Quarterly report pursuant to Section 13 or 15(d)

Investor Reserves

v3.20.2
Investor Reserves
9 Months Ended
Sep. 30, 2020
Investor Reserves [Abstract]  
Investor Reserves

8. Investor Reserves

The Company’s estimate of the investor reserves consider the current macro-economic environment and recent repurchase trends; however, if the Company experiences a prolonged period of higher repurchase and indemnification activity, then the realized losses from loan repurchases and indemnifications may ultimately be in excess of the liability. The maximum exposure under the Company’s representations and warranties would be the outstanding principal balance and any premium received on all loans ever sold by the Company, less any loans that have already been paid in full by the mortgagee, that have defaulted without a breach of representations and warranties, that have been indemnified via settlement or make-whole, or that have been repurchased. Additionally, the Company may receive relief of certain representations and warranty obligations on loans sold to FNMA or FHLMC on or after January 1, 2013 if FNMA or FHLMC satisfactorily concludes a quality control loan file review or if the borrower meets certain acceptable payment history requirements within 12 or 36 months after the loan is sold to FNMA or FHLMC.

The activity of the investor reserves was as follows for the three and nine months ended September 30, 2020 and 2019:

 

 

 

For the three months ended

September 30,

 

 

 

2020

 

 

2019

 

Balance - beginning of period

 

$

23,886

 

 

$

14,034

 

Utilization of reserve for loan losses

 

 

(3,601

)

 

 

(1,405

)

Provision (received by) charged to operations

 

 

(1,044

)

 

 

3,150

 

Balance - end of period

 

$

19,241

 

 

$

15,779

 

 

 

 

For the nine months ended

September 30,

 

 

 

2020

 

 

2019

 

Balance - beginning of year

 

$

16,521

 

 

$

14,312

 

Utilization of reserve for loan losses

 

 

(7,289

)

 

 

(5,338

)

Provision charged to operations

 

 

10,009

 

 

 

6,805

 

Balance - end of period

 

$

19,241

 

 

$

15,779