Newrez and Valon
Newrez, Rithm’s largest operating business, reported higher profits for the year despite mortgage rate volatility and faster prepayments. The mortgage platform generated approximately $1.1 billion in pre-tax revenue in 2025, including mark-to-market adjustments, up 17% year-over-year, according to Newrez president Baron Silverstein, who called it a “milestone” for the platform.
Silverstein also commented Monday on Rithm Capital’s announcement about its partnership with Valon, which will allow Newrez to leverage Valon’s AI-native mortgage servicing platform, ValonOS, to service more than 4 million loans starting in 2027.
“We expect the Valon operating system to significantly improve our efficiency, which will benefit all of our 4 million homeowners and our third-party customers,” he said.
In the fourth quarter, Newrez posted $249 million in pre-tax revenue, excluding mark-to-market adjustments, supported by growth in new productions and fee-based third-party services. The unit delivered a return on equity of 17% in the quarter and a return on equity of 20% for the full year, the company said.
Newrez finished 2025 as the third-largest mortgage servicer and fifth-largest mortgage lender in the United States, according to company data. The servicing portfolio was approximately $850 billion in unpaid principal balance (UPB) at year end.
Approximately 30% of Newrez’s servicing portfolio consists of fee-based, high-margin third-party servicing, while government-insured loans accounted for a portion of the owned mortgages. Newrez’s external services increased to $256 billion, which Silverstein said includes $25 billion in new external services, which “offsets the movement of a sub-service portfolio of single-margin agencies.”
Changes to FHA Loan Mod
During the call, the company noted that its fourth quarter results were affected by seasonal trends in delinquencies and balance of payments changes FHA Loan modification rules, which have increased delinquencies in the short term but are expected to support longer-term performance.
Funded loan volume at Newrez increased to $18.8 billion in the fourth quarter, up 15% from the previous quarter, and $63 billion for the full year. Pre-tax income from new productions, excluding mark-to-market adjustments, rose 31% from a year earlier. Non-agency production, including non-qualified mortgages, rose sharply, with non-QM production up 200% year over year, the company said.
Rithm executives said Newrez continued to prioritize price discipline over market share, citing competitive pressure on profit-on-sales margins across the industry. Nierenberg cited recent acquisitions of Crestline Management And Paramount Group as an ‘opportunistic situation’.
During the year, Rithm and Newrez completed eight non-QM securitizations totaling $4 billion to UPB and invested approximately $9 billion in residential mortgage assets, largely from internal origination platforms. The company also entered into a forward-flow agreement to purchase up to $1 billion in home improvement loans, raising approximately $600 million by 2025.
Rithm ended the year with approximately $1.7 billion in cash and liquidity and said it managed more than $100 billion in investable assets, including balance sheet assets and third-party capital.
Looking ahead, Nieremberg reiterated that the company is “not in a race to grow production” and “if there are people setting prices through the market, it won’t be us. Likewise, if you think about the MSR business, we are fully hedged against our MSR.”
He continued, “We’re going to become more efficient. We’re going to spend a little more money on it.” [our] mark as we go along. But we are not in a race to just grow the origin. We don’t have to do that just to be in a fight with someone else. And you’ve seen that in the wholesale channel between a number of different mortgage providers.”
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