Quarterly report pursuant to Section 13 or 15(d)

WAREHOUSE LINES OF CREDIT

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WAREHOUSE LINES OF CREDIT
 9 Months Ended
Sep. 30, 2022
Line of Credit Facility [Abstract]  
WAREHOUSE LINES OF CREDIT WAREHOUSE LINES OF CREDITWarehouse lines of credit consisted of the following at September 30, 2022 and December 31, 2021. Changes subsequent to September 30, 2022 have been described in the notes referenced with the below table.
Maturity as of September 30,
2022		 September 30, 2022 December 31, 2021
$600 million master repurchase facility agreement(1)
January 2023 $ 67,594  $ 472,646 
$150 million master repurchase facility agreement(2)
August 2023 25,979  147,750 
$400 million master repurchase facility agreement(3)
March 2023 253,963  295,444 
$200 million master repurchase facility agreement(4)
May 2023 17,853  146,182 
$200 million master repurchase facility agreement(5)
September 2023 50,158  133,772 
$400 million master repurchase facility agreement(6)
June 2023 160,253  377,416 
$200 million master repurchase facility agreement(7)
April 2023 77,395  117,935 
$100 million master repurchase facility agreement(8)
N/A 43,388  136,173 
$75 million master repurchase facility agreement(9)
March 2025 43,427  33,452 
$200 million master repurchase facility agreement(10)
N/A —  26,947 
$300 million master repurchase facility agreement(11)
N/A 81,816  35,099 
$75 million master repurchase facility agreement(12)
N/A —  5,727 
821,826  1,928,543 
Prepaid commitment fees (1,934) (1,065)
Net warehouse lines of credit $ 819,892  $ 1,927,478 
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(1)The variable interest rate is calculated using a base rate tied to the Secured Overnight Financing Rate ("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 $750,000.
(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. Subsequent to September 30, 2022, this facility was reduced to $300.0 million and the minimum deposit required was reduced to $1.5 million.
(4)The variable interest rate is calculated using a base rate plus SOFR, with a floor of 0.25% plus the applicable interest rate margin.
(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 with a floor of 0.25%, plus the applicable interest rate margin.
(8)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.
(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 four years.
(10)This facility matured in January 2022 and was not renewed.
(11)This facility agreement is due on demand and the variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.75%.
(12)This facility was terminated prior to maturity.
The weighted average interest rate for warehouse lines of credit was 2.95% and 2.40% at September 30, 2022 and December 31, 2021, 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 $49.7 million and $46.7 million in its warehouse buy down accounts as offsets to certain lines of credit at September 30, 2022 and December 31, 2021, 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, positive quarterly income and limitations on additional indebtedness, dividends, sale of assets, and decline in the mortgage loan servicing portfolio’s fair value. At September 30, 2022 and December 31, 2021, the Company believes it 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 was no outstanding balance as of September 30, 2022 and December 31, 2021.
NOTES PAYABLE
Revolving Notes:
In January 2014, the Company entered into an agreement for a revolving note from one of its warehouse banks, which it can draw upon as needed and has renewed on an annual basis. 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 70% of the available facility. The revolving note has a maximum committed amount of $135.0 million and the agreement allows for the Company to increase the committed amount up to $200.0 million. In August 2022, the Company amended and restated the agreement to extend the expiration date of the revolving notes to August 2027. The Company has the option to convert the outstanding balance of the revolving note into a term note at its discretion. At September 30, 2022 and December 31, 2021, the Company had no balance and $60.0 million, respectively, in outstanding borrowings on this credit facility.
In July 2017, the Company entered into an agreement for a revolving note of up to $25.0 million from one of its warehouse banks, which it can draw upon as needed and has renewed on an annual basis. In July 2020, the Company amended the agreement by extending the expiration date to July 2021 and increasing the revolving note up to $65.0 million. In July 2021, the Company further amended the agreement by extending the expiration date to July 2022. In February 2022, the Company again amended the agreement and increased the revolving note up to $100.0 million. In June 2022, the Company further amended the agreement by extending the expiration date to June 2023. 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 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 combined warehouse and MSR facility. The lender has the option to convert the outstanding balance of the revolving note into a term note at its discretion. At September 30, 2022 and December 31, 2021, the Company had no balance and $65.0 million, respectively, in outstanding borrowings on this credit facility.
Term Note:
In January 2014, the Company entered into a term note agreement with one of its warehouse banks collateralized by the Company’s FNMA MSRs. In March 2021, the term note was amended and restated, at which time there was an outstanding amount of $76.5 million. The outstanding amount of $76.5 million was rolled into a new term note with a commitment of $125.0 million. The note allows for the committed amount to be increased to a maximum of $175.0 million. The Company could draw on the committed amount through March 2022 and the note matures in March 2024. Interest on the principal is paid monthly and is based upon a margin plus the highest of the (i) Prime Rate, (ii) Federal Funds Rate plus 0.5%, or (iii) the Eurodollar Base Rate plus 1.0%. Principal payments of 5% of the outstanding balance as of March 31, 2022 are due quarterly beginning April
15, 2022, with the remaining principal balance due upon maturity. The term note also has an unused facility fee on the average unused balance, which is also paid quarterly. At September 30, 2022 and December 31, 2021, the Company had an outstanding balance of $112.5 million and $125.0 million, respectively, on this facility. 
The minimum calendar year payments of the Company’s term note as of September 30, 2022 are as follows:
2022 $ 6,250 
2023 25,000 
2024 81,250 
Total $ 112,500