ONITY GROUP INC. 8-K

What Happened

• On April 30, 2026 Onity Group Inc., through its unit Onity Mortgage Corporation (OMC), amended agreements with Finance of America Reverse LLC (FAR) to sell OMC’s reverse mortgage servicing rights (MSRs) and certain reverse originations assets. The MSRs sold consist of approximately 20,000 Ginnie Mae HECM loans with an unpaid principal balance (UPB) of about $5.1 billion as of March 31, 2026. The transaction is expected to close in Q3 2026, subject to regulatory approvals and customary closing conditions. On May 5, 2026 the company also issued a press release with its results for the quarter ended March 31, 2026.

Key Details

• Assets being sold: ~20,000 HECM loans with $5.1 billion UPB (as of 3/31/2026).
• Estimated proceeds: $105–115 million in cash before transaction costs, warehouse repayments and adjustments; expected net proceeds of $70–80 million after those items.
• Employee and operations: FAR will acquire OMC’s pipeline at closing and expects to assume certain U.S. reverse-originations employees in May 2026 and more in July 2026. OMC will discontinue reverse originations on closing except for recapture activity for any MSRs not transferred.
• Servicing arrangement: OMC will serve as subservicer under a three-year agreement with automatic one‑year renewal unless FAR gives 180 days’ notice prior to expiry.

Why It Matters

• The deal would convert a large servicing asset base into immediate cash (expected net $70–80M), which could meaningfully affect Onity’s liquidity and capital allocation.
• Selling the MSRs reduces Onity’s servicing revenue and origination activities while preserving a servicing role via the subservicing agreement, so future operating income and staffing will likely shift.
• The transaction is conditional on regulatory approval and post‑closing adjustments, so timing and final proceeds could change; investors should watch closing progress and the company’s upcoming quarterly disclosures for more financial detail.