Good day. Thank you for standing by. Welcome to the Mr. Cooper Group fourth quarter 2022 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'll need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Ken Posner. Good morning, welcome to Mr. Cooper Group's fourth quarter earnings call. My name is Ken Posner, I'm SVP of Strategic Planning and Investor Relations. With me today are Jay Bray, Chairman and CEO, Chris Marshall, Vice Chairman and President, and Jaime Gow, Executive Vice President and CFO. As a quick reminder, this call is being recorded. 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. 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. With that, I'll now turn the call over to Jay. Thanks, Ken. Good morning, everyone, welcome to our call. I'll start with the quarterly highlights, as we always do. First, I want to comment on Mr. Cooper's performance during 2022, which was obviously a very challenging year for the industry due to one of the biggest rate increases on record. Nonetheless, Mr. Cooper was able to deliver exceptional results, which I would summarize by focusing you on exactly two key metrics. We grew our customer portfolio by 23% and tangible book value per share by 29%. Relative to our peers, this is outstanding performance, which validates our balanced strategy as well as the technology investments we've made in our platform and the skills, the commitment, and the hard work of our team members. I will add that 2023 is shaping up to be a year of meaningful opportunity for Mr. Cooper. By executing on the strategy we've consistently shared with you in making the right tactical decisions, we stand to grow our customer base even further, plus put the company on the path to rising returns. Let's turn to slide three and review the fourth quarter highlights. In terms of financial metrics, I would point to a 200 basis point lift in operating ROTCE as servicing income nearly doubled in the quarter. Bear in mind, our current return on equity is impacted by a very robust capital base, which you can see in the 31% ratio of tangible net worth to assets. Turning to operations, the servicing portfolio reached $870 billion or 4.1 million customers, which as I just mentioned, is up 23% year-over-year. This growth, plus rising rates, help push servicing income to a record high $159 million in the fourth quarter. That exceeded our November guidance of $140 million as CPR speeds surprised to the downside. In originations, as you know, we took rapid and decisive action last quarter to reduce capacity. As a result, we were roughly break even in the fourth quarter and are now on track for positive results, which will be in line with what we guided you to expect. Shifting gears to capital management, we repurchased 1.3 million shares for $54 million as we continue to allocate capital both to growing our portfolio and to stock repurchase with the goal of maximizing investor returns. Finally, I want to mention that we've entered into a definitive agreement to acquire a registered investment advisor called Roosevelt Management Company and its sister company, Rushmore Loan Services, which is a highly regarded special servicer. This acquisition will provide us with an asset management platform to raise third-party capital on an ongoing basis from institutional investors who seek exposure to MSRs and other mortgage assets. We expect closing to occur at mid-year following regulatory approval. We plan to go to market in the second half. We haven't disclosed the financial terms due to an NDA with the seller, but the cash outlay is not material. Now let's turn to slide four. I'd like to spend a moment on developments in the servicing industry, and in particular, what we see as an unprecedented volume of MSRs coming to market. The chart on this page shows you our internal analysis on the size of this opportunity. In summary, we're estimating that nearly $4 trillion will trade over the next three years, which on an annual basis is nearly double the historical run rate. Now bear in mind, this surge in volume is taking place in the context of a concentrated market with a limited number of buyers. As a result, we expect pools will trade at very attractive yields. In fact, we're already seeing some of the highest yields since the Great Recession. Let's talk about what's driving the market as I'd point you to two industry trends. First, during the pandemic, we saw a very noticeable change in originations behavior. Simply put, they chose to retain a much higher volume of MSRs than their historical practice for the obvious reason that they were awash in cash, and they could afford to retain the servicing rights. Today, however, originators are facing the worst margins in years. In fact, we're expecting for the first time ever to see three consecutive quarters of losses in the MBA quarterly origination performance survey. This also means for many operators that liquidity is becoming a pressing need. Based on data for nearly 500 originators, we estimate there's a backlog of as much as $1.5 trillion in UPB which needs to be sold. The second trend is consolidation. You've read public statements from industry leaders who've decided to shrink their servicing portfolios, I will tell you that there are other large operators who've quietly made a decision to exit. There's no mystery about the reason for consolidation pressure. It's the critical need for scale, technology, operational