NYSE: ONIT
ONITY GROUP INC.CIK 0000873860 · SIC 6162 · Mortgage Bankers
When we use the terms “Onity,” “ONIT,” “we,” “us” and “our,” we are referring to Onity Group Inc. and its consolidated subsidiaries. About this business →
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revenue $282.9M, net income -$11.9M. Onity swings to Q2 loss; exits reverse mortgages via FAR sale
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Onity exits reverse mortgage business, sells $5.2B servicing portfolio for $70-80M
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Onity receives regulatory approval for $70-80M reverse mortgage sale, authorizes $20M buyback
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Latest financial statements
From 10-Q filed Aug 6, 2026 (period ending Jun 30, 2026). As printed on the EDGAR/iXBRL face — not generated by the model.
Consolidated Statements of Operations (Unaudited)
(Dollars in millions, except per share data)
| Description | Three months ended June 30, 2026 | Three months ended June 30, 2025 | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
|---|---|---|---|---|
| Revenue | ||||
| Servicing and subservicing fees | 229.3 | 211.3 | 451.7 | 414.6 |
| Gain on reverse loans and HMBS-related borrowings, net | 3.8 | 11.9 | 22.5 | 35.7 |
| Gain on loans held for sale, net | 29.4 | 10.4 | 63.5 | 22.2 |
| Other revenue, net | 20.4 | 13.0 | 39.5 | 23.9 |
| Total revenue | 282.9 | 246.6 | 577.2 | 496.4 |
| MSR valuation adjustments, net | (70.5) | (27.3) | (139.5) | (66.2) |
| Operating expenses | ||||
| Compensation and benefits | 69.8 | 60.9 | 139.5 | 118.4 |
| Servicing and origination | 23.1 | 13.0 | 41.6 | 26.0 |
| Technology and communications | 17.9 | 15.5 | 35.4 | 30.5 |
| Professional services | 16.7 | 8.4 | 31.4 | 31.0 |
| Occupancy, equipment and mailing | 8.2 | 8.1 | 16.7 | 16.3 |
| Other expenses | 3.3 | 3.7 | 6.6 | 7.2 |
| Total operating expenses | 139.0 | 109.5 | 271.2 | 229.4 |
| Other income (expense) | ||||
| Interest income | 55.5 | 32.1 | 96.5 | 58.3 |
| Interest expense | (103.1) | (75.6) | (185.7) | (142.7) |
| Pledged MSR liability expense | (38.2) | (43.0) | (80.8) | (84.9) |
| Other, net | (2.7) | (0.4) | (3.6) | 0.4 |
| Other income (expense), net | (88.5) | (87.0) | (173.6) | (168.8) |
| Income (loss) before income taxes | (15.1) | 22.8 | (7.1) | 32.0 |
| Income tax expense (benefit) | (3.2) | 1.3 | (2.9) | (11.7) |
| Net income (loss) | (11.9) | 21.5 | (4.2) | 43.6 |
| Preferred stock dividend | (1.0) | (1.0) | (2.1) | (2.1) |
| Net income (loss) attributable to common stockholders | (12.9) | 20.5 | (6.3) | 41.6 |
| Earnings (loss) per share attributable to common stockholders | ||||
| Basic | (1.53) | 2.55 | (0.74) | 5.23 |
| Diluted | (1.53) | 2.40 | (0.74) | 4.90 |
| Weighted average common shares outstanding | ||||
| Basic | 8,447,094 | 8,021,182 | 8,470,827 | 7,947,992 |
| Diluted | 8,447,094 | 8,534,627 | 8,470,827 | 8,486,158 |
Consolidated Balance Sheets (Unaudited)
(Dollars in millions, except per share data)
| Description | June 30, 2026 | December 31, 2025 |
|---|---|---|
| Assets | ||
| Cash and cash equivalents | 196.6 | 180.5 |
| Restricted cash ($163.1 and $37.3 related to variable interest entities (VIEs)) | 196.3 | 84.1 |
| Mortgage servicing rights (MSRs), at fair value | 3,208.8 | 2,825.3 |
| Advances, net ($277.2 and $364.5 related to VIEs) | 369.5 | 483.4 |
| Loans held for sale, at fair value ($2,397.5 and $1,199.8 related to VIEs) | 3,601.9 | 1,891.7 |
| Reverse loans held for sale pooled into Home Equity Conversion Mortgage-Backed Securities (HMBS), at fair value | — | 9,807.5 |
| Reverse loans held for investment pooled into HMBS, at fair value | 3,640.6 | — |
| Receivables, net ($80.2 and $64.2 related to VIEs) | 233.9 | 189.8 |
| Premises and equipment, net | 11.0 | 10.8 |
| Other assets ($41.9 and $28.4 carried at fair value) ($164.6 and $83.4 related to VIEs) | 365.3 | 273.9 |
| Contingent loan repurchase asset | 526.4 | 423.6 |
| Total assets | 12,350.3 | 16,170.6 |
