Hello, and welcome to the New Residential Investment Corp Closes Acquisition of Caliber Home Loans, Inc. call. All participants will be on listen-only mode. Should you need assistance, please contact the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note, today's event is being recorded. I now turn the conference over to Caitlin Moritz, Head of Investor Relations with New Residential Investment Corp. Ms. Moritz, please go ahead. Great. Thank you, Cait. And good morning, everyone. I'd like to thank you all for joining us today for New Residential's Caliber Home Loans Acquisition Closing Call. Joining me here today are Michael Nierenberg, Chairman, CEO, and President of New Residential, Nick Santoro, Chief Financial Officer of New Residential, and also with me today are Sanjiv Das and Baron Silverstein, who will lead the combined platform as Chief Executive Officer and Chief Operating Officer and President, respectively. Throughout the call this morning, we are going to reference the supplement that was posted to the New Residential website this morning. If you have not already done so, I'd encourage you to download the presentation now. Before I turn the call over to our speakers, I'd like to point out that certain statements made today will be forward-looking statements. These statements, by their nature, are uncertain and may differ materially from actual results. I'd encourage you to review the disclaimers in our press release and supplement regarding forward-looking statements and review the risk factors contained in our annual and quarterly reports filed with the SEC. And with that, I'll turn the call over to Michael. Thanks, Cait. Good morning, everyone, and thanks for dialing in this morning. We're really, really excited to announce the closing of the Caliber Acquisition. The team, quite frankly, across the board, did a great job getting this deal across the finish line, I think, in maybe not record speed, but close to record speed, and the integration and the great work around bringing two wonderful companies together has begun and we're well along the way there. This morning, we're going to speak to our supplement that's been posted online. I'm going to turn the call over shortly to Sanjiv and Baron, who will lead the discussion through the deck, and then after that, we'll turn it back to all of you for some Q&A, and without further ado, let me turn it over to Sanjiv and Baron. Thank you, Michael. Appreciate it. This is Sanjiv Das. Delighted to be the CEO of the combined company. As I said to you, folks, in some of our roadshows way back in October, the strategic combination of two joint originators, two joint servicers into one vertically integrated mortgage company really makes us a very powerful player in the mortgage origination and servicing business. Equally exciting, Michael, and as you all know, is to be part of the mortgage ecosystem within NRZ, which makes us a very, very powerful company with growth capital. We believe that the combined team is completely positioned to be in the hyper-growth business of mortgages and gaining share in a highly fragmented business. As you can see, I'll do a couple of slides and then I'll pass it over to Baron. As you can see, we are now the fourth largest non-bank mortgage originator, which gives us huge scale in terms of our ability to originate mortgages. As a combined company, just the mathematical addition is $170 billion. But clearly, we have aspirations to be from a 5% market share player to a 10% market share player in the near horizon, and we can see the paths to it. We are now the fifth largest non-bank servicer, which gives us huge advantage in terms of our access to three million consumers, both in terms of recapturing, but also not just refi recapture, but also purchase recapture, which is a metric not a lot of our competitors talk about, but we like it because we lead it, and we do a really good job there. We have roughly 4% of the total origination market share, and we are now the second largest non-bank purchase lender. And many of you will remember that we've been talking purchase, purchase, purchase for the last three to five years because we know that that's what gives us the advantage across cycles. We are the fourth largest wholesale lender. We are the third largest correspondent lender. We are the fifth largest refinance lender. And we are. I'm sorry, I'm essentially talking to page three of the deck. And we have access to 2.3 million consumers. Just moving on very quickly to page four of the deck. Just wanted to give you a sense of how we compare relative to the Big Four: Rocket, PennyMac, UWM, and loanDepot. You can see on page four that when you look at the distribution channels, we have all of them. We have retail, wholesale, correspondent, and direct-to-consumer, which basically makes us extremely, increases our ability to work across cycles. So that said, before when there is extreme competition in any one channel, we pull back from that channel and we press ahead on the other channels, which gives us the ability to maintain not just growth and share, but also makes us profitable across cycles, which is not something many monoline players can claim. The REIT platform gives us the ability to do non-QM in a very large way. And you've seen probably, for those of you that have studied the two companies before, know that the distribution platform gives us the ability to essentially put out more products both in the agency and the non-agency world. And of course, when you look at our range of capabilities across performing servicing, special servicing, it is unique. Combine that with our servicers businesses, both title appraisal. This does make us a unique player within the mortgage ecosystem in a very, very powerful way with the ability to build adjacencies. And before I pass this on to Baron, I will say I'm really excited to be a part of this great platform. We look forward to continuing to grow this. And of course, we are very proud of the team, which we'll talk about in a second. Over to you, Baron. Thanks, Sanjiv. Good morning, everybody. I guess maybe just start that for the past several months, I've had the pleasure to work with teams from both companies. As Sanjiv said, we're very excited to formally begin this opportunity to merge the companies and create really what I think is going to be the best mortgage operating company in the business. You heard Sanjiv also talking about, on slides three and four, our goal isn't just to be the biggest, it's to be the best. Really, the starting point for achieving these goals just got us a whole