Thank you for standing by, and welcome to Mr. Cooper Group's Q2 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. Should you require any further assistance, please press star zero. I would now like to hand the conference over to your host, Kenneth Posner. Please go ahead. Good morning, and welcome to Mr. Cooper Group's second-quarter earnings call. My name is Kenneth Posner, and I'm SVP of Strategic Planning and Investor Relations. With me today are Jay Bray, Chairman and CEO, Chris Marshall, Vice Chairman, President, and CFO, and Jaime Gow, Deputy CFO. As a quick reminder, this call is being recorded, and you can find the slides on our investor relations webpage at investors.mrcoopergroup.com. During the call, we may refer to non-GAAP measures which are reconciled to GAAP results in the appendix to the slide deck. 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. I'll now turn the call over to Jay. Thanks, Ken. Good morning, everybody, and thanks for joining us. Let's start, as always, by reviewing the quarter's highlights. We've reported net income of $439 million or $4.85 per share, which includes operating results, a mark-to-market on the MSR, and the gain from the sale of Title365. As a result, tangible book value increased to $37.24 per share, which is up by more than $15 in the past year alone, and which now represents a 22% compound annual growth rate since the WMIH merger three years ago. Operating results were strong. Our ROTCE was 23%, which was above our minimum target of 12%, and incidentally, this was the ninth quarter in a row in which we've exceeded that target. Based on the results so far in July, we would expect third quarter to be the 10th quarter above the target. Originations came in where we expected with $213 million in operating EBT on $22 billion in volume. Pricing pressure in the correspondent channel has been very intense, but revenue margins in our DTC channel have been relatively stable. The refinance recapture rate rose to 42%, and cashout refis increased to 30%. Both of these numbers are moving in the right direction. Servicing turned in an excellent quarter with strong EBO revenues of $181 million, and the portfolio grew 4% in the quarter or 16% on an annualized basis, thanks to solid performance in all of our channels. The balance sheet is in terrific shape. Thanks to the sale of Title365 and strong operating cash flow, we started July with $1.2 billion in cash and $1.7 billion in immediately available liquidity, which is a huge amount of dry powder for both portfolio growth and stock repurchase. Our board has authorized a new stock repurchase program of $500 million, and with the three-year anniversary of the WMIH merger occurring in the next couple of days, we are likely to begin repurchasing stock very soon. As we announced after quarter-end, we've entered into an agreement to sell our reverse mortgage portfolio. Reverse was a profitable initiative for us, but it was never a growth driver. Exiting this segment will help us focus on the core business, and the sale will be a huge positive for the balance sheet as it will boost our capital ratio above our target of 15%. With the dispositions of Title and Reverse, we're following a disciplined strategy of rationalizing and simplifying the business model in order to focus on servicing and originations, where we see very exciting growth and where we believe we can strengthen our leadership position. With that, let's turn to the next slide and let's talk more about growth. We've commented before that we have the operational capacity to significantly expand our portfolio. This morning, I'd like to share with you a new strategic target we set of reaching $1 trillion in UPB and approximately 5 million in customers. We think of Mr. Cooper as an integrated mortgage company with both servicing and originations. As we look forward, we expect to see servicing and the related customers emerging as a strategic high ground for the industry. In coming years, we expect massive consolidation until the industry is dominated by a small number of mega-servicers with highly concentrated market share, similar to other technology-enabled sectors. These servicers will enjoy huge economies of scale and very high entry barriers, and they will be positioned to generate very significant revenues from recapture, just as we saw in 2020. In fact, they will be positioned to retain customers for life. Very few mortgage servicers will make it to this level. Large strategic investments are necessary to build an efficient and scalable platform which can quickly incorporate changes in the legal and regulatory environment. Servicers, they must delight their customers with both digital tools and team members who go to bat on their behalf, and servicers must have strong capabilities and loss mitigation. At Mr. Cooper, we have the most efficient platform in the industry, and more scale will add to our advantage. We have state-of-the-art technology in which we're continuing to invest, and I firmly believe we have the right talent in place throughout the organization. How long will it take us to reach $1 trillion? We have plans in place to get there in as quick as three years, although the actual pace at which we grow will certainly depend on market conditions, because we have no intention of sacrificing margins or taking on imprudent risk of any type. We have been