Rithm Capital Corp.

08/04/2026 | Press release | Distributed by Public on 08/04/2026 15:25

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations (the "MD&A") should be read in conjunction with the unaudited consolidated financial statements and notes thereto, and with Part II, Item 1A., "Risk Factors" of this report and Part I, Item 1A. "Risk Factors" of the 2025 Form 10-K.
The MD&A is intended to provide information relevant to an assessment of our financial condition and results of operations, including the quality and variability of our earnings and cash flows; discuss material events, trends and uncertainties known to management that are reasonably likely to affect future results or financial condition; and provide context for the financial statements and other data that management believes to be helpful to an understanding of our business from management's perspective.
COMPANY OVERVIEW
Rithm Capital is a global alternative asset manager focused on real estate, credit and financial services. We are a Delaware corporation and currently operate as an internally managed REIT.
We seek to generate long-term value for our investors by leveraging our investment expertise and operating capabilities to identify, acquire, manage and enhance the value of real estate-related and other financial assets. We operate an integrated platform, spanning asset-based finance, residential and CRE lending, CRE ownership and investment, MSRs and structured credit, that combines operating companies, investment portfolios and asset management capabilities across the residential mortgage, real estate and credit markets. Headquartered in New York City, Rithm Capital has a global presence with offices in London, Hong Kong, Tokyo, Toronto and Abu Dhabi.
As of June 30, 2026, we conducted our business through the following segments: (i) Origination and Servicing, (ii) Residential Transitional Lending, (iii) Asset Management, (iv) Investment Portfolio and (v) Commercial Real Estate. During the first quarter of 2026, the Company revised the composition of its reportable segments to include a new Commercial Real Estate segment, and prior-period segment information has been recast to conform to the current-period presentation.
Our Origination and Servicing segment operates through our wholly owned subsidiaries, Newrez and New Residential Mortgage LLC ("NRM"). Our residential mortgage origination business sources and originates loans through four channels: Direct to Consumer, Retail/Joint Venture, Wholesale and Correspondent.
Our servicing platform complements its origination business and provides performing and special servicing capabilities to its subsidiaries and third-party clients. NRM and Newrez are licensed or otherwise eligible to service residential mortgage loans in all states within the U.S. and the District of Columbia. NRM and Newrez are also approved to service mortgage loans on behalf of investors, including Fannie Mae and Freddie Mac, and in the case of Newrez, Government National Mortgage Association ("Ginnie Mae," collectively with the GSEs, the "Agencies" and each of Fannie Mae, Freddie Mac and Ginnie Mae, an "Agency"). Newrez is also eligible to perform servicing on behalf of other servicers as a subservicer.
Newrez sells substantially all of the mortgage loans it originates into the secondary market. Newrez securitizes loans into RMBS through the Agencies. Loans that do not conform to the guidelines of the Agencies, the Federal Housing Administration ("FHA"), the U.S. Department of Agriculture (the "USDA") or the Department of Veterans Affairs (the "VA") (for Ginnie Mae mortgage-backed securitizations) are sold to private investors and mortgage conduits. Newrez generally retains the right to service the underlying residential mortgage loans sold and/or securitized by Newrez. NRM and Newrez are required to conduct aspects of their operations in accordance with applicable policies and guidelines of such Agencies. In addition, to origination and servicing activities, this segment includes operations conducted through wholly owned subsidiaries that provide mortgage- and real estate-related services, including Guardian Asset Management ("Guardian"), a provider of field services and property management services, eStreet Appraisal Management LLC ("eStreet"), a provider of appraisal services, and Avenue 365 Lender Services, LLC ("Avenue 365"), a provider of title and settlement services.
Our Residential Transitional Lending segment primarily operates through our wholly owned subsidiary, Genesis, a residential transitional lender and servicer. Genesis originates and manages a portfolio of short-term, business-purpose mortgage loans used by experienced developers of and investors in residential real estate, including multifamily residential properties, to finance transitional projects, including construction, renovation and bridge financings.
Our Asset Management segment conducts its activities primarily through Rithm Asset Management LLC ("RAM") and its wholly owned subsidiaries, including Sculptor Capital Management, Inc. ("Sculptor"), Crestline and Rithm Capital Advisors
LLC ("RCA"). RCM GA Manager LLC ("RCM Manager" and, together with RCA, the "Rithm Advisers") manages Rithm Property Trust and R-HOME pursuant to management and/or advisory agreements. Through Sculptor, Crestline and the Rithm Advisers, we provide asset management services and investment products through commingled funds, separate accounts and other alternative investment vehicles, generating primarily fee-based revenues. As of June 30, 2026, we had approximately $61 billion in assets under management ("AUM").
Our Investment Portfolio segment includes investments in real estate-related assets and operating businesses across the residential mortgage and real estate lifecycle. These investments primarily consist of residential mortgage loans, SFR properties, consumer loans, non-Agency securities, Excess MSRs and servicer advance investments, which are held on the Company's consolidated balance sheets and generate income primarily through interest income, rental revenue and other investment portfolio revenues.
Our Commercial Real Estate segment includes the ownership, operation and management of a portfolio of CRE assets, primarily Class A office properties located in New York City and San Francisco. This segment reflects our expansion into CRE equity ownership and operations, including the acquisition of Elecor in December 2025. We manage these assets as part of our broader CRE platform, generating revenues primarily from rental revenue and other property-related revenues. In April 2026, the Company announced the rebranding of the Paramount Group platform to Elecor Properties.
For additional information regarding our investment guidelines, see Part I, Item 1. Business-"Investment Guidelines" of the 2025 Form 10-K.
In executing our strategy, from time to time, we explore, and will continue to explore, various opportunities to create value for our shareholders, which may include acquisitions and dispositions of assets, financing transactions (including equity or debt offerings by one or more of our subsidiaries), business combinations, a change in our tax status, spin-off transactions or other similar transactions. Among other opportunities, we believe there are additional growth opportunities in the direct lending, insurance, private equity and infrastructure spaces. Each of the potential transactions described above is subject to market conditions, regulatory considerations and other factors. There can be no assurances as to the timing of any such transaction or that a transaction will be completed at all.
BOOK VALUE PER COMMON SHARE
The following table summarizes the calculation of book value per common share:
($ in thousands, except per share amounts) June 30,
2026 		March 31,
2026
December 31,
2025
September 30,
2025
June 30,
2025
Total equity $ 9,051,414 $ 9,144,157 $ 8,940,407 $ 8,612,685 $ 8,059,209
Less: Preferred Stock Series A, B, C, D, E and F 1,632,915 1,632,915 1,390,790 1,390,790 1,207,254
Less: Non-controlling interests of consolidated subsidiaries 534,552 534,080 509,920 114,168 110,826
Total equity attributable to common stock $ 6,883,947 $ 6,977,162 $ 7,039,697 $ 7,107,727 $ 6,741,129
Common stock outstanding 558,407,031 557,902,002 555,880,947 554,196,670 530,292,171
Book Value per Common Share $ 12.33 $ 12.51 $ 12.66 $ 12.83 $ 12.71
Refer to Item 3. "Quantitative and Qualitative Disclosures About Market Risk" for a discussion of interest rate risk and its impact on fair value.
MARKET CONSIDERATIONS
Summary
During the second quarter of 2026, macroeconomic conditions reflected persistent inflation, an easing in labor force participation and continued volatility in energy prices and interest rates amid the ongoing conflict with Iran. The Federal Reserve maintained the federal funds target range at 3.50%-3.75% during its April and June 2026 meetings, with the June meeting marking the first under new Federal Reserve Chair Kevin Warsh, whose accompanying Summary of Economic Projections signaled a more hawkish policy stance and the potential for a rate increase later in 2026, a reversal from the cutting-cycle expectations that had prevailed as recently as the first quarter; however, in its July meeting, the Federal Reserve continued to maintain the current target range.
Headline inflation increased further during the quarter, primarily reflecting higher energy prices, even as West Texas Intermediate crude oil prices, which had been up as much as 101% following the outbreak of the conflict with Iran, eased to a gain of approximately 70% by the end of the second quarter as ceasefire efforts progressed, though that truce showed signs of strain by quarter-end. Core inflation measures were roughly stable. The unemployment rate declined modestly from 4.3% in March 2026 to 4.2% in June 2026, though the improvement was driven in part by a decline in labor force participation.
Market interest rates increased further during the quarter, with the 10-year Treasury yield rising 14 basis points to 4.44%, while market expectations shifted to reflect the possibility of a rate increase later in 2026. Equity markets rallied during the quarter, with the S&P 500 gaining 14.9% and recovering from the prior quarter's decline, driven substantially by technology and AI-related strength.
Inflation
Inflation increased further during the second quarter of 2026, primarily reflecting higher energy prices amid the ongoing conflict with Iran. Consumer Price Index ("CPI") inflation rose from 3.3% in March 2026 to 3.5% in June 2026, driven in part by an increase in energy prices from 12.5% in March 2026 to 15.7% in June 2026 on a year-over-year basis.
Core CPI, which excludes food and energy, remained essentially flat at 2.6% in June 2026. Core Personal Consumption Expenditures, the Federal Reserve's preferred measure of underlying inflation, increased 3.3% in June 2026 compared to the prior-year period. Other inflation indicators showed further increases, with producer price inflation rising to 5.5% in June 2026 from 4.3% in March 2026, and import prices increasing 7.1% over the 12 months ending June 30, 2026, compared to 2.3% over the 12 months ending March 31, 2026.
Treasury Yields
Treasury yields increased further during the second quarter of 2026. The 10-year Treasury yield rose 14 basis points to 4.44% from 4.30% at the end of March 2026. Shorter-term yields increased more significantly, with the 2-year Treasury yield rising 35 basis points to 4.14%. As a result, the yield curve flattened further, with the spread between 2-year and 10-year Treasury yields narrowing from 51 basis points to 30 basis points over the quarter. This shift reflects the more hawkish policy outlook communicated by the Federal Reserve following the change in its leadership.
Labor Markets
Labor market conditions continued to stabilize during the second quarter of 2026, though signals were mixed. The unemployment rate declined by 0.1 percentage points from 4.3% in March 2026 to 4.2% in June 2026, aided in part by a decline in labor force participation. Job growth accelerated during the quarter, with non-farm payrolls increasing by an average of 111,000 per month, compared to an average of 73,000 per month during the first quarter of 2026. However, initial unemployment insurance claims increased, averaging 222,000 per week during the second quarter of 2026, compared to 209,000 per week in the prior quarter.
Housing Market
Housing market activity was mixed during the second quarter of 2026. Existing home sales rose modestly to an annualized rate of 4.09 million, compared to 4.01 million in the first quarter of 2026, though sales remained rangebound amid still-elevated mortgage rates. New home sales declined to an annualized rate of approximately 628,000 in the second quarter of 2026, compared to approximately 659,000 in the first quarter of 2026. Home price growth increased modestly, with the median resale price rising 1.8% year-over-year in June 2026, compared to 1.5% in March 2026. Mortgage rates increased further during the quarter, with the 30-year fixed rate rising to 6.29% from 6.07% at the end of March 2026.
A policy development affecting certain housing-related sectors was also resolved during the quarter. The 21st Century ROAD to Housing Act, which restricts large institutional investors from purchasing existing single-family homes, was enacted into law on July 11, 2026. The final legislation removed the seven-year forced-disposition requirement for build-to-rent properties that had been included in earlier drafts and instead provides an unconditional exception for build-to-rent and other newly constructed rental programs.
Commercial Real Estate
The U.S. CRE market moved through the second quarter of 2026 with improving fundamentals in several sectors, even as the interest rate backdrop grew more uncertain. Following the change in Federal Reserve leadership, the Federal Open Market Committee shifted from signaling further rate cuts to a notably more hawkish posture, and recent commentary from officials,
combined with inflation running above target, has introduced the possibility of a rate increase later this year-a reversal from the cutting-cycle expectations that prevailed as recently as the first quarter; however, in its July meeting, the Federal Reserve continued to maintain the current target range. Longer-term rates moved higher as geopolitical developments affecting energy prices added further inflation risk. Despite this, capital has continued to flow into the sector, with underwriting simply reflecting a more disciplined, higher-for-longer rate environment rather than a retreat from CRE broadly.
The economic conditions discussed above influence our investment strategy and results.
The following table summarizes the change in U.S. gross domestic product ("GDP") estimates (annualized rate) according to the U.S. Bureau of Economic Analysis:
Three Months Ended
June 30,
2026 		March 31,
2026 		December 31,
2025 		September 30,
2025 		June 30,
2025
Real GDP 1.5 % 2.1 % 0.5 % 4.4 % 3.8 %
The following table summarizes the annualized U.S. unemployment rate according to the U.S. Department of Labor:
June 30,
2026 		March 31,
2026 		December 31,
2025 		September 30,
2025 		June 30,
2025
Unemployment rate 4.2 % 4.3 % 4.4 % 4.4 % 4.1 %
The following table summarizes the annualized 10-year U.S. Treasury rate according to the Federal Reserve and the 30-year fixed mortgage rate according to Freddie Mac:
June 30,
2026 		March 31,
2026 		December 31,
2025 		September 30,
2025 		June 30,
2025
10-year U.S. Treasury rate 4.4 % 4.3 % 4.2 % 4.2 % 4.2 %
30-year fixed mortgage rate 6.3 % 6.1 % 6.2 % 6.3 % 6.8 %
We believe the estimates and assumptions underlying our consolidated financial statements are reasonable and supportable based on the information available as of June 30, 2026; however, uncertainty related to market volatility, the path of the federal funds rate, various regional conflicts and global trade and fiscal policies makes any estimates and assumptions as of June 30, 2026, inherently less certain than they would be absent the current environment. Actual results may materially differ from those estimates. Market volatility, inflationary pressures and government policies (monetary, fiscal, trade and immigration) and their impact on the current financial, economic and capital markets environment and future developments in these and other areas present uncertainty and risk with respect to our financial condition, results of operations, liquidity and ability to pay distributions.
OUR PORTFOLIO
Our portfolio, as of June 30, 2026 and December 31, 2025, is separated into the Origination and Servicing, Residential Transitional Lending, Asset Management, Investment Portfolio and Commercial Real Estate segments, as described in more detail below (dollars in thousands).
