Leadership optimistic about achieving a $1 trillion portfolio amid financial headwinds
Mr. Cooper Group wrapped up the fourth quarter of 2023 with a pre-tax income of $69 million and a net income of $46 million.
After adjusting for certain markets and other specific factors, the company’s operating income before taxes hit $151 million. These adjustments accounted for a $41 million impact from market changes and hedges and a $27 million expense from a cyber event it had previously announced, among other detailed reconciliations.
“The fourth quarter closed out an exceptionally productive year for Mr. Cooper, with steadily rising return on equity throughout the year and very substantial growth, which puts us on the cusp of achieving our $1 trillion portfolio strategic target,” said group chairman and CEO Jay Bray. “We enter 2024 with robust capital and liquidity, an extremely talented and dedicated team, and enormous energy to serve customers, clients and all our other stakeholders.”
According to Mr. Cooper’s Q4 2023 earnings report, its servicing division posted a pre-tax income of $184 million for the quarter, which included a $41 million contribution from market adjustments. By the end of the quarter, the servicing portfolio reached $992 billion, with the division’s operating income before taxes (excluding market adjustments) coming in at $229 million. The Mortgage Servicing Rights (MSR) were valued at $9,090 million, equivalent to 155 basis points of MSR UPB.
The originations segment, focused on acquiring loans and refinancing existing ones to create servicing assets, reported a pre-tax income of $9 million and an operating income before taxes of $10 million for the quarter.
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The company managed to fund 10,699 loans, totaling about $2.7 billion in UPB, divided between $1.2 billion from direct-to-consumer efforts and $1.5 billion through correspondent channels. The quarter saw a 22% drop in funded volume and an equal decrease in pull-through adjusted volume to $2.6 billion, reflecting the competitive and changing market conditions, the lender said.
Mr. Cooper’s vice chairman, Chris Marshall, highlighted the year’s operational achievements.
“Operational performance this year has benefited from strong focus and vigorous execution,” he said. “Accomplishments include record servicing profits and very agile performance by our originations unit despite headwinds from rising interest rates. Over the last 15 years, we have grown in a steady, consistent, and prudent fashion to the point that today we have earned the title of market leader. I believe we are in strong shape to excel in 2024 and beyond.”
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