Annual report pursuant to Section 13 and 15(d)

Business Segment Reporting

v3.22.4
Business Segment Reporting
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Business Segment Reporting
31. Business Segment Reporting
The following tables are a presentation of financial information by segment for the periods indicated (in thousands):
For the year ended December 31, 2022
Successor
Mortgage Originations Reverse Originations Commercial Originations Lender Services Portfolio Management Total Operating Segments Corporate and Other Elim Total
REVENUES
Gain on sale and other income from loans held for sale, net $ 231,983  $ —  $ —  $ —  $ (6,298) $ 225,685  $ —  $ (14,667) $ 211,018 
Net fair value gains (losses) on loans and related obligations —  283,808  4,210  —  (195,231) 92,787  —  11,407  104,194 
Fee income 59,096  5,580  54,437  213,887  66,761  399,761  —  (37,631) 362,130 
Net interest income (expense)
Interest income 40,680  —  —  962  5,319  46,961  675  —  47,636 
Interest expense (32,956) —  —  (187) (90,926) (124,069) (27,668) —  (151,737)
Net interest income (expense) 7,724  —  —  775  (85,607) (77,108) (26,993) —  (104,101)
Total revenues 298,803  289,388  58,647  214,662  (220,375) 641,125  (26,993) (40,891) 573,241 
Total expenses 464,084  160,919  84,659  243,397  124,060  1,077,119  112,384  (40,888) 1,148,615 
Impairment of intangibles and other assets (129,097) (3,500) (5,500) (48,384) (3,800) (190,281) (2,228) —  (192,509)
Other, net (225) 3,290  418  3,648  860  7,991  27,837  3  35,831 
Net income (loss) before taxes $ (294,603) $ 128,259  $ (31,094) $ (73,471) $ (347,375) $ (618,284) $ (113,768) $ —  $ (732,052)
Depreciation and amortization $ 8,407  $ 38,645  $ 2,211  $ 12,926  $ 319  $ 62,508  $ 2,483  $ —  $ 64,991 
Total assets $ 173,442  $ 294,904  $ 15,246  $ 140,952  $ 20,185,979  $ 20,810,523  $ 1,596,532  $ (1,534,400) $ 20,872,655 
For the nine months ended December 31, 2021
Successor
Mortgage Originations Reverse Originations Commercial Originations Lender Services Portfolio Management Total Operating Segments Corporate and Other Elim Total
REVENUES
Gain on sale and other income from loans held for sale, net $ 542,951  $ —  $ —  $ —  $ 39,950  $ 582,901  $ —  $ (18,376) $ 564,525 
Net fair value gains (losses) on loans and related obligations —  317,138  37,720  —  (30,738) 324,120  —  17,630  341,750 
Fee income 88,399  3,274  43,015  252,268  30,455  417,411  —  (31,346) 386,065 
Net interest income (expense)
Interest income 42,555  —  —  68  1,027  43,650  275  —  43,925 
Interest expense (34,569) —  —  (260) (52,625) (87,454) (20,240) —  (107,694)
Net interest income (expense) 7,986  —  —  (192) (51,598) (43,804) (19,965) —  (63,769)
Total revenues 639,336  320,412  80,735  252,076  (11,931) 1,280,628  (19,965) (32,092) 1,228,571 
Total expenses 639,196  122,389  64,026  229,227  92,197  1,147,035  74,535  (37,814) 1,183,756 
Impairment of goodwill and intangible assets (774,524) (408,241) (75,768) (110,188) (11,909) (1,380,630) —  —  (1,380,630)
Other, net —  248  423  3,040  1,170  4,881  15,193  (5,932) 14,142 
Net loss before taxes $ (774,384) $ (209,970) $ (58,636) $ (84,299) $ (114,867) $ (1,242,156) $ (79,307) $ (210) $ (1,321,673)
Depreciation and amortization $ 9,147  $ 29,006  $ 1,909  $ 8,681  $ 132  $ 48,875  $ 1,130  $ —  $ 50,005 
Total assets $ 2,148,504  $ 359,896  $ 41,470  $ 227,966  $ 18,974,389  $ 21,752,225  $ 994,074  $ (957,353) $ 21,788,946 
For the year ended December 31, 2020
Predecessor
Mortgage Originations Reverse Originations Commercial Originations Lender Services Portfolio Management Total Operating Segments Corporate and Other Elim Total
REVENUES
Gain on sale and other income from loans held for sale, net $ 1,171,368  $ —  $ —  $ —  $ 10,192  $ 1,181,560  $ —  $ (2,565) $ 1,178,995 
Net fair value gains on loans and related obligations —  192,257  13,350  —  103,872  309,479  —  2,219  311,698 
Fee income 118,237  1,837  23,862  205,197  28,002  377,135  3,117  9,617  389,869 
Net interest income (expense)
Interest income 41,688  —  —  174  714  42,576  8  —  42,584 
Interest expense (39,792) —  —  (255) (73,877) (113,924) (8,945) (132) (123,001)
Net interest income (expense) 1,896  —  —  (81) (73,163) (71,348) (8,937) (132) (80,417)
Total revenues 1,291,501  194,094  37,212  205,116  68,903  1,796,826  (5,820) 9,139  1,800,145 
Total expenses 831,563  87,219  41,341  185,361  90,854  1,236,338  48,280  9,139  1,293,757 
Other, net —  —  —  —  —  —  (6,131) —  (6,131)
Net income (loss) before taxes $ 459,938  $ 106,875  $ (4,129) $ 19,755  $ (21,951) $ 560,488  $ (60,231) $ —  $ 500,257 
Depreciation and amortization $ 5,951  $ 897  $ 568  $ 4,810  $ 130  $ 12,356  $ 1,515  $ —  $ 13,871 
Total assets $ 2,362,159  $ 25,841  $ 82,436  $ 117,254  $ 16,895,820  $ 19,483,510  $ 81,645  $ —  $ 19,565,155 

