Onity Group Q4 2025 Earnings Call - Record originations offset servicing runoff; $120M valuation allowance release boosts book value

Conference Call Operator: Hello, and welcome everyone joining today’s Onity Group’s full year and fourth quarter earnings and business update conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. To register to ask a question at any time, please press star one on your telephone keypad. Please note, this call is being recorded. We are standing by if you should need any assistance. It is now my pleasure to turn the meeting over to Valerie Haertel, Vice President of Investor Relations. Please go ahead.

Valerie Haertel, Vice President of Investor Relations, Onity Group: Good morning, and welcome to Onity Group’s full year and fourth quarter 2025 earnings call. Please note that our earnings release and presentation are available on our website at onitygroup.com. Speaking on the call will be Chair, President, and Chief Executive Officer, Glen Messina, and Chief Financial Officer, Sean O’Neil. As a reminder, our comments today may contain forward-looking statements made pursuant to the safe harbor provisions of the Federal Securities laws. These statements may be identified by reference to a future period or by use of forward-looking terminology and address matters that are uncertain. Forward-looking statements speak only as of the date they are made and involve assumptions, risks, and uncertainties, including those described in our SEC filings. In the past, actual results have differed materially from those suggested by forward-looking statements, and this may happen again.

In addition, the presentation and our comments contain references to non-GAAP financial measures, such as adjusted pre-tax income. We believe these non-GAAP measures provide a useful supplement to discussions and analysis of our financial condition because they are measures that management uses to assess the performance of our operations and allocate resources. Non-GAAP measures should be viewed in addition to, and not as an alternative for, the company’s reported GAAP results. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures and management’s reasons for including them may be found in the press release and the appendix to the investor presentation. Now, I will turn the call over to Glen Messina.

Glen Messina, Chair, President, and Chief Executive Officer, Onity Group: Thanks, Valerie. Good morning, everyone, and thank you for joining our call. We’re looking forward to sharing our results for the fourth quarter and full year, as well as reviewing our strategy and financial objectives to deliver long-term value for our shareholders. Let’s get started on slide 3. Our fourth quarter and full year results again demonstrate the effectiveness of our strategy and the strength of our execution. We delivered record earnings through sustained growth and profitability that enabled a significant partial release of our deferred tax valuation allowance. Our balanced business and MSR hedging strategy performed effectively as rates moved lower in the second half of 2025, with higher origination earnings offsetting lower servicing earnings. Our fourth quarter results were impacted by approximately $14 million of incremental MSR runoff due to higher delinquencies driven by the changes to the FHA loan modification rules and the government shutdown.

We believe this will stabilize in the second quarter of 2026. Sean will talk more about this later. Finally, we executed a strategic partnership with Finance of America Reverse to reposition our participation in the reverse mortgage market to simplify the business, which we believe will drive future earnings growth and improve shareholder returns. Overall, we had a great 2025, and I’m proud of our team and what they accomplished. Considering the macroeconomic environment, our liquidity position, and our continuing investment in talent and technology, we’re excited about the potential for our business in 2026. Let’s turn to slide 4 to review a few key financial trends. Over the last 3 years, we’ve delivered continued growth in adjusted revenue through steady growth in total servicing additions, servicing UPB, and dynamic asset management.

The combination of revenue growth and focus on continuous process reengineering has driven steady improvement in operating efficiency. This has resulted in solid double-digit adjusted ROE over the past several years, notwithstanding the adverse impact of the FHA rule changes in government shutdown, which was roughly a 3 percentage point impact in 2025. Our sustained and growing profitability has driven continued growth in book value per share, which was accelerated this year through the deferred tax valuation allowance release made possible by our actions to transform our business. Let’s turn to slide 5 for more about the capability of our balanced business. There’s no better proof as to the effectiveness of our balanced business model than our results in 2025. You can see on the left the contrast in how originations and servicing contributed to the company’s financial performance as interest rates changed throughout the year.

