Mr. Cooper (COOP) 23 Oct 242024 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Mr. Cooper Group Q3 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker at Mr. Group. Cooper ahead go Please

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

Relations investors.mrcoopergroup.com. at this is As page call being web recorded, our Investor

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

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

and you our call. everyone, morning, joining thank for Good

our is on and a the Let's of sheet we of a shape $X.X record grew strong very of dive into operating ROTCE $XX.XX to XX.X% quarter in remains highlights, our year-over-year with operating $XXX share, high XX% of the produced quarterly income X. and ratio liquidity summary, per pretax at which balance of upper billion. with end at and a book capital solid million In Slide starting guidance. Tangible value XX.X%,

Turning represents thanks income, to to to X.X portfolio $XXX operations. which in We leverage. pretax servicing continued grew $X.X million generated trillion, the servicing operating million customers and strong

quarter. in which pretax in exceeded in rates was, of Our guidance. generated to course, income significantly part mortgage million Originations drop $XX segment the due of our the This

growth care delighted fundings. I'm again was Mr. which correspondent report this to with team both from consecutive also environment of we've independent And that I'm our However, our culture market very purposeful creating a We as place recognition. making Cooper put people. and in X been this pleased with sequential lot members. now the out-indexed benefited in to great welcoming for which once received our we special and into also XX% together a our certified platforms, investments makes we've that of a work, years and validation direct-to-consumer

mention of very Finally, schedule fourth lot mortgage to on the to know time a quarter. Cooper Flagstar excited close team the the getting been operations, We've remains members in spending family. to the I'll them in we're talented and welcome Flagstar's to that acquisition

and to X, thoughts Slide If about we just as turn some position you'll XXXX our share beyond. I'll look ahead competitive into

trillion of which XX-year As outstandings. you portfolio know, of in very record we're track in culminated our proud $X.X growth, has

of us industry. mortgage customers, customer million now different closes. single is a rise way Flagstar This to X.X we the think scale have that million franchise in largest X to However, which makes will when over the

working of our we home constantly questions, providing money variety mission assistance or is when every answering single dream of are Now them customer a opportunities face ownership. And suggesting channels, through challenges. the to achieve help with save they to

As we're of interactions year. running at per million customer XXX today,

As serve enormous about customers. amassed mortgage a we amount information result, of to how have an best

technology digital now them. for this create In when petabytes. a advantage especially to and In data and understanding needs real to of our value comes a data lake us XX world gives customers' fact, how contains AI, it

and faster goal their become proactive to anticipating them. Our more is at increasingly needs solving at

began We're this improving where how listens this plans finalizing self-serve process So where and web, can AI-driven vision, the also best coaching continuing team put IVR the assess we've sentiment investing the with, invest time, our our place like month, the app a XXXX multiple to piloting in is calls on Slide and center our of start experience. customer. mobile is consists digital area prompts such To of I'll real first which customer customers state-of-the-art platform, which fingertips. Agent the to call if to information turn to in investment we're AI platform, members access their continue we're channels areas One you'll IQ. This which for to summarize in now X, budget. in in we in help implement earlier the at to

gain Our area focus believe channels. we can is where we second originations our correspondent share DTC in both sustainably market and

faster unit in our customers, on cycle We are process. workflows enhancements times. faster of and automate to with working lower we and application the for componentize cost a including savings and continuing are goal easier driving

eventually know mitigation, third increase to area more surprise what technologies, We're may Our are environments customers difficult today. cycle will help working in you will the turn. on focus loss innovative future. capacity in delinquencies might the we which is which low But be since so our

our growth. These Finally, Jeff we're the strengthening cloud-native constantly core. and Officer. to Jeff's can to profitability announced to generating leg initiatives, Last and and these will customer week, ensure mission support as Technology hiring customers, will the investments cash of stack flow. investments the Carroll Chief for the afford the because they Streeter Sharma productivity We of Digital ready of clients promotion to tech company. these is consistent, long-term and all the our we and Chief for Innovation is next strong Officer, gains make investors drive benefit is company

our is I've and XXXX still a through years and for more is results the President, stock people our stock company capital. this say, Mike to gratified scale for experience In you of a and to as on operational strategic our rising repurchase Xx us yet over way And stock XX significant a in Weinbach, here to invest market we've see return still with company's our there's recently to record equity. We the to industry, opportunity a years, smart emerged seen. In turn in price, based at join and last detail. take leader earnings quite view, I'll modest on of in recognition there as on a to the we're continue call rising view which hit think among in that, the milestones. valuation my investors We've much had high, energy would as runway this few as ever meaningful growth excitement important the fact, we despite own journey, consensus in that only our a I

