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VARIABLE INTEREST ENTITIES (Tables)

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Carrying Value and Classification of the Assets and Liabilities of Consolidated VIEs and Non-Consolidated VIEs

The table below presents the carrying value and classification of the assets and liabilities of consolidated VIEs on the consolidated balance sheets:

						Advance Purchaser			Newrez Joint Ventures			Residential Mortgage Loans			Consumer Loan Companies			Sculptor Loan Financing Partners			Commercial Investments			Consolidated CFEs(A)									Total
																								Loan Securitizations - Mortgage Loans Receivable			Loan Securitizations - Residential Mortgage Loans			Consolidated Funds
September 30, 2024
Assets:
Servicer advance investments, at fair value						$	341,304		$	—		$	—		—			$	—		$	—		$	—		$	—		$	—		$	341,304
Residential mortgage loans, HFS, at fair value						—			—			378,707			—			—			—			—			—			—			378,707
Consumer loans						—			—			—			231,039			—			—			—			—			—			231,039
Assets of consolidated CFEs - investments						—			—			—			—			—			—			916,906			2,956,663			350,623			4,224,192
Cash and cash equivalents						5,153			21,762			—			—			4			492			—			—			—			27,411
Restricted cash						7,610			—			5,864			6,098			—			—			14,104			28,101			15,135			76,912
Other assets						1,929			456			—			11,332			64,939			45,973			33,457			—			428			158,514
Total Assets						$	355,996		$	22,218		$	384,571		$	248,469		$	64,943		$	46,465		$	964,467		$	2,984,764		$	366,186		$	5,438,079
Liabilities:
Secured financing agreements						—			—			295,790			—			—			—			—			—			—			295,790
Secured notes and bonds payable						259,451			—			—			197,234			—			—			—			—			—			456,685
Notes payable of consolidated CFEs						—			—			—			—			—			—			862,380			2,520,164			217,259			3,599,803
Accrued expenses and other liabilities						3,994			3,258			—			44			288			1,251			1,029			28,435			8,191			46,490
Total Liabilities						$	263,445		$	3,258		$	295,790		$	197,278		$	288		$	1,251		$	863,409		$	2,548,599		$	225,450		$	4,398,768
December 31, 2023
Assets:
Servicer advance investments, at fair value						$	367,803		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	367,803
Residential mortgage loans, HFS, at fair value						—			—			1,112,097			—			—			—			—			—			—			1,112,097
Consumer loans						—			—			—			285,632			—			—			—			—			—			285,632
Assets of consolidated CFEs - investments						—			—			—			—			—			—			353,594			3,038,587			321,856			3,714,037
Cash and cash equivalents						5,381			18,159			—			—			—			—			—			—			8,213			31,753
Restricted cash						8,273			—			6,113			6,301			—			—			7,572			6,263			9,800			44,322
Other assets						9			688			—			4,325			—			—			4,532			—			1,060			10,614
Total Assets						$	381,466		$	18,847		$	1,118,210		$	296,258		$	—		$	—		$	365,698		$	3,044,850		$	340,929		$	5,566,258
Liabilities:
Secured financing agreements						—			—			996,845			—			—			—			—			—			—			996,845
Secured notes and bonds payable						274,404			—			—			235,770			—			—			—			—			—			510,174
Notes payable of consolidated CFEs						—			—			—			—			—			—			318,998			2,618,082			218,157			3,155,237
Accrued expenses and other liabilities						2,606			2,240			5,382			1,507			—			—			371			6,263			1,763			20,132
Total Liabilities						$	277,010		$	2,240		$	1,002,227		$	237,277		$	—		$	—		$	319,369		$	2,624,345		$	219,920		$	4,682,388

(A)Reflect assets of consolidated CFEs - investments, at fair value and other assets and liabilities of consolidated CFEs - notes payable, at fair value and other liabilities on the consolidated balance sheets.

The following table summarizes the carrying value of notes issued by unconsolidated VIEs and retained by the Company, which reflects the Company’s maximum exposure to loss, as well as the UPB of transferred loans. The retained notes are presented as Non-Agency RMBS, at fair value within other assets on the consolidated balance sheets:

						September 30, 2024						December 31, 2023
Residential mortgage loan UPB and other collateral						$	8,153,399					$	8,237,692
Weighted average delinquency(A)						5.0%						5.3%
Net credit losses						160,824						162,061
Face amount of debt held by third parties						7,531,381						7,596,408
Carrying value of bonds retained by Rithm Capital(B)(C)						$	545,172					$	543,447
Year to date cash flows received by Rithm Capital on these bonds						68,421						91,401

(A)Represents the percentage of the UPB that is 60+ days delinquent.

(B)Includes real estate bonds retained pursuant to required risk retention regulations.

(C)Classified within Level 3 of the fair value hierarchy as the valuation is based on certain unobservable inputs including discount rate, prepayment rates and loss severity. See Note 19 for details on unobservable inputs.

The following table summarizes the Company’s involvement, through Sculptor, with VIEs that are not consolidated and is generally limited to providing asset management services and, in certain cases, investments in the VIEs. The maximum exposure to loss represents the potential loss of current investments or income and fees receivables from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses, as well as unfunded commitments to certain funds that are VIEs. The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support to its VIEs that are not consolidated beyond its share of capital and other commitments described in Note 25.

