Rithm Capital (RITM) FY2025 10-K Risk Factors: 25 New, 21 Dropped

What the changes say

New risks emphasize Newrez’s cryptocurrency-based mortgage underwriting and planned dependence on Valon Technologies’ servicing platform.

What changed since the prior 10-K

New

NewRisks 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
Executing a diversified real estate, credit and financial-services platform strategy depends on capital allocation, acquisitions, talent, financing, integration and regulatory compliance.
NewRisks Related to Our Business
Our business model exposes us to complex operational risks across multiple businesses and asset classes
Operating four expanding segments across businesses and asset classes increases the chance that control, personnel, system or oversight failures spread across the platform.
NewRisks Related to Our Business
The valuation of certain of our assets and investments requires significant judgment and is based on various assumptions, and changes in, or the use of incorrect, valuation assumptions could materially adversely affect our business, financial condition, cash flows, results of operations and/or fee revenues
Valuing illiquid assets and investments depends on models, estimates, third-party evaluations and assumptions about rates, credit, prepayments, liquidity and cash flows.
NewRisks Related to Our Business
Our assumptions used in our valuations could differ materially from actual results. In some cases, the use of different estimates or assumptions could instead produce materially different fair values, which could have a material adverse effect on our consolidated financial position and/or results of operations
Incorrect valuation assumptions or changing market and borrower outcomes could cause earnings volatility, impairments, liquidity or leverage problems, restatements and dividend limits.
NewRisks Related to Our Business
Government intervention in the mortgage and credit markets may create uncertainty, lead to increased volatility and impact liquidity of certain mortgage products and could adversely affect our business, financial condition and/or results of operations
Potential government or GSE intervention in mortgage and credit markets could change rates, spreads, valuations, liquidity, hedging effectiveness and capital deployment.
NewRisks Related to Our Business
Under current market conditions, it is likely that some of these loans will have current LTV ratios in excess of 100%, meaning the amount owed on the loan exceeds the value of the underlying real estate
Some residential mortgage loans may have loan-to-value ratios above 100%, increasing losses if borrowers default and collateral values fall below amounts owed.
NewRisks Related to Our Business
We are not restricted from dealing with any particular counterparty or from concentrating any or all of our transactions with a few counterparties, and we have counterparty concentration risk in certain of our financing partners and subservicers
Concentration among financing partners and subservicers creates dependence on counterparties, including Rocket, Onity, PHH and Valon, for servicing performance.
NewRisks Related to Our Business
Certain vendors we engage have operations in foreign jurisdictions that could be adversely affected by political, economic, regulatory or other conditions
Foreign operations of vendors could be disrupted by instability, disasters, cyber incidents, sanctions, export controls, data-transfer restrictions, localization, labor or tax changes.
NewRisks Related to Origination and Servicing
The servicing of residential mortgage loans subjects certain of our subsidiaries to various operational risks that could have a negative impact on our financial results
Residential mortgage servicing exposes subsidiaries to operational failures that could harm financial results.
NewRisks Related to Origination and Servicing
A substantial portion of our loan originations is sourced through correspondent sellers and disruptions in this channel could adversely affect our business
Approximately 70% of 2025 origination volume came through correspondent sellers, exposing results to lender failures, channel disruption, fraud and repurchase obligations.
NewRisks Related to Origination and Servicing
Our introduction of new underwriting programs involving digital assets could subject us to increased regulatory, market and operational risks
Newrez’s program accepts Bitcoin, Ethereum, stablecoins and approved spot crypto ETFs in mortgage underwriting, adding cryptocurrency volatility, valuation, regulatory and operational risks.
NewRisks Related to Origination and Servicing
Our servicing operations will become dependent on a single third-party SaaS provider, which exposes us to operational, technological and vendor concentration risks
Newrez expects to migrate substantially all servicing to Valon Technologies’ SaaS platform, creating single-provider, cybersecurity, compliance, records and AI-related dependence.
NewRisks Related to Our Residential Transitional Lending Business
The RTLs in which we may invest may be subject to a greater risk of loss than conventional mortgage loans
NewRisks Related to Our Asset Management Business
competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that many alternative investment strategies seek to exploit
NewRisks Related to Our Asset Management Business
We may be unable to successfully integrate either the Paramount or Crestline businesses and realize the anticipated benefits of either or both the Paramount Acquisition and the Crestline Acquisition
NewRisks Related to Our Asset Management Business
The Paramount Acquisition provides greater exposure to risks in the commercial real estate industry
NewRisks Related to Our Asset Management Business
We may not have discovered undisclosed liabilities of each of Paramount or Crestline during our due diligence processes
NewRisks Related to Our Asset Management Business
All of the assets acquired in the Paramount Acquisition (the “Paramount Assets”) are located in New York City and San Francisco, and adverse economic or regulatory developments in these areas could negatively affect our results of operations and/or our financial condition
NewRisks Related to Our Asset Management Business
Rithm may be unable to renew leases, lease currently vacant space or vacating space on favorable terms or at all as leases expire, which could adversely affect its value and negatively affects our results of operations and/or financial condition
NewRisks Related to Our Asset Management Business
Joint venture partners in 712 Fifth Avenue, One Market Plaza and 300 Mission Street have forced sale rights as a result of which we may be forced to sell these assets to third parties at times or prices that may not be favorable to us
NewRisks Related to Our Asset Management Business
The Paramount Assets are exposed to risks associated with property redevelopment and repositioning that could adversely affect it
NewRisks Related to Our Asset Management Business
Our sponsorship of and investment in Rithm Acquisition Corp. may expose us to increased risks and liabilities
NewRisks Related to Our Investment Portfolio
yields on the assets that were prepaid. In addition, the market value of our loans and real estate and other securities may, because of the risk of prepayment, benefit less than other fixed-income securities from declining interest rates
NewRisks Related to Our Investment Portfolio
Rithm Capital and third-party co-investors, through a joint venture entity, Advance Purchaser, have agreed to purchase all future arising servicer advances from a certain third-party servicer under certain residential mortgage servicing agreements
NewRisks Related to Our Investment Portfolio
Our SFR business is subject to numerous risks, including risks related to adverse economic, regulatory or environmental conditions, or other events, which may have an impact on the value of our properties or our operating results

