ONITY GROUP INC.

Total assets decreased by $265 million, or 2%, between December 31, 2024 and December 31, 2025 mostly due to the decrease in Reverse loans held for sale pooled into HMBS, previously reported as Loans held for investment, partly offset by the growth in MSR and Loans held for sale. The $1,318 million net decline in reverse loans was driven by the runoff of the portfolio exceeding originations since the acquisition of the $2.9 billion portfolio of reverse mortgage loans from Waterfall in November 2024 that is relatively more aged (faster runoff). In addition, servicing advances declined $94 million largely driven by a year-over-year decline in delinquencies and our collection efforts. Partly offsetting these declines, our portfolio of Loans held for sale increased $602 million driven by the acquisitions of reverse mortgage buyouts and the growth in our Originations pipeline, predominantly Ginnie Mae loans, second-lien loans and non-Qualified Mortgages. Our MSR portfolio increased $359 million, or 15%, mostly attributed to $598 million MSR net additions partially offset by $255 million runoff. Other assets increased $163 million, largely driven by the reversal of the valuation allowance on deferred tax assets.

Total liabilities decreased by $450 million, or 3%, as compared to December 31, 2024 largely due to factors described above. Our HMBS-related borrowings decreased by $1,260 million with repayments exceeding new securitizations after the $2.9 billion acquisition of reverse mortgage assets and assumption of HMBS-related borrowings in November 2024. Advance match funded liabilities decreased $75 million consistent with the decline in servicing advances discussed above. Reverse mortgage securitization notes, net increased $417 million due to the issuance of OLIT Notes in 2025 to finance the acquisition of reverse mortgage loan buyouts. MSR financing facilities increased $327 million following the growth of our MSR portfolio. Mortgage warehouse facilities increased $178 million due to the higher Originations pipeline loans held for sale balance at December 31, 2025.

Total stockholders’ equity increased $185 million, or 42%, during 2025 mostly due to $190 million net income (including $120 million reversal of the valuation allowance on deferred tax assets) and $4 million compensation related to equity-classified awards, partly offset by $4 million dividends on preferred stock and $4 million exercise of common stock warrants by Oaktree.

Cash Flows

Our cash flows are summarized as follows:

Our operating cash flows may be summarized as follows:

(1)Loan acquisitions are servicing released, i.e., cash outflows include the servicing right component of the acquired loans, and most of the loan sales are servicing retained, i.e., the cash proceeds we receive exclude the value of the servicing right component that we retain, resulting in a net operating cash outflow of $386 million and $248 million for originated MSRs (OMSRs) in 2025 and 2024, respectively. We generally finance these new OMSRs along with purchased MSRs (those reflected as investing cashflows) with MSR financing facilities at advance rates up to 70%.

Cash flows for the year ended December 31, 2025

Our operating activities used $748 million of cash during the year 2025 largely driven by $991 million net cash paid on loans held for sale. These net cash outflows on loans held for sale were attributed to the growth of the pipeline with loan production volume exceeding sales, $386 million originated MSRs and the acquisition of $272 million reverse buyouts (financed with our OLIT securitization program). The year over year increase was mostly driven by higher originated MSRs.

Operating cash inflows included $69 million net collections of servicing advances, driven by lower delinquencies and loan resolutions in our non-Agency MSR portfolio.

Interest paid ($280 million, excluding interest collections) increased $29 million year over year, with higher interest on our MSR financing facilities, mortgage warehouse facilities and reverse mortgage securitization notes in 2025 due to volume growth offset by lower interest paid on our corporate debt after our successful refinancing in the fourth quarter of 2024 and on advance match funded facilities mostly due to a decline in average debt balances for servicing advances.

We generated $461 million of other net operating cash flows, that included collections of servicing fees, ancillary income and other revenue, payment of employees and vendors, and other cash receipts and disbursements. The $461 million net cash inflow generated by our business, mostly the servicing business, was largely consistent with the prior year (increased by 3%) and was primarily re-deployed to invest in MSRs and finance the growth of the Originations pipeline.

