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New Residential Investment (NRZ)

Participants
Kaitlyn Mauritz Head of Investor Relations
Michael Nierenberg Chairman, President & Chief Executive Officer
Sanjiv Das Director & Chief Executive Officer
Nicola Santoro Chief Financial Officer
Kevin Barker Piper Sandler
Douglas Harter Crédit Suisse
Trevor Cranston JMP Securities
Bose George Keefe, Bruyette & Woods
Eric Hagen BTIG
Henry Coffey Wedbush Securities
Mark DeVries Barclays Bank
Call transcript
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Operator

Good day and welcome to the New Residential Third Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kait Mauritz, Investor Relations. ahead. go Please

Kaitlyn Mauritz

Betsy thank you, Residential's morning, I'd everyone. quarter Great. for and joining to you earnings New us like XXXX Thank call. good today third for

are to Chief Financial Executive of President and reference today Joining are and CEO me morning. Also Officer Officer President, earnings Nierenberg, Residential we Baron respectively, Sanjiv and Santoro, Residential; Caliber. and Das New -- and and Throughout me Nick Officer of Residential Michael morning, New the with Operating was New today Residential. Chief Chairman, Chief are that New going the supplement the posted this call of to this website Silverstein,

so, you to encourage you presentation If done download not have I'd now. already the

point disclaimers supplement statements. statements the press will contained may filed I'd review Before our and quarterly SEC. I turn statements, release the These encourage differ call over are with review that and to in materially be today statements reports out uncertain the forward-looking earnings to their the like by nature, Michael, and actual risk our forward-looking and annual from certain to you in results. factors I'd regarding

to to be GAAP our reconciliation financial call. non-GAAP discussing of And Michael. we'll with directly supplement. measures earnings the most measures today's over these turn during addition, In can call some be in measures the comparable A found I'll that,

Michael Nierenberg

$X.XX at lines forward. investment our as forward. our super and what morning, Thanks from core I'm our our quarter, is our for company today. portfolio grew own our today we despite quarter This our value creating everyone. the The true from $XX.XX we drive of higher end past for company to $XX.XX us. through ended go our thus Good we book earnings and company The differentiating the unchanged Kait. of look and $X.XX a essentially the to end back manufacture ability should to going us earnings lines, that for earnings to is mean operating Thanks, where assets different recent over Q fact joining QX. business go is look as for for note continue excited the factor this the and operating history, the versus When to business we increased combination shareholders we XX-year --

to it's this ahead, With to are is rates a announce portfolios the environment. tomorrow outlook of beginning stay our shape for tapering higher the of like advantage macro likely like here looking while, the take and inflation Fed to great in seems

much Our extremely should this and MSR do well see portfolio scenario. slower speeds in

really of Caliber platform in the of great our During technology makes top lines mortgage the quarter, and talent, closed business players a we company our terrific space. one The those which origination our addition transaction complementary business. five transforms

not announced acquisition fixing will of the business. the very but the which assets our sheet of of coupon which we for real our this quarter, loans to and strengthen balance be Capital operating single-family providing also will believe market good create help development the estate of only into a family companies acquisition SFR Genesis industry integration and for the the is a investors We During leader homes. up in developers our and high grow business short-duration will

We December. to in expect this close transaction

X,XXX provide market single-family very that the up believe still Regarding should a year, space, roughly now robust units. are known while on rental we business. the supply issues, XX% as the prices backdrop are business, for a the to rental favorable home SFR along And also housing up with we

as for I which MSR amortization portfolios, side, to On our are the will investment beginning great portfolio earlier. we slower mentioned see be

daily from business is our as Citi, XXXX HLSS, business really securitization XX% to the acquired Genesis acquisition posted from per operating getting grown business. online will million that, of agency we agency was is company X. time, to large our what, transformed forward our fully as And Ditech. leverage portfolios in X.Xx from has as driving I'll away earnings all net which assets With MSR of business I think, continue into as GAAP $X.XX continues $X.XX purchase has and our balance in diluted we've no then When the earnings XXXX, diluted of going MSRs. we we on QX highlights. acquisitions look acquired of now Page businesses in NewRez. levels been that forward. financing, When million for be income, Xx an of financing refer be And when share. XXXX, full. look share, assets from about our we've seen we that's loan again Overall which think up and QX. triggers, at go In our $XXX.X supplement wonderful are business X; in and our and licensed. higher begin Over MSRs the provide 'XX, our creates years. per you call our to sheet. at from Again, Excess portfolios $XXX.X roughly through line, or to company to fast away to time is Caliber vehicles our we or you high-quality for Core $X.XX one a Our created our mark-to-market to and excess lowest evolution again, Page I'm robust NRZ roughly of acquisition

billion, quarter economic total quarter yield billion equity as that's Cash from Third on up return $XX.XX, September. dividend, end $X.X roughly the net the $X.X and $XX.XX dividend X.X% liquidity, value of X.X%. to common of book $X.XX, total, and

our a during the think at in well the this quite deal preferred the to is acquisition our is about $XXX the we common the known Genesis we one the Caliber. common -- a and year for business-purpose million business the and coupon, that things company flip X, his begin with The bolstering During And we raised quarter-over-quarter we're our business, in not really the closed management X.X% good high stock Caliber -- stock we acquisition the likely think dividend fix And sorry, returns that, I'm there. again, the Genesis integration really of and something in we only acquisition really quarter, for balance lending, our which it's April, $X.X believe quarter. also we again, announced going Wasmund should we're that way, do -- third Capital. going about of shareholders, REIT you and I we and good raised of of close We so-called Robert to announced the of provide offering. duration, in along sheet. again, to Page short billion as frankly, leaders assets to by as in economic -- billion will and XX% got When announcement. August and return the between our $X announced SFR team, think

little very, retention away From year-to-date. we'll thus that. but the On continued opportunities And collateral portfolio sheet the in $XX more million increase to $XX now where assets recapture population MSR very our population on perspective, side We on callable. The focus agency and $X.X from billion under call And mark-to-market and non-daily in XX% XX%. roughly $XXX roughly on rates, management. billion about deck recapture not about as of bit side, continues currently we strong. creating side slowing in more Caliber portfolios. QX, amortization the again, strategy NewRez is further, on get balance the also Call talk our a roughly our billion into called remains at that rights is only

advance down our call Page business summary we're and to collateral. Origination bit in it. as go more more delinquencies able be So of again, mortgage X, going balances we of think of as the servicing and little decrease, company. a and that a just about to

