Altisource Portfolio Solutions reported a net loss Thursday morning it plans to recover from by building business in its Hubzu real estate market and mortgage cooperative outside of legacy client relationships with industry giants Rithm and Onity. 

The net loss of $562,000 million in the second quarter was down $17.1 million from the same period in 2025. The prior year's results were heavily propped up by an $18.5 million tax-related benefit.

Altisource offset the loss of a portion of its Rithm-related business through new customer wins. They estimate these new wins represent potential annualized service revenue of $5.2 million for the servicer and real estate segment and $7.1 million for the origination segment.  

"Service revenue growth from customer wins has more than replaced the loss of a portion of the Rithm-related business as demonstrated by our more diversified customer base and growing Hubzu inventory," said William Shepro, chief executive officer of Altisource, in an earnings call.

Hubzu carries the weight

Total Hubzu inventory grew 30% since the first quarter of 2026, ending at 22,300 units on June 30. That number marked an increase from 17,200 units on March 31. 

Altisource owns Hubzu, an online real estate marketing and auction marketplace specializing in the sale of distressed real estate. Hubzu connects buyers and investors with real-estate owned properties (REO), foreclosures, and short sales.This quarter, Rithm REO inventory plummeted from 1,000 units in December 2025 to just 400 units this June. 

"Over the same period, revenue from customers other than Onity, Rithm and those associated with Onity and Rithm's portfolios increased to 65% of total service revenue from 46%. As the year progresses, we anticipate these trends to continue," said Shepro. 

High foreclosure serves as an opportunity

Service revenue reached $48.7 million, representing a 19% increase from last year and an 8% sequential increase from Q1 2026.

When a servicer has to foreclose on a house and sell it as an REO property, they use platforms like Hubzu to liquidate the inventory. When industry-wide foreclosure goes up, mortgage servicers have more defaulted properties to process, which directly drives up revenue for Altisource. 

Default and foreclosure activity is steadily increasing across the U.S. mortgage industry following years of post-pandemic lows. For the first five months of 2026, industrywide foreclosure initiations rose 14% and foreclosure sales increased 19% over last year, according to the earnings report. While still below 2019 pre-COVID levels, the upward trajectory provides a growing market for default-servicing products and Hubzu inventory. 

Last year, Altisource Portfolio Solutions did a reverse split of outstanding common stock aimed at regaining compliance with the Nasdaq Global Select Market. 

In December 2024, Altisource had received notices that it had fallen below Nasdaq's minimum requirements of a $1 bid price per share for 30 consecutive business days and a $15 million minimum market value. The company later regained compliance.

Altisource's stock was trading at $5.99 per share and down 8.69% on the trading day at the time of this writing Thursday afternoon. It closed at $6.56 on Wednesday.