6. Mortgage Loans Held for Sale

The Company maintains a strategy of originating and purchasing residential mortgage loan products primarily for the purpose of selling to GSEs or other third-party investors in the secondary market on a servicing-retained basis. The Company purchases closed loans through its correspondent channel and assists customers currently in the Company’s servicing portfolio with refinancing of loans or new home purchases through its Direct to Consumer channel. Generally, all newly originated mortgage loans held for sale are securitized and transferred to GSEs or delivered to third-party purchasers shortly after origination on a servicing-retained basis.

Mortgage loans held for sale are recorded at fair value as set forth below:



Mortgage Loans Held for Sale	March 31, 2020		December 31, 2019
Mortgage loans held for sale – UPB	$	3,735	$	3,949
Mark-to-market adjustment⁽¹⁾	187		128
Total mortgage loans held for sale	$	3,922	$	4,077


⁽¹⁾	The mark-to-market adjustment is recorded in net gain on mortgage loans held for sale in the consolidated statements of operations.

The Company accrues interest income as earned and places loans on non-accrual status after any portion of principal or interest has been delinquent for more than 90 days. Accrued interest is recorded as interest income in the consolidated statements of operations.

The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows:



	March 31, 2020				December 31, 2019
Mortgage Loans Held for Sale	UPB		Fair Value		UPB		Fair Value
Non-accrual⁽¹⁾	$	33	$	23	$	29	$	22


⁽¹⁾	Non-accrual - UPB includes $28 and $25 of UPB related to Ginnie Mae repurchased loans as of March 31, 2020 and December 31, 2019, respectively.

The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $24 and $21 as of March 31, 2020 and December 31, 2019, respectively.

The following table sets forth the activities of mortgage loans held for sale:



Mortgage Loans Held for Sale	Three Months Ended March 31, 2020			Three Months Ended March 31, 2019
Balance - beginning of period	$	4,077		$	1,631
Loans sold	(13,510		)	(6,088		)
Mortgage loans originated and purchased, net of fees⁽¹⁾	12,375			6,253
Repurchase of loans out of Ginnie Mae securitizations	919			364
Changes in fair value	61			10
Net transfers of mortgage loans held for sale⁽²⁾	—			—
Balance - end of period	$	3,922		$	2,170


⁽¹⁾	Mortgage loans originated and purchased during the three months ended March 31, 2019 includes $536 of loans held for sale that were acquired from Pacific Union. See Note 2, Acquisitions, for further discussion.


⁽²⁾	Amount reflects transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing.

For the three months ended March 31, 2020 and 2019, the Company received proceeds of $13,724 and $6,194, respectively, on the sale of mortgage loans held for sale, resulting in gains of $275 and $106, respectively.

The Company has the right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased in connection with loan modifications and loan resolution activity, with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. Therefore, these loans are classified as held for sale.