skills, and efficiency, just like in most other sectors in the financial services industry. Among a handful of large servicers, we believe Mr. Cooper is in the best position of any buyer to capitalize on this opportunity. We have unmatched operational capacity to onboard large portfolios. We have industry-leading recapture, strong relationships, ample capital and liquidity, and a sizable scale advantage. Let's turn to slide five and talk about key investment themes for Mr. Cooper in 2023, starting with this MSR growth opportunity, which will include both acquisitions for our own account and our sub-servicing business as we partner with investors. When we close the acquisition of Roosevelt and Rushmore, our asset management platform will generate sub-servicing plus investment management revenues from investors who seek exposure to MSR economics but don't have the infrastructure or licenses necessary for direct ownership. Let's talk about the second theme, which is earnings visibility. We've benefited from a very strong ramp in servicing, and we have clear line of sight into continued profitability. Specifically, we're now projecting more than $600 million in servicing EBT this year. I'd emphasize, with the vast majority of mortgage customers well out of the money, this income stream will persist for years to come, absent a major rate move. At the same time, we're laser-focused on driving operating leverage, as Chris will comment on in a moment. Let's talk about our origination segment. As we all know, the refi market is limited right now, with most customers well out of the money. Nonetheless, our platform is profitable and extremely scalable, as you know from watching us in 2019 and 2020. I'd add that we're continuing to invest in automation and other enhancements which will put us in position for the next turn in the cycle, whenever that may occur. Finally, for Xome, following a slow fourth quarter, we're now seeing stronger activity, including record net inflows and higher pull-through rates, which suggests we may finally be passing through an inflection point. Based on our latest data, we're projecting a visible ramp in the second half of the year, which should drive progress in our monetization strategy. To summarize, we're really excited about the opportunities in 2023. We couldn't be more pleased with how we're positioned. I want to close by thanking every single member of our team for your commitment to Mr. Cooper's customers, your tireless work, and your enthusiasm. Now I'll turn the call over to Chris, who will take you through more of the operations. Thanks, Jay. Good morning, everyone. I'm going to start on slide six and talk a little bit about the servicing portfolio, where you can see we really had a fantastic quarter. Total UPB was up 23% year-over-year to $870 billion, which represents the mortgages of 4.1 million customers. During the quarter, we purchased MSRs with $23 billion in UPB at excellent prices, demonstrating that we continue to maintain a very disciplined bidding strategy focused on portfolios with quality collateral and attractive yields that we're confident will help us drive higher return on equity. With our scale, we see virtually every deal in the marketplace, and more often than not, we're the seller's first call. Because of our long history as an acquirer, we have vast amounts of data on how different types of seller portfolios have behaved, allowing us to form extremely accurate assumptions about credit and recapture performance. Now, let me share a little more context on our acquisition process. In our most recent back test, we reviewed the nearly 300 deals we were offered over the last two years. Of those deals, we elected to analyze about two-thirds and then chose to bid on a little under half. We ended up winning 23% of what we bid on, or 11% of the total deal flow. Going forward, we'd expect those ratios to remain relatively constant. We have a very good feel for what will come to market and an even better feel for how those portfolios will perform, which is critical to earning our target returns. I'd also point out that our back test validated the accuracy of our underwriting, with 85% of our acquired pools modestly outperforming our deal models, and only 15% are delivering less return, but only by a very, very small amount. Turning to sub-servicing, we grew the portfolio sequentially despite the deboarding of $20 billion of UPB from a single client, which we mentioned to you last quarter. At the same time, we won two new clients. Having said that, some volatility in sub-servicing balances should be expected over time. We're privileged to service portfolios for some of the most successful companies in the industry, and we're committed to delight each one of them, we also know our strategies won't always be perfectly aligned. In the long term, we see significant growth opportunity in sub-servicing, and to help maximize that potential, we've recently appointed one of our most experienced executives, Bryan Budd, to head our entire sub-servicing business. Bryan's charge is to grow our portfolio with the best clients and to do that by ensuring that our best-in-class service gets even better. Now, moving on to slide seven, I'd like to highlight servicing earnings, which were very strong in the quarter, nearly doubling to $159 million as a result of higher balances, lower costs, and lower prepayments. As Jay