Rithm Capital Corp. (RITM) Business

ITEM 1. BUSINESS

Company Overview

Rithm Capital is a global asset manager focused on real estate, credit and financial services. We are a Delaware corporation formed in September 2011, commencing operations in December 2011 and becoming a publicly traded company on May 15, 2013. We have operated as a REIT for U.S. federal income tax purposes since inception and, since June 17, 2022, have been structured as an internally managed REIT.

We seek to generate long-term value for our stockholders by leveraging our investment expertise and operating capabilities to identify, acquire, manage and enhance the value of real estate-related and other financial assets. Our platform integrates operating companies, investment portfolios and asset management capabilities across the residential mortgage, real estate and credit markets. Headquartered in New York City, Rithm Capital has a global presence with offices in London, Hong Kong, Tokyo, Toronto and Abu Dhabi.

Our investments in residential real estate-related assets include equity interests in operating companies and investments across the residential mortgage and real estate lifecycle. These include origination and servicing platforms operated through our wholly owned subsidiaries, Newrez and Genesis, as well as investments in SFR properties. We also own businesses providing title, appraisal and property preservation and maintenance services.

Our Asset Management business primarily conducts its asset management activities through Rithm Asset Management LLC (“RAM”). RAM operates its asset management activities through its wholly owned subsidiaries, including Sculptor Capital Management, Inc. (“Sculptor”), Crestline and Rithm Capital Advisors LLC (“RCA”), which serves as an investment adviser to a range of investment vehicles and managed accounts and generates primarily fee-based revenues. Additionally, RCM GA Manager LLC (“RCM Manager” and, together with RCA, the “Rithm Advisers”) manages Rithm Property Trust and R-HOME pursuant to applicable management and/or advisory agreements. In addition, following the Paramount Acquisition (as defined below), we own and operate a portfolio of Class A office properties in New York City and San Francisco, which are managed as part of our broader real estate platform.

We conduct our business through the following segments: Origination and Servicing, Residential Transitional Lending, Asset Management and Investment Portfolio.

Recent Acquisitions

On December 1, 2025, we completed the acquisition of Crestline for a purchase price of approximately $324.7 million (the “Crestline Acquisition”), expanding our asset management capabilities across private credit, fund liquidity and insurance strategies. Refer to Note 3 of the consolidated financial statements for further information.

On December 19, 2025, we completed the acquisition of Paramount for a purchase price of approximately $1.8 billion (the “Paramount Acquisition”), expanding our commercial real estate platform through the addition of Class A office assets and owner-operator capabilities. Refer to Note 3 of the consolidated financial statements for further information.

For more details on our portfolio, see “—Our Portfolio” below, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Our Portfolio.” For information concerning current market trends impacting our portfolio, see “—Residential Real Estate Market,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Considerations” and “—Quantitative and Qualitative Disclosures About Market Risk.”

Markets in which We Operate

Mortgage Originations and Servicing

The U.S. residential mortgage origination and servicing market is complex and highly regulated and includes both bank and non-bank participants. Over time, the structure of the market has evolved as originators have increasingly relied on the capital markets, as well as the GSEs and government agencies to finance and distribute mortgage credit. Additionally, non-bank originators and servicers have grown their share of overall origination and servicing activity.

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Historically, a borrower seeking credit for a home purchase would typically have obtained financing from a financial institution, such as a bank, savings association or credit union. These institutions would generally have held a majority of their originated residential mortgage loans as interest-earning assets on their balance sheets and would have performed all activities associated with servicing the loans, including accepting principal and interest payments, making advances for real estate taxes and homeowners’ insurance premiums, initiating collection actions for delinquent payments and conducting foreclosures. Today, institutions (including non-bank originators) that originate residential mortgage loans generally hold a smaller portion of originated loans as assets on their balance sheets and instead sell originated loans to third parties.

The GSEs are currently among the largest purchasers of residential mortgage loans. Under a process known as securitization, GSEs and institutions typically package residential mortgage loans into pools that are sold to securitization trusts. These securitization trusts fund the acquisition of residential mortgage loans by issuing securities, known as RMBS, which entitle the owner of such securities to receive a portion of the interest and/or principal collected on the residential mortgage loans in the pool. Purchasers of RMBS typically include large institutions, such as pension funds, mutual funds, insurance companies, hedge funds and REITs. The agreement that governs the pooling of residential mortgage loans, the servicing of such residential mortgage loans and the terms of the RMBS issued by the securitization trust is often referred to as a pooling and servicing agreement. As the securitization market has matured, non-bank originators have gained significant market share in the residential mortgage market. As of December 31, 2025, Newrez ranks in the top five of both lenders (based on the total funded volume of originations) and servicers (based on the total unpaid principal balance (“UPB”) serviced) in the U.S., each according to Inside Mortgage Finance.

In connection with a securitization, a number of entities perform specific roles with respect to the residential mortgage loans in a pool, including the trustee and the mortgage servicer. The trustee holds legal title to the residential mortgage loans on behalf of the owner of the RMBS and either maintains the mortgage note and related documents itself or with a custodian. One or more other entities are appointed pursuant to the pooling and servicing agreement to service the residential mortgage loans. In some cases, the servicer is the same institution that originated the loan, and, in other cases, it may be a different institution. The duties of servicers of residential mortgage loans that have been securitized are generally required to be performed in accordance with industry-accepted servicing practices and the terms of the relevant pooling and servicing agreement, mortgage note and applicable law. The trustee or a separate securities administrator for the trust receives the payments collected by the servicer on the residential mortgage loans and distributes payments pursuant to the terms of the pooling and servicing agreement.

The residential mortgage loan market is commonly divided into a number of categories based on certain residential mortgage loan characteristics, including the credit quality of borrowers and the types of institutions that originate or finance such loans. While there are no universally accepted definitions, market participants commonly describe the following categories:

•Government-Sponsored Enterprise and Government Guaranteed Loans. This category includes “conforming loans,” which are first lien residential mortgage loans secured by single-family residences that meet the underwriting guidelines established by the GSEs. The principal underwriting guideline is the conforming loan limit, which is established by statute and currently is $832,750 for 2026 (an increase from $806,500 in 2025), with certain exceptions for high-priced real estate markets. This category also includes residential mortgage loans that do not meet conforming loan standards but are insured or guaranteed by the government through the Government National Mortgage Association (“Ginnie Mae” and Ginnie Mae, collectively with the GSEs, the “Agencies” and each of Fannie Mae, Freddie Mac and Ginnie Mae, an “Agency”), primarily through federal programs operated by the Federal Housing Administration (“FHA”), the United States Department of Agriculture (“USDA”) and the Department of Veterans Affairs (the “VA”).

•Non-GSE or Non-Government Guaranteed Loans. Residential mortgage loans that are not guaranteed by the GSEs or the government are generally referred to as “non-conforming loans” and may include jumbo, subprime, Alt-A, second lien or non-qualifying loans. Loans may be non-conforming due to various factors, including mortgage balances in excess of Agency underwriting guidelines, borrower characteristics, loan characteristics and level of documentation. The non-GSE category also includes “investor loans,” which reflect primarily non-owner occupied investment properties.

Residential mortgage loans are further classified based on certain payment characteristics. Performing loans are residential mortgage loans where the borrower is generally current on required payments. By contrast, non-performing loans are residential mortgage loans where the borrower is delinquent or in default. Re-performing loans were previously non-performing but became performing again, often as a result of a loan modification. Reverse residential mortgage loans are a special type of loan under which the borrower is typically paid a monthly amount, increasing the balance of the loan, and balances are then typically collected when the property is sold or the borrower no longer resides at the property. If a borrower defaults on a loan and the

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lender takes ownership of the underlying property through foreclosure, that property is referred to as real estate owned (“REO”).

Origination volumes are influenced by macroeconomic conditions, including interest rates, housing prices, employment rates and affordability. Housing supply and demand imbalances continued in 2025, including constraints in housing supply and reduced mobility among existing borrowers with low-rate mortgages. Mortgage rates ranged between approximately 6% and 7% throughout 2025, and affordability pressures were also affected by higher insurance and other homeownership costs. As of January 2026, the Mortgage Bankers Association estimated total U.S. origination volume for 2025 was $2.0 trillion, compared to $1.7 trillion in 2024, and forecasts total mortgage origination volume of $2.2 trillion for 2026.

