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Mortgage Servicing
 12 Months Ended
Dec. 31, 2021
Transfers and Servicing [Abstract]  
Mortgage Servicing
Note 7 — Mortgage Servicing     
During each period, we remeasure our MSRs at fair value, which contemplates the receipt or nonreceipt of the servicing income for that period. The servicing income, including expectations of future servicing cash flows, are inputs for the measurement of the MSR fair value. The net result on the statement of operations is that we record the contractual cash received in each period as revenue within Servicing and subservicing fees, partially offset by the remeasurement of the MSR fair value within MSR valuation adjustments, net.
Mortgage Servicing Rights – Fair Value Measurement Method
Years Ended December 31,
202120202019
Agency
Non-AgencyTotalAgencyNon-AgencyTotalAgencyNon-AgencyTotal
Beginning balance
$578,957 $715,860 $1,294,817 $714,006 $772,389 $1,486,395 $865,587 $591,562 $1,457,149 
Sales
— — — — (143)(143)(3,578)(766)(4,344)
Additions:
Recognized on the sale of residential mortgage loans
222,715 — 222,715 68,734 — 68,734 8,795 — 8,795 
Purchase of MSRs
844,122 — 844,122 285,134 — 285,134 153,505 — 153,505 
Servicing transfers and adjustments (1)
117 (10,899)(10,782)(266,248)403 (265,845)— (7,309)(7,309)
Changes in fair value:
Changes in valuation inputs or assumptions (2)
62,437 87,077 149,514 (145,308)37,257 (108,051)(192,323)268,208 75,885 
Realization of cash flows (2)
(136,511)(113,728)(250,239)(77,361)(94,046)(171,407)(117,980)(79,306)(197,286)
Ending balance
$1,571,837 $678,310 $2,250,147 $578,957 $715,860 $1,294,817 $714,006 $772,389 $1,486,395 
(1)Servicing transfers and adjustments include a $263.7 million derecognition of MSRs/Rights to MSRs effective with the February 20, 2020 notice of termination of the PMC subservicing agreement by NRZ. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting for further information.
(2)Effective January 1, 2021, changes in fair value due to actual versus model variances are presented as Changes in valuation inputs or assumptions. Activity for 2020 and 2019 in the table above has been recast to conform to current year disclosure, resulting in a $1.8 million and $18.1 million gain, respectively, reclassified from Realization of expected cash flows to Changes in valuation inputs or assumptions.
December 31, 2021December 31, 2020
Fair ValueUPBFair ValueUPB
Owned MSRs$1,422,546 $127,919,800 $727,865 $90,174,495 
NRZ transferred MSRs (1) (2)558,940 53,652,843 566,952 64,061,198 
MAV transferred MSRs (1)268,661 24,018,904 — — 
 Total MSR UPB$2,250,147 $205,591,547 $1,294,817 $154,235,693 
(1)MSRs subject to sale agreements with NRZ and MAV that do not meet sale accounting criteria. During 2021, we transferred MSRs with a UPB of $24.9 billion to MAV. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting.
(2)At December 31, 2021, the title of the MSR transferred to NRZ is retained by Ocwen for $12.1 billion of UPB and transferred to NRZ for $41.5 billion of UPB.
We purchased MSRs with a UPB of $75.6 billion, $31.7 billion and $14.6 billion during 2021, 2020 and 2019, respectively. Purchases during 2021 include a bulk MSR acquisition of performing GSE loans from an unrelated third party effective June 1, 2021, with a UPB and fair value of $46.8 billion and $575.3 million, respectively. We sold MSRs with a UPB of $32.0 million, $80.0 million and $140.8 million during 2021, 2020 and 2019, respectively, to unrelated third parties, mostly to Freddie Mac under the Voluntary Partial Cancellation (VPC) program for delinquent loans. The sales in 2019 of $140.8 million UPB were non-Agency MSRs.