The Company has identified six reportable segments: Mortgage Originations, Reverse Originations, Commercial Originations, Lender Services, Portfolio Management, and Corporate and Other.
Mortgage Originations
The Mortgage Originations segment originates mortgage loans through FAM. This segment generates revenue through fee-based mortgage loan origination services and the origination and sale of mortgage loans into the secondary market. The Mortgage Originations segment includes four channels: distributed retail lending, direct-to-consumer lending, third-party-originator lending and home improvement.
Reverse Originations
The Reverse Originations segment originates or acquires reverse mortgage loans through FAR. This segment originates HECM which are insured by the FHA, and proprietary non-agency reverse mortgages. The segment originates reverse mortgage loans through the following channels: retail and third-party-originator. Reverse mortgage lending activities primarily consist of the origination and securitization of mortgage loans to GNMA and other private investors.
Commercial Originations
The Commercial Originations segment originates or acquires commercial mortgage loans through FAM (prior to January 1, 2022 through FACo). The segment provides business purpose lending solutions for residential real estate investors in two principal ways: short-term loans to provide rehab and construction of investment properties meant to be sold upon completion, and investor rental loans collateralized by either a single asset or portfolio of properties. The segment also provides government-insured agricultural lending solutions to farmers to fund their inputs and
operating expenses for the upcoming growing season.The segment originates commercial mortgage loans through the following channels: retail and third-party-originator. Commercial mortgage lending activities primarily consist of the origination and securitization of commercial mortgages to private investors.
Lender Services
The Lender Services segment provides ancillary business services, title agency and title insurance services, MSR valuation and trade brokerage, transactional fulfillment services, and appraisal management services to customers in the residential mortgage, student lending, and commercial lending industries. The segment also operates a foreign branch in the Philippines for transactional fulfillment and administrative support.
Portfolio Management
The Portfolio Management segment provides product development, loan securitization, loan sales, risk management, asset management and servicing oversight services to the enterprise and third-party funds.
Corporate and Other
Corporate and Other consists of the Business Excellence Office and other corporate services groups.
The Company's segments are based upon the Company's organizational structure which focuses primarily on the services offered. Corporate functional expenses are allocated to individual segments based on actual cost of services performed based on a direct resource utilization, estimate of percentage use for shared services or headcount percentage for certain functions. Non-allocated corporate expenses include administrative costs of executive management and other corporate functions that are not directly attributable to the Company's operating segments. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties. To reconcile the Company's consolidated results, certain inter-segment revenues and expenses are eliminated in the "Eliminations" column in the previous tables.