Mortgage originators generally generate revenue from the sale of originated loans to the GSEs, Ginnie Mae or other purchasers and from related origination fees. Market conditions, including interest rate levels and volatility, can affect gain-on-sale margins and origination economics.

Servicers generally derive income from contractual servicing fees and ancillary revenue (such as late fees and modification incentives). These cash flows often arise from MSRs, which represent the right to service mortgage loans on behalf of the loan owner and to receive the associated servicing income. Servicing income is affected by the size of the servicing portfolio (both UPB and number of loans), delinquency rates, borrower behavior (including prepayments) and the cost to service per loan. Servicing arrangements may also include advance obligations and other requirements under applicable servicing contracts.

MSR economics and valuations are affected by prepayment speeds (including refinancing and turnover), interest rate levels and volatility, delinquency and loss mitigation activity, servicing costs, and ancillary servicing revenues. In periods when refinancing activity is muted, prepayment speeds may decline, which can extend expected cash flows from MSRs, while changes in interest rates can affect float income and other servicing-related economics.

Residential Transitional Lending

Residential transition lending refers to business-purpose financing typically provided to residential real estate investors, developers and other sponsors for transitional use cases, such as bridge financing, renovations (including “fix-and-flip”), new construction and certain build-to-rent (“BTR”) strategies. The residential transitional lending industry is competitive and includes regional banks, private lending institutions and other specialized financial services providers. Competition can affect pricing, underwriting terms and the availability of capital, and participants may have differing risk tolerances, funding sources and return thresholds.

The performance and origination volumes of residential transition loans (“RTLs”) are influenced by residential real estate fundamentals (including home price trends and inventory levels), the cost and availability of financing, construction and labor costs, and the ability of borrowers to execute business plans and refinance or sell financed properties.

Asset Management

The asset management industry is highly competitive. Alternative and traditional asset managers compete for investor capital, distribution relationships and investment opportunities, and competition may affect the ability to raise and retain assets under management (“AUM”), deploy capital on attractive terms and attract and retain investment professionals. Many competitors have greater resources, longer track records in certain strategies, broader product offerings and larger distribution platforms, which may enhance their ability to raise capital and source investments.

Asset management revenues are typically derived from management fees and performance-based fees or incentive income. Management fees are commonly calculated as a percentage of AUM, invested capital or committed capital, depending on the structure and governing documents of the applicable investment vehicle, and are generally earned periodically. Incentive income is generally performance-based and may be subject to hurdle rates, high-water marks, catch-up provisions or other contractual arrangements. Fee rates and fund terms may be impacted by competitive dynamics and investor preferences.

AUM represents assets for which we provide investment management, advisory or other investment-related services. Depending on the applicable strategies and vehicles, AUM may include net asset value for open-ended funds, gross asset value for certain real estate funds, uncalled capital commitments and the par value of collateralized loan obligations (“CLOs” or each, a “CLO”), as applicable. AUM may include amounts that do not generate management fees or incentive income, and an asset manager’s definition of AUM may differ from that of other asset managers and may not be comparable to similarly titled measures used by others.

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Asset management results are affected by investment performance, investor capital inflows and redemptions, market conditions, asset valuations, competition, regulatory requirements and the ability to attract and retain investment professionals. Poor investment performance, sustained redemptions or adverse market conditions could reduce AUM and materially adversely affect management fees, incentive income and overall profitability.

Investment Portfolio

The markets relevant to our investment portfolio include residential mortgage loans, RMBS (including non-Agency securities), Excess MSRs, servicer advance investments, SFR properties, commercial real estate, CLOs and consumer loans, among other credit and real estate-related exposures. Market conditions affecting these assets include, but are not limited to, macroeconomic conditions, interest rates, housing fundamentals, borrower credit performance, CLO credit quality, capital markets liquidity, levels of commercial real estate supply, commercial real estate leasing volumes, and regulatory and policy developments affecting housing finance and/or commercial real estate finance.

Housing market dynamics have continued to reflect constrained supply and regional variation in inventory and price trends. Higher mortgage rates and elevated insurance and other homeownership costs have contributed to affordability pressures, while “locked-in” low-rate mortgages have affected turnover and refinancing activity.

Residential Mortgage Loans

Residential mortgage loan market dynamics are influenced by home price trends, borrower credit performance, interest rates and capital markets conditions, as well as the availability and cost of financing for whole loans. The composition of the market and ownership of mortgage credit may also shift over time as investors and institutions adjust risk appetite and portfolio allocations.

Non-Agency Securities

Non-Agency RMBS and other private-label securitization (“PLS”) markets are influenced by credit spreads, investor demand for spread products, collateral performance and issuance volume. Market activity is also affected by the availability of collateral types and the evolution of consumer and real estate loan products that may be securitized.

SFR Properties

SFR and BTR markets are influenced by housing supply constraints, affordability, demographic trends, rental demand and operating costs, including taxes, insurance, maintenance and property management expenses. Additionally, SFR and BTR markets may be influenced by potential regulatory action or negative public perceptions of such industries. These factors can affect occupancy, rental rate growth and asset valuations.

Consumer Loans

Consumer loan performance is influenced by employment, wage growth, inflation, household balance sheets and the cost of living. Delinquencies and loss rates may also be affected by the resumption or expiration of government programs, changes in underwriting standards and borrower payment behavior.

Excess MSRs

Excess MSRs represent the right to receive the portion of mortgage servicing cash flows that exceed a specified base servicing fee, with the base servicing fee typically retained by the primary servicer in exchange for performing servicing activities. The market for Excess MSRs is influenced by interest rate levels and volatility, mortgage origination and prepayment activity, housing market conditions and borrower behavior. Excess MSRs valuations and cash flows may also be affected by changes in servicing costs, advances, and regulatory or investor requirements applicable to mortgage servicing.

Servicer Advance Investments

Servicer advance investments represent the right to reimbursement of funds advanced by a mortgage servicer to cover delinquent borrower payments and certain property-related expenses. Performance is influenced by delinquency and default trends, foreclosure timelines, home price performance and housing market conditions. Cash flows and valuations may also be affected by the timing of recoveries, servicing practices and regulatory or investor requirements.

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Commercial Real Estate

Commercial real estate performance is influenced by economic conditions, interest rate levels, availability and cost of financing, and conditions in the property and capital markets. Performance may also be affected by tenant demand, occupancy levels, rental rates, property operating costs, and changes in regulatory, tax, or zoning requirements.

CLOs

CLO performance is influenced by corporate credit conditions, interest rate levels and volatility, and conditions in the leveraged loan and capital markets. CLO cash flows and valuations may also be affected by borrower credit performance, default and recovery rates, reinvestment activity, and changes in market liquidity or investor demand.

Our Strategy

Rithm Capital’s strategy is to operate as a diversified investment and asset management platform focused on real estate, credit and financial services. We seek to allocate capital across a range of investment strategies and operating businesses based on relative value, risk-adjusted return opportunities and market conditions, while integrating operating capabilities with investment management to enhance execution and asset-level performance.

Our strategy emphasizes disciplined capital allocation, diversification of earnings across fee-based and balance sheet-oriented activities, and the development and management of scalable operating platforms. We seek to generate stable cash flows through contractual or recurring revenue streams, including servicing fees and asset management fees, while maintaining flexibility to deploy capital opportunistically across our investment portfolio.

In executing our strategy, we may from time to time pursue acquisitions, dispositions, financing transactions or other strategic initiatives, which may include equity or debt offerings by us or one or more of our subsidiaries, business combinations, spin-off transactions or other similar transactions. We may also modify or change our strategy in response to market conditions, regulatory developments or other factors. There can be no assurance that we will be successful in executing our strategy or that any strategic initiatives will achieve their intended objectives. See “Risk Factors—Risks Related to Our Business—We may not be able to successfully execute our business strategy, which could adversely affect our business, financial condition, cash flows and/or results of operations.”

Our Portfolio

Our portfolio is organized across four operating segments: Origination and Servicing, Residential Transitional Lending, Asset Management and Investment Portfolio. These segments reflect how we deploy capital, manage risk and generate earnings across our operating businesses, fee-based activities and balance sheet investments.

