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Commitments and Contingencies
 9 Months Ended
Sep. 30, 2025
Commitments and Contingencies Disclosure [Abstract]  
Contingencies and Commitments Commitments and Contingencies
The Company provides current directors and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Company.
In the normal course of business the Company may also enter into contracts that contain a variety of representations, warranties, and general indemnifications. The Company's maximum exposure under these arrangements, including future claims that may be made against the Company that have not yet occurred, is unknown. The Company has not incurred any costs to defend lawsuits or settle claims related to these indemnification agreements. As of both September 30, 2025 and December 31, 2024, the Company has no liabilities recorded for these agreements.
The Company's maximum risk of loss from credit events on its securities (excluding Agency securities, which are guaranteed by the issuing government agency or government-sponsored enterprise), loans, and investments in unconsolidated entities is limited to the amount paid for such investment.
Commitments and Contingencies Related to Investments in Residential Mortgage Loans
In connection with certain of the Company's investments in residential mortgage loans, the Company has unfunded commitments in the amount of $223.1 million and $288.4 million as of September 30, 2025 and December 31, 2024, respectively.
Loan Purchase Commitments
The Company is party to mortgage loan purchase and sale flow agreements with various loan originators ("MLPAs"). As of September 30, 2025, the Company had commitments, with a fair value of $10 thousand, to purchase residential mortgage loans with a principal balance of $669.6 million, subject to completion of satisfactory due diligence and other terms of the respective MLPAs. This includes commitments, with a fair value of $48 thousand, to purchase residential mortgage loans with a principal balance of $135.6 million, from loan originators in which the Company holds an equity interest. This compares to total commitments as of December 31, 2024, with a fair value of $(1.6) million, to purchase residential mortgage loans with a principal balance of $352.7 million; which includes commitments, with a fair value of $(0.9) million, to purchase residential mortgage loans with a principal balance of $136.0 million, from loan originators in which the Company holds an equity interest.
The Company's loan purchase commitments are included in Other Assets or Accrued expenses and other liabilities, respectively, on the Condensed Consolidated Balance Sheet.
Commitments and Contingencies Related to Investments in Loan Originators
In connection with certain of its investments in mortgage and consumer loan originators, the Company has outstanding commitments and contingencies as described below.
As described above in —Loan Purchase Commitments, the Company has entered into various MLPAs, including the Related-Party MLPA, as described in Note 16, under which it commits to purchase non-QM loans from a certain mortgage loan originator. As of September 30, 2025 and December 31, 2024, the Company had commitments, subject to the terms of the Related-Party MLPA, to purchase non-QM loans with a principal balance of $49.1 million and $25.6 million, respectively. As of September 30, 2025 and December 31, 2024, the fair value of such loan purchase commitments was $0.1 million and $(0.2) million, respectively, which is included in Other assets and Accrued expenses and other liabilities, respectively, on the Condensed Consolidated Balance Sheet. The Company has also entered into agreements whereby it guarantees the performance of this mortgage loan originator under master repurchase agreements. The Company's maximum guarantees were capped at $15.0 million as of both September 30, 2025 and December 31, 2024 and there were no such borrowings outstanding as of either date. The Company's obligations under these arrangements are deemed to be guarantees under ASC 460-10. The Company has elected the FVO for its guarantees, which are included in Accrued expenses and other liabilities on the Condensed Consolidated Balance Sheet. As of September 30, 2025 and December 31, 2024, the estimated fair value of such guarantee was insignificant.
As described above in —Loan Purchase Commitments, the Company has entered into various MLPAs, including the Related Party Loan Purchase Agreement, as described in Note 16, under which it commits to purchase RTL and non-QM loans from a certain mortgage loan originator. As of September 30, 2025 and December 31, 2024, the Company had commitments, subject to the terms of the Related Party Loan Purchase Agreement, to purchase non-QM loans with a principal balance of $35.4 million and $52.4 million, respectively. As of September 30, 2025 and December 31, 2024, the fair value of such loan purchase commitments was $(0.1) million and $(0.4) million, respectively, which is included in Other assets and Accrued expenses and other liabilities, respectively, on the Condensed Consolidated Balance Sheet.
