Newrez LLC continues to cement its position as a top-tier, multichannel originator and servicer focused on both conventional and Non-QM lending, with its parent company Rithm Capital Corp. (NYSE: RITM) reporting robust second-quarter results Monday.
Newrez posted a pre-tax income of $275.1 million, excluding MSR mark-to-market and hedge effects — up 2% quarter-over-quarter and 20% year-over-year.
Fueled in part by its wholesale and correspondent channel expansion, Newrez originated $16.3 billion in mortgage loans during the quarter — a 38% increase over the prior quarter and a 12% gain year-over-year. Rithm executives highlighted a surge across Non-QM production, now forecasted to double from under $2 billion in 2024 to $4 billion in 2025.
“Our Non-QM business has grown dramatically over the course of the past quarter,” said Rithm Chairman, CEO, and President Michael Nierenberg. “What we've done there is we've opened up new origination channels both through correspondent and wholesale.”
Newrez President Baron Silverstein emphasized that the company is “now the fourth-largest originator” by funded volume and credited the results to “a disciplined focus on profitable growth” amid ongoing industry margin pressure.
The company’s 19% pre-tax return on equity underscores the profitability of its business model, the executives said this morning on an earnings call, which Silverstein said reflects “the power of our platform ... through our ability to drive consistent earnings with a results-first ethos and a focus on organic growth and partnerships.”
Back in 2023, Rithm announced a potential spinoff of its mortgage business, which includes Newrez — but executives said that for now, such a plan is not moving forward.
Third-Party Servicing Gains
Newrez’s servicing portfolio reached $864 billion in unpaid principal balance (UPB), up 7% quarter-over-quarter and 22% year-over-year, including $271 billion in third-party servicing. That growth was driven by adding 10 new clients and adding $61 billion in new servicing since the beginning of the year.
“Our special servicing platform is the best in the business, and we continue to gain market share,” Silverstein contended. “We offer a differentiated product strategy through our manufacturing capabilities and non-agency assets ... and support clients in maximizing the performance of their investments.”
The company also touts exceptionally strong client retention, claiming to retain 98% of the clients it services for, and keeps costs down with proprietary technology that brings fully loaded loan-level costs to $142 per loan.
“We continue to see opportunities to grow, whether through increasing wallet share with our existing clients or acquisition opportunities of bulk portfolios or operating platforms,” Silverstein said.
AI Drives Efficiency
AI has become a central pillar of Newrez’s operations, both in origination and servicing. Silverstein said their residential AI initiatives are now delivering “significant gains” in returns and experience, streamlining workflows, and improving predictive analytics. The effort is now being led by Brian Woodring, the former CTO at Rocket, who joined Newrez last quarter.
“Our technology enhancements and AI initiatives are continuing to drive our costs lower... We are starting to see significant gains from our AI investments,” said Silverstein.
Newrez views AI as a force multiplier, empowering employees and improving customer outcomes while also boosting efficiency and margin preservation.
Looking Ahead
While executives expect at least one or two rate cuts before year-end, they stressed that Newrez's diversified model — with growing Non-QM, home equity, and prime jumbo originations — positions it for sustainable growth regardless of rate movement or macroeconomic shifts.
“While a reduction in rates would benefit overall origination volumes, our momentum in connecting with our consumers on purchase transactions and home equity products is key to our balance and sustainable growth in any market,” Silverstein noted. “Our recapture strategy is now being driven by our new Chief Commercial Officer Leslie Gillin, previously chief marketing officer at JP Morgan, who joined us this month.”
Despite strong performance and robust ROEs, Rithm Capital continues to trade below book value (~$12.71/share) — a point Nierenberg emphasized during the call.
He also pointed to momentum in the broader Rithm platform, citing $1.2 billion in Q2 originations at transitional lender Genesis (up 49% year-over-year), and $1.7 billion in fundraising inflows at global asset manager Sculptor Capital, which now boasts $36 billion in assets under management.
