Mr. Cooper Group Inc. reported Q3 2024 income before income tax expense of $112 million and a net income of $80 million, down from a strong second-quarter net income of $204 million.
Excluding other mark-to-market and other adjustments, the company reported pretax operating income of $246 million. Adjustments included other mark-to-market net of hedges of $126 million.
Chairman and CEO Jay Bray commented, “We delivered an exceptional quarter, marked by an operating ROTCE (return on average tangible common equity) of 16.8%, and record liquidity. We are excited to welcome our new team members, with the acquisition of Flagstar’s mortgage operations on target to close, as announced, in the fourth quarter.”
Mike Weinbach, president of Mr. Cooper, added, “I’m extremely pleased with our strong performance in servicing and exceptional execution in originations, where volumes increased 80% quarter-over-quarter, as our direct-to-consumer channel helped customers take advantage of the rally in mortgage rates during September, while our correspondent channel implemented a number of new initiatives which were well-received by clients.”
Mr. Cooper’s entire servicing portfolio, including MSR UPB and sub servicing UPB, ended the third quarter at $1.239 billion, equating to $1.24 trillion. That figure was up from the second quarter's totaled $1.206 billion ($1.2 trillion).
Servicing generated a pre-tax income of $177 million, including other mark-to-market losses of $126 million, and a pretax operating income of $305 million.
At quarter end, Mr. Cooper's "carrying value" of the MSR was over $10 billion, which the company says is equivalent to 148 bps of MSR UPB.
On the origination side, the company earned pretax income and pretax operating income of $69 million, up over 81% from the Q2 2024's posted $38 million. The company's originations segment "creates servicing assets at attractive margins by acquiring loans through the correspondent channel and refinancing existing loans through the direct-to-consumer channel."
Mr. Cooper funded 25,582 loans in the third quarter, totaling approximately $6.8 billion UPB, which was comprised of $2.3 billion in direct-to-consumer and $4.5 billion in correspondent.
Funded volume increased 80% quarter-over-quarter, while pull through adjusted volume increased 67% quarter-over-quarter to $7.5 billion.
