Company: JLL
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001037976-25-000006
Chunk: 156

Company: JONES LANG LASALLE INC
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 156
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 the interest rate risk inherent in providing IRLCs to borrowers, we simultaneously enter into a forward commitment to sell the eventual loan associated with the IRLC to a GSE or other investor. Similar to the IRLC, the forward sale commitment locks in an interest rate, maximum principal balance, and price for the sale of the loan. Ultimately, the terms of the forward sale commitment and the IRLC are matched in substantially all respects, with the objective of eliminating market interest rate and other balance sheet risk to the extent practical. As an additional element of protection, forward sale commitments extend for a longer period of time as compared to IRLCs to allow, among other things, for the closing of the loan and processing of paperwork to deliver the loan in accordance with the terms of the sale commitment.The fair value of our IRLCs to prospective borrowers and the related inputs primarily include, as applicable, the expected net cash flows associated with servicing the loan and the effects of interest rate movements between the date of the IRLC and the balance sheet date based on applicable published U.S. Treasury rates.The fair value of our forward sales contracts to prospective investors considers the market price movement of a similar security between the trade date and the balance sheet date. The market price changes are multiplied by the notional amount of the forward sales contracts to measure the fair value.Both the rate lock commitments to prospective borrowers and the forward sale contracts to prospective investors are undesignated derivatives and considered Level 3 valuations due to significant unobservable inputs related to nonperformance risk. An increase in nonperformance risk assumptions would result in a lower fair value measurement. The fair valuation is determined using discounted cash flow techniques, and the derivatives are marked to fair value through Revenue in the Consolidated Statements on Comprehensive Income.The tables below present a reconciliation for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3).(in millions)Balance as of December 31, 2023Net change in fair valueForeign CTA(1)Purchases / AdditionsSettlementsTransfers in (out)(2)Balance as of December 31, 2024Investments$367.3 (53.9)(0.6)5.2 — 12.3 $330.3 Mortgage banking derivative assets and liabilities, net10.3 126.4 — 126.6 (169.5)— 93.8 Earn-out liabilities57.5 (32.5