Mr. Cooper (COOP) 24 Apr 242024 Q1 Earnings call transcript

Good morning, and welcome to Mr. Cooper Group's first-quarter earnings call. My name is Ken Posner, and I'm SVP of Strategic Planning and Investor Relations. With me today are Jay Bray, Chairman and CEO; Mike Weinbach, President; and Kurt Johnson, Executive Vice President and CFO.

As a reminder, this call is being recorded.

slides Investor the at web find investors.mrcoopergroup.com. can on Relations our page You

we non-GAAP factors SEC the refer reconciled the be and statements, may During call, other understand should to identified we make results could in the which XX-K you Also, by to in measures, we've appendix filings. deck. to risk slide affected may forward-looking that GAAP are which our

to turn We with update call undertaking are commitment these And now any conditions Jay. that, if to I'll the statements over change. not

start Ken, good on But a into tangible our we as call. which guidance were and strategy, driver report of book XX% to to XX.X%, let's first, X. Mr. to into pleased Thanks, XX% to and strategy. opportunities value welcome major which progress $XX.XX. Slide morning, to quarterly ROTCE hit gets way see returns. our Operating and growth the executing technology year-over-year This talk is was to on us review everyone, the our the range to Cooper's which by and a to range our plan year has key XX%, We great been morning, up to highlights I this this of continue higher about sustaining higher

of servicing. to growth this asset impressive clearly in in away terms million. see pulling of more thunder client. class Mike subservicing and scale. onboarding market, new attractive year-over-year a liquidity. his completed on trillion in portfolio a with Now to XX%. as super portfolio source in a a yields pulling and fast double-digit income and a an and bit going the we will little The important of cycle, $X.X bulk the from servicing pipeline comment to portfolio leverage, you but hit continuing billion $XX in turning basis, the portfolio tell believe originators with are I'll reflects we which minute, acquired up Thanks banks the back our in industry the MSRs from we're still the $XX On from seeking billion point reached operating was competitors opportunities we the on shakeout $XXX At building

to Turning originations.

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I offense discuss an industry, Slide a the I am to and Mr. team period how everyone. such of rapid good morning, how portfolio thrilled has and excited in important enjoying customer we're playing start like Cooper start a I'm feel the going on servicing to X growth. which be I'd clearly Thanks, to and Jay, by an mission. be where of saying to part

from first ago. have to the of reached so portfolio the look this we've trends volumes year, and customers As robust key up to come. the year for between we We years has which many is forward reshaping split whom the are trillion, million far XX% subservicing. X March over industry. now the was in serving which Growth seen In MSR MSR $X.X XX, X servicing acquisitions very reflecting quarter market, a

a the market. XX considerable first transactions, relationships These In bulk well MSRs is they margins to markets very And relative second, SARs required stay First, reduced in ago. are years excellent pipeline MSR brought level of market of as is to the community, their up These where evaluated bring which nearly due have difficult for competitive as trends negative as us memory. the translating one to directly. the we nearly in XX% strong a of the and reassessing bulk the transactions, regulatory exposure hit technology quarter, level to what deal which as capital with liquidity sellers banks investments a most the X are to include the our originators by selling into concerns share. deals record volume are supply year market we broker from in

Mr. That's was sellers many greater buyer. is as speed hard-earned closing and explained, for of accuracy. and even means becoming This Pyro subservicing reputation is For the Mr. where with Cooper choice. also business, platform the onboarding. of sellers, respond timely just preferred smooth great we our for Cooper a quarter our rapidly And because to Jay can

and client fee high In new into banks, addition an MSR portfolio to our existing or for it able owners, to and be lever partners.Our ROTCE important that of is our strategy liquidity capital various generates with less the win without teens many that to at and regional Subservicing growth optimistic because scale we're requiring range. income talking is central including clients. our new benefiting we and onboarded, we're actively adds we'll from team growth originators, raising advantages to is investors,

to momentum the the and should on subservicing. After UPB yields again, the continue the with board, approximately will second that, in in market. between split $XXX another growth depend quarter, to billion MSRs available ahead Looking scheduled

