Newrez cuts 123 employees after acquisition of servicing company

Newrez let go of over 100 employees in Colorado and Florida following the completion of its acquisition of Computershare Mortgage Services and affiliate Specialized Loan Servicing LLC.

Real estate investment trust Rithm Capital Corp, parent company of Newrez, bought the company for close to $720 million as a means to further expand its servicing presence. The deal was announced late last year and closed in early May. 

Soon after, the company let go of 123 employees affiliated with Computershare Mortgage and SLS, Worker Adjustment and Retraining Notifications notices filed May 2 in Colorado and Florida show.

Roles impacted include numerous executive positions, data analysts, client relations associates and mortgage loan processors. Those affected will be employed with Newrez until July 1, 2024 and "do not have bumping rights, and they are not represented by a union or covered by a collective bargaining agreement," both WARN notices said.

Newrez did not immediately respond to a request for comment regarding why they decided to reduce their newly added workforce. 

The integration of Computershare adds $149 billion in unpaid principal balance to the company. This includes $104 billion in third-party servicing to Newrez's portfolio, the company said in a recent press release. The acquisition of Computershare was financed through a mix of existing cash and available liquidity on the balance sheet, as well as additional MSR financing.

"This milestone marks another chapter in our history of strategic acquisitions to build a leading mortgage banking franchise – a core strategy of Rithm's growth as we scale and diversify as an alternative asset manager," said Michael Nierenberg, CEO of Rithm Capital, in a written statement.

The New York-based company posted net income of $261.6 million, equivalent to 54 cents per share in the first quarter. The mortgage originations and servicing segment at Rithm, the parent company of Newrez, brought in $311.9 million in net income during the quarter as loan production and fair value of MSRs both improved.

At the end of 2023, Rithm's headcount was approximately 6,166 employees, compared to approximately 9,030 in 2022, due to "rightsizing operations  in view of lower loan production volume," the REIT said in a proxy filing with the Securities and Exchange Commission.