Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 09, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 1-14100 | ||
Entity Registrant Name | IMPAC MORTGAGE HOLDINGS, INC. | ||
Entity Incorporation, State or Country Code | MD | ||
Entity Tax Identification Number | 33-0675505 | ||
Entity Address, Address Line One | 4000 MacArthur Blvd., Suite 6000 | ||
Entity Address, City or Town | Newport Beach | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92660 | ||
City Area Code | 949 | ||
Local Phone Number | 475-3600 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7.4 | ||
Entity Common Stock, Shares Outstanding | 36,568,876 | ||
Auditor Name | Baker Tilly US, LLP | ||
Auditor Firm ID | 23 | ||
Auditor Location | Irvine, California | ||
Entity Central Index Key | 0001000298 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Common Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | IMH | ||
Security Exchange Name | NYSEAMER | ||
Preferred Stock Purchase Rights | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Preferred Stock Purchase Rights | ||
Trading Symbol | IMH | ||
Security Exchange Name | NYSEAMER |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 25,864 | $ 29,555 |
Restricted cash | 4,140 | 5,657 |
Mortgage loans held-for-sale | 13,052 | 308,477 |
Mortgage servicing rights | 749 | |
Securitized mortgage trust assets | 1,642,730 | |
Other assets | 17,275 | 35,603 |
Total assets | 60,331 | 2,022,771 |
LIABILITIES | ||
Warehouse borrowings | 3,622 | 285,539 |
Convertible notes | 15,000 | 20,000 |
Long-term debt | 27,753 | 46,536 |
Securitized mortgage trust liabilities | 1,614,862 | |
Other liabilities | 25,559 | 45,898 |
Total liabilities | 71,934 | 2,012,835 |
Commitments and contingencies (See Note 13) | ||
STOCKHOLDERS' (DEFICIT) EQUITY | ||
Common stock, $0.01 par value; 165,000,000 shares authorized; 36,568,876 and 21,332,684 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively | 366 | 213 |
Additional paid-in capital | 1,238,187 | 1,237,986 |
Accumulated other comprehensive earnings, net of tax | 39,257 | 22,044 |
Total accumulated deficit: | ||
Cumulative dividends declared | (822,520) | (822,520) |
Accumulated deficit | (467,240) | (427,808) |
Total accumulated deficit | (1,289,760) | (1,250,328) |
Total stockholders' (deficit) equity | (11,603) | 9,936 |
Total liabilities and stockholders' (deficit) equity | 60,331 | 2,022,771 |
Series A-1 junior participating preferred stock | ||
STOCKHOLDERS' (DEFICIT) EQUITY | ||
Preferred stock | ||
Series B 9.375% redeemable preferred stock | ||
STOCKHOLDERS' (DEFICIT) EQUITY | ||
Preferred stock | 7 | |
Series C 9.125% redeemable preferred stock | ||
STOCKHOLDERS' (DEFICIT) EQUITY | ||
Preferred stock | $ 14 | |
Series D 8.25% redeemable preferred stock | ||
STOCKHOLDERS' (DEFICIT) EQUITY | ||
Preferred stock | $ 347 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 165,000,000 | 165,000,000 |
Common stock, shares issued | 36,568,876 | 21,332,684 |
Common stock, shares outstanding | 36,568,876 | 21,332,684 |
Series A-1 junior participating preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series B 9.375% redeemable preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 665,592 |
Preferred stock, shares outstanding | 0 | 665,592 |
Series C 9.125% redeemable preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, dividend rate (as a percent) | 9.125% | 9.125% |
Preferred stock, shares authorized | 5,500,000 | 5,500,000 |
Preferred stock, shares issued | 0 | 1,405,086 |
Preferred stock, shares outstanding | 0 | 1,405,086 |
Series D 8.25% redeemable preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% |
Preferred stock, shares authorized | 35,000,000 | 35,000,000 |
Preferred stock, shares issued | 34,684,686 | 0 |
Preferred stock, shares outstanding | 34,684,686 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | ||
Gain on sale of loans, net | $ 6,317 | $ 65,294 |
Real estate services fees, net | 1,081 | 1,144 |
Gain on mortgage servicing rights, net | 194 | 34 |
Servicing fees (expense), net | 63 | (432) |
Broker fee income | 50 | |
Other | 890 | 279 |
Total revenues, net | 8,595 | 66,319 |
Expenses | ||
Personnel | 30,705 | 52,778 |
General, administrative and other | 15,698 | 16,795 |
Occupancy | 5,297 | 4,236 |
Business promotion | 4,425 | 7,395 |
Total expenses | 56,125 | 81,204 |
Operating loss | (47,530) | (14,885) |
Other income | ||
Interest income | 15,268 | 65,666 |
Interest expense | (19,137) | (63,268) |
Change in fair value of long-term debt | 2,757 | 2,098 |
Change in fair value of net trust assets, including trust REO gains | 9,248 | 6,582 |
Total other income, net | 8,136 | 11,078 |
Income (loss) before income taxes | (39,394) | (3,807) |
Income tax expense | 38 | 71 |
Net loss | (39,432) | (3,878) |
Other comprehensive loss | ||
Change in fair value of instrument specific credit risk of long-term debt | 17,213 | (2,722) |
Total comprehensive loss | $ (22,219) | $ (6,600) |
Net loss per common share: | ||
Basic (in dollars per share) | $ (1.65) | $ (0.22) |
Diluted (in dollars per share) | $ (1.65) | $ (0.22) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) $ in Thousands | Preferred Stock | Common Stock | Additional Paid-In Capital | Cumulative Dividends Declared | Accumulated Deficit | Accumulated Other Comprehensive Earnings, net of tax | Total |
Balance at Dec. 31, 2020 | $ 21 | $ 212 | $ 1,237,102 | $ (822,520) | $ (423,930) | $ 24,766 | $ 15,651 |
Balance (in shares) at Dec. 31, 2020 | 2,070,678 | 21,238,191 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of restricted stock units | $ 1 | 1 | |||||
Issuance of restricted stock units (in shares) | 94,493 | ||||||
Stock based compensation | 884 | 884 | |||||
Other comprehensive earnings (loss) | (2,722) | (2,722) | |||||
Net loss | (3,878) | (3,878) | |||||
Balance at Dec. 31, 2021 | $ 21 | $ 213 | 1,237,986 | (822,520) | (427,808) | 22,044 | 9,936 |
Balance (in shares) at Dec. 31, 2021 | 2,070,678 | 21,332,684 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of restricted stock units | $ 2 | 2 | |||||
Issuance of restricted stock units (in shares) | 155,080 | ||||||
Issuance of deferred stock units (in shares) | 15,000 | ||||||
Stock based compensation | 678 | 678 | |||||
Retirement of Preferred Series B and C | $ (21) | (21) | |||||
Retirement of Preferred Series B and C (in shares) | (2,070,678) | ||||||
Issuance of Preferred Series D | $ 347 | (561) | (214) | ||||
Issuance of Preferred Series D (in shares) | 34,684,686 | ||||||
Issuance of Stock | $ 151 | (140) | 11 | ||||
Issuance of Stock (in shares) | 15,066,112 | ||||||
Issuance of Warrants | 224 | 224 | |||||
Other comprehensive earnings (loss) | 17,213 | 17,213 | |||||
Net loss | (39,432) | (39,432) | |||||
Balance at Dec. 31, 2022 | $ 347 | $ 366 | $ 1,238,187 | $ (822,520) | $ (467,240) | $ 39,257 | $ (11,603) |
Balance (in shares) at Dec. 31, 2022 | 34,684,686 | 36,568,876 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (39,432) | $ (3,878) |
Gain on sale of mortgage servicing rights | (264) | (160) |
Change in fair value of mortgage servicing rights | 70 | 126 |
Gain on sale of mortgage loans | (20,539) | (66,086) |
Change in fair value of mortgage loans held-for-sale | 8,802 | (3,395) |
Change in fair value of derivatives lending, net | 3,003 | 4,076 |
Provision for repurchases | 2,417 | 111 |
Origination of mortgage loans held-for-sale | (693,702) | (2,903,454) |
Sale and principal reduction on mortgage loans held-for-sale | 1,000,818 | 2,828,344 |
Gain from trust REO | (111) | |
Change in fair value of net trust assets, excluding trust REO | (9,248) | (6,471) |
Change in fair value of long-term debt | (2,757) | (2,098) |
Accretion of interest income and expense | 6,732 | 50,751 |
Stock-based compensation | 678 | 884 |
Impairment of ROU asset | 123 | |
Loss on disposal of premises and equipment | 99 | |
Net change in other assets | 7,221 | 2,307 |
Net change in other liabilities | (14,353) | (5,559) |
Net cash provided by (used in) operating activities | 249,569 | (104,514) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Net change in securitized mortgage collateral | 72,889 | 592,545 |
Proceeds from transfer of trust assets and liabilities | 37,500 | |
Proceeds from the sale of mortgage servicing rights | 725 | 160 |
Investment in corporate-owned life insurance | (831) | (129) |
Sale (purchase) of premises and equipment | 99 | (298) |
Proceeds from the sale of trust REO | 7,703 | |
Net cash provided by investing activities | 110,382 | 599,981 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repayment of warehouse borrowings | (920,967) | (2,640,818) |
Borrowings under warehouse agreements | 639,050 | 2,774,425 |
Repayment of securitized mortgage borrowings | (78,818) | (654,073) |
Net change in liabilities related to corporate-owned life insurance | 574 | 458 |
Repayment of convertible notes | (5,000) | |
Issuance of restricted stock | 2 | 1 |
Net cash used in financing activities | (365,159) | (520,007) |
Net change in cash, cash equivalents and restricted cash | (5,208) | (24,540) |
Cash, cash equivalents and restricted cash at beginning of year | 35,212 | 59,752 |
Cash, cash equivalents and restricted cash at end of year | 30,004 | 35,212 |
SUPPLEMENTARY INFORMATION | ||
Interest paid | 11,917 | 25,719 |
Taxes paid, net | (7) | (41) |
NON-CASH TRANSACTIONS | ||
Transfer of securitized mortgage collateral to trust REO | 7,976 | |
Transfer and deconsolidation of trust assets | 1,543,608 | |
Transfer and deconsolidation of trust liabilities | (1,543,608) | |
Mortgage servicing rights retained from issuance of mortgage-backed securities and loan sales | $ 46 | $ 536 |
Summary of Business and Financi
Summary of Business and Financial Statement Presentation including Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Business and Financial Statement Presentation including Significant Accounting Policies | |
Summary of Business and Financial Statement Presentation including Significant Accounting Policies | IMPAC MORTGAGE HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data or as otherwise indicated) Note 1.—Summary of Business and Financial Statement Presentation including Significant Accounting Policies Business Summary Impac Mortgage Holdings, Inc. (the Company or IMH) is a financial services company incorporated in Maryland with the following direct and indirect wholly-owned operating subsidiaries: Integrated Real Estate Service Corporation (IRES), Impac Mortgage Corp. (IMC), IMH Assets Corp. (IMH Assets), Impac Funding Corporation (IFC) and Copperfield Capital Corporation (CCC). The Company’s operations include the mortgage lending operations conducted by IMC, real estate services conducted by IRES and CCC and the long-term mortgage portfolio (residual interests in securitizations reflected as securitized mortgage trust assets and liabilities on the consolidated balance sheets) conducted by IMH Assets prior to the sale in the first quarter of 2022. The long-term mortgage portfolio was deconsolidated in March 2022 as the Company sold its residual interests in the consolidated securitized mortgage trusts (see Note. 6—Securitized Mortgage Trusts). IMC’s mortgage lending operations include the activities of its division, CashCall Mortgage (CCM). On October 20, 2022, the Company received the requisite stockholder consents on the Series B Preferred stock and Series C Preferred stock exchange offers (Exchange Offers), which provided for the exchange and subsequent redemption of all outstanding Series B Preferred and Series C Preferred stock, liquidation preference and cumulative dividends in arrears for common stock, new Series D Preferred stock and, in the case of Series C Preferred stock, warrants to purchase common stock. For further description of the Exchange Offers, see Note 8.—Redeemable Preferred Stock. Liquidity The Company’s liquidity reflects its ability to meet its current obligations (including its operating expenses and, when applicable, the retirement of debt and margin calls relating to hedging instruments and warehouse lines), fund new originations and purchases, meet servicing and master servicing requirements and make investments as they are identified. The Company has experienced recurring losses from operations dating back to 2017. During the year ended December 31, 2022, the Company incurred a net loss of $39.4 million and has an accumulated deficit of $11.6 million as of December 31, 2022. As of December 31, 2022, the Company has unrestricted cash and cash equivalents of $25.9 million, $9.4 million in unencumbered loans and uncommitted capacity under its warehouse lines of $41.0 million ( $25.0 million of which was not renewed at expiration in December 2022), of which $3.6 million was outstanding as of December 31, 2022. In the first quarter of 2023, as part of the Coronavirus Aid, Relief, and Economic Security Act of 2020 (CARES), the Company filed for $7.3 million of employee retention credit, which is expected to be received by the end of 2023. As part of the Company’s expense management assessment, a number of initiatives were undertaken during the second half of 2022 and into the first quarter of 2023 to make its best efforts that the Company will continue as a going concern for a period of 12 months from the date of this filing, that are expected to significantly reduce the Company’s expense run rate. In December 2022, the estimated base rent, common area maintenance (CAM) charges, storage, parking, and any other miscellaneous charges related to the Company’s former corporate office that would have been payable during the final 20 months of the original lease term would have been approximately $8.8 million. The Company was able to terminate such lease with a payment of $3.0 million. In January 2023, the Company entered into a new lease for corporate office space. The new lease term runs through July 31, 2025, for which rent and CAM charges will total approximately $800 thousand over the full term of the lease, resulting in significant savings (See Note 13.—Commitments and Contingencies – Lease Commitments). Also in line with the Company’s expense management strategies, the retail consumer direct channel CCM was repositioned to be a mortgage broker rather than a direct lender beginning at the end of 2022 and continuing into 2023. The broker fulfillment model has a reduced expense load associated with personnel, operational and technology support, and reduced marketing needs due to organic lead volume generated by the CCM brand. The broker fulfillment model also supports a broader product offering to CCM consumers, allowing the Company to move away from the expense and complexity of managing multiple lending products with support from several departments. This more cost-effective origination strategy is essential to managing the overall monthly expense load of the Company while also driving revenue across a broad spectrum of product offerings to consumers. Additionally, the continued volatility experienced with the Non-QM market associated with liquidity, product offerings, expansive credit to meet consumer demand, and rising rates have all proven to be a considerable hindrance to maintaining a profitable channel in the Wholesale space. With the belief that the market conditions and projections will not improve in the near term, in the first quarter of 2023, the Company decided to wind down operations within its wholesale channel until market conditions improve. Although the Company currently forecasts adequate liquidity to operate its business for the next 12 months, repayment of $5.0 million in principal of Convertible Notes due May 9, 2023, with no additional added capital or liquidity, will result in a more limited amount of liquidity to operate the business. The Company may seek to raise secured or unsecured debt, raise equity or working capital, retire or restructure the Convertible Notes (which pay down $5.0 million each May 9th for the next three years ), pursue actions to reorganize the capital structure or redeploy the liquidity to other corporate finance and strategic opportunities. While the Company intends to raise additional capital within the next year to support its operations, it cannot provide any assurance that its capital raise efforts will be successful. Financial Statement Presentation and Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements of IMH and its subsidiaries (as defined above) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). All significant inter-company balances and transactions have been eliminated in consolidation. In addition, certain immaterial amounts in the prior periods’ consolidated financial statements have been reclassified to conform to the current year presentation. Management has made a number of material estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. Additionally, other items affected by such estimates and assumptions include the valuation of trust assets and trust liabilities, contingencies, the estimated obligation of repurchase liabilities related to sold loans, the valuation of long-term debt, mortgage servicing rights (MSRs), mortgage loans held-for-sale (LHFS) and derivative instruments, including interest rate lock commitments (IRLCs). Actual results could differ from those estimates and assumptions. Principles of Consolidation The accompanying consolidated financial statements include accounts of IMH and its wholly-owned subsidiaries. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist in entities, such as variable interest entities (VIEs), through arrangements that do not involve voting interests. The VIE framework requires a variable interest holder (counterparty to a VIE) to consolidate the VIE if that party has the power to direct activities of the VIE that most significantly impact the entity’s economic performance, will absorb a majority of the expected losses of the VIE, will receive a majority of the residual returns of the VIE, or both, and directs the significant activities of the entity. This party is considered the primary beneficiary of the entity. The determination of whether the Company meets the criteria to be considered the primary beneficiary of a VIE requires an evaluation of all transactions (such as investments, liquidity commitments, derivatives and fee arrangements) with the entity. The assessment of whether or not the Company is the primary beneficiary of the VIE is performed on an ongoing basis. Fair Value and the Fair Value Option Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same—to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability). The fair value option permits entities to choose, at specified election dates, to measure eligible financial assets and financial liabilities at fair value. The decision to elect the fair value option is applied on an instrument by instrument basis, is irrevocable unless a new election date occurs, and is applied to an entire instrument. The Company has elected the fair value option for MSRs, mortgage LHFS, long-term debt and its consolidated non-recourse securitizations (securitized mortgage collateral and securitized mortgage borrowings), prior to the sale in the first quarter of 2022. Elections were made to mitigate income statement volatility caused by differences in the measurement basis of elected instruments. Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash and highly liquid investments with maturities of three months or less at the date of acquisition. The carrying amount of cash and cash equivalents approximates fair value. Cash balances that have restrictions as to the Company’s ability to withdraw funds are considered restricted cash. At December 31, 2022 and 2021, restricted cash totaled $4.1 million and $5.7 million, respectively. The restricted cash is primarily collateral against letter of credit financing associated with corporate-owned life insurance (See Note 13.—Commitments and Contingencies) as well as cash required in conjunction with the terms of the Company’s warehouse borrowing agreements. In accordance with the terms of the Master Repurchase Agreements related to the warehouse borrowings, the Company is required to maintain cash balances with the lender as additional collateral for the borrowings (See Note 5.—Debt). Mortgage Loans Held-for-Sale Mortgage LHFS are accounted for using the fair value option, with changes in fair value recorded in gain on sale of loans, net in the accompanying consolidated statements of operations and comprehensive loss. In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825, Financial Instruments , loan origination fees and expenses are recognized in earnings as incurred and not deferred. Revenue derived from the Company’s mortgage lending activities includes loan fees collected at the time of origination and gain or loss from the sale of LHFS. Loan fees consist of fee income earned on all loan originations, including loans closed and held-for-sale. Loan fees are recognized as earned and consist of amounts collected for application and underwriting fees, fees on cancelled loans and discount points. The related direct loan origination costs are recognized when incurred and consists of broker fees and commissions. Gain or loss from the sale and mark-to-market adjustments of LHFS includes both realized and unrealized gains and losses and are included in gain on sale of loans, net in the accompanying consolidated statements of operations and comprehensive loss. The valuation of LHFS approximates a whole-loan price, which includes the value of the related MSRs. The Company primarily sells its LHFS to investors and government sponsored entities (GSEs). 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 a realized 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 on loans is recorded as income when earned and deemed collectible. LHFS are placed on nonaccrual 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 nonaccrual 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. Mortgage Servicing Rights The Company accounts for mortgage loan sales in accordance with FASB ASC 860, Transfers and Servicing . Upon sale of mortgage loans on a servicing-retained basis, the LHFS are removed from the consolidated balance sheets and MSRs are recorded as an asset for servicing rights retained. The Company elects to measure MSRs at fair value as prescribed by FASB ASC 860-50-35, and as such, servicing assets or liabilities are valued using discounted cash flow modeling techniques using assumptions regarding future net servicing cash flow, including prepayment rates, discount rates, servicing cost and other factors. Changes in estimated fair value are reported in the accompanying consolidated statements of operations and comprehensive loss within gain on mortgage servicing rights, net. When the Company sells MSRs, the Company records a gain or loss on such sale based on the selling price of the MSRs less the carrying value and transaction costs. Gains and losses are reported in the accompanying consolidated statements of operations and comprehensive loss within gain on mortgage servicing rights, net. Consolidated Non-recourse Securitizations In March 2022, the Company and its subsidiaries (the Sellers), entered into a Purchase, Sale and Assignment Agreement (Sale Agreement) pursuant to which the Sellers sold certain residual interest certificates, and assigned certain optional termination and loan purchase rights, owned by the Sellers relating to 37 securitizations that closed between 2000 and 2007 (the Securitizations). As a result of the sale, in accordance with FASB ASC 810-10-25, the Company deconsolidated the securitized mortgage trust assets and liabilities as of the sale date as it was no longer the primary beneficiary of the consolidated securitization trusts. The Company shall remain the master servicer with respect to all of the securitizations until such time that the deals are collapsed or payoff. For a description of the sale, see Note 6.– Securitized Mortgage Trusts. Securitized Mortgage Collateral The Company’s long-term mortgage portfolio primarily included adjustable rate and, to a lesser extent, fixed rate non-conforming mortgages and commercial mortgages that were acquired and originated by the Company’s mortgage and commercial operations prior to 2008. Historically, the Company securitized mortgages in the form of collateralized mortgage obligations (CMO) or real estate mortgage investment conduits (REMICs). These securitizations were evaluated for consolidation based on the provisions of FASB ASC 810-10-25. Amounts consolidated were included in trust assets and liabilities as securitized mortgage collateral, real estate owned (REO) and securitized mortgage borrowings in the accompanying consolidated balance sheets. The Company also retained the master servicing rights associated with these securitizations which pays the Company approximately 3 basis points on the outstanding unpaid principal balance (UPB) of each securitization trust. Prior to the sale, the retention of the master servicing rights or the retained economic subordinated residual interests provided the Company with clean up call rights on these securitizations. The Company accounted for securitized mortgage collateral at fair value, with changes in fair value during the period reflected in earnings. Fair value measurements were based on the Company’s estimated cash flow models, which incorporated assumptions, inputs of other market participants and quoted prices for the underlying bonds. The Company’s assumptions included its expectations of inputs that other market participants would use. These assumptions included judgments about the underlying collateral, prepayment speeds, credit losses, investor yield requirements, forward interest rates and certain other factors. Interest income on securitized mortgage collateral was recorded using the effective yield for the period based on the previous quarter-end’s estimated fair value. Securitized mortgage collateral is generally not placed on nonaccrual status as the servicer advances the interest payments to the trust regardless of the delinquency status of the underlying mortgage loan, until it becomes apparent to the servicer that the advance is not collectible. Real Estate Owned Real estate owned on the consolidated balance sheets were primarily assets within the securitized trusts but recorded as a separate asset for accounting and reporting purposes and were within the long-term mortgage portfolio. REO, which consisted of residential real estate acquired in satisfaction of loans, was carried at net realizable value, which included the estimated fair value of the residential real estate less estimated selling and holding costs. Adjustments to the loan carrying value required at the time of foreclosure affect the carrying amount of REO. Subsequent write-downs in the net realizable value of REO were included in change in fair value of net trust assets, including trust REO gains in the consolidated statements of operations and comprehensive loss. Securitized Mortgage Borrowings The Company recorded securitized mortgage borrowings in the accompanying consolidated balance sheets for the consolidated CMO and REMIC securitized trusts within the long-term mortgage portfolio. The debt from each issuance of a securitized mortgage borrowing was payable from the principal and interest payments on the underlying mortgages collateralizing such debt, as well as the proceeds from liquidations of REO. If the principal and interest payments were insufficient to repay the debt, the shortfall was allocated first to the residual interest holders (generally owned by the Company) then, if necessary, to the certificate holders (e.g. third party investors in the securitized mortgage borrowings) in accordance with the specific terms of the various respective indentures. Securitized mortgage borrowings typically were structured as one-month London Interbank Offered Rate (LIBOR) “floaters” and fixed rate securities with interest payable to certificate holders monthly. The maturity of each class of securitized mortgage borrowing was directly affected by the amount of net interest spread, overcollateralization and the rate of principal prepayments and defaults on the related securitized mortgage collateral. The actual maturity of any class of a securitized mortgage borrowing could occur later than the stated maturities of the underlying mortgages. When the Company issued securitized mortgage borrowings, the Company generally sought an investment grade rating for the Company’s securitized mortgages by nationally recognized rating agencies. To secure such ratings, it was often necessary to incorporate certain structural features that provided for credit enhancement. This generally included the pledge of collateral in excess of the principal amount of the securities to be issued, a bond guaranty insurance policy for some or all of the issued securities, or additional forms of mortgage insurance. These securitization transactions were non-recourse to the Company and the total loss exposure was limited to the Company’s initial net economic investment in each trust, which was referred to as a residual interest. The Company accounted for securitized mortgage borrowings at fair value, with changes in fair value during the period reflected in earnings. Fair value measurements were based on the Company’s estimated cash flow models, which incorporated assumptions, inputs of other market participants and quoted prices for the underlying bonds. The Company’s assumptions included its expectations of inputs that other market participants would use. These assumptions included judgments about the underlying collateral, prepayment speeds, credit losses, investor yield requirements, forward interest rates and certain other factors. Interest expense on securitized mortgage borrowings was recorded quarterly using the effective yield for the period based on the previous quarter-end’s estimated fair value. Leases The Company has two operating leases for office space expiring at various dates through 2025 and one financing lease which concludes in 2023. During the fourth quarter of 2022, the Company entered into a lease termination agreement for the Company’s primary executive, administrative and operations offices. For a description of the lease termination agreement, see Note 13.– Commitments and Contingencies - Lease Commitments . The Company determines if a contract is a lease at the inception of the arrangement and reviews all options to extend, terminate, or purchase its right of use (ROU) assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. Regarding the discount rate, Accounting Standards Update (ASU) 2016-02, “ Leases (Topic 842) ”, requires the use of the rate implicit in the lease whenever this rate is readily determinable. When the Company cannot readily determine the rate implicit in the lease, the Company determines its incremental borrowing rate by using the rate of interest that it would have to pay to borrow on a collateralized basis over a similar term. As a practical expedient permitted under ASC 842, the Company elected to account for the lease and non-lease components as a single lease component for all leases of which it is the lessee. Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets and lease expense for these leases is recognized on a straight-line basis over the lease term. Derivative Instruments In accordance with FASB ASC 815-10 Derivatives and Hedging—Overview , the Company records all derivative instruments at fair value. The Company has accounted for all its derivatives as non-designated hedge instruments or free-standing derivatives. The mortgage lending operation enters into IRLCs with consumers to originate mortgage loans at a specified interest rate. These IRLCs are accounted for as derivative instruments and reported at fair value. The concept of fair value relating to IRLCs is no different than fair value for any other financial asset or liability: fair value is the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. Because IRLCs do not trade in the market, the Company determines the estimated fair value based on expectations of what an investor would pay to acquire the Company’s IRLCs, which utilizes current market information for secondary market prices for underlying loans and estimated servicing value with similar coupons, maturities and credit quality, subject to the anticipated loan funding probability (pull-through rate). This value is adjusted for other costs that would be required by a market participant acquiring the IRLCs. The fair value of IRLCs is subject to change primarily due to changes in interest rates and the estimated pull-through rate. The Company reports IRLCs within other assets and other liabilities at fair value in the accompanying consolidated balance sheets with changes in fair value being recorded in the accompanying consolidated statements of operations and comprehensive loss within gain on sale of loans, net. The Company hedges the changes in fair value associated with changes in interest rates related to IRLCs and uncommitted LHFS by using forward delivery commitments on mortgage-backed securities (MBS), including Federal National Mortgage Association (Fannie Mae or FNMA), Government National Mortgage Association (Ginnie Mae or GNMA) MBS known as to-be-announced mortgage-backed securities (TBA MBS), interest rate swap futures (swap futures) and forward delivery commitments on whole loans. The TBA MBS, forward loan commitments and swap futures (collectively the Hedging Instruments) are used to fix the forward sales price that will be realized upon the sale of mortgage loans into the secondary market and are accounted for as derivative instruments. The fair value of these Hedging Instruments are subject to change primarily due to changes in interest rates. The Company reports Hedging Instruments within other assets and other liabilities in the accompanying consolidated balance sheets at fair value with changes in fair value being recorded in the accompanying consolidated statements of operations and comprehensive loss within gain on sale of loans, net. The fair value of IRLCs and Hedging Instruments are represented as derivative assets, lending, net and derivative liabilities, lending, net in Note 9.—Fair Value of Financial Instruments . Long-term Debt Long-term debt (junior subordinated notes) is reported at fair value. These securities are measured based upon an analysis prepared by management, which considers the Company’s own credit risk and expected cash flow analysis in 2022 and discounted cash flow analysis in 2021. With the adoption of FASB ASU 2016-01 in 2018, which applies when the Company elects the fair value election on its own debt, the Company effectively bifurcates the market and instrument specific credit risk components of changes in long-term debt. The market portion continues to be a component of net loss as the change in fair value of long-term debt, but the instrument specific credit risk portion is a component of accumulated other comprehensive loss in the accompanying consolidated statements of operations and comprehensive loss. Repurchase Reserve The Company sells mortgage loans in the secondary market, including U.S. GSEs, and issues MBS through Ginnie Mae and Fannie Mae. When the Company sells or issues securities, it makes customary representations and warranties to the purchasers about various characteristics of each loan such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, the Company may be required to either repurchase the mortgage loans with the identified defects or indemnify the investor or insurer for any loss. In addition, the Company may be required to repurchase loans as a result of borrower fraud or if a payment default occurs on a mortgage loan shortly after its sale. The Company’s loss may be reduced by proceeds from the sale or liquidation of the repurchased loan. Also, the Company’s loss may be reduced by any recourse it has to correspondent lenders that, in turn, had sold such mortgage loans to the Company and breached similar or other representations and warranties. In such event, the Company has the right to seek a recovery of related repurchase losses from that correspondent lender. The Company records a provision for losses relating to such representations and warranties as part of its loan sale transactions. The method used to estimate the liability for representations and warranties is a function of the representations and warranties given and considers a combination of factors, including, but not limited to, estimated future defaults and loan repurchase rates and the potential severity of loss in the event of defaults including any loss on sale or liquidation of the repurchased loan and the probability of reimbursement by the correspondent loan seller. The Company establishes a liability at the time loans are sold and continually updates its estimated repurchase liability. The level of the repurchase liability for representations and warranties is difficult to estimate and requires considerable management judgment. The level of mortgage loan repurchase losses is dependent on economic factors, investor demands for loan repurchases and other external conditions that may change over the lives of the underlying loans. Revenue Recognition for Fees from Services The Company follows FASB ASC 606, Revenue Recognition , which provides guidance on the application of GAAP to selected revenue recognition issues related to the Company’s real estate services fees. Under FASB ASC 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. The Company’s primary sources of revenue are derived from financial instruments that are not within the scope of FASB ASC 606. The Company has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the consolidated statements of operations and comprehensive loss, was not necessary. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, the Company has made no significant judgments in applying the revenue guidance prescribed in ASC 606 that affect the determination of the amount and timing of revenue from contracts with customers. The revenues from these services are recognized in income in the period when services are rendered and collectability is reasonably certain. Advertising Costs Advertising costs are expensed as incurred and are included in business promotion expense in the accompanying consolidated statements of operations and comprehensive loss. For the years ended December 31, 2022 and 2021, business promotion expense was $4.4 million and $7.4 million, respectively. Equity-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC 718 Compensation—Stock Compensation . The Company uses the grant-date fair value of equity awards to determine the compensation cost associated with each award. Grant-date fair value is determined using the Black-Scholes pricing model and assumptions noted in Note 14.—Share Based Payments and Employee Benefit Plans, adjusted for unique characteristics of the specific awards. Compensation cost for service-based equity awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. FASB ASC 718 requires forfeitures to be estimated at the time of grant and prospectively revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock-based compensation expense is recorded net of estimated forfeitures for the years ended December 31, 2022 and 2021, such that the expense was recorded only for thos |
