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 ~~September~~March 3031, ~~2024~~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 ~~October~~April 18, ~~2024~~2025 was 63,~~983~~985,~~716~~389.

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 September 30, 2024 (unaudited) and December 31, 2023	3
	Condensed Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024	3
	Condensed Consolidated Statements of Operations (unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023	4
	Condensed Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2025 and 2024	4
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the Three and Nine Months Ended September 30, 2024 and 2023	5
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the Three Months Ended March 31, 2025 and 2024	5
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2024 and 2023	7
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2025 and 2024	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	97
	1. Nature of Business and Basis of Presentation	97
	2. Acquisitions	10
	2. Merger and Acquisition	8
	3. Mortgage Servicing Rights and Related Liabilities	118
	4. Advances and Other Receivables	1311
	5. Mortgage Loans Held for Sale	1513
	6. Loans Subject to Repurchase from Ginnie Mae	1614
	7. Goodwill and Intangible Assets	1614
	8. Derivative Financial Instruments	1614
	9. Indebtedness	1816
	10. Securitizations and Financings	2018
	11. Earnings Per Share	2119
	12. Income Taxes	2119
	13. Fair Value Measurements	2119
	14. Capital Requirements	2523
	15. Commitments and Contingencies	2523
	16. Segment Information	2725
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3028
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5448
Item 4.	Controls and Procedures	5549
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	5650
Item 1A.	Risk Factors	5650
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5650
Item 3.	Defaults Upon Senior Securities	5650
Item 4.	Mine Safety Disclosures	5650
Item 5.	Other Information	5650
Item 6.	Exhibits	5751

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)

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
	(unaudited)
Assets
Cash and cash equivalents	$	~~733~~784	$	~~571~~753
Restricted cash	~~186~~166		~~169~~220
Mortgage servicing rights at fair value	1011,~~035~~345		911,~~090~~736
Advances and other receivables, net of reserves of $115 and $170, respectively	940		996
Advances and other receivables, net of reserves of $117 and $112, respectively	1,061		1,345
Mortgage loans held for sale at fair value	12,~~962~~603		~~927~~2,211
Property and equipment, net of accumulated depreciation of $152 and $141, respectively	58		53
Property and equipment, net of accumulated depreciation of $142 and $157, respectively	63		58
Deferred tax assets, net	~~315~~217		~~472~~230
Other assets	12,~~957~~207		12,~~918~~386
Total assets	$	1618,~~186~~446	$	1418,~~196~~939
Liabilities and Stockholders’ Equity
Unsecured senior notes, net	$	4,~~885~~896	$	34,~~151~~891
Advance, warehouse and MSR facilities, net	46,~~379~~313		46,~~302~~495
Payables and other liabilities	1,~~841~~949		12,~~995~~322
MSR related liabilities - nonrecourse at fair value	~~443~~398		~~466~~418
Total liabilities	1113,~~548~~556		914,~~914~~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,~~068~~052		1,~~087~~077
Retained earnings	45,~~767~~059		4,~~302~~971
Treasury shares at cost - 29.2 million and 28.6 million shares, respectively	(1,198)		(1,108)
Treasury shares at cost - 29.2 million and 29.6 million shares, respectively	(1,222)		(1,236)
Total stockholders’ equity	4,~~638~~890		4,~~282~~813
Total liabilities and stockholders’ equity	$	1618,~~186~~446	$	1418,~~196~~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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2024

2023

2024

2023

2025

2024

Revenues:

Service related, net

~~288~~440

~~432~~478

~~1,251~~

~~1,095~~

Net gain on mortgage loans held for sale

~~136~~120

~~142~~86

~~320~~

~~295~~

Total revenues

~~424~~560

~~574~~564

~~1,571~~

~~1,390~~

Expenses:

Salaries, wages and benefits

~~182~~193

~~166~~159

~~509~~

~~470~~

General and administrative

~~153~~237

~~135~~158

~~443~~

~~370~~

Total expenses

~~335~~430

~~301~~317

~~952~~

~~840~~

Interest income

~~227~~189

~~167~~158

~~574~~

~~369~~

Interest expense

(~~199~~213)

(~~146~~170)

~~(556)~~

~~(378)~~

Other (expense) income, net

(5)

(16)

Other expense, net

(11)

(3)

Total other income (expense), net

Total other expense, net

(35)

(15)

Income before income tax expense

~~112~~95

~~352~~232

~~621~~

~~585~~

Less: Income tax expense

327

7751

~~156~~

~~131~~

Net income

8088

~~275~~181

~~465~~

~~454~~

Earnings per share

Basic

1.2438

42.1480

~~7.21~~

~~6.70~~

Diluted

1.2235

42.0673

~~7.06~~

~~6.58~~

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 June 30, 2023		66,848	$	1	$	1,074	$	3,981	$	(977)	$	4,079
Balance at January 1, 2024		64,599	$	1	$	1,087	$	4,302	$	(1,108)	$	4,282
Shares issued / (surrendered) under incentive compensation plan		25657	—		(144)		—		117		—(27)
Share-based compensation		—	—		8		—		—		8
Repurchase of common stock		(~~1,039~~537)	—		—		—		(5839)		(5839)
Net income		—	—		—		~~275~~181		—		~~275~~181
Balance at September 30, 2023		65,834	$	1	$	1,081	$	4,256	$	(1,034)	$	4,304
Balance at March 31, 2024		64,719	$	1	$	1,051	$	4,483	$	(1,130)	$	4,405
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		11402	—		(139)		—		—14		(125)
Share-based compensation		—	—		1114		—		—		1114
Repurchase of common stock		(516)	—		—		—		(46)		(46)
Net income		—	—		—		88		—		88
Net income		—	—		—		80		—		80
Balance at March 31, 2025		63,983	$	1	$	1,052	$	5,059	$	(1,222)	$	4,890
Balance at September 30, 2024		63,979	$	1	$	1,068	$	4,767	$	(1,198)	$	4,638

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, 2023		69,266	$	1	$	1,104	$	3,802	$	(850)	$	4,057
Shares issued / (surrendered) under incentive compensation plan		902	—		(44)		—		20		(24)
Share-based compensation		—	—		21		—		—		21
Repurchase of common stock		(4,334)	—		—		—		(204)		(204)
Net income		—	—		—		454		—		454
Balance at September 30, 2023		65,834	$	1	$	1,081	$	4,256	$	(1,034)	$	4,304
Balance at January 1, 2024		64,599	$	1	$	1,087	$	4,302	$	(1,108)	$	4,282
Shares issued / (surrendered) under incentive compensation plan		731	—		(47)		—		19		(28)
Share-based compensation		—	—		28		—		—		28
Repurchase of common stock		(1,351)	—		—		—		(109)		(109)
Net income		—	—		—		465		—		465
Balance at September 30, 2024		63,979	$	1	$	1,068	$	4,767	$	(1,198)	$	4,638

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)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Operating Activities
Net income	$	~~465~~88	$	~~454~~181
Adjustments to reconcile net income to net cash attributable to operating activities:
Deferred tax expense	~~156~~13		~~108~~46
Net gain on mortgage loans held for sale	(~~320~~120)		(~~295~~86)
Provision for servicing and non-servicing reserves	1914		2615
Fair value changes in mortgage servicing rights	~~694~~505		~~140~~(10)
Fair value changes in MSR related liabilities	26(5)		~~(2)~~6
Depreciation and amortization for property and equipment and intangible assets	2518		288
Adjustment/Recognition of bargain purchase gain	4		(96)
(Gain) loss on MSR hedging activities	(209)		122
(Gain) loss on MSR hedging activities	(64)		244
Loss on MSR and excess yield sales	15		12
Gain on MSR and excess yield sales	(10)		(29)
Other operating activities	32		18
Other operating activities	70		88
Sales proceeds and loan payment proceeds for mortgage loans held for sale	8,478		3,195
Sales proceeds and loan payment proceeds for mortgage loans held for sale	13,862		11,187
Mortgage loans originated and purchased for sale, net of fees	(8,353)		(2,942)
Mortgage loans originated and purchased for sale, net of fees	(13,664)		(10,104)
Repurchases of loan assets out of Ginnie Mae securitizations	(545)		(386)
Repurchases of loan assets out of Ginnie Mae securitizations	(1,171)		(984)
Changes in assets and liabilities:
Advances and other receivables	4262		~~291~~56
Other assets	~~178~~295		(~~137~~56)
Payables and other liabilities	(~~195~~261)		(~~147~~151)
Net cash attributable to operating activities	79227		~~772~~28
Investing Activities
Acquisitions of business, net of cash acquired	—		(522)
Property and equipment additions, net of disposals	(13)		(8)
Acquisition of assets	—		(34)
Purchase of mortgage servicing rights	(149)		(740)
Property and equipment additions, net of disposals	(27)		(16)
Proceeds on sale of mortgage servicing rights and excess yield	159		38
Purchase of mortgage servicing rights	(1,767)		(1,073)
Other investing activities	(21)		(5)
Proceeds on sale of mortgage servicing rights and excess yield	317		560
Net cash attributable to investing activities	(24)		(715)
Other investing activities	(20)		(3)
Net cash attributable to investing activities	(1,497)		(1,088)
Financing Activities
Increase in advance, warehouse and MSR facilities	84		617
Decrease in advance, warehouse and MSR facilities	(186)		(215)
Settlements and repayment of excess spread financing	(4915)		(5917)
Issuance of unsecured senior notes	~~1,750~~—		—1,000
Repurchase of common stock	~~(109)~~—		(~~204~~39)
Other financing activities	(7925)		(3647)
Net cash attributable to financing activities	~~1,597~~(226)		~~318~~682
Net increase in cash, cash equivalents, and restricted cash	179		2
Net decrease in cash, cash equivalents, and restricted cash	(23)		(5)
Cash, cash equivalents, and restricted cash - beginning of period	~~740~~973		~~702~~740
Cash, cash equivalents, and restricted cash - end of period(1)	$	~~919~~950	$	~~704~~735
Supplemental Disclosures of Non-cash Investing Activities
Purchase of mortgage servicing rights holdback payable	$	102	$	4048
Sale of mortgage servicing rights holdback receivable	$	59	$	272

Table of Contents

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

	September 30, 2024		September 30, 2023
	March 31, 2025		March 31, 2024
Cash and cash equivalents	$	~~733~~784	$	~~553~~578
Restricted cash	~~186~~166		~~151~~157
Total cash, cash equivalents, and restricted cash	$	~~919~~950	$	~~704~~735

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 ~~one of~~ 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, ~~2023~~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 ~~borrowers~~customers.

Recent Accounting Guidance Adopted

The Company did not adopt any accounting guidance during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 that had a material impact on its condensed consolidated financial statements or disclosures.

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2. ~~Acquisitions~~Merger and Acquisition

~~Acquisition~~Merger of ~~Assets~~Mr. Cooper Group Inc. and Rocket Companies, Inc.

~~During~~On ~~the~~March ~~second~~31, ~~quarter of 2023~~2025, ~~the~~Mr. ~~Company~~Cooper ~~acquired~~Group ~~certain~~Inc. ~~assets~~ and ~~liabilities~~Rocket ofCompanies, ~~Rushmore~~Inc. ~~Loan Management Services LLC~~ (“~~Rushmore~~Rocket”) ~~for~~announced aentry ~~total~~into ~~purchase~~a ~~price~~definitive ofagreement ~~$34~~for ~~(the~~Rocket ~~“Rushmore~~to ~~Transaction”).~~acquire ~~Assets~~all ~~acquired~~of ~~were~~the ~~recorded~~outstanding inshares ~~the~~of ~~Servicing~~Mr. ~~segment~~Cooper ~~and~~in ~~primarily~~an ~~included~~all-stock ~~subservicing~~transaction ~~contracts~~for ~~and~~$9.4 ~~related~~billion ~~servicing~~in ~~advances~~equity ~~and~~value, ~~receivables.~~based ~~The~~on ~~Company~~an ~~accounted~~11.0x ~~for~~exchange ~~the~~ratio. The transaction asis anexpected ~~asset~~to ~~acquisition~~close in ~~accordance~~the ~~with~~fourth ~~Accounting~~quarter ~~Standard~~of ~~Codification Topic 805~~2025, ~~Business~~subject ~~Combinations~~to ~~(“ASC~~approval ~~805”),~~of ~~whereby~~Mr. ~~the~~Cooper ~~purchase~~shareholders ~~price~~and ~~represents~~the ~~relative~~satisfaction ~~fair~~of ~~value~~other ofclosing ~~assets~~conditions, ~~and~~including ~~liabilities~~customary ~~acquired.~~regulatory approvals.

Acquisition of Roosevelt Management Company and Affiliated Companies

In July 2023, the Company acquired all the equity interests of Roosevelt Management Company, LLC (“Roosevelt”), an investment management firm, and its affiliated subsidiaries including Rushmore Loan Management Services LLC, which was subsequently renamed to Cypress Loan Servicing LLC, and other entities, for a total purchase price of $28 (“Roosevelt Transaction”). The Company accounted for the transaction as a business combination in accordance with ASC 805 using the acquisition method of accounting. Under the acquisition method of accounting, the Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess of the purchase price over those fair values allocated to goodwill. The Company recorded $4 of intangible assets and $21 of goodwill based on the purchase price allocation. $5 and $16 of the goodwill is assigned to Servicing segment and Corporate/Other segment, respectively. The goodwill will be deductible for tax purposes. The financial results of Rushmore and Roosevelt were included in Servicing segment and Corporate/Other segment, respectively. The Company finalized its allocation of fair value of consideration transferred during the three months ended December 31, 2023.

