Mortgage Servicing Rights and Related Liabilities (Tables)

12 Months Ended

Dec. 31, 2024

Schedule of Servicing Assets at Fair Value


MSRs and Related Liabilities	December 31, 2024		December 31, 2023
MSRs at fair value	$	11,736	$	9,090

Excess spread financing at fair value	$	386	$	437
Mortgage servicing rights financing at fair value	32		29
MSR related liabilities - nonrecourse at fair value	$	418	$	466

The following table sets forth the activities of MSRs:


	Year Ended December 31,
MSRs at Fair Value	2024		2023
Balance - beginning of year	$	9,090	$	6,654
Additions:
Servicing retained from mortgage loans sold	460		273
Purchases and acquisitions of servicing rights	3,004		3,189
Dispositions:
Sales of servicing assets and excess yield	(583)		(573)
Changes in fair value:
Changes in valuation inputs or assumptions used in the valuation model (MSR MTM)	650		121
Changes in valuation due to amortization	(923)		(604)
Other changes(1)	38		30
Balance - end of year	$	11,736	$	9,090

(1)Amounts primarily represent negative fair values reclassified from the MSR asset to reserves as underlying loans are removed from the MSR and other reclassification adjustments.

The following table provides a breakdown of UPB and fair value for the Company’s MSRs:


	December 31, 2024				December 31, 2023
MSRs - UPB and Fair Value Breakdown by Investor Pools	UPB		Fair Value		UPB		Fair Value
Agency	$	710,997	$	11,397	$	561,656	$	8,774
Non-agency	25,074		339		26,286		316
Total	$	736,071	$	11,736	$	587,942	$	9,090

Schedule of Sensitivity Analysis of Fair Value, Transferor's Interests in Transferred Financial Assets

The following table shows the hypothetical effect on the fair value of the Company’s MSRs when applying certain unfavorable variations of key assumptions to these assets for the dates indicated:


	Option Adjusted Spread				Total Prepayment Speeds				Cost to Service per Loan
MSRs - Hypothetical Sensitivities	100 bps Adverse Change		200 bps Adverse Change		10% Adverse Change		20% Adverse Change		10% Adverse Change		20% Adverse Change
December 31, 2024
Mortgage servicing rights	$	(470)	$	(904)	$	(308)	$	(597)	$	(84)	$	(169)

December 31, 2023
Mortgage servicing rights	$	(368)	$	(706)	$	(219)	$	(425)	$	(89)	$	(178)

The following table shows the hypothetical effect on the Company’s excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities for the dates indicated:


	Option Adjusted Spread				Prepayment Speeds
Excess Spread Financing - Hypothetical Sensitivities	100 bps Adverse Change		200 bps Adverse Change		10% Adverse Change		20% Adverse Change
December 31, 2024
Excess spread financing	$	13	$	28	$	8	$	17

December 31, 2023
Excess spread financing	$	16	$	32	$	10	$	20

Schedule of Fees Earned in Exchange for Servicing Financial Assets

Revenues - Service Related, net

The following table sets forth the items comprising total “revenues - service related, net”:


	Year Ended December 31,
Revenues - Service Related, net	2024		2023		2022
Contractually specified servicing fees(1)	$	2,222	$	1,700	$	1,458
Other service-related income(1)	77		72		105
Incentive and modification income(1)	69		43		29
Servicing late fees(1)	128		89		76
Mark-to-market adjustments - Servicing
MSR MTM	650		121		1,328
(Loss) on MSR hedging activities	(517)		(68)		(332)
(Loss) gain on MSR and excess yield sales	(9)		23		(3)
Reclassifications to reserve provision(2)	(25)		(33)		(30)
Excess spread / MSR financing MTM	(18)		(18)		(142)
Total mark-to-market adjustments - Servicing	81		25		821
Amortization, net of accretion
MSR amortization	(923)		(604)		(779)
Excess spread accretion	37		41		86
Total amortization, net of accretion	(886)		(563)		(693)
Originations service related fees(3)	86		61		98
Corporate/Xome service related fees	77		84		76
Other(4)	(66)		(71)		(105)
Total revenues - Service Related, net	$	1,788	$	1,440	$	1,865

(1)Amounts include subservicing related revenues. Amounts also include servicing fees from loans sold with servicing retained of $759, $708 and $661 for the years ended December 31, 2024, 2023 and 2022, respectively.

(2)Reclassifications to reserve provision include the impact of negative modeled cash flows which have been transferred to reserves on advances and other receivables. The negative modeled cash flows relate to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio.

(3)Amounts include fees collected from customers for originated loans and from other lenders for loans purchased through the correspondent channel, and include loan application, underwriting, and other similar fees.

(4)Other represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements, portfolio runoff and the payments made associated with MSR financing arrangements.