Quarterly report pursuant to Section 13 or 15(d)

Business Segment Reporting

v3.21.2
Business Segment Reporting
 6 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
Business Segment Reporting
 
27.
Business Segment Reporting
The Company has identified six reportable segments: Mortgage Originations, Reverse Originations, Commercial Originations, Portfolio Management, Lender Services and Corporate/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 HECMs which are insured by the FHA, and
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 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 property or portfolio of properties. 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.
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.
Lender Services
The Lender Services segment provides ancillary business services, title agency and title insurance services, MSR valuation and trade brokerage, 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 fulfillment transactional and administrative support.
Corporate and Other
Corporate and other consists of the Business Excellence Office (“BXO”) 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 following tables.
 
 
The following tables are a presentation of financial information by segment for the periods indicated (in thousands):
 
   
April 1, 2021 to June 30, 2021
  
   
Successor
  
   
Mortgage
Originations
    
Reverse
Originations
    
Commercial
Originations
    
Portfolio
Management
    
Lender
Services
    
Total
Operating
Segments
    
Corporate
and Other
    
Elim
    
Total
  
REVENUES
                                                                        
Gain on sale of loans, net
   $ 185,386     $ —       $ —       $ 7,748     $ —       $ 193,134     $ —       $ (5,557 )    $ 187,577  
Net fair value gains
     —         94,536       10,822       11,223       —         116,581       —         14,570       131,151  
Fee income
     30,345       954       12,124       3,577       81,130       128,130       —         (37,266 )      90,864  
Net interest income (expense)
     1,976       (9 )      —         (15,851 )      (15 )      (13,899 )      (6,567 )      (9 )      (20,475 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total revenues
     217,707       95,481       22,946       6,697       81,115       423,946       (6,567 )      (28,262 )      389,117  
Total expenses
     224,191       42,246       20,049       33,190       73,317       392,993       36,021       (28,262 )      400,752  
Other, net
     —         104       140       (245 )      83       82       (2,185 )      —         (2,103 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net (loss) income before taxes
   $ (6,484 )    $ 53,339     $ 3,037     $ (26,738 )    $ 7,881     $ 31,035     $ (44,773 )    $ —       $ (13,738 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Depreciation and amortization
   $ 1,433     $ (151 )    $ 127     $ (107 )    $ 2,818     $ 4,120     $ 12,342     $ —       $ 16,462  
Total assets
     2,994,779       768,229       109,434       17,996,903       336,687     $ 22,206,032       2,115,780       (2,093,874 )    $ 22,227,938  
   
   
January 1, 2021 to March 31, 2021
  
   
Predecessor
  
   
Mortgage
Originations
    
Reverse
Originations
    
Commercial
Originations
    
Portfolio
Management
    
Lender
Services
    
Total
Operating
Segments
    
Corporate
and Other
    
Elim
    
Total
  
REVENUES
                                                                        
Gain on sale of loans, net
   $ 286,481     $ —       $ —       $ 5,065     $ —       $ 291,546     $ —       $ (212 )    $ 291,334  
Net fair value gains
     —         68,449       5,431       2,750       —         76,630       —         33       76,663  
Fee income
     32,731       524       8,930       36,191       76,383       154,759       —         6,612       161,371  
Net interest expense
     891       —         —         (14,816 )      (36 )      (13,961 )      (7,744 )      —         (21,705 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total revenues
     320,103       68,973       14,361       29,190       76,347       508,974       (7,744 )      6,433       507,663  
Total expenses
     224,246       23,693       13,391       24,406       62,970       348,706       18,683       5,955       373,344  
Other, net
     —         34       149       895       2       1,080       (9,464 )      (478 )      (8,862 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net income (loss) before taxes
   $ 95,857     $ 45,314     $ 1,119     $ 5,679     $ 13,379     $ 161,348     $ (35,891 )    $ —       $ 125,457  
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Depreciation and amortization
   $ 1,423     $ 151     $ 125     $ 146     $ 1,268     $ 3,113     $ 371     $ —       $ 3,484  
Total assets
     2,425,529       35,861       82,375       17,378,088       125,317     $ 20,047,170       379,562       (326,313 )    $ 20,100,419  
 
 
   
For the three months ended June 30, 2020
  
   
Predecessor
  
   
Mortgage
Originations
    
Reverse
Originations
    
Commercial
Originations
    
Portfolio
Management
    
Lender
Services
    
Total
Operating
Segments
    
Corporate
and Other
    
Elim
    
Total
  
REVENUES
                                                                        
Gain on sale of loans, net   $ 298,333     $ —       $ —       $ —       $ —       $ 298,333     $ —       $ (42 )    $ 298,291  
Net fair value gains     —         54,689       21       57,237       —         111,947       —         356       112,303  
Fee income     33,795       509       350       1,431       44,312       80,397       28       (3,769 )      76,656  
Net interest expense     778       —         —         (19,708 )      (42 )      (18,972 )      (2,804 )      (15 )      (21,791 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total revenues
     332,906       55,198       371       38,960       44,270       471,705       (2,776 )      (3,470 )      465,459  
Total expenses
     215,958       22,156       6,552       21,374       39,554       305,594       16,573       (3,470 )      318,697  
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Other, net
     —         —         —         —         —         —         (28 )      —         (28 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net income (loss) before taxes
   $ 116,948     $ 33,042     $ (6,181 )    $ 17,586     $ 4,716     $ 166,111     $ (19,377 )    $ —       $ 146,734  
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Depreciation and amortization   $ 1,520     $ 286     $ 142     $ 11     $ 1,050     $ 3,009     $ 479     $ —       $ 3,488  
Total assets
   $ 1,816,879     $ 86,335     $ 59,439     $ 16,194,177     $ 92,413     $ 18,249,243     $ 484,973     $ (638,216 )    $ 18,096,000  
   
   
For the six months ended June 30, 2020
  
   
Predecessor
  
   
Mortgage
Originations
    
Reverse
Originations
    
Commercial
Originations
    
Portfolio
Management
    
Lender
Services
    
Total
Operating
Segments
    
Corporate
and Other
    
Elim
    
Total
  
REVENUES
                                                                        
Gain on sale of loans, net   $ 425,624     $ —       $ —       $ 5,617     $ —       $ 431,241     $ —       $ (2,266 )    $ 428,975  
Net fair value gains     —         89,278       8,582       25,881       —         123,741       —         1,942       125,683  
Fee income     54,322       1,112       11,185       2,392       85,570       154,581       44       (7,998 )      146,627  
Net interest expense     1,264       —         —         (44,481 )      (33 )      (43,250 )      (4,220 )      (82 )      (47,552 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total revenues
     481,210       90,390       19,767       (10,591 )      85,537       666,313       (4,176 )      (8,404 )      653,733  
Total expenses
     354,149       40,740       22,442       38,746       78,149       534,226       23,222       (8,404 )      549,044  
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Other, net
     —         —         —         —         —         —         (44 )      —         (44 ) 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net income (loss) before taxes
   $ 127,061     $ 49,650     $ (2,675 )    $ (49,337 )    $ 7,388     $ 132,087     $ (27,442 )    $ —       $ 104,645  
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Depreciation and amortization   $ 3,087     $ 455     $ 306     $ 23     $ 2,105     $ 5,976     $ 981     $ —       $ 6,957  
Total assets
   $ 1,816,879     $ 86,335     $ 59,439     $ 16,194,177     $ 92,413     $ 18,249,243     $ 484,973     $ (638,216 )    $ 18,096,000