Mortgage Loans Held for Sale

6 Months Ended

Jun. 30, 2020

Mortgage Loans Held for Sale and Investment [Abstract]

6. Mortgage Loans Held for Sale

The Company maintains a strategy of originating and purchasing residential mortgage loan products primarily for the purpose of selling to GSEs or other third-party investors in the secondary market on a servicing-retained basis. The Company purchases closed loans through its correspondent channel and assists customers currently in the Company’s servicing portfolio with refinancing of loans or new home purchases through its direct-to-consumer channel. Generally, all newly originated mortgage loans held for sale are securitized and transferred to GSEs or delivered to third-party purchasers shortly after origination on a servicing-retained basis.

Mortgage loans held for sale are recorded at fair value as set forth below:


Mortgage Loans Held for Sale	June 30, 2020		December 31, 2019
Mortgage loans held for sale – UPB	$	3,033	$	3,949
Mark-to-market adjustment⁽¹⁾	146		128
Total mortgage loans held for sale	$	3,179	$	4,077

⁽¹⁾The mark-to-market adjustment is recorded in net gain on mortgage loans held for sale in the consolidated statements of operations.

The following table sets forth the activities of mortgage loans held for sale:


	Six Months Ended June 30,
Mortgage Loans Held for Sale	2020		2019
Balance - beginning of period	$	4,077	$	1,631
Loans sold	(26,149)		(15,203)
Mortgage loans originated and purchased, net of fees	23,110		16,263
Repurchase of loans out of Ginnie Mae securitizations	2,092		715
Changes in fair value	42		16
Net transfers of mortgage loans held for sale⁽¹⁾	7		—
Balance - end of period	$	3,179	$	3,422

⁽¹⁾Amount reflects transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net, for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing.

For the six months ended June 30, 2020 and 2019, the Company received proceeds of $26,606 and $15,422, respectively, on the sale of mortgage loans held for sale, resulting in gains of $457 and $219, respectively.

The Company has the right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including having not received borrower payments for greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased in connection with loan modifications and loan resolution activity, with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. Therefore, these loans are classified as held for sale.

The Company accrues interest income as earned and places loans on non-accrual status after any portion of principal or interest has been delinquent for more than 90 days. Accrued interest is recorded as interest income in the consolidated statements of operations.

The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows:


	June 30, 2020						December 31, 2019
Mortgage Loans Held for Sale	UPB		Fair Value		UPB		Fair Value
Non-accrual⁽¹⁾	$	35	$	25	$	29	$	22

⁽¹⁾Non-accrual UPB includes $27 and $25 of UPB related to Ginnie Mae repurchased loans as of June 30, 2020 and December 31, 2019, respectively.

The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $21 and $21 as of June 30, 2020 and December 31, 2019, respectively.