Company: BLNE
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024044
Chunk: 63

Company: Beeline Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 63
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 recognized based upon the difference between the sales proceeds and carrying
value of the related loans upon sale and are recorded in gain on sale of loans, net on the consolidated statements of operations. Sales
proceeds reflect the cash received from investors through the sale of the loan and servicing release premium. Gain on sale of loans,
net also includes the unrealized gains and losses associated with the changes in the fair value of mortgage loans held for sale, and
the realized and unrealized gains and losses from derivative instruments.

41

Mortgage
loans held for sale are considered sold when the Company surrenders control over the financial assets. Control is considered to have
been surrendered when the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors;
the purchaser obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the
transferred assets; and the Company does not maintain effective control over the transferred assets through either an agreement that
both entitles and obligates the Company to repurchase or redeem the transferred assets before their maturity or the ability to unilaterally
cause the holder to return specific financial assets. The Company typically considers the above criteria to have been met upon acceptance
and receipt of sales proceeds from the purchaser.

Mortgage
loans sold to investors by the Company, and which met investor underwriting guidelines at the time of sale, may be subject to repurchase
in the event of specific default by the borrower or subsequent discovery that underwriting standards were not met. The Company may, upon
mutual agreement, indemnify the investor against future losses on such loans. Additionally, reserves are established for estimated liabilities
from the need to repay, where applicable, a portion of the premium received from investors on the sale of certain mortgage loans if such
loans are repaid in their entirety within a specified period after the sale of the loans. The Company has established a reserve for potential
losses related to these representations and warranties. In assessing the adequacy of the reserve, management evaluates various factors,
including actual write-offs during the period, historical loss experience, known delinquent and other problem loans, and economic trends
and conditions in the industry. Actual losses incurred are reflected as write-offs against the loan indemnification reserve.

Since
mortgage loans held for sale have maturity dates greater than one year from the balance sheet date but are expected to be sold in a short
time frame (less than one year), they are recorded