Our investing activities provided $1,847 million of cash during the year 2025. Net cash inflows primarily include $3,032 million cash received in connection with our HECM reverse mortgages, partly offset by $953 million new reverse loan origination and tail advancing. These net collections, and their notable increase as compared to 2024, are mostly attributed to the runoff of the relatively aged portfolio acquired from Waterfall in November 2024. Loans are repurchased from HMBS pools once they reach 98% of maximum claim amount and collections are generally received from assignment to HUD or liquidation. Our investing activities also reflect a $235 million net cash outflow related to MSR investments, through bulk acquisitions or purchases in Co-issue and Agency programs. Our net MSR investments in 2025 increased $207 million when compared with 2024 investments due to our growth strategy. As discussed above, these MSR investments need to be combined with the $386 million MSR originations presented within operating cash flows (vs. $248 million in 2024) when assessing financing needs discussed below.

Our financing activities used $1,100 million of cash during the year 2025. Net cash outflows primarily included $2,999 million repayment of HMBS-related borrowings, partly offset by $1,086 million securitization of new reverse loan origination and tail advancing. The net financing cash outflows indicates a runoff of the portfolio that largely exceeded originations in 2025, as discussed above as part of the investing activities. Our financing cash inflows also reflect the growth of our different portfolios, with $400 million net from the issuance of OLIT securitization for reverse mortgage buyouts, $329 million net proceeds from our MSR financing facilities, $178 million net increase of our mortgage warehouse facilities to finance our Originations pipeline. Offsetting cash outflows included $75 million of net repayments on advance match funded liabilities due to our advance collection efforts.

Cash flows for the year ended December 31, 2024

Our operating activities used $574 million of cash during the year with $837 million net cash paid on loans held for sale and $263 million other operating cash inflows, net. The $837 million net cash paid on loans held for sale is attributed to the growth of the pipeline with loan production volume exceeding sales, $246 million for the purchase of reverse mortgage buyouts, and $248 million originated MSRs. Operating cash outflows also include $46 million margin calls on derivatives. Operating cash inflows included $82 million net collections of servicing advances and earnings distributions of $9 million received from our former equity method investee MAV Canopy.

Our investing activities provided $401 million of cash. Cash inflows primarily include $371 million net cash received in connection with our HECM reverse mortgages held for investment, $205 million proceeds from sales of MSRs, $31 million proceeds from sales of real estate as part of our reverse asset management strategy, $51 million of net cash received from our former equity method investee MAV Canopy, including $46 million proceeds received from the sale of our 15% investment in November 2024, and $15 million received from the sale of advances in connection with sales of MSRs. Offsetting cash outflows include $232 million to purchase MSRs and $37 million to purchase real estate (reverse buyouts).

Our financing activities provided $183 million of cash. Financing cash inflows are primarily comprised of $479 million net from borrowings under our mortgage warehouse facilities due to the increase in loans held for sale, $324 million net from the issuances of the OLIT securitization of reverse mortgage buyouts, $498 million proceeds from issuance of the new PHH Corporation 9.875% Senior Notes due November 2029, $43 million net proceeds from borrowings under our MSR financing facilities, $52 million of proceeds from MSR related financing liabilities, and $20 million proceeds from the issuance of Series B Preferred Stock in connection with the acquisition of reverse mortgage assets of MAM (cash balance transferred with all other assets acquired and liabilities assumed). Offsetting cash outflows include $659 million to redeem or repurchase all of our 7.875% PHH Senior Secured Notes and 9.875% Onity Senior Secured Notes, $83 million of net repayments on advance match funded liabilities, and $71 million of payments on MSR related financing liabilities due to runoff. Cash inflows of $1,074 million received in connection with our reverse mortgage securitizations, which are accounted for as secured financings, were more than offset by repayments on the related financing liability of $1,475 million, indicating a runoff of the portfolio that exceeds originations.