Mr. Cooper Group Inc., together with its subsidiaries, operates as a non-bank servicer of residential mortgage loans in the United States The company also provides real estate property disposition services through its Xome subsidiary.
Investors primarily include government-sponsored enterprises (‘GSE’), such as the Federal National Mortgage Association (‘Fannie Mae’ or ‘FNMA’), the Federal Home Loan Mortgage Corp (‘Freddie Mac’ or ‘FHLMC’), the Government National Mortgage Association (‘Ginnie...
Mr. Cooper Group Inc., together with its subsidiaries, operates as a non-bank servicer of residential mortgage loans in the United States The company also provides real estate property disposition services through its Xome subsidiary.
Investors primarily include government-sponsored enterprises (‘GSE’), such as the Federal National Mortgage Association (‘Fannie Mae’ or ‘FNMA’), the Federal Home Loan Mortgage Corp (‘Freddie Mac’ or ‘FHLMC’), the Government National Mortgage Association (‘Ginnie Mae’ or ‘GNMA’), investors in private-label securitizations, as well as organizations owning mortgage servicing rights (‘MSR’), which engage the company for subservicing, special servicing, technology licensing, recapture services, and other value-added services.
Business Segments
The company conducts its operations primarily through two operating segments, Servicing and Originations.
Servicing
As of December 31, 2024, the company served 6.7 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 its mortgage loan servicing portfolio.
In 2024, the company continued to grow its servicing portfolio through the acquisition of certain mortgage operation assets of Flagstar Bank, N.A. (‘Flagstar’), MSR portfolio acquisitions, growth in its correspondent and co-issue channel, and through growth in its subservicing business.
Servicing
Where the company owns the right to service loans, it recognizes MSR assets in its consolidated financial statements and has elected to mark this portfolio to fair value each quarter. 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 generally has the right to solicit its customers for refinance opportunities, which are processed through its direct-to-consumer channel in its Originations segment.
Subservicing
The company services loans on behalf of clients who own the underlying servicing rights or underlying mortgage loans. Since it does not own the right to service the loan, it does not recognize an MSR asset in its consolidated financial statements. The company primarily generates revenue based upon a stated fee per loan per month that varies based on the loan’s delinquency status. Advances are generally limited, with recoveries typically following within 30 days. Additionally, its exposure to foreclosure-related costs and losses is generally limited in its 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 its brand Rushmore Servicing.
Focus on the Customer
The company is focused on providing quality service to its customers and has invested significantly in technology solutions to improve the customer experience.
For each loan it services or subservices, the company utilizes a customer-centric model designed to increase customer performance and to decrease customer delinquencies. Keys to this model include frequent customer 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.
Originations
The company’s Originations segment originates residential mortgage loans with the intent to sell in the secondary market, providing both purchase and refinance opportunities to its existing servicing customers through its direct-to-consumer channel and purchases loans from other originators through its correspondent channel. According to the latest publication by Inside Mortgage Finance, as of the fourth quarter of 2024, the company was the 18th largest overall mortgage loan originator in the United States. Originated loans are classified as held for sale and carried at fair value; the company generates revenue through realized and unrealized gains on mortgage loans held for sale associated with the sale of mortgage loans, as well as fees earned associated with originating loans. The company originates and purchases conventional mortgage loans conforming to the underwriting standards of the GSEs. It 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 closed-end second lien refinance loans and jumbo loans in its direct-to-consumer channel, originating to the standards of its investors.
The company utilizes warehouse facilities to fund originated loans. When it sells originated mortgage loans to secondary market investors, it generally retains the servicing rights on mortgage loans sold. The mortgage loans are typically sold within 30 days of origination 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 customers through its direct-to-consumer channel. This channel utilizes its call centers, website, and mobile apps, specially-trained teams of licensed mortgage originators, predictive analytics, and modeling utilizing proprietary data from its servicing portfolio to reach those of its existing 6.7 million servicing customers. 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.
The company’s direct-to-consumer channel represented 35% of its mortgage originations for the years ended December 31, 2024.
Correspondent Channel
The company purchases closed mortgage loans from community banks, credit unions, and independent mortgage bankers. It generates revenue from the receipt of funding 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 its servicing portfolio.
The company’s correspondent channel represented 65% of its mortgage originations for the years ended December 31, 2024.
History
The company was founded in 1994. It was incorporated in 2015. The company was formerly known as WMIH Corp. and changed its name to Mr. Cooper Group Inc. in 2018.
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