Thanks, portfolio leverage. morning, Servicing operating start by where reviewing we XX% everyone. to of like year-over-year, Jay, I'd reported the and good and which strong income year-over-year segment, up is million, XX% thanks $XXX to positive growth of pretax

rates. Let factors, me start specifically commenting on interest by macro

amortization chart upper can from you the quarter. the CPRs on rose which higher to As X.X%, on right, X.X% somewhat see contributed in to sequentially the

will servicing the as well so theme fourth some we for continue We income be a which expect pressure in throughout rate. rising CPRs amortization the to XXXX, funds net to are as interest to Fed quarter deposits on sensitive manage, custodial and higher due

we the business of strong interest However, meanwhile, on model. be And servicing our to which operating to we impact deliver expect the rates nature in very balanced offset leverage. by of gains is continue originations,

this This let's the of they of including which So improvements, drill can year-over-year. At chart the of seeing portfolio turn our by decline large to FTEs is channels, Slide to servicing customers the by dead the to is servicing actually utilization right than mobile process you typically see in from topic. digital-first while IVR, channels left, calls and self-served information and same we're increased chat Due are a number continued revenues which rising. strategy, shows prefer more available the loan, chart per and phone rather channels on XX% the makes on X growth, result time, X%. web the down strong other as on calls. The including you

to committed phone and Now will experience this calls them. excellent critical channel a remain we're for making many for an customers,

If This our AgentIQ that slide X, I'll innovation, shows comes you'll coaching turn platform. on taking call. team you a screens to of a latest when quick you the Slide our Jay which up AI-driven our give they're referenced, members' Pro preview display

you time, As This of the we actions. as the question of the AI is indicator about of to while as leverage sentiment bottom example right, towards those a data. well are on top listens the how can platform petabytes screen XX customer's see suggested in one the information the real

with proceed suggestions conversation of AI or looking The for. have conversation, problems by team number to IQ prompts then call the on kind helping on best be system most call may reviewing the with other issues customer to for the to to how these center. a goal the agent make solve them from is what efficiently listens it to practices logs is system extremely our of most our Agent As productive likely customers. The members information the and the mind understand the of huge across learn customer's people our

quarter on and the and up considering their both servicing, lets of efficiencies piloting fourth wrap interest saving needs. the to by quarter. our rates, chore closing acquisition, out them started roll files, you $XXX Flagstar the of up of income we'd guide We million to originations driving $XXX customer on earlier in team manually of our in looking To range servicing IQ to success a million this Agent the and servicing Also and system members focus empathetically in pretax expected for impact the in XXXX. continued the

excellent we hitting quarter money $XX move pricing, quarter. I'll our $X.X up by very outperformed to about recapture volumes. The where in some pretax also quarter. Clearly, of from that the that taking helped the billion, clicking to job came our higher performance execution help let's Origination rate guidance quarter, initiatives marketing despite customers X which on double income and second nearly together strong segment million on through market we where $XX team us several they million. with XX% access on start now competitive an drop reflected advantage did during also $XX equity. effectively sustain of and the innovative significantly to our DTC, to share million the in rate September So talk DTC with Slide responded pressure save I'll funded this XX%

For one, gains in efficiency producing times. Project faster cycle is Flash

which year, contributing satisfaction starting this productivity drive strong scores. Also quarter, results off call project, team modernization, this experience, another which we and we options, office this higher self-serve includes new higher capacity. kicked such front to improvements to as well the been sales we've is as to as adding customer Additionally, customer

the year, onboard move over also when members, giving rates favorable far talent we intermittent higher a team in September. We've new amazing time just in and in acquisition our rallies the position lower of a shorten quickly working So sustained this capacity takes or been has team has it new advantage whether great XXX they're we're members. Overall, us to brought as demonstrated. to are team rates, train take happened to current

been customers reminder, base now with shifting having a XX% higher. customer rates or has of note approximately gradually our X% of As our

rate find in portfolio MSR chart you our for appendix. can If you're interested, the a stack a with full