Origination and Servicing Residential Transitional Lending Asset Management Investment Portfolio Commercial Real Estate Corporate Category Total
June 30, 2026
Investments(A)
$ 17,835,593 $ 3,833,824 $ 1,119,524 $ 4,201,808 $ 5,105,831 $ - $ 32,096,580
Cash and cash equivalents(A)
1,055,134 59,084 237,477 19,395 170,931 122,477 1,664,498
Restricted cash(A)
174,481 69,755 10,194 34,186 263,412 238,182 790,210
Other assets(A)
7,795,668 163,300 1,540,186 2,474,347 343,013 11,754 12,328,268
Goodwill 29,468 55,731 231,444 - - - 316,643
Assets of consolidated entities(A)
- 878,836 1,232,433 4,801,400 - - 6,912,669
Total Assets $ 26,890,344 $ 5,060,530 $ 4,371,258 $ 11,531,136 $ 5,883,187 $ 372,413 $ 54,108,868
Debt(A)
$ 15,341,262 $ 3,219,710 $ 440,685 $ 5,191,877 $ 3,996,761 $ 1,753,290 $ 29,943,585
Other liabilities(A)
6,046,761 57,676 1,401,149 470,385 276,731 489,724 8,742,426
Liabilities of consolidated entities(A)
- 765,735 980,804 4,227,598 - - 5,974,137
Total Liabilities 21,388,023 4,043,121 2,822,638 9,889,860 4,273,492 2,243,014 44,660,148
Redeemable Non-controlling Interests of Consolidated Subsidiaries - - 154,413 - - 242,893 397,306
Total Stockholders' Equity 5,502,321 1,017,409 1,394,207 1,641,276 1,609,695 (2,113,494) 9,051,414
Non-controlling interests in equity of consolidated subsidiaries 9,780 - 74,834 59,020 390,918 - 534,552
Stockholders' Equity in Rithm Capital Corp. $ 5,492,541 $ 1,017,409 $ 1,319,373 $ 1,582,256 $ 1,218,777 $ (2,113,494) $ 8,516,862
Investments in Equity Method Investees $ 27,609 $ 29,135 $ 246,759 $ 326,288 $ 183,082 $ - $ 812,873
December 31, 2025
Investments(A)
$ 18,308,310 $ 2,706,044 $ 906,454 $ 4,912,402 $ 5,156,248 $ - $ 31,989,458
Debt(A)
$ 16,843,333 $ 2,219,808 $ 425,445 $ 5,689,351 $ 3,952,452 $ 1,258,271 $ 30,388,660
(A)The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs" and each, a "VIE"), including funds and collateralized financing entities ("CFEs" and each, a "CFE") that are presented separately within assets and liabilities of consolidated entities. VIE assets can only be used to settle obligations and liabilities of the VIEs. VIE creditors do not have recourse to Rithm Capital Corp.
Origination and Servicing
The Origination and Servicing segment is Rithm Capital's largest business by assets, equity and earnings contribution. The segment operates through our wholly owned subsidiaries Newrez and NRM, through which, we originate and service residential mortgage loans across multiple distribution channels and product types. As of March 31, 2026, the latest period for which servicing rankings are available, Newrez ranked among the top five lenders in the U.S. based on total funded volume of originations and the top five servicers in the U.S. based on total unpaid principal balance ("UPB") serviced, according to Inside Mortgage Finance.
Revenue in the Origination and Servicing segment is generated primarily from residential mortgage loan originations and servicing. Origination revenues include gains on the sale of residential mortgage loans and the value of MSRs retained upon loan transfer. Servicing revenues consist primarily of contractual servicing fees and ancillary servicing income. Profitability varies by origination channel, with Direct to Consumer originations generally generating higher margins and Correspondent originations generally generating lower margins.
We sell conforming loans to the Agencies and securitize non-qualified residential mortgage ("Non-QM") loans. Loans are typically funded at origination using warehouse financing facilities, which are repaid upon loan sale or securitization.
We operate a multi-channel residential mortgage origination platform that offers both purchase and refinance loan products. Our origination activities are conducted through several channels, including: (i) a Retail channel, which originates loans through loan officers and joint venture relationships; (ii) a Direct to Consumer channel, which offers purchase, refinance and closed-end second lien loans to eligible new and existing servicing customers; and (iii) Wholesale and Correspondent channels, through which we purchase loans originated by mortgage brokers, community banks, credit unions and other third-party originators that meet our underwriting and eligibility standards.
Our loan offerings include residential mortgage loans that conform to the underwriting standards of the GSEs and Ginnie Mae, government-insured residential mortgage loans insured by the FHA, the VA and the USDA, Non-QM loans originated through our SMART Loan Series and certain non-Agency loan products. Our Non-QM loan offerings are designed for borrowers who do not meet the underwriting criteria applicable to Agency loans but satisfy our credit and risk standards. We also originate closed-end second lien home equity loans for existing customers, which allow borrowers to access home equity without refinancing their existing first-lien mortgage.
Our origination platform funded approximately $15.9 billion and $15.5 billion of residential mortgage loans during the three months ended June 30, 2026 and March 31, 2026, respectively, and $31.4 billion and $28.1 billion during the six months ended June 30, 2026 and 2025, respectively. The table below provides selected operating statistics by channel and product for our Origination and Servicing segment:
UPB
Three Months Ended Six Months Ended June 30,
(in millions) June 30, 2026 % of Total March 31, 2026 % of Total 2026 % of Total 2025 % of Total QoQ Change YoY Change
Production by Channel:
Direct to Consumer $ 2,398 15% $ 2,473 16% $ 4,871 16% $ 2,772 10% $ (75) $ 2,099
Retail/Joint Venture 821 5% 712 5% 1,533 5% 1,378 5% 109 155
Wholesale 3,143 20% 2,562 17% 5,705 18% 4,119 15% 581 1,586
Correspondent 9,540 60% 9,726 62% 19,266 61% 19,858 70% (186) (592)
Total Production by Channel $ 15,902 100% $ 15,473 100% $ 31,375 100% $ 28,127 100% $ 429 $ 3,248
Production by Product:
Agency $ 7,796 49% $ 8,232 54% $ 16,028 51% $ 12,443 44% $ (436) $ 3,585
Government 6,313 40% 5,796 37% 12,109 39% 13,773 49% 517 (1,664)
Non-QM 1,282 8% 1,076 7% 2,358 7% 1,026 4% 206 1,332
Non-Agency 481 3% 350 2% 831 3% 819 3% 131 12
Other 30 -% 19 -% 49 -% 66 -% 11 (17)
Total Production by Product $ 15,902 100% $ 15,473 100% $ 31,375 100% $ 28,127 100% $ 429 $ 3,248
% Purchase 63 % 51 % 57 % 73 %
% Refinance 37 % 49 % 43 % 27 %
We generally service the residential mortgage loans that we originate, which provides ongoing borrower engagement throughout the life of the loan. Our servicing operations are organized into performing and special servicing divisions. The performing servicing division services performing Agency and government-insured loans, while the special servicing division services delinquent Agency, government-insured and non-Agency loans on behalf of loan owners. The special servicing division also provides servicing for third-party portfolios owned by unaffiliated investors.
The table below provides the mix of Newrez's serviced assets portfolio between subserviced performing servicing (labeled as "Performing Servicing") and subserviced non-performing or special servicing (labeled as "Special Servicing"). Third-party servicing includes loan portfolios serviced on behalf of Rithm Capital or its subsidiaries and non-affiliated third parties for the periods presented.
UPB as of
(in millions) June 30,
2026 		March 31,
2026 		June 30,
2025 		QoQ Change YoY Change
Performing Servicing:
MSR-owned assets $ 548,963 $ 526,731 $ 523,174 $ 22,232 $ 25,789
Residential whole loans 2,233 2,993 2,909 (760) (676)
Total Performing Servicing 551,196 529,724 526,083 21,472 25,113
Special Servicing:
MSR-owned assets 19,046 15,805 12,683 3,241 6,363
Residential whole loans 12,436 11,158 7,834 1,278 4,602
Third-party 253,732 242,591 260,722 11,141 (6,990)
Total Special Servicing 285,214 269,554 281,239 15,660 3,975
Total Newrez Servicing 836,410 799,278 807,322 37,132 29,088
Serviced by Third-Parties:
MSR-owned assets 28,810 51,093 56,866 (22,283) (28,056)
Total Servicing Portfolio $ 865,220 $ 850,371 $ 864,188 $ 14,849 $ 1,032
Agency Servicing:
MSR-owned assets $ 375,046 $ 374,605 $ 380,863 $ 441 $ (5,817)
Residential whole loans - - 71 - (71)
Third-party 29,904 29,638 72,292 266 (42,388)
Total Agency Servicing 404,950 404,243 453,226 707 (48,276)
Government-Insured Servicing:
MSR-owned assets 154,065 152,626 143,313 1,439 10,752
Third-party 2,754 2,799 3,042 (45) (288)
Total Government-Insured Servicing 156,819 155,425 146,355 1,394 10,464
Non-Agency (Private Label) Servicing:
MSR-owned assets 67,708 66,398 68,547 1,310 (839)
Residential whole loans 14,669 14,151 10,672 518 3,997
Third-party 221,074 210,154 185,388 10,920 35,686
Total Non-Agency (Private Label) Servicing 303,451 290,703 264,607 12,748 38,844
Total Servicing Portfolio $ 865,220 $ 850,371 $ 864,188 $ 14,849 $ 1,032
As of June 30, 2026, our performing servicing division serviced approximately $551.2 billion UPB of loans, our special servicing division serviced approximately $285.2 billion UPB of loans and third-party servicers serviced approximately $28.8 billion UPB of loans, for a total servicing portfolio of approximately $865.2 billion UPB. This represented an increase of approximately $14.8 billion as compared to March 31, 2026, primarily reflecting new client acquisitions and loan production activity, partially offset by scheduled and voluntary loan prepayments, and an increase of $1.0 billion as compared to June 30, 2025, primarily driven by new client acquisitions and loan production activity, partially offset by loan paydowns.
As of June 30, 2026, Newrez serviced approximately 4.0 million customers. The aggregate UPB of loans serviced by Newrez was approximately $836.4 billion, $799.3 billion and $807.3 billion as of June 30, 2026, March 31, 2026 and June 30, 2025, respectively.
As of June 30, 2026, approximately 95.2% of the UPB of residential mortgage loans underlying our owned MSRs was serviced by Newrez. In addition to MSRs serviced by Newrez, we engage third-party subservicers, including PHH and Valon, to perform servicing activities with respect to a portion of the residential mortgage loans underlying our MSRs and MSR financing receivables. As of June 30, 2026, loans serviced by these third-party subservicers had an aggregate UPB of approximately $28.8 billion, representing approximately 4.8% of our total servicing portfolio.
Our servicing operations also include subservicing activities performed for third-party clients. These services include performing loan servicing, special servicing and recovery services for deeply delinquent loans. Special servicing generally involves higher-touch borrower engagement, more frequent borrower outreach and higher staffing requirements than performing loan servicing, and accordingly results in higher subservicing fees. Subservicing revenues generally consist of tiered servicing fees based on loan delinquency status and performance metrics, as well as ancillary servicing income.
An MSR represents the right to service a pool of residential mortgage loans in exchange for a portion of the interest payments made by borrowers on the underlying loans, together with ancillary servicing income and custodial interest. This servicing right is recognized as an asset on the Company's consolidated balance sheets. An MSR generally consists of two components: a base servicing fee, which compensates the servicer for performing contractual servicing obligations (including servicing advance obligations), and an Excess MSR, which represents the portion of the servicing fee in excess of the base fee.
We finance our investments in MSRs and MSR financing receivables primarily through short- and medium-term bank facilities and capital markets financings. These borrowings are either recourse or non-recourse obligations and bear interest at either fixed or variable rates based on a specified margin over the Secured Overnight Financing Rate ("SOFR"). Capital markets financings are typically subject to collateral coverage requirements, which are calculated as the ratio of the outstanding note balance to the market value of the underlying collateral. The market value of the collateral is generally updated periodically, and if the collateral coverage ratio exceeds a specified threshold-generally 90%- we may be required to contribute additional collateral, repay a portion of the outstanding debt or post cash to restore compliance. The difference between the applicable collateral coverage ratio and the related trigger level is commonly referred to as a "margin holiday."
Under applicable servicing agreements, servicers are generally required to advance funds on behalf of borrowers for certain scheduled payments unless the servicer determines in good faith that such advances would not be ultimately recoverable from the proceeds of the related mortgage loan or the underlying property. Servicing advances generally fall into the following categories:
•Principal and interest advances, which represent payments advanced by the servicer to cover scheduled principal and interest payments not paid timely by the borrower;
•Escrow advances, which represent payments advanced by the servicer to third parties for real estate taxes and insurance premiums that have not been paid by the borrower; and
•Foreclosure advances, which represent payments made by the servicer for costs incurred in connection with foreclosure proceedings, property preservation and the disposition of mortgaged properties, including legal and professional fees.
Servicer advances are intended to provide liquidity to the underlying securitization structures rather than credit enhancement. These advances are generally senior in the cash flow waterfall and are typically reimbursed from collections on the related mortgage loan pool, borrower payments or proceeds from the liquidation of the underlying property, referred to as loan-level recoveries. The Company's right to reimbursement for such advances is reflected as an asset on our consolidated balance sheets within servicer advances receivable.
Prepayments made by borrowers on residential mortgage loans underlying securitizations may generally be used to fund principal and interest advance obligations. Servicing agreements with Fannie Mae, Ginnie Mae and certain private-label securitizations ("PLS") typically provide for payment waterfalls that permit servicers to apply collections received from prepayments to satisfy advance requirements. This ability reflects timing differences between the servicer's obligation to remit scheduled payments and the timing of remittance of borrower prepayments. As a result, servicers may effectively use prepayment proceeds to fund advance obligations. In certain circumstances, if advances are determined to be non-recoverable or are not recovered upon loan payoff or property liquidation, the servicer may be entitled to reimburse itself from custodial accounts holding collections on serviced loans, commonly referred to as a "general collections backstop."
We fund servicing advances primarily through a combination of cash on hand, borrower prepayments and secured financing arrangements. Servicer advances are financed primarily through short- and medium-term, non-recourse committed facilities that are generally not subject to margin calls and bear interest at either fixed or variable rates based on a margin over SOFR. These facilities generally have maturities of less than one year.
The table below summarizes our MSRs and MSR financing receivables as of June 30, 2026:
(dollars in billions) Current UPB Weighted Average MSR (bps) Carrying Value
GSE(A)
$ 375.0 29 $ 6.5
Non-Agency(A)
67.7 41 1.0
Ginnie Mae 154.1 48 3.6
Total / Weighted Average $ 596.8 36 $ 11.1
(A)Includes GSE and non-Agency MSRs of $20.5 billion and $8.3 billion underlying UPB, respectively, serviced by third-party subservicers.
The following tables summarize the collateral characteristics of the residential mortgage loans underlying our MSRs and MSR financing receivables as of June 30, 2026 (dollars in thousands):
Collateral Characteristics
Current Carrying Amount Current Principal Balance Number of Loans
WA FICO Score(B)
WA Coupon WA Maturity (Months) Average Loan Age (Months)
Adjustable Rate Mortgage %(C)
Three Month Average CPR(D)
Three Month Average CRR(E)
Three Month Average CDR(F)
Three Month Average Recapture Rate
GSE(A)
$ 6,483,683 $ 375,046,071 1,895,719 753 4.4 % 267 69 0.9 % 7.2 % 7.2 % - % 15.2 %
Non-Agency(A)
981,266 67,707,849 563,277 679 4.6 % 270 208 7.3 % 9.0 % 7.8 % 1.4 % 3.6 %
Ginnie Mae 3,626,534 154,064,973 605,515 683 4.5 % 311 47 0.3 % 7.6 % 7.2 % 0.4 % 36.7 %
Total $ 11,091,483 $ 596,818,893 3,064,511 727 4.5 % 279 79 1.5 % 7.5 % 7.2 % 0.3 % 19.4 %
Collateral Characteristics
Delinquency Loans in Foreclosure REO Loans in Bankruptcy
90+ Days(G)
GSE(A)
0.3 % 0.2 % - % 0.2 %
Non-Agency(A)
2.3 % 4.6 % 0.6 % 2.4 %
Ginnie Mae 2.5 % 1.5 % 0.1 % 0.8 %
Weighted Average 1.1 % 1.0 % 0.1 % 0.6 %
(A)Includes GSE and non-Agency MSRs of $20.5 billion and $8.3 billion underlying UPB, respectively, serviced by third-party subservicers.
