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Guarantees
 9 Months Ended
Sep. 30, 2025
Guarantees  
Guarantees
Note 17 – Guarantees
The Corporation
 
has obligations
 
upon the
 
occurrence of
 
certain events
 
under financial
 
guarantees provided
 
in certain
 
contractual
agreements.
 
Also,
 
from
 
time
 
to
 
time,
 
the
 
Corporation
 
securitized
 
mortgage
 
loans
 
into
 
guaranteed
 
mortgage-backed
 
securities
subject, in certain instances, to lifetime credit recourse
 
on the loans that serve as collateral for
 
the mortgage-backed securities. The
Corporation has
 
not sold
 
any mortgage
 
loans subject
 
to credit
 
recourse since
 
2009. Also,
 
from time
 
to time,
 
the Corporation
 
may
sell, in
 
bulk sale
 
transactions, residential
 
mortgage loans
 
and Small
 
Business Administration
 
(“SBA”) commercial
 
loans subject
 
to
credit
 
recourse
 
or
 
to
 
certain
 
representations
 
and
 
warranties
 
from
 
the
 
Corporation
 
to
 
the
 
purchaser.
 
These
 
representations
 
and
warranties may
 
relate, for
 
example, to
 
borrower creditworthiness,
 
loan documentation,
 
collateral,
 
prepayment and
 
early payment
defaults. The
 
Corporation may
 
be required
 
to
 
repurchase the
 
loans under
 
the credit
 
recourse agreements
 
or
 
representation and
warranties
At September
 
30, 2025,
 
the Corporation
 
serviced $
445
 
million (December
 
31, 2024
 
- $
495
 
million) in
 
residential mortgage
 
loans
subject to
 
credit recourse
 
provisions, principally loans
 
associated with
 
FNMA and
 
FHLMC residential
 
mortgage loan
 
securitization
programs. In the event
 
of any customer default, pursuant to
 
the credit recourse provided, the
 
Corporation is required to repurchase
the loan or reimburse the
 
third-party investor for the loss
 
incurred. During the quarter and
 
nine months ended September 30,
 
2025,
the Corporation repurchased $
0.2
 
million and $
1.1
 
million, respectively, of unpaid principal balance in mortgage loans subject
 
to the
credit
 
recourse
 
provisions
 
(September
 
30,
 
2024
-
$
0.5
 
million
 
and
 
$
1.5
 
million,
 
respectively).
 
At
 
September
 
30,
 
2025,
 
the
Corporation’s liability
 
established to cover
 
the estimated credit
 
loss exposure
 
related to loans
 
sold or serviced
 
with credit
 
recourse
amounted to $
2
 
million (December 31, 2024 - $
3
 
million).
From
 
time
 
to
 
time, the
 
Corporation sells
 
loans and
 
agrees to
 
indemnify the
 
purchaser for
 
credit
 
losses
 
or
 
any
 
breach
 
of
 
certain
representations and warranties made in connection
 
with the sale.
Servicing agreements
 
relating to
 
the mortgage-backed
 
securities programs
 
of FNMA,
 
FHLMC and
 
GNMA, and
 
to mortgage
 
loans
sold or serviced to certain other investors, including FHLMC,
 
require the Corporation to advance funds to
 
make scheduled payments
of principal, interest, taxes and insurance, if such payments have not
 
been received from the borrowers. At September 30, 2025, the
Corporation serviced $
8.4
 
billion in mortgage loans for third parties, including the loans serviced with credit recourse (December 31,
2024 - $
9.0
 
billion). The Corporation generally recovers funds advanced pursuant to these arrangements from
 
the mortgage owner,
from liquidation proceeds when the mortgage
 
loan is foreclosed or,
 
in the case of FHA/VA
 
loans, under the applicable FHA
 
and
VA
insurance
 
and guarantees
 
programs. However,
 
in the
 
meantime, the
 
Corporation must
 
absorb the
 
cost
 
of the
 
funds
 
it
 
advances
during the
 
time the
 
advance is
 
outstanding. The
 
Corporation must
 
also bear
 
the costs
 
of attempting
 
to collect
 
on delinquent
 
and
defaulted
 
mortgage
 
loans.
 
In
 
addition,
 
if
 
a
 
defaulted
 
loan
 
is
 
not
 
cured,
 
the
 
mortgage
 
loan
 
would
 
be
 
canceled
 
as
 
part
 
of
 
the
foreclosure proceedings and the Corporation would
 
not receive any future servicing income
 
with respect to that loan. At
 
September
30, 2025, the outstanding
 
balance of funds advanced by
 
the Corporation under such
 
mortgage loan servicing agreements was
 
$
31
million
 
(December
 
31,
 
2024
 
-
 
$
44
 
million).
 
To
 
the
 
extent
 
the
 
mortgage
 
loans
 
underlying
 
the
 
Corporation’s
 
servicing
 
portfolio
experience
 
increased delinquencies,
 
the
 
Corporation would
 
be
 
required to
 
dedicate
 
additional cash
 
resources to
 
comply
 
with its
obligation to advance funds as well as incur additional
 
administrative costs related to increases in collection
 
efforts.
Popular,
 
Inc. Holding
 
Company (“PIHC”) fully
 
and unconditionally guarantees
 
certain borrowing
 
obligations issued by
 
certain of
 
its
100
% owned
 
consolidated subsidiaries
 
amounting to
 
$
94
 
million at
 
September 30,
 
2025 and
 
December 31,
 
2024, respectively.
 
In
addition, at both
 
September 30, 2025 and
 
December 31, 2024, PIHC
 
fully and unconditionally guaranteed
 
on a subordinated basis
$
193
 
million of capital securities (trust preferred securities) issued by wholly-owned issuing trust entities to the extent set forth in the
applicable
 
guarantee
 
agreement.
 
Refer
 
to
 
Note
 
17
 
to
 
the
 
Consolidated Financial
 
Statements
 
in
 
the
 
2024
 
Form
 
10-K
 
for
 
further
information on the trust preferred securities.