Ocwen To Sell Another $25 Billion In MSRs To Nationstar

Posted by Patrick Barnard on March 24, 2015 No Comments
Categories : Mortgage Servicing

Ocwen Financial Corp.'s subsidiary, Ocwen Loan Servicing, is selling an additional $25 billion in mortgage servicing rights (MSR) to Nationstar Mortgage, an indirectly held, wholly owned subsidiary of Nationstar Mortgage Holdings Inc., as it continues to divest itself of its agency loans.

The portfolio consists of approximately 142,000 loans owned by Freddie Mac and Fannie Mae. The deal, which still must muster the usual regulatory approvals, is expected to close before midyear.

‘This transaction, on top of the one announced in February between Ocwen and Nationstar, furthers our announced corporate strategy and demonstrates the strong working relationship we have developed with Nationstar,’ says Ron Faris, CEO of Ocwen, in a release.

‘This transaction builds upon our strong track record of portfolio acquisitions while serving the needs of homeowners, and we look forward to expeditiously closing and boarding this portfolio,’ adds Jay Bray, CEO of Nationstar. ‘We will continue to work cooperatively with Ocwen as they evaluate the sale of additional agency portfolios and look forward to continuing discussions with all counterparties.’

The sale is part of Ocwen's efforts to reorganize after a spate of regulatory enforcement actions that nearly crippled its operations, ravaged its stock and strained its relationships with investors. Last week, the company announced that it is selling servicing rights on a portfolio consisting of about 55,500 loans owned by Freddie Mac, with a total principal balance of approximately $9.6 billion, to Green Tree Loan Servicing, an indirectly held, wholly owned, subsidiary of Walter Investment Management Corp.

In February, Ocwen announced that it had agreed to sell $9.8 billion in MSRs to Nationstar Mortgage Holdings Inc. That deal is expected to close by March 31, and the loans are expected to transfer to Nationstar in April.

In addition, the Wall Street Journal recently reported that Ocwen had agreed to sell $45 billion of MSRs to JPMorgan Chase & Co.

In a separate but related matter, Ocwen this week sent a letter of rebuttal to the trustees and master servicers for 119 residential mortgage-backed securities trusts in response to a notice of alleged non-performance issued on Jan. 23 by Gibbs & Bruns. That notice was sent on behalf of a group of investors, including BlackRock Financial Management, Inc., Pacific Investment Management Company, Kore Advisors, LP, Metropolitan Life Insurance Company and Neuberger Berman Europe Limited.

In its letter, Ocwen alleges that these investor groups are trying to ‘impose changes to standard servicing practices, with the goal of forcing more home foreclosures and fewer loan modifications.’

The investors' ‘pro-foreclosure, anti-modification agenda is driven by their desire to increase their own financial returns on their specific tranche-level holdings in RMBS trusts, at the expense of long-term gains to the trusts as whole, through sustainable modifications,’ the company says in its letter.

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