lot closer. Certainly a lot of momentum and positivity. Turning to page five, the real key highlight here is the top right chart, which is our channel diversification versus our peers. Most of our peers focus on a single or bilateral origination strategy, but our combined platform through retail and JV, which is about 25% in the second quarter, wholesale 17%, correspondent 36%, and our direct-to-consumer channel 22% really gives us a balanced complementary strategy. And while markets ebb and flow, we believe the strength of this diversification will allow us to perform across all market cycles. Top left chart really just shows what Sanjiv talked about: $45 billion combined in the second quarter, fourth largest non-bank originator. And it's also important to note that while the platform is accretive, there's very little overlap in the combination, especially when we look at customer relationships. And when these platforms are combined, we believe that the combination is additive from a borrowing customer standpoint. So our size, scale, coupled with our diversified strategy, will allow us to perform as markets shift and change. Turning to slide six on the servicing side, just a high-level overview of our servicing capabilities. Servicing has always been a Newr ez core strength. Together with Caliber, we're going to service over 2.3 million homeowners with a notional principal balance of approximately $465 billion. It's an important component of who we are as we retain our servicing and provide solutions to our entire servicing portfolio, and as we saw over the past 18 months with the effects of COVID, how important this capability was to helping the homeowners that were having challenging times. The combined company will retain servicing our newly originated loans and will also continue our best-in-class third-party and special servicing business. And in the near term, as we work towards full integration, we're focused on combining best practices from both companies to strengthen our efforts in retaining our customers throughout their homeownership journey through either recapture or offering additional mortgage-related options. Turning to slide seven really shows you the power of the combination in our ability to reach our customers when and how they prefer. And this matters because it gives us an extensive opportunity to connect with both new and existing customers. So when you look at our retail and our JV platform, it's grown significantly, and we're market experts in these communities where we work and live. For customers who don't want to sit down face-to-face with a loan consultant, we have over 700 direct-to-consumer loan officers who are very happy to talk to customers by phone or email. We have over 5,000 broker partners in our wholesale division, and we differentiate ourselves through our relationships and our added products. Our correspondent loan division, now with over 900 clients, will deliver new customers to our combined platform, where our job is to convince these homeowners to choose Caliber and Newrez over their original lender. Our servicing divisions, as I talked before, approximately 2.4 million homeowners but coupled with NRZ's MSR portfolio, we have 3.2 million homeowners which will provide products and services today and in the future, and then finally, our servicing businesses, which provide title and appraisal expertise to both our origination and servicing platforms, so as our platforms grow, these businesses will grow as well. On slide eight, the mortgage ecosystem, we're just really showing the positioning of our company, our combined company within this mortgage ecosystem. So when you think about the consumer experience, servicing experience, client experience, we're involved in every step of the way to deliver the best mortgage experience in the business. As we differentiate ourselves for our customers and partners, we'll see that business continue to grow, and with that, I'm going to hand it back over to Sanjiv to dive into our winning proposition for the combined platform. Thank you, Baron. I'll just re-emphasize what Baron said on slide seven. We are, as experienced players in this business, I can tell you that the ecosystem makes a big, big, big difference to us, and that's where you will see that the combined value of the growth in this franchise will come from, so on slide eight, I just want to highlight seven things that we, as a collective team, really sort of distill as what we think will be our winning proposition. We've talked about team and talent just a little bit, but I will tell you that it is a very, very experienced team. People ask, how would you manage four channels? And the way we've done it is through essentially a very solid leadership team. We run each of those channels almost as if they were separate businesses running on their own P&Ls. So DTC, we have one of the best teams. The thundering herd in retail is a very difficult construct to replicate, and so on and so forth. You'll see that in wholesale, we like to be number three or four. We don't want to be the top two. We don't want to compete on price. We want to compete on share of wallet, which is what we do. And same with correspondent. The combined team is extremely powerful. The market share growth opportunity is phenomenal, and we've demonstrated it in our growth over the last five years. We'll continue to demonstrate that over the next 10 years. Our purchase origination leadership is unparalleled. We excel in what we call our local distribution and how closely we work within the communities to actually gain a huge market share in purchase. And our teams are the compensation system. The incentive system is focused towards people winning in purchase. We have set the standard along with the largest player in the market in recapture rates, and I will insist again that we not only look at refi recapture, we also look at purchase recapture. It's a very, very important metric. One out of every two consumers that buys their next home comes back to the franchise to buy their next home. It's a very powerful winning proposition, particularly in the cycle we are about to enter. We are excited about the scale. The scale supports growth both in terms of revenue synergies as well as in terms of expense synergies. We'll talk about that a little more in some of the slides coming up, and of course, we have a very powerful proprietary technology on the origination side. We've always believed that our model of high tech behind high touch, by the way, one of our competitors stole that line from us, is a very powerful one. And last, and certainly not the least, we have a very well-defined path to accelerate our growth. So we feel very strongly about our winning proposition. Moving on to slide 10, this is the, Baron obviously looks better than I do in this picture, but it is an incredibly strong team. Both of us have known each other for many years. We work very well together. The combined team is extremely strong, both on the production side as well as on the servicing side and in technology. So we are really, really looking forward to a great future ahead for both combined companies. And we are very confident that the cultural set is really going to work well for us. Moving on to slide 11, this is a clear demonstration of what we've achieved so far. You can see that the combined company from 2017 to 2021 has grown. 