-- As agency Genesis now. other you core our we a to the securities. of both think mortgage $XXX to that an portfolio north But business portfolio, in is of right a keep portfolio. businesses, between the company company well. bit is and way about One, billion you as around sits hedging portfolio some NRZ will about When overall, little between do our the MSR is full operating of the about origination agency MSR is think think excess some today Capital

is, good REIT compliance. for ACR and need other we 'XX assets The part

housing acquisition $X.X Capital. Capital loans, of market. X, in bridge the loans going not residential is my The us It's I and of market of opening that about mortgage manufacture Genesis nature. Genesis truly so-called really call bottom strategies. billion portfolio think, X. really summary the on construction and roughly business-purpose from page, portfolio, loans residential out loans. on for think you when Our X% part for you loans to coupons a renovation of We're driven are And rest just remarks, And then to loans, company, the think mortgage us, of on X% lending the differentiates by Genesis our Capital back X when in gives Page finally, competing our short to ability of going duration performing about the and balance our our to high-quality assets the pack. again, quick sheet roughly

team with our our assets. rates that XXs. about frankly in business, really, couple inside of with that When low business-purpose And and Page Goldman bit that as as the are Robert a really excited And homeownership that. think Sachs. for $X.X a you the in that less We his addressable lending, intend you of U.S., we're little than it, think business, -- we're possibilities to think And endless. happy those leadership obviously, sat think really So fairly they're about Wasmund we quite trillion. it grow about it's kind and SFR with the you then always market, about stable X, large company,

with some going past you lots starting be, will of and in expect to to purchase California, to the there continue. changes course Baron some that that we robust development is see more When development, and But the see, of think recent of on is shortage has the we over little about a talk of going for to And example, sale. are construction think, what of there. market. the Obviously, housing, to going a pretty the law bit. shortage we homes smaller forward Sanjiv you're a been You years. for few think large

extremely provide to is SFR folks. us we in HPA we and X. point, you the areas, some for as the the strong. other market So some really, HPA, rental growth to capital to bit going large think some I'm of today be Texas, to up Start a remain that i.e., the from with a thesis. business. because moving the shifts and been are think of time Florida to are our lot When of I've think becomes again, on, to tax about roughly company. on we're folks going ton states over rates finally, think think an very those on spend housing about At there's and I year-on-year. a this -- Page for we've going the to areas less high-tech XX% that, which Thinking is opportunity is than way affordable about population going then about really a geographic of focused not And this investment where NRZ very little but years, that. different we the that hit of

[ph] have investment on the business. Charles Sorrentino by led portfolio We operating team his a great and

assets Origination by roughly to We led go we Sanjiv company have our that core going up Baron, to we we're earnings share year $XXX going we Baron, and are as as this mean do balance sheet, go to will grow we their intend market to be pick for those a assets as to forward. and forward. business able use think lines I mortgage in team add And other billion we great create

excited are we our said we've very yesterday that excited this quite on capital, we of one possibilities company, in of $X.X probably great and highest frankly. get our pool about to I we morning Page where stand, the of billion XX, shape. ahead. the So during cash and I board very about this that call Tailwinds, our prospects had meeting, the for think ever, very, the numbers liquidity,

as we We going forever to probably forward. retain capital are on sheet more balance go today and

of Sachs continue to and going believe, macro meetings. just lot their forward yields, a brought think inflation. We've rate picture. there. in has about continue couple we the global about we I think of pulled to the in some belief actually out spoke We that rise. on economy Goldman and some We DeQuadros Yesterday, about a spoke that John spoke When Ryding increase. to Fed. everybody and Conrad increase the rates the will economists, the note, is forecast So we throw is had XX-year to about we

we're So large rates. that. And shape MSRs, advantage take perfectly should we Sanjiv originations think that in great expected and about increase and our in that about I'll as think let of to increase. situated any be are again. of Purchase you we portfolio Baron talk to

Our about between very XXXX increase non-QM continues non-agency think When I and to projections origination are $X billion is this, during well. probably the think that's billion non-agency in as our -- shutdown and line. we something non-QM, you $X a production profitable business pandemic,

mortgage fragmented When and think U.S. look delinquencies, about look continue you this right and originator we to of the we think market XX%. turn performance obviously when banks, you they five share in And of to our there think our away the where it business you borrower taking Sanjiv. we a nature then and is, around about increase at XX, and small the share. quickly, enables overall, Page page strength servicer through, the up If are, going you from stuff And I'm the some Top side that's of something then of are that over decline. to origination to think, just amount pick market help real to there any out is the will us I

On to things the a out MSR couple portfolio, here. point of

a roughly our September, everybody. is good money Today, up and mark-to-market hold other a of our as portfolio of non-daily of we As think MSRs the XX% XXX% Cooper, our portfolio, players of the some full subservicing value the in industry. stat still NewRez, $XXX rise, thought. basically in own. have Ocwen only couple MSR refinance. are Caliber financings service here UPB, of XX% We smaller in When end you MSR now Mr. of with to servicing our is for and billion about that rates go

QX XXXX, was that If XX%. roughly of you go to back

our amortization of you real couple QX $XXX quick, XXXX, amortization a throw number the alone, XXXX, on alone amortization NRZ $XXX was to Just the on numbers portfolio is QX at portfolio NRZ million. million.

