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Newrys is laying off about 500 workers following its acquisition of Rhythm.

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Mortgage lending and servicing giant Nevars LLC is laying off about 500 workers in Colorado and Florida as its parent company, Rithm Capital Corp., tries to diversify amid tough times for lenders. is continuing.

Newries and Rhythm – a global asset manager focused on real estate, credit and financial services – declined to comment on the pending layoffs of Newries’ 420 employees in Colorado and 53 workers in Florida.

But the first round of holidays was revealed on May 2 – the day after Rhythm closed its $720 million acquisition. Specialized Loan Servicing (SLS) LLC and its parent company, Computershare Mortgage Services Inc.

SLS is a loan servicer that specializes in collecting monthly mortgage payments from distressed borrowers, providing workouts to some homeowners who can’t make their payments and foreclosing on others. Some Newrys employees work as workers at ComputerShare Mortgage Services and SLS, which now does business Shell point.

Rithm previously closed another big deal in November — a $720 million acquisition Sculptor Capital Management Inc.A hedge fund that invests in debt, real estate and “multi-strategy platforms” with $32 billion in assets under management.

Based in Fort Washington, Pennsylvania, Newrys sponsored 733 mortgage loan originators operating in 90 branches, down from 983 lenders in 155 locations in October. NMLS Records. Newrys also partners with real estate brokerages in a number of mortgage joint ventures through its Newrys Ventures platform, formerly known as Shelter Mortgage Company.

Michael Nirenberg

Although Newries is not commenting on the layoffs, Michael Nirenberg, president, chairman and CEO of Rhythm, outlined the thinking behind the SLS acquisition on an earnings call shortly after the deal. announced On October 2

“Really what it is, is a servicing deal; very little on the origination side,” Nirenberg said on the Oct. 27 earnings call.

Rithm acquired $149 billion in mortgage servicing business through the SLS deal, most of which ($104 billion) consisted of loans that SLS was servicing as a third party. As of March 31, Rithm’s mortgage servicing portfolio totaled $857 billion, including $225 billion in loans that Rithm services as a third party to other lenders.

That puts Rithm in the same league as loan servicing company Mr. Cooper, which has grown its loan servicing portfolio from $650 billion in 2021 to more than $1 trillion this year.

But Nirenberg said the SLS acquisition is “not about so-called scale” but about increasing Rithm’s third-party servicing fees. These fees, as well as the opportunity to offer refinancing to homeowners served by Newrys, will help boost earnings at a time when high mortgage rates make it more difficult to originate new loans.

“Regarding the mortgage company, we remain vigilant on cost-cutting initiatives, particularly in the early segments,” Nirenberg said in October. “We expect the real business to remain under extreme pressure with mortgage rates at 8 percent.”

Mortgage rates have fallen slightly from their October 2023 peaks. But on May 2 – the day after that SLS acquisition closed — Newrys notified state labor departments. Colorado And Florida Among its plans to lay off 156 workers — 103 in Colorado, and 53 in Florida — starting July 1.

On June 3, Nevarez filed another Worker Adjustment and Retraining Notification (Warren) Act notice with Colorado officials, informing them of his plans to quit. 317 employees from the company’s Greenwood Village facility beginning August 2.

Among the positions Newry’s is cutting in Colorado are asset managers, bankruptcy trustees and support associates, exercise specialists, default support associates, loss mitigation supervisors and valuation analysts – they Roles that overlap with staff at SLS.

In October, Nirenberg said that acquiring SLS “increases our capability in the specialty servicing space. So as we go forward, and you think about the global macro picture — if the economy slows down in the U.S., and more specialized servicing is needed, there is no one better to work with for homeowners and customers than Newry’s.”

[In 2020 SLS agreed to provide $1.275 million in relief to consumers and pay a $250,000 civil monetary penalty to settle allegations by the Consumer Financial Protection Bureau that it improperly foreclosed on some borrowers, without admitting or denying the allegations].

The last major acquisition also resulted in layoffs.

While Rithm’s $1.44 billion acquisition drive has laid off about 500 workers, the company faces even more dramatic growing pains in 2022, as rising mortgage rates curb mortgage lending.

Before changing its name to Rhythm Capital in 2022, New Residential Investment Corp. (as the company was then known) acquired Caliber Home Loans and Genesis Capital in 2021.

A $1.675 billion caliber home loan deal — part of the company’s strategy to expand its origination, servicing and asset management capabilities — included $141 billion in mortgage servicing rights. Most of Caliber’s loan originators were let go after the deal closed.

Rithm cut more than 6,500 workers from its payrolls in 2022 to cut costs, primarily in its mortgage origination segment. After starting 2022 with 12,296 people on the payroll, Rithm cut its workforce by 53 percent, ending the year with 5,723 workers.

Caliber’s operations were fully integrated into Newry’s in the fourth quarter of 2023, with several former executives ending up at Ohio-based Union Home Mortgage.

By December 31, 2023, Ritam reported. It had a total of 6,570 employees on its payroll, of which 5,656 worked in mortgage origination and servicing.

Rithm is also in the single-family rental business through its subsidiary, Adoor LLC.

“Adoor is well positioned to take advantage of the current market environment, acquiring SFR properties at high cap rates through its acquisition channels and its property vertical,” Rithm said in a statement on April 30. Integrating Management Functions”. Investor Presentation.

Last fall, Rhythm announced Darwin Homes Inc., a subsidiary of Pagaya Technologies. Strategic partnership with Adoor Property Management LLC, a new property management platform with

Led by former Caliber CEO Sanjeev Das, Pagaya Acquired by Darwin Holmes. An all-stock transaction valued at $18 million in January 2023 plus $12 million in cash and equity awards to Darwin employees.

A week after the Darwin Homes deal was announced, Pagaia said it was laying off 20 percent of its workforce. Year over With 712 workers on the payroll – including 142 full-time Darwin employees.

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