With higher rates in the first half, both servicing and originations were profitable, and servicing was the primary earnings driver. In the second half of the year, with falling rates, originations took over as the primary earnings driver. We believe our balanced business is performing as intended, and our scale in both servicing and originations enables us to perform well with high or low interest rates. Let’s turn to slide 6 for more about our growth actions and focus. In 2025, our originations team delivered 44% year-over-year volume growth versus 18% for the overall industry… In business to business, our enterprise sales approach, product breadth, and client service delivery model have been a highly effective growth enablers. Consumer Direct is demonstrating strong growth, driven by declining rates in the second half of 2025 and improved execution.

We continue to deliver industry top-tier recapture performance versus the industry averages and our target peers. We’re launching new and upgraded products and services to expand our addressable market, access higher margin market segments, and manage operating capacity for surges in refinancing activity. We’ve continuously invested in technology and process optimization to enhance the customer experience, reduce costs, and improve scalability and competitiveness in both business to business and consumer direct. To highlight how far we’ve come, our fourth quarter funded volume was the highest we’ve ever originated. Now, please turn to slide 7 for an example of how our technology is continuing to enhance refinance recapture performance. We’ve been investing across 4 categories of AI: robotics, natural language processing, vision, and machine learning to improve business performance and competitiveness on several dimensions. While not exhaustive, this slide illustrates the approach we follow in deploying AI to improve recapture performance.

As we look across the refinance customer journey, we’re aligning AI efforts with key points along the journey that contribute to both an improved customer experience and improved refinance recapture rate. Our biggest performance gains have come from using machine learning to bring together internal and external data about our customers, their loan, and our processes. This has helped us enhance communications, manage capacity more dynamically, and better inform decisions and actions across the borrower journey. We use machine learning to identify customer and loan-level characteristics that we believe are predictive to total MSR return, including expected loan performance and recapture propensity. This helps shape our MSR investment and asset management decisions. Other elements of our AI strategy include large language models and robotic process automation that are targeted to improve the human machine interface, expand operations capacity, streamline processes, and reduce cost.

Ultimately, all these investments result in an improved borrower experience. Let’s turn to slide 8 to see what we’ve accomplished in subservicing. We continue to see a high level of interest among prospective clients to explore subservicing options and alternatives. Our second half subservicing additions of $33 billion was over 2.5 times the first half level, driven by new relationships, our existing clients, and synthetic subservicing with our MSR capital partners. We expect that momentum to continue into the first half of 2026, with projected subservicing additions of $28 billion from these clients. We expect to board 8 new clients in the first half of 2026 and have another 8 new agreements under negotiation. We continue to see attractive growth opportunities in small balance commercial, where subservicing UPB is up 31% year-over-year.

While the requirements are more complex than performing residential servicing, we believe the returns are better. We have the expertise, and we’re investing to drive continued growth in 2026. Overall, we’re excited about the growth potential in subservicing, and we continue to invest in our sales and operating capabilities to pursue a robust opportunity pipeline. Regarding our subservicing relationship with Rithm, we expect the transition to begin in the first half of 2026. As a reminder, the Rithm subservicing is one of our least profitable portfolios before and after corporate allocations. We expect to adjust our cost structure and replace the earnings contribution from the Rithm portfolio with more profitable business that is better aligned with our current growth focus. We do not expect the removal of these loans to have a material financial impact for the full year of 2026.

Let’s turn to slide 9 to talk more about how we’ve grown our servicing portfolio. We’ve increased our owned MSR portfolio, consistent with our objectives to grow earnings and book value, as well as reload our portfolio for recapture opportunities. Owned MSR UPB is up 15% year-over-year versus total industry servicing growth of 2% for the same period. Our servicing UPB at the end of 2025 is up 9% over the prior year, with $49 billion in servicing additions net of runoff, more than offsetting planned transfers to Rithm and other client deboardings. MSR demand keeping prices elevated. Several of our clients have taken the opportunity to monetize their MSRs and are replenishing their portfolio as industry originations volume increases.

