MORTGAGE LOANS RECEIVABLE

9 Months Ended

Sep. 30, 2024

Genesis specializes in originating and managing a portfolio of primarily short-term mortgage loans to fund the construction and development of, or investment in, residential properties.

On August 24, 2023, Rithm Capital acquired a portfolio of loans from Morgan Stanley Bank, N.A. with a face value of $148.4 million. The portfolio consists of fixed-rate bridge and renovation loans and is master serviced by Genesis.

The following table summarizes mortgage loans receivable, at fair value and mortgage loans receivable held by consolidated CFEs by loan type as of September 30, 2024:


	Mortgage Loans Receivable - Carrying Value(A)		Mortgage Loans Receivable of Consolidated CFEs - Carrying Value(A)		Total Carrying Value		% of Portfolio		Loan Count	% of Portfolio		Weighted Average Yield		Weighted Average Original Life (Months)	Weighted Average Committed Loan Balance to Value(B)
Construction	$	795,156	$	471,941	$	1,267,097	42.5	%	528	33.8	%	11.3	%	19.8	72.2% / 62.3%
Bridge	817,113		343,117		1,160,230		43.7	%	538	34.4	%	10.1	%	26.1	67.4%
Renovation	257,583		101,848		359,431		13.8	%	498	31.8	%	10.5	%	12.9	82.0%/ 67.6%
	$	1,869,852	$	916,906	$	2,786,758	100.0	%	1,564	100.0	%	10.7	%	20.2	N/A

(A)Mortgage loans receivable are carried at fair value under the fair value option election. Mortgage loans of consolidated CFEs are classified as Level 3 and valued based on the more observable financial liabilities of consolidated CFEs. See Note 19 regarding fair value measurements.

(B)Weighted by commitment Loan-to-Value (“LTV”) for bridge loans, loan-to-cost and loan-to-after-repair-value for construction and renovation loans.

The following table summarizes the activity for the period of loans included in mortgage loans receivable, at fair value on the consolidated balance sheets:


Balance at December 31, 2023	$	1,879,319

Initial loan advances	1,356,540
Construction holdbacks and draws	630,381
Paydowns and payoffs	(1,146,754)
Purchased loans discount amortization	1,006
Transfer of loans to REO	(6,919)
Transfers from (to) assets of consolidated CFEs	(881,378)
Fair value adjustments due to:
Changes in instrument-specific credit risk	17,995
Other factors	19,662
Balance at September 30, 2024	$	1,869,852

The Company is subject to credit risk in connection with its investments in mortgage loans. The two primary components of credit risk are default risk, which is the risk that a borrower fails to make scheduled principal and interest payments, and severity risk, which is the risk of loss upon a borrower’s default on a mortgage loan or other secured or unsecured loan. Severity risk includes the risk of loss of value of the property or other asset, if any, securing the loan, as well as the risk of loss associated with taking over the property or other asset, if any, including foreclosure costs.

The following table summarizes the past due status and difference between the aggregate UPB and the aggregate carrying value of loans included in mortgage loans receivable, at fair value on the consolidated balance sheets:


	September 30, 2024						December 31, 2023
Days Past Due	UPB		Carrying Value		Carrying Value Over (Under) UPB		UPB		Carrying Value		Carrying Value Over (Under) UPB
Current	$	1,787,026	$	1,820,179	$	33,153	$	1,838,935	$	1,837,513	$	(1,422)
90+	54,233		49,673		(4,560)		41,869		41,806		(63)
Total	$	1,841,259	$	1,869,852	$	28,593	$	1,880,804	$	1,879,319	$	(1,485)

See Note 18 regarding the financing of mortgage loans receivable.