we're While closer aggressive some supply about of to of pricing, continued robust especially portfolios we're that money. optimistic the a signs for MSRs, also seeing are

deploy remain to You we capital. us should how our expect disciplined in

problem have pause We from conditions taking growth want. a if no

Slide X. to Turning

growth, which operational factors quarter. spend strong Let's $XX in the several $XXX driving revenues. portfolio most fourth drove million on this earnings, There a was which in strong $XXX moment lift sequential of important quarter, performance, million quite million which were the servicing a were from at up

from benefited earnings servicing CPRs, at in which amortization the first quarter, Additionally, minimizing X.X% very low came our during expense.

the Jay leverage operating despite we only positive is focus payoff million technology $X from leverage rapid intense This the expenses that growth. sequentially operations and Finally, did on job up an discussed. outstanding generating our with

invest in even in project operating Now of well the leverage expect quarter you people to ongoing continue operating should new every our right care investments have said, leverage we as to number as we level please this of take the continued don't customers. as as platform. applications That expect of we ensuring

from Looking range recent $XXX up being $XXX ahead million income rates. depending of CPRs guide uptick to the second the you of to a impact quarter, mortgage million, on to to servicing we in in flat the

originations, pretax Now above let's discuss to million, and slightly turn in $XX reported we Slide came where XX earnings which guidance. of

when recall, the in nimble end last of very rates was you save take As mortgage towards advantage team of the opportunity year, to dipped helping direct-to-consumer our money. customers

which the a uptick volumes we slight most of which result, this mix refi, and in by the XX% term made first are the As customers funded saw in for our products the in a value quarter. second rate purchases in cash-out that provide liens, up remains dominated Otherwise, environment.

and dropped refi slightly to our the to XX%. recapture rates dipped XX% XX% notice You'll industry from

UPB since higher the Xx we're our lower than value a maximize payoff. average. of cash-out for To DTC cash-out to strong provides to Overall, at invest lift in refis, has recapture ratio our to the low some which customers, the mix due a the remains new our industry almost the platform. partly was continuing this Now

times, last talked then we application recall range productivity them investments pull-through, discrete Flash You'll can Well, down of which a well, we're use to on to and about easier. such originations we're and verification. automated. us similar beginning cycle underwriting digitizing also higher form of the cost means faster be year, a savings now starting income We're in lower as enhancements realize in by which automating applying to unit FHFA per into processing XX% to see quicker the workflows, investing experience AI as loan breaking these helped designed those return in cost Project steps, in We're originate. goals. with how make And and

the the their save As in access we continue customers help built homes. opportunities servicing equity environment or remains means we more difficult, portfolio, originations our but to ahead, that look as to money they grow

the we million flat be $XX to the guide up For originations range earnings expect second to million. to $XX quarter, in you to tax before of

performance. the turn I'll take Now you call to will financial our who Kurt, over through

and $XXX earnings, which mark, good on positive morning. million $X brief million summarize, adjustments Mike, recap with $XXX financials. of start our was includes Thanks, To operating in of million. net a a I'll $XX income and Slide XX million, pretax

$X operate Point consisted of in addition to and last Mike with continued the which in equity breakeven associated with and million quarter. In results, loss expenses took a servicing Xome around just other the million to trailing operating you Home year acquisitions Adjustments $X a through, associated with $X and million loss investments.

significantly MSR hedge interest we basis During by which hedging convexity quarter-end top risk of makes million a servicing multiple simple portfolio than add the $XXX million has This MSR, a up points to of which leading XX%. target equated an on to our coupon a strip. duration less coverage, CPRs, the to base expectations of pretty I'll UPB only at-the-money valuation the much offset due or relatively ratio quarter, of XX% which is and that $XXX marked rates exercise. X.X% right lower a of weighted loss, average of with was by X.X%, our higher than fee XXX for

deferred tax by quarter totals Our this million declined $XXX and $XX asset now million.