Our ability to grow our servicing portfolio while our clients execute opportunistic MSR sales, highlight the power of our originations capability and the success of our growth strategy. Let’s turn to slide 10 to discuss our servicing platform. We’ve built a strong servicing platform that delivers top-tier performance on multiple dimensions. We service 1.4 million loans on behalf of more than 3,000 investors and over 100 subservicing clients, including forward, reverse, and business purpose residential mortgages. We’ve been recognized by Fannie Mae, Freddie Mac, and HUD for industry-leading servicing performance, and our automation center of excellence has also been recognized by SSON as best in class.

Based on the MBA 2025 servicing cost study, our fully loaded servicing operating expenses are materially lower than the large non-bank servicer average for both performing and non-performing loans. Our continuous focus on improving the customer experience is evidenced with high satisfaction ratings from our borrowers and subservicing clients on key dimensions of our performance. While we’re not the largest servicer in the industry, we deliver top-tier performance for customers and investors and are positioned to fiercely compete with anyone, regardless of size. Let’s turn to slide 11 to discuss our perspectives on the industry environment for 2026. We believe the macro environment is largely favorable for housing and housing finance. MBA and Fannie Mae are projecting 15% year-over-year growth in total industry origination volume, driven by strong double-digit growth in refinance volume.

The current administration has identified housing affordability as a priority, which could be a catalyst for growth in both refinance and purchase originations. We believe GSE privatization can be beneficial for the industry to restore competition and foster innovation among the GSEs, create opportunities for non-agency product expansion, and attract capital to the industry. MSRs continue to be in high demand, driving strong pricing and values, and M&A activity continues, especially in servicing. We’re equally mindful of potential headwinds that could impact the industry in 2026. We believe the FHA modification rule changes will continue to adversely impact delinquencies and MSR runoff before normalizing through the second quarter at levels slightly below year-end 2025. This assumes no further program changes or general credit quality deterioration. Unfortunately, we are seeing an increased willingness to tolerate frequent and sometimes protracted government shutdowns over budget disputes.

We’re also seeing increased competition in forward residential subservicing. There’s evidence and discussions of an evolving K-shaped economy, which may give rise to increased delinquencies and defaults in certain portfolio segments. Finally, housing supply continues to be one of the biggest constraints to housing affordability, limiting purchase origination volume. On balance, based on what we know today, we expect the environment to be net favorable, and we believe our balanced business is well positioned and an attractive option for investors interested in the mortgage sector. Let’s turn to slide 12 to review our priorities for 2026. This year, we remain focused on executing our proven strategy, following through on our simplification actions, and investing to drive profitable growth. We remain committed to driving organic growth enabled by our enterprise sales approach, value delivery model, and new product development.

We will evaluate opportunistic bulk acquisitions in M&A if the economics are compelling and we believe it contributes to maximizing value for shareholders. Investing in technology remains a key priority to drive recapture, service excellence, and reduce costs using our previously described technology investment prioritization framework. In servicing, we’re committed to transitioning out of the legacy Rithm subservicing and focusing our participation in the reverse mortgage market as a subservicer. Finally, we expect to deploy capital to grow high-yielding MSRs and other investments and support our capital structure objectives. For 2026, we’re targeting an adjusted ROE range of 13%-15%, which is the equivalent to 16%-18% before the increase in our equity from the deferred tax valuation allowance release. Now I’ll turn it over to Sean to discuss our results in more detail.

Sean O’Neil, Chief Financial Officer, Onity Group: Thanks, Glen. Let’s turn to slide 13 for a recap of key financial measures by quarter. Revenue continued the strong growth trend exhibited in 2025, up 25% in the fourth quarter year-over-year and 6% sequentially. I would note that typically, the fourth quarter is a seasonally weaker period for originations across the industry, but as you will see, originations at Onity continued to grow revenue and pre-tax income. Our adjusted return on equity was 7% for the quarter and 17% when adjusted for the material impact of the governmental actions that Glen referred to. We have shown the magnitude of these actions on our results on every slide with adjusted ROE.

