10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________________________________________________________________

 FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______                    

Commission file number: 001-14667

________________________________________________________________________________________________________

Mr. Cooper Group Inc.

(Exact name of registrant as specified in its charter)

Delaware	91-1653725
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8950 Cypress Waters Blvd, Coppell, TX	75019
(Address of principal executive offices)	(Zip Code)
(469) 549-2000
Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value per share	COOP	The Nasdaq Stock Market

____________________________________________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12(b)-2 of the Exchange Act.

Large Accelerated Filer	x	Accelerated Filer	☐
Non-Accelerated Filer	¨	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  x

Number of shares of common stock, $0.01 par value, outstanding as of April 20, 2023 was 68,053,365.

MR. COOPER GROUP INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	3
	Condensed Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2023 and 2022	4
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the Three Months Ended March 31, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2023 and 2022	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
	1. Nature of Business and Basis of Presentation	7
	2. Dispositions	8
	3. Mortgage Servicing Rights and Related Liabilities	8
	4. Advances and Other Receivables	11
	5. Mortgage Loans Held for Sale	12
	6. Loans Subject to Repurchase from Ginnie Mae	13
	7. Goodwill and Intangible Assets	13
	8. Derivative Financial Instruments	13
	9. Indebtedness	15
	10. Securitizations and Financings	16
	11. Earnings Per Share	17
	12. Income Taxes	18
	13. Fair Value Measurements	18
	14. Capital Requirements	22
	15. Commitments and Contingencies	22
	16. Segment Information	23
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48
Item 4.	Controls and Procedures	49
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5.	Other Information	50
Item 6.	Exhibits	51

2

PART I. Financial Information

Item 1. Financial Statements

MR. COOPER GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions of dollars, except share data)

	March 31, 2023		December 31, 2022
	(unaudited)
Assets
Cash and cash equivalents	$	534	$	527
Restricted cash	133		175
Mortgage servicing rights at fair value	6,566		6,654
Advances and other receivables, net of reserves of $148 and $137, respectively	933		1,019
Mortgage loans held for sale at fair value	937		893
Property and equipment, net of accumulated depreciation of $122 and $122, respectively	64		65
Deferred tax assets, net	707		703
Other assets	2,783		2,740
Total assets	$	12,657	$	12,776
Liabilities and Stockholders’ Equity
Unsecured senior notes, net	$	2,675	$	2,673
Advance and warehouse facilities, net	2,934		2,885
Payables and other liabilities	2,550		2,633
MSR related liabilities - nonrecourse at fair value	512		528
Total liabilities	8,671		8,719
Commitments and contingencies (Note 15)
Common stock at $0.01 par value - 300 million shares authorized, 93.2 million shares issued	1		1
Additional paid-in-capital	1,066		1,104
Retained earnings	3,839		3,802
Treasury shares at cost - 25.2 million and 24.0 million shares, respectively	(920)		(850)
Total stockholders’ equity	3,986		4,057
Total liabilities and stockholders’ equity	$	12,657	$	12,776

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited).

3

MR. COOPER GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(millions of dollars, except for earnings per share data)

	Three Months Ended March 31,
	2023		2022
Revenues:
Service related, net	$	261	$	755
Net gain on mortgage loans held for sale	69		297
Total revenues	330		1,052
Expenses:
Salaries, wages and benefits	148		228
General and administrative	113		110
Total expenses	261		338
Interest income	85		36
Interest expense	(110)		(106)
Other (expense) income, net	(9)		222
Total other (expense) income, net	(34)		152
Income before income tax (benefit) expense	35		866
Less: Income tax (benefit) expense	(2)		208
Net income	$	37	$	658
Earnings per share
Basic	$	0.54	$	8.91
Diluted	$	0.52	$	8.59

    

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited).

4

MR. COOPER GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(millions of dollars, except share data)

	Common Stock
	Shares (in thousands)	Amount		Additional Paid-in Capital		Retained Earnings		Treasury Share Amount		Total Mr. Cooper Stockholders’ Equity		Non-controlling Interests		Total Stockholders’ Equity
Balance at January 1, 2022	73,777	$	1	$	1,116	$	2,879	$	(630)	$	3,366	$	1	$	3,367
Shares issued / (surrendered) under incentive compensation plan	850	—		(39)		—		18		(21)		—		(21)
Share-based compensation	—	—		8		—		—		8		—		8
Repurchase of common stock	(721)	—		—		—		(35)		(35)		—		(35)
Net income	—	—		—		658		—		658		—		658
Balance at March 31, 2022	73,906	$	1	$	1,085	$	3,537	$	(647)	$	3,976	$	1	$	3,977
Balance at January 1, 2023	69,266	$	1	$	1,104	$	3,802	$	(850)	$	4,057	$	—	$	4,057
Shares issued / (surrendered) under incentive compensation plan	870	—		(43)		—		19		(24)		—		(24)
Share-based compensation	—	—		5		—		—		5		—		5
Repurchase of common stock	(2,083)	—		—		—		(89)		(89)		—		(89)
Net income	—	—		—		37		—		37		—		37
Balance at March 31, 2023	68,053	$	1	$	1,066	$	3,839	$	(920)	$	3,986	$	—	$	3,986

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited).

5

MR. COOPER GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions of dollars)

	Three Months Ended March 31,
	2023		2022
Operating Activities
Net income	$	37	$	658
Adjustments to reconcile net income to net cash attributable to operating activities:
Deferred tax (benefit) expense	(4)		197
Net gain on mortgage loans held for sale	(69)		(297)
Provision for servicing and non-servicing reserves	9		6
Fair value changes in mortgage servicing rights	230		(563)
Fair value changes in MSR related liabilities	6		99
Depreciation and amortization for property and equipment and intangible assets	9		11
Gain on disposition of assets	—		(223)
(Gain) loss on MSR hedging activities	(59)		140
Other operating activities	30		21
Repurchases of loan assets out of Ginnie Mae securitizations	(222)		(2,249)
Mortgage loans originated and purchased for sale, net of fees	(2,760)		(11,598)
Sales proceeds and loan payment proceeds for mortgage loans held for sale	2,931		14,471
Changes in assets and liabilities:
Advances and other receivables	76		169
Other assets	66		79
Payables and other liabilities	(120)		5
Net cash attributable to operating activities	160		926
Investing Activities
Property and equipment additions, net of disposals	(5)		(3)
Purchase of mortgage servicing rights	(114)		(965)
Proceeds on sale of mortgage servicing rights	15		4
Other investing activities	(3)		—
Net cash attributable to investing activities	(107)		(964)
Financing Activities
Increase (decrease) in advance and warehouse facilities	51		(204)
Settlements and repayment of excess spread financing	(22)		(32)
Repurchase of common stock	(89)		(35)
Other financing activities	(28)		(23)
Net cash attributable to financing activities	(88)		(294)
Net decrease in cash, cash equivalents, and restricted cash	(35)		(332)
Cash, cash equivalents, and restricted cash - beginning of period	702		1,041
Cash, cash equivalents, and restricted cash - end of period(1)	$	667	$	709
Supplemental Disclosures of Non-cash Investing Activities
Equity consideration received from disposition of assets	$	—	$	250
Purchase of mortgage servicing rights	$	1	$	64

(1)The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets.

	March 31, 2023		March 31, 2022
Cash and cash equivalents	$	534	$	579
Restricted cash	133		130
Total cash, cash equivalents, and restricted cash	$	667	$	709

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited). 

6

MR COOPER GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(millions of dollars, unless otherwise stated)

1. Nature of Business and Basis of Presentation

Nature of Business

Mr. Cooper Group Inc., collectively with its consolidated subsidiaries, (“Mr. Cooper,” the “Company,” “we,” “us” or “our”) provides servicing, origination and transaction-based services related to single family residences throughout the United States with operations under its primary brands: Mr. Cooper® and Xome®. Mr. Cooper is one of the largest home loan servicers and originators in the country focused on delivering a variety of servicing and lending products, services and technologies. The Company’s corporate website is located at www.mrcoopergroup.com. The Company has provided a glossary of terms, which defines certain industry-specific and other terms that are used herein, in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Form 10-Q.

Basis of Presentation

The interim condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Reports on Form 10-K for the year ended December 31, 2022.

The interim condensed consolidated financial statements are unaudited; however, in the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation of the results of the interim periods have been included. Dollar amounts are reported in millions, except per share data and other key metrics, unless otherwise noted.

Basis of Consolidation

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, other entities in which the Company has a controlling financial interest and those variable interest entities (“VIE”) where the Company’s wholly-owned subsidiaries are the primary beneficiaries. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that the Company became the primary beneficiary through the date the Company ceases to be the primary beneficiary. The Company applies the equity method of accounting to investments where it is able to exercise significant influence, but not control, over the policies and procedures of the entity and owns less than 50% of the voting interests. These investments are initially measured at cost and subsequently adjusted for the Company’s proportionate share of earnings and losses in the investee. Investments in certain companies over which the Company does not exert significant influence are recorded at fair value, or at cost and updated for observable price changes upon election of measurement alternative, at the end of each reporting period. Intercompany balances and transactions on consolidated entities have been eliminated.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates due to factors such as adverse changes in the economy, macro-economic uncertainty, changes in interest rates, secondary market pricing for loans held for sale and derivatives, strength of underwriting and servicing practices, changes in prepayment assumptions, declines in home prices or discrete events adversely affecting specific borrowers and such differences could be material.

Reclassifications

Certain reclassifications have been made in the 2022 condensed consolidated statement of cash flows to conform to 2023 presentation. Such reclassifications were not material and did not affect total revenues or net income.

Recent Accounting Guidance Adopted

The Company did not adopt any accounting guidance during the three months ended March 31, 2023 that had a material impact on its condensed consolidated financial statements or disclosures.

7

2. Dispositions

Sale of Mortgage Servicing Platform

On March 31, 2022, the Company completed the sale of certain assets and liabilities of its servicing and subservicing technology platform for performing and non-performing mortgage loans (the “Mortgage Servicing Platform”) to Sagent M&C, LLC (“Sagent”), in exchange for Class A-1 Common Units equal to 19.9% ownership of Sagent, and the sale of certain tangible personal property of the Company used in the conduct of the Mortgage Servicing Platform in exchange for $9.9 in cash, for total consideration of $260 (the “Sagent Transaction”). In connection with the Sagent Transaction, the Company recorded a gain of $223, which was included in “other income, net” within the condensed consolidated statements of operations, and recorded $4 transaction costs during the three months ended March 31, 2022. No transaction costs were recorded in the three months ended March 31, 2023. The net carrying amount of assets and liabilities transferred in connection with the Sagent Transaction was $31 and reported under Corporate/Other.

The Company accounted for the equity interest under the equity method of accounting, as the Company has the ability to exercise significant influence over Sagent’s operating and financial decisions but does not own a majority equity interest or otherwise control the respective entity. Under the equity method of accounting, the investment is initially stated at cost and subsequently adjusted for additional investments and the Company’s proportionate share of Sagent’s earnings or losses and distributions. The initial cost of the equity interest recorded was $250, which represented the fair value as of March 31, 2022. The Company recorded a $7 loss during the three months ended March 31, 2023 related to the Company's proportionate share of net loss of Sagent. The Company’s investment in Sagent was $230 as of March 31, 2023.

3. Mortgage Servicing Rights and Related Liabilities

The following table sets forth the carrying value of the Company’s mortgage servicing rights (“MSRs”) and the related liabilities. In estimating the fair value of all mortgage servicing rights and related liabilities, the impact of the current environment was considered in the determination of key assumptions.

MSRs and Related Liabilities	March 31, 2023		December 31, 2022
MSRs - fair value	$	6,566	$	6,654
Excess spread financing at fair value	$	491	$	509
Mortgage servicing rights financing at fair value	21		19
MSR related liabilities - nonrecourse at fair value	$	512	$	528

Mortgage Servicing Rights

The following table sets forth the activities of MSRs:

	Three Months Ended March 31,
MSRs - Fair Value	2023		2022
Fair value - beginning of period	$	6,654	$	4,223
Additions:
Servicing retained from mortgage loans sold	54		200
Purchases of servicing rights	102		1,015
Dispositions:
Sales of servicing assets	(15)		(4)
Changes in fair value:
Changes in valuation inputs or assumptions used in the valuation model (MSR MTM)	(105)		798
Changes in valuation due to amortization	(125)		(235)
Other changes(1)	1		9
Fair value - end of period	$	6,566	$	6,006

(1)Amounts primarily represent negative fair values reclassified from the MSR asset to reserves as underlying loans are removed from the MSR and other reclassification adjustments.

8

During the three months ended March 31, 2023 and 2022, the Company sold $1,256 and $361 in unpaid principal balance (“UPB”) of MSRs, of which $271 and $342 were retained by the Company as subservicer, respectively.

MSRs are segregated between investor type into agency and non-agency pools (referred to herein as “investor pools”) based upon contractual servicing agreements with investors at the respective balance sheet date to evaluate the MSR portfolio and fair value of the portfolio. Agency investors primarily consist of government sponsored enterprises (“GSE”), such as the Federal National Mortgage Association (“Fannie Mae” or “FNMA”) and the Federal Home Loan Mortgage Corp (“Freddie Mac” or “FHLMC”), and the Government National Mortgage Association (“Ginnie Mae” or “GNMA”). Non-agency investors consist of investors in private-label securitizations.

The following table provides a breakdown of UPB and fair value for the Company’s MSRs:

	March 31, 2023				December 31, 2022
MSRs - UPB and Fair Value Breakdown by Investor Pools	UPB		Fair Value		UPB		Fair Value
Agency	$	382,368	$	6,258	$	380,502	$	6,322
Non-agency	30,070		308		30,880		332
Total	$	412,438	$	6,566	$	411,382	$	6,654

Refer to Note 13, Fair Value Measurements, for further discussion on key weighted-average inputs and assumptions used in estimating the fair value of MSRs.

The following table shows the hypothetical effect on the fair value of the Company’s MSRs when applying certain unfavorable variations of key assumptions to these assets for the dates indicated:

	Discount Rate				Total Prepayment Speeds				Cost to Service per Loan
MSRs - Hypothetical Sensitivities	100 bps Adverse Change		200 bps Adverse Change		10% Adverse Change		20% Adverse Change		10% Adverse Change		20% Adverse Change
March 31, 2023
Mortgage servicing rights	$	(273)	$	(525)	$	(139)	$	(270)	$	(65)	$	(130)
December 31, 2022
Mortgage servicing rights	$	(266)	$	(511)	$	(136)	$	(264)	$	(61)	$	(122)

These hypothetical sensitivities should be evaluated with care. The effect on fair value of an adverse change in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects.

Excess Spread Financing - Fair Value

The Company had excess spread financing liability of $491 and $509, with UPB of $81,041 and $83,706 as of March 31, 2023 and December 31, 2022, respectively. Refer to Note 13, Fair Value Measurements, for key weighted-average inputs and assumptions used in the valuation of excess spread financing liability.

The following table shows the hypothetical effect on the Company’s excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities for the dates indicated:

	Discount Rate				Prepayment Speeds
Excess Spread Financing - Hypothetical Sensitivities	100 bps Adverse Change		200 bps Adverse Change		10% Adverse Change		20% Adverse Change
March 31, 2023
Excess spread financing	$	19	$	38	$	10	$	22
December 31, 2022
Excess spread financing	$	19	$	40	$	11	$	22

9

These hypothetical sensitivities should be evaluated with care. The effect on fair value of an adverse change in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Also, a positive change in the above assumptions would not necessarily correlate with the corresponding decrease in the net carrying amount of the excess spread financing. Excess spread financing’s cash flow assumptions that are utilized in determining fair value are based on the related cash flow assumptions used in the financed MSRs. Any fair value change recognized in the financed MSRs attributable to related cash flows assumptions would inherently have an inverse impact on the carrying amount of the related excess spread financing.

Mortgage Servicing Rights Financing - Fair Value

The Company had MSR financing liability of $21 and $19 as of March 31, 2023 and December 31, 2022, respectively. Refer to Note 13, Fair Value Measurements, for key weighted-average inputs and assumptions used in the valuation of the MSR financing liability.

Revenues - Service Related, net

The following table sets forth the items comprising total “revenues - service related, net”:

	Three Months Ended March 31,
Revenues - Service Related, net	2023		2022
Contractually specified servicing fees(1)	$	384	$	327
Other service-related income(1)	14		33
Incentive and modification income(1)	6		9
Servicing late fees(1)	21		19
Mark-to-market adjustments - Servicing(2)(3)	(61)		553
Amortization, net of accretion(4)	(115)		(202)
Originations service fees(5)	11		42
Corporate/Xome related service fees	19		12
Other(6)	(18)		(38)
Total revenues - Service Related, net	$	261	$	755

(1)The Company recognizes revenue on an earned basis for services performed. Amounts include subservicing related revenues. Amounts also include servicing fees from loans sold with servicing retained of $177 and $146 for the three months ended March 31, 2023 and 2022, respectively.

(2)Mark-to-market (“MTM”) adjustments - Servicing include fair value adjustments on MSR, excess spread financing and MSR financing liabilities. The amount of MSR MTM includes the impact of negative modeled cash flows which have been transferred to reserves on advances and other receivables. The negative modeled cash flows relate to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio. The impact of negative modeled cash flows was $9 and $6 for the three months ended March 31, 2023 and 2022, respectively.

(3)MTM adjustments - Servicing includes a gain of $59 and loss of $140 from MSR hedging activities during the three months ended March 31, 2023, and 2022, respectively.

(4)Amortization is net of excess spread accretion of $10 and $33 during the three months ended March 31, 2023 and 2022, respectively.

(5)Amounts include fees collected from customers for originated loans and from other lenders for loans purchased through the correspondent channel, and include loan application, underwriting, and other similar fees.

(6)Other represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements, portfolio runoff and the payments made associated with MSR financing arrangements.

10

4. Advances and Other Receivables

Advances and other receivables, net, consists of the following:

Advances and Other Receivables, Net	March 31, 2023		December 31, 2022
Servicing advances, net of $9 and $12 purchase discount, respectively	$	970	$	1,053
Receivables from agencies, investors and prior servicers, net of $7 purchase discount	111		103
Reserves	(148)		(137)
Total advances and other receivables, net	$	933	$	1,019

The following table sets forth the activities of the servicing reserves for advances and other receivables:

	Three Months Ended March 31,
Reserves for Advances and Other Receivables	2023		2022
Balance - beginning of period	$	137	$	167
Provision and other additions(1)	16		16
Write-offs	(5)		(31)
Balance - end of period	$	148	$	152

(1)The Company recorded a provision of $9 and $6 through the MTM adjustments in “revenues - service related, net”, in the condensed consolidated statements of operations during the three months ended March 31, 2023 and 2022, respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate.

Purchase Discount for Advances and Other Receivables

The following tables set forth the activities of the purchase discounts for advances and other receivables:

	Three Months Ended March 31,
	2023				2022
Purchase Discount for Advances and Other Receivables	Servicing Advances		Receivables from Agencies, Investors and Prior Servicers		Servicing Advances		Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	12	$	7	$	19	$	12
Utilization of purchase discounts	(3)		—		(3)		(4)
Balance - end of period	$	9	$	7	$	16	$	8

Credit Loss for Advances and Other Receivables

During the three months ended March 31, 2023 and 2022, the Company increased the current expected credit loss (“CECL”) reserve by $2 and $4, respectively. In addition, the Company wrote off $5 of the CECL reserve during the three months ended March 31, 2022. As of March 31, 2023, the total CECL reserve was $38, of which $31 and $7 were recorded in reserves and purchase discount for advances and other receivables, respectively. As of March 31, 2022, the total CECL reserve was $30, of which $22 and $8 were recorded in reserves and purchase discount for advances and other receivables, respectively.

The Company determined that the credit-related risk associated with applicable financial instruments typically increases with the passage of time. The CECL reserve methodology considers these financial instruments collectible to a point in time of 39 months. Any projected remaining balance at the end of the collection period is considered a loss and factors into the overall CECL loss rate required.

11

5. Mortgage Loans Held for Sale

Mortgage loans held for sale are recorded at fair value as set forth below:

Mortgage Loans Held for Sale	March 31, 2023		December 31, 2022
Mortgage loans held for sale – UPB	$	959	$	921
Mark-to-market adjustment(1)	(22)		(28)
Total mortgage loans held for sale	$	937	$	893

(1)The mark-to-market adjustment includes net change in unrealized gain/loss, premium on correspondent loans and fees on direct-to-consumer loans. The mark-to-market adjustment is recorded in “revenues - net gain on mortgage loans held for sale” in the condensed consolidated statements of operations.

The following table sets forth the activities of mortgage loans held for sale:

	Three Months Ended March 31,
Mortgage Loans Held for Sale	2023		2022
Balance - beginning of period	$	893	$	4,381
Loans sold and loan payments received	(2,940)		(14,527)
Mortgage loans originated and purchased, net of fees	2,760		11,598
Repurchase of loans out of Ginnie Mae securitizations(1)	222		2,249
Net change in unrealized gain (loss) on retained loans held for sale	9		(109)
Net transfers of mortgage loans held for sale(2)	(7)		1
Balance - end of period	$	937	$	3,593

(1)The Company has the optional right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased in connection with loan modifications and loan resolution activity, with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. Therefore, these loans are classified as held for sale.

(2)Amounts reflect transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net, for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing.

For the three months ended March 31, 2023 and 2022, the Company received proceeds of $2,931 and $14,472, on the sale of mortgage loans held for sale, resulting in a loss of $9 and $55, respectively.

The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows:

	March 31, 2023				December 31, 2022
Mortgage Loans Held for Sale	UPB		Fair Value		UPB		Fair Value
Non-accrual(1)	$	100	$	86	$	102	$	87

(1)Non-accrual UPB includes $85 and $90 of UPB related to Ginnie Mae repurchased loans as of March 31, 2023 and December 31, 2022, respectively.

The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $58 and $65 as of March 31, 2023 and December 31, 2022, respectively.

12

6. Loans Subject to Repurchase from Ginnie Mae

Loans are sold to Ginnie Mae in conjunction with the issuance of mortgage backed securities. The Company, as the issuer of the mortgage backed securities, has the unilateral right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including payments not being received from borrowers for greater than 90 days. Once the Company has the unilateral right to repurchase a delinquent loan, it has effectively regained control over the loan and recognizes these rights to the loan on its condensed consolidated balance sheets and establishes a corresponding repurchase liability regardless of the Company’s intention to repurchase the loan. The Company had loans subject to repurchase from Ginnie Mae of $1,889 and $1,865 as of March 31, 2023 and December 31, 2022, respectively, which are included in both “other assets” and “payables and other liabilities” in the condensed consolidated balance sheets. Loans subject to repurchase from Ginnie Mae as of March 31, 2023 and December 31, 2022 included $1,649 and $1,661, respectively, of loans in forbearance related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), respectively, whereby no payments have been received from borrowers for greater than 90 days.

7. Goodwill and Intangible Assets

The Company had goodwill of $120 as of March 31, 2023 and December 31, 2022, and intangible assets of $6 and $8 as of March 31, 2023 and December 31, 2022, respectively. Goodwill and intangible assets are included in “other assets” within the condensed consolidated balance sheets.

8. Derivative Financial Instruments

Derivative instruments are used as part of the overall strategy to manage exposure to interest rate risks related to mortgage loans held for sale and IRLCs (“the pipeline”) and the MSR portfolio. The Company economically hedges the pipeline separately from the MSR portfolio primarily using third-party derivative instruments. Such derivative instruments utilized by the Company include IRLCs, LPCs, forward MBS, Treasury futures and Swap futures. The changes in value on the derivative instruments associated with pipeline hedging are recorded in earnings as a component of “revenues - net gain on mortgage loans held for sale” on the condensed consolidated statements of operations and condensed consolidated statement of cash flows, while changes in the value of derivative instruments associated with the MSR portfolio fair value are recorded in “revenues - service related, net” on the condensed consolidated statements of operations and in “(gain) loss on MSR hedging activities” on the condensed consolidated statements of cash flows.

13

The following tables provide the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses) for the derivative financial instruments. Gains/(losses) include both realized and unrealized gains/(losses) of each derivative financial instrument.

		March 31, 2023				Three Months Ended March 31, 2023
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gains/(Losses)
Assets
Mortgage loans held for sale
Loan sale commitments	2023	$	399	$	12	$	2
Derivative financial instruments
IRLCs	2023	$	940	$	33	$	11
LPCs	2023	484		3		2
Forward MBS trades	2023	1,056		18		35
Treasury futures	2023	2,445		71		71
Total derivative financial instruments - assets		$	4,925	$	125	$	119
Liabilities
Derivative financial instruments
IRLCs	2023	$	25	$	—	$	—
LPCs	2023	85		—		1
Forward MBS trades	2023	1,439		10		(47)
Treasury futures	2023	193		1		(23)
Total derivative financial instruments - liabilities		$	1,742	$	11	$	(69)

		March 31, 2022				Three Months Ended March 31, 2022
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gains/(Losses)
Assets
Mortgage loans held for sale
Loan sale commitments	2022	$	543	$	1	$	(24)
Derivative financial instruments
IRLCs	2022	$	3,122	$	72	$	(62)
LPCs	2022	203		2		(1)
Forward MBS trades	2022	4,658		79		224
Total derivative financial instruments - assets		$	7,983	$	153	$	161
Liabilities
Derivative financial instruments
IRLCs	2022	$	551	$	5	$	(5)
LPCs	2022	658		8		(6)
Forward MBS trades	2022	695		6		7
Treasury futures	2022	1,097		49		(111)
Total derivative financial instruments - liabilities		$	3,001	$	68	$	(115)

14

As of March 31, 2023, the Company held $3 and $8 in collateral deposits and collateral obligations on derivative instruments, respectively. As of December 31, 2022 the Company held $49 and $1 in collateral deposits and collateral obligations on derivative instruments, respectively. Collateral deposits and collateral obligations are recorded in “other assets” and “payables and other liabilities”, respectively, in the Company’s condensed consolidated balance sheets. The Company does not offset fair value amounts recognized for derivative instruments with amounts collected or deposited on derivative instruments in the condensed consolidated balance sheets.

9. Indebtedness

Advance and Warehouse Facilities

					March 31, 2023				December 31, 2022
	Maturity Date	Collateral	Capacity Amount		Outstanding		Collateral Pledged		Outstanding		Collateral Pledged
Advance Facilities
$350 advance facility	October 2024	Servicing advance receivables	$	350	$	140	$	179	$	150	$	189
$300 advance facility(1)	November 2024	Servicing advance receivables	300		298		406		308		410
$250 advance facility	January 2024	Servicing advance receivables	250		161		192		171		209
$75 advance facility	December 2023	Servicing advance receivables	75		43		65		40		45
Advance facilities principal amount					642		842		669		853
Warehouse Facilities
$1,500 Warehouse Facility	June 2023	Mortgage loans or MBS	1,500		189		247		206		272
$1,500 Warehouse Facility	June 2023	Mortgage loans or MBS	1,500		145		144		135		133
$750 Warehouse Facility	October 2023	Mortgage loans or MBS	750		135		140		202		209
$500 Warehouse Facility(2)	September 2024	Mortgage loans or MBS	500		9		11		14		17
$500 Warehouse Facility	June 2023	Mortgage loans or MBS	500		64		67		76		80
$500 Warehouse Facility	August 2023	Mortgage loans or MBS	500		76		78		31		32
$450 Warehouse Facility(3)	April 2024	Mortgage loans or MBS	450		—		—		—		—
$300 Warehouse Facility	August 2023	Mortgage loans or MBS	300		161		165		115		117
$250 Warehouse Facility(4)	April 2023	Mortgage loans or MBS	250		—		—		—		—
$200 Warehouse Facility	May 2023	Mortgage loans or MBS	200		18		27		19		28
$200 Warehouse Facility	June 2023	Mortgage loans or MBS	200		50		51		18		21
$75 Warehouse Facility	December 2023	Mortgage loans or MBS	75		18		18		1		1
Warehouse facilities principal amount					865		948		817		910
MSR Facilities
$1,450 warehouse facility(1)	November 2024	MSR	1,450		300		2,162		260		2,284
$600 warehouse facility	April 2025	MSR	600		400		977		380		927
$500 warehouse facility(2)	September 2024	MSR	500		390		1,153		380		1,482
$500 warehouse facility	June 2024	MSR	500		325		774		365		732
$50 warehouse facility	November 2023	MSR	50		25		71		25		74
MSR facilities principal amount					1,440		5,137		1,410		5,499
Advance, warehouse and MSR facilities principal amount					2,947		$	6,927	2,896		$	7,262
Unamortized debt issuance costs					(13)				(11)
Advance and warehouse facilities, net					$	2,934			$	2,885

(1)Total capacity for this facility is $1,750, of which $300 is internally allocated for advance financing and $1,450 is internally allocated for MSR financing; capacity is fully fungible and is not restricted by these allocations.

(2)The capacity amount for this facility is $1,000, of which $500 is a sublimit for MSR financing.

(3)The capacity decreased in April 2023 to $100.

(4)The facility was terminated in April 2023.

15

In April 2023, the Company increased capacity on MSR facilities by $1,150. See further discussion in Liquidity and Capital Resources section within Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The weighted average interest rate for advance facilities was 7.2% and 2.4% for the three months ended March 31, 2023 and 2022, respectively. The weighted average interest rate for warehouse and MSR facilities was 7.0% and 2.1% for three months ended March 31, 2023 and 2022, respectively.

Unsecured Senior Notes

Unsecured senior notes consist of the following:

Unsecured Senior Notes	March 31, 2023		December 31, 2022
$850 face value, 5.500% interest rate payable semi-annually, due August 2028	$	850	$	850
$650 face value, 5.125% interest rate payable semi-annually, due December 2030	650		650
$600 face value, 6.000% interest rate payable semi-annually, due January 2027	600		600
$600 face value, 5.750% interest rate payable semi-annually, due November 2031	600		600
Unsecured senior notes principal amount	2,700		2,700
Unamortized debt issuance costs	(25)		(27)
Unsecured senior notes, net	$	2,675	$	2,673

The indentures provide that on or before certain fixed dates, the Company may redeem up to 40% of the aggregate principal amount of the unsecured senior notes with the net proceeds of certain equity offerings at fixed redemption prices, plus accrued and unpaid interest, to the redemption dates, subject to compliance with certain conditions. In addition, the Company may redeem all or a portion of the unsecured senior notes at any time on or after certain fixed dates at the applicable redemption prices set forth in the indentures plus accrued and unpaid interest, to the redemption dates. No notes were repurchased or redeemed during the three months ended March 31, 2023 and 2022.