mentioned, CPRs surprised us to the downside, averaging 5.3% for the quarter, and even dropping below 5% in December, which is something we'd never seen before. For 2023, we expect to generate more than $600 million in EBT. I comment that we have very clear visibility into these numbers. If you remember our guidance at the end of Q2, we told you to expect servicing earnings to double in Q3 and then double again in Q4. That's almost exactly what happened. Just like those last two forecasts, our projections for 2023 are based on nothing more than the forward curve, which assumes the Fed funds rate reaches nearly 5%, mortgage rates settle in at around 6%, and CPR speeds average slightly under 6% for the year. Additionally, we have several initiatives underway that promise to reduce costs while significantly improving our customer experience. If you turn to slide eight, you'll see a chart with a multiyear perspective on our servicing efficiency ratio expressed in terms of basis points of the portfolio. You can see a very impressive trend with this ratio down 44% over the last five years. Just in the last year alone, our portfolio growth of 23% significantly outpaced expense growth of 13%, helping us shave another basis point off the ratio. Our strategy is to proactively drive down costs so that we can realize positive operating leverage as we grow the portfolio while deepening the competitive moat between us and peers to the point that no one will be able to compete with us. In pursuit of efficiency, we've developed innovative technology applications, and we obsess over process improvement. I personally spend at least 50% of my time every week evaluating process improvement opportunities. I'd add that over the last two years, we've identified close to 100 separate processes with gaps or excessive variability, where improvements will drive down both lower expenses for us and better experiences for our customers. Just in 2022 alone, we drove a 16% reduction in inbound calls, a 31% reduction in customer issues. By the way, a 75% improvement in compliments, all while growing the portfolio by over 20%. This slide lays out some of the many projects currently underway. For example, we have an initiative in place to drive down call volumes through the implementation of AI, which will predict which customers will call us and why, so that we can send them information proactively. We're also working to encourage better utilization of our state-of-the-art IVR, as well as web tools and chat functionality. Payments and escrows remain focus areas where we believe we can further simplify the customer experience with easier to understand and more timely information, which will lower calls and delight our customers with a personalized friction-free process. Many of you have asked about the risk of a credit cycle change impacting returns, and our response would be, first, that we purposely carry excess operating capacity to absorb higher levels of loss mitigation activity. Second, we would look at a higher delinquency environment as an opportunity to grow our RightPath special servicing business. As you may recall from our comments last quarter, we're very selective in the pools we acquire, focusing on those with very strong defensive quality. For now, I'd observe that our delinquencies barely moved in the fourth quarter, increasing sequentially by only three basis points. Let's turn to slide nine and discuss the origination segment, which is a critical component of our balanced business model. Last October, as mortgage rates were trending higher, we took additional action to realign capacity to a much smaller market, which included taking the difficult but necessary decision to eliminate over 1,000 positions, most of which were in originations. Thanks to this decision, we will roughly break even in the fourth quarter and are now on target to earn approximately $10 million in EBT for the first quarter, which is consistent with the guidance we gave you last fall. We feel good about driving these numbers higher if mortgage rates settle in at meaningfully lower levels or if MBS pricing improves. As for now, it's a relatively small market, as you know, with very few customers in the money for rate and term refis. We fine-tuned our marketing campaigns to focus on that subset of our customers who can benefit from refi products, including cash out. At the same time, we're finding ways to drive incremental efficiencies, which will pay very significant dividends when the market eventually recovers. I'd add that thanks to the company's overall profitability and cash flow, we're able to continue investing in our originations platform. As you recall, FLASH is our project to digitize our originations workflow. I'm pleased to report that in the fourth quarter, we achieved our goal of extending FLASH processing to 70% of our refinance volumes, and now we're working on it driving implementation to 100%, which would also include purchase recapture, which is an area of strategic focus for us. FLASH is one of many innovative applications developed by the company in recent years, including the X1 title underwriting engine, which we monetized in our sale, the title unit two years ago. Our Pyro document processing engine, which gives us a huge advantage in rapidly due diligencing and onboarding large portfolios, and which we're focused on licensing right now. Our native cloud-based servicing application