Rithm Capital enters into economic hedges including interest rate swaps, to-be-announced forward contract positions (“TBAs”), and futures to hedge a portion of its interest rate risk exposure. Interest rate risk is sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, as well as other factors. Rithm Capital’s credit risk with respect to economic hedges is the risk of default on Rithm Capital’s investments that results from a borrower’s or counterparty’s inability or unwillingness to make contractually required payments.

Rithm Capital may at times hold TBAs in order to mitigate Rithm Capital’s interest rate risk on certain specified MBS and MSRs. Amounts or obligations owed by or to Rithm Capital are subject to the right of set-off with the counterparty. As part of executing these trades, Rithm Capital may enter into agreements with its counterparties that govern the transactions for the purchases or sales made, including margin maintenance, payment and transfer, events of default, settlements and various other provisions. Changes in the value of economic hedges designed to protect against MBS and MSR fair value fluctuations, or hedging gains and losses, are reflected in the tables below.

As of March 31, 2025, Rithm Capital also held interest rate lock commitments (“IRLCs”), which represent a commitment to a particular interest rate provided the borrower is able to close the loan within a specified period, and forward loan sale and securities delivery commitments, which represent a commitment to sell specific residential mortgage loans at prices which are fixed as of the forward commitment date. Rithm Capital enters into forward loan sale and securities delivery commitments in order to hedge the exposure related to IRLCs and residential mortgage loans that are not covered by residential mortgage loan sale commitments.

Derivatives and economic hedges are recorded at fair value and presented in other assets or accrued expenses and other liabilities on the consolidated balance sheets, as follows:




	March 31, 2025		December 31, 2024
Derivative and Hedging Assets:
Interest rate swaps and futures(A)	$	2	$	6
IRLCs	37,923		21,496
TBAs	2,628		50,809
Foreign exchange forwards	—		2,836

	$	40,553	$	75,147
Derivative and Hedging Liabilities:
IRLCs	$	3,536	$	10,202
TBAs	29,574		15,628
Treasury short sales(B)	—		1,245
Other commitments(C)	25,521		25,521
Stock options	7		14
Foreign exchange forwards	2,118		—
	$	60,756	$	52,610

(A)Net of $41.8 million and $42.0 million of related variation margin accounts as of as of March 31, 2025 and December 31, 2024, respectively.

(B)As of December 31, 2024, the carrying value represents the net of repurchase agreements and $503.9 million of related reverse repurchase agreement lending facilities used to borrow securities to effectuate short sales of Treasury securities.

(C)During the first quarter of 2024, a subsidiary of the Company entered into an agreement with an affiliate, which could result in the subsidiary being required to make a payment under certain circumstances dependent upon amounts realized from an investment of the affiliate, subject to a maximum amount of $25.5 million. The agreement is classified as a derivative liability and measured at fair value.




	March 31, 2025		December 31, 2024
Interest rate swaps(A)	$	9,074,000	$	8,995,000
Interest rate futures(B)	1,135,000		—
IRLCs	4,343,640		3,413,043
TBAs(C)	16,258,921		17,402,824
Other commitments	25,521		25,057
Foreign exchange forwards	61,550		17,300

(A)Includes $3.1 billion notional of receive Secured Overnight Financing Rate (“SOFR”)/pay fixed of 3.6% and $5.9 billion notional of receive fixed of 3.8%/pay SOFR with weighted average maturities of 66 months and 29 months, respectively, as of March 31, 2025. Includes $3.1 billion notional of receive SOFR/pay fixed of 3.6% and $5.9 billion notional of receive fixed of 3.8%/pay SOFR with weighted average maturities of 71 months and 32 months, respectively, as of December 31, 2024.

(B)Represents a $1.1 billion notional Eris SOFR swap future with maturity of 63 months that replicates cash flows of receive fixed/pay SOFR interest rate swaps.

The following table summarizes gain (loss) on derivatives and other hedging instruments and the related presentation on the consolidated statements of operations:


	Three Months Ended March 31,
	2025		2024
Gain (Loss) on Originated Residential Mortgage Loans, HFS, Net(A):
IRLCs	$	23,093	$	7,485
TBAs	(70,172)		37,910

	(47,079)		45,395
Realized and Unrealized Gains (Losses), Net(B):
Interest rate swaps	(12,462)		29,161
Interest rate futures	5,981		—
TBAs	100,582		1,523
Treasury short sales	(103)		28,345
Other commitments	—		(17,097)
Stock options	39		—
Foreign exchange forwards	(1,387)		—
	92,650		41,932

Total Gain	$	45,571	$	87,327

(B)Excludes $12.8 million gain and $15.5 million loss for the three months ended March 31, 2025 and 2024, respectively, reflected as gain (loss) on settlement of residential mortgage loan origination derivative instruments presented within gain on originated residential mortgage loans, HFS, net (Note 7) in the consolidated statements of operations.