Mr. Cooper Group Stock

Mr. Cooper Group Inc. operates as a non-bank servicer of residential mortgage loans in the U.S. and a major mortgage originator. The company also provide Real Estate disposition services through the company’s Xome subsidiary.

The company’s success depends on working with residential mortgage borrowers (the company’s customers), government sponsored and private investors, and business partners, to help customers achieve home ownership and manage what is typically their largest and most important financial asset. Investors primarily include government sponsored enterprises (‘GSE’), such as the Federal National Mortgage Association (‘Fannie Mae’ or ‘FNMA’) and the Federal Home Loan Mortgage Corp (‘Freddie Mac’ or ‘FHLMC’), investors in private-label securitizations, the Government National Mortgage Association (‘Ginnie Mae’ or ‘GNMA’), as well as organizations owning mortgage servicing rights (‘MSR’), which engage the company to subservice. The company is regulated both at the Federal and individual state levels.

In 2023, the company continued to grow its servicing portfolio with the acquisition of Home Point Capital Inc. (‘Home Point’) and expanded the company’s special servicing product offering with the acquisition of Rushmore Loan Management Services, LLC (‘Rushmore’). The company also broadened its business offerings with the acquisition of investment advisor Roosevelt Management Company, LLC (‘Roosevelt’).

Business Segments

The company conducts its operations through two operating segments: Servicing and Originations.

Servicing segment

As of December 31, 2023, the company served 4.6 million customers.

The company services loans on behalf of investors or owners of the underlying mortgages. Servicing consists of collecting loan payments, remitting principal and interest payments to investors, managing escrow funds for the payment of mortgage-related expenses, such as taxes and insurance, performing loss mitigation activities on behalf of investors and otherwise administering the company’s mortgage loan servicing portfolio.

Servicing

The company primarily generates recurring revenue through contractual servicing fees, which include late payment, modification, and other ancillary fees and interest income on custodial deposits. As the MSR owner, the company is obligated to make servicing advances to fund scheduled principal, interest, tax and insurance payments when the mortgage loan borrower has failed to make the scheduled payments and to cover foreclosure costs and various other items that are required to preserve the assets being serviced. As the MSR owner, the company generally has the right to solicit its customers for refinance opportunities, which are processed through the company’s direct-to-consumer channel in its Originations segment. Additionally, the company may be able to modify or refinance loans pursuant to government programs and earn incentive fees or gain-on-sale revenues from redelivering modified loans to new securitizations.

Subservicing

The company services loans on behalf of clients who own the underlying servicing rights. The company primarily generates revenue based upon a stated fee per loan per month that varies based on the loan’s delinquency status. As a subservicer, the company may be obligated to make servicing advances; however, advances are generally limited, with recoveries typically following within 30 days. Additionally, the company’s exposure to foreclosure-related costs and losses is generally limited in the company’s subservicing relationships as those risks are retained by the owner of the MSR. Capital requirements for subservicing arrangements are substantially lower than for owned MSRs. The company also offers high-touch, special servicing through the company’s brand Rushmore Servicing in connection with the acquisition of Rushmore Loan Management Services, LLC. The acquisition of the Rushmore Servicing special servicing business brings the company additional capacity and positions the company for revenue growth opportunities across a wide range of adverse environments.

Focus on the Customer

The company is focused on providing quality service to the company’s customers and building strong, lasting relationships. The company has developed a culture of customer advocacy and celebrate and reward the company’s team members for providing excellent service that helps the company’s customers achieve their goal of homeownership and manage what is for many of them their largest financial asset. Additionally, the company has invested significantly in technology solutions to improve the customer experience.

For each loan the company services or subservices, the company utilizes a customer-centric model designed to increase borrower performance and to decrease borrower delinquencies. Keys to this model include frequent borrower interactions and utilization of multiple loss mitigation strategies, particularly in the early stages of default. The company trains its customer service representatives to find solutions that work for homeowners when circumstances allow. This commitment to continued home ownership helps preserve neighborhoods and home values and improves asset performance for the company’s investors.

Originations segment

The company’s Originations segment originates residential mortgage loans, providing both purchase and refinance opportunities to the company’s existing servicing customers through the company’s direct-to-consumer channel and purchases loans from other originators through the company’s correspondent channel. The company generates revenue through gains related to the selling of mortgage loans sourced through the company’s direct-to-consumer and correspondent channels and fees associated with originating loans. The company originates and purchases conventional mortgage loans conforming to the underwriting standards of the GSEs. The company also originates and purchases government-insured mortgage loans, which are insured by the Federal Housing Administration (‘FHA’), Department of Veterans Affairs (‘VA’) and U.S. Department of Agriculture (‘USDA’). Additionally, the company offers non-agency Jumbo purchase loans and closed-end second lien refinance loans in the company’s direct-to-consumer channel, originating to the standards of the company’s investors.

The company utilizes warehouse facilities to fund originated loans. When the company sells originated mortgage loans to secondary market investors, the company generally retains the servicing rights on mortgage loans sold. The mortgage loans are typically sold within 30 days of origination in order to both mitigate credit risk and minimize the capital required. The majority of the company’s mortgage loans were sold to, or were sold pursuant to, programs sponsored by Fannie Mae, Freddie Mac or Ginnie Mae.

Direct-to-Consumer Channel

The company originates loans directly with borrowers through its direct-to-consumer channel. This channel utilizes the company’s call centers, website and mobile apps, specially-trained teams of licensed mortgage originators, predictive analytics and modeling utilizing proprietary data from the company’s servicing portfolio to reach those of the company’s existing 4.6 million servicing customers who may benefit from a new mortgage. Depending on borrower eligibility, the company will refinance existing loans into conventional, government or non-agency products. Through lead campaigns and direct marketing, the direct-to-consumer channel seeks to convert leads into loans in a cost-efficient manner. The company earns gain-on-sale revenues from securitizing newly-originated loans.

Correspondent Channel

The company purchases closed mortgage loans from community banks, credit unions, mortgage brokers and independent mortgage bankers. The company primarily generates revenue from the receipt of underwriting fees from correspondents earned on a per loan basis, as well as the gain on sale of loans sold into the secondary market. The correspondent channel serves as a cost-effective means of acquiring new customer relationships for the company’s servicing portfolio.

History

The company was founded in 2015. It was incorporated in 2015. The company was formerly known as WMIH Corp. and changed its name to Mr. Cooper Group Inc. in 2018.