Origination and Servicing

The Origination and Servicing segment includes our residential mortgage origination and servicing platforms and related investments, including MSRs and servicer advance assets. These activities are conducted primarily through our wholly owned subsidiaries, Newrez and New Residential Mortgage LLC (“NRM”). As of December 31, 2025, Newrez ranked among the top five of both lenders (based on the total funded volume of originations) and servicers (based on the total UPB serviced) in the U.S., each according to Inside Mortgage Finance.

Our channels consist of:

•Direct to Consumer — Originates loans directly to borrowers, with a primary focus on existing servicing customers, including refinance, purchase and closed-end second offerings.

•Retail/JV — Originates loans through loan officers and joint venture relationships with referral sources, including realtors, homebuilders and mortgage bank partners, supporting primarily purchase activity.

•Wholesale — Originates loans through mortgage brokers and other third party originators; and we underwrite and fund these loans based on our credit, compliance and quality-control standards.

•Correspondent — Purchases closed residential mortgage loans from community banks, credit unions and independent mortgage banks that meet our underwriting and eligibility criteria and funds them in our name.

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We generally service all of the loans that we originate, which provides us connectivity to our borrowers throughout the lifecycle of their loans. Our servicing business operates through our performing and special servicing divisions. The performing loan servicing division services performing Agency and government-insured loans. Our special servicing division services delinquent government-insured, Agency and non-Agency loans on behalf of the owners of the underlying mortgage loans. The special servicing division also includes third-party serviced performing loans on behalf of unaffiliated investors. We are highly experienced in loan servicing, including loan modifications, and seek to help borrowers avoid foreclosure.

We generate revenue through servicing and sales of residential mortgage loans, including, but not limited to, gain on residential loans originated and sold and the value of MSRs retained on sold loans. Profit margins per loan vary by channel, with Correspondent typically being the lowest and Direct to Consumer being the highest. We sell conforming loans to the GSEs and Ginnie Mae and securitize non-qualified residential mortgage (“Non-QM”) loans. We utilize warehouse financing to fund loans at origination through the sale date.

Our servicing business includes owned MSRs primarily serviced by Newrez. As of December 31, 2025, approximately 91% of the underlying UPB of mortgage related to owned MSRs is serviced by Newrez.

Our servicing business also includes subservicing for third-party clients, including performing loan servicing, special servicing (high touch customer service, which requires more frequent customer outreach than performing loan servicing and involves higher staffing levels and sub-servicing fees to support such higher staffing levels) and recovery options for deeply delinquent loans. We generally earn tiered subservicing fees based on delinquency status and performance requirements, as well as ancillary income on each loan serviced. Because of our specialty in “high-touch servicing,” we believe we are favorably positioned to navigate through various economic and credit cycles.

We finance our investments in MSRs and MSR financing receivables (which represent financing arrangements collateralized by MSRs) with short- and medium-term bank and capital markets notes. An MSR provides a mortgage servicer with the right to service a pool of residential mortgage loans in exchange for a portion of the interest payments made on the underlying residential mortgage loans, plus ancillary income and custodial interest. An MSR is made up of two components: a base fee and an Excess MSR. The base fee is the amount of compensation for the performance of servicing duties (including advance obligations), and the Excess MSR is the amount that exceeds the base fee. These borrowings are either recourse or non-recourse debt and bear either fixed or variable interest rates, which are offered by the counterparty for the term of the notes for a specified margin over the Secured Overnight Financing Rate (“SOFR”). The capital markets notes are typically issued with a collateral coverage percentage, which is a quotient expressed as a percentage equal to the aggregate note amount divided by the market value of the underlying collateral. The market value of the underlying collateral is generally updated on a quarterly basis, and if the collateral coverage percentage becomes greater than or equal to a collateral trigger, generally 90%, we may be required to add funds, pay down principal on the notes or add additional collateral to bring the collateral coverage percentage below 90%. The difference between the collateral coverage percentage and the collateral trigger is referred to as a “margin holiday.”

Servicing agreements generally require a servicer to make advances in respect of serviced residential mortgage loans unless the servicer determines in good faith that the advance would not be ultimately recoverable from the proceeds of the related residential mortgage loan or the mortgaged property. Servicer advances typically fall into one of three categories:

•Principal and Interest Advances: Payments made by the servicer to cover scheduled payments of principal of, and interest on, a residential mortgage loan that have not been paid on a timely basis by the borrower.

•Escrow Advances (Taxes and Insurance Advances): Cash payments made by the servicer to third parties on behalf of the borrower for real estate taxes and insurance premiums on the property that have not been paid on a timely basis by the borrower.

•Foreclosure Advances: Payments made by the servicer to third parties for the costs and expenses incurred in connection with the foreclosure, property preservation and sale of the mortgaged property, including attorneys’ and other professional fees.

The purpose of the advances is to provide liquidity, rather than credit enhancement, to the underlying residential mortgage securitization transaction. Most servicer advances are considered “top of the waterfall” and are generally repaid from amounts received from the related residential mortgage loan pool, and to a lesser extent, payments from the borrower or amounts received from the liquidation of the property securing the loan, which is referred to as “loan-level recovery.”

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Loan prepayments made by the borrowers on the residential mortgage loans underlying the securitizations can only be used to fund principal and interest advances. The servicing agreements with Fannie Mae, Ginnie Mae and certain PLS generally have a “waterfall” payment structure that allows servicers to apply balances received from prepayments to cover principal and interest advance requirements. The ability to apply balances received against prepayments stems from a difference caused by the timing between the remittance of payments under the servicer’s advance and remittance obligations, generally several weeks after the due date, and servicer’s timeline to remit prepayments, which can be up to a month or more after receipt from the borrower. Because of this timing difference, servicers can effectively “borrow” against the prepayments received to cover principal and interest advance requirements. In many cases, if the servicer determines that an advance previously made would not be recoverable from these sources, or if such advance is not recovered when the loan is repaid or related property is liquidated, then the servicer is, most often, entitled to withdraw funds from the trustee custodial account for payments on the serviced residential mortgage loans to reimburse the applicable advance. This is what is often referred to as a “general collections backstop.” See “Risk Factors—Risks Related to Our Business—Risks Related to Origination and Servicing—Servicer advances may not be recoverable or may take longer to recover than we expect, which could cause us to fail to achieve our targeted return on our servicer advance investments or MSRs.”

We fund advances primarily from a combination of cash on hand, loan prepayments and secured financing arrangements. We finance our servicer advances with short- and medium-term collateralized borrowings. These borrowings are non-recourse committed facilities that are not subject to margin calls and bear either fixed or variable interest rates offered by the counterparty for the term of the notes, generally less than one year, of a specified margin over SOFR. See Note 17 to our consolidated financial statements for further information regarding financing of our servicer advances.

We invest in government-backed securities (Agency RMBS and U.S. Treasury securities), which are generally meant to act as a hedge to our MSR portfolio and provide additional qualifying assets and income for the purposes of meeting the REIT requirements. We finance investments in government-backed securities with short-term borrowings under master uncommitted repurchase agreements. These borrowings generally bear interest rates offered by the counterparty for the term of the proposed repurchase transaction (e.g., 30 days, 60 days, etc.) of a specified margin over SOFR. We expect to continue to finance our government-backed securities acquisitions with repurchase agreement financing. Other types of Agency RMBS and other related financial instruments in which we have invested or may invest are set forth below:

•Mortgage Pass-Through Certificates: Mortgage pass-through certificates are securities representing interests in “pools” of residential mortgage loans secured by residential real property where payments of both interest and principal, plus pre-paid principal, on the securities are made monthly to holders of the securities, in effect “passing through” monthly payments made by the individual borrowers on the residential mortgage loans that underlie the securities, net of fees paid in connection with the issuance of the securities and the servicing of the underlying residential mortgage loans.

•Interest Only Agency RMBS: This type of security only entitles the holder to interest payments. The yield to maturity of interest only Agency RMBS is extremely sensitive to the rate of principal payments (particularly prepayments) on the underlying pool of residential mortgage loans. If we decide to invest in these types of securities, we anticipate doing so primarily to take advantage of particularly attractive prepayment-related or structural opportunities in the Agency RMBS markets.

•To-Be-Announced Forward Contract Positions (“TBAs”): We utilize TBAs in order to invest in Agency RMBS. Pursuant to these TBAs, we agree to purchase or sell for future delivery, Agency RMBS with certain principal and interest terms and certain types of underlying collateral, but the particular Agency RMBS to be delivered would not be identified until shortly before the TBA settlement date. Our ability to purchase Agency RMBS through TBAs may be limited by the income and asset tests applicable to REITs.