Mortgage Loans Held-for-Sale
Mortgage Loans Held-for-Sale | 12 Months Ended |
Dec. 31, 2022 | |
Mortgage Loans Held-for-Sale | |
Mortgage Loans Held-for-Sale | Note 2.—Mortgage Loans Held-for-Sale A summary of the UPB of mortgage LHFS by type is presented below: December 31, December 31, 2022 2021 Government (1) $ — $ 6,886 Conventional (2) 2,506 62,759 Jumbo & Non-qualified mortgages (NonQM) 11,658 231,142 Fair value adjustment (3) (1,112) 7,690 Total mortgage loans held-for-sale $ 13,052 $ 308,477 (1) Includes all government-insured loans including Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA). (2) Includes loans eligible for sale to Fannie Mae and Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC). (3) Changes in fair value are included in gain on sale of loans, net on the accompanying consolidated statements of operations and comprehensive loss. As of December 31, 2022, there was one mortgage LHFS with a UPB of $326 thousand that was in nonaccrual status as the loan was in foreclosure. The carrying value of this nonaccrual loan as of December 31, 2022 was $270 thousand. As of December 31, 2021, the Company had no mortgage LHFS that were 90 days or more delinquent. Gain on sale of loans, net in the consolidated statements of operations and comprehensive loss is comprised of the following for the years ended December 31, 2022 and 2021: For the Year Ended December 31, 2022 2021 Gain on sale of mortgage loans $ 18,825 $ 81,362 Premium from servicing retained loan sales 46 536 Unrealized loss from derivative financial instruments (3,003) (4,076) Gain from derivative financial instruments 6,221 1,934 Mark to market (loss) gain on LHFS (8,802) 3,395 Direct origination expenses, net (4,553) (17,746) Provision for repurchases (2,417) (111) Gain on sale of loans, net $ 6,317 $ 65,294 |
Mortgage Servicing Rights
Mortgage Servicing Rights | 12 Months Ended |
Dec. 31, 2022 | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | Note 3.—Mortgage Servicing Rights The Company selectively retains MSRs from its sales and securitization of certain mortgage loans or as a result of purchase transactions. MSRs are reported at fair value based on the expected income derived from the net projected cash flows associated with the servicing contracts. The Company receives servicing fees, less subservicing costs, on the UPB of the underlying mortgage loans. The servicing fees are collected from the monthly payments made by the mortgagors, or if delinquent, when the underlying real estate is foreclosed upon and liquidated. The Company may receive other remuneration from rights to various mortgagor-contracted fees, such as late charges, collateral reconveyance charges and nonsufficient fund fees, and the Company is generally entitled to retain the interest earned on funds held pending remittance (or float) related to its collection of mortgagor principal, interest, tax and insurance payments. In December 2022, the Company sold $68.1 million in UPB of its government insured MSRs for approximately $725 thousand, receiving $508 thousand in proceeds upon sale, with the remaining proceeds received in 2023 upon transfer of the servicing all trailing documents. The following table summarizes the activity of MSRs for the years ended December 31, 2022 and 2021: December 31, December 31, 2022 2021 Balance at beginning of year $ 749 $ 339 Additions from servicing retained loan sales 46 536 Reductions from bulk sales (725) — Changes in fair value (1) (70) (126) Fair value of MSRs at end of period $ — $ 749 (1) Changes in fair value are included within gain on mortgage servicing rights, net in the accompanying consolidated statements of operations and comprehensive loss. At December 31, 2022 and 2021, the UPB of the mortgage servicing portfolio was comprised of the following: December 31, December 31, 2022 2021 Government insured $ — $ 71,841 Conventional — — Total loans serviced $ — $ 71,841 The table below illustrates hypothetical changes in the fair value of MSRs, caused by assumed immediate changes to key assumptions that are used to determine fair value. See Note 9.—Fair Value of Financial Instruments for a description of the key assumptions used to determine the fair value of MSRs. December 31, December 31, Mortgage Servicing Rights Sensitivity Analysis 2022 2021 Fair value of MSRs $ — $ 749 Prepayment Speed: Decrease in fair value from 10% adverse change — (24) Decrease in fair value from 20% adverse change — (48) Decrease in fair value from 30% adverse change — (70) Discount Rate: Decrease in fair value from 10% adverse change — (31) Decrease in fair value from 20% adverse change — (59) Decrease in fair value from 30% adverse change — (85) Sensitivities are hypothetical changes in fair value and cannot be extrapolated because the relationship of changes in assumptions to changes in fair value may not be linear. Also, the effect of a variation in a particular assumption is calculated without changing any other assumption, whereas a change in one factor may result in changes to another. Accordingly, no assurance can be given that actual results would be consistent with the results of these estimates. As a result, actual future changes in MSR values may differ significantly from those displayed above. Gain on mortgage servicing rights, net is comprised of the following for the years ended December 31, 2022 and 2021: For the Year Ended December 31, 2022 2021 Change in fair value of mortgage servicing rights $ (70) $ (126) Gain on sale of mortgage servicing rights 264 160 Gain on mortgage servicing rights, net $ 194 $ 34 Servicing fees (expense), net is comprised of the following for the years ended December 31, 2022 and 2021: For the Year Ended December 31, 2022 2021 Contractual servicing fees $ 251 $ 193 Subservicing and other costs (188) (625) Servicing fees (expense), net $ 63 $ (432) |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets | |
Other Assets | Note 4.—Other Assets Other assets consisted of the following: December 31, December 31, 2022 2021 Corporate-owned life insurance (See Note 13) $ 11,619 $ 10,788 Prepaid expenses 2,410 3,460 Right of use asset (See Note 13) 1,248 10,209 Accounts receivable, net 916 4,770 Servicing advances 735 565 Premises and equipment, net 220 636 Accrued interest receivable 75 625 Derivative assets – lending (See Note 7) 52 3,111 Other — 1,102 Loans eligible for repurchase from Ginnie Mae — 337 Total other assets $ 17,275 $ 35,603 Accounts Receivable, net Accounts receivable are primarily loan sales that have not settled, and fees earned for real estate services rendered, generally collected one month in arrears. Accounts receivable are stated at their carrying value as of December 31, 2022, and net of $50 thousand reserve for doubtful accounts as of December 31, 2021. Servicing Advances The Company is required to advance certain amounts to meet its contractual loan servicing requirements. The Company advances principal, interest, property taxes and insurance for borrowers that have insufficient escrow accounts, plus any other costs to preserve the properties. Also, the Company will advance funds to maintain, repair and market foreclosed real estate properties. The Company is entitled to recover advances from the borrowers for reinstated and performing loans or from proceeds of liquidated properties. Loans Eligible for Repurchase from Ginnie Mae The Company sells loans in Ginnie Mae guaranteed MBS by pooling eligible loans through a pool custodian and assigning rights to the loans to Ginnie Mae. When these Ginnie Mae loans are initially pooled and securitized, the Company meets the criteria for sale treatment and de-recognizes the loans. The terms of the Ginnie Mae MBS program allow, but do not require, the Company to repurchase mortgage loans when the borrower has made no payments for three consecutive months. When the Company has the unconditional right, as servicer, to repurchase Ginnie Mae pool loans it has previously sold and are more than 90 days past due, and the repurchase will provide a “more than trivial benefit”, the Company then re-recognizes the loans on its consolidated balance sheets in other assets, at their UPB and records a corresponding liability in other liabilities in the consolidated balance sheets. At December 31, 2022, there were no loans eligible for repurchase while there were $337 thousand in UPB of loans eligible for repurchase from Ginnie Mae at December 31, 2021. As part of the Company’s repurchase reserve, the Company records a repurchase provision to provide for estimated losses from the sale or securitization of all mortgage loans, including these loans. In conjunction with the sale of the government insured MSRs in December 2022, loans eligible for repurchase from Ginnie Mae are no longer included on the consolidated balance sheets for 2022. Premises and Equipment, net December 31, 2022 2021 Premises and equipment $ 6,209 $ 6,391 Less: Accumulated depreciation (5,989) (5,755) Total premises and equipment, net $ 220 $ 636 The Company recognized $317 thousand and $493 thousand of depreciation expense within general, administrative and other expense in the accompanying consolidated statements of operations and comprehensive loss, for the years ended December 31, 2022 and 2021, respectively. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt | |
Debt | Note 5.—Debt The following table shows contractual future debt maturities as of December 31, 2022: Payments Due by Period Less Than One to Three to More Than Total One Year Three Years Five Years Five Years Warehouse borrowings $ 3,622 $ 3,622 $ — $ — $ — Convertible notes 15,000 5,000 10,000 — — Long-term debt 62,000 — — — 62,000 Total debt obligations $ 80,622 $ 8,622 $ 10,000 $ — $ 62,000 Warehouse Borrowings The Company, through its subsidiaries, enters into Master Repurchase Agreements with lenders providing warehouse facilities. The warehouse facilities are used to fund, and are secured by, residential mortgage loans that are held for sale. The warehouse and revolving lines of credit are repaid using proceeds from the sale of loans. The base interest rates on the Company’s warehouse lines bear interest at 1-month LIBOR plus a margin or note rate minus a margin. Some of the lines carry additional fees in the form of annual facility fees charged on the total line amount, commitment fees charged on the committed portion of the line and non-usage fees charged when monthly usage falls below a certain utilization percentage. The Company’s warehouse line is scheduled to expire October 20, 2023 under a one year term and the line is subject to renewal based on an annual credit review conducted by the lender. The base interest rates for all warehouse lines of credit are subject to increase based upon the characteristics of the underlying loans collateralizing the lines of credit, including, but not limited to product type and number of days held for sale. Certain warehouse line lenders require the Company, at all times, to maintain cash accounts with minimum required balances. As of December 31, 2022 and 2021, there was none and $1.3 million, respectively, held in these accounts which are recorded as a component of restricted cash on the consolidated balance sheets. Under the terms of these warehouse lines, the Company is required to maintain various financial and other covenants. At December 31, 2022, the Company was not in compliance with certain financial covenants from its lenders and received the necessary waivers. The following table presents certain information on warehouse borrowings for the periods indicated: Maximum Balance Outstanding at Allowable Borrowing December 31, December 31, Advance Rate Capacity 2022 2021 Rates (%) Range Maturity Date Short-term borrowings: Repurchase agreement 1 (1) $ — $ — $ 30,009 90 - 98 1ML + 2.00 - 2.25% May 24, 2022 Repurchase agreement 2 (2) — — 153,006 100 1ML + 1.75% September 13, 2022 Repurchase agreement 3 (3) 16,000 98 56,794 100 Note Rate - 0.375% October 20, 2023 Repurchase agreement 4 (4) 25,000 3,524 45,730 99 Note Rate - 0.50 - 0.75% December 31, 2022 Total warehouse borrowings $ 41,000 $ 3,622 $ 285,539 _________________________ (1) Repurchase agreement 1 was not renewed. (2) Repurchase agreement 2 was not renewed. (3) In October 2022, the Company entered into an agreement for a $1.0 million committed line in addition to the uncommitted line. In November 2022, the uncommitted portion of the line was renewed and reduced to $15.0 million for a total line size of $16.0 million. (4) At December 31, 2022, the line expired, was not renewed and paid off with the loan sales in January 2023. The following table presents certain information on warehouse borrowings for the periods indicated: For the Year Ended December 31, 2022 2021 Maximum outstanding balance during the year $ 269,950 $ 336,648 Average balance outstanding for the year 74,435 191,794 UPB of underlying collateral (mortgage loans) 4,577 296,841 Weighted average interest rate for period 4.19 % 3.41 % Convertible Notes In May 2015, the Company issued $25.0 million Convertible Promissory Notes (Notes) to purchasers, some of which are related parties. The Notes were originally due to mature on or before May 9, 2020 and accrued interest at a rate of 7.5% per annum, to be paid quarterly. Noteholders may convert all or a portion of the outstanding principal amount of the Notes into shares of the Company’s common stock (Conversion Shares) at a rate of $21.50 per share, subject to adjustment for stock splits and dividends (Conversion Price). The Company has the right to convert the entire outstanding principal of the Notes into Conversion Shares at the Conversion Price if the market price per share of the common stock, as measured by the average volume-weighted closing stock price per share of the common stock on the NYSE AMERICAN (or any other U.S. national securities exchange then serving as the principal such exchange on which the shares of common stock are listed), reaches the level of $30.10 for any twenty ( 20 ) trading days in any period of thirty ( 30 ) consecutive trading days after the Closing Date (as defined in the Notes). Upon conversion of the Notes by the Company, the entire amount of accrued and unpaid interest (and all other amounts owing) under the Notes are immediately due and payable. To the extent the Company pays any cash dividends on its shares of common stock prior to conversion of the Notes, upon conversion of the Notes, the noteholders will also receive such dividends on an as-converted basis of the Notes less the amount of interest paid by the Company prior to such dividend. On April 15, 2020, the Company and the noteholders agreed to extend the outstanding Notes in the principal amount of $25.0 million originally issued in May 2015, at the conclusion of the original note term (First Amendment). The new Notes were issued with a six month term (November 9, 2020) and reduced the interest rate on such Notes to 7.0% per annum. In connection with the issuance of the First Amendment, the Company issued to the noteholders of the Notes, warrants to purchase up to an aggregate of 212,649 shares of the Company’s common stock at a cash exercise price of $2.97 per share. The relative fair value of the warrants were $242 thousand and recorded as debt discounts, which are accreted over the term of the warrants (October 2020), using an effective interest rate of 8.9% . The warrants are exercisable commencing on October 16, 2020 and expire on April 15, 2025. The First Amendment was accounted for as an extinguishment. On October 28, 2020, the Company and certain holders of its Notes due November 9, 2020 in the aggregate principal amount of $25.0 million agreed to extend the maturity date of the Notes upon conclusion of the term on November 9, 2020. The new notes have an 18-month term due May 9, 2022 and the Company decreased the aggregate principal amount of the Notes to $20.0 million, following the pay-down of $5.0 million in principal of the Notes on November 9, 2020 (Second Amendment). The interest rate on the Notes remains at 7.0% per annum. The Second Amendment was accounted for as an extinguishment. On April 29, 2022, the Company and holders of its Notes agreed to extend the maturity date of the Notes upon conclusion of the term on May 9, 2022. The Company decreased the aggregate principal amount of the new Notes to $15.0 million, following the pay-down of $5.0 million in principal of the Notes on May 9, 2022 (Third Amendment). The new Notes are due and payable in three equal installments of $5.0 million on each of May 9, 2023, May 9, 2024 and the stated maturity date of May 9, 2025. The interest rate on the Notes remains at 7.0% per annum. Long-term Debt The Company carries its Junior Subordinated Notes at estimated fair value as more fully described in Note 9.—Fair Value of Financial Instruments. The following table shows the remaining principal balance and fair value of Junior Subordinated Notes issued as of December 31, 2022 and 2021: December 31, 2022 2021 Junior Subordinated Notes (1) $ 62,000 $ 62,000 Fair value adjustment (2) (34,247) (15,464) Total Junior Subordinated Notes $ 27,753 $ 46,536 (1) Stated maturity of March 2034; requires quarterly interest payments at a variable rate of 3-month LIBOR plus 3.75% per annum. In June 2023, with the cessation of LIBOR, the calculation agent will use the “Board-selected benchmark replacement” as the benchmark replacement for LIBOR, which, per the Federal LIBOR Act, will be a rate identified by the Federal Reserve Board that is (a) based on SOFR and (b) adjusted based on tenor spread adjustments. At December 31, 2022, the interest rate was 8.52% . (2) For further detail on the determination of estimated fair value see Note 9.—Fair Value of Financial Instruments . |
Securitized Mortgage Trusts
Securitized Mortgage Trusts | 12 Months Ended |
Dec. 31, 2022 | |
Securitized Mortgage Trusts | |
Securitized Mortgage Trusts | Note 6.—Securitized Mortgage Trusts In March 2022, the Company and its subsidiaries (the Sellers), entered into a Purchase, Sale and Assignment Agreement (Sale Agreement) pursuant to which the Sellers sold certain residual interest certificates, and assigned certain optional termination and loan purchase rights, owned by the Sellers relating to 37 securitizations that closed between 2000 and 2007 (the Securitizations). Pursuant to the terms of the Sale Agreement, the purchaser paid the Company an aggregate cash purchase price of $37.5 million, $20.0 million of which was paid on March 16, 2022, and the remaining balance of the purchase price was paid on March 25, 2022, upon the Company’s satisfaction of certain closing and payment release provisions, including delivery of certain residual interest certificates, set forth in the Sale Agreement. For the three months ended March 31, 2022, the Company recorded a $9.2 million increase in fair value, net of $277 thousand in transaction costs related to the transfer. As a result of the sale, in accordance with FASB ASC 810-10-25, the Company deconsolidated the securitized mortgage trust assets totaling approximately $1.6 billion and trust liabilities of $1.6 billion as of the sale date as it was no longer the primary beneficiary of the consolidated securitization trusts. The Company shall remain the master servicer with respect to all of the securitizations until such time that the deals are collapsed or payoff. Securitized Mortgage Trust Assets Securitized mortgage trust assets are comprised of the following at December 31, 2022 and 2021: December 31, December 31, 2022 2021 Securitized mortgage collateral, at fair value $ — $ 1,639,251 REO, at net realizable value (NRV) — 3,479 Total securitized mortgage trust assets $ — $ 1,642,730 Securitized Mortgage Collateral Securitized mortgage collateral consisted of the following: December 31, December 31, 2022 2021 Mortgages secured by residential real estate $ — $ 1,653,749 Mortgages secured by commercial real estate — 89,801 Fair value adjustment — (104,299) Total securitized mortgage collateral, at fair value $ — $ 1,639,251 As of December 31, 2022, the Company was also a master servicer of mortgages for others of approximately $138.3 million in UPB that were primarily collateralizing REMIC securitizations, compared to $164.6 million at December 31, 2021. Related fiduciary funds are held in trust for investors in non-interest bearing accounts and are not included in the Company’s consolidated balance sheets. The Company may also be required to advance funds or cause loan servicers to advance funds to cover principal and interest payments not received from borrowers depending on the status of their mortgages. Real Estate Owned The Company’s REO consisted of the following: December 31, December 31, 2022 2021 REO $ — $ 10,335 Impairment (1) — (6,856) Ending balance $ — $ 3,479 REO inside trusts $ — $ 3,479 REO outside trusts — — Total $ — $ 3,479 (1) Impairment represents the cumulative write-downs of net realizable value subsequent to foreclosure. Securitized Mortgage Trust Liabilities Securitized mortgage trust liabilities, which are recorded at estimated fair market value as more fully described in Note 9.—Fair Value of Financial Instruments, are comprised of the following at December 31, 2022 and 2021: December 31, December 31, 2022 2021 Securitized mortgage borrowings $ — $ 1,614,862 Securitized Mortgage Borrowings – Non-recourse Selected information on securitized mortgage borrowings for the periods indicated consisted of the following (dollars in millions): Securitized mortgage borrowings outstanding as of December 31, Range of Interest Rates (%) Interest Interest Rate Rate Original Fixed Margins over Margins after Issuance Interest One-Month Contractual Year of Issuance Amount 2022 2021 Rates LIBOR (1) Call Date (2) 2002 $ 3,876.1 $ — $ 2.7 5.25 - 12.00 0.27 - 2.75 0.54 - 3.68 2003 5,966.1 — 12.9 4.34 - 12.75 0.27 - 3.00 0.54 - 4.50 2004 17,710.7 — 210.9 3.58 - 5.56 0.25 - 2.50 0.50 - 3.75 2005 13,387.7 — 1,198.2 — 0.24 - 2.90 0.48 - 4.35 2006 5,971.4 — 1,626.0 6.25 0.10 - 2.75 0.20 - 4.13 2007 3,860.5 — 882.5 — 0.06 - 2.00 0.12 - 3.00 Subtotal contractual principal balance (3) — 3,933.2 Fair value adjustment (4) — (2,318.3) Total securitized mortgage borrowings $ — $ 1,614.9 (1) One-month LIBOR was 0.10 % as of December 31, 2021. (2) Interest rate margins are generally adjusted when the unpaid principal balance is reduced to less than 10 - 20 % of the original issuance amount, or if certain other triggers are met. (3) Represents the outstanding balance in accordance with trustee reporting. (4) Fair value adjustment was inclusive of $0 and $2.2 billion in bond losses at December 31, 2022 and 2021, respectively. Change in Fair Value of Net Trust Assets, including Trust REO Gains Changes in fair value of net trust assets, including trust REO gains are comprised of the following for the years ended December 31, 2022 and 2021: For the Year Ended December 31, 2022 2021 Change in fair value of net trust assets, excluding REO $ 9,248 $ 6,471 Gains from trust REO — 111 Change in fair value of net trust assets, including trust REO gains $ 9,248 $ 6,582 Call Rights The Company held cleanup call options (call rights) with respect to its securitized trusts whereby, when the UPB of the underlying residential mortgage loans fell below a pre-determined threshold, the Company could purchase the underlying residential mortgage loans at par, plus unreimbursed servicer advances, resulting in the repayment of all of the outstanding securitization financing at par. The Company’s ability to exercise its call rights was limited based on available capital and liquidity, and/or in situations where the related securitization trustee does not permit the exercise of such rights. The Company held the cleanup call options through either its economically owned residuals interests or its master servicing rights, which potential economic benefits were evaluated within its fair value estimation process. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments | |
Derivative Instruments | Note 7.—Derivative Instruments The mortgage lending operation enters into IRLCs with prospective borrowers to originate mortgage loans at a specified interest rate and Hedging Instruments to hedge the fair value changes associated with changes in interest rates relating to its mortgage loan origination operations. The fair value of IRLCs and Hedging Instruments related to mortgage loan origination are included in other assets or other liabilities in the accompanying consolidated balance sheets. As of December 31, 2022, the estimated fair value of IRLCs was an asset of $5 thousand while Hedging Instruments were an asset of $47 thousand. As of December 31, 2021, the estimated fair value of IRLCs was an asset of $3.1 million while Hedging Instruments were a liability of $55 thousand. At December 31, 2022 and December 31, 2021, there were no forward delivery commitments as the forward delivery commitments had no pair-off mechanism. The following table includes information for the derivative assets and liabilities, lending for the periods presented: Total Gains (Losses) Notional Amount For the Year Ended December 31, December 31, December 31, 2022 2021 2022 2021 Derivative – IRLC's (1) $ 493 $ 255,150 $ (3,106) $ (4,164) Derivative – TBA MBS (1) 7,000 102,000 5,020 2,022 Derivative – Swap Futures (1) 8,800 — 1,304 — (1) Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations and comprehensive loss . |
Redeemable Preferred Stock
Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2022 | |
Redeemable Preferred Stock | |
