Quarterly report pursuant to Section 13 or 15(d)

WAREHOUSE LINES OF CREDIT, NET

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WAREHOUSE LINES OF CREDIT, NET
 9 Months Ended
Sep. 30, 2024
Line of Credit Facility [Abstract]  
WAREHOUSE LINES OF CREDIT, NET
Warehouse lines of credit consisted of the following at September 30, 2024 and December 31, 2023. Changes subsequent to September 30, 2024 have been described in the notes referenced with the below table.
(in thousands)
Maturity
 September 30,
2024		 December 31,
2023
$165 million master repurchase facility agreement(1)
January 2025 $ 95,961  $ 122,462 
$250 million master repurchase facility agreement(2)
August 2025 209,026  99,059 
$400 million master repurchase facility agreement(3)
August 2025 354,888  158,412 
$200 million master repurchase facility agreement(4)
May 2025 133,272  87,252 
$200 million master repurchase facility agreement(5)
September 2025 144,864  91,039 
$350 million master repurchase facility agreement(6)
September 2025 302,442  134,964 
$300 million master repurchase facility agreement(7)
N/A 248,147  30,185 
$200 million master repurchase facility agreement(8)
N/A 140,924  78,682 
$75 million master repurchase facility agreement(9)
N/A 22,635  34,280 
1,652,159  836,335 
Prepaid commitment fees (3,149) (2,554)
Warehouse lines of credit, net
 $ 1,649,010  $ 833,781 
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(1)The variable interest rate is calculated using a base rate tied to SOFR.
(2)The variable interest rate is calculated using a base rate tied to SOFR, plus the applicable interest rate margin. This line of credit requires a minimum deposit of $1.3 million, included in restricted cash.
(3)The variable interest rate is calculated using a base rate tied to SOFR, plus the applicable interest rate margin. This facility requires a minimum deposit of $2.0 million, included in restricted cash.
(4)The variable interest rate is calculated using a base rate plus SOFR, with a floor of 0.375% plus the applicable interest rate margin. This facility requires a minimum deposit of $300,000, included in restricted cash.
(5)The variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.40%, plus the applicable interest rate margin.
(6)The variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.50%, plus the applicable interest rate margin.
(7)The variable interest rate is calculated using a base rate tied to SOFR, plus the applicable interest rate margin. This facility’s maturity date is 30 days from written notice by either the financial institution or the Company.
(8)This facility agreement has a maturity of 364 days on the first $150.0 million committed amount and $50.0 million is due on demand. The variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.75%. Subsequent to September 30, 2024, this facility was amended to mature in full in October 2025.
(9)The interest rate on this facility is 3.375%. This facility is used for GNMA delinquent buyouts. Each buyout represents a separate transaction that can remain on the facility for up to five years.

The weighted average interest rate for warehouse lines of credit was 6.9% and 7.0% at September 30, 2024 and December 31, 2023, respectively. All warehouse lines of credit are collateralized by underlying mortgages and related documents. Existing balances on warehouse lines are repaid through the sale proceeds from the collateralized loans held for sale. The Company had cash balances of $7.9 million and $8.7 million in its warehouse buy down accounts as offsets to certain lines of credit at September 30, 2024 and December 31, 2023, respectively.
The agreements governing the Company’s warehouse lines of credit contain covenants that include certain financial requirements, including maintenance of maximum adjusted leverage ratio, minimum net worth, minimum tangible net worth, minimum liquidity, adjusted pre-tax net income and limitations on additional indebtedness, dividends, sale of assets, and decline in the mortgage loan servicing portfolio’s fair value. At September 30, 2024 and December 31, 2023, the Company was in compliance with all debt covenants.
The Company has an optional short-term financing agreement between FNMA and the lender described as “As Soon As Pooled” (“ASAP”). The Company can elect to assign FNMA Mortgage-Backed Security (“MBS”) trades to FNMA in advance of settlement and enter into a financing transaction and revenue related to the assignment is deferred until the final pool settlement date. The Company determines utilization based on warehouse availability and cash needs. There were no outstanding balances as of September 30, 2024 and December 31, 2023 on the ASAP financing.
Revolving Notes
The Company has an agreement for a revolving note from one of its warehouse banks, which it can draw upon as needed. The agreement currently expires in August 2027. Borrowings on the revolving note are collateralized by the Company’s GNMA MSRs. Monthly interest on the outstanding balance is calculated using a base rate tied to the SOFR rate plus the applicable margin, with a SOFR floor of 0.5%. The revolving note also has an unused facility fee on the average unused balance, which is also paid quarterly. The unused facility fee is waived if the average outstanding balance exceeds 50% of the available facility. The revolving note has a committed amount of $135.0 million and the agreement allows for the Company to increase the committed amount up to a maximum of $200.0 million. The Company has the option to convert the outstanding balance of the revolving note into a term note at its discretion. At September 30, 2024 and December 31, 2023, the Company had $46.0 million and $31.0 million, respectively, in outstanding borrowings on this credit facility.
The Company has an agreement for a revolving note of up to $150.0 million from one of its warehouse banks, which it can draw upon as needed. The agreement currently expires in September 2027. Borrowings on the revolving note are collateralized by the Company’s FHLMC MSRs. Monthly interest on the outstanding balance is calculated using a base rate tied to the SOFR rate plus the applicable margin, with a floor of 0.50%. The revolving note also had an unused facility fee on the average unused balance, which was also paid quarterly. The unused facility fee was waived if the average outstanding balance exceeded 35% of the available combined warehouse and MSR facility. In September 2023, the revolving note was amended to remove the unused facility fee. In September 2024, the revolving note was amended to separate it from the warehouse facility. At September 30, 2024 and December 31, 2023, the Company had $80.0 million and $30.0 million, respectively, in outstanding borrowings on this credit facility.
The Company has an agreement for a revolving note, which it can draw upon as needed. The agreement currently expires in September 2028. Borrowings on the revolving note are collateralized by the Company’s FNMA MSRs. Monthly interest on the outstanding balance is calculated using a base rate tied to the SOFR rate plus the applicable margin, with a SOFR floor of 2.0%. The revolving note has a committed amount of $250.0 million and the agreement allows for the Company to increase the committed amount up to a maximum of $400.0 million. At September 30, 2024 and December 31, 2023, the Company had $114.0 million and $87.8 million, respectively, in outstanding borrowings on this credit facility.
Term Note
The Company had a term note agreement with one of its warehouse banks collateralized by the Company’s FNMA MSRs that had an initial committed amount of $125.0 million and allowed for an increase of the committed amount up to a maximum of $175.0 million. Principal payments of 5% of the outstanding balance were due quarterly, with the remaining principal balance due upon the original maturity date of March 2024. In September 2023, the Company paid in full the $87.5 million remaining balance due on the term note with funds borrowed under a new revolving note agreement with a different lender and the term note agreement was terminated concurrently with repayment.