Home Lending
Through our Home Lending segment, we serve our customers by originating and
servicing U.S. residential mortgage loans. We originate primarily conventional,
Federal Housing Administration, or FHA, and Veterans Administration, or VA,
mortgage loans. We transfer mortgage loans into pools of Government National
Mortgage Association, or Ginnie Mae, and Federal National Mortgage Association,
or Fannie Mae, mortgage backed securities, or MBSs, and sell whole mortgage
loans to third party investors in the secondary market. Our principal revenue
channels include: (i) gains on the sale of mortgage loans from loan securitizations
and whole loan sales; (ii) fee income from mortgage originations; (iii) service
income from loan servicing and (iv) interest income on mortgage loans held for
sale. We currently offer the following mortgage loan products:
Prime Conforming Mortgage Loans. Prime conforming mortgage loans are prime
credit quality first-lien mortgage loans secured by a residential property that
meet or “conform” to the underwriting standards established by Fannie
Mae for inclusion in their guaranteed mortgage securities programs.
Prime Non-conforming Mortgage Loans. Prime non-conforming mortgage loans are
prime credit quality first-lien mortgage loans secured by residential property
that do not conform to the underwriting standards established by Fannie Mae,
because they have original principal amounts exceeding Fannie Mae limits.
Government Mortgage Loans. Government mortgage loans are first-lien mortgage
loans secured by owner occupied residences that are insured by the FHA or U.S.
Department of Agriculture, or USDA, or guaranteed by the VA and securitized
into Ginnie Mae securities.
Our Home Lending segment operates through our wholly-owned subsidiary, J.G.
Wentworth Home Lending, LLC (formerly known as WestStar Mortgage, Inc.), or
All of Home Lending’s underwriting, closing, funding, and corporate functions
are managed centrally at its headquarters in Woodbridge, Virginia. However,
we rely on sales and sales support staff (including loan officers, processors,
and administrative staff) located throughout the country.
Personal Lending
Personal loans are unsecured loans, for which borrowers do not have to provide
collateral. We have created a personal lending marketplace where consumers seeking
personal loans can access specialty finance providers, alternative lending platforms
and other lenders or intermediaries online or on the phone. We refer to these
various types of lenders as our marketplace lenders. We do not charge consumers
for the use of our marketplace services; revenue is generated from upfront match
fees paid on delivery of a lead and the closing of the loan.
Prepaid Cards
A prepaid card is a card that can be used to access money that has been paid
to the card account in advance. There are a number of different types of prepaid
cards. We have launched a General Purpose Reloadable, or GPR card and a Consumer
Incentive card. In each case, we act as a program manager and distributor of
the card and have chosen to partner with third-party service providers to serve
as the card-issuer, card-processor and as our network partner. A GPR card can
be reloaded by a consumer to add more money after the funds originally loaded
to the card account have been exhausted. We have branded our proprietary, bank-issued
GPR card as The J.G. Wentworth Cash Now™ Visa® Card. GPR cards have
features similar to a typical bank checking account, including fee-free direct
deposit, in-store and on-line purchasing capability wherever a credit card is
accepted, bill payment and ATM cash access. Fees are charged to consumers for
monthly account maintenance and other transactions, some of which are waived
if certain conditions are met. We also sell customizable GPR cards to third
party businesses.