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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 16. Income Taxes The components of income tax expense were as follows:
| Year Ended December 31,
Total Income Tax Expense | 2024 |  | 2023 |  | 2022
Current Income Taxes |  |  |  |  |
Federal | $ | 1 |  |  | $ | 3 |  |  | $ | (6) |
State | (10) |  |  | 16 |  |  | 8 |
Total current income taxes | (9) |  |  | 19 |  |  | 2 |
Deferred Income Taxes |  |  |  |  |
Federal | 186 |  |  | 110 |  |  | 245 |
State | 55 |  |  | 25 |  |  | 44 |
Total deferred income taxes | 241 |  |  | 135 |  |  | 289 |
Total income tax expense | $ | 232 |  |  | $ | 154 |  |  | $ | 291 |
The following table presents a reconciliation of the income tax provision computed at the U.S. federal statutory tax rate to the actual effective tax rate:
| Year Ended December 31,
Reconciliation of the Income Tax Provision | 2024 |  | 2023 |  | 2022
Tax Expense at Federal Statutory Rate | $ | 189 |  |  | $ | 137 |  |  | $ | 255 |
Effect of: |  |  |  |  |
State taxes, net of federal benefit | 36 |  |  | 32 |  |  | 39 |
Nondeductible executive compensation | 13 |  |  | 11 |  |  | 8 |
Share based compensation | (10) |  |  | (9) |  |  | (9) |
Bargain purchase gain(1) | 1 |  |  | (20) |  |  | — |
Other, net | 3 |  |  | 3 |  |  | (2) |
Total income tax expense | $ | 232 |  |  | $ | 154 |  |  | $ | 291 |
(1)Amount is related to the bargain purchase gain recorded in connection with the Home Point Acquisition. Refer to Note 3, Acquisitions, for further details. Temporary differences and carryforwards that give rise to deferred tax assets and liabilities are comprised of the following:
Deferred Tax Assets and Liabilities | December 31, 2024 |  | December 31, 2023
Deferred Tax Assets |  |  |
Effect of: |  |  |
Goodwill and intangible assets | $ | 470 |  |  | $ | 585 |
Loss carryforwards (federal, state & capital) | 121 |  |  | 85 |
Loss reserves | 84 |  |  | 101 |
Accruals | 15 |  |  | 20 |
Lease liability | 14 |  |  | 22 |
Depreciation and amortization, net | 10 |  |  | 8 |
Other, net | 18 |  |  | 12 |
Total deferred tax assets | 732 |  |  | 833 |
Deferred Tax Liabilities |  |  |
MSR amortization and mark-to-market, net | (428) |  |  | (282) |
Other investment assets | (53) |  |  | (53) |
Right-of-use assets | (11) |  |  | (18) |
Prepaid assets | — |  |  | (1) |
Total deferred tax liabilities | (492) |  |  | (354) |
Valuation allowance | (10) |  |  | (7) |
Deferred tax assets, net(1) | $ | 230 |  |  | $ | 472 |
(1)The Company elected to account for the Global Intangible Low-Taxed Income (“GILTI”) tax expense in the period in which it is incurred. As a result, no deferred tax impact of GILTI has been provided in the consolidated financial statements. The Company has federal NOL carryforwards (pre-tax) of $521 and $354 as of December 31, 2024 and 2023, respectively. The Company believes it is more likely than not that its deferred tax assets will be realized except for certain federal Code Section 382 limited NOLs that begin to expire with the 2027 tax year, if unused, and state NOL carryforwards valued at $10 that began to expire with the 2024 tax year, if unused. Accordingly, the Company has recorded a federal valuation allowance of $7 for both years as of December 31, 2024 and 2023 related to these NOL carryforwards. The state valuation allowance was immaterial as of December 31, 2024 and 2023. The Company does not expect any future tax loss limitations under Sections 382 and 384 that would impact its utilization of remaining federal or state NOL carryforwards. The Company files income tax returns in the U.S. federal jurisdiction and numerous U.S. state jurisdictions. As of December 31, 2024, the Company is currently under examination by the Internal Revenue Service for tax years 2018, 2019, and 2020. The years open to examination by federal, state and local government authorities vary by jurisdiction. Below is a reconciliation of the changes in the federal and state uncertain tax position balances, exclusive of interest and penalties.
| Year Ended December 31,
Unrecognized Tax Benefits (exclusive of interest and penalties) | 2024 |  | 2023 |  | 2022
Balance - beginning of year | $ | 6 |  |  | $ | — |  |  | $ | — |
Increases in tax positions of prior years | 2 |  |  | 6 |  |  | — |
Decreases in tax positions as a result of lapses in statute | (1) |  |  | — |  |  | — |
Settlements | (1) |  |  | — |  |  | — |
Balance - end of year | $ | 6 |  |  | $ | 6 |  |  | $ | — |

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