ONITY GROUP INC.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
ONIT$31.00-3.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-05.
0001628280-26-030753
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-054426
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 376 previous paragraphs and 386 current paragraphs.
240 unchanged; 115 reworded; 28 added; 19 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 38 previous and 39 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
(5)Excludes $5.2 billion subservicing additions in connection with the FAR transaction. We began subservicing these loans effective with the closing of the amended sale transaction on June 30, 2026.
Current report
•Originations gain on sale of $33 million
Current report
•MSR investment of $3.2 billion
Current report
•Total assets of $12.4 billion
Current report
•$11.4 million decrease in revenue with a $6.7 million, or 3% decrease in Servicing revenue and a $4.6 million, or 9% decrease in Originations revenue. Gain on reverse loans and HMBS-related borrowings, net decreased $14.8 million mostly in Servicing due to less favorable yield spread tightening and unfavorable assumption updates in the second quarter of 2026, including related to the FAR transaction, and in Originations to a lesser extent due to lower originations of reverse mortgages in anticipation of the closing of the amended sale agreement with FAR and lower margins driven by less favorable tightening of yield spreads. Gain on loans held for sale, net decreased $4.7 million mostly in Originations due to a lower gain in our Consumer Direct channel primarily due to volume headwinds as higher rates drove lower lock volumes and margins, offset in part by a higher gain in our Correspondent channel with higher volumes, higher margins, improved loan origination pipeline hedge effectiveness, and favorable loan sale execution. Partly offsetting these decreases, Servicing and subservicing fees increased $6.9 million mostly attributed to higher float earnings and to a lesser extent a 4% increase in average servicing UPB.
Current report
•$6.8 million increase in operating expenses driven by a $4.6 million increase in Servicing and origination expense, primarily attributed to higher indemnification provision expense in Servicing related to the FAR transaction, and increased indemnification provision in Originations attributed to unfavorable demand and resolution activities as well as higher loan count. In addition, Professional services increased $1.9 million primarily related to certain corporate development initiatives.
Current report
•$3.3 million increase in Other expense, net primarily due to an increase in net financing cost in Servicing driven by asset growth, including MSRs, partly offset by a decrease in Pledged MSR liability expense consistent with the decline in volume serviced, including Rithm.
Current report
•$3.5 million increase in income tax benefit due to the loss before income taxes in the second quarter of 2026 (vs. income in the first quarter) and the discrete tax impact of certain current year MSR fair value changes and hedging gains.
Current report
Total revenue for the three months ended June 30, 2026 decreased $11.4 million, or 4% compared to the three months ended March 31, 2026 mostly due to the $4.6 million, or 9% decrease in Originations revenue and a $6.7 million, or 3% decrease in Servicing revenue.
Current report
•The $4.6 million decrease in Originations revenue is primarily attributed to a $3.9 million reduction in Gain on loans held for sale, net with a decrease in gain in our Consumer Direct channel due to volume headwinds as higher rates drove lower lock volumes and margins, partly offset by an increase in gains in our Correspondent channel due to higher volumes, higher margins, improved MSR hedge effectiveness, and favorable execution. A decrease in Gain on reverse loans and HMBS-related borrowings, net due to lower originations of reverse mortgages in anticipation of the closing of the amended sale agreement with FAR and lower margins driven by less favorable tightening of yield spreads was largely offset by higher fees (other revenue) on higher volume.
Current report
•The $45.0 million increase in Originations revenue is primarily due to a $38.8 million increase in Gain on loans held for sale, net with higher gains in both our Consumer Direct and Correspondent channels. The increase is mostly driven by higher funded loan volume in both channels (50% increase in total loan production volume) and an increase in margins in our Correspondent channel primarily due to improved execution, partly offset by lower margins in our Consumer Direct channel due to the competitive pricing environment. A $13.1 million increase in fee revenue due to higher volume was partially offset by a $6.9 million decrease in Gain on reverse loans and HMBS-related borrowings, net due to lower origination volume partly offset by a higher aggregate margin driven by yield spread tightening.
Current report
•The $29.6 million fair value gain due to input and assumption changes is mostly attributed to a favorable change in market rates and revaluation gains in our Originations segment, significantly offset by unfavorable assumption updates to reflect increased prepayment speeds, higher realization of cash flows, and change in delinquency in the first half of 2026. The $26.5 million increase in the gain as compared to the six months ended June 30, 2025 is primarily driven by changes in market interest rates, as the 10-year Treasury rate increased 26 basis points during the six months ended June 30, 2026 compared to a decrease of 34 basis points during the same period of 2025, and higher valuation gains in our Originations segment, partially offset by unfavorable assumption updates described above (vs. favorable assumption updates in the first half of 2025).
Current report
Servicing and origination expense for the three months ended June 30, 2026 increased $4.6 million compared to the three months ended March 31, 2026, primarily due to higher indemnification provision expense for loan put-back and related contingencies in Servicing related to the FAR transaction, and increased indemnification provision attributed to unfavorable demand and resolution activities as well as higher loan count in Originations compared to the three months ended March 31, 2026, offset in part by higher provision expense on servicing receivables in the first quarter of 2026 related to MSR sales.
Current report
Professional services expense for the three months ended June 30, 2026 increased $1.9 million compared to the three months ended March 31, 2026 primarily attributed to certain corporate development initiatives.
Current report
Our operating activities used $747 million of cash during the period with $875 million net cash paid on loans held for sale, $101 million net collections of servicing advances and $153 million other operating cash inflows, net. The $875 million net cash paid on loans held for sale is attributed to the growth of the pipeline with loan production volume exceeding sales and $143 million originated MSRs. The $101 million net collections of servicing advances was mostly driven by seasonality, as well as lower delinquencies and loan resolutions in our non-Agency MSR portfolio. Operating cash flows included $126 million interest paid on our financing liabilities with relatively higher interest paid on our warehouse financing due to volume growth and lower corporate debt interest payment after our successful refinancing in the fourth quarter of 2024. Other operating cash inflows, net of $153 million, primarily includes collections of servicing fees and ancillary income, payment of operating expenses, and net cash outflow for our hedging derivative activities during the period.
Current report
Net interest expense fluctuates as we utilize larger debt balances to finance the growth of our businesses, through acquisition of servicing assets or by funding newly originated loan pipeline. Pledged MSR liability expense (effectively the servicing fee remittances of MSRs) has been relatively stable, with a decline in the second quarter of 2026 consistent with lower volume serviced, including Rithm.
Current report
In November 2025, OMC agreed to sell its entire HECM loan portfolio and HMBS related borrowings to FAR and subservice the sold portfolio and additional loans from FAR. On April 30, 2026, OMC and FAR entered into an amendment of the November 2025 sale agreements whereby OMC has agreed to sell a portion of its reverse MSRs comprised of approximately 20,000 Ginnie Mae HECM loans. The amended sale was approved by Ginnie Mae on May 28, 2026 and the transaction closed on June 30, 2026. The subservicing agreement has an initial three-year term effective on the date of closing, subject to automatic one-year renewal unless FAR provides notice of non-renewal 180 days prior to the expiration of the original term, and subject thereafter to renewal upon mutual agreement of the parties. As of the closing date, the sold balances included $5.6 billion securitized assets ($5.2 billion UPB), the associated $5.5 billion HMBS-related borrowings (or net $70 million reverse MSR), and approximately $57 million newly originated reverse loans and tails pending securitization. Refer to Note 5 - Reverse Mortgages.
