Annual report [Section 13 and 15(d), not S-K Item 405]

SEGMENTS

v3.25.0.1
SEGMENTS
 12 Months Ended
Dec. 31, 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, based on the Company’s business lines that offer different products and services, as described below.
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 primarily 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 December 31, 2024 the Company serviced at least one loan in 49 different states and the District of Columbia. 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’s CODM is the executive management team consisting of the Chief Executive Officer and the President and Chief Operating Officer. The CODM uses net income for both reportable segments as its primary measure in assessing segment performance and how to allocate resources. 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 year ended December 31, 2024:
(in thousands)
 Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 762,939  $ 852  $ 763,791  $ —  $ 763,791 
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net 11,043  —  11,043  —  11,043 
Loan servicing and other fees —  275,324  275,324  —  275,324 
Valuation adjustment of mortgage servicing rights —  (38,545) (38,545) —  (38,545)
Interest income
 91,013  53,389  144,402  2,047  146,449 
Interest expense
 (86,824) (4,070) (90,894) (18,949) (109,843)
Other income (expense), net 2,321  186  2,507  (1,015) 1,492 
Net revenue 780,492  287,136  1,067,628  (17,917) 1,049,711 
Expenses
Salaries, incentive compensation and benefits 639,151  35,705  674,856  49,400  724,256 
General and administrative 76,977  14,075  91,052  16,052  107,104 
Occupancy, equipment and communication 70,929  3,825  74,754  7,785  82,539 
Depreciation and amortization 13,420  680  14,100  1,038  15,138 
Provision for foreclosure losses —  1,617  1,617  —  1,617 
Total expenses
 800,477  55,902  856,379  74,275  930,654 
Income tax expense —  —  —  22,125  22,125 
Net (loss) income $ (19,985) $ 231,234  $ 211,249  $ (114,317) $ 96,932 
The following table presents the financial performance and results by segment for the year ended December 31, 2023:
(in thousands)
 Origination Servicing Total
Segments		 All Other Total
Revenue
Loan origination fees and gain on sale of loans, net $ 501,789  $ (486) $ 501,303  $ —  $ 501,303 
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net 8,233  —  8,233  —  8,233 
Loan servicing and other fees —  246,144  246,144  —  246,144 
Valuation adjustment of mortgage servicing rights —  (139,560) (139,560) —  (139,560)
Interest income
 57,384  45,932  103,316  1,088  104,404 
Interest expense
 (51,840) (2,908) (54,748) (11,616) (66,364)
Other income, net 805  199  1,004  23  1,027 
Net revenue 516,371  149,321  665,692  (10,505) 655,187 
Expenses
Salaries, incentive compensation and benefits 456,059  31,298  487,357  42,504  529,861 
General and administrative 57,683  11,191  68,874  14,339  83,213 
Occupancy, equipment and communication 62,799  4,785  67,584  4,892  72,476 
Depreciation and amortization 13,485  496  13,981  599  14,580 
Provision for foreclosure losses —  1,188  1,188  —  1,188 
Total expenses
 590,026  48,958  638,984  62,334  701,318 
Income tax benefit —  —  —  (6,994) (6,994)
Net (loss) income $ (73,655) $ 100,363  $ 26,708  $ (65,845) $ (39,137)