OTHER ASSETS AND LIABILITIES

9 Months Ended

Sep. 30, 2024

Other Income Assets And Liabilities [Abstract]

Other assets and accrued expenses and other liabilities — other assets and accrued expenses and other liabilities on the consolidated balance sheets consist of the following:


	Other Assets					Accrued Expenses and Other Liabilities
	September 30, 2024		December 31, 2023			September 30, 2024		December 31, 2023
CLOs, at fair value(A)	$	275,771	$	226,486	Accounts payable	$	180,054	$	165,144
Deferred tax asset(G)	—		279,019		Accrued compensation and benefits	191,737		290,464
Derivative and hedging assets (Note 17)	50,514		28,080		Deferred tax liability(G)	587,828		801,857
Due from related parties	30,370		32,319		Derivative liabilities (Note 17)	85,415		51,765
Equity investments(B)	466,813		173,882		Escheat payable	207,209		169,914
Excess MSRs, at fair value (Note 13)	375,923		271,150		Excess spread financing	107,524		—
Goodwill (Note 15)	131,857		131,857		Interest payable	206,395		166,620
Income and fees receivable	33,390		59,134		Lease liability (Note 16)	170,709		159,236
Intangible assets (Note 15)	342,052		387,920		Notes receivable financing(F)	367,373		—
Loans receivable, at fair value(C)	29,114		31,323		Unearned income and fees	21,755		37,468
Margin receivable, net(D)	121,020		75,947		Other liabilities	231,517		223,293
Non-Agency RMBS, at fair value(A)	579,717		577,543			$	2,357,516	$	2,065,761
Notes receivable, at fair value(E)	384,126		398,227
Operating lease right-of-use assets (Note 16)	103,870		104,207
Other receivables	154,862		152,046
Prepaid expenses	65,381		62,513
Principal and interest receivable	177,611		168,516
Property and equipment	68,134		40,038
REO	24,732		15,507
Servicer advance investments, at fair value (Note 14)	341,303		376,881
Servicing fee receivables	195,163		156,777
Warrants, at fair value	10,092		16,599
Other assets	200,698		182,881
	$	4,162,513	$	3,948,852

(A)Non-Agency RMBS and CLOs were reclassified from real estate and other securities, as presented in prior periods, to other assets on the consolidated balance sheets as of June 30, 2024.

(B)Represents equity investments in (i) commercial redevelopment projects, (ii) operating companies providing services throughout the real estate industry, including investments in Covius Holding Inc., a provider of various technology-enabled services to the mortgage and real estate sectors, preferred stock of Valon, a residential mortgage servicing and technology company, and preferred stock of Covalto Ltd. (formerly known as Credijusto Ltd.), a financial services company, (iii) funds managed by Sculptor, (iv) credit risk transfer LLC that holds exposure in warehouse lines collateralized by residential mortgage loans, measured at fair value under the fair value option election with changes in fair value presented in other income and (v) Great Ajax.

(C)Represents loans made pursuant to a senior credit agreement and a senior subordinated credit agreement to an entity affiliated with funds managed by an affiliate of the Former Manager. The loans are measured at fair value under the fair value option.

(D)Represents collateral posted as a result of changes in fair value of Rithm Capital’s (i) government and government-backed securities securing its secured financing agreements and (ii) derivative instruments.

(E)Represents notes receivable secured by commercial properties. The notes are measured at fair value under the fair value option.

(F)During the second quarter of 2024, the Company transferred an investment in a note receivable with a fair value of $365.0 million, subject to a repo financing of $323.5 million, from a third party to a nonconsolidated joint venture for cash consideration of $48.0 million. The transaction did not meet sale accounting under ASC 860 and, as a result, was treated as a secured borrowing for accounting purposes for which the Company elected the fair value option and is included in accrued expenses and other liabilities in the consolidated balance sheets. The amount presented within notes receivable financing is comprised of the repo financing and the non-recourse liability in a secured borrowing. The Company continues to reflect the transferred note in other assets in the consolidated balance sheets, at fair value.

(G)Effective in the third quarter of 2024, Rithm Capital’s taxable subsidiaries file combined federal and state returns and as a result, present deferred tax liability or asset on a net basis on its consolidated balance sheets.

REO — REO assets are individual properties acquired by Rithm Capital or where Rithm Capital receives the property as a result of foreclosure of the underlying loan. Rithm Capital measures REO assets at the lower of cost or fair value, with valuation provision recorded in other income (loss), net in the consolidated statements of operations. REO assets are managed for prompt sale and disposition.

The following table presents activity for the period related to the carrying value of investments in REO:


Balance at December 31, 2023	$	15,507
Purchases	12,919
Property received in satisfaction of loan	21,695
Sales(A)	(24,317)

Valuation (provision) reversal	(1,072)
Balance at September 30, 2024	$	24,732

(A)Recognized when control of the property has transferred to the buyer.

As of September 30, 2024, Rithm Capital had residential mortgage loans and mortgage loans receivable that were in the process of foreclosure with UPBs of $45.1 million and $37.4 million, respectively.

Notes and Loans Receivable — The following table summarizes the activity for the period for notes and loans receivable:


	Total
Balance at December 31, 2023	$	429,550
Fundings	17,500
Payment in kind	2,211
Proceeds from repayments	(37,670)
Fair value adjustments due to:
Changes in instrument-specific credit risk	—
Other factors	1,649
Balance at September 30, 2024	$	413,240

The following table summarizes the past due status and difference between the aggregate UPB and the aggregate carrying value of notes and loans receivable:


	September 30, 2024						December 31, 2023
Days Past Due	UPB		Carrying Value(A)		Carrying Value Over (Under) UPB		UPB		Carrying Value(A)		Carrying Value Over (Under) UPB
Current	$	481,740	$	384,126	$	(97,614)	$	565,786	$	429,550	$	(136,236)
90+	29,114		29,114		—		—		—		—
Total	$	510,854	$	413,240	$	(97,614)	$	565,786	$	429,550	$	(136,236)

(A)Notes and loans receivable are carried at fair value. See Note 19 regarding fair value measurements.