in periods where changes in short-term interest rates result in mortgage loans being originated with terms that provide a smaller interest rate spread above the financing terms of our warehouse facilities, which can negatively impact our net interest income. This is primarily mitigated through expedited sale of our loans.

We assess our market risk based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential impact on fair values based on hypothetical changes (increases and decreases) in interest rates. Our total market risk is influenced by a wide variety of factors including market volatility and the liquidity of the markets. There are certain limitations inherent in the sensitivity analysis presented, including the necessity to conduct the analysis based on a single point in time and the inability to include the complex market reactions that normally would arise from the market shifts modeled. We used December 31, 2020 market rates on our instruments to perform the sensitivity analysis. These sensitivities are hypothetical and presented for illustrative purposes only. Changes in fair value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in fair value may not be linear. The following table summarizes the estimated change in the fair value of our mortgage loans at fair value, MSRs, IRLCs and FLSCs as of December 31, 2020 given hypothetical instantaneous parallel shifts in the yield curve. Actual results could differ materially.

	December 31, 2020
($ in thousands)	Down 25 bps			Up 25 bps
Increase (decrease) in assets
Mortgage loans at fair value	$	89,174		$	(100,032	)
MSRs		(78,261	)		66,346
IRLCs		110,467			(128,632	)
Total change in assets	$	121,380		$	(162,318	)
Increase (decrease) in liabilities
FLSCs	$	(199,079	)	$	222,457
Total change in liabilities	$	(199,079	)	$	222,457

F-39

Credit risk

We are subject to credit risk, which is the risk of default that results from a borrower’s inability or unwillingness to make contractually required mortgage payments. While our loans are sold into the secondary market without recourse, we do have repurchase and indemnification obligations to investors for breaches under our loan sale agreements. For loans that were repurchased or not sold in the secondary market, we are subject to credit risk to the extent a borrower defaults and the proceeds upon ultimate foreclosure and liquidation of the property are insufficient to cover the amount of the mortgage loan plus expenses incurred. We believe that this risk is mitigated through the implementation of stringent underwriting standards, strong fraud detection tools and technology designed to comply with applicable laws and our standards. In addition, we believe that this risk is mitigated through the quality of our loan portfolio. For the year ended December 31, 2020, our originated loans had a weighted average loan to value ratio of 71.01%, and a weighted average FICO score of 758.

Counterparty risk

We are subject to risk that arises from our financing facilities and interest rate risk hedging activities. These activities generally involve an exchange of obligations with unaffiliated banks or companies, referred to in such transactions as “counterparties.” If a counterparty were to default, we could potentially be exposed to financial loss if such counterparty were unable to meet our obligations to us. We manage this risk by selecting only counterparties that we believe to be financially strong, spreading the risk among many such counterparties, limiting singular credit exposures on the amount of unsecured credit extended to any single counterparty, and entering into netting agreements with the counterparties as appropriate.

In accordance with Treasury Market Practices Group’s recommendation, we execute Securities Industry and Financial Markets Association trading agreements with all material trading partners. Each such agreement provides for an exchange of margin money should either party’s exposure exceed a predetermined contractual limit. Such margin requirements limit our overall counterparty exposure. The master netting agreements contain a legal right to offset amounts due to and from the same counterparty. Derivative assets in the balance sheets represent derivative contracts in a gain position net of loss positions with the same counterparty and, therefore, also represent our maximum counterparty credit risk. We incurred no losses due to nonperformance by any of our counterparties during the year ended December 31, 2020 or December 31, 2019.

Also, in the case of our financing facilities, we are subject to risk if the counterparty chooses not to renew a borrowing agreement and we are unable to obtain financing to originate mortgage loans. With our financing facilities, we seek to mitigate this risk by ensuring that we have sufficient borrowing capacity with a variety of well-established counterparties to meet our funding needs.

F-40

XML

Cover	Jan. 21, 2021
Document Type	8-K/A
Document Period End Date	Jan. 21, 2021
Amendment Flag	true
Entity Registrant Name	UWM HOLDINGS CORPORATION
Entity Central Index Key	0001783398
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	DE
Entity File Number	001-39189
Entity Tax Identification Number	84-2124167
Entity Address, Address Line One	585 South Boulevard E.
Entity Address, City or Town	Pontiac
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48341
City Area Code	800
Local Phone Number	981-8898
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Amendment Description	This Amendment No. 2 on Form 8-K/A (“Amendment No. 2”) further amends the Current Report on Form 8-K of UWM Holdings Corporation, a Delaware corporation (the “Company”), filed on January 22, 2021 (the “Original Report”), in which the Company reported, among other events, the completion of the Business Combination (as defined in the Original Report). This Amendment No. 2 (i) amends the financial statements provided under Item 9.01(a) in the Original Report to include the audited financial statements of United Wholesale Mortgage, LLC, a Michigan limited liability company (f/k/a United Shore Financial Services) (“United Wholesale Mortgage”) as of and for the year ended December 31, 2020, and (ii) includes the Management’s Discussion and Analysis of Financial Condition and Results of Operations of United Wholesale Mortgage for the year ended December 31, 2020. This Amendment No. 2 does not amend any other item of the Original Report or purport to provide an update or a discussion of any developments at the Company or its subsidiaries, including United Wholesale Mortgage, subsequent to the filing date of the Original Report. The information previously reported in or filed with the Original Report is hereby incorporated by reference to this Form 8-K/A.
Common Class A [Member]
Title of 12(b) Security	Class A Common Stock
Trading Symbol	UWMC
Security Exchange Name	NYSE
Warrant [Member]
Title of 12(b) Security	Warrants
Trading Symbol	UWMCWS
Security Exchange Name	NYSE

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Assets
Cash and cash equivalents	$ 1,223,837	$ 133,283
Mortgage loans at fair value	7,916,515	5,446,310
Derivative assets	61,072	24,689
Accounts receivable, net	253,600	163,473
Mortgage servicing rights, net	1,756,864	731,353
Premises and equipment, net	107,572	61,365
Operating lease right-of-use asset, net	93,098	79,485
Finance lease right-of-use asset	22,929	0
Other assets	57,989	14,136
Total assets	11,493,476	6,654,094
Liabilities and Member's Equity
Warehouse lines of credit	6,941,397	5,189,587
Accounts payable and accrued expenses	847,745	282,995
Derivative liabilities	66,237	22,409
Equipment note payable	26,528	30,000
Operating lines of credit	320,300	376,000
Senior notes	789,323	0
Operating lease liabilities	104,534	91,780
Finance lease liability	23,132	0
Total liabilities	9,119,196	5,992,771
Member's Equity:
Membership units
Additional paid-in capital	24,839	24,839
Retained earnings	2,349,441	636,484
Total member's equity	2,374,280	661,323
Total liabilities and member's equity	$ 11,493,476	$ 6,654,094

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Related party operating lease assets	$ 92,571	$ 73,185
Related party operating lease liabilities	$ 104,006	$ 85,480
Membership units, par value	$ 0	$ 0
Membership units, Authorized	1	1
Membership units, Issued	1	1
Membership units, Outstanding	1	1

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Revenue
Loan production income	$ 4,551,415	$ 1,043,483
Loan servicing income	288,304	102,288
Loss on sale of mortgage servicing rights	(62,285)	(22,480)
Interest income	161,160	155,129
Total revenue, net	4,938,594	1,278,420
Expenses
Salaries, commissions and benefits	552,143	372,172
Direct loan production costs	54,459	34,434
Professional services	12,115	37,785
Occupancy and equipment	58,890	40,095
Marketing, travel, and entertainment	20,278	23,433
Depreciation and amortization	16,820	9,405
Servicing costs	70,835	30,936
Amortization, impairment and pay-offs of mortgage servicing rights	573,118	137,776
Interest expense	167,036	164,131
Other general and administrative	27,940	13,196
Total expenses	1,553,634	863,363
Earnings before income taxes	3,384,960	415,057
Provision for income taxes	2,450
Net income	$ 3,382,510	$ 415,057

XML

Consolidated Statements of Changes in Member's Equity - USD ($) $ in Thousands	Total	Member's Equity	Additional Paid-in Capital	Retained Earnings
Beginning Balance at Dec. 31, 2018	$ 319,051	$ 0	$ 24,839	$ 294,212
Member distributions	(72,785)	0	0	(72,785)
Net income	415,057	0	0	415,057
Ending Balance at Dec. 31, 2019	661,323	0	24,839	636,484
Member contributions	300,000	0	0	300,000
Member distributions	(1,969,553)	0	0	(1,969,553)
Net income	3,382,510	0	0	3,382,510
Ending Balance at Dec. 31, 2020	$ 2,374,280	$ 0	$ 24,839	$ 2,349,441

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 3,382,510	$ 415,057
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Loss on sale of mortgage servicing rights	62,285	22,480
Reserve for representations and warranties	36,510	19,153
Capitalization of mortgage servicing rights	(1,896,638)	(1,126,965)
Amortization and pay-offs of mortgage servicing rights	553,534	117,217
Impairment on mortgage servicing rights, net	19,584	20,559
Depreciation and amortization of premises and equipment	11,581	9,405
Senior notes issuance cost amortization	353
Amortization of finance lease right-of-use assets	5,238	2,520
(Increase) decrease in:
Mortgage loans at fair value	(2,470,205)	(2,928,550)
Accounts receivable, net	(138,059)	(4,907)
Derivative assets	(36,384)	(7,094)
Other assets	(43,853)	(9,051)
Increase (decrease) in:
Accounts payable and accrued expenses	526,128	(19,291)
Derivative liabilities	43,828	(6,545)
Net cash provided by (used in) operating activities	56,412	(3,496,012)
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of premises and equipment	(57,288)	(16,775)
Proceeds from sale of mortgage servicing rights	289,170	594,150
Net cash provided by investing activities	231,882	577,375
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings under warehouse lines of credit	1,751,810	2,836,688
Repayments of finance lease liabilities	(5,049)
Payments for deferred offering costs	(4,745)
Borrowings under equipment notes payable	2,165	30,000
Repayments under equipment notes payable	(5,637)
Borrowings under operating lines of credit	412,295	798,321
Repayments under operating lines of credit	(467,995)	(582,417)
Proceeds from issuance of senior notes	800,000
Discount and direct issuance costs on senior notes	(11,030)
Member contributions	300,000
Member distributions	(1,969,554)	(72,785)
Net cash provided by financing activities	802,260	3,009,807
INCREASE IN CASH AND CASH EQUIVALENTS	1,090,554	91,170
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR	133,283	42,113
CASH AND CASH EQUIVALENTS, END OF YEAR	1,223,837	133,283
SUPPLEMENTAL INFORMATION
Cash paid for interest	$ 161,803	$ 157,813

XML

Organization, Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Organization, Basis of Presentation and Summary of Significant Accounting Policies

NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

United Wholesale Mortgage, LLC (f/k/a United Shore Financial Services, LLC) (the “Company”) was organized under the laws of the State of Michigan. United Shore Financial Services, LLC, the Company’s predecessor, was incorporated on July 16, 1986, primarily doing business as United Wholesale Mortgage. The Company engages in the origination, sale and servicing of residential mortgage loans. The Company is based in Michigan but originates and services loans throughout the United States. The Company is approved as a Title II, non-supervised direct endorsement mortgagee with the United States Department of Housing and Urban Development (or “HUD”). In addition, the Company is an approved issuer with the Government National Mortgage Association (or “Ginnie Mae”), as well as an approved seller and servicer with the Federal National Mortgage Association (or “Fannie Mae”) and Federal Home Loan Mortgage Corporation (or “Freddie Mac”).

On September 15, 2020, the Company amended and restated its operating agreement to reflect SFS Holding Corp. as the sole member of the Company with one unit authorized, issued and outstanding. Historical unit amounts have been retrospectively adjusted to give effect to this change from 80,000 units authorized, issued and outstanding to the single unit.    

On September 22, 2020, the Company and Gores Holdings IV, Inc., a special purpose acquisition company sponsored by an affiliate of The Gores Group, LLC, entered into a definitive agreement with respect to a business combination, which was consummated on January 21, 2021. Upon completion of the proposed transaction, the Company’s current owner retained an approximate 94% economic ownership interest of the Company, and the Company became a consolidated subsidiary of UWM Holdings Corporation (f/k/a Gores Holdings IV, Inc.). Class A common stock of UWM Holdings Corporation was listed on the New York Stock Exchange (“NYSE”) under the new ticker symbol “UWMC” on January 22, 2021. Refer to the subsequent events footnote for further discussion.