Dropped

DroppedRisks Related to Our Business
We may not be able to successfully operate our business strategy or generate sufficient revenue to make or sustain distributions to our stockholders
Ability to generate enough returns to fund expenses, debt obligations and shareholder dividends.
DroppedRisks Related to Our Business
The value of our investments, including the valuation methodologies used for certain assets in our funds, is based on various assumptions that could prove to be incorrect and could have a negative impact on our financial results
Investment valuation methodologies and cash-flow assumptions could prove incorrect.
DroppedRisks Related to Our Business
Prepayment and Delinquency Exposure
Prepayment and delinquency assumptions could reduce mortgage cash flows, interest income and valuations.
DroppedRisks Related to Our Business
Recapture Agreement Limitations
Recapture agreements may affect retention of MSRs when servicing partners originate replacement loans.
DroppedRisks Related to Our Business
Illiquid Asset Valuation Uncertainties
Illiquid assets require uncertain third-party, stress-tested and comparable-instrument valuation methods.
DroppedRisks Related to Our Business
A sale of MSRs or interests in MSRs and servicer advances or other assets, including loans, could be re-characterized as a pledge of such assets in a bankruptcy proceeding
DroppedRisks Related to Our Business
If such a recharacterization occurs, the validity or priority of our security interest in the MSRs or interests in MSRs and servicer advances or other assets could be challenged in a bankruptcy proceeding of such servicer
DroppedRisks Related to Our Business
Payments made by a servicer to us could be voided by a court under federal or state preference laws
DroppedRisks Related to Our Business
Payments made to us by such servicer, or obligations incurred by it, could be voided by a court under federal or state fraudulent conveyance laws
DroppedRisks Related to Our Business
Our funds and fund investments may be subject to numerous additional risks, which we may not be able to foresee or anticipate. Many of these factors are outside of our control and any one of them could result in a material adverse effect on our financial position, results of operations and cash flows
DroppedRisks Related to Our Business
We may not be able to successfully execute on our strategy, and any acquisitions or dispositions of assets or financing or other transactions that we pursue may not be successfully consummated or consummated on favorable terms
MSR, servicer-advance or loan sales could be recharacterized as pledges in a servicer bankruptcy.
DroppedRisks Related to Our Business
increase our need for capital to fund servicer advances (which do not bear interest), which would increase our interest expense, reduce the value of our investment and potentially reduce the cash that we have available to pay our operating expenses or to pay dividends
Bankruptcy could challenge the validity or priority of security interests in transferred servicing assets.
DroppedRisks Related to Our Business
A failure by any or all of the members of Advance Purchaser LLC to make capital contributions for amounts required to fund servicer advances could result in an event of default under our advance facilities and a complete loss of our investment
Bankruptcy preference laws could require repayment of amounts previously paid by an insolvent servicer.
DroppedRisks Related to Our Business
Certain vendors have operations in India that could be adversely affected by changes in political or economic stability or by government policies
Bankruptcy parties could challenge servicing-asset transfers or obligations as fraudulent conveyances.
DroppedRisks Related to Our Business
The exercise of cleanup calls could negatively impact our interests in MSRs
DroppedRisks Related to Our Business
We face significant competition in the leasing market for quality residents, which may limit our ability to lease our SFR homes on favorable terms
Funds and fund investments faced unforeseen risks and conflicts involving Rithm Property Trust management.
DroppedRisks Related to Our Business
Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers' financial condition, and disputes between us and our co-venturers and could expose us to potential liabilities and losses
DroppedRisks Related to Our Business
A significant portion of our SFR costs and expenses are fixed, and we may not be able to adapt our cost structure to offset declines in our revenue
DroppedRisks Related to the Financial Markets and Our Regulatory Environment
the assets we and our subsidiaries may originate or acquire are limited by the provisions of the 1940 Act and the rules and regulations promulgated under the 1940 Act, which may adversely affect our business
DroppedRisks Related to Our Taxation as a REIT
from our provision of services and from other non-qualifying sources, to less than 5% of our annual gross income (determined without regard to gross income from qualified hedging transactions)
DroppedRisks Related to Our Stock
REIT taxable income, the annual distribution requirements under the REIT provisions of the Internal Revenue Code, our operating expenses and other factors our directors deem relevant

