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MORTGAGE SERVICING RIGHTS AND MSR FINANCING RECEIVABLES (Tables) | 3 Months Ended
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Mar. 31, 2025
Transfers and Servicing [Abstract] |
Schedule of Activity Related to the Carrying Value of Investments in Excess MSRs | The following table summarizes activity related to MSRs and MSR financing receivables:
Balance at December 31, 2024 |  | $ | 10,321,671 |
Originations(A) |  | 348,988 |
Sales |  | 664 |
Change in Fair Value Due To: |  |
Realization of cash flows(B) |  | (148,042) |
Change in valuation inputs and assumptions |  | (390,240) |
Balance at March 31, 2025 |  | $ | 10,133,041 |
(A)Represents MSRs retained on the sale of originated residential mortgage loans. Includes $29.8 million of MSRs capitalized through co-issue with third-parties. (B)Based on the paydown of the underlying residential mortgage loans. The following table summarizes MSRs and MSR financing receivables by type as of March 31, 2025 and December 31, 2024:
| UPB of Underlying Mortgages |  | Weighted Average Life (Years)(A) |  | Carrying Value(B)
March 31, 2025 |  |  |  |  |
GSE | $ | 382,089,209 |  |  | 6.4 |  | $ | 6,195,239 |
Non-Agency | 69,089,498 |  |  | 5.4 |  | 830,163 |
Ginnie Mae(C) | 139,936,290 |  |  | 6.3 |  | 3,107,639 |
Total / Weighted Average | $ | 591,114,997 |  |  | 6.3 |  | $ | 10,133,041 |
December 31, 2024 |  |  |  |  |
GSE | $ | 383,014,320 |  |  | 6.5 |  | $ | 6,413,199 |
Non-Agency | 70,022,636 |  |  | 5.4 |  | 836,408 |
Ginnie Mae(C) | 137,177,395 |  |  | 6.4 |  | 3,072,064 |
Total / Weighted Average | $ | 590,214,351 |  |  | 6.4 |  | $ | 10,321,671 |
(A)Represents the weighted average expected timing of the receipt of expected cash flows for this investment. (B)Represents the fair value for this investment. As of March 31, 2025 and December 31, 2024, weighted average discount rates of 8.9% (range of 8.8% – 10.3%) and 8.9% (range of 8.7% - 10.3%), respectively, were used to value Rithm Capital’s MSRs and MSR financing receivables. (C)As of March 31, 2025 and December 31, 2024, Rithm Capital had approximately $2.4 billion and $2.7 billion, respectively, in residential mortgage loans subject to repurchase and the related residential mortgage loans repurchase liability on its consolidated balance sheets. The following table presents activity related to the consolidated investments in Excess MSRs measured at fair value:
Balance at December 31, 2024 |  | $ | 369,162 |
Interest income |  | 4,190 |
Proceeds from repayments |  | (17,514) |
Change in fair value |  | (915) |
Balance at March 31, 2025 |  | $ | 354,923 |
Fees Earned in Exchange for Servicing Financial Assets | The following table summarizes components of servicing revenue, net:
| Three Months Ended March 31, |  |  |  |
| 2025 |  | 2024 |  |  |  |  |  |
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables | $ | 526,810 |  |  | $ | 430,114 |  |  |  |  |  |  |
Ancillary and other fees | 43,991 |  |  | 39,777 |  |  |  |  |  |  |
Servicing fee revenue, net and fees | 570,801 |  |  | 469,891 |  |  |  |  |  |  |
Change in Fair Value Due To: |  |  |  |  |  |  |  |  |
Realization of cash flows(A) | (146,891) |  |  | (116,839) |  |  |  |  |  |  |
Change in valuation inputs and assumptions, net of realized gains (losses)(B) | (395,025) |  |  | 201,014 |  |  |  |  |  |  |
Servicing Revenue, Net | $ | 28,885 |  |  | $ | 554,066 |  |  |  |  |  |  |
(A)Net of $1.2 million of realization of cash flows related to excess spread financing for the three months ended March 31, 2025. There was no excess spread financing during the three months ended March 31, 2024 (Note 12). (B)Net of $(4.8) million of change in valuation inputs and assumptions related to excess spread financing for the three months ended March 31, 2025. There was no excess spread financing during the three months ended March 31, 2024 (Note 12).