•Specified RMBS: Specified RMBS are pools created with loans that have similar characteristics, such as loan balance, FICO, coupon and prepayment protection. We invest in these securities to take advantage of particularly attractive prepayment-related or structural opportunities in the Agency RMBS markets.

Our Origination and Servicing segment also includes the activity from several wholly owned subsidiaries or minority investments in companies that perform various services in the mortgage and real estate sectors. These subsidiaries and investments include: Guardian Asset Management (“Guardian”), which is a national provider of field services and property management services, eStreet Appraisal Management LLC (“eStreet”), which provides appraisal valuation services, and Avenue 365 Lender Services, LLC (“Avenue 365”), which provides title insurance and settlement services.

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Residential Transitional Lending

The Residential Transitional Lending segment consists primarily of short-term business purpose mortgage loans originated and managed through our wholly owned subsidiary Genesis. These loans are generally secured by residential real estate and are used to finance construction, renovation, bridge and related transitional use cases.

•Construction: Loans provided for ground-up construction, including mid-construction refinancing of ground-up construction and the acquisition of such properties.

•Renovation: Acquisition or refinance loans for properties requiring renovation, excluding ground-up construction.

•Bridge: Loans for initial purchase, refinance of completed projects or rental properties.

We currently finance construction, renovation and bridge loans using a warehouse credit facility and revolving securitization structures.

Properties securing our loans are typically secured by a mortgage or a first deed of trust lien on real estate. Depending on loan type, the size of each loan committed is based on a maximum loan value in accordance with our lending policy. For construction and renovation loans, we generally use loan-to-cost (“LTC”) or loan-to-after-repair-value (“LTARV”) ratio. For bridge loans, we use an loan-to-value (“LTV”) ratio. LTC and LTARV are measured by the total commitment amount of the loan at origination divided by the total estimated cost of a project or value of a property after renovations and improvements to a property. LTV is measured by the total commitment amount of the loan at origination divided by the “as-complete” appraisal.

At the time of origination, the difference between the initial outstanding principal and the total commitment is the amount held back for future release subject to property inspections, progress reports and other conditions in accordance with the loan documents. Loan ratios described above do not reflect interim activity such as construction draws or interest payments capitalized to loans, or partial repayments of the loan.

Each loan is typically backed by a corporate or personal guarantee to provide further credit support for the loan. The guarantee may be collaterally secured by a pledge of the guarantor’s interest in the borrower or other real estate or assets owned by the guarantor.

Loan commitments at origination are typically interest only, bear a variable interest rate tied to SOFR plus a spread ranging from approximately 4% to 17% and have initial terms typically ranging from 6 to 120 months in duration based on the size of the project and expected timeline for completion of construction, which may be extended based on our evaluation of the project.

We receive loan origination fees, or “points.” These origination fees factor in the term of the loan, the quality of the borrower and the underlying collateral. In addition, we charge fees on past due receivables and receive reimbursements from borrowers for costs associated with services provided by us, such as closing costs, collection costs on defaulted loans and inspection fees. We also earn loan extension fees when maturing loans are renewed or extended and amendment fees when loan terms are modified. Loans are generally only renewed or extended if the loan is not in default and satisfies our underwriting criteria, including our maximum LTV ratios of the appraised value as determined at the time of loan origination or extension or based on an updated appraisal, if required. Loan origination and renewal fees are deferred and recognized in income over the contractual maturity of the underlying loan.

Typical borrowers include real estate investors and developers. Loan proceeds are used to fund the construction, development, renovation (including fix and flip), rehabilitation investment, land acquisition and refinancing of residential properties, including multifamily properties, and to a lesser extent mixed-use properties. Our loans are generally structured with partial funding at closing and additional loan installments disbursed to the borrower upon satisfactory completion of previously agreed stages of construction.

Asset Management

The Asset Management segment mainly includes our fee-based investment management activities conducted primarily through RAM. RAM operates its asset management activities through its wholly owned subsidiaries, including Sculptor, Crestline and the Rithm Advisers. The Rithm Advisers serve as investment advisers to a range of investment vehicles and managed accounts and generates primarily fee-based revenues, including Rithm Property Trust and R-HOME. In addition, following the Paramount Acquisition, we own and operate a portfolio of Class A office properties in New York City and San Francisco, which are managed as part of our broader real estate platform.

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As of December 31, 2025, the Asset Management segment managed approximately $63 billion in AUM.

Through this segment, we provide investment management and advisory services across a range of alternative investment strategies, including private credit, opportunistic credit, fund liquidity solutions, real estate-related strategies and other alternative asset classes. These strategies are offered through a variety of investment vehicles and structures, including commingled funds, separate accounts, managed accounts, business development companies, insurance and other permanent or semi-permanent capital vehicles.

AUM represents the assets for which we provide investment management, advisory or certain other investment-related services. AUM generally includes (i) the net asset value of managed accounts, open-ended and closed-end funds or the gross asset value of real estate and real estate funds, as applicable, (ii) uncalled capital commitments and (iii) the par value of structured credit vehicles. AUM includes amounts that are not subject to management fees, incentive income or other amounts earned on AUM. Our calculation of AUM is intended to provide a consistent and comparable measure of managed assets across its businesses; however it is not based on any specific regulatory definition and may differ from similarly titled measures presented by other asset managers and, as a result, may not be comparable.

The Asset Management segment generates revenues primarily from management fees and incentive income. Management fees are generally calculated as a percentage of AUM or invested capital, depending on the structure and governing documents of the applicable investment vehicle, and are typically calculated and paid quarterly, either in advance or in arrears. Management fees, where applicable, are generally prorated for capital inflows and redemptions during the relevant period.

Incentive income is generally performance-based and is typically calculated as a percentage of investment profits attributable to fund investors, net of management fees. Incentive income arrangements may be subject to hurdle rates, catch-up provisions, high-water marks or other contractual terms, pursuant to which incentive income may only be earned after certain performance thresholds have been met or prior losses have been recovered.

The results of the Asset Management segment are affected by a number of factors, including investment performance, investor capital inflows and redemptions, market conditions, asset valuations, competition and regulatory requirements. Declines in investment performance or sustained net outflows of investor capital could reduce AUM and adversely affect management fees, incentive income and overall profitability.

Investment Portfolio

The Investment Portfolio segment primarily consists of balance sheet investments in residential mortgage loans, SFR properties, consumer loans, non-Agency securities, Excess MSRs, servicer advance investments, commercial real estate and CLOs. These investments are generally financed through a combination of secured borrowings, securitizations and other capital markets arrangements, depending on asset type and risk profile.

Additionally, except for our commercial real estate assets acquired in the Paramount Acquisition, our commercial real estate platform is part of our Investment Portfolio and includes direct lending activities and commercial real estate asset management conducted through our operator partner, GreenBarn Investment Group, which provides acquisition and development opportunities, asset and property management, leasing and construction support.

Residential Mortgage Loans

Rithm Capital accumulates its residential mortgage loan portfolio through originations, bulk acquisitions and the execution of call rights.

Loans are accounted for based on our strategy for the loan and on whether the loan was performing or non-performing at the date of acquisition. Acquired performing loans means that, at the time of acquisition, it is likely the borrower will continue making payments in accordance with the contractual loan terms. Purchased non-performing loans means that, at the time of acquisition, it is not likely that the borrower will make payments in accordance with contractual loan terms (i.e., credit-impaired). We consider the delinquency status, LTV ratios and geographic area of residential mortgage loans as our credit quality indicators.

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We finance a significant portion of our investments in residential mortgage loans with borrowings under repurchase agreements. These recourse borrowings generally bear variable interest rates offered by the counterparty for the term of the proposed repurchase transaction, generally less than one year, of a specified margin over SOFR. A portion of collateral for borrowings under repurchase agreements is subject to daily mark-to-market fluctuations and margin calls. A portion of collateral for borrowings under repurchase agreements are subject to margin calls only after certain “margin holiday” triggers are hit.

SFR Properties

Our subsidiary, Adoor LLC (“Adoor”), is focused on the acquisition and management of our SFR property business. Our strategy with respect to the SFR property business involves purchasing, renovating, maintaining and managing a large number of geographically diversified high-quality residential properties and leasing them to qualified tenants, including through the purchase of residential properties in BTR communities and leasing them to qualified tenants.