QX in seen XX% the are So a from roughly of decrease in XXXX. where XXXX we already to QX you've highs

mortgage in So as as MSR to kick XX, when you decrease portfolio for company to about going only that's think MSR add not in company. continue beat going speed. way. little And to earnings those a to higher go I'm should big Again, activity. to rates, the here, our dead see in, potential up value value, bit book a there. Page a portfolios XX. slower horse Page call right a

out As million quarter, I pointed collateral. in XX earlier, in $XXX the third deals we called

again, callable. to I billion on decrease $XX today of think the roughly QX our do with delinquencies call need to probably still same. currently And roughly that population, about track We is balances advance XX% right and to decrease.

frankly. On Today, X,XXX cautious, SFR quite pretty been we've we units. roughly the side, have

past to the frankly, acquisition the happen Just would lower rates. some of rates cap course put just higher of a see our sense, our in you what backed quite we to couple vehicles. saw We And over in pricing acquisition give we weeks.

that focused continue -- we prudence, there to make that at too BPO to the maintaining on So market be values business, is very proper frothy. very, not sure looking on just

smarter much Capital grow make business. to continue the that us a folks much addition We business And of Genesis the is better, going to again, there.

we peers industry. look of long-term On at of today, investment about the are to of opportunity Caliber, our I some the portfolios the comparable Mae in the as business, think acquisition the EBO Ginnie our with side, that

the peers lower industry. overall of much however, some than numbers, P&L Our in today, our are

fair there's amount there. I So think of upside a

expect business, the going $X about roughly advance to our I'm and $X we to efficient balances; again, in very, think be is do very right to channels continue the virtually when own you mentioned And that whether ahead. Financing and in billion billion forbearance Servicer and extremely And then to see we side. non-QM, excited our other lot lower loans, areas manufacture to unchanged. and opportunities business levels a year. there. lower ability other assets, non-QM next call we about As of it I spend time lies on not about what there, think we're

my side, excited Really, close stand. where I'll company and just then mortgage the Sanjiv. really about over turn to comments On we it

There's of a to lot basis. side. large spend a technology have We work go-forward a on on do the

We have a the lot side. of work expense to do on

of rate roughly Our if in if expenses, XX% annual to an $X.XX where XX% about billion run when to about that's of think could $X I think $X expenses, out take and we are we a you expenses, share. roughly roughly

confident work lot a be far to there. get I'm and leader. Sanjiv for caliber we're we're And company. of think it that back a there's a market of to do The Sanjiv? over makes to I'll there. acquisition with turn do I better So that, going I'll us Q&A.

Sanjiv Das

you, Michael. Thank

So the call I'm earnings close excited first the to Page XX. join acquisition Caliber. I'm you all on of since in the of

and begin quick by the a integration on update between NewRez. Caliber you me giving Let

progress of also come have and and together wholesale As since like. terms after started both first our we've teams Michael even the had will pretty thinking have that, have through both platforms both what now integrating much across mentioned, business, closed, a technology you or we in operations. combined made days that on amount right made unified can I we we tell tremendous correspondent leaders XX tremendous team. integrated sales And of sides, our with But work in we that progress the into look in it announcement. one

tech platform. take know, through little these of know improved will we we but things consolidated all of that you bit some time As a a efficiencies drive

integrate channel. of next the continue two Over our will months, origination rest to the we

Overall, the we very XXXX, expenses, unchanged. and and with two see so is stays working focus because on the of retail companies achieve platform strong a largely business pretty Caliber to much we on that full a confident will are also our consolidate with stay basically very progress mentioned. platform it's part about platform. We're unchanged. the servicing across integration how It Michael So through pretty pleased ability servicing the and full to as through synergies large our DTC

synergies have the shown integration right on we chart. As which identified our of the of already part efforts, are

in goals, achieving shown think progress and in some But we've these had two -- mentioned the Michael will financing call, it's our we now are combined and very cost numbers that know financing since months which an towards We we clear platform. we've made very costs in example. even savings earlier I know closed, I million before. significant of roughly for a have this annually in established is the significant saving our the $XX be

as We all very are, million of in business. $XXX to $XX Net-net, our of million that on confident $XXX in platform improvement million what of $XXX $XXX on and to about combined cycle will rate wanted. -- being critical achieving production and $XX to the synergies rate the drive We've know doubling automation alone, for actually metrics of cost to million run million in run are operating million 'XX of about and in short we time Michael digitization across million look we falls that the down cycle a annualized cost side, $XXX by that make through sure I time. talked

performance our share during Page with the combined you excited quarter. On solid I the have, am the business of origination to we XX, side, on

volumes adding Now up together. two the the this and just is math literally stitching

haven't synergized see by This quarter. can so growth. origination, income in really million driven to segment was the origination -- third pretax in volume the platform speak. $XXX.X made origination But our We you that

is mix. origination That on way. impacted very in in company the volume change origination left-hand right essentially can the a positive very also that the growth margin in of significant volume. on a And significant in of has mix in terms and see bottom very our of profitable not a mix large see but a volume only you very the our in combined in margins change the terms can You the company chart, very volume

