Finance

But private-label securitization issuance this year is expected to be lower than 2021's activity.

CEO Michael Nierenberg hinted at an upcoming partnership, as the rebranded New Residential reported a quarterly loss from residential mortgages plus management internalization costs.

This pool was part of the government-sponsored enterprise's RPL3-2022 transaction but unlike the other two portions, it was not awarded in the initial announcement two weeks ago.

Fed Chairman Jerome Powell brushed off concerns that rapidly tightening monetary policy could disrupt the financial system. Some economists and policy experts beg to differ, raising concerns about loan defaults or even the collapse of a key institution or counterparty.

Net interest income was the driver, as increases from investments more than offset a decline related to its guaranty book of business.

The decline was driven by a $307M provision to cover potential credit losses, primarily from its single-family business.

The company says it’s making progress on other parts of its business-model revamp — including a shift to lower-cost deposit sources — while regulators weigh its application to buy Flagstar Bancorp in Troy, Michigan.

Pretax operating results were down by $79 million from the previous quarter, but the company estimates that by the end of the year, servicing income should be more than four times higher than the second quarter’s results.

The Seattle-based bank underestimated single-family loan declines in the larger market but was able to improve margins slightly with cost-cutting and by diversifying with a shift toward apartment lending.

The mortgage investor reported core earnings per share slightly below estimates and a loss in comprehensive income but may ultimately outperform competitors, analysts said.