| Liabilities and Stockholders’ Equity | ||
| Liabilities | ||
| HMBS-related borrowings, at fair value | 3,610.9 | 9,611.7 |
| MSR related financing liabilities, at fair value | 729.0 | 842.0 |
| MSR financing facilities, net | 1,566.1 | 1,285.2 |
| Advance match funded liabilities ($254.7 and $341.4 related to VIEs) | 254.7 | 341.9 |
| Mortgage warehouse facilities | 2,061.7 | 1,224.6 |
| Reverse mortgage securitization notes, net (related to VIE) | 1,925.0 | 899.3 |
| Senior notes, net | 693.2 | 489.6 |
| Other liabilities ($11.7 and $10.2 carried at fair value) | 323.5 | 374.9 |
| Contingent loan repurchase liability | 526.4 | 423.6 |
| Total liabilities | 11,690.5 | 15,492.8 |
| Commitments and Contingencies (Notes 21 and 22) | ||
| Mezzanine Equity | ||
| Series B Preferred stock, $0.01 par value and $25.00 liquidation preference value; 2,400,000 shares authorized; 2,111,786 and 2,111,786 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively | 49.9 | 49.9 |
| Stockholders’ Equity | ||
| Common stock, $0.01 par value; 13,333,333 shares authorized; 8,406,047 and 8,521,636 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively | 0.1 | 0.1 |
| Additional paid-in capital | 544.9 | 556.1 |
| Retained earnings | 65.6 | 71.9 |
| Accumulated other comprehensive loss, net of income taxes | (0.7) | (0.1) |
| Total stockholders’ equity | 609.9 | 627.9 |
| Total liabilities, mezzanine equity and stockholders’ equity | 12,350.3 | 16,170.6 |
Consolidated Statements of Cash Flows (Unaudited)
(Dollars in millions)
| Description | Six months ended June 30, 2026 | Six months ended June 30, 2025 |
|---|---|---|
| Cash flows from operating activities | ||
| Net income (loss) | (4.2) | 43.6 |
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
| MSR valuation adjustments, net | 176.2 | 101.0 |
| Provision for bad debts (advances and receivables) | 9.1 | 9.0 |
| Provision for indemnification obligations | 8.0 | 1.5 |
| Depreciation | 2.2 | 2.3 |
| Amortization of debt issuance costs, discount and premium | 22.2 | 11.6 |
| Amortization of intangibles | 0.5 | 0.5 |
| Equity-based compensation expense | 4.6 | 4.2 |
| Interest capitalized on reverse buyouts | (41.3) | (21.3) |
| Loss on extinguishment of debt | 0.3 | — |
| Deferred income tax expense (benefit) | (1.9) | (0.5) |
| Gain on reverse loans and HMBS-related borrowings, net | (11.3) | (27.2) |
| Gain on loans held for sale, net | (63.5) | (22.2) |
| Changes in assets and liabilities: | ||
| Decrease in advances | 133.2 | 101.2 |
| Decrease (increase) in receivables and other assets | 81.2 | (0.7) |
| Increase in derivatives | (54.1) | (27.8) |
| Decrease in other liabilities | (103.8) | (44.8) |
| Cash flows from loans held for sale: | ||
| Origination and purchase of loans held for sale | (16,354.6) | (10,162.0) |
| Proceeds from sale and collections of loans held for sale | 14,071.1 | 9,287.0 |
| Proceeds from sale of reverse loans held for sale, pooled into HMBS, net of associated HMBS-related borrowings | 18.8 | — |
| Other, net | 1.3 | (2.1) |
| Net cash used in operating activities | (2,106.0) | (746.9) |
| Cash flows from investing activities | ||
| Origination of reverse loans held for investment, pooled into HMBS | (18.7) | (545.5) |
| Principal payments received on loans previously held for investment | 1,113.3 | 1,563.4 |
| Proceeds from sale of reverse loans held for sale (previously held for investment), pooled into HMBS, net of associated HMBS-related borrowings | 75.1 | — |
| Purchase of MSRs | (332.8) | (151.0) |
| Proceeds from sale of MSRs | 20.3 | 4.8 |
| Acquisition of advances in connection with MSR transactions | (6.2) | (3.4) |
| Proceeds from sale of advances in connection with MSR transactions | 0.9 | 0.7 |
| Purchase of real estate | (90.6) | (4.7) |
| Proceeds from sale of real estate | 53.6 | 22.5 |
| Additions to premises and equipment | (0.9) | (0.3) |
| Net cash provided by investing activities | 814.0 | 886.5 |
| Cash flows from financing activities | ||
