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Commitments and Contingencies | 9 Months Ended
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Sep. 30, 2025
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES We are a defendant in various litigation matters arising in the ordinary course of business, some of which involve claims for damages that are substantial in amount. Professional Indemnity Insurance In order to better manage our global insurance program and support our risk management efforts, we supplement our traditional insurance coverage for certain types of claims by using a wholly-owned captive insurance company. The level of risk retained by our captive insurance company, with respect to professional indemnity claims, is up to $10.0 million per claim. We contract third-party insurance companies to provide coverage of risk in excess of this amount. When a potential loss event occurs, we estimate the ultimate cost of the claim and accrue the amount in other liabilities on our Consolidated Balance Sheets when probable and estimable. In addition, we have established receivables from third-party insurance providers for claim amounts in excess of the risk retained by our captive insurance company. There was no such receivable recorded as of September 30, 2025. As of December 31, 2024, a receivable of $0.5 million was included in Notes and other receivables on our Consolidated Balance Sheets. The following table shows the professional indemnity accrual activity and related payments.
(in millions) |
December 31, 2024 | $ | 4.2 |
New claims | 3.9 |
Prior year claims adjustments (including foreign currency changes) | 0.3 |
Claims paid | (6.1) |
September 30, 2025 | $ | 2.3 |
December 31, 2023 | $ | 9.4 |
New claims | 0.3 |
Prior year claims adjustments (including foreign currency changes) | 1.2 |
Claims paid | (7.2) |
September 30, 2024 | $ | 3.7 |
Delegated Underwriting and Servicing ("DUS") Program Loan Loss-Sharing As a participant in the DUS program, we retain a portion of the risk of loss for loans that are originated and sold under the DUS program. Net losses on defaulted loans are shared with Fannie Mae based upon established loss-sharing ratios. Generally, we share approximately one-third of incurred losses, subject to a cap of 20% of the principal balance of the mortgage at origination. As of September 30, 2025 and December 31, 2024, we had loans, funded and sold, subject to such loss-sharing arrangements with an aggregate unpaid principal balance of $24.7 billion and $23.0 billion, respectively. For all DUS program loans with loss-sharing obligations, we record a non-contingent liability equal to the estimated fair value of the guarantee obligations undertaken upon sale of the loan, which reduces our gain on sale of the loan. Subsequently, this liability is amortized over the estimated life of the loan and recognized as Revenue on the Consolidated Statements of Comprehensive Income. As of September 30, 2025 and December 31, 2024, the loss-sharing guarantee obligations were $29.9 million and $30.0 million, respectively, and are included in other liabilities on our Consolidated Balance Sheets. The loss-sharing aspect of the program represents an off-balance sheet credit exposure. We record a separate contingent reserve for this risk calculated on an individual loan level. As of September 30, 2025 and December 31, 2024, the loan loss guarantee reserve was $29.7 million and $28.5 million, respectively, and is included within Other liabilities on our Consolidated Balance Sheets. In June of 2025, we entered into an enhanced loss-sharing agreement with Fannie Mae associated with a specific three-loan portfolio. The agreement finalized our portion of the loss at $20.6 million and, as a result, there is no residual loss exposure for the subject loans. There were no loan losses incurred during the nine months ended September 30, 2024.

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