Derivative Financial Instruments

12 Months Ended

Dec. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

11. Derivative Financial Instruments

Derivative instruments are used as part of the overall strategy to manage exposure to market risks primarily associated with fluctuations in interest rates related to originations. Derivative instruments utilized by the Company primarily include interest rate lock commitments, loan purchase commitments, forward Mortgage Backed Securities purchase commitments, Eurodollar and Treasury futures and interest rate swap agreements. The changes in value on the derivative instruments are recorded in earnings as a component of net gain on mortgage loans held for sale on the consolidated statements of operations and consolidated statement of cash flows, except for a portion of forward MBS trades to hedge MSR pipelines and related fair value changes, which is recorded in service related, net on the consolidated statements of operations and in changes in other assets or other liabilities on the consolidated statements of cash flows.

The following table provides the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses) for the derivative financial instruments:


		December 31, 2021				Year Ended December 31, 2021
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gains/(Losses)
Assets
Mortgage loans held for sale
Loan sale commitments	2022	$	1,051	$	25	$	(77)
Derivative financial instruments
IRLCs	2022	5,237		134		(280)
LPCs	2022	487		3		(35)
Forward MBS trades	2022	3,569		7		(23)
Total derivative financial instruments - assets		$	9,293	$	144	$	(338)
Liabilities
Derivative financial instruments
IRLCs	2022	$	10	$	—	$	—
LPCs	2022	646		2		1
Forward MBS trades	2022	4,091		8		(94)
Swap futures	2022	923		6		6
Total derivative financial instruments - liabilities		$	5,670	$	16	$	(87)


		December 31, 2020				Year Ended December 31, 2020
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gains/(Losses)
Assets
Mortgage loans held for sale
Loan sale commitments	2021	$	2,710	$	102	$	70
Derivative financial instruments
IRLCs	2021	10,179		414		279
LPCs	2021	5,406		38		26
Forward MBS trades	2021	5,853		37		31
Total derivative financial instruments - assets		$	21,438	$	489	$	336
Liabilities
Derivative financial instruments
IRLCs	2021	$	2	$	—	$	—
LPCs	2021	280		1		(2)
Forward MBS trades	2021	25,156		156		144
Swap futures	2021	60		—		—
Total derivative financial instruments - liabilities		$	25,498	$	157	$	142

Associated with the Company’s derivatives are $27 and $61 in collateral deposits on derivative instruments recorded in other assets on the Company’s consolidated balance sheets as of December 31, 2021 and 2020, respectively. The Company does not offset fair value amounts recognized for derivative instruments with amounts collected or deposited on derivative instruments in the consolidated balance sheets.