Key facts
- Onity reported third-quarter net income of $3.5 million, or 41 cents per diluted share, versus a $12.9 million loss in the second quarter.
- Adjusted pretax income was $30 million, up from $14 million in the prior quarter, and annualized adjusted return on equity rose to 19% from 9%.
- Servicing adjusted pretax income was $29 million, up from $12 million, while originations adjusted pretax income fell 15% to $24 million.
- Total servicing UPB reached $343 billion as of September 30, up 9% from a year earlier, with $24.7 billion in additions during the quarter.
- Onity repurchased 457,971 shares, or 6% of outstanding shares, lifting book value per share by $1.82 to $74.
- Keefe, Bruyette & Woods rated Onity an outperformer with a $55.00 target share price in a November 5, 2026 note.
Onity Group, the parent of Onity Mortgage and Liberty Reverse Mortgage, reported net income attributable to common stockholders of $3.5 million, or 41 cents per diluted share, for the third quarter of 2026, compared with a net loss of $12.9 million, or $1.53 per diluted share, in the second quarter. A year earlier, net income was $17.7 million, or $2.03 per diluted share.
Adjusted pretax income rose to $30 million from $14 million in the prior quarter, and annualized adjusted return on equity increased to 19% from 9%. The company said market volatility raised hedge costs and affected agency loan sales, producing an $11 million unfavorable pretax impact, or 95 cents per share after taxes, versus the second quarter.
Servicing generated $7 million in pretax income and $29 million in adjusted pretax income, up from $12 million in adjusted pretax income in the second quarter. Originations reported $24 million in both pretax and adjusted pretax income, down 15% from $28 million in adjusted pretax income in the prior quarter.
Total servicing additions were $24.7 billion during the quarter, lifting unpaid principal balance to $343 billion as of September 30, up 9% from a year earlier. Subservicing additions reached $53 billion, exceeding the company's full-year target. The refinance recapture rate was 57%, up 18 percentage points from the third quarter of 2025. Servicing advances fell 28% to $375 million, while owned forward servicing UPB rose 49% to $179 billion.
Onity repurchased 457,971 shares through September 30, or 6% of outstanding shares, adding $1.82 to book value per share. Book value per share was $74 at quarter's end, up $12 from a year earlier.
"Our third quarter results demonstrate the resilience of our balanced business and the progress we made to improve returns on a sequential quarter basis," said Glen Messina, Onity's chair, president and CEO. Messina said servicing profitability improved sequentially and more than offset weaker originations, and that the company expects to navigate the current interest rate cycle by relying on both businesses, which respond differently to market conditions.