Quarterly report pursuant to Section 13 or 15(d)

Financial Instruments (Tables)

v3.22.2
Financial Instruments (Tables)
6 Months Ended
Jun. 30, 2022
Fair Value Disclosures [Abstract]  
Schedule of Notional Amounts of Outstanding Derivative Positions
Notional Amounts June 30, 2022 December 31, 2021
Forward sales commitments $ 633,188  $ 70,550 
IRLCs 594,111  67,485 
Derivative Instruments, Gain (Loss)
The locations and amounts of gains (losses) recognized in income related to our derivatives are as follows:

Three Months Ended June 30, Six Months Ended June 30,
Instrument Classification 2022 2021 2022 2021
Forward sales commitments Service revenue $ (9,870) $ (1,849) $ (9,845) $ 79 
IRLCs Service revenue 4,054  35  4,029  201 
Schedule of Assets, Liabilities, and Equity Measured at Fair Value on a Recurring Basis
A summary of assets and liabilities related to our financial instruments, measured at fair value on a recurring basis and as reflected in our consolidated balance sheets, is set forth below:

Balance at June 30, 2022 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents
Money market funds $ 302,480  $ 302,480  $ —  $ — 
Agency bonds 7,589  7,589  —  — 
Total cash equivalents 310,069  310,069  —  — 
Short-term investments
U.S. treasury securities 71,014  71,014  —  — 
Agency bonds 11,492  11,492  —  — 
Total short-term investments 82,506  82,506  —  — 
Loans held for sale 306,364  —  306,364  — 
Other current assets
Forward sales commitments 3,462  —  3,462  — 
IRLCs 10,821  —  —  10,821 
Total other current assets 14,283  —  3,462  10,821 
Mortgage servicing rights, at fair value 35,050  —  —  35,050 
Long-term investments
U.S. treasury securities 52,989  52,989  —  — 
Total assets $ 801,261  $ 445,564  $ 309,826  $ 45,871 
Liabilities
Accrued liabilities
Forward sales commitments $ 2,175  $ —  $ 2,175  $ — 
IRLCs 1,310  —  —  1,310 
Total liabilities $ 3,485  $ —  $ 2,175  $ 1,310 
Balance at December 31, 2021 Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant
Other Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Assets
Cash equivalents
        Money market funds $ 509,971  $ 509,971  $ —  $ — 
Total cash equivalents 509,971  509,971  —  — 
Short-term investments
   U.S. treasury securities 16,718  16,718  —  — 
Agency bonds 11,906  11,906  —  — 
Equity securities 5,113  5,113  —  — 
Loans held for sale 35,759  —  35,759  — 
Other current assets
Forward sales commitments 138  —  138  — 
IRLCs 1,191  —  —  1,191 
Total other current assets 1,329  —  138  1,191 
Long-term investments
U.S. treasury securities 54,828  54,828  —  — 
Total assets $ 635,624  $ 598,536  $ 35,897  $ 1,191 
Liabilities
Accrued liabilities
Forward sales commitments $ 93  $ —  $ 93  $ — 
IRLCs 60  —  —  60 
Total liabilities $ 153  $ —  $ 93  $ 60 
Summary of Fair Value Measurement Inputs and Valuation Techniques
The significant unobservable inputs used to determine the fair value of IRLCs and MSRs that could result in a significant change in fair value measurement were as follows:

Key Inputs Valuation Technique June 30, 2022 December 31, 2021
Range Weighted-Average Range Weighted-Average
IRLCs
Pull-through rate
Market pricing
69.9% - 100.0%
89.4% 71.1% 71.1%
MSRs
Prepayment speed Discounted cash flow
6.0% - 15.4%
6.6% N/A N/A
Default rates Discounted cash flow
0.0% - 0.5%
0.1% N/A N/A
Discount rate Discounted cash flow
9.0% - 11.8%
9.1% N/A N/A
Summary of Changes Fair Value Of Interest Rate Derivatives
The following is a summary of changes in the fair value of IRLCs for the three and six months ended June 30, 2022:

Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Balance, net—beginning of period $ 243  $ 1,771  $ 1,155  $ 1,771 
IRLCs acquired in business combination 4,326  —  4,326  — 
Issuances of IRLCs 18,017  5,170  20,300  10,674 
Settlements of IRLCs (14,099) (5,569) (17,268) (10,708)
Fair value changes recognized in earnings 1,024  600  998  235 
Balance, net—end of period $ 9,511  $ 1,972  $ 9,511  $ 1,972 
The following is a summary of changes in the fair value of MSRs for the three and six months ended June 30, 2022 and 2021:

