10-Q/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________to ______________

Commission File Number: 001-35777

New Residential Investment Corp.

(Exact name of registrant as specified in its charter)

Delaware	45-3449660
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1345 Avenue of the Americas, New York, NY	10105
(Address of principal executive offices)	(Zip Code)

(212) 798-3150

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ (Do not check if a smaller reporting company) Smaller reporting company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date.

Common stock, $0.01 par value per share: 253,025,645 shares outstanding as of June 30, 2013. 

Explanatory Note

The purpose of this Amendment No. 1 to New Residential Investment Corp.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, filed with the Securities and Exchange Commission on June 12, 2013 (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).

No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.

Item 6. Exhibits

Exhibit Number	Exhibit Description
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

*XBRL (Extensible Business Reporting Language) information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: 

NEW RESIDENTIAL INVESTMENT CORP.
By:	/s/ Kenneth M. Riis
	Kenneth M. Riis
	Chief Executive Officer and President
	July 12, 2013
By:	/s/ Robert Williams
	Robert Williams
	Chief Financial Officer and Treasurer
	July 12, 2013
By:	/s/ Jonathan R. Brown
	Jonathan R. Brown
	Principal Accounting Officer

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INCOME TAXES

3 Months Ended

Mar. 31, 2013

Income Taxes

INCOME TAXES

11.     INCOME TAXES

New Residential intends to qualify as a REIT for the tax year ending December 31, 2013. A REIT is generally not subject to U.S. federal corporate income tax on that portion of its income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements. New Residential was a wholly owned subsidiary of Newcastle until May 15, 2013 and, as a qualified REIT subsidiary, was a disregarded entity until such date. As a result, no provision or liability for U.S. federal or state income taxes has been included in the accompanying consolidated financial statements for the periods ended March 31, 2013 or 2012.

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FAIR VALUE OF FINANCIAL INSTRUMENTS - INPUTS EXCESS MSRs (Details 2)	3 Months Ended
	Mar. 31, 2013
MSRs Pool 6
Held through Equity Method Investees (Note 6):
Prepayment speed	19.60%	[1]
Delinquency	8.80%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.25%	[4]
Discount rate	17.40%
MSR Pool 6 Recapture Agreement
Held through Equity Method Investees (Note 6):
Prepayment speed	10.00%	[1]
Delinquency	6.00%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.23%	[4]
Discount rate	17.40%
MSRs Pool 7
Held through Equity Method Investees (Note 6):
Prepayment speed	13.80%	[1]
Delinquency	8.40%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.16%	[4]
Discount rate	15.20%
MSR Pool 7 Recapture Agreement
Held through Equity Method Investees (Note 6):
Prepayment speed	10.00%	[1]
Delinquency	5.00%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.19%	[4]
Discount rate	15.20%
MSRs Pool 8
Held through Equity Method Investees (Note 6):
Prepayment speed	15.20%	[1]
Delinquency	7.40%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.19%	[4]
Discount rate	15.00%
MSR Pool 8 Recapture Agreement
Held through Equity Method Investees (Note 6):
Prepayment speed	10.00%	[1]
Delinquency	5.00%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.19%	[4]
Discount rate	15.00%

[1] Projected annualized weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector.

[2] Projected percentage of mortgage loans in the pool that will miss their mortgage payments.

[3] Percentage of voluntarily prepaid loans that are expected to be refinanced by Nationstar.

[4] Weighted average total mortgage servicing amount in excess of the basic fee.

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Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Statement of Other Comprehensive Income [Abstract]
Net income	$ 13,075	$ 2,688
Other comprehensive income:
Net unrealized gain on securities	16,183
Other comprehensive income	16,183
Comprehensive income	$ 29,258	$ 2,688

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INVESTMENTS IN REAL ESTATE SECURITIES

3 Months Ended

Mar. 31, 2013

Investments In Real Estate Securities

INVESTMENTS IN REAL ESTATE SECURITIES

4.     INVESTMENTS IN REAL ESTATE SECURITIES

During 2013, New Residential acquired $373.8 million face amount of Non-Agency RMBS for approximately $227.3 million. In addition, Newcastle contributed $754.5 million face amount of Agency RMBS to New Residential during this period.

The following is a summary of New Residential’s real estate securities at March 31, 2013, all of which are classified as available-for-sale and are, therefore, reported at fair value with changes in fair value recorded in other comprehensive income.

					Gross Unrealized									Weighted Average
	Outstanding Face		Amortized							Carrying		Number of		Rating								Maturity (Years)		Principal Subordination
Asset Type	Amount		Cost Basis		Gains		Losses			Value (A)		Securities		(B)		Coupon			Yield			(C)		(D)
Agency RMBS (F)	$	754,496	$	797,547	$	2,832	$	(924	)	$	799,455		42		AAA		3.29	%		1.46	%		4.1		N/A
Non-Agency RMBS		784,259		488,767		30,936		(1,135	)		518,568		53		CC		0.67	%		6.20	%		7.6		7.7	%
Total/Weighted Average (E)	$	1,538,755	$	1,286,314	$	33,768	$	(2,059	)	$	1,318,023		95		BB+		1.95	%		3.26	%		5.9

(A)	Fair value, which is equal to carrying value for all securities. See Note 8 regarding the estimation of fair value.
(B)	Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. For each security rated by multiple rating agencies, the lowest rating is used. Ratings provided were determined by third party rating agencies as of a particular date, may not be current and are subject to change at any time.
(C)	The weighted average maturity is based on the timing of expected principal reduction on the assets.
(D)	Percentage of the outstanding face amount of securities and residual interests that is subordinate to New Residential’s investments.

(E)	The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.
(F)	Includes securities issued or guaranteed by U.S. Government agencies such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”).

During the three months ended March 31, 2013, New Residential recorded no other-than-temporary impairment charge (“OTTI”) related to its real estate securities. The unrealized losses on New Residential’s securities were primarily the result of changes in market factors, rather than issuer-specific credit impairment. New Residential performed analyses in relation to such securities, using management’s best estimate of their cash flows, which support its belief that the carrying values of such securities were fully recoverable over their expected holding period. New Residential has no intent to sell and is not more likely than not to be required to sell these securities. The following table summarizes New Residential’s securities in an unrealized loss position at March 31, 2013:

									Gross Unrealized									Weighted Average
Securities in a Loss Position	Outstanding Current Face		Before Impairment		Other Than Temporary Impairment		After Impairment		Gains		Losses			Carry Value		Number of Securities		Rating		Coupon			Yield			Maturity (Years)
Less than Twelve Months	$	397,038	$	332,125	$	—	$	332,125	$	—	$	(2,053	)	$	330,072		24		BB		1.99	%		2.58	%		6.7
Twelve or More Months		7,551		8,074		—		8,074		—		(6	)		8,068		1		AAA		2.77	%		0.88	%		4.7
Total	$	404,589	$	340,199	$	—	$	340,199	$	—	$	(2,059	)	$	338,140		25		BB		2.01	%		2.54	%		6.7

The table below summarizes the geographic distribution of the collateral securing New Residential’s Non-Agency RMBS at March 31, 2013:

Geographic Location	Outstanding Face Amount		Percentage of Total Outstanding
Western U.S.	$	292,665		37.3	%
Northeastern U.S.		178,621		22.8	%
Southeastern U.S.		166,243		21.2	%
Midwestern U.S.		87,029		11.1	%
Southwestern U.S.		59,696		7.6	%
Other U.S.		5		0.0	%
	$	784,259		100.0	%

New Residential evaluates the credit quality of its real estate securities, as of the acquisition date, for evidence of credit quality deterioration. As a result, New Residential identified a population of real estate securities for which it was determined that it was probable that New Residential would be unable to collect all contractually required payments. For securities acquired during the three months ended March 31, 2013, the face amount of these real estate securities was $368.7 million, with total expected cash flows of $280.4 million and a fair value of $222.8 million. The following is the outstanding face amount and carrying value for such securities at December 31, 2012 and March 31, 2013:

		Outstanding Face Value		Carrying Value
December 31, 2012	$	342,013	$	212,129
March 31, 2013	$	692,140	$	436,458

The following is a summary of the changes in accretable yield for these securities:

	For the Three Months Ended March 31, 2013
Balance at December 31, 2012	$	90,077
Additions		57,568
Accretion		(4,223	)
Reclassifications from non-accretable difference		49,442
Disposals		—
Balance at March 31, 2013	$	192,864

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INVESTMENTS IN EQUITY METHOD INVESTEES (Tables)

3 Months Ended

Mar. 31, 2013

Investments In Equity Method Investees Tables

Schedule of investments in equity method investees

The following tables summarize the investments in equity method investees held by New Residential at March 31, 2013:

	March 31, 2013
Assets (A)	$	275,779
Debt		—
Other Liabilities		(70,603	)
Equity	$	205,176
New Residential’s Investment	$	102,588
New Residential’s Ownership		50.0	%

(A) Includes $20.8 million of deposits related to investments which have not closed at March 31, 2013.

	Three Months Ended March 31, 2013
Interest income	$	5,616
Other income		(3,154	)
Expenses		(524	)
Net Income	$	1,938

Schedule of Excess Mortgage Servicing Rights (MSRs) investments made through equity method investees

The following is a summary of New Residential’s Excess MSR investments made through equity method investees:

	March 31, 2013
	Unpaid Principal Balance		Investee Interest in Excess MSR			New Residential Interest in Investees			Amortized Cost Basis (A)		Carrying Value (B)		Weighted Average Yield			Weighted Average Maturity (Years) (C)
MSR Pool 6	$	11,821,572		66.7	%		50.0	%	$	42,388	$	41,453		17.4	%		4.9
MSR Pool 6 - Recapture Agreement		—		66.7	%		50.0	%		10,954		10,972		17.4	%		10.7
MSR Pool 7		36,440,577		66.7	%		50.0	%		109,420		109,048		15.2	%		5.1
MSR Pool 7 - Recapture Agreement		—		66.7	%		50.0	%		23,296		23,164		15.2	%		12.0
MSR Pool 8		16,613,186		66.7	%		50.0	%		58,748		57,177		15.0	%		5.0
MSR Pool 8 - Recapture Agreement		—		66.7	%		50.0	%		13,312		13,150		15.0	%		11.7
	$	64,875,335							$	258,118	$	254,964		15.6	%		6.3

(A)	Represents the amortized cost basis of the equity method investees in which New Residential holds a 50% interest. The amortized cost basis of the Recapture Agreements is determined based on the relative fair values of the Recapture Agreements and related Excess MSRs at the time they were acquired.
(B)	Represents the carrying value of the equity method investees in which New Residential holds a 50% interest. Carrying value represents the fair value of the pools or Recapture Agreements, as applicable.
(C)	The weighted average maturity represents the weighted average expected timing of the receipt of cash flows of each investment.

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FAIR VALUE OF FINANCIAL INSTRUMENTS - REAL ESTATE SECURITIES VALUATION (Details 4) (USD $) In Thousands, unless otherwise specified	Jun. 12, 2013	Mar. 31, 2013
Outstanding face amount		$ 1,538,755	[1]
Amortized cost basis		1,286,314	[1]
Total Fair Value		1,318,023
Multiple Quotes
Total Fair Value		1,214,414	[2]
Single Quotes
Total Fair Value		103,609	[3]
FNMA/FHLMC Securities
Outstanding face amount		754,496	[4]
Amortized cost basis		797,547	[4]
Total Fair Value		799,455	[4]
FNMA/FHLMC Securities | Multiple Quotes
Total Fair Value		709,173	[2],[4]
FNMA/FHLMC Securities | Single Quotes
Total Fair Value		90,282	[3],[4]
Non-Agency RMBS
Outstanding face amount	156,400	784,259
Amortized cost basis		488,767
Total Fair Value		518,568
Non-Agency RMBS | Multiple Quotes
Total Fair Value		505,241	[2]
Non-Agency RMBS | Single Quotes
Total Fair Value		$ 13,327	[3]

[1] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

[2] Management generally obtained pricing service quotations or broker quotations from two sources, one of which was generally the seller (the party that sold New Residental the security). Management selected one of the quotes received as being most representative of the fair value and did not use an average of the quotes. Even if New Residential receives two or more quotes on a particular security that come from non-selling brokers or pricing services, it does not use an average because management believes using an actual quote more closely represents a transactable price for the security than an average level. Furthermore, in some cases there is a widedisparity between the quotes New Residential receives. Management believes using an average of the quotes in these cases would not represent the fair value of the asset. Based on New Residential's own fair value analysis using internal models, management selects one of the quotes which is believed to more accurately reflect fair value. New Residential never adjusts quotes received. These quotations are generally received via email and contain disclaimers which state that they are "indicative" and not "actionable" - meaning that the party giving the quotation is not bound to actually purchase the security at the quoted price.

[3] Management was unable to obtain quotations from more than one source on these securities. The one source was generally the seller (the party that sold New Residential the security) or a pricing service.

[4] Includes securities issued or guaranteed by U.S. Government agencies such as the Federal National Mortgage Association ("Fannie Mae") or the Federal Home Loan Mortgage Corporation ("Freddie Mac").

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RECENT ACTIVITIES

3 Months Ended

Mar. 31, 2013

Recent Activities

RECENT ACTIVITIES

12.     RECENT ACTIVITIES

These financial statements include a discussion of material events that have occurred subsequent to March 31, 2013 (referred to as “subsequent events”) through the issuance of these consolidated financial statements. Events subsequent to that date have not been considered in these financial statements.

On March 5, 2013, New Residential agreed to co-invest in a portfolio of consumer loans with a UPB of approximately $4.2 billion as of December 31, 2012. The portfolio includes over 400,000 personal unsecured loans and personal homeowner loans originated through subsidiaries of HSBC Finance Corporation. On April 1, 2013, New Residential completed this co-investment through newly formed limited liability companies (collectively, “the consumer loan companies”). The consumer loan companies acquired the portfolio from HSBC Finance Corporation and its affiliates. New Residential invested approximately $250 million for 30% membership interests in each of the consumer loan companies. Of the remaining 70% of the membership interests, Springleaf Finance, Inc. (“Springleaf”), which is majority-owned by Fortress funds managed by New Residential’s Manager, acquired 47%, and an affiliate of Blackstone Tactical Opportunities Advisors L.L.C. acquired 23%. Springleaf will act as the managing member of the consumer loan companies. The consumer loan companies financed $2.2 billion of the approximately $3.0 billion purchase price with asset-backed notes. The consumer loan companies were formed on March 19, 2013, for the purpose of making this investment and commenced operations upon the completion of the investment. After a servicing transition period, Springleaf will be the servicer of the loans and will provide all servicing and advancing functions for the portfolio. Consumer loans will be treated as a separate segment. Included in general and administrative expenses for the three months ended March 31, 2013 is approximately $2.5 million of professional fees related to consumer loans.

On April 9, 2013, New Residential financed additional Non-Agency RMBS with approximately $144 million of repurchase agreements, at a cost of one-month LIBOR plus 200 bps. The weighted average advance rate for these repurchase agreements was approximately 70%. These repurchase agreements, which contain customary margin call provisions, have an initial term ending on July 9, 2013.

On April 19, 2013, the Master Repurchase Agreement between NIC RMBS LLC and Credit Suisse Securities LLC was amended. Under the terms of the amendment, Newcastle was terminated as the Guarantor and replaced by New Residential on May 15, 2013.

On April 26, 2013, Newcastle announced that its board of directors had formally declared the distribution of shares of common stock of New Residential, a then wholly owned subsidiary of Newcastle. Following the spin-off, New Residential is an independent, publicly-traded REIT primarily focused on investing in residential mortgage related assets. The spin-off was completed on May 15, 2013 and New Residential began trading on the New York Stock Exchange under the symbol “NRZ”. The spin-off transaction was effected as a taxable pro rata distribution by Newcastle of all the outstanding shares of common stock of New Residential to the stockholders of record of Newcastle as of May 6, 2013. The stockholders of Newcastle as of the record date received one share of New Residential common stock for each share of Newcastle common stock held.

On April 29, 2013, New Residential’s certificate of incorporation was amended so that its authorized capital stock now consists of 2,000,000,000 shares of common stock, par value $0.01 per share, and 100,000,000 shares of preferred stock, par value $0.01 per share. After completion of the spin-off, there are 253,025,645 outstanding shares of common stock which is based on the number of Newcastle’s shares of common stock outstanding on May 6, 2013 and a distribution ratio of one share of New Residential common stock for each share of Newcastle common stock.

Effective May 15, 2013, the Manager is entitled to receive annual incentive compensation in an amount equal to the product of (A) 25% of the dollar amount by which (1) (a) New Residential’s funds from operations before the incentive compensation per share of common stock, plus (b) gains (or losses) from debt restructuring and gains (or losses) from sales of property and other assets per share of common stock, exceed (2) an amount equal to (a) the weighted average of the book value per share of the equity transferred by Newcastle on the distribution date and the prices per share of New Residential’s common stock in any offerings (adjusted for prior capital dividends or capital distributions) multiplied by (b) a simple interest rate of 10% per annum, multiplied by (B) the weighted average number of shares of common stock outstanding. “Funds from operations” means net income (computed in accordance with GAAP), excluding gains (losses) from debt restructuring and gains (or losses) from sales of property, plus depreciation on real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations will be computed on an unconsolidated basis. The computation of funds from operations may be adjusted at the direction of New Residential’s independent directors based on changes in, or certain applications of, GAAP. Funds from operations is determined from the date of the spin-off and without regard to Newcastle’s prior performance. Funds from operations does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income as an indication of New Residential’s performance or to cash flows as a measure of liquidity or the ability to make distributions.

Effective May 15, 2013, the Manager is entitled to receive a management fee in the amount equal to 1.5% per annum of New Residential’s gross equity calculated and payable monthly in arrears in cash. Gross equity is generally the equity transferred by Newcastle on the distribution date, plus total net proceeds from stock offerings, plus certain capital contributions to subsidiaries, less capital distributions and repurchases of common stock.

On May 15, 2013, New Residential had a cash balance of $181.6 million.

On May 20, 2013, New Residential acquired, through a joint venture, an interest in Excess MSRs from Nationstar on a portfolio of mortgage loans with an UPB of approximately $23 billion as of March 31, 2013. New Residential has committed to invest approximately $40.2 million to acquire a one-third interest in the Excess MSRs. Nationstar is the servicer of the loans and has retained a one-third interest in the Excess MSRs; a Fortress managed fund has acquired the remaining one-third interest. Under the terms of this investment, to the extent that any loans in the portfolio are refinanced by Nationstar, the resulting Excess MSRs will be included in the portfolio, subject to certain limitations. New Residential, Nationstar and the Fortress fund will share equally in these Excess MSRs.