As of March 31, 2023, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows:

Year Ending December 31,	Amount
2023 through 2026	$	—
2027	600
Thereafter	2,100
Total unsecured senior notes principal amount	$	2,700

Interest Expense

Interest expense primarily includes interest incurred on advance and warehouse facilities, unsecured senior notes, excess spread financing and compensating bank balances, as well as bank fees. The Company incurred interest expense related to advance and warehouse facilities, unsecured senior notes and excess spread financing of $99 and $86 for the three months ended March 31, 2023 and 2022, respectively.

Financial Covenants

The Company’s credit facilities contain various financial covenants which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements, which are measured at the Company’s operating subsidiary, Nationstar Mortgage LLC. The Company was in compliance with its required financial covenants as of March 31, 2023.

10. Securitizations and Financings

Variable Interest Entities

In the normal course of business, the Company enters into various types of on- and off-balance sheet transactions with special purpose entities (“SPEs”) determined to be VIEs, which primarily consist of securitization trusts established for a limited purpose. Generally, these SPEs are formed for the purpose of securitization transactions in which the Company transfers assets to an SPE, which then issues to investors various forms of debt obligations supported by those assets.

16

The Company has determined that the SPEs created in connection with certain advance facilities trusts should be consolidated as the Company is the primary beneficiary of each of these entities.

A summary of the assets and liabilities of the Company’s transactions with VIEs included in the Company’s condensed consolidated balance sheets is presented below:

	March 31, 2023		December 31, 2022
Consolidated Transactions with VIEs	Transfers Accounted for as Secured Borrowings		Transfers Accounted for as Secured Borrowings
Assets
Restricted cash	$	70	$	78
Advances and other receivables, net	371		398
Total assets	$	441	$	476
Liabilities
Advance facilities, net(1)	$	300	$	321
Payables and other liabilities	—		1
Total liabilities	$	300	$	322

(1)Refer to advance facilities in Note 9, Indebtedness, for additional information.

The following table shows a summary of the outstanding collateral and certificate balances for securitization trusts for which the Company was the transferor, including any retained beneficial interests and MSRs, that were not consolidated by the Company:

Unconsolidated Securitization Trusts	March 31, 2023		December 31, 2022
Total collateral balances - UPB	$	951	$	976
Total certificate balances	$	930	$	949

The Company has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of March 31, 2023 and December 31, 2022. Therefore, it does not have a significant maximum exposure to loss related to these unconsolidated VIEs.

A summary of mortgage loans transferred by the Company to unconsolidated securitization trusts that are 60 days or more past due are presented below:

Principal Amount of Transferred Loans 60 Days or More Past Due	March 31, 2023		December 31, 2022
Unconsolidated securitization trusts	$	108	$	119

11. Earnings Per Share

Basic earnings per share of common stock is computed by dividing net income by the weighted average number of common stock outstanding during the period. Diluted earnings per share of common stock is computed by dividing net income by the sum of the weighted average number of shares of common stock and any dilutive securities outstanding during the period. The Company’s potentially dilutive securities are share-based awards. The Company applies the treasury stock method to determine the dilutive weighted average number of shares of common stock outstanding based on the outstanding share-based awards. As of March 31, 2023 and December 31, 2022, the Company had 10 million preferred shares authorized at $0.00001, with zero shares issued and outstanding and aggregate liquidation preference of zero dollars.

17

The following table sets forth the computation of basic and diluted net income per common share (amounts in millions, except per share amounts):

	Three Months Ended March 31,
Computation of Earnings Per Share	2023		2022
Net income	$	37	$	658
Weighted average shares of common stock outstanding (in thousands):
Basic	69,008		73,864
Dilutive effect of stock awards	1,471		2,704
Diluted	70,479		76,568
Earnings per common share
Basic	$	0.54	$	8.91
Diluted	$	0.52	$	8.59

12. Income Taxes

For the three months ended March 31, 2023 and 2022, the effective tax rate for operations was (5.6)% and 24.0%, respectively, which differed from the statutory federal rate of 21% primarily due to state income taxes and nondeductible executive compensation. The effective tax rate decreased during the three months ended March 31, 2023 compared to the same period in 2022, primarily due to the impact of quarterly discrete tax items relative to the income before taxes for the respective periods, including the excess tax benefit from stock-based compensation.

13. Fair Value Measurements

Fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a three-tiered fair value hierarchy has been established based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs).

There have been no significant changes to the valuation techniques and inputs used by the Company in estimating fair values of Level 2 and Level 3 assets and liabilities as disclosed in the Company’s Annual Reports on Form 10-K for the year ended December 31, 2022.

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The following tables present the estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured at fair value on a recurring basis:

	March 31, 2023
			Recurring Fair Value Measurements
Fair Value - Recurring Basis	Total Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage loans held for sale	$	937	$	—	$	866	$	71
Mortgage servicing rights	6,566		—		—		6,566
Equity investments	44		2		—		42
Derivative financial instruments
IRLCs	33		—		—		33
LPCs	3		—		—		3
Forward MBS trades	18		—		18		—
Treasury futures	71		—		71		—
Liabilities
Derivative financial instruments
Forward MBS trades	10		—		10		—
Treasury futures	1		—		1		—
Mortgage servicing rights financing	21		—		—		21
Excess spread financing	491		—		—		491

	December 31, 2022
			Recurring Fair Value Measurements
Fair Value - Recurring Basis	Total Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage loans held for sale	$	893	$	—	$	819	$	74
Mortgage servicing rights	6,654		—		—		6,654
Equity investments	47		2		—		45
Derivative financial instruments
IRLCs	22		—		—		22
Forward MBS trades	8		—		8		—
LPCs	1		—		—		1
Liabilities
Derivative financial instruments
Forward MBS trades	9		—		9		—
LPCs	1		—		—		1
Treasury futures	14		—		14		—
Mortgage servicing rights financing	19		—		—		19
Excess spread financing	509		—		—		509

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The tables below present a reconciliation for all of the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis:

	Three Months Ended March 31, 2023
	Assets								Liabilities
Fair Value - Level 3 Assets and Liabilities	Mortgage servicing rights		Mortgage loans held for sale		Equity investments		IRLCs		Excess spread financing		Mortgage servicing rights financing
Balance - beginning of period	$	6,654	$	74	$	45	$	22	$	509	$	19
Changes in fair value included in earnings	(230)		1		(3)		11		4		2
Purchases/additions (1)	102		28		—		—		—		—
Issuances	54		—		—		—		—		—
Sales/dispositions (2)	(15)		(31)		—		—		—		—
Repayments	—		(1)		—		—		(4)		—
Settlements	—		—		—		—		(18)		—
Other changes	1		—		—		—		—		—
Balance - end of period	$	6,566	$	71	$	42	$	33	$	491	$	21

	Three Months Ended March 31, 2022
	Assets						Liabilities
Fair Value - Level 3 Assets and Liabilities	Mortgage servicing rights		Equity investments		IRLCs		Excess spread financing		Mortgage servicing rights financing
Balance - beginning of period	$	4,223	$	54	$	134	$	768	$	10
Changes in fair value included in earnings	563		—		(62)		79		20
Purchases	1,015		—		—		—		—
Issuances	200		—		—		—		—
Sales	(4)		—		—		—		—
Settlements	—		—		—		(32)		—
Other changes	9		—		—		—		—
Balance - end of period	$	6,006	$	54	$	72	$	815	$	30

(1)Additions for mortgages loans held for sale include loans that are purchased or transferred in.

(2)Dispositions for mortgage loans held for sales include loans that are sold or transferred out.

The Company had immaterial LPCs assets and liabilities as of March 31, 2023 and March 31, 2022. No transfers were made in or out of Level 3 fair value assets and liabilities for the Company during the three months ended March 31, 2023 and 2022.

20

The table below presents the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities.

	March 31, 2023									December 31, 2022
	Range						Weighted Average			Range						Weighted Average
Level 3 Inputs	Min			Max						Min			Max
MSR(1)
Discount rate	10.3		%	13.6		%	11.4		%	10.4		%	13.7		%	11.4		%
Prepayment speed	6.3		%	13.2		%	7.5		%	6.3		%	12.2		%	7.2		%
Cost to service per loan(2)	$	56		$	161		$	85		$	54		$	155		$	80
Average life(3)							8.1 years									8.1 years
Mortgage loans held for sale
Market pricing	45.0		%	103.6		%	77.7		%	37.3		%	114.7		%	77.4		%
IRLCs
Value of servicing (reflected as a percentage of loan commitment)	—		%	3.8		%	2.1		%	(0.6)		%	3.9		%	2.3		%
Excess spread financing(1)
Discount rate	9.9		%	13.7		%	11.2		%	10.0		%	13.8		%	11.3		%
Prepayment speed	7.4		%	14.1		%	9.6		%	6.9		%	13.3		%	9.2		%
Average life(3)							6.5 years									6.6 years
Mortgage servicing rights financing
Advance financing and counterparty fee rates	5.2		%	8.5		%	6.8		%	5.2		%	8.6		%	7.1		%
Annual advance recovery rates	15.9		%	20.7		%	17.5		%	15.9		%	20.6		%	17.3		%

(1)The inputs are weighted by investor.

(2)Presented in whole dollar amounts.

(3)Average life is included for informational purposes.

The tables below present a summary of the estimated carrying amount and fair value of the Company’s financial instruments not carried at fair value:

	March 31, 2023
	Carrying Amount		Fair Value
Financial Instruments			Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	534	$	534	$	—	$	—
Restricted cash	133		133		—		—
Advances and other receivables, net	933		—		—		933
Loans subject to repurchase from Ginnie Mae	1,889		—		1,889		—
Financial liabilities
Unsecured senior notes, net	2,675		—		2,243		—
Advance and warehouse facilities, net	2,934		—		2,947		—
Liability for loans subject to repurchase from Ginnie Mae	1,889		—		1,889		—

21

	December 31, 2022
	Carrying Amount		Fair Value
Financial Instruments			Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	527	$	527	$	—	$	—
Restricted cash	175		175		—		—
Advances and other receivables, net	1,019		—		—		1,019
Loans subject to repurchase from Ginnie Mae	1,865		—		1,865		—
Financial liabilities
Unsecured senior notes, net	2,673		—		2,209		—
Advance and warehouse facilities, net	2,885		—		2,896		—
Liability for loans subject to repurchase from Ginnie Mae	1,865		—		1,865		—

14. Capital Requirements

Certain of the Company’s secondary market investors require minimum net worth (“capital”) requirements, as specified in the respective selling and servicing agreements. In addition, these investors may require capital ratios in excess of the stated requirements to approve large servicing transfers. To the extent that these requirements are not met, the Company’s secondary market investors may utilize a range of remedies ranging from sanctions, suspension or ultimately termination of the Company’s selling and servicing agreements, which would prohibit the Company from further originating or securitizing these specific types of mortgage loans or being an approved servicer. The Company’s various capital requirements related to its outstanding selling and servicing agreements are measured based on the Company’s operating subsidiary, Nationstar Mortgage LLC. As of March 31, 2023, the Company was in compliance with its selling and servicing capital requirements.

15. Commitments and Contingencies

Litigation and Regulatory

The Company and its subsidiaries are routinely and currently involved in a number of legal proceedings, including, but not limited to, judicial, arbitration, regulatory and governmental proceedings related to matters that arise in connection with the conduct of the Company’s business. While it is not possible to predict the outcome of any of these matters, based on the Company’s assessment of the facts and circumstances, it does not believe any of these matters, individually or in the aggregate, will have a material adverse effect on the financial position, results of operations or cash flows of the Company. However, actual outcomes may differ from those expected and could have a material effect on our financial position, results of operations, or cash flows in a future period.

The Company will continue to monitor legal matters for further developments that could affect the amount of the accrued liability that has been previously established. Legal-related expenses for the Company include legal settlements and the fees paid to external legal service providers and are included in general and administrative expenses on the condensed consolidated statements of operations. During the three months ended March 31, 2023 and 2022, the Company recorded $9 of legal-related expenses and $2 of legal-related recoveries, net of legal-related expenses, respectively. Management currently believes the aggregate range of reasonably possible loss is $2 to $5 in excess of the accrued liability (if any) related to those matters as of March 31, 2023. This estimated range of possible loss is based upon currently available information and is subject to significant judgment, numerous assumptions and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary substantially from the current estimate.

Other Loss Contingencies

As part of the Company’s ongoing operations, it acquires servicing rights of mortgage loan portfolios that are subject to indemnification based on the representations and warranties of the seller. From time to time, the Company will seek recovery under these representations and warranties for incurred costs. As of March 31, 2023, the Company believes all recorded balances for which recovery is sought from the seller are valid claims, and no evidence suggests additional reserves are warranted.

22

Loan and Other Commitments

The Company enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. The Company also enters into LPCs with prospective sellers. These loan commitments are treated as derivatives and are carried at fair value. See Note 8, Derivative Financial Instruments, for more information.

16. Segment Information

The Company’s segments reflect the internal reporting the chief operating decision maker uses to evaluate operating performance and are based upon the Company’s organizational structure, which focuses primarily on the services offered. A brief description of our current business segments is as follows:

Servicing: This segment performs operational activities on behalf of investors or owners of the underlying mortgages and mortgage servicing rights, including collecting and disbursing borrower payments, investor reporting, customer service, modifying loans where appropriate to help borrowers stay current, and when necessary performing collections, foreclosures, and the sale of REO.

Originations: This segment originates residential mortgage loans through our direct-to-consumer channel, which provides refinance options for our existing customers, and through our correspondent channel, which purchases or originates loans from mortgage bankers.

Corporate/Other: Functional expenses are allocated to individual segments based on the actual cost of services performed, direct resource utilization, or headcount percentage for shared services. During the fourth quarter of 2022, the Company began allocating shared services based on headcount instead of an estimate of percentage use as it changed its segment measures provided to and used by the chief operating decision maker. As a result, all costs for shared services are allocated to individual segments based on headcount. The Company restated segment information for the historical periods presented herein to reflect the allocation method change and to conform to the current presentation. The change affects total expenses for Servicing and Originations segments and Corporate/Other, but had no effect on condensed consolidated statements of operations. Non-allocated corporate expenses include the administrative costs of executive management and other corporate functions that are not directly attributable to the Company’s operating segments. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties. Eliminations are included in Corporate/Other.

On March 31, 2022, the Company completed the sale of its Mortgage Servicing Platform to Sagent and recorded a gain of $223, which was included in “other income, net” within the condensed statements of operations and reported under Corporate/Other. Refer to Note 2, Dispositions for further details.

The following tables present financial information by segment:

	Three Months Ended March 31, 2023
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	231	$	11	$	19	$	261
Net gain on mortgage loans held for sale	—		69		—		69
Total revenues	231		80		19		330
Total expenses	153		56		52		261
Interest income	79		6		—		85
Interest expense	(63)		(7)		(40)		(110)
Other expense, net	—		—		(9)		(9)
Total other income (expenses), net	16		(1)		(49)		(34)
Income (loss) before income tax expense (benefit)	$	94	$	23	$	(82)	$	35
Depreciation and amortization for property and equipment and intangible assets	$	2	$	2	$	5	$	9
Total assets	$	10,050	$	760	$	1,847	$	12,657

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	Three Months Ended March 31, 2022
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	701	$	42	$	12	$	755
Net gain on mortgage loans held for sale	15		282		—		297
Total revenues	716		324		12		1,052
Total expenses	122		174		42		338
Interest income	19		17		—		36
Interest expense	(54)		(12)		(40)		(106)
Other income, net	—		—		222		222
Total other (expenses) income, net	(35)		5		182		152
Income before income tax expense	$	559	$	155	$	152	$	866
Depreciation and amortization for property and equipment and intangible assets	$	5	$	4	$	2	$	11
Total assets	$	9,825	$	2,666	$	1,999	$	14,490

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CAUTIONS REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the U.S. federal securities laws. These forward-looking statements include, without limitation, statements concerning plans, objectives, goals, projections, strategies, core initiatives, future events or performance, and underlying assumptions and other statements, which are not statements of historical facts. When used in this discussion, the words “anticipate,” “appears,” “believe,” “foresee,” “intend,” “should,” “expect,” “estimate,” “project,” “plan,” “may,” “could,” “will,” “are likely,” and similar expressions are intended to identify forward-looking statements. These statements involve predictions of our future financial condition, performance, plans and strategies and are thus dependent on a number of factors including, without limitation, assumptions and data that may be imprecise or incorrect. Specific factors that may impact performance or other predictions of future actions have, in many but not all cases, been identified in connection with specific forward-looking statements. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances, and we are under no obligation to, and express disclaim any obligation, to update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

A number of important factors exist that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include, but are not limited to:

•macroeconomic and U.S. residential real estate market conditions;

•changes in prevailing interest rates and/or changes in home prices;

•our ability to maintain or grow the size of our servicing portfolio;

•our ability to maintain or grow our originations volume and profitability;

•our ability to recapture voluntary prepayments related to our existing servicing portfolio;

•our shift in the mix of our servicing portfolio to subservicing, which is highly concentrated;

•delays in our ability to collect or be reimbursed for servicing advances;

•our ability to obtain sufficient liquidity and capital to operate our business;

•disruptions in the secondary home loans market;

•our ability to successfully implement our strategic initiatives and hedging strategies;

•our ability to realize anticipated benefits of our previous acquisitions;

•our ability to use net operating loss carryforwards and other tax attributes;

•changes in our business relationships or changes in servicing guidelines with Fannie Mae, Freddie Mac and Ginnie Mae;

•third-party credit, servicer and correspondent risks;

•our ability to pay down debt;

•our ability to manage legal and regulatory examinations and enforcement investigations and proceedings, compliance requirements and related costs;

•health pandemics, hurricanes, earthquakes, fires, floods and other natural catastrophic events;

•our ability to prevent cyber intrusions and mitigate cyber risks; and

•our ability to maintain our various licenses and other regulatory approvals.

All of these factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is not possible for our management to predict all such factors or to assess the effect of each such new factor on our business. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and any of these statements included herein may prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements, or our objectives and plans will be achieved. Please refer to Risk Factors and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in this report and in our Annual Report on Form 10-K for the year ended December 31, 2022 for further information on these and other risk factors affecting us.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022. The following discussion contains, in addition to the historical information, forward-looking statements that include risks, assumptions and uncertainties that could cause actual results to differ materially from those anticipated by such statements.

Dollar amounts are reported in millions, except per share data and other key metrics, unless otherwise noted.

We have provided a glossary of terms, which defines certain industry-specific and other terms that are used herein, at the end of the MD&A section.

Overview

We are a leading servicer of residential mortgage loans. Our purpose is to keep the dream of homeownership alive, and we do this as a servicer by helping mortgage borrowers manage what is typically their largest financial asset, and by helping our investors maximize the returns from their portfolios of residential mortgages. We have a track record of significant growth, having expanded our servicing portfolio from $10 billion in 2009 to $853 billion as of March 31, 2023. We believe this track record reflects our strong operating capabilities, which include a low-cost servicing platform, strong loss mitigation skills, a commitment to compliance, a customer-centric culture, a demonstrated ability to retain customers, growing origination capabilities, and significant investment in technology.

Our strategy is to position the Company for sustainable long-term growth, drive improved efficiency and profitability, and generate a return on tangible equity of 12% or higher. Key strategic priorities include the following:

•Strengthen our balance sheet by building capital and liquidity, and managing interest rate and other forms of risk;

•Improve efficiency by driving continuous improvement in unit costs for our Servicing and Originations segments, as well as by taking corporate actions to eliminate costs throughout the organization;

•Grow our servicing portfolio to $1 trillion in UPB by acquiring new customers and retaining existing customers;

•Achieve and sustain a refinance recapture rate of 60%;

•Delight our customers and keep Mr. Cooper a great place for our team members to work;

•Reinvent the customer experience by acting as the customer’s advocate and by harnessing technology to deliver digital solutions that are personalized and friction-less;

•Sustain the talent of our people and the culture of our organization; and

•Maintain strong relationships with agencies, investors, regulators, and other counterparties and a strong reputation for compliance and customer service.

Anticipated Trends

In the first quarter of 2023, our servicing portfolio was down slightly from the fourth quarter of 2022 due to timing, but we expect continued portfolio growth in 2023, as we have successfully bid on $57 billion UPB in MSR acquisitions during the quarter with expected boarding during the second and third quarters of 2023. Additionally, in connection with a pending acquisition in April 2023, we agreed to take on a special servicing platform, which includes approximately $37 billion UPB in subservicing contracts. Overall, we expect to generate strong earnings with servicing portfolio growth being the primary driver during 2023. In April 2023, the Company increased capacity on our MSR facilities by $1,150. See further discussion in Liquidity and Capital Resources section.

In the first quarter of 2023, our Originations segment generated pretax income of $23 on funded volume of $2,739. For 2023, we expect Originations to operate at consistent profitable levels considering the high levels of interest rates volatility.

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While the recent inflation rate increase appears to have subsided, the inflation rate remains relatively high. Inflationary pressures may limit a borrower’s disposable income, which can decrease a borrowers’ ability to enter into mortgage transactions. Inflationary pressures, along with supply chain disruptions, may also increase our operating costs. However, historically changes in interest rates have a greater impact on our financial results than changes in inflation. While interest rates are greatly influenced by changes in the inflation rate, they do not necessarily change at the same rate or extent as the inflation rate.

Results of Operations

Table 1. Consolidated Operations

	Three Months Ended March 31,
	2023		2022		Change
Revenues - operational(1)	$	391	$	499	$	(108)
Revenues - mark-to-market	(61)		553		(614)
Total revenues	330		1,052		(722)
Total expenses	261		338		(77)
Total other (expenses) income, net	(34)		152		(186)
Income before income tax (benefit) expense	35		866		(831)
Less: Income tax (benefit) expense	(2)		208		(210)
Net income	$	37	$	658	$	(621)

(1)Revenues - operational consists of total revenues, excluding mark-to-market.

Income before income tax (benefit) expense decreased during the three months ended March 31, 2023 as compared to 2022 primarily due to a decrease in total revenues, partially offset by lower total expenses. The decrease in total revenues was primarily attributable to a decline in revenues from our Servicing segment due to the change in MSR MTM and excess spread and financing MTM due to an increase in prepayment speeds during the three months ended March 31, 2023 driven by a decrease in mortgage rates compared to decrease in prepayment speeds in 2022 for the comparative period driven by an increase in mortgage rates. The decrease in total expenses was primarily driven by lower salaries, wages and benefits in our Originations segment due to lower headcount in both the direct-to-consumer and correspondent channels as a result of reducing headcount commensurate with lower origination volumes. The change in total other (expenses) income, net during the three months ended March 31, 2023 as compared to 2022 was primarily due to a $223 gain recorded in 2022 upon completion of the Sagent Transaction. See further discussions in Note 2, Dispositions, in the Notes to the Condensed Consolidated Financial Statements and in the Segment Results section of the MD&A.

The effective tax rate during the three months ended March 31, 2023 was (5.6)% as compared to 24.0% in 2022. The change in effective tax rate is primarily attributable to the impact of quarterly discrete tax items relative to income before taxes for the respective period, including the excess tax benefit from stock-based compensation.

Segment Results

Our operations are conducted through two segments: Servicing and Originations.

•The Servicing segment performs operational activities on behalf of investors or owners of the underlying mortgages and mortgage servicing rights, including collecting and disbursing borrower payments, investor reporting, customer service, modifying loans where appropriate to help borrowers stay current, and when necessary performing collections, foreclosures, and the sale of REO.

•The Originations segment originates residential mortgage loans through our direct-to-consumer channel, which provides refinance options for our existing customers, and through our correspondent channel, which purchases or originates loans from mortgage bankers.

Refer to Note 16, Segment Information, in the Notes to the Condensed Consolidated Financial Statements for a summary of segment results.

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Servicing Segment

The Servicing segment’s strategy is to generate income by growing the portfolio and maximizing the servicing margin. We believe several competitive strengths have been critical to our long-term growth as a servicer and subservicer, including our low-cost platform that creates operating leverage, our skill in mitigating losses for investors and clients, our commitment to strong customer service, industry leading compliance management, our history of successfully boarding new loans, and the ability to retain existing customers by offering attractive refinance options. We believe that our operational capabilities are reflected in our strong servicer ratings and recent agency recognition.

Table 2. Servicer Ratings

	Fitch(1)	Moody’s(2)	S&P(3)
Rating date	August 2022	April 2022	June 2022
Residential	RPS2	SQ2-	Above Average
Master Servicer	RMS2+	SQ2+	Above Average
Special Servicer	RSS2	SQ2-	Above Average
Subprime Servicer	RPS2	SQ2-	Above Average

(1)Fitch Rating Scale of 1 (Highest Performance) to 5 (Low/No Proficiency)

(2)Moody’s Rating Scale of SQ1 (Strong Ability/Stability) to SQ5 (Weak Ability/Stability)

(3)S&P Rating Scale of Strong to Weak

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The following tables set forth the results of operations for the Servicing segment:

Table 3. Servicing Segment Results of Operations

	Three Months Ended March 31,
	2023				2022				Change
	Amt			bps(1)	Amt			bps(1)	Amt			bps
Revenues
Operational	$	407		19	$	365		19	$	42		—
Amortization, net of accretion	(115)			(5)	(202)			(11)	87			6
Mark-to-market adjustments - Servicing	(61)			(3)	553			30	(614)			(33)
Total revenues	231			11	716			38	(485)			(27)
Expenses
Salaries, wages and benefits	82			4	75			4	7			—
General and administrative
Servicing support fees	16			1	11			1	5			—
Corporate and other general and administrative expenses	42			2	25			1	17			1
Foreclosure and other liquidation related expenses, net	11			—	6			—	5			—
Depreciation and amortization	2			—	5			—	(3)			—
Total general and administrative expenses	71			3	47			2	24			1
Total expenses	153			7	122			6	31			1
Other income (expense)
Interest income	79			4	19			1	60			3
Advance interest expense	(14)			(1)	(6)			—	(8)			(1)
Other interest expense	(49)			(2)	(48)			(3)	(1)			1
Interest expense	(63)			(3)	(54)			(3)	(9)			—
Total other income (expense), net	16			1	(35)			(2)	51			3
Income before income tax expense	$	94		5	$	559		30	$	(465)		(25)
Weighted average cost - advance and MSR facilities	7.4		%		2.9		%		4.5		%
Weighted average cost - excess spread financing	8.7		%		9.0		%		(0.3)		%

(1)Calculated basis points (“bps”) are as follows: Annualized dollar amount/Total average UPB X 10000.

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Table 4. Servicing - Revenues

	Three Months Ended March 31,
	2023			2022			Change
	Amt		bps(1)	Amt		bps(1)	Amt		bps
MSR Operational Revenue
Base servicing fees	$	327	15	$	272	15	$	55	—
Modification fees(2)	3		—	5		—	(2)		—
Late payment fees(2)	16		1	15		1	1		—
Other ancillary revenues(2)	10		—	42		2	(32)		(2)
Total MSR operational revenue	356		16	334		18	22		(2)
Subservicing-related revenue(2)	69		3	69		3	—		—
Total servicing fee revenue	425		19	403		21	22		(2)
MSR financing liability costs	(8)		—	(5)		—	(3)		—
Excess spread payments and portfolio runoff	(10)		—	(33)		(2)	23		2
Total operational revenue	407		19	365		19	42		—
Amortization, Net of Accretion
MSR amortization	(125)		(5)	(235)		(13)	110		8
Excess spread accretion	10		—	33		2	(23)		(2)
Total amortization, net of accretion	(115)		(5)	(202)		(11)	87		6
Mark-to-Market Adjustments - Servicing
MSR MTM	(105)		(5)	798		43	(903)		(48)
MTM adjustments(3)(4)	50		2	(146)		(8)	196		10
Excess spread / financing MTM	(6)		—	(99)		(5)	93		5
Total MTM adjustments - Servicing	(61)		(3)	553		30	(614)		(33)
Total revenues - Servicing	$	231	11	$	716	38	$	(485)	(27)

(1)Calculated basis points (“bps”) are as follows: Annualized dollar amount/Total average UPB X 10000.

(2)Certain ancillary and other non-base fees related to subservicing operations are separately presented as subservicing-related revenue.

(3)MTM adjustments include the impact of negative modeled cash flows which have been transferred to reserves on advances and other receivables. The negative modeled cash flows relate to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio. The impact of negative modeled cash flows was $9 and $6 during the three months ended March 31, 2023 and 2022, respectively.

(4)MTM adjustments also include a gain of $59 and loss of $140 from MSR hedging activities during the three months ended March 31, 2023 and 2022, respectively.

Servicing Segment Revenues

The following provides the changes in revenues for the Servicing segment:

Servicing - Operational revenue increased during the three months ended March 31, 2023 as compared to 2022 primarily due to an increase in base servicing fees as a result of a larger servicing UPB portfolio in 2023, partially offset by a decrease in other ancillary revenue as a result of greater early payoff and default fees from acquisitions in 2022, and higher early-buyout and re-delivery volume in 2022.

MSR amortization decreased during the three months ended March 31, 2023 as compared to 2022, primarily due to lower prepayments driven by higher mortgage rates in 2023, partially offset by a higher average MSR UPB and higher average MSR fair value.

The change in MSR MTM during the three months ended March 31, 2023 compared to 2022, was primarily driven by decrease in mortgage rates in 2023 compared to an increase in mortgage rates in 2022 for the same period, which increased prepayment speeds and resulted in a decrease in fair value of the MSR.

Subservicing - There were no material changes for Subservicing fees during the three months ended March 31, 2023 as compared to 2022.

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Servicing Segment Expenses

Total expenses increased during the three months ended March 31, 2023 as compared to 2022, primarily driven by an increase in corporate and other general and administrative expenses and salaries, wages and benefits. Corporate and other general and administrative expenses increased as compared to the same period in 2022 as a result of increased general and administrative expenses primarily due to growth in our servicing portfolio and an increase in allocated cost in 2023 primarily due to a higher percentage of total headcount in Servicing following the workforce reduction in the Originations segment in 2022. The increase in salaries, wages and benefits was primarily driven by higher headcount due to growth of our servicing portfolio.

Servicing Segment Other Income (Expenses), net

Total other income (expenses), net changed during the three months ended March 31, 2023 as compared to 2022, primarily due to higher interest income earned on custodial balances attributable to higher interest rates, partially offset by higher interest expense from MSR and advance financing.

