MORTGAGE LOANS RECEIVABLE

3 Months Ended

Mar. 31, 2024

Receivables [Abstract]

MORTGAGE LOANS RECEIVABLE

MORTGAGE LOANS RECEIVABLE

Genesis specializes in originating and managing a portfolio of primarily short-term mortgage loans to fund the construction and development of, or investment in, residential properties.

On August 24, 2023, Rithm Capital acquired a portfolio of loans from Morgan Stanley Bank, N.A. with a face value of $148.4 million. The portfolio consists of fixed-rate bridge and renovation loans and is master serviced by Genesis.

The following table summarizes mortgage loans receivable outstanding by loan type as of March 31, 2024:

	Carrying Value(A)		% of Portfolio		Loan Count	% of Portfolio		Weighted Average Yield		Weighted Average Original Life (Months)	Weighted Average Committed Loan Balance to Value(B)
Construction	$	1,047,688	43.9	%	365	26.1	%	10.9	%	16.8	73.4% / 62.3%
Bridge	1,037,056		43.5	%	638	45.7	%	9.9	%	27.2	68.1%
Renovation	300,000		12.6	%	394	28.2	%	10.3	%	12.6	81.2% / 68.4%
	$	2,384,744	100.0	%	1,397	100.0	%	10.4	%	20.5	N/A

(A)Mortgage loans receivable are carried at fair value under the fair value option election. See Note 19 regarding fair value measurements.

(B)Weighted by commitment LTV for bridge loans, loan-to-cost and loan-to-after-repair-value for construction and renovation loans.

The following table summarizes the activity for the period for mortgage loans receivable:

Balance at December 31, 2023	$	2,232,913
Initial loan advances	468,805
Construction holdbacks and draws	180,893
Paydowns and payoffs	(505,091)
Fair value adjustments	14,873
Purchased loans discount amortization	588
Transfer of loans to REO	(8,237)
Balance at March 31, 2024	$	2,384,744

The Company is subject to credit risk in connection with its investments in mortgage loans. The two primary components of credit risk are default risk, which is the risk that a borrower fails to make scheduled principal and interest payments, and severity risk, which is the risk of loss upon a borrower’s default on a mortgage loan or other secured or unsecured loan. Severity risk includes the risk of loss of value of the property or other asset, if any, securing the loan, as well as the risk of loss associated with taking over the property or other asset, if any, including foreclosure costs.

The following table summarizes the past due status and difference between the aggregate UPB and the aggregate carrying value of mortgage loans receivable:

	March 31, 2024						December 31, 2023
Days Past Due	UPB		Carrying Value		Carrying Value Over (Under) UPB		UPB		Carrying Value		Carrying Value Over (Under) UPB
Current	$	2,329,505	$	2,344,877	$	15,372	$	2,184,470	$	2,183,047	$	(1,423)
90+	41,264		39,867		(1,397)		49,929		49,866		(63)

The following table summarizes the geographic distribution of the underlying mortgage loans receivable as of March 31, 2024:

	Percentage of Total Loan Commitment
State Concentration	March 31, 2024		December 31, 2023
California	49.9	%	48.2	%
Washington	6.5	%	7.9	%
Florida	6.5	%	7.3	%
New York	6.5	%	6.5	%
Colorado	4.7	%	2.4	%
Arizona	4.1	%	5.0	%
Virginia	4.1	%	4.7	%
Texas	3.3	%	3.5	%
Georgia	2.8	%	2.3	%
Illinois	2.4	%	2.5	%
Other US	9.2	%	9.7	%
	100.0	%	100.0	%

See Note 18 regarding the financing of mortgage loans receivable.