Onity Group Inc. reported its financial results for the first quarter of 2026, revealing a total revenue of $294.3 million, a 1% increase from $290.0 million in the previous quarter and an 18% rise from $249.8 million in the same period last year. The company's net income attributable to common stockholders was $6.6 million, or $0.78 per share, down from $21.1 million, or $2.68 per share, in the first quarter of 2025. The decline in profitability was attributed to a significant increase in operating expenses and a higher loss on mortgage servicing rights (MSR) valuation adjustments, which totaled $69.0 million for the quarter, compared to a loss of $38.9 million a year earlier.
The company's servicing and subservicing fees reached $222.4 million, reflecting a slight decrease from $225.1 million in the previous quarter but a 9% increase from $203.3 million in the first quarter of 2025. The increase in revenue was driven by a higher average servicing unpaid principal balance (UPB), which rose to $334.0 billion, up 3.6% from the previous quarter and 9.7% year-over-year. However, the company faced challenges with a $2.7 million loss on loans held for sale, primarily due to unfavorable fair value changes related to reverse mortgage buyouts.
Onity's operational metrics showed a total of approximately 4,200 employees as of March 31, 2026, with a significant portion based in India and the Philippines, supporting its loan servicing and origination businesses. The company serviced 1.4 million loans with a total UPB of $338.4 billion, serving over 3,900 investors and 113 subservicing clients. The company also reported a notable increase in its mortgage servicing rights, which rose to $3.0 billion, up from $2.8 billion at the end of 2025.
Strategically, Onity is undergoing a transition following the termination of its subservicing agreements with Rithm Capital Corp., which accounted for a significant portion of its servicing portfolio. The company is expected to downsize certain aspects of its servicing business as it transfers $1.2 billion in UPB to Rithm's platform. Additionally, Onity has amended its agreement with Finance of America Reverse LLC to sell a reverse mortgage servicing portfolio valued at approximately $5.1 billion, with the transaction expected to close in the third quarter of 2026, pending regulatory approval.
Looking ahead, Onity anticipates continued growth in its servicing and subservicing portfolio through various channels, including MSR bulk acquisitions and subservicing additions. However, the company expects a reduction in fee revenue due to the impact of the Rithm agreement termination. The outlook remains cautious, with potential challenges from interest rate fluctuations and market conditions affecting origination volumes and margins.
About ONITY GROUP INC.
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