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Fair Value Measurements | 12 Months Ended
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Dec. 31, 2021
Fair Value Disclosures [Abstract] |
Fair Value Measurements | NOTE 18. Fair Value Measurements: Certain of the Company’s assets and liabilities are carried at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company categorizes its assets and liabilities carried at fair value using a three-level hierarchy for fair value measurements that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the Company (observable inputs) and the Company’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. The hierarchy level assigned to the assets and liabilities is based on management’s assessment of the transparency and reliability of the inputs used to estimate the fair values at the measurement date. The three hierarchy levels are defined as follows: Level 1—Valuations based on unadjusted quoted market prices in active markets for identical assets or liabilities. Level 2—Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets or liabilities at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement, and involve management judgment. If the inputs used to measure fair value fall into different levels of the fair value hierarchy, the hierarchy level assigned is based upon the lowest level of input that is significant to the fair value measurement. Assets measured at fair value on a recurring basis The valuation techniques and inputs used by the Company to estimate the fair value of assets measured on a recurring basis are summarized as follows: Debt securities The fair values of debt securities were based on the market values obtained from independent pricing services that were evaluated using pricing models that vary by asset class and incorporate available trade, bid and other market information and price quotes from well-established, independent broker-dealers. The independent pricing services monitor market indicators, industry and economic events, and for broker-quoted only securities, obtain quotes from market makers or broker-dealers that they recognize to be market participants. The pricing services utilize the market approach in determining the fair values of the debt securities held by the Company. The Company obtains an understanding of the valuation models and assumptions utilized by the services and has controls in place to determine that the values provided represent fair values. The Company’s validation procedures include comparing prices received from the pricing services to quotes received from other third-party sources for certain securities with market prices that are readily verifiable. If the price comparison results in differences over a predefined threshold, the Company will assess the reasonableness of the changes relative to prior periods given the prevailing market conditions and assess changes in the issuers’ credit worthiness, performance of any underlying collateral and prices of the instrument relative to similar issuances. To date, the Company has not made any material adjustments to the fair value measurements provided by the pricing services. Typical inputs and assumptions to pricing models used to value the Company’s debt securities include, but are not limited to, benchmark yields, reported trades, broker-dealer quotes, credit spreads, credit ratings, bond insurance (if applicable), benchmark securities, bids, offers, reference data and industry and economic events. For mortgage-backed securities, inputs and assumptions may also include the structure of issuance, characteristics of the issuer, collateral attributes and prepayment speeds. Marketable e quity securities The fair values of marketable equity securities, including preferred and common stocks, were based on quoted market prices for identical assets that are readily and regularly available in an active market. The following tables present the fair values of the Company’s assets and liabilities, measured on a recurring basis, as of December 31, 2021 and 2020:
(in millions) | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bonds | $ | 123 |  |  | $ | — |  |  | $ | 123 |  |  | $ | — |
Municipal bonds |  | 1,649 |  |  |  | — |  |  |  | 1,649 |  |  |  | — |
Foreign government bonds |  | 227 |  |  |  | — |  |  |  | 227 |  |  |  | — |
Governmental agency bonds |  | 177 |  |  |  | — |  |  |  | 177 |  |  |  | — |
Governmental agency mortgage-backed securities |  | 5,607 |  |  |  | — |  |  |  | 5,607 |  |  |  | — |
U.S. corporate debt securities |  | 1,081 |  |  |  | — |  |  |  | 1,081 |  |  |  | — |
Foreign corporate debt securities |  | 498 |  |  |  | — |  |  |  | 498 |  |  |  | — |
|  | 9,362 |  |  |  | — |  |  |  | 9,362 |  |  |  | — |
Marketable equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Preferred stocks |  | 17 |  |  |  | 17 |  |  |  | — |  |  |  | — |
Common stocks |  | 640 |  |  |  | 640 |  |  |  | — |  |  |  | — |
|  | 657 |  |  |  | 657 |  |  |  | — |  |  |  | — |
Servicing related assets |  | 27 |  |  |  | — |  |  |  | 11 |  |  |  | 16 |
Total assets | $ | 10,046 |  |  | $ | 657 |  |  | $ | 9,373 |  |  | $ | 16 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing related liabilities | $ | 9 |  |  | $ | — |  |  | $ | — |  |  | $ | 9 |
Total liabilities | $ | 9 |  |  | $ | — |  |  | $ | — |  |  | $ | 9 |
(in millions) | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury bonds | $ | 81 |  |  | $ | — |  |  | $ | 81 |  |  | $ | — |
Municipal bonds |  | 1,248 |  |  |  | — |  |  |  | 1,248 |  |  |  | — |
Foreign government bonds |  | 199 |  |  |  | — |  |  |  | 199 |  |  |  | — |