Reworded

82% rewrittenRisks 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
No substantive change is shown in the provided prior- and current-year text.
Was: Competitive pressures in the asset management business could materially adversely affect our business, financial condition or results of operations
80% rewrittenRisks Related to the Financial Markets and Our Regulatory Environment
Maintenance of our 1940 Act exclusion imposes limits on our operations
The provided text is substantively unchanged; this year only removes the hyphen in “wholly owned.”
75% rewrittenRisks Related to Our Stock
We have not established a minimum distribution payment level for our common stock, and we cannot assure you of our ability to pay distributions in the future
The current text adds REIT taxable income, Internal Revenue Code distribution requirements and operating expenses among factors affecting dividends.
74% rewrittenRisks Related to Our Taxation as a REIT
Complying with the REIT requirements may limit our ability to hedge effectively
The current text specifies the 5% non-qualifying-income limit, possible TRS hedging and resulting interest-rate exposure or higher hedging costs.
73% rewrittenRisks Related to Our Business
The value of our interests in MSRs, servicer advances, residential mortgage loans, RTLs and RMBS may be adversely affected by deficiencies in servicing and foreclosure practices, as well as related delays in the foreclosure process
The current text removes the reference to purchasing advances from certain Servicing Partners but otherwise retains the foreclosure and servicing-risk discussion.
Was: The value of our interests in MSRs, servicer advances, residential mortgage loans, business purpose loans, and RMBS may be adversely affected by deficiencies in servicing and foreclosure practices, as well as related delays in the foreclosure process
72% rewrittenRisks Related to Our Investment Portfolio
Prepayment rates on our residential mortgage loans and those underlying our real estate and other securities may adversely affect our profitability
No substantive change is shown in the provided prior- and current-year text.
70% rewrittenRisks Related to Our Investment Portfolio
Our consumer loan portfolio generally has a higher degree of risk of default than other loans
The consumer loan portfolio carrying value increased from $665.6 million at December 31, 2024 to $784.4 million at December 31, 2025.
58% rewrittenRisks Related to Origination and Servicing
Our ability to acquire and/or transfer MSRs may be subject to the approval of various third parties, and such approvals may not be provided on a timely basis or at all, or may be subject to conditions, representations and warranties and indemnities
The current text removes “significant” before conditions and changes Depositors and non-Agency capitalization without changing the approval, cost or indemnity risk.
58% rewrittenRisks Related to the Financial Markets and Our Regulatory Environment
Any of these outcomes could materially and adversely affect our reputation, business, financial condition, prospects, liquidity and/or results of operations
55% rewrittenRisks Related to Our Business
The geographic distribution of the loans underlying, and collateral securing, certain of our investments subjects us to geographic real estate market risks, including environmental risks, which could adversely affect the performance of our investments, our results of operations and financial condition
Was: The geographic distribution of the loans underlying, and collateral securing, certain of our investments subjects us to geographic real estate market risks, which could adversely affect the performance of our investments, our results of operations and financial condition
49% rewrittenRisks Related to the Financial Markets and Our Regulatory Environment
Certain jurisdictions require licenses to purchase, hold, enforce or sell residential mortgage loans and/or MSRs, and we may not be able to obtain and/or maintain such licenses
48% rewrittenRisks Related to Our Investment Portfolio
We face risks associated with the operation of mixed-use commercial properties, which may impact our operating results
47% rewrittenRisks Related to the Financial Markets and Our Regulatory Environment
Certain of our subsidiaries have been and are subject to federal and state regulatory matters and other litigation, which may adversely impact us