suite, which we sold to Sagent last year. By the way, I should mention that Sagent just completed an agreement to integrate the Finxact core that Fiserv just paid $1 billion for. This is the final step in launching a completely modern cloud-based platform that is decades ahead of the technology available in today's market. Now, at some point in the future, refinance volumes will return, and in that environment, you know we can scale at an extremely rapid pace and produce terrific margins. Now, if you turn to slide 10, I'd like to share an update on Xome. In summary, while the fourth quarter was slow, we're now seeing a measurable pickup in activity, which leads us to project a substantial ramp in earnings in the second half. To start with, we're seeing much stronger inflows from servicers as they're finally getting comfortable with state and federal rules and investor guidelines issued during the pandemic. This drove stronger net inflows in January. In fact, net inflows reached the highest level we've seen since before the pandemic. I'd add that February is looking even stronger, which bodes well for the pace of sales. Now, as you can see, sales were a little slow in the fourth quarter due to further pressure on the pull-through rate, which we commented on last quarter. The good news is that so far this year, we've seen that rate begin to rise. We're also seeing stronger bidding activity, higher web traffic, and faster growth in new account registrations, which together makes it feel like we're finally passing through an inflection point now that we've been through six straight months of home price declines. I'd guide you to look for stronger sales in the first quarter and modest but positive EBT in the second quarter, with a more significant ramp in EBT occurring in the second half. Meanwhile, we continue to engage in discussions with prospective investors, which we think will move forward in a productive fashion as Xome's earnings potential becomes more visible. With that, I'll now turn it over to Jaime, who'll take you through the financials. Thanks, Chris. Good morning, everyone. Let's turn to slide 11 and review the fourth quarter results. To summarize the quarter, net income came in at $1 million, as $82 million in pre-tax operating income was offset by a negative MSR mark of $58 million and adjustments totaling $33 million. Adjustments included $23 million from severance and property consolidations that we mentioned last quarter and related to the right sizing of our origination business, and $10 million associated with equity investments, which represent interest we took in the sale of our Xome businesses. Jay mentioned we bought back $54 million in shares this quarter. That drove our weighted average diluted share count from 72.9 to 71.6 million shares, and we ended the quarter at 69.3 million shares outstanding. Between operating income and the reduction in our share count, we saw strong growth in tangible book value per share this year, which increased by 29% since last year, reaching $56.72 per share. We obviously are very pleased with this performance and once again validates our balanced business model. Let's turn to slide 12 and review our mortgage servicing rights. During the quarter, mortgage rates decreased by 29 basis points, while swap rates increased by 16 basis points, leading to a negative mark of $58 million, which resulted in our MSR being flat at 162 basis points. The servicing fee multiple, which in our view is a better high-level comparison, was at a multiple of 5.1 x the underlying servicing strip in the fourth quarter, slightly below the 5.2 x we saw in the third quarter. As you know, we have a very disciplined valuation process, which includes marks from multiple independent valuation experts. We additionally benchmark our valuation metrics against public disclosures of banks and mortgage companies, and generally find that our multiple lies right in the middle of the pack, which we feel is consistent with having an accurate methodology and should give you confidence in our balance sheet and in our tangible book value. Now, turning to slide 13, let's review the company's liquidity position. At quarter end, total available liquidity remained robust at $1.9 billion, down from the record level in the 3rd quarter, but still quite ample. $527 million of the liquidity was unrestricted cash, with the remaining $1.3 billion being collateralized and available immediately. As a reminder, the majority of our MSR line does not mature until 2024. During the quarter, we drew down an additional $370 million for MSR purchases, bringing our total draw to $1.4 billion. This accounts for 33% of our debt, which is somewhat higher than our historical ratio. Given our exit capital position, we are quite comfortable with it. In the near term, we may further tap this liquidity for value-added opportunities as we continue to evaluate our overall capital mix. From a cash flow perspective, our advances remain a good story, down 17% year-over-year. With over $1 billion in financing capacity for advances, including facilities earmarked for Ginnie Mae advances, we believe that we're well prepared for credit normalization. Chris has mentioned, we're not seeing meaningful pressures on our customers at this time. Our cash flow during the quarter benefited from the steady ramping and servicing interest income. We expect servicing cash flow to remain