x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
91-1653725
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
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8950 Cypress Waters Blvd, Coppell, TX
|
|
75019
|
(Address of principal executive offices)
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(Zip Code)
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|
|
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(469) 549-2000
|
||
Registrant’s telephone number, including area code
|
||
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Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock, $0.01 par value per share
|
COOP
|
The Nasdaq Stock Market
|
Large Accelerated Filer
|
¨
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Accelerated Filer
|
x
|
Non-Accelerated Filer
|
¨
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
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Page
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PART I
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Item 1.
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||
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Consolidated Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019
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Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2020 and Three Months Ended March 31, 2019
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Consolidated Statements of Stockholders’ Equity (unaudited) for the Three Months Ended March 31, 2020 and Three Months Ended March 31, 2019
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Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2020 and Three Months Ended March 31, 2019
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Item 2.
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Item 3.
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Item 4.
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PART II
|
|
|
|
|
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Item 1.
|
||
|
|
|
Item 1A.
|
||
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Item 2.
|
||
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Item 3.
|
||
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Item 4.
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||
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Item 5.
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||
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Item 6.
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||
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March 31, 2020
|
|
December 31, 2019
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
579
|
|
|
$
|
329
|
|
Restricted cash
|
266
|
|
|
283
|
|
||
Mortgage servicing rights, $3,109 and $3,496 at fair value, respectively
|
3,115
|
|
|
3,502
|
|
||
Advances and other receivables, net of reserves of $193 and $175, respectively
|
685
|
|
|
988
|
|
||
Reverse mortgage interests, net of reserves of $3 and $3, respectively
|
5,955
|
|
|
6,279
|
|
||
Mortgage loans held for sale at fair value
|
3,922
|
|
|
4,077
|
|
||
Property and equipment, net of accumulated depreciation of $65 and $55, respectively
|
111
|
|
|
112
|
|
||
Deferred tax assets, net
|
1,411
|
|
|
1,345
|
|
||
Other assets
|
1,569
|
|
|
1,390
|
|
||
Total assets
|
$
|
17,613
|
|
|
$
|
18,305
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Unsecured senior notes, net
|
$
|
2,259
|
|
|
$
|
2,366
|
|
Advance facilities, net
|
489
|
|
|
422
|
|
||
Warehouse facilities, net
|
4,551
|
|
|
4,575
|
|
||
Payables and other liabilities
|
1,965
|
|
|
2,016
|
|
||
MSR related liabilities - nonrecourse at fair value
|
1,285
|
|
|
1,348
|
|
||
Mortgage servicing liabilities
|
53
|
|
|
61
|
|
||
Other nonrecourse debt, net
|
4,945
|
|
|
5,286
|
|
||
Total liabilities
|
15,547
|
|
|
16,074
|
|
||
Commitments and contingencies (Note 18)
|
|
|
|
|
|
||
Preferred stock at $0.00001 - 10 million shares authorized, 1 million shares issued and outstanding, respectively; aggregate liquidation preference of ten dollars, respectively
|
—
|
|
|
—
|
|
||
Common stock at $0.01 par value - 300 million shares authorized, 92.0 million and 91.1 million shares issued, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in-capital
|
1,108
|
|
|
1,109
|
|
||
Retained earnings
|
961
|
|
|
1,122
|
|
||
Total Mr. Cooper stockholders’ equity
|
2,070
|
|
|
2,232
|
|
||
Non-controlling interests
|
(4
|
)
|
|
(1
|
)
|
||
Total stockholders’ equity
|
2,066
|
|
|
2,231
|
|
||
Total liabilities and stockholders’ equity
|
$
|
17,613
|
|
|
$
|
18,305
|
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Revenues:
|
|
|
|
||||
Service related, net
|
$
|
(53
|
)
|
|
$
|
84
|
|
Net gain on mortgage loans held for sale
|
331
|
|
|
166
|
|
||
Total revenues
|
278
|
|
|
250
|
|
||
Expenses:
|
|
|
|
||||
Salaries, wages and benefits
|
246
|
|
|
215
|
|
||
General and administrative
|
198
|
|
|
228
|
|
||
Total expenses
|
444
|
|
|
443
|
|
||
Other income (expenses), net:
|
|
|
|
||||
Interest income
|
118
|
|
|
134
|
|
||
Interest expense
|
(192
|
)
|
|
(189
|
)
|
||
Other income, net
|
1
|
|
|
15
|
|
||
Total other income (expenses), net
|
(73
|
)
|
|
(40
|
)
|
||
Loss before income tax benefit
|
(239
|
)
|
|
(233
|
)
|
||
Less: Income tax benefit
|
(68
|
)
|
|
(47
|
)
|
||
Net loss
|
(171
|
)
|
|
(186
|
)
|
||
Less: Net loss attributable to non-controlling interests
|
(3
|
)
|
|
—
|
|
||
Net loss attributable to Mr. Cooper
|
(168
|
)
|
|
(186
|
)
|
||
Less: Undistributed earnings attributable to participating stockholders
|
—
|
|
|
—
|
|
||
Net loss attributable to common stockholders
|
$
|
(168
|
)
|
|
$
|
(186
|
)
|
|
|
|
|
||||
Net loss per common share attributable to Mr. Cooper:
|
|
|
|
||||
Basic
|
$
|
(1.84
|
)
|
|
$
|
(2.05
|
)
|
Diluted
|
$
|
(1.84
|
)
|
|
$
|
(2.05
|
)
|
|
|
Preferred Stock
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
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|
Shares
(in thousands) |
|
Amount
|
|
Shares
(in thousands)
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Total Mr. Cooper Stockholders’ Equity
|
|
Non-controlling Interests
|
|
Total
Equity
|
||||||||||||||||
Balance at January 1, 2019
|
|
1,000
|
|
|
$
|
—
|
|
|
90,821
|
|
|
$
|
1
|
|
|
$
|
1,093
|
|
|
$
|
848
|
|
|
$
|
1,942
|
|
|
$
|
3
|
|
|
$
|
1,945
|
|
Shares issued / (surrendered) under incentive compensation plan
|
|
—
|
|
|
—
|
|
|
221
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(186
|
)
|
|
(186
|
)
|
|
—
|
|
|
(186
|
)
|
|||||||
Balance at March 31, 2019
|
|
1,000
|
|
|
$
|
—
|
|
|
91,042
|
|
|
$
|
1
|
|
|
$
|
1,095
|
|
|
$
|
662
|
|
|
$
|
1,758
|
|
|
$
|
3
|
|
|
$
|
1,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at January 1, 2020
|
|
1,000
|
|
|
$
|
—
|
|
|
91,118
|
|
|
$
|
1
|
|
|
$
|
1,109
|
|
|
$
|
1,122
|
|
|
$
|
2,232
|
|
|
$
|
(1
|
)
|
|
$
|
2,231
|
|
Shares issued / (surrendered) under incentive compensation plan
|
|
—
|
|
|
—
|
|
|
852
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||||
Cumulative effect adjustments pursuant to the adoption of ASU 2016-13
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(168
|
)
|
|
(168
|
)
|
|
(3
|
)
|
|
(171
|
)
|
|||||||
Balance at March 31, 2020
|
|
1,000
|
|
|
$
|
—
|
|
|
91,970
|
|
|
$
|
1
|
|
|
$
|
1,108
|
|
|
$
|
961
|
|
|
$
|
2,070
|
|
|
$
|
(4
|
)
|
|
$
|
2,066
|
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Operating Activities
|
|
|
|
||||
Net loss
|
$
|
(171
|
)
|
|
$
|
(186
|
)
|
Adjustments to reconcile net loss to net cash attributable to operating activities:
|
|
|
|
||||
Deferred tax benefit
|
(68
|
)
|
|
(47
|
)
|
||
Net gain on mortgage loans held for sale
|
(331
|
)
|
|
(166
|
)
|
||
Interest income on reverse mortgage loans
|
(62
|
)
|
|
(82
|
)
|
||
Provision for reserves
|
8
|
|
|
11
|
|
||
Fair value changes and amortization/accretion of mortgage servicing rights/liabilities
|
526
|
|
|
379
|
|
||
Fair value changes in excess spread financing
|
(35
|
)
|
|
(69
|
)
|
||
Fair value changes in mortgage servicing rights financing liability
|
6
|
|
|
2
|
|
||
Fair value changes in mortgage loans held for investment
|
—
|
|
|
(1
|
)
|
||
Amortization of premiums, net of discount accretion
|
23
|
|
|
2
|
|
||
Depreciation and amortization for property and equipment and intangible assets
|
19
|
|
|
21
|
|
||
Share-based compensation
|
4
|
|
|
4
|
|
||
Other loss
|
7
|
|
|
—
|
|
||
Repurchases of forward loan assets out of Ginnie Mae securitizations
|
(919
|
)
|
|
(364
|
)
|
||
Mortgage loans originated and purchased for sale, net of fees
|
(12,375
|
)
|
|
(5,717
|
)
|
||
Sales proceeds and loan payment proceeds for mortgage loans held for sale and held for investment
|
13,724
|
|
|
6,197
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Advances and other receivables
|
300
|
|
|
120
|
|
||
Reverse mortgage interests
|
400
|
|
|
614
|
|
||
Other assets
|
(91
|
)
|
|
(216
|
)
|
||
Payables and other liabilities
|
(255
|
)
|
|
(217
|
)
|
||
Net cash attributable to operating activities
|
710
|
|
|
285
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
||||
Acquisitions, net of cash acquired
|
—
|
|
|
(85
|
)
|
||
Property and equipment additions, net of disposals
|
(12
|
)
|
|
(10
|
)
|
||
Purchase of forward mortgage servicing rights, net of liabilities incurred
|
(27
|
)
|
|
(130
|
)
|
||
Proceeds on sale of forward and reverse mortgage servicing rights
|
43
|
|
|
243
|
|
||
Net cash attributable to investing activities
|
4
|
|
|
18
|
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Financing Activities
|
|
|
|
||||
(Decrease) increase in warehouse facilities
|
(25
|
)
|
|
307
|
|
||
Increase (decrease) in advance facilities
|
68
|
|
|
(30
|
)
|
||
Repayment of notes payable
|
—
|
|
|
(294
|
)
|
||
Proceeds from sale of HECM securitizations
|
—
|
|
|
20
|
|
||
Repayment of HECM securitizations
|
(99
|
)
|
|
(127
|
)
|
||
Proceeds from issuance of participating interest financing in reverse mortgage interests
|
55
|
|
|
86
|
|
||
Repayment of participating interest financing in reverse mortgage interests
|
(330
|
)
|
|
(494
|
)
|
||
Proceeds from the issuance of excess spread financing
|
24
|
|
|
245
|
|
||
Settlements and repayments of excess spread financing
|
(58
|
)
|
|
(50
|
)
|
||
Issuance of unsecured senior debt
|
600
|
|
|
—
|
|
||
Repayment of nonrecourse debt – legacy assets
|
—
|
|
|
(3
|
)
|
||
Redemption and repayment of unsecured senior notes
|
(698
|
)
|
|
—
|
|
||
Repayment of finance lease liability
|
(1
|
)
|
|
(1
|
)
|
||
Surrender of shares relating to stock vesting
|
(5
|
)
|
|
(2
|
)
|
||
Debt financing costs
|
(12
|
)
|
|
(1
|
)
|
||
Net cash attributable to financing activities
|
(481
|
)
|
|
(344
|
)
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
233
|
|
|
(41
|
)
|
||
Cash, cash equivalents, and restricted cash - beginning of period
|
612
|
|
|
561
|
|
||
Cash, cash equivalents, and restricted cash - end of period(1)
|
$
|
845
|
|
|
$
|
520
|
|
|
|
|
|
||||
Supplemental Disclosures of Cash Activities
|
|
|
|
||||
Cash paid for interest expense
|
$
|
89
|
|
|
$
|
74
|
|
(1)
|
The following table provides a reconciliation of cash, cash equivalents and restricted cash to amount reported within the consolidated balance sheets.
|
|
March 31, 2020
|
|
March 31, 2019
|
||||
Cash and cash equivalents
|
$
|
579
|
|
|
$
|
181
|
|
Restricted cash
|
266
|
|
|
339
|
|
||
Total cash, cash equivalents, and restricted cash
|
$
|
845
|
|
|
$
|
520
|
|
Final Estimated Fair Value of Net Assets Acquired:
|
|
||
Cash and cash equivalents
|
$
|
37
|
|
Restricted cash
|
2
|
|
|
Mortgage servicing rights
|
271
|
|
|
Advances and other receivables
|
84
|
|
|
Mortgage loans held for sale
|
536
|
|
|
Mortgage loans held for investment
|
1
|
|
|
Property and equipment
|
8
|
|
|
Other assets
|
483
|
|
|
Fair value of assets acquired
|
1,422
|
|
|
Notes payable(1)
|
294
|
|
|
Advance facilities
|
13
|
|
|
Warehouse facilities
|
393
|
|
|
Payables and other liabilities
|
530
|
|
|
Other nonrecourse debt
|
129
|
|
|
Fair value of liabilities assumed
|
1,359
|
|
|
Total fair value of net tangible assets acquired
|
63
|
|
|
Intangible assets:
|
|
||
Customer relationships(2)
|
13
|
|
|
Goodwill
|
40
|
|
|
Final purchase price
|
$
|
116
|
|
(1)
|
Notes payable was subsequently paid off in February 2019 after the consummation of the acquisition.
|
(2)
|
The estimated fair values for customer relationships were measured using the excess earnings method and were determined to have a remaining useful life of 10 years.
|
|
Three Months Ended March 31, 2019
|
||
Pro forma financial information
|
(unaudited)
|
||
Pro forma total revenues
|
$
|
269
|
|
|
|
||
Pro forma net loss
|
$
|
(184
|
)
|
MSRs and Related Liabilities
|
March 31, 2020
|
|
December 31, 2019
|
||||
Forward MSRs - fair value
|
$
|
3,109
|
|
|
$
|
3,496
|
|
Reverse MSRs - amortized cost
|
6
|
|
|
6
|
|
||
Mortgage servicing rights
|
$
|
3,115
|
|
|
$
|
3,502
|
|
|
|
|
|
||||
Mortgage servicing liabilities - amortized cost
|
$
|
53
|
|
|
$
|
61
|
|
|
|
|
|
||||
Excess spread financing - fair value
|
$
|
1,242
|
|
|
$
|
1,311
|
|
Mortgage servicing rights financing - fair value
|
43
|
|
|
37
|
|
||
MSR related liabilities - nonrecourse at fair value
|
$
|
1,285
|
|
|
$
|
1,348
|
|
Forward MSRs - Fair Value
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Fair value - beginning of period
|
$
|
3,496
|
|
|
$
|
3,665
|
|
Additions:
|
|
|
|
||||
Servicing retained from mortgage loans sold
|
123
|
|
|
66
|
|
||
Purchases of servicing rights(1)
|
24
|
|
|
409
|
|
||
Dispositions:
|
|
|
|
||||
Sales of servicing assets
|
—
|
|
|
(260
|
)
|
||
Changes in fair value:
|
|
|
|
||||
Changes in valuation inputs or assumptions used in the valuation model
|
(401
|
)
|
|
(332
|
)
|
||
Other changes in fair value
|
(133
|
)
|
|
(67
|
)
|
||
Fair value - end of period
|
$
|
3,109
|
|
|
$
|
3,481
|
|
(1)
|
Purchases of servicing rights during the three months ended March 31, 2019 includes $271 of mortgage servicing rights that were acquired from Pacific Union. See Note 2, Acquisitions, for further discussion.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
Forward MSRs - UPB and fair value breakdown
|
UPB
|
|
Fair Value
|
|
UPB
|
|
Fair Value
|
||||||||
Acquisition Pools
|
|
|
|
|
|
|
|
||||||||
Credit sensitive
|
$
|
138,726
|
|
|
$
|
1,386
|
|
|
$
|
147,895
|
|
|
$
|
1,613
|
|
Interest sensitive
|
151,908
|
|
|
1,723
|
|
|
148,887
|
|
|
1,883
|
|
||||
Total
|
$
|
290,634
|
|
|
$
|
3,109
|
|
|
$
|
296,782
|
|
|
$
|
3,496
|
|
|
|
|
|
|
|
|
|
||||||||
Investors Pools
|
|
|
|
|
|
|
|
||||||||
Agency(1)
|
$
|
238,956
|
|
|
$
|
2,618
|
|
|
$
|
240,688
|
|
|
$
|
2,944
|
|
Non-agency(2)
|
51,678
|
|
|
491
|
|
|
56,094
|
|
|
552
|
|
||||
Total
|
$
|
290,634
|
|
|
$
|
3,109
|
|
|
$
|
296,782
|
|
|
$
|
3,496
|
|
(1)
|
Agency investors primarily consist of government sponsored enterprises (“GSE”), such as the Federal National Mortgage Association (“Fannie Mae” or “FNMA”) and the Federal Home Loan Mortgage Corp (“Freddie Mac” or “FHLMC”), and the Government National Mortgage Association (“Ginnie Mae” or “GNMA”).
