Company: RITM-PC
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0001556593-25-000024
Chunk: 15

Company: Rithm Capital Corp.
Filing Date: 2025-08-01
Form: 10-Q
Item: Item 2
Chunk 15
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 principal and interest advances. The servicing agreements with Fannie Mae, Ginnie Mae and certain private-label securitizations generally have a “waterfall” payment structure that allows servicers to apply balances received from prepayments to cover principal and interest advance requirements. The ability to apply balances received against prepayments stems from a difference caused by the timing between the remittance of payments under the servicer’s advance and remittance obligations, generally several weeks after the due date, and servicer’s timeline to remit prepayments, which can be up to a month or more after receipt from the borrower. Because of this timing difference, servicers can effectively “borrow” against the prepayments received to cover principal and interest advance requirements. In many cases, if the servicer determines that an advance previously made would not be recoverable from these sources, or if such advance is not recovered when the loan is repaid or related property is liquidated, then the servicer is, most often, entitled to withdraw funds from the trustee custodial account for payments on the serviced residential mortgage loans to reimburse the applicable advance. This is what is often referred to as a “general collections backstop.” See Note 5 to our consolidated financial statements for additional information related to servicer advances receivable.

We fund advances primarily from a combination of cash on hand, loan prepayments and secured financing arrangements. We finance our servicer advances with short- and medium-term collateralized borrowings. These borrowings are non-recourse committed facilities that are not subject to margin calls and bear either fixed or variable interest rates offered by the counterparty for the term of the notes, generally less than one year, of a specified margin over SOFR. See Note 18 to our consolidated financial statements for further information regarding financing of our servicer advances.

The table below summarizes our MSRs and MSR financing receivables as of June 30, 2025:

(dollars in billions)Current UPBWeighted Average MSR (bps)Carrying ValueGSE(A)$380.9 29 $6.3 Non-Agency(A)68.5 44 0.8 Ginnie Mae143.3 47 3.3 Total / Weighted Average$592.7 36 $10.4 

(A)Includes GSE and Non-Agency MSRs of $22.6 billion and $34.2 billion underlying UPB, respectively, serviced by third-party subservicers.

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The following tables summarize the collateral