Redeemable Preferred Stock | Note 8.—Redeemable Preferred Stock As disclosed within Note 13.—Commitments and Contingencies, on July 15, 2021, the Maryland Court of Appeals issued its decision affirming the decisions of the Maryland Circuit Court (the Circuit Court) and the Court of Special Appeals granting summary judgment in favor of the plaintiffs on the Series B Preferred voting rights language interpretation. Accordingly, the 2009 Article Amendments to the 2004 Series B Articles Supplementary were not validly adopted and the 2004 Series B Articles Supplementary remained in effect. As a result, as of September 30, 2022, the Company had cumulative undeclared dividends in arrears of approximately $20.3 million, or approximately $30.47 per outstanding share of Series B Preferred stock, thereby increasing the liquidation value to approximately $55.47 per share. Every quarter the cumulative undeclared dividends in arrears increased by $0.5859 per Series B Preferred share, or approximately $390 thousand. The accrued and unpaid dividends on the Series B Preferred stock were payable only upon declaration by the Board of Directors, and the liquidation preference, inclusive of Series B Preferred cumulative undeclared dividends in arrears, was only payable upon voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs. In addition, the Company was required to pay an amount equal to three quarters of dividends on the Series B Preferred stock under the 2004 Series B Preferred Articles Supplementary (approximately $1.2 million, which had been previously accrued for [such amount, the 2009 Dividend Amount]) to Series B Preferred shareholders as of August 15, 2022, into the registry of the Circuit Court no later than August 19, 2022, to be held pending final resolution of all issues and final determination by the Circuit Court of the appropriate distribution of those funds. The Company deposited the 2009 Dividend Amount on August 18, 2022. At September 30, 2022, the Company had $72.0 million in outstanding liquidation preference of series B Preferred and Series C Preferred stock (including cumulative unpaid dividends in the case of the Series B Preferred stock). The holders of each series of Preferred Stock, which carried limited voting rights and were redeemable at the option of the Company, retained the right to a $25.00 per share liquidation preference (plus cumulative unpaid dividends in the case of the Series B Preferred stock) in the event of a liquidation of the Company and the right to receive dividends on the Preferred Stock if any such dividends were declared (and, in the case of the Series B Preferred stock, before any dividends or other distributions are made to holders of junior stock, including the Company’s common stock). However as further discussed below, holders of Series B Preferred stock and Series C Preferred stock in connection with the Exchange Offers and the Redemption received the applicable consideration payable therein and were not entitled to any other payment with respect to the liquidation preference of, or any accrued and unpaid dividends on, any shares of Preferred Stock, other than the rights of holders of Series B Preferred stock to receive the 2009 Dividend Amount, based upon final determinations as to entitlement to such amounts by the Circuit Court. Common and preferred dividends were included in the reconciliation of earnings per share beginning July 15, 2021, which was the date the Maryland Court of Appeals affirmed the decision in granting summary judgment in favor of the plaintiffs on the Series B Preferred voting rights. Cumulative preferred dividends, whether or not declared, were reflected in basic and diluted earnings per share in accordance with FASB ASC 260-10-45-11, despite not being accrued for on the consolidated balance sheets. On September 14, 2022, the Company commenced exchange offers (the Exchange Offers) and a consent solicitation for its outstanding shares of Series B Preferred stock and Series C Preferred stock. On October 20, 2022 (the Expiration Date), the Exchange Offers and consent solicitation expired with approximately 69% of the Series B Preferred stock and approximately 67% of the Series C Preferred stock tendering their shares and voting in favor of certain amendments to the Company’s charter as discussed in further detail below. Holders of Series B Preferred stock were entitled to receive (the Series B Consideration), for each share of Series B Preferred stock tendered, (i) 13.33 shares of newly issued common stock and (ii) thirty (30) shares of newly issued 8.25% Series D Cumulative Redeemable Preferred Stock (Series D Preferred stock). Holders of Series C Preferred stock were entitled to receive (the Series C Consideration), for each share of Series C Preferred stock tendered, (i) 1.25 shares of newly issued common stock, (ii) 1.5 warrants to purchase an equal number of shares of common stock at an exercise price of $5.00 per share and (iii) one (1) share of Series D Preferred stock. In connection with the closing of the Exchange Offers, the Company issued on October 26, 2022, a total of 7,330,319 shares of newly issued common stock, 14,773,811 shares of Series D Preferred stock and 1,425,695 warrants to purchase an equal number of shares of common stock. Concurrently with the Exchange Offers, the Company received consent from the requisite holders of each of its outstanding Series B Preferred stock and its outstanding Series C Preferred stock to amend its charter to (i) make all shares of Series B Preferred stock that remain outstanding after the closing of the Exchange Offers redeemable for the same consideration as the Series B Consideration and (ii) make all shares of Series C Preferred stock that remain outstanding after the closing of the Exchange Offers redeemable for the same consideration as the Series C Consideration. On October 27, 2022, the Company provided notice to holders of Series B Preferred stock and Series C Preferred stock that such shares would be redeemed (the Redemption) on November 15, 2022 upon which holders of Series B Preferred stock and Series C Preferred stock will only be entitled to receive the Series B Consideration and the Series C Consideration, as the case may be. In connection with the Redemption, the Company issued approximately 3,298,439 shares of newly issued common stock, 6,599,035 shares of Series D Preferred stock and 681,923 warrants to purchase an equal number of shares of common stock. All holders of Series B Preferred stock and Series C Preferred stock in connection with the Exchange Offers and the Redemption only received the applicable consideration payable therein and were not entitled to any other payment with respect to the liquidation preference of, or any accrued and unpaid dividends on, any shares of Series B Preferred stock or Series C Preferred stock (whether or not such dividends have accumulated and whether or not such dividends accrued before or after completion of the Exchange Offers), other than the rights of holders of Series B Preferred stock to receive the 2009 Dividend Amount, based upon final determinations as to entitlement to such amounts by the Circuit Court. In addition, on August 25, 2022, the Circuit Court issued an Order to Segregate Funds and/or Stock (Segregation Order), directing the Company, if the Exchange Offer for the Series B Preferred stock is completed prior to December 5, 2022, to deposit 13,311,840 shares of Series D Preferred stock, plus, in either event, 4,437,280 shares of newly issued common stock (collectively, the Series B Common Fund) in the custody of a third party custodian or escrow agent approved by class counsel. The Exchange Offer was approved and closed with respect to tendered shares on October 26, 2022, and the Company deposited the required stock with a third party pursuant to the Segregation Order. On August 29, 2022, the Circuit Court issued an order approving the form and substance of the notice by which the Company and the class notice administrator are required to give notice to the Series B Preferred stock class of the final hearing date of December 5, 2022, and the opportunity to file objections to the proposed final injunctive relief and to the applications for awards of attorney’s fees, expenses and incentives. Between September 7 through September 19, the Company and the notice administrator provided the notice required by the August 29, 2022 order. On December 5, 2022, the Circuit Court held a final hearing on all outstanding matters identified in the notice. On December 16, 2022, the Circuit Court issued its Final Judgment Order which was entered on December 19, 2022. The Final Judgment Order granted Plaintiff Camac’s Motion for Attorney’s Fees, Litigation Costs, and Incentive Payment, granted in part and denied in part Plaintiff Timm’s Petition for Incentive Award and Payment of Costs and Expenses. In February 2023, pursuant to the Final Judgement Order, (i) the 2009 Dividend Amount was distributed to certain former Series B Preferred stockholders, with a portion going to pay attorney’s fees, litigation costs and incentive payments and (ii) the Common Stock and Series D Preferred Stock that was held in escrow was distributed to certain former Series B Preferred stockholders, with a portion of the Series D Preferred Stock going to pay attorney’s fees to Class Counsel. The Series D Preferred stock (w) ranks senior to the Common stock as to dividends and upon liquidation; (x) is non-participating, and bears a cumulative cash dividend from and including the original issue date at a fixed rate equal to 8.25% per annum (equivalent to a fixed annual amount of $ .00825 per share of the Series D Preferred stock); (y) bears an initial liquidation preference of $0.10 per share and (z) is mandatorily redeemable by the Company for cash at a redemption price of $0.10 per share, plus any accrued and unpaid dividends (whether or not declared) on (A) the 60th day, or such earlier date as the Company may fix, after the date of any public announcement by the Company of annual or quarterly financial statements that indicate that payment of the redemption price would not cause the Company to violate the restrictions on payment of distributions to stockholders under section 2-311 of the MGCL unless, before such redemption date, the Company’s Board of Directors determines in good faith that the payment by the Company of the redemption price for the Series D Preferred stock and for any stock ranking on parity with the Series D Preferred stock with respect to redemption and which have become redeemable as of the applicable redemption date would cause the Company to violate the Cash Consideration Restrictions, as defined below, or (B) any date the Company fixes not more than sixty (60) days after any determination by the Board of Directors (which the Board of Directors, or a committee thereof, is obligated to undertake after the release of annual and quarterly financial statements and upon any capital raise) in good faith that the payment by the Company of the redemption price for the Series D Preferred stock and any stock ranking on parity with the Series D Preferred stock with respect to redemption rights that have become redeemable as of such redemption date would not cause the Company to violate the Cash Consideration Restrictions. A violation of the “Cash Consideration Restrictions” will occur if the occurrence of an action would cause (i) the Company to violate the restrictions on payment of distributions to stockholders under section 2-311 of the MGCL, (ii) any material breach of or default under the terms and conditions of any obligation of the Company, including any agreement relating to its indebtedness, or (iii) the Company to violate any restriction or prohibition of any law rule or regulation applicable to the Company or of any order, judgment or decree of any court or administrative agency. As a result of receiving the requisite stockholder consents on the Exchange Offers on October 20, 2022 and completion of the Redemption, the aggregate cumulative undeclared dividends in arrears of approximately $20.3 million, or approximately $30.47 per outstanding share of Series B Preferred stock, were exchanged and are no longer considered in the earnings per share calculation. However, as a result of the Company not being able to satisfy the new dividend payment on the 8.25% dividend on the Series D Preferred stock due to the aforementioned Cash Consideration Restrictions, the Company has approximately $52 thousand in cumulative dividends in arrears on the new Series D Preferred stock from the date of issuance through December 31, 2022. Every quarter the cumulative undeclared dividends in arrears will accumulate by approximately $0.0021 per share of Series D Preferred stock, or approximately $72 thousand, increasing the new Series D Preferred stock liquidation preference. Cumulative preferred dividends, whether or not declared, are reflected in basic and diluted loss per share in accordance with FASB ASC 260-10-45-11, despite not being accrued for on the consolidated balance sheets. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | Note 9.—Fair Value of Financial Instruments The use of fair value to measure the Company’s financial instruments is fundamental to its consolidated financial statements and is a critical accounting estimate because a substantial portion of its assets and liabilities are recorded at estimated fair value. FASB ASC 825 requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate such fair values. The Company uses exit price notion when measuring the fair values of financial instruments for disclosure purposes. The following table presents the estimated fair value of financial instruments included in the consolidated financial statements as of the dates indicated: December 31, 2022 December 31, 2021 Carrying Estimated Fair Value Carrying Estimated Fair Value Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 25,864 $ 25,864 $ — $ — $ 29,555 $ 29,555 $ — $ — Restricted cash 4,140 4,140 — — 5,657 5,657 — — Mortgage loans held-for-sale 13,052 — 13,052 — 308,477 — 308,477 — Mortgage servicing rights — — — — 749 — — 749 Derivative assets, lending, net (1) 52 — 47 5 3,111 — — 3,111 Securitized mortgage collateral — — — — 1,639,251 — — 1,639,251 Liabilities Warehouse borrowings $ 3,622 $ — $ 3,622 $ — $ 285,539 $ — $ 285,539 $ — Convertible notes 15,000 — — 15,000 20,000 — — 20,000 Long-term debt 27,753 — — 27,753 46,536 — — 46,536 Securitized mortgage borrowings — — — — 1,614,862 — — 1,614,862 Derivative liabilities, lending, net (2) — — — — 55 — 55 — (1) Represents IRLCs and Hedging Instruments and are included in other assets in the accompanying consolidated balance sheets. (2) Represents Hedging Instruments and are included in other liabilities in the accompanying consolidated balance sheets. The fair value amounts above have been estimated by management using available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop the estimates of fair value in both inactive and orderly markets. Accordingly, the estimates presented are not necessarily indicative of the amounts that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. For the consolidated non-recourse securitizations, the fair value of the financial liabilities of the consolidated non-recourse securitizations (securitized mortgage borrowings) was more observable than the fair value of the financial assets of the consolidated non-recourse securitizations (securitized mortgage collateral). In accordance with FASB ASU 2014-13, the financial liabilities of the consolidated non-recourse securitizations were the more observable input and measured at fair value and the financial assets were being measured in consolidation as: (1) the sum of the fair value of the securitized mortgage borrowings and the fair value of the beneficial interests retained by the Company less (2) the carrying value of any REO. The resulting amount was allocated to securitized mortgage collateral. For securitized mortgage collateral and securitized mortgage borrowings, the underlying bonds were collateralized by Alt-A (non-conforming) residential and commercial loans and had limited or no market activity. The Company’s methodology to estimate fair value of these assets and liabilities included the use of internal pricing techniques such as the net present value of future expected cash flows (with observable market participant assumptions, where available) discounted at a rate of return based on the Company’s estimates of market participant requirements. The significant assumptions utilized in these internal pricing techniques, which were based on the characteristics of the underlying collateral, include estimated credit losses, estimated prepayment speeds and appropriate discount rates. Fair Value Hierarchy The application of fair value measurements may be on a recurring or nonrecurring basis depending on the accounting principles applicable to the specific asset or liability or whether management has elected to carry the item at its estimated fair value. FASB ASC 820-10-35 specifies a hierarchy of valuation techniques based on whether the inputs to those techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy: ● Level 1—Quoted prices (unadjusted) in active markets for identical instruments or liabilities that an entity has the ability to assess at measurement date. ● Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices that are observable for an asset or liability, including interest rates and yield curves observable at commonly quoted intervals, prepayment speeds, loss severities, credit risks and default rates; and market-corroborated inputs. ● Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when estimating fair value. As a result of the lack of observable market data resulting from inactive markets, the Company has classified its securitized mortgage collateral and borrowings (prior to the sale in 2022), derivative assets (IRLCs) and long-term debt as Level 3 fair value measurements. Level 3 assets and liabilities measured at fair value on a recurring basis were approximately 0% and 62% and 83% and 84% , respectively, of total assets and total liabilities measured at estimated fair value at December 31, 2022 and 2021. Recurring Fair Value Measurements The Company assesses its financial instruments on a quarterly basis to determine the appropriate classification within the fair value hierarchy, as defined by FASB ASC Topic 810. Transfers between fair value classifications occur when there are changes in pricing observability levels. Transfers of financial instruments among the levels occur at the beginning of the reporting period. There were no material transfers into Level 3 classified instruments during the year ended December 31, 2022. The following tables present the Company’s assets and liabilities that are measured at estimated fair value on a recurring basis, including financial instruments for which the Company has elected the fair value option at December 31, 2022 and 2021, based on the fair value hierarchy: Recurring Fair Value Measurements December 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Mortgage loans held-for-sale $ — $ 13,052 $ — $ — $ 308,477 $ — Derivative assets, lending, net (1) — 47 5 — — 3,111 Mortgage servicing rights — — — — — 749 Securitized mortgage collateral — — — — — 1,639,251 Total assets at fair value $ — $ 13,099 $ 5 $ — $ 308,477 $ 1,643,111 Liabilities Securitized mortgage borrowings $ — $ — $ — $ — $ — $ 1,614,862 Long-term debt — — 27,753 — — 46,536 Derivative liabilities, lending, net (2) — — — — 55 — Total liabilities at fair value $ — $ — $ 27,753 $ — $ 55 $ 1,661,398 (1) At December 31, 2022, derivative assets, lending, net included $5 thousand in IRLCs and $47 thousand in Hedging Instruments included in other assets in the accompanying consolidated balance sheets. At December 31, 2021, derivative assets, lending, net included $3.1 million in IRLCs and is included in other assets in the accompanying consolidated balance sheets. (2) At December 31, 2022 and 2021, derivative liabilities, lending, net are included in other liabilities in the accompanying consolidated balance sheets. The following tables present a reconciliation for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2022 and 2021: Level 3 Recurring Fair Value Measurements For the Year Ended December 31, 2022 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, December 31, 2021 $ 1,639,251 $ (1,614,862) $ 749 $ 3,111 $ (46,536) Total gains (losses) included in earnings: Interest income (1) 2,019 — — — — Interest expense (1) — (7,564) — — (1,187) Change in fair value 9,248 — (70) (3,106) 2,757 Change in instrument specific credit risk — — — — 17,213 (2) Total gains (losses) included in earnings 11,267 (7,564) (70) (3,106) 18,783 Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — 46 — — Settlements (1,650,518) 1,622,426 (725) — — Fair value, December 31, 2022 $ — $ — $ — $ 5 $ (27,753) Unrealized gains (losses) still held (3) $ — $ — $ — $ 5 $ (34,247) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and liabilities. Net interest income, including cash received and paid, was $1.2 million for the year ended December 31, 2022. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations and comprehensive loss is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Amount represents the change in instrument specific credit risk in other comprehensive loss in the consolidated statements of operations and comprehensive loss. (3) Represents the amount of unrealized gains (losses) relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at December 31, 2022. Level 3 Recurring Fair Value Measurements For the Year Ended December 31, 2021 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, December 31, 2020 $ 2,100,175 $ (2,086,557) $ 339 $ 7,275 $ (44,413) Total (losses) gains included in earnings: Interest income (1) (12,162) — — — — Interest expense (1) — (37,090) — — (1,499) Change in fair value 151,759 (145,288) (126) (4,164) 2,098 Change in instrument specific credit risk — — — — (2,722) (2) Total gains (losses) included in earnings 139,597 (182,378) (126) (4,164) (2,123) Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — 536 — — Settlements (600,521) 654,073 — — — Fair value, December 31, 2021 $ 1,639,251 $ (1,614,862) $ 749 $ 3,111 $ (46,536) Unrealized (losses) gains still held (3) $ (104,299) $ 2,318,296 $ 749 $ 3,111 $ 15,464 (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and liabilities. Net interest income, including cash received and paid, was $8.1 million for the year ended December 31, 2021. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations and comprehensive loss is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Amount represents the change in instrument specific credit risk in other comprehensive loss in the consolidated statements of operations and comprehensive loss. (3) Represents the amount of unrealized (losses) gains relating to assets and liabilities classified as Level 3 that were still held and reflected in the fair values at December 31, 2021. The following table presents quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and non-recurring basis at December 31, 2022 and 2021. December 31, 2022 December 31, 2021 Unobservable Range of Weighted Range of Weighted Financial Instrument Input Inputs Average Inputs Average Assets and liabilities backed by real estate Securitized mortgage collateral, and Prepayment rates - % - % 2.9 - 46.3 % 10.7 % Securitized mortgage borrowings Default rates - % - % 0.06 - 4.3 % 1.7 % Loss severities - % - % 0.01 - 97.6 % 70.1 % Discount rates - % - % 2.1 - 13.0 % 3.6 % Other assets and liabilities Mortgage servicing rights Discount rates - % - % 12.5 - 15.0 % 12.8 % Prepayment rates - % - % 8.01 - 29.1 % 10.3 % Derivative assets - IRLCs, net Pull-through rates 70.0 - 78.0 % 72.3 % 50.0 - 98.0 % 79.0 % Long-term debt See (1) below N/A % N/A % 8.6 % 8.6 % (1) For the year ended December 31, 2022, the company used the expected cash flow valuation methodology and the unobservable input was the expected proceeds. For the year ended December 31, 2021, the Company used a discounted cash flow model and the unobservable input was the discount rate. For assets and liabilities backed by real estate, a significant increase in discount rates, default rates or loss severities would result in a significantly lower estimated fair value. The effect of changes in prepayment speeds would have differing effects depending on the seniority or other characteristics of the instrument. For other assets and liabilities, a significant increase in discount rates would result in a significantly lower estimated fair value. A significant increase or decrease in pull-through rate assumptions would result in a significant increase or decrease, respectively, in the fair value of IRLCs. The Company believes that the imprecision of an estimate could be significant. The following tables present the changes in recurring fair value measurements included in net losses for the years ended December 31, 2022 and 2021: Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Year Ended December 31, 2022 Change in Fair Value of Interest Interest Net Trust Long-term Other Income (Loss) Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ 2,019 $ — $ 9,248 $ — $ — $ — $ 11,267 Securitized mortgage borrowings — (7,564) — — — — (7,564) Long-term debt — (1,187) — 2,757 — — 1,570 Mortgage servicing rights (2) — — — — (70) — (70) Mortgage loans held-for-sale — — — — — (8,802) (8,802) Derivative assets — IRLCs — — — — — (3,106) (3,106) Derivative liabilities — Hedging Instruments — — — — — 103 103 Total $ 2,019 $ (8,751) $ 9,248 (3) $ 2,757 $ (70) $ (11,805) $ (6,602) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain on mortgage servicing rights, net in the consolidated statements of operations and comprehensive loss. (3) For the year ended December 31, 2022, change in the fair value of trust assets, excluding REO was $9.2 million. Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Year Ended December 31, 2021 Change in Fair Value of Interest Interest Net Trust Long-term Other Income (Loss) Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ (12,162) $ — 151,759 $ — $ — $ — $ 139,597 Securitized mortgage borrowings — (37,090) (145,288) — — — (182,378) Long-term debt — (1,499) — 2,098 — — 599 Mortgage servicing rights (2) — — — — (126) — (126) Mortgage loans held-for-sale — — — — — 3,395 3,395 Derivative assets — IRLCs — — — — — (4,164) (4,164) Derivative liabilities — Hedging Instruments — — — — — 88 88 Total $ (12,162) $ (38,589) $ 6,471 (3) $ 2,098 $ (126) $ (681) $ (42,989) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain on mortgage servicing rights, net in the consolidated statements of operations and comprehensive loss. (3) For the year ended December 31, 2021, change in the fair value of trust assets, excluding REO was $6.5 million. The following is a description of the measurement techniques for items recorded at estimated fair value on a recurring basis. Mortgage servicing rights —The Company elected to carry its mortgage servicing rights arising from its mortgage loan origination operation at fair value. The fair value of mortgage servicing rights is based upon a discounted cash flow model. The valuation model incorporates assumptions that market participants would use in estimating the fair value of servicing. These assumptions include estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, prepayment and late fees, among other considerations. As discussed in Note 3.— Mortgage Servicing Rights, the Company sold its government insured MSRs for approximately $725 thousand in December 31, 2022. Mortgage servicing rights were considered a Level 3 measurement at December 31, 2021. Mortgage loans held-for-sale —The Company elected to carry its mortgage LHFS originated or acquired from its mortgage lending operation at fair value. Fair value is based on quoted market prices, where available, prices for other traded mortgage loans with similar characteristics, and purchase commitments and bid information received from market participants. Given the meaningful level of secondary market activity for mortgage loans, active pricing is available for similar assets and accordingly, the Company classifies its mortgage LHFS as a Level 2 measurement at December 31, 2022 and 2021. Securitized mortgage collateral —The Company carried its securitized mortgage collateral at fair value. These assets consist primarily of non-conforming mortgage loans securitized between 2002 and 2007. Fair value measurements were based on the Company’s internal models used to compute the net present value of future expected cash flows, with observable market participant assumptions, where available. The Company’s assumptions included its expectations of inputs that other market participants would use in pricing these assets. These assumptions included judgments about the underlying collateral, prepayment speeds, estimated future credit losses, forward interest rates, investor yield requirements and certain other factors. As discussed in Note 6.— Securitized Mortgage Trusts, in March 2022, the Company sold certain certificates, and assigned certain optional termination and loan purchase rights associated with the consolidated securitization trusts for $37.5 million and deconsolidated the securitized mortgage trust assets and liabilities, recording a $9.2 million fair value increase, net of $277 thousand in transaction costs related to the transfer. Securitized mortgage collateral was considered a Level 3 measurement at December 31, 2021. Securitized mortgage borrowings —The Company carried its securitized mortgage borrowings at fair value. These borrowings consisted of individual tranches of bonds issued by securitization trusts and are primarily backed by non-conforming mortgage loans. Fair value measurements included the Company’s judgments about the underlying collateral and assumptions such as prepayment speeds, estimated future credit losses, forward interest rates, investor yield requirements and certain other factors. As discussed in Note 6.— Securitized Mortgage Trusts, in March 2022, the Company sold certain certificates, and assigned certain optional termination and loan purchase rights associated with the consolidated securitization trusts for $37.5 million and deconsolidated the securitized mortgage trust assets and liabilities, recording a $9.2 million fair value increase, net of $277 thousand in transaction costs related to the transfer. Securitized mortgage borrowings were considered a Level 3 measurement at December 31, 2021. Long-term debt —The Company elected to carry its remaining long-term debt (consisting of junior subordinated notes) at fair value. These securities are measured based upon an analysis prepared by management, which considers the Company’s own credit risk, including settlements with trust preferred debt holders, if any, and a cash flow analysis. In 2022, the Company used an expected cash flow valuation methodology to estimate the cash flows based on the expected proceeds that the asset would receive. In 2021, the Company used a discounted cash flow analysis. As of December 31, 2022, long-term debt had an unpaid principal balance of $62.0 million compared to an estimated fair value of $27.8 million. The aggregate unpaid principal balance exceeds the fair value by $34.2 million at December 31, 2022. The long-term debt is considered a Level 3 measurement at December 31, 2022 and 2021. Derivative assets and liabilities, Lending — Derivative assets and liabilities are carried at fair value and are accounted for as free standing derivatives. All derivative financial instruments are recognized on the consolidated balance sheets at fair value with changes in the fair values being reported in current period earnings. The derivatives include IRLCs with prospective residential mortgage borrowers whereby the interest rate on the loan is determined prior to funding and the borrowers have locked in that interest rate. These commitments are determined to be derivative instruments in accordance with GAAP. The derivatives also include Hedging Instruments used to hedge the fair value changes associated with changes in interest rates relating to its mortgage lending originations. The Company hedges the period from the interest rate lock (assuming a fall-out factor) to the date of the loan sale. The estimated fair value of IRLCs are based on underlying loan types with similar characteristics using the TBA MBS market, which is actively quoted and validated through external sources. The data inputs used in this valuation include, but are not limited to, loan type, underlying loan amount, note rate, loan program and expected sale date of the loan, adjusted for current market conditions. These valuations are adjusted at the loan level to consider the servicing release premium and loan pricing adjustments specific to each loan. For all IRLCs, the base value is then adjusted for the anticipated Pull-through Rate. The anticipated Pull-through Rate is an unobservable input based on historical experience, which results in classification of IRLCs as a Level 3 measurement at December 31, 2022 and 2021. The fair value of the TBA MBS and forward delivery commitments is based on the actively quoted TBA MBS market using observable inputs related to characteristics of the underlying MBS stratified by product, coupon and settlement date. Therefore, the TBA MBS and forward delivery commitment, if any, are classified as a Level 2 measurement at December 31, 2022 and 2021. The Company also utilizes interest rate swap futures to hedge interest rate risk. These instruments are actively traded in a liquid market and classified as Level 2 measurement at December 31, 2022. The Company did not enter into any interest rate swap futures as of December 31, 2021. Nonrecurring Fair Value Measurements The Company is required to measure certain assets and liabilities at estimated fair value from time to time. These fair value measurements typically result from the application of specific accounting pronouncements under GAAP. The fair value measurements are considered nonrecurring fair value measurements under FASB ASC 820-10. The following table presents financial and non-financial assets and liabilities measured using nonrecurring fair value measurements at December 31, 2022 and 2021, respectively: Nonrecurring Fair Value Measurements December 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 REO (1) $ — $ — $ — $ — $ 3,479 $ — ROU asset — — 1,248 — — 10,209 (1) Balance represents REO at December 31, 2021 which has been impaired subsequent to foreclosure. The following table presents total gains on financial and non-financial assets and liabilities measured using nonrecurring fair value measurements for the years ended December 31, 2022 and 2021, respectively: Total Gains (Losses) (1) For the Year Ended December 31, 2022 2021 REO (2) $ — $ 111 ROU asset impairment (123) — (1) Total gains reflect gains from all nonrecurring measurements during the year. (2) For the years ended December 31, 2022 and 2021, the Company recorded none and $111 thousand, respectively, of gains related to changes in the NRV of REO. Gains represent recovery of the NRV attributable to an improvement in state specific loss severities on properties held during the period which resulted in an increase to NRV. Real estate owned —REO consists of residential real estate acquired in satisfaction of loans. Upon foreclosure, REO is adjusted to the estimated fair value of the residential real estate less estimated selling and holding costs, offset by expected contractual mortgage insurance proceeds to be received, if any. Subsequently, REO is recorded at the lower of carrying value or estimated fair value less costs to sell. REO balance representing REOs which have been impaired subsequent to foreclosure are subject to nonrecurring fair value measurement and included in the nonrecurring fair value measurements tables. Fair values of REO are generally based on observable market inputs, and considered Level 2 measurements at December 31, 2021. ROU asset impairment — The Company performs reviews of its ROU assets for impairment when evidence exists that the carrying value of an asset may not be recoverable. During the first quarter of 2022, the Company recorded a $123 thousand ROU asset impairment charge related to the sublease of approximately 1,900 square feet of a floor within the Company’s corporate office, reducing the carrying value of the lease asset to its estimated fair value. The impairment charge is included in general, administrative and other expense in the consolidated statements of operations and comprehensive loss. ROU asset was considered a Level 3 fair value measurement at December 31, 2022 and December 31, 2021. |
Reconciliation of Loss Per Comm
Reconciliation of Loss Per Common Share | 12 Months Ended |
Dec. 31, 2022 | |
Reconciliation of Loss Per Common Share | |