Was: Certain of our subsidiaries and Servicing Partners have been and are subject to federal and state regulatory matters and other litigation, which may adversely impact us
47% rewrittenGeneral Risks
The development and use of AI technology could lead to legal or regulatory actions, harm our reputation, or have a significant negative impact on our business
44% rewrittenRisks Related to Our Residential Transitional Lending Business
There are certain risks associated with our Genesis business
43% rewrittenRisks Related to Our Financing Arrangements
The lenders under our financing agreements may elect not to extend financing to us, which could quickly and seriously impair our liquidity
41% rewrittenRisks Related to Our Business
Market and political conditions could negatively impact our business, results of operations, cash flows and/or financial condition
Was: Market conditions could negatively impact our business, results of operations, cash flows and financial condition
40% rewrittenRisks Related to Our Investment Portfolio
We are subject to risks related to securitization of any loans originated and/or serviced by our subsidiaries
38% rewrittenRisks Related to Our Asset Management Business
Our asset management business involves certain risks, which could adversely affect our business, financial condition and/or results of operations
Was: Our asset management business, including Sculptor and its funds, involves certain risks, which could adversely affect our business, financial condition and results of operations
37% rewrittenRisks Related to Our Investment Portfolio
Certain of our third party servicers have in the past and may in the future trigger termination events or events of default under some PSAs underlying certain MSRs with respect to which we are entitled to the base fee component or Excess MSRs
Was: Certain of our Servicing Partners have in the past and may in the future trigger termination events or events of default under some PSAs underlying the MSRs with respect to which we are entitled to the base fee component or Excess MSRs
32% rewrittenRisks Related to Our Business
The residential mortgage loans underlying the securities we invest in and the loans we originate and/or directly invest in are subject to delinquency, foreclosure and loss, which could result in losses to us
Was: The residential mortgage loans underlying the securities we invest in and the loans we directly invest in are subject to delinquency, foreclosure and loss, which could result in losses to us
30% rewrittenRisks Related to Origination and Servicing
Certain of our subsidiaries, including Newrez and Genesis, perform various mortgage and real estate related services and have origination and servicing operations, which entail borrower-facing activities and employing personnel
Was: Certain subsidiaries of Rithm Capital perform various mortgage and real estate related services and have origination and servicing operations, which entail borrower-facing activities and employing personnel. Additionally, Rithm Capital engages various Servicing Partners, which are subject to many of the same risks
28% rewrittenRisks Related to Origination and Servicing
There may be difficulties with integrating the loans underlying MSR acquisitions involving servicing transfers into the successor servicer’s servicing platform, which could have a material adverse effect on our results of operations, financial condition and liquidity
26% rewrittenGeneral Risks
Unfavorable global economic and political conditions could adversely affect our business, financial condition or results of operations
25% rewrittenRisks Related to the Financial Markets and Our Regulatory Environment
Certain of Rithm Capital’s subsidiaries are or may become subject to significant state and federal regulations
Was: Rithm Capital’s subsidiaries, NRM, Newrez and Genesis, are or may become subject to significant state and federal regulations
22% rewrittenRisks Related to Origination and Servicing
Failure to successfully modify, resell or refinance early buyout loans or defaults of early buyout loans beyond expected levels may adversely affect our business, financial condition, liquidity and results of operations
20% rewrittenGeneral Risks
Our business could suffer if we fail to attract and retain management and other highly skilled personnel