On January 21, 2021, SFS contributed all of its equity interest in the Company to UWM Holdings, LLC (a wholly-owned subsidiary of SFS) and adopted the Second Amended and Restated Operating Agreement to reflect that UWM Holdings, LLC as its sole member and its manager. Upon completion of the proposed transaction, (i) UWM Holdings, LLC issued approximately 6% of its units to UWM Holdings Corporation, (ii) SFS retained approximate 94% of its units in UWM Holdings LLC and SFS retained approximately 94% of the economic ownership interest of the combined company and (iii) the Company became a consolidated subsidiary of UWM Holdings Corporation (f/k/a Gores Holdings IV, Inc.). Class A common stock of UWM Holdings Corporation was listed on the New York Stock Exchange (under the new ticker symbol “UWMC”) on January 22, 2021. Refer to the subsequent events footnote for further discussion.

Basis of Presentation

The consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (or “GAAP”).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. As of December 31, 2020 and 2019, the Company had two subsidiaries both of which were special purpose entities that were formed and operate solely in connection with securitized warehouse facilities used by the Company in its operations. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The most sensitive accounting estimates affecting the consolidated financial statements are the valuations of mortgage loans at fair value, mortgage servicing rights (or “MSRs”), derivative assets and liabilities, and the measurement of the representations and warranties reserve.

Operating Segments

The Company operates as one segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (or “CODM”), which is the Company’s chief executive officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information on a consolidated basis.

Cash and Cash Equivalents

The Company considers cash and temporary investments with original maturities of three months or less to be cash and cash equivalents. The Company typically maintains cash balances in financial institutions in excess of Federal Deposit Insurance Corporation limits. The Company evaluates the creditworthiness of these financial institutions in determining the risk associated with these balances.

Mortgage Loans at Fair Value and Revenue Recognition

Mortgage loans are recorded at estimated fair value. Fair value of mortgage loans is estimated using observable market information including pricing from current cash commitments from government sponsored enterprises, recent market commitment prices, or broker quotes, as if the loans were to be sold currently into the secondary market.

A majority of the revenues from mortgage loan originations are recognized when the loan is originated which is the primary revenue recognition event as the loans are recorded at fair value upon origination. Loan origination fees are recognized as income at the time the loans are originated. Interest income is accrued at the contractual rate, unless collectability is uncertain. Loan production income also includes the unrealized gains and losses associated with the changes in the fair value of mortgage loans at fair value, the realized and unrealized gains and losses from derivative assets and liabilities and the capitalization of MSRs.

Loans are considered to be sold when the Company surrenders control over the financial assets. Control is considered to have been surrendered when the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; the purchaser obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets; and the Company does not maintain effective control over the transferred assets through an agreement that entitles or obligates the Company to repurchase or redeem the transferred assets before their maturity. The Company typically considers the above criteria to have been met when transferring title to another party where no substantive repurchase rights or obligations exist.

Derivatives

Derivatives are recognized as assets or liabilities on the consolidated balance sheets and measured at fair value with changes in fair value recorded within the consolidated statements of operations in the period in which they occur. The Company enters into derivative instruments to reduce its risk exposure to fluctuations in interest rates. The Company accounts for derivative instruments as free-standing derivative instruments and does not designate any for hedge accounting. Interest rate lock commitments (or “IRLCs”) on mortgage loans to be originated or purchased which are intended to be sold are considered to be derivatives with changes in fair value recorded in the consolidated statements of operations as part of loan production income. Fair value is estimated primarily based on relative changes in interest rates for the underlying mortgages to be originated or purchased. Fair value estimates also take into account the probability that loan commitments may not be exercised by customers. The Company uses forward mortgage backed security contracts, which are known as forward loan sale commitments (or “FLSCs”), to economically hedge the IRLCs. Refer to Note 3 – Derivatives for further details.

Mortgage Servicing Rights and Revenue Recognition - Sale of MSRs

MSRs are initially recorded at estimated fair value. To determine the fair value of the servicing right created, the Company uses third party estimates of fair value at the time of initial recognition. Subsequent fair value (measured for subsequent impairment purposes) is estimated with the assistance of an third party broker based upon a valuation model that calculates the estimated present value of future cash flows. The valuation model incorporates market estimates of the estimated market prepayment speeds, discount rate, cost to service, float value, ancillary income, inflation, and delinquency and default rates.

MSRs are amortized in proportion to the estimated future net servicing revenue. MSRs are periodically evaluated for impairment. For this purpose, the Company stratifies its MSRs based on interest rate. Changes in the estimates used to value MSRs could materially change the estimated fair value and any valuation allowances required. Management records a valuation allowance when the fair value of the mortgage servicing asset strata is less than its amortized book value. Valuation allowances are recorded as a temporary impairment to the affected strata effectively reducing recorded MSRs and incurring a charge to operations. Valuation recoveries are recorded in subsequent periods. When a mortgage prepays, the Company permanently reduces the associated MSR in the period of prepayment with a charge to operations.

Sales of MSRs are recognized when the risks and rewards of ownership have been transferred to a buyer, and a substantive non-refundable down payment is received. Also, any risks retained by the Company must be reasonably quantifiable to be eligible for sale accounting.

Premises and equipment, net

Premises and equipment is recorded at cost and depreciated or amortized using the straight line method over the estimated useful lives of the assets. The following is a summary of premises and equipment, net at December 31 (in thousands):

	Useful lives (years)	2020			2019
Furniture and equipment	3-10	$	24,325		$	17,976
Computer software	1-3		3,644			1,480
Leasehold improvements	(a)		104,074			50,633
Construction in process			1,249			5,415
Accumulated depreciation and amortization			(25,720	)		(14,139	)
Premises and equipment, net		$	107,572		$	61,365

(a) Amortized over the shorter of the related lease term or the estimated useful life of the assets.

Leases

The Company enters into contracts to lease real estate, furniture and fixtures, and information technology equipment. Leases that meet one of the finance lease criteria are classified as finance leases, while all others are classified as operating leases. The Company determines if an arrangement is a lease at inception and has made on accounting policy election to capitalize leases with initial terms in excess of 12 months. At lease commencement, a lease liability and right-of-use asset are calculated and recognized for operating and finance leases. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease and lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term. The lease term used in the calculation includes any options to extend that the Company is reasonably certain to exercise. The lease liability is equal to the present value of future lease payments. The right-of-use asset is equal to the lease liability, plus any initial direct costs and prepaid lease payments, less any lease incentives received. Operating and finance lease right-of-use assets and liabilities are recorded separately on the consolidated balance sheets. In determining the present value of future lease payments, the Company uses estimated incremental borrowing rates based on information available at the lease commencement date when an implicit rate is not readily determinable for a given lease. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company uses an incremental borrowing rate estimated by referencing the Company’s collateralized borrowings.

The Company’s leases do not contain any material residual value guarantees or material restrictive covenants. The Company’s lease agreements include both lease and non-lease components which are generally accounted for as a single component to the extent that the costs are fixed. If the non-lease components are not fixed, the costs are treated as variable lease costs. Subsequent to lease commencement, lease liabilities recorded for finance leases are measured using the effective interest method and the related right-of-use assets are amortized on a straight-line basis over the lease term. For finance leases, interest expense and amortization expense are recorded separately in the consolidated statements of operations in interest expense and depreciation and amortization, respectively. For operating leases, total lease cost is comprised of lease expense and variable lease cost. Lease expense includes lease payments, which are recognized on a straight-line basis over the lease term. Variable lease cost includes common area maintenance charges, real estate taxes, insurance and other expenses, where applicable, which are expensed as incurred. Total lease cost for operating leases is recorded in occupancy and equipment expense on the consolidated statements of operations. See “Note 6 - Leases” for further information.

Representations and Warranties Reserve

Loans sold to investors which the Company believes met investor and agency underwriting guidelines at the time of sale may be subject to repurchase in the event of specific default by the borrower or subsequent discovery that underwriting or documentation standards were not explicitly satisfied. The Company may, upon mutual agreement, indemnify the investor against future losses on such loans or be subject to other guaranty requirements and subject to loss. The Company initially records its exposure under such guarantees at estimated fair value upon the sale of the related loan, within accounts payable and accrued expenses, as well as within loan production income, and continues to evaluate its on-going exposures in subsequent periods. The reserve is estimated based on the Company’s assessment of its contingent and non-contingent obligations, including expected losses, expected frequency, the overall potential remaining exposure, as well as an estimate for a market participant’s potential readiness to stand by to perform on such obligations. The Company repurchased $53.1 million and $31.1 million of loans during the years ended December 31, 2020 and 2019, respectively, related to the representations and warranties provisions.

The activity of the representations and warranties reserve was as follows (in thousands):

	December 31,
	2020			2019
Balance, beginning of period	$	46,322		$	32,999
Reserve charged to operations		36,510			19,153
Losses realized, net		(13,290	)		(5,830	)
Balance, end of period	$	69,542		$	46,322

Loans Eligible for Repurchase from Ginnie Mae

When the Company has the unilateral right to repurchase Ginnie Mae pool loans it has previously sold (generally loans that are more than 90 days past due) and the call option results in a more than trivial benefit to the Company, the previously sold assets are required to be re-recognized on the consolidated balance sheets. The recognition of previously sold loans does not impact the accounting for the previously recognized MSRs. At December 31, 2020 and December 31, 2019, the Company had recorded such Ginnie Mae pool loans in mortgage loans at fair value totaling $451.1 million and $21.7 million, respectively, with related purchase liabilities equal to the gross amount of the loan recorded in accounts payable and accrued expenses. At December 31, 2020 and December 31, 2019, the fair values of the Ginnie Mae pool loans were $448.5 million and $18.4 million, respectively.

Loan Origination Fees and Expenses

Loan origination fees represent revenue earned from loan production and are included in loan production income on the consolidated statements of operations. Loan origination fees generally

represent flat, per-loan fee amounts and are recognized as revenue at the time the loans are originated. Loan origination expenses are charged to operations as incurred and are included in direct loan production costs on the consolidated statements of operations.

Loan Servicing Income

Loan servicing income represents revenue earned for servicing loans for various investors. The loan servicing income is based on a contractual percentage of the outstanding principal balance and is recognized into revenue as the related mortgage payments are received by the Company’s subservicer. Loan servicing expenses are charged to operations as incurred.

Servicing Advances

Servicing advances represent advances on behalf of customers and investors to cover delinquent balances for property taxes, insurance premiums and other out-of-pocket costs. Advances are made in accordance with the servicing agreements and are recoverable upon liquidation. The Company periodically evaluates the advances for collectability and amounts are written-off when they are deemed uncollectible. Management has determined that certain amounts are not fully collectible and has recorded an allowance for expected credit losses of approximately $264 thousand and $125 thousand at December 31, 2020 and 2019, respectively. Servicing advances are included in accounts receivable, net on the consolidated balance sheets.

Interest Income

Interest income on mortgage loans at fair value is accrued based upon the principal amount outstanding and contractual interest rates. Income recognition is discontinued when loans become 90 days delinquent or when, in management’s opinion, the collectability of principal and interest becomes doubtful and the specific loan is put on nonaccrual status.

Advertising and Marketing

Advertising and marketing is expensed as incurred and amounted to $7.9 million and $5.6 million for the years ended December 31, 2020 and 2019, respectively, and is included in marketing, travel, and entertainment expenses on the consolidated statements of operations.

Escrow and Fiduciary Funds

The Company maintains segregated bank accounts in trust for investors and escrow balances for mortgagors. The balances of these accounts amounted to $955.2 million and $374.3 million at December 31, 2020 and 2019, respectively, and are excluded from the consolidated balance sheets.

Income Taxes

The Company has elected to be taxed as a partnership for income tax purposes. Accordingly, taxable income or loss of the Company is reported on the income tax returns of the member and no provision for federal income taxes has been recorded in the accompanying consolidated financial statements. The Company is subject to certain state income taxes which are included on the consolidated statements of operations.

Contingencies

The Company evaluates contingencies based on information currently available and establishes an accrual for those matters when a loss contingency is considered probable and the related amount is reasonably estimable. For matters where a loss is believed to be reasonably possible but not probable, no accrual is established by the nature of the loss contingency and an estimate of the reasonably possible range of loss in excess of amount accrued, when such estimate can be made, is disclosed. In deriving an estimate, the Company is required to make assumptions about matters that are, by their nature, highly uncertain. The assessment of loss contingencies involves the use of critical estimates, assumptions and judgments. It is not possible to predict or determine the outcome of all loss contingences. Accruals are periodically reviewed and may be adjusted as circumstances change.

Risks and Uncertainties

The Company encounters certain economic and regulatory risks inherent in the consumer finance business. Economic risks include interest rate risk and credit risks. The Company is subject to interest rate risk to the extent that in a rising interest rate environment, the Company may experience a decrease in loan production, as well as decreases in the value of mortgage loans at fair value and in commitments to originate loans, which may negatively impact the Company’s operations. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which mortgage loans are being held at fair value or subsequently under any representation and warranty provisions within the Company’s sale agreements. The Company is subject to substantial regulation as it directly provides financing to consumers acquiring residential real estate.