robust in 2023. I'm going to wrap up my comments on slide 14 by talking about our capital position. Our capital ratio at quarter end, as measured by tangible net worth to assets, was 31.1%, down slightly from the 31.3% last quarter. Jay and Chris had commented on the massive opportunity in the servicing market. While there is no change to our disciplined and patient approach, which remains appropriate in the current environment, we are now seeing a substantial rise in acquisition opportunities ranging from small pools to major transactions. As such, I would guide you to expect deployment of at least some capital in 2023 into portfolios for the right mix of collateral and yield. This capital deployment should help us generate higher returns on our equity over time. With that, I'd like to thank you for listening to our presentation. Now I'll turn the call back over to Ken for Q&A. Thanks, Jaime. Liz, we'd now like to start the Q&A session, please. As a reminder to ask a question, please press star one one on your telephone. To withdraw your question, press star one one again. Our first question comes from the line of Kevin Barker with Piper Sandler. Good morning. Thanks for all the detail regarding the pipeline on the MSR portfolios out there. Could you provide us, you know, a framework or how to think about your decision-making on whether to deploy capital into MSR portfolios? Is there certain hurdle rates that you lay out there, whether it's gross yield on the MSR or, you know, total return on investment? Could you also help us think about, do you include some level of refinance opportunity when making those decisions or maybe looking at external capital partners in order to finance those? Good morning, Kevin. It's Chris. That's a great question. Since we're in the midst of bidding competitively on a lot of things, I'll answer it, but I'll do it generally. Yeah, of course we look at everything you just said. MSR yields and total returns are, you know, essentially the same thing for us right now. We do consider recapture, refinance expectations. Of course, for most of the pools that are coming to market right now, those levels would be quite modest. Of course, we look at them. One of the things, as we just mentioned, is we've got experience buying pools from virtually every seller in the market multiple times. We have a good idea how those pools will behave, even in an environment like this. I think we look at everything and of course, we do look at financial partners. We've been planning for this environment as I think you well know, for two years. We spent a lot of time building much stronger liquidity, working with our bank partners to be prepared to take advantage of this opportunity because yields are very, very attractive. Of course, our capital is finite. Should we be lucky to use our liquidity to its maximum, then we will partner with other players, which we've done over the, you know, past couple of years very successfully. We see this as a great opportunity. We wanna be able to take advantage of it to its fullest extent. Of course, yields and target returns have got to fit our model. Don't expect us to buy every pool that comes to market. We'll buy those that hit our hurdles that we know we can service very efficiently, and you shouldn't expect us to deviate from that at all. Yeah. I think, Kevin, if you think about it from a return profile, again, we're active as we speak. I mean, we're looking at, you know, mid-teen, kind of unlevered, in some cases, higher returns. I think that's, you know, that's how we're thinking about this opportunity. Obviously, that can change, but to Chris's point, we see it as a, as a massive opportunity. We wanna be patient because, you know, we do think there's gonna be a lot coming to market. Okay. Then on the flip side, I mean, I guess you mentioned that it was competitively bid or, I mean, obviously, there's other bidders out there for these types of portfolios. Could you help us understand how deep the buyer pool may be in the current environment relative to what you've seen in the past? What I mean by that is, like, when you look at the tens of billions or hundreds of billions of potential servicing that could transact. How many bidders do you expect to be for those bigger portfolios? Or at least as a percentage, relative to what you've seen, say, in 2021 or 2019 or previous years. Kevin, I think the number of buyers is somewhat limited, especially as you get into, you know, the larger portfolios. You know, I think you'd probably put them into three camps. You'd have, you know, the financial buyers, so there'll be a handful of those, I think, that will participate. You know, you'll have, probably a few strategics like us that would participate and then the banks, potentially. Again, I think the banks are pretty selective and, you know, are not a consistent participant in the market. As we step back and look at it, I think we're best positioned. I mean, if you look at the number of transfers that we've done, I don't think anybody's done as many or nobody's done the size and complexity of transfers that we've done. I think that's a key ingredient because I think, you know, these counterparties, they really want a good customer experience. They want to make sure they can get approval from, you know, the other stakeholders, whether it's Fannie, Freddie, FHFA, Ginnie, et cetera. I think it's a, it's a very kind of