Commitments

6 Months Ended

Jun. 30, 2024


Note 20 — Commitments

Unfunded Lending Commitments

We have originated floating-rate reverse mortgage loans under which the borrowers have additional borrowing capacity of $1.8 billion at June 30, 2024. This additional borrowing capacity is available on a scheduled or unscheduled payment basis. During the six months ended June 30, 2024, we funded $119.5 million out of the $1.8 billion borrowing capacity as of December 31, 2023. We also had short-term commitments to lend $1.5 billion and $22.2 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at June 30, 2024. We finance originated and purchased forward and reverse mortgage loans with repurchase and participation agreements, also referred to as warehouse lines.

HMBS Issuer Obligations

As an HMBS issuer, we assume certain obligations related to each security issued. The most significant obligation is the requirement to purchase loans out of the Ginnie Mae securitization pools once the outstanding principal balance of a reverse mortgage loan is equal to or greater than 98% of the maximum claim amount (MCA repurchases). The table below provides the breakdown of the portfolio UPB with respect to the percentage of the MCA at June 30, 2024.



Securitized HECM loans at less than 92% MCA	$	7,204.0
Securitized HECM loans at equal to or greater than 92% and less than 95% MCA	256.2
Securitized HECM loans at equal to or greater than 95% MCA and less than 98% MCA	241.6
Total Securitized HECM loans UPB	$	7,701.9

For the six months ended June 30, 2024 and 2023, we repurchased HECM loans from Ginnie Mae securitizations in the amount of $81.2 million and $181.3 million, respectively. Activity with regard to HMBS repurchases for the six months ended June 30, 2024 is as follows:



	Active		Inactive		Total

Beginning balance	$	55.4	$	130.6		$	186.0
Additions	50.7		30.5			81.2
Recoveries, net (1)	(58.1)		(32.0)			(90.0)
Transfers	0.1		(0.1)			—
Changes in value	0.1		(2.0)			(1.9)
Ending balance	$	48.2	$	127.1		$	175.3

(1)Includes amounts received upon assignment of loan to HUD, loan payoff, REO liquidation and claim proceeds less any amounts charged off as unrecoverable.

Our subservicing clients bear the financial obligation and risks associated with purchasing loans out of securitization pools within the portfolio of loans we subservice.

Client Concentration

Our Servicing segment has exposure to concentration risk and client retention risk.

For the six months ended June 30, 2024, servicing and subservicing fees from Rithm amounted to $49.5 million, or 16% of total servicing and subservicing fees (excluding ancillary income). As of June 30, 2024, Rithm represented 14% and 25%, respectively, of UPB and loan count of our total servicing and subservicing portfolio, and approximately 64% of all delinquent loans that Onity services. Our Subservicing Agreements and Servicing Addendum with Rithm provide for automatic one-year renewals, unless Onity or Rithm provide advance notice of termination. Onity and Rithm did not provide their respective notice of termination by July 1, 2024 and October 1, 2023. Accordingly, the servicing agreements with Rithm are extended through December 31, 2024, with subsequent, automatic one-year renewals. If Rithm exercises its right to terminate all or some of the agreements (for convenience by October 2024 or for cause at any time), we might need to right-size certain aspects of our servicing business as well as the related corporate support functions, and we may need to adjust our daily liquidity management due to the reduction of servicing float balances associated with the Rithm servicing agreements. The impacts to our consolidated statements of operations in connection with our Rithm agreements are disclosed in Note 8 — Other Financing

Liabilities, at Fair Value. Other liabilities recorded on our consolidated balance sheets are disclosed in Note 14 – Other Liabilities.

In addition, for the six months ended June 30, 2024, servicing and subservicing fees from MAV amounted to $39.6 million or 13% of total servicing and subservicing fees (excluding ancillary income). As of June 30, 2024, our servicing and subservicing portfolio with MAV represented $52.9 billion UPB, or 17% of the UPB and 14% of the loan count in our total servicing and subservicing portfolio. While our servicing agreement with MAV is non-cancellable and provides us with exclusivity, MAV is permitted to sell the underlying MSR without Onity’s consent after May 3, 2024. See Note 11 - Investment in Equity Method Investee and Related Party Transactions and Note 8 — Other Financing Liabilities, at Fair Value.