The Company sells loans to investors without specific recourse. As such, the investors have assumed the risk of loss of default by the borrower. However, the Company is usually required by these investors to make certain standard representations and warranties relating to credit information, loan documentation and collateral. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these investors for any losses from borrower defaults. In addition, if loans pay-off within a specified time frame, the Company may be required to refund a portion of the sales proceeds to the investors.

Reclassifications

Some reclassifications have been made to prior year balances to conform to the current year financial statement presentation.

Related Party Transactions

The Company enters into various transactions with related parties. See “Note 15 – Related Party Transactions” for additional information.

Recently Adopted Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which was subsequently amended by ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, which was issued in January 2021. This guidance provides practical expedients to address existing guidance on contract modifications due to the expected market transition from the London Inter-bank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The ASU was effective upon issuance on a prospective basis beginning January 1, 2020 and the Company may elect certain practical expedients as reference rate activities occur. The Company will evaluate its debt and other applicable contracts that are modified in the future to ensure they are eligible for modification relief and apply the practical expedients as needed.

In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (or “ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics to increase stakeholder awareness and make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The Company adopted ASU 2020-03 upon issuance, with no material effect on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. The amendments to Topic 740 include the removal of certain exceptions to the general principles of ASC 740 in such areas as intraperiod tax allocation, year to date losses in interim periods and deferred tax liabilities related to outside basis differences. Amendments also include simplification in other areas such as interim recognition of enactment of tax laws or rate changes and accounting for a franchise tax (or similar tax) that is partially based on income. The guidance further clarifies that single-member limited liability companies and similar disregarded entities that are not subject to income tax are not required to recognize an allocation of consolidated income tax expense in their separate financial statements, but they could elect to do so. This ASU is effective for public business entities for fiscal years and interim periods beginning after December 15, 2020, with early adoption permitted. The adoption of this guidance on January 1, 2020 did not have a significant effect on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which removes, modifies or adds certain disclosure requirements for fair value measurements. The guidance was effective January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which amends the guidance for recognizing credit losses on financial instruments measured at amortized cost including receivables. The ASU requires measurement and recognition of expected versus incurred credit losses using a lifetime credit loss measurement approach. Substantially all of the Company’s financial assets are measured at fair value and are therefore not subject to the guidance; however, the Company determined that certain receivables are within the scope of the ASU. The expected credit-related losses of the Company’s receivables are immaterial based on historical experience and due to the short-term nature of the assets. Servicing advances are generally expected to be fully reimbursed under the terms of the servicing agreements. The guidance was effective January 1, 2020. The adoption of this guidance, including the subsequent amendments to the initial guidance, ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2019-11, did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, which is intended to clarify or correct the unintended application of the Codification of accounting guidance for a wide variety of topics. The adoption of this ASU will be required effective January 1, 2021. Early adoption is allowed. The adoption of this guidance will not have a material impact on the consolidated financial statements and related disclosures.

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Mortgage Loans at Fair Value

12 Months Ended

Dec. 31, 2020

Text Block [Abstract]

Mortgage Loans at Fair Value

NOTE 2 – MORTGAGE LOANS AT FAIR VALUE

The table below includes the estimated fair value and unpaid principal balance (“UPB”) of mortgage loans held for sale that have contractual principal amounts and for which the Company has elected the fair value option. The fair value option has been elected for mortgage loans, as this accounting treatment best reflects the economic consequences of the Company’s mortgage origination and related hedging and risk management activities. The difference between the UPB and estimated fair value is made up of the premiums paid on mortgage loans, as well as the fair value adjustment as of the balance sheet date. The change in fair value adjustment is recorded in the “Loan production income” line item of the consolidated statement of operations.

(In thousands)	December 31, 2020		December 31, 2019
Mortgage loans, unpaid principal balance	$	7,620,014	$	5,309,394
Premiums paid on mortgage loans		101,949		88,913
Fair value adjustment		194,552		48,003
Mortgage loans at fair value	$	7,916,515	$	5,446,310

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Derivatives

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

NOTE 3 – DERIVATIVES

The Company enters into interest rate lock commitments (“IRLCs”) to originate residential mortgage loans, at specified interest rates and terms within a specified period of time, with customers who have applied for a loan and may meet certain credit and underwriting criteria. To determine the fair value of the IRLCs, each contract is evaluated based upon its stage in the application, approval and origination process for its likelihood of consummating the transaction (or “pullthrough”). Pullthrough is estimated based on changes in market conditions, loan stage, and actual borrower behavior using a historical analysis of IRLC closing rates. Generally, the further into the process the more likely the IRLC is to become a loan. The blended average pullthrough rate was 92% and 81%, as of December 31, 2020 and 2019, respectively. The Company uses forward mortgage backed security contracts, which are known as forward loan sale commitments (or “FLSCs”), to economically hedge the IRLCs.

The following summarizes derivative instruments (in thousands):

	December 31, 2020						December 31, 2019
	Fair Value			Notional Amount			Fair Value			Notional Amount
IRLCs, net	$	59,579		$	10,594,329	(a)	$	16,786		$	6,727,739	(a)
FLSCs, net		(64,743	)		16,602,739			(14,506	)		10,674,680
Total	$	(5,164	)				$	2,280

(a) Adjusted for pullthrough rates of 92% and 81%, respectively.

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Accounts Receivable, Net

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Accounts Receivable, Net

NOTE 4 – ACCOUNTS RECEIVABLE, NET

The following summarizes accounts receivable, net at December 31 (in thousands):

	December 31, 2020
	2020			2019
Investor receivables	$	100,478		$	104,303
Servicing advances		60,053			9,004
Servicing fees		55,838			23,113
Due from title companies		33,663			16,729
Warehouse - after deadline funding		3,642			4,020
Pair-offs receivable		438			6,317
Receivable - related party		28			245
Allowance for doubtful accounts		(540	)		(258	)
Total Accounts Receivable, Net	$	253,600		$	163,473

The Company periodically evaluates the carrying value of accounts receivable balances with delinquent receivables being written-off based on specific credit evaluations and circumstances of the debtor.

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Mortgage Servicing Rights, Net

12 Months Ended

Dec. 31, 2020

Transfers and Servicing [Abstract]

Mortgage Servicing Rights, Net

NOTE 5 – MORTGAGE SERVICING RIGHTS, NET

The following summarizes the activity of MSRs (in thousands):

	For the year ended December 31,
	2020			2019
Balance, beginning of period	$	731,353		$	368,117
Additions		1,896,638			1,126,965
Amortization		(252,421	)		(80,280	)
Loans paid in full		(301,113	)		(36,937	)
Sales		(298,009	)		(625,953	)
Impairment		(19,584	)		(20,559	)
Balance, end of period	$	1,756,864		$	731,353

The unpaid principal balance of mortgage loans serviced approximated $188.3 billion and $72.6 billion at December 31, 2020 and 2019, respectively. Conforming conventional loans serviced by the Company have previously been sold to Fannie Mae and Freddie Mac on a non-recourse basis, whereby foreclosure losses are generally the responsibility of Fannie Mae and Freddie Mac, and not the Company. Loans serviced for Ginnie Mae are insured by the FHA, guaranteed by the VA, or insured by other applicable government programs. While the above guarantees and insurance are the responsibility of those parties, the Company is still subject to potential losses related to its servicing of these loans. Those estimated losses are incorporated into the valuation of MSRs.

The key unobservable inputs used in determining the fair value of the Company’s MSRs were as follows at December 31, 2020 and 2019, respectively:

	December 31,			December 31,
	2020			2019
Discount rates		9.0% - 14.5	%		9.0% - 14.5	%
Annual prepayment speeds		8.8% - 42.2	%		8.2% - 30.8	%
Cost of servicing		$75 - $126			$90 - $138

The Company views these unobservable inputs as the most critical in assessing the fair value of its MSRs, which had an estimated fair value of approximately $1.76 billion and $744 million at December 31, 2020 and 2019, respectively.

The hypothetical effect of an adverse change in these key assumptions would result in a decrease in fair values as follows at December 31, 2020 and 2019, respectively, (in thousands):

	December 31,			December 31,
	2020			2019
Discount rate:
+ 10% adverse change – effect on value	$	(56,889	)	$	(25,580	)
+ 20% adverse change – effect on value	$	(110,040	)	$	(49,396	)
Prepayment speeds:
+ 10% adverse change – effect on value	$	(87,752	)	$	(34,208	)
+ 20% adverse change – effect on value	$	(169,230	)	$	(65,744	)
Cost of servicing:
+ 10% adverse change – effect on value	$	(21,643	)	$	(8,879	)
+ 20% adverse change – effect on value	$	(43,285	)	$	(17,759	)

These sensitivities are hypothetical and should be used with caution. As the table demonstrates, the Company’s methodology for estimating the fair value of MSRs is highly sensitive to changes in assumptions. For example, actual prepayment experience may differ and any difference may have a material effect on MSR fair value. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in this table, the effect of a variation in a particular assumption of the fair value of the MSRs is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may indicate higher prepayments; however, this may be partially offset by lower prepayments due to other factors such as a borrower’s diminished opportunity to refinance), which may magnify or counteract the sensitivities. Thus, any measurement of MSR fair value is limited by the conditions existing and assumptions made as of a particular point in time. Those assumptions may not be appropriate if they are applied to a different point in time.

The following table summarizes the Company’s estimated future MSR amortization expense (in thousands) based upon the existing MSR asset. These estimates are based on existing asset balances, the current interest rate environment, and prepayment speeds as of December 31, 2020. The actual amortization expense the Company recognizes in any given period may be significantly different depending upon retention or sale activities, changes in interest rates, prepayment speeds, market conditions, or circumstances that indicate the carrying amount of an asset may not be recoverable.

Year ending December 31,	Amounts
2021	$	293,647
2022		249,591
2023		211,575
2024		179,066
2025		151,176
Thereafter		691,393
Total	$	1,776,448

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Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

NOTE 6 – LEASES

Lease Right-of-Use Assets and Liabilities

The Company has operating and finance lease arrangements related to its facilities, furniture and fixtures, and information technology equipment. A substantial portion of the Company’s operating lease arrangements are with related party entities. See “Note 15 - Related Party Transactions” for further information.

Finance lease right-of-use assets were $22.9 million and $0.0 million at December 31, 2020 and 2019 respectively. Finance lease liabilities were $23.1 million and $0.0 million at December 31, 2020 and 2019, respectively. The Company’s financing lease agreements have remaining terms ranging from two to three years. For the year ended December 31, 2020, total interest expense and amortization expense under finance leases amounted to $0.8 million and $5.2 million, respectively.

Operating lease right-of-use assets were $93.1 million, including $92.6 million with related parties, and $79.5 million, including $73.2 million with related parties, at December 31, 2020 and 2019, respectively. Operating lease liabilities were $104.5 million, including $104.0 million with related parties, and $91.8 million, including $85.5 million with related parties, at December 31, 2020 and 2019, respectively. The Company’s operating lease agreements have remaining terms ranging from 2 years to 17 years. Certain lease agreements have renewal options. Total lease expense under all operating leases amounted to $10.9 million and $9.5 million for the years ended December 31, 2020 and 2019, respectively. Lease expense for related party leases was $10.6 million and $8.6 million for years ended December 31, 2020 and 2019, respectively. Variable lease expense amounted to $0.6 million and $0.0 million for the years ended December 31, 2020 and 2019, respectively.