Table 5. Servicing Portfolio - Unpaid Principal Balances

								Three Months Ended March 31,
								2023		2022
Average UPB
MSRs								$	412,777	$	356,092
Subservicing and other(1)								447,841		393,120
Total average UPB								$	860,618	$	749,212
	March 31, 2023					March 31, 2022
	UPB		Carrying Amount		bps	UPB		Carrying Amount		bps
MSRs
Agency	$	382,368	$	6,258	164	$	377,225	$	5,635	149
Non-agency	30,070		308		102	34,615		371		107
Total MSRs	412,438		6,566		159	411,840		6,006		146
Subservicing and other(1)
Agency	419,399		N/A			372,080		N/A
Non-agency	20,712		N/A			11,879		N/A
Total subservicing and other	440,111		N/A			383,959		N/A
Total ending balance	$	852,549	$	6,566		$	795,799	$	6,006
MSRs UPB Encumbrance								March 31, 2023		March 31, 2022
MSRs - unencumbered								$	331,323	$	291,167
MSRs - encumbered(2)								81,115		120,673
MSRs UPB								$	412,438	$	411,840

(1)Subservicing and other includes (i) loans we service for others, (ii) residential mortgage loans originated but have yet to be sold, and (iii) agency REO balances for which we own the mortgage servicing rights. Our subservicing and other portfolio UPB increased in 2023 primarily due to acquisitions, where we assumed subservicing contracts, and portfolio growth from our subservicing clients.

(2)The encumbered MSRs consist of residential mortgage loans included within our excess spread financing transactions and MSR financing liability. The decrease in encumbered MSRs as of March 31, 2023 is primarily due to the fact that in June 2022, we entered into an assignment agreement with an investor to repurchase excess spread liabilities for a total purchase price of $277.

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The following tables provide a rollforward of our MSR and subservicing and other portfolio UPB:

Table 6. Servicing and Subservicing and Other Portfolio UPB Rollforward

	Three Months Ended March 31, 2023						Three Months Ended March 31, 2022
	MSR		Subservicing and Other		Total		MSR		Subservicing and Other		Total
Balance - beginning of period	$	411,382	$	459,053	$	870,435	$	339,208	$	370,520	$	709,728
Additions:
Originations	2,731		—		2,731		10,610		—		10,610
Acquisitions / Increase in subservicing(1)	8,045		21,097		29,142		79,386		36,471		115,857
Deductions:
Dispositions	(985)		(32,222)		(33,207)		(19)		(4,988)		(5,007)
Principal reductions and other	(4,086)		(3,846)		(7,932)		(3,567)		(3,368)		(6,935)
Voluntary reductions(2)	(4,270)		(3,802)		(8,072)		(13,606)		(14,656)		(28,262)
Involuntary reductions(3)	(338)		(169)		(507)		(105)		(20)		(125)
Net changes in loans serviced by others	(41)		—		(41)		(67)		—		(67)
Balance - end of period	$	412,438	$	440,111	$	852,549	$	411,840	$	383,959	$	795,799

(1)Includes transfers to/from Subservicing and Other.

(2)Voluntary reductions are related to loan payoffs by customers.

(3)Involuntary reductions refer to loan chargeoffs.

The table below summarizes the overall performance of the servicing and subservicing portfolio:

Table 7. Key Performance Metrics - Servicing and Subservicing Portfolio(1)

	March 31, 2023			March 31, 2022
Loan count(2)	4,078,443			3,873,434
Average loan amount(3)	$	209,042		$	205,452
Average coupon - agency	3.6		%	3.5		%
Average coupon - non-agency	4.7		%	4.3		%
60+ delinquent (% of loans)(4)	2.4		%	2.5		%
90+ delinquent (% of loans)(4)	2.1		%	2.2		%
120+ delinquent (% of loans)(4)	1.9		%	2.0		%
	Three Months Ended March 31,
	2023			2022
Total prepayment speed (12-month constant prepayment rate)	4.1		%	14.8		%

(1)Characteristics and key performance metrics of our servicing portfolio exclude UPB, and loan counts acquired but not yet boarded and currently serviced by others.

(2)As of March 31, 2023 and 2022, loan count includes 32,212 and 46,444 loans in forbearance related to the CARES Act, respectively.

(3)Average loan amount is presented in whole dollar amounts.

(4)Loan delinquency is based on the current contractual due date of the loan. In the case of a completed loan modification, delinquency is based on the modified due date of the loan. Loan delinquency includes loans in forbearance.

Delinquency is an assumption in determining the mark-to-market adjustment and is a key indicator of MSR portfolio performance. Delinquent loans contribute to lower MSR values due to higher costs to service and increased carrying costs of advances.

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Table 8. MSRs Loan Modifications and Workout Units

	Three Months Ended March 31,
	2023	2022	Change
Modifications(1)	5,264	18,417	(13,153)
Workouts(2)	11,089	14,081	(2,992)
Total modifications and workout units	16,353	32,498	(16,145)

(1)Modifications consist of agency programs, including forbearance options under the CARES Act, designed to adjust the terms of the loan (e.g., reduced interest rates).

(2)Workouts consist of other loss mitigation options designed to assist borrowers and keep them in their homes, but do not adjust the terms of the loan. Workouts exclude loans which did not miss a contractual payment during forbearance related to the CARES Act.

Total modifications during the three months ended March 31, 2023 decreased compared to 2022 primarily due to a decrease in modifications related to loans impacted by the COVID-19 pandemic. Total workouts during the three months ended March 31, 2023 decreased compared to 2022 primarily due to a decrease in customers who were exiting forbearance plans, as there were fewer customers in forbearance.

Servicing Portfolio and Liabilities

The following table sets forth the activities of MSRs:

Table 9. MSRs - Fair Value Rollforward

	Three Months Ended March 31,
	2023		2022
Fair value - beginning of period	$	6,654	$	4,223
Additions:
Servicing retained from mortgage loans sold	54		200
Purchases of servicing rights	102		1,015
Dispositions:
Sales of servicing assets	(15)		(4)
Changes in fair value:
Due to changes in valuation inputs or assumptions used in the valuation model (MSR MTM):
Agency	(86)		776
Non-agency	(19)		22
Changes in valuation due to amortization:
Scheduled principal payments	(50)		(43)
Prepayments
Voluntary prepayments
Agency	(67)		(177)
Non-agency	(3)		(14)
Involuntary prepayments
Agency	(5)		(1)
Other changes(1)	1		9
Fair value - end of period	$	6,566	$	6,006

(1)Amounts primarily represent negative fair values reclassified from the MSR asset to reserves as underlying loans are removed from the MSR and other reclassification adjustments.    

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See Note 3, Mortgage Servicing Rights and Related Liabilities and Note 13, Fair Value Measurements, in the Notes to the Condensed Consolidated Financial Statements, for additional information regarding the range of assumptions and sensitivities related to the fair value measurement of MSRs as of March 31, 2023 and December 31, 2022.

Excess Spread Financing

As further disclosed in Note 3, Mortgage Servicing Rights and Related Liabilities, in the Notes to the Condensed Consolidated Financial Statements, we have entered into sale and assignment agreements treated as financing arrangements whereby the acquirer has the right to receive a specified percentage of the excess cash flow generated from an MSR. In June 2022, the Company entered into an assignment agreement to repurchase excess spread liabilities for a total purchase price of $277.

The servicing fees associated with an MSR can be segregated into (i) a base servicing fee and (ii) an excess servicing fee. The base servicing fee, along with ancillary income and other revenues, is designed to cover costs incurred to service the specified pool plus a reasonable margin. The remaining servicing fee is considered excess. We sell a percentage of the excess fee as a method for efficiently financing acquired MSRs and the purchase of loans. We do not currently utilize these transactions as a primary source of financing due to the availability of lower cost sources of funding.

Excess spread financings are recorded at fair value, and the impact of fair value adjustments on future revenues and capital resources varies primarily due to prepayment speeds and discount rates. See Note 3, Mortgage Servicing Rights and Related Liabilities and Note 13, Fair Value Measurements, in the Notes to the Condensed Consolidated Financial Statements, for additional information regarding the range of assumptions and sensitivities related to the measurement of the excess spread financing liability as of March 31, 2023 and December 31, 2022.

The following table sets forth the change in the excess spread financing:

Table 10. Excess Spread Financing - Rollforward

	Three Months Ended March 31,
	2023		2022
Fair value - beginning of period	$	509	$	768
Additions:
New financings	—		—
Deductions:
Repayments	(4)		—
Settlements	(18)		(32)
Changes in fair value:
Agency	4		73
Non-agency	—		6
Fair value - end of period	$	491	$	815

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Originations Segment

The strategy of our Originations segment is to originate or acquire new MSRs for our servicing portfolio at a more attractive cost than purchasing MSRs in bulk transactions and to retain our existing customers by providing them with attractive refinance and purchase options. The Originations segment plays a strategically important role because its profitability is typically counter cyclical to that of the Servicing segment. Furthermore, by originating or acquiring MSRs at a more attractive cost than would be the case in bulk MSR acquisitions, the Originations segment improves our overall profitability and cash flow. Our Originations segment is one way that we help underserved consumers access the financial markets. In the three months ended March 31, 2023, our total originations included loans for 2,009 customers with low FICOs (<660), 2,624 customers with income below the U.S. median household income, 2,487 first-time homebuyers, and 881 veterans. During this time period, we originated a total of 2,913 Ginnie Mae loans, which are designed for first-time homebuyers and low- and moderate-income borrowers, comprising $1 billion in total proceeds. Once these loans are originated, the underserved borrowers become our servicing customers.

The Originations segment includes two channels:

•Our direct-to-consumer (“DTC”) lending channel relies on our call centers, website and mobile apps, specially trained teams of licensed mortgage originators, predictive analytics and modeling utilizing proprietary data from our servicing portfolio to reach our existing customers who may benefit from a new mortgage. Depending on borrower eligibility, we will refinance existing loans into conventional, government or non-agency products. Through lead campaigns and direct marketing, the direct-to-consumer channel seeks to convert leads into loans and ultimately MSRs in a cost-efficient manner.

•Our correspondent lending channel facilitates the acquisition of MSRs through purchasing newly originated residential mortgage loans that have been underwritten to investor guidelines. This includes both conventional and government-insured loans that qualify for inclusion in securitizations that are guaranteed by the GSEs. Our correspondent lending channel enables us to replenish servicing portfolio run-off typically at a better rate of return than traditional bulk acquisitions.

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The following tables set forth the results of operations for the Originations segment:

Table 11. Originations Segment Results of Operations

	Three Months Ended March 31,
	2023			2022			Change
Revenues
Service related, net - Originations(1)	$	11		$	42		$	(31)
Net gain on mortgage loans held for sale
Net gain on loans originated and sold(2)	18			119			(101)
Capitalized servicing rights(3)	51			163			(112)
Total net gain on mortgage loans held for sale	69			282			(213)
Total revenues	80			324			(244)
Expenses
Salaries, wages and benefits	34			121			(87)
General and administrative
Loan origination expenses	7			20			(13)
Corporate and other general administrative expenses	9			17			(8)
Marketing and professional service fees	4			12			(8)
Depreciation and amortization	2			4			(2)
Total general and administrative	22			53			(31)
Total expenses	56			174			(118)
Other income (expenses)
Interest income	6			17			(11)
Interest expense	(7)			(12)			5
Total other (expenses) income, net	(1)			5			(6)
Income before income tax expense	$	23		$	155		$	(132)
Weighted average note rate - mortgage loans held for sale	6.1		%	3.4		%	2.7		%
Weighted average cost of funds - warehouse facilities (excluding facility fees)	6.3		%	1.9		%	4.4		%

(1)Service related, net - Originations refers to fees collected from customers for originated loans and from other lenders for loans purchased through the correspondent channel, and includes loan application, underwriting and other similar fees.

(2)Net gain on loans originated and sold (excluding capitalized servicing rights) represents the unrealized and realized gains and losses from the origination, purchase, and sale of loans as well as the unrealized and realized gains and losses from related derivative instruments. Gains from the origination and sale of loans are affected by the volume and margin of our originations activity which can vary based upon mortgage interest rates.

(3)Capitalized servicing rights represent the fair value attributed to mortgage servicing rights at the time in which they are retained in connection with the sale of loans during the period.

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Table 12. Originations - Key Metrics

	Three Months Ended March 31,
	2023			2022			Change
Key Metrics
Consumer direct lock pull through adjusted volume(1)	$	1,457		$	6,746		$	(5,289)
Other locked pull through adjusted volume(1)	1,588			3,586			(1,998)
Total pull through adjusted lock volume	$	3,045		$	10,332		$	(7,287)
Funded volume(2)	$	2,739		$	11,573		$	(8,834)
Volume of loans sold	$	2,872		$	13,690		$	(10,818)
Recapture percentage(3)	24.3%			37.4%			(13.1)%
Refinance recapture percentage(4)	75.8%			50.3%			25.5%
Purchase as a percentage of funded volume	52.4%			22.7%			29.7%
Value of capitalized servicing on retained settlements	214 bps			167 bps			47 bps
Originations Margin
Revenue	$	80		$	324		$	(244)
Pull through adjusted lock volume	$	3,045		$	10,332		$	(7,287)
Revenue as a percentage of pull through adjusted lock volume(5)	2.63		%	3.14		%	(0.51)		%
Expenses(6)	$	57		$	169		$	(112)
Funded volume	$	2,739		$	11,573		$	(8,834)
Expenses as a percentage of funded volume(7)	2.08		%	1.46%			0.62		%
Originations Margin	0.55		%	1.68		%	(1.13)		%

(1)Pull through adjusted volume represents the expected funding from locks taken during the period.

(2)Funded volume for the period could include pull through adjusted lock volume from prior periods.

(3)Recapture percentage includes new loan originations for both purchase and refinance transactions where borrower retention and/or property retention occur as a result of a loan payoff from our servicing portfolio. Excludes loans we are contractually unable to solicit.

(4)Refinance recapture percentage includes new loan originations for refinance transactions where borrower retention and property retention occurs as a result of a loan payoff from our servicing portfolio. Excludes loans we are contractually unable to solicit.

(5)Calculated on pull-through adjusted lock volume as revenue is recognized at the time of loan lock.

(6)Expenses include total expenses and total other income (expenses), net.

(7)Calculated on funded volume as expenses are incurred based on closing of the loan.

Originations Segment Revenues

Total revenues decreased during the three months ended March 31, 2023 compared to 2022 primarily driven by lower originations volume in 2023 that resulted in a decrease in capitalized servicing rights and a decline in net gain on loans originated and sold.

Originations Segment Expenses

Total expenses during the three months ended March 31, 2023 decreased when compared to 2022 primarily due to a decline in salaries, wages and benefits expense, and loan origination expenses. Salaries, wages and benefits expense declined in 2023 primarily due to decreased headcount and lower originations volumes in both the direct-to-consumer and correspondent channels. Loan origination expenses declined in 2023 primarily due to cost reduction initiatives in connection with decreased origination volumes.

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Originations Segment Other (Expenses) Income, Net

Interest income relates primarily to mortgage loans held for sale. Interest expense is associated with the warehouse facilities utilized to finance newly originated loans. Due to decreased originations volume, both interest income and interest expense declined, partially offset by higher interest rates, resulting in immaterial changes for total other (expenses) income, net, during the three months ended March 31, 2023 as compared to 2022.

Originations Margin

The Originations Margin for the three months ended March 31, 2023 decreased as compared to 2022 primarily due to a higher ratio of expenses as a percentage of funded volume driven by lower funded volume due to higher mortgage rates in 2023 and lower revenue as a percentage of pull through adjusted lock volume driven by lower margins from a shift in channel mix from direct-to-consumer to correspondent. Direct-to-consumer channel mix was 48% and 65% for the three months ended March 31, 2023, and 2022, respectively.

Corporate/Other

Corporate/Other includes the results of Xome’s operations, the Company’s unallocated overhead expenses (which include the costs of executive management and other corporate functions that are not directly attributable to our operating segments), changes in equity investments and interest expense on our unsecured senior notes. In addition, Corporate/Other includes eliminations related to intersegment hedge fair value changes.

The following table set forth the selected financial results for Corporate/Other:

Table 13. Corporate/Other Selected Financial Results

	Three Months Ended March 31,
	2023		2022		Change
Corporate/Other - Operations
Total revenues	$	19	$	12	$	7
Total expenses	52		42		10
Interest expense	40		40		—
Other (expense) income, net	(9)		222		(231)
Key Metrics
Average exchange inventory under management	25,631		14,170		11,461

Total revenues increased during the three months ended March 31, 2023 as compared to 2022 primarily due to transition services provided to Sagent after the sale of servicing platform to Sagent, which began in the second quarter of 2022. Total expenses increased in 2023 primarily due to an increase in allocated costs in 2023, driven by higher percentage of total headcount in Corporate/Other in 2023 following the workforce reduction in the Originations segment in 2022.

The change in other (expense) income, net, in the three months ended March 31, 2023 as compared to 2022 was primarily due to a gain of $223 that was recorded in the first quarter of 2022 upon completion of the Sagent Transaction.

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Liquidity and Capital Resources

We measure liquidity by unrestricted cash and availability of collateralized borrowing capacity on our MSR and other debt facilities. We held cash and cash equivalents on hand of $534 as of March 31, 2023 compared to $527 as of December 31, 2022. During the three months ended March 31, 2023, we generated net cash of $160 from operating activities and bought back 2.1 million shares of our outstanding common stock for a total cost of $89 as part of our stock repurchase program. We have sufficient borrowing capacity to support our operations. As of March 31, 2023, total available borrowing capacity for advance, warehouse, and MSR facilities was $10,800, of which $1,586 was collateralized and immediately available to draw. During the three months ended March 31, 2023, we increased capacity on our MSR facilities by $400. Subsequent to quarter end, we finalized the following capacity changes for MSR facilities:

MSR Facilities	Maturity	Capacity as of March 31, 2023		New Capacity		$ Change
$600 warehouse facility	April 2025	$	600	$	1,000	$	400
$500 warehouse facility	September 2024	500		750		250
$500 warehouse facility	April 2025	—		500		500
MSR facilities capacity amount		$	1,100	$	2,250	$	1,150

In March 2023, Silicon Valley Bank and Signature Bank were closed and taken over by the Federal Deposit Insurance Corporation (the “FDIC”), which created significant market disruption and uncertainty for businesses who bank with those institutions, and raised significant concern regarding the stability of the banking system in the United States, in particular with respect to regional banks. Our corporate cash accounts and Principal & Interest (P&I) accounts are held in money center and global investment banks and Tax & Insurance (T&I) accounts where the underlying borrowers are fully insured by the FDIC are held in insured deposit accounts at a mix of money center, global investments and regional banks.

We have increased the target hedge ratio on our MSR hedge position from 25% of the net duration risk in our MSR portfolio at year-end 2022 to a target of 75% as of March 31, 2023, with the goal of mitigating the risk to capital and tangible book value in a declining interest rate environment.

There have been no significant changes to our sources and uses of cash as disclosed in our Annual Reports on Form 10-K for the year ended December 31, 2022.

Cash Flows

The table below presents cash flows information:

Table 14. Cash Flows

	Three Months Ended March 31,
	2023		2022		Change
Net cash attributable to:
Operating activities	$	160	$	926	$	(766)
Investing activities	(107)		(964)		857
Financing activities	(88)		(294)		206
Net decrease in cash, cash equivalents, and restricted cash	$	(35)	$	(332)	$	297

Operating activities

Cash generated from operating activities decreased to $160 during the three months ended March 31, 2023 from $926 in 2022. The decrease was primarily due to a decrease of $2,702 in cash generated from originations net sales activities driven by higher mortgage rates, partially offset by a decrease of $2,027 in cash used for the repurchase of loan assets out of Ginnie Mae securitizations.

Investing activities

Cash used in investing activities decreased to $107 during the three months ended March 31, 2023 from $964 in 2022. The decrease was primarily due to a decrease of $851 in cash used for the purchase of mortgage servicing rights in 2023.

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Financing activities

Cash used in financing activities decreased to $88 during the three months ended March 31, 2023 from $294 in 2022. The decrease was primarily due to a net borrowing of $51 in 2023 compared to net repayment of $204 in 2022 on our advance and warehouse facilities, partially offset by an increase of $54 in cash used for the repurchase of common stock.

Capital Resources

Capital Structure and Debt

We require access to external financing resources from time to time depending on our cash requirements, assessments of current and anticipated market conditions and after-tax cost of capital. If needed, we believe additional capital could be raised through a combination of issuances of equity, corporate indebtedness, asset-backed acquisition financing and/or cash from operations. Our access to capital markets can be impacted by factors outside our control, including economic conditions.

Financial Covenants

Our credit facilities contain various financial covenants, which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements, which are measured at our operating subsidiary, Nationstar Mortgage LLC. As of March 31, 2023, we were in compliance with our required financial covenants.

Seller/Servicer Financial Requirements

We are also subject to net worth, liquidity and capital ratio requirements established by the Federal Housing Finance Agency (“FHFA”) for Fannie Mae and Freddie Mac (“Enterprises”) Seller/Servicers, and Ginnie Mae for single family issuers, as summarized below. These requirements apply to our operating subsidiary, Nationstar Mortgage, LLC.

Minimum Net Worth

•FHFA - a net worth base of $2.5 plus 25 basis points of outstanding UPB for total loans serviced.

•Ginnie Mae - a net worth equal to the sum of base of $2.5 plus 35 basis points of the issuer’s total single-family effective outstanding obligations.

Minimum Liquidity

•FHFA - 3.5 basis points of total Agency Mortgage Servicing UPB plus incremental 200 basis points of total nonperforming Agency, measured at 90+ delinquencies, servicing in excess of 6% total Agency servicing UPB.

•Ginnie Mae - the greater of $1 or 10 basis points of our outstanding single-family MBS.

Minimum Capital Ratio

•FHFA and Ginnie Mae - a ratio of Tangible Net Worth to Total Assets greater than 6%.

Secured Debt to Gross Tangible Asset Ratio

•Ginnie Mae - a secured debt to gross tangible asset ratios no greater than 60%.

As of March 31, 2023, we were in compliance with our seller/servicer financial requirements for FHFA and Ginnie Mae.

In 2022, the FHFA and Ginnie Mae revised its Seller/Servicers and single-family issuers minimum financial eligibility requirements. All revisions are effective in 2023 or 2024, as summarized below. The Company is currently evaluating the impact of the revised requirements and does not anticipate the revised requirements to have significant impact on its ability to meet financial eligibility requirements.

Minimum Net Worth (effective September 30, 2023)

•FHFA – a net worth base of $2.5 plus a dollar amount equal to or exceeding the sum of (i) 25 basis points of the sellers/servicer’s residential first lien mortgage servicing UPB, serviced for the Enterprises, plus (ii) 25 basis points of non-agency serviced UPB, plus (iii) 35 basis points of the sellers/servicer’s residential first lien mortgage servicing UPB serviced for Ginnie Mae.

•Ginnie Mae – a net worth equal to the sum of $2.5, plus (i) 35 basis points of the issuer’s total effective Ginnie Mae single-family outstanding obligations, plus (ii) 25 basis points of the issuer’s total Enterprises single family outstanding servicing portfolio balance, plus (iii) 25 basis points of the issuer’s total non-agency single family servicing portfolio.

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Minimum Liquidity Requirements (effective September 30, 2023)

•FHFA - a base Liquidity of eligible assets equal to or exceeding:

◦7 basis points of sellers/servicer’s residential first lien mortgage servicing UPB serviced for the Enterprises, if the seller/servicer remits (or an Enterprise draws) interest or principal, or both, as scheduled, regardless of whether principal or interest has been collected from the borrower, plus

◦3.5 basis points of the sellers/servicer’s residential first lien mortgage servicing UPB serviced for the Enterprises, if the seller/servicer remits (or an Enterprise draws) the interest and principal only as actually collected from the borrower, plus

◦3.5 basis points of the seller/servicer’s non-agency servicing UPB, plus

◦10 basis points of the seller/servicer’s residential first lien mortgage servicing UPB serviced for Ginnie Mae.

◦In addition, an origination liquidity equal to or exceeding 50 basis points of the sum of the following (effective December 31, 2023):

i.Residential first lien mortgages held for sale, at lower of cost or market

ii.Residential first lien mortgages held for sale, at fair value, plus

iii.UPB of interest rate lock commitments after fallout adjustments

◦Supplemental liquidity at all time equal to or exceeding the sum of (effective December 31, 2023):

i.2 basis points of the sellers/servicer’s residential mortgage servicing UPB serviced for the Enterprises, plus

ii.5 basis points of the sellers/servicer’s residential mortgage servicing UPB serviced for Ginnie Mae

•Ginnie Mae – the greater of $1 or the sum of:

◦10 basis points of the issuer’s outstanding Ginnie Mae single-family servicing UPB, plus

◦3.5 basis points of the issuer’s outstanding Enterprises single family servicing UPB, if the issuer remits (or the Enterprise draws) the principal and interest only as actually collected from the borrower, plus

◦7 basis points of the Issuer’s outstanding Enterprises single-family servicing UPB, if the issuer remits (or the Enterprise draws) the principal or interest, or both, as scheduled, regardless of whether principal or interest has been collected from the borrower, plus

◦3.5 basis points of the issuer’s outstanding non-agency single-family servicing UPB.

•Ginnie Mae - issuers that originated more than $1 billion in UPB of any residential first mortgage in the recent four-quarter period must have liquid assets equal to the greater of at least $1 or the sum of the points listed immediately above, plus (effective December 31, 2023):

◦50 basis points of loans held for sale, plus

◦50 basis points of the issuer’s UPB of IRLCs after fallout adjustments

Capital Requirements (effective December 31, 2024)

•Ginnie Mae – a Risk-based Capital Ratio (“RBCR”) of at least 6%. RBCR is adjusted net worth less excess MSRs divided by total risked-based assets.

Financial Reporting Requirements (effective December 31, 2023)

•FHFA – must obtain an assessment of the seller/servicer’s performance and creditworthiness by a qualified, independent third party on an annual basis and meet the following criteria:

◦One primary servicer rating or master servicer rating, as applicable for large non-depository institutions that have greater than or equal to $50 billion in servicing UPB, and

◦One primary servicer rating or master servicer rating, as applicable, and one third party long-term senior unsecured debt rating or long-term corporate family rating, for large non-depository institutions that have greater than $100 billion in servicing UPB, and

◦One primary servicer rating or master servicer rating, as applicable, and issued by two rating agencies, each of which must issue either a third party long-term unsecured debt rating or long-term corporate family rating for large non-depository institutions that have greater than or equal to $150 billion in servicing UPB.

Since our Ginnie Mae single-family servicing portfolio exceeds $75 billion in UPB, we are also required to obtain an external primary servicer rating and issuer credit ratings from two different rating agencies and receive a minimum rating of a B or its equivalent. We met this requirement for all financial periods presented.

In addition, Fannie Mae or Freddie Mac may require capital ratios in excess of stated requirements. Refer to Note 14, Capital Requirements, in the Notes to the Condensed Consolidated Financial Statements for additional information.

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Table 15. Debt

	March 31, 2023		December 31, 2022
Advance facilities principal amount	$	642	$	669
Warehouse facilities principal amount	865		817
MSR facilities principal amount	1,440		1,410
Unsecured senior notes principal amount	2,700		2,700

Advance Facilities

As part of our normal course of business, we borrow money to fund servicing advances. Our servicing agreements require that we advance our own funds to meet contractual principal and interest payments for certain investors, and to pay taxes, insurance, foreclosure costs and various other items that are required to preserve the assets being serviced. Delinquency rates and prepayment speeds affect the size of servicing advance balances, and we exercise our ability to stop advancing principal and interest where the pooling and servicing agreements permit, where the advance is deemed to be non-recoverable from future proceeds. These servicing requirements affect our liquidity. We rely upon several counterparties to provide us with financing facilities to fund a portion of our servicing advances. As of March 31, 2023, we had a total borrowing capacity of $975, of which we could borrow an additional $333.

Warehouse and MSR Facilities

Loan origination activities generally require short-term liquidity in excess of amounts generated by our operations. The loans we originate are financed through several warehouse lines on a short-term basis. We typically hold the loans for approximately 30 days and then sell or place the loans in government securitizations in order to repay the borrowings under the warehouse lines. Our ability to fund current operations depends upon our ability to secure these types of short-term financings on acceptable terms and to renew or replace the financings as they expire. Our MSR facilities provide financing for our servicing portfolio and investments. As of March 31, 2023, we had a total borrowing capacity of $6,725 and $3,100 for warehouse and MSR facilities, of which we could borrow an additional $5,860 and $1,660, respectively.

Unsecured Senior Notes

In 2020 and 2021, we completed offerings of unsecured senior notes with maturity dates ranging from 2027 to 2031. We pay interest semi-annually to the holders of these notes at interest rates ranging from 5.125% to 6.000%. For more information regarding our indebtedness, see Note 9, Indebtedness, in the Notes to the Condensed Consolidated Financial Statements.

Contractual Obligations

As of March 31, 2023, no material changes to our outstanding contractual obligations were made from the amounts previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022.

Critical Accounting Policies and Estimates

Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments. In particular, we have identified the following policies that, due to the judgment, estimates and assumptions inherent in those policies, are critical to an understanding of our condensed consolidated financial statements. These policies relate to fair value measurements, particularly those determined to be Level 3 as discussed in Note 13, Fair Value Measurements, in the Notes to the Condensed Consolidated Financial Statements and valuation and realization of deferred tax assets. We believe that the judgment, estimates and assumptions used in the preparation of our condensed consolidated financial statements are appropriate given the factual circumstances at the time. However, given the sensitivity of these critical accounting policies on our condensed consolidated financial statements, the use of other judgments, estimates and assumptions could result in material differences in our results of operations or financial condition. Fair value measurements considered to be Level 3 representing estimated values based on significant unobservable inputs primarily include (i) the valuation of MSRs, and (ii) the valuation of excess spread financing. For further information on our critical accounting policies and estimates, please refer to the Company’s Annual Reports on Form 10-K for the year ended December 31, 2022. There have been no material changes to our critical accounting policies and estimates since December 31, 2022.

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Other Matters

Recent Accounting Developments

Below lists recently issued accounting pronouncements applicable to us but not yet adopted.

Accounting Standards Update 2020-04, 2021-01 and 2022-06, collectively implemented as Accounting Standards Codification Topic 848 (“ASC 848”), Reference Rate Reform provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contract modifications, hedge accounting and other transactions affected by the transitioning away from reference rates that are expected to be discontinued, such as interbank offered rates and the London Inter-Bank Offered Rate (“LIBOR”). If LIBOR ceases to exist or if the methods of calculating LIBOR change from current methods for any reasons, interest rates on our floating rate loans, obligation derivatives, and other financial instruments tied to LIBOR rates, may be affected and need renegotiation with its lenders. In January 2021, ASU 2021-01 was issued to clarify that all derivative instruments affected by changes to the interest rates used for discounting, margining alignment due to reference rate reform are in scope of ASC 848. In December 2022, ASU 2022-06 was issued to defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. The guidance was effective upon issuance and may be applied prospectively to contract modifications, existing hedging relationships and other impacted transactions through December 31, 2024. The guidance in ASU 2020-04 and ASU 2021-01 is optional and may be elected over time as reference rate reform activities occur. At present, the Company has limited exposure to LIBOR based index rates. Due to the short-term maturities of the Company’s advance and warehouse facilities, substantially all the Company’s facilities have matured and transitioned away from LIBOR to alternative reference rates in 2022 when renewed. In addition, our derivative financial instruments are not tied to LIBOR rates. The Company does not expect ASU 2020-04 and ASU 2021-01 to have material impact on our condensed consolidated financial statements.