Tangible continue tax utilize payments, flow. XX% our year-on-year to taxable minimize to which cash to $XX.XX. share We our and per strengthens value increased DTAs cash our book income offset

on portfolio were perform line continues as quality, ending abated, constructing the Mr. know year. a which year, that a story very million we've in well into you times have asset up thought turns. Cooper. a X.X share to stock about while the This quarter a of happens this bad to our employee shares typically eventually that Slide slightly good for gives noticed have due of XX may around good. shares. And Last quarter an of as the markets relating year, to was concerned from which first corner. be is every we update the of recession just the put issuance can investing XX.X You in cycle that the something to all And lot concerns count in million incentives, that million ticked XX.X those

we you took their really one the of didn't crisis. aftermath effectively losses other manage that a quarter, off contribute important As and our down When previous perform X.X% in Cooper's the conventional to health low from arguably MSR record have took ago, the X.X%, expect an all-time to servicer of and of in customers. most in from fourth stability Mr. on both agencies, and in and year we first portfolio housing institutions these the first growth help recall, the may government which financial troubled which of ways X.X% in of low declines large with the capacity is or In global in dropped a market. the delinquencies the portfolios MBS and quarter investors, to the quarter a loans. stakeholders to conditions, mortgage in

our customers' by the of homes. have customers modification VA. are credit below results. deliberately substantial a major at weighted up and Now we average is FHA, of been not record these scores in But where constructed programs take Mac, advantage market equity built This Freddie while strong book been seasoned Mac, We've the note We've latest their weighted where of environment by working accidental. portfolios a also, high, is design, the bulk customers a driver also LTV Fannie offered the rates with to decline. acquiring to well generation continues help average FICO and clearly, have, high-quality

during see XX. exceptionally wrap Liquidity demonstrates sheet digital our implemented $X.X first senior year-over-year. the programs record of keeping high is XXX,XXX on can scale also these workouts, our of on quarter the the Rolling at collateralized quarter, in $XXX and immediately billion, Slide used balance this thanks we commitment Liquidity our MSR to quarter, million the example capacity reached dream platform, upsize billion able remains we issuance remaining consisted up, of strong, line of as and to unrestricted fully out with $X of another alive. available. end. we XX% quarter another our up is During you capacity, lines. note MSR during it MSR power lines to after To and another homeownership draw quarter. which to million the $XXX were down $XXX during our collateral, cash the We million pay for borrowing and the brought new by But in our did which purchases

Additionally, to we MSR renegotiating to existing maturities began extend lines XXXX.

Our net capital manner. ratio due as quarter we continue and our still thoughtful, XX% the of a assets in to above worth disciplined to by to tangible deploy points ended but XX%, asset measured down growth, range XX to our target measured, at capital as XX% basis

subservicing. As Mike anticipating in owned between quarter, mentioned, boarding the another we're second in and billion $XXX UPB split

the now to still year, all continue anticipate secured $XX we at per And with unsecured to grow point, and that with we $X for owned from along billion UPB, with generated have billion to our in and can portfolio the of $XX liquidity remaining our question, of well billion policies. capital business, in our debt. servicing generating excess a Just would comfortably cash compliance with in combination another capacity while

other pension within also private Raising funds, we're a from returns asset allocations. this fast growth MSRs LP managers the view fund accounts. strategies, you their an who is managed process, As as and uncorrelated a positive we're separate environment sovereign credit asset-light and capital MSR net with opportunity and plans, double-digit in including but discussions attractive subservicing the launch not pursuing of co-mingled having know, very available wealth

already comments how with we XX.X%. ROTCE Jay's echo me are pleased at Let about operating

And grow our but what does not we model and but performance not both Although obviously, The quarter we be we servicing is back to that $XX lower single rates leverage, guidance in our a With Cooper. and that, demonstrate extremely business interest Q&A. XX% that to to over asset-light the us will strong take in operating to in we to over technology execution believe capable strategy confident the of. on and in originations for for turn XX% to call continue we you it given interest strategies time for expectations. just assume joining execute or like on higher merely EPS excess plan, guidance XXXX. subservicing. for like continue call Ken our I'd like your I'd to now Last on Mr. quarter, thank shared in today's of

Thanks, Kurt.