Governmental agency bonds |  | 264 |  |  |  | — |  |  |  | 264 |  |  |  | — |
Governmental agency mortgage-backed securities |  | 3,474 |  |  |  | — |  |  |  | 3,474 |  |  |  | — |
U.S. corporate debt securities |  | 682 |  |  |  | — |  |  |  | 682 |  |  |  | — |
Foreign corporate debt securities |  | 407 |  |  |  | — |  |  |  | 407 |  |  |  | — |
|  | 6,355 |  |  |  | — |  |  |  | 6,355 |  |  |  | — |
Marketable equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Preferred stocks |  | 19 |  |  |  | 19 |  |  |  | — |  |  |  | — |
Common stocks |  | 445 |  |  |  | 445 |  |  |  | — |  |  |  | — |
|  | 464 |  |  |  | 464 |  |  |  | — |  |  |  | — |
Total assets | $ | 6,819 |  |  | $ | 464 |  |  | $ | 6,355 |  |  | $ | — |
There were no transfers between Levels 1, 2 and 3 during the years ended December 31, 2021 and 2020. Transfers into or out of the Level 3 category occur when unobservable inputs become either more, or less, significant to the fair value measurement. The Company’s policy is to recognize transfers between levels in the fair value hierarchy at the end of the reporting period. Financial instruments not measured at fair value In estimating the fair values of its financial instruments not measured at fair value, the Company used the following methods and assumptions: Cash and cash equivalents The carrying amount for cash and cash equivalents approximates fair value due to the short-term maturity of these investments. Deposits with banks The fair value of deposits with banks is estimated based on rates currently offered for deposits of similar remaining maturities, where applicable. Notes receivable, net The fair value of notes receivable, net is estimated based on current market rates offered for notes with similar maturities and credit quality. Secured financings receivable The carrying amount of secured financings receivable approximates fair value due to the short-term nature of these assets. Loans eligible for repurchase As the Company has the unilateral right to repurchase these loans at the unpaid principal balance, the carrying amount, which is based on the unpaid principal balance, approximates fair value. Secured financings payable (excluding servicing related liabilities) The carrying amount of secured financings payable approximates fair value due to the short-term nature of these liabilities. Liability for loans eligible for repurchase As the Company has the unilateral right to repurchase these loans at the unpaid principal balance, the carrying amount, which is based on the unpaid principal balance, approximates fair value. Notes and contracts payable The fair value of notes and contracts payable is estimated based on current rates offered for debt of similar remaining maturities. The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value as of December 31, 2021 and 2020:
| Carrying |  | Estimated fair value |
(in millions) | Amount |  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 1,228 |  | $ | 1,228 |  |  | $ | 1,228 |  |  | $ | — |  |  | $ | — |
Deposits with banks | $ | 58 |  | $ | 58 |  |  | $ | 13 |  |  | $ | 45 |  |  | $ | — |
Notes receivable, net | $ | 32 |  | $ | 32 |  |  | $ | — |  |  | $ | — |  |  | $ | 32 |
Secured financings receivable | $ | 565 |  | $ | 565 |  |  | $ | — |  |  | $ | 565 |  |  | $ | — |
Loans eligible for repurchase | $ | 47 |  | $ | 47 |  |  | $ | — |  |  | $ | 47 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Secured financings payable (1) | $ | 529 |  | $ | 529 |  |  | $ | — |  |  | $ | 529 |  |  | $ | — |
Liability for loans eligible for repurchase | $ | 47 |  | $ | 47 |  |  | $ | — |  |  | $ | 47 |  |  | $ | — |
Notes and contracts payable | $ | 1,648 |  | $ | 1,724 |  |  | $ | — |  |  | $ | 1,720 |  |  | $ | 4 |
(1) | Excludes servicing related liabilities, which are measured at fair value on a recurring basis.
| Carrying |  | Estimated fair value |
(in millions) | Amount |  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 1,275 |  | $ | 1,275 |  |  | $ | 1,275 |  |  | $ | — |  |  | $ | — |
Deposits with banks | $ | 46 |  | $ | 46 |  |  | $ | 6 |  |  | $ | 40 |  |  | $ | — |
Notes receivable, net | $ | 30 |  | $ | 30 |  |  | $ | — |  |  | $ | — |  |  | $ | 30 |
Secured financings receivable | $ | 748 |  | $ | 748 |  |  | $ | — |  |  | $ | 748 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Secured financings payable | $ | 516 |  | $ | 516 |  |  | $ | — |  |  | $ | 516 |  |  | $ | — |
Notes and contracts payable | $ | 1,011 |  | $ | 1,131 |  |  | $ | — |  |  | $ | 1,125 |  |  | $ | 6 |
Assets measured at fair value on a non-recurring basis The Company measures the fair value of certain assets on a non-recurring basis when events or changes in circumstances indicate that the carrying amount may not be recoverable. These assets generally include goodwill, title plants and other indexes, other intangible assets, property and equipment, equity-method investments and non-marketable equity securities. In connection with the Company’s decision to exit the property and casualty insurance business in 2020, the Company recognized impairment losses of $34 million, $18 million and $3 million to goodwill, property and equipment and other intangible assets, respectively, for the year ended December 31, 2020. The impairment charges were determined based on fair values utilizing Level 3 unobservable inputs. See Note 2 Exit of Property and Casualty Insurance Business for further information on the exit of the business.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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