XX. Slide to Turning

that add correspondent was Our this margin. extraordinary would team results, second doubling than volumes And more quarter. produced truly without from sacrificing I

Now let to market. allocated me pools last to most remind you the the of our we stepped capital we for degree attractive. years, back that anticipated a we correspondent dislocation correctly from some seasoned were historically X bulk that over spreads option-adjusted because where opportunity, in And

platform launching loans corresponding same would the the work initiatives at level of since time, allowing on However, turn. to prices. our granular we right right up Much models, our knew to pricing focused the developing at we the were eventually us more win cycle

up and Additionally, out credit penetration. portal also risk review the client same We We remained loosen plans we've to to to of have standards. rolled execution. At found speed process markets and we client we steps deepen new took an a to made quality, we cycle with improve went disciplined specific through time, manufacturing several capital ways and exhaustive relationships our respect improvements to and no times.

see ahead, significantly opportunity an to correspondent. Looking grow in we

with to we should of sum the as cost we look should quarter to Given third be difference know, strong a to And the in XXXX, originations. rate have timing will bulk servicer between in as quarter. recognition our only quarter Having in you ahead but and buyer the MSRs, potential give recognized hint leadership larger scaled all and locks a costs company's there's funding as third in to that, strong the expect markets. To a and be the market, revenue you we the best industry-leading originations overall our in much not we up, said as make associated expense recapture, fourth a the returns. contribution financial

customers to Additionally, and mortgage with the backed of up rates reducing September, rate some refinances. help have opportunity term since

a range a As of in originations with over million guide to that, to fourth I'll profitability such, normalized for now pretax hand to level in $XX you it Kurt. million. With quarter we'd income more of $XX

final which To brief of our Point should million $XX million Thanks, $XXX summarize, included loss costs net financials. $X equity $XX million, with acquisition reflecting million a customers point to of from million related consisted expense operating $X XX $XXX out investments. I Mike, of increased and sequentially, corporate $X X on months earnings, the in and debt negative interest associated net expense that of everyone. and of income good was I'll morning, from Starting million, would interest corporate of Home notes $XX adjustment August. in the the to you fourth which by of the for million quarter, model expense start with pretax million offset interest senior quarterly Slide MSR a million mark issued recap transaction net hedges, onboarding in in from to the new issuance. the $XX full impact account in

a valuation CPRs, for marked XXX MSR end to $XXX we by to the points million was quarter hedge basis gains, to XX% down base was PV equates of via higher the servicing During multiple XX% by expectations interest range target of in or ratio. due which coverage, million of strip. a the This X.X% which lower and $XXX rates leading our offset within quarter,

XX% turn slight is slightly is performing That's Slide driven points certain for recently collateral, consumer very expecting to increase I'll comment X.X%. equity our lenders. consistently high-quality performance. The X with rates up if limited been cushions. by collateral, and which portfolio and we've customers why FHA where quality, which to large which see strong has the for portfolio. chosen planning basis and you'll very MSR Now on VA is something we've note have Also, our MSR focused mortgage being to been XX, extremely low credit But delinquencies high-quality and only we've by about VA FHA and is you'll of

is And our see selectiveness a you lower of portfolio the industry by where considerable outperforming our chart in Ginnie left, the evident the can result is margin. the on

try turn if the extremely environment overall be consumer we don't to have to would managing experience credit our we forecast While and we were protected. deep cycles, investors adverse, believe Cooper Mr. books, and delinquent well more

update from driven our $XXX capacity. quarter, MSR $X.X in record by I'll as second fourth XX. $XXX We with Slide billion, the key million ended of liquidity $X.X to you of as the in turning million sheet billion well financing of Lastly, on the metrics. balance senior quarter notes up incremental issuance

