COOP 10-Q Quarterly Report June 30, 2025

MR. COOPER GROUP INC.

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coop-20250630

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 June 30, 2025


☐ 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 July 18, 2025 was 63,993,269 .

Table of Contents

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 June 30, 2025 (unaudited) and December 31, 2024	3
	Condensed Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2025 and 2024	4
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the Three and Six Months Ended June 30, 2025 and 2024	5
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2025 and 2024	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
	1. Nature of Business and Basis of Presentation	8
	2. Merger and Acquisition	9
	3. Mortgage Servicing Rights and Related Liabilities	9
	4. Advances and Other Receivables	12
	5 . Mortgage Loans Held for Sale	13
	6 . Loans Subject to Repurchase from Ginnie Mae	14
	7 . Goodwill and Intangible Assets	14
	8 . Derivative Financial Instruments	15
	9 . Indebtedness	17
	10. Securitizations and Financings	19
	11. Earnings Per Share	20
	12. Income Taxes	20
	13. Fair Value Measurements	20
	14. Capital Requirements	24
	15. Commitments and Contingencies	24
	16. Segment Information	26
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	53
Item 4.	Controls and Procedures	54

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	56

Table of Contents

PART I. Financial Information

Item 1. Financial Statements

MR. COOPER GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(millions of dollars, except share data)


	June 30, 2025		December 31, 2024
	(unaudited)
Assets
Cash and cash equivalents	$	783	$	753
Restricted cash	168		220
Mortgage servicing rights at fair value	11,431		11,736
Advances and other receivables, net of reserves of $ 116 and $ 112 , respectively	1,124		1,345
Mortgage loans held for sale at fair value	2,475		2,211
Property and equipment, net of accumulated depreciation of $ 144 and $ 157 , respectively	72		58
Deferred tax assets, net	149		230
Other assets	2,297		2,386
Total assets	$	18,499	$	18,939

Liabilities and Stockholders’ Equity
Unsecured senior notes, net	$	4,902	$	4,891
Advance, warehouse and MSR facilities, net	6,161		6,495
Payables and other liabilities	1,956		2,322
MSR related liabilities - nonrecourse at fair value	381		418
Total liabilities	13,400		14,126
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	1,063		1,077
Retained earnings	5,257		4,971
Treasury shares at cost - 29.2 million and 29.6 million shares, respectively	( 1,222 )		( 1,236 )
Total stockholders’ equity	5,099		4,813
Total liabilities and stockholders’ equity	$	18,499	$	18,939

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

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MR. COOPER GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenues:
Service related, net	$	472	$	485	$	912	$	963
Net gain on mortgage loans held for sale	136		98		256		184
Total revenues	608		583		1,168		1,147
Expenses:
Salaries, wages and benefits	191		168		384		327
General and administrative	139		132		376		290
Total expenses	330		300		760		617
Interest income	217		189		406		347
Interest expense	( 217 )		( 187 )		( 430 )		( 357 )
Other expense, net	( 1 )		( 8 )		( 12 )		( 11 )
Total other expense, net	( 1 )		( 6 )		( 36 )		( 21 )
Income before income tax expense	277		277		372		509
Less: Income tax expense	79		73		86		124
Net income	$	198	$	204	286		$	385

Earnings per share
Basic	$	3.09	$	3.16	$	4.48	$	5.96
Diluted	$	3.04	$	3.10	$	4.40	$	5.83

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

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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 Shares		Total Stockholders’ Equity
Balance at March 31, 2024		64,719	$	1	$	1,051	$	4,483	$	( 1,130 )	$	4,405
Shares issued / (surrendered) under incentive compensation plan		63	—		( 2 )		—		2		—
Share-based compensation		—	—		9		—		—		9
Repurchase of common stock		( 298 )	—		—		—		( 24 )		( 24 )

Net income		—	—		—		204		—		204
Balance at June 30, 2024		64,484	$	1	$	1,058	$	4,687	$	( 1,152 )	$	4,594

Balance at March 31, 2025		63,983	$	1	$	1,052	$	5,059	$	( 1,222 )	$	4,890
Shares issued / (surrendered) under incentive compensation plan		6	—		( 1 )		—		—		( 1 )
Share-based compensation		—	—		12		—		—		12



Net income		—	—		—		198		—		198
Balance at June 30, 2025		63,989	$	1	$	1,063	$	5,257	$	( 1,222 )	$	5,099

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

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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 Shares		Total Stockholders’ Equity
Balance at January 1, 2024		64,599	$	1	$	1,087	$	4,302	$	( 1,108 )	$	4,282
Shares issued / (surrendered) under incentive compensation plan		720	—		( 46 )		—		19		( 27 )
Share-based compensation		—	—		17		—		—		17

Repurchase of common stock		( 835 )	—		—		—		( 63 )		( 63 )

Net income		—	—		—		385		—		385
Balance at June 30, 2024		64,484	$	1	$	1,058	$	4,687	$	( 1,152 )	$	4,594

Balance at January 1, 2025		63,581	$	1	$	1,077	$	4,971	$	( 1,236 )	$	4,813
Shares issued / (surrendered) under incentive compensation plan		408	—		( 40 )		—		14		( 26 )
Share-based compensation		—	—		26		—		—		26


Net income		—	—		—		286		—		286
Balance at June 30, 2025		63,989	$	1	$	1,063	$	5,257	$	( 1,222 )	$	5,099

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

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MR. COOPER GROUP INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(millions of dollars)


	Six Months Ended June 30,
	2025		2024
Operating Activities
Net income	$	286	$	385
Adjustments to reconcile net income to net cash attributable to operating activities:
Deferred tax expense	81		121
Net gain on mortgage loans held for sale	( 256 )		( 184 )
Provision for servicing and non-servicing reserves	36		11
Fair value changes in mortgage servicing rights	728		61
Fair value changes in MSR related liabilities	( 8 )		6
Depreciation and amortization for property and equipment and intangible assets	29		16


(Gain) loss on MSR hedging activities	( 180 )		225
Loss (gain) on MSR and excess yield sales	12		( 11 )
Other operating activities	58		45
Sales proceeds and loan payment proceeds for mortgage loans held for sale	18,556		6,946
Mortgage loans originated and purchased for sale, net of fees	( 17,844 )		( 6,786 )
Repurchases of loan assets out of Ginnie Mae securitizations	( 947 )		( 744 )
Changes in assets and liabilities:
Advances and other receivables	166		29
Other assets	177		( 71 )
Payables and other liabilities	( 369 )		( 185 )
Net cash attributable to operating activities	525		( 136 )

Investing Activities


Property and equipment additions, net of disposals	( 26 )		( 16 )
Purchase of mortgage servicing rights	( 351 )		( 1,498 )
Proceeds on sale of mortgage servicing rights and excess yield	248		261
Other investing activities	( 21 )		( 20 )
Net cash attributable to investing activities	( 150 )		( 1,273 )

Financing Activities
(Decrease) increase in advance, warehouse and MSR facilities	( 341 )		621
Settlements and repayment of excess spread financing	( 30 )		( 33 )
Issuance of unsecured senior notes	—		1,000
Repurchase of common stock	—		( 63 )
Other financing activities	( 26 )		( 52 )
Net cash attributable to financing activities	( 397 )		1,473
Net (decrease) increase in cash, cash equivalents, and restricted cash	( 22 )		64
Cash, cash equivalents, and restricted cash - beginning of period	973		740
Cash, cash equivalents, and restricted cash - end of period (1)	$	951	$	804

Supplemental Disclosures of Non-cash Investing Activities

Purchase of mortgage servicing rights holdback payable	$	8	$	45
Sale of mortgage servicing rights holdback receivable	$	9	$	2

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


	June 30, 2025		June 30, 2024
Cash and cash equivalents	$	783	$	642
Restricted cash	168		162
Total cash, cash equivalents, and restricted cash	$	951	$	804

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

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MR COOPER GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(millions of dollars, except per share data, or 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®, Xome® and Rushmore Servicing®. Mr. Cooper is the largest home loan servicers and a major mortgage originator in the country focused on delivering a variety of servicing and lending products, services and technologies.

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, 2024.

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. Investments in certain companies over which the Company does not exert significant influence are recorded at fair value, or at cost 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, and such differences could be material, due to factors such as adverse changes in the economy, 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 customers.

Recent Accounting Guidance Adopted

The Company did not adopt any accounting guidance during the six months ended June 30, 2025 that had a material impact on its condensed consolidated financial statements or disclosures.

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2. Merger and Acquisition

Merger of Mr. Cooper Group Inc. and Rocket Companies, Inc.

On March 31, 2025, Mr. Cooper Group Inc. and Rocket Companies, Inc. (“Rocket”) announced entry into a definitive agreement for Rocket to acquire all of the outstanding shares of Mr. Cooper in an all-stock transaction for $ 9.4 billion in equity value, based on an 11.0 x exchange ratio. The transaction is expected to close in the fourth quarter of 2025, subject to approval of Mr. Cooper shareholders and the satisfaction of other closing conditions, including customary regulatory approvals.

Acquisition of Certain Mortgage Operations of Flagstar Bank, N.A.

On July 24, 2024, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) and an Agreement for the Bulk Purchase and Sale of Mortgage Servicing Rights (the “MSR Purchase Agreement”) with Flagstar Bank, N.A. (“Flagstar”) in contemplation of one another (collectively “the Flagstar Transaction”). Per the Asset Purchase Agreement, the Company agreed to purchase certain MSRs held by Flagstar. The Flagstar transaction closed in the fourth quarter of 2024 for total considerations of approximately $ 1.3 billion in cash, funded through available cash and drawdowns of existing MSR lines. The acquired assets primarily consist of approximately $ 1.2 billion of MSRs and related advances, and $ 101 of client relationship intangibles associated with subservicing contracts. The Company accounted for the transaction as an asset acquisition in accordance with Accounting Standard Codification Topic 805, Business Combinations (“ASC 805”) , whereby the purchase price was allocated to net assets based on their relative fair values.

3. Mortgage Servicing Rights and Related Liabilities

The following table sets forth the carrying value of the Company’s MSR and the related liabilities. In estimating the fair value of all MSRs and related liabilities, the impact of the current environment was considered in the determination of key assumptions.


