Loans Held for Sale

9 Months Ended

Sep. 30, 2021


Note 4 – Loans Held for Sale


Loans Held for Sale - Fair Value	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Beginning balance	$	680,866	$	253,037	$	366,364	$	208,752
Originations and purchases	6,366,795		2,429,977		12,987,522		4,378,999
Proceeds from sales	(6,098,495)		(2,317,579)		(12,362,149)		(4,190,355)
Principal collections	(22,334)		(5,721)		(39,037)		(21,479)
Transfers from (to):
Loans held for investment, at fair value	1,220		781		2,898		1,900

Receivables, net	(7,625)		(14,723)		(25,151)		(62,949)
REO (Other assets)	(1,767)		(1,713)		(5,312)		(2,554)
Gain (loss) on sale of loans	1,793		17,509		(13,006)		45,762
Increase (decrease) in fair value of loans	(5,336)		4,220		(6,025)		1,925
Other	6,504		1,178		15,517		6,965
Ending balance (1)	$	921,621	$	366,966	$	921,621	$	366,966

(1)At September 30, 2021 and 2020, the balances include $(9.3) million and $(5.8) million, respectively, of fair value adjustments.


Loans Held for Sale - Lower of Cost or Fair Value	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Beginning balance - before Valuation Allowance	$	20,278	$	31,880	$	27,652	$	73,160

Proceeds from sales	(2,916)		891		(9,583)		(45,974)
Principal collections	(415)		(514)		(629)		(1,319)
Transfers from (to):
Receivables, net	(444)		—		(936)		61


Gain (loss) on sale of loans	35		(1,141)		549		474
Other	123		(1,220)		(392)		3,494
Ending balance - before Valuation Allowance	16,661		29,896		16,661		29,896

Beginning balance - Valuation Allowance	$	(5,124)	$	(6,400)	$	(6,180)	$	(6,643)
(Provision for) reversal of valuation allowance	602		45		1,582		(1,084)
Transfer to (from) Liability for indemnification obligations (Other liabilities)	(60)		(42)		16		(117)
Sales of loans	—		166		—		1,613

Ending balance - Valuation Allowance	(4,582)		(6,231)		(4,582)		(6,231)

Ending balance, net	$	12,079	$	23,665	$	12,079	$	23,665


Gain on Loans Held for Sale, Net	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Gain on sales of loans, net
MSRs retained on transfers of forward mortgage loans	$	66,420	$	22,096	$	136,482	$	37,785

Gain (loss) on sale of forward mortgage loans (1)	(2,601)		11,897		(25,440)		35,201
Gain on sale of repurchased Ginnie Mae loans	3,962		4,663		12,277		11,036

	67,781		38,656		123,319		84,022
Change in fair value of IRLCs	(4,135)		4,828		(9,225)		16,876
Change in fair value of loans held for sale	(3,491)		3,061		(3,323)		3,367
Loss on economic hedge instruments (2)	780		179		592		(10,141)

Other	(1,233)		(838)		(3,227)		(1,360)
	$	59,702	$	45,886	$	108,136	$	92,764

(1)Includes $22.5 million gain in the three and nine months ended September 30, 2021 related to loans purchased through the exercise of our servicer call rights with respect to certain Non-Agency trusts and sold, servicing release, in the three months ended September 30, 2021.

(2)Excludes gains of $1.5 million and $25.5 million on inter-segment economic hedge derivative presented within MSR valuation adjustments, net for the three and nine months ended September 30, 2021, respectively, and a loss of $7.8 million for the three and nine months ended September 30, 2020. Third-party derivatives are hedging the net exposure of MSR and pipeline, and the change in fair value of derivatives are reported within MSR valuation adjustments, net. Inter-segment derivatives are established to transfer risk and allocate hedging gains/losses to the pipeline separately from the MSR portfolio. Refer to Note 19 – Business Segment Reporting.