Reverse Mortgages (Tables) |
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| Schedule of Loans Held For Investment and HMBS Related Borrowings | The following table summarizes the activity in reverse mortgage loans and HMBS-related borrowings that do not qualify for sale accounting and for which we elected the fair value option:
(1)Reverse mortgage loans were reclassified from held for investment, at fair value to held for sale, at fair value in November 2025. The $560.1 million repayments of reverse mortgage loans for the three months ended March 31, 2026 include $559.8 million of repayments of loans that were classified as held for sale at December 31, 2025 and previously held for investment, which remain presented as investing cash flows in the consolidated statement of cash flows. (2)See further breakdown of the net gain (loss) in the table below. Includes interest accruals. The following table presents the Fair value gains (losses) on reverse loans and HMBS-related borrowings included in earnings:
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| Schedule of Reverse Mortgage Revenue, Net | The following table presents the estimated fair value of reverse mortgage loans classified as held for sale, at fair value and previously classified as Loans held for investment, at fair value. Loans were reclassified to loans held for sale, at fair value (pursuant to the fair value election) at December 31, 2025 as we intend, and agreed to sell the loans to FAR in November 2025 along with the HMBS-related borrowings at book value (determined at closing of the transaction). At March 31, 2026, the transaction remained contingent on Ginnie Mae’s approval. On April 30, 2026, the parties entered into an amendment to the November 2025 agreements whereby OMC has agreed to sell reverse MSRs comprised of approximately 20,000 HECM loans and the HMBS related borrowings, subject to Ginnie Mae approval and customary closing conditions. Gross proceeds from the amended sale are an estimated $105 to $115 million after pricing related adjustments, including a slight discount to book value, and before transaction costs, repayment of certain warehouse financings, and other adjustments, including as a result of asset and liabilities balances as of the closing date. Following these payments and adjustments, the transaction is expected to result in net proceeds at closing of approximately $70 to $80 million. As of March 31, 2026, the balances include $5,525 million securitized assets ($5,145 million UPB), the associated $5,451 million HMBS-related borrowings (or net $74 million reverse MSR), and approximately $43 million newly originated reverse loans and tails pending securitization and net servicing related liabilities. See Note 23 - Subsequent Events for additional information. The reverse loans described herein exclude reverse loans pledged as collateral for the asset-backed securitization notes issued by OLIT and certain non HECM loans which are classified as Loans held for sale, at fair value on the face of the consolidated balance sheets for all periods presented.
The following table presents the composition of reverse mortgage loans by type:
(1)The Ginnie Mae securitization of conventional, HECM loans does not qualify for sale accounting treatment and is accounted for as a secured financing transaction, with the recognition of both loans and HMBS-related borrowing on the consolidated balance sheets. (2)Tails include draws on securitized HECM loans, mortgage insurance premium, servicing fee and other advances which we subsequently securitize. (3)As of March 31, 2026 and December 31, 2025, the balance includes $27.2 million and $58.4 million, respectively, of new HECM loan originations pending pooling into HMBS (pipeline loans). The following table presents the components of Gain (loss) on reverse loans and HMBS-related borrowings, net:
(1)Includes the changes in fair value of newly originated reverse mortgage loans in the period from interest rate lock commitment date through securitization date. (2)Includes the interest income on reverse mortgage loans less the interest expense on HMBS-related borrowings. The net interest income includes the servicing fee Onity is contractually entitled to on securitized loans. (3)See breakdown between Reverse mortgage loans and HMBS-related borrowings in the table above. (4)We began separately hedging our reverse exposure to interest rate in the fourth quarter of 2025 (also refer to Note 15 – Derivative Financial Instruments and Hedging Activities).
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