MSRs and Related Liabilities	June 30, 2025		December 31, 2024
MSRs at fair value	$	11,431	$	11,736

Excess spread financing at fair value	$	357	$	386
Mortgage servicing rights financing at fair value	24		32
MSR related liabilities - nonrecourse at fair value	$	381	$	418

Mortgage Servicing Rights

The following table sets forth the activities of MSRs:


	Six Months Ended June 30,
MSRs - Fair Value	2025		2024
Balance - beginning of period	$	11,736	$	9,090
Additions:
Servicing retained from mortgage loans sold	365		137
Purchases and acquisitions of servicing rights	289		1,403
Dispositions:
Sales of servicing assets and excess yield	( 250 )		( 237 )
Changes in fair value:
Changes in valuation inputs or assumptions used in the valuation model (MSR MTM)	( 210 )		344
Changes in valuation due to amortization	( 518 )		( 405 )
Other changes (1)	19		20
Balance - end of period	$	11,431	$	10,352

(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 six months ended June 30, 2025 and 2024, the Company sold $ 8,583 and $ 3,305 in unpaid principal balance (“UPB”) of MSRs, of which $ 8,091 and $ 3,029 were retained by the Company as subservicer, respectively.

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During the six months ended June 30, 2025 and 2024, certain agencies entered into agreements with the Company to purchase excess servicing cash flows (“excess yield”) on certain agency loans with a total UPB of approximately $ 20,562 and $ 27,841 for proceeds of $ 138 and $ 226 , respectively. During the six months ended June 30, 2025 and 2024, the Company recorded a loss of $ 10 and a gain of $ 27 , respectively, through the mark-to-market adjustments within “revenues - service related, net” in the condensed consolidated statements of operations.

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 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.

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


	June 30, 2025				December 31, 2024
MSRs - UPB and Fair Value Breakdown by Investor Pools	UPB		Fair Value		UPB		Fair Value
Agency	$	701,793	$	11,101	$	710,997	$	11,397
Non-agency	28,715		330		25,074		339
Total	$	730,508	$	11,431	$	736,071	$	11,736

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:


	Option Adjusted Spread				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
June 30, 2025
Mortgage servicing rights	$	( 456 )	$	( 876 )	$	( 321 )	$	( 620 )	$	( 78 )	$	( 157 )

December 31, 2024
Mortgage servicing rights	$	( 470 )	$	( 904 )	$	( 308 )	$	( 597 )	$	( 84 )	$	( 169 )

Excess Spread Financing - Fair Value

The Company had excess spread financing liability of $ 357 and $ 386 , related to the UPB of $ 63,113 and $ 66,519 as of June 30, 2025 and December 31, 2024, respectively. Refer to Note 13, Fair Value Measurements , for key weighted-average inputs and assumptions used in the valuation of excess spread financing liability.

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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:


	Option Adjusted Spread				Prepayment Speeds
Excess Spread Financing - Hypothetical Sensitivities	100 bps Adverse Change		200 bps Adverse Change		10% Adverse Change		20% Adverse Change
June 30, 2025
Excess spread financing	$	12	$	25	$	8	$	17

December 31, 2024
Excess spread financing	$	13	$	28	$	8	$	17

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 $ 24 and $ 32 as of June 30, 2025 and December 31, 2024. Refer to Note 13, Fair Value Measurements , for key weighted-average inputs and assumptions used in the valuation of the MSR financing liability.

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Revenues - Service related, net

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


	Three Months Ended June 30,				Six Months Ended June 30,
Revenues - Service Related, Net	2025		2024		2025		2024
Contractually specified servicing fees (1)	$	610	$	547	1,231		1,061
Other service-related income (1)	19		16		54		38
Incentive and modification income (1)	22		16		47		34
Servicing late fees (1)	38		31		76		61
Mark-to-market adjustments - Servicing
MSR MTM	64		155		( 210 )		344
(Loss) gain on MSR hedging activities	( 29 )		( 103 )		180		( 225 )
Gain (loss) on MSR and excess yield sales	3		23		( 12 )		11
Reclassifications to reserve provision (2)	( 10 )		( 6 )		( 16 )		( 12 )
Excess spread / MSR financing MTM	3		—		8		( 6 )
Total mark-to-market adjustments - Servicing	31		69		( 50 )		112
Amortization, net of accretion
MSR amortization	( 287 )		( 226 )		( 518 )		( 405 )
Excess spread accretion	9		9		17		18
Total amortization, net of accretion	( 278 )		( 217 )		( 501 )		( 387 )
Originations service related fees (3)	30		19		56		35
Corporate/Xome service related fees	16		20		33		42
Other (4)	( 16 )		( 16 )		( 34 )		( 33 )
Total revenues - service related, net	$	472	$	485	$	912	$	963

(1) Amounts include subservicing related revenues. Amounts also include servicing fees from loans sold with servicing retained of $ 208 and $ 189 for the three months ended June 30, 2025 and 2024, respectively, and $ 411 and $ 374 for the six months ended June 30, 2025 and 2024, respectively.

(2) Reclassifications to reserve provision 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.

(3) 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.

(4) 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.

4. Advances and Other Receivables

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


Advances and Other Receivables, Net	June 30, 2025		December 31, 2024
Servicing advances, net of $ 5 and $ 6 purchase discount, respectively	$	1,202	$	1,410
Receivables from agencies, investors and prior servicers	38		47
Reserves	( 116 )		( 112 )
Total advances and other receivables, net	$	1,124	$	1,345

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


	Three Months Ended June 30,				Six Months Ended June 30,
Reserves for Advances and Other Receivables	2025		2024		2025		2024
Balance - beginning of period	$	117	$	144	$	112	$	170
Provision (1)	22		( 4 )		36		11
Reclassifications (2)	( 4 )		8		( 5 )		17
Write-offs (3)	( 19 )		1		( 27 )		( 49 )
Balance - end of period	$	116	$	149	$	116	$	149

(1) The Company recorded a provision of $ 10 and $ 6 t hrough the MTM adjustments in “revenues - service related, net” in the condensed consolidated statements of operations during the three months ended June 30, 2025 and 2024, respectively and a provision of $ 16 and $ 12 during the six months ended June 30, 2025 and 2024, respectively.

(2) Reclassifications represent required reserves provisioned within other balance sheet accounts as associated serviced loans become inactive or liquidate.

(3) Write-offs represent balances removed from the servicing platform during the respective periods, including fully reserved balances related to third-party settlements where further loss recovery of prior servicer errors is limited.

Purchase Discount for Advances and Other Receivables

Purchase discounts for servicing advances was $ 5 and $ 12 as of June 30, 2025 and 2024, respectively. There was immaterial utilization of purchase discounts during the three and six months ended June 30, 2025 and 2024.

Credit Loss for Advances and Other Receivables

The following table sets forth the activities of the CECL allowance for advances and other receivables:


	Three Months Ended June 30,				Six Months Ended June 30,
CECL Allowance for Advances and Other Receivables	2025		2024		2025		2024
Balance - beginning of period	$	12	$	17	$	13	$	35
Provision	—		2		( 1 )		3
Write-offs (1)	( 1 )		—		( 1 )		( 19 )
Balance - end of period (2)	$	11	$	19	$	11	$	19

(1) Write-offs represent balances removed from the servicing platform during the respective periods, including fully reserved balances related to third-party settlements where further loss recovery of prior servicer errors is limited.

(2) Amounts were included in reserves.

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.

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	June 30, 2025		December 31, 2024
Mortgage loans held for sale – UPB	$	2,419	$	2,187
Mark-to-market adjustment (1)	56		24
Total mortgage loans held for sale	$	2,475	$	2,211

(1) The mark-to-market adjustment includes net change in unrealized gain/loss, premium on correspondent loans and certain 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.

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


	Six Months Ended June 30,
Mortgage Loans Held for Sale	2025		2024
Balance - beginning of period	$	2,211	$	927
Loans sold (at carrying value) and loan payments received	( 18,565 )		( 6,923 )
Mortgage loans originated and purchased, net of fees	17,844		6,786
Repurchase of loans out of Ginnie Mae securitizations (1)	947		744
Net change in unrealized gain on retained loans held for sale	40		6
Net transfers of mortgage loans held for sale (2)	( 2 )		( 1 )
Balance - end of period	$	2,475	$	1,539

(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 six months ended June 30, 2025 and 2024, the Company recorded a total realized loss of $ 9 and a gain of $ 22 from total sales proceeds of $ 18,591 and $ 4,692 , respectively, on the sale of mortgage loans held for sale.

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


	June 30, 2025				December 31, 2024
Mortgage Loans Held for Sale	UPB		Fair Value		UPB		Fair Value
Non-accrual (1)	$	49	$	41	$	47	$	38

(1) Non-accrual UPB includes $ 44 and $ 38 of UPB related to Ginnie Mae repurchased loans as of June 30, 2025 and December 31, 2024, respectively.

The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $ 20 and $ 22 as of June 30, 2025 and December 31, 2024, respectively.

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 customers 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 $ 1,110 and $ 1,176 as of June 30, 2025 and December 31, 2024, respectively, which are included in both “other assets” and “paya bles and other liabilities” in the condensed consolidated balance sheets .

7. Goodwill and Intangible Assets

The Company had goodwill of $ 141 as of June 30, 2025 and December 31, 2024, and intangible assets of $ 101 and $ 119 as of June 30, 2025 and December 31, 2024, respectively. Goodwill and intangible assets are included in “other assets” within the condensed consolidated balance sheets.

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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, loan purchase commitments (“LPCs”), forward MBS and Treasury 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 statements 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 “loss (gain) 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.