guiding to growth of 5%-10% per year. As I think about our current opportunities, I would say that if we do not grow at a 10% pace or faster, I'd be disappointed. That's where we're going. Now I'll turn the call over to Chris, who will take you through the quarter. Thank you, Jay, and good morning, everyone. I'm going to start on page 5 with a summary of our financial results. Let me repeat the high-level metrics. Net income was $439 million or $4.85 a share. Pre-tax operating income was $227 million, just slightly above the high end of the range of $200 million-$225 million that we guided you to expect at the end of last quarter. As Jay mentioned, operating results were equivalent to an ROTCE of 23%. The gain on the sale of Title365, as you can see, was $485 million pre-tax, and $360 million after tax, which was consistent with our previous guidance. With mortgage rates down in the quarter, we took $180 million mark-to-market charge on the MSR, of which $45 million was the excess of fair value amortization over cost. Finally, we had adjustments of $7 million related to severance in both servicing and in originations, which reflects ongoing actions taken to rationalize cost and drive efficiencies. You'll note that we're now reporting reverse in discontinued operations, where total pre-tax income for the quarter was $16 million. This number includes both the impact of the sale and the second quarter operating results, which included a settlement of claims related to a legacy portfolio acquisition. Net income drove excellent growth in tangible book value, which increased 16% quarter-over-quarter to $37.24 a share. I'd also like to point out that our DTA decreased by $110 million in the quarter to $1.1 billion, reflecting the fact that our net operating loss has reduced the cash tax liability associated with the quarter's strong income. As a percentage of TBV, the DTA is now down to 35%, which is half the level of a year ago, and we expect this ratio to continue dropping during the remainder of 2021 and well into 2022. While we're on the topic of the DTA, I'd remind you that the Biden administration is working to enact an increase in corporate tax rates, which according to media reports, could result in a new tax rate of 25%. At that higher level, if it were passed into law today, would result in a markup to our DTA of approximately $180 million, which would add about $2 per share to TBV. Of course, our cash flow would not be impacted by any higher federal tax rate until such time as we had fully exhausted our remaining net operating losses. Now to summarize, our operations are clearly firing on all cylinders. The balance sheet has never been stronger. We have significant liquidity to buy back our stock as well as to grow our portfolio. Both of those strategies should drive shareholder value. When we look at the current discounted valuation in our stock price, quite frankly, we see a major disconnect. Now let's turn to slide 6 and discuss the valuation of our MSR portfolio. During the quarter, mortgage rates declined by 15 basis points, and swap rates were down by 10 basis points. Accordingly, we increased the lifetime CPR assumption for our own portfolio from 12.4% to 13.6%, which resulted in a $180 million charge. This brought the value of our MSR down by 7 basis points to 115 basis points of UPB. As you recall, each quarter, we provide you with an estimate of the number of customers who are in the money, which we define conservatively as savings of at least $200 per month. As you know, mortgage rates rose in the beginning of the year, but with the recent decline this quarter, the number of customers in the money has risen from the first quarter to roughly 717,000. As we mentioned last quarter, we have another 630,000 customers with substantial equity in their homes who could benefit from cash-out refinancing. This is another large source of business for our direct-to-consumer channel, and we have very strong momentum here, as we commented last quarter. Let's turn to slide 7 and talk about originations. We're at that point in the cycle where the industry now has excess capacity, and that, plus some aggressive jockeying for market share, is leading to intense price competition. We're certainly not immune from the environment. But our business model is very different from our peers, since we rely on correspondent mainly for new customer acquisition, while our DTC channel produces most of our profits. In the second quarter, our team produced very solid results, with pre-tax operating income of $213 million on funded volume of $22 billion, which was exactly in line with our expectations. For us, the competitive frenzy was most intense in correspondent, and as a result, our volumes were off sequentially by about 15%. We're very committed to this channel, but we remain very disciplined with regard to pricing. During the quarter, we did relatively little volume in those parts of the market where we felt pricing got a little irrational. On a positive note, correspondent is now giving us excellent exposure to the purchase market, which made up 43% of correspondent volumes. Of course, we're continuing to invest in technology to drive down costs, speed up turn times, and improve our client experience. Just like we do with consumers, we aim to delight every correspondent client. Turning to DTC, funded volumes were down about 