Quarterly report pursuant to Section 13 or 15(d)

SEGMENTS

v3.24.3
SEGMENTS
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
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 September 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 September 30, 2024:
(in thousands)
 Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 220,365  $ 246  $ 220,611  $ —  $ 220,611 
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net 2,367  —  2,367  —  2,367 
Loan servicing and other fees —  70,951  70,951  —  70,951 
Valuation adjustment of mortgage servicing rights —  (145,776) (145,776) —  (145,776)
Interest income (expense), net
 708  14,686  15,394  (4,925) 10,469 
Other income (expense), net
 657  70  727  (92) 635 
Net revenue 224,097  (59,823) 164,274  (5,017) 159,257 
Expenses
Salaries, incentive compensation and benefits 175,922  9,219  185,141  13,864  199,005 
General and administrative 19,742  3,788  23,530  3,188  26,718 
Occupancy, equipment and communication 18,708  1,004  19,712  2,289  22,001 
Depreciation and amortization 3,290  161  3,451  302  3,753 
Provision for foreclosure losses
 —  613  613  —  613 
Total expenses
 217,662  14,785  232,447  19,643  252,090 
Income tax benefit
 —  —  —  (25,882) (25,882)
Net income (loss)
 $ 6,435  $ (74,608) $ (68,173) $ 1,222  $ (66,951)
The following table presents the financial performance and results by segment for the nine months ended September 30, 2024:
(in thousands)
 Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 560,247  $ 272  $ 560,519  $ —  $ 560,519 
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net 7,731  —  7,731  —  7,731 
Loan servicing and other fees —  204,448  204,448  —  204,448 
Valuation adjustment of mortgage servicing rights —  (122,864) (122,864) —  (122,864)
Interest income (expense), net
 1,253  37,052  38,305  (12,077) 26,228 
Other income (expense), net
 1,556  137  1,693  (1,031) 662 
Net revenue 570,787  119,045  689,832  (13,108) 676,724 
Expenses
Salaries, incentive compensation and benefits 466,064  25,882  491,946  36,064  528,010 
General and administrative 62,088  10,505  72,593  11,734  84,327 
Occupancy, equipment and communication 53,519  2,705  56,224  5,940  62,164 
Depreciation and amortization 9,943  572  10,515  962  11,477 
Provision for foreclosure losses
 —  509  509  —  509 
Total expenses
 591,614  40,173  631,787  54,700  686,487 
Income tax benefit
 —  —  —  (8,803) (8,803)
Net (loss) income
$ (20,827) $ 78,872  $ 58,045  $ (59,005) $ (960)
The following table presents the financial performance and results by segment for the three months ended September 30, 2023:
(in thousands)
 Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 158,812  $ (686) $ 158,126  $ —  $ 158,126 
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net 2,755  —  2,755  —  2,755 
Loan servicing and other fees —  61,941  61,941  —  61,941 
Valuation adjustment of mortgage servicing rights —  22,077  22,077  —  22,077 
Interest income (expense), net
 1,388  13,208  14,596  (2,642) 11,954 
Other income, net 341  49  390  14  404 
Net revenue 163,296  96,589  259,885  (2,628) 257,257 
Expenses
Salaries, incentive compensation and benefits 123,978  8,104  132,082  10,555  142,637 
General and administrative 12,696  2,953  15,649  3,160  18,809 
Occupancy, equipment and communication 15,995  1,406  17,401  1,135  18,536 
Depreciation and amortization 3,435  17  3,452  212  3,664 
Provision for foreclosure losses
 —  84  84  —  84 
Total expenses
 156,104  12,564  168,668  15,062  183,730 
Income tax expense
 —  —  —  19,284  19,284 
Net income (loss)
 $ 7,192  $ 84,025  $ 91,217  $ (36,974) $ 54,243 
The following table presents the financial performance and results by segment for the nine months ended September 30, 2023:
(in thousands)
 Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 387,587  $ 115  $ 387,702  $ —  $ 387,702 
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net 5,061  —  5,061  —  5,061 
Loan servicing and other fees —  182,277  182,277  (38) 182,239 
Valuation adjustment of mortgage servicing rights —  (4,904) (4,904) —  (4,904)
Interest income (expense), net
 4,019  30,884  34,903  (7,711) 27,192 
Other income, net
 507  150  657  6  663 
Net revenue 397,174  208,522  605,696  (7,743) 597,953 
Expenses
Salaries, incentive compensation and benefits 344,259  23,173  367,432  31,228  398,660 
General and administrative 42,251  8,073  50,324  9,816  60,140 
Occupancy, equipment and communication 47,356  3,887  51,243  3,125  54,368 
Depreciation and amortization 10,198  377  10,575  488  11,063 
Provision for foreclosure losses —  554  554  —  554 
Total expenses
 444,064  36,064  480,128  44,657  524,785 
Income tax expense
 —  —  —  19,184  19,184 
Net (loss) income
 $ (46,890) $ 172,458  $ 125,568  $ (71,584) $ 53,984