Three and Six Months Ended June 30,
2022 2021
Balance—beginning of period $ —  $ — 
MSRs acquired in business combination 33,982  — 
MSRs originated 964  — 
MSRs sales (774) — 
Fair value changes recognized in earnings 878  — 
Balance, net—end of period $ 35,050  $ — 
Schedule of Long-term Debt
The following table presents the carrying amounts and estimated fair values of our convertible senior notes that are not recorded at fair value on our consolidated balance sheets:

June 30, 2022 December 31, 2021
Issuance Net Carrying Amount Estimated Fair Value Net Carrying Amount Estimated Fair Value
2023 notes $ 23,355  $ 21,264  $ 23,280  $ 34,487 
2025 notes 652,164  386,534  650,783  593,366 
2027 notes 564,354  268,962  563,234  467,814 
The following table summarizes borrowings under these facilities as of the periods presented:
June 30, 2022
Lender Borrowing Capacity Outstanding Borrowings Weighted-Average Interest Rate on Outstanding Borrowings Maturity Date
City National Bank $ 100,000  $ 36,151  3.63  % 10/11/2022
Comerica Bank 75,000  33,448  3.80  Upon lender demand
Origin Bank 75,000  35,000  4.31  9/30/2022
People's United Bank, National Association 50,000  21,695  3.47  10/19/2022
Prosperity Bank 150,000  81,268  3.71  9/30/2022
Republic Bank & Trust Company 75,000  31,906  3.32  8/17/2022
Wells Fargo Bank, N.A. 135,000  44,964  3.52  As determined by lender
Western Alliance Bank 25,000  13,871  3.18  12/2/2022
Total $ 685,000  $ 298,303  —  — 

December 31, 2021
Lender Borrowing Capacity Outstanding Borrowings Weighted-Average Interest Rate on Outstanding Borrowings
Western Alliance Bank $ 50,000  $ 17,089  3.00  %
Texas Capital Bank, N.A. 40,000  11,852  3.01 
Flagstar Bank, FSB
25,000  4,102  3.00 
Total $ 115,000  $ 33,043  — 
The following table summarizes borrowings under this facility as of the periods presented:
June 30, 2022 December 31, 2021
Lender Borrowing Capacity Outstanding Borrowings Weighted-Average Interest Rate on Outstanding Borrowings Borrowing Capacity Outstanding Borrowings Weighted-Average Interest Rate on Outstanding Borrowings
Goldman Sachs Bank USA $ 400,000  $ 156,540  4.55  % $ 200,000  $ 199,781  3.30  %
Marketable Securities
The cost or amortized cost, gross unrealized gains and losses, and estimated fair market value of our cash, money market funds, restricted cash, available-for-sale investments, and equity securities were as follows:

June 30, 2022
Cost or Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash, Cash Equivalents, and Restricted Cash Short-term Investments Long-term Investments
Cash $ 69,853  $ —  $ —  $ 69,853  $ 69,853  $ —  $ — 
Money markets funds 302,480  —  —  302,480  302,480  —  — 
Restricted cash 28,279  —  —  28,279  28,279  —  — 
U.S. treasury securities 124,973  30  (1,000) 124,003  —  71,014  52,989 
Agency bonds 19,087  (7) 19,081  7,589  11,492  — 
Total $ 544,672  $ 31  $ (1,007) $ 543,696  $ 408,201  $ 82,506  $ 52,989 
December 31, 2021
Cost or Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Cash, Cash Equivalents, and Restricted Cash Short-term Investments Long-term Investments
Cash $ 81,032  $ —  $ —  $ 81,032  $ 81,032  $ —  $ — 
Money markets funds 509,971  —  —  509,971  509,971  —  — 
Restricted cash 127,278  —  —  127,278  127,278  —  — 
U.S. treasury securities 71,749  (204) 71,546  —  16,718  54,828 
Agency bonds 11,900  —  11,906  —  11,906  — 
Equity securities 500  4,613  —  5,113  —  5,113  — 
Total $ 802,430  $ 4,620  $ (204) $ 806,846  $ 718,281  $ 33,737  $ 54,828