| Repayment of advance match funded liabilities, net | (87.2) | (74.6) |
| Proceeds from mortgage warehouse facilities, net | 837.1 | 719.3 |
| Proceeds from reverse mortgage securitization notes | 1,468.6 | — |
| Repayment of reverse mortgage securitization notes | (448.8) | (62.9) |
| Proceeds from MSR financing facilities, net | 281.9 | 261.6 |
| Proceeds from issuance of Senior notes | 206.5 | — |
| Payment of debt issuance costs | (17.5) | (0.3) |
| Proceeds from MSR related financing liabilities | 25.5 | 15.7 |
| Repayment of MSR related financing liabilities | (57.5) | (34.8) |
| Proceeds from sale of HECM or reverse mortgages, accounted for as a financing (HMBS-related borrowings) | 331.6 | 577.6 |
| Repayment of HMBS-related borrowings | (1,105.8) | (1,544.6) |
| Repurchase of common stock | (12.0) | — |
| Payment of preferred stock dividend | (2.1) | (2.1) |
| Payment on exercise of common stock warrants | — | (3.5) |
| Net cash provided by (used in) financing activities | 1,420.3 | (148.6) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | 128.3 | (9.0) |
| Cash, cash equivalents and restricted cash at beginning of year | 264.6 | 265.6 |
| Cash, cash equivalents and restricted cash at end of period | 392.9 | 256.6 |
| Supplemental cash flow information | ||
| Interest paid | 157.1 | 126.4 |
| Income tax payments (refunds), net | ||
| Federal | 0.2 | 0.3 |
| State | 0.1 | 0.4 |
| Foreign | 1.3 | 1.8 |
| 1.6 | 2.5 | |
| Supplemental non-cash investing and financing activities: | ||
| HECM reverse MSR sale transaction | ||
| Reverse loans held for sale pooled into HMBS, at fair value | (5,629.6) | — |
| HMBS-related borrowings, at fair value | (5,503.1) | — |
| Less: Receivables, net | 32.6 | — |
| Net cash received | 93.9 | — |
| Recognition of gross right-of-use asset and lease liability | ||
| Right-of-use asset | 1.5 | 0.7 |
| Lease liability | 1.5 | 0.7 |
| Derecognition of MSRs and MSR related financing liabilities, at fair value: | ||
| MSR, at fair value | (123.2) | (12.2) |
| MSR related financing liability, at fair value MSR pledged liability | (123.1) | (12.2) |
Amounts as printed on the EDGAR/iXBRL face — (Dollars in millions, except per share data); (Dollars in millions). Labels, columns, and figures are the filing face, not a GAAP stencil. Interactive statements & notes on EDGAR ↗
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About ONITY GROUP INC.
Source: Item 1 (Business) from the 10-K filed February 17, 2026. Description as filed by the company with the SEC.
ITEM 1. BUSINESS
When we use the terms “Onity,” “ONIT,” “we,” “us” and “our,” we are referring to Onity Group Inc. and its consolidated subsidiaries.
OVERVIEW
We are a financial services company that services and originates both forward and reverse mortgage loans, through our primary brands, PHH Mortgage and Liberty Reverse Mortgage. We are a leader in the servicing industry that is focused on creating positive outcomes for homeowners, clients, and investors. This long-standing core competency continues to be a guiding principle as we seek to grow our business and improve our financial performance.
We are headquartered in West Palm Beach, Florida with offices and operations in the U.S., in the United States Virgin Islands (USVI), in India and the Philippines. At December 31, 2025, approximately 75% of our workforce was located outside the U.S. Onity Group Inc. is a Florida corporation organized in February 1988. With our predecessor companies, we have been servicing residential mortgage loans since 1988. We have been originating forward mortgage loans since 2012 and reverse mortgage loans since 2013.
BUSINESS MODEL AND SEGMENTS
We seek to create value and maximize returns for shareholders through balance and diversification, prudent capital-light growth, industry-leading cost structure, top tier operating performance and capabilities, and dynamic asset management. Our core competencies revolve around our Servicing business with an Originations platform to replenish and pursue growth of our servicing portfolio.
