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HousingWire Annual: NewRez’s Silverstein explains Computershare acquisition strategy

Rithm’s $720M acquisition of Computershare allows the company to improve its fee-based income: Silverstein

CEDAR CREEK, Texas — Real estate investment trust Rithm Capital Corp.’s $720 million acquisition of Computershare Mortgage Services Inc. allows the company to improve its fee-based income as the deal includes the purchase of Specialized Loan Servicing LLC (SLS).

“The SLS platform for us is very much the focus as to how we think about fee-based income and third-party business,” Baron Silverstein, president at NewRez, a subsidiary of Rithm, said on Wednesday afternoon during the HousingWire Annual conference, held Oct. 10-12 at the Hyatt Lost Pines.

The deal will add a mortgage servicing rights (MSR) portfolio of about $136 billion in unpaid principal balance to Rithm. It includes $85 billion in third-party servicing and the SLS MSR portfolio.

Following the transaction’s closing, which is expected to happen in the first quarter of 2024, SLS will operate under NewRez, the eighth-largest U.S. mortgage lender in the first half of 2023, with a production of $17 billion in loans, per Inside Mortgage Finance data.

“When we think about the market that we’re today, then to the extent that we can diversify versus utilizing our capital to continue to grow our platform; doing fee-based business on a sub-servicing perspective; helping customers stay in their homes; and helping MSR owners or MSR investors service the asset that they own. That’s our core strategy from a growth perspective,” Silverstein added.

According to Silverstein, Rithm has focused on building its servicing portfolio and adding origination capabilities through acquisitions over the last few years.

For example, the Caliber Home Loans $1.675 billion deal in April 2021 brought in a large servicing portfolio, expanding the company’s direct-to-consumer and wholesale businesses and the distributed retail platform.

Silverstein said the integration of Caliber is “completely done,” with the company recently rebranding the distributed retail division into NewRez.

He also noted that acquisitions can be complicated. That’s why acquirers should make integrations as simple and quick as possible. The market can shift, and it could be challenging to add new products or create efficiencies amid legacy structures, he said.

In July, Rithm struck a deal to acquire Sculptor Capital Management Inc. for $639 million, leading to a dispute among the shareholders at the asset management firm.

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