8% sequentially, which is much better performance than the refinance market as a whole, which the MBA is projected to be down by 24%. Our key metrics were very strong, with the refinance recapture rate increasing sequentially from 37% to 42%, and cash outs rising from 22% to 30% of funded volumes as we continue to pivot towards this product. In fact, so far in July, cash out has been running at nearly 40%. If you'll turn to slide 8, let's shift gears and talk a little bit about the margin. As you can see, the total pre-tax margin compressed by 27 basis points to 136 basis points. As a reminder, this is a production margin, which is net of costs. Many of our peers report gain on sale or revenue margins. While we don't disclose gain on sale by channel, the charts on the right give you a sense of the trend, with correspondent gain on sale margins having fallen significantly in the last few months, while DTC has remained relatively stable. With interest rates having drifted lower recently, our locks are starting to rise again, and this should drive stable profitability in the third quarter. Specifically, our latest projection is for pre-tax profits of $200 million-$225 million on funded volumes of $18 billion-$20 billion. Before we move on to servicing, I'd like to provide you some color on the technology we use to drive cash-out refinances, which you'll find on slide 9. As you know, we have both traditional loan officers and a large and growing team of specially trained home advisors who play a hybrid role, both answering customer service requests and helping customers with tailored refinance solutions. One of the ways we make these conversations productive is through our proprietary Best Fit engine, which instantly populates the home advisor's screen with the benefits to the customers from several options, including rate term refi, debt consolidation, and cash out. This makes it easy to engage the customer in a conversation about alternatives without having to ask the customer to fill out an application, since we have all of their information on file, and we can provide an estimate of the equity in their home using the proprietary technology we've built through our Xome Analytics business. The Best Fit engine takes this data and then matches it against a large number of product and pricing permutations to find the best money-saving opportunities for each customer, and it's particularly helpful when it comes to discussing cash-out refis. The Best Fit engine is a very sophisticated application that our technologists built in-house, and we believe its capabilities are state-of-the-art. Future calls will share more about our technology strategy, and especially how we're digitizing the manufacturing process, which will take our origination platform to an even higher level in terms of performance. Let's turn to slide 10 and review the servicing portfolio. Of note, we're now reporting UPB, excluding the reverse portfolio, which was roughly $16 billion at quarter end. On this basis, the servicing portfolio grew 4% quarter-over-quarter, or 16% on an annualized basis, ending the quarter at $654 billion. As you can see from the chart, the growth was driven by solid execution in all of our channels, originations, acquisitions, and subservicing. The $1 trillion target that Jay talked about is something that people in the company are obviously very excited about. Across our channels, we see plenty of opportunities, and we believe this is the right time for the company to shift back into a much more aggressive growth mode. In addition to strong originations, we booked $16 billion in acquisitions. Now that margins are compressing, this would be the logical time for originators to unload their inventories so that they can generate cash. We remain very disciplined in our bidding, but we're definitely seeing a pickup in deal flow, and we're optimistic that we'll see even more in the second half. We're also very pleased with the steady growth and servicing, which is coming from a mix of clients who value our high level of customer service as well as our recapture capabilities. Let's talk for a minute about forbearance. Currently, 3.6% of our customers are still on forbearance, but that's down from a peak of 7.2%. One of the topics being discussed in the industry is what happens after forbearance ends. We're obviously monitoring our customers very closely, especially those who have been impacted by the pandemic, and we're actively reaching out to ensure they're fully aware of every available option. We expect the overwhelming majority will exit forbearance successfully thanks to the many options that are now available under government agency programs. As well as the current low interest rates and strong home price appreciation. Let's turn to slide 11, and let's review the servicing margin, which we'll discuss excluding the full mark. Bear in mind, the servicing margin now excludes the contribution from Reverse, which is carried in discontinued operations. On this basis, the servicing margin was 7.7 basis points in the second quarter, up from 3.6 basis points in the first quarter. The story here was very strong EBO revenues of $181 million, which was up from $109 million in the first quarter. Last year, we started this program very conservatively as we wanted to make sure we understood the liquidity implications of the new programs. Once our