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SEGMENTS | 6 Months Ended
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Jun. 30, 2024
Segment Reporting [Abstract] |
SEGMENTS | SEGMENTS ASC 280, Segment Reporting, establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in that guidance, the Company has determined that it has two reportable segments — Origination and Servicing. Origination — The Company operates its loan origination business throughout the United States. Its licensed sales professionals and support staff cultivate deep relationships with referral partners and clients and provide a customized approach to the loan transaction whether it is a purchase or refinance. The origination segment is primarily responsible for loan origination, acquisition and sale activities. Servicing — The Company services loans out of its corporate office in San Diego, California. Properties of the loans serviced by the Company are disbursed throughout the United States and as of June 30, 2024 the Company serviced at least one loan in 49 different states. The servicing segment provides a steady stream of cash flow to support the origination segment, and more importantly it allows for the Company to build long-standing client relationships that drive repeat and referral business back to the origination segment to recapture the client’s next mortgage transaction. The servicing segment is primarily responsible for the servicing activities of all loans in the Company’s servicing portfolio, which includes, but is not limited to, collection and remittance of loan payments, managing borrower’s impound accounts for taxes and insurance, loan payoffs, loss mitigation and foreclosure activities. The Company does not allocate assets to its reportable segments as they are not included in the review performed by the CODM for purposes of assessing segment performance and allocating resources. The balance sheet is managed on a consolidated basis and is not used in the context of segment reporting. The Company also does not allocate certain corporate expenses, which are represented by All Other in the tables below. The following table presents the financial performance and results by segment for the three months ended June 30, 2024:
(in thousands) |  | Origination |  | Servicing |  | Total Segments |  | All Other |  | Total
Revenue |  |  |  |  |  |  |  |  |  |
Loan origination fees and gain on sale of loans, net |  | $ | 206,218 |  |  | $ | (370) |  |  | $ | 205,848 |  |  | $ | — |  |  | $ | 205,848 |
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net |  | 2,134 |  |  | — |  |  | 2,134 |  |  | — |  |  | 2,134 |
Loan servicing and other fees |  | — |  |  | 67,709 |  |  | 67,709 |  |  | — |  |  | 67,709 |
Valuation adjustment of mortgage servicing rights |  | — |  |  | 2,134 |  |  | 2,134 |  |  | — |  |  | 2,134 |
Interest (expense) income, net |  | (119) |  |  | 11,910 |  |  | 11,791 |  |  | (4,219) |  |  | 7,572 |
Other income (expense), net |  | 535 |  |  | 45 |  |  | 580 |  |  | (292) |  |  | 288 |
Net revenue |  | 208,768 |  |  | 81,428 |  |  | 290,196 |  |  | (4,511) |  |  | 285,685 |
Expenses |  |  |  |  |  |  |  |  |  |
Salaries, incentive compensation and benefits |  | 169,037 |  |  | 8,518 |  |  | 177,555 |  |  | 11,383 |  |  | 188,938 |
General and administrative |  | 21,798 |  |  | 2,855 |  |  | 24,653 |  |  | 3,745 |  |  | 28,398 |
Occupancy, equipment and communication |  | 17,876 |  |  | 735 |  |  | 18,611 |  |  | 1,737 |  |  | 20,348 |
Depreciation and amortization |  | 3,162 |  |  | 270 |  |  | 3,432 |  |  | 538 |  |  | 3,970 |
Reversal of foreclosure losses |  | — |  |  | (496) |  |  | (496) |  |  | — |  |  | (496) |
Total expenses |  | 211,873 |  |  | 11,882 |  |  | 223,755 |  |  | 17,403 |  |  | 241,158 |
Income tax expense |  | — |  |  | — |  |  | — |  |  | 6,936 |  |  | 6,936 |
Net (loss) income |  | $ | (3,105) |  |  | $ | 69,546 |  |  | $ | 66,441 |  |  | $ | (28,850) |  |  | $ | 37,591 |
The following table presents the financial performance and results by segment for the six months ended June 30, 2024:
(in thousands) |  | Origination |  | Servicing |  | Total Segments |  | All Other |  | Total
Revenue |  |  |  |  |  |  |  |  |  |
Loan origination fees and gain on sale of loans, net |  | $ | 339,882 |  |  | $ | 26 |  |  | $ | 339,908 |  |  | $ | — |  |  | $ | 339,908 |
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net |  | 5,364 |  |  | — |  |  | 5,364 |  |  | — |  |  | 5,364 |
Loan servicing and other fees |  | — |  |  | 133,497 |  |  | 133,497 |  |  | — |  |  | 133,497 |
Valuation adjustment of mortgage servicing rights |  | — |  |  | 22,912 |  |  | 22,912 |  |  | — |  |  | 22,912 |
Interest income (expense), net |  | 545 |  |  | 22,366 |  |  | 22,911 |  |  | (7,152) |  |  | 15,759 |
Other income (expense), net |  | 899 |  |  | 67 |  |  | 966 |  |  | (939) |  |  | 27 |