at out internal our been nearly positive sets that consistent our requirements. Other with to lines cash fact include gradually a advanced all are XXXX, unrestricted has multiple sizable and X/X notice You'll liquidity fully committed. metrics regulatory rising which of all and balance them the now our policy, to liquidity target turned that our MSR are

ratio, channels XX.X%, at bulk deployed quarter capital repurchase assets as points from to in investor shares of XX%. The excess to and as still well. above and our last available basis over pace the highest about correspondent returns net speaks us worth XX% gradual capital, capital ended the stewards continuing while to of to tangible year we by as but the at our target discipline our to quarter, seek XX measured down which the we've Our range last

might enterprise me remind levels ratio range that for ratio, to set reason and ratio originations let business the rating our sheet. do set note even low we benefit because end. from of sale mix we Now in a will towards agencies stakeholders for balance the we shifts capital expect, or balance the is is for loans. Regardless middle And assets MSRs depending holders, on will unsecured environment. If for higher accordingly, continue other the This a than loans range capital of sheet of commenting a and wrap the into flows, the now framework leadership industry that well capital position. I'll our disciplined the cash this our see management we risk the held robust we sheet, by XX.X% outlook. our balance Clearly, on you with grow on ROTCE. our on quarter our of solid mix was up exceptional a you XXXX, higher as move target an

fourth at level from today's ROTCE from and you range of to of XXXX accretion Mr. in on joining and slightly servicing Flagstar the in As do continue originations, Mortgage XX% operating Cooper. for the further like thank for we interest growing call like that, midpoint we Banking I'd call for the to your Mike both anticipate the based out, I'd now but leverage the expect a us XX% to the acquisition. With turn servicing on quarter, and our in lower guidance back to contribution over pointed and earnings to Q&A. originations, Ken

please. Thanks, you the now Didi, if start Kurt. And Q&A session, could

[Operator Instructions]

our question And Barclays. Ma comes Terry of first from

million the Is pretax of new talk was just $XX in to mentioned normalized for there? fourth maybe the million the you you guide that quarter rate? $XX can kind think run about drivers I originations the right,

Thanks, Terry, it's Yes. Mike.

to right, million recently $XX has rates of as million they're been $XX X%, we challenging running guide this a that's guide. and mortgage over for So And as September, to now quarter below had X.X%. the middle because

more look our And enhancements there's and we some ahead, made. We so in the see business rates we we've of a that of of still still a higher lot by see momentum just as our in less more opportunity out lot are if term driven direct-to-consumer customers for of rate than you capable $XXX,XXX equity. $XX,XXX and plus. XX% of with have for opportunity home than And to cash over XX% their share homes refinances have and equity

rates, lot the about we business in And heavily dependent regardless we're with for So but good of making guide the environment. regardless. is quarter we of what on a see feel happens opportunity this progress the

certainly will Obviously, servicing If at think you I do in, will kick it impact significantly. benefit stay we've rates the this mean a model lot, business And our see it, talked if we balanced level. about about of and right?

our it. I servicing, we function rates going balanced what and set if opportunity we're to is a that given which the to mean, stay -- benefit purely the so prepay think And would business why model look level. But about guiding like, it's of that's at what's again, this level. how is certainly

provide there it. expectations? the come third terms saw DTC in in color a a provide quarter you helpful. Any in color you might the can Got guess there? I channel strong. would That's volume and in increases of thought corresponding the can any maybe on I have what have stronger less is you quarter, DTC bit within little versus

more players the changes in shouldn't of and relatively the to less recapture. as corresponding with had to of before with context, terms we what the business. We've then the being Jan with we And slightly cash correspondent feel Yes, top reason and in that, efficient, -- halves, We started equity we add that drop. consistent like we've terms probably more the home pricing term period business industry quarter. was don't when have be sure. rate models. and start, seeing significant Kurt interesting significant rates consistent was the of was any steady, the best do most to in rate up. almost rate corresponding a X grew held it's it of changes It beginning higher slightly, much probably we was some shift in in to our refinance growth I'll an of about business. We term really player XX% and seeing made the it on. refinance. Purchase XX% a can We to the middle in see to towards refinances. stayed it the good within than to business, making the what through put And stated opportunities do saw locks servicer were were out in it, the relatively across again, August one been why

our changes you think in expect And down our doubled on think that to capital you and continue. saw relationships. have We We've see quarter, the to execution. I markets made client I should that

we're you think a is to think awesome. at about which XX%, to it mean right, is I I close recapture, Yes. simple way look when

came direction earlier, kill kind as And in and in so And would did I we it. in go where team said if great they'll again, think rates line move I with the job, direct-to-consumer of down, different a expect. a