analysis was complete, we worked with our bank partners to develop innovative financing structures that meet all of our risk requirements. We streamlined our pipeline management, which has improved the speed with which we redeliver loans. Now you're seeing the results. Looking forward, we expect to see strong EBO revenues continuing in the third quarter, although they may be down about 30% sequentially. After which revenues will taper off as we near the end of our EBO inventory. We're now projecting total EBO revenue for 2021 that will be in excess of $450 million. Now let's spend a minute on amortization because this will help you understand the value of a balanced business model and how the servicing portfolio will help offset pressure on origination earnings once the environment normalizes. With speeds slowing, amortization declined slightly, but only by about a third of a basis point in the quarter. Now this obviously wasn't a major driver of earnings, but we expect a much bigger contribution once speeds normalize. For example, if you look back a year ago to second quarter of 2020, amortization was 2.6 basis points lower than it is today. If amortization drops back to that level, it will be worth an incremental $200 million a year in pre-tax earnings. If you think rates are going to rise significantly, you could go and look back at our 2018 results when speeds were running at about 10%, and that level of amortization would produce an incremental $450 million in earnings. These benefits will be important in the future in a slower prepayment environment. As far as the third quarter, with rates where they are now, we're projecting CPRs and amortization to be roughly flat. All right. Let's turn to slide 12 and talk a little bit about liquidity. Advances remain a very good story, declining by 7% sequentially to $882 million. Our servicing advance funding capacity was just over $2 billion on committed lines of which $1.5 billion was unused. Our MSR line borrowings were flat quarter-over-quarter and remain at their contractual minimum with slightly over $500 million in unused capacity. Working capital was relatively neutral this quarter, with the largest cash use being the haircut on accelerated buyouts, which we'll recover as soon as these loans are redelivered. Finally, as a reminder, we still have a six-year liquidity runway with no senior notes maturing until 2027. Clearly, overall, the company's liquidity is in excellent shape. All right, I'm going to wrap up my comments on slide 13 by talking about capital and leverage. I'd like to do that in the context of the trillion-dollar UPB goal because we believe a fortress balance sheet is important for all of our stakeholders, from high-yield and equity investors to government agencies and our regulators. In late 2019, we shared with you a capital target defined as the ratio of tangible net worth to assets of 15% or higher, which at the time was just slightly above 11%. Today, on a pro forma basis for the sale of Reverse, we've achieved and even surpassed that target with a ratio of 17.6%. Excluding Ginnie Mae loans consolidated on our balance sheet, which should run off relatively quickly over the next few months, that ratio would be even higher at 22.6%. We feel these are very solid numbers, especially when you consider our excess liquidity, strong balance sheet, and the fact that we have no senior note maturities for several years. With that, I'll turn the call back over to Ken for Q&A. Thanks, Chris. I'll now ask our operator to begin the Q&A session. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Again, that's star one on your touch-tone telephone to ask a question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Kevin Barker of Piper Sandler. Your line is open. Good morning. Congrats on a good quarter. Hey. Good morning, Kevin. Thank you. Good morning. Hey, Chris. Chris, in regards to the buyback program, the $500 million, is there a timeline on that? Do you expect that cadence to be fairly quick in how you utilize that buyback, or do you have any restrictions around how quickly you might utilize it? I don't really. If you look back to our experience with our last authorization, just using a standard buyback program, we were buying back shares at about $50 million a quarter. Of course, you know there are lots of limitations that we hope apply here, as in you're not buying shares when the stock's moving up. There are other blackout rules, et cetera. If it's just the cadence of a normal buyback program, I think it would be fairly slow and consistent. Of course, if there are opportunities to buy back blocks of stock opportunistically at attractive prices, we'd certainly look at them. Beyond that, I couldn't really give you much in the way of timing guidance, Kevin. Okay. You would be open to blocks if they were made available, right? If it's accretive to us, we certainly would be. Okay. How would you measure accretiveness to you? Is it where it is on a price-to-book or how you look at, what you do as like a PE multiple on what your earnings expectations are? How would you define that? Since some of the people that might sell those blocks maybe listen to this, I won't give you the whole formula, but I'd just start with tangible book. I say accretive to tangible book. With the stock trading up, some of that might not be available, but we look at the obvious