Loan Sales and Servicing Activities

6 Months Ended

Jun. 30, 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 June 30,				Six months ended June 30,
	2025		2024		2025		2024
	(in thousands)
Cash flows:
Sales proceeds	$	34,656,042	$	24,860,532	$	62,243,471	$	44,537,449
Servicing fees received	$	411,531	$	348,730	$	807,763	$	684,978

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 June 30,				Six months ended June 30,
	2025		2024		2025		2024
	(in thousands)
Balance at beginning of period	$	82,155	$	67,327	$	85,788	$	73,991
Provision for losses		7,786		5,932		11,970		4,391
Charge-offs, net		(7,916)		(4,588)		(15,733)		(9,711)
Balance at end of period	$	82,025	$	68,671	$	82,025	$	68,671

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:

	June 30,		December 31,
	2025		2024
	(in thousands)
Unpaid principal balance of loans outstanding	$	448,312,667	$	410,393,342
Delinquent loans:
30-89 days	$	17,747,455	$	17,301,961
90 days or more:
Not in foreclosure	$	6,819,040	$	8,104,348
In foreclosure	$	1,183,032	$	693,934
Foreclosed	$	3,254	$	2,928
Loans in bankruptcy	$	1,936,703	$	1,762,324

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

	June 30, 2025
	Servicing				Total
	rights owned		Subservicing		loans serviced
	(in thousands)
Investor:
Non-affiliated entities:
Originated	$	448,312,667	$	—	$	448,312,667
Purchased		14,837,637		—		14,837,637
Subserviced		—		894,678		894,678
		463,150,304		894,678		464,044,982
PennyMac Mortgage Investment Trust		—		228,838,699		228,838,699
Loans held for sale		6,783,240		—		6,783,240
	$	469,933,544	$	229,733,377	$	699,666,921
Delinquent loans:
30 days	$	13,661,146	$	2,224,538	$	15,885,684
60 days		4,676,437		592,689		5,269,126
90 days or more:
Not in foreclosure		7,030,633		1,080,547		8,111,180
In foreclosure		1,174,802		130,242		1,305,044
Foreclosed		4,264		1,815		6,079
	$	26,547,282	$	4,029,831	$	30,577,113
Loans in bankruptcy	$	2,022,830	$	328,672	$	2,351,502
Custodial funds managed by the Company (1)	$	7,690,392	$	3,037,614	$	10,728,006

(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:

	June 30,		December 31,
State	2025		2024
	(in thousands)
California	$	79,108,662	$	76,364,993
Texas		69,822,668		65,317,775
Florida		67,648,262		63,850,638
Virginia		37,358,138		36,428,575
Georgia		29,671,069		28,499,141
All other states		416,058,122		395,302,705
	$	699,666,921	$	665,763,827