(B)Based on the weighted average ("WA") of information provided by the loan servicer on a monthly basis. The loan servicer generally updates the Fair Isaac Corporation ("FICO") score when loans are refinanced or become delinquent.
(C)Represents the percentage of the total principal balance of the pool that corresponds to adjustable rate mortgages.
(D)The conditional prepayment rate ("CPR") represents the annualized rate of the prepayments during the quarter as a percentage of the total principal balance of the pool.
(E)The conditional repayment rate ("CRR") represents the annualized rate of the voluntary prepayments during the quarter as a percentage of the total principal balance of the pool.
(F)The conditional default rate ("CDR") represents the annualized rate of the involuntary prepayments (defaults) during the quarter as a percentage of the total principal balance of the pool.
(G)Represents the percentage of the total principal balance of the pool that corresponds to loans that are delinquent by 90 or more days.
See Note 5 to our consolidated financial statements for additional information regarding our MSRs, MSR financing receivables and servicer advances receivable, and Note 17 for additional information regarding the related financing arrangements.
Hedging Activities
Government and Government-Backed Securities
Our Origination and Servicing segment also includes investments in Agency RMBS and U.S. Treasury securities, which are primarily held to hedge interest rate exposure associated with our MSR portfolio and to support REIT asset and income requirements. These investments are financed primarily through short-term repurchase agreements.
The following table summarizes our Agency RMBS and U.S. Treasury securities portfolio as of and for the six months ended June 30, 2026 (dollars in thousands):
Gross Unrealized
Asset Type Outstanding Face Amount Amortized Cost Basis Gains Losses
Carrying
Value(A)
Count Weighted Average Life (Years)
3-Month CPR(B)
Outstanding Repurchase Agreements
Agency RMBS $ 4,950,720 $ 4,839,269 $ 61,650 $ (12,982) $ 4,887,937 23 7.3 9.9 % $ 4,893,090
Treasury securities 25,000 24,932 - - 24,932 1 0.1 N/A -
Total / Weighted Average $ 4,975,720 $ 4,864,201 $ 61,650 $ (12,982) $ 4,912,869 24 7.3 $ 4,893,090
(A)Agency RMBS are held at fair value under the fair value option election. Treasury securities include $24.9 million of short-term Treasury bills held-to-maturity at amortized cost.
(B)Represents the annualized rate of the prepayments during the quarter as a percentage of the total amortized cost basis.
The following table summarizes the net interest spread of our government and government-backed securities portfolio as of June 30, 2026:
Net Interest Spread(A)
Weighted average asset yield 5.0 %
Weighted average funding cost 3.9 %
Net Interest Spread 1.1 %
(A)The government and government-backed securities portfolio consists of 100% fixed-rate securities.
To-Be-Announced Forward Contract Positions ("TBAs")
In addition to holding government and government-backed securities, we use other hedging instruments, primarily TBAs, to economically hedge interest rate exposure associated with our MSR portfolio. The following table summarizes the notional and carrying value amounts of our TBAs:
June 30, 2026 December 31, 2025
Notional $ 18,061,114 $ 21,568,758
Carrying Value:
TBAs - asset 13,063 6,070
TBAs - liability 31,898 47,001
Ancillary Mortgage Services
In addition to origination and servicing activities, this segment includes operations conducted through subsidiaries that provide mortgage- and real estate-related services, including Guardian (property preservation and field services), eStreet (appraisal services) and Avenue 365 (title and settlement services).
Residential Transitional Lending
The Residential Transitional Lending segment operates through Genesis, a wholly owned Rithm subsidiary that originates and manages short-term, business-purpose mortgage loans secured by residential and multifamily real estate. Genesis is the second-largest U.S. residential transitional lender based on market data and management's estimates of total origination volume.
The originated loans are used by real estate investors and developers to finance transitional projects, including:
•Construction - ground-up construction, including mid-construction refinancings and acquisitions of ground-up construction projects;
•Renovation - acquisition or refinance of properties requiring renovation, excluding ground-up construction; and
•Bridge - financing for purchases, refinances of completed projects or rental properties.
We currently fund construction, renovation and bridge originations primarily through a warehouse credit facility and revolving securitization structures.
Collateral and underwriting. The loans are generally secured by a mortgage or first deed of trust on the underlying real estate. Commitment sizing is determined under our lending policies and is typically based on (i) loan-to-cost ("LTC") or loan-to-after-repair value ("LTARV") for construction and renovation loans and (ii) loan-to-value ("LTV") for bridge loans. LTC and
LTARV are generally calculated as the total commitment at origination divided by the total estimated project cost or the value of the property after completion of renovations, as applicable. LTV is generally calculated as the total commitment at origination divided by the "as-complete" appraisal. At origination, we typically fund a portion of the commitment at closing and hold back the remaining amount for future draws, subject to inspections, progress reporting and other conditions in the loan documents. These ratios do not reflect interim activity such as construction draws, interest capitalization or partial repayments.
Credit support. Loans are typically supported by a corporate and/or personal guarantee, which may be further secured by a pledge of the guarantor's interests in the borrower and/or other real estate or assets owned by the guarantor.
Loan economics and terms. Commitments are generally interest-only and bear a variable rate based on SOFR plus a spread (currently ranging from 4% to 15%), with initial terms typically ranging from 6 to 120 months, depending on project size and expected completion timeline. We may extend loans based on our assessment of project status and other underwriting considerations. As of June 30, 2026, the average commitment size was $5.0 million, and the weighted average remaining term to contractual maturity was 13.8 months.
We earn loan origination fees ("points"), which are generally based on the loan term, borrower profile and collateral characteristics. As of June 30, 2026, we earned an average of 1.2% of total commitment at origination. We also may earn past-due fees, cost reimbursements (including for closing, collection and inspection-related expenses), extension fees for renewals or extensions, and amendment fees for loan modifications. Renewals and extensions are generally evaluated under our then-current underwriting criteria, including applicable LTV limitations based on the origination appraisal or an updated appraisal when required. Origination and renewal fees are recognized as income at origination as residential transition loans ("RTLs" and each, an "RTL") are measured at fair value.
Borrowers and use of proceeds. Borrowers are typically residential real estate investors and developers. Proceeds are generally used to fund construction, renovation, development, acquisition, refinancing and, to a lesser extent, mixed-use projects. Loans are typically structured with partial funding at closing and additional advances disbursed upon completion of agreed construction milestones.
A significant source of new originations has historically been repeat business and referrals. To the extent we originate loans for existing borrowers, these "retention" originations may have lower acquisition costs than originations to new borrowers, which can positively affect profitability.
The following table summarizes certain information related to our portfolio of loans included in the Residential Transitional Lending segment (dollars in thousands):
Three Months Ended Six Months Ended June 30,
June 30, 2026 March 31, 2026 2026 2025
Loans originated(A)
$ 1,885,460 $ 1,607,882 $ 3,493,342 $ 2,140,592
Loans repaid $ 495,325 $ 652,248 $ 1,147,573 $ 763,515
Number of loans originated 516 487 1,003 777
As of
June 30, 2026 December 31, 2025
Carrying value(B)
$ 5,071,127 $ 3,914,674
UPB(B)
$ 5,058,908 $ 3,886,696
Total commitment $ 7,391,214 $ 5,791,861
Average total commitment(C)
$ 3,915 $ 3,571
Weighted average contractual interest(D)
8.8 % 8.9 %
(A)Based on total commitment at origination.
(B)Includes carrying value and UPB of residential transition loans of consolidated entities of approximately $1.2 billion as of June 30, 2026 and December 31, 2025.
(C)Represents the calculated amount of total commitment divided by the total number of loans in the Residential Transitional Lending segment.
(D)Excludes loan fees and weighted by current UPB.
The following table summarizes the loan purpose of our portfolio of loans included in the Residential Transitional Lending segment (dollars in thousands):
June 30, 2026
Number of
Loans 		% of Loans Total Commitment % of Total Commitment
Weighted Average Committed Loan Balance to Value(A)
Construction 610 32.3 % $ 3,890,925 52.7 %
73.2% / 62.1%
Bridge 605 32.0 % 2,611,214 35.3 %
68.0%
Renovation 673 35.7 % 889,075 12.0 %
82.0% / 67.2%
Total 1,888 100.0 % $ 7,391,214 100.0 % N/A
(A)Weighted by commitment LTV for bridge loans and LTC and LTARV for construction and renovation loans.
See Note 10 to our consolidated financial statements for additional information, including a summary of activity related to residential transition loans from December 31, 2025 to June 30, 2026.
Asset Management
The Asset Management segment provides investment management and advisory services across a range of alternative investment strategies, including private credit, opportunistic credit, fund liquidity solutions, real estate and insurance-related strategies. These activities are conducted primarily through RAM. RAM operates its asset management activities through its wholly owned subsidiaries, including Sculptor, Crestline and the Rithm Advisers, which serve as investment advisers to a range of investment vehicles and managed accounts, including Rithm Property Trust and R-HOME, and generate primarily fee-based revenues.
As of June 30, 2026, the Asset Management segment managed approximately $61 billion in AUM, of which approximately $39 billion and $20 billion was managed by Sculptor and Crestline, respectively.
Revenues
Revenues in the Asset Management segment consist primarily of management fees and incentive fees.
Management fees are generally calculated as a percentage of AUM or invested capital, depending on the structure and governing documents of the applicable investment vehicle, and are typically earned and recognized on a quarterly basis, either in advance or in arrears. Management fees, where applicable, are generally prorated for capital inflows and redemptions during the relevant period.
Incentive fees are performance-based and are generally calculated as a percentage of investment profits attributable to fund investors, net of management fees. Incentive fee arrangements may be subject to contractual provisions such as hurdle rates, high-water marks and catch-up mechanisms, and incentive fees are typically recognized later in the life cycle of an investment vehicle or upon crystallization events. As a result, incentive fees may be uneven across reporting periods.
Period-to-period changes in Asset Management revenues are driven primarily by changes in AUM resulting from capital inflows and redemptions, investment performance, market conditions and the timing and realization of incentive fees.
Expenses
Expenses in the Asset Management segment consist primarily of compensation and benefits for investment professionals and support personnel, general, administrative and operating expenses, technology and infrastructure costs, professional fees and acquisition-related and integration expenses, where applicable.
Compensation expense may fluctuate based on headcount, compensation structure, performance-based incentives and revenue levels. Period-to-period changes in expenses may also reflect changes in AUM, investments in systems, risk management and compliance infrastructure and costs associated with launching new investment products or integrating acquired businesses.
Operating Results
Operating results for the Asset Management segment are driven by the relationship between revenue growth and expense levels, as well as the mix of management fees and incentive fees recognized during the period. Market conditions, investor sentiment and asset valuations may affect both revenues and profitability. In addition, the timing of incentive fee recognition and acquisition-related amortization and integration costs may result in variability in operating results between periods.
Operating expenses during the period primarily reflected compensation and benefits, amortization of intangible assets, and office and professional expenses.
Assets Under Management
AUM is estimated and refers to the value of assets for which Rithm Capital and its affiliates provide discretionary investment management or advisory services. AUM is generally calculated as the sum of: (i) the net asset value of managed accounts and open-ended funds or gross asset value of direct lending, real estate and real estate funds, (ii) uncalled capital commitments and (iii) par value of structured credit vehicles (e.g., collateralized loan obligations). AUM includes amounts that are not subject to management fees, incentive income or other amounts earned on AUM. AUM also includes amounts that are invested in other affiliated funds/vehicles. Rithm Capital's calculation of AUM is intended to provide a consistent and comparable measure of managed assets across its businesses; however it is not based on any specific regulatory definition and may differ from similarly titled measures presented by other asset managers and, as a result, may not be comparable.
Growth in AUM and positive investment performance generally support growth in Asset Management revenues and earnings, while adverse investment performance or sustained investor redemptions may reduce AUM and negatively affect revenues and profitability.
Key Operating Metrics
Management monitors the performance of the Asset Management segment using AUM, net capital inflows and redemptions, management fee rates, incentive fee realization and operating margins.
Investment Portfolio
Our Investment Portfolio segment primarily consists of balance sheet investments in residential mortgage loans, SFR properties, consumer loans, non-Agency securities, Excess MSRs and servicer advance investments.
Excess MSRs
Investments in Excess MSRs represent the portion of the mortgage servicing compensation that exceeds the base servicing fee. Our Excess MSR assets include our ownership interests in Excess MSRs and related recapture agreements that were acquired from, and are serviced by, Rocket Companies, Inc., as successor by merger to Mr. Cooper Group Inc.
The following tables summarize the terms of our Excess MSRs:
MSR Component(A)
Excess MSR Carrying Value
(millions)
Direct Excess MSRs
Current UPB (billions)(B)
Weighted Average MSR (bps) Weighted Average Excess MSR (bps) Interest in Excess MSR (%) June 30,
2026 		December 31, 2025
Total / Weighted Average $ 45.5 32 20
65.0% - 80.0%
$ 308.4 $ 323.6
(A)The MSR is a weighted average as of June 30, 2026 and the Excess MSR represents the difference between the weighted average MSR and the base fee (which fee remains constant).
(B)Represents Excess MSRs serviced by Rocket. We also invested in related servicer advance investments, including the base fee component of the related MSR on $11.2 billion UPB underlying these Excess MSRs.
The following tables summarize the collateral characteristics of the loans underlying our direct Excess MSRs and the Excess MSRs held in a joint venture with Sculptor non-consolidated funds as of June 30, 2026 (dollars in thousands):
Collateral Characteristics
Current Carrying Amount Current Principal Balance Number of Loans
WA FICO Score(A)
WA Coupon WA Maturity (Months) Average Loan Age (Months)
Three Month Average CPR(B)
Three Month Average CRR(C)
Three Month Average CDR(D)
Three Month Average Recapture Rate
Total / Weighted Average $ 308,393 $ 45,486,823 381,599 720 4.6 % 217 174 7.3 % 7.0 % 0.3 % 19.2 %
Collateral Characteristics
Delinquency Loans in Foreclosure REO Loans in Bankruptcy
90+ Days(E)
Weighted Average(F)
0.8 % 1.5 % 0.2 % 0.6 %
(A)Based on the weighted average of information provided by the loan servicer on a monthly basis. The loan servicer generally updates the FICO score when loans are refinanced or become delinquent.
(B)Represents the annualized rate of the prepayments during the quarter as a percentage of the total principal balance of the pool.