August think billion been actual that As And been fourth third largest the -- originator, acquisition a reported includes $XX.X stub volumes the nonbank through this us billion is a end including towards of scale. of fully the mentioned, results and was banks funded us if and August, market I $XX.X the would share the which completed, Caliber's the end of in acquisition of think makes owned the the a a when only September. company combined which, of origination lot share of you performance it Caliber nonbank because XX the the closed quarter, volume of it decent originator includes But largest was Fargo. is give Michael period from August and market of fifth a had through now all as would X% roughly largest fourth I have Wells see

billion $XX.X the to billion. In context but compared better -- out entity. Our metric We locks was on at show -- $XX.X market, both NewRez by pull-through only X% combined side. as basis. pro we but up that to on billion for sorry, were funded break and combined appendix, we one volumes, a Caliber the the margins adjusted on volume were will also the in NewRez DTC remained And channel We well forma as strong know to additional was future, provide about quarter-on-quarter. than very did slightly growth and flat down we $XX.X Caliber compared corresponding

see, margins, across significant has mix many and retail-like can monoline pretty the margins This and of you to terms rate are is changed much perform differentiator a our channel enabling which As very of very us materially the peers. higher environment. all retail in stable for

added Additionally, with each scale platform has overall our across channel. combination, the

that a annualized, X-channel is sale it, in Each that if strategy volume, natural you against billion. on basis business essentially at XXX ago. in the $XX pressures This it's roughly look each cycles. quarter. overall QX channel gain of in XXX us We you Caliber the a $XX on profitably with all channel bottom been We one hedges billion if see been years enables reported just the last the left-hand grow to channel, margin wholesale had providing in you margin any owned channel, the the about If saw to terms at would for now points. of if across histogram quarter. This side entire basis channel. of annualize saw wholesale have couple will We origination points

whole, corresponding On easing high, margins as the little remained quarter price improved remained direct-to-consumer strong, albeit actually with margins of retail third the in in off a quarter-to-quarter. bit flat wholesale wars because the and margins wholesale and

power Just for very as billion. is dynamic we in a terms mentioned year on the origination powerful entity. On $XXX to the fourth ecosystem billion $XXX $XXX funding move billion originator quick. at of billion MSR in the and Again, Slide origination guidance the of earlier, quarter to $XXX XX, about of factors, our I'll Michael organic and it recapture differentiating NRZ for in production combined real estimating to accounting for to That funded are put XXXX billion reduction. $XX would roughly full billion seasonal $XX of

the recapture that can have You record. our in our ideas between show was performance Again, our and companies practice at to exchange point mainly but Caliber quarter-on-quarter. it see this best both continued confidence and we improvement of every ability improved track two in NewRez an

magical investments in with know You companies. gap rates it's of get there in of the we've closing going to heavy the two track XX% pretty good the -- experience, our at over That, a see terms between Caliber. we combined and can consumer had really record recapture us

purchase Net-net, of down, the will we articulate a industry us closing purchase opportunity In tough do market where their thought industry the opportunity this the numbers table opportunity franchise, performance retail lift refinancing next refinancing but as you. slowing we recapture we'd because portfolio is expected about servicing and come is past. I much this a a top us. to some the us sees ability refinancing that is recapture recapture size about to of and for an the geographies talks purchase Today, right the book little believe industry a tend in the huge borrowers for purchase larger talked purchased and in be have mainly to captures immense of existing base recapture we to the do segue home. market. potential purchase XX% which with very something that not I'll the advantage servicing in coming larger us strategic great XX, the on is Slide recapture speaks The in a will mitigate talk these purchase. of down. The across that combined quickly next help give significant earnings a sensitivity retail down on have to to page that for bit. It's ability our recapture in our much about a transactions purchase. on Caliber Our the with volumes and relative rest very our servicing that the retail franchise to is recapture even about a gap who strong on

steady to rise roughly purchase talked a 'XX. purchase. to our margins strong, has lending, we've about in cycles. know, in The purchase leader you been DNA is that As our and in volumes We've it's a contributed always MBA and forecasting fact rate across XX% it's consistent

dynamics urban-suburban mentioned taxes and As our we know the the demographic the factors be really before, franchise. Michael as such market around well bodes to that a state This millennials shift, support backdrop strong purchase. will for tailwind

us borrowers to a realtors relationships local that set already home. and and them buy still that apart Our local platform help has our brokers leverage proven

overall $XX.X XX% know in volume, purchase billion in we at we At purchase over-indexed to market second our quarter. quarter of share. combined total purchase increased volume our X% that are Our roughly to third share from X.X% compared

the you share. page, correspondent goal retail right of our And this a Page in earlier distributor of market a little to we is. it's but think going market. about bit I of natural Michael origination the bottom can of you to purchase channels, purchase XX, total not over-indexed see each our account talk market each place On in our to our a show venture, On is share land. XX% channels, for It's we I'm the mentioned the over how these fragmented mix wholesale volume. joint

In out call, last market XX%. at fact, our number in had explicit terms our we growth put of an in share

you get there. we Let through take think me how we'll

manufacturing I positioned are in our channel, we channels. across as that our the share those scale, believe digitization This channels. strategically each path into automation distribution, through we and outsized mentioned each and We brings page of a products before, capture four each channels. shows can at of technology our platform And that our within process across

are In to continue share technology, and market profitability. we we our we make will cost servicing, our and ethos that focus a we progress at have to common market is share capture continue view will make it opportunities. As while will through momentum our chase of confident that can Again, I'll that continue goals, the regulators. on on XX. Slide in we we Michael share not us to focus carry profitability, that to words, responsibility on and liquidity on growth strategically other sure Last we that slide,

on on end our $XXX forbearance diligently Overall, X.XX% to at service nonbank entire billion billion the third our of as million servicer. third MSR billion low and servicing billion As Of loans with $XXX of of servicing continues us We the That to $XX pretty size UPB we have X.X fourth find year, $XXX that the now platform position our parties. of team and loans in behalf at largest quarter, to of homeowners portfolio representing customers. represents NewRez $XXX represents portfolio in will Caliber servicing billion our be work servicing rates billion, a $XXX now owned combined servicing end continues roughly the of and solutions. that the be to the approximately UPB. anticipate would of

