Here Is Why Rithm Is Buying an Asset Manager
It is no secret that things are tough in the mortgage market. The mortgage business is extremely cyclical, and right now mortgage originators are struggling as rising interest rates have choked off home buying and refinancing transactions have all but disappeared. Rithm Capital (NYSE: RITM) is a mortgage company that is outperforming its competitors due to a diversified business model. It recently agreed to buy an asset manager, which could help lesson its dependence on the volatile mortgage sector.
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Rithm Capital is a real estate investment trust (REIT) that owns several operating companies, largely in the mortgage industry. Rithm used to be known as New Residential but it changed its name to reflect is broadening focus. Rithm has been known primarily for its mortgage origination business. The company is also big in the mortgage-servicing business, both as an owner of servicing and as a sub-servicer. A servicer collects loan payments, sends funds to investors and issues mortgage statements to borrowers. Rithm also operates a business-purpose lender, a residential rental business, and other real estate related services.
Source Fool.com