Acquisition of Home Point Capital Inc.

In May 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) and a mortgage servicing rights purchase and sale agreement (“Purchase Agreement”) with Home Point Capital Inc. (“Home Point”), a Delaware corporation. Per the Merger Agreement, the Company agreed to commence a tender offer to acquire all of the outstanding shares of common stock of Home Point, other than certain excluded shares. The Home Point transactions closed in the third quarter of 2023 for total consideration of approximately $658. The Purchase Agreement was a bulk purchase of a portion of Home Point’s MSR portfolio for $335. The Merger Agreement was the tender offer to acquire outstanding shares of common stock of Home Point, which included the benefit of the cash paid in the bulk purchase of Home Point’s MSR portfolio. The net consideration paid for the two transactions was $323, or $2.33 per share.

The Company accounted for the two transactions as one business combination (“Home Point Acquisition”) in accordance with ASC 805 using the acquisition method of accounting. Under the acquisition method of accounting, the Company allocated the purchase price of the acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The Company acquired $1.2 billion mortgage servicing rights (“MSRs”) and assumed an unsecured senior note with a principal balance of $500, among other acquired net assets. During the third quarter of 2023, the Company recorded a preliminary bargain purchase gain of $96 in “other income (expense), net” within the condensed consolidated statements of operations and reported under Corporate/Other segment, which represents the excess of the estimated fair value of net assets acquired over the consideration transferred. In June 2024, the Company finalized its review of tax matters related to the Home Point Acquisition, resulting in an increase of $4 in other liabilities and a reduction of $4 in the previously recorded bargain purchase gain. Purchase accounting for the Home Point Acquisition is now finalized and the final bargain purchase gain related to the acquisition was $92.

The Company believes it was able to negotiate a bargain purchase price due to seller’s operational challenges from significant market volatility, as well as the seller’s desire to exit the business in an expedited manner.

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

On July 24, 2024, the Company entered into ~~definitive~~an ~~agreements~~asset topurchase ~~acquire~~agreement ~~certain~~(the ~~mortgage~~“Asset ~~operation~~Purchase ~~assets~~Agreement”) and an Agreement for the Bulk Purchase and Sale of Mortgage Servicing Rights (the “MSR Purchase Agreement”) with Flagstar Bank, N.A., ~~including~~(“Flagstar”) ~~approximately $1.1 billion~~ in ~~mortgage~~contemplation ~~servicing~~of ~~rights~~one another (collectively “~~MSR~~the Flagstar Transaction”). ~~and~~Per ~~related~~the ~~advances,~~Asset ~~subservicing~~Purchase ~~contracts~~Agreement, ~~and~~the aCompany ~~third-party~~agreed ~~originations~~to ~~platform~~purchase certain MSRs held by Flagstar. ~~This~~The ~~purchase~~Flagstar ~~will~~transaction beclosed 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. ~~Upon~~The ~~closing,~~acquired ~~the~~assets ~~Company~~primarily ~~expects~~consist toof ~~onboard~~approximately $1.32 ~~million~~billion ~~customers~~of MSRs and ~~add~~related ~~approximately~~advances, and $~~350 billion~~101 inof ~~UPB~~client relationship intangibles associated with subservicing contracts. The Company accounted for the transaction isas ~~expected~~an toasset ~~close~~acquisition in ~~the~~accordance ~~fourth~~with ~~quarter~~Accounting ofStandard ~~2024~~Codification Topic 805, ~~subject~~Business Combinations (“ASC 805”), whereby the purchase price was allocated to ~~customary~~net ~~closing~~assets ~~conditions~~based on their relative fair values.

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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	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
MSRs - fair value	$	10,035	$	9,090
MSRs at fair value	$	11,345	$	11,736
Excess spread financing at fair value	$	~~403~~366	$	~~437~~386
Mortgage servicing rights financing at fair value	4032		2932
MSR related liabilities - nonrecourse at fair value	$	~~443~~398	$	~~466~~418

Mortgage Servicing Rights

The following table sets forth the activities of MSRs:

	Nine Months Ended September 30,
	Three Months Ended March 31,
MSRs - Fair Value	~~2024~~2025		~~2023~~2024
Fair value - beginning of period	$	9,090	$	6,654
Balance - beginning of period	$	11,736	$	9,090
Additions:
Servicing retained from mortgage loans sold	~~267~~164		~~219~~64
Purchases and acquisitions of servicing rights	~~1,640~~106		~~2,305~~663
Dispositions:
Sales of servicing assets and excess yield	(~~297~~164)		(~~555~~42)
Changes in fair value:
Changes in valuation inputs or assumptions used in the valuation model (MSR MTM)	(44274)		~~304~~189
Changes in valuation due to amortization	(~~650~~231)		(~~444~~179)
Other changes(1)	298		2111
Fair value - end of period	$	10,035	$	8,504
Balance - end of period	$	11,345	$	9,796

(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 ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the Company sold $71,~~716~~505 and $233,~~789~~144 in unpaid principal balance (“UPB”) of MSRs, of which $71,~~319~~299 and $223,~~640~~003 were retained by the Company as subservicer, respectively.

During the nine months ended September 30, 2024 and 2023, 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 $27,841 and $41,958 for proceeds of $226 and $294, respectively. During the nine months ended September 30, 2024 and 2023, the Company recorded a gain of $27 and $33, respectively, through the mark-to-market adjustments within “revenues - service related, net” in the condensed consolidated statements of operations. 8

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.

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During the three months ended March 31, 2025, 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 for proceeds of $138. During the three months ended March 31, 2025, the Company recorded a loss of $10, through the mark-to-market adjustments within “revenues - service related, net” in the condensed consolidated statements of operations.

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

September 30, 2024

December 31, 2023

March 31, 2025

December 31, 2024

MSRs - UPB and Fair Value Breakdown by Investor Pools

UPB

Fair Value

UPB

Fair Value

Agency

~~652~~708,~~901~~803

911,~~686~~012

~~561~~710,~~656~~997

811,~~774~~397

Non-agency

2524,~~211~~949

~~349~~333

2625,~~286~~074

~~316~~339

Total

~~678~~733,~~112~~752

1011,~~035~~345

~~587~~736,~~942~~071

911,~~090~~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 bpsAdverseChange

200 bpsAdverseChange

10%AdverseChange

20%AdverseChange

10%AdverseChange

20%AdverseChange

September 30, 2024

March 31, 2025

Mortgage servicing rights

(~~392~~444)

(~~754~~854)

(~~293~~304)

(~~567~~588)

(8183)

(~~162~~166)

December 31, 2023

December 31, 2024

Mortgage servicing rights

(~~368~~470)

(~~706~~904)

(~~219~~308)

(~~425~~597)

(8984)

(~~178~~169)

Excess Spread Financing - Fair Value

The Company had excess spread financing liability of $~~403~~366 and $~~437~~386, related to the UPB of $6864,~~594~~839 and $7466,~~219~~519 as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~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 bpsAdverseChange		200 bpsAdverseChange		10%AdverseChange		20%AdverseChange
September 30, 2024
March 31, 2025
Excess spread financing	$	1413	$	2926	$	98	$	1917
December 31, 2023
December 31, 2024
Excess spread financing	$	1613	$	3228	$	108	$	2017

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.

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Mortgage Servicing Rights Financing - Fair Value

The Company had MSR financing liability of $4032 ~~and $29~~ as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023, respectively~~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 September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
Revenues - Service related, net	~~2024~~2025		~~2023~~2024		~~2024~~		~~2023~~
Contractually specified servicing fees(1)	$	~~556~~621	$	~~440~~514	$	~~1,617~~	$	~~1,231~~
Other service-related income(1)	1835		2522		56		58
Incentive and modification income(1)	1625		18		50		32
Servicing late fees(1)	3338		2430		94		68
Mark-to-market adjustments - Servicing
MSR MTM	(~~388~~274)		~~270~~189		~~(44)~~		~~304~~
Gain (loss) on MSR hedging activities	~~289~~209		(~~192~~122)		64		~~(244)~~
(Loss) gain on MSR sales	(1)		(3)		10		29
Loss on MSR and excess yield sales	(15)		(12)
Reclassifications to reserve provision(2)	(56)		(86)		~~(17)~~		~~(26)~~
Excess spread / MSR financing MTM	~~(20)~~5		(46)		~~(26)~~		2
Total mark-to-market adjustments - Servicing	(~~125~~81)		6343		~~(13)~~		65
Amortization, net of accretion
MSR amortization	(~~245~~231)		(~~171~~179)		~~(650)~~		~~(444)~~
Excess spread accretion	108		119		28		32
Total amortization, net of accretion	(~~235~~223)		(~~160~~170)		~~(622)~~		~~(412)~~
Originations service related fees(3)	2426		1816		59		45
Corporate/Xome service related fees	1817		22		60		62
Other(4)	(1718)		(1817)		~~(50)~~		~~(54)~~
Total revenues - Service related, net	$	~~288~~440	$	~~432~~478	$	~~1,251~~	$	~~1,095~~

(1)~~The Company recognizes revenue on an earned basis for services performed.~~ Amounts include subservicing related revenues. Amounts also include servicing fees from loans sold with servicing retained of $~~189~~203 and $~~175~~185 for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively, and $563 and $528 for the nine months ended September 30,~~ 2024 ~~and 2023~~, 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	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
Servicing advances, net of $7 and $13 purchase discount	$	1,012	$	1,065
Servicing advances, net of $5 and $6 purchase discount, respectively	$	1,132	$	1,410
Receivables from agencies, investors and prior servicers, net of zero and $6 purchase discount	43		101
Receivables from agencies, investors and prior servicers	46		47
Reserves	(~~115~~117)		(~~170~~112)
Total advances and other receivables, net	$	~~940~~1,061	$	~~996~~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 September 30,				Nine Months Ended September 30,
					Three Months Ended March 31,
Reserves for Advances and Other Receivables	~~2024~~		~~2023~~		~~2024~~2025		~~2023~~2024
Balance - beginning of period	$	~~149~~	$	~~156~~	$	~~170~~112	$	~~137~~170
Provision(1)	8		8		1914		2615
Reclassifications(2)	6		11		23(1)		279
Write-offs(3)	~~(48)~~		~~(11)~~		(978)		(2650)
Balance - end of period	$	~~115~~	$	~~164~~	$	~~115~~117	$	~~164~~144

(1)The Company recorded a provision of $56 ~~and $8~~ through the MTM adjustments in “revenues - service related, net” in the condensed consolidated statements of operations during the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively and a provision of $17 and $26 during the nine months ended September 30,~~ 2024 ~~and 2023, 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

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

	Three Months Ended September 30,
	Three Months Ended March 31,
	2024				2023
	2025				2024
Purchase Discount for Advances and Other Receivables	Servicing Advances		Receivables from Agencies, Investors and Prior Servicers		Servicing Advances		Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	126	$	—	$	913	$	76
Additions	—		—		4		—
Utilization of purchase discounts	(1)		—		(1)		(6)
Utilization of purchase discounts	(5)		—		(1)		—
Balance - end of period	$	5	$	—	$	12	$	—
Balance - end of period	$	7	$	—	$	12	$	7

	Nine Months Ended September 30,
	2024				2023
Purchase Discount for Advances and Other Receivables	Servicing Advances		Receivables from Agencies, Investors and Prior Servicers		Servicing Advances		Receivables from Agencies, Investors and Prior Servicers
Balance - beginning of period	$	13	$	6	$	12	$	7
Additions	—		—		4		—
Utilization of purchase discounts	(6)		(6)		(4)		—
Balance - end of period	$	7	$	—	$	12	$	7

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 September 30,								Nine Months Ended September 30,
			Three Months Ended March 31,
CECL Allowance for Advances and Other Receivables	~~2024~~		2025		~~2023~~		2024		~~2024~~		~~2023~~
Balance - beginning of period	$	19	$	13	$	37	$	35	$	35	$	36
Provision	1		(1)		~~(1)~~		1		4		—
Write-offs(1)	~~(2)~~		—		—		(19)		~~(21)~~		—
Balance - end of period(2)	$	18			$	36			$	18	$	36
Balance - end of period			$	12			$	17

(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)As of September 30, 2024, $18 was recorded in reserves. As of September 30, 2023, $29 and $7 were recorded in reserves and purchase discount for advances and other receivables, respectively.

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

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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	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
Mortgage loans held for sale – UPB	$	12,~~916~~540	$	~~924~~2,187
Mark-to-market adjustment(1)	4663		324
Total mortgage loans held for sale	$	12,~~962~~603	$	~~927~~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.

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

	Nine Months Ended September 30,
	Three Months Ended March 31,
Mortgage Loans Held for Sale	~~2024~~2025		~~2023~~2024
Balance - beginning of period	$	~~927~~2,211	$	~~893~~927
Loans sold (at carrying value) and loan payments received	(138,~~821~~535)		(113,~~146~~186)
Mortgage loans originated and purchased, net of fees	138,~~664~~353		102,~~155~~942
Repurchase of loans out of Ginnie Mae securitizations(1)	~~1,171~~545		~~984~~386
Net change in unrealized gain on retained loans held for sale	2330		103
Net transfers of mortgage loans held for sale(2)	(21)		(32)
Balance - end of period	$	12,~~962~~603	$	~~893~~1,070

(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 ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the Company recorded a total realized ~~gain~~loss of $4157 and a gain of $429 from total sales proceeds of $138,~~896~~585 and $103,~~990~~162, 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:

	September 30, 2024				December 31, 2023
	March 31, 2025				December 31, 2024
Mortgage Loans Held for Sale	UPB		Fair Value		UPB		Fair Value
Non-accrual(1)	$	4748	$	3740	$	4247	$	3638

(1)Non-accrual UPB includes $3440 and $3538 of UPB related to Ginnie Mae repurchased loans as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively.