Effective upon the spin-off, New Residential has a Nonqualified Stock Option and Incentive Award Plan (the “Plan”) which provides for the grant of equity-based awards, including restricted stock, stock options, stock appreciation rights, performance awards, tandem awards and other equity-based and non equity based awards, in each case to the Manager, and to the directors, officers, employees, service providers, consultants and advisor of the Manager who perform services for New Residential, and to New Residential’s directors, officers, service providers, consultants and advisors. New Residential has initially reserved 30,000,000 shares of its common stock for issuance under the Plan; on the first day of each fiscal year beginning during the ten-year term of the Plan in and after calendar year 2014, that number will be increased by a number of shares of New Residential’s common stock equal to 10% of the number of shares of common stock newly issued by New Residential during the immediately preceding fiscal year (and, in the case of fiscal year 2013, after the effective date of the Plan). New Residential’s board of directors may also determine to issue options to the Manager that are not subject to the Plan, provided that the number of shares underlying any options granted to the Manager in connection with capital raising efforts would not exceed 10% of the shares sold in such offering and would be subject to NYSE rules.

Prior to the spin-off, Newcastle had issued options to the Manager in connection with capital raising activities. In connection with the spin-off, 21.5 million options that were held by FIG LLC, (the Manager), or by the directors, officers or employees of the Manager, were converted into an adjusted Newcastle option and a new New Residential option. The exercise price of each adjusted Newcastle option and New Residential option was set to collectively maintain the intrinsic value of the Newcastle option immediately prior to the spin-off and to maintain the ratio of the exercise price of the adjusted Newcastle option and the New Residential option, respectively, to the fair market value of the underlying shares as of the spin-off date, in each case based on the five day average closing price subsequent to the spin-off date.

New Residential’s outstanding options at May 15, 2013 consisted of the following:

	Number of Options		Strike Price		Maturity Date
		6,000	$	9.35	05/30/13
		116,380		10.91	07/16/13
		304,604		12.28	12/01/13
		328,350		14.17	01/09/14
		343,275		13.86	05/25/14
		162,500		16.95	11/22/14
		330,000		15.97	01/12/15
		2,000		16.68	08/01/15
		170,000		15.87	11/01/16
		242,000		16.90	01/23/17
		456,000		14.96	04/11/17
		1,676,833		3.29	03/29/21
		2,539,833		2.49	09/27/21
		2,000		2.74	12/20/21
		1,897,500		3.41	04/03/22
		2,300,000		3.67	05/21/22
		2,530,000		3.67	07/31/22
		5,750,000		5.12	01/11/23
		2,300,000		5.74	02/15/23
Total/WA		21,457,275	$	5.35

On June 3, 2013, New Residential granted options to its independent directors to purchase 8,000 shares of New Residential’s stock at a price of $6.79.

On June 6, 2013, New Residential financed additional Non-Agency RMBS with approximately $47.0 million of repurchase agreements, at a cost of one-month LIBOR plus 160 bps. The weighted average advance rate for these repurchase agreements was approximately 65%. These repurchase agreements, which contain customary margin call provisions, have an initial term ending on June 28, 2013.

Subsequent to March 31, 2013, New Residential acquired approximately $156.4 million face amount of Non-Agency RMBS for approximately $122.0 million. New Residential also purchased $97.5 million of Agency RMBS for approximately $103.0 million. Newcastle contributed an additional $265.6 million face amount of Agency RMBS subsequent to March 31, 2013 with a fair value of approximately $281.2 million as of the contribution date. These additional agency RMBS were financed with $267.0 million of repurchase agreements.

New Residential declared a quarterly dividend of $0.07 per common share for the quarter ended June 30, 2013, which will be paid in July 2013.

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INVESTMENTS IN EQUITY METHOD INVESTEES (Details Narrative) (USD $) In Thousands, unless otherwise specified	3 Months Ended			0 Months Ended
	Mar. 31, 2013	Mar. 31, 2013 MSRs	Jun. 29, 2012 MSRs	Jan. 04, 2013 Equity Method Investments MSRs	Mar. 31, 2013 Equity Method Investments MSRs	Nov. 30, 2012 Equity Method Investments MSRs	Jan. 06, 2013 Equity Method Investments Excess MSRs	Nov. 30, 2012 Equity Method Investments Excess MSRs	May 20, 2013 Equity Method Investments Excess MSRs	Dec. 31, 2012 Equity Method Investments Excess MSRs
Deposits for purchase of investments	$ 20,800
Unpaid principal balance of underlying loans		73,322,892			64,875,335	13,000,000		215,000,000	23,000,000	58,000,000
Amount contributed to acquire joint venture	80,700			28,900
Amount committed to invest in joint venture							$ 340,000		$ 40,200
Percentage ownership acquired in joint venture	50.00%			50.00%			50.00%
Percentage of Investment co-owned by Nationstar			35.00%	33.00%			33.00%
Percentage of Investment owned by New Residential			65.00%	67.00%			67.00%
Loans in private label securitizations portfolio (percent)			75.00%				53.00%

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FAIR VALUE OF FINANCIAL INSTRUMENTS - NON-AGENCY RMBS LEVEL 3 (Details 5) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Transfers
Amortization included in interest income	$ 4,798
Recurring Basis | Non-Agency RMBS | Level 3 Inputs
Balance, beginning	289,756
Transfers
Transfers from Level 3		[1]
Transfers into Level 3		[1]
Gains (losses) included in net income
Gains (losses) included in comprehensive income	14,267	[2]
Amortization included in interest income	4,724
Purchases, sales and repayments
Purchases	227,293
Proceeds from repayments	(17,472)
Balance, ending	$ 518,568

[1] Transfers are assumed to occur at the beginning of the respective period.

[2] These gains (losses) were included in net unrealized gain (loss) on securities in the consolidated statements of comprehensive income.

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INVESTMENTS IN REAL ESTATE SECURITIES - GEOGRAPHIC DISTRIBUTION COLLATERAL (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 12, 2013	Mar. 31, 2013
Principal balance		$ 1,538,755	[1]
Non-Agency RMBS
Principal balance	156,400	784,259
Percentage of principal balance		100.00%
Non-Agency RMBS | Western US
Principal balance		292,665
Percentage of principal balance		37.30%
Non-Agency RMBS | Northeastern US
Principal balance		178,621
Percentage of principal balance		22.80%
Non-Agency RMBS | Southeastern US
Principal balance		166,243
Percentage of principal balance		21.20%
Non-Agency RMBS | Midwestern US
Principal balance		87,029
Percentage of principal balance		11.10%
Non-Agency RMBS | Southwestern US
Principal balance		59,696
Percentage of principal balance		7.60%
Non-Agency RMBS | Other Locations
Principal balance		$ 5
Percentage of principal balance		0.00%

[1] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

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TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES (Tables)

3 Months Ended

Mar. 31, 2013

Transactions With Affiliates And Affiliated Entities Tables

Schedule of due to affiliate

Due to affiliate is comprised of the following amounts due to Newcastle:

	March 31, 2013		December 31, 2012
Management fees payable	$	5,717	$	3,392
Reimbursable expenses payable		2,067		1,744
	$	7,784	$	5,136

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Of Financial Instruments Tables

Schedule of Fair Value of Assets Measured on a Recurring Basis

The carrying value and fair value of New Residential’s financial assets recorded at fair value on a recurring basis at March 31, 2013 were as follows:

					Fair Value
	Principal Balance or Notional Amount		Carrying Value		Level 2		Level 3		Total
Assets:
Real estate securities, available-for-sale	$	1,538,755	$	1,318,023	$	799,455	$	518,568	$	1,318,023
Investments in Excess MSRs (A)		73,322,892		236,555		—		236,555		236,555
Investments in equity method investees at fair value (A)		64,875,335		102,588		—		102,588		102,588
	$	139,736,982	$	1,657,166	$	799,455	$	857,711	$	1,657,166

(A) The notional amount represents the total unpaid principal balance of the mortgage loans underlying the Excess MSRs. Generally, New Residential does not receive an excess mortgage servicing amount on nonperforming loans.

Schedule of Inputs used in Valuing the Excess MSRs owned directly and through equity method investees

The following table summarizes certain information regarding the inputs used in valuing the Excess MSRs owned directly and through equity method investees as of March 31, 2013:

	Significant Inputs
Held Directly (Note 3)	Prepayment Speed (A)			Delinquency (B)			Recapture Rate (C)			Excess Mortgage Servicing Amount (D)		Discount Rate
MSR Pool 1		16.1	%		10.0	%		35.0	%		28 bps		18.0	%
MSR Pool 1 - Recapture Agreement		8.0	%		10.0	%		35.0	%		21 bps		18.0	%
MSR Pool 2		16.0	%		11.0	%		35.0	%		23 bps		17.3	%
MSR Pool 2 - Recapture Agreement		8.0	%		10.0	%		35.0	%		21 bps		17.3	%
MSR Pool 3		16.2	%		12.1	%		35.0	%		23 bps		17.6	%
MSR Pool 3 - Recapture Agreement		8.0	%		10.0	%		35.0	%		21 bps		17.6	%
MSR Pool 4		18.3	%		15.8	%		35.0	%		17 bps		17.9	%
MSR Pool 4 - Recapture Agreement		8.0	%		10.0	%		35.0	%		21 bps		17.9	%
MSR Pool 5		15.0	%		N/A (E)			20.0	%		13 bps		17.5	%
MSR Pool 5 - Recapture Agreement		8.0	%		N/A (E)			20.0	%		21 bps		17.5	%
Held through Equity Method Investees (Note 6)
MSR Pool 6		19.6	%		8.8	%		35.0	%		25 bps		17.4	%
MSR Pool 6 - Recapture Agreement		10.0	%		6.0	%		35.0	%		23 bps		17.4	%
MSR Pool 7		13.8	%		8.4	%		35.0	%		16 bps		15.2	%
MSR Pool 7 - Recapture Agreement		10.0	%		5.0	%		35.0	%		19 bps		15.2	%
MSR Pool 8		15.2	%		7.4	%		35.0	%		19 bps		15.0	%
MSR Pool 8 - Recapture Agreement		10.0	%		5.0	%		35.0	%		19 bps		15.0	%

(A)	Projected annualized weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector.
(B)	Projected percentage of mortgage loans in the pool that will miss their mortgage payments.
(C)	Percentage of voluntarily prepaid loans that are expected to be refinanced by Nationstar.
(D)	Weighted average total mortgage servicing amount in excess of the basic fee.
(E)	The Excess MSR will be paid on the total UPB of the mortgage portfolio (including both performing and delinquent loans until REO).

Schedule of Excess MSRs valued on a recurring basis using Level 3 inputs

Excess MSRs, owned directly, measured at fair value on a recurring basis using Level 3 inputs changed during the three months ended March 31, 2013 as follows:

	Level 3 (A)
		MSR Pool 1			MSR Pool 2			MSR Pool 3			MSR Pool 4			MSR Pool 5			Total
Balance at December 31, 2012	$	40,910		$	39,322		$	35,434		$	15,036		$	114,334		$	245,036
Transfers (B)
Transfers from Level 3(B)		—			—			—			—			—			—
Transfers into Level 3(B)		—			—			—			—			—			—
Gains (losses) included in net income (C)		440			897			798			98			(375	)		1,858
Interest income		1,970			1,485			1,628			601			4,340			10,024
Purchases, sales and repayments
Purchases		—			—			—			—			—			—
Purchase adjustments		—			—			—			—			—			—
Proceeds from sales		—			—			—			—			—			—
Proceeds from repayments		(3,632	)		(3,129	)		(3,182	)		(1,061	)		(9,359	)		(20,363	)
Balance at March 31, 2013	$	39,688		$	38,575		$	34,678		$	14,674		$	108,940		$	236,555

(A)	Includes the recapture agreement for each respective pool.
(B)	Transfers are assumed to occur at the beginning of the respective period.
(C)	The gains (losses) recorded in earnings during the period are attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting dates. These gains (losses) represent the change in fair value of the Excess MSRs and are recorded in “Change in fair value of investments in excess mortgage servicing rights” in the consolidated statements of income.

Schedule of investments in equity method investees valued on a recurring basis using Level 3 inputs

New Residential’s investments in equity method investees measured at fair value on a recurring basis using Level 3 inputs changed during the three months ended March 31, 2013 as follows:

	Three Months Ended March 31, 2013
Balance at December 31, 2012	$	—
Contributions to equity method investees		109,588
Distributions of earnings from equity method investees		(1,344	)
Distributions of capital from equity method investees		(6,625	)
Change in fair value of investments in equity method investees		969
Balance at March 31, 2013	$	102,588

Schedule of real estate securities valuation methodology and results

As of March 31, 2013 New Residential’s securities valuation methodology and results are further detailed as follows:

Asset Type	Outstanding Face Amount		Amortized Cost Basis		Multiple Quotes (A)		Single Quotes (B)		Total
Agency RMBS (C)	$	754,496	$	797,547	$	709,173	$	90,282	$	799,455
Non-Agency RMBS		784,259		488,767		505,241		13,327		518,568
	$	1,538,755	$	1,286,314	$	1,214,414	$	103,609	$	1,318,023

(A)	Management generally obtained pricing service quotations or broker quotations from two sources, one of which was generally the seller (the party that sold New Residential the security). Management selected one of the quotes received as being most representative of the fair value and did not use an average of the quotes. Even if New Residential receives two or more quotes on a particular security that come from non-selling brokers or pricing services, it does not use an average because management believes using an actual quote more closely represents a transactable price for the security than an average level. Furthermore, in some cases there is a wide disparity between the quotes New Residential receives. Management believes using an average of the quotes in these cases would not represent the fair value of the asset. Based on New Residential’s own fair value analysis using internal models, management selects one of the quotes which is believed to more accurately reflect fair value. New Residential never adjusts quotes received. These quotations are generally received via email and contain disclaimers which state that they are “indicative” and not “actionable” — meaning that the party giving the quotation is not bound to actually purchase the security at the quoted price.
(B)	Management was unable to obtain quotations from more than one source on these securities. The one source was generally the seller (the party that sold New Residential the security) or a pricing service.
(C)	Includes securities issued or guaranteed by U.S. Government agencies such as Fannie Mae or Freddie Mac.

Schedule of non-agency RMBS valued on a recurring basis using Level 3 inputs

Fair value estimates of New Residential’s Non-Agency RMBS were based on third party indications as of March 31, 2013 and classified as Level 3. Securities measured at fair value on a recurring basis using Level 3 inputs changed during the three months ended March 31, 2013 as follows:

	Level 3
	Non-Agency
	RMBS
Balance at December 31, 2012	$	289,756
Transfer (A)
Transfers from Level 3		—
Transfers into Level 3		—
Total Gains (Losses)
Included in net income		—
Included in comprehensive income (B)		14,267
Amortization included in interest income		4,724
Purchases, sales and repayments
Purchases		227,293
Proceeds from repayments		(17,472	)
Balance at March 31, 2013	$	518,568

(A)	Transfers are assumed to occur at the beginning of the respective period.
(B)	These gains (losses) were included in net unrealized gain (loss) on securities in the consolidated statements of comprehensive income.

Schedule of Inputs used in Valuing the reversel mortgage loans

The following table summarizes the inputs used in valuing reverse mortgage loans as of March 31, 2013:

									Significant Input
Loan Type	Outstanding Face Amount		Carrying Value		Fair Value		Valuation Allowance/ (Reversal) In Current Year		Discount Rate
Reverse Mortgage Loans	$	58,586	$	35,484	$	37,180	$	—	10.6%

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INVESTMENTS IN EQUITY METHOD INVESTEES - EXCESS MSR INVESTMENTS (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Jan. 04, 2013	Nov. 30, 2012
Ownership percentage in equity method investees	50.00%
Weighted average yield	3.26%
Weighted Average Maturity (Years)	5 years 11 months	[1],[2]
MSRs
Unpaid principal balance of underlying loans	$ 73,322,892
Amortized Cost Basis	225,308	[3]
Carrying Value	236,555	[4]
Weighted average yield	17.60%
Weighted Average Maturity (Years)	5 years 5 months
Equity Method Investments | MSRs Pool 6
Unpaid principal balance of underlying loans	11,821,572
Investee Interest in Excess MSR	66.70%
Ownership percentage in equity method investees	50.00%
Amortized Cost Basis	42,388	[5]
Carrying Value	41,453	[6]
Weighted average yield	17.40%
Weighted Average Maturity (Years)	4 years 11 months	[7]
Equity Method Investments | MSR Pool 6 Recapture Agreement
Unpaid principal balance of underlying loans
Investee Interest in Excess MSR	66.70%
Ownership percentage in equity method investees	50.00%
Amortized Cost Basis	10,954	[5]
Carrying Value	10,972	[6]
Weighted average yield	17.40%
Weighted Average Maturity (Years)	10 years 8 months	[7]
Equity Method Investments | MSRs Pool 7
Unpaid principal balance of underlying loans	36,440,577
Investee Interest in Excess MSR	66.70%
Ownership percentage in equity method investees	50.00%
Amortized Cost Basis	109,420	[5]
Carrying Value	109,048	[6]
Weighted average yield	15.20%
Weighted Average Maturity (Years)	5 years 1 month	[7]
Equity Method Investments | MSR Pool 7 Recapture Agreement
Unpaid principal balance of underlying loans
Investee Interest in Excess MSR	66.70%
Ownership percentage in equity method investees	50.00%
Amortized Cost Basis	23,296	[5]
Carrying Value	23,164	[6]
Weighted average yield	15.20%
Weighted Average Maturity (Years)	12 years	[7]
Equity Method Investments | MSRs Pool 8
Unpaid principal balance of underlying loans	16,613,186
Investee Interest in Excess MSR	66.70%
Ownership percentage in equity method investees	50.00%
Amortized Cost Basis	58,748	[5]
Carrying Value	57,177	[6]
Weighted average yield	15.00%
Weighted Average Maturity (Years)	5 years	[7]
Equity Method Investments | MSR Pool 8 Recapture Agreement
Unpaid principal balance of underlying loans
Investee Interest in Excess MSR	66.70%
Ownership percentage in equity method investees	50.00%
Amortized Cost Basis	13,312	[5]
Carrying Value	13,150	[6]
Weighted average yield	15.00%
Weighted Average Maturity (Years)	11 years 8 months	[7]
Equity Method Investments | MSRs
Unpaid principal balance of underlying loans	64,875,335			13,000,000
Ownership percentage in equity method investees			50.00%
Amortized Cost Basis	258,118	[5]
Carrying Value	$ 254,964	[6]
Weighted average yield	15.60%
Weighted Average Maturity (Years)	6 years 4 months	[7]

[1] The weighted average maturity is based on the timing of expected principal reduction on the assets.

[2] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

[3] The amortized cost basis of the Recapture Agreements is determined based on the relative fair values of the Recapture Agreements and related Excess MSRs at the time they were acquired.

[4] Carrying Value represents the fair value of the pools or Recapture Agreements, as applicable.

[5] Represents the amortized cost basis of the equity method investees in which New Residential holds a 50% interest. The amortized cost basis of the Recapture Agreements is determined based on the relative fair values of the Recapture Agreements and related Excess MSRs at the time they were acquired.

[6] Represents the carrying value of the equity method investees in which New Residential holds a 50% interest. Carrying value represents the fair value of the pools or Recapture Agreements, as applicable.

[7] The weighted average maturity represents the weighted average expected timing of the receipt of cash flows of each investment.