As disruption, achieving on are we of recapture servicing strategy evaluate turn borrower focused me of with maintaining diligently continue retention of bringing of our Michael. our And and that, minimizing platforms, to together our let this base. any we high economies to borrower back scale and existing levels

Michael Nierenberg

Thanks, up don't Sanjiv. operator it for turn Q&A. and back open we Why to it the

Operator

comes Kevin question [Operator Instructions] Barker And the Piper Sandler. first from with

Kevin Barker

on about integrated, volume what that next thanks an And the entity it operating run expect help then for and would you question. would you you from against pretax combined into origination get to Caliber just my year-to-date? think maybe think margins morning, to year be taking the Good and then idea you rate NewRez wanted measure about us could XXXX? I when when

Michael Nierenberg

guidance? for forward words, in you're other So looking

Kevin Barker

Sure. what on can combined just think Obviously, looking UPB operate Actually you entity. per around -- -- do depending an -- these like basis the will cycles. move at But... you on businesses on we're for for when you no, it originated operating

Michael Nierenberg

revenue in origination the go $XXX-plus the I business, don't was top about back origination gain I when speaks first about expenses, Why when look expenses and at for to you million sale line the side. or on Sanjiv quarter the take crack speak our on about

And higher to and I back goal a really, of Sanjiv begun when we that's reduce -- could whatever for and work efficient bear a that significant. us the use step frankly, really is that is for our has for of more But drive obviously. more quite the is the where technology can, net HX to get lot best to speaks when think to as company continue we us. the expenses some to which So reduction the there has the our Caliber ability fruit side we we on integration reduce and and to earnings take mean, do do, expense going our work I

trillion, look we to And the look $X looks going $X.X-ish stuff, the 'XX, this steady into you and volumes, run like. be when production MBA look you trillion. was 'XX XXXX production, forward at And rate -- it's XXXX $X.X trillion. at roughly what if was the XXXX when about XXXX, projected origination that's look you at about at then As

that come think able we're less market pick up take be share, to number to think market obviously to that that. so $XXX be the million expenses because going of able volume to up you're but down will going out to of doing be amount out reduce we're will expenses, share. basis come We we a pick as going on we So, expenses go-forward

able I I operating And the amount side, you but on So expense how take real expenses helpful to in a think that's my of be expenses. pull combined on out if the to when think, for about it. significant on we're I side able don't make, going know the that's lever organization, that's amount to think the to initial -- there. that of us be that's But take large

Kevin Barker

Okay.

-- be versus the higher are prior? is expenses Caliber. Caliber origination just in could right? They be So, generated operating that producing channel was sale higher given margin significantly have there do today Caliber gain obviously -- operating have on the and margins also think at they what the platform but distributed different would accretive you the So in channels, pretax several to

Sanjiv Das

Kevin. Yes,

stating sale quite higher. margins that from in right the fact you're caliber are They're also gain So on stable.

sale on one of margin on I a on pro saw basis. slides the X.XX% forma You a gain talked of about

wholesale our mix Michael think the doesn't in the but we probably more and basis gain talking about compared Our DTC historical has and think, correspondent on about for that this that drop levels. of to sale historical expectation were earlier that today. industry about drop probably much. XX combined Retail is I is much across actually points business We XX pretty points, DTC margins. basis to because at will drop.

we because think for us [indiscernible]. much that margins gain So don't drop sale on the

accretive that will the with substantial margins. addition franchise. combined indicated in that, Our take And to pretty will we again, the roughly our the out. businesses, on sale out is our $X Michael we Michael expenses, non-QM that aggressively as fact earlier, billion, billion pointed as of with opportunity to a expenses be $X.X But overall think gain

Kevin Barker

Thank Sanjiv. Michael. you, you, Thank

Michael Nierenberg

Kevin. you, Thank

Operator

next question Doug The Suisse. from Harter Credit comes with

Douglas Harter

dividend given the and of Thanks, raising right versus dividend, the your business? and you Michael. looking kind retain that the capital now earnings talk -- level to of, how reinvest your kind for of back to about potentially into you're expectations use balancing raising Can

Michael Nierenberg

Kevin question, Good -- I mean, Doug.

Sorry Yes. about that.

our we've shareholders. the north So of be Historically, something how [ph] $X.XX we earnings four we back. handle with earnings. think into always core our to going capital in XX% we're we're here, dividend our maintain look to been of GAAP, think much as that There's of as about about you actually forward $X.XX -- able think a taxable to in hopeful you as 'XX, paying a core, you balance about -- give on the

any that November dividend today. way From the we the thinking January. would X, end perspective, are at paid about it think is, I a is announcement get it of dividend

time. think that So likely the we it's some desire core But consider run that Board our to as I increasing there. rate, would we assuming have dividend, we have has go the a $X.XX

continue the that assets, think as as to I about operate out ability that's the to the this the But path I want think to as see, slowdown opening all the continue don't we portfolio, we we to but our own see No and going in capital. long my investment give when speeds, that my So, point and at pointed future. likely we back are way I some think, increase take. another be just manufacture we're do to promises in great in there'll the remarks,

Douglas Harter

that. Great. Yes, Michael? I appreciate

Michael Nierenberg

Anything else, Doug?