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GLOSSARY OF TERMS

This Glossary of Terms defines some of the terms that are used throughout this report and does not represent a complete list of all defined terms used.

Advance Facility. A secured financing facility to fund advance receivables which is backed by a pool of mortgage servicing advance receivables made by a servicer to a certain pool of mortgage loans.

Agency. Government entities guaranteeing the mortgage investors that the principal amount of the loan will be repaid; the Federal Housing Administration, the Department of Veterans Affairs, the US Department of Agriculture and Ginnie Mae (and collectively, the “Agencies”)

Agency Conforming Loan.  A mortgage loan that meets all requirements (loan type, maximum amount, LTV ratio and credit quality) for purchase by Fannie Mae, Freddie Mac, or insured by the FHA, USDA or guaranteed by the VA or sold into Ginnie Mae.

Asset-Backed Securities (“ABS”). A financial security whose income payments and value is derived from and collateralized (or “backed”) by a specified pool of underlying receivables or other financial assets.

Bulk acquisitions or purchases. MSR portfolio acquired on non-retained basis through an open market bidding process.

Base Servicing Fee.  The servicing fee retained by the servicer, expressed in basis points, in an excess MSR arrangement in exchange for the provision of servicing functions on a portfolio of mortgage loans, after which the servicer and the co-investment partner share the excess fees on a pro rata basis.

Client. Owner of the underlying mortgage servicing rights on behalf of whom we service loans.

Conventional Mortgage Loans.  A mortgage loan that is not guaranteed or insured by the FHA, the VA or any other government agency. Although a conventional loan is not insured or guaranteed by the government, it can still follow the guidelines of GSEs and be sold to the GSEs.

Correspondent lender, lending channel or relationship.  A correspondent lender is a lender that funds loans in their own name and then sells them off to larger mortgage lenders. A correspondent lender underwrites the loans to the standards of an investor and provides the funds at close.

Customer. Residential mortgage borrower.

Delinquent Loan. A mortgage loan that is 30 or more days past due from its contractual due date.

Department of Veterans Affairs (“VA”).  The VA is a cabinet-level department of the U.S. federal government, which guarantees certain home loans for qualified borrowers eligible for securitization with GNMA.

Direct-to-consumer originations (“DTC”).  A type of mortgage loan origination pursuant to which a lender markets refinancing and purchase money mortgage loans directly to selected consumers through telephone call centers, the Internet or other means.

Excess Servicing Fees.  In an excess MSR arrangement, the servicing fee cash flows on a portfolio of mortgage loans after payment of the base servicing fee.

Excess Spread.  MSRs with a co-investment partner where the servicer receives a base servicing fee and the servicer and co-investment partner share the excess servicing fees. This co-investment strategy reduces the required upfront capital from the servicer when purchasing or investing in MSRs.

Exchange inventory. Consists of Xome’s residential real estate inventory ranging from pre-foreclosure to bank-owned properties.

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Federal National Mortgage Association (“Fannie Mae” or “FNMA”). FNMA was federally chartered by the U.S. Congress in 1938 to support liquidity, stability, and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. Fannie Mae buys mortgage loans from lenders and resells them as mortgage-backed securities in the secondary mortgage market.

Federal Housing Administration (“FHA”).  The FHA is a U.S. federal government agency within the Department of Housing and Urban Development (HUD). It provides mortgage insurance on loans made by FHA-approved lenders in compliance with FHA guidelines throughout the United States.

Federal Housing Finance Agency (“FHFA”).  A U.S. federal government agency that is the regulator and conservator of Fannie Mae and Freddie Mac and the regulator of the 12 Federal Home Loan Banks.

Federal Home Loan Mortgage Corporation (“Freddie Mac” or “FHLMC”).  Freddie Mac was chartered by Congress in 1970 to stabilize the nation’s residential mortgage markets and expand opportunities for homeownership and affordable rental housing. Freddie Mac participates in the secondary mortgage market by purchasing mortgage loans and mortgage-related securities for investment and by issuing guaranteed mortgage-related securities.

Forbearance. An agreement between the mortgage servicer or lender and borrower for a temporary postponement of mortgage payments. It is a form of repayment relief granted by the lender or creditor in lieu of forcing a property into foreclosure.

Government National Mortgage Association (“Ginnie Mae” or “GNMA”). GNMA is a self-financing, wholly owned U.S. Government corporation within HUD. Ginnie Mae guarantees the timely payment of principal and interest on MBS backed by federally insured or guaranteed loans - mainly loans insured by the FHA or guaranteed by the VA. Ginnie Mae securities are the only MBS to carry the full faith and credit guarantee of the U.S. federal government.

Government-Sponsored Enterprise (“GSE”).  Certain entities established by the U.S. Congress to provide liquidity, stability and affordability in residential housing. These agencies are Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.

Interest Rate Lock Commitments (“IRLC”). Agreements under which the interest rate and the maximum amount of the mortgage loan are set prior to funding the mortgage loan.

Investors. Our investors include agency investors and non-agency investors. Agency investors primarily consist of Government National Mortgage Association (“Ginnie Mae” or “GNMA”) and the GSEs, Federal National Mortgage Association (“Fannie Mae” or “FNMA”) and Federal Home Loan Mortgage Corp (“Freddie Mac” or “FHLMC”). Non-agency investors consist of investors in private-label securitizations.

Loan Modification.  Temporary or permanent modifications to loan terms with the borrower, including the interest rate, amortization period and term of the borrower’s original mortgage loan. Loan modifications are usually made to loans that are in default, or in imminent danger of defaulting.

Loan-to-Value Ratio (“LTV”). The unpaid principal balance of a mortgage loan as a percentage of the total appraised or market value of the property that secures the loan. An LTV over 100% indicates that the UPB of the mortgage loan exceeds the value of the property.

Lock period. A set of periods of time that a lender will guarantee a specific rate is set prior to funding the mortgage loan.

Loss Mitigation.  The range of servicing activities provided by a servicer in an attempt to minimize the losses suffered by the owner of a defaulted mortgage loan. Loss mitigation techniques include short-sales, deed-in-lieu of foreclosures and loan modifications, among other options.

Mortgage-Backed Securities (“MBS”). A type of asset-backed security that is secured by a group of mortgage loans.

Mortgage Servicing Right (“MSRs”).  The right and obligation to service a loan or pool of loans and to receive a servicing fee as well as certain ancillary income. MSRs may be bought and sold, resulting in the transfer of loan servicing obligations. MSRs are designated as such when the benefits of servicing the loans are expected to adequately compensate the servicer for performing the servicing.

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MSR Facility.  A line of credit backed by mortgage servicing rights that is used for financing purposes. In certain cases, these lines may be a sub-limit of another warehouse facility or alternatively exist on a stand-alone basis. These facilities allow for same or next day draws at the request of the borrower.

Non-Conforming Loan.  A mortgage loan that does not meet the standards of eligibility for purchase or securitization by Fannie Mae, Freddie Mac or Ginnie Mae.

Originations.  The process through which a lender provides a mortgage loan to a borrower.

Prepayment Speed. The rate at which voluntary mortgage prepayments occur or are projected to occur. The statistic is calculated on an annualized basis and expressed as a percentage of the outstanding principal balance.

Primary Servicer.  The servicer that owns the right to service a mortgage loan or pool of mortgage loans. This differs from a subservicer, which has a contractual agreement with the primary servicer to service a mortgage loan or pool of mortgage loans in exchange for a subservicing fee based upon portfolio volume and characteristics.

Prime Mortgage Loan.  Generally, a high-quality mortgage loan that meets the underwriting standards set by Fannie Mae or Freddie Mac and is eligible for purchase or securitization in the secondary mortgage market. Prime Mortgage loans generally have lower default risk and are made to borrowers with excellent credit records and a monthly income at least three to four times greater than their monthly housing expenses (mortgage payments plus taxes and other debt payments) as well as significant other assets. Mortgages not classified as prime mortgage loans are generally called either sub-prime or Alt-A.

Private Label Securitizations. Securitizations that do not meet the criteria set by Fannie Mae, Freddie Mac or Ginnie Mae.

Pull through adjusted lock volume. Represents the expected funding from locks taken during the period.

Real Estate Owned (”REO”). Property acquired by the servicer on behalf of the owner of a mortgage loan or pool of mortgage loans, usually through foreclosure or a deed-in-lieu of foreclosure on a defaulted loan. The servicer or a third-party real estate management firm is responsible for selling the REO. Net proceeds of the sale are returned to the owner of the related loan or loans. In most cases, the sale of REO does not generate enough to pay off the balance of the loan underlying the REO, causing a loss to the owner of the related mortgage loan.

Recapture. Voluntarily prepaid loans that are expected to be refinanced by the related servicer.

Refinancing.  The process of working with existing borrowers to refinance their mortgage loans. By refinancing loans for borrowers we currently service, we retain the servicing rights, thereby extending the longevity of the servicing cash flows.

Servicing. The performance of contractually specified administrative functions with respect to a mortgage loan or pool of mortgage loans. Duties of a servicer typically include, among other things, collecting monthly payments, maintaining escrow accounts, providing periodic monthly statements to the borrower and monthly reports to the loan owners or their agents, managing insurance, monitoring delinquencies, executing foreclosures (as necessary), and remitting fees to guarantors, trustees and service providers. A servicer is generally compensated with a specific fee outlined in the contract established prior to the commencement of the servicing activities.

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Servicing Advances.  In the course of servicing loans, servicers are required to make advances that are reimbursable from collections on the related mortgage loan or pool of loans. There are typically three types of servicing advances: P&I Advances, T&I Advances and Corporate Advances.

(i) P&I Advances cover scheduled payments of principal and interest that have not been timely paid by borrowers. P&I Advances serve to facilitate the cash flows paid to holders of securities issued by the residential MBS trust. The servicer is not the insurer or guarantor of the MBS and thus has the right to cease the advancing of P&I, when the servicer deems the next advance nonrecoverable. 

(ii) T&I Advances pay specified expenses associated with the preservation of a mortgaged property or the liquidation of defaulted mortgage loans, including but not limited to property taxes, insurance premiums or other property-related expenses that have not been timely paid by borrowers in order for the lien holder to maintain its interest in the property. 

(iii) Corporate Advances pay costs, fees and expenses incurred in foreclosing upon, preserving defaulted loans and selling REO, including attorneys’ and other professional fees and expenses incurred in connection with foreclosure and liquidation or other legal proceedings arising in the course of servicing the defaulted mortgage loans. 

Servicing Advances are reimbursed to the servicer if and when the borrower makes a payment on the underlying mortgage loan at the time the loan is modified or upon liquidation of the underlying mortgage loan but are primarily the responsibility of the investor/owner of the loan. The types of servicing advances that a servicer must make are set forth in its servicing agreement with the owner of the mortgage loan or pool of mortgage loans. In some instances, a servicer is allowed to cease Servicing Advances, if those advances will not be recoverable from the property securing the loan.

Subservicing.  Subservicing is the process of outsourcing the duties of the primary servicer to a third-party servicer. The third-party servicer performs the servicing responsibilities for a fee and is typically not responsible for making servicing advances, which are subsequently reimbursed by the primary servicer. The primary servicer is contractually liable to the owner of the loans for the activities of the subservicer.

Unpaid Principal Balance (“UPB”).  The amount of principal outstanding on a mortgage loan or a pool of mortgage loans. UPB is used together with the servicing fees and ancillary incomes as a means of estimating the future revenue stream for a servicer.

U.S. Department of Agriculture (“USDA”). The USDA is a cabinet-level department of the U.S. federal government, which guarantees certain home loans for qualified borrowers.

Warehouse Facility.  A type of line of credit facility used to temporarily finance mortgage loan originations to be sold in the secondary market. Pursuant to a warehouse facility, a loan originator typically agrees to transfer to a counterparty certain mortgage loans against the transfer of funds by the counterpart, with a simultaneous agreement by the counterpart to transfer the loans back to the originator at a date certain, or on demand, against the transfer of funds from the originator.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Refer to the discussion included in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes in the types of market risks faced by us since December 31, 2022, except that we have increased the target hedge ratio on our MSR hedge position from 25% of the net duration risk in our MSR portfolio at year-end 2022 to a target of 75% as of March 31, 2023, with the goal of mitigating the risk to capital and tangible book value in a declining interest rate environment.

Sensitivity Analysis

We assess our market risk based on changes in interest rates utilizing a sensitivity analysis. The sensitivity analysis measures the potential impact on fair values based on hypothetical changes (increases and decreases) in interest rates.

We use a duration-based model in determining the impact of interest rate shifts on our loan portfolio, certain other interest-bearing liabilities measured at fair value and interest rate derivatives portfolios. The primary assumption used in these models is that an increase or decrease in the benchmark interest rate produces a parallel shift in the yield curve across all maturities.

We utilize a discounted cash flow analysis to determine the fair value of MSRs and the impact of parallel interest rate shifts on MSRs. The discounted cash flow model incorporates prepayment speeds, discount rate, costs to service, delinquencies, ancillary revenues, recapture rates and other assumptions that management believes are consistent with the assumptions that other similar market participants use in valuing the MSRs. The key assumptions to determine fair value include prepayment speed, discount rate and cost to service. However, this analysis ignores the impact of interest rate changes on certain material variables, such as the benefit or detriment on the value of future loan originations, non-parallel shifts in the spread relationships between MBS, swaps and U.S. Treasury rates and changes in primary and secondary mortgage market spreads. For mortgage loans, IRLCs, forward delivery commitments on MBS and treasury futures, we rely on a model in determining the impact of interest rate shifts. In addition, the primary assumption used for IRLCs, is the borrower’s propensity to close their mortgage loans under the commitment.

Our total market risk is influenced by a wide variety of factors including market volatility and the liquidity of the markets. There are certain limitations inherent in the sensitivity analysis presented, including the necessity to conduct the analysis based on a single point in time and the inability to include the complex market reactions that normally would arise from the market shifts modeled.

We used March 31, 2023 market rates on our instruments to perform the sensitivity analysis. The estimates are based on the market risk sensitive portfolios described in the preceding paragraphs and assume instantaneous, parallel shifts in interest rate yield curves. These sensitivities are hypothetical and presented for illustrative purposes only. Changes in fair value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in fair value may not be linear.

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The following table summarizes the estimated change in the fair value of our assets and liabilities sensitive to interest rates as of March 31, 2023 given hypothetical instantaneous parallel shifts in the yield curve. Actual results could differ materially.

Table 16. Change in Fair Value

	March 31, 2023
	Down 25 bps		Up 25 bps
Increase (decrease) in assets
Mortgage servicing rights at fair value	$	(148)	$	139
Mortgage loans held for sale at fair value	3		(4)
Derivative financial instruments:
Interest rate lock commitments	6		(8)
Forward MBS trades	8		(8)
Treasury futures	43		(42)
Total change in assets	(88)		77
Increase (decrease) in liabilities
Mortgage servicing rights financing at fair value	(2)		2
Excess spread financing at fair value	(3)		3
Derivative financial instruments:
Interest rate lock commitments	(1)		1
Forward MBS trades	8		(10)
Total change in liabilities	2		(4)
Total, net change	$	(90)	$	81

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of March 31, 2023.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2023, our disclosure controls and procedures are effective. Disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the three months ended March 31, 2023, no changes in our internal control over financial reporting occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company and its subsidiaries are routinely and currently involved in a number of legal proceedings, including, but not limited to, judicial, arbitration, regulatory and governmental proceedings related to matters that arise in connection with the conduct of the Company’s business. While it is not possible to predict the outcome of any of these matters, based on the Company’s assessment of the facts and circumstances, it does not believe any of these matters, individually or in the aggregate, will have a material adverse effect on the financial position, results of operations or cash flows of the Company. See Note 15, Commitments and Contingencies, of the Notes to the Condensed Consolidated Financial Statements within Part I, Item 1. Financial Statements, of this Form 10-Q.

Item 1A. Risk Factors

There have been no material changes or additions to the risk factors previously disclosed under “Risk Factors” included in our Annual Report on Form 10-K filed for the year ended December 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In 2021, our Board of Directors authorized a stock repurchase plan that allows the repurchase of up to $700 million of our outstanding common stock. In October 2022, our Board of Directors authorized the repurchase of an additional $200 million of our outstanding common stock. During the three months ended March 31, 2023, we repurchased shares of our common stock at a total cost of $89 million under our share repurchase program. The number and average price of shares purchased are set forth in the table below:

Period	(a) Total Number of Shares (or Units) Purchased (in thousands)	(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (in thousands)	(d) Maximum Number (or Appropriate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Program (in millions)
January 2023	—	$	—	—	$	213
February 2023	534	$	46.83	534	$	188
March 2023	1,549	$	41.58	1,549	$	124
Total	2,083			2,083

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

		Incorporated by Reference
Exhibit  Number	Description	Form	File No.	Exhibit	Filing Date	Filed or Furnished Herewith
10.1	Amendment No. 3 dated as of March 30, 2023 to Loan and Security Agreement dated as of August 20, 2020 among Nationstar Mortgage LLC, as borrower, Morgan Stanley Bank, N.A., as initial lender and Morgan Stanley Mortgage Capital Holdings LLC, as administrative agent					X
10.2**	Offer Letter and Acceptance, dated January 9, 2023, by and between the Company and Carlos Pelayo					X
10.3**	Form of 2023 Performance Stock Unit Agreement					X
31.1	Certification by Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
31.2	Certification by Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X
32.1	Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
32.2	Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.					X
101.SCH	Inline XBRL Taxonomy Extension Schema Document					X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document					X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document					X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document					X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document					X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101.)					X

+     The schedules and other attachments referenced in this exhibit have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or attachment will be furnished supplementary to the Securities and Exchange Commission upon request.

**    Management, contract, compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MR. COOPER GROUP INC.
April 26, 2023	/s/ Jay Bray
Date	Jay Bray Chief Executive Officer (Principal Executive Officer)
April 26, 2023	/s/ Kurt Johnson
Date	Kurt Johnson Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-10.1

Exhibit 10.1

AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT - NATIONSTAR MORTGAGE LLC

This Amendment No. 3 to the Loan and Security Agreement (this “Amendment”) is made as of this 30th day of March, 2022, by and among NATIONSTAR MORTGAGE LLC, a Delaware limited liability company (“Borrower”), MORGAN STANLEY BANK, N.A., a national banking association, as the initial lender (together with its successors and assigns, the “Lender”) and MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, a New York limited liability company, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”), and amends that certain Loan and Security Agreement, dated as of August 20, 2020 (as amended by Amendment No. 1 thereto dated as of September 17, 2021, Amendment No. 2 thereto dated as of August 3, 2022 and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), by and among the Borrower, the Required Lenders and the Administrative Agent.

WHEREAS, the Administrative Agent, the Required Lenders and the Borrower have agreed to amend the Agreement as more particularly set forth herein.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and for the mutual covenants herein contained, the parties hereto hereby agree as follows:

SECTION 1.    Amendments to the Agreement. Effective as of the date hereof:

(a)Section 7.01 is hereby amended by deleting that subsection (g)(iv) in in its entirety and replacing such subsection with the following:

“(iv) deliver simultaneously to Ginnie Mae copies of (i) the Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 2.04(a)(iii), (ii) the Advance Verification Report or the Valuation Report delivered to the Administrative Agent pursuant to Section 2.05(a) and (iii) the Compliance Certificate delivered to the Administrative Agent pursuant to Section7.01(g)(iii);”

(b)Schedule 12.02 is hereby amended by deleting Schedule 12.02 in in its entirety and replacing such schedule with the schedule attached hereto as Exhibit A.

SECTION 2. Fees and Expenses. The Borrower agrees to pay to the Administrative Agent all reasonable, documented and invoiced out-of-pocket fees and expenses incurred by the Administrative Agent in connection with this Amendment, including all reasonable fees and out of pocket costs and expenses of the legal counsel to the Administrative Agent incurred in connection with this Amendment, in accordance with Section 12.13 of the Agreement.

SECTION 3. Defined Terms. Any terms capitalized but not otherwise defined herein shall have the respective meanings set forth in the Agreement.

SECTION 4. Limited Effect. Except as amended hereby, the Agreement shall continue in full force and effect in accordance with its terms. Reference to this Amendment need not be made in the Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Agreement, any reference in any of such items to the Agreement being sufficient to refer to the Agreement as amended hereby.

SECTION 5. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lender that it is in material compliance with all the terms and provisions set forth in the Agreement on its part to be observed or performed, and that no Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Article VI of the Agreement.

SECTION 6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW

PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN.

SECTION 7. Counterparts. This Amendment may be executed in one or more counterparts and by different parties hereto on separate counterparts, each of which, when so executed, shall constitute one and the same agreement. Counterparts may be delivered electronically.

SECTION 8.    Miscellaneous.

(a)This Amendment shall be binding upon the parties hereto and their respective successors and assigns.

(b)The various headings and sub-headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Agreement or any provision hereof or thereof.

[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

IN WITNESS WHEREOF, the Required Lenders, the Administrative Agent and the Borrower have each caused their names to be duly signed to this Amendment by their respective officers thereunto duly authorized, all as of the date first above written.

MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC,
as Administrative Agent

By: /s/ Darius HousealName: Darius Houseal
Title: Authorized Signatory

NATIONSTAR MORTGAGE LLC,
as Borrower

By: /s/ Pedro Alvarez    Name: Pedro Alvarez
Title: Treasurer

MORGAN STANLEY BANK, N.A.,
as Required Lender

By: /s/ Brad Cramer    
Name: Brad Cramer
Title: Authorized Signatory

EXHIBIT A

SCHEDULE 12.02

The Borrower:	The Administrative Agent and Lender:
Nationstar Mortgage LLC 8950 Cypress Water Blvd. Coppell, Texas 75019 Attention: Pedro Alvarez, Senior Vice President &Treasurer Telephone: (469) 426-3057 Email: Pedro.Alvarez@nationstarmail.com With a copy to: Nationstar Mortgage LLC 8950 Cypress Water Blvd. Coppell, Texas 75019 Attention: General Counsel Email: carlos.pelayo@mrcooper.com	Morgan Stanley Bank, N.A. Morgan Stanley Mortgage Capital Holdings LLC 1585 Broadway New York, New York 10036 Attention: Darius Houseal Telephone No.: 212-761-2850 Fax No.: 212-507-0331 Email: resifsl_nonqm@morganstanley.com and fsl_non_agency_neon@morganstanley.com With Copies to: Email: wltapes@morganstanley.com and to the Lenders at the email addresses set forth on Schedule 12.02 of the Loan and Security Agreement
Ginnie Mae:
Email: OIPM_Notification _GinnieMae@hud.gov

EX-10.2

Exhibit 10.2

January 9, 2023

Carlos Pelayo
88 Oxford Street
Glen Ridge, New Jersey 07028

Dear Carlos:

Welcome to Mr. Cooper Group! We look forward to you joining our team. This letter will confirm our offer and your acceptance to join our team as Executive Vice President and Chief Legal Officer, reporting to Jay Bray, Chairman and CEO. The details of our offer are outlined below:

Annual Base Salary:    You will be paid a bi-weekly salary of $16,538.46 which is equivalent to $430,000
on an annualized basis. Nationstar Mortgage, LLC (doing business as "Mr. Cooper")
runs payroll bi-weekly.

Bonus Opportunity:    You will be eligible to participate in the Management Incentive Plan (MIP) with an annual target of 90% of your annual base salary or $387,000, prorated for time worked in the current performance year. Your bonus will be based on achieving Company, business unit, and individual performance goals established by your management. In addition, you must be actively employed by Mr. Cooper on the day the bonus is paid to receive an award.

Sign-On Bonus:    You will receive a one-time sign-on bonus of $250,000, which will be paid within 30 days of your start date. You must be actively employed with Mr. Cooper to receive the sign-on bonus. Should you voluntarily terminate your employment without good reason within 12 months of your employment date, you will be required to reimburse Mr. Cooper for the pro rata portion of the sign-on bonus.

Sign-On Equity:    You will receive a one-time equity award of Mr. Cooper Mortgage Holdings Inc. valued at $250,000 granted within 30 days of your start date. The award will vest equally over three years and is subject to the approval of the Compensation Committee of the Board of Directors.

Long Term Incentive Opportunity:    Beginning in 2023, you will be eligible for an annual equity award comparable to the awards granted to similarly situated executives. Your annual equity award will have a target value of 90% of your annual base salary or $387,000. The grants are usually made in March and typically vest equally over three years. All awards must be approved by the Compensation Committee of the Board of Directors. The award is contingent on being actively employed by Mr. Cooper on the day the grant is issued.

Non-Competition:    Except to the extent necessary to comply with the rules of professional ethics and conduct applicable to you, as an attorney, you agree that while employed by Mr. Cooper Group and for the twelve (12) month period immediately following your termination of employment, you shall not directly or indirectly, either as principal, agent, employee, employer, consultant, partner or shareholder in excess of five percent (5%) of a publicly traded corporation, corporate officer or director, or in any other representative capacity, engage or otherwise participate in any manner or fashion in any business that is in competition in any manner whatsoever with the mortgage lending business of Mr. Cooper Group and its subsidiaries or of any other business in which Mr. Cooper Group or its subsidiaries is engaged in at the time of your termination of employment, or which is part of Mr. Cooper Group’s Developing Business within mortgage lending and mortgage servicing, within states in which Mr. Cooper Group is engaged in such business or Developing Business. For purposes of the foregoing, “Developing Business” shall mean the new business concepts and services within mortgage lending and mortgage servicing that Mr. Cooper Group has developed and is in the process of developing during your employment with Mr. Cooper about which you have been informed or received confidential information. You further agree that this restrictive covenant is reasonable as to duration, terms and geographical area and that the same protects the legitimate interests of Mr. Cooper Group and its respective affiliates, imposes no undue hardship on you, is not injurious to the public, and that any

violation of this restrictive covenant shall be specifically enforceable in any court with jurisdiction upon short notice.

Severance:    Should Mr. Cooper Group terminate your employment without cause, or if you terminate your employment for good reason, during the initial twelve (12) months of your employment, you will be entitled to a severance payment of twelve (12) months of your then current salary plus a pro-rated MIP bonus paid at target, and the cash value of the next tranche of restricted stock units scheduled to vest in next vesting cycle, subject to you providing Mr. Cooper Group and their affiliates, as applicable, with a signed release of claims in a form adopted by such company from time to time, which shall contain reasonable and customary terms and conditions. Severance payments shall be paid bi-weekly and in accordance with standard payroll practices. If your employment is terminated without cause or you terminate your employment for good reason after the initial twelve (12) months of employment, you will receive such severance as may be consistent with the then current practices of Mr. Cooper Group.

    The Company may terminate your employment either with or without Cause. For purposes of this agreement, “Cause” shall mean:

(i)willful misconduct or willful neglect by you in the performance of your duties to the Company;

(ii)willful failure to adhere materially to the clear directions of the CEO, or Board or to adhere materially to the Company’s material written policies;

(iii)your conviction of or formal admission to or plea of guilty or nolo contendere to a charge of commission of a felony or any other conviction which would render you ineligible for employment for the Company; or

(iv)your willful breach of any of the material terms and conditions of this letter agreement.

Your employment may be terminated by you with or without Good Reason. For purposes of the agreement, “Good Reason” means: the occurrence, without your expressed written consent, of any of the following circumstances, unless, with respect to clauses (i), (ii), and (iii) hereof, such circumstances are corrected by the Company in all material respects within thirty (30) days following written notification by You to the Company (which written notice must be delivered within thirty (30) days after the occurrence of such circumstances) that you intend to terminate your employment for one of the reasons set forth below:

(i)a material reduction in your base salary; 

(ii)a material diminution in your authorities, duties or responsibilities;

(iii)Company’s breach of any term of this Agreement.

Non-Solicit:    You agree that during the period of your employment and for the twelve (12) month period immediately following the date of your termination of employment with Mr. Cooper Group for any reason, you shall not, directly or indirectly, solicit or induce any officer, director, employee, agent or consultant of Mr. Cooper Group or any of their successors, assigns, subsidiaries or affiliates to terminate his, her or its employment or other relationship with Mr. Cooper Group or any of their successors, assigns, subsidiaries or affiliates, or otherwise encourage any such person or entity to leave or sever his, her or its employment or other relationship with Mr. Cooper Group or any of their successors, assigns, subsidiaries or affiliates, for any other reason.

Employment at Will:    Nothing herein constitutes an offer of employment for any definite period of time. The employment relationship is "at-will" which affords you and Mr. Cooper the right to terminate the relationship at any time for no reason or any reason.

Anticipated Start Date:    January 30, 2023, but subject to change per notice requirements at current company.

At Mr. Cooper Group, we believe our employees are our most important assets. As such, we will commit to providing you with an environment which provides you with an opportunity to become involved, to apply your skills and talents, and to make a difference.

Should you accept employment with Mr. Cooper Group, you will be eligible for twenty-five (25) vacation days annually, earned and accrued on a per pay-period basis. On the first day of the month following your first day of employment, you will be eligible to participate in a variety of health and welfare plans including medical, dental, life, disability, sick leave, vacation, and paid holidays. You will also be eligible to participate in the Mr. Cooper 401(k) retirement plan. More information about these benefits will be provided to you during New Hire Orientation.

If you have or had any agreement or contract with any previous employer or any other entity that would restrict or impair your ability to work for Mr. Cooper Group, call upon its customers, or prospective customers, or assist Mr. Cooper Group in recruiting employees, you must immediately notify us. Also, please be advised that Mr. Cooper Group prohibits all employees from using trade secrets or other confidential information (verbal, written, electronics or otherwise) they may have acquired from any prior employer. Mr.

Cooper Group also prohibits employees from bringing any former employer’s confidential information on to Mr. Cooper Group’s property, including its computer systems, databases, and company-owned or paid-for equipment. If you have any proprietary or confidential information of any prior employer, you are required to retain the same. However, you are not to use that information in any way in your job at Mr. Cooper Group.

This offer is contingent upon the following:

•Proof of eligibility and employment authorization in accordance with governmental (I-9) requirements,

•Obtaining satisfactory criminal, employment, and education background checks,

•Completing all new hire paperwork, which you will receive in the days after you sign and date this letter.

Carlos, we look forward to you playing a vital role at Mr. Cooper. Please feel free to contact me if you have any questions.

