Risk Factors Update Summary

• Increases in delinquencies and defaults may adversely affect business, financial condition, and liquidity. This includes making servicing advances subject to delays or non-recovery, potentially impacting financial results.
• The future issuance of additional common stock increased from 4 million to 9 million shares.
• Failure to address reputational risks and cybersecurity threats could harm business and earnings.
• The number of authorized common stock shares increased from 6 million to 9 million.
• Significant increase in total indebtedness from $7.8 billion to $8.6 billion, with $5.6 billion secured, and up to $6.8 billion additional capacity under secured borrowings.
• Initiating a closed-end second lien mortgage loan product exposes us to higher loss risks.
• Changes in interest rates led to a decrease in net revenues from $3.2 billion in 2021 to $1.4 billion in 2023.
• Developing new products may expose us to new risks and regulatory compliance requirements.
• Enhanced minimum net capital and liquidity eligibility requirements for sellers, servicers, and issuers, effective by December 31, 2023.
• Potential regulatory changes post-2024 U.S. elections could significantly impact operating expenses, mortgage financing availability, interest rates, and the economy.
• Failure to comply with privacy laws could result in enforcement actions, fines, and harm to reputation, affecting business operations.