OTHER ASSETS AND LIABILITIES

3 Months Ended

Mar. 31, 2023

Other Income Assets And Liabilities [Abstract]

OTHER ASSETS AND LIABILITIES

OTHER ASSETS AND LIABILITIES

Other Assets and Accrued Expenses and Other Liabilities consist of the following:

	Other Assets					Accrued Expenses and Other Liabilities
	March 31, 2023		December 31, 2022			March 31, 2023		December 31, 2022
Margin receivable, net(A)	$	59,898	$	20,614	Margin payable	$	47	$	4,852
Excess MSRs, at fair value (Note 4)	299,303		321,803		Interest payable	110,334		87,700
Servicer advance investments, at fair value (Note 6)	389,905		398,820		Accounts payable	160,766		155,492
Servicing fee receivables	119,812		128,438		Derivative liabilities (Note 17)	46,954		18,064
Principal and interest receivable	100,541		106,608		Accrued compensation and benefits	78,965		112,762
Equity investments(B)	79,665		71,388		Operating lease liabilities (Note 16)	109,838		101,225
Other receivables	144,748		146,131		Deferred tax liability	695,033		711,855
REO	19,162		19,379		Other liabilities	305,298		294,717
Goodwill (Note 15)(C)	85,199		85,199			$	1,507,235	$	1,486,667
Warrants, at fair value	17,854		19,346
Property and equipment	30,501		37,883
Intangible assets (Note 15)	139,013		141,413
Prepaid expenses	59,306		60,817
Operating lease right-of-use assets (Note 16)	84,936		77,329
Derivative assets (Note 17)	43,904		52,229
Loans receivable, at fair value(D)	32,105		94,401
Other assets	130,981		132,809
	$	1,836,833	$	1,914,607

(A)Represents collateral posted as a result of changes in fair value of Rithm Capital’s (i) real estate securities securing its secured financing agreements and (ii) derivative instruments.

(B)Represents equity investments in (i) commercial redevelopment projects (ii) operating companies providing services throughout real estate industry, including Covius Holding Inc. (“Covius”), a provider of various technology-enabled services to the mortgage and real estate sectors, preferred stock in Valon Mortgage, Inc. (“Valon”), a residential mortgage servicing and technology company, and preferred stock in Credijusto Ltd. (“Covalto”), a financial services company.

(C)Includes goodwill derived from the acquisition of Shellpoint Partners LLC (“Shellpoint”), Guardian Asset Management LLC (“Guardian”) and Genesis.

(D)Represents loans made pursuant to a senior credit agreement and a senior subordinated credit agreement to an entity affiliated with funds managed by an affiliate of the Former Manager. The loans are accounted for under the fair value option.

Real Estate Owned (REO) — REO assets are those individual properties acquired by Rithm Capital or where Rithm Capital receives the property in satisfaction of a debt (e.g., by taking legal title or physical possession). Rithm Capital measures REO assets at the lower of cost or fair value, with valuation changes recorded in Other Income or Valuation and Credit Loss (Provision) Reversal on Loans and Real Estate Owned in the Consolidated Statements of Operations. REO assets are managed for prompt sale and disposition.

The following table presents activity related to the carrying value of investments in REO:

Balance at December 31, 2022	$	19,379
Purchases	—
Property received in satisfaction of loan	6,025
Sales(A)	(6,974)
Valuation (provision) reversal	732
Balance at March 31, 2023	$	19,162

(A)Recognized when control of the property has transferred to the buyer.

As of March 31, 2023, Rithm Capital had residential mortgage loans and mortgage loans receivable that were in the process of foreclosure with unpaid principal balances of $70.2 million and $12.5 million, respectively.

Notes and Loans Receivable — The following table summarizes the activity for loans receivable:

	Loans Receivable
Balance at December 31, 2022	$	94,401
Fundings	—
Payment in Kind	2,134
Proceeds from repayments	(64,661)
Transfer to other assets	—
Fair value adjustments due to:
Changes in instrument-specific credit risk	—
Other factors	231
Balance at March 31, 2023	$	32,105

The following table summarizes the past due status and difference between the aggregate unpaid principal balance and the aggregate fair value of notes and loans receivable:

	March 31, 2023						December 31, 2022
Days Past Due	UPB		Fair Value		Fair Value Over (Under) UPB		UPB		Fair Value		Fair Value Over (Under) UPB
Current	$	98,410	$	32,105	$	(66,305)	$	157,745	$	94,401	$	(63,344)
90+	—		—		—		—		—		—