As a result of our ongoing profitable operations in servicing and originations and the release of $120 million of our existing valuation allowance in the fourth quarter, our book value per share increased more than $11 quarter over quarter and $17 year over year. Now let’s turn to slide 14 for the pre-tax income results of our origination segment. Originations adjusted pre-tax income was significantly higher both year over year and sequentially, reflecting an improvement above the already strong third quarter performance we saw recently. This performance was driven by record levels of origination volume in both our Consumer Direct and B2B channels. The volume was also supported by an increase in Ginnie Mae volume, as well as new product volume from closed end seconds and our newly launched non-QM product suite. Please turn to slide 15 for details on the originations volume.

B2B volume continued to top a record third quarter, with higher volume and improved margins versus the prior year and quarter. This increased volume and margin was supported by a strong enterprise sales force, the breadth of our product offering, and our ability to deliver a positive customer service experience. Consumer Direct volume was up sharply, reflecting the continued strong recapture performance. Importantly, we improved Consumer Direct’s revenue per loan and average loan size versus the prior quarter. Please turn to slide 16 for our servicing segment performance. Servicing was profitable, but impacted by higher than expected MSR runoff expense. While both UPB and revenue continued to improve in the fourth quarter, higher MSR runoff more than offset that improvement.

Besides interest rate prepayment-driven runoff, the remainder of the runoff was driven by two distinct government actions, the more impactful being the change FHA made to loan modifications that took effect on October 1, 2025, and the second being the 6-week government shutdown from October to November. The combined impact was higher delinquencies and delayed cures, with fewer borrowers moving from delinquent to current status. This impacted November and December runoff expense by approximately $14 million, which is represented on the slide by the dotted box. Please turn to Slide 17 for details on government actions in Q4 impacting servicing profitability. An FHA program change that was announced earlier in 2025 took effect on October 1 and replaced some COVID-era programs with more normative loan modification policies.

Some of those included removing the ability to go into a loan modification, or mod, without a 3-month trial period. This trial period usually has some percentage of the loans falling out as they fail the trial. Also, the ability to mod was limited to once per 24 months, and some other loss mitigation structures that had existed since COVID were ended. The effect on the entire industry was a higher overall delinquency rate for FHA borrowers of about 80 basis points in the fourth quarter versus the third quarter. These FHA program changes may accelerate some loans into foreclosure status in the near term that may have benefited from the prior HUD rules. The FHA mod impact was exacerbated by the longest government shutdown to date, which occurred at the same time, ceasing the delivery of needed paychecks for borrowers over that period, which also contributed to higher delinquencies.

Overall, based on our experience, analytics, and available industry data, we expect delinquencies to continue to trend higher in the near term and stabilize by the second quarter of 2026, down from Q4 levels, but still elevated. Please turn to Slide 18 for an assessment of our continued strong hedging performance. Once again, our MSR hedge strategy continued to perform well and as intended in the fourth quarter. As a reminder, our strategy is designed to mitigate interest rate risk, and our hedge has been effective, as you can see on the graph. Prior to 2024, we increased our hedge coverage ratio such that by the first quarter of 2024, we were seeking to hedge the majority of our interest rate risk.

When we compare our results with information in the public domain, we believe we provide an effective MSR hedge at an efficient cost relative to our peers, who also hedge a significant portion of their book. Given that an MSR hedge is dependent on the interest rate and related derivatives markets, we frequently review and assess our hedge strategy to manage risk and optimize liquidity and total returns. Please turn to Slide 19 for an overview of the valuation allowance. On 12/31/2025, we released a valuation allowance that was offsetting our net deferred tax asset. This action was part of our ongoing quarterly review per ASC 740, which considered, among other factors, our consistent profitability over the last several years to enable the release.