		June 30, 2025				Six Months Ended June 30, 2025
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gain/(Loss)
Assets
Mortgage loans held for sale
Loan sale commitments	2025	$	845	$	14	$	2
Derivative financial instruments
Forward MBS trades	2025	$	8,369	$	118	$	232
Treasury futures	2025	4,272		79		79
IRLCs	2025	1,106		41		19
LPCs	2025	1,597		12		7
Total derivative financial instruments - assets		$	15,344	$	250	$	337
Liabilities
Derivative financial instruments
Forward MBS trades	2025	$	4,226	$	34	$	( 186 )
LPCs	2025	187		1		6
IRLCs	2025	3		—		—
Total derivative financial instruments - liabilities		$	4,416	$	35	$	( 180 )

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		June 30, 2024				Six Months Ended June 30, 2024
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gain/(Loss)
Assets
Mortgage loans held for sale
Loan sale commitments	2024	$	652	$	22	$	11
Derivative financial instruments
Treasury futures	2024	$	3,432	$	62	$	( 50 )
Forward MBS trades	2024	1,789		7		15
IRLCs	2024	1,029		31		10
LPCs	2024	324		2		( 1 )
Total derivative financial instruments - assets		$	6,574	$	102	$	( 26 )
Liabilities
Derivative financial instruments
Forward MBS trades	2024	$	4,797	$	8	$	( 87 )
LPCs	2024	480		2		( 1 )
Treasury future	2024	470		3		( 96 )
IRLCs	2024	25		—		—
Total derivative financial instruments - liabilities		$	5,772	$	13	$	( 184 )

As of June 30, 2025, the Company held $ 63 in collateral deposits and $ 67 in collateral obligations on derivative instruments. As of December 31, 2024, the Company held $ 216 in collateral deposits and $ 3 in collateral obligations on derivative instruments. Collateral deposits and collateral obligations are recorded in “other assets” and “payables and other liabilities,” respectively, in the 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, Warehouse and MSR Facilities


					June 30, 2025				December 31, 2024
	Maturity Date	Collateral	Capacity Amount		Outstanding		Collateral Pledged		Outstanding		Collateral Pledged
Advance Facilities
$500 advance facility (1)	Jul 2026	Servicing advance receivables	$	500	$	241	$	347	$	285	$	394
$500 advance facility	Aug 2026	Servicing advance receivables	500		264		297		423		475
$350 advance facility	Oct 2026	Servicing advance receivables	350		102		129		119		151
$50 advance facility (2)	Jul 2026	Servicing advance receivables	50		20		25		22		40
Advance facilities principal amount					627		798		849		1,060

Warehouse Facilities
$1,500 warehouse facility	Jun 2026	Mortgage loans or MBS	1,500		—		—		68		71
$1,200 warehouse facility (3)	Sep 2026	Mortgage loans or MBS	1,200		122		141		131		148
$1,000 warehouse facility	Oct 2025	Mortgage loans or MBS	1,000		581		622		489		530
$750 warehouse facility	Mar 2027	Mortgage loans or MBS	750		507		546		112		140
$600 warehouse facility	Aug 2025	Mortgage loans or MBS	600		314		322		368		381
$500 warehouse facility	Nov 2025	Mortgage loans or MBS	500		390		404		247		256
$500 warehouse facility	Jun 2026	Mortgage loans or MBS	500		45		48		90		99
$300 warehouse facility	Jun 2026	Mortgage loans or MBS	300		—		—		—		—
$250 warehouse facility (4)	Jul 2026	Mortgage loans or MBS	250		164		177		238		253
$200 warehouse facility	Dec 2026	Mortgage loans or MBS	200		13		15		112		123
$200 warehouse facility (5)	Apr 2025	Mortgage loans or MBS	—		—		—		—		—
$200 warehouse facility (2)	Jul 2026	Mortgage loans or MBS	200		97		98		105		105
$100 warehouse facility	Apr 2026	Mortgage loans or MBS	100		—		—		—		—
$100 warehouse facility	Apr 2026	Mortgage loans or MBS	100		54		61		56		62
$1 warehouse facility	Dec 2025	Mortgage loans or MBS	1		—		—		—		—
Warehouse facilities principal amount					2,287		2,434		2,016		2,168

MSR Facilities
$1,750 warehouse facility	Apr 2027	MSR	1,750		900		2,419		950		2,669
$1,500 warehouse facility (1)	Jul 2026	MSR	1,500		475		2,594		475		2,607
$950 warehouse facility (3)	Sep 2026	MSR	950		330		1,478		550		1,711
$950 warehouse facility	Jul 2026	MSR	950		350		1,003		670		1,066
$500 warehouse facility	Jun 2027	MSR	500		250		485		250		519
$500 warehouse facility	Apr 2027	MSR	500		350		732		250		781
$500 warehouse facility	Jun 2027	MSR	500		150		787		150		726
$500 warehouse facility	Jul 2026	MSR	500		280		610		330		629
$300 warehouse facility	Jun 2027	MSR	300		150		360		—		—
$50 warehouse facility	Nov 2025	MSR	50		25		77		25		80
MSR facilities principal amount					3,260		10,545		3,650		10,788

Advance, warehouse and MSR facilities principal amount					6,174		$	13,777	6,515		$	14,016
Unamortized debt issuance costs					( 13 )				( 20 )
Advance, warehouse and MSR facilities, net					$	6,161			$	6,495

(1) Total capacity for this facility is $ 2,000 , of which $ 500 is internally allocated for advance financing and $ 1,500 is internally allocated for MSR financing; capacity is fully fungible and is not restricted by these allocations.

(2) Total capacity for this facility is $ 200 , of which $ 50 is a sublimit for advance financing. The sublimit for advance financing decreased to $ 30 in July 2025.

(3) The capacity for this facility is $ 1,200 , of which $ 950 is a sublimit for MSR financing.

(4) The capacity for this facility increased from $ 250 to $ 500 in July 2025.

(5) This facility was terminated in April 2025.

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The weighted average interest rate for advance facilities was 6.8 % and 7.7 % for the three months ended June 30, 2025 and 2024, respectively, and 6.8 % and 7.7 % for the six months ended June 30, 2025 and 2024, respectively. The weighted average interest rate for warehouse and MSR facilities was 6.5 % and 7.8 % for the three months ended June 30, 2025 and 2024, respectively, and 6.5 % and 7.9 % for the six months ended June 30, 2025 and 2024, respectively.

Unsecured Senior Notes

Unsecured senior notes consist of the following:


Unsecured Senior Notes	June 30, 2025		December 31, 2024
$ 1,000 face value, 7.125 % interest rate payable semi-annually, due February 2032 (1)	$	1,000	$	1,000
$ 850 face value, 5.500 % interest rate payable semi-annually, due August 2028	850		850
$ 750 face value, 6.500 % interest rate payable semi-annually, due August 2029 (2)	750		750
$ 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
$ 550 face value, 5.000 % interest rate payable semi-annually, due February 2026	500		500
Unsecured senior notes principal amount	4,950		4,950
Purchase discount and unamortized debt issuance costs	( 48 )		( 59 )
Unsecured senior notes, net	$	4,902	$	4,891

(1) In February 2024, the Company completed the offering of $ 1,000 unsecured senior notes due 2032 (the “2032 Notes”) and used the net proceeds from the offering to repay a portion of the amounts outstanding on its MSR facilities.

(2) In August 2024, the Company completed the offering of $ 750 unsecured senior notes due 2029 (the “2029 Notes”) and used the net proceeds from the offering to repay a portion of the amounts outstanding on its MSR facilities.

The ratios included in the indentures for the unsecured senior notes are incurrence-based compared to the customary ratio covenants that are often found in credit agreements that require a company to maintain a certain ratio. The incurrence-based covenants limit the issuer(s) and restricted subsidiaries ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all of their assets or enter into certain transactions with affiliates. The indentures contain certain events of default, including (subject, in some cases, to customary cure periods and materiality thresholds) defaults based on (i) the failure to make payments under the applicable indenture when due, (ii) breach of covenants, (iii) cross-defaults to certain other indebtedness, (iv) certain bankruptcy or insolvency events, (v) material judgments and (vi) invalidity of material guarantees.

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 n otes were repurchased or redeemed during th e six months ended June 30, 2025 and 2024.

As of June 30, 2025, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows:


Year Ending December 31,	Amount
2025	$	—
2026	500
2027	600
2028	850
2029	750
Thereafter	2,250
Total unsecured senior notes principal amount	$	4,950

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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 Nationstar Mortgage LLC, the Company’s primary operating subsidiary, and Cypress Loan Servicing LLC. The Company was in compliance with its required financial covenants as of June 30, 2025.

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:


	June 30, 2025		December 31, 2024
Consolidated Transactions with VIEs	Transfers Accounted for as Secured Borrowings		Transfers Accounted for as Secured Borrowings
Assets
Restricted cash	$	137	$	188
Advances and other receivables, net	773		1,020
Total assets	$	910	$	1,208

Liabilities
Advance facilities, net (1)	$	605	$	824
Warehouse facilities, net (1)	629		—
MSR facilities, net (1)	471		469
Payables and other liabilities	5		3
Total liabilities	$	1,710	$	1,296

(1) Refer to 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	June 30, 2025		December 31, 2024
Total collateral balances - UPB	$	757	$	798
Total certificate balances	$	732	$	773

The Company has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of June 30, 2025 and December 31, 2024. Therefore, it does not have a significant 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	June 30, 2025		December 31, 2024
Unconsolidated securitization trusts	$	72	$	81

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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 June 30, 2025 and December 31, 2024, the Company had 10 million preferred shares authorized at par value of $ 0.00001 per share, 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 June 30,				Six Months Ended June 30,
Computation of Earnings Per Share	2025		2024		2025		2024
Net income	$	198	$	204	$	286	$	385

Weighted average shares of common stock outstanding (in thousands):
Basic	63,987		64,617		63,851		64,621
Dilutive effect of stock awards	1,107		1,151		1,211		1,401
Diluted	65,094		65,768		65,062		66,022

Earnings per common share
Basic	$	3.09	$	3.16	$	4.48	$	5.96
Diluted	$	3.04	$	3.10	$	4.40	$	5.83

12. Income Taxes

The effective tax rate for operations was 28.6 % and 23.1 % for the three and six months ended June 30, 2025, and 26.3 % and 24.3 % for the three and six months ended June 30, 2024, respectively. The effective tax rates differed from the statutory federal rate of 21% primarily due to state income taxes and nondeductible executive compensation.

The change in effective tax rate during the three and six months ended June 30, 2025, as compared to 2024, is primarily attributable to the impact of state legislative changes and quarterly discrete tax items for the respective period, including state income taxes.

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, 2024.

