Ocwen To Buy Barclays’ HomEq

Posted by Orb Staff on June 01, 2010 No Comments
Categories : Mortgage Servicing

-based [link=http://group.barclays.com/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobheadername1=Content-Disposition&blobheadername2=MDT-Type&blobheadervalue1=inline%3B+filename%3D28-May—Barclays-announces-sale-of-HomEq-Servicing-to-Ocwen-Loan-Servicing%2C-LLC.pdf&blobheadervalue2=abinary%3B+charset%3DUTF-8&blobkey=id&blobtable=MungoBlobs&blobwhere=1231868326821&ssbinary=true]Barclays Bank PLC[/link] on Friday agreed to sell HomEq Servicing, its U.S. mortgage servicing business, to Ocwen Loan Servicing LLC, a subsidiary of West Palm Beach, Fla.-based Ocwen Financial Corp., for a consideration of approximately $1.3 billion, payable in cash on completion. The consideration is subject to an adjustment mechanism based on the unpaid principal balance (UPB) of the servicing portfolio and the value of certain other assets at completion of the transaction, Barclays says. As part of the transaction, Barclays has agreed to provide Ocwen with approximately $1 billion in secured financing and may assist Ocwen in raising additional third-party financing. Completion is subject to customary conditions, including competition clearance, and is expected to occur in the third quarter of this year. As of the end of March, HomEq serviced mortgages with an unpaid principal balance of approximately $28 billion. According to Fitch Ratings, HomEq's portfolio shrank by 39,000 loans from February 2009 through January 2010. The total UPB during that time period fell from $34 billion to approximately $24.2 billion, Fitch adds. The principal assets subject to the transaction are the mortgage servicing rights and associated servicer advances, as well as the servicing platform based in Sacramento, Calif., and Raleigh, N.C.. In converting trial modifications into permanent status under the federal Home Affordable Modification Program, Ocwen and HomEq tied as the program's highest-ranking servicers in the U.S. Treasury Department's April [link=http://www.mortgageorb.com/e107_plugins/content/content_lt.php?content.5907 ]report[/link]. The Treasury numbers show that Ocwen and HomEq each converted about 83% of their trial mods into permanent workouts. SOURCE: [link=http://group.barclays.com/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobheadername1=Content-Disposition&blobheadername2=MDT-Type&blobheadervalue1=inline%3B+filename%3D28-May—Barclays-announces-sale-of-HomEq-Servicing-to-Ocwen-Loan-Servicing%2C-LLC.pdf&blobheadervalue2=abinary%3B+charset%3DUTF-8&blobkey=id&blobtable=MungoBlobs&blobwhere=1231868326821&ssbinary=true]Barclays

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