Annual report pursuant to Section 13 and 15(d)

Variable Interest Entities

v3.22.4
Variable Interest Entities
12 Months Ended
Dec. 31, 2022
Variable Interest Entities [Abstract]  
Variable Interest Entities Variable Interest EntitiesThe trusts that were formed for the purpose of financing MSR through securitization and servicing advances through revolving credit facilities (see discussion in Note 2 - Basis of Presentation and Significant Accounting Policies) are considered VIEs for financial reporting purposes and were reviewed for consolidation under the applicable consolidation guidance. As the Company has both the power to direct the activities of the trusts that most significantly impact the entities’ performance, and the obligation to absorb losses or the right to receive benefits of the entities that could be significant, the Company is the primary beneficiary and, thus, consolidates the trusts. Additionally, in accordance with arrangements entered into in connection with the securitization transaction and the servicing advance revolving credit facility, the Company has direct financial obligations payable to both MSR Issuer Trust and Servicing Advance Receivables Issuer Trust, which, in turn, support MSR Issuer Trust’s obligations to noteholders under the securitization transaction and Servicing Advance Receivables Issuer Trust’s obligations to the financing counterparty.
The following table presents a summary of the assets and liabilities of all consolidated trusts as reported on the consolidated balance sheets as of December 31, 2022 and December 31, 2021:
(in thousands) December 31,
2022
December 31,
2021
Note receivable (1)
$ 398,011  $ 396,776 
Restricted cash 31,691  23,892 
Accrued interest receivable (1)
400  161 
Other assets 67,819  33,767 
Total Assets $ 497,921  $ 454,596 
Term notes payable $ 398,011  $ 396,776 
Revolving credit facilities 23,850  19,200 
Accrued interest payable 560  216 
Other liabilities 31,531  23,838 
Total Liabilities $ 453,952  $ 440,030 
____________________
(1)Receivables due from a wholly owned subsidiary of the Company to the trusts are eliminated in consolidation in accordance with U.S. GAAP.

As discussed in Note 2 - Basis of Presentation and Significant Accounting Policies, RoundPoint is also considered a VIE for financial reporting purposes and was reviewed for consolidation under the applicable consolidation guidance. As the Company has the obligation to absorb losses and the right to receive benefits of RoundPoint during the Interim Period that could be significant, but not the power to direct the activities of RoundPoint that most significantly impacts its performance, the Company is not the primary beneficiary and, thus, does not consolidate RoundPoint.