The total UPB of mortgage loans held for sale for which the Company has begun formal foreclosure proceedings was $4625 and $3022 as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively.

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6. Loans Subject to Repurchase from Ginnie Mae

Loans are sold to Ginnie Mae in conjunction with the issuance of mortgage-backed securities. The Company, as the issuer of the mortgage-backed securities, has the unilateral right to repurchase any individual loan in a Ginnie Mae securitization pool if that loan meets certain criteria, including payments not being received from ~~borrowers~~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 $~~971~~1,115 and $~~966~~1,176 as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively, which are included in both “other assets” and “payables and other liabilities” in the condensed consolidated balance sheets.

7. Goodwill and Intangible Assets

The Company had goodwill of $141 as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, and intangible assets of $23108 and $28119 as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively. Goodwill and intangible assets are included in “other assets” within the condensed consolidated balance sheets. .

8. Derivative Financial Instruments

Derivative instruments are used as part of the overall strategy to manage exposure to interest rate risks related to mortgage loans held for sale and IRLCs (“the pipeline”) and the MSR portfolio. The Company economically hedges the pipeline separately from the MSR portfolio primarily using third-party derivative instruments. Such derivative instruments utilized by the Company include IRLCs, 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 ~~statement~~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.

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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.

		September 30, 2024				Nine Months Ended September 30, 2024
		March 31, 2025				Three Months Ended March 31, 2025
Derivative Financial Instruments	ExpirationDates	OutstandingNotional		FairValue		Gain/(Loss)
Assets
Mortgage loans held for sale
Loan sale commitments	~~2024~~2025	$	~~992~~1,128	$	2713	$	16—
Derivative financial instruments
IRLCs	2024	$	1,464	$	41	$	21
Treasury futures	2025	$	4,140	$	54	$	55
LPCs	2024	558		3		—
IRLCs	2025	997		38		16
Forward MBS trades	~~2024~~2025	27,~~152~~977		715		~~156~~121
Treasury futures	2024	4,272		16		113
LPCs	2025	1,138		8		2
Total derivative financial instruments - assets		$	814,~~446~~252	$	67115	$	~~290~~194
Liabilities
Derivative financial instruments
IRLCs	2024	$	49	$	—	$	—
Forward MBS trades	2025	$	3,640	$	16	$	(67)
LPCs	~~2024~~2025	~~571~~474		32		~~(2)~~5
Forward MBS trades	2024	9,633		44		(237)
Treasury futures	2025	290		1		53
Total derivative financial instruments - liabilities		$	10,253	$	47	$	(239)
IRLCs	2025	7		—		—
Total derivative financial instruments - liabilities		$	4,411	$	19	$	(9)


		March 31, 2024				Three Months Ended March 31, 2024
Derivative Financial Instruments	Expiration Dates	Outstanding Notional		Fair Value		Gain/(Loss)
Assets
Mortgage loans held for sale
Loan sale commitments	2024	$	399	$	15	$	4
Derivative financial instruments
IRLCs	2024	$	765	$	27	$	6
Treasury futures	2024	2,969		18		(95)
Forward MBS trades	2024	1,801		9		(2)
LPCs	2024	244		1		(1)
Total derivative financial instruments - assets		$	5,779	$	55	$	(92)
Liabilities
Derivative financial instruments
Forward MBS trades	2024	$	3,930	$	10	$	(28)
Treasury future	2024	343		1		—
LPCs	2024	91		—		—
IRLCs	2024	2		—		—
Total derivative financial instruments - liabilities		$	4,366	$	11	$	(28)

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		September 30, 2023				Nine Months Ended September 30, 2023
Derivative Financial Instruments	ExpirationDates	OutstandingNotional		FairValue		Gain/(Loss)
Assets
Mortgage loans held for sale
Loan sale commitments	2023	$	304	$	6	$	(4)
Derivative financial instruments
IRLCs	2023	$	813	$	22	$	—
LPCs	2023	121		1		—
Forward MBS trades	2023	1,383		13		74
Treasury futures	2023	5		—		—
Total derivative financial instruments - assets		$	2,322	$	36	$	74
Liabilities
Derivative financial instruments
IRLCs	2023	$	40	$	—	$	—
LPCs	2023	288		2		—
Forward MBS trades	2023	1,249		28		(97)
Treasury futures	2023	2,353		65		(196)
Total derivative financial instruments - liabilities		$	3,930	$	95	$	(293)

As of March 31, 2025, the Company held $78 in collateral deposits on derivative instruments. As of December 31, 2024 the Company held $216 and $3 in collateral deposits and collateral obligations on derivative instruments, respectively. Collateral deposits and collateral obligations are recorded in “other assets” and “payables and other liabilities,” respectively, in the 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.

As of September 30, 2024, the Company held $98 in collateral deposits on derivative instruments. As of December 31, 2023 the Company held $8 and $56 in collateral deposits and collateral obligations on derivative instruments, respectively. Collateral deposits and collateral obligations are recorded in “other assets” and “payables and other liabilities,” respectively, in the 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

					September 30, 2024				December 31, 2023
					March 31, 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	$	~~211~~257	$	~~304~~366	$	—285	$	—394
$500 advance facility(2)	Aug 2026	Servicing advance receivables	500		253		285		250		326
$500 advance facility	Aug 2026	Servicing advance receivables	500		318		358		423		475
$350 advance facility	Oct 2026	Servicing advance receivables	350		~~113~~108		~~144~~136		~~132~~119		~~169~~151
$300 advance facility(3)	Nov 2024	Servicing advance receivables	300		—		—		273		364
$50 advance facility(2)	Jul 2025	Servicing advance receivables	50		22		26		22		40
$30 advance facility(4)	Dec 2024	Servicing advance receivables	30		27		40		27		49
Advance facilities principal amount					705		886		849		1,060
Advance facilities principal amount					604		773		682		908
Warehouse Facilities
$1,500 warehouse facility	Jun 2025	Mortgage loans or MBS	1,500		6190		6190		~~107~~68		~~104~~71
$1,200 warehouse facility(5)	Sep 2026	Mortgage loans or MBS	1,200		426		473		158		177
$1,200 warehouse facility(3)	Sep 2026	Mortgage loans or MBS	1,200		283		323		131		148
$750 warehouse facility	Jan 2025	Mortgage loans or MBS	750		82		105		137		176
$1,000 warehouse facility(4)	Oct 2025	Mortgage loans or MBS	1,000		388		417		489		530
$750 warehouse facility	~~Oct~~Mar ~~2025~~2027	Mortgage loans or MBS	750		~~530~~195		~~558~~230		~~155~~112		~~166~~140
$500 warehouse facility	Jun 2025	Mortgage loans or MBS	500		72		75		72		78
$600 warehouse facility	Aug 2025	Mortgage loans or MBS	600		404		413		368		381
$350 warehouse facility(6)	Aug 2025	Mortgage loans or MBS	350		276		282		73		75
$500 warehouse facility	Nov 2025	Mortgage loans or MBS	500		413		427		247		256
$200 warehouse facility	Dec 2024	Mortgage loans or MBS	200		180		186		82		84
$500 warehouse facility	Jun 2025	Mortgage loans or MBS	500		56		72		90		99
$200 warehouse facility	Jan 2025	Mortgage loans or MBS	200		—		—		12		21
$250 warehouse facility	Nov 2025	Mortgage loans or MBS	250		155		166		238		253
$100 warehouse facility	Apr 2025	Mortgage loans or MBS	100		80		89		25		33
$200 warehouse facility	Dec 2026	Mortgage loans or MBS	200		159		181		112		123
$100 warehouse facility	Apr 2025	Mortgage loans or MBS	100		—		—		—		—
$200 warehouse facility(5)	Apr 2025	Mortgage loans or MBS	200		—		—		—		—
$100 warehouse facility (4)	Dec 2024	Mortgage loans or MBS	100		56		56		1		1
$200 warehouse facility (2)	Jul 2025	Mortgage loans or MBS	200		145		145		105		105
$1 warehouse facility	Dec 2024	Mortgage loans or MBS	1		—		—		—		—
$100 warehouse facility	Apr 2026	Mortgage loans or MBS	100		36		41		56		62
Warehouse facilities principal amount					1,763		1,885		822		915
$100 warehouse facility	Apr 2026	Mortgage loans or MBS	100		—		—		—		—
$1 warehouse facility	Dec 2025	Mortgage loans or MBS	1		—		—		—		—
Warehouse facilities principal amount					2,324		2,505		2,016		2,168
MSR Facilities
$1,750 warehouse facility	Apr 2026	MSR	1,750		~~550~~900		2,~~463~~753		~~980~~950		12,~~455~~669
$1,500 warehouse facility(1)	Jul 2026	MSR	1,500		~~470~~475		2,~~212~~583		—475		—2,607
$1,450 warehouse facility(3)	Nov 2024	MSR	1,450		—		—		300		2,164
$950 warehouse facility(3)	Sep 2026	MSR	950		345		1,414		550		1,711
$950 warehouse facility(5)	Sep 2026	MSR	950		155		1,287		545		1,306
$950 warehouse facility(6)	Jul 2026	MSR	950		550		1,017		670		1,066
$500 warehouse facility	Jun 2026	MSR	500		250		~~501~~496		—250		—519
$500 warehouse facility	~~Jul~~Apr ~~2026~~2027	MSR	500		~~100~~250		~~722~~752		~~405~~250		~~655~~781
$500 warehouse facility	~~Apr~~Jun 2026	MSR	500		~~250~~150		~~740~~736		~~305~~150		~~634~~726
$500 warehouse facility	~~Jun~~Jul 2026	MSR	500		~~150~~355		~~745~~616		~~250~~330		~~677~~629
$500 warehouse facility	Jul 2026	MSR	500		100		353		—		—
$50 warehouse facility	Nov 2025	MSR	50		25		85		25		80
$50 warehouse facility	Nov 2025	MSR	50		10		78		29		67
MSR facilities principal amount					3,300		10,452		3,650		10,788
MSR facilities principal amount					2,035		9,101		2,814		6,958
Advance, warehouse and MSR facilities principal amount					6,329		$	13,843	6,515		$	14,016
Advance, warehouse and MSR facilities principal amount					4,402		$	11,759	4,318		$	8,781
Unamortized debt issuance costs					(16)				(20)
Unamortized debt issuance costs					(23)				(16)
Advance, warehouse and MSR facilities, net					$	6,313			$	6,495
Advance, warehouse and MSR facilities, net					$	4,379			$	4,302

(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)~~The~~Total capacity for this ~~advance~~ facility ~~increased~~is ~~from~~ $~~300~~200, toof which $~~500~~50 ~~during~~is ~~the~~a ~~three~~sublimit ~~months~~for ~~ended~~advance ~~September 30, 2024~~financing.

(3)~~This~~The capacity for this facility ~~was~~is ~~terminated~~$1,200, inof ~~July~~which ~~2024~~$950 is a sublimit for MSR financing.

~~(4)Total capacity for this facility is $100, of which $30 is a sublimit for advance financing.~~16

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

(6)The capacity for this warehouse facility increased from $350 to $600 in October 2024.

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(4)The ~~weighted~~capacity ~~average interest rate~~ for ~~advance~~this ~~facilities~~warehouse ~~was~~facility ~~7.4%~~increased ~~and~~from ~~7.8%~~$750 ~~for~~to ~~the three months ended September 30~~$1,000 ~~2024~~during ~~and 2023, respectively, and 7.6% for~~ the ~~nine months ended September 30, 2024 and 2023. The weighted average interest rate for warehouse and MSR facilities was 7.6% and 7.8% for the~~ three months ended ~~September~~March 3031, ~~2024 and 2023, respectively, and 7~~2025.~~8% and 7.4% for the nine months ended September 30, 2024 and 2023, respectively.~~

(5)This facility was terminated in April 2025.

(6)The capacity for this MSR facility increased from $750 to $950 during the three months ended March 31, 2025.

The weighted average interest rate for advance facilities was 6.9% and 7.8% for the three months ended March 31, 2025 and 2024, respectively. The weighted average interest rate for warehouse and MSR facilities was 6.6% and 7.9% for the three months ended March 31, 2025 and 2024, respectively.

Unsecured Senior Notes

Unsecured senior notes consist of the following:

Unsecured Senior Notes	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~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		34,~~200~~950
Purchase discount and unamortized debt issuance costs	(6554)		(4959)
Unsecured senior notes, net	$	4,~~885~~896	$	34,~~151~~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 notes were repurchased or redeemed during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024.

As of ~~September~~March 3031, ~~2024~~2025, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows:

Year Ending December 31,	Amount
2024 through 2025	$	—
2025	$	—
2026	500
2027	600
2028	850
Thereafter	3,000
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 ~~September~~March 3031, ~~2024~~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:

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Consolidated Transactions with VIEs	TransfersAccounted for asSecuredBorrowings		TransfersAccounted for asSecuredBorrowings
Assets
Restricted cash	$	~~155~~134	$	~~111~~188
Advances and other receivables, net	~~734~~860		~~495~~1,020
Total assets	$	~~889~~994	$	~~606~~1,208
Liabilities
Advance facilities, net(1)	$	~~573~~680	$	~~382~~824
MSR facilities, net	464		—
Warehouse facilities, net(1)	478		—
Payables and other liabilities	2		1
MSR facilities, net(1)	470		469
Total liabilities	$	1,039	$	383
Payables and other liabilities	3		3
Total liabilities	$	1,631	$	1,296

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

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

Unconsolidated Securitization Trusts	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
Total collateral balances - UPB	$	~~819~~778	$	~~881~~798
Total certificate balances	$	~~793~~752	$	~~849~~773

The Company has not retained any variable interests in the unconsolidated securitization trusts that were outstanding as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024. Therefore, it does not have a significant ~~maximum~~ exposure to loss related to these unconsolidated VIEs.

