| Loan Sales and Servicing Activities |
Note 6—Loan Sales and Servicing Activities Loan Sales The Company originates, purchases and sells loans in the secondary mortgage market without recourse for credit losses. However, the Company maintains continuing involvement with the loans in the form of servicing arrangements and the liability under representations and warranties it makes to purchasers and insurers of the loans. The following table summarizes cash flows between the Company and transferees as a result of the sale of loans in transactions where the Company maintains continuing involvement with the loans: | | | | | | | | | | | | | | | Quarter ended June 30, | | Six months ended June 30, | | | 2026 | | 2025 | | 2026 | | 2025 | | | | (in thousands) | Cash flows: | | | | | | | | | | | | | Sales proceeds | | $ | 33,380,053 | | $ | 34,656,042 | | $ | 65,991,372 | | $ | 62,243,471 | Servicing fees received | | $ | 441,411 | | $ | 411,531 | | $ | 869,648 | | $ | 807,763 |
The following table summarizes the UPB of the loans sold by the Company in transactions where it maintains continuing involvement: | | | | | | | | | | | | | | | | | | | | | June 30, | | December 31, | | | | | | | | | 2026 | | 2025 | | | | | | | | | | (in thousands) | Unpaid principal balance of loans outstanding | | | | | | | | $ | 474,869,927 | | $ | 448,035,447 | Delinquent loans: | | | | | | | | | | | | | 30-89 days | | | | | | | | $ | 16,250,037 | | $ | 18,000,680 | 90 days or more: | | | | | | | | | | | | | Not in foreclosure | | | | | | | | $ | 11,405,544 | | $ | 9,759,483 | In foreclosure | | | | | | | | $ | 1,688,442 | | $ | 1,372,545 | Foreclosed | | | | | | | | $ | 4,261 | | $ | 4,076 | Loans in bankruptcy | | | | | | | | $ | 2,243,332 | | $ | 1,968,188 |
Loan Servicing The following tables summarize the Company’s loan servicing portfolio as measured by UPB: | | | | | | | | | | | | June 30, 2026 | | | Servicing | | | | Total | | | rights owned | | Subservicing | | loans serviced | | | | (in thousands) | Investor: | | | | | | | | | | Non-affiliated entities: | | | | | | | | | | Originated | | $ | 474,869,927 | | $ | — | | $ | 474,869,927 | Purchased | | | 13,227,690 | | | — | | | 13,227,690 | Subserviced | | | — | | | 11,496,726 | | | 11,496,726 | | | | 488,097,617 | | | 11,496,726 | | | 499,594,343 | PennyMac Mortgage Investment Trust | | | — | | | 223,817,562 | | | 223,817,562 | Loans held for sale | | | 7,656,960 | | | — | | | 7,656,960 | | | $ | 495,754,577 | | $ | 235,314,288 | | $ | 731,068,865 | Delinquent loans: | | | | | | | | | | 30 days | | $ | 12,441,803 | | $ | 2,041,966 | | $ | 14,483,769 | 60 days | | | 4,312,123 | | | 532,843 | | | 4,844,966 | 90 days or more: | | | | | | | | | | Not in foreclosure | | | 11,597,418 | | | 1,014,276 | | | 12,611,694 | In foreclosure | | | 1,735,539 | | | 150,461 | | | 1,886,000 | Foreclosed | | | 6,514 | | | 2,334 | | | 8,848 | | | $ | 30,093,397 | | $ | 3,741,880 | | $ | 33,835,277 | Loans in bankruptcy | | $ | 2,315,299 | | $ | 405,233 | | $ | 2,720,532 | Custodial funds managed by the Company (1) | | $ | 9,023,091 | | $ | 3,287,288 | | $ | 12,310,379 |
| (1) | Custodial funds include cash accounts holding funds on behalf of borrowers and investors relating to loans serviced under servicing agreements and are not included on the Company’s consolidated balance sheets. The Company earns placement fees on certain of these custodial funds where it owns the MSRs and these fees are included in Interest income in the Company’s consolidated statements of income. |