|
(2)
|
Non-agency investors consist of investors in private-label securitizations.
|
|
Discount Rate
|
|
Total Prepayment Speeds
|
||||||||||||
Forward MSRs - Hypothetical Sensitivities
|
100 bps
Adverse
Change
|
|
200 bps
Adverse
Change
|
|
10%
Adverse
Change
|
|
20%
Adverse
Change
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
||||||||
Mortgage servicing rights
|
$
|
(111
|
)
|
|
$
|
(214
|
)
|
|
$
|
(158
|
)
|
|
$
|
(305
|
)
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Mortgage servicing rights
|
$
|
(127
|
)
|
|
$
|
(245
|
)
|
|
$
|
(165
|
)
|
|
$
|
(317
|
)
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2020
|
|
2019
|
||||||||||||
Reverse MSRs and Liabilities - Amortized Cost
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Balance - beginning of period
|
$
|
6
|
|
|
$
|
61
|
|
|
$
|
11
|
|
|
$
|
71
|
|
Amortization/accretion
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(18
|
)
|
||||
Adjustments(1)
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
37
|
|
||||
Balance - end of the period
|
$
|
6
|
|
|
$
|
53
|
|
|
$
|
7
|
|
|
$
|
90
|
|
Fair value - end of period
|
$
|
6
|
|
|
$
|
27
|
|
|
$
|
7
|
|
|
$
|
75
|
|
(1)
|
Reverse MSR and MSL net adjustments recorded by the Company during the three months ended March 31, 2019 primarily relate to the fair value adjustments for reverse MSR and MSL assumed from the Merger resulting from the revised cost to service assumption used in the valuation of reverse MSR and MSL during the measurement period.
|
|
Discount Rate
|
|
Prepayment Speeds
|
||||||||||||
Excess Spread Financing - Hypothetical Sensitivities
|
100 bps
Adverse
Change
|
|
200 bps
Adverse
Change
|
|
10%
Adverse
Change
|
|
20%
Adverse
Change
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
||||||||
Excess spread financing
|
$
|
43
|
|
|
$
|
89
|
|
|
$
|
48
|
|
|
$
|
98
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Excess spread financing
|
$
|
46
|
|
|
$
|
95
|
|
|
$
|
46
|
|
|
$
|
96
|
|
Mortgage Servicing Rights Financing Assumptions
|
March 31, 2020
|
|
December 31, 2019
|
||
Advance financing rates
|
1.7
|
%
|
|
3.5
|
%
|
Annual advance recovery rates
|
18.4
|
%
|
|
18.8
|
%
|
Total Revenues - Servicing
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Contractually specified servicing fees(1)
|
$
|
297
|
|
|
$
|
281
|
|
Other service-related income(1)
|
49
|
|
|
50
|
|
||
Incentive and modification income(1)
|
10
|
|
|
7
|
|
||
Late fees(1)
|
27
|
|
|
25
|
|
||
Reverse servicing fees
|
6
|
|
|
9
|
|
||
Mark-to-market adjustments(2)
|
(383
|
)
|
|
(293
|
)
|
||
Counterparty revenue share(3)
|
(76
|
)
|
|
(48
|
)
|
||
Amortization, net of accretion(4)
|
(76
|
)
|
|
(23
|
)
|
||
Total revenues - Servicing
|
$
|
(146
|
)
|
|
$
|
8
|
|
(1)
|
The Company recognizes revenue on an earned basis for services performed. Amounts include subservicing related revenues.
|
(2)
|
Mark-to-market (“MTM”) adjustments include fair value adjustments on MSR, excess spread financing and MSR financing liabilities. The amount of MSR MTM includes 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. The impact of negative modeled cash flows for the Company was $10 and $11 for the three months ended March 31, 2020 and 2019, respectively.
|
(3)
|
Counterparty revenue share represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements and the payments made associated with MSR financing arrangements.
|
(4)
|
Amortization for the Company is net of excess spread accretion of $68 and $36 and MSL accretion of $8 and $18 for the three months ended March 31, 2020 and 2019, respectively.
|
Advances and Other Receivables, Net
|
March 31, 2020
|
|
December 31, 2019
|
||||
Servicing advances, net of $125 and $131 discount, respectively
|
$
|
688
|
|
|
$
|
970
|
|
Receivables from agencies, investors and prior servicers, net of $21 and $21 discount, respectively
|
190
|
|
|
193
|
|
||
Reserves
|
(193
|
)
|
|
(175
|
)
|
||
Total advances and other receivables, net
|
$
|
685
|
|
|
$
|
988
|
|
Reserves for Advances and Other Receivables
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Balance - beginning of period
|
$
|
168
|
|
|
$
|
47
|
|
Provision and other additions(1)
|
30
|
|
|
30
|
|
||
Write-offs
|
(5
|
)
|
|
(6
|
)
|
||
Balance - end of period
|
$
|
193
|
|
|
$
|
71
|
|
(1)
|
The Company recorded a provision of $10 and $11 through the MTM adjustments in revenues - service related, net, in the consolidated statements of operations for the three months ended March 31, 2020 and 2019, respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate.
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||||||||||
Purchase Discounts
|
Servicing Advances
|
|
Receivables from Agencies, Investors and Prior Servicers
|
|
Servicing Advances
|
|
Receivables from Agencies, Investors and Prior Servicers
|
||||||||
Balance - beginning of period
|
$
|
131
|
|
|
$
|
21
|
|
|
$
|
205
|
|
|
$
|
48
|
|
Addition from acquisition
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||
Utilization of purchase discounts
|
(6
|
)
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
||||
Balance - end of period
|
$
|
125
|
|
|
$
|
21
|
|
|
$
|
169
|
|
|
$
|
48
|
|
Reverse Mortgage Interests, Net
|
March 31, 2020
|
|
December 31, 2019
|
||||
Participating interests in HECM mortgage-backed securities (“HMBS”), net of $16 and $10 purchase discount and premium, respectively
|
$
|
4,027
|
|
|
$
|
4,292
|
|
Other interests securitized, net of $44 and $56 purchase discount, respectively
|
851
|
|
|
938
|
|
||
Unsecuritized interests, net of $69 and $68 purchase discount, respectively
|
1,080
|
|
|
1,052
|
|
||
Reserves
|
(3
|
)
|
|
(3
|
)
|
||
Total reverse mortgage interests, net
|
$
|
5,955
|
|
|
$
|
6,279
|
|
Unsecuritized interests
|
March 31, 2020
|
|
December 31, 2019
|
||||
Repurchased HECM loans (exceeds 98% MCA)
|
$
|
782
|
|
|
$
|
789
|
|
HECM related receivables(1)
|
257
|
|
|
250
|
|
||
Funded borrower draws not yet securitized
|
64
|
|
|
67
|
|
||
Real estate owned (“REO”) related receivables
|
46
|
|
|
14
|
|
||
Purchase discount, net
|
(69
|
)
|
|
(68
|
)
|
||
Total unsecuritized interests
|
$
|
1,080
|
|
|
$
|
1,052
|
|
(1)
|
HECM related receivables consist primarily of receivables from FNMA for corporate advances and service fees and claims receivables from the U.S. Department of Housing and Urban Development (“HUD”) on reverse mortgage interests.
|
Reserves for reverse mortgage interests
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Balance - beginning of period
|
$
|
3
|
|
|
$
|
13
|
|
Provision (release), net
|
—
|
|
|
—
|
|
||
Write-offs
|
—
|
|
|
(5
|
)
|
||
Balance - end of period
|
$
|
3
|
|
|
$
|
8
|
|
|
Three Months Ended March 31, 2020
|
||||||||||
Purchase premiums and discounts for reverse mortgage interests
|
Net Discount for Participating Interests in HMBS(1)
|
|
Net Discount for Other Interest Securitized(1)
|
|
Net Discount for Unsecuritized Interests(1)
|
||||||
Balance - beginning of period
|
$
|
10
|
|
|
$
|
(56
|
)
|
|
$
|
(68
|
)
|
Utilization of purchase discounts(2)
|
—
|
|
|
5
|
|
|
5
|
|
|||
(Amortization)/Accretion
|
(44
|
)
|
|
17
|
|
|
2
|
|
|||
Transfers(3)
|
18
|
|
|
(10
|
)
|
|
(8
|
)
|
|||
Balance - end of period
|
$
|
(16
|
)
|
|
$
|
(44
|
)
|
|
$
|
(69
|
)
|
|
Three Months Ended March 31, 2019
|
||||||||||
Purchase premiums and discounts for reverse mortgage interests
|
Net Premium for Participating Interests in HMBS(1)
|
|
Net Discount for Other Interest Securitized(1)
|
|
Net Discount for Unsecuritized Interests(1)
|
||||||
Balance - beginning of period
|
$
|
58
|
|
|
$
|
(100
|
)
|
|
$
|
(122
|
)
|
Adjustments(4)
|
(16
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|||
Utilization of purchase discounts(2)
|
—
|
|
|
6
|
|
|
22
|
|
|||
(Amortization)/Accretion
|
(14
|
)
|
|
(15
|
)
|
|
18
|
|
|||
Transfers(3)
|
8
|
|
|
(1
|
)
|
|
(7
|
)
|
|||
Balance - end of period
|
$
|
36
|
|
|
$
|
(112
|
)
|
|
$
|
(95
|
)
|
(1)
|
Net position as certain items are in a premium/(discount) position, based on the characteristics of underlying tranches of loans.
|
(2)
|
Utilization of purchase discounts on liquidated loans, for which the remaining receivable was written-off.
|
(3)
|
Transfer of premium/(discount) based on the transfer of associated loans between categories consistent with the underlying loan characteristics.
|
(4)
|
Adjustments to premium/(discount) due to revised cost to service assumption utilized in the valuation of reverse mortgage assets and liabilities acquired from the Merger during the measurement period.
|
Mortgage Loans Held for Sale
|
March 31, 2020
|
|
December 31, 2019
|
||||
Mortgage loans held for sale – UPB
|
$
|
3,735
|
|
|
$
|
3,949
|
|
Mark-to-market adjustment(1)
|
187
|
|
|
128
|
|
||
Total mortgage loans held for sale
|
$
|
3,922
|
|
|
$
|
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.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
Mortgage Loans Held for Sale
|
UPB
|
|
Fair Value
|
|
UPB
|
|
Fair Value
|
||||||||
Non-accrual(1)
|
$
|
33
|
|
|
$
|
23
|
|
|
$
|
29
|
|
|
$
|
22
|
|
(1)
|
Non-accrual - UPB includes $28 and $25 of UPB related to Ginnie Mae repurchased loans as of March 31, 2020 and December 31, 2019, respectively.
|
Mortgage Loans Held for Sale
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Balance - beginning of period
|
$
|
4,077
|
|
|
$
|
1,631
|
|
Loans sold
|
(13,510
|
)
|
|
(6,088
|
)
|
||
Mortgage loans originated and purchased, net of fees(1)
|
12,375
|
|
|
6,253
|
|
||
Repurchase of loans out of Ginnie Mae securitizations
|
919
|
|
|
364
|
|
||
Changes in fair value
|
61
|
|
|
10
|
|
||
Net transfers of mortgage loans held for sale(2)
|
—
|
|
|
—
|
|
||
Balance - end of period
|
$
|
3,922
|
|
|
$
|
2,170
|
|
(1)
|
Mortgage loans originated and purchased during the three months ended March 31, 2019 includes $536 of loans held for sale that were acquired from Pacific Union. See Note 2, Acquisitions, for further discussion.
|
(2)
|
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.
|
Net lease cost
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Operating lease cost
|
$
|
10
|
|
|
$
|
8
|
|
Short-term lease cost
|
—
|
|
|
1
|
|
||
Sublease income
|
(1
|
)
|
|
—
|
|
||
Net lease cost
|
$
|
9
|
|
|
$
|
9
|
|
Operating leases
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
||||
Operating cash flows from operating leases
|
$
|
10
|
|
|
$
|
6
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
$
|
—
|
|
|
$
|
127
|
|
Weighted average remaining lease term
|
5.6 years
|
|
|
5.5 years
|
|
||
Weighted average discount rate
|
5.0
|
%
|
|
5.0
|
%
|
Year Ending December 31,
|
|
Operating Leases
|
||
2020(1)
|
|
$
|
37
|
|
2021
|
|
29
|
|
|
2022
|
|
20
|
|
|
2023
|
|
16
|
|
|
2024
|
|
11
|
|
|
2025 and thereafter
|
|
30
|
|
|
Total future minimum lease payments
|
|
143
|
|
|
Less: imputed interest
|
|
18
|
|
|
Total operating lease liabilities
|
|
$
|
125
|
|
(1)
|
Excluding the three months ended March 31, 2020.