Current report
(4)Includes $5.2 billion HECM reverse MSR sale and subservicing addition in connection with the FAR transaction. We began subservicing these loans effective with the closing of the amended sale transaction on June 30, 2026.
Current report
We recognized a $6.3 million loss on loans held for sale, net for the six months ended June 30, 2026, compared to an $8.8 million loss recognized in the six months ended June 30, 2025. The $2.5 million favorable variance is mostly driven by higher liquidation gains on reverse mortgage buyouts and higher redelivery gains on Ginnie Mae forward loan repurchases and modifications, mostly driven by volume, offset in part by certain higher input and assumption updates in the six months ended June 30, 2026.
Current report
Compensation and benefits expense for the three months ended June 30, 2026 decreased $1.4 million, or 6%, compared to the three months ended March 31, 2026 largely consistent with the 7% reduction in headcount. Salaries and benefits expense decreased $1.0 million and severance expense decreased $1.2 million, mostly due to 7% lower headcount in forward servicing primarily in connection with Rithm’s decision to not renew its subservicing agreements effective January 31, 2026. These decreases were partially offset by an increase in incentive compensation of $0.8 million.
Current report
Compared to the six months ended June 30, 2025, Pledged MSR liability expense for the six months ended June 30, 2026 decreased $4.0 million, or 5%, consistent with the lower volume serviced, including Rithm.
Current report
Other, net is mostly driven by the increase in reverse mortgage REO assets in connection with reverse mortgage loan buyouts.
Current report
Gain on reverse loans and HMBS-related borrowings, net for the three months ended June 30, 2026 decreased $2.9 million compared to the three months ended March 31, 2026, with lower origination volume across our channels and lower margins in our wholesale and retail channels. Lower originations during the three months ended June 30, 2026 were in anticipation of the closing of the amended sale agreement with FAR. Lower margins were predominantly driven by less favorable tightening of yield spreads in the three months ended June 30, 2026 as compared to the three months ended March 31, 2026.
Current report
•Completed the following changes related to our MSR financing facilities:
Current report
◦In May 2026, we increased the borrowing capacity under one of our GSE MSR financing facilities from $250.0 million to $400.0 million and the maturity date was extended to May 2029.
Current report
◦In May 2026, we decreased the borrowing capacity under another of our GSE MSR facilities from $750.0 million to $400.0 million.
Current report
◦In May 2026, we entered into a new facility which is secured by a lien on certain of our Fannie Mae MSRs and is subject to daily margining requirements. Onity guarantees the obligations under the facility. The facility has a maturity date of May 2027 and total borrowing capacity of $450.0 million. In June 2026, the borrowing capacity under the facility was temporarily increased to $500.0 million through August 2026. In July 2026, we repaid $250.0 million of the balance outstanding under this facility and entered into a $250.0 million term loan facility secured by a lien on certain of our Fannie Mae MSRs with a maturity date of July 2029 and subject to daily margining requirements. Onity guarantees the obligations under the facility.
Current report
•Completed the repurchase and cancellation of $10.0 million (242,753 shares) of our common stock under a $10.0 million share repurchase program authorized by Onity’s Board of Directors in February 2026. We repurchased 154,444 of these shares during the first quarter and an additional 88,309 shares during the second quarter, completing the program on May 1, 2026.
Removed paragraphs (19)
Previous report
•Originations gain on sale of $37 million
Previous report
•MSR investment of $3.0 billion
Previous report
•Total assets of $17.7 billion
Previous report
•$4.3 million increase in revenue with a $2.2 million, or 1% increase in Servicing revenue and a $2.0 million, or 4% increase in Originations revenue. Gain on reverse loans and HMBS-related borrowings, net increased $8.6 million mostly due to yield spread tightening in Servicing, offset in part by a $2.6 million net decrease in Gain on loans held for sale, with unfavorable fair value changes of reverse buyouts in Servicing and higher margins and lower volumes in Originations ($1.4 million gain). In addition, Servicing and subservicing fees decreased $2.7 million with lower float earnings offset by a higher average servicing UPB.
Previous report
•$4.4 million decrease in operating expenses driven by a $3.6 million decline in professional services, including a $2.8 million decline in legal expenses, primarily attributed to our accrual for a legacy litigation matter in the fourth quarter of 2025, as well as some offsetting factors as discussed below.
Previous report
•A $120.1 million reversal of valuation allowance on our net deferred tax asset in the fourth quarter of 2025 driven by Onity’s return to sustained profitability.
Previous report
Total revenue for the three months ended March 31, 2026 increased $4.3 million, or 1% compared to the three months ended December 31, 2025 due to a $2.2 million, or 1% increase in Servicing revenue and a $2.0 million, or 4% increase in Originations revenue.
Previous report
•The $2.0 million increase in Originations revenue is primarily attributed to a $1.4 million increase in Gain on loans held for sale, due to increased loan production volume in our Consumer Direct channel, largely offset by lower margins and volume in our Correspondent channel, as well as higher fees (other revenue).
Previous report
•The $25.3 million increase in Originations revenue is primarily driven by a $17.8 million increase in Gain on loans held for sale, net in our Consumer Direct channel and a $6.4 million increase in fee revenue attributed to a 71% increase in total loan production volume attributed to our MSR replenishment and growth strategy and our increased recapture.
Previous report
•The change from an $18.6 million fair value loss in the three months ended March 31, 2025 to a $12.5 million fair value gain in the three months ended March 31, 2026 is primarily driven by changes in market interest rates, as the 10-year Treasury rate increased 12 basis points during the three months ended March 31, 2026 compared to a decrease of 35 basis points during the same period of 2025, and assumption updates to reflect actual market trade pricing levels, partially offset by the impact of increased prepayment speeds in the current quarter.
Previous report
Servicing and origination expense for the three months ended March 31, 2026 increased $1.2 million compared to the three months ended December 31, 2025, primarily due to higher provision expense on servicing receivables and higher satisfaction and interest on payoff expense in the Servicing segment, partly offset by lower provision for indemnification in Originations.
Previous report
Professional services expense for the three months ended March 31, 2026 decreased $3.6 million compared to the three months ended December 31, 2025 with a $2.8 million decline in legal expenses primarily attributed to our accrual for probable losses in connection with the settlement of a legacy litigation matter in the fourth quarter of 2025.
Previous report
Under our transfer pricing agreements, our operations in India and Philippines are compensated on a cost-plus basis for the services they provide, such that even when we have a consolidated pre-tax loss from operations these foreign operations have taxable income, which is subject to statutory tax rates in these jurisdictions that are higher than the U.S. statutory rate of 21%.