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

Principal Amount of Transferred Loans 60 Days or More Past Due			~~September~~March 3031, ~~2024~~2025						December 31, ~~2023~~2024
Unconsolidated securitization trusts			$	8177					$	9181

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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 ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Computation of Earnings Per Share

~~2024~~2025

~~2023~~2024

~~2024~~

~~2023~~

Net income

8088

~~275~~181

~~465~~

~~454~~

Weighted average shares of common stock outstanding (in thousands):

Basic

6463,~~272~~712

6664,~~424~~629

~~64,503~~

~~67,719~~

Dilutive effect of stock awards

1,~~240~~324

1,~~244~~638

~~1,356~~

~~1,319~~

Diluted

65,~~512~~036

6766,~~668~~267

~~65,859~~

~~69,038~~

Earnings per common share

Basic

1.2438

42.1480

~~7.21~~

~~6.70~~

Diluted

1.2235

42.0673

~~7.06~~

~~6.58~~

12. Income Taxes

The effective tax rate for operations was 297.10% ~~and 25.2%,~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, and 21.79% ~~and 22.3%~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2023~~2024, respectively. The effective tax rates differed from the statutory federal rate of 21% primarily due to state ~~income~~tax ~~taxes~~benefits and ~~nondeductible~~excess ~~executive~~tax benefits from share-based compensation.

The change in effective tax rate during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024, is primarily attributable to the ~~impact of bargain purchase gain related to Home Point Acquisition, and~~ quarterly discrete tax items relative to income before taxes for the respective period, including the excess tax benefit from share-based compensation and state tax benefits.

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, ~~2023~~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:

	September 30, 2024
	March 31, 2025
			Recurring Fair Value Measurements
Fair Value - Recurring Basis	Total Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage servicing rights	$	1011,~~035~~345	$	—	$	—	$	1011,~~035~~345
Mortgage loans held for sale	12,~~962~~603		—		12,~~897~~523		6580
Equity investments	95		1—		—		85
Derivative financial instruments
IRLCs	41		—		—		41
Treasury futures	54		—		54		—
LPCs	3		—		—		3
IRLCs	38		—		—		38
Forward MBS trades	715		—		715		—
Treasury Futures	16		—		16		—
LPCs	8		—		—		8
Liabilities
Derivative financial instruments
LPCs	3		—		—		3
Forward MBS trades	16		—		16		—
Forward MBS trades	44		—		44		—
LPCs	2		—		—		2
Excess spread financing	403		—		—		403
Treasury futures	1		—		1		—
Mortgage servicing rights financing	40		—		—		40
Excess spread financing	366		—		—		366
Mortgage servicing rights financing	32		—		—		32

	December 31, 2023
	December 31, 2024
			Recurring Fair Value Measurements
Fair Value - Recurring Basis	Total Fair Value		Level 1		Level 2		Level 3
Assets
Mortgage servicing rights	$	911,~~090~~736	$	—	$	—	$	911,~~090~~736
Mortgage loans held for sale	~~927~~2,211		—		~~846~~2,151		8160
Equity investments	9		1		—		8
Derivative financial instruments
Treasury futures	113		—		113		—
IRLCs	22		—		—		22
IRLCs	21		—		—		21
Forward MBS trades	18		—		18		—
Forward MBS trades	22		—		22		—
LPCs	6		—		—		6
LPCs	3		—		—		3
Liabilities
Derivative financial instruments
Forward MBS trades	995		—		995		—
Excess spread financing	437		—		—		437
Treasury futures	59		—		59		—
Mortgage servicing rights financing	29		—		—		29
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:

	Nine Months Ended September 30, 2024
	Three Months Ended March 31, 2025
	Assets								Liabilities
Fair Value - Level 3 Assets and Liabilities	Mortgage servicing rights		Mortgage loans held for sale		~~Equity investments~~IRLCs		~~IRLCs~~LPCs		Excess spread financing		Mortgage servicing rights financing
Balance - beginning of period	$	911,~~090~~736	$	8160	$	822	$	216	$	~~437~~386	$	2932
Changes in fair value included in earnings	(~~694~~505)		2(4)		—16		202		15(5)		11—
Purchases/additions(1)	~~1,640~~106		9552		—		—		—		—
Issuances	~~267~~164		—		—		—		—		—
Sales/dispositions(2)	(~~297~~164)		(~~110~~27)		—		—		—		—
Repayments	—		(31)		—		—		—		—
Settlements	—		—		—		—		(4915)		—
Other changes	298		—		—		—		—		—
Balance - end of period	$	1011,~~035~~345	$	6580	$	838	$	418	$	~~403~~366	$	4032

	Nine Months Ended September 30, 2023
	Three Months Ended March 31, 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	$	69,~~654~~090	$	7481	$	458	$	2221	$	~~509~~437	$	1929
Changes in fair value included in earnings	~~(140)~~10		3(2)		~~(37)~~—		—6		~~(4)~~—		26
Purchases/additions(1)	~~2,305~~663		~~130~~28		—		—		—		—
Issuances	~~219~~64		—		—		—		—		—
Sales/dispositions(2)	(~~555~~42)		(~~105~~22)		—		—		—		—
Repayments	—		(32)		—		—		~~(5)~~—		—
Settlements	—		—		—		—		(5417)		—
Other changes	2111		2(1)		—		—		—		—
Balance - end of period	$	89,~~504~~796	$	~~101~~82	$	8	$	2227	$	~~446~~420	$	2135

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

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

The Company had immaterial ~~LPCs~~equity ~~assets~~investments and LPCs liabilities as of ~~September~~March 3031, ~~2024~~2025 and ~~2023~~immaterial LPCs assets and liabilities as of March 31, 2024. No transfers were made in or out of Level 3 fair value assets and liabilities for the Company during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~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.

	September 30, 2024									December 31, 2023
	March 31, 2025									December 31, 2024
	Range						Weighted Average			Range						Weighted Average
Level 3 Inputs	Min			Max						Min			Max
MSRs(1)
Option adjusted spread(2)	67.81		%	12.32		%	7.69		%	6.9		%	12.32		%	87.06		%
Prepayment speed	67.85		%	10.21		%	98.04		%	6.8		%	9.3		%	7.57		%
Cost to service per loan(3)	$	4745		$	~~119~~115		$	6259		$	5645		$	~~160~~114		$	8058
Average life(4)							7.34 years									7.98 years
Mortgage loans held for sale
Market pricing	45.0		%	~~103~~97.59		%	7980.17		%	45.0		%	~~103~~97.43		%	8180.1		%
IRLCs
Value of servicing (reflected as a percentage of loan commitment)	—		%	3.4		%	1.65		%	~~1.1~~—		%	3.56		%	1.97		%
Excess spread financing(1)
Option adjusted spread(2)	67.91		%	12.3		%	8.79		%	76.09		%	12.3		%	8.87		%
Prepayment speed	7.38		%	8.40		%	87.09		%	7.72		%	97.16		%	87.45		%
Average life(4)							6.75 years									6.78 years
Mortgage servicing rights financing
Advance financing and counterparty fee rates	7.03		%	98.06		%	8.3		%	67.62		%	9.20		%	78.65		%
Annual advance recovery rates	1516.40		%	16.9		%	16.47		%	1214.29		%	1416.8		%	1316.0		%

(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:

September 30, 2024

March 31, 2025

CarryingAmount

Fair Value

Financial Instruments

Level 1

Level 2

Level 3

Financial assets

Cash and cash equivalents

~~733~~784

—

Restricted cash

~~186~~166

—

Advances and other receivables, net

~~940~~1,061

—

~~940~~1,061

Loans subject to repurchase from Ginnie Mae

~~971~~1,115

—

~~971~~1,115

—

Financial liabilities

Unsecured senior notes, net

4,~~885~~896

—

4,~~963~~980

—

Advance, warehouse and MSR facilities, net

46,~~379~~313

—

46,~~402~~329

—

Liability for loans subject to repurchase from Ginnie Mae

~~971~~1,115

—

~~971~~1,115

—

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December 31, 2023

December 31, 2024

CarryingAmount

Fair Value

Financial Instruments

Level 1

Level 2

Level 3

Financial assets

Cash and cash equivalents

~~571~~753

—

Restricted cash

~~169~~220

—

Advances and other receivables, net

~~996~~1,345

—

~~996~~1,345

Loans subject to repurchase from Ginnie Mae

~~966~~1,176

—

~~966~~1,176

—

Financial liabilities

Unsecured senior notes, net

34,~~151~~891

—

34,~~056~~862

—

Advance, warehouse and MSR facilities, net

46,~~302~~495

—

46,~~318~~515

—

Liability for loans subject to repurchase from Ginnie Mae

~~966~~1,176

—

~~966~~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 ~~which was acquired during the third quarter of 2023 in connection with the Roosevelt Transaction~~. As of ~~September~~March 3031, ~~2024~~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 $1510 and $3412 during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024,~~2025 ~~respectively, $8~~ and ~~$29~~2024 ~~during the three and nine months ended September 30, 2023,~~ 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 $12 to $39 in excess of the accrued liability (if any) related to those matters as of ~~September~~March 3031, ~~2024~~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 ~~September~~March 3031, ~~2024~~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 $7457 and $7962 as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~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 ~~borrowers~~customers whereby the Company commits to lend a certain loan amount under specific terms and interest rates to the ~~borrower~~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 ~~the~~used ~~Company uses~~ to evaluate operating performance and are based upon the Company’s organizational structure, which focuses primarily on the services offered. ~~Our~~The Company’s operations are primarily conducted through two segments: Servicing and Originations. A brief description of ~~these~~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 ~~borrower~~customer payments, investor reporting, customer service, modifying loans where appropriate to help ~~borrowers~~customers stay current, and when necessary performing collections, foreclosures, and the sale of REO. In the ~~third~~fourth quarter of ~~2023~~2024, the Company expanded its ~~special~~ servicing and subservicing ~~offerings~~portfolio with the acquisition and subsequent integration of ~~Rushmore~~the asmortgage aoperations ~~brand~~from ~~within~~ the ~~Servicing~~Flagstar ~~segment~~transaction.

Originations: This segment originates residential mortgage loans through ~~the~~its direct-to-consumer channel, which provides refinance options for ~~the~~its ~~Company’s~~ existing customers, and through ~~the~~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 ~~following~~ tables ~~present~~below ~~financial~~summarize ~~information~~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 September 30, 2024
	Three Months Ended March 31, 2025
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	~~246~~397	$	2426	$	1817	$	~~288~~440
Net gain on mortgage loans held for sale	106		~~126~~114		—		~~136~~120
Total revenues	~~256~~403		~~150~~140		1817		~~424~~560
Total expenses	180		83		72		335
Expenses
Interest income	201		25		1		227
Salaries, wages and benefits	90		52		51		193
Interest expense	(100)		(23)		(76)		(199)
General and administrative	150		43		44		237
Other expenses, net	—		—		(5)		(5)
Total expenses	240		95		95		430
Total other income (expenses), net	101		2		(80)		23
Interest income	157		29		3		189
Income (loss) before income tax expense (benefit)	$	177	$	69	$	(134)	$	112
Interest expense	(106)		(26)		(81)		(213)
Depreciation and amortization for property and equipment and intangible assets	$	2	$	—	$	7	$	9
Other expenses, net	—		(3)		(8)		(11)
Total assets	$	12,462	$	2,001	$	1,723	$	16,186
Total other income (expenses), net	51		—		(86)		(35)
Income (loss) before income tax expense (benefit)	$	214	$	45	$	(164)	$	95
Depreciation and amortization for property and equipment and intangible assets	$	14	$	2	$	2	$	18
Total assets	$	14,288	$	2,480	$	1,678	$	18,446

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	Three Months Ended September 30, 2023
	Three Months Ended March 31, 2024
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	~~392~~440	$	1816	$	22	$	~~432~~478
Net gain on mortgage loans held for sale	7210		7076		—		~~142~~86
Total revenues	~~464~~450		8892		22		~~574~~564
Total expenses	172		58		71		301
Expenses
Interest income	157		10		—		167
Salaries, wages and benefits	85		34		40		159
Interest expense	(88)		(11)		(47)		(146)
General and administrative	100		28		30		158
Other income, net	—		—		58		58
Total expenses	185		62		70		317
Total other income (expenses), net	69		(1)		11		79
Interest income	146		12		—		158
Income (loss) before income tax expense (benefit)	$	361	$	29	$	(38)	$	352
Interest expense	(98)		(10)		(62)		(170)
Depreciation and amortization for property and equipment and intangible assets	$	4	$	2	$	4	$	10
Other expense, net	—		—		(3)		(3)
Total assets	$	10,916	$	868	$	1,643	$	13,427
Total other income (expenses), net	48		2		(65)		(15)
Income (loss) before income tax expense (benefit)	$	313	$	32	$	(113)	$	232
Depreciation and amortization for property and equipment and intangible assets	$	3	$	1	$	4	$	8
Total assets	$	12,187	$	973	$	1,615	$	14,775

	Nine Months Ended September 30, 2024
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	1,132	$	59	$	60	$	1,251
Net gain on mortgage loans held for sale	30		290		—		320
Total revenues	1,162		349		60		1,571
Total expenses	536		214		202		952
Interest income	521		52		1		574
Interest expense	(303)		(48)		(205)		(556)
Other expenses, net	—		—		(16)		(16)
Total other income (expenses), net	218		4		(220)		2
Income (loss) before income tax expense (benefit)	$	844	$	139	$	(362)	$	621
Depreciation and amortization for property and equipment and intangible assets	$	7	$	2	$	16	$	25
Total assets	$	12,462	$	2,001	$	1,723	$	16,186

	Nine Months Ended September 30, 2023
Financial Information by Segment	Servicing		Originations		Corporate/Other		Consolidated
Revenues
Service related, net	$	988	$	45	$	62	$	1,095
Net gain on mortgage loans held for sale	75		220		—		295
Total revenues	1,063		265		62		1,390
Total expenses	484		173		183		840
Interest income	343		26		—		369
Interest expense	(224)		(28)		(126)		(378)
Other income, net	—		—		44		44
Total other income (expenses), net	119		(2)		(82)		35
Income (loss) before income tax expense (benefit)	$	698	$	90	$	(203)	$	585
Depreciation and amortization for property and equipment and intangible assets	$	9	$	6	$	13	$	28
Total assets	$	10,916	$	868	$	1,643	$	13,427

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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 ~~use~~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; ~~and~~

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

~~All of these factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond~~ •our ~~control.~~ability ~~New factors emerge from time~~ to ~~time,~~complete ~~and it is not possible for our management to predict all such factors or to assess~~ the ~~effect~~merger ofwith ~~each~~Rocket ~~such new factor on our business. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable~~Companies, ~~any of the assumptions could be inaccurate, and any of these statements included herein may prove to be inaccurate~~Inc. 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, 2023 for further information on these and other risk factors affecting us.

