Newrez and Valon
Newrez, Rithm’s largest operating business, reported higher earnings for the year despite volatile loan rates and faster prepayment speeds. The mortgage platform is projected to generate $1.1 billion in pre-tax income by 2025, including market adjustments, which is a 17% year-over-year increase, according to Newrez President Baron Silverstein, who called it a “milestone” speech.
Silverstein also commented on Rhythm Capital’s announcement on Monday about its partnership with Valon, which will allow Newrez to deploy Valon’s AI-native mortgage service platform, ValonOS, to service more than 4 million loans starting in 2027.
“We expect the Valon app to improve our efficiency, benefiting all of our 4 million homeowners and our external customers,” he said.
In the fourth quarter, Newrez posted $249 million in pretax income excluding mark-to-market adjustments, supported by growth in originations and third-party fee-based services. The unit delivered a 17% return on shares for the quarter and a 20% return on shares for the full year, the company said.
Newrez ended 2025 as the third largest mortgage servicer and the fifth largest lender in the United States, according to company data. Its servicing portfolio reached nearly $850 billion in unpaid principal balance (UPB) at year-end.
About 30% of Newrez’s servicing portfolio consists of high-quality, fee-based third-party servicing, while government-insured loans account for a portion of mortgages. Newrez’s third-party service rose to $256 billion, which Silverstein said included $25 billion in new third-party offerings, “eliminating the movement of a single margin agency portfolio.”
FHA loan mode changes
During the call, the company noted that fourth quarter results were affected by seasonal crime trends and changes The FHA loan modification laws, which increase short-term delinquency but are expected to support long-term performance.
Total loans financed at Newrez increased to $18.8 billion in the fourth quarter, up 15% from the previous quarter, and $63 billion for the full year. Tax revenue from sources excluding market adjustments increased 31% from last year. Non-agency originations, which include non-performing loans, rose sharply, while non-QM originations rose 200% year-over-year, the company said.
Rithm executives said Newrez continued to prioritize pricing over market share, citing competitive pressure on sales revenue across the industry. Nierenberg cited the recent discovery of Crestline Management again The Paramount Group “as an opportunistic situation.”
During the year, Rithm and Newrez completed eight non-QM securities totaling $4 billion in UPB and invested approximately $9 billion in residential real estate, mostly through internal platforms. The company also entered into a forward agreement to purchase up to $1 billion in home improvement loans, with approximately $600 million due by 2025.
Rithm ended the year with approximately $1.7 billion in cash and said it managed more than $100 billion in investable assets, including balance sheet assets and third-party funds.
Looking ahead, Nieremberg emphasized that the company is “not in a race to grow originations” and “if people are out there pricing the market, it’s not going to be us. Likewise, if you think about the MSR business, we’re completely hedged against our MSR.”
He continued, “We will work very well, we will spend more money on it.” [our] brand as we move forward. But we are not in a race to increase originality. We don’t have to do that just to be at war with someone. And you’ve seen that on the main channel among several different mortgage originators. “