Sincerely,

/s/ Jay Bray

Jay Bray

CEO & Chairman

I, Carlos Pelayo, accept and agree to all the terms and conditions contained in this offer letter.

/s/ Carlos Pelayo    January 10, 2023        

(Signature)    (Date)

I understand and agree that if I am hired by Mr. Cooper group or any affiliate of Mr. Cooper Group that my employment relationship with Mr. Cooper Group or any affiliate of Mr. Cooper Group to whom I may hereafter be assigned, will be as an “employee at-will.” Mr. Cooper Group retains the right to terminate my employment relationship at any time with or without cause, without notice, and without incurring any liability to me. I further understand and agree that any agreement providing for a term of employment or any agreement restricting or limiting the right of Mr. Cooper Group or any affiliate to terminate my employment relationship for just cause is not binding, unless such an agreement is made in writing and signed by the CEO of Mr. Cooper Group and me. This offer is contingent upon successful completion of a background investigation.

EX-10.3

Exhibit 10.3

PERFORMANCE STOCK UNIT GRANT NOTICE
UNDER THE
MR. COOPER GROUP INC.
2019 OMNIBUS INCENTIVE PLAN

Mr. Cooper Group Inc. (the “Company”), pursuant to its 2019 Omnibus Incentive Plan, as it may be amended and restated from time to time (the “Plan”), hereby grants to the Participant the number of Performance Stock Units set forth below. The Performance Stock Units are subject to all of the terms and conditions as set forth herein, and in the Performance Stock Unit Agreement (attached hereto) (the “Agreement”) and the Plan, each of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan or the Agreement, as applicable.

Participant:[Insert Participant Name]

Date of Grant:     March 23, 2023

Target Number of

Performance Stock Units:    [Insert Target Number of Performance Stock Units] (the “PSUs”)

    For each PSU provided on this Performance Stock Unit Grant Notice, a number of shares of Common Stock equal to one PSU multiplied by the applicable vested percentage will be eligible to be earned based on the performance metrics set forth below.

Performance Period:    January 1, 2023 through December 31, 2025 (the “Performance Period”)

Vesting Schedule:    Except as set forth below, provided the Participant has not undergone a Termination prior to the Vesting Date (as defined below):

•A number of PSUs shall be eligible to vest on the later of (i) the date the Committee certifies the achievement of the performance hurdles and (ii) March 1, 2026 (the “Vesting Date”) based on the Relative TSR (as defined below) and Annualized Tangible Book Value Growth (as defined below), in each case, achieved with respect to the Performance Period.

The total number of PSUs eligible to become vested on the Vesting Date (“Total PSUs Earned”) shall be equal to the sum of {(X) x [(50% x (Y)) + (50% x (Z))]}, rounded up to the nearest whole PSU, where:

•“(X)” means the number of PSUs

“(Y)” means a percentage ranging from 0%-200%, representing the Percentage of Award Earned based on Relative TSR during the Performance Period as set forth in the chart below, and

Relative TSR	Percentage of Award Earned*
Less than 25th Percentile	0%
25th Percentile	50%
51st Percentile	100%
75th Percentile and above	200%

*The Percentage of Award Earned shall be capped at 100% to the extent that the Company’s Total Shareholder Return is negative during the Performance Period.

•“(Z)” means a percentage ranging from 0%-200%, representing the Percentage of Award Earned based on Annualized Tangible Book Value Growth for the Performance Period (as set forth in the chart below); provided that for the avoidance of doubt such amount shall not be less than zero.

Annualized Tangible Book Value Growth	Percentage of Award Earned
Less than 5.0%	0%
5.0%	50%
8.0%	100%
12.0% or greater	200%

The Percentage of Award Earned shall in each case be determined using linear interpolation (and rounded up to the nearest whole percentage point) if actual performance falls between threshold and target, or between target and maximum levels.

All determinations with respect to whether and the extent to which a performance hurdle (or portion thereof) has been achieved shall be made by the Committee (or its designee) in its sole discretion.

    Any PSUs which do not become vested PSUs as of the Vesting Date shall be forfeited as of such date.

Definitions:    “Relative TSR” means a percentile, determined based on the performance during the Performance Period, of the Company’s TSR relative to the TSR of component companies of the S&P Composite 1500 Financials Index. If any of the companies in the peer group are no longer publicly traded at the end of the

Performance Period due to bankruptcy, liquidation or being placed into receivership, such companies will continue to be included in the Relative TSR calculation by force ranking them at the bottom of the array. If any of the companies in the peer group are no longer publicly traded at the end of the Performance Period due to acquisition, such companies will be excluded from the Relative TSR calculation.

“Tangible Book Value” means, for a given fiscal year, (x) the Company’s (i) total stockholders’ equity less (ii) goodwill less (iii) intangible assets, in each case, as of the last day of the applicable fiscal year and set forth in the Company’s annual report on Form 10-K, and (y) the total from clause (x) above, as reasonably adjusted by the Committee, consistent with the Company’s financial statements, to reflect (i) mark-to-market gains/(losses) on mortgaging servicing rights (“MSR”), ESL, OPAL & MSR hedging, (ii) share (repurchase)/issuance impact and (iii) gains/(losses) on minority investments.

For purposes of determining the Annualized Tangible Book Value Growth under this Agreement, the Tangible Book Value as of the last day of the Performance Period shall be compared to the Company’s Tangible Book Value as of December 31, 2022.

“Total Shareholder Return” or “TSR” means, with respect to each share of the applicable company’s common stock, a rate of return reflecting stock price appreciation, plus the reinvestment of dividends (for which the ex-dividend date occurs during the Performance Period) in additional shares of common stock, from the first day of the Performance Period through the last day of the Performance Period. For purposes of calculating Total Stockholder Return, the beginning stock price will be based the volume weighted average price (the “VWAP”) per share of common stock for the twenty (20) trading days immediately prior to the first day of the Performance Period and the ending stock price will be based on the VWAP per share of common stock for the twenty (20) trading days immediately prior to the last day of the Performance Period. For this purpose, (x) dividends will be deemed reinvested on the “ex dividend” date (based on the closing price of the common stock on such date), (y) all cash special dividends shall be treated like regular dividends, and (z) all spin-offs or share-based dividends shall be assumed to be sold on the issue date and reinvested on the same date (based on the closing price of the common stock on such date).

Termination of Participant:    Generally, upon a Termination of Participant prior to the Vesting Date, all then unvested Performance Stock Units will be immediately forfeited without consideration.

Death/Disability: Notwithstanding the foregoing, in the event of a Termination due to the Participant’s death or Disability, all unvested Performance Stock Units shall (to the extent not otherwise forfeited) remain outstanding and eligible to vest as follows:

a number of Performance Stock Units shall vest in an amount equal to (i) a fraction determined by dividing (x) the number of

calendar days from the Date of Grant through the date of Termination by (y) the number of calendar days in the Performance Period multiplied by (ii) the Total PSUs Earned, determined as of the end of the Performance Period.

Retirement: Notwithstanding the foregoing, in the event of a Termination due to the Participant’s Retirement, all unvested Performance Stock Units shall (to the extent not otherwise forfeited) remain outstanding and eligible to vest in accordance with the terms set forth herein as if the Participant had not undergone a Termination.

*    *    *

THE UNDERSIGNED PARTICIPANT ACKNOWLEDGES RECEIPT OF THIS PERFORMANCE STOCK UNIT GRANT NOTICE, THE PERFORMANCE STOCK UNIT AGREEMENT AND THE PLAN AND, AS AN EXPRESS CONDITION TO THE GRANT OF PERFORMANCE STOCK UNITS HEREUNDER, AGREES TO BE BOUND BY THE TERMS OF THIS PERFORMANCE STOCK UNIT GRANT NOTICE, THE PERFORMANCE STOCK UNIT AGREEMENT AND THE PLAN.

MR. COOPER GROUP INC.	PARTICIPANT
By: Title:

[Signature Page to Performance Stock Unit Agreement (Employee)]

MR. COOPER GROUP INC.
2019 OMNIBUS INCENTIVE PLAN
PERFORMANCE STOCK UNIT AGREEMENT

(Employee)

Pursuant to the terms of the Performance Stock Unit Grant Notice (the “Grant Notice”) delivered to the Participant, and subject to the terms of this Performance Stock Unit Agreement (the “Agreement”) and the Mr. Cooper Group Inc. 2019 Omnibus Incentive Plan, as it may be amended and restated from time to time (the “Plan”), Mr. Cooper Group Inc. (the “Company”) and the Participant agree as follows. Capitalized terms not otherwise defined herein or in the Grant Notice shall have the same meaning as set forth in the Plan.

1.Grant of Performance Stock Units. Pursuant to, and subject to, the terms and conditions of this Agreement and the Plan, and in consideration of the covenants and promises of the Participant herein contained, the Company hereby grants, as of the Date of Grant, to the Participant the number of Performance Stock Units provided in the Grant Notice. Each Performance Stock Unit granted hereby entitles the Participant to receive one share of Common Stock upon settlement of such Performance Stock Unit, subject to the terms and conditions set forth in this Agreement and the Plan.

2.Vesting. Subject to the conditions contained herein and in the Plan, the Performance Stock Units shall vest as provided in the Grant Notice.

(a)Change in Control. The Performance Stock Units are subject to Section 12(b) of the Plan.

(b)Treatment upon Termination.    Unless provided otherwise in the Grant Notice, upon a Termination of Participant all then unvested Performance Stock Units will be immediately forfeited without consideration.

3.Settlement. Subject to Section 4, the Performance Stock Units will be settled in shares of Common Stock no later than the thirtieth (30th) day following each applicable Vesting Date (such actual date of issuance of Common Shares, the “Settlement Date”). The Participant shall have no rights as a shareholder with respect to the shares of Common Stock underlying the Performance Stock Units until the applicable Settlement Date.

4.Forfeiture. Notwithstanding anything contained in the Grant Notice, the Plan or this Agreement to the contrary, all Performance Stock Units for which a Settlement Date has not occurred, whether or not then vested, will be immediately forfeited without consideration, and the Participant shall cease to have any rights with respect thereto, upon (i) a Termination of the Participant by the Service Recipient for Cause or, following Participant’s Termination, the Company Group’s determination that the Participant’s employment could have been terminated by the Service Recipient for Cause, or (ii) any Detrimental Activity.

5.Non-Transferability. The Performance Stock Units are not transferable by the Participant except in accordance with Section 14(b) of the Plan. Except as otherwise provided herein, no assignment or transfer of the Performance Stock Units, or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the Performance Stock Units shall terminate and become of no further effect.

6.Rights as a Stockholder/Dividend Equivalents. The Participant or a Permitted Transferee of the Performance Stock Units shall have no rights as a stockholder with respect to any share of Common Stock underlying a Performance Stock Unit unless and until the Participant shall have become the holder of record or the beneficial owner of such share of Common Stock, and no adjustment shall be made for dividends or distributions or other rights in respect of such share of Common Stock for which the record date is prior to the date upon which the Participant shall become the holder of record or the beneficial owner thereof. The Participant shall not be entitled to any dividend equivalents with respect to the Performance Stock Units to reflect any dividends payable on shares of Common Stock.

7.Restrictive Covenants. Participant acknowledges and recognizes the highly competitive nature of the businesses of the Company Group and accordingly agrees, in Participant’s capacity as an equity holder in the Company Group and its Affiliates, to the restrictive covenants contained in Appendix A to this Agreement (the “Restrictive Covenants”), incorporated herein by reference. Participant acknowledges and agrees that the Company’s remedies at law for an actual or threatened breach of any of the provisions of Appendix A would be inadequate and the Company Group would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Participant agrees that, in the event of such a breach or threatened breach by Participant, regardless of whether a transfer of Performance Stock Units to a Permitted Transferee has occurred and in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of a temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

8.Withholding Tax. The provisions of Section 14(d) of the Plan are incorporated herein by reference and made a part hereof. Unless otherwise agreed to by the Participant and the Company, any required withholding will be satisfied by having the Company withhold from the number of shares of Common Stock otherwise deliverable pursuant to the settlement of the Performance Stock Units a number of shares of Common Stock with a fair market value, on the date that the Performance Stock Units are settled, equal to such withholding liability; provided that the number of such shares may not have a fair market value greater than the minimum required statutory withholding liability unless determined by the Committee not to result in adverse accounting consequences. Notwithstanding the foregoing, the Participant acknowledges and agrees that to the extent consistent with applicable law and, to the extent the Participant’s status is an independent contractor for U.S. federal income tax purposes, the Company does not intend to withhold any amounts as federal income tax withholdings under any other state or federal laws, and the Participant hereby agrees to make adequate provision for any sums required to satisfy all applicable federal, state, local and foreign tax withholding obligations of the Company which may arise in connection with the grant of Performance Stock Units.

9.Section 409A of the Code.    This Agreement and the Grant Notice are intended to comply with, or be exempt from, the provisions of Section 409A of the Code (“Section 409A”), and this Agreement shall be construed and interpreted in accordance with such intent. Without limiting the foregoing, the Committee will have the right to amend the terms and conditions of this Agreement and/or the Grant Notice in any respect as may be necessary or appropriate to comply with Section 409A, including without limitation by delaying the issuance of the shares of Common Stock contemplated hereunder. Notwithstanding any other provision of this Agreement to the contrary, (i) any member of the Company Group and their respective officers, directors, employees, or agents make no guarantee that the terms of this Agreement as written comply with the provisions of Section 409A, and none of the foregoing shall have any liability for the failure of the terms of this Agreement as written to comply with the provisions of Section 409A and (ii) if the Participant is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, no payments in respect of any Awards that are “deferred compensation” subject to Section 409A of the Code and which would otherwise be payable upon the Participant’s “separation from service” (as defined in Section 409A of the Code) shall be made to such Participant prior to the date that is six (6) months after the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death. Following any applicable six (6) month delay, all such delayed payments will be paid in a single lump sum on the earliest date permitted under Section 409A of the Code that is also a business day. Each payment in a series of payments hereunder will be deemed to be a separate payment for purposes of Section 409A.

10.Incorporation of the Plan. All terms, conditions and restrictions of the Plan are incorporated herein and made part hereof as if stated herein. If there is any conflict between the terms and conditions of the Plan and this Agreement, the terms and conditions of the Plan, as interpreted by the Board or the Committee shall govern.

11.Definitions. Unless otherwise indicated herein, all capitalized terms used herein shall have the meanings given to such terms in the Plan. For purposes of this Agreement:

“Retirement” shall mean the Participant’s voluntary Termination of employment, provided, that (i) the Participant (a) if an Executive Vice President, provided at least six months written notice to the Company or any of its Subsidiaries of his or her intention to retire prior to the date of his or her retirement or (b) if a Senior Vice President or Vice President, provided at least three months written notice of his or her intention to retire prior to the date of his or her retirement (the “Notice Period”), (ii) the Participant met the Retirement Criteria at the commencement of the Notice Period and (iii) the Participant remained employed with the Company or any of its Subsidiaries during the Notice Period and sustained a level of performance during the Notice Period that would not be a basis of a termination by the Company or any of its Subsidiaries for Cause.

“Retirement Criteria” shall mean the Participant’s (i) age plus (ii) his or her years of service with the Company or any of its Subsidiaries is equal to or greater than seventy (70); provided, that, the Participant must (a) be at least fifty-five (55) years of age and (b) have at least five (5) years of service with the Company or any of its Subsidiaries.

12.Notice. Every notice or other communication relating to this Agreement or a Grant Notice between the Company and the Participant shall be in writing, and shall be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by such party in a notice mailed or delivered to the other party as herein provided; provided that, unless and until some other address be so designated, all notices or communications by the Participant to the Company shall be mailed or delivered to the Company at its principal executive office, to the attention of the Company’s General Counsel, and all notices or communications by the Company to the Participant may be given to the Participant personally or may be mailed to the Participant at the Participant’s last known address, as reflected in the Company’s records. Notwithstanding the above, all notices and communications between the Participant and any third-party plan administrator shall be mailed, delivered, transmitted or sent in accordance with the procedures established by such third-party plan administrator and communicated to the Participant from time to time.

13.No Right to Continued Service. This Agreement does not confer upon the Participant any right to continue as an employee or other service provider to the Company Group.

14.Binding Effect. This Agreement and the Grant Notice shall be binding upon the heirs, executors, administrators and successors of the parties hereto.

15.Waiver and Amendments. Except as otherwise set forth in Section 13 of the Plan, any waiver, alteration, amendment or modification of any of the terms of this Agreement or the Grant Notice shall be valid only if made in writing and signed by the parties hereto; provided, however, that any such waiver, alteration, amendment or modification is consented to on the Company’s behalf by the Committee. No waiver by either of the parties hereto of their rights hereunder shall be deemed to constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

16.Governing Law. This Agreement and the Grant Notice shall be construed and interpreted in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Notwithstanding anything contained in this Agreement, the Grant Notice or the Plan to the contrary, if any suit or claim is instituted by the Participant or the Company relating to this Agreement, the Grant Notice or the Plan, the Participant hereby submits to the exclusive jurisdiction of and venue in the courts of Delaware.

17.Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the Performance Stock Units and on any shares of Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

18.Integration. This Agreement, the Grant Notice and the Plan contain the entire understanding of the parties with respect to the subject matter hereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject

matter hereof other than those expressly set forth herein, in the Grant Notice and the Plan. This Agreement, the Grant Notice and the Plan supersede all prior agreements and understandings between the parties with respect to the subject matter hereof.

19.Participant Acknowledgment. The Participant hereby acknowledges receipt of a copy of the Plan. The Participant hereby acknowledges that all decisions, determinations and interpretations of the Board, or the Committee, in respect of the Plan, this Agreement and this Award of Performance Stock Units shall be final, binding and conclusive.

Appendix A
Restrictive Covenants

The Participant agrees that during the period commencing on the Date of Grant and ending on the later of the final Settlement Date and the Participant’s Termination, the Participant shall not, directly or indirectly, either as a principal, agent, employee, employer, consultant, partner, shareholder of a closely held corporation or shareholder in excess of five (5%) percent of a publicly traded corporation, corporate officer or director, or in any other individual or representative capacity, engage or otherwise participate in any manner or fashion in any business that is in competition in any manner whatsoever with the mortgage and real estate services businesses of the Company Group or of any other business in which the Company Group is engaged or which is part of the Company Group’s Developing Business (as defined below), within states in which the Company Group is engaged in such business or Developing Business.

In addition, from and after the Date of Grant until the later of (i) the final Settlement Date or (ii) the first (1st) anniversary of the Participant’s termination of employment with the Company or any of its Subsidiaries for any reason, the Participant covenants and agrees not to, directly or indirectly, solicit or induce any officer, director, employee, agent, independent contractor or consultant or client of the Company or any of its Subsidiaries to terminate his, her or its employment or other relationship with the Company or any of its Subsidiaries, or otherwise encourage any such person or entity to leave or sever his, her or its employment or other relationship with the Company or any of its Subsidiaries for any reason.

Further, the Participant agrees that the Participant shall not at any time make any disparaging or defamatory comments regarding the Company or any of its Subsidiaries or their respective directors, officers, executives or employees, or, after termination of the Participant’s employment relationship with the Company or any of its Subsidiaries, make any such comments concerning any aspect of the termination of their relationship. The obligations of the Participant under this subparagraph shall not apply to disclosures required by applicable law, regulation or order of any court or governmental agency; provided, that, the Participant shall promptly notify the Company in writing of any such obligation.

“Developing Business” shall mean the new business concepts and services the Company or any of its Subsidiaries has developed and is in the process of developing during the Grantee’s employment with the Company or any of its Subsidiaries.

EX-31.1

Exhibit 31.1

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, Jay Bray, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the three months ended March 31, 2023, of Mr. Cooper Group Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d - 15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	April 26, 2023
/s/ Jay Bray
Jay Bray
Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification Pursuant to Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section

302 of the Sarbanes-Oxley Act of 2002

I, Kurt Johnson, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the three months ended March 31, 2023, of Mr. Cooper Group Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d - 15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	April 26, 2023
/s/ Kurt Johnson
Kurt Johnson
Executive Vice President & Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Mr. Cooper Group Inc. (the “Company”) on Form 10-Q for the three months ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jay Bray, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	April 26, 2023
/s/ Jay Bray
Jay Bray
Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Mr. Cooper Group Inc. (the “Company”) on Form 10-Q for the three months ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kurt Johnson, Executive Vice President & Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	April 26, 2023
/s/ Kurt Johnson
Kurt Johnson
Executive Vice President & Chief Financial Officer

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2023	Apr. 20, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-14667
Entity Registrant Name	Mr. Cooper Group Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	91-1653725
Entity Address, Address Line One	8950 Cypress Waters Blvd
Entity Address, City or Town	Coppell
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75019
City Area Code	469
Local Phone Number	549-2000
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	COOP
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		68,053,365
Entity Central Index Key	0000933136
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false

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Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Assets
Cash and cash equivalents	$ 534	$ 527
Restricted cash	133	175
Mortgage servicing rights at fair value	6,566	6,654
Advances and other receivables, net of reserves of $148 and $137, respectively	933	1,019
Mortgage loans held for sale at fair value	937	893
Property and equipment, net of accumulated depreciation of $122 and $122, respectively	64	65
Deferred tax assets, net	707	703
Other assets	2,783	2,740
Total assets	12,657	12,776
Liabilities and Stockholders’ Equity
Unsecured senior notes, net	2,675	2,673
Advance and warehouse facilities, net	2,934	2,885
Payables and other liabilities	2,550	2,633
MSR related liabilities - nonrecourse at fair value	512	528
Total liabilities	8,671	8,719
Commitments and contingencies (Note 15)
Common stock at $0.01 par value - 300 million shares authorized, 93.2 million shares issued	1	1
Additional paid-in-capital	1,066	1,104
Retained earnings	3,839	3,802
Treasury shares at cost - 25.2 million and 24.0 million shares, respectively	(920)	(850)
Total stockholders’ equity	3,986	4,057
Total liabilities and stockholders’ equity	$ 12,657	$ 12,776

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Advances and other receivables, reserves	$ 148	$ 137
Accumulated depreciation	$ 122	$ 122
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	300,000,000	300,000,000
Common stock, shares, issued (in shares)	93,200,000	93,200,000
Treasury Stock, Common, Shares	25,200,000	24,000,000.0

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Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues:
Service related, net	$ 261	$ 755
Net gain on mortgage loans held for sale	69	297
Total revenues	330	1,052
Expenses:
Salaries, wages and benefits	148	228
General and administrative	113	110
Total expenses	261	338
Interest income	85	36
Interest expense	(110)	(106)
Other (expense) income, net	(9)	222
Total other (expense) income, net	(34)	152
Income (loss) before income tax expense (benefit)	35	866
Less: Income tax (benefit) expense	(2)	208
Net income	$ 37	$ 658
Earnings per share
Basic	$ 0.54	$ 8.91
Diluted	$ 0.52	$ 8.59

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Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Total Mr. Cooper Stockholders’ Equity	Non-controlling Interests	Treasury Share Amount
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total stockholders’ equity	$ 3,367	$ 1	$ 1,116	$ 2,879	$ 3,366	$ 1	$ (630)
Shares outstanding, beginning balance (in shares) at Dec. 31, 2021		73,777
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued / (surrendered) under incentive compensation plan (in shares)		850
Shares issued / (surrendered) under incentive compensation plan	(21)		(39)		(21)		18
Share-based compensation	8		8		8
Repurchase of common stock (in shares)		(721)
Repurchase of common stock	(35)				(35)		(35)
Net income	658			658	658	0
Shares outstanding, ending balance (in shares) at Mar. 31, 2022		73,906
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total stockholders’ equity	3,977	$ 1	1,085	3,537	3,976	1	(647)
Total stockholders’ equity	4,057	$ 1	1,104	3,802	4,057	0	(850)
Shares outstanding, beginning balance (in shares) at Dec. 31, 2022		69,266
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares issued / (surrendered) under incentive compensation plan (in shares)		870
Shares issued / (surrendered) under incentive compensation plan	(24)		(43)		(24)		19
Share-based compensation	5		5		5
Repurchase of common stock (in shares)		(2,083)
Repurchase of common stock	(89)				(89)		(89)
Net income	37			37	37	0
Shares outstanding, ending balance (in shares) at Mar. 31, 2023		68,053
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Total stockholders’ equity	$ 3,986	$ 1	$ 1,066	$ 3,839	$ 3,986	$ 0	$ (920)

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2023	Mar. 31, 2022
Operating Activities
Net income		$ 37	$ 658
Adjustments to reconcile net income to net cash attributable to operating activities:
Deferred tax (benefit) expense		(4)	197
Net gain on mortgage loans held for sale		(69)	(297)
Provision for servicing and non-servicing reserves		9	6
Fair value changes in mortgage servicing rights		230	(563)
Fair value changes in MSR related liabilities		6	99
Depreciation and amortization for property and equipment and intangible assets		9	11
Gain on disposition of assets		0	223
(Gain) loss on MSR hedging activities		(59)	140
Other operating activities		30	21
Repurchases of loan assets out of Ginnie Mae securitizations		(222)	(2,249)
Mortgage loans originated and purchased for sale, net of fees		(2,760)	(11,598)
Sales proceeds and loan payment proceeds for mortgage loans held for sale		2,931	14,471
Changes in assets and liabilities:
Advances and other receivables		76	169
Other assets		66	79
Payables and other liabilities		(120)	5
Net cash attributable to operating activities		160	926
Investing Activities
Property and equipment additions, net of disposals		(5)	(3)
Purchase of mortgage servicing rights		(114)	(965)
Proceeds on sale of mortgage servicing rights		15	4
Other investing activities		(3)	0
Net cash attributable to investing activities		(107)	(964)
Financing Activities
Increase (decrease) in advance and warehouse facilities		51	(204)
Settlements and repayment of excess spread financing		(22)	(32)
Repurchase of common stock		(89)	(35)
Other financing activities		(28)	(23)
Net cash attributable to financing activities		(88)	(294)
Net decrease in cash, cash equivalents, and restricted cash		(35)	(332)
Cash, cash equivalents, and restricted cash - beginning of period		702	1,041
Cash, cash equivalents, and restricted cash - end of period(1)	[1]	667	709
Supplemental Disclosures of Non-cash Investing Activities
Equity consideration received from disposition of assets		0	250
Purchase of mortgage servicing rights		$ 1	$ 64

[1] The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets. March 31, 2023March 31, 2022Cash and cash equivalents$534 $579 Restricted cash133 130 Total cash, cash equivalents, and restricted cash$667 $709 

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Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2023		Dec. 31, 2022	Mar. 31, 2022		Dec. 31, 2021
Statement of Cash Flows [Abstract]
Cash and cash equivalents	$ 534		$ 527	$ 579
Restricted cash	133		175	130
Total cash, cash equivalents, and restricted cash	$ 667	[1]	$ 702	$ 709	[1]	$ 1,041

[1] The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed consolidated balance sheets. March 31, 2023March 31, 2022Cash and cash equivalents$534 $579 Restricted cash133 130 Total cash, cash equivalents, and restricted cash$667 $709 

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Nature of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business and Basis of Presentation

1. Nature of Business and Basis of Presentation

Nature of Business

Mr. Cooper Group Inc., collectively with its consolidated subsidiaries, (“Mr. Cooper,” the “Company,” “we,” “us” or “our”) provides servicing, origination and transaction-based services related to single family residences throughout the United States with operations under its primary brands: Mr. Cooper® and Xome®. Mr. Cooper is one of the largest home loan servicers and originators in the country focused on delivering a variety of servicing and lending products, services and technologies. The Company’s corporate website is located at www.mrcoopergroup.com. The Company has provided a glossary of terms, which defines certain industry-specific and other terms that are used herein, in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of this Form 10-Q.

Basis of Presentation

The interim condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Reports on Form 10-K for the year ended December 31, 2022.

The interim condensed consolidated financial statements are unaudited; however, in the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation of the results of the interim periods have been included. Dollar amounts are reported in millions, except per share data and other key metrics, unless otherwise noted.

Basis of Consolidation

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, other entities in which the Company has a controlling financial interest and those variable interest entities (“VIE”) where the Company’s wholly-owned subsidiaries are the primary beneficiaries. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that the Company became the primary beneficiary through the date the Company ceases to be the primary beneficiary. The Company applies the equity method of accounting to investments where it is able to exercise significant influence, but not control, over the policies and procedures of the entity and owns less than 50% of the voting interests. These investments are initially measured at cost and subsequently adjusted for the Company’s proportionate share of earnings and losses in the investee. Investments in certain companies over which the Company does not exert significant influence are recorded at fair value, or at cost and updated for observable price changes upon election of measurement alternative, at the end of each reporting period. Intercompany balances and transactions on consolidated entities have been eliminated.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates due to factors such as adverse changes in the economy, macro-economic uncertainty, changes in interest rates, secondary market pricing for loans held for sale and derivatives, strength of underwriting and servicing practices, changes in prepayment assumptions, declines in home prices or discrete events adversely affecting specific borrowers and such differences could be material.

Reclassifications

Certain reclassifications have been made in the 2022 condensed consolidated statement of cash flows to conform to 2023 presentation. Such reclassifications were not material and did not affect total revenues or net income.

Recent Accounting Guidance Adopted

The Company did not adopt any accounting guidance during the three months ended March 31, 2023 that had a material impact on its condensed consolidated financial statements or disclosures.

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Discontinued Operations and Disposal Groups

3 Months Ended

Mar. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

2. Dispositions

Sale of Mortgage Servicing Platform

On March 31, 2022, the Company completed the sale of certain assets and liabilities of its servicing and subservicing technology platform for performing and non-performing mortgage loans (the “Mortgage Servicing Platform”) to Sagent M&C, LLC (“Sagent”), in exchange for Class A-1 Common Units equal to 19.9% ownership of Sagent, and the sale of certain tangible personal property of the Company used in the conduct of the Mortgage Servicing Platform in exchange for $9.9 in cash, for total consideration of $260 (the “Sagent Transaction”). In connection with the Sagent Transaction, the Company recorded a gain of $223, which was included in “other income, net” within the condensed consolidated statements of operations, and recorded $4 transaction costs during the three months ended March 31, 2022. No transaction costs were recorded in the three months ended March 31, 2023. The net carrying amount of assets and liabilities transferred in connection with the Sagent Transaction was $31 and reported under Corporate/Other.

The Company accounted for the equity interest under the equity method of accounting, as the Company has the ability to exercise significant influence over Sagent’s operating and financial decisions but does not own a majority equity interest or otherwise control the respective entity. Under the equity method of accounting, the investment is initially stated at cost and subsequently adjusted for additional investments and the Company’s proportionate share of Sagent’s earnings or losses and distributions. The initial cost of the equity interest recorded was $250, which represented the fair value as of March 31, 2022. The Company recorded a $7 loss during the three months ended March 31, 2023 related to the Company's proportionate share of net loss of Sagent. The Company’s investment in Sagent was $230 as of March 31, 2023.