29All 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, ~~2023~~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 athe ~~leading~~country’s largest residential mortgage servicer and a major originator of residential mortgage loans. Our ~~purpose~~mission is to keep the dream of homeownership alive, and we do this ~~as a servicer~~ by helping ~~mortgage borrowers (~~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 $1.25 trillion as of ~~September~~March 3031, ~~2024~~2025. We believe this track record reflects our strong operating capabilities, strong loss mitigation skills, a commitment to compliance, a customer-centric culture, a demonstrated ability to retain customers, growing origination capabilities, and significant investment in technology.

Our strategy is to position the Company for 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;

•~~Sustain~~Grow ~~industry leading refinance recapture rates and grow~~ our ~~purchase~~servicing ~~recapture~~portfolio ~~rate~~by toacquiring anew ~~target~~customers ofand atretaining ~~least~~existing ~~25%~~customers;

•~~Delight~~Sustain ~~our~~industry ~~customers~~leading ~~and~~refinance ~~keep~~recapture ~~Mr.~~rates ~~Cooper~~and agrow ~~great place for~~ our ~~team~~purchase ~~members~~recapture ~~to work~~rate;

•~~Reinvent~~Keep ~~the~~Mr. ~~customer~~Cooper ~~experience~~a bygreat ~~acting~~place asfor ~~the~~our ~~customer’s~~team ~~advocate~~members ~~and by harnessing technology~~ to ~~deliver digital solutions that are personalized and friction-less~~work;

•~~Use~~Sustain ~~our~~the ~~patented~~talent ~~Pyro~~of ~~mortgage-centric~~our AIpeople ~~platform~~and ~~to transform mortgage servicing for~~ the ~~benefit~~culture of our ~~customers, clients, team members, and investors~~organization;

•~~Sustain~~Delight our customers and reinvent the ~~talent~~customer ofexperience ~~our~~by ~~people~~acting ~~and~~as the ~~culture~~customer’s ofadvocate ~~our~~and ~~organization;~~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.

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Anticipated Trends

InWe ~~the~~expect ~~third~~our ~~quarter~~bulk ofpipeline ~~2024,~~to ~~our~~grow ~~Servicing~~at ~~segment~~a ~~generated~~moderate ~~income~~pace, ~~before~~and ~~income~~we ~~tax~~are ~~expense~~continuing ofto ~~$177,~~analyze and ~~our~~bid ~~servicing~~selectively ~~portfolio~~on ~~grew~~pools tothat ~~$1.2~~meet ~~trillion,~~our ~~which~~yield ~~increased~~targets. ~~32% year~~Cash-~~over-year.~~outs ~~Under~~and ~~the~~second ~~current~~liens ~~interest~~are ~~rate~~turning ~~environment,~~out ~~which~~to ~~included~~be ~~the~~a ~~Federal~~very ~~Reserve~~popular ~~cutting~~method ~~interest~~for ~~rates~~customers ~~during~~to ~~the~~tap ~~third quarter,~~ the ~~Company~~equity ~~expects~~in ~~downward~~their ~~pressure~~homes. onWe ~~servicing~~expect ~~income~~momentum in the ~~fourth~~direct-to-consumer ~~quarter~~channel, as ~~prepayment~~home ~~speeds~~equity loans and ~~amortization~~cashout refinances volume continue to ~~rise.~~grow, Inwhich ~~addition,~~we ~~the~~view ~~Company~~as ~~expects~~a ~~lower~~massive ~~net~~long-term ~~interest~~growth ~~income~~opportunity ~~due~~regardless toof the ~~aforementioned~~ interest rate ~~cuts~~environment.

InOn ~~the~~March ~~third quarter of 2024~~31, ~~our Originations segment significantly outperformed our projections with income before income tax expense of $69 driven by increased funded volume~~2025, ~~which~~Mr. ~~was~~Cooper ~~attributable~~Group toInc. ~~both our direct-to-consumer~~ and ~~correspondent~~Rocket ~~channels. Total funded volume during the third quarter was $6~~Companies,~~835,~~ ~~which~~Inc. ~~was~~announced upentry ~~80%~~into ~~from~~a ~~the~~definitive ~~prior~~agreement ~~quarter.~~for WeRocket ~~expect our Originations segment~~ to ~~operate~~acquire atall ~~normalized levels~~ of ~~profitability in~~ the ~~fourth~~outstanding ~~quarter~~shares ~~as a result~~ of anMr. ~~uptick~~Cooper in ~~mortgage~~an ~~rates~~all-stock ~~since~~transaction ~~the~~for ~~low~~$9.4 ~~point~~billion in ~~September~~equity ~~2024. We expect to continue growing our direct-to-consumer channel~~value, ~~which~~based ~~has~~on ~~benefited~~an ~~from~~11.0x ~~the~~exchange ~~growth in our servicing portfolio~~ratio. WeThe ~~also~~transaction ~~expect~~is expected to ~~increase~~close ~~volume~~ in ~~our~~the ~~correspondent~~fourth ~~channel~~quarter asof a2025, ~~result~~subject ofto aapproval ~~number~~ of ~~initiatives~~Mr. ~~coming~~Cooper ~~together,~~shareholders ~~including~~and the ~~leveling~~satisfaction up of ~~our~~other ~~correspondent~~closing ~~platform. Overall~~conditions, ~~the~~including ~~Company~~customary ~~remains~~regulatory ~~well-situated for lower interest rates~~approvals.

The Company is finalizing the acquisition of certain mortgage operation assets of Flagstar, which is expected to close in the fourth quarter of 2024. The Flagstar acquisition will increase our customer base to over 6 million customers.28

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

Results of Operations


Table 1. Consolidated Operations

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023		Change		2024		2023		Change
	2025		2024		Change
Revenues - operational(1)	$	~~549~~641	$	~~511~~521	$	38120	$	~~1,584~~	$	~~1,325~~	$	~~259~~
Revenues - mark-to-market	(~~125~~81)		6343		(~~188~~124)		~~(13)~~		65		~~(78)~~
Total revenues	~~424~~560		~~574~~564		(~~150~~4)		~~1,571~~		~~1,390~~		~~181~~
Total expenses	~~335~~430		~~301~~317		34113		~~952~~		~~840~~		~~112~~
Total other income, net	23		79		(56)		2		35		(33)
Total other expense, net	(35)		(15)		(20)
Income before income tax expense	~~112~~95		~~352~~232		(~~240~~137)		~~621~~		~~585~~		36
Less: Income tax expense	327		7751		(4544)		~~156~~		~~131~~		25
Net income	$	8088	$	~~275~~181	$	(~~195~~93)	$	~~465~~	$	~~454~~	$	11

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

~~Revenues~~Total revenues decreased slightly in the three months ended ~~September~~March 3031, ~~2024~~2025 primarily due to negative MSR MTM in 2025 driven by a decline in mortgage rates, ~~whereas~~compared into ~~2023,~~ a positive MSR MTM ~~was~~in 2024 driven by an increase in mortgage rates. ~~Revenues~~The ~~increased~~MSR inMTM ~~the~~changes ~~nine~~were ~~months~~largely ~~ended~~offset ~~September~~by ~~30,~~the ~~2024 primarily due to an~~ increase in operational revenues driven by a larger servicing portfolio. and increased volume in originations.

Total expenses increased in ~~the~~ three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024, primarily due to an increase in general and administrative costs driven by growth in our MSR servicing portfolio and higher originations volume. Total other ~~income~~expense, net ~~decreased~~increased in the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024 primarily due to ~~gains recorded in 2023 in connection with acquisitions, and~~ higher interest expense from ~~MSR~~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 ~~decrease~~increase in total other ~~income~~expense, net 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 March 31, 2025, was 7.0% as compared to 21.9% in 2024. The change in effective tax rate is primarily attributable to a reduction in pre-tax book income as well as to the impact of quarterly discrete tax items relative to income before taxes for the respective period, including the excess tax benefit from share-based compensation and state tax benefits.

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The effective tax rate during the three months ended September 30, 2024, was 29.1% as compared to 21.7% in 2023, and the effective tax rate during the nine months ended September 30, 2024 was 25.2% as compared to 22.3% in 2023. The change in effective tax rate is primarily attributable to bargain purchase gain related to the Home Point Acquisition, and the impact of quarterly discrete tax items relative to income before taxes for the respective period, including the excess tax benefit from share-based compensation.

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 ~~borrower~~customer payments, investor reporting, customer service, modifying loans where appropriate to help ~~borrowers~~customers stay current, and when necessary performing collections, foreclosures, and the sale of REO. In the ~~third~~fourth quarter of ~~2023~~2024, ~~the~~we ~~Company~~ expanded ~~its~~our ~~special~~ servicing and subservicing ~~offerings~~portfolio with the acquisition and subsequent integration of ~~Rushmore~~the asmortgage aoperations ~~brand~~from ~~within~~ the ~~Servicing~~Flagstar ~~segment~~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.

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

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Servicing Segment

The Servicing segment’s strategy is to generate income by growing the portfolio and maximizing the servicing margin. We believe several competitive strengths have been critical to our long-term growth as a servicer and subservicer, including our low-cost platform that creates operating leverage, our skill in mitigating losses for investors and clients, our commitment to strong customer service, industry leading compliance management, our history of successfully boarding new loans, and the ability to retain existing customers by offering attractive 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/~~February/April 2024 & January 2025

~~May~~October ~~2023~~& December 2024

January 2024

Residential

RPS2

SQ2-

Above Average

Master Servicer

~~RMS2+~~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 September 30,
	Three Months Ended March 31,
	2024				2023				Change
	2025				2024				Change
	Amt			bps(1)	Amt			bps(1)	Amt			bps
Revenues
Operational	$	~~616~~707		2019	$	~~561~~577		2522	$	55130		(53)
Amortization, net of accretion	(~~235~~223)			(76)	(~~160~~170)			(7)	(7553)			—1
Mark-to-market adjustments - Servicing	(~~125~~81)			(42)	6343			32	(~~188~~124)			(74)
Total revenues	~~256~~403			911	~~464~~450			2117	(~~208~~47)			(126)
Expenses
Salaries, wages and benefits	8690			32	8785			43	~~(1)~~5			(1)
General and administrative
Servicing support fees	1935			1	2928			1	~~(10)~~7			—
Corporate and other general and administrative expenses	5864			2	5262			3	62			(1)
Foreclosure and other liquidation related expenses, net	1537			—1	—7			—	1530			—1
Depreciation and amortization	214			—	43			—	~~(2)~~11			—
Total general and administrative expenses	94150			34	85100			4	950			~~(1)~~—
Total expenses	~~180~~240			6	~~172~~185			87	855			(21)
Other income (expense)
Interest income	~~201~~157			64	~~157~~146			76	4411			(12)
Advance interest expense	(16)			—	(13)			(1)	(3)			1
Interest expense
MSR and other interest expense	(84)			(3)	(75)			(3)	(9)			—
Advance interest expense	(15)			—	(16)			(1)	1			1
Interest expense	(100)			(3)	(88)			(4)	(12)			1
MSR and other interest expense	(91)			(3)	(82)			(3)	(9)			—
Total other income, net	101			3	69			3	32			—
Total interest expense	(106)			(3)	(98)			(4)	(8)			1
Income before income tax expense	$	177		6	$	361		16	$	(184)		(10)
Total other income, net	51			1	48			2	3			(1)
Weighted average cost - advance and MSR facilities	8.0		%		8.2		%		(0.2)		%
Income before income tax expense	$	214		6	$	313		12	$	(99)		(6)
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 34.1 Servicing - Revenues

	Three Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			Change
	2025			2024			Change
	Amt		bps(1)	Amt		bps(1)	Amt		bps
MSR Operational Revenue
Base servicing fees	$	~~487~~533	1614	$	~~382~~449	17	$	~~105~~84	(13)
Modification fees	710		—	67		—	13		—
Late payment fees	2225		1	1720		—1	5		1—
Other ancillary revenues	2229		1	8220		41	~~(60)~~9		~~(3)~~—
Total MSR operational revenue	~~538~~597		1816	~~487~~496		2119	51101		(3)
Subservicing-related revenue	95128		3	9298		43	330		~~(1)~~—
Total servicing fee revenue	~~633~~725		2119	~~579~~594		2522	54131		(43)
MSR financing liability costs	(710)		—	(78)		—	—(2)		—
Excess spread payments and portfolio runoff	(108)		~~(1)~~—	(119)		—	1		~~(1)~~—
Total operational revenue	~~616~~707		2019	~~561~~577		2522	55130		(53)
Amortization, Net of Accretion
MSR amortization	(~~245~~231)		(86)	(~~171~~179)		(7)	(7452)		(1)
Excess spread accretion	108		1—	119		—	(1)		1—
Total amortization, net of accretion	(~~235~~223)		(76)	(~~160~~170)		(7)	(7553)		—1
Mark-to-Market Adjustments - Servicing
MSR MTM	(~~388~~274)		(137)	~~270~~189		127	(~~658~~463)		(2514)
Gain (loss) on MSR hedging activities	~~289~~209		105	(~~192~~122)		(95)	~~481~~331		1910
Loss on MSR sales	(115)		—	(312)		—	2(3)		—
Reclassifications to reserve provision(2)	(56)		—	(86)		—	3—		—
Excess spread / financing MTM	~~(20)~~5		~~(1)~~—	(46)		—	~~(16)~~11		~~(1)~~—
Total MTM - Servicing	(~~125~~81)		(42)	6343		32	(~~188~~124)		(74)
Total revenues - Servicing	$	~~256~~403	911	$	~~464~~450	2117	$	(~~208~~47)	(126)

(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 - ~~MSR~~Operational ~~operational~~ revenue and MSR amortization increased during the three months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024, primarily due to a larger average MSR UPB portfolio indriven ~~2024~~by servicing portfolio growth.