Reconciliation of Loss Per Common Share | Note 10.—Reconciliation of Loss Per Common Share The following table presents the computation of basic and diluted loss per common share, including the dilutive effect of stock options, restricted stock awards (RSAs), restricted stock units (RSUs), deferred stock units (DSUs), Notes and cumulative redeemable preferred stock outstanding for the periods indicated, when dilutive: For the Year Ended December 31, 2022 2021 Numerator for basic loss per share: Net loss $ (39,432) $ (3,878) Less: cumulative non-declared dividends on preferred stock (1) (52) (780) Net loss attributable to common stockholders $ (39,484) $ (4,658) Numerator for diluted loss per share: Net loss $ (39,484) $ (4,658) Interest expense attributable to convertible notes (2) — — Net loss plus interest expense attributable to convertible notes $ (39,484) $ (4,658) Denominator for basic loss per share (3): Basic weighted average common shares outstanding during the period 23,918 21,332 Denominator for diluted loss per share (3): Basic weighted average common shares outstanding during the period 23,918 21,332 Net effect of dilutive convertible notes and warrants (2) — — Net effect of dilutive stock options, DSU’s, RSA's and RSU's (2) — — Diluted weighted average common shares 23,918 21,332 Net loss per common share: Basic $ (1.65) $ (0.22) Diluted $ (1.65) $ (0.22) (1) Cumulative non-declared dividends in arrears related to the Series B Preferred stock are included in 2021 and excluded in 2022 as a result of the aforementioned Exchange Offers. Cumulative non-declared dividends in arrears related to the Series D Preferred stock are included in 2022 as a result of the Company not being able to satisfy the Cash Consideration Restrictions of the new preferred stock. (See Note 8.– Redeemable Preferred Stock and Note 13.– Commitments and Contingincies). (2) Adjustments to diluted loss per share for the years ended December 31, 2022 and 2021, were excluded from the calculation, as they were anti-dilutive. (3) Share amounts presented in thousands. The anti-dilutive stock options, RSAs, RSUs and DSUs outstanding for the years ending December 31, 2022 and 2021 were 772 thousand and 1.0 million shares in the aggregate, respectively. For the years ended December 2022 and 2021, there were 698 thousand and 930 thousand shares attributable to the Notes that were anti-dilutive. Additionally, for the years ended December 2022 and 2021, there were 2.3 million and 202 thousand warrants that were anti-dilutive. Common and preferred dividends are included in the reconciliation of earnings (loss) per share beginning July 15, 2021, which was the date the Maryland Court of Appeals affirmed the decision in granting summary judgment in favor of the plaintiffs on the Series B Preferred stock voting rights. As a result of receiving the requisite stockholder consents on the Exchange Offers on October 20, 2022 and completion of the redemption, the aggregate cumulative undeclared dividends in arrears of approximately $20.3 million, or approximately $30.47 per outstanding share of Series B Preferred stock, were exchanged and are no longer considered in the earnings per share calculation. However, as a result of the Company not being able to satisfy the new dividend payment on the 8.25% dividend on the Series D Preferred stock as a result of the aforementioned Cash Consideration Restrictions, the Company has approximately $52 thousand in cumulative dividends in arrears on the new Series D Preferred stock from the date of issuance through December 31, 2022. Every quarter the cumulative undeclared dividends in arrears will accumulate by approximately $0.0021 per Series D Preferred share, or approximately $72 thousand, increasing the new Series D Preferred stock liquidation preference. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Income Taxes | Note 11.—Income Taxes The Company is subject to federal income taxes as a regular (Subchapter C) corporation and files a consolidated U.S. federal income tax return. Income taxes for the years ended December 31, 2022 and 2021 were as follows: For the Year Ended December 31, 2022 2021 Current income taxes: Federal $ — $ — State 38 71 Total current income tax expense 38 71 Deferred income taxes: Federal — — State — — Total deferred income tax expense — — Total income tax expense $ 38 $ 71 The Company recorded income tax expense of $38 thousand and $71 thousand for the years ended December 31, 2022 and 2021, respectively. The income tax expense for the year ended December 31, 2022 and 2021, was primarily the result of state minimum taxes and franchise taxes. Deferred tax assets are recognized subject to management's judgment that realization is "more likely than not". A valuation allowance is recognized for a deferred tax asset if, based on the weight of the available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. In making such judgments, significant weight is given to evidence that can be objectively verified. As of each reporting date, the Company considers new evidence, both positive and negative, that could impact management's view with regard to future realization of deferred tax assets. Significant judgment is required in assessing future earnings trends, the availability of tax planning strategies, recent pretax losses and the timing of reversals of temporary differences. The Company's evaluation is based on current tax laws as well as management's expectation of future performance. The Company's deferred tax assets are primarily the result of net operating losses and basis differences on mortgage securities and goodwill. The Company has recorded a full valuation allowance against its deferred tax assets at December 31, 2022 as it is more likely than not that the deferred tax assets will not be realized. The valuation allowance is based on management's assessment that it is more likely than not that certain deferred tax assets, primarily net operating loss carryforwards, may not be realized in the foreseeable future due to objective negative evidence. Deferred tax assets are comprised of the following temporary differences between the financial statement carrying value and the tax basis of assets: For the Year Ended December 31, 2022 2021 Deferred tax assets: Federal and state net operating losses $ 248,559 $ 178,194 Mortgage securities — 55,283 Depreciation and amortization 21,655 24,355 Capital loss carryover 172 172 Compensation and other accruals 1,563 3,058 Repurchase reserve 1,839 1,493 Total gross deferred tax assets 273,788 262,555 Deferred tax liabilities: Fair value adjustments on long-term debt (9,516) (3,980) Mortgage servicing rights — (236) Corporate-owned life insurance (1,272) (1,017) Total gross deferred tax liabilities (10,788) (5,233) Valuation allowance (263,000) (257,322) Total net deferred tax assets $ — $ — The following is a reconciliation of income taxes to the expected statutory federal corporate income tax rates for the years ended December 31, 2022 and 2021: For the Year Ended December 31, 2022 2021 Expected income tax expense $ (8,273) $ (799) State tax expense, net of federal benefit 30 56 State rate change 345 (640) Change in valuation allowance 7,532 1,218 Corporate-owned life insurance interest and premiums 121 96 Other 283 140 Total income tax expense $ 38 $ 71 At December 31, 2022, the Company had accumulated other comprehensive earnings of $39.3 million, which was net of tax of $11.3 million. As of December 31, 2022, the Company had estimated NOL carryforwards of approximately $850.1 million. Federal NOL carryforwards begin to expire in 2027. Included in the estimated NOL carryforward is $292.5 million of NOLs with an indefinite carryover period. As of December 31, 2022, the Company had estimated California NOL carryforwards of approximately $624.8 million, which begin to expire in 2028. The Company may not be able to realize the maximum benefit due to the nature and tax entities that hold the NOL. On October 23, 2019, the Company adopted a Tax Benefits Preservation Rights Agreement (Rights Plan) to help preserve the value of certain deferred tax benefits, including those generated by net operating losses (collectively, Tax Benefits). In general, the Company may “carry forward” net operating losses in certain circumstances to offset current and future taxable income, which will reduce federal and state income tax liability, subject to certain requirements and restrictions. The Company’s ability to use these Tax Benefits would be substantially limited and impaired if it were to experience an “ownership change” for purposes of Section 382 of the Internal Revenue Code of 1986, as amended (the Code) and the Treasury Regulations promulgated thereunder. Generally, the Company will experience an “ownership change” if the percentage of the shares of Common Stock owned by one or more “five-percent shareholders” increases by more than 50 percentage points over the lowest percentage of shares of Common Stock owned by such stockholder at any time during the prior three year on a rolling basis. As such, the Rights Plan has a 4.99% “trigger” threshold that is intended to act as a deterrent to any person or entity seeking to acquire 4.99% or more of the outstanding Common Stock without the prior approval of the board of directors. The Rights Plan also has certain ancillary anti-takeover effects. The rights accompany each share of common stock of the Company and are evidenced by ownership of common stock. The rights are not exercisable except upon the occurrence of certain change of control events. Once triggered, the rights would entitle the stockholders, other than a person qualifying as an “Acquiring Person” pursuant to the rights plan, to certain “flip in”, “flip over” and exchange rights. The rights issued under the Rights Plan may be redeemed by the board of directors at a nominal redemption price of $0.001 per right, and the board of directors may amend the rights in any respect until the rights are triggered. The Rights Plan was approved at the Company’s 2020 annual meeting of stockholders and will expire on the three-year anniversary of its adoption. The Company adopted ASU 2019-12 on a prospective basis on January 1, 2020. The most significant impact to the Company included the removal of the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive earnings). The changes also add a requirement for an entity to reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. The Company files numerous tax returns in various jurisdictions. While the Company is subject to examination by various taxing authorities, the Company believes there are no unresolved issues or claims likely to be material to its financial position. The Company classifies interest and penalties on taxes as provision for income taxes. As of December 31, 2022 and 2021, the Company has no material uncertain tax positions. The Company has state alternative minimum tax (AMT) credits in the amount of $404 thousand as of December 31, 2022. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting | |
Segment Reporting | Note 12.—Segment Reporting The Company has three primary reporting segments which include mortgage lending, real estate services and long-term mortgage portfolio. Unallocated corporate and other administrative costs, including the costs associated with being a public company, are presented in corporate and other. The following table presents selected balance sheet data by reporting segment as of the dates indicated: Balance Sheet Items as of Mortgage Real Estate Long-term Corporate December 31, 2022: Lending Services Portfolio and other Consolidated Cash and cash equivalents $ 24,923 $ 500 $ — 441 $ 25,864 Restricted cash 4,140 — — — 4,140 Mortgage loans held-for-sale 13,052 — — — 13,052 Mortgage servicing rights — — — — — Other assets (1) 1,586 2 77 15,610 17,275 Total assets $ 43,701 $ 502 $ 77 $ 16,051 $ 60,331 Total liabilities $ 10,866 $ — $ 28,180 $ 32,888 $ 71,934 Balance Sheet Items as of Mortgage Real Estate Long-term Corporate December 31, 2021: Lending Services Portfolio and other Consolidated Cash and cash equivalents $ 26,239 $ 500 $ — $ 2,816 $ 29,555 Restricted cash 5,657 — — — 5,657 Mortgage loans held-for-sale 308,477 — — — 308,477 Mortgage servicing rights 749 — — — 749 Trust assets — — 1,642,730 — 1,642,730 Other assets (1) 10,051 2 141 25,409 35,603 Total assets $ 351,173 $ 502 $ 1,642,871 $ 28,225 $ 2,022,771 Total liabilities $ 298,726 $ — $ 1,661,729 $ 52,380 $ 2,012,835 (1) All segment asset balances exclude intercompany balances. The following table presents selected statement of operations information by reporting segment for the years ended December 31, 2022 and 2021: Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Year Ended December 31, 2022: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 6,317 $ — $ — $ — $ 6,317 Servicing income, net 63 — — — 63 Gain on mortgage servicing rights, net 194 — — — 194 Broker fee income 50 — — — 50 Real estate services fees, net — 1,081 — — 1,081 Other revenue 9 — 24 857 890 Other operating expense (34,025) (1,373) (262) (20,465) (56,125) Other income (expense) 1,368 — 8,511 (1,743) 8,136 Net (loss) earnings before income tax expense $ (26,024) $ (292) $ 8,273 $ (21,351) (39,394) Income tax expense 38 Net loss $ (39,432) Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Year Ended December 31, 2021: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 65,294 $ — $ — $ — $ 65,294 Servicing expense, net (432) — — — (432) Gain on mortgage servicing rights, net 34 — — — 34 Real estate services fees, net — 1,144 — — 1,144 Other revenue 24 — 110 145 279 Other operating expense (62,605) (1,409) (778) (16,412) (81,204) Other income (expense) 98 — 12,840 (1,860) 11,078 Net earnings (loss) before income tax expense $ 2,413 $ (265) $ 12,172 $ (18,127) $ (3,807) Income tax expense 71 Net loss $ (3,878) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 13.—Commitments and Contingencies Legal Proceedings The Company is a defendant in or a party to a number of legal actions or proceedings that arise in the ordinary course of business. In some of these actions and proceedings, claims for monetary damages are asserted against the Company. In view of the inherent difficulty of predicting the outcome of such legal actions and proceedings, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss related to each pending matter may be, if any. In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation when those matters present loss contingencies that are both probable and estimable. In any case, there may be an exposure to losses in excess of any such amounts whether accrued or not. Any estimated loss is subject to significant judgment and is based upon currently available information, a variety of assumptions, and known and unknown uncertainties. The matters underlying the estimated loss will change from time to time, and actual results may vary significantly from the current estimate. Therefore, an estimate of possible loss represents what the Company believes to be an estimate of possible loss only for certain matters meeting these criteria. It does not represent the Company’s maximum loss exposure. Based on the Company’s current understanding of these pending legal actions and proceedings, management does not believe that judgments or settlements arising from pending or threatened legal matters, individually or in the aggregate, will have a material adverse effect on the consolidated financial position, operating results or cash flows of the Company. However, in light of the inherent uncertainties involved in these matters, some of which are beyond the Company’s control, and the very large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to the Company’s results of operations or cash flows for any particular reporting period. The legal matter updates summarized below are ongoing and may have an effect on the Company’s business and future financial condition and results of operations: Timm, et al v. Impac Mortgage Holdings, Inc., et al. On December 7, 2011, a purported class action was filed in the Circuit Court of Baltimore City (Circuit Court) entitled Timm, et al v. Impac Mortgage Holdings, Inc., et al. (Maryland Action) on behalf of holders of the Company’s 9.375% Series B Cumulative Redeemable Preferred Stock (Series B Preferred) and 9.125% Series C Cumulative Redeemable Preferred Stock (Series C Preferred) who did not tender their stock in connection with the Company’s 2009 Offer to Purchase and Consent Solicitation (2009 Offer), including that the Company failed to achieve the requisite number of votes to amend the 2004 Series B Articles Supplementary, that the consents of the holders of Series B Preferred stock and Series C Preferred stock to amend the 2004 Series B Articles Supplementary and 2004 Series C Articles Supplementary (together, the 2004 Articles Supplementary) were not effective, and that the Company’s Board of Directors breached their fiduciary duties by recommending and approving the 2009 Offer. The Maryland Action sought a judicial declaration that the Article Amendments related to the 2009 Offer (the 2009 Article Amendments) were ineffective, reinstatement of cumulative dividends on the Series B Preferred stock and Series C Preferred stock, payment of additional dividends that would have been required if the 2004 Articles Supplementary had remained in effect after June 29, 2009 (due to the Company’s purchase of certain Preferred Stock before year end 2009), the election of two directors by the holders of Series B Preferred stock and Series C Preferred stock, punitive damages and legal expenses. In 2013, the Company and the individual defendants in the Maryland Action prevailed on a motion to dismiss all claims, except the claim that the Company had failed to receive the requisite number of votes to amend the 2004 Series B Articles Supplementary and related remedies. All claims made on behalf of the holders of Series C Preferred stock and all claims against individual defendants were dismissed. The case proceeded to discovery and cross-motions for summary judgment on the remaining primary dispute as to whether the 2004 Series B Articles Supplementary required the approval of the holders of two -thirds (2/3rds) of the Series B Preferred, voting as a separate class, in order to make the 2009 Article Amendments to the 2004 Series B Articles Supplementary, which was the plaintiff’s position, or required the approval of the holders of two -thirds (2/3rds) of the Series C Preferred and Series C Preferred, voting together as a single class, which was the Company’s position. The Circuit Court entered a Judgment Order (Judgment Order) on July 16, 2018 (amended on July 24, 2018), whereby it entered a partial final judgment: (1) in favor of the Company and all other defendants on all claims on behalf of the holders of Series C Preferred and all claims against all individual defendants, thereby affirming the validity of the 2009 Article Amendments to the 2004 Series C Articles Supplementary; (2) declaring its interpretation of the voting provision language in the 2004 Series B Articles Supplementary to mean that consent of the holders of two -thirds (2/3rds) of the Series B Preferred stock, voting as a separate class, was required to approve and amend the 2009 Article Amendments to the 2004 Series B Articles Supplementary, which was not obtained, thus rendering the amendments invalid and leaving the 2004 Series B Articles Supplementary continuously in effect; (3) ordering the Company to hold a special election within sixty (60) days for the holders of Series B Preferred stock to elect two directors to the Board of Directors pursuant to the 2004 Series B Articles Supplementary (who would remain on the Board until all accumulated dividends on the Series B Preferred stock have been paid or set aside for payment); and (4) declaring that the Company is required to pay three quarters of dividends on the Series B Preferred stock under the 2004 Series B Articles Supplementary (approximately $1.2 million), but did not order the Company to make any payment at that time (the 2009 Dividend Amount), however the amount was accrued by the Company. The Circuit Court declined to certify any class pending the outcome of appeals and certified its partial Judgment Order for immediate appeal. The Company appealed from the Judgment Order and one co-Plaintiff cross-appealed to the Court of Special Appeals (CSA). After briefing and argument, the CSA issued an opinion on April 1, 2020, affirming the Circuit Court’s judgments. Specifically, the CSA affirmed judgment in favor of the Company and other defendants on all claims involving Series C Preferred stock and affirmed judgment in favor of plaintiffs on the Series B Preferred voting rights interpretation, finding that the voting rights language in the 2004 Series B Articles Supplementary required consent of the holders of two -thirds (2/3rds) of the Series B Preferred stock, voting as a separate class, to amend the 2004 Series B Articles Supplementary in 2009. The Company filed a petition for a writ of certiorari to the Maryland Court of Appeals (Court of Appeals) seeking review of the voting rights decision, which was granted. Neither of the two co-Plaintiffs sought further review. The Court of Appeals issued its decision on July 15, 2021, affirming the decisions of the Circuit Court and the Court of Special Appeals granting summary judgment in favor of the plaintiffs on the Series B Preferred voting rights language interpretation. Accordingly, the 2009 Article Amendments to the 2004 Series B Articles Supplementary were not validly adopted and the 2004 Series B Articles Supplementary remained in effect. On August 17, 2021, the Court of Appeals issued its mandate returning the case to the Circuit Court for final proceedings on certain open issues, discussed below. On October 25, 2021, the case was assigned to a judge of the Circuit Court to oversee final disposition of outstanding issues. On remand, the Circuit Court directed the parties to submit briefs on any outstanding issues. The two co-Plaintiffs filed motions taking differing positions regarding certification of a Series B Preferred stock (the Class), appointment of a Class representative and Class counsel, notice to the Class regarding payment of the 2009 Dividend Amount and any award of attorney’s fees to Plaintiffs’ counsel from future dividends. After a hearing on February 18, 2022, the Circuit Court took all such matters under submission. On July 22, 2022, the Circuit Court issued an Order Certifying Class and Providing for Class Notice and Final Hearing, accompanied by a Memorandum Opinion explaining the Circuit Court’s rulings on the matters under submission. The Circuit Court denied plaintiff Curtis Timm’s Motion for Class Certification and Other Relief and granted plaintiff Camac Fund LP’s Motion to Certify Class, Appoint Class Representative and Lead Counsel, Preliminarily Determine Right to Receive Dividends, and Set Final Judgment Hearing. The Circuit Court certified a non-opt out class of owners of Series B Preferred stock from the close of the tender offer on June 29, 2009 to the date of the class certification order, appointed plaintiff Camac Fund as Lead Class Plaintiff and its counsel, Tydings & Rosenberg LLP, as Lead Class Counsel, ordered the co-plaintiffs to file any petitions for award of attorneys’ fees and expenses or other form of monetary award no later than August 12, 2022, and directed Impac to provide shareholder information to the parties’ class notice administrator by August 12, 2022. In addition, the Circuit Court made a preliminary determination that the 2009 Dividend Amount should be paid to current Series B Preferred stockholders, as of a record date to be established. The Circuit Court stated that it anticipated entering final injunctive relief, prior to a final class hearing date, directing the Company to declare a record date for payment to then current Series B Preferred stockholders of the dividends previously determined to be due for three quarters in 2009 and to deposit such funds in escrow until after the proper recipients of the funds are determined following the final hearing. The Circuit Court held a further conference on July 27, 2022, during which the parties discussed proposed revisions to the Class definition to include all Series B Preferred stockholders through the date of finality of final orders to be issued in the case, the method for the establishing a record date for the Company’s satisfaction of its obligations to distribute the adjudicated amount of the 2009 Dividend Amount, the final hearing date and other matters. On August 8, 2022, the Circuit Court issued an Amended Class Certification Order, which amends the definition of the class to include all Series B Preferred stockholders through the date of finality of final orders to be issued in the case, directs the Company to establish a record date of August 15, 2022 for distribution of the 2009 Dividend Amount and to pay that amount into the registry of the Circuit Court no later than August 19, 2022, to be held pending final resolution of all issues and final determination by the Court of the appropriate distribution of those funds. The Company deposited the funds on August 18, 2022. The Amended Class Certification Order states that the Company shall have no further right or obligation with respect to the funds deposited in the registry, except as necessary to effectual the final determination of the Court. The Company can take no action with respect to the 2009 Dividend Amount until the Circuit Court makes further orders. On August 12, 2022, Class Representative Camac and Lead Class Counsel filed an application for an award of attorney’s fees, expenses and an incentive award, and plaintiff Timm filed an application for an award of incentive award and expenses, in each case to be paid from benefits that members of the Series B Preferred class receive as a result of the Maryland Action, including but not limited to a portion of the 2009 Dividend Amount on deposit in the registry of the Circuit Court, and future dividends or, if the Exchange Offer (as described elsewhere in this document) closes, cash or stock to be received by Series B Preferred stockholders pursuant to the Exchange Offer and subsequent redemption. On August 25, 2022, the Circuit Court issued a further Order directing Impac to segregate cash funds and/or stock that otherwise would be paid to the Series B Preferred stockholders in the Exchange Offer and subsequent redemption within five (5) business days after closing of the Exchange Offer, either by depositing cash to Court’s registry or by transferring stock to the custody of a third party custodian or escrow holder (Stock Escrow), as the case may be. The August 25, 2022 Order provides that upon such deposit or transfer, the Company shall have no further right or obligation with respect to the disposition of such cash or stock, except to pay the costs associated with such deposit or escrow and subsequent distributions as may be ordered by the Court in its final determination following the December 5, 2022 final class hearing in the Maryland Action. The Exchange Offer was approved and closed with respect to tendered shares on October 26, 2022, and the Company deposited the required stock with a third party pursuant to the August 25, 2022 Order. On August 29, 2022, the Circuit Court issued an order approving the form and substance of the notice by which the Company and the class notice administrator are required to give notice to the Series B class of the final hearing date of December 5, 2022, and the opportunity to file objections to the proposed final injunctive relief and to the applications for awards of attorney’s fees, expenses and incentives. On dates between September 7 through September 19, the Company and the notice administrator provided the notice required by the August 29, 2022 order. No objections were made by any member of the Class to the proposed final injunctive relief. Both plaintiffs filed objections to each other’s respective applications for awards of attorney’s fees, expenses and incentives. On December 5, 2022, the Circuit Court held a final hearing on all outstanding matters identified in the notice. No Class Member other than named Plaintiffs appeared at the hearing. On December 16, 2022, the Circuit issued its Final Judgment Order directing, among other things, that Impac pay the 2009 Dividend Amount to members of the Plaintiff Class who held Series B Preferred stock as of August 15, 2022 no earlier than the 45 th day or later than the 60 th after entry of the Final Judgment Order by the Clerk, which was entered on December 19, 2022. The Final Judgment Order also granted Plaintiff Camac’s Motion for Attorney’s Fees, Litigation Costs, and Incentive Payment, granted in part and denied in part Plaintiff Timm’s Petition for Incentive Award and Payment of Costs and Expenses, and included implementing orders. No appeal was filed. In February 2023, pursuant to the Final Judgement Order, (i) the 2009 Dividend Amount was distributed to certain former Series B Preferred stockholders, with a portion going to pay attorney’s fees, litigation costs and incentive payments and (ii) the Common Stock and Series D Preferred Stock that was held in escrow was distributed to certain former Series B Preferred stockholders, with a portion of the Series D Preferred Stock going to pay attorney’s fees to Class Counsel. McNair v Impac Mortgage Corp. On September 18, 2018, a purported class action was filed in the Superior Court of California, Orange County, entitled McNair v. Impac Mortgage Corp. dba CashCall Mortgage. The plaintiff contends the defendant did not pay the plaintiff and purported class members overtime compensation, provide required meal and rest breaks, or provide accurate wage statements. The action seeks damages, restitution, penalties, interest, attorney’s fees, and all other appropriate injunctive, declaratory, and equitable relief. On March 8, 2019, a First Amended Complaint was filed, which added a claim alleging PAGA violations. On March 12, 2019, the parties filed a stipulation with the court stating (1) the plaintiff’s individual claims should be arbitrated pursuant to the parties’ arbitration agreement, (2) the class claims should be struck from the First Amended Complaint, and (3) the plaintiff will proceed solely with regard to her PAGA claims. This case was consolidated with the Batres v. Impac Mortgage Corp. dba CashCall Mortgage case discussed below with a rescheduled trial date of January 18, 2022. On October 28, 2021, the Company entered into a settlement agreement, which was amended and restated on February 17, 2022. On March 14, 2022, the court issued an order granting preliminary approval of the settlement. On October 4, 2022, the court issued an order, subsequently revised on October 19, 2022, granting final approval of the class action settlement and entering judgment, which was previously accrued for in the third quarter of 2021. On October 26, 2022, the Company deposited the required settlement amount with the third party administrator pursuant to the October 28, 2021 settlement agreement as amended and restated on February 17, 2022. Batres v. Impac Mortgage Corp. On December 27, 2018, a purported class action was filed in the Superior Court of California, Orange County, entitled Batres v. Impac Mortgage Corp. dba CashCall Mortgage. The plaintiff contends the defendant did not pay the plaintiff and purported class members overtime compensation, provide required meal and rest breaks, or provide accurate wage statements. The action seeks damages, restitution, penalties, interest, attorney’s fees, and all other appropriate injunctive, declaratory, and equitable relief. On March 14, 2019, the plaintiff filed an amended complaint alleging only PAGA violations and seeking penalties, attorneys’ fees, and such other appropriate relief. This case was consolidated with the McNair v. Impac Mortgage Corp. dba CashCall Mortgage discussed above with a rescheduled trial date of January 18, 2022. On October 28, 2021, the Company entered into a settlement agreement, which was amended and restated on February 17, 2022. On March 14, 2022, the court issued an order granting preliminary approval of the settlement. On October 4, 2022, the court issued an order, subsequently revised on October 19, 2022, granting final approval of the class action settlement and entering judgment, which was previously accrued for in the third quarter of 2021. On October 26, 2022, the Company deposited the required settlement amount with the third party administrator pursuant to the October 28, 2021 settlement agreement as amended and restated on February 17, 2022. UBS Americas Inc., et al. v. Impac Funding Corporation et al. On December 17, 2021, a summons with notice was filed in the Supreme Court of the State of New York, County of New York (NY Court), initiating a lawsuit entitled UBS Americas Inc., et al. v. Impac Funding Corporation et al. The plaintiffs contend that the defendants are required to indemnify payments that plaintiffs made to resolve claims asserted by the Federal Home Loan Bank of San Francisco and HSH Nordbank AG related to certain residential mortgage-backed securities (RMBS). Plaintiffs contend that the RMBS included loans that the defendants allegedly sold to certain UBS entities in breach of contractual representations and warranties. Plaintiffs further contend that they settled the cases for which plaintiffs are demanding indemnification in December 2015 and March 2016. On April 18, 2022, the Company accepted service of the summons with notice on behalf of Impac Funding Corp. and Impac Mortgage Holdings, Inc. On June 2, 2022, a complaint was filed with the NY Court related to the summons with notice, however Impac Mortgage Holdings, Inc. was no longer listed as a defendant in the matter. On July 25, 2022, Impac Funding Corporation filed a motion to dismiss the complaint. All parties submitted their briefs and oral arguments on the motion to dismiss were held on March 6, 2023. There is no set timeframe for the court to issue its ruling. The Company believes the claims are without merit and intends to defend itself vigorously. CrossCountry Mortgage, LLC v Impac Mortgage Holdings, Inc. and Impac Mortgage Corp. On August 4, 2022, a complaint was filed in the United States District Court for the Northern District of Ohio – Eastern Division by CrossCountry Mortgage, LLC (Plaintiff) against the Company and IMC. The Plaintiff alleges infringement of Plaintiff’s federally-registered trademark, unfair competition and false designation of origin and for substantial and related claims of deceptive trade practice under the statutory and common laws of the State of Ohio. Plaintiff is seeking injunctive and monetary relief. The Company and IMC were served with the complaint on August 8, 2022, and filed an answer on September 29, 2022. Discovery is currently ongoing between the parties. The Company and IMC believe the claims are without merit and the Company intends to defend itself vigorously. The Company is a party to other litigation and claims which are in the course of the Company’s operations. While the results of such other litigation and claims cannot be predicted with certainty, the Company believes the final outcome of such matters will not have a material adverse effect on the Company’s financial condition or results of operations. The Company believes that it has meritorious defenses to the claims and intends to defend these claims vigorously and as such the Company believes the final outcome of such matters will not have a material adverse effect on its financial condition or results of operations. Nevertheless, litigation is uncertain and the Company may not prevail in the lawsuits and can express no opinion as to their ultimate resolution. An adverse judgment in any of these matters could have a material adverse effect on the Company’s financial position and results of operations. Lease Commitments The following table presents the operating and finance lease balances within the consolidated balance sheets, weighted average remaining lease term, and weighted average discount rates related to the Company’s leases as of December 31, 2022: December 31, Lease Assets and Liabilities Classification 2022 Assets Lease ROU assets Other assets $ 1,248 Liabilities Lease liabilities Other liabilities $ 51 Weighted average remaining lease term (in years) 0.8 Weighted average discount rate 3.6 % The following table presents the maturities of the Company’s operating and finance lease liabilities as of December 31, 2022: Year 2023 $ 55 Year 2024 — Year 2025 — Year 2026 — Year 2027 — Total lease commitments $ 55 Less: imputed interest (4) Total lease liability $ 51 During the years ended December 31, 2022 and 2021, cash paid for operating leases was $5.2 million and $4.6 million, respectively. Total operating lease expense for the years ended December 31, 2022 and 2021 was $5.1 million and $4.0 million, respectively. Operating lease expense includes short-term leases and sublease income, both of which are immaterial. In December 2022, the Company recorded an additional $970 thousand in occupancy expense related to the modification and early termination of the Company’s corporate office. On December 15, 2022, IFC, a wholly-owned subsidiary of IMH, and Jacaranda Holdings, LLC (the Landlord), entered into a Lease Termination Agreement (the Termination Agreement) relating to the lease (the Lease) for the Company’s primary executive, administrative and operations offices located at 19500 Jamboree Road, Irvine, California (the Premises). The Lease, as amended, was originally entered into in March 2005, and the Premises currently consists of approximately 120,000 square feet. Pursuant to the Termination Agreement, IFC and Landlord agreed to terminate the Lease on January 31, 2023, in lieu of the Lease’s original expiration date of September 30, 2024. In accordance with the terms of the Termination Agreement, on December 16, 2022, IFC paid to the Landlord the termination consideration of $3.0 million, among other required action items. As a result of the Termination Agreement, the Company accounted for the termination as a lease modification, recording an additional $970 thousand of occupancy expense in December 2022 related to the modification, with an additional $1.2 million in occupancy expense occurring in January 2023, when the premises were vacated. During the year ended December 31, 2022, the Company recorded $123 thousand in ROU asset impairment charges related to the sublease of approximately 1,900 square feet of a floor within the Company’s previous corporate office, reducing the carrying value of the lease asset to its estimated fair value. The impairment charges recorded in 2022 are included in general, administrative and other expense in the accompanying consolidated statements of operations and comprehensive loss. In January 2023, the Company entered into a new sublease agreement for approximately 18,900 per square foot of executive, administrative and operations workspace in Newport Beach, California. The term of the new lease term is through July 31, 2025 with an average rent of $1.35 per square foot over the term of the lease, which including CAM charges willtotal approximately $800 thousand. Repurchase Reserve The provision for repurchases represents an estimate of losses to be incurred on the repurchase of loans or indemnification of purchaser's losses related to loan sales. Certain sale contracts and GSE standards require the Company to repurchase a loan or indemnify the purchaser or insurer for losses if a borrower fails to make initial loan payments or if the accompanying mortgage loan fails to meet certain customary representations and warranties. In the event of a breach of the representations and warranties, the Company may be required to either repurchase the loan or indemnify the purchaser for losses it sustains on the loan. In addition, an investor may request that the Company refund a portion of the premium paid on the sale of mortgage loans if a loan is prepaid within a certain amount of time from the date of sale. The Company records a reserve for estimated losses associated with loan repurchases, purchaser indemnification and premium refunds. The provision for repurchase losses is charged against gain on sale of loans, net in the consolidated statements of operations and comprehensive loss. A release of repurchase reserves is recorded when the Company's assessment reveals that previously recorded reserves are no longer needed. Loans sold to Ginnie Mae are insured by the FHA or are guaranteed by the VA. As servicer, the Company may elect to repurchase delinquent loans in accordance with Ginnie Mae guidelines; however, the loans continue to be insured. The Company may also indemnify the FHA and VA for losses related to loans not originated in accordance with their guidelines. The Company regularly evaluates the adequacy of repurchase reserves based on trends in repurchase and indemnification requests, actual loss experience, settlement negotiation, estimated future loss exposure and other relevant factors including economic conditions. The Company sold $979 million and $2.8 billion of loans for the years ended December 31, 2022 and 2021, respectively, which are subject to repurchase representations and warranties. The Company believes its reserve balances as of December 31, 2022 are sufficient to cover loss exposure associated with repurchase contingencies. The following table summarizes the repurchase reserve activity (included in other liabilities in the accompanying consolidated balance sheets) related to previously sold loans for the years ended December 31, 2022 and 2021: December 31, December 31, 2022 2021 Beginning balance $ 4,744 $ 7,054 Provision for repurchases (1) 2,417 111 Settlements (1,286) (2,421) Total repurchase reserve $ 5,875 $ 4,744 (1) The provision for repurchases is included in gain on sale of loans, net in the accompanying consolidated statements of operations and comprehensive loss. Corporate-owned Life Insurance Trusts During the first quarter of 2020, there was a triggering event that caused the Company to reevaluate the consolidation of certain corporate-owned life insurance trusts. As a result, the Company has consolidated life insurance trusts for three former executive officers. The corporate-owned life insurance contracts are recorded at cash surrender value, which is provided by a third party and held within trusts. At December 31, 2022 and 2021, the cash surrender value of the policies was $11.6 million and $10.8 million, respectively, and were recorded within other assets on the consolidated balance sheets. At December 31, 2022 and 2021, the liability associated with the corporate-owned life insurance trusts was $13.6 million and $13.0 million, respectively, and was recorded within other liabilities on the consolidated balance sheets. At December 31, 2022 Corporate-owned life insurance trusts: Trust #1 Trust #2 Trust #3 Total Corporate-owned life insurance cash surrender value $ 5,314 $ 4,125 $ 2,180 $ 11,619 Corporate-owned life insurance liability 6,280 4,923 2,398 13,601 Corporate-owned life insurance shortfall (1) $ (966) $ (798) $ (218) $ (1,982) (1) $1.3 million of the total shortfall was recorded as a change in retained deficit at the time of the consolidation of the trusts in 2020. The additional shortfall was recorded in the accompanying consolidated statements of operations and comprehensive loss. Concentration of Risk The Company sells mortgage loans to various third-party investors. The largest five investors accounted for 75% of the Company’s loan sales for the year ended December 31, 2022. No other investors accounted for more than 5% of the loan sales for the year ended December 31, 2022. The Company also has geographic concentration risk because 57% of the Company’s mortgage loan originations during 2022 were for borrowers located in California. |
Share Based Payments and Employ
Share Based Payments and Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Share Based Payments and Employee Benefit Plans | |
Share Based Payments and Employee Benefit Plans | Note 14.—Share Based Payments and Employee Benefit Plans The Company maintains an equity-based incentive compensation plan, the terms of which are governed by the 2020 Equity Incentive Plan (the 2020 Incentive Plan). The 2020 Incentive Plan provides for the grant of stock appreciation rights, RSUs, DSUs, performance shares and other stock and cash-based incentive awards. Employees, directors, consultants or other persons providing services to the Company or its affiliates are eligible to receive awards pursuant to the 2020 Incentive Plan. In connection with the adoption of the 2020 Incentive Plan, the Company’s 2010 Omnibus Incentive Plan (2010 Plan), which was scheduled to expire in July 2020, was frozen for new grants. The 2010 Plan will remain in place only for the issuance of shares of common stock pursuant to equity compensation awards outstanding under the 2010 Plan, which awards will continue to be governed by the terms of the 2010 Plan. As of December 31, 2022, the aggregate number of shares reserved under the 2020 Incentive Plan and 2010 Plan, was 2,000,000 and 722,006 shares, respectively, and there were 1,540,490 shares available for grants as stock options, RSUs, DSUs or other stock and cash-based incentive awards under the 2020 Incentive Plan. The Company issues new shares of common stock to satisfy stock option exercises, RSU vesting, DSU issuances and other stock-based incentive awards. The fair value of options granted ( no options were granted in 2022), which is amortized to expense over the option service period, is estimated on the date of grant with the following weighted average assumptions: Granted in 2021 Risk-free interest rate 0.50% Expected lives (in years) 4.54 Expected volatility 77.55% Expected dividend yield 0.00% Fair value per share $ 1.96 The following table summarizes activity, pricing and other information for the Company’s stock options for the years presented below: For the Year Ended December 31, 2022 2021 Weighted- Weighted- Average Average Number of Exercise Number of Exercise Shares Price Shares Price Options outstanding at the beginning of the year 570,228 $ 7.89 524,357 $ 8.58 Options granted — — 85,154 3.29 Options exercised — — — — Options forfeited/cancelled (38,750) 8.33 (39,283) 7.15 Options outstanding at the end of the period 531,478 7.86 570,228 7.89 Options exercisable at the end of the period 496,790 $ 8.18 406,361 $ 9.65 The aggregate intrinsic value in the following table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $0.17 and $1.11 per common share as of December 31, 2022 and 2021, respectively. Aggregate intrinsic value represents the amount of proceeds the option holders would have received had all option holders exercised their options and sold the stock as of that date. As of December 31, 2022 2021 Weighted- Weighted- Average Aggregate Average Aggregate Remaining Intrinsic Remaining Intrinsic Life Value Life Value (Years) (in thousands) (Years) (in thousands) Options outstanding at end of year 5.00 $ - 6.77 $ - Options exercisable at end of year 4.78 $ - 5.96 $ - As of December 31, 2022, there was approximately $43 thousand of total unrecognized compensation cost related to stock option compensation arrangements granted, net of estimated forfeitures. That cost is expected to be recognized over the remaining weighted average period of 1.1 years. For the years ended December 31, 2022 and 2021, the aggregate grant-date fair value of stock options granted was zero and $167 thousand, respectively. For the years ended December 31, 2022 and 2021, total stock-based compensation expense was $678 thousand and $884 thousand, respectively. Additional information regarding stock options outstanding as of December 31, 2022 is as follows: Stock Options Outstanding Options Exercisable Weighted- Average Weighted- Weighted- Exercise Remaining Average Average Price Number Contractual Exercise Number Exercise Range Outstanding Life in Years Price Exercisable Price $ 3.22 - 3.74 126,538 6.23 $ 3.47 91,850 $ 3.53 3.75 - 5.38 200,000 6.16 3.75 200,000 3.75 5.39 - 9.85 27,582 3.01 7.01 27,582 7.01 9.86 - 17.39 79,608 3.24 11.84 79,608 11.84 17.40 - 20.49 48,750 3.55 17.40 48,750 17.40 20.50 - 20.50 49,000 2.56 20.50 49,000 20.50 $ 3.22 - 20.50 531,478 5.00 $ 7.86 496,790 $ 8.18 In addition to the options granted, the Company has granted DSUs, which vest between one and three year periods. The fair value of each DSU was measured on the date of grant using the grant date price of the Company’s stock. In 2022, the Company did no t grant any DSUs. The following table summarizes activity, pricing and other information for the Company’s DSUs for the year ended December 31, 2022: Weighted- Average Number of Grant Date Shares Fair Value DSUs outstanding at the beginning of the year 54,500 $ 6.61 DSUs granted — — DSUs issued (converted) (15,000) 3.75 DSUs forfeited/cancelled — — DSUs outstanding at the end of the period 39,500 $ 7.70 As of December 31, 2022, there was no total unrecognized compensation cost related to the DSU compensation arrangements granted under the plan. The following table summarizes activity, pricing and other information for the Company’s RSUs for the ended December 31, 2022: Weighted- Average Number of Grant Date Shares Fair Value RSUs outstanding at beginning of the year 397,829 $ 4.11 RSUs granted — — RSUs issued (converted) (155,080) 4.31 RSUs forfeited/cancelled (21,365) 3.83 RSUs outstanding at end of the period 221,384 $ 4.00 As of December 31, 2022, there was approximately $321 thousand of total unrecognized compensation cost related to the RSU compensation arrangements granted under the plan. This cost is expected to be recognized over a weighted average period of 1.0 years. 401(k) Plan After meeting certain employment requirements, employees can participate in the Company’s 401(k) plan. Under the 401(k) plan, employees may contribute up to 25% of their salaries, pursuant to certain restrictions. Effective January 1, 2020, the Company matches 50% of the first 6% of employee contributions. Additional contributions may be made at the discretion of the board of directors. During the years ended December 31, 2022 and 2021, the Company recorded compensation expense of approximately $402 thousand and $1.0 million for basic matching contributions, respectively. There were no discretionary matching contributions recorded during the years ended December 31, 2022 or 2021. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions | |
Related Party Transactions | Note 15.—Related Party Transactions In May 2015, the Company issued the 2015 Convertible Notes to purchasers, some of which are related parties. See Note 5.—Debt — Convertible Notes. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events | |
Subsequent Events | Note 16.—Subsequent Events In January 2023, the Company entered into a new sublease agreement for approximately 18,900 sq. ft. of executive, administrative and operations workspace. The term of the new lease term is through July 31, 2025 with an average rent of $1.35 sq. ft. over the term of the lease, which including CAM charges would total approximately $800 thousand. Subsequent events have been evaluated through the date of this filing. |
Summary of Business and Finan_2
Summary of Business and Financial Statement Presentation including Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Business and Financial Statement Presentation including Significant Accounting Policies | |
Financial Statement Presentation | Basis of Presentation The accompanying consolidated financial statements of IMH and its subsidiaries (as defined above) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). All significant inter-company balances and transactions have been eliminated in consolidation. In addition, certain immaterial amounts in the prior periods’ consolidated financial statements have been reclassified to conform to the current year presentation. Management has made a number of material estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. Additionally, other items affected by such estimates and assumptions include the valuation of trust assets and trust liabilities, contingencies, the estimated obligation of repurchase liabilities related to sold loans, the valuation of long-term debt, mortgage servicing rights (MSRs), mortgage loans held-for-sale (LHFS) and derivative instruments, including interest rate lock commitments (IRLCs). Actual results could differ from those estimates and assumptions. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include accounts of IMH and its wholly-owned subsidiaries. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist in entities, such as variable interest entities (VIEs), through arrangements that do not involve voting interests. The VIE framework requires a variable interest holder (counterparty to a VIE) to consolidate the VIE if that party has the power to direct activities of the VIE that most significantly impact the entity’s economic performance, will absorb a majority of the expected losses of the VIE, will receive a majority of the residual returns of the VIE, or both, and directs the significant activities of the entity. This party is considered the primary beneficiary of the entity. The determination of whether the Company meets the criteria to be considered the primary beneficiary of a VIE requires an evaluation of all transactions (such as investments, liquidity commitments, derivatives and fee arrangements) with the entity. The assessment of whether or not the Company is the primary beneficiary of the VIE is performed on an ongoing basis. |
Fair Value and the Fair Value Option | Fair Value and the Fair Value Option Fair value is a market-based measurement, not an entity-specific measurement. For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the same—to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions (that is, an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability). The fair value option permits entities to choose, at specified election dates, to measure eligible financial assets and financial liabilities at fair value. The decision to elect the fair value option is applied on an instrument by instrument basis, is irrevocable unless a new election date occurs, and is applied to an entire instrument. The Company has elected the fair value option for MSRs, mortgage LHFS, long-term debt and its consolidated non-recourse securitizations (securitized mortgage collateral and securitized mortgage borrowings), prior to the sale in the first quarter of 2022. Elections were made to mitigate income statement volatility caused by differences in the measurement basis of elected instruments. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash and highly liquid investments with maturities of three months or less at the date of acquisition. The carrying amount of cash and cash equivalents approximates fair value. Cash balances that have restrictions as to the Company’s ability to withdraw funds are considered restricted cash. At December 31, 2022 and 2021, restricted cash totaled $4.1 million and $5.7 million, respectively. The restricted cash is primarily collateral against letter of credit financing associated with corporate-owned life insurance (See Note 13.—Commitments and Contingencies) as well as cash required in conjunction with the terms of the Company’s warehouse borrowing agreements. In accordance with the terms of the Master Repurchase Agreements related to the warehouse borrowings, the Company is required to maintain cash balances with the lender as additional collateral for the borrowings (See Note 5.—Debt). |
Mortgage Loans Held-for-Sale | Mortgage Loans Held-for-Sale Mortgage LHFS are accounted for using the fair value option, with changes in fair value recorded in gain on sale of loans, net in the accompanying consolidated statements of operations and comprehensive loss. In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825, Financial Instruments , loan origination fees and expenses are recognized in earnings as incurred and not deferred. Revenue derived from the Company’s mortgage lending activities includes loan fees collected at the time of origination and gain or loss from the sale of LHFS. Loan fees consist of fee income earned on all loan originations, including loans closed and held-for-sale. Loan fees are recognized as earned and consist of amounts collected for application and underwriting fees, fees on cancelled loans and discount points. The related direct loan origination costs are recognized when incurred and consists of broker fees and commissions. Gain or loss from the sale and mark-to-market adjustments of LHFS includes both realized and unrealized gains and losses and are included in gain on sale of loans, net in the accompanying consolidated statements of operations and comprehensive loss. The valuation of LHFS approximates a whole-loan price, which includes the value of the related MSRs. The Company primarily sells its LHFS to investors and government sponsored entities (GSEs). 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 a realized 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 on loans is recorded as income when earned and deemed collectible. LHFS are placed on nonaccrual 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 nonaccrual 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. |
Mortgage Servicing Rights | Mortgage Servicing Rights The Company accounts for mortgage loan sales in accordance with FASB ASC 860, Transfers and Servicing . Upon sale of mortgage loans on a servicing-retained basis, the LHFS are removed from the consolidated balance sheets and MSRs are recorded as an asset for servicing rights retained. The Company elects to measure MSRs at fair value as prescribed by FASB ASC 860-50-35, and as such, servicing assets or liabilities are valued using discounted cash flow modeling techniques using assumptions regarding future net servicing cash flow, including prepayment rates, discount rates, servicing cost and other factors. Changes in estimated fair value are reported in the accompanying consolidated statements of operations and comprehensive loss within gain on mortgage servicing rights, net. When the Company sells MSRs, the Company records a gain or loss on such sale based on the selling price of the MSRs less the carrying value and transaction costs. Gains and losses are reported in the accompanying consolidated statements of operations and comprehensive loss within gain on mortgage servicing rights, net. |
Consolidated Non-recourse Securitizations | Consolidated Non-recourse Securitizations In March 2022, the Company and its subsidiaries (the Sellers), entered into a Purchase, Sale and Assignment Agreement (Sale Agreement) pursuant to which the Sellers sold certain residual interest certificates, and assigned certain optional termination and loan purchase rights, owned by the Sellers relating to 37 securitizations that closed between 2000 and 2007 (the Securitizations). As a result of the sale, in accordance with FASB ASC 810-10-25, the Company deconsolidated the securitized mortgage trust assets and liabilities as of the sale date as it was no longer the primary beneficiary of the consolidated securitization trusts. The Company shall remain the master servicer with respect to all of the securitizations until such time that the deals are collapsed or payoff. For a description of the sale, see Note 6.– Securitized Mortgage Trusts. |
Securitized Mortgage Collateral | The Company’s long-term mortgage portfolio primarily included adjustable rate and, to a lesser extent, fixed rate non-conforming mortgages and commercial mortgages that were acquired and originated by the Company’s mortgage and commercial operations prior to 2008. Historically, the Company securitized mortgages in the form of collateralized mortgage obligations (CMO) or real estate mortgage investment conduits (REMICs). These securitizations were evaluated for consolidation based on the provisions of FASB ASC 810-10-25. Amounts consolidated were included in trust assets and liabilities as securitized mortgage collateral, real estate owned (REO) and securitized mortgage borrowings in the accompanying consolidated balance sheets. The Company also retained the master servicing rights associated with these securitizations which pays the Company approximately 3 basis points on the outstanding unpaid principal balance (UPB) of each securitization trust. Prior to the sale, the retention of the master servicing rights or the retained economic subordinated residual interests provided the Company with clean up call rights on these securitizations. The Company accounted for securitized mortgage collateral at fair value, with changes in fair value during the period reflected in earnings. Fair value measurements were based on the Company’s estimated cash flow models, which incorporated assumptions, inputs of other market participants and quoted prices for the underlying bonds. The Company’s assumptions included its expectations of inputs that other market participants would use. These assumptions included judgments about the underlying collateral, prepayment speeds, credit losses, investor yield requirements, forward interest rates and certain other factors. Interest income on securitized mortgage collateral was recorded using the effective yield for the period based on the previous quarter-end’s estimated fair value. Securitized mortgage collateral is generally not placed on nonaccrual status as the servicer advances the interest payments to the trust regardless of the delinquency status of the underlying mortgage loan, until it becomes apparent to the servicer that the advance is not collectible. |
Real Estate Owned | Real estate owned on the consolidated balance sheets were primarily assets within the securitized trusts but recorded as a separate asset for accounting and reporting purposes and were within the long-term mortgage portfolio. REO, which consisted of residential real estate acquired in satisfaction of loans, was carried at net realizable value, which included the estimated fair value of the residential real estate less estimated selling and holding costs. Adjustments to the loan carrying value required at the time of foreclosure affect the carrying amount of REO. Subsequent write-downs in the net realizable value of REO were included in change in fair value of net trust assets, including trust REO gains in the consolidated statements of operations and comprehensive loss. |
Securitized Mortgage Borrowings | The Company recorded securitized mortgage borrowings in the accompanying consolidated balance sheets for the consolidated CMO and REMIC securitized trusts within the long-term mortgage portfolio. The debt from each issuance of a securitized mortgage borrowing was payable from the principal and interest payments on the underlying mortgages collateralizing such debt, as well as the proceeds from liquidations of REO. If the principal and interest payments were insufficient to repay the debt, the shortfall was allocated first to the residual interest holders (generally owned by the Company) then, if necessary, to the certificate holders (e.g. third party investors in the securitized mortgage borrowings) in accordance with the specific terms of the various respective indentures. Securitized mortgage borrowings typically were structured as one-month London Interbank Offered Rate (LIBOR) “floaters” and fixed rate securities with interest payable to certificate holders monthly. The maturity of each class of securitized mortgage borrowing was directly affected by the amount of net interest spread, overcollateralization and the rate of principal prepayments and defaults on the related securitized mortgage collateral. The actual maturity of any class of a securitized mortgage borrowing could occur later than the stated maturities of the underlying mortgages. When the Company issued securitized mortgage borrowings, the Company generally sought an investment grade rating for the Company’s securitized mortgages by nationally recognized rating agencies. To secure such ratings, it was often necessary to incorporate certain structural features that provided for credit enhancement. This generally included the pledge of collateral in excess of the principal amount of the securities to be issued, a bond guaranty insurance policy for some or all of the issued securities, or additional forms of mortgage insurance. These securitization transactions were non-recourse to the Company and the total loss exposure was limited to the Company’s initial net economic investment in each trust, which was referred to as a residual interest. The Company accounted for securitized mortgage borrowings at fair value, with changes in fair value during the period reflected in earnings. Fair value measurements were based on the Company’s estimated cash flow models, which incorporated assumptions, inputs of other market participants and quoted prices for the underlying bonds. The Company’s assumptions included its expectations of inputs that other market participants would use. These assumptions included judgments about the underlying collateral, prepayment speeds, credit losses, investor yield requirements, forward interest rates and certain other factors. Interest expense on securitized mortgage borrowings was recorded quarterly using the effective yield for the period based on the previous quarter-end’s estimated fair value. |
Leases | Leases The Company has two operating leases for office space expiring at various dates through 2025 and one financing lease which concludes in 2023. During the fourth quarter of 2022, the Company entered into a lease termination agreement for the Company’s primary executive, administrative and operations offices. For a description of the lease termination agreement, see Note 13.– Commitments and Contingencies - Lease Commitments . The Company determines if a contract is a lease at the inception of the arrangement and reviews all options to extend, terminate, or purchase its right of use (ROU) assets at the inception of the lease and accounts for these options when they are reasonably certain of being exercised. Regarding the discount rate, Accounting Standards Update (ASU) 2016-02, “ Leases (Topic 842) ”, requires the use of the rate implicit in the lease whenever this rate is readily determinable. When the Company cannot readily determine the rate implicit in the lease, the Company determines its incremental borrowing rate by using the rate of interest that it would have to pay to borrow on a collateralized basis over a similar term. As a practical expedient permitted under ASC 842, the Company elected to account for the lease and non-lease components as a single lease component for all leases of which it is the lessee. Leases with an initial term of 12 months or less are not recorded in the consolidated balance sheets and lease expense for these leases is recognized on a straight-line basis over the lease term. |
Derivative Instruments | Derivative Instruments In accordance with FASB ASC 815-10 Derivatives and Hedging—Overview , the Company records all derivative instruments at fair value. The Company has accounted for all its derivatives as non-designated hedge instruments or free-standing derivatives. The mortgage lending operation enters into IRLCs with consumers to originate mortgage loans at a specified interest rate. These IRLCs are accounted for as derivative instruments and reported at fair value. The concept of fair value relating to IRLCs is no different than fair value for any other financial asset or liability: fair value is the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. Because IRLCs do not trade in the market, the Company determines the estimated fair value based on expectations of what an investor would pay to acquire the Company’s IRLCs, which utilizes current market information for secondary market prices for underlying loans and estimated servicing value with similar coupons, maturities and credit quality, subject to the anticipated loan funding probability (pull-through rate). This value is adjusted for other costs that would be required by a market participant acquiring the IRLCs. The fair value of IRLCs is subject to change primarily due to changes in interest rates and the estimated pull-through rate. The Company reports IRLCs within other assets and other liabilities at fair value in the accompanying consolidated balance sheets with changes in fair value being recorded in the accompanying consolidated statements of operations and comprehensive loss within gain on sale of loans, net. The Company hedges the changes in fair value associated with changes in interest rates related to IRLCs and uncommitted LHFS by using forward delivery commitments on mortgage-backed securities (MBS), including Federal National Mortgage Association (Fannie Mae or FNMA), Government National Mortgage Association (Ginnie Mae or GNMA) MBS known as to-be-announced mortgage-backed securities (TBA MBS), interest rate swap futures (swap futures) and forward delivery commitments on whole loans. The TBA MBS, forward loan commitments and swap futures (collectively the Hedging Instruments) are used to fix the forward sales price that will be realized upon the sale of mortgage loans into the secondary market and are accounted for as derivative instruments. The fair value of these Hedging Instruments are subject to change primarily due to changes in interest rates. The Company reports Hedging Instruments within other assets and other liabilities in the accompanying consolidated balance sheets at fair value with changes in fair value being recorded in the accompanying consolidated statements of operations and comprehensive loss within gain on sale of loans, net. The fair value of IRLCs and Hedging Instruments are represented as derivative assets, lending, net and derivative liabilities, lending, net in Note 9.—Fair Value of Financial Instruments . |
Long-term Debt | Long-term Debt Long-term debt (junior subordinated notes) is reported at fair value. These securities are measured based upon an analysis prepared by management, which considers the Company’s own credit risk and expected cash flow analysis in 2022 and discounted cash flow analysis in 2021. With the adoption of FASB ASU 2016-01 in 2018, which applies when the Company elects the fair value election on its own debt, the Company effectively bifurcates the market and instrument specific credit risk components of changes in long-term debt. The market portion continues to be a component of net loss as the change in fair value of long-term debt, but the instrument specific credit risk portion is a component of accumulated other comprehensive loss in the accompanying consolidated statements of operations and comprehensive loss. |
