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Mortgage Servicing Rights
 12 Months Ended
Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Mortgage Servicing Rights

21) Mortgage Servicing Rights

 

The Company reports MSRs pursuant to the accounting policy discussed in Note 1 of the Notes to Consolidated Financial Statements.

 

The following table presents the MSR activity.

 

   2021   2020 
   December 31 
   2021   2020 
Amortized cost:          
Balance before valuation allowance at beginning of year  $35,210,516   $17,155,529 
MSR additions resulting from loan sales   32,701,819    29,896,465 
Amortization (1)   (14,851,880)   (11,841,478)
Application of valuation allowance to write down MSRs
with other than temporary impairment		   -    - 
Balance before valuation allowance at year end  $53,060,455   $35,210,516 
           
Valuation allowance for impairment of MSRs:          
Balance at beginning of year  $-   $- 
Additions   -    - 
Application of valuation allowance to write down MSRs
with other than temporary impairment		   -    - 
Balance at year end  $-   $- 
           
Mortgage servicing rights, net  $53,060,455   $35,210,516 
           
Estimated fair value of MSRs at year end  $68,811,809   $38,702,358 

 

 

(1)Included in other expenses on the consolidated statements of earnings

 

The following table summarizes the Company’s estimate of future amortization of its existing MSRs carried at amortized cost. This projection was developed using the assumptions made by management in its December 31, 2021 valuation of MSRs. The assumptions underlying the following estimate will change as market conditions and portfolio composition and behavior change, causing both actual and projected amortization levels to change over time. Therefore, the following estimates will change in a manner and amount not presently determinable by management.

 

   Estimated MSR Amortization 
2022  $7,341,097 
2023   6,020,240 
2024   5,263,053 
2025   4,583,231 
2026   4,008,838 
Thereafter   25,843,996 
Total  $53,060,455 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020

 

21) Mortgage Servicing Rights (Continued)

 

The Company collected the following contractual servicing fee income and late fee income as reported in other revenues on the consolidated statements of earnings.

 

   Years Ended December 31 
   2021   2020 
Contractual servicing fees  $15,471,307   $8,940,612 
Late fees   321,337    305,962 
Total  $15,792,644   $9,246,574 

 

The following is a summary of the unpaid principal balances (“UPB”) of the servicing portfolio.

 

   December 31 
   2021   2020 
Servicing UPB  $7,060,536,350   $5,070,287,864 

 

The following key assumptions were used in determining MSR value.

 

  

Prepayment

Speeds

  

Average

Life(Years)

  

Discount

Rate

 
December 31, 2021   11.60    6.64    9.50 
December 31, 2020   15.60    5.30    9.50 

 

 

SECURITY NATIONAL FINANCIAL CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2021 and 2020