Note 5—Loan Sales and Servicing Activities

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

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


	Quarter ended March 31,
	2020		2019
	(in thousands)
Cash flows:
Sales proceeds	$	19,337,017	$	8,536,430
Servicing fees received (1)	$	166,556	$	137,148
Net servicing advance recoveries	$	15,209	$	24,176

(1)

Net of guarantee fees paid to the Agencies.

The following table summarizes unpaid principal balance (the “UPB”) of the loans sold by the Company in which it maintains continuing involvement in the form of owned servicing obligations:


	March 31,		December 31,
	2020		2019
	(in thousands)
Unpaid principal balance of loans outstanding	$	175,709,882	$	168,842,011
Delinquencies:
30-89 days	$	8,314,858	$	7,947,560
90 days or more:
Not in foreclosure	$	2,837,903	$	3,237,563
In foreclosure	$	832,922	$	888,136
Foreclosed	$	18,541	$	15,387
Bankruptcy	$	1,364,331	$	1,343,816

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


	March 31, 2020
			Contract
	Servicing		servicing and		Total
	rights owned		subservicing		loans serviced
	(in thousands)
Investor:
Non-affiliated entities:
Originated	$	175,709,882	$	—	$	175,709,882
Purchased		58,410,013		—		58,410,013
		234,119,895		—		234,119,895
PennyMac Mortgage Investment Trust		—		144,830,043		144,830,043
Loans held for sale		5,276,688		—		5,276,688
	$	239,396,583	$	144,830,043	$	384,226,626
Subserviced for the Company (1)	$	2,343,828	$	—	$	2,343,828
Delinquent loans:
30 days	$	8,707,825	$	1,031,940	$	9,739,765
60 days		2,131,137		157,325		2,288,462
90 days or more:
Not in foreclosure		3,977,080		302,515		4,279,595
In foreclosure		1,088,058		58,922		1,146,980
Foreclosed		23,023		68,125		91,148
	$	15,927,123	$	1,618,827	$	17,545,950
Bankruptcy	$	1,943,407	$	146,205	$	2,089,612
Custodial funds managed by the Company (2)	$	7,576,973	$	3,935,103	$	11,512,076

(1)

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

(2)

Custodial funds include cash accounts holding funds on behalf of borrowers and investors relating to 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 loans’ borrowers and investors, which are included in Interest income in the Company’s consolidated statements of income.


	December 31, 2019
			Contract
	Servicing		servicing and		Total
	rights owned		subservicing		loans serviced
	(in thousands)
Investor:
Non-affiliated entities:
Originated	$	168,842,011	$	—	$	168,842,011
Purchased		59,703,547		—		59,703,547
		228,545,558		—		228,545,558
PennyMac Mortgage Investment Trust		—		135,414,668		135,414,668
Loans held for sale		4,724,006		—		4,724,006
	$	233,269,564	$	135,414,668	$	368,684,232
Delinquent loans:
30 days	$	7,987,132	$	857,660	$	8,844,792
60 days		2,490,797		172,263		2,663,060
90 days or more:
Not in foreclosure		4,070,482		274,592		4,345,074
In foreclosure		1,113,806		68,331		1,182,137
Foreclosed		18,315		89,421		107,736
	$	15,680,532	$	1,462,267	$	17,142,799
Bankruptcy	$	1,898,367	$	136,818	$	2,035,185
Custodial funds managed by the Company (1)	$	6,412,291	$	2,529,984	$	8,942,275

(1)

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


	March 31,		December 31,
State	2020		2019
	(in thousands)
California	$	58,058,528	$	57,311,867
Florida		31,714,639		28,940,696
Texas		29,709,362		27,909,821
Virginia		22,531,313		22,115,619
Maryland		17,282,260		16,829,320
All other states		224,930,524		215,576,909
	$	384,226,626	$	368,684,232