Previous report
Our operating activities used $148 million of cash during the period with $159 million net cash paid on loans held for sale and $11 million other operating cash inflows, net. The $159 million net cash paid on loans held for sale is attributed to the growth of the pipeline with loan production volume exceeding sales and $61 million originated MSRs. Operating cash outflows also include the payment of annual bonuses, the reduction of servicing float balances and margin calls on derivatives. Operating cash inflows included $54 million net collections of servicing advances mostly driven by seasonality.
Previous report
The decline in Net interest expense reflects the favorable impact of our corporate debt refinancing in the fourth quarter of 2024 with the associated recognition of a one-time charge within Other. In addition, declining short-term interest rates more than offset larger debt balances to finance the growth of our businesses. Pledged MSR liability expenses (effectively the servicing fee remittances of MSRs) are relatively stable.
Previous report
In November 2025, OMC agreed to sell its entire HECM loan portfolio and HMBS related borrowings to FAR and subservice the sold portfolio and additional loans from FAR. On April 30, 2026, OMC and FAR entered into an amendment of the November 2025 sale agreements whereby OMC has agreed to sell reverse MSRs comprised of approximately 20,000 Ginnie Mae HECM loans with UPB of $5.1 billion. The closing of the transaction is contingent on Ginnie Mae’s approval and is expected to occur in the third quarter of 2026. Refer to Note 5 - Reverse Mortgages and Note 23 – Subsequent Events for additional information.
Previous report
We recognized a $2.7 million loss on loans held for sale, net for the three months ended March 31, 2026, compared to a $1.2 million gain in the three months ended December 31, 2025. The $4.0 million unfavorable variance quarter-over-quarter is mostly driven by reverse mortgage buyouts, with favorable resolution of an indemnification settlement in the fourth quarter of 2025 and higher unfavorable assumptions update in first quarter of 2026, compared to the fourth quarter of 2025.
Previous report
Compensation and benefits expense for the three months ended March 31, 2026 remained mostly flat (decreased $0.9 million, or 4%), compared to the three months ended December 31, 2025 largely consistent with the 5% decline in headcount. Lower salaries and benefits and incentive compensation were largely offset by a $1.9 million increase in severance primarily in connection with Rithm’s decision to not renew its subservicing agreements effective January 31, 2026.
Previous report
Compared to the three months ended March 31, 2025, Pledged MSR liability expense for the three months ended March 31, 2026 increased $0.7 million mostly driven by the increase in the portfolio of MSRs sold to MSR capital partners and lower subservicing fee pricing on the Rithm agreement effective March 2025 (effectively increasing remittances), partly offset by a decline in the Rithm and MAV portfolios.
Reworded paragraphs (115)
Previous wording
We are a leading non-bank mortgage servicer and originator providing solutions through our primary brand, Onity Mortgage (formerly PHH Mortgage). On March 23, 2026, PHH Mortgage Corporation changed its name to Onity Mortgage Corporation (OMC). Our reverse mortgage product brand, Liberty Reverse Mortgage, has also been rebranded under the Onity Mortgage name. Onity is one of the largest non-bank servicers in the country based on UPB, focused on delivering a variety of servicing and lending programs. Onity is also one of the largest correspondent lenders in the U.S. based on origination UPB. Onity Mortgage (formerly Liberty Reverse Mortgage) is one of the nation’s largest reverse mortgage lenders and servicers based on origination and securitization UPB, dedicated to education and providing loans that help customers meet their personal and financial needs by drawing upon their home equity. Across the forward and reverse portfolio we serviced or subserviced 1.4 million loans with a total UPB of $338.4 billion on behalf of more than 3,900 investors and 113 subservicing clients as of March 31, 2026. We service all mortgage loan classes, including conventional, government-insured, non-Agency, small-balance commercial and multi-family loans. Our Originations business is part of our balanced business model to generate gains on loan sales and profitable returns, and to support the replenishment and the growth of our servicing portfolio. Through our retail, correspondent and wholesale channels, we originate and purchase conventional and government-insured forward and reverse mortgage loans that we sell or securitize on a servicing retained basis. In addition, we grow our mortgage servicing volume through MSR flow purchase agreements, Agency Cash Window and co-issue programs, bulk MSR purchase transactions, and subservicing agreements.
Current wording
Across the forward and reverse portfolios, we serviced or subserviced 1.3 million loans with a total UPB of $341.4 billion on behalf of more than 2,600 investors and 114 subservicing clients as of June 30, 2026. We service all mortgage loan classes, including conventional, government-insured, non-Agency, small-balance commercial and multi-family loans. Our Originations business is part of our balanced business model to generate gains on loan sales and profitable returns, and to support the replenishment and the growth of our servicing portfolio. Through our retail, correspondent and wholesale channels, we originate and purchase conventional and government-insured forward and reverse mortgage loans that we sell or securitize on a servicing retained basis. In addition, we grow our mortgage servicing volume through MSR flow purchase agreements, Agency Cash Window and co-issue programs, bulk MSR purchase transactions, and subservicing agreements.
Previous wording
The table below summarizes the new volume of Originations by channel on a current and comparative basis. The volume of Originations is a key driver of the profitability of our Originations segment, along with margins, and also a key driver of the replenishment and growth of our Servicing segment. In the first quarter of 2026, we added $28.5 billion of new volume, with $14.3 billion of new Originations production, $8.5 billion of subservicing additions, and $5.7 billion bulk acquisitions, as further detailed in the below table.
Current wording
The table below summarizes the new volume of Originations by channel on a current and comparative basis. The volume of Originations is a key driver of the profitability of our Originations segment, along with margins, and also a key driver of the replenishment and growth of our Servicing segment. In the second quarter of 2026, we added $42.2 billion of new volume, with $15.5 billion of new Originations production, $23.7 billion of subservicing additions, and $3.0 billion bulk acquisitions, as further detailed in the below table.
Previous wording
The following table summarizes the average volume of our Servicing segment, on a current and comparative basis. The average servicing volume is a key driver of the profitability of our Servicing segment. The relative weight of performing and delinquent loans or servicing and subservicing also drive the amount and timing of gross revenue and expenses. Our average total servicing and subservicing UPB increased by $11.5 billion or 3.6% during the first quarter of 2026 compared to the preceding quarter (14.2% annualized), and increased by $29.5 billion or 9.7% as compared to the prior year three months, net of runoff and sales, primarily driven by increases in our owned MSR and in subservicing. For comparison purposes, the total estimated industry mortgage debt outstanding increased 3.1% quarter over quarter (annualized) and 3.3% year over year (source: Mortgage Bankers Association (MBA) Mortgage Finance Forecast as of April 20, 2026).
Current wording
The following table summarizes the average volume of our Servicing segment, on a current and comparative basis. The average servicing volume is a key driver of the profitability of our Servicing segment. The relative weight of performing and delinquent loans or servicing and subservicing also drive the amount and timing of gross revenue and expenses. Our average total servicing and subservicing UPB increased $7.4 billion or 2.2% during the second quarter of 2026 compared to the preceding quarter (8.9% annualized), net of runoff and sales, mostly driven by an increase in owned MSRs. For the six months, our average total servicing and subservicing UPB increased $31.6 billion or 10.3% as compared to the prior year six months, primarily driven by increases in our owned MSRs and in subservicing. For comparison purposes, the total estimated industry mortgage debt outstanding increased 2.7% quarter over quarter (annualized) and 3.1% year over year (source: Mortgage Bankers Association (MBA) Mortgage Finance Forecast as of July 22, 2026).