Repurchase Reserve | Repurchase Reserve The Company sells mortgage loans in the secondary market, including U.S. GSEs, and issues MBS through Ginnie Mae and Fannie Mae. When the Company sells or issues securities, it makes customary representations and warranties to the purchasers about various characteristics of each loan such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local laws. In the event of a breach of its representations and warranties, the Company may be required to either repurchase the mortgage loans with the identified defects or indemnify the investor or insurer for any loss. In addition, the Company may be required to repurchase loans as a result of borrower fraud or if a payment default occurs on a mortgage loan shortly after its sale. The Company’s loss may be reduced by proceeds from the sale or liquidation of the repurchased loan. Also, the Company’s loss may be reduced by any recourse it has to correspondent lenders that, in turn, had sold such mortgage loans to the Company and breached similar or other representations and warranties. In such event, the Company has the right to seek a recovery of related repurchase losses from that correspondent lender. The Company records a provision for losses relating to such representations and warranties as part of its loan sale transactions. The method used to estimate the liability for representations and warranties is a function of the representations and warranties given and considers a combination of factors, including, but not limited to, estimated future defaults and loan repurchase rates and the potential severity of loss in the event of defaults including any loss on sale or liquidation of the repurchased loan and the probability of reimbursement by the correspondent loan seller. The Company establishes a liability at the time loans are sold and continually updates its estimated repurchase liability. The level of the repurchase liability for representations and warranties is difficult to estimate and requires considerable management judgment. The level of mortgage loan repurchase losses is dependent on economic factors, investor demands for loan repurchases and other external conditions that may change over the lives of the underlying loans. |
Revenue Recognition for Fees from Services | Revenue Recognition for Fees from Services The Company follows FASB ASC 606, Revenue Recognition , which provides guidance on the application of GAAP to selected revenue recognition issues related to the Company’s real estate services fees. Under FASB ASC 606, the Company must identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the Company satisfies a performance obligation. The Company’s primary sources of revenue are derived from financial instruments that are not within the scope of FASB ASC 606. The Company has evaluated the nature of its contracts with customers and determined that further disaggregation of revenue from contracts with customers into more granular categories beyond what is presented in the consolidated statements of operations and comprehensive loss, was not necessary. The Company generally fully satisfies its performance obligations on its contracts with customers as services are rendered and the transaction prices are typically fixed; charged either on a periodic basis or based on activity. Because performance obligations are satisfied as services are rendered and the transaction prices are fixed, the Company has made no significant judgments in applying the revenue guidance prescribed in ASC 606 that affect the determination of the amount and timing of revenue from contracts with customers. The revenues from these services are recognized in income in the period when services are rendered and collectability is reasonably certain. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and are included in business promotion expense in the accompanying consolidated statements of operations and comprehensive loss. For the years ended December 31, 2022 and 2021, business promotion expense was $4.4 million and $7.4 million, respectively. |
Equity-Based Compensation | Equity-Based Compensation The Company accounts for stock-based compensation in accordance with FASB ASC 718 Compensation—Stock Compensation . The Company uses the grant-date fair value of equity awards to determine the compensation cost associated with each award. Grant-date fair value is determined using the Black-Scholes pricing model and assumptions noted in Note 14.—Share Based Payments and Employee Benefit Plans, adjusted for unique characteristics of the specific awards. Compensation cost for service-based equity awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. FASB ASC 718 requires forfeitures to be estimated at the time of grant and prospectively revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Stock-based compensation expense is recorded net of estimated forfeitures for the years ended December 31, 2022 and 2021, such that the expense was recorded only for those stock-based awards that were expected to vest during such periods. The cost of equity-based compensation is recorded to personnel expense in the consolidated statements of operations and comprehensive loss. Refer to Note 14.—Share Based Payments and Employee Benefit Plans. |
Income Taxes | Income Taxes In accordance with FASB ASC 740, Income Taxes , the Company records income tax expense as well as deferred tax assets and liabilities. Current income tax expense or benefit approximates taxes to be paid or refunded for the current period, respectively, and includes income tax expense related to uncertain tax positions. The Company determines deferred income taxes using the balance sheet method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and recognizes enacted changes in tax rates and laws in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized subject to management’s judgment that realization is “more likely than not.” Uncertain tax positions that meet the more likely than not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at the largest amount of benefit that management believes has a greater than 50% likelihood of realization upon settlement. The Company is subject to federal income taxes as a regular (Subchapter C) corporation and files a consolidated U.S. federal income tax return on qualifying subsidiaries. The Company files federal and various states income tax returns in the U.S. The Company adopted FASB ASU 2019-12 on a prospective basis on January 1, 2020 (See Note 11.—Income Taxes). The most significant impact to the Company included the removal of the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items (for example, discontinued operations or other comprehensive income). The changes also add a requirement for an entity to reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. |
Loss per Common Share | Loss Per Common Share Basic loss per common share is computed on the basis of the weighted average number of shares outstanding for the year divided by net loss for the year. Diluted loss per common share is computed on the basis of the weighted average number of shares and dilutive common equivalent shares outstanding for the year divided by net loss for the year, unless anti-dilutive. Refer to Note 10.—Reconciliation of Loss Per Common Share. |
Recent Accounting Pronouncements Not Yet Effective | Recent Accounting Pronouncements Not Yet Effective In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” (ASU 2016-13) , which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model and generally will result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. Subsequent to issuing ASU 2016-13, the FASB issued ASU 2018-19, “ Codification Improvements to Topic 326, Financial Instruments—Credit Losses” , for the purpose of clarifying certain aspects of ASU 2016-13. ASU 2018-19 has the same effective date and transition requirements as ASU 2016-13. In April 2019, the FASB issued ASU 2019-04, “ Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging ,” and “ Topic 825, Financial Instruments (ASU 2019-04) ,” which is effective with the adoption of ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, “ Financial Instruments – Credit Losses (Topic 326)” , which is also effective with the adoption of ASU 2016-13. In October 2019, the FASB voted to delay the implementation date for smaller reporting companies until January 1, 2023. The Company adopted this ASU on January 1, 2023 and the adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In March 2020 and January 2021, the FASB issued ASU 2020-04 and ASU 2021-01, “ Reference Rate Reform (Topic 848)” . Together, the ASUs provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates. This guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, “ Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 ”, which extends the period of time entities can utilize the reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . FASB ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective January 1, 2024, for the Company. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated financial statements. |
Mortgage Loans Held-for-Sale (T
Mortgage Loans Held-for-Sale (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Mortgage Loans Held-for-Sale | |
Summary of the unpaid principal balance (UPB ) of mortgage loans held-for-sale by type | December 31, December 31, 2022 2021 Government (1) $ — $ 6,886 Conventional (2) 2,506 62,759 Jumbo & Non-qualified mortgages (NonQM) 11,658 231,142 Fair value adjustment (3) (1,112) 7,690 Total mortgage loans held-for-sale $ 13,052 $ 308,477 (1) Includes all government-insured loans including Federal Housing Administration (FHA), Veterans Affairs (VA) and United States Department of Agriculture (USDA). (2) Includes loans eligible for sale to Fannie Mae and Federal Home Loan Mortgage Corporation (Freddie Mac or FHLMC). (3) Changes in fair value are included in gain on sale of loans, net on the accompanying consolidated statements of operations and comprehensive loss. |
Schedule of gain on sale of loans, net | For the Year Ended December 31, 2022 2021 Gain on sale of mortgage loans $ 18,825 $ 81,362 Premium from servicing retained loan sales 46 536 Unrealized loss from derivative financial instruments (3,003) (4,076) Gain from derivative financial instruments 6,221 1,934 Mark to market (loss) gain on LHFS (8,802) 3,395 Direct origination expenses, net (4,553) (17,746) Provision for repurchases (2,417) (111) Gain on sale of loans, net $ 6,317 $ 65,294 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Mortgage Servicing Rights | |
Schedule of changes in the fair value of MSRs | December 31, December 31, 2022 2021 Balance at beginning of year $ 749 $ 339 Additions from servicing retained loan sales 46 536 Reductions from bulk sales (725) — Changes in fair value (1) (70) (126) Fair value of MSRs at end of period $ — $ 749 (1) Changes in fair value are included within gain on mortgage servicing rights, net in the accompanying consolidated statements of operations and comprehensive loss. |
Schedule of the outstanding loans serviced by entity | December 31, December 31, 2022 2021 Government insured $ — $ 71,841 Conventional — — Total loans serviced $ — $ 71,841 |
Schedule of hypothetical changes in the fair values of MSRs | December 31, December 31, Mortgage Servicing Rights Sensitivity Analysis 2022 2021 Fair value of MSRs $ — $ 749 Prepayment Speed: Decrease in fair value from 10% adverse change — (24) Decrease in fair value from 20% adverse change — (48) Decrease in fair value from 30% adverse change — (70) Discount Rate: Decrease in fair value from 10% adverse change — (31) Decrease in fair value from 20% adverse change — (59) Decrease in fair value from 30% adverse change — (85) |
Schedule of gain on mortgage servicing rights | For the Year Ended December 31, 2022 2021 Change in fair value of mortgage servicing rights $ (70) $ (126) Gain on sale of mortgage servicing rights 264 160 Gain on mortgage servicing rights, net $ 194 $ 34 |
Schedule of components of servicing (expense) fees, net | For the Year Ended December 31, 2022 2021 Contractual servicing fees $ 251 $ 193 Subservicing and other costs (188) (625) Servicing fees (expense), net $ 63 $ (432) |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Other Assets | |
Schedule of other assets | December 31, December 31, 2022 2021 Corporate-owned life insurance (See Note 13) $ 11,619 $ 10,788 Prepaid expenses 2,410 3,460 Right of use asset (See Note 13) 1,248 10,209 Accounts receivable, net 916 4,770 Servicing advances 735 565 Premises and equipment, net 220 636 Accrued interest receivable 75 625 Derivative assets – lending (See Note 7) 52 3,111 Other — 1,102 Loans eligible for repurchase from Ginnie Mae — 337 Total other assets $ 17,275 $ 35,603 |
Schedule of premises and equipment and accumulated depreciation | December 31, 2022 2021 Premises and equipment $ 6,209 $ 6,391 Less: Accumulated depreciation (5,989) (5,755) Total premises and equipment, net $ 220 $ 636 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt | |
Schedule of contractual debt maturities | Payments Due by Period Less Than One to Three to More Than Total One Year Three Years Five Years Five Years Warehouse borrowings $ 3,622 $ 3,622 $ — $ — $ — Convertible notes 15,000 5,000 10,000 — — Long-term debt 62,000 — — — 62,000 Total debt obligations $ 80,622 $ 8,622 $ 10,000 $ — $ 62,000 |
Schedule of information on warehouse borrowings | The following table presents certain information on warehouse borrowings for the periods indicated: Maximum Balance Outstanding at Allowable Borrowing December 31, December 31, Advance Rate Capacity 2022 2021 Rates (%) Range Maturity Date Short-term borrowings: Repurchase agreement 1 (1) $ — $ — $ 30,009 90 - 98 1ML + 2.00 - 2.25% May 24, 2022 Repurchase agreement 2 (2) — — 153,006 100 1ML + 1.75% September 13, 2022 Repurchase agreement 3 (3) 16,000 98 56,794 100 Note Rate - 0.375% October 20, 2023 Repurchase agreement 4 (4) 25,000 3,524 45,730 99 Note Rate - 0.50 - 0.75% December 31, 2022 Total warehouse borrowings $ 41,000 $ 3,622 $ 285,539 _________________________ (1) Repurchase agreement 1 was not renewed. (2) Repurchase agreement 2 was not renewed. (3) In October 2022, the Company entered into an agreement for a $1.0 million committed line in addition to the uncommitted line. In November 2022, the uncommitted portion of the line was renewed and reduced to $15.0 million for a total line size of $16.0 million. (4) At December 31, 2022, the line expired, was not renewed and paid off with the loan sales in January 2023. The following table presents certain information on warehouse borrowings for the periods indicated: For the Year Ended December 31, 2022 2021 Maximum outstanding balance during the year $ 269,950 $ 336,648 Average balance outstanding for the year 74,435 191,794 UPB of underlying collateral (mortgage loans) 4,577 296,841 Weighted average interest rate for period 4.19 % 3.41 % |
Schedule of remaining principal balance and fair value | December 31, 2022 2021 Junior Subordinated Notes (1) $ 62,000 $ 62,000 Fair value adjustment (2) (34,247) (15,464) Total Junior Subordinated Notes $ 27,753 $ 46,536 (1) Stated maturity of March 2034; requires quarterly interest payments at a variable rate of 3-month LIBOR plus 3.75% per annum. In June 2023, with the cessation of LIBOR, the calculation agent will use the “Board-selected benchmark replacement” as the benchmark replacement for LIBOR, which, per the Federal LIBOR Act, will be a rate identified by the Federal Reserve Board that is (a) based on SOFR and (b) adjusted based on tenor spread adjustments. At December 31, 2022, the interest rate was 8.52% . (2) For further detail on the determination of estimated fair value see Note 9.—Fair Value of Financial Instruments . |
Securitized Mortgage Trusts (Ta
Securitized Mortgage Trusts (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Securitized Mortgage Trusts | |
Schedule of securitized mortgage trust assets | December 31, December 31, 2022 2021 Securitized mortgage collateral, at fair value $ — $ 1,639,251 REO, at net realizable value (NRV) — 3,479 Total securitized mortgage trust assets $ — $ 1,642,730 |
Summary of securitized mortgage collateral | December 31, December 31, 2022 2021 Mortgages secured by residential real estate $ — $ 1,653,749 Mortgages secured by commercial real estate — 89,801 Fair value adjustment — (104,299) Total securitized mortgage collateral, at fair value $ — $ 1,639,251 |
Schedule of real estate owned | December 31, December 31, 2022 2021 REO $ — $ 10,335 Impairment (1) — (6,856) Ending balance $ — $ 3,479 REO inside trusts $ — $ 3,479 REO outside trusts — — Total $ — $ 3,479 (1) Impairment represents the cumulative write-downs of net realizable value subsequent to foreclosure. |
Schedule of securitized mortgage trust liabilities | December 31, December 31, 2022 2021 Securitized mortgage borrowings $ — $ 1,614,862 |
Schedule of securitized mortgage borrowings | Securitized mortgage borrowings outstanding as of December 31, Range of Interest Rates (%) Interest Interest Rate Rate Original Fixed Margins over Margins after Issuance Interest One-Month Contractual Year of Issuance Amount 2022 2021 Rates LIBOR (1) Call Date (2) 2002 $ 3,876.1 $ — $ 2.7 5.25 - 12.00 0.27 - 2.75 0.54 - 3.68 2003 5,966.1 — 12.9 4.34 - 12.75 0.27 - 3.00 0.54 - 4.50 2004 17,710.7 — 210.9 3.58 - 5.56 0.25 - 2.50 0.50 - 3.75 2005 13,387.7 — 1,198.2 — 0.24 - 2.90 0.48 - 4.35 2006 5,971.4 — 1,626.0 6.25 0.10 - 2.75 0.20 - 4.13 2007 3,860.5 — 882.5 — 0.06 - 2.00 0.12 - 3.00 Subtotal contractual principal balance (3) — 3,933.2 Fair value adjustment (4) — (2,318.3) Total securitized mortgage borrowings $ — $ 1,614.9 (1) One-month LIBOR was 0.10 % as of December 31, 2021. (2) Interest rate margins are generally adjusted when the unpaid principal balance is reduced to less than 10 - 20 % of the original issuance amount, or if certain other triggers are met. (3) Represents the outstanding balance in accordance with trustee reporting. (4) Fair value adjustment was inclusive of $0 and $2.2 billion in bond losses at December 31, 2022 and 2021, respectively. |
Schedule of changes in fair value of net trust assets, including trust REO gains | For the Year Ended December 31, 2022 2021 Change in fair value of net trust assets, excluding REO $ 9,248 $ 6,471 Gains from trust REO — 111 Change in fair value of net trust assets, including trust REO gains $ 9,248 $ 6,582 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments | |
Schedule of information for derivative assets and liabilities - lending | Total Gains (Losses) Notional Amount For the Year Ended December 31, December 31, December 31, 2022 2021 2022 2021 Derivative – IRLC's (1) $ 493 $ 255,150 $ (3,106) $ (4,164) Derivative – TBA MBS (1) 7,000 102,000 5,020 2,022 Derivative – Swap Futures (1) 8,800 — 1,304 — (1) Amounts included in gain on sale of loans, net within the accompanying consolidated statements of operations and comprehensive loss . |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value of Financial Instruments | |
Schedule of estimated fair value of financial instruments included in consolidated financial statements | December 31, 2022 December 31, 2021 Carrying Estimated Fair Value Carrying Estimated Fair Value Amount Level 1 Level 2 Level 3 Amount Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 25,864 $ 25,864 $ — $ — $ 29,555 $ 29,555 $ — $ — Restricted cash 4,140 4,140 — — 5,657 5,657 — — Mortgage loans held-for-sale 13,052 — 13,052 — 308,477 — 308,477 — Mortgage servicing rights — — — — 749 — — 749 Derivative assets, lending, net (1) 52 — 47 5 3,111 — — 3,111 Securitized mortgage collateral — — — — 1,639,251 — — 1,639,251 Liabilities Warehouse borrowings $ 3,622 $ — $ 3,622 $ — $ 285,539 $ — $ 285,539 $ — Convertible notes 15,000 — — 15,000 20,000 — — 20,000 Long-term debt 27,753 — — 27,753 46,536 — — 46,536 Securitized mortgage borrowings — — — — 1,614,862 — — 1,614,862 Derivative liabilities, lending, net (2) — — — — 55 — 55 — (1) Represents IRLCs and Hedging Instruments and are included in other assets in the accompanying consolidated balance sheets. (2) Represents Hedging Instruments and are included in other liabilities in the accompanying consolidated balance sheets. |
Schedule of assets and liabilities that are measured at estimated fair value on recurring basis | Recurring Fair Value Measurements December 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Mortgage loans held-for-sale $ — $ 13,052 $ — $ — $ 308,477 $ — Derivative assets, lending, net (1) — 47 5 — — 3,111 Mortgage servicing rights — — — — — 749 Securitized mortgage collateral — — — — — 1,639,251 Total assets at fair value $ — $ 13,099 $ 5 $ — $ 308,477 $ 1,643,111 Liabilities Securitized mortgage borrowings $ — $ — $ — $ — $ — $ 1,614,862 Long-term debt — — 27,753 — — 46,536 Derivative liabilities, lending, net (2) — — — — 55 — Total liabilities at fair value $ — $ — $ 27,753 $ — $ 55 $ 1,661,398 (1) At December 31, 2022, derivative assets, lending, net included $5 thousand in IRLCs and $47 thousand in Hedging Instruments included in other assets in the accompanying consolidated balance sheets. At December 31, 2021, derivative assets, lending, net included $3.1 million in IRLCs and is included in other assets in the accompanying consolidated balance sheets. (2) At December 31, 2022 and 2021, derivative liabilities, lending, net are included in other liabilities in the accompanying consolidated balance sheets. |
Schedule of reconciliation for all assets and liabilities measured at estimated fair value on recurring basis using significant unobservable inputs (Level 3) | Level 3 Recurring Fair Value Measurements For the Year Ended December 31, 2022 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, December 31, 2021 $ 1,639,251 $ (1,614,862) $ 749 $ 3,111 $ (46,536) Total gains (losses) included in earnings: Interest income (1) 2,019 — — — — Interest expense (1) — (7,564) — — (1,187) Change in fair value 9,248 — (70) (3,106) 2,757 Change in instrument specific credit risk — — — — 17,213 (2) Total gains (losses) included in earnings 11,267 (7,564) (70) (3,106) 18,783 Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — 46 — — Settlements (1,650,518) 1,622,426 (725) — — Fair value, December 31, 2022 $ — $ — $ — $ 5 $ (27,753) Unrealized gains (losses) still held (3) $ — $ — $ — $ 5 $ (34,247) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and liabilities. Net interest income, including cash received and paid, was $1.2 million for the year ended December 31, 2022. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations and comprehensive loss is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Amount represents the change in instrument specific credit risk in other comprehensive loss in the consolidated statements of operations and comprehensive loss. (3) Represents the amount of unrealized gains (losses) relating to assets and liabilities classified as Level 3 that are still held and reflected in the fair values at December 31, 2022. Level 3 Recurring Fair Value Measurements For the Year Ended December 31, 2021 Interest Securitized Securitized Mortgage rate lock Long- mortgage mortgage servicing commitments, term collateral borrowings rights net debt Fair value, December 31, 2020 $ 2,100,175 $ (2,086,557) $ 339 $ 7,275 $ (44,413) Total (losses) gains included in earnings: Interest income (1) (12,162) — — — — Interest expense (1) — (37,090) — — (1,499) Change in fair value 151,759 (145,288) (126) (4,164) 2,098 Change in instrument specific credit risk — — — — (2,722) (2) Total gains (losses) included in earnings 139,597 (182,378) (126) (4,164) (2,123) Transfers in and/or out of Level 3 — — — — — Purchases, issuances and settlements: Purchases — — — — — Issuances — — 536 — — Settlements (600,521) 654,073 — — — Fair value, December 31, 2021 $ 1,639,251 $ (1,614,862) $ 749 $ 3,111 $ (46,536) Unrealized (losses) gains still held (3) $ (104,299) $ 2,318,296 $ 749 $ 3,111 $ 15,464 (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and liabilities. Net interest income, including cash received and paid, was $8.1 million for the year ended December 31, 2021. The difference between accretion of interest income and expense and the amounts of interest income and expense recognized in the consolidated statements of operations and comprehensive loss is primarily from contractual interest on the securitized mortgage collateral and borrowings. (2) Amount represents the change in instrument specific credit risk in other comprehensive loss in the consolidated statements of operations and comprehensive loss. (3) Represents the amount of unrealized (losses) gains relating to assets and liabilities classified as Level 3 that were still held and reflected in the fair values at December 31, 2021. |
Schedule of quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and non-recurring basis | The following table presents quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring and non-recurring basis at December 31, 2022 and 2021. December 31, 2022 December 31, 2021 Unobservable Range of Weighted Range of Weighted Financial Instrument Input Inputs Average Inputs Average Assets and liabilities backed by real estate Securitized mortgage collateral, and Prepayment rates - % - % 2.9 - 46.3 % 10.7 % Securitized mortgage borrowings Default rates - % - % 0.06 - 4.3 % 1.7 % Loss severities - % - % 0.01 - 97.6 % 70.1 % Discount rates - % - % 2.1 - 13.0 % 3.6 % Other assets and liabilities Mortgage servicing rights Discount rates - % - % 12.5 - 15.0 % 12.8 % Prepayment rates - % - % 8.01 - 29.1 % 10.3 % Derivative assets - IRLCs, net Pull-through rates 70.0 - 78.0 % 72.3 % 50.0 - 98.0 % 79.0 % Long-term debt See (1) below N/A % N/A % 8.6 % 8.6 % (1) For the year ended December 31, 2022, the company used the expected cash flow valuation methodology and the unobservable input was the expected proceeds. For the year ended December 31, 2021, the Company used a discounted cash flow model and the unobservable input was the discount rate. |
Schedule of changes in recurring fair value measurements included in net loss | Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Year Ended December 31, 2022 Change in Fair Value of Interest Interest Net Trust Long-term Other Income (Loss) Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ 2,019 $ — $ 9,248 $ — $ — $ — $ 11,267 Securitized mortgage borrowings — (7,564) — — — — (7,564) Long-term debt — (1,187) — 2,757 — — 1,570 Mortgage servicing rights (2) — — — — (70) — (70) Mortgage loans held-for-sale — — — — — (8,802) (8,802) Derivative assets — IRLCs — — — — — (3,106) (3,106) Derivative liabilities — Hedging Instruments — — — — — 103 103 Total $ 2,019 $ (8,751) $ 9,248 (3) $ 2,757 $ (70) $ (11,805) $ (6,602) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain on mortgage servicing rights, net in the consolidated statements of operations and comprehensive loss. (3) For the year ended December 31, 2022, change in the fair value of trust assets, excluding REO was $9.2 million. Recurring Fair Value Measurements Changes in Fair Value Included in Net Loss For the Year Ended December 31, 2021 Change in Fair Value of Interest Interest Net Trust Long-term Other Income (Loss) Gain on Sale Income (1) Expense (1) Assets Debt and Expense of Loans, net Total Securitized mortgage collateral $ (12,162) $ — 151,759 $ — $ — $ — $ 139,597 Securitized mortgage borrowings — (37,090) (145,288) — — — (182,378) Long-term debt — (1,499) — 2,098 — — 599 Mortgage servicing rights (2) — — — — (126) — (126) Mortgage loans held-for-sale — — — — — 3,395 3,395 Derivative assets — IRLCs — — — — — (4,164) (4,164) Derivative liabilities — Hedging Instruments — — — — — 88 88 Total $ (12,162) $ (38,589) $ 6,471 (3) $ 2,098 $ (126) $ (681) $ (42,989) (1) Amounts primarily represent accretion to recognize interest income and interest expense using effective yields based on estimated fair values for trust assets and trust liabilities. (2) Included in gain on mortgage servicing rights, net in the consolidated statements of operations and comprehensive loss. (3) For the year ended December 31, 2021, change in the fair value of trust assets, excluding REO was $6.5 million. |
Schedule of financial and non-financial assets and liabilities measured using nonrecurring fair value measurements | The following table presents financial and non-financial assets and liabilities measured using nonrecurring fair value measurements at December 31, 2022 and 2021, respectively: Nonrecurring Fair Value Measurements December 31, 2022 December 31, 2021 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 REO (1) $ — $ — $ — $ — $ 3,479 $ — ROU asset — — 1,248 — — 10,209 (1) Balance represents REO at December 31, 2021 which has been impaired subsequent to foreclosure. The following table presents total gains on financial and non-financial assets and liabilities measured using nonrecurring fair value measurements for the years ended December 31, 2022 and 2021, respectively: Total Gains (Losses) (1) For the Year Ended December 31, 2022 2021 REO (2) $ — $ 111 ROU asset impairment (123) — (1) Total gains reflect gains from all nonrecurring measurements during the year. (2) For the years ended December 31, 2022 and 2021, the Company recorded none and $111 thousand, respectively, of gains related to changes in the NRV of REO. Gains represent recovery of the NRV attributable to an improvement in state specific loss severities on properties held during the period which resulted in an increase to NRV. |
Reconciliation of Loss Per Co_2
Reconciliation of Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Reconciliation of Loss Per Common Share | |
Schedule of computation of basic and diluted earnings per common share | For the Year Ended December 31, 2022 2021 Numerator for basic loss per share: Net loss $ (39,432) $ (3,878) Less: cumulative non-declared dividends on preferred stock (1) (52) (780) Net loss attributable to common stockholders $ (39,484) $ (4,658) Numerator for diluted loss per share: Net loss $ (39,484) $ (4,658) Interest expense attributable to convertible notes (2) — — Net loss plus interest expense attributable to convertible notes $ (39,484) $ (4,658) Denominator for basic loss per share (3): Basic weighted average common shares outstanding during the period 23,918 21,332 Denominator for diluted loss per share (3): Basic weighted average common shares outstanding during the period 23,918 21,332 Net effect of dilutive convertible notes and warrants (2) — — Net effect of dilutive stock options, DSU’s, RSA's and RSU's (2) — — Diluted weighted average common shares 23,918 21,332 Net loss per common share: Basic $ (1.65) $ (0.22) Diluted $ (1.65) $ (0.22) (1) Cumulative non-declared dividends in arrears related to the Series B Preferred stock are included in 2021 and excluded in 2022 as a result of the aforementioned Exchange Offers. Cumulative non-declared dividends in arrears related to the Series D Preferred stock are included in 2022 as a result of the Company not being able to satisfy the Cash Consideration Restrictions of the new preferred stock. (See Note 8.– Redeemable Preferred Stock and Note 13.– Commitments and Contingincies). (2) Adjustments to diluted loss per share for the years ended December 31, 2022 and 2021, were excluded from the calculation, as they were anti-dilutive. (3) Share amounts presented in thousands. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Taxes | |
Schedule of income taxes | For the Year Ended December 31, 2022 2021 Current income taxes: Federal $ — $ — State 38 71 Total current income tax expense 38 71 Deferred income taxes: Federal — — State — — Total deferred income tax expense — — Total income tax expense $ 38 $ 71 |
Schedule of deferred tax assets and liabilities temporary differences between the financial statement carrying value and the tax basis of assets | For the Year Ended December 31, 2022 2021 Deferred tax assets: Federal and state net operating losses $ 248,559 $ 178,194 Mortgage securities — 55,283 Depreciation and amortization 21,655 24,355 Capital loss carryover 172 172 Compensation and other accruals 1,563 3,058 Repurchase reserve 1,839 1,493 Total gross deferred tax assets 273,788 262,555 Deferred tax liabilities: Fair value adjustments on long-term debt (9,516) (3,980) Mortgage servicing rights — (236) Corporate-owned life insurance (1,272) (1,017) Total gross deferred tax liabilities (10,788) (5,233) Valuation allowance (263,000) (257,322) Total net deferred tax assets $ — $ — |
Schedule of a reconciliation of income taxes to the statutory federal corporate income tax rates | For the Year Ended December 31, 2022 2021 Expected income tax expense $ (8,273) $ (799) State tax expense, net of federal benefit 30 56 State rate change 345 (640) Change in valuation allowance 7,532 1,218 Corporate-owned life insurance interest and premiums 121 96 Other 283 140 Total income tax expense $ 38 $ 71 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting | |
Reconciliation of assets from segment to consolidated | Balance Sheet Items as of Mortgage Real Estate Long-term Corporate December 31, 2022: Lending Services Portfolio and other Consolidated Cash and cash equivalents $ 24,923 $ 500 $ — 441 $ 25,864 Restricted cash 4,140 — — — 4,140 Mortgage loans held-for-sale 13,052 — — — 13,052 Mortgage servicing rights — — — — — Other assets (1) 1,586 2 77 15,610 17,275 Total assets $ 43,701 $ 502 $ 77 $ 16,051 $ 60,331 Total liabilities $ 10,866 $ — $ 28,180 $ 32,888 $ 71,934 Balance Sheet Items as of Mortgage Real Estate Long-term Corporate December 31, 2021: Lending Services Portfolio and other Consolidated Cash and cash equivalents $ 26,239 $ 500 $ — $ 2,816 $ 29,555 Restricted cash 5,657 — — — 5,657 Mortgage loans held-for-sale 308,477 — — — 308,477 Mortgage servicing rights 749 — — — 749 Trust assets — — 1,642,730 — 1,642,730 Other assets (1) 10,051 2 141 25,409 35,603 Total assets $ 351,173 $ 502 $ 1,642,871 $ 28,225 $ 2,022,771 Total liabilities $ 298,726 $ — $ 1,661,729 $ 52,380 $ 2,012,835 (1) All segment asset balances exclude intercompany balances. |
