Quarterly report pursuant to Section 13 or 15(d)

SEGMENTS

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SEGMENTS
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
SEGMENTS SEGMENTS
ASC 280, Segment Reporting, establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in that guidance, the Company has determined that it has two reportable segments — Origination and Servicing.
Origination — The Company operates its loan origination business throughout the United States. Its licensed sales professionals and support staff cultivate deep relationships with referral partners and clients and
provide a customized approach to the loan transaction whether it is a purchase or refinance. The origination segment is primarily responsible for loan origination, acquisition and sale activities.
Servicing — The Company services loans out of its corporate office in San Diego, California. Properties of the loans serviced by the Company are disbursed throughout the United States and as of June 30, 2024 the Company serviced at least one loan in 49 different states. The servicing segment provides a steady stream of cash flow to support the origination segment, and more importantly it allows for the Company to build long-standing client relationships that drive repeat and referral business back to the origination segment to recapture the client’s next mortgage transaction. The servicing segment is primarily responsible for the servicing activities of all loans in the Company’s servicing portfolio, which includes, but is not limited to, collection and remittance of loan payments, managing borrower’s impound accounts for taxes and insurance, loan payoffs, loss mitigation and foreclosure activities.
The Company does not allocate assets to its reportable segments as they are not included in the review performed by the CODM for purposes of assessing segment performance and allocating resources. The balance sheet is managed on a consolidated basis and is not used in the context of segment reporting. The Company also does not allocate certain corporate expenses, which are represented by All Other in the tables below.
The following table presents the financial performance and results by segment for the three months ended June 30, 2024:
(in thousands)
 Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 206,218  $ (370) $ 205,848  $ —  $ 205,848 
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net 2,134  —  2,134  —  2,134 
Loan servicing and other fees —  67,709  67,709  —  67,709 
Valuation adjustment of mortgage servicing rights —  2,134  2,134  —  2,134 
Interest (expense) income, net
 (119) 11,910  11,791  (4,219) 7,572 
Other income (expense), net
 535  45  580  (292) 288 
Net revenue 208,768  81,428  290,196  (4,511) 285,685 
Expenses
Salaries, incentive compensation and benefits 169,037  8,518  177,555  11,383  188,938 
General and administrative 21,798  2,855  24,653  3,745  28,398 
Occupancy, equipment and communication 17,876  735  18,611  1,737  20,348 
Depreciation and amortization 3,162  270  3,432  538  3,970 
Reversal of foreclosure losses
 —  (496) (496) —  (496)
Total expenses
 211,873  11,882  223,755  17,403  241,158 
Income tax expense
 —  —  —  6,936  6,936 
Net (loss) income
 $ (3,105) $ 69,546  $ 66,441  $ (28,850) $ 37,591 
The following table presents the financial performance and results by segment for the six months ended June 30, 2024:
(in thousands)
 Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 339,882  $ 26  $ 339,908  $ —  $ 339,908 
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net 5,364  —  5,364  —  5,364 
Loan servicing and other fees —  133,497  133,497  —  133,497 
Valuation adjustment of mortgage servicing rights —  22,912  22,912  —  22,912 
Interest income (expense), net
 545  22,366  22,911  (7,152) 15,759 
Other income (expense), net
 899  67  966  (939) 27 
Net revenue 346,690  178,868  525,558  (8,091) 517,467 
Expenses
Salaries, incentive compensation and benefits 290,142  16,663  306,805  22,200  329,005 
General and administrative 42,346  6,717  49,063  8,546  57,609 
Occupancy, equipment and communication 34,811  1,701  36,512  3,651  40,163 
Depreciation and amortization 6,653  411  7,064  660  7,724 
Reversal of foreclosure losses
 —  (104) (104) —  (104)
Total expenses
 373,952  25,388  399,340  35,057  434,397 
Income tax expense
 —  —  —  17,079  17,079 
Net (loss) income
$ (27,262) $ 153,480  $ 126,218  $ (60,227) $ 65,991 
The following table presents the financial performance and results by segment for the three months ended June 30, 2023:
(in thousands)
 Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 136,499  $ 426  $ 136,925  $ —  $ 136,925 
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net 2,306  —  2,306  —  2,306 
Loan servicing and other fees —  60,249  60,249  (38) 60,211 
Valuation adjustment of mortgage servicing rights —  27,890  27,890  —  27,890 
Interest income (expense), net
 1,331  10,266  11,597  (2,342) 9,255 
Other income, net 168  49  217  7  224 
Net revenue 140,304  98,880  239,184  (2,373) 236,811 
Expenses
Salaries, incentive compensation and benefits 127,024  7,495  134,519  10,384  144,903 
General and administrative 15,061  2,240  17,301  3,147  20,448 
Occupancy, equipment and communication 16,187  1,223  17,410  992  18,402 
Depreciation and amortization 3,364  218  3,582  79  3,661 
Reversal of foreclosure losses
 —  (1,044) (1,044) —  (1,044)
Total expenses
 161,636  10,132  171,768  14,602  186,370 
Income tax expense
 —  —  —  13,505  13,505 
Net (loss) income
 $ (21,332) $ 88,748  $ 67,416  $ (30,480) $ 36,936 
The following table presents the financial performance and results by segment for the six months ended June 30, 2023:
(in thousands)
 Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 228,775  $ 801  $ 229,576  $ —  $ 229,576 
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net 2,306  —  2,306  —  2,306 
Loan servicing and other fees —  120,336  120,336  (38) 120,298 
Valuation adjustment of mortgage servicing rights —  (26,981) (26,981) —  (26,981)
Interest income (expense), net
 2,631  17,676  20,307  (5,069) 15,238 
Other income (expense), net
 166  101  267  (8) 259 
Net revenue 233,878  111,933  345,811  (5,115) 340,696 
Expenses
Salaries, incentive compensation and benefits 220,281  15,069  235,350  20,673  256,023 
General and administrative 29,555  5,120  34,675  6,656  41,331 
Occupancy, equipment and communication 31,361  2,481  33,842  1,990  35,832 
Depreciation and amortization 6,763  360  7,123  276  7,399 
Provision for foreclosure losses —  470  470  —  470 
Total expenses
 287,960  23,500  311,460  29,595  341,055 
Income tax benefit
 —  —  —  (100) (100)
Net (loss) income
 $ (54,082) $ 88,433  $ 34,351  $ (34,610) $ (259)