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WAREHOUSE LINES OF CREDIT, NET | 6 Months Ended
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Jun. 30, 2024
Line of Credit Facility [Abstract] |
WAREHOUSE LINES OF CREDIT, NET | WAREHOUSE LINES OF CREDIT, NET Warehouse lines of credit consisted of the following at June 30, 2024 and December 31, 2023. Changes subsequent to June 30, 2024 have been described in the notes referenced with the below table.
|  |  | (in thousands)
| Maturity |  | June 30, 2024 |  | December 31, 2023
$165 million master repurchase facility agreement(1) | January 2025 |  | $ | 147,062 |  |  | $ | 122,462 |
$250 million master repurchase facility agreement(2) | August 2024 |  | 198,856 |  |  | 99,059 |
$400 million master repurchase facility agreement(3) | August 2024 |  | 366,086 |  |  | 158,412 |
$200 million master repurchase facility agreement(4) | May 2025 |  | 141,856 |  |  | 87,252 |
$200 million master repurchase facility agreement(5) | September 2024 |  | 139,963 |  |  | 91,039 |
$400 million master repurchase facility agreement(6) | September 2024 |  | 273,412 |  |  | 134,964 |
$200 million master repurchase facility agreement(7) | N/A |  | 161,931 |  |  | 30,185 |
$200 million master repurchase facility agreement(8) | N/A |  | 163,022 |  |  | 78,682 |
$75 million master repurchase facility agreement(9) | N/A |  | 26,944 |  |  | 34,280 |
|  |  | 1,619,132 |  |  | 836,335 |
Prepaid commitment fees |  |  | (2,563) |  |  | (2,554) |
Warehouse lines of credit, net |  |  | $ | 1,616,569 |  |  | $ | 833,781 |
______________________________ (1)The variable interest rate is calculated using a base rate tied to SOFR. (2)The variable interest rate is calculated using a base rate tied to SOFR, plus the applicable interest rate margin. This line of credit requires a minimum deposit of $1.3 million, included in restricted cash. (3)The variable interest rate is calculated using a base rate tied to SOFR, plus the applicable interest rate margin. This facility requires a minimum deposit of $2.0 million, included in restricted cash. (4)The variable interest rate is calculated using a base rate plus SOFR, with a floor of 0.375% plus the applicable interest rate margin. This facility requires a minimum deposit of $300,000, included in restricted cash. (5)The variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.40%, plus the applicable interest rate margin. (6)The variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.50%, plus the applicable interest rate margin. Subsequent to June 30, 2024, this line was increased to $500.0 million. (7)The variable interest rate is calculated using a base rate tied to SOFR, plus the applicable interest rate margin. This facility’s maturity date is 30 days from written notice by either the financial institution or the Company. (8)This facility agreement has a maturity of 364 days on the first $150.0 million committed amount and $50.0 million is due on demand. The variable interest rate is calculated using a base rate tied to SOFR with a floor of 0.75%. (9)The interest rate on this facility is 3.375%. This facility is used for GNMA delinquent buyouts. Each buyout represents a separate transaction that can remain on the facility for up to five years. The weighted average interest rate for warehouse lines of credit was 7.0% at June 30, 2024 and December 31, 2023. All warehouse lines of credit are collateralized by underlying mortgages and related documents. Existing balances on warehouse lines are repaid through the sale proceeds from the collateralized loans held for sale. The Company had cash balances of $6.4 million and $8.7 million in its warehouse buy down accounts as offsets to certain lines of credit at June 30, 2024 and December 31, 2023, respectively. The agreements governing the Company’s warehouse lines of credit contain covenants that include certain financial requirements, including maintenance of maximum adjusted leverage ratio, minimum net worth, minimum tangible net worth, minimum liquidity, adjusted pre-tax net income and limitations on additional indebtedness, dividends, sale of assets, and decline in the mortgage loan servicing portfolio’s fair value. At June 30, 2024 and December 31, 2023, the Company was in compliance with all debt covenants. The Company has an optional short-term financing agreement between FNMA and the lender described as “As Soon As Pooled” (“ASAP”). The Company can elect to assign FNMA Mortgage-Backed Security (“MBS”) trades to FNMA in advance of settlement and enter into a financing transaction and revenue related to the assignment is deferred until the final pool settlement date. The Company determines utilization based on warehouse availability and cash needs. There were no outstanding balances as of June 30, 2024 and December 31, 2023 on the ASAP financing. NOTES PAYABLE Revolving Notes The Company has an agreement for a revolving note from one of its warehouse banks, which it can draw upon as needed. The agreement currently expires in August 2027. Borrowings on the revolving note are collateralized by the Company’s GNMA MSRs. Monthly interest on the outstanding balance is calculated using a base rate tied to the SOFR rate plus the applicable margin, with a SOFR floor of 0.5%. The revolving note also has an unused facility fee on the average unused balance, which is also paid quarterly. The unused facility fee is waived if the average outstanding balance exceeds 50% of the available facility. The revolving note has a committed amount of $135.0 million and the agreement allows for the Company to increase the committed amount up to a maximum of $200.0 million. The Company has the option to convert the outstanding balance of the revolving note into a term note at its discretion. At June 30, 2024 and December 31, 2023, the Company had $46.0 million and $31.0 million, respectively, in outstanding borrowings on this credit facility. The Company has an agreement for a revolving note of up to $100.0 million from one of its warehouse banks, which it can draw upon as needed. The agreement currently expires in September 2024. Borrowings on the revolving note are collateralized by the Company’s FHLMC MSRs. Monthly interest on the outstanding balance is calculated using a base rate tied to the SOFR rate plus the applicable margin, with a floor of 0.50%. The revolving note also had an unused facility fee on the average unused balance, which was also paid quarterly. The unused facility fee was waived if the average outstanding balance exceeded 35% of the available combined warehouse and MSR facility. In September 2023, the revolving note was amended to remove the unused facility fee. The Company has the option to convert the outstanding balance of the revolving note into a term note at its discretion. At June 30, 2024 and December 31, 2023, the Company had $95.0 million and $30.0 million, respectively, in outstanding borrowings on this credit facility. The Company has an agreement for a revolving note, which it can draw upon as needed. The agreement currently expires in September 2028. Borrowings on the revolving note are collateralized by the Company’s FNMA MSRs. Monthly interest on the outstanding balance is calculated using a base rate tied to the SOFR rate plus the applicable margin, with a SOFR floor of 2.0%. The revolving note has a committed amount of $250.0 million and the agreement allows for the Company to increase the committed amount up to a maximum of $400.0 million. At June 30, 2024 and December 31, 2023, the Company had $130.0 million and $87.8 million, respectively, in outstanding borrowings on this credit facility. Term Note The Company had a term note agreement with one of its warehouse banks collateralized by the Company’s FNMA MSRs that had an initial committed amount of $125.0 million and allowed for an increase of the committed amount up to a maximum of $175.0 million. Principal payments of 5% of the outstanding balance were due quarterly, with the remaining principal balance due upon the original maturity date of March 2024. In September 2023, the Company paid in full the $87.5 million remaining balance due on the term note with funds borrowed under a new revolving note agreement with a different lender and the term note agreement was terminated concurrently with repayment.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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