Summary of the Geographic Distribution of the Underlying Residential Mortgage Loans of the Direct Investment in MSRs | The table below summarizes the geographic distribution of the residential mortgage loans underlying the MSRs and MSR financing receivables:
|  | Percentage of Total Outstanding Unpaid Principal Amount
State Concentration |  | March 31, 2025 |  | December 31, 2024
California |  | 16.4 | % |  | 16.5 | %
Florida |  | 8.2 | % |  | 8.2 | %
Texas |  | 6.6 | % |  | 6.6 | %
New York |  | 5.7 | % |  | 5.7 | %
Washington |  | 5.2 | % |  | 5.2 | %
New Jersey |  | 4.1 | % |  | 4.1 | %
Virginia |  | 3.7 | % |  | 3.7 | %
Maryland |  | 3.4 | % |  | 3.4 | %
Illinois |  | 3.3 | % |  | 3.3 | %
Georgia |  | 3.1 | % |  | 3.1 | %
Other U.S. |  | 40.3 | % |  | 40.2 | %
|  | 100.0 | % |  | 100.0 | %
Schedule of Investment in Servicer Advances | The table below summarizes the type of advances included in the servicer advances receivable:
|  | March 31, 2025 |  | December 31, 2024
Principal and interest advances |  | $ | 588,004 |  |  | $ | 640,723 |
Escrow advances (taxes and insurance advances) |  | 1,503,455 |  |  | 1,733,426 |
Foreclosure advances |  | 924,809 |  |  | 950,092 |
Gross advance balance(A)(B)(C) |  | 3,016,268 |  |  | 3,324,241 |
Reserves, impairment, unamortized discount, net of recovery accruals |  | (141,753) |  |  | (125,320) |
Total Servicer Advances Receivable |  | $ | 2,874,515 |  |  | $ | 3,198,921 |
(A)Includes $575.3 million and $673.7 million of servicer advances receivable related to GSE MSRs, respectively, recoverable either from the borrower or the Agencies. (B)Includes $465.2 million and $529.3 million of servicer advances receivable related to Ginnie Mae MSRs, respectively, recoverable from either the borrower or Ginnie Mae. Expected losses for advances associated with Ginnie Mae loans in the MSR portfolio are considered in the MSR fair valuation through a non-reimbursable advance loss assumption. (C)Expected losses for advances associated with loans in the MSR portfolio are considered in the MSR fair value through a non-reimbursable advance loss assumption. The following table summarizes servicer advance investments, including the right to the base fee component of the related MSRs:
| Amortized Cost Basis |  | Carrying Value(A) |  | Weighted Average Discount Rate |  | Weighted Average Yield |  | Weighted Average Life (Years)(B)
March 31, 2025 |  |  |  |  |  |  |  |  |
Servicer advance investments | $ | 311,049 |  |  | $ | 321,531 |  |  | 6.5 | % |  | 6.8 | % |  | 8.1
December 31, 2024 |  |  |  |  |  |  |  |  |
Servicer advance investments | $ | 327,471 |  |  | $ | 339,646 |  |  | 6.5 | % |  | 6.9 | % |  | 7.6
(A)Represents the fair value of the servicer advance investments, including the base fee component of the related MSRs. (B)Represents the weighted average expected timing of the receipt of expected net cash flows for this investment. The following table provides additional information regarding the servicer advance investments and related financing:
| UPB of Underlying Residential Mortgage Loans |  | Outstanding Servicer Advances |  | Servicer Advances to UPB of Underlying Residential Mortgage Loans |  | Face Amount of Secured Notes and Bonds Payable |  | LTV(A) |  | Cost of Funds(C)
Gross |  | Net(B) |  | Gross |  | Net
March 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicer advance investments(D) | $ | 12,955,658 |  |  | $ | 283,068 |  |  | 2.2 | % |  | $ | 246,438 |  |  | 84.4 | % |  | 82.5 | % |  | 6.2 | % |  | 5.8 | %
December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicer advance investments(D) | $ | 13,316,828 |  |  | $ | 298,945 |  |  | 2.2 | % |  | $ | 258,183 |  |  | 85.0 | % |  | 82.9 | % |  | 6.3 | % |  | 5.9 | %
(A)Based on outstanding servicer advances, excluding purchased but unsettled servicer advances. (B)Ratio of face amount of borrowings to par amount of servicer advance collateral, net of any general reserve. (C)Annualized measure of the cost associated with borrowings. Gross cost of funds primarily includes interest expense and facility fees. Net cost of funds excludes facility fees. (D)The following table summarizes the types of advances included in servicer advance investments:
| March 31, 2025 |  | December 31, 2024
Principal and interest advances | $ | 46,378 |  |  | $ | 51,135 |
Escrow advances (taxes and insurance advances) | 130,494 |  |  | 137,072 |
Foreclosure advances | 106,196 |  |  | 110,738 |
Total | $ | 283,068 |  |  | $ | 298,945 |
Schedule of Servicer Advances Reserve | The following table summarizes servicer advances provision activity during the period:
Balance at December 31, 2024 |  | $ | 121,396 |
Provision |  | 12,877 |
Write-offs |  | (5,482) |
Balance at March 31, 2025 |  | $ | 128,791 |

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- Definition Tabular disclosure of the activity in the balance of servicing assets (including a description of where changes in fair value are reported in the statement of income for each period for which results of operations are presented), including but not limited to, the following: beginning and ending balances, additions (for instance, through purchases of servicing assets), disposals, changes in fair value during the period resulting from changes in inputs or assumptions used in the valuation model, other changes in fair value along with a description of those changes, and other changes that affect the balance along with a description of those changes. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 860 -SubTopic 50 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481229/860-50-50-3 + Details
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