And Mike's we doing and on And mentioned, We've so are. recapture the from correspondent, to for end best the day, we we have who is as great decades, recapture. lowest-cost we things we are, that point, core of the channel. the I servicer. We to would think, been look, at it think, expect

should of we best buyer so the MSRs. And be

you the there correspondent anything don't So and advantage want add that. in did opportunity is we take of channel, massive I will know, to Kurt, or.

and add capital it's as would we market I the execution generating, and the ongoing to Ginnie -- mean to investors, side. for that terms And of particularly but DTC in our we and our and just Mike's holistically on at there. we around execution, we Jay and also excellent of be well opportunities look mentioned correspond true look comment maximize speeds at need I for Mae on we're securities recapture, cognizant do. speeds

It's a great point.

our from And comes of Bank. Mark Deutsche question next DeVries

there you state kind you servicing that unused have post do needle the move out bulk of kind I capacity you guys? still the lines like to of discuss discuss in really looks the could pipeline quarter. just And was more It significant for you flexibility during also, added anything latest Flagstar. could acquisitions. deals of There's hoping the for

or remain and still tangible at your -- net your be deal should So high end the shouldn't should of kind range. strong after the to really liquidity target of assets worth

and So just discuss that in you market? flexibility just could opportunity

Great Yes. question, Mark.

our almost place. ago, That couple look portfolio bulk will close is mean, a a in feel of I the we're think, landscape quarter. significant XX%. on I fourth acquisition. in that, years you look, like we a announced at great a the disruption. We we and we've now, anticipated which acted We Flagstar. grown obviously When

record of itself. for speaks I track the think So kind

slowed about landscape we to today, it down. think in has clearly, call, last you pointed as the As the

of some just that seasonality. think I is

pools, billion acquired than small slightly a kind $XX couple have of of less recently. We

the year. would we half bulk. So of up activity, always right? book market And to best buyer there's going still there, the activity. We're to that next we going first And expect are pick in and be of in is it the to participate

we'll I hand, returns capacity intentional very appropriately. From And so having a and the about been about in standpoint, we increasing to capacity. of when there opportunistic get lines, have powder sense, we'll We've when think very dry be make intentional and nail appropriate. the our act play plenty you

feel when that. at net I And in Flagstar, worth our ratio, fourth down of move tangible the slightly, and still will about you great quarter we a plenty but look room of asset room play of plenty think, there. That to so And because come room to act.

I think The well. when -- say would we be think to other there thing wins is going you there's about we're subservicing, some as

And be so with about strong buyers We've financial to excited continuing channel. originators. we're that partnered and strong

too. continue. that there, So will clients expect But we flow new

good a So I lot fronts. both on of come, think, to things

when real the past your it correspondent a you today, But to win that more your Great. am think have comments of you being feel to about a I interpreting share term? a approach little maybe to channel described of bit Okay. And in and more in longer committed kind like opportunistic. seeming look I now like kind is as reason participant and I it of kind right take

really believe good to always stewards mean, look, very deploying capital. very, I of XXX%. we're be going I --

more cost again, the we're our standpoint, to what look going we service it take best position, standpoint, and retention But of we definitely there. from in corresponding been we are a for should think share we marketplace. in and can so channel at And from a as opportunities and buyer be, MSRs the look the any at -- I we've presents are years, in think it best of

think We will share take way. it there, and to there's opportunities in we more a grow significant

for Hagen next will moment question. that of BTIG. the Eric with line And from our come One