In addition to immediately improving net income in the fourth quarter, which also contributed to our strong improvement in book value per share, the positive impact on our equity improved our DE ratio considerably, moving us to 2.6 times. We will continue to assess the remaining valuation allowance of $26 million, which is predominantly offsetting state tax NOLs. Currently, we don’t expect any material changes to the VA in the near future. The increase in equity will bring adjusted ROE down by about 300 basis points, such that our guidance for full year 2026 goes to 13%-15% versus the 16%-18% it would be absent the valuation allowance release. Overall, the release of the substantial majority of our existing valuation allowance is another indicator of our recent improvements in profitability and affirmation of our strategy and execution.

Please turn to Slide 20 for observations on liquidity. To start with, at year-end 2025, our liquidity was $205 million, of which $181 million was unrestricted cash, and the remainder was MSRs that were pledged but undrawn on a bank line. Then in late January, we opportunistically conducted an add-on high-yield offering, where we issued $200 million of notes identical to our Q4 2024 high-yield issuance, but at an effective yield of 8.5%, which is about 140 basis points better than our 2024 issuance. We have not yet closed our Finance of America Reverse MSR transaction, which is awaiting Ginnie Mae approval. But when that closes, we will recognize roughly $100 million in proceeds, as disclosed in a previous 8-K and press release.

Our approach to deploying excess capital is to immediately de-risk our balance sheet by replacing mark-to-market MSR bank financing with longer-term, non-mark-to-market high-yield proceeds. We then consider other uses for the capital, such as increased participation in MSR bulk purchases, higher volumes in the B2B originations channel with retained MSRs, or M&A opportunities. In addition, we have received board approval to launch a $10 million share buyback program, which we can fund with liquidity as of year-end 2025. We think these various transactions provide ample capital to pursue various growth strategies in 2026. On slide 21, we provide guidance for full year 2026. As Glen mentioned earlier, we expect to deliver an adjusted ROE of 13%-15%, which includes the impact of the valuation allowance release on increased equity.

For modeling purposes, I would indicate our effective tax rate in 2026 is projected to be modestly higher than the federal and state levels due to some permanent expense disallowances, and we presently anticipate an effective tax rate of 28%-30%. Furthermore, the combined impact of the Rithm-related restructuring and Finance of America indemnifications and restructuring costs are expected to be in the range of $19 million-$20 million. Those indemnifications and restructuring will impact GAAP net income, but not our adjusted ROE. We anticipate a 5%-15% increase servicing book UPB growth, and this includes the non-renewal of the Rithm contract, which had roughly $32 billion of UPB at the end of 2025. We expect to continue to maintain a high hedge effectiveness to protect the value of the MSR and continue to control expense growth to be commensurate with revenue growth.

Overall, I am pleased to report a record quarter for net income that substantially increased book value per share for our shareholders. Back to you, Glen.

Glen Messina, Chair, President, and Chief Executive Officer, Onity Group: Thanks, Sean. Let’s turn to slide 22 for a few comments before we open up the call for questions. We remain committed to accelerating profitable growth and creating value for all stakeholders. I’m proud of the team’s relentless focus on delivering on our commitments. Our strong 2025 results, led by record originations volume, validates our balanced business and its ability to perform through market cycles. We’ve built a technology-enabled, award-winning servicing platform that’s efficient, delivers differentiated performance and service excellence. We’re delivering profitability comparable to our peers at a more attractive valuation, underscoring our commitment to strong shareholder returns. All of this comes together to suggest a share price that we believe has significant upside, and we intend to continue to take the necessary actions and maintain agility in a dynamic market to harvest that value for the benefit of all shareholders.

Overall, we could not be more optimistic about the potential for our business. With that, operator, let’s open up the call for questions.

Conference Call Operator: Thank you. If you’d like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. We’ll pause for just a moment to allow everyone a chance to join the queue. Again, that is star and one. We’ll take our first question from Bose George with KBW. Your line is open.