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INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS AT FAIR VALUE - GEOGRAPHIC DISTRIBUTION (Details 1) (MSRs)	Mar. 31, 2013
Total outstanding (percent)	100.00%
California
Total outstanding (percent)	31.70%
Florida
Total outstanding (percent)	10.10%
New York
Total outstanding (percent)	4.40%
Washington
Total outstanding (percent)	4.30%
Arizona
Total outstanding (percent)	3.80%
Texas
Total outstanding (percent)	3.60%
Colorado
Total outstanding (percent)	3.50%
Maryland
Total outstanding (percent)	3.40%
New Jersey
Total outstanding (percent)	3.20%
Virginia
Total outstanding (percent)	3.00%
Other US Locations
Total outstanding (percent)	29.00%

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INVESTMENTS IN REAL ESTATE SECURITIES - CHANGES IN ACCRETABLE YIELDS (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Investments In Real Estate Securities - Changes In Accretable Yields Details 4
Balance, beginning	$ 90,077
Additions	57,568
Accretion	(4,223)
Reclassifications from non-accretable difference	49,442
Disposals
Balance, ending	$ 192,864

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DEBT OBLIGATIONS (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended					3 Months Ended
	Jun. 06, 2013	Apr. 09, 2013	Mar. 31, 2013		Dec. 31, 2012	Mar. 31, 2013 Collateral	Mar. 31, 2013 FNMA/FHLMC Securities		Mar. 31, 2013 FNMA/FHLMC Securities Collateral		Mar. 31, 2013 Non-agency RMBS Repurchase Agreements		Mar. 31, 2013 Non-agency RMBS Repurchase Agreements Collateral		Mar. 31, 2013 Total Repurchase Agreements
Month Issued							Various	[1]			Various	[2],[3]
Debt face amount							$ 757,029	[1]			$ 158,029	[2],[3]			$ 915,058
Carrying value							757,029	[1]			158,029	[2],[3]			915,058
Final stated maturity		Jul. 09, 2013					Apr. 30, 2013	[1]			Apr. 30, 2013	[2],[3]
Contractual weighted average funding cost	one-month LIBOR plus 160 bps	one-month LIBOR plus 200 bps					0.45%	[1]			Libor + 2.00%	[2],[3]
Weighted average funding cost							0.45%	[1]			2.20%	[2],[3]			0.75%
Basis spread on variable rate	1.60%	2.00%									2.00%	[2],[3]
Weighted average maturity (years)						4 years 11 months	1 month	[1]	4 years 1 month	[1]	1 month	[2],[3]	6 years 10 months	[2],[3]	1 month
Outstanding face amount			1,538,755	[4]		1,085,367			754,496	[1]			330,871	[2],[3]
Amortized cost basis			1,286,314	[4]		1,005,792			797,547	[1]			208,245	[2],[3]
Carrying value			$ 1,318,023	[4],[5]	$ 289,756	$ 1,033,268			$ 799,455	[1]			$ 233,813	[2],[3]

[1] The counterparty of these repurchase agreements are Goldman Sachs ($343.8 million), Citi ($118.8 million), Nomura ($238.2 million) and Morgan Stanley ($56.2 million).

[2] The counterparty of these repurchase agreements is Credit Suisse.

[3] Newcastle was the guarantor of these repurchase agreements, which were subject to customary margin call provisions, see Note 12.

[4] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

[5] Fair value, which is equal to carrying value for all securities. See Note 8 regarding the estimation of fair value.

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SEGMENT REPORTING (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Jun. 06, 2013	Apr. 09, 2013	Dec. 31, 2012
Interest income	$ 16,191	$ 2,037
Interest expense	899
Net interest income	15,292	2,037
Other income (loss)	2,827	1,216
Other operating expenses	5,044	565
Net income (loss)	13,075	2,688
Investments	1,692,650
Other assets	450				84
Total assets	1,693,100				534,876
Debt	(915,058)		(47,000)	(144,000)	(150,922)
Other liabilities	(10,623)
Total liabilities	(925,681)				(156,520)
GAAP book value	767,419
Investments in equity method investees at fair value	102,588
Excess MSRs
Interest income	10,035	2,037
Interest expense
Net interest income	10,035	2,037
Other income (loss)	2,827	1,216
Other operating expenses	62	386
Net income (loss)	12,800	2,867
Investments	339,143
Other assets
Total assets	339,143
Debt
Other liabilities	(174)
Total liabilities	(174)
GAAP book value	338,969
Investments in equity method investees at fair value	102,588
Real Estate Securities and Loans
Interest income	6,156
Interest expense	899
Net interest income	5,257
Other income (loss)
Other operating expenses
Net income (loss)	5,257
Investments	1,353,507
Other assets	450
Total assets	1,353,957
Debt	(915,058)
Other liabilities	(87)
Total liabilities	(915,145)
GAAP book value	438,812
Investments in equity method investees at fair value
Corporate
Interest income
Interest expense
Net interest income
Other income (loss)
Other operating expenses	4,982	179
Net income (loss)	(4,982)	(179)
Investments
Other assets
Total assets
Debt
Other liabilities	(10,362)
Total liabilities	(10,362)
GAAP book value	(10,362)
Investments in equity method investees at fair value

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PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (Details 1) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Interest income	$ 16,191		$ 2,037
Interest expense	899
Net Interest Income	15,292		2,037
Change in fair value of investments in excess mortgage servicing rights	1,858		1,216
Change in fair value of investments in equity method investees	969
Other Income	2,827		1,216
Expenses
General and administrative expense	2,719		411
Management fee allocated by Newcastle	2,325		154
Total Expenses	5,044		565
Net Income	13,075		2,688
Pro Forma Adjustment
Interest income	4,226	[1]
Interest expense	2,754	[2]
Net Interest Income	1,472
Change in fair value of investments in excess mortgage servicing rights
Change in fair value of investments in equity method investees
Other Income
Expenses
General and administrative expense
Management fee allocated by Newcastle	71	[3]
Total Expenses	71
Net Income	1,401
New Residential Pro Forma
Interest income	20,417
Interest expense	3,653
Net Interest Income	16,764
Change in fair value of investments in excess mortgage servicing rights	1,858
Change in fair value of investments in equity method investees	969
Other Income	2,827
Expenses
General and administrative expense	2,719
Management fee allocated by Newcastle	2,396
Total Expenses	5,115
Net Income	$ 14,476
Net Income Per Share
Basic	$ 0.06	[4]
Diluted	$ 0.06
Weighted average number of shares outstanding
Basic	235,136,756	[4]
Diluted	240,079,144	[5]

[1] Represents additional interest income from Agency RMBS acquired during the quarter ended March 31, 2103 and subsequent to March 31, 2013. The interest income was computed based on the weighted average accounting yield of the securities of 1.43%. A 1/8% increase (decrease) in the benchmark interest rate would result in an increase (decrease) in interest income of approximately $0.4 million for the three months ended March 31, 2013.

[2] Represents additional interest expense from additional repurchase agreements used to finance the real estate securities acquired subsequent to March 31, 2013. The interest expense was computed based on the actual terms of the repurchase agreements. A 1/8% increase (decrease) in the benchmark interest rate would result in an increase (decrease) in interest expense of approximately $0.4 million for the three months ended March 31, 2013.

[3] Represents additional management fees related to the capital transactions noted herein.

[4] Pro forma basic earnings per share and weighted average number of basic shares outstanding reflect an estimated number of shares of common stock outstanding based upon Newcastle's weighted average number of basic shares outstanding for the three months ended March 31, 2013 (based on a distribution ratio of one share of New Residential common stock for each share of Newcastle common stock).

[5] Pro forma diluted earnings per share and weighted average number of diluted shares outstanding reflect shares of common stock that may be issued in connection with awards granted prior to the distribution under Newcastle equity plans based on the distribution ratio noted above. While the actual dilutive impact will depend on various factors, we believe the estimate yields a reasonable approximation of the dilutive impact of the Newcastle equity plans and is based upon Newcastle's weighted average number of diluted shares outstanding.

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PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	Jun. 06, 2013	Apr. 09, 2013	Mar. 31, 2013		Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Assets
Real estate securities, available-for-sale			$ 1,318,023	[1],[2]	$ 289,756
Investments in excess mortgage servicing rights at fair value			236,555		245,036
Investments in equity method investees at fair value			102,588
Investments in equity method investees, consumer loans, at fair value
Residential mortgage loans, held-for-investment			35,484
Cash and cash equivalents
Other assets			450		84
[Assets]			1,693,100		534,876
Liabilities
Repurchase agreements	47,000	144,000	915,058		150,922
Payable related to the investments in equity method investees, excess mortgage servicing rights
Due to affiliates			7,784		5,136
Accrued expenses and other liabilities			2,839		462
[Liabilities]			925,681		156,520
Commitments and contingencies
Equity
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 253,025,645 issued and outstanding on a pro forma basis
Equity			735,710		362,830
Accumulated other comprehensive income			31,709		15,526
Total Equity			767,419		378,356
[LiabilitiesAndStockholdersEquity]			1,693,100		534,876
Pro Forma Adjustment
Assets
Real estate securities, available-for-sale			501,815	[3]
Investments in excess mortgage servicing rights at fair value			2,453	[4]
Investments in equity method investees at fair value			268,133	[5]
Investments in equity method investees, consumer loans, at fair value			247,971	[6]
Residential mortgage loans, held-for-investment
Cash and cash equivalents			102,936	[7]
Other assets
[Assets]			1,123,308
Liabilities
Repurchase agreements			477,840	[8]
Payable related to the investments in equity method investees, excess mortgage servicing rights			198,855	[9]
Due to affiliates
Accrued expenses and other liabilities
[Liabilities]			676,695
Equity
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 253,025,645 issued and outstanding on a pro forma basis			2,530	[10]
Equity			444,083	[11]
Accumulated other comprehensive income
Total Equity			446,613
[LiabilitiesAndStockholdersEquity]			1,123,308
New Residential Pro Forma
Assets
Real estate securities, available-for-sale			1,819,838
Investments in excess mortgage servicing rights at fair value			239,008
Investments in equity method investees at fair value			370,721
Investments in equity method investees, consumer loans, at fair value			247,971
Residential mortgage loans, held-for-investment			35,484
Cash and cash equivalents			102,936
Other assets			450
[Assets]			2,816,408
Liabilities
Repurchase agreements			1,392,898
Payable related to the investments in equity method investees, excess mortgage servicing rights			198,855
Due to affiliates			7,784
Accrued expenses and other liabilities			2,839
[Liabilities]			1,602,376
Equity
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 253,025,645 issued and outstanding on a pro forma basis			2,530
Equity			1,179,793
Accumulated other comprehensive income			31,709
Total Equity			1,214,032
[LiabilitiesAndStockholdersEquity]			$ 2,816,408

[1] Fair value, which is equal to carrying value for all securities. See Note 8 regarding the estimation of fair value.

[2] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

[3] Represents the carrying value of securities contributed by Newcastle to New Residential and the acquisition of additional Agency and Non-Agency RMBS subsequent to March 31, 2013 net of sales.

[4] Represents the investment in additional excess mortgage servicing rights subsequent to March 31, 2013.

[5] Represents the investment in additional equity method investees, excess mortgage servicing rights, subsequent to March 31, 2013.

[6] Represents the investments in equity method investees, consumer loans, subsequent to March 31, 2013.

[7] Represents New Residential's cash balance as of May 15, 2013 adjusted for subsequent purchases, sales and financings.

[8] Represents the additional repurchase agreements to finance the real estate securities described above, net of paydowns through June 10, 2013.

[9] Represents commitments of New Residential's investments in equity method investees.

[10] Represents 253,025,645 shares of common stock at a par value of $0.01 per share. The number of shares of common stock is based on Newcastle's shares of common stock outstanding on May 6, 2013 and a distribution ratio of one share of New Residential common stock for each share of Newcastle common stock.

[11] Represents New Residential's accumulated equity, including the additional contributions from Newcastle to New Residential subsequent to March 31, 2013, less the par value of the shares of common stock set forth above.

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INVESTMENT IN RESIDENTIAL MORTGAGE LOANS - ACTIVITIES OF RESIDENTIAL MORTGAGE LOANS (Details 1) (Reverse Mortgage Loans, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Reverse Mortgage Loans
Balance, beginning
Purchases / additional fundings	35,138
Accretion of loan discount and other amortization	346
Balance, ending	$ 35,484

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DEBT OBLIGATIONS (Tables)

3 Months Ended

Mar. 31, 2013

Debt Obligations Tables

Schedule of Debt Obligations

The following table presents certain information regarding New Residential’s debt obligations at March 31, 2013:

																Collateral
Repurchase Agreements (A)	Month Issued		Outstanding Face		Carrying Value		Final Stated Maturity	Contractual WAC			WAC			WAL		Outstanding Face		Amortized Cost Basis		Carrying Value		WAL
Agency RMBS (D)		Various	$	757,029	$	757,029	Apr-13		0.45	%		0.45	%		0.1	$	754,496	$	797,547	$	799,455		4.1
Non Agency RMBS (B) (C)		Various		158,029		158,029	Apr-13		LIBOR + 2.00%			2.20	%		0.1		330,871		208,245		233,813		6.8
			$	915,058	$	915,058						0.75	%		0.1	$	1,085,367	$	1,005,792	$	1,033,268		4.9

(A)	These repurchase agreements had approximately $0.1 million of associated accrued interest payable at March 31, 2013. All of these repurchase agreements were renewed subsequent to March 31, 2013.
(B)	The counterparty of these repurchase agreements is Credit Suisse.
(C)	Newcastle was the guarantor of these repurchase agreements, which were subject to customary margin call provisions, see Note 12.
(D)	The counterparties of these repurchase agreements are Goldman Sachs ($343.8 million), Citi ($118.8 million), Nomura ($238.2 million) and Morgan Stanley ($56.2 million).

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash Flows From Operating Activities
Net income (loss)	$ 13,075	$ 2,688
Adjustments to reconcile net income to net cash provided by (used in) operating activities (inclusive of amounts related to discontinued operations):
Change in fair value of investments in excess mortgage servicing rights	(1,858)	(1,216)
Change in fair value of investments in equity method investees	(969)
Distributions of earnings from equity method investees	1,344
Accretion of discount and other amortization	(4,798)
Change in:
Other assets	(366)
Due to affiliates	2,648	69
Accrued expenses and other liabilities	2,377	(293)
Other operating cash flows:
Cash proceeds from investments, in excess of interest income	34,436	2,422
Net cash proceeds deemed as capital distributions to Newcastle	(45,889)	(3,670)
Net cash provided by (used in) operating activities
Cash Flows From Investing Activities
Cash Flows From Financing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, Beginning of Period
Cash and Cash Equivalents, End of Period
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest expense	868
Supplemental Schedule of Non-Cash Investing and Financing Activities
Cash proceeds from investments, in excess of interest income	34,436	2,422
Acquisition of investments in excess mortgage servicing rights		3,072
Acquisition of real estate securities	227,293
Acquisition of investments in equity method investees at fair value	109,588
Acquisition of residential mortgage loans, held-for-investment	35,138
Borrowings under repurchase agreements	768,038
Repayments of repurchase agreements	3,902
Capital contributions by Newcastle	372,019	3,072
Contributions in-kind of real estate securities by Newcastle	797,811
Capital distributions to Newcastle	$ 810,025	$ 3,670

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SEGMENT REPORTING

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

SEGMENT REPORTING

2.     SEGMENT REPORTING

New Residential conducts its business through the following segments: (i) direct and indirect investments in Excess MSRs, (ii) investments in real estate securities and loans and (iii) corporate. The corporate segment consists primarily of general and administrative expenses and the allocation of management fees by the stockholder.

Summary financial data on New Residential’s segments is given below, together with a reconciliation to the same data for New Residential as a whole:

	Excess MSRs		Real Estate Securities and Loans		Corporate			Total
Three Months Ended March 31, 2013
Interest income	$	10,035	$	6,156	$	—		$	16,191
Interest expense		—		899		—			899
Net interest income		10,035		5,257		—			15,292
Other income		2,827		—		—			2,827
Other operating expenses		62		—		4,982			5,044
Net income (loss)	$	12,800	$	5,257	$	(4,982	)	$	13,075

	Excess MSRs			Real Estate Securities and Loans			Corporate			Total
March 31, 2013
Investments	$	339,143		$	1,353,507		$	—		$	1,692,650
Other assets		—			450			—			450
Total assets		339,143			1,353,957			—			1,693,100
Debt		—			(915,058	)		—			(915,058	)
Other liabilities		(174	)		(87	)		(10,362	)		(10,623	)
Total liabilities		(174	)		(915,145	)		(10,362	)		(925,681	)
GAAP book value	$	338,969		$	438,812		$	(10,362	)	$	767,419
Investments in equity method investees at fair value	$	102,588			—			—		$	102,588

	Excess MSRs		Real Estate Securities and Loans		Corporate			Total
Three Months Ended March 31, 2012
Interest income	$	2,037	$	—	$	—		$	2,037
Interest expense		—		—		—			—
Net interest income		2,037		—		—			2,037
Other income		1,216		—		—			1,216
Other operating expenses		386		—		179			565
Net Income (loss)	$	2,867	$	—	$	(179	)	$	2,688

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INVESTMENT IN RESIDENTIAL MORTGAGE LOANS

3 Months Ended

Mar. 31, 2013

Investment In Residential Mortgage Loans

INVESTMENT IN RESIDENTIAL MORTGAGE LOANS

5.     INVESTMENTS IN RESIDENTIAL MORTGAGE LOANS

On February 27, 2013, New Residential, through a subsidiary, entered into an agreement to co-invest in reverse mortgage loans with a UPB of approximately $83 million as of December 31, 2012. New Residential has invested approximately $35 million to acquire a 70% interest in the reverse mortgage loans. Nationstar has co-invested pari passu with New Residential in 30% of the reverse mortgage loans and will be the servicer of the loans performing all servicing and advancing functions and retaining the ancillary income, servicing obligations and liabilities as the servicer.

Loans for which New Residential has the intent and ability to hold for the foreseeable future, or until maturity or payoff, are classified as held-for-investment. Loans are presented in the consolidated balance sheet at cost net of any unamortized discount (or gross of any unamortized premium). New Residential determines at acquisition whether loans will be aggregated into pools based on common risk characteristics (credit quality, loan type, and date of origination or acquisition); loans aggregated into pools are accounted for as if each pool were a single loan. Income on these loans is recognized similarly to that on securities using a level yield methodology.

To the extent that residential mortgage loans are classified as held-for-investment, New Residential must periodically evaluate each of these loans or loan pools for possible impairment. Impairment is indicated when it is deemed probable that New Residential will be unable to collect all amounts due according to the contractual terms of the loan, or for loans acquired at a discount for credit losses, when it is deemed probable that New Residential will be unable to collect as anticipated. Upon determination of impairment, New Residential would establish a specific valuation allowance with a corresponding charge to earnings. New Residential continually evaluates its loans receivable for impairment. New Residential’s residential mortgage loans are aggregated into pools for evaluation based on like characteristics, such as loan type and acquisition date. Pools of loans are evaluated based on criteria such as an analysis of borrower performance, credit ratings of borrowers, loan to value ratios, the estimated value of the underlying collateral, the key terms of the loans and historical and anticipated trends in defaults and loss severities for the type and seasoning of loans being evaluated. This information is used to estimate provisions for estimated unidentified incurred losses on pools of loans. Significant judgment is required in determining impairment and in estimating the resulting loss allowance. Furthermore, New Residential must assess its intent and ability to hold its loan investments on a periodic basis. If New Residential does not have the intent to hold a loan for the foreseeable future or until its expected payoff, the loan must be classified as “held for sale” and recorded at the lower of cost or estimated value.