(C)Represents the annualized rate of the voluntary prepayments during the quarter as a percentage of the total principal balance of the pool.
(D)Represents the annualized rate of the involuntary prepayments (defaults) during the quarter as a percentage of the total principal balance of the pool.
(E)Represents the percentage of the total principal balance of the pool that corresponds to loans that are delinquent by 90 or more days.
(F)Weighted averages exclude collateral information for which collateral data was not available as of the report date.
Servicer Advance Investments
Our servicer advance investments relate to specified pools of residential mortgage loans for which we have contractually assumed the obligation to fund servicing advances. These investments include (i) the outstanding servicer advances associated with the specified pools, (ii) commitments to purchase future servicer advances and (iii) the right to receive the base servicing fee component of the related MSRs.
The following is a summary of our servicer advance investments, including the right to the base fee component of the related MSRs (dollars in thousands):
June 30, 2026 December 31, 2025
Amortized Cost Basis
Carrying Value(A)
UPB of Underlying Residential Mortgage Loans Outstanding Servicer Advances Servicer Advances to UPB of Underlying Residential Mortgage Loans
Carrying Value(A)
Servicer advance investments $ 270,494 $ 284,400 $ 11,236,200 $ 249,475 2.2 % $ 294,322
(A)Represents the fair value of the servicer advance investments, including the base fee component of the related MSRs.
The following summarizes additional information regarding our servicer advance investments and related financing, as of and for the six months ended June 30, 2026 (dollars in thousands):
Weighted Average Discount Rate
Weighted Average Life (Years)(C)
Face Amount of Secured Notes and Bonds Payable
LTV(A)
Cost of Funds(B)
Gross
Net(D)
Gross Net
Servicer advance investments(E)
6.5 % 7.4 $ 205,866 80.8 % 79.1 % 5.5 % 5.0 %
(A)Based on outstanding servicer advances, excluding purchased but unsettled servicer advances.
(B)Represents the annualized measure of the cost associated with borrowings. Gross cost of funds primarily includes interest expense and facility fees. Net cost of funds excludes facility fees.
(C)Represents the weighted average expected timing of the receipt of expected net cash flows for this investment.
(D)Ratio of face amount of borrowings to par amount of servicer advance collateral, net of any general reserve.
(E)The following table summarizes the types of advances included in servicer advance investments (dollars in thousands):
June 30, 2026
Principal and interest advances $ 42,501
Escrow advances (taxes and insurance advances) 112,011
Foreclosure advances 94,963
Total $ 249,475
Non-Agency Securities
Within our non-Agency securities portfolio, we retain and hold certain risk retention bonds from securitizations that we do not consolidate, in compliance with applicable risk retention requirements under the Dodd-Frank Act and the rules promulgated thereunder. We also hold bonds issued in connection with our consolidated PLS, which are eliminated in consolidation. The related equity value is reflected within assets of consolidated entities and liabilities of consolidated entities on our consolidated balance sheets and is excluded from the tables below. As of June 30, 2026, approximately 80.2% of our non-Agency securities portfolio consisted of bonds retained to satisfy risk retention requirements.
The following table summarizes our non-Agency securities portfolio (dollars in thousands):
As of and for the Six Months Ended June 30, 2026
December 31, 2025
Asset Type
Outstanding Face Amount(A)
Amortized Cost Basis Gross Unrealized
Carrying Value(B)
Outstanding Repurchase Agreements(C)
Carrying Value(B)
Gains Losses
Non-Agency securities $ 8,272,017 $ 759,996 $ 99,368 $ (47,670) $ 811,694 $ 1,031,364 $ 759,633
(A)The total outstanding face amount includes residual, interest only and servicing strips for which no principal payment is expected.
(B)Carrying value which is equal to the fair value for all securities.
(C)Includes repurchase agreements on non-Agency securities retained through consolidated securitizations.
The following table summarizes the characteristics of our non-Agency securities portfolio and of the collateral underlying our non-Agency securities as of June 30, 2026 (dollars in thousands):
Collateral Characteristics(A)
Outstanding Face Amount Amortized Cost Basis Carrying Value Number of Securities Weighted Average Life (Years)
Weighted Average Coupon(B)
Average Loan Age (Years)
Collateral Factor(C)
Three Month CPR(D)
Delinquency(D)
Cumulative Losses to Date
Total / weighted average
$ 8,272,017 $ 759,996 $ 811,694 659 4.1 4.9 % 13.2 0.5 10.9 % 2.8 % 0.7 %
(A)Excludes $161.8 million carrying value of non-Agency securities that are backed by assets other than residential mortgages.
(B)Excludes interest only, residual and other bonds with a carrying value of $169.7 million for which no coupon payment is expected.
(C)Represents the ratio of original UPB of loans still outstanding.
(D)Three-month average constant prepayment rate and default rates.
The following table summarizes the net interest spread of our non-Agency securities portfolio as of June 30, 2026:
Net Interest Spread(A)
Weighted average asset yield 5.9 %
Weighted average funding cost 5.1 %
Net Interest Spread 0.8 %
(A)The non-Agency securities portfolio consists of 30.3% floating rate securities and 69.7% fixed-rate securities (accounted for on an amortized cost basis).
We finance a significant portion of our non-Agency securities investments through short-term borrowings under master uncommitted repurchase agreements. These borrowings generally bear interest at rates offered by counterparties for the applicable repurchase term (for example, 30 or 60 days), typically calculated as a specified margin over SOFR. As of June 30, 2026 and December 31, 2025, we had pledged non-Agency securities, including securities retained through consolidated securitizations, with an aggregate carrying value of approximately $1.4 billion and $1.3 billion, respectively, as collateral for repurchase agreement borrowings.
A portion of the collateral securing these borrowings is subject to daily mark-to-market valuation and related margin calls. The remaining collateral generally is not subject to daily margin calls unless the collateral coverage percentage-calculated as the current carrying value of outstanding debt divided by the market value of the underlying collateral-reaches or exceeds a specified collateral trigger. The difference between the collateral coverage percentage and the collateral trigger is commonly referred to as a "margin holiday." See Note 17 to our consolidated financial statements for additional information regarding our non-Agency securities financing arrangements, including a summary of related activity from December 31, 2025 to June 30, 2026.
Residential Mortgage Loans
We accumulate our residential mortgage loan portfolio through loan originations, open-market and bulk acquisitions, and the exercise of call rights. Substantially all of these loans are serviced by Newrez.
We account for residential mortgage loans based on our strategy for each loan and whether the loan was performing or non-performing at acquisition. Acquired performing loans are loans for which, at the time of acquisition, we believe the borrower is likely to continue making payments in accordance with the contractual terms. Purchased non-performing loans are loans for which, at the time of acquisition, we believe the borrower is not likely to make payments in accordance with the contractual terms (i.e., credit-impaired).
Residential mortgage loans are reported in the following categories:
•Loans held-for-investment ("HFI"), at fair value;
•Loans held-for-sale ("HFS"), at lower of cost or fair value;
•Loans HFS, at fair value; and
•Investments of consolidated CFEs, which represent mortgage loans held by certain PLS trusts that we consolidate because we are determined to be the primary beneficiary. Under the CFE election, these assets are measured based on the fair value of the more observable liabilities of the consolidated CFEs. The assets of the consolidated CFEs may be used only to settle the obligations of the respective CFEs, and creditors of the CFEs do not have recourse to Rithm Capital Corp.
As of June 30, 2026, we held approximately $4.3 billion of outstanding face amount of residential mortgage loans classified as residential mortgage loans on our consolidated balance sheets (see below). These investments were financed in part through secured financing agreements with an aggregate face amount of approximately $3.8 billion. Our acquisitions during the period included open-market purchases, originations through Newrez, bulk acquisitions and loans acquired through the exercise of call rights.
The following table presents the total residential mortgage loans outstanding by loan type (dollars in thousands):
June 30, 2026 December 31, 2025
Outstanding Face Amount Carrying
Value 		Loan
Count 		Weighted Average Yield
Weighted Average Life (Years)(A)
Carrying Value
Investments of consolidated CFEs(B)
$ 4,540,407 $ 4,460,920 10,456 6.2 % 27.2 $ 3,265,142
Residential mortgage loans, HFI, at fair value $ 325,577 $ 294,416 6,269 8.0 % 3.4 $ 324,688
Residential Mortgage Loans, HFS:
Acquired performing loans 45,622 40,970 1,436 6.7 % 3.2 45,861
Acquired non-performing loans(C)
13,483 11,278 150 9.2 % 2.9 10,930
Residential mortgage loans, HFS 59,105 52,248 1,586 7.3 % 3.1 56,791
Residential Mortgage Loans, HFS, at Fair Value:
Acquired performing loans(D)
1,132,283 1,140,263 2,854 6.3 % 9.7 1,612,154
Acquired non-performing loans(C)(E)
390,046 358,440 1,616 5.5 % 28.5 299,413
Originated loans 2,392,735 2,448,125 7,973 6.6 % 29.1 3,515,914
Residential mortgage loans, HFS, at fair value 3,915,064 3,946,828 12,443 6.4 % 23.4 5,427,481
Total Residential Mortgage Loans $ 4,299,746 $ 4,293,492 20,298 $ 5,808,960
(A)For loans classified as Level 3 in the fair value hierarchy, the weighted average life is based on the expected timing of the receipt of cash flows. For Level 2 loans, the weighted average life is based on the contractual term of the loan.
(B)Residential mortgage loans of consolidated CFEs are classified as Level 2 in the fair value hierarchy and valued based on the fair value of the more observable financial liabilities under the CFE election.
(C)Loans are generally placed on non-accrual status when principal or interest is 90 days or more past due.
(D)Includes $210.7 million UPB of Ginnie Mae EBO options.
(E)Includes $375.6 million UPB of Ginnie Mae EBO options on accrual status as recovery of contractual cash flows are guaranteed by the FHA as of June 30, 2026.
We evaluate the credit quality of our residential mortgage loan portfolio using indicators that include delinquency status, LTV ratios and geographic concentration.
We finance a significant portion of our residential mortgage loan investments through repurchase agreements. These recourse borrowings generally bear variable interest rates for the term of the applicable repurchase transaction (typically less than one year) at a specified margin over SOFR. As of June 30, 2026 and December 31, 2025, we had pledged residential mortgage loans with a carrying value of approximately $4.2 billion and $5.8 billion, respectively, as collateral for borrowings under repurchase agreements. Certain of these financings are subject to daily mark-to-market adjustments and related margin calls. Other financings are not subject to daily margin calls unless the collateral coverage percentage-calculated as the current carrying value of outstanding debt divided by the market value of the underlying collateral-reaches or exceeds a specified trigger. The difference between the collateral coverage percentage and the applicable trigger is referred to as a "margin holiday." See Note 17 to our consolidated financial statements for additional information regarding the financing of our residential mortgage loans, including a summary of related activity from December 31, 2025 to June 30, 2026.
See Note 7 to our consolidated financial statements for additional information regarding our residential mortgage loans, including a summary of related activity from December 31, 2025 to June 30, 2026.
Consumer Loans
The tables below summarize the carrying value of our consumer loans and present selected collateral characteristics for our consumer loan portfolio. This portfolio includes (i) consumer loans acquired from Upgrade, Inc. ("Upgrade" and such loans, the "Upgrade loans"), (ii) consumer loans acquired from Goldman Sachs Bank USA (the "Marcus loans" or "Marcus") and (iii) consumer loans acquired from SpringCastle (the "SpringCastle loans" or "SpringCastle").
June 30, 2026 December 31, 2025
UPB Carrying Value Weighted Average Coupon Weighted Average Expected Life (Years) Carrying Value
Investments of consolidated CFEs $ 302,422 $ 304,569 13.1 % 10.8 $ -
Upgrade $ 479,625 $ 462,640 15.4 % 10.4 $ 450,119
SpringCastle 146,489 147,302 18.0 % 3.5 167,807
Marcus 204,137 97,169 11.2 % 0.5 166,473
Total Consumer Loans, at Fair Value $ 830,251 $ 707,111 14.8 % 6.8 $ 784,399
June 30, 2026
Number of Loans Adjustable Rate Loan % Average Loan Age (Months)
Delinquency 90+ Days(A)
12-Month CRR(B)
12-Month CDR(C)
SpringCastle 26,085 14.8 % 261 2.0 % 13.1 % 5.6 %
Marcus 97,235 - % 49 58.3 % 23.3 % 5.6 %
Upgrade 51,513 - % 7 0.2 % 28.1 % 2.2 %
Total / Weighted Average 174,833 2.6 % 62 14.8 % 24.3 % 3.6 %
(A) Represents the percentage of the total principal balance of the pool that corresponds to loans that are delinquent by 90 or more days.
(B) Represents the annualized rate of the voluntary prepayments during the three months as a percentage of the total principal balance of the pool.
(C) Represents the annualized rate of the involuntary prepayments (defaults) during the three months as a percentage of the total principal balance of the pool.
We finance our consumer loan investments through a combination of securitization and secured borrowing arrangements. The SpringCastle loans are financed with securitized, non-recourse long-term notes with a stated maturity date of September 2037. The Marcus loans are financed with long-term notes with a stated maturity date of June 2028. The Upgrade loans are financed primarily through a secured revolving credit facility that matures in October 2026. See Note 17 to our consolidated financial statements for further information regarding the financing of our consumer loans, including a summary of activity from December 31, 2025 to June 30, 2026.
See Note 8 to our consolidated financial statements for additional information, including a summary of activity related to consumer loans from December 31, 2025 to June 30, 2026.
Single-Family Rental Properties
As of June 30, 2026, our SFR portfolio consisted of approximately 3,958 properties with an aggregate carrying value of approximately $1.0 billion. The SFR portfolio generates rental income under lease agreements that typically have initial terms of one to two years. Operating results are influenced by rental rates, occupancy levels, tenant turnover and local market conditions. We incur ongoing operating expenses associated with the portfolio, including property taxes, insurance, maintenance and property management costs. Our SFR property acquisitions were financed through a combination of credit facilities, term loans and securitization structures. See Note 17 to our consolidated financial statements for additional information regarding the financing of our SFR properties.
Our Investment Portfolio segment also includes results from certain wholly owned subsidiaries and minority investments that provide services across the mortgage and real estate sectors. This includes our strategic partnership with Darwin through Adoor Property Management LLC ("APM"), which provides property management services. All of our SFR properties are currently managed by APM.
Commercial Real Estate
Following the Elecor Acquisition in December 2025, we own and operate a portfolio of Class A office properties in New York City and San Francisco, which are managed as part of our broader real estate platform, totaling approximately 12.2 million square feet.
The key metrics related to Elecor CRE properties are included in the tables below.