limited population at the end of the day. The other thing I would say is, particularly on the Ginnie Mae side, like if you were to look at, you know, Ginnie Mae versus conventional, I think the population shrinks considerably for, you know, the Ginnie Mae, collateral for a variety of reasons. That's, you know, we've seen that historically as well. Thank you, Jay. Thank you, Chris. Mm-hmm. Our next question comes from the line of Eric Hagen with BTIG. Eric, your line is now open. Hey, thanks. Good morning. I've got a few questions here. The first one, you know, does the value of the capitalized servicing retain the 212 basis points on slide 25? Does that include the $22 billion of servicing that you bought in the quarter? Like, are there some low coupon MSRs which get included in that, or are they all, you know, current coupon MSRs? If you were to isolate the sub-servicing business and think about the earnings being generated there, what would you say is a good run rate or way to think about that, including the amount of operating leverage you have, like for every $1 billion of sub-servicing, is there an approximate kind of pickup in earnings that you think you could get from that? Then I think, Rushmore was in talks maybe last fall to be acquired by a different special sub-servicer. Can you talk about what transpired, what maybe led you to them or them to you? Thanks. Let's see. Could you restate the question on Rushmore? I think they were in talks to be acquired by a different special sub-servicer at some point last year. Hoping you can. Yeah. get some detail on that. We can't really comment on that. I think just to be clear, you know, we're buying really the entity. I don't think we can really comment on the other process. With regard to subservicing, I think your question was the pace of growth or profitability around subservicing. We think subservicing is a complement to our own portfolio. We think we can continue to grow it in line with our own portfolio. As Jay just mentioned, some of these large portfolios are gonna trade to financial buyers that will seek us out as a subservicer because we consider our platform to be absolutely best in class. In terms of profitability, we have a range of different services we offer our clients. Some I would characterize as basic and standard, some that are extremely sophisticated white label. I think we're the only sub-servicer that can provide differentiated service levels for sub-servicing clients. There isn't a single answer on profitability other than our sub-servicing clients are profitable. Of course, you look at them differently because there is no real investment other than the pro rata share of investment we make in the platform. Returns on investment are quite attractive, but obviously, they're much more modest than those that we get when we buy the full strip. Yep. That's helpful. I was looking at the 212 basis points of capitalized servicing retained on slide 25. Does that include the $22 billion or $23 billion that, of servicing you bought in the quarter? Like, what's the composition of that 212? Thank you. Hey, Eric, it's Ken. That's that disclosure is for the capitalized originated MSR. No, it does not include acquired MSRs. Okay. Bear in mind, we have another disclosure there. The value of the originated servicing rights at lock based on the base servicing strip was $156. Yep. All right. That's it for me. Thank you. Thank you. Our next question comes from the line of Giuliano Bologna with Compass Point. Well, good morning, you know, congrats on the continued great execution. One thing I'd be curious about when you're thinking about the MSR, you know, fund or funds or investment vehicles, I'd be curious if you're thinking about, you know, simply just managing third-party capital in those fund vehicles, or would you be willing to invest in those vehicles? What I mean by that, or what I'm kind of getting at is, would you know, be willing to put kind of a pro rata share of everything you buy into funds, or would you be looking to acquire, you know, separate pools that would go into those fund vehicles? Giuliano, our intent is to use this to manage third-party capital. We think there are opportunities for large institutional investors that have major exposure to MBS that would find MSR investments attractive. Obviously you can't buy MSR unless you're a servicer. We'll seek to, almost exclusively manage third-party capital. I don't wanna rule anything out. There could be unique situations where we would certainly want to invest alongside those third-party investors if it made sense, but that's not the primary focus. The second part of your question was? I think that actually. You have a That. Yeah ... answered my question. I'll jump over to kind of my next question, which was a bit more around on the origination side of the platform. You know. Okay ... you have the note about, you know, roughly $10 million of EBT in the first quarter of 2023. I'd be curious how you think about, you know, the potential for that to step up throughout the year, just in terms of, you know, thinking about, you know, the primary drivers, if it's primarily volume or where that would come from. Somewhat related, obviously correspondent volumes have come down significantly. I'd be curious from your perspective, is there a much greater incentive to buy bulk pools if you can get more attractive pricing on the bulk side and, you know, keep