|
Other assets
|
March 31, 2020
|
|
December 31, 2019
|
||||
Loans subject to repurchase right from Ginnie Mae
|
$
|
468
|
|
|
$
|
560
|
|
Derivative financial instruments
|
294
|
|
|
153
|
|
||
Trade receivables and accrued revenues
|
143
|
|
|
126
|
|
||
Goodwill
|
120
|
|
|
120
|
|
||
Right-of-use assets
|
111
|
|
|
121
|
|
||
Intangible assets
|
61
|
|
|
74
|
|
||
Other
|
372
|
|
|
236
|
|
||
Total other assets
|
$
|
1,569
|
|
|
$
|
1,390
|
|
|
|
|
March 31, 2020
|
|
Three Months Ended March 31, 2020
|
||||||||
Derivative Financial Instruments
|
Expiration
Dates
|
|
Outstanding
Notional
|
|
Fair
Value
|
|
Recorded Gains/(Losses)
|
||||||
Assets
|
|
|
|
|
|
|
|
||||||
Mortgage loans held for sale
|
|
|
|
|
|
|
|
||||||
Loan sale commitments
|
2020
|
|
$
|
2,598
|
|
|
$
|
111
|
|
|
$
|
79
|
|
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||
IRLCs
|
2020
|
|
6,923
|
|
|
263
|
|
|
128
|
|
|||
LPCs
|
2020
|
|
834
|
|
|
25
|
|
|
13
|
|
|||
Forward MBS trades
|
2020
|
|
886
|
|
|
6
|
|
|
—
|
|
|||
Eurodollar futures
|
2020-2021
|
|
6
|
|
|
—
|
|
|
—
|
|
|||
Total derivative financial instruments - assets
|
|
|
$
|
8,649
|
|
|
$
|
294
|
|
|
$
|
141
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||
IRLCs
|
2020
|
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
LPCs
|
2020
|
|
10
|
|
|
—
|
|
|
(3
|
)
|
|||
Forward MBS trades
|
2020
|
|
10,229
|
|
|
223
|
|
|
211
|
|
|||
Eurodollar futures
|
2020-2021
|
|
6
|
|
|
—
|
|
|
—
|
|
|||
Total derivative financial instruments - liabilities
|
|
|
$
|
10,267
|
|
|
$
|
223
|
|
|
$
|
208
|
|
|
|
|
March 31, 2019
|
|
Three Months Ended March 31, 2019
|
||||||||
Derivative Financial Instruments
|
Expiration
Dates |
|
Outstanding
Notional |
|
Fair
Value |
|
Recorded Gains/(Losses)
|
||||||
Assets
|
|
|
|
|
|
|
|
||||||
Mortgage loans held for sale
|
|
|
|
|
|
|
|
||||||
Loan sale commitments
|
2019
|
|
$
|
365
|
|
|
$
|
17
|
|
|
$
|
(9
|
)
|
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||
IRLCs
|
2019
|
|
2,557
|
|
|
69
|
|
|
9
|
|
|||
LPCs
|
2019
|
|
216
|
|
|
2
|
|
|
1
|
|
|||
Forward MBS trades
|
2019
|
|
410
|
|
|
1
|
|
|
(1
|
)
|
|||
Eurodollar futures
|
2019-2021
|
|
7
|
|
|
—
|
|
|
—
|
|
|||
Total derivative financial instruments - assets
|
|
|
$
|
3,190
|
|
|
$
|
72
|
|
|
$
|
9
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||
LPCs
|
2019
|
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward MBS trades
|
2019
|
|
3,804
|
|
|
22
|
|
|
(3
|
)
|
|||
Eurodollar futures
|
2019-2021
|
|
13
|
|
|
—
|
|
|
—
|
|
|||
Total derivative financial instruments - liabilities
|
|
|
$
|
3,869
|
|
|
$
|
22
|
|
|
$
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||
Advance Facilities
|
|
Interest Rate
|
|
Maturity Date
|
|
Collateral
|
|
Capacity Amount
|
|
Outstanding
|
|
Collateral Pledged
|
|
Outstanding
|
|
Collateral pledged
|
||||||||||
$325 advance facility(1)
|
|
LIBOR+1.5% to 6.5%
|
|
August 2021
|
|
Servicing advance receivables
|
|
$
|
325
|
|
|
$
|
223
|
|
|
$
|
283
|
|
|
$
|
224
|
|
|
$
|
285
|
|
$250 advance facility(2)
|
|
LIBOR+1.5% to 2.6%
|
|
December 2020
|
|
Servicing advance receivables
|
|
250
|
|
|
118
|
|
|
138
|
|
|
98
|
|
|
167
|
|
|||||
$200 advance facility
|
|
LIBOR+2.5%
|
|
January 2021
|
|
Servicing advance receivables
|
|
200
|
|
|
83
|
|
|
117
|
|
|
63
|
|
|
125
|
|
|||||
$125 advance facility(3)
|
|
LIBOR+1.5% to 7.4%
|
|
July 2020
|
|
Servicing advance receivables
|
|
125
|
|
|
66
|
|
|
76
|
|
|
37
|
|
|
88
|
|
|||||
Advance facilities principal amount
|
|
|
|
|
|
490
|
|
|
$
|
614
|
|
|
422
|
|
|
$
|
665
|
|
||||||||
Unamortized debt issuance costs
|
|
|
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
||||||||||||
Advance facilities, net
|
|
|
|
$
|
489
|
|
|
|
|
$
|
422
|
|
|
|
(1)
|
The capacity amount was subsequently increased to $425 in April 2020 with a maturity date of October 2021.
|
(2)
|
This advance facility was subsequently terminated and transferred to another advance facility in April 2020.
|
(3)
|
The capacity amount was subsequently increased to $875 in April 2020 with a maturity date of April 2021.
|
|
|
|
|
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||
Warehouse Facilities
|
|
Interest Rate
|
|
Maturity Date
|
|
Collateral
|
|
Capacity Amount
|
|
Outstanding
|
|
Collateral pledged
|
|
Outstanding
|
|
Collateral pledged
|
||||||||||
$1,500 warehouse facility
|
|
LIBOR+1.0%
|
|
June 2020
|
|
Mortgage loans or MBS
|
|
$
|
1,500
|
|
|
$
|
1,214
|
|
|
$
|
1,160
|
|
|
$
|
759
|
|
|
$
|
733
|
|
$1,200 warehouse facility
|
|
LIBOR+1.5% to 3.0%
|
|
November 2020
|
|
Mortgage loans or MBS
|
|
1,200
|
|
|
566
|
|
|
602
|
|
|
683
|
|
|
724
|
|
|||||
$1,000 warehouse facility
|
|
LIBOR+1.4% to 2.3%
|
|
September 2020
|
|
Mortgage loans or MBS
|
|
1,000
|
|
|
593
|
|
|
608
|
|
|
762
|
|
|
783
|
|
|||||
$800 warehouse facility(1)
|
|
LIBOR+2.1% to 3.8%
|
|
April 2021
|
|
Mortgage loans or MBS
|
|
800
|
|
|
528
|
|
|
639
|
|
|
589
|
|
|
656
|
|
|||||
$750 warehouse facility
|
|
LIBOR+1.4% to 2.8%
|
|
September 2020
|
|
Mortgage loans or MBS
|
|
750
|
|
|
347
|
|
|
355
|
|
|
411
|
|
|
425
|
|
|||||
$700 warehouse facility
|
|
LIBOR+1.3% to 2.2%
|
|
November 2020
|
|
Mortgage loans or MBS
|
|
700
|
|
|
628
|
|
|
649
|
|
|
469
|
|
|
488
|
|
|||||
$600 warehouse facility
|
|
LIBOR+2.0%
|
|
February 2021
|
|
Mortgage loans or MBS
|
|
600
|
|
|
169
|
|
|
203
|
|
|
174
|
|
|
202
|
|
|||||
$500 warehouse facility
|
|
LIBOR+2.0% to 4.0%
|
|
May 2020
|
|
Mortgage loans or MBS
|
|
500
|
|
|
22
|
|
|
23
|
|
|
336
|
|
|
349
|
|
|||||
$200 warehouse facility
|
|
LIBOR+1.4%
|
|
January 2021
|
|
Mortgage loans or MBS
|
|
200
|
|
|
100
|
|
|
101
|
|
|
136
|
|
|
136
|
|
|||||
$200 warehouse facility
|
|
LIBOR+1.2%
|
|
April 2021
|
|
Mortgage loans or MBS
|
|
200
|
|
|
21
|
|
|
21
|
|
|
27
|
|
|
27
|
|
|||||
$200 warehouse facility
|
|
LIBOR+2.0%
|
|
May 2020
|
|
Mortgage loans or MBS
|
|
200
|
|
|
59
|
|
|
83
|
|
|
54
|
|
|
78
|
|
|||||
$200 warehouse facility
|
|
LIBOR+1.3%
|
|
October 2020
|
|
Mortgage loans or MBS
|
|
200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
$50 warehouse facility
|
|
LIBOR+2.0% to 6.0%
|
|
June 2020
|
|
Mortgage loans or MBS
|
|
50
|
|
|
4
|
|
|
6
|
|
|
11
|
|
|
15
|
|
|||||
$40 warehouse facility
|
|
LIBOR+3.3%
|
|
September 2020
|
|
Mortgage loans or MBS
|
|
40
|
|
|
6
|
|
|
7
|
|
|
5
|
|
|
6
|
|
|||||
Warehouse facilities principal amount
|
|
4,257
|
|
|
4,457
|
|
|
4,416
|
|
|
4,622
|
|
||||||||||||||
MSR Facility
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$400 warehouse facility
|
|
LIBOR+3.5% or 6.1%
|
|
January 2023
|
|
Mortgage loans or MBS
|
|
400
|
|
|
150
|
|
|
836
|
|
|
150
|
|
|
945
|
|
|||||
$400 warehouse facility
|
|
LIBOR+2.3%
|
|
December 2020
|
|
Mortgage loans or MBS
|
|
400
|
|
|
75
|
|
|
190
|
|
|
—
|
|
|
200
|
|
|||||
$150 warehouse facility(1)
|
|
LIBOR+2.8%
|
|
April 2021
|
|
Mortgage loans or MBS
|
|
150
|
|
|
40
|
|
|
119
|
|
|
—
|
|
|
130
|
|
|||||
$50 warehouse facility
|
|
LIBOR+2.8%
|
|
August 2020
|
|
Mortgage loans or MBS
|
|
50
|
|
|
30
|
|
|
71
|
|
|
10
|
|
|
84
|
|
|||||
MSR facilities principal amount
|
|
295
|
|
|
1,216
|
|
|
160
|
|
|
1,359
|
|
||||||||||||||
Warehouse and MSR facilities principal amount
|
|
4,552
|
|
|
$
|
5,673
|
|
|
4,576
|
|
|
$
|
5,981
|
|
||||||||||||
Unamortized debt issuance costs
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
||||||||||
Warehouse facilities, net
|
|
$
|
4,551
|
|
|
|
|
$
|
4,575
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Pledged Collateral:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans held for sale
|
|
|
|
|
|
|
|
$
|
3,659
|
|
|
$
|
3,748
|
|
|
$
|
3,826
|
|
|
$
|
3,931
|
|
||||
Reverse mortgage interests
|
|
|
|
|
|
|
|
598
|
|
|
709
|
|
|
590
|
|
|
691
|
|
||||||||
MSR
|
|
|
|
|
|
|
|
295
|
|
|
1,216
|
|
|
160
|
|
|
1,359
|
|
(1)
|
Total capacity amount for this facility is $800 of which $150 is a sublimit for MSR financing.
|
Unsecured senior notes
|
March 31, 2020
|
|
December 31, 2019
|
||||
$950 face value, 8.125% interest rate payable semi-annually, due July 2023
|
$
|
950
|
|
|
$
|
950
|
|
$750 face value, 9.125% interest rate payable semi-annually, due July 2026
|
750
|
|
|
750
|
|
||
$600 face value, 6.000% interest rate payable semi-annually, due January 2027(1)
|
600
|
|
|
—
|
|
||
$600 face value, 6.500% interest rate payable semi-annually, due July 2021(2)
|
—
|
|
|
492
|
|
||
$300 face value, 6.500% interest rate payable semi-annually, due June 2022(2)
|
—
|
|
|
206
|
|
||
Unsecured senior notes principal amount
|
2,300
|
|
|
2,398
|
|
||
Unamortized debt issuance costs, premium and discount
|
(41
|
)
|
|
(32
|
)
|
||
Unsecured senior notes, net
|
$
|
2,259
|
|
|
$
|
2,366
|
|
(1)
|
On January 16, 2020, the Company completed an offering of $600 aggregate principal amount of 6.000% Senior Notes due 2027 (the “2027 notes”).
|
(2)
|
This note was redeemed in full on February 15, 2020 using the net proceeds of the 2027 notes offering, together with cash on hand.
|
Year Ending December 31,
|
|
Amount
|
||
2020
|
|
$
|
—
|
|
2021
|
|
—
|
|
|
2022
|
|
—
|
|
|
2023
|
|
950
|
|
|
2024
|
|
—
|
|
|
Thereafter
|
|
1,350
|
|
|
Total unsecured senior notes principal amount
|
|
$
|
2,300
|
|
|
|
|
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||
Other nonrecourse debt
|
Issue Date
|
|
Maturity Date
|
|
Class of Note
|
|
Collateral Amount
|
|
Outstanding
|
|
Outstanding
|
||||||
Participating interest financing(1)
|
—
|
|
—
|
|
—
|
|
$
|
—
|
|
|
$
|
4,045
|
|
|
$
|
4,284
|
|
Securitization of nonperforming HECM loans
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trust 2019-2
|
November 2019
|
|
November 2029
|
|
A, M1, M2, M3, M4, M5
|
|
306
|
|
|
297
|
|
|
333
|
|
|||
Trust 2019-1
|
June 2019
|
|
June 2029
|
|
A, M1, M2, M3, M4, M5
|
|
286
|
|
|
269
|
|
|
302
|
|
|||
Trust 2018-3
|
November 2018
|
|
November 2028
|
|
A, M1, M2, M3, M4, M5
|
|
209
|
|
|
190
|
|
|
209
|
|
|||
Trust 2018-2
|
July 2018
|
|
July 2028
|
|
A, M1, M2, M3, M4, M5
|
|
157
|
|
|
137
|
|
|
148
|
|
|||
Other nonrecourse debt principal amount
|
|
|
|
|
|
|
|
|
4,938
|
|
|
5,276
|
|
||||
Unamortized debt issuance costs, premium and discount
|
|
|
|
|
|
|
|
|
7
|
|
|
10
|
|
||||
Other nonrecourse debt, net
|
|
|
|
|
|
|
|
|
$
|
4,945
|
|
|
$
|
5,286
|
|
(1)
|
Amounts represent the Company’s participating interest in GNMA HMBS securitized portfolios.
|
Payables and other liabilities
|
March 31, 2020
|
|
December 31, 2019
|
||||
Loans subject to repurchase right from Ginnie Mae
|
$
|
468
|
|
|
$
|
560
|
|
Payables to servicing and subservicing investors
|
407
|
|
|
423
|
|
||
Derivative financial instruments
|
223
|
|
|
15
|
|
||
Payable to GSEs and securitized trusts
|
148
|
|
|
182
|
|
||
Operating lease liabilities
|
125
|
|
|
135
|
|
||
Other liabilities
|
594
|
|
|
701
|
|
||
Total payables and other liabilities
|
$
|
1,965
|
|
|
$
|
2,016
|
|
Repurchase Reserves
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Balance - beginning of period
|
$
|
25
|
|
|
$
|
8
|
|
Provisions
|
5
|
|
|
8
|
|
||
Releases
|
(1
|
)
|
|
—
|
|
||
Balance - end of period
|
$
|
29
|
|
|
$
|
16
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||
Consolidated transactions with VIEs
|
Transfers
Accounted for as Secured Borrowings |
|
Reverse Secured Borrowings
|
|
Transfers
Accounted for as Secured Borrowings |
|
Reverse Secured Borrowings
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Restricted cash
|
$
|
53
|
|
|
$
|
43
|
|
|
$
|
66
|
|
|
$
|
42
|
|
Reverse mortgage interests, net(1)
|
—
|
|
|
4,878
|
|
|
—
|
|
|
5,230
|
|
||||
Advances and other receivables, net
|
498
|
|
|
—
|
|
|
540
|
|
|
—
|
|
||||
Total assets
|
$
|
551
|
|
|
$
|
4,921
|
|
|
$
|
606
|
|
|
$
|
5,272
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Advance facilities(2)
|
$
|
407
|
|
|
$
|
—
|
|
|
$
|
359
|
|
|
$
|
—
|
|
Payables and other liabilities
|
—
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Participating interest financing
|
—
|
|
|
4,045
|
|
|
—
|
|
|
4,284
|
|
||||
HECM Securitizations (HMBS)
|
|
|
|
|
|
|
|
||||||||
Trust 2019-2
|
—
|
|
|
297
|
|
|
—
|
|
|
333
|
|
||||
Trust 2019-1
|
—
|
|
|
269
|
|
|
—
|
|
|
302
|
|
||||
Trust 2018-3
|
—
|
|
|
190
|
|
|
—
|
|
|
209
|
|
||||
Trust 2018-2
|
—
|
|
|
137
|
|
|
—
|
|
|
148
|
|
||||
Total liabilities
|
$
|
407
|
|
|
$
|
4,939
|
|
|
$
|
360
|
|
|
$
|
5,277
|
|
(1)
|
Amounts include net purchase discount of $60 and $46 as of March 31, 2020 and December 31, 2019, respectively.
|
(2)
|
Amounts include the Nationstar agency advance financing facility and notes payable recorded by the Nationstar Mortgage Advance Receivable Trust, and the Nationstar Agency Advance Receivables Trust. Refer to Notes Payable in Note 10, Indebtedness, for additional information.
|
Unconsolidated securitization trusts
|
March 31, 2020
|
|
December 31, 2019
|
||||
Total collateral balances - UPB
|
$
|
1,460
|
|
|
$
|
1,503
|
|
Total certificate balances
|
$
|
1,467
|
|
|
$
|
1,512
|
|
Principal Amount of Transferred Loans 60 Days or More Past Due
|
March 31, 2020
|
|
December 31, 2019
|
||||
Unconsolidated securitization trusts
|
$
|
184
|
|
|
$
|
193
|
|
Computation of earnings per share
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Net loss attributable to Mr. Cooper
|
$
|
(168
|
)
|
|
$
|
(186
|
)
|
Less: Undistributed earnings attributable to participating stockholders
|
—
|
|
|
—
|
|
||
Net loss attributable to common stockholders
|
$
|
(168
|
)
|
|
$
|
(186
|
)
|
|
|
|
|
||||
Net loss per common share attributable to Mr. Cooper:
|
|
|
|
||||
Basic
|
$
|
(1.84
|
)
|
|
$
|
(2.05
|
)
|
Diluted
|
$
|
(1.84
|
)
|
|
$
|
(2.05
|
)
|
|
|
|
|
||||
Weighted average shares of common stock outstanding (in thousands):
|
|
|
|
||||
Basic
|
91,385
|
|
|
90,828
|
|
||
Dilutive effect of stock awards(1)
|
—
|
|
|
—
|
|
||
Dilutive effect of participating securities(1)
|
—
|
|
|
—
|
|
||
Diluted
|
91,385
|
|
|
90,828
|
|
(1)
|
Due to year-to-date loss, the Company excluded potential common shares from the computation of diluted EPS because inclusion would be antidilutive.
