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Derivative Financial Instruments | 6 Months Ended
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Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Derivative Financial Instruments The Company uses forward commitments to hedge the interest rate risk exposure on certain fixed and adjustable rate commitments. Utilization of forward commitments involves some degree of basis risk. Basis risk is defined as the risk that the hedged instrument’s price does not move in parallel with the increase or decrease in the market price of the hedged financial instrument. The Company calculates an expected hedge ratio to mitigate a portion of this risk. The Company’s derivative instruments are not designated as accounting hedging instruments, and therefore, changes in fair value are recorded in current period Net income (loss). Hedging gains and losses are included in Gain on sale of loans, net and Change in fair value of MSRs in the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss). Net hedging gains were as follows:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Hedging gains (1) | $ | 80,314 |  |  | $ | 180,909 |  |  | $ | 144,084 |  |  | $ | 101,776 |
(1) Includes the change in fair value related to derivatives economically hedging MSRs identified for sale. Refer to Note 2, Fair Value Measurements, for additional information on the fair value of derivative financial instruments. Notional and Fair Value The notional and fair values of derivative financial instruments not designated as hedging instruments were as follows:
| Notional Value |  | Derivative Asset |  | Derivative Liability
Balance at June 30, 2024: |  |  |  |  |
IRLCs, net of loan funding probability (1) | $ | 7,955,784 |  |  | $ | 170,381 |  |  | $ | — |
Forward commitments (2) | $ | 15,103,998 |  |  | $ | 13,025 |  |  | $ | 8,508 |
Balance at December 31, 2023: |  |  |  |  |
IRLCs, net of loan funding probability (1) | $ | 4,728,040 |  |  | $ | 132,870 |  |  | $ | — |
Forward commitments (2) | $ | 9,650,041 |  |  | $ | 26,614 |  |  | $ | 142,988 |
(1) IRLCs are also discussed in Note 9, Commitments, Contingencies, and Guarantees. (2) Includes the fair value and net notional value related to derivatives economically hedging MSRs identified for sale. Counterparty agreements for forward commitments contain master netting agreements. The table below presents the gross amounts of recognized assets and liabilities subject to master netting agreements. Margin cash is cash that is exchanged by counterparties to be held as collateral related to these derivative financial instruments. Margin cash held on behalf of counterparties is recorded in Cash and cash equivalents, and the related liability is classified in Other liabilities in the Condensed Consolidated Balance Sheets. Margin cash pledged to counterparties is excluded from Cash and cash equivalents and instead recorded in Other assets as a margin call receivable from counterparties in the Condensed Consolidated Balance Sheets. The Company had $26,329 and $66,598 of margin cash pledged to counterparties related to these forward commitments at June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024 and December 31, 2023, there was $40 and $250 of margin cash held on behalf of counterparties, respectively.
| Gross Amount of Recognized Assets or Liabilities |  | Gross Amounts Offset in the Condensed Consolidated Balance Sheets |  | Net Amounts Presented in the Condensed Consolidated Balance Sheets
Offsetting of Derivative Assets |  |  |  |  |
Balance at June 30, 2024: |  |  |  |  |
Forward commitments | $ | 33,214 |  |  | $ | (20,189) |  |  | $ | 13,025 |
Balance at December 31, 2023: |  |  |  |  |
Forward commitments | $ | 37,647 |  |  | $ | (11,033) |  |  | $ | 26,614 |
Offsetting of Derivative Liabilities |  |  |  |  |
Balance at June 30, 2024: |  |  |  |  |
Forward commitments | $ | (47,916) |  |  | $ | 39,408 |  |  | $ | (8,508) |
Balance at December 31, 2023: |  |  |  |  |
Forward commitments | $ | (174,545) |  |  | $ | 31,557 |  |  | $ | (142,988) |
Counterparty Credit Risk Credit risk is defined as the possibility that a loss may occur from the failure of another party to perform in accordance with the terms of the contract, which exceeds the value of existing collateral, if any. The Company attempts to limit its credit risk by dealing with creditworthy counterparties and obtaining collateral where appropriate. The Company is exposed to credit loss in the event of contractual nonperformance by its trading counterparties and counterparties to its various over-the-counter derivative financial instruments noted in the above Notional and Fair Value discussion. The Company manages this credit risk by selecting only counterparties that it believes to be financially strong, spreading the credit risk among many such counterparties, placing contractual limits on the amount of unsecured credit extended to any single counterparty, and entering into netting agreements with the counterparties as appropriate. Certain counterparties have master netting agreements. The master netting agreements contain a legal right to offset amounts due to and from the same counterparty. Derivative assets in the Condensed Consolidated Balance Sheets represent derivative contracts in a gain position, net of loss positions with the same counterparty and, therefore, also represent the Company’s maximum counterparty credit risk. The Company incurred no credit losses due to nonperformance of any of its counterparties during the three and six months ended June 30, 2024 and 2023.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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