Previous wording
As of March 31, 2026 and December 31, 2025, the total servicing and subservicing UPB amounted to $338.4 billion and $328.3 billion, respectively, a net increase of $10.1 billion or 3.1% (12.3% annualized).
Current wording
As of June 30, 2026 and March 31, 2026, the total servicing and subservicing UPB amounted to $341.4 billion and $338.4 billion, respectively, a net increase of $3.0 billion or 0.9% (3.6% annualized).
Previous wording
The 30-year fixed rate mortgage rate increased 23 basis points (end of period) in the first quarter of 2026 driving lower refinancing and home purchase activity in the latter part of the quarter, however rate declines earlier in the quarter drove increased refinancing activity (see market interest rates graph below). The average 30-year fixed rate mortgage rate declined 12 basis points quarter over quarter and declined 72 basis points year over year.
Current wording
The average 30-year fixed rate mortgage rate increased 30 basis points quarter over quarter and declined 55 basis points year over year. Home refinance activity declined 23% quarter over quarter driven by the increase in the 30 year fixed rate mortgage. Home purchase activity increased 25% quarter over quarter driven by the seasonality of home buying activity. Refer to our discussion of seasonality in Key Trends and Outlook below. On a year-to-date basis (YTD), home purchase and refinance activity increased in the six months ended June 30, 2026 as compared to the same period of 2025 as homebuyers took advantage of lower rates compared to the prior year (see market interest rates graph below).
Previous wording
Our three benchmark rates above followed the decline in the federal funds rate in 2025, as displayed in the graph below. The Federal Reserve reduced its federal funds target rate a total of 50 basis points in the later part of 2025 (25 basis points in September and 25 basis points in December) resulting in increased activity in the origination market. In the first quarter of 2026, the Federal Reserve kept the federal funds rate unchanged. The 1-month SOFR largely followed the federal funds rate, as illustrated in the graph below, resulting in a 2 basis point decline (end of period) in the first quarter of 2026 as compared to a 44 basis point decline in the fourth quarter of 2025. The average 1-month SOFR declined 24 basis points quarter over quarter and declined 65 basis points year over year.
Current wording
Our three benchmark rates above followed the decline in the federal funds rate in 2025, as displayed in the graph below. The Federal Reserve reduced its federal funds target rate a total of 50 basis points in the later part of 2025 (25 basis points in September and 25 basis points in December) resulting in increased activity in the origination market. In the second quarter of 2026, the Federal Reserve kept the federal funds rate unchanged. The 1-month SOFR largely followed the federal funds rate, as illustrated in the graph below, resulting in a 1 basis point decline (end of period) in the second quarter of 2026 as compared to a 2 basis points decline in the first quarter of 2026. The average 1-month SOFR declined 3 basis points quarter over quarter and declined 67 basis points year over year.
Previous wording
As further illustrated in the below graph, the 10-year Treasury rate increased (12 basis points) in the first quarter of 2026 compared to an increase of 2 basis points in the fourth quarter of 2025, and a decrease of 35 basis points during the first quarter of 2025. The 30-year fixed rate mortgage rate and the 10-year Treasury rate do not necessarily move in parallel. If the 10-year Treasury rate remains flat and the 30-year fixed mortgage rates decline this is referred to as mortgage spread tightening, and may stimulate mortgage activity beyond the 10-year Treasury rate.
Current wording
As further illustrated in the below graph, the 10-year Treasury rate increased (14 basis points) in the second quarter of 2026 compared to an increase of 12 basis points in the first quarter of 2026, and increased 26 basis points for the six months ended June 30, 2026 compared to a decrease of 34 basis points during the same period of 2025. The 30-year fixed rate mortgage rate and the 10-year Treasury rate do not necessarily move in parallel. If the 10-year Treasury rate remains flat and the 30-year fixed mortgage rates decline this is referred to as mortgage spread tightening and may stimulate mortgage activity beyond the 10-year Treasury rate.
Previous wording
The average industry volume declined 7% quarter over quarter (Q1 2026 vs Q4 2025), led by a reduction in purchase activity (vs. flat refinance activity), and grew 44% year over year (Q1 2026 vs Q1 2025) driven by higher refinance originations as borrowers responded to favorable interest rates movements. Comparatively, our Originations volume growth (funded volume of Correspondent and Consumer Direct) outpaced the industry year over year, as summarized below:
Current wording
The average industry volume grew 4% quarter over quarter (Q2 2026 vs Q1 2026), led by an increase in purchase activity offset by a reduction in refinance activity, and grew 12% year over year (Q2 2026 vs Q2 2025) driven by higher refinance originations as borrowers responded to a favorable interest rate environment. On a year-to-date basis (YTD), the average industry volume grew 26% in the six months ended June 30, 2026 as compared to the same period of 2025. Comparatively, our Originations volume growth (funded volume of Correspondent and Consumer Direct) outpaced the industry for all periods presented, as summarized below:
Previous wording
Results of operations for the first quarter of 2026
Current wording
Results of operations for the second quarter of 2026
Previous wording
•Net income attributable to common stockholders of $7 million, or $0.78 per share basic and $0.74 diluted
Current wording
•Net loss attributable to common stockholders of $13 million, or $1.53 per share basic and diluted
Previous wording
•Servicing and subservicing fee revenue of $222 million, with $338 billion total servicing and subservicing UPB
Current wording
•Servicing and subservicing fee revenue of $229 million, with $341 billion total servicing and subservicing UPB
Previous wording
•$16 million MSR valuation loss attributable to input and assumption changes, net of hedging
Current wording
•$17 million MSR valuation loss attributable to input and assumption changes, net of hedging
Previous wording
•Stockholders’ equity of $629 million, or $74.81 book value per common share
Current wording
•Stockholders’ equity of $610 million, or $72.55 book value per common share
Previous wording
•Total liquidity of $277 million, with a cash position of $182 million
Current wording
•Total liquidity of $230 million, with a cash position of $197 million
Previous wording
In November 2025, OMC agreed to sell at book value its entire HECM loan portfolio and HMBS related borrowings to FAR and subservice the sold portfolio and additional loans from FAR for an initial three-year term. FAR agreed to acquire OMC’s originations pipeline of reverse mortgage loans and assume some of OMC’s U.S. based reverse originations employees. OMC agreed to discontinue its reverse originations business upon closing. On April 30, 2026, OMC and FAR entered into an amendment of the November 2025 sale agreements whereby OMC has agreed to sell reverse MSRs comprised of approximately 20,000 Ginnie Mae HECM loans with UPB of $5.1 billion ($5.5 billion fair value) as of March 31, 2026. Under the amended agreements, OMC will discontinue its reverse originations business upon closing with the exception of activities relating to the recapture of existing HECM borrowers for any HECM MSRs not transferred to FAR. FAR expects to assume certain of OMC’s US-based reverse originations employees in May 2026 and additional employees in July 2026. The closing of the amended transaction is expected to occur in the third quarter of 2026, subject to Ginnie Mae's approval and customary closing conditions. See Note 5 - Reverse Mortgages and Note 23 – Subsequent Events for additional information.
