Mortgage Loans

3 Months Ended

Dec. 31, 2019

SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate [Abstract]

MORTGAGE LOANS

MORTGAGE LOANS

Mortgage loans held for sale consist primarily of single-family residential loans collateralized by the underlying property. At December 31, 2019, mortgage loans held for sale had an aggregate carrying value and aggregate outstanding principal balance of $1.0 billion. At September 30, 2019, mortgage loans held for sale had an aggregate carrying value of $1.1 billion and an aggregate outstanding principal balance of $1.0 billion. During the three months ended December 31, 2019 and 2018, mortgage loans originated totaled $2.3 billion and $1.6 billion, respectively, and mortgage loans sold totaled $2.3 billion and $1.8 billion, respectively. The Company had gains on sales of loans and servicing rights of $73.6 million during the three months ended December 31, 2019 compared to $59.9 million in the prior year period. Net gains on sales of loans and servicing rights are included in revenues in the consolidated statements of operations. Approximately 86% of the mortgage loans sold by DHI Mortgage during the three months ended December 31, 2019 were sold to four major financial entities, of which one entity purchased 31%.

The Company occasionally enters into forward sales of mortgage-backed securities (MBS) as part of a program to offer below market interest rate financing to its homebuyers in certain markets. At December 31, 2019, the Company had MBS totaling $594.4 million that did not yet have interest rate lock commitments or closed loans created or assigned and recorded a liability of $0.1 million for the fair value of such MBS position.