Reconciliation of earnings from segment to consolidated | Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Year Ended December 31, 2022: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 6,317 $ — $ — $ — $ 6,317 Servicing income, net 63 — — — 63 Gain on mortgage servicing rights, net 194 — — — 194 Broker fee income 50 — — — 50 Real estate services fees, net — 1,081 — — 1,081 Other revenue 9 — 24 857 890 Other operating expense (34,025) (1,373) (262) (20,465) (56,125) Other income (expense) 1,368 — 8,511 (1,743) 8,136 Net (loss) earnings before income tax expense $ (26,024) $ (292) $ 8,273 $ (21,351) (39,394) Income tax expense 38 Net loss $ (39,432) Statement of Operations Items for the Mortgage Real Estate Long-term Corporate Year Ended December 31, 2021: Lending Services Portfolio and other Consolidated Gain on sale of loans, net $ 65,294 $ — $ — $ — $ 65,294 Servicing expense, net (432) — — — (432) Gain on mortgage servicing rights, net 34 — — — 34 Real estate services fees, net — 1,144 — — 1,144 Other revenue 24 — 110 145 279 Other operating expense (62,605) (1,409) (778) (16,412) (81,204) Other income (expense) 98 — 12,840 (1,860) 11,078 Net earnings (loss) before income tax expense $ 2,413 $ (265) $ 12,172 $ (18,127) $ (3,807) Income tax expense 71 Net loss $ (3,878) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies | |
Schedule of balance sheets, weighted average remaining lease term and weighted average discount rates | December 31, Lease Assets and Liabilities Classification 2022 Assets Lease ROU assets Other assets $ 1,248 Liabilities Lease liabilities Other liabilities $ 51 Weighted average remaining lease term (in years) 0.8 Weighted average discount rate 3.6 % |
Schedule of maturities of operating leases | Year 2023 $ 55 Year 2024 — Year 2025 — Year 2026 — Year 2027 — Total lease commitments $ 55 Less: imputed interest (4) Total lease liability $ 51 |
Schedule of the activity related to the repurchase reserve for previously sold loans | December 31, December 31, 2022 2021 Beginning balance $ 4,744 $ 7,054 Provision for repurchases (1) 2,417 111 Settlements (1,286) (2,421) Total repurchase reserve $ 5,875 $ 4,744 |
Schedule of corporate-owned life insurance trusts | At December 31, 2022 Corporate-owned life insurance trusts: Trust #1 Trust #2 Trust #3 Total Corporate-owned life insurance cash surrender value $ 5,314 $ 4,125 $ 2,180 $ 11,619 Corporate-owned life insurance liability 6,280 4,923 2,398 13,601 Corporate-owned life insurance shortfall (1) $ (966) $ (798) $ (218) $ (1,982) |
Share Based Payments and Empl_2
Share Based Payments and Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule of weighted average assumptions used in estimation of the fair value of options granted | Granted in 2021 Risk-free interest rate 0.50% Expected lives (in years) 4.54 Expected volatility 77.55% Expected dividend yield 0.00% Fair value per share $ 1.96 |
Summary of activity, pricing and other information for the Company's stock options | For the Year Ended December 31, 2022 2021 Weighted- Weighted- Average Average Number of Exercise Number of Exercise Shares Price Shares Price Options outstanding at the beginning of the year 570,228 $ 7.89 524,357 $ 8.58 Options granted — — 85,154 3.29 Options exercised — — — — Options forfeited/cancelled (38,750) 8.33 (39,283) 7.15 Options outstanding at the end of the period 531,478 7.86 570,228 7.89 Options exercisable at the end of the period 496,790 $ 8.18 406,361 $ 9.65 |
Schedule of aggregate intrinsic value | As of December 31, 2022 2021 Weighted- Weighted- Average Aggregate Average Aggregate Remaining Intrinsic Remaining Intrinsic Life Value Life Value (Years) (in thousands) (Years) (in thousands) Options outstanding at end of year 5.00 $ - 6.77 $ - Options exercisable at end of year 4.78 $ - 5.96 $ - |
Schedule of additional information regarding stock options outstanding | Stock Options Outstanding Options Exercisable Weighted- Average Weighted- Weighted- Exercise Remaining Average Average Price Number Contractual Exercise Number Exercise Range Outstanding Life in Years Price Exercisable Price $ 3.22 - 3.74 126,538 6.23 $ 3.47 91,850 $ 3.53 3.75 - 5.38 200,000 6.16 3.75 200,000 3.75 5.39 - 9.85 27,582 3.01 7.01 27,582 7.01 9.86 - 17.39 79,608 3.24 11.84 79,608 11.84 17.40 - 20.49 48,750 3.55 17.40 48,750 17.40 20.50 - 20.50 49,000 2.56 20.50 49,000 20.50 $ 3.22 - 20.50 531,478 5.00 $ 7.86 496,790 $ 8.18 |
Deferred stock units | |
Summary of activity, pricing and other information for the Company's | Weighted- Average Number of Grant Date Shares Fair Value DSUs outstanding at the beginning of the year 54,500 $ 6.61 DSUs granted — — DSUs issued (converted) (15,000) 3.75 DSUs forfeited/cancelled — — DSUs outstanding at the end of the period 39,500 $ 7.70 |
Restricted stock units (RSU's) | |
Summary of activity, pricing and other information for the Company's | Weighted- Average Number of Grant Date Shares Fair Value RSUs outstanding at beginning of the year 397,829 $ 4.11 RSUs granted — — RSUs issued (converted) (155,080) 4.31 RSUs forfeited/cancelled (21,365) 3.83 RSUs outstanding at end of the period 221,384 $ 4.00 |
Summary of Business and Finan_3
Summary of Business and Financial Statement Presentation including Significant Accounting Policies (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 16, 2022 USD ($) | Jan. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) lease | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Liquidity | |||||
Net loss | $ (39,432) | $ (3,878) | |||
Stockholders deficit | (11,603) | 9,936 | $ 15,651 | ||
Cash and cash equivalents | 25,864 | 29,555 | |||
Unencumbered loans | 9,400 | ||||
Uncommitted capacity under warehouse lines | 41,000 | ||||
Borrowing capacity not renewed | 25,000 | ||||
Warehouse borrowings | 3,622 | 285,539 | |||
Employee retention credit applied for under the CARES Act. | 7,300 | ||||
Annual repayment of principal of convertible notes | $ 5,000 | ||||
Mortgage Loans Held-for-Sale | |||||
Maximum past due period of principal or interest based on LHFS are placed on nonaccrual status | 90 days | ||||
Recent Accounting Pronouncements | |||||
Restricted cash | $ 4,140 | 5,657 | |||
Number of operating leases | lease | 2 | ||||
Number of financing leases | lease | 1 | ||||
Business promotion | $ 4,425 | $ 7,395 | |||
Convertible Notes | |||||
Liquidity | |||||
Annual repayment of principal of convertible notes | $ 5,000 | ||||
Remaining term of annual pay downs of convertible notes | 3 years | ||||
Irvine, CA location | |||||
Liquidity | |||||
Estimated occupancy costs under original lease | $ 8,800 | ||||
Remaining lease term under original lease agreement | 20 months | ||||
Payment to terminate existing lease agreement | $ 3,000 | $ 3,000 | |||
Subsequent Event | Newport Beach, CA location | |||||
Liquidity | |||||
Estimated total occupancy costs under new lease | $ 800 |
Mortgage Loans Held-for-Sale (D
Mortgage Loans Held-for-Sale (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | |
Mortgage loans held-for-Sale | ||
Total mortgage loans held-for-sale | $ 13,052 | $ 308,477 |
Gain on LHFS | ||
Change in provision for repurchases | (2,417) | (111) |
Gain on sale of loans, net | 20,539 | 66,086 |
Government | ||
Mortgage loans held-for-Sale | ||
Total mortgage loans held-for-sale | 6,886 | |
Conventional | ||
Mortgage loans held-for-Sale | ||
Total mortgage loans held-for-sale | 2,506 | 62,759 |
Jumbo & Non-qualified mortgages (NonQM) | ||
Mortgage loans held-for-Sale | ||
Total mortgage loans held-for-sale | 11,658 | 231,142 |
Mortgage loans, held-for-sale | ||
Mortgage loans held-for-Sale | ||
Fair value adjustment | $ (1,112) | $ 7,690 |
Number of loans on nonaccrual status | loan | 1 | 0 |
Unpaid principal balance of nonaccrual loans | $ 326 | |
Carrying value of nonaccrual loans | 270 | |
Gain on LHFS | ||
Gain on sale of mortgage loans | 18,825 | $ 81,362 |
Premium from servicing retained loan sales | 46 | 536 |
Unrealized loss from derivative financial instruments | (3,003) | (4,076) |
Gain from derivative financial instruments | 6,221 | 1,934 |
Mark to market (loss) gain on LHFS | (8,802) | 3,395 |
Direct origination expenses, net | (4,553) | (17,746) |
Change in provision for repurchases | (2,417) | (111) |
Gain on sale of loans, net | $ 6,317 | $ 65,294 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in the fair value of MSRs | |||
Balance at beginning of year | $ 749 | ||
Fair value of MSRs at end of period | $ 749 | ||
Total loans serviced | 71,841 | ||
Proceeds from the sale of mortgage servicing rights | 725 | 160 | |
Mortgage Servicing Rights Sensitivity Analysis | |||
Fair value of MSRs | 749 | ||
Change in fair value of mortgage servicing rights | (70) | (126) | |
Gain on sale of mortgage servicing rights | 264 | 160 | |
Gain on mortgage servicing rights, net | 194 | 34 | |
Servicing (expense) fees, net: | |||
Contractual servicing fees | 251 | 193 | |
Subservicing and other costs | (188) | (625) | |
Servicing fees (expense), net | 63 | (432) | |
Government | |||
Changes in the fair value of MSRs | |||
Total loans serviced | 71,841 | ||
Mortgage servicing rights | |||
Changes in the fair value of MSRs | |||
Balance at beginning of year | 749 | 339 | |
Additions from servicing retained loan sales | 46 | 536 | |
Reductions from bulk sales | (725) | ||
Changes in fair value | (70) | (126) | |
Fair value of MSRs at end of period | 749 | ||
Mortgage Servicing Rights Sensitivity Analysis | |||
Prepayment Speed, Decrease in fair value from 10% adverse change | (24) | ||
Prepayment Speed, Decrease in fair value from 20% adverse change | (48) | ||
Prepayment Speed, Decrease in fair value from 30% adverse change | (70) | ||
Discount Rate, Decrease in fair value from 10% adverse change | (31) | ||
Discount Rate, Decrease in fair value from 20% adverse change | (59) | ||
Discount Rate, Decrease in fair value from 30% adverse change | (85) | ||
Change in fair value of mortgage servicing rights | (70) | (126) | |
Gain on sale of mortgage servicing rights | 264 | 160 | |
Gain on mortgage servicing rights, net | 194 | $ 34 | |
Mortgage servicing rights | Government | |||
Changes in the fair value of MSRs | |||
Unpaid principal balance of MSRs sold | $ 68,100 | $ 68,100 | |
Total amount received from sale of MSR | 725 | ||
Proceeds from the sale of mortgage servicing rights | $ 508 |
Other Assets - Summary of Other
Other Assets - Summary of Other Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Other Assets | ||
Corporate-owned life insurance (See Note 13) | $ 11,619 | $ 10,788 |
Prepaid expenses | 2,410 | 3,460 |
Right of use asset (See Note 13) | $ 1,248 | $ 10,209 |
Balance sheet classification - ROU assets | Total other assets | Total other assets |
Accounts receivable, net | $ 916 | $ 4,770 |
Servicing advances | 735 | 565 |
Premises and equipment, net | 220 | 636 |
Accrued interest receivable | 75 | 625 |
Derivative assets - lending (See Note 7) | 52 | 3,111 |
Other | 1,102 | |
Loans eligible for repurchase from Ginnie Mae | 0 | 337 |
Total other assets | $ 17,275 | 35,603 |
Accounts Receivable, net | ||
Average number of months in arrears for collection of receivables related to hedging instruments and real estate service fees | 1 month | |
Reserve for doubtful accounts | $ 50 |
Other Assets - Loans Eligible f
Other Assets - Loans Eligible for Repurchase from Ginnie Mae (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other Assets | ||
Loans eligible for repurchase from Ginnie Mae | $ 0 | $ 337 |
Other Assets - Premises and Equ
Other Assets - Premises and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Other Assets | ||
Premises and equipment | $ 6,209 | $ 6,391 |
Less: Accumulated depreciation | (5,989) | (5,755) |
Total premises and equipment, net | 220 | 636 |
Depreciation | $ 317 | $ 493 |
Debt - Contractual Reductions o
Debt - Contractual Reductions of Debt (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Contractual reductions of debt | |
Total | $ 80,622 |
Less Than One Year | 8,622 |
One to Three Years | 10,000 |
More Than Five Years | 62,000 |
Convertible Notes | |
Contractual reductions of debt | |
Total | 15,000 |
Less Than One Year | 5,000 |
One to Three Years | 10,000 |
Long-term debt | |
Contractual reductions of debt | |
Total | 62,000 |
More Than Five Years | 62,000 |
Warehouse borrowings | |
Contractual reductions of debt | |
Total | 3,622 |
Less Than One Year | $ 3,622 |
Debt - Warehouse Borrowings (De
Debt - Warehouse Borrowings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 30, 2022 | Oct. 31, 2022 | |
Warehouse Borrowings | |||||
Balance Outstanding | $ 285,539 | $ 3,622 | $ 285,539 | ||
Maximum borrowing capacity on committed line of credit | 41,000 | ||||
Information on warehouse borrowings | |||||
Restricted cash | $ 5,657 | 4,140 | 5,657 | ||
One Month LIBOR | |||||
Warehouse Borrowings | |||||
Interest margin over base rate (as a percent) | 0.10% | ||||
Warehouse borrowings | |||||
Warehouse Borrowings | |||||
Maximum Borrowing Capacity | 41,000 | ||||
Balance Outstanding | $ 285,539 | 3,622 | 285,539 | ||
Information on warehouse borrowings | |||||
Restricted cash | 1,300 | $ 0 | 1,300 | ||
Agreement term | 1 year | ||||
Amount outstanding | $ 269,950 | 336,648 | |||
Average balance outstanding for the year | 74,435 | 191,794 | |||
UPB of underlying collateral (mortgage loans) | 296,841 | $ 4,577 | $ 296,841 | ||
Weighted average rate for period (as a percent) | 4.19% | 3.41% | |||
Repurchase agreement 1 | |||||
Warehouse Borrowings | |||||
Balance Outstanding | 30,009 | $ 30,009 | |||
Repurchase agreement 1 | Minimum | |||||
Warehouse Borrowings | |||||
Allowable Advance Rates (as a percent) | 90% | ||||
Repurchase agreement 1 | Minimum | One Month LIBOR | |||||
Warehouse Borrowings | |||||
Interest margin over base rate (as a percent) | 2% | ||||
Repurchase agreement 1 | Maximum | |||||
Warehouse Borrowings | |||||
Allowable Advance Rates (as a percent) | 98% | ||||
Repurchase agreement 1 | Maximum | One Month LIBOR | |||||
Warehouse Borrowings | |||||
Interest margin over base rate (as a percent) | 2.25% | ||||
Repurchase agreement 2 | |||||
Warehouse Borrowings | |||||
Balance Outstanding | 153,006 | $ 153,006 | |||
Allowable Advance Rates (as a percent) | 100% | ||||
Repurchase agreement 2 | One Month LIBOR | |||||
Warehouse Borrowings | |||||
Interest margin over base rate (as a percent) | 1.75% | ||||
Repurchase agreement 3 | |||||
Warehouse Borrowings | |||||
Maximum Borrowing Capacity | $ 16,000 | $ 16,000 | |||
Balance Outstanding | 56,794 | $ 98 | $ 56,794 | ||
Maximum borrowing capacity on uncommitted line of credit | $ 15,000 | ||||
Maximum borrowing capacity on committed line of credit | $ 1,000 | ||||
Allowable Advance Rates (as a percent) | 100% | 100% | |||
Repurchase agreement 3 | Note Rate | |||||
Warehouse Borrowings | |||||
Interest margin over base rate (as a percent) | (0.375%) | (0.375%) | |||
Repurchase agreement 4 | |||||
Warehouse Borrowings | |||||
Maximum Borrowing Capacity | $ 25,000 | ||||
Balance Outstanding | $ 45,730 | $ 3,524 | $ 45,730 | ||
Allowable Advance Rates (as a percent) | 99% | 99% | |||
Repurchase agreement 4 | Minimum | Note Rate | |||||
Warehouse Borrowings | |||||
Interest margin over base rate (as a percent) | (0.50%) | (0.50%) | |||
Repurchase agreement 4 | Maximum | Note Rate | |||||
Warehouse Borrowings | |||||
Interest margin over base rate (as a percent) | (0.75%) | (0.75%) |
Debt - Convertible Notes (Detai
Debt - Convertible Notes (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | |||||
Apr. 29, 2022 USD ($) installment | Oct. 28, 2020 USD ($) | Apr. 15, 2020 USD ($) $ / shares shares | May 31, 2015 USD ($) D $ / shares | Nov. 15, 2022 shares | Oct. 26, 2022 shares | |
Convertible Notes | ||||||
Aggregate number of common shares which can be purchased with warrants issued | shares | 681,923 | 1,425,695 | ||||
Convertible Notes | ||||||
Convertible Notes | ||||||
Amount of debt | $ 25,000 | |||||
Interest rate of debt (as a percent) | 7.50% | |||||
Conversion price (in dollars per share) | $ / shares | $ 21.50 | |||||
Conditional conversion price (in dollars per share) | $ / shares | $ 30.10 | |||||
Number of trading days for which stock price must exceed specified price | D | 20 | |||||
Number of consecutive trading days during which stock price must exceed specified price | D | 30 | |||||
2015 Convertible Notes - First Amendment | ||||||
Convertible Notes | ||||||
Amount of debt | $ 25,000 | |||||
Interest rate of debt (as a percent) | 7% | |||||
Agreement term | 6 months | |||||
Warrant cash exercise price | $ / shares | $ 2.97 | |||||
Relative fair value of warrants recorded as debt discount | $ 242 | |||||
Effective interest rate | 8.90% | |||||
2015 Convertible Notes - First Amendment | Maximum | ||||||
Convertible Notes | ||||||
Aggregate number of common shares which can be purchased with warrants issued | shares | 212,649 | |||||
2015 Convertible Notes - Second Amendment | ||||||
Convertible Notes | ||||||
Amount of debt | $ 25,000 | |||||
Debt principal after scheduled paydown | 20,000 | |||||
Scheduled decrease in the aggregate principal amount | $ 5,000 | |||||
Interest rate of debt (as a percent) | 7% | |||||
Agreement term | 18 months | |||||
2015 Convertible Notes - Third Amendment | ||||||
Convertible Notes | ||||||
Debt principal after scheduled paydown | $ 15,000 | |||||
Scheduled decrease in the aggregate principal amount | $ 5,000 | |||||
Interest rate of debt (as a percent) | 7% | |||||
Number of installments | installment | 3 | |||||
Principal payment | $ 5,000 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - Junior subordinated notes - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Junior Subordinated Notes, Fair Value | ||
Long-term debt | $ 62,000 | $ 62,000 |
Fair value adjustment | (34,247) | (15,464) |
Total | $ 27,753 | $ 46,536 |
Effective interest rate | 8.52% | |
London Interbank Offered Rate (LIBOR) | ||
Long-term Debt | ||
Applicable margin (as a percent) | 3.75% |
Securitized Mortgage Trusts - A
Securitized Mortgage Trusts - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Mar. 16, 2022 USD ($) | Mar. 31, 2022 USD ($) item | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Securitized Mortgage Trusts | |||||
Number of securitizations | item | 37 | ||||
Aggregate sales price for sale of consolidated securitization trusts | $ 37,500 | ||||
Payment received on sale of consolidated securitization trusts | $ 20,000 | ||||
Increase in fair value of securitization trust assets | 9,200 | $ 9,200 | $ 9,248 | $ 6,471 | |
Transaction costs related to sale of consolidated securitization trusts | $ 277 | 277 | |||
Securitized mortgage trust assets deconsolidated | 1,600,000 | ||||
Securitized mortgage trust liabilities deconsolidated | $ 1,600,000 |
Securitized Mortgage Trusts - S
Securitized Mortgage Trusts - Securitized Mortgage Trust Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Trust Assets | ||
Securitized mortgage collateral, at fair value | $ 1,639,251 | |
REO, at net realizable value (NRV) | 3,479 | |
Total securitized mortgage trust assets | 1,642,730 | |
Mortgages secured by residential real estate | ||
Trust Assets | ||
Securitized mortgage collateral, at fair value | 1,653,749 | |
Mortgages secured by commercial real estate | ||
Trust Assets | ||
Securitized mortgage collateral, at fair value | 89,801 | |
Securitized mortgage collateral | ||
Trust Assets | ||
Securitized mortgage collateral, at fair value | 1,639,251 | |
Fair value adjustment | (104,299) | |
Mortgages serviced for others | ||
Trust Assets | ||
Other mortgages primarily collateralized by REMIC | $ 138,300 | 164,600 |
REO inside trusts | ||
Trust Assets | ||
REO, at net realizable value (NRV) | $ 3,479 |
Securitized Mortgage Trusts - R
Securitized Mortgage Trusts - REO and Securitized Mortgage Trust Liabilities (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Securitized Mortgage Trusts | |
REO | $ 10,335 |
Impairment (1) | (6,856) |
Ending balance | 3,479 |
REO inside trust | 3,479 |
Securitized Mortgage Trust Liabilities | |
Securitized mortgage borrowings | $ 1,614,862 |
Securitized Mortgage Trusts -_2
Securitized Mortgage Trusts - Securitized Mortgage Borrowings (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Securitized Mortgage Borrowings | |||
Securitized mortgage borrowings | $ 1,614,862 | $ 1,614,862 | |
Bond losses | $ 0 | $ 2,200,000 | |
Minimum | |||
Range of interest rates | |||
Interest rate margin adjustment trigger, percentage of unpaid principal balance to original issuance amount | 10% | ||
Maximum | |||
Range of interest rates | |||
Interest rate margin adjustment trigger, percentage of unpaid principal balance to original issuance amount | 20% | ||
One Month LIBOR | |||
Range of interest rates | |||
Applicable margin (as a percent) | 0.10% | ||
Securitized mortgage borrowings | |||
Securitized Mortgage Borrowings | |||
Subtotal contractual principal balance (3) | $ 3,933,200 | $ 3,933,200 | |
Fair value adjustment | (2,318,300) | ||
Securitized mortgage borrowings | 1,614,900 | 1,614,900 | |
2002 | |||
Securitized Mortgage Borrowings | |||
Original Issuance Amount | 3,876,100 | 3,876,100 | |
Securitized mortgage borrowings | $ 2,700 | $ 2,700 | |
2002 | Minimum | |||
Range of interest rates | |||
Fixed interest rate (as a percent) | 5.25% | 5.25% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 0.54% | 0.54% | |
2002 | Maximum | |||
Range of interest rates | |||
Fixed interest rate (as a percent) | 12% | 12% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 3.68% | 3.68% | |
2002 | One Month LIBOR | Minimum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 0.27% | ||
2002 | One Month LIBOR | Maximum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 2.75% | ||
2003 | |||
Securitized Mortgage Borrowings | |||
Original Issuance Amount | $ 5,966,100 | $ 5,966,100 | |
Securitized mortgage borrowings | $ 12,900 | $ 12,900 | |
2003 | Minimum | |||
Range of interest rates | |||
Fixed interest rate (as a percent) | 4.34% | 4.34% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 0.54% | 0.54% | |
2003 | Maximum | |||
Range of interest rates | |||
Fixed interest rate (as a percent) | 12.75% | 12.75% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 4.50% | 4.50% | |
2003 | One Month LIBOR | Minimum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 0.27% | ||
2003 | One Month LIBOR | Maximum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 3% | ||
2004 | |||
Securitized Mortgage Borrowings | |||
Original Issuance Amount | $ 17,710,700 | $ 17,710,700 | |
Securitized mortgage borrowings | $ 210,900 | $ 210,900 | |
2004 | Minimum | |||
Range of interest rates | |||
Fixed interest rate (as a percent) | 3.58% | 3.58% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 0.50% | 0.50% | |
2004 | Maximum | |||
Range of interest rates | |||
Fixed interest rate (as a percent) | 5.56% | 5.56% | |
Interest Rate Margins after Contractual Call Date (as a percent) | 3.75% | 3.75% | |
2004 | One Month LIBOR | Minimum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 0.25% | ||
2004 | One Month LIBOR | Maximum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 2.50% | ||
2005 | |||
Securitized Mortgage Borrowings | |||
Original Issuance Amount | $ 13,387,700 | $ 13,387,700 | |
Securitized mortgage borrowings | $ 1,198,200 | $ 1,198,200 | |
2005 | Minimum | |||
Range of interest rates | |||
Interest Rate Margins after Contractual Call Date (as a percent) | 0.48% | 0.48% | |
2005 | Maximum | |||
Range of interest rates | |||
Interest Rate Margins after Contractual Call Date (as a percent) | 4.35% | 4.35% | |
2005 | One Month LIBOR | Minimum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 0.24% | ||
2005 | One Month LIBOR | Maximum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 2.90% | ||
2006 | |||
Securitized Mortgage Borrowings | |||
Original Issuance Amount | $ 5,971,400 | $ 5,971,400 | |
Securitized mortgage borrowings | $ 1,626,000 | $ 1,626,000 | |
Range of interest rates | |||
Fixed interest rate (as a percent) | 6.25% | 6.25% | |
2006 | Minimum | |||
Range of interest rates | |||
Interest Rate Margins after Contractual Call Date (as a percent) | 0.20% | 0.20% | |
2006 | Maximum | |||
Range of interest rates | |||
Interest Rate Margins after Contractual Call Date (as a percent) | 4.13% | 4.13% | |
2006 | One Month LIBOR | Minimum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 0.10% | ||
2006 | One Month LIBOR | Maximum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 2.75% | ||
2007 | |||
Securitized Mortgage Borrowings | |||
Original Issuance Amount | $ 3,860,500 | $ 3,860,500 | |
Securitized mortgage borrowings | $ 882,500 | $ 882,500 | |
2007 | Minimum | |||
Range of interest rates | |||
Interest Rate Margins after Contractual Call Date (as a percent) | 0.12% | 0.12% | |
2007 | Maximum | |||
Range of interest rates | |||
Interest Rate Margins after Contractual Call Date (as a percent) | 3% | 3% | |
2007 | One Month LIBOR | Minimum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 0.06% | ||
2007 | One Month LIBOR | Maximum | |||
Range of interest rates | |||
Applicable margin (as a percent) | 2% |
Securitized Mortgage Trusts - C
Securitized Mortgage Trusts - Change in Fair Value of Net Trust Assets (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Change in fair value of net trust assets, including trust REO gains: | ||||
Change in fair value of net trust assets, excluding REO | $ 9,200 | $ 9,200 | $ 9,248 | $ 6,471 |
Gains from trust REO | 111 | |||
Change in fair value of net trust assets, including trust REO gains | $ 9,248 | $ 6,582 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Interest rate lock commitments (IRLCs) | ||
Derivative assets and liabilities - lending | ||
Derivative Asset, Notional Amount | $ 493 | $ 255,150 |
Gain (loss) from derivative financial instruments | (3,106) | (4,164) |
Hedging Instruments | ||
Derivative assets and liabilities - lending | ||
Derivative Liability, Notional Amount | 7,000 | 102,000 |
Gain (loss) from derivative financial instruments | 5,020 | 2,022 |
Swap Futures | ||
Derivative assets and liabilities - lending | ||
Derivative Asset, Notional Amount | 8,800 | |
Gain (loss) from derivative financial instruments | 1,304 | |
Forward delivery loan commitment | ||
Derivative assets and liabilities - lending | ||
Derivative Asset, Notional Amount | 0 | 0 |
Mortgage lending operations | Interest rate lock commitments (IRLCs) | ||
Derivative assets and liabilities - lending | ||
Assets fair value | 5 | 3,100 |
Mortgage lending operations | Hedging Instruments | ||
Derivative assets and liabilities - lending | ||
Assets fair value | $ 47 | |
Liabilities fair value | $ 55 |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Details) $ / shares in Units, $ in Thousands | 2 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Nov. 15, 2022 shares | Oct. 26, 2022 shares | Oct. 20, 2022 USD ($) $ / shares shares | Aug. 25, 2022 $ / shares shares | Dec. 07, 2011 | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) item $ / shares | Dec. 31, 2022 USD ($) $ / shares | Dec. 31, 2021 | |
Shares of preferred stock to be issued in conversion | 30 | ||||||||
Aggregate number of common shares which can be purchased with warrants issued | 681,923 | 1,425,695 | |||||||
Common Stock | |||||||||
New shares issued during the period | 3,298,439 | 7,330,319 | |||||||
Segregation order, number of shares to be held in escrow | 4,437,280 | ||||||||
Series B and C Preferred Stock | |||||||||
Outstanding liquidation preference | $ | $ 72,000 | ||||||||
Liquidation preference amount per share | $ / shares | $ 25 | ||||||||
Series B 9.375% redeemable preferred stock | |||||||||
Cumulative undeclared dividends in arrears | $ | $ 20,300 | $ 20,300 | |||||||
Cumulative undeclared dividends in arrears (per share) | $ / shares | $ 30.47 | $ 30.47 | |||||||
Liquidation preference amount per share | $ / shares | 55.47 | ||||||||
Exchange offer, percent of shares tendered | 69% | ||||||||
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% | 9.375% | ||||||
Shares of common stock to be issued in conversion | 13.33 | ||||||||
Cumulative undeclared dividends in arrears, increase in every quarter (per share) | $ / shares | $ 0.5859 | ||||||||
Amount of increase in cumulative undeclared dividends in arrears in each quarter | $ | $ 390 | ||||||||
Number of quarterly dividends payments granted under judgement for Preferred shareholders | item | 3 | ||||||||
Dividend amount required to be paid by company in three quarterly payments | $ | $ 1,200 | ||||||||
Series C 9.125% redeemable preferred stock | |||||||||
Exchange offer, percent of shares tendered | 67% | ||||||||
Preferred stock, dividend rate (as a percent) | 9.125% | 9.125% | 9.125% | ||||||
Shares of common stock to be issued in conversion | 1.25 | ||||||||
Shares of preferred stock to be issued in conversion | 1 | ||||||||
Warrants to be issued n conversion | 1.5 | ||||||||
Warrant cash exercise price | $ / shares | $ 5 | ||||||||
Series D 8.25% redeemable preferred stock | |||||||||
Cumulative undeclared dividends in arrears | $ | $ 52 | $ 52 | |||||||
Liquidation preference amount per share | $ / shares | $ 0.10 | ||||||||
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% | 8.25% | 8.25% | |||||
Cumulative undeclared dividends in arrears, increase in every quarter (per share) | $ / shares | $ 0.0021 | $ 0.0021 | |||||||
Amount of increase in cumulative undeclared dividends in arrears in each quarter | $ | $ 72 | $ 72 | |||||||
New shares issued during the period | 6,599,035 | 14,773,811 | |||||||
Segregation order, number of shares to be deposited | 13,311,840 | ||||||||
Preferred stock, redemption price per share | $ / shares | $ 0.10 | ||||||||
Preferred stock, fixed annual dividend rate per share | $ / shares | $ 0.00825 | ||||||||
Series D 8.25% redeemable preferred stock | Maximum | |||||||||
Preferred stock mandatory redemption period | 60 days |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Fair value of Financial Instruments Included in the Consolidated Financial Statements (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Mortgage servicing rights | $ 749 | |
Carrying Amount | ||
Assets | ||
Cash and cash equivalents | $ 25,864 | 29,555 |
Restricted cash | 4,140 | 5,657 |
Mortgage loans held for-for-sale | 13,052 | 308,477 |
Mortgage servicing rights | 749 | |
Derivatives assets, lending, net | 52 | 3,111 |
Securitized mortgage collateral | 1,639,251 | |
Liabilities | ||
Warehouse borrowings | 3,622 | 285,539 |
Convertible notes | 15,000 | 20,000 |
Long-term debt | 27,753 | 46,536 |
Securitized mortgage borrowings | 1,614,862 | |
Derivative liabilities, lending, net | 55 | |
Estimated Fair Value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 25,864 | 29,555 |
Restricted cash | 4,140 | 5,657 |
Estimated Fair Value | Level 2 | ||
Assets | ||
Mortgage loans held for-for-sale | 13,052 | 308,477 |
Derivatives assets, lending, net | 47 | |
Liabilities | ||
Warehouse borrowings | 3,622 | 285,539 |
Derivative liabilities, lending, net | 55 | |
Estimated Fair Value | Level 3 | ||
Assets | ||
Mortgage servicing rights | 749 | |
Derivatives assets, lending, net | 5 | 3,111 |
Securitized mortgage collateral | 1,639,251 | |
Liabilities | ||
Convertible notes | 15,000 | 20,000 |
Long-term debt | $ 27,753 | 46,536 |
Securitized mortgage borrowings | $ 1,614,862 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 1 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Assets | ||
Mortgage servicing rights | $ 749 | |
Level 3 | ||
Fair Value Measurements | ||
Percentage of level three assets to total assets measured at fair value | 0% | 83% |
Percentage of level three liabilities to total liabilities measured at fair value | 62% | 84% |
Mortgage servicing rights | Government | ||
Fair Value Measurements | ||
Total amount received from sale of MSR | $ 725 | |
Recurring basis | Level 2 | ||
Assets | ||
Mortgage loans held for-for-sale | 13,052 | $ 308,477 |
Derivatives assets, lending, net | 47 | |
Total assets at fair value | 13,099 | 308,477 |
Liabilities | ||
Derivative liabilities, lending, net | 55 | |
Total liabilities at fair value | 55 | |
Recurring basis | Level 3 | ||
Assets | ||
Derivatives assets, lending, net | 5 | 3,111 |
Mortgage servicing rights | 749 | |
Securitized mortgage collateral | 1,639,251 | |
Total assets at fair value | 5 | 1,643,111 |
Liabilities | ||
Securitized mortgage borrowings | 1,614,862 | |
Long-term debt | 27,753 | 46,536 |
Total liabilities at fair value | 27,753 | 1,661,398 |
Recurring basis | Derivative assets, lending, net | Interest rate lock commitments (IRLCs) | Level 3 | ||
Assets | ||
Derivatives assets, lending, net | 5 | $ 3,100 |
Recurring basis | Derivative assets, lending, net | Hedging Instruments | Level 2 | ||
Assets | ||
Derivatives assets, lending, net | $ 47 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Reconciliation of All Assets and Liabilities Measured Using Level 3 Input (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Purchases, issuances and settlements: | ||
Net interest income including cash received and paid | $ 1,200 | $ 8,100 |
Recurring basis | Securitized mortgage borrowings | Level 3 | ||
Changes in fair value of liabilities during the period | ||
Fair value in the beginning of the period | (1,614,862) | (2,086,557) |
Total gains (losses) included in earnings: | ||
Total (losses) gains included in earnings | $ (7,564) | (182,378) |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Expense, amount | |
Purchases, issuances and settlements: | ||
Settlements | $ 1,622,426 | 654,073 |
Fair value at the end of the period | (1,614,862) | |
Unrealized gains (losses) still held | 2,318,296 | |
Recurring basis | Securitized mortgage borrowings | Interest expense | Level 3 | ||
Total gains (losses) included in earnings: | ||
Total (losses) gains included in earnings | (37,090) | |
Recurring basis | Securitized mortgage borrowings | Change in fair value | Level 3 | ||
Total gains (losses) included in earnings: | ||
Total (losses) gains included in earnings | (145,288) | |
Recurring basis | Long-term debt | Level 3 | ||
Changes in fair value of liabilities during the period | ||
Fair value in the beginning of the period | (46,536) | (44,413) |
Total gains (losses) included in earnings: | ||
Total (losses) gains included in earnings | 18,783 | (2,123) |
Purchases, issuances and settlements: | ||
Fair value at the end of the period | (27,753) | (46,536) |
Unrealized gains (losses) still held | (34,247) | 15,464 |
Recurring basis | Long-term debt | Interest expense | Level 3 | ||
Total gains (losses) included in earnings: | ||
Total (losses) gains included in earnings | (1,187) | (1,499) |
Recurring basis | Long-term debt | Change in fair value | Level 3 | ||
Total gains (losses) included in earnings: | ||
Total (losses) gains included in earnings | 2,757 | 2,098 |
Recurring basis | Long-term debt | Change in instrument specific credit risk | Level 3 | ||
Total gains (losses) included in earnings: | ||
Total (losses) gains included in earnings | 17,213 | (2,722) |
Recurring basis | Securitized mortgage collateral | Level 3 | ||
Changes in fair value of assets during the period | ||
Fair value at the beginning of the period | 1,639,251 | 2,100,175 |
Total (losses) gains included in earnings: | ||