Our ability to identify and acquire properties that meet our investment criteria is affected by a number of factors, including pricing in our target markets, available inventory, competition, our available capital and applicable local, state and federal regulations. Properties acquired through traditional channels generally require costs in addition to the purchase price, including inspections, closing costs, title-related expenses, transfer taxes, recording fees, broker commissions, property taxes and homeowners’ association (“HOA”) fees, when applicable. We also typically incur renovation costs to prepare properties for rental, which may include improvements such as painting, flooring, cabinetry, appliances, plumbing, hardware and other items required to bring properties to rentable condition. The timing and cost of renovation and lease-up can vary based on the acquisition channel, the age and condition of the property and local market conditions. We have also acquired, and may continue to acquire, homes through the purchase of BTR communities and portions of BTR communities from regional and national homebuilders. Our operating results are affected by the time required to market and lease properties, which may vary across markets and is influenced by local demand, our marketing efforts and the size and composition of our available inventory.

Our revenues are derived primarily from rents collected from tenants under lease agreements that typically have terms of one to two years. Rental rates and occupancy levels are influenced by economic conditions and local and property-level factors, including market conditions, seasonality, tenant defaults and the time required to re-lease properties following tenant turnover.

Once a property is available for its initial lease, we incur ongoing property-level expenses, which consist primarily of property taxes, insurance, HOA fees (when applicable), utilities, repairs and maintenance, leasing costs, marketing expenses and property administration. Prior to a property becoming rentable, certain of these costs are capitalized as building and improvements. After a property becomes rentable, ordinary repairs and maintenance are expensed as incurred, while expenditures that improve a property or extend its useful life are generally capitalized.

Our Investment Portfolio segment also includes the activity from several wholly owned subsidiaries or minority investments in companies that perform various services in the mortgage and real estate sectors. This includes our strategic partnership with Darwin Homes, Inc. (“Darwin”) to run a property management platform, Adoor Property Management LLC (“APM”). All of our SFR properties are currently managed through APM.

Consumer Loans

We pursue various types of investments as the market evolves, including opportunistic investments in consumer loans. Our portfolio consists of consumer loans purchased through a forward-flow agreement with Upgrade, Inc. (the “Upgrade loans” or “Upgrade”), consumer loans purchased from Goldman Sachs in June 2023 (the “Marcus loans” or “Marcus”) and consumer loans purchased from SpringCastle (the “SpringCastle loans” or “SpringCastle”) held by Rithm Capital through certain limited liability companies (together, the “Consumer Loan Companies”). The Upgrade loans are financed through a secured revolving credit facility that matures in July 2026, and the Marcus loans are financed with long-term notes with a stated maturity date of June 2028. We have financed our investments in the SpringCastle loans with securitized non-recourse long-term notes with a stated maturity date of May 2036.

Non-Agency Securities

Within our non-Agency securities portfolio, we retain and own risk retention bonds from our securitizations that we do not consolidate in accordance with risk retention regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act (including the rules promulgated thereunder, the “Dodd-Frank Act”). We also retain and own bonds from our consolidated private label mortgage securitizations, which we eliminate in consolidation. The equity value is reflected in assets of consolidated entities and liabilities of consolidated entities on the consolidated balance sheets.

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We finance our investments in non-Agency securities with short-term borrowings under master uncommitted repurchase agreements. These borrowings generally bear interest rates offered by the counterparty for the term of the proposed repurchase transaction (e.g., 30 days, 60 days, etc.) of a specified margin over SOFR. A portion of collateral for borrowings under repurchase agreements is subject to daily mark-to-market fluctuations and margin calls. The remaining collateral is not subject to daily margin calls unless the collateral coverage percentage, a quotient expressed as a percentage equal to the current carrying value of outstanding debt divided by the market value of the underlying collateral, becomes greater than or equal to a collateral trigger. The difference between the collateral coverage percentage and the collateral trigger is referred to as a “margin holiday.”

Excess MSRs

Investments in Excess MSRs represent the MSR servicing fee component exceeding the base fee. Excess MSR assets include Rithm Capital’s ownership of Excess MSRs and associated recapture agreements acquired from and serviced by Rocket Companies, Inc. (“Rocket”), as successor by merger to Mr. Cooper Group Inc. (“Mr. Cooper”).

Servicer Advance Investments

Our servicer advance investments are associated with specified pools of residential mortgage loans in which we have contractually assumed the servicing advance obligation and include the related outstanding servicer advances, the requirement to purchase future servicer advances and the rights to the base fee component of the related MSR.

Commercial Real Estate

From time to time, we pursue opportunistic investments in the commercial real estate (“CRE”) sector as part of our broader investment strategy. These investments are typically structured through joint ventures that own and operate CRE assets, and may include equity investments in operating properties as well as loan financing for CRE development and repositioning projects. Our CRE investments are generally targeted toward assets where we believe we can generate attractive risk-adjusted returns through active asset management, capital structure optimization, or market dislocation opportunities.

CLOs

Our CLO investments relate to collateralized loan obligations that issue notes to investors and use the proceeds to acquire portfolios of credit-related assets. The notes issued by CLOs are structured in tranches, with senior notes receiving stated interest payments and subordinated notes receiving distributions from excess cash flows after payment of principal, interest, fees and expenses.

The Company generally directs the activities of its CLOs through its role as collateral manager and earns management and incentive fees. A portion of management fees is subordinated to principal and interest on the notes and may be deferred if certain overcollateralization tests are not satisfied. Incentive income is typically based on a percentage of excess cash flows available to subordinated noteholders.

Investment Guidelines

We make investment decisions in accordance with broad investment guidelines approved by our board of directors, which are used to evaluate specific investment opportunities. Our investment guidelines generally prohibit any investment that would cause us to fail to qualify as a REIT and any investment that would cause us to be regulated as an investment company. Subject to these guidelines, we may, without a stockholder vote, adjust our target asset classes and acquire a variety of assets that may differ from, and could be riskier than, our current portfolio. Our board of directors may amend these investment guidelines without stockholder approval, and any such changes will be disclosed in our next required periodic report.

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Financing Strategy

Our objective is to generate attractive risk-adjusted returns for our stockholders, which may, from time to time, involve the use of leverage. The amount of leverage we deploy for a particular investment is based on our assessment of a number of factors, including the expected liquidity and price volatility of the assets; the duration profile of assets and liabilities (including the effect of hedges); the availability and cost of financing; the creditworthiness of financing counterparties; macroeconomic conditions, including conditions in the U.S. economy and the residential mortgage and housing markets; interest rate expectations; the credit quality of the loans underlying our investments; and expected asset spreads relative to financing costs. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt Obligations” for further details regarding our debt obligations.

Hedging Strategy

We use various hedging instruments and risk management techniques to manage the impact of changes in interest rates on our investment portfolio across different interest rate environments. These instruments and techniques are intended to reduce, but not eliminate, the effect of interest rate changes on our earnings and liquidity. See “Risk Factors—Risks Related to our Business—Any hedging transactions that we enter into may limit our gains or result in losses.”

Our interest rate risk management techniques may include:

•interest rate swap agreements, interest rate cap agreements, exchange-traded derivatives and swaptions;

•puts and calls on securities or indices of securities;

•U.S. Treasury securities, options on U.S. Treasury securities and U.S. Treasury securities payable;

•TBA forward contracts; and

•other similar financial instruments.

Subject to maintaining our qualification as a REIT and exclusion from registration under the 1940 Act, we may, from time to time, utilize derivative financial instruments and other techniques to hedge interest rate risk associated with our borrowings and investments. Under the U.S. federal income tax laws applicable to REITs, we generally may enter into certain hedging transactions related to indebtedness that we incur, or expect to incur, to acquire or carry real estate assets; however, gross income from interest rate hedges that do not satisfy these requirements, together with other non-qualifying income, generally must not exceed 5% of our gross income.

The U.S. federal income tax rules applicable to REITs may also require us to implement certain risk management techniques through a domestic taxable REIT subsidiary (“TRS”), which is subject to U.S. federal corporate income taxation.

Policies with Respect to Certain Other Activities

Subject to approval by our board of directors, we may offer shares of our common stock or other equity or debt securities in exchange for property. We may also repurchase or otherwise reacquire our shares or other securities.

We may make loans to, or provide guarantees of certain obligations of, our subsidiaries.