|
Income taxes
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Loss before income tax benefit
|
$
|
(239
|
)
|
|
$
|
(233
|
)
|
|
|
|
|
||||
Income tax benefit
|
$
|
(68
|
)
|
|
$
|
(47
|
)
|
|
|
|
|
||||
Effective tax rate(1)
|
28.4
|
%
|
|
20.3
|
%
|
(1)
|
Effective tax rate is calculated using whole numbers.
|
|
March 31, 2020
|
||||||||||||||
|
|
|
Recurring Fair Value Measurements
|
||||||||||||
Fair value - Recurring basis
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Mortgage loans held for sale
|
$
|
3,922
|
|
|
$
|
—
|
|
|
$
|
3,922
|
|
|
$
|
—
|
|
Forward mortgage servicing rights
|
3,109
|
|
|
—
|
|
|
—
|
|
|
3,109
|
|
||||
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||||
IRLCs
|
263
|
|
|
—
|
|
|
263
|
|
|
—
|
|
||||
Forward MBS trades
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
LPCs
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
||||
Total assets
|
$
|
7,325
|
|
|
$
|
—
|
|
|
$
|
4,216
|
|
|
$
|
3,109
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||||
Forward MBS trades
|
$
|
223
|
|
|
$
|
—
|
|
|
$
|
223
|
|
|
$
|
—
|
|
Mortgage servicing rights financing
|
43
|
|
|
—
|
|
|
—
|
|
|
43
|
|
||||
Excess spread financing
|
1,242
|
|
|
—
|
|
|
—
|
|
|
1,242
|
|
||||
Total liabilities
|
$
|
1,508
|
|
|
$
|
—
|
|
|
$
|
223
|
|
|
$
|
1,285
|
|
|
December 31, 2019
|
||||||||||||||
|
|
|
Recurring Fair Value Measurements
|
||||||||||||
Fair value - Recurring basis
|
Total Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Mortgage loans held for sale
|
$
|
4,077
|
|
|
$
|
—
|
|
|
$
|
4,077
|
|
|
$
|
—
|
|
Forward mortgage servicing rights
|
3,496
|
|
|
—
|
|
|
—
|
|
|
3,496
|
|
||||
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||||
IRLCs
|
135
|
|
|
—
|
|
|
135
|
|
|
—
|
|
||||
Forward MBS trades
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||
LPCs
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Total assets
|
$
|
7,727
|
|
|
$
|
—
|
|
|
$
|
4,231
|
|
|
$
|
3,496
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
|
|
|
|
|
|
|
||||||||
Forward MBS trades
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
—
|
|
LPCs
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Mortgage servicing rights financing
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
||||
Excess spread financing
|
1,311
|
|
|
—
|
|
|
—
|
|
|
1,311
|
|
||||
Total liabilities
|
$
|
1,363
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
1,348
|
|
|
Three Months Ended March 31, 2020
|
||||||||||
|
Assets
|
|
Liabilities
|
||||||||
Fair value - Level 3 assets and liabilities
|
Mortgage servicing rights
|
|
Excess spread financing
|
|
Mortgage servicing rights financing
|
||||||
Balance - beginning of period
|
$
|
3,496
|
|
|
$
|
1,311
|
|
|
$
|
37
|
|
Total gains or losses included in earnings
|
(534
|
)
|
|
(35
|
)
|
|
6
|
|
|||
Purchases, issuances, sales, repayments and settlements
|
|
|
|
|
|
||||||
Purchases
|
24
|
|
|
—
|
|
|
—
|
|
|||
Issuances
|
123
|
|
|
24
|
|
|
—
|
|
|||
Settlements and repayments
|
—
|
|
|
(58
|
)
|
|
—
|
|
|||
Balance - end of period
|
$
|
3,109
|
|
|
$
|
1,242
|
|
|
$
|
43
|
|
|
Three Months Ended March 31, 2019
|
||||||||||
|
Assets
|
|
Liabilities
|
||||||||
Fair value - Level 3 assets and liabilities
|
Mortgage servicing rights
|
|
Excess spread financing
|
|
Mortgage servicing rights financing
|
||||||
Balance - beginning of period
|
$
|
3,665
|
|
|
$
|
1,184
|
|
|
$
|
32
|
|
Total gains or losses included in earnings
|
(399
|
)
|
|
(69
|
)
|
|
2
|
|
|||
Purchases, issuances, sales, repayments and settlements
|
|
|
|
|
|
||||||
Purchases
|
409
|
|
|
—
|
|
|
—
|
|
|||
Issuances
|
66
|
|
|
245
|
|
|
—
|
|
|||
Sales
|
(260
|
)
|
|
—
|
|
|
—
|
|
|||
Settlements and repayments
|
—
|
|
|
(51
|
)
|
|
—
|
|
|||
Balance - end of period
|
$
|
3,481
|
|
|
$
|
1,309
|
|
|
$
|
34
|
|
|
March 31, 2020
|
||||||||||||||
|
Carrying
Amount
|
|
Fair Value
|
||||||||||||
Financial instruments
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
579
|
|
|
$
|
579
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
266
|
|
|
266
|
|
|
—
|
|
|
—
|
|
||||
Advances and other receivables, net
|
685
|
|
|
—
|
|
|
—
|
|
|
685
|
|
||||
Reverse mortgage interests, net
|
5,955
|
|
|
—
|
|
|
—
|
|
|
6,015
|
|
||||
Mortgage loans held for sale
|
3,922
|
|
|
—
|
|
|
3,922
|
|
|
—
|
|
||||
Derivative financial instruments
|
294
|
|
|
—
|
|
|
294
|
|
|
—
|
|
||||
Financial liabilities
|
|
|
|
|
|
|
|
||||||||
Unsecured senior notes(1)
|
2,259
|
|
|
2,055
|
|
|
—
|
|
|
—
|
|
||||
Advance facilities(1)
|
489
|
|
|
—
|
|
|
489
|
|
|
—
|
|
||||
Warehouse facilities(1)
|
4,551
|
|
|
—
|
|
|
4,551
|
|
|
—
|
|
||||
Mortgage servicing rights financing liability
|
43
|
|
|
—
|
|
|
—
|
|
|
43
|
|
||||
Excess spread financing
|
1,242
|
|
|
—
|
|
|
—
|
|
|
1,242
|
|
||||
Derivative financial instruments
|
223
|
|
|
—
|
|
|
223
|
|
|
—
|
|
||||
Participating interest financing(1)
|
4,056
|
|
|
—
|
|
|
—
|
|
|
4,056
|
|
||||
HECM Securitization (HMBS)(1)
|
|
|
|
|
|
|
|
||||||||
Trust 2019-2
|
295
|
|
|
—
|
|
|
—
|
|
|
295
|
|
||||
Trust 2019-1
|
268
|
|
|
—
|
|
|
—
|
|
|
268
|
|
||||
Trust 2018-3
|
189
|
|
|
—
|
|
|
—
|
|
|
189
|
|
||||
Trust 2018-2
|
137
|
|
|
—
|
|
|
—
|
|
|
137
|
|
(1)
|
The amounts are presented net of unamortized debt issuance costs, premium and discount.
|
|
December 31, 2019
|
||||||||||||||
|
Carrying
Amount
|
|
Fair Value
|
||||||||||||
Financial instruments
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Financial assets
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
329
|
|
|
$
|
329
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restricted cash
|
283
|
|
|
283
|
|
|
—
|
|
|
—
|
|
||||
Advances and other receivables, net
|
988
|
|
|
—
|
|
|
—
|
|
|
988
|
|
||||
Reverse mortgage interests, net
|
6,279
|
|
|
—
|
|
|
—
|
|
|
6,318
|
|
||||
Mortgage loans held for sale
|
4,077
|
|
|
—
|
|
|
4,077
|
|
|
—
|
|
||||
Derivative financial instruments
|
153
|
|
|
—
|
|
|
153
|
|
|
—
|
|
||||
Financial liabilities
|
|
|
|
|
|
|
|
||||||||
Unsecured senior notes(1)
|
2,366
|
|
|
2,505
|
|
|
—
|
|
|
—
|
|
||||
Advance facilities
|
422
|
|
|
—
|
|
|
422
|
|
|
—
|
|
||||
Warehouse facilities(1)
|
4,575
|
|
|
—
|
|
|
4,575
|
|
|
—
|
|
||||
Mortgage servicing rights financing liability
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
||||
Excess spread financing
|
1,311
|
|
|
—
|
|
|
—
|
|
|
1,311
|
|
||||
Derivative financial instruments
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||
Participating interest financing(1)
|
4,299
|
|
|
—
|
|
|
—
|
|
|
4,299
|
|
||||
HECM Securitization (HMBS)(1)
|
|
|
|
|
|
|
|
||||||||
Trust 2019-2
|
331
|
|
|
—
|
|
|
—
|
|
|
331
|
|
||||
Trust 2019-1
|
300
|
|
|
—
|
|
|
—
|
|
|
300
|
|
||||
Trust 2018-3
|
208
|
|
|
—
|
|
|
—
|
|
|
208
|
|
||||
Trust 2018-2
|
148
|
|
|
—
|
|
|
—
|
|
|
148
|
|
(1)
|
The amounts are presented net of unamortized debt issuance costs, premium and discount.
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||||||||||||
Financial information by segment
|
Servicing
|
|
Originations
|
|
Xome
|
|
Elimination
|
|
Total Operating Segments
|
|
Corporate/Other
|
|
Consolidated
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Service related, net
|
$
|
(180
|
)
|
|
$
|
20
|
|
|
$
|
106
|
|
|
$
|
(1
|
)
|
|
$
|
(55
|
)
|
|
$
|
2
|
|
|
$
|
(53
|
)
|
Net gain on mortgage loans held for sale
|
34
|
|
|
297
|
|
|
—
|
|
|
—
|
|
|
331
|
|
|
—
|
|
|
331
|
|
|||||||
Total revenues
|
(146
|
)
|
|
317
|
|
|
106
|
|
|
(1
|
)
|
|
276
|
|
|
2
|
|
|
278
|
|
|||||||
Total expenses
|
149
|
|
|
166
|
|
|
96
|
|
|
(1
|
)
|
|
410
|
|
|
34
|
|
|
444
|
|
|||||||
Other income (expenses), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
83
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|
1
|
|
|
118
|
|
|||||||
Interest expense
|
(113
|
)
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
(52
|
)
|
|
(192
|
)
|
|||||||
Other income (expenses), net
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||
Total other income (expenses), net
|
(30
|
)
|
|
7
|
|
|
1
|
|
|
—
|
|
|
(22
|
)
|
|
(51
|
)
|
|
(73
|
)
|
|||||||
(Loss) income before income tax (benefit) expense
|
$
|
(325
|
)
|
|
$
|
158
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
(156
|
)
|
|
$
|
(83
|
)
|
|
$
|
(239
|
)
|
Depreciation and amortization for property and equipment and intangible assets
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
19
|
|
Total assets
|
$
|
10,142
|
|
|
$
|
9,608
|
|
|
$
|
534
|
|
|
$
|
(5,964
|
)
|
|
$
|
14,320
|
|
|
$
|
3,293
|
|
|
$
|
17,613
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||||
Financial information by segment
|
Servicing
|
|
Originations
|
|
Xome
|
|
Elimination
|
|
Total Operating Segments
|
|
Corporate/Other
|
|
Consolidated
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Service related, net
|
$
|
(27
|
)
|
|
$
|
15
|
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
84
|
|
Net gain on mortgage loans held for sale
|
35
|
|
|
131
|
|
|
—
|
|
|
—
|
|
|
166
|
|
|
—
|
|
|
166
|
|
|||||||
Total revenues
|
8
|
|
|
146
|
|
|
96
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
250
|
|
|||||||
Total expenses
|
195
|
|
|
104
|
|
|
99
|
|
|
—
|
|
|
398
|
|
|
45
|
|
|
443
|
|
|||||||
Other income (expenses), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
115
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
132
|
|
|
2
|
|
|
134
|
|
|||||||
Interest expense
|
(114
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(132
|
)
|
|
(57
|
)
|
|
(189
|
)
|
|||||||
Other income, net
|
—
|
|
|
4
|
|
|
11
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||||
Total other income (expenses), net
|
1
|
|
|
3
|
|
|
11
|
|
|
—
|
|
|
15
|
|
|
(55
|
)
|
|
(40
|
)
|
|||||||
(Loss) income before income tax (benefit) expense
|
$
|
(186
|
)
|
|
$
|
45
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
(133
|
)
|
|
$
|
(100
|
)
|
|
$
|
(233
|
)
|
Depreciation and amortization for property and equipment and intangible assets
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
10
|
|
|
$
|
21
|
|
Total assets
|
$
|
13,642
|
|
|
$
|
4,865
|
|
|
$
|
502
|
|
|
$
|
(4,100
|
)
|
|
$
|
14,909
|
|
|
$
|
2,737
|
|
|
$
|
17,646
|
|
•
|
the severity and duration of the COVID-19 pandemic; the pandemic’s impact on the U.S. and global economies; and federal, state and local governmental responses to the pandemic
|
•
|
our ability to maintain or grow the size of our servicing portfolio;
|
•
|
our ability to maintain or grow our originations volume and profitability;
|
•
|
our ability to recapture voluntary prepayments related to our existing servicing portfolio;
|
•
|
our shift in the mix of our servicing portfolio to subservicing, which is highly concentrated;
|
•
|
delays in our ability to collect or be reimbursed for servicing advances;
|
•
|
our ability to obtain sufficient liquidity and capital to operate our business;
|
•
|
changes in prevailing interest rates;
|
•
|
our ability to finance and recover costs of our reverse servicing operations;
|
•
|
our ability to successfully implement our strategic initiatives;
|
•
|
our ability to realize anticipated benefits of our previous acquisitions;
|
•
|
our ability to use net operating loss carryforwards and other tax attributes;
|
•
|
changes in our business relationships or changes in servicing guidelines with Fannie Mae, Freddie Mac and Ginnie Mae;
|
•
|
Xome’s ability to compete in highly competitive markets;
|
•
|
our ability to pay down debt;
|
•
|
our ability to manage legal and regulatory examinations and enforcement investigations and proceedings, compliance requirements and related costs;
|
•
|
our ability to prevent cyber intrusions and mitigate cyber risks; and
|
•
|
our ability to maintain our licenses and other regulatory approvals.
|
Overview
|
•
|
Strengthen our balance sheet, by reducing leverage, building liquidity, and managing interest rate and credit risk;
|
•
|
Improve efficiency by driving continuous improvement in unit costs for Servicing, Originations, and Xome, as well as by taking corporate actions to eliminate costs throughout the organizations
|
•
|
Grow and strengthen our customer base, in each our segments
|
•
|
Reinvent the customer experience, by acting as the customer’s advocate and by harnessing technology to deliver user-friendly digital solutions
|
•
|
Sustain the talent of our people and the culture of our organization
|
•
|
Maintain strong relationships with agencies, investors, regulators, and other counterparties and a strong reputation for compliance and customer service.