| | | | | | | | | | | | December 31, 2025 | | | Servicing | | | | Total | | | rights owned | | Subservicing | | loans serviced | | | | (in thousands) | Investor: | | | | | | | | | | Non-affiliated entities: | | | | | | | | | | Originated | | $ | 448,035,447 | | $ | — | | $ | 448,035,447 | Purchased | | | 13,999,998 | | | — | | | 13,999,998 | Subserviced (1) | | | — | | | 35,873,833 | | | 35,873,833 | | | | 462,035,445 | | | 35,873,833 | | | 497,909,278 | PennyMac Mortgage Investment Trust | | | — | | | 226,774,067 | | | 226,774,067 | Loans held for sale | | | 8,930,477 | | | — | | | 8,930,477 | | | $ | 470,965,922 | | $ | 262,647,900 | | $ | 733,613,822 | Delinquent loans: | | | | | | | | | | 30 days | | $ | 13,205,704 | | $ | 3,056,477 | | $ | 16,262,181 | 60 days | | | 5,357,188 | | | 962,007 | | | 6,319,195 | 90 days or more: | | | | | | | | | | Not in foreclosure | | | 9,944,189 | | | 1,734,551 | | | 11,678,740 | In foreclosure | | | 1,414,544 | | | 184,343 | | | 1,598,887 | Foreclosed | | | 6,229 | | | 3,121 | | | 9,350 | | | $ | 29,927,854 | | $ | 5,940,499 | | $ | 35,868,353 | Loans in bankruptcy | | $ | 2,039,686 | | $ | 566,890 | | $ | 2,606,576 | Custodial funds managed by the Company (2) | | $ | 8,429,523 | | $ | 2,758,179 | | $ | 11,187,702 |
| (1) | Includes $24.3 billion in UPB of loans where MSRs have been sold, but the servicing has not yet transferred to the purchaser’s servicing platform. |
| (2) | Custodial funds include cash accounts holding funds on behalf of borrowers and investors relating to loans serviced under servicing agreements and are not included on the Company’s consolidated balance sheets. The Company earns placement fees on certain of these custodial funds where it owns the MSRs and these fees are included in Interest income in the Company’s consolidated statements of income. |
Following is a summary of the geographical distribution of loans included in the Company’s loan servicing portfolio for the top five and all other states as measured by UPB: | | | | | | | | | June 30, | | December 31, | State | | 2026 | | 2025 | | | | (in thousands) | California | | $ | 83,269,801 | | $ | 83,261,751 | Texas | | | 74,356,693 | | | 73,599,588 | Florida | | | 69,506,106 | | | 69,872,447 | Virginia | | | 36,773,044 | | | 38,282,502 | Georgia | | | 30,106,991 | | | 30,528,228 | All other states | | | 437,056,230 | | | 438,069,306 | | | $ | 731,068,865 | | $ | 733,613,822 |
The Company is contractually responsible for making the payments required to protect the loans’ beneficial interest holders’ interests in the properties collateralizing their loans and may be required to advance amounts in excess of insurer or guarantor reimbursement limits. Therefore, the Company provides a valuation allowance on the servicing advances for these amounts to adjust their carrying values to amounts that are expected to ultimately be recovered from the loans’ insurers, guarantors, or beneficial interest holders. The servicing advance valuation allowance is estimated based on relevant qualitative and quantitative information about past events, including historical collection and loss experience, current conditions, and reasonable and supportable forecasts that affect collectable amounts. The provision for losses on servicing advances is included in Servicing expense in the consolidated statements of income. Servicing advances are written off when they are deemed unrecoverable. The following is a summary of the allowance for losses on servicing advances: | | | | | | | | | | | | | | | Quarter ended June 30, | | Six months ended June 30, | | | 2026 | | 2025 | | 2026 | | 2025 | | | | (in thousands) | Balance at beginning of period | | $ | 116,052 | | $ | 82,155 | | $ | 103,574 | | $ | 85,788 | Provision for losses | | | 25,059 | | | 7,786 | | | 45,021 | | | 11,970 | Charge-offs, net | | | (12,207) | | | (7,916) | | | (19,691) | | | (15,733) | Balance at end of period | | $ | 128,904 | | $ | 82,025 | | $ | 128,904 | | $ | 82,025 |
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