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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:


	June 30, 2025
			Recurring Fair Value Measurements
Fair Value - Recurring Basis	Total Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage servicing rights	$	11,431	$	—	$	—	$	11,431
Mortgage loans held for sale	2,475		—		2,411		64
Equity investments	5		—		—		5
Derivative financial instruments
Forward MBS trades	118		—		118		—
Treasury futures	79		—		79		—
IRLCs	41		—		—		41
LPCs	12		—		—		12

Liabilities
Derivative financial instruments
Forward MBS trades	34		—		34		—
LPCs	1		—		—		1
Excess spread financing	357		—		—		357
Mortgage servicing rights financing	24		—		—		24


	December 31, 2024
			Recurring Fair Value Measurements
Fair Value - Recurring Basis	Total Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage servicing rights	$	11,736	$	—	$	—	$	11,736
Mortgage loans held for sale	2,211		—		2,151		60
Equity investments	9		1		—		8
Derivative financial instruments
IRLCs	22		—		—		22
Forward MBS trades	18		—		18		—
LPCs	6		—		—		6

Liabilities
Derivative financial instruments
Forward MBS trades	95		—		95		—
Treasury futures	59		—		59		—
LPCs	7		—		—		7
Excess spread financing	386		—		—		386
Mortgage servicing rights financing	32		—		—		32

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


	Six Months Ended June 30, 2025
	Assets								Liabilities
Fair Value - Level 3 Assets and Liabilities	Mortgage servicing rights		Mortgage loans held for sale		IRLCs		LPCs		Excess spread financing		Mortgage servicing rights financing
Balance - beginning of period	$	11,736	$	60	$	22	$	6	$	386	$	33
Changes in fair value included in earnings	( 728 )		2		19		6		1		( 9 )
Purchases/additions (1)	289		88		—		—		—		—
Issuances	365		—		—		—		—		—
Sales/dispositions (2)	( 250 )		( 86 )		—		—		—		—
Repayments	—		—		—		—		—		—
Settlements	—		—		—		—		( 30 )		—
Other changes	19		—		—		—		—		—
Balance - end of period	$	11,431	$	64	$	41	$	12	$	357	$	24


	Six Months Ended June 30, 2024
	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	$	9,090	$	81	$	8	$	21	$	437	$	29
Changes in fair value included in earnings	( 61 )		( 1 )		—		10		2		4
Purchases/additions (1)	1,403		66		—		—		—		—
Issuances	137		—		—		—		—		—
Sales/dispositions (2)	( 237 )		( 51 )		—		—		—		—
Repayments	—		( 2 )		—		—		—		—
Settlements	—		—		—		—		( 33 )		—
Other changes	20		( 3 )		—		—		—		—
Balance - end of period	$	10,352	$	90	$	8	$	31	$	406	$	33

(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 equity investments and LPCs liabilities as of June 30, 2025 and immaterial LPCs assets and liabilities as of June 30, 2024. No transfers were made in or out of Level 3 fair value assets and liabilities for the Company during the six months ended June 30, 2025 and 2024.

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


	June 30, 2025									December 31, 2024
	Range						Weighted Average			Range						Weighted Average
Level 3 Inputs	Min			Max						Min			Max
MSRs (1)
Option adjusted spread (2)	6.7		%	12.1		%	7.6		%	6.9		%	12.2		%	7.6		%

Prepayment speed	7.9		%	9.9		%	8.4		%	6.8		%	9.3		%	7.7		%
Cost to service per loan (3)	$	42		$	111		$	56		$	45		$	114		$	58
Average life (4)							7.4 years									7.8 years

Mortgage loans held for sale
Market pricing	45.0		%	98.0		%	83.4		%	45.0		%	97.3		%	80.1		%

IRLCs
Value of servicing (reflected as a percentage of loan commitment)	—		%	3.7		%	1.4		%	—		%	3.6		%	1.7		%

Excess spread financing (1)
Option adjusted spread (2)	7.0		%	12.3		%	8.8		%	6.9		%	12.3		%	8.7		%
Prepayment speed	7.9		%	8.1		%	8.0		%	7.2		%	7.6		%	7.5		%
Average life (4)							6.5 years									6.8 years

Mortgage servicing rights financing
Advance financing and counterparty fee rates	7.4		%	8.5		%	8.0		%	7.2		%	9.0		%	8.5		%
Annual advance recovery rates	10.8		%	14.9		%	12.6		%	14.9		%	16.8		%	16.0		%

(1) The inputs are weighted by investor.

(2) OAS represents incremental spread above a risk-free rate (one-month SOFR), which is an observable input.

(3) Presented in whole dollar amounts.

(4) 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:


	June 30, 2025
	Carrying Amount		Fair Value
Financial Instruments			Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	783	$	783	$	—	$	—
Restricted cash	168		168		—		—
Advances and other receivables, net	1,124		—		—		1,124

Loans subject to repurchase from Ginnie Mae	1,110		—		1,110		—
Financial liabilities
Unsecured senior notes, net	4,902		—		5,016		—
Advance, warehouse and MSR facilities, net	6,161		—		6,173		—
Liability for loans subject to repurchase from Ginnie Mae	1,110		—		1,110		—

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	December 31, 2024
	Carrying Amount		Fair Value
Financial Instruments			Level 1		Level 2		Level 3
Financial assets
Cash and cash equivalents	$	753	$	753	$	—	$	—
Restricted cash	220		220		—		—
Advances and other receivables, net	1,345		—		—		1,345
Loans subject to repurchase from Ginnie Mae	1,176		—		1,176		—
Financial liabilities
Unsecured senior notes, net	4,891		—		4,862		—
Advance, warehouse and MSR facilities, net	6,495		—		6,515		—
Liability for loans subject to repurchase from Ginnie Mae	1,176		—		1,176		—

14. Capital Requirements

Fannie Mae, Freddie Mac, Ginnie Mae and certain private label mortgage investors require the Company to maintain 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 primary operating subsidiary, Nationstar Mortgage LLC, as well as Cypress Loan Servicing LLC. As of June 30, 2025, 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 the Company’s financial position, results of operations, or cash flows in a future period.

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On November 3, 2023, a putative class action lawsuit was filed against the Company, captioned Cabezas v. Mr. Cooper Group, Inc., No. 23-cv-02453 (“Cabezas”), in the United States District Court for the Northern District of Texas, by plaintiff Jennifer Cabezas purportedly on behalf of a class consisting of those persons impacted by the cybersecurity incident that occurred on October 31, 2023. The class action complaint alleged claims for negligence, negligence per se, breach of express contract, breach of implied contract, invasion of privacy, unjust enrichment, breach of confidence, and breach of fiduciary duty based upon allegations that the Company did not employ reasonable and adequate security measures to protect customer personal information accessed in the cybersecurity incident. The Cabezas complaint sought damages, declaratory and injunctive relief, and an award of costs, attorney fees and expenses, among other relief. Between November 2023 and February 7, 2024, 26 additional putative class actions were filed against the Company asserting substantially similar claims and allegations as those asserted in the Cabezas action. The Cabezas court consolidated all 26 pending cases with the Cabezas action, and the 26 separate matters were administratively closed. By Order dated June 25, 2024, the Cabezas court set July 15, 2024 as the last day for Plaintiffs to file a Consolidated Amended Complaint. On July 15, 2024, plaintiffs Jose Ignacio Garrigo, Izabela Debowcsyk, Joshua Watson, Brett Padalecki, Chris Leptiak, Denver Dale, Emily Burke, Mary Crawford, Kay Pollard, Jonathan Josi, Jeff Price, Mychael Marrone, Katy Ross, Lynette Williams, Karen Lynn Williams, Gary Allen, Larry Siegal, Rohit Burani, Elizabeth Curry, Justin Snider, Linda Hansen, and Deira Robertson (collectively, “Plaintiffs”) filed a Consolidated Class Action Complaint on behalf of themselves and an alleged putative nationwide class of “All individuals residing in the United States whose PII was accessed and/or acquired as a result of the Data Breach announced by Mr. Cooper in or around November 2023,” as well as 15 state subclasses. Plaintiffs assert seven of the same claims as in the original Cabezas complaint, (1) Breach of Express Contract; (2) Breach of Implied Contract; (3) Negligence; (4) Negligence Per Se; (5) Unjust Enrichment; (6) Invasion of Privacy; (7) Breach of Confidence; as well as a claim for Declaratory and Injunctive Relief, and 19 state law claims. The Consolidated Class Action Complaint seeks damages, injunctive relief, disgorgement and restitution, and an award of costs, attorney fees and expenses, among other relief. The Cabezas court set September 13, 2024 as the last day for Defendants to move to dismiss the Consolidated Class Action Complaint. On September 13, 2024, the Company filed a motion to dismiss the Consolidated Class Action Complaint. Plaintiffs opposed the motion and the Company filed a reply in further support of its motion on March 27, 2025.

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. The Company recorded legal-related expenses, net of recoveries, which includes legal settlements and fees paid to external legal service providers, of $ 15 and $ 25 during the three and six months ended June 30, 2025 and $ 7 and $ 19 during the three and six months ended June 30, 2024, respectively, which are included in “expenses - general and administrative” on the condensed consolidated statements of operations. Management currently believes the aggregate range of reasonably possible loss is $ 7 to $ 15 in excess of the accrued liability (if any) related to those matters as of June 30, 2025. For some of these matters, the Company is able to estimate reasonably possible losses above existing reserves and for other matters, such an estimate is not possible at this time. 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 June 30, 2025, 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.

As a seller of mortgage loans to Agencies and other third parties, the Company may be required to indemnify or repurchase mortgage loans that fail to meet certain customary representations and warranties made in conjunction with sales of mortgage loans. The repurchase reserve liability related to such customary representations and warranties was $ 46 and $ 62 as of June 30, 2025 and December 31, 2024, respectively, which are included in “payables and other liabilities” within the condensed consolidated balance sheets.

Loan and Other Commitments

The Company enters into IRLCs with prospective customers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the customer. 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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16. Segment Information

The Company’s segments reflect the internal reporting used to evaluate operating performance and are based upon the Company’s organizational structure, which focuses primarily on the services offered. The Company’s operations are primarily conducted through two segments: Servicing and Originations. A brief description of the 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 customer payments, investor reporting, customer service, modifying loans where appropriate to help customers stay current, and when necessary performing collections, foreclosures, and the sale of REO. In the fourth quarter of 2024, the Company expanded its servicing and subservicing portfolio with the acquisition and subsequent integration of the mortgage operations from the Flagstar transaction.

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

Corporate/Other : Corporate/Other includes the results of Xome’s and Roosevelt Management Company’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. Functional expenses are allocated to individual segments based on the actual cost of services performed, direct resource utilization, or headcount percentage for shared services. Facility costs are allocated to individual segments based on cost per headcount for specific facilities utilized. Group insurance costs are allocated to individual segments based on global cost per headcount. 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.

The tables below summarize the result of operations and total assets by segment that are provided to the Chief Operating Decision Makers (CODMs), which consists of the Chief Executive Officer, the President and the Chief Financial Officer. Pretax income (loss) is a key measurement used by the CODMs to evaluate segment results and is one of the factors considered in determining capital allocation among the segments and determined in accordance with the measurement principles used in the consolidated financial statements.