Current wording
In November 2025, OMC agreed to sell at book value its entire HECM loan portfolio and HMBS related borrowings to FAR and subservice the sold portfolio and additional loans from FAR for an initial three-year term. FAR agreed to acquire OMC’s originations pipeline of reverse mortgage loans, and for a period of five years, OMC will no longer originate reverse mortgages upon closing with the exception of activities relating to the recapture of existing HECM borrowers for HECM MSRs not sold to FAR. On April 30, 2026, OMC and FAR entered into an amendment of the November 2025 sale agreements whereby OMC agreed to sell a portion of its reverse MSRs comprised of approximately 20,000 Ginnie Mae HECM loans. The amended transaction was approved by Ginnie Mae on May 28, 2026 and closed on June 30, 2026. As of the closing date, the sold balances included $5.6 billion securitized assets ($5.2 billion UPB), the associated $5.5 billion HMBS-related borrowings (or net $70 million reverse MSR), and approximately $57 million newly originated reverse loans and tails pending securitization. The final purchase price is subject to a 60-day adjustment period, following the closing date of the transaction. See Note 5 - Reverse Mortgages for additional information.
Previous wording
Onity reported $7.6 million of net income in the first quarter of 2026, compared to net income of $127.2 million in the fourth quarter of 2025, reflecting a steady income before income taxes and a $119.8 million decline in income tax benefit quarter over quarter. The following discusses certain notable changes:
Current wording
Onity reported an $11.9 million net loss in the second quarter of 2026, compared to net income of $7.6 million in the first quarter of 2026, reflecting a $23.0 million decline in income before income taxes and a $3.5 million increase in income tax benefit quarter over quarter. The following discusses certain notable changes:
Previous wording
•$10.3 million higher loss on MSR valuation adjustments, net with a $6.8 million unfavorable change in input and assumption updates, net of hedges, largely driven by higher prepayment speeds caused by significant intra-quarter market interest rate decline, and $3.6 million higher runoff due to portfolio growth.
Current wording
•$1.5 million higher loss on MSR valuation adjustments, net with a $1.2 million unfavorable change in input and assumption updates, net of hedges, primarily driven by the unfavorable impact from interest rate changes, net of hedging, largely offset by less unfavorable valuation input and assumption updates attributed to reflect slower prepayment speeds.
Previous wording
•The $2.2 million increase in Servicing revenue is mostly due to largely offsetting factors. Gain on reverse loans and HMBS-related borrowings, net increased $9.1 million mostly driven by yield spread tightening. Offsetting this increase, Gain on loans held for sale, net declined $4.0 million largely due to losses on reverse mortgage buyouts, and Servicing and subservicing fees decreased $2.7 million driven by lower float earnings partly offset by higher servicing fees due to MSR growth (4% increase in average servicing UPB).
Current wording
•The $6.7 million decrease in Servicing revenue is primarily due a $12.0 million decrease in Gain on reverse loans and HMBS-related borrowings, net, mostly driven by less favorable yield spread tightening and unfavorable input and assumption changes, including related to the FAR transaction. Partly offsetting this decrease, Servicing and subservicing fees increased $6.9 million driven by increased float earnings and higher servicing fees due to MSR growth (4% increase in average servicing UPB).
Previous wording
Compared to the three months ended March 31, 2025, total revenue for the three months ended March 31, 2026 was $44.5 million, or 18% higher, due to a $25.3 million, or a 88% increase in Originations revenue, and a $19.2 million, or 9% increase in Servicing revenue.
Current wording
Compared to the six months ended June 30, 2025, total revenue for the six months ended June 30, 2026 was $80.8 million, or 16% higher, due to a $45.0 million, or a 77% increase in Originations revenue, and a $35.8 million, or 8% increase in Servicing revenue.
Previous wording
•The $19.2 million increase in Servicing revenue is mostly due to a $19.1 million increase in Servicing and subservicing fees driven by MSR growth (13% increase in average servicing UPB), with some offsetting factors.
Current wording
•The $35.8 million increase in Servicing revenue is mostly due to a $37.2 million increase in Servicing and subservicing fees driven by MSR growth (14% increase in average servicing UPB), with some offsetting factors.
Previous wording
The $69.0 million loss on MSR valuation adjustments, net for the three months ended March 31, 2026 is comprised of $53.4 million runoff, $12.5 million fair value gain attributable to input and assumption changes and $28.1 million loss on MSR hedging derivatives. The $10.3 million higher loss in MSR valuation adjustments, net as compared to the three months ended December 31, 2025 is primarily due to an unfavorable change in input and assumption updates, net of hedges, largely driven by higher prepayment speeds caused by significant intra-quarter market interest rate decline, and higher runoff due to portfolio growth.
Current wording
The $70.5 million loss on MSR valuation adjustments, net for the three months ended June 30, 2026 is comprised of $53.7 million runoff, $17.2 million fair value gain attributable to input and assumption changes and $34.0 million loss on MSR hedging derivatives. The $1.5 million higher loss in MSR valuation adjustments, net as compared to the three months ended March 31, 2026 is primarily due to $10.1 million from the unfavorable impact of interest rate changes, net of hedge activity, compared to a favorable impact in the first quarter of 2026, largely offset by less unfavorable valuation input and assumption updates to reflect slower prepayment speeds in the current quarter.
Previous wording
•MSRs are subject to runoff, a fair value decline due to the realization of expected cash flows and yield based on projected borrower behavior, including scheduled amortization of the loan UPB together with projected voluntary and involuntary prepayments. The unfavorable $3.6 million higher runoff quarter-over-quarter is mostly due to the owned MSR portfolio growth.
Current wording
•MSRs are subject to runoff, a fair value decline due to the realization of expected cash flows and yield based on projected borrower behavior, including scheduled amortization of the loan UPB together with projected voluntary and involuntary prepayments. Runoff was mostly flat as compared to the preceding quarter ($0.2 million higher) as the impact of owned MSR portfolio growth was offset by the favorable impact of market rates.
Previous wording
•The $12.5 million fair value gain due to input and assumption changes is mostly attributed to a favorable change in market rates as the 10-year Treasury rate increased 12 basis points in the first quarter of 2026 and assumption updates to reflect market trade pricing levels, partially offset by certain unfavorable assumption updates to reflect increased prepayment speeds in the current quarter caused by significant intra-quarter market rate decline. The increase from a $4.9 million fair value gain in the fourth quarter of 2025 to a $12.5 million fair value gain in the first quarter of 2026 is mainly driven by a more favorable change in market rates and a less unfavorable impact of change in delinquency, partially offset by more unfavorable input and assumption updates recognized in the first quarter of 2026 to reflect increased prepayment speeds.
