Reverse Mortgages |
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| Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reverse Mortgages |
The following table presents the estimated fair value of reverse mortgage loans classified as held for sale or held for investment pooled into HMBS, 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 intended, and agreed to sell all of the loans to FAR in November 2025 along with the HMBS-related borrowings at book value (determined at closing of the transaction). On April 30, 2026, the parties entered into an amendment to the November 2025 agreements whereby OMC agreed to sell a portion of its reverse MSRs comprised of approximately 20,000 HECM loans and the HMBS related borrowings, subject to Ginnie Mae approval and customary closing conditions, and the remaining loans which will not be sold were reclassified as held for investment. On May 28, 2026, the sale as amended was approved by Ginnie Mae and the transaction closed on June 30, 2026. As of the closing date on June 30, 2026, the sold balances included $5.6 billion securitized assets ($5.2 billion UPB), the associated $5.5 billion HMBS-related borrowings (or net $70 million reverse MSR), and approximately $57 million newly originated reverse loans and tails pending securitization. The final purchase price is subject to a 60-day adjustment period, following the closing date of the transaction. 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 June 30, 2026 and December 31, 2025, the balance includes nil and $58.4 million, respectively, of new HECM loan originations pending pooling into HMBS (pipeline loans). 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 effective with the agreement to sell the portfolio of reverse mortgage loans to FAR in November 2025. Effective with the amended agreement on April 30, 2026 to sell a portion of the reverse mortgage loans, the remaining loans which will not be sold were reclassified as held for investment. The $555.4 million repayments of reverse mortgage loans for the three months ended June 30, 2026 include $553.5 million of repayments of loans that were classified as held for sale 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.
(1)As described above, Reverse mortgage loans were reclassified from held for investment, at fair value to held for sale, at fair value in November 2025, and subsequently on April 30, 2026 under the amended sale agreement the portion of the loans which will not be sold were reclassified to held for investment. The $1,115.4 million repayments of reverse mortgage loans for the six months ended June 30, 2026 include $1,113.3 million of repayments of loans that were classified as held for sale and previously held for investment, which remain presented as investing cash flows in the consolidated statement of cash flows. The following table presents the Fair value gains (losses) on reverse loans and HMBS-related borrowings included in earnings:
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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