	Three Months Ended June 30, 2025
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	426	$	30	$	16	$	472
Net gain on mortgage loans held for sale	8		128		—		136
Total revenues	434		158		16		608
Expenses
Salaries, wages and benefits	89		56		46		191
General and administrative	59		44		36		139
Total expenses	148		100		82		330
Interest income	184		33		—		217
Interest expense	( 106 )		( 30 )		( 81 )		( 217 )
Other income (expenses), net	—		3		( 4 )		( 1 )
Total other income (expenses), net	78		6		( 85 )		( 1 )
Income (loss) before income tax expense (benefit)	$	364	$	64	$	( 151 )	$	277
Depreciation and amortization for property and equipment and intangible assets	$	7	$	2	$	2	$	11
Total assets	$	14,412	$	2,481	$	1,606	$	18,499

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	Three Months Ended June 30, 2024
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	446	$	19	$	20	$	485
Net gain on mortgage loans held for sale	10		88		—		98
Total revenues	456		107		20		583
Expenses
Salaries, wages and benefits	84		40		44		168
General and administrative	87		29		16		132
Total expenses	171		69		60		300
Interest income	174		15		—		189
Interest expense	( 105 )		( 15 )		( 67 )		( 187 )
Other expense, net	—		—		( 8 )		( 8 )
Total other income (expenses), net	69		—		( 75 )		( 6 )
Income (loss) before income tax expense (benefit)	$	354	$	38	$	( 115 )	$	277
Depreciation and amortization for property and equipment and intangible assets	$	2	$	1	$	5	$	8
Total assets	$	12,759	$	1,398	$	1,626	$	15,783


	Six Months Ended June 30, 2025
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	823	$	56	$	33	$	912
Net gain on mortgage loans held for sale	14		242		—		256
Total revenues	837		298		33		1,168
Expenses
Salaries, wages and benefits	179		108		97		384
General and administrative	209		87		80		376
Total expenses	388		195		177		760
Interest income	341		62		3		406
Interest expense	( 212 )		( 56 )		( 162 )		( 430 )
Other expenses, net	—		—		( 12 )		( 12 )
Total other income (expenses), net	129		6		( 171 )		( 36 )
Income (loss) before income tax expense (benefit)	$	578	$	109	$	( 315 )	$	372
Depreciation and amortization for property and equipment and intangible assets	$	21	$	4	$	4	$	29
Total assets	$	14,412	$	2,481	$	1,606	$	18,499

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	Six Months Ended June 30, 2024
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	886	$	35	$	42	$	963
Net gain on mortgage loans held for sale	20		164		—		184
Total revenues	906		199		42		1,147
Expenses
Salaries, wages and benefits	169		74		84		327
General and administrative	187		57		46		290
Total expenses	356		131		130		617
Interest income	320		27		—		347
Interest expense	( 203 )		( 25 )		( 129 )		( 357 )
Other expense, net	—		—		( 11 )		( 11 )
Total other income (expenses), net	117		2		( 140 )		( 21 )
Income (loss) before income tax expense (benefit)	$	667	$	70	$	( 228 )	$	509
Depreciation and amortization for property and equipment and intangible assets	$	5	$	2	$	9	$	16
Total assets	$	12,759	$	1,398	$	1,626	$	15,783

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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;

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

• 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 fully utilize our net operating loss, other tax carry forwards and certain built-in losses or deductions;

• 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 or refinance debt;

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

• our reliance on vendor relationships;

• issues related to the development and use of artificial intelligence;

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

• our ability to maintain our licenses and other regulatory approvals; and

• our ability to complete the merger with Rocket Companies, Inc.

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, 2024 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, 2024. 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 the country’s largest residential mortgage servicer and a major originator of residential mortgage loans. Our mission is to keep the dream of homeownership alive, and we do this by helping our customers manage what is typically their largest financial asset, and by helping our investors and clients maximize the returns from their portfolios of residential mortgages. We have a track record of significant growth, having expanded our servicing portfolio UPB from $10 billion in 2006 to $1.5 trillion as of June 30, 2025. We believe this track record reflects our strong operating capabilities, strong loss mitigation sk ills, 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 sustained growth, deliver a world-class customer experience, increase our return on tangible equity into the high teens, and act as a trusted partner for our key stakeholders. Key strategic initiatives 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 Servicing and Originations segments, as well as by taking strategic corporate actions to eliminate costs throughout the organization;

• Grow our servicing portfolio by acquiring new customers and retaining existing customers;

• Sustain industry leading refinance recapture rates and grow our purchase recapture rate;

• Keep Mr. Cooper a great place for our team members to work;

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

• Delight our customers and reinvent the customer experience by acting as the customer’s advocate and by harnessing technology to deliver digital solutions that are personalized and friction-free;

• Use our mortgage-centric AI capabilities to transform mortgage servicing for the benefit of our customers, clients, team members, and investors; and

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

Anticipated Trends

On March 31, 2025, Mr. Cooper Group Inc. and Rocket Companies, Inc. announced entry into a definitive agreement for Rocket to acquire all of the outstanding shares of Mr. Cooper in an all-stock transaction for $9.4 billion in equity value, based on an 11.0x exchange ratio. The transaction is expected to close in the fourth quarter of 2025, subject to approval of Mr. Cooper shareholders and the satisfaction of other closing conditions, including customary regulatory approvals.

For our Servicing segment, we expect our servicing portfolio to remain flat for the reminder of the year, as we work on integration planning with Rocket. For our Originations segment, we expect momentum in the direct-to-consumer channel, as home equity loans and cashout refinances volume continue to grow.

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Results of Operations


Table 1. Consolidated Operations


	Three Months Ended June 30,						Six Months Ended June 30,
	2025		2024		Change		2025		2024		Change
Revenues - operational (1)	$	577	$	514	$	63	$	1,218	$	1,035	$	183
Revenues - mark-to-market	31		69		(38)		(50)		112		(162)
Total revenues	608		583		25		1,168		1,147		21
Total expenses	330		300		30		760		617		143
Total other expense, net	(1)		(6)		5		(36)		(21)		(15)
Income before income tax expense	277		277		—		372		509		(137)
Less: Income tax expense	79		73		6		86		124		(38)
Net income	$	198	$	204	$	(6)	$	286	$	385	$	(99)

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

Total revenues increased in the three and six months ended June 30, 2025 primarily due to increased operational revenues driven by a larger servicing portfolio and increased volume in originations. The increase in operational revenues was largely offset by a decrease in MSR MTM driven by mortgage rates movements.

Total expenses increased in the three months ended June 30, 2025 as compared to 2024, primarily due to an increase in salaries, wages and benefits expense driven by variable compensation attributable to higher originations funding volume. Total expenses also increased in the six months ended June 30, 2025 as compared to 2024, primarily resulted from an increase in general and administrative costs driven by higher originations volume, transaction costs related to the merger with Rocket, and transition costs associated with the Flagstar Transaction. In addition, higher amortization was recorded in 2025 for intangible assets acquired in the fourth quarter of 2024 in relation with the Flagstar transaction.

Total other expense, net remained consistent in the three months ended June 30, 2025, when compared with 2024. Total other expense, net increased in the six months ended June 30, 2025, as compared to 2024 primarily due to higher interest expense from warehouse facilities financing as well as the issuances of the 2032 Notes in February 2024 and the 2029 Notes in August 2024. Partially offsetting the increase in interest expense was an increase in interest income primarily due to higher float income on custodial deposits as a result of growth in the MSR portfolio.

The effective tax rate during the three months ended June 30, 2025, was 28.6% as compared to 26.3% in 2024, and the effective tax rate during the six months ended June 30, 2025 was 23.1% as compared to 24.3% in 2024. The change in effective tax rate is primarily attributable to the impact of state legislative changes and quarterly discrete tax items for the respective period, including state income taxes.

Segment Results

Our operations are primarily 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 customer payments, investor reporting, customer service, modifying loans where appropriate to help customers stay current, and when necessary performing collections, foreclosures, and the sale of REO. In the fourth quarter of 2024, we expanded our servicing and subservicing portfolio with the acquisition and subsequent integration of the mortgage operations from the Flagstar transaction.

• 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.

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

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 purchase and 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

January & June 2025

October & December 2024

January 2024

Residential

RPS2

SQ2-

Above Average

Master Servicer

RMS1-

SQ2+

Above Average

Special Servicer

RSS2

SQ2-

Above Average

Closed-end 2nd Lien Servicer

RPS2

N/A

Subprime Servicer

RPS2

SQ2-

Above Average

Rushmore Special

RSS2

SQ3+

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 June 30,
	2025				2024				Change
	Amt			bps (1)	Amt			bps (1)	Amt			bps
Revenues
Operational	$	681		18	$	604		21	$	77		(3)
Amortization, net of accretion	(278)			(7)	(217)			(7)	(61)			—
Mark-to-market adjustments - Servicing	31			1	69			2	(38)			(1)
Total revenues	434			12	456			16	(22)			(4)
Expenses
Salaries, wages and benefits	89			2	84			3	5			(1)
General and administrative
Servicing support fees	27			1	27			1	—			—
Corporate and other general and administrative expenses	63			2	62			2	1			—
Foreclosure and other liquidation related recoveries, net	(38)			(1)	(4)			—	(34)			(1)
Depreciation and amortization	7			—	2			—	5			—
Total general and administrative expenses	59			2	87			3	(28)			(1)
Total expenses	148			4	171			6	(23)			(2)
Other income (expense)
Interest income	184			5	174			6	10			(1)
Interest expense
Advance interest expense	(13)			—	(14)			(1)	1			1
MSR and other interest expense	(93)			(3)	(91)			(3)	(2)			—
Total interest expense	(106)			(3)	(105)			(4)	(1)			1
Total other income, net	78			2	69			2	9			—
Income before income tax expense	$	364		10	$	354		12	$	10		(2)

Weighted average cost - advance and MSR facilities	7.1		%		8.0		%		(0.9)		%
Weighted average cost - excess spread financing	8.7		%		8.7		%		—		%

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

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Table 3.1 Servicing - Revenues


	Three Months Ended June 30,
	2025			2024			Change
	Amt		bps (1)	Amt		bps (1)	Amt		bps
MSR Operational Revenue
Base servicing fees	$	527	14	$	479	16	$	48	(2)
Modification fees	8		—	5		—	3		—
Late payment fees	26		1	21		1	5		—
Other ancillary revenues	19		—	20		1	(1)		(1)
Total MSR operational revenue	580		15	525		18	55		(3)
Subservicing-related revenue	117		3	95		3	22		—
Total servicing fee revenue	697		18	620		21	77		(3)
MSR financing liability costs	(7)		—	(7)		—	—		—
Excess spread payments and portfolio runoff	(9)		—	(9)		—	—		—
Total operational revenue	681		18	604		21	77		(3)
Amortization, Net of Accretion
MSR amortization	(287)		(7)	(226)		(7)	(61)		—
Excess spread accretion	9		—	9		—	—		—
Total amortization, net of accretion	(278)		(7)	(217)		(7)	(61)		—
Mark-to-Market Adjustments - Servicing
MSR MTM	64		2	155		5	(91)		(3)
Loss on MSR hedging activities	(29)		(1)	(103)		(4)	74		3
Gain on MSR sales	3		—	23		1	(20)		(1)
Reclassifications to reserve provision (2)	(10)		—	(6)		—	(4)		—
Excess spread / financing MTM	3		—	—		—	3		—
Total MTM - Servicing	31		1	69		2	(38)		(1)
Total revenues - Servicing	$	434	12	$	456	16	$	(22)	(4)

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

Servicing Segment Revenues

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

Servicing - Operational revenue and MSR amortization increased during the three months ended June 30, 2025, as compared to 2024, primarily due to a larger average MSR UPB portfolio driven by servicing portfolio growth.