At December 31, 2021, the S&P Global Ratings, Inc.’s (S&P) servicer ratings outlook for PMC is stable. On June 29, 2021, S&P affirmed PMC’s servicer rating as Average, raising management and organization ranking to Above Average. In addition, S&P raised PMC’s master servicer rating from Average to Above Average reflecting the industry experience of PMC’s management, multiple levels of internal controls to monitor operations, and resolution of regulatory actions, amongst other factors mentioned by S&P. On September 28, 2021, Moody’s upgraded the servicer quality (SQ) assessment for PMC as a master servicer of residential mortgage loans from SQ3 to SQ3+, reflecting solid reporting and remitting processes and proactive servicer oversight. On March 24, 2020, Fitch Ratings, Inc. (Fitch) placed all U.S. Residential Mortgage Backed Securities (RMBS) servicer ratings on Outlook Negative, resulting from a rapidly evolving economic and operating environment due to the sudden impact of the COVID-19 virus. On April 28, 2021, Fitch affirmed PMC’s servicer ratings and revised its outlook from Negative to Stable as PMC’s performance in this evolving environment has not raised any elevated concerns. According to Fitch, the affirmation and stable outlook reflected PMC’s diligent response to the coronavirus pandemic and its impact on servicing operations, effective enterprise-wide risk environment and compliance management framework, satisfactory loan servicing performance metrics, special servicing expertise, and efficient servicing technology. The ratings also consider the financial condition of PMC’s parent, OFC.
Downgrades in servicer ratings could adversely affect our ability to service loans, sell or finance servicing advances and could impair our ability to consummate future servicing transactions or adversely affect our dealings with lenders, other contractual counterparties, and regulators, including our ability to maintain our status as an approved servicer by Fannie Mae and Freddie Mac. The servicer rating requirements of Fannie Mae do not necessarily require or imply immediate action, as Fannie Mae has discretion with respect to whether we are in compliance with their requirements and what actions it deems appropriate under the circumstances in the event that we fall below their desired servicer ratings.
The geographic concentration of the UPB of residential loans and real estate we serviced at December 31, 2021 was as follows:
 AmountCount
California$43,935,174 154,632 
Texas17,016,955 104,502 
Florida13,754,741 91,391 
New York12,701,419 53,132 
New Jersey10,382,601 44,175 
Other107,800,657 654,355 
 $205,591,547 1,102,187 

Years Ended December 31,
Servicing Revenue
202120202019
Loan servicing and subservicing fees
Servicing$339,233 $216,263 $227,490 
Subservicing21,120 28,886 15,459 
MAV (2)15,708 — — 
NRZ (2)304,248 383,685 577,015 
Total loan servicing and subservicing fees680,309 628,834 819,964 
Ancillary income
Late charges40,869 47,687 57,194 
Recording fees16,013 14,281 13,029 
Loan collection fees11,724 12,919 15,539 
Boarding and deboarding fees10,522 11,122 3,254 
Custodial accounts (float earnings)4,739 9,939 47,562 
GSE forbearance fees1,537 1,204 — 
Reverse subservicing ancillary income1,411 — — 
Home Affordable Modification Program (HAMP) fees (1)638 565 5,538 
Other14,179 10,769 13,427 
Total ancillary income101,632 108,486 155,543 
 $781,941 $737,320 $975,507 
(1)The HAMP expired on December 31, 2016. Borrowers who had requested assistance or to whom an offer of assistance had been extended as of that date had until September 30, 2017 to finalize their modification. We continue to earn HAMP success fees for HAMP modifications that remain less than 90 days delinquent at the first-, second- and third-year anniversary of the start of the trial modification.
(2)Includes servicing and subservicing fees related to transferred MSRs. See Note 8 — MSR Transfers Not Qualifying for Sale Accounting.
Float balances (balances in custodial accounts, which represent collections of principal and interest that we receive from borrowers) are held in escrow by unaffiliated banks and are excluded from our consolidated balance sheets. Float balances amounted to $2.07 billion, $1.74 billion and $1.71 billion at December 31, 2021, 2020 and 2019, respectively.