Nationstar Purchases Aurora Bank MSRs For $63B

Posted by Orb Staff on March 07, 2012 No Comments
Categories : Mortgage Servicing

11062_hundreds2 Nationstar Purchases Aurora Bank MSRs For $63B Nationstar Mortgage LLC, based in Lewisville, Texas, has signed a definitive agreement to acquire approximately $63 billion in residential mortgage servicing assets, as measured by unpaid principal balance, and certain other assets from Aurora Bank FSB, the Wilmington, Del.-based subsidiary of Lehman Brothers Bancorp Inc.

Nationstar's cash purchase price of Aurora Bank's mortgage servicing rights (MSRs) is approximately $268 million. The cash purchase price of the related servicing advance receivables is approximately $210 million, net of financing. Nationstar expects to enter into approximately $1.45 billion of advance financing facilities to fund the balance of the related servicing advance receivables.

According to Nationstar, the composition of the total portfolio is expected to be approximately 75% nonconforming loans in private label securitizations and approximately 25% conforming loans in government-sponsored enterprise pools.

Nationstar will fund up to approximately $170 million of the MSR purchase price with the proceeds of a co-investment by Newcastle Investment Corp., whereby Nationstar will sell to Newcastle the right to receive approximately 65% of the excess MSRs after receipt of a fixed basic servicing fee per loan. Nationstar will retain approximately 35% of the excess MSRs and all ancillary income associated with servicing the loans.

Nationstar estimates that the transaction will close in the second quarter of 2012, subject to regulatory and third-party approvals.

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