Sandler. first Our question from line the of come Crispin going to Piper is Love with

you in had hold competition-wise or in And pickup volumes seen can bit discuss segment that in pull might also first, do the margins and improvement back what in quarter? in you're LA margins Just Originations then the from a you've they as can bit a steady the little solid a you think levels quarter? you the first you seeing a

we equity across time, with market, market. opportunities grows, move, have portfolio customers the a to in continues take purchase But a find to a rate to looking the it new obviously, As our lower they're or as homes, challenging if same be their home. look with up, at in have more ways rates them advantage they originations help help the have we of a to

to we profitable and take our don't So continue but space give to margins, great had to guidance customers. be we opportunities of in consistently care good about the this feel we've specific on

rate So if if will Obviously, come rates on be are it environment. down, we we expect our to rates customers competitive to regardless mostly market continue of that higher. but there the being a focus serve change to

coupon, higher that competition deeper color? that and or -- you're some coupon, And also little interested other bit one, purchase the most just you there and But as put Is then you're MSR portfolios any it seeing? bulk in? what agency, then And well. lower more types two, discuss, a attractive of around dig market maybe you you mentioned the remains numbers a

book Jay. This extremely the is attractive. Look, is market think we

mix. over maintain these It's approach just newly our at as our kind think looked out, at discipline. And We to originated a XX portfolios pointed them. portfolios. the portfolios. all I look of blend And well legacy We run it's as is we opportunities in money Mike a as the of quarter.

perform, probably targeted data cetera. sellers the returns. more more we consistent And industry than are a going information in around our the exercised have to our standpoint, default just how going is from anybody We to perform et and in standpoint, collateral discipline how certain prepayment hitting

indifferent say to our bullish what to respect won't very portfolios I in So we're out on continue this with the come returns. but we just and just week. the targeted discipline additional opportunity. what's we're the portfolios hit exercise market, And or But very, we'll our actually bought some

So we think going to the there. it's and continue to market is there be

come And line our Bose next from to with George question is the going of KBW.

trillion Can larger, some the mean, you about portfolio, well-capitalized the like would a you? see servicing plus could in talk longer-term towards servicing growth longer-term the as or we And as growth, $X servicers I concern that point? as regulators a see potential moves at

a to reaching target It's as we Jan in servicing. Mike. had start well. Happy in trillion with the that and of In and $X can one past, chime Kurt

hear I as forward, to more us returns. about a talking lot you're think we going move targeted

as of disciplined So just about, opportunities. a We way and targeting we're certain price Jay offers look talked size. the market what we're at we the in not terms

trillion equity decade the about home. That's in at add is. more trillion from only in shareholders. to returns really And earn homeowners' look market $XX so continue probably $XX ago. the feel We grown $XX overall, and The mortgages is trillion market what for a I'd actually thing our dictate the ability about of if our future good you there's the will to though outstanding growth over good

So you'd in market, there's steady continue. to some been the expect growth that

investors stay and state, out laws new challenging addition, making local business. for you're federal, requires with It you. In making a investments it's rolling compliant sure that and programs to the ask

back offering the continually ecosystem are investment seeing either has subservicing to investing and people And something into business, could the what their they in partner So helping through us are a homes, allowed on lot focused been able new with where to because other originations leading to platforms be get business. they what than the best do you're who to and originate focus on management which us fund on reason servicing, mortgage us part or grow. of able homeowners of think other have grow focusing in we're is I they selling us there people

way And still even of long continue a with growth servicing, a market we to saying, for single-digit share lot an consolidating. a the market. think reasons our of there of So in it's overall are

So they the do of on can ecosystem rest what focus the best.