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Mortgage Servicing Rights and Related Liabilities

3 Months Ended

Mar. 31, 2023

Transfers and Servicing [Abstract]

Mortgage Servicing Rights and Related Liabilities

3. Mortgage Servicing Rights and Related Liabilities

The following table sets forth the carrying value of the Company’s mortgage servicing rights (“MSRs”) and the related liabilities. In estimating the fair value of all mortgage servicing rights and related liabilities, the impact of the current environment was considered in the determination of key assumptions.

MSRs and Related Liabilities	March 31, 2023		December 31, 2022
MSRs - fair value	$	6,566	$	6,654
Excess spread financing at fair value	$	491	$	509
Mortgage servicing rights financing at fair value	21		19
MSR related liabilities - nonrecourse at fair value	$	512	$	528

Mortgage Servicing Rights

The following table sets forth the activities of MSRs:

	Three Months Ended March 31,
MSRs - Fair Value	2023		2022
Fair value - beginning of period	$	6,654	$	4,223
Additions:
Servicing retained from mortgage loans sold	54		200
Purchases of servicing rights	102		1,015
Dispositions:
Sales of servicing assets	(15)		(4)
Changes in fair value:
Changes in valuation inputs or assumptions used in the valuation model (MSR MTM)	(105)		798
Changes in valuation due to amortization	(125)		(235)
Other changes(1)	1		9
Fair value - end of period	$	6,566	$	6,006

(1)Amounts primarily represent negative fair values reclassified from the MSR asset to reserves as underlying loans are removed from the MSR and other reclassification adjustments.

During the three months ended March 31, 2023 and 2022, the Company sold $1,256 and $361 in unpaid principal balance (“UPB”) of MSRs, of which $271 and $342 were retained by the Company as subservicer, respectively.

MSRs are segregated between investor type into agency and non-agency pools (referred to herein as “investor pools”) based upon contractual servicing agreements with investors at the respective balance sheet date to evaluate the MSR portfolio and fair value of the portfolio. Agency investors primarily consist of government sponsored enterprises (“GSE”), such as the Federal National Mortgage Association (“Fannie Mae” or “FNMA”) and the Federal Home Loan Mortgage Corp (“Freddie Mac” or “FHLMC”), and the Government National Mortgage Association (“Ginnie Mae” or “GNMA”). Non-agency investors consist of investors in private-label securitizations.

The following table provides a breakdown of UPB and fair value for the Company’s MSRs:

	March 31, 2023				December 31, 2022
MSRs - UPB and Fair Value Breakdown by Investor Pools	UPB		Fair Value		UPB		Fair Value
Agency	$	382,368	$	6,258	$	380,502	$	6,322
Non-agency	30,070		308		30,880		332
Total	$	412,438	$	6,566	$	411,382	$	6,654

Refer to Note 13, Fair Value Measurements, for further discussion on key weighted-average inputs and assumptions used in estimating the fair value of MSRs.

The following table shows the hypothetical effect on the fair value of the Company’s MSRs when applying certain unfavorable variations of key assumptions to these assets for the dates indicated:

	Discount Rate				Total Prepayment Speeds				Cost to Service per Loan
MSRs - Hypothetical Sensitivities	100 bps Adverse Change		200 bps Adverse Change		10% Adverse Change		20% Adverse Change		10% Adverse Change		20% Adverse Change
March 31, 2023
Mortgage servicing rights	$	(273)	$	(525)	$	(139)	$	(270)	$	(65)	$	(130)
December 31, 2022
Mortgage servicing rights	$	(266)	$	(511)	$	(136)	$	(264)	$	(61)	$	(122)

These hypothetical sensitivities should be evaluated with care. The effect on fair value of an adverse change in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects.

Excess Spread Financing - Fair Value

The Company had excess spread financing liability of $491 and $509, with UPB of $81,041 and $83,706 as of March 31, 2023 and December 31, 2022, respectively. Refer to Note 13, Fair Value Measurements, for key weighted-average inputs and assumptions used in the valuation of excess spread financing liability.

The following table shows the hypothetical effect on the Company’s excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities for the dates indicated:

	Discount Rate				Prepayment Speeds
Excess Spread Financing - Hypothetical Sensitivities	100 bps Adverse Change		200 bps Adverse Change		10% Adverse Change		20% Adverse Change
March 31, 2023
Excess spread financing	$	19	$	38	$	10	$	22
December 31, 2022
Excess spread financing	$	19	$	40	$	11	$	22

These hypothetical sensitivities should be evaluated with care. The effect on fair value of an adverse change in assumptions generally cannot be determined because the relationship of the change in assumptions to the fair value may not be linear. Additionally, the impact of a variation in a particular assumption on the fair value is calculated while holding other assumptions constant. In reality, changes in one factor may lead to changes in other factors, which could impact the above hypothetical effects. Also, a positive change in the above assumptions would not necessarily correlate with the corresponding decrease in the net carrying amount of the excess spread financing. Excess spread financing’s cash flow assumptions that are utilized in determining fair value are based on the related cash flow assumptions used in the financed MSRs. Any fair value change recognized in the financed MSRs attributable to related cash flows assumptions would inherently have an inverse impact on the carrying amount of the related excess spread financing.

Mortgage Servicing Rights Financing - Fair Value

The Company had MSR financing liability of $21 and $19 as of March 31, 2023 and December 31, 2022, respectively. Refer to Note 13, Fair Value Measurements, for key weighted-average inputs and assumptions used in the valuation of the MSR financing liability.

Revenues - Service Related, net

The following table sets forth the items comprising total “revenues - service related, net”:

	Three Months Ended March 31,
Revenues - Service Related, net	2023		2022
Contractually specified servicing fees(1)	$	384	$	327
Other service-related income(1)	14		33
Incentive and modification income(1)	6		9
Servicing late fees(1)	21		19
Mark-to-market adjustments - Servicing(2)(3)	(61)		553
Amortization, net of accretion(4)	(115)		(202)
Originations service fees(5)	11		42
Corporate/Xome related service fees	19		12
Other(6)	(18)		(38)
Total revenues - Service Related, net	$	261	$	755

(1)The Company recognizes revenue on an earned basis for services performed. Amounts include subservicing related revenues. Amounts also include servicing fees from loans sold with servicing retained of $177 and $146 for the three months ended March 31, 2023 and 2022, respectively.

(2)Mark-to-market (“MTM”) adjustments - Servicing include fair value adjustments on MSR, excess spread financing and MSR financing liabilities. The amount of MSR MTM includes the impact of negative modeled cash flows which have been transferred to reserves on advances and other receivables. The negative modeled cash flows relate to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio. The impact of negative modeled cash flows was $9 and $6 for the three months ended March 31, 2023 and 2022, respectively.

(3)MTM adjustments - Servicing includes a gain of $59 and loss of $140 from MSR hedging activities during the three months ended March 31, 2023, and 2022, respectively.

(4)Amortization is net of excess spread accretion of $10 and $33 during the three months ended March 31, 2023 and 2022, respectively.

(5)Amounts include fees collected from customers for originated loans and from other lenders for loans purchased through the correspondent channel, and include loan application, underwriting, and other similar fees.

(6)Other represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements, portfolio runoff and the payments made associated with MSR financing arrangements.

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Advances and Other Receivables

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Advances and Other Receivables

4. Advances and Other Receivables

Advances and other receivables, net, consists of the following:

Advances and Other Receivables, Net	March 31, 2023		December 31, 2022
Servicing advances, net of $9 and $12 purchase discount, respectively	$	970	$	1,053
Receivables from agencies, investors and prior servicers, net of $7 purchase discount	111		103
Reserves	(148)		(137)
Total advances and other receivables, net	$	933	$	1,019

The following table sets forth the activities of the servicing reserves for advances and other receivables:

	Three Months Ended March 31,
Reserves for Advances and Other Receivables	2023		2022
Balance - beginning of period	$	137	$	167
Provision and other additions(1)	16		16
Write-offs	(5)		(31)
Balance - end of period	$	148	$	152

(1)The Company recorded a provision of $9 and $6 through the MTM adjustments in “revenues - service related, net”, in the condensed consolidated statements of operations during the three months ended March 31, 2023 and 2022, respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate.

Purchase Discount for Advances and Other Receivables

The following tables set forth the activities of the purchase discounts for advances and other receivables:

	Three Months Ended March 31,
	2023				2022
Purchase Discount for Advances and Other Receivables	Servicing Advances		Receivables from Agencies, Investors and Prior Servicers		Servicing Advances		Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	12	$	7	$	19	$	12
Utilization of purchase discounts	(3)		—		(3)		(4)
Balance - end of period	$	9	$	7	$	16	$	8

Credit Loss for Advances and Other Receivables

During the three months ended March 31, 2023 and 2022, the Company increased the current expected credit loss (“CECL”) reserve by $2 and $4, respectively. In addition, the Company wrote off $5 of the CECL reserve during the three months ended March 31, 2022. As of March 31, 2023, the total CECL reserve was $38, of which $31 and $7 were recorded in reserves and purchase discount for advances and other receivables, respectively. As of March 31, 2022, the total CECL reserve was $30, of which $22 and $8 were recorded in reserves and purchase discount for advances and other receivables, respectively.

The Company determined that the credit-related risk associated with applicable financial instruments typically increases with the passage of time. The CECL reserve methodology considers these financial instruments collectible to a point in time of 39 months. Any projected remaining balance at the end of the collection period is considered a loss and factors into the overall CECL loss rate required.

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Mortgage Loans Held for Sale

3 Months Ended

Mar. 31, 2023

Mortgage Loans Held for Sale and Investment [Abstract]

Mortgage Loans Held for Sale

5. Mortgage Loans Held for Sale

Mortgage loans held for sale are recorded at fair value as set forth below:

Mortgage Loans Held for Sale	March 31, 2023		December 31, 2022
Mortgage loans held for sale – UPB	$	959	$	921
Mark-to-market adjustment(1)	(22)		(28)
Total mortgage loans held for sale	$	937	$	893

(1)The mark-to-market adjustment includes net change in unrealized gain/loss, premium on correspondent loans and fees on direct-to-consumer loans. The mark-to-market adjustment is recorded in “revenues - net gain on mortgage loans held for sale” in the condensed consolidated statements of operations.

The following table sets forth the activities of mortgage loans held for sale:

	Three Months Ended March 31,
Mortgage Loans Held for Sale	2023		2022
Balance - beginning of period	$	893	$	4,381
Loans sold and loan payments received	(2,940)		(14,527)
Mortgage loans originated and purchased, net of fees	2,760		11,598
Repurchase of loans out of Ginnie Mae securitizations(1)	222		2,249
Net change in unrealized gain (loss) on retained loans held for sale	9		(109)
Net transfers of mortgage loans held for sale(2)	(7)		1
Balance - end of period	$	937	$	3,593

(1)The Company has the optional right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased in connection with loan modifications and loan resolution activity, with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. Therefore, these loans are classified as held for sale.

(2)Amounts reflect transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net, for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing.

For the three months ended March 31, 2023 and 2022, the Company received proceeds of $2,931 and $14,472, on the sale of mortgage loans held for sale, resulting in a loss of $9 and $55, respectively.

The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows:

	March 31, 2023				December 31, 2022
Mortgage Loans Held for Sale	UPB		Fair Value		UPB		Fair Value
Non-accrual(1)	$	100	$	86	$	102	$	87

(1)Non-accrual UPB includes $85 and $90 of UPB related to Ginnie Mae repurchased loans as of March 31, 2023 and December 31, 2022, respectively.

The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $58 and $65 as of March 31, 2023 and December 31, 2022, respectively.

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Loans Subject to Repurchase from Ginnie Mae

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Loans Subject to Repurchase from Ginnie Mae

6. Loans Subject to Repurchase from Ginnie Mae

Loans are sold to Ginnie Mae in conjunction with the issuance of mortgage backed securities. The Company, as the issuer of the mortgage backed securities, has the unilateral right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including payments not being received from borrowers for greater than 90 days. Once the Company has the unilateral right to repurchase a delinquent loan, it has effectively regained control over the loan and recognizes these rights to the loan on its condensed consolidated balance sheets and establishes a corresponding repurchase liability regardless of the Company’s intention to repurchase the loan. The Company had loans subject to repurchase from Ginnie Mae of $1,889 and $1,865 as of March 31, 2023 and December 31, 2022, respectively, which are included in both “other assets” and “payables and other liabilities” in the condensed consolidated balance sheets. Loans subject to repurchase from Ginnie Mae as of March 31, 2023 and December 31, 2022 included $1,649 and $1,661, respectively, of loans in forbearance related to the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), respectively, whereby no payments have been received from borrowers for greater than 90 days.

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Goodwill and Intangible Assets	3 Months Ended
	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	7. Goodwill and Intangible Assets The Company had goodwill of $120 as of March 31, 2023 and December 31, 2022, and intangible assets of $6 and $8 as of March 31, 2023 and December 31, 2022, respectively. Goodwill and intangible assets are included in “other assets” within the condensed consolidated balance sheets.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

8. Derivative Financial Instruments

Derivative instruments are used as part of the overall strategy to manage exposure to interest rate risks related to mortgage loans held for sale and IRLCs (“the pipeline”) and the MSR portfolio. The Company economically hedges the pipeline separately from the MSR portfolio primarily using third-party derivative instruments. Such derivative instruments utilized by the Company include IRLCs, LPCs, forward MBS, Treasury futures and Swap futures. The changes in value on the derivative instruments associated with pipeline hedging are recorded in earnings as a component of “revenues - net gain on mortgage loans held for sale” on the condensed consolidated statements of operations and condensed consolidated statement of cash flows, while changes in the value of derivative instruments associated with the MSR portfolio fair value are recorded in “revenues - service related, net” on the condensed consolidated statements of operations and in “(gain) loss on MSR hedging activities” on the condensed consolidated statements of cash flows.

The following tables provide the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses) for the derivative financial instruments. Gains/(losses) include both realized and unrealized gains/(losses) of each derivative financial instrument.

		March 31, 2023				Three Months Ended March 31, 2023
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gains/(Losses)
Assets
Mortgage loans held for sale
Loan sale commitments	2023	$	399	$	12	$	2
Derivative financial instruments
IRLCs	2023	$	940	$	33	$	11
LPCs	2023	484		3		2
Forward MBS trades	2023	1,056		18		35
Treasury futures	2023	2,445		71		71
Total derivative financial instruments - assets		$	4,925	$	125	$	119
Liabilities
Derivative financial instruments
IRLCs	2023	$	25	$	—	$	—
LPCs	2023	85		—		1
Forward MBS trades	2023	1,439		10		(47)
Treasury futures	2023	193		1		(23)
Total derivative financial instruments - liabilities		$	1,742	$	11	$	(69)

		March 31, 2022				Three Months Ended March 31, 2022
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gains/(Losses)
Assets
Mortgage loans held for sale
Loan sale commitments	2022	$	543	$	1	$	(24)
Derivative financial instruments
IRLCs	2022	$	3,122	$	72	$	(62)
LPCs	2022	203		2		(1)
Forward MBS trades	2022	4,658		79		224
Total derivative financial instruments - assets		$	7,983	$	153	$	161
Liabilities
Derivative financial instruments
IRLCs	2022	$	551	$	5	$	(5)
LPCs	2022	658		8		(6)
Forward MBS trades	2022	695		6		7
Treasury futures	2022	1,097		49		(111)
Total derivative financial instruments - liabilities		$	3,001	$	68	$	(115)

As of March 31, 2023, the Company held $3 and $8 in collateral deposits and collateral obligations on derivative instruments, respectively. As of December 31, 2022 the Company held $49 and $1 in collateral deposits and collateral obligations on derivative instruments, respectively. Collateral deposits and collateral obligations are recorded in “other assets” and “payables and other liabilities”, respectively, in the Company’s condensed consolidated balance sheets. The Company does not offset fair value amounts recognized for derivative instruments with amounts collected or deposited on derivative instruments in the condensed consolidated balance sheets.

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Indebtedness

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Indebtedness

9. Indebtedness

Advance and Warehouse Facilities

					March 31, 2023				December 31, 2022
	Maturity Date	Collateral	Capacity Amount		Outstanding		Collateral Pledged		Outstanding		Collateral Pledged
Advance Facilities
$350 advance facility	October 2024	Servicing advance receivables	$	350	$	140	$	179	$	150	$	189
$300 advance facility(1)	November 2024	Servicing advance receivables	300		298		406		308		410
$250 advance facility	January 2024	Servicing advance receivables	250		161		192		171		209
$75 advance facility	December 2023	Servicing advance receivables	75		43		65		40		45
Advance facilities principal amount					642		842		669		853
Warehouse Facilities
$1,500 Warehouse Facility	June 2023	Mortgage loans or MBS	1,500		189		247		206		272
$1,500 Warehouse Facility	June 2023	Mortgage loans or MBS	1,500		145		144		135		133
$750 Warehouse Facility	October 2023	Mortgage loans or MBS	750		135		140		202		209
$500 Warehouse Facility(2)	September 2024	Mortgage loans or MBS	500		9		11		14		17
$500 Warehouse Facility	June 2023	Mortgage loans or MBS	500		64		67		76		80
$500 Warehouse Facility	August 2023	Mortgage loans or MBS	500		76		78		31		32
$450 Warehouse Facility(3)	April 2024	Mortgage loans or MBS	450		—		—		—		—
$300 Warehouse Facility	August 2023	Mortgage loans or MBS	300		161		165		115		117
$250 Warehouse Facility(4)	April 2023	Mortgage loans or MBS	250		—		—		—		—
$200 Warehouse Facility	May 2023	Mortgage loans or MBS	200		18		27		19		28
$200 Warehouse Facility	June 2023	Mortgage loans or MBS	200		50		51		18		21
$75 Warehouse Facility	December 2023	Mortgage loans or MBS	75		18		18		1		1
Warehouse facilities principal amount					865		948		817		910
MSR Facilities
$1,450 warehouse facility(1)	November 2024	MSR	1,450		300		2,162		260		2,284
$600 warehouse facility	April 2025	MSR	600		400		977		380		927
$500 warehouse facility(2)	September 2024	MSR	500		390		1,153		380		1,482
$500 warehouse facility	June 2024	MSR	500		325		774		365		732
$50 warehouse facility	November 2023	MSR	50		25		71		25		74
MSR facilities principal amount					1,440		5,137		1,410		5,499
Advance, warehouse and MSR facilities principal amount					2,947		$	6,927	2,896		$	7,262
Unamortized debt issuance costs					(13)				(11)
Advance and warehouse facilities, net					$	2,934			$	2,885

(1)Total capacity for this facility is $1,750, of which $300 is internally allocated for advance financing and $1,450 is internally allocated for MSR financing; capacity is fully fungible and is not restricted by these allocations.

(2)The capacity amount for this facility is $1,000, of which $500 is a sublimit for MSR financing.

(3)The capacity decreased in April 2023 to $100.

(4)The facility was terminated in April 2023.

In April 2023, the Company increased capacity on MSR facilities by $1,150. See further discussion in Liquidity and Capital Resources section within Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The weighted average interest rate for advance facilities was 7.2% and 2.4% for the three months ended March 31, 2023 and 2022, respectively. The weighted average interest rate for warehouse and MSR facilities was 7.0% and 2.1% for three months ended March 31, 2023 and 2022, respectively.

Unsecured Senior Notes

Unsecured senior notes consist of the following:

Unsecured Senior Notes	March 31, 2023		December 31, 2022
$850 face value, 5.500% interest rate payable semi-annually, due August 2028	$	850	$	850
$650 face value, 5.125% interest rate payable semi-annually, due December 2030	650		650
$600 face value, 6.000% interest rate payable semi-annually, due January 2027	600		600
$600 face value, 5.750% interest rate payable semi-annually, due November 2031	600		600
Unsecured senior notes principal amount	2,700		2,700
Unamortized debt issuance costs	(25)		(27)
Unsecured senior notes, net	$	2,675	$	2,673

The indentures provide that on or before certain fixed dates, the Company may redeem up to 40% of the aggregate principal amount of the unsecured senior notes with the net proceeds of certain equity offerings at fixed redemption prices, plus accrued and unpaid interest, to the redemption dates, subject to compliance with certain conditions. In addition, the Company may redeem all or a portion of the unsecured senior notes at any time on or after certain fixed dates at the applicable redemption prices set forth in the indentures plus accrued and unpaid interest, to the redemption dates. No notes were repurchased or redeemed during the three months ended March 31, 2023 and 2022.

As of March 31, 2023, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows:

Year Ending December 31,	Amount
2023 through 2026	$	—
2027	600
Thereafter	2,100
Total unsecured senior notes principal amount	$	2,700

Interest Expense

Interest expense primarily includes interest incurred on advance and warehouse facilities, unsecured senior notes, excess spread financing and compensating bank balances, as well as bank fees. The Company incurred interest expense related to advance and warehouse facilities, unsecured senior notes and excess spread financing of $99 and $86 for the three months ended March 31, 2023 and 2022, respectively.

Financial Covenants

The Company’s credit facilities contain various financial covenants which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements, which are measured at the Company’s operating subsidiary, Nationstar Mortgage LLC. The Company was in compliance with its required financial covenants as of March 31, 2023.

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Securitizations and Financings

3 Months Ended

Mar. 31, 2023

Variable Interest Entities and Securitizations [Abstract]

Securitizations and Financings

10. Securitizations and Financings

Variable Interest Entities

In the normal course of business, the Company enters into various types of on- and off-balance sheet transactions with special purpose entities (“SPEs”) determined to be VIEs, which primarily consist of securitization trusts established for a limited purpose. Generally, these SPEs are formed for the purpose of securitization transactions in which the Company transfers assets to an SPE, which then issues to investors various forms of debt obligations supported by those assets.

The Company has determined that the SPEs created in connection with certain advance facilities trusts should be consolidated as the Company is the primary beneficiary of each of these entities.

A summary of the assets and liabilities of the Company’s transactions with VIEs included in the Company’s condensed consolidated balance sheets is presented below:

	March 31, 2023		December 31, 2022
Consolidated Transactions with VIEs	Transfers Accounted for as Secured Borrowings		Transfers Accounted for as Secured Borrowings
Assets
Restricted cash	$	70	$	78
Advances and other receivables, net	371		398
Total assets	$	441	$	476
Liabilities
Advance facilities, net(1)	$	300	$	321
Payables and other liabilities	—		1
Total liabilities	$	300	$	322

(1)Refer to advance facilities in Note 9, Indebtedness, for additional information.

The following table shows a summary of the outstanding collateral and certificate balances for securitization trusts for which the Company was the transferor, including any retained beneficial interests and MSRs, that were not consolidated by the Company:

Unconsolidated Securitization Trusts	March 31, 2023		December 31, 2022
Total collateral balances - UPB	$	951	$	976
Total certificate balances	$	930	$	949

The Company has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of March 31, 2023 and December 31, 2022. Therefore, it does not have a significant maximum exposure to loss related to these unconsolidated VIEs.

A summary of mortgage loans transferred by the Company to unconsolidated securitization trusts that are 60 days or more past due are presented below:

Principal Amount of Transferred Loans 60 Days or More Past Due	March 31, 2023		December 31, 2022
Unconsolidated securitization trusts	$	108	$	119

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Earnings Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

11. Earnings Per Share

Basic earnings per share of common stock is computed by dividing net income by the weighted average number of common stock outstanding during the period. Diluted earnings per share of common stock is computed by dividing net income by the sum of the weighted average number of shares of common stock and any dilutive securities outstanding during the period. The Company’s potentially dilutive securities are share-based awards. The Company applies the treasury stock method to determine the dilutive weighted average number of shares of common stock outstanding based on the outstanding share-based awards. As of March 31, 2023 and December 31, 2022, the Company had 10 million preferred shares authorized at $0.00001, with zero shares issued and outstanding and aggregate liquidation preference of zero dollars.

The following table sets forth the computation of basic and diluted net income per common share (amounts in millions, except per share amounts):

	Three Months Ended March 31,
Computation of Earnings Per Share	2023		2022
Net income	$	37	$	658
Weighted average shares of common stock outstanding (in thousands):
Basic	69,008		73,864
Dilutive effect of stock awards	1,471		2,704
Diluted	70,479		76,568
Earnings per common share
Basic	$	0.54	$	8.91
Diluted	$	0.52	$	8.59

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Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

For the three months ended March 31, 2023 and 2022, the effective tax rate for operations was (5.6)% and 24.0%, respectively, which differed from the statutory federal rate of 21% primarily due to state income taxes and nondeductible executive compensation. The effective tax rate decreased during the three months ended March 31, 2023 compared to the same period in 2022, primarily due to the impact of quarterly discrete tax items relative to the income before taxes for the respective periods, including the excess tax benefit from stock-based compensation.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

13. Fair Value Measurements

Fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a three-tiered fair value hierarchy has been established based on the level of observable inputs used in the measurement of fair value (e.g., Level 1 representing quoted prices for identical assets or liabilities in an active market; Level 2 representing values using observable inputs other than quoted prices included within Level 1; and Level 3 representing estimated values based on significant unobservable inputs).

There have been no significant changes to the valuation techniques and inputs used by the Company in estimating fair values of Level 2 and Level 3 assets and liabilities as disclosed in the Company’s Annual Reports on Form 10-K for the year ended December 31, 2022.

The following tables present the estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured at fair value on a recurring basis:

	March 31, 2023
			Recurring Fair Value Measurements
Fair Value - Recurring Basis	Total Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage loans held for sale	$	937	$	—	$	866	$	71
Mortgage servicing rights	6,566		—		—		6,566
Equity investments	44		2		—		42
Derivative financial instruments
IRLCs	33		—		—		33
LPCs	3		—		—		3
Forward MBS trades	18		—		18		—
Treasury futures	71		—		71		—
Liabilities
Derivative financial instruments
Forward MBS trades	10		—		10		—
Treasury futures	1		—		1		—
Mortgage servicing rights financing	21		—		—		21
Excess spread financing	491		—		—		491

	December 31, 2022
			Recurring Fair Value Measurements
Fair Value - Recurring Basis	Total Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage loans held for sale	$	893	$	—	$	819	$	74
Mortgage servicing rights	6,654		—		—		6,654
Equity investments	47		2		—		45
Derivative financial instruments
IRLCs	22		—		—		22
Forward MBS trades	8		—		8		—
LPCs	1		—		—		1
Liabilities
Derivative financial instruments
Forward MBS trades	9		—		9		—
LPCs	1		—		—		1
Treasury futures	14		—		14		—
Mortgage servicing rights financing	19		—		—		19
Excess spread financing	509		—		—		509

The tables below present a reconciliation for all of the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis:

	Three Months Ended March 31, 2023
	Assets								Liabilities
Fair Value - Level 3 Assets and Liabilities	Mortgage servicing rights		Mortgage loans held for sale		Equity investments		IRLCs		Excess spread financing		Mortgage servicing rights financing
Balance - beginning of period	$	6,654	$	74	$	45	$	22	$	509	$	19
Changes in fair value included in earnings	(230)		1		(3)		11		4		2
Purchases/additions (1)	102		28		—		—		—		—
Issuances	54		—		—		—		—		—
Sales/dispositions (2)	(15)		(31)		—		—		—		—
Repayments	—		(1)		—		—		(4)		—
Settlements	—		—		—		—		(18)		—
Other changes	1		—		—		—		—		—
Balance - end of period	$	6,566	$	71	$	42	$	33	$	491	$	21

	Three Months Ended March 31, 2022
	Assets						Liabilities
Fair Value - Level 3 Assets and Liabilities	Mortgage servicing rights		Equity investments		IRLCs		Excess spread financing		Mortgage servicing rights financing
Balance - beginning of period	$	4,223	$	54	$	134	$	768	$	10
Changes in fair value included in earnings	563		—		(62)		79		20
Purchases	1,015		—		—		—		—
Issuances	200		—		—		—		—
Sales	(4)		—		—		—		—
Settlements	—		—		—		(32)		—
Other changes	9		—		—		—		—
Balance - end of period	$	6,006	$	54	$	72	$	815	$	30

(1)Additions for mortgages loans held for sale include loans that are purchased or transferred in.

(2)Dispositions for mortgage loans held for sales include loans that are sold or transferred out.

The Company had immaterial LPCs assets and liabilities as of March 31, 2023 and March 31, 2022. No transfers were made in or out of Level 3 fair value assets and liabilities for the Company during the three months ended March 31, 2023 and 2022.

The table below presents the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities.

	March 31, 2023									December 31, 2022
	Range						Weighted Average			Range						Weighted Average
Level 3 Inputs	Min			Max						Min			Max
MSR(1)
Discount rate	10.3		%	13.6		%	11.4		%	10.4		%	13.7		%	11.4		%
Prepayment speed	6.3		%	13.2		%	7.5		%	6.3		%	12.2		%	7.2		%
Cost to service per loan(2)	$	56		$	161		$	85		$	54		$	155		$	80
Average life(3)							8.1 years									8.1 years
Mortgage loans held for sale
Market pricing	45.0		%	103.6		%	77.7		%	37.3		%	114.7		%	77.4		%
IRLCs
Value of servicing (reflected as a percentage of loan commitment)	—		%	3.8		%	2.1		%	(0.6)		%	3.9		%	2.3		%
Excess spread financing(1)
Discount rate	9.9		%	13.7		%	11.2		%	10.0		%	13.8		%	11.3		%
Prepayment speed	7.4		%	14.1		%	9.6		%	6.9		%	13.3		%	9.2		%
Average life(3)							6.5 years									6.6 years
Mortgage servicing rights financing
Advance financing and counterparty fee rates	5.2		%	8.5		%	6.8		%	5.2		%	8.6		%	7.1		%
Annual advance recovery rates	15.9		%	20.7		%	17.5		%	15.9		%	20.6		%	17.3		%

(1)The inputs are weighted by investor.

(2)Presented in whole dollar amounts.

(3)Average life is included for informational purposes.