Quarterly Leasing Information:
Three Months Ended Six Months Ended
June 30,
2026 		March 31,
2026 		June 30,
2026
Lease count 16 9 25
Sq ft leased (total) 234,347 103,143 337,490
Rithm Capital's share (sq ft) 131,571 67,432 199,003
Weighted average initial rent ($ per sq ft) $ 92.90 $ 96.11 $ 93.88
Weighted average lease term (years) 8.9 9.2 9.0
Same Store Leased Occupancy:
June 30,
2026 		December 31,
2025
New York City 91.6 % 92.8 %
San Francisco 64.9 % 62.2 %
Total 86.5 % 86.9 %
Same store leased occupancy (core properties owned by Elecor in a similar manner during both reporting periods) across the Elecor portfolio was 86.5% as of June 30, 2026, compared to 86.9% as of December 31, 2025, a decrease of 40 basis points. This decrease was driven primarily by lease expirations in the three months, partially offset by new leases executed across the portfolio. Year-to-date leasing activity has been executed at rents 14.7% above the full-year 2025 average, reflecting improving tenant demand for premier Class A office space across the Elecor portfolio.
Lease Expiration Schedule:
Year of Expiration
Expiring Sq Ft(A)
% of Total Sq Ft
Annualized Base Rent (in millions)(A)
% of Total Portfolio Annualized Base Rent
July 1 through December 31, 2026 336,836 4.9 % $ 31,517 5.3 %
2027 171,237 2.5 % 16,966 2.8 %
2028 178,199 2.6 % 14,747 2.5 %
2029 511,007 7.5 % 42,964 7.2 %
2030 497,143 7.3 % 49,410 8.3 %
2031 and thereafter 5,148,104 75.2 % 443,193 73.9 %
Total 6,842,526 100.0 % $ 598,797 100.0 %
(A) Amounts are presented at Rithm share.
CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES
Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP" or "U.S. GAAP"). The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that could affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses. Actual results could differ from these estimates. We believe that the estimates and assumptions utilized in the preparation of the consolidated financial statements are prudent and reasonable. Actual results historically have generally been in line with our estimates and judgments used in applying each of the accounting policies described below, as modified periodically to reflect current market conditions.
The mortgage and financial sectors operate in a challenging and uncertain economic environment. Financial and real estate companies continue to be affected by, among other things, market volatility, heightened interest rates and inflationary pressures. We believe the estimates and assumptions underlying our consolidated financial statements are reasonable and supportable based on the information available as of June 30, 2026; however, uncertainty over the current macroeconomic conditions makes any estimates and assumptions as of June 30, 2026, inherently less certain than they would be absent the current economic environment. Actual results may materially differ from those estimates. Market volatility and inflationary pressures and their impact on the current financial, economic and capital markets environment and future developments in these and other areas present uncertainty and risk with respect to our financial condition, results of operations, liquidity and ability to pay distributions.
Our critical accounting policies as of June 30, 2026, which represent our accounting policies that are most affected by judgments, estimates and assumptions, included all of the critical accounting policies referred to in the 2025 Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 2 to our consolidated financial statements in this Quarterly Report on Form 10-Q.
RESULTS OF OPERATIONS
Factors Impacting Comparability of Our Results of Operations
Our net income is primarily generated from net interest income, servicing fee revenue less cost to service, gain on sale of loans less cost to originate, asset management fees less expenses and property rental revenue less operating costs. Changes in various factors such as market interest rates, prepayment speeds, estimated future cash flows, servicing costs and credit quality could affect the amount of basis premium to be amortized or discount to be accreted into interest income for a given period. Prepayment speeds vary according to the type of investment, conditions in the financial markets, competition and other factors, none of which can be predicted with any certainty. Additionally, changes in these inputs along with other factors such as delinquency rates and recapture rates may significantly impact the fair value of our MSRs and as a result, our earnings. Our operating results may also be affected by credit losses in excess of initial estimates or unanticipated credit events experienced by borrowers whose mortgage loans underlie the MSRs, residential transition loans or the non-Agency securities held in our investment portfolio. Asset management fees are directly related to growth in AUM and investment performance of our funds. Decline in investment performance may slow our AUM growth and increase the potential for redemptions from our funds. Property rental revenue is directly related to occupancy.
During the six months ended June 30, 2026, interest rates remained elevated compared to the six months ended June 30, 2025. Changes in interest rates can inversely impact a borrower's ability or willingness to enter into mortgage transactions, including residential, business purpose and commercial loans. On the other hand, lower interest rates also decrease our financing costs.
Summary of Results of Operations
The following table summarizes the changes in our results of operations for the three months ended June 30, 2026 compared to the three months ended March 31, 2026 and the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Our results of operations are not necessarily indicative of our future performance (dollars in thousands).
Three Months Ended Six Months Ended June 30,
June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Revenues
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables $ 614,637 $ 579,288 $ 1,193,925 $ 1,145,618 $ 35,349 $ 48,307
Change in fair value of MSRs and MSR financing receivables, net of economic hedges (includes realization of cash flows of $(213,874), $(211,456), $(425,330) and $(323,571), respectively)
(392,875) (204,229) (597,104) (488,383) (188,646) (108,721)
Servicing revenue, net 221,762 375,059 596,821 657,235 (153,297) (60,414)
Interest income 474,595 461,877 936,472 919,715 12,718 16,757
Gain on originated residential mortgage loans, HFS, net 207,006 208,250 415,256 329,487 (1,244) 85,769
Asset management revenue 142,228 106,587 248,815 182,680 35,641 66,135
Commercial real estate revenue 182,130 178,257 360,387 - 3,873 360,387
Other residential-related revenue 54,560 54,680 109,240 109,725 (120) (485)
1,282,281 1,384,710 2,666,991 2,198,842 (102,429) 468,149
Expenses
Interest expense and warehouse line fees 464,114 450,063 914,177 836,922 14,051 77,255
General, administrative and operating 307,349 316,601 623,950 428,759 (9,252) 195,191
Compensation and benefits 410,477 378,410 788,887 565,874 32,067 223,013
Depreciation and amortization 93,547 92,644 186,191 48,362 903 137,829
1,275,487 1,237,718 2,513,205 1,879,917 37,769 633,288
Other Income (Loss)
Realized and unrealized gains (losses), net 56,305 (15,154) 41,151 21,598 71,459 19,553
Other income, net 23,787 22,402 46,189 22,665 1,385 23,524
80,092 7,248 87,340 44,263 72,844 43,077
Income before Income Taxes 86,886 154,240 241,126 363,188 (67,354) (122,062)
Income tax expense (benefit) 18,973 44,762 63,735 (35,528) (25,789) 99,263
Net Income 67,913 109,478 177,391 398,716 (41,565) (221,325)
Non-controlling interests in income (loss) of consolidated subsidiaries 8,032 (146) 7,886 4,255 8,178 3,631
Redeemable non-controlling interests in income of consolidated subsidiaries 3,590 6,946 10,536 3,933 (3,356) 6,603
Net Income Attributable to Rithm Capital Corp. 56,291 102,678 158,969 390,528 (46,387) (231,559)
Change in redemption value of redeemable non-controlling interests - - - 15,611 - (15,611)
Dividends on preferred stock 36,098 34,847 70,945 54,495 1,251 16,450
Net Income Attributable to Common Stockholders $ 20,193 $ 67,831 $ 88,024 $ 320,422 $ (47,638) $ (232,398)
Servicing Revenue, Net
Servicing revenue, net consists of the following:
Three Months Ended Six Months Ended June 30,
(dollars in thousands) June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Servicing fee revenue, net and interest income from MSRs and MSR financing receivables $ 563,771 $ 530,599 $ 1,094,370 $ 1,045,181 $ 33,172 $ 49,189
Ancillary and other fees 50,866 48,689 99,555 100,437 2,177 (882)
Servicing fee revenue, net and fees 614,637 579,288 1,193,925 1,145,618 35,349 48,307
Change in Fair Value due to:
Realization of cash flows (213,874) (211,456) (425,330) (323,571) (2,418) (101,759)
Change in valuation inputs and assumptions, net of realized gains (losses)(A)
48,228 361,586 409,814 (403,832) (313,358) 813,646
Gains (losses) on MSR economic hedges (227,229) (354,359) (581,588) 239,020 127,130 (820,608)
Servicing Revenue, Net $ 221,762 $ 375,059 $ 596,821 $ 657,235 $ (153,297) $ (60,414)
(A)The following table summarizes the components of servicing revenue, net related to changes in valuation inputs and assumptions:
Three Months Ended Six Months Ended June 30,
(dollars in thousands) June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Changes in interest rates and prepayment speeds $ 43,555 $ 258,761 $ 302,316 $ (366,140) $ (215,206) $ 668,456
Changes in discount rates 67,785 140,976 208,761 (4,323) (73,191) 213,084
Changes in other factors (63,112) (38,151) (101,263) (33,369) (24,961) (67,894)
Change in Valuation and Assumptions $ 48,228 $ 361,586 $ 409,814 $ (403,832) $ (313,358) $ 813,646
The table below includes a further breakdown of servicing fee revenue, net and fees for the periods presented:
Three Months Ended Six Months Ended June 30,
(in thousands) June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
MSR-owned assets $ 489,946 $ 457,617 $ 947,563 $ 900,397 $ 32,329 $ 47,166
Residential whole loans 2,444 2,877 5,321 4,846 (433) 475
Third-party servicing revenue 55,790 56,812 112,602 108,803 (1,022) 3,799
Incentive 13,753 10,931 24,684 27,769 2,822 (3,085)
Boarding 1,838 2,362 4,200 3,366 (524) 834
Ancillary and other fees 50,866 48,689 99,555 100,437 2,177 (882)
Servicing Fee Revenue, Net and Fees(A)
$ 614,637 $ 579,288 $ 1,193,925 $ 1,145,618 $ 35,349 $ 48,307
(A)In addition to third-party servicing revenue, includes other fees earned from third parties of $33.5 million and $30.2 million for the three months ended June 30, 2026 and March 31, 2026, respectively, and $63.7 million and $45.7 million for the six months ended June 30, 2026 and 2025, respectively.
The table below summarizes the UPB of our MSRs, MSR financing receivables and third-party servicing:
UPB
(dollars in millions) June 30,
2026 		March 31,
2026 		June 30,
2025 		QoQ Change YoY Change
GSE $ 404,950 $ 404,243 $ 453,226 $ 707 $ (48,276)
Non-Agency 303,451 290,703 264,607 12,748 38,844
Ginnie Mae 156,819 155,425 146,355 1,394 10,464
Total $ 865,220 $ 850,371 $ 864,188 $ 14,849 $ 1,032
The table below summarizes the total UPB of our servicing portfolio (owned MSRs and third-party servicing) by Performing Servicing, Special Servicing and serviced by third-parties:
UPB
(dollars in millions) June 30,
2026 		March 31,
2026 		June 30,
2025 		QoQ Change YoY Change
Performing Servicing $ 551,196 $ 529,724 $ 526,083 $ 21,472 $ 25,113
Special Servicing 285,214 269,554 281,239 15,660 3,975
Serviced by third-parties 28,810 51,093 56,866 (22,283) (28,056)
Total Servicing Portfolio $ 865,220 $ 850,371 $ 864,188 $ 14,849 $ 1,032
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Servicing revenue, net was $221.8 million for the three months ended June 30, 2026, a decrease of $153.3 million, compared to $375.1 million for the three months ended March 31, 2026. The decrease was primarily attributable to approximately $186.2 million of lower hedged MSR mark-to-market, due to steadying of interest rates and prepayment speeds. Servicing fee revenue, net and fees increased approximately $35.3 million driven by higher servicing fees collected during the three months ended June 30, 2026.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Servicing revenue, net was $596.8 million for the six months ended June 30, 2026, a decrease of $60.4 million, compared to $657.2 million for the six months ended June 30, 2025. The decrease was primarily attributable to a $101.8 million increase in the realization of cash flows, driven by higher prepayment speeds year-over-year, and a $7.0 million decrease in hedged MSR mark-to-market, driven by changes in interest rates. Servicing fee revenue, net and fees increased $48.3 million, driven by portfolio growth and higher servicing fees collected during the six months ended June 30, 2026.
Interest Income
The following table includes the breakdown of interest income by segment for the periods presented:
(dollars in thousands) Three Months Ended Six Months Ended June 30,
Segment June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Origination and Servicing $ 252,496 $ 234,877 $ 487,373 $ 602,501 $ 17,619 $ (115,128)
Residential Transitional Lending 103,587 87,659 191,246 141,913 15,928 49,333
Asset Management 28,208 38,897 67,105 17,254 (10,689) 49,851
Investment Portfolio 85,428 95,967 181,395 153,933 (10,539) 27,462
Commercial Real Estate 2,185 1,832 4,017 - 353 4,017
Corporate Category 2,691 2,645 5,336 4,114 46 1,222
Total Interest Income $ 474,595 $ 461,877 $ 936,472 $ 919,715 $ 12,718 $ 16,757
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Interest income was $474.6 million for the three months ended June 30, 2026, an increase of $12.7 million, compared to $461.9 million for the three months ended March 31, 2026. The increase was primarily attributable to (i) higher interest income from Origination and Servicing, driven by seasonally higher custodial balances and an increase in the average earnings rate, and (ii) higher interest income from growth in the RTL portfolio. This was partially offset by (i) lower interest income from on-balance sheet Non-QM and consumer loans due to securitizations during the three months ended June 30, 2026, and (ii) a yield adjustment reflecting the actual performance of certain collateralized loan obligation fund investments during the three months ended June 30, 2026.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Interest income was $936.5 million for the six months ended June 30, 2026, an increase of $16.8 million, compared to $919.7 million for the six months ended June 30, 2025. The increase was primarily attributable to (i) growth in the Non-QM, RTL and consumer portfolios, and (ii) six months of interest income earned from insurance company investments acquired in December 2025, as compared to none in the prior year period. The increase was partially offset by net securities sales, securitizations, and lower average earnings rate on custodial balances in Origination and Servicing.
Gain on Originated Residential Mortgage Loans, HFS, Net
The following table provides information regarding gain on originated residential mortgage loans, HFS, net as a percentage of pull through adjusted lock volume, by channel:
Three Months Ended Six Months Ended June 30,
(dollars in thousands) June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Pull through adjusted lock volume $ 14,493,879 $ 16,959,017 $ 31,452,896 $ 29,108,214 $ (2,465,138) $ 2,344,682
Gain on Originated Residential Mortgage Loans, as a Percentage of Pull Through Adjusted Lock Volume, by Channel:
Direct to Consumer 2.85 % 2.52 % 2.68 % 3.30 %
Retail/Joint Venture 3.34 % 2.88 % 3.15 % 3.49 %
Wholesale 1.11 % 1.20 % 1.16 % 1.27 %
Correspondent 0.50 % 0.44 % 0.47 % 0.48 %
Total Gain on Originated Residential Mortgage Loans, as a Percentage of Pull Through Adjusted Lock Volume 1.27 % 1.09 % 1.17 % 1.12 %
The following table summarizes funded loan production by channel:
UPB
Three Months Ended Six Months Ended June 30,
(dollars in millions) June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Production by Channel:
Direct to Consumer $ 2,398 $ 2,473 $ 4,871 $ 2,772 $ (75) $ 2,099
Retail/Joint Venture 821 712 1,533 1,378 109 155
Wholesale 3,143 2,562 5,705 4,119 581 1,586
Correspondent 9,540 9,726 19,266 19,858 (186) (592)
Total Production by Channel $ 15,902 $ 15,473 $ 31,375 $ 28,127 $ 429 $ 3,248
% Purchase 63 % 51 % 57 % 73 %
% Refinance 37 % 49 % 43 % 27 %
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Gain on originated residential mortgage loans, HFS, net was $207.0 million for the three months ended June 30, 2026, a decrease of $1.2 million, compared to $208.3 million for the three months ended March 31, 2026. The decrease was primarily attributable to a reduction in pull through adjusted lock volume, partially offset by improved gain on sale margins in the Direct to Consumer and Correspondent channels.
