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Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended
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Jun. 30, 2021
Accounting Policies [Abstract] |
Partnership to Corporation Conversion |
(a) | Partnership to Corporation Conversion
On January 16, 2020, Velocity Financial, LLC converted from a limited liability company to a corporation and changed its name to Velocity Financial, Inc. The Conversion was accounted for in accordance with ASC 805-50 –Business Combinations, as a transaction between entities under common control. All assets and liabilities of Velocity Financial, LLC were contributed to Velocity Financial, Inc. at their carrying value, and the results of operations are being presented as if the Conversion had occurred on January 1, 2020. Additionally, Class A and Class D’s partnership equity at December 31, 2019 were converted to stockholders’ equity and presented as such on the Consolidated Balance Sheets and the Consolidated Statement of Changes in Stockholders’ Equity effective January 1, 2020.
Use of Estimates |
(b) | Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of consolidated income and expenses during the reporting period.
Significant Accounting Policies |
(c) | Significant Accounting Policies
The Company’s significant accounting policies are described in Note 2 — Basis of Presentation and Summary of Significant Accounting Policies, of its audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the Securities and Exchange Commission ("Form 10-K"). There have been no significant changes to the Company’s significant accounting policies as described in its 2020 Annual Report.
Principles of Consolidation |
(d) | Principles of Consolidation
The principles of consolidation require management to determine and reassess the requirement to consolidate VIEs each reporting period, and therefore, the determination may change based on new facts and circumstances pertaining to each VIE. This could result in a material impact to the Company’s consolidated financial statements in subsequent reporting periods. The Company consolidates the assets, liabilities, and remainder interests of the Trusts as management determined that VCC is the primary beneficiary of these entities. The Company’s ongoing asset management responsibilities provide the Company with the power to direct the activities that most significantly impact the VIE’s economic performance, and the remainder interests provide the Company with the right to receive benefits and the obligation to absorb losses, limited to its investment in the remainder interest of the Trusts. The following table presents a summary of the assets and liabilities of the Trusts as of June 30, 2021 and December 31, 2020. Intercompany balances have been eliminated for purposes of this presentation (in thousands):
|  | June 30, 2021 |  |  | December 31, 2020 |
Restricted cash |  | $ | 6,143 |  |  | $ | 6,743 |
Loans held for investment, net |  |  | 1,858,737 |  |  |  | 1,874,991 |
Accrued interest and other receivables |  |  | 82,829 |  |  |  | 82,342 |
Real estate owned, net |  |  | 14,395 |  |  |  | 9,698 |
Other assets |  |  | 9 |  |  |  | 12 |
Total assets |  | $ | 1,962,113 |  |  | $ | 1,973,786 |
Accounts payable and accrued expenses |  | $ | 43,844 |  |  | $ | 43,795 |
Securities issued |  |  | 1,558,163 |  |  |  | 1,579,019 |
Total liabilities |  | $ | 1,602,007 |  |  | $ | 1,622,814 |
The consolidated financial statements as of June 30, 2021 and December 31, 2020 include only those assets, liabilities, and results of operations related to the business of the Company, its subsidiaries, and VIEs.

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- Definition Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=84158767&loc=d3e18780-107790 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=109239629&loc=d3e5614-111684 + Details
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