Q1 2025 Mr. Cooper Group Inc Pre-Recorded Earnings Call

Mike Weinberg, President and Curt Johnson, Executive Vice President and CFO.

Unknown Executive: They are Jay Bray, Chairman and CEO, Mike Weinbach, President, and Kurt Johnson, Executive Vice President and CFO.

Speaker Change: This morning, we'll be reviewing the company's financial performance for the first quarter 2025, you can find the slides accompanying our remarks on our Investor relations webpage at investors that Mr. Cooper Group Dot com.

Unknown Executive: This morning, we'll be reviewing the company's financial performance for the first quarter 2025.

Unknown Executive: You can find the slides accompanying our remarks on our investor relations web page at investors.mrcoopergroup.com. As a reminder, we may refer to non-GAAP measures, which are reconciled to GAAP results in the appendix to the slide. Also, we may make forward-looking statements which you should understand could be affected by risk factors that we've identified in our 10-K and other SEC file.

Speaker Change: As a reminder, we may refer to non-GAAP measures, which are reconciled to GAAP results in the appendix to the slide deck.

Speaker Change: Also we may make forward looking statements, which you should understand could be affected by risk factors that we've identified in our 10-K and other SEC filings, we are not undertaking any commitment to update these statements if conditions change.

Unknown Executive: We are not undertaking any commitment to update these statements, if conditions With that, I'll turn it over to Jay.

Jay: With that I'll turn it over to Jay.

Jay: Good morning, everyone.

Jay: Look forward to sharing our thoughts on our first quarter financial results, but first I want to note that due to the pending combination with rocket, which was announced on March 31.

Jay Bray: Morning, everyone. We look forward to sharing our thoughts on our first quarter financial results.

Jay Bray: But first, I want to note that due to the pending combination with Rocket, which was announced on March 31st, we will not be taking questions. I'll start my comments with some personal thoughts on the combination with rock. This transaction is about creating a scaled homeownership. By pooling our talent, data, and technology, we are going to totally reimagine the homeownership journey from start to finish and harness the transformative power of AI to bring our customers a truly amazing For our investors, the industrial logic is compelling. And this transaction presents the opportunity for our shareholders to participate in the upside of the combined And Mr. Cooper, we've worked for years to perfect our servicing platform, which is digital, efficient, and highly scalable.

Jay: We will not be taking questions. This morning.

Jay: I'll start my comments with some personal thoughts on the combination with rocket.

Jay: This transaction is about creating a scaled homeownership experience.

Jay: Pooling, our talent data and technology, we are going to totally re imagined the homeownership journey from start to finish and harness the transformative power of AI to bring our customers a truly amazing experience.

Jay: For our investors the industrial logic is compelling and this transaction presents the opportunity for our shareholders to participate in the upside of the combined company.

Speaker Change: And Mr. Cooper, we've worked for years to perfect our servicing platform, which is digital efficient and highly scalable our multi decade track record of customer growth and resilient profitability speaks for itself.

Jay Bray: Our multi-decade track record of customer growth and resilient profitability speaks for itself. as does the accolades for operational excellence we've earned from investors and clients.

Speaker Change: As does the accolades for operational excellence, we've earned from investors and clients now.

Now by combining our platform with rockets iconic brand and marketing capabilities, we're creating a fully integrated homeownership platform with unmatched capabilities.

Jay Bray: Now, by combining our platform with Rocket's iconic brand and marketing capabilities, we're creating a fully integrated home ownership platform with unmatched capability.

Speaker Change: Finally, as I've shared before the two cultures are very complementary and integration teams are already synced in planning for how to bring our business together once the transaction closes.

Jay Bray: Finally, as I've shared before, the two cultures are very complimentary and integration teams are already synced and planning for how to bring our business together once the transaction I could not be more thrilled to be part of this joint effort to usher in the industry's And with that, I'm going to start on slide three with a review of first quarter highlights.

Speaker Change: I cannot be more thrilled to be part of this joint effort to usher in the industry's future.

Speaker Change: And with that I'm going to start on slide three with a review of our first quarter highlights then I'll turn it over to Mike to take you through a more detailed discussion of operating results and kirt will wrap up with financials.