Bose George, Analyst, KBW: Hey, everyone. Good morning. Just on the, you know, the FHA impact on the MSR that you noted. So it was $14 million in the fourth quarter. You noted there’d be some impact in the first quarter and the second quarter. Can you help quantify that as well?

Glen Messina, Chair, President, and Chief Executive Officer, Onity Group: Hey, Bose, good morning. And thanks for your question. Yeah, look, you know, we certainly have quantified the impact for the fourth quarter because we go through a you know, a very intense analysis, looking at every attribute of the MSR portfolio to see what impact or runoff, whether it’s scheduled payments, unscheduled payments, escrow balances, delinquencies. Hard to predict right now on a go-forward basis, you know, how customers are gonna perform throughout the course of the year. We’ve done a fair amount of modeling to support our estimation that we would expect this to stabilize by the second quarter. We think that’s enough time for it to set a new norm, so to speak.

And once your delinquency is at a new norm level, if you think about it, even if it’s higher than it was previously, I’ll just pick some numbers. If it was 8% in one quarter and went up to 10%, that’s a 200 basis point increase. That’s an adverse impact to MSR valuation, and that’s, you know, similar to what we saw in the fourth quarter. But if it stays at 10% versus 10%, there’s really nothing that flows through the MSR runoff line for delinquency because there was no incremental delinquency and no incremental change. So, you know, right now we’re monitoring it closely. We’re, you know, keeping an eye on how consumers are behaving.

But with some of the new rule changes, and in particular, Bose, this requirement for consumers who are seeking a modification to do an attestation to say that they have the financial resources to complete the mod and go through, you know, it is – it’s consumer behavior. It’s hard to predict. We’re, you know, keeping an eye on it to see how consumers are reacting to that. So yeah, we’d love to be able to give you a number. It’s X in this quarter, Y in that quarter, but right now it’s just a little difficult to see.

Bose George, Analyst, KBW: Okay. Yeah, no, that makes a lot of sense. And then just on the origination side, you know, with the government shutdown, you know, was there an impact in terms of, you know, making it harder to recapture some of those FHA loans as well? Or was the origination side all right, even during the shutdown?

Glen Messina, Chair, President, and Chief Executive Officer, Onity Group: You know, interestingly enough, from a refi perspective, we did not see a material impact as a result of the government shutdown. I mean, it was just a, you know, tremendous quarter for us, or a record-setting quarter from a refinance perspective. And, you know, with lower rates, as we can see from the MBA refi application index, it’s continuing to chug along quite nicely. So, you know, the refi expectations for the industry, at least coming out of the gate, seem to be reasonable and appropriate. So didn’t see any impact there. Excited about how our recapture platform is performing and, you know, looking forward to, you know, working with our team to maximize performance of our recapture platform.

Bose George, Analyst, KBW: Okay, great. Actually, just one more for me, the 13%-15% guidance number, is that a post-tax number, so is that after that 28%-30%?

Glen Messina, Chair, President, and Chief Executive Officer, Onity Group: No, just at ROE, it’s always on a pre-tax, post.

Bose George, Analyst, KBW: It’s a pre-tax.

Glen Messina, Chair, President, and Chief Executive Officer, Onity Group: So look, yeah, it is pre-tax. Again, it does take into consideration the, you know, $120 million increase to the equity base for our earnings for-

Bose George, Analyst, KBW: Mm-hmm.

Glen Messina, Chair, President, and Chief Executive Officer, Onity Group: 2025, which is, you know, net, net a good thing. But we are conscious of making sure we can generate competitive return on equity in both the pre-tax and after-tax basis. And we’ll be mindful of, you know, there are return on investment hurdles throughout the course of 2026 to make sure that we can deliver competitive returns.

Bose George, Analyst, KBW: Okay, great. Thanks.

Conference Call Operator: Once again, if you would like to ask a question, please press Star and One on your keypad now. We’ll take our next question from Eric Hagan with BTIG. Your line is open.

