Onity Group Inc. Reports $12.9 Million Net Loss in Q2 2026

Onity Group Inc. reported a net loss of $12.9 million, or $1.53 per share, for the second quarter of 2026, a significant decline from a net income of $20.5 million, or $2.55 per share, in the same quarter of the previous year. The company's total revenue for the quarter was $282.9 million, a decrease of 4% from $294.3 million in the first quarter of 2026, but an increase of 16% compared to $246.6 million in the second quarter of 2025. The decline in revenue was primarily attributed to a decrease in gains on reverse loans and HMBS-related borrowings, which fell to $3.8 million from $18.7 million in the previous quarter, reflecting less favorable yield spread tightening and unfavorable assumption updates.

In terms of operational metrics, Onity serviced approximately 1.3 million loans with a total unpaid principal balance (UPB) of $341.4 billion as of June 30, 2026. This represents a slight increase from $338.4 billion in the previous quarter. The company also reported a 3% increase in servicing and subservicing fees, totaling $229.3 million, driven by higher float earnings and a 4% increase in average servicing UPB. However, the company experienced a significant decrease in its reverse mortgage portfolio, with reverse loans held for investment dropping to $3.6 billion from $9.8 billion due to the sale of a portion of its reverse mortgage servicing rights to Finance of America Reverse LLC (FAR).

Onity's strategic developments included the completion of a significant transaction with FAR, which involved the sale of approximately 20,000 Ginnie Mae Home Equity Conversion Mortgage (HECM) loans and associated HMBS-related borrowings. This transaction, which closed on June 30, 2026, is expected to impact the company's reverse mortgage origination capabilities for the next five years, as Onity will no longer originate reverse mortgages except for recapturing existing HECM borrowers. The company also repurchased $12 million worth of its common stock during the quarter, as part of a broader share repurchase program.

The company's financial position showed total assets of $12.4 billion as of June 30, 2026, down from $16.2 billion at the end of 2025, primarily due to the decline in reverse loans. Total liabilities also decreased to $11.7 billion from $15.5 billion, largely driven by a reduction in HMBS-related borrowings. Onity's stockholders' equity stood at $610 million, reflecting a slight decrease from $628 million at the end of the previous year. The company maintained a total liquidity of $230 million, including $196.6 million in cash and cash equivalents.

Looking ahead, Onity anticipates continued growth in its servicing and subservicing portfolio through its multi-channel origination platform and strategic acquisitions. However, the company expects a reduction in fee revenue due to the termination of its subservicing agreements with Rithm, which accounted for a notable portion of its servicing volume. The outlook remains cautious, with potential impacts from interest rate fluctuations and market conditions influencing future performance.