the correspondent business running, you know, at much lower volumes and, you know, probably higher margins from that perspective? I'm kind of curious between the interplay between those two different pieces. Well, as you know, we've got three channels that we acquire MSR and correspondent, through our co-issue channel and then bulk acquisitions. Right now, yields on bulk acquisitions for the reasons Jay pointed out, there are limited buyers and there are a lot of assets coming to market. Yields are more attractive there. We pivot constantly, and we do have some expectation that correspondent yields will begin to pick up this year. We've got a great team in place, but that's a fluid decision. It's literally in every Thursday meeting where we are reviewing our strategies. I would suspect that bulk pools will deliver the best returns for most of this year. With regard to profitability in originations, our outlook is still, you know, pretty much where we guided you to expect things to be this quarter, you know, when we spoke last fall. There is some sign that rates may begin to stabilize, and I think that's the first part, right? Clients are still getting used to the volatility in rates. If they stabilize that'll be one leg of things moving up. If MBS prices return to normal spreads, that's another factor. Of course, if rates settle in at lower levels, meaningful lower levels, then we could see much more material improvement. For now, we'd rather guide you to where we have clear line of sight. There's upside, but we don't wanna overpromise at this point. Yeah. I would add, Giuliano, that if you look at our platform and the investments we've made in FLASH, the ability to scale up, it'll be night and day versus, you know, what you saw in 2020. I mean, we can scale our platform in a significant way, and in a very efficient way, if so needed. You know, the investments we've made have really put us kinda in a different category as we think about needing to scale up again. That I think, we're really excited about. The originations team has done an amazing job there. We've really transformed the platform to be able to adapt quickly, if needed, to, you know, a more attractive environment. Thanks for all that. I will jump back in the queue. Thank you. Our next question comes from a line of Doug Harter with Credit Suisse. Thanks. Can you talk about in your guidance for the $600 million of servicing profitability, what that assumes for additions kind of given the pipeline that you see? Sure. Doug, we've got modest growth in that number. Growth that we know we can achieve just based on performance over the last few years, the amount of capital we have. It doesn't anticipate the large bulk purchases that are potential. we're not committing to a number that requires us to go out and win, you know, $100 billion of UPB. So that's upside. I'd say the $600 million is a conservative number for the year if we have, you know, just modest growth. I'd also point out that as you probably know, first quarter is seasonally low for the year, so we'll see the fourth quarter results come down probably 10% or so just due to lower custodial balances and then return to slightly higher levels. $600 million is a number we have a lot of confidence in. Again, with some success in acquiring some of the assets coming to market, we could see that number improve. On the opportunity for MSR, you know, I guess how are you thinking about the opportunity of kind of just buying bulk MSR versus possibly, you know, buying, you know, whole companies that have MSR that might also have some origination capabilities, you know, and how you would weigh those opportunities? Yeah, I think, look, our preference would be, our bias, I guess, is to buy portfolios. If you look at our track record, you know, we've consistently bought a significant number of portfolios over the years. We have bought a couple of platforms, and we will look at the platforms. You know, what comes with the platforms obviously is, you know, people, culture, technology, et cetera. We, you know, we approach that in a very cautious manner. I think our, you know, our strong bias will be to continue to focus on portfolios. Great. Thank you. Mm-hmm. Our next question comes from the line of Bose George with KBW. Hey, guys. This is actually Mike Smith on for Bose. Maybe just another one on the capital deployment front. It sounds like you guys are pretty bullish, obviously, on the opportunity with MSR. Just wondering how, you know, how you're thinking about kind of balancing that with potentially buying back more stock, just given the discount to book. Bose, you should expect us to continue what we've done in the past. We have plenty of liquidity. We think our stock is extremely cheap, and we've been consistently in the market buying shares back at a measured pace. Unless things change, hopefully our stock closes the gap to tangible book very quickly. If it doesn't, you should expect us to continue to buy back shares. I think we're fortunate to have enough capital and liquidity to continue to do both, and, you know, you shouldn't expect any change there. Great. Thank you. Maybe just one more on the origination business. You guys have done a good job taking down expenses. Just kind of wondering how far you think, you know, the industry is in terms of just pulling out, you know, broader capacity and kind of what innings you think we're in there