Newrez Fuels Rithm Capital’s 2025 Profit And Servicing Growth

Rithm Capital Corp. reported its fourth-quarter and full-year 2025 results, driven by higher earnings at its mortgage origination and servicing subsidiary, Newrez, and steady performance across its mortgage-related businesses.

Rithm executives said during Tuesday morning’s earnings call that 2025 was a strong year for the company, anchored by growth in mortgage origination and servicing at Newrez and expansion across its investment platforms.

The New York-based real estate investment manager said it earned $567.2 million, or $1.04 per diluted share, for the year ended Dec. 31. Fourth-quarter net income was $53.1 million, or 9 cents per share.

Rithm’s President and CEO, Michael Nierenberg, said during the earnings call that Rithm’s results reflected “diversification” across its mortgage origination, servicing and asset management platforms, noting that earnings exceeded the dividend for the 25th consecutive quarter.

Newrez and Valon

Newrez, Rithm’s largest operating business, reported higher earnings for the year despite volatility in mortgage rates and faster prepayment speeds. The mortgage platform generated approximately $1.1 billion in pretax income in 2025, including mark-to-market adjustments, an increase of 17% year over year, according to Newrez President Baron Silverstein, who called it a “milestone” for the platform.

Silverstein also provided comments about Rithm Capital’s announcement on Monday regarding its partnership with Valon, which will allow Newrez to deploy Valon’s AI-native mortgage servicing platform, ValonOS, to service more than 4 million loans starting in 2027.

“We expect the Valon operating system to materially improve our efficiency, benefiting all of our 4 million homeowners and our third-party clients,” he said.

In the fourth quarter, Newrez posted $249 million in pretax income excluding mark-to-market adjustments, supported by growth in originations and fee-based third-party servicing. The unit delivered a 17% return on equity in the quarter and a 20% return on equity for the full year, the company said.

Newrez ended 2025 as the third-largest mortgage servicer and the fifth-largest mortgage lender in the United States, according to company data. Its servicing portfolio totaled approximately $850 billion in unpaid principal balance (UPB) at year-end.

About 30% of Newrez’s servicing portfolio consists of high-margin, fee-based third-party servicing, while government-insured loans accounted for a portion of owned mortgage servicing rights. Newrez’s third-party servicing increased to $256 billion, which Silverstein said includes $25 billion in new third-party servicing, which “offsets the movement of a single margin agency sub servicing portfolio.”

FHA loan mod changes

During the call, the company remarked that fourth-quarter results were affected by seasonal delinquency trends and changes to FHA loan modification rules, which increased short-term delinquencies but are expected to support longer-term performance.

Funded loan volume at Newrez rose to $18.8 billion in the fourth quarter, up 15% from the prior quarter, and $63 billion for the full year. Pretax income from originations excluding mark-to-market adjustments climbed 31% from a year earlier. Non-agency production, including non-qualified mortgages, increased sharply, with non-QM originations up 200% year over year, the company said.

Rithm executives said Newrez continued to prioritize pricing discipline over market share, citing competitive pressure on gain-on-sale margins across the industry. Nierenberg cited recent acquisitions of Crestline Management and Paramount Group as an “opportunistic situation.”

During the year, Rithm and Newrez completed eight non-QM securitizations totaling $4 billion in UPB and invested about $9 billion in residential mortgage assets, largely sourced through internal origination platforms. The company also entered a forward-flow agreement to purchase up to $1 billion in home improvement loans, acquiring roughly $600 million in 2025.

Rithm ended the year with approximately $1.7 billion in cash and liquidity and said it managed more than $100 billion in investable assets, including balance sheet assets and third-party capital.

Looking ahead, Nieremberg reiterated that the company is “not in a race to grow origination” and “if folks are out there are pricing origination through the market, it’s not going to be us. Similarly, when you think about the MSR business, we’re fully hedged against our MSR.”

He continued, “We’re going to get more efficient. We are going to spend some more money on [our] brand as we go forward. But we’re not in a race to just grow origination. We don’t need to do that just to be in a battle with somebody else. And you’ve seen that in the wholesale channel between a couple of different mortgage originators.”