Loan Sales and Servicing Activities

3 Months Ended

Mar. 31, 2025

Loan Sales and Servicing Activities

Loan Sales and Servicing Activities

Note 6—Loan Sales and Servicing Activities

The Company originates, 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,
	2025		2024
	(in thousands)
Cash flows:
Sales proceeds	$	27,587,429	$	19,676,917
Servicing fees received	$	396,232	$	336,248

The Company is contractually responsible for making the payments required to protect the loans’ beneficial interest holders’ interests in the properties collateralizing their loans and may, therefore, be required to advance amounts in excess of insurer or guarantor reimbursement limits. Therefore, the Company provides a valuation allowance on the servicing advances for these amounts to adjust their carrying values to amounts that are expected to ultimately be recovered from the loans’ insurers, guarantors, or beneficial interest holders.

The servicing advance valuation allowance is estimated based on relevant qualitative and quantitative information about past events, including historical collection and loss experience, current conditions, and reasonable and supportable forecasts that affect collectable amounts. The provision for losses on servicing advances is included in Servicing expense in the consolidated statements of income. Servicing advances are written off when they are deemed unrecoverable.

The following is a summary of the allowance for losses on servicing advances:

	Quarter ended March 31,
	2025		2024
	(in thousands)
Balance at beginning of quarter	$	85,788	$	73,991
Provision (reversals of provision) for losses		4,184		(1,541)
Charge-offs, net		(7,817)		(5,123)
Balance at end of quarter	$	82,155	$	67,327

The following table summarizes the UPB of the loans sold by the Company in transactions where it maintains continuing involvement with the loans as servicer:

	March 31,		December 31,
	2025		2024
	(in thousands)
Unpaid principal balance of loans outstanding	$	426,951,027	$	410,393,342
Delinquent loans:
30-89 days	$	15,120,416	$	17,301,961
90 days or more:
Not in foreclosure	$	6,878,669	$	8,104,348
In foreclosure	$	1,230,939	$	693,934
Foreclosed	$	3,262	$	2,928
Loans in bankruptcy	$	1,815,360	$	1,762,324

The following tables summarize the Company’s loan servicing portfolio as measured by UPB:

	March 31, 2025
	Servicing				Total
	rights owned		Subservicing		loans serviced
	(in thousands)
Investor:
Non-affiliated entities:
Originated	$	426,951,027	$	—	$	426,951,027
Purchased		15,276,140		—		15,276,140
Subserviced		—		1,148,070		1,148,070
		442,227,167		1,148,070		443,375,237
PennyMac Mortgage Investment Trust		—		229,907,855		229,907,855
Loans held for sale		6,911,473		—		6,911,473
	$	449,138,640	$	231,055,925	$	680,194,565
Delinquent loans:
30 days	$	11,631,622	$	1,954,743	$	13,586,365
60 days		4,026,422		614,354		4,640,776
90 days or more:
Not in foreclosure		7,035,395		1,240,979		8,276,374
In foreclosure		1,279,420		124,997		1,404,417
Foreclosed		4,104		2,689		6,793
	$	23,976,963	$	3,937,762	$	27,914,725
Loans in bankruptcy	$	1,899,730	$	307,272	$	2,207,002
Custodial funds managed by the Company (1)	$	7,079,846	$	2,643,740	$	9,723,586

(1) 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 these custodial funds where it owns the MSRs and these fees are included in Interest income in the Company’s consolidated statements of income.

	December 31, 2024
	Servicing				Total
	rights owned		Subservicing		loans serviced
	(in thousands)
Investor:
Non-affiliated entities:
Originated	$	410,393,342	$	—	$	410,393,342
Purchased		15,681,406		—		15,681,406
Subserviced		—		806,584		806,584
		426,074,748		806,584		426,881,332
PennyMac Mortgage Investment Trust		—		230,753,581		230,753,581
Loans held for sale		8,128,914		—		8,128,914
	$	434,203,662	$	231,560,165	$	665,763,827
Delinquent loans:
30 days	$	13,095,250	$	1,996,821	$	15,092,071
60 days		4,838,550		676,508		5,515,058
90 days or more:
Not in foreclosure		8,289,129		1,210,270		9,499,399
In foreclosure		730,372		106,188		836,560
Foreclosed		3,716		2,732		6,448
	$	26,957,017	$	3,992,519	$	30,949,536
Loans in bankruptcy	$	1,852,396	$	286,093	$	2,138,489
Custodial funds managed by the Company (1)	$	6,171,157	$	2,391,875	$	8,563,032

(1) 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 these custodial funds where it owns the MSRs and these fees are included in Interest income in the Company’s consolidated statements of income.

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	2025		2024
	(in thousands)
California	$	77,470,559	$	76,364,993
Texas		67,407,963		65,317,775
Florida		65,493,205		63,850,638
Virginia		36,818,071		36,428,575
Georgia		28,976,027		28,499,141
All other states		404,028,740		395,302,705
	$	680,194,565	$	665,763,827