for the industry. Thanks. Yeah, I think, look, we were very proactive there. We took out, as you know, significant capacity. Again, we also made investments where we do think we can ramp, if necessary, quickly. I think from an industry standpoint, we're probably, you know, I don't know, in the late innings. I think people have made adjustments and recalibrations. I think there's still more to go. I would say we were in the late innings of taking capacity out. Great. Thanks for taking the questions. Mm-hmm. Our next question comes from the line of Kevin Barker with Piper Sandler. Thanks. You had one portfolio running off in the sub-servicing, and you had two new wins. Should we expect a decline here in the first quarter on the total servicing portfolio just because of that runoff, or is that gonna be held up fairly well, just given near-term acquisitions? I think in the first quarter, I don't expect a big change in the first quarter. It's hard to tell over time. That client that had $20 billion runoff has additional UPB on our platform, and it will run off as they are able to manage it, and we'll work with them to do that in a way that, you know, is smooth. I think there's some fluidity to that schedule, and we'll give you guidance as that happens. Kevin, we've been very successful in attracting other people to the platform. We don't expect any big change in the quarter. There could be some volatility either way, but, you know, long term, we don't think that's an issue. When you think about potential portfolio growth, you have, what, roughly $60 billion, $50 billion-$60 billion of sub-servicing rolling off and then other client wins that are gonna come in and probably supplement that maybe over the next few quarters. Is that fair to say? That's right. That's exactly right. I think the 50-60, Kevin, is moving out a bit. I don't think it's certainly not a 1st quarter. Yeah. So. No, no, that was always gonna be spaced out over the year. Yeah. I do think it's been extended a little bit. That could change, but I wouldn't consider that a big factor. Yeah. Okay. Then you made some comments about Sagent implementing some technology, it went pretty quick. I didn't quite get that. Could you give us a little more depth on what has been implemented there and how that could potentially support your business or the potential return on investment on other MSRs, just given a technology advantage that you may have? Well, our application suite, as you know, we sold to Sagent. That is a very modern native cloud set of applications that are, for a lot of reasons, way ahead of the competition. The one thing that was missing was a core. We ran on a LSAMS, something that was referred to as LSAMS. It's a 50-year-old core. By the way, every other platform out there is 50 years old. We had the only modern native application suite. Now, Sagent has just signed an agreement with Fiserv to license their Finxact core. Finxact is a company we've been working with for the last two years. We were gonna integrate it ourselves, and I don't wanna get too far off, but Finxact is a company started by absolutely the most successful iconic software developer in financial services in the last 40 years. Frank Sanchez sold Finxact to Fiserv. Fiserv is going to replace the core in every application they have with this new core. Sagent is going to use it. That completes the platform. I think it's going to be a massive differentiator because it's not the term cloud native doesn't mean that much to everyone, but having a modern application suite provides tremendous efficiencies for a servicer. Tasks that you had to do manually suddenly are done. It is done faster. I won't spend a lot more time and steal Sagent's thunder, but we're very, very bullish that now that they will now be integrating Finxact into the application suite, it'll be a massive differentiator. Okay. Will that potentially add further efficiencies to the Cooper platform as well? Absolutely. Okay. Absolutely. All right, great. Yeah, you should really think of it, Kevin, it's gonna be a game changer from both a team member standpoint, so you know, our actual servicing team members and also the customers. I mean, it's to Chris's point, it's gonna make it a much more efficient, automated, self-serve environment that will bring, I think, significant efficiencies. Is there any way to quantify those efficiencies? I know it hasn't been implemented yet, but when you think about the stack of expenses associated, especially with labor or servicing being a fairly labor intensive business, any way to, like, quantify that? I wouldn't quantify it, but an analogy I'd give you is if you know, you take a, the latest Mac and look at the PowerBook that was out in 1990, and think about doing your work on one versus the other, and of course, it's a sea change. You know, it's that dramatic. I, you know, I don't wanna cite a number here, but when you think about the combination of our application in Finxact versus technology that everyone is out there, trying to sell that's 50 years old, there's obviously going to be a major change in efficiency Great. All right. Well, thank you for those comments. Thank you, Kevin. That concludes today's question and answer session. I'd like to turn the call back to Jay Bray for closing remarks. Thank you everybody for joining the call, and we'll be available for follow-up. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.