Supplemental cash flow information related to leases is as follows (in thousands):

	December 31, 2020		December 31, 2019
Cash paid for the amounts included in the measurement of leases liabilities – operating	$	12,551	$	8,000
Cash paid for amounts included in the measurement of lease liabilities - financing	$	5,049	$	—
Operating lease right-of-use assets obtained in exchange for operating leases liabilities1	$	27,630	$	82,300
Financing lease right-of-use assets obtained in exchange for finance lease liabilities	$	20,120	$	—

1  Of the $82.3 million obtained as of December 31, 2019, $76.0 million is related to the adoption of ASU 2016-02.

Additional supplemental information related to leases was as follows:

	December 31, 2020			December 31, 2019
Weighted average remaining lease term – operating leases		15.9 years			16 years
Weighted average remaining lease term – finance leases		2.4 years			—
Weighted average discount rate – operating leases		7.8	%		6	%
Weighted average discount rate – finance leases		6.2	%		—

The maturities of the Company’s operating lease liabilities are summarized below (in thousands):

December 31, 2020	Amounts
2021	$	11,493
2022		11,414
2023		11,175
2024		11,175
2025		11,246
Thereafter		124,684
Total lease payments		181,187
Less imputed interest		(76,653	)
Total	$	104,534

The maturities of the Company’s financing lease liabilities are summarized below (in thousands):

December 31, 2020	Amounts
2021	$	10,322
2022		10,083
2023		4,505
Total lease payments		24,910
Less imputed interest		(1,778	)
Total	$	23,132

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Lines of Credit

12 Months Ended

Dec. 31, 2020

Lines of Credit

NOTE 7 – LINES OF CREDIT

The Company had the following lines of credit with financial institutions at December 31, 2020 and 2019, respectively, (in thousands):

	December 31, 2020		December 31, 2019
$400 million line of credit agreement expiring December 31, 2022. Interest at variable rates based on a spread to the one month LIBOR rate. Line is collateralized by $989.5 million of MSRs (based on estimated fair value as of December 31, 2020).	$	320,300	$	251,000
$125 million line of credit agreement expired on September 14, 2020. Interest at variable rates based on a spread to the one month LIBOR rate. This line was closed during 2020.		—		125,000
	$	320,300	$	376,000

Warehouse Line of Credit

Lines of Credit

NOTE 8 – WAREHOUSE LINES OF CREDIT

The Company had the following warehouse lines of credit with financial institutions as of December 31, 2020 and 2019, respectively, (in thousands):

As of December 31, 2020 Warehouse Lines of Credit	Expiration Date		December 31, 2020		December 31, 2019
$1.5 Billion		2/10/2021	$	1,344,851	$	510,954
$800 Million		3/5/2021		666,891		314,728
$200 Million		3/24/2021		86,928		150,229
$150 Million		5/25/2021		140,237		133,196
$400 Million		6/23/2021		287,073		436,437
$2 Billion		7/1/2021		499,841		800,764
$200 Million		7/7/2021		198,705		156,632
$750 Million		9/7/2021		209,138		—
$150 Million		9/19/2021		112,429		106,256
$400 Million		9/23/2021		248,947		240,620
$925 Million		10/29/2021		1,179		—
$3 Billion		10/29/2021		1,685,138		1,384,903
$250 Million		11/16/2021		249,006		355,540
$500 Million		12/28/2021		365,577		—
$1 Billion		1/10/2022		769,510		513,645
$250 Million (ASAP + - see below)		No expiration		75,947		85,683
$150 Million (gestation line - see below)		No expiration		—		—
All interest rates are variable based on a spread to the one-month LIBOR rate.			$	6,941,397	$	5,189,587

In addition to warehouse facilities, we are an approved lender for loan early funding facilities with Fannie Mae through its As Soon As Pooled Plus (“ASAP+”) program and Freddie Mac through its Early Funding (“EF”) program. As an approved lender for these early funding programs, we enter into an agreement to deliver closed and funded one-to-four family residential mortgage loans, each secured by related mortgages and deeds of trust, and receive funding in exchange for such mortgage loans in some cases before the lender has grouped them into pools to be securitized by Fannie Mae or Freddie Mac. All such mortgage loans must adhere to a set of eligibility criteria to be acceptable. As of December 31, 2020, the amount outstanding through the ASAP+ program was approximately $75.9 million and no amounts were outstanding under the EF program.

In addition to the arrangements with Fannie Mae and Freddie Mac, we are also party to one early funding (or “gestation”) lines with a financial institution. Through this arrangement, we enter into agreements to deliver certified pools consisting of mortgage loans securitized by Ginnie Mae, Fannie Mae, and/or Freddie Mac, as applicable, for the gestation line. As with the ASAP+ and EF programs, all mortgage loans under this gestation line must adhere to a set of eligibility criteria.

The gestation line has a transaction limit of $150.0 million, and it is an evergreen agreement with no stated termination or expiration date that can be terminated by either party upon written notice. As of December 31, 2020, no amount was outstanding under this line.

As of December 31, 2020, the Company had pledged mortgage loans at fair value as collateral under the above warehouse lines of credit. The above agreements also contain covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquidity, maximum debt to net worth ratio, net income, and limitations on additional debt, as defined in the agreements. The Company was in compliance with all debt covenants as of December 31, 2020.

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Senior Notes

12 Months Ended

Dec. 31, 2020

Senior Notes [Member]

Senior Notes

NOTE 9 – SENIOR NOTES

On November 3, 2020, the Company issued $800.0 million in aggregate principal amount of senior unsecured notes due November 15, 2025 (the “Senior Notes”). The Senior Notes accrue interest at a rate of 5.500% per annum. Interest on the Senior Notes is due semi-annually on May 15 and November 15 of each year, beginning on May 15, 2021. As of December 31, 2020, the Senior Notes balance was $789.3 million, net of discounts and issuance costs.

On or after November 15, 2022, the Company may, at its option, redeem the Senior Notes in whole or in part during the twelve-month period beginning on the following dates at the following redemption prices: November 15, 2022 at 102.750%; November 15, 2023 at 101.375%; or November 15, 2024 until maturity at 100.000%, of the principal amount of the Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest. Prior to November 15, 2022, the Company may, at its option, redeem up to 40% of the aggregate principal amount of the Senior Notes originally issued at a redemption price of 105.500% of the principal amount of the Senior Notes to be redeemed on the redemption date plus accrued and unpaid interest with the net proceeds of certain equity offerings. In addition, the Company may, at its option, redeem the Senior Notes prior to November 15, 2022 at a price equal to 100% of the principal amount redeemed plus a “make-whole” premium, plus accrued and unpaid interest.

The indenture governing the Senior Notes contains customary terms and restrictions, subject to a number of exceptions and qualifications. The Company was in compliance with the terms of the indenture as of December 31, 2020.

On May 15, 2020, SFS Holding Corp., the Company’s member, issued and sold $200 million in aggregate principal amount of senior secured notes and on June 15, 2020 and July 15, 2020, SFS Holding Corp. issued and sold an additional aggregate $100 million in principal amount of senior secured notes (collectively, the “SFS Notes”) and had the ability to issue up to an additional $200 million in principal amount of senior secured notes on the same terms. The Company guaranteed the SFS Notes.

The gross proceeds from the SFS Notes of $300 million were contributed to the Company by SFS Holding Corp., and the Company distributed $449.5 million to SFS Holding Corp., which was used by SFS Holdings Corp. to repay in full, including accrued interest, and terminate the SFS Notes on September 16, 2020.

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Equipment Note Payable

12 Months Ended

Dec. 31, 2020

Text Block [Abstract]

Equipment Note Payable

NOTE 10 – EQUIPMENT NOTE PAYABLE

During 2019, the Company entered into a $30.0 million note payable, secured by equipment, with a financial institution. The note required monthly payments of $0.58 million beginning January 1, 2020 and interest accruing at 5.99% per annum. The note matures December 2024.

In 2020, the Company entered into two additional equipment notes payable of $2.1 million and $0.9 million, respectively. The notes require quarterly payments of $0.1 million and $80 thousand beginning July 1, 2020 and January 1, 2021, respectively, and interest accruing at 6.1% and 4.69% per annum, respectively. The notes mature on April 2023 and October 2023, respectively.

The principal balance outstanding for the three notes payable was $26.5 million as of December 31, 2020. Annual principal maturities of the equipment notes payable are as follows as of December 31, 2020 (in thousands):

Year ending December 31,	Amounts
2021	$	6,299
2022		6,673
2023		6,851
2024		6,705
2025 and thereafter		—
Total	$	26,528

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Self Insurance Plan

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Self Insurance Plan

NOTE 11 – SELF INSURANCE PLAN

The Company has engaged an insurance company to provide administrative services for the Company’s self-funded insurance plan. The Company has a stop loss policy with the insurance company which limits the Company’s exposure both in the aggregate and on an individual basis.

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Employee Benefit Plan

12 Months Ended

Dec. 31, 2020

Retirement Benefits [Abstract]

Employee Benefit Plan

NOTE 12 – EMPLOYEE BENEFIT PLAN

The Company has a 401(k) plan covering substantially all employees. Employees may contribute amounts as allowable by Internal Revenue Service and plan limitations. The Company may make discretionary matching and non-elective contributions.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Commitments to Originate Loans

As of December 31, 2020, the Company had approximately $11.5 billion in notional amounts of IRLCs, whereby a potential borrower has agreed to interest rates and pricing of a potential loan. These contracts potentially expose the Company to interest rate or pricing risk and are economically hedged with forward mortgage backed security contracts. Furthermore, as of December 31, 2020, the Company had agreed to extend credit to potential borrowers for approximately $19.2 billion. These contracts represent off balance sheet credit risk where the Company may be required to extend credit to these borrowers based on the prevailing interest rates and prices at the time of execution.

Regulatory Net Worth Requirements

Certain secondary market agencies and state regulators require the Company to maintain minimum net worth and capital requirements in order to remain in good standing with the agencies. Noncompliance with an agency’s requirements can result in such agency taking various remedial actions up to and including terminating the Company’s ability to sell loans to and service loans on behalf of the respective agency.

In accordance with the regulatory requirements of HUD, governing non-supervised, direct endorsement mortgagees, the Company is required to maintain a minimum net worth (as defined by HUD) of $2.5 million. At December 31, 2020, the Company exceeded the regulatory net worth requirement and had a net worth (as defined by HUD) of $2.37 billion.

We are required to maintain a minimum net worth and liquidity by Ginnie Mae, Freddie Mac and Fannie Mae. The most restrictive of the minimum net worth and liquidity requirements, requires the Company to maintain a minimum net worth of $491.1 million and liquidity of $78.2 million as of December 31, 2020. At December 31, 2020 we exceed the net worth and liquidity requirement for all three government sponsored entities.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 14 – FAIR VALUE MEASUREMENTS

Fair value is the price that would be received if an asset were sold or the price that would be paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. Required disclosures include classification of fair value measurements within a three-level hierarchy (Level 1, Level 2, and Level 3). Classification of a fair value measurement within the hierarchy is dependent on the classification and significance of the inputs used to determine the fair value measurement. Observable inputs are those that are observed, implied from, or corroborated with externally available market information. Unobservable inputs represent the Company’s estimates of market participants’ assumptions.

Fair value measurements are classified in the following manner:

Level 1—Valuation is based on quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Valuation is based on either observable prices for identical assets or liabilities in inactive markets, observable prices for similar assets or liabilities, or other inputs that are derived directly from, or through correlation to, observable market data at the measurement date.

Level 3—Valuation is based on the Company’s or others’ models using assumptions at the measurement date that a market participant would use.

In determining fair value measurements, the Company uses observable inputs whenever possible. The level of a fair value measurement within the hierarchy is dependent on the lowest level of input that has a significant impact on the measurement as a whole. If quoted market prices are available at the measurement date or are available for similar instruments, such prices are used in the measurements. If observable market data is not available at the measurement date, judgment is required to measure fair value.

Financial Instruments - Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following are the major categories of financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	December 31, 2020
Description	Level 1		Level 2			Level 3		Total
Mortgage loans at fair value	$	—	$	7,916,515		$	—	$	7,916,515
IRLCs		—		—			59,579		59,579
FLSCs		—		(64,743	)		—		(64,743	)
Total	$	—	$	7,851,772		$	59,579	$	7,911,351
	December 31, 2019
Description	Level 1		Level 2			Level 3		Total
Mortgage loans at fair value	$	—	$	5,446,310		$	—	$	5,446,310
IRLCs		—		—			16,786		16,786
FLSCs		—		(14,506	)		—		(14,506	)
Total	$	—	$	5,431,804		$	16,786	$	5,448,590

As of December 31, 2020 and 2019, mortgage loans at fair value included fair value adjustments of $194.6 million and $48.0 million, respectively. These fair value adjustments include the relative changes in the values of closed loans from the original pricing of the prospective loan (while it was an IRLC) to period end, subsequent market interest rate movements, and includes gain margin for the recorded loans based on external market indications of fair value.

Derivative assets and liabilities solely represent fair value of adjustments for the contracts based upon their original contract dates relative to the period end pricing for the contracts. The derivative contracts that the Company enters into are initially recorded at zero value as they are entered into at market prices on the date of execution. Subsequent changes in market conditions, primarily interest rates, drive the value of the Company’s derivative contracts and such fair value adjustments represent the respective derivative assets and liabilities.

Level 3 Issuances and Transfers

The Company issues IRLCs which are considered derivatives. If the contract converts to a loan, the implied value, which is solely based upon interest rate changes, is incorporated in the basis of the fair value of the loan. If the IRLC does not convert to a loan, the basis is reduced to zero as the contract has no continuing value. The Company does not track the basis of the individual IRLCs that convert to a loan, as that amount has no relevance to the presented consolidated financial statements.

Transfers into and out of Level 3 specific to the Company’s IRLC asset are equivalent to the net change in unrealized gain of approximately $42.8 million and $30 thousand for the years ended December 31, 2020 and 2019, respectively.