2018 and 2019 were tough years for the industry, but we grew market share. And you can see we grew share from 2.9% to 4.8%. We know that we can get to 10%. By the way, 10% is where Quicken's at today. And we know we can get there. This market's extremely fragmented. I'm sure you're all seeing the consolidation of share happening amongst the top five players. And by the way, four out of those five players are now non-banks: big, responsible, institutional in terms of scale and strength and capital. And we feel very confident that we will get there with the distribution that we have across the two companies and across all four channels. On slide 12, again, we've highlighted this consistently. Even in a year like 2020, when the whole world seemed to be consumed with refinance, we kept talking about purchase because purchase is fundamentally what drives the growth of mortgage originators across cycles. I've said this to folks before. We have local relationships. These relationships are very difficult to build. There's a reason why there is only one competitor to us in retail, a real competitor in terms of scale, and I would say they acknowledge our prowess in retail. Now we have added JVs on top of our retail franchise. That makes us very powerful. Our local relationships are so strong that in certain pockets of certain markets, we are larger than Wells Fargo in communities where people buy homes. We have 540 retail branches, which, by the way, are different from the retail branch systems that we inherited in banks that we really didn't like because the overheads of bricks and mortar were extremely high. These are light retail branches that are high touch and yet low cost. We have purchase in every channel. Our incentive structure between retail, wholesale, direct-to-consumer, and correspondent works in such a way that it is purchase biased. And as I said before, we have customer resale opportunities. I think that there is more opportunity in terms of what we could do there. But clearly, as you can see, in terms of purchase, we are already operating at about a run rate of $73 billion this year, which is bigger than most originators in totality. This is just our purchase business. I would say, Baron and I would say that in the last month, our purchase mix has gone up to as high as 60%. And the combined company continues to grow very strongly in purchase. And of course, if you move on to slide 13, I want to talk a little bit about our recapture rates because I think this is where there's a huge opportunity between the two companies. As you can see, both companies have been doing extremely well in terms of growth in our recapture businesses, but there is still a pretty significant gap in terms of how we could, a gap that we can close in terms of the recapture rates across the two companies. I think we've clearly set the standard in the industry in terms of our refi recapture, and we are setting the standards on purchase recapture. And by the way, we will keep talking about purchase recapture until people pay attention to it. It is a very important metric, and it is a really difficult thing to accomplish, and there's a reason why most people don't talk about it. But a 23%-24% opportunity right now between the two businesses on a very, very large servicing base will make a huge impact. I would say in terms of synergy of revenues, it's probably our single largest low-hanging fruit, and we expect to close the gap in the next six to 12 months in a very meaningful way, with very meaningful economics dropping to the bottom line of the combined company. Anyone talk about synergies or share shipping? On slide 14, we talk about synergies. You can see that there are four major areas of synergies: synergies in revenue. We believe that the combined platforms will give us increased volumes, economics of scale, and as I said before, improved recapture. We feel very strongly about our ability to deliver huge economies through synergies in revenue. Synergies in cost. I mean, these are obvious. When you combine two platforms, you'll have huge synergies in terms of fixed and variable costs coming down, increased efficiencies, and both platforms have a great deal to contribute to each other. What Baron and his team have achieved on the correspondent side clearly sets the standard for what Caliber could do in correspondent. What Caliber has achieved on the retail side clearly sets the standard for how the JV retail (combined JV retail platforms) want to grow in local markets and continue to dominate purchase. The two platforms, I want to talk about this a little bit, in terms of the manufacturing of loans that happens behind the distribution, we are very focused on combining the two platforms. As I said, we have a proprietary origination platform. We are spending a lot of time and effort and collectively a lot of money on essentially changing our manufacturing with digitization, automation to essentially impact three things: cycle time, cost per loan, and capacity independent of FTEs offshore. But essentially, how do you get hypergrowth with manufacturing capacity that can flex up and flex down? Capital. The combined power of the enterprise in terms of capital is phenomenal. We are already seeing huge synergies in terms of financing advantages and cost of funds. We'll talk about that at some point, but we are seeing that the combined company is able to leverage its strength a lot more in terms of our financing costs. Enhanced capital markets execution. We have one of the best platforms now, combined company, in terms of capital markets execution as well as our diversified sources of capital. And in terms of strategy, we've talked about the ecosystem. There's a lot more to be done within the title company being able to sell more to Caliber. There's a lot more in