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Reverse Mortgages | 3 Months Ended
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Sep. 30, 2023
Receivables [Abstract] |
Reverse Mortgages |
Note 5 - Reverse Mortgages
The following table presents the estimated fair value of reverse mortgage loans held for investment for which we elected the fair value option:
| September 30, 2024 |  | December 31, 2023 |  |
Unpaid principal balance | $ | 7,927.3 |  |  | $ | 7,664.7 |  |  |
Fair value adjustments | 399.0 |  |  | 305.3 |  |  |
Total fair value | $ | 8,326.3 |  |  | $ | 7,970.0 |  |  |
The following table presents the composition of reverse mortgage loans held for investment, at fair value by type:
| September 30, 2024 |  | December 31, 2023
HECM loans - securitized, pledged to HMBS-related borrowings (1) | $ | 8,214.4 |  |  | $ | 7,868.5 |
New HECM loan originations and HECM loan tails (2) - unsecuritized | 111.9 |  |  | 101.5 |
Total fair value | $ | 8,326.3 |  |  | $ | 7,970.0 |
(1)The Ginnie Mae securitization of conventional, HECM loans does not qualify for sale accounting treatment and is accounted for as a secured financing transaction, with the recognition of both loans and HMBS-related borrowing on the consolidated balance sheets. (2)Tails include draws on securitized HECM loans, mortgage insurance premium, servicing fee and other advances which we subsequently securitize. The following table summarizes the activity in reverse mortgage loans held for investment and HMBS related borrowings that do not qualify for sale accounting and for which we elected the fair value option:
| Three Months Ended September 30,
| 2024 |  | 2023
| Loans Held for Investment - Reverse Mortgages |  | HMBS - Related Borrowings |  | Loans Held for Investment - Reverse Mortgages |  | HMBS - Related Borrowings
Beginning balance | $ | 8,222.4 |  |  | $ | (8,035.4) |  |  | $ | 7,674.8 |  |  | $ | (7,486.4) |
Originations | 284.7 |  |  | — |  |  | 264.4 |  |  | — |
Securitization of HECM loans accounted for as a financing | — |  |  | (284.6) |  |  | — |  |  | (281.3) |
Additional proceeds from securitization of HECM loans and tails | — |  |  | (2.2) |  |  | — |  |  | (0.9) |
Repayments (principal payments received) | (338.8) |  |  | 334.8 |  |  | (280.0) |  |  | 277.3 |
Transfers to: |  |  |  |  |  |  |
Loans held for sale, at fair value | (1.0) |  |  | — |  |  | (1.5) |  |  | — |
Receivables, net | (0.5) |  |  | — |  |  | (0.6) |  |  | — |
REO (Other assets) | (0.2) |  |  | — |  |  | — |  |  | — |
Other | (2.7) |  |  | — |  |  | — |  |  | — |
Fair value gains (losses) included in earnings (1) | 162.4 |  |  | (145.0) |  |  | 120.6 |  |  | (122.4) |
Ending balance | $ | 8,326.3 |  |  | $ | (8,132.5) |  |  | $ | 7,777.6 |  |  | $ | (7,613.6) |
| Nine Months Ended September 30,
| 2024 |  | 2023
| Loans Held for Investment - Reverse Mortgages |  | HMBS - Related Borrowings |  | Loans Held for Investment - Reverse Mortgages |  | HMBS - Related Borrowings
Beginning balance | $ | 7,970.0 |  |  | $ | (7,797.3) |  |  | $ | 7,504.1 |  |  | $ | (7,326.8) |
Originations | 804.9 |  |  | — |  |  | 771.8 |  |  | — |
Securitization of HECM loans accounted for as a financing (including realized fair value changes) | — |  |  | (792.3) |  |  | — |  |  | (783.7) |
Additional proceeds from securitization of HECM loans and tails | — |  |  | (8.6) |  |  | — |  |  | (7.1) |
Repayments (principal payments received) | (937.7) |  |  | 922.8 |  |  | (807.3) |  |  | 802.4 |
Transfers to: |  |  |  |  |  |  |
Loans held for sale, at fair value | (2.9) |  |  | — |  |  | (4.6) |  |  | — |
Receivables, net | (1.9) |  |  | — |  |  | (2.6) |  |  | — |
REO (Other assets) | (0.2) |  |  | — |  |  | (0.1) |  |  | — |
Other | (2.7) |  |  | — |  |  | — |  |  | — |
Fair value gains (losses) included in earnings (1) | 496.8 |  |  | (457.1) |  |  | 316.3 |  |  | (298.5) |
Ending balance | $ | 8,326.3 |  |  | $ | (8,132.5) |  |  | $ | 7,777.6 |  |  | $ | (7,613.6) |
Securitized loans (pledged to HMBS-related borrowings) | $ | 8,214.4 |  |  | $ | (8,132.5) |  |  | $ | 7,671.1 |  |  | $ | (7,613.6) |
Unsecuritized loans | 111.9 |  |  |  |  | 106.5 |  |  |
Total | $ | 8,326.3 |  |  |  |  | $ | 7,777.6 |  |  |
(1)See further breakdown of the net gain (loss) in the table below. Includes interest accruals.
Gain (Loss) on Reverse Loans Held for Investment and HMBS-related Borrowings, Net | Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Gain on new originations (1) | $ | 5.5 |  |  | $ | 4.4 |  |  | $ | 16.5 |  |  | $ | 13.9 |
Net interest income (servicing fee) (2) | 6.2 |  |  | 5.9 |  |  | 18.2 |  |  | 17.7 |
Other change in fair value of securitized loans held for investment and HMBS-related borrowings, net | 5.7 |  |  | (12.0) |  |  | 5.0 |  |  | (13.8) |
Fair value gains (losses) included in earnings (3) | 17.3 |  |  | (1.7) |  |  | 39.7 |  |  | 17.8 |
Loan fees and other | 0.7 |  |  | 1.3 |  |  | 2.2 |  |  | 3.7 |
| $ | 18.0 |  |  | $ | (0.4) |  |  | $ | 41.9 |  |  | $ | 21.5 |
Fair value gains (losses) included in earnings; |  |  |  |  |  |  |
Fair value gains (losses) on Reverse loans held for investment | $ | 162.4 |  |  | 120.6 |  |  | 496.8 |  |  | $ | 316.3 |
Fair value gains (losses) on HMBS related borrowings | (145.0) |  |  | (122.4) |  |  | (457.1) |  |  | (298.5) |
Total | $ | 17.3 |  |  | (1.7) |  |  | 39.7 |  |  | $ | 17.8 |
(1)Includes the changes in fair value of newly originated loans held for investment in the period from interest rate lock commitment date through securitization date. (2)Includes the interest income on loans held for investment less the interest expense on HMBS-related borrowings. The net interest income includes the servicing fee Onity is contractually entitled to on securitized loans. (3)See below breakdown between Loans held for investment and HMBS-related borrowings.

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