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Our Servicing business is comprised of two components, our owned mortgage servicing rights (MSR) servicing portfolio and our subservicing portfolio that complement each other when managing scale. We invest our capital to fund purchases and originations of our owned MSRs, for which we establish a targeted return on investment. Our net return includes servicing revenue net of servicing costs, less MSR portfolio runoff, and less MSR and advance funding cost. Our net return is impacted by fair value changes of our owned MSRs, net of hedging, that vary based on market conditions. Our subservicing portfolio generates a relatively stable source of revenue that enhances our returns. While subservicing fees are relatively lower than servicing fees, we do not incur any significant capital utilization or funding of advances and are not exposed to MSR fair value volatility. We target a balanced mix of our portfolio between servicing and subservicing based on capital allocation and returns. Our servicing operations and customer interactions do not differentiate whether loans are serviced or subserviced.
Our Originations business’ strategy is to provide self-sustained replenishment opportunities to our servicing portfolio and profitable growth. Our Originations success is built on our relationships with borrowers, lenders and other market participants. We purchase MSRs through bulk portfolio purchases, through flow purchase agreements with our network of mortgage companies and financial institutions, and through participation in the Agency Cash Window (or Co-Issue) programs. In order to diversify our sources of servicing and reduce our reliance on others, we have been developing our origination of MSRs through different channels, including our portfolio recapture channel, retail, wholesale and correspondent lending.
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The chart below summarizes our current business model:
We report our activities in three segments, Servicing, Originations and Corporate. Our business segments reflect the internal reporting that we use to evaluate operating performance of services and to assess the allocation of our resources. The financial information for our segments is presented in our financial statements in Note 24 — Business Segment Reporting and discussed in the individual business operations sections of Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Servicing
Our Servicing business is primarily comprised of our residential forward mortgage servicing business that currently accounts for the majority of our total revenues, our reverse mortgage servicing business, and our small commercial mortgage servicing business. Our servicing clients include some of the largest financial institutions in the U.S., including the GSEs, Ginnie Mae and non-Agency residential mortgage-backed securities (RMBS) trusts, and other large MSR investors.
As of December 31, 2025, our servicing and subservicing portfolio consisted of approximately 1.4 million loans with an unpaid principal balance (UPB) of $328.3 billion.
Servicing involves the collection of principal and interest payments from borrowers, the administration of tax and insurance escrow accounts, the collection of insurance claims, the management of loans that are delinquent or in foreclosure or bankruptcy, including making servicing advances, evaluating loans for modification and other loss mitigation activities and, if necessary, foreclosure referrals and the sale of the underlying mortgaged property following foreclosure (REO) on behalf of mortgage loan investors or other servicers. Master servicing involves the collection of payments from servicers and the distribution of funds to investors in mortgage and asset-backed securities and whole loan packages. Reverse servicing includes additional functions such as the funding of borrowers under their approved borrowing capacity, the repurchase of loans and assignment to HUD upon reaching a limit (based on the maximum claim amount) and the securitization of tails under the Ginnie Mae program. We earn contractual monthly servicing fees (which are typically payable as a fixed percentage of UPB) pursuant to servicing agreements as well as other ancillary fees relating to our servicing activities such as late fees.
We own MSRs outright, where we typically receive all the servicing economics, and we subservice on behalf of other institutions that own the MSRs, in which case we typically earn a relatively smaller fee for performing the subservicing activities. Special servicing is a form of subservicing where we generally manage only delinquent loans on behalf of a loan owner. We typically earn subservicing and special servicing fees either as a percentage of UPB or on a per loan basis based on delinquency status. Our reverse owned servicing activities are mainly reflected in our financial statements with the gain on reverse loans and HMBS-related borrowings, net.
Servicing advances are an important component of our business and are amounts that we, as MSR owner, are required to advance to, or on behalf of, investors if we do not receive such amounts from borrowers. These amounts include principal and interest payments, property taxes and insurance premiums and amounts to maintain, repair and market real estate properties on behalf of our servicing clients. Most of our advances have the highest reimbursement priority, entitling us to repayment of the advances from the loan or property liquidation proceeds before most other claims on these proceeds. Advances are contractually
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non-interest bearing. The costs incurred by servicers in meeting advancing obligations consist principally of the interest expense incurred in financing the advance receivables and the costs of arranging such financing. Under subservicing agreements, Onity is promptly reimbursed by the owners of the MSRs who generally finance the advances and incur the associated financing cost.