Brendan, Analyst, BTIG: Hi, this is Brendan on for Eric. Do you think that there’s an ideal interest rate environment for the subservicing business? And are there any catalysts you see to add a lot of the scale in the subservicing business in the near term, or is that really a long-term growth opportunity?

Glen Messina, Chair, President, and Chief Executive Officer, Onity Group: Good morning, Brendan. Thanks for your question. You know, look, we’ve seen steady opportunity in subservicing. And quite frankly, it’s not necessarily a function of interest rates. Although, you know, in particular for the independent mortgage bankers, the privately owned independent mortgage bankers, when people are going through a refinancing wave, there is a tendency for privately owned independent mortgage bankers to hold more MSRs on their balance sheet for tax planning and tax management strategy. And because, you know, originations, retail originations in particular, tends to be cash flow positive during refinancing cycles, it provides more cash for the privately owned independent mortgage bankers to hold MSRs on their balance sheet. So, you know, during the last two years, we’ve seen a cycle where, you know, I’ll use the term IMBs for independent mortgage bankers.

IMBs were selling MSRs to harvest cash because origination margins are really quite thin. You know, I think it’s an opportunity now with rates coming down for them to reload their portfolio, and we would expect to see growth there. You know, over the past couple of years, you know, the big catalyst for subservicing has been, quite frankly, the amount of subservicing platforms that have changed hands. There was, you know, probably 5 platforms in the last 2 to 2.5 years that have changed hands. Anytime you have that kind of disruption in the marketplace, it creates opportunities. It’s an opportunity for subservicing clients to rethink and explore their options and alternatives. More recently, you know, just yesterday, we saw the announcement of, you know, PennyMac’s acquisition of Sunnova.

You know, first off, my congratulations to, you know, David Spector and Jim Darous. I, you know, I have a lot of respect for both those people. It looks like it was, you know, a good transaction for them. But, you know, look, I would expect, as we’ve seen previously, it will create an opportunity for clients to rethink, what do I want to do? Do I want to stay here? Do I want to go, whatever? You know, it does create more people coming into the market to consider their alternatives. We love that. Quite frankly, as, you know, we’ve seen, we’ve grown our subservicing business quite nicely this year, $48 billion total subservicing additions this year.

We’ve got another 28 in the hopper that we expect to board in the first half. Eight new clients signed up that are going to be boarding in the first half, eight new contracts that are negotiations. Love the momentum we have there. I think, you know, look, the subservicing business always has always been fiercely competitive. You know, Sunnova has been, you know, a competitor in the marketplace for years. And they’re formidable, expecting to continue to be a formidable competitor. But, you know, look, I think this creates net-net opportunity to grow. Bottom line.

Brendan, Analyst, BTIG: Thank you. How much capital do you think will become available once the Rithm portfolio is fully transferred?

Glen Messina, Chair, President, and Chief Executive Officer, Onity Group: You know, in terms of capital availability with the transfer of the Rithm portfolio, you know, I don’t, subservicing generally doesn’t free up capital because we don’t have an investment in that portfolio. So that in and of itself won’t free up capital. You know, the closing of the sale of the reverse mortgage business, the MSRs to Finance of America Reverse, we expect that will free up roughly $100 million of capital. So, and convert that all to subservicing. And we’re, you know, just tremendously excited to be partnering with, Brian Lippman and his team over at Finance of America.

Brendan, Analyst, BTIG: Thank you very much.

Conference Call Operator: This does conclude the Q&A portion of today’s call. I would now like to hand the call back to Glen for any additional or closing remarks.

Glen Messina, Chair, President, and Chief Executive Officer, Onity Group: Thank you, Operator. Look, I’d really like to thank our shareholders and key business partners for their, you know, ongoing support of Onity. I also want to, you know, thank and recognize our board of directors and our global business team for their hard work and commitment to our success in delivering a terrific 2025. I look forward to updating you on our progress in our next earnings call. Thank you so much for joining.

Conference Call Operator: Thank you. This brings us to the end of today’s meeting. We appreciate your time and participation. You may now disconnect.