The decrease in MSR MTM during the three months ended June 30, 2025, as compared to 2024, was primarily due to lesser impact from the increase in mortgage rates in 2025 compared to 2024. The MSR MTM changes were partially offset by MSR hedging activities during the respective periods.

Subservicing - Subservicing-related revenue increased during the three months ended June 30, 2025, as compared to 2024, primarily driven by a larger average subservicing portfolio due to the Flagstar transaction in the fourth quarter of 2024.

Servicing Segment Expenses

Total expenses decreased during the three months ended June 30, 2025, as compared to 2024, primarily due to due to higher recoveries in 2025.

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Servicing Segment Other Income, net

Total other income, net increased during the three months ended June 30, 2025, as compared to 2024, primarily attributable to increased float income on custodial deposits as a result of growth in the MSR portfolio, partially offset by higher interest expense from MSR financing.

Table 4. Servicing Segment Results of Operations


	Six Months Ended June 30,
	2025				2024				Change
	Amt			bps (1)	Amt			bps (1)	Amt			bps
Revenues
Operational	$	1,388		18	$	1,181		21	$	207		(3)
Amortization, net of accretion	(501)			(6)	(387)			(7)	(114)			1
Mark-to-market adjustments - Servicing	(50)			(1)	112			2	(162)			(3)
Total revenues	837			11	906			16	(69)			(5)
Expenses
Salaries, wages and benefits	179			2	169			3	10			(1)
General and administrative
Servicing support fees	62			1	55			1	7			—
Corporate and other general and administrative expenses	127			2	124			2	3			—
Foreclosure and other liquidation related (recoveries) expenses, net	(1)			—	3			—	(4)			—
Depreciation and amortization	21			—	5			—	16			—
Total general and administrative expenses	209			3	187			3	22			—
Total expenses	388			5	356			6	32			(1)
Other income (expense)
Interest income	341			5	320			6	21			(1)
Interest expense
Advance interest expense	(28)			—	(30)			(1)	2			1
MSR and other interest expense	(184)			(3)	(173)			(3)	(11)			—
Total interest expense	(212)			(3)	(203)			(4)	(9)			1
Total other income, net	129			2	117			2	12			—
Income before income tax expense	$	578		8	$	667		12	$	(89)		(4)

Weighted average cost - advance and MSR facilities	7.1		%		8.1		%		(1.0)		%
Weighted average cost - excess spread financing	8.7		%		8.7		%		—		%

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

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Table 4.1 Servicing - Revenues


	Six Months Ended June 30,
	2025			2024			Change
	Amt		bps (1)	Amt		bps (1)	Amt		bps
MSR Operational Revenue
Base servicing fees	$	1,060	14	$	928	16	$	132	(2)
Modification fees	18		—	12		—	6		—
Late payment fees	51		1	41		1	10		—
Other ancillary revenues	48		—	40		1	8		(1)
Total MSR operational revenue	1,177		15	1,021		18	156		(3)
Subservicing-related revenue	245		3	193		3	52		—
Total servicing fee revenue	1,422		18	1,214		21	208		(3)
MSR financing liability costs	(17)		—	(15)		—	(2)		—
Excess spread payments and portfolio runoff	(17)		—	(18)		—	1		—
Total operational revenue	1,388		18	1,181		21	207		(3)
Amortization, Net of Accretion
MSR amortization	(518)		(6)	(405)		(7)	(113)		1
Excess spread accretion	17		—	18		—	(1)		—
Total amortization, net of accretion	(501)		(6)	(387)		(7)	(114)		1
Mark-to-Market Adjustments - Servicing
MSR MTM	(210)		(3)	344		6	(554)		(9)
Gain (loss) on MSR hedging activities	180		2	(225)		(4)	405		6
(Loss) gain on MSR sales	(12)		—	11		—	(23)		—
Reclassifications to reserve provision (2)	(16)		—	(12)		—	(4)		—
Excess spread / financing MTM	8		—	(6)		—	14		—
Total MTM - Servicing	(50)		(1)	112		2	(162)		(3)
Total revenues - Servicing	$	837	11	$	906	16	$	(69)	(5)

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

Servicing Segment Revenues

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

Servicing - Operational revenue and MSR amortization increased during the six months ended June 30, 2025, as compared to 2024, primarily due to a larger average MSR UPB portfolio driven by servicing portfolio growth.

The change in MSR MTM during the six months ended June 30, 2025, as compared to 2024, was primarily due to a decrease in mortgage rates in 2025 compared to an increase in mortgage rates in 2024. The MSR MTM changes were partially offset by MSR hedging activities during the respective periods.

Subservicing - Subservicing-related revenue increased during the six months ended June 30, 2025, as compared to 2024, primarily driven by a larger average subservicing portfolio due to the Flagstar transaction in the fourth quarter of 2024.

Servicing Segment Expenses

Total expenses increased during the six months ended June 30, 2025, as compared to 2024, primarily due to higher depreciation and amortization expense in 2025 related to amortization recorded for intangible assets acquired in the fourth quarter of 2024 in relation with the Flagstar transaction.

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Servicing Segment Other Income, net

Total other income, net increased during the six months ended June 30, 2025, as compared to 2024, primarily attributable to increased float income on custodial deposits as a result of growth in the MSR portfolio, partially offset by higher interest expense from MSR financing.

Table 5. Servicing Portfolio - Unpaid Principal Balances


					Three Months Ended June 30,				Six Months Ended June 30,
					2025		2024		2025		2024
Average UPB
MSRs					$	733,849	$	647,080	$	736,268	$	627,310
Subservicing and other (1)					775,964		523,738		784,042		491,949
Total average UPB					$	1,509,813	$	1,170,818	$	1,520,310	$	1,119,259

	June 30, 2025						June 30, 2024
	UPB		Carrying Amount		bps		UPB		Carrying Amount		bps
MSRs
Agency	$	701,793	$	11,101	158		$	650,171	$	10,023	154
Non-agency	28,715		330		115		25,854		329		127
Total MSRs	730,508		11,431		156		676,025		10,352		153

Subservicing and other (1)
Agency	707,385		N/A				481,818		N/A
Non-agency	70,749		N/A				48,004		N/A
Total subservicing and other	778,134		N/A				529,822		N/A

Total ending balance	$	1,508,642	$	11,431			$	1,205,847	$	10,352

MSRs UPB Encumbrance									June 30, 2025		June 30, 2024
MSRs - unencumbered									$	667,302	$	605,448
MSRs - encumbered (2)									63,206		70,577
MSRs UPB									$	730,508	$	676,025

(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.

(2) Encumbered MSRs consist of residential mortgage loans included within our excess spread financing transactions and MSR financing liability.

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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 June 30, 2025						Three Months Ended June 30, 2024
	MSR		Subservicing and Other		Total		MSR		Subservicing and Other		Total
Balance - beginning of period	$	733,752	$	779,924	$	1,513,676	$	630,733	$	505,456	$	1,136,189
Additions:
Originations	9,387		—		9,387		3,775		—		3,775
Acquisitions / Increase in subservicing (1)	14,719		34,853		49,572		56,153		41,848		98,001
Deductions:
Dispositions / Decrease in subservicing (2)	(7,078)		(17,226)		(24,304)		(161)		(6,448)		(6,609)
Principal reductions and other	(7,899)		(5,983)		(13,882)		(6,180)		(3,511)		(9,691)
Voluntary reductions (3)	(11,995)		(13,135)		(25,130)		(7,956)		(7,316)		(15,272)
Involuntary reductions (4)	(354)		(299)		(653)		(317)		(207)		(524)
Net changes in loans serviced by others	(24)		—		(24)		(22)		—		(22)
Balance - end of period	$	730,508	$	778,134	$	1,508,642	$	676,025	$	529,822	$	1,205,847

(1) Amount for Subservicing and Other UPB includes transfers from MSR for MSRs sold with subservicing rights retained.

(2) Amount for MSR UPB includes transfers to Subservicing and other for MSRs sold with subservicing rights retained.

(3) Voluntary reductions are related to loan payoffs by customers

(4) Involuntary reductions refer to loan defaults, loan liquidations and loan chargeoffs.


6.1 Servicing and Subservicing and Other Portfolio UPB Rollforward


	Six Months Ended June 30, 2025						Six Months Ended June 30, 2024
	MSR		Subservicing and Other		Total		MSR		Subservicing and Other		Total
Balance - beginning of period	$	736,071	$	819,965	$	1,556,036	$	587,942	$	403,778	$	991,720
Additions:
Originations	17,719		—		17,719		6,610		—		6,610
Acquisitions / Increase in subservicing (1)	21,759		43,519		65,278		110,356		154,260		264,616
Deductions:
Dispositions / Decrease in subservicing (2)	(8,583)		(51,497)		(60,080)		(3,305)		(9,375)		(12,680)
Principal reductions and other	(15,308)		(11,699)		(27,007)		(11,592)		(6,100)		(17,692)
Voluntary reductions (3)	(20,493)		(21,587)		(42,080)		(13,293)		(12,354)		(25,647)
Involuntary reductions (4)	(685)		(567)		(1,252)		(647)		(387)		(1,034)
Net changes in loans serviced by others	28		—		28		(46)		—		(46)
Balance - end of period	$	730,508	$	778,134	$	1,508,642	$	676,025	$	529,822	$	1,205,847

(1) Amount for Subservicing and Other UPB includes transfers from MSR for MSRs sold with subservicing rights retained.

(2) Amount for MSR UPB includes transfers to Subservicing and other for MSRs sold with subservicing rights retained.

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

(4) Involuntary reductions refer to loan defaults, loan liquidations and loan chargeoffs.

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


Table 7. Key Performance Metrics - Servicing and Subservicing Portfolio


					June 30, 2025			June 30, 2024
Loan count					6,439,394			5,312,627
Average loan amount (1)					$	233,820		$	226,453
Average coupon - agency					4.4		%	4.3		%
Average coupon - non-agency					5.0		%	4.9		%
60+ delinquent (% of loans) (2)					1.4		%	1.4		%
90+ delinquent (% of loans) (2)					1.1		%	1.1		%
120+ delinquent (% of loans) (2)					1.0		%	1.0		%

	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025			2024
Total prepayment speed (12-month constant prepayment rate)	7.0	%	5.6	%	6.0		%	5.2		%

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

(2) 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.