Douglas Harter

No. I guess.

event kind start 'XX that guess, Just of that Or that a do we those cost you the something really start or saves to through? side for -- start coming start in of ramping quarter? how is see more really I start expense Is we to -- fourth actually can the quickly up? it on

Michael Nierenberg

day we say picked initially we around stuff. of is expense I in when the side, up one, $XX think some What got synergies would financing million I on roughly together, all the

basis, up. going immediate QX or on see all that's that annual So pick So Keep mind, right? an to one QX. you're that day not in was in an

real expense to you're in the 'XX to think see are going begin forward. be saves as to going we I go

believe all Caliber scratched have the doing this technology organization the things the Clearly, sitting something significant. something that only side where when table, we morning, the is with we that's you're surface. technology NewRez the side. on is business of have of we we're call around this One this go didn't our personally I

of that is huge acquisition the mess pickup a So when about we of think Caliber.

we're As going Chief and -- we we're the market in go Officer. now. a to forward hire Quite Digital frankly,

the of We number a team interviewing have search; folks. a has been

everybody within that year-end to So Rocket and else. will would we on how company what we'll by the as lab launch hope competitors a which become, that to then get call we frankly, done quite focus

that's So a -- technology else or leading in provider anybody industry. real the

think where on That as these the you'll us I your So be long-winded more going to that's to But help kind forward. I is think question results in we're it's see answer likely headed. of and really will expenses. 'XX

Douglas Harter

you. Great, thank

Operator

from comes Cranston question next Trevor JMP with The Securities.

Trevor Cranston

were numbers higher that of the the like speeds the guess of MSR most around of I A amortization. about context question in portfolio you slowdown thanks. Okay, talking on the some and of possibility was in it rates. and seems

if going get we a could comment and assume Just just how evolving in you from the you was like forward, flat meetings? slowdown could there. just on from I how much of today? XQ speeds curious environment So And maybe we where we if previous prepay in rate are see

Michael Nierenberg

in I a the think about the we're And XXs, that. now we is, there's One NewRez XXs. the talking recapture couple in that keep rates. the factors, it's into we're -- go Trevor, think in of on XXs. I side, Caliber's And

and overall the in is add we'll something to continue see we're between delta think, to that to slowdown speed. XX I XX, So that going

you becomes XX% the as Housing rates think about affordable roughly year, that here. a what really does HPA little I on less a think higher bit mean? little when up move being

So we slowdown. are that expecting

as think, think is November consensus I look down in street forward. -- down we roughly speeds I X%,

So QX a But I of a speeds. think factors going number into that -- reduction go it's slowdown. that are in different dramatic XXXX, real to versus the over QX XXXX overall clearly,

but as that to work due March and we X,XXX% due Our is that were the not organization frankly. just during If the in got we teeth the to today nicely one book call. where billion, We to hit period. of are where one doing forward. is our was math have valuation, XXXX, we our better team. it's the our recovered going quite that's this today, quite value frankly, portfolio, and I market you quite about to than prior roughly hard and go in organization we $X.X-ish we add in MSR the When to morning higher $XXX-and-something turn, think multiple

don't is what higher playing I rates think So, us. really hurt we're for

time. our manufacturing is we good. that's because either us machine were a hurt don't are rates going that back where And where difference lower we versus think today in I

balanced we side. short the higher biased portfolio, of MSR what rates, the doing nature So the around we're are to

remarks. drives our forward. book As opening earlier lower combination I refi's I pointed go value higher we purchase higher higher the think, higher recapture, think, and earnings But of out, in as rates, and higher I market,

Trevor Cranston

it. Got

Okay, for the guys you that's missed see guidance heard very helpful. gave gave guys expectation you thank on And you for margins, comment you an but guys did one on origination channels. the the margins. heading And gain I on sale into XQ the it have the basis, overall then, you But the margins side, XQ? all just on where detail one for different for may on on quick I

Sanjiv Das

Yes, sure. Sanjiv. This is Yes.

Refi So in more getting are the is DTC the are than Obviously, fourth we margins rates. decline in quarter, channel. any population as potentially seeing shrinking, all in other aggressive we with

basis ourselves points for at combined. to XX from So about historical basis margins roughly to points levels we drop up quarter-on-quarter XX-ish we to actually Wholesale correspondent. basis point expect to has of but Correspondent is DTC are drop XX points. kind in picked bracing and basis XXX X

it XXX points the basis stay expect around to range. We

stable So the to wholesale through stay no to retail, then high be continues And of and course, on strong, the X.XX%, Trevor, we X.XX%-ish it and side. at major change, QX. range expect

Trevor Cranston

perfect. Okay, Appreciate it.

Operator

comes question George Bose next from KBW. with The

Bose George

good everyone, morning. Hey

to Genesis. us us Or the goodwill about accretion? any Just a for you as there the there ask created a purchase price? is is to way to wanted about Are disclose that? of to -- first Also, able result think

Michael Nierenberg

Yes.

are X% to marked, earlier, $XXX short-duration upon where coupon, So of goodwill pointed of roughly loans. created loans X% out roughly the very I the million there's as kind depending

marked. should overall about book upon likely, are the $XXX goodwill or depending the million probably I it's how that dictate, going standpoint, we'll about think $X.XX probably on depending loans is to And out million a from is to where those accretion on, think, think equity, is one. I that, early amount. From that's think, the as amount I settle those, of quarter, an million, again, where I upon $XXX business -- $XXX say, way perspective something So to a we capital about

Bose George

there either you the Okay, that looking great. side? at That's have in could complement And -- on things of the are there are at, helpful. terms guys mortgage what things moment? that the Are you services future then, acquisitions,

Michael Nierenberg

some yes. think to horse our is peers of The the acquisition the we're we on our some firms. leading always for like will M&A team at the answer things our I -- out that and and the accretive we water. there that's be are of always for large -- Yes, Bose, hunt business. private look equity

good mortgage that's race going a where to into shareholders. just to ability think of I think feed Sanjiv the make REIT anything, in is operating acquire a earnings in really we how We're gravitated an think continue to want we've amount generate our to and business for Our business of even production, our and assets most going not you said, when overpay to. go echoing about we're That's biggest. for out which be to kind money where don't to we're it. to to will We what about race the gravitate for

thesis effectively that answer what sheet. of Caliber theory, a not, our Not the put assets These are Same side; that about would thesis a excited in what And are accretive. would done. that going then, in the same say, for lot space. on at of whole we're commercial yes. Genesis. that out but quite acquire We capital business getting with creating short which Same things, looking us could the is we're be currently is balance prospects the things to the I on working required. potentially so frankly, business some NewRez there's of do

