Rithm Capital Ends $33 Billion Subservicing Deal with Onity
Rithm Capital announced it will terminate its subservicing agreement with PHH Mortgage, a subsidiary of Onity Group, by January 2026. The agreement concerns a portfolio of primarily pre-2008 loans valued at $33 billion and has been in place for nearly ten years.
Details of the Agreement Termination
On October 31, Rithm informed Onity of its decision not to renew the subservicing contract. The majority of the portfolio transfer is scheduled for the first half of 2026, although $8.5 billion in unpaid principal balance (UPB) requires approval from trustees and other stakeholders, which may delay the process.
Impact on Onity's Servicing Portfolio
As of the end of the third quarter of 2025, Onity’s total servicing portfolio stood at $311.5 billion in UPB. The Rithm portfolio accounts for roughly 10% of this total. Despite this, Onity expects no significant financial impact from the contract termination.
“The Rithm subservicing is a shrinking portfolio of mainly low-balance, pre-2008 subprime loans and accounts for over half our delinquent loans and borrower litigation,” said Glen Messina, Onity’s chair, president, and CEO. “For 2025, the Rithm subservicing was less than 5% of our total adjusted revenues, and one of our least profitable portfolios before corporate allocations.”
Summary
Rithm’s ending of the subservicing arrangement with Onity reflects a strategic shift away from a shrinking portfolio of older, low-balance loans with limited impact on Onity’s overall financials.
Author's summary: Rithm Capital will end its nearly decade-long subservicing deal with Onity’s PHH Mortgage for a $33 billion pre-2008 loan portfolio by early 2026, representing a minor financial impact on Onity.