Other Financial Instruments

During the fourth quarter of 2020, the Company issued $800.0 million of Senior Notes. The fair value of the Senior Notes approximated $841.3 million as of December 31, 2021. The fair value of the Senior Notes was estimated using Level 2 inputs, including observable trading information in inactive markets.

Due to their nature and respective terms (including the variable interest rates on warehouse and operating lines of credit), the carrying value of cash and cash equivalents, receivables, payables, notes payable and warehouse and operating lines of credit approximate their fair value as of December 31, 2020 and 2019, respectively.

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Related Party Transactions

12 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 15– RELATED PARTY TRANSACTIONS

The Company has engaged in the following significant related party transactions in 2020 and 2019:

• The Company’s corporate campus is located in buildings that are owned by entities controlled by the Company’s founder and its CEO and leased by the Company from these entities;

• Legal services are provided to the Company by a law firm in which the Company’s founder is a partner;

• The Company leases an aircraft owned by an entity controlled by the Company’s CEO to facilitate travel of Company executives for business purposes;

• Home appraisal contracting and review services are provided by home appraisal management companies partially owned by the Company’s CEO and his brother; an executive of the Company and a member of the board of directors of UWM Holdings Corporation is also on the board of directors of one of these home appraisal management companies.

For the years ended December 31, 2020 and 2019, the Company incurred approximately $15.0 million and $11.2 million, respectively, in operating expenses with various companies related through common ownership. The Company incurred expenses of approximately $13.4 million in rent and other occupancy related expenses, $0.6 million in legal fees, $0.4 million primarily related to direct origination costs and $0.6 million in other general and administrative expenses for the year ended December 31, 2020. The Company incurred expenses of approximately $10.0 million in rent and other occupancy related expenses, $0.6 million in legal fees, $0.4 million primarily related to direct origination costs and $0.2 million in other general and administrative expenses for the year ended December 31, 2019.

Pursuant to line of credit agreements entered into, primarily in 2020, between the Company, its founder, its CEO, and the CEO’s brother and certain entities controlled by these individuals, the Company borrowed and repaid $297.0 million in the first half of 2020. These borrowings and repayments are reflected in the “Borrowings under operating lines of credit” and “Repayments under operating lines of credit” line items within the financing section of the 2020 consolidated statement of cash flows. The Company also incurred approximately $1.0 million of interest expense in 2020 related to these lines of credit. As of December 31, 2020, no amount was outstanding under these line of credit agreements, as they were terminated in the second quarter of 2020.

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Subsequent Events

12 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

NOTE 16– SUBSEQUENT EVENTS

UWM Business Combination

As described in Note 1, the Company completed the business combination transaction with Gores Holdings IV, Inc. on January 21, 2021, following approval by the stockholders of Gores Holdings IV, Inc. Following this transaction, the Company became an indirect consolidated subsidiary of Gores Holdings IV, Inc., which was renamed UWM Holdings Corporation, shares of which listed for trading on the New York Stock Exchange under the symbol “UWMC” on January 22, 2021.

Subsequent to December 31, 2020, the Company entered into the following additional related party transactions:

• A lease for an additional building that is part of the Company’s corporate campus, which is owned by entities controlled by the Company’s CEO. The lease agreement includes undiscounted future lease payments of approximately $38.3 million through 2035.

• The modification of the lease agreement for an aircraft owned by an entity controlled by the Company’s CEO as well as a lease for an additional aircraft owned by an entity controlled by the Company’s CEO, to facilitate travel of Company executives for business purposes. The Company will pay an agreed-upon hourly rate for its usage of these aircraft, with no fixed minimum commitments.

• Employee lease agreements, pursuant to which the Company’s team members provide certain administrative services to entities controlled by the Company’s founder and its CEO. Under these agreements, these entities will pay the Company approximately $25 thousand per month for the administrative services provided to these entities by the Company’s team members.

The Company has evaluated subsequent events through March 22, 2021, which is the date the financial statements were issued.

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Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

Organization

Organization

United Wholesale Mortgage, LLC (f/k/a United Shore Financial Services, LLC) (the “Company”) was organized under the laws of the State of Michigan. United Shore Financial Services, LLC, the Company’s predecessor, was incorporated on July 16, 1986, primarily doing business as United Wholesale Mortgage. The Company engages in the origination, sale and servicing of residential mortgage loans. The Company is based in Michigan but originates and services loans throughout the United States. The Company is approved as a Title II, non-supervised direct endorsement mortgagee with the United States Department of Housing and Urban Development (or “HUD”). In addition, the Company is an approved issuer with the Government National Mortgage Association (or “Ginnie Mae”), as well as an approved seller and servicer with the Federal National Mortgage Association (or “Fannie Mae”) and Federal Home Loan Mortgage Corporation (or “Freddie Mac”).

On September 15, 2020, the Company amended and restated its operating agreement to reflect SFS Holding Corp. as the sole member of the Company with one unit authorized, issued and outstanding. Historical unit amounts have been retrospectively adjusted to give effect to this change from 80,000 units authorized, issued and outstanding to the single unit.    

On September 22, 2020, the Company and Gores Holdings IV, Inc., a special purpose acquisition company sponsored by an affiliate of The Gores Group, LLC, entered into a definitive agreement with respect to a business combination, which was consummated on January 21, 2021. Upon completion of the proposed transaction, the Company’s current owner retained an approximate 94% economic ownership interest of the Company, and the Company became a consolidated subsidiary of UWM Holdings Corporation (f/k/a Gores Holdings IV, Inc.). Class A common stock of UWM Holdings Corporation was listed on the New York Stock Exchange (“NYSE”) under the new ticker symbol “UWMC” on January 22, 2021. Refer to the subsequent events footnote for further discussion.

On January 21, 2021, SFS contributed all of its equity interest in the Company to UWM Holdings, LLC (a wholly-owned subsidiary of SFS) and adopted the Second Amended and Restated Operating Agreement to reflect that UWM Holdings, LLC as its sole member and its manager. Upon completion of the proposed transaction, (i) UWM Holdings, LLC issued approximately 6% of its units to UWM Holdings Corporation, (ii) SFS retained approximate 94% of its units in UWM Holdings LLC and SFS retained approximately 94% of the economic ownership interest of the combined company and (iii) the Company became a consolidated subsidiary of UWM Holdings Corporation (f/k/a Gores Holdings IV, Inc.). Class A common stock of UWM Holdings Corporation was listed on the New York Stock Exchange (under the new ticker symbol “UWMC”) on January 22, 2021. Refer to the subsequent events footnote for further discussion.

Basis of Presentation

Basis of Presentation

The consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America (or “GAAP”).

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. As of December 31, 2020 and 2019, the Company had two subsidiaries both of which were special purpose entities that were formed and operate solely in connection with securitized warehouse facilities used by the Company in its operations. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The most sensitive accounting estimates affecting the consolidated financial statements are the valuations of mortgage loans at fair value, mortgage servicing rights (or “MSRs”), derivative assets and liabilities, and the measurement of the representations and warranties reserve.

Operating Segments

Operating Segments

The Company operates as one segment. Operating segments are defined as components of an enterprise for which separate financial information is regularly evaluated by the chief operating decision maker (or “CODM”), which is the Company’s chief executive officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates the Company’s financial information on a consolidated basis.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers cash and temporary investments with original maturities of three months or less to be cash and cash equivalents. The Company typically maintains cash balances in financial institutions in excess of Federal Deposit Insurance Corporation limits. The Company evaluates the creditworthiness of these financial institutions in determining the risk associated with these balances.

Mortgage Loans at Fair Value and Revenue Recognition

Mortgage Loans at Fair Value and Revenue Recognition

Mortgage loans are recorded at estimated fair value. Fair value of mortgage loans is estimated using observable market information including pricing from current cash commitments from government sponsored enterprises, recent market commitment prices, or broker quotes, as if the loans were to be sold currently into the secondary market.

A majority of the revenues from mortgage loan originations are recognized when the loan is originated which is the primary revenue recognition event as the loans are recorded at fair value upon origination. Loan origination fees are recognized as income at the time the loans are originated. Interest income is accrued at the contractual rate, unless collectability is uncertain. Loan production income also includes the unrealized gains and losses associated with the changes in the fair value of mortgage loans at fair value, the realized and unrealized gains and losses from derivative assets and liabilities and the capitalization of MSRs.

Loans are considered to be sold when the Company surrenders control over the financial assets. Control is considered to have been surrendered when the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; the purchaser obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets; and the Company does not maintain effective control over the transferred assets through an agreement that entitles or obligates the Company to repurchase or redeem the transferred assets before their maturity. The Company typically considers the above criteria to have been met when transferring title to another party where no substantive repurchase rights or obligations exist.

Derivatives

Derivatives

Derivatives are recognized as assets or liabilities on the consolidated balance sheets and measured at fair value with changes in fair value recorded within the consolidated statements of operations in the period in which they occur. The Company enters into derivative instruments to reduce its risk exposure to fluctuations in interest rates. The Company accounts for derivative instruments as free-standing derivative instruments and does not designate any for hedge accounting. Interest rate lock commitments (or “IRLCs”) on mortgage loans to be originated or purchased which are intended to be sold are considered to be derivatives with changes in fair value recorded in the consolidated statements of operations as part of loan production income. Fair value is estimated primarily based on relative changes in interest rates for the underlying mortgages to be originated or purchased. Fair value estimates also take into account the probability that loan commitments may not be exercised by customers. The Company uses forward mortgage backed security contracts, which are known as forward loan sale commitments (or “FLSCs”), to economically hedge the IRLCs. Refer to Note 3 – Derivatives for further details.

Mortgage Servicing Rights and Revenue Recognition - Sale of MSRs

Mortgage Servicing Rights and Revenue Recognition - Sale of MSRs

MSRs are initially recorded at estimated fair value. To determine the fair value of the servicing right created, the Company uses third party estimates of fair value at the time of initial recognition. Subsequent fair value (measured for subsequent impairment purposes) is estimated with the assistance of an third party broker based upon a valuation model that calculates the estimated present value of future cash flows. The valuation model incorporates market estimates of the estimated market prepayment speeds, discount rate, cost to service, float value, ancillary income, inflation, and delinquency and default rates.

MSRs are amortized in proportion to the estimated future net servicing revenue. MSRs are periodically evaluated for impairment. For this purpose, the Company stratifies its MSRs based on interest rate. Changes in the estimates used to value MSRs could materially change the estimated fair value and any valuation allowances required. Management records a valuation allowance when the fair value of the mortgage servicing asset strata is less than its amortized book value. Valuation allowances are recorded as a temporary impairment to the affected strata effectively reducing recorded MSRs and incurring a charge to operations. Valuation recoveries are recorded in subsequent periods. When a mortgage prepays, the Company permanently reduces the associated MSR in the period of prepayment with a charge to operations.

Sales of MSRs are recognized when the risks and rewards of ownership have been transferred to a buyer, and a substantive non-refundable down payment is received. Also, any risks retained by the Company must be reasonably quantifiable to be eligible for sale accounting.

Premises and Equipment, Net

Premises and equipment, net

Premises and equipment is recorded at cost and depreciated or amortized using the straight line method over the estimated useful lives of the assets. The following is a summary of premises and equipment, net at December 31 (in thousands):

	Useful lives (years)	2020			2019
Furniture and equipment	3-10	$	24,325		$	17,976
Computer software	1-3		3,644			1,480
Leasehold improvements	(a)		104,074			50,633
Construction in process			1,249			5,415
Accumulated depreciation and amortization			(25,720	)		(14,139	)
Premises and equipment, net		$	107,572		$	61,365

(a) Amortized over the shorter of the related lease term or the estimated useful life of the assets.

Leases

Leases

The Company enters into contracts to lease real estate, furniture and fixtures, and information technology equipment. Leases that meet one of the finance lease criteria are classified as finance leases, while all others are classified as operating leases. The Company determines if an arrangement is a lease at inception and has made on accounting policy election to capitalize leases with initial terms in excess of 12 months. At lease commencement, a lease liability and right-of-use asset are calculated and recognized for operating and finance leases. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease and lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term. The lease term used in the calculation includes any options to extend that the Company is reasonably certain to exercise. The lease liability is equal to the present value of future lease payments. The right-of-use asset is equal to the lease liability, plus any initial direct costs and prepaid lease payments, less any lease incentives received. Operating and finance lease right-of-use assets and liabilities are recorded separately on the consolidated balance sheets. In determining the present value of future lease payments, the Company uses estimated incremental borrowing rates based on information available at the lease commencement date when an implicit rate is not readily determinable for a given lease. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company uses an incremental borrowing rate estimated by referencing the Company’s collateralized borrowings.