|
Table 1. Consolidated Operations
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Revenues - operational
|
$
|
661
|
|
|
$
|
543
|
|
|
$
|
118
|
|
|
22
|
%
|
Revenues - Mark-to-market
|
(383
|
)
|
|
(293
|
)
|
|
(90
|
)
|
|
31
|
%
|
|||
Total revenues
|
278
|
|
|
250
|
|
|
28
|
|
|
11
|
%
|
|||
Total expenses
|
444
|
|
|
443
|
|
|
1
|
|
|
—
|
%
|
|||
Total other income (expenses), net
|
(73
|
)
|
|
(40
|
)
|
|
(33
|
)
|
|
83
|
%
|
|||
Loss before income tax expense benefit
|
(239
|
)
|
|
(233
|
)
|
|
(6
|
)
|
|
3
|
%
|
|||
Less: Income tax benefit
|
(68
|
)
|
|
(47
|
)
|
|
(21
|
)
|
|
45
|
%
|
|||
Net loss
|
(171
|
)
|
|
(186
|
)
|
|
15
|
|
|
(8
|
)%
|
|||
Less: Net loss attributable to non-controlling interests
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
(100
|
)%
|
|||
Net loss attributable to Mr. Cooper
|
$
|
(168
|
)
|
|
$
|
(186
|
)
|
|
$
|
18
|
|
|
(10
|
)%
|
Table 2. Provision for Income Taxes
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Income tax benefit
|
$
|
(68
|
)
|
|
$
|
(47
|
)
|
|
$
|
(21
|
)
|
|
45
|
%
|
|
|
|
|
|
|
|
|
|||||||
Effective tax rate(1)
|
28.4
|
%
|
|
20.3
|
%
|
|
|
|
|
(1)
|
Effective tax rate is calculated using whole numbers.
|
Segment Results
|
•
|
The Servicing segment performs operational activities on behalf of investors or owners of the underlying mortgages, including collecting and disbursing borrower payments, investor reporting, customer service, modifying loans where appropriate to help borrowers stay current, and when necessary performing collections, foreclosures, and the sale of REO.
|
•
|
The Originations segment originates residential mortgage loans through our direct-to-consumer channel, which provides refinance options for our existing customers, and through our correspondent and wholesale channels which purchase or originate loans from mortgage bankers and brokers.
|
•
|
The Xome segment provides a variety of real estate services to mortgage originators, mortgage and real estate investors, and mortgage servicers, including valuation, title, and field services, and operates an exchange which facilitates the sale of foreclosed properties.
|
•
|
The Corporate/Other segment represents unallocated overhead expenses, including the costs of executive management and other corporate functions that are not directly attributable to our operating segments, our senior unsecured notes, and the results of a legacy mortgage investment portfolio, which consists of non-prime and non-conforming residential mortgage loans that were transferred to a securitization trust (“Trust 2009-A”) in 2009. We collapsed Trust 2009-A and executed the sale of the loans held in the trust in September 2019.
|
Table 3. Segment Results
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||||||||||||
|
Servicing
|
|
Originations
|
|
Xome
|
|
Elimination
|
|
Total Operating Segments
|
|
Corporate/Other
|
|
Consolidated
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Service related, net
|
$
|
(180
|
)
|
|
$
|
20
|
|
|
$
|
106
|
|
|
$
|
(1
|
)
|
|
$
|
(55
|
)
|
|
$
|
2
|
|
|
$
|
(53
|
)
|
Net gain on mortgage loans held for sale
|
34
|
|
|
297
|
|
|
—
|
|
|
—
|
|
|
331
|
|
|
—
|
|
|
331
|
|
|||||||
Total revenues
|
(146
|
)
|
|
317
|
|
|
106
|
|
|
(1
|
)
|
|
276
|
|
|
2
|
|
|
278
|
|
|||||||
Total expenses
|
149
|
|
|
166
|
|
|
96
|
|
|
(1
|
)
|
|
410
|
|
|
34
|
|
|
444
|
|
|||||||
Other income (expenses), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
83
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
117
|
|
|
1
|
|
|
118
|
|
|||||||
Interest expense
|
(113
|
)
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
(52
|
)
|
|
(192
|
)
|
|||||||
Other income (expenses), net
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||
Total other income (expenses), net
|
(30
|
)
|
|
7
|
|
|
1
|
|
|
—
|
|
|
(22
|
)
|
|
(51
|
)
|
|
(73
|
)
|
|||||||
(Loss) income before income tax (benefit) expense
|
$
|
(325
|
)
|
|
$
|
158
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
(156
|
)
|
|
$
|
(83
|
)
|
|
$
|
(239
|
)
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||||||
|
Servicing
|
|
Originations
|
|
Xome
|
|
Elimination
|
|
Total Operating Segments
|
|
Corporate/Other
|
|
Consolidated
|
||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Service related, net
|
$
|
(27
|
)
|
|
$
|
15
|
|
|
$
|
96
|
|
|
$
|
—
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
84
|
|
Net gain on mortgage loans held for sale
|
35
|
|
|
131
|
|
|
—
|
|
|
—
|
|
|
166
|
|
|
—
|
|
|
166
|
|
|||||||
Total revenues
|
8
|
|
|
146
|
|
|
96
|
|
|
—
|
|
|
250
|
|
|
—
|
|
|
250
|
|
|||||||
Total expenses
|
195
|
|
|
104
|
|
|
99
|
|
|
—
|
|
|
398
|
|
|
45
|
|
|
443
|
|
|||||||
Other income (expenses), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
115
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
132
|
|
|
2
|
|
|
134
|
|
|||||||
Interest expense
|
(114
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(132
|
)
|
|
(57
|
)
|
|
(189
|
)
|
|||||||
Other income, net
|
—
|
|
|
4
|
|
|
11
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||||
Total other income (expenses), net
|
1
|
|
|
3
|
|
|
11
|
|
|
—
|
|
|
15
|
|
|
(55
|
)
|
|
(40
|
)
|
|||||||
(Loss) income before income tax (benefit) expense
|
$
|
(186
|
)
|
|
$
|
45
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
(133
|
)
|
|
$
|
(100
|
)
|
|
$
|
(233
|
)
|
Servicing Segment
|
Table 4. Servicer Ratings
|
|
Fitch(1)
|
|
Moody’s(2)
|
|
S&P(3)
|
Rating date
|
January 2020
|
|
May 2019
|
|
May 2019
|
|
|
|
|
|
|
Residential
|
RPS2-
|
|
Not Rated
|
|
Above Average
|
Master Servicer
|
RMS2+
|
|
SQ2
|
|
Above Average
|
Special Servicer
|
RSS2-
|
|
Not Rated
|
|
Above Average
|
Subprime Servicer
|
RPS2-
|
|
Not Rated
|
|
Above Average
|
(1)
|
Fitch Rating Scale of 1 (Highest Performance) to 5 (Low/No Proficiency)
|
(2)
|
Moody’s Rating Scale of SQ1 (Strong Ability/Stability) to SQ5 (Weak Ability/Stability)
|
(3)
|
S&P’s Rating Scale of Strong to Weak
|
•
|
The term “forward” refers to loans we service which are not “reverse mortgages,” as discussed below.
|
•
|
Our subservicing portfolio consists of loans where we perform the servicing responsibilities for a contractual fee, but do not own the servicing rights and therefore do not record an MSR on our balance sheet.
|
•
|
Reverse mortgage loans, most commonly HECMs, provide seniors 62 and older with a loan upon which draws can be made periodically. The draws are secured by the equity in the borrower’s home. We have acquired our reverse mortgages in prior years through several transactions and it is now in run-off mode. For a significant portion of our reverse mortgages, we record MSRs on our balance sheet, similar to the accounting for forward mortgages, except in cases where the costs of servicing are expected to exceed revenues, in which case a Mortgage Servicing Liability (“MSL”) is created. Additionally, due to program requirements, we consolidate certain reverse mortgages on our balance sheet and accrue interest income and expense.
|
Table 5. Servicing Segment Results of Operations
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Revenues
|
|
|
|
|
|
|
|
|||||||
Operational
|
$
|
313
|
|
|
$
|
324
|
|
|
$
|
(11
|
)
|
|
(3
|
)%
|
Amortization, net of accretion
|
(76
|
)
|
|
(23
|
)
|
|
(53
|
)
|
|
230
|
%
|
|||
Mark-to-market
|
(383
|
)
|
|
(293
|
)
|
|
(90
|
)
|
|
31
|
%
|
|||
Total revenues
|
(146
|
)
|
|
8
|
|
|
(154
|
)
|
|
(1,925
|
)%
|
|||
Total expenses
|
149
|
|
|
195
|
|
|
(46
|
)
|
|
(24
|
)%
|
|||
Total other income (expenses), net
|
(30
|
)
|
|
1
|
|
|
(31
|
)
|
|
(3,100
|
)%
|
|||
Loss before income tax benefit
|
$
|
(325
|
)
|
|
$
|
(186
|
)
|
|
$
|
(139
|
)
|
|
75
|
%
|
Table 6. Servicing Portfolio - Unpaid Principal Balances
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Average UPB
|
|
|
|
||||
Forward MSRs
|
$
|
303,578
|
|
|
$
|
308,984
|
|
Subservicing and other(1)
|
310,160
|
|
|
239,468
|
|
||
Reverse loans
|
22,059
|
|
|
27,472
|
|
||
Total average UPB
|
$
|
635,797
|
|
|
$
|
575,924
|
|
|
|
|
|
||||
|
March 31, 2020
|
|
March 31, 2019
|
||||
Ending UPB
|
|
|
|
||||
Forward MSRs
|
|
|
|
||||
Agency
|
$
|
238,956
|
|
|
$
|
238,937
|
|
Non-agency
|
51,678
|
|
|
64,755
|
|
||
Total forward MSRs
|
290,634
|
|
|
303,692
|
|
||
|
|
|
|
||||
Subservicing and other(1)
|
|
|
|
||||
Agency
|
302,060
|
|
|
273,786
|
|
||
Non-agency
|
14,873
|
|
|
27,405
|
|
||
Total subservicing and other
|
316,933
|
|
|
301,191
|
|
||
|
|
|
|
||||
Reverse loans
|
|
|
|
||||
MSR
|
2,332
|
|
|
3,559
|
|
||
MSL
|
13,360
|
|
|
15,928
|
|
||
Securitized loans
|
5,898
|
|
|
7,527
|
|
||
Total reverse portfolio serviced
|
21,590
|
|
|
27,014
|
|
||
Total ending UPB
|
$
|
629,157
|
|
|
$
|
631,897
|
|
(1)
|
Subservicing and other includes (i) loans we service for others, (ii) residential mortgage loans originated but have yet to be sold, and (iii) agency REO balances for which we own the mortgage servicing rights.
|
Table 7. Forward Servicing and Subservicing and Other Portfolio UPB Rollforward
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||
|
Forward MSR
|
|
Subservicing and Other
|
|
Total
|
|
Forward MSR
|
|
Subservicing and Other
|
|
Total
|
||||||||||||
Balance - beginning of period
|
$
|
296,782
|
|
|
$
|
323,983
|
|
|
$
|
620,765
|
|
|
$
|
295,481
|
|
|
$
|
223,886
|
|
|
$
|
519,367
|
|
Additions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Originations
|
11,635
|
|
|
662
|
|
|
12,297
|
|
|
4,891
|
|
|
404
|
|
|
5,295
|
|
||||||
Acquisitions / Increase in subservicing
|
(673
|
)
|
|
23,352
|
|
|
22,679
|
|
|
13,404
|
|
|
84,406
|
|
|
97,810
|
|
||||||
Deductions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dispositions
|
(40
|
)
|
|
(10,359
|
)
|
|
(10,399
|
)
|
|
(133
|
)
|
|
(1,118
|
)
|
|
(1,251
|
)
|
||||||
Principal reductions and other
|
(2,748
|
)
|
|
(2,965
|
)
|
|
(5,713
|
)
|
|
(2,827
|
)
|
|
(2,317
|
)
|
|
(5,144
|
)
|
||||||
Voluntary reductions(1)
|
(13,864
|
)
|
|
(17,672
|
)
|
|
(31,536
|
)
|
|
(6,297
|
)
|
|
(3,975
|
)
|
|
(10,272
|
)
|
||||||
Involuntary reductions(2)
|
(387
|
)
|
|
(68
|
)
|
|
(455
|
)
|
|
(762
|
)
|
|
(95
|
)
|
|
(857
|
)
|
||||||
Net changes in loans serviced by others
|
(71
|
)
|
|
—
|
|
|
(71
|
)
|
|
(65
|
)
|
|
—
|
|
|
(65
|
)
|
||||||
Balance - end of period
|
$
|
290,634
|
|
|
$
|
316,933
|
|
|
$
|
607,567
|
|
|
$
|
303,692
|
|
|
$
|
301,191
|
|
|
$
|
604,883
|
|
(1)
|
Voluntary reductions are related to loan payoffs by customers.
|
(2)
|
Involuntary reductions refer to loan chargeoffs.
|
Table 8. Key Performance Metrics - Forward Servicing and Subservicing Portfolio(1)
|
|
March 31, 2020
|
|
March 31, 2019
|
||||
Loan count
|
3,506,998
|
|
|
3,616,323
|
|
||
Average loan amount(2)
|
$
|
173,231
|
|
|
$
|
167,266
|
|
Average coupon - credit sensitive(3)
|
4.7
|
%
|
|
4.9
|
%
|
||
Average coupon - interest sensitive(3)
|
4.3
|
%
|
|
4.3
|
%
|
||
Average coupon - agency(3)
|
4.4
|
%
|
|
4.4
|
%
|
||
Average coupon - non-agency(3)
|
4.7
|
%
|
|
4.8
|
%
|
||
60+ delinquent (% of loans)(4)
|
1.9
|
%
|
|
2.4
|
%
|
||
90+ delinquent (% of loans)(4)
|
1.6
|
%
|
|
2.1
|
%
|
||
120+ delinquent (% of loans)(4)
|
1.4
|
%
|
|
1.9
|
%
|
||
Total prepayment speed (12-month constant prepayment rate)
|
19.2
|
%
|
|
8.2
|
%
|
(1)
|
Characteristics and key performance metrics of our servicing portfolio exclude UPB and loan counts acquired but not yet boarded and currently serviced by others.
|
(2)
|
Average loan amount is presented in whole dollar amounts.
|
(3)
|
The weighted average coupon amounts presented in the table above are only reflective of our owned forward MSR portfolio that is reported at fair value.
|
(4)
|
Loan delinquency is based on the current contractual due date of the loan. In the case of a completed loan modification, delinquency is based on the modified due date of the loan.
