Mortgage originators are having a banner year, and the market for mortgage banking initial public offerings (IPOs) has been hot. We saw Rocket Companies (NYSE: RKT) go public in August through a normal offering and United Wholesale Mortgage prepare to go public this quarter via a special purpose acquisition company (SPAC). The Mortgage Bankers Association (MBA) forecasts that mortgage origination volume will hit $3.2 trillion this year, the highest since 2003.
Another mortgage company striking while the iron is hot is New Residential Investment (NYSE: NRZ). The company recently filed a confidential prospectus with the SEC to potentially spin off its mortgage and servicing arm. What does this mean for New Residential stockholders?
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New Residential changes its business model
New Residential has historically been an originator of mortgages that do not fall within the government’s qualified mortgage (QM) safe harbor. These loans would have