VARIABLE INTEREST ENTITIES (Tables)

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Carrying Value and Classification of the Assets and Liabilities of Consolidated VIEs and Non-Consolidated VIEs

The table below presents the carrying value and classification of the assets and liabilities of consolidated VIEs on the Consolidated Balance Sheets:


	Advance Purchaser		Newrez Joint Ventures		Residential Mortgage Loans		Consumer Loan Companies		Mortgage Loans Receivable		Consolidated Funds		Total
March 31, 2024
Assets

Servicer advance investments, at fair value	$	364,843	$	—	$	—	—		$	—	$	—	$	364,843
Residential mortgage loans, HFS, at fair value	—		—		1,177,451		—		—		—		1,177,451
Consumer loans	—		—		—		267,948		—		—		267,948
Mortgage loans receivable	—		—		—		—		341,831		—		341,831
Cash and cash equivalents	5,532		18,000		—		—		—		1,056		24,588
Restricted cash	7,885		—		9,381		6,232		11,607		9,800		44,905
Other assets	9		631		—		4,051		4,887		339,187		348,765
Total Assets	$	378,269	$	18,631	$	1,186,832	$	278,231	$	358,325	$	350,043	2,570,331
Liabilities
Secured financing agreements(A)	—		—		1,052,769		—		—		—		1,052,769
Secured notes and bonds payable(A)	265,776		—		—		221,922		324,062		—		811,760
Accrued expenses and other liabilities	2,505		2,366		6,128		1,587		371		223,188		236,145
Total Liabilities	$	268,281	$	2,366	$	1,058,897	$	223,509	$	324,433	$	223,188	$	2,100,674

December 31, 2023
Assets

Servicer advance investments, at fair value	$	367,803	$	—	$	—	$	—	$	—	$	—	$	367,803
Residential mortgage loans, HFS, at fair value	—		—		1,112,097		—		—		—		1,112,097
Consumer loans	—		—		—		285,632		—		—		285,632
Mortgage loans receivable	—		—		—		—		353,594		—		353,594
Cash and cash equivalents	5,381		18,159		—		—		—		—		23,540
Restricted cash	8,273		—		6,113		6,301		7,572		—		28,259
Other assets	9		688		—		4,325		4,531		340,929		350,482
Total Assets	$	381,466	$	18,847	$	1,118,210	$	296,258	$	365,697	$	340,929	$	2,521,407
Liabilities
Secured financing agreements(A)	—		—		996,845		—		—		—		996,845
Secured notes and bonds payable(A)	274,404		—		—		235,770		318,998		—		829,172
Accrued expenses and other liabilities	2,606		2,240		5,382		1,507		372		219,920		232,027
Total Liabilities	$	277,010	$	2,240	$	1,002,227	$	237,277	$	319,370	$	219,920	$	2,058,044

(A)The creditors of the VIEs do not have recourse to the general credit of Rithm Capital, and the assets of the VIEs are not directly available to satisfy Rithm Capital’s obligations.

The following table summarizes the carrying value of the Company’s real estate bonds issued by unconsolidated VIEs and retained pursuant to required risk retention regulations which reflects the Company’s maximum exposure to loss, as well as the UPB of transferred loans. These bonds are presented as part of Real estate and other securities on the Consolidated Balance Sheets:



	March 31, 2024		December 31, 2023
Residential mortgage loan UPB and other collateral	$	11,466,396	$	10,901,751
Weighted average delinquency(A)	4.2%		4.2%
Net credit losses	$	167,949	$	163,125
Face amount of debt held by third parties	$	10,397,972	$	9,857,607

Carrying value of bonds retained by Rithm Capital(B)(C)	$	991,692	$	963,953
Year to date cash flows received by Rithm Capital on these bonds	$	40,924	$	155,972

(A)Represents the percentage of the UPB that is 60+ days delinquent.

(B)Includes real estate bonds retained pursuant to required risk retention regulations.

(C)Classified within Level 3 of the fair value hierarchy as the valuation is based on certain unobservable inputs including discount rate, prepayment rates and loss severity. See Note 19 for details on unobservable inputs.

The following table summarizes the Company’s involvement with VIEs related to the asset management business that are not consolidated. The Company’s involvement, through Sculptor, is generally limited to providing asset management services and, in certain cases, investments in the VIEs. The maximum exposure to loss represents the potential loss of current investments or income and fees receivables from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses, as well as unfunded commitments to certain funds that are VIEs. The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support to its VIEs that are not consolidated beyond its share of capital and other commitments described in Note 17.



	March 31, 2024		December 31, 2023
Net assets of unconsolidated VIEs in which the Company has a variable interest	$	12,613,891	$	12,782,124
Maximum risk of loss as a result of the Company’s involvement with unconsolidated VIEs:
Unearned income and fees	38,993		37,468
Income and fees receivable	37,873		43,250
Investments	527,231		533,026

Unfunded commitments(A)	182,846		207,575
Other commitments	23,021		—
Maximum Exposure to Loss	$	809,964	$	821,319

(A)Includes commitments from certain employees and executive managing directors in the amounts of $94.8 million and $97.5 million as of March 31, 2024 and December 31, 2023, respectively.

The following table summarizes the carrying value of the Company’s unconsolidated commercial real estate projects which reflects the Company’s maximum exposure to loss. See Note 22 regarding certain guarantees provided in connection with the investments. These investments are presented as part of Equity investments within other assets on the Consolidated Balance Sheets:


	March 31, 2024		December 31, 2023
Carrying value of commercial real estate held within unconsolidated VIEs	$	96,186	$	66,652
Carrying value of Rithm Capital’s investments in unconsolidated commercial real estate VIEs	$	34,846	$	29,210

Schedule of Others’ Interests in the Equity of Consolidated Subsidiaries

Others’ interests in the equity of consolidated subsidiaries is computed as follows:


	March 31, 2024						December 31, 2023
	Total Consolidated Equity		Others' Ownership Interest		Others' Interest in Equity of Consolidated Subsidiary		Total Consolidated Equity		Others' Ownership Interest		Others' Interest in Equity of Consolidated Subsidiary
Advance Purchaser	$	109,988	10.7	%	$	11,747	$	104,458	10.7	%	$	11,157
Newrez Joint Ventures	$	16,265	49.5	%	$	8,051	$	16,607	49.5	%	$	8,220
Consumer Loan Companies	$	68,126	46.5	%	$	31,679	$	72,361	46.5	%	$	33,748

Others’ interests in the net income (loss) is computed as follows:


	Three Months Ended March 31,
	2024						2023
	Net income (loss)		Others’ ownership interest as a percent of total		Others’ interest in net income (loss) of consolidated subsidiaries		Net income (loss)		Others’ ownership interest as a percent of total		Others’ interest in net income (loss) of consolidated subsidiaries
Advance Purchaser	$	9,530	10.7	%	$	1,018	$	(1,370)	10.7	%	$	(146)
Newrez Joint Ventures	$	112	49.5	%	$	55	$	(85)	49.5	%	$	(42)
Consumer Loan Companies	$	2,192	46.5	%	$	1,019	$	(2,391)	46.5	%	$	(1,112)

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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