things, starting with the impact on book. Okay. With a lot of the restrictions being lifted here in August, and then you're utilizing more of your DTA, is there any other restrictions regarding your NOLs that could impact any other strategic initiatives you may have, whether it's divestitures or other strategic moves you could make? No, there's not. As a reminder, most of the DTA, in fact, is only a small piece that remains as NOL, but the restrictions really are behind us now. I think the short answer would be no. Okay. Thank you for taking my question. Thank you, Kevin. Thank you. Our next question comes from Doug Harter of Credit Suisse. Your line is open. Thanks. Hoping to just touch on some of the comments you made around amortization. It looked like industry CPRs fell kind of more dramatically in the second quarter that didn't kind of show through. Is there something else that kind of is keeping amortization expense kind of flat in the short-term? I think it's purely a function of rates, and rates moved around a bit in the quarter. There was a little bit of a slowdown when they first backed up, but they're back at very attractive levels. We're expecting amortization to be relatively flat next quarter. Now, if you listen to Chairman Powell, I guess there isn't a very clear guidance on where rates are going, but I think our expectation is, setting aside what we think in the very short-term, that over the moderate term, rates will go up and CPR will come down, I'd say at least moderately in the next several quarters. I don't think, Doug, there's anything unique to our portfolio, if that's your question. I think it should, over time, perform consistent with the industry. I don't know if that was your question, but I don't think there's anything unique. I think, obviously, we have a very strong recapture team and model, so we'll continue to benefit from that greatly. As we think about it overall, I think it should perform consistent with the industry. I guess just following up on that, on your comment about recapture, obviously you've made good progress on that. Where do you think that recapture rate can get to, and how much more improvement could there be on that? Well, I'm hoping for 100%. That's what we've challenged the team to get to. Realistically, if you look into some of the cohorts and some of the products, we're in the 65%- 70% range. I'd love to see us get overall above 60%. I think that should be a goal, and that's what we should target. Great. Thank you. Thank you. Our next question comes from Ryan Carr of Jefferies. Please go ahead. Hi. Good morning, guys, and congrats on the great quarter. Can you just touch briefly on the competitive environment across both channels and what drove the margin dynamics in your view? Yeah. I think as we said in our remarks, margin in DTC was relatively stable. We've said previously, over time, we expect margins to compress, but definitely more gradually in DTC. Correspondent was very competitive, and I think that's an outgrowth of some of what's been referred to as a pricing war among some of the large players in wholesale, and that's bleeding over into correspondent. We expect that to continue. Margin looks like it's ticked up a little bit in the quarter, but it's really too soon to tell, and at the levels we're seeing them, it's really not meaningful. Now, the channel is meaningful to us because that's our primary means for attracting new customers. Profitability, we expect profitability in that channel to be very muted, at least through the third quarter and perhaps through the end of the year. Yeah, I think on the direct-to-consumer side, we've had a strong start to the quarter. Margins there certainly have stabilized. It's not even gone up slightly. There, we feel really good about the quarter and kind of the rest of the year. Given what rates have done, as Chris pointed out, there's more customers that we can help. Pretty bullish on that. I think correspondent, to Chris's point, it's just a function of what's going on in the marketplace. Still, when we look at what we're acquiring those MSRs for, it's still a very attractive return, and we'll continue to be active participants in that market, but disciplined as well. Got it. Given some of the same kind of pricing dynamics on the originator side, what opportunities are you seeing in the prevailing MSR market? How are you thinking about that in the context of your longer-term goal that you mentioned in terms of servicing share? We're very active. We're very active in the MSR market. We're looking at all the portfolios that come to market. I would say we're being proactive in our outreach to other potential large sellers. I think you should expect a lot of activity there from us, and I think it'll be a component of the growth that we talked about. Again, we're going to be disciplined in our approach. We have target thresholds from a return standpoint. We're going to be very active and aggressive, and I think proactive in reaching out to potential sellers. I think the base of your question is, as margins compress, they compressed from what were historically very high levels where originators were able to hold onto their MSR. Values were low, they were still operating at cash flow positive levels. As the margins compress, I think you'll see more and more sellers just get back into a normal rhythm of selling their production