For the three months ended June 30, 2026, funded loan origination volume was $15.9 billion, up from $15.5 billion in the three months ended March 31, 2026. Refinance activity represented 37% of total funded origination volume, a decrease from 49% in the three months ended March 31, 2026, as mortgage rates remained elevated. Gain on sale margin for the three months ended June 30, 2026 was 1.27%, 18 bps higher than 1.09% for the three months ended March 31, 2026, primarily due to improved gain on sale margins in the Direct to Consumer and Correspondent channels.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Gain on originated residential mortgage loans, HFS, net was $415.3 million for the six months ended June 30, 2026, an increase of $85.8 million, compared to $329.5 million for the six months ended June 30, 2025. The increase was primarily attributable to an increase in pull through adjusted lock volume and improved gain on sale margins driven by channel mix.
For the six months ended June 30, 2026, funded loan origination volume was $31.4 billion, up from $28.1 billion in the six months ended June 30, 2025. Refinance activity represented 43% of total funded origination volume, an increase from 27% in the six months ended June 30, 2025, driven by a decline in mortgage rates year-over-year. Gain on sale margin for the six months ended June 30, 2026 was 1.17%, 5 bps higher than 1.12% for the six months ended June 30, 2025, primarily due to channel mix.
Asset Management Revenue
The following table presents the composition of asset management revenue:
(dollars in thousands) Three Months Ended Six Months Ended June 30,
June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Management fees $ 90,485 $ 90,929 $ 181,414 $ 125,163 $ (444) $ 56,251
Incentive fees 51,743 15,658 67,401 57,517 36,085 9,884
Total Asset Management Revenue $ 142,228 $ 106,587 $ 248,815 $ 182,680 $ 35,641 $ 66,135
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Asset management revenue was $142.2 million for the three months ended June 30, 2026, an increase of $35.6 million, compared to $106.6 million for the three months ended March 31, 2026. The increase was primarily attributable to a $36.1 million increase in incentive fees, driven by crystallization events and investment realizations from Sculptor managed funds. Management fees were generally consistent quarter-over-quarter, reflecting stable fee earning AUM.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Asset management revenue was $248.8 million for the six months ended June 30, 2026, an increase of $66.1 million, compared to $182.7 million for the six months ended June 30, 2025. The increase was primarily attributable to $52.0 million of management fees and $6.5 million of incentive fees from Crestline, which was acquired in December 2025, and reflected for a full six months in the current period, as well as an increase in fee earning AUM year-over-year.
Commercial Real Estate Revenue
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Commercial real estate revenue was $182.1 million for the three months ended June 30, 2026, comparable to $178.3 million for the three months ended March 31, 2026, reflecting no significant changes to the underlying leasing portfolio.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Commercial real estate revenue was $360.4 million for the six months ended June 30, 2026, compared to none for the six months ended June 30, 2025, reflecting the acquisition of Elecor in December 2025.
Other Residential-Related Revenue
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Other residential-related revenue was $54.6 million for the three months ended June 30, 2026, comparable to $54.7 million for the three months ended March 31, 2026, reflecting no significant changes to our Guardian and SFR portfolios.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Other residential-related revenue was $109.2 million for the six months ended June 30, 2026, comparable to $109.7 million for the six months ended June 30, 2025, reflecting no significant changes to our Guardian and SFR portfolios.
Interest Expense and Warehouse Line Fees
The following table includes the breakdown of interest expense and warehouse line fees by segment for the periods presented:
(dollars in thousands) Three Months Ended Six Months Ended June 30,
Segment June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Origination and Servicing $ 225,634 $ 215,797 $ 441,431 $ 576,564 $ 9,837 $ (135,133)
Residential Transitional Lending 43,742 35,659 79,401 65,321 8,083 14,080
Asset Management 23,231 25,574 48,805 22,799 (2,343) 26,006
Investment Portfolio 70,007 76,555 146,562 129,540 (6,548) 17,022
Commercial Real Estate 61,836 58,462 120,298 - 3,374 120,298
Corporate Category 39,664 38,016 77,680 42,698 1,648 34,982
Total Interest Expense and Warehouse Line Fees $ 464,114 $ 450,063 $ 914,177 $ 836,922 $ 14,051 $ 77,255
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Interest expense and warehouse line fees were $464.1 million for the three months ended June 30, 2026, an increase of $14.1 million, compared to $450.1 million for the three months ended March 31, 2026. The increase was primarily attributable to (i) an increase in mortgage loan production volume and (ii) an increase in borrowing to support growth of the RTL portfolio, partially offset by (iii) Non-QM and consumer loan securitizations during the three months ended June 30, 2026.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Interest expense and warehouse line fees were $914.2 million for the six months ended June 30, 2026, an increase of $77.3 million, compared to $836.9 million for the six months ended June 30, 2025. The increase was primarily attributable to (i) six months of interest expense incurred by Elecor, which was acquired in December 2025, (ii) an increase in average borrowing on MSRs and (iii) an increase in borrowing to support growth of the RTL portfolio, partially offset by (iv) lower Agency securities held during the six months ended June 30, 2026.
General, Administrative and Operating
General, administrative and operating expense consists of the following:
Three Months Ended Six Months Ended June 30,
(dollars in thousands) June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Legal and professional $ 29,209 $ 37,898 $ 67,107 $ 49,032 $ (8,689) $ 18,075
Loan origination 18,553 19,886 38,439 31,838 (1,333) 6,601
Occupancy 17,201 17,167 34,368 30,802 34 3,566
Subservicing 7,234 11,852 19,086 29,098 (4,618) (10,012)
Loan servicing 37,175 37,769 74,944 82,255 (594) (7,311)
Property and maintenance 101,998 106,355 208,353 56,557 (4,357) 151,796
Information technology 35,422 34,619 70,041 62,547 803 7,494
Other
60,557 51,055 111,612 86,630 9,502 24,982
General, Administrative and Operating Expense $ 307,349 $ 316,601 $ 623,950 $ 428,759 $ (9,252) $ 195,191
The following table includes the breakdown of general, administrative and operating expense by segment for the periods presented:
(dollars in thousands) Three Months Ended Six Months Ended June 30,
Segment June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Origination and Servicing $ 146,211 $ 151,269 $ 297,480 $ 290,756 $ (5,058) $ 6,724
Residential Transitional Lending 5,469 6,537 12,006 10,065 (1,068) 1,941
Asset Management 33,082 30,410 63,492 58,078 2,672 5,414
Investment Portfolio 31,711 25,109 56,820 45,154 6,602 11,666
Commercial Real Estate 78,640 84,000 162,640 - (5,360) 162,640
Corporate Category 12,236 19,276 31,512 24,706 (7,040) 6,806
Total General, Administrative and Operating Expense $ 307,349 $ 316,601 $ 623,950 $ 428,759 $ (9,252) $ 195,191
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
General, administrative and operating expenses were $307.3 million for the three months ended June 30, 2026, a decrease of $9.3 million, compared to $316.6 million for the three months ended March 31, 2026. The decrease was primarily attributable to (i) lower legal and professional fees and (ii) lower subservicing costs, driven by the transfer of certain MSRs to in-house servicing during the second quarter of 2026, partially offset by (iii) higher securitization fees.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
General, administrative and operating expenses were $624.0 million for the six months ended June 30, 2026, an increase of $195.2 million, compared to $428.8 million for the six months ended June 30, 2025. The increase was primarily attributable to (i) a $151.8 million increase in property and maintenance expense, driven by the acquisition of Elecor in December 2025, (ii) a $10.7 million increase driven by acquisition of Crestline in December 2025, and (iii) increases in other expense categories including legal and professional fees and information technology. The increase was partially offset by lower subservicing costs driven by the transfer of certain MSRs to in-house servicing during the six months ended June 30, 2026 and lower loan servicing costs attributable to servicing platform enhancement and automation.
Compensation and Benefits
The following table includes the breakdown of compensation and benefits expense by segment for the periods presented:
(dollars in thousands) Three Months Ended Six Months Ended June 30,
Segment June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Origination and Servicing $ 214,708 $ 207,074 $ 421,782 $ 362,871 $ 7,634 $ 58,911
Residential Transitional Lending 22,740 20,822 43,562 29,699 1,918 13,863
Asset Management 130,211 113,016 243,227 132,731 17,195 110,496
Investment Portfolio 6,688 5,115 11,803 2,166 1,573 9,637
Commercial Real Estate 11,474 11,282 22,756 - 192 22,756
Corporate Category 24,656 21,101 45,757 38,407 3,555 7,350
Total Compensation and Benefits Expense $ 410,477 $ 378,410 $ 788,887 $ 565,874 $ 32,067 $ 223,013
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Compensation and benefits expenses were $410.5 million for the three months ended June 30, 2026, an increase of $32.1 million, compared to $378.4 million for the three months ended March 31, 2026. The increase was primarily due to (i) increased amortization related to restricted stock unit grants issued in March 2026 and (ii) higher commissions in Origination and Servicing and Residential Transitional Lending during the three months ended June 30, 2026.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Compensation and benefits expenses were $788.9 million for the six months ended June 30, 2026, an increase of $223.0 million, compared to $565.9 million for the six months ended June 30, 2025. The increase was primarily attributable to increased headcount following the acquisitions of Elecor and Crestline in December 2025, reflecting six months of expenses in the current period compared to none in the prior year period.
Depreciation and Amortization
The following table includes the breakdown of depreciation and amortization expense by segment for the periods presented:
(dollars in thousands) Three Months Ended Six Months Ended June 30,
Segment June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Origination and Servicing $ 5,474 $ 6,088 $ 11,562 $ 13,940 $ (614) $ (2,378)
Residential Transitional Lending 1,966 1,943 3,909 3,856 23 53
Asset Management 12,040 11,526 23,566 14,732 514 8,834
Investment Portfolio 7,184 8,482 15,666 15,803 (1,298) (137)
Commercial Real Estate 66,803 64,605 131,408 - 2,198 131,408
Corporate Category 80 - 80 31 80 49
Total Depreciation and Amortization Expense $ 93,547 $ 92,644 $ 186,191 $ 48,362 $ 903 $ 137,829
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Depreciation and amortization expense was $93.5 million for the three months ended June 30, 2026, comparable to $92.6 million for the three months ended March 31, 2026, reflecting no significant additions or dispositions to the underlying asset base quarter-over-quarter.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Depreciation and amortization expense was $186.2 million for the six months ended June 30, 2026, an increase of $137.8 million, compared to $48.4 million for the six months ended June 30, 2025. The increase was driven by six months of expense incurred by Elecor and Crestline, both acquired in December 2025, which added real estate and lease-related depreciable assets and other intangible assets to the consolidated balance sheet.
Other Income (Loss)
The following table summarizes the components of other income (loss):
Three Months Ended Six Months Ended June 30,
(dollars in thousands) June 30,
2026 		March 31,
2026 		2026 2025 QoQ Change YoY Change
Real estate and other securities
$ 3,808 $ (27,204) $ (23,396) $ 12,986 $ 31,012 $ (36,382)
Residential mortgage loans and REO
(3,869) (3,705) (7,574) 10,825 (164) (18,399)
Derivative and hedging instruments
8,419 2,876 11,295 (18,041) 5,543 29,336
Notes and bonds payable (231) (12,270) (12,501) 713 12,039 (13,214)
Consolidated entities(A)
25,372 19,064 44,436 43,056 6,308 1,380
Insurance company investments (2,089) 1,272 (817) - (3,361) (817)
Other gains (losses)(B)
24,895 4,813 29,708 (27,941) 20,082 57,649
Realized and unrealized gains (losses), net 56,305 (15,154) 41,151 21,598 71,459 19,553
Other income, net 23,787 22,402 46,189 22,665 1,385 23,524
Other Income, Net $ 80,092 $ 7,248 $ 87,340 $ 44,263 $ 72,844 $ 43,077
(A)Includes change in the fair value of the consolidated CFEs' financial assets and liabilities and related interest and other income.
(B)Includes Excess MSRs, servicer advance investments, consumer loans, residential transition loans and other.
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Other income, net was $80.1 million for the three months ended June 30, 2026, an increase of $72.8 million, compared to $7.2 million for the three months ended March 31, 2026. The increase was primarily attributable to a change from net losses to net gains on real estate and other securities during the three months ended June 30, 2026 driven by changes in interest rates, as well as losses on early extinguishment of debt that occurred during the three months ended March 31, 2026 and did not recur in the current period.
The increase in other gains reflects higher gains on preferred stock from certain equity method investments and gains from the securitization of certain consumer loans during the three months ended June 30, 2026, partially offset by fair value adjustments on RTLs and consumer loans.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Other income, net was $87.3 million for the six months ended June 30, 2026, an increase of $43.1 million, compared to $44.3 million for the six months ended June 30, 2025. The increase was primarily attributable to (i) gains on derivative and hedging instruments during the six months ended June 30, 2026, and (ii) higher gains on public equities and lower losses related to the consumer loan portfolio, partially offset by (iii) losses on real estate and other securities, driven by an increase in the 10-year U.S. Treasury rate year-over-year, (iv) losses on residential mortgage loans and REO and (v) losses on notes and bonds payable, primarily due to the early extinguishment of debt. The increase also reflects higher gains on equity method investments of Elecor, which was acquired in December 2025.
Income Tax Expense (Benefit)
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Income tax expense decreased $25.8 million, which represents a $0.7 million current tax expense decrease and $25.1 million deferred tax expense decrease. The change in deferred tax expense was primarily driven by changes in the fair value of MSRs and swaps held within taxable entities. Current tax expense is driven primarily by income from foreign operations.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Income tax expense increased $99.3 million, which represents the net of a $8.2 million decrease in current tax expense and $107.5 million increase in deferred tax expense. The change in deferred tax expense was primarily driven by changes in the fair value of MSRs and swaps held within taxable entities. The change in current tax expense is driven primarily by income from foreign operations.
Non-Controlling Interests in Income (Loss) of Consolidated Subsidiaries
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Non-controlling interests in income (loss) of consolidated subsidiaries was $8.0 million for the three months ended June 30, 2026, an increase of $8.2 million, compared to $(0.1) million for the three months ended March 31, 2026. The increase was driven by gains attributable to non-controlling interests in our Asset Management segment and reduced losses attributable to non-controlling interests in our Commercial Real Estate segment.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Non-controlling interests in income (loss) of consolidated subsidiaries was $7.9 million for the six months ended June 30, 2026, an increase of $3.6 million, compared to $4.3 million for the six months ended June 30, 2025. The increase was driven by gains attributable to non-controlling interests in our Asset Management segment, partially offset by losses attributable to non-controlling interests in our Commercial Real Estate segment.
