Onity Group Q2 Earnings Call Highlights

Revenue rose 24% year over year, while funded originations reached a record $15.5 billion, up 64%, driven primarily by correspondent lending and co-issue activity.

Origination margins also improved to 26 basis points.

Onity reported a quarterly net loss after approximately $33 million in transaction costs and unfavorable fair-value adjustments, including expenses tied to its reverse asset sale to Finance of America and the transfer of legacy subservicing to Rithm.

Management expects full-year 2026 adjusted ROE at the low end of its 10%–15% guidance range amid geopolitical, inflationary and market pressures, while pursuing servicing growth, AI-driven cost savings and additional share repurchases.

Onity Group reported double-digit year-over-year revenue growth and record quarterly origination volume in the second quarter of 2026, while transaction costs and unfavorable fair-value adjustments contributed to a net loss.

Chair, President and Chief Executive Officer Glen Messina said the company’s balanced mortgage origination and servicing model continued to provide offsetting earnings dynamics as interest rates changed.

Higher rates during the second quarter supported servicing profitability, while origination adjusted pre-tax income declined sequentially.

“Our sound strategy and strong operating fundamentals delivered double-digit year-over-year revenue growth and record origination volume,” Messina said.

He added that Onity completed its reverse asset sale to Finance of America and transferred most of its legacy subservicing business back to Rithm.

Messina said the transactions are intended to simplify the company’s operations, improve profitability and focus, and provide greater strategic flexibility.

The quarterly net loss included approximately $33 million of pre-tax costs associated with the transactions and market-driven unfavorable asset fair-value adjustments.

Chief Financial Officer Sean O’Neil said revenue increased 24% from a year earlier, supported by higher servicing and origination volumes, improved recapture rates, lower servicing advances and data analytics.

Sequential revenue growth was modest, as servicing growth more than offset an origination decline.

Funded originations reached $15.5 billion in the second quarter, the largest quarterly volume in the company’s history.

Messina said originations rose 64% from the prior-year period and outpaced industry growth.

The business-to-business channel, including correspondent lending and co-issue activity, was the largest contributor to the volume increase.

O’Neil said origination pre-tax income rose more than threefold from the prior year, driven by increased combined-business volume and stronger execution.

Margins improved as well, with Messina noting that margins increased from 23 basis points to 26 basis points.

Consumer-direct lending remained profitable, though its adjusted pre-tax income declined sequentially.

O’Neil attributed that decline to a 30% quarter-over-quarter decrease in lock volume and higher operating expenses from commissions tied to the first-quarter refinance surge.

Onity’s refinance recapture rate was 51% in the second quarter, up three percentage points from a year earlier, while refinance payoff volume increased roughly threefold.

The company also reported that home-equity product volume doubled from the prior-year quarter.

Second-lien originations more than doubled year over year, with more than $70 million funded during the quarter.

Total servicing unpaid principal balance rose 10% from a year earlier, compared with 3% growth for the overall servicing i...