The following is a summary of residential mortgage loans at March 31, 2013, all of which are classified as held for investment:

Loan Type	Outstanding Face Amount		Carrying Value		Loan Count		Wtd. Avg. Yield			Wtd. Avg. Coupon (A)			Wtd. Avg. Maturity (Years) (B)		Floating Rate Loans as a % of Face Amount			Delinquent Face Amount
Reverse Mortgage Loans	$	58,586	$	35,484		331		11.81	%		5.15	%		3.9		21.0	%	N/A

(A)	Represents the stated interest rate on the loans.
(B)	The weighted average maturity is based on the expected timing of the receipt of cash flows.

Activities related to the carrying value of residential mortgage loans are as follows:

	For the Three Months Ended March 31, 2013
Balance at December 31, 2012	$	—
Purchases/additional fundings		35,138
Accretion of loan discount and other amortization		346
Balance at March 31, 2013	$	35,484

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INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS AT FAIR VALUE

3 Months Ended

Mar. 31, 2013

Investments In Excess Mortgage Servicing Rights At Fair Value

INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS AT FAIR VALUE

3.    INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS AT FAIR VALUE

Pool 1. On December 13, 2011, Newcastle announced the completion of the first co-investment between New Residential and Nationstar in Excess MSRs related to mortgage servicing rights acquired by Nationstar. New Residential invested approximately $44 million to acquire a 65% interest in the Excess MSRs on a portfolio of government-sponsored enterprise (“GSE”) residential mortgage loans with an outstanding principal balance of approximately $9.9 billion (“Pool 1”). Nationstar has co-invested on a pari passu basis with New Residential in 35% of the Excess MSRs and will be the servicer of the loans, performing all servicing and advancing functions, and retaining the ancillary income, the servicing obligations and liabilities as the servicer. Under the terms of this investment, to the extent that any loans in the portfolio are refinanced by Nationstar, the resulting Excess MSRs will be shared on a pro rata basis by New Residential and Nationstar, subject to certain limitations.

Pool 2. On June 5, 2012, Newcastle announced the completion of a co-investment between New Residential and Nationstar in Excess MSRs related to mortgage servicing rights Nationstar acquired from Bank of America. New Residential invested approximately $44 million to acquire a 65% interest in the Excess MSRs on a portfolio of residential mortgage loans with an outstanding principal balance of approximately $10.4 billion (“Pool 2”), comprised of loans in GSE pools. Nationstar has co-invested on a pari passu basis with New Residential in 35% of the Excess MSRs and will be the servicer of the loans, performing all servicing and advancing functions, and retaining the ancillary income, servicing obligations and liabilities as the servicer. Under the terms of this investment, to the extent that any loans in the portfolio are refinanced by Nationstar, the resulting Excess MSRs will be shared on a pro rata basis by New Residential and Nationstar, subject to certain limitations.

Pools 3, 4 and 5. On June 29, 2012, Newcastle announced the completion of a co-investment between New Residential and Nationstar in Excess MSRs related to mortgage servicing rights Nationstar acquired from Aurora Bank FSB, a subsidiary of Lehman Brothers Bancorp Inc. New Residential invested approximately $176.5 million to acquire a 65% interest in the Excess MSRs on a portfolio of residential mortgage loans with an outstanding principal balance of approximately $63.7 billion, comprised of approximately 75% non-conforming loans in private label securitizations and approximately 25% conforming loans in GSE pools. The portfolio is comprised of three pools: two GSE loan pools with outstanding principal balances of approximately $9.8 billion (“Pool 3”) and $6.3 billion (“Pool 4”), respectively, and a pool of non-conforming loans in private label securitizations with an outstanding principal balance of approximately $47.6 billion (“Pool 5”). Nationstar has co-invested on a pari passu basis with New Residential in 35% of the Excess MSRs and will be the servicer of the loans, performing all servicing and advancing functions, and retaining the ancillary income, servicing obligations and liabilities as the servicer. Under the terms of this investment, to the extent that any loans in the portfolio are refinanced by Nationstar, the resulting Excess MSRs will be shared on a pro rata basis by New Residential and Nationstar, subject to certain limitations.

The following is a summary of New Residential’s direct investments in Excess MSRs:

			March 31, 2013									Three Months Ended March 31, 2013
	Unpaid Principal Balance (“UPB”) of Underlying Mortgages		Amortized Cost Basis (A)		Carrying Value (B)		Weighted Average Yield			Weighted Average Maturity (Years) (C)		Changes in Fair Value Recorded in Other Income (D)
MSR Pool 1	$	8,021,789	$	29,329	$	35,333		18.0	%		4.8	$	266
MSR Pool 1 - Recapture Agreement		—		3,676		4,355		18.0	%		11.0		174
MSR Pool 2		9,038,057		32,345		33,695		17.3	%		5.0		306
MSR Pool 2 - Recapture Agreement		—		4,108		4,880		17.3	%		12.0		591
MSR Pool 3		8,758,689		26,502		30,126		17.6	%		4.7		768
MSR Pool 3 - Recapture Agreement		—		4,598		4,552		17.6	%		11.4		30
MSR Pool 4		5,586,851		10,809		11,969		17.9	%		4.6		141
MSR Pool 4 - Recapture Agreement		—		2,763		2,705		17.9	%		11.1		(43	)
MSR Pool 5		41,917,506		102,718		104,507		17.5	%		4.7		(190	)
MSR Pool 5 - Recapture Agreement		—		8,460		4,433		17.5	%		11.7		(185	)
	$	73,322,892	$	225,308	$	236,555		17.6	%		5.4	$	1,858

(A)	The amortized cost basis of the Recapture Agreements is determined based on the relative fair values of the Recapture Agreements and related Excess MSRs at the time they were acquired.
(B)	Carrying Value represents the fair value of the pools or Recapture Agreements, as applicable.
(C)	Weighted Average Maturity represents the weighted average expected timing of the receipt of expected cash flows for this investment.
(D)	The portion of the change in fair value of the Recapture Agreements relating to loans recaptured to date is reflected in the respective pool.

The table below summarizes the geographic distribution of the underlying residential mortgage loans of the direct investments in Excess MSRs at March 31, 2013:

State Concentration	Percentage of Total Outstanding
California		31.7	%
Florida		10.1	%
New York		4.4	%
Washington		4.3	%
Arizona		3.8	%
Texas		3.6	%
Colorado		3.5	%
Maryland		3.4	%
New Jersey		3.2	%
Virginia		3.0	%
Other U.S.		29.0	%
		100.0	%

Geographic concentrations of investments expose New Residential to the risk of economic downturns within the relevant states. Any such downturn in a state where New Residential holds significant investments could affect the underlying borrower’s ability to make the mortgage payment and therefore could have a meaningful, negative impact on the Excess MSRs.

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INVESTMENTS IN REAL ESTATE SECURITIES (Details Narrative) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Non-Agency RMBS purchased, face amount	$ 373,800
Agency RMBS contributed, face amount	754,500
Outstanding face amount	1,538,755	[1]
Real estate securities acquired during the period with credit quality deterioration, face amount	368,700
Real estate securities acquired during the period with credit quality deterioration, fair value	222,800
Real estate securities acquired during the period with credit quality deterioration, expected cash flows	280,400
Fixed Rate Securities
Outstanding face amount	1,100
Floating Rate Securities
Outstanding face amount	$ 1,500,000

[1] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

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RECENT ACTIVITIES (Tables)

3 Months Ended

Mar. 31, 2013

Recent Activities Tables

Schedule of outstanding options

New Residential’s outstanding options at May 15, 2013 consisted of the following:

	Number of Options		Strike Price		Maturity Date
		6,000	$	9.35	05/30/13
		116,380		10.91	07/16/13
		304,604		12.28	12/01/13
		328,350		14.17	01/09/14
		343,275		13.86	05/25/14
		162,500		16.95	11/22/14
		330,000		15.97	01/12/15
		2,000		16.68	08/01/15
		170,000		15.87	11/01/16
		242,000		16.90	01/23/17
		456,000		14.96	04/11/17
		1,676,833		3.29	03/29/21
		2,539,833		2.49	09/27/21
		2,000		2.74	12/20/21
		1,897,500		3.41	04/03/22
		2,300,000		3.67	05/21/22
		2,530,000		3.67	07/31/22
		5,750,000		5.12	01/11/23
		2,300,000		5.74	02/15/23
Total/WA		21,457,275	$	5.35

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SEGMENT REPORTING (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 06, 2013	Apr. 09, 2013	Mar. 31, 2013	Dec. 31, 2012
Investments			$ 1,692,650
Other assets			450	84
Total assets			1,693,100	534,876
Debt	(47,000)	(144,000)	(915,058)	(150,922)
Other liabilities			(10,623)
Total liabilities			(925,681)	(156,520)
GAAP book value			767,419
Investments in equity method investees at fair value			102,588
Excess MSRs
Investments			339,143
Other assets
Total assets			339,143
Debt
Other liabilities			(174)
Total liabilities			(174)
GAAP book value			338,969
Investments in equity method investees at fair value			102,588
Real Estate Securities and Loans
Investments			1,353,507
Other assets			450
Total assets			1,353,957
Debt			(915,058)
Other liabilities			(87)
Total liabilities			(915,145)
GAAP book value			438,812
Investments in equity method investees at fair value
Corporate
Investments
Other assets
Total assets
Debt
Other liabilities			(10,362)
Total liabilities			(10,362)
GAAP book value			(10,362)
Investments in equity method investees at fair value

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INVESTMENTS IN REAL ESTATE SECURITIES - UNREALIZED LOSS POSITION (Details 1) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Outstanding face amount	$ 1,538,755	[1]
Amortized cost basis	1,286,314	[1]
Weighted average rating	BB+	[1],[2]
Weighted average coupon	1.95%	[1]
Weighted average yield	3.26%
Weighted average maturity (years)	5 years 11 months	[1],[3]
Securities in an Unrealized Loss Position Less than Twelve Months
Outstanding face amount	397,038
Before Impairment - Amortized Cost Basis	332,125
Amortized cost basis	332,125
Gross unrealized losses - less than twelve months	(2,053)
Carrying value	330,072
Number of securities	24
Weighted average rating	BB
Weighted average coupon	1.99%
Weighted average yield	2.58%
Weighted average maturity (years)	6 years 8 months
Securities in an Unrealized Loss Position Greater than Twelve Months
Outstanding face amount	7,551
Before Impairment - Amortized Cost Basis	8,074
Amortized cost basis	8,074
Gross unrealized losses - twelve months or more	(6)
Carrying value	8,068
Number of securities	1
Weighted average rating	AAA
Weighted average coupon	2.77%
Weighted average yield	0.88%
Weighted average maturity (years)	4 years 8 months
Securities in a Loss Position
Outstanding face amount	404,589
Before Impairment - Amortized Cost Basis	340,199
Amortized cost basis	340,199
Total gross unrealized losses	(2,059)
Carrying value	$ 338,140
Number of securities	25
Weighted average rating	BB
Weighted average coupon	2.01%
Weighted average yield	2.54%
Weighted average maturity (years)	6 years 8 months

[1] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

[2] Represents the weighted average of the ratings of all securities in each asset type, expressed as an S and P equivalent rating. For each security rated by multiple rating agencies, the lowest rating is used. Ratings provided were determined by third party rating agencies as of a particular date, may not be current and are subject to change at any time.

[3] The weighted average maturity is based on the timing of expected principal reduction on the assets.

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FAIR VALUE OF FINANCIAL INSTRUMENTS - INVESTMENTS IN EQUITY METHOD INVESTEES LEVEL 3 (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Investments in equity method investees at fair value
Distributions of earnings from equity method investees	(1,344)
Change in fair value of investments in equity method investees	969
Investments in equity method investees at fair value	102,588
Recurring Basis | Level 3 Inputs
Investments in equity method investees at fair value
Contributions to equity method investees	109,588
Distributions of earnings from equity method investees	(1,344)
Distributions of capital from equity method investees	(6,625)
Change in fair value of investments in equity method investees	969
Investments in equity method investees at fair value	$ 102,588	[1]

[1] The notional amount represents the total unpaid principal balance of the mortgage loans underlying the Excess MSRs. Generally, New Residential does not receive an excess mortgage servicing amount on nonperforming loans.

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DEBT OBLIGATIONS (Details Narrative) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Goldman Sachs
Repurchase agreements	$ 343,800
Citi
Repurchase agreements	118,800
Nomura
Repurchase agreements	238,200
Morgan Stanley
Repurchase agreements	56,200
Total Repurchase Agreements
Interest payable	$ 100

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INVESTMENTS IN EQUITY METHOD INVESTEES - SUMMARY OF INVESTMENTS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Dec. 31, 2012
Summarized financial information:
Assets	$ 275,779	[1]
Debt
Other Liabilities	(70,603)
Equity	205,176
Investments in equity method investees at fair value	102,588
Ownership percentage in equity method investees	50.00%
Interest income	5,616
Other income (loss)	(3,154)
Expenses	(524)
Net income	$ 1,938

[1] Includes $20.8 million of deposits related to investments which have not closed at March 31, 2013.

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Consolidated Statements of Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Consolidated Statements Of Income
Interest income	$ 16,191	$ 2,037
Interest expense	899
Net Interest Income	15,292	2,037
Change in fair value of investments in excess mortgage servicing rights	1,858	1,216
Change in fair value of investments in equity method investees	969
Other Income	2,827	1,216
Expenses
General and administrative expense	2,719	411
Management fee allocated by Newcastle	2,325	154
Total Expenses	5,044	565
Net Income	$ 13,075	$ 2,688

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FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2013

Fair Value Of Financial Instruments

FAIR VALUE OF FINANCIAL INSTRUMENTS

8.     FAIR VALUE OF FINANCIAL INSTRUMENTS

U.S. GAAP requires the categorization of the fair value of financial instruments into three broad levels which form a hierarchy.

Level 1- Quoted prices in active markets for identical instruments.

Level 2- Valuations based principally on other observable market parameters, including

· Quoted prices in active markets for similar instruments,

· Quoted prices in less active or inactive markets for identical or similar instruments,

· Other observable inputs (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates), and

· Market corroborated inputs (derived principally from or corroborated by observable market data).

Level 3- Valuations based significantly on unobservable inputs.

New Residential follows this hierarchy for its financial instruments. The classifications are based on the lowest level of input that is significant to the fair value measurement.

The carrying value and fair value of New Residential’s financial assets recorded at fair value on a recurring basis at March 31, 2013 were as follows:

					Fair Value
	Principal Balance or Notional Amount		Carrying Value		Level 2		Level 3		Total
Assets:
Real estate securities, available-for-sale	$	1,538,755	$	1,318,023	$	799,455	$	518,568	$	1,318,023
Investments in Excess MSRs (A)		73,322,892		236,555		—		236,555		236,555
Investments in equity method investees at fair value (A)		64,875,335		102,588		—		102,588		102,588
	$	139,736,982	$	1,657,166	$	799,455	$	857,711	$	1,657,166

(A) The notional amount represents the total unpaid principal balance of the mortgage loans underlying the Excess MSRs. Generally, New Residential does not receive an excess mortgage servicing amount on nonperforming loans.

Investments in Excess MSRs Valuation

Fair value estimates of New Residential’s Excess MSRs were based on internal pricing models. The valuation technique is based on discounted cash flows. Significant inputs used in the valuations included expectations of prepayment rates, delinquency rates, recapture rates, the excess mortgage servicing amount of the underlying mortgage loans and discount rates that market participants would use in determining the fair values of mortgage servicing rights on similar pools of residential mortgage loans. New Residential’s management validates significant inputs and outputs of the internal pricing models by comparing them to available independent third party market parameters and models for reasonableness. New Residential believes its valuation methods and the assumptions used are appropriate and consistent with other market participants.

In order to evaluate the reasonableness of its fair value determinations, management engages an independent valuation firm to separately measure the fair value of its Excess MSRs. The independent valuation firm determines an estimated fair value range of each pool based on its own models and issues a “fairness opinion” with this range. Management compares the range included in the opinion to the value generated by its internal models. For Excess MSRs acquired prior to the current quarter, the fairness opinion relates to the valuation at the current quarter end date. For Excess MSRs acquired during the current quarter, the fairness opinion relates to the valuation at the time of acquisition. To date, New Residential has not made any significant valuation adjustments as a result of these fairness opinions.

For Excess MSRs acquired during the current quarter, New Residential revalues the Excess MSRs at the quarter end date if a payment is received between the acquisition date and the end of the quarter. Otherwise, Excess MSRs acquired during the current quarter are carried at their amortized cost basis if there has been no change in assumptions since acquisition.

In addition, in valuing the Excess MSRs, management considered the likelihood of Nationstar being removed as the servicer, which likelihood is considered to be remote. Fair value measurements of the Excess MSRs are sensitive to changes in the assumptions or methodology used to determine fair value, and such changes could result in a significant increase or decrease in the fair value. Significant increases (decreases) in the discount rates, prepayment or delinquency rates in isolation would result in a significantly lower (higher) fair value measurement, whereas significant increases (decreases) in the recapture rates or excess mortgage servicing amount in isolation would result in a significantly higher (lower) fair value measurement. Generally, a change in the delinquency rate assumption is accompanied by a directionally similar change in the assumption used for the prepayment speed.

The following table summarizes certain information regarding the inputs used in valuing the Excess MSRs owned directly and through equity method investees as of March 31, 2013:

	Significant Inputs
Held Directly (Note 3)	Prepayment Speed (A)			Delinquency (B)			Recapture Rate (C)			Excess Mortgage Servicing Amount (D)		Discount Rate
MSR Pool 1		16.1	%		10.0	%		35.0	%		28 bps		18.0	%
MSR Pool 1 - Recapture Agreement		8.0	%		10.0	%		35.0	%		21 bps		18.0	%
MSR Pool 2		16.0	%		11.0	%		35.0	%		23 bps		17.3	%
MSR Pool 2 - Recapture Agreement		8.0	%		10.0	%		35.0	%		21 bps		17.3	%
MSR Pool 3		16.2	%		12.1	%		35.0	%		23 bps		17.6	%
MSR Pool 3 - Recapture Agreement		8.0	%		10.0	%		35.0	%		21 bps		17.6	%
MSR Pool 4		18.3	%		15.8	%		35.0	%		17 bps		17.9	%
MSR Pool 4 - Recapture Agreement		8.0	%		10.0	%		35.0	%		21 bps		17.9	%
MSR Pool 5		15.0	%		N/A (E)			20.0	%		13 bps		17.5	%
MSR Pool 5 - Recapture Agreement		8.0	%		N/A (E)			20.0	%		21 bps		17.5	%
Held through Equity Method Investees (Note 6)
MSR Pool 6		19.6	%		8.8	%		35.0	%		25 bps		17.4	%
MSR Pool 6 - Recapture Agreement		10.0	%		6.0	%		35.0	%		23 bps		17.4	%
MSR Pool 7		13.8	%		8.4	%		35.0	%		16 bps		15.2	%
MSR Pool 7 - Recapture Agreement		10.0	%		5.0	%		35.0	%		19 bps		15.2	%
MSR Pool 8		15.2	%		7.4	%		35.0	%		19 bps		15.0	%
MSR Pool 8 - Recapture Agreement		10.0	%		5.0	%		35.0	%		19 bps		15.0	%

(A)	Projected annualized weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector.
(B)	Projected percentage of mortgage loans in the pool that will miss their mortgage payments.
(C)	Percentage of voluntarily prepaid loans that are expected to be refinanced by Nationstar.
(D)	Weighted average total mortgage servicing amount in excess of the basic fee.
(E)	The Excess MSR will be paid on the total UPB of the mortgage portfolio (including both performing and delinquent loans until REO).

