New Residential delivers positive financial results

Group reveals the latest on its origination and servicing portfolios

New Residential delivers positive financial results

New Residential Investment has released its fourth-quarter (Q4) and full-year (FY21) financial results, rounding out 2021 on a high note.

The group, which owns mortgage lender and servicer NewRez, reported that its net income increased to $160.4 million ($0.33 per share) during Q4, up by $14.3 million from Q3. For the whole financial year, net income was $705.5 million, a decrease of more than half from $1.46 billion in 2020.

New Residential’s core earnings fell from $209.9 million in Q3 to $191.9 million in Q4. However, earnings were up from $607.2 million to $693.2 million year over year.

Read more: New Residential delivers positive financial results

“As we look ahead in 2022, we are extremely well-positioned to benefit from the current rate environment given our large portfolio of MSRs and our complimentary operating businesses, which should help drive earnings and book value higher,” New Residential CEO and president Michael Nierenberg said.

The real estate giant’s mortgage origination business saw a pre-tax income of $101.5 million in Q4, down from $177.5 million in Q3. The segment funded $38.1 billion in unpaid principal balance (UPB) during the fourth quarter.

Meanwhile, its servicing portfolio grew to $483 billion in UPB, up by 1.5% quarter over quarter. As a result, segment pre-tax income increased to $127.5 million in Q4 from just $15 million in Q3. The firm’s MSR portfolio totaled roughly $629 billion UPB in the fourth quarter, down slightly from $635 billion in the previous quarter.

Additionally, New Residential expanded its single-family rental portfolio by approximately 675 units and acquired $196 million of non-QM and investor loans.

In the first quarter of 2022, the company expects to produce an origination volume of about $25 billion to $30 billion UPB and continue to grow its servicing portfolio to a range of $490 billion to $500 billion UPB.

“We will continue to prioritize reducing expenses and achieving synergies across all of our operating businesses and look forward to executing on our strategy of combining these businesses with our investment management expertise and unique portfolio of investments to drive attractive risk-adjusted returns for our shareholders,” Nierenberg said.