Jay Bray: Then I'll turn it over to Mike to take you through a more detailed discussion of operating results, and Kurt will wrap up with financials. In summary, this was another solid quarter demonstrating the power of our at scale platform to produce consistent recurring and predictable results. ROTC was 16.8 percent, up from 15.8 percent last quarter as we are seeing the benefits from the Flagstar acquisition start to flow through and I'm really pleased that we've moved so quickly into the 16 to 20 percent guidance range we shared with you just last quarter. The key things behind this performance remain the same.

Speaker Change: In summary, this was another solid quarter, demonstrating the power of our at scale platform to produce consistent recurring and predictable results.

Speaker Change: CE was 16, 8%.

Speaker Change: Up from 15, 8% last quarter as we are seeing the benefits from the flagstar acquisition start to flow through and I'm really pleased that we've moved so quickly into the 16% to 20% guidance range. We shared with you just last quarter.

Speaker Change: The key things behind this performance remained the same.

Speaker Change: Operating leverage fee income and strong execution in our origination segment.

Jay Bray: Operating leverage, fee income, and strong execution in our origination.

Speaker Change: All of this reflecting the investments we've made in technology and operations over many years.

Jay Bray: All of this reflecting the investments we've made in technology and operations over many That and the talent and great work of our people to whom I will once again say thank you for what you have built.

Speaker Change: And the talent and great work of our people to whom I will once again say thank you for what you've built.

Speaker Change: The balance sheet is in great shape with a super strong capital ratio of 25, 5%.

Jay Bray: The balance sheet is in great shape with a super strong capital ratio of 25 and a half. Liquidity is already backed up to $3.9 billion and consistent performance on our MSR hedge and delinquencies declining in the quarter to 1.1% which speaks to the sterling asset quality of our Balance sheet strength is non-negotiable for industry leaders. And it's especially important during periods of elevated uncertainty, such as the markets are currently experiencing.

Speaker Change: <unk> is already back up to $3 9 billion and consistent performance on our MSR hedge and delinquencies declining in the quarter to one 1%, which speaks to the sterling asset quality of our book.

Speaker Change: Balance sheet strength is non negotiable for industry leaders and it's especially important during periods of elevated uncertainty such as the markets are currently experiencing.

Speaker Change: Turning to servicing.

Speaker Change: <unk> was the biggest acquisition in our history and I am pleased to report that since closing the transaction last quarter. We have now onboard all of our customers and team members and we're right on schedule with integration.

Jay Bray: Turning to servicing, Flagstar was the biggest acquisition in our history, and I'm pleased to report that since closing the transaction last quarter, we have now onboarded all our new customers and team members, and we're right on schedule with integration. Thanks to growth, operating leverage, and low speeds, servicing generated $332 million in pre-tax income at the high end of our guidance. Originations outperformed our guidance with $53 million in pre-tax. I'd call out very strong momentum in home equity loans and cash out refunds. which we view as a massive long-term growth opportunity regardless of the interest rate environment.

Speaker Change: Thanks to growth operating leverage and low speeds servicing generated $332 million in pre tax income at the high end of our guidance range.

Speaker Change: Originations outperformed our guidance with $53 million in pre tax income.

Speaker Change: I called out very strong momentum in home equity loans and cash out refinances, which we view as a massive long term growth opportunity regardless of the interest rate environment.

Speaker Change: Last quarter, we earned the prestigious sharp Gold award from Freddie Mac, recognizing the operational excellence of our servicing platform.

Jay Bray: Last quarter, we are in the prestigious Sharp Gold Award for Freddie recognizing the operational excellence of our servicing. In this quarter, we were thrilled to win Fannie Mae Star Award. In fact, we were the only servicer in the country to earn star recognition in all three categories for this. General Servicing, Solution Delivery, and Timeline Management. This recognition is important because it illustrates the key success factor behind our long term growth, namely, the value we deliver as a servicer to our business partners, including agency, government, and private investors, and our subservicing We deliver this value because we wake up every morning asking the question, how do we earn and sustain our partner's trust?

And this quarter, we were thrilled to win Fannie Mae Star Award in fact, we were the only servicer in the country to earn star recognition in all three categories for this award general servicing solution delivery and timeline management.

Speaker Change: This recognition is important because it illustrates the key success factor behind our long term growth, namely the value we deliver as a service to our business partners, including agency government and private investors and our sub servicing clients we.

Mike: We deliver this value because we wake up every morning, asking the question how do we earn and sustain our partners Trust and you see the result of our focus and these operational scorecards and with that I'll turn it over to Mike.

