Introduction to Mortgage Servicing Examinations Training - March 2023

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

• Incremental 200 basis points of total nonperforming Agency, measured as 90+ delinquencies, servicing in excess of 6% of the total Agency servicing UPB. • Allowable assets for liquidity may include cash and cash equivalents (unrestricted) and available for sale or held for trading investment grade securities (e.g., Agency MBS, Obligations of GSEs, US Treasury Obligations).

The minimum liquidity requirement for Ginnie Mae is defined as follows:

• Maintain liquid assets equal to the greater of $1,000 or 10 basis points of our outstanding single-family MBS. The most restrictive of the minimum net worth and capital requirements require the Company to maintain a minimum adjusted net worth balance of $1,794,783 and $2,175,968 as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the Company was in compliance with this requirement. 15. Share-based Compensation and in connection with the IPO, Mortgage team members. These options vest over a three-year period. Compensation expense associated with the stock options of $30,325 and $13,334, is included in Salaries, commissions and team member benefits in the Consolidated Statements of Income for the years ended December 31, 2021 and 2020, respectively. . granted restricted stock units (“RSUs”) to team members. The RSUs granted vest over a two or three-year period. Compensation expense associated with the RSUs of $70,634 and $33,497, respectively, is included in Salaries, commissions and team member benefits in the Consolidated Statements of Income for the years ended December 31, 2021 and 2020, respectively. in December 2020, with the first offering period beginning in January 2021. Eligible team members may direct the Company, during each three month option period, to withhold up to 15% of their gross pay, the proceeds from which are used to purchase shares of common stock at a price equal to 85% of the closing market price on the exercise date. Under ASC 718, the is a liability classified compensatory plan and the Company recognizes compensation expense over the offering period based on the fair value of the purchase discount. Compensation expense associated with the of $7,855 and zero is included in Salaries, commissions and team member benefits in the Consolidated Statements of Income for the years ended December 31, 2021 and 2020, respectively. In addition, the transactions from the of $43,386 and zero is included in the Contributions from member, net in the Consolidated Statements of Changes in Member’s Equity as of December 31, 2021 and 2020, respectively, as this reflects the parent capital contributions in the form of stock to Mortgagee team members. granted restricted stock units (“RSUs”) to team members. The RSUs granted vest over a four-year period with the first tranche vesting immediately upon issuance and the remaining shares vesting annually over the following four years. Compensation expense associated with the RSUs of $5,107 and $43,034 is included in Salaries, commissions and team member benefits in the Consolidated Statements of Income for the year ended December 31, 2021 and December 31, 2020, respectively. granted stock options to In 2020, and in connection with the IPO, . initiated the In 2017 and 2019, maintains an equity compensation plan (the “ ”) for the benefit of team members (including officers) of and subsidiary companies meeting specified criteria. During 2020,

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