Despite challenges such as a cyberattack in October 2023, which exposed the data of millions of clients, Mr. Cooper Group's servicing and origination businesses remained profitable in the fourth quarter.
The Dallas-based mortgage company is expected to reach $1.1 trillion of unpaid principal balance (UPB) in mortgage servicing rights (MSR) by the end of March, a target announced in July 2021 when the portfolio was at $650 billion.
With changes in leadership, including Mike Weinbach's appointment as president, the company remains focused on growth and maintaining liquidity, with $2.4 billion in liquidity and $571 million in unrestricted cash in Q4.
It reported a net income of $46 million. That's down from its third-quarter when it delivered net income of $275 million and the company's funded volume reached $3.3 billion, with a servicing portfolio of $937 billion in unpaid principal balance.
The earnings in Q4 2023 included, among other things, mark-to-market net hedges of $41 million and $27 million related to a cyberattack it suffered in October. The company had the data of nearly 15 million current and former clients exposed in the cyberattack, which has resulted in more than a handful of lawsuits.
Despite the cyber incident, the company kept its servicing and origination businesses profitable. With 4.6 million customers, the servicing division brought in $229 million in pretax operating income in Q4, compared to $301 million in Q3.
On the origination side it earned pretax income of $9 million and pretax operating income of $10 million. The company funded 10,699 loans in the fourth quarter, totaling approximately $2.7 billion UPB, which was comprised of $1.2 billion in direct-to-consumer and $1.5 billion in correspondent. Funded volume decreased 22% quarter-over-quarter, while pull through adjusted volume decreased 22% quarter-over-quarter to $2.6 billion.
On the servicing side it recorded pretax income of $184 million, including other mark-to-market of $41 million. The servicing portfolio ended the quarter at $992 billion, up 14% over the year.
"We grew the portfolio at a double-digit pace during the year, while at the same time cutting costs company-wide by 8%," Chairman and CEO Jay Bray told analysts during an earnings call. "These results showcase our highly efficient digital platform, the benefits of incremental scale, and our agile management of originations capacity."