The change in MSR MTM during the three months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024, was primarily due to a decrease in mortgage rates in ~~2024~~2025 compared to an increase in mortgage rates in ~~2023~~2024. The MSR MTM changes were partially offset by MSR hedging activities during the respective periods.

Subservicing - Subservicing-related revenue ~~remained~~increased ~~consistent~~ during the three months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024, primarily driven by ~~fees~~a ~~related~~larger toaverage asubservicing ~~new~~portfolio ~~client~~due ~~boarding~~to ~~during~~ the ~~first~~subservicing ~~quarter~~portfolio ofobtained ~~2024,~~from ~~offset~~the byasset ~~deboarding~~acquisition ~~of another subservicing client~~ in ~~third~~the fourth quarter of ~~2023~~2024.

Servicing Segment Expenses

Total expenses ~~remained~~increased ~~consistent~~ during the three months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024, primarily due to ~~increased~~expenses ~~expense~~associated aswith a ~~result~~legal ofruling. ~~growth~~In addition, depreciation and amortization expense increased in ~~the~~2025 ~~servicing~~due ~~portfolio,~~to ~~partially~~amortization ~~offset~~recorded byfor ~~cost~~intangible ~~reductions~~assets acquired in the fourth quarter of 2024.

~~Servicing Segment Other Income, net~~32

Total other income, net increased during the three months ended September 30, 2024, as compared to 2023, 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.

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Table 4. Servicing Segment Results of Operations

	Nine Months Ended September 30,
	2024				2023				Change
	Amt			bps(1)	Amt			bps(1)	Amt			bps
Revenues
Operational	$	1,797		21	$	1,410		22	$	387		(1)
Amortization, net of accretion	(622)			(7)	(412)			(7)	(210)			—
Mark-to-market adjustments - Servicing	(13)			—	65			1	(78)			(1)
Total revenues	1,162			14	1,063			16	99			(2)
Expenses
Salaries, wages and benefits	255			3	252			4	3			(1)
General and administrative
Servicing support fees	74			1	66			1	8			—
Corporate and other general and administrative expenses	182			2	138			2	44			—
Foreclosure and other liquidation related expenses, net	18			—	19			—	(1)			—
Depreciation and amortization	7			—	9			—	(2)			—
Total general and administrative expenses	281			3	232			3	49			—
Total expenses	536			6	484			7	52			(1)
Other income (expense)
Interest income	521			6	343			5	178			1
Advance interest expense	(46)			(1)	(41)			—	(5)			(1)
MSR and other interest expense	(257)			(3)	(183)			(3)	(74)			—
Interest expense	(303)			(4)	(224)			(3)	(79)			(1)
Total other income, net	218			2	119			2	99			—
Income before income tax expense	$	844		10	$	698		11	$	146		(1)
Weighted average cost - advance and MSR facilities	8.1		%		7.8		%		0.3		%
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

	Nine Months Ended September 30,
	2024			2023			Change
	Amt		bps(1)	Amt		bps(1)	Amt		bps
MSR Operational Revenue
Base servicing fees	$	1,415	16	$	1,054	16	$	361	—
Modification fees	19		—	14		—	5		—
Late payment fees	63		1	49		1	14		—
Other ancillary revenues	62		1	101		2	(39)		(1)
Total MSR operational revenue	1,559		18	1,218		19	341		(1)
Subservicing-related revenue	288		3	246		3	42		—
Total servicing fee revenue	1,847		21	1,464		22	383		(1)
MSR financing liability costs	(22)		—	(22)		—	—		—
Excess spread payments and portfolio runoff	(28)		—	(32)		—	4		—
Total operational revenue	1,797		21	1,410		22	387		(1)
Amortization, Net of Accretion
MSR amortization	(650)		(7)	(444)		(7)	(206)		—
Excess spread accretion	28		—	32		—	(4)		—
Total amortization, net of accretion	(622)		(7)	(412)		(7)	(210)		—
Mark-to-Market Adjustments - Servicing
MSR MTM	(44)		(1)	304		5	(348)		(6)
Gain (loss) on MSR hedging activities	64		1	(244)		(4)	308		5
Gain on MSR sales	10		—	29		—	(19)		—
Reclassifications to reserve provision(2)	(17)		—	(26)		—	9		—
Excess spread / MSR financing MTM	(26)		—	2		—	(28)		—
Total mark-to-market adjustments - Servicing	(13)		—	65		1	(78)		(1)
Total revenues - Servicing	$	1,162	14	$	1,063	16	$	99	(2)

(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 - MSR operational revenue and MSR amortization increased during the nine months ended September 30, 2024, as compared to 2023, primarily due to a larger average MSR portfolio in 2024.

The change in MSR MTM during the nine months ended September 30, 2024, compared to 2023, was primarily due to a decrease in mortgage rates in 2024 compared to an increase in mortgage rates in 2023. The MSR MTM changes were partially offset by MSR hedging activities during the respective periods.

Subservicing - Subservicing fees increased during the nine months ended September 30, 2024, as compared to 2023, primarily driven by a larger average subservicing portfolio due to boarding of a large new subservicing client in the first quarter of 2024.

Servicing Segment Expenses

Total expenses increased during the nine months ended September 30, 2024, as compared to 2023, primarily driven by an increase in corporate and other general and administrative expenses, and servicing support fees. The increase in corporate and other general and administrative expenses was due to higher corporate allocations to the Servicing segment driven by increased headcount attributable to the acquisition of Rushmore in 2023. The increase in servicing support fees was primarily due to a larger average servicing portfolio in 2024.

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Servicing Segment Other Income, net

Total other income, net ~~changed~~increased during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024, primarily attributable to ~~higher interest rates and~~ 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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2024

2023

2024

2023

2025

2024

Average UPB

MSRs

~~679,453~~

~~500,825~~

~~644~~738,~~691~~670

~~449~~607,~~602~~539

Subservicing and other(1)

~~545,261~~

~~396,673~~

~~509~~792,~~719~~138

~~418~~460,~~942~~160

Total average UPB

~~1,224,714~~

~~897,498~~

1,~~154~~530,~~410~~808

~~868~~1,~~544~~067,699

September 30, 2024

September 30, 2023

March 31, 2025

March 31, 2024

UPB

Carrying Amount

bps

UPB

Carrying Amount

bps

MSRs

Agency

~~652~~708,~~901~~803

911,~~686~~012

~~148~~155

~~501~~604,~~315~~112

89,~~193~~463

~~163~~157

Non-agency

2524,~~211~~949

~~349~~333

~~138~~133

2726,~~009~~621

~~311~~333

~~115~~125

Total MSRs

~~678~~733,~~112~~752

1011,~~035~~345

~~148~~155

~~528~~630,~~324~~733

89,~~504~~796

~~161~~155

Subservicing and other(1)

Agency

~~508~~706,~~511~~858

N/A

~~360~~457,~~565~~344

N/A

Non-agency

5273,~~625~~066

N/A

48,~~365~~112

N/A

Total subservicing and other

~~561~~779,~~136~~924

N/A

~~408~~505,~~930~~456

N/A

Total ending balance

1,~~239~~513,~~248~~676

1011,~~035~~345

~~937~~1,~~254~~136,189

89,~~504~~796

MSRs UPB Encumbrance

~~September~~March 3031, ~~2024~~2025

~~September~~March 3031, ~~2023~~2024

MSRs - unencumbered

~~609~~668,~~418~~779

~~451~~558,~~567~~268

MSRs - encumbered(2)

6864,~~694~~973

7672,~~757~~465

MSRs UPB

~~678~~733,~~112~~752

~~528~~630,~~324~~733

(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 September 30, 2024

Three Months Ended September 30, 2023

Three Months Ended March 31, 2025

Three Months Ended March 31, 2024

MSR

Subservicing and Other

Total

MSR

Subservicing and Other

Total

Balance - beginning of period

~~676~~736,~~025~~071

~~529~~819,~~822~~965

1,~~205~~556,~~847~~036

~~459~~587,~~476~~942

~~422~~403,~~522~~778

~~881~~991,~~998~~720

Additions:

Originations

68,~~802~~332

—

68,~~802~~332

32,~~419~~835

—

32,~~419~~835

Acquisitions / Increase in subservicing(1)

167,~~855~~040

508,~~516~~666

6715,~~371~~706

9854,~~563~~203

19112,~~494~~412

~~118~~166,~~057~~615

Deductions:

Dispositions / Decrease in subservicing(2)

(41,~~411~~505)

(434,~~138~~271)

(835,~~549~~776)

(223,~~184~~144)

(262,~~029~~927)

(486,~~213~~071)

Principal reductions and other

(67,~~487~~409)

(45,~~008~~716)

(1013,~~495~~125)

(45,~~469~~412)

(2,~~838~~589)

(78,~~307~~001)

Voluntary reductions(3)

(108,~~244~~498)

(108,~~875~~452)

(2116,~~119~~950)

(65,~~100~~337)

(45,~~017~~038)

(10,~~117~~375)

Involuntary reductions(4)

(~~343~~331)

(~~181~~268)

(~~524~~599)

(~~353~~330)

(~~202~~180)

(~~555~~510)

Net changes in loans serviced by others

~~(85)~~52

—

~~(85)~~52

(2824)

—

(2824)

Balance - end of period

~~678~~733,~~112~~752

~~561~~779,~~136~~924

1,~~239~~513,~~248~~676

~~528~~630,~~324~~733

~~408~~505,~~930~~456

~~937~~1,~~254~~136,189

(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.

Table 6.1 Servicing and Subservicing and Other Portfolio UPB Rollforward

	Nine Months Ended September 30, 2024						Nine Months Ended September 30, 2023
	MSR		Subservicing and Other		Total		MSR		Subservicing and Other		Total
Balance - beginning of period	$	587,942	$	403,778	$	991,720	$	411,382	$	459,053	$	870,435
Additions:
Originations	13,412		—		13,412		9,946		—		9,946
Acquisitions / Increase in subservicing(1)	127,211		204,776		331,987		160,756		89,558		250,314
Deductions:
Dispositions / Decrease in subservicing(2)	(7,716)		(13,513)		(21,229)		(23,789)		(116,362)		(140,151)
Principal reductions and other	(18,079)		(10,108)		(28,187)		(12,740)		(10,116)		(22,856)
Voluntary reductions(3)	(23,537)		(23,229)		(46,766)		(16,057)		(12,592)		(28,649)
Involuntary reductions(4)	(990)		(568)		(1,558)		(1,071)		(611)		(1,682)
Net changes in loans serviced by others	(131)		—		(131)		(103)		—		(103)
Balance - end of period	$	678,112	$	561,136	$	1,239,248	$	528,324	$	408,930	$	937,254

(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

							September 30, 2024			September 30, 2023
	March 31, 2025			March 31, 2024
Loan count	6,450,254			5,116,552			~~5,440,901~~			~~4,288,683~~
Average loan amount(1)	$	234,152		$	221,605		$	~~227,668~~		$	~~218,561~~
Average coupon - agency	4.4		%	4.0		%	~~4.3~~		%	~~3.8~~		%
Average coupon - non-agency	4.9		%	4.9		%	~~4.9~~		%	~~4.9~~		%
60+ delinquent (% of loans)(2)	1.5		%	1.6		%	~~1.5~~		%	~~1.9~~		%
90+ delinquent (% of loans)(2)	1.2		%	1.3		%	~~1.2~~		%	~~1.6~~		%
120+ delinquent (% of loans)(2)	1.0		%	1.2		%	~~1.0~~		%	~~1.5~~		%
	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			2024			2023
	2025			2024
Total prepayment speed (12-month constant prepayment rate)	75.10		%	54.37		%	~~5.9~~		%	~~5.0~~		%

(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~~34

	Three Months Ended September 30,			Nine Months Ended September 30,
	2024	2023	Change	2024	2023	Change
Modifications(1)	6,768	7,127	(359)	21,691	18,315	3,376
Workouts(2)	15,049	14,332	717	47,231	36,348	10,883
Total modifications and workout units	21,817	21,459	358	68,922	54,663	14,259

(1)Modifications consist of agency programs designed to adjust the terms of the loan (e.g., reduced interest rates).