Table 8. Loan Modifications and Workout Units


	Three Months Ended June 30,			Six Months Ended June 30,
	2025	2024	Change	2025	2024	Change
Modifications (1)	13,354	7,733	5,621	25,957	14,923	11,034
Workouts (2)	18,612	14,912	3,700	41,259	32,182	9,077
Total modifications and workout units	31,966	22,645	9,321	67,216	47,105	20,111

(1) Modifications consist of Agency/investor programs designed to adjust the terms of the loan (e.g., interest rates, maturity date).

(2) Workouts consist of other loss mitigation options designed to assist customers and keep them in their homes, but do not adjust the terms of the loan.

Modifications and workouts increased during the three and six months ended June 30, 2025, as compared to 2024, primarily due to growth in our servicing portfolio and the continued expansion of loss mitigation programs offered by FNMA, FHLMC, FHA, and VA which increased customer eligibility and resulted in an increase in successful modifications and workouts.

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Servicing Portfolio and Liabilities

The following table sets forth the activities of MSRs:

Table 9. MSRs - Fair Value Rollforward


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Fair value - beginning of period	$	11,345	$	9,796	$	11,736	$	9,090
Additions:
Servicing retained from mortgage loans sold	201		73		365		137
Purchases and acquisitions of servicing rights	183		740		289		1,403
Dispositions:
Sales of servicing assets and excess yield	(86)		(195)		(250)		(237)
Changes in fair value:
Due to changes in valuation inputs or assumptions used in the valuation model (MSR MTM):
Agency	108		154		(164)		325
Non-agency	(44)		1		(46)		19
Changes in valuation due to amortization:
Scheduled principal payments	(139)		(94)		(225)		(179)
Prepayments
Voluntary prepayments
Agency	(140)		(124)		(278)		(210)
Non-agency	(3)		(3)		(6)		(6)
Involuntary prepayments
Agency	(5)		(5)		(9)		(10)
Non-agency	—		—		—		—
Other changes (1)	11		9		19		20
Fair value - end of period	$	11,431	$	10,352	$	11,431	$	10,352

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

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 June 30, 2025 and December 31, 2024.

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.

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, however we have not done so in recent years due to the availability of lower cost sources of funding.

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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 option-adjusted spread levels. 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 June 30, 2025 and December 31, 2024.

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

Table 10. Excess Spread Financing - Rollforward


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Fair value - beginning of period	$	366	$	420	$	386	$	437


Deductions:

Settlements	(15)		(16)		(30)		(33)
Changes in fair value:
Agency	5		1		—		1
Non-agency	1		1		1		1
Fair value - end of period	$	357	$	406	$	357	$	406

Originations Segment

The strategy of our Originations segment is to originate or acquire new loans and ultimately add MSRs for the servicing portfolio at a more attractive cost than purchasing MSRs in bulk transactions and to retain or recapture 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 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 six months ended June 30, 2025, our total originations included loans for approximately 8,400 customers with low FICOs (<660), 11,400 customers with income below the U.S. median household income, 22,200 first-time homebuyers, and 3,300 veterans. During this time period, we originated approximately 15,900 Ginnie Mae loans, which are designed for first-time homebuyers and low- and moderate-income customers, comprising $4.8 billion in total proceeds. Once these loans are originated, the underserved consumers 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 customer 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 June 30,									Six Months Ended June 30,
	2025			2024			Change			2025			2024			Change
Revenues
Service related, net - Originations (1)	$	30		$	19		$	11		$	56		$	35		$	21
Net gain on mortgage loans held for sale
Net (loss) gain on loans originated and sold (2)	(66)			21			(87)			(109)			37			(146)
Capitalized servicing rights (3)	194			67			127			351			127			224
Total net gain on mortgage loans held for sale	128			88			40			242			164			78
Total revenues	158			107			51			298			199			99
Expenses
Salaries, wages and benefits	56			40			16			108			74			34
General and administrative
Loan origination expenses	17			9			8			28			19			9
Corporate and other general administrative expenses	13			11			2			32			20			12
Marketing and professional service fees	12			8			4			23			16			7
Depreciation and amortization	2			1			1			4			2			2
Total general and administrative	44			29			15			87			57			30
Total expenses	100			69			31			195			131			64
Other income (expenses)
Interest income	33			15			18			62			27			35
Interest expense	(30)			(15)			(15)			(56)			(25)			(31)
Other income	3			—			3			—			—			—
Total other income, net	6			—			6			6			2			4
Income before income tax expense	$	64		$	38		$	26		$	109		$	70		$	39

Weighted average note rate - mortgage loans held for sale	7.8		%	8.1		%	(0.3)		%	7.9		%	8.0		%	(0.1)		%
Weighted average cost of funds - warehouse facilities (excluding facility fees)	5.4		%	6.9		%	(1.5)		%	5.5		%	6.9		%	(1.4)		%

(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 June 30,									Six Months Ended June 30,
	2025			2024			Change			2025			2024			Change
Key Metrics
DTC PTA lock volume (1)	$	2,589		$	1,841		$	748		$	4,614		$	3,317		$	1,297
Correspondent PTA lock volume (1)	7,144			2,632			4,512			13,961			4,169			9,792
Total PTA lock volume	$	9,733		$	4,473		$	5,260		$	18,575		$	7,486		$	11,089

DTC funded volume	$	2,575		$	1,671		$	904		$	4,432		$	3,011		$	1,421
Correspondent funded volume	6,868			2,123			4,745			13,330			3,661			9,669
Total funded volume (2)	$	9,443		$	3,794		$	5,649		$	17,762		$	6,672		$	11,090

DTC volume of loans sold	$	2,448		$	1,548		$	900		$	4,138		$	2,771		$	1,367
Correspondent volume of loans sold	6,867			1,814			5,053			13,259			3,381			9,878
Volume of Originations loans sold	$	9,315		$	3,362		$	5,953		$	17,397		$	6,152		$	11,245

Recapture percentage (3)	16.9%			21.6%			(4.7)%			18.0%			22.7%			(4.7)%
Refinance recapture percentage (4)	46.7%			72.5%			(25.8)%			46.3%			70.4%			(24.1)%
Purchase as a percentage of funded volume	69.6%			62.4%			7.2%			70.7%			59.2%			11.5%
Value of capitalized servicing on retained settlements	208 bps			221 bps			(13) bps			204 bps			226 bps			(22) bps

Originations Margin
Revenue	$	158		$	107		$	51		$	298		$	199		$	99
PTA lock volume	$	9,733		$	4,473		$	5,260		$	18,575		$	7,486		$	11,089
Revenue as a percentage of PTA lock volume (5)	1.62		%	2.39		%	(0.77)		%	1.60		%	2.66		%	(1.06)		%

Expenses (6)	$	94		$	69		$	25		$	189		$	129		$	60
Funded volume	$	9,443		$	3,794		$	5,649		$	17,762		$	6,672		$	11,090
Expenses as a percentage of funded volume (7)	1.00		%	1.82%			(0.82)		%	1.06		%	1.93%			(0.87)		%

Originations Margin	0.62		%	0.57		%	0.05		%	0.54		%	0.73		%	(0.19)		%

(1) Pull-through adjusted (“PTA”) lock volume represents the expected funding from locks taken during the period.

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

(3) Recapture percentage includes new loan originations for both purchase and refinance transactions where customer 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 customer 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.

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Originations Segment Revenues

Total revenues increased during the three and six months ended June 30, 2025, as compared to 2024, primarily driven by higher pull-through adjusted lock volumes and funded volumes for both DTC and correspondent channels.

Originations Segment Expenses

Total expenses increased during the three months ended June 30, 2025, as compared to 2024, primarily due to an increase in salaries, wages and benefits expense, and loan origination expenses. The increase in salaries, wages and benefits expense in 2025 was primarily driven by variable compensation attributable to higher originations funding volume. Loan originations expenses increased primarily due to higher originations volume in both channels.

Total expenses increased during the six months ended June 30, 2025, as compared to 2024, primarily due to an increase in salaries, wages and benefits expense, and corporate and other general administrative expenses. The increase in salaries, wages and benefits expense in 2025 was primarily driven by variable compensation attributable to higher originations funding volume. Corporate and other general administrative expenses increased primarily due to the Flagstar third-party origination operations, which were acquired in the fourth quarter of 2024, being fully operational in 2025.

Originations Segment Other 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. There were no material changes for other income (expenses), net, during the three and six months ended June 30, 2025, as compared to 2024, since interest income and interest expense increased commensurately and largely offset.

Originations Margin

The Originations Margin for the three months ended June 30, 2025 increased, as compared to 2024, primarily due to lower expenses as a percentage of funded volume driven by process improvement. Direct-to-consumer channel mix was 27% and 41% for the three months ended June 30, 2025 and 2024, respectively.

The Originations Margin for the six months ended June 30, 2025 decreased, as compared to 2024, primarily due to lower revenue as a percentage of PTA lock volume driven by lower margins from a shift in channel mix from higher margin direct-to-consumer to lower margin correspondent. Direct-to-consumer channel mix was 25% and 44% for the six months ended June 30, 2025 and 2024, 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 June 30,						Six Months Ended June 30,
	2025		2024		Change		2025		2024		Change
Corporate/Other - Operations
Total revenues	$	16	$	20	$	(4)	$	33	$	42	$	(9)
Total expenses	82		60		22		177		130		47

Interest expense	81		67		14		162		129		33
Other expense, net	(4)		(8)		4		(12)		(11)		(1)

Key Metrics
Average exchange inventory under management	25,778		25,887		(109)		25,530		27,129		(1,599)

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Total revenues decreased during the three and six months ended June 30, 2025, as compared to 2024, primarily due to a decline in Xome revenues as the average exchange volume decreased.

Total expenses increased during the three and six months ended June 30, 2025, as compared to 2024, primarily attributable to transaction costs related to the merger with Rocket and transition costs associated with the Flagstar Transaction incurred in 2025.

Interest expense increased during the three and six months ended June 30, 2025, as compared to 2024, due to the issuance of the 2032 Notes in February 2024 and the 2029 Notes in August 2024. For further discussion, refer to Note 9, Indebtedness , in the Notes to the Condensed Consolidated Financial Statements.

Other expense, net decreased in the three months ended June 30, 2025 as compared to 2024 primarily due to reduction in the bargain purchase gain related to an acquisition in 2024. Other expense, net remained consistent for the six months ended June 30, 2025, as compared to 2024.

Liquidity and Capital Resources

We measure liquidity by unrestricted cash and availability of borrowings on our advance, warehouse and MSR facilities. We held cash and cash equivalents on hand of $783 as of June 30, 2025 compared to $753 as of December 31, 2024. We have sufficient borrowing capacity to support our operations. As of June 30, 2025, total available borrowing capacity for advance, warehouse, and MSR facilities was $15,101, of which $3,058 was collateralized and immediately available to draw. During the six months ended June 30, 2025, we increased capacity on our MSR and warehouse facilities by $500 and $350, respectively. For more information on our advance, warehouse, and MSR facilities, see Note 9, Indebtedness , in the Notes to the Condensed Consolidated Financial Statements.