to generate cash and to continue growing their business. We've got great relationships with a lot of those clients. We're already seeing pools come to market. Activity has definitely picked up. I think you'll see more and more of that if rates stay where they are for the next couple of quarters, not rates, but margins stay where they are for the next couple of quarters. Got it. Thank you very much. Thank you. Thank you. Our next question comes from Bose George of KBW. Your question, please. Hey, everyone. Good morning. First, just on the EBO. The guidance you gave for the 30% decline in the third quarter, the $450 million for the year, that suggests I think around $35 million of gains in the fourth quarter. Is that right? What would you see sort of going out into 2022? Do you think that's largely done or we see that kind of run rate? I think it'll be largely done. That $450 is probably a bit of a conservative number because we don't know what gains will actually do. If we looked at it today, the number's probably more like $500 million, but it'll be in that range, $450-$500. There'll be a de minimis amount in 2022. Okay, great. Thanks. Then actually on the DTC channel, can you just remind me, how much of the volume there is recapture, and is there much purchase volume coming through there? Predominantly refinance. 95%+ is refinance. Very small purchase today. And then the percent- Having said that, Bose, we've got several initiatives, and we're starting to see some positive progress in the purchase arena. I don't think it'll be meaningful in the next couple of quarters. Over time, we want to get that purchase recapture to the 15%-20% range as kind of the near-term, call it 2022 goal. Yeah. I think the story in recapture, the real change in what had been pure refinance, rate term refinance, is very significant growth in cash out. Cash out, as we told you, we'd pivot to that as rates rose. Even though rates have stayed low, we're still seeing a huge surge in cash out. That's up. In the second quarter, we were up meaningfully to 30% of our total volumes. I think we mentioned on the call that so far this quarter, we're up to 40%. That I think is more of a change quarter-over-quarter than purchase number. Okay. No, that's helpful. Just to clarify, is all the volume or the bulk of the volume coming through that channel recapture, or is there sort of, whatever third- party kind of originations as well? No, just think of it as recapture. Okay. Okay, great. Thanks. Thank you. Our next question comes from Henry Coffey of Wedbush. Your line is open. Good morning, and congrats on a good quarter and great execution on a whole number of items. Thanks. The removal of the Adverse Market Refinance Fee on refi, does that work its way back into your retail margins? Does that work its way back into your correspondent margins, or does that all get sort of competed away beginning in August when it kicks in? Most of the impact of that fee goes back to the client. We tried to very quickly pivot and get most of it back to the client if we could. Of course, if loans were already, docs were out or loans were already closed and they were sitting in the pipeline, then that will end up flowing through the margin. That'd be a relatively small number. I think that's what most of our competitors did, Henry. You wouldn’t expect to see a big jump in margin. Of course, we've reflected that in our ongoing pricing. Now there may be a difference in how some people are handling pricing going forward, but that's how we handle the pipeline. Just two other questions. Just listening to the discussion, I think if I had gone back over the years, most of us think of you as a servicer with a great origination arm. 2020, everything was origination. Are we shifting back to that model where the real engine is servicing and all the related activities around refinance, recapture, cash out refinance, marketing, et cetera, that can lead from that? Is that where the business is growing, and is there room for or opportunity for big bulk UPB acquisitions? I think, Henry, it's probably more of the same, right? Everything is really, if you think about our model, everything's linked, right? You've got on the origination side with our correspondent channel, it's a great customer acquisition channel. We're going to continue to grow that. Then I think on the co-issue side, we're seeing a lot of positive progress there. Then on the bulk side, to your point, yeah, I do think there will be some large opportunities. Right now it's mostly just kind of singles and doubles. Pretty small pools, but we're very active there. We really look at the platform as kind of a balanced business model, right? Originations, we want to continue to grow that, and grow it in a meaningful way. I don't think you can look at it as we're going back to when we were acquiring $200 billion MSR pools. I don't think you'll see that. I think we want to stay disciplined, have a balanced business model, continue to grow originations, but certainly be active and opportunistic in the bulk world. Anything you'd add to that, Chris? No, I think you covered it. On the buyback front, or the return of capital front, are there any thoughts around a more aggressive strategy like a tender or a structured buyout or turning some of that money into a dividend? I don't think that's something we're planning on in the near term. The