|
Table 9. Forward Loan Modifications and Workout Units
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
Amount Change
|
|
% Change
|
||||
Modifications
|
4,715
|
|
|
5,189
|
|
|
(474
|
)
|
|
(9
|
)%
|
Workouts
|
3,994
|
|
|
4,401
|
|
|
(407
|
)
|
|
(9
|
)%
|
Total modifications and workout units
|
8,709
|
|
|
9,590
|
|
|
(881
|
)
|
|
(9
|
)%
|
Table 10. Servicing - Revenues
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
Amt
|
|
bps(1)
|
|
Amt
|
|
bps(1)
|
|
Amt
|
|
bps(1)
|
|
Amt
|
|
bps(1)
|
||||||||
Forward MSR Operational Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Base servicing fees
|
$
|
250
|
|
|
16
|
|
$
|
240
|
|
|
17
|
|
$
|
10
|
|
|
(1)
|
|
4
|
%
|
|
(6
|
)%
|
Modification fees(2)
|
3
|
|
|
—
|
|
3
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
%
|
|
—
|
%
|
|||
Incentive fees(2)
|
4
|
|
|
—
|
|
1
|
|
|
—
|
|
3
|
|
|
—
|
|
300
|
%
|
|
—
|
%
|
|||
Late payment fees(2)
|
23
|
|
|
2
|
|
19
|
|
|
2
|
|
4
|
|
|
—
|
|
21
|
%
|
|
—
|
%
|
|||
Other ancillary revenues(2)
|
38
|
|
|
2
|
|
48
|
|
|
3
|
|
(10
|
)
|
|
(1)
|
|
(21
|
)%
|
|
(33
|
)%
|
|||
Total forward MSR operational revenue
|
318
|
|
|
20
|
|
311
|
|
|
22
|
|
7
|
|
|
(2)
|
|
2
|
%
|
|
(9
|
)%
|
|||
Base subservicing fees and other subservicing revenue(3)
|
65
|
|
|
4
|
|
52
|
|
|
4
|
|
13
|
|
|
—
|
|
25
|
%
|
|
—
|
%
|
|||
Reverse servicing fees
|
6
|
|
|
—
|
|
9
|
|
|
—
|
|
(3
|
)
|
|
—
|
|
(33
|
)%
|
|
—
|
%
|
|||
Total servicing fee revenue
|
389
|
|
|
24
|
|
372
|
|
|
26
|
|
17
|
|
|
(2)
|
|
5
|
%
|
|
(8
|
)%
|
|||
MSR financing liability costs
|
(8
|
)
|
|
—
|
|
(12
|
)
|
|
(1)
|
|
4
|
|
|
1
|
|
(33
|
)%
|
|
100
|
%
|
|||
Excess spread costs - principal
|
(68
|
)
|
|
(4)
|
|
(36
|
)
|
|
(2)
|
|
(32
|
)
|
|
(2)
|
|
89
|
%
|
|
100
|
%
|
|||
Total operational revenue
|
313
|
|
|
20
|
|
324
|
|
|
23
|
|
(11
|
)
|
|
(3)
|
|
(3
|
)%
|
|
(13
|
)%
|
|||
Amortization, net of accretion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Forward MSR amortization
|
(152
|
)
|
|
(10)
|
|
(79
|
)
|
|
(6)
|
|
(73
|
)
|
|
(4)
|
|
92
|
%
|
|
67
|
%
|
|||
Excess spread accretion
|
68
|
|
|
4
|
|
36
|
|
|
3
|
|
32
|
|
|
1
|
|
89
|
%
|
|
33
|
%
|
|||
Reverse MSL accretion
|
8
|
|
|
1
|
|
18
|
|
|
1
|
|
(10
|
)
|
|
—
|
|
(56
|
)%
|
|
—
|
%
|
|||
Reverse MSR amortization
|
—
|
|
|
—
|
|
2
|
|
|
—
|
|
(2
|
)
|
|
—
|
|
(100
|
)%
|
|
—
|
%
|
|||
Total amortization, net of accretion
|
(76
|
)
|
|
(5)
|
|
(23
|
)
|
|
(2)
|
|
(53
|
)
|
|
(3)
|
|
230
|
%
|
|
150
|
%
|
|||
Mark-to-Market Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
MSR MTM(3)
|
(412
|
)
|
|
(26)
|
|
(360
|
)
|
|
(25)
|
|
(52
|
)
|
|
(1)
|
|
14
|
%
|
|
4
|
%
|
|||
Excess spread / financing MTM
|
29
|
|
|
2
|
|
67
|
|
|
5
|
|
(38
|
)
|
|
(3)
|
|
(57
|
)%
|
|
(60
|
)%
|
|||
Total MTM adjustments
|
(383
|
)
|
|
(24)
|
|
(293
|
)
|
|
(20)
|
|
(90
|
)
|
|
(4)
|
|
31
|
%
|
|
20
|
%
|
|||
Total revenues - Servicing
|
$
|
(146
|
)
|
|
(9)
|
|
$
|
8
|
|
|
1
|
|
$
|
(154
|
)
|
|
(10)
|
|
(1,925
|
)%
|
|
(1,000
|
)%
|
(1)
|
Calculated basis points (“bps”) are as follows: Annualized dollar amount/Total average UPB X 10000.
|
(2)
|
Certain ancillary and other non-base fees related to subservicing operations are separately presented as other subservicing revenues.
|
(3)
|
The amount of MSR MTM includes 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. The impact of negative modeled cash flows was $10 and $11 for the three months ended March 31, 2020 and 2019, respectively.
|
Table 11. Servicing - Expenses
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
Change
|
|
% Change
|
||||||||||||||||
|
Amt
|
|
bps(1)
|
|
Amt
|
|
bps(1)
|
|
Amt
|
|
bps(1)
|
|
Amt
|
|
bps(1)
|
||||||||
Salaries, wages and benefits
|
$
|
86
|
|
|
5
|
|
$
|
86
|
|
|
6
|
|
$
|
—
|
|
|
(1)
|
|
—
|
%
|
|
(17
|
)%
|
General and administrative
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Servicing support fees
|
25
|
|
|
2
|
|
39
|
|
|
3
|
|
(14
|
)
|
|
(1)
|
|
(36
|
)%
|
|
(33
|
)%
|
|||
Corporate and other general and administrative expenses
|
35
|
|
|
2
|
|
39
|
|
|
3
|
|
(4
|
)
|
|
(1)
|
|
(10
|
)%
|
|
(33
|
)%
|
|||
Foreclosure and other liquidation related expenses
|
—
|
|
|
—
|
|
27
|
|
|
2
|
|
(27
|
)
|
|
(2)
|
|
(100
|
)%
|
|
(100
|
)%
|
|||
Depreciation and amortization
|
3
|
|
|
—
|
|
4
|
|
|
—
|
|
(1
|
)
|
|
—
|
|
(25
|
)%
|
|
—
|
%
|
|||
Total general and administrative expenses
|
63
|
|
|
4
|
|
109
|
|
|
8
|
|
(46
|
)
|
|
(4)
|
|
(42
|
)%
|
|
(50
|
)%
|
|||
Total expenses - Servicing
|
$
|
149
|
|
|
9
|
|
$
|
195
|
|
|
14
|
|
$
|
(46
|
)
|
|
(5)
|
|
(24
|
)%
|
|
(36
|
)%
|
(1)
|
Calculated basis points (“bps”) are as follows: Annualized dollar amount/Total average UPB X 10000.
|
Table 12. Servicing - Other Income (Expenses), Net
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
Change
|
|
% Change
|
||||||||||||||||
|
Amt
|
|
bps(1)
|
|
Amt
|
|
bps(1)
|
|
Amt
|
|
bps(1)
|
|
Amt
|
|
bps(1)
|
||||||||
Income earned on Reverse mortgage interest
|
$
|
43
|
|
|
3
|
|
$
|
82
|
|
|
6
|
|
$
|
(39
|
)
|
|
(3)
|
|
(48
|
)%
|
|
(50
|
)%
|
Other interest income
|
40
|
|
|
2
|
|
33
|
|
|
2
|
|
7
|
|
|
—
|
|
21
|
%
|
|
—
|
%
|
|||
Interest income
|
83
|
|
|
5
|
|
115
|
|
|
8
|
|
(32
|
)
|
|
(3)
|
|
(28
|
)%
|
|
(38
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reverse mortgage interest expense
|
(52
|
)
|
|
(3)
|
|
(71
|
)
|
|
(5)
|
|
19
|
|
|
2
|
|
(27
|
)%
|
|
(40
|
)%
|
|||
Advance interest expense
|
(5
|
)
|
|
—
|
|
(9
|
)
|
|
(1)
|
|
4
|
|
|
1
|
|
(44
|
)%
|
|
100
|
%
|
|||
Other interest expense
|
(56
|
)
|
|
(4)
|
|
(34
|
)
|
|
(2)
|
|
(22
|
)
|
|
(2)
|
|
65
|
%
|
|
100
|
%
|
|||
Interest expense
|
(113
|
)
|
|
(7)
|
|
(114
|
)
|
|
(8)
|
|
1
|
|
|
1
|
|
(1
|
)%
|
|
(13
|
)%
|
|||
Total other income (expenses), net - Servicing
|
$
|
(30
|
)
|
|
(2)
|
|
$
|
1
|
|
|
—
|
|
$
|
(31
|
)
|
|
(2)
|
|
(3,100
|
)%
|
|
(100
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average cost - advance facilities
|
3.0
|
%
|
|
|
|
4.7
|
%
|
|
|
|
(1.7
|
)%
|
|
|
|
(36
|
)%
|
|
|
|
|||
Weighted average cost - excess spread financing
|
9.0
|
%
|
|
|
|
9.0
|
%
|
|
|
|
—
|
%
|
|
|
|
—
|
%
|
|
|
|
(1)
|
Calculated basis points (“bps”) are as follows: Annualized dollar amount/Total average UPB X 10000.
|
Table 13. Servicing Portfolios and Related Liabilities
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||
UPB
|
|
Carrying Amount
|
|
bps
|
|
UPB
|
|
Carrying Amount
|
|
bps
|
|||||||||
Forward MSRs - acquisition pool:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Credit sensitive
|
$
|
138,726
|
|
|
$
|
1,386
|
|
|
100
|
|
$
|
147,895
|
|
|
$
|
1,613
|
|
|
109
|
Interest sensitive
|
151,908
|
|
|
1,723
|
|
|
113
|
|
148,887
|
|
|
1,883
|
|
|
126
|
||||
Total forward MSRs - fair value
|
$
|
290,634
|
|
|
$
|
3,109
|
|
|
107
|
|
$
|
296,782
|
|
|
$
|
3,496
|
|
|
118
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Forward MSRs - investor pool:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency
|
$
|
238,956
|
|
|
$
|
2,618
|
|
|
110
|
|
$
|
240,688
|
|
|
$
|
2,944
|
|
|
122
|
Non-agency
|
51,678
|
|
|
491
|
|
|
95
|
|
56,094
|
|
|
552
|
|
|
98
|
||||
Total forward MSRs - fair value
|
$
|
290,634
|
|
|
$
|
3,109
|
|
|
107
|
|
$
|
296,782
|
|
|
$
|
3,496
|
|
|
118
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total forward MSRs
|
$
|
290,634
|
|
|
$
|
3,109
|
|
|
|
|
$
|
296,782
|
|
|
$
|
3,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Subservicing and other(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency
|
302,060
|
|
|
N/A
|
|
|
|
|
308,532
|
|
|
N/A
|
|
|
|
||||
Non-agency
|
14,873
|
|
|
N/A
|
|
|
|
|
15,451
|
|
|
N/A
|
|
|
|
||||
Total subservicing and other
|
316,933
|
|
|
N/A
|
|
|
|
|
323,983
|
|
|
N/A
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reverse portfolio - amortized cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
MSR
|
2,332
|
|
|
6
|
|
|
|
|
2,508
|
|
|
6
|
|
|
|
||||
MSL
|
13,360
|
|
|
(53
|
)
|
|
|
|
13,994
|
|
|
(61
|
)
|
|
|
||||
Securitized loans
|
5,898
|
|
|
5,955
|
|
|
|
|
6,223
|
|
|
6,279
|
|
|
|
||||
Total reverse portfolio serviced
|
21,590
|
|
|
5,908
|
|
|
|
|
22,725
|
|
|
6,224
|
|
|
|
||||
Total servicing portfolio unpaid principal balance
|
$
|
629,157
|
|
|
$
|
9,017
|
|
|
|
|
$
|
643,490
|
|
|
$
|
9,720
|
|
|
|
(1)
|
Subservicing and other amounts include loans we service for others, residential mortgage loans originated but have yet to be sold and agency REO balances for which we own the mortgage servicing rights.
|
Table 14. MSRs - Fair Value, Rollforward
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Fair value - beginning of period
|
$
|
3,496
|
|
|
$
|
3,665
|
|
Additions:
|
|
|
|
||||
Servicing retained from mortgage loans sold
|
123
|
|
|
66
|
|
||
Purchases of servicing rights
|
24
|
|
|
409
|
|
||
Dispositions:
|
|
|
|
||||
Sales and cancellation of servicing assets
|
—
|
|
|
(260
|
)
|
||
Changes in fair value:
|
|
|
|
||||
Due to changes in valuation inputs or assumptions used in the valuation model:
|
|
|
|
||||
Credit sensitive
|
(181
|
)
|
|
(121
|
)
|
||
Interest sensitive
|
(220
|
)
|
|
(211
|
)
|
||
Other changes in fair value:
|
|
|
|
||||
Scheduled principal payments
|
(23
|
)
|
|
(22
|
)
|
||
Disposition of negative MSRs and other(1)
|
20
|
|
|
12
|
|
||
Prepayments
|
|
|
|
||||
Voluntary prepayments
|
|
|
|
||||
Credit sensitive
|
(24
|
)
|
|
(19
|
)
|
||
Interest sensitive
|
(102
|
)
|
|
(32
|
)
|
||
Involuntary prepayments
|
|
|
|
||||
Credit sensitive
|
(1
|
)
|
|
(2
|
)
|
||
Interest sensitive
|
(3
|
)
|
|
(4
|
)
|
||
Fair value - end of period
|
$
|
3,109
|
|
|
$
|
3,481
|
|
(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.
|
Table 15. MSRs - Fair Value
|
|
March 31, 2020
|
|
March 31, 2019
|
||
Total MSRs Portfolio
|
|
|
|
||
Discount rate
|
9.7
|
%
|
|
10.3
|
%
|
Prepayment speeds
|
13.4
|
%
|
|
13.0
|
%
|
Average life
|
5.7 years
|
|
|
6.0 years
|
|
|
|
|
|
||
Acquisition Pools:
|
|
|
|
||
Credit Sensitive
|
|
|
|
||
Discount rate
|
10.2
|
%
|
|
11.3
|
%
|
Prepayment speeds
|
13.0
|
%
|
|
13.5
|
%
|
Average life
|
5.9 years
|
|
|
6.0 years
|
|
|
|
|
|
||
Interest Sensitive
|
|
|
|
||
Discount rate
|
9.1
|
%
|
|
9.4
|
%
|
Prepayment speeds
|
13.8
|
%
|
|
12.5
|
%
|
Average life
|
5.5 years
|
|
|
6.1 years
|
|
|
|
|
|
||
Investor Pools:
|
|
|
|
||
Agency
|
|
|
|
||
Discount rate
|
9.0
|
%
|
|
9.4
|
%
|
Prepayment speeds
|
13.2
|
%
|
|
12.4
|
%
|
Average life
|
5.6 years
|
|
|
6.1 years
|
|
|
|
|
|
||
Non-Agency
|
|
|
|
||
Discount rate
|
12.6
|
%
|
|
13.6
|
%
|
Prepayment speeds
|
14.3
|
%
|
|
15.4
|
%
|
Average life
|
6.1 years
|
|
|
5.9 years
|
|
Table 16. Excess Spread Financing
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Fair value - beginning of period
|
$
|
1,311
|
|
|
$
|
1,184
|
|
Additions:
|
|
|
|
||||
New financings
|
24
|
|
|
245
|
|
||
Deductions:
|
|
|
|
||||
Settlements and repayments
|
(58
|
)
|
|
(51
|
)
|
||
Changes in fair value:
|
|
|
|
||||
Credit Sensitive
|
(2
|
)
|
|
(32
|
)
|
||
Interest Sensitive
|
(33
|
)
|
|
(37
|
)
|
||
Fair value - end of period
|
$
|
1,242
|
|
|
$
|
1,309
|
|
|
|
|
|
||||
Key Weighted-Average Assumptions:
|
March 31, 2020
|
|
March 31, 2019
|
||||
Total Excess Spread Portfolio
|
|
|
|
||||
Discount rate
|
11.6
|
%
|
|
10.4
|
%
|
||
Prepayment speeds
|
12.8
|
%
|
|
12.9
|
%
|
||
Recapture rate
|
18.6
|
%
|
|
20.4
|
%
|
||
Average life
|
5.7 years
|
|
|
5.9 years
|
|
||
|
|
|
|
||||
Credit Sensitive
|
|
|
|
||||
Discount rate
|
12.3
|
%
|
|
10.9
|
%
|
||
Prepayment speeds
|
12.3
|
%
|
|
13.2
|
%
|
||
Recapture rate
|
18.4
|
%
|
|
21.7
|
%
|
||
Average life
|
5.9 years
|
|
|
5.9 years
|
|
||
|
|
|
|
||||
Interest Sensitive
|
|
|
|
||||
Discount rate
|
10.3
|
%
|
|
9.1
|
%
|
||
Prepayment speeds
|
13.5
|
%
|
|
12.4
|
%
|
||
Recapture rate
|
19.8
|
%
|
|
17.3
|
%
|
||
Average life
|
5.5 years
|
|
|
6.1 years
|
|
Table 17. MSRs Financing Liability - Rollforward
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
||||
Fair value - beginning of period
|
$
|
37
|
|
|
$
|
32
|
|
Changes in fair value:
|
|
|
|
||||
Changes in valuation inputs or assumptions used in the valuation model
|
9
|
|
|
6
|
|
||
Other changes in fair value
|
(3
|
)
|
|
(4
|
)
|
||
Fair value - end of period
|
$
|
43
|
|
|
$
|
34
|
|
|
|
|
|
||||
|
March 31, 2020
|
|
March 31, 2019
|
||||
Weighted-Average Assumptions
|
|
|
|
||||
Advance financing rates
|
1.7
|
%
|
|
3.9
|
%
|
||
Annual advance recovery rates
|
18.4
|
%
|
|
19.3
|
%
|
Table 18. Leveraged Portfolio Characteristics
|
|
March 31, 2020
|
|
March 31, 2019
|
||||
Owned forward servicing portfolio - unencumbered
|
$
|
85,124
|
|
|
$
|
88,995
|
|
Owned forward servicing portfolio - encumbered
|
205,510
|
|
|
214,697
|
|
||
Subserviced forward servicing portfolio and other
|
316,933
|
|
|
301,191
|
|
||
Total unpaid principal balance
|
$
|
607,567
|
|
|
$
|
604,883
|
|
Table 19. Reverse - Mortgage Portfolio Characteristics
|
|
March 31, 2020
|
|
March 31, 2019
|
||||
Loan count
|
158,838
|
|
|
184,807
|
|
||
Ending unpaid principal balance
|
$
|
21,590
|
|
|
$
|
27,014
|
|
Average loan amount(1)
|
$
|
135,924
|
|
|
$
|
146,173
|
|
Average coupon
|
3.3
|
%
|
|
4.4
|
%
|
||
Average borrower age
|
81
|
|
|
80
|
|
(1)
|
Average loan amount is presented in whole dollar amounts.