Bose George

said that decide Okay. the end when you're the actually on follow-up on you one that you Great. think Is That's do comments just your from sounds to line, earlier Caliber then time helpful. choose? It there that up consolidating you what which Is a platform. likelihood you by fair? the technology. And servicing about platform going

Michael Nierenberg

at already that decided. I decided, is that acquisition. the was I That day we Yes. mean announced part the think,

is over going something we'll continue ourselves team [ph] those far side the on because to Rene stop to And versus that nothing And Gilats couple is Caliber in how everybody we great going that. platform something us we HXO asks they've go no Again, business. Rocket. said, always Rocket. the expand NewRez where now. I I job on done think superior there's There's had I always calls prior against has So that years what back compete their of past never to and about the built, and think have to do guys we're disrespect that's earnings Sanjiv to that a and to the

Bose George

you. Thank great. Okay,

Operator

The with next BTIG. from Eric comes Hagen question

Eric Hagen

Hey, thanks, good morning.

get discuss margins back margin. versus valued to between the portfolio, Another the Refi when differences any follow-up then the they in compared do end And environment differently on in purchase any loans? you MSR up for loans this Refi? the loans Can purchase

Sanjiv Das

are I much Also, terms relatively low today. we Yes. duration. margins originated DTC that in loans today, to consumer longer they of -- XX given in and have when our that where the these rate. see rates, that cases certain businesses, at points in is the we purchase the things mean, because they loans at our than talking being of that about expectation I'm are book basis these one a side, are is much we joint see our primary they will much obviously, these venture XX stable higher the rates and are on Refi more roughly are

of are of are earlier, our because you runoff them that back cohort What the the far of are that and asked. Michael the Refi money, share customers the fewer of for share point was going fatigue. to in in refinancing the businesses slowing seeing related In to on is is same fact, we question even the of that down which out making refinance

account is we models. taken also that So have in our that into something refinance

your the on answers question duration. that hopefully, So

Eric Hagen

go I it does think -- ahead.

Michael Nierenberg

mark, side. the in the book how regarding MSR on Eric, there's the no loan we difference

Eric Hagen

think like that's need Yes, of how much you hopefully discuss at can activity to capitalize it going point? grows? to was follow-up it. pace capital the then, what outlook that you as be. And on business Got you rights my call opportunity the for might Great. look And could And there? this the what

Michael Nierenberg

Yes.

financing the -- efficient. the is I one is think market extremely

overall continue So as will -- high. billion year-to-date Keep these from to the or that around loan think mid-XXXXs, little as we pretty is mind, most likely desire I to a $X of lot and our we're our loans of loans these south turn XXXX. these deals forward. a running XXXX portfolio, like opportunity, are call we in go bit of

And to get You have out quite to going to to continue up. all frankly. if the cleaned was you're smart, these a think industry figure we'd deals, way call

of interests a pick collapse folks them. rest it of there's up only to capital parts in different would continue to to way a structure own we that Clearly, the forward. expect the of I lot as go in different pipelines on these or you'd factor, out and driver deals the all and call clean I then that, but liquidate REO up the figure think, of side sitting restraining the You'd a legacy those business that's that's a not but you

Eric Hagen

much. you Thank it. very Got

Operator

comes question Henry Wedbush. next Coffey with The from

Henry Coffey

good to? affect little thank of not on it it's quarter, questions. that Yes, -- $XX How morning the my shrink investments And this sort and million million Frankly, question. taking change? picky you or under just a awesome of that of for even prior environment value? gain that What tied is loss A quarter. gain of settlement though $XX would quarter. part would does what core, book

Michael Nierenberg

that in The gain derivatives. the of an sale comes through mark-to-market. relates carrier investments, There's that to on the offset

number quarter. relatively in the that So was overall, flat

Henry Coffey

Okay.

by So the is million $XX what? offset

Nicola Santoro

swaps. by Offset

Michael Nierenberg

So mortgage think, business Henry, it's a on I swap business. long agency and our short, versus our

Nick portfolio, to more if we think and But overall and our on of Nick recompliance. for about have way a step gets and roughly agency to portfolio our reported. have stuff this $X here much about mortgages the think billion is obviously So balance you about keep back we the way take knowledgeable our is that sheet

out, just long. We're to I net fact, higher -- we're in rates. we're As actually net biased pointed not

swaps So that. effectively, have against against that, we

to pick higher, As mortgages value in you're your going side. the likely value on down up income your the go but agency rates swap of move

that just if I'm And Nick, but wrong between it's I against believe and X? down So we're hedged me those correct an up portfolio.

Nicola Santoro

That's correct.

Henry Coffey

income offset is in Yes. comprehensive or... And the

Nicola Santoro

Henry. through comes It No. mark-to-market,

Henry Coffey

wholesale Okay. That's Yes operating business, three, -- helpful. the to was no, equation, extremely back they're getting Caliber four. number side that's of number on the now And helpful. the then

Salesforce of old a but business. talked wholesale unions. which part opportunities thoughts what about? in go they kind and you should be of you Pad You've acquisition sort three got like of there? on that number -- sounds in Or What your unimportant credit of Are business, wholesale away. in other of are there announced Are initiative banks Rocket with the just to channel? that be focus growth PennyMac future wanting It's thoughts step business areas? do. want that confusing terms of not back restart the to Obviously, thinking PHH that what has with still to sounds doesn't willing your Homepoint Core new an it's we about are the and Or with