The Company’s leases do not contain any material residual value guarantees or material restrictive covenants. The Company’s lease agreements include both lease and non-lease components which are generally accounted for as a single component to the extent that the costs are fixed. If the non-lease components are not fixed, the costs are treated as variable lease costs. Subsequent to lease commencement, lease liabilities recorded for finance leases are measured using the effective interest method and the related right-of-use assets are amortized on a straight-line basis over the lease term. For finance leases, interest expense and amortization expense are recorded separately in the consolidated statements of operations in interest expense and depreciation and amortization, respectively. For operating leases, total lease cost is comprised of lease expense and variable lease cost. Lease expense includes lease payments, which are recognized on a straight-line basis over the lease term. Variable lease cost includes common area maintenance charges, real estate taxes, insurance and other expenses, where applicable, which are expensed as incurred. Total lease cost for operating leases is recorded in occupancy and equipment expense on the consolidated statements of operations. See “Note 6 - Leases” for further information.

Loans Eligible for Repurchase from Ginnie Mae

Loans Eligible for Repurchase from Ginnie Mae

When the Company has the unilateral right to repurchase Ginnie Mae pool loans it has previously sold (generally loans that are more than 90 days past due) and the call option results in a more than trivial benefit to the Company, the previously sold assets are required to be re-recognized on the consolidated balance sheets. The recognition of previously sold loans does not impact the accounting for the previously recognized MSRs. At December 31, 2020 and December 31, 2019, the Company had recorded such Ginnie Mae pool loans in mortgage loans at fair value totaling $451.1 million and $21.7 million, respectively, with related purchase liabilities equal to the gross amount of the loan recorded in accounts payable and accrued expenses. At December 31, 2020 and December 31, 2019, the fair values of the Ginnie Mae pool loans were $448.5 million and $18.4 million, respectively.

Representations and Warranties Reserve

Representations and Warranties Reserve

Loans sold to investors which the Company believes met investor and agency underwriting guidelines at the time of sale may be subject to repurchase in the event of specific default by the borrower or subsequent discovery that underwriting or documentation standards were not explicitly satisfied. The Company may, upon mutual agreement, indemnify the investor against future losses on such loans or be subject to other guaranty requirements and subject to loss. The Company initially records its exposure under such guarantees at estimated fair value upon the sale of the related loan, within accounts payable and accrued expenses, as well as within loan production income, and continues to evaluate its on-going exposures in subsequent periods. The reserve is estimated based on the Company’s assessment of its contingent and non-contingent obligations, including expected losses, expected frequency, the overall potential remaining exposure, as well as an estimate for a market participant’s potential readiness to stand by to perform on such obligations. The Company repurchased $53.1 million and $31.1 million of loans during the years ended December 31, 2020 and 2019, respectively, related to the representations and warranties provisions.

The activity of the representations and warranties reserve was as follows (in thousands):

	December 31,
	2020			2019
Balance, beginning of period	$	46,322		$	32,999
Reserve charged to operations		36,510			19,153
Losses realized, net		(13,290	)		(5,830	)
Balance, end of period	$	69,542		$	46,322

Loan Origination Fees and Expenses

Loan Origination Fees and Expenses

Loan origination fees represent revenue earned from loan production and are included in loan production income on the consolidated statements of operations. Loan origination fees generally

represent flat, per-loan fee amounts and are recognized as revenue at the time the loans are originated. Loan origination expenses are charged to operations as incurred and are included in direct loan production costs on the consolidated statements of operations.

Loan Servicing Income

Loan Servicing Income

Loan servicing income represents revenue earned for servicing loans for various investors. The loan servicing income is based on a contractual percentage of the outstanding principal balance and is recognized into revenue as the related mortgage payments are received by the Company’s subservicer. Loan servicing expenses are charged to operations as incurred.

Servicing Advances

Servicing Advances

Servicing advances represent advances on behalf of customers and investors to cover delinquent balances for property taxes, insurance premiums and other out-of-pocket costs. Advances are made in accordance with the servicing agreements and are recoverable upon liquidation. The Company periodically evaluates the advances for collectability and amounts are written-off when they are deemed uncollectible. Management has determined that certain amounts are not fully collectible and has recorded an allowance for expected credit losses of approximately $264 thousand and $125 thousand at December 31, 2020 and 2019, respectively. Servicing advances are included in accounts receivable, net on the consolidated balance sheets.

Interest Income

Interest Income

Interest income on mortgage loans at fair value is accrued based upon the principal amount outstanding and contractual interest rates. Income recognition is discontinued when loans become 90 days delinquent or when, in management’s opinion, the collectability of principal and interest becomes doubtful and the specific loan is put on nonaccrual status.

Advertising and Marketing

Advertising and Marketing

Advertising and marketing is expensed as incurred and amounted to $7.9 million and $5.6 million for the years ended December 31, 2020 and 2019, respectively, and is included in marketing, travel, and entertainment expenses on the consolidated statements of operations.

Escrow and Fiduciary Funds

Escrow and Fiduciary Funds

The Company maintains segregated bank accounts in trust for investors and escrow balances for mortgagors. The balances of these accounts amounted to $955.2 million and $374.3 million at December 31, 2020 and 2019, respectively, and are excluded from the consolidated balance sheets.

Income Taxes

Income Taxes

The Company has elected to be taxed as a partnership for income tax purposes. Accordingly, taxable income or loss of the Company is reported on the income tax returns of the member and no provision for federal income taxes has been recorded in the accompanying consolidated financial statements. The Company is subject to certain state income taxes which are included on the consolidated statements of operations.

Contingencies

Contingencies

The Company evaluates contingencies based on information currently available and establishes an accrual for those matters when a loss contingency is considered probable and the related amount is reasonably estimable. For matters where a loss is believed to be reasonably possible but not probable, no accrual is established by the nature of the loss contingency and an estimate of the reasonably possible range of loss in excess of amount accrued, when such estimate can be made, is disclosed. In deriving an estimate, the Company is required to make assumptions about matters that are, by their nature, highly uncertain. The assessment of loss contingencies involves the use of critical estimates, assumptions and judgments. It is not possible to predict or determine the outcome of all loss contingences. Accruals are periodically reviewed and may be adjusted as circumstances change.

Risks and Uncertainties

Risks and Uncertainties

The Company encounters certain economic and regulatory risks inherent in the consumer finance business. Economic risks include interest rate risk and credit risks. The Company is subject to interest rate risk to the extent that in a rising interest rate environment, the Company may experience a decrease in loan production, as well as decreases in the value of mortgage loans at fair value and in commitments to originate loans, which may negatively impact the Company’s operations. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which mortgage loans are being held at fair value or subsequently under any representation and warranty provisions within the Company’s sale agreements. The Company is subject to substantial regulation as it directly provides financing to consumers acquiring residential real estate.

The Company sells loans to investors without specific recourse. As such, the investors have assumed the risk of loss of default by the borrower. However, the Company is usually required by these investors to make certain standard representations and warranties relating to credit information, loan documentation and collateral. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these investors for any losses from borrower defaults. In addition, if loans pay-off within a specified time frame, the Company may be required to refund a portion of the sales proceeds to the investors.

Reclassifications

Reclassifications

Some reclassifications have been made to prior year balances to conform to the current year financial statement presentation.

Related Party Transactions

Related Party Transactions

The Company enters into various transactions with related parties. See “Note 15 – Related Party Transactions” for additional information.

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which was subsequently amended by ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, which was issued in January 2021. This guidance provides practical expedients to address existing guidance on contract modifications due to the expected market transition from the London Inter-bank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate. The ASU was effective upon issuance on a prospective basis beginning January 1, 2020 and the Company may elect certain practical expedients as reference rate activities occur. The Company will evaluate its debt and other applicable contracts that are modified in the future to ensure they are eligible for modification relief and apply the practical expedients as needed.

In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (or “ASU 2020-03”). ASU 2020-03 improves and clarifies various financial instruments topics to increase stakeholder awareness and make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The Company adopted ASU 2020-03 upon issuance, with no material effect on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes. The amendments to Topic 740 include the removal of certain exceptions to the general principles of ASC 740 in such areas as intraperiod tax allocation, year to date losses in interim periods and deferred tax liabilities related to outside basis differences. Amendments also include simplification in other areas such as interim recognition of enactment of tax laws or rate changes and accounting for a franchise tax (or similar tax) that is partially based on income. The guidance further clarifies that single-member limited liability companies and similar disregarded entities that are not subject to income tax are not required to recognize an allocation of consolidated income tax expense in their separate financial statements, but they could elect to do so. This ASU is effective for public business entities for fiscal years and interim periods beginning after December 15, 2020, with early adoption permitted. The adoption of this guidance on January 1, 2020 did not have a significant effect on the Company’s consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which removes, modifies or adds certain disclosure requirements for fair value measurements. The guidance was effective January 1, 2020. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, as amended, which amends the guidance for recognizing credit losses on financial instruments measured at amortized cost including receivables. The ASU requires measurement and recognition of expected versus incurred credit losses using a lifetime credit loss measurement approach. Substantially all of the Company’s financial assets are measured at fair value and are therefore not subject to the guidance; however, the Company determined that certain receivables are within the scope of the ASU. The expected credit-related losses of the Company’s receivables are immaterial based on historical experience and due to the short-term nature of the assets. Servicing advances are generally expected to be fully reimbursed under the terms of the servicing agreements. The guidance was effective January 1, 2020. The adoption of this guidance, including the subsequent amendments to the initial guidance, ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2019-11, did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements, which is intended to clarify or correct the unintended application of the Codification of accounting guidance for a wide variety of topics. The adoption of this ASU will be required effective January 1, 2021. Early adoption is allowed. The adoption of this guidance will not have a material impact on the consolidated financial statements and related disclosures.

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Organization, Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of Premises And Equipment Net

The following is a summary of premises and equipment, net at December 31 (in thousands):

	Useful lives (years)	2020			2019
Furniture and equipment	3-10	$	24,325		$	17,976
Computer software	1-3		3,644			1,480
Leasehold improvements	(a)		104,074			50,633
Construction in process			1,249			5,415
Accumulated depreciation and amortization			(25,720	)		(14,139	)
Premises and equipment, net		$	107,572		$	61,365

(a) Amortized over the shorter of the related lease term or the estimated useful life of the assets.

Schedule of Representations and Warranties Reserve

The activity of the representations and warranties reserve was as follows (in thousands):

	December 31,
	2020			2019
Balance, beginning of period	$	46,322		$	32,999
Reserve charged to operations		36,510			19,153
Losses realized, net		(13,290	)		(5,830	)
Balance, end of period	$	69,542		$	46,322

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Mortgage Loans at Fair Value (Tables)

12 Months Ended

Dec. 31, 2020

Text Block [Abstract]

Summary of Reconciliation of Changes in Mortgage Loans at Fair Value

 The change in fair value adjustment is recorded in the “Loan production income” line item of the consolidated statement of operations.

(In thousands)	December 31, 2020		December 31, 2019
Mortgage loans, unpaid principal balance	$	7,620,014	$	5,309,394
Premiums paid on mortgage loans		101,949		88,913
Fair value adjustment		194,552		48,003
Mortgage loans at fair value	$	7,916,515	$	5,446,310

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Derivatives (Tables)

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following summarizes derivative instruments (in thousands):

	December 31, 2020						December 31, 2019
	Fair Value			Notional Amount			Fair Value			Notional Amount
IRLCs, net	$	59,579		$	10,594,329	(a)	$	16,786		$	6,727,739	(a)
FLSCs, net		(64,743	)		16,602,739			(14,506	)		10,674,680
Total	$	(5,164	)				$	2,280

(a) Adjusted for pullthrough rates of 92% and 81%, respectively.