All 120 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business

01We may not be able to successfully execute our business strategy, which could adversely affect our business, financial condition, cash flows and/or results of operationsNew
02Our business model exposes us to complex operational risks across multiple businesses and asset classesNew
03The valuation of certain of our assets and investments requires significant judgment and is based on various assumptions, and changes in, or the use of incorrect, valuation assumptions could materially adversely affect our business, financial condition, cash flows, results of operations and/or fee revenuesNew
04Our assumptions used in our valuations could differ materially from actual results. In some cases, the use of different estimates or assumptions could instead produce materially different fair values, which could have a material adverse effect on our consolidated financial position and/or results of operationsNew
05Many of our investments may be illiquid, and this lack of liquidity could significantly impede our ability to vary our portfolio in response to changes in economic and other conditions or to realize the value at which such investments are carried if we are required to dispose of them
06Government intervention in the mortgage and credit markets may create uncertainty, lead to increased volatility and impact liquidity of certain mortgage products and could adversely affect our business, financial condition and/or results of operationsNew
07The geographic distribution of the loans underlying, and collateral securing, certain of our investments subjects us to geographic real estate market risks, including environmental risks, which could adversely affect the performance of our investments, our results of operations and financial condition55% rewritten
08The value of our interests in MSRs, servicer advances, residential mortgage loans, RTLs and RMBS may be adversely affected by deficiencies in servicing and foreclosure practices, as well as related delays in the foreclosure process73% rewritten
09Our determination of how much leverage to apply to our investments may adversely affect our return on our investments and may reduce cash available for distribution
10A significant portion of our investments are not match funded, which may increase the risks associated with these investments
11Any hedging transactions that we enter into may limit our gains or result in losses
12Market and political conditions could negatively impact our business, results of operations, cash flows and/or financial condition41% rewritten
13Additionally, these factors could result in a decline in our AUM, lowering management fees and incentive income, an increase in the cost of financial instruments or executing transactions, lower or negative investment returns, reduced demand for assets held by our funds and increased investor redemptions
14The residential mortgage loans underlying the securities we invest in and the loans we originate and/or directly invest in are subject to delinquency, foreclosure and loss, which could result in losses to us32% rewritten
15Under current market conditions, it is likely that some of these loans will have current LTV ratios in excess of 100%, meaning the amount owed on the loan exceeds the value of the underlying real estateNew
16We are not restricted from dealing with any particular counterparty or from concentrating any or all of our transactions with a few counterparties, and we have counterparty concentration risk in certain of our financing partners and subservicersNew
17Moreover, we are party to repurchase agreements with a limited number of counterparties. If any of our counterparties elected not to renew our repurchase agreements, we may not be able to find a replacement counterparty, which would have a material adverse effect on our financial condition
18Certain vendors we engage have operations in foreign jurisdictions that could be adversely affected by political, economic, regulatory or other conditionsNew