The tables below present a summary of the estimated carrying amount and fair value of the Company’s financial instruments not carried at fair value:

	March 31, 2023
	Carrying Amount		Fair Value
Financial Instruments			Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	534	$	534	$	—	$	—
Restricted cash	133		133		—		—
Advances and other receivables, net	933		—		—		933
Loans subject to repurchase from Ginnie Mae	1,889		—		1,889		—
Financial liabilities
Unsecured senior notes, net	2,675		—		2,243		—
Advance and warehouse facilities, net	2,934		—		2,947		—
Liability for loans subject to repurchase from Ginnie Mae	1,889		—		1,889		—

	December 31, 2022
	Carrying Amount		Fair Value
Financial Instruments			Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	527	$	527	$	—	$	—
Restricted cash	175		175		—		—
Advances and other receivables, net	1,019		—		—		1,019
Loans subject to repurchase from Ginnie Mae	1,865		—		1,865		—
Financial liabilities
Unsecured senior notes, net	2,673		—		2,209		—
Advance and warehouse facilities, net	2,885		—		2,896		—
Liability for loans subject to repurchase from Ginnie Mae	1,865		—		1,865		—

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Capital Requirements

3 Months Ended

Mar. 31, 2023

Mortgage Banking [Abstract]

Capital Requirements

14. Capital Requirements

Certain of the Company’s secondary market investors require minimum net worth (“capital”) requirements, as specified in the respective selling and servicing agreements. In addition, these investors may require capital ratios in excess of the stated requirements to approve large servicing transfers. To the extent that these requirements are not met, the Company’s secondary market investors may utilize a range of remedies ranging from sanctions, suspension or ultimately termination of the Company’s selling and servicing agreements, which would prohibit the Company from further originating or securitizing these specific types of mortgage loans or being an approved servicer. The Company’s various capital requirements related to its outstanding selling and servicing agreements are measured based on the Company’s operating subsidiary, Nationstar Mortgage LLC. As of March 31, 2023, the Company was in compliance with its selling and servicing capital requirements.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

15. Commitments and Contingencies

Litigation and Regulatory

The Company and its subsidiaries are routinely and currently involved in a number of legal proceedings, including, but not limited to, judicial, arbitration, regulatory and governmental proceedings related to matters that arise in connection with the conduct of the Company’s business. While it is not possible to predict the outcome of any of these matters, based on the Company’s assessment of the facts and circumstances, it does not believe any of these matters, individually or in the aggregate, will have a material adverse effect on the financial position, results of operations or cash flows of the Company. However, actual outcomes may differ from those expected and could have a material effect on our financial position, results of operations, or cash flows in a future period.

The Company will continue to monitor legal matters for further developments that could affect the amount of the accrued liability that has been previously established. Legal-related expenses for the Company include legal settlements and the fees paid to external legal service providers and are included in general and administrative expenses on the condensed consolidated statements of operations. During the three months ended March 31, 2023 and 2022, the Company recorded $9 of legal-related expenses and $2 of legal-related recoveries, net of legal-related expenses, respectively. Management currently believes the aggregate range of reasonably possible loss is $2 to $5 in excess of the accrued liability (if any) related to those matters as of March 31, 2023. This estimated range of possible loss is based upon currently available information and is subject to significant judgment, numerous assumptions and known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary substantially from the current estimate.

Other Loss Contingencies

As part of the Company’s ongoing operations, it acquires servicing rights of mortgage loan portfolios that are subject to indemnification based on the representations and warranties of the seller. From time to time, the Company will seek recovery under these representations and warranties for incurred costs. As of March 31, 2023, the Company believes all recorded balances for which recovery is sought from the seller are valid claims, and no evidence suggests additional reserves are warranted.

Loan and Other Commitments

The Company enters into IRLCs with prospective borrowers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the borrower. The Company also enters into LPCs with prospective sellers. These loan commitments are treated as derivatives and are carried at fair value. See Note 8, Derivative Financial Instruments, for more information.

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Segment Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment Information

16. Segment Information

The Company’s segments reflect the internal reporting the chief operating decision maker uses to evaluate operating performance and are based upon the Company’s organizational structure, which focuses primarily on the services offered. A brief description of our current business segments is as follows:

Servicing: This segment performs operational activities on behalf of investors or owners of the underlying mortgages and mortgage servicing rights, including collecting and disbursing borrower payments, investor reporting, customer service, modifying loans where appropriate to help borrowers stay current, and when necessary performing collections, foreclosures, and the sale of REO.

Originations: This segment originates residential mortgage loans through our direct-to-consumer channel, which provides refinance options for our existing customers, and through our correspondent channel, which purchases or originates loans from mortgage bankers.

Corporate/Other: Functional expenses are allocated to individual segments based on the actual cost of services performed, direct resource utilization, or headcount percentage for shared services. During the fourth quarter of 2022, the Company began allocating shared services based on headcount instead of an estimate of percentage use as it changed its segment measures provided to and used by the chief operating decision maker. As a result, all costs for shared services are allocated to individual segments based on headcount. The Company restated segment information for the historical periods presented herein to reflect the allocation method change and to conform to the current presentation. The change affects total expenses for Servicing and Originations segments and Corporate/Other, but had no effect on condensed consolidated statements of operations. Non-allocated corporate expenses include the administrative costs of executive management and other corporate functions that are not directly attributable to the Company’s operating segments. Revenues generated on inter-segment services performed are valued based on similar services provided to external parties. Eliminations are included in Corporate/Other.

On March 31, 2022, the Company completed the sale of its Mortgage Servicing Platform to Sagent and recorded a gain of $223, which was included in “other income, net” within the condensed statements of operations and reported under Corporate/Other. Refer to Note 2, Dispositions for further details.

The following tables present financial information by segment:

	Three Months Ended March 31, 2023
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	231	$	11	$	19	$	261
Net gain on mortgage loans held for sale	—		69		—		69
Total revenues	231		80		19		330
Total expenses	153		56		52		261
Interest income	79		6		—		85
Interest expense	(63)		(7)		(40)		(110)
Other expense, net	—		—		(9)		(9)
Total other income (expenses), net	16		(1)		(49)		(34)
Income (loss) before income tax expense (benefit)	$	94	$	23	$	(82)	$	35
Depreciation and amortization for property and equipment and intangible assets	$	2	$	2	$	5	$	9
Total assets	$	10,050	$	760	$	1,847	$	12,657

	Three Months Ended March 31, 2022
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	701	$	42	$	12	$	755
Net gain on mortgage loans held for sale	15		282		—		297
Total revenues	716		324		12		1,052
Total expenses	122		174		42		338
Interest income	19		17		—		36
Interest expense	(54)		(12)		(40)		(106)
Other income, net	—		—		222		222
Total other (expenses) income, net	(35)		5		182		152
Income before income tax expense	$	559	$	155	$	152	$	866
Depreciation and amortization for property and equipment and intangible assets	$	5	$	4	$	2	$	11
Total assets	$	9,825	$	2,666	$	1,999	$	14,490

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Nature of Business and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation

Basis of Presentation

The interim condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Reports on Form 10-K for the year ended December 31, 2022.

The interim condensed consolidated financial statements are unaudited; however, in the opinion of management, all adjustments, consisting of normal recurring items, considered necessary for a fair presentation of the results of the interim periods have been included. Dollar amounts are reported in millions, except per share data and other key metrics, unless otherwise noted

Share-based Payment Arrangement

.

Basis of consolidation

Basis of ConsolidationThe condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, other entities in which the Company has a controlling financial interest and those variable interest entities (“VIE”) where the Company’s wholly-owned subsidiaries are the primary beneficiaries. Assets and liabilities of VIEs and their respective results of operations are consolidated from the date that the Company became the primary beneficiary through the date the Company ceases to be the primary beneficiary. The Company applies the equity method of accounting to investments where it is able to exercise significant influence, but not control, over the policies and procedures of the entity and owns less than 50% of the voting interests. These investments are initially measured at cost and subsequently adjusted for the Company’s proportionate share of earnings and losses in the investee. Investments in certain companies over which the Company does not exert significant influence are recorded at fair value, or at cost and updated for observable price changes upon election of measurement alternative, at the end of each reporting period. Intercompany balances and transactions on consolidated entities have been eliminated.

Use of estimates

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates due to factors such as adverse changes in the economy, macro-economic uncertainty, changes in interest rates, secondary market pricing for loans held for sale and derivatives, strength of underwriting and servicing practices, changes in prepayment assumptions, declines in home prices or discrete events adversely affecting specific borrowers and such differences could be material.

Reclassification

Reclassifications

Certain reclassifications have been made in the 2022 condensed consolidated statement of cash flows to conform to 2023 presentation. Such reclassifications were not material and did not affect total revenues or net income.

Recent accounting guidance adopted

Recent Accounting Guidance AdoptedThe Company did not adopt any accounting guidance during the three months ended March 31, 2023 that had a material impact on its condensed consolidated financial statements or disclosures.

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Mortgage Servicing Rights and Related Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Transfers and Servicing [Abstract]

Schedule of servicing assets at fair value

The following table sets forth the carrying value of the Company’s mortgage servicing rights (“MSRs”) and the related liabilities. In estimating the fair value of all mortgage servicing rights and related liabilities, the impact of the current environment was considered in the determination of key assumptions.

MSRs and Related Liabilities	March 31, 2023		December 31, 2022
MSRs - fair value	$	6,566	$	6,654
Excess spread financing at fair value	$	491	$	509
Mortgage servicing rights financing at fair value	21		19
MSR related liabilities - nonrecourse at fair value	$	512	$	528

The following table sets forth the activities of MSRs:

	Three Months Ended March 31,
MSRs - Fair Value	2023		2022
Fair value - beginning of period	$	6,654	$	4,223
Additions:
Servicing retained from mortgage loans sold	54		200
Purchases of servicing rights	102		1,015
Dispositions:
Sales of servicing assets	(15)		(4)
Changes in fair value:
Changes in valuation inputs or assumptions used in the valuation model (MSR MTM)	(105)		798
Changes in valuation due to amortization	(125)		(235)
Other changes(1)	1		9
Fair value - end of period	$	6,566	$	6,006

(1)Amounts primarily represent negative fair values reclassified from the MSR asset to reserves as underlying loans are removed from the MSR and other reclassification adjustments.

The following table provides a breakdown of UPB and fair value for the Company’s MSRs:

	March 31, 2023				December 31, 2022
MSRs - UPB and Fair Value Breakdown by Investor Pools	UPB		Fair Value		UPB		Fair Value
Agency	$	382,368	$	6,258	$	380,502	$	6,322
Non-agency	30,070		308		30,880		332
Total	$	412,438	$	6,566	$	411,382	$	6,654

Schedule of sensitivity analysis of fair value, transferor's interests in transferred financial assets

The following table shows the hypothetical effect on the fair value of the Company’s MSRs when applying certain unfavorable variations of key assumptions to these assets for the dates indicated:

	Discount Rate				Total Prepayment Speeds				Cost to Service per Loan
MSRs - Hypothetical Sensitivities	100 bps Adverse Change		200 bps Adverse Change		10% Adverse Change		20% Adverse Change		10% Adverse Change		20% Adverse Change
March 31, 2023
Mortgage servicing rights	$	(273)	$	(525)	$	(139)	$	(270)	$	(65)	$	(130)
December 31, 2022
Mortgage servicing rights	$	(266)	$	(511)	$	(136)	$	(264)	$	(61)	$	(122)

The following table shows the hypothetical effect on the Company’s excess spread financing fair value when applying certain unfavorable variations of key assumptions to these liabilities for the dates indicated:

	Discount Rate				Prepayment Speeds
Excess Spread Financing - Hypothetical Sensitivities	100 bps Adverse Change		200 bps Adverse Change		10% Adverse Change		20% Adverse Change
March 31, 2023
Excess spread financing	$	19	$	38	$	10	$	22
December 31, 2022
Excess spread financing	$	19	$	40	$	11	$	22

Schedule of fees earned in exchange for servicing financial assets

The following table sets forth the items comprising total “revenues - service related, net”:

	Three Months Ended March 31,
Revenues - Service Related, net	2023		2022
Contractually specified servicing fees(1)	$	384	$	327
Other service-related income(1)	14		33
Incentive and modification income(1)	6		9
Servicing late fees(1)	21		19
Mark-to-market adjustments - Servicing(2)(3)	(61)		553
Amortization, net of accretion(4)	(115)		(202)
Originations service fees(5)	11		42
Corporate/Xome related service fees	19		12
Other(6)	(18)		(38)
Total revenues - Service Related, net	$	261	$	755

(1)The Company recognizes revenue on an earned basis for services performed. Amounts include subservicing related revenues. Amounts also include servicing fees from loans sold with servicing retained of $177 and $146 for the three months ended March 31, 2023 and 2022, respectively.

(2)Mark-to-market (“MTM”) adjustments - Servicing include fair value adjustments on MSR, excess spread financing and MSR financing liabilities. The amount of MSR MTM includes the impact of negative modeled cash flows which have been transferred to reserves on advances and other receivables. The negative modeled cash flows relate to advances and other receivables associated with inactive and liquidated loans that are no longer part of the MSR portfolio. The impact of negative modeled cash flows was $9 and $6 for the three months ended March 31, 2023 and 2022, respectively.

(3)MTM adjustments - Servicing includes a gain of $59 and loss of $140 from MSR hedging activities during the three months ended March 31, 2023, and 2022, respectively.

(4)Amortization is net of excess spread accretion of $10 and $33 during the three months ended March 31, 2023 and 2022, respectively.

(5)Amounts include fees collected from customers for originated loans and from other lenders for loans purchased through the correspondent channel, and include loan application, underwriting, and other similar fees.

(6)Other represents the excess servicing fee that the Company pays to the counterparties under the excess spread financing arrangements, portfolio runoff and the payments made associated with MSR financing arrangements.

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Advances and Other Receivables (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Schedule of accounts receivable

Advances and other receivables, net, consists of the following:

Advances and Other Receivables, Net	March 31, 2023		December 31, 2022
Servicing advances, net of $9 and $12 purchase discount, respectively	$	970	$	1,053
Receivables from agencies, investors and prior servicers, net of $7 purchase discount	111		103
Reserves	(148)		(137)
Total advances and other receivables, net	$	933	$	1,019

The following table sets forth the activities of the servicing reserves for advances and other receivables:

	Three Months Ended March 31,
Reserves for Advances and Other Receivables	2023		2022
Balance - beginning of period	$	137	$	167
Provision and other additions(1)	16		16
Write-offs	(5)		(31)
Balance - end of period	$	148	$	152

(1)The Company recorded a provision of $9 and $6 through the MTM adjustments in “revenues - service related, net”, in the condensed consolidated statements of operations during the three months ended March 31, 2023 and 2022, respectively, for inactive and liquidated loans that are no longer part of the MSR portfolio. Other additions represent reclassifications of required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate.

The following tables set forth the activities of the purchase discounts for advances and other receivables:

	Three Months Ended March 31,
	2023				2022
Purchase Discount for Advances and Other Receivables	Servicing Advances		Receivables from Agencies, Investors and Prior Servicers		Servicing Advances		Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	12	$	7	$	19	$	12
Utilization of purchase discounts	(3)		—		(3)		(4)
Balance - end of period	$	9	$	7	$	16	$	8

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Mortgage Loans Held for Sale (Tables)

3 Months Ended

Mar. 31, 2023

Mortgage Loans Held for Sale and Investment [Abstract]

Schedule of mortgage loans held-for-sale

Mortgage loans held for sale are recorded at fair value as set forth below:

Mortgage Loans Held for Sale	March 31, 2023		December 31, 2022
Mortgage loans held for sale – UPB	$	959	$	921
Mark-to-market adjustment(1)	(22)		(28)
Total mortgage loans held for sale	$	937	$	893

(1)The mark-to-market adjustment includes net change in unrealized gain/loss, premium on correspondent loans and fees on direct-to-consumer loans. The mark-to-market adjustment is recorded in “revenues - net gain on mortgage loans held for sale” in the condensed consolidated statements of operations.

The following table sets forth the activities of mortgage loans held for sale:

	Three Months Ended March 31,
Mortgage Loans Held for Sale	2023		2022
Balance - beginning of period	$	893	$	4,381
Loans sold and loan payments received	(2,940)		(14,527)
Mortgage loans originated and purchased, net of fees	2,760		11,598
Repurchase of loans out of Ginnie Mae securitizations(1)	222		2,249
Net change in unrealized gain (loss) on retained loans held for sale	9		(109)
Net transfers of mortgage loans held for sale(2)	(7)		1
Balance - end of period	$	937	$	3,593

(1)The Company has the optional right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days. The majority of Ginnie Mae repurchased loans are repurchased in connection with loan modifications and loan resolution activity, with the intent to re-pool into new Ginnie Mae securitizations upon re-performance of the loan or to otherwise sell to third-party investors. Therefore, these loans are classified as held for sale.

(2)Amounts reflect transfers to other assets for loans transitioning into REO status and transfers to advances and other receivables, net, for claims made on certain government insurance mortgage loans. Transfers out are net of transfers in upon receipt of proceeds from an REO sale or claim filing.

The total UPB and fair value of mortgage loans held for sale on non-accrual status was as follows:

	March 31, 2023				December 31, 2022
Mortgage Loans Held for Sale	UPB		Fair Value		UPB		Fair Value
Non-accrual(1)	$	100	$	86	$	102	$	87

(1)Non-accrual UPB includes $85 and $90 of UPB related to Ginnie Mae repurchased loans as of March 31, 2023 and December 31, 2022, respectively.

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of derivative instruments

The following tables provide the outstanding notional balances, fair values of outstanding positions and recorded gains/(losses) for the derivative financial instruments. Gains/(losses) include both realized and unrealized gains/(losses) of each derivative financial instrument.

		March 31, 2023				Three Months Ended March 31, 2023
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gains/(Losses)
Assets
Mortgage loans held for sale
Loan sale commitments	2023	$	399	$	12	$	2
Derivative financial instruments
IRLCs	2023	$	940	$	33	$	11
LPCs	2023	484		3		2
Forward MBS trades	2023	1,056		18		35
Treasury futures	2023	2,445		71		71
Total derivative financial instruments - assets		$	4,925	$	125	$	119
Liabilities
Derivative financial instruments
IRLCs	2023	$	25	$	—	$	—
LPCs	2023	85		—		1
Forward MBS trades	2023	1,439		10		(47)
Treasury futures	2023	193		1		(23)
Total derivative financial instruments - liabilities		$	1,742	$	11	$	(69)

		March 31, 2022				Three Months Ended March 31, 2022
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gains/(Losses)
Assets
Mortgage loans held for sale
Loan sale commitments	2022	$	543	$	1	$	(24)
Derivative financial instruments
IRLCs	2022	$	3,122	$	72	$	(62)
LPCs	2022	203		2		(1)
Forward MBS trades	2022	4,658		79		224
Total derivative financial instruments - assets		$	7,983	$	153	$	161
Liabilities
Derivative financial instruments
IRLCs	2022	$	551	$	5	$	(5)
LPCs	2022	658		8		(6)
Forward MBS trades	2022	695		6		7
Treasury futures	2022	1,097		49		(111)
Total derivative financial instruments - liabilities		$	3,001	$	68	$	(115)

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Indebtedness (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of unsecured senior notes

Unsecured senior notes consist of the following:

Unsecured Senior Notes	March 31, 2023		December 31, 2022
$850 face value, 5.500% interest rate payable semi-annually, due August 2028	$	850	$	850
$650 face value, 5.125% interest rate payable semi-annually, due December 2030	650		650
$600 face value, 6.000% interest rate payable semi-annually, due January 2027	600		600
$600 face value, 5.750% interest rate payable semi-annually, due November 2031	600		600
Unsecured senior notes principal amount	2,700		2,700
Unamortized debt issuance costs	(25)		(27)
Unsecured senior notes, net	$	2,675	$	2,673

Schedule of maturities of long-term debt

As of March 31, 2023, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows:

Year Ending December 31,	Amount
2023 through 2026	$	—
2027	600
Thereafter	2,100
Total unsecured senior notes principal amount	$	2,700

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Securitizations and Financings (Tables)

3 Months Ended

Mar. 31, 2023

Variable Interest Entities and Securitizations [Abstract]

Schedule of assets and liabilities of VIEs included in financial statements

A summary of the assets and liabilities of the Company’s transactions with VIEs included in the Company’s condensed consolidated balance sheets is presented below:

	March 31, 2023		December 31, 2022
Consolidated Transactions with VIEs	Transfers Accounted for as Secured Borrowings		Transfers Accounted for as Secured Borrowings
Assets
Restricted cash	$	70	$	78
Advances and other receivables, net	371		398
Total assets	$	441	$	476
Liabilities
Advance facilities, net(1)	$	300	$	321
Payables and other liabilities	—		1
Total liabilities	$	300	$	322

(1)Refer to advance facilities in Note 9, Indebtedness, for additional information.

The following table shows a summary of the outstanding collateral and certificate balances for securitization trusts for which the Company was the transferor, including any retained beneficial interests and MSRs, that were not consolidated by the Company:

Unconsolidated Securitization Trusts	March 31, 2023		December 31, 2022
Total collateral balances - UPB	$	951	$	976
Total certificate balances	$	930	$	949

A summary of mortgage loans transferred by the Company to unconsolidated securitization trusts that are 60 days or more past due are presented below:

Principal Amount of Transferred Loans 60 Days or More Past Due	March 31, 2023		December 31, 2022
Unconsolidated securitization trusts	$	108	$	119

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of earnings per share

The following table sets forth the computation of basic and diluted net income per common share (amounts in millions, except per share amounts):

	Three Months Ended March 31,
Computation of Earnings Per Share	2023		2022
Net income	$	37	$	658
Weighted average shares of common stock outstanding (in thousands):
Basic	69,008		73,864
Dilutive effect of stock awards	1,471		2,704
Diluted	70,479		76,568
Earnings per common share
Basic	$	0.54	$	8.91
Diluted	$	0.52	$	8.59

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of fair value, assets and liabilities measured on recurring basis

The following tables present the estimated carrying amount and fair value of the Company’s financial instruments and other assets and liabilities measured at fair value on a recurring basis:

	March 31, 2023
			Recurring Fair Value Measurements
Fair Value - Recurring Basis	Total Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage loans held for sale	$	937	$	—	$	866	$	71
Mortgage servicing rights	6,566		—		—		6,566
Equity investments	44		2		—		42
Derivative financial instruments
IRLCs	33		—		—		33
LPCs	3		—		—		3
Forward MBS trades	18		—		18		—
Treasury futures	71		—		71		—
Liabilities
Derivative financial instruments
Forward MBS trades	10		—		10		—
Treasury futures	1		—		1		—
Mortgage servicing rights financing	21		—		—		21
Excess spread financing	491		—		—		491

	December 31, 2022
			Recurring Fair Value Measurements
Fair Value - Recurring Basis	Total Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage loans held for sale	$	893	$	—	$	819	$	74
Mortgage servicing rights	6,654		—		—		6,654
Equity investments	47		2		—		45
Derivative financial instruments
IRLCs	22		—		—		22
Forward MBS trades	8		—		8		—
LPCs	1		—		—		1
Liabilities
Derivative financial instruments
Forward MBS trades	9		—		9		—
LPCs	1		—		—		1
Treasury futures	14		—		14		—
Mortgage servicing rights financing	19		—		—		19
Excess spread financing	509		—		—		509

Schedule of fair value, assets and liabilities measured on recurring basis, unobservable input reconciliation

The tables below present a reconciliation for all of the Company’s Level 3 assets and liabilities measured at fair value on a recurring basis:

	Three Months Ended March 31, 2023
	Assets								Liabilities
Fair Value - Level 3 Assets and Liabilities	Mortgage servicing rights		Mortgage loans held for sale		Equity investments		IRLCs		Excess spread financing		Mortgage servicing rights financing
Balance - beginning of period	$	6,654	$	74	$	45	$	22	$	509	$	19
Changes in fair value included in earnings	(230)		1		(3)		11		4		2
Purchases/additions (1)	102		28		—		—		—		—
Issuances	54		—		—		—		—		—
Sales/dispositions (2)	(15)		(31)		—		—		—		—
Repayments	—		(1)		—		—		(4)		—
Settlements	—		—		—		—		(18)		—
Other changes	1		—		—		—		—		—
Balance - end of period	$	6,566	$	71	$	42	$	33	$	491	$	21

	Three Months Ended March 31, 2022
	Assets						Liabilities
Fair Value - Level 3 Assets and Liabilities	Mortgage servicing rights		Equity investments		IRLCs		Excess spread financing		Mortgage servicing rights financing
Balance - beginning of period	$	4,223	$	54	$	134	$	768	$	10
Changes in fair value included in earnings	563		—		(62)		79		20
Purchases	1,015		—		—		—		—
Issuances	200		—		—		—		—
Sales	(4)		—		—		—		—
Settlements	—		—		—		(32)		—
Other changes	9		—		—		—		—
Balance - end of period	$	6,006	$	54	$	72	$	815	$	30

Fair value measurement inputs and valuation techniques

The table below presents the quantitative information for significant unobservable inputs used in the fair value measurement of Level 3 assets and liabilities.

	March 31, 2023									December 31, 2022
	Range						Weighted Average			Range						Weighted Average
Level 3 Inputs	Min			Max						Min			Max
MSR(1)
Discount rate	10.3		%	13.6		%	11.4		%	10.4		%	13.7		%	11.4		%
Prepayment speed	6.3		%	13.2		%	7.5		%	6.3		%	12.2		%	7.2		%
Cost to service per loan(2)	$	56		$	161		$	85		$	54		$	155		$	80
Average life(3)							8.1 years									8.1 years
Mortgage loans held for sale
Market pricing	45.0		%	103.6		%	77.7		%	37.3		%	114.7		%	77.4		%
IRLCs
Value of servicing (reflected as a percentage of loan commitment)	—		%	3.8		%	2.1		%	(0.6)		%	3.9		%	2.3		%
Excess spread financing(1)
Discount rate	9.9		%	13.7		%	11.2		%	10.0		%	13.8		%	11.3		%
Prepayment speed	7.4		%	14.1		%	9.6		%	6.9		%	13.3		%	9.2		%
Average life(3)							6.5 years									6.6 years
Mortgage servicing rights financing
Advance financing and counterparty fee rates	5.2		%	8.5		%	6.8		%	5.2		%	8.6		%	7.1		%
Annual advance recovery rates	15.9		%	20.7		%	17.5		%	15.9		%	20.6		%	17.3		%

(1)The inputs are weighted by investor.

(2)Presented in whole dollar amounts.

(3)Average life is included for informational purposes.

Schedule of fair value, by balance sheet grouping

The tables below present a summary of the estimated carrying amount and fair value of the Company’s financial instruments not carried at fair value:

	March 31, 2023
	Carrying Amount		Fair Value
Financial Instruments			Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	534	$	534	$	—	$	—
Restricted cash	133		133		—		—
Advances and other receivables, net	933		—		—		933
Loans subject to repurchase from Ginnie Mae	1,889		—		1,889		—
Financial liabilities
Unsecured senior notes, net	2,675		—		2,243		—
Advance and warehouse facilities, net	2,934		—		2,947		—
Liability for loans subject to repurchase from Ginnie Mae	1,889		—		1,889		—

	December 31, 2022
	Carrying Amount		Fair Value
Financial Instruments			Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	527	$	527	$	—	$	—
Restricted cash	175		175		—		—
Advances and other receivables, net	1,019		—		—		1,019
Loans subject to repurchase from Ginnie Mae	1,865		—		1,865		—
Financial liabilities
Unsecured senior notes, net	2,673		—		2,209		—
Advance and warehouse facilities, net	2,885		—		2,896		—
Liability for loans subject to repurchase from Ginnie Mae	1,865		—		1,865		—

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of segment reporting information

The following tables present financial information by segment:

	Three Months Ended March 31, 2023
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	231	$	11	$	19	$	261
Net gain on mortgage loans held for sale	—		69		—		69
Total revenues	231		80		19		330
Total expenses	153		56		52		261
Interest income	79		6		—		85
Interest expense	(63)		(7)		(40)		(110)
Other expense, net	—		—		(9)		(9)
Total other income (expenses), net	16		(1)		(49)		(34)
Income (loss) before income tax expense (benefit)	$	94	$	23	$	(82)	$	35
Depreciation and amortization for property and equipment and intangible assets	$	2	$	2	$	5	$	9
Total assets	$	10,050	$	760	$	1,847	$	12,657

	Three Months Ended March 31, 2022
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	701	$	42	$	12	$	755
Net gain on mortgage loans held for sale	15		282		—		297
Total revenues	716		324		12		1,052
Total expenses	122		174		42		338
Interest income	19		17		—		36
Interest expense	(54)		(12)		(40)		(106)
Other income, net	—		—		222		222
Total other (expenses) income, net	(35)		5		182		152
Income before income tax expense	$	559	$	155	$	152	$	866
Depreciation and amortization for property and equipment and intangible assets	$	5	$	4	$	2	$	11
Total assets	$	9,825	$	2,666	$	1,999	$	14,490

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Discontinued Operations and Disposal Groups (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Sagent M&C, LLC
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income (Loss) from Equity Method Investments	$ (7.0)
Equity Method Investments	230.0	$ 250.0
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Mortgage Servicing Platform
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Discontinued Operation, Transaction Cost	$ 0.0	4.0
Purchase price		260.0
Disposal Group, Including Discontinued Operation, Assets, Noncurrent		31.0
Cash received from disposal		9.9
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal		$ 223.0
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Mortgage Servicing Platform | Sagent M&C, LLC | Mr. Cooper Group Inc.
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Ownership interest percentage		19.90%

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Mortgage Servicing Rights and Related Liabilities - MSRs and Related Liabilities (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Mortgage Servicing Rights [Line Items]
Excess spread financing at fair value	$ 491	$ 509
Mortgage servicing rights financing at fair value	21	19
MSR related liabilities - nonrecourse at fair value	512	528
Mortgage servicing rights
Mortgage Servicing Rights [Line Items]
MSRs - fair value	$ 6,566	$ 6,654

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Mortgage Servicing Rights and Related Liabilities - MSR's at Fair Value (Details) - Mortgage servicing rights - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Servicing Asset at Fair Value, Amount [Roll Forward]
Fair value - beginning of period	$ 6,654	$ 4,223
Servicing retained from mortgage loans sold	54	200
Purchases of servicing rights	102	1,015
Sales of servicing assets	(15)	(4)
Changes in valuation inputs or assumptions used in the valuation model (MSR MTM)	(105)	798
Changes in valuation due to amortization	(125)	(235)
Other changes(1)	1	9
Fair value - end of period	$ 6,566	$ 6,006

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Mortgage Servicing Rights and Related Liabilities - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Servicing Asset at Amortized Cost [Line Items]
Excess spread financing - fair value	$ 491	$ 509
Forward MSRs Sold
Servicing Asset at Amortized Cost [Line Items]
UPB	1,256		$ 361
Forward MSRs Sold, Subservicing Retained
Servicing Asset at Amortized Cost [Line Items]
UPB	271		$ 342
Excess spread financing
Servicing Asset at Amortized Cost [Line Items]
UPB	$ 81,041	$ 83,706

XML

Mortgage Servicing Rights and Related Liabilities - UPB related to owned MSRs (Details) - Mortgage servicing rights - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Owned Service Loans [Line Items]
UPB	$ 412,438	$ 411,382
Fair Value	6,566	6,654
Agency
Owned Service Loans [Line Items]
UPB	382,368	380,502
Fair Value	6,258	6,322
Non-agency
Owned Service Loans [Line Items]
UPB	30,070	30,880
Fair Value	$ 308	$ 332