Yes. thing I Bose, of at performance scorecard The only mean add, you or all if would I that standpoint, our #X from is consistently stakeholders. our we're #X look

think servicer. it's so lot to Mr. Cooper confidence matter, And This technology a in there's I matters. matters, of natural. a it's a And point, large-scale as just is investment Mike's and

grow If services share types can you look market of at other financial companies, considerably.

so we really capital half we is portfolio subservicing, last And so growth don't any see And of don't have the it's capital-light to impediment from make is about right? completely risk here. business. The comment or I our would

answer question, how to that's it. long but your So about think we

outlook corporate great. helpful. on question segment That's actually, very And a there. the That's just then

number there a but blips, quarter's of Just I mean this forward? reasonable actually, what's is going a little run of kind the -- a is rate are level? couple this reasonable

No.

to in an actually made the it reduce actually segment I some think We reduce we've investments opportunity to think segment. in the coming going forward. corporate corporate there's quarters in look expenses the to

as investment savings. made identify shouldn't look think an at future to you really -- that we should So that some actually you

from the see of the first down quarter trending so investments, of in here. the some just expenses of -- specifically were kind So the some so

Exactly.

that issuance. had just to I out Kurt. of on debt comment it's new only Bose, $X expense Although X wanted billion the X the months, right,

out slightly, pretty do call we that it's but tick to will our rate, that close up and So run separately.

Doug to with And our next the UBS. from going Harter question come line of is

come to lower? come the you as technology about scale that you drive for loan they talk And think both? from can outlook -- the that you because cost per continue Can does continued servicing the investments on side from or

the start first add these power of example we actual you down. the just chime And an platform. portfolio board let than went We $XXX of I billion in. quarter billion people. today compensation XX mean I'll and and Doug, in can the boarded I'll we think guys give our expense and $XXX less

so sometime And we're And talking incredible investing But still the a think down. why the just and and in cost-per-loan got what's which drive in possible power there. costs another we've is AI continue about investments scale, technology standpoint, today years I the AI from platform. to we've now and in to been for in innings incredible of we middle the quiver arrow data

we really out on So are bullish take there. continuing costs to

would if anything. Mike, know, you add don't I So

to add. the That's Yes, plan. nothing

And going from the Joseph to our Kyle next question Jefferies. line come is of with

Just Slide wanted to I even Jimny able on DQs. in you're to into dig down those a Have Fannie more looking the product? What's seeing side, that little VA been DTs bit or dynamic? refi industry on driving the segment. that Particularly XX, you at come

stab I'll take Kurt. it's Kyle, a that at question.

a than You down a that can just really and FHA modification has done from easy and customer USDA. place faster job for coming well. a for programs implement the are to lot VA attractive in see, servicer obviously, of great really the FHA as standpoint putting

the the seen actually and their So them programs mortgage. customer capitalize the quite allow that low-rate well. of they back have we've well all to sort the as on in end perform rear of mortgages of stay And

these, from drop off to of And sort recover rate, So hardship why able their kind they same that's once the we're into and FHA. go mortgage perform. in really of the is continue the customer, seeing temporary to keep

programs had Now VA the hasn't same historically.

XX-year modification But rate can seen customers that's decline, XX- slower week why off coming VA program so particularly are a get this of just to that sort a a around a last new introduced a customers with amortization. you've X.X% and where of forbearance. And

that we it. that's And VA seeing as some think term driving in But well. good the do probably really we have will So industry-wide. near what's opportunities yes, are

FHA implement you'll to If at you of of their able look kind couple see them these the servicers performance, as have see last I and overall over months, continue delinquencies the decline are dropped to you'll that think programs.

DQs. but just that give business performing de tangential kind decent was run given just that a impact then declines of of terms it. obviously, how that the Got lower And rate is first the in the us for business, -- sense is quarter, would follow-up, a or a in revenue

I expected, terribly anytime soon. exciting this is are delinquencies that Xome don't market. mean mean Xome I anything as I at in lows. see think right? not all-time We're expecting changing from performing We

to out the positive see changes We've valuable don't But Given lot their patient. roll a we're business. start homes, expect is there. and Xome. continues again, got very obviously until great very you should which a you out to government It's keep of asset. in cycle very, meaningful, servicing programs the foreclosures think borrowers a more Kurt's to the I think point, But for platform I

share, market be win we'll and to continue We patient.