Current wording
•The $17.2 million fair value gain due to input and assumption changes is mostly attributed to a favorable change in market rates as the 10-year Treasury rate increased 14 basis points in the second quarter of 2026 and revaluation gains in our Originations segment, partially offset by certain unfavorable assumption updates to reflect continued increased prepayment speeds in the current quarter caused by significant intra-quarter market rate decline in the first and second quarters of the current year. The $4.7 million increase in the gain as compared to the first quarter of 2026 is mainly driven by less unfavorable input and assumption updates attributed to reflect market trade pricing levels.
Previous wording
•MSR hedging derivative fair value gains or losses are designed to partially offset the expected fair value changes of the net MSR, MSR pledged liabilities and ESS exposure, commensurate with our target hedge coverage ratio. The $28.1 million derivative loss recognized in the three months ended March 31, 2026 and the variance from the prior quarter are driven by interest rate changes as we maintained a high hedge coverage ratio in both quarters. Also refer to Item 3. Quantitative and Qualitative Disclosures About Market Risk for further detail on our hedging strategy and its effectiveness.
Current wording
•MSR hedging derivative fair value gains or losses are designed to partially offset the expected fair value changes of the net MSR, MSR pledged liabilities and ESS exposure, commensurate with our target hedge coverage ratio. The $34.0 million derivative loss recognized in the three months ended June 30, 2026 and the variance from the prior quarter are driven by interest rate changes as we maintained a high hedge coverage ratio in both quarters. Also refer to Item 3. Quantitative and Qualitative Disclosures About Market Risk for further detail on our hedging strategy and its effectiveness.
Previous wording
The $30.1 million higher loss in MSR valuation adjustments, net in the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 is primarily driven by unfavorable assumption updates recognized in the first quarter of 2026 to reflect increased prepayment speeds and higher realization of cash flows mostly due to MSR portfolio growth, partly offset by the favorable impact of interest rate changes, net of hedge activity, compared to an unfavorable impact in the three months ended March 31, 2025.
Current wording
The $139.5 million loss on MSR valuation adjustments, net for the six months ended June 30, 2026 is comprised of $107.1 million runoff, $29.6 million fair value gain attributable to input and assumption changes and $62.0 million loss on MSR hedging derivatives. The $73.3 million higher loss in MSR valuation adjustments, net as compared to the six months ended June 30, 2025 is primarily driven by unfavorable assumption updates recognized in the first half of 2026 (vs. favorable updates in the same period of 2025) and higher realization of cash flows, partly offset by $28.2 million in favorable impact of interest rate changes, net of hedge activity in the first half of 2026 as compared to the same period for the prior year.
Previous wording
•The unfavorable $12.3 million increase in runoff expense is mostly due to owned MSR portfolio growth.
Current wording
•The unfavorable $22.5 million increase in runoff expense is mostly due to owned MSR portfolio growth.
Previous wording
•The change from a $20.8 million gain from derivatives in the three months ended March 31, 2025 to a $28.1 million loss in the three months ended March 31, 2026 is mainly due to the market interest rate changes noted above. During the three months ended March 31, 2025, our HECM MSR was part of the overall interest-rate sensitive MSR portfolio.
Current wording
•The change from a $15.3 million gain from derivatives in the six months ended June 30, 2025 to a $62.0 million loss in the six months ended June 30, 2026 is mainly due to the market interest rate changes noted above. During the six months ended June 30, 2025, our HECM MSR was part of the overall interest-rate sensitive MSR portfolio. Effective in the fourth quarter of 2025, our HECM MSR is hedged with dedicated third-party derivative instruments, and the related gain/loss is reported in Gain on reverse loans and HMBS-related borrowings, net.
Previous wording
Compensation and benefits expense for the three months ended March 31, 2026 decreased $1.2 million, or 2% compared to the three months ended December 31, 2025, due to a $5.3 million decrease in incentive compensation expense (mostly a decrease in the fair value of cash-settled share-based awards driven by our stock price decrease). The decrease in incentive compensation was partly offset by a $2.7 million increase in severance, including in our Servicing segment in connection with Rithm’s decision to not renew its subservicing agreements effective January 31, 2026, and higher commissions in our Originations segment mostly due to higher Consumer Direct production volume.
Current wording
Compensation and benefits expense for the three months ended June 30, 2026 was flat as compared to the three months ended March 31, 2026, due to a $2.5 million increase in incentive compensation expense, mostly driven by an increase in the fair value of cash-settled share-based awards driven by our stock price (1% increase in our stock price during the three months ended June 30, 2026 vs. a 14% decrease in the comparative period), as well as an increase in equity-settled awards expense. The increase in incentive compensation was largely offset by a $1.9 million decrease in severance and $1.0 million decrease in salaries and benefits, mostly in our Servicing segment in connection with Rithm’s decision to not renew its subservicing agreements effective January 31, 2026.
Previous wording
Compared to the three months ended March 31, 2025, Compensation and benefits expense for the three months ended March 31, 2026 increased $12.2 million, or 21%, largely due to a $5.2 million increase in salaries and benefits with an increase in headcount within the Originations and Corporate segments to support and accelerate business growth, partly offset by a decrease in the Servicing segment attributable to an effective cost discipline, and a $4.4 million increase in commissions due to higher Originations production volume in both the Consumer Direct and Correspondent channels. In addition, severance expense increased $2.7 million as discussed above. While our total average headcount declined 2%, driven by a 4% decrease in offshore average headcount, our U.S. average headcount increased 5%.
Current wording
Compared to the six months ended June 30, 2025, Compensation and benefits expense for the six months ended June 30, 2026 increased $21.1 million, or 18%, largely due to an $8.6 million increase in commissions due to higher Originations production volume in both channels, and an $8.2 million increase in salaries and benefits with an increase in headcount in the Originations and Corporate segments to support and accelerate business growth, partly offset by a decrease in the Servicing segment attributable to the Rithm subservicing agreements termination, runoff of our reverse subservicing portfolio, lower delinquencies, and further efficiency gains within forward servicing. In addition, severance expense increased $3.7 million, including related to the termination of our subservicing agreements with Rithm as discussed above and the FAR transaction. While our total average headcount declined 3%, driven by a 5% decrease in offshore average headcount, our U.S. average headcount increased 4%.
Previous wording
Compared to the three months ended March 31, 2025, Servicing and origination expense for the three months ended March 31, 2026 increased $5.5 million or 42% due to a $3.5 million increase in Servicing expense and $2.2 million higher Originations expense. The increase in Servicing expense is primarily driven by a $3.3 million increase in satisfaction and interest on payoff expense due to higher payoff volume. The $2.2 million increase in Originations expense is primarily due to higher production volume.
Current wording
Compared to the six months ended June 30, 2025, Servicing and origination expense for the six months ended June 30, 2026 increased $15.6 million or 60% due to a $10.8 million increase in Servicing expense and $4.9 million higher Originations expense. The increase in Servicing expense is primarily driven by a $6.8 million increase in satisfaction and interest on payoff expense due to higher payoff volume, and increased indemnification provision expense as discussed above. The increase in Originations expense is primarily due to higher production volume and unfavorable demand and resolution activities compared to six months ended June 30, 2025.