As described in Note 16, the Company entered into various secured promissory notes with certain mortgage loan originators in which it also holds equity interests. As of September 30, 2025 and December 31, 2024, the Company had unfunded commitments related to such secured promissory notes of $30.5 million and $5.6 million, respectively.
Commitments and Contingencies Related to Investments in Unconsolidated Entities
The Company has entered into agreements whereby it guarantees the performance of a securitization-related risk retention vehicle, in which it has an equity investment, under a promissory note. The Company's maximum guarantees are capped at $15.5 million. No such amounts were outstanding as of September 30, 2025 or December 31, 2024.
As discussed in Note 16, under the terms of the RTL Commitment Agreement, the Company committed to purchase at least $500 million of eligible loans originated by the RTL Originator. As of September 30, 2025 and December 31, 2024, the Company has unfunded commitments under the RTL Commitment Agreement of $359.5 million and $369.0 million, respectively.
Commitments and Contingencies Related to Corporate Loans
The Company has investments in certain corporate loans (including a loan to an entity accumulating U.K. residential mortgages) whereby the borrowers can request additional funds under the respective agreements. As of September 30, 2025 and December 31, 2024, the Company had unfunded commitments related to such investments in the amount of $39.0 million and $2.6 million, respectively.
As detailed in Note 16, in January 2025, the Company had extended a line of credit to the Consumer Loan Originator whereby the borrower can draw funds up to $1.0 million. As of September 30, 2025, the Company had unfunded commitments related to such line of credit in the amount of $0.8 million.
Commitments to Extend Credit
The Company enters into loan commitment arrangements with borrowers who have applied for reverse mortgage loans that have not yet closed. As of September 30, 2025 and December 31, 2024, the fair value of such commitments was $8.8 million and $6.7 million, respectively, which is reflected in Loan commitments on the Condensed Consolidated Balance Sheet.
The Company is required to fund further borrower advances for loans where the borrower has not fully drawn down all of the reverse mortgage loan proceeds available to them. As of September 30, 2025 and December 31, 2024, the Company had unfunded commitments related to such reverse mortgage loans of $2.2 billion and $2.1 billion, respectively. Additionally, the Company has the obligation to advance various other reverse mortgage loan-related amounts such as the borrowers' property taxes and, in the case of HECM reverse mortgage loans, monthly insurance premiums to FHA.
Mandatory Repurchase Obligations
As detailed in Note 13, the Company is required to purchase from HMBS pools any HECM loan that has reached 98% of the MCA. For active loans, the Company subsequently assigns such loan to HUD, which then reimburses the Company up to the MCA. For inactive loans, following resolution of the loan, the Company files a claim with HUD for any recoverable remaining principal and advance balances.
Lease Commitments
Longbridge, a consolidated subsidiary of the Company, leases office space and office equipment, under various operating lease arrangements, which expire on various dates through January 2035. Additionally, as a result of the Arlington Merger, the Company assumed the remaining lease for Arlington's principal office space which expired in October 2024. As discussed in Note 2, the Company makes various assumptions and estimates in recognizing the operating lease ROU assets and corresponding lease liabilities, including the expected lease term, incremental borrowing rate, and identifying lease and non-lease components. Total expense under all operating leases amounted to $0.3 million and $0.4 million for the three-month periods ended September 30, 2025 and 2024, respectively, and $0.9 million and $1.1 million for the nine-month periods ended September 30, 2025 and 2024, respectively. Such expense is included in Other expenses on the Condensed Consolidated Statement of Operations.
The following table provides details of the Company's outstanding leases as of September 30, 2025 and December 31, 2024.
($ in thousands)September 30, 2025December 31, 2024
ROU assets$4,118 $5,161 
Lease liabilities4,630 5,704 
Weighted average remaining term (in years)7.27.2
Weighted average discount rate9.19 %8.87 %
The following table details contractual future minimum lease payments as of September 30, 2025.
Minimum Payments
(In thousands)
Year ended December 31, 2025$234 
Year ended December 31, 2026954 
Year ended December 31, 2027964 
Year ended December 31, 2028957 
Year ended December 31, 2029948 
Thereafter2,519 
Total6,576 
Less: implied interest payments(1,946)
Lease Liability$4,630