Company: RITM-PC
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001556593-25-000016
Chunk: 18

Company: Rithm Capital Corp.
Filing Date: 2025-05-02
Form: 10-Q
Item: Item 8
Chunk 18
---
 therefore could have a meaningful, negative impact on the MSRs.

19

RITHM CAPITAL CORP. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)(dollars in tables in thousands, except share and per share data)

Residential Mortgage Loan Servicing and SubservicingNewrez performs servicing of residential mortgage loans for unaffiliated parties under servicing agreements. The servicing agreements do not meet the criteria to be recognized as a servicing right asset and, therefore, are not recognized in the consolidated balance sheets. The UPB of residential mortgage loans serviced for others as of March 31, 2025 and December 31, 2024 was $244.2 billion and $242.9 billion, respectively. Rithm Capital earned servicing revenue of $76.0 million and $38.1 million for the three months ended March 31, 2025 and 2024, respectively, related to unaffiliated serviced loans presented within servicing revenue, net in the consolidated statements of operations.In relation to certain owned MSRs, Rithm Capital engages unaffiliated licensed mortgage servicers as subservicers to perform the operational servicing duties, including recapture activities, in exchange for a subservicing fee, which is recognized as subservicing expense and presented as part of general and administrative in the consolidated statements of operations. As of March 31, 2025, PHH and Valon Mortgage, Inc. subserviced 6.0% and 3.9% of owned MSRs, respectively, with the remaining 90.1% of owned MSRs serviced by Newrez (Note 1).Servicer Advances ReceivableIn connection with Rithm Capital’s ownership of MSRs, the Company assumes the obligation to serve as a liquidity provider to initially fund servicer advances on the underlying pool of mortgages it services (Note 25). These servicer advances are recorded when advanced and are included in servicer advances receivable on the consolidated balance sheets.The table below summarizes the type of advances included in the servicer advances receivable:March 31, 2025December 31, 2024Principal and interest advances$588,004 $640,723 Escrow advances (taxes and insurance advances)1,503,455 1,733,426 Foreclosure advances924,809 950,092 Gross advance balance(A)(B)(C)3,016,268 3,324,241