terms of sub-servicing, special servicing that we can do as a combined company. There's a lot more we can do on appraisal. And by the way, there's a whole lot of other adjacencies within the mortgage ecosystem and outside the mortgage ecosystem in consumer finance when you look at our total base of three million consumers. The net net on slide 14, what we are estimating is we'll save somewhere in the order of $80 million-$120 million in synergies next year with a run rate of $150 million-$200 million through the fourth quarter, in the fourth quarter of last year, sort of of next year, sorry, leading to hopefully even a more powerful 2023 when we know that the origination businesses will have some pressure. Moving on to slide 15. On technology, as I said, we are super, super thrilled about what this can do. We, as Mike has indicated before, we spend, combined companies, I think we spend close to $300 million on technology. We are going to spend a significant amount of that on what we call high tech behind high touch. We are spending a lot of money in terms of digitizing the entire mortgage process, using artificial intelligence, machine learning to essentially capture what is a paper-driven process into a digital process. We will use that for digital decision-making. Today, we are experimenting that on 10%-15% of our loans. So simple W-2 conventional loans should not need any human intervention. They should go through digitization, digital decisioning, and intelligent workflow. And by the way, the way we will do this on the front end is that we'll equip our salesforce with the capability to be able to pre-approve loans. And loans that do not qualify for simple W-2 conventional loans, we will move them to products that they may be eligible for. For example, a non-QM product. We've experimented those things pretty seamlessly, and we expect to push more technology to our distribution. That's what I mean by collaboration. The collaboration between the digital manufacturing and a digital front end is extremely powerful when you have a physical distribution that is unparalleled. Automation. We are spending a lot of time and have done a ton of work on automation in terms of essentially robotic process automation to take care of simple processes that do not require human intervention. Again, simple W-2 conventional loans, we have seen that they already impact cycle time in a very significant way. When we look at the distribution of loans that we process in less than 15 days, we are now getting close to 30%-35% of simple W-2 conventional loans that can be processed in less than 15 days. Our view is, if that's 60%-65% of our overall business, why shouldn't we do that across most of our franchise? And of course, insights. A lot of people talk about advanced analytics. I can tell you we grew up with advanced analytics. There's a ton of data in the system. There are folks who worked in Los Alamos National Laboratory in the past. The question is, how do you use analytics? We do it today mostly for recapture and refinance, which basically shows why our numbers are as good as they are. But to be able to use intelligent analytics to process loans is something that we really look forward to doing. And we've done it in different businesses outside of mortgages and look forward to doing that here as well. Slide 16, which talks about how technology drives growth, margin expansion, and customer experience. I said this before. A line that we are proud of sort of setting standards for in this industry, and I'm glad that some of our competitors borrowed it, is high tech, high touch. We really believe that the mortgage business, just like every other business, has to be a combination of omnichannel physical distribution and digital distribution. The fix is not so much in substituting physical distribution with digital distribution as much as it's about complementing physical distribution with digital distribution, and the real trick is, once you've got the distribution, the real trick is in changing your manufacturing to digital, so let's not confuse between distribution and manufacturing. It's very hard to replicate physical distribution, but it's relatively easier to get digital manufacturing, and we are spending a lot of time on essentially a tech-enabled transformation, which I talked about in the previous slide. We know that eventually we want to be able to create a real end-to-end digital experience for our consumers. Consumers value that, particularly millennials and Gen X and Gen Y and Gen Z, and it keeps going, right? But the younger folks basically love the digital experience. But let me tell you this. When you're buying a home, you love the digital shopping experience on the web and looking for the lowest rate on the web, but it's very difficult to buy a home unless it's a handheld process even today. That ain't changing overnight, and we expect to make it technologically enabled, but to say that that process will be substituted by digital lenders, in my opinion, is not happening anytime in the future. We work with the system. We don't work against the system. The customized user experience. We spend a lot of time talking about how can we improve. People talk about origination, servicing, and have now started talking about recapture. Not a lot of folks talk about retention, but essentially to us, that is very meaningful. How do you make the brand consistent with the customer's experience so they don't leave you in the first place? Credit card companies do a pretty good job of it. Mortgage companies do a shitty job of it, mainly because mortgage companies are either focused on origination or on servicing. They are not focused on a 30-year customer contract. And we feel very strongly about the value we can add to a customer over a 30-year relationship that we have with the customer. And there are ways to do it. We'll bring marketing and consumer analytics to be able to show how we can enhance the customer experience and enrich the consumer experience for being a mortgage customer with us. We talked about intelligent workflow and automation. We're going to belabor that again, and we will talk about building a culture of continuous innovation. That's a cultural shift. I'm delighted to say that with Mike's leadership, Baron's partnership, this is something that we at the top of the house feel very strongly about. It's one thing to talk about technology. It's another thing about building a culture of innovation and customer orientation. How do we ask you to measure us? Look at the right. There are what I call the three Cs: cycle time, capacity, and