Jay Bray: and you see the result of our focus in these operational score.

Mike Weinbach: And with that, I'll turn it over to Mike. Thanks, Jay. And good morning, everyone. If you'll turn to slide four, I'll start with the servicing segment, where we reported pre tax income of $332 million in the first quarter, which was up 22% year over year. This was at the high end of our guidance range, in part due to slower than expected CPR speeds and lower amortization. Earnings also benefited from operating If you look year over year servicing operating expenses declined as a percentage of the portfolio by 136 days. And that's even before we've fully integrated the Flagstar operation onto our platform.

Mike: Thanks, Jay and good morning, everyone.

Mike: If youll turn to slide four I'll start with the servicing segment, where we reported pretax income of $332 million in the first quarter, which was up 22% year over year.

Mike: It was at the high end of our guidance range in part due to slower than expected CPR speeds and lower amortization.

Mike: Earnings also benefited from operating leverage.

Mike: If you look year over year servicing operating expenses declined as a percentage of the portfolio by 136 basis points and that's even before we fully integrated the flagstar operation onto our platform.

Mike: Jay mentioned that Flagstar was the company's largest acquisition and the Onboarding went exceptionally well as measured by customer delight metrics such as speed to answer abandonment rate in first call resolution, which have remained consistently at top of the industry levels.

Mike Weinbach: Jay mentioned that Flagstar was the company's largest acquisition, and the onboarding went exceptionally well as measured by customer delight metrics such as speed to answer, abandonment rate, and first call resolution, which have remained consistently atop the industry level. Obviously, we have a tremendous amount of experience with large portfolio transfers. And I'd add that we're constantly improving our processes, which has helped make this a very smooth and welcoming experience for our new customers. Also contributing to our strong performance is Agent IQ, which we highlighted for you last quarter following the rollout to the 1400 agents in our call.

Speaker Change: Obviously, we have a tremendous amount of experience with large portfolio transfers and I'd add that we're constantly improving our processes, which has helped make this a very smooth and welcoming experience for our new customers.

Speaker Change: Also contributing to our strong performance as agent IQ.

Speaker Change: We highlighted for you last quarter following the rollout to the 1400 agents in our call centers.

Speaker Change: As a reminder, this AI powered tools synthesizes the insights gleaned from millions of customer interactions and puts relevant prompts on the screen, allowing agents to empathetic Lee focus on the customer while providing answers quickly and efficiently.

Mike Weinbach: As a reminder, this AI powered tool synthesizes the insights gleaned from millions of customer interactions and puts relevant prompts on the screen, allowing agents to empathetically focus on the customer while providing answers quickly and efficiently. With respect to AI in the call center, we're only scratching the surface of what's possible in terms of customer experience and efficiency. The total portfolio was down slightly in the quarter ending at one and a half trillion, which is equivalent to just over 6.4 million customers. As we pointed out last quarter, we shifted about $60 billion in subservice loans to other servicers, as was contemplated in the Flagstar trend.

Speaker Change: With respect to AI in the call Center, we're only scratching the surface of what's possible in terms of customer experience and efficiency.

Speaker Change: The total portfolio was down slightly in the quarter ending at $1 five trillion, which is equivalent to just over $6 4 million customers.

Speaker Change: As we pointed out last quarter, we shipped it about $60 billion and sub service loans to other servicers as was contemplated in the flagstar transaction.

Speaker Change: Outside of these D. Boardings are sub servicing portfolio grew organically by 2% quarter over quarter as we are growing with our clients, which include some of the strongest originators and investors in the industry.

Mike Weinbach: Outside of these deboardings, our subservicing portfolio grew organically by 2% quarter over quarter, as we're growing with our clients, which includes some of the strongest originators and investors in the I'd add that we're also in advanced discussions with potential new clients and optimistic about winning new books of business. Our own portfolio was roughly flat quarter over quarter at just over $730 billion. We benefited from strong volumes in the Correspondent Channel and closed roughly $7 billion in bulk equity.

Speaker Change: I'd add that we're also in advanced discussions with potential new clients and optimistic about winning new books of business.

Speaker Change: Our own portfolio was roughly flat quarter over quarter at just over 730 billion.

We benefited from strong volumes in the correspondent channel and closed roughly $7 billion in bulk acquisitions.

We're continuing to analyze and bid selectively on pools that meet our yield targets.