EBITDA uses what those and figures? and a flow the you cash which the And flow When slides do last compare guys business differences manage of like deck, sources of of the the key that better X between maybe you cash feel reflection is on the to? the adjusted we the are

are of answer how repurchase go-forward uses cash Eric, the manage acquisition our it's we mean sources I share Kurt. strategy basis. flow and is on the and a

at of available So perspective what from what's the kind really about kind flow or and the for bulk chart it of after or free share last whether true cash looking talk shows other acquisitions you acquisitions, repurchases. we're recapture be correspondent a

helpful. what onboarding I That's an amortization that One here. you mean, it's flow like looks number And Flagstar? benchmark the rates? is of you. Would for in you changes have cash say quarter. on good figure forward the a was $XXX it Got Do in cash Okay. is that mortgage way following to more the for estimate proportional? million like going there

Yes. existing portfolio. I I yes, the about billion proportionately, Eric. against acquisition stratification the And and But billion our as of existing mean, MSRs between $XXX-plus [indiscernible] don't think $XX give that, $XX we for right, guidance mean, probably our I billion. Flagstar it, the call will add, of portfolio is the same

rata. pro [indiscernible] So

will the Bologna Point. that One Giuliano line our question. from for of And with come next moment Compass

strong the performance. on Congratulations continued

ones from about question leverage are just of you curious first year-over-year I'm will while operating servicing had the As are on some some is the that pretty benefit side. UPBs other incredible XX%. flat effectively Sellers the

leverage think you you how how due your and operating more probably should grow to going slower much forward. base your operating curious I'm forward, expense much have versus Going

we Thanks, Yes. The we a short opportunity. Julian. answer is have lot think continued of

we this So platform. And really some And we've be strategy continue to expenses be grow and efficient, but going to other the to us expect as able a that platform. event. a scalable a we are aginIQ like it. showed result making, perfecting believe isn't investing do and built continuous of investments think, we It's things to to to manage we onetime the allow continue to and of we more we're a you the to of servicing continue

the and benefits our that has And cost larger, to coming so down, trend continue. scale to getting we per we as been really expect loan see service we're

I all we're are focused maniacally on it, And and down. investments experience the on you the mean, cost about customer per talked we think focused if about that that loan certainly driving

in said your seconds, you savings. $X.X if by think time Mike XX call million handle that this on that's the I reduce previous had over

digital in reduce your because delivering million that's to such the you great you're over If by $XX customer, calls savings. a XX% experience

we're think in and of opportunities. the And early this. I runs his who so And servicing identifying team innings are Jones, excellent Jay

Yes. so -- And

Julien, long a down ways cost great we've and to with think, experience. I a got loan we'll to go, per drive customer continue

And just on Jay what the dot connect said. to final

the spent what experience be just said it looking We we're is saved otherwise starts for terms customer. make the connect frankly, to go deliver we're great average terms when we're XX minutes, but to are servicing the customer the servicing business. able originations how Jay X to we a experience showing to be a X save in AI on call, time to taking a in dollars. do to in deliver think can really information the to impact. have and think XX team example, call AI if with So forward a thing we plan seconds dots call help of look by can that our is in But our service it what the better going to technology able an deploying that probably see what for to way you of X for. And And to there's to is faster, now you is pulling if minutes they'd information an of X minutes, same having

of processing Xx I'm given cash impactful is in bit can helpful. out from to process in any I help ratio, same where earnings it that the dollar on how the curious refis That's few from the versus back volume are the of much more focused thinking seconds more DTC. cash-out but liens to side, period. amount probably size, can maybe then this about But switch volume switching balance the that And how up pick on is value to rate-term might origination most perspective, quarters? second very appreciate gain-on-sale that. if a incremental you have over up higher or or refi that refi help that a next

going out but loan, the rate that team you are perspective. mean any it, really margins nail hit the margins. the lower think little calls our does Mike to refi And our I customer Our tremendous Obviously, cash margins I I bit Yes. a a right? do second term from pretty we're us, to lien on than speak are refi job And tremendous. certainly, right? think a can head, their marketing

that, dime from are. really the rates able And our Mike on the have between basis to kind that to a is of see based drive rates depending pivot who being and X we rate backed on different really end about But where equity. lock of of strong. customers want -- $XX,XXX, are to our volumes pivoted marketing really, where have quarter. perspective, who the plus And up a volume those remains number since the talked on strategy capital points the of $XXX,XXX with Rates products, are XX

we're just add, And customer, Yes. meet best to just talk to trying to product help a think I'll if them we you -- the when about their find needs.

