Company: RITM-PC
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0001556593-25-000007
Chunk: 44

Company: Rithm Capital Corp.
Filing Date: 2025-02-18
Form: 10-K
Item: Item 1A
Chunk 44
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 from dealing with any particular counterparty or from concentrating any or all of our transactions with a few counterparties. We have significant counterparty concentration risk in certain of our Servicing Partners, and we rely on our Servicing Partners to achieve our investment objective for certain investments and have no direct ability to influence their performance.

The value of certain of our investments is dependent on the satisfactory performance of servicing obligations by the related mortgage servicer or subservicer, as applicable. With respect to our Servicing Partners, we have significant counterparty risk. For example, as of December 31, 2024, 24% of our whole loan portfolio is serviced by Fay and 15% is serviced by ServBank.  In addition, a large portion of the loans underlying our Non-Agency RMBS are serviced by certain of our Servicing Partners, with 24% of our Company-issued Non-Agency RMBS being serviced by Mr. Cooper and 23% being serviced by Onity as of December 31, 2024. As a result, we could be materially and adversely affected if one of our Servicing Partners is unable to adequately carry out its duties as a result of:

•its failure to comply with applicable laws and regulations;

•its failure to comply with contractual and financing obligations and covenants;

•a downgrade in, or failure to maintain, any of its servicer ratings;

•its failure to maintain sufficient liquidity or access to sources of liquidity;

•its failure to perform its loss mitigation obligations;

•its failure to perform adequately in its external audits;

•a failure in or poor performance of its operational systems or infrastructure;

•regulatory or legal scrutiny or regulatory actions regarding any aspect of a servicer’s operations, including, but not limited to, servicing practices and foreclosure processes lengthening foreclosure timelines;

•an Agency’s or a whole-loan owner’s transfer of servicing to another party; or

•any other reason.

See “—The servicing of residential mortgage loans subjects certain of our subsidiaries and our Servicing Partners to various operational risks that could have a negative impact on our financial results.”

Moreover, we are party to repurchase agreements with a limited number of counterparties. If any of our counterparties elected not to renew our repurchase agreements, we may not be able to find a replacement counterparty, which would have a material adverse effect on our financial condition. 

Additionally, our funds enter into numerous types of financial arrangements with a wide array of counterparties around the world, including loans, swaps, rep