Net revenue |  | 346,690 |  |  | 178,868 |  |  | 525,558 |  |  | (8,091) |  |  | 517,467 |
Expenses |  |  |  |  |  |  |  |  |  |
Salaries, incentive compensation and benefits |  | 290,142 |  |  | 16,663 |  |  | 306,805 |  |  | 22,200 |  |  | 329,005 |
General and administrative |  | 42,346 |  |  | 6,717 |  |  | 49,063 |  |  | 8,546 |  |  | 57,609 |
Occupancy, equipment and communication |  | 34,811 |  |  | 1,701 |  |  | 36,512 |  |  | 3,651 |  |  | 40,163 |
Depreciation and amortization |  | 6,653 |  |  | 411 |  |  | 7,064 |  |  | 660 |  |  | 7,724 |
Reversal of foreclosure losses |  | — |  |  | (104) |  |  | (104) |  |  | — |  |  | (104) |
Total expenses |  | 373,952 |  |  | 25,388 |  |  | 399,340 |  |  | 35,057 |  |  | 434,397 |
Income tax expense |  | — |  |  | — |  |  | — |  |  | 17,079 |  |  | 17,079 |
Net (loss) income |  | $ | (27,262) |  |  | $ | 153,480 |  |  | $ | 126,218 |  |  | $ | (60,227) |  |  | $ | 65,991 |
The following table presents the financial performance and results by segment for the three months ended June 30, 2023:
(in thousands) |  | Origination |  | Servicing |  | Total Segments |  | All Other |  | Total
Revenue |  |  |  |  |  |  |  |  |  |
Loan origination fees and gain on sale of loans, net |  | $ | 136,499 |  |  | $ | 426 |  |  | $ | 136,925 |  |  | $ | — |  |  | $ | 136,925 |
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net |  | 2,306 |  |  | — |  |  | 2,306 |  |  | — |  |  | 2,306 |
Loan servicing and other fees |  | — |  |  | 60,249 |  |  | 60,249 |  |  | (38) |  |  | 60,211 |
Valuation adjustment of mortgage servicing rights |  | — |  |  | 27,890 |  |  | 27,890 |  |  | — |  |  | 27,890 |
Interest income (expense), net |  | 1,331 |  |  | 10,266 |  |  | 11,597 |  |  | (2,342) |  |  | 9,255 |
Other income, net |  | 168 |  |  | 49 |  |  | 217 |  |  | 7 |  |  | 224 |
Net revenue |  | 140,304 |  |  | 98,880 |  |  | 239,184 |  |  | (2,373) |  |  | 236,811 |
Expenses |  |  |  |  |  |  |  |  |  |
Salaries, incentive compensation and benefits |  | 127,024 |  |  | 7,495 |  |  | 134,519 |  |  | 10,384 |  |  | 144,903 |
General and administrative |  | 15,061 |  |  | 2,240 |  |  | 17,301 |  |  | 3,147 |  |  | 20,448 |
Occupancy, equipment and communication |  | 16,187 |  |  | 1,223 |  |  | 17,410 |  |  | 992 |  |  | 18,402 |
Depreciation and amortization |  | 3,364 |  |  | 218 |  |  | 3,582 |  |  | 79 |  |  | 3,661 |
Reversal of foreclosure losses |  | — |  |  | (1,044) |  |  | (1,044) |  |  | — |  |  | (1,044) |
Total expenses |  | 161,636 |  |  | 10,132 |  |  | 171,768 |  |  | 14,602 |  |  | 186,370 |
Income tax expense |  | — |  |  | — |  |  | — |  |  | 13,505 |  |  | 13,505 |
Net (loss) income |  | $ | (21,332) |  |  | $ | 88,748 |  |  | $ | 67,416 |  |  | $ | (30,480) |  |  | $ | 36,936 |
The following table presents the financial performance and results by segment for the six months ended June 30, 2023:
(in thousands) |  | Origination |  | Servicing |  | Total Segments |  | All Other |  | Total
Revenue |  |  |  |  |  |  |  |  |  |
Loan origination fees and gain on sale of loans, net |  | $ | 228,775 |  |  | $ | 801 |  |  | $ | 229,576 |  |  | $ | — |  |  | $ | 229,576 |
Gain on reverse mortgage loans held for investment and HMBS-related borrowings, net |  | 2,306 |  |  | — |  |  | 2,306 |  |  | — |  |  | 2,306 |
Loan servicing and other fees |  | — |  |  | 120,336 |  |  | 120,336 |  |  | (38) |  |  | 120,298 |
Valuation adjustment of mortgage servicing rights |  | — |  |  | (26,981) |  |  | (26,981) |  |  | — |  |  | (26,981) |
Interest income (expense), net |  | 2,631 |  |  | 17,676 |  |  | 20,307 |  |  | (5,069) |  |  | 15,238 |
Other income (expense), net |  | 166 |  |  | 101 |  |  | 267 |  |  | (8) |  |  | 259 |
Net revenue |  | 233,878 |  |  | 111,933 |  |  | 345,811 |  |  | (5,115) |  |  | 340,696 |
Expenses |  |  |  |  |  |  |  |  |  |
Salaries, incentive compensation and benefits |  | 220,281 |  |  | 15,069 |  |  | 235,350 |  |  | 20,673 |  |  | 256,023 |
General and administrative |  | 29,555 |  |  | 5,120 |  |  | 34,675 |  |  | 6,656 |  |  | 41,331 |
Occupancy, equipment and communication |  | 31,361 |  |  | 2,481 |  |  | 33,842 |  |  | 1,990 |  |  | 35,832 |
Depreciation and amortization |  | 6,763 |  |  | 360 |  |  | 7,123 |  |  | 276 |  |  | 7,399 |
Provision for foreclosure losses |  | — |  |  | 470 |  |  | 470 |  |  | — |  |  | 470 |
Total expenses |  | 287,960 |  |  | 23,500 |  |  | 311,460 |  |  | 29,595 |  |  | 341,055 |
Income tax benefit |  | — |  |  | — |  |  | — |  |  | (100) |  |  | (100) |
Net (loss) income |  | $ | (54,082) |  |  | $ | 88,433 |  |  | $ | 34,351 |  |  | $ | (34,610) |  |  | $ | (259) |

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- Definition The entire disclosure for reporting segments including data and tables. 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