New Residential Net Income Doubled in 4Q

New Residential Investment Corp. had net income of $225 million in the fourth quarter, more than double the $103 million reported for the same period in 2015.

The New York-based real estate investment trust was an active purchaser of mortgage servicing rights in the fourth quarter of 2016, acquiring or agreeing to add $154 billion for a purchase price of $1.1 billion. This included acquiring $72 billion in Fannie Mae and Freddie Mac MSRs from PHH Corp. for a total of $912 million (including $300 million for the right to recoup servicing advances made by PHH); PHH will subservice the portfolio for New Residential.

New Residential also bought $36 billion of MSRs from Walter Investment Management Corp. for $231 million and it will add the MSRs from newly originated loans going forward.

In January, New Residential agreed to purchase $97 billion of agency MSRs from CitiMortgage for $950 million.

During the quarter, New Residential refinanced $1.4 billion of floating rate debt into three issuances of fixed-rate debt: $500 million of three-year and $400 million of five-year fixed-rate notes issued in October, and $500 million of three-year fixed-rate notes issued in November.

In December, it refinanced $800 million of fixed-rate notes with a weighted average maturity of 1.3 years into $400 million of debt due in four years and $400 million of debt due in five years. The new debt has a weighted average cost of funds of 3.48% per year, a reduction of 11 basis points from the old notes.