cost per loan, and we'll deliver to those three metrics with the initiatives that we have on the left-hand side. Slide 17, and I promise you this is the last slide. We will talk about net net. What does all this mean? Between Baron and I, we believe that we have a very clear strategy that essentially translates into four things. Number one, we will gain purchase market share. We've done it before. We'll keep doing it. Number two, we now have a fantastic platform to be able to expand products: non-QM, non-agency, jumbo. We understand those products really well. We understand the customer base really well. And we have the REIT platform to be able to do that. It's something that Caliber didn't have before. The combined platform has it now. We have the distribution. We have the platform to deliver the products. Client expansion across all channels and servicing. We will essentially run a combined business where origination, servicing, and the four channels think about our client base in addition to our customer base in a very meaningful way, and we'll continue to think about how we can add value to our clients. How do we add value to brokers? How do we add value to real estate agents and builders? It's something some of our competitors have actually done a decent job of, particularly the large monoline players, but it's not hard to replicate some of those, right, and we plan to spend a lot of time enriching the relationship that a broker has with us, enriching the relationship that a builder has with us. Number four, we talk about recapture growth. We've talked about this before. I will not belabor it, but I will say that we have a goal of closing a 25 percentage point gap. 25 percentage points is a very meaningful goal with a very large UPB in a large servicing book. I'm not saying we'll get all the way there, but even if we got to 10- 15 percentage points in the next 6 to 12 months, that's a giant leap for us in terms of the synergies in our revenue. We will do that by building efficiencies across all channels and servicing. The combined company makes us feel really good about being able to deliver efficiencies. And I know we'll do that through some of the work that we are doing on technology, digitization, and automation, and obviously deliver on scale and synergies. These are low-hanging fruits. We are very confident that we'll deliver a great year even in the cycle we are about to enter. So with that, I'll head back to Cait. And with that, we can open it up for questions, operator. Yes, thank you. At this time, we will begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. And the first question comes from Bose George with KBW. Hey, everyone. Good morning and congratulations on closing the deal. I know the transaction price was based on tangible book value, but just wanted to confirm. Was there any goodwill at the end or any negative goodwill, or is this basically done right at tangible book? Yeah. Bose, good morning. It's Michael. There's no goodwill as a result of the transaction. We advertised the transaction as acquiring at book, and it looks like we're coming in either at book or a little bit below book. Okay. Great. Thanks. And then actually, the ROE at Caliber in the second quarter, can you just talk about how things were looking before the transaction closed, how are operating trends in the third quarter as well? Actually, they're both at Caliber and at NRZ, just broadly on mortgage banking. I think there's two parts to this. On the NRZ or the Newrez side, we'll call ROEs. ROEs are in and around, I think, about 20% on both companies for the quarter. So overall, we announced obviously results for NRZ or for Newrez a couple of weeks back, but when we look at both companies, the ROEs are in and around 20%. And the trends in the third quarter are roughly similar to what you've discussed on the call when you guys reported? Yeah. I think if you look at the rally in the market with a 1.25 10-year note, we've seen a good pickup in production volumes. And as a result, you're going to see higher revenue from the way that we modeled out, whether it be on the Caliber side or the Newrez side, you're going to see higher net earnings in the company overall just as a result of where rates are. To some extent, when we think about the recapture opportunities and bringing both companies together, we think that from a quarter perspective, we should have a reasonable quarter. Thus, last night, we announced a $0.05 increase to our dividends. So that's why we bumped it from $0.20 to $0.25. Okay. Great. Actually, just one more for me. Just on the 10% market share target, does that contemplate any inorganic share gains just through acquisition, or is that kind of an organic number? And then if there's fallout in the industry, maybe it's incremental? Bose, this is Sanjiv. Yes. I mean, look, we definitely have the opportunity to do inorganic acquisitions if we wanted to. Generally, when you get into cycles like the one we are, I think, about to enter, you will see that smaller retail shops don't have the ability to sustain themselves after big refi booms. And so it's a great opportunity for us to do inorganic acquisitions if we wanted to. But I think for the most part, I'd say that even organically, we can get us to a pretty significant share, pretty close to 10%. So we can definitely. It doesn't particularly contemplate inorganic, but the opportunity is there for us to do inorganic in cycles like this. Okay. Great. Thanks a lot. Thanks, Bose. Thank you. And the next question comes from Eric Hagen with BTIG. Hey, thanks. Congratulations on the closing. So the business has around $6 billion in equity now. Can you talk about the capital allocation you expect to aim for among the origination and servicing operations as sort of one segment? The MSR portfolio held on balance sheet is maybe the second segment, and then portfolio investments is the third. Yeah. Good morning, Eric. I think a couple of things to that point. One is, and this was the point I tried to hammer home, I think, on our last earnings call. We are first and foremost an investment company. The combined mortgage company, which we'll call NewCo for now, will be as opportunistic, I think, as all of our other investments in the business, and what I mean by that, if the origination and servicing business continue to perform as we expect them to do, there could be more capital allocated to that part of the business, but overall, when we think about NRZ, we think about the investment company. NewCo is a wholly owned sub of NRZ. We have a large MSR portfolio that's away