Previous wording
Technology and communication expense for the three months ended March 31, 2026 was flat as compared to the three months ended December 31, 2025. Compared to the three months ended March 31, 2025, Technology and communication expenses for the three months ended March 31, 2026 increased $2.5 million or 17% primarily driven by our technology initiatives (including robotic process automation, digitization and machine learning / artificial intelligence).
Current wording
Technology and communication expense for the three months ended June 30, 2026 was flat as compared to the three months ended March 31, 2026. Compared to the six months ended June 30, 2025, Technology and communication expenses for the six months ended June 30, 2026 increased $4.9 million or 16% primarily driven by higher Servicing and Originations volume and our technology initiatives (including robotic process automation, digitization and machine learning / artificial intelligence).
Previous wording
Compared to the three months ended March 31, 2025, Professional services expense for the three months ended March 31, 2026 decreased $7.9 million, mostly driven by a $10.7 million decline in legal expenses, primarily attributed to our accrual for probable losses in connection with the settlement of a legacy litigation matter in the first quarter of 2025.
Current wording
Compared to the six months ended June 30, 2025, Professional services expense for the six months ended June 30, 2026 was flat driven by a $4.3 million increase in other professional services primarily driven by an increase in call center volume in connection with the Rithm servicing transfer largely offset by a $3.9 million decline in legal expenses. The decline in legal expenses is primarily attributed to our accrual for probable losses in connection with the settlement of a legacy litigation matter in the first quarter of 2025, offset in part by lower recoveries of prior years’ legal expenses in the first half of 2026.
Previous wording
Our income tax expense for the three months ended March 31, 2026 is primarily driven by the jurisdictional mix of our earnings, and includes a full quarter of income tax expense attributed to the U.S. jurisdiction whereas in the prior year first quarter no such U.S. jurisdiction income tax expense was recognized due to a full valuation allowance against U.S. federal deferred tax assets. The income tax benefit of $119.5 million for the three months ended December 31, 2025 primarily resulted from the $120.1 million release of valuation allowances against U.S. federal and certain state deferred tax assets. The increase in the effective tax rate for the three months ended March 31, 2026 compared to the same period of 2025 is primarily due to recognizing income tax benefit of $13.3 million related to the reversal of the uncertain tax liability during the first quarter of 2025.
Current wording
Our income tax provision or benefit for the interim period is determined based on an estimated annual effective tax rate, adjusted for discrete items. Our income tax benefit for the six months ended June 30, 2026 is primarily driven by the jurisdictional mix of our earnings and includes income tax expense attributed to the U.S. jurisdiction whereas in the six months ended June 30, 2025 no such U.S. jurisdiction income tax expense was recognized due to a full valuation allowance against U.S. federal deferred tax assets. The increase in the effective tax rate for the six months ended June 30, 2026 compared to the same period of 2025 is primarily due to the accrual of taxes in 2026 in the U.S. jurisdiction due to the removal of a significant portion of our U.S. valuation allowance at December 31, 2025 as well as the $13.3 million of income tax benefit recognized during the six months ended June 30, 2025 from the favorable resolution of an uncertain tax position.
Previous wording
Total assets increased $1,565 million, or 10%, between December 31, 2025 and March 31, 2026 primarily due to the growth in Loans held for sale and MSRs, partly offset by the decline in Reverse loans held for sale, pooled into HMBS. Our portfolio of Loans held for sale increased $1,258 million mostly driven by the growth of our Originations pipeline, and our MSR portfolio increased $201 million mostly due to $298 million MSR additions and partly offset by $72 million runoff. The $211 million decline in reverse loans was driven by the runoff of the portfolio exceeding fair value gains and 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 $52 million largely driven by seasonal reduction of taxes and insurance (T&I) balances and lower delinquencies. Receivables, net increased $175 million due to a temporary increase in government-insured loan claims (reverse mortgages) to facilitate a change in our financing strategy, and Contingent loan repurchase asset increased $106 million due to higher Ginnie Mae delinquencies driven by changes to the FHA modifications program and by the government shutdown in 2025.
Current wording
Total assets decreased $3,820 million, or 24%, between December 31, 2025 and June 30, 2026 primarily due to the decline in Reverse loans, pooled into HMBS, partly offset by the growth in Loans held for sale and MSRs. Total Reverse loans, pooled into HMBS declined $6,167 million mostly in connection with the sale of reverse MSRs comprised of approximately 20,000 Ginnie Mae HECM loans and the HMBS related borrowings to FAR in a transaction which closed on June 30, 2026. The sold loans, which had a carrying value of $5,630 million were classified as Reverse loans held for sale, pooled into HMBS. The reverse loans not sold in the amended FAR transaction were reclassified as Reverse loans held for investment, pooled into HMBS. In addition to the sale, reverse loans declined due to the runoff of the portfolio exceeding fair value gains and 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). See Note 5 - Reverse Mortgages for additional information. In addition, servicing advances declined $114 million largely driven by seasonal reduction of taxes and insurance (T&I) balances and lower delinquencies. Our portfolio of Loans held for sale increased $1,710 million mostly driven by the growth of our Originations pipeline and the acquisition of reverse mortgage buyouts. Our MSR portfolio increased $383 million mostly due to $598 million MSR additions, partly offset by $144 million runoff and the derecognition of $106 million of MSRs and the related Pledged MSR liability associated with other MSR capital partners with a UPB of $5.9 billion as MSR sale accounting criteria were met on June 30, 2026. Restricted cash increased $112 million primarily attributed to debt service accounts related to OLIT Notes. Contingent loan repurchase asset increased $103 million due to higher Ginnie Mae delinquencies driven by changes to the FHA modifications program and by the government shutdown in 2025, and Other assets increased $91 million mostly due to an increase in REO in connection with reverse mortgage buyouts.
Previous wording
Total liabilities increased by $1,563 million compared to December 31, 2025, largely due to the factors described above. Mortgage warehouse facilities increased $968 million due to the higher Originations pipeline loans held for sale balance at March 31, 2026. Reverse mortgage securitization notes, net increased $422 million due to the issuance of additional OLIT Notes in 2026 to finance the acquisition of reverse mortgage loan buyouts. Senior notes, net increased $203 million due to our issuance of an additional $200 million aggregate principal amount of 9.875% Senior Notes due 2029 at 103.25% on January 30, 2026. Contingent loan repurchase liability increased $106 million as discussed above, and MSR financing facilities increased $86 million with the increase in our MSR portfolio. Partly offsetting these increases, HMBS-related borrowings decreased by $174 million with repayments exceeding fair value losses and new securitizations after the $2.9 billion acquisition of reverse mortgage assets and assumption of HMBS-related borrowings in November 2024, and Advance match funded liabilities decreased $51 million consistent with the decline in servicing advances, as discussed above.