Mike Weinbach: are continuing to analyze and bid selectively on pools that meet our yield So now let's move on to slide five and talk about originations, where we generated 53 million in EBT, which was slightly above our guidance rate. Volumes were strong in the Correspondent Channel, where we've made a number of investments and operational enhancements over the last 18 months. During March, we were the number four originator in this channel.

Speaker Change: So now let's move on to slide five and talk about originations, where we generated $53 million in EBT, which was slightly above our guidance range.

Speaker Change: Volumes were strong in the correspondent channel, where we've made a number of investments and operational enhancements over the last 18 months during.

Speaker Change: During March we were the number four originator in this channel.

Speaker Change: In the DTC channel, we're enjoying very strong momentum with cash outs and second liens.

Mike Weinbach: in the DTC channel. We're enjoying very strong momentum with cash outs and secondly Cashouts made up 46% of volume, up from 39% last quarter, while second liens grew from 12% to 21%.

Speaker Change: Cash outs made up 46% of volume up from 39% last quarter, while second liens grew from 12% to 21%.

Putting this in context of customer benefits during the quarter, we helped over 9000 customers access equity in their homes and help nearly 2000 customers reduce their monthly payments or purchase a new home.

Mike Weinbach: Putting this in context of customer benefits. During the quarter, we helped over 9000 customers access equity in their homes, and help nearly 2000 customers reduce their monthly payments or purchase a new home. Cash apps and second liens are turning out to be a very popular method for customers to tap the equity in their homes. And as you know, they typically use this liquidity for debt consolidation, home improvements and other major expenses. Regardless of the use, these products cost much less than those credit cards, and that's even before considering the tax deductibility of mortgage interest. So you can make a strong argument that this is one of the most sensible ways for homeowners to access liquidity.

Speaker Change: Cash outs and second liens are turning out to be a very popular method for customers to tap the equity in their homes and as you know they typically is that liquidity for debt consolidation home improvements and other major expenses.

Speaker Change: Regardless of the use of these products costs much less than those credit cards and thats, even before considering the tax deductibility of mortgage interest.

Speaker Change: So you can make a strong argument that this is one of the most sensible ways for homeowners to access liquidity.

Speaker Change: We believe there's a long runway to fully meet this demand with 94% of our customers, having at least 20% equity in their homes and our customers total equity in the neighborhood of 700 billion.

Mike Weinbach: We believe there's a long run way to fully meet this demand with 94% of our customers having at least 20% equity in their homes and our customers total equity in the neighborhood of $700 billion. Just to update you, our refinance recapture rate was a little over 50% in the quarter. And bear in mind, we don't count second liens in this ratio with some of our peers. Clearly, the current environment offers limited opportunity for rate and term refis, but our DTC team is very nimble, and with even brief rallies and rates, we can move quickly to help customers save money, as you saw in the third quarter last year.

Speaker Change: Just to update you our refinance recapture rate was a little over 50% in the quarter and bear in mind, we don't count second liens and this ratio with some of our peers do.

Speaker Change: Clearly the current environment offers limited opportunity for rate and term refis, but our DTC team was very nimble and with even brief rallies in rates. We can move quickly to help customers save money as you saw in the third quarter last year.

Speaker Change: As of quarter end, 21% of our portfolio had note rates of 6% or higher which is indicative of a sizeable opportunity when rates next rallied.

Mike Weinbach: As of quarter end, 21% of our portfolio had note rates of 6% or higher, which is indicative of a sizable opportunity when rates next round.

Speaker Change: I'll wrap up here by adding to Jay's comments about the excitement we feel about joining forces with rocket.

Mike Weinbach: I'll wrap up here by adding to Jay's comments about the excitement we feel about joining forces with ROC.

Speaker Change: With rockets iconic brand and marketing skills, its leading J D power service levels, it's highly scalable origination platform and our shared commitment to investing in AI digital and other technologies.

Mike Weinbach: With Rocket's iconic brand and marketing skills, its leading JD Power service levels, its highly scalable origination platform, and our shared commitment to investing in AI, digital and other technologies, there's so much more we'll be able to do for our customers over time, whether it's through refis, second liens, purchase mortgages, title insurance or closing services. We think the combination will create a true end to end home ownership ecosystem and an incredibly valuable platform with customers for life.

Speaker Change: There is so much more will be able to do for our customers over time, whether it's through refined second liens purchase mortgages title insurance or closing services.