Redeemable Non-Controlling Interests in Income of Consolidated Subsidiaries
Three months ended June 30, 2026 compared to the three months ended March 31, 2026
Redeemable non-controlling interests in income of consolidated subsidiaries was $3.6 million for the three months ended June 30, 2026, a decrease of $3.4 million, compared to $6.9 million for the three months ended March 31, 2026. The decrease was primarily driven by lower income attributable to redeemable non-controlling interests in a consolidated joint venture during the current period.
Six months ended June 30, 2026 compared to the six months ended June 30, 2025
Redeemable non-controlling interests in income of consolidated subsidiaries was $10.5 million for the six months ended June 30, 2026, an increase of $6.6 million, compared to $3.9 million for the six months ended June 30, 2025. The increase was primarily driven by higher income attributable to redeemable non-controlling interests in a consolidated joint venture, including interests that were newly established during the first quarter of 2025.
LIQUIDITY AND CAPITAL RESOURCES
Overview
Liquidity is a measurement of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain investments and other general business needs.
We must distribute annually at least 90% of our REIT taxable income to maintain our status as a REIT under the Internal Revenue Code. A portion of this requirement may be able to be met through stock dividends, rather than cash, subject to limitations based on the value of our stock. Our ability to utilize funds generated by the MSRs held in our servicer subsidiaries, NRM and Newrez, is subject to and limited by regulatory requirements established by the Federal Housing Finance Agency (the "FHFA"), Fannie Mae and Freddie Mac private label servicing and Ginnie Mae for Ginnie Mae servicing, as summarized below. Moreover, our ability to access and utilize cash generated from our regulated entities is an important part of our dividend paying ability. As of June 30, 2026, approximately $1.7 billion of available liquidity was held at NRM and Newrez, of which $1.1 billion was in excess of the regulatory liquidity requirements. NRM and Newrez are expected to maintain compliance with applicable liquidity and net worth requirements.
The FHFA and Ginnie Mae capital and liquidity standards require all loan sellers and servicers to maintain a minimum tangible net worth of $2.5 million plus 25 bps for Fannie Mae, Freddie Mac and private label servicing UPB plus 35 bps for Ginnie Mae servicing UPB, a tangible net worth to tangible asset ratio of 6% or greater and a base liquidity of 3.5 bps of Fannie Mae, Freddie Mac and private label servicing UPB plus 10 bps for Ginnie Mae servicing UPB. Furthermore, specific to the FHFA, all non-banks have to hold additional origination liquidity of 50 bps times loans HFS plus pipeline loans. Large non-banks with greater than $50 billion UPB in servicing will have to hold an additional liquidity buffer of 2 bps on Fannie Mae and Freddie Mac servicing UPB and 5 bps on Ginnie Mae servicing UPB. As of June 30, 2026, Rithm Capital maintained compliance with the required capital and liquidity standards. Non-compliance with the capital and liquidity requirements can result in the FHFA and Ginnie Mae taking various remedial actions up to and including removing our ability to sell loans to and service loans on behalf of the FHFA and Ginnie Mae. Additionally, Ginnie Mae introduced Risk Based Capital Ratio ("RBCR") requirements for institutions seeking approval as Ginnie Mae single-family issuers (including those that are non-depository mortgage companies). These institutions are required to maintain a RBCR of at least 6% in addition to continuing to maintain a leverage ratio of at least 6%. In connection with the implementation of this requirement, Ginnie Mae also introduced risk-based capital relief for hedging of MSRs, whereby issuers who have a track record of managing their interest rate exposure through MSRs hedging and who meet prescribed eligibility requirements may qualify for RBCR requirement relief. Compliance with these capital and liquidity requirements may require us to maintain elevated levels of capital and liquidity, which could constrain our operations and adversely affect our returns.
If the regulatory capital requirements imposed on our lenders change, they may be required to significantly increase the cost of the financing that they provide to us. Our lenders also have revised and may continue to revise their eligibility requirements for the types of assets they are willing to finance or the terms of such financings, including haircuts and requiring additional collateral in the form of cash, based on, among other factors, the regulatory environment and their management of actual and perceived risk. Moreover, the amount of financing we receive under our secured financing agreements will be directly related to our lenders' valuation of our assets that cover the outstanding borrowings.
Use of Funds
Our primary uses of funds are originating and acquiring investments and related costs, the payment of interest, compensation expense, servicing and subservicing expenses, payment of outstanding commitments (including margins and loan originations), payment of other operating expenses, repayment of borrowings and hedge obligations, payment of dividends and funding of future servicer advances.
As of June 30, 2026, our total outstanding debt obligations amounted to $36.3 billion and are comprised of secured financing agreements, secured notes and bonds payable, Senior Unsecured Notes (as defined below) and notes payable of consolidated entities. Certain debt obligations are the obligations of our consolidated subsidiaries, which own the related collateral. In some cases, such collateral is not available to other creditors of ours. In particular, the obligations and liabilities of CFEs may only be satisfied with the assets of the respective CFE, and creditors do not have recourse to Rithm Capital Corp.
We have margin exposure on $13.7 billion of secured financing agreements. To the extent that the value of the collateral underlying these secured financing agreements declines below the collateral margin trigger, we may be required to post margin, which could significantly impact our liquidity.
Short-Term Borrowings
The following tables provide additional information regarding our short-term borrowings (dollars in thousands):
Six Months Ended June 30, 2026
Outstanding
Balance at June 30, 2026
Average Daily Amount Outstanding(A)
Maximum Amount Outstanding Weighted Average Daily Interest Rate
Secured Financing Agreements:
Government and government-backed securities $ 4,893,090 $ 5,008,392 $ 5,130,519 4.1 %
Non-Agency securities 1,031,364 974,766 1,033,972 5.3 %
Residential mortgage loans 3,087,611 3,920,973 5,676,795 5.1 %
Residential transition loans
1,309,811 1,084,736 1,309,811 5.9 %
Secured Notes and Bonds Payable:
MSRs 2,311,706 2,555,560 2,629,627 6.9 %
Servicer advances 331,889 589,015 816,898 5.2 %
Total / Weighted Average $ 12,965,471 $ 14,133,442 $ 16,597,622 5.1 %
(A)Represents the average for the period the debt was outstanding.
Average Daily Amount Outstanding(A)
Three Months Ended
June 30, 2026 March 31, 2026 December 31, 2025 September 30, 2025
Secured Financing Agreements:
Government and government-backed securities $ 4,937,530 $ 5,080,041 $ 7,486,216 $ 7,635,112
Non-Agency securities 995,719 953,581 908,897 889,135
Residential mortgage loans and REO 3,639,578 4,205,495 4,816,525 3,567,661
Residential transition loans
1,243,970 923,732 524,960 537,259
(A)Represents the average for the period the debt was outstanding.
Unsecured Notes
On May 14, 2026, the Company issued $500.0 million aggregate principal amount of its 8.500% senior unsecured notes due 2031 (the "2031 Senior Notes") due June 1, 2031, with interest payable semi-annually in arrears on each of June 1st and December 1st, commencing on December 1, 2026. Net proceeds from the issuance of the 2031 Senior Notes were approximately $493.7 million, net of commissions and estimated offering expenses payable by the Company. The 2031 Senior Notes mature on June 1, 2031 and are redeemable at any time and from time to time on or after June 1, 2028, at prices ranging from 104.25% to 100% of the principal amount.
On June 20, 2025, the Company issued $500.0 million aggregate principal amount of its 8.000% senior unsecured notes due 2030 (the "2030 Senior Notes") due July 15, 2030, with interest payable semi-annually in arrears on each of January 15th and July 15th, commencing on January 15, 2026. Net proceeds from the issuance of the 2030 Senior Notes were approximately $495.0 million, net of commissions and estimated offering expenses payable by the Company. The 2030 Senior Notes mature on July 15, 2030 and are redeemable at any time from time to time on or after July 15, 2027, at prices ranging from 104% to 100% of the principal amount.
On March 19, 2024, the Company issued $775.0 million aggregate principal amount of its 8.000% senior unsecured notes due 2029 (the "2029 Senior Notes" and together with the 2031 Senior Notes and the 2030 Senior Notes, the "Senior Unsecured Notes") due April 1, 2029, with interest payable semi-annually in arrears on each of April 1st and October 1st, commencing on October 1, 2024. Net proceeds from the issuance of the 2029 Senior Notes were approximately $759.0 million, net of discount and commissions and estimated offering expenses payable by the Company. The 2029 Senior Notes mature on April 1, 2029 and are redeemable at any time and from time to time on or after April 1, 2026, at prices ranging from 104% to 100% of the principal amount.
The Company's senior unsecured notes due October 15, 2025 were fully redeemed during the second quarter of 2025.
The Indenture, dated May 14, 2026, pursuant to which the 2031 Senior Notes were issued (the "2031 Notes Indenture"), the Indenture, dated March 19, 2024, pursuant to which the 2029 Senior Notes were issued (the "2029 Notes Indenture") and the Indenture, dated June 20, 2025, pursuant to which the 2030 Senior Notes were issued (the "2030 Notes Indenture"), each contain a requirement that the Company maintain Total Unencumbered Assets (as defined in each of the 2031 Notes Indenture, the 2030 Notes Indenture and the 2029 Notes Indenture) of not less than 120% of the aggregate principal amount of the outstanding unsecured debt of the Company. For more information regarding our indebtedness, refer to Note 17 of the consolidated financial statements.
Maturities
Our debt obligations as of June 30, 2026, as summarized in Note 17 to our consolidated financial statements, had contractual maturities as follows (dollars in thousands):
Year Ending
Non-recourse(A)
Recourse(B)
Total
July 1 through December 31, 2026 $ 2,720,141 $ 10,414,435 $ 13,134,576
2027 2,778,615 2,247,356 5,025,971
2028 1,311,985 1,544,992 2,856,977
2029 1,444,506 2,387,784 3,832,290
2030 1,990,422 559,281 2,549,703
2031 and thereafter 6,843,874 1,771,627 8,615,501
$ 17,089,543 $ 18,925,475 $ 36,015,018
(A)Includes secured financing agreements, secured notes and bonds payable, unsecured notes net of issuance costs, and notes payable of consolidated CFEs of $2.6 billion, $8.5 billion, $0.0 billion and $6.0 billion, respectively.
(B)Includes secured financing agreements, secured notes and bonds payable, unsecured notes net of issuance costs, and notes payable of consolidated CFEs of $11.3 billion, $5.8 billion, $1.8 billion and $0.0 billion, respectively.
Covenants
Certain of the debt obligations are subject to customary loan covenants and event of default provisions, including event of default provisions triggered by certain specified declines in our equity or failure to maintain a specified tangible net worth, liquidity or indebtedness to tangible net worth ratio. We were in compliance with all of our debt covenants as of June 30, 2026.
Source of Funds
Our primary sources of funds are cash provided by operating activities (primarily income from loan originations and servicing, as well as management fees and incentive income), sales of and repayments from our investments, potential debt financing sources, including securitizations, and the issuance of equity securities, when feasible and appropriate. Our total cash and cash equivalents at June 30, 2026 was $1.7 billion.
Currently, our primary sources of financing are secured financing agreements and secured notes and bonds payable, although we have in the past and may in the future also pursue one or more other sources of financing such as securitizations and other secured and unsecured forms of borrowing. As of June 30, 2026, we had outstanding secured financing agreements with an aggregate face amount of approximately $13.7 billion to finance our investments. The financing of our entire Agency RMBS portfolio, which generally has 30- to 90-day terms, is subject to margin calls. Under secured financing agreements, we sell a security to a counterparty and concurrently agree to repurchase the same security at a later date for a higher specified price. The sale price represents financing proceeds and the difference between the sale and repurchase prices represents interest on the financing. The price at which the security is sold generally represents the market value of the security less a discount or "haircut," which can range broadly. During the term of the secured financing agreement, the counterparty holds the security as collateral. If the agreement is subject to margin calls, the counterparty monitors and calculates what it estimates to be the value of the collateral during the term of the agreement. If this value declines by more than a de minimis threshold, the counterparty could require us to post additional collateral, or margin, in order to maintain the initial haircut on the collateral. This margin is typically required to be posted in the form of cash and cash equivalents. Furthermore, we may, from time to time, be a party to derivative agreements or financing arrangements that may be subject to margin calls based on the value of such instruments. In addition, $6.6 billion face amount of our MSR financing is subject to mandatory monthly repayment to the extent that the outstanding balance exceeds the market value (as defined in the related agreement) of the financed asset multiplied by the contractual maximum LTV ratio. We seek to maintain adequate cash reserves and other sources of available liquidity to meet any margin calls or related requirements resulting from decreases in value related to a reasonably possible (in our opinion) change in interest rates.
Our ability to obtain borrowings and to raise future equity capital is dependent on our ability to access borrowings and the capital markets on attractive terms. We continually monitor market conditions for financing opportunities and at any given time may be entering or pursuing one or more of the transactions described above. Our senior management team has extensive long-term relationships with investment banks, brokerage firms and commercial banks, which we believe enhance our ability to source and finance asset acquisitions on attractive terms and access borrowings and the capital markets at attractive levels.
Our ability to fund our operations, meet financial obligations and finance acquisitions may be impacted by our ability to secure and maintain our secured financing agreements, credit facilities and other financing arrangements. Because secured financing agreements and credit facilities are short-term commitments of capital, lender responses to market conditions may make it more difficult for us to renew or replace, on a continuous basis, our maturing short-term borrowings and have imposed, and may continue to impose, more onerous conditions when rolling such financings. If we are not able to renew our existing facilities or arrange for new financing on terms acceptable to us, if we default on our covenants or are otherwise unable to access funds under our financing facilities or if we are required to post more collateral or face larger haircuts, we may have to curtail our asset acquisition activities and/or dispose of assets. As of June 30, 2026, our total borrowing capacity under our secured financing arrangements was $28.9 billion with $11.8 billion of available financing under these arrangements. Although available financing is uncommitted, Rithm Capital's unused borrowing capacity is available if Rithm Capital has additional eligible collateral to pledge and meets other borrowing conditions as set forth in the applicable agreements, including any applicable advance rate.
The use of TBA dollar roll transactions generally increases our funding diversification, expands our available pool of assets and increases our overall liquidity position, as TBA contracts typically have lower implied haircuts relative to Agency RMBS pools funded with repurchase financing. TBA dollar roll transactions may also have a lower implied cost of funds than comparable repurchase funded transactions offering incremental return potential. However, if it were to become uneconomical to roll our TBA contracts into future months it may be necessary to take physical delivery of the underlying securities and fund those assets with cash or other financing sources, which could reduce our liquidity position.
With respect to the next 12 months, we expect that our cash on hand, combined with our cash flow provided by operations and our ability to extend or refinance our secured financing agreements and servicer advance financings will be sufficient to satisfy our anticipated liquidity needs with respect to our current investment portfolio, including related financings, potential margin calls, loan origination and operating expenses. Our ability to extend or refinance short-term borrowings is critical to our liquidity outlook. We have a significant amount of near-term maturities, which we expect to be able to refinance. If we cannot repay or refinance our debt on favorable terms, we will need to seek out other sources of liquidity. While it is inherently more difficult to forecast beyond the next 12 months, we currently expect to meet our long-term liquidity requirements through our cash on hand and, if needed, additional borrowings, proceeds received from secured financing agreements and other financings, proceeds from equity offerings and the liquidation or refinancing of our assets.
