FinTechMortgage

Mr. Cooper unveils digital mortgage plan

Tells investors that digital mortgage application is coming in 2018

Mr. Cooper, the nonbank formerly known as Nationstar, is about to join the growing list of mortgage lenders that are going digital.

In the last two years, a number of lenders announced plans to digitize their mortgage application process, following the lead of Quicken Loans, which rolled out its “Rocket Mortgage” in November 2015.

Since then, JPMorgan Chase, Wells FargoCaliber Home LoansUnited Wholesale MortgageGuild Mortgage, U.S. Bank, and others unveiled their own version of the digital mortgage.

Now, Mr. Cooper is going digital too.

The company revealed its plans to go digital in its third quarter earnings report, which was released Thursday morning.

In the earnings statement, the company said that it plans to roll out its digital mortgage application portal “in the first half of next year.” The company states that it believes the digital mortgage will help grow its business among both new and existing customers.

And the company revealed Thursday that it has more existing customers than it ever has before, thanks to boarding $128 billion in mortgage servicing so far this year, including $58 billion in the third quarter alone.

All in all, the company now has its largest servicing portfolio in history with $533 billion and 3.3 million customers.

So, the aim of the digital mortgage is to attract new customers for both purchase originations and refinances, and tapping its existing customer base for refinances as well.

As for the company’s financials, Nationstar reported net income of $7 million in the third quarter, an improvement over its net loss of $20 million in the second quarter.

For comparison, in the first quarter, Nationstar reported a GAAP net income of just $2 million, which was down substantially from $198 million in the fourth quarter of 2016.

“Nationstar continued to board new customers and grow both servicing and originations volume in the third quarter on the strength of our integrated business model and our focus on the customer,” said Jay Bray, CEO.

“We have boarded $128 billion in mortgage servicing this year while achieving solid operational results at 5 basis points in adjusted servicing profitability. We look forward to ending the year with over three million customers,” Bray continued. “Originations exceeded our target again this quarter with funded volume increasing 20%. We continue to focus on disciplined expense management even as we invest in our businesses, and we believe we have additional significant opportunities to drive further growth and efficiency over the long term.”

Broken down by segment, Nationstar’s originations segment posted $45 million GAAP pretax income or $46 million adjusted pretax income, which exceeded the company’s quarterly target of $40 million.

Additionally, Nationstar funded approximately $5.1 billion in loans in the third quarter, a 20% improvement over the second quarter, with 61% of the volume from the consumer direct channel.

The company’s servicing segment earned $15 million GAAP pretax income or $65 million adjusted pretax income. Nationstar said that its servicing profitability increased 11% quarter-over-quarter, driven by the largest portfolio in the company’s history.

Along with having the largest portfolio in its history, Nationstar’s portfolio has never performed better either. The company’s portfolio delinquency rate is 3.2%, the lowest it’s ever been.

Additionally, the Xome segment posted $11 million GAAP pretax income or $12 million adjusted pretax income for the third quarter. Xome achieved property sales of 2,772, while maintaining REO inventory as third-party inflows offset sales volume, the company said.

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