Speaker Change: We think the combination will create a true end to end homeownership ecosystem and an incredibly valuable platform with customers for life.

Kurt: With that I'll turn the call over to Kurt.

Kurt Johnson: With that, I'll turn the call over to Kurt. Thanks, Mike.

Kurt: Thanks, Mike and good morning, everyone I'll start on slide six and go through our financials.

Kurt Johnson: Good morning, everyone. I'll start on slide six and go through our financials. To summarize, net income was $88 million, which included $255 million in pre-tax operating earnings, offset by an $82 million negative MSR mark net of hedges, and adjustments of $68 million. My comment on origination and servicing segment earnings, and I'll add that corporate overhead segment expenses of $51 million were in line with our guidance from last quarter.

Kurt: To summarize net income was $88 million, which includes $155 million and pre tax operating earnings offset by an $82 million negative MSR Mark net of hedges.

Kurt: And adjustments of 68 million.

Kurt: My comment on origination and servicing segment earnings and all the corporate overheads segment expenses of $51 million were in line with our guidance from last quarter.

Let me start by I'm talking readjustments.

Kurt Johnson: Let me start by unpacking the adjustment. First, there were 26 million in transaction and transition charges primarily related to the Flagstar integration. Second, as you recall last quarter, we incurred a charge for a legal ruling. This quarter, we took an additional $33 million charge associated with the legal fees, which closes out all liabilities stemming from this ruling. Finally, there were some miscellaneous adjustments associated with losses on equity investments, a slight operating loss from the Flagstar TPO platform, which we sold at the end of the quarter, and a positive reserve release related to HomePoint acquisition.

Kurt: There were $26 million and transaction and transition charges, primarily related to the flagstar integration.

Kurt: Second as you recall last quarter, we incurred a charge for a legal ruling.

Kurt: This quarter, we took an additional $33 million charge associated with the legal fees, which closes on all liabilities stemming from this ruling.

Kurt: Finally, there were some miscellaneous adjustments associated with losses on equity investments.

Kurt: <unk> operating loss from the Flagstar PPO platform, which we sold at the end of the quarter.

Kurt: And a positive reserve release related to home point acquisition.

Kurt: Full details are as always listed in the appendix to todays slide deck.

Kurt Johnson: Full details are, as always, listed in the appendix to today's slide deck. Turning to the mark to market line, we mark down the MSR to reflect falling interest rates and expectations for higher CPRs, leading to a quarter end valuation of 155 basis points of UPV or 5.4 multiple of the base servicing. Offsetting this loss were $209 million in hedge gains, which equates to a 72% coverage ratio, slightly below our 75% target. We're extremely pleased with the hedge's consistent performance, which over the last eight quarters has contributed to stable and predictable results. Our target hedge remains 75%.

Kurt: Turning to the Mark to market line, we marked down the MSR to reflect falling interest rates and expectations for higher CPE ours.

Kurt: Leading to a quarter on valuation of 135 basis points of view P b or $5 for a multiple of the base servicing strip.

Kurt: Offsetting this loss were $209 million in hedge gains, which equates to 72% coverage ratio slightly below our 75% target.

Kurt: We're extremely pleased with the hedges consistent performance with over the last eight quarters. It has contributed to stable and predictable results.

Kurt: Our target hedge remains 75%.

Kurt: Now if you'll turn to slide seven I'll briefly touch on asset quality.

Kurt Johnson: Now if you'll turn to slide 7, I'll briefly touch on asset quality. Our high quality mortgage portfolio continues to perform extremely well, with MSR delinquencies down by nine basis points to 1.1%. Low delinquencies reflect our thoughtful portfolio construction, which you can see in the high FICO scores and low LTV ratios for our customers, as well as our strong loss mitigation capacity, which is one of the key factors that Fannie and Freddie measure in their operational scorecards, and which was recognized in our winning the Sharp and Star Awards.

Kurt: Our high quality mortgage portfolio continues to perform extremely well with MSR delinquencies down by nine basis points to one 1%.

Kurt: Low delinquencies reflect our thoughtful portfolio construction, which you can see in the high FICO scores and low LTV ratios for our customers as well as our strong loss mitigation capacity, which was one of the key factors that Fannie and Freddie measure and the operational scorecards, and which was recognized in our winning with sharp and Star Awards.