Current wording
Total liabilities decreased by $3,802 million compared to December 31, 2025, largely due to the factors described above. HMBS-related borrowings decreased by $6,001 million primarily due to the sale of reverse MSRs described above, as well as repayments exceeding fair value losses and 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 $87 million consistent with the decline in servicing advances, as discussed above, and MSR related financing liabilities, at fair value declined $113 million mostly due to the derecognition transaction described above. Reverse mortgage securitization notes, net increased $1,026 million due to the issuance of additional OLIT Notes in 2026 to finance the acquisition of reverse mortgage loan buyouts. Mortgage warehouse facilities increased $837 million due to the higher Originations pipeline loans held for sale balance at June 30, 2026, and MSR financing facilities increased $281 million with the increase in our MSR portfolio. Senior notes, net increased $204 million due to our issuance of an additional $200 million aggregate principal amount of 9.875% Senior Notes due 2029 at 103.25% on January 30, 2026. Contingent loan repurchase liability increased $103 million as discussed above.
Previous wording
Total stockholders’ equity increased $1.3 million during the three months ended March 31, 2026 mostly due to $7.6 million net income for the period and $0.8 million compensation related to equity-classified awards, largely offset by $6.1 million repurchases of our common stock and $1.0 million dividends on preferred stock.
Current wording
Total stockholders’ equity decreased $18.1 million during the six months ended June 30, 2026 mostly due to $12.0 million repurchases of our common stock, $4.2 million net loss, and $2.1 million dividends on preferred stock.
Previous wording
(1) Loan acquisitions are generally servicing released, meaning cash outflows include the servicing rights component of the acquired loans. Most of our loan sales, however, are servicing retained, meaning the cash proceeds we receive exclude the value of the servicing rights we retain. As a result, originated MSRs (OMSRs) generated operating cash outflows of $105 million and $61 million in the three months ended March 31, 2026 and 2025, 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%.
Current wording
(1) Loan acquisitions are generally servicing released, meaning cash outflows include the servicing rights component of the acquired loans. Most of our loan sales, however, are servicing retained, meaning the cash proceeds we receive exclude the value of the servicing rights we retain. As a result, originated MSRs (OMSRs) generated operating cash outflows of $261 million and $143 million in the six months ended June 30, 2026 and 2025, 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%.
Previous wording
Cash flows for the three months ended March 31, 2026
Current wording
Cash flows for the six months ended June 30, 2026
Previous wording
Our operating activities used $1,590 million of cash during the period, with $1,561 million net cash paid on loans held for sale and $51 million other net operating cash outflows, partly offset by $78 million net collections of servicing advances. The $1,561 million net cash paid on loans held for sale is attributed to the growth of the pipeline with loan production volume exceeding sales, $173 million net HECM reverse mortgages originations during the three months ended March 31, 2026 (previously reported within investing activities section), $105 million originated MSRs, and the acquisition of $290 million reverse buyouts (securitized with our OLIT program). The period over period increase is mostly driven by higher originated MSRs and loan production volume, as well as the acquisition of reverse buyouts during the three months ended March 31, 2026. The $78 million net collections of servicing advances was mostly driven by seasonality and lower delinquencies.
Current wording
Our operating activities used $2,106 million of cash during the period, with $2,265 million net cash paid on loans held for sale and $157 million interest paid, partly offset by $133 million net collections of servicing advances and $184 million other net operating cash inflows. The $2,265 million net cash paid on loans held for sale is attributed to the growth of the pipeline with loan production volume exceeding sales, $277 million net HECM reverse mortgages originations during the six months ended June 30, 2026 (previously reported within investing activities), $261 million originated MSRs, and the acquisition of $839 million reverse buyouts (securitized with our OLIT program). The period over period increase is mostly driven by higher originated MSRs and loan production volume, net HECM reverse mortgages originations (previously reported within investing activities), as well as the acquisition of reverse buyouts during the six months ended June 30, 2026. The $133 million net collections of servicing advances were mostly driven by seasonality and lower delinquencies.
Previous wording
Interest paid ($55 million, excluding interest collections) increased $9 million period over period, primarily due to higher interest on our mortgage warehouse facilities and MSR financing facilities in 2026 due to volume growth, offset in part by lower average short-term market interest rates.
Current wording
Interest paid ($157 million, excluding interest collections) increased $31 million period over period, primarily due to higher interest on our reverse mortgage securitization notes, mortgage warehouse facilities, and MSR financing facilities in 2026 due to volume growth, and interest on additional senior notes issued in January 2026, offset in part by lower average short-term market interest rates.
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Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
We are a leading non-bank mortgage servicer and originator providing solutions through our primary brand, Onity Mortgage (formerly PHH Mortgage). On March 23, 2026, PHH Mortgage Corporation changed its name to Onity Mortgage Corporation (OMC). Onity is one of the largest non-bank servicers in the country based on UPB, focused on delivering a variety of servicing and lending programs. Onity is also one of the largest correspondent lenders in the U.S. based on origination UPB. Prior to the sale to FAR as disclosed in Note 5 - Reverse Mortgages and below under “Business Strategy”, Onity Mortgage (formerly Liberty Reverse Mortgage) has been one of the nation’s largest reverse mortgage lenders based on origination and securitization UPB. On April 30, 2026, OMC and FAR entered into an amendment of the November 2025 sale agreements whereby OMC agreed to sell a portion of its reverse MSRs comprised of approximately 20,000 Ginnie Mae HECM loans and subservice the sold portfolio and additional loans from FAR for an initial three-year term. FAR agreed to acquire OMC’s originations pipeline of reverse mortgage loans, and for a period of five years, OMC will no longer originate reverse mortgages upon closing with the exception of activities relating to the recapture of existing HECM borrowers for HECM MSRs not sold to FAR. We received Ginnie Mae’s approval of the sale on May 28, 2026 and the transaction closed on June 30, 2026.
Current report — wording carried from elsewhere
(1)Effective fourth quarter of 2025, other change in fair value is partially hedged with dedicated third-party derivative instruments, and with our forward MSR hedge strategy through third quarter of 2025.
Current report — wording carried from elsewhere
These increases were partially offset by a $3.5 million decrease in interest on advance match funded liabilities, mostly driven by the decline in average debt balances for servicing advances due to lower delinquencies and increased loan resolutions in our non-Agency MSR portfolio. The interest on mortgage warehouse facilities decreased $2.7 million, mostly driven by a decrease in the average debt balance due to the increase in OLIT securitizations as a financing structure option.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Effective in the fourth quarter of 2025, HECM MSR is hedged with dedicated third-party derivative instruments and the related gain/loss is reported in Gain on reverse loans and HMBS-related borrowings, net.
Previous report — wording carried elsewhere
Compared to the three months ended March 31, 2025, Gain on reverse loans and HMBS-related borrowings, net for the three months ended March 31, 2026 decreased $2.4 million attributed to lower origination volume, partly offset by a higher aggregate margin. Industry-wide HECM securitization volume declined 15% when comparing the three months ended March 31, 2026 to the three months ended March 31, 2025, and industry-wide HECM endorsements were down 14%. Higher aggregate margin is predominantly driven by more tightening in yield spreads in the three months ended March 31, 2026, compared to the three months ended March 31, 2025.