Note 5—Loan Sales and Servicing Activities

The Company originates or purchases and sells mortgage loans in the secondary mortgage market without recourse for credit losses. However, the Company maintains continuing involvement with the mortgage loans in the form of servicing arrangements and the liability under representations and warranties it makes to purchasers and insurers of the mortgage loans.

The following table summarizes cash flows between the Company and transferees as a result of the sale of mortgage loans in transactions where the Company maintains continuing involvement as servicer with the mortgage loans:


	Year ended December 31,
	2018		2017		2016
	(in thousands)
Cash flows:
Sales proceeds	$	44,557,560	$	50,235,245	$	49,633,909
Servicing fees received (1)	$	488,483	$	376,160	$	261,163
Net servicing advances	$	28,557	$	52,353	$	8,274

(1)

Net of guarantee fees paid to the Agencies

The following table summarizes the UPB of the mortgage loans sold by the Company in which it maintains continuing involvement:


	December 31,
	2018		2017
	(in thousands)
Unpaid principal balance of mortgage loans outstanding	$	145,224,596	$	120,853,138
Delinquencies:
30-89 days	$	6,222,864	$	5,097,688
90 days or more:
Not in foreclosure	$	2,208,083	$	2,303,114
In foreclosure	$	720,894	$	606,744
Foreclosed	$	24,243	$	30,310
Bankruptcy	$	970,329	$	657,368

The following tables summarize the UPB of the Company’s mortgage loan servicing portfolio:


	December 31, 2018
			Contract		Total
	Servicing		servicing and		mortgage
	rights owned		subservicing		loans serviced
	(in thousands)
Investor:
Non-affiliated entities:
Originated	$	145,224,596	$	—	$	145,224,596
Purchased		56,990,486		—		56,990,486
		202,215,082		—		202,215,082
PennyMac Mortgage Investment Trust		—		94,658,154		94,658,154
Mortgage loans held for sale		2,420,636		—		2,420,636
	$	204,635,718	$	94,658,154	$	299,293,872
Subserviced for the Company (1)	$	414,219	$	—	$	414,219
Delinquent mortgage loans:
30 days	$	6,677,179	$	525,989	$	7,203,168
60 days		1,983,381		113,238		2,096,619
90 days or more:
Not in foreclosure		3,102,492		217,115		3,319,607
In foreclosure		1,027,493		127,025		1,154,518
Foreclosed		33,493		176,377		209,870
	$	12,824,038	$	1,159,744	$	13,983,782
Bankruptcy	$	1,415,106	$	107,083	$	1,522,189
Custodial funds managed by the Company (2)	$	3,033,658	$	970,328	$	4,003,986

(1)

Certain of the mortgage loans for which the Company has purchased the MSRs are subserviced on the Company’s behalf by other mortgage loan servicers on an interim basis when servicing of the loans has not yet been transferred to the Company’s operating platform.

(2)

Custodial funds include cash accounts holding funds on behalf of borrowers and investors relating to mortgage loans serviced under servicing agreements and are not recorded on the Company’s consolidated balance sheets. The Company earns placement fees on certain of the custodial funds it manages on behalf of the mortgage loans’ investors, which are included in Interest income in the Company’s consolidated statements of income.


	December 31, 2017
			Contract		Total
	Servicing		servicing and		mortgage
	rights owned		subservicing		loans serviced
	(in thousands)
Investor:
Non-affiliated entities:
Originated	$	120,853,138	$	—	$	120,853,138
Purchased		47,016,708		—		47,016,708
		167,869,846		—		167,869,846
Advised Entities		—		74,980,268		74,980,268
Mortgage loans held for sale		2,998,377		—		2,998,377
	$	170,868,223	$	74,980,268	$	245,848,491
Delinquent mortgage loans:
30 days	$	5,326,710	$	515,922	$	5,842,632
60 days		1,935,216		215,957		2,151,173
90 days or more:
Not in foreclosure		3,690,159		541,945		4,232,104
In foreclosure		916,614		293,835		1,210,449
Foreclosed		41,244		278,890		320,134
	$	11,909,943	$	1,846,549	$	13,756,492
Bankruptcy	$	1,046,969	$	176,324	$	1,223,293
Custodial funds managed by the Company (1)	$	3,267,279	$	901,041	$	4,168,320

(1)

Following is a summary of the geographical distribution of mortgage loans included in the Company’s servicing portfolio for the top five and all other states as measured by UPB:


	December 31,		December 31,
State	2018		2017
	(in thousands)
California	$	51,377,441	$	45,621,369
Texas		23,648,042		19,741,970
Florida		22,650,926		17,490,194
Virginia		19,011,950		16,210,673
Maryland		13,774,011		11,350,939
All other states		168,831,502		135,433,346
	$	299,293,872	$	245,848,491