Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

16. Income Taxes

The components of income tax expense for continuing operations were as follows:

	Year Ended December 31,
Total Income Tax Expense on continuing operations	2022		2021		2020
Current Income Taxes
Federal	$	(6)	$	7	$	(3)
State	8		113		92
Total current income taxes	2		120		89
Deferred Income Taxes
Federal	245		376		87
State	44		(25)		(83)
Total deferred income taxes	289		351		4
Total income tax expense	$	291	$	471	$	93

The provision for income taxes for 2021 and 2020 does not reflect the tax effects of the sale of the Company’s reverse servicing portfolio reported as discontinued operations.

The following table presents a reconciliation of the income tax provision computed at the U.S. federal statutory tax rate to the actual effective tax rate:

	Year Ended December 31,
Reconciliation of the Income Tax Provision	2022				2021				2020
Tax Expense at Federal Statutory Rate	$	255	21.0	%	$	407	21.0	%	$	84	21.0	%
Effect of:
State taxes, net of federal benefit	39		3.2	%	70		3.6	%	8		1.7	%
Deferred adjustments	2		0.2	%	(6)		(0.3)	%	(5)		(1.1)	%
Nondeductible items	—		—	%	2		0.1	%	7		1.7	%
Other, net	(5)		(0.4)	%	(2)		(0.1)	%	(1)		(0.3)	%
Total income tax expense	$	291	24.0	%	$	471	24.3	%	$	93	23.0	%

In 2022, 2021 and 2020, the effective tax rate differed from the statutory tax rate primarily due to state tax adjustments and permanent differences such as nondeductible executive compensation and nondeductible penalties.

The Company has federal NOL carryforwards (pre-tax) of approximately $0.5 billion and $0.6 billion as of December 31, 2022 and 2021, respectively.

The Company believes it is more likely than not that its deferred tax assets will be realized prior to their expiration except for certain federal 382 limited NOLs that begin to expire with the 2026 tax year, if unused, and immaterial state NOL carryforwards that begin to expire with the 2022 tax year, if unused. Accordingly, the Company has recorded a federal valuation allowance of $7 as of December 31, 2022 and 2021 related to these NOL carryforwards. The state valuation allowance was immaterial as of December 31, 2022. The Company recorded a state valuation allowance of $2 as of December 31, 2021. The Company does not expect any future tax loss limitations under Sections 382 and 384 that would impact its utilization of remaining federal NOL carryforwards.

Temporary differences and carryforwards that give rise to deferred tax assets and liabilities are comprised of the following:

Deferred Tax Assets and Liabilities	December 31, 2022		December 31, 2021
Deferred Tax Assets
Effect of:
Goodwill and intangible assets	$	827	$	998
Loss carryforwards (federal, state & capital)	104		134
Loss reserves	84		104
Lease liability	28		30
Accruals	11		16
Other, net	19		20
Total deferred tax assets	1,073		1,302
Deferred Tax Liabilities
MSR amortization and mark-to-market, net	(269)		(240)
Gain/loss on assets, net	(67)		(14)
Right-of-use assets	(24)		(27)
Depreciation and amortization, net	(2)		(19)
Prepaid assets	(1)		(2)
Total deferred tax liabilities	(363)		(302)
Valuation allowance	(7)		(9)
Deferred tax assets, net	$	703	$	991

The Company elected to account for the Global Intangible Low-Taxed Income (“GILTI”) tax expense in the period in which it is incurred. As a result, no deferred tax impact of GILTI has been provided in the consolidated financial statements.

The Company files income tax returns in the U.S. federal jurisdiction and numerous U.S. state jurisdictions. With few exceptions, as of December 31, 2022, the Company is no longer subject to U.S. federal and state income tax examinations for tax years prior to 2019.

As of December 31, 2022 and 2021, the Company had no unrecognized tax benefits recorded related to uncertain tax positions.