Our to from next Bologna question is going Point. come Giuliano line of with Compass the

out I'd Congratulations obviously you've for there? and grown billion $XXX different portfolio about kind or any be for going continued forward? of products Is is thing portfolios any another preference is curious have you One on per balanced jet there portfolios obviously execution. the quarter. there lot a the at-the-money preference And next for

market be is I Again, our to the we're with hit market we're we the at stick of to returns. in about our think it look way and going always always and kind participant, going disciplined to what's approach a think targeted

today, But changes, more you'll especially the have think evolves And so at conventional historically, June. say, of and I I portfolios the -- the more originators. money than call see I what are bought out to the from would money And market, buying as coming out more would market portfolios.

at we really see in banks the market the but to change And are be where to recapture boarding given cost be competitive real from a market at, velocity so do. standpoint. going don't standpoint, to focus advantage just a what we'll we're loan what's where origination is going we're And any of we coming have the And to continue active, disciplined. standpoint, on just we and

So feel about opportunity. we good the

The only all look we do spread I'd the basis. thing on option-adjusted an that is add transactions at

We price portfolios we think is Jay's purchase just And with see that relatively adding indifferent. every make to optionality to And to so that do the we the sure We on value, where mining we're we want best-in-class. value single do. we with shareholders point, our will and our we're buy. recapture

and some more. a platform as opportunities that leverage DTC for I that option, little think there opportunities so to good are for And bit there are

money perspective. at an may So you for a XX the didn't said closer originations bit We at to portfolio little and the us price, XX. see active our portfolios. and we of growth But and to looked close again, from around room more bit anywhere a giving discipline little we win

better. So value be where to a see see our to that's it's winning where still we potential, we're think we going additive a competitive marketplace and where earnings we and

another very a Freddie up, one not to early but about out, a years because And additive and that around hope for in it has platform That's mortgages of hasn't for only also current Freddie But wave it's proposal thought being refi postured well. of we loans. if will origination any end in second out that kind I'm could but obviously if around you could in of you it's that bring then that potential be there's that about volume to so for origination is Freddie product. too be the platform. think Mac of I'm yet, cash far.And HELOC that curious of that a as proposal been to goes type opportunity the still proposed if enabling Mac ensuring servicing the Obviously, up bring product improved rate helpful. opportunity and or fixed quasi term instead curious XX

realize that it's like. early I what you if fairly curious Just about could look days. opportunity thought

great think I before it's take to more well. us if for it's interesting. back a if the we advantage for tools It's market give that home. You in on is customers -- mean developing? to it's very end and this there the help of And us. very you did up said the this serve your crisis, and we HELOC Is equity great of homeowners, the question, early this that are opportunities our market think days, obviously, homeowners answer their financial which relatively but to lot

that then, since and I of support And and still we appreciate so innings and it's see more that. in responsible early the that much it's And been want to evolving. to continue

against Americans vast I threw mortgage being mortgages. equity earlier. today. So mortgage a the out rate have trillion much with lower $XX homes of are the a where of to $XX trillion originated stats of to Over at Go back loans a than of some available majority in

of as the is market XXs. So a low the in LTV the whole

lot a So Freddie about customer. opportunity know there's have the instrument. are loan. about that security They for that the come see a of And a position. simpler first out a lot value of They is of there. the in And to know we'd lot know about lot love They the lien. great a They homeowners. products the

innovate easier And ways of to so make equity investors we're to their their for their help advantage and take servicers to really looking things customers the excited to in homes. customers they're and at see

And add is we're second our you insignificant today, the When look of origination funding platform, doing at I'd is the platform thing only what percentage it's not today. liens right? an

we the out. roll have So capability this to operational

think So we're excited will about a it. And real it I be opportunity.

our question line to Barclays. from of with come going the is Ma next And Terry

like win sense in Maybe your hit actually wheelhouse? deals up you many or follow MSR return out you a it that, way, how out And due deals, hurdles opportunity. slightly to XX pricing in are can wanted competition? those the of to many a this to did on ask maybe us different of then give just your maybe I of how quarter of and

around along. of process. really in a I things. comment all don't percentage looked mean small the grand pretty But we scheme we're still winning at on that We specifics it

make committee the still we're have are okay returns that. we investment a investment we're small fairly process, sure process very which for We winning percentage, because with around shareholders. to And committee again, our want tight hitting a we're