Subject to the ownership limitations and the gross income and asset tests applicable to REIT qualification, we may invest in securities of other REITs, other entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over such entities.

We may also engage in the purchase and sale of investments.

Our officers and directors may change any of these policies and our investment guidelines without a vote of our stockholders. If we determine to raise additional equity capital, our board of directors has authority, without stockholder approval (subject to certain New York Stock Exchange (“NYSE”) requirements), to issue additional shares of common stock or preferred stock in any manner and on such terms and for such consideration as it deems appropriate, including in exchange for property.

Decisions regarding the form and other characteristics of financing for our investments are made by our officers, subject to the general investment guidelines adopted by our board of directors.

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Regulations

We are subject to extensive and evolving legal and regulatory requirements across all of our business lines. In particular, the mortgage lending and servicing industry is subject to a complex regulatory framework, and our subsidiaries engaged in mortgage origination, servicing and related activities are regulated by numerous federal, state and local governmental and regulatory authorities. These authorities include, among others, the Consumer Financial Protection Bureau (“CFPB”), the Federal Trade Commission (the “FTC”), the U.S. Department of Housing and Urban Development (“HUD”), the VA, the SEC and various state licensing, supervisory and administrative agencies. Our insurance business is subject to regulation and supervision in each of the United States jurisdictions in which it conducts business, as well as in the Cayman Islands, where it reinsures certain U.S. business. See “—Insurance Regulation” for additional information regarding the regulatory requirements applicable to our insurance business.

The scope of applicable laws and regulations, as well as the intensity of regulatory supervision and enforcement, has increased in recent years, initially in response to the global financial crisis and more recently due to technological developments, market changes and evolving regulatory priorities. Regulatory examinations, investigations, enforcement actions and fines have increased across the financial services sector. From time to time, we receive requests from governmental authorities for records, documents and information relating to our loan origination, servicing, collection and related practices. In addition, we are subject to periodic reviews and audits by the GSEs, Ginnie Mae, the CFPB, HUD, USDA, the VA, state regulatory agencies and other authorities. In recent periods, as federal oversight of the mortgage industry, including supervision by the CFPB, has been reduced, state regulatory agencies have become increasingly active. The legal and regulatory environment in which we operate continues to evolve, and existing statutes, regulations and interpretations may be amended or replaced, or new requirements may be adopted or implemented. We expect to remain subject to significant regulatory scrutiny as a participant in the mortgage and financial services sectors.

Our subsidiaries are required to comply with a broad array of federal, state and local consumer protection laws including, among others, the Dodd-Frank Act, the Gramm-Leach-Bliley Act, the Fair Debt Collection Practices Act, the Real Estate Settlement Procedures Act, the Truth in Lending Act, the Fair Credit Reporting Act, the Servicemembers Civil Relief Act, the Homeowners Protection Act, the Federal Trade Commission Act (the “FTCA”), the Telephone Consumer Protection Act and the Equal Credit Opportunity Act, as well as individual state licensing, privacy and foreclosure laws and state bankruptcy rules. These laws govern numerous aspects of our businesses, including loan origination, default servicing and collections, use of credit reports, safeguarding of non-public personal information, foreclosure and claims handling, escrow administration and required borrower disclosures. These requirements are subject to ongoing change through legislative, regulatory and enforcement developments.

In addition, various federal, state and local laws have been enacted to address predatory or abusive lending and servicing practices. For example, the Home Ownership and Equity Protection Act of 1994 (“HOEPA”) restricts certain loan terms for residential loans that exceed prescribed interest rate or fee thresholds and requires specific borrower disclosures prior to origination. Certain states have enacted, or may enact, similar laws or regulations that impose requirements more restrictive than those under the HOEPA, including “net tangible benefit” tests that may require a determination that a loan provides a measurable benefit to the borrower. These standards may involve subjective judgments and may be subject to differing interpretations by courts or regulators. Failure to comply with applicable predatory lending or servicing laws could subject us, as a servicer or, in the case of acquired loans, as an assignee or purchaser, to monetary penalties, borrower rescission rights, litigation or regulatory enforcement actions.

We are also subject to the reporting, disclosure and governance requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are regulated by the SEC. As a company with securities listed on the NYSE, we are subject to NYSE listing standards and related rules. Certain of our wholly owned subsidiaries, including Sculptor, Crestline and the Rithm Advisers, are registered with the SEC as investment advisers under the Investment Advisers Act of 1940 (the “Advisers Act”), and additional subsidiaries may become registered investment advisers in the future. These entities are subject to extensive regulatory requirements under the Advisers Act and related rules. We may also periodically be subject to requests from the SEC for records, documents and information. In addition, among other rules and regulations, we are subject to regulation under the U.S. Employee Retirement Income Security Act of 1974 (“ERISA”) and, through certain subsidiaries, are subject to regulation and oversight by the Commodity Futures Trading Commission (“CFTC”) and the National Futures Association. Certain international affiliates are subject to regulation by non-U.S. authorities, including the United Kingdom (“UK”) Financial Conduct Authority (“FCA”) and the Hong Kong Securities and Futures Commission (“SFC”). Our global investment activities are subject to regulatory regimes that vary by jurisdiction, including in the U.S., the European Union (“EU”) and the UK.

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In certain jurisdictions, including the U.S., the EU and the UK, we are subject to risk retention and related regulatory requirements applicable to securitizations and similar transactions, including CLOs and other transactions that we manage or may manage in the future. These requirements may obligate us to retain a portion of the securities or other interests issued in certain transactions, either to satisfy regulatory requirements directly applicable to us or to meet investor requirements based on obligations applicable to those investors.

We are also subject to federal, state, local and foreign laws governing data privacy and the protection of non-public personal information, including the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”), the European Union General Data Protection Regulation (the “EU GDPR”) and the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (together with the EU GDPR, the “GDPR”), as well as similar laws in other jurisdictions. These laws impose obligations regarding the collection, use, storage and security of personal data and grant certain rights to individuals. Failure to comply with applicable data privacy laws may result in regulatory investigations, enforcement actions, private litigation, statutory damages and reputational harm. Several states have enacted, or are considering enacting, privacy laws similar to the CCPA. In addition, our service providers, including third-party vendors and outside counsel, are subject to certain of these requirements.

These and other laws and regulations directly affect our operations and require ongoing compliance efforts, including internal controls, monitoring, audits and examinations by regulatory authorities. We devote substantial resources to compliance and risk management; however, given the complexity and evolving nature of the regulatory environment, there can be no assurance that we will remain in compliance with all applicable requirements. See “Risk Factors—Risks Related to the Financial Markets and Our Regulatory Environment.”

Insurance Regulation

Our insurance business is subject to regulation and supervision in each of the United States jurisdictions in which it conducts business, as well as in the Cayman Islands, where it reinsures certain U.S. business. Insurance laws and regulations generally are designed to protect the interests of policyholders, consumers and claimants rather than stockholders or other investors. The nature and extent of insurance regulation varies by jurisdiction, and insurance regulators generally have broad administrative power relating to, among other matters, setting capital and surplus requirements, licensing of insurers, insurance producers and adjusters, review and approval of admitted product forms and rates, establishing standards for reserve adequacy, prescribing statutory accounting methods and the form and content of statutory financial reports, regulating certain transactions with affiliates (including reinsurance transactions) and prescribing types and amounts of investments.

Licensing

Rithm Capital Corp. is the parent company of two insurance company subsidiaries: (i) CL Life and Annuity Insurance Company, a stock life insurance company domiciled in Utah and commercially domiciled in Texas (“CL Life”); and (ii) CL Re SPC, Ltd., a segregated portfolio company incorporated in the Cayman Islands (“CL Re”). CL Life is primarily regulated by the Utah Insurance Department. Although commercially domiciled in Texas, the Texas Department of Insurance has granted to CL Life an exemption from all filing requirements in Chapter 823 of the Texas Insurance Code except for the filing of a Form B registration statement. Through CL Life, we primarily write annuity products.

Insurance Holding Company Regulation

We operate as an insurance holding company system and are subject to the insurance holding company laws of Utah and, as noted above, to a lesser degree given CL Life’s commercially domiciled status, Texas. These statutes require that each insurance company in the system register with the insurance department of its state of domicile and furnish information concerning the operations of companies within the holding company system that may materially affect the operations, management or financial condition of the insurers within the system and domiciled in that state. These statutes also provide that all transactions among members of a holding company system must be fair and reasonable and, if material or of specified types, such transactions require prior notice and approval or non-disapproval by the applicable state insurance regulator.