Reducing delinquencies is important to our business because it enables us to recover advances and recognize additional ancillary income, such as late fees, which we do not recognize on delinquent loans until they are brought current. Performing loans also require less work and thus are generally less costly to service. While increasing borrower participation in loan modification programs is a critical component of our ability to reduce delinquencies, borrower compliance with those modifications is also an important factor.
Our servicing and subservicing portfolios naturally decrease over time as homeowners make regularly scheduled mortgage payments, prepay loans prior to maturity, refinance with a mortgage loan not serviced by us or involuntarily liquidate through foreclosure or other liquidation process. In addition, existing clients may determine to terminate their servicing and subservicing arrangements with us and transfer the servicing to others. Therefore, our ability to maintain or grow our servicing revenue or the size of our servicing and subservicing portfolios depends on our ability to acquire the right to service or subservice additional mortgage loans at a rate that exceeds portfolio runoff and any client terminations. Our Originations segment is focused on profitably replenishing and growing our servicing and subservicing portfolios.
Originations
The primary source of revenue in our Originations segment is gain on loan sales. We originate and purchase residential mortgage loans that we promptly sell or securitize on a servicing retained basis, thereby generating mortgage servicing rights. Our mortgage loans are conventional (conforming to the underwriting standards of the GSEs) and government-insured loans (insured by the FHA or VA) (collectively Agency loans). We generally package and sell promptly the loans in the secondary mortgage market, through GSE and Ginnie Mae guaranteed securitizations and whole loan transactions. We originate forward mortgage loans directly with customers (consumer direct channel) as well as through correspondent lending arrangements. We originate reverse mortgage loans in three channels, through our correspondent lending arrangements, broker relationships (wholesale) and retail channels. Per-loan gain on sale margins vary by channel, with correspondent typically being the lowest margin and retail the highest, commensurate with fulfillment costs. Further, margins are generally higher for reverse mortgages than forward mortgages.
In addition to our originated MSRs, we acquire MSRs through multiple channels, including flow purchase agreements, the Agency Cash Window co-issue programs and bulk MSR purchases. Our Originations business also includes the sourcing and acquisition of new subservicing clients.
In 2025, our Originations business generated total volume additions of $84.8 billion in UPB (refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview for further details).
Retail Lending / Consumer Direct. We originate forward and reverse mortgage loans directly with borrowers through our retail lending business. Our forward lending business benefits from our servicing portfolio by offering rate and term refinance options to qualified borrowers seeking to lower their mortgage payments and cash-out refinance options. Depending on borrower eligibility, we refinance eligible customers into conforming or government-insured products. We are focused on increasing recapture rates on our existing servicing portfolio to grow this business. We also originate retail reverse loans to non-Onity servicing customers.
Correspondent Lending. Our correspondent lending operation purchases forward and reverse mortgage loans that have been originated by a network of approved third-party lenders, under our lending and risk management programs. We employ an ongoing monitoring and renewal process for participating lenders that includes an evaluation of the performance of the loans they have sold to us. We perform pre- and post-funding review procedures to ensure that the loans we purchase conform to our requirements and to the requirements of the investors to whom we sell loans. We are focused on expanding our network of correspondent lenders and increased participation of our existing relationships.
Wholesale Lending. We originate reverse mortgage loans through a network of approved brokers. Brokers are subject to a formal approval and monitoring process. We underwrite all loans originated through this channel consistent with the underwriting standards required by the ultimate investor prior to funding.
MSR Purchases. We purchase MSRs through flow purchase agreements, the Agency Cash Window co-issue programs and bulk MSR purchases. The Agency Cash Window programs we participate in, and purchase MSRs from, allow mortgage companies and financial institutions to sell whole loans to the respective Agency and sell the MSR to the winning bidder servicing released. In addition, we partner with other originators to replenish our MSR through flow purchase agreements.
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New Servicing and Subservicing Acquisitions. Our enterprise sales department strives to expand our network of servicing and subservicing clients and source new flow and co-issue or subservicing agreements. We compete as a low cost provider with our demonstrated expertise to service mortgage assets across borrowers of every credit level and our recapture capabilities.
REGULATION
Our business is subject to extensive regulation and supervision by federal, state, local and foreign governmental authorities, including the CFPB, the HUD, the SEC and various state agencies that license our servicing and lending activities. Accordingly, we are regularly subject to examinations, inquiries and requests, including civil investigative demands and subpoenas. The GSEs, Ginnie Mae, the United States Treasury Department, various investors, non-Agency securitization trustees and others also subject us to periodic reviews and audits. See