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

Modifications and workouts during the three months ended September 30, 2024 were comparable to 2023. Modifications and workouts increased during the nine months ended September 30, 2024, as compared to 2023, primarily due to the continued expansion of loss mitigation programs offered by FNMA, FHLMC, and FHA, which increased borrower eligibility and resulted in an increase in successful modifications and workouts.

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Table 8. Loan Modifications and Workout Units


	Three Months Ended March 31,
	2025	2024	Change
Modifications(1)	12,603	7,190	5,413
Workouts(2)	22,647	17,270	5,377
Total modifications and workout units	35,250	24,460	10,790

(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 months ended March 31, 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.

Servicing Portfolio and Liabilities

The following table sets forth the activities of MSRs:

Table 9. MSRs - Fair Value Rollforward

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2024

2023

2024

2023

2025

2024

Fair value - beginning of period

1011,~~352~~736

79,~~149~~090

~~9,090~~

~~6,654~~

Additions:

Servicing retained from mortgage loans sold

~~130~~164

8664

~~267~~

~~219~~

Purchases and acquisitions of servicing rights

~~237~~106

~~1,435~~663

~~1,640~~

~~2,305~~

Dispositions:

Sales of servicing assets and excess yield

(60164)

(~~275~~42)

~~(297)~~

~~(555)~~

Changes in fair value:

Due to changes in valuation inputs or assumptions used in the valuation model (MSR MTM):

Agency

(~~414~~272)

~~255~~171

~~(89)~~

~~310~~

Non-agency

26(2)

1518

~~(6)~~

Changes in valuation due to amortization:

Scheduled principal payments

(9186)

(6485)

~~(270)~~

~~(174)~~

Prepayments

Voluntary prepayments

Agency

(~~146~~138)

(9786)

~~(356)~~

~~(245)~~

Non-agency

(3)

(43)

~~(9)~~

Involuntary prepayments

Agency

(54)

(5)

~~(15)~~

Non-agency

—

~~(1)~~—

—

~~(1)~~

Other changes(1)

1011

Fair value - end of period

1011,~~035~~345

89,~~504~~796

~~10,035~~

~~8,504~~

(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 ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024.

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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.

40Excess 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 March 31, 2025 and December 31, 2024.

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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 September 30, 2024 and December 31, 2023.

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

Table 10. Excess Spread Financing - Rollforward

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023		2024		2023
	2025		2024
Fair value - beginning of period	$	~~406~~386	$	~~459~~437	$	~~437~~	$	~~509~~
Additions:
New financings	—		—		—		—
Deductions:
Repayments	—		(1)		—		(5)
Settlements	(15)		(17)
Settlements	(16)		(18)		(49)		(54)
Changes in fair value:
Agency	8(5)		7—		9		~~(1)~~
Non-agency	5		(1)		6		(3)
Fair value - end of period	$	366	$	420
Fair value - end of period	$	403	$	446	$	403	$	446

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 ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, our total originations included loans for approximately 95,~~100~~000 customers with low FICOs (<660), 96,~~000~~400 customers with income below the U.S. median household income, 1512,600 first-time homebuyers, and 32,~~300~~100 veterans. During this time period, we originated approximately 1510,~~700~~300 Ginnie Mae loans, which are designed for first-time homebuyers and low- and moderate-income ~~borrowers~~customers, comprising $52.09 billion in total proceeds. Once these loans are originated, the underserved ~~borrowers~~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 ~~borrower~~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.36

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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 September 30,									Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			Change			2024			2023			Change
	2025			2024			Change
Revenues
Service related, net - Originations(1)	$	2426		$	1816		$	610		$	59		$	45		$	14
Net gain on mortgage loans held for sale
Net gain (loss) on loans originated and sold(2)	—			(8)			8			37			16			21
Net (loss) gain on loans originated and sold(2)	(43)			16			(59)
Capitalized servicing rights(3)	~~126~~157			7860			4897			~~253~~			~~204~~			49
Total net gain on mortgage loans held for sale	~~126~~114			7076			5638			~~290~~			~~220~~			70
Total revenues	~~150~~140			8892			6248			~~349~~			~~265~~			84
Expenses
Salaries, wages and benefits	5052			3734			1318			~~124~~			~~107~~			17
General and administrative
Loan origination expenses	1311			710			61			32			23			9
Corporate and other general administrative expenses	1019			79			310			30			24			6
Marketing and professional service fees	1011			58			53			26			13			13
Depreciation and amortization	—2			21			~~(2)~~1			2			6			~~(4)~~
Total general and administrative	3343			2128			1215			90			66			24
Total expenses	8395			5862			2533			~~214~~			~~173~~			41
Other income (expenses)
Interest income	2529			1012			1517			52			26			26
Interest expense	(2326)			(1110)			(1216)			~~(48)~~			~~(28)~~			~~(20)~~
Total other income (expenses), net	2			(1)			3			4			(2)			6
Other expense	(3)			—			(3)
Income before income tax expense	$	69		$	29		$	40		$	139		$	90		$	49
Total other income (expenses), net	—			2			(2)
Weighted average note rate - mortgage loans held for sale	7.7		%	6.8		%	0.9		%	7.9		%	6.4		%	1.5		%
Income before income tax expense	$	45		$	32		$	13
Weighted average cost of funds - warehouse facilities (excluding facility fees)	6.8		%	6.9		%	(0.1)		%	6.9		%	6.6		%	0.3		%
Weighted average note rate - mortgage loans held for sale	8.0		%	7.9		%	0.1		%
Weighted average cost of funds - warehouse facilities (excluding facility fees)	5.6		%	7.0		%	(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.

4237

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Table 12. Originations - Key Metrics

	Three Months Ended September 30,									Nine Months Ended September 30,
	Three Months Ended March 31,
	2024			2023			Change			2024			2023			Change
	2025			2024			Change
Key Metrics
DTC PTA lock volume(1)	$	2,~~525~~025		$	1,~~578~~476		$	~~947~~549		$	~~5,842~~		$	~~4,627~~		$	~~1,215~~
Correspondent PTA lock volume(1)	46,~~966~~817			1,~~730~~537			35,~~236~~280			~~9,135~~			~~5,545~~			~~3,590~~
Total PTA lock volume	$	78,~~491~~842		$	3,~~308~~013		$	45,~~183~~829		$	~~14,977~~		$	~~10,172~~		$	~~4,805~~
DTC funded volume	$	21,~~251~~857		$	1,~~728~~340		$	~~523~~517		$	~~5,262~~		$	~~4,699~~		$	~~563~~
Correspondent funded volume	46,~~584~~462			1,~~684~~538			24,~~900~~924			~~8,245~~			~~5,274~~			~~2,971~~
Total funded volume(2)	$	68,~~835~~319		$	32,~~412~~878		$	35,~~423~~441		$	~~13,507~~		$	~~9,973~~		$	~~3,534~~
DTC volume of loans sold	$	21,~~133~~690		$	1,~~757~~567		$	~~376~~123		$	~~4,904~~		$	~~4,673~~		$	~~231~~
Correspondent volume of loans sold	46,~~122~~392			1,~~807~~223			25,~~315~~169			~~7,503~~			~~5,270~~			~~2,233~~
Volume of Originations loans sold	$	68,~~255~~082		$	32,~~564~~790		$	25,~~691~~292		$	~~12,407~~		$	~~9,943~~		$	~~2,464~~
Recapture percentage(3)	2219.24%			2423.29%			(24.05)%			~~22.4%~~			~~24.4%~~			~~(2.0)%~~
Refinance recapture percentage(4)	6950.27%			8270.73%			(1319.56)%			~~70.2%~~			~~77.9%~~			~~(7.7)%~~
Purchase as a percentage of funded volume	6971.09%			54.08%			1517.01%			~~64.1%~~			~~55.9%~~			~~8.2%~~
Value of capitalized servicing on retained settlements	~~212~~199 bps			~~225~~232 bps			(1333) bps			~~219 bps~~			~~222 bps~~			~~(3) bps~~
Originations Margin
Revenue	$	~~150~~140		$	8892		$	6248		$	~~349~~		$	~~265~~		$	84
PTA lock volume	$	78,~~491~~842		$	3,~~308~~013		$	45,~~183~~829		$	~~14,977~~		$	~~10,172~~		$	~~4,805~~
Revenue as a percentage of PTA lock volume(5)	21.0058		%	23.6605		%	(01.6647)		%	~~2.33~~		%	~~2.61~~		%	~~(0.28)~~		%
Expenses(6)	$	8195		$	5960		$	2235		$	~~210~~		$	~~175~~		$	35
Funded volume	$	68,~~835~~319		$	32,~~412~~878		$	35,~~423~~441		$	~~13,507~~		$	~~9,973~~		$	~~3,534~~
Expenses as a percentage of funded volume(7)	1.1914		%	12.7308%			(0.5494)		%	~~1.55~~		%	~~1.75%~~			~~(0.20)~~		%
Originations Margin	0.8144		%	0.9397		%	(0.1253)		%	~~0.78~~		%	~~0.86~~		%	~~(0.08)~~		%

(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 ~~borrower~~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 ~~borrower~~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 nine~~ months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024, primarily driven by higher direct-to-consumer refinance volumes and increases in pull-through adjusted lock volumes, and funded volumes ~~and volumes of originations loans sold~~ in ~~both DTC and~~ correspondent channels ~~as a result of declining interest rates in 2024~~.

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Originations Segment Expenses

Total expenses increased during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~ 2025, as compared to ~~2023~~2024, primarily due to an increase in salaries, wages and benefits expense, and ~~marketing~~corporate and ~~professional~~other ~~service~~general ~~fees~~administrative expenses. The increase in salaries, wages and benefits expense in ~~2024~~2025 was primarily driven by variable compensation attributable to higher originations funding volume. ~~Marketing~~Corporate and ~~professional~~other ~~service~~general ~~fees~~administrative expenses increased ~~in 2024~~ primarily due to anthe ~~increase~~Flagstar third-party origination operations, which were acquired in ~~marketing~~the ~~costs~~fourth quarter of 2024, being fully operational in 2025.

Originations Segment Other Income (Expenses), 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 nine~~ months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024, assince ~~both~~ interest income and interest expense increased ~~due~~commensurately toand ~~higher~~largely ~~originations volume driven by declining interest rates in 2024~~offset.

Originations Margin

The Originations Margin for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 decreased, as compared to ~~2023~~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 3423% and 4849% for the three months ended ~~September~~March 3031, ~~2024~~2025, and ~~2023, and 39% and 45% for the nine months ended September 30,~~ 2024 ~~and 2023~~, 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 September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023		Change		2024		2023		Change
	2025		2024		Change
Corporate/Other - Operations
Total revenues	$	1817	$	22	$	(45)	$	60	$	62	$	~~(2)~~
Total expenses	7295		7170		125		~~202~~		~~183~~		19
Interest income	13		—		13		1		—		1
Interest expense	7681		4762		2919		~~205~~		~~126~~		79
Other (expense) income, net	(5)		58		(63)		(16)		44		(60)
Other expense, net	(8)		(3)		(5)
Key Metrics
Average exchange inventory under management	25,~~816~~282		2728,~~384~~371		(13,~~568~~089)		~~26,691~~		~~26,658~~		33

Total revenues ~~for~~decreased during the three ~~and nine~~ months ended ~~September~~March 3031, 2025, as compared to 2024, ~~were~~primarily ~~comparable~~due ~~with~~to ~~2023~~a decline in Xome revenues as the average exchange volume decreased.

Total expenses ~~remained consistent for the three months ended September 30, 2024 as compared to 2023. Total expenses~~ increased during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, as compared to ~~2023~~2024, primarily ~~due~~attributable to anthe ~~increase~~transition incosts ~~salaries, wages and benefits~~ associated with ~~increased~~Flagstar ~~headcount driven by the Roosevelt~~ Transaction, ~~which~~and ~~was completed in the third quarter of 2023,~~ higher executive compensation, ~~an increase~~ in ~~operating expenses related to Roosevelt and higher Xome exchange operating expenses in 2024~~2025.

44Interest expense increased during the three months ended March 31, 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 increased in the three months ended March 31, 2025, as compared to 2024 primarily due to an impairment charge related to an equity investment in 2025.

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Interest expense increased during the three and nine months ended September 30, 2024, as compared to 2023, due to the unsecured senior note assumed from the Home Point Acquisition in the third quarter of 2023, and 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) income, net decreased in the three and nine months ended September 30, 2024, as compared to 2023 primarily due to gains recorded in 2023 in connection with acquisitions.

Liquidity and Capital Resources

We measure liquidity by unrestricted cash and availability of ~~collateralized~~borrowings ~~borrowing capacity~~ on our ~~MSR~~advance, warehouse and ~~other~~MSR ~~debt~~ facilities. We held cash and cash equivalents on hand of $~~733~~784 as of ~~September~~March 3031, ~~2024~~2025 compared to $~~571~~753 as of December 31, ~~2023~~2024. We have sufficient borrowing capacity to support our operations. As of ~~September~~March 3031, ~~2024~~2025, total available borrowing capacity for advance, warehouse, and MSR facilities was $1214,~~901~~701, of which $3,~~323~~102 was collateralized and immediately available to draw. On February 1, 2024, we completed an offering of $1,000 7.125% unsecured senior notes due 2032, and on August 1, 2024, we completed an offering of $750 6.500% unsecured senior notes due 2029. We repaid a portion of the amounts outstanding on our MSR facilities with the net proceeds of the offerings. During the three months ended ~~September~~March 3031, ~~2024~~2025, we increased capacity on our MSR and warehouse facilities by $~~550~~200 and $250, 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, ~~2023~~2024.

