Regulatory Capital and Liquidity Requirements

9 Months Ended

Sep. 30, 2023

Regulatory Capital and Liquidity Requirements

Regulatory Capital and Liquidity Requirements

Note 22—Regulatory Capital and Liquidity Requirements

The Company, through PLS, is required to maintain specified levels of capital and liquidity to remain a seller/servicer in good standing with the Agencies. Such capital and liquidity requirements generally are tied to the size of the PLS’s loan servicing portfolio, loan origination volume and delinquency rates.

The Agencies’ capital and liquidity levels and requirements, the calculations of which are specified by each Agency, are summarized below:

	September 30, 2023 (1)						December 31, 2022
Requirement/Agency	Actual (2)			Requirement (2)			Actual (2)			Requirement (2)
	(dollars in thousands)
Capital
Fannie Mae & Freddie Mac	$	6,227,418		$	1,157,832		$	6,632,627		$	797,748
Ginnie Mae	$	5,968,665		$	1,251,726		$	5,899,892		$	923,202
HUD	$	5,968,665		$	2,500		$	5,899,892		$	2,500
Liquidity
Fannie Mae & Freddie Mac	$	1,383,986		$	472,121		$	1,265,569		$	107,768
Ginnie Mae	$	1,583,911		$	323,892		$	1,265,569		$	246,953
Adjusted net worth / Total assets ratio
Ginnie Mae		40	%		6	%		35	%		6	%
Tangible net worth / Total assets ratio
Fannie Mae & Freddie Mac		32	%		6	%		39	%		6	%

(1) The Agencies adopted revised capital and liquidity requirements, most of which became effective on September 30, 2023. The amounts shown for September 30, 2023 are in accordance with those Agency requirements. The Agencies have issued origination liquidity requirements and Ginnie Mae has issued risk-based capital requirements in addition to those presented above. The origination liquidity and risk-based capital requirements will be effective on December 31, 2023 and December 31, 2024, respectively. The Company believes it is in compliance with the Agencies’ pending requirements as of September 30, 2023.

(2) Calculated in accordance with the respective Agency’s requirements.

Noncompliance with an Agency’s requirements can result in such Agency taking various remedial actions up to and including terminating the Company’s ability to sell loans to and service loans on behalf of the respective Agency.