RESIDENTIAL MORTGAGE LOANS

3 Months Ended

Mar. 31, 2025

Rithm Capital accumulates its residential mortgage loan portfolio through originations, bulk acquisitions and the execution of call rights. Substantially all of the residential mortgage loan portfolio is serviced by Newrez.

Loans are accounted for based on Rithm Capital’s strategy and management’s intent and on whether the loan was credit-impaired at the date of acquisition. As of March 31, 2025, Rithm Capital accounts for loans based on the following categories:

•Loans held-for-investment (“HFI”), at fair value

•Loans held-for-sale (“HFS”), at lower of cost or fair value

•Loans HFS, at fair value

•Investments of consolidated CFEs represent mortgage loans held by certain mortgage securitization trusts where Rithm Capital is determined to be a primary beneficiary and, as a result, consolidates such trusts. The assets are measured based on the fair value of the more observable liabilities of such trusts under the CFE election. The obligations and liabilities of CFEs may only be satisfied with the assets of the respective consolidated CFEs, and creditors of the CFE do not have recourse to Rithm Capital Corp.

The following table summarizes residential mortgage loans outstanding by loan type:




	March 31, 2025								December 31, 2024
	Outstanding Face Amount		Carrying Value		Loan Count	Weighted Average Yield		Weighted Average Life (Years)(A)	Carrying Value
Investments of consolidated CFEs(B)	$	2,866,929	$	2,703,112	7,503	5.8	%	25.6	$	2,791,027
Residential mortgage loans, HFI, at fair value	384,304		354,003		7,220	8.0	%	4.7	361,890

Residential Mortgage Loans, HFS:
Acquired performing loans(C)	54,503		49,558		1,629	7.0	%	4.3	51,011
Acquired non-performing loans(D)	18,138		14,690		219	9.4	%	4.0	15,659
Total Residential Mortgage Loans, HFS	$	72,641	$	64,248	1,848	7.6	%	4.2	$	66,670

Residential Mortgage Loans, HFS, at Fair Value:
Acquired performing loans(C)(E)	339,705		328,564		1,582	5.8	%	22.2	408,421
Acquired non-performing loans(D)(E)	285,134		263,040		1,302	5.0	%	27.5	270,879
Originated loans	2,422,958		2,500,498		8,556	6.8	%	28.6	3,628,271
Total Residential Mortgage Loans, HFS, at Fair Value	$	3,047,797	$	3,092,102	11,440	6.5	%	27.8	$	4,307,571

(A)For loans classified as Level 3 in the fair value hierarchy, the weighted average life is based on the expected timing of the receipt of cash flows. For Level 2 loans, the weighted average life is based on the contractual term of the loan.

(B)Residential mortgage loans of consolidated CFEs are classified as Level 2 in the fair value hierarchy and valued based on the fair value of the more observable financial liabilities under the CFE election.

(C)Performing loans are generally placed on non-accrual status when principal or interest is 90 days or more past due.

(D)As of March 31, 2025, Rithm Capital has placed non-performing loans, HFS on non-accrual status, except as described in (E) below.

(E)Includes $226.3 million and $273.8 million UPB of Ginnie Mae early buyout options performing and non-performing loans, respectively, on accrual status as contractual cash flows are guaranteed by the FHA as of March 31, 2025.

See Note 18 regarding the financing of residential mortgage loans.

The following table summarizes the past due status and difference between the aggregate UPB and the aggregate carrying value of residential mortgage loans, HFS and residential mortgage loans, HFI, at fair value on the consolidated balance sheets:




	March 31, 2025						December 31, 2024
Days Past Due	UPB		Carrying Value		Carrying Value Over (Under) UPB		UPB		Carrying Value		Carrying Value Over (Under) UPB
Current	$	3,149,818	$	3,186,176	$	36,358	$	4,377,435	$	4,400,113	$	22,678
90+	354,924		324,177		(30,747)		369,118		336,018		(33,100)
Total	$	3,504,742	$	3,510,353	$	5,611	$	4,746,553	$	4,736,131	$	(10,422)

The following table summarizes the activity of residential mortgage loans, HFS and residential mortgage loans, HFI, at fair value on the consolidated balance sheets:


	Loans HFI, at Fair Value		Loans HFS, at Lower of Cost or Fair Value		Loans HFS, at Fair Value		Total













Balance at December 31, 2024	$	361,890	$	66,670	$	4,307,571	$	4,736,131
Originations	—		—		11,879,050		11,879,050
Sales	—		—		(13,558,301)		(13,558,301)
Purchases/additional fundings	—		—		476,410		476,410
Proceeds from repayments	(10,287)		(2,223)		(24,210)		(36,720)
Transfer of loans from (to) other assets(A)	—		(579)		10,982		10,403
Transfer of loans to REO	(846)		(128)		(184)		(1,158)


Valuation (provision) reversal on loans	—		508		—		508
Fair Value Adjustments Due To:
Changes in instrument-specific credit risk	(1,353)		—		(4,593)		(5,946)
Other factors	4,599		—		5,377		9,976
Balance at March 31, 2025	$	354,003	$	64,248	$	3,092,102	$	3,510,353

(A)Includes receivable modifications resulting in transfers between other assets and residential mortgage loans.

Gain on Originated Residential Mortgage Loans, HFS, Net

Newrez originates conventional, government-insured and nonconforming residential mortgage loans for sale and securitization. In connection with the sale or securitization of loans to the GSEs or mortgage investors, Rithm Capital reports gain on originated residential mortgage loans, HFS, net in the consolidated statements of operations. See Note 20 for detail on Rithm Capital’s continuing involvement in residential mortgage loan securitizations.

The following table summarizes the components of gain on originated residential mortgage loans, HFS, net:


	Three Months Ended March 31,
	2025		2024
Gain (loss) on residential mortgage loans originated and sold, net(A)	$	(159,650)	$	(124,113)
Gain (loss) on settlement of residential mortgage loan origination derivative instruments(B)	12,789		(15,524)
MSRs retained on transfer of residential mortgage loans(C)	319,148		215,939
Other(D)	21,982		6,493
Realized gain on sale of originated residential mortgage loans, net	194,269		82,795
Change in fair value of residential mortgage loans	12,599		14,268
Change in fair value of interest rate lock commitments (Note 17)	23,093		7,485
Change in fair value of derivative instruments (Note 17)	(70,172)		37,910
Gain on Originated Residential Mortgage Loans, HFS, Net	$	159,789	$	142,458

(A)Includes residential mortgage loan origination fees of $197.6 million and $177.7 million in the three months ended March 31, 2025 and 2024, respectively. Includes gain on residential mortgage loan securitizations accounted for as sales of $15.4 million and no gain or loss for the three months ended March 31, 2025 and 2024, respectively.

(B)Represents settlement of forward securities delivery commitments utilized as an economic hedge for mortgage loans not included within forward loan sale commitments.

(C)Represents the initial fair value of the capitalized MSRs upon loan sales with servicing retained.

(D)Includes fees for services associated with the residential mortgage loan origination process.