Risks Related to Origination and Servicing

19The servicing of residential mortgage loans subjects certain of our subsidiaries to various operational risks that could have a negative impact on our financial resultsNew
20Certain of our subsidiaries, including Newrez and Genesis, perform various mortgage and real estate related services and have origination and servicing operations, which entail borrower-facing activities and employing personnel30% rewritten
21Any of the foregoing risks, among others, could have a material adverse effect on our business, financial condition, results of operations and liquidity
22A substantial portion of our loan originations is sourced through correspondent sellers and disruptions in this channel could adversely affect our businessNew
23Failure to successfully modify, resell or refinance early buyout loans or defaults of early buyout loans beyond expected levels may adversely affect our business, financial condition, liquidity and results of operations22% rewritten
24Our ability to acquire and/or transfer MSRs may be subject to the approval of various third parties, and such approvals may not be provided on a timely basis or at all, or may be subject to conditions, representations and warranties and indemnities58% rewritten
25Servicer 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
26A failure to maintain minimum servicer ratings could have an adverse effect on our business, financing activities, financial condition and/or results of operations
27There may be difficulties with integrating the loans underlying MSR acquisitions involving servicing transfers into the successor servicer’s servicing platform, which could have a material adverse effect on our results of operations, financial condition and liquidity28% rewritten
28We may become subject to fines or other penalties based on the conduct of mortgage loan originators and brokers that originate residential mortgage loans related to MSRs that we acquire, and the third-party servicers we may engage to subservice the loans underlying MSRs we acquire
29Our introduction of new underwriting programs involving digital assets could subject us to increased regulatory, market and operational risksNew
30Our servicing operations will become dependent on a single third-party SaaS provider, which exposes us to operational, technological and vendor concentration risksNew

Risks Related to Our Residential Transitional Lending Business

31There are certain risks associated with our Genesis business44% rewritten
32The RTLs in which we may invest may be subject to a greater risk of loss than conventional mortgage loansNew

Risks Related to Our Asset Management Business

33Our asset management business involves certain risks, which could adversely affect our business, financial condition and/or results of operations38% rewritten
34Competitive pressures in the asset management business could materially and adversely affect our business, financial condition and/or results of operations82% rewritten
35competition for investment opportunities and may reduce the size and duration of pricing inefficiencies that many alternative investment strategies seek to exploitNew
36We may be unable to successfully integrate either the Paramount or Crestline businesses and realize the anticipated benefits of either or both the Paramount Acquisition and the Crestline AcquisitionNew
37The Paramount Acquisition provides greater exposure to risks in the commercial real estate industryNew
38We may not have discovered undisclosed liabilities of each of Paramount or Crestline during our due diligence processesNew
39All of the assets acquired in the Paramount Acquisition (the “Paramount Assets”) are located in New York City and San Francisco, and adverse economic or regulatory developments in these areas could negatively affect our results of operations and/or our financial conditionNew
40Rithm may be unable to renew leases, lease currently vacant space or vacating space on favorable terms or at all as leases expire, which could adversely affect its value and negatively affects our results of operations and/or financial conditionNew
41Joint venture partners in 712 Fifth Avenue, One Market Plaza and 300 Mission Street have forced sale rights as a result of which we may be forced to sell these assets to third parties at times or prices that may not be favorable to usNew
42The Paramount Assets are exposed to risks associated with property redevelopment and repositioning that could adversely affect itNew
43We could experience periods of rapid growth and significant declines in AUM, which place significant demands on our legal, compliance, accounting, risk management, administrative and operational resources
44Addressing the matters described above may require us to incur significant additional expenses and to commit additional senior management and operational resources, even if we are experiencing declines in AUM
45Our sponsorship of and investment in Rithm Acquisition Corp. may expose us to increased risks and liabilitiesNew

Risks Related to Our Investment Portfolio

46We do not have legal title to the MSRs underlying our Excess MSRs or certain of our servicer advance investments
47Our investments in real estate and other securities are subject to changes in credit spreads, as well as available market liquidity, which could adversely affect our ability to realize gains on the sale of such investments
48Prepayment rates on our residential mortgage loans and those underlying our real estate and other securities may adversely affect our profitability72% rewritten
49yields on the assets that were prepaid. In addition, the market value of our loans and real estate and other securities may, because of the risk of prepayment, benefit less than other fixed-income securities from declining interest ratesNew
50We are subject to risks related to securitization of any loans originated and/or serviced by our subsidiaries40% rewritten
51Rithm Capital and third-party co-investors, through a joint venture entity, Advance Purchaser, have agreed to purchase all future arising servicer advances from a certain third-party servicer under certain residential mortgage servicing agreementsNew
52Certain of our third party servicers have in the past and may in the future trigger termination events or events of default under some PSAs underlying certain MSRs with respect to which we are entitled to the base fee component or Excess MSRs37% rewritten
53Our ability to exercise our cleanup call rights may be limited or delayed if a third party contests our ability to exercise our cleanup call rights, if the related securitization trustee refuses to permit the exercise of such rights, or if a related party is subject to bankruptcy proceedings
54Our consumer loan portfolio generally has a higher degree of risk of default than other loans70% rewritten
55Our SFR business is subject to numerous risks, including risks related to adverse economic, regulatory or environmental conditions, or other events, which may have an impact on the value of our properties or our operating resultsNew
56We face risks associated with the operation of mixed-use commercial properties, which may impact our operating results48% rewritten