it's rate cash Sometimes sometimes second. refi, sometimes out that's term it's refinance a a a

profitable brief on about the and will I And industry exciting that that so that those continually be investing was business more is the change being meaningful with difficult plus down for when we combined very very came up best during saw profitability. And react very we're where to our business. and a direct-to-consumer environment. The the a is still in a customers the back our We the shown third been on that period depending done and are difficult of rates, right able whatever at this little bit very created to quickly profitable. thing quarter, now. couple it has rates X% had rates what impact it is we're the the and originations interest rate going for in a in of business. we've last are our platform. And higher DTC -- think of coiling We is spring were bit customer, a do to years the And have for more in

in we so might see term. rate more And out than seconds cash

time at guiding we what And this were those levels. a we lower the so for but were we're little last quarter, bit earning higher still than at

throughout portfolio when the have been We building closed coming, capacity more Magstar of steadily this. anticipation particularly year acquisition. And in growth we that's we've

customers. what move not next predictions think quarter in and so. do we we than as profitable to I showed other on we quickly year, of regardless be rates delivering prepared really we're balanced happens our make things doing business for our I shareholders. rates, we'll very make third model we're good will So right and is our it what for to the fluctuate. And with we're sure and look that, And think sure the that when returns it's can

the a closing about little to include then in servicing guidance I'm -- as When quarter there because and expectations, if impact bit thought I the from a have helpful. for know fourth you you Flagstar? numbers hopefully, curious or very for bit talk color my originations, any side. any if a And the a on the simpler do are those Flagstar then transacting. of And little question love quicker later the That's much sooner

earlier -- fourth to does great anticipate that close. Julian, The later. question. than just we the So Yes, of we're will in and the it guiding thanks. Flagstar quarter include guidance the quarter do close But obviously, impact fourth

of One question. line with come for from our that will the next moment KBW. Bose George And

potentially Just terms wanted is bulk bulk remain versus I or do even share in the you you're improve to I it's is opportunity in to that to played suggesting? go as correspondent it your quarter correspondent, market mean levels back at what of this likely has the guess, say discussion. out, fair largely the to

out, No, I don't think has the bulk Bose. opportunity played

and a we I think this X. doing been have time, you've long

be in over we've that opportunities past. going there'll But as plenty have market -- a participate think of I we seen will play the So bulk forward. to the

I think on the correspondent, No.

this past and our what intention. think quarter, we in you grow would able that saw that be I be beyond to will

going look number you when it, always would the again, mean, very we're at capital say, be one, to I deployment, disciplined. I

opportunity built this where we'll is expect believe beyond But So quarter. correspondent we it -- grow the at franchise previous in the we've you And returns we to that saw what We look best channel. in that the like is. strong. very

the And so we're bullish there. opportunity very on

was that think beyond this quarter. where it we in we it significantly past grow So will

And there last run this Great. normalized Okay. corporate and was then $XX couldn't rate? more actually, this But some just I the expense million a recall onetime a of quarter quarter item. is on little line the question

Kurt. it's Bose,

And So last correct. $XX million $XX quarter. not yes, think you're versus million, $XX it's I million

that will run tune onetime go quarter, been -- last QX, down back but to level well. a we were sort there rate of as $X million $XX through onetime So it it, onetime this There in a do costs that before. quarter had that came few of was of in the it $X bit anticipate benefit the million, to million little or call

our that from line next question. come One with moment the And will BTIG. Hagen Eric for of

to do the anyway? capital imagine How take to about the think I when now effect? are mean guys I actually rules. standards, MSR the want see I of could or ask to Mae but catalyze capitalized valuations those rules relative well bulk responding you the those you Ginnie disrupted market implementation be or servicing you trades

