Rithm ends $33B subservicing deal with Onity

"Most of the portfolio transfer is expected to occur during the first half of 2026. But $8.5 billion in unpaid principal balance (UPB) requires the consent of trustees and other parties, creating uncertainty around the timing and completion of the transfers. Onity's total servicing book stood at $311.5 billion in UPB at the end of Q3 2025, meaning that the Rithm portfolio represents about 10% of the total. Still, the company said it does not expect a material financial impact."

"The Rithm subservicing is a shrinking portfolio of mainly low-balance, pre-2008 subprime loans and accounts for over half our delinquent loans and borrower litigation, Glen Messina, Onity's chair, president and CEO, said during the earnings call. For 2025, the Rithm subservicing was less than 5% of our total adjusted revenues, and one of our least profitable portfolios before corporate allocations."

"The portfolio is now about 25% of the size it was five years ago, Messina said. It has gotten to the point where the portfolio is so small, delinquencies are high, and the cost of servicing is high, Messina said. It is uneconomical for us and our client to maintain the current relationship. Messina said Onity has signed nine new clients so far this year and has six new agreements under negotiation."

Most of the portfolio transfer is expected during the first half of 2026. $8.5 billion in unpaid principal balance requires trustee and other-party consent, creating timing uncertainty. Onity's servicing book totaled $311.5 billion in UPB; the Rithm portfolio is about 10% of that. The company does not expect a material financial impact. Rithm is a shrinking, low-balance, pre-2008 subprime portfolio that accounts for over half of delinquencies and borrower litigation and was under 5% of revenues. Eliminating it will simplify infrastructure, reduce costs, and enable focus on more profitable businesses. Onity has added nine clients and has six agreements under negotiation.

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