from the mortgage company. For example, we still have access with Cooper, who services some of our old legacy MSRs that we partnered with them on. When we look at our loan business, same thing. We've ramped up our call activity over the course of the past couple of quarters. So overall, when we think about capital allocation, one is it's going to be driven by what I think the market's going to give us. So I think to Baron's point earlier, we're not just trying to be the biggest. We want to be the best, and we want to make the most amount of money. If we're in a much higher rate environment, the beauty of our vehicle is that our MSR portfolio will continue to increase in value. We'll get more cash flow because we have a $500+ billion MSR portfolio. And then we have our manufacturing machine that we could actually generate more and more MSRs as we think about one is this great purchase organization in Caliber. And then two is as we think about purchase recapture and refi recapture, we'll allocate more capital to the MSR business. So, I don't know that we're going to get specific on this call how we're thinking about capital allocation. It's more how we drive more earnings for shareholders and continue to increase our dividend, which I think we're a step along the way. And hopefully, this is just the first step and more to come. Got it. That was helpful, Michael. Thank you. And then the synergies you're expecting to unlock next year on slide 14, is there any detail on how much is coming from the operating expense savings on the servicing division and maybe just how much is coming from higher origination and such? Thanks. We haven't fully sort of fleshed out exactly how much we'll get from the servicing. I will say, though, that it includes, as I said, revenue recapture revenue increased by roughly 10%. You have that on the previous slide. I think 10% gives us about $40 million in terms of pre-tax income. There are savings in terms of financing. Again, Michael has signaled that in the past. So there's savings. So these are also giving us one of the bigger needle movers. Clearly, we'll save on corporate. There are two finance departments. There are two HR departments and all that kind of stuff. So that's simple, straightforward. Corporate, I think, will be a big part of our savings. And so I'd say that that's broadly Cap markets too. I mean, not around the people side, but when we look at cap markets and we look at our financing costs, I mean, being part of the Fortress organization and you think about the power of our company as being managed by Fortress, we think there's going to be some significant savings in our cost of funds and how we finance our business going forward. So that should be some immediate saves that we get here in both the third and fourth quarter. Got it. That's all really helpful. Congrats again. Thanks, Eric. Thank you. And the next question comes from Giuliano Bologna with Compass Point. Good morning. I just had one quick one to start with to extend a little bit on the synergies discussion. I'd be curious how much of the kind of 150 to 200 that's mapped out in the slide deck comes from kind of corporate and overhead type synergies or even kind of a rough percentage or magnitude versus kind of the revenue opportunity. Yeah. I think Sanjiv just articulated certain things around from a corporate perspective. I articulated certain things around capital markets and finance. Without getting too specific on this call, quite frankly, I think we feel very confident in our numbers and the way that we're thinking about our synergies and savings. There's always some overlap when you do an acquisition. I think what we're going to try to do is dive deep, and actually, when we think about technology, Sanjiv pointed out, and I've been pretty vocal about this on numerous earnings calls, $300 million plus of spend in technology. That is going to give us some real savings and synergies that we think are going to be pretty significant in the company. That, capital markets, I brought up the financing side. And then obviously, there is a little bit of overlap. And then we think about some lease savings and things like that. So there is going to be a little bit everywhere. But there is a real savings when I think about on the cap markets and financing side that we have identified and are currently working on now. That is great. From a little bit of a different angle, obviously, better recapture performance is a big benefit to your MSR values. I'd be curious to have a little bit of a two-part question, but I'm kind of curious what kind of recapture assumptions you're currently building into your portfolio if you're building in the current, call it, 41-ish% recapture performance on the refi side, at least, and then what the opportunity might look like from a Caliber perspective because Sanjiv articulated or clearly articulated some of the goals of kind of bridging that gap and how far we might be able to make it in the next 6 to 12 months. So I'd be kind of curious what kind of impact that is achievable from that perspective of closing the gap and then where you are now from a recapture rate assumption and your MSR values. Yeah. I mean, if you look at slide 18, 13, sorry, we talked about the current recapture rates are at roughly 41% for Newrez and 65% for Caliber. Now, Baron and I and the team have done some fairly detailed work. I'm not sure if we're ready to give that guidance just yet on this call, but we will as we start to continue to refine it because we want to make sure that we can give guidance that we can deliver to. The 24% gap that we talk about is a very real opportunity for us. Baron and I feel pretty confident. And as you can see on the right-hand side of that slide, the 5, 10, 15, 20, the reason we range-bound it is because we absolutely believe that we can deliver to the middle of the range, which is 10%-15%. And by the way, in the next six to 12 months, we have very specific plans of how exactly we can do it. But please remember that in the Newrez portfolio, unlike in the Caliber portfolio, there are variations to the theme in that some parts of the portfolio are not serviced by Newrez. They're serviced by others. And so we have to make sure that those assumptions are carefully calibrated. And not all of them will get to the 65%, but we know that it'll be somewhere in the middle of the range that we've reflected on the right. And the economics come straight to the bottom line. The $40 million-$60 million come straight to the bottom line. And then one other point on that is when you think about the third-party