Fair Value of Financial Instruments (Tables)
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6 Months Ended |
Jun. 30, 2026 |
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| Fair Value Disclosures [Abstract] |
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| Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis |
The following table presents the assets and liabilities that are reported at fair value on our consolidated balance sheets on a recurring basis at June 30, 2026 and December 31, 2025, as well as the fair value hierarchy of the valuation inputs used to measure fair value. Table 6.1 – Assets and Liabilities Measured at Fair Value on a Recurring Basis | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | Fair Value | | Fair Value Measurements Using | | (In Thousands) | | | Level 1 | | Level 2 | | Level 3 | | Assets | | | | | | | | | | Residential consumer loans | | $ | 23,638,696 | | | $ | — | | | $ | — | | | $ | 23,638,696 | | | Residential investor loans | | 3,111,606 | | | — | | | — | | | 3,111,606 | | | HEI | | 339,735 | | | — | | | — | | | 339,735 | | | Real estate securities: | | | | | | | | | | Trading | | 193,550 | | | — | | | — | | | 193,550 | | | AFS | | 287,347 | | | — | | | — | | | 287,347 | | | Servicing investments | | 290,825 | | | — | | | — | | | 290,825 | | | Strategic investments | | 10,123 | | | — | | | — | | | 10,123 | | | Derivative assets | | 59,436 | | | 8,099 | | | 29,616 | | | 21,721 | | | Total Assets | | $ | 27,931,318 | | | $ | 8,099 | | | $ | 29,616 | | | $ | 27,893,603 | | | | | | | | | | | | Liabilities | | | | | | | | | | ABS issued | | $ | 22,515,907 | | | $ | — | | | $ | — | | | $ | 22,515,907 | | | Derivative liabilities | | 10,912 | | | 4,289 | | | — | | | 6,623 | | | Non-controlling interest | | 92,631 | | | — | | | — | | | 92,631 | | | Total Liabilities | | $ | 22,619,450 | | | $ | 4,289 | | | $ | — | | | $ | 22,615,161 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | Fair Value | | Fair Value Measurements Using | | (In Thousands) | | | Level 1 | | Level 2 | | Level 3 | | Assets | | | | | | | | | | Residential consumer loans | | $ | 17,935,761 | | | $ | — | | | $ | — | | | $ | 17,935,761 | | | Residential investor loans | | 3,602,250 | | | — | | | — | | | 3,602,250 | | | HEI | | 329,883 | | | — | | | — | | | 329,883 | | | Real estate securities: | | | | | | | | | | Trading | | 135,459 | | | — | | | — | | | 135,459 | | | AFS | | 287,557 | | | — | | | — | | | 287,557 | | | Servicing investments | | 302,230 | | | — | | | — | | | 302,230 | | | Strategic investments | | 6,310 | | | — | | | — | | | 6,310 | | | Derivative assets | | 105,597 | | | 56,458 | | | 31,119 | | | 18,020 | | | Total Assets | | $ | 22,705,047 | | | $ | 56,458 | | | $ | 31,119 | | | $ | 22,617,470 | | | | | | | | | | | | Liabilities | | | | | | | | | | ABS issued | | $ | 17,433,600 | | | $ | — | | | $ | — | | | $ | 17,433,600 | | | Derivative liabilities | | 28,150 | | | 26,973 | | | — | | | 1,177 | | | Non-controlling interest | | 92,644 | | | — | | | — | | | 92,644 | | | Total Liabilities | | $ | 17,554,394 | | | $ | 26,973 | | | $ | — | | | $ | 17,527,421 | |
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| Schedule of Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis |
The following table presents additional information about Level 3 assets and liabilities measured at fair value on a recurring basis for the six months ended June 30, 2026. Table 6.2 – Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | Residential Consumer Loans | | Residential Investor
Loans | | HEI | | Real Estate Trading Securities | | Real Estate AFS