Changes of Control – U.S. Insurance Regulation

Before a person can acquire control of a U.S. domestic insurer, prior written approval must be obtained from the insurance commissioner of the state where the insurer is domiciled, or the acquiror must request an exemption from the Form A filing and approval requirements or a determination of non-control (each, an “Exemption Request”) or file a disclaimer of affiliation and/or control (a “Disclaimer”) with the insurance department of such state and obtain approval thereon. Since CL Life is domiciled in Utah, the insurance laws and regulations of Utah would be applicable to any proposed acquisition of control of Rithm Capital

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Corp. Under applicable insurance laws and regulations in Utah, no person may acquire control of a domestic insurer until written approval is obtained from the state insurance commissioner. Such approval would be contingent upon the state insurance commissioner’s consideration of a number of factors, including among others, the financial strength of the proposed acquiror, the integrity and management of the acquiror’s board of directors and executive officers, the acquiror’s plans for the future operations of the domestic insurer and any anti-competitive results that may arise from the consummation of the acquisition of control.

State insurance laws in Utah provide that control over a domestic insurer is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing, ten percent or more of the voting securities of the domestic insurer. This statutory presumption of control may be rebutted by a showing that control does not exist in fact. The applicable state insurance regulator, however, may find that “control” exists in circumstances in which a person owns or controls less than ten percent of the voting securities of the domestic insurer.

State insurance laws and regulations in Utah pertaining to changes of control would apply to both the direct and indirect acquisition of ten percent or more of the voting stock of an insurer domiciled in the state (or potentially of less than ten percent of the voting stock if there is other indicia of control). Accordingly, the acquisition of ten percent or more of our common stock would be considered an indirect change of control of our insurance company subsidiaries and would trigger the applicable change of control filing requirements under state insurance laws and regulations in Utah, absent the filing of an Exemption Request or Disclaimer and its acceptance by the applicable state insurance regulator. These requirements may discourage potential acquisition proposals and may delay, deter or prevent a change of control of us, including through transactions that some or all of our stockholders might consider to be desirable.

Restrictions on Paying Dividends

The ability of our insurance company subsidiaries to pay dividends is restricted under the insurance laws and regulations of their respective domiciliary states and may only be paid from earned surplus. Under the insurance laws of Utah, no insurer may pay a dividend above a specified threshold (a so-called extraordinary dividend) without the approval or non-disapproval of the applicable state insurance regulator. An extraordinary dividend under Utah insurance laws includes any dividend or distribution of cash or other property whose fair market value together with that of other dividends or distributions made within the preceding twelve months exceeds the lesser of either 10% of such insurer’s surplus as regards policyholders as of December 31 next preceding, or the net gain from operations of such insurer, if such insurer is a life insurer, or the net income, if such insurer is not a life insurer, for the twelve month period ending December 31 next preceding, but shall not include pro rata distributions of any class of the insurer's own securities.

State insurance regulators require insurance companies to maintain specified levels of statutory capital and surplus. Insurance regulators have broad powers to prevent reduction of statutory surplus to inadequate levels, and there is no assurance that dividends of the maximum amounts calculated under any applicable formula would be permitted. State insurance regulatory authorities, including the Utah Insurance Department, may in the future adopt statutory provisions, or impose additional constraints, more restrictive than those currently in effect.

Investment Regulation

Our insurance company subsidiaries are subject to Utah insurance laws which require diversification of our investment portfolios and limits on the amount of investments in certain categories. Failure to comply with these laws and regulations would cause non-conforming investments to be treated as non-admitted assets for purposes of measuring statutory surplus and, in some instances, would require us to sell those investments.

Guaranty Fund Assessments and Residual Market Mechanisms

Most states require licensed insurance companies to participate in guaranty funds in order to provide funds for payment of losses for insurers which have become insolvent. Assessments are generally between 1% and 2% of annual premium written in the state. Some states also require licensed and admitted insurers to participate in various state residual market mechanisms whose goal is to provide affordability and availability of insurance to those clients who may not otherwise be able to obtain insurance. If losses exceed the funds, the pool is available to pay those losses. The pools have the ability to assess insurers to provide additional funds to the pool. The amounts of the assessment for each company are normally based upon the proportion of each insurer’s (and in some cases the insurer’s and its affiliates’) written premium for coverages similar to those provided by the pool, and are frequently uncapped.

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Periodic Financial and Market Conduct Examinations

The Utah Insurance Department, the domiciliary state insurance regulator of CL Life, is authorized to conduct on-site visits and examinations of the affairs of CL Life, including its financial condition, its relationships and transactions with affiliates and its dealings with policyholders, every three to five years, and may conduct special or targeted examinations to address particular concerns or issues at any time. Insurance regulators of other states in which we do business in the future also may conduct examinations. The results of these examinations can give rise to regulatory orders requiring remedial, injunctive or other corrective action. Insurance regulatory authorities have broad administrative powers to restrict or revoke licenses to transact business and to levy fines and monetary penalties against insurers and insurance agents and brokers found to be in violation of applicable laws and regulations.

Quarterly and Annual Financial Reporting

CL Life is required to file quarterly and annual financial reports with state insurance regulators using Statutory Accounting Principles (“SAP”) rather than U.S. GAAP. In keeping with the intent to protect policyholders, SAP emphasizes solvency considerations.

Risk-Based Capital

Risk-based capital (“RBC”) laws are designed to assess the minimum amount of capital that an insurance company needs to support its overall business operations and to ensure that it has an acceptably low expectation of becoming financially impaired. State insurance regulators use RBC to set capital requirements, considering the size and degree of risk taken by the insurer and taking into account various risk factors including asset risk, credit risk, underwriting risk and interest rate risk. As the ratio of an insurer’s total adjusted capital and surplus decreases relative to its RBC, the RBC laws provide for increasing levels of regulatory intervention culminating with mandatory control of the operations of the insurer by the domiciliary insurance department at the so-called mandatory control level.

Operational and Regulatory Structure

REIT Qualification

We have elected and intend to continue to qualify as a REIT for U.S. federal income tax purposes. Our qualification as a REIT depends on our ability to satisfy, on an ongoing basis, a number of complex requirements under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), including requirements relating to the sources of our gross income, the composition and value of our assets, the level of distributions made to our stockholders and the concentration of ownership of our capital stock.

We believe that, commencing with our taxable year ended December 31, 2013, we have been organized and operated in a manner consistent with the requirements for qualification and taxation as a REIT under the Internal Revenue Code, and that our current and anticipated manner of operation will enable us to continue to meet these requirements. As a REIT, we generally are not subject to U.S. federal, state or local income tax on income that is distributed to our stockholders, provided that we distribute at least 90% of our taxable income each year.

Certain of our assets and activities do not qualify for REIT treatment or present uncertainty under the REIT rules. Accordingly, we hold certain assets, including servicer advance investments, consumer loans and MSRs, and conduct certain activities, including our securitization, servicing, origination and asset management businesses, through TRSs, which are subject to U.S. federal, state and local income taxation.

Exclusion from Registration under the Investment Company Act of 1940

We intend to continue to conduct our operations so that neither we nor any of our subsidiaries is required to register as an investment company under the 1940 Act. Under the 1940 Act, an issuer may be deemed an investment company if it is engaged primarily in the business of investing, reinvesting or trading in securities, or if investment securities represent more than 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”).

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We are organized as a holding company that conducts its operations primarily through wholly owned and majority owned subsidiaries. We intend to operate in a manner such that less than 40% of the value of our adjusted total assets on an unconsolidated basis consists of “investment securities,” as defined under the 1940 Act, in compliance with the 40% test. Securities issued by wholly owned or majority owned subsidiaries that are not themselves investment companies and are not relying on the exclusions provided by Section 3(c)(1) or Section 3(c)(7) of the 1940 Act are excluded from the definition of “investment securities” for purposes of this test.

For purposes of applying the 40% test, we currently treat our interests in certain subsidiaries holding servicer advance investments and consumer loans as investment securities because those subsidiaries rely on the exclusion provided by Section 3(c)(7) of the 1940 Act. We monitor our asset composition on an ongoing basis to maintain compliance with the 40% test. We also believe that we are not an investment company under Section 3(a)(1)(A) of the 1940 Act because we do not engage primarily, and do not hold ourselves out as being engaged primarily, in the business of investing, reinvesting or trading in securities. Rather, through our subsidiaries, we are primarily engaged in operating and asset-based businesses.

