Introduction to Mortgage Servicing Examinations Training - March 2023

Mortgage, LLC Notes to Consolidated Financial Statements (Dollars in Thousands)

1. Business, Basis of Presentation and Accounting Policies

Mortgage, LLC (“

Mortgage”, “we”, “us”, “our” or the “Company”) is a client-focused and

technology-driven residential mortgage lender and servicer with one guarantor, restricted subsidiary, , LLC (“ ”), two non-guarantor unrestricted subsidiaries,

, LLC,

which wholly-owns another non-guarantor, unrestricted subsidiary,

, LLC, and

, LLC, and one wholly-owned subsidiary,

Mortgage Co-Issuer, Inc., that has no substantial operations

or assets. , LLC. The Company has built a centralized multi-product platform that enables us to originate mortgage loans directly to consumers in all 50 states. We primarily market to consumers through the internet, media and various other marketing channels. Mortgage originates all loans using a proprietary, integrated, rules-based technology platform. The Company has focused almost exclusively on originating agency-conforming and government loans directly to qualified borrowers and selling all of its loans into the secondary market. The Company primarily operates out of four web-centers located in ; ; ; and . a wholly owned subsidiary of Mortgage is a non-operating holding company with one wholly owned subsidiary, , LLC (“ ”). , LLC and LLC are special purpose vehicles created solely for a Ginnie Mae Early Buy Out Warehouse Financing Facility. Mortgage was formed solely to act as co-issuer with Mortgage for bond issuances. LLC is a special purpose vehicle created solely for the Warehouse Financing Facility. Mortgage is a wholly owned subsidiary of

As part of the internal reorganization consummated as part of

initial public offering, in record and beneficial holder of 100% of the membership interests of

contributed all of the membership interests it held in

to

,

LLC, a

limited liability company, which, after the consummation of the initial public offering, is majority

owned by interests of

. As a result,

became the direct holder of all the membership

.

, changed its name to “

Mortgage, LLC” effective as of

, pursuant to the

filing of a Certificate of Amendment to the Articles of Organization with the . Consolidation The consolidated financial statements include the accounts of intercompany accounts and transactions have been eliminated in consolidation.

Mortgage and its subsidiaries. Significant

The Company's derivatives, , mortgage loans held for sale, MSRs (including MSRs collateral for financing liability and MSRs financing liability), and investments are measured at fair value on a recurring basis. Additionally, other assets may be required to be measured at fair value in the consolidated financial statements on a nonrecurring basis. Examples of such measurements are mortgage loans transferred between held for investment and held for sale, certain impaired loans, and other real estate owned. For further details of the Company's transactions refer to Note 2,

Fair Value Measurements . Management Estimates

The preparation of consolidated financial statements in conformity with United States Generally Accepted Accounting Principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures 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. Although management is not currently aware of any factors that would significantly change its estimates and assumptions, actual results may differ from these estimates. Certain amounts have been reclassified to conform to the current year presentation.

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