All of the assumptions listed have some degree of market observability, based on New Residential’s knowledge of the market, relationships with market participants, and use of common market data sources. Prepayment speed and delinquency rate projections are in the form of “curves” or “vectors” that vary over the expected life of the pool. New Residential uses assumptions that generate its best estimate of future cash flows for each investment in Excess MSRs.

When valuing Excess MSRs, New Residential uses the following criteria to determine the significant inputs:

· Prepayment Speed: Prepayment speed projections are in the form of a “vector” that varies over the expected life of the pool. The prepayment vector specifies the percentage of the collateral balance that is expected to prepay voluntarily (i.e., pay off) and involuntarily (i.e., default) at each point in the future. The prepayment vector is based on assumptions that reflect factors such as the borrower’s FICO score, loan-to-value ratio, debt-to-income ratio, vintage on a loan level basis, as well as the projected effect on loans eligible for the Home Affordable Refinance Program 2.0 (“HARP 2.0”). Management considers collateral-specific prepayment experience when determining this vector. For the Recapture Agreements and recaptured loans, New Residential also considers industry research on the prepayment experience of similar loan pools (i.e., loan pools composed of refinanced loans). This data is obtained from remittance reports, market data services and other market sources.

· Delinquency Rates: For existing mortgage pools, delinquency rates are based on the recent pool-specific experience of loans that missed their latest mortgage payments. For the Recapture Agreements and recaptured loans, delinquency rates are based on the experience of similar loan pools originated by Nationstar and delinquency experience over the past year. Management believes this time period provides a reasonable sample for projecting future delinquency rates while taking into account current market conditions. Additional consideration is given to loans that are expected to become 30 or more days delinquent.

· Recapture Rates: Recapture rates are based on actual average recapture rates experienced by Nationstar on similar mortgage loan pools. Generally, New Residential looks to one year worth of actual recapture rates, which management believes provides a reasonable sample for projecting future recapture rates while taking into account current market conditions.

· Excess Mortgage Servicing Amount: For existing mortgage pools, excess mortgage servicing amount projections are based on the actual total mortgage servicing amount in excess of a basic fee. For loans expected to be refinanced by Nationstar and subject to a Recapture Agreement, New Residential considers the excess mortgage servicing amount on loans recently originated by Nationstar over the past year and other general market considerations. Management believes this time period provides a reasonable sample for projecting future excess mortgage servicing amounts while taking into account current market conditions.

· Discount Rate: The discount rates used by New Residential are derived from market data on pricing of mortgage servicing rights backed by similar collateral.

New Residential uses different prepayment and delinquency assumptions in valuing the Excess MSRs relating to the original loan pools, the Recapture Agreements and the Excess MSRs relating to recaptured loans. The prepayment speed and delinquency rate assumptions differ because of differences in the collateral characteristics, eligibility for the Home Affordable Refinance Program 2.0 (“HARP 2.0”) and expected borrower behavior for original loans and loans which have been refinanced. New Residential uses the same assumptions for recapture and discount rates when valuing Excess MSRs and Recapture Agreements. These assumptions are based on historical recapture experience and market pricing.

Excess MSRs, owned directly, measured at fair value on a recurring basis using Level 3 inputs changed during the three months ended March 31, 2013 as follows:

	Level 3 (A)
		MSR Pool 1			MSR Pool 2			MSR Pool 3			MSR Pool 4			MSR Pool 5			Total
Balance at December 31, 2012	$	40,910		$	39,322		$	35,434		$	15,036		$	114,334		$	245,036
Transfers (B)
Transfers from Level 3(B)		—			—			—			—			—			—
Transfers into Level 3(B)		—			—			—			—			—			—
Gains (losses) included in net income (C)		440			897			798			98			(375	)		1,858
Interest income		1,970			1,485			1,628			601			4,340			10,024
Purchases, sales and repayments
Purchases		—			—			—			—			—			—
Purchase adjustments		—			—			—			—			—			—
Proceeds from sales		—			—			—			—			—			—
Proceeds from repayments		(3,632	)		(3,129	)		(3,182	)		(1,061	)		(9,359	)		(20,363	)
Balance at March 31, 2013	$	39,688		$	38,575		$	34,678		$	14,674		$	108,940		$	236,555

(A)	Includes the recapture agreement for each respective pool.
(B)	Transfers are assumed to occur at the beginning of the respective period.
(C)	The gains (losses) recorded in earnings during the period are attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting dates. These gains (losses) represent the change in fair value of the Excess MSRs and are recorded in “Change in fair value of investments in excess mortgage servicing rights” in the consolidated statements of income.

Equity Method Investees Valuation

Fair value estimates of New Residential’s investments were based on internal pricing models. New Residential estimated the fair value of the assets and liabilities of the underlying entities in which it holds an equity interest. The valuation technique is based on discounted cash flows. Significant inputs represent the inputs required to estimate the fair value of the Excess MSRs held by the entities and include expectations of prepayment rates, delinquency rates, recapture rates, the excess mortgage servicing amount of the underlying mortgage loans, and discount rates that market participants would use in determining the fair values of mortgage servicing rights on similar pools of residential mortgage loans. In addition, in valuing the Excess MSRs, management considered the likelihood of Nationstar being removed as servicer, which likelihood is considered to be remote. Refer to the Investments in Excess MSRs Valuation section above for further details.

New Residential’s investments in equity method investees measured at fair value on a recurring basis using Level 3 inputs changed during the three months ended March 31, 2013 as follows:

	Three Months Ended March 31, 2013
Balance at December 31, 2012	$	—
Contributions to equity method investees		109,588
Distributions of earnings from equity method investees		(1,344	)
Distributions of capital from equity method investees		(6,625	)
Change in fair value of investments in equity method investees		969
Balance at March 31, 2013	$	102,588

Real Estate Securities Valuation

As of March 31, 2013 New Residential’s securities valuation methodology and results are further detailed as follows:

Asset Type	Outstanding Face Amount		Amortized Cost Basis		Multiple Quotes (A)		Single Quotes (B)		Total
Agency RMBS (C)	$	754,496	$	797,547	$	709,173	$	90,282	$	799,455
Non-Agency RMBS		784,259		488,767		505,241		13,327		518,568
	$	1,538,755	$	1,286,314	$	1,214,414	$	103,609	$	1,318,023

(A)	Management generally obtained pricing service quotations or broker quotations from two sources, one of which was generally the seller (the party that sold New Residential the security). Management selected one of the quotes received as being most representative of the fair value and did not use an average of the quotes. Even if New Residential receives two or more quotes on a particular security that come from non-selling brokers or pricing services, it does not use an average because management believes using an actual quote more closely represents a transactable price for the security than an average level. Furthermore, in some cases there is a wide disparity between the quotes New Residential receives. Management believes using an average of the quotes in these cases would not represent the fair value of the asset. Based on New Residential’s own fair value analysis using internal models, management selects one of the quotes which is believed to more accurately reflect fair value. New Residential never adjusts quotes received. These quotations are generally received via email and contain disclaimers which state that they are “indicative” and not “actionable” — meaning that the party giving the quotation is not bound to actually purchase the security at the quoted price.
(B)	Management was unable to obtain quotations from more than one source on these securities. The one source was generally the seller (the party that sold New Residential the security) or a pricing service.
(C)	Includes securities issued or guaranteed by U.S. Government agencies such as Fannie Mae or Freddie Mac.

Fair value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodology used to determine fair value, and such changes could result in a significant increase or decrease in the fair value. For New Residential’s investments in real estate securities categorized within Level 3 of the fair value hierarchy, the significant unobservable inputs include the discount rates, assumptions related to prepayments, default rates and loss severities. Significant increases (decreases) in any of the discount rates, default rates or loss severities in isolation would result in a significantly lower (higher) fair value measurement. The impact of changes in prepayment speeds would have differing impacts on fair value, depending on the seniority of the investment. Generally, a change in the default assumption is generally accompanied by directionally similar changes in the assumptions used for the loss severity and the prepayment speed.

Fair value estimates of New Residential’s Non-Agency RMBS were based on third party indications as of March 31, 2013 and classified as Level 3. Securities measured at fair value on a recurring basis using Level 3 inputs changed during the three months ended March 31, 2013 as follows:

	Level 3
	Non-Agency
	RMBS
Balance at December 31, 2012	$	289,756
Transfer (A)
Transfers from Level 3		—
Transfers into Level 3		—
Total Gains (Losses)
Included in net income		—
Included in comprehensive income (B)		14,267
Amortization included in interest income		4,724
Purchases, sales and repayments
Purchases		227,293
Proceeds from repayments		(17,472	)
Balance at March 31, 2013	$	518,568

(A)	Transfers are assumed to occur at the beginning of the respective period.
(B)	These gains (losses) were included in net unrealized gain (loss) on securities in the consolidated statements of comprehensive income.

Loans for Which Fair Value is Only Disclosed

The fair value of New Residential’s reverse mortgage loans held-for-investment were estimated based on a discounted cash flow analysis using internal pricing models. The significant inputs to these models include discount rates that management believes market participants would use in determining the fair values on similar pools of reverse mortgage loans. New Residential’s loans held-for-investment are categorized within Level 3 of the fair value hierarchy.

As of March 31, 2013, loans which New Residential has the intent and ability to hold into the foreseeable future are classified as held-for-investment. Loans held-for-investment are carried at the aggregate unpaid principal balance adjusted for any unamortized premium or discount, deferred fees or expenses, an allowance for loan losses, charge-offs and write-downs for impaired loans.

The following table summarizes the inputs used in valuing reverse mortgage loans as of March 31, 2013:

									Significant Input
Loan Type	Outstanding Face Amount		Carrying Value		Fair Value		Valuation Allowance/ (Reversal) In Current Year		Discount Rate
Reverse Mortgage Loans	$	58,586	$	35,484	$	37,180	$	—	10.6%

Liabilities for Which Fair Value is Only Disclosed.

Repurchase agreements are not measured at fair value in the statement of position; however, management believes that their carrying value approximates fair value. Repurchase agreements are considered to be level 2 in the valuation hierarchy with significant valuation variables including the amount and timing of expected cash flows, interest rates and collateral funding spreads.

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Consolidated Statements of Changes in Equity (Unaudited) (USD $) In Thousands	Equity	Accumulated Other Comprehensive Income (Loss)	Total
Equity, beginning at Dec. 31, 2012	$ 362,830	$ 15,526	$ 378,356
Capital contributions	372,019		372,019
Contributions in-kind	797,811		797,811
Capital distributions	(810,025)		(810,025)
Net income	13,075		13,075
Other comprehensive income		16,183	16,183
Equity, ending at Mar. 31, 2013	$ 735,710	$ 31,709	$ 767,419

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FAIR VALUE OF FINANCIAL INSTRUMENTS - REVERSE MORTGAGE LOANS (Details 6) (Reverse Mortgage Loans, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Reverse Mortgage Loans
Outstanding face amount	$ 58,586	$ 83,000
Carrying value	35,484
Fair value	37,180
Valuation allowance/(reversal) in current year
Discount rate	10.60%

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Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 06, 2013	Apr. 09, 2013	Mar. 31, 2013		Dec. 31, 2012
Assets
Real estate securities, available-for-sale			$ 1,318,023	[1],[2]	$ 289,756
Investments in excess mortgage servicing rights at fair value			236,555		245,036
Investments in equity method investees at fair value			102,588
Residential mortgage loans, held-for-investment			35,484
Other assets			450		84
[Assets]			1,693,100		534,876
Liabilities
Repurchase agreements	47,000	144,000	915,058		150,922
Due to affiliates			7,784		5,136
Accrued expenses and other liabilities			2,839		462
[Liabilities]			925,681		156,520
Commitments and contingencies
Equity
Equity			735,710		362,830
Accumulated other comprehensive income			31,709		15,526
Total Equity			767,419		378,356
[LiabilitiesAndStockholdersEquity]			$ 1,693,100		$ 534,876

[1] Fair value, which is equal to carrying value for all securities. See Note 8 regarding the estimation of fair value.

[2] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

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FAIR VALUE OF FINANCIAL INSTRUMENTS - RECURRING BASIS (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
Assets:
Real estate securities, available-for-sale	$ 1,318,023	[1],[2]	$ 289,756
Investments in excess mortgage servicing rights	236,555		245,036
Investments in equity method investees at fair value	102,588
Recurring Basis | Fair Value, Inputs, Level 2
Assets:
Real estate securities, available-for-sale	799,455
Investments in excess mortgage servicing rights
Investments in equity method investees at fair value
[AssetsFairValueDisclosure]	799,455
Recurring Basis | Level 3 Inputs
Assets:
Real estate securities, available-for-sale	518,568
Investments in excess mortgage servicing rights	236,555	[3]
Investments in equity method investees at fair value	102,588	[3]
[AssetsFairValueDisclosure]	857,711
Recurring Basis | Principal Balance or Notional Amount
Assets:
Real estate securities, available-for-sale	1,538,755
Investments in excess mortgage servicing rights	73,322,892	[3]
Investments in equity method investees at fair value	64,875,335	[3]
[AssetsFairValueDisclosure]	139,736,982
Recurring Basis | Carrying Value
Assets:
Real estate securities, available-for-sale	1,318,023
Investments in excess mortgage servicing rights	236,555	[3]
Investments in equity method investees at fair value	102,588	[3]
[AssetsFairValueDisclosure]	1,657,166
Recurring Basis | Fair Value
Assets:
Real estate securities, available-for-sale	1,318,023
Investments in excess mortgage servicing rights	236,555	[3]
Investments in equity method investees at fair value	102,588	[3]
[AssetsFairValueDisclosure]	$ 1,657,166

[1] Fair value, which is equal to carrying value for all securities. See Note 8 regarding the estimation of fair value.

[2] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

[3] The notional amount represents the total unpaid principal balance of the mortgage loans underlying the Excess MSRs. Generally, New Residential does not receive an excess mortgage servicing amount on nonperforming loans.

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PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (Tables)

3 Months Ended

Mar. 31, 2013

Pro Forma Condensed Consolidated Financial Information Tables

Pro forma condensed consolidated balance sheet

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

At March 31, 2013

	March 31, 2013 (Unaudited) (A)		Pro Forma Adjustments			New Residential Pro Forma
Assets
Real estate securities, available-for-sale	$	1,318,023	$	501,815	(B)	$	1,819,838
Investments in excess mortgage servicing rights at fair value		236,555		2,453	(C)		239,008
Investments in equity method investees, excess mortgage servicing rights, at fair value		102,588		268,133	(D)		370,721
Investments in equity method investees, consumer loans, at fair value		—		247,971	(E)		247,971
Residential mortgage loans, held-for-investment		35,484		—			35,484
Cash and cash equivalents		—		102,936	(F)		102,936
Other assets		450		—			450
	$	1,693,100	$	1,123,308		$	2,816,408
Liabilities and Equity
Liabilities
Repurchase agreements	$	915,058	$	477,840	(G)	$	1,392,898
Payable related to the investments in equity method investees, excess mortgage servicing rights		—		198,855	(H)		198,855
Due to affiliate		7,784		—			7,784
Accrued expenses and other liabilities		2,839		—			2,839
		925,681		676,695			1,602,376
Commitments and contingencies
Equity
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 253,025,645 issued and outstanding on a pro forma basis		—		2,530	(I)		2,530
Accumulated Equity		735,710		444,083	(J)		1,179,793
Accumulated other comprehensive income		31,709		—			31,709
Total Equity		767,419		446,613			1,214,032
	$	1,693,100	$	1,123,308		$	2,816,408

(A)	Represents New Residential’s historical consolidated balance sheet at March 31, 2013.
(B)	Represents the carrying value of securities contributed by Newcastle to New Residential and the acquisition of additional Agency and Non-Agency RMBS subsequent to March 31, 2013 net of sales.
(C)	Represents the investment in additional excess mortgage servicing rights subsequent to March 31, 2013.
(D)	Represents the investment in additional equity method investees, excess mortgage servicing rights, subsequent to March 31, 2013.
(E)	Represents the investments in equity method investees, consumer loans, subsequent to March 31, 2013.
(F)	Represents New Residential’s cash balance as of May 15, 2013 adjusted for subsequent purchases, sales and financings.
(G)	Represents the additional repurchase agreements to finance the real estate securities described in (B) above, net of paydowns through June 10, 2013.
(H)	Represents commitments of New Residential’s investments in equity method investees.
(I)	Represents 253,025,645 shares of common stock at a par value of $0.01 per share. The number of shares of common stock is based on Newcastle’s shares of common stock outstanding on May 6, 2013 and a distribution ratio of one share of New Residential common stock for each share of Newcastle common stock.
(J)	Represents New Residential’s accumulated equity, including the additional contributions from Newcastle to New Residential subsequent to March 31, 2013, less the par value of the shares of common stock set forth in (I) above.

Pro forma condensed consolidated statements of income

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

	Three Months Ended March 31, 2013 (A)		Pro Forma Adjustments			New Residential Pro Forma
Interest income	$	16,191	$	4,226	(B)	$	20,417
Interest expense		899		2,754	(C)		3,653
Net Interest Income		15,292		1,472			16,764
Change in fair value of investments in excess mortgage servicing rights		1,858		—			1,858
Change in fair value of investments in equity method investees		969		—			969
Other Income		2,827		—			2,827
Expenses
General and administrative expenses		2,719		—			2,719
Management fees allocated by Newcastle		2,325		71	(D)		2,396
		5,044		71			5,115
Net Income	$	13,075	$	1,401		$	14,476
Net Income Per Share
Basic		N/A				$	0.06	(E)
Diluted		N/A				$	0.06	(F)
Weighted average number of shares outstanding
Basic		N/A					235,136,756	(E)
Diluted		N/A					240,079,144	(F)

(A)	Represents New Residential’s historical consolidated statement of income for the three months ended March 31, 2013.
(B)	Represents additional interest income from Agency RMBS acquired during the quarter ended March 31, 2013 and subsequent to March 31, 2013. The interest income was computed based on the weighted average accounting yield of the securities of 1.43%. A 1/8% increase (decrease) in the benchmark interest rate would result in an increase (decrease) in interest income of approximately $0.4 million for the three months ended March 31, 2013.
(C)	Represents additional interest expense from additional repurchase agreements used to finance the real estate securities acquired subsequent to March 31, 2013. The interest expense was computed based on the actual terms of the repurchase agreements. A 1/8% increase (decrease) in the benchmark interest rate would result in an increase (decrease) in interest expense of approximately $0.4 million for the three months ended March 31, 2013.
(D)	Represents additional management fees related to the capital transactions noted herein.
(E)	Pro forma basic earnings per share and weighted average number of basic shares outstanding reflect an estimated number of shares of common stock outstanding based upon Newcastle’s weighted average number of basic shares outstanding for the three months ended March 31, 2013 (based on a distribution ratio of one share of New Residential common stock for each share of Newcastle common stock).
(F)	Pro forma diluted earnings per share and weighted average number of diluted shares outstanding reflect shares of common stock that may be issued in connection with awards granted prior to the distribution under Newcastle equity plans based on the distribution ratio noted above in (E). While the actual dilutive impact will depend on various factors, we believe the estimate yields a reasonable approximation of the dilutive impact of the Newcastle equity plans and is based upon Newcastle’s weighted average number of diluted shares outstanding.

