Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

17. Income Taxes

The components of income tax expense for continuing operations were as follows:

	Year Ended December 31,
Total Income Tax Expense on continuing operations	2023		2022		2021(1)
Current Income Taxes
Federal	$	3	$	(6)	$	7
State	16		8		113
Total current income taxes	19		2		120
Deferred Income Taxes
Federal	110		245		376
State	25		44		(25)
Total deferred income taxes	135		289		351
Total income tax expense	$	154	$	291	$	471

(1)The provision for income taxes for 2021 does not reflect the tax effects of the sale of the Company’s reverse servicing portfolio reported as discontinued operations.

The following table presents a reconciliation of the income tax provision computed at the U.S. federal statutory tax rate to the actual effective tax rate:

	Year Ended December 31,
Reconciliation of the Income Tax Provision	2023		2022		2021
Tax Expense at Federal Statutory Rate	$	137	$	255	$	407
Effect of:
State taxes, net of federal benefit	32		39		70
Bargain purchase gain(1)	(20)		—		—
Nondeductible executive compensation	11		8		9
Share based compensation	(9)		(9)		(8)
Other, net	3		(2)		(7)
Total income tax expense	$	154	$	291	$	471

(1)Amount is related to preliminary bargain purchase gain recorded in connection with the Home Point Acquisition. Refer to Note 3, Acquisitions, for further details.

Temporary differences and carryforwards that give rise to deferred tax assets and liabilities are comprised of the following:

Deferred Tax Assets and Liabilities	December 31, 2023		December 31, 2022
Deferred Tax Assets
Effect of:
Goodwill and intangible assets	$	585	$	827
Loss reserves	101		84
Loss carryforwards (federal, state & capital)	85		104
Lease liability	22		28
Accruals	20		11
Depreciation and amortization, net	8		—
Other, net	12		19
Total deferred tax assets	833		1,073
Deferred Tax Liabilities
MSR amortization and mark-to-market, net	(282)		(269)
Other investment assets	(53)		(67)
Right-of-use assets	(18)		(24)
Depreciation and amortization, net	—		(2)
Prepaid assets	(1)		(1)
Total deferred tax liabilities	(354)		(363)
Valuation allowance	(7)		(7)
Deferred tax assets, net(1)	$	472	$	703

(1)The Company elected to account for the Global Intangible Low-Taxed Income (“GILTI”) tax expense in the period in which it is incurred. As a result, no deferred tax impact of GILTI has been provided in the consolidated financial statements.

The Company has federal NOL carryforwards (pre-tax) of $354 and $484 as of December 31, 2023 and 2022, respectively. The Company believes it is more likely than not that its deferred tax assets will be realized except for certain federal Code Section 382 limited NOLs that begin to expire with the 2026 tax year, if unused, and immaterial state NOL carryforwards that begin to expire with the 2023 tax year, if unused. Accordingly, the Company has recorded a federal valuation allowance of $7 as of December 31, 2023 and 2022 related to these NOL carryforwards. The state valuation allowance was immaterial as of December 31, 2023 and 2022. The Company does not expect any future tax loss limitations under Sections 382 and 384 that would impact its utilization of remaining federal NOL carryforwards.

The Company files income tax returns in the U.S. federal jurisdiction and numerous U.S. state jurisdictions. As of December 31, 2023, the Company is currently under examination by the Internal Revenue Service for tax years 2018, 2019, and 2020. The years open to examination by federal, state and local government authorities vary by jurisdiction.

Below is a reconciliation of the changes in the federal and state uncertain tax position balances, exclusive of interest and penalties, for the year ended December 31, 2023.

Unrecognized Tax Benefits (exclusive of interest and penalties)	December 31, 2023
Balance - beginning of year	$	—
Additions for tax positions taken in prior years	6
Balance - end of year	$	6