v3.26.1
Fair Value Measurements
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements FAIR VALUE MEASUREMENTS
Fair value is defined under U.S. GAAP as the price that would be received if an asset were sold or the price that would be paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. Required disclosures include classification of fair value measurements within a three-level hierarchy (Level 1, Level 2 and Level 3). Classification of a fair value measurement within the hierarchy is dependent on the classification and significance of the inputs used to determine the fair value measurement. Observable inputs are those that are observed, implied from, or corroborated with externally available market information. Unobservable inputs represent the Company’s estimates of market participants’ assumptions.
Fair value measurements are classified in the following manner:
Level 1—Valuation is based on quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2—Valuation is based on either observable prices for identical assets or liabilities in inactive markets, observable prices for similar assets or liabilities, or other inputs that are derived directly from, or through correlation to, observable market data at the measurement date.
Level 3—Valuation is based on the Company’s or others’ models using significant unobservable assumptions at the measurement date that a market participant would use.
In determining fair value measurements, the Company uses observable inputs whenever possible. The level of a fair value measurement within the hierarchy is dependent on the lowest level of input that has a significant impact on the measurement as a whole. If quoted market prices are available at the measurement date or are available for similar instruments, such prices are used in the measurements. If observable market data is not available at the measurement date, judgment is required to measure fair value.
The following is a description of measurement techniques for items recorded at fair value on a recurring basis. There were no material items recorded at fair value on a nonrecurring basis as of March 31, 2026 or December 31, 2025.

Mortgage loans at fair value: The Company has elected the fair value option for mortgage loans. The fair values of mortgage loans are based on valuation models that use the market price for similar loans sold in the secondary market. As these prices are derived from market observable inputs, they are categorized as Level 2.

IRLCs: The Company's interest rate lock commitments are derivative instruments that are recorded at fair value based on valuation models that use the market price for similar loans sold in the secondary market. The IRLCs are then subject to an estimated loan funding probability, or “pullthrough rate.” Given the significant and unobservable nature of the pullthrough rate assumption, IRLC fair value measurements are classified as Level 3.
FLSCs: The Company enters into forward loan sales commitments to sell certain mortgage loans which are recorded at fair value based on valuation models. The Company’s expectation of the amount of its interest rate lock commitments that will ultimately close is a factor in determining the position. The valuation models utilize the fair value of related mortgage loans determined using observable market data, and therefore, the fair value measurements of these commitments are categorized as Level 2.

Other interest rate derivatives: The Company has entered into other interest rate derivatives as part of its overall interest rate risk mitigation strategy. These financial instruments are generally comprised of interest rate swap futures, treasury futures, and forward loan purchase commitments. The interest rate swap and treasury futures are valued based on quoted prices in an active market and are therefore categorized as Level 1. The forward loan purchase commitments are valued based on observable market data and therefore categorized as Level 2. None of these other financial instruments were outstanding as of December 31, 2025.

Investment securities at fair value, pledged: The Company has previously sold mortgage loans that it originates through its private label securitization transactions. In executing these securitizations, the Company sells mortgage loans to a securitization trust for cash and, in some cases, retained interests in the trust. The Company has elected the fair value option for subsequently measuring the retained beneficial interests in the securitization trusts. The fair value of these investment securities is primarily based on observable market data and therefore categorized as Level 2.

MSRs: The fair value of MSRs is determined using a valuation model that calculates the present value of estimated future net servicing cash flows. The model includes estimates of prepayment speeds, discount rates, cost to service, float earnings, contractual servicing fee income, and ancillary income and late fees, among others. These estimates are supported by market and economic data collected from various sources. These fair value measurements are classified as Level 3.
Financial Instruments - Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following are the major categories of financial assets and liabilities measured at fair value on a recurring basis (in thousands):
 March 31, 2026
DescriptionLevel 1Level 2Level 3Total
Assets:
Mortgage loans at fair value$— $10,991,101 $— $10,991,101 
IRLCs— — 16,456 16,456 
FLSCs— 108,034 — 108,034 
Investment securities at fair value, pledged— 98,491 — 98,491 
Mortgage servicing rights— — 4,591,855 4,591,855 
Total assets$— $11,197,626 $4,608,311 $15,805,937 
Liabilities:
IRLCs$— $— $35,280 $35,280 
FLSCs— 14,442 — 14,442 
Other interest rate derivatives
239,882 48,213 — 288,095 
Total liabilities$239,882 $62,655 $35,280 $337,817 
 December 31, 2025
DescriptionLevel 1Level 2Level 3Total
Assets:
Mortgage loans at fair value$— $9,932,729 $— $9,932,729 
IRLCs— — 27,780 27,780 
FLSCs— 9,787 — 9,787 
Investment securities at fair value, pledged— 100,512 — 100,512 
Mortgage servicing rights— — 4,073,781 4,073,781 
Total assets$— $10,043,028 $4,101,561 $14,144,589 
Liabilities:
IRLCs$— $— $6,475 $6,475 
FLSCs— 20,099 — 20,099 
Total liabilities$— $20,099 $6,475 $26,574 
The following table presents quantitative information about the inputs used in recurring Level 3 fair value financial instruments and the fair value measurements for IRLCs:
Unobservable Input - IRLCsMarch 31, 2026December 31, 2025
Pullthrough rate (weighted avg.)
81 %78 %

Refer to Note 5 - Mortgage Servicing Rights for further information on the unobservable inputs used in measuring the fair value of the Company’s MSRs and for the roll-forward of MSRs for the three months ended March 31, 2026.
Level 3 Issuances and Transfers
The Company enters into IRLCs which are considered derivatives. If the contract converts to a loan, the implied value, which is solely based upon interest rate changes, is incorporated in the basis of the fair value of the loan. If the IRLC does not convert to a loan, the basis is reduced to zero as the contract has no continuing value. The Company does not track the basis of the individual IRLCs that convert to a loan, as that amount has no relevance to the presented condensed consolidated financial statements.
Other Financial Instruments
The following table presents the carrying amounts and estimated fair value of the Company's financial liabilities that are not measured at fair value on a recurring or nonrecurring basis (in thousands):
March 31, 2026December 31, 2025
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
2027 Senior Notes, due 6/15/27$498,953 $493,355 $498,736 $502,120 
2029 Senior Notes, due 4/15/29697,339 656,502 697,120 695,205 
2030 Senior Notes, due 2/1/30
794,672 755,304 794,324 810,040 
2031 Senior Notes, due 3/15/31
992,188 912,760 991,795 998,580 
Total senior notes
$2,983,152 $2,817,921 $2,981,975 $3,005,945 
The fair value of the 2027, 2029, 2030, and 2031 Senior Notes was estimated using Level 2 inputs, including observable trading information from independent sources.
Due to their nature and respective terms (including the variable interest rates on warehouse and other lines of credit and borrowings against investment securities), the carrying value of cash and cash equivalents, receivables, payables, borrowings against investment securities and warehouse and other lines of credit approximate their fair values as of March 31, 2026 and December 31, 2025, respectively.