Kurt: I'd like to call out our exceptional performance with Ginnie Mae loans, where delinquencies fell by 50 basis points for both FHA and VA loans significantly outperforming the industry.

Kurt Johnson: I'd like to call out our exceptional performance with J.D. May loans, where delinquencies fell by 50 basis points for both FHA and VA loans, significantly outperforming the industry. And I'd love to give kudos to our leaders in servicing and loss mitigation for helping our customers stay in their homes, as well as providing great results for our subservice and clients.

Kurt: I have to give kudos to our leaders and servicing and loss mitigation, we are helping our customers stay in their homes as well as providing great results for our sub servicing clients.

Kurt: Well, we don't try to forecast overall consumer credit cycles, we have deep experience managing delinquent portfolios. Additionally, we are extremely valuable capabilities in zone and Rushmore special servicing.

Kurt Johnson: We don't try to forecast overall consumer credit cycles. We have deep experience managing delinquent portfolios. Additionally, we have extremely valuable capabilities in Zome and Rushmore Special Services. If the environment turned more adverse, we believe Mr. Cooper and our investors would be extremely well protected.

Kurt: The environment turned more adverse we believe Mr Cooper and our investors would be extremely well protected.

Kurt: Turning to slide eight I'll end my remarks, with an update on our key balance sheet metrics.

Kurt Johnson: Turning to slide 8, I'll end my remarks with an update on our key balance sheet map. Liquidity ended the quarter at $3.9 billion, up from $3.4 billion in the fourth quarter as we used operating cash flow to pay down $350 million in MSR loans. It was nice to see liquidity rebound so quickly following the Flagstar acquisition, which speaks to our extremely robust cash flow, running an annual rate of nearly $1 billion in terms of steady state discretionary cash. At the same time, we upsized our borrowing capacity by $200 million and have begun renegotiating our existing MSR facilities to extend maturities through 2027.

Kurt: Liquidity ended the quarter at $3 $9 billion up from $3 4 billion in the fourth quarter as we used operating cash flow to pay down $350 million of MSR lines.

Kurt: It was nice to see liquidity rebound so quickly following the flagstar acquisition, which speaks to our extremely robust cash flow running at an annual rate of nearly $1 billion in terms of steady state discretionary cash flow.

Kurt: At the same time, we upsized, our borrowing capacity by $200 million and have begun renegotiating, our existing MSR facilities to extend maturities through 2027.

Kurt: Our capital ratio as measured by tangible net worth to assets ended the quarter at 25, 5% up from 24, 4% last quarter.

Kurt Johnson: Our capital ratio, as measured by Tangible Net Worth to Assets, ended the quarter at 25.5%, up from 24.4% last quarter. The increase was partially the result of a 21% decline in advances, which reflects typical seasonal trends. Tangible equity also benefited from strong earnings and the absence of stock repurchases during the quarter, which we suspended in advance of the rocket transaction.

Kurt: The increase was partially the result of a 21% decline in advances which reflects typical seasonal trends.

Kurt: Tangible equity also benefited from strong earnings and the absence of stock repurchases during the quarter, which was suspended in advance of the rocket transaction.

Kurt: Looking ahead, we do not expect to repurchase stock prior to the close the transaction, which we expect to occur in the fourth quarter of 2025 subject to approval of Mr. Cooper's shareholders and the satisfaction of other closing conditions, including customary regulatory approvals.

Kurt Johnson: Looking ahead, we do not expect to repurchase stock prior to the close of the transaction, which we expect to occur in the fourth quarter of 2025, subject to approval of Mr. Cooper shareholders and the satisfaction of other closing conditions, including customary regulatory approval.

Finally, I want to comment on our $500 million in senior notes maturing in February 2020, stocks, which are now callable at par.

Kurt Johnson: Finally, I want to comment on our $500 million in senior notes maturing in February 2026, which are now callable at par. Thanks to our strong capital and cash flow generation, we have the option to retire the notes early, which is an option that we are actively evaluating, and which should not have a material impact on our liquidity profile, given the cessation of our stock we purchased.

Kurt: Thanks to our strong capital and cash flow generation, we have the option to retire the notes early which is an option that we are actively evaluating and which should not have a material impact on our liquidity profile given the cessation of our stock repurchases.

Kurt: With that I'll close out our remarks. Thank you for your interest in Mr. Cooper.

Kurt Johnson: With that, I'll close out our remarks. Thank you for your interest in Mr. Cooper.