Introduction to Mortgage Servicing Examinations Training - March 2023

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

Guarantees

As of December 31, 2021 and 2020, the Company guaranteed the debt of a related party totaling $5,216 and $15,000, consisting of three separate guarantees. As of December 31, 2021 and 2020, the Company did not record a liability on the Consolidated Balance Sheets for these guarantees because it was not probable that the Company would be required to make payments under these guarantees. Trademark License The Company has a perpetual trademark license agreement with a third-party entity. This agreement requires annual payments by the Company based upon the income from the sale of loans generated under the brand. Total licensing fees incurred and paid were $625 and $7,500 for the years ended December 31, 2021 and 2020, respectively, which is the maximum amount allowable under the contract for the periods indicated and is classified in Other expenses in the Consolidated Statements of Income. The Company has entered into an agreement with that, among other things, gives the Company full ownership of the “ ” brand in 2022 in exchange for certain agreements, subject to the satisfaction of certain conditions. We have fulfilled our payment obligations pertaining to the licensing agreement with Intuit in 2021 and no further expenses are expected. Legal The Company operates in a highly regulated industry and is routinely subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, subpoenas, audits, examinations, investigations and potential enforcement actions from regulatory agencies and state attorney generals; state and federal lawsuits and putative class actions; and other litigation. Periodically, we assess our potential liabilities and contingencies in connection with outstanding legal and administrative proceedings utilizing the latest information available. While it is not possible to predict the outcome of any of these matters, based on our assessment of the facts and circumstances, we do not believe any of these matters, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations or cash flows. However, actual outcomes may differ from those expected and could have a material effect on our financial position, results of operations or cash flows in a future period. The Company accrues for losses when they are probable to occur and such losses are reasonably estimable. Legal costs are expensed as they are incurred. Mortgage is defending itself against a misappropriation of trade secrets claim in a separate lawsuit. That case is in its early stages and is stayed pending a resolution of Mortgage’s dispositive motion. state law by unconscionably inducing the plaintiffs (and a class of other who received loans through Mortgage) into loans by including the borrower’s own estimated home values on appraisal order forms. The district court judge ruled in favor of the plaintiffs and, in a split decision, the U.S. Court of Appeals for the Fourth Circuit affirmed the district court’s decision to grant (i) class certification and (ii) summary judgment on the statutory damages claim. The court of appeals reversed the district court’s summary judgment ruling on a separate breach-of-contract claim and remanded that claim for further proceedings. Mortgage filed a petition for writ of certiorari with the Supreme Court of the United States and, on January 10, 2022, the Supreme Court granted the petition, vacated the court of appeals’ judgment, and remanded the case for further consideration. The Company believes the resolution of this matter is not material to the consolidated financial statements. As of December 31, 2021, the Company recorded reserves related to potential damages in connection with the above legal proceedings of $7,500. The ultimate outcome of these or other actions or proceedings, including any monetary awards against the Company, is uncertain and there can be no assurance as to the amount of any such potential awards. The Company will incur defense costs and other expenses in connection with the lawsuits. Plus, if a judgment for money that exceeds specified thresholds is rendered against us and we fail to timely pay, discharge, In 2018 an initial judgment was entered against Mortgage, formerly known as , for a certified class action lawsuit filed in the U.S. District Court of the Northern District of . The lawsuit alleged that Mortgage, in conjunction with an affiliated appraisal management company, violated

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