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INVESTMENT IN RESIDENTIAL MORTGAGE LOANS (Tables)

3 Months Ended

Mar. 31, 2013

Investment In Residential Mortgage Loans Tables

Schedule of Residential Mortgage Loans

The following is a summary of residential mortgage loans at March 31, 2013, all of which are classified as held for investment:

Loan Type	Outstanding Face Amount		Carrying Value		Loan Count		Wtd. Avg. Yield			Wtd. Avg. Coupon (A)			Wtd. Avg. Maturity (Years) (B)		Floating Rate Loans as a % of Face Amount			Delinquent Face Amount
Reverse Mortgage Loans	$	58,586	$	35,484		331		11.81	%		5.15	%		3.9		21.0	%	N/A

(A)	Represents the stated interest rate on the loans.
(B)	The weighted average maturity is based on the expected timing of the receipt of cash flows.

Schedule of Activity in Carrying Value of Residential Mortgage Loans

Activities related to the carrying value of residential mortgage loans are as follows:

	For the Three Months Ended March 31, 2013
Balance at December 31, 2012	$	—
Purchases/additional fundings		35,138
Accretion of loan discount and other amortization		346
Balance at March 31, 2013	$	35,484

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INVESTMENT IN RESIDENTIAL MORTGAGE LOANS (Details Narrative) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Feb. 27, 2013	Dec. 31, 2012
Residential mortgage loans, held-for-investment	$ 35,484
Reverse Mortgage Loans
Percentage of Investment co-owned by Nationstar		30.00%
Percentage of Investment owned by New Residential		70.00%
Outstanding face amount	58,586		83,000
Residential mortgage loans, held-for-investment		$ 35,000

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FAIR VALUE OF FINANCIAL INSTRUMENTS - EXCESS MSRs LEVEL 3 (Details 2) (Level 3 Inputs, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
MSRs Pool 1
Balance, beginning	$ 40,910
Transfers
Transfers from Level 3		[1]
Transfers into Level 3		[1]
Gains (losses) included in net income	440	[2]
Interest income	1,970
Purchases, sales and repayments
Purchases
Purchase adjustments
Proceeds from sales
Proceeds from repayments	(3,632)
Balance, ending	39,688
MSRs Pool 2
Balance, beginning	39,322
Transfers
Transfers from Level 3		[1]
Transfers into Level 3		[1]
Gains (losses) included in net income	897	[2]
Interest income	1,485
Purchases, sales and repayments
Purchases
Purchase adjustments
Proceeds from sales
Proceeds from repayments	(3,129)
Balance, ending	38,575
MSRs Pool 3
Balance, beginning	35,434
Transfers
Transfers from Level 3		[1]
Transfers into Level 3		[1]
Gains (losses) included in net income	798	[2]
Interest income	1,628
Purchases, sales and repayments
Purchases
Purchase adjustments
Proceeds from sales
Proceeds from repayments	(3,182)
Balance, ending	34,678
MSRs Pool 4
Balance, beginning	15,036
Transfers
Transfers from Level 3		[1]
Transfers into Level 3		[1]
Gains (losses) included in net income	98	[2]
Interest income	601
Purchases, sales and repayments
Purchases
Purchase adjustments
Proceeds from sales
Proceeds from repayments	(1,061)
Balance, ending	14,674
MSRs Pool 5
Balance, beginning	114,334
Transfers
Transfers from Level 3		[1]
Transfers into Level 3		[1]
Gains (losses) included in net income	(375)	[2]
Interest income	4,340
Purchases, sales and repayments
Purchases
Purchase adjustments
Proceeds from sales
Proceeds from repayments	(9,359)
Balance, ending	108,940
MSRs
Balance, beginning	245,036
Transfers
Transfers from Level 3		[1]
Transfers into Level 3		[1]
Gains (losses) included in net income	1,858	[2]
Interest income	10,024
Purchases, sales and repayments
Purchases
Purchase adjustments
Proceeds from sales
Proceeds from repayments	(20,363)
Balance, ending	$ 236,555

[1] Transfers are assumed to occur at the beginning of the respective period.

[2] The gains (losses) recorded in earnings during the period are attributable to the change in unrealized gains (losses) relating to Level 3 assets still held at the reporting dates. These gains (losses) represent the change in fair value of the Excess MSRs and are recorded in "Change in fair value of investments in excess mortgage servicing rights" in the consolidated statements of income.

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PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION (Details Narrative) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Jun. 12, 2013	Mar. 31, 2013
Weighted average yield		3.26%
Agency RMBS
Entry into additional repurchase agreements	$ 290,000
Non-Agency RMBS
Entry into additional repurchase agreements	187,800
Weighted average yield		6.20%
New Residential Pro Forma
Common stock, par value		$ 0.01
Common stock, shares authorized		2,000,000,000
Common stock, shares issued		253,025,645
Common stock, shares outstanding		253,025,645
New Residential Pro Forma | Agency RMBS
Weighted average yield	1.43%
Change in benchmark interest rate (percent)	0.125%
Increase (decrease) in interest income from change in benchmark interest rate	400
Increase (decrease) in interest expense from change in benchmark interest rate	$ 400

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INVESTMENTS IN REAL ESTATE SECURITIES - CREDIT QUALITY (Details 3) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Investments In Real Estate Securities - Credit Quality Details 3
Real estate securities acquired with credit quality deterioration, face amount	$ 692,140	$ 342,013
Real estate securities acquired with credit quality deterioration, carrying value	$ 436,458	$ 212,129

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INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS AT FAIR VALUE (Details Narrative) (USD $) In Thousands, unless otherwise specified	0 Months Ended					0 Months Ended
	Dec. 13, 2011 MSRs Pool 1	Jun. 05, 2012 MSRs Pool 2	Jun. 29, 2012 MSRs Pool 3	Jun. 29, 2012 MSRs Pool 4	Jun. 29, 2012 MSRs Pool 5	Jun. 29, 2012 MSRs
Percentage of Investment co-owned by Nationstar	35.00%	35.00%				35.00%
Percentage of Investment owned by New Residential	65.00%	65.00%				65.00%
Amount invested	$ 44,000	$ 44,000				$ 176,500
Unpaid principal balance of underlying mortgage	$ 9,900,000	$ 10,400,000	$ 9,800,000	$ 6,300,000	$ 47,600,000	$ 63,700,000
Non-conforming loans in private label securitizations of portfolio (percent)						75.00%
Conforming loans in GSE pools of portfolio (percent)						25.00%

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INVESTMENTS IN REAL ESTATE SECURITIES - AVAILABLE FOR SALE (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			3 Months Ended
	Mar. 31, 2013 Integer		Dec. 31, 2012	Mar. 31, 2013 FNMA/FHLMC Securities Integer		Mar. 31, 2013 Non-Agency RMBS Integer		Jun. 12, 2013 Non-Agency RMBS
Outstanding face amount	$ 1,538,755	[1]		$ 754,496	[2]	$ 784,259		$ 156,400
Amortized cost basis	1,286,314	[1]		797,547	[2]	488,767
Gains - gross unrealized	33,768	[1]		2,832	[2]	30,936
Losses - gross unrealized	(2,059)	[1]		(924)	[2]	(1,135)
Carrying value	$ 1,318,023	[1],[3]	$ 289,756	$ 799,455	[2],[3]	$ 518,568	[3]
Number of securities	95	[1]		42	[2]	53
Weighted average rating	BB+	[1],[4]		AAA	[2],[4]	CC	[4]
Weighted average coupon	1.95%	[1]		3.29%	[2]	0.67%
Weighted average yield	3.26%			1.46%	[2]	6.20%
Weighted average maturity (years)	5 years 11 months	[1],[5]		4 years 1 month	[2],[5]	7 years 7 months	[5]
Principal Subordination - Weighted Average						7.70%	[6]

[1] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

[2] Includes securities issued or guaranteed by U.S. Government agencies such as the Federal National Mortgage Association ("Fannie Mae") or the Federal Home Loan Mortgage Corporation ("Freddie Mac").

[3] Fair value, which is equal to carrying value for all securities. See Note 8 regarding the estimation of fair value.

[4] Represents the weighted average of the ratings of all securities in each asset type, expressed as an S and P equivalent rating. For each security rated by multiple rating agencies, the lowest rating is used. Ratings provided were determined by third party rating agencies as of a particular date, may not be current and are subject to change at any time.

[5] The weighted average maturity is based on the timing of expected principal reduction on the assets.

[6] Percentage of the outstanding face amount of securities and residual interests that is subordinate to New Residential's investments.

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DEBT OBLIGATIONS

3 Months Ended

Mar. 31, 2013

Debt Obligations

DEBT OBLIGATIONS

7.     DEBT OBLIGATIONS

The following table presents certain information regarding New Residential’s debt obligations at March 31, 2013:

																Collateral
Repurchase Agreements (A)	Month Issued		Outstanding Face		Carrying Value		Final Stated Maturity	Contractual WAC			WAC			WAL		Outstanding Face		Amortized Cost Basis		Carrying Value		WAL
Agency RMBS (D)		Various	$	757,029	$	757,029	Apr-13		0.45	%		0.45	%		0.1	$	754,496	$	797,547	$	799,455		4.1
Non Agency RMBS (B) (C)		Various		158,029		158,029	Apr-13		LIBOR + 2.00%			2.20	%		0.1		330,871		208,245		233,813		6.8
			$	915,058	$	915,058						0.75	%		0.1	$	1,085,367	$	1,005,792	$	1,033,268		4.9

(A)	These repurchase agreements had approximately $0.1 million of associated accrued interest payable at March 31, 2013. All of these repurchase agreements were renewed subsequent to March 31, 2013.
(B)	The counterparty of these repurchase agreements is Credit Suisse.
(C)	Newcastle was the guarantor of these repurchase agreements, which were subject to customary margin call provisions, see Note 12.
(D)	The counterparties of these repurchase agreements are Goldman Sachs ($343.8 million), Citi ($118.8 million), Nomura ($238.2 million) and Morgan Stanley ($56.2 million).

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RECENT ACTIVITIES (Details Narrative) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended			3 Months Ended					3 Months Ended		3 Months Ended	0 Months Ended		3 Months Ended				0 Months Ended
	Jun. 06, 2013	Apr. 09, 2013	Mar. 05, 2013	Mar. 31, 2013		May 15, 2013	Apr. 29, 2013	Dec. 31, 2012	Jun. 12, 2013 Non-Agency RMBS	Mar. 31, 2013 Non-Agency RMBS	Jun. 12, 2013 Agency RMBS	Jun. 03, 2013 Independent Directors	Mar. 31, 2013 Nonqualified Stock Option and Incentive Award Plan	Mar. 31, 2013 Consumer Loan Segment	Mar. 05, 2013 Affilate of Blackstone Tactical Opportunities Advisors LLC	Mar. 05, 2013 Springleaf Finance, Inc.	May 15, 2013 the Manager	Mar. 05, 2013 Consumer Loan Company	Dec. 31, 2012 Consumer Loan Company Integer	May 20, 2013 Equity Method Investments Excess MSRs	Dec. 31, 2012 Equity Method Investments Excess MSRs
Unpaid principal balance of underlying loans																			$ 4,200,000	$ 23,000,000	$ 58,000,000
Number of loans in portfolio																			400,000
Contributions to equity method investees																		250,000
Ownership percentage in equity method investees				50.00%														30.00%
Percentage of portfolio co-invested by other parties															23.00%	47.00%		70.00%
Purchase price of portfolio financed by asset-backed notes			2,200,000
Purchase price of portfolio			3,000,000
Professional fees														2,500
Repurchase agreements	47,000	144,000		915,058				150,922			267,000
Interest rate for repurchase agreements	one-month LIBOR plus 160 bps	one-month LIBOR plus 200 bps
Basis spread of repurchase agreements	1.60%	2.00%
Initial term ending		Jul. 09, 2013
Weighted average advance rate	65.00%	70.00%
Preferred stock, par value							$ 0.01
Preferred stock, shares authorized							100,000,000
Annual incentive compensation, percentage of dollar amount (percent)																	25.00%
Simple interest rate per annum used in computing incentive compensation (percent)																	10.00%
Increase in the number of shares for the Plan based upon newly issued common stock (percent)													10.00%
Percentage limitation of shares in relation to underlying options granted to managers (percent)													10.00%
Cash						181,600
Commitment to invest to acquire interest in Excess MSRs																				40,200
Common stock shares reserved under the plan													30,000,000
Stock options granted												8,000
Exercise price of grants												$ 6.79
Dividend declared (per share)				$ 0.07
Outstanding face amount				1,538,755	[1]				156,400	784,259	97,500
Payments to acquire securities									122,000		103,000
Agency RMBS contributed, face amount				754,500							265,600
Agency RMBS contributed, fair value											$ 281,200

[1] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

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GENERAL (Details Narrative)	Mar. 31, 2013
General Details Narrative
REIT Distribution Threshold for Nontaxation	90.00%
Management fee rate (percent)	1.50%

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INVESTMENT IN RESIDENTIAL MORTGAGE LOANS - RESIDENTIAL MORTGAGE LOANS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 Integer		Dec. 31, 2012
Weighted average yield	3.26%
Weighted average coupon	1.95%	[1]
Weighted average maturity (years)	5 years 11 months	[1],[2]
Reverse Mortgage Loans
Outstanding face amount	$ 58,586		$ 83,000
Carrying value	$ 35,484
Loan count	331
Weighted average yield	11.81%
Weighted average coupon	5.15%	[3]
Weighted average maturity (years)	3 years 11 months	[4]
Floating rate loans as a percent of face amount	21.00%

[1] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

[2] The weighted average maturity is based on the timing of expected principal reduction on the assets.

[3] Represents the stated interest rate on the loans.

[4] The weighted average maturity is based on the expected timing of the receipt of cash flows.

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TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES

3 Months Ended

Mar. 31, 2013

Transactions With Affiliates And Affiliated Entities

TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES

10.     TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES

New Residential has entered into a management agreement (Note 12) with the Manager, an affiliate of Fortress. Pursuant to the Management Agreement, the Manager, under the supervision of New Residential’s board of directors, formulates investment strategies, arranges for the acquisition of assets and associated financing, monitors the performance of New Residential’s assets and provides certain advisory, administrative and managerial services in connection with the operations of New Residential. For performing these services, the Manager receives from New Residential a management fee and incentive compensation, as defined in the Management Agreement. In addition to the management fee and incentive compensation, New Residential is also responsible for reimbursing the Manager for certain expenses paid by the Manager on behalf of New Residential.

Prior to entering into a Management Agreement with FIG LLC, management fees were allocated by and due to Newcastle based on the equity used in funding the acquisition of Excess MSRs and other assets. These management fees were equal to 1.5% of gross equity, as defined in the Management Agreement between Newcastle and FIG LLC.

Due to affiliate is comprised of the following amounts due to Newcastle:

	March 31, 2013		December 31, 2012
Management fees payable	$	5,717	$	3,392
Reimbursable expenses payable		2,067		1,744
	$	7,784	$	5,136

See Notes 1, 3 and 12 for a discussion of transactions with Nationstar. As of March 31, 2013, New Residential held on its balance sheet a total face amount of $644.7 million of Non-Agency RMBS serviced by Nationstar. The total UPB of the loans underlying these Nationstar serviced Non-Agency RMBS was approximately $8.3 billion as of March 31, 2013.

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INVESTMENTS IN EQUITY METHOD INVESTEES

3 Months Ended

Mar. 31, 2013

Investments In Equity Method Investees

INVESTMENTS IN EQUITY METHOD INVESTEES

6.     INVESTMENTS IN EQUITY METHOD INVESTEES

During the first quarter of 2013, New Residential entered into investments in joint ventures (“Excess MSR joint ventures”) jointly controlled by New Residential and Fortress-managed funds investing in Excess MSRs. New Residential elected to record these investments at fair value pursuant to the fair value option for financial instruments to provide users of the financial statements with better information regarding the effects of prepayment risk and other market factors.

The following tables summarize the investments in equity method investees held by New Residential at March 31, 2013:

	March 31, 2013
Assets (A)	$	275,779
Debt		—
Other Liabilities		(70,603	)
Equity	$	205,176
New Residential’s Investment	$	102,588
New Residential’s Ownership		50.0	%

(A) Includes $20.8 million of deposits related to investments which have not closed at March 31, 2013.

	Three Months Ended March 31, 2013
Interest income	$	5,616
Other income		(3,154	)
Expenses		(524	)
Net Income	$	1,938

The following is a summary of New Residential’s Excess MSR investments made through equity method investees:

	March 31, 2013
	Unpaid Principal Balance		Investee Interest in Excess MSR			New Residential Interest in Investees			Amortized Cost Basis (A)		Carrying Value (B)		Weighted Average Yield			Weighted Average Maturity (Years) (C)
MSR Pool 6	$	11,821,572		66.7	%		50.0	%	$	42,388	$	41,453		17.4	%		4.9
MSR Pool 6 - Recapture Agreement		—		66.7	%		50.0	%		10,954		10,972		17.4	%		10.7
MSR Pool 7		36,440,577		66.7	%		50.0	%		109,420		109,048		15.2	%		5.1
MSR Pool 7 - Recapture Agreement		—		66.7	%		50.0	%		23,296		23,164		15.2	%		12.0
MSR Pool 8		16,613,186		66.7	%		50.0	%		58,748		57,177		15.0	%		5.0
MSR Pool 8 - Recapture Agreement		—		66.7	%		50.0	%		13,312		13,150		15.0	%		11.7
	$	64,875,335							$	258,118	$	254,964		15.6	%		6.3

(A)	Represents the amortized cost basis of the equity method investees in which New Residential holds a 50% interest. The amortized cost basis of the Recapture Agreements is determined based on the relative fair values of the Recapture Agreements and related Excess MSRs at the time they were acquired.
(B)	Represents the carrying value of the equity method investees in which New Residential holds a 50% interest. Carrying value represents the fair value of the pools or Recapture Agreements, as applicable.
(C)	The weighted average maturity represents the weighted average expected timing of the receipt of cash flows of each investment.

