DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIESDerivatives instruments utilized by the Company primarily include interest rate lock commitments, forward sale contracts, MBS put options, put options on treasuries, and interest rate swap futures. Derivative financial instruments are recognized as assets or liabilities and are measured at fair value. The Company accounts for derivatives as free-standing derivatives and does not designate any derivative financial instruments for hedge accounting. All derivative financial instruments are recognized on the consolidated balance sheets at fair value with changes in the fair values being reported in current period earnings. The Company does not use derivative financial instruments for purposes other than in support of its risk management activities. Refer to Note 1- Description of Business, Presentation and Summary of Significant Accounting Policies and Note 3- Fair Value for further details on derivatives.

The following summarizes the Company’s outstanding derivative instruments:

				Fair Value
	Notional		Balance Sheet Location	Asset		Liability
December 31, 2021:
Interest rate lock commitments	$	11,530,721	Derivative asset, at fair value	$	184,383	$	—
Interest rate lock commitments	1,125,911		Derivative liabilities, at fair value	—		3,763
Forward sale contracts	19,482,705		Derivative asset, at fair value	5,358		—
Forward sale contracts	13,171,462		Derivative liabilities, at fair value	—		2,964
Put options on treasuries	—		Derivative asset, at fair value	—		—
Put options on treasuries	16,980		Derivative liabilities, at fair value	—		31,070
Interest rate swap futures	2,640		Derivative asset, at fair value	4,924		—
Interest rate swap futures	—		Derivative liabilities, at fair value	—		—
			Total derivative financial instruments	$	194,665	$	37,797

				Fair Value
	Notional		Balance Sheet Location	Asset		Liability
December 31, 2020:
Interest rate lock commitments	$	31,365,494	Derivative asset, at fair value	$	647,349	$	—
Interest rate lock commitments	99,635		Derivative liabilities, at fair value	—		304
Forward sale contracts	44,694		Derivative asset, at fair value	107		—
Forward sale contracts	54,397,834		Derivative liabilities, at fair value	—		163,566
Put options on treasuries	—		Derivative asset, at fair value	—		—
Put options on treasuries	27,803		Derivative liabilities, at fair value	—		4,299
Interest rate swap futures	2,350		Derivative asset, at fair value	483		—
Interest rate swap futures	—		Derivative liabilities, at fair value	—		—
			Total derivative financial instruments	$	647,939	$	168,169

Because many of the Company’s current derivative agreements are not exchange-traded, the Company is exposed to credit loss in the event of nonperformance by the counterparty to the agreements. The Company controls this risk through credit monitoring procedures including financial analysis, dollar limits and other monitoring procedures. The notional amount of the contracts does not represent the Company’s exposure to credit loss.

The following summarizes the realized and unrealized net gains or losses on derivative financial instruments and the consolidated statements of operations line items where such gains and losses were included:

		Year Ended December 31,
Derivative instrument	Statements of Operations Location	2021		2020		2019
Interest rate lock commitments, net	Gain on origination and sale of loans, net	$	(466,425)	$	518,837	$	67,742
Forward sale contracts	Gain on origination and sale of loans, net	540,811		(748,245)		(130,328)
Interest rate swap futures	Gain on origination and sale of loans, net	(111,300)		(13,151)		(1,401)
Put options	Gain on origination and sale of loans, net	75,728		(27,112)		(586)
Forward sale contracts	Change in fair value of servicing rights, net	(89,127)		140,173		21,618
Interest rate swap futures	Change in fair value of servicing rights, net	9,071		16,708		20,974
Put options	Change in fair value of servicing rights, net	(2,822)		(2,218)		—
Total realized and unrealized losses on derivative financial instruments		$	(44,064)	$	(115,008)	$	(21,981)