LHFS consist of mortgage loans originated or acquired by the Company with the intent to sell into the secondary market. LHFS are measured and reported at fair value. See Note 6 — Fair Value Measurements for a discussion on how the Company determines the fair values of the LHFS. The Company’s fair value election for its LHFS is intended to more accurately reflect the underlying economics of the Company’s operations. With the election of the fair value option for LHFS, loan origination fees, and the related direct loan origination costs associated with the origination of LHFS are earned and expensed as incurred, respectively.

During the six months ended June 30, 2026, the Company purchased newly originated Non-QM residential mortgage loans from HomeXpress. During the quarter ended March 31, 2026, the Company, through its taxable REIT subsidiary, committed to purchase approximately $187 million of newly originated Non-QM residential mortgage loans from HomeXpress. During the quarter ended June 30, 2026, the Company, through its taxable REIT subsidiary, entered into an additional commitment to purchase approximately $131 million of newly originated Non-QM residential mortgage loans from HomeXpress. Loans with an aggregate UPB of approximately $301 million acquired pursuant to these commitments settled during the quarter ended June 30, 2026. The loans were purchased on terms that the Company believes were consistent with market terms and are included in Loans held-for-sale, at fair value on the Company’s consolidated balance sheet. As of June 30, 2026, there were no amounts outstanding between the consolidated entities related to these transactions.

Revenue derived from the Company’s mortgage lending activities includes certain fees collected at the time of origination and gain or loss from the sale of LHFS. Loan origination income reflects the fees earned, net of lender credits from originating the loans. These consist of fees related to loan origination, discount points, underwriting, processing and other fees. Lender credits typically are related to rebates or concessions for certain loan origination costs.

Gain or loss from the sale and mark-to-market of LHFS includes both realized and unrealized gains and losses and are included in the Gain on origination and sale of loans, net in the accompanying Consolidated Statements of Operations. The valuation of LHFS is intended to represent the value that could be obtained in a pooled whole loan sale that includes the related mortgage servicing rights, also known as a servicing released transaction.

The Company principally sells its LHFS to private investors. The Company evaluates its loan sales for sales treatment. To the extent the transfer of loans qualifies as a sale, the Company derecognizes the loans and records the gain or loss on the sale date. In the event the Company determines that the transfer of loans does not qualify as a sale, the transfer would be treated as a secured borrowing. Interest income from loans is recorded on the accrual basis. LHFS are placed on non-accrual status when any portion of the principal or interest is 90 days past due or earlier if factors indicate that the ultimate collectability of the principal or interest is not probable. Interest received from loans on non-accrual status is recorded as income when collected. Loans return to accrual status when the principal and interest become current, and it is probable that the amounts are fully collectible.


	For the Six Months Ended		For the Year Ended
	June 30, 2026		December 31, 2025
	(dollars in thousands)
Balance, beginning of period	$	896,117	$	—
Acquired	—		522,349
Originations	1,789,041		990,335
Purchases	188,468		46,713
Repurchases	8,555		5,706
Sales to investors and transfers to REO	(1,747,187)		(672,580)
Principal paydowns	(7,235)		(4,203)
Net change in fair value	(1,298)		7,798
Balance, end of period	$	1,126,461	$	896,117

The Company monitors the credit quality of LHFS through its underwriting and post-origination review processes. As of June 30, 2026, the Company had $13 million of LHFS greater than 90 days delinquent with a net book value of $9 million.


	For the Quarter Ended		For the Six Months Ended
	June 30, 2026		June 30, 2026
	(dollars in thousands)
Premium from loan sales	$	20,909	$	56,156
Mark to market changes on LHFS	6,987		(1,298)
Unrealized gains from hedging derivative instruments	3,116		4,269
Unrealized gains from IRLC	(103)		200
Periodic interest on derivatives, net	97		97
Realized gains from hedging instruments, net	2,364		2,476
Provision for loan repurchase reserves	(683)		(756)
Loan origination income, net	(2,918)		(4,125)
Direct loan origination costs, net	(7,559)		(13,424)
Gain on origination and sale of loans, net	$	22,210	$	43,595