If the value of investment securities were to exceed the 40% threshold, we could be required to alter the manner in which we conduct our operations, sell assets at unfavorable times or register as an investment company, any of which could adversely affect our business, financial condition, results of operations and ability to make distributions to our stockholders.

Reliance on the Section 3(c)(5)(C) Exclusion

For purposes of maintaining our exclusion from registration under the 1940 Act, we treat interests in certain wholly owned and majority owned subsidiaries, which represent more than 60% of the value of our adjusted total assets on an unconsolidated basis, as non-investment securities because those subsidiaries rely on the exclusion provided by Section 3(c)(5)(C) of the 1940 Act. This exclusion is available to entities that are “primarily engaged” in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.

To qualify for the Section 3(c)(5)(C) exclusion, at least 55% of a subsidiary’s assets must consist of qualifying real estate assets and at least 80% of its assets must consist of qualifying real estate assets and real estate-related assets. As a result, maintenance of this exclusion generally limits the amount of non-real estate assets held by such subsidiaries to no more than 20% of their total assets.

In determining compliance requirements and based on guidance from the SEC and its staff, we treat Agency RMBS issued with respect to an underlying pool of mortgage loans in which we hold all of the certificates issued by the pool as qualifying real estate assets. The SEC and its staff have not issued specific guidance regarding the treatment of whole pool non-Agency RMBS. Based on our analysis of available guidance, we treat whole pool non-Agency RMBS, where the subsidiary holds all certificates issued by the pool, as qualifying real estate assets. We also treat whole mortgage loans acquired directly by such subsidiaries as qualifying real estate assets, provided that the loans are secured by real estate and the subsidiary has the unilateral right to foreclose.

Based on our analysis of SEC guidance relating to analogous assets, we treat Excess MSRs for which we do not own the related servicing rights as real estate-related assets for purposes of satisfying the 80% test. We also treat Agency and non-Agency partial pool RMBS as real estate-related assets for purposes of this test.

We expect our subsidiaries relying on Section 3(c)(5)(C) to continue to classify assets based on existing SEC guidance or, where guidance is limited, on reasonable interpretations of such guidance. The SEC or its staff may in the future disagree with our classifications or issue new or different guidance, which could require us to adjust our investment strategy, limit certain investments or dispose of assets that we might otherwise wish to retain.

Although we monitor compliance with the requirements of Section 3(c)(5)(C) on an ongoing basis and prior to each investment origination or acquisition, there can be no assurance that we will be able to maintain the exclusion for these subsidiaries. Any failure to do so could adversely affect our business, financial condition and results of operations. See “Risk Factors—Risks Related to the Financial Markets and Our Regulatory Environment—Maintenance of our 1940 Act exclusion imposes limits on our operations.”

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Competition

Competition in our businesses is significant, and our results depend in part on our ability to originate, acquire, manage and finance assets and to raise and retain capital on terms consistent with our business and economic model. Across our segments, we compete with banks, REITs, independent mortgage originators and servicers, private equity firms, alternative asset managers, hedge funds, insurance companies and other large financial services companies, as well as technology-enabled platforms. Many of these competitors are significantly larger than we are, have greater access to capital and other resources and may have other competitive advantages. Certain competitors may also have higher risk tolerances or different underwriting standards, which could enable them to bid more aggressively for assets or accept lower returns. Sellers and counterparties may prefer competitors that are perceived to have greater scale, broader financing sources or a more streamlined ability to obtain third-party approvals and consents.

Origination and Servicing

Newrez competes with both bank and non-bank lenders and servicers across multiple segments of the residential mortgage market. Competition in loan production is based primarily on product offerings, pricing (including rates and fees), brand recognition, service levels and speed and certainty of execution. Competition in servicing and subservicing is based on pricing, servicing performance, operational capabilities, compliance and risk management infrastructure, scale and technology and process efficiency. Counterparties also evaluate a servicer’s ability to meet applicable federal, state and local regulatory requirements and investor and agency standards.

Residential Transitional Lending

In our Residential Transitional Lending segment, Genesis competes with regional banks, private lending institutions, mortgage REITs, specialty finance companies and other residential real estate lenders for both borrowers and lending opportunities. Competition is based on pricing, underwriting standards, speed and certainty of execution, product flexibility, sponsor relationships and service levels. Competitive pressures may affect loan yields, origination volumes and the terms and structures available for financing and securitizing RTL loans.

Asset Management

The asset management industry is highly competitive, and we compete globally and regionally with alternative and traditional investment managers for both investor capital and investment opportunities. Competitors include hedge funds, private credit and distressed debt funds, mezzanine funds, CLO managers and issuers, public and private investment firms, business development companies, investment banks, real estate companies and other financial institutions. Competition may affect our ability to raise and retain AUM, deploy capital on attractive terms and attract and retain investment professionals. Many competitors have greater resources, longer track records in certain strategies, broader product offerings and larger distribution platforms. In addition, competitors may be subject to different regulatory regimes or constraints, which may provide them greater flexibility to pursue certain investments or product structures. For additional information regarding competitive risks, see “Risk Factors—Risks Related to Our Business—Risks Related to our Asset Management Business—Competitive pressures in the asset management business could materially and adversely affect our business, financial condition and/or results of operations.”

We cannot assure you that we will be successful in competing in the markets in which we operate. Competitive pressures may limit our ability to source assets, grow AUM, maintain margins or achieve our business objectives.

Investment Portfolio

In acquiring, financing and managing investments within our Investment Portfolio segment, we compete with a range of institutional investors and asset owners, including banks, insurance companies, asset managers, mortgage REITs, private equity firms, hedge funds and other investment vehicles. Competitive conditions can affect pricing, asset availability, financing terms and the pace and certainty with which transactions can be executed.

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Human Capital

Our executive management team oversees our human capital resources and employment practices, including workforce planning, talent development and compliance with applicable employment laws and regulations. These practices are designed to support our operations as a manager of assets and investments across the real estate and financial services sectors. As of December 31, 2025, we employed approximately 7,240 employees, of which 5,630 employees were in Origination and Servicing. Certain employees of one of our subsidiaries are represented by labor unions and are covered by collective bargaining agreements, including Local 94 (engineers) and 32BJ (security guards). As of December 31, 2025, approximately 175 employees were covered by these agreements.

Our human capital function oversees the employee lifecycle, including recruitment, onboarding, training, development, promotion and retention. Workforce needs are assessed across our operating segments based on business requirements and functional expertise. For investment, asset management and other specialized roles, we seek candidates with relevant experience and technical expertise and may engage external recruiting firms where appropriate.

We are committed to providing equal employment opportunities and maintaining a workplace that is free from discrimination, harassment and retaliation. Our employment practices comply with applicable federal, state and local laws, and we recruit, hire, assign and promote employees without regard to race, color, national origin, religion, age, sex, pregnancy, sexual orientation, gender identity or expression, disability, genetic information, veteran status or any other status protected by law.

We maintain policies and procedures designed to promote ethical conduct, compliance, corporate governance and effective internal controls. These include codes of ethics, anti-discrimination and harassment prevention policies, retaliation policies and related reporting and investigation procedures. Employees and managers participate in periodic training, including required harassment prevention training, and we maintain reporting mechanisms to address workplace concerns.

We periodically review and update our employment-related policies and practices to reflect changes in legal requirements, regulatory expectations and business needs. We also work to ensure consistent application of these policies across our operating companies.

Compensation and Benefits

We consider employee engagement and retention to be important to our operations and seek to offer compensation and benefits that are competitive within our industry and aligned with individual roles, responsibilities and performance, as well as industry standards. Our compensation programs generally include a combination of fixed and variable components, such as base salary, cash bonuses and, for certain employees, equity-based compensation.

Performance is evaluated through formal review processes, and compensation decisions consider individual contributions, experience, seniority and market conditions. Managers are encouraged to provide ongoing feedback in addition to periodic reviews.

We offer a comprehensive benefits program to eligible employees, which includes medical, dental and vision coverage, life and long-term disability insurance, critical illness and supplemental accident coverage and paid time off. We also provide access to an Employee Assistance Program that offers confidential support services to employees and their household members.