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Commitments | 9 Months Ended
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Sep. 30, 2024
Other Commitments [Abstract] |
Commitments |
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 September 30, 2024. This additional borrowing capacity is available on a scheduled or unscheduled payment basis. During the nine months ended September 30, 2024, we funded $179.1 million out of the $1.8 billion borrowing capacity as of December 31, 2023. We also had short-term commitments to lend $1.7 billion and $26.9 million in connection with our forward and reverse mortgage loan IRLCs, respectively, outstanding at September 30, 2024. We finance originated and purchased forward and reverse mortgage loans with repurchase and participation agreements, also referred to as warehouse lines, prior to their respective securitization. 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 September 30, 2024.
Securitized HECM loans at less than 92% MCA | $ | 7,236.1 |
Securitized HECM loans at equal to or greater than 92% and less than 95% MCA | 276.8 |
Securitized HECM loans at equal to or greater than 95% MCA and less than 98% MCA | 260.1 |
Total Securitized HECM loans UPB | $ | 7,772.9 |
For the nine months ended September 30, 2024 and 2023, we repurchased HECM loans from Ginnie Mae securitizations in the amount of $125.0 million and $224.9 million, respectively. Activity with regard to HMBS repurchases for the nine months ended September 30, 2024 is as follows:
|  |  | Active |  |  |  | Inactive |  |  | Total
Beginning balance |  |  | $ | 55.4 |  |  |  |  | $ | 130.6 |  |  |  |  | $ | 186.0 |
Additions |  |  | 74.0 |  |  |  |  | 51.0 |  |  |  |  | 125.0 |
Recoveries, net (1) |  |  | (81.1) |  |  |  |  | (41.3) |  |  |  |  | (122.4) |
Transfers |  |  | 2.4 |  |  |  |  | (2.4) |  |  |  |  | — |
Changes in value |  |  | 0.2 |  |  |  |  | (3.4) |  |  |  |  | (3.2) |
Ending balance |  |  | $ | 51.0 |  |  |  |  | $ | 134.4 |  |  |  |  | $ | 185.4 |
(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 nine months ended September 30, 2024, servicing and subservicing fees from Rithm amounted to $73.5 million, or 16% of total servicing and subservicing fees (excluding ancillary income). In addition, the related Rithm Pledged MSR liability expense amounted to $27.6 million for the nine months ended September 30, 2024. As of September 30, 2024, Rithm represented $42.2 billion, or 14% of the UPB and 25% of the 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, 2024. Onity and Rithm agreed to extend Rithm’s termination rights with respect to its subservicing agreements ($32.9 billion UPB) from October 1, 2024 through November 15, 2024. In addition, Onity and Rithm agreed to extend the current terms of the subservicing agreements with Rithm through February 1, 2025, with subsequent, automatic one-year renewals. Rithm’s termination rights with respect to the RMSR agreement were not extended; accordingly, as Rithm did not give notice of termination by October 1, 2024, the RMSR agreement ($9.3 billion UPB) will continue for an additional one-year term ending December 31, 2025. In connection with the RSMR agreement, we reported $38.8 million servicing fees and $27.6 million of Pledged MSR liability expense for the nine months ended September 30, 2024. If Rithm exercises its right to terminate the subservicing agreements for convenience by November 15, 2024 or any of the agreements 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. Also refer to Note 22 – Subsequent Events. In addition, for the nine months ended September 30, 2024, servicing and subservicing fees from MAV amounted to $56.0 million or 12% of total servicing and subservicing fees (excluding ancillary income). In addition, the related MAV Pledged MSR liability expense amounted to $42.1 million for the nine months ended September 30, 2024. As of September 30, 2024, our servicing and subservicing portfolio with MAV represented $41.9 billion UPB, or 14% of the UPB and 11% 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. See Note 11 - Investment in Equity Method Investee and Related Party Transactions, Note 8 — Other Financing Liabilities, at Fair Value and Note 22 – Subsequent Events.

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- Definition The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 440 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//440/tableOfContent + Details
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