whole focus is how do we generate better value for the shareholder. We're very bullish on our future. Again, if we have opportunities to buy back shares at attractive prices, we're motivated to do that. Quite honestly, Henry, I think we see opportunities to invest and grow the business that would offer better returns right now than just returning money via dividend. At the end of the day, we're going to do the best thing for the shareholder. If that ends up being the best option, that's what we'll do. That's not where we are right now. In terms of benchmarking your performance, how quickly should we expect to see, or over what time frame should we expect to see you complete that buyback program? I wouldn't give you a lot of guidance there other than if we, and I made this comment earlier, if we follow just a normal standard buyback, that would be fairly slow and steady. You should probably think of us as being able to buy back somewhere in the neighborhood of $50 million a quarter. Of course, that's due to market conditions, how the stock's trading, what the float is, et cetera. If we have opportunities to buy back blocks at attractive prices, we would do that. Again, the thrust of the company is growth. I think you're hearing us say we intend to ramp up our growth. You've heard a lot of the newly public companies state claims to how much growth they're going to achieve, we've been fairly quiet there. We did grow in the second quarter at a 16% annualized rate. We expect to ramp that up, and so that'll take capital, and that's our number one priority. Growth means growth in servicing, growth in originations, or both? Well, it's both. Obviously, we lead with buying larger and larger amounts of MSR, but that leads to opportunities to grow our origination channel as well. We think DTC is going to grow, correspondent is going to grow, but yes, we are going to lead with more aggressively buying MSR in the market. Great. Listen, great execution this year. Lots of changes going on. Congrats on the sale. We look forward to hearing more. Thank you, Henry. Thanks, Henry. Thank you. Our next question comes from Mark DeVries of Barclays. Your question, please. Yeah, thank you. Was hoping to get your thoughts on the implications for your business of this Ginnie Mae proposal around risk-based capital requirements and risk weights if it gets ultimately promulgated. Is this constraining to you, or does it actually create more opportunity as less well-capitalized lenders are forced to sell more of their production into the correspondent channel? It's a great question. It's too soon to know what that'll be. There's not going to be an impact on our business. I think if you back up, we have the same goal as the leadership at Ginnie Mae, who we have a very strong relationship with, and we want a strong and stable servicing community. It's a new proposal. There are a lot of pieces to it. We are preparing a very constructive response to Ginnie, but I think there'll be a lot of discussion around it, and we'd reserve any further comment until we actually have an opportunity to speak with the leadership at Ginnie. Okay, fair enough. Jay, in your earlier comments, you alluded to the operating leverage you generate from getting to a much larger, let's call it a trillion-dollar servicing portfolio. Can you just talk about how we should think about kind of your normalized servicing pre-tax margin trending as you continue to scale up the servicing portfolio? Yeah, I'll start there. I think in the current environment, I'm not going to give you an exact number to put into your next note, but if you look at where we are today, obviously margins are up on the back of EBO gains. As we look out into next year, we think the profitability margin in servicing is going to hover somewhere around 3 basis points because amortization will come down, maybe not as much as we alluded to if you went back to 2018. 3 basis points is probably all we'd expect next year unless short rates start to climb. When we get back into a normal rate environment, I think our profitability at its existing level is somewhere around 5 basis points. It'll be higher than that when we have one-off events, but 5 basis points is probably where it'll be. We have invested a tremendous amount in our servicing platform. We think we have the most efficient servicing platform in the industry, and clearly the best servicing leadership team. With all that investment in automation, the incremental profitability of adding to our portfolio is quite strong. That'll come over time. I'd rather that we demonstrate that we can grow it at a more accelerated rate before we give you guidance on what the profitability is. You should think of 3 basis points in the short term, 5 basis points in a normalized term, with that certainly growing as we add meaningfully to the UPB. Okay. Are there any meaningful investments that need to be made in the platform to scale it up to $1 trillion? No. If you think about it from a technology perspective, we've made the investments there. We've got the capacity to get to that level. You'd really just be looking at, from a staffing standpoint, what would you need as the portfolio grew. That depends on the composition of the portfolio. If it's more delinquent, obviously we'd need more staff. If it's very clean and current, we would need very little, if any. It's really from