servicing, we have servicing with three different large counterparties. And if, in fact, we're able to look at those portfolios and increase our recapture rates by some amount, that's also going to be accretive to our overall bottom line. So very focused on increasing recaptures, everybody knows. Last year, our amortization of MSR portfolio was $1.6 billion. As we head into a higher rate environment and we think about our recapture opportunities and the purchase business that we're acquiring, I think we're super pumped about where this thing can go. That's great. And just one quick one from a clarification perspective. Obviously, the recapture rates vary greatly for acquired portfolios versus originated loans just because of the customer relationship aspect. And you're obviously mixing further and further towards originated portfolios. I'm kind of curious where you'll end up kind of from a consolidated basis in terms of acquired versus originated MSRs. The one thing I would say on that front is we will always be active looking for portfolios of MSRs for the overall company. We've clearly learned over the course of the past couple of years that the markets themselves, some of our peers are very, very good at refinancing loans, and we need to be mindful of that and think about that in the rate environment. We think that the opportunity to acquire loans or acquire businesses will come our way or MSRs, I should say, but I think the manufacturing plant that we currently have will provide enough lift for our overall company that if we want to flip a switch and create, for example, more in wholesale and/or correspondent or some of the other channels, we can do that pretty easily. I think most of our growth will come internally because we want to, to Sanjiv's point, have that 30-year contract with the customer. But we'll also be mindful of if there's opportunities to acquire companies and/or other portfolios of MSRs, we'll do so. That's great. I really appreciate it. And I'll jump back in with you. Thank you. Thank you. And the next question comes from Henry Coffey with Wedbush. Good morning, everyone. And congratulations on the close. And Michael, I've already gotten at least two emails from investors complimenting you on the dividend increase. So that was important. That was very important. Everybody likes a dividend, Henry. It was very, very important to investors. Yes. And so thank you. More to the point, looking at the data in the slide deck, the trends in gain on sale margins seem reasonably consistent, of course, across channels at both companies. We've gotten different reads about August and September. But what are your thoughts in terms of volume, which you've already expressed, but also in terms of where margins in the different channels may end up relative to the June quarter? So the way I would really just explain it is we obviously had some volatility coming in the spring. And then rates went down in June. And obviously, other market events such as the removal of the adverse market fee certainly helped originations overall. What I would tell you is we saw certainly a flattening of margins in June. And I think that that has continued. And the way I would best describe it, Henry, is that we're kind of range-bound. So when you take a look at the slide on slide 19, you kind of see the high and low by channel. I would just tell you that we're in that range-bound. We were there in June. We were there in July. And we're seeing that in August as well. Right? So we're certainly more range-bound. From a volume perspective, it's the same thing. Right? We saw a pickup in June. And then we've seen kind of that flatten out for the months of July and August. And obviously, we'll continue to perform well. I think in any market, as we discussed, right, in the context of even in a higher rate environment, we're going to continue to see our purchase channels continue to perform well in a refinance market, which we continue to have. But I would say that for the most part, we're kind of seeing kind of a more stable environment, at least for the last three months. Yeah. I totally agree with that. We saw a little bit of pickup in August, mainly because, as Mike said before, because of the ten-year dropping a little bit and the adverse market fee back on the business, but as Baron pointed out, also, the purchase mix is significantly shifting in our way while we are growing volume, so we are still looking at $45-odd billion of production in the third quarter on an annualized run rate basis. That's still sort of in the $175 billion-$180 billion. This is just straight arithmetic. We haven't combined synergies yet, but that's kind of so very strong volumes, very strong margins. And then you've got lots of channels here. Exactly, and that's what I was going. Hopefully, the stack on the wholesale side between the big two will stop and margins will pick up a little bit as people get more rational. That's the problem with monolines as opposed to being diversified. We pulled back on wholesale a little bit. We'll press again in the third and fourth quarter. In fact, we are projecting a slight increase in wholesale margins as the bloodletting stops in that channel. On the other side, we talked about acquisitions and MSRs. Maybe I'll put these into two questions so we don't have, so I can get off the line. You've got the number three player is going through a lot of financial distress and selling below book value. Then on the flip side, with the speeds, it looks like speeds are still high and MSRs are still under pressure. Any comments on those sort of two broad subjects would be appreciated. Other than that, congratulations. Thanks for the dividend. I'll get off the line and just listen to the question, the answer, the answer, not the question. Stay well. I don't know that there's any bloodletting anywhere. MSRs have held up extremely well. We haven't seen real gains in values of MSRs as obviously as a result of where we are in the rate cycle. We are starting to see some folks that, if you roll back the clock to last year, might have refinanced at that point. We're seeing less activity that way, more so today because a lot of folks have already refinanced already. Listen, we root for all of our peers, all of our competitors. It's a big marketplace. I was looking at some statistics. I mean, the housing market at the end of 2020, I think, was $30+ trillion. I mean, it's got to be what, 50 or something like that, $40 trillion-$50 trillion. There's a lot of opportunity, I think, for everybody there. Again, we're rooting for everybody. MSRs have held on