These short-term and long-term expectations are forward-looking and subject to a number of uncertainties and assumptions, including those described under "-Market Considerations" as well as Part I, Item 1A. "Risk Factors" of the 2025 Form 10-K. If our assumptions about our liquidity prove to be incorrect, we could be subject to a shortfall in liquidity in the future, and such a shortfall may occur rapidly and with little or no notice, which could limit our ability to address the shortfall on a timely basis and could have a material adverse effect on our business.
Stockholders' Equity
Preferred Stock
Pursuant to our certificate of incorporation, we are authorized to designate and issue up to 100.0 million shares of preferred stock, par value of $0.01 per share, in one or more classes or series.
The following table summarizes our preferred shares outstanding (dollars in thousands, except share and per share amounts):
Number of Shares
Liquidation Preference(A)
Carrying Value(C)
Dividends Declared
per Share
June 30, 2026 December 31, 2025 June 30, 2026 December 31, 2025 June 30, 2026 December 31, 2025 Three Months Ended June 30, Six Months Ended June 30,
Series(B)
Issuance Discount 2026 2025 2026 2025
Series A, issued July 2019(D)(G)(I)
4,200,068 4,200,068 $ 105,002 $ 105,002 3.15 % $ 99,822 $ 99,822 $ 0.62 $ 0.66 $ 1.22 $ 1.31
Series B, issued August 2019(D)(G)
11,260,712 11,260,712 281,518 281,518 3.15 % 272,654 272,654 0.61 0.65 1.20 1.29
Series C, issued February 2020(D)(H)
15,903,342 15,903,342 397,584 397,584 3.15 % 385,289 385,289 0.57 0.61 1.12 1.20
Series D, 7.00% issued September 2021(E)
18,600,000 18,600,000 465,000 465,000 3.15 % 449,489 449,489 0.44 0.44 0.88 0.88
Series E, 8.75% issued September 2025(F)
7,600,000 7,600,000 190,000 190,000 3.15 % 183,536 183,536 0.55 - 1.09 -
Series F, 8.75% issued January 2026(E)
10,000,000 - 250,000 - 3.15 % 242,125 - 0.55 - 1.24 -
Total 67,564,122 57,564,122 $ 1,689,104 $ 1,439,104 $ 1,632,915 $ 1,390,790 $ 3.34 $ 2.36 $ 6.75 $ 4.68
(A)Each series has a liquidation preference or par value of $25.00 per share.
(B)Under certain circumstances upon a change of control, our Series A, Series B, Series C, Series D, Series E and Series F (each as defined below) are convertible to shares of our common stock.
(C)Carrying value reflects par value less discount and issuance costs.
(D)Fixed-to-floating rate cumulative redeemable preferred.
(E)Fixed-rate reset cumulative redeemable preferred.
(F)Fixed-rate cumulative redeemable preferred.
(G)Effective August 15, 2024, dividends on each of the Company's 7.50% Series A Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the "Series A") and the Company's 7.125% Series B Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the "Series B") accrue at a floating rate. For the second quarter 2026 dividends, the Series A accrued dividends at a percentage of the $25.00 liquidation preference per share of the Series A equal to a three-month Chicago Mercantile Exchange ("CME") SOFR, plus a spread adjustment of 0.261%, plus a spread of 5.802%, respectively, and dividends on the Series B accumulated at a percentage of the $25.00 liquidation preference per share of the Series B preferred shares equal to a three-month CME SOFR, plus a spread adjustment of 0.261%, plus a spread of 5.640%, respectively.
(H)Effective February 15, 2025, dividends on the 6.375% Series C Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (the "Series C") accumulate at a floating rate. For the second quarter 2026 dividends, the Series C accrued dividends at a percentage of the $25.00 liquidation preference per share of the Series C equal to a three-month CME SOFR, plus a spread adjustment of 0.261%, plus a spread of 4.969%.
(I)The Company redeemed 2.0 million shares on March 28, 2025.
From and including the date of original issue (July 2, 2019 for the Series A, August 15, 2019 for the Series B and February 14, 2020 for the Series C) but excluding August 15, 2024 (with respect to Series A and Series B) and February 15, 2025 (with respect to Series C), holders of shares of our Series A, Series B and Series C were entitled to receive cumulative cash dividends at a rate of 7.50%, 7.125% and 6.375%, respectively, per annum of the $25.00 liquidation preference per share (equivalent to $1.875, $1.781 and $1.594, respectively, per annum per share). From and including August 15, 2024 (with respect to the Series A and Series B) and February 15, 2025 (with respect to the Series C), holders of our Series A, Series B and Series C are entitled to receive cumulative cash dividends at a floating rate per annum which is determined pursuant to the USD-London Interbank Offered Rate cessation fallback language in the Certificate of Designations for each of our Series A, Series B and Series C. From and including the date of original issue (September 17, 2021) but excluding November 15, 2026, holders of shares of our 7.00% Fixed-Rate Reset Series D Cumulative Redeemable Preferred Stock ("Series D") are entitled to receive cumulative cash dividends at a rate of 7.00% per annum of the $25.00 liquidation preference per share (equivalent to $1.750 per annum per share). Holders of shares of our Series D, from and including November 15, 2026, are entitled to receive cumulative cash dividends based on the five-year Treasury rate plus a spread of 6.223%. From and including the date of original issue (September 25, 2025), holders of shares of our 8.750% Series E Fixed-Rate Cumulative Redeemable Preferred Stock ("Series E") are entitled to receive cash dividends at a rate of 8.750% per annum of the $25.00 liquidation preference per share (equal to $2.1875 per annum per share). From and including the date of original issue (January 21, 2026) but excluding February 15, 2031, holders of shares of our 8.750% Series F Fixed-Rate Reset Cumulative Redeemable Preferred Stock ("Series F") are entitled to receive cumulative cash dividends at a rate of 8.750% per annum of the $25.00 liquidation preference per share (equivalent to $2.1875 per annum per share). Holders of shares of our Series F, from and including February 15, 2031, are entitled to receive cumulative cash dividends based on the five-year Treasury rate plus a spread of 5.009%. Dividends for the Series A, Series B, Series C, Series D, Series E and Series F are payable quarterly in arrears on or about the 15th day of each February, May, August and November.
Preferred dividends declared for the quarter ended June 30, 2026 were $36.3 million.
Common Stock
Our certificate of incorporation authorizes 2.0 billion shares of common stock, par value $0.01 per share.
The Company has an "at-the-market" equity offering program (the "ATM Program") pursuant to which we may sell shares of our common stock, par value $0.01 per share, having an aggregate offering price of up to $750.0 million, from time to time. During the six months ended June 30, 2026, the Company did not issue any shares of common stock under the ATM Program.
Additionally, Rithm Capital's stock repurchase program provides flexibility to return capital when deemed accretive to shareholders. During the six months ended June 30, 2026, we did not repurchase any shares of our common stock or our preferred stock.
Common Dividends
We generally need to distribute at least 90% of our taxable income each year (subject to certain adjustments) to our shareholders to qualify as a REIT under the Internal Revenue Code. This distribution requirement limits our ability to retain earnings and thereby replenish or increase capital to support our activities. Dividends declared for the six months ended June 30, 2026 were $279.2 million.
We will continue to monitor market conditions and the potential impact the ongoing volatility and uncertainty may have on our business. Our board of directors will continue to evaluate the payment of dividends as market conditions evolve, and no definitive determination has been made at this time. While the terms and timing of the approval and declaration of cash dividends, if any, on shares of our capital stock is at the sole discretion of our board of directors and we cannot predict how market conditions may evolve, we intend to distribute to our stockholders an amount equal to at least 90% of our REIT taxable income determined before applying the deduction for dividends paid and by excluding net capital gains consistent with our intention to maintain our qualification as a REIT under the Internal Revenue Code.
Cash Flows
The following table summarizes changes to our cash, cash equivalents and restricted cash for the periods presented:
Six Months Ended June 30,
2026 2025 Change
Beginning of period - cash, cash equivalents and restricted cash
$ 2,789,413 $ 1,917,809 $ 871,604
Net cash provided by operating activities 274,774 864,187 (589,413)
Net cash provided by (used in) investing activities (1,973,544) 596,742 (2,570,286)
Net cash provided by (used in) financing activities 1,447,943 (1,227,854) 2,675,797
Net increase (decrease) in cash, cash equivalents and restricted cash (250,827) 233,075 (483,902)
End of Period - Cash, Cash Equivalents and Restricted Cash
$ 2,538,586 $ 2,150,884 $ 387,702
Operating Activities
Net cash provided by operating activities was approximately $0.3 billion and $0.9 billion for the six months ended June 30, 2026 and 2025, respectively. The year-over-year decrease was primarily driven by lower net cash receipts from mortgage loans in the 2026 period.
Investing Activities
Net cash provided by (used in) investing activities was approximately $(2.0) billion and $0.6 billion for the six months ended June 30, 2026 and 2025, respectively. The change in cash flows from investing activities was primarily driven by increased net originations of RTLs and net cash used for insurance company investments during the six months ended June 30, 2026. In addition, the prior-year period included approximately $0.5 billion of net proceeds from sales of Treasury securities and purchases of government-backed securities.
Financing Activities
Net cash provided by (used in) financing activities was approximately $1.4 billion and $(1.2) billion for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily driven by higher net borrowings relating to consumer and residential loans in consolidated entities, partially offset by lower net borrowings on secured notes and bonds during the 2026 period.
INTEREST RATE, CREDIT AND SPREAD RISK
We are subject to interest rate, credit and spread risk with respect to our investments. These risks are further described under "Quantitative and Qualitative Disclosures About Market Risk."
OFF-BALANCE SHEET ARRANGEMENTS
We have material off-balance sheet arrangements related to our non-consolidated securitizations of residential mortgage loans treated as sales in which we retained certain interests. We believe that these off-balance sheet structures presented the most efficient and least expensive form of financing for these assets at the time they were entered and represented the most common market-accepted method for financing such assets. Our exposure to credit losses related to these non-recourse, off-balance sheet financings is limited to $0.8 billion. As of June 30, 2026 there was $10.5 billion in total outstanding UPB of residential mortgage loans underlying such securitization trusts that represent off-balance sheet financings.
We have material off-balance sheet arrangements related to our involvement with funds and other vehicles, primarily related to providing asset management services and, in certain cases, investments in such non-consolidated entities. As of June 30, 2026, our maximum exposure to loss of $1.3 billion represents the potential loss of current investments or income and fees receivable from these entities, as well as the obligation to repay unearned revenues, primarily incentive income subject to clawback, in the event of any future fund losses, as well as unfunded commitments to certain funds. The Company does not provide, nor is it required to provide, any type of non-contractual financial or other support beyond its share of capital commitments.
We are party to mortgage loan participation purchase and sale agreements, pursuant to which we have access to uncommitted facilities that provide liquidity for recently sold mortgage-backed securities ("MBS") up to the MBS settlement date. These facilities, which we refer to as gestation facilities, are a component of our financing strategy and are off-balance sheet arrangements.
TBA dollar roll transactions represent a form of off-balance sheet financing accounted for as derivative instruments. In a TBA dollar roll transaction, we do not intend to take physical delivery of the underlying agency MBS and will generally enter into an offsetting position and net settle the paired-off positions in cash. However, under certain market conditions, it may be uneconomical for us to roll our TBA contracts into future months and we may need to take or make physical delivery of the underlying securities. If we were required to take physical delivery to settle a long TBA contract, we would have to fund our total purchase commitment with cash or other financing sources and our liquidity position could be negatively impacted.
As of June 30, 2026, we did not have any other commitments or obligations, including contingent obligations, arising from arrangements with unconsolidated entities or persons that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.
CONTRACTUAL OBLIGATIONS
As of June 30, 2026, we had the following material contractual obligations:
Contract Terms
Debt Obligations:
Secured Financing Agreements
Described under Note 17 to our consolidated financial statements.
Secured Notes and Bonds Payable
Described under Note 17 to our consolidated financial statements.
Unsecured Senior Notes
Described under Note 17 to our consolidated financial statements.
Other Contractual Obligations:
Lease Liability
Described under Note 15 to our consolidated financial statements.
Interest Rate Swaps
Described under Note 16 to our consolidated financial statements.
See Note 25 and Note 27 to our consolidated financial statements for information regarding commitments and material contracts entered into subsequent to June 30, 2026, if any. As described in Note 25, we have committed to purchase certain future servicer advances. The actual amount of future advances is subject to significant uncertainty. However, we currently expect that net recoveries of servicer advances will exceed net fundings for the foreseeable future. This expectation is based on judgments, estimates and assumptions, all of which are subject to significant uncertainty. In addition, those certain limited liability companies which hold certain of our consumer loan portfolios have invested in loans with an aggregate of $125.6 million of unfunded and available revolving credit privileges as of June 30, 2026. However, under the terms of these loans, requests for draws may be denied and unfunded availability may be terminated at management's discretion. Genesis had commitments to fund up to $2.2 billion of additional advances on existing mortgage loans as of June 30, 2026. These commitments are generally subject to loan agreements with covenants regarding the financial performance of the customer and other terms regarding advances that must be met before Genesis funds the commitment. Rithm Capital has invested in various CRE projects. As part of its investments, Rithm Capital is required to fund its pro rata share of future capital contributions subject to certain limitations. As of June 30, 2026, the Company has an unfunded capital commitment to fund up to $73.4 million on an existing loan to a certain CRE borrower. As of June 30, 2026, the Company has unfunded capital commitments of $518.4 million, of which $28.0 million relates to commitments of consolidated funds. Approximately $129.1 million of the commitments will be funded by contributions to the Company from certain current and former employees and executive managing directors. The Company expects to fund these commitments over approximately the next 8 years. The Company has guaranteed these commitments in the event any executive managing director fails to fund any portion when called by the fund. The Company has historically not funded any of these commitments and does not expect to in the future, as these commitments are expected to be funded by the Company's executive managing directors individually. Additionally, the Company, through a consolidated subsidiary, entered into a joint venture which the Company consolidates, with a third party to acquire an interest in an affiliated fund. As of June 30, 2026, the unfunded capital commitment to the consolidated joint venture was $25.0 million, of which $20.0 million is expected to be funded by the third-party.
INFLATION
Substantially all of our assets and liabilities are financial in nature. As a result, interest rates and other factors affect our performance more so than inflation, although inflation rates can often have a meaningful influence over the direction of interest rates. Furthermore, our financial statements are prepared in accordance with GAAP and our distributions are determined by our board of directors primarily based on our taxable income, and, in each case, our activities and balance sheet are measured with reference to historical cost and/or fair market value without considering inflation. See "Quantitative and Qualitative Disclosures About Market Risk-Interest Rate Risk."
Rithm Capital Corp. published this content on August 04, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 04, 2026 at 21:25 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]