that Eric, guidance based it's in they the sales more kind Jenny good or mean, of were X capitalized based think a themselves that of guidelines, they that closely I seen as those capital one out said look almost following plan on Ginnie that and MSR stay We're mean, rules servicers, making ago we've the X Kurt. with of be on kind catalyst of well. yes, a I closely. X we've for on were terms had Mae will and that potentially. I came in been all calculations Jenny question. sort X X risk-based their undercapitalized now. to monitoring It's well Yes, think any years there tune I that public indicated we were extremely changes to And

sales, a have Mae drive more year bulk bit activity activity, seen space the which of has in and has we'll maybe modest yes, So Ginnie been Ginnie Mae the terms little progressed. actually actually in Ginnie seen as really we some bulk really, sales. We've

for of moment next Crispin come from that will And Love our line with Piper One question. Sandler. the

pretax in mentioned is with in you range the the servicing some remarks, has XX% expected impact bigger range. well. of XXXX. been fourth a XXXX, And target your the Just segment get that to to as quarter higher in origination you that of you for can prepared to and your making the XX% speak ROTCE of assumptions to end be could just what In XX%-plus

level just XXXX what to end bigger in you or So originations of make that range would as get be of the a higher even that above impact. that a curious expect kind to to

question. good Yes,

the middle I the that answer range is in very comfortable of the we've think said already. we're

there that that I into lot that. a catalyze range, And so of end up of are think going the higher things could

the episodes could up and in had that kind money, go in periodic originations that. borrowers originations of like think help think, their August September where I and are volumes because I we drive

deploy -- which And pipeline more that earlier, about think Jay us. healthy subservicing volumes, any more keep I capital for we've in does a got sorry, mind, of subservicing. talked subservicing not

it's So income. true fee-based

we not could the and into earnings drive I Fed the think think that to of a be, range. is then lot stay maybe and up rates come the people could drive end higher that aggressive don't higher end cuts going catalyze us of as range. And high as down of into they're have and the speeds X and rate candidly, the if the

into that lower to end So the range lot the opportunities and of us we in much of would drive think that a the there really drive the not down range. us are of end higher

into I XX% operate XX% with add just this And we'll And said. everything the agree range I'd this at And year just remind probably XX% Curt everybody, we've introducing seen to the to year, momentum. came level. -- we through

We the done a bit that the little model have everything year. of we've at our wind back with business like balanced this

lock. up I of take at that range. operate point feel size originations the that again, where to But in and quarter revenue like a bit ended us the of of allow the higher we point the environment this rate going is think balanced back, so to market you model comfortable the if middle step business little we of a our fact that regardless because the And is, recognize

we mid-teens trade of of And multiple of off our where ROE earnings, generating and parts as multiple a of book the given business. balance sheet a

the there as servicing Kurt the origination As special next of some that's to businesses and look from we a excited on number business our of opportunity we're year. ahead streams have we fee-based mentioned, other capital-light revenue and subservicing,

a Great. bit you Can in color. cycle on sense. discuss And recapture. digging cycles. little compared your Definitely then I appreciate all that prior makes just this deeper to positioning

Just And expect areas? other do recapture you would great. these doing rates what areas your higher to color little tech that and AI more seeing on be drive are you're technology, already? mentioned you or for side on recapture a maintain You current the

Yes.

I think, look, we're XXX%.

a it's I better. think we've confident delivering look cycle times. when the we're process standpoint, customer a I mean do made at going our We're from better that to you investments experience. in

additional that. and continue to now kind as -- to we are We carrying do continue plan and of speak capacity

I a when consistent that just those going have got capability, the not candidly, if mean there. time. then I super team all gotten our models marketing that's propensity, you to look contribute at analytical better built the recapture over to We've higher think we've talented capability, around

level. And look so and a we when -- at in customer looking level this -- at customer scoring we're a at

customer. be made grow customer definitely the we've be drive to are best really the for thing we'll better we investments cycle. but in able it's what the What's maintain good and confident so ultimately. results and very feel going any And recapture on very that to dependent to going the And

any showing closing I for Bray in queue the questions this like to remarks. time. at the over would now no further Jay to I'm turn call Mr.

really look and conversations. forward appreciate us We joining Thank you. further to everybody

Thank program. all today's you for concludes This participating.

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