Nationstar’s servicing portfolio, as measured by unpaid principal balance (“UPB”), increased by 3% to $198 billion compared to the prior quarter. UPB was up more than 92% over the third quarter 2011 balance of $103 billion.

“We generated record net income in the quarter, and we remain focused on three major strategic goals,” said Jay Bray, Chief Executive Officer of Nationstar. “First, we are committed to executing on our servicing acquisition pipeline of $600 plus billion, and we are pleased to announce that we expect $30 billion of acquisitions to close in the fourth quarter. We also executed flow agreements representing $10 billion in annual UPB, and we are targeting $25 to $50 billion of annual flow. Second, we see a significant opportunity to organically grow servicing by continued focus on recapture and expansion of our builder, wholesale, and other origination channels. Finally, we are implementing a strategic initiative to generate additional shareholder value by expanding our ancillary offering of end-to-end solutions for originations and default services.”

Chief Financial Officer David Hisey said, “Our strong financial results reflect our focus on profitably growing the business as we capitalize on the many growth opportunities in front of us. We increased our operating and profit margins in both our servicing and origination segments in the third quarter. During the quarter, we were able to raise additional capital at a lower cost, which will enable us to pursue additional accretive opportunities.”

Business Segments


Mortgage servicing fee income, before fair value adjustments, increased 40% to $153.0 million in third quarter 2012 compared to $109.2 million in the prior quarter. Total mortgage servicing fee income of $135.4 million was up 58% quarter-over-quarter primarily due to generating a full quarter of revenues related to the Aurora platform. In the current quarter, the servicing segment pre-tax income was $5.5 million, versus a loss of $4.7 million in the prior quarter and a loss of $3.1 million in the year-ago quarter.

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