Newrez Posts Strong Q2 Profit, Eyes $65B Originations

Newrez reported a substantial increase in pretax operating income for the second quarter of 2026, reaching $307.6 million. This figure represents a notable rise from the $273.7 million recorded in the first quarter of 2026, according to filings with the Securities and Exchange Commission (SEC). The company's improved financial performance was attributed to enhanced mortgage servicing operations and an increase in loan originations compared to the previous quarter. Baron Silverstein, president of Newrez, highlighted that the results were bolstered by disciplined origination strategies, higher servicing fees, and despite fluctuating interest rates, an increase in recapture rates and a decrease in amortization. Newrez is projecting approximately $65 billion in originations for the current year, an increase from the $63.4 billion originated in 2025. The company originated $15.9 billion in mortgages during the second quarter of 2026, marking a 3% increase quarter-over-quarter, though it was down 2% year-over-year. The gain-on-sale margin for the second quarter stood at 1.64%, an improvement from 1.44% in the prior quarter. Silverstein emphasized the company's focus on maintaining pricing discipline and concentrating on non-agency loans through its wholesale channel, alongside customer retention via its consumer-direct channel. These combined channels now account for 40% of Newrez's overall originations, an 11% increase from the previous quarter. In a strategic move, Newrez exited the distributed retail channel in July 2026, transferring operations to Synergy One Lending, a division of American Pacific Mortgage. On the servicing front, Newrez concluded the second quarter with $865 billion in unpaid principal balance, which includes $268 billion of third-party servicing. The servicing segment generated $254.6 million in pretax income, up from $203.6 million in the preceding quarter. The company also saw a significant 45% quarter-over-quarter increase in co-issue MSR acquisitions, reaching $5 billion, indicating continued momentum in mortgage servicing rights growth. The pretax operating income figure of $307.6 million excludes a $194.5 million mark-to-market loss on mortgage servicing rights (MSRs), hedge impacts, and other nonoperating items, providing a clearer view of the core operational profitability.