Securities | | Servicing Investments | | Strategic Investments | | Derivatives, net (1) | | (In Thousands) | | | | | | | | | Beginning balance - December 31, 2025 | | $ | 17,935,761 | | | $ | 3,602,250 | | | $ | 329,883 | | | $ | 135,459 | | | $ | 287,557 | | | $ | 302,230 | | | $ | 6,310 | | | $ | 16,843 | | | Acquisitions | | 12,998,585 | | | — | | | — | | | 98,314 | | | 10,185 | | | 4,572 | | | 527 | | | — | | | Originations | | — | | | 842,158 | | | 3,003 | | | — | | | — | | | — | | | — | | | — | | | Sales | | (4,592,312) | | | (1,068,959) | | | — | | | (65,616) | | | — | | | — | | | — | | | — | | | Transfer to fair value option | | — | | | — | | | — | | | — | | | — | | | — | | | 1,350 | | | — | | | Principal paydowns | | (2,557,332) | | | (594,866) | | | (9,542) | | | (284) | | | (549) | | | (27,751) | | | — | | | — | | Consolidation of securitized bridge loans (2) | | — | | | 411,779 | | | — | | | — | | | — | | | — | | | — | | | — | | | Gains (losses) in net income, net | | (140,968) | | | (37,914) | | | 16,290 | | | 25,677 | | | 1,530 | | | 11,774 | | | 1,936 | | | 44,039 | | | Unrealized gains in OCI, net | | — | | | — | | | — | | | — | | | (11,376) | | | — | | | — | | | — | | Other settlements, net (3) | | (5,038) | | | (42,842) | | | 101 | | | — | | | — | | | — | | | — | | | (45,784) | | Ending balance - June 30, 2026 | | $ | 23,638,696 | | | $ | 3,111,606 | | | $ | 339,735 | | | $ | 193,550 | | | $ | 287,347 | | | $ | 290,825 | | | $ | 10,123 | | | $ | 15,098 | | Change in unrealized gains or (losses) for the period included in earnings for assets held at the end of the reporting period (4) | | $ | (114,738) | | | $ | (39,501) | | | $ | 16,499 | | | $ | 25,857 | | | $ | (11,556) | | | $ | 13,286 | | | $ | (150) | | | $ | 15,098 | |
| | | | | | | | | | | | | | | | | Liabilities | | | ABS Issued | | Non-controlling interest | | (In Thousands) | | | Beginning balance - December 31, 2025 | | $ | 17,433,600 | | | $ | 92,645 | | | Issuance | | 8,561,389 | | | — | | | | | | | | Sales | | (3,689) | | | — | | | Principal paydowns | | (3,191,968) | | | — | | | (Gains) losses in net income (loss), net | | (283,425) | | | 3,605 | | | Other settlements, net | | — | | | (3,619) | | Ending balance - June 30, 2026 | | $ | 22,515,907 | | | $ | 92,631 | | Change in unrealized (gains) or losses for the period included in earnings for liabilities held at the end of the reporting period (4) | | $ | (373,025) | | | $ | 289 | | | | | | |
(1)Derivatives, net, consists of loan purchase and interest rate lock commitments, and are presented on a net basis. (2)For the six months ended June 30, 2026, we transferred $348 million of residential investor bridge loans to joint ventures sponsored by us in connection with our CAFL bridge securitizations. These joint ventures are consolidated under GAAP as we are the primary beneficiary. For additional information on our principles of consolidation, see Note 16 of the Notes to Consolidated Financial Statements, included in Part I, Item 1 of this 2026 Quarterly Report on Form 10-Q. (3)For residential consumer and residential investor loans, primarily represents the transfer of loans to REO; for HEI, represents the share of HEI disposition fees paid to our third party originators for our purchased HEI portfolio; for derivatives, represents the transfer of the fair value of loan purchase and interest rate lock commitments at the time loans are acquired to the basis of residential consumer and investor loans. (4)All changes in unrealized gains or (losses) are included in net income, with the exception of Real Estate AFS Securities, which are included in comprehensive income.