On January 4, 2013, New Residential, through a joint venture, co-invested in Excess MSRs on a portfolio of Government National Mortgage Association (“Ginnie Mae”) residential mortgage loans with a UPB of approximately $13 billion as of November 30, 2012. Nationstar acquired the related servicing rights from Bank of America in November 2012. New Residential contributed approximately $28.9 million for a 50% interest in a joint venture which acquired an approximately 67% interest in the Excess MSRs on this portfolio. The remaining interests in the joint venture will be owned by a Fortress-managed fund and the remaining interest of approximately 33% in the Excess MSRs will be owned by Nationstar. As the servicer, Nationstar will perform all servicing and advancing functions, and it will retain the ancillary income, servicing obligations and liabilities associated with this portfolio. Under the terms of this investment, to the extent that any loans in the portfolio are refinanced by Nationstar, the resulting Excess MSRs will be shared on a pro rata basis by the joint venture and Nationstar, subject to certain limitations.

On January 6, 2013 New Residential, through joint ventures, agreed to co-invest in Excess MSRs on a portfolio of four pools of residential mortgage loans with a UPB of approximately $215 billion as of November 30, 2012. Approximately 53% of the loans in this portfolio are in private label securitizations, and the remainder are owned, insured or guaranteed by Fannie Mae, Freddie Mac or Ginnie Mae. Nationstar has agreed to acquire the related servicing rights from Bank of America. New Residential committed to invest approximately $340 million (based on the November 30, 2012 UPB) for a 50% interest in a joint ventures which will acquire an approximately 67% interest in the Excess MSRs on this portfolio. As of March 31, 2013, New Residential had contributed approximately $80.7 million to the joint ventures. The remaining interests in the joint ventures will be owned by Fortress-managed funds and the remaining interest of approximately 33% in the Excess MSRs will be owned by Nationstar. As the servicer, Nationstar will perform all servicing and advancing functions, and it will retain the ancillary income, servicing obligations and liabilities associated with this portfolio. Under the terms of this investment, to the extent that any loans in the portfolio are refinanced by Nationstar, the resulting Excess MSRs will be shared on a pro rata basis by the joint ventures and Nationstar, subject to certain limitations. On January 31, 2013, New Residential completed the first closing of this co-investment. The first closing related to Excess MSRs on loans with an aggregate UPB of approximately $58 billion as of December 31, 2012, that are owned, insured, or guaranteed by Fannie Mae or Freddie Mac. There can be no assurance that New Residential will complete this investment as anticipated or at all.

The table below summarizes the geographic distribution of the underlying residential mortgage loans of the Excess MSR investments made through equity method investees at March 31, 2013:

State Concentration	Percentage of Total Outstanding (A)
California		15.2	%
Florida		7.9	%
New York		7.6	%
Texas		5.9	%
New Jersey		4.8	%
Washington		3.4	%
Virginia		3.0	%
Maryland		2.8	%
Arizona		2.5	%
Colorado		2.4	%
Other U.S.		44.5	%
		100.0	%

(A) Based on the information provided by the loan servicer as of March 31, 2013 for Pool 6 and February 28, 2013 for Pools 7 and 8.

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GENERAL

3 Months Ended

Mar. 31, 2013

General

GENERAL

1.     GENERAL

New Residential Investment Corp. (formerly known as NIC MSR LLC) (together with its subsidiaries, “New Residential”) is a Delaware corporation that was formed as a limited liability company in September 2011 for the purpose of making real estate related investments and commenced operations on December 8, 2011. On December 20, 2012, New Residential was converted to a corporation. Newcastle Investment Corp. (“Newcastle”) was the sole stockholder of New Residential until the spin-off (Note 12), which was completed on May 15, 2013. Newcastle is listed on the New York Stock Exchange under the symbol “NCT.” As sole stockholder, Newcastle generally did not have any liability for the obligations of New Residential, except as described in Note 7.

Following the spin-off, New Residential is an independent publicly traded real estate investment trust (“REIT”) primarily focused on investing in residential mortgage related assets. New Residential is listed on the New York Stock Exchange under the symbol “NRZ”.

As of March 31, 2013, New Residential had acquired, directly and through equity method investees, excess mortgage servicing rights (“Excess MSRs”) on eight pools of residential mortgage loans from Nationstar Mortgage LLC (“Nationstar”), a leading residential mortgage servicer. Furthermore, New Residential had acquired real estate securities and residential mortgage loans.

New Residential intends to elect and qualify to be taxed as a REIT for U.S. federal income tax purposes for the tax year ending December 31, 2013. As such, New Residential will generally not be subject to U.S. federal corporate income tax on that portion of its net income that is distributed to stockholders if it distributes at least 90% of its REIT taxable income to its stockholders by prescribed dates and complies with various other requirements.

New Residential has entered into a management agreement (the “Management Agreement”) with FIG LLC (the “Manager”), an affiliate of Fortress Investment Group LLC (“Fortress”), under which the Manager advises New Residential on various aspects of its business and manages its day-to-day operations, subject to the supervision of New Residential’s board of directors. For its services, the Manager is entitled to management fees and incentive compensation, both defined in, and in accordance with the terms of, the Management Agreement. For a further discussion of the Management Agreement, see Note 10. The Manager also manages Newcastle and investment funds that own a majority of Nationstar.

As of March 31, 2013, New Residential operated in three business segments: (i) investments in Excess MSRs, (ii) investments in real estate securities and loans and (iii) corporate.

The consolidated financial statements have been prepared on a spin-off basis from the consolidated financial statements and accounting records of Newcastle and reflect New Residential’s historical results of operations, financial position and cash flows, in accordance with U.S. GAAP. As presented in the Consolidated Statements of Cash Flows, New Residential did not have any cash balance during the periods presented. All of its cash activity occurred in Newcastle’s accounts during these periods. The consolidated financial statements may not be indicative of New Residential’s future performance and do not necessarily reflect what its consolidated results of operations, financial position and cash flows would have been had New Residential operated as an independent company during the periods presented.

Certain expenses of Newcastle, comprised primarily of a portion of its management fee, have been allocated to New Residential to the extent they were directly associated with New Residential. The portion of the management fee allocated to New Residential represents the product of the management fee rate payable by Newcastle (1.5%) and New Residential’s gross equity, which management believes is a reasonable method for quantifying the expense of the services provided by the employees of the Manager to New Residential. The incremental cost of certain legal, accounting and other expenses related to New Residential’s operations are reflected in the accompanying consolidated financial statements. New Residential and Newcastle do not share any expenses following the spin-off.

The accompanying consolidated financial statements and related notes of New Residential have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under U.S. generally accepted accounting principles have been condensed or omitted. In the opinion of management, all adjustments considered necessary for a fair presentation of New Residential’s financial position, results of operations and cash flows have been included and are of a normal and recurring nature. The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with New Residential’s consolidated financial statements for the year ended December 31, 2012 and notes thereto included in New Residential’s Registration Statement on Form 10 filed with the Securities and Exchange Commission. Capitalized terms used herein, and not otherwise defined, are defined in New Residential’s consolidated financial statements for the year ended December 31, 2012.

Recent Accounting Pronouncements

In February 2013, the FASB issued new guidance regarding the reporting of reclassifications out of accumulated other comprehensive income. The new guidance does not change current requirements for reporting net income or other comprehensive income in the financial statements. However, it requires companies to present the effects on the line items of net income of significant amounts reclassified out of accumulated OCI if the item reclassified is required to be reclassified to net income in its entirety during the same reporting period. Presentation should occur either on the face of the income statement where net income is presented or in the notes to the financial statements. New Residential has early adopted this accounting standard and opted to present this information in a note to the financial statements. No amounts have been reclassified out of OCI during any period presented.

The FASB has recently issued or discussed a number of proposed standards on such topics as consolidation, the definition of an investment company, financial statement presentation, revenue recognition, financial instruments, hedging and contingencies. Some of the proposed changes are significant and could have a material impact on New Residential’s reporting. New Residential has not yet fully evaluated the potential impact of these proposals, but will make such an evaluation as the standards are finalized.

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FAIR VALUE OF FINANCIAL INSTRUMENTS - INPUTS EXCESS MSRs (Details 1)	3 Months Ended
	Mar. 31, 2013
MSRs Pool 1
Held Directly (Note 3):
Prepayment speed	16.10%	[1]
Delinquency	10.00%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.28%	[4]
Discount rate	18.00%
MSR Pool 1 Recapture Agreement
Held Directly (Note 3):
Prepayment speed	8.00%	[1]
Delinquency	10.00%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.21%	[4]
Discount rate	18.00%
MSRs Pool 2
Held Directly (Note 3):
Prepayment speed	16.00%	[1]
Delinquency	11.00%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.23%	[4]
Discount rate	17.30%
MSR Pool 2 Recapture Agreement
Held Directly (Note 3):
Prepayment speed	8.00%	[1]
Delinquency	10.00%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.21%	[4]
Discount rate	17.30%
MSRs Pool 3
Held Directly (Note 3):
Prepayment speed	16.20%	[1]
Delinquency	12.10%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.23%	[4]
Discount rate	17.60%
MSR Pool 3 Recapture Agreement
Held Directly (Note 3):
Prepayment speed	8.00%	[1]
Delinquency	10.00%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.21%	[4]
Discount rate	17.60%
MSRs Pool 4
Held Directly (Note 3):
Prepayment speed	18.30%	[1]
Delinquency	15.80%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.17%	[4]
Discount rate	17.90%
MSR Pool 4 Recapture Agreement
Held Directly (Note 3):
Prepayment speed	8.00%	[1]
Delinquency	10.00%	[2]
Recapture rate	35.00%	[3]
Excess mortgage servicing amount	0.21%	[4]
Discount rate	17.90%
MSRs Pool 5
Held Directly (Note 3):
Prepayment speed	15.00%	[1]
Delinquency		[5]
Recapture rate	20.00%	[3]
Excess mortgage servicing amount	0.13%	[4]
Discount rate	17.50%
MSR Pool 5 Recapture Agreement
Held Directly (Note 3):
Prepayment speed	8.00%	[1]
Delinquency		[5]
Recapture rate	20.00%	[3]
Excess mortgage servicing amount	0.21%	[4]
Discount rate	17.50%

[1] Projected annualized weighted average lifetime voluntary and involuntary prepayment rate using a prepayment vector.

[2] Projected percentage of mortgage loans in the pool that will miss their mortgage payments.

[3] Percentage of voluntarily prepaid loans that are expected to be refinanced by Nationstar.

[4] Weighted average total mortgage servicing amount in excess of the basic fee.

[5] The Excess MSR will be paid on the total UPB of the mortgage portfolio (including both performing and delinquent loans until REO).

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INVESTMENTS IN EQUITY METHOD INVESTEES - GEOGRAPHIC DISTRIBUTION (Details 2) (Equity Method Investments)	Mar. 31, 2013
Equity Method Investments | California
Total outstanding (percent)	15.20%	[1]
Equity Method Investments | Florida
Total outstanding (percent)	7.90%	[1]
Equity Method Investments | New York
Total outstanding (percent)	7.60%	[1]
Equity Method Investments | Texas
Total outstanding (percent)	5.90%	[1]
Equity Method Investments | New Jersey
Total outstanding (percent)	4.80%	[1]
Equity Method Investments | Washington
Total outstanding (percent)	3.40%	[1]
Equity Method Investments | Virginia
Total outstanding (percent)	3.00%	[1]
Equity Method Investments | Maryland
Total outstanding (percent)	2.80%	[1]
Equity Method Investments | Arizona
Total outstanding (percent)	2.50%	[1]
Equity Method Investments | Colorado
Total outstanding (percent)	2.40%	[1]
Equity Method Investments | Other US Locations
Total outstanding (percent)	44.50%	[1]
Equity Method Investments
Total outstanding (percent)	100.00%	[1]

[1] Based on the information provided by the loan servicer as of March 31, 2013 for Pool 6 and February 28, 2013 for Pools 7 and 8.

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INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS AT FAIR VALUE - DIRECT INVESTMENTS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Weighted average yield	3.26%
Weighted average maturity (years)	5 years 11 months	[1],[2]
Change in fair value of investments recorded in other income	$ 1,858		$ 1,216
MSRs Pool 1
Unpaid principal balance of underlying loans	8,021,789
Amortized Cost Basis	29,329	[3]
Carrying Value	35,333	[4]
Weighted average yield	18.00%
Weighted average maturity (years)	4 years 10 months	[5]
Change in fair value of investments recorded in other income	266	[6]
MSR Pool 1 Recapture Agreement
Unpaid principal balance of underlying loans
Amortized Cost Basis	3,676	[3]
Carrying Value	4,355	[4]
Weighted average yield	18.00%
Weighted average maturity (years)	11 years
Change in fair value of investments recorded in other income	174	[6]
MSRs Pool 2
Unpaid principal balance of underlying loans	9,038,057
Amortized Cost Basis	32,345	[3]
Carrying Value	33,695	[4]
Weighted average yield	17.30%
Weighted average maturity (years)	5 years
Change in fair value of investments recorded in other income	306	[6]
MSR Pool 2 Recapture Agreement
Unpaid principal balance of underlying loans
Amortized Cost Basis	4,108	[3]
Carrying Value	4,880	[4]
Weighted average yield	17.30%
Weighted average maturity (years)	12 years
Change in fair value of investments recorded in other income	591	[6]
MSRs Pool 3
Unpaid principal balance of underlying loans	8,758,689
Amortized Cost Basis	26,502	[3]
Carrying Value	30,126	[4]
Weighted average yield	17.60%
Weighted average maturity (years)	4 years 8 months
Change in fair value of investments recorded in other income	768	[6]
MSR Pool 3 Recapture Agreement
Unpaid principal balance of underlying loans
Amortized Cost Basis	4,598	[3]
Carrying Value	4,552	[4]
Weighted average yield	17.60%
Weighted average maturity (years)	11 years 5 months
Change in fair value of investments recorded in other income	30	[6]
MSRs Pool 4
Unpaid principal balance of underlying loans	5,586,851
Amortized Cost Basis	10,809	[3]
Carrying Value	11,969	[4]
Weighted average yield	17.90%
Weighted average maturity (years)	4 years 7 months
Change in fair value of investments recorded in other income	141	[6]
MSR Pool 4 Recapture Agreement
Unpaid principal balance of underlying loans
Amortized Cost Basis	2,763	[3]
Carrying Value	2,705	[4]
Weighted average yield	17.90%
Weighted average maturity (years)	11 years 1 month
Change in fair value of investments recorded in other income	(43)	[6]
MSRs Pool 5
Unpaid principal balance of underlying loans	41,917,506
Amortized Cost Basis	102,718	[3]
Carrying Value	104,507	[4]
Weighted average yield	17.50%
Weighted average maturity (years)	4 years 8 months
Change in fair value of investments recorded in other income	(190)	[6]
MSR Pool 5 Recapture Agreement
Unpaid principal balance of underlying loans
Amortized Cost Basis	8,460	[3]
Carrying Value	4,433	[4]
Weighted average yield	17.50%
Weighted average maturity (years)	11 years 8 months
Change in fair value of investments recorded in other income	(185)	[6]
MSRs
Unpaid principal balance of underlying loans	73,322,892
Amortized Cost Basis	225,308	[3]
Carrying Value	236,555	[4]
Weighted average yield	17.60%
Weighted average maturity (years)	5 years 5 months
Change in fair value of investments recorded in other income	$ 1,858	[6]

[1] The weighted average maturity is based on the timing of expected principal reduction on the assets.

[2] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.

[3] The amortized cost basis of the Recapture Agreements is determined based on the relative fair values of the Recapture Agreements and related Excess MSRs at the time they were acquired.

[4] Carrying Value represents the fair value of the pools or Recapture Agreements, as applicable.

[5] Weighted Average Maturity represents the weighted average expected timing of the receipt of expected cash flows for this investment.

[6] The portion of the change in fair value of the Recapture Agreements relating to loans recaptured to date is reflected in the respective pool.

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TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
[DueToAffiliateCurrentAndNoncurrent]	$ 7,784	$ 5,136
Springleaf Finance, Inc.
Management fees payable	5,717	3,392
Reimbursable expenses payable	2,067	1,744
[DueToAffiliateCurrentAndNoncurrent]	$ 7,784	$ 5,136

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PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

3 Months Ended

Mar. 31, 2013

Pro Forma Condensed Consolidated Financial Information

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

13.     PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information was derived from the application of pro forma adjustments to the consolidated financial statements of New Residential. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the other information contained in these financial statements and related notes and with New Residential’s historical consolidated financial statements.

Condensed consolidated financial statements should be read in conjunction with the other information contained in these financial statements and related notes and with New Residential’s historical consolidated financial statements.

The unaudited pro forma information set forth below reflects the historical information of New Residential with certain adjustments. The unaudited pro forma condensed consolidated balance sheet has been adjusted to give effect to all of the transactions described below as if each had occurred on March 31, 2013, see Note 12. The unaudited pro forma condensed consolidated statement of income only includes adjustments to reflect (i) interest income from the Agency RMBS acquired subsequent to March 31, 2013; (ii) interest expense from the financing of Agency RMBS; and (iii) interest expense from the financing of certain Non-Agency RMBS, subsequent to March 31, 2013, in each case as if the transactions giving rise to (i), (ii) and (iii) had occurred on January 1, 2013. Accordingly, the unaudited pro forma condensed consolidated statement of income excludes adjustments for (i) earnings from the consumer loan co-investment transaction; (ii) earnings from the additional Excess MSR transactions; and (iii) interest income from investments in non-Agency RMBS.

· New Residential’s cash balance as of May 16, 2013 adjusted for subsequent purchases, sales and financings.

· Consumer loan co-investment transaction through equity method investees on April 1, 2013.

· Acquisition and settlement of additional Excess MSRs, directly and through equity method investees subsequent to March 31, 2013.

· Commitments to acquire additional Excess MSRs through equity method investees subsequent to March 31, 2013, see Notes 6 and 9.

· Acquisition of additional Non-Agency RMBS with a face amount of $156.4 million for approximately $122.0 million subsequent to March 31, 2013 net of sales.

· Acquisition of additional Agency RMBS with a face amount of $97.5 million for approximately $103.0 million subsequent to March 31, 2013.

· Newcastle’s contribution of an additional $265.6 million face amount of Agency RMBS subsequent to March 31, 2013.

· Entry into an additional $290.0 million of Repurchase Agreements related to additional Agency RMBS subsequent to March 31, 2013.

· Entry into an additional $187.8 million of Repurchase Agreements related to additional Non-Agency RMBS subsequent to March 31, 2013.

New Residential’s decision to include or exclude an adjustment in the unaudited pro forma condensed consolidated statement of income was based on whether such adjustment would be factually supportable and historically based, as set forth in more detail below.

With respect to Agency RMBS, Newcastle held substantial investments in Agency RMBS during the entire period covered by the pro forma statement of income. Although Newcastle did not own the exact securities contributed to New Residential for the entire period presented, management considers Agency RMBS to be fungible because, among other factors, they are guaranteed by the U.S. government and thus have consistent credit characteristics. As a result, New Residential determined that adjustments related to these securities are factually supportable.

In contrast to Agency RMBS, the yields of Non-Agency RMBS can have significant variances as a result of differences in the collateral and credit characteristics of each asset. Newcastle did not hold the specific Non-Agency RMBS contributed to New Residential during the entire period presented, and Newcastle does not have records relating to the performance of these assets prior to their acquisition. As a result, management believes that adjustments for the interest income from the Non-Agency RMBS would not be factually supportable.