Total (losses) gains included in earnings | 11,267 | 139,597 |
Purchases, issuances and settlements | ||
Settlements | (1,650,518) | (600,521) |
Fair value at the end of the period | 1,639,251 | |
Unrealized gains (losses) still held | (104,299) | |
Recurring basis | Securitized mortgage collateral | Interest income | Level 3 | ||
Total (losses) gains included in earnings: | ||
Total (losses) gains included in earnings | 2,019 | (12,162) |
Recurring basis | Securitized mortgage collateral | Change in fair value | Level 3 | ||
Total (losses) gains included in earnings: | ||
Total (losses) gains included in earnings | 9,248 | 151,759 |
Recurring basis | Mortgage servicing rights | Level 3 | ||
Changes in fair value of assets during the period | ||
Fair value at the beginning of the period | 749 | 339 |
Total (losses) gains included in earnings: | ||
Total (losses) gains included in earnings | $ (70) | $ (126) |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) |
Purchases, issuances and settlements | ||
Issuances | $ 46 | $ 536 |
Settlements | (725) | |
Fair value at the end of the period | 749 | |
Unrealized gains (losses) still held | 749 | |
Recurring basis | Interest rate lock commitments (IRLCs) | Level 3 | ||
Changes in fair value of assets during the period | ||
Fair value at the beginning of the period | 3,111 | 7,275 |
Total (losses) gains included in earnings: | ||
Total (losses) gains included in earnings | $ (3,106) | $ (4,164) |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) | Trust Assets, Net Change in Fair Value Including Real Estate Owned, Gain (Loss) |
Purchases, issuances and settlements | ||
Fair value at the end of the period | $ 5 | $ 3,111 |
Unrealized gains (losses) still held | $ 5 | $ 3,111 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Valuation Techniques And Unobservable Inputs Applied (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Securitized mortgage borrowings | Measurement Input, Default Rate | DCF | Level 3 | Minimum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.0006 | |
Securitized mortgage borrowings | Measurement Input, Default Rate | DCF | Level 3 | Maximum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.043 | |
Securitized mortgage borrowings | Measurement Input, Default Rate | DCF | Level 3 | Weighted Average | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.017 | |
Securitized mortgage borrowings | Measurement Input, Loss Severity | DCF | Level 3 | Minimum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.0001 | |
Securitized mortgage borrowings | Measurement Input, Loss Severity | DCF | Level 3 | Maximum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.976 | |
Securitized mortgage borrowings | Measurement Input, Loss Severity | DCF | Level 3 | Weighted Average | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.701 | |
Securitized mortgage borrowings | Measurement Input, Discount Rate | DCF | Level 3 | Minimum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.021 | |
Securitized mortgage borrowings | Measurement Input, Discount Rate | DCF | Level 3 | Maximum | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.130 | |
Securitized mortgage borrowings | Measurement Input, Discount Rate | DCF | Level 3 | Weighted Average | ||
Unobservable input | ||
Measurement input, securitized mortgage borrowings | 0.036 | |
Long-term debt | Measurement Input, Discount Rate | DCF | Level 3 | ||
Unobservable input | ||
Measurement input, long-term debt | 0.086 | |
Long-term debt | Measurement Input, Discount Rate | DCF | Level 3 | Weighted Average | ||
Unobservable input | ||
Measurement input, long-term debt | 0.086 | |
Securitized mortgage collateral | Measurement Input, Prepayment Rate | DCF | Level 3 | Minimum | ||
Unobservable input | ||
Measurement input, securitized mortgage collateral | 0.029 | |
Securitized mortgage collateral | Measurement Input, Prepayment Rate | DCF | Level 3 | Maximum | ||
Unobservable input | ||
Measurement input, securitized mortgage collateral | 0.463 | |
Securitized mortgage collateral | Measurement Input, Prepayment Rate | DCF | Level 3 | Weighted Average | ||
Unobservable input | ||
Measurement input, securitized mortgage collateral | 0.107 | |
Mortgage servicing rights | Measurement Input, Prepayment Rate | DCF | Level 3 | Minimum | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.0801 | |
Mortgage servicing rights | Measurement Input, Prepayment Rate | DCF | Level 3 | Maximum | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.291 | |
Mortgage servicing rights | Measurement Input, Prepayment Rate | DCF | Level 3 | Weighted Average | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.103 | |
Mortgage servicing rights | Measurement Input, Discount Rate | DCF | Level 3 | Minimum | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.125 | |
Mortgage servicing rights | Measurement Input, Discount Rate | DCF | Level 3 | Maximum | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.150 | |
Mortgage servicing rights | Measurement Input, Discount Rate | DCF | Level 3 | Weighted Average | ||
Unobservable input | ||
Measurement input, mortgage servicing rights | 0.128 | |
Interest rate lock commitments (IRLCs) | Measurement Input, Pull-through Rate | Minimum | ||
Unobservable input | ||
Measurement input, derivative assets - IRLCs, net | 0.700 | |
Interest rate lock commitments (IRLCs) | Measurement Input, Pull-through Rate | Maximum | ||
Unobservable input | ||
Measurement input, derivative assets - IRLCs, net | 0.780 | |
Interest rate lock commitments (IRLCs) | Measurement Input, Pull-through Rate | Weighted Average | ||
Unobservable input | ||
Measurement input, derivative assets - IRLCs, net | 0.723 | |
Interest rate lock commitments (IRLCs) | Measurement Input, Pull-through Rate | Market pricing | Level 3 | Minimum | ||
Unobservable input | ||
Measurement input, derivative assets - IRLCs, net | 0.500 | |
Interest rate lock commitments (IRLCs) | Measurement Input, Pull-through Rate | Market pricing | Level 3 | Maximum | ||
Unobservable input | ||
Measurement input, derivative assets - IRLCs, net | 0.980 | |
Interest rate lock commitments (IRLCs) | Measurement Input, Pull-through Rate | Market pricing | Level 3 | Weighted Average | ||
Unobservable input | ||
Measurement input, derivative assets - IRLCs, net | 0.790 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Changes in Recurring Fair Value Measurements Included in Earnings (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Change in Fair Value Included in Net Loss | ||
Change in fair value of net trust assets, excluding trust REO | $ (9,248) | $ (6,471) |
Recurring basis | ||
Change in Fair Value Included in Net Loss | ||
Total | (6,602) | (42,989) |
Recurring basis | Interest income | ||
Change in Fair Value Included in Net Loss | ||
Total | 2,019 | (12,162) |
Recurring basis | Interest expense | ||
Change in Fair Value Included in Net Loss | ||
Total | (8,751) | (38,589) |
Recurring basis | Change in Fair Value of Net Trust Assets | ||
Change in Fair Value Included in Net Loss | ||
Total | 9,248 | 6,471 |
Change in fair value of net trust assets, excluding trust REO | 9,200 | 6,500 |
Recurring basis | Change in Fair Value of Long-term Debt | ||
Change in Fair Value Included in Net Loss | ||
Total | 2,757 | 2,098 |
Recurring basis | Other Income and Expense | ||
Change in Fair Value Included in Net Loss | ||
Total | (70) | (126) |
Recurring basis | Gain on sale of loans, net | ||
Change in Fair Value Included in Net Loss | ||
Total | (11,805) | (681) |
Recurring basis | Hedging Instruments | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of liabilities | 103 | 88 |
Recurring basis | Hedging Instruments | Gain on sale of loans, net | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of liabilities | 103 | 88 |
Recurring basis | Level 3 | ||
Long-term debt | ||
Estimated fair value of long-term debt | 27,753 | 46,536 |
Recurring basis | Securitized mortgage borrowings | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of liabilities | (7,564) | (182,378) |
Recurring basis | Securitized mortgage borrowings | Interest expense | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of liabilities | (7,564) | (37,090) |
Recurring basis | Securitized mortgage borrowings | Change in Fair Value of Net Trust Assets | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of liabilities | (145,288) | |
Recurring basis | Long-term debt | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of liabilities | 1,570 | 599 |
Recurring basis | Long-term debt | Interest expense | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of liabilities | (1,187) | (1,499) |
Recurring basis | Long-term debt | Change in Fair Value of Long-term Debt | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of liabilities | 2,757 | 2,098 |
Recurring basis | Long-term debt | Level 3 | ||
Long-term debt | ||
Long-term debt unpaid principal balance | 62,000 | |
Estimated fair value of long-term debt | 27,800 | |
Difference between aggregate unpaid principal balances and fair value of long-term debt | 34,200 | |
Recurring basis | Securitized mortgage collateral | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of assets | 11,267 | 139,597 |
Recurring basis | Securitized mortgage collateral | Interest income | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of assets | 2,019 | (12,162) |
Recurring basis | Securitized mortgage collateral | Change in Fair Value of Net Trust Assets | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of assets | 9,248 | 151,759 |
Recurring basis | Mortgage servicing rights | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of assets | (70) | (126) |
Recurring basis | Mortgage servicing rights | Other Income and Expense | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of assets | (70) | (126) |
Recurring basis | Derivative assets, net | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of assets | (3,106) | (4,164) |
Recurring basis | Derivative assets, net | Gain on sale of loans, net | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of assets | (3,106) | (4,164) |
Recurring basis | Mortgage loans held-for-sale | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of assets | (8,802) | 3,395 |
Recurring basis | Mortgage loans held-for-sale | Gain on sale of loans, net | ||
Change in Fair Value Included in Net Loss | ||
Change in fair value of assets | $ (8,802) | $ 3,395 |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Securitized mortgage collateral And mortgage borrowings (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value of Financial Instruments | ||||
Aggregate sales price for sale of consolidated securitization trusts | $ 37,500 | |||
Increase in fair value of securitization trust assets | 9,200 | $ 9,200 | $ 9,248 | $ 6,471 |
Transaction Costs Related To Transfer of Securitization Trust | $ 277 | $ 277 |
Fair Value of Financial Instr_9
Fair Value of Financial Instruments - Nonrecurring Fair Value Measurements (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 USD ($) ft² | Dec. 31, 2022 USD ($) ft² | Dec. 31, 2021 USD ($) | |
Total Losses | |||
Impairment of ROU asset | $ 123 | $ 123 | |
Sublease square footage | ft² | 1,900 | ||
Irvine, CA location | |||
Total Losses | |||
Impairment of ROU asset | $ 123 | ||
Sublease square footage | ft² | 120,000 | ||
Square footage of lease subject to ROU asset impairment. | ft² | 1,900 | ||
Nonrecurring Fair Value Measurements | |||
Total Losses | |||
REO | $ 0 | $ 111 | |
Impairment of ROU asset | 123 | ||
Nonrecurring Fair Value Measurements | Level 2 | |||
Fair Value Measurements | |||
REO | 3,479 | ||
Nonrecurring Fair Value Measurements | Level 3 | |||
Fair Value Measurements | |||
ROU asset | $ 1,248 | $ 10,209 |
Reconciliation of Loss Per Co_3
Reconciliation of Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 2 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Oct. 20, 2022 | Aug. 25, 2022 | Dec. 07, 2011 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator for basic loss per share: | |||||||
Net loss | $ (39,432) | $ (3,878) | |||||
Less: Cumulative non-declared dividends on preferred stock | (52) | (780) | |||||
Net loss attributable to common stockholders | (39,484) | (4,658) | |||||
Numerator for diluted loss per share: | |||||||
Net loss | (39,484) | (4,658) | |||||
Net loss plus interest expense attributable to convertible notes | $ (39,484) | $ (4,658) | |||||
Denominator for basic loss per share: | |||||||
Basic weighted average common shares outstanding during the period | 23,918 | 21,332 | |||||
Denominator for diluted loss per share : | |||||||
Basic weighted average common shares outstanding during the period | 23,918 | 21,332 | |||||
Diluted weighted average common shares | 23,918 | 21,332 | |||||
Basic (in dollars per share) | $ (1.65) | $ (0.22) | |||||
Diluted (in dollars per share) | $ (1.65) | $ (0.22) | |||||
Series B Preferred Stock | |||||||
Denominator for diluted loss per share : | |||||||
Cumulative undeclared dividends in arrears | $ 20,300 | $ 20,300 | |||||
Cumulative undeclared dividends in arrears (per share) | $ 30.47 | $ 30.47 | |||||
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% | 9.375% | ||||
Amount of increase in cumulative undeclared dividends in arrears in each quarter | $ 390 | ||||||
Cumulative undeclared dividends in arrears, increase in every quarter (per share) | $ 0.5859 | ||||||
Series D Preferred Stock | |||||||
Denominator for diluted loss per share : | |||||||
Cumulative undeclared dividends in arrears | $ 52 | $ 52 | |||||
Preferred stock, dividend rate (as a percent) | 8.25% | 8.25% | 8.25% | 8.25% | |||
Amount of increase in cumulative undeclared dividends in arrears in each quarter | $ 72 | $ 72 | |||||
Cumulative undeclared dividends in arrears, increase in every quarter (per share) | $ 0.0021 | $ 0.0021 | |||||
Stock options, RSAs, RSUs and DSUs | |||||||
Denominator for diluted loss per share : | |||||||
Antidilutive securities excluded from weighted average share calculations (in shares) | 772 | 1,000 | |||||
Convertible Notes | |||||||
Denominator for diluted loss per share : | |||||||
Antidilutive securities excluded from weighted average share calculations (in shares) | 698 | 930 | |||||
Warrants | |||||||
Denominator for diluted loss per share : | |||||||
Antidilutive securities excluded from weighted average share calculations (in shares) | 2,300 | 202 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current income taxes: | ||
State | $ 38 | $ 71 |
Total current income tax expense | 38 | 71 |
Deferred income taxes: | ||
Total income tax expense | $ 38 | $ 71 |
Income Taxes - Summary of Defer
Income Taxes - Summary of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Federal and state net operating losses | $ 248,559 | $ 178,194 |
Mortgage securities | 55,283 | |
Depreciation and amortization | 21,655 | 24,355 |
Capital loss carryover | 172 | 172 |
Compensation and other accruals | 1,563 | 3,058 |
Repurchase reserve | 1,839 | 1,493 |
Total gross deferred tax assets | 273,788 | 262,555 |
Deferred tax liabilities: | ||
Fair value adjustments on long-term debt | (9,516) | (3,980) |
Mortgage servicing rights | (236) | |
Corporate-owned life insurance | (1,272) | (1,017) |
Total gross deferred tax liabilities | (10,788) | (5,233) |
Valuation allowance | (263,000) | (257,322) |
Total net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of income taxes to the expected statutory federal corporate income tax rates | ||
Expected income tax expense | $ (8,273) | $ (799) |
State tax expense, net of federal benefit | 30 | 56 |
State rate change | 345 | (640) |
Change in valuation allowance | 7,532 | 1,218 |
Corporate-owned life insurance interest and premiums | 121 | 96 |
Other | 283 | 140 |
Total income tax expense | $ 38 | $ 71 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ / shares in Units, $ in Thousands | Oct. 23, 2019 shareholder $ / shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Operating loss carryforwards | |||
Accumulated other comprehensive earnings | $ 39,257 | $ 22,044 | |
Accumulated other comprehensive earnings, tax | 11,300 | ||
Number of five-percent stockholders which, in the event of an increase in their ownership percentage by more than fifty percent, could result in the entity experiencing an ownership change | shareholder | 1 | ||
Rolling time period used for measurement of ownership increase of five-percent shareholders | 3 years | ||
Threshold percentage of outstanding stock in an unapproved stock purchase that would trigger activation of rights under the Rights Plan | 4.99% | ||
Redemption price of rights issued under Rights Plan | $ / shares | $ 0.001 | ||
Term of Rights Plan | 3 years | ||
AMT credit | 404 | ||
Minimum | |||
Operating loss carryforwards | |||
Percentage of ownership increase by five-percent shareholders which could potentially trigger an ownership change | 50% | ||
Federal | |||
Operating loss carryforwards | |||
Net operating loss carryforwards | 850,100 | ||
Net operating loss carryforwards with indefinite carryover period | 292,500 | ||
California | |||
Operating loss carryforwards | |||
Net operating loss carryforwards | $ 624,800 |
Segment Reporting - Balance She
Segment Reporting - Balance Sheet Items (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Segment Reporting | ||
Cash and cash equivalents | $ 25,864 | $ 29,555 |
Restricted cash | 4,140 | 5,657 |
Mortgage loans held-for-sale | 13,052 | 308,477 |
Mortgage servicing rights | 749 | |
Trust assets | 1,642,730 | |
Other assets | 17,275 | 35,603 |
Total assets | 60,331 | 2,022,771 |
Total liabilities | 71,934 | 2,012,835 |
Corporate and other | ||
Segment Reporting | ||
Cash and cash equivalents | 441 | 2,816 |
Other assets | 15,610 | 25,409 |
Total assets | 16,051 | 28,225 |
Total liabilities | 32,888 | 52,380 |
Mortgage Lending | Operating segments | ||
Segment Reporting | ||
Cash and cash equivalents | 24,923 | 26,239 |
Restricted cash | 4,140 | 5,657 |
Mortgage loans held-for-sale | 13,052 | 308,477 |
Mortgage servicing rights | 749 | |
Other assets | 1,586 | 10,051 |
Total assets | 43,701 | 351,173 |
Total liabilities | 10,866 | 298,726 |
Real Estate Services | Operating segments | ||
Segment Reporting | ||
Cash and cash equivalents | 500 | 500 |
Other assets | 2 | 2 |
Total assets | 502 | 502 |
Long-term Mortgage Portfolio | Operating segments | ||
Segment Reporting | ||
Trust assets | 1,642,730 | |
Other assets | 77 | 141 |
Total assets | 77 | 1,642,871 |
Total liabilities | $ 28,180 | $ 1,661,729 |
Segment Reporting - Statement o
Segment Reporting - Statement of Operations (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Segment Reporting | ||
Number of reportable segments | item | 3 | |
Gain on sale of loans, net | $ 6,317 | $ 65,294 |
Servicing income, net | 63 | (432) |
Gain on mortgage servicing rights, net | 194 | 34 |
Broker fee income | 50 | |
Real estate services fees, net | 1,081 | 1,144 |
Other revenue | 890 | 279 |
Other operating expense | (56,125) | (81,204) |
Other income (expense) | 8,136 | 11,078 |
Income (loss) before income taxes | (39,394) | (3,807) |
Income tax expense | 38 | 71 |
Net loss | (39,432) | (3,878) |
Operating segments | Mortgage Lending | ||
Segment Reporting | ||
Gain on sale of loans, net | 6,317 | 65,294 |
Servicing income, net | 63 | (432) |
Gain on mortgage servicing rights, net | 194 | 34 |
Broker fee income | 50 | |
Other revenue | 9 | 24 |
Other operating expense | (34,025) | (62,605) |
Other income (expense) | 1,368 | 98 |
Income (loss) before income taxes | (26,024) | 2,413 |
Operating segments | Real Estate Services | ||
Segment Reporting | ||
Real estate services fees, net | 1,081 | 1,144 |
Other operating expense | (1,373) | (1,409) |
Income (loss) before income taxes | (292) | (265) |
Operating segments | Long-term Mortgage Portfolio | ||
Segment Reporting | ||
Other revenue | 24 | 110 |
Other operating expense | (262) | (778) |
Other income (expense) | 8,511 | 12,840 |
Income (loss) before income taxes | 8,273 | 12,172 |
Corporate and other | ||
Segment Reporting | ||
Other revenue | 857 | 145 |
Other operating expense | (20,465) | (16,412) |
Other income (expense) | (1,743) | (1,860) |
Income (loss) before income taxes | $ (21,351) | $ (18,127) |
Commitments and Contingencies -
Commitments and Contingencies - Legal Proceedings (Details) $ in Millions | 12 Months Ended | ||||||||
Aug. 12, 2022 | Apr. 01, 2020 item | Jul. 16, 2018 USD ($) director item | Dec. 07, 2011 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2022 USD ($) item | Jul. 22, 2022 item | Dec. 31, 2013 | |
Series B Preferred Stock | |||||||||
Repurchase reserve | |||||||||
Preferred stock, dividend rate (as a percent) | 9.375% | 9.375% | 9.375% | ||||||
Number of quarterly dividends payments granted under judgement for Preferred shareholders | 3 | ||||||||
Dividend amount required to be paid by company in three quarterly payments | $ | $ 1.2 | ||||||||
Series C Preferred Stock [Member] | |||||||||
Repurchase reserve | |||||||||
Preferred stock, dividend rate (as a percent) | 9.125% | 9.125% | 9.125% | ||||||
Curtis J. Timm | Series B and C Preferred Stock | |||||||||
Repurchase reserve | |||||||||
Number of directors elected by Preferred shareholders | 2 | ||||||||
Percentage of shareholder approval required | 66.67% | ||||||||
Curtis J. Timm | Series B Preferred Stock | |||||||||
Repurchase reserve | |||||||||
Number of additional directors to be elected by Preferred shareholders | director | 2 | ||||||||
Number of days within which special election for election of directors to be held | 60 days | ||||||||
Number of quarterly dividends payments granted under judgement for Preferred shareholders | 3 | 3 | |||||||
Dividend amount required to be paid by company in three quarterly payments | $ | $ 1.2 | ||||||||
Percentage of shareholder approval required | 66.67% | 66.67% | 66.67% | ||||||
Number of co-plaintiffs appealing court ruling | 1 | ||||||||
Number of co-plaintiffs | 2 | ||||||||
Share redemption period after closing exchange offer | 5 days |
Commitments and Contingencies_2
Commitments and Contingencies - Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Lease Assets and Liabilities | ||
Operating lease ROU assets | $ 1,248 | $ 10,209 |
Balance sheet classification - ROU assets | Other assets | Other assets |
Operating lease liabilities | $ 51 | |
Balance sheet classification - Operating lease liabilities | Other liabilities | |
Weighted average remaining lease term (in years) | 9 months 18 days | |
Weighted average discount rate | 3.60% |
Commitments and Contingencies_3
Commitments and Contingencies - Future Minimum Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies | |||
Year 2023 | $ 55 | ||
Total lease commitments | 55 | ||
Less: imputed interest | (4) | ||
Total lease liability | 51 | ||
Cash paid for operating leases | 5,200 | $ 4,600 | |
Total operating lease expense | 5,100 | $ 4,000 | |
Impairment of ROU asset | $ 123 | $ 123 |
Commitments and Contingencies_4
Commitments and Contingencies - Lease Commitments (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 16, 2022 USD ($) | Jan. 31, 2023 USD ($) ft² $ / ft² | Dec. 31, 2022 USD ($) ft² | Mar. 31, 2022 USD ($) ft² | Dec. 31, 2022 USD ($) ft² | Dec. 31, 2021 USD ($) | |
Lease information | ||||||
Occupancy cost | $ 5,297 | $ 4,236 | ||||
Sublease square footage | ft² | 1,900 | |||||
Impairment of ROU asset | $ 123 | $ 123 | ||||
Irvine, CA location | ||||||
Lease information | ||||||
Occupancy cost | $ 1,200 | $ 970 | ||||
Sublease square footage | ft² | 120,000 | 120,000 | ||||
Square footage of lease subject to ROU asset impairment. | ft² | 1,900 | 1,900 | ||||
Payment to terminate existing lease agreement | $ 3,000 | $ 3,000 | ||||
Impairment of ROU asset | $ 123 | |||||
Subsequent Event | Newport Beach, CA location | ||||||
Lease information | ||||||
Sublease square footage | ft² | 18,900 | |||||
Average rent per square foot | $ / ft² | 1.35 | |||||
Estimated total occupancy costs under new lease | $ 800 |
Commitments and Contingencies_5
Commitments and Contingencies - Repurchase Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies | ||
Beginning balance | $ 4,744 | $ 7,054 |
Provision for repurchases | 2,417 | 111 |
Settlements | (1,286) | (2,421) |
Total repurchase reserve | 5,875 | 4,744 |
Loans subject to representations and warranties | $ 979,000 | $ 2,800,000 |
Commitments and Contingencies_6
Commitments and Contingencies - Corporate-owned Life Insurance Trusts (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) item | Dec. 31, 2020 USD ($) | Dec. 31, 2021 USD ($) | |
Corporate-owned life insurance trusts | |||
Number of life insurance trusts held for former executive officers | item | 3 | ||
Corporate-owned life insurance cash surrender value | $ 11,619 | $ 10,800 | |
Corporate-owned life insurance liability | 13,601 | $ 13,000 | |
Corporate-owned life insurance short-fall | (1,982) | ||
Accumulated Deficit | |||
Corporate-owned life insurance trusts | |||
Initial shortfall of corporate-owned life insurance trusts at consolidation of trusts | $ 1,300 | ||
Trust #1 | |||
Corporate-owned life insurance trusts | |||
Corporate-owned life insurance cash surrender value | 5,314 | ||
Corporate-owned life insurance liability | 6,280 | ||
Corporate-owned life insurance short-fall | (966) | ||
Trust #2 | |||
Corporate-owned life insurance trusts | |||
Corporate-owned life insurance cash surrender value | 4,125 | ||
Corporate-owned life insurance liability | 4,923 | ||
Corporate-owned life insurance short-fall | (798) | ||
Trust #3 | |||
Corporate-owned life insurance trusts | |||
Corporate-owned life insurance cash surrender value | 2,180 | ||
Corporate-owned life insurance liability | 2,398 | ||
Corporate-owned life insurance short-fall | $ (218) |
Commitments and Contingencies_7
Commitments and Contingencies - Concentration of Risk (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | |
Concentration of Risk | ||
Aggregate unpaid principal balance of loans secured by properties | $ | $ 13,052 | $ 308,477 |
Mortgage loans | Geographic concentration | California | ||
Concentration of Risk | ||
Percentage of risk | 57% | |
Mortgage loans | Investor concentration | Largest investors | ||
Concentration of Risk | ||
Percentage of risk | 75% | |
Number of investors | item | 5 |
Share Based Payments and Empl_3
Share Based Payments and Employee Benefit Plans - Incentive Plan and Weighted Average Assumptions Used (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2022 | |
2020 Incentive Plan | ||
Equity and Share Based Payments | ||
Number of shares available under the Plan | 2,000,000 | |
Shares available for grant as stock options, restricted stock and deferred stock awards | 1,540,490 | |
2010 Incentive Plan | ||
Equity and Share Based Payments | ||
Number of shares available under the Plan | 722,006 | |
Stock options | ||
Weighted average assumptions used in estimating fair value of options granted | ||
Risk-free interest rate (as a percent) | 0.50% | |
Expected lives (in years) | 4 years 6 months 14 days | |
Expected volatility (as a percent) | 77.55% | |
Expected dividend yield (as a percent) | 0% | |
Fair value per share (in dollars per share) | $ 1.96 |
Share Based Payments and Empl_4
Share Based Payments and Employee Benefit Plans - Stock Options (Details) - Stock options - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares | ||
Options outstanding at beginning of period (in shares) | 570,228 | 524,357 |
Options granted (in shares) | 0 | 85,154 |
Options forfeited / cancelled (in shares) | (38,750) | (39,283) |
Options outstanding at end of year (in shares) | 531,478 | 570,228 |
Options exercisable at end of year (in shares) | 496,790 | 406,361 |
Weighted-Average Exercise Price | ||
Options outstanding at beginning of period (in dollars per share) | $ 7.89 | $ 8.58 |
Options granted (in dollars per share) | 3.29 | |
Options forfeited / cancelled (in dollars per share) | 8.33 | 7.15 |
Options outstanding at end of year (in dollars per share) | 7.86 | 7.89 |
Options exercisable at end of year (in dollars per share) | $ 8.18 | $ 9.65 |
Weighted-Average Remaining Life | ||
Weighted-Average Remaining Life, Options outstanding at end of year | 5 years | 6 years 9 months 7 days |
Weighted-Average Remaining Life, Options exercisable at end of year | 4 years 9 months 10 days | 5 years 11 months 15 days |
Additional disclosure related to options | ||
Market price of common stock | $ 0.17 | $ 1.11 |
Unrecognized compensation cost | $ 43 | |
Weighted-average period over which compensation cost is expected to be recognized | 1 year 1 month 6 days | |
Aggregate grant-date fair value of stock options granted | $ 0 | $ 167 |
Stock-based compensation expense | $ 678 | $ 884 |
Share Based Payments and Empl_5
Share Based Payments and Employee Benefit Plans - Options Exercise Price Range (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
$3.22 - 3.74 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | $ 3.22 |
Exercise price range, upper limit (in dollars per share) | $ 3.74 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 126,538 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 6 years 2 months 23 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 3.47 |
Options Exercisable, Number Exercisable (in shares) | shares | 91,850 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 3.53 |
$3.75 - 5.38 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 3.75 |
Exercise price range, upper limit (in dollars per share) | $ 5.38 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 200,000 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 6 years 1 month 28 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 3.75 |
Options Exercisable, Number Exercisable (in shares) | shares | 200,000 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 3.75 |
$5.39 - 9.85 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 5.39 |
Exercise price range, upper limit (in dollars per share) | $ 9.85 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 27,582 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 3 years 3 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 7.01 |
Options Exercisable, Number Exercisable (in shares) | shares | 27,582 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 7.01 |
$9.86 - 17.39 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 9.86 |
Exercise price range, upper limit (in dollars per share) | $ 17.39 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 79,608 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 3 years 2 months 26 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 11.84 |
Options Exercisable, Number Exercisable (in shares) | shares | 79,608 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 11.84 |
$17.40 - 20.49 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 17.40 |
Exercise price range, upper limit (in dollars per share) | $ 20.49 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 48,750 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 3 years 6 months 18 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 17.40 |
Options Exercisable, Number Exercisable (in shares) | shares | 48,750 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 17.40 |
$20.50 - $20.50 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 20.50 |
Exercise price range, upper limit (in dollars per share) | $ 20.50 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 49,000 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 2 years 6 months 21 days |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 20.50 |
Options Exercisable, Number Exercisable (in shares) | shares | 49,000 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 20.50 |
$3.22 to $20.50 | |
Additional information regarding stock options outstanding | |
Exercise price range, lower limit (in dollars per share) | 3.22 |
Exercise price range, upper limit (in dollars per share) | $ 20.50 |
Stock Options Outstanding, Number Outstanding (in shares) | shares | 531,478 |
Stock Options Outstanding, Weighted-Average Remaining Contractual Life (in years) | 5 years |
Stock Options Outstanding, Weighted-Average Exercise Price (in dollars per share) | $ 7.86 |
Options Exercisable, Number Exercisable (in shares) | shares | 496,790 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 8.18 |
Share Based Payments and Empl_6
Share Based Payments and Employee Benefit Plans - Stock Units And Awards (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Restricted stock units (RSU's) | |
Number of Shares | |
Outstanding at beginning of year (in shares) | 397,829 |
Issued (converted) (in shares) | (155,080) |
Forfeited / cancelled (in shares) | (21,365) |
Outstanding at end of period (in shares) | 221,384 |
Weighted-Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 4.11 |
Issued (converted) (in dollars per share) | $ / shares | 4.31 |
Forfeited / cancelled (in dollars per share) | $ / shares | 3.83 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 4 |
Additional information | |
Unrecognized compensation cost | $ | $ 321,000 |
Weighted-average period over which compensation cost is expected to be recognized | 1 year |
Deferred stock units | |
Number of Shares | |
Outstanding at beginning of year (in shares) | 54,500 |
Granted (in shares) | 0 |
Issued (converted) (in shares) | (15,000) |
Outstanding at end of period (in shares) | 39,500 |
Weighted-Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 6.61 |
Issued (converted) (in dollars per share) | $ / shares | 3.75 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 7.70 |
Additional information | |
Unrecognized compensation cost | $ | $ 0 |
Deferred stock units | Minimum | |
stock units | |
Vesting period | 1 year |
Deferred stock units | Maximum | |
stock units | |
Vesting period | 3 years |
Share Based Payments and Empl_7
Share Based Payments and Employee Benefit Plans - 401(k) Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Payments and Employee Benefit Plans | ||
Maximum employee contribution (as a percent) | 25% | |
Percentage of eligible compensation matched by employer | 50% | |
Percentage of employer match of eligible employee compensation | 6% | |
Basic matching contributions recorded | $ 402 | $ 1,000 |
Employer discretionary contributions | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | 1 Months Ended | |
Jan. 31, 2023 USD ($) ft² $ / ft² | Mar. 31, 2022 ft² | |
Subsequent Events | ||
Sublease square footage | 1,900 | |
Subsequent Event | Newport Beach, CA location | ||
Subsequent Events | ||
Sublease square footage | 18,900 | |
Average rent per square foot | $ / ft² | 1.35 | |
Estimated total occupancy costs under new lease | $ | $ 800 |