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| Schedule of Fair Value Methodology for Level 3 Financial Instruments |
The following table provides quantitative information about the significant unobservable inputs used in the valuation of our Level 3 assets and liabilities measured at fair value at June 30, 2026. Table 6.3 – Fair Value Methodology for Level 3 Financial Instruments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | Fair Value (1) | | | | Input Values | | (Dollars in Thousands, except Input Values) | | | Unobservable Input | | Range | | | Weighted Average (2) | | Assets | | | | | | | | | | | | | Residential consumer loans (4) | | $ | 23,638,696 | | Senior credit spread to TBA price (3) | | $ | 0.63 | | - | $ | 1.44 | | | | $ | 0.95 | | | | | | | Senior credit spread to Treasury Curve (3) | | 125 | | - | 200 | | bps | | 139 | | bps | | | | | Subordinate credit spread to Treasury Curve (3) | | 145 | | - | 675 | | bps | | 262 | | bps | | | | | Senior credit support (3) | | 7 | | - | 20 | | % | | 10 | | % | | | | | IO discount rate (3) | | 10 | | - | 20 | | % | | 16 | | % | | | | | Liability price | | $ | 24 | | - | $ | 105 | | | | $ | 100 | | | | Residential investor loans: | | | | | | | | | | | | | Residential investor term loans (4) | | 1,796,137 | | | Whole loan spread (3) | | 220 | | - | 220 | | bps | | 220 | | bps | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Liability price | | $ | 89 | | - | $ | 99 | | | | $ | 93 | | | Residential investor bridge loans (4) | | 1,315,469 | | | Whole loan discount rate | | 7 | | - | 12 | | % | | 7 | | % | | | | | | | | | | | | | | | | | | Liability Price | | $ | 69 | | - | $ | 158 | | | | $ | 100 | | | | | | | Dollar price of loans | | $ | 21 | | - | $ | 105 | | | | $ | 86 | | | | HEI | | 339,735 | | Discount rate | | 8 | | - | 8 | | % | | 8 | | % | | | | | Prepayment rate (Annual CPR) | | 8 | | - | 15 | | % | | 14 | | % | | | | | Home price appreciation (depreciation) | | 4 | | - | 4 | | % | | 4 | | % | | | | | Liability price (4) | | $ | 158 | | - | $ | 158 | | | | $ | 158 | | | | Real estate securities - trading and AFS securities | | 480,897 | | Discount rate | | 4 | | - | 22 | | % | | 9 | | % | | | | | Prepayment rate (Annual CPR) | | — | | - | 31 | | % | | 4 | | % | | | | | Default rate | | — | | - | 89 | | % | | 34 | | % | | | | | Loss severity | | — | | - | 40 | | % | | 10 | | % | | Servicing investments | | 290,825 | | Prepayment rate (Annual CPR) | | — | | - | 39 | | % | | 10 | | % | | | | | Prepayment yield (Annual CPY) | | 10 | | - | 50 | | % | | 30 | | % | | | | | Discount rate | | 8 | | - | 11 | | % | | 10 | | % | Derivative assets, net (5) | | 15,098 | | Senior credit spread to TBA price (3) | | $ | 0.63 | | - | $ | 1.44 | | | | $ | 0.92 | | | | | | | Senior credit spread to Treasury Curve (3) | | 125 | | - | 200 | | bps | | 139 | | bps | | | | | Subordinate credit spread to Treasury Curve (3) | | 145 | | - | 675 | | bps | | 264 | | bps | | | | | Senior credit support (3) | | 7 | | - | 20 | | % | | 10 | | % | | | | | IO discount rate (3) | | 10 | | - | 20 | | % | | 16 | | % | | | | | Pull-through rate | | 27 | | - | 100 | | % | | 73 | | % | | Strategic investments | | 10,123 | | Transaction Price | | $ | 200 | | - | $ | 3,813 | | | | $ | 1,125 | | | | Total Assets | | $ | 27,886,980 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Liabilities | | | | | | | | | | | | | ABS issued (4) | | $ | 22,515,907 | | Discount rate | | — | | - | 22 | | % | | 1 | | % | | | | | Prepayment rate (annual CPR) | | — | | - | 53 | | % | | 13 | | % | | | | | Default rate | | — | | - | 21 | | % | | — | | % | | | | | Loss severity | | — | | - | 50 | | % | | 1 | | % | Non-controlling interests (6) | | 92,631 | | Discount rate | | 12 | | - | 15 | | % | | 13 | | % | | Total Liabilities | | $ | 22,608,538 | | | | | | | | | | | |