|
Originations Segment
|
•
|
Our direct-to-consumer lending channel relies on our call centers, our website and mobile apps to interact with customers. Our primary focus is to assist our customers with a refinance or home purchase by providing them with a needs-based approach to understanding their current mortgage options.
|
•
|
Our correspondent lending channel acquires newly originated residential mortgage loans that have been underwritten to investor guidelines. This includes both conventional and government-insured loans that qualify for inclusion in securitizations that are guaranteed by the GSEs. Our correspondent lending channel enables us to replenish servicing portfolio run-off typically at better rate of return than traditional bulk or flow acquisitions.
|
•
|
Our wholesale lending channel works with mortgage brokers to source loans which are underwritten and funded by us in our name. Counterparty risk is mitigated through quality and compliance monitoring and all brokers are subject to our eligibility requirements coupled with an annual recertification process. Subsequent to March 31, 2020, we closed our wholesale lending channel.
|
Table 20. Originations Segment Results of Operations
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Total revenues
|
$
|
317
|
|
|
$
|
146
|
|
|
$
|
171
|
|
|
117
|
%
|
Total expenses
|
166
|
|
|
104
|
|
|
62
|
|
|
60
|
%
|
|||
Total other income (expenses), net
|
7
|
|
|
3
|
|
|
4
|
|
|
133
|
%
|
|||
Income before income tax expense
|
$
|
158
|
|
|
$
|
45
|
|
|
$
|
113
|
|
|
251
|
%
|
|
|
|
|
|
|
|
|
|||||||
Originations Margin
|
|
|
|
|
|
|
|
|||||||
Revenue
|
$
|
317
|
|
|
$
|
146
|
|
|
$
|
171
|
|
|
117
|
%
|
Pull through adjusted lock volume
|
$
|
12,677
|
|
|
$
|
5,960
|
|
|
$
|
6,717
|
|
|
113
|
%
|
Revenue as a percentage of pull through adjusted lock volume(1)
|
2.50
|
%
|
|
2.45
|
%
|
|
0.05
|
%
|
|
2
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Expenses
|
$
|
166
|
|
|
$
|
104
|
|
|
$
|
62
|
|
|
60
|
%
|
Funded volume
|
$
|
12,359
|
|
|
$
|
5,716
|
|
|
$
|
6,643
|
|
|
116
|
%
|
Expenses as a percentage of funded volume(2)
|
1.34
|
%
|
|
1.82
|
%
|
|
(0.48
|
)%
|
|
(26
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Originations Margin
|
1.16
|
%
|
|
0.63
|
%
|
|
0.53
|
%
|
|
84
|
%
|
(1)
|
Calculated on pull-through adjusted lock volume as revenue is recognized at the time of loan lock.
|
(2)
|
Calculated on funded volume as expenses are incurred based on closing of the loan.
|
Table 21. Originations - Revenues
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Service related, net - Originations
|
$
|
20
|
|
|
$
|
15
|
|
|
$
|
5
|
|
|
33
|
%
|
Net gain on mortgage loans held for sale
|
|
|
|
|
|
|
|
|||||||
Net gain on loans originated and sold
|
183
|
|
|
72
|
|
|
111
|
|
|
154
|
%
|
|||
Capitalized servicing rights
|
119
|
|
|
61
|
|
|
58
|
|
|
95
|
%
|
|||
Provision for repurchase reserves, net of release
|
(5
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
150
|
%
|
|||
Total net gain on mortgage loans held for sale
|
297
|
|
|
131
|
|
|
166
|
|
|
127
|
%
|
|||
Total revenues - Originations
|
$
|
317
|
|
|
$
|
146
|
|
|
$
|
171
|
|
|
117
|
%
|
|
|
|
|
|
|
|
|
|||||||
Key Metrics
|
|
|
|
|
|
|
|
|||||||
Consumer direct lock pull through adjusted volume(1)
|
$
|
7,423
|
|
|
$
|
2,333
|
|
|
$
|
5,090
|
|
|
218
|
%
|
Other locked pull through adjusted volume(1)
|
5,254
|
|
|
3,627
|
|
|
1,627
|
|
|
45
|
%
|
|||
Total pull through adjusted volume
|
$
|
12,677
|
|
|
$
|
5,960
|
|
|
$
|
6,717
|
|
|
113
|
%
|
Funded volume
|
$
|
12,359
|
|
|
$
|
5,716
|
|
|
$
|
6,643
|
|
|
116
|
%
|
Volume of loans sold
|
$
|
13,255
|
|
|
$
|
6,235
|
|
|
$
|
7,020
|
|
|
113
|
%
|
Recapture percentage
|
29.8
|
%
|
|
27.5
|
%
|
|
2.3
|
%
|
|
7
|
%
|
|||
Purchase as a percentage of funded volume
|
26.0
|
%
|
|
51.7
|
%
|
|
(25.7
|
)%
|
|
(50
|
)%
|
|||
Value of capitalized servicing on retained settlements
|
137
|
bps
|
|
141
|
bps
|
|
(4) bps
|
|
|
(3
|
)%
|
(1)
|
Pull through adjusted volume represents the expected funding from locks taken during the period.
|
Table 22. Originations - Expenses
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Salaries, wages and benefits
|
$
|
117
|
|
|
$
|
69
|
|
|
$
|
48
|
|
|
70
|
%
|
General and administrative
|
|
|
|
|
|
|
|
|||||||
Loan origination expenses
|
16
|
|
|
10
|
|
|
6
|
|
|
60
|
%
|
|||
Corporate and other general and administrative expenses
|
18
|
|
|
14
|
|
|
4
|
|
|
29
|
%
|
|||
Marketing and professional service fees
|
12
|
|
|
8
|
|
|
4
|
|
|
50
|
%
|
|||
Depreciation and amortization
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
%
|
|||
Total general and administrative
|
49
|
|
|
35
|
|
|
14
|
|
|
40
|
%
|
|||
Total expenses - Originations
|
$
|
166
|
|
|
$
|
104
|
|
|
$
|
62
|
|
|
60
|
%
|
Table 23. Originations - Other Income (Expenses), Net
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Interest income
|
$
|
34
|
|
|
$
|
17
|
|
|
$
|
17
|
|
|
100
|
%
|
Interest expense
|
(27
|
)
|
|
(18
|
)
|
|
(9
|
)
|
|
50
|
%
|
|||
Other income, net
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
(100
|
)%
|
|||
Total other income (expenses), net - Originations
|
$
|
7
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
133
|
%
|
|
|
|
|
|
|
|
|
|||||||
Weighted average note rate - mortgage loans held for sale
|
3.8
|
%
|
|
4.9
|
%
|
|
(1.1
|
)%
|
|
(22
|
)%
|
|||
Weighted average cost of funds (excluding facility fees)
|
3.2
|
%
|
|
4.7
|
%
|
|
(1.5
|
)%
|
|
(32
|
)%
|
Xome Segment
|
•
|
The Exchange division consists of the Xome.com auction platform which utilizes proprietary technology designed to provide efficient execution for sales of foreclosed properties.
|
•
|
The Services division includes title, escrow, collateral valuation and field services related to real estate investments or transactions including purchases, sales, refinances and defaults.
|
•
|
The Data/Technology division contains a diversified set of businesses that provide technology solutions to real estate service providers, aggregators, and a variety of investors. This includes providing aggregation, standardization and licensing for one of the nation’s largest set of MLS, public records and neighborhood demographic data.
|
Table 24. Xome Segment Results of Operations
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Xome - Operations
|
|
|
|
|
|
|
|
|||||||
Total revenues
|
$
|
106
|
|
|
$
|
96
|
|
|
$
|
10
|
|
|
10
|
%
|
Total expenses
|
96
|
|
|
99
|
|
|
(3
|
)
|
|
(3
|
)%
|
|||
Total other income (expenses), net
|
1
|
|
|
11
|
|
|
(10
|
)
|
|
(91
|
)%
|
|||
Income before income tax expense
|
$
|
11
|
|
|
$
|
8
|
|
|
$
|
3
|
|
|
38
|
%
|
Income before taxes margin - Xome
|
10.4
|
%
|
|
8.3
|
%
|
|
2.1
|
%
|
|
25
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Xome - Revenues
|
|
|
|
|
|
|
|
|||||||
Exchange
|
$
|
16
|
|
|
$
|
20
|
|
|
$
|
(4
|
)
|
|
(20
|
)%
|
Services
|
85
|
|
|
71
|
|
|
14
|
|
|
20
|
%
|
|||
Data/Technology
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
%
|
|||
Total revenues - Xome
|
$
|
106
|
|
|
$
|
96
|
|
|
$
|
10
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|||||||
Key Metrics
|
|
|
|
|
|
|
|
|||||||
Exchange properties sold
|
2,114
|
|
|
2,421
|
|
|
(307
|
)
|
|
(13
|
)%
|
|||
Average Exchange properties under management
|
17,777
|
|
|
6,634
|
|
|
11,143
|
|
|
168
|
%
|
|||
Services completed orders
|
408,734
|
|
|
379,585
|
|
|
29,149
|
|
|
8
|
%
|
|||
Percentage of revenue earned from third-party customers
|
54.6
|
%
|
|
53.0
|
%
|
|
1.6
|
%
|
|
3
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Xome - Expenses
|
|
|
|
|
|
|
|
|||||||
Salaries, wages and benefits
|
$
|
35
|
|
|
$
|
38
|
|
|
$
|
(3
|
)
|
|
(8
|
)%
|
General and administrative
|
|
|
|
|
|
|
|
|||||||
Operational expenses
|
58
|
|
|
57
|
|
|
1
|
|
|
2
|
%
|
|||
Depreciation and amortization
|
3
|
|
|
4
|
|
|
(1
|
)
|
|
(25
|
)%
|
|||
Total general and administrative
|
61
|
|
|
61
|
|
|
—
|
|
|
—
|
%
|
|||
Total expenses - Xome
|
$
|
96
|
|
|
$
|
99
|
|
|
$
|
(3
|
)
|
|
(3
|
)%
|
Corporate/Other Segment
|
Table 25. Corporate/Other Segment Results of Operations
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Corporate/Other - Operations
|
|
|
|
|
|
|
|
|||||||
Total revenues
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
100
|
%
|
Total expenses
|
34
|
|
|
45
|
|
|
(11
|
)
|
|
(24
|
)%
|
|||
Total other income (expenses), net
|
(51
|
)
|
|
(55
|
)
|
|
4
|
|
|
(7
|
)%
|
|||
Loss before income tax benefit - Corporate/Other
|
$
|
(83
|
)
|
|
$
|
(100
|
)
|
|
$
|
17
|
|
|
(17
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Corporate/Other - Expenses
|
|
|
|
|
|
|
|
|||||||
Salaries, wages and benefits
|
$
|
8
|
|
|
$
|
22
|
|
|
$
|
(14
|
)
|
|
(64
|
)%
|
General and administrative
|
|
|
|
|
|
|
|
|||||||
Operational expenses
|
8
|
|
|
13
|
|
|
(5
|
)
|
|
(38
|
)%
|
|||
Depreciation and amortization
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
%
|
|||
Loss on impairment of assets
|
8
|
|
|
—
|
|
|
8
|
|
|
100
|
%
|
|||
Total general and administrative
|
26
|
|
|
23
|
|
|
3
|
|
|
13
|
%
|
|||
Total expenses - Corporate/Other
|
$
|
34
|
|
|
$
|
45
|
|
|
$
|
(11
|
)
|
|
(24
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Corporate/Other - Other Income (Expenses), Net
|
|
|
|
|
|
|
|
|||||||
Total interest income
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
(1
|
)
|
|
(50
|
)%
|
Interest expense on unsecured senior notes
|
(51
|
)
|
|
(51
|
)
|
|
—
|
|
|
—
|
%
|
|||
Other interest expense
|
(1
|
)
|
|
(6
|
)
|
|
5
|
|
|
(83
|
)%
|
|||
Total interest expense
|
(52
|
)
|
|
(57
|
)
|
|
5
|
|
|
(9
|
)%
|
|||
Total other income (expenses), net - Corporate/Other
|
$
|
(51
|
)
|
|
$
|
(55
|
)
|
|
$
|
4
|
|
|
(7
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Weighted average cost - unsecured senior notes
|
7.8
|
%
|
|
7.9
|
%
|
|
(0.1
|
)%
|
|
(1
|
)%
|
Changes in Financial Position
|
Table 26. Changes in Assets
|
|
March 31, 2020
|
|
December 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Cash and cash equivalents
|
$
|
579
|
|
|
$
|
329
|
|
|
$
|
250
|
|
|
76
|
%
|
Mortgage servicing rights
|
3,115
|
|
|
3,502
|
|
|
(387
|
)
|
|
(11
|
)%
|
|||
Advances and other receivables, net
|
685
|
|
|
988
|
|
|
(303
|
)
|
|
(31
|
)%
|
|||
Reverse mortgage interests, net
|
5,955
|
|
|
6,279
|
|
|
(324
|
)
|
|
(5
|
)%
|
|||
Mortgage loans held for sale at fair value
|
3,922
|
|
|
4,077
|
|
|
(155
|
)
|
|
(4
|
)%
|
|||
Deferred tax assets, net
|
1,411
|
|
|
1,345
|
|
|
66
|
|
|
5
|
%
|
|||
Other
|
1,946
|
|
|
1,785
|
|
|
161
|
|
|
9
|
%
|
|||
Total assets
|
$
|
17,613
|
|
|
$
|
18,305
|
|
|
$
|
(692
|
)
|
|
(4
|
)%
|
Table 27. Changes in Liabilities and Stockholders’ Equity
|
|
March 31, 2020
|
|
December 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Unsecured senior notes, net
|
$
|
2,259
|
|
|
$
|
2,366
|
|
|
$
|
(107
|
)
|
|
(5
|
)%
|
Advance facilities, net
|
489
|
|
|
422
|
|
|
67
|
|
|
16
|
%
|
|||
Warehouse facilities, net
|
4,551
|
|
|
4,575
|
|
|
(24
|
)
|
|
(1
|
)%
|
|||
MSR related liabilities - nonrecourse at fair value
|
1,285
|
|
|
1,348
|
|
|
(63
|
)
|
|
(5
|
)%
|
|||
Other nonrecourse debt, net
|
4,945
|
|
|
5,286
|
|
|
(341
|
)
|
|
(6
|
)%
|
|||
Other liabilities
|
2,018
|
|
|
2,077
|
|
|
(59
|
)
|
|
(3
|
)%
|
|||
Total liabilities
|
15,547
|
|
|
16,074
|
|
|
(527
|
)
|
|
(3
|
)%
|
|||
Total stockholders’ equity
|
2,066
|
|
|
2,231
|
|
|
(165
|
)
|
|
(7
|
)%
|
|||
Total liabilities and stockholders’ equity
|
$
|
17,613
|
|
|
$
|
18,305
|
|
|
$
|
(692
|
)
|
|
(4
|
)%
|
Liquidity and Capital Resources
|
Table 28. Operating Cash Flow
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Net loss
|
$
|
(171
|
)
|
|
$
|
(186
|
)
|
|
$
|
15
|
|
|
(8
|
)%
|
Fair value changes in MSRs, MSR related liabilities and mortgage loans held for investment
|
497
|
|
|
311
|
|
|
186
|
|
|
60
|
%
|
|||
Deferred tax benefit
|
(68
|
)
|
|
(47
|
)
|
|
(21
|
)
|
|
45
|
%
|
|||
Other non-cash adjustments to net loss
|
(332
|
)
|
|
(210
|
)
|
|
(122
|
)
|
|
58
|
%
|
|||
Originations net sales activities
|
430
|
|
|
116
|
|
|
314
|
|
|
271
|
%
|
|||
Changes in working capital
|
354
|
|
|
301
|
|
|
53
|
|
|
18
|
%
|
|||
Net cash attributable to operating activities
|
$
|
710
|
|
|
$
|
285
|
|
|
$
|
425
|
|
|
149
|
%
|
Table 29. Investing Cash Flows
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
Acquisitions, net
|
$
|
—
|
|
|
$
|
(85
|
)
|
|
$
|
85
|
|
|
(100
|
)%
|
Purchase of forward mortgage servicing rights, net of liabilities incurred
|
(27
|
)
|
|
(130
|
)
|
|
103
|
|
|
(79
|
)%
|
|||
Proceeds on sale of forward and reverse mortgage servicing rights
|
43
|
|
|
243
|
|
|
(200
|
)
|
|
(82
|
)%
|
|||
Other
|
(12
|
)
|
|
(10
|
)
|
|
(2
|
)
|
|
20
|
%
|
|||
Net cash attributable to investing activities
|
$
|
4
|
|
|
$
|
18
|
|
|
$
|
(14
|
)
|
|
(78
|
)%
|
Table 30. Financing Cash Flow
|
|
Three Months Ended March 31, 2020
|
|
Three Months Ended March 31, 2019
|
|
$ Change
|
|
% Change
|
|||||||
(Decrease) increase in warehouse facilities
|
$
|
(25
|
)
|
|
$
|
307
|
|
|
$
|
(332
|
)
|
|
(108
|
)%
|
Increase (decrease) in advance facilities
|
68
|
|
|
(30
|
)
|
|
98
|
|
|
(327
|
)%
|
|||
Repayment of notes payable
|
—
|
|
|
(294
|
)
|
|
294
|
|
|
(100
|
)%
|
|||
Redemption and repayment of unsecured senior notes and nonrecourse debt
|
(698
|
)
|
|
(3
|
)
|
|
(695
|
)
|
|
23,167
|
%
|
|||
Issuance of unsecured senior debt
|
600
|
|
|
—
|
|
|
600
|
|
|
100
|
%
|
|||
Issuance of excess spread financing
|
24
|
|
|
245
|
|
|
(221
|
)
|
|
(90
|
)%
|
|||
Settlements and repayments of excess spread financing
|
(58
|
)
|
|
(50
|
)
|
|
(8
|
)
|
|
16
|
%
|
|||
Decrease of participating interest financing
|
(275
|
)
|
|
(408
|
)
|
|
133
|
|
|
(33
|
)%
|
|||
Changes in HECM securitizations
|
(99
|
)
|
|
(107
|
)
|
|
8
|
|
|
(7
|
)%
|
|||
Other
|
(18
|
)
|
|
(4
|
)
|
|
(14
|
)
|
|
350
|
%
|
|||
Net cash attributable to financing activities
|
$
|
(481
|
)
|
|
$
|
(344
|
)
|
|
$
|
(137
|
)
|
|
40
|
%
|
▪
|
Base of $2.5 plus 25 basis points of outstanding UPB for total loans serviced.