We to us and of a We're almost almost we add, market active lose that people to Jay very we more everything. And The ability remain get to all We against we price. see and even said, we able like evaluate we return helped the quickly hurdles because participant more be our continue to come than the only going think see We're our thing in in back win, going losing win. an portfolio them. everything what disciplined. a it's reiterate that's I'd with to just to market to did than know grow. be we

add we had is have The We've with do piece proven able them. time record to to I again. consistently come directly execute last and us that track been time a because want we've to sellers

because seller. we And obviously, there, we're track going cases in most with have a to so win record those that

So that's one other element of the process.

should the the the on pretty maybe you for Was operating I but there think this, leverage. going about, pretax that? margin seasonal we forward? had missed good have or one-time guess, servicing may I guys How quarter, some anything in then And

really one-timers expense not standpoint. of servicing, there No, wasn't particularly much way the in an in from

on that Jay perspective, a $XXX count think operating I continues on a out basis. that you and as a of go-forward exist, said, billion Mike leverage leverage -- headcount from So you think of on think you'll can I XX the less the can't ads right, sort than play But to see being operating with pointed robust out, I go-forward additions basis.

And there. the rates add of only thing there's element obviously, an I'd is,

might given us the of in what were invest be with to what expense. on different less which is lower underlies had environment if bring platform, operating has been talked Jay continuing about rates, rate you CPRs needing to amounts So new we're see significant the add regardless to but that leverage, capabilities to higher loans appears of the that without

invest we the We're upfront, the So to forward. we feel to But I continued going realize great leverage to of scalability about going as platform. continue see expect to it. said operating

Eric going question next BTIG. be the line to with of Hagen Our is from

onboard debt? can in you're you And it financing recapture this the sort you MSRs right overall in proportional billion that portfolio? assume amortization you the is might expense cash? And I now? quarter, right expect it Was you're Are bid? how expense portfolio is that Is to using a expectations you all there, On expect any you the that onboarding amortization share mean as any $XX then competitively that the it of of follow-up to that? that for

but was billion good $XX Jay's competitively because All a competitively was the components of now Eric. to and largely part, came for bid. the billion lot trying point, questions remember it there The to it. most Yes. I'm $XX that -- there the were all directly a are Look, questions, pad. couple To probably us, to

Mike see a think, of out, lot is amortization But I a that pointed dependent. as expense. of rate sort yes, you'll pro-rata interest

if a in this see think you'll pro-rata are -- if they where if see I amortization or up. they be bit little range, you'll of corresponding performance bit, sort well. So kind it'll I higher DTC the sorry, stay little as think they of increase that a go a a rates But definitely our decreased increased in

the rate agnostic these really interest see you focus and model, rally, drop-off that servicing are that where our in on channel. do an again, business and increase a of think you'll rate the because returns a balanced is So we see in DTC

volatility and over call. mortgage footprint That's servicing I MSRs last How we've helpful. seen years. of considerably the Do of nonbank like do feel light class? very your for about on you ownership the REITs this of from investor you the mean good the evolve contributes in base? discussion asset couple to for Okay. ownership community higher more the concentrated think base

us, you leader is things. sheet. To goal returns about mean good continue from to strong, a strong our earnings at business. balance way need the Cooper, clearly, look standpoint, at you've our for you operators out to counterparties, we you've you be then and there and we like to today, in well-capitalized, typically those buyer think our -- short if that's and which look leader, consistent the is buyers answer we I I mean got got it's the segment, a when market the mean Mr. the someone the the stable, financial are think are like that be have I fortress subservice I provide think in no.

the think don't certainly more it's into system. introduced we no, So that volatility

and say And portfolios a I there couple that win against would them QX. seen are of They we've are the in still still us, banks right? bidding

not like of So the it's marketplace either. entirely they're out

further no Jay Bray hand at back to to showing this any the closing like conference for I'd I'm And remarks. questions time. And

the for Thank great you. everyone We day. call. joining a appreciate Have

This participating, today's Thank now conference for call. may disconnect. and you concludes you