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Nationstar Mortgage Announces Second Quarter 2012 Financial Results

Stocks in this article: NSM

As a result of the favorable origination environment, pre-tax operating income for the segment was $61.1 million, versus $41.8 million in the prior quarter and $3.4 million in the year-ago quarter. Segment AEBITDA was up 50% over the previous quarter and nearly 1384% year-over-year to $63.8 million.

Aurora Acquisition

In June, Nationstar closed on the acquisition of the over $63 billion Aurora servicing portfolio, which was previously announced in March. The transaction demonstrates the power of Nationstar’s platform that includes a strong capital position, the ability to service agency and non-agency loans, and strong relationships with the GSEs.

The Aurora portfolio presents the opportunity for Nationstar to increase capacity, improve loan performance and drive originations volume through recapture, further enhancing its economic value.

Agreement with ResCap

On May 14, Nationstar signed a definitive agreement to acquire certain residential mortgage servicing assets and other assets from Residential Capital, LLC and related entities (“ResCap”) in connection with ResCap’s proposed asset sale under the U.S. Bankruptcy Code. Nationstar expects to acquire $371 billion in primary mortgage servicing rights and subservicing contracts as measured by UPB.

On June 19, Nationstar was named the ‘stalking horse’ bid by the bankruptcy court, and in connection with being named the ‘stalking horse’ bidder, Nationstar and ResCap amended and restated the definitive purchase agreement as of June 28. Upon closing, expected to occur in January 2013, subject to the auction process, court and other regulatory approvals, the acquisition would result in an estimated pro-forma UPB of $550 billion.

“While the acquisition of the ResCap portfolio will be one of our primary objectives for the second half of 2012, we will continue to explore and pursue other accretive portfolio acquisitions from our $300 billion plus pipeline,” said Mr. Bray.

Detailed information on the assets being acquired and the Section 363 asset sale process are included in Nationstar’s 8-K filings which are available at Information on, or accessible through, our website is not part of this release.


This disclaimer applies to every usage of “Adjusted EBITDA” or “AEBITDA” in this presentation. Adjusted EBITDA is a key performance metric used by management in evaluating the performance of our segments. Adjusted EBITDA represents our Operating Segments' income (loss), and excludes income and expenses that relate to the financing of our senior notes, depreciable (or amortizable) asset base of the business, income taxes (if any), exit costs from our restructuring and certain non-cash items. Adjusted EBITDA also excludes results from our legacy asset portfolio and certain securitization trusts that were consolidated upon adoption of the accounting guidance eliminating the concept of a qualifying special purpose entity ("QSPE“).

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