|
▪
|
Tangible Net Worth comprises of total equity less goodwill, intangible assets, affiliate receivables and certain pledged assets.
|
▪
|
The sum of (i) base of $2.5 plus 35 basis points of the issuer’s total single-family effective outstanding obligations, and (ii) base of $5 plus 1% of the total effective HMBS outstanding obligations.
|
▪
|
Tangible Net Worth is defined as total equity less goodwill, intangible assets, affiliate receivables and certain pledged assets. Effective for fiscal year 2020, under the Ginnie Mae MBS Guide, the issuers will no longer be permitted to include deferred tax assets when computing the minimum net worth requirement.
|
▪
|
In addition to the minimum net worth requirement, we are also required to hold a ratio of Tangible Net Worth to Total Assets (excluding HMBS securitizations) greater than 6%.
|
▪
|
3.5 basis points of total Agency servicing.
|
▪
|
Incremental 200 basis points of total nonperforming Agency, measured as 90+ delinquencies, servicing in excess of 6% of the total Agency servicing UPB.
|
▪
|
Allowable assets for liquidity may include: cash and cash equivalents (unrestricted), available for sale or held for trading investment grade securities (e.g., Agency MBS, Obligations of GSEs, US Treasury Obligations); and unused/available portion of committed servicing advance lines.
|
▪
|
Maintain liquid assets equal to the greater of $1 or 10 basis points of our outstanding single-family MBS.
|
▪
|
Maintain liquid assets equal to at least 20% of our net worth requirement for HECM MBS.
|
Table 31. Debt
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Advance facilities, net
|
$
|
489
|
|
|
$
|
422
|
|
Warehouse facilities, net
|
4,551
|
|
|
4,575
|
|
||
Unsecured senior notes, net
|
2,259
|
|
|
2,366
|
|
Table 32. Contractual Maturities - Unsecured Senior Notes
|
Year Ending December 31,
|
|
Amount
|
||
2020
|
|
$
|
—
|
|
2021
|
|
—
|
|
|
2022
|
|
—
|
|
|
2023
|
|
950
|
|
|
2024
|
|
—
|
|
|
Thereafter
|
|
1,350
|
|
|
Unsecured senior notes principal amount
|
|
2,300
|
|
|
Unamortized debt issuance costs, premium and discount
|
|
(41
|
)
|
|
Unsecured senior notes, net
|
|
$
|
2,259
|
|
Table 33. Contractual Obligations
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
|
Total
|
||||||||||
Unsecured senior notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
950
|
|
|
$
|
1,350
|
|
|
$
|
2,300
|
|
Interest payment from unsecured senior notes
|
182
|
|
|
363
|
|
|
248
|
|
|
175
|
|
|
968
|
|
|||||
Total
|
$
|
182
|
|
|
$
|
363
|
|
|
$
|
1,198
|
|
|
$
|
1,525
|
|
|
$
|
3,268
|
|
Critical Accounting Policies
|
Table 34. Change in Fair Value
|
|
March 31, 2020
|
||||||
Down 25 bps
|
|
Up 25 bps
|
|||||
Increase (decrease) in assets
|
|
|
|
||||
Mortgage servicing rights at fair value
|
$
|
(229
|
)
|
|
$
|
235
|
|
Mortgage loans held for sale at fair value
|
10
|
|
|
(12
|
)
|
||
Derivative financial instruments:
|
|
|
|
||||
Interest rate lock commitments
|
31
|
|
|
(37
|
)
|
||
Total change in assets
|
(188
|
)
|
|
186
|
|
||
Increase (decrease) in liabilities
|
|
|
|
||||
Mortgage servicing rights liabilities at fair value
|
(5
|
)
|
|
4
|
|
||
Excess spread financing at fair value
|
(46
|
)
|
|
51
|
|
||
Derivative financial instruments:
|
|
|
|
||||
Forward MBS trades
|
36
|
|
|
(44
|
)
|
||
Total change in liabilities
|
(15
|
)
|
|
11
|
|
||
Total, net change
|
$
|
(173
|
)
|
|
$
|
175
|
|
|
|
Incorporated by Reference
|
|
|||
Exhibit Number
|
Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed or Furnished Herewith
|
|
|
|
|
|
|
|
10.1**
|
|
|
|
|
X
|
|
10.2**
|
|
|
|
|
X
|
|
10.3
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
X
|
|
32.1
|
|
|
|
|
X
|
|
32.2
|
|
|
|
|
X
|
|
101.INS
|
XBRL Instance Document
|
|
|
|
|
X
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
X
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
X
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
X
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
X
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
X
|
|
|
MR. COOPER GROUP INC.
|
|
|
|
April 30, 2020
|
|
/s/ Jay Bray
|
Date
|
|
Jay Bray
Chief Executive Officer (Principal Executive Officer) |
|
|
|
April 30, 2020
|
|
/s/ Christopher G. Marshall
|
Date
|
|
Christopher G. Marshall
Vice Chairman & Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Participant:
|
[Insert Participant Name]
|
Date of Grant:
|
[Insert Date of Grant]
|
Performance Stock Units:
|
[Insert Target Number of Performance Stock Units] (the “PSUs”)
|
Performance Period:
|
There are two relevant performance periods with respect to the PSU Award: The first of the month of Date of Grant through the 1st anniversary of the first of the month of the Date of Grant (the “Initial Performance Period”) and the first of the month of the Date of Grant through the 3rd anniversary of the first of the month of the Date of Grant (the “Cumulative Performance Period”).
|
Vesting Schedule:
|
Except as set forth below, provided the Participant has not undergone a Termination prior to a Vesting Date (as defined below):
|
•
|
The Initial PSU Tranche (as defined below) shall be eligible to vest on the last day of the Initial Performance Period (the “Initial Vesting Date”) based on the Total Shareholder Return achieved with respect to the Initial Performance Period; and
|
•
|
The Final PSU Tranche (as defined below) shall be eligible to vest on the last day of the Cumulative Performance Period (the “Final Vesting Date”, together,
|
•
|
on the Initial Vesting Date shall be equal to (x) one-third (1/3rd) of the target number of PSUs granted under this Agreement (the “Initial PSU Tranche”), multiplied by (y) the Percentage of Award Earned for the Initial Performance Period (as set forth in the chart below), rounded down to the nearest whole PSU (such number of PSUs vesting (if any), the “Initial PSUs Earned”); and
|
•
|
on the Final Vesting Date shall be equal to (i) (x) one-hundred percent (100%) of the target number of PSUs granted under this Agreement (the “Final PSU Tranche”), multiplied by (y) the Percentage of Award Earned for the Cumulative Performance Period (as set forth in the chart below) less (ii) the Initial PSUs Earned, rounded down to the nearest whole PSU (such number of PSUs vesting (if any), the “Final PSUs Earned”); provided that for the avoidance of doubt such amount shall not be less than zero.
|
Definitions:
|
“Total Shareholder Return” or “TSR” means, with respect to each share of Common Stock, a rate of return reflecting stock price appreciation, plus the reinvestment of dividends (for which the ex-dividend date occurs during the Initial Performance Period or Cumulative Performance Period, as applicable) in additional shares of Common Stock, from the first day of the Initial Performance Period through the last day of the Initial Performance Period or Cumulative Performance Period, as applicable. For purposes of calculating Total Stockholder Return, the beginning stock price will be based the volume weighted average price (the “VWAP”) per share of Common Stock for the twenty (20) trading days immediately prior to the first day of the Initial Performance Period and the ending stock price will be based on the VWAP per share of Common Stock for the twenty (20) trading days immediately prior to the last day of the Initial Performance Period or Cumulative Performance Period, as applicable. For this purpose, (x) dividends will be deemed reinvested on the “ex dividend” date (based on the closing price of the Common Stock on such date), (y) all cash special dividends shall be treated like regular dividends, and (z) all spin-offs or share-
|
Termination of Participant:
|
Generally, upon a Termination of Participant prior to the Final Vesting Date, all then unvested Performance Stock Units will be immediately forfeited without consideration.
|
MR. COOPER GROUP INC.
|
PARTICIPANT
|
|
|
By:
Title: |
|
Participant:
|
[Insert Participant Name]
|
Date of Grant:
|
[Insert Date of Grant]
|
Performance Stock Units:
|
[Insert Target Number of Performance Stock Units] (the “PSUs”)
|
Performance Period:
|
There are two relevant performance periods with respect to the PSU Award: The first of the month of Date of Grant through the 1st anniversary of the first of the month of the Date of Grant (the “Initial Performance Period”) and the first of the month of the Date of Grant through the 3rd anniversary of the first of the month of the Date of Grant (the “Cumulative Performance Period”).
|
Vesting Schedule:
|
Except as set forth below, provided the Participant has not undergone a Termination prior to a Vesting Date (as defined below):
|
•
|
The Initial PSU Tranche (as defined below) shall be eligible to vest on the last day of the Initial Performance Period (the “Initial Vesting Date”) based on the Total Shareholder Return achieved with respect to the Initial Performance Period; and
|
•
|
The Final PSU Tranche (as defined below) shall be eligible to vest on the last day of the Cumulative Performance Period (the “Final Vesting Date”, together,
|
•
|
on the Initial Vesting Date shall be equal to (x) one-third (1/3rd) of the target number of PSUs granted under this Agreement (the “Initial PSU Tranche”), multiplied by (y) the Percentage of Award Earned for the Initial Performance Period (as set forth in the chart below), rounded down to the nearest whole PSU (such number of PSUs vesting (if any), the “Initial PSUs Earned”); and
|
•
|
on the Final Vesting Date shall be equal to (i) (x) one-hundred percent (100%) of the target number of PSUs granted under this Agreement (the “Final PSU Tranche”), multiplied by (y) the Percentage of Award Earned for the Cumulative Performance Period (as set forth in the chart below) less (ii) the Initial PSUs Earned, rounded down to the nearest whole PSU (such number of PSUs vesting (if any), the “Final PSUs Earned”); provided that for the avoidance of doubt such amount shall not be less than zero.
|
Definitions:
|
“Total Shareholder Return” or “TSR” means, with respect to each share of Common Stock, a rate of return reflecting stock price appreciation, plus the reinvestment of dividends (for which the ex-dividend date occurs during the Initial Performance Period or Cumulative Performance Period, as applicable) in additional shares of Common Stock, from the first day of the Initial Performance Period through the last day of the Initial Performance Period or Cumulative Performance Period, as applicable. For purposes of calculating Total Stockholder Return, the beginning stock price will be based the volume weighted average price (the “VWAP”) per share of Common Stock for the twenty (20) trading days immediately prior to the first day of the Initial Performance Period and the ending stock price will be based on the VWAP per share of Common Stock for the twenty (20) trading days immediately prior to the last day of the Initial Performance Period or Cumulative Performance Period, as applicable. For this purpose, (x) dividends will be deemed reinvested on the “ex dividend” date (based on the closing price of the Common Stock on such date), (y) all cash special dividends shall be treated like regular dividends, and (z) all spin-offs or share-
|
Termination of Participant:
|
Generally, upon a Termination of Participant prior to the Final Vesting Date, all then unvested Performance Stock Units will be immediately forfeited without consideration.
|
MR. COOPER GROUP INC.
|
PARTICIPANT
|
|
|
By:
Title: |
|
I.
|
Participant Acknowledgment. The Participant hereby acknowledges receipt of a copy of the Plan. The Participant hereby acknowledges that all decisions, determinations and interpretations of the Board, or the Committee, in respect of the Plan, this Agreement and this Award of Performance Stock Units shall be final, binding and conclusive.
|
By: /s/ Anthony Beshara
|
Name: Anthony Beshara Title: Director |
By: /s/ Pedro Alvarez
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the three months ended March 31, 2020 of Mr. Cooper Group Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d - 15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
Date:
|
April 30, 2020
|
|
|
|
/s/ Jay Bray
|
|
|
|
|
Jay Bray
|
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the three months ended March 31, 2020 of Mr. Cooper Group Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d - 15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
|
Date:
|
April 30, 2020
|
|
|
|
/s/ Christopher G. Marshall
|
|
|
|
|
Christopher G. Marshall
|
|
|
|
|
Vice Chairman & Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date:
|
April 30, 2020
|
|
|
/s/ Jay Bray
|
||
|
Jay Bray
|
||
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Date:
|
April 30, 2020
|
|
/s/ Christopher G. Marshall
|
|
|
Christopher G. Marshall
|
|
|
Vice Chairman & Chief Financial Officer
|