Footnotes to Table 6.3 (1)The predominant valuation technique used to determine our Level 3 fair value assets and liabilities is based on the discounted cash flow model. (2)The weighted average input value for all loan types is based on unpaid principal balance ("UPB"). The weighted average input value for all other assets and liabilities is based on relative fair value. (3)Values represent pricing inputs used in a securitization pricing model. Credit spreads represent spreads to the applicable treasury curve unless specified otherwise. (4)The fair value of the loans and HEI held by consolidated entities is based on the fair value of the ABS issued by these entities and the securities and other investments we own in those entities, which we determined were more readily observable in accordance with accounting guidance for Collateralized Financing Entities ("CFE"). At June 30, 2026, the fair value of securities we owned at the consolidated Sequoia and CAFL Term was $1.23 billion, and $314 million, respectively. At June 30, 2026, the fair value of our securities in the four CAFL Bridge loan securitizations accounted for under the CFE election and our HEI securitization entity was $70 million and $27 million, respectively. (5)For the purpose of this presentation, derivative assets and liabilities, which include loan purchase commitments, are presented on a net basis. (6)Of the total $119 million payable to non-controlling interests, $93 million is measured at fair value on a recurring basis.
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| Schedule of Carrying Values and Fair Values of Assets and Liabilities |
The following table summarizes the estimated fair values of assets and liabilities that are not measured at fair value at June 30, 2026 and December 31, 2025. Table 6.4 – Carrying Values and Estimated Fair Values of Assets and Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | December 31, 2025 | | | Level in Fair Value Hierarchy | | Carrying
Value | | Estimated Fair
Value | | Carrying
Value | | Estimated Fair
Value | | (In Thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Residential investor loans held-for-sale (1) | | 3 | | $ | 13,863 | | | $ | 13,863 | | | $ | 14,414 | | | $ | 14,414 | | | Cash and cash equivalents | | 1 | | 191,846 | | | 191,846 | | | 255,664 | | | 255,664 | | | Restricted cash | | 1 | | 99,465 | | | 99,465 | | | 193,446 | | | 193,446 | | | | | | | | | | | | | | Liabilities | | | | | | | | | | | | Debt obligation facilities and other financing | | 2 | | $ | 4,079,669 | | | $ | 4,080,151 | | | $ | 4,045,578 | | | $ | 4,046,266 | | | ABS issued, net | | 3 | | — | | | — | | | 58,431 | | | 58,386 | | | Convertible notes, net | | 1 | | 294,369 | | | 300,439 | | | 292,993 | | | 299,045 | | | Trust preferred securities and subordinated notes, net | | 3 | | 138,929 | | | 78,120 | | | 138,906 | | | 80,910 | | | Senior Notes | | 1 | | 443,607 | | | 451,517 | | | 321,905 | | | 335,904 | | Guarantee obligations (2) | | 3 | | 3,689 | | | 3,689 | | | 1,267 | | | 2,627 | |
(1)Balance consists of residential investor loans reported at the lower of cost or market for which the carrying value approximates fair value at June 30, 2026. (2)These liabilities are included in Accrued expenses and other liabilities on our consolidated balance sheets.
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