Newrez posts best monthly mortgage volume since 2022, seals Wells Fargo deal

Multichannel mortgage lender Newrez continued to contribute positively to parent company Rithm Capital’s earnings in the third quarter of 2025, during which the company closed an agreement with Wells Fargo in the private-label securities (PLS) space.

In the third quarter, Newrez posted pretax income of $295 million — excluding a net hedge mortgage servicing rights (MSR) mark-to-market loss of $61 million. That was up from $275 million in the second quarter, according to filings with the Securities and Exchange Commission (SEC). Newrez generated a 20% pretax return on $6.2 billion in equity.

“With the recent drop in rates, our origination business finished the quarter with our biggest month in lock volume since early 2022,” Newrez President Baron Silverstein said during an earnings call on Thursday morning. “While market competition continues to drive margin pressures, our disciplined focus remains on profitable growth with an eye for market opportunities.” 

On the origination side, Newrez delivered $80.4 million in pretax income in Q3 2025, down from $86.6 million in Q2. Funded production volume came in at $16.4 billion, an increase of 3% year over year, mainly driven by its correspondent channel. Silverstein said margins fell to 114 basis points, down from 122 bps in the prior quarter, due to the channel mix and an increase in government streamline refinances.

Newrez’s servicing business saw pretax income rise to $660.3 million in Q3, compared to $233.6 million in the second quarter. Its servicing portfolio reached $878 billion in unpaid principal balance (UPB), up 7% year over year. This includes $282 billion of third-party servicing, an increase of 21% from the previous year.

“Our special servicing platform is the best in the business, and we continue to gain market share as shown by increases in our third-party UPB,” Silverstein said. “We’re also excited about a new partnership with Wells Fargo, which validates our nonagency servicing leadership in the industry.”

Newrez entered into an agreement with Wells Fargo to purchase a legacy PLS portfolio, with expectations to begin the transfer next year.

BTIG analysts estimate Newrez can recapture 40% to 50% of its servicing portfolio if mortgage rates fall another 25 bps, versus their estimate for total originations next year of about $75 billion.

“The alignment we see between servicing and origination has improved considerably relative to the company’s position leading up to the pandemic,” the analysts added.

Assets under management

Company executives reiterated that they are not planning to take Newrez public anytime soon. Michael Nierenberg, Rithm’s president and CEO, told analysts during the earnings call that the company first needs to grow its asset management business.

Rithm manages more than $100 billion in investable assets across its owner-operator model. In the fourth quarter, it expects to close its first evergreen asset-backed finance fund through its wealth management platform, targeting upward of $500 million.

In line with that strategy, Rithm announced in the third quarter the acquisition of Crestline Management, a move that adds $17 billion in assets under management and expands the firm’s direct lending and insurance offerings. It also paid $1.6 billion to acquire Paramount Group and establish a presence in the office property market.

Nierenberg said these acquisitions help Rithm expand its platform and product offerings. He added the company will not raise equity to fund these deals. They will be funded using the company’s balance sheet and third-party capital. 

Overall, Rithm reported Q3 2025 net income of $228 million, down from $318 million in Q2. GAAP net income came in at $193 million. The company expects to have $1.3 billion in cash and cash equivalents after closing the Crestline and Paramount transactions.