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Accounts Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Schedule of Accounts Receivable

The following summarizes accounts receivable, net at December 31 (in thousands):

	December 31, 2020
	2020			2019
Investor receivables	$	100,478		$	104,303
Servicing advances		60,053			9,004
Servicing fees		55,838			23,113
Due from title companies		33,663			16,729
Warehouse - after deadline funding		3,642			4,020
Pair-offs receivable		438			6,317
Receivable - related party		28			245
Allowance for doubtful accounts		(540	)		(258	)
Total Accounts Receivable, Net	$	253,600		$	163,473

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Mortgage Servicing Rights, Net (Tables)

12 Months Ended

Dec. 31, 2020

Summary of Mortgage Servicing Rights

The following summarizes the activity of MSRs (in thousands):

	For the year ended December 31,
	2020			2019
Balance, beginning of period	$	731,353		$	368,117
Additions		1,896,638			1,126,965
Amortization		(252,421	)		(80,280	)
Loans paid in full		(301,113	)		(36,937	)
Sales		(298,009	)		(625,953	)
Impairment		(19,584	)		(20,559	)
Balance, end of period	$	1,756,864		$	731,353

Schedule of Analysis of Change in Fair Value

The hypothetical effect of an adverse change in these key assumptions would result in a decrease in fair values as follows at December 31, 2020 and 2019, respectively, (in thousands):

	December 31,			December 31,
	2020			2019
Discount rate:
+ 10% adverse change – effect on value	$	(56,889	)	$	(25,580	)
+ 20% adverse change – effect on value	$	(110,040	)	$	(49,396	)
Prepayment speeds:
+ 10% adverse change – effect on value	$	(87,752	)	$	(34,208	)
+ 20% adverse change – effect on value	$	(169,230	)	$	(65,744	)
Cost of servicing:
+ 10% adverse change – effect on value	$	(21,643	)	$	(8,879	)
+ 20% adverse change – effect on value	$	(43,285	)	$	(17,759	)

Schedule of Expected Amortization of MSRs Recorded

The following table summarizes the Company’s estimated future MSR amortization expense (in thousands) based upon the existing MSR asset. These estimates are based on existing asset balances, the current interest rate environment, and prepayment speeds as of December 31, 2020. The actual amortization expense the Company recognizes in any given period may be significantly different depending upon retention or sale activities, changes in interest rates, prepayment speeds, market conditions, or circumstances that indicate the carrying amount of an asset may not be recoverable.

Year ending December 31,	Amounts
2021	$	293,647
2022		249,591
2023		211,575
2024		179,066
2025		151,176
Thereafter		691,393
Total	$	1,776,448

Mortgage Servicing Rights

Summary of Key Assumptions Used in Determining the Fair Value

The key unobservable inputs used in determining the fair value of the Company’s MSRs were as follows at December 31, 2020 and 2019, respectively:

	December 31,			December 31,
	2020			2019
Discount rates		9.0% - 14.5	%		9.0% - 14.5	%
Annual prepayment speeds		8.8% - 42.2	%		8.2% - 30.8	%
Cost of servicing		$75 - $126			$90 - $138

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Leases (Tables)

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Schedule of Supplemental Cash Flow Information Related to Leases

Supplemental cash flow information related to leases is as follows (in thousands):

	December 31, 2020		December 31, 2019
Cash paid for the amounts included in the measurement of leases liabilities – operating	$	12,551	$	8,000
Cash paid for amounts included in the measurement of lease liabilities - financing	$	5,049	$	—
Operating lease right-of-use assets obtained in exchange for operating leases liabilities1	$	27,630	$	82,300
Financing lease right-of-use assets obtained in exchange for finance lease liabilities	$	20,120	$	—

1  Of the $82.3 million obtained as of December 31, 2019, $76.0 million is related to the adoption of ASU 2016-02.

Schedule of Additional Supplemental Flow Information Related to Leases

Additional supplemental information related to leases was as follows:

	December 31, 2020			December 31, 2019
Weighted average remaining lease term – operating leases		15.9 years			16 years
Weighted average remaining lease term – finance leases		2.4 years			—
Weighted average discount rate – operating leases		7.8	%		6	%
Weighted average discount rate – finance leases		6.2	%		—

Schedule of Maturities of Company's Operating Lease Liabilities

The maturities of the Company’s operating lease liabilities are summarized below (in thousands):

December 31, 2020	Amounts
2021	$	11,493
2022		11,414
2023		11,175
2024		11,175
2025		11,246
Thereafter		124,684
Total lease payments		181,187
Less imputed interest		(76,653	)
Total	$	104,534

Summary of Maturities of the Company's Financing Lease Liabilities

The maturities of the Company’s financing lease liabilities are summarized below (in thousands):

December 31, 2020	Amounts
2021	$	10,322
2022		10,083
2023		4,505
Total lease payments		24,910
Less imputed interest		(1,778	)
Total	$	23,132

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Lines of Credit (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Lines of Credit

The Company had the following lines of credit with financial institutions at December 31, 2020 and 2019, respectively, (in thousands):

	December 31, 2020		December 31, 2019
$400 million line of credit agreement expiring December 31, 2022. Interest at variable rates based on a spread to the one month LIBOR rate. Line is collateralized by $989.5 million of MSRs (based on estimated fair value as of December 31, 2020).	$	320,300	$	251,000
$125 million line of credit agreement expired on September 14, 2020. Interest at variable rates based on a spread to the one month LIBOR rate. This line was closed during 2020.		—		125,000
	$	320,300	$	376,000

Warehouse Line of Credit

Schedule of Lines of Credit

The Company had the following warehouse lines of credit with financial institutions as of December 31, 2020 and 2019, respectively, (in thousands):

As of December 31, 2020 Warehouse Lines of Credit	Expiration Date		December 31, 2020		December 31, 2019
$1.5 Billion		2/10/2021	$	1,344,851	$	510,954
$800 Million		3/5/2021		666,891		314,728
$200 Million		3/24/2021		86,928		150,229
$150 Million		5/25/2021		140,237		133,196
$400 Million		6/23/2021		287,073		436,437
$2 Billion		7/1/2021		499,841		800,764
$200 Million		7/7/2021		198,705		156,632
$750 Million		9/7/2021		209,138		—
$150 Million		9/19/2021		112,429		106,256
$400 Million		9/23/2021		248,947		240,620
$925 Million		10/29/2021		1,179		—
$3 Billion		10/29/2021		1,685,138		1,384,903
$250 Million		11/16/2021		249,006		355,540
$500 Million		12/28/2021		365,577		—
$1 Billion		1/10/2022		769,510		513,645
$250 Million (ASAP + - see below)		No expiration		75,947		85,683
$150 Million (gestation line - see below)		No expiration		—		—
All interest rates are variable based on a spread to the one-month LIBOR rate.			$	6,941,397	$	5,189,587

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Equipment Note Payable (Tables)

12 Months Ended

Dec. 31, 2020

Text Block [Abstract]

Schedule of Maturities of Long-term Debt

Annual principal maturities of the equipment notes payable are as follows as of December 31, 2020 (in thousands):

Year ending December 31,	Amounts
2021	$	6,299
2022		6,673
2023		6,851
2024		6,705
2025 and thereafter		—
Total	$	26,528

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following are the major categories of financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	December 31, 2020
Description	Level 1		Level 2			Level 3		Total
Mortgage loans at fair value	$	—	$	7,916,515		$	—	$	7,916,515
IRLCs		—		—			59,579		59,579
FLSCs		—		(64,743	)		—		(64,743	)
Total	$	—	$	7,851,772		$	59,579	$	7,911,351
	December 31, 2019
Description	Level 1		Level 2			Level 3		Total
Mortgage loans at fair value	$	—	$	5,446,310		$	—	$	5,446,310
IRLCs		—		—			16,786		16,786
FLSCs		—		(14,506	)		—		(14,506	)
Total	$	—	$	5,431,804		$	16,786	$	5,448,590

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Organization, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands			12 Months Ended
	Jan. 21, 2021	Sep. 15, 2020 shares	Dec. 31, 2020 USD ($) Segment Subsidiary shares	Dec. 31, 2019 USD ($) Subsidiary shares	Sep. 22, 2020
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Date of incorporation	Jul. 16, 1986
Membership units, Authorized | shares		80,000	1	1
Membership units, Issued | shares		80,000	1	1
Membership units, Outstanding | shares		80,000	1	1
Stock split, Description		Historical unit amounts have been retrospectively adjusted to give effect to this change from 80,000 units authorized, issued and outstanding to the single unit.
Ownership percent					94.00%
Number of wholly owned subsidiaries | Subsidiary			2	2
Allowances for services advance			$ 264	$ 125
Loan receivable gross			451,100	21,700
Fair value loans receivable fair Value			448,500	18,400
Escrow Balance			955,200	374,300
Advertising and Marketing Expenses			$ 7,900	5,600
Number of operating segments | Segment			1
Repayments of Long-term Debt			$ 53,100	$ 31,100
UWM Holdings Corporation [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Ownership percent	94.00%
SFS [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Ownership percent	6.00%

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Organization, Basis of Presentation and Summary of Significant Accounting Policies - Summary of Premises and Equipment Net (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Accumulated depreciation and amortization	$ (25,720)	$ (14,139)
Premises and equipment, net	107,572	61,365
Furniture and Equipment
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 24,325	17,976
Furniture and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	3 years
Furniture and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	10 years
Computer Software
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 3,644	1,480
Computer Software | Minimum
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	1 year
Computer Software | Maximum
Property, Plant and Equipment [Line Items]
Property plant and equipment useful life	3 years
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 104,074	50,633
Construction in Progress
Property, Plant and Equipment [Line Items]
Property plant and equipment gross	$ 1,249	$ 5,415

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Organization, Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Representations and Warranties Reserve (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Balance, beginning of period	$ 46,322	$ 32,999
Reserve charged to operations	36,510	19,153
Losses realized, net	(13,290)	(5,830)
Balance, end of period	$ 69,542	$ 46,322

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Mortgage Loans at Fair Value - Summary of Reconciliation of Changes in Mortgage Loans at Fair Value (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]
Mortgage loans, unpaid principal balance	$ 7,620,014	$ 5,309,394
Premiums paid on mortgage loans	101,949	88,913
Fair value adjustment	194,552	48,003
Mortgage loans at fair value	$ 7,916,515	$ 5,446,310

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Derivatives - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative blended weighted average pullthrough rate	92.00%	81.00%

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Derivatives - Schedule of Derivative Instruments (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Derivative [Line Items]
Fair value	$ (5,164)	$ 2,280
IRLCs
Derivative [Line Items]
Fair value	59,579	16,786
Notional amount	10,594,329	6,727,739
FLSCs
Derivative [Line Items]
Fair value	(64,743)	(14,506)
Notional amount	$ 16,602,739	$ 10,674,680

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Derivatives - Schedule of Derivative Instruments (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative blended weighted average pullthrough rate	92.00%	81.00%

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Accounts Receivable, Net - Schedule of Accounts Receivable (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Receivables [Abstract]
Investor receivables	$ 100,478	$ 104,303
Servicing advances	60,053	9,004
Servicing fees	55,838	23,113
Due from title companies	33,663	16,729
Warehouse-after deadline funding	3,642	4,020
Pair-offs receivable	438	6,317
Receivable - related party	28	245
Allowance for doubtful accounts	(540)	(258)
Accounts receivable	$ 253,600	$ 163,473

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Mortgage Servicing Rights, Net - Summary of Mortgage Servicing Rights Activity (Detail) - Mortgage Servicing Rights - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Mortgage Servicing Rights [Line Items]
Balance, beginning of period	$ 731,353	$ 368,117
Additions	1,896,638	1,126,965
Amortization	(252,421)	(80,280)
Loans paid in full	(301,113)	(36,937)
Sales	(298,009)	(625,953)
Impairment	(19,584)	(20,559)
Balance, end of period	$ 1,756,864	$ 731,353

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Mortgage Servicing Rights, Net - Additional Information (Detail) - Mortgage Servicing Rights - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Mortgage Servicing Rights [Line Items]
Unpaid principal balance of mortgage loans	$ 188,300	$ 72,600
Estimated fair value	$ 1,760	$ 744

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Mortgage Servicing Rights, Net - Summary of Key Unobservable Inputs Used in Determining the Fair Value (Detail) - Mortgage Servicing Rights - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Minimum
Servicing Assets at Fair Value [Line Items]
Discount rates	9.00%	9.00%
Annual prepayment speeds	8.80%	8.20%
Cost of servicing	$ 75	$ 90
Maximum
Servicing Assets at Fair Value [Line Items]
Discount rates	14.50%	14.50%
Annual prepayment speeds	42.20%	30.80%
Cost of servicing	$ 126	$ 138

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Mortgage Servicing Rights, Net - Schedule of Analysis of Change in Fair Value (Detail) - Mortgage Servicing Rights - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Sensitivity Analysis of Fair Value of Interests Continued to be Held by Transferor, Servicing Assets or Liabilities, Impact of Adverse Change in Assumption [Line Items]
+ 10% adverse change – effect on value, discount rate	$ (56,889)	$ (25,580)
+ 20% adverse change – effect on value, discount rate	(110,040)	(49,396)
+ 10% adverse change – effect on value, prepayment speed	(87,752)	(34,208)
+ 20% adverse change – effect on value, prepayment speed	(169,230)	(65,744)
+ 10% adverse change – effect on value, cost of servicing	(21,643)	(8,879)
+ 20% adverse change – effect on value, cost of servicing	$ (43,285)	$ (17,759)

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Mortgage Servicing Rights, Net - Schedule of Expected Amortization of MSRs Recorded (Detail) $ in Thousands	Dec. 31, 2020 USD ($)
Transfers and Servicing of Financial Assets [Abstract]
2021	$ 293,647
2022	249,591
2023	211,575
2024	179,066
2025	151,176
Thereafter	691,393
Total	$ 1,776,448