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, 2024.

Cash Flows

The table below presents cash flows information:

Table 14. Cash Flows


	Six Months Ended June 30,
	2025		2024		Change
Net cash attributable to:
Operating activities	$	525	$	(136)	$	661
Investing activities	(150)		(1,273)		1,123
Financing activities	(397)		1,473		(1,870)
Net (decrease) increase in cash, cash equivalents, and restricted cash	$	(22)	$	64	$	(86)

Operating activities

Operating activities generated cash of $525 during the six months ended June 30, 2025, compared to cash used of $136 in 2024. The change was primarily due to an increase of $552 in cash generated from originations net sales activities, partially offset by an increase of $203 in cash used for the repurchase of loan assets out of Ginnie Mae securitizations.

Investing activities

Cash used in investing activities decreased to $150 during the six months ended June 30, 2025 from $1,273 in 2024. The decrease was primarily due to a reduction of $1,147 in cash used for the purchase of mortgage servicing rights in 2025.

Financing activities

Our financing activities used cash of $397 during the six months ended June 30, 2025, compared to generated cash of $1,473 in 2024. The change was primarily due to the proceeds of $1,000 from the issuance of the 2032 unsecured senior notes in the first quarter of 2024. In addition, advance, warehouse and MSR facilities had net payment of $341 during the six months ended June 30, 2025, compared to net borrowing of $621 in 2024.

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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 primary operating subsidiary, Nationstar Mortgage LLC, as well as Cypress Loan Servicing LLC. As of June 30, 2025, 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 subsidiaries, Nationstar Mortgage LLC, and Cypress Loan Servicing LLC.

Minimum Net Worth

• 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.

Minimum Liquidity

• 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 customer, 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 customer, 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:

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:

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 customer, 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 customer, plus

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

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• 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:

◦ 50 basis points of loans held for sale, plus

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

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%.

Capital Requirements

• 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

Capital and Liquidity Plan

• FHFA – Require annual capital and liquidity plan that includes MSR stress tests as part of the plan.

As of June 30, 2025, Nationstar Mortgage LLC and Cypress Loan Servicing LLC were in compliance with our seller/servicer financial requirements for FHFA and Ginnie Mae.

Since our Ginnie Mae single-family servicing portfolio for Nationstar Mortgage LLC 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.

Table 15. Debt - Principal Amount


	June 30, 2025		December 31, 2024
Advance facilities	$	627	$	849
Warehouse facilities	2,287		2,016
MSR facilities	3,260		3,650
Unsecured senior notes	4,950		4,950

Advance Facilities

As part of our normal course of business, we borrow money to fund servicing advances. Our servicing agreements require that we advance 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 June 30, 2025, we had a total borrowing capacity of $1,400, of which we could borrow an additional $773.

Warehouse Facilities

Loan origination activities generally require short-term l iquidity 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. As of June 30, 2025 , we had a total borrowing capacity of $6,201, of which we could borrow an additional $3,914.

MSR Facilities

Our MSR facilities provide financing for our servicing portfolio and investments. As of June 30, 2025 , we had a total borrowing capacity of $7,500, of which we could borrow an additional $4,240.

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Unsecured Senior Notes

From 2021 to 2024, we completed offerings of unsecured senior notes with maturity dates ranging from 2026 to 2032 . In connection with an acquisition in 2023, we assumed an unsecured senior note with a maturity date in 2026. We pay interest semi-annually to the holders of these notes at interest rates ranging fro m 5.000% to 7.125% . For more information regarding our indebtedness, see Note 9, Indebtedness , in the Notes to the Condensed Consolidated Financial Statements.

Contractual Obligations

As of June 30, 2025, 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, 2024.

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 certain fair value measurements 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, 2024. There have been no material changes to our critical accounting policies and estimates since December 31, 2024.

Other Matters

Recent Accounting Developments

Below provides recently issued accounting pronouncements applicable to us but not yet effective.

Accounting Standards Update 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information for income taxes paid by jurisdiction. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied prospectively; however, retrospective application is also permitted. We are currently evaluating the impact this standard may have on our financial statement disclosures. The adoption of ASU 2023-09 only impacts disclosures and is not expected to have a material impact on our condensed consolidated financial statements.

Accounting Standards Update 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (“ ASU 2024-03”) requires a public entity to disclose, at each interim and annual reporting period, certain disaggregated expenses included in each relevant expense caption, as well as the total amount of selling expenses and, in annual periods, an entity’s definition of selling expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating this ASU to determine its impact on the Company’s disclosures.

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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 customers 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.

Excess Yield. The remaining servicing fees above the minimum servicing fee (“GSE Base Servicing Fee”), as defined by the agencies, whereby the rights to the excess fees are separated, securitized by the GSE’s and sold, while we retain the obligation to service the loan and therefore continue to receive the GSE Base Servicing Fee.

Exchange inventory . Consists of Xome’s 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.

Float earnings . Interest earned on balances in custodial accounts, which represent collections of principal and interest received from customers on behalf of investors and tax and insurance payments.

Forbearance. An agreement between the mortgage servicer or lender and customer 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 customer, including the interest rate, amortization period and term of the customer’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 more than 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 customer.

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.

Option adjusted spread (“OAS”). The incremental spread added to the risk-free rate to reflect embedded (prepayment) optionality and other risk inherent in the MSRs or excess spread financing used to discount future cash flows for fair value purposes.

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

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 customers 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 (“PLS”). Securitizations that do not meet the criteria set by Fannie Mae, Freddie Mac or Ginnie Mae.

Pull-through adjusted (“PTA”) 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 customers to refinance their mortgage loans. By refinancing loans for customers 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 customer 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 customers. 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 customers 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 customer 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.

Servicing Fee. A servicing fee is the percentage of each mortgage payment made by a customer to a mortgage servicer as compensation for keeping a record of payments, collecting, and making escrow payments, passing principal and interest payments along to the note holder.

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 customers.

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, 2024. There have been no material changes in the types of market risks faced by us since December 31, 2024.

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, OAS, 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, OAS 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 customer’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 June 30, 2025 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 June 30, 2025 given hypothetical instantaneous parallel shifts in the yield curve. Actual results could differ materially.

Table 16. Change in Fair Value


	June 30, 2025
	Down 25 bps		Up 25 bps
Increase (decrease) in assets
Mortgage servicing rights at fair value	$	(257)	$	230
Mortgage loans held for sale at fair value	9		(9)
Derivative financial instruments:
Treasury futures	92		(90)
Forward MBS trades	85		(92)
Interest rate lock commitments	11		(13)
Total change in assets	(60)		26
Increase (decrease) in liabilities
Mortgage servicing rights financing at fair value	(1)		1
Excess spread financing at fair value	(3)		2
Derivative financial instruments:

Forward MBS trades	25		(31)
Interest rate lock commitments	(1)		1
Total change in liabilities	20		(27)
Total, net change	$	(80)	$	53

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 June 30, 2025.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2025, 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 June 30, 2025, 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, 2024.

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

In October 2022, our Board of Directors authorized a new repurchase plan of $200 million of our outstanding common stock and authorized an additional $200 million in each of July 2023 and July 2024. The stock repurchase program may be suspended, modified or discontinued at any time at our discretion. As of June 30, 2025, $190 million of common stock remain available for repurchase. During the three months ended June 30, 2025, no shares of our common stock were repurchased.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Rule 10b5-1 Plan Trading Arrangements

On June 13, 2025 , Jay Bray , our Chairman and Chief Executive Officer , entered into a pre-arranged stock trading plan (the “10b5-1 Plan”) with a brokerage firm to sell up to a maximum of 240,000 shares of the Company’s common stock between October 2, 2025 and October 2, 2026. The 10b5-1 Plan was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1 (c) under the Securities Exchange Act of 1934, as amended, and the Company’s policies regarding transactions in Company securities.

Certain Compensation Arrangements

As previously reported, on January 9, 2025, Mike Rawls, EVP & Chief Executive Officer of Xome, notified the Company of his intention to retire from his position at the Company on June 30, 2025. On July 18, 2025, the Compensation Committee of the Board of Directors of the Company approved (i) a pro-rated Executive Management Incentive Program bonus at target for Mr. Rawls in the amount of $540,000 in recognition of Mr. Rawls’ service to the Company during 2025 and (ii) the Company’s payment of Mr. Rawls’ COBRA coverage for 18 months.

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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 Number 10 dated June 24, 2025 to Mortgage Loan Participation Sale Agreement dated as of August 30, 2016 between JPMorgan Chase Bank, National Association, as purchaser and Nationstar Mortgage LLC, as seller

10.2

Amendment Number Five, dated April 4, 2025 to Second Amended and Restated Loan and Security Agreement, dated as of April 3, 2023, between Nationstar Mortgage LLC, as borrower and Citibank, N.A. as lender

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

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

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

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

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.

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101.)

† Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such schedules and exhibits, or any section thereof, to the SEC upon its 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.

July 23, 2025						/s/ Jay Bray
Date						Jay Bray Chief Executive Officer (Principal Executive Officer)

July 23, 2025						/s/ Kurt Johnson
Date						Kurt Johnson Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer)

TABLE OF CONTENTS

Part I. Financial Information Item 1. Financial Statements Note 13, Fair Value Measurements Note 9, Indebtedness Note 8, Derivative Financial Instruments Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Note 16, Segment Information Note 3, Mortgage Servicing Rights and Related Liabilities Note 14, Capital Requirements,Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Item 1. Legal Proceedings Note 15, Commitments and Contingencies Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits

Exhibits

10.1 Amendment Number 10 dated June 24, 2025 to Mortgage Loan Participation Sale Agreement dated as of August 30, 2016 between JPMorgan Chase Bank, National Association, as purchaser and Nationstar Mortgage LLC, as seller 10.2 Amendment Number Five, dated April 4, 2025 to Second Amended and Restated Loan and Security Agreement, dated as of April 3, 2023, between Nationstar Mortgage LLC, as borrower and Citibank, N.A. as lender 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 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 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 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

Supplier name	Ticker
Wells Fargo & Company	WFC
U.S. Bancorp	USB
Citigroup Inc.	C
Bank of America Corporation	BAC
JPMorgan Chase & Co.	JPM
The Bank of New York Mellon Corporation	BK
The Charles Schwab Corporation	SCHW

COOP 10-Q Quarter ended June 30, 2025

Exhibits