Michael Nierenberg

that money we shareholders. make everything we've how think clear for about been pretty is we I do

to end view any capital, grow fiduciaries get right? a it's the with if if have wholesale the to chest you could -- even to the on profitable I guess, I At So throw to we're day, -- and we into When not a we counting this of a mean, side. is or we a if price our going channel of we're war about shareholders. where think channel, the a anybody

about arm steady If environment. truly correspondent manufacturing the a a you normal correspondent state think in business, business is

lot money but You're create in MSRs. making of correspondent a not you

the a are a to great we bit. to kind if us put higher, channel of little to that pedal going go for valuations foot So is think on MSRs our

we compete the think now, this when don't going been against into clear war. want I about even where we're has with not. a pretty take and On our he channel, it this normalizes think the to marketplace get If we'll company. a Rocket a going earnings just pricing on in UWM continue on I product. view unless have to wholesale has originate the mentioned war and Sanjiv is price to we anybody not specific to market last We're call, and which price But there's our

Sanjiv Das

am I Michael folks -- lot just we profitability. terms a to this number channel. are may and aspire have terms I'll while I three three. originations, be in certain number I we four And number Yes. in Number but number one. we agree, That's about two, three that talked of are of are number

to UWM essentially have that a distributed the no in other follower we evolve the best that's grow be plan wholesale business, And problem to and is thing. UWM. from the way led the saying has that So a to direction math we I will

business our pretty are so in direct-to-broker opposed just investing distributed And heavily we business. as to our

with shows we business have clients. higher that distributed much share Our larger wallet

geographies. think in gain to touched points it's kind channels about cost actually most for sheer of That's of are basis will a corresponding much per Our And this, on channel thing different shows fantastic direct-to-broker business we that distribution us our lower presence how share loan. we distribute of of important our roughly outline is non-QM products it. light I'll wholesale that the because at operating and a cost and Michael XX say

hand, other in opportunities lower. realize also that the On much recapture wholesale we are

channel treat run And channel as hedge wholesale. officers case a strategic comprehensive a $XX a $XX to how retail in billion move billion maybe to a But I billion to view of to profitably. retail we so to loan it as we think we have want pretty $XX

Henry Coffey

very you much. Thank Great.

Michael Nierenberg

Thanks, Henry.

Operator

Mark from question with next DeVries comes The Barclays.

Mark DeVries

channel. reported, benefit follow-up you what higher-margin quarter to of Can basis sale to could on direction on XQ -- you the margins. by can margins the obviously from in I you color your compare a how margin kind XXX points appreciate XQ, XQ give businesses. XQ? gain Caliber of anything the on us of the had a I you're Thanks. on But going full question the

Sanjiv Das

Yes.

in said on pro X is forma So QX, basis, math around we're XXX basis Even basis In have of a my points XXX so probably we we basis roughly factoring that are points, QX. done the that I'd say would us what of right. particularly drop in a -- allows point points, drop. in DTC, XX lot retail, basis point our mitigate drop a XX channels, we basis mix to it's seeing in a in other though

So X net-net, down points. basis

Mark DeVries

business a more to helpful. of acquiring, Is you're originations? great. easier market? loans Genesis think the from expect business? we these is kind should around of And kind That's production Okay, cyclicality housing originate in particularly the steady you where about then, a frothier that Michael, it it's them how that lot business for of a Or -- do a

Michael Nierenberg

I question. a it's good think

to be think going more production. steady I it's

is with quite Goldman. under a that production quite increase We're different lot where team of certain at think were based I on initiatives has they going circumstances that, the looking frankly, to couldn't do frankly.

to for the certain significant. channels going in be think I So to pretty opportunity us grow there is

Doing this the the wrong is management from the loan And anything leading team over is bring but is this, there's than far think acquisition solution And I acquisition, The much a really we going other -- sidecar about path better on management folks investment our that only the there a in of just origination earnings stuff I a to that I our Genesis through bolster calls, for not to past said there with team. going Genesis Not we're with add down also, the question channels. two Charles think, an lead great acquisition we're on the this potentially investor. on and group us spoke just address a place quick I business, in of to we it's going better the another of business again, SFR team, other overall queue to other more this think as with the side a wanted but SFR company. an or in puts different go the -- to that was remarks, our earlier if the business. going thing -- to management

So we're about pretty pumped that.

Mark DeVries

with of in have acquisition? estate Okay. the Are from that you kind real any Caliber synergies the business markets there new with local distribution

Michael Nierenberg

take, or entire LOs mean think it, have I if has, absolutely. mean, I give about the Caliber think in X,XXX branches, you we I XXX system.

be have as accretive we brokers. what all friends It I there and call, the of more products out a retail would roll highly to family to should of sudden, well. So

we continue thing a we standpoint. scratched So the And across acquisition overall at operating operating an to it our we've if do about as logically platforms, you all only of synergy look we when think service actually to from it grow and our the strategic is look platforms.

to You in think I support about do and and businesses more how generate income one you businesses is think each overall services what our again, the industry. more It's and company. think, these servicing, unparalleled about could of underlying we anybody we else that -- more the think have provide actually I for

Operator

the Nierenberg over I This for concludes remarks. turn to our would like Michael question-and-answer conference session. any back closing to

Michael Nierenberg

So, thanks thinking necessarily I'm not this related to but of to joining this morning And everybody to was our work November X. for company and is I us. walking

So life at really goes all step a as and back look we quick. take

we're dividends to price and are higher I think back to of look continue and the doing to do where Hopefully, March and higher we drive for -- days stock our XXXX, what now. I share we earnings higher shareholders.

for thank thank support you talk if I to new all We the and we'll your in sure again, So before. you. I'm not year, you

great have everyone. So season. Thanks, holiday a

Operator

presentation. you The attending today's concluded. now has Thank for conference

disconnect. now may You