Onity Group Inc.(ONIT) - 2024 Q4 - Annual Report

Servicing and Subservicing Portfolio - As of December 31, 2024, the servicing and subservicing portfolio consisted of approximately 1.4 million loans with an unpaid principal balance (UPB) of $301.7 billion[24]. - As of December 31, 2024, Rithm accounted for$41.2 billion of UPB, representing 14% of PHH's total servicing and subservicing portfolio, and approximately 63% of all delinquent loans serviced by Onity[55]. - The servicing business includes the collection of principal and interest payments, management of delinquent loans, and the administration of escrow accounts[25]. - The five largest concentrations of properties serviced are in California, Texas, Florida, New Jersey, and New York, comprising 39% of the loans serviced, with California alone accounting for 15%[118]. - The five largest concentrations of properties securing residential loans are located in California, Texas, Florida, New Jersey, and New York, comprising 39% of the total loans serviced as of December 31, 2024[118]. Originations Business - In 2024, the Originations business generated total volume additions of $85.6 billion in UPB[33]. - The Originations segment primarily generates revenue from gains on loan sales, including conventional and government-insured loans[31]. Competition and Market Conditions - The company faces intense competition in the financial services market, particularly from larger banks with lower costs of capital[47]. - The company competes based on price, operating performance, service quality, and customer satisfaction in the servicing business[48]. - Market conditions, including interest rates, may impact investor demand for MSRs, potentially leading to a loss of subservicing relationships[117]. Employee Engagement and Culture - The company had approximately 4,300 employees as of December 31, 2024, with around 1,000 in the U.S. and USVI, and 3,300 in India and the Philippines[64]. - Employee engagement levels were reported at 85$28 million to local and national nonprofit organizations to support distressed communities and homeowners[82]. - In 2024, Onity's charitable events included raising funds for autism and cancer research and supporting local food banks through food drives[83]. - The company has contributed nearly $7 million to nonprofit organizations since the COVID pandemic[82]. Servicing Excellence and Recognition - The company has received multiple recognitions for servicing excellence, including Fannie Mae's STAR performer recognition for the fourth consecutive year[48]. - PHH's servicer ratings were upgraded by Moody's on August 10, 2023, with residential prime, subprime, special servicer, and second lien servicer quality assessments moving from SQ3 to SQ3+[50]. - Fitch affirmed PHH's residential servicer ratings and revised the outlook from Positive to Stable for Prime and Subprime products on February 13, 2024[52]. Financial Transactions and Agreements - Onity sold its 15$41.2 billion UPB on behalf of MAV under the Subservicing Agreement, with $21.5 billion of MSRs previously sold by PHH to MAV[61]. - Onity issued$285.0 million of senior secured notes due 2027 to Oaktree in 2021, which were prepaid in November 2024 as part of corporate debt refinancing[62].