Newrez Reports Profit Growth on Higher Servicing Income, Raises Origination Outlook

Newrez Reports Profit Growth on Higher Servicing Income, Raises Origination Outlook

Rithm Capital Corp. has revealed that its lending subsidiary, Newrez, generated higher profits during the second quarter of 2026. The improved performance was driven by gains in mortgage servicing and an increase in loan origination volumes compared to the first quarter.

Speaking to analysts on Tuesday, executives at the parent company projected that Newrez will originate approximately $65 billion in mortgages throughout 2026. This forecast represents an increase from the $63.4 billion originated in the previous year.

According to filings with the Securities and Exchange Commission, Newrez recorded a pretax operating income of $307.6 million for the quarter. This is an increase from the $273.7 million reported in the first quarter of 2026. The reported figures exclude a $194.5 million mark-to-market loss on mortgage servicing rights (MSRs) along with hedge impacts.

The lender originated $15.9 billion in mortgages during the second quarter. This volume reflects a 3% increase from the prior quarter, though it is a 2% decrease year over year. The company’s gain-on-sale margin improved to 1.64%, up from 1.44% in the first quarter. Baron Silverstein, president of Newrez, attributed the results to disciplined origination strategies and higher servicing fees, which helped offset interest rate volatility.

Silverstein noted that the company focused on nonagency loans through its wholesale channel and customer retention via consumer-direct channels. These two channels now account for 40% of total originations, an 11% increase from the previous quarter. As part of its channel strategy adjustments, Newrez transferred its distributed retail operations to Synergy One Lending in July.

On the servicing side, the company ended the quarter with an unpaid principal balance of $865 billion, including $268 billion in third-party servicing. This segment reported pretax income of $254.6 million, up from $203.6 million in the first quarter. Additionally, co-issue MSR acquisitions totaled $5 billion, a 45% quarterly increase.

For the broader entity, Rithm Capital reported a net income of $67.9 million for the second quarter, down from $109.4 million in the prior quarter. Chairman and CEO Michael Nierenberg commented that the current market environment, characterized by the likelihood of higher interest rates persisting, benefits the company’s sizable MSR portfolio.

What to watch

• Progress toward the $65 billion full-year origination target.
• Integration milestones for Valon and HomeVision and their impact on cost-per-loan metrics.
• Continued growth of MSR acquisitions and the unpaid principal balance.

Source: original release