Mr. Cooper Group(COOP) - 2022 Q4 - Annual Report

PART I Business Overview Mr. Cooper Group Inc. is a leading U.S. non-bank mortgage servicer and originator, managing $870 billion UPB for 4.1 million customers across Servicing and Originations segments - Mr. Cooper Group Inc. is the largest non-bank servicer of residential mortgage loans in the U.S. and a major mortgage originator[10] - As of December 31, 2022, the company served 4.1 million customers with an aggregate UPB of $870 billion, comprising $411 billion in owned servicing and $459 billion in subservicing[13] - In March 2022, the company completed the sale of certain assets and liabilities associated with its servicing and subservicing technology platform[11] - The company conducts operations through two segments: Servicing and Originations[5] - In 2022, the Originations segment eliminated approximately 1,200 positions to realign capacity with reduced customer demand in a higher mortgage-rate environment[18] Overview Business Segments Servicing Subservicing Originations Competition Government Regulation Cyclicality and Seasonality Human Capital Resources Additional Information CAUTIONS REGARDING FORWARD-LOOKING STATEMENTS Forward-looking statements are inherently uncertain, subject to various risks including macroeconomic, interest rate, and regulatory changes, with no obligation to update - Forward-looking statements are susceptible to uncertainty and changes in circumstances, and the company is under no obligation to update them[53] - Key factors that could cause future results to differ include macroeconomic conditions, changes in interest rates and home prices, ability to grow servicing/originations, liquidity, regulatory compliance, and cyber intrusions[75] Risk Factors This section outlines significant market, financial, operational, regulatory, and stock-related risks impacting the company's business - The company's business is exposed to risks from macroeconomic and U.S. residential real estate market conditions, including interest rate changes and home price declines[78][64][65] - Operational risks include technology failures, cyber-attacks, vendor relationships, and the ability to attract and retain skilled employees[80][208][243] - Regulatory and legal risks stem from operating in a highly regulated industry, facing numerous legal proceedings, governmental examinations, and compliance costs[81][247][251] Risk Factor Summary Market, Financial Reporting, Credit and Liquidity Risks Servicing Risks Originations Risks Corporate/Other Risks General Business & Operational Risks Regulatory and Legal Risks Risks Related to Owning our Stock Unresolved Staff Comments The company reported no unresolved comments from the SEC staff - No unresolved staff comments were reported[286] Properties The company's principal executive office is a 176,000 sq ft leased facility in Coppell, Texas, with additional leased offices in the U.S. and India - Principal executive office is a 176,000 sq ft leased facility in Coppell, Texas[287] - Business operations and support offices are located in leased facilities across various U.S. states and in India (Chennai and Bengaluru)[287] Legal Proceedings The company refers to Note 19, Commitments and Contingencies, in the Notes to the Consolidated Financial Statements for details on its material legal proceedings - Material legal proceedings are described in Note 19, Commitments and Contingencies[264] Mine Safety Disclosures The company states that this item is not applicable, indicating no operations subject to mine safety disclosures - This item is not applicable[307] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Mr. Cooper's common stock trades on the Nasdaq Stock Market under 'COOP', with 1,763 stockholders as of February 9, 2023, and the Board authorized an additional $200 million for stock repurchases in October 2022 - Common stock trades on the Nasdaq Stock Market under the ticker symbol "COOP"[289] - As of February 9, 2023, there were 1,763 stockholders of record[266] - The company has not declared or paid cash dividends on its common stock and does not expect to in the foreseeable future[290] - In October 2022, the Board authorized an additional $200 million for stock repurchases, following a $700 million authorization in 2021[308] Issuer Purchases of Equity Securities (Q4 2022) | Period | Total Number of Shares Purchased (in thousands) | Average Price Paid per Share | Shares that May Yet Be Purchased Under the Plan or Program (in millions) | | :------------ | :-------------------------------------------- | :--------------------------- | :--------------------------------------------------------------------- | | October 2022 | 302 | $39.75 | $255 | | November 2022 | 896 | $42.43 | $217 | | December 2022 | 100 | $41.84 | $213 | | Total | 1,298 | | | Market Information and Stockholders Dividends Stockholder Return Performance Item 6. [RESERVED] This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes Mr. Cooper's financial condition and operational results for 2022, noting decreased consolidated income due to lower Originations revenue despite servicing portfolio growth, with strategic focus on growth and efficiency - Consolidated income from continuing operations before income tax expense decreased in 2022 compared to 2021, primarily due to lower total revenues from the Originations segment[345] - The servicing portfolio grew to $870 billion UPB in Q4 2022, driven by MSR acquisitions[318] - Key strategic initiatives include growing the servicing portfolio to $1 trillion UPB, achieving a 60% refinance recapture rate, and enhancing customer experience through technology[317] [Consolidated Operations Summary (2022 vs.