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Mortgage Servicing Rights and Related Liabilities - Fair Value Sensitivity Analysis (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Mortgage servicing rights
Excess Spread Financing - Hypothetical Sensitivities
Total prepayment speeds, 10% Adverse Change	$ (139)	$ (136)
Total prepayment speeds, 20% Adverse Change	(270)	(264)
Cost to Service per Loan, 10% Adverse Change	(65)	(61)
Cost to Service per Loan, 20% Adverse Change	(130)	(122)
Excess spread financing
Excess Spread Financing - Hypothetical Sensitivities
Total prepayment speeds, 10% Adverse Change	10	11
Total prepayment speeds, 20% Adverse Change	22	22
100 bps Adverse Change | Mortgage servicing rights
Excess Spread Financing - Hypothetical Sensitivities
Discount Rate	(273)	(266)
100 bps Adverse Change | Excess spread financing
Excess Spread Financing - Hypothetical Sensitivities
Discount Rate	19	19
200 bps Adverse Change | Mortgage servicing rights
Excess Spread Financing - Hypothetical Sensitivities
Discount Rate	(525)	(511)
200 bps Adverse Change | Excess spread financing
Excess Spread Financing - Hypothetical Sensitivities
Discount Rate	$ 38	$ 40

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Mortgage Servicing Rights and Related Liabilities - Servicing Revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Transfers and Servicing [Abstract]
Contractually specified servicing fees(1)	$ 384,000,000	$ 327,000,000
Other service-related income(1)	14,000,000	33,000,000
Incentive and modification income(1)	6,000,000	9,000,000
Servicing late fees(1)	21,000,000	19,000,000
Mark-to-market adjustments - Servicing(2)(3)	(61,000,000)	553,000,000
Amortization, net of accretion(4)	(115,000,000)	(202,000,000)
Originations service fees(5)	11,000,000	42,000,000
Corporate/Xome related service fees	19,000,000	12,000,000
Other(6)	(18,000,000)	(38,000,000)
Total revenues - Service Related, net	261,000,000	755,000,000
Cash Flows Between Transferor and Transferee, Servicing Fees	177,000,000	146,000,000
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans	9,000,000	6,000,000
(Gain) loss on MSR hedging activities	59,000,000	(140,000,000)
Servicing fee income accretion expense	$ 10,000,000	$ 33,000,000

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Advances and Other Receivables - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Receivables [Abstract]
Servicing advances, net of $9 and $12 purchase discount, respectively	$ 970	$ 1,053
Receivables from agencies, investors and prior servicers, net of $7 purchase discount	111	103
Reserves	(148)	(137)
Total advances and other receivables, net	933	1,019
Servicing advances discount	9	12	$ 16	$ 19
Receivables discount	$ 7	$ 7	$ 8	$ 12

XML

Advances and Other Receivables - Advances and Other Receivables Roll Forward (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Advances And Other Receivables, Reserves [Roll Forward]
Balance - beginning of period	$ 137	$ 167
Provision and other additions(1)	16	16
Write-offs	(5)	(31)
Balance - end of period	148	152
Cumulative incurred losses related to advances and other receivables associated with inactive and liquidated loans	$ 9	$ 6

XML

Advances and Other Receivables - Purchase Discount (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Servicing Advances
Servicing Advances, Discount	$ 12	$ 19
Accretion of Service Advances Discount	(3)	(3)
Servicing Advances, Discount	9	16
Receivables from Agencies, Investors and Prior Servicers
Receivable with Imputed Interest, Discount	7	8
Receivable Discount, Accretion Expense	0	(4)
Receivable with Imputed Interest, Discount	$ 7	$ 12

XML

Advances and Other Receivables - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing receivable, allowance for credit loss	$ 38	$ 30
Financial instruments collection period	39 months
Advances and other receivables reserve
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision	$ 2	4
Other Credit Losses, Write-off		(5)
Financing receivable, allowance for credit loss	31	22
Purchase Discount
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing receivable, allowance for credit loss	$ 7	$ 8

XML

Mortgage Loans Held for Sale - Mortgage Loans Held for Sale (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Mortgage loans held for sale – UPB	$ 959	$ 921
Mark-to-market adjustment(1)	(22)	(28)
Total mortgage loans held for sale	937	893
UPB	100	102
Fair Value	86	87
Ginnie mae repurchased loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
UPB	$ 85	$ 90

XML

Mortgage Loans Held for Sale - Reconciliation to Cash Flow (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward]
Balance - beginning of period	$ 893	$ 4,381
Loans sold and loan payments received	(2,940)	(14,527)
Mortgage loans originated and purchased, net of fees	2,760	11,598
Repurchase of loans out of Ginnie Mae securitizations(1)	222	2,249
Net change in unrealized gain (loss) on retained loans held for sale	9	(109)
Net transfers of mortgage loans held for sale(2)	(7)	1
Balance - end of period	$ 937	$ 3,593

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Mortgage Loans Held for Sale - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Mortgage Loans Held for Sale and Investment [Abstract]
Sale of mortgage loans held for sale	$ 2,931	$ 14,472
Gain (Loss) on Sale of Mortgage Loans	(9)	$ (55)
Mortgage loans held for sale in foreclosure	$ 58		$ 65

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Loans Subject to Repurchase from Ginnie Mae (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans subject to repurchase from Ginnie Mae	$ 1,889	$ 1,865
Financial Asset, Equal to or Greater than 90 Days Past Due | Payment Deferral
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans subject to repurchase from Ginnie Mae	$ 1,649	$ 1,661

XML

Goodwill and Intangible Assets (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 120	$ 120
Intangible assets	$ 6	$ 8

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Derivative Financial Instruments - Derivative Instruments (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Treasury futures
Derivatives, Fair Value [Line Items]
Fair Value		$ (49)
Assets
Derivatives, Fair Value [Line Items]
Outstanding Notional	$ 4,925	7,983
Fair Value	125	153
Gains/(Losses)	119	161
Assets | Loan sale commitments
Derivatives, Fair Value [Line Items]
Outstanding Notional	399	543
Fair Value	12	1
Gains/(Losses)	2	(24)
Assets | IRLCs
Derivatives, Fair Value [Line Items]
Outstanding Notional	940	3,122
Fair Value	33	72
Gains/(Losses)	11	(62)
Assets | LPCs
Derivatives, Fair Value [Line Items]
Outstanding Notional	484	203
Fair Value	3	2
Gains/(Losses)	2	(1)
Assets | Forward MBS trades
Derivatives, Fair Value [Line Items]
Outstanding Notional	1,056	4,658
Fair Value	18	79
Gains/(Losses)	35	224
Assets | Treasury futures
Derivatives, Fair Value [Line Items]
Outstanding Notional	2,445
Fair Value	71
Gains/(Losses)	71
Liabilities
Derivatives, Fair Value [Line Items]
Outstanding Notional	1,742	3,001
Fair Value	(11)	(68)
Gains/(Losses)	(69)	(115)
Liabilities | IRLCs
Derivatives, Fair Value [Line Items]
Outstanding Notional	25	551
Fair Value	0	(5)
Gains/(Losses)	0	(5)
Liabilities | LPCs
Derivatives, Fair Value [Line Items]
Outstanding Notional	85	658
Fair Value	0	(8)
Gains/(Losses)	1	(6)
Liabilities | Forward MBS trades
Derivatives, Fair Value [Line Items]
Outstanding Notional	1,439	695
Fair Value	(10)	(6)
Gains/(Losses)	(47)	7
Liabilities | Treasury futures
Derivatives, Fair Value [Line Items]
Outstanding Notional	193	1,097
Gains/(Losses)	$ (23)	$ (111)

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Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Other assets
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Margin Deposit Assets	$ 3	$ 49
Payables and other liabilities
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Margin Deposit Liability	$ 8		$ 1

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Indebtedness - Advance and Warehouse Facilities Summary (Details) - USD ($)	Apr. 01, 2023	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Advance and warehouse facilities, net		$ 2,934,000,000	$ 2,885,000,000
Advance Facilities | Servicing | Loans payable | $350 advance facility
Debt Instrument [Line Items]
Capacity Amount		350,000,000
Outstanding		140,000,000	150,000,000
Collateral Pledged		179,000,000	189,000,000
Advance Facilities | Servicing | Loans payable | $300 advance facility(1)
Debt Instrument [Line Items]
Capacity Amount		300,000,000
Outstanding		298,000,000	308,000,000
Collateral Pledged		406,000,000	410,000,000
Advance Facilities | Servicing | Loans payable | $250 advance facility
Debt Instrument [Line Items]
Capacity Amount		250,000,000
Outstanding		161,000,000	171,000,000
Collateral Pledged		192,000,000	209,000,000
Advance Facilities | Servicing | Notes payable to banks
Debt Instrument [Line Items]
Outstanding		642,000,000	669,000,000
Collateral Pledged		842,000,000	853,000,000
Advance Facilities | Servicing | Notes payable to banks | $75 advance facility
Debt Instrument [Line Items]
Capacity Amount		75,000,000
Outstanding		43,000,000	40,000,000
Collateral Pledged		65,000,000	45,000,000
Warehouse Facilities | Originations | Notes payable to banks
Debt Instrument [Line Items]
Outstanding		865,000,000	817,000,000
Collateral Pledged		948,000,000	910,000,000
Warehouse Facilities | Originations | Notes payable to banks | $1,500 Warehouse Facility
Debt Instrument [Line Items]
Capacity Amount		1,500,000,000
Outstanding		189,000,000	206,000,000
Collateral Pledged		247,000,000	272,000,000
Warehouse Facilities | Originations | Notes payable to banks | $1,500 Warehouse Facility
Debt Instrument [Line Items]
Capacity Amount		1,500,000,000
Outstanding		145,000,000	135,000,000
Collateral Pledged		144,000,000	133,000,000
Warehouse Facilities | Originations | Notes payable to banks | $750 Warehouse Facility
Debt Instrument [Line Items]
Capacity Amount		750,000,000
Outstanding		135,000,000	202,000,000
Collateral Pledged		140,000,000	209,000,000
Warehouse Facilities | Originations | Notes payable to banks | $500 Warehouse Facility(2)
Debt Instrument [Line Items]
Capacity Amount		500,000,000
Outstanding		9,000,000	14,000,000
Collateral Pledged		11,000,000	17,000,000
Warehouse Facilities | Originations | Notes payable to banks | $500 Warehouse Facility
Debt Instrument [Line Items]
Capacity Amount		500,000,000
Outstanding		64,000,000	76,000,000
Collateral Pledged		67,000,000	80,000,000
Warehouse Facilities | Originations | Notes payable to banks | $500 Warehouse Facility
Debt Instrument [Line Items]
Capacity Amount		500,000,000
Outstanding		76,000,000	31,000,000
Collateral Pledged		78,000,000	32,000,000
Warehouse Facilities | Originations | Notes payable to banks | $450 Warehouse Facility(3)
Debt Instrument [Line Items]
Capacity Amount		450,000,000
Outstanding		0	0
Collateral Pledged		0	0
Warehouse Facilities | Originations | Notes payable to banks | $450 Warehouse Facility(3) | Subsequent Event
Debt Instrument [Line Items]
Capacity Amount	$ 100,000,000
Warehouse Facilities | Originations | Notes payable to banks | $300 Warehouse Facility
Debt Instrument [Line Items]
Capacity Amount		300,000,000
Outstanding		161,000,000	115,000,000
Collateral Pledged		165,000,000	117,000,000
Warehouse Facilities | Originations | Notes payable to banks | $250 Warehouse Facility(4)
Debt Instrument [Line Items]
Capacity Amount		250,000,000
Outstanding		0	0
Collateral Pledged		0	0
Warehouse Facilities | Originations | Notes payable to banks | $200 Warehouse Facility
Debt Instrument [Line Items]
Capacity Amount		200,000,000
Outstanding		18,000,000	19,000,000
Collateral Pledged		27,000,000	28,000,000
Warehouse Facilities | Originations | Notes payable to banks | $200 Warehouse Facility
Debt Instrument [Line Items]
Capacity Amount		200,000,000
Outstanding		50,000,000	18,000,000
Collateral Pledged		51,000,000	21,000,000
Warehouse Facilities | Originations | Notes payable to banks | $75 Warehouse Facility
Debt Instrument [Line Items]
Capacity Amount		75,000,000
Outstanding		18,000,000	1,000,000
Collateral Pledged		18,000,000	1,000,000
Warehouse Facilities | Originations | Notes payable to banks | $1,000 warehouse facility
Debt Instrument [Line Items]
Capacity Amount		1,000,000,000
MSR Facilities | Servicing | Notes payable to banks
Debt Instrument [Line Items]
Outstanding		1,440,000,000	1,410,000,000
Collateral Pledged		5,137,000,000	5,499,000,000
MSR Facilities | Servicing | Notes payable to banks | Subsequent Event
Debt Instrument [Line Items]
Capacity Amount	$ 1,150,000,000
MSR Facilities | Servicing | Notes payable to banks | $1,450 warehouse facility(1)
Debt Instrument [Line Items]
Capacity Amount		1,450,000,000
Outstanding		300,000,000	260,000,000
Collateral Pledged		2,162,000,000	2,284,000,000
MSR Facilities | Servicing | Notes payable to banks | $600 warehouse facility
Debt Instrument [Line Items]
Capacity Amount		600,000,000
Outstanding		400,000,000	380,000,000
Collateral Pledged		977,000,000	927,000,000
MSR Facilities | Servicing | Notes payable to banks | $500 warehouse facility(2)
Debt Instrument [Line Items]
Capacity Amount		500,000,000
Outstanding		390,000,000	380,000,000
Collateral Pledged		1,153,000,000	1,482,000,000
MSR Facilities | Servicing | Notes payable to banks | $500 warehouse facility
Debt Instrument [Line Items]
Capacity Amount		500,000,000
Outstanding		325,000,000	365,000,000
Collateral Pledged		774,000,000	732,000,000
MSR Facilities | Servicing | Notes payable to banks | $50 warehouse facility
Debt Instrument [Line Items]
Capacity Amount		50,000,000
Outstanding		25,000,000	25,000,000
Collateral Pledged		71,000,000	74,000,000
MSR Facilities | Servicing | Notes payable to banks | $1750 warehouse facility
Debt Instrument [Line Items]
Capacity Amount		1,750,000,000
Advance Financing, Internally Allocated | Servicing | Loans payable | $300 advance facility(1)
Debt Instrument [Line Items]
Capacity Amount		300,000,000
MSR Financing, Internally Allocated | Servicing | Notes payable to banks | $1,450 warehouse facility(1)
Debt Instrument [Line Items]
Capacity Amount		1,450,000,000
MSR Financing, Internally Allocated | Servicing | Notes payable to banks | $500 warehouse facility(2)
Debt Instrument [Line Items]
Capacity Amount		500,000,000
Advance, Warehouse and MSR Facilities
Debt Instrument [Line Items]
Outstanding		2,947,000,000	2,896,000,000
Collateral Pledged		6,927,000,000	7,262,000,000
Unamortized debt issuance costs		(13,000,000)	(11,000,000)
Advance and warehouse facilities, net		$ 2,934,000,000	$ 2,885,000,000

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Indebtedness - Summary of Unsecured Senior Notes (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Unsecured senior notes, net	$ 2,675,000,000	$ 2,673,000,000
Unsecured Senior Notes
Debt Instrument [Line Items]
Unsecured senior notes principal amount	2,700,000,000	2,700,000,000
Unamortized debt issuance costs	(25,000,000)	(27,000,000)
Unsecured senior notes, net	2,675,000,000	2,673,000,000
Unsecured Senior Notes | $850 face value, 5.500% interest rate payable semi-annually, due August 2028
Debt Instrument [Line Items]
Unsecured senior notes principal amount	850,000,000	850,000,000
Face value	$ 850,000,000
Debt Instrument, Interest Rate, Stated Percentage	5.50%
Unsecured Senior Notes | $650 face value, 5.125% interest rate payable semi-annually, due December 2030
Debt Instrument [Line Items]
Unsecured senior notes principal amount	$ 650,000,000	650,000,000
Face value	$ 650,000,000
Debt Instrument, Interest Rate, Stated Percentage	5.125%
Unsecured Senior Notes | $600 face value, 6.000% interest rate payable semi-annually, due January 2027
Debt Instrument [Line Items]
Unsecured senior notes principal amount	$ 600,000,000	600,000,000
Face value	$ 600,000,000
Debt Instrument, Interest Rate, Stated Percentage	6.00%
Unsecured Senior Notes | $600 face value, 5.750% interest rate payable semi-annually, due November 2031
Debt Instrument [Line Items]
Unsecured senior notes principal amount	$ 600,000,000	$ 600,000,000
Face value	$ 600,000,000
Debt Instrument, Interest Rate, Stated Percentage	5.75%

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Indebtedness - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Debt Instrument [Line Items]
Interest Expense	$ 110	$ 106
Advance Facilities | Servicing
Debt Instrument [Line Items]
Short-Term Debt, Weighted Average Interest Rate, over Time	7.20%	2.40%
Warehouse & MSR Facilities
Debt Instrument [Line Items]
Short-Term Debt, Weighted Average Interest Rate, over Time	7.00%	2.10%
Debt
Debt Instrument [Line Items]
Interest Expense	$ 99	$ 86
Unsecured Senior Notes
Debt Instrument [Line Items]
Maximum percentage redeemable on unsecured debt	40.00%
Repayments of debt	$ 0	0
Amount of principal amount outstanding repaid	$ 0	$ 0

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Indebtedness - Schedule of Notes Maturity (Details) - Unsecured Senior Notes - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
2023 through 2026	$ 0
2027	600
Thereafter	2,100
Total unsecured senior notes principal amount	$ 2,700	$ 2,700

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Securitizations and Financings - Assets and Liabilities of Consolidated VIEs (Details) - Residential mortgage - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Assets - transfers accounted for as secured borrowings	$ 441	$ 476
Liabilities - transfers accounted for as secured borrowings	300	322
Restricted cash
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Assets - transfers accounted for as secured borrowings	70	78
Advances and other receivables, net
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Assets - transfers accounted for as secured borrowings	371	398
Advance facilities, net(1)
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Liabilities - transfers accounted for as secured borrowings	300	321
Payables and other liabilities
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings [Line Items]
Liabilities - transfers accounted for as secured borrowings	$ 0	$ 1

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Securitizations and Financings - Securitization Trusts (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Variable Interest Entities and Securitizations [Abstract]
Total collateral balances - UPB	$ 951	$ 976
Total certificate balances	930	949
Financial Asset, Past Due
Financing Receivable, Past Due [Line Items]
Unconsolidated securitization trusts	$ 108	$ 119

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Earnings Per Share - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Preferred Shares [Abstract]
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Preferred stock, liquidation preference	$ 0	$ 0

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Earnings Per Share - Computation of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net income	$ 37	$ 658
Earnings Per Share, Basic [Abstract]
Basic	$ 0.54	$ 8.91
Diluted	$ 0.52	$ 8.59
Weighted average shares of common stock outstanding (in thousands):
Basic	69,008	73,864
Dilutive effect of stock awards	1,471	2,704
Diluted	70,479	76,568

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Income Taxes (Details)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective tax rate	(5.60%)	24.00%

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Fair Value Measurements - Measured on a Recurring Basis (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Assets
Mortgage loans held for sale	$ 937	$ 893
Liabilities
Mortgage servicing rights financing	21	19
Treasury futures
Assets
Fair Value			$ 49
Recurring Fair Value Measurements
Assets
Mortgage loans held for sale	937	893
Mortgage servicing rights	6,566	6,654
Equity investments	44	47
Liabilities
Mortgage servicing rights financing	21	19
Excess spread financing	491	509
Recurring Fair Value Measurements | IRLCs
Assets
Fair Value	33	22
Recurring Fair Value Measurements | LPCs
Assets
Fair Value	3	1
Fair Value		1
Recurring Fair Value Measurements | Forward MBS trades
Assets
Fair Value	18	8
Fair Value	10	9
Recurring Fair Value Measurements | Treasury futures
Assets
Fair Value	71
Fair Value	1	14
Recurring Fair Value Measurements | Level 1
Assets
Mortgage loans held for sale	0	0
Mortgage servicing rights	0	0
Equity investments	2	2
Liabilities
Mortgage servicing rights financing	0	0
Excess spread financing	0	0
Recurring Fair Value Measurements | Level 1 | IRLCs
Assets
Fair Value	0	0
Recurring Fair Value Measurements | Level 1 | LPCs
Assets
Fair Value	0	0
Fair Value		0
Recurring Fair Value Measurements | Level 1 | Forward MBS trades
Assets
Fair Value	0	0
Fair Value	0	0
Recurring Fair Value Measurements | Level 1 | Treasury futures
Assets
Fair Value	0
Fair Value	0	0
Recurring Fair Value Measurements | Level 2
Assets
Mortgage loans held for sale	866	819
Mortgage servicing rights	0	0
Equity investments	0	0
Liabilities
Mortgage servicing rights financing	0	0
Excess spread financing	0	0
Recurring Fair Value Measurements | Level 2 | IRLCs
Assets
Fair Value	0	0
Recurring Fair Value Measurements | Level 2 | LPCs
Assets
Fair Value	0	0
Fair Value		0
Recurring Fair Value Measurements | Level 2 | Forward MBS trades
Assets
Fair Value	18	8
Fair Value	10	9
Recurring Fair Value Measurements | Level 2 | Treasury futures
Assets
Fair Value	71
Fair Value	1	14
Recurring Fair Value Measurements | Level 3
Assets
Mortgage loans held for sale	71	74
Mortgage servicing rights	6,566	6,654
Equity investments	42	45
Liabilities
Mortgage servicing rights financing	21	19
Excess spread financing	491	509
Recurring Fair Value Measurements | Level 3 | IRLCs
Assets
Fair Value	33	22
Recurring Fair Value Measurements | Level 3 | LPCs
Assets
Fair Value	3	1
Fair Value		1
Recurring Fair Value Measurements | Level 3 | Forward MBS trades
Assets
Fair Value	0	0
Fair Value	0	0
Recurring Fair Value Measurements | Level 3 | Treasury futures
Assets
Fair Value	0
Fair Value	$ 0	$ 0

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Fair Value Measurements - Level 3 Reconciliation (Details) - Recurring Fair Value Measurements - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Excess spread financing
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance - beginning of period	$ 509	$ 768
Changes in fair value included in earnings	4	79
Purchases/additions (1)	0	0
Issuances	0	0
Sales/dispositions (2)	0	0
Repayments	4
Settlements	(18)	(32)
Other changes	0	0
Balance - end of period	491	815
Mortgage servicing rights financing
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance - beginning of period	19	10
Changes in fair value included in earnings	2	20
Purchases/additions (1)	0	0
Issuances	0	0
Sales/dispositions (2)	0	0
Repayments	0
Settlements	0	0
Other changes	0	0
Balance - end of period	21	30
Mortgage servicing rights
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance - beginning of period	6,654	4,223
Changes in fair value included in earnings	(230)	563
Purchases/additions (1)	102	1,015
Issuances	54	200
Sales/dispositions (2)	(15)	(4)
Repayments	0
Settlements	0	0
Other changes	1	9
Balance - end of period	6,566	6,006
Equity investments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance - beginning of period	45	54
Changes in fair value included in earnings	(3)	0
Purchases/additions (1)	0	0
Issuances	0	0
Sales/dispositions (2)	0	0
Repayments	0
Settlements	0	0
Other changes	0	0
Balance - end of period	42	54
IRLCs
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance - beginning of period	22	134
Changes in fair value included in earnings	11	(62)
Purchases/additions (1)	0	0
Issuances	0	0
Sales/dispositions (2)	0	0
Repayments	0
Settlements	0	0
Other changes	0	0
Balance - end of period	33	$ 72
Mortgage loans held for sale
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance - beginning of period	74
Changes in fair value included in earnings	1
Purchases/additions (1)	28
Issuances	0
Sales/dispositions (2)	(31)
Repayments	1
Settlements	0
Other changes	0
Balance - end of period	$ 71

XML

Fair Value Measurements - Unobservable Inputs (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
MSR(1)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Average life(3)	8 years 1 month 6 days	8 years 1 month 6 days
Excess spread financing
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Average life(3)	6 years 6 months	6 years 7 months 6 days
Min | MSR(1)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount rate	10.30%	10.40%
Prepayment speed	6.30%	6.30%
Cost to service per loan(2)	$ 56	$ 54
Min | IRLCs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Value of servicing (reflected as a percentage of loan commitment)	0	(0.006)
Min | Excess spread financing
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount rate	9.90%	10.00%
Prepayment speed	7.40%	6.90%
Min | Mortgage servicing rights financing
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Advance financing and counterparty fee rates	5.20%	5.20%
Annual advance recovery rates	15.90%	15.90%
Min | Mortgage loans held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Market pricing	$ 0.450	$ 0.373
Max | MSR(1)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount rate	13.60%	13.70%
Prepayment speed	13.20%	12.20%
Cost to service per loan(2)	$ 161	$ 155
Max | IRLCs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Value of servicing (reflected as a percentage of loan commitment)	0.038	0.039
Max | Excess spread financing
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount rate	13.70%	13.80%
Prepayment speed	14.10%	13.30%
Max | Mortgage servicing rights financing
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Advance financing and counterparty fee rates	8.50%	8.60%
Annual advance recovery rates	20.70%	20.60%
Max | Mortgage loans held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Market pricing	$ 1.036	$ 1.147
Weighted Average | MSR(1)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount rate	11.40%	11.40%
Prepayment speed	7.50%	7.20%
Cost to service per loan(2)	$ 85	$ 80
Weighted Average | IRLCs
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Value of servicing (reflected as a percentage of loan commitment)	0.021	0.023
Weighted Average | Excess spread financing
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Discount rate	11.20%	11.30%
Prepayment speed	9.60%	9.20%
Weighted Average | Mortgage servicing rights financing
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Advance financing and counterparty fee rates	6.80%	7.10%
Annual advance recovery rates	17.50%	17.30%
Weighted Average | Mortgage loans held for sale
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Market pricing	$ 0.777	$ 0.774

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Fair Value Measurements - Fair Value by Balance Sheet Line Item (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Financial assets
Restricted cash	$ 133	$ 175	$ 130
Loans subject to repurchase from Ginnie Mae	1,889	1,865
Financial liabilities
Unsecured senior notes, net	2,675	2,673
Advance and warehouse facilities, net	2,934	2,885
Nonrecurring Fair Value Measurements
Financial assets
Cash and cash equivalents	534	527
Restricted cash	133	175
Advances and other receivables, net	933	1,019
Loans subject to repurchase from Ginnie Mae	1,889	1,865
Financial liabilities
Unsecured senior notes, net	2,675	2,673
Advance and warehouse facilities, net	2,934	2,885
Liability for loans subject to repurchase from Ginnie Mae	1,889	1,865
Nonrecurring Fair Value Measurements | Level 1
Financial assets
Cash and cash equivalents	534	527
Restricted cash	133	175
Advances and other receivables, net	0	0
Loans subject to repurchase from Ginnie Mae	0	0
Financial liabilities
Unsecured senior notes, net	0	0
Advance and warehouse facilities, net	0	0
Liability for loans subject to repurchase from Ginnie Mae	0	0
Nonrecurring Fair Value Measurements | Level 2
Financial assets
Cash and cash equivalents	0	0
Restricted cash	0	0
Advances and other receivables, net	0	0
Loans subject to repurchase from Ginnie Mae	1,889	1,865
Financial liabilities
Unsecured senior notes, net	2,243	2,209
Advance and warehouse facilities, net	2,947	2,896
Liability for loans subject to repurchase from Ginnie Mae	1,889	1,865
Nonrecurring Fair Value Measurements | Level 3
Financial assets
Cash and cash equivalents	0	0
Restricted cash	0	0
Advances and other receivables, net	933	1,019
Loans subject to repurchase from Ginnie Mae	0	0
Financial liabilities
Unsecured senior notes, net	0	0
Advance and warehouse facilities, net	0	0
Liability for loans subject to repurchase from Ginnie Mae	$ 0	$ 0

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Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Loss Contingencies [Line Items]
Legal Fees (Recoveries), net	$ 9	$ (2)
Litigation and regulatory matters | Min
Loss Contingencies [Line Items]
Estimate of possible loss	2
Litigation and regulatory matters | Max
Loss Contingencies [Line Items]
Estimate of possible loss	$ 5

XML

Segment Information - Financial Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Revenues:
Service related, net	$ 261	$ 755
Net gain on mortgage loans held for sale	69	297
Total revenues	330	1,052
Total expenses	261	338
Other income (expenses)
Interest income	85	36
Interest expense	(110)	(106)
Other expense, net	(9)	222
Total other income (expenses), net	(34)	152
Income (loss) before income tax expense (benefit)	35	866
Depreciation and amortization for property and equipment and intangible assets	9	11
Total assets	12,657	$ 14,490	$ 12,776
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal, Statement of Income or Comprehensive Income [Extensible Enumeration]		Other expense, net
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Mortgage Servicing Platform
Other income (expenses)
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal		$ 223
Operating Segments | Servicing
Revenues:
Service related, net	231	701
Net gain on mortgage loans held for sale	0	15
Total revenues	231	716
Total expenses	153	122
Other income (expenses)
Interest income	79	19
Interest expense	(63)	(54)
Other expense, net	0	0
Total other income (expenses), net	16	(35)
Income (loss) before income tax expense (benefit)	94	559
Depreciation and amortization for property and equipment and intangible assets	2	5
Total assets	10,050	9,825
Operating Segments | Originations
Revenues:
Service related, net	11	42
Net gain on mortgage loans held for sale	69	282
Total revenues	80	324
Total expenses	56	174
Other income (expenses)
Interest income	6	17
Interest expense	(7)	(12)
Other expense, net	0	0
Total other income (expenses), net	(1)	5
Income (loss) before income tax expense (benefit)	23	155
Depreciation and amortization for property and equipment and intangible assets	2	4
Total assets	760	2,666
Corporate/Other
Revenues:
Service related, net	19	12
Net gain on mortgage loans held for sale	0	0
Total revenues	19	12
Total expenses	52	42
Other income (expenses)
Interest income	0	0
Interest expense	(40)	(40)
Other expense, net	(9)	222
Total other income (expenses), net	(49)	182
Income (loss) before income tax expense (benefit)	(82)	152
Depreciation and amortization for property and equipment and intangible assets	5	2
Total assets	$ 1,847	1,999
Corporate/Other | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Mortgage Servicing Platform
Other income (expenses)
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal		$ 223