Cash Flows

The table below presents cash flows information:

Table 14. Cash Flows

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023		Change
	2025		2024		Change
Net cash attributable to:
Operating activities	$	79227	$	~~772~~28	$	~~(693)~~199
Investing activities	(~~1,497~~24)		(~~1,088~~715)		~~(409)~~691
Financing activities	~~1,597~~(226)		~~318~~682		~~1,279~~(908)
Net increase in cash, cash equivalents, and restricted cash	$	179	$	2	$	177
Net decrease in cash, cash equivalents, and restricted cash	$	(23)	$	(5)	$	(18)

Operating activities

Cash generated from our operating activities ~~decreased~~increased to $79227 during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 from $~~772~~28 in ~~2023~~2024. The ~~decrease~~increase was primarily due to a ~~decrease~~change in working capital, which generated cash of $~~885~~296 in 2025 compared to cash ~~generated~~used ~~from~~of ~~originations~~$151 ~~net~~in ~~sales~~2024, ~~activities~~offset ~~and~~by an increase of $~~187~~159 in cash used for the repurchase of loan assets out of Ginnie Mae securitizations and a decrease of $128 in cash generated from originations net sales activities.

Investing activities

Cash used in investing activities ~~increased~~decreased to $~~1,497~~24 during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 from $~~1,088~~715 in ~~2023~~2024. The ~~increase~~decrease was primarily due to ~~additional~~a reduction of $~~694~~591 in cash used for the purchase of mortgage servicing rights in ~~2024~~2025 and ~~the~~an ~~decrease~~increase of $121 in cash generated ~~of $243~~ from proceeds on sale of mortgage servicing rights~~, partially offset by the change in cash used of $522 in 2023 for the acquisitions of business related to the Roosevelt Transaction and Home Point Acquisition~~.

Financing activities

~~Cash~~Our ~~generated in~~ financing activities ~~increased~~used tocash of $~~1,597~~226 during the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, ~~from~~compared to generated cash of $~~318~~682 in ~~2023~~2024. The ~~increase~~change was primarily due to ~~cash~~the ~~generated~~proceeds of $1,~~750~~000 from the issuance of the 2032 ~~and 2029~~ unsecured senior notes in ~~2024,~~the ~~partially~~first ~~offset~~quarter ~~by decreased net borrowing~~ of ~~$533 from advance, warehouse and MSR facilities~~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~~, which was acquired during the third quarter of 2023 in connection with the Roosevelt Transaction~~. As of ~~September~~March 3031, ~~2024~~2025, we were in compliance with our required financial covenants.

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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 ~~borrower~~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 ~~borrower~~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 ~~borrower~~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 ~~borrower~~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

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Capital and Liquidity Plan

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

As of ~~September~~March 3031, ~~2024~~2025, Nationstar Mortgage LLC and Cypress Loan Servicing LLC were in compliance with our seller/servicer financial requirements for FHFA and Ginnie Mae.

In 2022, the FHFA and Ginnie Mae revised its Seller/Servicers and single-family issuers minimum financial eligibility requirements. Below is the remaining revision effective in 2024. The Company is currently evaluating the impact of the revised requirements. Based on its preliminary assessment, the Company expects to meet the revised requirements in 2024.

Capital Requirements (effective December 31, 2024)

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

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

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Advance facilities principal amount	$	~~604~~705	$	~~682~~849
Warehouse facilities principal amount	12,~~763~~324		~~822~~2,016
MSR facilities principal amount	23,~~035~~300		23,~~814~~650
Unsecured senior notes principal amount	4,950		34,~~200~~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 our own funds to meet contractual principal and interest payments for certain investors, and to pay taxes, insurance, foreclosure costs and various other items that are required to preserve the assets being serviced. Delinquency rates and prepayment speeds affect the size of servicing advance balances, and we exercise our ability to stop advancing principal and interest where the pooling and servicing agreements permit, where the advance is deemed to be non-recoverable from future proceeds. These servicing requirements affect our liquidity. We rely upon several counterparties to provide us with financing facilities to fund a portion of our servicing advances. As of ~~September~~March 3031, ~~2024~~2025, we had a total borrowing capacity of $1,~~380~~400, of which we could borrow an additional $~~790~~695.

Warehouse Facilities

Loan origination activities generally require short-term liquidity in excess of amounts generated by our operations. The loans we originate are financed through several warehouse lines on a short-term basis. We typically hold the loans for approximately 30 days and then sell or place the loans in government securitizations in order to repay the borrowings under the warehouse lines. Our ability to fund current operations depends upon our ability to secure these types of short-term financings on acceptable terms and to renew or replace the financings as they expire. As of ~~September~~March 3031, ~~2024~~2025, we had a total borrowing capacity of $46,~~771~~101, of which we could borrow an additional $3,~~008~~777.

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MSR Facilities

Our MSR facilities provide financing for our servicing portfolio and investments. As of ~~September~~March 3031, ~~2024~~2025, we had a total borrowing capacity of $67,~~750~~200, of which we could borrow an additional $43,~~715~~900.

Unsecured Senior Notes

From 2021 to 2024, we completed offerings of unsecured senior notes with maturity dates ranging from ~~2027~~2026 to 2032. In connection with ~~the~~an ~~Home~~acquisition ~~Point Acquisition~~ in ~~the third quarter of~~ 2023, we assumed an unsecured senior note with a maturity date in 2026. ~~In February and August 2024, we completed offerings of $1,000 and $750 unsecured senior notes due in 2032 and 2029, respectively.~~ We pay interest semi-annually to the holders of these notes at interest rates ranging from 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 ~~September~~March 3031, ~~2024~~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, ~~2023~~2024.

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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, ~~2023~~2024. There have been no material changes to our critical accounting policies and estimates since December 31, ~~2023~~2024.

Other Matters

Recent Accounting Developments

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

Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker included within each reported measure of segment profit or loss and increased interim disclosure requirements, among others. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied retrospectively. We are currently evaluating the impact this standard may have on our financial statement disclosures. The adoption of ASU 2023-07 only impacts disclosures and is not expected to have a material impact on our condensed consolidated financial statements.

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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.

49Accounting 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. The Company is 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 ~~borrowers~~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.

~~Forbearance~~Float earnings. AnInterest ~~agreement~~earned ~~between~~on ~~the~~balances ~~mortgage~~in ~~servicer~~custodial oraccounts, ~~lender~~which ~~and~~represent ~~borrower~~collections ~~for a temporary postponement~~ of ~~mortgage~~principal ~~payments.~~and Itinterest isreceived afrom ~~form~~customers ofon ~~repayment~~behalf ~~relief granted by the lender or creditor in lieu~~ of ~~forcing~~investors aand ~~property~~tax ~~into~~and ~~foreclosure~~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 ~~borrower~~customer, including the interest rate, amortization period and term of the ~~borrower~~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 ~~borrower~~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 ~~borrower~~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 ~~borrowers~~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 ~~borrowers~~customers to refinance their mortgage loans. By refinancing loans for ~~borrowers~~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 ~~borrower~~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 ~~borrowers~~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 ~~borrowers~~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 ~~borrower~~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 ~~borrower~~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 ~~borrowers~~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, ~~2023~~2024. There have been no material changes in the types of market risks faced by us since December 31, ~~2023~~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 ~~borrower~~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 ~~September~~March 3031, ~~2024~~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 ~~September~~March 3031, ~~2024~~2025 given hypothetical instantaneous parallel shifts in the yield curve. Actual results could differ materially.

Table 16. Change in Fair Value

	September 30, 2024
	March 31, 2025
	Down 25 bps		Up 25 bps
Increase (decrease) in assets
Mortgage servicing rights at fair value	$	(~~245~~248)	$	223
Mortgage loans held for sale at fair value	76		~~(8)~~2
Derivative financial instruments:
Interest rate lock commitments	10		(10)
Treasury futures	155		(45)
Forward MBS trades	~~(14)~~95		17(70)
Treasury futures	98		(95)
Interest rate lock commitments	9		(10)
Total change in assets	~~(144)~~17		~~127~~100
Increase (decrease) in liabilities
Mortgage servicing rights financing at fair value	(2)		21
Excess spread financing at fair value	(43)		32
Derivative financial instruments:
Interest rate lock commitments	(3)		4
Treasury futures	4		(1)
Forward MBS trades	~~(75)~~39		80(12)
Total change in liabilities	(84)		89
Interest rate lock commitments	(2)		3
Total, net change	$	(60)	$	38
Total change in liabilities	36		(7)
Total, net change	$	(19)	$	107

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 ~~September~~March 3031, ~~2024~~2025.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September~~March 3031, ~~2024~~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 ~~September~~March 3031, ~~2024~~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, ~~2023~~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. Inand ~~July 2023, our Board of Directors~~ authorized an additional $200 million ofin ~~our~~each ~~outstanding~~of ~~common~~July ~~stock,~~2023 and in July 2024,. ~~our~~The ~~Board~~stock ofrepurchase ~~Directors~~program ~~authorized~~may anbe ~~additional~~suspended, ~~$200~~modified ~~million~~or ofdiscontinued ~~our~~at ~~outstanding~~any ~~common~~time ~~stock~~at our discretion. As of ~~September~~March 3031, ~~2024~~2025, $28190 million of common stock remain available for repurchase. During the three months ended ~~September~~March 3031, ~~2024~~2025, weno ~~repurchased~~ shares of our common stock atwere ~~a total cost of $46 million under our share repurchase program~~repurchased. ~~The number and average price of shares purchased are set forth in the table below:~~

Period	(a) Total Number of Shares (or Units) Purchased (in thousands)	(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (in thousands)	(d) Maximum Number (or Appropriate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Program (in millions)
July 2024	57	$	85.25	57	$	69
August 2024	233	$	88.09	233	$	48
September 2024	226	$	89.65	226	$	28
Total	516			516

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Incorporated by Reference

Exhibit Number

Description

Form

File No.

Exhibit

Filing Date

Filed or Furnished Herewith

4.1

Indenture, dated as of August 1, 2024, among Nationstar Mortgage Holdings Inc. as Issuer, the Company as Parent Guarantor, the guarantors party thereto and Computershare Trust Company, N.A., as Trustee

8-K

001-14667

4.1

08/01/2024

2.1†

Agreement and Plan of Merger, dated as of March 31, 2025, by and among Rocket Companies, Inc., Maverick Merger Sub, Inc., Maverick Merger Sub 2, LLC and Mr. Cooper Group Inc.

8-K

001-14667

2.1

04/01/2025

10.1

Amendment Number ~~Twenty-Two~~8, dated ~~September~~March 3013, ~~2024~~2025, to ~~the~~Third ~~Second~~ Amended and Restated Master Repurchase Agreement, ~~dated~~entered into as of ~~January~~August 2931, ~~2016~~2020 ~~between~~by ~~Barclays~~and between Bank ~~PLC~~of America, N.A., as ~~agent~~buyer and Nationstar ~~Mortgage~~Participation Sub 1BM LLC, as seller, and acknowledged, guaranteed and agreed to by Nationstar Mortgage LLC, as guarantor or pledgor

10.2

~~Amendment~~Master ~~Number~~Repurchase ~~Six, dated September 30, 2024 to Amended and Restated Loan and Security~~ Agreement, dated as of ~~April~~March 327, ~~2023~~2025, between ~~Nationstar~~Barclays ~~Mortgage~~Bank ~~LLC~~PLC, as ~~borrower~~Buyer and ~~Barclays~~Nationstar ~~Bank~~Mortgage ~~PLC~~LLC, as ~~lender~~Seller

10.3+

Base Indenture entered into as of July 31, 2024, by and among Nationstar GNMA Trust, a Delaware statutory trust, as Issuer, Citibank, N.A., as Indenture Trustee, Calculation Agent, Paying Agent and Securities Intermediary, Nationstar Mortgage LLC, as Administrator and Servicer, Goldman Sachs Bank USA, as an Administrative Agent, and acknowledged by Pentalpha Surveillance LLC, as credit manager

10.3

Amended and Restated Master Repurchase Agreement, dated as of March 27, 2025, among Nationstar Sub 1J LLC, as Seller, Nationstar 1J Trust, as Asset Subsidiary, Nationstar REO Sub 1J LLC, as REO Subsidiary, and Nationstar Mortgage LLC, as Guarantor and Nationstar Servicer, and JPMorgan Chase Bank, National Association, as Buyer

10.4**

Mr. Cooper Group Inc. Change in Control Executive Severance Plan

8-K

001-14667

10.1

04/01/2025

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.)

5751

Table of Contents

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

Incorporated by Reference

Exhibit
Number

Description

Form

File No.

Exhibit

Filing Date

Filed or Furnished Herewith

104

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

58† 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.

Table of Contents

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.
October 23, 2024						/s/ Jay Bray
April 23, 2025						/s/ Jay Bray
Date						Jay BrayChief Executive Officer(Principal Executive Officer)
October 23, 2024						/s/ Kurt Johnson
April 23, 2025						/s/ Kurt Johnson
Date						Kurt JohnsonExecutive Vice President & Chief Financial Officer(Principal Financial and Accounting Officer)

5953

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