The investments in equity method investees were made in newly formed entities with no historical operations. Neither New Residential nor Newcastle owned any of the underlying excluded investments prior to their acquisition by the investee entities. Furthermore, the underlying loans were not serviced by an affiliate of New Residential’s manager prior to their acquisition. As a result, Newcastle does not have records relating to the performance of these loans prior to the acquisition of the related investments.

In addition, the composition of the loan pools and the loans underlying the Excess MSRs and consumer loan investees necessarily differ from the composition of the respective pools during the period covered by the pro forma statement of income due to prepayment and default activity prior to acquisition. As a result, an adjustment related to these investees was not considered factually supportable.

In the opinion of management, all adjustments necessary to reflect the effects of the transactions described in the notes to the unaudited pro forma condensed consolidated balance sheet and pro forma condensed statement of income have been included and are based upon available information and assumptions that New Residential believes are reasonable.

Further, the historical financial information presented herein has been adjusted to give pro forma effect to events that New Residential believes are factually supportable and which are expected to have a continuing impact on New Residential’s results. However, such adjustments are estimates and may not prove to be accurate. Information regarding these adjustments is subject to risks and uncertainties that could cause actual results to differ materially from those anticipated.

These unaudited pro forma condensed consolidated financial statements are provided for information purposes only. The unaudited pro forma condensed consolidated statement of income and consolidated balance sheet do not purport to represent what New Residential’s results of operations and/or financial condition would have been had such transactions been consummated on the dates indicated, nor do they represent the financial position or results of operations of New Residential for any future date.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

At March 31, 2013

	March 31, 2013 (Unaudited) (A)		Pro Forma Adjustments			New Residential Pro Forma
Assets
Real estate securities, available-for-sale	$	1,318,023	$	501,815	(B)	$	1,819,838
Investments in excess mortgage servicing rights at fair value		236,555		2,453	(C)		239,008
Investments in equity method investees, excess mortgage servicing rights, at fair value		102,588		268,133	(D)		370,721
Investments in equity method investees, consumer loans, at fair value		—		247,971	(E)		247,971
Residential mortgage loans, held-for-investment		35,484		—			35,484
Cash and cash equivalents		—		102,936	(F)		102,936
Other assets		450		—			450
	$	1,693,100	$	1,123,308		$	2,816,408
Liabilities and Equity
Liabilities
Repurchase agreements	$	915,058	$	477,840	(G)	$	1,392,898
Payable related to the investments in equity method investees, excess mortgage servicing rights		—		198,855	(H)		198,855
Due to affiliate		7,784		—			7,784
Accrued expenses and other liabilities		2,839		—			2,839
		925,681		676,695			1,602,376
Commitments and contingencies
Equity
Common Stock, $0.01 par value, 2,000,000,000 shares authorized, 253,025,645 issued and outstanding on a pro forma basis		—		2,530	(I)		2,530
Accumulated Equity		735,710		444,083	(J)		1,179,793
Accumulated other comprehensive income		31,709		—			31,709
Total Equity		767,419		446,613			1,214,032
	$	1,693,100	$	1,123,308		$	2,816,408

(A)	Represents New Residential’s historical consolidated balance sheet at March 31, 2013.
(B)	Represents the carrying value of securities contributed by Newcastle to New Residential and the acquisition of additional Agency and Non-Agency RMBS subsequent to March 31, 2013 net of sales.
(C)	Represents the investment in additional excess mortgage servicing rights subsequent to March 31, 2013.
(D)	Represents the investment in additional equity method investees, excess mortgage servicing rights, subsequent to March 31, 2013.
(E)	Represents the investments in equity method investees, consumer loans, subsequent to March 31, 2013.
(F)	Represents New Residential’s cash balance as of May 15, 2013 adjusted for subsequent purchases, sales and financings.
(G)	Represents the additional repurchase agreements to finance the real estate securities described in (B) above, net of paydowns through June 10, 2013.
(H)	Represents commitments of New Residential’s investments in equity method investees.
(I)	Represents 253,025,645 shares of common stock at a par value of $0.01 per share. The number of shares of common stock is based on Newcastle’s shares of common stock outstanding on May 6, 2013 and a distribution ratio of one share of New Residential common stock for each share of Newcastle common stock.
(J)	Represents New Residential’s accumulated equity, including the additional contributions from Newcastle to New Residential subsequent to March 31, 2013, less the par value of the shares of common stock set forth in (I) above.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

	Three Months Ended March 31, 2013 (A)		Pro Forma Adjustments			New Residential Pro Forma
Interest income	$	16,191	$	4,226	(B)	$	20,417
Interest expense		899		2,754	(C)		3,653
Net Interest Income		15,292		1,472			16,764
Change in fair value of investments in excess mortgage servicing rights		1,858		—			1,858
Change in fair value of investments in equity method investees		969		—			969
Other Income		2,827		—			2,827
Expenses
General and administrative expenses		2,719		—			2,719
Management fees allocated by Newcastle		2,325		71	(D)		2,396
		5,044		71			5,115
Net Income	$	13,075	$	1,401		$	14,476
Net Income Per Share
Basic		N/A				$	0.06	(E)
Diluted		N/A				$	0.06	(F)
Weighted average number of shares outstanding
Basic		N/A					235,136,756	(E)
Diluted		N/A					240,079,144	(F)

(A)	Represents New Residential’s historical consolidated statement of income for the three months ended March 31, 2013.
(B)	Represents additional interest income from Agency RMBS acquired during the quarter ended March 31, 2013 and subsequent to March 31, 2013. The interest income was computed based on the weighted average accounting yield of the securities of 1.43%. A 1/8% increase (decrease) in the benchmark interest rate would result in an increase (decrease) in interest income of approximately $0.4 million for the three months ended March 31, 2013.
(C)	Represents additional interest expense from additional repurchase agreements used to finance the real estate securities acquired subsequent to March 31, 2013. The interest expense was computed based on the actual terms of the repurchase agreements. A 1/8% increase (decrease) in the benchmark interest rate would result in an increase (decrease) in interest expense of approximately $0.4 million for the three months ended March 31, 2013.
(D)	Represents additional management fees related to the capital transactions noted herein.
(E)	Pro forma basic earnings per share and weighted average number of basic shares outstanding reflect an estimated number of shares of common stock outstanding based upon Newcastle’s weighted average number of basic shares outstanding for the three months ended March 31, 2013 (based on a distribution ratio of one share of New Residential common stock for each share of Newcastle common stock).
(F)	Pro forma diluted earnings per share and weighted average number of diluted shares outstanding reflect shares of common stock that may be issued in connection with awards granted prior to the distribution under Newcastle equity plans based on the distribution ratio noted above in (E). While the actual dilutive impact will depend on various factors, we believe the estimate yields a reasonable approximation of the dilutive impact of the Newcastle equity plans and is based upon Newcastle’s weighted average number of diluted shares outstanding.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2013

Commitments And Contingencies

COMMITMENTS AND CONTINGENCIES

9.     COMMITMENTS AND CONTINGENCIES

Litigation – New Residential may, from time to time, be a defendant in legal actions from transactions conducted in the ordinary course of business. As of March 31, 2013, New Residential is not subject to any material litigation, individually or in the aggregate, nor, to management’s knowledge, is any material litigation currently threatened against New Residential.

Indemnifications – In the normal course of business, New Residential and its subsidiaries enter into contracts that contain a variety of representations and warranties and that provide general indemnifications. New Residential’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against New Residential that have not yet occurred. However, based on Newcastle’s and its own experience, New Residential expects the risk of material loss to be remote.

Capital Commitments – As of March 31, 2013, New Residential had outstanding capital commitments related to investments in joint ventures in connection with the acquisition of Excess MSRs and consumer loans. See Notes 6 and 12, respectively, for a description of these commitments.

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INVESTMENTS OF REAL ESTATE SECURITIES (Tables)

3 Months Ended

Mar. 31, 2013

Investments Of Real Estate Securities Tables

Schedule of Real Estate Securities - available for sale

The following is a summary of New Residential’s real estate securities at March 31, 2013, all of which are classified as available-for-sale and are, therefore, reported at fair value with changes in fair value recorded in other comprehensive income.

					Gross Unrealized									Weighted Average
	Outstanding Face		Amortized							Carrying		Number of		Rating								Maturity (Years)		Principal Subordination
Asset Type	Amount		Cost Basis		Gains		Losses			Value (A)		Securities		(B)		Coupon			Yield			(C)		(D)
Agency RMBS (F)	$	754,496	$	797,547	$	2,832	$	(924	)	$	799,455		42		AAA		3.29	%		1.46	%		4.1		N/A
Non-Agency RMBS		784,259		488,767		30,936		(1,135	)		518,568		53		CC		0.67	%		6.20	%		7.6		7.7	%
Total/Weighted Average (E)	$	1,538,755	$	1,286,314	$	33,768	$	(2,059	)	$	1,318,023		95		BB+		1.95	%		3.26	%		5.9

(A)	Fair value, which is equal to carrying value for all securities. See Note 8 regarding the estimation of fair value.
(B)	Represents the weighted average of the ratings of all securities in each asset type, expressed as an S&P equivalent rating. For each security rated by multiple rating agencies, the lowest rating is used. Ratings provided were determined by third party rating agencies as of a particular date, may not be current and are subject to change at any time.
(C)	The weighted average maturity is based on the timing of expected principal reduction on the assets.
(D)	Percentage of the outstanding face amount of securities and residual interests that is subordinate to New Residential’s investments.

(E)	The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.
(F)	Includes securities issued or guaranteed by U.S. Government agencies such as the Federal National Mortgage Association (“Fannie Mae”) or the Federal Home Loan Mortgage Corporation (“Freddie Mac”).

Schedule of Real Estate Securities in an Unrealized Loss Position

The following table summarizes New Residential’s securities in an unrealized loss position at March 31, 2013:

									Gross Unrealized									Weighted Average
Securities in a Loss Position	Outstanding Current Face		Before Impairment		Other Than Temporary Impairment		After Impairment		Gains		Losses			Carry Value		Number of Securities		Rating		Coupon			Yield			Maturity (Years)
Less than Twelve Months	$	397,038	$	332,125	$	—	$	332,125	$	—	$	(2,053	)	$	330,072		24		BB		1.99	%		2.58	%		6.7
Twelve or More Months		7,551		8,074		—		8,074		—		(6	)		8,068		1		AAA		2.77	%		0.88	%		4.7
Total	$	404,589	$	340,199	$	—	$	340,199	$	—	$	(2,059	)	$	338,140		25		BB		2.01	%		2.54	%		6.7

Schedule of geographic distribution of collateral securing non-agency RMBS

The table below summarizes the geographic distribution of the collateral securing New Residential’s Non-Agency RMBS at March 31, 2013:

Geographic Location	Outstanding Face Amount		Percentage of Total Outstanding
Western U.S.	$	292,665		37.3	%
Northeastern U.S.		178,621		22.8	%
Southeastern U.S.		166,243		21.2	%
Midwestern U.S.		87,029		11.1	%
Southwestern U.S.		59,696		7.6	%
Other U.S.		5		0.0	%
	$	784,259		100.0	%

Schedule of Real Estate Securities with a deteriorated credit quality rating

The following is the outstanding face amount and carrying value for such securities at December 31, 2012 and March 31, 2013:

		Outstanding Face Value		Carrying Value
December 31, 2012	$	342,013	$	212,129
March 31, 2013	$	692,140	$	436,458

Schedule of accretable yield of real estate securities

The following is a summary of the changes in accretable yield for these securities:

	For the Three Months Ended March 31, 2013
Balance at December 31, 2012	$	90,077
Additions		57,568
Accretion		(4,223	)
Reclassifications from non-accretable difference		49,442
Disposals		—
Balance at March 31, 2013	$	192,864

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SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2013

Segment Reporting Tables

Schedule of segment reporting

Summary financial data on New Residential’s segments is given below, together with a reconciliation to the same data for New Residential as a whole:

	Excess MSRs		Real Estate Securities and Loans		Corporate			Total
Three Months Ended March 31, 2013
Interest income	$	10,035	$	6,156	$	—		$	16,191
Interest expense		—		899		—			899
Net interest income		10,035		5,257		—			15,292
Other income		2,827		—		—			2,827
Other operating expenses		62		—		4,982			5,044
Net income (loss)	$	12,800	$	5,257	$	(4,982	)	$	13,075

	Excess MSRs			Real Estate Securities and Loans			Corporate			Total
March 31, 2013
Investments	$	339,143		$	1,353,507		$	—		$	1,692,650
Other assets		—			450			—			450
Total assets		339,143			1,353,957			—			1,693,100
Debt		—			(915,058	)		—			(915,058	)
Other liabilities		(174	)		(87	)		(10,362	)		(10,623	)
Total liabilities		(174	)		(915,145	)		(10,362	)		(925,681	)
GAAP book value	$	338,969		$	438,812		$	(10,362	)	$	767,419
Investments in equity method investees at fair value	$	102,588			—			—		$	102,588

	Excess MSRs		Real Estate Securities and Loans		Corporate			Total
Three Months Ended March 31, 2012
Interest income	$	2,037	$	—	$	—		$	2,037
Interest expense		—		—		—			—
Net interest income		2,037		—		—			2,037
Other income		1,216		—		—			1,216
Other operating expenses		386		—		179			565
Net Income (loss)	$	2,867	$	—	$	(179	)	$	2,688

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Document and Entity Information (USD $)	3 Months Ended
	Mar. 31, 2013	Jun. 11, 2013
Document And Entity Information
Entity Registrant Name	New Residential Investment Corp.
Entity Central Index Key	0001556593
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Par Value	$ 0.01
Entity Common Stock, Shares Outstanding		253,025,645
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2013

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INVESTMENTS IN EXCESS MORTGAGE SERVICING RIGHTS AT FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2013

Investments In Excess Mortgage Servicing Rights At Fair Value Tables

Schedule of direct investment in Excess Mortgage Servicing Rights (MSRs)

The following is a summary of New Residential’s direct investments in Excess MSRs:

			March 31, 2013									Three Months Ended March 31, 2013
	Unpaid Principal Balance (“UPB”) of Underlying Mortgages		Amortized Cost Basis (A)		Carrying Value (B)		Weighted Average Yield			Weighted Average Maturity (Years) (C)		Changes in Fair Value Recorded in Other Income (D)
MSR Pool 1	$	8,021,789	$	29,329	$	35,333		18.0	%		4.8	$	266
MSR Pool 1 - Recapture Agreement		—		3,676		4,355		18.0	%		11.0		174
MSR Pool 2		9,038,057		32,345		33,695		17.3	%		5.0		306
MSR Pool 2 - Recapture Agreement		—		4,108		4,880		17.3	%		12.0		591
MSR Pool 3		8,758,689		26,502		30,126		17.6	%		4.7		768
MSR Pool 3 - Recapture Agreement		—		4,598		4,552		17.6	%		11.4		30
MSR Pool 4		5,586,851		10,809		11,969		17.9	%		4.6		141
MSR Pool 4 - Recapture Agreement		—		2,763		2,705		17.9	%		11.1		(43	)
MSR Pool 5		41,917,506		102,718		104,507		17.5	%		4.7		(190	)
MSR Pool 5 - Recapture Agreement		—		8,460		4,433		17.5	%		11.7		(185	)
	$	73,322,892	$	225,308	$	236,555		17.6	%		5.4	$	1,858

(A)	The amortized cost basis of the Recapture Agreements is determined based on the relative fair values of the Recapture Agreements and related Excess MSRs at the time they were acquired.
(B)	Carrying Value represents the fair value of the pools or Recapture Agreements, as applicable.
(C)	Weighted Average Maturity represents the weighted average expected timing of the receipt of expected cash flows for this investment.
(D)	The portion of the change in fair value of the Recapture Agreements relating to loans recaptured to date is reflected in the respective pool.

Summary of the geographic distribution of the underlying residential mortgage loans of the direct investment in Excess MSRs

The table below summarizes the geographic distribution of the underlying residential mortgage loans of the direct investments in Excess MSRs at March 31, 2013:

State Concentration	Percentage of Total Outstanding
California		31.7	%
Florida		10.1	%
New York		4.4	%
Washington		4.3	%
Arizona		3.8	%
Texas		3.6	%
Colorado		3.5	%
Maryland		3.4	%
New Jersey		3.2	%
Virginia		3.0	%
Other U.S.		29.0	%
		100.0	%

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RECENT ACTIVITIES - OUTSTANDING OPTIONS (Details)	4 Months Ended
	May 15, 2013
Number of options	21,457,275
Strike price	5.35
Options 5/30/13
Number of options	6,000
Strike price	9.35
Maturity date	May 30, 2013
Options 07/16/13
Number of options	116,380
Strike price	10.91
Maturity date	Jul. 16, 2013
Options 12/01/13
Number of options	304,604
Strike price	12.28
Maturity date	Dec. 01, 2013
Options 01/09/14
Number of options	328,350
Strike price	14.17
Maturity date	Jan. 09, 2014
Options 05/25/14
Number of options	343,275
Strike price	13.86
Maturity date	May 25, 2014
Options 11/22/14
Number of options	162,500
Strike price	16.95
Maturity date	Nov. 22, 2014
Options 01/25/15
Number of options	330,000
Strike price	15.97
Maturity date	Jan. 12, 2015
Options 08/01/15
Number of options	2,000
Strike price	16.68
Maturity date	Aug. 01, 2015
Options 11/01/16
Number of options	170,000
Strike price	15.87
Maturity date	Nov. 01, 2016
Options 01/23/17
Number of options	242,000
Strike price	16.90
Maturity date	Jan. 23, 2017
Options 04/11/17
Number of options	456,000
Strike price	14.96
Maturity date	Apr. 11, 2017
Options 03/29/21
Number of options	1,676,833
Strike price	3.29
Maturity date	Mar. 29, 2021
Options 09/27/21
Number of options	2,539,833
Strike price	2.49
Maturity date	Sep. 27, 2021
Options 12/20/21
Number of options	2,000
Strike price	2.74
Maturity date	Dec. 20, 2021
Options 04/03/22
Number of options	1,897,500
Strike price	3.41
Maturity date	Apr. 03, 2021
Options 05/21/22
Number of options	2,300,000
Strike price	3.67
Maturity date	May 21, 2022
Options 07/31/22
Number of options	2,530,000
Strike price	3.67
Maturity date	Jul. 31, 2022
Options 01/11/23
Number of options	5,750,000
Strike price	5.12
Maturity date	Jan. 11, 2023
Options 02/15/23
Number of options	2,300,000
Strike price	5.74
Maturity date	Feb. 15, 2023

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TRANSACTIONS WITH AFFILIATES AND AFFILIATED ENTITIES (Details Narrative) (USD $) In Thousands, unless otherwise specified	Jun. 12, 2013	Mar. 31, 2013
Outstanding face amount		$ 1,538,755	[1]
Non-Agency RMBS
Outstanding face amount	156,400	784,259
Non-Agency RMBS | Serviced by Nationstar
Outstanding face amount		644,700
Unpaid principal balance of underlying loans		$ 8,300,000

[1] The total outstanding face amount of fixed rate securities was $1.1 million, and of floating rate securities was $1.5 billion.