pretty well here. And that's all I would say. Thank you. Thank you. Thank you. And the next question comes from Stephen Laws with Raymond James. Hi. Good morning. Good morning. Michael morning. Michael and Sanjiv, kind of a question around really a follow-up to Henry's question on margins. But on page 19, as you guys lay out, across direct-to-consumer and the retail JV, Newrez margins were up like 15% and 10% respectively. Roughly the inverse was true at Caliber. Can you talk about why those in the two different businesses being combined are moving in different directions or why those move in different directions in Q2 on a sequential basis and how we should think about the margin of the combined company settling out? Retail, for example, 480 at Newrez versus 350 at Caliber. So it's a pretty wide range. Yeah. It's a one-month number. Right? It was really we were able to kind of take margin in April, which kind of threw out kind of what our weighted average is. We're normalized now, which is really along the lines on the same comment that I'm saying that June, July, August, we're going to be range-bound for both the JV channel and the retail channel, the distributed retail. And you're going to see, obviously, the JV businesses are in different markets than the distributed retail. Another really positive synergy between the both organizations, so you're just going to find us to be range-bound. And that was really just driven by that one month. I appreciate the color there. I wanted to touch on the ancillary services, maybe generally and also within the combined portfolio, as we see the shift, the volume mix towards more, excuse me, the mix shift towards more purchase and less refi. Can you talk about any incremental ancillary service opportunities you have on purchase that aren't there on refi? Is it 10% more revenue opportunity or is it a multiple of two or 3x more opportunity for the ancillary services to purchase? I'll pass this over to Baron in a second, but one small correction, and it might be semantic, but in our view, it's an important correction. We don't call them ancillary anymore. We call them services because we believe that these are real businesses. And you saw one of the title businesses created a pretty high multiple recently. We really think about them as services businesses on top of originations businesses, mainly because we think about offsetting the earnings volatility in mortgage origination businesses with services businesses. So that's number one. But we do see a huge opportunity. I see a huge opportunity. And I know Baron and Michael have always seen this opportunity. But coming in, I see this as a great opportunity, particularly on the title side of the business with the combined company. On the combined direct-to-consumer business, I think that would be of huge value and asymmetrical value. Yeah. I mean, look, the growth there is clearly evident in the context of, one, just the size of the direct-to-consumer business overall, and we continue to focus on that channel. But then, two, it's really kind of how do we penetrate that business within the other channels. We also have an appraisal business that we're going to continue to do the same. And then you really need to look at how do we basically penetrate other third-party accounts and bring in other clients. And you can have a good benchmark from us. And how we look at it is some of our competitors have larger title businesses that have done very, very well, especially going into 2020 and how they do business. They're vendors of ours as well. So we've really recognized the opportunity in front of us to continue to grow both our appraisal and title businesses.. Then, Stephen, one other thing. When you think about the corporate on NRZ, we own a property preservation business in Guardian, which has third-party clients. We continue to, and we have an investment in Covius. We continue to evaluate the so-called services business. To Sanjiv's point, when you look at title and where some of these companies trade on a multiple basis, this is why I harp on the same common theme around our equity and why I think we're undervalued because these things trade at a multiple of earnings and a multiple of book. Right now, we're not valued that way. Hopefully, we get back. I think that this nickel dividend increase is the start of hopefully something that continues and gets us back to where we were trading pre-COVID. It's a very, very important part of who we are. And that's why I brought up $40 trillion-$50 trillion housing market. There's a lot of things that come out of the housing market that are just not just origination and servicing. There's a lot of stuff that's going to come out of that that I think could be accretive for our shareholders. It's a very powerful ecosystem. Great. Thanks for the comments this morning. Thank you. Thank you. And this concludes our question and answer session. I would like to turn the call back to Michael Nierenberg for any closing comments. Sure. So first of all, thanks to everybody for joining us this morning. I'd like to extend an official welcome to Sanjiv and his leadership team and all the folks at Caliber. Same thing to Baron and the group at Newrez. We do think we will be. We're on our way to being best in class across the board. I pointed out, I've been asked on many earnings calls, "How do we think about ourselves versus some of the largest players in the marketplace, including Rocket?" And I said, "It's something that we're never going to be there." I can't say that now. There's no reason why we can't be the best of the best. And again, it's a huge ecosystem, a huge marketplace that there's room for all of us. But we're going to gain market share. We're going to be better. We're going to be great at customer service. We're going to work with homeowners. And when I think about the value prop for our company at NRZ as an investment manager, this is just one piece to the bigger pie here. I look at some of the peers on the mortgage company side. When I look at book value and where they trade from a market cap standpoint, I look at who we are and what we do. There is no reason why we can't do great things here. So we appreciate everybody's support. Welcome again to the Caliber family. Welcome again to the Newrez team. Let's put this thing together. The hard work has already begun. And we look forward to updating you in the near future. Stay well, everyone. Enjoy the rest of the summer. And thank you. Thank you. The conference has now concluded. Thank you for attending today's presentation. Let me now disconnect our lines.