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Leases - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Finance lease right-of-use asset	$ 22,929	$ 0
Finance lease liability	23,132	0
Total interest expense under finance leases	800
Total amortization expense under finance leases	5,200
Operating lease right-of-use asset, net	93,098	79,485
Related party operating lease assets	92,571	73,185
Operating lease liabilities	104,534	91,780
Related party operating lease liabilities	104,006	85,480
Total lease expense under all operating leases	10,900	9,500
Related party operating lease expense	10,600	8,600
Variable lease expense	$ 600	$ 0
Minimum
Remaining operating lease term	2 years
Maximum
Remaining operating lease term	17 years

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Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Lease, Cost [Abstract]
Cash paid for the amounts included in the measurement of leases liabilities – operating	$ 12,551	$ 8,000
Cash paid for amounts included in the measurement of lease liabilities - financing	5,049
Operating lease right-of-use assets obtained in exchange for operating leases liabilities	27,630	$ 82,300
Financing lease right-of-use assets obtained in exchange for finance lease liabilities	$ 20,120

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Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Parenthetical) (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Lease liability	$ 23,132	$ 0
Operating lease right-of-use assets	$ 93,098	79,485
Accounting Standards Update 2016-02
Lease liability		82,300
Operating lease right-of-use assets		$ 76,000

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Leases - Schedule of Additional Supplemental Flow Information Related to Leases (Detail)	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Weighted average remaining lease term – operating leases	15 years 10 months 24 days	16 years
Weighted average remaining lease term – finance leases	2 years 4 months 24 days
Weighted average discount rate – operating leases	7.80%	6.00%
Weighted average discount rate – finance leases	6.20%

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Leases - Schedule of Maturities of Company's Operating Lease Liabilities (Detail) - USD ($) $ in Thousands	Jan. 21, 2021	Dec. 31, 2020	Dec. 31, 2019
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2021		$ 11,493
2022		11,414
2023		11,175
2024		11,175
2025		11,246
Thereafter		124,684
Total lease payments	$ 38,300	181,187
Less imputed interest		(76,653)
Operating lease liabilities		$ 104,534	$ 91,780

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Leases - Summary of Maturities of the Company's Financing Lease Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Finance Lease, Liability, Payment, Due [Abstract]
2021	$ 10,322
2022	10,083
2023	4,505
Total lease payments	24,910
Less imputed interest	(1,778)
Total	$ 23,132	$ 0

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Lines of Credit - Lines of Credit with Financial Institutions (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Line of Credit Facility [Line Items]
Committed line amount	$ 320,300	$ 376,000
$400 Million Line of Credit Agreement Expiring December 31, 2022
Line of Credit Facility [Line Items]
Committed line amount	$ 320,300	251,000
$125 Million Line of Credit Agreement Expiring September 14, 2020
Line of Credit Facility [Line Items]
Committed line amount		$ 125,000

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Lines of Credit - Lines of Credit with Financial Institutions (Parenthetical) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Line of Credit Facility [Line Items]
Line of Credit Facility, Fair Value	$ 989.5
$400 Million Line of Credit Agreement Expiring December 31, 2022
Line of Credit Facility [Line Items]
Line amount	$ 400.0	$ 400.0
Line of credit expiration date	Dec. 31, 2022	Dec. 31, 2022
$125 Million Line of Credit Agreement Expiring September 14, 2020
Line of Credit Facility [Line Items]
Line amount	$ 125.0	$ 125.0
Line of credit expiration date	Sep. 14, 2020	Sep. 14, 2020

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Warehouse Lines of Credit - Summary of Line of Credit (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Line of Credit Facility [Line Items]
Committed amount	$ 320,300	$ 376,000
Warehouse Line of Credit
Line of Credit Facility [Line Items]
Committed amount	6,941,397	5,189,587
Warehouse Line of Credit | March Five Two Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 800,000
Line of credit expiration date	Mar. 05, 2021
Committed amount	$ 666,891	314,728
Warehouse Line of Credit | May Twenty Five Two Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 150,000
Line of credit expiration date	May 25, 2021
Committed amount	$ 140,237	133,196
Warehouse Line of Credit | June Twenty Three Two Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 400,000
Line of credit expiration date	Jun. 23, 2021
Committed amount	$ 287,073	436,437
Warehouse Line of Credit | July One Two Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 2,000,000
Line of credit expiration date	Jul. 01, 2021
Committed amount	$ 499,841	800,764
Warehouse Line of Credit | July Seven Two Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 200,000
Line of credit expiration date	Jul. 07, 2021
Committed amount	$ 198,705	156,632
Warehouse Line of Credit | September Seven Two Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 750,000
Line of credit expiration date	Sep. 07, 2021
Committed amount	$ 209,138
Warehouse Line of Credit | September Nineteen Two Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 150,000
Line of credit expiration date	Sep. 19, 2021
Committed amount	$ 112,429	106,256
Warehouse Line of Credit | September Twenty Three Two Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 400,000
Line of credit expiration date	Sep. 23, 2021
Committed amount	$ 248,947	240,620
Warehouse Line of Credit | Line of Credit Amount Sixteen
Line of Credit Facility [Line Items]
Line of credit	250,000
Committed amount	75,947	85,683
Warehouse Line of Credit | Line of Credit Amount Seventeen
Line of Credit Facility [Line Items]
Line of credit	150,000
Committed amount
Warehouse Line of Credit | February Ten Two Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 1,500,000
Line of credit expiration date	Feb. 10, 2021
Committed amount	$ 1,344,851	510,954
Warehouse Line of Credit | March Twenty Four Two Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 200,000
Line of credit expiration date	Mar. 24, 2021
Committed amount	$ 86,928	150,229
Warehouse Line of Credit | November Sixteen Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 250,000
Line of credit expiration date	Nov. 16, 2021
Committed amount	$ 249,006	355,540
Warehouse Line of Credit | December Twenty Eight Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 500,000
Line of credit expiration date	Dec. 28, 2021
Committed amount	$ 365,577
Warehouse Line of Credit | January Ten Thousand Twenty Two Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 1,000,000
Line of credit expiration date	Jan. 10, 2022
Committed amount	$ 769,510	513,645
Warehouse Line of Credit | Line of Credit Amount One | October Twenty Nine Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 925,000
Line of credit expiration date	Oct. 29, 2021
Committed amount	$ 1,179
Warehouse Line of Credit | Line of Credit Amount Two | October Twenty Nine Thousand Twenty One Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 3,000,000
Line of credit expiration date	Oct. 29, 2021
Committed amount	$ 1,685,138	$ 1,384,903

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Warehouse Lines of Credit - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Long-term Line of Credit	$ 320,300	$ 376,000
Credit facility, Description	The above agreements also contain covenants which include certain financial requirements, including maintenance of minimum tangible net worth, minimum liquidity, maximum debt to net worth ratio, net income, and limitations on additional debt, as defined in the agreements.
As Soon As Pooled Plus program [Member]
Long-term Line of Credit	$ 75,900
Early Funding Program [Member]
Long-term Line of Credit	0
Gestation [Member]
Long-term Line of Credit	0
Line of Credit Facility, Maximum Borrowing Capacity	$ 150,000

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Senior Notes - Additional Information (Detail) - USD ($) $ in Thousands			12 Months Ended	24 Months Ended
	Jul. 15, 2020	May 15, 2020	Dec. 31, 2020	Nov. 15, 2022	Nov. 03, 2020	Dec. 31, 2019
Senior Notes			$ 789,323			$ 0
Proceeds from Issuance of Senior Long-term Debt			800,000
Additional Senior Secured Notes Issuable			200,000
SFS Holding Corp [Member]
Payments to Fund Long-term Loans to Related Parties			$ 449,500
Senior Notes [Member]
Debt Instrument Redemption Price Percentage of Principal Amount Redeemed			100.00%	105.50%
Debt Instrument, Face Amount			$ 800,000
Senior Notes [Member] | Maximum [Member]
Debt Instrument Redemption Price Percentage of Principal Amount Redeemed				40.00%
Senior Notes [Member] | SFS Holding Corp [Member]
Proceeds from Secured Notes Payable			$ 300,000
Senior Notes [Member] | Debt Instrument, Redemption, Period One [Member]
Debt Instrument, Redemption Period, End Date			Nov. 15, 2022
Debt Instrument Redemption Price Percentage of Principal Amount Redeemed			102.75%
Senior Notes [Member] | Debt Instrument, Redemption, Period Two [Member]
Debt Instrument, Redemption Period, End Date			Nov. 15, 2023
Debt Instrument Redemption Price Percentage of Principal Amount Redeemed			101.375%
Senior Notes [Member] | Debt Instrument, Redemption, Period Three [Member]
Debt Instrument, Redemption Period, End Date			Nov. 15, 2024
Debt Instrument Redemption Price Percentage of Principal Amount Redeemed			100.00%
Senior Unsecured Notes November 15 Due 2025 [Member]
Debt Instrument, Interest Rate, Stated Percentage					5.50%
Debt Instrument, Face Amount					$ 800,000
SFS Notes [Member]
Proceeds from Issuance of Additional Senior Secured Notes	$ 100,000
Senior Secured Notes [Member]
Proceeds from Issuance of Senior Long-term Debt		$ 200,000

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Equipment Note Payable - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Payment of note payable equipment		$ 580
Accrued interest on notes payable, rate		5.99%
Notes payable maturity		2024-12
Equipment Notes Payable One [Member]
Notes payable outstanding amount	$ 26,500
Debt instrument, face amount		$ 30,000
Equipment Notes Payable Two [Member]
Payment of note payable equipment	$ 100
Accrued interest on notes payable, rate	6.10%
Notes payable maturity	2023-04
Notes payable outstanding amount	$ 26,500
Debt instrument, face amount	$ 2,100
Notes frequency of periodic payment	quarterly
Date of first required payment	Jul. 01, 2020
Equipment Notes Payable Three [Member]
Payment of note payable equipment	$ 80
Accrued interest on notes payable, rate	4.69%
Notes payable maturity	2023-10
Notes payable outstanding amount	$ 26,500
Debt instrument, face amount	$ 900
Notes frequency of periodic payment	quarterly
Date of first required payment	Jan. 01, 2021

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Equipment Note Payable - Schedule of Maturities of Long-term Debt (Detail) $ in Thousands	Dec. 31, 2020 USD ($)
Debt Disclosure [Abstract]
2021	$ 6,299
2022	6,673
2023	6,851
2024	6,705
2025 and thereafter
Total	$ 26,528

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	Dec. 31, 2020 USD ($)
Commitments and Contingencies [Line Items]
Commitments to extend credit to potential borrowers	$ 19,200.0
HUD
Commitments and Contingencies [Line Items]
Minimum net worth requirement	2.5
Net worth	2,370.0
Ginnie Mae
Commitments and Contingencies [Line Items]
Minimum net worth requirement	491.1
Net worth	78.2
IRLCs
Commitments and Contingencies [Line Items]
Notional amount	$ 11,500.0

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Fair Value Measurements - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans at fair value	$ 7,916,515	$ 5,446,310
Total	7,911,351	5,448,590
IRLCs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	59,579	16,786
FLSCs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	64,743	14,506
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans at fair value	0	0
Total	0	0
Level 1 | IRLCs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	0	0
Level 1 | FLSCs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans at fair value	7,916,515	5,446,310
Total	7,851,772	5,431,804
Level 2 | IRLCs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	0	0
Level 2 | FLSCs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	64,743	14,506
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage loans at fair value	0	0
Total	59,579	16,786
Level 3 | IRLCs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	59,579	16,786
Level 3 | FLSCs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative asset	$ 0	$ 0

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Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2021
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair value adjustment	$ 194,600	$ 48,000
Senior Notes [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt Instrument, Face Amount	800,000
Senior Notes [Member] | Forecast [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Long Term Debt Fair Value			$ 841,300
IRLCs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Net change in unrealized gain	$ 42,800	$ 30

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Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
Related Party Transaction [Line Items]
Other general and administrative expenses		$ 27,940	$ 13,196
Line of Credit
Related Party Transaction [Line Items]
Proceeds from related party debt	$ 297,000
Repayments of related party debt	$ 297,000
Interest expense, related party		1,000
Due to related parties		0
Affiliated Entity
Related Party Transaction [Line Items]
Expenses of various companies related through common ownership		15,000	11,200
Rent expenses		13,400	10,000
Legal fees		600	600
Direct origination costs		400	400
Other general and administrative expenses		$ 600	$ 200

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Subsequent Events - Additional Information (Detail) - USD ($) $ in Thousands	Jan. 21, 2021	Dec. 31, 2020
Operating lease, liability, to be paid	$ 38,300	$ 181,187
Administrative Services Agreement
Due to affiliate, monthly for office space, utilities and secretarial support	$ 25