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VARIABLE INTEREST ENTITIES | 9 Months Ended
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Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The determination of whether the assets and liabilities of the VIEs are consolidated in the consolidated balance sheets or not consolidated in the consolidated balance sheets depends on the terms of the related transaction and the Company’s continuing involvement, if any, with the VIE. The Company is deemed the primary beneficiary and therefore consolidates VIEs for which it has both (a) the power, through voting rights or similar rights, to direct the activities that most significantly impact the VIE's economic performance, and (b) benefits, as defined, from the VIE. The Company determines whether it holds a significant variable interest in a VIE based on a consideration of both qualitative and quantitative factors regarding the nature, size, and form of its involvement with the VIE. The Company assesses whether it is the primary beneficiary of a VIE on an ongoing basis. The Company did not provide any non-contractual financial support to VIEs for both the nine months ended September 30, 2021 and year ended December 31, 2020. Consolidated VIEs The Company’s consolidated VIEs currently include VIEs established for its securitization activities. The table below presents a summary of the carrying value and balance sheet classification of assets and liabilities in the Company’s consolidated VIEs.
|  | September 30, 2021 |  | December 31, 2020 |  |
Assets |  |  |  |  |  |
Loans held for sale, at fair value |  | $ | 2,462,653 |  |  | $ | 1,595,442 |  |  |
Restricted cash |  | — |  |  | 170,413 |  |  |
Servicing rights, at fair value |  | 379,850 |  |  | 300,465 |  |  |
|  | $ | 2,842,503 |  |  | $ | 2,066,320 |  |  |
Liabilities |  |  |  |  |  |
Warehouse and other lines of credit |  | $ | 2,399,544 |  |  | $ | 1,699,803 |  |  |
Debt obligations, net |  | 214,008 |  |  | 213,640 |  |  |
|  | $ | 2,613,552 |  |  | $ | 1,913,443 |  |  |
The Company’s economic exposure to loss from outstanding third-party financing related to consolidated VIEs is limited to the carrying value of the consolidated VIE assets. The Company executes private-label securitizations to finance mortgage loans and mortgage servicing rights. In executing a securitization transaction, the Company sells assets to the securitization trusts. The securitization facility is funded through the issuance of beneficial interests in the securitized assets. The beneficial interests take the form of either notes and/or trust certificates, which are sold to investors. These beneficial interests are collateralized by the transferred assets and entitle the investors to specified cash flows generated from the underlying assets. The Company’s exposure to these entities is primarily through its role as seller, servicer, and administrator of these entities. The Company has retained risks in the securitizations including customary representations and warranties. Additionally, the Company holds certain conditional repurchase options specific to securitizations that allow it to repurchase assets from the securitization entity. The Company, as seller, has an option to prepay and to redeem outstanding classes of issued notes at the Company’s discretion after a set time period has elapsed. The Company generally has discretion regarding when or if it will exercise these options, but would do so only when it was in the Company’s best interest. Servicing functions include, but are not limited to, general collection activity on current and noncurrent accounts, loss mitigation efforts including repossession and sale of collateral, as well as preparing and furnishing statements summarizing the asset and beneficial interest performance. These servicing responsibilities constitute the Company’s continued involvement in the transferred assets. Non-Consolidated VIEs The nature, purpose, and activities of non-consolidated VIEs currently encompass the Company’s investments in retained interests from securitizations and joint ventures. The table below presents a summary of the nonconsolidated VIEs for which the Company holds variable interests.
|  | September 30, 2021
|  | Carrying value of variable interests |  | Maximum exposure to loss in non-consolidated VIEs |  | Total assets in VIEs
|  | Assets |  | Liabilities |  |
Retained interests(1) |  | $ | 56,412 |  |  | $ | — |  |  | $ | 56,412 |  |  | $ | 1,085,924 |
Investments in joint ventures |  | 18,353 |  |  | — |  |  | 18,353 |  |  | 12,295 |
|  | $ | 74,765 |  |  | $ | — |  |  | $ | 74,765 |  |  |
|  | December 31, 2020
|  | Carrying value of variable interests |  | Maximum exposure to loss in non-consolidated VIEs |  | Total assets in VIEs
|  | Assets |  | Liabilities |  |
Investments in joint ventures |  | $ | 17,528 |  |  | $ | — |  |  | $ | 17,528 |  |  | $ | 15,342 |
(1)Carrying value of retained interests is included within trading securities on the consolidated balance sheets. Retained interests During the second and third quarters of 2021, the Company completed the sale and securitization of non-owner occupied residential mortgage loans. Pursuant to the credit risk retention requirements, the Company, as sponsor, is required to retain at least a 5% economic interest in the credit risk of the assets collateralizing the securitization transactions. The trading securities retained represent a variable interest in the securitization. The Company determined it was not the primary beneficiary of the VIE. The Company’s continuing involvement is limited to customary servicing obligations as servicing administrator associated with retained servicing rights and the receipt of principal and interest associated with the trading securities. Investments in joint ventures The Company’s joint ventures include investments with home builders, real estate brokers, and commercial real estate companies to provide loan origination services and real estate settlement services to customers referred by the Company’s joint venture partners. The Company is generally not determined to be the primary beneficiary in its joint venture VIEs because it does not have the power, through voting rights or similar rights, to direct the activities that most significantly impact the economic performance of the VIE. The Company’s pro rata share of net earnings of joint ventures was $3.0 million and $8.1 million for the three and nine months ended September 30, 2021, respectively and $2.9 million and $6.7 million for the three and nine months ended September 30, 2020, respectively.

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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI http://asc.fasb.org/topic&trid=2197479 + Details
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