an infrastructure standpoint, we're there today. We don't think there's any significant investment. It would just be around our team members based on what the composition of the new portfolio looks like. Okay, great. Thank you. Thank you. Our next question is from Kevin Barker of Piper Sandler. Your line is open. Thank you. Just wanted to follow up on the impact of foreclosure moratoriums expiring and forbearance programs expiring as well. You have quite a bit of revenue and expense impacts. For instance, should we see Xome REO brokerage fees accelerate next year? What level would that look like? Could you bring some of your operating expenses down in the servicing portfolio, just given the amount of labor that was built up to address a lot of the forbearance? That's a great question. Very timely, Kevin. We've been running through sort of preparatory tests for the final push associated with the exits in forbearance. The good news is, in terms of the operational cost, if you go back to sort of the crisis, when foreclosures were high, we'll probably see levels about approximating those same peak levels, at least for a short period of time. If you look at task by task, what we have to do to support those customers, 60% of those tasks are now automated. The actual strain on the system is dramatically lower, and costs should also be lower. With regard to Xome, the short answer is absolutely yes, we'll see a growth in Xome, but it probably will come in very gradually. We're expecting modest recovery in Xome in 2022, very strong recovery in 2023, just because we're expecting the courts to have to take some time to ramp up for the activity. I think, again, we're expecting, and maybe it's conservative, but we're expecting a gradual climb in revenue in 2022, but all driven by a lot of pent-up inventory. Yeah. I think the exchange business, there's going to be a ton of opportunity there. Very bullish on it. I think to Chris's point, you'll get a slow ramp in 2022, but still it'll be meaningful for Xome. I think 2023 will be triple-digit kind of numbers, is what we're expecting out of that business for sure. To your point on the expenses, I think Chris is right. If you look at our remaining forbearance plans that are going to exit, we think probably 70% of those will exit through some type of plan, mod, et cetera. The remainder will go through the foreclosure process. We've automated a ton there. Ultimately, we will be able to take costs out as well. I think you're right on target with your line of thinking. In regards to the exchange business, you're saying triple digits in 2022 or 2023? 2023. 2023. And then when you think about the- As a guidepost, those are vague numbers. Just as a real guidepost, right now, there's still a lot of unknown there. I'd really caution you that these numbers will undoubtedly change. As we look out at 2022 now with all of the new options available to people, the refi and what that would do to our pipeline, and we factor all that in, we think Xome conservatively is going to earn at least $50 million in 2022, and would expect somewhere around $150 million in 2023. Okay. That's helpful. In regards to strategic initiatives around the Xome platform, are you still considering some of those as well that you mentioned roughly over a year ago? We are. We've got three remaining businesses, with the auction platform being the 800-pound gorilla. We have a valuations business and a field services business, and we're really looking creatively. They're good businesses, but there's very limited growth within Mr. Cooper. We're looking for partnerships like the one we have with Blend, where we might be able to find a strategic buyer or investor that can also provide a business and drive growth. These are good platforms. In the right hands, they're going to be much more valuable than they are as part of our company. We're actively working on that. We probably have more to say next quarter. Okay. Then the $150 million, is that what you would consider a normal year, or was that much larger just given the pipeline? No, I think that'll be pent-up inventory. No, I wouldn't give you a really accurate number here. We have been growing market share in auction very significantly. We're delivering excellent service to our clients. The metrics in that business are as good or better than anyone in the industry. Normalized, it's a hard number to define today. The trajectory's up overall, but the 150 is definitely driven by the pent-up impact of the moratorium. Okay. Yeah, I think, Kevin, the other thing about the exchange business that makes it so valuable is that if you look out into 2022 and 2023, it's all third-party business, right? If you think back to when we started that business, we had a PLS portfolio that was part of the revenue and earnings component of the exchange business. That's essentially evaporated. You've really got a fully developed third-party business. To Chris's point, we're growing market share there. It's obviously very capital-light. From a valuation standpoint, we think it's a really attractive business. Okay. Thank you for taking my questions. Yep. Thank you. At this time, I'd like to turn the call back over to Chairman and CEO, Jay Bray, for closing remarks. Sir? Thanks, everyone, for joining us this morning, and we look forward to chatting further. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.