Risks Related to the Financial Markets and Our Regulatory Environment

57Interest rate fluctuations and shifts in the yield curve may cause losses
58A prolonged economic slowdown, a lengthy or severe recession, sustained inflationary pressures or declining real estate values could harm our operations
59Maintenance of our 1940 Act exclusion imposes limits on our operations80% rewritten
60Rapid changes in the values of our assets may make it more difficult for us to maintain our qualification as a REIT or our exclusion from the 1940 Act
61Certain of our subsidiaries are registered as investment advisers under the Advisers Act, which could impose limits on our operations. Additionally, our investment advisory business is subject to additional significant regulatory oversight, which could impose limits on our operations
62Any of these outcomes could materially and adversely affect our reputation, business, financial condition, prospects, liquidity and/or results of operations58% rewritten
63Certain of our subsidiaries have been and are subject to federal and state regulatory matters and other litigation, which may adversely impact us47% rewritten
64Mortgage servicing is heavily regulated at the U.S. federal, state and local levels, and transfers of MSRs may not be approved by the requisite regulators
65Certain jurisdictions require licenses to purchase, hold, enforce or sell residential mortgage loans and/or MSRs, and we may not be able to obtain and/or maintain such licenses49% rewritten
66Regulatory scrutiny regarding foreclosure processes could lengthen foreclosure timelines, which could increase advances and materially and adversely affect our business, financial condition, results of operations and liquidity
67The Dodd-Frank Act affects almost every aspect of the U.S. financial services industry, including certain aspects of the markets in which we operate and imposes regulations on us and how we conduct our business
68Even requirements that are not directly applicable to us may still increase our costs of entering into transactions with the parties to whom the requirements are directly applicable
69The federal conservatorships of Fannie Mae and Freddie Mac and related efforts, along with any changes in laws and regulations affecting the relationship between these agencies and the U.S. government, may adversely affect our business
70Certain of Rithm Capital’s subsidiaries are or may become subject to significant state and federal regulations25% rewritten
71Failure of Rithm Capital’s subsidiaries, NRM and Newrez, to obtain or maintain certain licenses and approvals required for NRM and Newrez to purchase and own MSRs could prevent us from purchasing or owning MSRs, which could limit our potential business activities
72Legislation that permits modifications to the terms of outstanding loans may negatively affect our business, financial condition, liquidity and results of operations
73Risk retention regulations could adversely affect our business
74Regulatory changes in jurisdictions outside the U.S. could adversely affect our business
75Private litigation could result in significant legal and other liabilities and reputational harm, which could materially adversely affect our business, financial condition or results of operations

Risks Related to Our Financing Arrangements

76The agreements governing our indebtedness place restrictions on us and our subsidiaries, reducing operational flexibility and creating default risks
77The lenders under our financing agreements may elect not to extend financing to us, which could quickly and seriously impair our liquidity43% rewritten
78The financing sources under our servicer advance financing facilities may elect not to extend financing to us or may have or take positions adverse to us, which could quickly and seriously impair our liquidity
79We may not be able to finance our investments on attractive terms or at all, and financing for interests in MSRs or servicer advance receivables may be particularly difficult to obtain
80The non-recourse long-term financing structures we use expose us to risks, which could result in losses to us
81Our ability to borrow may be adversely affected by the suspension or delay of the rating of the notes issued under certain of our financing facilities by the credit agency providing the ratings
82Representations and warranties made by us in our collateralized borrowings, including our CLOs, and loan sale agreements may subject us to liability