						September 30, 2024						December 31, 2023
Maximum Risk of Loss as a Result of the Company’s Involvement with Unconsolidated VIEs:
Unearned income and fees						$	21,755					$	37,468
Income and fees receivable						14,902						43,250
Investments						553,638						533,026
Unfunded commitments(A)						202,255						207,575
Other commitments						25,057						—
Maximum Exposure to Loss						$	817,607					$	821,319

(A)Includes commitments from certain current and former employees and executive managing directors in the amounts of $122.2 million and $97.5 million as of September 30, 2024 and December 31, 2023, respectively.

The following table summarizes the carrying value of the Company’s unconsolidated commercial real estate projects which reflects the Company’s maximum exposure to loss. See Note 25 regarding certain guarantees provided in connection with the investments. These investments are presented as part of equity investments within other assets on the consolidated balance sheets:

						September 30, 2024						December 31, 2023
Carrying value of commercial real estate held within unconsolidated VIEs						$	167,487					$	66,652
Carrying value of Rithm Capital’s investments in unconsolidated commercial real estate VIEs						49,289						29,210

This equity investment is presented within other assets on the consolidated balance sheets:

						September 30, 2024						December 31, 2023
Membership interest in unconsolidated VIEs						$	194,450					$	—

Schedule of Others’ Interests in the Equity of Consolidated Subsidiaries and Others’ Interests in the Net Income (Loss)

Others’ interests in the equity of consolidated subsidiaries is computed as follows:

			September 30, 2024																		December 31, 2023
			Total Consolidated Equity						Others' Ownership Interest						Noncontrolling Interest in Equity of Consolidated Subsidiaries						Total Consolidated Equity						Others' Ownership Interest						Noncontrolling Interest in Equity of Consolidated Subsidiaries
Advance Purchaser			$	92,551					10.7		%				$	9,896					$	104,458					10.7		%				$	11,157
Newrez Joint Ventures			18,960						49.5		%				9,385						16,607						49.5		%				8,220
Consumer Loan Companies(A)			51,191						—		%				—						72,361						46.5		%				33,748
Excess MSRs			139,519						20.0		%				27,904						—						—		%				—
Commercial Investments			45,214						10.0		%				4,521						—						—		%				—
Asset Management			760,373						n/m(B)						43,161						673,523						n/m(B)						40,971

Others’ interests in the net income (loss) is computed as follows:

			Three Months Ended September 30,
			2024																		2023
			Net Income (Loss)						Others’ Ownership Interest as a Percent of Total						Noncontrolling Interest in Income (Loss) of Consolidated Subsidiaries						Net Income (Loss)						Others’ Ownership Interest as a Percent of Total						Noncontrolling Interest in Income (Loss) of Consolidated Subsidiaries
Advance Purchaser			$	(9,584)					10.7		%				$	(1,026)					$	13,229					10.7		%				$	1,414
Newrez Joint Ventures			1,712						49.5		%				847						544						49.5		%				269
Consumer Loan Companies(A)			2,991						—		%				—						6,806						46.5		%				3,165
Excess MSRs			(547)						20.0		%				(109)						—						—		%				—
Commercial Investments			120						10.0		%				12						—						—		%				—
Asset Management			(2,538)						n/m(B)						2,115						—						—		%				—

			Nine Months Ended September 30,
			2024																		2023
			Net Income (Loss)						Others’ Ownership Interest as a Percent of Total						Noncontrolling Interest in Income (Loss) of Consolidated Subsidiaries						Net Income (Loss)						Others’ Ownership Interest as a Percent of Total						Noncontrolling Interest in Income (Loss) of Consolidated Subsidiaries
Advance Purchaser			$	(1,212)					10.7		%				$	(131)					$	19,786					10.7		%				$	2,113
Newrez Joint Ventures			3,874						49.5		%				1,918						1,238						49.5		%				613
Consumer Loan Companies(A)			(2,136)						46.5		%				(2,384)						16,582						46.5		%				7,711
Excess MSRs			22,635						20.0		%				4,527						—			0			—		%				—
Commercial Investments			120						10.0		%				12						—						—		%				—
Asset Management			(2,551)						n/m(B)						4,310						—						—		%				—

(A)On June 28, 2024, Rithm Capital purchased the remaining 46.5% interest in the Consumer Loan Companies from Blackstone for a total purchase price of $22.0 million. Following the acquisition, Rithm Capital owns 100% interest in the Consumer Loan Companies.

(B)Percentage in the table above deemed “n/m” are not meaningful. Noncontrolling interests related to Sculptor represents the ownership interests in certain funds held by entities or persons other than the Company. These interests substantially relate to interests held by Sculptor employees in real estate funds managed by the Company adjusted for their capital activity and allocated earnings in such funds. Such employees’ portion of carried interest is expensed and recorded within compensation and benefits expense on the consolidated statements of operations and therefore excluded in the calculation of noncontrolling interests.

X

- Definition

The tabular disclosure of the effects of any changes in a parent's ownership interest in a subsidiary on the equity attributable to the parent if the ownership interests in a subsidiary changes during the period. The changes represented by this element did not result in the deconsolidation of the subsidiary.

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- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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