Risks Related to Our Taxation as a REIT

83Qualifying as a REIT involves highly technical and complex provisions of the Internal Revenue Code
84Our failure to qualify as a REIT would result in higher taxes and reduced cash available for distribution to our stockholders
85Our failure to qualify as a REIT would cause our stock to be delisted from the NYSE
86The failure of assets subject to repurchase agreements to qualify as real estate assets could adversely affect our ability to qualify as a REIT
87The failure of our Excess MSRs to qualify as real estate assets or the income from our Excess MSRs to qualify as mortgage interest could adversely affect our ability to qualify as a REIT
88Dividends payable by REITs do not qualify for the reduced tax rates available for some “qualified dividends.”
89REIT distribution requirements could adversely affect our liquidity and our ability to execute our business plan
90We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them
91Other debt instruments that we may acquire, including consumer loans, may be issued with, or treated as issued with, original issue discount. Those instruments would be subject to the original issue discount accrual and income computations that are described above with regard to Excess MSRs
92We may be unable to generate sufficient cash from operations to pay our operating expenses and to pay distributions to our stockholders
93The stock ownership limit imposed by the Internal Revenue Code for REITs and our certificate of incorporation may inhibit market activity in our stock and restrict our business combination opportunities
94Even if we remain qualified as a REIT, we may face other tax liabilities that reduce our cash flow
95Complying with the REIT requirements may negatively impact our investment returns or cause us to forgo otherwise attractive opportunities, liquidate assets or contribute assets to a TRS
96Complying with the REIT requirements may limit our ability to hedge effectively74% rewritten
97Distributions to tax-exempt investors may be classified as unrelated business taxable income
98The “taxable mortgage pool” rules may increase the taxes that we or our stockholders may incur and may limit the manner in which we effect future securitizations
99Uncertainty exists with respect to the treatment of TBAs for purposes of the REIT asset and income tests, and the failure of TBAs to be qualifying assets or of income/gains from TBAs to be qualifying income could adversely affect our ability to qualify as a REIT
100The tax on prohibited transactions will limit our ability to engage in transactions that would be treated as prohibited transactions for U.S. federal income tax purposes
101Liquidation of assets may jeopardize our REIT qualification or create additional tax liability for us
102Changes to tax laws could materially and adversely affect us and our stockholders

Risks Related to Our Stock

103Your percentage ownership in us may be diluted in the future
104There can be no assurance that the market for our stock will provide you with adequate liquidity
105Sales or issuances of shares of our common stock could adversely affect the market price of our common stock
106We may incur or issue debt or issue equity, which may negatively affect the market price of our common stock
107We have not established a minimum distribution payment level for our common stock, and we cannot assure you of our ability to pay distributions in the future75% rewritten
108We may in the future choose to make distributions in our own stock, in which case you could be required to pay income taxes in excess of any cash distributions you receive
109An increase in market interest rates may have an adverse effect on the market price of our common stock
110Provisions in our certificate of incorporation and bylaws and of Delaware law may prevent or delay an acquisition of our company, which could decrease the market price of our common stock
111ERISA may restrict investments by plans in our common stock

General Risks

112Our failure to appropriately manage or address conflicts of interest could damage our reputation and adversely affect our business, financial condition and results of operations
113Increased focus on sustainability, including environmental, social and governance (ESG) issues and climate change and related regulations, may adversely affect our business and financial results and damage our reputation
114The development and use of AI technology could lead to legal or regulatory actions, harm our reputation, or have a significant negative impact on our business47% rewritten
115Unfavorable global economic and political conditions could adversely affect our business, financial condition or results of operations26% rewritten
116Cybersecurity incidents and technology disruptions or failures could damage our business operations and reputation, increase our costs and subject us to potential liability
117We depend on counterparties and vendors to provide certain services, which subjects us to various risks
118We have engaged and may in the future engage in a number of acquisitions and we may be unable to successfully integrate the acquired assets and assumed liabilities in connection with such acquisitions
119We are subject to significant competition, and we may not compete successfully
120Our business could suffer if we fail to attract and retain management and other highly skilled personnel20% rewritten

Other Rithm Capital 10-Ks

FY2024 10-K risk factors
116 risks
Rithm Capital relies heavily on mortgage servicing rights, asset management growth including Sculptor, leverage, and financing counterparties.
Filed Feb 18, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.